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EXHIBIT 10.1
[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIALITY HAS BEEN REQUESTED FOR THIS CONFIDENTIAL INFORMATION. THE
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.]
LICENSE AGREEMENT
BETWEEN
INSPIRE PHARMACEUTICALS, INC.
AND
KIRIN BREWERY COMPANY, LTD., PHARMACEUTICAL DIVISION
DATED AS OF
SEPTEMBER 12, 2000
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TABLE OF CONTENTS
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1. DEFINITIONS........................................................... 1
1.1 Affiliate.................................................... 1
1.2 cGMP......................................................... 1
1.3 Compound..................................................... 1
1.4 Compound Specifications...................................... 2
1.5 Confidential Information..................................... 2
1.6 Controlled By................................................ 2
1.7 Coordinating Committee....................................... 2
1.8 Development Liaison.......................................... 2
1.9 Development Program.......................................... 2
1.10 Effective Date............................................... 2
1.11 Field........................................................ 2
1.12 First Commercial Sale........................................ 2
1.13 IND.......................................................... 2
1.14 Invention.................................................... 2
1.15 Know-how..................................................... 2
1.16 Licensed Claim............................................... 3
1.17 Licensed Technology.......................................... 3
1.18 Listed Price................................................. 3
1.19 Major Country................................................ 3
1.20 Net Sales.................................................... 3
1.21 Party........................................................ 3
1.22 Patents...................................................... 3
1.23 Product...................................................... 3
1.24 Registration................................................. 4
1.25 Registration Applications.................................... 4
1.26 Regulatory Authority......................................... 4
1.27 Strategic Partners........................................... 4
1.28 Second Generation Compound................................... 4
1.29 Territory.................................................... 4
1.30 Third Party.................................................. 4
1.31 Trademark.................................................... 4
2. REPRESENTATIONS AND WARRANTIES........................................ 4
2.1 Representations and Warranties of Both Parties............... 4
2.2 Representations and Warranties of Inspire.................... 5
2.3 Representations and Warranties of Kirin...................... 5
3. COORDINATING COMMITTEE................................................ 6
3.1 Members; Chairperson......................................... 6
3.2 Responsibilities............................................. 6
3.3 Decisions.................................................... 7
3.4 Meetings..................................................... 7
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3.5 Minutes............................................... 8
3.6 Term.................................................. 8
3.7 Expenses.............................................. 8
4. DEVELOPMENT PROGRAM............................................ 8
4.1 Generally............................................. 8
4.2 Specific Kirin Responsibilities....................... 9
4.3 Inspire Activities.................................... 10
4.4 Development Liaison Functions......................... 11
4.5 Regulatory Matters.................................... 11
4.6 Funding............................................... 12
4.7 Liability............................................. 12
4.8 Termination........................................... 12
5. GRANT OF RIGHTS; MARKETING..................................... 13
5.1 Development License................................... 13
5.2 Commercialization License............................. 13
5.3 Exclusivity........................................... 13
5.4 Grantback Rights...................................... 13
5.5 Marketing Obligations, Rights......................... 13
5.6 Right of First Refusal................................ 14
5.7 Trademarks............................................ 14
5.8 Adverse Reaction Reporting............................ 15
6. MILESTONES AND ROYALTIES....................................... 16
6.1 Up-front Payments..................................... 16
6.2 Development Liaison Fees.............................. 16
6.3 Milestone Payments.................................... 16
6.4 Royalty Payments...................................... 17
6.5 Post-Commercialization Milestones..................... 17
6.6 Reductions for Generic Competition.................... 18
6.7 Reduction for Patent Infringement..................... 18
6.8 Maximum Reduction of Royalties........................ 18
6.9 Obligation to Pay Royalties........................... 18
7. PAYMENTS AND REPORTS........................................... 19
7.1 Payments.............................................. 19
7.2 Mode of Payment....................................... 19
7.3 Records Retention..................................... 19
7.4 Audit Request......................................... 19
7.5 Cost of Audit......................................... 19
7.6 No Non-Monetary Consideration for Sales............... 20
7.7 Taxes................................................. 20
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8. MANUFACTURE AND SUPPLY........................................ 20
8.1 Manufacture of Compound.............................. 20
8.2 Formuation Technology................................ 20
8.3 Commercial Supply Agreement for Finished Product..... 21
9. OWNERSHIP; PATENTS............................................ 21
9.1 Ownership............................................ 21
9.2 Patent Maintenance................................... 21
9.3 Patent Enforcement................................... 23
9.4 Infringement Action by Third Parties................. 23
10. PUBLICATION; CONFIDENTIALITY.................................. 24
10.1 Notification......................................... 24
10.2 Review............................................... 24
10.3 Exclusions........................................... 25
10.4 Confidentiality; Exceptions.......................... 25
10.5 Exceptions to Obligation............................. 25
10.6 Limitations on Use................................... 26
10.7 Remedies............................................. 26
11. RECALL; INDEMNIFICATION....................................... 26
11.1 Investigation; Recall................................ 26
11.2 Indemnification by Kirin............................. 26
11.3 Indemnification by Inspire........................... 27
11.4 Notice of Indemnification............................ 27
11.5 Complete Indemnification............................. 27
12. TERM; TERMINATION............................................. 27
12.1 Term................................................. 27
12.2 Termination for Cause................................ 27
12.3 Termination by Kirin................................. 28
12.4 Effect of Expiration or Termination.................. 28
12.5 Accrued Rights; Surviving Obligations................ 30
13. FORCE MAJEURE................................................. 30
13.1 Events of Force Majeure.............................. 30
14. MISCELLANEOUS................................................. 30
14.1 Relationship of Parties.............................. 30
14.2 Assignment........................................... 30
14.3 Books and Records.................................... 31
14.4 Further Actions...................................... 31
14.5 Notice............................................... 31
14.6 Use of Name.......................................... 32
14.7 Public Announcements................................. 32
14.8 Waiver............................................... 32
14.9 Compliance with Law.................................. 32
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14.10 Severability........................................ 32
14.11 Amendment........................................... 32
14.12 Governing Law; English Original Controlling......... 32
14.13 Arbitration......................................... 33
14.14 Entire Agreement.................................... 33
14.15 Parties in Interest................................. 33
14.16 Descriptive Headings................................ 33
14.17 Counterparts........................................ 33
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LIST OF EXHIBITS
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EXHIBIT A INITIAL PATENTS
EXHIBIT B INITIAL MEMBERS OF COORDINATING COMMITTEE
(iv)
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LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement"), dated as of September 12, 2000,
is entered into by and between Inspire Pharmaceuticals, Inc., a corporation
organized and existing under the laws of the State of Delaware, having offices
located at 4222 Emperor Boulevard, Suite 470, Durham, North Carolina 27703, USA
("Inspire"), and Kirin Brewery Company, Ltd., Pharmaceutical Division, a
corporation organized under the laws of Japan, having offices located at 26-1,
Jingumae 6-Chome, Shibuya-ku, Tokyo 150-8011, Japan ("Kirin").
PRELIMINARY STATEMENTS
----------------------
A. Inspire owns, and/or has exclusive rights to, the Patents and Know-How
in existence as of the Effective Date relating to the Compound.
B. Kirin and/or its Affiliates have the personnel, facilities and
expertise necessary for the development and commercialization of the Product in
the Territory.
C. Kirin wishes to develop and commercialize the Product in the
Territory, and Inspire wishes to have Kirin do so, upon the terms and conditions
set forth in this Agreement. In connection therewith, Kirin desires to obtain,
and Inspire desires to grant to Kirin, an exclusive license under the Licensed
Technology with respect to the commercialization of the Product in the Territory
for applications in the Field, all on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing Preliminary Statements
and the mutual agreements and covenants set forth herein, the Parties hereby
agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings set
forth in this Section 1 unless context dictates otherwise:
1.1 "Affiliate" with respect to any Party, shall mean any entity
controlling, controlled by, or under common control with, such Party. For these
purposes, "control" shall refer to: (i) the possession, directly or indirectly,
of the power to direct the management or policies of an entity, whether through
the ownership of voting securities, by contract or otherwise, or (ii) the
ownership, directly or indirectly, of at least 50% of the voting securities or
other ownership interest of an entity.
1.2 "cGMP" shall mean current Good Manufacturing Practice as defined in
Parts 210 and 211 of Title 21 of the U.S. Code of Federal Regulations, as may be
amended from time to time, or any successor thereto.
1.3 "Compound" shall mean the chemical compound designated as INS316,
whose chemical name is UTP (Uridine 5'-Triphosphate).
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1.4 "Compound Specifications" shall mean the specifications for the
Compound agreed upon by the Parties in consideration of the regulatory
requirements in each country in the Territory, as may be amended from time to
time.
1.5 "Confidential Information" shall have the meaning assigned to such
term in Section 10.4.
1.6 "Controlled By", with respect to Patents, Know-how or Inventions,
shall mean that a Party has the exclusive right to make, use and sell such
Patent, Know-how or Invention, or otherwise that a Party has the right to grant
the rights and licenses granted by such Party under this Agreement without
violating or conflicting with any rights of Third Parties.
1.7 "Coordinating Committee" shall have the meaning assigned to such
term in Section 3.1.
1.8 "Development Liaison" shall initially be Fred Johnson, Ph.D., and
thereafter shall be any person subsequently appointed by Inspire, who shall be
reasonably acceptable to Kirin, to perform the functions set forth in Section
4.4.
1.9 "Development Program" shall mean the development program with respect
to the Product conducted by Kirin to obtain Registration of the Product in each
country in the Territory pursuant to Section 4.
1.10 "Effective Date" shall mean the date of this Agreement.
1.11 "Field" shall mean use as an acute use agent to facilitate production
of a specimen for use in diagnosing, monitoring, staging or detecting diseases
and/or infections. All therapeutic uses are expressly excluded from the Field.
1.12 "First Commercial Sale" shall mean the first sale for use or
consumption by the general public of the Product in any country in the Territory
after all required Registrations have been granted, or after such sale is
otherwise permitted, by the Regulatory Authority in such country.
1.13 "IND" shall mean any filing made with the Regulatory Authority in any
country in the Territory for initiating clinical trials in such country with
respect to the Product.
1.14 "Invention" shall mean any new or useful process, manufacture,
compound or composition of matter relating to the Compound or the Product
(including, without limitation, the formulation, delivery or use thereof),
whether patentable or unpatentable, or any improvement thereof, that is
conceived or first reduced to practice or demonstrated to have utility during
the term of this Agreement.
1.15 "Know-how" shall mean any and all Inventions, improvements,
discoveries, claims, formulae, processes, trade secrets, technologies and know-
how (including confidential data and Confidential Information) that is
generated, owned or Controlled By Inspire at any time before or during the term
of this Agreement relating to, derived from or useful for the manufacture, use
or sale
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of the Compound or the Product, including, without limitation, synthesis,
preparation, recovery and purification processes and techniques, control methods
and assays, chemical data, toxicological and pharmacological data and
techniques, clinical data, medical uses, product forms and product formulations
and specifications.
1.16 "Licensed Claim" shall mean any claim of any Patent that relates to
and is necessary or useful for use and sale of the Compound or the Product,
which claim has not been held invalid or unenforceable by decision of a court or
other governmental agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which is not admitted to be invalid
through disclaimer or otherwise not admitted by Inspire to be invalid.
1.17 "Licensed Technology" shall mean the Licensed Claims and Know-how,
collectively.
1.18 "Listed Price" shall have the meaning assigned to such term in
Section 6.3.
1.19 "Major Country" shall mean each of Japan, China, South Korea and
Taiwan.
