<PAGE> 1
EXHIBIT 10.2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
This LICENSE AGREEMENT (the "License Agreement") is hereby made by and
between NOVARTIS PHARMA AG (hereinafter "Novartis"), a corporation organized
under the laws of Switzerland having its principal place of business at
Lichtstrasse 35, CH-4056, Basel, Switzerland, and NOVEN PHARMACEUTICALS, INC., a
Delaware corporation having its principal place of business at 11960 Southwest
144th Street, Miami, Florida 33186 (hereinafter "Noven") as of this 3rd day of
November, 2000 (hereinafter the "Effective Date").
WITNESSETH:
WHEREAS, the parties to this License Agreement wish to collaborate on
the development and marketing of Estrogen Transdermal Drug Delivery Systems, as
hereinafter defined (hereinafter "Licensed Products");
WHEREAS, Noven has developed certain information relating to and is the
owner of record or under an unrecorded assignment of certain patents and patent
applications having claims covering the Licensed Products;
WHEREAS, Noven wishes to provide for the development and regulatory
approval of the Licensed Products and for their marketing;
WHEREAS, Novartis is willing and able to pursue regulatory approval for
and to market the Licensed Products, in accordance with the terms of this
License Agreement.
NOW, THEREFORE, for good and valuable consideration and intending to be
legally bound, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
1.1 AFFILIATES. The term "Affiliate" or "Affiliates" shall mean any
entity that is Controlled directly or indirectly by the party referred to, or
any entity that directly or indirectly Controls the party referred to, or any
entity that is directly or indirectly Controlled by an entity which also
directly or indirectly Controls the party referred to, so that the term shall
include any parent of the entity referred to or a directly or indirectly held
subsidiary of the parent or of the entity referred to, and entities in common
control with the entity referred to.
1.2 ***.
1
<PAGE> 2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
1.3 CONTROL. The term "Control," "Controls" or "Controlled" shall mean
the ownership, directly or indirectly, of fifty percent (50%) or more of the
voting rights attached to issued and outstanding voting shares or the power to
direct or cause the direction of the management
1.4 COST(S). The term "Costs" and "Cost" shall mean Noven's fully
allocated cost of manufacturing the Licensed Product, including (i) the direct
cost of any raw materials and packaging materials utilized in manufacturing such
Licensed Product, (ii) repair, maintenance and operating costs of the production
facilities utilized in manufacturing Licensed Products, (iii) costs of quality
and in-process controls, and (iv) the direct labor utilized in manufacturing
such Licensed Product plus an appropriate share of all factory overhead, both
fixed and variable, allocated to the Licensed Product in accordance with
generally accepted accounting principles and the normal accounting practices for
all other products manufactured in the applicable facility.
1.5 ESTROGEN TRANSDERMAL DRUG DELIVERY SYSTEM. The term "Estrogen
Transdermal Drug Delivery System" shall mean an estrogen in a polymer adapted
for transdermal delivery by application to the epidermis developed by Noven,
including but not limited to the product marketed in the U.S. as Vivelle-Dot(TM)
(hereinafter "Vivelle-Dot((TM)) Product") and the Included Improvements (as
defined herein), but excluding any product previously licensed by Noven in the
Restated License Agreement, dated November 15, 1991, between Noven and Novartis
Pharmaceuticals Corporation, or in the Amended and Restated License Agreement,
dated September 30, 1999, between Noven and Rhone-Poulenc Rorer, Inc.
1.6 EUROPEAN ECONOMIC AREA. The term "European Economic Area" shall
mean the European Union and Iceland, Liechtenstein and Norway.
1.7 INCLUDED IMPROVEMENTS. The term "Included Improvements" shall mean
the three included improvements as defined in the attached Exhibit A.
1.8 LICENSED PRODUCT(S). The term "Licensed Product" or "Licensed
Products" shall mean individually and collectively any Estrogen Transdermal Drug
Delivery System.
1.9 LICENSED TRADEMARK. The term "Licensed Trademark" shall mean
Estradot((TM)) together with such variations and similar marks that Noven may
approve for Novartis to use in connection with products supplied by Noven to
Novartis.
1.10 NET REVENUES. The term "Net Revenues" shall mean the gross amount
invoiced by Novartis, its Affiliates and Sublicensees on all sales of any
Licensed Product, (but not including sales between or among Novartis, its
Affiliates and Sublicensees) in all countries of the Territory less (a)
discounts actually allowed, (b) credits actually allowed for claims, allowances,
retroactive price reductions or returned goods, (c) prepaid freight and
insurance separately stated on sales invoices, and (d) sales taxes, value added
taxes, duties and other governmental charges or rebates actually paid in
connection with the sale, to the extent not reimbursed (but excluding taxes
based on the income of Novartis, its Affiliates or Sublicensees). Novartis may
calculate
2
<PAGE> 3
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Net Revenues in accordance with its standard accounting principles as long as
such are consistent with the definitions of Net Revenues and with the other
terms of this Agreement.
1.11 NOVEN'S PATENT RIGHTS. The term "Noven's Patent Rights" shall mean
any and all patents, including but not limited to reissues, extensions and
patents of addition, and patent applications, continuations, divisionals and
continuations-in-part that are owned or controlled by Noven and the claims of
which cover the Licensed Products now existing or obtained or acquired by Noven
as set forth in Article 7.1. Noven's Patent Rights include the patents and
patent applications listed in Exhibit B and all equivalents thereof in the
Territory.
1.12 NOVEN'S TECHNOLOGY. The term "Noven's Technology" shall mean any
and all data, information, technology, know-how, processes, techniques, methods,
skills, proprietary information, trade secrets, developments, discoveries, and
inventions, owned or controlled by Noven or its Affiliates and specifically
related to one or more of its Estrogen Transdermal Drug Delivery Systems now
existing or developed in the future by Noven. Notwithstanding the foregoing,
Noven's Technology shall not include information related to the manufacture of
Licensed Products or specifications or procedures related thereto, except to the
extent required for obtaining health or governmental registration or both of
Licensed Products and except to the extent of any license to manufacture granted
to Novartis under this License Agreement.
1.13 NOVEN'S TRADEMARK RIGHTS. The term "Noven's Trademark Rights"
shall mean the rights of Noven relating to the trademark Estradot(TM). Noven's
Trademark Rights include the registered trademarks and trademark applications
listed in Exhibit B.
1.14 REGULATORY APPLICATION. The term "Regulatory Application" means a
formal application submitted to the appropriate Regulatory Authority under
applicable law seeking approval to market a Licensed Product within a country or
group of countries in the Territory.
1.15 REGULATORY APPROVAL. The term "Regulatory Approval" means a
communication in writing from the appropriate Regulatory Authority permitting
the marketing of a Licensed Product within a country or group of countries in
the Territory.
1.16 REGULATORY AUTHORITY. The term "Regulatory Authority" means a
governmental regulatory authority of a country or group of countries within the
Territory which has authority over the clinical testing, manufacturing,
marketing, or sale of pharmaceutical products.
1.17 STANDARD SPECIFICATION(S). The term "Standard Specifications" and
"Standard Specification" shall mean the specifications set forth in the Supply
Agreement, which Supply Agreement is attached hereto as Exhibit C and
incorporated herein by reference.
1.18 SUBLICENSEE. The term "Sublicensee" and "Sublicensees" shall mean
any entity to whom Novartis shall grant any right or license to use Noven's
Technology or Noven's Patent Rights or to make, use or sell any Licensed Product
under all or any part of Noven's Technology and Noven's Patent Rights in the
Territory.
