<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 17, 2000.
REGISTRATION NO. 333-96049
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
DRUGABUSE SCIENCES, INC.
(Exact Name of Registrant as Specified in its Charter)
------------------------------
<TABLE>
<S> <C> <C>
CALIFORNIA 2836 94-3222724
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
1430 O'BRIEN DRIVE
MENLO PARK, CA 94025
(650) 462-1000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
PHILIPPE POULETTY, M.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
DRUGABUSE SCIENCES, INC.
1430 O'BRIEN DRIVE
MENLO PARK, CA 94025
(650) 462-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
Jeffrey P. Higgins, Esq. Paul Hilton, Esq.
Gunderson Dettmer Stough Lexi Methvin, Esq.
Villeneuve Franklin & Hachigian, LLP Brobeck, Phleger & Harrison, LLP
155 Constitution Drive 370 Interlocken Blvd., Suite 500
Menlo Park, California 94025 Broomfield, Colorado 80021
(650) 321-2400 (303) 410-2000
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ____________
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ____________
If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 to the Form S-1 Registration Statement is being filed
for the sole purpose of filing additional exhibits.
<PAGE>
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Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table presents the costs and expenses, other than underwriting
discounts and commissions, payable by us in connection with the sale of common
stock being registered. All amounts are estimates except the SEC registration
fee and the NASD filing fees.
<TABLE>
<S> <C>
SEC Registration fee........................................ $18,216.00
NASD fee.................................................... 7,400.00
Nasdaq National Market listing fee.......................... *
Printing and engraving expenses............................. *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Blue sky fees and expenses.................................. *
Custodian and transfer agent fees........................... *
Miscellaneous fees and expenses............................. *
----------
Total................................................... $*
==========
</TABLE>
- ---------
* Information to be filed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Amended and Restated Articles of Incorporation limit the personal liability
of our directors for monetary damages to the fullest extent permitted by the
California General Corporation Law (the "California Law"). Under the California
Law, a director's liability to a company or its shareholders may not be limited:
- - for acts or omissions that involve intentional misconduct or a knowing and
culpable violation of law,
- - for acts or omissions that a director believes to be contrary to the best
interest of our company or our shareholders or that involve the absence of
good faith on the part of the director,
- - for any transaction from which a director derived an improper personal
benefit,
- - for acts or omissions that show a reckless disregard for the director's duty
to our company or our shareholders in circumstances in which the director
was aware, or should have been aware, in the ordinary course of performing a
director's duties, of a risk of a serious injury to the Registrant or its
shareholders,
- - for acts or omissions that constitute an unexcused pattern of inattention
that amounts to an abdication of the director's duty to our company or our
shareholders,
- - under Section 310 of the California Law concerning contacts or transactions
between our company and a director, or
- - under Section 316 of the California Law concerning directors' liability for
improper dividends, loans and guarantees.
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II-1
<PAGE>
PART II
- --------------------------------------------------------------------------------
The limitation of liability does not affect the availability of injunctions and
other equitable remedies available to our shareholders for any violation by a
director of the director's fiduciary duty to our company or our shareholders.
Our Articles of Incorporation also include an authorization for the company to
indemnify our "agents" (as defined in Section 317 of the California Law),
through bylaw provisions, by agreement or otherwise, to the fullest extent
permitted by law. Pursuant to this provision, the company's Bylaws provide for
indemnification of the company's directors, officers and employees. In addition,
the company, at its discretion, may provide indemnification to persons whom we
are not obligated to indemnify. The Bylaws also allow the company to enter into
indemnity agreements with individual directors, officers, employees and other
agents. These indemnity agreements have been entered into with all directors and
executive officers and provide the maximum indemnification permitted by law.
These agreements, together with the company's Bylaws and Articles of
Incorporation, may require us, among other things, to indemnify these directors
or executive officers (other than for liability resulting from willful
misconduct of a culpable nature), to advance expenses to them as they are
incurred, provided that they undertake to repay the amount advanced if it is
ultimately determined by a court that they are not entitled to indemnification,
and to obtain directors' and officers' insurance if available on reasonable
terms. Section 317 of the California Law and the company's Bylaws make provision
for the indemnification of officers, directors and other corporate agents in
terms sufficiently broad to indemnify such persons, under certain circumstances,
for liabilities (including reimbursement of expense incurred) arising under the
Securities Act. We currently maintain directors' and officers' liability
insurance.
There is no pending litigation or proceeding involving any of our directors,
officers, employees or agent in which indemnification will be required or
permitted. Moreover, we are not aware of any threatened litigation or proceeding
that might result in a claim for such indemnification. We believe that the
foregoing indemnification provisions and agreements are necessary to attract and
retain qualified persons as directors and executive officers. The Underwriting
Agreement (the form of which is filed as Exhibit 1.1 hereto) provides for
indemnification by the Underwriters of our company and our officers and
directors, and by us of the Underwriters, for certain liabilities arising under
the Securities Act or otherwise.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since January 1, 1997, we have issued and sold the following securities:
1. On March 28, 1997, we issued and sold an aggregate of 1,316,063 shares of
Series B Preferred Stock to a group of 26 investors for an aggregate
purchase price of $3,284,995.52.
2. On March 28, 1997, in connection with the Series B Preferred Stock
Financing, we issued and sold warrants to purchase 1,855,684 shares of
common stock to a group of 17 investors.
3. On March 17, 1999, we issued and sold an aggregate of 932,456 shares of
Series C Preferred Stock to a group of 29 investors for an aggregate
purchase price of $2,327,428.25.
4. On October 6, 1999, we issued and sold an aggregate of 2,236,563 shares of
Series D Preferred Stock to a group of 27 investors for an aggregate
purchase price of $10,660,409.49.
5. On October 6, 1999, in connection with the Series D Preferred Stock
Financing, we issued and sold warrants to purchase 178,913 shares of
Series D Preferred Stock to a group of 26 investors.
6. On October 6, 1999, our French subsidiary, DrugAbuse Sciences, SAS, issued
and sold an aggregate of 2,445,126 shares of the capital stock of DrugAbuse
Sciences, SAS to a group of 9 investors for an aggregate purchase price of
$11,654,492.35. These shares convert into shares of our Series D Preferred
Stock upon certain circumstances.
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II-2
<PAGE>
PART II
- --------------------------------------------------------------------------------
7. On October 6, 1999, in connection with the Series D Preferred Stock
Financing, our French subsidiary, DrugAbuse Sciences, SAS, issued and sold
warrants to purchase 195,606 shares of Series D Preferred Stock to a group
of 9 investors.
8. On January 31, 2000, we issued 2,445,126 shares of our Series D Preferred
Stock in connection with the exchange of 1,849 shares of DrugAbuse
Sciences, SAS.
9. On January 31, 2000, and in connection with the exchange of the DrugAbuse
Sciences, SAS shares, our French subsidiary, DrugAbuse Sciences, SAS issued
and sold warrants to purchase 195,606 shares of Series D Preferred Stock to
a group of 9 investors.
From inception through January 20, 2000, we granted options to purchase
2,680,024 shares of common stock at exercise prices ranging from 0.045 to 0.45
per share to employees, consultants, directors, and other service providers
pursuant to our 1994 and 1999 stock plans.
The sale of the above securities was deemed to be exempt from registration under
the Securities Act in reliance upon Section 4(2) of the Securities Act or
Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b)
of the Securities Act as transactions by an issuer not involving any public
offering or transactions under compensation benefit plans and contracts relating
to compensation as provided under Rule 701. The recipients of securities in each
transaction represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution and appropriate legends were affixed to the share certificates
issued in these transactions. All recipients had adequate access, through their
relationships with us, to information about us.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------------------------------------------------------------------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Our Amended and Restated Articles of Incorporation.
3.2* Form of Amended and Restated Articles of Incorporation to be
filed upon the closing of the offering made under this
Registration Statement.
3.3** Our Bylaws.
3.4* Our Amended and Restated Bylaws to be effective upon the
closing of the offering made under this Registration
Statement.
4.1** Amended and Restated Investors' Rights Agreement, dated
October 6, 1999.
4.2* Form of our Common Stock certificate.
5.1* Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
10.1* Form of Indemnification Agreement entered into between us
and each of our directors and executive officers.
10.2** 1994 Stock Option Plan.
10.3** 1999 Stock Plan A.
10.4** 1999 Stock Plan B.
10.5* 2000 Stock Incentive Plan.
10.6* 2000 Employee Stock Purchase Plan.
</TABLE>
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II-3
<PAGE>
PART II
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------------------------------------------------------------------------------
<C> <S>
10.7* 2000 Directors' Option Plan.
10.8** Sublease between Etak, Inc. and us dated October 1, 1998, as
amended.
10.9+ Clinical Supply Agreement by and between the Registrant and
SP Pharmaceuticals, L.L.C. dated November 24, 1999.
10.10+ Research Agreement with Option to License by and between us
and Southern Research Institute dated February 28, 1997.
10.11+ Product License Agreement by and between us and Southern
Research Institute dated July 1, 1999.
10.12+ Research Agreement with Option to License by and between us
and Southern Research Institute dated January 21, 2000.
10.13+ Product License Agreement by and between us and Southern
Research Institute dated January 21, 2000.
10.14+ License Agreement by and between us and SCRIPPS dated
June 18, 1996.
10.15+ License Agreement by and between us and Pasteur Meriux
Serums & Vaccins dated June 8, 1999.
10.16+ Manufacturing and Supply Agreement by and between us and
Pasteur Meriux Serums & Vaccins dated June 8, 1999.
21.1** List of Subsidiaries.
23.1** Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.2* Consent of Counsel. Reference is made to Exhibit 5.1.
23.3** Consent of Patent Counsel.
24.1** Power of Attorney.
27.1** Financial Data Schedule.
</TABLE>
- ---------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission ("SEC"). The omitted information has been filed
separately with the SEC pursuant to the application for confidential
treatment.
(b) FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted because the information required to be presented
in them is not applicable or is shown in the consolidated financial statements
or related notes.
ITEM 17. UNDERTAKINGS
We undertake to provide to the underwriters at the closing specified in the
underwriting agreement, certificates in the denominations and registered in the
names as required by the underwriters to permit prompt delivery to each
purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
under the California Corporations Code, the Certificate of
- --------------------------------------------------------------------------------
II-4
<PAGE>
PART II
- --------------------------------------------------------------------------------
Incorporation or our bylaws, the underwriting agreement, or otherwise, we have
been advised that in the opinion of the Securities and Exchange Commission this
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for indemnification
against these liabilities, other than the payment by us of expenses incurred or
paid by a director, officer, or controlling person of ours in the successful
defense of any action, suit or proceeding, is asserted by a director, officer or
controlling person in connection with the securities being registered in this
offering, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether this indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of this issue.
We undertake that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by us under Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered, and
the offering of these securities at that time shall be deemed to be the
initial bona fide offering.
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II-5
<PAGE>
- --------------------------------------------------------------------------------
Signatures
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Menlo
Park, State of California, on this 17th day of February, 2000.
<TABLE>
<S> <C>
DRUGABUSE SCIENCES, INC.
By: /s/ PHILIPPE POULETTY, M.D.
--------------------------------------------
Philippe Pouletty, M.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES
INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------------------------------------------------------------
<C> <S> <C>
/s/ PHILIPPE POULETTY, M.D.
--------------------------------- Chairman of the Board and Chief February 17, 2000
Philippe Pouletty, M.D. Executive Officer
* Chief Financial Officer, Senior Vice
--------------------------------- President, Business Development and
Elizabeth M. Greetham Director
*
--------------------------------- Medical Director and Director
David E. Smith, M.D.
*
--------------------------------- Director
Raffy Kazandjian
*
--------------------------------- Director
Fred P. Phillips IV
*
--------------------------------- Director
Russell Ricci
*
--------------------------------- Director
Gordon Russell
*
--------------------------------- Director
Vincent Worms
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ PHILIPPE POULETTY, M.D.
--------------------------------------
Philippe Pouletty, M.D. February 17, 2000
ATTORNEY-IN-FACT
</TABLE>
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II-6
<PAGE>
- --------------------------------------------------------------------------------
Index to exhibits
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------------------------------------------------------------------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Our Amended and Restated Articles of Incorporation.
3.2* Form of Amended and Restated Articles of Incorporation to be
filed upon the closing of the offering made under this
Registration Statement.
3.3** Our Bylaws.
3.4* Our Amended and Restated Bylaws to be effective upon the
closing of the offering made under this Registration
Statement.
4.1** Amended and Restated Investors' Rights Agreement, dated
October 6, 1999.
4.2* Form of our Common Stock certificate.
5.1* Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
10.1* Form of Indemnification Agreement entered into between us
and each of our directors and executive officers.
10.2** 1994 Stock Option Plan.
10.3** 1999 Stock Plan A.
10.4** 1999 Stock Plan B.
10.5* 2000 Stock Incentive Plan.
10.6* 2000 Employee Stock Purchase Plan.
10.7* 2000 Directors' Option Plan.
10.8** Sublease between Etak, Inc. and us dated October 1, 1998, as
amended.
10.9+ Clinical Supply Agreement by and between the Registrant and
SP Pharmaceuticals, L.L.C. dated November 24, 1999.
10.10+ Research Agreement with Option to License by and between us
and Southern Research Institute dated February 28, 1997.
10.11+ Product License Agreement by and between us and Southern
Research Institute dated July 1, 1999.
10.12+ Research Agreement with Option to License by and between us
and Southern Research Institute dated January 21, 2000.
10.13+ Product License Agreement by and between us and Southern
Research Institute dated January 21, 2000.
10.14+ License Agreement by and between us and SCRIPPS dated June
18, 1996.
10.15+ License Agreement by and between us and Pasteur Meriux
Serums & Vaccins dated June 8, 1999.
10.16+ Manufacturing and Supply Agreement by and between us and
Pasteur Meriux Serums & Vaccins dated June 8, 1999.
21.1** List of Subsidiaries.
23.1** Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.2* Consent of Counsel. Reference is made to Exhibit 5.1.
23.3** Consent of Patent Counsel.
24.1** Power of Attorney.
27.1** Financial Data Schedule.
</TABLE>
- ---------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission ("SEC"). The omitted information has been filed
separately with the SEC pursuant to the application for confidential
treatment.
<PAGE>
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
EXHIBIT 10.9
CLINICAL SUPPLY AGREEMENT
Drug Abuse Sciences, ("DAS"), a corporation incorporated under
the laws of the State of California, with offices located at 1430 O'Brien Drive,
Suite E, Menlo Park, California, 94025 and SP Pharmaceuticals, L.L.C., a New
Mexico limited liability company ("SP"), located at 4272 Balloon Park Road,
N.E., Albuquerque, New Mexico 87109 agree:
1. RECITALS. SP proposes to manufacture the Product for DAS
for use in clinical trials in accordance with the terms of this Agreement.
2. THE WORK. SP will manufacture and supply DAS with the
Product pursuant to DAS Purchase Orders in accordance with the Specifications,
CGMPs and other terms described in the Statement of Work pursuant to the terms
of this Agreement and all appendices, exhibits and other attachments, subject to
DAS' right to have a third party perform the work specified in section 5.2 of
this Agreement. Subject to Section 3.3 below, any amendments to the Statement of
Work must be mutually agreed to by the Parties in writing and must be attached
to the Statement of Work, whereupon such amendment will become part of this
Agreement. Upon mutual agreement of the parties, DAS may add additional products
to this Agreement to be finished by SP, and the Parties will amend this
Agreement to cover such additional products. Any additional products added to
this Agreement will require their own statements of work, and a statement of
work for the related work. SP will have a right of first refusal to manufacture
each lot of clinical supply of Product required by DAS on the same terms and
conditions as may be offered by DAS to a third party.
2.1 SUPPLIED MATERIALS. SP will order the Supplied
Materials from vendors mutually agreed upon by the parties. SP agrees to inspect
the Supplied Materials and agrees to use all diligent efforts to replace
non-conforming Supplied Materials on a timely basis. All materials and products,
including Supplied Materials, paid for or provided by DAS pursuant to this
Agreement shall be and remain the property of DAS.
2.2 ACTIVE INGREDIENT AND [****]. DAS shall
furnish to SP [********] in these quantities as are reasonably necessary to
enable SP to manufacture the desired quantities of Product in accordance with
the Statement of Work. All shipments of Active Ingredient shall be
accompanied by a certificate of analysis from the bulk supplier of the Active
Ingredient, confirming the quantity and purity of such Active Ingredient. SP
shall verify the labeled quantity of Active Ingredient against the bill of
lading and shall perform release testing to confirm that the Active
Ingredient conforms with specifications defined in Appendix B. If SP fails to
properly carry out the above-referenced inspection and analysis obligations,
or its storage and handling obligations, SP shall be responsible for the
non-conformance or other failure of the Active Ingredient. SP will inform DAS
of any discrepancies in quantity and identity of the Active Ingredient or
failure of the Active Ingredient to conform to the bulk supplier's
certificate of analysis in any respect as soon as reasonably practical after
receipt of the Active Ingredient. SP shall also inform DAS of any damage to
the Active Ingredient received that is visually obvious (e.g., damaged or
punctured containers) within twenty (20) days of SP's receipt of the Active
Ingredient. Active Ingredient that is rejected in accordance with the
foregoing or SP's standard operating procedures will be returned
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
to the bulk supplier at DAS' expense and direction and DAS will be
responsible for arranging replacement Active Ingredient on a timely basis to
allow SP to produce the Product.
2.3 PACKAGING REQUIREMENTS. SP shall furnish all
labor, packaging materials, and packaging supplier necessary to package the
Product in sealed vials in accordance with the Statement of Work and at the
prices set forth in with the Pricing Appendix. SP guarantees that is packaging
procedures shall comply with all relevant laws, rules and regulations of the FDA
and the Foreign Authorities.
2.4 RECORDS. SP will maintain and provide to DAS
adequate documentation with respect to the manufacture of Product to properly
document and support all of DAS' filings as they relate to Product production
with the FDA. Further, during the Hold Period, SP shall maintain records and
samples relating to such Product batches sufficient to substantiate and verify
its duties and obligations hereunder, including but not limited to, records of
Active Ingredient used, Product manufactured, work in progress, Product
analyses, quality control tests and the like. During the Hold Period, SP shall
not destroy any records relating to regulatory compliance or quality assurance
without giving DAS notice and an opportunity to take possession of or copy such
records as DAS may reasonably require. After the Hold Period, SP will transfer
all such records to DAS or at DAS' request destroy such records in accordance
with SP's standard operating procedures then in effect (but which shall be at
least as protective as the SP Standard Operating Procedure attached hereto as
Appendix D). DAS will reimburse SP for reasonable out-of-pocket costs incurred
for such transfer.
3. QUALITY CONTROL.
3.1 SPECIFICATIONS. SP shall not implement any
changes relevant to the Product which are not in compliance with the
Specifications without obtaining DAS' prior written approval.
3.2 SP LABORATORY SERVICES. SP will test the Active
Ingredient, [****] and finished Product in accordance with the Statement of
Work attached as Appendix B. SP will provide required manning and supervision,
training, procedures, qualifications, reagents, analysis, investigating, data
collection and reporting with respects the Product, and DAS will provide all
validated analytical methodologies and standards, including method transfer
protocols needed for the testing of Active Ingredient, [****] and finished
Product.
3.3 MODIFICATIONS. DAS will inform SP in writing of
any modifications to the Specifications or Statement of Work as soon as
reasonably practicable. SP will inform DAS of the amount of reasonable
additional costs, if any, SP would incur due to the modification. If DAS elects
to adopt the modification, DAS will (i) at DAS' election either directly
purchase required additional equipment or materials which are approved by SP, or
reimburse SP for required direct capital expenditures, and (ii) pay SP for any
increased services or materials which are necessary to implement the
modification to the Specifications or Statement of Work at SP's then current
pricing rates for such services and materials. SP will provide DAS a detailed
and itemized written explanation of capital expenditures and additional charges
for services and materials incurred due to the modification. If the parties
agree that SP is
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
technically unable to comply with a proposed modification or if DAS is unwilling
to pay SP's costs for direct capital expenditures in advance, DAS shall have the
option to withdraw the proposed modification or negotiate a payment plan
acceptable to SP. When a cost-saving modification is recommended by DAS and
implemented by SP, SP will decrease its charges to DAS by an amount equal to the
reduction in price resulting from the decreased services or materials afforded
by the modification. SP and DAS will revise the Pricing Appendix, Statement of
Work, Specifications and related schedules to account for any modifications
agreed to and implemented by the parties pursuant to this paragraph. SP is not
required to accept any modification which in SP's reasonable belief would create
a compliance risk for any regulatory requirement.
3.4 ACCESS TO SP FACILITIES BY DAS. Upon reasonable
notice and at a time mutually agreeable to the parties, or immediately in the
event of a bona fide emergency, SP shall permit DAS representatives to enter
SP's plant during regular business hours for the purpose of making quality
control inspections of the facilities used in production of Product for DAS, for
taking inventories of Active Ingredient and Product, and for examining and
copying any relevant records (described in Section 2.04) during normal business
hours. DAS may observe and inspect all activities and records associated with
manufacturing, quality control, storage, and waste disposal. [********]. Any DAS
Representatives shall be advised of the confidentiality obligations under this
Agreement and shall follow such security, safety and facility access procedures
as are reasonably designated by SP.
3.5 SAFETY. SP shall have sole responsibility for
adopting and enforcing safety procedures for the handling and production of the
Product by SP and handling and disposal of waste relating thereto that comply in
all material respects with all federal, New Mexico state, regulatory and
Albuquerque local environmental and occupational safety and health requirements
based on material safety data sheets or other raw material, Active Ingredient,
or finished Product data. Such responsibilities shall include the proper
disposal of waste in an appropriate manner consistent with the nature of the
waste and at a permitted waste disposal facility. Such responsibilities shall
terminate as to Product upon delivery thereof to DAS. DAS shall, at SP's
reasonable request, advise and consult with SP concerning such safety
procedures. Subject to the foregoing, DAS acknowledges and agrees that it is
responsible for providing the material safety data sheets, toxicology, safe
handling and disposal requirements for Active Ingredient, [****], Product, and
other raw materials provided by DAS.
4. NON-CONFORMING PRODUCT. Upon receiving a written request
from DAS, SP will rework or, if necessary, remanufacture a new Product lot to
replace any Non-conforming Product lot. If SP agrees that the Product in
question is Non-conforming Product as a result of an error or omission by SP, it
shall promptly pay to DAS the Reimbursement Amount. At DAS' option, (i) SP shall
be relieved of any obligation to deliver any substitute Product with respect to
the Non-conforming Product lot, or (ii) SP shall use best efforts to replace the
Non-conforming Product with substitute Product that conforms with the
Specifications and any other requirements of this Agreement as soon as
reasonably possible, in which case DAS shall pay SP for the substitute Product
in accordance with the Pricing Appendix and this Agreement. SP shall dispose of
any Non-conforming Product which is the result of an error or omission of SP at
its own expense. DAS shall pay for disposal of all Non-conforming
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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Product which is not due to the error or omission of SP, and which occurs after
the Product is surrendered by SP for shipping to DAS or its representatives.
4.1 If SP does not agree that the Product is
Non-conforming Product as a result of an error or omission by SP, the parties
shall timely consult with each other and attempt to resolve the discrepancies.
If the parties cannot resolve the discrepancies in a timely manner, they shall
promptly nominate an independent, reputable laboratory, which shall carry out
appropriate analyses with respect to such Product to determine if it conforms to
the Specifications. If the results conclude that the Product conformed to the
Specifications, DAS will be responsible for all amounts owed to the laboratory
and shall not be entitled to the Reimbursement Amount. If the results conclude
that the Product did not conform to the Specifications, as a result of an error
or omission by SP, SP shall be responsible for all amounts owed to Laboratory
and shall promptly pay DAS the Reimbursement Amount.
5. PRICING AND PAYMENT TERMS.
5.1 PAYMENT. Subject to the terms of this Agreement,
DAS will pay SP for the Product, SP miscellaneous charges, and for any services
rendered by SP in accordance with the pricing terms described in the Pricing
Appendix, provided that such SP services (including the manufacture of Product)
have been rendered pursuant to a DAS Purchase Order and in accordance with the
Statement of Work. [********] and (ii) [********] without the requirement of a
Purchase Order. The amount to be paid to SP by DAS under this Agreement does not
include the cost of materials provided by DAS to SP. In the event DAS and SP
have not executed a development agreement prior to the execution of this
clinical supply agreement, DAS will pay SP [********] in accordance with the
terms set forth in the Pricing Appendix.
5.2 OUTSOURCE WORK. DAS will have the right to
have a third party perform the work for the [********] (item 4 in the Pricing
Appendix), [********] (item 10 in the Pricing Appendix) and [********] (item
11 in the Pricing Appendix) (collectively referred to as the "Outsource
Work"). If a third party does perform the Outsource Work for DAS as set forth
above, DAS will have no obligation to pay SP for items 4, 10 and 11 in the
Pricing Appendix. If DAS decides to have SP perform the Outsource Work
instead of a third party, DAS will pay SP for the Outsource Work in
accordance with the prices and terms set forth in the Pricing Appendix. SP
will not be responsible for any delays in testing or manufacturing the
clinical supplies which are due to delays of the third party performing the
Outsource Work.
6. PURCHASE ORDERS. Purchase Orders shall be written and shall
specify the quantity of Product ordered, the location to which the Product is to
be delivered and the requested delivery date. [********], as necessary, to the
attention of David Lunt, Pricing Analyst, [********] confirmed by SP. SP will
use its best efforts to deliver Product in accordance with the delivery schedule
listed in the Statement of Work. However, the parties recognize that
installation, validation, and operation of the equipment used to manufacture the
Product may affect the delivery dates.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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6.1 SHIPMENT. SP will ship the Product and an
applicable certificate of analysis at DAS' expense pursuant to a DAS Purchase
Order. Delivery of the Product will be F.O.B. SP's shipping docks in
Albuquerque.
6.2 TITLE. Title to all Active Ingredient,
[********], all work in process to produce the Product, and all completed
Product, shall at all times remain in DAS. However, SP shall assume liability
for any loss or damage relating to the foregoing while SP has custody over
the same. If any Active Ingredient, work in process or Product is destroyed,
damaged or lost while in SP's custody or control, SP shall reimburse DAS for
DAS' out-of-pocket costs for items provided by DAS for the manufacture of the
Product, provided that reimbursement for Active Ingredient and [********] per
lot produced under this Agreement. SP shall keep DAS' title to all Active
Ingredient, work in process to produce Product, and finished Product while in
SP's custody free and clear of all liens and encumbrances. SP shall pay all
costs associated with securing the release of any such liens and encumbrances.
7. TAXES AND FEES. DAS will be liable for and pay to SP any
sales, use, gross receipts or other taxes, licenses, or fees (excluding tax
based on net income and franchise taxes) required to be paid by SP to the State
of New Mexico or any other state or tax jurisdiction as a result of purchasing
materials, rendering services, transferring property, or taking any other action
necessary to fulfill the terms of this Agreement.
8. COMPLIANCE WITH APPLICABLE LAWS. SP and DAS will each
comply with all applicable state, United States and Foreign Authorities
regulations, including without limitation all applicable FDA laws and
regulations and all Environmental Protection Agency laws and regulations, and
will provide such information and documentation to each other as is necessary
for such compliance.
9. NATURE OF RELATIONSHIP. The relationship between the
parties shall be governed by the terms of this Agreement and shall not extend to
other activities, transactions or contracts. Neither party to this Agreement is
in any way the legal representative or agent of, nor has any authority to assume
or create any obligation on behalf of, the other party. Under no circumstances
shall the employees, agents or representatives of one party be considered
employees, agents or representatives of any other. Each party shall perform
under this Agreement as an independent contractor and nothing herein shall be
construed to be inconsistent with that relationship or status. This Agreement
shall not constitute, create, or in any way be interpreted as a joint venture,
partnership, or formal business organization of any kind. Storage of the
finished Product by SP will not create or constitute an agency relationship
between the parties.
10. PRODUCT DEVELOPMENT. DAS and SP will negotiate in good
faith toward the execution of a mutually acceptable supply agreement by
[********], pursuant to which [********] the supply of quantities of Product
during the Initial Supply Period for the United States and Foreign Authorities.
DAS and SP agree to negotiate in good faith during the term of this Agreement
towards the execution of a mutually acceptable Supply Agreement for the period
following the Initial Supply Period, taking into account such factors as (but
not limited to) capacity, delivery location, environmental constraints, price
and quality issues and the like. If
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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the parties cannot reach agreement on such a Supply Agreement, then DAS shall be
free to enter into a definitive agreement with a third party.
11. CONFIDENTIALITY.
11.1 DISCLOSURE AND USE OF CONFIDENTIAL INFORMATION.
Each Receiving Party will maintain in confidence all Confidential Information
disclosed pursuant to this Agreement and will not use any Confidential
Information except as permitted by this Agreement, or disclose the same to
anyone other than its Representatives who need to know such Confidential
Information in connection with the Receiving Party's activities under this
Agreement. SP acknowledges and agrees that all information relating to the
Product, the SRI Process and the Process Improvements shall be deemed to be the
Confidential Information of DAS.
11.2 USE BY REPRESENTATIVES. Each party will use its
best efforts to ensure that its Representatives do not disclose or make any
unauthorized use of any Confidential Information. Each party will notify the
other promptly upon discovery of any unauthorized use or disclosure of the
other's Confidential Information. Each Receiving Party shall direct its
Representatives to handle all Confidential Information in a manner consistent
with the terms of this Agreement and to take all precautions and measures that
are reasonably necessary to prevent any improper use of the Confidential
Information. At Disclosing Party's request, Receiving Party shall cause its
Representatives to execute written confidentiality agreements, in form
satisfactory to both Disclosing Party and Receiving Party, requiring such
Representatives to handle all Confidential Information in a manner consistent
with the terms of this Agreement.
11.3 LIMITATION ON CONFIDENTIALITY.
A. The obligation of confidentiality imposed by this
Section 11 will not apply to the extent that (i) the Receiving Party is required
to disclose information by applicable law, regulation or order of a governmental
agency or a court of competent jurisdiction, subject to the conditions of
Section 11.04; (ii) the Receiving Party can demonstrate that the disclosed
information was at the time of disclosure already in the public domain, other
than as a result of actions or failure to act of the Receiving Party or its
Representatives in violation of this Agreement; (iii) the disclosed information
was rightfully known by the Receiving Party (as shown by its written records)
prior to the date of disclosure to the Receiving Party in connection with the
transactions contemplated by this Agreement; or (iv) the disclosed information
was received by the Receiving Party on an unrestricted basis from a source which
is not under duty of confidentiality to the Disclosing Party.
B. All Confidential Information developed by SP
pursuant to this Agreement, excluding Elements of the Process which are
generally known or have been used by SP prior to development of the Process
shall be deemed to be Confidential Information of DAS disclosed by DAS to SP and
exception (iii) above will not be applicable thereto.
C. Notwithstanding any limitations imposed by Section
11 of this Agreement, SP will have the full right to use and disclose such
portions of the Confidential Information, including Confidential Information
owned by DAS which relates to the Process
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
Improvements, as are necessary to allow SP to fully exploit its licenses
described in Section 12.3 of this Agreement.
11.4 DISCLOSURE OF CONFIDENTIAL INFORMATION. If the
Receiving Party must make disclosure of any Confidential Information as a result
of the issuance of a court order or other government process, the Receiving
Party will promptly, but in no event more than forty-eight hours after learning
of such court order or other government process, notify, by personal delivery or
facsimile, the Disclosing Party of the same. At the Disclosing Party's expense,
the Receiving Party will (a) take all reasonably necessary steps requested by
the Disclosing Party to defend against the enforcement of such court order or
other government process, and (b) permit the Disclosing Party to intervene and
participate with counsel of its choice in any proceeding relating to the
enforcement thereof.
11.5 IRREPARABLE HARM. Each party acknowledges that
its breach of these Confidentiality provisions would cause irreparable injury to
the other party for which monetary damages are not an adequate remedy.
Accordingly, a party will be entitled to injunctive relief and other equitable
remedies in the event of such a breach by the other.
11.6 RETURN AND RETENTION. The Receiving Party shall,
upon the written request of the Disclosing Party, promptly return to the
Disclosing Party all Confidential Information (including notes, writings and
other material developed therefrom) and all copies thereof and retain none for
its files, except that SP may retain original documents generated by SP and
except to the extent SP is required by law to retain such Confidential
Information. The return or retention of such information shall not relieve the
Receiving Party of its continuing obligation of confidentiality hereunder. All
original documents prepared by SP in support of development of the Product, the
development work and the manufacturing process will be maintained by SP during
the Hold Period. SP will provide DAS with reasonable written notice not less
than 60 days prior to the proposed destruction of such documents and will
provide DAS with reasonable opportunity to have such items shipped to DAS at
DAS' expense prior to destruction. At a time mutually agreeable to the parties
or within 3 business days if in connection with a regulatory filing, DAS will
have access to original documents relating to the Product, the development work
and the manufacturing process during ordinary SP business hours, and may use
copies of the original documents for any purpose, including, without limitation,
submission to the FDA or other regulatory agencies in connection with an
application for governmental approval.
11.7 PUBLIC ANNOUNCEMENT. The parties agree that no
press release, public announcement or publication regarding this Agreement or
the relationship of the parties, (except to the extent that it may be legally
required), shall be made unless mutually agreed to prior to the release or
dissemination of any such press release, public announcement or publication.
12. PATENTS AND INTELLECTUAL PROPERTY RIGHTS.
12.1 OWNERSHIP OF INTELLECTUAL PROPERTY. The
parties expect that the Product will be manufactured using a process
developed by SP which is based upon a process developed by [****]. The
parties expect that the process to
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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be developed by SP will, among other things, provide for the manufacture of
Product in large quantities and allow the Product to be (i) [********], and
(ii) [********]. SP expects to improve upon the SRI Process by developing new
technologies and by using certain processes and information that SP
developed, used or had access to prior to development of the Product. DAS and
SP intend and agree that the Product, Process, and Process Improvements shall
be solely and exclusively owned by DAS. SP will own improvements to the SP
Intellectual Property which are developed by SP while performing the
development work for DAS and which do not rely on or incorporate the
proprietary rights (whether or not confidential) of DAS or its suppliers.
12.2 SP ASSIGNMENT. SP hereby assigns and agrees to
assign to DAS all of SP's ownership rights in and to the Product, Process and
any and all Process Improvements, which assignment includes all related
intellectual property rights. SP will execute such documents and provide such
assistance as may be deemed necessary by DAS to apply for, defend or enforce any
United States or foreign letters patent which are the result of any Process
Improvements developed, in whole or in part, by SP.
12.3 DAS LICENSES TO SP.
A. DAS hereby grants to SP a non-exclusive, royalty
free license to use the Product, Process, SRI Process, and Process Improvements
for the purpose of producing, developing or manufacturing the Product for DAS.
B. Subject to the limitations set forth below, DAS
hereby grants to SP a perpetual, non-exclusive, royalty-free license to use
any Process Improvements for any purpose, including without limitation in the
development or manufacture of products for third parties, except that (a) SP
will have no license or right to use in any respect (and shall not permit
others to use) the Process Improvements in the development, production or
manufacture of products, processes or compounds with the [********]. DAS will
not have any claim or cause of action against any third party based on SP's
use of the Process Improvements for such third party solely in the
development, production or manufacture of a product or processes which is
outside the Field. The SP License may only be revoked if SP (i) exceeds the
scope of the SP License or (ii) violates the non-competition provisions of
Section 22 of this Agreement; [********].
C. SP hereby grants to DAS an irrevocable, perpetual,
non-exclusive, royalty-free license to use for any purpose any Elements of the
Process that are owned by SP and which are directly incorporated into the
Process.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
13. INSURANCE. SP and DAS shall each, throughout the term
of this Agreement, obtain and maintain at its own cost and expense from a
qualified insurance company, [****], including [****] insurance designating
each other as an [****]. Such policies shall provide protection against any
and all claims, demands and causes of action arising out of any defects or
failure to perform, alleged or otherwise, of the Product or any material used
in connection therewith or any use thereof. The amount of coverage shall be a
minimum of [********] combined single limit coverage, for each occurrence for
bodily injury and/or for property damage. SP and DAS each agree to furnish
within [********] after execution of this Agreement proof that such insurance
is in effect.
14. REGULATORY MATTERS.
14.1 COMPLIANCE. SP shall be responsible for
compliance of the manufacturing, quality control, testing, packaging procedures,
and any of its other pertinent obligations hereunder, with FDA standards,
including those pertaining to CGMPs, provided that, as set forth in the
Statement of Work, DAS shall provide and be responsible for compliance of the
(I) testing methods and procedures for the Active Ingredient and [****]
provided by DAS, (II) label copy for use in or with the Product, (III) conduct
and implementation of the clinical trials, (IV) Product distribution, and (V)
any other DAS' obligations hereunder in accordance with FDA standards. Each
party will provide all reasonable assistance and cooperation to the other if
necessary to respond to FDA audits, inspections, inquiries or requests
concerning the Product. However, DAS shall reimburse SP for any costs incurred
in connection with SP's efforts to comply with regulatory requests that are
outside of the normal course of SP's business in accordance with the terms of a
pricing protocol to be mutually agreed upon by DAS and SP ("Pricing Protocol").
DAS employees present at the SP facility shall at all times adhere to safety
regulations, CGMPs and work schedule generally applicable to SP's own employees,
provided that such DAS employees are notified of the same.
14.2 SAFETY MATTERS. DAS shall give SP prompt notice
of any information it receives regarding the safety of the Active Ingredient,
[****] or Product, including any confirmed or unconfirmed information on
serious adverse events associated with the use of the Product that in the
reasonable judgment of DAS are related to the manufacture of the Product by SP
or are necessary to satisfy SP's obligations to the FDA with respect to the
manufacture of the Product by SP. SP shall give DAS prompt notice of any
information it receives regarding the safety of the Product, including any
confirmed or unconfirmed information on adverse, serious or unexpected events
associated with the use of the Product. For serious, unexpected events, notice
must be given by telephone to DAS immediately after receipt of the information
and followed by written notice not more than one business day thereafter. All
responsibility and cost for filing any reports with the FDA concerning such
reactions (including Drug Experience Reports) caused by Product manufactured for
DAS shall be DAS' responsibility and the cost borne by DAS. With respect to
problems relating to SP's production of the Product, SP will provide all
reasonable assistance to DAS in responding to any complaints or inquiries
regarding the Product, including reviews and testing of retained samples,
Product, and batch records relating to a complaint. SP will promptly inform DAS
of any environmental non-compliance or regulatory issues that could jeopardize
SP's ability to manufacture and package the Product hereunder. DAS will
reimburse SP for the cost of SP's investigation into
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
the Product complaint or inquiry where the cause of such complaint or inquiry is
not due to an act or omission of SP.
14.3 COOPERATION. SP will maintain and, upon
reasonable notice, provide to DAS such documentation, data, and other
information as DAS may require for submission to the FDA. SP shall also make
available its cooperation and consultation if reasonably requested by DAS or
required by the FDA for development of additional data, performance of studies
concerning the Product, or consulting with DAS in addressing any issues raised
by FDA concerning manufacture and quality control of the Product, and DAS shall
pay SP in accordance with the Pricing Protocol. SP shall also provide, if
required by the FDA, information concerning its production processes and quality
control procedures with respect to the Product.
14.4 INSPECTION. SP shall promptly notify DAS of any
announced or unannounced FDA or Foreign Authority inspection relating to
production of the Product. SP shall permit a DAS representative to accompany the
FDA or Foreign Authority representative during any inspection relating to the
production of the Product, provided that DAS' representative shall only
participate as an observer and be present only during those portions of the
inspection that relate to the Product. SP shall immediately provide to DAS
copies of any resulting document of action (FDA Form 483 inspectional
observation report, regulatory letters, etc.) resulting from these audits.
Should either SP or DAS receive any such document of action, it shall
immediately notify the other and shall provide to the other an opportunity to
the extent feasible under the circumstances to provide input to any response to
any such document of action.
15. INDEMNIFICATION.
A. DAS will indemnify and hold harmless the
Indemnified SP Parties against any and all losses, liabilities, damages, and
costs (including attorneys' fees and expenses) incurred as a result of any third
party claim, arising out of (i) any failure by DAS to comply with any applicable
governmental regulation (including, without limitation, any applicable
environmental laws), (ii) the breach of any representation, warranty, or
covenant of DAS contained in this Agreement, (iii) a claim that use of the
Process or a process, Active Ingredient or material as provided by DAS infringes
a valid patent or trademark of such third party, to the extent that such claim
arises out of use of such process, Active Ingredient or material as provided by
DAS, (iv) the use by SP of any raw or component material(s) supplied by DAS to
SP or by a third party on DAS' behalf, (v) the promotion, marketing,
distribution and sale, whether directly or through distributors, of the Product,
(vi) any product recall which is not due to an error or omission of SP, or (vii)
personal injury, product liability or property damage relating to or arising
from the Product supplied or the manufacturing process; PROVIDED, HOWEVER, THAT
IN NO EVENT SHALL DAS INDEMNIFY OR HOLD HARMLESS ANY OF THE INDEMNIFIED SP
PARTIES IN THE EVENT SP OR ANY THIRD PARTY IS IN ANY WAY RESPONSIBLE BY GROSS
NEGLIGENCE OR WILLFUL ACT FOR SUCH LOSSES, LIABILITIES, DAMAGES, COSTS AND
EXPENSES.
B. SP will indemnify and hold harmless the
Indemnified DAS Parties against any and all losses, liabilities, damages, and
costs (including attorneys' fees and expenses)
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
incurred as a result of any third party claim, commenced or threatened, arising
out of, based upon, or in connection with (i) any breach of any representation,
warranty, covenant or agreement of SP contained in this Agreement, (ii) any
failure by SP to comply with any state, United States, FDA or Foreign
Authorities regulations (including, without limitation, any applicable
environmental laws), or (iii) any product recalls [********] produced
hereunder), personal injury, product liability or property damage relating to or
arising from any Product supplied or manufacturing Process developed by SP under
this Agreement, BUT ONLY TO THE EXTENT SUCH FAILURE, RECALLS OR WITHDRAWALS,
PERSONAL INJURY, PRODUCT LIABILITY OR PROPERTY DAMAGE REFERRED TO WITHIN (ii)
AND (iii) OF THIS PARAGRAPH IS ATTRIBUTABLE TO SP'S BREACH OF THIS AGREEMENT,
OR SP'S FAILURE TO MANUFACTURE ANY PRODUCT IN CONFORMANCE WITH THE
SPECIFICATIONS; PROVIDED FURTHER THAT SP WILL NOT INDEMNIFY AND HOLD HARMLESS
INDEMNIFIED DAS PARTIES FOR (I) EXPENSES INCURRED IN DEFENDING AGAINST ANY
LITIGATION, CLAIM, OR ANY AND ALL AMOUNTS REASONABLY PAID IN SETTLEMENT OF ANY
CLAIM OR LITIGATION ARISING OUT OF DAS' GROSS NEGLIGENCE INCLUDING, WITHOUT
LIMITATION, DAS' GROSS NEGLIGENCE IN PRODUCT DEVELOPMENT, PRODUCT DESIGN,
PRODUCT SUPPLY, OR INSTRUCTIONS FOR PRODUCT USE OR (II) THE PORTION OF ANY LOSS
OF ACTIVE INGREDIENT OR [****] PROVIDED BY DAS WHICH IS IN EXCESS OF
[********], OR (III) ANY LOSS, LIABILITY OR EXPENSE ARISING FROM DAS' OR ANY
THIRD PARTY'S MODIFICATION OR GROSS NEGLIGENCE OR UNINTENDED USE OF ANY
MANUFACTURING PROCESS DEVELOPED OR IMPROVED BY SP PURSUANT TO THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION THE PROCESS AND ANY IMPROVEMENTS THERETO, ONLY TO
THE EXTENT SUCH LIABILITY WAS CAUSED BY SUCH MODIFICATION OR GROSS NEGLIGENCE OR
UNINTENDED USE AS SET FORTH ABOVE.
C. DAS and SP will cooperate with each other with
respect to resolving any claim or liability with respect to which
indemnification may be sought under this Agreement, including, without
limitation, by making commercially reasonable efforts to mitigate or resolve any
such claim or liability.
D. The foregoing indemnity obligations are
conditioned upon the following: (i) the Indemnified Party will promptly notify
the Indemnifying Party in writing of the claim; (ii) the Indemnified Party will
fully cooperate with the Indemnifying Party in the defense of any such claim;
and (iii) the Indemnified Party will provide the Indemnifying Party sole control
over defense and settlement of any such claim.
E. Upon request, each party will (i) provide such
records and information reasonably relevant to the claim, (ii) make employees
available on a mutually convenient basis to provide additional information, and
(iii) explain any material provided under this Agreement.
16. WARRANTIES.
16.1 SP'S WARRANTIES. SP hereby represents and
warrants as follows:
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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(a) The Product shall conform in all respects to the
Specifications and shall be manufactured and packaged in compliance with
CGMPs and other quality assurance procedures and processes in accordance with
FDA or other applicable regulatory standards;
(b) SP shall fully comply in all material respects with
any law, regulation, ordinance, order, injunction, decree or requirement
applicable to the manufacture of the Product or the handling and disposal of
the waste;
(c) SP shall maintain in effect all required federal, FDA,
Foreign Authorities, New Mexico state, and local governmental permits,
licenses, orders, applications and approvals regarding the manufacturing of
the Product, and SP shall manufacture Product in accordance with all such
permits, licenses, orders, applications and approvals;
(d) The Supplied Materials shall (i) not be adulterated or
misbranded within the meaning of the FFDCA or within the meaning of any
applicable state or municipal law in which the definitions of adulteration
and misbranding are substantially the same as those contained in the FFDCA,
and (ii) not be articles that may not, under the FFDCA or any other
applicable law, statute or regulation, be introduced into interstate
commerce; and
(e) The Product, at the time of delivery to DAS, shall
have a minimum shelf life of thirty (30) days as determined by validated
stability information (i.e., Product performance/potency/efficacy shall
continue to conform to the Specifications during the 30 day period).
(f) To the best of SP's knowledge (without requiring SP to
conduct a patent search), the Process Improvements will not infringe any
intellectual property or proprietary rights of any third party.
16.2 DAS' WARRANTIES. DAS hereby represents and warrants as
follows:
(a) DAS shall comply in all material respects with any
law, regulation, ordinance, order, injunction, decree or requirement
applicable to the clinical testing, distribution and labeling of the Product;
(b) DAS shall maintain in effect all material required
federal, Foreign Authorities, New Mexico state, and local governmental
permits, licenses, orders, applications and approvals regarding the clinical
testing, distribution and labeling of the Product, and DAS shall conduct
clinical trials and market the Product in accordance with all such permits,
licenses, orders, applications and approvals; and
(c) Following delivery of Product to DAS by SP, such
Product thereafter shall (i) not be adulterated or misbranded within the
meaning of the FFDCA or any Foreign Authorities within the meaning of any
applicable state or municipal law in which the definitions of adulteration
and misbranding are substantially the same as those contained in the FFDCA or
Foreign Authorities, and (ii) not be articles that may not, under the FFDCA
or any other applicable law, statute or regulation, be introduced into
interstate commerce; and
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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(d) All material safety data sheets and other raw
material, Active Ingredient, finished Product or other data supplied by DAS
to SP are accurate to the best of DAS' knowledge.
(e) SP's use of the SRI Process to produce the Product
will not infringe any intellectual property or proprietary rights of SRI.
16.3 WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN THIS AGREEMENT, SP AND DAS MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
17. APPENDICES, AMENDMENTS AND CONFLICTS. The terms of the
appendices, exhibits, schedules and other attachments to this Agreement may
be amended from time to time upon the written consent of an authorized
representative of both SP and DAS. In cases where there is of a conflict
between the terms of this Agreement and the terms of an appendix, exhibit,
schedule or other attachment, the terms of this Agreement will control.
18. GOVERNING LAW. If SP should bring any suit, action or proceeding
arising out of or relating to this Agreement against DAS, this Agreement
shall be governed by and construed in accordance with the laws of the State
of California. If DAS should bring any suit, action, or proceeding arising
out of this Agreement against SP, this Agreement shall be governed by and
construed in accordance with the laws of the State of New Mexico.
19. SEVERABILITY. The invalidity or unenforceability of any term or
provision of this Agreement shall not affect the validity or enforceability
of any other term or provision hereof.
20. SURVIVAL. The obligations in Sections 2.4, 6.2, 9, 11, 12, 14,
15, 16, 17, 18, 19, 20, 21.4, 22 and 23 shall survive the expiration or
termination of this Agreement for any reason whatsoever.
21. TERM AND TERMINATION.
21.1 TERM. Subject to the termination provisions below, the
initial term of this Agreement shall commerce on the date this Agreement is
signed by authorized representatives of both parties and shall continue until
February 1, 2001 unless otherwise terminated as provided below. The parties
may agree to extend this Agreement for additional successive one year periods
until the Development Work is completed and SP will update pricing to account
for pricing increases or decreases at such renewals.
21.2 TERMINATION FOR CONVENIENCE. DAS shall have the right to
terminate this Agreement for convenience on [********] to SP if DAS
reasonably determines that the Product is not commercially or technically
viable.
21.3 TERMINATION FOR CAUSE. In addition, each party shall have
the right to terminate this Agreement:
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
(a) by giving the other party written notice thereof if
the other party fails to perform or violates any material provision of this
Agreement in any material respect, and such failure continues uncured for a
period of [********] after the date the notifying party gives written notice
to the defaulting party with respect thereto; or
(b) immediately if the other party is declared insolvent
or bankrupt by a court of competent jurisdiction, or a voluntary petition of
bankruptcy is filed in any court of competent jurisdiction by the other party
makes or executes any assignment for the benefit of creditors.
21.4 EFFECT OF TERMINATION.
(a) Upon termination of this Agreement for any reason
(whether due to breach of either party or otherwise), SP shall furnish to DAS
a complete inventory of all stock on hand of the Active Ingredient, Polymers,
work in progress for the manufacture of the Product and finished Product.
Unless otherwise agreed to between the parties, all stock on hand as of the
effective date of termination of this Agreement shall be dealt with promptly
as follows:
(i) Product manufactured and packaged pursuant to
this Agreement shall be delivered by SP to DAS, whereupon DAS shall pay SP
therefor in accordance with the terms hereof;
(ii) Work in progress commenced by SP shall be
completed by SP and delivered to DAS, whereupon DAS shall pay SP therefor in
accordance with the terms hereof; and
(iii) [********] not necessary to complete (b) above
shall be disposed of by SP or provided to DAS at DAS' option. At DAS' option,
SP will at its expense tender for delivery to DAS any raw materials paid for
by DAS under this Agreement, whereupon DAS shall be responsible for the costs
of shipping and related insurance.
