As filed with the Securities and Exchange Commission on December 16, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
REGISTRATION STATEMENT ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
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TITAN PHARMACEUTICALS, INC.
(Exact name of Small Business Issuer as specified in its charter)
Delaware 2836 94-3171940
(State or other jurisdic- (Primary standard (I.R.S. employer
tion of incorporation) industrial classification identification number)
code number)
400 Oyster Point Blvd.
South San Francisco, California 94080
(650) 244-4990
(Address and telephone number of principal executive offices
and principal place of business)
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Louis R. Bucalo, M.D., Chief Executive Officer
Titan Pharmaceuticals, Inc.
400 Oyster Point Blvd.
South San Francisco, California 94080
(650) 244-4990
(Name, address and telephone number of agent for service)
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Copies to:
Fran Stoller, Esq.
Bachner, Tally, Polevoy & Misher LLP
380 Madison Avenue
New York, New York 10017
(212) 687-7000
Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than pursuant to dividend or interest reinvestment plans, please
check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [_]
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Each Class of Amount to Proposed Proposed Amount of
Securities to be Registered be Registered Maximum Maximum Registration
Aggregate Aggregate Fee
Price per Offering Price
Share(1)
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value 594,595 shares $5.19 $3,085,948.05 $910.00
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933, as amended, on the basis
of the market price of the Common Stock on the Nasdaq SmallCap Market on
December 15, 1997.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
(ii)
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION - DATED DECEMBER 16, 1997
PROSPECTUS
TITAN PHARMACEUTICALS, INC.
This Prospectus relates to the offer and resale by Hoechst Marion Roussel,
Inc. (the "Selling Stockholder") of 594,595 shares (the " Shares") of common
stock, $.001 par value (the "Common Stock") of Titan Pharmaceuticals, Inc. (the
"Company").
The Company is obligated under certain circumstances, upon the request of
the Selling Stockholder, to pay the Selling Stockholder, in cash, the difference
between (i) $5,500,000 and (ii) the net proceeds received by the Selling
Stockholder from the sale of Shares. See "Selling Stockholder."
The Selling Stockholder is obligated to sell the Shares through a
broker-dealer designated by the Company; provided that if the Company has not
designated a broker-dealer by the date of this Prospectus, the Selling
Stockholder may select a broker-dealer for such sales. The Company has not
determined which, if any, broker-dealer it will designate. Subject to the
foregoing, the Shares may be offered by the Selling Stockholder from time to
time in transactions on the Nasdaq SmallCap Market, in privately negotiated
transactions, through the writing of options on the Shares or a combination of
such methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholder may effect such
transactions by selling the Shares to or through broker-dealers and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholder or the purchasers of the Shares for
whom such broker-dealers may act as agent or to whom they sell as principal or
both (which compensation to a particular broker-dealer might be in excess of
customary commissions). See "Selling Stockholder" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholder. The Company has agreed to bear certain
expenses (other than fees and expenses, if any, of counsel or other advisors to
the Selling Stockholder) in connection with the registration and sale of the
Shares. The Company has agreed to indemnify the Selling Stockholder against
certain liabilities, including certain liabilities under the Securities Act of
1933, as amended (the "Act").
The Company's Units, Common Stock and Class A Warrants are traded on The
Nasdaq SmallCap Market ("Nasdaq") under the symbols TTNPU, TTNP, and TTNPW,
respectively. On December 15, 1997, the closing bid prices of the Units, Common
Stock and Warrants were $6.375, $5.1875 and $1.3125, respectively.
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THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _________ , 199_
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. a Registration Statement on Form S-3 under the
Securities Act of 1993, as amended (the "Act") covering the securities offered
by this Prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits thereto. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete and in each instance such
statement is qualified by reference to each such contract or document. The
Company is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports and other information with the Commission. Copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Company is an
electronic filer, and the Commission maintains a web site that contains reports,
proxy and information statements and other information regarding the Company at
www.sec.gov./edgar.html.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 0-27436)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996, including any documents or portions thereof incorporated
by reference therein;
2. The Company's Current Report on Form 8-K filed with the Commission on
January 15, 1997;
3. The Company's Quarterly Report on Form 10-QSB for the period ended March
31, 1997;
4. The Company's Current Report on Form 8-K filed with the Commission on May
30, 1997;
5. The Company's Current Report on Form 8-K filed with the Commission on June
10, 1997;
6. The Company's definitive Proxy Statement dated June 25, 1997;
7. The Company's Quarterly Report on Form 10-QSB for the period ended June 30,
1997;
8. The Company's Current Report on Form 8-K filed with the Commission on July
18, 1997;
9. The Company's Quarterly Report on Form 10-QSB for the period ended
September 30, 1997;
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10. The Company's Current Report on Form 8-K filed with the Commission on
November 21, 1997;
11. The Company's Registration Statement on Form 8-A declared effective on
January 18, 1996, registering the Common Stock and Class A Warrants under
the Exchange Act; and
12. All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of this offering.
Any statement contained in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this Prospectus. The Company will provide
without charge to each person to whom this Prospectus is delivered, upon written
or oral request of any such person, a copy of any or all of the documents
incorporated herein by reference (other than exhibits to such documents which
are not specifically incorporated by reference into such documents). Requests
for such documents should be directed to the Company, 400 Oyster Point
Boulevard, South San Francisco, California 94080, Attention: Chief Financial
Officer, telephone (415) 244-4990.
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PROSPECTUS SUMMARY
This Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements due to, among other factors,
the results of ongoing research and development activities, pre-clinical and
clinical testing, financing and strategic agreements and relationships; and
those factors discussed in the Section entitled "Risk Factors," as well as those
factors described elsewhere herein and in any documents actually or deemed to be
incorporated herein.
Titan Pharmaceuticals, Inc. ("Titan") is engaged in the development of
therapeutic products for the treatment of cancer, disorders of the central
nervous system and other serious and life-threatening diseases. Titan's products
utilize core technologies, including molecular therapy, cell therapy and gene
therapy. Titan's strategy is to develop the products in its current portfolio,
while actively seeking to acquire additional complementary therapeutic
technologies and products.
In January 1997, Titan obtained an exclusive worldwide license from Hoechst
Marion Roussel, Inc. ("Hoechst") to Iloperidone, an "atypical" antipsychotic
agent in development for the treatment of schizophrenia and related disorders.
Iloperidone has been evaluated in Phase I and II human clinical trials and is
set to enter Phase III clinical trials. In November 1997, Titan entered into an
agreement (the" Sublicense Agreement") with Novartis Pharma AG ("Novartis")
pursuant to which Novartis was granted a sublicense for the worldwide (with the
exception of Japan) development, manufacturing and marketing of Iloperidone.
Pursuant to the Sublicense Agreement, Novartis paid Titan $18 million in license
fees and reimbursement of research and development expenses and made a $5
million equity investment in Titan, and is required to make additional milestone
and royalty payments to Titan.
Titan's product pipeline includes three potential cancer vaccines utilizing
anti-idiotypic antibody technology which have demonstrated the ability to
generate an immune response against antigens associated with most
adenocarcinomas (such as colon, gastrointestinal and non-small cell lung
cancer), breast cancer, small cell lung cancer, ovarian cancer and melanoma: Cea
Vac, TriGem and TriAB have all completed Phase I clinical trials in various
cancer types and Phase II/III studies are planned for 1998.
Two additional cancer products in Titan's portfolio are MDRx1, a gene
therapy product which has completed Phase I testing in ovarian and breast cancer
patients at M.D. Anderson Cancer Center in Houston, and Pivanex Injection, a
product which has demonstrated encouraging results in an ongoing Phase I study.
Titan's portfolio also includes additional potential cancer therapeutics, as
well as two platform technologies and two potential products relating to the
treatment of central nervous system ("CNS") diseases, which are all in the
preclinical development stage.
A portion of Titan's operations are currently conducted through three
entities (the "Operating Companies"). Ingenex, Inc. ("Ingenex"), a company
engaged in the development of proprietary gene-based therapies; ProNeura, Inc.,
("ProNeura"), a company engaged in research and development activities relating
to a polymeric implantable drug delivery technology; and Theracell, Inc.
("Theracell"), a company engaged in the development of cell-based therapeutics
intended for the restorative treatment of neurological diseases and central
nervous system disorders. In November 1997, Ansan Pharmaceuticals, Inc.
("Ansan"), a former Operating Company, completed a merger which resulted in
Titan divesting itself of its equity interest in Ansan in exchange for the
rights to Pivanex Injection and the repayment of outstanding indebtedness to
Titan.
References to the Company include the Operating Companies unless the
context requires otherwise. Titan was incorporated in Delaware in February 1992.
Titan's executive offices are located at 400 Oyster Point Blvd., Suite 505,
South San Francisco, California 94080, and its telephone number is (415)
244-4990.
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RISK FACTORS
The Shares offered hereby are speculative in nature and an investment in
the Shares offered hereby involves a high degree of risk. In addition to the
other information contained in this Prospectus, prospective investors should
carefully consider the following risk factors in evaluating whether to purchase
the Shares offered hereby.
History of Operating Losses; Need for Additional Financing. The Company has
experienced substantial operating losses since its inception in July 1991. As of
September 30, 1997, the Company's accumulated deficit was approximately $56.9
million. Such losses have been principally the result of the various costs
associated with research and development activities and the Company's provision
of financial, administrative, regulatory and management services to the
Operating Companies. At December 15, the Company had working capital of
approximately $25.5 million and believes that available funds will enable it to
fund its operations for at least 18-24 months. The Company will be required to
seek substantial additional financing to commercialize any products that it may
successfully develop. The Company has no bank lines of credit and there can be
no assurance that the Company will be able to obtain any needed additional
financing on commercially reasonable terms.
Early Stage of Development of Proposed Products. The Company's proposed
products are at various stages of development and will require significant
further research, development, testing and regulatory clearances prior to
commercialization. There can be no assurance that any proposed products will be
successfully developed, prove to be safe and efficacious, receive requisite
regulatory approvals, demonstrate substantial therapeutic benefits in the
treatment of any disease or condition, be capable of being produced in
commercial quantities at reasonable costs or be successfully marketed.
Accordingly, the Company must be evaluated in light of the expenses, delays,
uncertainties and complications typically encountered by newly established
biopharmaceutical businesses, many of which may be beyond the Company's control.
These include, but are not limited to, unanticipated problems relating to
product development, testing, regulatory compliance, manufacturing, marketing
and competition, and additional costs and expenses that may exceed current
estimates. There can be no assurance that the Company will successfully develop
and commercialize any products or ever achieve profitable operations.
Government Regulation. The research, preclinical development, clinical
trials, product manufacturing and marketing to be conducted by or on behalf of
the Company are subject to regulation by the FDA and similar health authorities
in foreign countries. FDA approval of products, as well as the manufacturing
processes and facilities, if any, used to produce such products, will be
required before such products may be commercialized in the United States. The
process of obtaining approvals from the FDA is costly, time consuming and often
subject to unanticipated delays. There can be no assurance that approvals of any
of the proposed products, processes or facilities will be granted on a timely
basis, if at all. Even if regulatory approval is granted, such approval may
include significant limitations on indicated uses for which any such products
could be marketed. Further, even if such regulatory approvals are obtained, a
marketed drug and its manufacturer are subject to continued review, and later
discovery of previously unknown problems may result in restrictions on such
product or manufacturer, including withdrawal of the product from the market.
New government regulations in the United States or foreign countries also may be
established that could delay or prevent regulatory approval of
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products under development. Further, because gene therapy is a relatively new
technology and has not been extensively tested in humans, the regulatory
requirements governing gene therapy products are uncertain and may be subject to
substantial further review by various regulatory authorities in the United
States and abroad. This uncertainty may result in extensive delays in initiating
clinical trials and in the regulatory approval process for Ingenex. Regulatory
requirements ultimately imposed could have a material adverse effect upon the
business of Ingenex and, ultimately, the Company. Failure by the Company to
obtain regulatory approval of its proposed products, processes or facilities
could have a material adverse effect on its business, financial condition and
results of operations. The proposed products under development may also be
subject to certain other federal, state and local government regulations,
including, but not limited to, the Federal Food, Drug and Cosmetic Act, the
Environmental Protection Act, the Occupational Safety and Health Act, and state,
local and foreign counterparts to certain of such acts.
Reliance on Patents and Other Proprietary Rights. The Company's success
will depend, in part, on its ability, and the ability of the Operating Companies
and their licensor(s), to obtain protection for their products and technologies
under United States and foreign patent laws, to preserve their trade secrets,
and to operate without infringing the proprietary rights of third parties. The
Company has obtained rights to certain patents and patent applications and may,
in the future, seek rights from third parties to additional patents and patent
applications. There can be no assurance that patent applications relating to
potential products or technologies, including those licensed from others, or
that the Company may license in the future, will result in patents being issued,
that any issued patents will afford adequate protection or not be challenged,
invalidated, infringed, or circumvented, or that any rights granted thereunder
will afford competitive advantages to the Company. Furthermore, there can be no
assurance that others have not independently developed, or will not
independently develop, similar products and/or technologies, duplicate any of
the Company's products or technologies, or, if patents are issued to, or
licensed by, the Company, design around such patents.
There can be no assurance that the validity of any of the patents licensed
to the Company would be upheld if challenged by others in litigation or that the
Company's activities would not infringe patents owned by others. The Company
could incur substantial costs in defending itself and/or the Operating Companies
in suits brought against them or any of their licensors, or in suits in which
the Company may assert, against others, patents in which the Company has rights.
Should the Company's products or technologies be found to infringe patents
issued to third parties, the manufacture, use, and sale of such products could
be enjoined and the Company could be required to pay substantial damages. In
addition, the Company may be required to obtain licenses to patents or other
proprietary rights of third parties, in connection with the development and use
of their products and technologies. No assurance can be given that any licenses
required under any such patents or proprietary rights would be made available on
acceptable terms, if at all.
Titan also relies on trade secrets and proprietary know-how, which it seeks
to protect, in part, by confidentiality agreements with employees, consultants,
advisors, and others. There can be no assurance that such employees,
consultants, advisors, or others, will maintain the confidentiality of such
trade secrets or proprietary information, or that the trade secrets or
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proprietary know-how of the Company will not otherwise become known or be
independently developed by competitors in such a manner that the Company will
have no practical recourse.
Titan is aware of an issued United States patent (as well as corresponding
patents and patent applications in foreign countries) relating to multidrug
resistance in mammalian cells. This patent claims substantially the same subject
matter as is claimed by certain issued United States patents that have been
licensed by Ingenex. The Company is also aware of an issued United States
patent, relating to ex vivo gene therapy. The Company believes that this patent
claims subject matter that relates to any gene therapeutic developed by Ingenex
to the extent that the introduction of the gene into the subject's cells is
performed ex vivo. Thus, it may be necessary for Ingenex to obtain a license
under either or both of such patents to pursue commercialization of its proposed
gene therapy products utilizing the MDR1 gene or ex vivo therapies, as
applicable. There can be no assurance that Ingenex will be able to obtain such
licenses or that such licenses, if available, can be obtained on terms
acceptable to Ingenex. Failure of Ingenex to obtain such licenses could have a
material adverse effect on the business, financial condition and results of
operations of Ingenex and the Company. Ingenex has received notice that three
companies are opposing the grant of a European patent which has claims directed
to the human MDR1 gene and gene fragments.
Competition and Technological Change. Competition in the pharmaceutical and
biotechnology industries is intense and is expected to increase. The Company
will face competition from numerous companies that currently market, or are
developing, products for the treatment of diseases and disorders targeted by the
Company. Many of these entities have significantly greater research and
development capabilities, experience in obtaining regulatory approvals and
manufacturing, marketing, financial and managerial resources than the Company.
Acquisitions of or investments in competing biotechnology companies by large
pharmaceuticals companies could enhance such competitors' financial, marketing
and other resources. The Company also competes with universities and other
research institutions in the development of products, technologies and
processes. There can be no assurance that competitors of the Company will not
succeed in developing technologies or products that are more effective than the
Company or that will render the Company's products or technologies
noncompetitive or obsolete. In addition, certain of such competitors may achieve
product commercialization or patent protection earlier than the Company.
Dependence Upon Key Collaborative Relationships and License and Sponsored
Research Agreements. The Company relies significantly on the resources of third
parties to conduct research and development. The Company's success will depend,
in part, on its ability and the ability of the Operating Companies to maintain
existing collaborative relationships and to develop new collaborative
relationships with third parties. There can be no assurance that the Company
will be successful in maintaining its existing collaborative arrangements or
that any collaborative arrangements will lead to the successful
commercialization of products.
The license agreements relating to the in-licensing of technology that have
been or may in the future be entered into by the Company or the Operating
Companies typically require the payment of an up-front license fee and royalties
based on sales of licensed products and processes under the license and any
sublicense with minimum annual royalties, the use of due diligence in developing
and bringing products to market, the achievement of funding milestones
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and, in some cases, the grant of stock to the licensor. The sponsored research
agreements that have been or may in the future be entered into by generally
require periodic payments on an annual or quarterly basis. Some agreements also
may require funding or production facilities relating to clinical research.
Failure to meet financial or other obligations under either license agreements
or sponsored research agreements in a timely manner, the rights to proprietary
technology or the right to have the applicable university or institution conduct
research and development efforts could be lost.
Dependence on Third Parties for Manufacturing and Marketing Activities. To
date, the Company has not introduced any products on the commercial market. To
conduct human clinical trials and ultimately to gain market acceptance, the
products under development must be manufactured in compliance with regulatory
requirements and at acceptable costs. It is not expected that the Company will
have the resources in the foreseeable future to allocate to the manufacture or
direct marketing of any proposed products and, therefore, it is intended that
collaborative arrangements be pursued regarding the manufacture and marketing of
any products that may be successfully developed. There can also be no assurance
that additional collaborative arrangements to manufacture or market any proposed
products will be entered into or, in lieu thereof, that any manufacturing
operations can be successfully established or that any sales force can be
successfully implemented.
Dependence on Key Personnel. The Company is highly dependent on the
services of Dr. Louis R. Bucalo, President and Chief Executive Officer, as well
as the other principal members of management and scientific staff of the Company
and the Operating Companies. The loss of one or more of such individuals could
substantially impair ongoing research and development programs and the Company's
ability to obtain additional financing. The future success of the Company
depends in large part upon its ability and that of the Operating Companies to
attract and retain highly qualified personnel. This intense competition for such
highly qualified personnel from other pharmaceutical and biotechnology
companies, as well as universities and nonprofit research organizations, and may
have to pay higher salaries to attract and retain such personnel. There can be
no assurance that sufficient qualified personnel can be hired on a timely basis
or retained. The loss of such key personnel or failure to recruit additional key
personnel could have a material adverse effect on the Company's business,
financial condition and results of operations.
Shares Eligible for Future Sale. Future sales of the Company's Common Stock
by existing stockholders pursuant to Rule 144 under the Securities Act, pursuant
to an effective registration statement or otherwise, could have an adverse
effect on the price of the Company's securities.
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<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholder.
DIVIDEND POLICY
The Company has never paid cash dividends on its Common Stock and does not
anticipate paying cash dividends in the foreseeable future. The Company
currently intends to retain all earnings, if any, for use in the expansion of
the Company's business. The declaration and payment of future dividends, if any,
will be at the sole discretion of the Board of Directors and will depend upon
the Company's profitability, financial condition, cash requirements, future
prospects and other factors deemed relevant by the Board of Directors.
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SELLING STOCKHOLDER
In January 1997, the Company issued the Shares to the Selling Stockholder
in connection with entering into a worldwide exclusive license agreement for the
antipsychotic agent, Iloperidone (the "HMR Agreement"). Pursuant to the HMR
Agreement, the Company agreed, at the request of the Selling Stockholder, to
register the Shares under the Act to permit public secondary trading of the
Shares.The HMR Agreement obligates the Company, upon the request of the Selling
Stockholder, to pay the Selling Stockholder, in cash, the difference between (i)
$5,500,000 and (ii) the net proceeds received by the Selling Stockholder from
the sale of Shares within 10 days of receipt of written notice from the Selling
Stockholder. Notice is required to be provided upon the earlier of (i)
completion of the sale of the Shares or (ii) 120 days after the effective date
of the registration statement on Form S-3 (the "Registration Statement") of
which this Prospectus forms a part. The Selling Stockholder has notified the
Company that it intends to make such a request for payment at the appropriate
time. Any Shares remaining unsold pursuant to this Prospectus will be
surrendered to the Company.
The Company has agreed to bear certain expenses (other than fees and
expenses, if any, of counsel to the Selling Stockholder) in connection with the
registration and sale of the Shares being offered by the Selling Stockholder.
See "Plan of Distribution." The Company has agreed to prepare and file such
amendments and supplements to the Registration Statement and Prospectus as may
be necessary to keep the Registration Statement effective as provided for in the
HMR Agreement.
The following table sets forth certain information regarding the beneficial
ownership of Common Stock by the Selling Stockholder and as adjusted to give
effect to the sale of the Shares offered hereby.
Percentage Number of
Number of Shares Ownership Shares
Beneficially Owned Prior to Being
Selling Stockholder(1) Prior to Offering(2) Offering Offered(2)
- ---------------------- -------------------- -------- ----------
Hoechst Marion Roussel, Inc. 594,595 4.43% 594,595
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(1) The address of such stockholder is 10236 Marion Park Drive, Dock 6, Kansas
City, Missouri 64137.
PLAN OF DISTRIBUTION
Pursuant to the HMR Agreement, the Selling Stockholder is obligated to sell
the Shares through a broker-dealer designated by the Company; provided that if
the Company has not designated a broker-dealer by the effective date of the
Registration Statement, the Selling Stockholder may select a broker-dealer for
such sales. The Company has not determined which, if any, broker-dealer it will
designate.
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Subject to the foregoing, the Selling Stockholder may sell Shares from time
to time in transactions on the Nasdaq SmallCap Market, in privately negotiated
transactions, through the writing of options on the Shares or a combination of
such methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholder may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholder or the purchases of the Shares for whom
such broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation to a particular broker-dealer might be in excess of
customary commissions).
The Selling Stockholder and any broker-dealers who act in connection with
the sale of Shares hereunder may be deemed to be "underwriters" as that term is
defined in the Act, and any commissions received by them and profit on any
resale of the Shares as principal might be deemed to be underwriting discounts
and commissions under the Act.
The Company has agreed to indemnify the Selling Stockholder against certain
liabilities, including certain liabilities under the Act.
LEGAL MATTERS
The validity of the securities offered hereby have been passed upon for the
Company by Bachner, Tally, Polevoy & Misher LLP, New York, New York.
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[Back Cover]
No dealer, salesman or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or by the Underwriter.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, any securities offered hereby by anyone in any jurisdiction in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to anyone to whom it is
unlawful to make such offer, or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein contained is correct as of any time
subsequent to the date of this Prospectus.
TABLE OF CONTENTS
Page
----
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 4
Risk Factors............................................................... 5
Use of Proceeds............................................................ 9
Dividend Policy............................................................ 9
Selling Stockholder........................................................ 10
Plan of Distribution....................................................... 10
Legal Matters.............................................................. 11
================================================================================
================================================================================
TITAN PHARMACEUTICALS, INC.
PROSPECTUS
[date]
================================================================================
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are as follows:
Amount
------
SEC Registration Fee.................................... $ 910.00
Printing and Engraving Expenses......................... 3,500.00
Legal Fees and Expenses................................. 7,500.00
Blue Sky Fees and Expenses.............................. 3,500.00
Accounting Fees and Expenses............................ 7,500.00
-----------
Total.......................................... $ 22,910.00
===========
Item 15. Indemnification of Directors and Officers
The Amended and Restated Certificate of Incorporation and By-Laws of the
Registrant provide that the Registrant shall indemnify any person to the full
extent permitted by the Delaware General Corporation Law (the "GAL"). Section
145 of the GAL, relating to indemnification, is hereby incorporated herein by
reference.
In accordance with Section 102(a)(7) of the GAL, the Certificate of
Incorporation of the Registrant eliminates the personal liability of directors
to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director with certain limited exceptions set forth in
Section 102(a)(7).
The Registrant also enters into indemnification agreements with each of its
officers and directors, the form of which is filed as Exhibit 10.6 and reference
is hereby made to such form.
In addition, the Registrant currently maintains an officers' and directors'
liability insurance policy which insures, subject to the exclusions and
limitations of the policy, officers and directors of the Company against certain
liabilities which might be incurred by them solely in such capacities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Registrant,
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. See Item 17,
"Undertakings."
