<PAGE>
EXHIBIT 10.21
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CONFIDENTIAL TREATMENT HAS BEEN SOUGHT FOR
------------------------------------------
PORTIONS OF THIS EXHIBIT PURSUANT TO RULE 24B-2
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UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
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Dated 2/nd/ February, 2000
ENDOREX NEWCO, LTD.
AND
SCHEIN PHARMACEUTICAL (BERMUDA), LTD.
DEVELOPMENT, LICENCE AND SUPPLY AGREEMENT
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CONTENTS
CLAUSE 1 PRELIMINARY
CLAUSE 2 THE LICENCE
CLAUSE 3 INTELLECTUAL PROPERTY
CLAUSE 4 COMPETING PRODUCTS
CLAUSE 6 PROJECT TEAM AND MANAGEMENT COMMITTEE
CLAUSE 5 DEVELOPMENT OF THE SYSTEM, COMPOUND AND PRODUCT
CLAUSE 7 REGISTRATION OF THE PRODUCT
CLAUSE 8 MARKETING AND PROMOTION OF THE PRODUCT
CLAUSE 9 SUPPLY OF THE PRODUCT
CLAUSE 10 SUPPLY OF THE COMPOUND
CLAUSE 11 FINANCIAL PROVISIONS
CLAUSE 12 PAYMENTS, REPORTS AND AUDITS
CLAUSE 13 DURATION AND TERMINATION
CLAUSE 14 CONSEQUENCES OF TERMINATION
CLAUSE 15 WARRANTY AND INDEMNITY
CLAUSE 16 CUSTOMER COMPLAINTS AND PRODUCT RECALL
CLAUSE 17 MISCELLANEOUS PROVISIONS
SCHEDULE 1 ENDOREX JV PATENTS
SCHEDULE 2 SCHEIN COMPOUND PATENTS
SCHEDULE 3 THE PROJECT
SCHEDULE 4 PROJECT SYSTEM SPECIFICATIONS
SCHEDULE 5 PRODUCT SPECIFICATIONS
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THIS AGREEMENT is made on 2/nd/ February, 2000.
BETWEEN:
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(1) ENDOREX NEWCO, LTD., a company incorporated in Bermuda with offices at
Clarendon House, 2 Church Street, Hamilton, Bermuda; and
(2) SCHEIN PHARMACEUTICAL (BERMUDA), LTD., a company incorporated in Bermuda,
with offices at Grosvenor Trust LTD, 33 Church Street, Hamilton, Bermuda.
RECITALS:
--------
A. ENDOREX JV is a joint venture company of ELAN and ENDOREX and is
beneficially entitled to the ENDOREX JV PATENTS under a licence from ELAN
for use in the research, development and commercialisation of iron
chelating agents.
B. SCHEIN wishes ENDOREX JV to develop the SYSTEM for SCHEIN as a method of
drug delivery incorporating the COMPOUND for the FIELD.
C. ENDOREX JV is willing to use its technology to do so and to grant SCHEIN an
exclusive sublicence of the ENDOREX JV PATENTS and ENDOREX JV KNOW-HOW to
package, import, use, offer for sale, distribute and sell the PRODUCT in
the TERRITORY.
D. ENDOREX JV and SCHEIN are desirous of entering into an agreement to give
effect to the arrangements described at Recitals B and C.
NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1 - PRELIMINARY
1.1 Definitions: In this Agreement unless the context otherwise requires:
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AFFILIATE shall mean any corporation or entity controlling or controlled or
under common control with ENDOREX JV or SCHEIN, as the case may be. For
the purposes of this Agreement, "control" shall mean the direct or indirect
ownership of more than 50% of the issued voting shares or other voting
rights of the subject entity to elect directors, or if not meeting the
preceding criteria, any entity owned or controlled by or owning or
controlling at the maximum control or ownership right permitted in the
country where such entity exists.
ANDA shall mean the new drug application, abbreviated new drug application,
or any other application acceptable to an RHA for marketing approval for
the COMPOUND, which SCHEIN will file with an RHA in a country of the
TERRITORY, including any supplements or amendments thereto.
ANDA APPROVAL shall mean the final approval of an ANDA by an RHA to market
the COMPOUND in a country in the TERRITORY.
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CFR shall mean the US Code of Federal Regulations 21, as amended from time
to time.
cGCP, cGMP, cGLP shall mean respectively current Good Clinical Practice,
current Good Manufacturing Practice and current Good Laboratory Practice,
respectively, as defined in the FFDCA.
COMPETING PRODUCT shall have the meaning assigned to it in Clause 4.1.
COMPOUND shall mean any formulations of [********] and any of its
analogues, isomers or derivatives.
COMPOUND SPECIFICATIONS shall have the meaning assigned to it in Clause
10.5.
DEVELOPMENT COST shall mean the fully allocated cost, which is the sum
total of all development and other related costs for the SYSTEM incurred
after the EFFECTIVE DATE, including direct labour, direct materials and
supplies, variable labour, overhead and attributable administration,
quality control, quality assurance and other costs, whether incurred by
ENDOREX JV, its agents or any sub-contractor of ENDOREX JV; such costs to
be calculated in accordance with generally accepted accounting principles.
In the case of development services which are provided by a third party,
the DEVELOPMENT COST of such services shall comprise the amount actually
paid, as well as any other directly attributable costs incurred by the
Party.
DEVICE REGULATORY APPLICATION shall mean 510(K) Kit or equivalent
applications for approval to market the SYSTEM with the COMPOUND which
SCHEIN will file with the RHA in any country of the TERRITORY as the
parties may from time to time determine hereunder, including any
supplements or amendments thereto.
DEVICE REGULATORY APPROVAL shall mean the final approval by the RHA to
market the SYSTEM with the COMPOUND in any country of the TERRITORY,
including any governmental pricing and reimbursement approval and any other
approval which is required to launch the SYSTEM with the COMPOUND in the
normal course of business.
MAF shall mean a Master File for the SYSTEM, as defined in the CFR Sections
814.3(d) and 814.20(c) and/or its equivalent in the other countries of the
TERRITORY.
EFFECTIVE DATE shall mean 2/nd/ February, 2000.
ELAN shall mean Elan Corporation, plc and any of its AFFILIATES.
____________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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ENDOREX shall mean Endorex Corporation and any of its AFFILIATES (including
ENDOREX JV but excluding ELAN).
ENDOREX JV shall mean Endorex Newco, Ltd.
ENDOREX JV BACKGROUND TECHNOLOGY shall mean ENDOREX JV PATENTS, and/or
ENDOREX JV KNOW HOW.
ENDOREX JV IMPROVEMENTS shall mean any and all improvements or
enhancements, patentable or otherwise, that have been conceived, created or
developed during the TERM which can be usefully applied to the SYSTEM
and/or the PRODUCT, including the manufacture thereof, except for (i)
improvements relating exclusively to the COMPOUND, or (ii) any improvements
that are subject to contractual obligations of ENDOREX JV to third parties.
If the inclusion of an ENDOREX JV IMPROVEMENT is restricted or limited by a
third party agreement, ENDOREX JV shall use reasonable commercial efforts
to exclude or where applicable minimise any such restriction or limitation.
ENDOREX JV KNOW-HOW shall mean all knowledge, information, trade secrets,
data and expertise which is not generally known to the public, owned by
ENDOREX JV, or to which ENDOREX JV has rights under the terms of a licence
or licences in force on the EFFECTIVE DATE, which permit(s) disclosure of
same to SCHEIN, relating to the SYSTEM and/or the PRODUCT, whether or not
covered by any patent, copyright, design patent, trademark, trade secret or
other industrial or any intellectual property rights.
ENDOREX JV PATENTS shall mean the patents and patent applications as set
forth in Schedule 1, that are owned or licensed by or on behalf of ENDOREX
JV as of the EFFECTIVE DATE. ENDOREX JV PATENTS shall also include all
extensions, continuations, continuations-in-part, divisionals, patents-of-
additions, re-examinations, re-issues, supplementary protection
certificates and foreign counterparts of such patents and patent
applications and any patents issuing thereon and extensions of any patents
licensed hereunder.
ENDOREX JV TRADEMARK shall mean one or more trademarks, trade names, or
service marks that are owned or licensed by or on behalf of ENDOREX JV that
ENDOREX JV may nominate and approve in writing from time to time for use in
connection with the sale or promotion of the PRODUCT by SCHEIN. For the
purposes of this Agreement, the trademark "Medipad"* which has been
licensed by ENDOREX JV from ELAN shall be deemed to be an ENDOREX JV
TRADEMARK hereunder.
ENFORCEMENT PROCEEDINGS shall mean the proceedings referred to in Clause
3.4.2.
EX WORKS shall have the meaning as such term is defined in the ICC
Incoterms, 1990, International Rules for the Interpretation of Trade Terms,
ICC Publication No. 460.
FCA shall have the meaning as such term is defined in the ICC Incoterms,
1990,
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International Rules for the Interpretation of Trade Terms, ICC Publication
No. 460.
FFDCA shall mean the US Federal Food, Drug and Cosmetic Act of 1934, and
the regulations promulgated thereunder, as the same may be amended from
time to time.
FIELD shall mean the treatment of any iron overloading disorder by
subcutaneously delivering the COMPOUND using the SYSTEM.
IN MARKET shall mean the sale of the PRODUCT by SCHEIN or its AFFILIATES or
SUBLICENSEES to an unaffiliated third party such as (i) an end-user
consumer of the PRODUCT or (ii) a wholesaler, distributor, managed care
organisation, hospital or pharmacy or other third party payor for final
commercial sale by such party to the consumer, and shall exclude in any
event the transfer pricing of the PRODUCT by SCHEIN to an AFFILIATE or a
SUBLICENSEE.
INITIAL PERIOD shall mean the initial period of this Agreement, as more
fully described in Clause 13.
LAUNCH STOCKS shall mean the quantities of stocks of the PRODUCT required
by SCHEIN in relation to the launch of the PRODUCT following DEVICE
REGULATORY APPROVAL in the USA, as more fully described in Clause 9.7.
LICENCE FEES shall mean any monetary amounts or non cash consideration,
other than NSP or ROYALTY, received by SCHEIN or its AFFILIATES from a
third party in relation to the development and commercialisation of the
PRODUCT outside of the USA, including but not limited to license fees,
development fees or any other one-off or ongoing fees.
MANAGEMENT COMMITTEE shall mean the group to be established pursuant to
Clause 5.
MANUFACTURING COST shall mean the fully allocated cost which is the sum
total of all production related costs for the COMPOUND (subject to Clause
10.15), the SYSTEM and PRODUCT, as applicable, (direct labour, direct
materials, facility overhead and expenses which can be allocated, QA/QC and
analytical charges, packaging costs for the COMPOUND and/or the SYSTEM
including, but not limited to, stability and RHA fees) accounted for in
accordance with United States Generally Accepted Accounting Principles
applied on a consistent basis. In the case of COMPOUND, SYSTEM or
materials which are purchased from a third party, the MANUFACTURING COST of
such COMPOUND or SYSTEM shall comprise the amount actually paid, including
import duties, transport and handling costs and other directly attributable
costs.
MARKETING AND SELLING EXPENSES shall mean dedicated marketing and selling
expenses for the PRODUCT which have been agreed in advance by the
MANAGEMENT COMMITTEE in accordance with Clause 8.2.
NSP shall, subject to the provisions of Clauses 11.4.5, mean in the case of
PRODUCT sold by SCHEIN or an AFFILIATE or a SUBLICENSEE, that sum
determined by deducting from the aggregate gross IN MARKET sales proceeds
billed for the
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PRODUCT by SCHEIN or, its AFFILIATE or a SUBLICENSEE, as the case may be,
in accordance with generally accepted accounting principles:-
(a) customs duties or other taxes (excluding income or corporation tax),
directly related to the sale of the PRODUCT which are paid by SCHEIN
or its AFFILIATE or SUBLICENSEES as the case may be;
(b) a discount from the gross sales proceeds to cover such normal costs
as are incurred by SCHEIN or its AFFILIATES or SUBLICENSEES, as the
case may be, in respect of transport, shipping insurance, returns and
discounts related to the sale of the PRODUCT, subject to a cap of 5%
of the sum of the aggregate gross IN MARKET sales proceeds less the
deductible items at (a) above.
Party shall mean ENDOREX JV or SCHEIN as the case may be. Parties shall
mean ENDOREX JV and SCHEIN.
PRODUCT shall mean the SYSTEM containing, or packaged with, the COMPOUND.
PRODUCT SPECIFICATIONS shall mean the specifications for the PRODUCT set by
the Parties for the DEVICE REGULATORY APPLICATIONS and which shall be
attached as Schedule 5, as well as such other specifications such as
interim specifications which may be required during the PROJECT and such
additional specifications for the PRODUCT as may be agreed by the parties
in writing.
PROFIT shall mean NSP less (i) MANUFACTURING COST of the PRODUCT, (ii)
MANUFACTURING COST of the COMPOUND, and (iii) MARKETING AND SELLING
EXPENSES; and plus, where applicable, any ROYALTY.
PROJECT shall mean all activity in order to develop the SYSTEM and the
PRODUCT for commercialisation in the USA in accordance with the plan shown
in Schedule 3, as may be amended from time to time as agreed by the parties
in writing.
PROJECT SYSTEM SPECIFICATIONS shall mean the specifications for the SYSTEM
which shall be set by the parties for the DEVICE REGULATORY APPLICATIONS
and which shall be attached as Schedule 4, as well as such other
specifications such as interim specifications which may be required during
the PROJECT and such additional specifications for the SYSTEM as may be
agreed by the parties in writing.
PROJECT TEAM shall mean the group to be established pursuant to Clause 6.
RHA shall mean any relevant government health authority (or successor
agency thereof) in any country of the TERRITORY whose approval is necessary
to market the SYSTEM, COMPOUND and/or PRODUCT, as applicable, in the
relevant country of the TERRITORY, including, without limitation, the
United States Food and Drug Administration.
ROYALTY shall mean any amount received by SCHEIN, its AFFILIATES or
SUBLICENSEES as a royalty on sales of the PRODUCT in the TERRITORY.
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SCHEIN shall mean Schein Pharmaceutical (Bermuda) Ltd. and any of its
AFFILIATES.
SCHEIN COMPOUND IMPROVEMENTS shall mean any and all improvements or
enhancements, patentable or otherwise, relating exclusively to the COMPOUND
which are owned or licensed by SCHEIN and which can be usefully applied to
the PRODUCT including the manufacture or use thereof which were first
conceived, developed, invented or reduced to practice by SCHEIN or ENDOREX
JV during the TERM except for any improvements that are subject to
contractual obligations of SCHEIN or ENDOREX JV to third parties. If the
inclusion of a SCHEIN COMPOUND IMPROVEMENT is restricted or limited by a
third party agreement, SCHEIN or ENDOREX JV as the case may be shall use
reasonable commercial efforts to exclude or where applicable minimise any
such restriction or limitation.
SCHEIN COMPOUND KNOW-HOW shall mean all knowledge, information, trade
secrets, data and expertise which is not generally known to the public,
owned or licensed by SCHEIN or to be developed or licensed by SCHEIN as of
the EFFECTIVE DATE relating exclusively to the COMPOUND, whether or not
covered by any patent, copyright, design, trademark or other industrial or
intellectual property rights.