1.20 "Net Sales" shall mean, with respect to the Product, the gross amount
invoiced for the Product by Kirin and/or its Affiliates, if any, in arm's length
sales to Third Parties, commencing with the First Commercial Sale, less
deductions for: (i) trade, quantity and/or cash discounts, allowances and
rebates actually allowed or given; (ii) freight, postage, shipping containers,
shipping insurance and other transportation expenses (if separately identified
in such invoice); (iii) credits or refunds actually allowed for rejections,
defects or recalls of such Product, outdated or returned Product, or because of
rebates or retroactive price reductions; and (iv) sales, value-added, excise
taxes, tariffs and duties, and other taxes directly related to the sale, to the
extent that such items are included in the gross invoice price (but not
including taxes assessed against the income derived from such sale). Such
amounts shall be determined from the books and records maintained by Kirin
and/or its Affiliates, as applicable.
1.21 "Party" shall mean Inspire or Kirin and, when used in the plural,
shall mean Inspire and Kirin.
1.22 "Patents" shall mean the patents set forth on Exhibit A, and any other
patents or patent applications in the Territory owned or Controlled By Inspire
during the term of this Agreement that relate to the Compound or the Product,
together with any patents that may issue therefor in the Territory, including
any and all extensions, renewals, continuations, continuations-in-part,
divisions, patents-of-additions, reissues, supplementary protection certificates
or foreign counterparts of any of the foregoing.
1.23 "Product" shall mean all formulations of any product for use in the
Field, including line extensions, that contain the Compound as an active
ingredient, the manufacture, use or sale of which either: (i) uses any of the
Know-how; and/or (ii) is covered by one or more Licensed Claims and, but for
this Agreement, would constitute an infringement (whether directly,
contributorily or by inducement) thereof.
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1.24 "Registration" shall mean, with respect to each country in the
Territory, approval of the Registration Application for the Product filed in
such country, including pricing or reimbursement, where applicable, by the
Regulatory Authority in such country.
1.25 "Registration Application" shall mean any filing(s) made with the
Regulatory Authority in any country in the Territory for regulatory approval of
the manufacture and sale of the Product in such country.
1.26 Regulatory Authority" shall mean the authority(ies) in each country in
the Territory with responsibility for granting regulatory approval for the
manufacturing and sale of the Product in such country, and any successor(s)
thereto.
1.27 "Strategic Partners" shall mean strategic partners and/or licensees of
Inspire (other than Kirin) with whom Inspire is collaborating, or to whom
Inspire has granted a license relating to the Compound and/or the Products,
either outside of the Field or outside of the Territory, or who are
manufacturing Compound or Products, in whole or in part, for Inspire.
1.28 "Second Generation Compound" shall mean any improved nucleotide
5'-triphosphate, 5'-diphosphate or 5'-monophosphate compound related to the
Compound which has utility as a product for use in the Field and which Inspire
owns or to which Inspire has exclusive rights.
1.29 "Territory" shall mean Japan, China (People's Republic of China,
including Hong Kong and Macao), South Korea, North Korea, Taiwan, the
Philippines, Indonesia, Singapore, Malaysia, Vietnam, Thailand, Laos, Myanmar,
Cambodia, India, Pakistan, Bangladesh, Mongolia, Nepal, Brunei and Bhutan.
1.30 "Third Party" shall mean any person who or which is neither a Party
nor an Affiliate of a Party.
1.31 "Trademark" shall have the meaning assigned thereto in Section 5.7.
2. REPRESENTATIONS AND WARRANTIES.
2.1 Representations and Warranties of Both Parties. Each Party
represents and warrants to the other Party, as of the Effective Date, that:
(a) such Party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof;
(b) such Party is free to enter into this Agreement;
(c) in so doing, such Party will not violate any other
agreement to which it is a party;
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(d) such Party has taken all corporate action necessary to
authorize the execution and delivery of this Agreement and the performance of
its obligations under this Agreement; and
(e) no person or entity has or will have, as a result of the
transactions contemplated by this Agreement, any right, interest or valid claim
against or upon such Party for any commission, fee or other compensation as a
finder or broker because of any act or omission by such Party or any of its
agents, except that Pacific Rim Ventures has acted as a facilitator to Inspire
with respect to the transaction contemplated by this Agreement. Inspire shall be
responsible for any and all fees due to Pacific Rim Ventures in connection with
such acts.
2.2 Representations and Warranties of Inspire. Inspire represents and
warrants to Kirin, as of the Effective Date, that:
(a) Inspire is the owner of, or has exclusive rights to, all of the
Patents in existence on the Effective Date, and has the exclusive right to grant
the licenses granted under this Agreement therefor;
(b) to the best of Inspire's knowledge, Inspire has exclusive rights
to all of the Know-how in existence on the Effective Date and the exclusive
right to grant licenses with respect thereto;
(c) Inspire has not entered into, and shall not enter into, any
agreement with any Third Party that is in conflict with the rights granted to
Kirin pursuant to this Agreement;
(d) That certain Exclusive License Agreement between The University of
North Carolina at Chapel Hill and Inspire dated as of March 10, 1995 (the "UNC
Agreement"), pursuant to which Inspire has acquired the exclusive rights to
certain of the Licensed Technology, to is in full force and effect; Inspire has
complied with all provisions of such agreements; there does not exist any event
of default with respect to Inspire under such agreement which, after notice or
lapse of time or both, would constitute an event of default with respect to
Inspire under such agreement; and Inspire has no knowledge of any breach or
anticipated breach by any either party to such agreement;
(e) Inspire agrees to use its diligent efforts to promptly amend the
UNC Agreement to add the following provision: "Upon termination of this
Agreement for any reason, all sublicenses granted by Licensee under this
Agreement shall be assigned to and ratified by University and shall remain in
full force and effect, subject to the terms of such sublicense agreement.";
(f) To the best of Inspire's knowledge, all Patents are in full force
and effect and have been maintained to date; and Inspire is not aware of any
asserted or unasserted claim or demand which it believes can be enforced against
the Patents; and
(g) To Inspire's knowledge, the practice of the Patents as currently
contemplated do not infringe upon or conflict with any patent or other
proprietary rights of any Third Party.
2.3 Representations and Warranties of Kirin. Kirin represents and warrants
to Inspire, as of the Effective Date, that:
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(a) Kirin and/or its Affiliates have the facilities, personnel and
experience sufficient in quantity and quality to perform its obligations under
this Agreement;
(b) All of the personnel assigned to perform such obligations shall
be qualified and properly trained; and
(c) Kirin and/or its Affiliates shall perform such obligations in a
manner commensurate with professional standards generally applicable in its
industry.
3. COORDINATING COMMITTEE.
3.1 Members; Chairperson. The Parties shall establish a coordinating
committee (the "Coordinating Committee"), that shall consist of four to six
members, as the Parties may deem necessary from time to time, with an equal
number of members from each Party. At least one member from each Party must be a
product development professional. The Coordinating Committee shall initially
consist of six members, who are set forth on Exhibit B. A member of the
Coordinating Committee may be represented at any meeting by a designee appointed
by such member for such meeting. The chairperson and secretary of the
Coordinating Committee shall serve coterminous one-year terms, each commencing
on the Effective Date or an anniversary thereof, as the case may be. The right
to name the chairperson and the secretary of the Coordinating Committee shall
alternate between the Parties, and each chairperson and secretary shall be named
no later than 10 days after the commencement of his or her term. The initial
chairperson shall be selected by Kirin and is designated on Exhibit B. The
initial secretary shall be selected by Inspire and is designated on Exhibit B.
Each Party shall be free to change its members, upon prior written notice to the
other Party. Each Party may, in its discretion, invite non-member
representatives of such Party to attend meetings of the Coordinating Committee,
provided that the other Party approves such Party's invitee(s) in advance.
3.2 Responsibilities.
(a) Subject to the other terms of this Agreement, the Coordinating
Committee shall review and evaluate the sufficiency of Kirin's progress in the
development and commercialization of the Product in each country in the
Territory and shall provide input and recommendations regarding the development
of the Product. Without limiting the generality of the foregoing, the
Coordinating Committee shall:
(i) review data and reports arising from and generated in
connection with the Development Program;
(ii) review all proposed publications and presentations of the
Parties pursuant to Section 10.2;
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(iii) review all studies relating to the Product and any other
studies proposed to be performed in connection with the registration process for
the Product under this Agreement;
(iv) provide a mechanism for the exchange of information between
the Parties with regard to Know-how and Inventions; and
(v) have such other responsibilities as may be assigned to the
Coordinating Committee pursuant to this Agreement or as may be mutually agreed
upon by the Parties from time to time.
3.3 Decisions.
(a) The Coordinating Committee may make decisions with respect to any
subject matter that is subject to the Coordinating Committee's decision-making
authority. All decisions of the Coordinating Committee shall be made by
consensus of the members (or their designees) present at any meeting.
(b) In the event that, after good faith discussions, the Coordinating
Committee cannot reach consensus regarding whether Kirin shall have made
reasonably sufficient progress in the development and commercialization of the
Product in any country in the Territory, the matter shall be referred for
further review and resolution to a senior level manager of Inspire, as
designated by Inspire from time to time, and a senior level manager of Kirin, as
designated by Kirin from time to time (such persons, collectively, the "Senior
Managers"). The Senior Managers shall use reasonable efforts to resolve the
matter within 15 days after the matter is referred to them. If the Senior
Managers are unable to reach a resolution of the matter within this period of
time, the matter shall be the matter shall be referred for further review and
resolution to the Chief Executive Officer of Inspire, or such other person
holding a similar position designated by Inspire from time to time, and the
President of the Pharmaceutical Division of Kirin, or such other person holding
a similar position designated by Kirin from time to time (such officers,
collectively, the "Executive Officers"). The Executive Officers shall use
reasonable efforts to resolve the matter within 15 days after the matter is
referred to them. If the Executive Officers are unable to reach a resolution of
the matter within this period of time, the matter shall be submitted to binding
arbitration pursuant to Section 14.13.
(c) Although the Coordinating Committee shall provide its input and
recommendations regarding the development of the Product, Kirin shall have the
sole control and discretion over the development of the Product in any manner
consistent with its obligations under this Agreement.
3.4 Meetings. During the term of the Development Program and the 12-month
period thereafter, the Coordinating Committee shall meet at least once during
every calendar year, and more frequently as the Parties deem appropriate, on
such dates, and at such times and places, as the Parties shall agree.
Thereafter, during the remainder of the term of this Agreement, the Coordinating
Committee shall meet on an as-needed basis on such dates, and at such places and
times, as the Parties shall agree. The chairperson shall, if practicable, send
notice of all meetings to all members
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of the Coordinating Committee no less than 20 days before the date of each
meeting. The Coordinating Committee may also convene or be polled or consulted
from time to time by means of telecommunications, video conferences or
correspondence, as deemed necessary or appropriate; provided, however, that the
Coordinating Committee must meet in person at least once every calendar year
during the term of the Development Program and the 12-month period thereafter.
3.5 Minutes. Promptly after each Coordinating Committee meeting, the
chairperson or the secretary of Inspire shall prepare and distribute to all
members of the Coordinating Committee draft minutes of the meeting within 10
days after the meeting. Such minutes shall provide a description, in reasonable
detail, of the discussions had at the meeting and a list of any actions,
decisions or determinations approved by the Coordinating Committee and a list of
any issues to be resolved by the Executive Officers. The chairperson or the
secretary of Kirin shall then have 10 days after receiving such draft minutes to
collect Kirin members' comments thereon and provide them to the chairperson or
the secretary of Inspire. Upon the expiration of such second 10-day period, the
chairperson and the secretary of the Coordinating Committee shall have an
additional 10 days to discuss each other's comments and finalize the minutes.