Item 16. Exhibits
3.1 - Restated Certificate of Incorporation of the Registrant(1)
3.2 - Form of Amendment to Restated Certificate of Incorporation of the
Registrant(1)
3.3 - By-laws of the Registrant(1)
4.1 - Form of Bridge Note(1)
4.2 - Bridge Warrant Agreement(1)
II-1
<PAGE>
4.3 - Form of Warrant Agreement(1) 4.4 - Form of Underwriter's Unit
Purchase Option(1)
4.5 - Form of Investor Rights Agreement between the Registrant and the
holders of
Series A and Series B Preferred Stock(1)
4.6 - Form of Placement Agent's Unit Purchase Option(4)
5.1 - Opinion of Bachner, Tally, Polevoy & Misher LLP
10.1 - 1993 Stock Option Plan(1)
10.2 - 1995 Stock Option Plan(1)
10.3 - Employment Agreement between the Registrant and Louis Bucalo dated
February 1, 1993, amended as of February 3, 1994(1)
10.4 - Employment Agreement between Registrant and Richard Allen dated
July 28, 1995(1)
10.5 - Employment Agreement between Registrant and Sunil Bhonsle, dated
August 6, 1995(1)
10.6 - Form of Indemnification Agreement(1)
+10.9 - MDR Exclusive License Agreement between Ingenex, Inc. (formerly
Pharm-Gen Systems Ltd.) and the Board of Trustees of the University
of Illinois dated May 6, 1992(1)
+10.11 - License Agreement between Theracell, Inc. and New York University
dated November 20, 1992, as amended as of February 23, 1993 and as
of February 25, 1995(1)
+10.12 - License Agreement between the Registrant and the Massachusetts
Institute of Technology dated September 28, 1995(1)
+10.14 - Exclusive License Agreement between Ingenex, Inc. and the Board of
Trustees of the University of Illinois, dated July 1, 1994(1)
+10.15 - Exclusive License Agreement between Ingenex, Inc. and the Board of
Trustees of the University of Illinois, dated July 1, 1994(1)
+10.16 - License Agreement between Ingenex, Inc. and the Massachusetts
Institute of Technology, dated September 11,1 992(1)
+10.17 - License Agreement between Ingenex, Inc. and Baylor College of
Medicine, dated October 21, 1992(1)
10.18 - Lease for Registrant's facilities(2)
+10.19 - License Agreement between Theracell, Inc. and the University of
South Florida dated March 15, 1996(3)
+10.20 - License Agreement between Trilex Pharmaceuticals, Inc. (formerly
Ascalon Pharmaceuticals, Inc.) and the University of Kentucky
Research Foundation dated May 30, 1996(4)
+10.22 - License Agreement between the Registrant and Hoechst Marion
Roussel, Inc. effective as of December 31, 1996(5)
10.23 - Employment Agreement between Registrant and Robert E. Farrell dated
August 9, 1996(5)
10.24 - Financing Agreement between the Registrant and Ansan
Pharmaceuticals, Inc. dated March 21, 1997(6)
10.25 - Agreement for Purchase and Sale of Assets between the Registrant
and Pharmaceuticals Product Development, Inc. dated June 4, 1997(6)
++10.27 - License Agreement between the Registrant and Bar-Ilan Research and
Development Company Limited effective November 25, 1997
II-2
<PAGE>
10.28 - Letter Agreement between the Registrant and Ansan Pharmaceuticals,
Inc. dated
November 24, 1997
10.29 - Stock Purchase Agreement between the Registrant and Ansan
Pharmaceuticals, Inc. effective November 25, 1997
++10.30 - Sublicense Agreement between the Registrant and Novartis Pharma
AG dated November 20, 1997
23.1 - Consent of Bachner, Tally, Polevoy & Misher LLP - Included in
Exhibit 5.1
23.2 - Consent of Ernst & Young LLP, Independent Auditors - Included on
Page II-6
24.1 - Power of Attorney - Included on Page II-4
+ Confidential treatment has been granted with respect to portions of this
exhibit.
++ Confidential treatment has been requested with respect to portions of this
exhibit.
(1) Incorporated by reference from the Registrant's Registration Statement on
Form SB-2 (File No. 33-99386).
(2) Incorporated by reference from the Registrant's Annual Report on Form
10-KSB for the year ended December 31, 1995.
(3) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the period ended March 31, 1996.
(4) Incorporated by reference from the Registrant's Registration Statement on
Form SB-2 (File No. 333-13469).
(5) Incorporated by reference from the Registrant's Annual Report on Form
10-KSB for the year ended December 31, 1996.
(6) Incorporated by reference from the Registrant's Quarterly Report on Form
10-QSB for the period ended March 31, 1997.
Item 17. Undertakings
Undertaking Required by Item 512 of Regulation S-K.
The undersigned registrant hereby undertakes that, for purpose of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has authorized this Registration
Statement or Amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of South San Francisco, State of
California on the 15th day of December, 1997.
TITAN PHARMACEUTICALS, INC.
By: /s/ Louis R. Bucalo
------------------------------
Louis R. Bucalo, M.D., President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below under the heading "Signature" constitutes and appoints Louis R. Bucalo and
Lindsay R. Rosenwald, or either of them, his true and lawful attorney-in-fact
and agent with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities to sign any or all amendments
to this registration statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully for all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement or Amendment thereto has been signed by the following
persons in the capacities and on the dates stated.
Signature Title Date
--------- ----- ----
/s/ Louis R. Bucalo President, Chief Executive December 15, 1997
- -------------------------------- Officer and Director
Louis R. Bucalo, M.D. (principal executive
officer)
/s/ Ernst Gunter-Afting Director December 15, 1997
- --------------------------------
Ernst Gunter-Afting
/s/ Victor J. Bauer Director December 15, 1997
- --------------------------------
Victor J. Bauer
/s/ Michael K. Hsu Director December 15, 1997
- --------------------------------
Michael K. Hsu
/s/ Hubert E. Huckel Director December 15, 1997
- --------------------------------
Hubert E. Huckel, M.D.
/s/ Marvin E. Jaffe, M.D. Director December 15, 1997
- --------------------------------
Marvin E. Jaffe, M.D.
/s/ Lindsay A. Rosenwald Director December 15, 1997
- --------------------------------
Lindsay A. Rosenwald, M.D.
/s/ Konrad M. Weis Director December 15, 1997
- --------------------------------
Konrad M. Weis, Ph.D.
/s/ Kenneth J. Widder Director December 15, 1997
- --------------------------------
Kenneth J. Widder, M.D.
/s/ Robert E. Farrell Executive Vice President December 15, 1997
- -------------------------------- and Chief Financial Officer
Robert E. Farrell (principal financial
and accounting officer)
II-4
<PAGE>
CONSENT OF COUNSEL
The consent of Bachner, Tally, Polevoy & Misher LLP is contained in its
opinion filed as Exhibit 5.1 to the Registration Statement.
II-5
<PAGE>
CONSENT OF ERNST & YOUNG LLP,INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-3) and related Prospectus of Titan Pharmaceuticals, Inc. for the
registration of 594,595 shares of its Common Stock of our report dated February
21, 1997 with respect to the consolidated financial statements of Titan
Pharmaceuticals, Inc. included in its annual report filed with the Securities
and Exchange Commission for the year ended December 31, 1996.
Palo Alto, California ERNST & YOUNG LLP
December 12, 1997
II-6
Exhibit 5.1
Titan Pharmaceuticals, Inc.
400 Oyster Point Blvd., Suite 505
South San Francisco, California 94080
Re:
Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to Titan Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-3 (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to the registration of an aggregate of 594,595 shares (the
"Shares") of the common stock, par value $.001 per share, of the Company (the
"Common Stock") for resale by Hoechst Marion Roussel, Inc. (the "Selling
Stockholder").
In this connection, we have reviewed (a) the Registration Statement; (b)
the Company's Restated Certificate of Incorporation and Bylaws; (c) the form of
License Agreement between the Company and the Selling Stockholder effective as
of December 31, 1996; and (d) certain records of the Company's corporate
proceedings as reflected in its minute books. In our examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity with the original of all
documents submitted to us as copies thereof. Where factual matters relevant to
such opinion were not independently established, we have relied upon
certificates of officers and responsible employees and agents of the Company.
Our opinion set forth below is limited to the General Corporation Law of the
State of Delaware.
Based upon the foregoing, it is our opinion that the Shares have been duly
and validly authorized and issued and are fully paid and nonassessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving this consent, we do not thereby concede that we come within
the categories of persons whose consent is required by the Act or the General
Rules and Regulations promulgated thereunder.
Very truly yours,
/s/ BACHNER, TALLY, POLEVOY & MISHER LLP
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY AN * AND [ ], HAVE BEEN
SEPARATELY FILED WITH THE COMMISSION.
Exhibit 10.27
LICENSE AGREEMENT
This License Agreement (hereinafter referred to as the License Agreement),
effective as of the 25th day of November, 1997 is made by and between Bar-Ilan
Research and Development Company Ltd., a company duly organized and existing
under the laws of the State of Israel and having a principal place of business
at Bar-Ilan University, PO Box 1530, Ramat Gan 52115, Israel (BAR-ILAN), and
Titan Pharmaceuticals, Inc., a corporation duly organized and existing under the
laws of the State of Delaware and having a principal place of business at 400
Oyster Point Boulevard, Suite 505, South San Francisco, California 94080, USA
(TITAN).
WHEREAS, BAR-ILAN is entering this License Agreement on its own behalf, and
as representative and trustee for Bar-Ilan University (the University) and MOR -
Research Applications Ltd. (MOR), and represents that it has been authorized by
the University and MOR to make the representations and undertakings contained
herein; and
WHEREAS, BAR-ILAN has the right to grant licenses under the Patent Rights
(as later defined) and whereas TITAN desires to obtain a license upon the terms
and conditions hereinafter set forth; and
WHEREAS, TITAN has represented to BAR-ILAN, to induce BAR-ILAN to enter
into this License Agreement, that it shall commit itself to a thorough, vigorous
and diligent program of exploiting the Patent Rights and know-how of BAR-ILAN,
so that public utilization shall result therefrom; and
WHEREAS, BAR-ILAN and Ansan Pharmaceuticals, Inc., a corporation duly
organized and existing under the laws of the State of Delaware and having a
principal place of business at 400 Oyster Point Boulevard, Suite 435, South San
Francisco, California 94080, USA (ANSAN) have entered into a previous license
agreement, effective as of October 31, 1992; and
WHEREAS, BAR-ILAN and ANSAN mutually agree to terminate that previous
license agreement and replace it with this License Agreement and a parallel
license agreement between BAR-ILAN and ANSAN.
<PAGE>
NOW, THEREFORE, it is agreed as follows:
ARTICLE I - DEFINITIONS
For the purposes of this License Agreement, the following words and phrases
shall have the following meanings:
1.1. "AFFILIATE" shall mean any company or entity, the voting control of
which is at least fifty percent (50%), directly or indirectly, owned or
controlled by TITAN or which, directly or indirectly, owns or controls at least
fifty percent (50%) of TITAN or which is under common control with TITAN.
AFFILIATE shall also mean any entity in fact effectively controlled by or under
common control with TITAN.
1.2. "Patent Rights" shall mean Israeli Patent Applications Nos. 83389 and
87072, filed July 30, 1987 and July 11, 1988, respectively; and any applications
claiming priority or benefit directly or indirectly from either or both of them,
including any continuations, continuations-in-part, and divisionals thereof; and
any patents issuing from any of the foregoing, including any reissues,
reexaminations, and extensions thereof; as set forth in Appendix I.
1.3. "Licensed Product(s)" shall mean:
1.3.1. Any product which is covered in whole or in part by a valid and
unexpired claim contained in the Patent Rights in the country in which the
product is made, used, leased, or sold;
1.3.2. Any product which is manufactured by using a process which is
covered in whole or in part by a valid and unexpired claim contained in the
Patent Rights in the country in which the process is used;
1.3.3. Any product which is used according to a method which is
covered in whole or in part by a valid and unexpired claim contained in the
Patent Rights in the country in which the method is used.
<PAGE>
1.4. "Licensed Process(es)" shall mean any process or method, which is
covered, in whole or in part, by a valid and unexpired claim contained in the
Patent Rights in the country in which the process or method is used.
1.5. "TITAN Field" shall mean: (a) with respect to butylidene dibutyrate
(sometimes referred to as AN-10), non-topical applications for oncologic
disorders; and (b) with respect to all other products within the Patent Rights,
all indications and routes of administration except (i) the treatment of
(-hemoglobinopathies ((-globin disorders) and (ii) topical applications other
than oncologic disorders. The term oncologic disorders shall not include
chemotherapy-or radiotherapy-induced alopecia.
1.6. "Net Sales" shall mean TITAN's or an AFFILIATEs billings for Licensed
Products and Licensed Processes, less the sum of the following:
(a) discounts allowed in amounts customary in the trade;
(b) sales, tariffs, duties, and/or use taxes directly imposed on and
with reference to particular sales;
(c) outbound transportation prepaid or allowed;
(d) amounts allowed or credited on returns; and
(e) bad debt deductions actually written off during the period.
No deductions shall be made for commissions paid to individuals whether
they be independent sales agencies or regularly employed by TITAN or an
AFFILIATE and on their payroll. Licensed Products and Licensed Processes shall
be considered sold when billed out or invoiced.
ARTICLE 2 - GRANT
2.1. BAR-ILAN hereby grants to TITAN a worldwide license to practice under
the Patent Rights, and to make, have made, use, lease, and/or sell the Licensed
Products in the TITAN Field and to practice the Licensed Processes in the TITAN
Field, said license being perpetual unless sooner terminated as hereinafter
provided and subject to the payment of royalties
<PAGE>
as hereinafter provided, and said license to include the right to sublicense in
the TITAN Field and to be exclusive to TITAN in the TITAN Field.
2.2. TITAN agrees that any sublicenses granted by it shall provide for the
same obligations as those obligations imposed only by this License Agreement.
2.3. TITAN agrees to forward to BAR-ILAN annually a copy of such reports
received from any sublicensee as may be pertinent to an accounting of royalties,
as well as copies of all sublicense agreements entered into by TITAN in
connection with the Patent Rights.
ARTICLE 3 - DUE DILIGENCE
3.1. TITAN shall use its reasonable best efforts to bring Licensed Products
or Licensed Processes to market through a thorough, vigorous and diligent
program for exploitation of the Patent Rights and continue active, diligent
marketing efforts for Licensed Products or Licensed Processes throughout the
life of this Agreement.
3.2. TITAN shall endeavor to use the Rabin Medical Center in Petach-Tikva,
Israel, as one of the sites to conduct human clinical trials of the Licensed
Products provided that US Food and Drug Administration (FDA) protocols and
standards can be achieved and the cost per patient is competitive with the
United States.
ARTICLE 4 - ROYALTIES
4.1. For the rights, privileges, and license granted hereunder, TITAN shall
pay to BAR-ILAN, as set forth below, either (i) until the expiration of the last
applicable patent within the Patent Rights on any Licensed Product or Licensed
Process in the country in which such Licensed Process is used or such Licensed
Product is made, used, leased, or sold, after which time TITANs license shall
become fully paid-up and perpetual in such country; or (ii) until this License
Agreement shall be terminated as hereinafter provided:
<PAGE>
The information below, marked by * and [ ], has been omitted pursuant to a
request for confidential treatment. The omitted portion had been separately
filed with the Commission.
4.1.1. In each calendar year, a royalty in an amount equal to [*****]
of Net Sales of the Licensed Products or Licensed Processes leased or sold by
TITAN or an AFFILIATE.
4.1.2. In each calendar year, a royalty in an amount equal to [*****]
of the royalties, fees, or any other lump sum received by TITAN or an AFFILIATE
from its sublicensees for the use, lease, or sale of Licensed Products and
Licensed Processes. TITAN shall not sell or sublicense the use, lease, sale, or
other disposition of Licensed Products or Licensed Processes to an AFFILIATE of
TITAN without obtaining the prior written consent of BAR-ILAN, which consent
shall not unreasonably be withheld.
4.1.3. To maintain the exclusivity of TITANs license to the Patent
Rights, TITAN shall pay minimum annual royalties in accordance with the
following schedule:
(a) On October 31, 1998, a minimum of ............. [*****]
(b) Each calendar year thereafter, a minimum of ... [*****]
4.2. No multiple royalties shall be payable because use, lease, or sale of
any Licensed Product or Licensed Process is, or shall be, covered by more than
one valid and unexpired claim contained in the Patent Rights.
4.3. Royalty payments shall be paid in United States Dollars in New York or
at such other place as BAR-ILAN may reasonably designate consistent with the
laws and regulations controlling in any foreign country. Any withholding taxes
which TITAN or any sublicensee shall be required by law to withhold on
remittance of the royalty payments shall be deducted from the royalty paid to
BAR-ILAN. TITAN shall furnish BAR-ILAN the original copies of all official
receipts for such taxes. If a currency conversion shall be required in
connection with the payment of royalties hereunder, such conversion shall be
made using the exchange rate prevailing at Citibank, NA in New York on the last
business day of the calendar quarterly reporting period to which such royalty
payments relate.
<PAGE>
The information below, marked by * and [ ], has been omitted pursuant to a
request for confidential treatment. The omitted portion had been separately
filed with the Commission.
4.4. In all cases, the price utilized to determine Net Sales employed in
the computation of royalties shall be a genuine and objective selling price
which would otherwise be established in a bona fide arms length transaction
between unrelated and independent parties which have no affiliation or other
interest which might affect such genuine and objective selling price. TITAN
covenants not to engage in manipulative transfer pricing, distribution of
Licensed Products which are not commercially reasonable, or any other means to
avoid the intended application of this Article 4. In the event Licensed Products
are used or otherwise disposed of by TITAN to an AFFILIATE or any other party at
a price which is less than a genuine and objective selling price, as described
herein, the price utilized to determine Net Sales employed in the computation of
royalties shall be the prevailing price of the identical type of Licensed
Products sold or leased by TITAN to independent and unrelated third parties. In
the event that TITAN shall not have customarily sold or leased the identical
type of Licensed Products to independent and unrelated third parties then the
price employed in the computation of royalties shall be set at [*****] of the
full cost of production, including all direct costs and full overhead, for such
Licensed Products sold.
4.5. In addition to any royalties payable under Paragraph 4.1, if TITAN, or
an AFFILIATE or sublicensee of TITAN, receives approval from the US FDA to
market a Licensed Product in the TITAN Field (as those terms are used in this
License Agreement) before ANSAN, or an AFFILIATE or sublicensee of ANSAN,
receives approval from the US FDA to market a Licensed Product in the ANSAN
Field (as those terms are used in the License Agreement between BAR-ILAN and
ANSAN), then TITAN shall pay to BAR-ILAN four additional payments of [******]
each: the first within 90 days of receiving the approval, the second within 180
days of receiving the approval, the third within 270 days of receiving the
approval, and the fourth within 360 days of receiving the approval.
ARTICLE 5 - REPORTS AND RECORDS
5.1. TITAN shall keep full, true and accurate books of account containing
all particulars that may be necessary to the purpose of showing the amount
payable to BAR-ILAN by way of royalty as aforesaid. Said books of account shall
be kept at TITAN's principal place of business. Said books and the supporting
data shall be open upon reasonable notice to TITAN and no more than twice per
calendar year, for five (5) years following the
<PAGE>
end of the calendar year to which they pertain, for inspection by the BAR-ILAN
Internal Audit Division and/or by an independent certified public accountant
employed by BAR-ILAN, to which TITAN has no reasonable objection, for the
purpose of verifying TITAN's royalty statement or compliance in other respects
with this License Agreement.
5.2. TITAN, within sixty (60) days after the end each quarter of each
calendar year, shall deliver to BAR-ILAN true and accurate reports, giving such
particulars of the business conducted by TITAN during the preceding quarter
under this License Agreement as shall be pertinent to a royalty accounting
hereunder. These shall include at least the following:
(a) All Licensed Products and Licensed Processes used, leased,
or sold by or for TITAN, its AFFILIATES and sublicensees.
(b) Total amounts invoiced for Licensed Products and Licensed
Processes used, leased, or sold by or for TITAN, its
AFFILIATES and sublicensees.
(c) Deductions applicable in computed "Net Sales as defined in
Paragraph 1.6.
(d) Total royalties due based on Net Sales by or for TITAN, its
AFFILIATES and sublicensees.
(e) Names and addresses of all AFFILIATES and sublicensees of
TITAN. (f) On an annual basis, TITAN's Annual Report.
5.3. With each such report submitted, TITAN shall pay to BAR-ILAN the
royalties due and payable under this License Agreement. If no royalties (other
than the minimum royalty pursuant to Paragraph 4.1.3) shall be due, TITAN shall
so report.
ARTICLE 6 - PATENT PROSECUTION
6.1. TITAN, at its own expense and utilizing patent counsel of its choice
selected in consultation with BAR-ILAN, shall have the sole right and obligation
for the filing, prosecution, and maintenance of the Patent Rights. TITAN, or its
patent counsel, shall provide BAR-ILAN
<PAGE>
with copies of all correspondence and documents filed with, or received from,
any patent office or patent agent. In addition, TITAN agrees that any and all
official or ribbon copies of issued patents shall be forwarded to, and retained
by, BAR-ILAN.
6.2. BAR-ILAN and TITAN agree for the benefit of ANSAN that neither shall
take any action in regard to prosecution of the Patent Rights (including by
reexamination, reissue, or the like) that could result in any diminution of
rights with respect to any claims covering rights outside the TITAN Field, in
particular, to any composition of matter claims relating to butylidene
dibutyrate, except with the consent of ANSAN.
ARTICLE 7 - TERMINATION
7.1. If TITAN shall become bankrupt or insolvent, shall file a petition in
bankruptcy, or if the business of TITAN shall be placed in the hands of a
receiver, assignee, or trustee for the benefit of creditors, whether by the
voluntary act of TITAN or otherwise, this License Agreement shall automatically
terminate.
7.2. Should TITAN fail in its payment to BAR-ILAN of royalties due in
accordance with the terms of this License Agreement which are not the subject of
a bona fide dispute between BAR-ILAN and TITAN, BAR-ILAN shall have the right to
serve notice upon TITAN, by certified mail to the address designated in Article
13 hereof, of its intention to terminate this License Agreement within sixty
(60) days after receipt of said notice of termination unless TITAN shall pay to
BAR-ILAN, within the sixty (60) day period, all such royalties due and payable.
Upon the expiration of the sixty (60) day period, if TITAN shall not have paid
all such royalties due and payable, the rights, privileges and license granted
hereunder shall thereupon immediately terminate.
7.3. Upon any material breach or default of this License Agreement
(including without limitation, the failure to submit annual reports as provided
under Paragraph 5.2) by TITAN, other than those occurrences set out in
Paragraphs 7.1 and 7.2 hereinabove, which shall always take precedence in that
order over any material breach or default referred to in this Paragraph 7.3,
BAR-ILAN shall have the right to terminate this License Agreement and the
rights, privileges and
<PAGE>
license granted hereunder by ninety (90) days' notice to TITAN by certified mail
to the address designated in Article 13 hereof. Such termination shall become
effective unless TITAN shall have cured any such breach or default capable of
being cured prior to the expiration of the ninety (90) day per from receipt of
the notice of termination.
7.4. TITAN shall have the right to terminate this License Agreement at any
time on nine (9) months notice by certified mail to BAR-ILAN.
7.5. Upon termination of this License Agreement for any reason, nothing
herein shall be construed to release either party from any obligation that
matured prior to the effective date of such termination. TITAN and/or any
sublicensee thereof may, however, after the effective date of such termination,
sell all Licensed Products, and complete Licensed Products in the process of
manufacture at the time of such termination, and sell the same, provided that
TITAN shall pay to BAR-ILAN the royalties therein as required by Article 4 of
this License Agreement and shall submit the reports required by Article 5 hereof
on the sales of Licensed Products.
7.6. Upon the termination of this License Agreement, TITAN shall (except to
the extent necessary to complete the manufacture and sale of Products permitted
under Paragraph 7.5 above): (i) return to BAR-ILAN any materials still in its
possession provided to it by BAR-ILAN pursuant to this License Agreement; (ii)
maintain the confidentiality of all proprietary, non-public information provided
to it by BAR-ILAN; and (iii) not use the Licensed Products or other information
disclosed pursuant to this License Agreement in any way in connection with its
business.
7.7. Upon the termination of this License Agreement for any reason,
existing sublicense agreements pertaining to Licensed Products entered into by
TITAN pursuant to this License Agreement shall at BAR-ILANs option be assigned,
upon such termination, from TITAN to BAR-ILAN or to BAR-ILANs designee.