3
<PAGE> 4
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
1.19 TERRITORY. The term "Territory" shall mean all the countries and
territories worldwide except the United States, Canada, Japan and the
territories and possessions of the United States, Canada, and Japan.
1.20 TRADE UNIT. The term "Trade Unit" shall mean a single pouched
Estrogen Transdermal Drug Delivery System constituting a Licensed Product sold
or to be sold by Novartis.
ARTICLE II - REGULATORY MATTERS
2.1 GENERAL REGULATORY MATTERS.
--------------------------
2.1(a) REGULATORY APPROVALS. Except as otherwise provided
herein, Novartis shall, at its own expense, consistent with sound
scientific and commercial practices, use commercially reasonable
efforts to: (1) prepare and file Regulatory Applications in its name
with such Regulatory Authorities as shall be necessary to procure
Regulatory Approvals for each of the Licensed Products in the
Territory; (2) diligently prosecute and obtain such Regulatory
Applications; and (3) maintain such Regulatory Approvals in full force
and effect. Without limiting the requirements of this Article, in
connection with the clinical testing of the Licensed Products, the
preparation, filing and prosecution of the Regulatory Applications, and
the maintenance of the Regulatory Approvals, Novartis shall use at
least the same degree of care and diligence as it uses in connection
with its own products. Notwithstanding the foregoing, the decisions
regarding the timing of said filings shall be in Novartis' sole
discretion. In the event that Novartis has not initiated the process of
obtaining Regulatory Approval for a Licensed Product in a country of
the Territory ***, or in the event that Novartis has stopped exercising
commercially reasonable efforts to obtain Regulatory Approval in a
country of the Territory for ***, and such failure shall continue for a
period of 30 days after written notice from Noven to Novartis, then
Noven shall have the option, exercisable by delivery of written notice
to Novartis, to terminate this License Agreement with respect to such
Licensed Product in such country. If Noven determines to terminate this
License Agreement with respect to a Licensed Product in any such
country, Novartis shall promptly take such actions with respect to such
country as Noven may reasonably request, including the execution and
delivery of any documents which Noven may reasonably request, in order
to transfer to Noven or its designee, free of charge, all of Novartis'
right, title and interest in and to all information, data, and
applicable Regulatory Applications (if any) relating solely to such
Licensed Product in such country. In addition, Novartis shall
reasonably cooperate with Noven in connection with the transfer of
data, registrations, and applications related to such Licensed Product
in such country. Notwithstanding the foregoing, Noven shall not market
any re-acquired Licensed Products in such country under the Licensed
Trademark, unless Noven reacquires the Licensed Trademark pursuant to
Article 3.2.
2.1(b) CLINICAL STUDIES. Except as otherwise provided herein,
Novartis shall not undertake or perform any human clinical studies
relating to any Licensed Products without the prior written consent of
Noven. To the extent clinical studies are required to
4
<PAGE> 5
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
be conducted in order to secure Regulatory Approvals to sell the
Licensed Products in a country of the Territory, such clinical studies
shall be conducted by Novartis, at its expense, pursuant to a
development plan, including protocols, that will be mutually agreed
upon in good faith between Novartis and Noven.
2.1(c) COOPERATION; SUPPLY OF INFORMATION BY NOVEN. Noven
agrees to fully cooperate with Novartis in connection with Novartis'
obligations under this Article II, and to provide to Novartis copies of
all documents in its possession related to the Licensed Products which
it is legally permitted to disclose and which are necessary for the
preparation of the Regulatory Applications; provided, however, that
nothing herein contained shall require Noven to generate any
information which it does not already possess or to disclose or
reference to Novartis data related to the manufacture of the Licensed
Products unless required by Regulatory Authorities in the Territory in
order to obtain Regulatory Approval.
2.1(d) STATUS OF REGULATORY APPROVALS. Novartis shall maintain
Noven fully informed of the status of the performance of its
obligations under this Article II, and shall, upon request of Noven,
provide such information concerning the status of the clinical trials,
the preparation and prosecution of the Regulatory Applications, and the
maintenance of the Regulatory Approvals as Noven may request from time
to time. Without limiting the generality of the foregoing, Novartis
shall (1) if requested by Noven, deliver to Noven copies of the results
of all clinical trials, a copy of each Regulatory Application
(including exhibits and attachments thereto) and all supplements and
amendments thereto, and copies of other documents and correspondence
relating to the Regulatory Application and Regulatory Approval, (2)
provide a written report to Noven within forty-five (45) days after the
end of each calendar year describing the actions taken by Novartis
during the preceding year to comply with its obligations under Article
II, and (3) if requested by Noven, cause its personnel responsible for
the performance of its obligations under Article II to meet with Noven
personnel at mutually convenient locations not more frequently than
every six (6) months to discuss the status of the Regulatory Approval
of the Licensed Products.
2.1(e) RIGHT OF REFERENCE. Novartis shall permit Noven and its
Affiliates and licensees to reference the Regulatory Approvals with
respect to the Licensed Products for purposes of government
registrations and filings in jurisdictions within or outside of the
Territory.
2.1(f) SAFETY ADDENDUM. The parties will establish and
implement a procedure for the mutual exchange of adverse event reports
and safety information associated with the Licensed Products. Details
of the operating procedure shall be the subject of a Safety Addendum to
this License Agreement, agreed between the designated pharmacovigilance
primary liaisons of the respective companies. The Safety Addendum will
be agreed and implemented at a time sufficient to permit compliance
with applicable Regulatory Authority guidelines and regulations. The
Safety Addendum will be updated by the parties from time to time and
expanded to take into account the status of the Licensed Products.
5
<PAGE> 6
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
2.2 REGULATORY MATTERS AS TO THE VIVELLE-DOT(TM) PRODUCT
2.2(a) REGULATORY APPROVAL OF THE VIVELLE-DOT(TM) PRODUCT IN
THE NETHERLANDS. Notwithstanding Article 2.1(a), Noven will, at its own
expense, consistent with sound scientific and commercial practices, use
commercially reasonable efforts to: (1) promptly prepare and file
Regulatory Applications in its name with such Regulatory Authorities as
shall be necessary to procure Regulatory Approvals for the
Vivelle-Dot(TM) Product in the Netherlands and (2) diligently prosecute
and obtain such Regulatory Applications.
2.2(b) TRANSFER OF REGULATORY APPROVALS. Promptly after
receipt of Regulatory Approval for the Vivelle-Dot(TM) Product in the
Netherlands, the parties will work together to transfer such Regulatory
Approvals to Novartis at Novartis' expense.
2.2(c) REGULATORY APPROVAL OF THE VIVELLE-DOT(TM) PRODUCT IN
COUNTRIES OTHER THAN THE NETHERLANDS. Notwithstanding Article 2.1(a),
Novartis shall, at Novartis' expense, consistent with sound scientific
and commercial practices, use commercially reasonable efforts to pursue
Regulatory Approval in its name following the European Mutual
Recognition Procedure (hereinafter "MRP") to gain Regulatory Approval
of the Vivelle-Dot(TM) Product in all countries in the Territory
subject to the MRP other than the Netherlands. Novartis shall maintain
Noven fully informed of the status of the performance of its
obligations under this Article 2.2(c), and shall, upon request of
Noven, provide Noven with information concerning the status of the
preparation and prosecution of the Regulatory Applications. In the
event that Novartis has to withdraw a country from the MRP, then
Novartis shall undertake such efforts as are commercially reasonable to
resubmit the Regulatory Application in such country. Without limiting
the requirements of Novartis under Articles 2.1(a) and 2.1(d), Novartis
shall use commercially reasonable efforts to obtain Regulatory Approval
for the Vivelle-Dot(TM) Product in ***.