(b) Upon termination of this Agreement, SP shall at DAS'
request and at DAS' cost, assist DAS in all ways reasonably requested by DAS
to transfer the manufacture of Product to DAS or its designated agents
including, but not limited to, the transfer of any information concerning
SP's processes, quality control procedures and testing, the education and
training of DAS personnel or other designated third parties, and any other
act necessary for DAS to have equivalent capabilities to manufacture Product.
SP shall designate a senior level manager as liaison who shall be responsible
for facilitating and coordinating the transfer of such information. DAS and
SP shall negotiate in good faith the reasonable cost and the reasonable
period of time for which SP shall provide such assistance.
22. NON-COMPETITION AGREEMENT.
A. SP [********], (i) [********], or (ii) [********] [********]
[********], subject to the extended non-competition period in Section 22.B.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
B. If DAS and SP execute a mutually acceptable supply agreement
for the supply of Product for the Initial Supply Period or any period
thereafter, then the [********] shall be extended and continue uninterrupted
for an additional period ending [********] after:
(i) [********]; or
(ii) the end of any year following the first year
after FDA approval of the Product in which DAS' orders for Product from SP
[********]; provided, however, that if SP is not the exclusive supplier of
Product to DAS in any such year (following the first year after FDA approval
of the Product) where DAS orders for Product from [********], then the
[********] will only continue for a period of [********] after the end of any
such year [********].
C. The Non-Competition Restriction imposed upon SP will
immediately terminate if DAS substantially ceases its activities in the Field.
23. DEFINITIONS.
23.1 "ACTIVE INGREDIENT" means [********].
23.2 "CGMPs" means the Current Good Manufacturing Practices as
established by the FDA with regard to the manufacture of finished
pharmaceuticals as set forth in 21 CFR 211.
23.3 "CONFIDENTIAL INFORMATION" means, collectively, all
information disclosed pursuant to this Agreement and designated in writing as
"confidential" by the Disclosing Party, which includes but is not limited to:
(i) all information relating to the Product, Active Ingredient, raw
materials, licenses, patents, patent applications, technology, processes and
business plans of the Disclosing Party, (ii) all notes, analyses, studies or
other documents prepared by the Receiving Party which contain or are based on
such information or material relating to the information disclosed by the
Disclosing Party, and (iii) all information obtained by the Receiving Party
upon visiting the Disclosing Party's facilities or reviewing products, plans,
processes, formulations, operations, facilities, equipment or other assets of
the Disclosing Party, whether or not such information or process is the
property of the Disclosing Party.
23.4 "DAS LICENSE" means the license from SP to DAS as defined
and limited in Section 12.3.C.
23.5 "DISCLOSING PARTY" means a party to this Agreement which
discloses Confidential Information to the other party.
23.6 "ELEMENTS" means each of those steps, procedures,
processes or directives involved in producing the Product.
23.7 "FDA" means the United States Food and Drug Administration.
23.8 "FFDCA" means the Federal Food, Drug, and Cosmetic Act.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
23.9 "FIELD" means the development, production or manufacture
of products, processes or compounds with the primary indication directed to
the treatment of drug, alcohol, or other substance abuse addiction which
involve slow release properties.
23.10 "FOREIGN AUTHORITIES" means those foreign countries
listed on the attached Appendix C and the governments and regulating
authorities of such foreign countries.
23.11 "HOLD PERIOD" means the period of time defined in SP's
Standard Operating Procedures for "Retention and Control of QA Records"
during which time SP will retain records and samples relating to Product
batches and which will not be for a period which is less than five years
following the manufacture date of any particular Product batches or such
longer period as may be required by the FDA.
23.12 "INDEMNIFIED DAS PARTIES" means DAS, its affiliates, any
present or future parent or subsidiary of them, and their respective
officers, members, managers, employees, counsel, agents, investment bankers,
accountants, and affiliates which may be entitled to indemnification pursuant
to the terms of this Agreement.
23.13 "INDEMNIFIED SP PARTIES" means SP, its affiliates, any
present or future parent or subsidiary of them, and their respective
officers, members, managers, employees, counsel, agents, investment bankers,
accountants, and affiliates which may be entitled to indemnification pursuant
to the terms of this Agreement.
23.14 "INDEMNIFIED PARTY" means any party seeking
indemnification under this Agreement.
23.15 "INDEMNIFYING PARTY" means any party which will be
indemnifying the Indemnified Party pursuant to this Agreement.
23.16 "INITIAL SUPPLY PERIOD" means the first two years
following FDA approval of the Product.
23.17 "NON-CONFORMING PRODUCT" means any Product which does not
meet the Specifications.
23.18 [********]
23.19 "PRICING APPENDIX" means Appendix A and includes the
pricing terms for the work to be performed by SP pursuant to this Agreement,
as amended from time to time by the parties.
23.20 "PROCESS" refers to each Element involved in producing
the Product, as well as all of those Elements taken together, but does not
include any Element of the Process developed, used or available to SP prior
to commencement of the Product development, including without limitation SP's
[********] in time release or other products prior to commencement of the
Product development.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
23.21 "PROCESS IMPROVEMENTS" means any improvements to the
[********] developed by SP, including without limitation new technologies
developed by SP during the Product development and any improvements to
processes or information developed, used or available to SP prior to
development of the Product, but does not include the SRI Process.
23.22 "PRODUCT" means [********].
23.23 "PURCHASE ORDER" means a written order for Product from
DAS.
23.24 "RECEIVING PARTY" means a party to this Agreement which
receives Confidential Information from the other party to this Agreement.
23.25 "REIMBURSEMENT AMOUNT" means the sum of (i) any costs
reasonably expended by DAS in order to identify defects in Non-conforming
Product (e.g., testing), subject to a maximum amount equal to [********] for
the Non-conforming Product lot; (ii) all fees paid to SP for the
Non-conforming Product lot that cannot be shipped due to the defect; (iii)
the replacement cost of Active Ingredient that cannot be shipped due to the
Non-conforming Product lot, provided that SP's liability for such cost shall
not exceed [********] for each Non-conforming Product lot; and (iv) the
transportation charges paid by DAS for the Non-conforming Product lot.
23.26 "REPRESENTATIVES" means the officers, directors, members,
managers, representatives, agents or employees of one of the parties to this
Agreement.
23.27 "SPECIFICATIONS" means the Product specifications
described in the Statement of Work attached as Appendix B and mutually agreed
to by the parties.
23.28 "SP LICENSE" means the license from DAS to SP as defined
and limited in Section 12.03.B.
23.29 "SP INTELLECTUAL PROPERTY" means any patent, know-how, or
trade secret which SP can demonstrate was in existence and owned by SP prior
to the beginning of any development work for DAS.
23.30 "STATEMENT OF WORK" means the Statement of Work attached
to this Agreement as Appendix B.
23.31 "SUPPLIED MATERIALS" means all materials necessary to
manufacture the Product which are to be supplied by SP, but not including
[********] and any other materials to be supplied by DAS.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
DAS
By: /s/ Philippe Pouletty 11/24/99
--------------------------------------- -------------------------------
Date:
Title: Chairman
SP PHARMACEUTICALS, L.L.C.,
A New Mexico limited liability company
By: /s/ D. Hogan 11/24/99
--------------------------------------- -------------------------------
Its: Operating Manager Date:
------------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
DRUG ABUSE SCIENCES
PRICING APPENDIX
ESTIMATED CLINICAL SUPPLY COSTS
AND TIME LINES
The prices listed below are an estimate only based upon SP's knowledge of the
current process. Because the process is in development, SP cannot predict the
final outcome of the development process. Thus these prices are expected to
change.
ITEMIZED COSTS AND ESTIMATED TIME FRAMES:
1. JUNE 1, 1999-DECEMBER 1999
a) [********]
b) [********]
c) [********]
d) [********]
e) [********]
2. DECEMBER 1, 1999 - MARCH 1, 2000
a) [********]
b) [********]
c) [********]
d) [********]
e) [********]
3. SCALE-UP:
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Known Activity Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] Costs negotiated and paid for between [******] and DAS
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
Estimate based upon knowledge of process ,to date.
Expect to bill on a time, travel, per diem and material
basis at [********] per hour depending on level of
person used.
- ------------------------------------------------------------ ---------------------------------------------------------
[********] runs. Price includes [********] ([********] per lot)
- - [********]
- - [********]
- - [********]
- - [********]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
Price does NOT include: TBD - Price to be mutually agreed upon at a later date
- - [********]
- - [********]
- - [********]
Drug Abuse Sciences provides SP with:
- - [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Estimated Total [********] to [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
4. PLACEBO LOT MANUFACTURE [********]:
Estimated Time Frame: Manufacture: [********]
Release: [********]
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Item Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
Placebo lot manufacture: $ [********]
- - Manufacture up to [********]
- - One lot
Does not include cost for: TBD - Price to be mutually agreed upon at a later date
- - [********]
- - [********]
- - [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Document preparation: [********]
- - [********]
- - [********]
- - [********]
- - [********]
- - [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
5. [********]:
Estimated Time Frame: [********]
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Known Activity Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] [********] per tote
- ------------------------------------------------------------ ---------------------------------------------------------
Transportation [********] [********] per round trip
- ------------------------------------------------------------ ---------------------------------------------------------
Process validation. To be contracted out. [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Regulatory compliance work [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Estimated Total [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
6. MANUFACTURING EQUIPMENT LEASE OR PURCHASE:
Estimated time frame for completion: [********]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Equipment Expected Total Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] DAS to provide
- ------------------------------------------------------------ ---------------------------------------------------------
[********] DAS to provide
- ------------------------------------------------------------ ---------------------------------------------------------
[********] DAS to provide
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- - [********]
- - [********]
[********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] Modification to be performed on SP equipment to adapt
to DAS requirements.
No Charge.
- ------------------------------------------------------------ ---------------------------------------------------------
Miscellaneous Equipment and Accessories [********] (price not expected to exceed)
(hoses, valves, modifications to existing
equipment, etc.)
- ------------------------------------------------------------ ---------------------------------------------------------
Estimated Total for SP [********]
Plus appropriate
shipping, handling,
installation and
taxes.
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
7. [********]:
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Test Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] [********] per vendor lot
Certificate of Analysis:
- [********]
- [********]
- [********]
- [********]
- [********]
[********]
[********]
[********]
[********]
[********]
[********]
- [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] Certificate of Analysis Outside Laboratory costs plus [********]
- - [********] (to be performed by a contract [********] - Price to be mutually agreed upon at a
laboratory) at a later date.
- - [********] (to be performed by a contract
laboratory) SP is waiting for copies of methods from the
- - [********] three outside laboratories that [********]. If
- - [********] SP is unable to obtain copies of the methods
- [********] SP will need to discuss other options with [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
- [********]
- [********]
- - [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
8. CLINICAL/STABILITY LOTS OF [********]:
Estimated Time Frame: First lot manufacture: [********]
First lot Release: [********]
Second lot Manufacture: [********]
Second lot Release: [********]
Third lot Manufacture: [********]
[********]
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Item Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
Manufacturing Cost [********]
[********]:
- [********]
- [********]
- - [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Document preparation [********] per formulation
- [********]
- [********]
- [********]
- [********]
- [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Total for [********] lot [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Total for [********] lots [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
SP assumes DAS prefers to schedule the lots several weeks apart to allow for
obtaining test data on finished product for one lot prior to manufacturing the
next lot.
9. CLINICAL/STABILITY LOTS OF DILUENT [********]:
Estimated time frame to Manufacture: [********]
Estimated time frame to Release: [********]
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Item Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
Manufacturing Cost Diluent [********] per lot
Includes the cost of the
- - [********]
- - [********]
- - [********]
- ------------------------------------------------------------ ---------------------------------------------------------
- - [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
Does not include the cost of:
- [********] See Item 13. Validations
- [********]
- [********]
- [********]
- [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
10. STABILITY STUDY [********] (SCHEDULE ATTACHED) [Outsource Work. DAS has
the right to have a third party perform the work for the Stability
Study for [********]]:
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Number of Lots on Stability Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Estimated Total [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
Estimated Time Frame: Each study begins upon lot release and continues through
the [********] test point following ICH guidelines.
11. STABILITY STUDY DILUENT (SCHEDULE ATTACHED) [Outsource Work. DAS has
the right to have a third party perform the work for the Stability
Study for Diluent:
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Number of Lots on Stability Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] [********] per lot
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
Estimated Time Frame: The study begins upon lot release and continues through
the [********] test point following ICH guidelines.
12. GOVERNMENT SUBMISSION:
Estimated Time Frame: Dependent upon DAS Projected Time Frames.
DAS needs to inform SP of IND requests [********] in advance of date DAS
needs the information.
DAS needs to inform SP of NDA requests [********] in advance of date DAS
needs the information.
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Submission Type Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] [********]
[********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
[********]
- ------------------------------------------------------------ ---------------------------------------------------------
Estimated Total [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
13. VALIDATIONS:
Estimated Start Date: [********].
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Validations Stage Expected Cost
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] SP does not plan to perform process validation on the
clinical lots
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
[********] Perform additional work on a time and materials basis
at [********].
- ------------------------------------------------------------ ---------------------------------------------------------
[********] TBD - Price to be mutually agreed upon at a later date
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] TBD - Price to be mutually agreed upon at a later date.
[********]
- ------------------------------------------------------------ ---------------------------------------------------------
Estimated Total $[********] without terminal sterilization validation
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ESTIMATED CLINICAL COSTS: APPROXIMATE RANGE
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1. [********] [********] [********]
2. [********] [********]
3. [********] [********]
4. [********] [********]
5. [********] [********]
6. [********] [********]
7. [********] [********]
8. [********] [********]
9. [********] [********]
10. [********] [********]
11. [********] [********]
-----------------------------------------------------------------
ESTIMATED TOTAL [********]* [********]*
[********] [********] [********]
[********] [********] [********]
</TABLE>
*Does not include costs outlined in various sections that are yet to be
determined.
PREPAYMENT:
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
A [********] or [********] prepayment of the estimated total (less the costs for
the optional items of [********].
PURCHASE ORDERS:
A purchase order will be issued by DAS prior to the initiation of any work with
the exception of the SP Process Transfer and Scale Up, Experimental lots and
Travel incurred to date, Equipment leased or to be purchased, through December
1, 1999. Verbal authorization to initiate work is acceptable and will be
followed immediately with the issue of a purchase order. The terms of the
contract and this Appendix and any amendments to them will supercede any
conflicts with the Terms and Conditions of the Purchase Order.
PAYMENT METHODS:
1. PER CENT OF COMPLETION: The SP Process Transfer and Scale Up will be invoiced
using a per cent of completion method.
2. MILESTONES: Invoices for items other than the SP Process Transfer and Scale
Up will be sent at the completion of each milestone.
PAYMENT LOCATION: Payment shall be made to SP by electronic transfer of funds
to:
[********]
APPLICATION TO PREPAYMENT: Invoices for items covered under both the Percent of
Completion and Milestone methods will be applied to the prepayment until the
prepayment amount is met. Once the prepayment is met, [********].
INTEREST OF [********] PER MONTH WILL BE CHARGED ON ALL INVOICES PAID LATER
THAN [********] FROM DATE OF INVOICE.
<TABLE>
<CAPTION>
- ---------------------------------------- ------------------------------- ---------------------------------------------
PERCENT OF COMPLETION EXPECTED COST INVOICE DATE
- ---------------------------------------- ------------------------------- ---------------------------------------------
<S> <C> <C>
SP process transfer and scale up [********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
- ---------------------------------------- ------------------------------- ---------------------------------------------
MILESTONE EXPECTED COST MILESTONE COMPLETION (BILLING DATE
- ---------------------------------------- ------------------------------- ---------------------------------------------
Travel [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
Experimental Lots [********] per lot [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] per lot [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
- ---------------------------------------- ------------------------------- ---------------------------------------------
of the lot, whichever comes first.
[********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
Equipment lease or purchase [********] expected plus [********]
and installation shipping, handling,
installation and taxes
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
[********] TBD
- ---------------------------------------- ------------------------------- ---------------------------------------------
Manufacture [********] of [********] per lot [********]
Documentation Preparation [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] per lot [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] per lot [********]
[********] [********]
[********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] Final report
[********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
[********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] Final report
[********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
[********] [********] [********]
- ---------------------------------------- ------------------------------- ---------------------------------------------
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
APPENDIX B
"SCOPE OF WORK"
DRUG ABUSE SCIENCES [********]
PRODUCT MANUFACTURE AND TESTING RESPONSIBILITIES AND
REQUIREMENTS
1) DRUG ABUSE SCIENCES will provide:
a) Vendor released [********]
b) [********]
c) Validated analytical methodology and standards (i.e., reference
standards or in-house standards) required to test the materials
provided by DAS for the following. The standards shall be from the
same lot DRUG ABUSE SCIENCES WILL use for its tests.
i) Receiving
ii) In process bulk solution
iii)Finished product testing
2) These budgetary quotes are based upon SP performing the following:
a) Performance of the following Receiving Tests:
[********]
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
TEST SPECIFICATION
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
Appearance [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Water (Karl Fisher) [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Assay [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Related Substances Pass
- - [********] [********]
- - [********] [********]
- - [********] [********]
- - [********] [********]
- - [********] [********]
- - [********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Identification by IR To Be Determined (TBD)
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
[********]
- ------------------------------------------------------------ ---------------------------------------------------------
TEST SPECIFICATION
- ------------------------------------------------------------ ---------------------------------------------------------
Identity by [********]
- ------------------------------------------------------------ ---------------------------------------------------------
Inherent viscosity, [********] Unknown
- - [********] [********]
- - [********] [********]
- - [********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] Unknown
- ------------------------------------------------------------ ---------------------------------------------------------
[********] to be defined Unknown
- ------------------------------------------------------------ ---------------------------------------------------------
[********] (Total Concentration) Unknown
- ------------------------------------------------------------ ---------------------------------------------------------
b) Performance of the following In Process Tests:
- ------------------------------------------------------------ ---------------------------------------------------------
TEST SPECIFICATION
- ------------------------------------------------------------ ---------------------------------------------------------
Appearance TBD
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] TBD
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
*NOTE: [********]
c) Performance of the following End Product Analysis after Gama
Sterilization:
- ------------------------------------------------------------ ---------------------------------------------------------
TEST SPECIFICATION
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] TBD
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
*NOTE: [********].
3) Providing the following components:
a) Vial: [********]
b) Stopper: [********]
c) Seal: [********]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
d) Standard SP Shippers
4) Raw Materials: SP will furnish and conduct the appropriate inspection,
testing and release of the excipient raw material. For the purpose of
this quote the excipients were quoted as:
(a) [********]
(b) [********]
5) Preparing the Master Batch Record and associated records following the
information provided.
6) Manufacturing the product according to the approved master batch record
as follows:
a) Compound the [********].
b) Prepare and sterilize [********].
c) Fill the [********].
d) [********].
e) [********].
f) [********].
g) [********].
h) [********].
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
APPENDIX C
"SCOPE OF WORK"
DRUG ABUSE SCIENCES [********]
PRODUCT MANUFACTURE AND TESTING RESPONSIBILITIES AND
REQUIREMENTS
1) These budgetary quotes are based upon SP performing the following:
a) Performance of the following Receiving Tests:
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
TEST SPECIFICATION
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
b) Performance of the following In Process Tests:
- ------------------------------------------------------------ ---------------------------------------------------------
TEST SPECIFICATION
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
*NOTE: Relative Viscosity is not included in pricing due to unknown method.
c) Performance of the following End Product Analysis:
- ------------------------------------------------------------ ---------------------------------------------------------
TEST SPECIFICATION
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] To Be Determined (TBD)
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
*Note: [********].
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
APPENDIX C
"SCOPE OF WORK"
DRUG ABUSE SCIENCES [********]
d) Performance of the following product specific validations:
- ------------------------------------------------------------ ---------------------------------------------------------
TEST SPECIFICATION
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
[********] [********]
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
2) Providing the following components:
a) Vial: [********]
b) Stopper: [********]
c) Seal: [********].
d) [********]
3) Raw Materials: [********]:
(a) [********]
(b) [********]
(c) [********]
(d) [********]
4) Gases and Water for Injection (WFI): [********].
5) Preparing the Master Batch Record and associated records following the
information provided.
6) Manufacturing the product according to the approved master batch record
as follows:
a) [********]
b) [********]
c) [********]
d) [********]
e) [********]
f) [********]
g) [********]
h) [********]
i) [********]
j) [********]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT 10.10
RESEARCH AGREEMENT
(WITH OPTION TO LICENSE)
BETWEEN
SOUTHERN RESEARCH INSTITUTE
AND
DRUG ABUSE SCIENCES, INC.
DATE: FEBRUARY 13, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
BACKGROUND..............................................................................................1
DEFINITIONS.............................................................................................1
THE PROJECT.............................................................................................2
TERM....................................................................................................2
CHARGES AND INVOICING...................................................................................3
MATERIALS...............................................................................................4
DELIVERABLES............................................................................................4
OWNERSHIP OF INVENTIONS AND DISCOVERIES.................................................................5
PATENT MATTERS..........................................................................................6
PRODUCT COMMERCIALIZATION...............................................................................6
PUBLICITY...............................................................................................7
CONFIDENTIALITY.........................................................................................7
LIMITATION OF LIABILITY.................................................................................8
INDEMNIFICATION.........................................................................................8
MISCELLANEOUS...........................................................................................9
Assignment...........................................................................................9
Entire Agreement.....................................................................................9
Parties Independent..................................................................................9
Waivers; Amendments.................................................................................10
Further Assurances..................................................................................10
Notice..............................................................................................10
Applicable Law; Divisibility........................................................................11
Headings............................................................................................11
Translations........................................................................................11
Force Majeure.......................................................................................11
Agreement Under Seal................................................................................11
Counterparts........................................................................................11
EXHIBIT A - PRODUCT DESCRIPTION
EXHIBIT B - PATENTS AND PATENT APPLICATIONS
EXHIBIT C - PROPOSAL
EXHIBIT D - PROJECT SCHEDULE
EXHIBIT E - OPTION AGREEMENT OR LETTER OF AUTHORIZATION
</TABLE>
i
<PAGE>
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
RESEARCH AGREEMENT
(WITH OPTION TO LICENSE)
THIS AGREEMENT ("RESEARCH AGREEMENT") is made and entered into on February 28,
1997, by and between SOUTHERN RESEARCH INSTITUTE, having an address at 2000
Ninth Avenue South, Birmingham, Alabama, 35205, United States of America
(hereinafter "SOUTHERN"), and DRUG ABUSE SCIENCES, INC., having an address at
1420 Southdown Road, Hillsborough, California, 94010, and Affiliates
(hereinafter referred to collectively as "DAS", where Affiliates are defined
below).
BACKGROUND
SOUTHERN is a not-for-profit corporation organized and operated for scientific
purposes and is engaged in conducting scientific research in the public
interest; and
DAS desires that SOUTHERN conduct the research described in this RESEARCH
AGREEMENT and SOUTHERN's Proposal P96.417 (hereinafter the "Proposal"). A copy
of the Proposal can be found in Exhibit C.
THEREFORE, in consideration of the premises and mutual promises and covenants
herein contained, SOUTHERN and DAS agree as follows:
DEFINITIONS:
TECHNOLOGY - Means any and all technical information,
formulations, processes, know-how, data, specifications,
characterization methods, characterization results, and other
proprietary information, whether or not patented or
patentable, owned or used by SOUTHERN and relating to the
process for imparting controlled release or other
performance-enhancing qualities to products, including but not
limited to the patents (issued, pending, or subsequently filed
and including all divisionals, continuations,
continuations-in-part or other related United States and
foreign applications) listed in Exhibit B to which may be
added additional patents or patent applications resulting from
developments under this RESEARCH AGREEMENT.
PRODUCT TECHNOLOGY - Means any part of the Technology, as
defined above, specifically utilized in work on this project
and to produce DAS' ultimate product(s), compound(s), or
formulation(s), listed in Exhibit A, which Exhibit A may be
amended from time to time based on developments under this
RESEARCH AGREEMENT.
AFFILIATE - Any entity or organization that controls, is
controlled by or is under common control with a party. For
this purpose,
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1
<PAGE>
"control" shall mean the ownership (whether directly or
indirectly) of forty-nine percent (49%) or more of the voting
stock or other equity interest or the ability (whether
directly or indirectly) to determine the policy or actions of
any entity on account of contract or other relationships.
NALTREXONE-Naltrexone, its physiologically active salts,
derivatives, precursors or other chemical form of naltrexone which provides the
physiological activity of naltrexone.
THE PROJECT
1. (a) DAS hereby establishes a research project with SOUTHERN
(hereinafter the "Project"), the purpose of which is to develop the product(s)
listed in Exhibit A (hereinafter the "PRODUCT").
(b) During the term of this RESEARCH AGREEMENT, SOUTHERN will
undertake the Project described in Paragraph l(a) exclusively for DAS [* * *].
(c) SOUTHERN grants to DAS an exclusive option to license the
PRODUCT developed during the term of this RESEARCH AGREEMENT (hereinafter said
term shall be referred to as the "Option Period"). The purpose of such option
to license is for DAS to evaluate its interest in commercializing the PRODUCT.
The payment for such option to license shall be in the amount and shall occur
pursuant to Paragraph 3(a) herein. DAS' rights under this option to license are
described in Paragraph 8 herein.
(d) Nothing contained herein shall be interpreted to preclude
SOUTHERN at any time from undertaking efforts similar to those performed under
this RESEARCH AGREEMENT for third parties or for internal utilization, provided
that such efforts do not involve the PRODUCT or a product which is directly
competitive with PRODUCT for a period of three (3) years from the completion of
the Project and thereafter, so long as DAS is in clinical studies with the
PRODUCT or is paying royalties to SOUTHERN under a license agreement for
PRODUCT. By "directly competitive with PRODUCT" is intended a slow release
depot product dispensing a compound which can serve at least in part as an
opioid antagonist and can serve as a competitive substitute in the marketplace
for PRODUCT.
TERM
2. (a) This RESEARCH AGREEMENT and the Option Period shall become
effective on the date written above and shall terminate the earlier of three
years (3 years) thereafter or upon completion of the services which DAS may
require for entering and performing clinical studies toward the
commercialization of PRODUCT, except as otherwise provided herein. It is the
intent of the parties that a PRODUCT acceptable to DAS shall be delivered to
DAS not later than [* * *] from the initiation of the development set forth in
the Proposal.
(b) Paragraphs 5, 6, 7, 8, 9, 10, 11, and 12 shall survive the
termination of this RESEARCH AGREEMENT.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2
<PAGE>
(c) DAS can terminate this RESEARCH AGREEMENT, which will also
terminate the option to license, by giving SOUTHERN a written notice stating
the desired termination date. This notice shall be given at least [* * *] in
advance of the desired termination date. DAS shall pay to SOUTHERN in full for
all of SOUTHERN's activities occurring under this RESEARCH AGREEMENT through
the date of termination. In the event that DAS terminates this RESEARCH
AGREEMENT prior to delivery of PRODUCT, SOUTHERN agrees to negotiate with DAS
reasonable compensation for DAS' payments prior to such termination in the
event that SOUTHERN enters into a subsequent research agreement for naltrexone
microspheres and employs Product Technology developed under this RESEARCH
AGREEMENT. Such compensation shall take into consideration the fact of DAS'
termination, the total amount paid by DAS, the extent to which the Product
Technology will be used, the savings in performing such future research which
SOUTHERN will enjoy, the period of time elapsing between the termination by DAS
and the entering into such subsequent research agreement, and such other
considerations which are relevant to the determination of compensation.
(d) The term of this RESEARCH AGREEMENT and the Option Period can
be extended subject to mutual agreement in writing between DAS and SOUTHERN.
CHARGES AND INVOICING
3. (a) Upon signing of this RESEARCH AGREEMENT, DAS shall immediately
pay SOUTHERN [* * *] for the option to license described in Paragraph l(c)
herein, which option shall remain in effect for a period of one (1) year.
Thereafter, the option may be extended for a second year by a payment of [* * *]
and for a third year by a payment of [* * *].
(b) DAS' liability for the payment of charges in carrying out the
Project shall not exceed [* * *] without the written consent of DAS. Promptly
after execution of this Agreement and in not more than fifteen (15) days, DAS
shall give to SOUTHERN [* * *] as a prepayment to be maintained as a credit
against future payments until the remaining amount of payment is [* * *] or
less. Notwithstanding the above, if SOUTHERN fails to provide a product
fulfilling the specifications set forth in the Proposal, then DAS shall have a
free option for three (3) years from the date of initiation of the Project.
(c) DAS shall pay to SOUTHERN the sum of the charges incurred
during each month within 30 days of the invoice date.
(d) SOUTHERN reserves the right to terminate this RESEARCH
AGREEMENT and the option to license, if DAS fails to pay any invoice [* * *]
from the invoice date.
(e) Upon receipt of DAS' written notice to terminate this RESEARCH
AGREEMENT, SOUTHERN will promptly discontinue work on the Project and will
invoice DAS for the sum of any uninvoiced charges incurred prior to DAS'
requested termination date. DAS shall pay to SOUTHERN the sum of the charges
listed on this invoice before termination of this RESEARCH AGREEMENT.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3
<PAGE>
MATERIALS
4. (a) With respect to the Project, SOUTHERN shall provide the
services of such personnel, laboratory facilities, equipment, chemicals, and
other supplies to conduct its activities under this RESEARCH AGREEMENT.
SOUTHERN shall provide as Exhibit D the names of the senior personnel who will
be working on the Project, the anticipated period of time such personnel will
be working on the Project, the anticipated proportion of their time during that
period to be spent on the Project, and a brief resume of each of the senior
personnel. In addition to the milestones set forth in the Proposal, the status
of the Project at six (6) months from the initiation of the Project shall be
treated as a milestone. At the time of each of the milestones, the parties
shall meet and assess the progress of the Project. The information set forth in
Exhibit D shall not be binding on SOUTHERN, but SOUTHERN will notify DAS of any
significant change in personnel or charges.
(b) DAS agrees to supply to SOUTHERN, at no charge to SOUTHERN,
such necessary quantities of naltrexone ("Material") for the Project at such
times as SOUTHERN may reasonably request in order to complete the Project.
SOUTHERN shall give DAS reasonable notice of any need for the Material, so as
to allow DAS to obtain reasonable delivery of the Material without delaying the
Project.
DELIVERABLES
5. (a) SOUTHERN will furnish DAS timely progress reports on a monthly
basis summarizing the results of the Project and technical reports on
completion of a specific task or activity. These progress reports shall contain
technical information generated on the Project, except the details of the
process to make the PRODUCT.
(b) SOUTHERN will provide research samples of the PRODUCT
("Research Samples") to DAS for evaluation as they become available. With the
Research Samples, SOUTHERN will provide DAS with sufficient information to
evaluate the Research Samples, but SOUTHERN will not disclose to DAS technical
details of the process to make the Research Samples. The Research Samples shall
be used by DAS for research purposes only and DAS shall not distribute the
Research Samples to a third party without permission of SOUTHERN, except that
DAS may without permission give the Research Samples to laboratories for
testing and evaluation, which laboratories shall agree not to analyze the
samples for their composition. Information generated by DAS from use of
Research Samples will be shared in confidence with SOUTHERN and will not be
published, presented publicly, such as at scientific meetings, or patented by
either DAS or SOUTHERN without prior written agreement of the parties, except
that DAS may file a patent application and foreign analogs thereof solely to
cover the Product provided DAS and SOUTHERN shall cooperate with DAS in the
filing of such patent application and foreign analogs. No product based upon
said Research Samples or SOUTHERN's proprietary or confidential technical
information shall be commercialized without license from SOUTHERN unless
provided DAS by a third party who has developed such product independently of
SOUTHERN prior to the conclusion of the Project. DAS will promptly notify
SOUTHERN in the event that DAS receives an offer from a third party to supply
such product and provide reasonable evidence of its independent development.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4
<PAGE>
(c) It is understood and agreed that said Research Samples cannot
be used in humans.
(d) Should any phase of this Project involve the supply of clinical
samples of the PRODUCT ("Clinical Samples") by SOUTHERN for use in humans, DAS
hereby represents and warrants to SOUTHERN that all human clinical protocols
involving the use of any Clinical Samples to be provided under this and/or
subsequent agreements were reviewed by the appropriate Regulatory Agency(ies)
and Institutional Human-Use Review Board(s) for analysis of risk, benefit, and
safety to human subjects and compliance with all applicable procedures, laws,
and regulations. It is agreed that said Clinical Samples shall be prepared
under current Good Manufacturing Practices (cGMP) and supply of such Clinical
Samples to DAS shall occur after SOUTHERN receives from DAS written
verification that appropriate Regulatory Agency(ies) and Institutional
Human-Use Review Board(s) approvals are in place.
(e) Prior to preparing any Clinical Samples, SOUTHERN reserves the
right to reassess its potential liability arising from such use and to
renegotiate the indemnity provisions of this RESEARCH AGREEMENT. SOUTHERN shall
provide DAS with the basis for its request for renegotiation and substantiate
the reasons for the change in indemnity provisions.
OWNERSHIP OF INVENTIONS AND DISCOVERIES
6. (a) SOUTHERN represents that each of its employees has entered into
an employment agreement that provides for assignment to SOUTHERN of all
inventions made by such employee during the course of his employment with
SOUTHERN.
(b) DAS shall have title to any and all discoveries relating to
preparations and/or formulations and/or methods of use of the formulations
(collectively, the "Composition/Method Invention") in connection with this
Project, solely made or obtained during the term of this RESEARCH AGREEMENT by
personnel of DAS engaged in work on the Project. SOUTHERN shall have title to
any Composition/Method Invention in connection with this Project solely made or
obtained during the term of this RESEARCH AGREEMENT by personnel of SOUTHERN
engaged in the work on the Project. DAS and SOUTHERN shall have title to any
Composition/Method Invention in connection with this Project jointly made or
obtained during the term of this RESEARCH AGREEMENT by personnel of SOUTHERN
and employees of DAS engaged in work on the Project. Such Composition/Method
Invention, whether patentable or not, shall promptly be made known to DAS in
writing. Whether or not a Composition/Method Invention patent issues as a
result of the research herein, SOUTHERN shall grant to DAS the right to use the
Composition/Method Invention only for the PRODUCT contingent upon the signing
of a license agreement ("LICENSE AGREEMENT") by the parties. If a jointly owned
patent issues, DAS shall assign its rights to non-PRODUCTS to SOUTHERN, while
retaining a non-exclusive non-transferable royalty-free license.
(c) SOUTHERN shall have title to any and all discoveries relating
to chemical and/or fabrication processes (collectively, the "Process
Invention") arising from research investigations under this Project, made or
obtained during the term of this RESEARCH AGREEMENT by personnel of SOUTHERN
engaged in the work on the Project. SOUTHERN shall grant to DAS the right to
use such Process Invention on which letters patent issue to
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5
<PAGE>
manufacture only the PRODUCT contingent upon the signing of the LICENSE
AGREEMENT by the parties.
(d) SOUTHERN shall grant to DAS the right to use SOUTHERN's
existing inventions listed in Exhibit B. DAS can use such existing inventions
to manufacture only the PRODUCT in accordance with the LICENSE AGREEMENT.
PATENT MATTERS
7. (a) Any expense for the drafting, filing, assignment, recording of
assignment, prosecution, annuities, and maintenance of United States or foreign
patent applications and patents for Composition/Method Inventions arising from
research investigations of this Project shall be borne by DAS during the Option
Period and during the period that such patent applications and patents are
exclusively licensed to DAS for Product. SOUTHERN shall be responsible for all
patent prosecution for Composition/Method Inventions and all decisions thereto,
except that under any LICENSE AGREEMENT, DAS shall assume all costs and have
control of all Composition/Method of Use patents covering Product.
(b) Any expense for the drafting, filing, assignment, recording of
assignment, prosecution, annuities, and maintenance of United States or foreign
patent applications and patents for Process Inventions arising from research
investigation of this Project shall be borne by SOUTHERN. SOUTHERN shall be
responsible for all patent prosecution for Process Inventions and all decisions
thereto.
(c) Both SOUTHERN and DAS shall have the opportunity for a timely
textual review of patent filing and prosecution matters related to
Composition/Method Invention applications that result from research
investigations of this Project.
PRODUCT COMMERCIALIZATION
8. (a) At any time during the Option Period, DAS upon written notice
to SOUTHERN, may begin negotiating towards entering into a LICENSE AGREEMENT
for the PRODUCT.
(b) No product based upon the Technology, derivatives thereof, or
their use shall be commercialized by DAS or any third party without license
from SOUTHERN, except as provided for in Article 5 para. (b).
(c) Southern BioSystems, Inc. and DAS shall negotiate prior to
entering Phase II clinical studies for Southern BioSystems, Inc. to manufacture
the PRODUCT for commercial sale. Therefore, at any time prior to completion of
Phase I human clinical studies, the parties will use reasonable efforts to
negotiate and enter into a definitive supply agreement under which Southern
BioSystems, Inc., will manufacture the PRODUCT for DAS. If DAS and Southern
BioSystems, Inc., do not enter into a supply agreement or if DAS desires to
establish a second manufacturing source for the PRODUCT, DAS may identify a
third-party contract manufacturer capable of supplying DAS' PRODUCT
requirements. If DAS executes a supply agreement with a third party, SOUTHERN
will at DAS' expense assist DAS and such third party in utilizing the Project
Technology to manufacture the PRODUCT. Such third party shall be
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6
<PAGE>
subject to SOUTHERN's reasonable approval and shall agree in writing to be
bound by the confidentiality and other relevant provisions of this RESEARCH
AGREEMENT.
PUBLICITY
9. No publication, advertising, or publicity matter having any
reference to either DAS or SOUTHERN, expressed or implied, shall be made use of
by either party or anyone on behalf of either party, unless and until such
matter shall have first been mutually agreed upon in writing.
CONFIDENTIALITY
10. (a) DAS and SOUTHERN agree that they will exert diligent efforts to
ensure their employees, agents, and consultants will not disclose or publish
any proprietary information, confidential technical information, or
confidential business information (collectively hereinafter referred to as
"Information") transmitted to one another for use in the performance of this
Project or new information developed by DAS or SOUTHERN in connection with this
Project. The confidentiality obligations herein shall not apply to:
i. information, that at the time of disclosure, is in
the public domain; or
ii. information, that after disclosure, becomes available
to the public or is lawfully made available to DAS or
SOUTHERN by a third party without restrictions as to
disclosure; or
iii. information that DAS or SOUTHERN can establish by
reasonable proof was in their possession at the time
of disclosure, or was subsequently and independently
developed by employees of DAS or SOUTHERN who had no
knowledge of the information disclosed; or
iv. information deemed necessary and appropriate by DAS
or SOUTHERN to perfect patent rights pursuant to
Paragraphs 6 and 7; or
v. information that DAS and SOUTHERN mutually agree in
writing to release from the terms of this RESEARCH
AGREEMENT; or
vi. information required to be disclosed by order of a
court, other governmental body, or other government
regulatory agency in the furtherance of the purposes
of the Project, after consultation with the party who
owns the Information.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7
<PAGE>
(b) DAS' and SOUTHERN's obligation not to disclose or publish shall
continue for a period of ten (10) years from the date of this RESEARCH
AGREEMENT, at the end of such period the obligation will terminate.
(c) DAS and SOUTHERN may, in their sole discretion, disclose
necessary or appropriate Information to representatives of one or more of its
subsidiaries (whether directly or indirectly owned) in order for DAS or SOUTHERN
to perform its obligation under this RESEARCH AGREEMENT, provided, however, that
such subsidiary and such representatives shall be bound by the terms and
conditions of this Paragraph 10 that are applicable to DAS and SOUTHERN. Such
obligation not to disclose or publish shall continue in effect for any former
such subsidiary and such representatives of DAS or SOUTHERN.
(d) DAS and SOUTHERN agree that the Information disclosed will not
be used to provoke an interference with any patent application that the other
party or its employees have filed with respect to Information, and will not be
used to amend any claim in any pending patent application to expand the claim to
read on, cover or dominate any invention (whether or not patentable) disclosed
as Information.
LIMITATION OF LIABILITY
11. Under this RESEARCH AGREEMENT, SOUTHERN is to perform certain
research and other work incidental thereto, and is to provide certain
counseling, advice, conclusions, and/or recommendations. SOUTHERN will use its
professional experience and diligent professional efforts in performing this
work. However, SOUTHERN does not represent, warrant, or guarantee that its
research results or any products produced therefrom are merchantable or
satisfactory for any particular purpose, and there are no warranties, express
or implied, to such effect. DAS hereby agrees to release, waive, and forever
discharge any demands, claims, suits, or actions of any character against
SOUTHERN arising out of or in connection with DAS' acceptance, reliance on, or
use of such results in the absence of any negligent or willful act or omission
by SOUTHERN in the fulfillment of its activities under this RESEARCH AGREEMENT.
In connection with the work performed hereunder, SOUTHERN shall in no event be
responsible or liable in contract or in tort for any special, indirect,
incidental, or consequential damages such as, but not limited to, loss of
product, profits or revenues, damage or loss from operation or nonoperation of
plant, or claims of customers of DAS.
INDEMNIFICATION
12. DAS hereby agrees to indemnify, hold harmless, and defend SOUTHERN
and its officers, directors, representatives, agents, and employees from and
against any and all demands, claims, suits, or actions of any character
presented or brought on account of any injuries, losses, or damages sustained
by any person or property in consequence of any act or omission of DAS or its
agents, employees, or subcontractors, except for any injuries, losses, or
damages that specifically result from the negligence or willful misconduct of
SOUTHERN, in the performance of the Project and obligations herein and [* * *].
The foregoing indemnity shall include but not be limited to court costs,
attorneys' fees, costs of investigation, costs of defense associated with such
demands, claims, suits, or actions.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8
<PAGE>
During the time that any product, process, service relating to, or
developed pursuant to this RESEARCH AGREEMENT is introduced into human trials
or is being commercially distributed or sold by DAS or by a licensee,
affiliate or agent of DAS, DAS shall make a good faith effort, at no cost to
SOUTHERN, to procure and maintain [* * *] insurance in reasonable amount in
relation to the nature of the PRODUCT being sold, to the extent that such
insurance is available to DAS at a cost reasonably related to the anticipated
risks and commensurate with DAS's reasonable assessment of the risk and its
ability to respond in damages. Any such [* * *] insurance shall provide (i)
[* * *] and (ii) [* * *]. The amounts provided for by such insurance shall
not be construed to create a [* * *] under this RESEARCH AGREEMENT.
DAS shall provide SOUTHERN with written evidence of such
insurance or evidence of DAS' attempts to obtain such insurance upon written
request of SOUTHERN and shall give SOUTHERN at least [* * *] notice prior to
cancellation, non-renewal or material change relating to insurance of which DAS
has previously notified SOUTHERN. SOUTHERN agrees that in the event that DAS is
unable to obtain such insurance after a good faith effort on commercially
reasonable rates in accordance with the anticipated risks and DAS' ability to
pay, SOUTHERN will intercede with its insurance carrier to request a waiver or
modification of any requirement for such insurance or to obtain assistance for
DAS to obtain such insurance.
MISCELLANEOUS
13. (a) ASSIGNMENT. This RESEARCH AGREEMENT and the benefits and
obligations hereunder may not be assigned by a party without the prior written
consent of the other party, except
i. to an Affiliate, or
ii. in connection with a merger or consolidation of the
party in which such party is not the surviving
entity, or a sale of all or substantially all of the
assets of the party provided that the successor or
purchaser agrees to assume all of the obligations of
the party hereunder.
In the event of an assignment under Subsection (ii) of this Paragraph 13(a), the
assigning party shall notify the other party in writing of such assignment at
least thirty (30) days in advance of its occurrence.
(b) ENTIRE AGREEMENT. This RESEARCH AGREEMENT and SOUTHERN's
Proposal set forth and constitute the entire agreement between the parties
hereto with respect to the subject matter hereof, and supersedes any and all
prior agreements, requests for quotation, quotations, purchase orders,
letters of intent and understandings between the parties, and any and all
promises, statements, and representations made by either party to the other
concerning the subject matter hereof and the terms applicable hereto.
(c) PARTIES INDEPENDENT. In making and performing this RESEARCH
AGREEMENT, the parties are acting and shall act at all times as independent
contractors and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
9
<PAGE>
nothing contained in this RESEARCH AGREEMENT shall be construed or implied to
create an agency, partnership, or joint venture relationship between the
parties.
(d) WAIVERS; AMENDMENTS.
i. The failure of either party to insist upon the performance of
any of the terms of this RESEARCH AGREEMENT or to exercise
any right hereunder or at law or in equity, or any delay by
either party in the exercise of any such right, shall not be
construed as a waiver or relinquishment of any such
performance or right or of the future performance of any such
term or the future exercise of such right, and any effective
waiver or relinquishment of any such right must be in writing
and signed by a duly authorized officer of the party waiving
or relinquishing the right or rights. No waiver or
relinquishment of any right granted by either party to the
other shall be deemed to be a continuing waiver of such right
in the future unless otherwise provided in the waiver.
ii. This RESEARCH AGREEMENT may not be released, discharged,
amended, or modified in any manner except by an instrument in
writing that references this RESEARCH AGREEMENT and is signed
by a duly authorized officer of each party.
(e) FURTHER ASSURANCES. Each of the parties shall execute and
deliver to, or cause to be executed and delivered to, the other party, such
further instruments, or take such other action as may reasonably be requested
of it to consummate more effectively the transactions contemplated hereby.
(f) NOTICE. Any notice or other written communication required or
permitted to be made or given hereunder may be made or given by either party
to the other party by fax communication to the fax number set forth below and
such notice shall be followed up by depositing the same in the mail,
certified delivery, return receipt requested, postage prepaid, and addressed
to the mailing address set forth below:
DAS: Dr. Bertram I. Rowland
President and C.E.O.
DrugAbuse Sciences, Inc.
1420 Southdown Road
Hillsborough, CA 94010
FAX: 415-548-9258
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
10
<PAGE>
SOUTHERN: Dr. Thomas R. Tice
Director, Pharmaceutical
Formulations Department
Southern Research Institute
2000 Ninth Avenue South
Birmingham, Alabama 35205
FAX: 205-581-2888
(g) APPLICABLE LAW; DIVISIBILITY. This RESEARCH AGREEMENT is to be
governed by and construed in accordance with the laws of the State of
Alabama, United States of America. If, however, any provision hereof in any
way contravenes the laws of any state or jurisdiction where this RESEARCH
AGREEMENT is to be performed, such provision shall be deemed to be deleted
therefrom, and if any term of this RESEARCH AGREEMENT shall be declared by a
final adjudication to be illegal or contrary to public policy, it shall not
affect the validity of any other terms or provisions of this RESEARCH
AGREEMENT.
(h) HEADINGS. Descriptive headings used herein are for convenience
only and shall not affect the meaning or construction of any provision hereof.
(i) TRANSLATIONS. In the event of an inconsistency between any terms
of this RESEARCH AGREEMENT and any translations thereof into another
language, the English language meaning shall control.
(j) FORCE MAJEURE. The untimely performance of any obligation
arising hereunder by either party will be excused, and such delay of
performance shall not constitute a breach or grounds for termination or
prejudice of any rights hereunder, provided that (a) the delay of performance
is a result of circumstances or occurrences beyond the reasonable control of
the party whose performance is excused hereunder (the "Delaying Event"), and
(b) such party shall (i) immediately resume performance after the Delaying
Event is removed and (ii) be reasonably diligent during such Delaying Event
in avoiding further delay. Without limiting the generality of circumstances
or occurrences that shall constitute a Delaying Event, examples of Delaying
Events include, but are not limited to, strikes, shortages of power or other
utility services, materials or transportation, acts of government or of God,
sabotage, insurrection and civil war. A party whose performance may be
affected by a Delaying Event promptly shall give notice to the other party of
such Delaying Event and the fact that it intends to rely upon such Delaying
Event to excuse its performance under this RESEARCH AGREEMENT.
(k) AGREEMENT UNDER SEAL. This RESEARCH AGREEMENT is intended to be
under the seal of all parties hereto and to have the effect of a sealed
instrument in accordance with the law.
(l) COUNTERPARTS. This RESEARCH AGREEMENT may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this RESEARCH
AGREEMENT to be duly executed, on the date written above.
SOUTHERN RESEARCH INSTITUTE DRUG ABUSE SCIENCES, INC.
By: /s/ G.E. Dwyer By: /s/ Bertram Rowland
------------------------------- -------------------------------
Name: G.E. Dwyer Name: Bertram Rowland
------------------------------ ------------------------------
Title: Chief Executive Officer Title: President
----------------------------- -----------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
12
<PAGE>
EXHIBIT A
PRODUCT DESCRIPTION
[* * *]
FORMULATION FOR 1-MONTH DELIVERY OF NALTREXONE
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
13
<PAGE>
EXHIBIT B
PATENTS AND PATENT APPLICATIONS
A. COMPOSITION/METHOD INVENTION PATENT APPLICATIONS
U.S. PATENT NUMBER: 4,897,268
TITLE: Drug Delivery System and
Making the Same
AND ANY U.S. CONTINUATION(S), CONTINUATION(S) IN PART, OR DIVISIONALS
AND ANY FOREIGN COUNTERPART OF THE ABOVE.
B. PROCESS INVENTION PATENT APPLICATIONS
U.S. PATENT NUMBER: 5,407,609
TITLE: Improved Encapsulation Process
and Products Therefrom
AND ANY U.S. CONTINUATION(S), CONTINUATION(S) IN PART, OR DIVISIONALS
AND ANY FOREIGN COUNTERPART OF THE ABOVE.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
14
<PAGE>
EXHIBIT C
PROPOSAL P96.417
Development of an [* * *]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
15
<PAGE>
PROPOSED LICENSE TERMS
GRANT
The grant shall be a world-wide royalty bearing license under patents,
technology, and knowhow to practice PRODUCT.
ROYALTY
The royalty shall be in the range of [* * *] of the net sales price,
based on the uniqueness of the PRODUCT, the scope of patent protection, the
payment of other royalties, the size of the market, the extent of anticipated
competition, the competitiveness of the competitive products, the potential
for return on investment for DAS, and such other considerations which are
normally pertinent in the determination of royalty. A reasonable [* * *]
royalty will be included, based on the base royalty, which [* * *] is to
[* * *] from the [* * *].
TERMINATION
The license shall be terminable at will by DAS, shall automatically
terminate in each jurisdiction in which a licensed patent exists at the
termination of the enforceability of the patent, and shall terminate in all
other jurisdictions 8 years from the first commercial sale, at which time DAS
will have a paid up license in such jurisdiction. Termination shall not
affect those terms which are intended to survive the termination of the
Agreement. SOUTHERN may only terminate for material breach.