ARTICLE 8 - ARBITRATION
8.1. Except as to issues relating to the validity, enforceability, or
infringement of any patent contained in the Patent Rights licensed hereunder,
any and all claims, disputes, or
<PAGE>
controversies arising under, out of, or in connection with this License
Agreement, which have not been resolved by good faith negotiations between the
parties, shall be resolved by final and binding arbitration to be held in Tel
Aviv under the rules of the American Arbitration Association then in effect. The
arbitrators shall have no power to add to, subtract from, or modify any of the
terms or conditions of this License Agreement. Any award rendered in such
arbitration may be enforced by either party in any court having jurisdiction.
8.2. Any claim, dispute, or controversy concerning the validity,
enforceability, or infringement of any patent contained in the Patent Rights
licensed hereunder shall be. resolved in any court having jurisdiction thereof.
In the event TITAN institutes a proceeding to contest the validity or
enforceability of the Patent Rights, all royalties owed by TITAN under Article 4
of this License Agreement shall continue to be paid by TITAN until such
proceeding is resolved, after appeals if any.
8.3. In the event that, in any arbitration proceeding, any issue shall
arise concerning the validity, enforceability, or infringement of any patent
contained in the Patent Rights licensed hereunder, the arbitrators shall, to the
extent possible, resolve all issues other than validity, enforceability, and
infringement; in any event, the arbitrators shall not delay the arbitration
proceeding for the purpose of obtaining or permitting either party to obtain
judicial resolution of such issues, unless an order staying the arbitration
proceeding shall be entered by a court of competent jurisdiction. Neither party
shall raise any issue concerning the validity, enforceability, or infringement
of any patent contained in the Patent Rights licensed hereunder in any
proceeding to enforce any arbitration award hereunder, or in any proceeding
otherwise arising out of any such arbitration award.
ARTICLE 9 - INFRINGEMENT AND OTHER ACTIONS
9.1. TITAN and BAR-ILAN shall promptly provide written notice to the other
party of any alleged infringement by a third party of the Patent Rights within
the TITAN Field and provide such other party with any available evidence of such
infringement.
<PAGE>
9.2. During the term of this Agreement, TITAN shall have the right, but not
the obligation, to prosecute and/or defend, at its own expense and utilizing
counsel of its choice, any infringement of and/or challenge to the Patent Rights
within the TITAN Field. In furtherance of such right, BAR-ILAN hereby agrees
that TITAN may join BAR-ILAN as a party in any such suit, without expense to
BAR-ILAN. No settlement, consent judgment, or other voluntary final disposition
of any such suit may be entered into without the consent of BAR-ILAN, which
consent shall not unreasonably be withheld. TITAN shall indemnify BAR-ILAN
against any order for costs that may be made against BAR-ILAN in any such suit.
9.3. Any recovery of damages by TITAN in any such suit shall be applied
first in satisfaction of any unreimbursed expenses and legal fees of TITAN
relating to the suit. The balance remaining from any such recovery shall be
treated as royalties received by TITAN from sublicensees and shared by BAR-ILAN
and TITAN in accordance with Paragraph 4.1.2 hereof.
9.4. If within six (6) months after receiving notice of any alleged
infringement within the TITAN Field, TITAN shall have been unsuccessful in
persuading the alleged infringer to desist, or shall not have brought and shall
not be diligently prosecuting an infringement action, or if TITAN shall notify
BARILAN, at any time prior thereto, of its intention not to bring suit against
the alleged infringer, then, and in those events only, BAR-ILAN shall have the
right, but not the obligation, to prosecute, at its own expense and utilizing
counsel of its choice, any infringement of the Patent-Rights within the TITAN
Field, and BAR-ILAN may, for such purposes, join TITAN as a party plaintiff. The
total cost of any such infringement action commenced solely by BAR-ILAN shall be
borne by BAR-ILAN and BAR-ILAN shall keep any recovery or damages for past
infringement derived therefrom.
9.5. In any suit to enforce and/or defend the Patent Rights pursuant to
this License Agreement, the party not in control of such suit shall, at the
request and expense of the controlling party, cooperate in all respects and, to
the extent possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens, and the
like.
<PAGE>
9.6. BAR-ILAN and TITAN agree for the benefit of ANSAN that, before either
of them shall commence or respond to a suit to enforce and/or defend the Patent
Rights, they shall consult with ANSAN in good faith to the extent legally
permissible to ensure that no action shall jeopardize the legitimate interests
of ANSAN in the Patent Rights. TITAN further agrees that it will cooperate in
good faith with ANSAN to establish an agreement for shared responsibility and/or
cost of enforcement and/or defense to the extent that such enforcement and/or
defense implicates both the ANSAN Field and the TITAN Field.
ARTICLE 10 - PRODUCT LIABILITY
10.1. BAR-ILAN, by this License Agreement, makes no representation as to
the patentability and/or breadth of the inventions contained in the Patent
Rights. BAR-ILAN, by this License Agreement, makes no representation as to
patents now held or which will be held by others in the field of the Licensed
Products for a particular purpose.
10.2. TITAN agrees to defend, indemnify, and hold BAR-ILAN, the University
and MOR harmless from and against all liability, demands, damages, expense, or
losses for death, personal injury, illness, or property damage arising (a) out
of the use by TITAN or its transferees of inventions licensed or information
furnished under this License Agreement, or (b) out of any use, sale, or other
disposition by TITAN or its transferees of products made by use of such
inventions or information. As used in this clause, BAR-ILAN includes the
Trustees, Officers, Agents, Employees and Students of BAR-ILAN, the University,
and MOR, and TITAN includes its AFFILIATES, Contractors and Sub-contractors.
ARTICLE 11 - ASSIGNMENT
TITAN may assign or otherwise transfer this License Agreement and the
license granted hereunder, and the rights acquired by it hereunder so long as
such assignment or transfer shall be accompanied by a sale or other transfer of
TITAN's entire business or of that part of TITAN's business to which the license
granted hereunder relates. TITAN shall give BAR-ILAN thirty (30) days prior
written notice within which to reasonably object to such assignment or transfer.
If within thirty (30) days after the giving of such notice, no written objection
is received by TITAN,
<PAGE>
BAR-ILAN shall be deemed to have approved such assignment or transfer; provided,
however, BAR-ILAN shall not be deemed to have approved such assignment and
transfer unless such assignee or transferee shall have agreed in writing to be
bound by the terms and conditions of this License Agreement. If, within such
thirty (30) day period, BAR-ILAN provides written notice of reasonable objection
to such assignment or transfer, then no such assignment or transfer shall be
made and, if made, shall be deemed null and void. Upon such assignment or
transfer and agreement by such assignee or transferee, the term TITAN as used
herein shall mean such assignee or transferee. If TITAN shall sell or otherwise
transfer its entire business or that part of its business to which the license
granted hereby relates and the transferee shall not have agreed in writing to be
bound by the terms and conditions of this License Agreement, or new terms and
conditions shall not have been reasonably agreed upon within sixty (60) days of
such tale or transfer, BAR-ILAN shall have the right to terminate this License
Agreement.
ARTICLE 12 - NON-USE OF NAMES
TITAN shall not use the name of BAR-ILAN or MOR or any adaptation thereof
in any advertising, promotional, or sales literature without prior written
consent obtained from BARILAN, in each case, except that TITAN may state that it
is licensed by BAR-ILAN under one or more of the patents and/or applications
comprising the Patent Rights.
ARTICLE 13 - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
Any payment, notice, or other communication pursuant to this License
Agreement shall be sufficiently made or given on the date of mailing if sent to
such party by certified first class mail, postage prepaid, addressed to it at
its address below or as it shall designate by written notice given to the other
party:
In the case of BAR-ILAN:
Bar-Ilan Research & Development Company Ltd.
Bar-Ilan University
PO Box 1530
Ramat Gan 52115
Israel
<PAGE>
In the case of TITAN:
Titan Pharmaceuticals, Inc.
400 Oyster Point Boulevard, Suite 505
South San Francisco, California 94080
USA
ARTICLE 14 - EFFECTIVENESS
This License Agreement shall become effective and binding on the parties
hereto upon the closing of the Agreement and Plan of Reorganization dated July
16, 1997 by and between ANSAN and Discovery Laboratories, Inc.
ARTICLE 15 - MISCELLANEOUS PROVISIONS
15.1. This License Agreement shall be construed, governed, interpreted and
applied in accordance with the laws of the State of Israel, except that
questions affecting the validity, enforceability, or infringement of any patent
contained in the Patent Rights shall be determined by the law of the country in
which the patent was granted.
15.2. The parties hereto acknowledge that this License Agreement sets forth
the entire agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
15.3. The provisions of this License Agreement are severable, and in the
event that any provision of this License Agreement shall be determined to be
invalid or unenforceable under any controlling body of law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
15.4. TITAN agrees to mark the Licensed Products sold in the United States
with all applicable United States patent numbers. All Licensed Products shipped
to, or sold in, other countries shall be marked in such a manner as to conform
with the patent laws and practice of the country of manufacture or sale.
<PAGE>
15.5. The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this License Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
IN WITNESS WHEREOF, the parties hereto have executed this License
Agreement, in duplicate, by proper persons thereunto duly authorized.
BAR-ILAN TITAN
By: /s/ AMITZOR SHLASKY By: /s/ SUNIL BHONSLE
----------------------------- ------------------------------
Name: Amitzor Shlasky Name: Sunil Bhonsle
Title: Managing Director Title: Exec. V.P. and COO
Date: 13-11-97 Date: 11/24/97
<PAGE>
APPENDIX I
Application
Country No. Filing Date Patent No. Issue Date
Israel 83389 July 30, 1987 83389 December 23, 1993
Israel 87072 July 11, 1988 87072 November 19, 1993
Austria* 88111971.3 July 25, 1988 95164 September 29, 1993
Belgium* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
Canada 573,518 July 29, 1988 1,327,595 March 8, 1994
France* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
Germany* 88111971.3 July 25, 1988 3884517 September 29, 1993
Great
Britain* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
Greece* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
Italy* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
Japan 191,981/88 July 30, 1988 -- --
Luxembourg* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
Netherlands* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
Spain* 88111971.3 July 25, 1988 2045028 September 29, 1993
Sweden* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
Switzerland* 88111971.3 July 25, 1988 0 302 349 September 29, 1993
USA 07/223,595 July 25, 1988 5,200,553 April 6, 1993
* Based on European Patent Application No. 88111971.3, filed July 25, 1988;
European Patent No. 0 302 349, granted September 29, 1993
Exhibit 10.28
November 24, 1997
Titan Pharmaceuticals, Inc.
400 Oyster Point Boulevard, Suite 505
South San Francisco, CA 94080
Attention: Sunil Bhonsle
Ladies and Gentlemen:
This letter sets forth our agreement regarding the conduct of and payment
for certain dispute resolution matters arising from the License Agreement
between Bar-Ilan University (Bar-Ilan) and Titan; and for the partial
reimbursement of certain moneys to be paid under the License Agreement between
Bar-Ilan and Titan and the corresponding License Agreement between Bar-Ilan and
Ansan.
In the event of any dispute between Bar-Ilan and Titan arising from or
relating to the License Agreement between Bar-Ilan and Titan, Titan shall
promptly notify Ansan, and Ansan and Titan shall have the right jointly to
commence, control and resolve any litigation or arbitration with Bar-Ilan with
counsel of their selection. The parties shall share equally the cost of such
litigation or arbitration (including the reasonable cost of counsel), provided
that Ansan shall not be required to share any judgment or award entered against
Titan, citing Titan to be at fault. Any amounts payable by Ansan to Titan under
this paragraph shall be creditable against any amounts then owing by Titan to
Ansan under Article 2 of the Stock Purchase Agreement between Titan and Ansan.
Under Paragraph 4.5 of the License Agreement between Bar-Ilan and Titan,
and under Paragraph 4.5 of the corresponding License Agreement between Bar-Ilan
and Ansan, whichever of Titan and Ansan first receives approval from the US Food
and Drug Administration to market a Licensed Product in its Field (as defined in
its License Agreement) becomes obliged to pay Bar-Ilan the sum of $200,000 in
four payments over the 360 days following receipt of the approval. As long as
both the License Agreement between Bar-Ilan and Titan and the License Agreement
between Bar-Ilan and Ansan remain in effect, if either of Titan or Ansan
receives such an approval and thereby becomes obliged to pay Bar-Ilan under
Paragraph 4.5 of its License Agreement, and the other of Titan or Ansan
subsequently receives such an approval, then that second party to receive
approval shall reimburse the first party to receive approval one-half of the
payments the first party has made or will make to Bar-Ilan under Paragraph 4.5
of the first party's License Agreement.
<PAGE>
Please confirm by your signature below that the above sets forth your
agreement in this matter.
Yours very truly,
Ansan Pharmaceuticals, Inc.
By:/s/ Vaughan Shalson
---------------------------
Vaughan Shalson
So Agreed.
Titan Pharmaceuticals, Inc.
By:/s/ Sunil Bhonsle
-------------------------
Sunil Bhonsle
-2-
Exhibit 10.29
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (hereinafter referred to as the "Agreement")
effective as of the 25th day of November, 1997 is made by and between Ansan
Pharmaceuticals, Inc., a corporation duly organized and existing under the laws
of the State of Delaware and having a principal place of business at 400 Oyster
Point Boulevard, Suite 435, South San Francisco, California 94080, USA ("ANSAN")
and Titan Pharmaceuticals, Inc., a corporation duly organized and existing under
the laws of the State of Delaware and having a principal place of business at
400 Oyster Point Boulevard, Suite 505, South San Francisco, California 94080,
USA ("TITAN").
WHEREAS, TITAN is the principal stockholder of ANSAN; and WHEREAS,
ANSAN has licensed patent rights pursuant to the terms of a License
Agreement (the "Original ANSAN License") dated as of October 31, 1992 by and
between ANSAN and Bar-Ilan Research and Development Company Ltd., a company duly
organized and existing under the laws of the State of Israel and having a
principal place of business at Bar-Ilan University, PO Box 1530, Ramat Gan
52115, Israel ("BAR-ILAN"); and
WHEREAS, the parties to this Agreement have previously entered into a
Sublicense Agreement (the "Sublicense") dated as of July 15, 1997, under which
ANSAN granted a sublicense to TITAN of certain rights under the Original ANSAN
License in return for transfer to ANSAN of all the ANSAN securities owned by
TITAN and payment by TITAN to ANSAN of a royalty on Net Sales of the sublicensed
compounds; and
WHEREAS, BAR-ILAN, ANSAN, and TITAN mutually agree to terminate the
Original ANSAN License and the Sublicense, and replace them with License
Agreements between BAR-ILAN and ANSAN (the "New ANSAN License") and between
BAR-ILAN and TITAN (the "TITAN License") and with this Agreement.
NOW, THEREFORE, it is agreed as follows:
<PAGE>
1. Definitions
For the purposes of this Agreement, the following words and phrases shall
have the following meanings:
1.1. "AFFILIATE" of TITAN shall have the meaning set forth in Paragraph 1.1
of the TITAN License.
1.2. "AN-9" shall mean pivaloyloxymethyl butyrate.
1.3. "Discovery" shall mean Discovery Laboratories, Inc., a corporation
duly organized and existing under the laws of the State of Delaware and having a
principal place of business at 509 Madison Avenue, New York, New York 10022
1.4. "Licensed Processes" shall have the meaning set forth in Paragraph 1.4
of the TITAN License.
1.5. "Licensed Products" shall have the meaning set forth in Paragraph 1.3
of the TITAN License.
1.6. "Merger Agreement" shall mean that Agreement and Plan of
Reorganization dated July 16, 1997 by and between ANSAN and Discovery.
1.7. "Net Sales" shall have the meaning set forth in Paragraph 1.6 of the
TITAN License.
1.8. "New ANSAN License" shall mean the License Agreement to be entered
into by and between BAR-ILAN and ANSAN, as set forth in Exhibit A hereto.
1.9. "Original ANSAN License" shall mean the License Agreement dated as of
October 31, 1992 by and between BAR-ILAN and ANSAN.
1.10. "Patent Rights shall" have the meaning set forth in Paragraph 1.2 of
the TITAN License.
-2-
<PAGE>
1.11. "Securities" shall mean all outstanding securities in the capital
stock of ANSAN owned by or on behalf of TITAN, namely 1,212,654 shares of ANSAN
Common Stock.
1.12. "TITAN License" shall mean the License Agreement to be entered into
by and between BAR-ILAN and TITAN, as set forth in Exhibit B hereto.
2. Royalty Payments
In addition to the royalties payable to BAR-ILAN pursuant to the TITAN
License, TITAN shall pay to ANSAN either (i) until the expiration of the last
applicable patent within the Patent Rights on any Licensed Product or Licensed
Process in the country in which such Licensed Process is used or such Licensed
Product is made, used, leased, or sold, after which time TITAN's obligation to
pay royalties in that country shall cease, or (ii) until this Agreement is
terminated in accordance with its terms, in each calendar year an amount equal
to two percent (2%) of Net Sales of the Licensed Products or Licensed Processes
leased or sold by TITAN, any AFFILIATE or any sublicensee of TITAN.
3. Securities
Subject to the terms and conditions of this Agreement, TITAN shall transfer
to ANSAN at the Closing (as defined in Article 5) all its right, title and
interest in the Securities, free and clear of any and all liens, encumbrances
and security interests. ANSAN and TITAN acknowledge that a portion of the
Securities are held by Continental Stock Transfer & Trust Company as Escrow
Agent pursuant to the terms of an Escrow Agreement dated as of May25, 1995.
ANSAN and TITAN agree to take all steps reasonably necessary to obtain release
of such Securities and delivery to ANSAN in accordance with the terms of this
Agreement.
4. Repayment of Indebtedness
Subject to the terms and conditions of this Agreement, ANSAN shall retire
all indebtedness then owing to TITAN, including the principal amount and
interest then owing on the debenture due April 1998 and any moneys owed for
administrative and financial services, less the sum of up to $100,000 for
expenditures made by ANSAN in connection with the Pivanex(TM)
-3-
<PAGE>
product development program subsequent to June 30, 1997 (which shall be
contributed to ANSAN's capital), at the Closing (as defined in Article 5).
5. Closing
The closing of the transactions contemplated by this Agreement (the
Closing) shall take place simultaneously with the closing of the Merger
Agreement at the offices of Heller Ehrman White & McAuliffe, 525 University
Avenue, Palo Alto, California or at such other time, date and location as the
parties agree.
6. Conditions to Closing
6.1. Conditions to Obligations of TITAN. The obligations of TITAN to
consummate the transactions contemplated hereby shall be subject to satisfaction
at the Closing of each of the following conditions, any of which may be waived
by TITAN:
(a) Representations and Warranties. The representations and
warranties of ANSAN contained in this Agreement shall have been true
and correct in all material respects as of the date of this Agreement
and as of the date of the Closing. TITAN shall have received a
certificate with respect to the foregoing signed on behalf of ANSAN by
the Chief Executive Officer of ANSAN.
(b) Closing of the Merger Agreement. The transactions
contemplated by the Merger Agreement shall have closed.
(c) License Agreements. BAR-ILAN and ANSAN shall have executed
and delivered the New ANSAN License in substantially the form attached
as Exhibit A hereto.
6.2. Conditions to Obligations of ANSAN. The obligations of ANSAN to
consummate the transactions contemplated hereby shall be subject to satisfaction
at the Closing of each of the following conditions, any of which may be waived
by ANSAN:
-4-
<PAGE>
(a) Representations and Warranties. The representations and
warranties of TITAN contained in this Agreement shall have been true
and correct in all material respects as of the date of this Agreement
and as of the date of the Closing. ANSAN shall have received a
certificate with respect to the foregoing signed on behalf of TITAN by
the Chief Executive officer of TITAN.
(b) Closing of the Merger Agreement. The transactions
contemplated by the Merger Agreement shall have closed.
(c) License Agreements. BAR-ILAN and TITAN shall have executed
and delivered the TITAN License in substantially the form attached as
Exhibit B hereto.
7. Representations and Warranties of TITAN.
7.1. Authority. TITAN has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of TITAN.
7.2. Ownership of Securities. TITAN is the sole record and beneficial owner
of the Securities and owns all right, title and interest in such Securities free
and clear of all liens, encumbrances and security interests and at the Closing
shall transfer title to such Securities free and clear of all liens,
encumbrances and security interests. TITAN does not own beneficially or of
record or have the right to purchase any securities of ANSAN other than the
Securities.
8. Representations and Warranties of ANSAN.
8.1. Authority. ANSAN has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of ANSAN, subject to approval of the stockholders
of ANSAN.
-5-
<PAGE>
8.2. Original ANSAN License. The Original ANSAN License is in full force
and effect, and to the knowledge of ANSAN, neither ANSAN nor BAR-ILAN is in
material breach of any term of the Original ANSAN License.
8.3. Patents. Except as disclosed in any filings by ANSAN with the
Securities and Exchange Commission pursuant to the Securities Act of 1933 or the
Securities Exchange Act of 1934 prior to the date hereof, ANSAN has no knowledge
of any pending or threatened litigation claiming that any claim of the Patent
Rights infringes the rights of any other person, and to ANSAN's knowledge there
has been no infringement of the Patent Rights by any other person. During the
term of the Original ANSAN License, ANSAN has satisfied all of its obligations
to maintain the Patent Rights. 9. Transfer of Know-How; Further Cooperation.
9.1. Transfer of Know-How. Within 30 days after the Closing, ANSAN shall
transfer to TITAN, free of charge, (a) copies of all pertinent documents
relating to the rights granted in the TITAN License, including all reports,
data, contracts and regulatory submissions and (b) all remaining Licensed
Product which has been formulated for non-topical use. ANSAN and TITAN shall
promptly after the Closing take all steps necessary to transfer the IND for AN-9
into TITAN's name and shall notify the FDA of such intention within 30 days
after the Closing. If necessary, the parties will cooperate in good faith to
establish an agreement for continuing support of the AN-9 product development
program. The parties will negotiate the specifics of such an agreement and the
reimbursement to be made to ANSAN for expenses incurred in connection therewith
on or before the Closing.
9.2. Further Cooperation. The parties recognize that they may both be
developing the same compound(s) within the same patent rights (referred to as
the Basic Patents in the New ANSAN License and the Patent Rights in the TITAN
License), so that each may develop intellectual property, such as know-how
and/or further patent rights, of value to both parties. Accordingly, the parties
agree that they will cooperate in good faith to establish an agreement for the
disclosure by each party to the other of intellectual property relevant to the
others Field, and for the cooperative development and/or cross-licensing of such
intellectual property.
-6-
<PAGE>
10. Miscellaneous.
10.1. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally or sent by
facsimile transmission, overnight courier, or certified, registered or express
mail, postage prepaid. Any such notice shall be deemed delivered when so
delivered personally or when sent by facsimile transmission (provided that an
appropriate indication of successful transmission is given by the sending
facsimile transmitter and a confirmation copy is sent by overnight courier), or
if sent by overnight courier, one day after deposit with an overnight courier,
or, if mailed, three days after the date of deposit in the United States mails
as follows:
If to ANSAN: Ansan Pharmaceuticals, Inc.
400 Oyster Point Boulevard, Suite 435
South San Francisco, California 94080
Attention: President
Telecopy No. (650) 635-0201
If to TITAN: Titan Pharmaceuticals, Inc.
400 Oyster Point Boulevard, Suite 505
South San Francisco, California 94080
Attention: President
Telecopy No. (650) 244-4956
Either party may, by notice given in accordance with this Paragraph to the
other party, designate another address or person for receipt of notices
hereunder.
10.2. Binding Effect; Amendment; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement is intended to
confer upon any person other than the parties hereto and their respective
successors and permitted assigns any rights or remedies whatsoever. This
Agreement may be amended only by an instrument in writing signed on behalf of
each of the parties. Neither party may sell, transfer or assign any of its
rights or obligations under this Agreement without the written consent of the
other party, which will not be unreasonably withheld.
-7-
<PAGE>
10.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
made between California residents and to be performed entirely within
California.
10.4. Expenses. All costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
10.5. Further Assurances. Each party will execute and deliver all such
further documents and instruments and take all such further actions as may be
necessary to consummate the transactions contemplated hereby.
10.6. Disputes. Any and all disputes between the parties arising from or
relating to this Agreement shall be referred to the Chief Executive Officers of
ANSAN and TITAN, respectively, and they shall endeavor to resolve such dispute
in good faith for a period of 45 days. If any such dispute has not been resolved
within such 45-day period, either party may file an action in a court of
competent jurisdiction.