2.2(d) CLINICAL SUPPLIES. Noven will provide to Novartis
clinical supplies (including placebos) of the Vivelle-Dot(TM) Product
required for obtaining Regulatory Approval in the Territory at a price
of ***.
2.3 REGULATORY MATTERS AS TO THE INCLUDED IMPROVEMENTS.
2.3(a) ICH STABILITY BATCHES. Notwithstanding Articles 2.1(a)
and 2.1(b), Noven will bear the expense of formulation development and
manufacture as well as the testing of required ICH stability batches
for the Included Improvements.
2.3(b) SUPPLY OF INCLUDED IMPROVEMENTS FOR CLINICAL STUDIES.
Noven will provide to Novartis clinical supplies (including placebos)
of the Included Improvements required for obtaining Regulatory Approval
in the Territory, at a price of ***.
6
<PAGE> 7
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
2.3(c) ADDITIONAL IMPROVEMENTS. The cost of formulation
development, manufacture of ICH stability batches and clinical supplies
of any additional improvements other than the Included Improvements
requested by Novartis will be separately negotiated in good faith
between Noven and Novartis.
ARTICLE III - COMMERCIALIZATION OF LICENSED PRODUCTS
3.1 COMMERCIALIZATION.
3.1(a) GENERAL. Novartis shall use commercially reasonable
efforts, at its own expense, to actively and diligently promote, market
and sell the Licensed Products in the Territory, similar to such
efforts Novartis would undertake for its own products with similar
market potential. Novartis shall commence commercial marketing of each
Licensed Product in each country within the Territory within ***. If
Novartis fails to commence to market any Licensed Product in accordance
with the foregoing sentence, and such failure shall continue for a
period of 30 days after written notice from Noven to Novartis, then
Noven shall have the option, exercisable by delivery of written notice
to Novartis, to terminate this License Agreement with respect to such
Licensed Product in such country. If Noven determines to terminate this
License Agreement with respect to a Licensed Product in a country,
Novartis shall promptly take such actions as Noven may reasonably
request, including the execution and delivery of any documents which
Noven may reasonably request, in order to transfer to Noven or its
designee, free of charge, all of Novartis' right, title and interest in
and to any Regulatory Approvals relating to such Licensed Products in
such country, and all information relating to any Regulatory Approvals
not previously supplied to Noven. Notwithstanding the foregoing, Noven
shall not market the Licensed Products in such reacquired country under
the Licensed Trademark, unless Noven reacquires the Licensed Trademark
pursuant to Article 3.2.
3.1(b) INCLUDED IMPROVEMENTS. If Novartis does not
commercialize any Included Improvement in ***, the right to develop and
market such Included Improvement in the whole Territory will revert to
Noven on terms and conditions to be negotiated in good faith, provided
that Noven shall have no right to use the Licensed Trademark in such
event. ***.
3.1(c) MARKETING PLAN. Ninety days before the commencement of
each calendar year, Novartis shall provide Noven with a written
marketing plan setting forth a detailed description of Novartis'
strategies and business plan with respect to the marketing,
distribution and sale of each of the Licensed Products in the
Territory, and such other information as Noven shall reasonably request
(the "Marketing Plan"). At Noven's request, designated employees of
each of the parties shall meet not more than once every six months at a
location to be mutually agreed upon to discuss the Marketing Plan and
Novartis' performance thereof under this License Agreement; provided,
however, that the Marketing Plan is only subject to Noven's review and
comments but not approval.
7
<PAGE> 8
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.1(d) REPORTS. To the extent legally permissible, Novartis
shall prepare and make available to Noven upon Noven's request (1)
reports on the general market conditions regarding the Licensed
Products, (2) reports of all customer complaints regarding the Licensed
Products, and (3) such other information concerning the Licensed
Products as Noven may reasonably request.
3.1(e) MARKETING TO CUSTOMERS. To the extent not otherwise
prohibited by applicable law, Novartis shall not seek customers outside
of the Territory; provided, however, that if any party exports the
Licensed Products acquired from Novartis to customers outside the
Territory without Novartis' explicit authorization, Novartis shall not
be liable to Noven for any damages or claims arising from such third
party actions. Novartis shall not establish any branch or maintain any
distribution depot for the Licensed Products outside the Territory.
Novartis shall during the Term refer to Noven or its designee all
inquiries or orders received by it for the Licensed Products to be
delivered outside the Territory.
3.2 TRADEMARKS. The Licensed Products shall be sold in the Territory
under the Licensed Trademark or such other trademark as Novartis may register,
together with a clear statement that the Product is being sold by Novartis as
licensee of Noven, and all labeling, packaging and advertising used in the
promotion and sale of the Licensed Products in the Territory shall bear the
Licensed Trademark or such other trademark as Novartis may register and such
statement. Noven shall register the Licensed Trademark, in its own name. If
Novartis does not use the trademark Estradot(TM) to market the first Licensed
Product within 18 months after the first commercial sale by Novartis of such
Licensed Product in any country of the Territory, then all rights under the
Licensed Trademark shall revert to Noven and Novartis shall have no further
right to use the Licensed Trademark in connection with the Licensed Products
sold in the Territory. If Novartis uses the trademark Estradot(TM) to market the
first Licensed Product within 18 months after the first commercial sale by
Novartis of such Licensed Product in any country of the Territory, then upon
request by Novartis, Noven shall assign title in the trademark Estradot(TM) for
the Territory to Novartis. Novartis shall bear the expense of prosecuting and
maintaining the Licensed Trademark in the Territory beginning on the Effective
Date. Novartis acknowledges the validity of the Licensed Trademark, and any use
thereof by Novartis will inure to the benefit of Noven except if Novartis uses
the trademark Estradot(TM) and Noven transfers title for the trademark
Estradot(TM) in the Territory to Novartis as provided above. The Licensed
Trademark shall be the sole and exclusive property of Noven except if Novartis
elects to use the trademark Estradot(TM) and requests Noven to transfer title in
the trademark Estradot(TM) for the Territory to Novartis. In the event that
Novartis does not elect to use the trademark Estradot(TM) or does not request
Noven to transfer title in the trademark Estradot(TM) for the Territory to
Novartis, Novartis shall not in any manner represent that it has any ownership
in the Licensed Trademark, or registration thereof, and Novartis acknowledges
that use of the Licensed Trademark shall not create in Novartis' favor any
right, title or interest in and to such trademarks except as granted pursuant to
this License Agreement. In the event that Novartis does not elect to use the
trademark Estradot(TM) or does not request Noven to transfer title in the
trademark Estradot(TM) for the Territory to Novartis, Novartis will not at any
time do or cause to be done any act or thing contesting or in any way impairing
or tending to impair any part of Noven's
8
<PAGE> 9
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
right, title and interest in and to the Licensed Trademark or the goodwill and
reputation of the Licensed Trademark.
ARTICLE IV - GRANT
4.1 LICENSE.
4.1(a) Subject to the terms and conditions of this License
Agreement, Noven hereby grants to Novartis an exclusive right and
license solely within the Territory, under Noven's Patent Rights and
Noven's Technology, to use, sell or otherwise dispose of the Licensed
Products. For purposes of this License Agreement, the phrase "use, sell
or otherwise dispose of Licensed Product", or words of similar effect,
includes the right to market, advertise, promote, distribute and
develop Licensed Product throughout the Territory, and the obligations
arising therefrom.