SCHEIN COMPOUND PATENTS shall mean all patents and patent applications as
set forth in Schedule 2, that are owned by, or licensed to SCHEIN as of the
EFFECTIVE DATE relating exclusively to the COMPOUND. SCHEIN PATENTS shall
also include all extensions, continuations, continuations-in-part,
divisionals, patents-of-additions, re-examinations, re-issues,
supplementary protection certificates and foreign counterparts of such
patents and patent applications and any patents issuing thereon and
extensions of any patents licensed hereunder.
SCHEIN COMPOUND TECHNOLOGY shall mean SCHEIN COMPOUND PATENTS and SCHEIN
COMPOUND KNOW HOW.
SUBLICENSEE shall mean any independent third party appointed by SCHEIN,
with the unanimous approval of the MANAGEMENT COMMITTEE, pursuant to Clause
2.2, to market, distribute and sell the PRODUCT in any country of the
TERRITORY outside of the USA.
SYSTEM shall mean the ambulatory subcutaneous infusion drug delivery system
for direct attachment to the body of a patient having a flexible diaphragm
drug reservoir, which is capable of delivering factory pre-programmed
continuous amounts of drug upon activation as disclosed and described in
the ENDOREX JV PATENTS set forth in Schedule 1 attached hereto.
TECHNOLOGICAL COMPETITOR shall mean a company or corporation having a
substantial part of its business in the transdermal or device drug
delivery, research, development and manufacturing areas of the
pharmaceutical industry, with a market capitalization of at least $100
million, in the case of a publicly-held company, or at least $75 million of
annual revenues, in the case of a privately-held company. For the
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avoidance of doubt, Bayer AG shall not be deemed a TECHNOLOGICAL COMPETITOR
of ENDOREX JV.
TERM shall mean the term of this Agreement, as set out in Clause 14.
TERRITORY shall mean all of the countries of the world.
$ shall mean United States Dollars.
"US" or "USA" shall mean the United States of America, its territories and
possessions
1.2 Interpretation: In this Agreement:
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1.2.1 the singular includes the plural and vice versa, the masculine
includes the feminine and vice versa and references to natural
persons include corporate bodies, partnerships and vice versa.
1.2.2 any reference to a Clause or Schedule, unless otherwise specifically
provided, shall be respectively to a Clause or Schedule of this
Agreement.
1.2.3 the headings of this Agreement are for ease of reference only and
shall not affect its construction or interpretation.
CLAUSE 2 - THE LICENCE
2.1 Licence to SCHEIN:
-----------------
2.1.1 Subject to the terms of this Agreement, ENDOREX JV hereby grants to
SCHEIN, and SCHEIN hereby accepts for the TERM, an exclusive licence
to the ENDOREX JV BACKGROUND TECHNOLOGY and ENDOREX JV IMPROVEMENTS
to package, import, use, offer for sale and sell and otherwise
distribute the PRODUCT for the FIELD in the TERRITORY.
2.2 Sub-licensing by SCHEIN:
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2.2.1 Any appointment of a SUBLICENSEE for the PRODUCT in any country of
the TERRITORY outside of [********] shall be determined by the
MANAGEMENT COMMITTEE and shall require the prior unanimous consent
of the MANAGEMENT COMMITTEE. In the event that such unanimous
decision is made by the MANAGEMENT COMMITTEE, SCHEIN shall grant
such SUBLICENSEE a sub-license to package, import, use, offer for
sale and sell the PRODUCT for the FIELD in such country of the
________________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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TERRITORY. [********]only shall be appointed per country and no sub-
licence shall be granted to a TECHNOLOGICAL COMPETITOR of ENDOREX
JV.
2.2.2 The MANAGEMENT COMMITTEE shall be responsible for deciding by
unanimous vote upon the commercial terms of any sub-licence granted
hereunder. Any such sub-licence shall be on terms mutatis mutandis
as the terms of this Agreement insofar as they are applicable, but
excluding the right to grant a sub-licence or a production licence.
2.2.3 For the avoidance of doubt, ENDOREX JV shall have the same rights of
audit and inspection vis-a-vis a SUBLICENSEE, as ENDOREX JV has
pursuant to this Agreement concerning SCHEIN. SCHEIN shall also
provide copies of all sublicense agreements to ENDOREX JV.
2.2.4 SCHEIN shall be liable to ENDOREX JV for all acts and omissions of
any SUBLICENSEE as though such acts and omissions were by SCHEIN and
SCHEIN shall provide the indemnity to ENDOREX JV outlined in Clause
15.9.
2.2.5 Where a sub-licence has been granted under Clause 2.2.1, such sub-
licence shall automatically terminate if this Agreement terminates
for the country or countries covered by the sub-licence.
2.2.6 SCHEIN shall undertake to protect the confidentiality of ENDOREX
JV's engineering and manufacturing processes for the SYSTEM and/or
PRODUCT in its dealings with SUBLICENSEES.
2.2.7 For the avoidance of doubt:-
(1) the parties agree that any sub-licence granted pursuant to this
Clause 2.2 shall not be capable of surviving the termination of
this Agreement; and
(2) IN MARKET sales of the PRODUCT by SUBLICENSEES or other agreed
upon arrangements shall be included in calculating NSP for the
purposes of this Agreement.
CLAUSE 3 - INTELLECTUAL PROPERTY
3.1 Ownership of ENDOREX JV PATENT RIGHTS/KNOW-HOW:
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3.1.1 ENDOREX JV shall be and remain the sole beneficial owner or licensee
of the ENDOREX JV BACKGROUND TECHNOLOGY and ENDOREX JV IMPROVEMENTS.
____________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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3.1.2 ENDOREX JV shall be entitled to use the ENDOREX JV BACKGROUND
TECHNOLOGY and ENDOREX JV IMPROVEMENTS, and all technical and
clinical data, generated by ENDOREX JV, SCHEIN, its AFFILIATES or
any SUBLICENSEE pursuant to this Agreement in connection with
ENDOREX JV's commercial arrangements otherwise than in relation to
the PRODUCT for the FIELD, and in connection with the PRODUCT for
the FIELD in any countries which cease to be part of the TERRITORY;
and in the TERRITORY following termination of this Agreement. SCHEIN
hereby makes any assignment or license to the extent necessary to
achieve the foregoing and shall execute such further documents to
confirm the same as ENDOREX JV may reasonably request from time to
time. In addition, SCHEIN agrees to promptly disclose to ENDOREX JV
any ENDOREX JV IMPROVEMENTS and all related technical and clinical
data that are generated by SCHEIN, its AFFILIATES or SUBLICENSEES.
3.2 Ownership of SCHEIN PATENT RIGHTS/KNOW-HOW:
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3.2.1 SCHEIN shall be and remain the sole owner of the SCHEIN COMPOUND
TECHNOLOGY and SCHEIN COMPOUND IMPROVEMENTS.
3.3 Filing and maintenance of patents:
---------------------------------
3.3.1 Subject to licensing agreements pre-existing as of the EFFECTIVE
DATE, by and between ENDOREX JV and any third party having ownership
or controlling interest in ENDOREX JV PATENTS and ENDOREX JV
IMPROVEMENTS, ENDOREX JV will be entitled, at its own expense, to
file or have filed and prosecute or have prosecuted ENDOREX JV
PATENTS and patentable ENDOREX JV IMPROVEMENTS; to determine or have
determined the patent filing strategy in relation to same at its
sole discretion; to assert or have asserted and defend or have
defended the foregoing patent applications against third party
oppositions; and upon grant of any letters patent, to maintain or
have maintained such letters patent in force.
3.3.2 SCHEIN will be entitled, at its own expense, to file and prosecute
any SCHEIN COMPOUND PATENTS and patentable SCHEIN COMPOUND
IMPROVEMENTS; to determine the patent filing strategy in relation to
same at its sole discretion; to assert and defend the foregoing
patent applications against third party oppositions; and upon grant
of any letters patent, to maintain such letters patent in force
subject to the following conditions:-
(1) SCHEIN shall promptly notify ENDOREX JV in writing in relation
to the existence of SCHEIN COMPOUND IMPROVEMENTS and upon
request by ENDOREX JV, SCHEIN shall provide ENDOREX JV with
copies of any documents relating to the SCHEIN COMPOUND
IMPROVEMENTS.
(2) SCHEIN shall promptly notify ENDOREX JV in writing of any
patent applications filed by SCHEIN under this Clause 3.3.2 and
upon request
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by ENDOREX JV shall provide copies to ENDOREX JV to such patent
applications and any patents issuing thereon, to the extent
reasonably required in order for ENDOREX JV to fulfil its
obligations under this Agreement.
3.3.3 If SCHEIN does not intend to make an application for patents or
continue prosecution of a pending application in respect of SCHEIN
COMPOUND TECHNOLOGY or SCHEIN COMPOUND IMPROVEMENTS, or continue to
maintain the SCHEIN COMPOUND PATENTS in any or some countries of the
TERRITORY, ENDOREX JV, subject to the prior written consent of
SCHEIN, not to be unreasonably withheld or delayed, will be entitled
to file, prosecute and maintain patent applications and patents in
respect thereof, at its own expense, in accordance with the
following terms:-
(1) ENDOREX JV shall consult with SCHEIN on a regular basis in
relation to the status of its activities under this Clause
3.3.3;
(2) SCHEIN shall execute all documents, forms and declarations,
provide all necessary information and data, and do all such
things as shall be necessary to enable ENDOREX JV to exercise
the foregoing right;
(3) ENDOREX JV shall promptly notify SCHEIN in writing of any
patent applications filed by ENDOREX JV hereunder and shall
provide all reasonable access to SCHEIN to such patent
applications and any patents issuing thereon.
3.4 Enforcement:
-----------
3.4.1 SCHEIN and ENDOREX JV shall promptly inform the other in writing of
any alleged infringement of which it shall become aware by a third
party of any patents within the SCHEIN COMPOUND PATENTS, SCHEIN
COMPOUND IMPROVEMENTS, ENDOREX JV PATENTS or ENDOREX JV IMPROVEMENTS
and provide such other with any available evidence of infringement.
3.4.2 ENDOREX JV, at its option and subject to its preexisting licensing
agreements by and between ENDOREX JV and any third party having
ownership or controlling interest in ENDOREX JV PATENTS and ENDOREX
JV IMPROVEMENTS, shall be entitled to institute or have instituted
any administrative, judicial or other proceeding to prevent or stop
any infringement or unauthorised use ("ENFORCEMENT PROCEEDINGS") of
the ENDOREX JV PATENTS or ENDOREX JV IMPROVEMENTS.
3.4.3 SCHEIN agrees to provide all reasonable co-operation and assistance
in relation to any such ENFORCEMENT PROCEEDINGS and agrees to be
named as a party in any ENFORCEMENT PROCEEDINGS, as necessary, that
may be instituted hereunder. ENDOREX JV shall reimburse SCHEIN, its
reasonable costs and expense for such cooperation.
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3.4.4 SCHEIN, at its option, shall be entitled to institute ENFORCEMENT
PROCEEDINGS in respect of any infringement or unauthorised use of the
SCHEIN COMPOUND TECHNOLOGY or SCHEIN COMPOUND IMPROVEMENTS at its own
expense and for its own benefit. ENDOREX JV agrees to provide all
reasonable co-operation and assistance to SCHEIN in relation to any
such ENFORCEMENT PROCEEDINGS and agrees to be named as a party in any
ENFORCEMENT PROCEEDINGS, as necessary, instituted by SCHEIN hereunder.
SCHEIN shall reimburse ENDOREX JV its reasonable costs and expense for
such cooperation.
3.4.5 In the event that ENDOREX JV does not want to institute ENFORCEMENT
PROCEEDINGS relating to ENDOREX JV BACKGROUND TECHNOLOGY or ENDOREX JV
IMPROVEMENTS, then SCHEIN may enforce such rights at its own expense.
ENDOREX JV shall cooperate with SCHEIN and provide all reasonable
assistance in relation to any such ENFORCEMENT PROCEEDINGS. SCHEIN
must seek written approval from ENDOREX JV, which may not be
unreasonably withheld or delayed, prior to taking action and must keep
ENDOREX JV informed of the action and may not enter into any
settlement agreement without ENDOREX JV's consent, which may not be
unreasonably withheld or delayed. Any reasonable fees and costs borne
by ENDOREX JV shall be reimbursed by SCHEIN. In the event that SCHEIN
decides to enforce the ENDOREX JV BACKGROUND TECHNOLOGY or ENDOREX JV
IMPROVEMENTS in accordance with this paragraph, any recovery remaining
after the deduction of reasonable expenses (including attorney's fees
and expenses) incurred in relation to such ENFORCEMENT PROCEEDINGS
shall constitute NSP for the purpose of this Agreement.
3.4.6 In the event that SCHEIN does not want to institute ENFORCEMENT
PROCEEDINGS relating to SCHEIN COMPOUND TECHNOLOGY or SCHEIN COMPOUND
IMPROVEMENTS, then ENDOREX JV may enforce such rights at its own
expense. SCHEIN shall cooperate with ENDOREX JV and provide all
reasonable assistance in relation to any such ENFORCEMENT PROCEEDINGS.
ENDOREX JV must seek written approval from SCHEIN, which may not be
unreasonably withheld or delayed, prior to taking action and must keep
SCHEIN informed of the action and may not enter into any settlement
agreement without SCHEIN's consent, which may not be unreasonably
withheld or delayed. Any reasonable fees and costs borne by SCHEIN
shall be reimbursed by ENDOREX JV. In the event that ENDOREX JV
decides to enforce the SCHEIN COMPOUND TECHNOLOGY or SCHEIN COMPOUND
IMPROVEMENTS in accordance with this paragraph, any recovery remaining
after the deduction of reasonable expenses (including attorney's fees
and expenses) incurred in relation to such ENFORCEMENT PROCEEDINGS
shall constitute NSP for the purpose of this Agreement.
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3.5 Defence:
-------
3.5.1 In the event that a claim or proceeding is brought against SCHEIN by
a third party alleging that the manufacture, sale, use or offer for
sale of the SYSTEM and/or the PRODUCT as claimed exclusively in the
ENDOREX JV PATENTS or a patented ENDOREX JV IMPROVEMENT, infringes
the patent rights of such a third party in the TERRITORY, SCHEIN
shall promptly advise ENDOREX JV of such threat or suit.
3.5.2 Solely to the extent set out in Clause 3.5.4, ENDOREX JV shall
indemnify SCHEIN against a claim referred to in Clause 3.5.1,
provided that ENDOREX JV should have reasonably been aware of such
third party patent rights as a result of ENDOREX JV's efforts in the
preparation and prosecution of ENDOREX JV PATENTS as of the
EFFECTIVE DATE. SCHEIN shall not acknowledge to the third party or
to any other person the validity of any claims of such a third
party, and shall not compromise or settle any claim or proceedings
relating thereto without the prior written consent of ENDOREX JV,
not to be unreasonably withheld or delayed. At its option, ENDOREX
JV may elect to take over the conduct of such proceedings from
SCHEIN with counsel of ENDOREX JV's choice. In such event ENDOREX JV
shall keep SCHEIN advised of all material developments in the said
proceedings and shall not settle or compromise such proceedings
without the prior written consent of SCHEIN which shall not be
unreasonably withheld or delayed. Should ENDOREX JV not reasonably
have had knowledge of such third party patent rights as a result of
ENDOREX JV's efforts in the preparation and prosecution of ENDOREX
JV PATENTS as of the EFFECTIVE DATE, ENDOREX JV shall not indemnify
SCHEIN against any such claim.
