<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 4, 1998
REGISTRATION NO. 333-57165
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 7
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CENTAUR PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 2834 77-030431
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
484 OAKMEAD PARKWAY
SUNNYVALE, CALIFORNIA 94086
(408) 822-1600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOSEPH L. TURNER
CHIEF FINANCIAL OFFICER
CENTAUR PHARMACEUTICALS, INC.
484 OAKMEAD PARKWAY
SUNNYVALE, CALIFORNIA 94086
(408) 822-1600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
BARRY J. KRAMER, ESQ. STEPHAN HUTTER, ESQ.
DAVID K. MICHAELS, ESQ. SHEARMAN & STERLING
JODY HUCKO, ESQ. BOCKENHEIMER LANDSTRASSE 55
JAMES M. HACKETT, ESQ. 60325 FRANKFURT AM MAIN
FENWICK & WEST LLP (49 69) 97107 230
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT 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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses to be paid by the
Company in connection with the sale of the shares of Common Stock being
registered hereby. All amounts are estimates except for the Securities and
Exchange Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 27,878
Reimbursement of Managers' expenses(*)........................ 401,220
Accounting fees and expenses.................................. 325,000
Legal fees and expenses....................................... 600,000
Investor relations fees and expenses.......................... 450,000
Road show expenses............................................ 75,000
Transfer agent and registrar fees and expenses................ 10,000
Miscellaneous................................................. 10,902
----------
Total..................................................... $1,900,000
==========
</TABLE>
- --------
* Pursuant to the U.S. Underwriting Agreement and the International
Underwriting Agreement, the Managers have agreed to pay certain costs and
expenses of this offering, including the Swiss Exchange listing fee,
printing and engraving expenses and blue sky fees and expenses. The Company
has agreed to reimburse the Managers for these and certain other expenses,
up to CHF 600,000 ($401,220 based on an exchange rate of $0.6687 per Swiss
franc).
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Delaware General Corporation Law, the Registrant's
Certificate of Incorporation includes a provision that eliminates the personal
liability of its directors for monetary damages for breach of fiduciary duty
as a director except for liability (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
As permitted by Section 145 of the Delaware General Corporation Law, the
Bylaws of the Registrant provide that (i) the Registrant is required to
indemnify its directors and executive officers to the fullest extent permitted
by the Delaware General Corporation Law, (ii) the Registrant may indemnify its
other officers, employees and agents as set forth in the Delaware General
Corporation Law, (iii) to the fullest extent permitted by the Delaware General
Corporation Law, the Registrant is required to advance expenses, as incurred,
to its directors and executive officers in connection with a legal proceeding
(subject to certain exceptions), (iv) the rights conferred in the Bylaws are
not exclusive, (v) the Registrant is authorized to enter into indemnification
agreements with its directors, officers, employees and agents and (vi) the
Registrant may not retroactively amend its Bylaws provisions relating to
indemnity.
The Registrant's policy is to enter into indemnity agreements with each of
its directors and executive officers. The indemnity agreements provide that
directors and executive officers will be indemnified and held harmless to the
fullest possible extent permitted by law including against all expenses
(including attorneys' fees), judgments, fines and settlement amounts paid or
reasonably incurred by them in any action, suit or proceeding, including any
derivative action by or in the right of the Registrant, on account of their
services as directors, officers, employees or agents of the Registrant or as
directors, officers, employees or agents of any other company or enterprise
when they are serving in such capacities at the request of the Registrant. The
Registrant will not be obligated pursuant to the agreements to indemnify or
advance expenses to an indemnified party with respect to proceedings or claims
(i) initiated by the indemnified party and not by way of defense, except with
respect to a proceeding authorized by the Board of Directors and successful
proceedings brought to enforce a right to indemnification under the Indemnity
Agreement, (ii) for any amounts paid in settlement of a proceeding unless the
Registrant consents to such settlement, (iii) on account of any suit in which
judgment is rendered
II-1
<PAGE>
against the indemnified party for an accounting of profits made from the
purchase or sale by the indemnified party of securities of the Registrant
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934 and related laws, (iv) on account of conduct by a director which is
finally adjudged to have been in bad faith or conduct that the director did
not reasonably believe to be in, or not opposed to, the best interests of the
Registrant, (v) on account of any criminal action or proceeding arising out of
conduct that the director had reasonable cause to believe was unlawful or (vi)
if a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful.
The indemnity agreement also provides for contribution in certain situations
in which the Registrant and a director or executive officer are jointly liable
but indemnification is unavailable, such contribution to be based on the
relative benefits received and the relative fault of the Registrant and the
director or executive officer. Contribution is not allowed in connection with
a Section 16(b) judgment, an adjudication of bad faith or conduct that a
director or executive officer did not reasonably believe to be in, or not
opposed to, the best interests of the Registrant or a proceeding arising out
of conduct a director or executive officer had reasonable cause to believe was
unlawful.
The indemnity agreement requires a director or executive officer to
reimburse the Registrant for all expenses advanced only to the extent it is
ultimately determined that the director or executive officer is not entitled,
under Delaware law, the Bylaws, the indemnity agreement or otherwise, to be
indemnified for such expenses. The indemnity agreement provides that it is not
exclusive of any rights a director or executive officer may have under the
Certificate of Incorporation, Bylaws, other agreements, any majority-in-
interest vote of the stockholders or vote of disinterested directors, the
Delaware law or otherwise.
The indemnification provision in the Bylaws, and the indemnity agreements
entered into between the Registrant and its directors and executive officers,
may be sufficiently broad to permit indemnification of the Registrant's
executive officers and directors for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act").
As authorized by the Registrant's Bylaws, the Registrant, with approval by
the Board, expects to purchase director and officer liability insurance.
See also the undertakings set out in response to Item 17.
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
<TABLE>
<CAPTION>
DOCUMENT EXHIBIT NUMBER
-------- --------------
<S> <C>
U.S. Underwriting Agreement............................... 1.01
International Underwriting Agreement...................... 1.02
Registrant's Restated Certificate of Incorporation........ 3.01
Form of Registrant's Amended and Restated Certificate of
Incorporation to be filed immediately following the
offering................................................. 3.02
Registrant's Bylaws....................................... 3.03
Third Amended and Restated Investors' Rights Agreement,
dated as of February 14, 1997............................ 4.02
Form of Indemnification Agreement......................... 10.05
</TABLE>
II-2
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following table sets forth information regarding all securities sold by
the Registrant since July 1, 1995.
<TABLE>
<CAPTION>
AGGREGATE PURCHASE
DATE OF TITLE OF NUMBER OF PRICE AND FORM OF
CLASS OF PURCHASERS SALE(S) SECURITIES(1) SECURITIES CONSIDERATION
------------------- ---------- ------------------- ---------- -------------------
<S> <C> <C> <C> <C>
Neil Solomon and Andrew
Newcorn................. 2/15/96 Common Stock 2,730 Issued in
connection with
consulting services
rendered
Prospektiva Investments. 8/12/96 Warrant to purchase 10,000 Issued in
Common Stock at connection with
$3.00 per share consulting services
rendered
52 unaffiliated
purchasers and the
following purchasers
that were then officers,
directors and their
affiliates, and greater
than 5% stockholders:
Paul F. Glenn, Trustee,
Paul F. Glenn Revocable
Trust; Glenn Foundation
for Medical Research;
Brian D. Frenzel; Selvi
Vescovi; Charter
Ventures II, L.P.; Menlo
Ventures IV, L.P.;
Oklahoma Medical
Research Foundation; and
Dillon, Read & Co. Inc.,
as agent................ 2/14/97 to Series D Preferred 2,200,000 $16,500,000 cash
10/3/97 Stock
Prospektiva Investments. 9/19/97 Warrant to purchase 10,000 Issued in
Common Stock at connection with
$3.00 per share consulting services
rendered
Hans-Jurg Buss.......... 2/14/98 Warrant to purchase 10,000 Issued in
Common Stock at connection with
$4.00 per share consulting services
rendered
Steinar Engelsen........ 2/14/98 Warrant to purchase 5,000 Issued in
Common Stock at connection with
$4.00 per share consulting services
rendered
149 officers, directors,
employees
and/or consultants...... 7/1/95 to Options to purchase 1,344,979 Options granted for
7/17/98 Common Stock under no cash
the 1993 Equity consideration
Incentive Plan.
Exercise prices
range from $0.30 to
$10.00 per
share.(2)
27 officers, directors,
employees
and/or consultants...... 7/1/95 to Common Stock(3) 514,550 $97,576 cash (upon
6/30/98 exercise of stock
options with
exercise prices
ranging from $0.10
to $4.00 per share)
Private Equity Bridge
Invest Ltd.............. 7/13/98 Common Stock 26,550 $51,109 cash (upon
exercise of a
warrant with
exercise price of
$1.925 per share)
Aberlyn Holding Company,
Inc..................... 7/23/98 Common Stock 5,695 $10,963 in Common
Stock of the
Company (upon net
exercise of a
warrant with
exercise price of
$1.925 per share)
</TABLE>
- --------
(1) Unless otherwise noted, all sales were made in reliance on Section 4(2) of
the Securities Act and/or Regulation D promulgated under the Securities
Act. The securities were sold to a limited number of people with no
general solicitation or advertising. The purchasers were sophisticated
investors with access to all relevant information necessary to evaluate
the investment who represented to the Registrant that the shares were
being acquired for investment.
(2) With respect to the grant of stock options, exemptions from registration
under the Securities Act were unnecessary in that none of such
transactions involved a "sale" of securities as such term is used in
Section 2(3) of the Securities Act.
(3) All sales of Common Stock pursuant to the exercise of stock options
granted under the Registrant's stock option plan were made pursuant to the
exemption from the registration requirements of the Securities Act
afforded by Rule 701 promulgated under the Securities Act as transactions
pursuant to a compensatory benefit plan or a written contract relating to
compensation.
II-3
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
1.01 --U.S. Underwriting Agreement.*
1.02 --International Underwriting Agreement.*
1.03 --Letter Agreement between the Company and the Global Coordinator.*
3.01 --Registrant's Restated Certificate of Incorporation.*
3.02 --Form of Registrant's Amended and Restated Certificate of Incorpo-
ration to be filed immediately following the offering.*
3.03 --Registrant's Bylaws.*
4.01 --Form of Specimen Certificate for Registrant's Common Stock.*
4.02 --Third Amended and Restated Investors' Rights Agreement, dated as
of February 14, 1997.*
4.03 --Amendment to Third Amended and Restated Investors' Rights Agree-
ment and Third Amended and Restated Voting Agreement and Approval
of Election of Director, dated as of June 9, 1998.*
5.01 --Opinion of Fenwick & West LLP regarding legality of the securities
being registered.*
10.01 --Registrant's 1993 Equity Incentive Plan, as amended.*
10.02 --Registrant's 1998 Equity Incentive Plan.*
10.03 --Registrant's 1998 Directors Stock Option Plan.*
10.04 --Registrant's 1998 Employee Stock Purchase Plan.*
10.05 --Form of Indemnification Agreement entered into by Registrant with
each of its directors and executive officers.*
10.06 --Master Loan and Security Agreement between Registrant and Finova
Technology Finance, Inc., dated as of November 3, 1997; Loan and
Security Agreement No. 1 dated April 22, 1998 between Registrant
and Finova Technology Finance, Inc.; Commitment Letter between
the Registrant and Finova Technology Finance, Inc., dated as of
October 7, 1997 (as revised on December 23, 1997), as amended
April 20, 1998; Leasehold Deeds of Trust dated November 3, 1997
executed by the Registrant; Promissory Note dated April 22, 1998
executed by Registrant.*
10.07 --Lease for 484 Oakmead Parkway, Sunnyvale, CA dated February 25,
1993, as amended August 18, 1995.*
10.08 --Sublease for additional space at 484 Oakmead Parkway, Sunnyvale,
CA dated March 22, 1995.*
10.09 --Lease for 1220 Memorex Drive, Suite 100, Santa Clara, CA dated
February 12, 1997.*
10.10 --Lease for 1220 Memorex Drive, Suites 200 and 300, Santa Clara, CA
dated June 12, 1997.*
10.11 --License with UKRF and OMRF dated July 15, 1992.+*
10.12 --First Amendment to License with UKRF and OMRF dated June 29,
1995.+*
10.13 --Development, License and Marketing Agreement with Astra AB dated
June 26, 1995.+
10.14 --Supply Agreement with Astra AB dated June 26, 1995.+*
10.15 --Amendments to Development, License and Marketing Agreement with
Astra AB dated July 8, 1997 and October 7, 1997.*
10.16 --Development, Patent and Trademark/Know-How Licensing and Supply
Agreement--CPI-1189 with H. Lundbeck A/S dated October 31, 1996,
as amended as of October 31, 1996.+
10.17 --Employment Agreement with Brian D. Frenzel dated December 1, 1993,
and associated Stock Option Agreements.*
10.18 --License Agreement dated January 15, 1998 between Registrant and
Cutanix Corporation.+*
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
10.19 --Services and Supply Agreement dated January 15, 1998 between
Registrant and Cutanix Corporation.+*
10.20 --Stockholders' Agreement dated January 15, 1998 by and among
Cutanix Corporation and certain stockholders of Cutanix
Corporation.*
10.21 --License Agreement dated January 1, 1998 by and among OMRF and
Registrant.+*
23.01 --Consent of Fenwick & West LLP (included in Exhibit 5.01).*
23.02 --Consent of Ernst & Young LLP, independent auditors.*
24.01 --Power of Attorney.*
27.01 --Amended Financial Data Schedule.*
27.02 --Financial Data Schedule.*
</TABLE>
- --------
* Previously filed.