4.1(b) Subject to the terms and conditions of this License
Agreement, Noven further grants to Novartis an exclusive, royalty-free
license solely within the Territory, to use the Licensed Trademark in
connection with the marketing and promotion of the Licensed Products
and further agrees to transfer title in the trademark Estradot(TM) for
the Territory to Novartis if Novartis elects to use the trademark
Estradot(TM) and requests Noven to transfer title as specified in
Article 3.2.
4.1(c) No right or license to make, use or sell under Noven's
Technology or Noven's Patent Rights is granted herein except as
provided herein and with reference to the Licensed Products.
Notwithstanding the foregoing, no right of Novartis, its Affiliates or
Sublicensees to manufacture Licensed Products is granted except to the
extent specifically hereinafter provided.
4.1(d) The term "exclusive" as used in this Article means that
the rights conferred on Novartis are to the exclusion of all other
persons and entities, including but not limited to Noven, and that
Noven shall not voluntarily grant any rights in the Territory to any
third party to use, sell or otherwise dispose of Licensed Products.
4.1(e) As part of the rights granted in this Article 4.1,
Novartis shall have the right to grant sublicenses to Sublicensees,
only with the prior written approval of Noven, which approval shall not
be unreasonably withheld. Affiliates, agents, distributors,
wholesalers, and other independent resellers shall not be considered
sublicensees hereunder. Any such Sublicensee shall agree in writing to
assume the duties of Novartis hereunder with respect to the country and
Licensed Product involved, provided, however, that no such sublicense
shall release Novartis from any liability for performance under this
License Agreement. Noven shall have no duty to approve any such
sublicense until it receives a copy of the proposed sublicense
agreement. After receiving a request to sublicense and a copy of the
proposed sublicense agreement, Noven shall respond to the request for
consent to sublicense within 30 days, ***.
9
<PAGE> 10
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE V - SUPPLY
5.1 AGREEMENT TO SUPPLY. Noven shall use commercially reasonable
efforts to supply to Novartis, and Novartis shall purchase from Noven, all of
Novartis', its Affiliates' and Sublicensees' requirements of all Licensed
Products. The Licensed Products shall be supplied and purchased according to the
terms and conditions set forth in the Supply Agreement set forth in Exhibit C,
which Exhibit C is attached hereto and incorporated herein by reference.
Licensed Product shall be supplied in finished, packaged and labeled form.
However, should Noven be unable to meet Novartis' requirements of any Licensed
Product or by reason of force majeure be unable to supply Licensed Product for a
country and if the parties, after having consulted in good faith to resolve the
matter, are unable to do so, Novartis' sole remedy for Noven's failure to supply
shall be ***.
5.2 SUPPLY PRICE FOR SAMPLES AND PLACEBOS. Noven shall supply pouched
samples and placebos (clearly labeled as samples or placebos) of the
Vivelle-Dot(TM) Product as requested by Novartis at a price of ***.
ARTICLE VI -FEES AND PAYMENTS
6.1 UP-FRONT PAYMENT. Novartis shall pay Noven Twenty Million U.S.
Dollars (U.S. $20,000,000.00) in immediately available funds at the time of
execution of this License Agreement.
6.2 MILESTONE PAYMENT. Novartis shall pay Noven *** in immediately
available funds after receiving notification of Regulatory Approval of the
Vivelle-Dot(TM) Product in ***. Novartis shall promptly notify Noven of the
achievement of a milestone, whereupon Noven will submit an invoice in the form
of Exhibit E to Novartis for the milestone payment. Upon receipt of Noven's
invoice for a milestone payment, Novartis shall pay the milestone payment within
five (5) business days.
6.3 SUPPLY FEES.
6.3(a) Independent from and in addition to the up-front and
milestone payment of Articles 6.1 and 6.2, Novartis shall pay to Noven
a fee per Trade Unit of Licensed Product equal to *** of such Licensed
Products purchased from Noven within a calendar year, and a fee per
Trade Unit of Licensed Product equal to *** from all additional sales
of such Licensed Product purchased from Noven over and above *** in
that calendar year, said percentage being calculated by: ***.
Notwithstanding the foregoing, in no event shall the per Trade Unit fee
paid by Novartis be less than the amount set forth in the attached
Exhibit D. The minimum per Trade Unit fee for any Licensed Product not
specified in Exhibit D will be separately negotiated in good faith
between Noven and Novartis, and the parties will amend Exhibit D to
reflect such agreement.
10
<PAGE> 11
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.3(b) The supply fees shall include compensation for the
rights licensed to Novartis under this License Agreement and
compensation for supplying the Licensed Products meeting the Standard
Specifications.
6.3(c) Notwithstanding Article 6.3(a), during the term of this
License Agreement, the parties shall work together to maximize the
efficiency of the manufacturing processes and to minimize the Cost of
the Licensed Products. To the extent economic benefits result from such
efforts ***.
6.4 MINIMUM FEE. For the first three twelve-month periods following the
first commercial sale of the first Licensed Product to be sold in any Major
Country in the Territory, Novartis shall be required to pay Noven total supply
fees of at least *** per year.
6.5 PAYMENTS. With respect to each Licensed Product, the fees provided
for in Article 6.3 shall be payable in immediately available funds as follows:
6.5(a) The parties agree that the transfer price (hereinafter
"Transfer Price") for each Licensed Product shall be equal to **.
6.5(b) With respect to any Licensed Product, the Transfer
Price determined in accordance with Article 6.5(a) shall be due and
payable within thirty (30) days of Novartis' receipt of Noven's invoice
for such Licensed Product.
6.5(c) The remainder of any payment due under Article 6.3(a)
hereof shall be due and payable within sixty (60) days of the end of
each semi-annual calendar period (i.e., January 1 to June 30 and July 1
to December 31) in which Novartis, its Affiliates or Sublicensees
invoice for such Licensed Product. If the amount paid by Novartis for
Licensed Products shipped in such semi-annual period is greater than
the amount due under Article 6.5(a) hereof, Novartis shall invoice
Noven for such difference within sixty (60) days of the end of the
semi-annual calendar period and Noven shall pay the amount of such
invoice within thirty (30) days of its receipt of Novartis' invoice. If
the amount paid by Novartis for Licensed Products shipped in such
semi-annual period is less than the amount due under Article 6.5(a)
hereof, Novartis shall pay such difference to Noven within sixty (60)
days after the end of the semi-annual calendar period.
6.5(d) The price for samples and placebos provided for in
Article 5.2 shall be payable in immediately available funds within
thirty (30) days of Novartis' receipt of Noven's invoice for such
samples and placebos.
6.5(e) In the event that the total supply fees paid by
Novartis in any year are less than the minimum required under Article
6.4, Novartis shall pay Noven the difference between the minimum and
the amount actually paid within sixty (60) days after the end of the
applicable twelve-month period, unless Novartis has terminated this
Agreement under Section 9.2(a).
11
<PAGE> 12
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.6 STATEMENT OF ACCOUNT. At each time a payment under Article 6.5(c)
is due, Novartis shall deliver to Noven a written statement of account setting
forth in detail the quantity of Licensed Products sold by Novartis and its
Affiliates and Sublicensees, if any, during the period covered by the statement
of account, and a calculation of the payment due pursuant to Article 6.5(c).
Such statement shall be certified as true and correct by a duly authorized
officer of Novartis. Noven shall then verify Novartis' statement and, if a
payment is due from Novartis under Article 6.5(c), Noven shall submit an invoice
to Novartis for the amount due.