3.5.3 In the event that a claim or proceeding is brought against SCHEIN by
a third party alleging that the manufacture, sale, offer for sale or
use of the SYSTEM and/or the PRODUCT as claimed exclusively in the
ENDOREX JV PATENTS or in a patented ENDOREX JV IMPROVEMENT infringes
the patent rights of such a third party and such claim falls outside
of the scope of the indemnity granted by ENDOREX JV to SCHEIN
pursuant to Clause 3.5.2, SCHEIN and ENDOREX JV shall meet to
discuss in what manner the said proceedings should be defended. In
accordance with their obligations pursuant to Clause 15.9.5, the
Parties shall take such action as is reasonable, such as to cease
selling the PRODUCT, or to re-engineer or modify the PRODUCT so as
to avoid infringing the patent rights of a third party, or entering
into a license agreement with such third party after due
consideration of each of the party's interest in the matter.
3.5.4 ENDOREX JV's maximum liability pursuant to Clause 3.5.2 for damages
and costs in relation to all third party claims shall be a reduction
in full of the royalty payable by SCHEIN to ENDOREX JV pursuant to
Clause 11.4 for such period until such reduction in royalty amounts
to $5 million (five million United States Dollars) plus interest
accruing at 8% per annum; provided however in the event that such
royalty on the PRODUCT is not available or sufficient to pay such
obligations, ENDOREX JV shall, at its sole discretion,
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have the option, to either (i) pay such obligations over such 5 year
period in equal quarterly installments of principal and interest, or
(ii) pay the sum of $5 million (five million United States Dollars)
in one installment. ENDOREX JV shall be entitled to apply the
reasonable costs and expenses incurred by it in defending such
claims against the said sum of US$5 million (five million United
States Dollars. Any reduction in royalty shall apply for so long as
is necessary to discharge ENDOREX JV's patent liability of $5
million (five million United States Dollars) pursuant to this Clause
3.5. ENDOREX JV shall be entitled to apply the reasonable costs and
expenses incurred by it in defending such claims against the said
reduction in royalty. In accordance with its obligations pursuant to
Clause 15.9.5, SCHEIN shall favourably consider taking such action
as is reasonable, such as to cease selling the PRODUCT so as to
avoid infringing the patent rights of a third party, or entering
into a license agreement with such third party after due
consultation with ENDOREX JV.
3.5.5 Neither party shall have any liability to the other party whatsoever
or howsoever arising for any losses incurred as a result of SCHEIN
having to cease selling the PRODUCT or having to defer the launch of
selling the PRODUCT as a result of an infringement claim. Neither
ENDOREX JV nor SCHEIN shall have any liability to the other for any
enhanced or punitive damages awarded as a result of any willful
patent infringement
3.5.6 In the event that a claim or proceeding is brought against ENDOREX
JV by a third party alleging that the manufacture, offer for sale,
sale, distribution or use of the COMPOUND, including but not limited
to the delivery of such COMPOUND through continuous subcutaneous
administration, regardless of the device in which it is being
subcutaneously administered, infringes any adversely held patent or
involves the unauthorised use of any other intellectual property in
the TERRITORY, ENDOREX JV shall promptly advise SCHEIN of such
threat or suit. Subject to ENDOREX JV's obligations pursuant to the
provisions of Clause 3.5.2, Clause 3.5.3, and Clause 3.5.4., SCHEIN
shall indemnify ENDOREX JV against such a claim; provided that
ENDOREX JV shall not acknowledge to the third party or to any other
person the validity of the claims of such a third party and shall
not compromise or settle any claim or proceedings relating thereto
without the written consent of SCHEIN, which shall not be
unreasonably withheld or delayed. At its option, SCHEIN may elect to
take over the conduct of such proceedings from ENDOREX JV with
counsel of SCHEIN's choice. In such event SCHEIN shall keep ENDOREX
JV advised of all material developments in the said proceedings and
shall not settle or compromise such proceedings without the consent
of ENDOREX JV which shall not be unreasonably withheld or delayed.
3.6 Trademarks:
----------
3.6.1 SCHEIN shall market the PRODUCT in the TERRITORY under the ENDOREX
JV TRADEMARK and such other trademarks as may be authorized under
Clause 3.6.5 below.
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3.6.2 ENDOREX JV hereby grants to SCHEIN a non-exclusive royalty free
licence in the TERRITORY for the TERM to use the ENDOREX JV
TRADEMARK solely for the purposes of exercising its rights and
performing its obligations under this Agreement and the following
provisions shall apply as regards the use of the ENDOREX JV
TRADEMARK by SCHEIN:
(1) SCHEIN shall ensure that each reference to and use of the
ENDOREX JV TRADEMARK by SCHEIN is in a manner from time to time
approved by ENDOREX JV and accompanied by an acknowledgement,
in a form approved by ENDOREX JV, that the same is a trademark
licensed from ENDOREX JV, such approvals not to be unreasonably
withheld or delayed.
(2) SCHEIN undertakes that all related advertising, promotional and
other related uses of the ENDOREX JV TRADEMARK by SCHEIN, shall
conform to standards set by, ENDOREX JV. Such standards shall
be agreed between the parties in advance of SCHEIN's first use
of the ENDOREX JV TRADEMARK, negotiating in good faith.
(3) SCHEIN shall use the ENDOREX JV TRADEMARK for the benefit of
ENDOREX JV and any third parties having an ownership interest
in the same and upon termination of the Agreement, all of the
goodwill associated with the ENDOREX JV TRADEMARK shall
transfer without charge to ENDOREX JV and any such third
parties.
(4) Subject to any obligations from any third party licenses
entered into between ENDOREX JV and any third party having an
ownership interest in ENDOREX JV TRADEMARK, ENDOREX JV shall
file or have filed, prosecute or have prosecuted, maintain or
have maintained the registrations for the ENDOREX JV TRADEMARK
in the MAJOR MARKETS. SCHEIN shall provide upon request all
reasonable assistance to ENDOREX JV in performing such
activities.
(5) SCHEIN shall not use the ENDOREX JV TRADEMARK in any way which
might prejudice its distinctiveness or validity or the goodwill
associated therewith.
(6) SCHEIN shall not use in relation to the PRODUCT any trademarks
other than the ENDOREX JV TRADEMARK without obtaining the prior
consent in writing of ENDOREX JV.
(7) SCHEIN shall not use in the TERRITORY any trademarks or trade
names so resembling the ENDOREX JV TRADEMARK as to be likely to
cause confusion, deception or dissolution.
(8) SCHEIN shall promptly notify ENDOREX JV in writing of any
alleged infringement of which it becomes aware by a third party
of the ENDOREX JV TRADEMARK and provide ENDOREX JV with any
applicable evidence of infringement.
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3.6.3 Subject to any obligations from any third party licenses entered
into between ENDOREX JV and any third party having an ownership
interest in ENDOREX JV TRADEMARK, ENDOREX JV will be entitled to
conduct or have conducted all proceedings relating to the ENDOREX JV
TRADEMARK and shall at its sole discretion decide what action, if
any, to take in respect of any infringement or alleged infringement
of the ENDOREX JV TRADEMARK or passing-off or any other claim or
counter-claim brought or threatened in respect of the use or
registration of the ENDOREX JV TRADEMARK. Any such proceedings shall
be conducted at ENDOREX JV's expense and for its own benefit.
In the event that ENDOREX JV fails to take action in respect of any
infringement or alleged infringement of the ENDOREX JV TRADEMARK or
passing-off or any other claim or counter-claim brought or
threatened in respect of the use or registration of the ENDOREX JV
TRADEMARK, SCHEIN may request ENDOREX JV to take such action at the
expense of SCHEIN.
3.6.4 Except as provided in this Clause 3.6, SCHEIN will have no rights in
respect of the ENDOREX JV TRADEMARK or any trade names or trademarks
used by ENDOREX JV in relation to the PRODUCT or of the goodwill
associated therewith, and SCHEIN hereby acknowledges that, except as
expressly provided in this Agreement, it shall not acquire any
rights in respect thereof.
SCHEIN shall not, at any time during or after the TERM, challenge or
assist others to challenge the ENDOREX JV TRADEMARK, or the
registration thereof or attempt to register any trademarks, marks,
or trade names confusingly similar to the ENDOREX JV TRADEMARK.
3.6.5 In conjunction with the ENDOREX JV TRADEMARK, SCHEIN shall be also
entitled to market the PRODUCT in the TERRITORY under such
trademarks as are designated by SCHEIN provided that such trademarks
have been agreed in advance with ENDOREX JV.
CLAUSE 4 - COMPETING PRODUCTS
4.1 Subject to the provisions of Clause 4.2, ENDOREX JV and SCHEIN shall not
promote, license, manufacture, market, or sell any external subcutaneous
infusion device for the continuous delivery of the COMPOUND other than the
PRODUCT ("COMPETING PRODUCT") in the TERRITORY during the INITIAL PERIOD.
4.2 Notwithstanding the provisions of Clause 4.1, SCHEIN will be permitted to
market and sell the COMPOUND in any country in the TERRITORY up until
receipt of the DEVICE REGULATORY APPROVAL for the SYSTEM in such country
and for a period of six months after such approval, subject to any
governmental obligation to continue to make available the COMPOUND. During
the six months after receipt of the DEVICE REGULATORY APPROVAL in each
country of the TERRITORY, SCHEIN shall take reasonable steps to reduce and
eventually phase out its marketing and sale of the COMPOUND in such
country. After the expiration of the six month
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period, subject only to any governmental obligation to continue to make
available the COMPOUND, SCHEIN shall no longer market or sell the
COMPOUND, other than the PRODUCT or as otherwise permitted pursuant to
this Agreement, for the remaining term of this Agreement.
4.3. In addition and subject to Clauses 4.1 and 4.2 and to its obligations
under Clause 8, (i), SCHEIN agrees that, prior to receipt of the DEVICE
REGULATORY APPROVAL of the PRODUCT, SCHEIN shall not take any actions to
fundamentally damage the market for the PRODUCT in the TERRITORY and (ii)
prior to and after the launch of the PRODUCT in each country of the
TERRITORY, SCHEIN shall not take any actions that would be detrimental to
the market for the PRODUCT in such country of the TERRITORY.
4.4. In the event that SCHEIN wishes to manufacture or sell any pharmaceutical
product containing any compound other than the COMPOUND ("Alternative
Compound") for the treatment of iron overloading disorder by subcutaneous
delivery and the SYSTEM is a suitable, competitive delivery system for
such Alternative Compound, SCHEIN shall notify ENDOREX JV and ENDOREX JV
shall have the right of first negotiation to develop the SYSTEM to deliver
such Alternative Compound on terms to be negotiated by the parties in good
faith.
4.5. In the event that the Alternative Compound will be administered by a route
other than subcutaneous delivery, or the SYSTEM is not a suitable,
competitive delivery system for such Alternative Compound, then in
consideration of the expenditure incurred by ENDOREX JV in developing the
SYSTEM for the COMPOUND, SCHEIN will compensate ENDOREX JV for any lost
PROFIT sustained in any country in the TERRITORY during the six (6) year
period commencing upon the execution of this AGREEMENT as follows:
SCHEIN will pay to ENDOREX JV a quarterly payment equal to (i) the
[********] during the two calendar quarters immediately preceding the
calendar quarter in which SCHEIN launches the product containing the
Alternative Compound less (ii) [********] for each such calendar
quarter;
provided, however, that in the event during such period a third party
launches a product which is competitive with the PRODUCT and [********],
the Parties shall negotiate in good faith a revised compensation formula
to take into account the effect of such third party's product on the sales
of the PRODUCT.
CLAUSE 5 - PROJECT TEAM AND MANAGEMENT COMMITTEE
5.1 It is recognised by the parties that a significant resource shall be
required from each party to accomplish successful DEVICE REGULATORY
APPROVAL in the TERRITORY and launch of the PRODUCT, particularly in the
co-ordination of logistics, finalisation of various specifications,
preparation and agreement of clinical
_______________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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study designs and protocols, methodologies transfer, supply and packaging
configurations, shipping and handling procedures and for this purpose, the
parties will establish a PROJECT TEAM.
5.2 The PROJECT TEAM shall consist of a chief representative from each party
together with such additional business and development personnel from each
party who are appropriately skilled and knowledgeable in relation to the
PROJECT and who are deemed necessary to accomplish the work of the PROJECT.
5.3 Unless otherwise agreed by the parties, the PROJECT TEAM shall meet as
needed, such meetings to continue until the time of launch or such later
time as may be agreed. The PROJECT TEAM may meet in person or by means of
such telephone, video or other communication facilities as permit all
members of the PROJECT TEAM to communicate with each other simultaneously
and instantaneously. If the PROJECT TEAM decides to meet in person, such
meetings shall be held alternatively at the offices of ENDOREX JV and
SCHEIN or as otherwise agreed by the parties. Meetings shall be co-chaired
by the chief representatives of the parties. At and between meetings of
the PROJECT TEAM, each party shall keep the other fully and regularly
informed as to its progress with its respective obligations.
5.4 The Parties shall also establish a MANAGEMENT COMMITTEE which shall consist
of a senior executive of ENDOREX JV and a senior executive of SCHEIN along
with up to two observers from each of ENDOREX JV and SCHEIN. The
MANAGEMENT COMMITTEE shall have overall responsibility for the development
and commercialisation of the PRODUCT in the TERRITORY including but not
limited to:
(i) supervising the PROJECT TEAM,
(ii) approving and implementing all project plans, including the
project development timetable and schedules, timing of launch
of the PRODUCT, and budgets for the development of the
PRODUCT,
(iii) agreeing with SCHEIN that all direct marketing and selling
expenses for the PRODUCT are in accordance with Clause 8.2, and
(iv) deciding upon the appointment of any SUBLICENSEES for the
PRODUCT in any country of the TERRITORY outside of the USA,
including approving the commercial terms for any such
appointment.
5.5 Unless otherwise agreed by the Parties, the MANAGEMENT COMMITTEE shall meet
at least quarterly. Such meeting may be held in person or by means of such
telephone, video or other communication facilities as permit all members of
the MANAGEMENT COMMITTEE to communicate with each other simultaneously and
instantaneously.
5.6 In the event of a dispute between the project managers of each Party on the
PROJECT TEAM, the project managers shall refer the dispute to the
MANAGEMENT COMMITTEE, who shall discuss the matter and attempt to reach an
amicable solution. In the event that the MANAGEMENT COMMITTEE cannot
resolve the
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dispute amicably, the said officers shall refer the dispute to the Chairman
of ENDOREX JV and the Chief Executive Officer of SCHEIN who shall discuss
the matter and attempt to reach an amicable solution. The provisions of
this Clause 5.6 shall be without prejudice to the Parties' other rights and
remedies.