The secretary and chairperson shall each sign and date the final minutes. The
signature of the chairperson and the secretary upon the final minutes shall
indicate each Party's assent to the minutes. With the sole exception of specific
items of the meeting minutes to which the chairperson and the secretary cannot
agree and which are escalated as provided below, definitive minutes of all
Coordinating Committee meetings shall be finalized no later than 30 days after
the meeting to which the minutes pertain. If at any time during the preparation
and finalization of Coordinating Committee meeting minutes the secretary and the
chairperson do not agree on any issue with respect to the minutes, such issue
shall be resolved by the escalation process provided in Section 3.3(b). The
decision resulting from the escalation process shall be recorded by the
chairperson or the secretary of Inspire in amended finalized minutes for said
meeting. All other issues in the minutes which are not subject to such
escalation shall be finalized within the above-mentioned 30-day period.
3.6 Term. The Coordinating Committee shall exist until 12 months after
the termination or expiration of the Development Program and for such longer
period as the Parties may mutually agree (taking into consideration the
responsibilities (e.g., review of proposed publications) assigned to the
Coordinating Committee under this Agreement).
3.7 Expenses. Each Party shall be responsible for all travel and related
costs and expenses for its members and approved invitees to attend meetings of,
and otherwise participate on, the Coordinating Committee.
4. DEVELOPMENT PROGRAM.
4.1 Generally. Kirin shall use all commercially reasonable efforts
diligently to proceed with the development and commercialization of the Product
(including, without limitation, obtaining all Registrations necessary to market
and sell the Product) as follows: (i) to obtain Registrations for the Product in
each Major Country as soon as possible, but in such order of priority as Kirin
reasonably shall deem appropriate, and to obtain Registration for the Product in
any country in the Territory that is not a Major Country as Kirin reasonably
shall deem appropriate; (ii) to launch the
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Product in each Major Country as soon as possible after receipt of Registration
for such Product in such Major Country, and to launch the Product in each other
country of the Territory as soon as is commercially reasonable after receipt of
Registration for such Product in such country if Kirin has chosen to seek, and
obtains such Registration in such country; and (iii) after the First Commercial
Sale of a Product in a country of the Territory, to use all commercially
reasonable efforts to maximize Net Sales in such country. In connection
therewith, Kirin shall dedicate resources to the development and
commercialization of the Product consistent with the resources that Kirin, at
all relevant times, would dedicate to products containing compounds with similar
indications and side effects profiles to those of the Compound that were
generated from Kirin's own research efforts and that Kirin decided to develop
commercially and market.
4.2 Specific Kirin Responsibilities. As part of the Development Program,
Kirin shall, itself or through its Affiliates:
(a) Conduct, or cause to be conducted, manage, oversee and fund any
pre-clinical studies, or additional pre-clinical studies, required by the
Regulatory Authorities in order to file a Registration Application for the
Product in each Major Country and in each other country in the Territory in
which Kirin deems it appropriate;
(b) Conduct, or cause to be conducted, manage, oversee and fund any
additional formulation development activities for the Product for use in
clinical studies and for subsequent marketing; provided, however, Kirin and
Kirin's Affiliates are not under an obligation to develop any additional
formulations of the Product;
(c) Conduct, or cause to be conducted, manage, oversee and fund all
clinical studies required by the Regulatory Authorities in order to obtain
Registration for the Product in each Major Country and in each other country in
the Territory in which Kirin deems it appropriate;
(d) Conduct, or cause to be conducted, manage, oversee and fund the
development of any line extensions for the Product for use in the Field in each
Major Country and in each other country in the Territory in which Kirin deems it
appropriate, including the conduct of post-Registration clinical studies
relating thereto; provided, however, Kirin and Kirin's Affiliates are not under
an obligation to develop any line extensions of the Product;
(e) Make and pursue all regulatory filings (including, without
limitation, all INDs and Registration Applications), based in part on the
information and documentation provided by Inspire and in part on information and
data generated and obtained by Kirin in connection with the Development Program,
and conduct all analysis and other support necessary with respect to the
manufacture and sale of the Product in the Territory;
(f) Use reasonable efforts to use Western data and regulatory filings
to obtain approval of the Product in each Major Country and in each other
country in the Territory in which Kirin deems it appropriate in accordance with
the International Clinical Harmonization Treaty, where available;
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(g) Use all reasonable efforts to diligently proceed with the
development, regulatory approval, marketing and sale of the Product in each
Major Country and in each other country in the Territory in which Kirin deems it
appropriate for use in the Field, and to perform such obligations, including,
without limitation, by using personnel with sufficient skills and experience,
together with sufficient equipment and facilities;
(h) Conduct the Development Program in good scientific manner, and in
compliance in all material respects with all requirements of applicable laws,
rules and regulations, and all other requirements of any applicable then current
good clinical practice, then current good laboratory practice and then current
good manufacturing practice to attempt to achieve the objectives of the
Development Program efficiently and expeditiously;
(i) Within 60 days after the end of each six-month period during the
term of the Development Program and within 60 days following the expiration or
termination of the Development Program, furnish the Coordinating Committee with
summary written reports, based on a format mutually agreed upon by the
Coordinating Committee, on all activities conducted by Kirin under the
Development Program during such six-month period or the term of the Development
Program, as the case may be; and
(j) Maintain records, in sufficient detail and in good scientific
manner, which shall be complete and accurate and shall fully and properly
reflect all work done and results achieved in connection with the Development
Program in the form required under all applicable laws and regulations.
4.3 Inspire Activities. In support of the Development Program, Inspire
shall:
(a) Within 30 days after the Effective Date, provide to Kirin copies
of all (or relevant portions of) primary and secondary pre-clinical
pharmacological, toxicological, formulation, stability and clinical data in the
Field (including related information outside the Field but having utility in the
Field), relating to the development and commercialization of the Product, in
Inspire's possession and control;
(b) Thereafter, within 30 days after such information becomes
available to Inspire, provide to Kirin copies of: (i) all primary and secondary
pre-clinical pharmacological, toxicological, formulation, stability and clinical
data in the Field relating to the development and commercialization of the
Product, and (ii) all pre-clinical and clinical data concerning the Field, that
comes into Inspire's possession and control during the term of this Agreement
(including, without limitation, such data, studies and materials of Strategic
Partners, to the extent Inspire has the right to provide same to Kirin);
(c) Use all reasonable efforts to secure from Inspire's Strategic
Partners that are relevant to obtain the right: (i) to disclose to Kirin all
Third Party data or information owned by such Strategic Partners that this
Agreement contemplates will be shared with Kirin to the extent that Inspire has
the right to do so, and (ii) to grant Kirin the right to cross-reference
regulatory filings owned by such Strategic Partners that this Agreement
contemplates will be granted to Kirin to the extent that Inspire has the right
to do so.
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4.4 Development Liaison Functions. Within 60 days after the Effective
Date, Inspire shall designate a Development Liaison, to be funded by Kirin
pursuant to Section 6.2, who shall perform the following functions:
(a) Coordinate and facilitate communications regarding the worldwide
development of the Product among Inspire, Kirin and Strategic Partners.
(b) Coordinate and facilitate communications regarding the formulation
and manufacture of the Product among Inspire, Kirin and Inspire's Strategic
Partners.
(c) Provide quarterly written reports to Kirin on the development
program for the Product in the United States and Europe and provide clinical and
pre-clinical final reports on such development programs when available, as
appropriate.
(d) Inspire shall maintain the Development Liaison for a period of two
years, or such longer period as the Parties may mutually agree upon in writing.
4.5 Regulatory Matters.
(a) Kirin and/or Kirin's Affiliates shall be responsible for
preparing, filing and obtaining INDs, Registration Applications and other
regulatory filings and approvals necessary to market and sell the Product in the
Territory for use in the Field, through and including Registration, and
thereafter shall be responsible for maintaining such Registrations. All such
filings shall be in Kirin's name (or that of its Affiliates, as the case may
be). Kirin shall also obtain any export approvals required by the Regulatory
Authorities to export Product among the countries of the Territory, to the
extent commercially necessary or required.
(b) Kirin or, where required by applicable law, its designees(s) shall
own all INDs, Registration Applications, Registrations and other regulatory
filings for the Product in each country in the Territory.
(c) In order to assist Kirin in the performance of its obligations
under this Section 4.5, Inspire shall provide Kirin and/or its designee(s)
(including its distributors or selling agents) with complete copies (or copies
of relevant portions) of, and shall grant Kirin or its designee(s) the right to
cross-reference, all of Inspire's and its Strategic Partners' (to the extent
Inspire has the right to provide such information to Kirin) INDs, registration
applications, registrations or other regulatory filings made or held in any
country for all products that contain the Compound as an active ingredient. All
such copies (or copies of relevant portions) thereof shall be in the English
language. Inspire shall execute, acknowledge and deliver such further
instruments, and shall do all such other acts, all as promptly as possible after
Kirin's request therefor, at Kirin's expense, that may be necessary or
appropriate to effectuate such right.
(d) Upon Inspire's written request, Kirin shall provide Inspire with
complete copies (or copies of relevant portions) of, and shall grant Inspire the
right to cross-reference any INDs, Registration Applications, Registrations or
other regulatory filings made or held in each
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country in the Territory in the name of Kirin (or that of its Affiliates or
designees, as the case may be) reasonably necessary or useful to enable Inspire
to market products either within the Territory and outside the Field (as long as
such products do not conflict with Inspire's obligation under Section 5.3), or
outside the Territory. All such copies (or copies of relevant portions) thereof
shall be translated into the English language by Kirin, at Inspire's expense.
Kirin shall execute, acknowledge and deliver such further instruments, and shall
do all such other acts, all as promptly as possible after Inspire's request
therefor, at Inspire's expense, that may be necessary or appropriate to
effectuate such right in each such country. Kirin also shall provide such copies
and such right to cross-reference to any Strategic Partner that grants Kirin or
its designee(s) the right to cross-reference such Strategic Partner's INDs,
registration applications, registrations or other regulatory filings made or
held in any country for products that contain the Compound as an active
ingredient.
(e) Kirin shall keep Inspire informed as to the status of all
regulatory filings made pursuant to this Section 4.5.
4.6 Funding. Except as otherwise expressly provided in this Agreement,
each Party shall bear the entire cost and expense it incurs in connection with
fulfillment of its obligations under this Section 4.
4.7 Liability. Kirin shall be responsible for, and hereby assumes, any
and all risks of personal injury or property damage attributable to the
negligent or willful acts or omissions, during the term of the Development
Program, of Kirin or its Affiliates, and their respective directors, officers,
employees and agents. Inspire shall be responsible for, and hereby assumes, any
and all risks of personal injury or property damage attributable to the
negligent or willful acts or omissions, during the term of the Development
Program, of Inspire or its Affiliates, and their respective directors, officers,
employees and agents.
4.8 Termination. In the event that, following the review by the
Coordinating Committee, the Senior Managers and the Executive Officers pursuant
to Section 3.3, Inspire believes that Kirin has not made reasonably sufficient
progress in the development and commercialization of the Product in any Major
Country in a manner consistent with its obligations under Section 4.1, Inspire
may submit the matter to binding arbitration pursuant to Section 14.13. If the
arbitrators (who shall take into account, among other things, the relative
potential economic cost vs. benefit of developing and commercializing the
Product in such Major Country) determine that Kirin has not made reasonably
sufficient progress in such Major Country, Inspire shall have the right to
terminate this Agreement with respect to such Major Country. In the event that
this Agreement is terminated pursuant to this Section 4.8 with respect to all
Major Countries, this Agreement shall automatically terminate with respect to
all the other countries in the Territory that are not other Major Countries
effective upon the effective date of the termination of this Agreement with
respect to the last of the Major Countries.
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5. GRANT OF RIGHTS; MARKETING.