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
(b) The following financial statement schedule is filed herewith:
Schedule II--Valuation and Qualifying Accounts
Other financial statement schedules are omitted because the information
called for is not required or is shown either in the financial statements or
the notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes to provide to the Managers at
the closing specified in the Purchase Agreement certificates in such
denominations and registered in such names as required by the Managers to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS DULY
CAUSED THIS AMENDMENT TO ITS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF SUNNYVALE, STATE
OF CALIFORNIA, ON THE 4TH DAY OF SEPTEMBER, 1998.
Centaur Pharmaceuticals, Inc.
/s/ Joseph L. Turner
By: _________________________________
Joseph L. TurnerChief Financial
Officer, Treasurer and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT TO THE
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
Principal Executive Officer:
* President, Chief Executive September 4, 1998
____________________________________ Officer and a Director
Brian D. Frenzel
Principal Financial Officer and
Principal Accounting Officer:
/s/ Joseph L. Turner Chief Financial Officer, September 4, 1998
____________________________________ Treasurer and Secretary
Joseph L. Turner
Additional Directors:
* Director September 4, 1998
____________________________________
John M. Carney
* Director September 4, 1998
____________________________________
Mark R. Collins
* Director September 4, 1998
____________________________________
Graham K. Crooke
* Director September 4, 1998
____________________________________
Charles R. Engles
* Director September 4, 1998
____________________________________
Steinar J. Engelsen
* Director September 4, 1998
____________________________________
Selvi Vescovi
*By: /s/ Joseph L. Turner
____________________________________
Joseph L. Turner
Attorney-in-fact
</TABLE>
II-6
<PAGE>
CENTAUR PHARMACEUTICALS, INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
--------------------
BALANCE AT CHARGED CHARGED BALANCE AT
BEGINNING TO COSTS AGAINST END OF
OF YEAR AND EXPENSES REVENUE DEDUCTIONS YEAR
---------- ------------ ------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1997 deducted from
asset account:
Allowance for doubtful
accounts.............. $ 0 $ -- $1,600 $ 0 $1,600
======= ======= ====== ====== ======
Year ended December 31,
1996 deducted from
asset account:
Allowance for doubtful
accounts.............. $ 0 $ -- $ -- $ -- $ 0
======= ======= ====== ====== ======
Year ended December 31,
1995 deducted from
asset account:
Allowance for doubtful
accounts.............. $ 0 $ -- $ -- $ -- $ 0
======= ======= ====== ====== ======
</TABLE>
S-1
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
1.01 --U.S. Underwriting Agreement.*
1.02 --International Underwriting Agreement.*
1.03 --Letter Agreement between the Company and the Global Coordinator.*
3.01 --Registrant's Restated Certificate of Incorporation.*
3.02 --Form of Registrant's Amended and Restated Certificate of Incorpo-
ration to be filed immediately following the offering.*
3.03 --Registrant's Bylaws.*
4.01 --Form of Specimen Certificate for Registrant's Common Stock.*
4.02 --Third Amended and Restated Investors' Rights Agreement, dated as
of February 14, 1997.*
4.03 --Amendment to Third Amended and Restated Investors' Rights Agree-
ment and Third Amended and Restated Voting Agreement and Approval
of Election of Director, dated as of June 9, 1998.*
5.01 --Opinion of Fenwick & West LLP regarding legality of the securities
being registered.*
10.01 --Registrant's 1993 Equity Incentive Plan, as amended.*
10.02 --Registrant's 1998 Equity Incentive Plan.*
10.03 --Registrant's 1998 Directors Stock Option Plan.*
10.04 --Registrant's 1998 Employee Stock Purchase Plan.*
10.05 --Form of Indemnification Agreement entered into by Registrant with
each of its directors and executive officers.*
10.06 --Master Loan and Security Agreement between Registrant and Finova
Technology Finance, Inc., dated as of November 3, 1997; Loan and
Security Agreement No. 1 dated April 22, 1998 between Registrant
and Finova Technology Finance, Inc.; Commitment Letter between
the Registrant and Finova Technology Finance, Inc., dated as of
October 7, 1997 (as revised on December 23, 1997), as amended
April 20, 1998; Leasehold Deeds of Trust dated November 3, 1997
executed by the Registrant; Promissory Note dated April 22, 1998
executed by Registrant.*
10.07 --Lease for 484 Oakmead Parkway, Sunnyvale, CA dated February 25,
1993, as amended August 18, 1995.*
10.08 --Sublease for additional space at 484 Oakmead Parkway, Sunnyvale,
CA dated March 22, 1995.*
10.09 --Lease for 1220 Memorex Drive, Suite 100, Santa Clara, CA dated
February 12, 1997.*
10.10 --Lease for 1220 Memorex Drive, Suites 200 and 300, Santa Clara, CA
dated June 12, 1997.*
10.11 --License with UKRF and OMRF dated July 15, 1992.+*
10.12 --First Amendment to License with UKRF and OMRF dated June 29,
1995.+*
10.13 --Development, License and Marketing Agreement with Astra AB dated
June 26, 1995.+
10.14 --Supply Agreement with Astra AB dated June 26, 1995.+*
10.15 --Amendments to Development, License and Marketing Agreement with
Astra AB dated July 8, 1997 and October 7, 1997.*
10.16 --Development, Patent and Trademark/Know-How Licensing and Supply
Agreement--CPI-1189 with H. Lundbeck A/S dated October 31, 1996,
as amended as of October 31, 1996.+
10.17 --Employment Agreement with Brian D. Frenzel dated December 1, 1993,
and associated Stock Option Agreements.*
10.18 --License Agreement dated January 15, 1998 between Registrant and
Cutanix Corporation.+*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
10.19 --Services and Supply Agreement dated January 15, 1998 between
Registrant and Cutanix Corporation.+*
10.20 --Stockholders' Agreement dated January 15, 1998 by and among
Cutanix Corporation and certain stockholders of Cutanix
Corporation.*
10.21 --License Agreement dated January 1, 1998 by and among OMRF and
Registrant.+*
23.01 --Consent of Fenwick & West LLP (included in Exhibit 5.01).*
23.02 --Consent of Ernst & Young LLP, independent auditors.*
24.01 --Power of Attorney.*
27.01 --Amended Financial Data Schedule.*
27.02 --Financial Data Schedule.*
</TABLE>
- --------
* Previously filed.
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
<PAGE>
EXHIBIT 10.13
DEVELOPMENT, LICENSE AND MARKETING AGREEMENT
BY AND BETWEEN
ASTRA AB
AND
CENTAUR PHARMACEUTICALS, INC.
DATED JUNE 26, 1995
- --------------------------------------------------------------------------------
[*] - Confidential treatment is being sought with respect to this portion of
this agreement. This portion has been omitted from this filing and has
been filed separately with the Securities and Exchange Commission.
<PAGE>
<TABLE>
<S> <C> <C>
1. DEFINITIONS................................................ -2-
2. GRANT...................................................... -7-
2.1 License Grant to ASTRA - ASTRA License..................... -7-
(a) Exclusive License.......................................... -8-
(b) Co-Exclusive License....................................... -8-
2.2 ASTRA Affiliates........................................... -8-
2.3 License Grant to CENTAUR - CENTAUR Grant................... -8-
2.4 CENTAUR Co-Promote Rights.................................. -8-
2.5 Oklahoma/Kentucky License.................................. -9-
2.6 Access to CENTAUR Technology............................... -9-
3. STEERING COMMITTEE AND DAY TO DAY
MANAGEMENT OF THE PROJECT WORK............................. -9-
3.1 Formation of Steering Committee............................ -9-
3.2 Meetings of the Steering Committee......................... -9-
3.3 Steering Committee Review of Project Work.................. -9-
3.4 Steering Committee - Dispute Resolution.................... -10-
3.5 Project Groups............................................. -10-
3.6 Third Persons.............................................. -10-
4. RESEARCH WORK.............................................. -10-
4.1 Commencement and Completion of Research Work............... -10-
4.2 R&D Plans.................................................. -10-
4.3 R&D Period................................................. -11-
5. FUNDING OF RESEARCH WORK................................... -11-
5.1 Budgets.................................................... -11-
5.2 CENTAUR FTE................................................ -11-
5.3 ASTRA Payments of Annual Funding/Out-Of-Pocket
Research Costs............................................. -11-
5.4 Funding of R&D Periods - Annual Maximum.................... -12-
5.5 CENTAUR's Records.......................................... -12-
6. DEVELOPMENT WORK........................................... -12-
6.1 Development Work - ASTRA................................... -12-
6.2 Development Work - CENTAUR................................. -12-
6.3 Regulatory Approvals....................................... -12-
6.4 Development of Licensed Product - Major Markets............ -13-
(a) NDA Approval............................................... -13-
(b) First Commercial Sale...................................... -13-
6.5 Development of Licensed Product - Other Than
Major Markets.............................................. -13-
6.6 ASTRA Non-Compliance....................................... -13-
6.7 Notification of Development Work........................... -14-
7. REMUNERATION TO CENTAUR.................................... -14-
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
7.1 Total Compensation to CENTAUR.............................. -14-
7.2 Payments................................................... -14-
(a) Effective Date............................................. -14-
(b) Selection of First CD of SP................................ -14-
(c) Selection of First CD of AP................................ -14-
(d) First SP IND in U.S........................................ -15-
(e) First SP IND in EC Major Market or Japan................... -15-
(f) First AP IND in U.S........................................ -15-
(g) First AP IND in EC Major Market or Japan................... -15-
(h) First SP Phase III Trial in U.S............................ -15-
(i) First AP Phase III Trial in EC Major Markets or Japan...... -15-
(j) First AP Phase III Trial in U.S............................ -15-
(k) First AP Phase III Trial in EC Major Markets or Japan...... -15-
(l) First SP NDA Filing in U.S................................. -15-
(m) First SP NDA Filing in EC Major Market or Japan............ -16-
(n) First AP NDA Filing in U.S................................. -16-
(o) First AP NDA Filing in EC Major Market or Japan............ -16-
(p) First SP NDA Approval in U.S............................... -16-
(q) First SP NDA Approval in EC Major Market or Japan.......... -16-
(r) First AP NDA Approval in U.S............................... -16-
(s) First AP NDA Approval in EC Major Market or Japan.......... -16-
7.3 Net Sales Royalty.......................................... -16-
(a) Countries Where CENTAUR Patents are Effective.............. -16-
(b) Countries Where CENTAUR Patents Inapplicable............... -17-
7.4 CENTAUR Default/Bankruptcy................................. -17-
7.5 Termination of CENTAUR Royalty - ASTRA Paid Up License..... -17-
7.6 Third Party Royalties on Sales of Licensed Product......... -17-
7.7 Computation and Payment of Royalty to CENTAUR.............. -17-
7.8 ASTRA Records.............................................. -18-
7.9 CENTAUR Audit.............................................. -18-
8. OPTION TO CO-PROMOTE IN THE U.S............................ -18-
8.1 Notification to Co-Promote................................. -18-
8.2 Election of Co-Promotion Rights............................ -18-
(a) Co-Promote Market Plan..................................... -18-
(b) CENTAUR Medical Representatives............................ -19-
(c) Co-Promote Profits......................................... -19-
8.3 Co-Promote Term............................................ -20-
9. EXCHANGE OF INFORMATION.................................... -20-
9.1 Communication of Information............................... -20-
10. REPRESENTATIONS AND WARRANTIES............................. -20-
10.1 General Representations.................................... -20-
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C> <C>
(a) Duly Organized............................................. -20-
(b) Due Execution.............................................. -20-
(c) No Third Party Approval.................................... -21-
(d) Binding Agreement.......................................... -21-
(e) Governmental Status........................................ -21-
(f) Full Disclosure............................................ -21-