5.7 The Chairman of ENDOREX JV and the Chief Executive Officer of SCHEIN shall,
if they are unable to resolve a dispute or difference when it is referred
to them under Clause 5.6, refer the matter to an independent expert who is
knowledgeable of the medical device/drug delivery industry (the "Expert").
The selection of the Expert shall be mutually agreed upon by the Chairman
of ENDOREX JV and the Chief Executive Officer of SCHEIN. The Expert shall
be selected having regard to his suitability to determine the particular
dispute or difference on which he is being requested to determine. Unless
otherwise agreed between the Chief Executive Officers, the following rules
shall apply to the appointment of the Expert. The fees of the Expert shall
be shared equally between the Parties in dispute. The Expert shall be
entitled to inspect and examine all documentation and any other material
which he may consider to be relevant to the dispute. He shall afford each
Party a reasonable opportunity (in writing or orally) of stating reasons in
support of such contentions as each Party may wish to make relative to the
matters under consideration. The Expert shall give notice in writing of
his determination to the Parties within such time as may be stipulated in
his terms of appointment or in the absence of such stipulation as soon as
practicable. The Parties shall request that the Expert in any event
complete and deliver his findings within four (4) weeks from the reference
of the dispute or difference to him. Any determination by the Expert of a
dispute or difference shall not be final and binding on the Parties.
5.8 The PROJECT TEAM and MANAGEMENT COMMITTEE shall not have the authority to
amend or vary any of the terms of this Agreement unless in accordance with
the provisions of Clause 17.7.
CLAUSE 6 - DEVELOPMENT OF THE SYSTEM, COMPOUND AND PRODUCT
6.1 SCHEIN wishes ENDOREX JV to develop the SYSTEM to deliver the COMPOUND, and
ENDOREX JV shall diligently pursue the same in a commercially reasonable
manner in accordance with the PROJECT pursuant to the terms of this
Agreement. However, it is acknowledged that device development
incorporates inherent risk in terms of outcomes and ENDOREX JV does not
guarantee the further development of the SYSTEM, the ability of the SYSTEM
to achieve the PROJECT SYSTEM SPECIFICATIONS or PRODUCT SPECIFICATIONS,
and/or to obtain the MAF or DEVICE REGULATORY APPROVAL in one or more of
the countries of the TERRITORY.
6.2 Within [********]of the execution of this Agreement, ENDOREX JV and SCHEIN
shall agree upon the PRODUCT SPECIFICATIONS for the PRODUCT for the USA.
The Parties acknowledge that their primary purpose shall be to develop the
PRODUCT for commercialisation in the USA in accordance with the PROJECT.
___________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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6.3 ENDOREX JV and SCHEIN shall undertake their respective obligations under
the PROJECT on a collaborative basis. Accordingly, the parties shall co-
operate in good faith particularly with respect to unknown problems or
contingencies and shall perform their respective obligations in good faith
and in a commercially reasonable, diligent and workmanlike manner.
6.4 ENDOREX JV shall be responsible for all reasonable activities and costs
associated with the development of the SYSTEM for the USA in accordance
with the PROJECT to meet the PROJECT SYSTEM SPECIFICATIONS up to a maximum
cost of [********] as calculated in accordance with Clause 11.2.1 below.
In the event that additional expenditure in excess of such [********] is
required to develop the SYSTEM to meet the PROJECT SYSTEM SPECIFICATIONS,
the parties shall meet to discuss the matter in good faith.
6.5 The Parties recognise that the SYSTEM may require additional development
after achieving the PROJECT SYSTEM SPECIFICATIONS in order to meet the
PRODUCT SPECIFICATIONS for the USA. Such additional development work may
include, but is not limited to:
6.5.1 modifying or qualifying the adhesive system for use with children;
and
6.5.2 modifying or qualifying the integral needle for use with children.
6.5.3 designing and manufacturing the drug vial which will contain the
COMPOUND and will be made in connection with the SYSTEM (beyond the
work described in Clause 6.6.2 below) in accordance with
specifications to be mutually agreed within [********] of the
EFFECTIVE DATE. The design and manufacture of the drug cartridge
shall be performed to a development plan and budget set by the
PROJECT TEAM. The PROJECT TEAM shall also decide which Party shall
perform such development work.
The Parties agree that the cost of any such additional development work
shall [********]. In the event that additional expenditure in excess of
the [********] required in the aggregate to develop the SYSTEM and to meet
the PRODUCT SPECIFICATIONS by Clause 6.4 above (i.e., [********] for SYSTEM
Development) and this Clause 6.5 (i.e., additional development work of up,
[********] to meet the PRODUCT SPECIFICATIONS), the Parties shall meet to
discuss the matter in good faith.
6.6 SCHEIN shall be responsible for all activities and costs associated with,
the development of the COMPOUND for delivery with the SYSTEM in the USA,
and the development of the PRODUCT in accordance with the PROJECT, pursuant
to the terms of this Agreement and in particular, but not limited to
sourcing, supplying and, if
__________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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necessary, formulating, all COMPOUND for delivery with the SYSTEM.
6.7 Subject to the maximum cost set forth in Clause 6.4 and 6.5, SCHEIN and
ENDOREX JV shall be responsible for determining the scope and nature and
paying in equal shares the costs associated with carrying out all clinical
studies program in human patients, including for the avoidance of doubt any
pharmacokinetic/ pharmacodynamic studies. Such studies shall be performed
by the Parties for the USA in accordance with the following:
6.7.1 the primary objectives of the program so conducted shall be to
complete the DEVICE REGULATORY APPLICATION and DEVICE REGULATORY
APPROVAL in the USA and it is the Parties' expectation that the body
of data so generated in the PROJECT will also support such
applications for DEVICE REGULATORY APPROVAL which SCHEIN or its
AFFILIATES or SUBLICENSEES shall make in the other countries of the
TERRITORY in accordance with the terms of this Agreement. SCHEIN
shall carry out and complete the clinical program in the USA to a
standard and timeframe which it would otherwise find appropriate for
one of their major branded products;
6.7.3 SCHEIN shall keep ENDOREX JV informed as to the progress and
completion of the studies and, shall provide to ENDOREX JV summary
study reports thereon;
6.7.4 SCHEIN undertakes that it shall carry out all such clinical studies
to prevailing cGCP and cGLP and most specifically in accordance with
the applicable RHA standards and guidelines;
6.7.5 SCHEIN shall be responsible at its cost for the preparation and
filing of appropriate regulatory applications (to the extent deemed
appropriate by the PROJECT TEAM and subject to the provisions of
Clause 7.) to the extent required to allow it to undertake such
clinical studies. ENDOREX JV shall co-operate with SCHEIN as
reasonably necessary in the preparation and filing of such
regulatory applications. The parties agree that ENDOREX JV's charges
to SCHEIN for any such work shall be as set out in Clause 11.2 of
the Agreement.
6.8 SCHEIN may conduct any pharmacokinetic, clinical, pharmacoeconomic, and any
other market analysis, study or test on the PRODUCT which SCHEIN deems
appropriate, at SCHEIN's sole cost. In the event that SCHEIN does conduct
such analysis, study or test and pay all such costs, SCHEIN shall own the
said data and information. SCHEIN shall provide ENDOREX JV with a summary
report of any such material analysis, study or test performed by SCHEIN as
soon as is reasonably possible following its completion. ENDOREX JV shall
be entitled to use any such data and information in connection with ENDOREX
JV's commercial arrangements for the SYSTEM otherwise than in relation to
the PRODUCT for the FIELD, and in connection with the PRODUCT for the FIELD
in any countries which cease to be part of the TERRITORY; and in the
TERRITORY following termination of this Agreement.
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6.9 The PROJECT TEAM shall be responsible for identifying any additional
development work outside of the PROJECT which may be required to
commercialise the PRODUCT in any country of the TERRITORY outside of
[********] ("[********] Development Work"). The Parties agree that
[********] shall not be performed until a commercial agreement has been
concluded [********] of the TERRITORY unless otherwise agreed upon by the
Parties. It is the Parties intention that [********] of the TERRITORY.
The Parties agree that ENDOREX JV's charges to SCHEIN for any such work
shall be as set out in Clause 11.2 of the Agreement.
6.10 In the event that SCHEIN wishes ENDOREX JV to develop any other
configurations of the SYSTEM apart from the PROJECT SYSTEM SPECIFICATIONS,
the Parties shall negotiate in good faith as to the costs to be paid to
ENDOREX JV for such development of the SYSTEM and/or PRODUCT. The Parties
agree that ENDOREX JV's charges to SCHEIN for any such work shall be as
set out in Clause 11.2 of the Agreement.
6.11 SCHEIN shall supply to ENDOREX JV such quantities of COMPOUND [********]as
ENDOREX JV reasonably requires for the development of the SYSTEM in
accordance with the PROJECT. The quantity and delivery dates of such
quantities of COMPOUND shall be agreed upon by the Parties during the
PROJECT.
CLAUSE 7 - REGISTRATION OF THE PRODUCT
7.1 The PROJECT TEAM shall establish the regulatory procedure to be followed
by ENDOREX JV and SCHEIN in order to secure all necessary regulatory
approvals to market the PRODUCT in the TERRITORY as swiftly as
practicable.
7.2 If determined by the PROJECT TEAM, ENDOREX JV shall be responsible for
filing and maintaining a MAF (or equivalent) for the SYSTEM with the RHA
(or equivalent) in such countries in the TERRITORY as the MANAGEMENT
COMMITTEE shall select from time to time. ENDOREX JV shall use reasonable
endeavours in filing and maintaining each MAF with the RHA in the
TERRITORY as swiftly as practicable. The cost of filing and maintaining
such MAF for the SYSTEM shall be shared equally between ENDOREX JV and
SCHEIN.
7.3 At its expense, SCHEIN shall be responsible for the filing and maintaining
all required ANDAs and DEVICE REGULATORY APPLICATIONS in respect of the
COMPOUND and PRODUCT respectively, with the RHAs in the TERRITORY. SCHEIN
shall use reasonable endeavours in prosecuting each required ANDA and
DEVICE REGULATORY APPLICATION to approval by the RHA as swiftly as
practicable.
7.4 SCHEIN shall notify ENDOREX JV of the date of submission of any ANDA or
DEVICE REGULATORY APPLICATION in any country of the TERRITORY and shall
also notify ENDOREX JV of any ANDA APPROVAL or DEVICE
___________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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REGULATORY APPROVAL as soon as is reasonably possible following said
approval.
7.5 SCHEIN will be the holder of the ANDA APPROVAL and DEVICE REGULATORY
APPROVAL for the COMPOUND and PRODUCT respectively, in the TERRITORY,
provided however, that in the event that a DEVICE REGULATORY APPROVAL is
granted for the SYSTEM alone, such DEVICE REGULATORY APPROVAL shall be the
property of ENDOREX JV. In such event, ENDOREX JV shall provide SCHEIN
with reference rights to such DEVICE REGULATORY APPROVAL mutatis mutandis
with the provisions of Clause 7.6 below.
7.6 SCHEIN will permit ENDOREX JV, or ENDOREX JV's licensees, without charge,
to have access to, to photocopy and to cross reference all DEVICE
REGULATORY APPROVALS or DEVICE REGULATORY APPLICATIONS for the PRODUCT for
the purpose of obtaining DEVICE REGULATORY APPROVALS for the SYSTEM in
connection with ENDOREX JV's commercial arrangements otherwise than in
relation to the PRODUCT for the FIELD, and in connection with the PRODUCT
for the FIELD in any countries which cease to be part of the TERRITORY;
and in the TERRITORY following termination of this Agreement.
7.7 SCHEIN shall submit to ENDOREX JV a quarterly report, for every calendar
quarter prior to the marketing of the PRODUCT within [********] of the end
of the relevant quarter fully outlining the regulatory status of the
PRODUCT in the TERRITORY, including an overview of any material
communications with the RHAs in the TERRITORY.
7.8 SCHEIN shall be responsible for obtaining and maintaining all applicable
state and local regulatory approvals for the distribution of the PRODUCT
in the TERRITORY. ENDOREX JV shall co-operate with SCHEIN in obtaining
such approvals.
7.9 SCHEIN shall provide ENDOREX JV with access to all DEVICE REGULATORY
APPROVALS to enable ENDOREX JV to exercise its rights and fulfil its
obligations hereunder.
7.10 SCHEIN shall indemnify and hold harmless ENDOREX JV from and against all
claims, damages, losses, liabilities and expenses to which ENDOREX JV may
become liable relating to or arising out of SCHEIN's bad faith, negligence
or intentional misconduct in connection with the filing or maintenance of
the DEVICE REGULATORY APPLICATIONS and DEVICE REGULATORY APPROVALS in the
TERRITORY. ENDOREX JV shall indemnify and hold harmless SCHEIN from and
against all claims, damages, losses, liabilities and expenses to which
SCHEIN may become liable relating to or arising out of ENDOREX JV's bad
faith, negligence or intentional misconduct in connection with the filing
or maintenance of the MAF.
____________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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7.11 Subject to the express representations and warranties set out in this
Agreement, it is hereby acknowledged that there are inherent uncertainties
involved in the registration of pharmaceutical products and medical
devices with the RHA in relation to achieving the PROJECT SYSTEM
SPECIFICATIONS and/or PRODUCT SPECIFICATIONS, filing and maintaining the
MAF, and obtaining the ANDA APPROVAL and/or DEVICE REGULATORY APPROVAL and
such uncertainties form part of the business risk involved in undertaking
the form of commercial collaboration outlined in this Agreement.
Accordingly, ENDOREX JV and SCHEIN shall have no liability to the other as
a result of any failure of the PRODUCT to successfully achieve the PROJECT
SYSTEM SPECIFICATIONS or PRODUCT SPECIFICATIONS, or the MAF, ANDA APPROVAL
or DEVICE REGULATORY APPROVAL of the RHA, unless such failure is due to a
Party's gross negligence or intentional misconduct.
CLAUSE 8 - MARKETING AND PROMOTION OF THE PRODUCT
8.1 SCHEIN shall be responsible for the marketing, sale and distribution of
the PRODUCT in the USA. The PRODUCT may be marketed, sold and distributed
in all other countries of the TERRITORY by SUBLICENSEES appointed in
accordance with Clause 2.2. SCHEIN shall keep the MANAGEMENT COMMITTEE up
to date on the prevailing market conditions and SCHEIN's efforts at
marketing and selling the PRODUCT in the TERRITORY.