5.1 Development License. Inspire hereby grants to Kirin and Kirin's
Affiliates, during the term of this Agreement, the co-exclusive (with Inspire),
paid-up license under the Licensed Technology, to conduct the Development
Program, either in the Territory or outside of the Territory, as Kirin may
determine is appropriate.
5.2 Commercialization License. Inspire hereby grants to Kirin and Kirin's
Affiliates an exclusive right and license throughout the Territory under the
Licensed Technology, to develop, use, have used, make, have made, register,
market, sell, have sold, export and import Products in the Field, and the right
to make or have made the Compound used in the manufacture of the Products and/or
the Products, either in the Territory or outside the Territory, for use for
Products in the Territory and in the Field. With respect to any Patents that may
issue in Japan during the term of this Agreement, a statement referencing the
exclusive license granted to Kirin pursuant to this Section 5.2 may be
registered with the Japanese Patent Office at Kirin's cost. Inspire hereby
agrees that it will execute such documents and instruments as may be required to
effect the registration of such statement and otherwise cooperate with Kirin in
connection with the registration of such statement with the Japanese Patent
Office, and in other counties where required or permitted by applicable law. All
licenses granted under this Agreement by Inspire are subject to the rights of
the United States Government, if any, which arise out of its sponsorship of
research which led to the any of the Licensed Technology.
5.3 Exclusivity. Inspire shall not develop, market or sell, or grant any
right to any Third Party to develop, market or sell, any Product in any country
in the Territory for use inside or outside the Field.
5.4 Grantback Rights. Subject to the terms and conditions of this
Agreement, Kirin hereby grants to Inspire a co-exclusive (with Kirin), paid-up
license under any patents or know-how that embody or relate to Inventions that
are owned or Controlled By Kirin or its Affiliates and relate specifically to
the Compound and/or the Product (e.g., formulation or inhalant device) and are
not of general utility (i.e., useful for purposes other than uses with the
Compound and/or Product): (i) to develop, make, have made, use, offer to sell,
sell and have sold products with applications outside the Field for all purposes
outside the Territory; and (ii) to develop, make, have made, use, offer to sell,
sell and have sold products with applications within the Field for all purposes
outside the Territory.
5.5 Marketing Obligations, Rights. Kirin shall use all reasonable efforts
to market the Product in each Major Country and in each other country in the
Territory in which Kirin obtains a Registration. In connection therewith, Kirin
shall dedicate resources to marketing the Product that are consistent with the
resources that Kirin, at all relevant times, would dedicate to products
containing compounds that were generated from Kirin's own research efforts which
Kirin decided to develop commercially and market and that have pricing, volume
and marketing potentials similar to those of the Product. Kirin, either itself
and/or by and through its Affiliates, as the case may be, shall be responsible
for, and shall have the exclusive right to engage in, all marketing,
advertising, promotional, launch and sales activities in connection with such
efforts.
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5.6 Right of First Refusal. Inspire may conduct research related to the
discovery of Second Generation Compounds from time to time, in its sole
discretion. With respect to Second Generation Compounds that are discovered
during the term of this Agreement, from time to time during such period as
Inspire determines that any such Second Generation Compound represents a
substantial improvement over the Compound, Inspire shall give Kirin written
notice thereof, together with any relevant information regarding such Second
Generation Compound which Inspire has in it possession.
(a) Kirin shall have 30 days after receipt of such notice and
information to decide whether or not it is interested in entering into
negotiations with Inspire to acquire an exclusive license for such Second
Generation Compound in the Territory and in the Field.
(b) In the event that Kirin expresses an interest in entering into
negotiations for such Second Generation Compound within the 30 day period set
forth in Section 5.6(a), Inspire shall conduct good faith negotiations
exclusively with Kirin for 90 days after Kirin provides notice of such interest
with respect to such Second Generation Compound (or such longer period as the
Parties may mutually agree) to reach a definitive agreement therefor.
(c) In the event that, within the 90-day period after Kirin provides
written notice to Inspire that it is interested in pursuing negotiations for
such rights (or such longer period as the Parties may mutually agree), the
Parties fail to execute a definitive agreement related to Kirin acquiring such
rights, then Inspire shall be free to offer such rights to any Third Party on
terms and conditions no more favorable to such Third Party, taken as a whole,
than the most favorable economic terms last offered by Kirin to Inspire for such
rights without providing Kirin an opportunity, pursuant to this Section 5.6, to
accept such terms offered to such Third Party. Within ten days after the
expiration of such 90 day period (or such longer period as the Parties may
mutually agree), Kirin shall provide Inspire with a written document setting
forth such terms. Inspire shall not enter into any such agreement with any Third
Party until the earlier of when Inspire has received the written document
setting forth such terms, or when ten days has elapsed.
(d) In the event that Kirin advises Inspire during the 30 day period
set forth in Section 5.6(a) that it is not interested in entering into
negotiations for such Second Generation Compound or does not respond to the
notice provided by Inspire pursuant to Section 5.6(a), Inspire shall be free to
enter into such an arrangement with respect to such Second Generation Compound
with any Third Party.
5.7 Trademarks. Kirin shall market the Product throughout the Territory
under a trademark or trademarks (collectively, the "Trademark") selected by
Kirin or Kirin's Affiliates. Except as otherwise expressly provided in this
Agreement, Kirin or Kirin's Affiliates shall own all right, title and interest
in and to such Trademark.
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5.8 Adverse Reaction Reporting.
(a) Each Party shall record, evaluate, summarize and review all
adverse drug experiences associated with the Compound and the Product. In order
that each Party may be fully informed of the adverse drug experiences associated
therewith that are known to the other Party, each Party shall report:
(i) In the case of Inspire, to:
Inspire Pharmaceuticals, Inc.
4222 Emperor Boulevard, Suite 470
Durham, North Carolina 27703
USA
Attention: Anita Woodring, Associate Director, Regulatory
Affairs
Facsimile No.: (919) 474-8507
Telephone No.: (919) 941-9777 ext. 285
(ii) In the case of Kirin, to:
Kirin Brewery Company, Ltd.,
Pharmaceutical Division
26-1 Jingumae 6-Chome
Shibuya-ku, Tokyo 150-8011
JAPAN
Attention: Person of Regulatory affairs section, Product
Development Department
Facsimile No.: 81 3 5485 6314
Telephone No.: 81 3 5485 6309
all "adverse events," as defined by the then current ICH guidelines, involving
the Compound and/or the Product (all such reports, "AE Reports"). "Serious"
adverse events shall be reported to the other Party within four working days (if
the event is fatal or life-threatening) or ten working days (if otherwise) after
a Party's (a "reporting Party") becoming aware of such an event and shall either
be reported by facsimile or telephone. The reporting Party shall report on a
quarterly basis all other adverse events that are known to the reporting Party
through either the receipt of clinical study documentation or post-market
surveillance. In addition, the reporting Party shall report all known instances
of use of the Product during pregnancy. In any event, each Party shall promptly
notify the other of any complaint received by such Party in sufficient detail
and in sufficient time to allow the responsible Party to comply with any and all
regulatory requirements imposed upon it in any country. Each Party shall also
advise the other of any regulatory developments (e.g., proposed recalls,
labeling and other registrational dossier changes, etc.) affecting the Compound
or the Product in any country.
(b) According to then current ICH guidelines, an "adverse event" is
any untoward medical occurrence in a patient or clinical investigation subject
administered a pharmaceutical product, which occurrence does not necessarily
have to have a causal relationship with the treatment.
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(c) According to then current ICH guidelines, a "serious" adverse
event is any adverse drug experience that, at any dose, results in any of the
following outcomes: death, a life-threatening (at the time of the event)
condition, inpatient hospitalization or prolongation of existing
hospitalization, persistent or significant disability or incapacity, or a
congenital anomaly or birth defect. Other important medical events not meeting
such criteria may be considered serious if, based on appropriate medical
judgment, the event jeopardized the subject and required medical intervention to
prevent any one or more of such outcomes.
(d) The details of adverse reaction reporting during the development
stage and thereafter shall be stipulated in a separate agreement to be entered
into by the Parties in due course, or in a separate agreement among the Parties
and Inspire's Strategic Partners, as the Parties mutually deem to be appropriate
to permit the Parties to comply with all applicable "adverse event" reporting
requirements.
6. FEES, MILESTONES AND ROYALTIES.
6.1 Up-Front Payments. As partial consideration to Inspire for the
license and other rights granted to Kirin under this Agreement, within 30 days
after the Effective Date, Kirin shall pay to Inspire a non-refundable up-front
license fee of [CONFIDENTIAL TREATMENT REQUESTED].
6.2 Development Liaison Fees. As consideration to Inspire for designating
and maintaining the Development Liaison, for every year during which Inspire
maintains a Development Liaison, Kirin shall pay Inspire the sum of
[CONFIDENTIAL TREATMENT REQUESTED]. The payment for the first year, which shall
commence on the Effective Date, shall be paid within 30 days after the Effective
Date; and the payment for the second year, which shall commence on the first
anniversary of the Effective Date, shall be paid on such date. Kirin shall not
be responsible for any additional costs incurred by Inspire to retain the
Development Liaison. Inspire shall be responsible for all travel, lodging, meals
and other necessary out-of-pocket expenses incurred by Inspire in connection
with the Development Liaison's performance of his or her obligations under this
Agreement. Notwithstanding the payments being made by Kirin pursuant to this
Section, the Development Liaison shall be an employee of Inspire, and not an
employee of Kirin.
6.3 Milestone Payments. As further consideration to Inspire for the
license and other rights granted to Kirin under this Agreement, Kirin shall pay
to Inspire the following non-refundable pre-commercialization milestone payments
upon the first occurrence of each event set forth below with respect to the
Product:
[CONFIDENTIAL TREATMENT REQUESTED]
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[CONFIDENTIAL TREATMENT REQUESTED]
Each of the payments required pursuant to this Section 6.3 shall be paid within
30 days after such milestone has been achieved.
6.4 Royalty Payments. As further consideration to Inspire for the
license and other rights granted to Kirin under this Agreement, during the term
of this Agreement, Kirin shall pay to Inspire a royalty on Net Sales of the
Product commencing on the First Commercial Sale by Kirin and/or its Affiliates,
on a country-by-country and Product-by-Product basis, in an amount equal to:
[CONFIDENTIAL TREATMENT REQUESTED].
6.5 Post-Commercialization Milestones. As further consideration to
Inspire for the license and other rights granted to Kirin under this Agreement,
Kirin shall pay to Inspire the following post-commercialization milestone
payments upon the achievement of certain post-commercialization milestones. Such
post-commercialization milestones shall be based upon the total annual Net Sales
in the Territory with respect to the Product on a calendar year basis. There
shall be no post-commercialization milestones unless total annual Net Sales in
the Territory for a given calendar year are greater than [CONFIDENTIAL TREATMENT
REQUESTED]. Kirin shall pay to Inspire post-commercialization milestones of
[CONFIDENTIAL TREATMENT REQUESTED] for total annual Net Sales in the Territory
for a given calendar year of more than [CONFIDENTIAL TREATMENT REQUESTED], and
an additional post-commercialization milestone of [CONFIDENTIAL TREATMENT
REQUESTED] for each additional [CONFIDENTIAL TREATMENT REQUESTED] of total
annual Net Sales in the Territory for such calendar year. Any payment required
pursuant to this Section 6.5 shall be paid within 90 days after the end of each
calendar year for which such milestone applies.
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6.6 Reductions for Generic Competition.