10.2 CENTAUR Representations.................................... -21-
11. PUBLICATIONS............................................... -22-
11.1 Disclosure of Know-How..................................... -22-
11.2 Use of Other Party's Name.................................. -22-
12. MARKETING OF LICENSED PRODUCT.............................. -22-
12.1 ASTRA's Commercialization of Licensed Product.............. -22-
12.2 Labeling................................................... -22-
13. INVENTION, IMPROVEMENTS AND DISCOVERIES.................... -23-
13.1 Ownership of Technology.................................... -23-
14. PATENTS AND PATENT APPLICATIONS............................ -23-
14.1 Maintenance of CENTAUR Patents............................. -23-
14.2 CENTAUR New Inventions Patents............................. -23-
14.3 Joint Patents.............................................. -24-
(a) Joint Patent - ASTRA Default or Bankruptcy................. -24-
(b) Joint Patent - CENTAUR Default or Bankruptcy............... -24-
14.4 Notification With Respect to Patents....................... -25-
14.5 CENTAUR's Election......................................... -25-
14.6 ASTRA's Election........................................... -25-
14.7 Minimum Patent Protection.................................. -25-
15. PATENT INFRINGEMENTS....................................... -26-
15.1 Notification of Alleged Patent Infringement................ -26-
15.2 Third Party Claims......................................... -26-
15.3 Payment of Additional Third Party Royalties................ -26-
15.4 Infringement of CENTAUR Patents/Joint Patents/
New Inventions Patents..................................... -26-
15.5 Monetary Recovery - ASTRA Prosecution...................... -27-
15.6 Monetary Recovery - CENTAUR Prosecution.................... -27-
16. CONFIDENTIALITY............................................ -27-
16.1 Treatment of Confidentiality............................... -27-
16.2 Release from Restrictions.................................. -27-
17. TRADEMARK.................................................. -28-
18. EXCLUSIVITY AND OPTION TO EXTEND THE LICENSE............... -28-
18.1 Restrictions............................................... -28-
18.2 ASTRA Right of First Negotiation........................... -28-
19. WARRANTY DISCLAIMER........................................ -29-
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
19.1 Disclaimer by Parties...................................... -29-
(a) CENTAUR Technology/Product Know-How........................ -29-
(b) Third Party Infringement................................... -29-
(c) Prosecution................................................ -29-
(d) Use of Name/Trademark...................................... -29-
(e) CENTAUR Limitation......................................... -29-
(f) ASTRA Limitation........................................... -29-
20. TERM AND TERMINATION....................................... -30-
20.1 Term....................................................... -30-
20.2 Default.................................................... -30-
20.3 Insolvency or Bankruptcy................................... -30-
20.4 Special Termination Provisions............................. -31-
20.5 Effect of Termination of License Agreement................. -31-
(a) Existing Obligations....................................... -31-
(b) Expiration of Term or CENTAUR Default or Bankruptcy........ -31-
(c) Expiration of Term or ASTRA Default or Breach.............. -31-
21. MISCELLANEOUS PROVISIONS................................... -32-
21.1 No Partnership............................................. -32-
21.2 Assignments................................................ -32-
21.3 Force Majeure.............................................. -32-
21.4 No Trademark Rights........................................ -33-
21.5 Public Announcements....................................... -33-
21.6 Entire Agreement of the Parties and Amendment.............. -33-
21.7 Severability............................................... -33-
21.8 Captions................................................... -34-
21.9 Notice and Delivery........................................ -34-
21.10 Limitation of Liability.................................... -34-
21.11 ASTRA Indemnification...................................... -34-
21.12 CENTAUR Indemnification.................................... -35-
21.13 Remedies Cumulative........................................ -35-
21.14 Governing Law.............................................. -35-
22. RESOLUTION OF DISPUTES..................................... -35-
22.1 General.................................................... -35-
22.2 Dispute Resolution Process................................. -35-
(a) Selection of Arbitrators................................... -35-
(b) Written Proposals.......................................... -36-
(c) Hearing.................................................... -36-
(d) Ruling..................................................... -36-
22.3 Arbitration Costs.......................................... -36-
22.4 Attorneys' Fees/Costs...................................... -37-
</TABLE>
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<PAGE>
Appendix 1 - Supply Agreement
Appendix 2 - CENTAUR Licenses
Appendix 3 - Oklahoma/Kentucky License
Appendix 4 - ASTRA Strategic Research Areas
Appendix 5 - First Amendment to CENTAUR Licenses
-v-
<PAGE>
DEVELOPMENT, LICENSE AND MARKETING AGREEMENT
This Development, License and Marketing Agreement (the "LICENSE AGREEMENT"),
entered into as of June 26, 1995 (the "EFFECTIVE DATE"), is made by and between
ASTRA AB, a corporation organized and existing under the laws of Sweden, S-151
85 Sodertalje, Sweden ("ASTRA")
and
CENTAUR PHARMACEUTICALS, INC., a corporation organized and existing under the
laws of the State of Delaware, 484 Oakmead Parkway, Sunnyvale CA 94086, USA
("CENTAUR").
WITNESSETH
WHEREAS, ASTRA, through its fully owned Affiliate, Astra Arcus AB, inter
alia is conducting research and development of agents for diseases of the
central nervous system; and
WHEREAS, CENTAUR has certain proprietary information comprising expertise,
know-how and patents in the Field; and
WHEREAS, the parties desire to enter into a collaborative research and
development program in the Field; and
WHEREAS, CENTAUR is willing to grant ASTRA an exclusive, worldwide right and
license to commercialize Licensed Product under the CENTAUR Technology and
Product Know-How, with a retained co-promotion right for CENTAUR in the United
States; and
WHEREAS, CENTAUR and ASTRA as of the Effective Date, have entered into the
Supply Agreement, a copy of which is attached hereto as Appendix 1, regarding
----------
supply of Substance to be included in Licensed Product.
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, the parties agree as follows:
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<PAGE>
1. DEFINITIONS
-----------
As used herein, the following terms have the following meaning:
1.1 "AFFILIATE" means any company or entity which controls, is controlled by or
---------
is under common control with a party to this License Agreement. "CONTROL"
-------
shall mean direct or indirect ownership of at least fifty percent (50%) of
the stock or shares entitled to vote for the election of directors or direct
or indirect ownership of at least fifty percent (50%) of the equity interest
with the power to direct the management and policies of such non-corporate
entities. The terms "ASTRA" and "CENTAUR" as used herein shall be deemed to
include Affiliates of ASTRA and CENTAUR respectively.
1.2 The "ALZHEIMERS' PROJECT" or "AP" means the development of spin trapping
------------------- --
agents and derivatives and compositions thereof used as free radical
scavengers and/or therapeutics for the treatment of Alzheimer's disease, as
specified in the R&D Plan.
1.3 "ANNUAL FUNDING" has the meaning provided in Section 5.4.
--------------
1.4 "ARCUS" means Astra Arcus AB, S-151 85 Sodertalje, Sweden, which company is
-----
authorized by ASTRA to represent ASTRA in all aspects under this License
Agreement.
1.5 "ASTRA LICENSE" has the meaning provided in Section 2.1.
-------------
1.6 "BANKRUPTCY" has the meaning provided in Section 20.3.
----------
1.7 "CANDIDATE DRUG" or "CD" means any compound selected hereunder for GLP
-------------- --
safety and/or other studies necessary for IND filing in the Field.
1.8 "CENTAUR GRANT" has the meaning provided in Section 2.3.
-------------
1.9 "CENTAUR LICENSES" mean collectively and as attached hereto as Appendix 2:
---------------- ----------
(a) License Agreement dated as of July 15, 1992 by and among Oklahoma
Medical Research Foundation, The University of Kentucky Research
Foundation and CENTAUR,
(b) Research Study Agreement dated as of February 1, 1993 by and between
CENTAUR and Oklahoma Medical Research Foundation,
(c) Research Study Agreement dated as of June 6, 1994 by and between
-2-
<PAGE>
CENTAUR and Oklahoma Medical Research Foundation,
(d) Research Study Renewal Agreement dated as of January 1, 1995 by and
between CENTAUR and Oklahoma Medical Research Foundation, and
(e) Research Study Agreement dated as of February 1, 1995 by and between
CENTAUR and the Experimental Research Center at Lund University
Hospital,
as the same may be amended, extended or modified from time to time during the
Term of this License Agreement.
1.10 "CENTAUR PATENTS" means collectively:
---------------
(a) the patents and patent applications, if any, listed in the CENTAUR
Patents index dated as of June 26, 1995 and initialed by the
parties,
(b) all additional chemical entity patents with respect to Substance for
Licensed Product that are purchased by or licensed to CENTAUR from
Third Persons and under which CENTAUR has the right to grant
licenses to ASTRA during the Term hereof (collectively the "NEW
CHEMICAL ENTITY PATENTS"), and
(c) all "New Inventions Patents", as defined in Section 14.2,
including with respect to all such patents, all additions, divisions,
continuations, continuations-in-part, substitutions, extensions, patent term
extensions and renewals thereof and all patents issuing from such patent
applications and their foreign counterparts, provided, however, that all New
Chemical Entity Patents and New Inventions Patents referenced in this Section
1.10(b) and (c) shall only be deemed to be "CENTAUR Patents" pursuant to the
provisions of Section 14.6. Joint Patents shall not be deemed to be "CENTAUR
Patents".
1.11 "CENTAUR TECHNOLOGY" means collectively (i) CENTAUR Patents, (ii) CENTAUR
------------------
Know-How now or hereafter owned by or licensed to CENTAUR or under which
CENTAUR has, or may in the future have, the right to grant licenses to
ASTRA during the Term of this License Agreement that are used or useful in
the research, development, manufacture, use or sale of Substance and
Licensed Product, and (iii) CENTAUR's interest in the Joint Patents and
Joint Project Technology.
1.12 "CO-PROMOTE" shall mean the right of CENTAUR to Co-Promote Licensed
----------
Product in the United States pursuant to Section 8.
1.13 "CONFIDENTIAL INFORMATION" shall mean any and all information of or about
------------------------
a party
-3-
<PAGE>
including all information relating to any technology, product, process or
intellectual property of such party (including, but not limited to, owned
or licensed intellectual property rights, data, know-how, samples,
technical and non-technical materials, and specifications) as well as any
business plan, financial information, or other confidential commercial
information of or about such other party. Notwithstanding the foregoing,
specific information shall not be considered "Confidential Information"
with respect to such party to the extent that the other party possessing
such information can demonstrate by written record or other suitable
physical evidence that:
(a) such specific information was lawfully in such other party's
possession or control prior to the time such information was
disclosed to such other party by the party to whom the information
relates,
(b) such specific information was developed by such other party
independently of the Confidential Information of the other party,
(c) such specific information was lawfully obtained by such other party
from a third party under no obligation of confidentiality to the
party to whom such information relates, or
(d) such specific information was at the time it was disclosed or
obtained by such other party, or thereafter became, publicly known
otherwise than through a breach by such other party of such other
party's obligations to the party to whom such information relates,
provided, however, that disclosure of such information to a
regulatory authority or governmental body, unless it becomes widely
disseminated, will not be considered publicly known.