10.7. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior and contemporaneous agreements, understandings, discussions and
correspondence between the parties with respect to the subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this License
Agreement, in duplicate, by proper persons thereunto duly authorized.
ANSAN TITAN
By: /s/ V.H.J. SHALSON By:/s/ SUNIL BHONSLE
---------------------------- -----------------------------
Name: Vaughan Shalson Name: Sunil Bhonsle
Title: President and CEO Title: Executive V.P. and COO
Date: November 24, 1997 Date: 11/24/97
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PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY AN * AND [ ], HAVE BEEN
SEPARATELY FILED WITH THE COMMISSION.
CONFIDENTIAL
SUBLICENSE AGREEMENT
THIS SUBLICENSE AGREEMENT, effective as of the 20th day of November,
1997, between TITAN PHARMACEUTICALS, INC., a corporation organized under the
laws of the State of Delaware and having its principal office at 400 Oyster
Point Blvd., Suite 505, South San Francisco, CA 94080 (hereinafter "TITAN"), and
NOVARTIS PHARMA A.G., a corporation organized under the laws of Switzerland and
having its principal office at Lichtstrasse 35, CH 4002 Basel, Switzerland
(hereinafter "NOVARTIS").
WITNESSETH THAT:
WHEREAS, TITAN is the exclusive worldwide licensee of HOECHST MARION
ROUSSEL, INC. ("HMRI"), under a License Agreement between TITAN and HMRI having
an Effective Date of December 31, 1996 (the "License Agreement"); and
WHEREAS, under such License Agreement, TITAN has rights with respect to
certain patents and patent applications, identified in Appendix A hereto, and
know-how relating to a compound known as Iloperidone; and
WHEREAS, NOVARTIS desires to obtain certain exclusive sublicenses from
TITAN under the aforesaid License Agreement, and TITAN is willing to grant to
NOVARTIS such sublicenses;
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein, and intending to be legally bound, the parties agree as
follows:
1. DEFINITIONS.
1.1 "HMRI" shall mean HOECHST MARION ROUSSEL, INC.
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1.2 "TITAN" shall mean TITAN PHARMACEUTICALS, INC.
1.3 "NOVARTIS" shall mean NOVARTIS PHARMA A.G.
1.4 "AFFILIATE" shall mean any corporation, firm, partnership
or other entity, whether de jure or de facto, which directly or indirectly owns,
is owned by or is under common ownership with a party to this Sublicense
Agreement, or HMRI, to the extent of more than fifty percent (50%) of the equity
(or such lesser percentage which is the maximum allowed to be owned by a foreign
corporation in a particular jurisdiction) having the power to direct the affairs
of the entity and any person, firm, partnership, corporation or other entity
actually controlled by, controlling or under common control with a party to this
Sublicense Agreement or HMRI.
1.5 "COMPETITIVE INDUSTRY STANDARD LEVEL" shall mean PRODUCT
shall be marketed by or on behalf of NOVARTIS, its AFFILIATES or SUBLICENSEES in
the countries of the TERRITORY where PATENTS are issued and enforced with at
least the same diligence that NOVARTIS would use in marketing its own products
in such countries, in a manner consistent with the effort devoted by the
pharmaceutical industry to products having the same or similar potential value
of PRODUCT in those countries when PRODUCT is launched.
1.6 "COMPOUND" shall mean the chemical compound known as
Iloperidone, whose more specific chemical name is
1-[4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-1-
piperidinyl]propoxy]-3-methoxyphenyl]ethanone, including any salts, hydrates,
solvates, and/or stereoisomers thereof, and only the metabolites listed in
Appendix B hereto, including any salts, hydrates, solvates and/or stereoisomers
of such metabolites.
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1.7 "EEA" shall mean the European Economic Area, which
consists of the EUROPEAN UNION and Iceland, Lichtenstein and Norway.
1.8 "EUROPEAN UNION" shall mean the member states of the
European Union, as may exist from time to time, which as of the date hereof
include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United
Kingdom.
1.9 "EXCLUSIVE" shall have the meaning specified in Section
2.1 hereof.
1.10 "FDA" shall mean the United States Food and Drug
Administration.
1.11 "FD&C ACT" shall mean the Federal Food, Drug and Cosmetic
Act (21 U.S.C. 301ff), as amended from time to time.
1.12 "FIELD" shall mean the treatment in humans of psychiatric
disorders, including psychotic disorders, and analgesia.
1.13 "IND" shall mean an Investigational New Drug Application.
1.14 "KNOW-HOW" shall mean all technical information and
know-how: (a) presently developed and owned or controlled by HMRI and its
AFFILIATES, (b) developed and owned or controlled by TITAN and its AFFILIATES
after the date of the License Agreement, and (c) developed and owned or
controlled by HMRI and its AFFILIATES, or TITAN and its AFFILIATES, after the
date hereof and included within this definition of "KNOW-HOW" by operation of
Section 2.3 hereof, which relates to COMPOUND or PRODUCT in the FIELD and which
constitutes a proprietary "trade secret" or other valid intellectual property
right under U.S. or other applicable law which is substantial, secret and
identifiable, including, without limitation,
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all biological, chemical, pharmacological, toxicological, clinical, regulatory,
analytical, quality control and manufacturing data and any other information
(whether technical or commercial) relating to COMPOUND or PRODUCT that may be
useful for the development, regulatory approval, manufacture and
commercialization of COMPOUND or PRODUCT.
1.15 "NDA" shall mean any and all applications (New Drug
Applications) submitted to the FDA under Sections 505, 507 or 512 of the FD&C
ACT and applicable regulations related to PRODUCT, including without limitation,
full NDAs, "paper" NDAs and abbreviated NDAs (ANDAs) and all amendments and
supplements thereto or equivalent applications in the EUROPEAN UNION.
1.16 "NET SALES" shall be calculated as follows: From the
gross invoice price of PRODUCT sold by NOVARTIS or its AFFILIATES or
SUBLICENSEES to independent, THIRD PARTIES in bona fide, arms-length
transactions there shall be subtracted, if not previously deducted in the amount
invoiced or received, (i) quantity and cash discounts actually allowed or taken,
(ii) freight, postage and shipping insurance allocated in accordance with
NOVARTIS' standard allocation procedure, (iii) customs duties and taxes, if any,
directly related to the sale, (iv) amounts repaid or credited by reason of
rejections, return of goods and retroactive price reductions mandated by or
granted in response to state, provincial or federal law or regulation and
specifically identifiable as relating to PRODUCT, (v) amounts incurred as a
result of governmental (or governmental agency) mandated rebate programs, (vi)
third party rebates and wholesaler chargebacks related to the sale of PRODUCT to
the extent actually allowed and (vii) as agreed by the parties in writing, any
other specifically identifiable amounts included in PRODUCT's gross
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sales that were or ultimately will be credited and that are substantially
similar to those listed hereinabove.
The computation of NET SALES shall not include sales between
or among a party and its AFFILIATES or SUBLICENSEES, except where such
AFFILIATES or SUBLICENSEES are end users. For purposes of this Sublicense
Agreement, sales of PRODUCT to independent distributors, wholesalers or other
parties who purchase and take title to PRODUCT are considered to be sales to
THIRD PARTIES. If PRODUCT is sold through intermediaries such as agents or
co-promoters who do not purchase and take title to PRODUCT, royalties shall be
due on NET SALES to THIRD PARTIES who purchase PRODUCT through such
intermediaries. It is agreed that there shall be no sales of COMPOUND to THIRD
PARTIES by or on behalf of NOVARTIS, its AFFILIATES or SUBLICENSEES. In the
event there are sales of COMPOUND to THIRD PARTIES by or on behalf of NOVARTIS,
its AFFILIATES or SUBLICENSEES, such sales shall be subject to the payment of
royalties by NOVARTIS to TITAN or HMRI (as the case may be) to the same extent
as payments of royalties are due on sales of PRODUCT pursuant to this Agreement.
1.17 "PATENTS" shall mean all patents and patent applications
set forth in Appendix A, including continuations, continuations-in-part,
divisions, patents of addition, reissues, re-examinations, renewals or
extensions thereof, along with supplementary protection certificates and other
administrative protection of any kind in the TERRITORY owned or controlled by
HMRI or its AFFILIATES to the extent they claim COMPOUND or PRODUCT, or use,
formulations or manufacture thereof, for use in the FIELD, but not any other
compound or use outside of the FIELD
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disclosed or claimed in those patents or patent applications. Any patent
relating to COMPOUND or PRODUCT for use in the FIELD which is issued during the
term of this Sublicense Agreement in any country of the TERRITORY shall
automatically be deemed as of the date of such issuance to be included in
PATENT, as defined hereunder.
1.18 "PRODUCT" shall mean any bulk or finished pharmaceutical
composition containing COMPOUND as the sole pharmaceutically active ingredient
for use in the FIELD.
1.19 "SEC" shall mean the United States Securities and
Exchange Commission.
1.20 "SUBLICENSEE" shall mean a THIRD PARTY (as defined below)
to whom a party sublicenses rights to manufacture and sell (or have manufactured
and sold) COMPOUND under PATENTS, but shall not include any THIRD PARTIES to
whom rights to manufacture COMPOUND have not been granted. Unless such party
grants to such THIRD PARTY the right to manufacture COMPOUND, the following
THIRD PARTIES shall not be considered SUBLICENSEES hereunder: agents,
distributors, wholesalers, subcontractors, co-marketers, co-promoters, partners
or joint venturers. SUBLICENSEES shall not include compulsory licensees as
described in Section 4.1(a).
1.21 "TERRITORY" shall mean all countries and territories of
the world except Japan; provided that any country(ies) in which this Sublicense
Agreement is terminated shall be removed from the scope of this definition.
1.22 "THIRD PARTY" shall mean any party other than a party to
this Sublicense Agreement or an AFFILIATE thereof.
2. GRANT.
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2.1 TITAN hereby grants to NOVARTIS an EXCLUSIVE sublicense in
the FIELD under the PATENTS (to the extent, but only to the extent, that such
patents or patent applications claim COMPOUND or PRODUCT or the manufacture,
formulation, or use thereof) and KNOW-HOW to develop, have developed, make, have
made, use, import, sell, offer for sale and have sold COMPOUND and PRODUCT in
the TERRITORY, subject to the terms and conditions of this Sublicense Agreement.
The foregoing sublicense shall include the right to sublicense, but only upon
HMRI's and TITAN's prior written consent, which consent shall not be
unreasonably withheld. Any such sublicense(s) shall impose upon SUBLICENSEE(S)
substantially the same terms and conditions as NOVARTIS assumes in this
Sublicense Agreement, except no such sublicense(s) shall be required to contain
obligations on the part of the SUBLICENSEE regarding payment of an upfront
license fee, milestone payments or the same or similar royalty rates. As used in
this Sublicense Agreement, the term "EXCLUSIVE" shall mean neither HMRI nor
TITAN or any of their respective AFFILIATES shall grant any other license to,
nor themselves exploit, the PATENTS and KNOW-HOW with respect to COMPOUND and
PRODUCT in the FIELD (unless otherwise specified herein) and be limited as
follows:
(a) With respect to all geographic areas in the
TERRITORY outside of the EEA, such sublicense shall be exclusive for the
duration and validity of the intellectual property rights constituting the
PATENTS and/or KNOW-HOW.
(b) With respect to all geographic areas in the
TERRITORY within the EEA, such sublicense shall be exclusive for the following
time periods:
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(i) For each of the countries within the EEA
where only PATENTS (and not KNOW-HOW) exist and are sublicensed to NOVARTIS
hereunder, the period of exclusivity for each such country shall be limited to
the duration of the relevant PATENTS in such country, provided that "PATENTS"
for purposes of the interpretation of this paragraph shall be limited to patents
existing, and patents issuing from patent applications existing, and patents
issuing from patent applications covering inventions existing as of the date of
the License Agreement;
(ii) For each of the countries within the
EEA where PATENTS and KNOW-HOW exist and are sublicensed to NOVARTIS hereunder,
the period of exclusivity for each such country shall be limited to the duration
of the relevant PATENTS in such country, provided that "PATENTS" for purposes of
the interpretation of this paragraph shall be limited to patents existing, and
patents issuing from patent applications existing, as of the date of the License
Agreement and, provided, further, that if the duration of such PATENTS is less
than ten (10) years from the date of first marketing of PRODUCT in the EEA but
the KNOW-HOW continues to be sublicensed hereunder, the duration of exclusivity
shall be for ten (10) years from the date of first marketing of PRODUCT in the
EEA; and
(iii) For each of the countries within the
EEA where KNOW-HOW (and not PATENTS) exists and is sublicensed to NOVARTIS
hereunder, the period of exclusivity for each such country shall be limited to
ten (10) years from the date of first marketing of PRODUCT in the EEA;
Thereafter, such sublicense within the EEA shall be on a nonexclusive
basis.
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(c) Notwithstanding the provisions of clause 2.1(b),
above, in the event that the TERRITORY (for whatever reason) does not include
all countries within the EEA, this Sublicense Agreement shall be deemed to be
amended in a reciprocal fashion to comply with applicable competition law
requirements, while preserving the EXCLUSIVE rights of the parties hereto to the
extent possible.
(d) For all purposes, such exclusivity shall be
subject to Section 2.3 hereof.
(e) HMRI and its AFFILIATES and licensed THIRD
PARTIES shall be entitled to utilize the PATENTS and KNOW-HOW in the FIELD
within the TERRITORY for the development and manufacture of COMPOUND and PRODUCT
for marketing, distribution and sale outside of the TERRITORY (where TITAN's
rights under the License Agreement have been terminated).
(f) TITAN and its AFFILIATES and SUBLICENSEES shall
also be entitled to utilize the PATENTS and KNOW-HOW in the FIELD within the
TERRITORY for the development and manufacture of COMPOUND and PRODUCT for
marketing, distribution and sale outside of the TERRITORY (in Japan and where
NOVARTIS' rights under this Sublicense Agreement have been terminated).
The duration of the sublicense granted by this Section 2.1 shall be
limited to the duration, on a country-by-country basis, of the intellectual
property rights which comprise the PATENTS and KNOW-HOW with respect to a
relevant country, provided that the termination of any portion of any
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sublicense shall be without prejudice to the requirement of NOVARTIS to pay
royalties pursuant to the terms of this Sublicense Agreement.
Notwithstanding the foregoing but subject to Sections 3.4 and 3.5
hereof, TITAN acknowledges and agrees that NOVARTIS shall as a matter of law
have the right to continue to use on a royalty-free, nonexclusive basis the
information which constitutes the PATENTS and KNOW-HOW on a country-by-country
basis in the TERRITORY for the FIELD after the PATENTS expire or cease to be
valid or enforceable and/or KNOW-HOW has entered into the public domain.
2.2 Subject to NOVARTIS' right of first negotiation under
Section 5.6 hereof and TITAN's right of first negotiation under Section 5.6 of
the License Agreement, with respect to uses or indications outside the FIELD,
HMRI shall have the right for either HMRI, its AFFILIATES or SUBLICENSEES to
develop, have developed, make, have made, use, import, sell, offer for sale and
have sold COMPOUND and PRODUCT for uses outside the FIELD.
2.3 Subject to Sections 2.3(a) and 2.3(b) below, HMRI and
TITAN also shall have the right to make and use COMPOUND or PRODUCT for the use
in the FIELD limited solely to further study, investigation or experimentation
purposes to further understand the category of compounds in the FIELD, how they
work and their comparison to other compounds. The reservations stated in this
provision shall be understood by the parties to comprise independent work by
HMRI, TITAN and their respective AFFILIATES, SUBLICENSEES or collaborators (who
are subject to obligations of nonuse and nondisclosure with respect thereto).
(a) In the event that the results of such work
described in the immediately preceding paragraph would be relevant to COMPOUND
or PRODUCTS with respect to the FIELD
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and could appropriately be included within the PATENTS and KNOW-HOW licensed
hereunder, and if HMRI or TITAN (as the case may be) has the legal right to do
so, all as determined in the reasonable discretion of HMRI or TITAN (as the case
may be), then if such work was conducted by HMRI, its AFFILIATES, SUBLICENSEES
or collaborators, HMRI shall offer such results to TITAN and, if such work was
conducted by TITAN, its AFFILIATES, SUBLICENSEES or collaborators, TITAN shall
offer such results to NOVARTIS. If such results are offered to TITAN by HMRI,
TITAN shall make such results available to NOVARTIS.
(b) If NOVARTIS notifies TITAN, within forty-five
(45) days after receiving such results (whether offered by HMRI to TITAN or
resulting from work conducted by TITAN, its AFFILIATES, SUBLICENSEES or
collaborators), that NOVARTIS wishes such results to be included within the
PATENTS and KNOW-HOW sublicensed hereunder, then with respect to results offered
by HMRI to TITAN, TITAN shall accept such results in writing, and such results
shall be included, as appropriate, within the PATENTS and KNOW-HOW sublicensed
hereunder. If such results are declined by NOVARTIS, and are not otherwise
accepted by TITAN if such results were offered to TITAN by HMRI, such results
may be used, assigned or licensed by HMRI or TITAN, as the case may be, subject
to provisions of the License Agreement.
(c) It is mutually understood by the parties that
independent experimental use of COMPOUND or PRODUCT or of results as described
in this Section 2.3 shall not be used in any way that could be damaging or
otherwise detrimental to COMPOUND or PRODUCT or their development, manufacture
or commercialization by TITAN, NOVARTIS or HMRI or their respective AFFILIATES
or SUBLICENSEES. Within twenty (20) days of HMRI's or TITAN's
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request, NOVARTIS shall provide to HMRI or TITAN, as the case may be, free of
charge reasonable quantities of COMPOUND or PRODUCT for such experimental use in
laboratory or animal studies. This does not prevent HMRI or TITAN from making
COMPOUND or PRODUCT for experimental use only in laboratory or animal studies.
2.4 TITAN grants to NOVARTIS a nonexclusive, worldwide
sublicense to make or use any analytical reference standards, intermediate or
metabolite of COMPOUND or PRODUCT not listed in Appendix B hereto which may be
claimed in PATENTS limited solely to making or using the COMPOUND or PRODUCT.
The foregoing sublicense shall include the right to sublicense, but only upon
HMRI's prior written consent, which consent shall not be unreasonably withheld.
Any such sublicense shall impose upon SUBLICENSEE(S) substantially the same
terms and conditions as NOVARTIS assumes in this Sublicense Agreement, except no
such sublicense(s) shall be required to contain obligations on the part of the
SUBLICENSEE regarding payment of an upfront license fee, milestone payments or
the same or similar royalty rates.
2.5 NOVARTIS shall promote, market and sell PRODUCT under a
registered NOVARTIS trademark(s) approved by HMRI, which approval shall not be
unreasonably withheld. NOVARTIS shall be responsible for the selection and
registration of such trademark(s) in all countries of the TERRITORY at its own
cost. In the event the sublicense granted hereunder is terminated in a
particular country, other than pursuant to Section 10.3 or as a result of
NOVARTIS' termination of this Sublicense Agreement for breach pursuant to
Section 10.5, and HMRI or its designee(s) exercises the right to promote, market
or sell PRODUCT in such country then upon HMRI's request (a) NOVARTIS shall
grant HMRI or its designee(s) a trademark license at a royalty
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to be negotiated in good faith (which royalty shall not be less than [ * ]
and no more than [ * ] on net sales of PRODUCT by HMRI and/or its designees) at
such time to use such trademark in connection with marketing PRODUCT in such
country, subject to reasonable quality control by NOVARTIS with respect to the
PRODUCT sold under this Section 2.5(a), or (b) HMRI or its designee(s) shall
select and register at HMRI's cost a trademark of its own in connection with the
marketing of PRODUCT in such country, provided such HMRI trademark is not in any
way confusingly similar to NOVARTIS' trademark. HMRI shall use an HMRI trademark
(rather than a NOVARTIS trademark) in promoting, marketing or selling PRODUCT in
any country that is a member of a free trade union or other economic grouping
(e.g., the EUROPEAN UNION, EEA, NAFTA, ASEAN and ANDEAN PACT countries) where
NOVARTIS is promoting, marketing or selling PRODUCT under a NOVARTIS trademark.
2.6 If NOVARTIS notifies TITAN in writing that NOVARTIS
(and/or its AFFILIATE(S)) is not willing or does not have the capability itself
or cannot enter into a Sublicense or other agreement (providing the necessary
expertise and resources) in country(ies) outside those covered by NAFTA and the
EUROPEAN UNION to: (a) develop COMPOUND or PRODUCT (as the case may warrant),
and (b) manufacture COMPOUND and/or market PRODUCT (as the case may warrant) at
a COMPETITIVE INDUSTRY STANDARD LEVEL at the date of PRODUCT approval in such
country(ies), then TITAN shall have the right to terminate the sublicense
granted by this Sublicense Agreement but only with respect to such country(ies),
unless the parties agree in writing to extend such time frame.
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2.7 If PRODUCT is not launched in each of the United States,
France and Germany, respectively, at a COMPETITIVE INDUSTRY STANDARD LEVEL by
NOVARTIS, its AFFILIATE and/or SUBLICENSEE within six (6) months after the date
of receiving the approvals necessary to commercialize PRODUCT in each of the
United States, Germany and France, respectively, NOVARTIS, TITAN and HMRI shall
review the progress of launch efforts, it being understood the parties, at the
request of either party, may review the progress of launch efforts prior to the
end of such six (6) month period. NOVARTIS shall keep TITAN informed on a
regular basis of the status of its launch efforts after receiving the approvals
necessary to commercialize PRODUCT in each of the United States, Germany and
France, respectively, until such time that launch is achieved in the United
States, Germany or France. If launch in each of the United States, France or
Germany, respectively, is not achieved within one (1) year after the date of
receiving the approvals necessary to commercialize PRODUCT in such country(ies)
(circumstances shall not include events of force majeure as defined in Section
13), or in any event within two (2) years after PRODUCT approval then the
sublicense granted by this Sublicense Agreement shall terminate, but only with
respect to the particular country where launch was not achieved within such one
(1) year or two (2) year time frame, as the case may be, unless the parties
agree in writing to extend such time frame (e.g., the parties shall discuss, in
such event, factors including but not limited to the necessity to obtain
approval of PRODUCT for its target indication(s)).
2.8 If an NDA or equivalent ex-U.S. regulatory approval in the
EUROPEAN UNION (Marketing Authorization Application via the Centralized
Procedure or marketing approvals
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for the member countries of the EUROPEAN UNION via the mutual recognition
procedure) for PRODUCT is not obtained within three (3) years of NOVARTIS' or
its AFFILIATE's or SUBLICENSEE's filing of an NDA or such other equivalent
ex-U.S. filing, and such failure is solely due to circumstances within NOVARTIS'
reasonable control, then the parties shall discuss the reasons and proposed
remedies for such failure in good faith; provided, however, that if the parties
are unable to agree on any such remedies, TITAN shall have the right to
terminate the sublicense granted by this Sublicense Agreement, but only with
respect to the United States or the EUROPEAN UNION where such approval was not
obtained, unless the parties agree in writing to extend such time frame. If,
however, NOVARTIS, TITAN and HMRI determine that such failure is due to
circumstances beyond the reasonable control of NOVARTIS (including without
limitation delays on the part of the regulatory agencies), the three (3) year
period shall be extended to take into account such circumstances, the duration
of any such extension to be mutually agreed.
2.9 Subject to the provisions of Section 2.9(d), TITAN shall
not be obligated to refund any upfront license fees and milestone payments paid
to TITAN with respect to any country(ies) which cease to be included within the
TERRITORY, and in the event that (i) TITAN, HMRI or their respective
AFFILIATE(S) or SUBLICENSEE(S) elects to commercialize PRODUCT or COMPOUND in
such country(ies) and (ii) NOVARTIS, its AFFILIATE(S) or SUBLICENSEE(S) has an
NDA filing in the United States or an equivalent filing in the EUROPEAN UNION,
then in consideration for use of any IND, NDA or other governmental approval or
associated developmental work held or owned by NOVARTIS related to COMPOUND or
PRODUCT:
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(a) At TITAN's request, and subject to Sections 6.3
and 11.5 hereof, NOVARTIS shall license or otherwise make available under
applicable law the benefit of such approvals or work to TITAN or an AFFILIATE or
THIRD PARTY designated by TITAN (which third party could be HMRI), who shall
thereafter have the rights to develop, register, manufacture, market and sell
COMPOUND and PRODUCT in such country(ies) utilizing such approvals or work, and
TITAN (or such AFFILIATE or THIRD PARTY) shall pay to NOVARTIS a royalty to be
negotiated in good faith at the time TITAN exercises such option, on net sales
of PRODUCT by TITAN or its designees in such country to equitably recognize the
value added by NOVARTIS to COMPOUND and/or PRODUCT through its development
efforts. Such royalty shall not be greater than [ * ] on net sales of PRODUCT by
TITAN or its designees. Upon expiration of PATENT in such country, only the
royalty paid to NOVARTIS for HMRI's and/or TITAN's use of the NOVARTIS trademark
under Section 2.5 shall be paid to NOVARTIS for so long as such trademark is
utilized. If a trademark license has not been granted to HMRI or TITAN in such
country, no royalty shall be paid to NOVARTIS upon expiration of PATENT.