8.2 In general and consistently with the overall goals of optimizing PRODUCT
sales, profits and return on investments, SCHEIN shall employ all
commercially reasonable efforts to develop and maintain sales of the
PRODUCT in the TERRITORY and for a period of [********] years from
approval of the PRODUCT shall employ a level of advertising, sales,
marketing, and promotion efforts in the TERRITORY which is: (1)
commensurate with that put forth by other pharmaceutical companies of
similar size to SCHEIN for prescription products of similar market
potential for similar audience size/type in the TERRITORY, and (2)
sufficient with respect to the potential for the TERRITORY to fully
exploit the market potential for the PRODUCT with the understanding that
advertising, sales, marketing and promotional expenses in the
[********]after launch shall not, without the MANAGEMENT COMMITTEE's
consent, exceed [********]of the forecasted NSP, as determined by the
MANAGEMENT COMMITTEE. After the initial [********] year period all
dedicated direct marketing and selling expenses for the PRODUCT shall be
decided upon by the MANAGEMENT COMMITTEE at least 6 months in advance. At
least 3 months prior to the planned launch of the PRODUCT in the USA,
SCHEIN will outline to the MANAGEMENT COMMITTEE the structure of the
promotional activities to be carried out by SCHEIN for the period up to
the first commercial sale of the PRODUCT and for a period of [********]
thereafter. SCHEIN shall both prior to and subsequent to the
launch of a PRODUCT communicate with the MANAGEMENT COMMITTEE regarding
its objectives for and performance of such PRODUCT in the USA and in all
of the other countries of the TERRITORY. At
___________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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meetings of the MANAGEMENT COMMITTEE, SCHEIN shall report on the ongoing
sales performance of the PRODUCT in the TERRITORY, including marketing
approaches, educational campaigns, promotional and advertising materials
and campaigns, sales plans, pricing and results, performance against
competitors, its objectives for the PRODUCT and its plans for the next year
of the Agreement. In addition the MANAGEMENT COMMITTEE shall review the
quarterly PROFIT statements and in particular the calculation of PROFIT,
NSP and the deductible items listed in the definition of NSP.
8.3 Subject to the trademark licensing procedures set forth in Clause 3.6
above, SCHEIN shall control and be responsible for the content and format
of the promotional campaign to be submitted to the RHA, but shall inform
ENDOREX JV thereof and provide to ENDOREX JV a copy of such submissions,
which shall be subject to the confidentiality obligations herein. To the
extent required by the laws, rules and regulations of the RHA in the
applicable country of the TERRITORY, SCHEIN shall use reasonable efforts to
obtain approval by the RHA of the promotional campaign for the PRODUCT.
8.4 Within [********] of the EFFECTIVE DATE, the MANAGEMENT COMMITTEE shall
agree in good faith upon a schedule for the commercialisation of the
PRODUCT in such countries of the TERRITORY outside of the USA as the
MANAGEMENT COMMITTEE shall determine. Such schedule shall include but not
be limited to the target dates for appointing a SUBLICENSEE, filing the
DEVICE REGULATORY APPLICATION and for securing DEVICE REGULATORY APPROVAL
for the PRODUCT in such countries of the TERRITORY.
8.5 SCHEIN shall diligently pursue the commercialisation of the PRODUCT and
shall use commercially reasonable efforts, including reasonable IN MARKET
prices, to market and promote the PRODUCT in the USA, and in doing so,
shall use the same level of effort as with other similar products of
similar sales potential which it markets. SCHEIN covenants that it shall
not use the PRODUCT as a "loss leader" in its marketing programs and shall
at all times use its reasonable efforts in marketing the PRODUCT.
8.6 SCHEIN shall submit to ENDOREX JV for ENDOREX JV's information, copies of
all trade packaging, cartons and labels and other printed materials
(Materials") which SCHEIN proposes at any time to use in relation to the
sale of the PRODUCT provided always that the provisions of this Clause 8.6
shall be without prejudice to the obligations and responsibilities of
SCHEIN under Clauses 8.3 and 15.7 and SCHEIN shall indemnify and hold
harmless ENDOREX JV from and against all claims, damages, losses,
liabilities and expenses to which ENDOREX JV may become liable relating to
such Materials, provided however that SCHEIN shall have no liability to the
extent that such claims, damages, losses, liabilities and expenses arise
from information which was provided to SCHEIN by ENDOREX JV in accordance
with the terms of this Agreement. Unless ENDOREX JV reasonably objects to
the use of any such
___________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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materials within 14 days of receipt for information purposes, SCHEIN shall
be entitled to proceed to use such trade packaging, cartons and labels and
other printed materials in connection with the sale of the PRODUCT provided
however, that in no event shall such materials contain any statement which
may have a damaging or harmful effect on the commercialisation of the
PRODUCT and/or the goodwill of ENDOREX JV in the TERRITORY.
8.7 To the extent permitted by law, the materials referred to in Clause 8.6
shall include due acknowledgement that the PRODUCT is licensed from ENDOREX
JV.
8.8 To the extent permitted by law, ENDOREX JV shall be entitled to mark or
have marked all patent number(s) in respect of the ENDOREX JV PATENTS or
patentable ENDOREX JV IMPROVEMENTS on all PRODUCT or PRODUCT packaging, or
otherwise reasonably communicate to the trade the existence of any ENDOREX
JV PATENTS for the countries within the TERRITORY in such a manner as to
ensure compliance with, and enforceability under, applicable laws.
8.9 SCHEIN shall effect the first full scale commercial launch of the PRODUCT
in the USA as soon as reasonably practicable but in any event within
[********] in the USA, provided that ENDOREX JV has supplied SCHEIN with
LAUNCH STOCKS ordered in accordance with the terms of this Agreement. With
respect to each of the other countries of the TERRITORY, SCHEIN or its
SUBLICENSEES will effect a national commercial launch of the PRODUCT as
soon as reasonably practicable but in any event within [********], provided
that ENDOREX JV has supplied SCHEIN with LAUNCH STOCKS ordered in
accordance with the terms of this Agreement.
CLAUSE 9 - SUPPLY OF THE PRODUCT
9.1 Save as otherwise provided in this Agreement, ENDOREX JV's designee shall
produce and supply to SCHEIN its entire requirements of the PRODUCT.
ENDOREX JV shall supply the PRODUCT solely and exclusively to SCHEIN in
the TERRITORY and SCHEIN will purchase the PRODUCT exclusively from ENDOREX
JV in the TERRITORY.
9.2 The PRODUCT shall be supplied to SCHEIN by ENDOREX JV in such form as may
be agreed by the Parties during the PROJECT. ENDOREX JV shall deliver the
PRODUCT to SCHEIN and/or any party designated by SCHEIN in proper packaging
so as to permit safe storage and transport and to maintain the
sterilisation of the PRODUCT. ENDOREX JV shall be responsible at its sole
expense, for furnishing all operations, labour, supervision, equipment,
tools, machinery, and facilities necessary to manufacture the PRODUCT in
accordance with the SYSTEM SPECIFICATIONS, PRODUCT SPECIFICATIONS and
DEVICE REGULATORY APPROVALS; provided however, that in all events, SCHEIN
shall be responsible for the supply of the COMPOUND for the PRODUCT in
accordance with Clause 10.
_____________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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9.3 ENDOREX JV shall deliver the PRODUCT within 120 days of the receipt of a
firm purchase order therefor (120 days in the case of LAUNCH STOCKS). The
delivery time for the PRODUCT shall be agreed upon by the Parties.
9.4 No later than 12 months prior to the filing of the first REGULATORY
APPLICATION in the TERRITORY, SCHEIN shall provide ENDOREX JV with a
forecast of SCHEIN's requirements for the PRODUCT for the 18 month period
following the first anticipated REGULATORY APPROVAL in the TERRITORY. The
said forecast will be updated quarterly until the first REGULATORY APPROVAL
in the TERRITORY. Except as otherwise provided herein, all forecasts made
hereunder shall be made to assist ENDOREX JV in planning its production and
SCHEIN in planning marketing and sales. Such forecasts shall not be
binding purchase orders, and shall be without prejudice to SCHEIN's
subsequent firm purchase orders for the PRODUCT in accordance with the
terms of this Agreement.
9.5 Prior to the commencement of commercial manufacture of the PRODUCT, SCHEIN
shall provide a rolling 18 months forecast for the period beginning on the
first day of the relevant calendar month. The format of such 18 months
forecasts shall be comprised of a 12 monthly forecast together with 2
quarterly forecasts. The first calendar quarter of such 18 months forecast
shall be a binding purchase commitment of SCHEIN. In addition to the
obligation of SCHEIN regarding rolling 18 month forecasts outlined herein,
SCHEIN shall provide ENDOREX JV with rolling 3 years' forecasts on 1 August
of each year of this Agreement.
Subject to the agreement of the PROJECT TEAM, the calendar quarterly
forecasts (other than for LAUNCH STOCKS) shall not increase or decrease
from one quarter to the next by more than [********] in terms of volume of
the PRODUCT ordered. Notwithstanding the foregoing, ENDOREX JV will use its
reasonable efforts to fulfil SCHEIN's requirements in excess of forecasted
amounts, but shall not be obliged to meet such requirements if it is not
reasonably practicable to do so provided that ENDOREX JV shall supply the
units of PRODUCT so ordered but not immediately available as soon
thereafter as reasonably practicable.
9.6 The PROJECT TEAM shall agree upon a minimum batch for each form of the
PRODUCT which shall be manufactured by ENDOREX JV for SCHEIN pursuant to
the terms of this Agreement.
ENDOREX JV shall have the right to refuse to fulfil orders which do not
conform with the provisions of this Clause 9.6. Where ENDOREX JV in its
absolute discretion, fulfils any order which does not conform with the
provisions of this Clause 9.6, the fulfilment of such order by ENDOREX JV
shall not affect ENDOREX JV's right to refuse to fulfil any subsequent
order which does not conform with the provisions hereof.
_____________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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9.7 In advance of the REGULATORY APPROVAL in the USA, the Parties shall
discuss and agree upon the manufacture and purchase of specific quantities
of LAUNCH STOCKS; however, for the avoidance of doubt, the parties hereby
confirm that ENDOREX JV's manufacturing obligations shall only arise on
receipt of firm purchase orders. For the avoidance of doubt, ENDOREX JV
shall only accept orders for LAUNCH STOCKS in respect of the launch of the
PRODUCT in the USA.
9.8 SCHEIN will notify ENDOREX JV within [********] of its receipt of an
approval letter, or a pre-approval letter in respect of a REGULATORY
APPLICATION from an RHA. SCHEIN shall within [********]of such
notification place a firm purchase order with ENDOREX JV for LAUNCH
STOCKS, unless such a purchase order has already been submitted to ENDOREX
JV prior to that date. In addition, SCHEIN will use its reasonable efforts
to provide forecasts for deliveries in addition to the LAUNCH STOCKS for
the balance of the year in which the REGULATORY APPROVAL is obtained.
9.9 Save as otherwise agreed between the Parties, delivery of consignments of
PRODUCT shall be effected to SCHEIN or SCHEIN's designee by ENDOREX JV's
designee EX-WORKS the applicable facility. Risk of loss of or damage to
any consignment of the PRODUCT shall pass to SCHEIN or it's designee when
each such consignment of the PRODUCT is loaded onto the vehicle of SCHEIN
or SCHEIN's designee's agent on which it is to be despatched from the
applicable facility. SCHEIN or it's designee shall fully insure or procure
the insurance of all consignments of the PRODUCT from the time when risk
passes as aforesaid and shall produce the supporting insurance when
requested by ENDOREX JV.
9.10 All claims for failure of any delivery of the PRODUCT to conform in all
material respects to PRODUCT SPECIFICATIONS under Clause 9 shall be made
by SCHEIN to ENDOREX JV in writing as soon as possible but in any event
within 30 days following delivery except in the case of latent defects.
Claims for latent defects, which could not have been reasonably discovered
during the routine testing protocol (to be agreed by SCHEIN and ENDOREX
JV), shall be made by SCHEIN to ENDOREX JV in writing as soon as possible
but in any event within 30 days of discovery. Failure to make timely
claims in the manner prescribed shall constitute acceptance of the
delivery. Where possible, SCHEIN shall return the defective PRODUCT to
ENDOREX JV, in such amount as is agreed by the Parties, in support of any
claim pursuant to this Clause 9.10.
9.11 PRODUCT which has been delivered and which has been shown within the
period designated in Clause 9.10 not to conform in all material respects
to PRODUCT SPECIFICATIONS where such non-conformity is attributable to
negligent acts or omissions of ENDOREX JV shall be replaced at ENDOREX
JV's cost within 90 days of the receipt by ENDOREX JV of the failed SYSTEM
except where such non-conformity is attributable to negligent acts or
omissions of SCHEIN.
______________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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9.12 In the event of an unresolved dispute as to conformity of the PRODUCT with
the PRODUCT SPECIFICATIONS, the Parties shall within 30 days appoint an
independent first class laboratory to undertake the relevant testing and
its findings shall be conclusive and binding upon the Parties. All costs
relating to this process shall be borne solely by the unsuccessful Party.
9.13 The Parties shall negotiate in good faith to conclude a detailed technical
agreement(s) regulating the Parties' respective obligations from a
technical and quality perspective for the supply of the PRODUCT by ENDOREX
JV to SCHEIN or to any SUBLICENSEES.
9.14 Subject to Clause 17.5 hereof, in the event that (i) ENDOREX JV fails to
supply a shipment of the PRODUCT which has been ordered by SCHEIN for a
period [********] from the receipt of a firm purchase order or (ii) there
are delays in filling [********] which delays [********] when each delay
is measured beginning on the [********] of the corresponding firm purchase
order or (iii) there is a shortfall [********] delivered by ENDOREX JV
which on [********]of the total amount of [********], then ENDOREX JV
shall promptly notify SCHEIN in writing of the cause of the failure, delay
or shortfall in supply of the PRODUCT. Unless such failure, delay or
shortfall is caused by SCHEIN or any other supplier of the COMPOUND or
other raw materials, if ENDOREX JV has not remedied the failure, delay or
shortfall within a [********]of such notice, ENDOREX JV and SCHEIN shall
discuss appropriate remedies which may include, subject to preexisting
licensing agreements by and between ENDOREX JV and any third party,
granting SCHEIN a licence to manufacture the PRODUCT itself or appoint an
alternative manufacturer of the PRODUCT. In the event that SCHEIN is
granted such a production licence, ENDOREX JV shall without charge:
9.14.1 provide SCHEIN (or SCHEIN's designee) with any technical data
necessary for the carrying of this into effect, which information
or data shall be deemed to be confidential information hereunder.
To this end, ENDOREX JV shall impart to SCHEIN the documentation
constituting the required material support, more particularly
practical performance advice, shop practice, specifications as to
materials to be used and control methods. For the avoidance of
doubt, the Parties confirm that ENDOREX JV shall receive the
royalty set out in Clause 11.3 from the PROFIT on sales of all
PRODUCT manufactured by SCHEIN or any alternative manufacturer
appointed by SCHEIN in accordance with this Clause 9.14 in
consideration of the licence of the ENDOREX JV PATENTS; and
9.14.2 assist SCHEIN for the working up and use of the ENDOREX JV
BACKGROUND TECHNOLOGY and ENDOREX JV IMPROVEMENTS, the machinery
tools and equipment necessary to manufacture the PRODUCT as well
as for the training of SCHEIN's personnel. For this purpose,
______________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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ENDOREX JV shall receive SCHEIN's scientific staff in its premises
for periods the term of which shall be decided by common consent.
When ENDOREX JV has remedied the situation that prevented ENDOREX JV from
satisfying SCHEIN's requirements and is once again able to fulfil its
obligations to supply the SYSTEM as provided for in this Agreement,
SCHEIN shall cease manufacturing the PRODUCT or purchasing the PRODUCT
from an alternative manufacturer [********] and shall resume purchasing
the PRODUCT from ENDOREX JV pursuant to the terms of this Agreement.