(a) With respect to any country in the Territory, [CONFIDENTIAL
TREATMENT REQUESTED], where a product that is a generic product, the
manufacture, use or sale of which is not covered by a Licensed Claim in such
country, is being marketed by a Third Party or Parties, and such Third Party or
Parties have, in the aggregate, at least [CONFIDENTIAL TREATMENT REQUESTED] of
the unit volume of sales for such generic products in the Field in such country
in any calendar quarter, as measured by IMS or a similar independent research
service, then the royalties payable to Inspire under Section 6.4 with respect to
Net Sales of the Product in such country shall be reduced by [CONFIDENTIAL
TREATMENT REQUESTED], commencing with the calendar quarter following the
calendar quarter in which such generic product meets the foregoing conditions in
such country. [CONFIDENTIAL TREATMENT REQUESTED].
(b) In Japan, where a product that is a generic product, the
manufacture, use or sale of which is not covered by a Licensed Claim in such
country, is being marketed by a Third Party or Parties, and such Third Party or
Parties have, in the aggregate, at least [CONFIDENTIAL TREATMENT REQUESTED] of
the unit volume of sales for such generic products in the Field in such country
in any calendar quarter, as measured by IMS or a similar independent research
service, then the post-commercialization milestones payable to Inspire under
Section 6.5 with respect to Net Sales of the Product in the Territory shall be
reduced by [CONFIDENTIAL TREATMENT REQUESTED], commencing with the calendar
quarter following the calendar quarter in which such generic product meets the
foregoing conditions in Japan.
6.7 Reduction for Patent Infringement. In the event that sales of the
Product constitute an infringement of any patent right of a Third Party in any
country in the Territory, except China, and Kirin or Kirin's Affiliate is
required to pay royalties to such Third Party, the royalties payable to Inspire
with respect to Net Sales of the Product in such country will be reduced by an
amount equal to the royalties which Kirin or Kirin's Affiliate is required to
pay to such Third Party, up to a maximum reduction of [CONFIDENTIAL TREATMENT
REQUESTED] of the royalties otherwise due under this Agreement.
6.8 Maximum Reduction of Royalties. The aggregate amount of all reductions
to royalties under any provisions of this Agreement shall not exceed
[CONFIDENTIAL TREATMENT REQUESTED] of the royalties set forth in Section 6.4
with respect to Net Sales of the Product in any country in the Territory.
6.9 Obligation to Pay Royalties. The obligation to pay royalties to
Inspire under this Section 6 is imposed only once with respect to the same unit
of Product regardless of the number of Patents or quantity of Know-how
pertaining thereto. There shall be no obligation to pay royalties to Inspire
under this Section 6 on sales of Product between Kirin and/or its Affiliates,
but in such instances the obligation to pay royalties shall arise upon the sale
by Kirin or its Affiliates to unrelated Third Parties, such as end users.
Payments due under this Section 6 shall be deemed to accrue when Product is
shipped or billed, whichever event shall first occur.
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7. PAYMENTS AND REPORTS.
7.1 Payments. Beginning with the calendar quarter in which the First
Commercial Sale is made in the Territory and for each calendar quarter
thereafter, Kirin shall submit a statement to Inspire within 60 days after the
end of each calendar quarter, Product-by-Product and country-by-country, of the
amount of Net Sales during such quarter and the amount of royalties due on such
Net Sales. Any such statement which is submitted to report on the fourth
calendar quarter in each calendar year shall also provide the total annual Net
Sales in the Territory with respect to the Product for such calendar year, and
the amount of post-commercialization milestones due on such Net Sales. Each
payment due, as shown in any such statement, shall be submitted quarterly within
90 days after the end of each calendar quarter.
7.2 Mode of Payment. All invoices, if any, submitted by Inspire shall be
stated in U.S. Dollars. Kirin shall make all payments required under this
Agreement as directed by Inspire from time to time, net of any out-of-pocket
transfer costs or fees, in U.S. Dollars. Except for payments of post-
commercialization milestones, all payments due shall be translated at the
average applicable foreign exchange rate for the last business day of every
month quoted by The Bank of Tokyo Mitsubishi or its successor, or any other bank
of equivalent size and stature that becomes Kirin's principal bank during the
term of this Agreement, during the period for which such payment relates. All
payments of post-commercialization milestones due shall be translated at the
average applicable foreign exchange rate for the last business day of every
month quoted by The Bank of Tokyo Mitsubishi or its successor, or any other bank
of equivalent size and stature that becomes Kirin's principal bank during the
term of this Agreement, during the year for which such payment relates.
7.3 Records Retention. Kirin and/or its Affiliates shall keep complete and
accurate records pertaining to the sale of Product for a period of three
calendar years after the year in which such sales occurred, and in sufficient
detail to permit the other Party to confirm the accuracy of the aggregate
royalty and post-commercialization milestone calculations hereunder.
7.4 Audit Request. During the term of this Agreement and for a period of
two years thereafter, at the request and expense of Inspire, Kirin and/or its
Affiliates shall permit an independent, certified public accountant appointed by
Inspire, at reasonable times and upon reasonable written notice in advance (but
not more frequently than once in any calendar year and once following the
termination or expiration of this Agreement), to examine such records as may be
necessary to: (i) determine the correctness of any report or payment made under
this Agreement; or (ii) obtain information as to the aggregate royalties payable
for any calendar quarter in the case of Kirin's failure to report or pay
pursuant to this Agreement. Said accountant shall not disclose to Inspire any
information other than information relating to said reports, royalties, and
payments. Results of any such examination shall be made available to both
Parties.
7.5 Cost of Audit. Inspire shall bear the full cost of the performance of
any audit requested by Inspire except as hereinafter set forth. If, as a result
of any inspection of the books and records of Kirin and/or its Affiliates, it is
shown that Kirin's payments under this Agreement were less than the amount which
should have been paid, then Kirin shall make all payments required to be made to
eliminate any discrepancy revealed by said inspection within 30 days after
Inspire's demand therefore, together with interest at the prime rate published
by The Wall Street Journal, Eastern
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United States Edition on the date such payment should have been made plus two
percent, on such amount from the date such payment should have been made to the
date such payment is actually made. Furthermore, if the payments made were less
than 90% of the amount that should have been paid during the period in question,
Kirin shall also reimburse Inspire for the reasonable costs of such audit.
7.6 No Non-Monetary Consideration for Sales. Without the prior written
consent of Inspire, Kirin and/or its Affiliates shall not accept or solicit any
non-monetary consideration of the sale of the Product other than as would be
reflected in Net Sales. The use by Kirin and/or its Affiliates of a commercially
reasonable amount of Product for promotional sampling shall not violate this
Section 7.6.
7.7 Taxes.
(a) In the event that Kirin is required to withhold any tax for the
tax or revenue authorities in any country in the Territory regarding any payment
to Inspire due to the laws of such country, such amount shall be deducted from
the payment to be made by Kirin, and Kirin shall promptly notify Inspire of such
withholding and, within a reasonable amount of time after making such deduction,
furnish Inspire with copies of any tax certificate or other documentation
evidencing such withholding. Each Party agrees to cooperate with the other Party
in claiming exemptions from such deductions or withholdings under any agreement
or treaty from time to time in effect.
(b) If Inspire has the legal obligation to collect and/or pay any
sales, use, excise or value added taxes of any country in the Territory, the
appropriate amount shall be added to Kirin's invoice and paid by Kirin, unless
Kirin provides Inspire with a valid tax exemption certificate authorized by the
appropriate taxing authority.
8. MANUFACTURE AND SUPPLY.
8.1 Manufacture of Compound. Kirin is responsible for the manufacture
and supply of all bulk active Compound for all development activities and
commercialization of Products in the Territory and in the Field pursuant to the
license grant provided in Section 5.2. Inspire shall provide to Kirin copies of
all documentation within Inspire's possession and control that is reasonably
necessary for Kirin to manufacture (or have manufactured) Compound, and such
technical assistance to Kirin as is reasonably necessary to enable Kirin to
manufacture (or have manufactured) Compound in accordance with cGMP. Kirin
acknowledges that Yamasa Corporation manufactures Compound for Inspire and
expects that it will also use Yamasa Corporation to manufacture Compound on its
behalf. Inspire shall reasonably cooperate with Kirin to establish a supplier of
cGMP bulk active Compound, including locating qualified Third Party
manufacturers and sources of materials and ensuring a smooth transition of
Know-How and/or licensing of Inspire patents, at no charge, to enable Kirin and
Kirin's Affiliates to either manufacture or source cGMP bulk active Compound for
all development activities and commercialization in the Territory.
8.2 Formulations. Kirin is responsible for the formulation of Product
for all development activities. Inspire shall provide to Kirin copies of all
documentation within Inspire's
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possession and control that is reasonably necessary for Kirin to formulate, or
have formulated, Product, and such technical assistance to Kirin as is
reasonably necessary to enable Kirin to formulate, or have formulated, Product
in accordance with the standard operating procedures relating to such
formulation.
8.3 Commercial Supply Agreement for Finished Product. Both Parties
recognize the importance of Kirin being able to obtain approval of the Product
in each country in the Territory as quickly as possible, and to use, where
available, the expedited approval process in accordance with the International
Clinical Harmonization Treaty. The Parties also recognize that, until the
Product is approved in Japan, Kirin may not have established a source of supply
for Product in finished form. Therefore, in the event that Inspire is
manufacturing, or having manufactured, finished Product for commercial marketing
outside the Territory at the time that Kirin expects to receive approval in any
country in the Territory prior to obtaining approval in Japan, the Coordinating
Committee shall discuss whether is may be advantageous for Inspire to supply
Product in finished form to Kirin. If the Coordinating Committee so determines,
then the Parties shall negotiate in good faith the terms of a commercial supply
agreement to be entered into by the Parties pursuant to which Inspire shall
provide Kirin with its commercial supply requirements of Product in finished
form at Inspire's fully-burdened cost of goods for a period through approval of
the Product in Japan.
9. OWNERSHIP; PATENTS.
9.1 Ownership.
(a) Except as otherwise provided in Section 9.1(b) or (c), Inspire
shall retain all right, title and interest in and to the Patents and Know-how,
regardless of which Party prepares and prosecutes the applications associated
therewith, or maintains the patents, copyrights or other intellectual property
rights related thereto, subject to the licenses granted to Kirin pursuant to
Section 5. Rights to Inventions made solely by employees of Inspire shall belong
to Inspire.
(b) Rights to Inventions made solely by employees of Kirin shall
belong to Kirin.
(c) Rights to Inventions which were made jointly by employees of
Inspire and by employees of Kirin shall belong jointly to Inspire and to Kirin.
The Parties shall be under no territorial or field restrictions with respect to
joint Inventions other than as provided in this Agreement, and shall have the
right to manufacture, have manufactured, use, sell, and offer to sell joint
Inventions anywhere, and to license others to do so, without accounting to each
other, except as specifically provided in this Agreement.
9.2 Patent Maintenance.
(a) Inspire shall have full responsibility for, and shall control the
preparation and prosecution of, all patent applications and the maintenance of
all patents relating to the Licensed Technology (including the Patents)
throughout the Territory. In connection therewith, Inspire shall consult with
Kirin in order to assure that all future filings with respect to the Patents are
made in a timely manner and identify the relevant countries in the Territory, to
the extent that Inspire can do
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so. Kirin shall provide guidance to Inspire regarding which countries it wishes
to have Inspire aggressively file in for patent protection. Inspire shall pay
all costs and expenses (including attorneys' fees) of filing, prosecuting and
maintaining the Patents and the patents covering Inventions owned by Inspire in
the Territory. Notwithstanding the foregoing, Inspire shall not have the right
to file patent applications or maintain patents for Inventions solely owned by
Kirin, regardless of whether such Inventions relate to the Licensed Technology.
(b) Inspire shall select qualified independent patent counsel to file
and prosecute all patent applications pursuant to Section 9.2(a). Inspire shall
provide copies to Kirin of any filings made to, and written communications
received from, any patent office relating, in whole or in part, to the Licensed
Claims.