(b) TITAN shall share equally with NOVARTIS any
upfront license fees, milestone payments or other payments such as prepaid
royalties received from a THIRD PARTY in connection with the exercise of such
option only. If NOVARTIS has not paid to TITAN the upfront license fee and all
of the milestone payments provided for in Sections 3.1(a) through (c), then
NOVARTIS' share of the amount shall be multiplied by a fraction, the numerator
of which is equal to the total of the payments that have been made by NOVARTIS
to TITAN under Sections 3.1(a) through (c), and the denominator of which is
equal to the total of the payments that
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NOVARTIS otherwise would have been required to pay to TITAN under Sections
3.1(a) through (c) had the sublicense not been terminated.
(c) Notwithstanding anything contained herein to the
contrary, TITAN shall not be required to pay to NOVARTIS a royalty on sales of
PRODUCT that, when added to the royalty payments for a license under the
NOVARTIS trademark that HMRI and/or TITAN may be required to pay to NOVARTIS
under Section 2.5, exceeds in the aggregate [ * ].
(d) If the circumstances leading up to the
termination of the Sublicense Agreement pursuant to Section 2.8 are due to any
misrepresentations, omissions (of information owned or controlled by HMRI or its
AFFILIATES or TITAN or its AFFILIATES as of the date hereof) or falsifications
with respect to such KNOW-HOW, information or data or fraud by HMRI or its
AFFILIATES or TITAN or its AFFILIATES, then subject to the following sentence,
TITAN shall repay to NOVARTIS, within ninety-five (95) days of such termination,
that portion of the upfront license fee and milestone payments TITAN had
received from NOVARTIS up to the date of such termination (including in the form
of NOVARTIS' purchase of TITAN convertible preferred stock). In the case of
misrepresentations, omissions (of information owned or controlled by HMRI or its
AFFILIATES as of the date hereof) or falsifications with respect to such
KNOW-HOW, information or data or fraud only by HMRI or its AFFILIATES, and a
termination of the License Agreement pursuant to Section 2.5 of the License
Agreement, TITAN shall be obligated to make the foregoing repayments to NOVARTIS
if, and only if, HMRI has repaid the upfront license fee and milestone payments
to TITAN under Section 2.6(d) of the License Agreement.
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2.10 In the event NOVARTIS or a SUBLICENSEE intends to seek a
co-promotion or co-marketing partner for PRODUCT in the United States, NOVARTIS
shall notify TITAN thereof in writing. TITAN shall then notify HMRI thereof, and
HMRI shall have a right of first negotiation with NOVARTIS or the SUBLICENSEE on
such a collaboration. If HMRI exercises its right of first negotiation, then
HMRI and NOVARTIS or the SUBLICENSEE shall negotiate in good faith for a period
of ninety (90) days from the date of notification by TITAN to HMRI. If the
negotiating parties are unable to enter into a separate definitive written
agreement regarding such collaboration by the end of such ninety (90) day
period, NOVARTIS or the SUBLICENSEE shall be free to enter into a collaboration
with any THIRD PARTY subject to all other terms of this Sublicense Agreement and
shall have no further obligation to negotiate with HMRI. For purposes of this
Section 2.10, the term "co-promotion or co-marketing partner" will not include
an independent contract field sales force that may be engaged by NOVARTIS or a
SUBLICENSEE.
3. PAYMENTS AND ROYALTIES.
3.1 As consideration for the sublicenses granted to NOVARTIS
by TITAN under this Sublicense Agreement, NOVARTIS shall make the following
payments to TITAN:
(a) An upfront license fee of Twenty Million Dollars
(U.S. $20,000,000) shall be paid by NOVARTIS to TITAN in cash within ten (10)
business days of both parties' execution of this Sublicense Agreement. TITAN
acknowledges that, as of the effective date of this Sublicense Agreement,
NOVARTIS has already paid to TITAN Five Million Dollars (U.S. $5,000,000) of
such Twenty Million Dollar (U.S. $20,000,0000) amount; therefore, as of the
effective date of this Sublicense Agreement, NOVARTIS is obligated to pay to
TITAN the
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remaining Fifteen Million Dollars (U.S. $15,000,000) of such Twenty Million
Dollar (U.S. $20,000,000) upfront license fee. Up to Five Million Dollars (U.S.
$5,000,000) of such Twenty Million Dollar amount may, at NOVARTIS' option, be
paid in the form of an equity investment made by NOVARTIS in TITAN convertible
preferred stock at a price per share as provided for in the Convertible
Preferred Stock Agreement between TITAN and NOVARTIS of even date herewith and
attached hereto as Appendix C and incorporated herein by reference. NOTE: the
immediately preceding sentence will be deleted from this Sublicense Agreement if
the parties do not enter into the Convertible Preferred Stock Agreement referred
to above simultaneously with the execution of this Sublicense Agreement. The
Twenty Million Dollar payment provided for herein shall, unless otherwise
expressly provided for herein, be non-refundable.
(b) A first development milestone payment of [ * ]
shall be payable by NOVARTIS to TITAN upon submission by TITAN to NOVARTIS of an
invoice therefor substantially in the form of the sample invoice attached hereto
as Appendix D (the "Invoice"), one time only upon the first NDA Filing (based on
a full and complete regulatory package and for these purposes not to include an
ANDA or "Paper" NDA) for PRODUCT in the FIELD in the United States (New Drug
Application) or the Initial Filing in Europe (Marketing Authorization
Application via the Central Procedure, or the mutual recognition procedure) by
NOVARTIS, its AFFILIATE or SUBLICENSEE. As used in this Section, "NDA Filing" or
"Initial Filing in Europe" (as the case may be) shall mean the notification in
writing to NOVARTIS, its AFFILIATE or SUBLICENSEE from the FDA or an equivalent
EUROPEAN UNION regulatory authority (via the Centralized Procedure or the mutual
recognition procedure) that the NDA or Initial
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Filing in Europe (as the case may be) is sufficiently complete to permit a
substantive review. Such milestone payment shall be paid in cash by NOVARTIS
directly to HMRI within seven (7) business days of the date of such first
filing, and NOVARTIS shall notify TITAN of such payment concurrently with such
payment to HMRI. The [ * ] payment provided for herein shall, unless otherwise
expressly provided for herein, be non-refundable.
(c) Following prior receipt by NOVARTIS of TITAN's
Invoice therefor, a second development milestone payment of [ * ] which shall be
payable one time only by NOVARTIS to HMRI as follows: (i) [ * ] shall be paid in
cash by NOVARTIS directly to HMRI, within seven (7) business days of receipt by
NOVARTIS, its AFFILIATE or SUBLICENSEE of the FDA approval letter or the
regulatory agency for the EUROPEAN UNION (Marketing Authorization via the
Centralized Procedure or mutual recognition procedure), that PRODUCT is approved
for marketing and commercialization by NOVARTIS , its AFFILIATE or SUBLICENSEE
(or their designee) for a major indication having an approval comparable to the
principal indication(s) of leading competing products in the FIELD, and NOVARTIS
shall notify TITAN of such payment concurrently with such payment to HMRI; and
(ii) [ * ] shall be paid in cash by NOVARTIS directly to HMRI within six (6)
months after receipt of such notification, and NOVARTIS shall notify TITAN of
such payment concurrently with such payment to HMRI. The [ * ] payment provided
for herein shall, unless otherwise expressly provided for herein, be
non-refundable.
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(d) NOVARTIS shall notify TITAN in writing thirty
(30) business days prior to NOVARTIS' estimated achievement of each milestone
event described in Sections 3.1(b) and 3.1(c)(i) above. Upon the receipt of such
notification, TITAN shall send NOVARTIS an Invoice for the milestone payment due
as a result of the achievement of such milestone event, and NOVARTIS shall make
each such payment within seven (7) business days of the achievement of the
milestone event for which such payment is due.
3.2 (a) Unless TITAN instructs NOVARTIS in writing otherwise,
all cash payments by NOVARTIS to TITAN (including, without limitation, upfront
payments, milestone payments, and royalties) shall be made by bank wire transfer
as follows:
Bank of America-San Francisco
ABA #121000358
Titan Pharmaceuticals, Inc.
Account #1493-0-04020
(b) All cash payments by NOVARTIS to HMRI (including,
without limitation, milestone payments and royalties) shall be made by bank wire
transfer as follows:
Citibank-New York
ABA#021000089
Hoechst Marion Roussel, Inc.
Account #-40552555
(c) At least two (2) business days prior to the
planned wire transfer to either of the above accounts, NOVARTIS shall notify
TITAN's Chief Financial Officer by facsimile (650) 244-4956, Attention: Mr.
Robert Farrell) and HMRI's Treasurer (if applicable) by facsimile (816-966-3847,
Attention: Cash Manager) of the amount and date the cash shall be transferred.
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(d) In the event of a late payment hereunder by
NOVARTIS to TITAN (or HMRI, as the case may be), NOVARTIS shall pay to TITAN (or
HMRI, as the case may be) interest based on the prime rate as stated in The Wall
Street Journal, New York edition, on the date such payment is due (or the
immediately preceding business date if such payment date is not a business date)
plus two percent (2%) on the outstanding balance until such balance, including
interest, is paid in full to TITAN. The acceptance of such late payment shall
act as a waiver of any rights TITAN may have hereunder due to a breach by
NOVARTIS relating solely to such payment being made late.
3.3 As consideration for the sublicense granted to NOVARTIS in
this Sublicense Agreement, NOVARTIS shall pay to TITAN, in those countries
where, and for the period, PATENTS claiming a priority date of May 19, 1989 and
December 29, 1989 in a particular country in the TERRITORY for which a patent
had been granted validly claiming Iloperidone or the manufacture, formulation or
the use thereof for use in the FIELD exist: (a) a [ * ] royalty on annual NET
SALES of PRODUCT in the TERRITORY up to [ * ], and (b) a [ * ] royalty on annual
NET SALES of PRODUCT in the TERRITORY in excess of [ * ]; in each case on
NOVARTIS', its AFFILIATES' and SUBLICENSEES' annual NET SALES of PRODUCT in the
TERRITORY.
3.4 (a) In order to spread royalty payments hereunder over a
sufficient period of time, in each of those countries in the TERRITORY where
PATENTS claiming a priority date of May 19, 1989 and December 29, 1989 in a
particular country for which a patent had been granted
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validly claiming Iloperidone or the manufacture, formulation or use thereof for
use in the FIELD have expired, NOVARTIS' obligations to pay royalties for use of
PATENTS in such country shall cease, and NOVARTIS and/or any of its SUBLICENSEES
shall pay directly to HMRI a royalty for KNOW-HOW not relating to manufacturing
(whether or not such KNOW-HOW continues as a valid intellectual property right
or is in the public domain) of [ * ] on NOVARTIS', its AFFILIATES' and any
SUBLICENSEES' annual NET SALES of PRODUCT in each such country for a period of
ten (10) years after the expiration of the final remaining PATENT in each such
country. After the end of such ten (10) year period, no further royalties
arising from sales of PRODUCT in such country shall be due to HMRI and NOVARTIS
shall be entitled to continue to use the KNOW-HOW on a fully-paid, irrevocable
basis in accordance with Section 10.3.
(b) In the event a THIRD PARTY's generic version of
Iloperidone is actively marketed in a process patent country (that is, any
country in which only protection in relation to processes for the manufacture of
Iloperidone has been obtained and not protection for Iloperidone as a new
chemical entity per se) in the TERRITORY where a PATENT(s) claiming a priority
date of May 19, 1989 and December 29, 1989 has been granted validly claiming
Iloperidone or the manufacture, formulation or use thereof for use in the FIELD
exists, then subject to Sections 3.4(c) and (d) below, the royalty rate that
NOVARTIS shall pay to TITAN on NOVARTIS' or its AFFILIATE's or SUBLICENSEE's
annual NET SALES of PRODUCT in that process patent country shall be [ * ] until
such PATENT(s) expires, provided:
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(i) NOVARTIS has obtained, or has made every effort
to obtain, the maximum allowable period of exclusivity to
which it is entitled based on PRODUCT's registration data in
that process patent country to the extent such exclusivity is
available; and
(ii) The PARTIES and HMRI, in accordance with Article
8 of this Sublicense Agreement, will implement an appropriate
strategy for addressing the commercialization of Iloperidone
by said THIRD PARTY. Unless otherwise agreed to by the
PARTIES, NOVARTIS shall at its sole cost be obligated to
diligently enforce PATENT(s) until there is a binding,
unappealable judicial determination as to whether the
manufacture, formulation or use of such generic version of
Iloperidone infringes PATENT(s) or until it is demonstrated to
the satisfaction of both PARTIES that PATENT(s) are not being
infringed in such country
(c) If it is demonstrated to the satisfaction of both PARTIES.
or the binding, unappealable judicial determination under Section 3.4(b)(ii)
holds that PATENT(s) are not being infringed in such process patent country, the
royalty rate that NOVARTIS shall pay to TITAN on NOVARTIS' or its AFFILIATE's or
SUBLICENSEE's annual NET SALES of PRODUCT in that process patent country shall
continue to be [ * ] until such PATENT(s) expires.
(d) If the binding, unappealable judicial determination under
Section 3.4(b)(ii) holds that PATENT(s) are being infringed in such process
patent country, NOVARTIS shall take reasonable steps to have enforced such
determination. If as a result, the commercialization of Iloperidone by the THIRD
PARTY in that country is discontinued:
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(i) the royalty rate(s) that NOVARTIS shall pay to
TITAN on NOVARTIS' or its AFFILIATE's or SUBLICENSEE's annual
NET SALES of PRODUCT in that process patent country shall be,
commencing on the later of: (A) the date such binding,
unappealable judicial determination is rendered, and (B) the
date (if any) specified in such determination that
commercialization of such THIRD PARTY generic version of
PRODUCT is to be discontinued, those royalty rates provided
for in Section 3.3 until such PATENT(s) expires; and
(ii) NOVARTIS shall repay to TITAN, within thirty
(30) days after the later of: (A) the date such binding,
unappealable judicial determination was rendered, and (B) the
date (if any) specified in such determination that
commercialization of such THIRD PARTY generic version of
PRODUCT is to be discontinued, an amount equal to the
difference between the royalties that NOVARTIS would have paid
to TITAN under Section 3.3, and the amount of royalties that
NOVARTIS actually paid to TITAN at the [ * ] rate, for the
period commencing on the date the royalty rate for that
process patent country was reduced to [ * ] pursuant to
Section 3.4(b), and ending on the later of: (A) the date such
binding, unappealable judicial determination was rendered, and
(B) the date (if any) specified in such determination that
commercialization of such THIRD PARTY generic version of
PRODUCT is to be discontinued.
(e) After PATENT(s) in any process patent country expires,
NOVARTIS and/or its SUBLICENSEE shall pay directly to HMRI royalties as provided
for in Section 3.4(a).
3.5 As consideration for the sublicense granted to NOVARTIS
under this Sublicense Agreement in those countries in the TERRITORY for which
(a) a PATENT application
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for COMPOUND or PRODUCT is pending or (b) no PATENT application has been filed
or (c) PATENTS have been abandoned or been held invalid or unenforceable by a
decision of a court or tribunal of competent jurisdiction from which no appeal
is or can be taken (collectively, "Non-Patent Countries"), NOVARTIS shall pay to
TITAN, on a country-by-country basis, a [ * ] royalty for KNOW-HOW not relating
to manufacturing (whether or not such KNOW-HOW continues as a valid intellectual
property right or is in the public domain) on NOVARTIS', its AFFILIATES' and any
SUBLICENSEES' annual NET SALES of PRODUCT in the Non-Patent Countries for a
period of five (5) years from the date of the first commercial sale of PRODUCT
in each such country by NOVARTIS, its AFFILIATES or SUBLICENSEES. After the end
of such five (5) year period, no further royalties arising from sales of PRODUCT
in such country shall be due. However, with respect to Section 3.5(a) or (b), if
at any time during or after such five (5) year period a PATENT for COMPOUND or
PRODUCT is issued in such country, subject to Section 3.4, NOVARTIS shall pay to
TITAN, from the date the PATENT was issued, the same royalties as provided for
in Sections 3.3(a) and (b) above. Upon expiration of NOVARTIS' obligation to pay
a royalty under such PATENT, notwithstanding Section 3.4, a [ * ] royalty for
KNOW-HOW not relating to manufacturing (whether or not such KNOW-HOW continues
as a valid intellectual property right or is in the public domain), on NET SALES
of PRODUCT in such country, shall be paid by NOVARTIS and/or any of its
SUBLICENSEES directly to HMRI for a period of five (5) years after which
NOVARTIS shall be entitled to continue to use the KNOW-HOW on a fully-paid,
irrevocable basis in accordance with Section 10.3.
4. COMPULSORY LICENSES AND THIRD PARTY LICENSES.
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4.1 (a) In the event that during the term of this Sublicense
Agreement a governmental agency in the TERRITORY grants or compels HMRI and/or
TITAN to grant a license to any THIRD PARTY for COMPOUND or PRODUCT in a
country(ies), it is the intent of the parties that NOVARTIS not be placed at a
competitive disadvantage as a result of a lower royalty rate being granted to a
THIRD PARTY compulsory licensee. Therefore, in the event TITAN or HMRI is
compelled to grant a license to a THIRD PARTY, TITAN, NOVARTIS and HMRI will
meet to discuss in good faith equitable arrangements, which could include
adjustments to NOVARTIS' original royalty rates in Section 3.3 of this
Sublicense Agreement which are to be paid on NET SALES of PRODUCT in such
country, to accomplish the intent of TITAN and NOVARTIS set forth above. In such
discussions, consideration will be given to TITAN's obligations to HMRI under
Section 4.1(a) of the License Agreement.
(b) If a governmental authority in a country in the
TERRITORY imposes a maximum royalty rate, such that lower royalty rates than
would otherwise apply under this Sublicense Agreement are mandated in such
country, then the royalty rates provided for herein shall be reduced to equal
such lower rates for sales of PRODUCT in such country for the period such lower
royalty rate is required by any governmental authority and shall cease when
NOVARTIS' royalty payment obligations cease under this Sublicense Agreement.
4.2 If, during the term of this Sublicense Agreement, HMRI and
NOVARTIS agree that a patent(s) of a THIRD PARTY exists in the TERRITORY
covering the manufacture, use or sale of COMPOUND or PRODUCT, and if it should
prove, in the reasonable judgment of NOVARTIS and HMRI, impractical or
impossible for NOVARTIS or its AFFILIATES or
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SUBLICENSEES to continue the activity or activities sublicensed hereunder in the
FIELD without obtaining a royalty-bearing license from such THIRD PARTY under
such patent(s) or if NOVARTIS and HMRI otherwise agree it is desirable for HMRI
to acquire any THIRD PARTY patent or license in connection with the development
or manufacture of COMPOUND or PRODUCT covered by PATENTS in the TERRITORY, then
in either case the provisions of Section 8.8(c) shall apply.
4.3 If, after attempting in good faith to resolve the issue
relating to licensing THIRD PARTY patents in Section 4.2 between themselves,
NOVARTIS and HMRI are unable to agree within ninety (90) days as to whether it
is impracticable or impossible for NOVARTIS , its AFFILIATES or SUBLICENSEES to
continue the activity or activities sublicensed hereunder without obtaining a
royalty-bearing license from a THIRD PARTY, the issue shall be submitted to a
disinterested, competent and experienced patent attorney reasonably acceptable
to both NOVARTIS and HMRI for resolution. If NOVARTIS and HMRI cannot agree on
the selection of such patent attorney, then each party shall select a patent
attorney and the selected patent attorneys shall select a mutually acceptable
patent attorney who will determine whether such THIRD PARTY rights materially
inhibit NOVARTIS' ability to manufacture, distribute or sell COMPOUND or
PRODUCT. The compensation to, and expense of such patent attorney shall be borne
by the party whose position is not upheld by such patent attorney (that is, for
example, if the patent attorney determines that such THIRD PARTY rights do not
materially inhibit NOVARTIS' ability to manufacture, distribute or sell COMPOUND
or PRODUCT, then the costs of such patent attorney shall be borne by NOVARTIS).
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5. DEVELOPMENT.
5.1 Upon the signing of this Sublicense Agreement, NOVARTIS
shall have full legal and financial responsibility for all costs that are
incurred and all activities that are undertaken after the signing of this
Sublicense Agreement, which are related to development, safety and required
periodic reporting to the FDA and equivalent ex-U.S. regulatory agencies,
marketing, regulatory approvals, price registrations, and other activities
required by NOVARTIS or its SUBLICENSEE(S) (or their respective agents or
distributors) to obtain appropriate government approvals for, and to
commercialize, COMPOUND and PRODUCT in the TERRITORY. Other than as expressly
provided for in Section 5.4, NOVARTIS shall not assume, nor shall NOVARTIS be
liable for, any costs or activities (whether scientific, financial or otherwise)
relating to the COMPOUND or PRODUCT that were incurred or undertaken prior to
the signing of this Sublicense Agreement (including without limitation any
costs, expenses, damages, losses, fines, penalties or the like that may be
awarded or assessed after the signing of this Sublicense Agreement, but which
arise out of events and activities that occurred prior to the signing of this
Sublicense Agreement).
5.2 Provided that the AFFILIATES, SUBLICENSEES and other THIRD
PARTIES agree to substantially the same terms of confidentiality in Section 6.4
hereof, NOVARTIS may appoint such AFFILIATES, SUBLICENSEE(S) and other THIRD
PARTIES to perform any and all development activities necessary to obtain
government approvals for PRODUCT in the TERRITORY. The appointment of any
SUBLICENSEE shall require HMRI's prior written consent, which consent shall not
be unreasonably withheld.
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5.3 NOVARTIS shall, in a manner consistent with the effort
NOVARTIS devotes to its own products having the same or similar potential value
as PRODUCT, exercise its reasonable efforts and diligence in developing and
commercializing PRODUCT, and in undertaking those investigations and actions
required to obtain appropriate governmental approvals to manufacture COMPOUND
and market PRODUCT in the TERRITORY. All such activity shall be undertaken at
NOVARTIS' expense. TITAN shall arrange with HMRI to provide assistance or
consultation at NOVARTIS' expense in support of the development of COMPOUND or
PRODUCT, but HMRI in its discretion may limit such assistance and consultation.
5.4 All direct costs incurred by, or on behalf of, TITAN
relating to the development and registration of COMPOUND and PRODUCT in the
TERRITORY will be reimbursed to TITAN by NOVARTIS within thirty (30) days of
execution by both parties of this Sublicense Agreement. The parties agree that
direct costs incurred by or on behalf of TITAN through August, 1997 are
approximately one million seven hundred thousand dollars ($1,700,000).
Additional direct costs estimated to be incurred by or on behalf of TITAN
through date of execution of the Heads of Agreement between the parties dated
October 21, 1997, are approximately three hundred thousand dollars ($300,000).
Additional direct costs estimated to be incurred by or on behalf of TITAN in the
period from the date of the Heads of Agreement until the effective date of this
Sublicense Agreement will be determined by the scope of that part of the Phase
III clinical program for PRODUCT that was initiated by TITAN prior to the date
hereof and called "Clinical Protocol 300", but will not exceed one million
dollars ($1,000,000). The PARTIES further agree that:
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(a) TITAN will be informed by NOVARTIS on a timely
and regular basis of the development, registration and commercialization of
COMPOUND and PRODUCT in the TERRITORY, and will have an opportunity to regularly
meet with NOVARTIS and provide input into the development and registration
process, and
(b) all of TITAN's contractual obligations to THIRD
PARTIES involved in the development and registration process for the COMPOUND
and PRODUCT (including Contract Research Organizations (CROs) existing as of the
date of this Sublicense Agreement, which CROs are identified in Appendix E),
will be honored to the extent they are not inconsistent with NOVARTIS' Standard
Operating Procedures. However, if any such contractual obligation is terminated
by or at the request of NOVARTIS, NOVARTIS will be responsible for the payment
of any amounts that may be due as a result of such termination.