9.15 In manufacturing the PRODUCT under Clause 9.14, SCHEIN or its AFFILIATES
shall be responsible for all process and equipment validation required by
the RHA and the regulations thereunder and shall take all steps
reasonably necessary to pass government inspection by the RHA.
CLAUSE 10 - SUPPLY OF THE COMPOUND
10.1. Subject to the terms of this Agreement, SCHEIN hereby grants to ENDOREX
JV, and ENDOREX JV hereby accepts for the TERM, a royalty-free sub-
licensable licence to the SCHEIN COMPOUND TECHNOLOGY and SCHEIN COMPOUND
IMPROVEMENTS to develop, manufacture, use, offer for sale and sell the
PRODUCT to SCHEIN in accordance with the terms of this Agreement.
10.2 SCHEIN shall be responsible at its sole expense, for furnishing all
operations, labour, supervision, equipment, tools, machinery, COMPOUND
and facilities necessary to ensure a reliable and continuous supply of
the COMPOUND for the PRODUCT in accordance with the SYSTEM
SPECIFICATIONS, PRODUCT SPECIFICATIONS and DEVICE REGULATORY APPROVALS.
10.3 SCHEIN shall be responsible for, and shall ensure that, all of the
suppliers of the COMPOUND and raw materials necessary for the COMPOUND,
shall hold all necessary licenses and registrations appropriate and
necessary for the inclusion of such materials in the PRODUCT. All
COMPOUND to be supplied by SCHEIN to ENDOREX JV shall be freeze dried, in
a vial with a stopper, and in proper packaging
10.4. SCHEIN shall supply to ENDOREX JV such quantities of COMPOUND [********]
as ENDOREX JV requires for the manufacture and supply of PRODUCT to
SCHEIN and any SUBLICENSEES for commercial sale or promotional samples in
all of the countries of the TERRITORY. COMPOUND shall be supplied by
SCHEIN in accordance with orders placed by ENDOREX JV. At the placement
of such orders, ENDOREX JV shall notify SCHEIN of then remaining amount
of stocks of COMPOUND held by ENDOREX JV. SCHEIN shall be responsible for
ensuring that ENDOREX JV receives delivery of COMPOUND in such quantities
and at such times so as to ensure that ENDOREX JV has sufficient stocks
of the COMPOUND to meet SCHEIN's firm purchase orders and supply the
PRODUCT to SCHEIN. SCHEIN
______________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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shall furnish the appropriate certificate of analysis with each delivery
of COMPOUND. ENDOREX JV shall be entitled to rely upon such certificates
of analysis without the necessity of additional testing. As of the date
of this Agreement, the Parties agree that adequate quantities of COMPOUND
shall be delivered by SCHEIN to ENDOREX JV at least [********] in advance
of the date on which the delivery of PRODUCT is scheduled to be made to
SCHEIN or such longer period as may be agreed by the PROJECT TEAM. During
the period in which ENDOREX JV is manufacturing LAUNCH STOCKS, the
foregoing period of [********] shall be increased to [********].
10.5. Prior to the launch of the PRODUCT, the Parties shall negotiate in good
faith to conclude a technical agreement regulating the Parties'
respective obligations from a technical and quality perspective for the
supply of the COMPOUND by SCHEIN to ENDOREX JV and the supply of the
PRODUCT by ENDOREX to SCHEIN. In any event all quantities of the COMPOUND
delivered by SCHEIN hereunder shall conform with the specifications as
approved by the RHA under SCHEIN's ANDA APPROVAL and any further
specifications as may be set out or agreed to in the technical agreement
referred to above (defined herein as the "COMPOUND SPECIFICATIONS").
10.6. All quantities of the COMPOUND delivered by SCHEIN hereunder shall
conform to the COMPOUND SPECIFICATIONS and all prevailing laws and
regulatory requirements of the country where the COMPOUND is manufactured
and intended to be sold.
10.7. Save as otherwise agreed between the Parties, delivery of consignments of
COMPOUND shall be effected by SCHEIN, FCA the manufacturing facility
designated by ENDOREX JV, and all risks therein shall pass to ENDOREX JV
when each such consignment of the COMPOUND is delivered to ENDOREX JV's
designated facility. ENDOREX JV shall fully insure or procure the
insurance of all consignments of the COMPOUND when risk passes as
aforesaid and shall produce such insurance documentation supporting same
as and when requested by SCHEIN. ENDOREX JV shall furnish the appropriate
certificate of analysis with each delivery of PRODUCT.
10.8. Title to the COMPOUND supplied to ENDOREX JV by SCHEIN shall at all times
remain in SCHEIN. ENDOREX JV shall clearly mark such COMPOUND as the
property of SCHEIN. At the termination of this Agreement, ENDOREX JV
shall surrender to SCHEIN all useable COMPOUND in ENDOREX JV's
possession.
10.9. All claims for failure of any shipment of the COMPOUND to conform to the
COMPOUND SPECIFICATIONS must be made by ENDOREX JV to SCHEIN in writing
within 30 days following delivery except in the case of latent defects.
Claims for latent defects shall be made by ENDOREX JV to SCHEIN in
writing as soon as possible but in any event within 30 days of discovery.
Failure to make timely claims in
______________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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the manner prescribed shall constitute acceptance of the shipment.
COMPOUND which has been delivered and which has been shown within the
designated period not to conform to COMPOUND SPECIFICATIONS shall be
replaced at SCHEIN's cost within 90 days of the receipt by SCHEIN of the
failed COMPOUND.
10.10. In the event that the COMPOUND supplied by SCHEIN is not in compliance
with the COMPOUND SPECIFICATIONS, or is otherwise adulterated,
misbranded or defective, ENDOREX JV shall notify SCHEIN and shall follow
all reasonable written instructions of SCHEIN regarding, and be
responsible, at the sole cost and expense of SCHEIN, for re-analysis,
sampling, processing, return, disposal or destruction, including
certification of destruction, of such non-conforming bulk COMPOUND. In
addition, SCHEIN shall be responsible for all costs borne by ENDOREX JV
in the use of such non-conforming bulk COMPOUND, unless such non-
compliance with the COMPOUND SPECIFICATIONS was solely due to a failure
by ENDOREX JV to follow SCHEIN'S reasonable written instructions
regarding such non-conforming bulk COMPOUND.
10.11. In the event of an unresolved dispute as to conformity of the COMPOUND
with the COMPOUND SPECIFICATIONS, the Parties shall within 30 days
appoint an independent first class laboratory to undertake the relevant
testing and its findings shall be conclusive and binding upon the
Parties. All costs relating to this process shall be borne solely by the
unsuccessful Party.
10.12 SCHEIN shall indemnify ENDOREX JV against any claims, actions or losses
arising from any failure, inability or delay in supplying the PRODUCT to
customers arising out of any failure inability or delay by SCHEIN in
supplying the COMPOUND to ENDOREX JV or ENDOREX JV's designee in
accordance with the provisions of this Clause 10.
10.13 ENDOREX JV shall be responsible for, and shall ensure that, all of the
suppliers of equipment, tools, machinery and materials shall hold all
necessary licenses and registrations appropriate and necessary for the
inclusion of such materials in the PRODUCT.
10.14 Notwithstanding the foregoing provisions of Article 10, ENDOREX JV shall
be entitled, at its sole discretion, to take over some or all of the
activities associated with the manufacture of the drug vial containing
the COMPOUND which will be supplied by SCHEIN to ENDOREX JV; provided,
however, that there may be a transition period of up to 60 days during
which SCHEIN continues to perform the subject activities but only
because of commitments to third party suppliers that SCHEIN had agreed
to prior to the exercise of such right to take over by ENDOREX JV. Any
such manufacture of the drug vial by ENDOREX JV or ENDOREX JV's designee
shall be in a competitive manner.
10.15 In the event that any royalty, licence fees or other compensation
obligations related to the COMPOUND and/or the bulk substance which is
used to formulate the COMPOUND ("Bulk Substance") are payable to any
third parties as a result of the use of the COMPOUND in the PRODUCT,
SCHEIN shall be solely responsible for the payment of any such royalty,
licence fee or other compensation obligations. For the
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avoidance of doubt, any such royalty, licence fee or other compensation
obligations relating to the COMPOUND and/or the Bulk Substance shall not
be included in the calculation of the MANUFACTURING COST of the COMPOUND
and shall not be deducted from the PROFIT.
10.16. SCHEIN entered into a supply agreement with Pharmacia & Upjohn Company
("PNU") on 1st July 1991 pursuant to which SCHEIN was appointed the
exclusive worldwide purchaser of the Bulk Substance from PNU. This
Agreement was terminated by PNU by letter dated 30th July 1999. SCHEIN
and PNU are presently engaged in discussions regarding future supply of
such Bulk Substance to SCHEIN. The Parties acknowledge that it is
critical for the success of the PRODUCT that SCHEIN (i) secure a
continuous supply of the Bulk Substance, and (ii) obtain supply rights
to the Bulk Substance. SCHEIN shall use its best commercial efforts to
ensure a continuous and uninterrupted supply of the Bulk Substance for
the COMPOUND throughout the TERM of this Agreement. ENDOREX JV shall be
entitled, at its sole discretion, to forthwith terminate this Agreement,
in the event that SCHEIN:
10.16.1 at any time during the TERM of this Agreement, (i) fails to
supply a shipment of the COMPOUND which has been ordered by
ENDOREX JV for a period exceeding [********] from the receipt
of an order from ENDOREX JV or (ii) there are delays in filling
each of the [********] successive orders which delays
cumulatively exceed [********] when each delay is measured
beginning on the 91st day from receipt of the corresponding
orders or (iii) there is a shortfall in [********] successive
shipments delivered by SCHEIN which on a cumulative basis
exceeds [********] of the total amount of said [********]
orders; or
10.16.2 fails to, within [********] from the EFFECTIVE DATE, enter into
a supply arrangement with [********], or enter into any other
arrangement which secures SCHEIN e supply rights to the Bulk
Substance for the TERM of this Agreement.
CLAUSE 11 - FINANCIAL PROVISIONS
11.1 Licence Royalties:
-----------------
11.1.1 In consideration of the licence of the ENDOREX JV PATENTS and
patentable ENDOREX JV IMPROVEMENTS granted to SCHEIN under this
Agreement, SCHEIN shall pay to ENDOREX JV [********]of any
LICENCE FEES which are received from SUBLICENSEES.
_____________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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11.2 Development Royalties:
---------------------
11.2.1 All work that ENDOREX JV shall perform pursuant to the PROJECT in
order to meet the PROJECT SYSTEM SPECIFICATIONS in accordance with
Clause 6.4 hereof, shall be charged [********].
Except as otherwise provided in this Agreement, all development or other
technical assistance which ENDOREX JV shall perform pursuant to
the PROJECT or the terms of this Agreement which is outside of the
scope of the PROJECT SYSTEM SPECIFICATIONS, or which is otherwise
requested by SCHEIN or any SUBLICENSEES and agreed to by ENDOREX
JV, shall be charged [********]. Any such work shall be mutually
agreed upon by in writing in advance of the commencement of such
work, which agreement shall include an agreed upon budget.
11.2.2 All development and other work agreed upon by ENDOREX JV pursuant
to Clause 11.2.1. and carried out by ENDOREX JV hereunder, shall
be invoiced by ENDOREX JV to SCHEIN at the end of each calendar
quarter. Payment shall be effected in US Dollars within [********]
of the date of receipt of the relevant invoice.
11.2.3 For the avoidance of doubt, the Parties acknowledge that in the
event that a SUBLICENSEE requests that ENDOREX JV perform
development work or that SCHEIN perform development, trial,
regulatory applications or other work for such SUBLICENSEE:
(i) SCHEIN shall have no entitlement to any profit which may be
made by ENDOREX JV from any such development work performed
by ENDOREX JV on the SYSTEM for any such SUBLICENSEE; and
(ii) ENDOREX JV shall have no entitlement to any profit which may
be made by SCHEIN from any such development, trial,
regulatory applications or other work performed by SCHEIN on
the COMPOUND for any such SUBLICENSEE.
11.3 Price of Product:
----------------
11.3.1 ENDOREX JV shall supply the PRODUCT to SCHEIN [********] in
accordance with the terms of this Agreement.
11.3.2 At the end of each quarter, ENDOREX JV shall retrospectively
determine the exact amount of [********] for the preceding
calendar quarter period and provide [********] to SCHEIN and if
necessary, there shall be a payment
_____________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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either by ENDOREX JV to SCHEIN or by SCHEIN to ENDOREX JV to
adjust [********]
11.3.3 Payment for all PRODUCT delivered from ENDOREX JV designee's
manufacturing facility to SCHEIN shall be effected in U.S. Dollars
($) within [********]of the date of the delivery of the PRODUCT EX
WORKS the applicable facility.
11.4 Allocation:
----------
11.4.1 In consideration of the license of the ENDOREX JV PATENTS and
patentable ENDOREX JV IMPROVEMENTS to SCHEIN hereunder, SCHEIN
shall pay a royalty [********]to ENDOREX JV.
11.4.2 Within four weeks of the end of each calendar quarter, SCHEIN
shall notify ENDOREX JV of the NSP of PRODUCT for that previous
calendar quarter. Payments shown by each calendar quarter report
to have accrued but which have not yet been paid shall be included
in calculating the NSP for that quarter.
11.4.3 Payment [********] shall be made once in each calendar quarter
within 45 days after the expiry of the relevant calendar quarter.
11.4.4 All payments due hereunder shall be made in U.S. Dollars.
11.4.5 In the event that SCHEIN or any AFFILIATE of SCHEIN shall sell the
PRODUCT together with other products of SCHEIN to third parties
(by the method commonly known in the pharmaceutical industry as
"bundling") and the price attributable to the PRODUCT is less than
the average price of "arms length" sales to similar customers for
the reporting period in which sales occur (such sales to be
excluded from the calculation of the average price of "arms
length" sales), NSP for any such sales shall be the [********] in
the country where such bundling occurs during the reporting period
in which such sales occur.
11.5 Method of calculation of royalties and other payments:
-----------------------------------------------------
The parties acknowledge and agree that the methods for calculating the
royalties and other payments hereunder are for the purposes of the
convenience of the parties, are freely chosen and not coerced.
CLAUSE 12 - PAYMENTS, REPORTS AND AUDITS
12.1 SCHEIN shall keep true and accurate records of gross sales of the PRODUCT,
the number of units of PRODUCT sold, the items deducted from the gross
amount
_____________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
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calculating the NSP, the NSP, the PROFIT and the royalties payable to
ENDOREX JV under Clause 11. SCHEIN shall deliver to ENDOREX JV a written
statement ("the STATEMENT") thereof within 30 days following the end of
each calendar quarter, (or any part thereof in the first or last calendar
quarter of this Agreement) for such calendar quarter. The STATEMENT shall
outline on a country-by-country basis, the calculation of the NSP from
gross revenues during that calendar quarter, the applicable percentage
rate, and a computation of the sums due to ENDOREX JV. The parties'
financial officers shall agree upon the precise format of the STATEMENT.
12.2 Unless otherwise notified in writing by ENDOREX JV, payments due on PROFIT
of the PRODUCT based on sales amounts in a currency other than US Dollars
shall first be calculated in the foreign currency and then converted to US
Dollars on the basis of the exchange rate in effect for the purchase of US
Dollars with such foreign currency quoted in the Wall Street Journal (or
comparable publication if not quoted in the Wall Street Journal) with
respect to the sale of currency of the country of origin of such payment
for the day prior to the date on which the payment by SCHEIN is being
made.