(c) Each Party agrees promptly to provide to the other Party a
complete written disclosure of any Invention made by such Party. Inspire shall
determine whether any Invention owned solely by Inspire or jointly by Inspire
and Kirin is patentable and whether filing a patent application is economically
justifiable, and if so, shall proceed with the preparation and prosecution of a
patent application covering any such Invention. If Inspire elects not to file
patent applications for any Invention owned jointly by the Parties, Inspire
shall notify Kirin of such election sufficiently in advance of the filing
deadline for such Invention to allow Kirin to file a patent application for such
Invention. Kirin shall have the right to file patent applications for such joint
Inventions in any country in which Inspire elects not to file for patent
protection. Prior to any such filing deadline for any such joint Invention,
neither Party will take any action that would preclude either Party from
obtaining patent protection for such joint Invention. Kirin shall determine
whether any Invention owned solely by Kirin is patentable and whether filing a
patent application is economically justifiable, and if so, shall proceed with
the preparation and prosecution of a patent application covering any such
Invention.
(d) Inspire and Kirin shall share all costs and expenses (including
attorneys' fees) of filing, prosecuting and maintaining patents worldwide
covering Inventions which are owned jointly by Kirin and Inspire. If either
Party elects not to pay for: (i) the filing of a patent application on any such
Patent or Invention for which the Parties are sharing costs and expenses and
which the other Party reasonably believes is patentable, or (ii) the further
prosecution or maintenance of any such Patent or Invention for which the Parties
have agreed to share costs and expenses pursuant to the first sentence of this
Section, or (iii) the filing of any divisional or continuing patent application
based on any Patent or Invention for which the Parties have agreed to share
costs and expenses pursuant to the first sentence of this Section, such Party
shall notify the other Party in a timely manner and the other Party may do so at
its own expense. In such event, such patent or application shall be assigned by
such Party to the other Party, all of such assigning Party's rights in such
patent or application shall cease, and, in the case where Kirin is the assigning
Party, the licenses granted to Kirin under Section 5 with respect to such patent
or application shall terminate.
(e) Each Party agrees to cooperate with the other Party to execute all
lawful papers and instruments, to make all rightful oaths and declarations and
to provide consultation and assistance as may be necessary in the preparation,
prosecution, maintenance and enforcement of all such patents and patent
applications.
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9.3 Patent Enforcement.
(a) If either Party learns of an infringement, unauthorized use,
misappropriation or ownership claim or threatened infringement or other such
claim (any of the foregoing, an "infringement") by a Third Party with respect to
any Licensed Technology within the Territory, such Party shall promptly notify
the other Party and shall provide such other Party with available evidence of
such infringement.
(b) Inspire shall have the first right, but not the duty, to institute
patent infringement actions against Third Parties based on any Licensed
Technology in the Territory. If Inspire (or its designee) does not secure actual
cessation of such infringement or institute an infringement proceeding against
an offending Third Party within 180 days of learning of such infringement, Kirin
shall have the right, but not the duty, to institute such an action with respect
to any infringement by such Third Party. The costs and expenses of any such
action (including fees of attorneys and other professionals) shall be borne by
the Party instituting the action, or, if the Parties elect to cooperate in
instituting and maintaining such action, such costs and expenses shall be borne
by the Parties in such proportions as they may agree in writing. Each Party
shall execute all necessary and proper documents, take such actions as shall be
appropriate to allow the other Party to institute and prosecute such
infringement actions and shall otherwise cooperate in the institution and
prosecution of such actions (including, without limitation, consenting to being
named as a nominal party thereto). Any award paid by Third Parties as a result
of such an infringement action (whether by way of settlement or otherwise) shall
be applied first to reimburse both Parties for all costs and expenses (including
fees of attorneys and other professionals) incurred by the Parties with respect
to such action on a pro rata basis and, if after such reimbursement any funds
shall remain from such award, they shall be allocated as follows: (i) if Inspire
has instituted and maintained such action alone, Inspire shall be entitled to
retain such remaining funds; (ii) if Kirin has instituted and maintained such
action alone, Kirin shall be entitled to retain such remaining funds; or (iii)
if the Parties have cooperated in instituting and maintaining such action, the
Parties shall allocate such remaining funds between themselves in the same
proportion as they have agreed to bear the expenses of instituting and
maintaining such action.
9.4 Infringement Action by Third Parties.
(a) In the event of the institution or threatened institution of any
suit by a Third Party against Kirin for patent infringement involving the sale,
distribution or marketing of the Product in the Territory where such
infringement claim is a result of the use of the Licensed Technology, Kirin
shall promptly notify Inspire in writing of such suit and the Parties shall
promptly discuss and decide the best way to respond. Unless otherwise covered by
Section 11.3(b), Kirin shall have the right to defend such suit at its own
expense and shall be responsible for all damages incurred as a result thereof.
Inspire hereby agrees to assist and cooperate with Kirin, at Kirin's reasonable
request and expense, in the defense of such suit (including, without limitation,
consenting to being named as a nominal party thereto). During the pendency of
such action and thereafter, Kirin shall continue to make all payments due under
this Agreement.
(b) In the event that Kirin incurs any liability to a Third Party for
royalties or other damages as the result of any such action as described in
Section 9.4(a), Kirin shall be entitled
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to a credit against royalties due under this Agreement in an amount equal to
[CONFIDENTIAL TREATMENT REQUESTED] of Kirin's actual costs in defending any such
action, and [CONFIDENTIAL TREATMENT REQUESTED] of the royalties and other
damages Kirin pays such Third Party; provided, however, that Kirin shall not be
entitled to take as a credit in any period any amount in excess of [CONFIDENTIAL
TREATMENT REQUESTED] of the royalties otherwise due under Section 6.4 with
respect to Net Sales in the country in which such action takes place. Any credit
under this Section which is not applied in the period incurred as a result of
the foregoing limitation may be carried forward and applied to any subsequent
period until the credit has been fully applied.
(c) Any award from such Third Party that arises as a result of such
action as described in Section 9.4(a) (whether by way of judgment, award,
decree, settlement or otherwise) and that is reasonably attributable to the
Licensed Claims shall be allocated as follows: (i) if Kirin finally prevails,
such award shall be applied first to reimburse Kirin for all costs and expenses
(including fees of attorneys and other professionals) incurred by it with
respect to such action and, if after such reimbursement any funds shall remain
from such award, Kirin shall be entitled to retain such excess funds but shall
pay Inspire a royalty thereon, at the applicable rate for the country in which
such action takes place, as if such excess funds constituted Net Sales; (ii) if
Inspire indemnifies Kirin with respect to any such action and finally prevails,
Inspire shall be entitled to retain such award; or (iii) if the Parties
cooperate in the defense of any such action, the expenses of such defense shall
be borne by the Parties in such proportions as they may agree in writing, and
the Parties shall allocate between themselves any part of such award remaining
after the reimbursement of such expenses, in the same proportion as they have
agreed to bear the expenses of such defense.
10. PUBLICATION; CONFIDENTIALITY.
10.1 Notification. Both Parties recognize that each may wish to publish the
results of their work relating to the subject matter of this Agreement. However,
both Parties also recognize the importance of acquiring patent protection.
Consequently, subject to any applicable laws or regulations obligating either
Party to do otherwise, any proposed publication by either Party shall comply
with this Section 10.1. At least 45 days before a manuscript is to be submitted
to a publisher, the publishing Party will provide the Coordinating Committee
with a copy of the manuscript (or an English translation thereof). If the
publishing Party wishes to make an oral presentation, it will provide the
Coordinating Committee with a summary of such presentation at least 20 business
days before such oral presentation and, if an abstract is to be published, five
business days before such abstract is to be submitted. Any oral presentation,
including any question period, shall not include any Confidential Information
unless both Parties otherwise mutually agree in writing in advance of such oral
presentation.
10.2 Review. The Coordinating Committee shall review the manuscript,
abstract, text or any other material provided under Section 10.1 to determine
whether patentable subject matter is or may be disclosed. The Coordinating
Committee shall notify the publishing Party in writing within 30 days (or five
business days in the case of abstracts) of receipt of the proposed publication
if it, in good faith, determines that patentable subject matter is or may be
disclosed, or if the Coordinating Committee, in good faith, believes
Confidential Information is or may be disclosed. If it is
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determined by the Coordinating Committee that patent applications should be
filed, the publishing Party shall delay its publication or presentation for a
period not to exceed 120 days from the Coordinating Committee 's receipt of the
proposed publication or presentation to allow time for the filing of patent
applications covering patentable subject matter. In the event that the delay
needed to complete the filing of any necessary patent application will exceed
the 120-day period, the Coordinating Committee will discuss the need for
obtaining an extension of the publication delay beyond the 120-day period. If it
is determined in good faith by the Coordinating Committee that Confidential
Information or proprietary information is being disclosed, the Parties will
consult in good faith to arrive at an agreement on mutually acceptable
modifications to the proposed publication or presentation to avoid such
disclosure.
10.3 Exclusions. Nothing in Sections 10.1 and 10.2 shall prevent either
Party: (i) in connection with efforts to secure financing at any time during the
term of this Agreement, from issuing statements as to achievements made, and the
status of the work being done by the Parties, under this Agreement, so long as
such statements do not jeopardize the ability to obtain patent protection on
Inventions or disclose non-public technical or scientific Confidential
Information; or (ii) from issuing statements that such Party determines to be
necessary to comply with applicable law (including the disclosure requirements
of the U.S. Securities and Exchange Commission, Nasdaq or any other stock
exchange on which securities issued by such Party are traded); provided,
however, that, to the extent practicable under the circumstances, such Party
shall provide the other Party with a copy of the proposed text of such
statements sufficiently in advance of the scheduled release thereof to afford
such other Party a reasonable opportunity to review and comment upon the
proposed text.
10.4 Confidentiality; Exceptions. Except to the extent expressly authorized
by this Agreement or otherwise agreed in writing, the Parties agree that, during
the term of this Agreement and for five years thereafter, the receiving Party
and/or its Affiliates shall, and shall ensure that their respective employees,
officers and directors shall, keep completely confidential and not publish or
otherwise disclose and not use for any purpose any information furnished to it
or them by the other Party and/or its Affiliates, or developed under or in
connection with this Agreement, except to the extent that it can be established
by the receiving Party by competent proof that such information: (i) was already
known to the receiving Party, other than under an obligation of confidentiality,
at the time of disclosure by the other Party; (ii) was generally available to
the public or otherwise part of the public domain at the time of its disclosure
to the receiving Party; (iii) became generally available to the public or was
otherwise part of the public domain after its disclosure and other than through
any act or omission of the receiving Party in breach of this Agreement; or (iv)
was disclosed to the receiving Party, other than under an obligation of
confidentiality, by a Third Party who had no obligation to the disclosing Party
not to disclose such information to others (all such information to which none
of the foregoing exceptions applies, "Confidential Information").
10.5 Exceptions to Obligation. The restrictions contained in Section 10.4
shall not apply to Confidential Information that: (i) is submitted by the
recipient to governmental authorities to facilitate the issuance of
Registrations for the Product, provided that reasonable measures shall be taken
to assure confidential treatment of such information; (ii) is provided by the
recipient to Third Parties under confidentiality provisions at least as
stringent as those in this Agreement, for consulting, manufacturing development,
manufacturing, external testing, marketing trials and, with respect to Kirin
and/or its Affiliates or other development/marketing partners of Kirin with
respect to
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any of the subject matter of this Agreement; or (iii) is otherwise required to
be disclosed in compliance with applicable laws or regulations or order by a
court or other regulatory body having competent jurisdiction; provided that if a
Party is required to make any such disclosure of the other Party's Confidential
Information such Party will, except where impracticable for necessary
disclosures (for example, to physicians conducting studies or to health
authorities), give reasonable advance notice to the other Party of such
disclosure requirement and, except to the extent inappropriate in the case of
patent applications, will use its best efforts to secure confidential treatment
of such Confidential Information required to be disclosed.