6.7 RECORDS; INSPECTION OF RECORDS. Novartis shall maintain complete
and accurate books and records of account relating to the sale of Licensed
Products in the Territory, in sufficient detail to permit the accurate
calculation of the payments due hereunder. Noven shall have the right during the
term of this License Agreement and for a period of three years thereafter, to
have a public accountant reasonably acceptable to Novartis examine the relevant
books and records of Novartis during normal business hours not more than once
each calendar year to verify that appropriate accounting and payments have been
made by Novartis under this License Agreement. In the event a determination is
made that Noven has not been paid the payments due to it under this License
Agreement, without prejudice to any other rights which Noven may have, Novartis
shall promptly pay to Noven the excess of the proper amount due over the amount
actually paid. The fees and expenses of the accountant performing any
verification pursuant to this Article shall be paid by Noven; provided that if a
determination is made that the amount paid to Noven with respect to any calendar
year was less than *** of the amount properly due to Noven, Novartis shall
promptly reimburse Noven for the costs of such verification. Any accountant
which examines the books and records of Novartis pursuant to this Article shall
sign a confidentiality agreement in form and substance reasonably satisfactory
to Novartis, and shall not disclose to Noven any information relating to the
business of Novartis except as necessary to provide to Noven a basis for
verifying the statement of account hereunder.
6.8 CURRENCY. The payments due under Article 6.5 shall accrue and be
payable in United States Dollars in immediately available funds. With respect to
any sales made in currencies other than United States Dollars, such sales shall
first be calculated in the foreign currency, then converted to Swiss Francs and
then converted to United States Dollars on the basis of the Average Quarterly
Exchange Rate (as hereinafter defined) for such quarter in which payment is
made. Novartis' Average Quarterly Exchange Rate is currently computed as
follows: a daily rate is calculated as the average of the Reuters exchange rate
as quoted at 09:30 AM CET and the Frankfurter fixing as quoted at 02:00 PM CET.
A monthly rate will be calculated as the average of these daily rates for that
month. The Average Quarterly Exchange Rate will be calculated as the average of
the three monthly rates for that quarter. Novartis represents that the foregoing
calculation method is the currently used standard method at Novartis for
converting to United States Dollars.
12
<PAGE> 13
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE VII - PATENTS
7.1 NOVEN INVENTIONS. If Noven (through its employees, agents or
consultants) makes or conceives any inventions or discoveries in the course of
the work to be performed by it pursuant to this License Agreement, Noven shall
own such inventions and discoveries and they shall become part of Noven's
Technology and be subject to the terms of this License Agreement. Noven shall
file and pursue all patent applications requested by Novartis on a
country-by-country basis in Noven's name and at Novartis' expense. Any patents
so obtained shall be owned by Noven and become part of Noven's Patent Rights and
be subject to the terms of this License Agreement. Any patent applications or
patents issuing therefrom for which Novartis does not pay expenses in accordance
with this Article 7.1 in a country shall not be included in Noven's Patent
Rights and shall not be licensed in such country. Noven agrees to cooperate with
Novartis in connection with Novartis' obligations under this Article, by, but
not limited to, providing the necessary information to enable Novartis to come
to an informed decision whether to pay said expenses and providing an annual
budget of costs which shall be discussed promptly should it be significantly
exceeded.
7.2 COSTS OF LICENSED PATENTS. Subject to the limitation of the
immediately following sentence, on a country-by-country basis, Novartis shall
bear the costs of prosecuting and maintaining the Licensed Patents in the
Territory beginning on the Effective Date and ending with the earliest of (i)
commercialization of the first Licensed Product in that country, (ii) expiration
of this License Agreement, and (iii) termination of this License Agreement for
any reason except if Novartis elects option (i) under Article 9.3(d).
Notwithstanding the foregoing sentence, Novartis may choose to discontinue
bearing the costs of prosecuting and maintaining any patent or patent
application among the Licensed Patents in a country before the earliest of (i)
commercialization of the first Licensed Product in that country, (ii) expiration
of this License Agreement, and (iii) termination of this License Agreement for
any reason except if Novartis elects option (i) under Article 9.3(d), whereby in
case of Novartis' decision to discontinue bearing such costs in such country,
such patent application or such patent shall be excluded from Noven's Patent
Rights and shall no longer be licensed in such country. Noven agrees to
cooperate with Novartis in connection with Novartis' obligations under this
Article, by, but not limited to, providing the necessary information to enable
Novartis to come to an informed decision whether to continue paying such costs
and providing an annual budget of costs which shall be discussed promptly should
it be significantly exceeded.
7.3 JOINT INVENTIONS. If Noven and Novartis jointly (through their
respective employees, agents or consultants) make or conceive any inventions or
discoveries in the course of the work to be performed pursuant to this License
Agreement, Novartis and Noven shall have joint ownership of such inventions or
discoveries and any patent applications and patents obtained thereon, and
Novartis shall pay all costs and expenses of obtaining and maintaining such
patent rights. Novartis shall have the sole right to decide what patent rights,
if any, to apply for with respect to the joint inventions or discoveries
described in this Article 7.3. Novartis shall keep Noven fully and promptly
informed with respect to patent rights, if any, that Novartis elects to apply
for, and Noven may, at its own expense, apply for and obtain patent protection
in any country in which Novartis does not elect to obtain such patent
protection. Each party shall have
13
<PAGE> 14
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
full right to use, pursuant to the terms of this License Agreement, any
discoveries, inventions or patent rights described in this Article 7.3.
7.4 NOVARTIS INVENTIONS. If Novartis (through its employees, agents or
consultants) makes or conceives any inventions or discoveries in the course of
the work to be performed by it under this License Agreement, Novartis shall own
such inventions or discoveries. Noven and its Affiliates shall have a
non-exclusive, royalty-free right to use throughout the world all such
inventions and discoveries, and any patent rights that result from them, in
connection with the Licensed Products and pursuant to and during the term of
this License Agreement.
7.5 INFRINGEMENT OR UNAUTHORIZED USE BY THIRD PARTIES.
7.5(a) Each party shall promptly notify the other following
the discovery of any infringement or unauthorized use of the other
party's intellectual property rights used in the development,
manufacture or marketing of Licensed Products which may come to its
attention.
7.5(b) Noven shall have one hundred and twenty (120) days
following such notice during which it may exercise the right, but shall
have no obligation, to take any action, legal or otherwise, which it
deems advisable in order to protect the Licensed Patents in the event
that the alleged infringement relates to the Licensed Patents. In
taking any such action, Novartis shall (1) at the request of Noven,
agree to be joined as a party plaintiff to any legal proceeding
instituted by Noven if it is legally required for Novartis to join, (2)
cooperate with Noven in good faith in all respects, (3) on reasonable
notice have any of its employees, officers, directors, agents and other
representatives testify when necessary, and (4) on reasonable notice
make available to Noven as necessary all relevant records, specimens,
samples and other information.
7.5(c) If Noven elects to bring an action under Article
7.5(b), then Noven shall offer Novartis an opportunity to share the
expenses of the action and to share in any recovery obtained from the
action after legal fees are paid. If Noven and Novartis agree to share
the expenses, ***. If Novartis elects not to share in the expenses, any
money recoveries received in connection with any such proceeding shall
be paid exclusively to Noven. If Novartis does not agree with Noven to
share the expenses of an action brought by Noven under Article 7.5(b),
Novartis shall, at its own expense, have the right to be represented in
any legal proceeding instituted by Noven pursuant to Article 7.5(b) by
counsel reasonably acceptable to Noven.