1.14 "DEFAULT" has the meaning provided in Section 20.2.
-------
1.15 "DEVELOPMENT WORK" means all work reasonably necessary to develop a CD
----------------
into a Licensed Product approved for marketing and sale by the relevant
regulatory authorities in the Major Markets.
1.16 "DOLLAR" and "$" shall mean United States dollars.
------ -
1.17 "EC" shall mean the member countries of the European Union, as presently
--
exist and as may be in the future.
1.18 "FDA" shall mean the United States Food and Drug Administration.
---
1.19 "FTES" means the equivalent of one person devoted full time for one year
----
(consisting of
-4-
<PAGE>
a single person devoted full time or a number of persons devoted part
time) to carrying out CENTAUR's obligations to perform Project Work as
measured by CENTAUR's time allocation practices.
1.20 "FIELD" means the fields of treatment specified in the SP and the AP
-----
through the use of spin trapping agents and derivatives and compositions
thereof used as free radical scavengers.
1.21 "FIRST COMMERCIAL SALE" shall mean, with respect to each Licensed Product
---------------------
in each country, the first bona fide, arm's length sale of such Licensed
Product in such country following receipt of all regulatory approvals
necessary to commence regular, commercial scale sales of such Licensed
Product in such country. Sales prior to receipt of all approvals necessary
to commence commercial sales, such as so-called "treatment IND sales,"
"named patient sales," and "compassionate use sales," shall not be First
Commercial Sales.
1.22 "IND" means an "Investigational New Drug" application as such term is
---
defined under the rules and regulations of the FDA, or its equivalent in
any country.
1.23 "JOINT PATENTS" has the meaning provided in Section 14.3.
-------------
1.24 "JOINT PROJECT TECHNOLOGY" has the meaning provided in Section 13.1.
------------------------
1.25 "KNOW-HOW" means with respect to either party, collectively, all
--------
proprietary information, Confidential Information, methods, products,
ideas, processes, technologies, inventions, data, information and all
intellectual property rights connected therewith, whether or not
patentable and whether oral, written or stored in any computer format,
owned, controlled or licensed to either party, now or during the Term of
this License Agreement, to the extent related to the research,
development, manufacture, use or sale of any Licensed Product in the Field
worldwide, and in the case where licensed to a party, where such party
has, or may in the future have, the right to transfer, disclose and/or
grant licenses to the other party without violating contractual agreements
with such third party existing prior or subsequent to the Effective Date.
1.26 "LICENSED PRODUCT" means any compound, product or process utilizing
----------------
CENTAUR Technology.
1.27 "MAJOR MARKETS" means France, Germany, Japan, Sweden, United Kingdom and
-------------
the United States.
1.28 "NDA" means a New Drug Approval application, as defined under the rules
---
and
-5-
<PAGE>
regulations of the FDA, or its equivalent in any country.
1.29 "NET SALES" means the aggregate gross revenues derived by ASTRA and its
---------
sublicensees on account of the sale of Licensed Product(s) in an arm's
length transaction, less:
(a) trade and quantity discounts or rebates actually taken or allowed,
(b) credits or allowances given or made for rejection, damaged Licensed
Product, return of previously sold Licensed Product or retroactive
price reductions actually taken or allowed,
(c) any tax or government charge (including any tax such as a value
added or similar tax or government charge other than an income tax)
levied on the sale, transportation or delivery of a Licensed Product
and borne by the seller thereof, and
(d) any charges for freight or insurance billed to the final customer.
Where (i) a Licensed Product is sold as one of a number of items without a
separate price; or (ii) the consideration for the Licensed Product shall
include any non-cash element; or (iii) the Licensed Product shall be
transferred in any manner other than an invoiced sale, the Net Sales
applicable to any such transaction shall be deemed to be ASTRA's average
Net Sales for the applicable quantity of Licensed Product at that time in
the country in which the transaction occurred. If there are no independent
Net Sales of Licensed Product in the country at that time, then ASTRA and
CENTAUR shall mutually agree on a surrogate measurement.
1.30 "NEW CHEMICAL ENTITY PATENTS" has the meaning provided in the definition
---------------------------
of CENTAUR Patents.
1.31 "NEW INVENTIONS PATENTS" has the meaning provided in Section 14.2.
----------------------
1.32 "OKLAHOMA/KENTUCKY LICENSE" means the license granted as of the Effective
-------------------------
Date to ASTRA by the Oklahoma Medical Research Foundation and the
University of Kentucky Research Foundation, attached hereto as Appendix 3.
----------
1.33 "OUT-OF-POCKET RESEARCH COSTS" means all amounts paid by CENTAUR to third
----------------------------
parties as provided in Budget(s) set forth in the R&D Plans in connection
with CENTAUR's performance of Project Work, except for such categories of
such expenses which CENTAUR and ASTRA agree in the R&D Plans are to be
paid by CENTAUR through the payments received by CENTAUR in respect of
CENTAUR's FTEs. Out-of-Pocket
-6-
<PAGE>
Research Costs will not include employee salaries or other related
expenses, lab supplies used in CENTAUR's business generally, rent,
overhead or depreciation or legal expenses.
1.34 "PRODUCT KNOW-HOW" means all enabling information with respect to
----------------
production and quality control of Substance (including patented
processes), now owned by or licensed to CENTAUR or hereinafter acquired or
developed by CENTAUR or ASTRA during the Term of this License Agreement or
the Supply Agreement.
1.35 "PROJECT" means either of SP or AP, and "PROJECTS" means collectively SP
------- --------
and AP.
1.36 "PROJECT WORK" means collectively the Research Work and the Development
------------
Work.
1.37 "R&D PERIOD" has the meaning given in Section 4.3.
----------
1.38 "R&D PLAN(S)" means the research and development plans and budgets for SP
-----------
and AP respectively dated as of June 26, 1995 and initialed by the
parties, outlining the parties' best estimate as of the Effective Date of
the entire scope of Research Work and Development Work to be performed
within the respective Project and the Annual Funding to be provided by
ASTRA to CENTAUR for the Research Work intended to be performed by CENTAUR
under such R&D Plans.
1.39 "RESEARCH WORK" means the pre-clinical work outlined for each Project in
-------------
the respective R&D Plan up to selection of adequate number of CDs.
1.40 "SPECIFICATIONS" has the meaning provided in the Supply Agreement.
--------------
1.41 "STEERING COMMITTEE" has the meaning provided in Section 3.1.
------------------
1.42 "STROKE PROJECT" or "SP" means development of spin trapping agents and
-------------- --
derivatives and compositions thereof used as free radical scavengers
and/or therapeutics for (i) acute treatment of stroke, (ii) prophylactic
treatment of stroke, (iii) head trauma, and (iv) multi-infarct dementia,
all as specified in the R&D Plans.
1.43 "SUBSTANCE" means the active ingredient(s) included in Licensed Product.
---------
1.44 "SUPPLY AGREEMENT" means the agreement entered into by the parties as of
----------------
the Effective Date regarding manufacture and supply of active ingredients
included in Licensed Product, a copy of which is attached hereto as
Appendix 1.
----------
1.45 "TERM" has the meaning provided in Section 20.1.
----
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<PAGE>
1.46 "THIRD PARTY ROYALTIES" has the meaning provided in Section 7.6.
---------------------
1.47 "THIRD PERSONS" has the meaning provided in Section 3.6.
-------------
2. GRANT
-----
2.1 LICENSE GRANT TO ASTRA - ASTRA LICENSE. Subject to the terms and
--------------------------------------
conditions of this License Agreement and the Supply Agreement, CENTAUR
hereby grants to ASTRA:
(a) EXCLUSIVE LICENSE. An exclusive, royalty-bearing, worldwide license
-----------------
(the "EXCLUSIVE LICENSE"), including ASTRA's right to grant
sublicenses, under the CENTAUR Technology to research, develop, use,
sell and have sold Licensed Product in the Field in accordance with
this License Agreement. The Exclusive License shall be subject to
CENTAUR's right to Co-Promote Licensed Product pursuant to Section
9, and
(b) CO-EXCLUSIVE LICENSE. Collectively, co-exclusive (with CENTAUR)
--------------------
worldwide license(s) (the "CO-EXCLUSIVE LICENSE") (i) a royalty-
bearing license under the CENTAUR Technology and Product Know-How to
manufacture Substance for Licensed Product for use and sale in the
Field to the extent such manufacture is undertaken by ASTRA pursuant
to the Supply Agreement, and (ii) a non-royalty bearing license of
CENTAUR's rights in the Field, including ASTRA's right to grant
sublicenses, under the CENTAUR Licenses, provided, further, that in
the event of termination of this License Agreement by ASTRA pursuant
to (x) Default by CENTAUR pursuant to Section 20.2, or (y)
Bankruptcy of CENTAUR pursuant to Section 20.3, said Co-Exclusive
License shall be deemed to be an exclusive license to ASTRA for such
purposes in the Field.
The Exclusive License and Co-Exclusive License may be herein collectively
referred to as the "ASTRA LICENSE".
2.2 ASTRA AFFILIATES. ASTRA may designate Affiliates in countries where such
----------------
exist and third parties in countries where no Affiliates exist, to carry
out ASTRA's rights and obligations hereunder in whole or in part, provided
that ASTRA remains primarily liable and such Affiliates or third parties
consent to be bound by this License Agreement to the same extent as ASTRA.
ASTRA shall inform CENTAUR from time to time of the names of the
Affiliates and third parties appointed by ASTRA hereunder.
-8-
<PAGE>
2.3 LICENSE GRANT TO CENTAUR - CENTAUR GRANT. Subject to the terms and
----------------------------------------
conditions of this License Agreement and the Supply Agreement, ASTRA
hereby grants to CENTAUR a co-exclusive (with ASTRA), royalty-free,
worldwide license (the "CENTAUR GRANT") under ASTRA's interests in the
Joint Patents and Joint Project Technology for use by CENTAUR solely to
fulfill its obligations under this License Agreement and the Supply
Agreement.
2.4 CENTAUR CO-PROMOTE RIGHTS. CENTAUR retains the right in the United States
-------------------------
to Co-Promote, directly and solely through its own wholly-owned sales
force and not that of a third party, any Licensed Product launched by
ASTRA in the United States. The general terms for such Co-Promote are set
forth in Section 8, but the detailed conditions thereof shall be
separately agreed upon by the parties.
2.5 OKLAHOMA/KENTUCKY LICENSE. CENTAUR agrees and acknowledges that this
-------------------------
License Agreement and ASTRA's obligations hereunder (including, without
limitation, the obligation to make payments to CENTAUR pursuant to Section
7.2) are specifically contingent upon (i) the execution and delivery of
the Oklahoma/Kentucky License to ASTRA in substantially the form attached
hereto as Appendix 3, and (ii) the First Amendment to the CENTAUR
----------
Licenses, in substantially the form attached hereto as Appendix 5. CENTAUR
----------
agrees and acknowledges that the Oklahoma/Kentucky License to ASTRA is co-
exclusive with CENTAUR, notwithstanding the prior exclusive right and
license granted to CENTAUR pursuant to the CENTAUR Licenses.
2.6 ACCESS TO CENTAUR TECHNOLOGY. In order to permit ASTRA the full use and
----------------------------
enjoyment of the ASTRA License, CENTAUR shall, on the Effective Date and
from time to time thereafter during the Term, make available to ASTRA all
CENTAUR Technology and Product Know-How.
3. STEERING COMMITTEE AND DAY TO DAY MANAGEMENT OF THE PROJECT WORK
----------------------------------------------------------------
3.1 FORMATION OF STEERING COMMITTEE. Following the Effective Date, the
-------------------------------
parties will form a Steering Committee comprised of senior managers (two
(2) each from ASTRA and CENTAUR), responsible for the Projects. The
Steering Committee shall be initially chaired by a manager selected by
CENTAUR up to the date when Development Work under a Project is first
commenced, and thereafter, by a manager selected by ASTRA. The Steering
Committee may, from time to time, when deemed necessary or appropriate,
call upon other representatives of the parties to participate in the work
of the Steering Committee.