(c) NOVARTIS shall be solely responsible for
negotiation of contracts with any CROs and other organizations it desires to
work on development activities relating to COMPOUND and/or PRODUCT and NOVARTIS
shall bear all legal and financial responsibility under such contracts.
5.5 Any inventions or discoveries or improvements which arise
from NOVARTIS', its AFFILIATES' or SUBLICENSEES' work relating to the
development and/or manufacture of the COMPOUND and/or PRODUCT shall be owned by
NOVARTIS , but shall be licensed to HMRI, at HMRI's option on a worldwide,
nonexclusive, perpetual basis, at a license fee and/or royalty to be negotiated
at such time. Furthermore, it is agreed that NOVARTIS and TITAN's sublicensee
for Japan (if any) shall license to each other, for use in the other party's
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TERRITORY in the FIELD, on a non-exclusive royalty-free basis, any discoveries,
improvements or inventions relating to COMPOUND and PRODUCT, and TITAN will
require such reciprocal rights for NOVARTIS from TITAN's sublicensee for Japan
(if any). To the extent permitted under the License Agreement, NOVARTIS shall
have the right to license or sublicense, as the case may be, its discoveries,
improvements or inventions.
5.6 (a) In the event uses or indications for COMPOUND outside
the FIELD are identified by HMRI, TITAN or NOVARTIS, NOVARTIS shall notify TITAN
of such other uses or indications if identified by NOVARTIS, and TITAN shall
notify NOVARTIS of such other uses or indications if identified by HMRI or
TITAN. If so desired by NOVARTIS, TITAN shall transfer to NOVARTIS, TITAN's
right of first negotiation under Section 5.6 of the License Agreement, for a
separate license from HMRI to develop and commercialize such other uses and
indications under terms to be negotiated in good faith at such time. Such right
of first negotiation shall mean that HMRI shall offer to NOVARTIS the right to
develop and commercialize such uses and indications under a separate license,
the financial terms of which may be no less favorable than the financial terms
provided for in the License Agreement, except that NOVARTIS shall not be
required to pay to HMRI or TITAN any upfront license fees or milestone payments.
If TITAN has transferred to NOVARTIS such right of first negotiation, HMRI and
NOVARTIS shall negotiate in good faith for a period of ninety (90) days and, if
the parties are unable to enter into a separate definitive written agreement
regarding such license by the end of such ninety (90) day period, HMRI or an
AFFILIATE shall be free to develop and commercialize such other use or
indication itself or to enter
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into a license or other agreement with TITAN or a THIRD PARTY, and shall have no
further obligations to negotiate with NOVARTIS or further license obligations
with respect thereto.
(b) If NOVARTIS acquires the right to develop and
commercialize a use or indication outside the FIELD for the COMPOUND pursuant to
Section 5.6(a), this Sublicense Agreement shall be amended by the parties to
include such other use or indication, such that the FIELD will be expanded to
include such other use or indication, and NOVARTIS will be obligated to develop
and commercialize such other use or indication in the TERRITORY to the extent
required under this Sublicense Agreement.
(c) To the extent TITAN acquires the right to develop
and commercialize a use or indication outside the FIELD for the COMPOUND under
the License Agreement, such other use or indication will be offered first to
NOVARTIS for the TERRITORY. If NOVARTIS accepts such offer, the parties will
negotiate in good faith an amendment to this Sublicense Agreement to include
such other use or indication, such that the FIELD will be expanded to include
such other use or indication, and NOVARTIS will be obligated to develop and
commercialize such other use or indication in the TERRITORY to the extent
required under this Sublicense Agreement. If NOVARTIS does not accept such other
use or indication, TITAN will be free to offer such other use or indication to a
THIRD PARTY, even in the TERRITORY, without further obligation to NOVARTIS with
respect to such other use or indication; provided, however, that TITAN, if
requested and with the support of NOVARTIS, will use reasonable efforts to
ensure that such "new product" can be commercially differentiated in such a way
(formulation, dosage, delivery system and/or other measures of distinctiveness)
as to discourage interchangeability and free substitution
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between such "new product" and PRODUCT on the marketplace. If a license to such
other use or indication is granted to a THIRD PARTY, it will be limited solely
to such other use or indication, and the THIRD PARTY licensee will not have the
right to develop or sell COMPOUND in the FIELD in the TERRITORY during the term
of this Sublicense Agreement.
(d) If neither TITAN nor NOVARTIS acquires the right
to develop and commercialize such other use or indication outside the FIELD for
COMPOUND under the License Agreement, HMRI or an AFFILIATE shall be free to
develop and commercialize such other use or indication itself or to enter into a
license or other agreement with a THIRD PARTY, and shall have no further
obligations to negotiate with TITAN or NOVARTIS or further license obligations
with respect thereto.
5.7 In addition to that which is required under Section
5.4(a), NOVARTIS shall provide to TITAN regular written reports at least every
six (6) months setting forth significant developments and improvements,
including the status and progress of the development and/or registration
activities, that affect COMPOUND or PRODUCT.
5.8 NOVARTIS, or its SUBLICENSEES, shall promptly advise TITAN
in writing upon the submission and filing for government regulatory approval to
manufacture and market PRODUCT, and upon the receipt of government regulatory
approval to market PRODUCT, in each case in each country in the TERRITORY, and
shall commence marketing PRODUCT in such country in accordance with Section 5.3.
5.9 Subject to applicable laws and regulations, labeling on
all PRODUCT sold by or on behalf of NOVARTIS pursuant to this Sublicense
Agreement, and all advertising,
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marketing and promotional materials used in connection therewith, will identify
TITAN as the licensor of the PRODUCT.
5.10 If at any time during the term hereof a product is
developed by NOVARTIS or any of its AFFILIATES or SUBLICENSEES, which product
contains COMPOUND and one or more other pharmaceutically active ingredients for
use in the FIELD (a "Combination Product"), TITAN shall negotiate in good faith
with HMRI an amendment to the License Agreement, which amendment will provide,
inter alia, for how royalties to be paid by TITAN to HMRI for NET SALES of such
Combination Product will be calculated and for how long such royalties shall be
paid. After such amendment to the License Agreement has been executed by TITAN
and HMRI, this Sublicense Agreement shall be similarly amended by TITAN and
NOVARTIS to provide for such Combination Product.
6. EXCHANGE OF INFORMATION AND CONFIDENTIALITY.
6.1 Upon the signing of this Sublicense Agreement, TITAN shall
deliver to NOVARTIS, all available KNOW-HOW, documents, information and data
which is owned or controlled by TITAN and its AFFILIATES, which may be
reasonably expected to assist NOVARTIS in developing, registering, manufacturing
and marketing COMPOUND and PRODUCT in the TERRITORY. After the execution of this
Sublicense Agreement, there shall be a sixty (60) day transition period during
which TITAN shall provide, at its own cost, reasonable resources, expertise, and
documents to effectively transfer the KNOW-HOW and development activity to
NOVARTIS. Upon TITAN's receipt of the upfront license fee referred to in Section
3.1(a) hereof, NOVARTIS and TITAN each shall promptly provide written
notification to the FDA that TITAN
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assigns and that NOVARTIS assumes sponsorship of the U.S. IND No. 36,827 (as
specified in 21 CFR 314.72). Within ten (10) days after the date of such written
notification, TITAN shall transfer the U.S. IND for COMPOUND or PRODUCT to
NOVARTIS. Until such transfer is made, NOVARTIS shall have the right to make
reference to such COMPOUND or PRODUCT owned or controlled by TITAN or its
AFFILIATES. Furthermore, upon TITAN's receipt of the upfront license fee
referred to in Section 3.1(a), TITAN shall arrange for the transfer by HMRI to
NOVARTIS of Canadian IND Control No. 27740.
6.2 NOVARTIS shall have EXCLUSIVE use, subject to the terms of
this Sublicense Agreement and in particular Section 2.3, of all KNOW-HOW,
documents, information, data and material for the development, registration,
manufacture and marketing of COMPOUND and PRODUCT for use in the FIELD in the
TERRITORY. HMRI (under the License Agreement), TITAN and their respective
AFFILIATES shall keep confidential all KNOW-HOW, documents, information and data
in their possession or received from or generated by or on behalf of NOVARTIS
that is not already in the public domain relating to COMPOUND and PRODUCT
regarding the use in the FIELD with the same level of care TITAN uses for its
own confidential information. Upon TITAN's request during the term of this
Sublicense Agreement, NOVARTIS shall deliver to TITAN a copy of all such
information and data in a form to be mutually agreed upon, within thirty (30)
days after TITAN's request, it being understood and agreed that any and all such
information and data will be made available by TITAN to HMRI, upon HMRI's
request.
6.3 Subject to the confidentiality obligations of this Article
6, NOVARTIS shall make available and HMRI and TITAN shall be able to freely use
KNOW-HOW and documents,
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information and data relating to COMPOUND and/or PRODUCT disclosed or generated
by NOVARTIS, its AFFILIATES and SUBLICENSEES and applications for government
approvals (United States or EUROPEAN UNION), reports on the status and progress
of the development of COMPOUND or PRODUCT and the like in any country(ies)
deleted from the TERRITORY and as to which this Sublicense Agreement has been
terminated pursuant to the terms hereof. Furthermore, if TITAN grants a
sublicense(s) to a THIRD PARTY(IES) for Japan, NOVARTIS agrees to share with
such THIRD PARTY(IES) any data and information (including pre-clinical and
clinical results) requested by such THIRD PARTY (IES) that have been generated
by or on behalf of NOVARTIS regarding the COMPOUND and PRODUCT and all
regulatory submissions relating thereto, but only to the extent such THIRD
PARTY(IES) agree to share with NOVARTIS, if requested, all such similar data and
information generated by or on behalf of such THIRD PARTY(IES); provided,
however, that should NOVARTIS or such THIRD PARTY(IES) submit to any regulatory
agency(ies) said data generated by the other, or modifications thereof, the
benefiting party shall compensate the party supplying said data, for the
supplying party's contributions to the data required for the benefiting party's
regulatory submissions, which compensation shall be agreed to in good faith.
6.4 During the period of time during which NOVARTIS is
obligated to pay royalties hereunder and for seven (7) years thereafter,
irrespective of any termination with respect to a particular country or
countries in the TERRITORY, NOVARTIS shall not reveal or disclose to THIRD
PARTIES or use for any purpose other than to perform its obligations herein any
Confidential Information (as defined below) without first obtaining the written
consent of TITAN,
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except as may be otherwise provided herein, or for securing essential or
desirable authorizations, privileges, licenses, registration or rights from
governmental agencies, or is required to be disclosed to a governmental agency
or is necessary to file or prosecute PATENT applications concerning COMPOUND or
PRODUCT or to carry out any litigation concerning COMPOUND or PRODUCT; provided,
however, that NOVARTIS notifies TITAN in writing in a reasonably sufficient time
frame prior to making such disclosure that NOVARTIS intends to make such
disclosures and the details thereof, and NOVARTIS seeks confidential treatment
where available of such Confidential Information from such governmental
agencies. This confidentiality obligation shall not apply to such information
which is or becomes a matter of public knowledge through no fault of NOVARTIS',
or is already in the possession of NOVARTIS as evidenced by written records, or
is disclosed to NOVARTIS by a THIRD PARTY having the right to do so, or is
subsequently and independently developed by employees of NOVARTIS or its
AFFILIATES who had no knowledge of the Confidential Information. NOVARTIS shall
take reasonable measures to assure that no unauthorized use or disclosure is
made by others to whom access to such information is granted. As used herein,
"Confidential Information" means, any confidential or proprietary information of
HMRI or TITAN or their AFFILIATES, including any present or future formulas,
research project, work in process, inventions, procedures, development,
scientific, engineering, manufacturing, marketing, business or financial plan or
records, products, sales, suppliers, customers, or investors, whether such
confidential or proprietary information is in oral, written, graphic or
electronic form (including all copies in whole or in part of any of the
foregoing) and which derives value from being known to the disclosure or owner.
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6.5 After transfer of the United States and Canadian INDs to
NOVARTIS under Section 6.1, TITAN and NOVARTIS shall cooperate with respect to
the exchange of adverse event and safety information associated with COMPOUND
and PRODUCT, and such information shall be coordinated by NOVARTIS' central
Clinical Safety and Epidemiology organization. Details of the obligations of the
parties with respect to reporting such information to each other, and processing
of this data shall be covered in an addendum following execution of this
Sublicense Agreement.
6.6 Nothing herein shall be construed as preventing NOVARTIS
from disclosing any information received from TITAN to an AFFILIATE,
SUBLICENSEE, distributor, contractor, agent, consultant, legal counsel or other
THIRD PARTY involved in the development, manufacture, marketing, promotion or
sale of COMPOUND or PRODUCT, provided such AFFILIATE or SUBLICENSEE or other
THIRD PARTY has undertaken a similar obligation of confidentiality with respect
to the Confidential Information.
6.7 In the event that a court or other legal or administrative
tribunal, directly or through an appointed master, trustee or receiver, assumes
partial or complete control over the assets of NOVARTIS based on the insolvency
or bankruptcy of NOVARTIS, NOVARTIS shall promptly notify the court or other
tribunal (i) that Confidential Information received from TITAN remains the
property of HMRI or TITAN, or their respective AFFILIATES, as the case may be,
and (ii) of the confidentiality obligations under this Sublicense Agreement. In
addition, NOVARTIS shall, to the extent permitted by law, take all steps
reasonably necessary or desirable to maintain the confidentiality of the
Confidential Information of HMRI or TITAN, as the case may be, and to
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ensure that the court, other tribunal or appointee maintains such information in
confidence in accordance with the terms of this Sublicense Agreement.
6.8 No public announcement or other disclosure to THIRD
PARTIES concerning the existence of or terms of this Sublicense Agreement shall
be made, either directly or indirectly, by either party to this Sublicense
Agreement, except as may be legally required, without first obtaining the
approval of the other party, which approval shall not be unreasonably withheld,
and shall be given within a reasonable time. The party desiring to make any such
public announcement or other disclosure shall provide the other party with a
written copy of the proposed announcement or disclosure in sufficient time prior
to proposed public release, to allow such other party to comment upon the
nature, text and timing of such announcement or disclosure, prior to proposed
public release.
6.9 Neither party shall submit for written or oral publication
any manuscript, abstract or the like which includes KNOW-HOW, data or other
information generated and/or provided by HMRI, TITAN or NOVARTIS pursuant to
this Sublicense Agreement without first obtaining the prior written consent of
the party generating or providing such information, which consent shall not be
unreasonably withheld. The contribution of each party shall be noted in all
publications or presentations by acknowledgment or co-authorship, whichever is
appropriate.
7. TITAN SUPPLY OF COMPOUND AND PRODUCT TO NOVARTIS.
7.1 TITAN shall supply COMPOUND and PRODUCT to NOVARTIS under
the following conditions:
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(a) Within a reasonable period of time after the
effective date of this Sublicense Agreement as agreed to by the PARTIES in good
faith, TITAN will, at no cost to NOVARTIS, arrange for the transfer by HMRI to
NOVARTIS, to a single site to be designated by NOVARTIS, all quantities of
unmilled COMPOUND available as of the effective date of this Sublicense
Agreement at HMRI, Frankfurt, Germany. The PARTIES recognize, however, that a
portion of the COMPOUND, not to exceed one hundred (100) kilograms, must be
reserved for use by TITAN's sublicensee for Japan, subject to Section 7.1(d).
(b) At no cost to NOVARTIS, TITAN will arrange, upon
written request by NOVARTIS, for the transfer to a single site in the United
States to be designated by NOVARTIS, of all quantities of COMPOUND and PRODUCT
available as of the effective date of this Sublicense Agreement at Bio-Pharm
Pharmaceutics Services, Ft. Washington, Pennsylvania.
(c) The PARTIES will agree in good faith on a
procedure which will allow NOVARTIS to transfer COMPOUND and PRODUCT to Japan
for use by the Japanese sublicensee.
(d) Title to, and risk of loss with respect to, all
COMPOUND and PRODUCT supplied by TITAN to NOVARTIS under this Section 7.1 shall
pass to NOVARTIS upon the receipt of such COMPOUND and PRODUCT by NOVARTIS or
its designee at its point of delivery; provided that with respect to the one
hundred (100) kilograms of COMPOUND reserved for use by TITAN's SUBLICENSEE for
Japan under Section 7.1(a), NOVARTIS shall not be liable for any loss of such
COMPOUND except where such loss is the result of NOVARTIS' negligence or willful
misconduct.
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(e) TITAN shall provide to NOVARTIS an HMRI
certificate of analysis for any shipment of COMPOUND or PRODUCT.
(f) All COMPOUND and PRODUCT supplied by TITAN to
NOVARTIS for clinical trials will conform to the IND specifications therefor as
well as all laws and regulatory requirements, including current Good
Manufacturing Practices, applicable to the COMPOUND and PRODUCT when used in
said clinical trials in accordance with said IND.
7.2 TITAN shall provide information and assistance to NOVARTIS
with respect to COMPOUND and PRODUCT as follows:
(a) Within sixty (60) days after the full execution
and delivery of this Sublicense Agreement, TITAN shall deliver to NOVARTIS any
and all KNOW-HOW, documentation, data and other information owned or controlled
by TITAN and its AFFILIATES, that NOVARTIS may reasonably require for the
manufacture of COMPOUND and PRODUCT. Such information shall include without
limitation the specifications for COMPOUND and PRODUCT and methods of analysis
for testing COMPOUND and PRODUCT, as currently described within the IND
regulatory documentation, including Chemistry-Manufacturing/Controls (CMC)
information amendments and the technology transfer file.
(b) TITAN shall arrange for HMRI to provide to
NOVARTIS or its designated THIRD PARTY assistance for the transfer of
manufacturing technology, through documentation, consultation and face-to-face
meetings, to enable NOVARTIS or such THIRD PARTY to proceed with development of
commercial-scale manufacturing. If requested by NOVARTIS or such THIRD PARTY,
TITAN shall visit the designated commercial manufacturing
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facility, with the limitation of three (3) visits, not to exceed a total of ten
(10) business days, for which NOVARTIS shall bear all the costs of reasonable
travel and other out-of-pocket expenses.
7.3 HMRI has represented and warranted to TITAN, and TITAN has
relied in good faith upon such representation and warranty that:
(a) all COMPOUND and PRODUCT supplied hereunder shall
meet the specifications therefor at the time COMPOUND and PRODUCT are delivered
to NOVARTIS or its designee;
(b) all COMPOUND and PRODUCT supplied hereunder shall
be manufactured, stored and shipped in accordance with GMPs and all other
applicable laws and regulations; and
(c) none of the COMPOUND or PRODUCT supplied
hereunder shall be adulterated or misbranded as provided for under applicable
laws and regulations.
7.4 TITAN represents and warrants that:
(a) the specifications for COMPOUND and PRODUCT are
consistent with those set out in the INDs sponsored by TITAN; and
(b) as of the date of this Sublicense Agreement, the
raw materials for the manufacture of COMPOUND are readily available in the
marketplace.
7.5 NOVARTIS shall return to HMRI all unused COMPOUND or
PRODUCT supplied by TITAN to NOVARTIS hereunder.
8. PATENT PROSECUTION; MAINTENANCE AND EXTENSION; INFRINGEMENT.
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8.1 HMRI shall be responsible for the filing, prosecution
(including oppositions) and maintenance of the PATENTS at HMRI's expense. For so
long as the license grants set forth in Article 2 remain in effect, HMRI agrees
to file and prosecute and maintain the PATENTS in the TERRITORY, provided that
the foregoing is subject to HMRI's reasonable business judgment. TITAN shall
keep NOVARTIS informed, to the same extent HMRI keeps TITAN informed, of
important issues relating to the preparation, filing, prosecution and
maintenance of such patent applications and patents. NOVARTIS, through TITAN,
shall have the right to comment on HMRI's preparation, filing, prosecution and
maintenance of patent applications and PATENTS, and HMRI shall give due
consideration to NOVARTIS' comments, but HMRI shall make all decisions regarding
same.
8.2 If HMRI elects not to seek patent protection in countries
listed in Appendix F or to maintain patent protection on PATENTS listed in
Appendix A in any country in the TERRITORY to the extent that PATENTS claim
COMPOUND or PRODUCT (or formulations, use or manufacture thereof), NOVARTIS
shall have the right, at its option and at HMRI's expense, which expense must be
approved in advance by HMRI (approval which shall not be unreasonably withheld),
to file, prosecute (including oppositions) and maintain any such patent
applications and patents in HMRI's name, and any patent issued therefrom shall
be owned by HMRI. TITAN shall advise NOVARTIS of HMRI's decision not to seek or
maintain patent protection in a reasonably timely manner. In the event that a
PATENT is issued covering COMPOUND or PRODUCT in any country in the TERRITORY
under the conditions of this Section 8.2, NOVARTIS shall pay directly to HMRI a
three percent (3%) royalty on NET SALES of PRODUCT in such country, for a period
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of five (5) years from the date of such patent issuance in such country, in
recognition of HMRI's KNOW-HOW and manufacturing rights and the right to make
and sell COMPOUND or PRODUCT in such country. Legal fees and expenses, as
confirmed by HMRI, incurred by NOVARTIS shall be deducted from the royalty paid
to HMRI.
8.3 Each of HMRI, TITAN and NOVARTIS shall make available to
the other, its employees, agents, subcontractors or consultants (including its
authorized attorneys) to the extent reasonably necessary or appropriate to
enable the appropriate party to file, prosecute and maintain patent applications
and resulting patents subject to this Sublicense Agreement to the extent that
PATENTS claim COMPOUND or PRODUCT (or formulations, use or manufacture thereof).
Where appropriate, each of HMRI, TITAN and NOVARTIS shall sign or cause to have
signed all documents relating to said patent applications or patents at no
charge to the other.
8.4 Promptly after it is notified by HMRI, TITAN shall notify
NOVARTIS in writing of (a) the issuance of each PATENT giving the date of issue
and patent number for each patent, and (b) each notice pertaining to any PATENT
which HMRI receives as patent owner pursuant to the Drug Price Competition and
Patent Term Restoration Act of 1984, or other similar laws now or hereafter in
effect which extend the PATENT life, or pursuant to comparable laws or
regulations in other countries in the TERRITORY. At HMRI's expense, HMRI, TITAN
and NOVARTIS shall cooperate with each other in applying for patent term
extensions (including Supplementary Protection Certificate in EUROPEAN UNION
member states) where applicable in any country of the TERRITORY. HMRI shall have
full responsibility and authority in the decisions regarding filing for the
foregoing PATENT extensions at its own expense although NOVARTIS,
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through TITAN, shall be consulted and its opinions given due consideration in
such decision-making process. If HMRI elects not to pursue extension of any
PATENTS, NOVARTIS shall have the right (but not the obligation) to apply for
such extension in HMRI's name and at NOVARTIS' expense, and HMRI shall
reasonably cooperate in the filing and procurement thereof.
8.5 Except as otherwise expressly provided in this Sublicense
Agreement, under no circumstances shall a party hereto, as a result of this
Sublicense Agreement, obtain any ownership interest in or other right to any
technology, KNOW-HOW, patents, pending patent applications, products, or
biological material of the other party, or HMRI, including items owned,
controlled, discovered, invented or developed by the other party, or HMRI, or
transferred by the other party or HMRI to said party, at any time pursuant to
this Sublicense Agreement which is not a direct result of the study, KNOW-HOW
and experimentation of COMPOUND and PRODUCT. It is understood and agreed that
this Sublicense Agreement does not grant NOVARTIS any license to other uses for
COMPOUND or PRODUCT outside the FIELD.
8.6 Each of NOVARTIS, TITAN and HMRI shall promptly, but in
any event no later than ten (10) business days after receipt of notice of such
action, notify the other in writing of any PATENT nullity actions, any
declaratory judgment actions or any alleged or threatened infringement of
PATENTS or misappropriation of intellectual property comprising PATENTS, or if
NOVARTIS, HMRI or TITAN, or any of their respective AFFILIATES or SUBLICENSEES,
shall be individually named as a defendant in a legal proceeding by a THIRD
PARTY alleging infringement of a patent or other intellectual property right of
such THIRD PARTY as a result of
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the manufacture, production, use, development, marketing, selling or
distribution of COMPOUND or PRODUCT, or of any information or notification
regarding the PATENTS.
8.7 HMRI shall have the first right to respond to, defend or
prosecute any actions, challenges, infringements, misappropriations or
proceedings by a THIRD PARTY alleging infringement described in Section 8.6. In
the event HMRI elects to do so, NOVARTIS will cooperate with HMRI and its legal
counsel, join in such suits as may be brought by HMRI, and be available at
HMRI's reasonable request to be an expert witness or otherwise to assist in such
proceedings and at HMRI's expense. Through TITAN, HMRI will cooperate with
NOVARTIS and its legal counsel and keep NOVARTIS and its counsel reasonably
informed at all times as to the status of HMRI's response or defense.