7.5(d) In the event that Noven does not take any action with
respect to any such infringement within one hundred and twenty (120)
days after receiving notice of such infringement, Novartis may take any
action, legal or otherwise, which it deems advisable in order to
protect the Licensed Patents; provided that Novartis shall maintain
Noven fully informed of the status of any such actions and provide to
Noven such documents concerning the action as Noven may reasonably
request. All expenses incurred by Novartis in connection with an action
under this Article 7.5(d) (including reasonable
14
<PAGE> 15
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
attorneys' and accountants' fees), shall be paid by Novartis. Noven
shall, at its own expense, have the right to be represented in any
legal proceeding instituted by Novartis pursuant to this Article 7.5(d)
by counsel reasonably acceptable to Novartis. After payment of any
legal costs and out of pocket expenses incurred by Novartis, any
remaining money recoveries received in connection with any such
proceeding shall be ***.
7.6 INFRINGEMENT OF THIRD PARTIES' RIGHTS. In the event that any legal
proceeding shall be instituted or threatened against Novartis or any notice
given to Novartis involving any claim of patent infringement or request to take
a license under any patent relating to the Licensed Products within the
Territory, Novartis shall promptly notify Noven in writing, which notice shall
include copies of all documents relating to such notice, proceeding or
threatened proceeding. Noven shall assume the defense of any such claim or
action responsive to such notice, provided Novartis has not altered the Licensed
Products supplied by Noven which meet the Standard Specifications and provided
Novartis has not altered the packaging or labeling provided by Noven for the
Licensed Products unless Noven has previously consented in writing to such
alteration, and the reasonable costs and expenses (including reasonable
attorneys' fees) incurred by Noven in connection with the defense of such claim
shall be shared equally by the parties. Noven shall provide to Novartis an
itemization of the costs and expenses so incurred. Any counsel selected by Noven
for the purposes of defending any such claim shall be reasonably acceptable to
Novartis. Novartis shall (1) fully cooperate with Noven in connection with any
such claim, (2) on reasonable notice have any of its employees, officers,
directors, agents and other representatives testify when necessary, and (3) on
reasonable notice make available to Noven as necessary all relevant records,
specimens, samples and other information in its possession. Novartis shall, at
its own expense, have the right to join any such legal proceeding and to be
represented in any legal proceeding by counsel reasonably acceptable to Noven.
If, as a result of any such claim, Novartis is required by reason of an order of
a court, arbitration board or other similar body or by reason of a settlement
between the parties, to pay a royalty or make other similar payments to a third
party, ***. Without limiting the foregoing, Novartis may not agree to pay any
royalties to a third party relating to Licensed Products without Noven's prior
consent, which shall not be unreasonably withheld.
15
<PAGE> 16
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE VIII - CONFIDENTIALITY OBLIGATIONS
8.1 CONFIDENTIALITY.
8.1(a) Except as specifically authorized by this License
Agreement, each party shall, for the term of this License Agreement and
for ten (10) years after its expiration or termination, keep
confidential, not disclose to others and use only for the purposes
authorized herein, any and all data, information, and know-how
including Noven's Technology, (collectively "Confidential Information")
received from the other party prior to or under this License Agreement;
provided, however, that the foregoing obligations shall not apply to
the extent that such information is (i) already known to the recipient
at the time of disclosure as evidenced by competent proof; (ii)
publicly known prior to or after disclosure other than through
unauthorized acts or omissions of the recipient; or (iii) disclosed in
good faith to the recipient by a third party entitled to make such
disclosure. With respect to any information already known to Novartis
only as a result of the Restated License Agreement, dated November 15,
1991, between Noven and Novartis Pharmaceuticals Corporation, or the
Amended and Restated License Agreement, dated September 30, 1999,
between Noven and Rhone-Poulenc Rorer Pharmaceuticals, Inc., the time
period specified in this Article 8.1(a) shall control and supersede any
prior term set by the previous agreements.
8.1(b) In the event a party who receives Confidential
Information under this License Agreement is required: (i) by law, rule
or regulation to disclose Confidential Information to regulatory
authorities to obtain and maintain Regulatory Approval for a Licensed
Product; (ii) to disclose Confidential Information to respond to a
regulatory or governmental inquiry concerning Licensed Product; or
(iii) to disclose Confidential Information in a judicial,
administrative or arbitration proceeding to enforce such party's rights
under this License Agreement or the Supply Agreement, it may do so only
if it limits disclosure to that purpose.
8.1(c) Notwithstanding the provisions of Articles 8.1(a) and
8.1(b), Novartis shall be permitted to disclose to its distributors,
wholesalers, and other direct customers such Confidential Information
relating to Licensed Products as Novartis shall reasonably determine to
be necessary or useful in order to effectively market and distribute
Licensed Products.
ARTICLE IX - TERM AND TERMINATION
9.1 TERM.
9.1(a) This License Agreement shall take effect as of the
Effective Date and continue in full force and effect in each country
throughout the Territory until the date of expiration of the last to
expire of Noven's Patent Rights in such country or until 10 years from
the first commercial sale of any Licensed Product in such country,
whichever is later, on a country-by-country and product-by-product
basis.
16
<PAGE> 17
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
9.1(b) Upon expiration of this License Agreement pursuant to
this Article 9.1 in any country for a particular Licensed Product,
Novartis shall have the right to elect to extend this License Agreement
on terms to be negotiated in good faith taking into account the
expiration of the applicable patents by giving Noven written notice of
its intention to do so prior to the end of any such term.
9.2 TERMINATION.
9.2(a) If either Novartis or Noven should fail to discharge
fully and promptly any of its material obligations under this License
Agreement, including but not limited to the Supply Agreement attached
as Exhibit C, and including its obligation to make payments, and should
such party failing to discharge any of its material obligations fail to
cure such failure within thirty (30) days in the case of failure to
make payments or within sixty (60) days for other failures after notice
in writing thereof by the other party, which period to cure may be
extended for up to sixty (60) days, upon written request, if such
additional time is reasonably necessary to effect such cure and
provided that such party is using diligent effort to pursue such cure,
this License Agreement can thereupon be terminated at the other party's
option upon receipt of notice to that effect. Notwithstanding the
foregoing, if the dispute resolution process in accordance with Article
12.1 has been initiated, such notice of termination shall not be given
until the time period for the CEO's of the parties to resolve the
dispute has expired without the dispute having been resolved.
9.2(b) Either party hereto may terminate this License
Agreement with immediate effect in the event that any proceeding under
a Bankruptcy Act or any insolvency, receivership or dissolution
proceeding is filed against the other party and such proceeding is not
dismissed within sixty (60) days after the filing thereof.
9.2(c) Either party may terminate this License Agreement with
immediate effect with respect to any Licensed Product that is
permanently and completely withdrawn from all markets in the Territory
for serious adverse health or safety reasons, as defined in the Safety
Addendum.
9.2(d) For a period of *** from the first commercial sale of
the Licensed Product in any country of the Territory, Noven may
terminate if Novartis, its Sublicensees or Affiliates markets, sells,
or distributes any transdermal product in the Territory that is
identical or substantially similar to any Licensed Product (hereinafter
the "Competing Product"), except that, within the European Economic
Area (hereinafter "EEA"), instead of a right to terminate, Noven has a
right to convert the license to a non-exclusive license in the EEA and
to grant licenses relating to the Licensed Products to third parties.
After a period of *** from the date of first commercial sale of a
Licensed Product in any country of the Territory not within the EEA,
Novartis may market, sell or distribute a Competing Product in the
Territory if ***. After a period of *** from the date of first
commercial sale of a Licensed Product in any country of the Territory
within the EEA, Novartis may market, sell or distribute a Competing
Product in the Territory provided that Noven has a
17
<PAGE> 18
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
right to convert the license to a non-exclusive license in the EEA and
to grant licenses relating to the Licensed Products to third parties.