-9-
<PAGE>
3.2 MEETINGS OF THE STEERING COMMITTEE. The Steering Committee will meet at
----------------------------------
least quarterly, either in person or by telephone conference. At least two
meetings each year will be held in person, alternating between ASTRA and
CENTAUR locations. Extraordinary meetings shall be held when necessary.
3.3 STEERING COMMITTEE REVIEW OF PROJECT WORK. Within the framework of this
-----------------------------------------
License Agreement and the R&D Plans, the Steering Committee will review
the progress of the Project Work, scrutinize the non-financial reporting
and direct the work performed hereunder, including, without limitation,
decision-making with regard to inter alia the following matters:
- procedures for exchange of Know-How between the parties; and
- directing the Research Work in pursuit of CDs; and
- selection of CDs for further development - it being understood that
more than one CD may be selected within each Project and that such CDs
may later be excluded from further development without affecting
ASTRA's rights under this License Agreement; and
- deciding on whether or not to search for additional CDs within a
Project; and
- regulatory matters.
3.4 STEERING COMMITTEE - DISPUTE RESOLUTION. Disagreements, if any, which may
---------------------------------------
arise between the respective parties' representatives in the Steering
Committee shall be amicably resolved whenever possible. In the event the
Steering Committee is deadlocked, the matter shall be referred to the
President of each of CENTAUR and ARCUS for resolution. In the event the
Presidents are unable to resolve such deadlock, ASTRA will have the sole
right to finally decide on all matters regarding (i) the Development Work,
(ii) approach of the Research Work in pursuit of CDs, (iii) selection of
CDs, (iv) the development of a CD for more than one (1) indication for
use, and (v) whether or not to search for additional CDs in a respective
Project; and CENTAUR shall have the sole right to finally decide all other
matters regarding the Research Work to be performed by CENTAUR.
3.5 PROJECT GROUPS. Each party will appoint managers for the respective
--------------
Projects to form Project Groups. The Project Groups shall meet at regular
intervals to plan, share ideas and review progress on the Project Work.
The Project Groups shall be responsible to the Steering Committee for
accomplishing Project goals and objectives and will coordinate
-10-
<PAGE>
joint research and development efforts between the parties. During the
course of the Project Work, each party shall permit individuals designated
by the other to be present, when reasonable, while various tasks,
inspections and other activities under the Project Work are being
conducted.
3.6 THIRD PERSONS. Subject to the prior approval of the Steering Committee,
-------------
the parties may from time to time appoint third persons ("THIRD PERSONS")
to provide services with respect to the Projects.
4. RESEARCH WORK
-------------
4.1 COMMENCEMENT AND COMPLETION OF RESEARCH WORK. The parties shall commence
--------------------------------------------
the Research Work without undue delay following the Effective Date, and
shall use their best reasonable efforts to complete the Research Work
substantially in accordance with the R&D Plans and the other terms and
conditions of this License Agreement.
4.2 R&D PLANS. The parties acknowledge that the R&D Plans as of the Effective
---------
Date are estimates of the scope of Research Work and Development Work to
be performed under the respective Project during the indicated five year
timeframe, which R&D Plans will be specified in further detail by the
Steering Committee from time to time.
4.3 R&D PERIOD. The parties have agreed upon five R&D Periods (i.e., July 1,
----------
1995 - June 30, 2000). The first R&D Period shall commence as of July 1,
1995 and shall continue thereafter through and including June 30, 1996.
Subsequent R&D Periods shall be for the same twelve (12) calendar months
(i.e., July 1 - June 30) (the "R&D PERIOD"). During the third R&D Period
(i.e., July 1, 1997 - June 30, 1998), the Steering Committee will propose
R&D Plan(s) covering Research and Development Work, if any, which will
remain to be completed after the fifth and final R&D Period (i.e., on and
after June 30, 2000) with respect to each Project. If the parties are
unable to agree on extensions of the R&D Plan(s) and R&D Periods after the
fifth R&D Period, ASTRA will have the sole right to determine the scope
and budget of such R&D Plan(s), if any, extending after the fifth R&D
Period.
5. FUNDING OF RESEARCH WORK
------------------------
5.1 BUDGETS. The budget set forth in the R&D Plans (the "BUDGET") as of the
-------
Effective Date is intended to provide for Research Work to be undertaken
during the five R&D Periods.
5.2 CENTAUR FTE. ASTRA shall provide Annual Funding to CENTAUR at an annual
-----------
rate of [*] (the "FTE
-11-
<PAGE>
RATE") times the number of CENTAUR FTEs employed by CENTAUR to perform
Research Work during the relevant R&D Period. The FTE Rate shall be
increased annually on the anniversary of the Effective Date by [*].
5.3 ASTRA PAYMENTS OF ANNUAL FUNDING/OUT-OF-POCKET RESEARCH COSTS. ASTRA
-------------------------------------------------------------
shall pay CENTAUR quarterly in advance the amount of Annual Funding
contemplated to be provided to CENTAUR with respect to each calendar
quarter as specified in the Budget pursuant to the respective R&D Plan
(the "ADVANCE AMOUNT"), based on (i) the number of CENTAUR FTEs specified
with respect to such calendar quarter, and (ii) Out-of-Pocket Research
Costs. Within thirty (30) days following the end of each calendar quarter,
CENTAUR shall submit to ASTRA an accounting of the actual amount of
research funding incurred with respect to such calendar quarter (the
"ACTUAL AMOUNT"), indicating the number of CENTAUR FTEs utilized and the
actual Out-of-Pocket Research Costs incurred by CENTAUR in such calendar
quarter. If the Actual Amount exceeds the Advance Amount and provided that
ASTRA has agreed in advance to the expenditure of such excess amount,
ASTRA shall pay such excess amount to CENTAUR at the time of payment of
Annual Funding for the following calendar quarter. If the Advance Amount
exceeds the Actual Amount, ASTRA shall deduct such excess amount from
payments of Annual Funding for the next calendar quarter. Annual Funding
Payments shall be made by wire transfer to a bank designated by CENTAUR
from time to time.
5.4 FUNDING OF R&D PERIODS - ANNUAL MAXIMUM. The Steering Committee may
---------------------------------------
modify the R&D Plans from time to time, it being understood, however, that
unless otherwise agreed by ASTRA, and notwithstanding the provisions of
Sections 5.2 and 5.3, ASTRA's undertaking to fund Research Work and
Development Work to be performed by CENTAUR hereunder shall not be more
than Six Million Dollars ($6,000,000.00) annually for each of R&D Periods
one through five, unless such sum is increased by ASTRA in its sole
discretion or decreased pursuant to Section 20.4 (the "ANNUAL FUNDING").
5.5 CENTAUR'S RECORDS. CENTAUR shall keep accurate records of the number of
-----------------
CENTAUR FTEs that perform Project Work and Out-of-Pocket Research Costs
expended by CENTAUR for the latest three (3) R&D Periods. ASTRA shall have
the right annually, at ASTRA's expense, to have an independent, certified
public accountant reasonably acceptable to CENTAUR, review and audit such
records, upon reasonable notice and during regular business hours, for the
purpose of verifying the number of CENTAUR FTEs that performed Project
Work and the expenditure of Out-of-Pocket Research Costs. If such review
and audit reflects an overpayment to CENTAUR, CENTAUR shall promptly remit
such overpayment to ASTRA, together with reasonable interest. If the
overpayment is equal to or greater than five percent (5%) of the Annual
-12-
<PAGE>
Funding made by ASTRA to CENTAUR for such R&D Period(s), for which the
review and audit has been undertaken, CENTAUR shall reimburse ASTRA for
all costs of such review and audit.
6. DEVELOPMENT WORK
----------------
6.1 DEVELOPMENT WORK - ASTRA. Under the supervision of the Steering
------------------------
Committee, ASTRA shall be primarily responsible for undertaking
Development Work. The Steering Committee will decide on detailed plans for
Development Work and may from time to time amend such plans as the
Steering Committee deems mutually appropriate.
6.2 DEVELOPMENT WORK - CENTAUR. CENTAUR will perform such portions of the
--------------------------
Development Work as agreed upon by the Steering Committee. The Annual
Funding will include the Development Work to be performed by CENTAUR in
accordance with the provisions of Section 5.4.
6.3 REGULATORY APPROVALS. All registrations, approvals and other regulatory
--------------------
requirements relating to Licensed Product will be applied for by ASTRA and
held in ASTRA's name, provided, however, that with respect to the
manufacture of Substance for Licensed Product, such obligations of the
parties will be governed by the Supply Agreement.
6.4 DEVELOPMENT OF LICENSED PRODUCT - MAJOR MARKETS. Following successful
-----------------------------------------------
completion of the Research Work for a respective Project, ASTRA agrees,
for each Project, to use best reasonable efforts, including providing
adequate resources and qualified personnel, to undertake Development Work
for at least one Licensed Product to secure marketing approval for such
Licensed Product for at least the Major Markets. In such regard, ASTRA
shall:
(a) NDA APPROVAL. File for NDA approval in each of the Major Market
------------
countries within twelve (12) months following completion of all
required clinical trials and other studies in each relevant country,
(b) FIRST COMMERCIAL SALE. Make the First Commercial Sale and commence
---------------------
regular commercial sales of each Licensed Product in each country of
the Major Markets as promptly as practicable, but within nine (9)
months after receipt of NDA and such other approvals and permits as
ASTRA deems reasonably necessary to successfully commercialize the
Licensed Product in the relevant Major Markets (i.a. government
----
reimbursement or price approval).
-13-
<PAGE>
Notwithstanding the time limits set forth in Section 6.4(a) or 6.4(b), such
limits shall be extended (i) to account for any period during which ASTRA
encounters technical or regulatory delays which prevent ASTRA's compliance
with such time limits, provided that ASTRA informs CENTAUR on an ongoing
basis of such delays, which delays have not resulted from ASTRA's gross
negligence or willful misconduct, and (ii) for other commercial reasons
which ASTRA and CENTAUR reasonably believe will benefit long-term commercial
sales of such Licensed Product.
6.5 DEVELOPMENT OF LICENSED PRODUCT - OTHER THAN MAJOR MARKETS. Following
----------------------------------------------------------
successful commercial sale of Licensed Product in any of the Major Markets,
ASTRA agrees to use best reasonable efforts to make the First Commercial
Sale and commence regular commercial sales of each Licensed Product in each
country of the world, other than the Major Markets. ASTRA and CENTAUR will
confer with respect to such countries where sales and marketing of Licensed
Product is not warranted as a result of economies of scale.
6.6 ASTRA NON-COMPLIANCE. In the event ASTRA fails to comply with Section 6.4
--------------------
(a), 6.4(b) or 6.5, and CENTAUR provides a written notice to ASTRA of such
failure, ASTRA shall, within sixty (60) days of ASTRA's receipt of such
notice from CENTAUR, provide CENTAUR with a plan reasonably acceptable to
CENTAUR of ASTRA's proposal to remedy such failure within a time period not
to exceed one hundred eighty (180) days from the date of CENTAUR's receipt
of such plan. In the event ASTRA shall fail to (i) provide CENTAUR with such
a plan within such 60-day period, or (ii) cure such failure with respect to
ASTRA's obligations pursuant to Section 6.4(a), 6.4(b) or 6.5 within one
hundred eighty (180) days, in accordance with such plan, such failure shall
not be deemed a breach or Default by ASTRA of this License Agreement and
CENTAUR's sole and exclusive remedy thereupon shall be the right to notify
ASTRA within one hundred twenty (120) days thereafter of CENTAUR's intent to
terminate the ASTRA License with regard to the relevant country and Licensed
Product for which ASTRA has failed to comply with respect to Section 6.4(a),
6.4(b) or 6.5. In such event, ASTRA shall allow CENTAUR or its nominee to
make cross reference to ASTRA's relevant NDA file(s) and take such other
actions as may be reasonably necessary for CENTAUR to efficiently
commercialize the relevant Licensed Product in such country.