8.8 In the event that HMRI elects to respond to, defend or
prosecute any actions, challenges, infringements, misappropriations or
proceedings by a THIRD PARTY claiming infringement described in Section 8.6
hereof, then:
(a) legal fees and other costs and expenses of HMRI
associated with such response or defense shall be paid by HMRI;
(b) legal fees and other costs and expenses
associated with such response or defense incurred by NOVARTIS at HMRI's request,
shall be paid by HMRI;
(c) costs of acquiring THIRD PARTY patents or
licenses and any settlement, court award, judgment or other damages shall be
paid by HMRI to such THIRD PARTIES out of royalties projected to be received
from NOVARTIS (either directly or through TITAN); provided, however, HMRI shall
not be obligated to pay for any patents or licenses for uses
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of COMPOUND or PRODUCTS not disclosed in PATENTS as of the date of the execution
of the License Agreement; and
(d) any amounts recovered from THIRD PARTIES in
connection with such response or defense shall be applied fifty percent (50%) to
NOVARTIS (through TITAN), and fifty percent (50%) to HMRI, subject first to
reimbursement of expenses of HMRI, NOVARTIS and TITAN.
8.9 In the event that HMRI elects not to respond to, defend or
prosecute any actions, challenges, infringements, misappropriations or
proceedings by a THIRD PARTY alleging infringement described in Section 8.6
hereof or HMRI abandons any such action, TITAN shall notify NOVARTIS promptly
after receiving notification from HMRI of such actions, challenges,
infringements, misappropriations, proceeding or HMRI's decision to abandon any
such action. In such event, NOVARTIS shall have the option to respond, defend or
prosecute such action at NOVARTIS' sole cost, provided that HMRI shall cooperate
with and provide assistance to NOVARTIS at HMRI's expense. All amounts recovered
from any THIRD PARTY shall be applied fifty percent (50%) to NOVARTIS and fifty
percent (50%) to HMRI, subject first to reimbursement of expenses of HMRI,
NOVARTIS and TITAN.
8.10 In the event that HMRI and NOVARTIS mutually agree that
it is desirable for HMRI to acquire any THIRD PARTY patent or license in
connection with the development or manufacture of COMPOUND or PRODUCT covered by
PATENTS in the TERRITORY, then the costs of acquiring such THIRD PARTY patent or
license shall be paid by HMRI to such THIRD PARTIES out of royalties received
from NOVARTIS (either directly or through TITAN). HMRI
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shall not be obligated to pay for any patents or licenses for uses of COMPOUND
or PRODUCT not disclosed in PATENTS as of the date of the execution of the
License Agreement.
8.11 NOVARTIS recognizes that HMRI has reserved certain rights
in the patents set forth in Appendix A and that there may be a legitimate
dispute between the parties whether a legal action should be brought against a
THIRD PARTY which could effect HMRI's reserved rights under those patents and
NOVARTIS' sublicense rights under this Sublicense Agreement. In the event that
there is a dispute between NOVARTIS and HMRI regarding whether there is an
infringement of PATENTS by a THIRD PARTY and therefore whether a legal action
should be initiated, NOVARTIS and HMRI shall submit the issue to a
disinterested, competent and experienced patent attorney reasonably acceptable
to NOVARTIS and HMRI to determine whether or not there is an infringement and
legal actions should be taken. If NOVARTIS and HMRI cannot agree on the
selection of such a patent attorney, then NOVARTIS and HMRI shall each select a
patent attorney and those selected patent attorneys shall select a mutually
acceptable patent attorney. That selected patent attorney shall determine
whether or not there is an infringement and legal action should be taken and
then NOVARTIS and HMRI may decide whether or not to initiate a legal action as
described by this Article 8. The compensation to, and expenses of, such patent
attorney shall be borne by the losing party.
9. STATEMENTS AND REMITTANCES.
9.1 NOVARTIS shall keep, and require its AFFILIATES and
SUBLICENSEES to keep complete and accurate records of all NET SALES of PRODUCT
under the sublicenses granted herein. HMRI and TITAN shall have the right, at
their expense, through a certified public
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accountant or like independent person reasonably acceptable to NOVARTIS , and
following reasonable notice, to examine such records under conditions of
confidentiality during regular business hours during the period of time during
which royalties are due and payable hereunder and for two (2) years thereafter;
provided, however, that such examination shall not take place more often than
once a year and shall not cover such records for more than the preceding two (2)
years; and provided further, that such accountant shall report to HMRI and TITAN
only as to the accuracy of the NET SALES computation and royalty statements and
payments. It is agreed that if this Sublicense Agreement is terminated with
respect to a particular country(ies), then HMRI's and TITAN's examination rights
shall continue with respect to sales of PRODUCT in such country(ies) only for a
period of two (2) years after the termination of sublicense rights in that
country. Copies of all such accountant's reports shall be supplied to NOVARTIS .
9.2 Within forty-five (45) days after the close of each
calendar quarter, NOVARTIS shall deliver to TITAN a true accounting of all
PRODUCT sold by NOVARTIS , its AFFILIATES and SUBLICENSEES during such quarter
and shall at the same time pay all earned royalties due. Such accounting shall
show NET SALES of PRODUCT on a country-by-country and product-by-product basis
and such other particulars as are reasonably necessary for accounting of the
royalties payable hereunder.
9.3 Any tax paid or required to be withheld by NOVARTIS on
account of royalties payable by NOVARTIS under this Sublicense Agreement shall
be indicated on the accounting described in Section 9.2 hereof and deducted from
the amount of royalties otherwise due. NOVARTIS shall secure and send to TITAN
or HMRI, as the case may be, proof of any such taxes
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withheld and paid by NOVARTIS. Any withholding or other tax arising on or
following permitted assignment of this Sublicense Agreement by NOVARTIS or a
SUBLICENSEE shall be for the account of and paid by NOVARTIS .
9.4 Unless otherwise indicated herein, and subject to foreign
exchange regulations then prevailing, to the extent free conversion from local
currency to United States dollars is permitted, all payments and royalties
payable under this Sublicense Agreement shall be paid in cash in U.S. dollars by
wire transfer in accordance with Section 3.2 hereof. If governmental regulations
prevent remittances from a foreign country with respect to sales made in that
country, the obligation of NOVARTIS to pay royalties on sales in that country
shall be suspended until such remittances are possible, but such royalties shall
accrue as an accounts payable by NOVARTIS to TITAN or HMRI, as the case may be.
TITAN or HMRI, as the case may be, shall have the right, upon giving written
notice to NOVARTIS, to receive payment in that country in local currency.
9.5 Royalty payments and NET SALES shall be calculated on the
basis of NOVARTIS' quarterly standard account of internal sales which represents
the conversion of all local currency sales for a calendar quarter into Swiss
francs at the average exchange rate (as routinely derived via NOVARTIS' standard
methodology) for such calendar quarter in which the sales are recorded. The
exchange rate between the Swiss franc and the U.S. dollar for the quarterly
royalty payments to TITAN or HMRI (as the case may be) shall be the exchange
rates published in the Foreign Exchange column of The Wall Street Journal, New
York edition, or other qualified source mutually acceptable to the parties on
the last business day of the calendar quarter for which the royalties are being
paid. Notwithstanding the foregoing, if there is a difference between any amount
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that NOVARTIS pays to TITAN or HMRI (as the case may be) under Sections 3.3, 3.4
or 3.5, and the amount that TITAN is required to pay to HMRI under the License
Agreement (which difference arises as a result of using the method for
calculating royalties that are due and payable under this Section 9.5, and the
method for calculating such royalties under Section 9.5 of the License
Agreement), the shortfall or excess (as the case may be) in royalty payments
made by NOVARTIS under this Section 9.5 shall be paid by NOVARTIS to HMRI or
TITAN (as the case may be) in the case of a shortfall, and by TITAN to NOVARTIS
in the case of an excess payment by NOVARTIS to TITAN under Section 3.3 or 3.5.
10. TERM AND TERMINATION.
10.1 (a) NOVARTIS will have the right to terminate the
sublicense for the TERRITORY or on a country-by-country basis for major problems
associated with PRODUCT as reasonably determined by NOVARTIS . For this purpose
"major problems" are ones which would substantially negatively impact PRODUCT's
chances for successful development, registration and/or commercialization in the
TERRITORY or such country, as applicable; and would include, but not be limited
to, major safety issues, lack of efficacy, unacceptable pharmaceutical
properties or extraordinary unforeseen competitive developments which, in each
case, would have the substantial negative impact referred to above.
(b) In the event of termination in the entire
TERRITORY by NOVARTIS pursuant to this Section 10.1, NOVARTIS shall, within
thirty (30) days of such termination, return to TITAN any and all information
and data (including new information and data) relating to the COMPOUND and
PRODUCT, whether generated by or on behalf of TITAN, HMRI or
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NOVARTIS, and make no further use thereof. Additionally, in such event, this
Sublicense Agreement shall terminate in its entirety and the sublicense granted
hereunder shall revert back to TITAN. TITAN shall retain all upfront license
fees and milestone payments it had received up to the date of termination if,
and only if, termination was not due to any misrepresentations, omissions (of
information owned or controlled by HMRI or its AFFILIATES or TITAN or its
AFFILIATES as of the date hereof) or falsifications with respect to such
KNOW-HOW, information or data or fraud by HMRI or its AFFILIATES or TITAN or its
AFFILIATES, in which case, subject to the following sentence, TITAN shall repay
to NOVARTIS, within ninety-five (95) days of such termination, that portion of
the upfront license fee and milestone payments TITAN had received from NOVARTIS
up to the date of such termination (including in the form of NOVARTIS' purchase
of TITAN convertible preferred stock). In the case of misrepresentations,
omissions (of information owned or controlled by HMRI or its AFFILIATES as of
the date hereof) or falsifications with respect to such KNOW-HOW, information or
data or fraud only by HMRI or its AFFILIATES, and a termination of the License
Agreement pursuant to Section 10.1 of the License Agreement, TITAN shall be
obligated to make the foregoing repayments to NOVARTIS if, and only if, HMRI has
repaid the upfront license fee and milestone payments to TITAN under Section
10.1 of the License Agreement.
10.2 In the event the development of COMPOUND and PRODUCT is
terminated altogether by NOVARTIS by or before January 1, 1998, for reasons
other than those described in Section 10.1, then this Sublicense Agreement shall
terminate in its entirety and the sublicense granted hereunder shall revert back
to TITAN. TITAN shall retain all upfront license fees it had
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THE INFORMATION BELOW, MARKED BY * AND [ ], HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY
FILED WITH THE COMMISSION.
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received up to the date of termination and NOVARTIS shall also pay a [ * ]
penalty payment to TITAN if, and only if, termination was not due to any
misrepresentations, omissions (of information owned or controlled by HMRI or its
AFFILIATES or TITAN or its AFFILIATES as of the date hereof) or falsifications
with respect to KNOW-HOW, information or data or fraud by HMRI or its AFFILIATES
or TITAN or its AFFILIATES, in which case, subject to the following sentence,
TITAN shall repay to NOVARTIS, within ninety-five (95) days of such termination,
that portion of the upfront license fee and milestone payments TITAN had
received from NOVARTIS up to the date of such termination (including in the form
of NOVARTIS' purchase of TITAN convertible preferred stock). In the case of
misrepresentations, omissions (of information owned or controlled by HMRI or its
AFFILIATES as of the date hereof) or falsifications with respect to KNOW-HOW,
information or data or fraud only by HMRI or its AFFILIATES, and a termination
of the License Agreement pursuant to Section 10.2 of the License Agreement,
TITAN shall be obligated to make the foregoing repayments to NOVARTIS if, and
only if, HMRI has repaid the upfront license fee and milestone payments to TITAN
under Section 10.2 of the License Agreement.
10.3 Unless otherwise terminated, this Sublicense Agreement
shall expire on a country-by-country basis upon the expiration of NOVARTIS'
obligation to pay royalties under this Sublicense Agreement in each such
country. Expiration of this Sublicense Agreement under this provision shall not
preclude NOVARTIS, its AFFILIATES and SUBLICENSEES from continuing directly or
indirectly to manufacture COMPOUND and market and sell PRODUCT and to use
KNOW-HOW without further royalty payments.
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10.4 In the event there is a change in the control of
NOVARTIS, NOVARTIS shall give TITAN thirty (30) days written notice of such
event and that the development and commercialization of COMPOUND and PRODUCT
will continue per the terms of this Sublicense Agreement.
10.5 (a) If either party materially defaults in its
performance of this Sublicense Agreement and if such default is not corrected or
if the party in default is not exercising reasonably diligent efforts to cure
such default within ninety (90) days after receiving written notice from the
other party with respect to such default, or if such default is not correctable
within ninety (90) days then such other party shall have the right to terminate
this Sublicense Agreement at the end of such period in its entirety by giving
written notice to the party in default. In the event NOVARTIS materially
defaults in its performance under this Sublicense Agreement with respect to a
particular country, then, subject to Section 11.4 hereof, TITAN's right to
terminate shall be limited to termination of the sublicense granted hereunder in
such country only.
(b) If TITAN materially defaults in its performance
of the License Agreement, then NOVARTIS shall have the right but not the
obligation to correct or cure such default in the place of TITAN at NOVARTIS'
own cost and expense within the ninety (90) day period provided for in Section
10.5 of the License Agreement without prejudice to any other rights NOVARTIS may
have under this Sublicense Agreement, provided that (i) NOVARTIS notifies TITAN
in writing of NOVARTIS' election to do so, and (ii) NOVARTIS' correction or cure
of such default does not increase TITAN's liability under the License Agreement.
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(c) It is agreed that a material default by TITAN
under the License Agreement shall be a material default by TITAN under this
Sublicense Agreement.
10.6 Subject to applicable bankruptcy laws, either party may
terminate this Sublicense Agreement if, at any time, the other party shall file
in any court pursuant to any statute of the United States or of any individual
state or foreign country, a voluntary petition in bankruptcy or insolvency or
for reorganization in bankruptcy or for an arrangement or for the appointment of
a receiver or trustee of the party or of its assets, or if the other party shall
be served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within ninety (90) days
after the filing thereof, or if the other party shall propose or be a party to
any dissolution, or if the other party shall make an assignment for the benefit
of creditors.
(a) Without limitation, NOVARTIS' rights under this
Sublicense Agreement shall include those rights afforded by 11 U.S.C. Section
365(n) of the United States Bankruptcy Code and any successor thereto (the
"Code"). If the bankruptcy trustee of TITAN as a debtor or debtor-in-possession
rejects this Sublicense Agreement under 11 U.S.C. Section 365(n) of the Code,
NOVARTIS may elect to retain its rights sublicensed from TITAN hereunder (and
any other supplementary agreements hereto) for the duration of this Sublicense
Agreement and avail itself of all rights and remedies to the full extent
contemplated by this Sublicense Agreement and 11 U.S.C. Section 365(n) of the
Code, and any other relevant sections of the Code and other relevant
non-bankruptcy law.
11. RIGHTS AND DUTIES UPON TERMINATION.
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11.1 Upon termination of this Sublicense Agreement, TITAN
shall have the right to retain any sums already paid by NOVARTIS hereunder, and
NOVARTIS shall pay all sums accrued hereunder which are then due except as
otherwise defined in this Sublicense Agreement.
11.2 Upon early termination of this Sublicense Agreement in
its entirety under Sections 10.1 or 11.6 or with respect to any country, or due
to a breach hereof by NOVARTIS, NOVARTIS shall notify TITAN of the amount of
PRODUCT that NOVARTIS, its AFFILIATES and SUBLICENSEES then have on hand for
sale in each country, the sale of which would, but for the termination, be
subject to royalty, and NOVARTIS , its AFFILIATES and SUBLICENSEES shall
thereupon be permitted to sell that amount of PRODUCT, provided that NOVARTIS
shall pay the royalty thereon to TITAN or HMRI, as the case may be, at the time
herein provided for.
11.3 Expiration or termination of this Sublicense Agreement or
termination on a country-by-country basis shall terminate all outstanding
obligations and liabilities between the parties arising from this Sublicense
Agreement except those described in Sections 6.2 (with sole respect to TITAN
confidentiality) 6.3, 6.4, 6.5, 6.6, 6.8, 9.1, 9.2, 10.1(b), 10.2, 10.3, 11.1,
11.2, 11.4, 11.5, 11.6, 12.5, 12.6, 12.7, 14.1 and 14.2, which sections shall
survive such termination. In addition, any other provision required to interpret
and enforce the parties' rights and obligations under this Sublicense Agreement
shall also survive, but only to the extent required for the full observation and
performance of the surviving obligations under this Sublicense Agreement.
11.4 Except as otherwise specifically provided for herein,
termination, in whole or in part, of the Sublicense Agreement in accordance with
the provisions hereof shall not limit remedies to the parties which may be
otherwise available in law or equity, including consequential,
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incidental or indirect damages (such as loss of sales, profits, or goodwill)
arising out of a party's performance or nonperformance under this Sublicense
Agreement.
11.5 Subject to Section 11.2 and other express provisions
hereof, upon early termination of this Sublicense Agreement in its entirety due
to breach hereof by NOVARTIS and pursuant to Sections 10.1, 10.2 or 11.6,
NOVARTIS' rights in COMPOUND and PRODUCT shall cease, NOVARTIS, its AFFILIATES
and SUBLICENSEES shall cease manufacture, development, marketing and sale of
COMPOUND and PRODUCT in the TERRITORY, and all originals and copies of KNOW-HOW,
data, results and other information collected and/or generated by NOVARTIS, its
AFFILIATES and SUBLICENSEES relating to COMPOUND or PRODUCT prior to termination
shall be delivered to TITAN within thirty (30) days thereafter, except for one
copy thereof which may be retained in NOVARTIS' legal or other appropriately
restricted files solely for the purpose of establishing the extent of its
obligations hereunder. Any IND or other regulatory filing effected prior to
termination shall be assigned by NOVARTIS to TITAN (or its designee(s), which
designee could be HMRI), at TITAN's request and expense, if not already assigned
to TITAN. NOVARTIS shall provide to TITAN, within thirty (30) days of TITAN 's
request, copies of all regulatory correspondence, including, but not limited to,
IND Information Amendments, IND Reports, IND Safety Reports, NDA submission, NDA
Postmarketing Reports, and reports of written/phone contacts to/from regulatory
agencies, as well as the safety database for PRODUCT.
11.6 If (a) NOVARTIS is precluded from selling PRODUCT in a
particular country(ies) in the TERRITORY by virtue of infringement of THIRD
PARTY patent rights, or (b) there is a holding of invalidity or unenforceability
of any PATENT, from which no further appeal
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can be taken, that materially affects NOVARTIS' ability to commercialize PRODUCT
in a particular country(ies) in the TERRITORY, NOVARTIS shall have the right
(but not the obligation) to terminate this Sublicense Agreement in such
country(ies). At NOVARTIS' option, this Sublicense Agreement may be terminated
in its entirety if the events described in subsection (a) or (b) of this Section
11.6 occur in the United States and/or, the EUROPEAN UNION. Within ninety-five
(95) days of any such termination, subject to the following sentence, TITAN
shall repay to NOVARTIS if the Sublicense Agreement has been terminated in its
entirety, that portion of the upfront license fee and milestone payments
(including in the form of NOVARTIS' purchase of TITAN convertible preferred
stock) it has received from NOVARTIS up to the date of termination. In the event
the License Agreement is terminated pursuant to Section 11.6 of the License
Agreement, TITAN shall be obligated to make the foregoing repayments to
NOVARTIS, but only to the extent HMRI has repaid the upfront license fee and
milestone payments to TITAN under Section 11.6 of the License Agreement. If this
Sublicense Agreement has been terminated only with respect to certain
country(ies), the parties shall negotiate in good faith what smaller portion of
the upfront license fee and milestone payments TITAN has received from NOVARTIS
up to such date shall be repaid to NOVARTIS; provided, however, if the License
Agreement has been terminated only with respect to such certain countries under
Section 11.6 of the License Agreement, TITAN shall be obligated to make such
repayments to NOVARTIS but only to the extent HMRI has repaid a portion of the
upfront license fee and milestone payments to TITAN under Section 11.6 of the
License Agreement. If the parties are unable to agree on such smaller portion
within ninety (90) days, the issue shall be submitted for determination by
arbitration in accordance with Section 14.2.
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12. WARRANTIES, INDEMNIFICATIONS AND REPRESENTATIONS.
12.1 TITAN represents and warrants that to the best of its
knowledge at the date of this Sublicense Agreement: (a) all currently issued or
pending patents and patent applications owned or controlled by HMRI or its
AFFILIATES claiming the COMPOUND or PRODUCT are listed in Appendix A, and (b)
HMRI or its AFFILIATES owns or controls the entire right, title and interest in
PATENTS and KNOW-HOW. If TITAN becomes aware of any patents or patent
applications owned or controlled by HMRI or its AFFILIATES claiming COMPOUND or
PRODUCT or manufacture, formulation or use thereof not listed in Appendix A and
is within the rights granted to NOVARTIS in this Sublicense Agreement, such
patents and patent applications shall be added to Appendix A at no cost to
NOVARTIS . TITAN further represents and warrants that to the best of its
knowledge as of the date of this Sublicense Agreement: (c) TITAN's written
contracts with CROs relating to COMPOUND or PRODUCT that are in effect as of the
effective date of this Sublicense Agreement (which contracts are identified in
Appendix E) are in full force and effect and neither TITAN nor any of the CROs
is in default of any of their obligations under such contracts, (d) the License
Agreement is in full force and effect and neither HMRI nor TITAN is in default
of any of their obligations thereunder, and (e) subject to obtaining HMRI's
prior written consent, TITAN has the legal power, right and authority to enter
into this Sublicense Agreement. NOVARTIS represents and warrants that it has the
legal power, right and authority to enter into this Sublicense Agreement. TITAN
will obtain all assignments or licenses from the patent holder of the PATENTS,
to the same extent as TITAN is entitled to receive such assignments or licenses
from HMRI under the License Agreement, to provide NOVARTIS with the same degree
of exclusivity
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in the TERRITORY under the PATENTS as TITAN is granted by HMRI under the License
Agreement.
12.2 Nothing in this Sublicense Agreement shall be construed
as a warranty that PATENTS are valid or enforceable or that their exercise does
not infringe any patent rights of THIRD PARTIES. TITAN hereby represents and
warrants that it has no present knowledge that (i) PATENTS are invalid or
unenforceable, (ii) the exercise of PATENTS infringes any patent rights of THIRD
PARTIES, and (iii) THIRD PARTY licenses are necessary for the development,
manufacture or commercialization of COMPOUND or PRODUCT. A holding of invalidity
or unenforceability of any PATENT, from which no further appeal is or can be
taken, shall not affect any obligation already accrued hereunder, but shall only
eliminate future royalties otherwise due under such PATENT from the date such
holding becomes final.
12.3 Each party represents to the other that it is not
currently debarred, suspended or otherwise excluded by any U.S. Government
agencies from receiving federal contracts.
12.4 NOVARTIS agrees that during the term of this Sublicense
Agreement, neither it or a SUBLICENSEE shall license, develop, have developed,
manufacture, have manufactured, sell or have sold any of the following compounds
or products classified as an atypical antipsychotic: (i.e. Olanzapine,
Sertindole, Seroquel, Ziprasadone, Risperidone); provided that such restriction
shall not apply within the EEA. In the event that NOVARTIS or a SUBLICENSEE
undertakes any of the foregoing actions within the EEA, then TITAN may not
terminate this Sublicense Agreement or seek damages or equitable remedies for
such actions, but may at its option by notice to NOVARTIS (i) terminate the
EXCLUSIVE nature of the licenses granted pursuant to Article 2
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hereof in the EEA, so that all use of PATENTS and KNOW-HOW in the EEA will
thereafter be on a nonexclusive basis at a reduced royalty rate to be negotiated
at such time of change in exclusivity; (ii) cease providing improvements to
NOVARTIS pursuant to Section 2.3; and/or (iii) require NOVARTIS to prove to
TITAN's reasonable satisfaction that the KNOW-HOW is not being used for such
activities.