10.6 Limitations on Use. Each Party shall use, and cause each of its
Affiliates to use, any Confidential Information obtained by such Party from the
other Party or its Affiliates, pursuant to this Agreement or otherwise, solely
in connection with the activities or transactions contemplated hereby.
10.7 Remedies. Each Party shall be entitled, in addition to any other
right or remedy it may have, at law or in equity, to an injunction, without the
posting of any bond or other security, enjoining or restraining the other Party
and/or its Affiliates from any violation or threatened violation of this Section
10.
11. RECALL; INDEMNIFICATION.
11.1 Investigation; Recall. In the event that the Regulatory Authority in
any country in the Territory shall allege or prove that the Product does not
comply with applicable rules and regulations in such country, Kirin shall notify
Inspire immediately and both Parties shall cooperate fully regarding the
investigation and disposition of any such matter. If Kirin is required or should
deem it appropriate to recall the Product and such recall is due to any
negligence, recklessness or wrongful intentional acts or omissions by, or strict
liability of, or breach of representation and warranty by, Inspire, then and in
such event Inspire shall bear all reasonable direct costs associated with such
recall, including, without limitation, refund of the selling price and the
actual cost of conducting the recall in accordance with the recall guidelines of
the applicable Regulatory Authority. Otherwise, Kirin shall bear all costs and
expenses associated with such recall.
11.2 Indemnification by Kirin. Kirin shall indemnify, defend and hold
harmless Inspire and its Affiliates, and their respective directors, officers,
employees and agents, from and against any and all liabilities, damages, losses,
costs and expenses (including the reasonable fees of attorneys and other
professionals) arising out of or resulting from:
(a) negligence, recklessness or wrongful intentional acts or omissions
of Kirin and/or its Affiliates, and their respective directors, officers,
employees and agents, in connection with the work performed by Kirin under the
Development Program;
(b) any warranty claims, Product recalls or any tort claims of
personal injury (including death) or property damage relating to or arising out
of any manufacture, use, distribution or sale of the Product by Kirin and/or its
Affiliates due to any negligence, recklessness or wrongful intentional acts or
omissions by, or strict liability of, Kirin and/or its Affiliates, and their
respective
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directors, officers, employees and agents, except, in each case, to the
comparative extent such claim arose out of or resulted from the negligence,
recklessness or wrongful intentional acts or omissions of Inspire and its
Affiliates, and their respective directors, officers, employees and agents; or
(c) any breach of any representation or warranty made by Kirin under
Section 2.
11.3 Indemnification by Inspire. Inspire shall indemnify, defend and hold
harmless Kirin and/or its Affiliates and distributors, and their respective
directors, officers, employees and agents, from and against any and all
liabilities, damages, losses, costs and expenses (including the reasonable fees
of attorneys and other professionals) arising out of or resulting from:
(a) negligence, recklessness or wrongful intentional acts or omissions
of Inspire or its Affiliates, and their respective directors, officers,
employees and agents, in connection with Inspire's fulfillment of its
obligations under Section 4;
(b) any breach of any representation or warranty made by Inspire under
Section 2.
11.4 Notice of Indemnification. In the event that any person (an
"indemnitee") entitled to indemnification under Section 11.2 or 11.3 is seeking
such indemnification, such indemnitee shall inform the indemnifying Party of the
claim as soon as reasonably practicable after such indemnitee receives notice of
such claim, shall permit the indemnifying Party to assume direction and control
of the defense of the claim (including the sole right to settle it at the sole
discretion of the indemnifying Party, provided that such settlement does not
impose any obligation on, or otherwise adversely affect, the indemnitee or the
other Party) and shall cooperate as requested (at the expense of the
indemnifying Party) in the defense of the claim.
11.5 Complete Indemnification. As the Parties intend complete
indemnification, all costs and expenses incurred by an indemnitee in connection
with enforcement of Sections 11.2 and 11.3 shall also be reimbursed by the
indemnifying Party.
12. TERM; TERMINATION.
12.1 Term. This Agreement shall become effective as of the Effective Date
and, unless earlier terminated pursuant to the other provisions of this Section
12, shall expire as follows:
(a) As to each Product in each country in the Territory, this
Agreement shall expire on the later of: (i) the 10th anniversary of the First
Commercial Sale of such Product in such country, or (ii) the date on which the
sale of such Product ceases to be covered by a Licensed Claim in such country.
(b) This Agreement shall expire in its entirety upon the expiration of
this Agreement with respect to all Products in all countries in the Territory
pursuant to Section 12.1(a).
12.2 Termination for Cause. Either Party (the "non-breaching Party") may,
without prejudice to any other remedies available to it at law or in equity,
terminate this Agreement (or a
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portion of this Agreement as provided in Section 4.8) in the event the other
Party (the "breaching Party") shall have materially breached or defaulted in the
performance of any of its material obligations hereunder, and such default shall
have continued for 60 days after written notice thereof was provided to the
breaching party by the non-breaching party (or, if such default cannot be cured
within such 60-day period, if the breaching party does not commence and
diligently continue actions to cure such default during such 60-day period). Any
such termination shall become effective at the end of such 60-day period unless
the breaching party has cured any such breach or default prior to the expiration
of such 60-day period (or, if such default cannot be cured within such 60-day
period, if the breaching party has commenced and diligently continued actions to
cure such default). The right of either Party to terminate this Agreement, or a
portion of this Agreement, as provided in this Section 12.2 shall not be
affected in any way by such Party's waiver or failure to take action with
respect to any previous default.
12.3 Termination by Kirin. Kirin may terminate this Agreement in its
entirety upon one hundred eighty (180) days prior written notice to Inspire.
12.4 Effect of Expiration or Termination.
(a) Following the expiration of the term of this Agreement with
respect to a Product in a country pursuant to Section 12.1(a):
(i) Kirin shall have a non-exclusive, royalty-free, perpetual
right to the licenses granted to Kirin pursuant to Sections 5.1 and 5.2 for such
Product in such country.
(ii) Inspire shall have the fully-paid non-exclusive right to
continue to cross-reference and otherwise exercise its rights as set forth in
Section 4.5(d) under the Registration(s) and other regulatory filings for such
Product in such country.
(b) Following expiration of the term of this Agreement in its
entirety pursuant to Section 12.1(b):
(i) Kirin shall have a non-exclusive, royalty-free, perpetual
right to the licenses granted to Kirin pursuant to Sections 5.1 and 5.2 for all
Products in all countries in the Territory;
(ii) Inspire shall have: (A) the fully-paid non-exclusive right
to continue to cross-reference and otherwise exercise its rights as set forth in
Section 4.5(d) under the Registrations and other regulatory filings for all
Products in all countries in the Territory; and (B) the fully-paid, non-
exclusive, perpetual right to continue to use patents or know-how that embody or
relate to the Inventions described in Section 5.4 solely for the purposes set
forth in Section 5.4;
(c) If this Agreement is terminated with respect to a portion of the
Territory (the "Subject Portion") by Inspire pursuant to Sections 4.8 and 12.2,
in addition to any other remedies available to Inspire at law or in equity: (i)
Kirin shall promptly transfer to Inspire copies of all data, reports, records
and materials in Kirin's possession or control that relate, whether exclusively
or non-exclusively, to the Development Program in the Subject Portion and return
to Inspire all relevant
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records and materials in Kirin's possession or control that relate exclusively
to the Subject Portion and contain Confidential Information of Inspire (provided
that Kirin may keep one copy of such Confidential Information of Inspire for
archival purposes only); (ii) all licenses granted by Inspire to Kirin under
Sections 5.1 and 5.2 shall terminate with respect to the Subject Portion; and
(iii) Kirin shall transfer to Inspire, or shall cause its designee(s) under
Section 4.5(b) to transfer to Inspire, ownership of all INDs, Registration
Applications, Registrations and other regulatory filings made or filed for the
Product in the Subject Portion if permitted by applicable laws and regulations,
which transfer shall be taken into consideration as mitigation of Inspire's
damages as a result of such breach.
(d) If this Agreement is terminated in its entirety by Inspire
pursuant to Section 12.2 by reason of a breach by Kirin, in addition to any
other remedies available to Inspire at law or in equity: (i) Kirin shall
promptly transfer to Inspire copies of all data, reports, records and materials
in Kirin's possession or control that relate to the Development Program and
return to Inspire all relevant records and materials in Kirin's possession or
control containing Confidential Information of Inspire (provided that Kirin may
keep one copy of such Confidential Information of Inspire for archival purposes
only); (ii) all licenses granted by Inspire to Kirin under Sections 5.1 and 5.2
shall terminate; and (iii) Kirin shall transfer to Inspire, or shall cause its
designee(s) under Section 4.5(b) to transfer to Inspire, ownership of all INDs,
Registration Applications, Registrations and other regulatory filings made or
filed for the Product if permitted by applicable laws and regulations.
Furthermore, Inspire shall have a fully-paid, non-exclusive, perpetual right to
continue to use patents or know-how that embody or relate to the Inventions
described in Section 5.4 solely for the purposes set forth in Section 5.4.
(e) If this Agreement is terminated by Kirin pursuant to Section 12.2
by reason of a breach or default by Inspire, in addition to any other remedies
available to Kirin at law or in equity,: (i) the license granted to Inspire by
Kirin under Section 5.4 shall terminate; and (ii) Kirin shall have a royalty-
free, perpetual right to the licenses granted to Kirin pursuant to Sections 5.1
and 5.2 for all Products in all countries in the Territory. To that end, Kirin
may continue to hold and use all data, reports, records and materials that
relate to or are prepared in the course of the Development Program, and may hold
all INDs, NDAs, NDA Approvals and other regulatory filings made or filed by
Kirin for the Product, pursuant to this Agreement.
(f) If this Agreement is terminated in its entirety by Kirin pursuant
to Section 12.3: (i) Kirin shall promptly transfer to Inspire copies of all
data, reports, records and materials in Kirin's possession or control that
relate to the Development Program and return to Inspire all relevant records and
materials in Kirin's possession or control containing Confidential Information
of Inspire (provided that Kirin may keep one copy of such Confidential
Information of Inspire for archival purposes only); (ii) all licenses granted by
Inspire to Kirin under Sections 5.1 and 5.2 shall terminate; (iii) Kirin shall
transfer to Inspire, or shall cause its designee(s) under Section 4.5(b) to
transfer to Inspire, ownership of all INDs, Registration Applications,
Registrations and other regulatory filings made or filed for the Product if
permitted by applicable laws and regulations; and (iv) Kirin shall license,
royalty-free, to Inspire all rights to use the Trademark with respect to the
Products in all countries throughout the Territory under terms and conditions to
be agreed upon between the Parties. Furthermore, Inspire shall have a
fully-paid, non-exclusive, perpetual right to
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continue to use patents or know-how that embody or relate to the Inventions
described in Section 5.4 solely for the purposes set forth in Section 5.4.
12.5 Accrued Rights; Surviving Obligations.
(a) Termination, relinquishment or expiration of this Agreement for
any reason shall be without prejudice to any rights that shall have accrued to
the benefit of either Party prior to such termination, relinquishment or
expiration. Such termination, relinquishment or expiration shall not relieve
either Party from obligations which are expressly indicated to survive
termination or expiration of this Agreement.
(b) All of the Parties' rights and obligations under Sections 4.7, 5.8
(so long as Kirin sells Product), 7 (for so long as such Sections provide either
Party with any rights or obligations relating to the term of this Agreement),
9.1, 9.3 (solely with respect to actions commenced before the effective date of
termination of this Agreement), 9.4 (solely with respect to actions commenced
before the effective date of termination of this Agreement), 10.4, 10.5, 10.6,
10.7, 11, 12.4, 12.5, and 14 shall survive termination, relinquishment or
expiration of this Agreement.