OTHER TERMS
The agreement shall include Alabama as the choice of law, an arbitration
clause, usual reporting and payment of royalty schedule, diligence
requirement, indemnification, and such other terms which are common to a
license.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
16
<PAGE>
EXHIBIT 10.11
PRODUCT LICENSE AGREEMENT
Between
SOUTHERN RESEARCH INSTITUTE
2000 Ninth Avenue South
Birmingham, Alabama 35205
and
DRUG ABUSE SCIENCES, INC.
1430 O'Brien Drive, Suite E
Menlo Park, California 94025
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Definitions...........................................................................................1
Section 2. License Grants........................................................................................4
Section 3. Running Royalties.....................................................................................5
Section 4. Due Diligence in Commercialization....................................................................6
Section 5. Product Development and Marketing.....................................................................6
Section 6. Naltrexone Patent Protection..........................................................................6
Section 7. Enforcement of the Naltrexone Patent..................................................................7
Section 8. Infringement of Third Party Rights....................................................................7
Section 9. Representations and Warranties of Southern............................................................8
Section 10. Negation of Warranties by Southern...................................................................9
Section 11. Representations and Warranties of DAS................................................................9
Section 12. Limitation of Liability..............................................................................9
Section 13. Indemnity...........................................................................................10
Section 14. Confidentiality.....................................................................................10
Section 15. Termination.........................................................................................11
Section 16. General Provisions..................................................................................12
Exhibit A
</TABLE>
i
<PAGE>
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
PRODUCT LICENSE AGREEMENT
THIS PRODUCT LICENSE AGREEMENT (the "Agreement") is hereby made and
entered into as of the first day of July, 1999 by and between SOUTHERN RESEARCH
INSTITUTE, an Alabama non-profit corporation, having an office at 2000 Ninth
Avenue South, Birmingham, Alabama 35205 ("Southern") and DRUG ABUSE SCIENCES,
INC., a California corporation, having an office at 1430 O'Brien Drive, Suite
E, Menlo Park, California 94025 ("DAS").
RECITALS
WHEREAS, DAS is engaged in the business of discovering, developing,
licensing, manufacturing, marketing and selling pharmaceutical products and all
related activities; and
WHEREAS, in the course of such business, Southern and DAS have
entered into a research agreement dated February 28, 1997, as amended (the
"Research Agreement"), directed toward the development and evaluation of an
[* * *] for use in the treatment of heroin addicts and alcoholics; and
WHEREAS, Section l(c) of the Research Agreement grants to DAS an
option (the "Option") to acquire from Southern an exclusive license to such
naltrexone formulation upon reasonable terms and conditions; and
WHEREAS, DAS desires to exercise such Option and to acquire a license
to such naltrexone formulation; and
WHEREAS, Southern desires to grant to DAS the desired license, subject
to the terms and conditions of this Agreement; and
WHEREAS, Southern and DAS desire to set forth in writing the terms and
conditions under which DAS will acquire from Southern the desired license to
the naltrexone formulation.
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth above and
the covenants and promises hereinafter set out, DAS and Southern, intending to
be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS.
SECTION 1.1 "AFFILIATES" - means any corporation, company,
partnership, joint venture or other business entity which controls, is
controlled by, or is under common control with DAS. For purposes of this
Section 1.1, "control" means: (a) in the case of a corporation, the direct or
indirect ownership of at least forty percent (40%) of the stock or
participating shares entitled to vote for the election of directors, or (b) in
all other cases, the direct or indirect ownership of at least a forty percent
(40%) profits interest in the business entity.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1
<PAGE>
SECTION 1.2 "AGREEMENT" means this Product License Agreement entered
into by and between DAS and Southern as of July 1, 1999.
SECTION 1.3 "AVERAGE ANNUAL RUNNING ROYALTY PAYMENT" means an amount
equal to [* * *] percent ([* * *]) of the average of the annual Running
Royalties paid by DAS to Southern in the first three (3) years after the first
commercial sale of Controlled Release Naltrexone in the United States.
SECTION 1.4 "BASE ROYALTY PAYMENT" means, for each year during the Term
of this Agreement, the following amount:
<TABLE>
<CAPTION>
Base Royalty
Applicable Year Payment Due
--------------- ------------
<S> <C>
From the Effective Date until
the [* * *] [* * *]
For each year thereafter [* * *] Payment
</TABLE>
SECTION 1.5 "CONFIDENTIAL INFORMATION" means any proprietary
information, research project, processes, work in process, future development,
scientific, engineering, manufacturing, marketing, business plan, financial or
personnel matter relating to either DAS or Southern, DAS' present or future
products, sales, supplies, customers, employees, investors or business
including DAS' plans to commercialize Controlled Release Naltrexone and any
other information or biological or chemical materials relating to Controlled
Release Naltrexone, whether in oral, written, graphic or electronic form.
SECTION 1.6 "CONTROLLED RELEASE NALTREXONE" means [********]
SECTION 1.7 "EFFECTIVE DATE" means July 1, 1999.
SECTION 1.8 "FORCE MAJEURE" means with respect to a party, any event
reasonably beyond the control of such party including, but not limited to wars,
hostilities, revolutions, riots, civil commotion, national emergency, strikes,
lockouts, unavailability of supplies, epidemics, fire, flood, earthquake, force
of nature, explosion, embargo, or any other Act of God, or any law,
proclamation, regulation, ordinance, or other act or order of any court,
government or governmental agency.
SECTION 1.9 "NALTREXONE" means each of [********]
SECTION 1.10 "NALTREXONE PATENT" means United States Patent
Application Serial No. 60/128,477, filed April 9, l999, and the patent or
patents issued therefrom and includes, without limitation, all substitutions,
divisionals, continuations, continuations-in-part and inventors'
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2
<PAGE>
certificates and all foreign counterparts of the foregoing patent or patents
together with all registrations, reissues, reexaminations or extensions of such
patent or patents.
SECTION 1.11 "NET SALES" means the total of all amounts actually
received by DAS or its Affiliates, for sales of Controlled Release Naltrexone
to independent third-parties (including, but not limited to Sublicensees and
distributors) that, except for the licenses granted by Southern to DAS in
Sections 2.1 and 2.1 of this Agreement, would infringe the Naltrexone Patent or
the Southern Patent Rights, less:
(a) returns, allowances, discounts, commissions, and
adjustments;
(b) packing, handling, transportation, and insurance
charges;
(c) sales, use, excise and similar taxes, duties and
similar governmental assessments imposed on the sale of Controlled Release
Naltrexone; and
(d) the amount of any Running Royalties actually paid by
DAS to a third party to acquire rights to a patent which is materially
necessary in DAS' reasonable judgement, consistent with industry practices, to
commercialize, develop or exploit Control Release Naltrexone.
SECTION 1.12 "RUNNING ROYALTY" means, for each year during the term of
this Agreement, the following amount:
<TABLE>
<CAPTION>
Net Sales of Controlled
Release Naltrexone Running Royalty
----------------------- ---------------
<S> <C>
[* * *] [* * *] of Net Sales
[* * *] [* * *] of [* * *]
[* * *]
[* * *] [* * *] plus [* * *] of
Net Sales [* * *]
</TABLE>
SECTION 1.13 "SOUTHERN KNOW-HOW" means any and all inventions (whether
or not patentable), technical information, know-how, processes, procedures,
compositions, devices, methods, techniques, data, information, or physical,
chemical, or biological materials known to or possessed by Southern which are
either covered by the Southern Patents or are reasonably necessary or useful to
enable DAS to commercialize, develop or exploit Controlled Release Naltrexone.
SECTION 1.14 "SOUTHERN PATENT RIGHTS" means the rights described in the
patents listed on EXHIBIT A to this Agreement and includes, without limitation,
all substitutions, divisionals, continuations, continuations-in-part and
inventors' certificates and all foreign counterparts of the foregoing patents
together with all registrations, reissues, reexaminations or extensions of such
patents.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3
<PAGE>
SECTION 1.15 "SUBLICENSEE" shall mean any non-Affiliate third party to
whom DAS has granted the right to sell Controlled Release Naltrexone.
SECTION 1.16 "TERM OF THIS AGREEMENT" means a period beginning on the
Effective Date and ending upon the later of: (1) December 31, 2010, or (2) the
expiration of the last to expire of the Naltrexone Patent(s) or Southern Patent
Rights.
SECTION 1.17 "THIRD ANNIVERSARY DATE" means the date which is three (3)
years from the date of the first commercial sale of Controlled Release
Naltrexone in the United States.
SECTION 2 LICENSE GRANTS.
SECTION 2.1 EXCLUSIVE LICENSE. Subject to the terms and conditions of
this Agreement, Southern hereby grants to DAS an exclusive, worldwide license
under the Naltrexone Patent to develop, create, make, have made, use, distribute
and have distributed, sell and have sold, and otherwise exploit for any
commercial purpose Controlled Release Naltrexone.
SECTION 2.2 NON-EXCLUSIVE LICENSE. Subject to the terms and conditions
of this Agreement including, but not limited to the license granted and
restrictions set forth in Section 2.1, Southern hereby grants to DAS a
non-exclusive, world-wide license to practice the Southern Patent Rights and the
Southern Know-How in conjunction with the commercialization, development or
exploitation of Controlled Release Naltrexone.
SECTION 2.3 RIGHT TO SUBLICENSE. Subject to the terms and conditions
of this Agreement, Southern hereby grants to DAS the right to sublicense the
right to make, have made, use, sell and have sold Controlled Release
Naltrexone. Any such sublicense shall be granted pursuant to the terms and
conditions of this Agreement. The granting of a sublicense under this Agreement
shall not relieve DAS of its responsibilities for performance hereunder. In the
event that DAS grants a sublicense pursuant to the terms of this Agreement, DAS
shall promptly notify Southern of the grant of said sublicense and shall
provide a copy to Southern within thirty (30) days of the date of its
execution, unless DAS obtains Southern's approval to the contrary, which
Southern will not unreasonably withhold.
SECTION 2.4 LICENSE TO SOUTHERN. Subject to the terms and conditions
of this Agreement, DAS (on behalf of itself and its Affiliates) hereby grants
to Southern a non-exclusive, royalty-free license to fully exploit for any
purpose any improvements to the Southern Patent Rights that are conceived and
reduced to practice by DAS or its Affiliates during the term of this Agreement
and upon which DAS or any of its Affiliates files an application for letters
patent, and including any letters patent that issue therefrom. DAS hereby
agrees to promptly notify Southern of any and all such improvements.
Prosecution of all such improvements shall be governed by the provisions of
Section 6 of this Agreement. DAS and its Affiliates grant such license on an
"AS IS" basis, and hereby disclaim all warranties, whether express or implied,
relating to the subject matter of this Section 2.4.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4
<PAGE>
SECTION 3. RUNNING ROYALTIES.
SECTION 3.1 CALCULATION OF AMOUNT. During each year of the Term of
this Agreement, DAS shall pay to Southern an amount equal to the greater of:
(a) the Running Royalty or (b) the Base Royalty Payment.
SECTION 3.2 TIMING OF PAYMENTS. Running Royalties shall be paid on a
[* * *]. DAS shall pay interest on any amounts that are not subject to a good
faith dispute between the parties and are not paid to Southern when due under
this Section 3.2 at the rate of [* * *] as set by AmSouth Bank, Birmingham,
Alabama per annum. DAS shall also pay to Southern all reasonable out-of-pocket
expenses actually incurred by Southern in the course of collecting amounts past
due under this section, including reasonable attorneys' fees, whether or not
any suit was commenced by Southern against DAS.
SECTION 3.3 RUNNING ROYALTY REPORTS. With each quarterly Running
Royalty payment due to Southern under Section 3.1, DAS shall deliver to
Southern a true and accurate report, giving such particulars of the business
conducted by DAS, its Affiliates and Sublicensees, if any, during such calendar
quarter as are pertinent to account for Running Royalties due under Section 3.1
of this Agreement. Such report shall include at least (i) the total of Net
Sales during such quarter, (ii) the calculation of Running Royalties, and (iii)
the total Running Royalties so calculated and due Southern. If no royalties are
due, DAS shall so report. Southern shall not provide to third parties any
information contained in reports provided by DAS under this Section 3.3.
SECTION 3.4 BOOKS AND RECORDS. DAS shall keep and maintain complete
and accurate accounting records containing such information as is reasonably
necessary to enable verification of the Running Royalties accrued and payable
to Southern by DAS under the terms of this Agreement. Upon the written request
of Southern and not more than once in each calendar year, DAS shall permit an
independent, certified public accounting firm of nationally recognized standing
selected by Southern and reasonably acceptable to DAS, at Southern's expense,
to have access during normal business hours to those records of DAS as may be
reasonably necessary to verify the accuracy of the royalty reports hereunder
for any year ending not more than [* * *] of such request. The accounting firm
shall disclose to DAS and Southern the extent of any discrepancies and the
basis for such determination. An adjusting payment shall be made upon
demonstration of any underpayment. Such payment shall be made in accordance
with the provisions of Section 3.2 of this Agreement.
SECTION 3.5 EXPENSE OF AUDITS. The fees and expenses of the accounting
firm associated with Southern's request for an audit pursuant to Section 3.4
shall be borne by Southern; provided, however, that if any audit shall
correctly show that DAS underpaid the Running Royalties due to Southern under
this Agreement for the period being audited by more [* * *] that was payable
for such period, then DAS shall, in addition to paying Southern any such
deficiency, reimburse Southern for the out-of-pocket costs of such audit.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5
<PAGE>
SECTION 4. DUE DILIGENCE IN COMMERCIALIZATION.
4.1 OBLIGATION TO EXPLOIT. DAS shall use commercially
reasonable efforts to bring Control Release Naltrexone to market and to meet
the market demand therefor.
4.2 COMMERCIALIZATION MILESTONE. Southern shall have the
option to terminate this Agreement in the event that DAS is unable to file a
new drug application for a Controlled Release Naltrexone formulation with the
United States Food and Drug Administration by the fifth anniversary of the
Effective Date, unless a Force Majeure occurs during such period, in which case
the period of time to file such application shall be extended for a reasonable
period of time to be mutually agreed upon by the parties.
SECTION 5. PRODUCT DEVELOPMENT AND MARKETING.
SECTION 5.1 CLINICAL TRIALS. DAS shall be responsible for preparation
and prosecution of any regulatory filings required in order to conduct clinical
trials on Controlled Release Naltrexone. DAS shall be the owner of record for
all such regulatory filings.
SECTION 5.2 MARKETING OF CONTROLLED RELEASE NALTREXONE. DAS shall be
responsible for the preparation and prosecution of suitable applications and
submissions for marketing approval of Controlled Release Naltrexone and shall
be the owner and party of record of all such applications and regulatory
filings.
SECTION 5.3 COOPERATION AND ASSISTANCE BY SOUTHERN. Southern will,
subject to payment by DAS of its reasonable expenses, exercise commercially
reasonable efforts to assist DAS in obtaining the regulatory licenses and
approvals referred to in Sections 5.1 and 5.2 of this Agreement, and will
provide and execute all documents DAS may reasonably request for any of the
foregoing purposes. Southern hereby irrevocably designates and appoints DAS and
its duly authorized officers and agents, with full power of substitution, as
Southern's agents and attorneys-in-fact to act for and in Southern's behalf and
instead of Southern, to execute and file any such document and to do all other
lawfully permitted acts to further the purposes of the foregoing with the same
legal force and effect as if executed by Southern.
SECTION 6. NALTREXONE PATENT PROTECTION.
SECTION 6.1 PATENT PROSECUTION. DAS will be responsible for the
filing, prosecution and maintenance of the Naltrexone Patent. Preparation,
filing, prosecution, and maintenance of the Naltrexone Patent shall be solely
at DAS' expense. DAS shall provide Southern with a reasonable period of time to
review patent applications prepared by DAS for the Naltrexone Patent.
SECTION 6.2 TERMINATION OF PROSECUTION. DAS' obligation to underwrite
and pay patent costs pursuant to this Section 6 shall continue for the Term of
this Agreement; provided, however, that DAS may terminate its obligations with
respect to any given patent application or patent upon three (3) months written
notice to Southern. Southern may then continue prosecution and/or maintenance
of such application(s) or patent(s) at its sole discretion and expense. In the
event that Southern decides to continue prosecution and/or maintenance of any
such application or patent, DAS shall have no further rights to any invention
claimed therein.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6
<PAGE>
SECTION 7. ENFORCEMENT OF THE NALTREXONE PATENT
SECTION 7.1 INFRINGEMENT ACTIONS. DAS will have the right to enforce
the Naltrexone Patent against third-party infringement. Any such infringement
action initiated by DAS shall be prosecuted in its own name and at its own
expense. Southern shall cooperate fully with DAS in connection with any such
action. Southern agrees to notify DAS promptly of any infringement of the
Naltrexone Patent of which Southern is or becomes aware.
SECTION 7.2 ASSIGNMENT OF PATENT RIGHTS. If DAS elects to commence an
action pursuant to the authority granted it in Section 7.1 above, Southern shall
have the right, without an obligation by DAS to pay any consideration other than
as expressly required by this Agreement, to assign to DAS all of Southern's
rights, title and interest in the Naltrexone Patent. In the event that Southern
makes such an assignment, such assignment shall be irrevocable and shall allow
DAS to proceed on any such action without Southern as a party. If Southern
assigns the Naltrexone Patent to DAS pursuant to this Section 7.2, such
assignment shall require DAS to continue to meet DAS' obligations under this
Agreement as if the assigned patent were still licensed to DAS. In the event
that the Naltrexone Patent is not assigned to DAS and DAS commences an
infringement action, Southern shall cooperate fully with DAS in connection with
any such action, which may include, at the reasonable discretion of DAS, being
named as a party and participating in such action at DAS' expense.
SECTION 7.3 DISTRIBUTION OF PROCEEDS. Any recoveries or reimbursements
from any infringement action brought by DAS pursuant to Section 7.1 shall first
be applied to reimburse DAS and Southern for all reasonable out-of-pocket
litigation expenses actually incurred by DAS and Southern in the course of
participating in such action. Any funds remaining after reimbursement of DAS and
Southern for such expenses shall be treated as Net Sales of Controlled Release
Naltrexone for purposes of Sections 1.11 and 3.1 of this Agreement.
SECTION 7.4 ALTERNATIVE ENFORCEMENT. In the event that DAS elects in
writing not to exercise its right to prosecute any infringement of the
Naltrexone Patent, Southern may elect to prosecute such infringement at its own
expense, controlling such action and retaining all recoveries therefrom.
SECTION 8. INFRINGEMENT OF THIRD PARTY RIGHTS.
SECTION 8.1 NOTICE. If the development, manufacture, use or sale of
Controlled Release Naltrexone results in a claim of patent infringement or trade
secret misappropriation, the party to this Agreement first having notice shall
promptly notify the other party in writing. The notice shall set forth the facts
of the claim in reasonable detail.
SECTION 8.2 DEFENSE BY DAS. DAS shall defend against any such third
party claim which is based on the development, manufacture, use or sale of
Controlled Release Naltrexone. Southern shall cooperate with DAS in such defense
and shall tender to DAS the authority to control and/or settle such claim, but
Southern shall have the right to be represented by counsel of its own choice and
at its own expense. If DAS is required by a final court order to make a payment
including Running Royalty payments on Net Sales of Controlled Release Naltrexone
by
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7
<PAGE>
DAS to a third party in connection with the disposition of such claim, DAS
shall be responsible for such payments.
SECTION 8.3 DEFENSE BY SOUTHERN. Southern shall defend against any
such third party claim which is based on DAS' use of the Southern Patent
Rights or Southern Know-How to commercialize Control Release Naltrexone. DAS
shall cooperate with Southern in such defense and shall tender to Southern
the authority to control and/or settle such claim, but DAS shall have the
right to be represented by counsel of its own choice and at its own expense.
If Southern is required by a final court order to make a payment including
Running Royalty payments on Net Sales of Controlled Release Naltrexone by DAS
to a third party in connection with the disposition of such claim, Southern
shall be responsible for such payments.
SECTION 9. REPRESENTATIONS AND WARRANTIES OF SOUTHERN. This Agreement is
made with Southern in reliance upon Southern's representations and warranties to
DAS, which by Southern's execution of this Agreement, Southern hereby confirms
as follows:
SECTION 9.1 INTELLECTUAL PROPERTY. Southern:
(i) is the sole owner of all rights, title and interest in the
Naltrexone Patent and the Southern Patent Rights and Southern Know-How;
(ii) has not assigned, transferred, licensed, pledged or otherwise
encumbered the Naltrexone Patent;
(iii) has full power and authority to enter into this Agreement and to
grant the licenses set forth in Section 2 of this Agreement; and
(iv) except as previously disclosed to DAS in writing, is not aware of
any questions or challenges with respect to the validity of any claims of the
Naltrexone Patent and the Southern Patents.
SECTION 9.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Southern, enforceable against Southern in accordance with its
terms. Southern has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and to perform its obligations
under this Agreement.
(b) The execution and delivery of this Agreement will not
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the
organizational documents of Southern, or (B)
any resolution adopted by the board of
directors of Southern; or
(ii) contravene, conflict with, or result in a
violation or breach of any provision of, or
give any person the right to declare a
default or exercise any remedy under, or to
accelerate the maturity or
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8
<PAGE>
performance of, or to cancel, terminate, or
modify, any material agreement to which
Southern is bound.
Southern is not and or will not be required to give any notice to or obtain any
consent from any person in connection with the execution and delivery of this
Agreement.
SECTION 10. NEGATION OF WARRANTIES BY SOUTHERN. Except as specifically set
forth in Section 9 of this Agreement, Southern hereby specifically disclaims all
other warranties, either express or implied, with respect to Controlled Release
Naltrexone, including, without limitation, warranties of merchantability and
fitness for a particular purpose.
SECTION 11. REPRESENTATIONS AND WARRANTIES OF DAS. DAS represents and
warranties to Southern as follows:
SECTION 11.1 ORGANIZATION AND GOOD STANDING.
DAS is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California, with full corporate power
and authority to conduct its business as it is now being conducted, to own or
use the properties and assets that it purports to own or use, and to perform all
its obligations under this Agreement.
SECTION 11.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of DAS, enforceable against DAS in accordance with its terms. DAS has
the absolute and unrestricted right, power, authority, and capacity to execute
and deliver this Agreement and to perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement will not
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the
organizational documents of DAS, or (B) any
resolution adopted by the board of directors
or the stockholders of DAS; or
(ii) contravene, conflict with, or result in a
violation or breach of any provision of, or
give any person the right to declare a
default or exercise any remedy under, or to
accelerate the maturity or performance of,
or to cancel, terminate, or modify, any
material agreement to which DAS is bound.
DAS is not and or will not be required to give any notice to or obtain any
consent from any person in connection with the execution and delivery of this
Agreement.
SECTION 12. LIMITATION OF LIABILITY. DAS hereby agrees to release, waive,
and forever discharge any demands, claims, suits, or actions of any character
against Southern arising out of or in connection with DAS' commercialization of
Controlled Release Naltrexone in the absence
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
9
<PAGE>
of any negligent or willful act or omission by Southern in the fulfillment of
its obligations under this Agreement.
In no event shall either party be responsible or liable with respect to
any subject matter of this Agreement under contract, tort, strict liability or
other legal theory, for any special, indirect, incidental, or consequential
damages such as, but not limited to, loss of product, profits or revenues,
damage or loss from operation or non-operation of plant, or claims of customers.
SECTION 13. INDEMNITY. Subject to the terms of this paragraph, DAS hereby
agrees to indemnify, hold harmless, and defend Southern and its officers,
directors, representatives, agents, and employees from and against any and all
demands, claims, suits, or actions of any character (a "claim") presented or
brought on account of any injuries, losses, or damages sustained by any person
or property in consequence of any negligent act or omission of DAS or its
agents, employees, or subcontractors relating to Controlled Release Naltrexone,
except for any injuries, losses, or damages that specifically result from the
negligence or willful misconduct of Southern, in the performance of the
obligations imposed herein. DAS' obligations hereunder are subject to Southern
(i) cooperating with DAS in such defense at DAS' expense, (ii) tendering to DAS
the authority to control and/or settle such claim (but Southern shall have the
right to by represented by counsel of its own choice and at its own expense),
and (iii) notifying DAS in writing within 15 days of first becoming aware of any
such claim, unless DAS is not prejudiced by later notification. The foregoing
indemnity shall include but not be limited to court costs, attorneys' fees,
costs of investigation, costs of defense associated with such demands, claims,
suits, or actions. DAS will include [* * *].
During the time that Controlled Release Naltrexone is introduced
into human trials or is being commercially distributed or sold by DAS or by a
Sub-licensee, Affiliate or agent of DAS, DAS shall make a good faith effort,
at no cost to Southern, to procure and maintain [* * *]insurance in
reasonable amount in relation to the nature of Controlled Release Naltrexone,
to the extent that such insurance is available to DAS at a cost reasonably
related to the anticipated risks and commensurate with DAS' reasonable
assessment of the risk and its ability to respond to damages. Any such [* * *]
insurance shall provide (i) [* * *] (ii) [* * *]. The amounts provided for by
such insurance [* * *].
DAS shall provide Southern with written evidence of such insurance or
evidence of DAS' attempts to obtain such insurance upon written request of
Southern and shall give Southern at least thirty (30) days notice prior to
cancellation, non-renewal or material change relating to insurance of which DAS
has previously notified Southern.
SECTION 14. CONFIDENTIALITY.
SECTION 14.1 CONFIDENTIALITY OBLIGATION. During the Term of this
Agreement and for a period of five years thereafter, DAS and Southern shall
maintain in confidence all Confidential Information disclosed to it by the other
party. Neither DAS nor Southern will use, disclose or grant the use of such
Confidential Information except as expressly authorized by this Agreement. To
the extent that disclosure is authorized by this Agreement, the disclosing party
will obtain prior agreement from the party to whom disclosure is to be made, to
hold in confidence and not
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
10
<PAGE>
make use of such information for any purposes other than those permitted by
this Agreement. Each party will use at least the same standard of care as it
uses to protect its own proprietary and trade secret information to insure
that such employees, agents, consultants and investigators do not disclose or
make any unauthorized use of such Confidential Information. Each party will
promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.
SECTION 14.2 EXCEPTIONS. The obligations of confidentiality contained
in Section 14.1 will not apply to the extent that it can be established by the
receiving party by competent proof that such Confidential Information:
(a) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure by the other party;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure by the other party;
(c) became generally available to the public or 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
(d) was disclosed to the receiving party, other than under an
obligation of confidentiality, by a third-party lawfully in possession of the
information.
SECTION 14.3 AUTHORIZED DISCLOSURE. Each party may disclose the
Confidential Information to the extent such disclosure is reasonably necessary
in filing or prosecuting patent applications, prosecuting or defending
litigation, complying with applicable governmental laws or regulations, or
reasonably required by investors, potential vendors and potential sources of
financing, provided that if such party is required to make any such disclosure
of the Confidential Information it will to the extent commercially practicable
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 all diligent efforts to secure confidential treatment of such information
required to be disclosed to government authorities or by court order.
SECTION 15. TERMINATION.
SECTION 15.1 TERMINATION BY SOUTHERN. If DAS:
(a) Commits a breach of any of the material provisions of this
Agreement which is not cured by DAS within ninety (90) days of the date on which
Southern provides written notice to DAS of such breach; or
(b) Commences or has commenced against it any proceeding under
the Federal Bankruptcy Code, or any state law concerning creditor relief,
assignment for benefit of creditors, or appointment of a receiver, which
proceeding is not dismissed within 90 days of the date of commencement,
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
11
<PAGE>
then Southern, to the extent permitted by law, shall have the right, at
Southern's sole election, to declare the exclusive licenses granted to DAS in
Section 2 of this Agreement terminated or to convert such licenses to
non-exclusive, such termination or conversion to be effective immediately upon
such declaration by Southern.
SECTION 15.2 TERMINATION BY DAS. DAS shall have the right to
terminate this Agreement upon ninety (90) days written notice to Southern.
SECTION 15.3 CONSEQUENCES OF TERMINATION. If termination of this
Agreement occurs, all rights licensed to DAS hereunder shall revert to
Southern and neither party shall have any obligations to the other party,
except for accrued obligations to pay earned Running Royalties and other
obligations hereof that expressly by their terms survive termination;
provided, however, that in no event will DAS or any sublicensee, transferee
or assignee be precluded from disposing of its inventory or meeting its then
existing supply obligations. Notwithstanding anything to the contrary, the
following Sections shall survive termination: 8 - 14 and 16.
SECTION 16 GENERAL PROVISIONS.
SECTION 16.1 GOVERNING LAW. This Agreement shall be governed by the
internal laws of the State of Alabama.
SECTION 16.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together
with the Research Agreement represent the entire agreement between the parties
with respect to the subject matter hereof. This Agreement may only be modified
or amended in writing signed by both parties. In the event of a conflict with
respect to the licenses granted in this Agreement, the terms of this Agreement
shall prevail over the Research Agreement.
SECTION 16.3 NOTICES. Notices, payments, statements, reports and other
communications under this Agreement shall be in writing and shall be effective
on receipt if addressed as follows:
If for Southern:
Southern Research Institute
200 Ninth Avenue South
Birmingham, Alabama 35205
Athn: David W. Mason
Telephone: (205) 581-2389
Facsimile: (205) 581-2618
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
12
<PAGE>
If for DAS:
Drug Abuse Sciences, Inc.
1430 O'Brien Drive, Suite E
Menlo Park, California 94025
Attn: Chief Executive Officer
Telephone: 650-426-1000
Fax: 650-462-1003
Either party may change its official address upon written notice to the other
party.
SECTION 16.4 NO WAIVER. Either party's failure to enforce any
provision or provisions of this Agreement shall not in any way be construed
as a waiver of any such provision or provisions, nor prevent that party
thereafter from enforcing each and every other provision of this Agreement.
The rights granted both parties herein are cumulative and shall not
constitute a waiver of either party's right to assert all other legal
remedies available to it under the circumstances.
SECTION 16.5 ASSIGNMENT. This Agreement may not be assigned or
otherwise transferred, nor, except as expressly provided hereunder, may any
right or obligation hereunder be assigned or transferred, by DAS without the
written consent of Southern; provided, however, that DAS may, without such
consent, assign this Agreement and its rights and obligations hereunder (a) in
connection with the transfer or sale of all or substantially all of DAS'
business, if such assets include substantially all of the assets relating to
DAS' performance of its obligations hereunder, (b) to a wholly-owned subsidiary
of DAS or one of its Affiliates or, (c) in the event of DAS' merger or
consolidation with another company at any time during the term of this
Agreement. Any purported assignment in violation of this Section 16.5 shall be
void. Any permitted assignee shall assume all obligations of its assignor under
this Agreement.
SECTION 16.6 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
SECTION 16.7 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which together shall be deemed an original, but all
of which together shall constitute one and the same instrument.
SECTION 16.8 DISPUTE RESOLUTION. If a dispute arises between the
parties relating to the interpretation or performance of this Agreement, the
parties agree to hold a meeting, attended by individuals with decision-making
authority regarding the dispute, to attempt in good faith to negotiate a
resolution of the dispute prior to pursuing other available remedies. If, within
30 days after such meeting, unless extended by mutual consent, the parties have
not succeeded in negotiating a resolution of the dispute, the parties agree to
hold another meeting, attended by individuals holding at least vice presidential
offices within their respective organizations, to again attempt in good faith to
negotiate a resolution of the dispute. If, within 30 days after such meeting,
unless extended by mutual consent, the parties have not succeeded in negotiating
a resolution of the dispute, such dispute shall be submitted to final and
binding arbitration under
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
13
<PAGE>
the then current Licensing Agreement Arbitration Rules of the American
Arbitration Association ("AAA"), with a panel of three arbitrators in New
York, New York. Such arbitrators shall be selected by mutual agreement of the
parties or, failing such agreement, shall be selected according to the
aforesaid AAA rules. The parties shall bear the costs of arbitration equally
unless the arbitrators, pursuant to their right, but not their obligation,
require the non-prevailing party to bear all or any unequal portion of the
prevailing party's costs. The decision of the arbitrators shall be final and
may be sued on or enforced by the party in whose favor it runs in any court
of competent jurisdiction at the option of the successful party. The
arbitrators will be instructed to prepare and deliver a written, reasoned
opinion conferring their decision. The rights and obligations of the parties
to arbitrate any dispute relating to the interpretation or performance of
this Agreement or the grounds for the termination thereof shall survive the
expiration or termination of this Agreement for any reason.
SECTION 16.9 FURTHER ASSURANCES. The parties agree (a) to furnish
upon request to each other such further information, (b) to execute and
deliver to each other such other documents, and (c) to do such other acts and
things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement.
SECTION 16.10 SEVERABILITY. If any provision of this Agreement is
held invalid or unenforceable by any court of competent jurisdiction, the
other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or
unenforceable.
SECTION 16.11 PUBLICITY. Except as required by law and in connection
with obtaining company financing, nothing contained in this Agreement shall be
construed as conferring any right to use in advertising, publicity, or other
promotional activities any name, trade name, trademark, or other designation of
Southern (including contraction, abbreviation or simulation of any of the
foregoing) without prior written approval.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above stated.
SOUTHERN RESEARCH INSTITUTE DRUG ABUSE SCIENCES, INC.
By: /s/ David W. Mason By: /s/ Stanley A. Kaplan
-------------------------------- -------------------------------
David Mason Stanley A. Kaplan
Its: Assistant Secretary Its: Chief Executive Officer
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
15
<PAGE>
EXHIBIT A
SOUTHERN PATENT RIGHTS
<TABLE>
<CAPTION>
- ------------------------------- -------------- ---------------- ---------------- ---------------- --------------------
COUNTRY SERIAL FILING PATENT PATENT DUE DATES/
NO. DATE NO. DATE STATUS
- ------------------------------- -------------- ---------------- ---------------- ---------------- --------------------
U.S. APPLICATIONS
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
<S> <C> <C> <C> <C> <C>
U.S.A. 08/062,696 5/17/93 5,407,609 4/18/95 Issued; Current
(expires
4/18/12)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
PCT (designating Austria, PCT/US 5/2/90 - - Published
Australia, Barbados, 9010/2439 11/15/90;
Bulgaria, Brazil, Canada, Inactive.
Switzerland, Liechtenstein,
Germany, Denmark, Spain,
Finland, U.K., Hungary,
Japan, North Korea, South
Korea, SRI Lanka, Luxembourg,
Monaco, Madagascar, Malawi,
Netherlands, Norway, Romania,
Sudan, Sweden, Russian
Federation, EP; OAPI)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Austria 9008830.4 5/02/90 0471036 01/17/96 Issued; Current.
(expires
5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Belgium 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/2/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Canada 2,050,911 5/02/90 2,050,911 7/15/97 Issued; Current.
(Nat'l Phase of PCT) (9/30/91-Nat'l (expires
Phase) 5/22/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Switzerland 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/2/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Germany 909088304 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/2/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
EP 90908830.4 5/02/90 Granted -
(Nat'l Phade of PCT) (9/25/91-EP National Phase
Nat'l Phase) applications filed
in Austria,
Belgium,
Switzerland,
Germany, Denmark,
Spain, France, United
Kingdom, Italy,
Leichtenstein,
Luxembourg,
Netherlands and
Sweden.
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
16
<PAGE>
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Spain 90908830.4 5/02/90 4071036 1/17/96 Issued; Current.
(expires
5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Finland 915129 5/2/90 Revised claims
(Nat'l Phase of PCT) (10/30/91- filed 3/29/92.
Nat'l Phase) Office Action
received.
Response to office
action filed
5/23/96.
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
France 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Great Britain 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Italy 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Japan 508473/90 5/02/90 2582116 11/21/96 Issued; Current.
(Nat'l Phase of PCT) (11/15/91- (expires
Nat'l Phase) 5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
South Korea 91-701573 5/02/90 162669 9/01/98 Issued; Current.
(Nat'l Phase of PCT) (10/31/91- (expires
Nat'l Phase) 0/01/13)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Luxembourg 90908830.4 5/02/90 0471016 1/17/96 Issued; Current.
(expires
5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Hong Kong 90908830.4 5/03/90 0,471,836 1/17/96 Issued; Current.
(EP) (HK #
308/1997)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Singapore 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(EP) 0471036 (EP) (expires
(SG) 97909105 5/02/10)
(SG)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Netherlands 90908810.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Norway 91.4292 5/2/90 302.683 4/14/98 Issued; Current.
(Nat'l Phase of PCT) (11/1/91- (expires
Nat'l Phase) 5/02/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Sweden 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- ----------------------------------------------------------------------------------------------------------------------
NON-PCT CONVENTION APPLICATIONS
- ----------------------------------------------------------------------------------------------------------------------
China 90194260.9 5/04/90 - - Application
withdrawn 11/91
per instructions
from SRI.
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Greece 90.01.00330 5/03/90 1000614 3/04/92 Issued; Current.
(expires
5/03/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Ireland 1616/90 5/03/90 09313 8/12/96 Issued; Current.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
17
<PAGE>
(expires
5/03/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Israel 347476 5/04/90 94296 2/01/96 Issued; Current.
(expires
5/04/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
New Zealand 233570 5/04/90 233570 5/04/90 Issued; Current.
(expires
5/04/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
South Africa 90/3411 5/04/90 90/3411 2/27/91 Issued; Current.
(expires
5/04/10)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
India 341/MAS/ 90 5/04/90 173577 1/06/95 Inactive.
(expires
5/04/97)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
Taiwan 79103694 5/07/90 50062 7/11/91 Issued; Current.
(expires
7/11/06)
- ------------------------------- ---------------- -------------- ---------------- ---------------- --------------------
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
18
<PAGE>
EXHIBIT 10.12
RESEARCH AGREEMENT
(WITH OPTION TO LICENSE)
BETWEEN
SOUTHERN RESEARCH INSTITUTE
AND
DRUG ABUSE SCIENCES, INC.
DATE: JANUARY 21, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
BACKGROUND........................................................................................................1
DEFINITIONS:......................................................................................................1
THE PROJECT.......................................................................................................2
TERM..............................................................................................................2
CHARGES AND INVOICING.............................................................................................3
MATERIALS.........................................................................................................4
DELIVERABLES......................................................................................................4
OWNERSHIP OF INVENTIONS AND DISCOVERIES...........................................................................5
PATENT MATTERS....................................................................................................6
PRODUCT COMMERCIALIZATION.........................................................................................7
PUBLICITY.........................................................................................................7
CONFIDENTIALITY...................................................................................................7
LIMITATION OF LIABILITY...........................................................................................8
INDEMNIFICATION...................................................................................................8
MISCELLANEOUS.....................................................................................................9
Assignment...............................................................................................9
Entire Agreement.........................................................................................9
Parties Independent......................................................................................9
Waivers; Amendments.....................................................................................10
Further Assurances......................................................................................10
Notice..................................................................................................10
Applicable Law; Divisibility............................................................................11
Headings................................................................................................11
Translations............................................................................................11
Force Majeure...........................................................................................11
Agreement Under Seal....................................................................................11
Counterparts............................................................................................11
EXHIBIT A - PRODUCT DESCRIPTION................................................................................ E-1
EXHIBIT B - PATENTS AND PATENT APPLICATIONS.................................................................... E-2
EXHIBIT C - PROPOSAL........................................................................................... E-3
</TABLE>
i
<PAGE>
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
RESEARCH AGREEMENT
(WITH OPTION TO LICENSE)
THIS AGREEMENT ("RESEARCH AGREEMENT") is made and entered into as of January 21,
2000, by and between SOUTHERN RESEARCH INSTITUTE, having an address at 2000
Ninth Avenue South, Birmingham, Alabama, 35205 (hereinafter "SOUTHERN"), and
DRUG ABUSE SCIENCES, INC., having an address at 1430 O'Brien Dr., Suite E, Menlo
Park, California, 94025, and Affiliates (hereinafter referred to collectively as
"DAS", where Affiliates are defined below).
BACKGROUND
SOUTHERN is a not-for-profit corporation organized and operated for scientific
purposes and is engaged in conducting scientific research in the public
interest; and
DAS desires that SOUTHERN conduct the research described in this RESEARCH
AGREEMENT and SOUTHERN's Proposal P99.620.3R3 (hereinafter the "Proposal"). A
copy of the Proposal is attached hereto as Exhibit C.
THEREFORE, in consideration of the premises and mutual promises and covenants
herein contained, SOUTHERN and DAS agree as follows:
DEFINITIONS:
TECHNOLOGY - Means any and all technical information,
formulations, processes, know-how, data, specifications,
characterization methods, characterization results, and other
proprietary information, whether or not patented or
patentable, owned or used by SOUTHERN and relating to the
process for [****] or other performance-enhancing qualities
to products, including but not limited to the patents
(issued, ending, or subsequently filed and including all
divisionals, continuations, continuations-in-part or other
related United States and foreign applications) listed in
Exhibit B to which may be added additional patents or patent
applications resulting from developments under this RESEARCH
AGREEMENT.
PRODUCT TECHNOLOGY - Means any part of the Technology, as
defined above, specifically utilized in work on this project
and to produce DAS' ultimate product(s), compound(s), or
formulation(s), listed in Exhibit A, which Exhibit A may be
amended from time to time based on developments under this
RESEARCH AGREEMENT.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1
<PAGE>
AFFILIATE - means any entity or organization that controls, is
controlled by or is under common control with a party. For
this purpose, "control" shall mean the ownership (whether
directly or indirectly) of forty-nine percent (49%) or more of
the voting stock or other equity interest or the ability
(whether directly or indirectly) to determine the policy or
actions of any entity on account of contract or other
relationships.
BUPRENORPHINE - means each of [********]
CONTROLLED RELEASE BUPRENORPHINE - means any [********]
THE PROJECT
1. (a) DAS hereby establishes a research project with SOUTHERN
(hereinafter the "Project"), the purpose of which is to develop the product(s)
listed in Exhibit A (hereinafter the "PRODUCT").
(b) During the term of this RESEARCH AGREEMENT , SOUTHERN will
undertake the Project described in Paragraph 1(a) exclusively for DAS
[********].
(c) SOUTHERN grants to DAS an exclusive option to license the
PRODUCT developed during the term of this RESEARCH AGREEMENT (hereinafter said
term shall be referred to as the "Option Period"). The purpose of such option to
license is for DAS to evaluate its interest in commercializing the PRODUCT. The
payment for such option to license shall be in the amount and shall occur
pursuant to Paragraph 3(a) herein. DAS' rights under this option to license are
described in Paragraph 8 herein.
TERM
2. (a) This RESEARCH AGREEMENT and the Option Period shall become
effective on the date written above and, unless earlier terminated by DAS as set
forth below, shall terminate the earlier of three (3) years thereafter or upon
completion of the services which DAS may require for entering and performing
clinical studies toward the commercialization of PRODUCT, except as otherwise
provided herein; provided, however, that the three (3) year term set forth in
this sentence shall be changed to two (2) years if DAS ceases the operation of
its business. It is the intent of the parties that both parties use best efforts
to produce a PRODUCT acceptable to DAS that shall be delivered to DAS not later
than [********] from the initiation of the development set forth in the
Proposal.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2
<PAGE>
(b) Paragraphs 1(c), 2(b) and (c), 3(a), 5, 6, 7, 8, 9, 10,
11, 12 and 13 shall survive the termination of this RESEARCH AGREEMENT.
(c) DAS can terminate this RESEARCH AGREEMENT, which will
also terminate the option to license, by giving SOUTHERN a written notice
stating the desired termination date. This notice shall be given at least
[*********] of the desired termination date. DAS shall pay to SOUTHERN in
full for all of SOUTHERN's activities occurring under this RESEARCH AGREEMENT
through the date of termination. In the event that DAS terminates this
RESEARCH AGREEMENT prior to delivery of PRODUCT and SOUTHERN enters into a
subsequent research agreement for Buprenorphine and employs Product
Technology developed under this RESEARCH AGREEMENT, SOUTHERN agrees to
negotiate in good faith with DAS reasonable compensation for DAS' payments
prior to such termination. Such compensation shall take into consideration
pharmaceutical industry standard drug profit margins, the fact of DAS'
termination, the total amount paid by DAS, the extent to which the Product
Technology will be used, the savings in performing such future research which
SOUTHERN will enjoy, the period of time elapsing between the termination by
DAS and the entering into such subsequent research agreement, and such other
considerations which are relevant to the determination of compensation. If
the parties cannot agree on such compensation within [*********] of a party's
request to negotiate, then either party may submit the matter to binding
arbitration. The parties agree to hold a meeting, attended by individuals
with decision-making authority regarding the dispute, to attempt in good
faith to negotiate a resolution of the dispute prior to pursuing other
available remedies. If, within [*********] after such meeting, unless extended
by mutual consent, the parties have not succeeded in negotiating a resolution
of the dispute, the parties agree to hold another meeting, attended by
individuals holding at least vice presidential offices within their
respective organizations, to again attempt in good faith to negotiate a
resolution of the dispute. If, within [*********] after such meeting, unless
extended by mutual consent, the parties have not succeeded in negotiating a
resolution of the dispute, such dispute shall be submitted to final and
binding arbitration under the then current rules relating to commercial
disputes of the American Arbitration Association ("AAA"), with a single
arbitrator in New York, New York. Such arbitrator shall be selected by mutual
agreement of the parties or, failing such agreement, shall be selected
according to the aforesaid AAA rules. The parties shall bear the costs of
arbitration equally unless the arbitrators, pursuant to their right, but not
their obligation, require the non-prevailing party to bear all or any unequal
portion of the prevailing party's costs. The decision of the arbitrator shall
be final and may be sued on or enforced by the party in whose favor it runs
in any court of competent jurisdiction at the option of the successful party.
The arbitrators will be instructed to prepare and deliver a written, reasoned
opinion conferring their decision. The rights and obligations of the parties
to arbitrate any dispute relating to the interpretation or performance of
this Agreement or the grounds for the termination thereof shall survive the
expiration or termination of this Agreement for any reason.
(d) The term of this RESEARCH AGREEMENT and the Option
Period can be extended subject to mutual agreement in writing between DAS and
SOUTHERN.
CHARGES AND INVOICING
3. (a) Upon signing of this RESEARCH AGREEMENT, DAS shall have
the option, at no cost, to license described in Paragraph 1(c) herein, which
option shall remain in
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3
<PAGE>
effect for a period of [*********], with an understanding that DAS shall use
diligent efforts develop a product. Thereafter, the option may be extended on
a year by year basis by a payment of [*********]. The payments for the option
to license are not refundable.
(b) DAS' liability for the payment of charges in carrying
out the Project shall not exceed, in the aggregate, [*********] without DAS'
prior written consent. Each task described in the Proposal shall require a
purchase order issued by DAS.
(c) DAS shall pay to SOUTHERN the sum of the charges
incurred during each month within [*********] of the invoice date for the
corresponding purchase order.
(d) SOUTHERN reserves the right to terminate this RESEARCH
AGREEMENT and the option to license, if DAS fails to pay any invoice within
[*********]from the invoice date.
(e) Upon receipt of DAS' written notice to terminate this
RESEARCH AGREEMENT, SOUTHERN will promptly discontinue work on the Project
and will invoice DAS for the sum of any uninvoiced charges incurred prior to
DAS' requested termination date. DAS shall pay to SOUTHERN the sum of the
charges listed on this invoice within [*********] of the invoice date.
MATERIALS
4. (a) With respect to the Project, SOUTHERN shall provide the
services of such personnel, laboratory facilities, equipment, chemicals, and
other supplies to conduct its activities under this RESEARCH AGREEMENT.
SOUTHERN shall provide as Exhibit D the names of the senior personnel who
will be working on the Project. In addition to the milestones set forth in
Exhibit C, the status of the Project at [*********] from the initiation of
the Project shall be treated as a milestone. At the time of each of the
milestones, the parties shall meet and assess the progress of the Project.
The meeting site for such meetings will alternate between the parties'
respective offices, with each party to bear its own costs associated
therewith. The information set forth in Exhibit D shall not be binding on
SOUTHERN, but SOUTHERN will notify DAS of any significant change in personnel
or charges.
(b) DAS agrees to supply to SOUTHERN, at no charge to
SOUTHERN, such necessary quantities of Buprenorphine ("Material") for the
Project at such times as SOUTHERN may reasonably request in order to complete
the Project. SOUTHERN shall give DAS reasonable notice of any need for the
Material, so as to allow DAS to obtain reasonable delivery of the Material
without delaying the Project.
DELIVERABLES
5. (a) SOUTHERN will furnish DAS timely progress reports on a
monthly basis summarizing the results of the Project and technical reports on
completion of a specific task or activity. These progress reports shall
contain technical information generated on the Project, except the details of
the process to make the PRODUCT.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4
<PAGE>
(b) SOUTHERN will provide research samples of the PRODUCT
("Research Samples") to DAS for evaluation as they become available. With the
Research Samples, SOUTHERN will provide DAS with sufficient information to
evaluate the Research Samples. The Research Samples shall be used by DAS for
research purposes only and DAS shall not distribute the Research Samples to a
third party without permission of SOUTHERN, except that DAS may without
permission give the Research Samples to laboratories for testing and
evaluation, which laboratories shall agree not to analyze the samples for
their composition, and provided that such laboratories satisfy any
requirements of the United States Drug Enforcement Agency. Information
generated by DAS from use of Research Samples may be shared in confidence
with SOUTHERN and will not be published, presented publicly, such as at
scientific meetings, or patented by SOUTHERN without prior written agreement
of the parties.
(c) It is understood and agreed that said Research Samples
cannot be used in humans.
(d) Should any phase of this Project involve the supply of
clinical samples of the PRODUCT ("Clinical Samples") by SOUTHERN for use in
humans, DAS hereby represents and warrants to SOUTHERN that all human
clinical protocols involving the use of any Clinical Samples to be provided
under this and/or subsequent agreements will be reviewed by the appropriate
Regulatory Agency(ies) and Institutional Human-Use Review Board(s) for
analysis of risk, benefit, and safety to human subjects and compliance with
all applicable procedures, laws, and regulations. It is agreed that said
Clinical Samples shall be prepared under current Good Manufacturing Practices
(cGMP) and supply of such Clinical Samples to DAS shall occur after SOUTHERN
receives from DAS written verification that appropriate Regulatory
Agency(ies) and Institutional Human-Use Review Board(s) approvals are in
place.
(e) Prior to DAS preparing any Clinical Samples of the
PRODUCT, SOUTHERN reserves the right to reassess its potential liability
arising from such use and to renegotiate the indemnity provisions of this
RESEARCH AGREEMENT. SOUTHERN shall provide DAS with the basis for its request
for renegotiation and substantiate the reasons for the change in indemnity
provisions.