The foregoing rights of Noven shall not apply ***.
9.2(e) Either party shall have the right to terminate this
License Agreement upon the occurrence of the right to terminate under a
force majeure event described in Article 13.4.
9.3 RIGHTS UPON TERMINATION.
9.3(a) Upon termination, except if Novartis elects option (i)
under Article 9.3(d), all information and data relating to any Licensed
Product including but not limited to Noven's Technology, and
information obtained from, incorporating or based on Noven's Technology
shall be returned to Noven. Novartis, its Affiliates and Sublicensees
shall make no further use of the same. The foregoing shall not apply to
information solely generated by Novartis, if termination is by Novartis
for cause of Noven.
9.3(b) Upon termination for any reason by either party, with
the exception of Noven terminating pursuant to Article 9.2(a), if
Novartis is not using the Licensed Trademark in any country of the
Territory, then Noven shall re-acquire all rights to the Licensed
Trademark without compensation to Novartis in the Territory, and
Novartis shall have no further right to the Licensed Trademark in the
Territory. Upon termination of this License Agreement by Noven pursuant
to Article 9.2(a), Noven shall re-acquire all rights to the Licensed
Trademark irrespective of Novartis using the Licensed Trademark in the
Territory. If necessary in such event, Novartis shall assign the
Licensed Trademark to Noven throughout the Territory.
9.3(c) Upon expiration of this License Agreement with respect
to any Licensed Product in any country or termination of this License
Agreement with respect to any Licensed Product in any country by Noven
pursuant to Article 9.2, all information and data relating solely to
such Licensed Product for such country, including but not limited to
Noven's Technology, and information obtained from, incorporating or
based on Noven's Technology, shall be returned to Noven, and Novartis,
its Affiliates and Sublicensees shall make no further use of the same
with respect to such Licensed Product and such country, and shall (i)
assign to Noven or its designee all Regulatory Applications and
Regulatory Approvals relating to such Licensed Product in such country;
(ii) have no further right or license to Noven's Technology or Noven's
Patent Rights with respect to such Licensed Product in such country;
and (iii) reasonably cooperate with Noven in connection with the
transfer of data, registrations and applications related to such
Licensed Product in such country.
9.3(d) Upon termination of this License Agreement by Novartis
pursuant to Article 9.2(a) or 9.2(b), Novartis has the option to (i)
continue using the Licensed Trademark and acquire the right to a
non-exclusive license to make or have made the Licensed Product under
Noven's Technology and Noven's Patent Rights under all other
18
<PAGE> 19
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
terms and conditions of this License Agreement in return for paying ***
or (ii) return all rights under this License Agreement to Noven in the
manner described in Article 9.3(c) in exchange for payment by Noven
***.
9.3(e) Upon expiration or termination of this License
Agreement, except if Novartis elects option (i) under Article 9.3(d),
Novartis shall have the right to distribute Licensed Products in its
inventories or otherwise in its control as of the expiration or
termination of this License Agreement for a period not to exceed six
(6) months from such expiration or termination (the "Wind-Down
Period"), in all cases subject to the payments under Article VI above.
9.3(f) Within fifteen (15) days after expiration of the
Wind-Down Period, Novartis shall destroy all tangible items bearing,
containing, or contained in, trademarks, marks, trade names, patents,
copyrights, designs, drawings, formulas or other data, photographs,
samples, literature and sales and promotional aids of every kind
relating to the Licensed Products and received from or owned by Noven,
in its possession or control and provide written certification of such
destruction, or prepare such tangible items for shipment to Noven, as
Noven may direct, at Noven's expense. Novartis shall not make or retain
any copies of any Confidential Information of Noven which may have been
entrusted to it, except for one copy for archiving purposes. Effective
upon expiration of the Wind-Down Period, Novartis shall cease to use
all trademarks and trade names of Noven or reassign the Licensed
Trademark if this has been assigned to Novartis under Article 3.2
except as permitted under Article 9.3(g). During the term of this
Agreement and after any termination or expiration of this Agreement,
Noven shall have the right to continue to use and disclose for any
purpose customer lists, customer data and other customer information
and any and all data relating to the Licensed Products, which is or was
provided or required to be provided by Novartis to Noven pursuant to
this License Agreement.
9.3(g) Upon expiration of this License Agreement (but not
termination), (i) if Novartis has not requested Noven to assign the
Licensed Trademark to Novartis under Article 3.2, then Novartis shall
have a fully paid-up license to use the Licensed Trademark in the
Territory solely in connection with the sale of generic versions of
Licensed Products in the Territory or, (ii) if Novartis has requested
Noven to assign the Licensed Trademark to Novartis under Article 3.2,
then Novartis shall be entitled to retain all rights and title to the
Licensed Trademark following expiration.
9.3(h) Articles 2.1(e), 2.1(f), 6.1-6.8, 7.3, 8.1, 9.3,
10.1-10.7, and 11.1-11.3 and Articles XII and XIII shall survive
expiration and termination for any reason of this License Agreement,
and they shall continue in full force and effect. Without limiting the
preceding sentence, expiration or termination for any reason shall not
release Novartis from any payment due to Noven pursuant to Article 6.5.
19
<PAGE> 20
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE X - WARRANTIES
10.1 OWNERSHIP. Noven represents and warrants that it has developed and
has the right to license Noven's Technology and that it owns all right, title
and interest in Noven's Patent Rights and in the Licensed Trademarks, as set
forth in Exhibit B.
10.2 RIGHT TO ENTER AGREEMENT. Noven represents and warrants that it
has the right to enter into this License Agreement, and that there are no
outstanding assignments, grants, licenses, encumbrances, obligations or
agreements, either written, oral or implied, materially inconsistent with this
License Agreement. Noven represents that it does not have actual knowledge of
any valid patents of third parties which would be infringed by the manufacture,
use or sale of any or all of the Licensed Products according to the terms of
this License Agreement.
10.3 PRODUCT WARRANTY. Noven represents and warrants that Licensed
Products supplied by Noven for sale in any country in the Territory shall
conform with the Standard Specifications and shall be manufactured in a facility
approved for that purpose by the proper authorities of such country to the
extent Novartis specifically notifies Noven of the applicable standards,
specifications, laws and regulations.
10.4 DISCLAIMER OF TRADEMARK WARRANTIES. NOVEN DISCLAIMS ALL WARRANTIES
OR REPRESENTATIONS OF ANY KIND CONCERNING THE PRESENT RIGHTS, BY REGISTRATION OR
OTHERWISE, TO OR IN THE LICENSED TRADEMARK AND ANY OTHER NAMES, DESIGNS, AND
DISTINGUISHING CHARACTERISTICS OWNED OR CONTROLLED BY IT, AND AS TO THEIR
POSSIBLE CONFLICT WITH NAMES, TRADEMARKS, DESIGNS AND DISTINGUISHING
CHARACTERISTICS OWNED OR REGISTERED BY OTHERS IN THE TERRITORY.
10.5 NOVARTIS WARRANTIES. Novartis warrants and represents to Noven
that (i) it has the full right and authority to enter into this License
Agreement and grant the rights and licenses granted herein; (ii) it has not
previously granted and will not grant any rights in conflict with the rights and
licenses granted herein; (iii) no action, suit or claim has been initiated or
threatened against Novartis with respect to its right to enter into and perform
obligations under this License Agreement; and (iv) it has not previously
granted, and will not grant during the term of this License Agreement, any
right, license or interest that is in conflict with the rights or licenses
granted under this License Agreement.
10.6 COMPLIANCE WITH LAWS. Novartis shall comply with all laws
applicable to the storage, handling, marketing, distribution and sale of the
Licensed Products.