6.7 NOTIFICATION OF DEVELOPMENT WORK. Each party will inform the other from
--------------------------------
time to time as to the progress of the Development Work performed by such
party in accordance with the routines agreed upon by the Steering Committee.
7. REMUNERATION TO CENTAUR
-----------------------
-14-
<PAGE>
7.1 TOTAL COMPENSATION TO CENTAUR. As total compensation to CENTAUR for (i)
-----------------------------
CENTAUR's obligations undertaken pursuant to this License Agreement, and
(ii) the grant of the ASTRA License, CENTAUR shall be paid only such
compensation and for such periods as set forth in Sections 7 and 8 of this
License Agreement.
7.2 PAYMENTS. As payment for prior and future research and development
--------
performed by CENTAUR, ASTRA will make the following non-refundable payments
to CENTAUR upon the occurrence of the following events:
(a) EFFECTIVE DATE. On the Effective Date (subject to ASTRA's receipt of
--------------
the Oklahoma/Kentucky License and First Amendment to CENTAUR
Licenses provided in Section 2.5), Four Million Dollars
($4,000,000.00) as reimbursement for prior research and development
expenses incurred by CENTAUR,
(b) SELECTION OF FIRST CD OF SP. [*] within thirty (30) days from the
---------------------------
date of selection of the first CD for the first indication within
SP, and [*] within thirty (30) days from the date of selection of
the first CD for each subsequent indication within the SP, it being
understood, however, that payment (i) will only be made once in
respect of each CD, even if a CD is selected for more than one
indication, and (ii) payment under this Section 7.2(b) is limited to
a maximum of [*],
(c) SELECTION OF FIRST CD OF AP. [*] within thirty (30) days from the
---------------------------
date of selection of the first CD within the AP,
(d) FIRST SP IND IN U.S.. [*] within thirty (30) days from the date of
--------------------
filing of the first IND on a Licensed Product in the United States
within the SP,
(e) FIRST SP IND IN EC MAJOR MARKET OR JAPAN. [*] within thirty (30)
----------------------------------------
days from the date of filing of the first IND on a Licensed Product
in any of the Major Markets within EC, or Japan within the SP,
(f) FIRST AP IND IN U.S.. [*] within thirty (30) days from the date of
--------------------
filing of the first IND on a Licensed Product in the United States
within the AP,
(g) FIRST AP IND IN EC MAJOR MARKET OR JAPAN. [*]
----------------------------------------
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<PAGE>
[*] within thirty (30) days from the date of filing of the first IND
on a Licensed Product in any of the Major Markets within EC, or
Japan within the AP,
(h) FIRST SP PHASE III TRIAL IN U.S.. [*] within thirty (30) days from
--------------------------------
the date ASTRA receives the first approval to start phase III
clinical trials in the United States on a Licensed Product within
the SP,
(i) FIRST SP PHASE III TRIAL IN EC MAJOR MARKETS OR JAPAN. [*] within
-----------------------------------------------------
thirty (30) days from the date ASTRA receives the first approval to
start phase III clinical trials in any of the Major Markets within
EC, or Japan, on a Licensed Product within the SP,
(j) FIRST AP PHASE III TRIAL IN U.S.. [*] within thirty (30) days from
--------------------------------
the date ASTRA receives the first approval to start phase III
clinical trials in the United States on a Licensed Product within
the AP,
(k) FIRST AP PHASE III TRIAL IN EC MAJOR MARKETS OR JAPAN. [*] within
-----------------------------------------------------
thirty (30) days from the date ASTRA receives the first approval to
start phase III clinical trials in any of the Major Markets within
EC, or Japan, on a Licensed Product within the AP,
(l) FIRST SP NDA FILING IN U.S.. [*] within thirty (30) days from the
---------------------------
date of filing by ASTRA of the first NDA in the United States on a
Licensed Product within the SP,
(m) FIRST SP NDA FILING IN EC MAJOR MARKET OR JAPAN. [*] within thirty
-----------------------------------------------
(30) days from the date of filing by ASTRA of the first NDA in any
of the Major Markets within EC, or Japan, on a Licensed Product
within the SP,
(n) FIRST AP NDA FILING IN U.S.. [*] within thirty (30) days from the
---------------------------
date of filing by ASTRA of the first NDA in the United States on a
Licensed Product within the AP,
-16-
<PAGE>
(o) FIRST AP NDA FILING IN EC MAJOR MARKET OR JAPAN. [*] within thirty
-----------------------------------------------
(30) days from the date of filing by ASTRA of the first NDA in any
of the Major Markets within EC, or Japan, on a Licensed Product
within the AP,
(p) FIRST SP NDA APPROVAL IN U.S.. [*] within thirty (30) days from
-----------------------------
the date of the first NDA approval obtained by ASTRA in the United
States on a Licensed Product within the SP,
(q) FIRST SP NDA APPROVAL IN EC MAJOR MARKET OR JAPAN. [*] within
-------------------------------------------------
thirty (30) days from the date of the first NDA approval obtained by
ASTRA in any of the Major Markets within EC, or Japan, on a Licensed
Product within the SP,
(r) FIRST AP NDA APPROVAL IN U.S.. [*] within thirty (30) days from
-----------------------------
the date of the first NDA approval obtained by ASTRA in the United
States on a Licensed Product within the AP, and
(s) FIRST AP NDA APPROVAL IN EC MAJOR MARKET OR JAPAN. [*] within
-------------------------------------------------
thirty (30) days from the date of the first NDA approval obtained by
ASTRA in any of the Major Markets within EC, or Japan, on a Licensed
Product within the AP.
7.3 NET SALES ROYALTY. ASTRA will pay to CENTAUR royalty based on the Net Sales
-----------------
of Licensed Product as follows:
(a) COUNTRIES WHERE CENTAUR PATENTS ARE EFFECTIVE. [*] of Net Sales
---------------------------------------------
of Licensed Product in countries where, without the ASTRA License
granted hereunder, the manufacture, use or sale of such Licensed
Product would infringe the CENTAUR Patents,
(b) COUNTRIES WHERE CENTAUR PATENTS INAPPLICABLE. [*] of Net Sales
--------------------------------------------
of Licensed Product in countries other than those set forth in
Section 7.3(a).
7.4 CENTAUR DEFAULT/BANKRUPTCY. In the event of termination of this License
--------------------------
Agreement by ASTRA pursuant to (i) Default by CENTAUR pursuant to Section
20.2, or (ii) Bankruptcy of CENTAUR pursuant to Section 20.3, ASTRA may
assume development and manufacture of Substance for ASTRA's and ASTRA's
sublicensee's use worldwide, and in such event, ASTRA shall, in lieu of all
other payments otherwise to be made by
-17-
<PAGE>
ASTRA to CENTAUR under this License Agreement or the Supply Agreement,
including, without limitation, such amounts set forth in Sections 7.2 and
7.3, make payments to CENTAUR for such period of time as limited by the
provisions of Section 7.5, in an amount equal to [*] of Net Sales of
Licensed Product, less all Third Party Royalties pursuant to Section 7.6. In
the event of such termination of this License Agreement, the ASTRA License
shall be deemed to be an exclusive, worldwide, perpetual, royalty-free, with
the right to grant sublicenses, except for such payments to be made pursuant
to this Section 7.4 as limited by the provisions of Section 7.5.
7.5 TERMINATION OF CENTAUR ROYALTY - ASTRA PAID UP LICENSE. ASTRA's obligation
------------------------------------------------------
to pay CENTAUR royalty on Net Sales of Licensed Product will expire, on a
country-by-country basis, on the later of (i) the last to expire of the
CENTAUR Patents, and (ii) the fifteenth (15th) anniversary of the First
Commercial Sale of a Licensed Product in a relevant country. Upon
termination of the CENTAUR royalty, the ASTRA License will be deemed co-
exclusive with CENTAUR, perpetual, worldwide and non-royalty bearing.
7.6 THIRD PARTY ROYALTIES ON SALES OF LICENSED PRODUCT. ASTRA and CENTAUR will
--------------------------------------------------
share, on an equal (50/50) basis the cost of all royalties, fees and license
fees payable to third parties due on Net Sales of Substance or Licensed
Product pursuant to license agreements existing (i) on the Effective Date,
including, without limitation, payments, if any, due pursuant to the CENTAUR
Licenses, and (ii) after the Effective Date to the extent approved by the
Steering Committee (collectively, the "THIRD PARTY ROYALTIES"), but not
including research funding or grant payments payable by CENTAUR to third
parties.
7.7 COMPUTATION AND PAYMENT OF ROYALTY TO CENTAUR. ASTRA shall deliver to
---------------------------------------------
CENTAUR within sixty (60) days after the end of each calendar quarter a
written report showing its computation of remuneration to CENTAUR due under
this License Agreement during such calendar quarter and at the same time
make the payment of all Net Sales royalties due CENTAUR. All Net Sales shall
be segmented in each such report according to sales on a country-by-country
basis, including the rates of exchange used for conversion to Dollars from
the currency in which such sales were made. For the purposes hereof, the
rates of exchange to be used for conversion hereunder, Dollars shall be the
average purchase rates of the respective currencies as quoted by
Skandinaviska Enskilda Banken, Sweden for the quarter in question.
7.8 ASTRA RECORDS. ASTRA shall keep for a period of three (3) years following
-------------
the year to which such records relate, full, true and accurate books of
accounts and other records containing all information and data which may be
necessary to ascertain and verify the Net Sales royalties payable to CENTAUR
hereunder.
7.9 CENTAUR AUDIT. CENTAUR shall have the right to have such pertinent books
-------------
and
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<PAGE>
records of ASTRA inspected and examined at all reasonable times for the
purpose of determining the accuracy of payments made hereunder. Such
inspection and examination shall be conducted by an independent, certified
public accountant selected by CENTAUR and to whom ASTRA shall have no
reasonable objection. Such accountant shall not disclose to CENTAUR any
information except for information necessary to verify the accuracy of the
reports and payments made pursuant to this License Agreement. Results of
such review shall be made available to both parties. If the review reflects
an underpayment, ASTRA shall promptly remit to CENTAUR any amounts due with
reasonable interest. If the underpayment is equal to or greater than five
percent (5%) of the payments made by ASTRA to CENTAUR for such period under
review, ASTRA shall pay all costs of such review and audit.
8. OPTION TO CO-PROMOTE IN THE U.S.
--------------------------------
8.1 NOTIFICATION TO CO-PROMOTE. Within sixty (60) days after filing of an NDA
--------------------------
with respect to any Licensed Product in the United States, CENTAUR shall
notify ASTRA of its willingness to Co-Promote such Licensed Product with
ASTRA in the United States. Should CENTAUR fail to do so, CENTAUR's option
to Co-Promote such Licensed Product shall automatically expire.
8.2 ELECTION OF CO-PROMOTION RIGHTS. Upon CENTAUR's exercise of its Co-Promote
-------------------------------
rights set forth in Section 8.1, ASTRA and CENTAUR shall discuss how to
implement the Co-Promote activities and agree in good faith upon conditions
therefor according to the following principles:
(a) CO-PROMOTE MARKET PLAN. CENTAUR and ASTRA shall promote the
----------------------
Licensed Product under ASTRA's trademark and the NDA held by ASTRA.
ASTRA or its nominee shall be the sole distributor of the Licensed
Product. CENTAUR and ASTRA shall in good faith discuss strategies
for marketing the Licensed Product including the pricing, and seek
to produce a mutually agreeable marketing plan for the Licensed
Product. The marketing plan shall include role, activities and
obligations of ASTRA and CENTAUR. In the event the parties fail to
agree as above said, ASTRA is entitled to make the final decision.
The parties shall review progress against the marketing plan from
time to time.
(b) CENTAUR MEDICAL REPRESENTATIVES. In no event shall the number of
-------------------------------
CENTAUR's medical representatives be less than ten percent (10%) of
ASTRA's medical representatives used for detailing the Licensed
Product or exceed the number of ASTRA's medical representatives to
be used for
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<PAGE>
detailing the Licensed Product. The total number of medical
representatives shall not be higher than the respective market
reasonably requires for the Licensed Product in question.