OWNERSHIP OF INVENTIONS AND DISCOVERIES
6. (a) SOUTHERN represents that each of its employees has
entered into an employment agreement that provides for assignment to SOUTHERN
of all inventions made by such employee during the course of his employment
with SOUTHERN.
(b) DAS shall have title to any and all discoveries
relating to preparations and/or formulations and/or methods of use of the
formulations (collectively, the "Composition/Method Invention") in connection
with this Project, solely made or obtained during the term of this RESEARCH
AGREEMENT by personnel of DAS engaged in work on the Project. SOUTHERN shall
have title to any Composition/Method Invention in connection with this
Project solely made or obtained during the term of this RESEARCH AGREEMENT by
personnel of SOUTHERN engaged in the work on the Project. DAS and SOUTHERN
shall have title to any Composition/Method Invention in connection with this
Project jointly made or obtained during the term of this RESEARCH AGREEMENT
by personnel of SOUTHERN and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5
<PAGE>
employees of DAS engaged in work on the Project. Such Composition/Method
Invention, whether patentable or not, shall promptly be made known to DAS in
writing. Whether or not a Composition/Method Invention patent issues as a
result of the research herein, SOUTHERN shall grant to DAS the right to use
any Composition/Method Invention owned solely by SOUTHERN only for the
PRODUCT contingent upon the signing of a license agreement ("LICENSE
AGREEMENT") by the parties. If a jointly owned patent issues, DAS shall
assign its rights to non-PRODUCTS to SOUTHERN, while retaining a
non-exclusive non-transferable royalty-free license to fully exploit such
patent(s) and the underlying technology.
(c) SOUTHERN shall have title to any and all discoveries
relating to chemical and/or fabrication processes (collectively, the "Process
Invention") arising from research investigations under this Project, made or
obtained during the term of this RESEARCH AGREEMENT by personnel of SOUTHERN
engaged in the work on the Project. SOUTHERN shall grant to DAS the right to
use such Process Invention, whether or not a letters patent issues, to
manufacture only the PRODUCT contingent upon the signing of the LICENSE
AGREEMENT by the parties.
(d) SOUTHERN shall grant to DAS the right to use SOUTHERN's
existing inventions listed in Exhibit B. DAS can use such existing inventions
to manufacture only the PRODUCT in accordance with the LICENSE AGREEMENT.
PATENT MATTERS
7. (a) Any expense for the drafting, filing, assignment,
recording of assignment, prosecution, annuities, and maintenance of United
States or foreign patent applications and patents for Composition/Method
Inventions arising from research investigations of this Project shall be
borne by DAS during the Option Period and during the period that such patent
applications and patents are exclusively licensed for PRODUCT to DAS.
Otherwise, such expenses shall be borne by SOUTHERN. SOUTHERN shall be
responsible for all patent prosecution for Composition/Method Inventions and
all decisions thereto, except that under any LICENSE AGREEMENT, DAS shall
assume all costs and have control of all Composition/Method of Use patents
covering PRODUCT. Each party shall cooperate with the other party in the
filing and prosecution of any such patents covering Composition/Method
Inventions arising under this Agreement.
(b) Any expense for the drafting, filing, assignment,
recording of assignment, prosecution, annuities, and maintenance of United
States or foreign patent applications and patents for Process Inventions
arising from research investigation of this Project shall be borne by
SOUTHERN. SOUTHERN shall be responsible for all patent prosecution for
Process Inventions and all decisions thereto.
(c) Both SOUTHERN and DAS shall have the opportunity for a
timely textual review of patent filing and prosecution matters related to
Composition/Method Invention applications that result from research
investigations of this Project.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6
<PAGE>
PRODUCT COMMERCIALIZATION
8. (a) At any time during the Option Period, DAS upon written notice to
SOUTHERN, may, at its sole option, elect to enter into the LICENSE AGREEMENT for
the PRODUCT attached hereto as Exhibit D.
(b) No PRODUCT based upon the Technology, derivatives thereof, or their
use shall be commercialized by DAS or any third party without license from
SOUTHERN, except as provided for in Article 5 para. (b).
(c) If DAS executes a clinical or commercial supply agreement for
PRODUCT with a third party, SOUTHERN will, at DAS' expense, assist DAS and such
third party in utilizing the Project Technology to manufacture the PRODUCT. Such
third party shall be subject to SOUTHERN's reasonable approval and shall agree
in writing to be bound by the confidentiality and other relevant provisions of
this RESEARCH AGREEMENT.
PUBLICITY
9. Except as required by law, no publication, advertising, or publicity
matter having any reference to either DAS or SOUTHERN, expressed or implied,
shall be made use of by either party or anyone on behalf of either party, unless
and until such matter shall have first been mutually agreed upon in writing. The
foregoing shall not restrict the parties' right to make reference to the
parties' relationship or this Agreement to investors or potential investors.
CONFIDENTIALITY
10. (a) DAS and SOUTHERN agree that they will exert diligent efforts to
ensure their employees, agents, and consultants will keep in confidence and not
disclose or publish any proprietary information, confidential technical
information, or confidential business information (collectively hereinafter
referred to as "Information") transmitted to one another for use in the
performance of this Project or new information developed by DAS or SOUTHERN in
connection with this Project, including any Composition/Method and Process
Inventions. The confidentiality obligations herein shall not apply to:
(i) information, that at the time of disclosure, is in the
public domain; or
(ii) information, that after disclosure, becomes available to the
public through no fault of either party hereto or is lawfully made available to
DAS or SOUTHERN by a third party without restrictions as to disclosure; or
(iii) information that DAS or SOUTHERN can establish by
reasonable proof was in their possession at the time of disclosure, or was
subsequently and independently developed by employees of DAS or SOUTHERN,
outside of the scope of this Project, who had no knowledge of the information
disclosed; or
(iv) information deemed necessary and appropriate by DAS
or SOUTHERN to perfect patent rights pursuant to Paragraphs 6 and 7; or
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7
<PAGE>
(v) information that DAS and SOUTHERN mutually agree in writing
to release from the terms of this RESEARCH AGREEMENT; or
(vi) information required to be disclosed by order of a court,
other governmental body, or other government regulatory agency in the
furtherance of the purposes of the Project, after consultation with the party
who owns the Information.
(b) DAS' and SOUTHERN's obligation to keep in confidence, not to
disclose or publish such Information shall continue for a period of ten (10)
years from the date of this RESEARCH AGREEMENT, at the end of such period the
obligation will terminate.
(c) DAS and SOUTHERN may, in their sole discretion, disclose
necessary or appropriate Information to representatives of one or more of its
subsidiaries (whether directly or indirectly owned) in order for DAS or SOUTHERN
to perform its obligation under this RESEARCH AGREEMENT, provided, however, that
such subsidiary and such representatives shall be bound by the terms and
conditions of this Paragraph 10 that are applicable to DAS and SOUTHERN. Such
obligation not to disclose or publish shall continue in effect for any former
such subsidiary and such representatives of DAS or SOUTHERN.
(d) DAS and SOUTHERN agree that the Information disclosed will not be
used to provoke an interference with any patent application that the other party
or its employees have filed with respect to Information, and will not be used to
amend any claim in any pending patent application to expand the claim to read
on, cover or dominate any invention (whether or not patentable) disclosed as
Information.
LIMITATION OF LIABILITY
11. Under this RESEARCH AGREEMENT, SOUTHERN is to perform certain research
and other work incidental thereto, and is to provide certain counseling, advice,
conclusions, and/or recommendations. SOUTHERN will use its professional
experience and diligent professional efforts in performing this work. However,
SOUTHERN does not represent, warrant, or guarantee that its research results or
any products produced therefrom are merchantable or satisfactory for any
particular purpose, and there are no warranties, express or implied, to such
effect. DAS hereby agrees to release, waive, and forever discharge any demands,
claims, suits, or actions of any character against SOUTHERN arising out of or in
connection with DAS' acceptance, reliance on, or use of such results in the
absence of any negligent or willful act or omission by SOUTHERN in the
fulfillment of its activities under this RESEARCH AGREEMENT. In connection with
this Agreement, neither party shall be responsible or liable in contract or in
tort for any special, indirect, incidental, or consequential damages such as,
but not limited to, loss of PRODUCT, profits or revenues, damage or loss from
operation or nonoperation of plant, or claims of customers.
INDEMNIFICATION
12. DAS hereby agrees to indemnify, hold harmless, and defend SOUTHERN
and its officers, directors, representatives, agents, and employees from and
against any and all demands, claims, suits, or actions of any character
presented or brought on account of any injuries, losses, or damages sustained by
any person or property in consequence of any act or omission of DAS
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8
<PAGE>
or its agents, employees, or subcontractors, except for any injuries, losses, or
damages that result from and to the extent of the negligence or willful
misconduct of SOUTHERN, in the performance of the Project and obligations
imposed herein and [*********]. The foregoing indemnity shall include but not be
limited to court costs, attorneys' fees, costs of investigation, costs of
defense associated with such demands, claims, suits, or actions.
During the time that any product, process, service relating to, or
developed pursuant to this RESEARCH AGREEMENT is introduced into human trials
or is being commercially distributed or sold by DAS or by a licensee,
affiliate or agent of DAS, DAS shall, at no cost to SOUTHERN, procure and
maintain [*********] in reasonable amount in relation to the nature of the
PRODUCT being sold, to the extent that such insurance is available to DAS at
a cost reasonably related to the anticipated risks and commensurate with
DAS's reasonable assessment of the risk and its ability to respond in
damages. Any such [*********] insurance shall provide (i) [*********] (ii)
[*********]. The amounts provided for by such insurance shall not be
[*********].
DAS shall provide SOUTHERN with written evidence of such insurance or
evidence of DAS' attempts to obtain such insurance upon written request of
SOUTHERN and shall give SOUTHERN at least [**********] notice prior to
cancellation, non-renewal or material change relating to insurance of which DAS
has previously notified SOUTHERN.
MISCELLANEOUS
13. (a) ASSIGNMENT. This RESEARCH AGREEMENT and the benefits and
obligations hereunder may not be assigned by a party without the prior written
consent of the other party, except
(i) to an Affiliate, or
(ii) in connection with a merger or consolidation of the party in
which such party is not the surviving entity, or a sale of all or substantially
all of the assets of the party provided that the successor or purchaser agrees
to assume all of the obligations of the party hereunder.
In the event of an assignment under Subsection (ii) of this Paragraph 13(a), the
assigning party shall notify the other party in writing of such assignment at
least thirty (30) days in advance of its occurrence.
(b) ENTIRE AGREEMENT. This RESEARCH AGREEMENT, including all Exhibits
hereto, sets forth and constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and supersedes any and all
prior agreements, requests for quotation, quotations, purchase orders, letters
of intent and understandings between the parties, and any and all promises,
statements, and representations made by either party to the other concerning
the subject matter hereof and the terms applicable hereto.
(c) PARTIES INDEPENDENT. In making and performing this RESEARCH
AGREEMENT, the parties are acting and shall act at all times as independent
contractors and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
9
<PAGE>
nothing contained in this RESEARCH AGREEMENT shall be construed or implied to
create an agency, partnership, or joint venture relationship between the
parties.
(d) WAIVERS; AMENDMENTS.
(i) The failure of either party to insist upon the performance of
any of the terms of this RESEARCH AGREEMENT or to exercise any right hereunder
or at law or in equity, or any delay by either party in the exercise of any such
right, shall not be construed as a waiver or relinquishment of any such
performance or right or of the future performance of any such term or the future
exercise of such right, and any effective waiver or relinquishment of any such
right must be in writing and signed by a duly authorized officer of the party
waiving or relinquishing the right or rights. No waiver or relinquishment of any
right granted by either party to the other shall be deemed to be a continuing
waiver of such right in the future unless otherwise provided in the waiver.
(ii) This RESEARCH AGREEMENT may not be released, discharged,
amended, or modified in any manner except by an instrument in writing that
references this RESEARCH AGREEMENT and is signed by a duly authorized officer
of each party.
(e) FURTHER ASSURANCES. Each of the parties shall execute and deliver
to, or cause to be executed and delivered to, the other party, such further
instruments, or take such other action as may reasonably be requested of it to
consummate more effectively the transactions contemplated hereby.
(f) NOTICE. Any notice or other written communication required or
permitted to be made or given hereunder may be made or given by either party to
the other party by fax communication to the fax number set forth below and such
notice shall be followed up by depositing the same in the mail, certified
delivery, return receipt requested, postage prepaid, and addressed to the
mailing address set forth below:
DAS: DrugAbuse Sciences, Inc.
Attn: Chief Executive Officer
1430 O'Brien Drive, Suite E
Menlo Park, CA 94025
FAX: (650) 462-1003
SOUTHERN: Dr. Thomas R. Tice
Director, Pharmaceutical
Formulations Department
Southern Research Institute
2000 Ninth Avenue South
Birmingham, Alabama, 35205
FAX: 205-581-2888
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
10
<PAGE>
(g) APPLICABLE LAW; DIVISIBILITY. This RESEARCH AGREEMENT is to be
governed by and construed in accordance with the laws of the State of Alabama,
United States of America. If, however, any provision hereof in any way
contravenes the laws of any state or jurisdiction where this RESEARCH AGREEMENT
is to be performed, such provision shall be deemed to be deleted therefrom, and
if any term of this RESEARCH AGREEMENT shall be declared by a final adjudication
to be illegal or contrary to public policy, it shall not affect the validity of
any other terms or provisions of this RESEARCH AGREEMENT.
(h) HEADINGS. Descriptive headings used herein are for convenience only
and shall not affect the meaning or construction of any provision hereof.
(i) TRANSLATIONS. In the event of an inconsistency between any terms of
this RESEARCH AGREEMENT and any translations thereof into another language, the
English language meaning shall control.
(j) FORCE MAJEURE. The untimely performance of any obligation arising
hereunder by either party will be excused, and such delay of performance shall
not constitute a breach or grounds for termination or prejudice of any rights
hereunder, provided that (a) the delay of performance is a result of
circumstances or occurrences beyond the reasonable control of the party whose
performance is excused hereunder (the "Delaying Event"), and (b) such party
shall (i) immediately resume performance after the Delaying Event is removed and
(ii) be reasonably diligent during such Delaying Event in avoiding further
delay. Without limiting the generality of circumstances or occurrences that
shall constitute a Delaying Event, examples of Delaying Events include, but are
not limited to, strikes, shortages of power or other utility services, materials
or transportation, acts of government or of God, sabotage, insurrection and
civil war. A party whose performance may be affected by a Delaying Event
promptly shall give notice to the other party of such Delaying Event and the
fact that it intends to rely upon such Delaying Event to excuse its performance
under this RESEARCH AGREEMENT.
(k) AGREEMENT UNDER SEAL. This RESEARCH AGREEMENT is intended to be
under the seal of all parties hereto and to have the effect of a sealed
instrument in accordance with the law.
(l) COUNTERPARTS. This RESEARCH AGREEMENT may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this RESEARCH
AGREEMENT to be duly executed, on the date written above.
SOUTHERN RESEARCH INSTITUTE DRUGABUSE SCIENCES, INC.
By: /s/ David W. Mason By: /s/ Philippe Pouletty
------------------------------------ ------------------------------
Name: David W. Mason Name: Philippe Pouletty
---------------------------------- ----------------------------
Title: Assistant Secretary Director Title: CEO
Commercialization and
Intellectual Property
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
12
<PAGE>
EXHIBIT A
PRODUCT DESCRIPTION
CONTROLLED RELEASE BUPRENORPHINE
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
E-1
<PAGE>
EXHIBIT B
PATENTS AND PATENT APPLICATIONS
A. COMPOSITION/METHOD INVENTION PATENT APPLICATIONS
U.S PATENT NUMBER: 4,897,268
TITLE: Drug Delivery System and
Making the Same
U.S. PATENT APPLICATION NUMBER: 60-151112, filed 8/27/99
TITLE: [*********].
AND ANY U.S. CONTINUATION(S), CONTINUATION(S) IN PART, OR DIVISIONALS AND ANY
FOREIGN COUNTERPART OF THE ABOVE.
B. PROCESS INVENTION PATENT APPLICATIONS
U.S. PATENT NUMBER: 5,407,609
TITLE: Improved Encapsulation Process
and Products Therefrom
U.S. PATENT NUMBER: 4,897,268
TITLE: Drug Delivery System and Method of Making the Same
U.S. PATENT APPLICATION NUMBER: 60-151112 filed 8/27/99
TITLE: [*********].
AND ANY U.S. CONTINUATION(S), CONTINUATION(S) IN PART, OR DIVISIONALS AND ANY
FOREIGN COUNTERPART OF THE ABOVE.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
E-2
<PAGE>
EXHIBIT C
SOUTHERN PROPOSAL P99.620.3R3
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
E-3
<PAGE>
EXHIBIT D
LICENSE AGREEMENT
[see attached pages]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
E-4
<PAGE>
EXHIBIT 10.13
PRODUCT LICENSE AGREEMENT
between
SOUTHERN RESEARCH INSTITUTE
2000 Ninth Avenue South
Birmingham, Alabama 35205
and
Drug Abuse Sciences, Inc.
1430 O'Brien Drive, Suite E
Menlo Park, California 94025
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Section 1. Definitions......................................................1
Section 2. License Grants...................................................4
Section 3. Running Royalties................................................5
Section 4. Due Diligence in Commercialization...............................5
Section 5. Product Development and Marketing................................6
Section 6. Buprenorphine Patents Protection.................................6
Section 7. Enforcement of the Buprenorphine Patents.........................6
Section 8. Infringement of Third Party Rights...............................7
Section 9. Representations and Warranties of SOUTHERN.......................8
Section 10. Negation of Warranties by SOUTHERN..............................9
Section 11. Representations and Warranties of DAS...........................9
Section 12. Limitation of Liability.........................................9
Section 13. Indemnity......................................................10
Section 14. Confidentiality................................................10
Section 15. Termination....................................................11
Section 16. General Provisions.............................................12
</TABLE>
Exhibit A
i
<PAGE>
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
PRODUCT LICENSE AGREEMENT
THIS PRODUCT LICENSE AGREEMENT (the "Agreement") is hereby made and
entered into as of __________ _____, 2000 by and between SOUTHERN RESEARCH
INSTITUTE, an Alabama not-for-profit corporation, having an office at 2000 Ninth
Avenue South, Birmingham, Alabama 35205 ("SOUTHERN") and Drug Abuse Sciences,
Inc., a California corporation, having an office at 1430 O'Brien Drive, Suite E,
Menlo Park, California 94025 ("DAS").
RECITALS
WHEREAS, DAS is engaged in the business of discovering, developing,
licensing, manufacturing, marketing and selling pharmaceutical products and all
related activities; and
WHEREAS, in the course of such business, SOUTHERN and DAS have
entered into a research agreement dated _____ (the "Research Agreement"),
directed toward the development and evaluation of an [********] of
Buprenorphine for use in the treatment of drug or other opiod addiction; and
WHEREAS, Section 1(c) of the Research Agreement grants to DAS an option
(the "Option") to acquire from SOUTHERN an exclusive license to such
Buprenorphine formulation upon reasonable terms and conditions; and
WHEREAS, DAS desires to exercise such Option and to acquire a license
to such Buprenorphine formulation; and
WHEREAS, SOUTHERN desires to grant to DAS the desired license, subject
to the terms and conditions of this Agreement; and
WHEREAS, SOUTHERN and DAS desire to set forth in writing the terms and
conditions under which DAS will acquire from SOUTHERN the desired license to the
Buprenorphine formulation.
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth above and
the covenants and promises hereinafter set out, DAS and SOUTHERN, intending to
be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS.
SECTION 1.1 "Affiliate" - means any corporation, company,
partnership, joint venture or other business entity which controls, is
controlled by, or is under common control with DAS. For purposes of this Section
1`.1, "control" means: (a) in the case of a corporation, the direct or indirect
ownership of at least forty percent (40%) of the stock or participating shares
entitled to vote for the election of directors, or (b) in all other cases, the
direct or indirect ownership of at least a forty percent (40%) profits interest
in the business entity.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1
<PAGE>
SECTION 1.2 "Agreement" means this Product License Agreement
entered into by and between DAS and SOUTHERN as of _____, 2000.
SECTION 1.3 "Average Annual Running Royalty Payment" means
an amount equal to [********] percent [********] of the average of the annual
Running Royalties paid by DAS to SOUTHERN in the first [********] years after
the first commercial sale of Controlled Release Buprenorphine in the United
States.
SECTION 1.4 "Base Royalty Payment" means, for each year during
the Term of this Agreement, the following amount:
<TABLE>
<CAPTION>
Applicable Year Base Royalty Payment Due
--------------- ------------------------
<S> <C>
From the Effective Date until the [********]
[********] Date
[********] [********]
</TABLE>
SECTION 1.5 "Confidential Information" means any proprietary
information, research project, processes, work in process, future development,
scientific, engineering, manufacturing, marketing, business plan, financial or
personnel matter relating to either DAS or SOUTHERN, DAS' present or future
products, sales, supplies, customers, employees, investors or business including
DAS' plans to commercialize Controlled Release Buprenorphine and any other
information or biological or chemical materials relating to Controlled Release
Buprenorphine, whether in oral, written, graphic or electronic form.
SECTION 1.6 "Controlled Release Buprenorphine" means any
[********]
SECTION 1.7 "Effective Date" means _______, 2000.
SECTION 1.8 "Force Majeure" means with respect to a party, any
event reasonably beyond the control of such party including, but not limited to
wars, hostilities, revolutions, riots, civil commotion, national emergency,
strikes, lockouts, unavailability of supplies, epidemics, fire, flood,
earthquake, force of nature, explosion, embargo, or any other Act of God, or any
law, proclamation, regulation, ordinance, or other act or order of any court,
government or governmental agency.
SECTION 1.9 "Buprenorphine" means each of [********]
SECTION 1.10 "Buprenorphine Patents" means any current or
future patent rights to subject matter claimed in or covered by a patent
application(s) describing any invention arising in the performance of work under
the Research Agreement between SOUTHERN and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2
<PAGE>
DAS dated as of January 21, 2000 ("Research Agreement"), and includes,
without limitation, all substitutions, divisionals, continuations,
continuations-in-part and inventors' certificates and all foreign
counterparts of the foregoing patent(s) or patent application(s) together
with all registrations, reissues, reexaminations or extensions of such
patent(s).
SECTION 1.11 "Net Sales" means the total of all amounts
actually received by DAS or its Affiliates, for sales of Controlled Release
Buprenorphine to independent third-parties (including, but not limited to
Sublicensees and distributors) that, except for the licenses granted by SOUTHERN
to DAS in Sections 2.1 and 2.1 of this Agreement, would infringe the
Buprenorphine Patents or the SOUTHERN Patent Rights, less:
(a) returns, allowances, discounts, commissions, and
adjustments;
(b) packing, handling, transportation, and insurance
charges;
(c) sales, use, excise and similar taxes, duties
and similar governmental assessments imposed on the sale of Controlled
Release Buprenorphine; and
(d) the amount of any Running Royalties actually
paid by DAS to a third party to acquire rights to a patent which is
materially necessary in DAS' reasonable judgement, consistent with industry
practices, to commercialize, develop or exploit Control Release Buprenorphine.
SECTION 1.12 "Running Royalty" means, for each year
during the term of this Agreement, the following amount:
<TABLE>
<CAPTION>
Net Sales of Controlled
Release Buprenorphine Running Royalty
----------------------- ---------------
<S> <C>
[********] [********]
[********] [********]
[********] [********]
</TABLE>
SECTION 1.13 "SOUTHERN Know-How" means any and all inventions
(whether or not patentable), technical information, know-how, processes,
procedures, compositions, devices, methods, techniques, data, information, or
physical, chemical, or biological materials know to or possessed by SOUTHERN
which are either covered by the SOUTHERN Patents or are reasonably necessary or
useful to enable DAS to commercialize develop or exploit Controlled Release
Buprenorphine.
SECTION 1.14 "SOUTHERN Patent Rights" means the rights
described in the patents listed on Exhibit A to this Agreement and includes,
without limitation, all substitutions, divisionals, continuations,
continuations-in-part and inventors' certificates and all foreign counterparts
of the foregoing patents together with all registrations, reissues,
reexaminations or extensions of such patents.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3
<PAGE>
SECTION 1.15 "Sublicensee" shall mean any non-Affiliate third
party to whom DAS has granted the right to sell Controlled Release
Buprenorphine.
SECTION 1.16 "Term of this Agreement" means a period beginning
on the Effective Date and ending upon the later of the last to expire of the
Buprenorphine Patent(s) or SOUTHERN Patent Rights.
SECTION 1.17 "Third Anniversary Date" means the date which is
three (3) years from the date of the first commercial sale of Controlled Release
Buprenorphine in the United States.
SECTION 2. LICENSE GRANTS.
SECTION 2.1 EXCLUSIVE LICENSE. Subject to the terms and
conditions of this Agreement, SOUTHERN hereby grants to DAS an exclusive,
worldwide license under the Buprenorphine Patents to develop, create, make, have
made, use, distribute and have distributed, sell and have sold, and otherwise
exploit for any commercial purpose Controlled Release Buprenorphine.
SECTION 2.2 LICENSE IN SOUTHERN PATENT RIGHTS AND KNOW-HOW.
Subject to the terms and conditions of this Agreement including, but not limited
to the license granted and restrictions set forth in Section 2.1, SOUTHERN
hereby grants to DAS a non-exclusive, world-wide license to practice the
SOUTHERN Patent Rights and the SOUTHERN Know-How solely in conjunction with the
commercialization, development or exploitation of Controlled Release
Buprenorphine.
SECTION 2.3 RIGHT TO SUBLICENSE. Subject to the terms and
conditions of this Agreement, SOUTHERN hereby grants to DAS the right to
sublicense the right to make, have made, use, sell and have sold Controlled
Release Buprenorphine. Any such sublicense shall be granted pursuant to the
terms and conditions of this Agreement. The granting of a sublicense under this
Agreement shall not relieve DAS of its responsibilities for performance
hereunder. In the event that DAS grants a sublicense pursuant to the terms of
this Agreement, DAS shall promptly notify SOUTHERN of the grant of said
sublicense and shall provide a copy to SOUTHERN within thirty (30) days of the
date of its execution, unless DAS obtains SOUTHERN's approval to the contrary,
which SOUTHERN will not unreasonably withhold.
SECTION 2.4 LICENSE TO SOUTHERN. Subject to the terms and
conditions of this Agreement, DAS (on behalf of itself, its Affiliates,
Sublicensees, distributors, and manufacturers) hereby grants to SOUTHERN a
non-exclusive, royalty-free license to exploit for any commercial purpose any
improvements to the SOUTHERN Patent Rights that are conceived and reduced to
practice by DAS, its Affiliates, Sublicensees, distributors, or manufacturers
during the term of this Agreement (regardless of the patentability of such
improvement). DAS hereby agrees to promptly notify SOUTHERN of any and all such
improvements. Prosecution of all patentable improvements shall be governed by
the provisions of Section 6 of this Agreement. DAS hereby agrees to specifically
include the foregoing provisions concerning improvements to the SOUTHERN Patent
Rights in all agreements with its Affiliates, Sublicensees, distributors, and
manufacturers concerning Controlled Release Buprenorphine.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4
<PAGE>
SECTION 3. RUNNING ROYALTIES.
SECTION 3.1 CALCULATION OF AMOUNT. During each year of the
Term of this Agreement, [********].
SECTION 3.2 TIMING OF PAYMENTS. [********] after the end of
each quarter. DAS shall pay interest on any amounts that are not subject to a
good faith dispute between the parties and are not paid to SOUTHERN when due
under this Section 3.2 at the [********] as set by AmSouth Bank, Birmingham,
Alabama per annum. DAS shall also pay to SOUTHERN all reasonable out-of-pocket
expenses actually incurred by SOUTHERN in the course of collecting amounts past
due under this section, including reasonable attorneys' fees, whether or not any
suit was commenced by SOUTHERN against DAS.
SECTION 3.3 RUNNING ROYALTY REPORTS. [********], its
Affiliates and Sublicensees, if any, during such calendar quarter as are
pertinent to account for Running Royalties due under Section 3.1 of this
Agreement. Such report shall include at least (i) [********], (ii) [********],
and (iii) [********]. SOUTHERN shall not provide to third parties any
information contained in reports provided by DAS under this Section 3.3.
SECTION 3.4 BOOKS AND RECORDS. DAS shall keep and maintain
complete and accurate accounting records containing such information as is
reasonably necessary to enable verification of the Running Royalties accrued and
payable to SOUTHERN by DAS under the terms of this Agreement. Upon the written
request of SOUTHERN and not more than once in each calendar year, DAS shall
permit an independent, certified public accounting firm of nationally recognized
standing (bound to confidentiality) selected by SOUTHERN and reasonably
acceptable to DAS, at SOUTHERN's expense, to have access during normal business
hours to those records of DAS as may be reasonably necessary to verify the
accuracy of the royalty reports hereunder for any year [********]. The
accounting firm shall disclose to DAS and SOUTHERN the extent of any
discrepancies and the basis for such determination. An adjusting payment shall
be made upon demonstration of any underpayment. Such payment shall be made in
accordance with the provisions of Section 3.2 of this Agreement.
SECTION 3.5 EXPENSE OF AUDITS. The fees and expenses of the
accounting firm associated with SOUTHERN's request for an audit pursuant to
Section 3.4 shall be borne by SOUTHERN; provided, however, that if any audit
shall correctly show that DAS underpaid the Running Royalties due to SOUTHERN
under this Agreement for the period being audited [********] of the amount that
was payable for such period, then DAS shall, in addition to paying SOUTHERN any
such deficiency, reimburse SOUTHERN for the out-of-pocket costs of such audit.
SECTION 4. DUE DILIGENCE IN COMMERCIALIZATION.
SECTION 4.1 OBLIGATION TO EXPLOIT. DAS shall use commercially
reasonable efforts to bring Control Release Buprenorphine to market and to meet
the market demand therefor.
SECTION 4.2 COMMERCIALIZATION MILESTONE. SOUTHERN shall have
the option to terminate this Agreement in the event that DAS is unable to file a
new drug application for a
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5
<PAGE>
Controlled Release Buprenorphine formulation with the United States Food and
Drug Administration by the fifth anniversary of the Effective Date, unless a
Force Majeure occurs during such period, in which case the period of time to
file such application shall be extended for a reasonable period of time to be
mutually agreed upon by the parties.
SECTION 5. PRODUCT DEVELOPMENT AND MARKETING.
SECTION 5.1 CLINICAL TRIALS. DAS shall be responsible for
preparation and prosecution of any regulatory filings required in order to
conduct clinical trials on Controlled Release Buprenorphine. DAS shall be the
owner of record for all such regulatory filings.
SECTION 5.2 MARKETING OF CONTROLLED RELEASE BUPRENORPHINE. DAS
shall be responsible for the preparation and prosecution of suitable
applications and submissions for marketing approval of Controlled Release
Buprenorphine and shall be the owner and party of record of all such
applications and regulatory filings.
SECTION 5.3 COOPERATION AND ASSISTANCE BY SOUTHERN. SOUTHERN
will, subject to payment by DAS of its reasonable expenses, exercise
commercially reasonable efforts to assist DAS in obtaining the regulatory
licenses and approvals referred to in Sections 5.1 and 5.2 of this Agreement,
and will provide and execute all documents DAS may reasonably request for any of
the foregoing purposes. SOUTHERN hereby irrevocably designates and appoints DAS
and its duly authorized officers and agents, with full power of substitution, as
SOUTHERN's agents and attorneys-in-fact to act for and in SOUTHERN's behalf and
instead of SOUTHERN, to execute and file any such document and to do all other
lawfully permitted acts to further the purposes of the foregoing with the same
legal force and effect as if executed by SOUTHERN.
SECTION 6. BUPRENORPHINE PATENT PROTECTION.
SECTION 6.1 PATENT PROSECUTION. DAS will be responsible for
the filing, prosecution and maintenance of the Buprenorphine Patents.
Preparation, filing, prosecution, and maintenance of the Buprenorphine Patents
shall be solely at DAS' expense. DAS shall provide SOUTHERN with a reasonable
period of time to review patent applications prepared by DAS for the
Buprenorphine Patents.
SECTION 6.2 TERMINATION OF PROSECUTION. DAS' obligation to
underwrite and pay patent costs pursuant to this Section 6 shall continue for
the Term of this Agreement; provided, however, that DAS may terminate its
obligations with respect to any given patent application or patent upon three
(3) months written notice to SOUTHERN. SOUTHERN may then continue prosecution
and/or maintenance of such application(s) or patent(s) at its sole discretion
and expense. In the event that SOUTHERN decides to continue prosecution and/or
maintenance of any such application or patent, DAS shall have no further rights
to any invention claimed therein.
SECTION 7. ENFORCEMENT OF THE BUPRENORPHINE PATENTS.
SECTION 7.1 INFRINGEMENT ACTIONS. DAS will have the right to
enforce the Buprenorphine Patents against third-party infringement. Any such
infringement action initiated
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6
<PAGE>
by DAS shall be prosecuted in its own name and at its own expense. SOUTHERN
shall cooperate fully with DAS in connection with any such action. SOUTHERN
agrees to notify DAS promptly of any infringement of the Buprenorphine
Patents of which SOUTHERN is or becomes aware.
SECTION 7.2 ASSIGNMENT OF PATENT RIGHTS. If DAS elects to
commence an action pursuant to the authority granted it in Section 7.1 above,
SOUTHERN shall have the right, without an obligation by DAS to pay any
consideration other than as expressly required by this Agreement, to assign to
DAS all of SOUTHERN's rights, title and interest in the Buprenorphine Patents.
In the event that SOUTHERN makes such an assignment, such assignment shall be
irrevocable and shall allow DAS to proceed on any such action without SOUTHERN
as a party. If SOUTHERN assigns the Buprenorphine Patents to DAS pursuant to
this Section 7.2, such assignment shall require DAS to continue to meet DAS'
obligations under this Agreement as if the assigned patent were still licensed
to DAS. In the event that the Buprenorphine Patents is not assigned to DAS and
DAS commences an infringement action, SOUTHERN shall cooperate fully with DAS in
connection with any such action, which may include, at the reasonable discretion
of DAS, being named as a party and participating in such action at DAS' expense.
SECTION 7.3 DISTRIBUTION OF PROCEEDS. Any recoveries or
reimbursements from any infringement action brought by DAS pursuant to Section
7.1 shall first be applied to reimburse DAS and SOUTHERN for all reasonable
out-of-pocket litigation expenses actually incurred by DAS and SOUTHERN in the
course of participating in such action. Any funds remaining after reimbursement
of DAS and SOUTHERN for such expenses shall be treated as Net Sales of
Controlled Release Buprenorphine for purposes of Sections 1.11 and 3.1 of this
Agreement.
SECTION 7.4 ALTERNATIVE ENFORCEMENT. In the event that DAS
elects in writing not to exercise its right to prosecute any infringement of the
Buprenorphine Patents, SOUTHERN may elect to prosecute such infringement at its
own expense, controlling such action and retaining all recoveries therefrom.
SECTION 8. INFRINGEMENT OF THIRD PARTY RIGHTS.
SECTION 8.1 NOTICE. If the development, manufacture, use or
sale of Controlled Release Buprenorphine results in a claim of patent
infringement or trade secret misappropriation, the party to this Agreement first
having notice shall promptly notify the other party in writing. The notice shall
set forth the facts of the claim in reasonable detail.
SECTION 8.2 DEFENSE BY DAS. DAS shall defend against any such
third party claim which is based on the development, manufacture, use or sale of
Controlled Release Buprenorphine. SOUTHERN shall cooperate with DAS in such
defense and shall tender to DAS the authority to control and/or settle such
claim, but SOUTHERN shall have the right to be represented by counsel of its own
choice and at its own expense. If DAS is required by a final court order to make
a payment including Running Royalty payments on Net Sales of Controlled Release
Buprenorphine by DAS to a third party in connection with the disposition of such
claim, DAS shall be responsible for such payments.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7
<PAGE>
SECTION 8.3 DEFENSE BY SOUTHERN. SOUTHERN shall defend against
any such third party claim which is based on DAS' use of the SOUTHERN Patent
Rights or SOUTHERN Know-How to commercialize Control Release Buprenorphine. DAS
shall cooperate with SOUTHERN in such defense and shall tender to SOUTHERN the
authority to control and/or settle such claim, but DAS shall have the right to
be represented by counsel of its own choice and at its own expense. If SOUTHERN
is required by a final court order to make a payment including Running Royalty
payments on Net Sales of Controlled Release Buprenorphine by DAS to a third
party in connection with the disposition of such claim, SOUTHERN shall be
responsible for such payments.
SECTION 9. REPRESENTATIONS AND WARRANTIES OF SOUTHERN. This Agreement is made
with SOUTHERN in reliance upon SOUTHERN's representations and warranties to DAS,
which by SOUTHERN's execution of this Agreement, SOUTHERN hereby confirms as
follows:
SECTION 9.1 INTELLECTUAL PROPERTY. SOUTHERN:
(i) is the sole owner of all rights, title
and interest in the Buprenorphine Patents and the SOUTHERN Patent Rights and
SOUTHERN Know-How;
(ii) has not assigned, transferred,
licensed, pledged or otherwise encumbered the Buprenorphine Patents;
(iii) has full power and authority to enter
into this Agreement and to grant the licenses set forth in Section 2 of this
Agreement; and
(iv) except as previously disclosed to DAS
in writing, is not aware of any questions or challenges with respect to the
validity of any claims of the Buprenorphine Patents and the SOUTHERN Patents.
SECTION 9.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid,
and binding obligation of SOUTHERN, enforceable against SOUTHERN in accordance
with its terms. SOUTHERN has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and to perform its
obligations under this Agreement.
(b) The execution and delivery of this Agreement will
not directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or
result in a violation of (A) any provision of the organizational documents of
SOUTHERN, or (B) any resolution adopted by the board of directors of SOUTHERN;
or
(ii) contravene, conflict with, or result in
a violation or breach of any provision of, or give any person the right to
declare a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any material agreement to
which SOUTHERN is bound.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8
<PAGE>
SOUTHERN is not and or will not be required to give any notice to or
obtain any consent from any person in connection with the execution and delivery
of this Agreement.
SECTION 10. NEGATION OF WARRANTIES BY SOUTHERN. Except as specifically set forth
in Section 9 of this Agreement, SOUTHERN hereby specifically disclaims all other
warranties, either express or implied, with respect to Controlled Release
Buprenorphine, including, without limitation, warranties of merchantability and
fitness for a particular purpose.
SECTION 11. REPRESENTATIONS AND WARRANTIES OF DAS. DAS represents and warranties
to SOUTHERN as follows:
SECTION 11.1 ORGANIZATION AND GOOD STANDING.
DAS is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California, with full corporate power
and authority to conduct its business as it is now being conducted, to own or
use the properties and assets that it purports to own or use, and to perform all
its obligations under this Agreement.
SECTION 11.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid,
and binding obligation of DAS, enforceable against DAS in accordance with its
terms. DAS has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and to perform its obligations
under this Agreement.
(b) The execution and delivery of this Agreement will
not directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the organizational documents of DAS, or (B)
any resolution adopted by the board of directors or the stockholders of DAS;
or
(ii) contravene, conflict with, or result in a
violation or breach of any provision of, or give any person the right to
declare a default or exercise any remedy under, or to accelerate the maturity
or performance of, or to cancel, terminate, or modify, any material agreement
to which DAS is bound.
DAS is not and or will not be required to give any notice to or obtain
any consent from any person in connection with the execution and delivery of
this Agreement.
SECTION 12. LIMITATION OF LIABILITY. DAS hereby agrees to release, waive, and
forever discharge any demands, claims, suits, or actions of any character
against SOUTHERN arising out of or in connection with DAS' commercialization of
Controlled Release Buprenorphine in the absence of any negligent or willful act
or omission by SOUTHERN in the fulfillment of its obligations under this
Agreement.
In no event shall either party be responsible or liable with respect to
any subject matter of this Agreement under contract, tort, strict liability or
other legal theory, for any special, indirect,
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
9
<PAGE>
incidental, or consequential damages such as, but not limited to, loss of
product, profits or revenues, damage or loss from operation or non-operation
of plant, or claims of customers.
SECTION 13. INDEMNITY. Subject to the terms of this paragraph, DAS hereby agrees
to indemnify, hold harmless, and defend SOUTHERN and its officers, directors,
representatives, agents, and employees from and against any and all demands,
claims, suits, or actions of any character (a "claim") presented or brought on
account of any injuries, losses, or damages sustained by any person or property
in consequence of any negligent act or omission of DAS or its agents, employees,
or subcontractors relating to Controlled Release Buprenorphine, except for any
injuries, losses, or damages that specifically result from the negligence or
willful misconduct of SOUTHERN, in the performance of the obligations imposed
herein. DAS' obligations hereunder are subject to SOUTHERN (i) cooperating with
DAS in such defense at DAS' expense, (ii) tendering to DAS the authority to
control and/or settle such claim (but SOUTHERN shall have the right to by
represented by counsel of its own choice and at its own expense), and (iii)
notifying DAS in writing within 15 days of first becoming aware of any such
claim, unless DAS is not prejudiced by later notification. The foregoing
indemnity shall include but not be limited to court costs, attorneys' fees,
costs of investigation, costs of defense associated with such demands, claims,
suits, or actions. [********]. In the event that inclusion of SOUTHERN does
increase the cost of such insurance by [********]. SOUTHERN shall then have
[********] days from the receipt of such notice to elect to require DAS to add
SOUTHERN as a beneficiary and reimburse DAS for the Excess Premium Amount.
During the time that Controlled Release Buprenorphine is introduced
into human trials or is being commercially distributed or sold by DAS or by a
Sub-licensee, Affiliate or agent of DAS, [********], to the extent that such
insurance is available to DAS at a cost reasonably related to the anticipated
risks and commensurate with DAS' reasonable assessment of the risk and its
ability to respond to damages. Any such [********] insurance shall provide (i)
[********] (ii) [********]. The amounts provided for by such insurance
[********].
[********] or evidence of DAS' attempts to obtain such insurance upon
written request of SOUTHERN [********].
SECTION 14. CONFIDENTIALITY.
SECTION 14.1 CONFIDENTIALITY OBLIGATION. During the Term of
this Agreement and for a period of five years thereafter, DAS and SOUTHERN shall
maintain in confidence all Confidential Information disclosed to it by the other
party. Neither DAS nor SOUTHERN will use, disclose or grant the use of such
Confidential Information except as expressly authorized by this Agreement. To
the extent that disclosure is authorized by this Agreement, the disclosing party
will obtain prior agreement from the party to whom disclosure is to be made, to
hold in confidence and not make use of such information for any purposes other
than those permitted by this Agreement. Each party will use at least the same
standard of care as it uses to protect its own proprietary and trade secret
information to insure that such employees, agents, consultants and investigators
do not disclose or make any unauthorized use of such Confidential Information.
Each party will promptly notify the other upon discovery of any unauthorized use
or disclosure of the Confidential Information.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
10
<PAGE>
SECTION 14.2 EXCEPTIONS. The obligations of confidentiality
contained in Section 14.1 will not apply to the extent that it can be
established by the receiving party by competent proof that such Confidential
Information:
(a) was already known to the receiving party,
other than under an obligation of confidentiality, at the time of disclosure by
the other party;
(b) was generally available to the public or
otherwise part of the public domain at the time of its disclosure by the other
party;
(c) became generally available to the public or
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
(d) was disclosed to the receiving party, other than
under an obligation of confidentiality, by a third-party lawfully in possession
of the information.
SECTION 14.3 AUTHORIZED DISCLOSURE. Each party may disclose
the Confidential Information to the extent such disclosure is reasonably
necessary in filing or prosecuting patent applications, prosecuting or defending
litigation, complying with applicable governmental laws or regulations, or
reasonably required by investors, potential vendors and potential sources of
financing, provided that if such party is required to make any such disclosure
of the Confidential Information it will to the extent commercially practicable
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 all diligent efforts to secure confidential treatment of such information
required to be disclosed to government authorities or by court order.
SECTION 15. TERMINATION.
SECTION 15.1 TERMINATION BY SOUTHERN. If DAS:
(a) Commits a breach of any of the material
provisions of this Agreement which is not cured by DAS within ninety (90) days
of the date on which SOUTHERN provides written notice to DAS of such breach; or
(b) Commences or has commenced against it any
proceeding under the Federal Bankruptcy Code, or any state law concerning
creditor relief, assignment for benefit of creditors, or appointment of a
receiver , which proceeding is not dismissed within 90 days of the date of
commencement, then SOUTHERN, to the extent permitted by law, shall have the
right, at SOUTHERN's sole election, to declare the exclusive licenses granted to
DAS in Section 2 of this Agreement terminated or to convert such licenses to
non-exclusive, such termination or conversion to be effective immediately upon
such declaration by SOUTHERN.
SECTION 15.2 TERMINATION BY DAS. DAS shall have the
right to terminate this Agreement upon ninety (90) days written notice to
SOUTHERN.
SECTION 15.3 CONSEQUENCES OF TERMINATION. If termination of
this Agreement occurs, all rights licensed to DAS hereunder shall revert to
SOUTHERN and neither party shall
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
11
<PAGE>
have any obligations to the other party, except for accrued obligations to
pay earned Running Royalties and other obligations hereof that expressly by
their terms survive termination; provided, however, that in no event will DAS
or any Sublicensee, transferee or assignee be precluded from disposing of its
inventory or meeting its then existing supply obligations. Notwithstanding
anything to the contrary, the following Sections shall survive termination:
8 - 14 and 16.
SECTION 16. GENERAL PROVISIONS.
SECTION 16.1 GOVERNING LAW. This Agreement shall be
governed by the internal laws of the State of Alabama.
SECTION 16.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement,
together with the Research Agreement represent the entire agreement between the
parties with respect to the subject matter hereof. This Agreement may only be
modified or amended in writing signed by both parties. In the event of a
conflict with respect to the licenses granted in this Agreement, the terms of
this Agreement shall prevail over the Research Agreement.
SECTION 16.3 NOTICES. Notices, payments, statements, reports
and other communications under this Agreement shall be in writing and shall be
effective on receipt if addressed as follows:
If for SOUTHERN:
Southern Research Institute
200 Ninth Avenue South
Birmingham, Alabama 35205
Attn: David W. Mason
Telephone: (205) 581-2389
Facsimile: (205) 581-2618
If for DAS:
Drug Abuse Sciences, Inc.
1430 O'Brien Drive, Suite E
Menlo Park, California 94025
Attn: Chief Executive Officer
Telephone: 650-426-1000
Fax: 650-462-1003
Either party may change its official address upon written notice to the other
party.
SECTION 16.4 NO WAIVER. Either party's failure to enforce any
provision or provisions of this Agreement shall not in any way be construed as a
waiver of any such provision or provisions, nor prevent that party thereafter
from enforcing each and every other provision of this Agreement. The rights
granted both parties herein are cumulative and shall not constitute a waiver of
either party's right to assert all other legal remedies available to it under
the circumstances.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
12
<PAGE>
SECTION 16.5 ASSIGNMENT. This Agreement may not be assigned or
otherwise transferred, nor, except as expressly provided hereunder, may any
right or obligation hereunder be assigned or transferred, by DAS without the
written consent of SOUTHERN; provided, however, that DAS may, without such
consent, assign this Agreement and its rights and obligations hereunder (a) in
connection with the transfer or sale of all or substantially all of DAS'
business, if such assets include substantially all of the assets relating to
DAS' performance of its obligations hereunder, (b) to a wholly-owned subsidiary
of DAS or one of its Affiliates or, (c) in the event of DAS' merger or
consolidation with another company at any time during the term of this
Agreement. Any purported assignment in violation of this Section 16.5 shall be
void. Any permitted assignee shall assume all obligations of its assignor under
this Agreement.
SECTION 16.6 TITLES AND SUBTITLES. The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
SECTION 16.7 COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which together shall be deemed an original,
but all of which together shall constitute one and the same instrument.
SECTION 16.8 DISPUTE RESOLUTION. If a dispute arises between
the parties relating to the interpretation or performance of this Agreement, the
parties agree to hold a meeting, attended by individuals with decision-making
authority regarding the dispute, to attempt in good faith to negotiate a
resolution of the dispute prior to pursuing other available remedies. If, within
30 days after such meeting, unless extended by mutual consent, the parties have
not succeeded in negotiating a resolution of the dispute, the parties agree to
hold another meeting, attended by individuals holding at least vice presidential
offices within their respective organizations, to again attempt in good faith to
negotiate a resolution of the dispute. If, within 30 days after such meeting,
unless extended by mutual consent, the parties have not succeeded in negotiating
a resolution of the dispute, such dispute shall be submitted to final and
binding arbitration under the then current Licensing Agreement Arbitration Rules
of the American Arbitration Association ("AAA"), with a panel of three
arbitrators in New York, New York. Such arbitrators shall be selected by mutual
agreement of the parties or, failing such agreement, shall be selected according
to the aforesaid AAA rules. The parties shall bear the costs of arbitration
equally unless the arbitrators, pursuant to their right, but not their
obligation, require the non-prevailing party to bear all or any unequal portion
of the prevailing party's costs. The decision of the arbitrators shall be final
and may be sued on or enforced by the party in whose favor it runs in any court
of competent jurisdiction at the option of the successful party. The arbitrators
will be instructed to prepare and deliver a written, reasoned opinion conferring
their decision. The rights and obligations of the parties to arbitrate any
dispute relating to the interpretation or performance of this Agreement or the
grounds for the termination thereof shall survive the expiration or termination
of this Agreement for any reason.
SECTION 16.9 FURTHER ASSURANCES. The parties agree (a) to
furnish upon request to each other such further information, (b) to execute and
deliver to each other such other documents, and (c) to do such other acts and
things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
13
<PAGE>
SECTION 16.10 SEVERABILITY. If any provision of this Agreement
is held invalid or unenforceable by any court of competent jurisdiction, the
other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.
SECTION 16.11 PUBLICITY. Except as required by law and in
connection with obtaining company financing, nothing contained in this Agreement
shall be construed as conferring any right to use in advertising, publicity, or
other promotional activities any name, trade name, trademark, or other
designation of SOUTHERN (including contraction, abbreviation or simulation of
any of the foregoing) without prior written approval.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above stated.
SOUTHERN RESEARCH INSTITUTE DRUG ABUSE SCIENCES, INC.