12.3 Any income or other taxes which SCHEIN is required by law to pay or
withhold on behalf of ENDOREX JV with respect to royalties and any other
monies payable to ENDOREX JV under this Agreement shall be deducted from
the amount of such PROFIT payments, royalties and other monies due. SCHEIN
shall furnish ENDOREX JV with proof of such payments. Any such tax
required to be paid or withheld shall be an expense of and borne solely by
ENDOREX JV. SCHEIN shall promptly provide ENDOREX JV with a certificate or
other documentary evidence to enable ENDOREX JV to support a claim for a
refund or a foreign tax credit with respect to any such tax so withheld or
deducted by SCHEIN. The parties will reasonably cooperate in completing
and filing documents required under the provisions of any applicable tax
treaty or under any other applicable law, in order to enable SCHEIN to
make such payments to ENDOREX JV without any deduction or withholding.
12.4 All payments due hereunder shall be made to the designated bank account of
ENDOREX JV in accordance with such timely written instructions as ENDOREX
JV shall from time to time provide.
12.5 SCHEIN shall pay interest to ENDOREX JV at the Prime Rate publicly
announced by Morgan Guaranty Trust Company of New York at its principal
office on the date (or next to occur business day, if such date is not a
business day) on which payment should have been made pursuant to the
applicable provisions of this Agreement plus [********] REPRESENTS
MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.on all late payments under this Agreement applicable from
the date on which payment should have been made pursuant to the applicable
provisions of this Agreement until the date of payment.
12.6 For the 180 day period following the close of each calendar year of the
Agreement, ENDOREX JV and SCHEIN will, in the event that the other party
reasonably requests
_________________
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such access, provide each other's independent certified accountants
(reasonably acceptable to the other party) with access, during regular
business hours and subject to the confidentiality provisions as contained
in this Agreement, to such party's books and records relating to the
PRODUCT, solely for the purpose of verifying the accuracy and reasonable
composition of the calculations hereunder for the calendar year then
ended.
12.7 In the event of a discovery of a discrepancy which exceeds [********]of
the amount due or charged by a party for any period, the cost of such
accountants shall be borne by the audited party; otherwise, such cost
shall be borne by the auditing party.
CLAUSE 13 - DURATION AND TERMINATION
13.1 This Agreement shall be deemed to have come into force on the EFFECTIVE
DATE and, subject to the rights of termination outlined in this Clause 13
will expire on a country by country basis on the 10th anniversary of the
date of the launch of the PRODUCT in the country concerned ("the INITIAL
PERIOD").
13.2 At the end of the INITIAL PERIOD, the Agreement shall continue
automatically for rolling 2 year periods thereafter, unless the Agreement
has been terminated by either of the parties by serving 2 years' written
notice on the other immediately prior to the end of the INITIAL PERIOD or
any additional 2 year period provided for herein.
13.3 In addition to the rights of termination provided for elsewhere in this
Agreement, either party will be entitled forthwith to terminate this
Agreement by written notice to the other party if:
13.3.1 that other party commits any breach of any of the provisions of
this Agreement, and in the case of a breach capable of remedy,
fails to remedy the same within 90 days after receipt of a written
notice giving full particulars of the breach and requiring it to
be remedied;
13.3.2 that other party goes into liquidation (except for the purposes of
amalgamation or reconstruction and in such manner that the company
resulting therefrom effectively agrees to be bound by or assume
the obligations imposed on that other party under this Agreement);
13.3.3 an encumbrancer takes possession or a receiver is appointed over
any of the property or assets of that other party; or
13.3.4 any proceedings are filed or commenced by that other party under
bankruptcy, insolvency or debtor relief laws or anything analogous
to any of the foregoing under the laws of any jurisdiction occurs
in relation to that other party.
____________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
--------------------------------------------------------------------------------
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13.4 For the purposes of Clause 13.3.1, a breach will be considered capable of
remedy if the party in breach can comply with the provision in question in
all respects other than as to the time of performance (provided that time
of performance is not of the essence).
13.5 In further addition to the rights and termination provided for elsewhere
in this Agreement, ENDOREX JV shall be entitled to forthwith terminate the
licence granted to SCHEIN under this Agreement for any country or
countries of the TERRITORY, in accordance with the terms set out below, in
the event that SCHEIN:-
13.5.1 fails to file a DEVICE REGULATORY APPLICATION for the PRODUCT in
the USA within 6 months from the completion of the PROJECT; or
13.5.2 fails to effect the commercial launch of the PRODUCT in the USA as
required by Clause 8 in accordance with the provisions thereof; or
13.5.3 notifies ENDOREX JV that it does not wish to commercialise the
PRODUCT in any country of the TERRITORY; or
13.5.4 a TECHNOLOGICAL COMPETITOR of ENDOREX JV, or a company with a
directly competing product (other than Bayer AG), acquires 25% or
more of the SCHEIN's voting stock or where 25% or more of the
voting stock of a TECHNOLOGICAL COMPETITOR of ENDOREX JV hereto is
acquired by SCHEIN.
CLAUSE 14 - CONSEQUENCES OF TERMINATION
14.1 Upon exercise of those rights of termination specified in Clauses 13 or
elsewhere in this Agreement, this Agreement and all licenses to SCHEIN of
ENDOREX JV BACKGROUND TECHNOLOGY and ENDOREX JV IMPROVEMENTS shall,
subject to the provisions of the Agreement which survive the termination
of the Agreement and Clause 14.2, automatically terminate forthwith and be
of no further legal force or effect.
14.2 Upon termination of the Agreement by either party, or upon termination by
ENDOREX JV of a licence for a particular country under Clause 14.5, the
following shall be the consequences relating to the TERRITORY or the
particular country, as applicable:-
14.2.1 any sums that were due from SCHEIN to ENDOREX JV under the
provisions of Clause 11 or otherwise howsoever prior to the
exercise of the right to terminate this Agreement as set forth
herein shall be paid in full within 30 days of termination of this
Agreement and receipt of the invoice in respect thereto, and
ENDOREX JV shall not be liable to repay to SCHEIN any amount of
money paid or payable by SCHEIN to ENDOREX JV up to the date of
the termination of this Agreement;
14.2.2 all confidentiality provisions set out herein shall remain in full
force and effect for a period of 7 years from the date of
termination of this Agreement;
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14.2.3 all representations and warranties contained herein, including,
without limitation, those contained in Clause 15 hereof, shall
survive termination of this Agreement and all obligations of the
Parties intended to be performed after termination as provided
herein shall remain in full force and effect;
14.2.4 the rights of inspection and audit shall continue in force for the
period referred to in the relevant provisions of this Agreement;
14.2.5 ENDOREX JV shall be entitled to research, develop, manufacture and
commercialise the SYSTEM in the FIELD for its own benefit in the
relevant country or countries of the TERRITORY or in all of the
TERRITORY, as appropriate, and either Party shall be entitled to
manufacture, market, sell, or assist in the distribution or sale
of a COMPETING PRODUCT;
14.2.6 ENDOREX JV shall be entitled to file for DEVICE REGULATORY
APPROVAL for the SYSTEM with any [********] compound otherwise
available to ENDOREX JV, in any country which ceases to be a part
of the TERRITORY, or in any country of the TERRITORY in the event
of termination of this Agreement,;
14.2.7 SCHEIN shall transfer to ENDOREX JV or ENDOREX JV's designee
without charge (but at ENDOREX JV's expense, if any), and/or
permit ENDOREX JV or ENDOREX JV's designee without charge to
conduct sufficient cross-referencing to, and have sufficient
access to any and all pending DEVICE REGULATORY APPLICATIONS or
granted DEVICE REGULATORY APPROVALS for the PRODUCT for the
relevant country or countries of the TERRITORY; and
14.2.8 SCHEIN shall be entitled to research, develop, manufacture and
commercialise the COMPOUND in the FIELD for its own benefit in the
TERRITORY or in the relevant country or countries of the TERRITORY
and either party shall be entitled to manufacture, market, sell,
or assist in the distribution or sale of a COMPETING PRODUCT.
CLAUSE 15 - WARRANTY AND INDEMNITY
15.1 ENDOREX JV represents and warrants that
15.1.1 it has the sole, exclusive and unencumbered right to grant the
licences and rights herein granted to SCHEIN, and that it has not
granted any option, licence, right or interest in or to the
ENDOREX JV PATENTS or ENDOREX JV KNOW-HOW to any third party which
would conflict with the rights granted by this Agreement. ENDOREX
JV agrees to hold SCHEIN harmless from any and all costs, expenses
and damages (including reasonable attorneys' fees) incurred or
sustained by SCHEIN as the result of any third party's
______________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
_______________________________________________________________________________
Page 40 of 56
<PAGE>
challenges to ENDOREX JV's right to grant the rights and
licences herein granted to SCHEIN,
15.1.2 the execution of this Agreement and the full performance of its
obligations and rights under this Agreement will not breach or
in any way be inconsistent with the terms and conditions of any
licence, contract, understanding or agreement, whether express,
implied, written or oral between ENDOREX JV and any third party.
15.2 SCHEIN represents and warrants that
the execution of this Agreement and the full performance of its
obligations and rights under this Agreement will not breach or
in any way be inconsistent with the terms and conditions of any
licence, contract, understanding or agreement, whether express,
implied, written or oral between SCHEIN and any third party.
15.3 Except as expressly stated in this Clause 15 or otherwise in this
Agreement, all other warranties, conditions and representations, express
or implied, statutory or otherwise, including a warranty as to the
quality or fitness for any particular purpose of the SYSTEM are hereby
excluded and except as expressly stated in this Agreement, ENDOREX JV
shall not be liable in contract, tort or otherwise for any loss, damage,
expense or injury, arising out of or in connection with the PRODUCT or
any defect in the SYSTEM or from any other cause.
15.4 ENDOREX JV represents and warrants that, in performing the development
activities and manufacturing of the SYSTEM pursuant to this Agreement,
ENDOREX JV will exercise all due skill, care and diligence in conducting
such activities as are commercially reasonable and comply with all
applicable laws and regulations..
15.5.1 SCHEIN represents and warrants that the COMPOUND provided by SCHEIN
under this Agreement will conform and perform in all material respects
to:-
15.5.1(a) the COMPOUND SPECIFICATIONS; and
15.5.2(b)all applicable regulations and requirements of the relevant RHA
including the then cGMP regulations which apply to the
manufacture and supply of the COMPOUND and the PRODUCT.
15.5.2 ENDOREX JV represents and warrants that, once successfully assembled,
the PRODUCT under this Agreement will conform and perform in all
material respects to:-
15.5.2(a) the PRODUCT SPECIFICATIONS and DEVICE REGULATORY APPROVALS;
and
15.5.2(b) all applicable regulations and requirements of the relevant
RHA including the then cGMP regulations which apply to the
manufacture and supply of the PRODUCT;
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provided, however, that such representation and warranty shall not apply
to with respect to the manufacture and supply of the COMPOUND.
15.6 SCHEIN further represents and warrants to ENDOREX JV that in
transporting, storing, handling, distributing, marketing and selling the
PRODUCT hereunder:-
15.6.1 it will exercise all due skill, care and diligence in conducting
such activities as are commercially reasonable; and
15.6.2 it will comply with the provisions of this Agreement, all RHA
and other approvals, all applicable state and local regulatory
approvals and all applicable laws, ordinances and regulations.
15.7.1 ENDOREX JV shall indemnify, defend and hold SCHEIN harmless from all
actions, losses, claims, demands, damages, costs and liabilities
(including reasonable attorneys' fees) to which SCHEIN is or may become
liable insofar as they arise out of (i) any breach by ENDOREX JV of any
of its obligations, representations or warranties under this Agreement,
(ii) a third party claim that the manufacture, sale, use or offer for
sale of the SYSTEM as included in the PRODUCT, infringes the patent
rights of such a third party, but only to the extent and subject to the
limitations set forth in Clauses 3.5. hereof, (iii) ENDOREX JV's bad
faith, negligence or intentional misconduct in connection with the
filing or maintenance of the MAF, subject to the provisions of Clause
7.10, hereof..
15.7.2 SCHEIN shall indemnify, defend and hold harmless ENDOREX JV from all
actions, losses, claims, demands, damages, costs and liabilities
(including reasonable attorneys' fees) to which ENDOREX JV is or may
become liable insofar as they arise out of (i) any breach by SCHEIN of
any of its obligations, representations or warranties under this
Agreement, (ii) a third party alleging that the manufacture, offer for
sale, sale, distribution or use of the PRODUCT with respect to the
COMPOUND in the TERRITORY infringes any adversely held patent or
involves the unauthorised use of any other intellectual property, but
only to the extent and subject to the limitations set forth in Clauses
3.5.,.(iii) SCHEIN's bad faith, negligence or intentional misconduct in
connection with the filing or maintenance of the DEVICE REGULATORY
APPLICATIONS and DEVICE REGULATORY APPROVALS in the TERRITORY, subject
to the provisions of Clause 7.10, hereof, (iv) labeling and other
printed material supplied by SCHEIN, except to the extent that such
claims, damages, losses, liabilities and expenses arise from information
provided to SCHEIN by ENDOREX JV, subject to the provisions and
limitations set forth in Clauses 8.6 hereof, and (v) any defective
materials in the Compound or defect in the COMPOUND which may be
included in the PRODUCT, as provided in Clause 10.12 herein.
15.8 With reference to Clause 2.3.4, SCHEIN shall indemnify and hold harmless
ENDOREX JV to the extent that any claims, damages, liabilities, claims,
costs or expenses arise out of any such acts or omissions of any
SUBLICENSEE.
15.9 As a condition of obtaining an indemnity in the circumstances set out in
Clauses 15.4, 15.5, 15.6, 15.7, 15.8 and 15.9, the party seeking an
indemnity shall:
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15.9.1 fully and promptly notify the other party of any claim or
proceedings, or threatened claim or proceedings;
15.9.2 permit the indemnifying party to take full control of such claim
or proceedings;
15.9.3 assist in the investigation and defence of such claim or
proceedings;
15.9.4 not compromise or otherwise settle any such claim or proceedings
without the prior written consent of the other party, which
consent shall not be unreasonably withheld; and
15.9.5 take all reasonable steps to mitigate any loss or liability in
respect of any such claim or proceedings.
15.10 Notwithstanding anything to the contrary in this Agreement, ENDOREX JV
and SCHEIN shall not be liable to the other by reason of any
representation or warranty, condition or other term or any duty of
common law, or under the express terms of this Agreement, for any
consequential or incidental or punitive loss or damage (whether for loss
of profits or otherwise) and whether occasioned by the negligence of the
respective parties, their employees or agents or otherwise.
15.11 ENDOREX JV and SCHEIN shall maintain comprehensive general liability
insurance, including product liability insurance on the SYSTEM and
PRODUCT respectively, in such prudent amount as shall be determined by
the PROJECT TEAM. Each party shall provide the other party with a
certificate from the insurance company verifying the above and
undertakes to notify such party directly at least 30 days prior to the
expiration or termination of such coverage.