(c) CO-PROMOTE PROFITS. CENTAUR and ASTRA shall share the profit
------------------
obtained from the Co-Promote activities on a [*]
The term "profit" as used herein shall mean, with respect to the
given period, the Net Sales of the Licensed Product in the United
States less
(i) the cost of the Licensed Product including, without limitation
(1) all Third Party Royalties, (2) Net Sales royalty payable
to CENTAUR hereunder, (3) the supply price for Substance
payable to CENTAUR pursuant to the Supply Agreement, if
CENTAUR is manufacturing Substance, and (4) other direct and
indirect costs actually incurred in connection with the
manufacture of the Licensed Product in finished form in
accordance with generally acceptable accounting principles;
and
(ii) distribution cost of ASTRA not exceeding [*] of the Net Sales;
and
(iii) advertisement and promotional expenses actually used by the
parties comprising media publicity, sample package,
promotional materials and other selling materials and
seminars, conventions and symposia and any other activities
generally recognized in the United States to be advertisement
and promotion, but excluding cost for detailing the Licensed
Product by the medical representatives of the parties; and
(iv) the cost of phase IV studies on the Licensed Product amortized
over five years; and
(v) [*] of the Net Sales for the cost of Development Work related
to the Licensed Product undertaken at ASTRA's expense, such
cost to be deducted from the Net Sales at the said rate for
the initial [*] of co-promotion hereunder.
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<PAGE>
8.3 CO-PROMOTE TERM. The co-promotion by CENTAUR subject to this Article 8
---------------
shall continue for a period of not less than five (5) years, as separately
agreed by the parties.
9. EXCHANGE OF INFORMATION
-----------------------
9.1 COMMUNICATION OF INFORMATION. Commencing on the Effective Date and
----------------------------
continuing thereafter during the Term, each party shall, on a timely and
regular basis, furnish each other with any Know-How obtained by such party
pursuant to the procedures agreed upon by the Steering Committee. Each
party shall promptly and thoroughly disclose to the other party all
information and data in the Field resulting from activities undertaken as
part of the Project Work. In addition, each party shall promptly disclose
to the other party all safety and toxicity data relating to Licensed
Product. The parties shall agree on a plan for adverse event reporting and
shall keep one another appropriately informed.
10. REPRESENTATIONS AND WARRANTIES
------------------------------
10.1 GENERAL REPRESENTATIONS. Each party hereby represents and warrants to the
-----------------------
other as follows:
(a) DULY ORGANIZED. It is a corporation duly organized, validly
--------------
existing and is in good standing under the laws of the jurisdiction
of its incorporation, is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
conduct of its business or the ownership of its properties requires
such qualification and has all requisite power and authority,
corporate or otherwise, to conduct its business as now being
conducted, to own, lease and operate its properties and to execute,
deliver and perform this License Agreement.
(b) DUE EXECUTION. The execution, delivery and performance by it of
-------------
this License Agreement (including the grant of the ASTRA License by
CENTAUR and of the CENTAUR Grant by ASTRA) have been duly authorized
by all necessary corporate action and do not and will not (i)
require any consent or approval of its stockholders, (ii) violate
any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect
having applicability to it or any provision of its charter or by-
laws, or (iii) result in a breach of or constitute a default under
any material agreement (including, without limitation, the CENTAUR
Licenses), mortgage, lease, license, permit, patent or other
instrument or obligation to which it is a party or by which it or
its assets may
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<PAGE>
be bound or affected.
(c) NO THIRD PARTY APPROVAL. No authorization, consent, approval,
-----------------------
license, exemption of, or filing or registration with, any court or
governmental authority or regulatory body is required for the due
execution, delivery or performance by it of this License Agreement
(including the grant of the ASTRA License by CENTAUR and of the
CENTAUR Grant by ASTRA).
(d) BINDING AGREEMENT. This License Agreement is a legal, valid and
-----------------
binding obligation of such party, enforceable against it in
accordance with its terms and conditions, except as may be limited
by bankruptcy laws or other laws affecting the rights of creditors
generally, and rules of law governing equitable remedies. Each is
not under any obligation to any person, contractual or otherwise,
that is conflicting or inconsistent in any respect with the terms of
this License Agreement (including the grant of the ASTRA License by
CENTAUR and of the CENTAUR Grant by ASTRA) or that would impede the
diligent and complete fulfillment of its obligations hereunder.
(e) GOVERNMENTAL STATUS. It is not debarred or suspended from receiving
-------------------
contracts from the United States or Swedish government or other
governmental authority or agency.
(f) FULL DISCLOSURE. Each party has disclosed to the other in good
---------------
faith any and all material information relevant to the subject
matter of this License Agreement and the Supply Agreement to such
party's ability to observe and perform its obligations hereunder,
and each party covenants on and after the Effective Date to provide
to the other such additional material information which may, or with
the passage of time, effect the subject matter of this License
Agreement or the Supply Agreement or the ability of such party to
observe and perform its obligations hereunder or thereunder.
10.2 CENTAUR REPRESENTATIONS. CENTAUR covenants, represents and warrants to
-----------------------
ASTRA that
(a) CENTAUR is the owner or licensee, as the case may be, of the CENTAUR
Technology and Product Know-How and the same are free of any liens,
encumbrances, restrictions and other legal or equitable claims of
any kind or nature, excepting the rights of grantors of the CENTAUR
Licenses,
(b) CENTAUR has the right to grant the ASTRA License,
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<PAGE>
(c) CENTAUR has not granted and will not grant during the Term of this
License Agreement any license or sublicense of the CENTAUR Licenses,
CENTAUR Technology and Product Know-How in the Field,
(d) With respect to each of the CENTAUR License(s) that (i) CENTAUR will
fully comply with all of CENTAUR's covenants and obligations
thereunder, (ii) to the best of its knowledge, each is in full force
and effect, not having been amended, other than as set forth in
Appendix 2, (iii) CENTAUR has received no oral or written
----------
notification of any alleged breach or default by CENTAUR, (iv)
CENTAUR is not aware of any breach or default by any party, and (v)
CENTAUR will not terminate or otherwise amend the CENTAUR Licenses
(x) on less than sixty (60) days' prior written notice to ASTRA, and
(y) in any manner which would materially adversely affect the ASTRA
License, and
(e) As of the Effective Date, to the best of CENTAUR's knowledge and
belief, there are no third party rights, licenses or patents, other
than the CENTAUR Licenses, which are necessary for ASTRA's use and
enjoyment of the ASTRA License and the research, development,
production, manufacture, sale or use of Licensed Products.
11. PUBLICATIONS
------------
11.1 DISCLOSURE OF KNOW-HOW. Unless as necessary for ASTRA to utilize the
----------------------
ASTRA License granted to ASTRA hereunder, neither party will make any
publications of Know-How of the other party or other results developed
hereunder without the other party's prior written approval, which approval
shall not be unreasonably withheld.
11.2 USE OF OTHER PARTY'S NAME. Unless as required by law and/or applicable
-------------------------
government regulation, neither party will use the name of the other party,
nor of any member of such party's staff, in any publicity, advertising, or
news release without the prior written approval of an authorized
representative of such party.
12. MARKETING OF LICENSED PRODUCT
-----------------------------
12.1 ASTRA'S COMMERCIALIZATION OF LICENSED PRODUCT. ASTRA agrees to use its
---------------------------------------------
best reasonable efforts to commercialize any Licensed Product successfully
developed hereunder, and will keep CENTAUR continuously informed with
respect to such
-23-
<PAGE>
commercialization period.
12.2 LABELING. Unless otherwise prohibited by regulatory authority, Licensed
--------
Product(s) or the packaging in which they are contained shall bear the
label "Manufactured under license from Centaur Pharmaceuticals, Inc., 484
Oakmead Parkway, Sunnyvale, CA 94086, USA", or any similar wording as may
be mutually agreed upon by the parties.
13. INVENTION, IMPROVEMENTS AND DISCOVERIES
---------------------------------------
13.1 OWNERSHIP OF TECHNOLOGY. The parties shall keep each other apprised on
-----------------------
the development of patentable and other inventions in the Field. Each party
shall retain sole title to any technology, know-how, inventions, concepts,
processes and the like (whether or not patentable) which it develops
solely. Except as provided in this License Agreement, neither party shall
have any right to use or license technology to which the other party has
sole title. Each party shall own a fifty percent (50%) undivided interest
in all technology, know-how, inventions, concepts, processes and the like
(whether or not patentable) made, conceived, reduced to practice or
generated jointly in connection with the Project Work by (i) one party
and/or Third Persons obligated to assign their rights therein to such
party, and (ii) the other party and/or Third Persons obligated to assign
their rights therein to such other party (collectively the "JOINT PROJECT
TECHNOLOGY"). Such Joint Project Technology, to the extent in the Field,
shall be used by each party exclusively within the context of this License
Agreement and the Supply Agreement, provided, however, either party may use
such Joint Project Technology outside the Field, as such party deems
appropriate.
14. PATENTS AND PATENT APPLICATIONS
-------------------------------
14.1 MAINTENANCE OF CENTAUR PATENTS. CENTAUR shall diligently prosecute and
------------------------------
maintain, at CENTAUR's sole cost and expense, the CENTAUR Patents unless,
with regard to one or more patents comprising the CENTAUR Patents, the
parties agree that such is not necessary or commercially advisable. If
CENTAUR fails to diligently prosecute, maintain and defend the CENTAUR
Patents, ASTRA may (but shall not be obligated to), upon notice to CENTAUR,
undertake such prosecution, maintenance and defense of the CENTAUR Patents,
and all costs incurred by ASTRA in such regard may be deducted from Net
Sales royalty payable to CENTAUR hereunder from countries where such
Centaur patents are being prosecuted and maintained over a three (3) year
period.
14.2 CENTAUR NEW INVENTIONS PATENTS. If ASTRA, in its sole discretion, and
------------------------------
following
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<PAGE>
consultation with CENTAUR, determines that any invention of CENTAUR in the
Field, developed solely by CENTAUR (as opposed to Joint Patents) not
already covered by the CENTAUR Patents in one or more countries, is
patentable (the "NEW INVENTIONS PATENTS"), CENTAUR shall, upon notice from
ASTRA, promptly prepare, file, and prosecute in CENTAUR's name patent
application(s) and/or any related continuation, continuation-in-part,
divisional, and/or reissue application(s) thereof, with respect to such
invention in such countries as selected by ASTRA. ASTRA shall reimburse
CENTAUR for all out-of-pocket expenses incurred in connection with the
above preparation, filing, and prosecution of application(s) and
maintenance of New Inventions Patents directed to such inventions in the
countries chosen by ASTRA. ASTRA shall cooperate with CENTAUR to assure
that such application(s) and any related continuation, continuation-in-
part, divisional, and/or reissue applications(s) thereof, will cover, to
the best of ASTRA's knowledge, all items of commercial interest and
importance and ASTRA shall have the right, through ASTRA's patent attorneys
and/or agents, to advise and cooperate with CENTAUR's patent attorneys in
the prosecution of such patent applications. In the event CENTAUR shall
fail to prepare, file and prosecute any New Inventions Patents, ASTRA may
(but shall not be obligated to) undertake such preparation, filing and
prosecution of the New Inventions Patents in CENTAUR's name, at ASTRA's
sole cost and expense.
14.3 JOINT PATENTS. If ASTRA, in its sole discretion and following
-------------
consultation with CENTAUR, determines that any invention made jointly by
the parties (a "JOINT PATENT") is patentable, ASTRA shall, at its expense
and discretion, promptly prepare, file and prosecute in both parties' names
patent application(s) and/or any related continuation, continuation-in-
part, divisional, and/or reissue application(s) thereof, in the United
States and in such foreign countries selected by ASTRA, with respect to
such joint invention. CENTAUR shall have the right, through CENTAUR's
patent attorneys and/or agents, to advise and cooperate with ASTRA's patent
attorneys in the prosecution of such patent applications. ASTRA and CENTAUR
agree to use all Joint Patents exclusively within the context of this
License Agreement. Should the inventions, improvements and/or discoveries
referred to in Section 14.3 fall within the definition of Know-How or if
same are patentable, then they shall be used exclusively within the context
of this License Agreement and the Supply Agreement if within the Field.