13. FORCE MAJEURE.
13.1 Events of Force Majeure. Neither Party shall be held liable or
responsible to the other Party nor be deemed to be in default under, or in
breach of any provision of, this Agreement for failure or delay in fulfilling or
performing any obligation of this Agreement when such failure or delay is due to
force majeure, and without the fault or negligence of the Party so failing or
delaying. For purposes of this Agreement, force majeure is defined as causes
beyond the control of the Party, including, without limitation, acts of God;
acts, regulations, or laws of any government; war; civil commotion; destruction
of production facilities or materials by fire, flood, earthquake, explosion or
storm; labor disturbances; epidemic; and failure of public utilities or common
carriers. In such event Inspire or Kirin, as the case may be, shall immediately
notify the other Party of such inability and of the period for which such
inability is expected to continue. The Party giving such notice shall thereupon
be excused from such of its obligations under this Agreement as it is thereby
disabled from performing for so long as it is so disabled and the 30 days
thereafter. To the extent possible, each Party shall use reasonable efforts to
minimize the duration of any force majeure.
14. MISCELLANEOUS.
14.1 Relationship of Parties. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, employer-employee or joint
venture relationship between the Parties. No Party shall incur any debts or make
any commitments for the other, except to the extent, if at all, specifically
provided herein.
14.2 Assignment. Neither Party shall be entitled to assign its rights
hereunder without the express written consent of the other Party hereto, except
that each Party may assign its rights and
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transfer its duties hereunder to any assignee of all or substantially all of its
business (or that portion thereof to which this Agreement relates) or in the
event of such Party's merger, consolidation or involvement in a similar
transaction. No assignment and transfer shall be valid or effective unless done
in accordance with this Section 14.2 and unless and until the
assignee/transferee shall agree in writing to be bound by the provisions of this
Agreement.
14.3 Books and Records. Any books and records to be maintained under this
Agreement by a Party or its Affiliates shall be maintained in accordance with
generally accepted accounting principles, consistently applied.
14.4 Further Actions. Each Party shall execute, acknowledge and deliver
such further instruments, and do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
14.5 Notice.
(a) Any notice or request required or permitted to be given under or
in connection with this Agreement shall be deemed to have been sufficiently
given if in writing and personally delivered or sent by certified mail (return
receipt requested), facsimile transmission (receipt verified), or overnight
express courier service (signature required), prepaid, to the Party for which
such notice is intended, at the address set forth for such Party below:
(i) In the case of Inspire, to:
Inspire Pharmaceuticals, Inc.
4222 Emperor Boulevard, Suite 470
Durham, North Carolina 27703
USA
Attention: Christy Shaffer, Ph.D.
Facsimile No.: (919) 941-9797
Telephone No.: (919) 941-9777
(ii) In the case of Kirin, to:
Kirin Brewery Company, Ltd.,
Pharmaceutical Division
26-1 Jingumae 6-Chome
Shibuya-ku, Tokyo 150-8011
JAPAN
Attention: Koichiro Aramaki, Ph.D., President,
Pharmaceutical Division
Facsimile No.: 81 3 3499 6152
Telephone No.: 81 3 5485 6207
or to such other address for such Party as it shall have specified by like
notice to the other Party, provided that notices of a change of address shall be
effective only upon receipt thereof. If delivered
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personally or by facsimile transmission, the date of delivery shall be deemed to
be the date on which such notice or request was given. If sent by overnight
express courier service, the date of delivery shall be deemed to be the next
business day after such notice or request was deposited with such service. If
sent by certified mail, the date of delivery shall be deemed to be the third
business day after such notice or request was deposited with the U.S. or
Japanese Postal Service, as the case may be.
(b) All correspondence, notices and other communications of any kind
whatsoever given between the Parties, including, without limitation, all data,
information and reports relating to the Development Program and all regulatory
filings, shall be promptly provided to the other Party in English, or as an
English translation thereof, as the case may be. The cost of such translations
shall be borne by the sending party, except as otherwise provided in Section
4.5(d).
14.6 Use of Name. Except as otherwise provided herein, neither Party shall
have any right, express or implied, to use in any manner the name or other
designation of the other Party or any other trade name or trademark of the other
Party (including, without limitation, the Trademark) for any purpose in
connection with the performance of this Agreement.
14.7 Public Announcements. Except as permitted by Section 10.3, neither
Party shall make any public announcement concerning this Agreement or the
subject matter hereof without the prior written consent of the other Party,
which shall not be unreasonably withheld, provided that it shall not be
unreasonable for a Party to withhold consent with respect to any public
announcement containing any of such Party's Confidential Information.
14.8 Waiver. A waiver by either Party of any of the terms and conditions
of this Agreement in any instance shall not be deemed or construed to be a
waiver of such term or condition for the future, or of any subsequent breach
hereof. All rights, remedies, undertakings, obligations and agreements contained
in this Agreement shall be cumulative and none of them shall be in limitation of
any other remedy, right, undertaking, obligation or agreement of either Party.
14.9 Compliance with Law. Nothing in this Agreement shall be deemed to
permit a Party to export, reexport or otherwise transfer any Product sold under
this Agreement without compliance with applicable laws.
14.10 Severability. When possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
14.11 Amendment. No amendment, modification or supplement of any provisions
of this Agreement shall be valid or effective unless made in writing and signed
by a duly authorized officer of each Party.
14.12 Governing Law; English Original Controlling. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of New York
without regard to conflicts of law principles; provided, however, that any
arbitration proceeding conducted pursuant to Section
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14.13 shall be governed by the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards of June 10, 1958. The English original of this Agreement
shall prevail over any translation hereof.
14.13 Arbitration.
(a) Except as expressly otherwise provided in this Agreement, any
dispute arising out of or relating to any provisions of this Agreement shall be
finally settled by arbitration. If Kirin initiates any such arbitration
proceeding, such arbitration shall be held in Durham, North Carolina under the
then current commercial arbitration rules of the American Arbitration
Association. If Inspire initiates any such arbitration proceeding, such
arbitration shall be held in Tokyo, Japan under the then current commercial
arbitration rules of the Japan Commercial Arbitration Association. Such
arbitration shall be conducted by three arbitrators appointed according to said
rules and in the English language. The Parties shall instruct such arbitrators
to render a determination of any such dispute within four months after their
appointment.
(b) Any award rendered by the arbitrators shall be final and binding
upon the Parties. Judgment upon any award rendered may be entered in any court
having jurisdiction, or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may be. Each
Party shall pay its own expenses of arbitration, and the expenses of the
arbitrators shall be equally shared unless the arbitrators assess as part of
their award all or any part of the arbitration expenses of one Party (including
reasonable attorneys' fees) against the other Party.
(c) This Section 14.13 shall not prohibit a Party from seeking
injunctive relief from a court of competent jurisdiction in the event of a
breach or prospective breach of this Agreement by the other Party which would
cause irreparable harm to the first Party.
14.14 Entire Agreement. This Agreement, together with the schedules and
exhibits to the foregoing, sets forth the entire agreement and understanding
between the Parties as to the subject matter hereof and merges all prior
discussions and negotiations between them, and neither of the Parties shall be
bound by any conditions, definitions, warranties, understandings or
representations with respect to such subject matter other than as expressly
provided herein or as duly set forth on or subsequent to the date hereof in
writing and signed by a proper and duly authorized officer or representative of
the Party to be bound thereby.
14.15 Parties in Interest. All of the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties hereto and their respective permitted successors and assigns.
14.16 Descriptive Headings. The descriptive headings of this Agreement are
for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.
14.17 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, any one of which need not contain the signature of more
than one Party but all such
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counterparts taken together shall constitute one and the same agreement,
notwithstanding variations in format or file designation which may result from
the electronic transmission, storage and printing of copies of this Agreement
from separate computers or printers. Facsimile signatures shall be treated as
original signatures.
* * *
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed by its duly authorized representative as of the day and year first
above written.
INSPIRE PHARMACEUTICALS, INC.
By: /s/ Christy L. Shaffer
----------------------------------
Christy L. Shaffer, Ph.D.,
President
KIRIN BREWERY COMPANY, LIMITED,
PHARMACEUTICAL DIVISION
By: /s/ Koichiro Aramaki
----------------------------------
Koichiro Aramaki, Ph.D.,
President
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EXHIBIT A
----------
INITIAL PATENTS
---------------
1. Method of Detecting Lung Disease
Licensed from The University of North Carolina-Chapel Hill
Inventors: R. Boucher
U.S. Patent No. 5,628,984; Filed 31 Jul 1995; Issued 13 May 1997
PCT filed 31 Jul 1996 designating all member countries
South Africa: National application filed 31 Jul 1996; Issued 30 Apr 1997 as
No. 96/6425
Foreign National Phase filings entered in EPO, Australia, Brazil, Canada,
China, Hong Kong, Israel, Japan,
Mexico, New Zealand, Norway and Korea
Australia: Patent No. 705528; Issued 27 May 1998
Brazil: Examination requested 11 Aug 1999; no Official Action yet
Hong Kong: Application No. 98110587.1; filed 10 Sept 1998
Japan: Examinations requested
Korea: Response to first Official Action filed 19 Jul 2000
New Zealand: Notice of Acceptance received 17 May 2000; awaiting issuance
Publication WO97/05195 on 13 Feb 1997
2. Method of Detecting Lung Disease
Licensed from The University of North Carolina-Chapel Hill
Inventors: R. Boucher
U.S. Patent No. 5,902,567; Filed 12 Dec 1996; Issued 11 May 1999
Div. of above
3. A Sterilized Isotonic and pH-Adjusted Pharmaceutical Formulation of Uridine
Triphosphate
Inventors: K. LaCroix, et al.
U.S. Patent No. 5,962,432; Filed 3 Jul 1996; Issued 5 Aug 1999
US CIP filed 23 Dec 1997
4. Novel Pharmaceutical Compositions of Uridine Triphosphate
Inventors: K. LaCroix, et al.
U.S. CIP of US Patent No. 5,962,432 filed 23 Dec 1997
U.S. Patent No. 5,968,913 issued 19 Oct 1999; PCT filing 23 Dec 1998
Publication WO99/32085 on 1 Jul 1999
Non-convention countries S. Africa, Argentina and Taiwan designated 23 Dec
1998
Foreign National Phase filings 23 June 2000 entered in: Australia, Brazil,
Canada, China, Europe, Indonesia,
Israel, Japan, Mexico, Mongolia, Norway, New Zealand, South Korea, North
Korea, Singapore, and Vietnam
S. Africa Patent NO. 9811833 issued 22 Sept 1999
5. Method of Detecting Lung Disease
Licensed from The University of North Carolina-Chapel Hill
Inventors: R. Boucher
U.S. National Phase Application of WO97/05195, U.S. Serial No. 08/776,772;
Filed 22 Jan 1997; Notice of Allowance issued 9 Aug 1999 and Issue Fee paid
-------------------
9 Nov 1999
6. Method of Detecting Lung Disease
Licensed from The University of North Carolina-Chapel Hill
Inventors: R. Boucher
U.S. Con. of #5 above; Filed 4 Nov 1999; Serial No. 09/433,757
Notice of Allowance was issued 19 Jul 2000; Issue Fee is due 19 Oct 2000
-------------------
<PAGE>
EXHIBIT B
---------
COORDINATING COMMITTEE
----------------------
A. Initial Designees of Inspire:
1. Fred Johnston, Initial Secretary
2. Don Kellerman
3. Richard Evans
B. Initial Designees of Kirin:
1. Koji Kabaya, Initial Chairperson
2. Naoki Otsuki
3. Masanobu Yanai