15.12 The representations and warranties of the Parties, including those set
forth in Clause 15, shall survive execution of the AGREEMENT.
CLAUSE 16 - CUSTOMER COMPLAINTS AND PRODUCT RECALL
16.1 SCHEIN shall notify ENDOREX JV promptly:-
16.1.1 of any complaints from third parties reported to SCHEIN
involving any serious and unexpected adverse reactions resulting
from the use of the PRODUCT; and
16.1.2 of any potential recall of the PRODUCT by any governmental
authority.
16.2 ENDOREX JV shall notify SCHEIN promptly:-.
16.2.1 of any complaints from third parties reported to ENDOREX JV
involving any serious and unexpected adverse device events or
incident reports resulting from the use of the SYSTEM; and
16.2.2 of any potential recall of the SYSTEM by any governmental
authority.
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16.3 SCHEIN and ENDOREX JV shall establish a procedure for formal adverse
event handling, customer complaints and reporting. It is envisaged that
SCHEIN shall be responsible for furnishing post-marketing reports to the
applicable RHA's and other relevant regulatory agencies. SCHEIN and
ENDOREX JV shall keep each other informed and shall copy the other party
with all communications with the RHA's and other relevant regulatory
agencies with respect to the PRODUCT and such events.
16.4 In the event of any recall of the PRODUCT, as suggested or requested by
any governmental authority:
16.4.1 SCHEIN shall perform the recall of the PRODUCT in the TERRITORY
and save as provided in Clause 16.4.2, in all events the recall
costs shall be borne by SCHEIN.
16.4.2 If the recall arises from ENDOREX JV's acts or omissions in
manufacturing the SYSTEM or any failure to conform to the
PROJECT SYSTEM SPECIFICATIONS, the recall costs shall be borne
by ENDOREX JV provided that SCHEIN should not have discovered
the said act or omission prior to the sale of the PRODUCT by
exercising the quality procedures to be agreed upon by the
parties for the release of the PRODUCT.
In the event that ENDOREX JV should bear the costs of any recall
hereunder, ENDOREX JV shall be entitled but not obliged to take
over and perform the recall of the PRODUCT described in Clause
16.4.1 and SCHEIN shall provide ENDOREX JV with all such
reasonable assistance as may be required by ENDOREX JV, with
ENDOREX JV reimbursing SCHEIN for reasonable costs incurred.
16.4.3 Neither party shall be liable to the other party or to any third
party for consequential or incidental damages which may arise as
a result of the recall of the PRODUCT.
16.4.4 For the avoidance of doubt, in no event shall SCHEIN be
responsible under this Agreement for performing any recall of
the PRODUCT in any country of the TERRITORY for which SCHEIN's
license to the ENDOREX JV BACKGROUND TECHNOLOGY and ENDOREX JV
IMPROVEMENTS has been terminated in accordance with the terms of
this Agreement.
CLAUSE 17 - MISCELLANEOUS PROVISIONS
17.1 Secrecy:
-------
17.1.1 Any information, whether written or oral (oral information shall
be reduced to writing within one month by the party giving the
oral information and the written form shall be furnished to the
other party) pertaining to the PRODUCT that has been or will be
communicated or delivered by ENDOREX JV to SCHEIN, or by SCHEIN
to ENDOREX JV, including, without limitation, trade secrets,
business methods, and cost, supplier, manufacturing and customer
information, shall be treated by SCHEIN and ENDOREX JV,
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respectively, as confidential information, and shall not be
disclosed or revealed to any third party whatsoever or used in
any manner except as expressly provided for herein; provided,
however, that such confidential information shall not be subject
to the restrictions and prohibitions set forth herein to the
extent that such confidential information:-
(1) is available to the public in public literature or
otherwise, or after disclosure by one party to the other
becomes public knowledge through no default of the party
receiving such confidential information; or
(2) was known to the party receiving such confidential
information prior to the receipt of such confidential
information by such party, whether received before or after
the date of this Agreement; or
(3) is obtained by the party receiving such confidential
information from a third party not subject to a requirement
of confidentiality with respect to such confidential
information; or
(4) is required to be disclosed pursuant to: (A) any order of a
court having competent jurisdiction and power to order such
information to be released or made public; or (B) any
lawful action of a governmental or regulatory agency or
stock exchange provided that each party shall notify the
other in writing of any disclosure of information required
hereunder prior to such disclosure.
17.1.2 Each party shall take in relation to the confidential
information of the other party all such precautions as it
normally takes with its own confidential information to prevent
any improper disclosure of such confidential information to any
third party; provided, however, that such confidential
information may be disclosed within the limits required to
obtain any authorisation from the applicable RHA or any
governmental or regulatory agency or, with the prior written
consent of the other party, which shall not be unreasonably
withheld, or as may otherwise be required in connection with the
purposes of this Agreement.
17.1.3 Each of the parties agrees that it will not use, directly or
indirectly, any know-how of the other party (ENDOREX JV KNOW-HOW
or SCHEIN KNOW-HOW, as the case may be), or other confidential
information disclosed to it by the other party or obtained by it
from the other party pursuant to this Agreement, other than as
expressly provided herein.
17.1.4 Neither party will publicise the existence of this Agreement in
any way without the prior written consent of the other party
subject to the disclosure requirements of applicable laws and
regulations. In the event that either party wishes to make an
announcement concerning the Agreement, that party will seek the
consent of the other party. The terms of any such announcement
shall be agreed in good faith. ENDOREX JV and SCHEIN shall also
co-operate in good faith with respect to any stock exchange
filings, public announcements, or
--------------------------------------------------------------------------------
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<PAGE>
filings with the United States Securities and Exchange
Commission which may be necessary following execution of this
Agreement.
17.2 Assignments/ Sub-contracting:
----------------------------
This Agreement may not be assigned by SCHEIN or ENDOREX JV without the
prior written consent of the other party, save that either party may
assign this Agreement in whole or in part and delegate its duties
hereunder to its AFFILIATE or AFFILIATES without such consent provided
that such assignment or delegation has no material adverse tax
implications for the other party hereto. ENDOREX JV shall be entitled to
subcontract any of its obligations under this Agreement. Each party shall
be responsible for the acts and/or omissions of its respective AFFILIATES
or subcontractors.
17.3 Parties bound:
-------------
This Agreement shall be binding upon and enure for the benefit of parties
hereto, their successors and permitted assigns.
17.4 Severability:
------------
If any provision in this Agreement is agreed by the parties to be, or is
deemed to be, or becomes invalid, illegal, void or unenforceable under any
law that is applicable hereto:-
17.4.1 such provision will be deemed amended to conform to applicable
laws so as to be valid and enforceable or, if it cannot be so
amended without materially altering the intention of the parties,
it will be deleted, with effect from the date of such agreement or
such earlier date as the parties may agree; and
17.4.2 the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected in
any way.
17.5 Force Majeure:
-------------
Neither party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay results from
causes beyond its reasonable control, including, without limitation, acts
of God, fires, earthquakes, strikes, acts of war, or intervention of a
government authority, non-availability of raw materials, but any such
delay or failure shall be remedied by such party as soon as practicable.
17.6 Relationship of the parties:
---------------------------
Nothing contained in this Agreement is intended or is to be construed to
constitute ENDOREX JV and SCHEIN as partners or members of a joint venture
or either party as an employee of the other. Neither party hereto shall
have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other party or to bind the
other party to any contract, agreement or undertaking with any third
party.
--------------------------------------------------------------------------------
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<PAGE>
17.7 Amendments:
----------
No amendment, modification or addition hereto shall be effective or
binding on either party unless set forth in writing and executed by a
duly authorised representative of both parties.
17.8 Waiver:
------
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any future breach or failure to perform or of
any other right arising under this Agreement.
17.9 No effect on other agreements:
-----------------------------
No provision of this Agreement shall be construed so as to negate, modify
or affect in any way the provisions of any other agreement between the
parties unless specifically referred to, and solely to the extent
provided, in any such other agreement.
17.10 Governing law and jurisdiction:
------------------------------
This Agreement shall be governed by the laws of the State of New York,
without regard to principles of conflicts of law. Each of the Parties
hereby irrevocably submits to the jurisdiction of any New York State or
United States Federal court sitting in the County, City and State of New
York over any action or proceeding arising out of or relating to this
Agreement, and each hereby waives the defence of any inconvenient forum
for the maintenance of such action.
17.11 Notice:
------
17.11.1 Any notice to be given under this Agreement shall be sent in
writing in English by registered airmail or telecopied to:
ENDOREX JV at:
Clarendon House
2 Church Street
Hamilton, Bermuda
Attention: Chairman
Telefax 1 441 292 4720
With a copy to:
Elan Corporation, plc
Lincoln House
Lincoln Place
Dublin 2
Ireland
--------------------------------------------------------------------------------
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<PAGE>
Attention: Vice President & General Counsel
Elan Pharmaceutical Technologies
Telefax: 353 1 7094124
SCHEIN at:
Schein Pharmaceutical (Bermuda) Ltd.
C/o Grosvenor Trust LTD
33 Church Street
Hamilton, Bermuda
Attention: Chairman
Telefax: 1 441 292 5152
With a copy to:
Schein Pharmaceutical Inc.
100 Campus Drive
Florham Park
New Jersey 07932
Attention: General Counsel
Telefax: 973 593 5152
or to such other address(es) and telecopier numbers as may from
time to time be notified by either party to the other hereunder.
17.11.2 Any notice sent by mail shall be deemed to have been delivered
within 10 working days after despatch and any notice sent by
telex or telecopy shall be deemed to have been delivered within
24 hours of the time of the despatch. Notice of change of
address shall be effective upon receipt.
17.12. Patent Due Diligence
---------------------------
The obligations of SCHEIN under this Agreement are expressly subject to
and conditioned upon the completion of SCHEIN's PATENT DUE DILIGENCE
REVIEW (as defined below) of the SYSTEM, the PRODUCT and the ENDOREX JV
PATENTS, and relevent third party patents with results satisfactory to
SCHEIN, under the following terms and conditions:
17.12.1 During the period commencing on the date hereof and ending on June 30,
2000 (the "REVIEW PERIOD"), SCHEIN will promptly conduct or have
conducted a due diligence review of (1) coverage of the ENDOREX JV
PATENTS over the SYSTEM and the PRODUCT, (2) freedom from infringement
liability under third party patents (and potential liability under
third party patent applications) for the SYSTEM and the PRODUCT as it
is intended to be produced and sold hereunder, and (3) freedom from
--------------------------------------------------------------------------------
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<PAGE>
infringement liability under third party patents (and potential
liability under third party patent applications) for the COMPOUND
including delivery of the COMPOUND through continuous subcutaneous
administration (the "PATENT DUE DILIGENCE REVIEW"). The freedom from
infringement review may or may not include features of the PRODUCT and
the SYSTEM which are beyond the scope of the ENDOREX JV PATENTS, at
SCHEIN's discretion. The PATENT DUE DILIGENCE REVIEW shall be for the
entire TERRITORY or any portion thereof that SCHEIN, in its sole
discretion, determines is necessary. Each Party shall provide
reasonable cooperation to the other Party during the PATENT DUE
DILIGENCE REVIEW.
17.12.2 Upon expiration of the REVIEW PERIOD, SCHEIN shall confirm its
acceptance of this AGREEMENT, in which event the conditions contained
in this Clause 17.12 shall be deemed fulfilled and the AGREEMENT and
its provisions shall remain in full force and effect unless SCHEIN
determines in good faith that (a) the SYSTEM infringes, or is
reasonably likely to infringe, any third party patent in the TERRITORY,
(b) the ELAN PATENTS do not cover the SYSTEM, (c) the ELAN PATENTS
covering the SYSTEM are not valid, or are reasonably likely to be found
invalid, in which event, SCHEIN shall be entitled to terminate this
AGREEMENT, or (d) the delivery of the COMPOUND through continuous
subcutaneous administration infringes or is likely to infringe any
third party patent in the TERRITORY, in which event this AGREEMENT
(except for the provisions of Clause 17.1 hereof which shall survive),
shall be deemed terminated, null and void and of no force or effect
with no further obligation on either party hereto.
IN WITNESS of which the parties have executed this Agreement.
--------------------------------------------------------------------------------
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<PAGE>
SCHEDULE 1
ENDOREX JV PATENTS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
File Number Brief Description Country Status
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EMT 13 Original Medipad Australia Granted (693136)
[********] [********]
[********] [********]
Israel Granted (111685)
[********] [********]
New Zealand Granted (276485)
Taiwan Granted (079227)
United States 2 Granted (5,527,288;
5,848,991[********]
South Africa Granted (94/9185)
------------------------------------------------------------------------------------------------------------
EMT 19 Medipad-Vial on board, needle on the periphery [********] [********]
[********] [********]
[********] [********]
Ireland Granted (77523)
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
United States Granted (5,814,020)
[********] [********]
South Africa Granted (96/7502)
------------------------------------------------------------------------------------------------------------
EMT 24 Delivery Needle [********] [********]
[********] [********]
[********] [********]
Ireland Granted (80772)
[********] [********]
[********] [********]
[********] [********]
South Africa Granted (97/5065)
[********] [********]
Taiwan Issued (096579)
[********] [********]
------------------------------------------------------------------------------------------------------------
[********] [********] [********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
------------------------------------------------------------------------------------------------------------
</TABLE>
________________________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
--------------------------------------------------------------------------------
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<PAGE>
<TABLE>
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
[********] [********] [********] [********]
[********] [********]
[********] [********]
[********] [********]
-------------------------------------------------------------------------------------------------------
EMT 33 Improved Method of Packaging a Drug Delivery [********] [********]
Kit [********] [********]
South Africa Issued (98/5188)
[********] [********]
[********] [********]
-------------------------------------------------------------------------------------------------------
[********] [********] [********] [********]
[********] [********]
[********] [********]
-------------------------------------------------------------------------------------------------------
EMT41DES Design of Medipad Housing (3ml) United States Granted (D404482)
-------------------------------------------------------------------------------------------------------
[********] [********] [********] [********]
-------------------------------------------------------------------------------------------------------
</TABLE>
All countries are initially designated when filing in the European Patent Office
or the Patent Cooperation Treaty, and are then selected during the regional or
national phase.
_______________________
[********] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
--------------------------------------------------------------------------------
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<PAGE>
SCHEDULE 2
COMPOUND PATENTS
NONE.
--------------------------------------------------------------------------------
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<PAGE>
SCHEDULE 3
PROJECT
To be agreed upon by the Parties.
--------------------------------------------------------------------------------
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<PAGE>
SCHEDULE 4
PROJECT SYSTEM SPECIFICATIONS
To be agreed upon by the Parties
--------------------------------------------------------------------------------
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<PAGE>
SCHEDULE 5
PRODUCT SPECIFICATIONS
To be agreed upon by the Parties.
--------------------------------------------------------------------------------
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<PAGE>
Executed by SCHEIN PHARMACEUTICAL (BERMUDA), LTD. on 2/nd/ February, 2000
By: ________________________________
Name: ________________________________
Title: ________________________________
Executed by ENDOREX NEWCO, LTD. on 2/nd/ February, 2000
By: ________________________________
Name: ________________________________
Title: ________________________________
--------------------------------------------------------------------------------
Page 56 of 56