/s/ David W. Mason /s/ Philippe Pouletty
- ------------------------------------- -----------------------------------
Title: Assistant Secretary Director Title: Chief Executive Officer
Commercialization and Intellectual
Property
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
14
<PAGE>
EXHIBIT A
SOUTHERN/SOUTHERN PATENT RIGHTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SERIAL FILING PATENT PATENT DUE DATES/
COUNTRY NO. DATE NO. DATE STATUS
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
U. S. Applications
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S.A. 08/062,696 5/17/93 5,407,609 4/18/95 Issued; Current.
(expires
4/18/12)
- --------------------------------------------------------------------------------------------------------------------
U.S.A. 81,289 8/03/87 4,897,268 1/30/90 Issued; Current
- --------------------------------------------------------------------------------------------------------------------
U.S.A. 60-151112, 8/27/99 Applied For
- --------------------------------------------------------------------------------------------------------------------
PCT (designating Austria, PCT/US Published
Australia, Barbados, 9010/2439 5/2/90 - - 11/15/90; Inactive.
Bulgaria, Brazil, Canada,
Switzerland, Liechtenstein,
Germany, Denmark, Spain,
Finland, U.K., Hungary,
Japan, North Korea, South
Korea, SRI Lanka,
Luxembourg, Monaco,
Madagascar, Malawi,
Netherlands, Norway,
Romania, Sudan, Sweden,
Russian Federation, EP; OAPI)
- --------------------------------------------------------------------------------------------------------------------
Austria 90908830.4 5/02/90 0471036 01/17/96 Issued; Current.
(expires
5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Belgium 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/2/10)
- --------------------------------------------------------------------------------------------------------------------
Canada 2,050,911 5/02/90 2,050,911 7/15/97 Issued; Current.
(Nat'l Phase of PCT) (9/30/91-Nat'l (expires
Phase) 5/22/10)
- --------------------------------------------------------------------------------------------------------------------
Switzerland 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/2/10)
- --------------------------------------------------------------------------------------------------------------------
Germany 909088304 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/2/10)
- --------------------------------------------------------------------------------------------------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
E-1
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SERIAL FILING PATENT PATENT DUE DATES/
COUNTRY NO. DATE NO. DATE STATUS
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EP 90908830.4 5/02/90 Granted - National
(Nat'l Phase of PCT) (9/25/91-EP Phase applications
Nat'l Phase) filed in Austria,
Belgium,
Switzerland,
Germany, Denmark,
Spain, France,
United Kingdom,
Italy,
Liechtenstein,
Luxembourg,
Netherlands and
Sweden.
- --------------------------------------------------------------------------------------------------------------------
Spain 90908830.4 5/02/90 4071036 1/17/96 Issued; Current.
(expires
5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Finland 915129 5/2/90 Revised claims
(Nat'l Phase of PCT) (10/30/91-Nat'l filed 3/29/92.
Phase) Office Action
received. Response
to office action
filed 5/23/96.
- --------------------------------------------------------------------------------------------------------------------
France 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Great Britain 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Italy 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Japan 508473/90 5/02/90 2582116 11/21/96 Issued; Current.
(Nat'l Phase of PCT) (11/15/91-Nat'l (expires
Phase) 5/02/10)
- --------------------------------------------------------------------------------------------------------------------
South Korea 91-701573 5/02/90 162669 9/01/98 Issued; Current.
(Nat'l Phase of PCT) (10/31/91-Nat'l (expires
Phase) 0/01/13)
- --------------------------------------------------------------------------------------------------------------------
Luxembourg 90908830.4 5/02/90 0471016 1/17/96 Issued; Current.
(expires
5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Hong Kong 90908830.4 (EP) 5/03/90 0,471,836 (HK 1/17/96 Issued; Current.
# 308/1997)
- --------------------------------------------------------------------------------------------------------------------
Singapore 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(EP) 0471036 (EP) (expires
(SG) 97909105 5/02/10)
(SG)
- --------------------------------------------------------------------------------------------------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
E-2
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SERIAL FILING PATENT PATENT DUE DATES/
COUNTRY NO. DATE NO. DATE STATUS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Netherlands 90908810.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Norway 91.4292 5/2/90 302.683 4/14/98 Issued; Current.
(Nat'l Phase of PCT) (11/1/91-Nat'l (expires
Phase) 5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Sweden 90908830.4 5/02/90 0471036 1/17/96 Issued; Current.
(expires
5/02/10)
- --------------------------------------------------------------------------------------------------------------------
Non-PCT Convention Applications
- --------------------------------------------------------------------------------------------------------------------
China 90194260.9 5/04/90 _ _ Application
withdrawn 11/91
per instructions
from SRI.
- --------------------------------------------------------------------------------------------------------------------
Greece 90.01.00330 5/03/90 1000614 3/04/92 Issued; Current.
(expires
5/03/10)
- --------------------------------------------------------------------------------------------------------------------
Ireland 1616/90 5/03/90 09313 8/12/96 Issued; Current
(expires
5/03/10)
- --------------------------------------------------------------------------------------------------------------------
Israel 347476 5/04/90 94296 2/01/96 Issued; Current.
(expires
5/04/10)
- --------------------------------------------------------------------------------------------------------------------
New Zealand 233570 5/04/90 233570 5/04/90 Issued; Current.
(expires
5/04/10)
- --------------------------------------------------------------------------------------------------------------------
South Africa 90/3411 5/04/90 90/3411 2/27/91 Issued; Current.
(expires
5/04/10)
- --------------------------------------------------------------------------------------------------------------------
India 341/MAS/ 90 5/04/90 173577 1/06/95 Inactive.
(expires
5/04/97)
- --------------------------------------------------------------------------------------------------------------------
Taiwan 79103694 5/07/90 50062 7/11/91 Issued; Current.
(expires
7/11/06)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
E-3
<PAGE>
EXHIBIT 10.14
LICENSE AGREEMENT
by and between
THE SCRIPPS RESEARCH INSTITUTE,
a California nonprofit
public benefit corporation
and
DRUG ABUSE SCIENCES,
a California corporation
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. Definitions................................................................................................1
1.1 Affiliate.........................................................................................1
1.2 Confidential Information..........................................................................2
1.3 Field.............................................................................................2
1.4 Licensed Product..................................................................................2
1.5 Net Sales.........................................................................................2
1.6 Scripps Patent Rights.............................................................................2
1.7 Scripps Technology................................................................................3
2. License Terms and Conditions...............................................................................3
2.1 Grant of License..................................................................................3
2.2 Initial License Fee...............................................................................3
2.3 Milestone Issuances of Stock......................................................................3
2.4 Royalties.........................................................................................3
2.4.1 Percentage Royalty.......................................................................3
2.5 Combination Products..............................................................................4
2.5.1 Definition of Combination Product........................................................4
2.5.2 Royalty Payable on Combination Products..................................................4
2.5.3 Third Party Royalty......................................................................4
2.6 Quarterly Payments................................................................................4
2.7 Term of License...................................................................................5
2.8 Sublicense........................................................................................5
2.9 Duration of Royalty Obligations...................................................................5
2.10 Reports...........................................................................................6
2.11 Records...........................................................................................6
2.12 Foreign Sales.....................................................................................6
2.13 Foreign Taxes.....................................................................................6
3. Patent Matters.............................................................................................6
3.1 Patent Prosecution and Maintenance................................................................6
3.2 Information to Licensee...........................................................................7
3.3 Patent Costs......................................................................................7
3.4 Ownership.........................................................................................7
3.5 Scripps Right to Pursue Patent....................................................................7
3.6 Infringement Actions..............................................................................8
3.6.1 Prosecution and Defense of Infringements.................................................8
3.6.2 Allocation of Recovery...................................................................8
4. Obligations Related to Commercialization...................................................................8
4.1 Commercial Development Obligation.................................................................8
4.2 Governmental Approvals and Marketing of Licensed Products.........................................9
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4.3 Indemnity.........................................................................................9
4.4 Patent Marking....................................................................................9
4.5 No Use of Name....................................................................................9
4.6 U.S. Manufacture..................................................................................9
4.7 Foreign Registration.............................................................................10
5. Limited Warranty..........................................................................................10
6. Interests in Intellectual Property Rights.................................................................10
6.1 Preservation of Title............................................................................10
6.2 Royalty-free License to Improvements.............................................................10
6.3 Governmental Interest............................................................................10
6.4 Reservation of Rights............................................................................10
7. Confidentiality and Publication...........................................................................11
7.1 Treatment of Confidential Information............................................................11
7.2 Publications.....................................................................................11
7.3 Publicity........................................................................................11
8. Term and Termination......................................................................................11
8.1 Term.............................................................................................11
8.2 Termination Upon Default.........................................................................11
8.3 Termination Upon Bankruptcy or Insolvency........................................................12
8.4 Rights Upon Expiration...........................................................................12
8.5 Rights Upon Termination..........................................................................12
8.6 Work-in-Progress.................................................................................12
9. Assignment; Successors....................................................................................12
9.1 Assignment.......................................................................................12
9.2 Binding Upon Successors and Assigns..............................................................13
10. General Provisions........................................................................................13
10.1 Independent Contractors..........................................................................13
10.2 Arbitration......................................................................................13
10.2.1 Location................................................................................13
10.2.2 Selection of Arbitrators................................................................13
10.2.3 Discovery...............................................................................13
10.2.4 Case Management.........................................................................13
10.2.5. Remedies................................................................................14
10.2.6 Expenses................................................................................14
10.2.7 Confidentiality.........................................................................14
10.3 Entire Agreement; Modification...................................................................14
10.4 California Law...................................................................................14
10.5 Headings.........................................................................................14
10.6 Severability.....................................................................................14
10.7 No Waiver........................................................................................15
10.8 Name.............................................................................................15
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10.9 Attorneys'Fees...................................................................................15
10.10 Notices..........................................................................................15
10.11 Compliance with U.S. Laws........................................................................15
</TABLE>
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CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
LICENSE AGREEMENT
This License Agreement is entered into and made effective
as of this 18th day of June, 1996, by and between THE SCRIPPS RESEARCH
INSTITUTE, nonprofit public benefit corporation ("Scripps") located at 10550
North Torrey Pines Road, La Jolla, California 92037, and Drug Abuse Sciences,
a California corporation ("Licensee") located at 3 O'Dell Place, Atherton,
California 94027, with respect to the facts set forth below.
RECITALS
A. Scripps is engaged in fundamental scientific
biomedical and biochemical research including research relating to
Cocaine-Specific Monoclonal Antibodies: Hapten Design, Synthesis and
Immunization.
B. Licensee is engaged in research and development of
therapeutics and diagnostics for cocaine addiction.
C. Scripps has disclosed to Licensee certain technology
described in TSRI Technology Disclosure #92-05 entitled "Cocaine-Specific
Monoclonal Antibodies: Hapten Design, Synthesis and Immunization," as shell as
the Scripps patent application entitled "Anti-Cocaine Vaccine" (Scripps #507.0),
copies of which are attached hereto as Exhibit A and incorporated herein by
reference (collectively, the "Technology Disclosure").
D. Scripps has the exclusive right to grant a license to
the technology described in the Technology Disclosure, subject to certain rights
of the U.S. Government to use such technology for its own purposes, resulting
from the receipt by Scripps of certain funding from the U.S. Government.
E. Scripps desires to grant to Licensee, and Licensee
wishes to acquire, an exclusive worldwide right and license to the technology
described in the Technology Disclosure and to certain patent rights and know-how
of Scripps with respect thereto, subject to the terms and conditions set forth
herein, with a view to developing and marketing diagnostic and/or therapeutic
products within the Field (as defined below).
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, Scripps and Licensee hereby agree as follows:
1. DEFINITIONS. Capitalized terms shall have the
meaning set forth below.
1.1 AFFILIATE. The term "Affiliate" shall mean
any entity which directly or indirectly controls, is controlled by or is under
common control with Licensee. The term "control" as used herein means the
possession of the power to direct or cause the direction of the management and
the policies of an entity, whether through the ownership of a majority of the
outstanding voting securities or by contract or otherwise.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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1.2 CONFIDENTIAL INFORMATION. The term
"Confidential Information" shall mean any and all proprietary or confidential
information of Scripps or Licensee which may be exchanged between the parties at
any time and from time to time during the term of this Agreement. Information
shall not be considered confidential to the extent that it:
a. Is publicly disclosed through no
fault of any party hereto, either before or after it becomes known to the
receiving party; or
b. Was known to the receiving party
prior to the date of this Agreement, which knowledge was acquired independently
and not from another party hereto (or such party's employees); or
c. Is subsequently disclosed to the
receiving party in good faith by a third party who has a right to make such
disclosure; or
d. Has been published by a third party as a
matter of right.
1.3 FIELD. The term "Field" shall mean the
field of the diagnosis and treatment of cocaine addiction and shall specifically
exclude any agricultural applications or products.
1.4 LICENSED PRODUCT. The term
"Licensed Product" shall mean any product which cannot be developed,
manufactured, used or sold without (i) infringing one or more claims under
Scripps Patent Rights or (ii) utilizing any part of Scripps Technology not
otherwise includable within Scripps Patent Rights.
1.5 NET SALES. The term "Net Sales" shall mean
the gross amount invoiced by Licensee, or its Affiliates and sublicensees, or
any of them, on all sales of Licensed Products, less (i) discounts actually
allowed, (ii) credits for claims, allowances, retroactive price reductions or
returned goods, (iii) prepaid freight and (iv) sales taxes or other governmental
charges actually paid in connection with sales of Licensed Products (but
excluding what is commonly known as income taxes). For purposes of determining
Net Sales, a sale shall be deemed to have occurred when an invoice therefor
shall be generated or the Licensed Product shipped for delivery. Sales of
Licensed Products by Licensee, or an Affiliate or sublicensee of Licensee to any
Affiliate or sublicensee which is a reseller thereof shall be excluded, and only
the subsequent sale of such Licensed Products by Affiliates or sublicensees of
Licensee to unrelated parties shall be deemed Net Sales hereunder.
1.6 SCRIPPS PATENT RIGHTS. The "Scripps Patent
Rights" shall mean rights arising out of or resulting from (i) any and all U.S.
and foreign patent applications and patents covering Scripps Technology, (ii)
the patents proceeding from such applications, (iii) all claims of
continuations-in-part directed solely to subject matter specifically described
in the Technology Disclosure, and (iv) divisionals, continuations, reissues,
reexaminations, and extensions of any patent or application set forth in
(i)-(iii) above, so long as said patents have not been held invalid and/or
unenforceable by a court of competent jurisdiction from which there is no appeal
or, if appealable, from which no appeal has been taken.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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<PAGE>
1.7 SCRIPPS TECHNOLOGY. The term "Scripps
Technology" shall mean so much of the technology as is proprietary to Scripps
disclosed in the Technology Disclosure, together with materials, information and
know-how related thereto whether or not the same is eligible for protection
under the patent laws of the United States or elsewhere, and whether or not any
such processes and technology, or information related thereto, would be
enforceable as a trade secret or the copying of which would be enjoined or
restrained by a court as constituting unfair competition.
2. LICENSE TERMS AND CONDITIONS.
2.1 GRANT OF LICENSE. Scripps hereby grants
to Licensee an exclusive, worldwide license, including the right to
sublicense, to Scripps Technology and under Scripps Patent Rights, to make,
to have made, to use, and to sell Licensed Products in the Field, subject to
the terms of this Agreement.
2.2 INITIAL LICENSE FEE. In partial
consideration for the exclusive license granted pursuant to Section 2.1 hereof,
Licensee shall pay to Scripps a nonrefundable license fee upon execution of this
Agreement in the amount of [***]. In addition, pursuant to a Common Stock
Purchase Agreement in substantially the form attached hereto as Exhibit B and
incorporated herein by this reference (a "Common Stock Purchase Agreement"),
promptly after the effective date hereof, Licensee shall issue to Scripps
(subject to the terms and conditions of the Common Stock Purchase Agreement and
conditioned upon such issuance being exempt from any federal or state securities
registration requirements) 110,765 shares of Licensee's Nonvoting Common Stock
(the "Shares"). The license fee described in this Section is consideration for
the grant and continuation of the license hereunder, and Scripps shall have no
obligation to return any portion of such license fee, notwithstanding any
failure by Licensee to develop any Licensed Product or market any Licensed
Product commercially, and notwithstanding the volume of sales of any such
Licensed Product.
2.3 MILESTONE ISSUANCES OF STOCK. Pursuant to a
Common Stock Purchase Agreement in substantially the form attached hereto as
Exhibit B, and in addition to the other consideration set forth in this Article
2 for the exclusive license granted pursuant to Section 2.1 hereof, Licensee
shall issue to Scripps (subject to the terms and conditions of the Common Stock
Purchase Agreement and conditioned such issuance being exempt from any federal
or state securities registration requirements) shares of Licensee's Nonvoting
Common Stock (or, if any such issuance shall occur after the closing of an
initial public offering of Licensee's Common Stock pursuant to a Registration
Statement filed under the Securities Act of 1933, shares of such Common Stock)
as follows: (i) 166,148 shares upon the filing of an investigational new drug
application ("IND") for an efficacy clinical trial sponsored by Licensee or its
Sublicensee with the U.S. Food and Drug Administration in respect of a Licensed
Product and (ii) 166,148 shares upon demonstration of human clinical efficacy
for a primary end point in a Phase clinical trial sponsored by Licensee or its
Sublicensee in respect of a Licensed Product.
2.4 ROYALTIES.
2.4.1 PERCENTAGE ROYALTY. As additional
consideration for the exclusive license granted pursuant to Section 2.1 hereof,
Licensee shall pay to Scripps a [***] on
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3
<PAGE>
a country-by-country basis in the amount of (i) [***] which cannot be made,
used or sold in such country without utilizing one or more valid claims under
Scripps Patent Rights and (ii) [***].
2.5 COMBINATION PRODUCTS.
2.5.1 DEFINITION OF COMBINATION PRODUCT.
As used herein, the term "Combination Product" shall mean a Licensed Product
which cannot be manufactured, used or sold without infringing Scripps Patent
Rights, utilizing Scripps Technology licensed hereunder, infringing or utilizing
one or more patents or proprietary technology or know-how of (i) Licensee, (ii)
a third party licensed pursuant to an agreement between Licensee and such third
party, or (iii) Scripps under a license agreement other than this Agreement
(referred to herein as "other licensed rights").
2.5.2 ROYALTY PAYABLE ON COMBINATION
PRODUCTS. The royalty payable on Combination Products shall be the royalty rate
set forth in Section 2.2.1 above based on a pro rata portion of Net Sales of
Combination Products in accordance with the following formula:
A
X = -
B, where
X = the pro rata portion of Net Sales
attributable to Scripps Patent Rights or other
Scripps Technology licensed herein (expressed as a
percentage), and
A = the fair market value of the component
in the Combination Product utilizing Scripps
Technology licensed hereunder, and
B = A plus the fair market value of all
other components in the Combination Product using
other licensed rights.
2.5.3 THIRD PARTY ROYALTY. In the event
that Licensee is required to pay a third party a royalty in order to enjoy the
benefits of its license under this Agreement, the parties shall negotiate a
reasonable deduction in the royalties owed under Section 2.4 to offset the third
party royalty, but in no event shall the deduction be greater than [***] of the
applicable royalty set forth in Section 2.4.
The fair market values described above shall be determined by the parties hereto
in good faith. In the absence of agreement as to the fair market value of all of
the components contained in a Combination Product, the fair market value of each
component shall be determined by arbitration in accordance with the provisions
of Section 10.2 hereof.
2.6 QUARTERLY PAYMENTS.
2.6.1 SALES BY LICENSEE. With regard to
Net Sales made by Licensee or its Affiliates, royalties shall be payable by
Licensee [***], based upon the Net Sales
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4
<PAGE>
of Licensed Products during such preceding calendar quarter, commencing with
the calendar quarter in which the first commercial sale of any Licensed
Product is made.
2.6.2 SALES BY SUBLICENSEES. With regard
to Net Sales made by sublicensees of Licensee or its Affiliates, royalties shall
be payable by Licensee quarterly, within ninety (90) days after the end of each
calendar quarter, based upon the Net Sales of Licensed Products by such
sublicensee during such preceding calendar quarter, commencing with the calendar
quarter in which the first commercial sale of any Licensed Product is made by
such sublicensee.
2.7 TERM OF LICENSE. Unless terminated sooner
in accordance with the provisions of this Agreement, the term of this license
shall expire when the last of the royalty obligations set forth has expired.
Notwithstanding the foregoing, if applicable government regulations require a
shorter term and/or a shorter term of exclusivity than provided for herein, then
the term of this License Agreement shall be so shortened or this License
Agreement shall be amended to provide for a non-exclusive license, and, in such
event, the parties shall negotiate in good faith to reduce appropriately the
royalties payable as set forth under the section heading "Royalties" hereof.
2.8 SUBLICENSE. Licensee shall have the sole
and exclusive right to grant sublicenses to any party with respect to the rights
conferred upon Licensee under this Agreement, provided, however, that (i) any
such sublicense shall be subject in all respects to the restrictions,
exceptions, royalty obligations, reports, termination provisions, and other
provisions contained in this Agreement (but not including the payment of a
license fee pursuant to Section 2.2 hereof) and (ii) each such sublicensee, and
the form and substance of each such sublicense, shall be subject to the prior
written approval of Scripps, which approval shall not be unreasonably withheld,
provided, however, that any sublicense granted to an Affiliate of Licensee shall
not be subject to Scripps's prior written approval. No approval shall be
required as to any sublicense which utilizes the form of sublicense attached
hereto as Exhibit C. Licensee shall pay Scripps, or cause its Affiliate or
sublicensee to pay Scripps, the same royalties on all Net Sales of such
Affiliate or sublicensee the same as if said Net Sales had been made by
Licensee. Each Affiliate and sublicensee shall report its Net Sales to Scripps
through Licensee, which Net Sales shall be aggregated with any Net Sales of
Licensee for purposes of determining the Net Sales upon which royalties are to
be paid to Scripps.
Except as set forth below, any revenues, other than royalties,
due Licensee pursuant to the grant of a sublicense to a party not an Affiliate
shall be reported to Scripps by Licensee. Licensee shall pay to Scripps [***] of
any such revenue, where such license is a bare patent license. As to all fees
other than for a bare patent license, the amount paid Scripps shall be
negotiated, based on the respective contributions of the parties. In no event
shall reasonable fees for performing research by Licensee be included in any
determination of the revenues to be due Scripps.
2.9 DURATION OF ROYALTY OBLIGATIONS. The
royalty obligations of Licensee as to each Licensed Product shall terminate on a
[***] utilized by or in such Licensed Product in each such country or, with
respect to Licensed Products not utilizing any Scripps Patent Rights, the [***].
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5
<PAGE>
2.10 REPORTS. Licensee shall furnish to Scripps
at the same time as each royalty payment is made by Licensee, a detailed written
report of Net Sales of the Licensed Products and the royalty due and payable
thereon, including a description of any offsets or credits deducted therefrom,
on a product-by-product and country-by-country basis, for the calendar quarter
upon which the royalty payment is based.
2.11 RECORDS. Licensee shall keep, and cause its
Affiliates and sublicensees to keep, full, complete and proper records and
accounts of all sales of Licensed Products in sufficient detail to enable the
royalties payable on Net Sales of each Licensed Product to be determined.
Scripps shall have the right to appoint an independent certified public
accounting firm approved by Licensee, which approval shall not be unreasonably
withheld, to audit the records of Licensee, its Affiliates and sublicensees as
necessary to verify the royalties payable pursuant to this Agreement. Licensee,
its Affiliates and sublicensees shall pay to Scripps an amount equal to any
additional royalties to which Scripps is entitled as disclosed by the audit,
[***]. Such audit shall be at Scripps's expense; provided however, that if the
audit discloses that Scripps was underpaid royalties with respect to any
Licensed Product by [***] for any calendar quarter, then Licensee, its
Affiliates or sublicensee, as the case may be shall reimburse Scripps for any
such audit costs. Scripps may exercise its right of audit as to each of
Licensee, its Affiliates or sublicensees no more frequently than once in any
calendar year. The accounting firm shall disclose to Scripps only information
relating to the accuracy of the royalty payments. Licensee, its Affiliates and
sublicensees shall preserve and maintain all such records required for audit for
a period of three (3) years after the calendar quarter to which the record
applies.
2.12 FOREIGN SALES. The remittance of royalties
payable on sales outside the United States shall be payable to Scripps in United
States Dollar equivalents at the official rate of exchange of the currency of
the country from which the royalties are payable, as quoted in the Wall Street
Journal for the last business day of the calendar quarter in which the royalties
are payable. If the transfer of or the conversion into the United States Dollar
equivalents of any such remittance in any such instance is not lawful or
possible, the payment of such part of the royalties as is necessary shall be
made by the deposit thereof, in the currency of the county where the sale was
made on which the royalty was based to the credit and account of Scripps or its
nominee in any commercial bank or trust company of Scripps's choice located in
that country, prompt written notice of which shall be given by Licensee to
Scripps.
2.13 FOREIGN TAXES. Any tax required to be
withheld by Licensee under the laws of any foreign country for the accounts of
Scripps shall be promptly paid by Licensee for and on behalf of Scripps to the
appropriate governmental authority, and Licensee shall use its best efforts to
furnish Scripps with proof of payment of such tax together with official or
other appropriate evidence issued by the applicable government authority. Any
such tax actually paid on Scripps's behalf shall be deducted from royalty
payments due Scripps.
3. PATENT MATTERS.
3.1 PATENT PROSECUTION AND MAINTENANCE. From
and after the date of this Agreement, the provisions of this Section 3 shall
control the prosecution and maintenance of any patent included within Scripps
Patent Rights. Subject to the requirements, limitations and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6
<PAGE>
conditions set forth in this Agreement, Scripps shall direct and control (i)
the preparation, filing and prosecution of the United States and foreign
patent applications within Scripps Patent Rights (including any interferences
and foreign oppositions), except that Licensee shall not be liable for
expenses related to foreign patent applications, which foreign patent
applications have not received Licensee's approval for filing and continued
prosecution, and (ii) maintain the patents issuing therefrom. Scripps shall
select the patent attorney, subject to Licensee's written approval, which
approval shall not be unreasonably withheld. Both parties hereto agree that
Scripps may, at its sole discretion, utilize Scripps Office of Patent Counsel
in lieu of outside counsel for patent prosecution and maintenance described
herein, and the fees and expenses incurred by Scripps with respect to work
done by such Office of Patent Counsel shall be paid as set forth below.
Licensee shall have full rights of consultation with the patent attorney so
selected on all matters relating to Scripps Patent Rights. Scripps shall use
its best efforts to implement all reasonable requests made by Licensee with
regard to the preparation, filing, prosecution and/or maintenance of the
patent applications and/or patents within Scripps Patent Rights.
3.2 INFORMATION TO LICENSEE. Scripps shall
keep Licensee informed with regard to the patent application and maintenance
processes. Scripps shall deliver to Licensee copies of all patent
applications, amendments, related correspondence, and other related matters.
3.3 PATENT COSTS. Licensee acknowledges and
agrees that Scripps does not have independent funding to cover patent costs,
and that the license granted hereunder is in part in consideration for
Licensee's assumption of patent costs and expenses as described herein.
Licensee shall pay for all expenses incurred by Scripps pursuant to Section
3.1 hereof. In addition, Licensee agrees to reimburse Scripps for all patent
costs and expenses paid or incurred by Scripps to date in connection with
Scripps Patent Rights licensed hereunder. Licensee agrees to pay all such
past and future patent expenses directly or to reimburse Scripps for the
payment of such expenses within sixty (60) days after Licensee receives an
itemized invoice therefor. In the event Licensee elects to discontinue
payment for the filing, prosecution and/or maintenance of any patent
application and/or patent within Scripps Patent Rights, any such patent
application or patent shall be excluded from the definition of Scripps Patent
Rights and from the scope of the license granted under this Agreement, and
all rights relating thereto shall revert to Scripps and may be freely
licensed by Scripps. Licensee shall give Scripps at least sixty (60) days'
prior written notice of such election. No such notice shall have any effect
on Licensee's obligations to pay expenses incurred up to the effective date
of such election.
3.4 OWNERSHIP. The patent applications filed
and the patents obtained by Scripps pursuant to Section 3.1 hereof shall be
owned solely by Scripps, assigned to Scripps and deemed a part of Scripps
Patent Rights.
3.5 SCRIPPS RIGHT TO PURSUE PATENT. If at
any time during the term of this Agreement, Licensee's rights with respect to
Scripps Patent Rights are terminated, Scripps shall have the right to take
whatever action Scripps deems appropriate to obtain or maintain the
corresponding patent protection at its own expense. If Scripps pursues
patents under this Section 3.5, Licensee agrees to entertain any request by
Scripps to cooperate in the prosecution
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7
<PAGE>
of such patents, including by providing, at no charge to Scripps, all
appropriate technical data and executing all necessary legal documents.
3.6 INFRINGEMENT ACTIONS.
3.6.1 PROSECUTION AND DEFENSE OF
INFRINGEMENTS. Except as provided herein, in order to maintain the license
granted hereunder in force, Licensee shall prosecute any and all
infringements of any Scripps Patent Rights and shall defend all charges of
infringement arising as a result of the exercise of Scripps Patent Rights by
Licensee, its Affiliates or sublicensees, unless otherwise agreed to between
Scripps and Licensee and Licensee shall hold Scripps harmless from any costs
or expenses of liability respecting all such infringements. Licensee may
enter into settlements, stipulated judgments or other arrangements respecting
such infringement, at its own expense, but only with the prior written
consent of Scripps, which consent shall not be unreasonably withheld. Scripps
shall permit any action to be brought in its name if required by law. Scripps
agrees to provide reasonable assistance of a technical nature which Licensee
may require in any litigation arising in accordance with the provisions of
this Section 3.6.1, for which Licensee shall pay to Scripps a reasonable
hourly rate of compensation. In the event Licensee fails to prosecute any
such infringement, Licensee shall notify Scripps in writing promptly and
Scripps shall have the right to prosecute such infringement on its own
behalf. Failure on the part of Licensee to prosecute any such infringement
shall be grounds for termination of the license granted to Licensee hereunder
(but solely with respect to the patent at issue, which, with respect to the
country in which such infringement occurs, shall thereafter be excluded from
the definition of Scripps Patent Rights) at the option of Scripps, unless
Licensee shall have established to Scripps reasonable satisfaction that such
prosecution would be unwarranted or unreasonable in view of the likelihood of
success, the costs of prosecution, the amount of any anticipated recovery, or
the economic impact of the infringement.
3.6.2 ALLOCATION OF RECOVERY. Any
damages or other recovery from an infringement action undertaken by Licensee
pursuant to Section 3.6.1 shall first be used to reimburse the parties for
the costs and expenses incurred in such action, and shall thereafter be
allocated between the parties as follows: [***]. If Licensee fails to
prosecute any such action to completion, then any damages or other recovery
net of the parties' costs and expenses incurred in such infringement action
shall be the sole property of Scripps.
4. OBLIGATIONS RELATED TO COMMERCIALIZATION.
4.1 COMMERCIAL DEVELOPMENT OBLIGATION. In
order to maintain the license granted hereunder in force, Licensee shall use
reasonable efforts and due diligence to develop Scripps Technology and
Scripps Patent Rights which are licensed hereunder into commercially viable
Licensed Products, as promptly as is reasonably and commercially feasible,
and thereafter to produce and sell reasonable quantities of Licensed
Products. Licensee shall keep Scripps generally informed as to Licensee's
progress in such development, production and sale, including its efforts, if
any, to sublicense Scripps Technology and Scripps Patent Rights, and Licensee
shall deliver to Scripps an annual written report and such other reports as
Scripps may reasonably request. The parties hereto acknowledge and agree to
negotiate milestones on an annual basis, beginning with the effective date of
this Agreement, for the proceeding year, and said milestones shall be
incorporated into this Agreement as Exhibit D; however, in this regard,
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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<PAGE>
Scripps hereby acknowledges that Licensee is an early-stage technology
company and Scripps Technology is in an early stage of development and that
milestones will be established accordingly. The achievement of the milestones
described in Exhibit D attached hereto on or before the dates set forth
therein shall be evidence of compliance by Licensee with its commercial
development obligations hereunder for the time periods specified in Exhibit
D. In the event Scripps has a reasonable basis to believe that Licensee is
not using reasonable efforts and due diligence as required hereunder, upon
notice by Scripps to Licensee which specifies the basis for such belief,
Scripps and Licensee shall negotiate in good faith to attempt to mutually
resolve the issue. In the event Scripps and Licensee cannot agree upon any
matter related to Licensee's commercial development obligations, the parties
agree to utilize arbitration pursuant to Section 10.2 hereof in order to
resolve the matter. If the arbitrator determines that Licensee has not
complied with its obligations hereunder, and such default is not fully cured
within sixty (60) days after the arbitrator's decision, Scripps may terminate
Licensee's rights under this Agreement.
4.2 GOVERNMENTAL APPROVALS AND MARKETING OF
LICENSED PRODUCTS. Licensee shall be responsible for obtaining all necessary
governmental approvals for the development, production, distribution, sale
and use of any Licensed Product, at Licensee's expense, including, without
limitation, any safety studies. Licensee shall have sole responsibility for
any warning labels, packaging and instructions as to the use of Licensed
Products and for the quality control for any Licensed Product.
4.3 INDEMNITY. Licensee hereby agrees to
indemnify, defend and hold harmless Scripps and any parent, subsidiary or
other affiliated entity and their trustees, officers, employees, scientists
and agents from and against any liability or expense arising from any product
liability claim asserted by any party as to any Licensed Product or any
claims arising from the use of any Scripps Patent Rights or Scripps
Technology pursuant to this Agreement. Such indemnity and defense obligation
shall apply to any product liability or other claims, including without
limitation, personal injury, death or property damage, made by employees,
subcontractors, sublicensees, or agents of Licensee, as well as any member of
the general public. Licensee shall use its best efforts to have Scripps and
any parent, subsidiary or other affiliated entity and their trustees,
officers, employees, scientists and agents named as additional insured
parties on any product liability insurance policies maintained by Licensee,
its Affiliates and sublicensees applicable to Licensed Products.
4.4 PATENT MARKING. To the extent required
by applicable law, Licensee shall mark all Licensed Products or their
containers in accordance with the applicable patent marking laws.
4.5 NO USE OF NAME. The use of the name "The
Scripps Research Institute", "Scripps", or any variation thereof in
connection with the advertising or sale of Licensed Products is expressly
prohibited.
4.6 U.S. MANUFACTURE. To the extent required
by applicable United States laws, if at all, Licensee agrees that Licensed
Products will be manufactured in the United States, or its territories,
subject to such waivers as may be required, or obtained, if at all, from the
United States Department of Health and Human Services, or its designee.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
9
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4.7 FOREIGN REGISTRATION. Licensee agrees to
register this Agreement with any foreign governmental agency which requires
such registration, and Licensee shall pay all costs and legal fees in
connection therewith. In addition, Licensee shall assure that all foreign
laws affecting this Agreement or the sale of Licensed Products are fully
satisfied.
5. LIMITED WARRANTY. Scripps hereby represents and
warrants that it has full right and power to enter into this Agreement.
SCRIPPS MAKES NO OTHER WARRANTIES CONCERNING SCRIPPS PATENT RIGHTS OR SCRIPPS
TECHNOLOGY COVERED BY THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, ANY
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AS TO SCRIPPS PATENT RIGHTS, SCRIPPS TECHNOLOGY OR ANY LICENSED
PRODUCT. SCRIPPS MAKES NO WARRANTY OR REPRESENTATION AS TO THE VALIDITY OR
SCOPE OF SCRIPPS PATENT RIGHTS, OR THAT ANY LICENSED PRODUCT WILL BE FREE
FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF
THIRD PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING SCRIPPS
PATENT RIGHTS OR SCRIPPS TECHNOLOGY COVERED BY THIS AGREEMENT.
6. INTERESTS IN INTELLECTUAL PROPERTY RIGHTS.
6.1 PRESERVATION OF TITLE. Scripps shall
retain full ownership and title to Scripps Technology, and Scripps Patent
Rights licensed hereunder and shall use its reasonable best efforts to
preserve and maintain such full ownership and title, subject to Licensee
fully performing all of its obligations under this Agreement.
6.2 ROYALTY-FREE LICENSE TO IMPROVEMENTS.
Licensee hereby grants to Scripps a non-exclusive, royalty-free license to
any improvement to Scripps Technology developed by Licensee, to use for its
own non-commercial research purposes or grant to other nonprofit institutions
for their non-commercial research purposes, it being understood that Licensee
has no duty to disclose to Scripps any such improvements and in the event of
an inadvertent disclosure, such disclosure shall be governed by the
restrictions as set forth in Section 7.1 Treatment of Confidential
Information.
6.3 GOVERNMENTAL INTEREST. Licensee and
Scripps acknowledge that Scripps has received, and expects to continue to
receive, funding from the United States Government in support of Scripps's
research activities. Licensee and Scripps acknowledge and agree that their
respective rights and obligations pursuant to this Agreement shall be subject
to Scripps's obligations and the rights of the United States Government, if
any, which arise or result from Scripps's receipt of research support from
the United States Government, including without limitation, the grant by
Scripps to the United States a non-exclusive, irrevocable, royalty-free
license to Scripps Technology and Scripps Patent Rights licensed hereunder
for governmental purposes.
6.4 RESERVATION OF RIGHTS. Scripps reserves
the right to use for any non-commercial research purposes and the right to
allow other nonprofit institutions to use for any non-commercial research
purposes any Scripps Technology and Scripps Patent Rights
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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licensed hereunder, without Scripps or such other institutions being
obligated to pay Licensee any royalties or other compensation.
7. CONFIDENTIALITY AND PUBLICATION.
7.1 TREATMENT OF CONFIDENTIAL INFORMATION.
The parties agree that during the term of this Agreement, and for a period of
three (3) years after this Agreement terminates, a party receiving
Confidential Information of the other party will (i) maintain in confidence
such Confidential Information to the same extent such party maintains its own
proprietary industrial information, (ii) not disclose such Confidential
Information to any third party without prior written consent of the other
party and (iii) not use such Confidential Information for any purpose except
those permitted by this Agreement.
7.2 PUBLICATIONS. Licensee agrees that
Scripps shall have a right to publish in accordance with its general
policies, subject to the confidential commitments of Section 7.1 Treatment of
Confidential Information, which shall not be overridden by this Section.
7.3 PUBLICITY. Except as otherwise provided
herein or required by law, no party shall originate any publication, news
release or other public announcement, written or oral, whether in the public
press, stockholders' reports, or otherwise, relating to this Agreement or to
any sublicense hereunder, or to the performance hereunder or any such
agreements, without the prior written approval of the other party, which
approval shall not be unreasonably withheld. Scientific publications
published in accordance with Section 7.2 of this Agreement shall not be
construed as publicity governed by this Section 7.3.
8. TERM AND TERMINATION.
8.1 TERM. Unless terminated sooner in accordance
with the terms set forth herein, this Agreement, and the license granted
hereunder, shall terminate as provided in Section 2.6 hereof.
8.2 TERMINATION UPON DEFAULT. Any one or
more of the following events shall constitute an event of default hereunder:
(i) the failure of a party to pay any amounts when due hereunder and the
expiration of [***] after receipt of a written notice requesting the payment
of such amount; (ii) the failure of a party to perform any obligation
required of its to be performed hereunder, and the failure to cure within
[***] after receipt of notice from the other party specifying in reasonable
detail the nature of such default; Upon the occurrence of any event of
default, the non-defaulting party may deliver to the defaulting party written
notice of intent to terminate, such termination to be effective upon the date
set forth in such notice.
Such termination rights shall be in addition to and not in
substitution for any other remedies that may be available to the
non-defaulting party. Termination pursuant to this Section 8.2 shall not
relieve the defaulting party from liability and damages to the other party
for breach of this Agreement. Waiver by either party of a single default or a
succession of defaults shall not deprive such party of any right to terminate
this Agreement arising by reason of any subsequent default.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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8.3 TERMINATION UPON BANKRUPTCY OR
INSOLVENCY. This Agreement may be terminated by Scripps giving written notice
of termination to Licensee upon the filing of bankruptcy or bankruptcy of
Licensee or the appointment of a receiver of any of Licensee's assets, or the
making by Licensee of any assignment for the benefit of creditors, or the
institution of any proceedings against Licensee under any bankruptcy law.
Termination shall be effective upon the date specified in such notice.
8.4 RIGHTS UPON EXPIRATION. Neither party
shall have any further rights or obligations upon the expiration of this
Agreement upon its regularly scheduled expiration date with respect to this
Agreement, other than the obligation of Licensee to make any and all reports
and payments for the final quarter period. Provided, however, that upon such
expiration, each party shall be required to continue to abide by its
nondisclosure obligations as described in Section 7.1, and Licensee shall
continue to abide by its obligation to indemnify Scripps as described in
Section 4.3 and by its obligations under Section 6.2 hereof.
8.5 RIGHTS UPON TERMINATION. Notwithstanding
any other provision of this Agreement, upon any termination of this Agreement
prior to the regularly scheduled expiration date of this Agreement, the
license granted hereunder shall terminate. Except as otherwise provided in
Section 8.6 of this Agreement with respect to work-in-progress, upon such
termination, Licensee shall have no further right to develop, manufacture or
market any Licensed Product, or to otherwise use any Scripps Patent Rights or
any Scripps Technology not otherwise includable therein. Upon any such
termination, Licensee shall promptly return all materials, samples,
documents, information, and other materials which embody or disclose Scripps
Patent Rights or any Scripps Technology not otherwise includable therein;
provided, however, that Licensee shall not be obligated to provide Scripps
with proprietary information which Licensee can show that it independently
developed. Licensee shall be free to keep one copy of all such materials,
samples, documents, information, and other materials for the sole purpose of
monitoring its obligations under this Section 8.5. Any such termination shall
not relieve either party from any obligations accrued to the date of such
termination. Upon such termination, each party shall be required to abide by
its nondisclosure obligations as described in Section 7.1, and Licensee shall
continue to abide by its obligations to indemnify Scripps as described in
Section 4.3.
8.6 WORK-IN-PROGRESS. Upon any such early
termination of the license granted hereunder in accordance with this
Agreement, Licensee shall be entitled to finish any work-in-progress and to
sell any completed inventory of a Licensed Product covered by such license
which remain on hand as of the date of the termination, so long as Licensee
pays to Scripps the royalties applicable to said subsequent sales in
accordance with the terms and conditions as set forth in this Agreement,
provided that no such sales shall be permitted after the expiration of six
(6) months after the date of termination.
9. ASSIGNMENT; SUCCESSORS.
9.1 ASSIGNMENT. Neither this Agreement nor
any rights granted hereunder may be assigned or transferred by Licensee
except (i) to an Affiliate of Licensee or (ii) as expressly permitted
hereunder, without the prior written consent of Scripps, which shall not be
unreasonably withheld.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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9.2 BINDING UPON SUCCESSORS AND ASSIGNS.
Subject to the limitations on assignment herein, this Agreement shall be
binding upon and inure to the benefit of any successors in interest and
assigns of Scripps and Licensee. Any such successor or assignee of Licensee's
interest shall expressly assume in writing the performance of all the terms
and conditions of this Agreement to be performed by Licensee.
10. GENERAL PROVISIONS.
10.1 INDEPENDENT CONTRACTORS. The
relationship between Scripps and Licensee is that of independent contractors.
Scripps and Licensee are not joint venturers, partners, principal and agent,
master and servant, employer or employee, and have no other relationship
other than independent contracting parties. Scripps and Licensee shall have
no power to bind or obligate each other in any manner, other than as is
expressly set forth in this Agreement.
10.2 ARBITRATION. Any controversy or claim
arising out of or relating to this Agreement, or the breach thereof, shall be
settled by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"), and the procedures set
forth below. In the event of any inconsistency between the Rules of AAA and
the procedures set forth below, the procedures set forth below shall control.
Judgment upon the award rendered by the arbitrators may be enforced in any
court having jurisdiction thereof.
10.2.1 LOCATION. The location of the
arbitration shall be in the County of San Diego.
10.2.2 SELECTION OF ARBITRATORS. The
arbitration shall be conducted by a panel of three neutral arbitrators who
are independent and disinterested with respect to the parties, this
Agreement, and the outcome of the arbitration. Each party shall appoint one
neutral arbitrator, and these two arbitrators so selected by the parties
shall then select the third arbitrator. If one party has given written notice
to the other party as to the identity of the arbitrator appointed by the
party, and the party thereafter makes a written demand on the other party to
appoint its designated arbitrator within the next ten days, and the other
patty fails to appoint its designated arbitrator within ten days after
receiving said written demand, then the arbitrator who has already been
designated shall appoint the other two arbitrators.
10.2.3 DISCOVERY. Unless the parties
mutually agree in writing to some additional and specific pre-hearing
discovery, the only pre-hearing discovery shall be (a) reasonably limited
production of relevant and non-privileged documents, and (b) the
identification of witnesses to be called at the hearing, which identification
shall give the witness's name, general qualifications and position, and a
brief statement as to the general scope of the testimony to be given by the
witness. The arbitrators shall decide any disputes and shall control the
process concerning these pre-hearing discovery matters. Pursuant to the Rules
of AAA, the parties may subpoena witnesses and documents for presentation at
the hearing.
10.2.4 CASE MANAGEMENT. Prompt
resolution of any dispute is important to both parties; and the parties agree
that the arbitration of any dispute shall be conducted expeditiously. The
arbitrators are instructed and directed to assume case management
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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initiative and control over the arbitration process (including scheduling of
events, pre-hearing discovery and activities, and the conduct of the
hearing), in order to complete the arbitration as expeditiously as is
reasonably practical for obtaining a just resolution of the dispute.
10.2.5 REMEDIES. The arbitrators may
grant any legal or equitable remedy or relief that the arbitrators deem just
and equitable, to the same extent that remedies or relief could be granted by
a state or federal court, provided however, that no punitive damages may be
awarded. No court action may be maintained seeking punitive damages. The
decision of any two of the three arbitrators appointed shall be binding upon
the parties.
10.2.6 EXPENSES. The expenses of the
arbitration, including the arbitrators' fees, expert witness fees, and
attorney's fees, may be awarded to the prevailing party, in the discretion of
the arbitrators, or may be apportioned between the parties in any manner
deemed appropriate by the arbitrators. Unless and until the arbitrators
decide that one party is to pay for all (or a share) of such expenses, both
parties shall share equally in the payment of the arbitrators' fees as and
when billed by the arbitrators.
10.2.7 CONFIDENTIALITY. Except as set
forth below, the parties shall keep confidential the fact of the arbitration,
the dispute being arbitrated, and the decision of the arbitrators.
Notwithstanding the foregoing, the parties may disclose information about the
arbitration to persons who have a need to know, such as directors, trustees,
management employees, witnesses, experts, investors, attorneys, lenders,
insurers, and others who may be directly affected. Additionally, if a party
has stock which is publicly traded, the party may make such disclosures as
are required by applicable securities laws. Further, if a party is expressly
asked by a third party about the dispute or the arbitration, the party may
disclose and acknowledge in general and limited terms that there is a dispute
with the other party which is being (or has been) arbitrated. Once the
arbitration award has become final, if the arbitration award is not promptly
satisfied, then these confidentiality provisions shall no longer be
applicable.
10.3 ENTIRE AGREEMENT; MODIFICATION. This
Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter hereof. There shall be no amendments or
modifications to this Agreement, except by a written document which is signed
by both parties.
10.4 CALIFORNIA LAW. This Agreement shall be
construed and enforced in accordance with the laws of the State of California.
10.5 HEADINGS. The headings for each article
and section in this Agreement have been inserted for convenience of reference
only and are not intended to limit or expand on the meaning of the language
contained in the particular article or section.
10.6 SEVERABILITY. Should any one or more of
the provisions of this Agreement be held invalid or unenforceable by a court
of competent jurisdiction, it shall be considered severed from this Agreement
and shall not serve to invalidate the remaining provisions thereof. The
parties shall make a good faith effort to replace any invalid or
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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unenforceable provision with a valid and enforceable one such that the
objectives contemplated by them when entering this Agreement may be realized.
10.7 NO WAIVER. Any delay in enforcing a
party's rights under this Agreement or any waiver as to a particular default
or other matter shall not constitute a waiver of such party's rights to the
future enforcement of its rights under this Agreement, excepting only as to
an express written and signed waiver as to a particular matter for a
particular period of time.
10.8 NAME. Whenever there has been an
assignment or a sublicense by Licensee as permitted by this Agreement, the
term "Licensee" as used in this Agreement shall also include and refer to, if
appropriate, such assignee or sublicensee.
10.9 ATTORNEYS' FEES. In the event of a
dispute between the parties hereto or in the event of any default hereunder,
the party prevailing in the resolution of any such dispute or default shall
be entitled to recover its reasonable attorneys' fees and other costs
incurred in connection with resolving such dispute or default.
10.10 NOTICES. Any notices required by this
Agreement shall be in writing, shall specifically refer to this Agreement and
shall be sent by registered or certified airmail, postage prepaid, or by
telefax, telex or cable, charges prepaid, or by overnight courier, postage
prepaid and shall be forwarded to the respective addresses set forth below
unless subsequently changed by written notice to the other party:
For Scripps: The Scripps Research Institute
10550 North Torrey Pines Road
La Jolla, California 92037
Attention: V.P., Technology Development
Fax No.: (619) 554-9910
For Licensee: Drug Abuse Sciences
3 O'Dell Place
Atherton, California 94207
Attention: President
Fax No.: 415-328-8892
Notice shall be deemed delivered upon the earlier of (i) when received, (ii)
three (3) days after deposit into the mail, or (iii) the date notice is sent
via telefax, telex or cable, (iv) the day immediately following delivery to
overnight courier (except Sunday and holidays).
10.11 COMPLIANCE WITH U.S. LAWS. Nothing
contained in this Agreement shall require or permit Scripps or Licensee to do
any act inconsistent with the requirements of any United States law,
regulation or executive order as the same may be in effect from time to time.
IN WITNESS WHEREOF, the parties have executed this
Agreement by their duly authorized representatives as of the date set forth
above.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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SCRIPPS: LICENSEE:
THE SCRIPPS RESEARCH INSTITUTE DRUG ABUSE SCIENCES
By: /s/ Arnold LaGuardia By: /s/ Philippe Pouletty
--------------------------------- ------------------------------
Title: Sr. Vice President Title: Chairman
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT B
DRUGABUSE SCIENCES, INC.
COMMON STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of June 18, 1996, between DRUGABUSE
SCIENCES, INC., a California corporation (the "Company"), and The Scripps
Research Institute ("Scripps").
RECITALS
A. The Company has entered into and made effective as of the
execution hereof a License Agreement with Scripps (the "License Agreement").