10.7 GENERAL DISCLAIMER OF OTHER WARRANTIES. EXCEPT AS SET FORTH
HEREIN, NO OTHER WARRANTIES, EXPRESS OR IMPLIED, ARE CREATED BY THIS LICENSE
AGREEMENT.
20
<PAGE> 21
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE XI - INDEMNIFICATION
11.1 INDEMNITY. Each party shall indemnify, defend, release and hold
the other party and its affiliates, subsidiaries, successors, officers and
directors harmless against any and all third party claims, suits, actions or
threats of action, liabilities, settlement amounts, expenses or costs, including
without limitation reasonable attorneys' fees and costs, which result from or
arise out of any breach of the representations and warranties of such party set
forth under Article X of this License Agreement except to the extent a loss was
caused by negligence or willful misconduct of the indemnitee.
11.2 INDEMNITY PROCEDURE. Upon receiving notice of any claim or suit
under Article 11.1 hereof, the indemnified party shall immediately notify the
indemnifying party and shall allow the indemnifying party, its insurer or both
the opportunity to assume direction and control of the defense of such claim,
including without limitation, the settlement thereof at the sole option of the
indemnifying party or its insurer. The indemnified party agrees to cooperate
with the indemnifying party in the conduct of any negotiations, dispute
resolution or litigation of any such claim or suit; and the indemnifying party
shall inform the indemnified party of the progress of the claim or suit at such
times and in such manner as is reasonable under the circumstances.
11.3 INSURANCE. During the term of this License Agreement and for a
period of three years thereafter, each party shall maintain insurance coverage
of the types and in amounts usually insured by companies of the size and
operating the business conducted by such party, including, without limitation,
such insurance coverage as such party is required to maintain under applicable
law and comprehensive general liability insurance (including product liability)
safeguarding against liability for injuries to persons, including injuries
resulting in death, and damage to property. The insurance policy required
pursuant this Article shall provide that in the event of its cancellation or
nonrenewal, the insurer shall give written notice to the other party at least 30
days prior to the effective date of the cancellation or nonrenewal.
ARTICLE XII - DISPUTES
12.1 DISPUTES. In the event of any controversy or claim arising out of,
relating to or in connection with any provision of this License Agreement, or
the rights or obligations of the parties hereunder, the parties shall try to
settle their differences amicably between themselves. Either party may initiate
such informal dispute resolution by sending written notice of the dispute to the
other party, and within ten (10) days after such notice appropriate
representatives of the parties shall meet for attempted resolution by good faith
negotiations. If such representatives are unable to resolve promptly such
disputed matter, it shall be referred to the Chief Executive Officer of Noven
Pharmaceuticals, Inc. and the Chief Executive Officer of Novartis Pharma AG, or
their respective designees, for discussion and resolution. If such personnel are
unable to resolve such dispute within thirty (30) days of initiating such
negotiations, the parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association, before resorting to litigation.
21
<PAGE> 22
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE XIII - MISCELLANEOUS
13.1 RELATIONSHIP OF PARTIES. The parties hereto have the relationship
of independent contractors, and neither party shall enter into any agreements,
understandings or commitments on behalf of the other party without the other
party's express permission in writing.
13.2 INSPECTION OF FACILITIES. At any time during the term of this
License Agreement and any extension thereof, upon reasonable prior notice and no
more than twice per year, each party may during normal working hours have
employees of its choosing visit and inspect the facilities of the other party
that are used in performing such party's obligations hereunder.
13.3 ENTIRE AGREEMENT. This License Agreement represents the entire
understanding between the parties with respect to the matters set forth herein
and supersedes any and all previous understandings, both oral and written, with
respect to the subject matter hereof. The terms, conditions and provisions of
this License Agreement shall prevail over any inconsistent statements, terms,
conditions or provisions contained in any document passing between the parties
hereto including, but not limited to, any acknowledgment, confirmation or
notice. This License Agreement may not be amended, supplemented, or otherwise
modified except by an instrument in writing designated as an amendment,
supplement or modification which is signed by both parties hereto.
13.4 FORCE MAJEURE. If the performance of this License Agreement or any
obligation reasonably related thereto is prevented or hindered, by reason of any
cause beyond the reasonable control of the affected party, including, but not
limited to, fire, flood, riot, strikes or any governmental action, then the
party so affected, upon notice to the other party, shall be excused from such
performance, provided that the party so affected shall use diligent effort to
avoid or remove such cause or causes of non-performance and shall continue to
perform thereunder with the utmost dispatch whenever such cause or causes are
removed. If, as a result of any such action, the performance of this License
Agreement is prevented for a continuous period of one hundred eighty (180) days,
either party shall have the right to terminate this License Agreement as to the
country or countries involved by providing the other party with written notice
of termination.
13.5 SEVERABILITY. If any provision of this License Agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this License Agreement, and this
License Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
13.6 ASSIGNMENT. All of the terms and provisions of this License
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective permitted successors and assigns of the parties. This License
Agreement, or any rights thereunder, shall not be sold, assigned, transferred or
encumbered by either party without first obtaining the consent of the other
party in writing, provided that either party may assign or transfer any of its
22
<PAGE> 23
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
rights and obligations to any of its Affiliates and to any successors or assigns
of that part of its business to which the subject matter of this License
Agreement is related.
13.7 GOVERNING LAW. This License Agreement shall be interpreted in
accordance with and governed by the laws of the State of New York, without
references to the conflict of law rules. Both parties forever waive any defense
or claim that New York law cannot be validly applied to this License Agreement.
The parties hereby agree that, where applicable, the United Nations Convention
on Contracts for the International Sales of Goods shall not apply to this
License Agreement.
13.8 NOTICES. Any notice or report required or permitted hereunder
shall be given in writing, hand delivered or by registered or certified mail, to
the following addresses:
(1) Noven Pharmaceuticals, Inc.
11960 Southwest 144th Street
Miami, Florida 33186
Attention: President
With a copy to: Noven Pharmaceuticals, Inc.
11960 Southwest 144th Street
Miami, Florida 33186
Attention: General Counsel
(2) Novartis Pharma AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Attention: General Counsel
With a copy to: Novartis Pharma AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
Attention: Head BD & L
or to such other address or in care of such other person as hereafter shall be
designated in writing by either party to the other, and shall be deemed to have
been given as of the fifth business day after mailing.
13.9 COUNTERPARTS. This License Agreement and any amendments may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together will constitute one and the same instrument.
13.10 PUBLICITY. Noven and Novartis shall not issue any press release
or other public statement regarding, or disclosing the existence of, this
License Agreement without the prior written consent of the other party;
provided, however, that Noven and Novartis shall not be prevented from complying
with any duty of disclosure it may have pursuant to law or applicable stock
exchange rules.
23
<PAGE> 24
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
13.11 ENGLISH VERSION. In the event that this License Agreement is
translated into a language other than English, the English version of this
License Agreement shall control all questions of interpretation with respect
thereto.
24
<PAGE> 25
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
IN WITNESS WHEREOF, the parties hereto have caused this License
Agreement to be executed in duplicate and their seals to be hereunto affixed as
of the day and year first written above.
NOVARTIS PHARMA AG
By: /s/ G. Hazelzet
------------------------------
G. Hazelzet
Head Licensing Europe
Business Development & Licensing
By: /s/ G. Schelling
------------------------------
G. Schelling
Legal Counsel
NOVEN PHARMACEUTICALS, INC.
By: /s/ Robert C. Strauss
------------------------------
Robert C. Strauss
President and Chief Executive Officer
25