Notwithstanding the foregoing, TITAN and NOVARTIS agree that
in the event NOVARTIS acquires rights to one or more of the five compounds or
products listed in the first paragraph of this Section 12.4 (the "Acquired
Compounds or Products") as part of a corporate transaction such as an
acquisition of assets or stock, a merger, or consolidation, TITAN shall use its
good faith efforts to cause HMRI to waive any rights that it may have against
NOVARTIS or TITAN under this Section 12.4 and Section 12.4 of the License
Agreement. To assist TITAN in obtaining such waiver from HMRI, NOVARTIS will
provide TITAN with arguments supporting how NOVARTIS intends to prevent PRODUCT
from being negatively impacted by the Acquired Compounds or Products. In the
event HMRI will not waive such rights and NOVARTIS does not agree to divest the
Acquired Compounds or Products or, alternatively, sublicense PRODUCT to a
mutually acceptable third party (which third party must also be acceptable to
HMRI), TITAN agrees that its sole and exclusive remedy against NOVARTIS shall be
to terminate the exclusive nature of the Sublicense Agreement in the EEA as
provided for in this Section 12.4, and to terminate this Sublicense Agreement
elsewhere in the TERRITORY.
12.5 NOVARTIS shall indemnify, defend and hold TITAN, HMRI and
their respective AFFILIATES harmless from and against any and all liabilities,
claims, demands,
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damages, costs, expenses, fines, penalties or money judgments including without
limitation court costs and reasonable attorney's fees (hereinafter referred to
as "Liabilities"), during the term of this Sublicense Agreement and after its
expiration or termination, incurred by or rendered against TITAN, HMRI and their
respective AFFILIATES which arise out of the clinical testing, use or labeling,
or the manufacture, processing, packaging, sale or distribution of COMPOUND or
PRODUCT (as the case may be) by NOVARTIS, its AFFILIATES and SUBLICENSEES, or
the breach of this Sublicense Agreement by NOVARTIS (including without
limitation any breach of NOVARTIS' representations and warranties under this
Sublicense Agreement) or any negligence or misconduct of NOVARTIS , except to
the extent that such Liabilities are directly attributable to the breach of this
Sublicense Agreement by TITAN or breach of the License Agreement by HMRI
(including without limitation any breach of TITAN's representations or
warranties under this Sublicense Agreement or any breach of HMRI's
representations or warranties under the License Agreement) or any negligence or
misconduct by TITAN or HMRI. NOVARTIS shall also indemnify, defend and hold
TITAN, HMRI and their respective AFFILIATES harmless from and against any and
all Liabilities incurred by or rendered against TITAN, HMRI and their respective
AFFILIATES which arise out of the COMPOUND or PRODUCT supplied by NOVARTIS to
HMRI and/or TITAN and for use pursuant to Section 2.3, or which arise out of any
contracts or arrangements with THIRD PARTIES (including CROs) relating to the
development and/or registration process for the COMPOUND or PRODUCT from and
after the effective date of this Sublicense Agreement, whether such contracts or
arrangements with THIRD PARTIES were entered into prior to or following the
effective date of this Sublicense Agreement, except to the extent that
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such Liabilities are directly attributable to the breach of this Sublicense
Agreement by TITAN or breach of the License Agreement by HMRI (including without
limitation any breach of TITAN's representations or warranties under this
Sublicense Agreement or any breach of HMRI's representations or warranties under
the License Agreement) or any negligence or misconduct by TITAN or HMRI.
12.6 TITAN shall indemnify, defend and hold NOVARTIS , its
AFFILIATES and SUBLICENSEES harmless from and against any and all Liabilities
(as defined in Section 12.5 hereof), incurred by or rendered against NOVARTIS,
its AFFILIATES and SUBLICENSEES, which arise out of the breach of this
Sublicense Agreement by TITAN (including without limitation any breach of
TITAN's representations or warranties under this Sublicense Agreement), or any
negligence or misconduct by TITAN, except to the extent that such Liabilities
are directly attributable to the breach of this Sublicense Agreement by NOVARTIS
(including without limitation any breach of NOVARTIS' representations and
warranties under this Sublicense Agreement), or any negligence or misconduct by
NOVARTIS. TITAN shall also indemnify, defend and hold NOVARTIS, its AFFILIATES
and SUBLICENSEES harmless from and against any and all Liabilities incurred by
or rendered against NOVARTIS, and its AFFILIATES and SUBLICENSEES which arise
out of the manufacture, use or sale of COMPOUND and PRODUCT that has been
manufactured or sold by or on behalf of TITAN and its AFFILIATES or SUBLICENSEES
in Japan or those countries where NOVARTIS' sublicense rights hereunder have
been terminated (including the clinical testing, use and labeling of PRODUCT and
the manufacture, processing, packaging, sale or distribution of PRODUCT by TITAN
and its AFFILIATES and SUBLICENSEES) or subject to
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Section 5.4(b), which arise out of the activities of any CRO which occurred
prior to the execution of this Sublicense Agreement and that were undertaken
pursuant to a written contract between TITAN and such CRO relating to COMPOUND
or PRODUCT.
12.7 Each party shall give the other prompt notice in writing
of any claim or demand referred to in Sections 12.5 or 12.6. In addition, the
obligations of any indemnifying party shall be subject to the indemnified party
fulfilling the following obligations:
(a) With respect to third party claims, indemnified
party shall fully cooperate with the indemnifying party in the defense of such
claim or demand which defense shall be controlled by the indemnifying party; and
(b) With respect to third party claims, indemnified
party shall not, except at its own cost, voluntarily make any payment or incur
any expense with respect to any claim, demand or suit (including without
limitation retaining its own counsel) without the prior written consent of the
indemnifying party, which such party shall not be required to give.
13. FORCE MAJEURE.
13.1 If the performance of any part of this Sublicense
Agreement by either party, or if any obligation under this Sublicense Agreement,
is prevented, restricted, interfered with or delayed by reason of any cause
beyond the reasonable control of the party required to perform, the party so
affected, upon giving written notice and written evidence of such force majeure
to the other party, shall be excused from such performance to the extent of such
prevention, restriction, interference or delay, provided that the affected party
shall use its reasonable commercial efforts to avoid or remove such causes of
nonperformance and shall continue performance with the utmost
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dispatch whenever the force majeure is removed. In the event of a force majeure,
the parties shall also discuss whether modification of the terms of this
Sublicense Agreement are necessary to alleviate the hardship or loss caused by
the force majeure.
14. GOVERNING LAW AND ARBITRATION.
14.1 This Sublicense Agreement shall be deemed to have been
made in the State of New York and its form, execution, validity, construction
and effect shall be determined in accordance with the laws of the State of New
York (without regard to New York's or any other jurisdiction's choice of law
principles).
14.2 In the event of any controversy or claim arising out of
or relating to any provision of this Sublicense Agreement, the parties shall try
to settle their differences amicably between themselves. Any unresolved disputes
arising between the parties relating to, arising out of or in any way connected
with this Sublicense Agreement or any term or condition hereof, or the
performance by either party of its obligations hereunder, whether before or
after termination of this Sublicense Agreement, shall be resolved by final and
binding arbitration. Whenever a party shall decide to institute arbitration
proceedings, it shall give written notice to that effect to the other party.
Except in the case of a determination to be made where payments are to be made
to by one party to the other, the party giving such notice shall refrain from
instituting the arbitration proceedings for a period of sixty (60) days
following such notice to allow the parties time to further attempt to come to an
amicable resolution of the dispute. Arbitration shall be held in New York City,
New York according to the commercial rules of the American Arbitration
Association ("AAA"). The arbitration will be conducted by a panel of three
arbitrators appointed in accordance with AAA
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rules; provided, however, that each party shall within thirty (30) days after
the institution of the arbitration proceedings appoint a party arbitrator, and
the party-arbitrators shall select a neutral arbitrator, to be chairman of the
arbitration panel, within thirty (30) days thereafter. If the party-arbitrators
are unable to select a neutral within such period, the neutral shall be
appointed in accordance with AAA rules. All arbitrator(s) eligible to conduct
the arbitration must agree to render their opinion(s) within thirty (30) days of
the final arbitration hearing. No arbitrator (nor the panel of arbitrators)
shall have the power to award punitive damages under this Sublicense Agreement
and such award is expressly prohibited. Decisions of the arbitrator(s) shall be
final and binding on all of the parties. Judgment on the award so rendered may
be entered in a court having jurisdiction thereof. In any arbitration pursuant
to this Sublicense Agreement, the arbitrators shall interpret the express terms
hereof and apply the laws of the State of New York. The losing party to the
arbitration as determined by the arbitrators shall pay the costs of arbitration.
15. SEPARABILITY.
15.1 In the event any portion of this Sublicense Agreement not
material to the remaining portions shall be held illegal, void or ineffective,
the remaining portions hereof shall remain in full force and effect.
15.2 If any of the terms or provisions of this Sublicense
Agreement are in conflict with any applicable statute or rule of law, then such
terms or provisions shall be deemed inoperative to the extent that they may
conflict therewith and shall be deemed to be modified to conform with such
statute or rule of law.
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15.3 In the event that the terms and conditions of this
Sublicense Agreement are materially altered as a result of Sections 15.1 or
15.2, the parties shall renegotiate the terms and conditions of this Sublicense
Agreement so as to accomplish as nearly as possible the original intentions of
the parties.
16. ENTIRE AGREEMENT.
16.1 This Sublicense Agreement and the Appendices attached
hereto, entered into as of the date written above, constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes all previous writings and understandings, including without
limitation the Heads of Agreement between the parties dated October 21, 1997 and
the Confidentiality Agreement between the parties dated February 21, 1997 (it
being understood and agreed that all Confidential Information of HMRI and TITAN
disclosed to NOVARTIS prior to the effective date of this Sublicense Agreement
shall be subject to Sections 6.4, 6.6, 6.7 and 6.9 of this Sublicense
Agreement). No terms or provisions of this Sublicense Agreement shall be varied
or modified by any prior or subsequent statement, conduct or act of either of
the parties, except that the parties may amend this Sublicense Agreement by
written instruments specifically referring to and executed in the same manner as
this Sublicense Agreement.
17. NOTICES.
17.1 Any notice required or permitted under this Sublicense
Agreement shall be in writing and in English and shall be sent by airmail,
postage prepaid, or facsimile or courier to the following address of each party
or to such other address as may be designated in writing by the respective
parties:
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CONFIDENTIAL
If to NOVARTIS : Novartis Pharma A.G.
Legal Services
Lichtstrasse 35
CH 4002 Basel
Switzerland
Attention: General Counsel
With copies to: Business Development and Licensing
Novartis Pharma A.G.
Lichtstrasse 35
CH 4002 Basel
Switzerland
Attention: Head of Department
If to TITAN: Titan Pharmaceuticals, Inc.
400 Oyster Point Blvd., Suite 505
South San Francisco, CA 94080
Attention: Louis R. Bucalo, M.D.
President & CEO
Telephone: (650) 244-4990
Facsimile: (650) 244-4956
With copies to: Titan Pharmaceuticals, Inc.
400 Oyster Point Blvd., Suite 505
South San Francisco, CA 94080
Attention: Sunil R. Bhonsle
Executive V.P. & COO
Telephone: (650) 244-4990
Facsimile: (650) 244-4956
and
Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, CA 94301-1900
Attention: Neil Flanzraich, Esq.
Telephone: (650) 324-7118
Facsimile: (650) 324-0638
17.2 Any notice required or permitted to be given concerning
this Sublicense Agreement shall be effective upon receipt by the party to whom
it is addressed.
18. ASSIGNMENT.
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CONFIDENTIAL
18.1 This Sublicense Agreement or any portions thereof and the
sublicenses herein granted shall be binding upon and inure to the benefit of the
successors in interest and assignees of the respective PARTIES.
18.2 NOVARTIS may assign this Sublicense Agreement to an
AFFILIATE without the prior written consent of TITAN, and in such event NOVARTIS
will continue to guarantee the obligations of such AFFILIATE hereunder. Subject
to the foregoing, NOVARTIS shall not have the right to assign this Sublicense
Agreement to any THIRD PARTY without the prior written consent of TITAN, not to
be unreasonably withheld.
18.3 In the event of a consolidation, merger or acquisition
which involves a change in the control of NOVARTIS, this Sublicense Agreement
shall remain in full force and effect, and NOVARTIS agrees to notify TITAN
pursuant to Section 10.4.
19. FAILURE TO ENFORCE.
19.1 The failure of either party to enforce at any time any
provisions hereof shall not be construed to be a waiver of such provision nor of
the right of such party thereafter to enforce each and every such provision.
20. NO AGENCY.
20.1 Except as expressly set forth in this Sublicense
Agreement, nothing in this Sublicense Agreement authorizes either party to act
as agent for the other or, as to any third party, to indicate or imply the
existence of any such agency relationship. The relationship between the parties
is that of independent contractors.
21. FURTHER ASSURANCES.
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21.1 Each party hereto agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Sublicense Agreement.
22. CAPTIONS.
22.1 Captions are inserted for convenience only and in no way
are to be construed to define, limit or affect the construction or
interpretation hereof.
23. MISCELLANEOUS.
23.1 Both parties agree to discuss matters arising during the
term of this Sublicense Agreement in the spirit of cooperation and good faith
and endeavor to resolve any differences by mutual agreement whenever possible.
If the parties fail to reach agreement, either party may submit the matter for
resolution pursuant to Section 14.2.
23.2 NOVARTIS covenants to TITAN that during the term of this
Sublicense Agreement, NOVARTIS, its AFFILIATES and SUBLICENSEES shall not
violate the Federal Foreign Corrupt Practices Act in the performance of its
negotiations or obligations hereunder.
23.3 NOVARTIS acknowledges that it has received and reviewed
the License Agreement (a copy of which is attached hereto as Appendix G), and
agrees that the terms and conditions of this Sublicense Agreement must be
consistent with the License Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties, through their authorized officers,
have executed this Sublicense Agreement as of the date first written above.
NOVARTIS PHARMA A.G. TITAN PHARMACEUTICALS, INC.
By: By:
Name: Name:
Title: Title:
NOVARTIS PHARMA A.G.
By:
Name:
Title:
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APPENDIX A
PATENTS AND PATENT APPLICATIONS (PER SECTION 1.17)
<TABLE>
<CAPTION>
PATENT FILING PATENT ISSUE EXPIRATION
COUNTRY APPL. NO. DATE TYPE STATUS NO. DATE DATE
------- --------- ---- ---- ------ --- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
US 07/354,411 5/19/89 abandoned
US 07/456,790 12/29/89 CIP+ abandoned
EP 90109208.0 05/16/90 granted 0 402 644 08/16/95 05/15/2010
Austria 90109208.0 05/16/90 national converted E 126512 08/16/95 05/15/2010
Belgium 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Denmark 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
France 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Germany 90109208.0 05/16/90 national converted 69021645.9 08/16/95 05/15/2010
Great Britain 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Greece 90109208.0 05/16/90 national converted 3017447 08/16/95 05/15/2010
Israel 94425 05/17/90 issued P/94425 05/29/94 05/17/2010
Italy 90109208.0 05/16/90 national converted 52158/BE/95 08/16/95 05/15/2010
Luxembourg 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Netherlands 09109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Spain 09109208.0 05/16/90 national converted ES2076253T3 08/16/95 05/15/2010
Switzerland 0909208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Sweden 0909208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Australia 55770/90 05/22/90 issued 640,653 09/02/93 05/22/2010
Canada 2,017,193-6 05/18/90
China 90103721.4 05/19/90
Czech 2425-90 05/17/90
Republic
Finland 902449 05/17/90
Hungary 3090/90 05/18/90
Ireland 1809/90 05/18/90 issued 68431 05/23/96 05/18/2010
Israel 94425 05/17/90
Korea 90/7102 05/18/90
</TABLE>
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<TABLE>
<CAPTION>
PATENT FILING PATENT ISSUE EXPIRATION
COUNTRY APPL. NO. DATE TYPE STATUS NO. DATE DATE
------- --------- ---- ---- ------ --- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Mexico 20787 05/18/90
New Zealand 233710 05/17/90 issued 233710
Norway P902214 05/18/90 177301 08/23/95 05/18/201
Philippines 40530 05/17/90
Poland P-285247 05/18/90 163965 12/09/93
Portugal 94084 05/18/90 issued 94084 09/18/96 05/18/201
Russia 4743876/04 05/18/90
South 90/2820 05/18/90 issued 90/38230 02/27/91 05/18/2010
Taiwan 79104996 06/19/90 issued 54190 01/11/92 06/19/2010
US 07/619,825 11/29/90 continuation abandoned
US 07/944,705 09/05/91 continuation abandoned
US 07/788,269 11/05/91 CIP abandoned
US 07/969,383 10/30/92 CIP issued 5,364,866 11/15/94 11/15/2011
PCT 92/09276 11/04/92 WO/93/09102
EP 92/924151.1 11/04/92 pending
EP (Portugal) 92118982.5 11/05/92 pending
Australia 30570/92 11/04/92
Belarus 1715 11/04/92
Canada 2,121,253 11/04/92
Czech PV 1102-94 11/04/92
Republic
Finland 942052 11/04/92
Georgia 001977 11/04/92
Hungary P9401316 11/04/92
Israel 103622 11/03/92
Korea 94-701524 11/04/92
Kazakhstan 941593.1 11/04/92
Mexico 926370 11/05/92
Norway 941647 11/04/92
New 245006 11/03/92 issued 245006 05/17/96 11/03/2012
</TABLE>
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<TABLE>
<CAPTION>
PATENT FILING PATENT ISSUE EXPIRATION
COUNTRY APPL. NO. DATE TYPE STATUS NO. DATE DATE
------- --------- ---- ---- ------ --- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Philippines 45259 11/12/92
Poland P-303452 11/04/92
Romania 9400761 11/04/92
Russia 94028105.04 11/04/92
Slovak PV 0456-94 11/04/92
Republic
Taiwan 81108831 11/05/92
Uzbekistan 9500706.1 11/04/92
US 08/144,265 10/28/93 CIP abandoned
US 08/309,395 09/20/94 CIP** pending
US 08/329,000* 10/25/94 CIP** issued 5,658,911 08/19/97 08/19/2014
US 08/468,611 06/06/95 DIV** pending
PCT 94/12054 10/27/94 WO95/11680
EP 9590039.6 10/27/94 pending
Brazil PI 1101001.0 05/14/97 Pipeline
Canada 2175212 10/27/94
China 94194302 10/27/94
Czech PV 1238-96 10/27/94
Republic
Hungary P/P 00576 06/29/95 granted 211,853 11/06/95 06/29/2015
Indonesia 951058 06/08/95
Israel 111,498 10/27/94
Korea 96-702162 10/27/94
Mexico 94 8405 10/27/94
Norway p961686 10/27/94
New 275941 10/27/94
Zealand
Poland P314135 10/27/94
Romania 96-00888 10/27/94
Russia 96110214 10/27/94
Taiwan 83110396 11/10/94
</TABLE>
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<TABLE>
<CAPTION>
PATENT FILING PATENT ISSUE EXPIRATION
COUNTRY APPL. NO. DATE TYPE STATUS NO. DATE DATE
------- --------- ---- ---- ------ --- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
South 95/2653 10/28/94
Africa
</TABLE>
* subject to a 60 way restriction requirement; 329,000 survived as one to the
60 divisionals
** pending as one of the 60 divisionals
+ CIP (Continuation-in-part)
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APPENDIX B
MAJOR METABOLITES (PER SECTION 1.6)
- --------------------------------------------------------------------------------
Compound No. Name R1 R2 R3
- --------------------------------------------------------------------------------
rP88 8991 4-[3-[4-(6-fluoro-1,2- H CH(OH)CH3 OCH
benzisoxazol-3-yl)-1- 3
piperidinyl]propoxy]-3-
methoxy-[alpha]-methyl-
benzenemethanol
P89 9124 1-[4-[3-[4-(6-fluoro-1,2- H C(O)CH3 OH
benzisoxazol-3-yl)-1-
piperidinyl]propoxy]-3-
hydroxyphenyl]-ethanone
P94 11840 1-[4-[3-[4-(6-fluoro-1,2- H C(O)CH2OH OCH
benzisoxazol-3-yl)-1- 3
piperidinyl]propoxy]-3-
methoxyphenyl]-2-
hydroxyethanone
P89 9430 4-[3-[4-(6-fluoro-1,2- H CH(OH)CH3 OH
benzisoxazol-3-yl)-1-
piperidinyl]propoxy]-3-
hydroxy-[alpha]-
methylbenzenemethanol
P94 11677 4-[3-[4-(6-fluoro-1,2- OH CH(OH)CH3 OCH
benzisoxazol-3-yl)-1- 3
piperidinyl]propoxy]-2-
hydroxy-5-methoxy-[alpha]-
methylbenzenemethanol
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- --------------------------------------------------------------------------------
Compound No. Name R1 R2 R3
- --------------------------------------------------------------------------------
P94 11679 1-[4-[3-[4-(6-fluoro-1,2- OH C(O)CH3 OCH
benzisoxazol-3-yl)-1- 3
piperidinyl]propoxy]-2-
hydroxy-5-
methoxyphenyl]ethanone
P94 11702 1-[4-[3-[4-(6-fluoro-1,2- OH C(O)CH3 OH
benzisoxazol-3-yl)-1-
piperidinyl]propoxy]-2,5-
dihydroxyphenyl]-ethanone
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APPENDIX D
Sample Invoice
TITAN PHARMACEUTICALS, INC.
[Date]
Novartis Pharma AG
Zentraler Faktureneingang
Attn: Ms. M. Gnehm
BD&L Contract Administration
Lichstrasse 35
CH 4002 Basel
Switzerland
Dear Ms. Gnehm:
Re: Titan Pharmaceuticals, Inc./Sublicense Agreement - Iloperidone
This is an invoice requesting payment in connection with the above-captioned
agreement between Titan Pharmaceuticals, Inc. and Novartis Pharma AG.
Novartis Contract Code No.: [will be assigned by BD&L following execution]
Novartis Creditor No.: [will be assigned by BD&L following execution]
Reason for Payment: [please cite specific section or article in the
agreement]
Amount and Currency: [self-explanatory]
Bank Address and Account No.: [insert the name and address of the bank to
which the payment should be sent and the
account number to which it should be credited]
Sincerely yours,
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APPENDIX E
TITAN CONTRACTS WITH RESEARCH ORGANIZATIONS
IBAH, Inc. CLINICAL AND PHARMACEUTICS SERVICES MASTER
AGREEMENT AND ITS ENABLING EXHIBITS 1 THROUGH 8
EXHIBIT 1. ILOPERIDONE STUDY 300
EXHIBIT 2. ILOPERIDONE STUDY 302
EXHIBIT 3. ILOPERIDONE STUDY 306
EXHIBIT 4. RECEIPT AND STORAGE OF CLINICAL MATERIAL FOR
ILOPERIDONE CLINICAL STUDIES
EXHIBIT 5. ILOPERIDONE CLINICAL STABILITY PROGRAM
EXHIBIT 6. CLINICAL SUPPLY MATERIAL HANDLING OF ILOPERIDONE
EXHIBIT 7. ENCAPSULATION OF HALOPERIDOL TABLETS
EXHIBIT 8. ANALYTICAL TESTING TO EXTEND EXPIRATION DATES;
ANALYTICAL TESTING OF 40C/75RH SAMPLES; DESTRUCTION
OF RISPERIDONE, RESPERIDAL, AND HALOPERIDOL
SUPPLIES; DOCUMENTATION SUPPORT FOR IND FILING
(copies of exhibits will be provided by TITAN to NOVARTIS separately)
WIL RESEARCH LABORATORIES COMPLETION OF RODENT ONCOGENICITY
STUDIES
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A 24-MONTH ORAL ONCOGENICITY STUDY OF HP-873 IN MICE
A 24-MONTH ORAL ONCOGENICITY STUDY OF HP-873 IN RATS
(RESPONSIBILITY FOR THESE STUDIES WAS TRANSFERRED FROM HMRI TO TITAN)
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APPENDIX F
SPECIAL COUNTRIES IN TERRITORY REGARDING
HMRI'S PATENT PROTECTION (PER SECTION 8.2)
United States
PCT PCT (cont.)
Australia Estonia
Brazil Hungary
Bulgari Israel
Canada Mexico
China New Zealand
Czech Republic Norway
Kazakhstan Poland
EPO Russian
Austria Slovakia
Belgium South Korea
Denmark Non-PCT
Finland Argentina
France Chile
Germany Egypt
Great Britain Hong Kong
Greece India
Iceland Indonesia
Ireland Malaysia
Italy Philippines
Latvia Saudi Arabia
Lithuania South Africa
Luxembourg Taiwan
Monaco Thailand
Netherlands Venezuela
Portugal
Romania
Singapore
Slovenia
Spain
Sweden
Switzerland with Liechtenstein
Turkey
Ukraine
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