B. In connection with the License Agreement, the Company
wishes to issue to Scripps: (i) an aggregate of 110,765 shares of Common Stock
of the Company, which shares, when issued, represent .75% of the outstanding
shares of the Company immediately prior to the execution of this Agreement; (ii)
a warrant to purchase an aggregate of 166,148 shares of Common Stock of the
Company, which shares represent approximately 1.125% of the outstanding shares
of the Company immediately prior to the execution of this Agreement ("Warrant
W-1") and attached hereto as Exhibit 1; and (iii) an additional warrant to
purchase an aggregate of 166,148 shares Common Stock of the Company which shares
represent approximately 1.125% of the outstanding shares of the Company
immediately prior to the execution of this Agreement ("Warrant W-2") and
attached hereto as Exhibit 2.
C. The Company wishes to condition the exercise of Warrant W-1
and Warrant W-2 (collectively, the "Warrants") upon the completion of certain
events related to the research and development of new products by the Company
and attached hereto as Exhibit 3 (the "Milestones").
D. The authorized capital stock of the Company consists of
120,000,000 shares of Common Stock, 12,515,352 of which are issued and
outstanding and 187,778 shares of Series A Preferred Stock, 187,778 of which are
issued and outstanding and convertible into 2,253,336 shares of Common Stock.
The total number of common stock equivalents as of the date of this Agreement is
14,768,688.
E. Scripps wishes to acquire the Common Stock and the Warrants
on the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration for the willingness to enter
into the License Agreement and for the mutual covenants and representations
herein set forth, the Company and Scripps agree as follows:
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
F. ISSUANCE OF STOCK. As part of the consideration for the
grant of the licenses set forth in the License Agreement, the Company hereby
issues to Scripps, and Scripps hereby acquires from the Company, 110,765 shares
of the Company's Common Stock (the "Shares") valued at a price of $0.0225 per
share.
G. WARRANTS. As further consideration, the Company hereby
issues to Scripps the Warrants, valued at a price of $0.0225 per share subject
to the terms and conditions contained in the Warrants, for the grant of certain
licenses as provided in the License Agreement.
H. LEGENDS. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legends (in addition to any
legends required under applicable state securities laws):
1. "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR
AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
2. Any legend required to be placed thereon by the California
Commissioner of Corporations or any other applicable state securities
laws.
I. INVESTMENT REPRESENTATIONS; RESTRICTION ON TRANSFER.
In connection with the purchase of the Shares, Scripps represents to the Company
the following:
(a) INFORMATION CONCERNING THE COMPANY. Scripps
is aware of the Company's business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Shares.
1. INVESTMENT INTENT. Scripps is
purchasing these Shares for investment for Scripps' own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
2. RESIDENCE. Scripps' principal
residence is within the State of California and is located at the address
indicated beneath Scripps' signature below.
3. RISK. Scripps understands that the
Company is a start-up venture with limited financial and other resources and
that purchase of the Shares will be a highly speculative investment and involves
a high degree of risk, and Scripps is able, without impairing financial
condition, to hold the Shares for an indefinite period of time and to suffer a
complete loss of Scripps' investment.
4. RESTRICTED SECURITIES. Scripps
acknowledges and understands that the Shares constitute "restricted securities"
under the Securities Act and must be
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Scripps
further acknowledges and understands that the Company is under no obligation
to register the Shares. Scripps understands that the certificate evidencing
the Shares will be imprinted with a legend which prohibits the transfer of
the Shares unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company.
5. RULE 144. Scripps is familiar
with the provisions of Rule 144, promulgated under the Securities Act, which,
in substance, permits limited public resale of "restricted securities"
acquired, directly or indirectly, from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions. Rule 144 requires
among other things: (1) the availability of certain public information about
the Company; (2) the resale occurring not less than two years after the party
has purchased, and made full payment for, within the meaning of Rule 144, the
securities to be sold; and (3) in the case of an affiliate, or of a
non-affiliate who has held the securities less than three years, the sale
being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934) and the amount of securities being sold
during any three-month period not exceeding the specified limitations stated
therein, if applicable. Although the exemption from registration available
under Rule 144 is not necessarily exclusive, Scripps acknowledges that it may
bear a substantial burden of proof in establishing the existence of an
exemption under the Securities Act if the requirements under Rule 144 are not
satisfied.
6. TAXES. Scripps understands that
Scripps' investment in the Company may result in personal tax consequences.
Scripps shall rely solely on the determinations of its tax advisors or its
own determinations, and not on any statements or representations by the
Company or any of its agents, with regard to all such tax matters.
7. NO PUBLIC MARKET. Scripps
understands that no public market now exists for any securities issued by the
Company and that there is no assurance that a public market will ever exist
for the Shares.
J. MARKET STAND-OFF. Scripps agrees, in connection with the
initial public offering of the Company's securities, (i) not to sell, make
short sales of, loan, grant any options for the purchase of, or otherwise
dispose of any securities of the Company held by Scripps (other than those
securities included in the registration) without the prior written consent of
the Company or the underwriters managing such initial underwritten public
offering of the Company's securities for one hundred eighty (180) days from
the effective date of such registration and (ii) further agrees to execute
any agreement reflecting (i) above as may be requested by the underwriters at
the time of the public offering.
K. STATE SECURITIES LAW. The sale of the securities which
are the subject of this Agreement has not been qualified with the
Commissioner of Corporations of the State of California and the issuance of
such securities or the payment or receipt of any part of the consideration
therefor prior to such qualification is unlawful, unless the sale of
securities is exempt from the qualification by Section 25100, 25102, or 25105
of the California Corporations
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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Code. The rights of all parties to this Agreement are expressly conditioned
upon such qualification being obtained, unless the sale is so exempt.
L. TRANSFER TO INVENTORS. Subject to applicable state and
federal securities laws, the Company shall permit the transfer of shares of
Common Stock and Warrants issued pursuant to this Agreement to those
inventors whose technology is covered by the License Agreement as directed by
Scripps, provided such inventors acquire such securities on the same terms
and conditions as such securities are acquired by Scripps.
M. GENERAL PROVISIONS.
1. GOVERNING LAW. This Agreement
shall be governed by the internal laws of the State of California as applied
to agreements made and performed in California by residents of California.
2. ENTIRE AGREEMENT. This Agreement
represents the entire agreement between the parties with respect to the
purchase of Common Stock by Scripps and may only be modified or amended in
writing signed by both parties.
IN WITNESS WHEREOF, the parties have duly executed this
Common Stock Purchase Agreement as of the day and year first set forth above.
DRUGABUSE SCIENCES, INC, THE SCRIPPS RESEARCH INSTITUTE
a California corporation a California nonprofit public benefit
corporation
By: /s/ Philippe Pouletty Name: /s/ Arnold LaGuardia
---------------------------------- -----------------------------
Title: Chairman By: Arnold LaGuardia, Sr. V.P.
---------------------------------- -----------------------------
10550 N. Toreey Pines Rd.
-----------------------------------
Address
La Jolla, CA 92037
-----------------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 1
Warrant W-1
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
NO.: W-1 Void after
June 18, 2016
DRUGABUSE SCIENCES, INC.
COMMON STOCK PURCHASE WARRANT
Issued June 18, 1996
This Warrant is issued, for good and valuable consideration,
receipt of which is hereby acknowledged, to The Scripps Research Institute, a
California nonprofit public benefit corporation, (the "Holder") by DrueAbuse
Sciences, Inc., a California corporation (the "Company").
1. PURCHASE OF SHARES. Subject to the terms and conditions
hereinafter set forth, the Holder is entitled, upon surrender of this Warrant to
the Company, to purchase from the Company fully paid and non-assessable shares
of the Company's Common Stock (as adjusted pursuant to Section 10 hereof, the
"Shares").
2. PURCHASE PRICE. The purchase price per share for the Shares
shall be $.0225, (the "Warrant Price"). The number of shares of Common Stock
purchasable upon exercise of this Warrant shall be 166,148 shares.
3. EXERCISE PERIOD. This Warrant is exercisable upon the
completion of certain events related to the research and development of new
products by the Company and attached hereto as Schedule 1 (the "Milestones"), at
any time before the close of business on June 18, 2016.
4. METHOD OF EXERCISE. While this Warrant remains outstanding,
the Holder may exercise, in whole or in part, the purchase rights evidenced
hereby in accordance with Section 3 above. Such exercise shall be effected by
the surrender of this Warrant to the Chief Financial Officer of the Company at
its principal offices, together with the payment to the Company (i) in cash, by
check or by wire transfer to an account designated by the Company, (ii) by
cancellation by the Holder of any then-outstanding indebtedness of the Company
to the Holder, or (iii) by a combination of (i) and (ii) of an amount equal to
the aggregate purchase price for the number of Shares being purchased.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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5. NET ISSUE EXERCISE. In lieu of the payment methods set
forth in Section 4 above, immediately prior to, or at any time after, the
closing of an Initial Public Offering, the Holder may elect to exchange all
or a portion of this Warrant for Shares equal to the value of the amount of
the Warrant being exchanged on the date of exchange. If the Holder elects to
exchange this Warrant as provided in this Section 5, the Holder shall tender
to the Company the Warrant for the amount being exchanged, with written
notice of the Holder's election to exchange some or all of the Warrant, and
the Company shall issue to the Holder the number of Shares computed using the
following formula:
X = Y (A-B)
A
Where X = the number of Shares to be issued to
the Holder.
Y = the number of Shares purchasable
under the amount of the Warrant
being exchanged (as adjusted to the
date of such calculation).
A = the Fair Market Value of one Share.
B = the Purchase Price (as adjusted to
the date of such calculation).
All references herein to an "exercise" of the Warrant shall
include an exchange pursuant to this Section 5. Upon receipt of a written
notice of the Company's intention to raise capital by selling shares of
Common Stock in an Initial Public Offering (the "IPO NOTICE"), which notice
shall be delivered to the Holder promptly after the date of filing with the
Securities and Exchange Commission of the registration statement associated
with such Initial Public Offering, the Holder shall use its reasonable
efforts to determine whether or not the Holder will exercise this Warrant
pursuant to this Section 5 prior to the completion of the Initial Public
Offering. Notwithstanding whether or not an IPO Notice has been delivered to
the Holder or any other provision of this Warrant to the contrary, if the
Holder decides to exercise this Warrant while a registration statement is on
file with the Securities and Exchange Commission in connection with the
Initial Public Offering, this Warrant shall be deemed exercised on the
closing of the Initial Public Offering and the Fair Market Value of a Share
shall be the price at which one share of Common Stock was sold to the public
in the Initial Public Offering. If the Holder has elected to exercise this
Warrant pursuant to this Section 5 while a registration statement is on file
with the Securities and Exchange Commission in connection with an Initial
Public Offering and the Initial Public Offering is not completed, then the
Holder's exercise of this Warrant shall not be effective.
6. EXERCISE NOTICE AND INVESTMENT REPRESENTATIONS. On or
prior to the date of each exercise under this Warrant, Holder shall deliver
an executed copy of (a) the form of Notice of Exercise attached hereto as
EXHIBIT 1 duly executed by the Holder and (b) the form of Investment
Representation Statement attached hereto as EXHIBIT 2.
7. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or
number or type of securities issuable upon exercise of this Warrant is adjusted,
as herein provided, the Company
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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shall promptly deliver to the record holder of this Warrant a certificate of
an officer of the Company setting forth the nature of such adjustment and a
brief statement of the facts requiring such adjustment.
8. CERTIFICATES FOR SHARES. Upon the exercise of the
purchase rights evidenced by this Warrant, one or more certificates for the
number of Shares so purchased shall be issued as soon as practicable
thereafter, and in any event within thirty (30) days of the delivery of the
subscription notice.
9. RESERVATION OF SHARES. The Company covenants that it
will at all times keep available such number of authorized shares of its
Common Stock, free from all preemptive rights with respect thereto, which
will be sufficient to permit the exercise of this Warrant for the full number
of Shares specified herein. The Company further covenants that such Shares,
when issued pursuant to the exercise of this Warrant, will be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issuance thereof
10. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES.
(a) SPLITS AND COMBINATIONS. If the
Company at any time subdivides any of its outstanding shares of Common Stock
into a greater number of shares, the Warrant Price in effect immediately
prior to such subdivision shall be proportionately reduced, and, conversely,
if the outstanding shares of Common Stock are combined into a smaller number
of shares, the Warrant Price in effect immediately prior to such combination
shall be proportionately increased. Upon any adjustment of the Warrant Price
under this Section 10(a), the number of shares of Common Stock issuable upon
exercise of this Warrant shall equal the number of shares determined by
dividing (i) the aggregate Warrant Price payable for the purchase of all
shares issuable upon exercise of this Warrant immediately prior to such
adjustment by (ii) the Warrant Price per share in effect immediately after
such adjustment.
(b) RECLASSIFICATIONS AND EXCHANGES. If the
Company changes any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other
class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification
or other change and the Warrant Price therefor shall be appropriately
adjusted. If thirty percent (30%) or more of the Company's outstanding Common
Stock is voluntarily exchanged for a different security issued by the
Company, then the Investor shall have the right to elect to receive such
security rather than the Common Stock on exercise or conversion of this
Warrant.
(c) DIVIDENDS AND DISTRIBUTION. If the
Company declares a non-cash dividend or other distribution on the Common
Stock or if a dividend or other distribution on the Common Stock occurs
pursuant to the Articles of Incorporation (other than a cash dividend or
distribution), then, as part of such dividend or distribution, lawful
provision shall be made so that there shall thereafter be deliverable upon
the exercise of this Warrant or any portion thereof, in addition to the
number of shares of Common Stock receivable thereupon and without payment of
any additional consideration, the amount of the dividend or other
distribution to which the holder
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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of the number of shares of Common Stock obtained upon exercise hereof would
have been entitled to receive had the exercise occurred as of the record date
for such dividend or distribution.
11. NO SHAREHOLDER RIGHTS. Prior to exercise of this
Warrant, the Holder shall not be entitled to any rights of a shareholder
including (without limitation) the right to vote, receive preemptive rights
or be notified of shareholder meetings, and such Holder shall not be entitled
to any notice or other communication concerning the business or affairs or
the Company.
12. RESTRICTED SECURITIES. The Holder understands that this
Warrant and the Shares purchasable hereunder constitute "restricted
securities" under the federal securities laws inasmuch as they are being, or
will be, acquired from the Company in transactions not involving a public
offering and accordingly may not, under such laws and applicable regulations,
be resold or transferred without registration under the Securities Act of
1933 or an applicable exemption from registration. In this connection, the
Holder acknowledges that Rule 144 of the Securities and Exchange Commission
is not now, and may not in the future be, available for resales of the Shares
purchased hereunder. The Holder further acknowledges that the Shares and any
other securities issued upon exercise of this Warrant shall bear a legend
substantially in the form of the legend appearing on the face hereof.
THE SALE OF THESE SECURITIES HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE
OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS SUCH SALE OR TRANSFER
IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THESE SECURITIES
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED UNLESS THE
SALE IS SO EXEMPT.
13. CERTIFICATION OF INVESTMENT PURPOSE. Unless a current
registration statement under the Securities Act of 1933 shall be in effect
with respect to the securities to be issued upon exercise of this Warrant,
the Holder, by accepting this Warrant, covenants and agrees that, at the time
of exercise hereof, such Holder will deliver to the Company a written
certification satisfactory to the Company that the securities acquired by the
Holder and acquired for investment purposes only and that such securities are
not acquired with a view to, or for sale in connection with, any distribution
thereof.
14. SUCCESSORS AND ASSIGNS. The terms and provisions of
this Warrant shall inure to the benefit of, and be binding upon, the Company
and the Holder hereof and their respective successors and assigns.
15. AMENDMENT. This Warrant is one of several warrants (the
"Bridge Warrants") issued by the Company in further consideration of certain
loans made to support the Company's continuing operations prior to the
arrangement of and commitment to close the Next Financing. Any term of this
Warrant may be amended if agreed to by the Company and holders of Bridge
Warrants representing a majority of the shares issuable upon exercise of all
Bridge Warrants then outstanding. Notwithstanding the foregoing, no such
amendment of this Warrant
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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shall be effective if it would (i) alter the number of shares issuable
hereunder, or (ii) affect this Warrant in a manner different than the other
Bridge Warrants, unless the Holder hereof consents thereto.
16. NON-TRANSFERABILITY. The Holder of this note shall not
sell, transfer, pledge, hypothecate or otherwise dispose of any interest in
this note without the prior written consent of the Company, with one
exception: Scripps may transfer any portion of Scripps' interest in this note
to the inventors whose technology is covered by the License Agreement.
17. LOCKUP AGREEMENT. In consideration of the Company's
issuance of this Warrant, the Holder agrees in connection with an Initial
Public Offering not to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any Shares issuable hereunder
without the prior written consent of an underwriter or underwriters in such
Initial Public Offering, for such period of time (not to exceed 180 days)
from the effective date of such registration as such underwriter or
underwriters may specify.
18. COUNTERPARTS. For the convenience of the parties, any
number of counterparts of this Warrant may be executed by the parties hereto
and each such executed counterpart shall be, and shall be deemed to be, an
original instrument.
19. GOVERNING LAW. This Warrant shall be governed by the
laws of the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.
DRUGABUSE SCIENCES, INC.
By: Chairman
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Title:
---------------------------
Accepted and Agreed:
By:
------------------------------
Signature
Arnold LaGuardia, Sr. V.P.
- -----------------------------------------
(Print name and, if applicable, title)
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
DRUGABUSE SCIENCES, INC.
The undersigned hereby irrevocably elects to exercise the
Warrant for shares of capital stock, as provided for therein, and (check the
applicable box):
/ / Tenders payment of the purchase price in the form of
cash, by check or wire transfer, in the amount of
$____________________ for __________ shares of Common
Stock.
/ / Elects the Net Issue Exercise option pursuant to
Section 5 of the Warrant, and requests delivery of a
net of __________ shares of Common Stock.
The undersigned hereby affirms the statements and covenants in
Section 12 of the Warrant. Please issue a certificate or certificates for such
shares in the name of, and pay any cash for any fractional share to (please
print name, address and social security number)
Name:_______________________________________
Address:____________________________________
Signature:__________________________________
Note: The above signature should correspond exactly with the name on the
first page of this Warrant or with the name of the assignee appearing
in the assignment form below.
If said number of shares shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of the Registered Holder for the balance remaining of the shares purchasable
thereunder together with cash in lieu of any fraction of a share in the amount
of the current Fair Market Value of one whole share as of the date of exercise
multiplied by such fraction.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 2
INVESTMENT REPRESENTATION STATEMENT
__________ Shares of Common Stock of
DrugAbuse Sciences, Inc.
In connection with the purchase of the above-listed securities
the undersigned hereby represents to DrugAbuse Sciences, Inc. (the "Company") as
follows:
RECEIPT OF INFORMATION. The undersigned has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Common Stock issuable upon exercise of the Warrant dated June __,
1996 (the "Warrant") issued by the Company to the undersigned, and it has
examined any information furnished to it by the Company in connection therewith.
INVESTMENT REPRESENTATION.
(a) The shares of Stock to be received by the undersigned upon
the exercise of the Warrant (the "Securities") will be acquired for investment
for its own account, not as a nominee or agent, and not with a view to the sale
or distribution of any part thereof, except that it is understood that Scripps
may transfer any portion of Scripps' interest in the Warrant and shares of the
Company to the inventors of the technology which is the subject of the License
Agreement and the undersigned has no present intention of selling, granting
participation in or otherwise distributing the same, but subject, nevertheless,
to any requirement of law that the disposition of its property shall at all
times be within its control. By executing this Statement, the undersigned
further represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person, with respect to any Securities issuable upon
exercise of the Warrant, except as provided herein.
(b) The undersigned understands that the Securities issuable
upon exercise of the Warrant at the time of issuance may not be registered under
the Securities Act of 1933, as amended (the "Act"), and applicable state
securities laws, on the ground that the issuance of such securities is exempt
pursuant to Section 4(2) of the Act and state law exemptions relating to offers
and sales not by means of a public offering, and that the Company's reliance on
such exemptions is predicated on the undersigned's representations set forth
herein.
(c) The undersigned agrees that in no event will it make a
disposition of any Securities acquired upon the exercise of the Warrant unless
and until (i) it shall have notified the Company of the proposed disposition and
shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and (ii) it shall have furnished the
Company with an opinion of counsel satisfactory to the Company and the Company's
counsel to the effect that (A) appropriate action necessary for compliance with
the Act and any applicable state securities laws has been taken or an exemption
from the registration requirements of the Act and such laws is available, and
(B) that the proposed transfer will not violate any of said laws.
Notwithstanding the provisions of this paragraph, Scripps may transfer any
portion of the
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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Warrant and shares of the Company to Kim Janda and/or Peter Wirshing, the
inventors of the technology which is the subject of the License Agreement
without providing additional notice or advice of counsel.
(d) The undersigned represents that it is able to fend for
itself in the transactions contemplated by this Statement, has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of its investments, and has the ability to bear the
economic risks (including the risk of a total loss) of its investment. The
undersigned represents that it has had the opportunity to ask questions of the
Company concerning the Company's business and assets and to obtain any
additional information which it considered necessary to verify the accuracy of
or to amplify the Company's disclosures, and has had all questions which have
been asked by it satisfactorily answered by the Company.
(e) The undersigned acknowledges that the Securities issuable
upon exercise of the Warrant must be held indefinitely unless subsequently
registered under the Act or an exemption from such registration is available,
except as provided otherwise herein. The undersigned is aware of the provisions
of Rule 144 promulgated under the Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than two years after a party has
purchased and paid for the security to be sold, the sale being through a
"broker's transaction" or in transactions directly with a "market maker" (as
provided by Rule 144(f)) and the number of shares being sold during any
three-month period not exceeding specified limitations. The undersigned is aware
that the conditions for resale set forth in Rule 144 have not been satisfied.
Dated: __________
_______________________________________
(Signature)
_______________________________________
(Typed or Printed Name)
_______________________________________
(Title)
2
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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SCHEDULE 1
MILESTONES
1. Warrant W-l is exercisable upon the filing of an
investigational new drug application ("IND") for an efficacy clinical trial
sponsored by Licensee or its Sublicensee with the U.S. Food and Drug
Administration in respect of a Licensed Product.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 2
Warrant W-2
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
NO.: W-1 Void after
June 18, 2016
DRUGABUSE SCIENCES, INC.
COMMON STOCK PURCHASE WARRANT
Issued June 18, 1996
This Warrant is issued, for good and valuable consideration,
receipt of which is hereby acknowledged, to The Scripps Research Institute, a
California nonprofit public benefit corporation, (the "Holder") by DrueAbuse
Sciences, Inc., a California corporation (the "Company").
20. PURCHASE OF SHARES. Subject to the terms and conditions
hereinafter set forth, the Holder is entitled, upon surrender of this Warrant to
the Company, to purchase from the Company fully paid and non-assessable shares
of the Company's Common Stock (as adjusted pursuant to Section 10 hereof, the
"Shares").
21. PURCHASE PRICE. The purchase price per share for the
Shares shall be $.0225, (the "Warrant Price"). The number of shares of Common
Stock purchasable upon exercise of this Warrant shall be 166,148 shares.
22. EXERCISE PERIOD. This Warrant is exercisable upon the
completion of certain events related to the research and development of new
products by the Company and attached hereto as Schedule 1 (the "Milestones"), at
any time before the close of business on June 18, 2016.
23. METHOD OF EXERCISE. While this Warrant remains
outstanding, the Holder may exercise, in whole or in part, the purchase rights
evidenced hereby in accordance with Section 3 above. Such exercise shall be
effected by the surrender of this Warrant to the Chief Financial Officer of the
Company at its principal offices, together with the payment to the Company (i)
in cash, by check or by wire transfer to an account designated by the Company,
(ii) by cancellation by the Holder of any then-outstanding indebtedness of the
Company to the Holder, or (iii) by a combination of (i) and (ii) of an amount
equal to the aggregate purchase price for the number of Shares being purchased.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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24. NET ISSUE EXERCISE. In lieu of the payment methods set
forth in Section 4 above, immediately prior to, or at any time after, the
closing of an Initial Public Offering, the Holder may elect to exchange all or a
portion of this Warrant for Shares equal to the value of the amount of the
Warrant being exchanged on the date of exchange. If the Holder elects to
exchange this Warrant as provided in this Section 5, the Holder shall tender to
the Company the Warrant for the amount being exchanged, with written notice of
the Holder's election to exchange some or all of the Warrant, and the Company
shall issue to the Holder the number of Shares computed using the following
formula:
X = Y (A-B)
-------
A
Where X = the number of Shares to be issued to
the Holder.
Y = the number of Shares purchasable
under the amount of the Warrant
being exchanged (as adjusted to the
date of such calculation).
A = the Fair Market Value of one Share.
B = the Purchase Price (as adjusted to
the date of such calculation).
All references herein to an "exercise" of the Warrant shall
include an exchange pursuant to this Section 5. Upon receipt of a written notice
of the Company's intention to raise capital by selling shares of Common Stock in
an Initial Public Offering (the "IPO NOTICE"), which notice shall be delivered
to the Holder promptly after the date of filing with the Securities and Exchange
Commission of the registration statement associated with such Initial Public
Offering, the Holder shall use its reasonable efforts to determine whether or
not the Holder will exercise this Warrant pursuant to this Section 5 prior to
the completion of the Initial Public Offering. Notwithstanding whether or not an
IPO Notice has been delivered to the Holder or any other provision of this
Warrant to the contrary, if the Holder decides to exercise this Warrant while a
registration statement is on file with the Securities and Exchange Commission in
connection with the Initial Public Offering, this Warrant shall be deemed
exercised on the closing of the Initial Public Offering and the Fair Market
Value of a Share shall be the price at which one share of Common Stock was sold
to the public in the Initial Public Offering. If the Holder has elected to
exercise this Warrant pursuant to this Section 5 while a registration statement
is on file with the Securities and Exchange Commission in connection with an
Initial Public Offering and the Initial Public Offering is not completed, then
the Holder's exercise of this Warrant shall not be effective.
25. EXERCISE NOTICE AND INVESTMENT REPRESENTATIONS. On or
prior to the date of each exercise under this Warrant, Holder shall deliver an
executed copy of (a) the form of Notice of Exercise attached hereto as EXHIBIT 1
duly executed by the Holder and (b) the form of Investment Representation
Statement attached hereto as EXHIBIT 2.
26. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or
number or type of securities issuable upon exercise of this Warrant is adjusted,
as herein provided, the Company
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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shall promptly deliver to the record holder of this Warrant a certificate of
an officer of the Company setting forth the nature of such adjustment and a
brief statement of the facts requiring such adjustment.
27. CERTIFICATES FOR SHARES. Upon the exercise of the purchase
rights evidenced by this Warrant, one or more certificates for the number of
Shares so purchased shall be issued as soon as practicable thereafter, and in
any event within thirty (30) days of the delivery of the subscription notice.
28. RESERVATION OF SHARES. The Company covenants that it will
at all times keep available such number of authorized shares of its Common
Stock, free from all preemptive rights with respect thereto, which will be
sufficient to permit the exercise of this Warrant for the full number of Shares
specified herein. The Company further covenants that such Shares, when issued
pursuant to the exercise of this Warrant, will be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issuance thereof
29. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES.
(a) SPLITS AND COMBINATIONS. If the Company
at any time subdivides any of its outstanding shares of Common Stock into a
greater number of shares, the Warrant Price in effect immediately prior to such
subdivision shall be proportionately reduced, and, conversely, if the
outstanding shares of Common Stock are combined into a smaller number of shares,
the Warrant Price in effect immediately prior to such combination shall be
proportionately increased. Upon any adjustment of the Warrant Price under this
Section 10(a), the number of shares of Common Stock issuable upon exercise of
this Warrant shall equal the number of shares determined by dividing (i) the
aggregate Warrant Price payable for the purchase of all shares issuable upon
exercise of this Warrant immediately prior to such adjustment by (ii) the
Warrant Price per share in effect immediately after such adjustment.
(b) RECLASSIFICATIONS AND EXCHANGES. If the
Company changes any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other
class or classes, this Warrant shall thereafter represent the right to acquire
such number and kind of securities as would have been issuable as the result of
such change with respect to the securities that were subject to the purchase
rights under this Warrant immediately prior to such reclassification or other
change and the Warrant Price therefor shall be appropriately adjusted. If thirty
percent (30%) or more of the Company's outstanding Common Stock is voluntarily
exchanged for a different security issued by the Company, then the Investor
shall have the right to elect to receive such security rather than the Common
Stock on exercise or conversion of this Warrant.
(c) DIVIDENDS AND DISTRIBUTION. If the
Company declares a non-cash dividend or other distribution on the Common Stock
or if a dividend or other distribution on the Common Stock occurs pursuant to
the Articles of Incorporation (other than a cash dividend or distribution),
then, as part of such dividend or distribution, lawful provision shall be made
so that there shall thereafter be deliverable upon the exercise of this Warrant
or any portion thereof, in addition to the number of shares of Common Stock
receivable thereupon and without payment of any additional consideration, the
amount of the dividend or other distribution to which the holder
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3
<PAGE>
of the number of shares of Common Stock obtained upon exercise hereof would
have been entitled to receive had the exercise occurred as of the record date
for such dividend or distribution.
30. NO SHAREHOLDER RIGHTS. Prior to exercise of this Warrant,
the Holder shall not be entitled to any rights of a shareholder including
(without limitation) the right to vote, receive preemptive rights or be notified
of shareholder meetings, and such Holder shall not be entitled to any notice or
other communication concerning the business or affairs or the Company.
31. RESTRICTED SECURITIES. The Holder understands that this
Warrant and the Shares purchasable hereunder constitute "restricted securities"
under the federal securities laws inasmuch as they are being, or will be,
acquired from the Company in transactions not involving a public offering and
accordingly may not, under such laws and applicable regulations, be resold or
transferred without registration under the Securities Act of 1933 or an
applicable exemption from registration. In this connection, the Holder
acknowledges that Rule 144 of the Securities and Exchange Commission is not now,
and may not in the future be, available for resales of the Shares purchased
hereunder. The Holder further acknowledges that the Shares and any other
securities issued upon exercise of this Warrant shall bear a legend
substantially in the form of the legend appearing on the face hereof.
THE SALE OF THESE SECURITIES HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS SUCH SALE OR TRANSFER IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THESE SECURITIES ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
32. CERTIFICATION OF INVESTMENT PURPOSE. Unless a current
registration statement under the Securities Act of 1933 shall be in effect with
respect to the securities to be issued upon exercise of this Warrant, the
Holder, by accepting this Warrant, covenants and agrees that, at the time of
exercise hereof, such Holder will deliver to the Company a written certification
satisfactory to the Company that the securities acquired by the Holder and
acquired for investment purposes only and that such securities are not acquired
with a view to, or for sale in connection with, any distribution thereof.
33. SUCCESSORS AND ASSIGNS. The terms and provisions of this
Warrant shall inure to the benefit of, and be binding upon, the Company and the
Holder hereof and their respective successors and assigns.
34. AMENDMENT. This Warrant is one of several warrants (the
"Bridge Warrants") issued by the Company in further consideration of certain
loans made to support the Company's continuing operations prior to the
arrangement of and commitment to close the Next Financing. Any term of this
Warrant may be amended if agreed to by the Company and holders of Bridge
Warrants representing a majority of the shares issuable upon exercise of all
Bridge Warrants then outstanding. Notwithstanding the foregoing, no such
amendment of this Warrant
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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<PAGE>
shall be effective if it would (i) alter the number of shares issuable
hereunder, or (ii) affect this Warrant in a manner different than the other
Bridge Warrants, unless the Holder hereof consents thereto.
35. NON-TRANSFERABILITY. The Holder of this note shall not
sell, transfer, pledge, hypothecate or otherwise dispose of any interest in this
note without the prior written consent of the Company, with one exception:
Scripps may transfer any portion of Scripps' interest in this note to the
inventors whose technology is covered by the License Agreement.
36. LOCKUP AGREEMENT. In consideration of the Company's
issuance of this Warrant, the Holder agrees in connection with an Initial Public
Offering not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any Shares issuable hereunder without the
prior written consent of an underwriter or underwriters in such Initial Public
Offering, for such period of time (not to exceed 180 days) from the effective
date of such registration as such underwriter or underwriters may specify.
37. COUNTERPARTS. For the convenience of the parties, any
number of counterparts of this Warrant may be executed by the parties hereto and
each such executed counterpart shall be, and shall be deemed to be, an original
instrument.
38. GOVERNING LAW. This Warrant shall be governed by the laws
of the State of California as applied to agreements among California residents
entered into and to be performed entirely within California.
DRUGABUSE SCIENCES, INC.
By: /s/ Philippe Pouletty
--------------------------------
Title: Chairman
-----------------------------
Accepted and Agreed:
By: /s/ Arnold LaGuardia
-----------------------------------
Signature
Arnold LaGuardia, Sr. V.P.
- --------------------------------------
(Print name and, if applicable, title)
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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<PAGE>
EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
DRUGABUSE SCIENCES, INC.
The undersigned hereby irrevocably elects to exercise the
Warrant for shares of capital stock, as provided for therein, and (check the
applicable box):
/ / Tenders payment of the purchase price in the form of
cash, by check or wire transfer, in the amount of
$____________________ for __________ shares of Common
Stock.
/ / Elects the Net Issue Exercise option pursuant to
Section 5 of the Warrant, and requests delivery of a
net of __________ shares of Common Stock.
The undersigned hereby affirms the statements and covenants
in Section 12 of the Warrant. Please issue a certificate or certificates for
such shares in the name of, and pay any cash for any fractional share to
(please print name, address and social security number)
Name:______________________________
Address:___________________________
Signature:_________________________
Note: The above signature should correspond exactly with the name on the
first page of this Warrant or with the name of the assignee appearing
in the assignment form below.
If said number of shares shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of the Registered Holder for the balance remaining of the shares purchasable
thereunder together with cash in lieu of any fraction of a share in the amount
of the current Fair Market Value of one whole share as of the date of exercise
multiplied by such fraction.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT 2
INVESTMENT REPRESENTATION STATEMENT
__________ Shares of Common Stock of
DrugAbuse Sciences, Inc.
In connection with the purchase of the above-listed securities
the undersigned hereby represents to DrugAbuse Sciences, Inc. (the "Company") as
follows:
RECEIPT OF INFORMATION. The undersigned has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Common Stock issuable upon exercise of the Warrant dated June __,
1996 (the "Warrant") issued by the Company to the undersigned, and it has
examined any information furnished to it by the Company in connection therewith.
INVESTMENT REPRESENTATION.
(a) The shares of Stock to be received by the undersigned
upon the exercise of the Warrant (the "Securities") will be acquired for
investment for its own account, not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, except that it is understood
that Scripps may transfer any portion of Scripps' interest in the Warrant and
shares of the Company to the inventors of the technology which is the subject
of the License Agreement and the undersigned has no present intention of
selling, granting participation in or otherwise distributing the same, but
subject, nevertheless, to any requirement of law that the disposition of its
property shall at all times be within its control. By executing this Statement,
the undersigned further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer, or
grant participation to such person or to any third person, with respect to any
Securities issuable upon exercise of the Warrant, except as provided herein.
(b) The undersigned understands that the Securities issuable
upon exercise of the Warrant at the time of issuance may not be registered
under the Securities Act of 1933, as amended (the "Act"), and applicable state
securities laws, on the ground that the issuance of such securities is exempt
pursuant to Section 4(2) of the Act and state law exemptions relating to offers
and sales not by means of a public offering, and that the Company's reliance on
such exemptions is predicated on the undersigned's representations set forth
herein.
(c) The undersigned agrees that in no event will it make a
disposition of any Securities acquired upon the exercise of the Warrant unless
and until (i) it shall have notified the Company of the proposed disposition
and shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and (ii) it shall have furnished the
Company with an opinion of counsel satisfactory to the Company and the
Company's counsel to the effect that (A) appropriate action necessary for
compliance with the Act and any applicable state securities laws has been taken
or an exemption from the registration requirements of the Act and such laws is
available, and (B) that the proposed transfer will not violate any of said
laws. Notwithstanding the provisions of this paragraph, Scripps may transfer
any portion of the
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
Warrant and shares of the Company to Kim Janda and/or Peter Wirshing, the
inventors of the technology which is the subject of the License Agreement
without providing additional notice or advice of counsel.
(d) The undersigned represents that it is able to fend for
itself in the transactions contemplated by this Statement, has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of its investments, and has the ability to bear the
economic risks (including the risk of a total loss) of its investment. The
undersigned represents that it has had the opportunity to ask questions of the
Company concerning the Company's business and assets and to obtain any
additional information which it considered necessary to verify the accuracy of
or to amplify the Company's disclosures, and has had all questions which have
been asked by it satisfactorily answered by the Company.
(e) The undersigned acknowledges that the Securities issuable
upon exercise of the Warrant must be held indefinitely unless subsequently
registered under the Act or an exemption from such registration is available,
except as provided otherwise herein. The undersigned is aware of the provisions
of Rule 144 promulgated under the Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than two years after a party has
purchased and paid for the security to be sold, the sale being through a
"broker's transaction" or in transactions directly with a "market maker" (as
provided by Rule 144(f)) and the number of shares being sold during any
three-month period not exceeding specified limitations. The undersigned is
aware that the conditions for resale set forth in Rule 144 have not been
satisfied.
Dated: __________
________________________________
(Signature)
________________________________
(Typed or Printed Name)
________________________________
(Title)
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2
<PAGE>
SCHEDULE 1
MILESTONES
1. Warrant W-2 is exercisable upon demonstration of human
clinical efficacy for a primary end point in a Phase II clinical trial
sponsored by Licensee or its Sublicensee in respect of a Licensed Product.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT 3
Milestones
1. Warrant W-1 is exercisable upon the filing of an
investigational new drug application ("IND") for an efficacy clinical trial
sponsored by Licensee or its Sublicensees with the U.S. Food and Drug
Administration in respect of a Licensed Product.
2. Warrant W-2 is exercisable upon demonstration of human
clinical efficacy for a primary end point in a Phase II clinical trial
sponsored by Licensee or its Sublicensee in respect of a Licensed Product.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT C
FORM OF SUBLICENSE
This Sublicense Term Sheet is entered into and made effective
as of ____________________, 19__ by and between ______________________________,
a __________ located at _______________________________________________________
("Licensee") and ______________________________, a ____________________ located
at ________________________________________ ("Sublicensee").
GRANT OF SUBLICENSE. Licensee hereby grants to Sublicensee a
sublicense under and on all the same terms and conditions of that certain
License Agreement between Licensee and The Scripps Research Institute, a
California nonprofit public benefit corporation ("Scripps") attached hereto as
Exhibit I (the "Master License Agreement"), except as set forth below:
a. Technology subject to Sublicense: _______________
____________________________________________________________________________
____________________________________________________________________________.
b. Term: ___________________________________________
____________________________________________________________________________
____________________________________________________________________________.
c. Royalty Payments: _______________________________
____________________________________________________________________________
____________________________________________________________________________.
d. Commercial Development Obligations: _____________
____________________________________________________________________________
____________________________________________________________________________.
By its signature below, Sublicensee agrees to be bound by all
of the terms and conditions of the Master License Agreement, as modified
hereby, for the benefit of Licensee and Scripps.
LICENSEE: SUBLICENSEE:
____________________________ ________________________________
By:_________________________ By:_____________________________
Title:______________________ Title:__________________________
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT D
MILESTONES
1. The filing of an investigational new drug application
("IND") for an efficacy clinical trial sponsored by Licensee or its Sublicensee
with the U.S. Food and Drug Administration in respect of a Licensed Product.
2. Upon demonstration of human clinical efficacy for a
primary end point in a Phase II clinical trial sponsored by Licensee or its
Sublicensee in respect of a Licensed Product.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT 10.15
-------------------------------
PATENT AND KNOW-HOW
LICENSE AGREEMENT
-------------------------------
This Agreement is entered this 08-day of June 1999 ("Effective Date") into BY
AND BETWEEN:
- - PASTEUR MERIEUX SERUMS & VACCINS, - PASTEUR MERIEUX CONNAUGHT COMPANY -,
a company organized and existing under the laws of France having its
registered head office at 58 avenue Leclerc, 69007 Lyon, France,
Represented by Mr. Michel GRECO, its DIRECTEUR GENERAL,
(hereinafter referred to as "LICENSOR")
AND
- - DRUG ABUSE SCIENCES INC a corporation existing and organized under the
laws of the United States its registered head office at 1430 O'Brien
Drive, suite E, Menlo Park, CA 94025
Represented by Mr Stanley KAPLAN, its Chief Executive Officer,
(hereinafter referred to as "LICENSEE")
<PAGE>
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
WITNESSETH
WHEREAS, LICENSOR has developed intellectual property, including inventions
which are the subject matter of patents and patent applications and a secret and
substantial know-how, relating to the [********] technology.
WHEREAS, LICENSEE wishes to obtain from LICENSOR a license in order to have the
right to use LICENSOR' inventions relating to the pasteurization for use with
products that are directed toward alleviation of drug addictions, and LICENSOR
is willing to grant such licenses to LICENSEE, subject to the terms of and
conditioned upon this Agreement;
NOW, THEREFORE, in consideration of the respective representations
and covenants of each of the Parties as set forth below, LICENSOR and LICENSEE,
intending to be legally bound, agree as follows
ARTICLE 1 - DEFINITIONS AND INTERPRETATION.
1.1 DEFINITIONS: For the purposes of this Agreement the following words and
phrases shall have the following meanings:
(a) "AFFILIATE" means, with respect to any Person, (i) any other
Person of which the securities or other ownership interests
representing fifty per cent (50%) or more of the equity or fifty
per cent (50%) or more of the ordinary voting power or fifty per
cent (50%) or more of the general partnership interest are, at the
time such determination is being made, owned, Controlled or held,
directly or indirectly, by such Person (a "Subsidiary"), or (ii)
any other Person which, at the time such determination is being
made, is Controlling or under common Control with, such Person. As
used herein, the term "Control", whether used as a noun or verb,
refers to the possession, directly or indirectly, of the power to
direct, or cause the direction of, the management or policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise.
(b) "AGREEMENT" means this agreement, all amendments and supplements
to this Agreement and all schedules to this Agreement, including
the following:
SCHEDULE A - LICENSED PATENTS,
SCHEDULE B - LICENSED KNOW-HOW
(c) "BIOLOGICAL MATERIALS" shall mean any biological materials
including but not limited to structural genes, genetic sequences,
promoters, enhancers, probes, linkage probes, vectors, hosts,
plasmids, peptides, polypeptides, transformed cell lines,
transgenic animals, proteins, biological modifiers, antigens,
reagents, hybridomas, antibodies, toxins, lectins, enzymes,
lipids, hormones, viruses, cells or parts of cells, cell lines,
fragments of any of the foregoing and any other biologically
active material or compound, whether or not occurring naturally or
howsoever derived, modified, conjugated, cross-linked,
immobilized, reduced, purified or produces, whether by recombinant
DNA techniques and/or otherwise.
(d) "CALENDAR QUARTER" means any of the three-month periods beginning
January 1, April 1, July 1 and October 1 in any year.
(e) "CONFIDENTIAL INFORMATION" has the meaning ascribed to it in
Section 9.1. of this Agreement.
(f) "EVENT OF FORCE MAJEURE" has the meaning ascribed to it in Article
12 of this Agreement.
(g) "FIELD OF USE" means the treatment of drug addiction.
(h) "FIRST COMMERCIAL SALE" means, in each country of the Territory,
the first sale of a PRODUCT, after obtaining the regulatory
approvals necessary to commercially market such PRODUCT in such
country in the Territory, by LICENSEE, its
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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<PAGE>
Affiliates or Sublicensees, to Third-Parties, in each case for use
or consumption of such PRODUCT in such country by the general
public.
(i) "IMPROVEMENTS" means all patentable or non-patentable inventions,
discoveries, technology and information of any type whatsoever,
including without limitation Biological Materials, methods,
processes, technical information, knowledge, experience and
know-how which utilize, incorporate, derive from, are based on or
could not be conceived, developed or reduced to practice but for
the use of the LICENSOR Technology.
(j) "LICENSE" has the meaning ascribed to it in Section 2.1.1. of this
Agreement.
(k) "LICENSED KNOW-HOW" means any and all technical information,
discoveries, Improvements, processes, formulae, data, engineering,
technical and shop drawings, inventions, Biological Materials,
shop-rights, know-how and trade secrets which is useful or
necessary to make, have made, use or sell the PRODUCTS or to
practice under the LICENSED PATENTS in the Field of Use, which
have been, or hereafter are, either developed by LICENSOR or its
Affiliates, or acquired by LICENSOR or its Affiliates and to which
LICENSOR or its Affiliates, to the extent to which it has the
right to do so in the Field of Use.
(l) "LICENSED PATENTS" means:
(i) any existing patents and patent applications listed in
Schedule A to this Agreement;
(ii) any future patents issued from any patent applications
referred to in Paragraph 1.1(1)(i) above and any future
patents issued from a patent application filed in any
country in the Territory which corresponds to a patent or
patent application identified in Paragraph 1.1(1)(i) above;
(iii) any reissues, confirmations, renewals, extensions,
counterparts, divisions, continuations,
continuations-in-part, supplemental protection certificates
or utility models issued, assigned or licensed to LICENSOR
or its Affiliates of or relating to the patents or patent
applications identified in Paragraph 1.1(1)(i) and (ii)
above
(iv) any future patents and patent applications covering
LICENSOR Improvements, solely or jointly owned by LICENSOR
or its Affiliates, or licensed by LICENSOR or its
Affiliates with the right to sublicense.
(m) "NET SALES" shall mean the amount actually received on sales of
PRODUCTS by LICENSEE, and its Affiliates and Sublicensees if the
Sublicensees are Affiliates to the first Third-Party (including
unaffiliated Third-Party distributors, except in the circumstances
referred to in Section 6.3 hereof less), to the extent actually
incurred or allowed and if not already deducted in the amount
invoiced:
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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<PAGE>
(i) normal or customary trade and/or quantity discounts,
credits, allowances, rebates, returns (including, but not
limited to, wholesaler and retailer returns);
(ii) retroactive price reductions;
(iii) excise taxes, other consumption taxes, customs duties and
compulsory payments made to governmental authorities;
(iv) sales commissions that are actually paid to Third-Party
distributors and selling agents; and
(v) transportation, transit and insurance for transportation
each to the extent separately invoiced and paid by
LICENSEE.
(n) "Notice of Dispute" has the meaning ascribed to it in Section
16.4.(a) of this Agreement.
(o) "PARTIES" means LICENSEE and LICENSOR, and "Party" means any one
of them.
(p) "PERSON" means an individual, corporation, partnership, trust,
business trust, association, joint stock company, pool, syndicate,
sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed
herein.
(q) "PHASE III" means the first pivotal safety and efficacy clinical
trial relating to a PRODUCT.
(r) "PRODUCTS" means the COC are produced by or under license from
DAS, the manufacture, sale or use of such PRODUCTS which would
have constituted a misappropriation of substantial LICENSED
KNOW-HOW, or LICENSOR Improvements, and/or an infringement of the
LICENSED PATENTS, but for the LICENSE granted in this Agreement.
(s) "ROYALTY TERM" means, with respect to the PRODUCT in each country
in the Territory, the period [***] of such PRODUCT in such country
and [***] in such country.
(t) "SUBLICENSEE" means any Person acting pursuant to a sublicense
granted to it by LICENSEE under the terms of this Agreement.
(u) "TERRITORY" means all countries in the world.
(v) "THIRD-PARTY" means any Person other than LICENSEE, LICENSOR and
their respective Affiliates..
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3
<PAGE>
(w) "VALID PATENT CLAIM" means a claim of an issued and unexpired
patent or patent application included in LICENSED PATENTS which
has not been held permanently revoked, unenforceable or invalid by
a decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed
for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise. If there
should be two or more decisions within the same country which are
conflicting with respect to the invalidity of the same claim, the
decision of the highest tribunal shall thereafter control.
However, should the tribunals be of equal authority, then the
decision or decisions holding the claim valid shall prevail where
the conflicting decisions are equal in number and the majority of
decisions shall prevail where the conflicting decisions are not
equal in number.
(x) "LICENSOR IMPROVEMENT" means Improvements which are conceived,
developed or reduced to practice during the term of this Agreement
solely or jointly by employees or contractors acting on behalf of
LICENSOR or its Affiliates.
(y) "LICENSOR TECHNOLOGY" means the LICENSED PATENTS, the LICENSED
KNOWHOW and the LICENSOR Improvements.
1.2 CERTAIN RULES OF INTERPRETATION IN THIS AGREEMENT AND THE SCHEDULES:
(a) An accounting term not otherwise defined has the meaning assigned
to it by, and every accounting matter will be determined in
accordance with, generally accepted accounting principles in the
United States of America;
(b) Unless otherwise specified, all references to monetary amounts are
to United States dollars currency (US$);
(c) The descriptive headings of Articles and Sections are inserted
solely for convenience of reference and are not intended as
complete or accurate descriptions of the content of such Articles
or Sections;
(d) The use of words in the singular or plural, or with a particular
gender, shall not limit the scope or exclude the application of
any provision of this Agreement to such Person or Persons or
circumstances as the context otherwise permits;
(e) Whenever a provision of this Agreement requires an approval or
consent by a Party to this Agreement and notification of such
approval or consent is not delivered within the applicable time
limit, then, unless otherwise specified, the Party whose approval
or consent is required shall be conclusively deemed to have
granted its approval or consent;
(f) Unless otherwise specified, time periods within or following which
any payment is to be made or act is to be done shall be calculated
by excluding the day on which the period commences and including
the day on which the period ends and by extending the period to
the next business day following if the last day of the
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4
<PAGE>
period is not a business day in the jurisdiction of the Party to
make such payment or do such act; and
(g) Whenever any payment is to be made or action to be taken under
this Agreement is required to be made or taken on a day other than
a business day, such payment shall be made or action taken on the
next business day following such day in the jurisdiction of the
Party to make such payment or do such act.
ARTICLE 2 - LICENSE.
2.1 GRANT.
Subject to and conditioned upon the provisions of this Agreement,
LICENSOR hereby grants to LICENSEE, and LICENSEE hereby accepts, a
license ( the "LICENSE") in the Territory to make, have made, use and
sell PRODUCTS under the LICENSED PATENTS and by using LICENSED KNOW-HOW
and LICENSOR Improvements in the Field of Use.
(i) Subject to and conditioned upon the provisions of this
Agreement, the LICENSE granted pursuant to this Article 3
shall be exclusive (exclusive even as to LICENSOR) to
LICENSEE in the Field of Use. Without limiting the
generality of the foregoing, LICENSOR covenants that during
the term of this Agreement, neither LICENSOR nor its
Affiliates shall grant to any other Person any right,
license or privilege to make, have made, use or sell
PRODUCTS or to otherwise exploit LICENSOR Technology, or
any other Biological Matter or chemical substance (or any
derivative or formulation thereof), in the Field of Use.
(ii) For greater certainty, LICENSOR has and retains all rights
in and to the LICENSOR Technology outside the Field of Use
and LICENSEE has no rights in the LICENSOR Technology
outside the Field of Use.
2.2 LICENSEE'S RIGHTS TO SUBLICENSE.
(i) LICENSEE shall have the right, without obtaining the
further consent of LICENSOR, to sublicense in the Field of
Use all or any portion of the rights to the LICENSED
PATENTS, the LICENSED KNOW-HOW and LICENSOR Improvements
granted to it pursuant to this Agreement under the LICENSE
(i) to any of its Affiliates, and (ii) to any Person in any
country of the Territory without PMC's prior approval to
any third party unless such Person is well known as being
actively engaged in the business of researching,
developing, manufacturing and marketing immunoproteins at
the time the sublicense is contemplated, in which case the
grant of the sublicense to such a third party shall be
subject to PMC's prior approval in writing. Such approval
shall only be dependent upon PMC being reasonably satisfied
by the provision that DAS will propose to include in the
sublicense to, and only to, the effect that the Licensed
Technology may not be used and/or exploited by the
prospective
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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sublicensee in the immunoproteine field. For that purpose,
DAS shall provide to PMC a draft along with its request.
PMC shall have fifteen (15) days to confirm in writing its
consent or state in writing the material reasons, made in
good faith, why such provision will not protect the
Licensed Technology from use as restricted in the previous
two sentences, in which case the parties will use their
best efforts to expedite negotiations of an appropriate
provision. PMC shall be deemed to have approved a request
by DAS pursuant to this Section 2.2, if PMC fails to
respond as provided hereunder within the fifteen (15)
period set forth above.
No permitted Sublicensee pursuant hereto shall have the right to
grant further sublicenses to any Third-Party.
(ii) LICENSEE agrees that all sublicenses granted by LICENSEE
hereunder shall expressly bind Sublicensees to the terms of
Article 9, "Confidentiality" and to all other relevant
provisions of this Agreement.
In the event LICENSEE grants sublicenses to its Affiliates,
LICENSEE shall pay royalties to LICENSOR as if Net Sales of the
Sublicensees if such Sublicensees are Affiliates were Net Sales of
LICENSEE and LICENSOR shall be expressly made a Third-Party
beneficiary thereof.
For all other Sublicenses to Third-Parties except for the
standalone Sublicenses as specified herebelow, the amount of
royalties paid by Sublicensee(s) to LICENSEE shall be included
into the amount of Net Sales. It is understood between the
parties, that LICENSOR will be paid by LICENSEE [***] that would
be equivalent to what LICENSOR would have received if LICENSEE has
been selling directly the PRODUCTS. Such percentage shall not
exceed [***] of the amount of revenue actually received by
LICENSEE.
If LICENSEE grants a Sublicense to the LICENSED PATENTS to a
third-party on a standalone basis, LICENSEE shall pay to PMC [***]
of any incremental consideration that LICENSEE may receive from
any Third-Party Sublicensee such as but not limited to license
issue fees, milestone payments and royalties.
(iii) Any sublicenses granted by LICENSEE shall include a
requirement that the Sublicensee maintains records and
permit inspection on terms essentially identical to Section
6.2 hereof. At LlCENSOR's request, LICENSEE shall arrange
for an independent certified public accountant selected by
LICENSOR, and at LlCENSOR's cost, to inspect the records of
Sublicensees for the purpose of verifying royalties due to
LICENSOR and shall cause such accountant to report the
results thereof to LICENSOR.
(iv) Any sublicenses granted by LICENSEE shall provide for the
termination of the sublicense, or, if the Sublicensee is a
Third-Party, at the option of such Sublicensee, the
conversion to a license directly between such
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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Sublicensee and LICENSOR, upon termination of this
Agreement under Article 10 (other than expiration under
Section 10.1 or a termination by LICENSEE further to a
breach by LICENSOR pursuant to Section 10.4). Such
conversion shall be subject to LlCENSOR's approval and
contingent upon acceptance by the Sublicensee of the
remaining provisions of this Agreement.
(vi) LICENSEE shall notify LICENSOR of each sublicense granted
to Third-Parties and shall provide LICENSOR with the name
and address of each Sublicensee and a description of the
PRODUCTS and territory covered by each sublicenses.
2.3 SUBLICENSES TO LICENSEE.
To the extent LICENSED PATENTS have been, or shall be, licensed by
LICENSOR from a Third-Party under an agreement with such Third-Party (a
"Third-Party Licensee), LICENSEE understands and agrees as follows:
(i) The rights sub-licensed to LICENSEE by LICENSOR are subject
to the terms and conditions, restrictions, limitations and
obligations of the relevant Third-Party License that are
imposed upon LICENSOR;
(ii) LICENSEE shall comply with the terms and conditions,
restrictions, limitations and obligations of such
Third-Party License(s) to the extent LICENSEE has been
permitted to review such terms, conditions, restrictions,
limitations and obligations. LICENSOR shall give LICENSEE,
upon request, a reasonable opportunity to review the same
except to the extent that confidentiality obligations
towards Third-Parties may prevent LICENSOR from doing so.
In any event, LICENSOR shall act reasonably in advising
LICENSEE of the scope of LICENSEE's obligations pursuant to
any relevant Third Party License. LICENSOR represents and
warrants that, on the Effective Date, there are no Third
Party Licenses that apply to exploitation of the LICENSOR
Technology.
2.4 SUBCONTRACTING.
Notwithstanding anything herein provided for to the contrary, LICENSEE
shall be allowed to (i) sub-contract in whole or in part PRODUCTS
development to Third-Parties such as, without limitation, clinical
research organizations, (ii) appoint sales agents and distributors to
market and distribute PRODUCTS and (iii) sub-contract manufacturing of
PRODUCTS, or any part thereof, with Third-Parties or with LICENSEE's
Affiliates including LICENSOR acting as toll manufacturer.
2.5 DISCLOSURE OF TECHNOLOGY.
From time to time during the term of this Agreement, LICENSOR shall
disclose or cause its Affiliates to disclose to LICENSEE such LICENSOR
Technology as may be reasonably necessary to enable LICENSEE to develop,
manufacture, commercialize and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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otherwise exploit the PRODUCTS in the Field of Use on the terms and
subject to the conditions of this Agreement. In addition, during the term
of this Agreement, LICENSOR shall, upon LICENSEE's reasonable request and
with adequate notice to LICENSOR, make available to LICENSEE at
LICENSEE's or its Affiliates' manufacturing facilities or the facility of
a Third Party manufacturer who shall have contracted with LICENSEE to
manufacture PRODUCTS, LICENSOR's or LICENSOR Affiliate's Personnel to
provide technical assistance to LICENSEE's Personnel, or LICENSEE
Affiliates' Personnel or Third-Party manufacturer's Personnel. LICENSEE
shall pay or have paid by its concerned Affiliates all reasonable travel
costs incurred by LICENSOR or its Affiliates in connection with rendering
such technical assistance. Such Personnel shall render such assistance at
the facilities designated by LICENSEE for periods of not less than three
continuous business days per visit. In addition, LICENSOR shall make it
or its Affiliates Personnel reasonable available for telephone
consultation, as requested by LICENSEE.
2.6 PROVISION OF RELATED ASSISTANCE.
(i) In support of LICENSEE'S development and commercialization of
PRODUCTS, LICENSOR shall promptly and timely provide and prepare,
upon reasonable request of DAS and free of charge, relevant
sections pertaining to (i) IND, BLA, PLA and ELA supplements and
other regulatory approvals required by the FDA and other
Regulatory Authorities to commercially market and sell PRODUCTS to
the public in the Territory, and, (ii) such information as
LICENSEE or Regulatory Authorities may request in connection with
(a) LICENSEE's preclinical studies, Phase I, II III and IV studies
for PRODUCTS. LICENSOR shall promptly conduct such manufacturing
process development studies (including but not limited to
stability studies) as are reasonably requested by LICENSEE or
required by Regulatory Authorities in order to fulfill its
obligations under this Agreement, and to permit LICENSEE to
expeditiously submit complete applications to obtain marketing
(and earlier) approvals to commercially develop, market and sell
PRODUCTS in the Territory.
(ii) LICENSOR represents and warrants, to the best of its knowledge,
that the information, data and technical assistance provided to
LICENSEE hereunder shall not contain any material fact or
omission, and shall indemnify and hold LICENSEE harmless from any
liability or damage (including reasonable attorneys' fees arising
from a breach of the foregoing.)
2.7 COMMUNICATION AMONG PARTIES.
Each of LICENSEE and LICENSOR shall appoint (a) specific individual(s)
who shall be available and shall act as (a) liaison Person(s) to
facilitate the day-to-day communications among the Parties. The names and
addresses of the liaison Persons who shall act on behalf of each of the
Parties shall be provided by each of the Parties to the other
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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immediately following the execution of this Agreement. Each of LICENSEE
and LICENSOR agrees to notify the other in accordance with the terms of
Section 16.1 of this Agreement in the event of a change in liaison
Person.
2.8 IDENTIFICATION OF KNOW-HOW.
The Parties agree that all information and Biological Materials comprised
in the LICENSED KNOW-HOW to be transferred to LICENSEE pursuant to this
Agreement shall be so transferred in the case of written information, by
memoranda bearing the mention "Confidential", and, in the case of
Biological Materials, by clearly marked and numbered containers. LICENSEE
shall designate an individual who shall be responsible for receiving
information and Biological Materials from LICENSOR and/or its Affiliates
and the Parties agree that such information and Biological Materials
shall in all cases (except where the Parties agree otherwise) be sent
solely to the attention of such individual. Upon receipt of information
and/or Biological Materials, the designated individual shall, on behalf
of LICENSEE, send an acknowledgement to LICENSOR and/or its Affiliates
confirming receipt of information and/or Biological Materials. The
Parties agree that they shall in good faith work together to establish
and maintain a system to record the transmission of information and/or
materials under this Agreement and make all commercially reasonable
efforts to ensure such system is followed.
2.9 CONFIDENTIALITY.
All information transferred pursuant to this Agreement shall be deemed to
be "Confidential Information" in accordance with Section 9.1 hereof.
ARTICLE 3 - DEVELOPMENT AND COMMERCIALIZATION.
3.1 DEVELOPMENT AND COMMERCIALIZATION EFFORTS.
LICENSEE shall comply with all applicable good laboratory, clinical and
manufacturing practices in the development and commercialization of
PRODUCTS, and shall cause its Affiliates and subcontractors to do the
same. LICENSEE shall be solely responsible for funding all costs incurred
by LICENSEE for the development and commercialization of each PRODUCT.
3.2 DEVELOPMENT AND COMMERCIALIZATION REPORTS.
During the term of this Agreement, LICENSEE shall keep LICENSOR
reasonably informed as to the progress of the development of PRODUCTS by
notifying LICENSOR of completion of PHASE III studies for each such
PRODUCT (to the extent such studies are commenced and completed). All
information disclosed by LICENSEE pursuant to this Section 4.2 shall be
treated as LICENSEE Confidential Information subject to Article 8 hereof.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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ARTICLE 4 - ROYALTIES AND MILESTONES.
4.1 EARNED ROYALTIES.
During the Royalty Term, LICENSEE shall pay to LICENSOR a royalty as
follows:
(i) during the [***]
[***] percent of Net Sales of PRODUCTS.
(ii) As of the [***] and until the [***]:
[***] of Net Sales of PRODUCTS on annual NET SALES below [***];
[***] of Net Sales of PRODUCTS on annual NET SALES above [***]
(iii) As of the [***] following the date of First Commercial Sale:
[***]:
[***] of Net Sales of PRODUCTS
As of the [***] year, LICENSEE shall pay royalties in countries
where there is no [***]; in all other cases, the LICENSE in any
such country shall be royalty free).
4.2 SINGLE ROYALTY: NON-ROYALTY SALES.
In no event shall more than one royalty be payable under Section 4.1.
with respect to a particular unit of PRODUCTS. No royalty shall be
payable under this Section 4 with respect to sales of PRODUCTS among
LICENSEE and its Subsidiaries or Affiliates, or among Sublicensees and
their respective Affiliates, or among LICENSEE and its Sublicensees,
[***]. No royalty shall be payable for (i) PRODUCTS used in clinical
trials, or (ii) PRODUCTS used by LICENSEE, its Affiliates or
Sublicensees, for research, (iii) customary quantities of PRODUCTS
distributed as free samples or (iv) reasonable quantities of PRODUCTS
disposed by LICENSEE as donations to Third-Parties.
4.3 [***].
In those cases where LICENSEE or its Affiliates sell PRODUCTS in bulk to
a Third-Party, [***].
4.4 ROYALTY ADJUSTMENTS.
The royalty due hereunder shall be reduced in the following circumstances
and in the following manner:
(i) Where LICENSEE is required to obtain additional rights to make,
use or sell PRODUCTS and to pay a third party a royalty in order
to obtain such
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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rights, the royalty hereunder shall be reduced by an amount
[***] to the third party until such time as (a) [***], or (b)
[***].
(ii) At any time (and only for such time) that the sum of (a) the
royalty due hereunder for PRODUCTS, and (b) the transfer price
for PMC Product due LICENSOR pursuant to that certain
Manufacturing and Supply Agreement between the Parties, dated of
even date herewith (the "Combined Price"), [***] (referred to as
the "Margin"), the royalty on such PRODUCT shall be suspended.
Thereafter, LICENSEE shall not owe any royalty on PRODUCTS until
the Combined Price is less than the Margin, and then only to the
extent of the difference between the Combined Price and the
Margin.
(iii) With respect to any PRODUCTS that are not manufactured by
LICENSOR (whether through termination of the Manufacturing and
Supply Agreement, force majeure or otherwise), the royalty due
for such PRODUCTS shall be [***] of the Net Sales received on
the sales of the PRODUCTS manufactured by the Third-Party. For
the avoidance of doubt, LICENSEE shall pay LICENSOR the
royalties mentioned in Section 4.1 of the Net Sales received on
the PRODUCTS manufactured by LICENSOR.
ARTICLE 5 - ROYALTY REPORTS AND ACCOUNTING.
5.1 REPORTS, EXCHANGE RATES.
During the term of this Agreement following the First Commercial Sale,
LICENSEE shall furnish to LICENSOR, with respect to each Calendar
Quarter, a written report showing in reasonably specific detail, for the
European Union, North America, and the rest of the Territory,
respectively: (a) the gross sales of PRODUCTS sold by LICENSEE, its
Affiliates and its Sub-licensees in the Territory during the
corresponding Calendar Quarter and the calculation of Net Sales from such
gross sales; (b) the royalties payable in United States dollars, if any,
which shall have accrued hereunder based upon Net Sales of PRODUCTS; (c)
the withholding taxes, if any, required by law to be deducted in respect
of such royalties; (d) the date of the First Commercial Sale of PRODUCTS
having occurred in each country in the Territory during the corresponding
Calendar Quarter; and (e) the exchange rates used in determining the
royalty amount expressed in United States dollars.
With respect to sales (if any) of PRODUCTS invoiced in United States
dollars, the gross sales, Net Sales, and royalties payable shall be
expressed in United Sates dollars. With respect to sales of PRODUCTS
invoiced in a currency other than United Sates dollars, the gross sales,
Net Sales and royalties payable shall be expressed in the currency of the
invoice issued by the Party making the sale together with the United
States dollars equivalent of the royalty payable, calculated using the
rate of exchange published in the Wall Street Journal for such currency
on the last business day of the concerned Calendar Quarter. Reports and
payments shall be due [***]. LICENSEE shall keep complete and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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accurate records in sufficient detail to properly reflect all gross sales
and Net Sales and to enable the royalties payable hereunder to be
determined.
5.2 AUDITS.
5.2.1. Upon the written request of LICENSOR and not more than once in each
calendar year, LICENSEE shall permit an independent certified public
accounting firm of internationally recognized standing, selected by
LICENSOR and reasonably acceptable to LICENSEE, at LlCENSOR's expense, to
have access during normal business hours to such of the records of
LICENSEE as may be reasonably necessary to [***]. The accounting firm
shall disclose to LICENSOR only whether the records are correct or not
and the specific details concerning any discrepancies. No other
information shall be shared.
5.2.2. If such accounting firm concludes that additional royalties were owed
during such period, LICENSEE shall pay the [***] LICENSOR delivers to
LICENSEE such accounting firm's written report so concluding. The fees
charged by such accounting firm shall be paid by LICENSOR; provided,
however, if the audit discloses that the royalties payable by LICENSEE
for the audited period are more than [***] actually paid for such period,
then LICENSEE shall pay the reasonable fees and expenses charged by such
accounting firm.
5.2.3. LICENSEE shall include in each permitted sublicense granted by it
pursuant to the Agreement a provision requiring the SUBLICENSEE to make
reports to LICENSEE, to keep and maintain records of sales made pursuant
to such sublicense and to grant access to such records by LlCENSOR's
independent accountant to the same extent required with respect to
LICENSEE's records under this Agreement.
5.2.4. Except in the case of circumstances which would have prevented an error
or anomaly from being disclosed during the audit hereabove mentioned,
such as fraud or other failure to provide accurate information, upon the
expiration of [***] following the end of any calendar year, the
calculation of royalties payable with respect to such year shall be
binding and conclusive upon LICENSOR, and LICENSEE, its Affiliates and
Sublicensees shall be released from any liability or accountability with
respect to royalties for such year.
5.3 CONFIDENTIAL FINANCIAL INFORMATION.
LICENSOR shall treat all financial information subject to review under
this Article 5 or under any sublicense agreement as confidential, and
shall cause its accounting firm to retain all such financial information
in confidence.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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ARTICLE 6 - PAYMENTS.
6.1 PAYMENT TERM.
Royalties shown to have accrued by each royalty report provided for under
Article 4 of this Agreement shall be due [********]. Payment of royalties
in whole or in part may be made in advance of such due date.
6.2 PAYMENT METHOD.
All payments by LICENSEE to LICENSOR under this Agreement shall be paid
in United States dollars, and all such payments shall be made without
deduction of bank transfer fees by bank wire transfer in immediately
available funds to the following bank account:
[********]
6.3 WITHHOLDING TAXES.
Royalties shall be paid by LICENSEE to LICENSOR, after deduction of any
applicable withholding taxes. Prior to any payment by LICENSEE to
LICENSOR, LICENSEE shall provide to LICENSOR any forms required to attest
LlCENSOR's fiscal domiciliation in order to allow LICENSEE to claim
application of the reduced rate of withholding tax provided for in any
applicable bilateral fiscal convention. LICENSOR shall promptly return
such forms to LICENSEE. In the event LICENSOR fails to promptly return
such forms duly filled and signed, LICENSEE shall declare and pay
withholding tax at the common law rate of the applicable corporate income
tax, and such tax shall then be deducted from the corresponding payment
by LICENSEE to LICENSOR. LICENSEE shall pay withholding tax to the proper
taxing authority and proof of payment of such tax shall be secured and
sent to LICENSOR as evidence of such payment. If, in the opinion of
either Party, the provisions of this Section become extremely burdensome,
the Parties agree to meet and discuss such other options as may be
available to them.
ARTICLE 7 - INVENTIONS AND PATENTS.
7.1 OWNERSHIP OF INVENTIONS.
The entire right and title to technology, whether or not patentable, and
any patent applications or patents based thereon, made or conceived
during the term of this Agreement which directly relates to and are not
severable from LICENSOR Technology and which are Improvements thereto
and/or more generally relate to PRODUCT (a) by employees or others acting
solely on behalf of LICENSOR or its Affiliates shall be
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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owned solely by LICENSOR (the LICENSOR Improvements" as more fully
defined in Article 1 hereof), (b) by employees or others acting solely on
behalf of LICENSEE or its Affiliates shall be owned solely by LICENSEE
and (c) by both employees or others acting on behalf of LICENSEE or its
Affiliates, and employees or others acting on behalf of LICENSOR and its
Affiliates shall be jointly owned by LICENSEE and LICENSOR.
LICENSOR and LICENSEE each hereby represents that all employees and other
Persons acting on its behalf in performing its obligations under this
Agreement shall be obligated under a binding written agreement to assign
to it, or as it shall direct, all Improvements conceived or reduced to
practice by such employees or other Persons.
7.2 PATENT PROSECUTION AND MAINTENANCE.
LICENSED PATENTS. LICENSOR shall be responsible for and shall control the
preparation, filing, prosecution, grant and maintenance of all LICENSED
PATENTS. LICENSOR shall prepare, file, prosecute and maintain such
LICENSED PATENTS in good faith consistent with its customary patent
policy and its reasonable business judgement, and shall consider in good
faith the interests of LICENSEE in so doing.
JOINT INVENTIONS. As to any joint inventions made by the Parties during
the term of this Agreement, LICENSEE shall have the first right to file
patent applications with respect to such inventions in the name of both
Parties. LICENSEE may elect not to file and if it does so, LICENSOR shall
have the right to file the patent application in the name of both
Parties. In each case regarding joint inventions, the filing Party shall
give the non-filing Party an opportunity to review the text of the
application before filing, shall consult with the non-filing Party with
respect thereto and shall supply the non-filing Party with a copy of the
applications as filed, together with notice of its filing date and serial
number and [***] the out-of-pocket costs and expenses of the filing Party
shall be reimbursed by the other Party. Both Parties shall keep the other
advised of the status of actual and prospective patent application
filings and upon request, provide advanced copies of any documents
related to such filings and thereafter to the prosecution and maintenance
of all patent applications and patents.
COSTS. With respect to all filings hereunder, the filing Party shall be
responsible for payment of all costs and expenses related to such
filings, prosecution and maintenance, unless relieved of same pursuant to
Section 7.3 hereinafter, and except for jointly owned patents, for which
[***] of all such costs and expenses shall be reimbursed to the filing
Party by the other Party.
7.3 OPTION TO PROSECUTE AND MAINTAIN PATENTS.
LICENSOR shall give notice to LICENSEE of any intention to cease
prosecution and/or maintenance, or not to proceed with an extension, of
LICENSED PATENTS and, in such case, shall permit LICENSEE, at LICENSEE's
sole discretion, to continue prosecution or maintenance or proceed with
the extension at its own expenses. If LICENSEE elects to continue
prosecution or maintenance or to proceed with the extension, LICENSOR
shall execute such documents and perform such acts at LICENSEE's expense
as may be
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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reasonably necessary to effect an assignment of such LICENSED PATENTS to
LICENSEE in a timely manner, and more generally to permit LICENSEE to
continue such prosecution and maintenance or to proceed with the
extension. Any patents and patent applications so assigned shall not be
considered as LICENSED PATENTS as of the date of such assignment. No
royalties shall be payable by LICENSEE on sales of PRODUCTS covered only
by a Valid Patent Claim of a LICENSED PATENT which has been assigned to
LICENSEE pursuant to this Section 7.3.
7.4 INTERFERENCE, OPPOSITION, REEXAMINATION AND REISSUE.
(i) The Parties shall use their respective best efforts to
within [***] of learning of any interference, opposition,
reexamination or reissue event, inform the other Party of
any request for, or filing or declaration thereof relating
to LICENSED PATENTS. The Parties shall thereafter consult
and cooperate fully to determine the course of action with
respect to any such proceeding. Both Parties shall have the
right to review and comment on any submission to be made in
connection with any such proceeding.
(ii) LICENSOR shall not institute any reexamination or reissue
proceeding relating to LICENSED PATENTS without having
first consulted LICENSEE.
(iii) In connection with any interference, opposition, reissue or
reexamination proceeding relating to LICENSED PATENTS, the
Parties shall cooperate fully and shall provide each other
with any information or assistance that either Party may
reasonably request. LICENSOR shall keep LICENSEE informed
of developments in any such action or proceeding,
including, to the extent permissible, the status of any
settlement negotiations and the terms of any offer related
thereto.
(iv) LICENSOR shall bear the expense of any interference,
opposition, reexamination or reissue proceeding relating to
LICENSED PATENTS.
7.5 ENFORCEMENT AND DEFENSE.
(i) Each Party shall give the other notice of either (a) any
infringement of LICENSED PATENTS, or (b) any
misappropriation or misuse of LICENSED KNOW-HOW that has
come to its attention. The Parties shall thereafter consult
and cooperate fully to determine a course of action,
including but not limited to the commencement of legal
action by either or both Parties to terminate any
infringement of LICENSED PATENTS or any misappropriation or
misuse of LICENSED KNOW-HOW.
(ii) In the event that LICENSED PATENTS are infringed by any
Third-Party with respect to a PRODUCT in the Field of Use,
LICENSEE, upon notice to LICENSOR, shall for a period of
[***] have the first right, but not the obligation, to
institute and prosecute any action or proceeding under
LICENSED PATENTS with respect to such infringement, by
counsel of
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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its choice, or to control the defense of any declaratory
judgment action arising from such infringement or from the
misappropriation or misuse of LICENSED KNOW-HOW, at its own
expense and in the name of both Parties. LICENSEE shall not
otherwise settle, compromise or take any action in such
litigation which diminish, limit or inhibit the scope,
validity or enforceability of LICENSED PATENTS without the
express permission of LICENSOR. LICENSEE shall keep
LICENSOR advised of the progress of such proceedings.
(iii) In the event that a Third-Party is infringing any LICENSED
PATENTS with respect to a PRODUCT in the Field of Use and
LICENSEE does not elect to institute an action, LICENSOR,
upon notice to LICENSEE, shall have the right, but not the
obligation, to institute and prosecute any action or
proceeding under LICENSED PATENTS with respect to such
infringement, by counsel of its choice, or to control the
defense of any declaratory judgment action arising from
such infringement or from the misappropriation or misuse of
LICENSED KNOW-HOW, at its own expense and in the name of
both Parties. LICENSOR shall not settle, compromise or take
any action in such litigation which diminish, limit or
inhibit the scope, validity or enforceability of LICENSED
PATENTS without the prior approval of LICENSEE, which shall
not be unreasonably withheld.
(iv) With respect to any action to terminate any infringement of
LICENSED PATENTS or any misappropriation or misuse of
LICENSED KNOW-HOW, the Parties shall cooperate fully and
shall provide each other with any information and
assistance that either Party may reasonably request. In
particular, either Party shall execute such documents
necessary for the other Party to initiate and prosecute the
action or proceeding and cause its Affiliates, Sublicensees
and LICENSEE to execute all such documents, if required. In
the event that either Party is unable to initiate or
prosecute an action solely in its own name, the other Party
shall then join such action voluntarily. Each Party shall
keep the other informed of the development of any action or
proceeding including, to the extent permissible by law, the
status of any settlement negotiations and the terms of any
offer related thereto.
(v) Any recovery obtained by either or both Parties in
connection with or as a result of any action or proceeding
contemplated by this Section 8.3, whether by settlement or
otherwise, shall be allocated in order as follows:
(a) The Party which initiated and prosecuted the action
shall recoup all of its costs and expenses incurred
in connection with the action (provided that if
LICENSEE was the initiating Party and that the
action proceeds were not sufficient for LICENSEE to
recoup all its costs and expenses, then LICENSEE
shall be allowed to deduct the
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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balance of its unrecovered costs and expenses from
royalties payable to LICENSOR under Article 4
hereof);
(b) The other Party shall then, to the extent possible,
recover its costs and expenses incurred in
connection with the action; and
(c) The amounts of any recovery remaining shall then be
allocated between the Parties with LICENSEE
receiving all amounts in respect of damages in the
Field of Use and LICENSOR receiving all amounts in
respect of damages out of the Field of Use, except
that any amounts recovered in connection with
infringement actions relating to jointly-owned
patents shall be equally shared between the Parties.
(vi) LICENSOR shall inform LICENSEE of any certification
regarding any LICENSED PATENTS it has received pursuant to
21 United States Code Sections355(b)(2)(A)(iv) or
(j)(2)(A)(vii)(lV), or any similar provision in other
countries, and shall provide LICENSEE with a copy of such
certification within [***] of receipt. Both Parties rights
with respect to the initiation and prosecution of any legal
action as a result of such certification or any recovery
obtained as a result of such legal action shall be as
defined in paragraphs (a) to (c) of this Section 7.6.
7.6 NOTICE OF PATENT EVENTS.
LICENSOR shall promptly give notice to LICENSEE of the grant, lapse,
revocation, surrender or invalidation of any LICENSED PATENTS.
7.7 PATENT TERM RESTORATION.
LICENSOR shall notify LICENSEE of (a) the issuance of each U.S. patent
included within the LICENSED PATENTS, giving the date of issue and patent
number for each such patent, and (b) each notice pertaining to any patent
included within the LICENSED PATENTS which it receives as patent owner
pursuant to the United Sates Drug Price Competition and Patent Term
Restoration Act of 1984 (hereinafter called the "Act"), including notices
pursuant to Sections 101 and 103 of the Act from Persons who have filed a
biological license application ("BLA") or an abbreviated new drug
application ("ANDA"), whichever is applicable. Such notices shall be
given promptly, but in any event within five (5) calendar days of each
such patent's date of issue or receipt of each such notice pursuant to
the Act, whichever is applicable. LICENSOR shall notify LICENSEE of each
filing for patent term restoration under the Act, any allegations of
failure to show due diligence and all awards of patent term restoration
(extensions) with respect to the LICENSED PATENTS.
Likewise, LICENSOR or LICENSEE, as the case may be, shall inform the
other Party of patent extensions and periods of data exclusivity in the
rest of the world regarding any PRODUCTS and more generally the Parties
shall diligently cooperate with respect to any procedures for patent and
period of data exclusivity extensions, such as but not limited to
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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Supplementary Protection Certificates, the above-mentioned Patent Term
Restoration and corresponding GATT regulations.
ARTICLE 8 - GENERAL PROVISIONS.
8.1 CONFIDENTIALITY.
(a) -GENERAL
Except as expressly set forth in this Section 8, each party shall cause
its respective Affiliates, officers, directors, employees, agents and
subcontractors (collectively, "Representatives") to keep confidential any
and all technical, commercial, scientific and other data, processes,
documents or other information (whether in oral form and identified as
confidential within 30 days after the date of disclosure, or if written
form, if marked as "confidential" at the time of disclosure) or physical
object (including, without limitation, intellectual property, marketing
data, agreements between any party and a third-party, license
applications, and business plans and projections of any party ) that have
been marked as "confidential" at the time of disclosure) acquired from
the other party (the "Other Party"), its Affiliates or its
Representatives after the Effective Date ("Confidential Information"),
and each party shall not disclose directly or indirectly, and shall cause
its Representatives not to disclose directly or indirectly, any
Confidential Information to anyone outside such Person, in the case of
LICENSEE, its Sublicensees, and each of their Affiliates and their
respective Representatives, except that the foregoing restriction shall
not apply to any information disclosed hereunder to any party, if such
Person (the "Receiving Person") can demonstrate that such Confidential
Information:
(i) is or hereafter becomes generally available other than by
reason of any breach or default by the Receiving Person,
any of its Affiliates or any Representative of the
foregoing with respect to a confidentiality obligation
under this Agreement;
(ii) was already known to the Receiving Person or such affiliate
or Representative;
(iii) is disclosed to the Receiving Person or such affiliate or
Representative by a third party who has the right to
disclose such information;
(iv) is independently developed by the Receiving Person;
(v) based on such Person's good faith judgement with the advice
of counsel, is otherwise required to be disclosed in
compliance with applicable legal requirements to a public
authority.
Whenever the Receiving Person becomes aware of any state of facts which
would or might result in disclosure of Confidential Information pursuant
to subparagraph (v) above, it shall, if possible, promptly notify the
Person making disclosure "Disclosing Person") prior to any such
disclosure so that the Disclosing Person may seek a protective
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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order or other appropriate remedy and/or waive compliance with the
provisions of this Agreement.
In any event, if the Receiving Person is unable to promptly notify the
Disclosing Person or if such protective order or other remedy is not
obtained, or if the Disclosing Person waives compliance with the
provisions of this Agreement, the Receiving Person will furnish only that
portion of the information which it is advised by counsel is legally
required and will exercise reasonable efforts to obtain assurance that
confidential treatment will be accorded the Confidential Information.
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 except as required by the relevant laws,
enjoining or restraining any other party from any violation or threatened
violation of this Section 8.1.
(b) -USE OF CONFIDENTIAL INFORMATION
Each party agrees that no Confidential Information shall:
(i) be used in its own business except as necessary to exercise
the rights and obligations of such Party under this
Agreement;
(ii) be assigned, licensed, sublicensed, marketed, transferred
or loaned, directly or indirectly to any third party other
than a Representative or an Affiliate Representative of
such party, except as necessary or contemplated for the
exercise of the rights and obligations of the Parties under
this Agreement;
The obligations set forth in this Section 8.1 shall extend to
copies, if any, of Confidential Information made by any
Representatives referred to in paragraph (a) and to documents
prepared by such Persons which embody or contain Confidential
Information.
(c) -PROTECTION OF CONFIDENTIAL INFORMATION
Each party shall deal with Confidential Information so as to
protect it from disclosure with a degree of care not less than
that used by it in dealing with its own information intended to
remain exclusively within its knowledge and shall take reasonable
steps to minimize the risk of disclosure of Confidential
Information which shall include, without limitation, ensuring that
only those Persons who have a bona fide need to know such
Confidential Information for purposes permitted or contemplated by
this Agreement shall have access thereto. Each party, shall notify
all of its Representatives who have access to Confidential
Information of its confidentiality and the care therefor required,
and shall obtain from any Affiliate or any agent or subcontractor
who is a Representative that is permitted access to such
Confidential Information in accordance with this Section 8.1, an
agreement of confidentiality incorporating the restrictions set
forth herein.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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(d) -SURVIVAL OF OBLIGATIONS
The obligations set forth in this Section 8.1 shall survive the
termination of this Agreement for a period of [***].
(e) -RETURN OF CONFIDENTIAL INFORMATION
Within thirty (30) days after the termination of this Agreement,
the Receiving Person shall (and shall cause its Affiliates'
Representatives and its Affiliates to) return to the Disclosing
Person or destroy all related documents and tangible items then in
its possession which it has received from the Disclosing Person or
any affiliate or Representative thereof pertaining, referring or
relating to the Disclosing Person's Confidential Information, as
well as all copies, summaries, records, descriptions,
modifications, and duplications that it, or any of its Affiliates
or Representatives, has made from the documents or tangible items
received from the Disclosing Person or any affiliate or
Representative thereof; provided, however, that the Receiving
Person may retain one copy of each document in its legal files
solely to permit the Receiving Person to continue to comply with
its obligations hereunder and, in addition, may upon notice to the
Disclosing Person, retain in its legal files or in the office of
outside legal counsel one copy of any document solely for use in
any pending legal proceeding to which such document relates.
Notwithstanding the foregoing, this provision shall not apply with
respect to Confidential Information obtained from LICENSOR that is
comprised of LICENSOR KNOW-HOW, in the event of expiration of the
Agreement in accordance with its terms or termination of this
Agreement for breach by LICENSOR.
8.2 TERM AND TERMINATION.
8.2.1. EXPIRATION.
Unless terminated earlier pursuant to this Article 8, the Agreement shall
expire on the [***] under the Agreement in accordance with the Section 4
of this Agreement.
8.2.2. TERMINATION BY LICENSEE.
LICENSEE shall have the right at any time, in its sole discretion, to
terminate this Agreement, by giving not less than [***] prior written
notice to LICENSOR of such termination.
8.2.3. TERMINATION FOR CAUSE.
(i) Either Party may terminate this Agreement, at its option,
upon or after the breach of any material provision of the
Agreement by the other Party, if such breaching Party has
not cured such breach within [***] after written notice
thereof from the other Party.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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(ii) LICENSEE or LICENSOR may terminate this Agreement upon
written notice to the other party if the other party makes
a general assignment for the benefit of creditors, is the
subject of proceedings in voluntary or involuntary
bankruptcy or has a receiver or trustee appointed for
substantially all of its property; PROVIDED that in the
case of an involuntary bankruptcy proceeding such right to
terminate shall only become effective if the other party
consents thereto or such proceeding is not dismissed within
[***] after the filing thereof.
(iii) Each of the parties hereto acknowledges and agrees that
this Agreement (i) constitutes a license of Intellectual
Property (as such term is defined in the United States
Bankruptcy Code, as amended (the "Code"), and (ii) is an
executory contract, with significant obligations to be
performed by each party hereto. The parties agree that
LICENSEE as LICENSEE may fully exercise all of its rights
and elections under the Code, including, without
limitation, those set forth in Section 365 (n) of the Code.
The parties further agree that, in the event that LICENSEE
elects to retain its rights as a licensee under the Code,
LICENSEE shall be entitled to complete access to the
LICENSOR Technology licensed to it hereunder and all
embodiments of such technology. Such embodiments of the
LICENSOR Technology shall be delivered to LICENSEE not
later than (a) the commencement of bankruptcy proceedings
against LICENSOR, unless LICENSOR elects to perform its
obligations under the Agreement, or (b) if not delivered
under (a) above, upon the rejection of the Agreement by or
on behalf of LICENSOR.
8.2.4. EFFECT OF EXPIRATION AND TERMINATION.
Expiration or termination of the Agreement shall not relieve the Parties
of any obligation accruing prior to such expiration or termination.
8.3 FORCE MAJEURE.
No Party (or any of its Affiliates) shall be held liable or responsible
to the other Party (or any of its Affiliates) nor be deemed to have
defaulted under or breached the Agreement for failure or delay in
fulfilling or performing any term of the Agreement when such failure or
delay is caused by or results from causes beyond the reasonable control
of the affected Party (or any of its Affiliates) including but not
limited to fire, floods, embargoes, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotions, strikes,
lockouts or other labor disturbances, acts of God or acts, omissions or
delays in acting by any governmental authority or the other Party
(collectively, "Events of Force Majeure"); provided, however, that the
affected Party (i) shall immediately notify the other Party of the
occurrence of any such Event of Force Majeure and (ii) shall exert all
reasonable efforts to eliminate, cure or overcome any such Event of Force
Majeure and to resume performance of its covenants with all possible
speed; and provided, further, that nothing contained herein shall require
any Party to settle on terms unsatisfactory to such Party any strike,
lockout or other labor difficulty, any investigation
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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or proceeding by any governmental authority or any litigation by any
Third-Party. Notwithstanding the foregoing, to the extent that an
Event of Force Majeure continues for a period in excess of [***] the
affected Party shall promptly notify in writing the other Party of
such Event of Force Majeure and [***] of the other Party's receipt of
such notice, the Parties agree to negotiate in good faith either (i)
to resolve the Event of Force Majeure, if possible, (ii) to extend by
mutual agreement the time period to resolve, eliminate, cure or
overcome such Event of Force Majeure, (iii) to amend this Agreement to
the extent reasonably 'possible, or (iv) to terminate this Agreement.
8.4 ASSIGNMENT.
This Agreement may not be assigned or otherwise transferred, nor, except
as expressly provided hereunder, may any right or obligations hereunder
be assigned or transferred to any Third-Party by either Party without the
consent of the other Party; PROVIDED, HOWEVER, that either Party may,
without such consent, assign this Agreement and its rights and
obligations hereunder to any of its Affiliates or in connection with the
transfer or sale of all or substantially all of its business, or in the
event of its merger or consolidation or change in control or similar
transaction. Any permitted assignee shall assume all obligations of its
assignor under this Agreement. Without limiting the generality of the
foregoing, without the prior written consent of LICENSEE, LICENSOR shall
not under any circumstances assign or transfer any LICENSOR Technology
unless (i) all of the rights and obligations of LICENSOR under this
Agreement are assigned to the same transferee(s) concurrently therewith,
and (ii) such transferee(s) expressly assume(s) in writing the
performance of all terms and conditions of this Agreement to be performed
by LICENSOR and such assignment shall not relieved the assignor of any of
its obligations under this Agreement. Each Party acknowledges that the
other Party would suffer irreparable injury in the event of any breach of
this Article 8 and that therefore the remedy at law for any breach or
threatened breach hereof by any Party shall be inadequate. Accordingly,
upon a breach or threatened breach hereof by any Party, the other Party
shall, in addition and without prejudice to any other rights and remedies
it may have, be entitled as a matter of right, without proof of actual
damages, to seek specific performance hereof and to such other injunctive
or equitable relief to enforce, or prevent any violations (whether
anticipatory, continuing or future) hereof.
8.5 ADVERSE EXPERIENCE REPORTING.
During the term of the Agreement, each Party shall notify the other
immediately of any information (howsoever obtained and from whatever
source) concerning any unexpected side effect, injury, toxicity or
sensitivity reaction, or any unexpected incidence, and the severity
thereof, associated with the clinical uses, studies, investigations,
tests and marketing of a PRODUCTS. For purposes of this Section 8.5,
"unexpected" shall mean (x) for a nonmarketed PRODUCTS, an experience
that is not identified in nature, severity or frequency in the current
clinical investigator's confidential information brochure, and (y) for a
marketed PRODUCTS, an experience which is not listed in the current
labeling for such PRODUCTS, and includes an event that may be
symptomatically and patho-physiologically related to an event listed in
the labeling but differs from the event because of increased frequency or
greater severity or specificity. Each Party further shall
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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immediately notify the other of any information received regarding any
threatened or pending action by an agency which may affect the safety
and efficacy claims of a Product. Upon receipt of any such
information, the Parties shall consult with each other in an effort to
arrive at a mutually acceptable procedure for taking appropriate
action; provided, however, that nothing contained herein shall be
construed as restricting either Party's right to make a timely report
of such matter to any government agency or take other action that it
deems to be appropriate or required by applicable law or regulation.
8.6 SEVERABILITY.
Each Party hereby agrees that it does not intend to violate any public
policy, statutory or common laws, rules, regulations, treaty or decision
of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of
this Agreement be or become invalid, the Parties hereto shall substitute,
by mutual consent, valid provisions for such invalid provisions which
valid provisions in their economic effect are sufficiently similar to the
invalid provisions that it can be reasonably assumed that the Parties
would have entered into this Agreement with such provisions. In case such
provisions cannot be agreed upon, the invalidity of one or several
provisions of this Agreement shall not affect the validity of this
Agreement as a whole, unless the invalid provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that the
Parties would not have entered into this Agreement without the invalid
provisions.
8.7 MISCELLANEOUS.
8.7.1. NOTICES.
Any consent, notice or report required or permitted to be given or made
under this Agreement by one of the Parties hereto to the other shall be
in writing, delivered Personally or by facsimile (and promptly confirmed
by Personal delivery, first class air mail or courier), first class air
mail or courier, postage prepaid (where applicable), addressed to such
other Party at its address indicated below, or to such other address as
the addressee shall have last furnished in writing to the addressor and
(except as otherwise provided in this Agreement) shall be effective upon
receipt by the addressee.
IF TO LICENSOR:
LICENSOR
Pasteur Merieux Serums & Vaccins
58 avenue Leclerc
69007 Lyon, France
Attention: General Counsel
Telefax: 33.4.37.37.70.61
Telephone: 33.4.37.37.01.00
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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IF TO LICENSEE:
LICENSEE
1430 O'Brien Drive, suite E,
Menlo Park, CA 94025
USA
Attention: CEO
Telefax: 650.462.1000
Telephone: 650.462.1003
8.7.2. APPLICABLE LAW.
The Agreement shall be governed by and construed in accordance with the
laws of State of California without regard to the conflict of law
principles thereof.
8.7.3. REPRESENTATIONS, WARRANTIES AND COVENANTS.
8.7.3.1 REPRESENTATIONS AND WARRANTIES OF LICENSEE.
(a) LICENSEE is a corporation duly organized and existing under the
laws of the State of California, with the corporate power to own,
lease and operate its properties and to carry on its business as
now conducted.
(b) LICENSEE has all necessary corporate power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby.
(c) The execution, delivery or performance of this Agreement will not
conflict with or result in a breach of, or entitle any party
thereto to terminate, any material agreement or instrument to
which LICENSEE is a party, or by which any of its assets or
properties is bound.
(d) This Agreement has been duly authorized, executed and delivered by
LICENSEE and constitutes a legal, valid and binding agreement of
LICENSEE, enforceable against LICENSEE in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally.
8.7.3.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR.
(a) LICENSOR is a corporation duly incorporated and validly existing
as a corporation in good standing under the laws of France with
the corporate power to own, lease and operate its properties and
to carry on its business as now conducted.
(b) LICENSOR has all necessary corporate power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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(c) The execution, delivery and performance of this Agreement by
LICENSOR does not conflict with or contravene its certificate of
incorporation or by-laws, nor will the execution, delivery or
performance of this Agreement conflict with or result in a breach
of, or entitle any party thereto to terminate, any agreement or
instrument to which LICENSOR is a party, or by which any of its
assets or properties is bound.
(d) This Agreement has been duly authorized, executed and delivered by
LICENSOR and constitutes a legal, valid and binding agreement of
LICENSOR, enforceable against LICENSOR in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally.
(e) All LICENSED PATENTS listed on Schedule A as amended from time to
time have been registered in, filed in or issued by the
appropriate patent offices of each jurisdiction as indicated on
such Schedule A, and in each case is currently in effect and all
maintenance fees and renewals thereof have been duly made with
respect thereto. LICENSOR owns or has full and exclusive rights to
use and exploit under licenses (and to license or sublicense) all
its rights under such LICENSED PATENTS and the LICENSED KNOW-HOW.
There have been no material claims made against LICENSOR asserting
the invalidity or non-enforceability of, or with respect to such
LICENSED PATENTS, the misuse of such LICENSED PATENTS or the
LICENSED KNOW-HOW, nor is LICENSOR aware that any such claims
exist. LICENSOR has not received a notice of conflict of such
LICENSED PATENTS or the LICENSED KNOW-HOW with the asserted rights
of others, or otherwise challenging its rights to use any of such
LICENSED PATENTS, or the LICENSED KNOW-HOW. None of the rights of
LICENSOR under the LICENSED PATENTS or LICENSED KNOW-HOW shall be
adversely affected by the execution, delivery or performance of
this Agreement, or the consummation of the transaction
contemplated herein. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
THIS SECTION, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS
ANY WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR VALIDITY OF ANY PATENT RIGHTS PENDING.
8.7.4. DISPUTE RESOLUTION.
Any and all disputes arising in connection with this Agreement that will
not be solved on an amicable basis between the parties shall be finally
settled by arbitration under the Rules of Conciliation and Arbitration of
the International Chamber of Commerce, rules that the Parties recognize
that they know. The arbitration shall be conducted in Paris, France, in
English by one arbitrator if the dispute involves a claim of damage of
and [***] appointed in accordance with the said rules. The arbitrator(s)
shall apply French law to the merits of the case. The arbitration shall
be final and binding upon the parties.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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in the event of a dispute regarding any payments owing under this
Agreement, all undisputed Agreements shall be paid when due and the
balance, if any, promptly after resolution of the dispute.
8.7.5. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the Parties with
respect to the subject matter hereof. All express or implied agreements
and understandings, either oral or written, heretofore made, including
but not limited to Option Agreements to the extent, but only to the
extent, they are inconsistent with any provisions of this Agreement (in
which case the relevant provision of this Agreement shall prevail) are
expressly superseded by this Agreement. This Agreement may be amended, or
any term hereof modified, only by a written instrument duly executed by
both Parties hereto.
8.7.6. INDEPENDENT CONTRACTORS.
LICENSOR and LICENSEE each acknowledge that they shall be independent
contractors and that the relationship between the two Parties shall not
constitute a partnership, joint venture or agency. Neither LICENSOR nor
LICENSEE shall have the authority to make any statements, representations
or commitments of any kind, or to take any action, which shall be binding
on the other Party, the prior consent of the other Party to do so.
8.7.7. AFFILIATES.
Each Party shall cause its respective Affiliates to comply fully with the
provisions of this Agreement to the extent such provisions specifically
relate to, or are intended to specifically relate to, such Affiliates, as
though such Affiliates were expressly named as joint obligors hereunder.
8.7.8. WAIVER.
The waiver by either Party hereto of any right hereunder or the failure
to perform or of a breach by the other Party shall not be deemed a waiver
of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.
8.7.9. NO IMPLIED LICENSE.
Nothing in this Agreement shall be deemed to constitute, by implication
or otherwise, the grant by LICENSEE to LICENSOR, or by LICENSOR to
LICENSEE, of any license to, or interest in, or other rights under any
patent, patent application, proprietary know-how, trade secrets or other
intellectual property rights owned or possessed by LICENSEE or LICENSOR,
whichever is applicable, except as expressly provided for herein. For the
avoidance of doubt, LICENSEE shall at all times own all right, title and
interest in and to COC ab and all intellectual and industrial property
rights relating thereto, in whatever form and however derived or
modified, and LICENSOR shall make any assignments necessary from time to
time to effect such ownership.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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8.7.10. LIABILITY LIMITATION.
In no event shall either party be liable with respect to any subject
matter of this agreement under any contract, negligence, strict liability
or other legal or equitable theory for any incidental or consequential
damages, lost profits or lost data.
8.7.11. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.
For LICENSOR.
By: /s/ Michel Greco
-------------------------------
Name: Michel GRECO
Title: DIRECTEUR GENERAL
For LICENSEE.
By: /s/ Stanley Kaplan
-------------------------------
Name: Stanley KAPLAN
Title: CEO & President
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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- --------------------------------------------------------------------------------
SCHEDULE A
- --------------------------------------------------------------------------------
LICENSED PATENTS
US Patent nDEG. 5.234.991 of August 10, 1993 "POROUS MINERAL SUPPORT COATED
WITH AN ANIMATED POLYSACCHARIDE POLYMER
US Patent nDEG. 4.849.508 of July 18, 1989 "PASTEURIZATION OF IMMUNOGLOBULIN
SOLUTIONS"
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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SCHEDULE B
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LICENSED KNOW-HOW
[***]
[***]
[***]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 10.16
------------------------------------------
MANUFACTURING AND SUPPLY AGREEMENT
COC AB FAB'2 SOLUTION
------------------------------------------
This Agreement is entered into as of 08 June 1999 by and between
- - PASTEUR MERIEUX SERUMS & VACCINS, a PASTEUR MERIEUX CONNAUGHT company,
SOCIETE ANONYME, existing and organized under the laws of the Republic of
France, having its registered head office at 58, avenue Leclerc, 69007,
LYON, FRANCE, which capital is 1.698.859.000 FRF, which registered number
in LYON is B 349 505 370
Represented by Mr. Michel GRECO, acting as Directeur General.
(hereinafter referred to as "PMC")
OF THE FIRST PART,
AND :
- - DRUG ABUSE SCIENCES SA a corporation existing and organized under the laws
of France having its registered head office at, 2 rue de Crucy, 44000
Nantes, France.
Represented by Mrs Maryvonne HIANCE, President,
And
- - DRUG ABUSE SCIENCES INC a corporation existing and organized under the laws
of the United States its registered head office at 1430 O'Brien Drive,
Suite E, Menlo Park CA 94025,
Represented by Mr Stanley Kaplan, its Chief Executive Officer,
(hereinafter collectively referred to as "DAS")
OF THE SECOND PART,
<PAGE>
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
WITNESSETH
WHEREAS, DAS is a specialty pharmaceutical company dedicated
to drug addiction care applying a disease approach to the treatment of
substance abuse.
WHEREAS, PASTEUR MERIEUX Serums & Vaccins is a leading
manufacturer of human vaccines and other related immunological products for
prevention, treatment and cure of diseases in human beings and has extensive
world-wide research, development, manufacturing and marketing operations in
that field and has developed a certain know-how in the Fab'2 technology.
WHEREAS, DAS has approached PMC in to manufacture and supply
for DAS a product manufactured according to the Fab'2 technology.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "ADDITIONAL EQUIPMENT" shall mean any and all equipment,
other than the Equipment required for the manufacturing of the Equine Plasma
which shall be purchased by PMC pursuant to an Approved Proposal contemplated
in Article 11 herein.
1.2 "ADDITIONAL EQUIPMENT COSTS" shall mean the cost of
Additional Equipment.
1.3 "COMMERCIAL PERIOD" shall mean the period beginning on
the date of First Commercial Sale and continuing throughout the term of this
Agreement.
1.4 "IDAS CERTIFICATE" shall mean the certificate
accompanying the Immunogen provided by DAS to PMC pursuant to Article 3.3 of
this Agreement. A model of a DAS Certificate is attached to this Agreement as
Exhibit 4.
1.5 "IDAS PRODUCT" shall mean the COC ab produced by DAS.
1.6 "IDAS SPECIFICATIONS" shall mean the specifications
relating to the production of the PMC Product for use as an active ingredient
in the DAS Product, as more particularly described in Exhibit 3 hereto, which
are the sole and exclusive property of DAS.
1.7 "DEVELOPMENT PERIOD" shall mean the period beginning on
the Effective Date and ending on the date of First Commercial Sale of the DAS
Product, which period includes the preclinical and clinical phases.
1.8 "EFFECTIVE DATE" shall mean the date of execution of this
Agreement.
1.9 "EQUIPMENT" shall mean any and all equipment located at
the PMC Facilities and required for the manufacturing of the Equine Plasma at
the Effective Date.
1.10 "FIRST COMMERCIAL SALE" shall mean the first sale of a
DAS Product, after obtaining the regulatory approvals necessary to commercially
market (whether under Biological License Application or an the orphan drug
status) such DAS Product by DAS to third-parties, in each case for use or
consumption of such DAS Product by the general public.
1.11 "IMMUNOGEN" shall mean the [********]
1.12 "LABORATORY" shall mean the laboratory jointly by the
parties to resolve a Product quality dispute as described in Article 13
hereunder and the name of which is mentioned in Exhibit 7 hereto.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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1.13 "MANUFACTURING ORDER" shall mean an order for PMC
Product placed by DAS, a model of which is attached as Exhibit 6 of this
Agreement.
1.14 "PARTY" shall mean PMC or DAS.
1.15 "PMC PRODUCT" shall mean [********]
1.16 "PMC FACILITIES" shall mean, as applicable, the facility
in which the PMC Product is manufactured, purified, stored and at which quality
control procedures are effected. The names and addresses of the PMC Facilities
are specified in Exhibit 1 hereto.
1.17 "PMC SOP" shall mean the procedures describing (or
otherwise called in French "CAHIER DES CHARGES") the manufacturing and testing
of the PMC Product and set forth in Exhibit 3 hereto which are PMC's sole and
exclusive property
1.18 "PMC CERTIFICATE" shall mean the certificate issued by
PMC at delivery of the PMC Product. A model of a PMC Certificate is attached to
this Agreement as Exhibit 5.
1.19 "PROTOCOL" shall mean the Protocol relating to the COC
ab Protocol mutually agreed upon between the parties required for the
manufacturing of the PMC Product and attached hereto as Exhibit 2.
1.20 "REGULATORY AUTHORITY" shall mean (i) with respect to
the United States, the United States Food and Drug Administration or such other
agency or instrumentality of the United States to which the responsibilities
and authority of the FDA are given or delegated from time to time, (ii) with
respect to France, the Agence du Medicament, or such other agency or
instrumentality of France to which the responsibilities and authority of the
Agence du Medicament are given or delegated from time to time, (iii) with
respect to the European Union, the Agence Europeenne du Medicament and (iv)
with respect to each other jurisdiction, the agencies or instrumentalities of
such jurisdiction having substantially the same responsibilities and authority
of the Agence du Medicament.
ARTICLE 2
PURPOSE OF THE AGREEMENT
Subject to the terms and conditions set forth in this
Agreement, DAS hereby appoints PMC, who accepts, as an exclusive manufacturer
and supplier of the PMC Product according to the Protocol, DAS Specifications
and PMC SOPs. [***].
ARTICLE 3
MANUFACTURING AND SUPPLY OF PMC PRODUCT
3.1 DESCRIPTION OF PMC PRODUCT. Subject to the terms and
conditions of this Agreement and in particular, capacity limitation set forth
in the last sentence of Article 4.4, PMC agrees to manufacture and supply to
DAS, who accepts to purchase, subject to the terms and conditions of this
Agreement, exclusively from PMC, the PMC Product that is produced as bulk
active ingredient and in compliance with the Manufacturing Orders placed by DAS
in accordance with this Agreement.
The manufacturing, packaging and labeling of the PMC Product
shall be in accordance with DAS Specifications.
3.2 RESTRICTIONS. PMC agrees to manufacture and supply the
PMC Product (and any other anti-cocaine immunoglobulin derivatives) [***].
3.3 TRANSFER OF IMMUNOGEN. DAS agrees to provide free of
charge to PMC the Immunogen in reasonable sufficient quantities for PMC to
manufacture quantities of PMC Product according to the annual forecast
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2
<PAGE>
by DAS. PMC shall not be held liable by DAS in the event the Immunogen is not
provided to PMC in the required quantities and timelines. Each quantity of
Immunogen shall be delivered to PMC with a DAS Certificate without which PMC
shall not process such quantity Immunogen. DAS shall advise PMC in advance in a
timely manner of any planned change or modification of the manufacturing
process of the Immunogen, in order to permit PMC to assess the impact, if any,
on the manufacturing of the PMC Product and PMC shall not be held liable in the
event of a change or modification of the process of the Immunogen.
At the beginning of each calendar year, PMC shall provide DAS
with a non-binding immunization schedule which shall be coherent with the
non-binding forecast in order to permit DAS to prepare the Immunogen in
sufficient amounts to insure its availability during this Agreement. DAS shall
promptly inform PMC of any event or problem which could have an impact on the
preparation by DAS of the Immunogen.
PMC agrees to use the Immunogen only for the purpose of
manufacturing PMC Product on behalf of DAS.
3.4 PMC FACILITIES. PMC Product shall be manufactured in the
PMC Facilities unless otherwise mutually agreed by the parties in advance in
writing.
For the purposes of manufacturing PMC Product for use in the
DAS Product, PMC shall maintain the PMC Facilities in compliance with
requirements of applicable Regulatory Authority. In the event that the
applicable Regulatory Authorities require any modifications to the PMC
Facilities for such purposes, PMC shall use all diligent efforts to make such
modifications as soon as possible in accordance with Article 12 hereunder.
3.5 PMC SOPS. The PMC SOPs listed in Exhibit 3 are PMC's sole
and entire property and can be updated or amended by PMC at any moment provided
that if such update or amendment (i) does not affect production or distribution
of the DAS Product, then PMC shall notify DAS in advance with thirty-days prior
notice, (ii) could affect the production or distribution of the DAS Product and
such change is not mandated by a Regulatory Authority, then PMC shall obtain
DAS's prior written consent, and (iii) could affect the production or
distribution of the DAS Product and such change is mandated by a Regulatory
Authority, PMC shall inform DAS as soon as possible and the parties shall work
in good faith to affect such change in a manner that least disrupts production
or distribution of the DAS Product.
ARTICLE 4
FORECASTS AND MANUFACTURING ORDERS
4.1 FORECASTS.
4.1.1 FORECAST DURING DEVELOPMENT PERIOD: The
Parties have agreed upon a forecast of DAS expected requirements of the PMC
Product during the Development Period attached hereto as Exhibit 8. In the
event that DAS reasonably believes that the Development Period may exceed the
period set forth in Exhibit 8, or that it may require during the Development
Period quantities of PMC Product in excess of those set forth in Exhibit 8, it
shall advise PMC in writing and the parties shall update the forecast to
include such increased [***] days after receipt of such notice by PMC. Should
the increase of total quantities of PMC Product [***] of the amount mentioned
in the forecast, the parties shall discuss in good faith the planning of
delivery of such PMC Products in excess.
4.1.2 FORECAST DURING COMMERCIAL PERIOD: During the
year preceding the expected launch of the DAS Product, DAS shall provide within
reasonable time a non-binding forecast of the quantities of PMC Product to be
manufactured on a [***]. This forecast shall be updated by DAS at each year
end, for the following Year 2 and 3, it being understood that all the forecasts
provided by DAS shall be non binding. Within a reasonable period of time
thereafter, PMC shall provide DAS with its proposed immunization schedule for
such period. This non-binding immunization schedule shall be updated by PMC at
each year end, and at such times as DAS's forecasts are adjusted, for the
following two years.
4.2 MANUFACTURING ORDER. At each year end, the parties
shall meet in order to discuss the imminent Manufacturing Orders, immunization
schedule and non-binding forecast modification for the following two years. DAS
shall at least [***] before the date upon which it desires that any shipment of
PMC Product be delivered to it, place a Manufacturing Order in writing with
respect to such shipment. All Manufacturing Orders shall be binding on the
parties when received by PMC.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3
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More precisely, DAS shall provide PMC with a Manufacturing
Order for the immunization of horses and the transformation of the equine
plasma within the following dates:
(I) In January of each year, DAS shall provide its
Manufacturing Orders for delivery of PMC Product
during the third calendar quarter of such year;
(II) In April of each year, DAS shall provide its
Manufacturing Orders for deliver, of PMC Product
during the fourth calendar quarter of such year,
(III) In July of each year, DAS shall provide its
Manufacturing Orders for delivery of PMC Product
during the first calendar quarter of the next year;
and
(IV) In October of each year, DAS shall provide its
Manufacturing Orders for delivery of PMC Product
during the second calendar quarter of the next year
The models of a Manufacturing Order attached in Exhibit 6
cannot be amended by either party unless mutually agreed between the parties.
4.3 INCREASE OF NON-BINDING FORECAST. PMC shall use
commercially reasonable efforts but have no obligation to supply quantities of
PMC Product for Manufacturing Orders that exceed in the second year after [***]
of the aggregate quantities ordered under Manufacturing Orders from the
previous calendar year, and [***] of the aggregate quantities ordered under
Manufacturing Orders from the previous calendar year. In any case, in the event
of [***]amount (as applicable) ordered in the prior year, PMC shall have a [***]
. Notwithstanding the foregoing, the parties acknowledge and agree that the
maximum capacity of PMC Facilities of the production of PMC Product is limited
to the greater of [***].
4.4 FORECASTS AND MANUFACTURING ORDERS IN EXCESS OF CAPACITY.
In the event that Manufacturing Orders or forecasts are likely to require more
than the number of Batches or quantity of PMC Product per year described in
Section 4.3 above, then the Parties shall meet and confer in good faith in
order to discuss an increase capacity at the PMC Facilities, or if such an
increase is not feasible both technically and financially to PMC and DAS, (i)
increase capacity at the PMC Facilities, or if such an increase is not feasible
both technically and financially to PMC and DAS, (ii) use commercially
reasonable efforts to assist DAS to obtain a second source, and PMC shall use
reasonable efforts to assist DAS to implement such second source (including
transfer of the PMC SOPs for use by such second source) to manufacture PMC
Product.
ARTICLE 5
TIMELY MANUFACTURING OF PMC PRODUCT
PMC undertakes to use all diligent efforts to manufacture and
supply DAS with PMC Product in a timely manner, and in full accordance with the
Manufacturing Orders and this Agreement. For information purposes, a non
binding guideline on the time period for the manufacturing of the PMC Product
is specified in Exhibit 9 hereto.
ARTICLE 6
SHIPPING AND RECEPTION
ACCEPTANCE OF THE PMC PRODUCT
6.1 SHIPPING. PMC shall deliver the PMC Product to DAS ex
works at PMC's Facilities at Marcy L'Etoile (France). DAS shall be in charge of
the transportation and insurance of the PMC Product upon delivery of the PMC
Product to DAS.
6.2 DEFECTIVE SHIPMENTS; REMEDIES. In the event that any PMC
Product supplied by PMC fails to conform to the Protocol at delivery, the
parties shall meet and PMC shall at DAS's option either use its best efforts to
replace it as promptly as possible, taking into account the time required to
manufacture quantities of PMC Product, or issue a refund therefor. In the event
that the parties cannot mutually agree on the fact that the PMC Product fails
to perform the Protocol, then the parties shall refer to the quality dispute
procedure described in Article 13 of this Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4
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6.2.1 PRODUCTION RECORDS. PMC agrees to maintain
records in accordance with the applicable rules and regulations relative to the
PMC Facilities, materials used in the PMC Product and batch processing thereof
for a period of not less than five (5) years after the date of manufacture of
the applicable batch of the PMC Product. Upon DAS's request with a seven (7)
business days notice and at DAS's expense, PMC shall permit DAS and/or an
independent auditor selected by DAS to have access to such records from time to
time during ordinary business hours to verify compliance by PMC with such rules
and regulations.
6.3 PMC CERTIFICATE. PMC will provide DAS with the PMC
Certificate and any other documents required by a Regulatory Authority and that
PMC may reasonably provide relating to the PMC Product to enable DAS to conform
to regulatory requirements.
ARTICLE 7
TITLE AND RISK OF LOSS
Title to the PMC Product shall at all times remain with DAS.
Risk of loss to each shipment of PMC Product shall pass to DAS upon its
transfer by PMC to the common carrier as specified in Article 6.1 hereabove.
ARTICLE 8
WARRANTY, DISCLAIMER AND INSURANCE
8.1 WARRANTY. PMC warrants that all PMC Product delivered to
DAS:
- - will have been manufactured in compliance with Good Manufacturing
Practices, in a GMP facility and in compliance any applicable
regulations relating to the supply of the PMC Product as a raw material
for producing DAS Product and in accordance with appropriate rules and
regulations and regulatory guideline for each stage of production;
- - will have been manufactured, packaged, labeled and shipped in
compliance with DAS specifications;
- - shall conform to the Protocol, DAS Specifications and PMC SOPs.
8.2 DISCLAIMER. PMC hereby disclaims any other warranties,
express or implied, including warranties as to its merchantability or fitness
for any particular purpose.
ARTICLE 9
COORDINATION
In order to coordinate the Services, the parties have decided
to create a Manufacturing Coordinating Committee as follows:
9.1 MEMBERS OF THE MANUFACTURING COORDINATING COMMITTEE
The parties have agreed to appoint 2 people of their
organization on the Manufacturing Coordinating Committee which are:
- For PMC
- - A pharmaceutical Affairs representative
- - A qualified Industrial Operation Department Representative
- FOR DAS
- - President of DAS SA or one of its designated persons
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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- - CEO of DAS Inc or one of its designated persons
Internal or external expert may from time to time assist the
Manufacturing Coordinating Committee meetings according to the agenda of such
meeting at the request of one of the party which will inform the other party
within a reasonable delay before the date of the meeting in order to obtain its
approval.
9.2 OBJECTIVE OF THE MANUFACTURING COORDINATING COMMITTEE
The purpose of the Manufacturing Coordinating Committee shall
be to review the Manufacturing of PMC Product at a high quality and in a timely
manner, discuss annual forecasts for PMC Products and any possible adjustments
to the forecast that may be proposed by one of the parties from time to time,
and such other matters as the parties may mutually agree.
9.3 FUNCTIONING
The Manufacturing Coordinating Committee shall meet regularly
at least once each calendar quarter at Marcy-L'Etoile facilities or another
location mutually agreed upon by the Parties. The Manufacturing Coordinating
Committee may take action only by the unanimous written consent of the Parties
(all the members of the Manufacturing Coordinating Committee of one Party
representing one voting right). The minutes of the meetings shall be signed by
each party, each party keeping one copy.
If an issue remains unresolved after consideration by the
Manufacturing Coordinating Committee, the Manufacturing Coordinating Committee
may escalate it to the chief executive officers of the parties for resolution.
ARTICLE 10
PRICE AND PAYMENT
10.1 PRICE.
The price of the PMC Product is set at the Effective
Date :
[***] per gram of PMC Product.
This Price [***].
10.2 PAYMENT. PMC shall invoice DAS for any batch of PMC
Product upon delivery of the same as specified hereunder. [***] after the date
of the corresponding invoice. No PMC Product shall be delivered prior to the
delivery date set forth on the applicable Manufacturing Order. Payments shall be
remitted by wire transfer in the invoice currency to a bank account to be
designated in writing from time to time by PMC.
[***] (and are not subject to a good faith dispute between the
parties) shall bear interest on the outstanding amount of [***].
10.3 ADDITIONAL EQUIPMENT COSTS. DAS shall pay PMC the
Equipment Costs as specified in Article 11 hereunder.
ARTICLE 11
ACQUISITION OF ADDITIONAL EQUIPMENT
11.1 GENERAL. The Parties recognize that the acquisition of
Additional Equipment for manufacturing of PMC Product may be necessary to
supply DAS's future requirements of PMC Product that exceed [***] Batches of
PMC Product per year. The Parties contemplate that PMC's existing equipment
shall continue to be employed to supply PMC Product and that PMC may, upon
payment of the sums required by this Agreement and provided the relevant terms
and conditions of this Agreement are met, embark upon a program to acquire and
install Additional Equipment designed to meet any unexpected supply forecasts
of DAS in excess of [***] Batches of PMC Product at the PMC Facilities.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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11.2 ADDITIONAL EQUIPMENT PROPOSAL PROCEDURE.
11.2.1 PROPOSAL
In the event the Parties determine in writing that Additional
Equipment is required to be purchased during the Term of this Agreement to
supply DAS's future requirements of PMC Product, PMC shall, within thirty (30)
days after each such determination, prepare and deliver to DAS a proposal for
the purchase and installation of such Additional Equipment (a "Proposal"). Each
Proposal shall include a detailed statement of all Additional Equipment Costs,
the schedule of required payments of such Additional Equipment Costs.
11.2.2 APPROVAL OF PROPOSAL
Upon DAS's receipt of each Proposal, DAS shall review the
Proposal and shall notify PMC promptly of any respects in which such Proposal is
not satisfactory. The Parties shall thereafter enter into discussions to resolve
any remaining differences and shall revise such Proposal accordingly. If and
when the Parties mutually agree in writing to proceed under such Proposal, such
Proposal shall be an Approved Proposal. for purposes of this Agreement. If the
Parties do not mutually agree to proceed under such Proposal, DAS shall accept
continued performance by PMC using PMC's existing capacity.
11.3 REIMBURSEMENT OF ADDITIONAL EQUIPMENT COSTS. Since PMC
would not, in the absence of this Agreement, undertake to acquire Additional
Equipment specified in an Approved Proposal, the Parties hereby acknowledge that
PMC requires certain undertakings from DAS concerning reimbursement of any
Additional Equipment Costs incurred by PMC. Accordingly, DAS agrees that all
Additional Equipment Costs incurred by PMC shall be reimbursed by DAS in
accordance with the mechanism established in Exhibit 8.
11.4 CANCELLATION BY DAS OF APPROVED PROPOSALS. PMC hereby
acknowledges that DAS shall have the right to cancel any Approved Proposal at
any time prior to the beginning of execution of the Approved Proposal by PMC.
11.5 LOSS OR DESTRUCTION OF EQUIPMENT OR PMC FACILITIES. In
the event that any of PMC's Facilities or Equipment used, or to be used, for the
production of the PMC Product is destroyed or incapacitated by fire or other
events beyond the control of PMC, PMC hereby agrees, at its expense, to use all
best efforts to provide alternative means of supplying in a timely fashion as
much of DAS requirements for PMC Product as soon as possible, and to use its
best efforts in order to commence rebuilding or restoring such facilities to
full capacity and/or replacing damaged Equipment. PMC also hereby agrees to
maintain at all times during the term of this Agreement, at its own expense,
applicable insurance against the losses described in this Article 11.5. Upon
written request, PMC shall furnish DAS with satisfactory evidence of such
insurance coverage.
11.6 OWNERSHIP OF ADDITIONAL EQUIPMENT. DAS hereby
acknowledges that all Additional Equipment once installed are and shall be the
property of DAS, and shall be held by PMC as DAS's bailee, and all rights of
title and ownership shall vest in DAS. Upon termination of this Agreement, PMC
shall arrange for the transfer of such equipment to DAS or its designee upon one
hundred and twenty (120) days prior written notice.
11.7 USE OF ADDITIONAL EQUIPMENT FOR OTHER PURPOSES. In the
event that PMC desires to use the Additional Equipment for any purpose other
than production of the PMC Product, PMC shall give DAS prompt written notice of
the same, and thereafter, the Parties shall negotiate in good faith (without
further obligation) the terms of appropriate compensation to be paid by PMC to
DAS for such use, based upon the percentage of the total capacity of the
Additional Equipment dedicated to such other use.
ARTICLE 12
CHANGES OF THE PMC PRODUCT
12.1 REQUIRED BY DAS FOR REGULATORY PURPOSES. DAS will inform
PMC in writing of any modifications to the Protocol, DAS Specifications or PMC
Product required for regulatory purposes, including any changes to regulations
that could affect the PMC SOPs or the production of PMC Product. Such notice
shall be accompanied with a brief description of the corresponding regulation.
PMC shall exercise its best efforts, subject to the terms of this Section, to
timely and efficiently make such modifications as may be required by such
changes. PMC shall not make any change or modification described in the
applicable DAS Specifications, Protocol or the production of PMC Product unless
instructed in writing by DAS.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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PMC will inform DAS of the amount of the additional costs
(including investment) PMC would incur due to the modification, if any, and if
DAS elects to adopt the modification DAS will reimburse PMC for required direct
capital expenditures in accordance with the mechanism set forth in Exhibit 8
hereto, and the relevant documents and related schedules will be revised
accordingly. PMC will provide DAS a written explanation of such investment and
additional costs.
If PMC is technically unable to comply with a proposed
modification or if DAS is unwilling to pay PMC's direct capital expenditures,
DAS shall have the option to withdraw the proposed modification (and hold PMC
harmless of any consequences due to such withdrawal) or to negotiate a payment
plan acceptable to PMC. DAS will notify PMC as soon as reasonably practical of
any changes to any DAS Specifications; procedures or other areas that are filed
with Regulatory Authorities and that could have an impact on PMC's performance
of this Agreement, and will advise PMC of the granting of approval and effective
date of such changes. Any such changes shall be deemed modifications under this
Section.
In the event that DAS decides not to adopt the modifications,
PMC shall continue to provide PMC Product in accordance with the DAS
Specification still in force and DAS shall hold PMC harmless of any consequences
resulting from the non-amendment of such DAS Specification.
12.2 MODIFICATION FOR NON-REGULATORY PURPOSES. Any
modification required to the production of PMC Product for non-regulatory
purposes shall be discussed between the parties. The parties shall negotiate in
good faith the changes to the PMC Product, the financial conditions and the time
schedule for the works to be performed.
In no event shall such a modification be implemented without
PMC's prior written approval, which shall not be unreasonably withheld and PMC
shall exercise its best efforts, subject to the terms of this Section, to timely
and efficiently make such modifications as may be required and agreed to
pursuant to this Section.
DAS shall hold PMC harmless of any consequences of such
changes.
ARTICLE 13
QUALITY DISPUTES
13.1 PMC PRODUCT QUALITY DISPUTES. If DAS rejects any PMC
Product and if the parties have not agreed mutually on a remedy as per Article
6.2.3 of this Agreement, the parties, through the Manufacturing Coordinating
Committee shall timely consult with each other and attempt to resolve the
discrepancies. If the parties cannot resolve the discrepancies in a timely
manner after notification thereof to PMC, they shall promptly nominate a
Laboratory, which shall carry out analyses with respect to such Product as may
be jointly agreed upon by PMC and DAS and at the parties' joint expense.
The results obtained by the Laboratory shall be binding on the
parties for purposes of this Agreement.
If the results conclude that the PMC Product conformed to the
Protocol, DAS Specifications and PMC SOPs, DAS will reimburse PMC amounts paid
to the Laboratory. If the results conclude that the PMC Product does not conform
to the Protocol, DAS Specifications and PMC SOPs, PMC shall reimburse DAS
amounts paid to the Laboratory. In the event the Laboratory cannot conclude to
whether the PMC Product conform or not to the Protocol, DAS Specifications or
PMC SOPs, the parties shall equally share the Laboratory expenses.
Until such time as the Laboratory determines whether the PMC
Product conforms to PMC and DAS Specifications, DAS may withhold payment to PMC
of any amounts due in respect of the subject Manufacturing Order and deposit
such withheld payment in an interest-bearing bank account with a French bank,
and shall provide evidence of the same to PMC. In the event that the subject PMC
Product is determined to be conforming PMC shall receive all amounts in such
interest bearing bank account.
13.2 NON-PAYMENT FOR NON-CONFORMING PMC PRODUCT. If DAS
rejects any PMC Product and if it is determined by the Laboratory that such PMC
Product did not or would conform with the Protocol, DAS Specifications or PMC
SOPs, PMC shall at DAS's option use its best efforts to replace the non
conforming PMC Product as promptly as possible in accordance with the duration
of the production of PMC Product or issue a refund therefor, the costs of such
PMC Product shall not be paid to PMC, and PMC shall credit DAS with (i) DAS's
direct
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8
<PAGE>
cost of the Immunogen used to produce the PMC Product that DAS demonstrates
cannot be shipped due to the defect; and (ii) the transportation charges paid
by DAS for such Immunogen.
ARTICLE 14
QUALITY ASSURANCE
14.1 AUDIT OF PMC FACILITIES. Upon advance notice of [***] PMC
shall permit DAS representatives to enter PMC Facilities during regular business
hours for the purpose of making quality control inspections of the PMC
Facilities and limited to the part of the PMC Facilities in which PMC produces
the PMC Product.
In the event of an inspection by a Regulatory Authority, the
Regulatory Authority representative accompanied by DAS representatives shall be
permitted to enter PMC Facilities in the same conditions as described above.
However, the notice period in such case shall be [***] or such other time as may
be requested by Regulatory Authorities.
DAS shall cause its representatives and the Regulatory
Authority representatives to follow the security and facility access procedures
as are reasonably designated by PMC. PMC may require that at all times DAS
representative be accompanied by a PMC representative and that DAS
representative not enter some areas of the PMC facility to assure protection of
PMC or third party confidential information.
14.2 SAFETY PROCEDURES. PMC undertakes to adopt and enforce
safety procedures for the manufacturing of the PMC Product by PMC and handling
and disposal of waste relating to the PMC Product that comply with
environmental, safety and health requirements. Such responsibilities shall
include the proper disposal of waste in an appropriate manner consistent with
the nature of the waste and at a permitted waste disposal facility.
ARTICLE 15
DECLARATION
PMC shall use its best efforts to assist DAS, at DAS cost calculated according
to Exhibit 8, to address and resolve regulatory issues relating to the DAS
Product and more particularly, shall provide DAS, upon reasonable notice, and at
no cost, provide all necessary and available data relating to the PMC Product in
order to obtain regulatory approvals to develop and commercialize the DAS
Product. Without limiting the foregoing, DAS shall diligently process its own
ELA or the appropriate supplement of the existing ELA in accordance with a
timetable sufficient to permit DAS to meet its own timetable with regard to its
filing of a IND, 8LA and PLA's for DAS Products. PMC acknowledges and agrees
that (a) it shall be required to pass a preapproval inspection by the FDA and
other Regulatory Authorities prior to DAS obtaining regulatory approval by such
authority, (b) it has reviewed, understands and shall comply with all applicable
laws, regulations and other requirements of the FDA and other Regulatory
Authorities in manufacturing, processing and packaging as active ingredient bulk
of the PMC Products, and (c) it shall provide DAS with copies of all notices it
or its contractors receive from Regulatory Authorities that could affect the PMC
Product, DAS Product or the ability to manufacture the PMC Product in the PMC
Facilities. PMC shall provide any manufacturing, quality control or quality
assurance data and other information relating to obtaining all approvals from
all Regulatory Authorities to commercially market and sell DAS Product
(including without limitation, any other information as may be useful or
required (in DAS'S reasonable opinion or upon request of a Regulatory Authority)
for FDA and other Regulatory Authorities approval of DAS Products) to the
public.
ARTICLE 16
SUPERIORITY
No provision on DAS's purchase order form or on PMC's general
conditions of sale or invoice which may purport to impose different conditions
upon DAS or PMC shall modify or otherwise alter the terms of this Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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ARTICLE 17
CONFIDENTIALITY
(a) - GENERAL
Except as expressly set forth in this Article 17, each party shall
cause its respective Affiliates, officers, directors, employees, agents
and subcontractors (collectively, "Representatives") to keep
confidential any and all technical, commercial, scientific and other
data, processes, documents or other information (whether in oral form
and identified as confidential within 30 days after the date of
disclosure, or if written form, if marked as "Confidential" at the time
of disclosure) or physical object (including, without limitation,
intellectual property, marketing data, agreements between any party and
a third-party, license applications, and business plans and projections
of any party) that have been marked as "confidential" at the time of
disclosure) acquired from the other party (the "Other Party"), its
Affiliates or its Representatives after the Effective Date
("Confidential Information"), and each party shall not disclose
directly or indirectly, and shall cause its Representatives not to
disclose directly or indirectly, any Confidential Information to anyone
outside such Person and each of their Affiliates and their respective
Representatives, except that the foregoing restriction shall not apply
to any information disclosed hereunder to any party, if such Person
(the Receiving Person") can demonstrate that such Confidential
Information:
(i) is or hereafter becomes generally available other than by
reason of any breach or default by the Receiving Person, any
of its Affiliates or any Representative of the foregoing with
respect to a confidentiality obligation under this Agreement;
(ii) was already known to the Receiving Person or such affiliate or
Representative;
(iii) is disclosed to the Receiving Person or such affiliate or
Representative by a third party who has the right to disclose
such information;
(iv) is independently developed by the Receiving Person;
(v) based on such Person's good faith judgement with the advice of
counsel, is otherwise required to be disclosed in compliance
with applicable legal requirements to a public authority.
Whenever the Receiving Person becomes aware of any state of facts which
would or might result in disclosure of Confidential Information
pursuant to subparagraph (v) above, it shall, if possible, promptly
notify the Person making disclosure "Disclosing Person") prior to any
such disclosure so that the Disclosing Person may seek a protective
order or other appropriate remedy and/or waive compliance with the
provisions of this Agreement.
In any event, if the Receiving Person is unable to promptly notify the
Disclosing Person or if such protective order or other remedy is not
obtained, or if the Disclosing Person waives compliance with the
provisions of this Agreement, the Receiving Person will furnish only
that portion of the information which it is advised by counsel is
legally required and will exercise reasonable efforts to obtain
assurance that confidential treatment will be accorded the Confidential
Information.
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 except as required by the relevant laws,
enjoining or restraining any other party from any violation or
threatened violation of this Section 8.1.
(b) - USE OF CONFIDENTIAL INFORMATION
Each party agrees that no Confidential Information shall:
(i) be used in its own business except as necessary to exercise
the rights and obligations of such Party under this Agreement;
(ii) be assigned, licensed, sublicensed, marketed, transferred or
loaned, directly or indirectly to any third party other than a
Representative or an Affiliate Representative of such party,
except as
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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<PAGE>
necessary or contemplated for the exercise of the rights
and obligations of the Parties under this Agreement;
The obligations set forth in this Article 17 shall extend to copies, if
any, of Confidential Information made by any Representatives referred
to in paragraph (a) and to documents prepared by such Persons which
embody or contain Confidential Information.
(c) - PROTECTION OF CONFIDENTIAL INFORMATION
Each party shall deal with Confidential Information so as to protect it
from disclosure with a degree of care not less than that used by it in
dealing with its own information intended to remain exclusively within
its knowledge and shall take reasonable steps to minimise the risk of
disclosure of Confidential Information which shall include, without
limitation, ensuring that only those Persons who have a bona fide need
to know such Confidential Information for purposes permitted or
contemplated by this Agreement shall have access thereto. Each party,
shall notify all of its Representatives who have access to Confidential
Information of its confidentiality and the care therefor required, and
shall obtain from any Affiliate or any agent or subcontractor who is a
Representative that is permitted access to such Confidential
Information in accordance with this Article 17, an agreement of
confidentiality incorporating the restrictions set forth herein.
(d) - SURVIVAL OF OBLIGATIONS
The obligations set forth in this Article 17 shall survive the
termination of this Agreement for a period of five (5) years.
(e) - RETURN OF CONFIDENTIAL INFORMATION
Within thirty (30) days after the termination of this Agreement, the
Receiving Person shall (and shall cause its Affiliates' Representatives
and its Affiliates to) return to the Disclosing Person or destroy all
related documents and tangible items then in its possession which it
has received from the Disclosing Person or any affiliate or
Representative thereof pertaining, referring or relating to the
Disposing Person's Confidential Information, as well as all copies,
summaries, records, descriptions, modifications, and duplications that
it, or any of its Affiliates or Representatives, has made from the
documents or tangible items received from the Disclosing Person or any
affiliate or Representative thereof; provided, however, that the
Receiving Person may retain one copy of each document in its legal fees
solely to permit the Receiving Person to continue to comply with its
obligations hereunder and, in addition, may upon notice to the
Disclosing Person, retain in its legal files or in the office of
outside legal counsel one copy of any document solely for use in any
pending legal proceeding to which such document relates.
ARTICLE 18
INDEMNITY
(a) Subject to PMC's indemnity obligations
for violations of Article 8 above (which obligations shall take precedence) DAS
shall indemnify, hold harmless and defend PMC, its directors, officers, and
employees from and against any and all claims, costs, demands, liabilities,
losses, damages and expenses of whatever nature, including costs of recall made
against or sustained by them, arising out of the use or sale of the PMC Product
or the DAS Product by DAS or its customers.
(b) PMC shall indemnify and hold DAS, its
affiliate's, directors, officers, agents and employees from and against any and
all claims, costs, demands, liabilities, losses, damages and expenses of
whatever nature, including costs of recall made against or sustained by them,
arising out of or in connection with this Agreement caused by the negligence or
willful misconduct of PMC or any breach of PMC's warranties set forth under
provision 8.1 hereabove.
(c) In the event of any claim being made
against a party ("the Indemnified Party") for which the other party ("the
Indemnifying Party") has agreed to indemnify the Indemnified Party under this
Agreement, the Indemnifying Party shall be promptly notified thereof and may at
its own expense conduct all negotiations for the settlement of the same and any
litigation that may arise therefrom. The Indemnified Party shall use its
commercially reasonable efforts to not at any time make any admission or take
any steps which might be prejudicial to the settlement or successful defense by
the Indemnifying Party of any claim or demand until the
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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Indemnifying Party has been notified of the claim and has stated its
intention not to negotiate or defend the claim provided that the indemnifying
Party shall act promptly throughout.
ARTICLE 19
TERM AND TERMINATION
19.1 TERM RENEWAL. This Agreement shall take effect as of
the Effective Date and shall, unless terminated earlier according to this
Article 19, continue in effect for a period of ten (10) years after First
Commercial Sale. After such 10 year period, PMC shall exercise commercially
reasonable efforts to ensure continuous supply of PMC Product on financial
terms reasonably acceptable to both parties, provided that (i) annual
forecasts of PMC Product are at least [***] of PMC Product per year (ii) the
parties shall negotiate in good faith such annual renewals, and (iii) all
other terms of the Agreement shall apply to such renewals or extensions, and
(iv) in no event shall this [********] However, in the event of a renewal of
the Agreement for the second two-year period, the parties shall renegotiate
in good faith the financial conditions of the Agreement.
19.2 TERMINATION WITHOUT CAUSE.
19.2.1 AUTOMATIC TERMINATION.
This Agreement shall automatically terminate
upon written notice of one of the parties in the event of termination for
whatever reason of that certain Patent and Know-How License Agreement signed on
this same date between the parties.
19.2.2 FAILURE TO OBTAIN FDA APPROVAL.
(a) DAS may terminate this Agreement without
cause upon [***] to PMC if (I) it determines that the BLA or other relevant
product license to market the DAS Product will not be approved by the FDA or the
Agence Europeenne du Medicament within a reasonable time at a reasonable cost,
or (II) PMC fails to obtain an ELA supplemental approval (and the equivalent
approvals from the Regulatory Authorities for France and the European Union),
with respect to the PMC Product and the DAS Product [***].
(b) PMC may terminate this Agreement without
cause upon [***] to DAS if a BLA or other relevant product license has not been
approved within [***] of the Effective Date and DAS cannot demonstrate to PMC's
reasonable satisfaction within [***] period that, such approval is forthcoming.
19.2.2 EXCESSIVE COST. If at any time DAS determines
that, due to competitive conditions, currency fluctuations or otherwise, the
price of PMC Product and Additional Equipment Costs will be so high that DAS
will be unable to sell DAS Product at a price that will result in a reasonable
profit to DAS, DAS may, [***], terminate this Agreement without cause.
19.3 TERMINATION FOR CAUSE. This Agreement may be terminated
by PMC upon [***], but only if DAS fails to pay an amount when due that is not
subject to a good faith dispute between the parties, and DAS has not cured such
breach within [***]. This Agreement may be terminated by DAS in the event that
PMC fails to perform or otherwise breaches any of its material obligations under
this Agreement, by giving notice to PMC of its intent to terminate and stating
the grounds therefor. PMC shall have sixty (60) days from the date of receipt
thereof cure the failure or breach. In the event the breach is not cured within
the time period set forth herein, then this Agreement shall, at the option of
DAS, terminate at the end of [***]. Except as otherwise expressly set forth in
this Agreement, neither party shall have the right to terminate this Agreement,
and any disputes between the parties shall be resolved pursuant to Section 20.9.
19.4 EFFECT OF TERMINATION OR EXPIRATION
19.4.1 GENERAL
Upon the expiration or termination of this Agreement, PMC
shall notify DAS of the amount of PMC Product it has on hand, and DAS shall
purchase such PMC Product at its applicable transfer price determined pursuant
to Article 10.1 above except that DAS shall not be obligated to purchase more
than the quantity of PMC Product specified in the most recent Manufacturing
Order and DAS shall have no obligation to purchase any such
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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PMC Product if a basis for the termination is a failure of the PMC Product to
meet the PMC SOPs or DAS Specifications, Protocol or otherwise be warranted
product. Termination shall not affect any available remedies.
19.4.2 FURTHER EFFECTS OF TERMINATION
In the event of any termination of this Agreement, or in the
event that DAS elects to establish an equivalent capability at its own or a
different facility, PMC shall at DAS's request and at DAS's cost, assist DAS in
all ways reasonably requested by DAS to transfer the production of PMC Product
to DAS or its designated agents including, but not limited to, transfer of any
part of the PMC SOPs reasonably necessary for DAS to perform or have performed
the equivalent production capability. PMC shall designate for a reasonable
period to be agreed upon by the parties, a senior-level manager as liaison who
shall be responsible for facilitating and coordinating PMC's efforts to effect
such transfer. PMC and DAS shall negotiate in good faith the reasonable cost and
the reasonable period of time for which PMC shall provide the technical
assistance. PMC shall only be obligated to provide technical assistance one
time. PMC shall not liable for the inability of DAS to successfully complete a
transfer.
19.5 SURVIVAL. In addition, anything herein to the contrary
notwithstanding, the following provisions of this Agreement shall survive
termination of this Agreement: Articles 7, 8, 13, 16, 17, 20, 18, 19, 21, 11.3,
11.5 and 11.6 and Section 10.2 and right to payments that have accrued prior to
the date of termination, shall survive termination.
ARTICLE 20
FORCE MAJEURE
No Party hereto shall be responsible or liable to the other
Party hereto for any failure to perform any of its agreements, covenants or
obligations under this Agreement if such failure results from events or
circumstances reasonably beyond the control of such Party including, without
limitation, war or other national emergency; riot; fire, explosion, good or
other Act of God; general and long lasting strike affecting the entire activity
of either party, any injunction, decree, order, law or regulation of any public
authority; or any inability to obtain electricity, fuel or raw material
(collectively, "Events of Force Majeure").
The affected party shall (i) forthwith inform the other party
in writing of the occurrence of the Event of Force Majeure and (ii) exert all
best efforts to eliminate, cure or overcome any such Event of Force Majeure and
to resume performance hereunder with all possible speed; provided, however, that
nothing herein shall require the party to settle on terms unsatisfactory to such
party any strike. To the extent that an Event of Force Majeure continues for a
period in [***], the parties agree to negotiate in good faith either (i) to
resolve the Event of Force Majeure, if possible, (ii) to extend the time period
to resolve, eliminate or overcome such Event or (iii) to terminate this
Agreement.
ARTICLE 21
MISCELLANEOUS PROVISIONS
21.1 INDEPENDENT CONTRACTOR. PMC shall supply PMC Product as
an independent contractor and nothing contained herein shall be construed to be
inconsistent with that relationship or status. PMC and its employees shall not
be considered employees or agents of DAS. This agreement shall not constitute,
create or in any way be interpreted as a joint venture, partnership or business
organization of any kind.
21.2 NO ASSIGNMENT. Neither party shall transfer or assign
this Agreement, in whole or in part without the other party's prior written
consent, except that either party may transfer, assign and delegate this
Agreement to an Affiliate or in connection with a merger, reorganization or sale
of substantially all of its assets, without the other party's consent.
21.3 NOTICES. Notices and other communications required or
called for under this Agreement shall be in writing, shall be transmitted by
certified mail postage prepaid, and shall be deemed delivered upon receipt by
the party to whom it is addressed.
In the case of DAS such communications shall be addressed to.
DAS, 2 rue de Cnucy, 44000 Nantes, France. Attention:
President
DAS Inc. 1430 O'Brien Drive, Suite E, Menlo Park CA 94025 USA
Attention: CEO
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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In the case of PMC, such communications shall be addressed to:
PASTEUR MERIEUX Serums & Vaccins
58, avenue Leclerc
69007 Lyon
FRANCE
Attention: General Counsel
or to the attention of such other individual or to such other address as either
party may give to other in writing.
21.4 NO WAIVER. The failure of either party to enforce at any
time for any period the provisions hereof shall not be construed to be a waiver
of such provisions or of the right of such party thereafter to enforce each such
provision.
21.5 SEVERANCE. If any provision of this Agreement should be
or become fully or partly invalid or unenforceable for any reason whatsoever or
violate any applicable law, this Agreement is to be considered divisible as to
such provision and such provision is to be deleted from this Agreement, and the
remainder of this Agreement shall be deemed valid and binding as if such
provision were not included. A suitable provision which, as far as legally
possible, comes nearest to what the parties desired according to the sense and
purpose of this Agreement had this point been considered when concluding this
Agreement shall be substituted for any such provision deemed to be deleted.
21.6 LIST OF EXHIBITS. The Exhibits listed in this provision
and attached herewith are fully part of this Agreement and cannot be modified
unless mutually agreed between the parties:
Exhibit 1 PMC Facilities
Exhibit 2 Protocol
Exhibit 3 PMC SOPs and DAS Specifications
Exhibit 4 DAS Certificate
Exhibit 5 PMC Certificate
Exhibit 6 Manufacturing Order
Exhibit 7 Laboratory
Exhibit 8 Forecasts during Development Period
Exhibit 9 Non binding Guidelines
Exhibit 10 Direct Costs
21.7 GOVERNING LAW. This Agreement shall be governed by
Californian Laws.
21.8 DISPUTE RESOLUTION.
Any and all disputes arising in connection with this Agreement which will not
be solved on an amicable basis between the parties shall be finally settled
by arbitration under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce, rules that the Parties recognizes that
they know. The arbitration shall be conducted in Paris, France, in English by
one arbitrator if the dispute involves a claim of damage [***] in accordance
with the said rules. The arbitrator(s) shall apply French law to the merits
of the case. The arbitration shall be final and binding upon the parties.
21.9 HEADINGS.
The Articles and article headings included in this Agreement are for reference
purpose only and shall not affect the meaning or interpretation of this
Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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IN WITNESS WHEREOF, the parties hereto have caused these
presents to be signed by their respective corporate officers, authorized as of
the day and year first above written.
DAS SA PASTEUR MERIEUX SERUMS ET VACCINS
By: /s/ Maryvonne Hiance By: /s/ Michel Greco
-------------------------------- -----------------------------
Name: Maryvonne HIANCE Name: Michel GRECO
Title: President Title: DIRECTEUR GENERAL
DAS INC
By: /s/ Stanley Kaplan
--------------------------------
Name: Stanley KAPLAN
Title: Chief Executive Officer & President
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 1
PMC FACILITIES
[********]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 2
COC AB PROTOCOL
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 3
PMC SOPS
THE FOLLOWING PMC SOP'S MAY BE MODIFIED BY APPLYING THE PROVISIONS OF THIS
AGREEMENT
Procedure technique PMC T [********] [***]
Procedure technique PMCT[********] [***]
Procedure technique PMC T [********] [***]
Procedure technique PMC T [********] [***]
Procedure technique PMC T [********] [***]
Les autres specifications techniques de PMC pourront etre modifiees par PMC a
tout moment mais auditable par IMTIX-SangStat
Procedure technique PMC T [********] [***]
Procedure technique PMC T [********] [***]
rongeurs
Procedure technique PMC T [********] [***]
Procedure technique PMC T [********] [***]
This exhibit shall be completed with PMC SOP's redrafted upon existing SOP's
relating to other products manufactured by PMC.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 4
DAS CERTIFICATE
===============================================================================
DAS CERTIFICATE
COC AB ANTIGENE
- -------------------------------------------------------------------------------
Batch N(DEG.) Tests results
---- Anormal Toxicity
Sterility
- -------------------------------------------------------------------------------
We certify that all the COC ab Antigene mentioned in this certificate have been
released for horse imminuzation to produce Anticocaine plasma
Name: _____________
Title: _____________
Date: _____________
===============================================================================
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 5
PMC CERTIFICATE
===============================================================================
PASTEUR MERIEUX SERUMS & VACCINS
Nous, soussignes, certifions que la solution Fab'2 vrac anti cocaine COC ab du
lot:
n(DEG.) _______________
a ete produit conformement aux specifications de DAS mentionne au contrat en
date du Juin 1999 aux procedures techniques de PMC applicables et aux Bonnes
Pratiques de Fabrication.
Certificat de controles: ci-joint
Fait a Marcy l'Etoile, le ________________
Nom: ________________
Fonction: ________________
Signature: ________________
===============================================================================
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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Pasteur Merieux Serums & Vaccins
Direction des controles
CERTIFICAT D'ANALYSE
SOLUTION DE COC AB FAB'2 10%
LOT N(DEG.): __________________
ASPECT : Conforme
DOSAGE DES PROTEINES TOTALES : g/100ml
RECHERCHE DES PROTEINES ETRANGERES : Conforme
TEST DE DIGESTION : Conforme
ESSAI DE STERILITE BACTERIENNE ET FONGIQUE : Conforme
ESSAI DES PYROGENES : Conforme
HPLC GEL FILTRATION
[********] : %
[********] : %
[********] : %
CONCLUSION:
Date: le directeur de Services de Controle
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 6
MANUFACTURING ORDER
===============================================================================
DAS
BON DE COMMANDE N(DEG.) ___________;
SOLUTION DE PRINCIPE ACTIF FAB'2 VRAC ANTI COCAINE COC AB
Volume total ___________________ litres, soit _______________ grammes
Nombre de lots estimes: ________________
Periode de livraison: du _______/___/ au ________/____/____
DAS s'engage a livrer a temps les quantites d'antigenes necessaires a
l'immunisation du nombre de chevaux correspondant a la quantite de plasma
necessaire a l'obtention du produit.
Estimatif du montant de la commande ___________________: _____________ FRF HT
(Nb grammes x Prix/g)
Fait a
Le
- -----------------
Responsible Achat
DAS
===============================================================================
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 7
LABORATORY
Ecole Nationale Veterinaire
7 avenue du General Leclerc
94704 MAISONS ALFORT Cedex
Tel: 01.42.96.71.00
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 8
FORECAST DURING DEVELOPMENT PERIOD
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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EXHIBIT 9
NON BINDING GUIDE LINES ON THE TIMING
TIME LINES FOR FIRST BATCH DURING MANUFACTURING PERIOD
Manufacturing order for 1st batch [***] [***]
Reception of horses [***] [***]
Quarantine [***]
Immunization [***]
Processing and controls [***]
Next batches: [***]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
25
<PAGE>
EXHIBIT 10
PMC PRODUCT DIRECT COSTS
"Direct Cost" shall mean the direct cost attributable or allocable to the
specific activity for which they are to be charged. The components of direct
costs are limited to the following: personnel salaries, cost of supplies, cost
of materials, contracted and outside services and support costs. Specifically
(depending on the activity), Direct Costs may include one of more of components
set forth below:
BREAKDOWN OF THE DIRECT COST
The direct cost is composed of 4 main categories of costs.
<TABLE>
<CAPTION>
- ------------------------ ----------------------------------------- ---------------------------------------------------
Category Including Comments
- ------------------------ ----------------------------------------- ---------------------------------------------------
<S> <C> <C>
Raw materials Bill of material
- ------------------------ ----------------------------------------- ---------------------------------------------------
Direct Labor Payroll Gross salary, excluding interessement et
Overtime participation
Medical benefits Payroll taxes
- ------------------------ ----------------------------------------- ---------------------------------------------------
Overhead Product manager Salary, payroll taxes,...
Utilities
QC environmental tests, technical assistance,
process optimization
Equipment items
Small equipment items
Services rendered
- ------------------------ ----------------------------------------- ---------------------------------------------------
</TABLE>
All other costs considered indirect are not allocated or attributable, and are
mainly:
- Administrative cost (including phone expenses which are not
allocated to cost centers)
- Executives and site production administrative people
- Purchasing and warehousing
- Quality assurance/metrology - Depreciation
- Taxes (including `taxe professionnelle')
- Pharmaceutical responsibility
- Product liability insurance
- Bonus (interessement et participation)
- Distribution costs
- Site expenses (including site security, guarding)
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
26