Either party may use such inventions, improvements and/or discoveries which
are outside the Field, whether or not patentable, as such party may deem
appropriate.
(a) JOINT PATENT - ASTRA DEFAULT OR BANKRUPTCY. In the event this
------------------------------------------
License Agreement is terminated as a result of a Default or
Bankruptcy by ASTRA, then such joint inventions, improvements and/or
discoveries whether existing as Know-How or as a patent application
or patent, and ASTRA's interests in the Joint Patents will be
automatically exclusively licensed, royalty-free, to
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<PAGE>
CENTAUR to develop, use, market, distribute and sell Licensed
Product(s) worldwide in the Field. In addition, should this License
Agreement be terminated with respect to only one of the Projects in
accordance with Section 20.4, then such inventions, improvements
and/or discoveries related to the terminated Project as well as
ASTRA's interests in the Joint Patents related to the terminated
Project will be automatically exclusively licensed in the Field to
CENTAUR, royalty-free.
(b) JOINT PATENT - CENTAUR DEFAULT OR BANKRUPTCY. In the event this
--------------------------------------------
License Agreement is terminated as a result of a Default or
Bankruptcy by CENTAUR, then such joint inventions, improvements
and/or discoveries whether existing as Know-How or as a patent
application or patent, and CENTAUR's interests in the Joint Patents
will be automatically exclusively licensed to ASTRA to develop, use,
market, distribute and sell Licensed Product(s) worldwide in the
Field, subject to the royalty obligations provided herein.
14.4 NOTIFICATION WITH RESPECT TO PATENTS. Each party shall keep the other
------------------------------------
advised as to all developments with respect to any patent application(s)
referred to in this Section 14, and shall promptly supply to the other
copies of relevant papers received and filed by it in connection with the
prosecution thereof in sufficient time for such party to comment thereon.
The parties shall reasonably cooperate and assist each other in the patent
prosecution provided for in this Section 14.
14.5 CENTAUR'S ELECTION. If ASTRA elects, with regard to CENTAUR Patents, New
------------------
Inventions Patents, or Joint Patents not to have CENTAUR seek or maintain
patent protection in one or more countries, CENTAUR will have the right, at
CENTAUR's sole expense and discretion, to file, procure, maintain and
enforce such patents in such countries and ASTRA will cooperate fully. The
parties agree that should CENTAUR exercise said right it will not in any
way affect the ASTRA License granted hereunder other than should ASTRA or
its sublicensees later sell a Licensed Product, the sale of which would
infringe such patent procured by CENTAUR at its own expense, ASTRA will
reimburse CENTAUR for its patent out-of-pocket expenses, plus twenty
percent (20%) thereof related to the relevant country or countries. ASTRA
agrees to advise CENTAUR in a timely manner of any decision not to continue
to seek or maintain, or have CENTAUR continue to seek, or to maintain
patent protection with respect to CENTAUR Patents, New Inventions Patents
or Joint Patents in one or more countries in order to allow CENTAUR the
timely exercise of its rights under this Section 14.5.
14.6 ASTRA'S ELECTION. Notwithstanding the provisions of Section 14.2, New
----------------
Inventions Patents and New Chemical Entity Patents shall not be deemed to
be "CENTAUR
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<PAGE>
Patents" for purposes of determining the period during which ASTRA shall
pay royalty to CENTAUR on Net Sales of Licensed Product pursuant to Section
7.5, unless (i) ASTRA's manufacture, use or sale of Licensed Product in a
particular country would infringe such New Inventions Patents or New
Chemical Entity Patents, or (ii) ASTRA shall, in ASTRA's sole discretion,
agree that such New Inventions Patents and/or New Chemical Entity Patents
shall be deemed to be "CENTAUR Patents" for purposes of Section 7.5.
14.7 MINIMUM PATENT PROTECTION. Unless extraordinary circumstances require
-------------------------
otherwise, patent protection is to be sought and upheld on inventions
falling under the license herein granted in at least the countries in which
ASTRA Affiliates are established.
15. PATENT INFRINGEMENTS
--------------------
15.1 NOTIFICATION OF ALLEGED PATENT INFRINGEMENT. If a third party notifies
-------------------------------------------
CENTAUR, ASTRA or its sublicensees that any act by either party allegedly
infringes any patent owned by the third party or any patent rights owned by
or licensed to the third party, CENTAUR or ASTRA, as the case may be, shall
promptly notify the other in writing.
15.2 THIRD PARTY CLAIMS. In the event of a third party claim that the exercise
------------------
of the ASTRA License with respect to the manufacture, sale or other use of
Licensed Product infringes any patent of such third party (a "THIRD PARTY
CLAIM"), CENTAUR shall consult with ASTRA and with respect to such Third
Party Claim, CENTAUR shall (i) undertake, at CENTAUR's sole cost and
expense, defense of such Third Party Claim, or (ii) request ASTRA to
undertake such defense, at ASTRA's sole cost and expense. Neither ASTRA nor
CENTAUR shall settle any Third Party Claim, including an agreement to pay
Third Party Royalties, without the reasonable approval of the other party.
If ASTRA shall, at ASTRA's sole cost and expense, undertake to defend such
Third Party Claim, fifty percent (50%) of all costs and expenses incurred
by ASTRA, including, without limitation, expert witness and attorneys'
fees, and such damages payable to any third party (other than Third Party
Royalties) shall be deducted from Net Sales royalties payable to CENTAUR
hereunder from countries where such Third Party Claim claims infringement,
over a three (3) year period.
15.3 PAYMENT OF ADDITIONAL THIRD PARTY ROYALTIES. Should ASTRA or its
-------------------------------------------
sublicensees obtain one or more licenses under any patent not licensed
hereunder and agree to pay Third Party Royalties in order to make, use or
sell a Licensed Product (whether as a condition of settlement of an
infringement action or by court order), the Net Sales royalties payable to
CENTAUR hereunder shall be reduced by fifty percent (50%) of such Third
Party Royalties as set forth in Section 7.6.
-27-
<PAGE>
15.4 INFRINGEMENT OF CENTAUR PATENTS/JOINT PATENTS/NEW INVENTIONS PATENTS. If
--------------------------------------------------------------------
a third party shall, in the reasonable opinion of either party, infringe
any CENTAUR Patent, Joint Patent or New Inventions Patents, then such party
shall promptly notify the other party. ASTRA or its sublicensees shall have
the initial sole right to commence an action for infringement against the
third party, in its own name and/or in the name of CENTAUR, together with
the right to enforce and collect any judgment thereon. If ASTRA or its
sublicensee elects to exercise the right to commence an action, then
CENTAUR shall, at ASTRA's request and at ASTRA's expense, assist in the
prosecution of such action, including, but not limited to, consenting to
being joined in such action as a voluntary plaintiff. ASTRA shall bear its
own internal and external legal and other costs and expenses associated
with the prosecution of the action. CENTAUR shall have the right to
independently retain legal counsel and consultants, at CENTAUR's sole cost
and expense, but such counsel or consultants shall not have the right to
affect ASTRA's or its sublicensee(s) sole management of the prosecution of
the action.
15.5 MONETARY RECOVERY - ASTRA PROSECUTION. Any monetary recovery (whether by
-------------------------------------
settlement or judgment) in connection with an infringement action commenced
by ASTRA or ASTRA's sublicensees shall be applied first to reimburse ASTRA
and its sublicensees, if applicable, for their out-of-pocket expenses
(including reasonable attorneys' fees) incurred in prosecuting such action
and the expenses of CENTAUR borne by ASTRA hereunder. Any balance remaining
shall be shared in the ratio of 80:20 (ASTRA:CENTAUR, respectively).
15.6 MONETARY RECOVERY - CENTAUR PROSECUTION. Should neither ASTRA, its
---------------------------------------
Affiliates nor its sublicensees take appropriate and diligent action with
respect to any such infringement within three (3) months after receiving
notice of any infringement or possible infringement of a CENTAUR Patent,
Joint Patent or New Inventions Patents, CENTAUR shall have the right, but
not the obligation, to take such action, at its own expense, in its own
name, and the right to enforce and collect any judgment thereon. If the
recovery exceeds CENTAUR's out-of-pocket expenses (including reasonable
attorneys' fees) for prosecuting the claim, then such excess recovery shall
be shared by the parties in the ratio of 80:20 (CENTAUR:ASTRA,
respectively).
16. CONFIDENTIALITY
---------------
16.1 TREATMENT OF CONFIDENTIALITY. A party receiving Confidential Information
----------------------------
of the other party shall maintain such Confidential Information in strict
confidence and shall not disclose the Confidential Information to any third
party. Furthermore, neither party shall use the Confidential Information
for any purpose other than those purposes specified in
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<PAGE>
this License Agreement. The parties may disclose Confidential Information
to the minimum number of its employees reasonably requiring access thereto
for the purposes of this License Agreement, provided, however, that prior
to making such disclosures, each such employee shall be apprised of the
duty and obligation to maintain Confidential Information in confidence and
not to use such Confidential Information for any purpose other than in
accordance with the terms and conditions of this License Agreement.
16.2 RELEASE FROM RESTRICTIONS. The provisions of Section 16.1 shall not apply
-------------------------
to any Confidential Information disclosed hereunder which is required to be
disclosed by the receiving party to comply with applicable laws, or to
comply with laws or regulations (including, without limitation, testing and
marketing regulations), in each case only to the extent required to carry
out the work contemplated by this License Agreement or other legal
obligations provided that the receiving party provides prior written notice
of such disclosure to the other party and takes reasonable and lawful
actions to avoid and/or minimize the degree of such disclosure.
17. TRADEMARK
---------
ASTRA shall market, distribute and sell Licensed Product under trademarks
selected and owned by ASTRA and to which CENTAUR shall have no reasonable
objections.
18. EXCLUSIVITY AND OPTION TO EXTEND THE LICENSE
--------------------------------------------
18.1 RESTRICTIONS. During the Term of this License Agreement and the Supply
------------
Agreement (i) neither party shall sell any products or provide any service
in the Field other than Licensed Product, or conduct any research alone
(excepting as provided in this Section 18.1), or with third parties or fund
research by third parties in the Field, except research conducted pursuant
to the Research Program, and (ii) CENTAUR shall not grant any license or
sublicense in the Field of (w) CENTAUR Technology, (x) Product Know-How,
(y) the CENTAUR Licenses in the Field, or (z) any right which would
materially adversely affect ASTRA's use and enjoyment of the ASTRA License,
and (iii) ASTRA will not grant any license or sublicense of any right which
would materially, adversely affect CENTAUR's use and enjoyment of the
CENTAUR Grant in the Field. The foregoing restrictions shall not prohibit
either party from conducting research, either alone or with third parties,
that has applicability outside the Field, notwithstanding that such
research may also have utility in the Field. CENTAUR further acknowledges
that ASTRA has, and may continue to undertake research, development and
marketing of products outside the Field which may have indications for use
comparable to Licensed Product.
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<PAGE>
18.2 ASTRA RIGHT OF FIRST NEGOTIATION. ASTRA acknowledges that CENTAUR may
--------------------------------
undertake research, development and marketing of products outside the Field
which may have indications for use comparable to Licensed Product.
Notwithstanding the foregoing, CENTAUR will not enter into any agreement or
collaboration with any third party with respect to the development,
manufacture or sale of any substance or product outside the Field, but
falling within ASTRA's strategic research areas and/or such other research
areas of interest to ASTRA as set forth on Appendix 4 hereof, and as the
----------
same may be modified from time to time by ASTRA in writing, without, in the
first instance, CENTAUR providing ASTRA by written notice with a right of
first negotiation with CENTAUR. ASTRA shall, within sixty (60) days of
written notification from CENTAUR, either (i) waive such right of first
negotiation, or (ii) enter into discussions with CENTAUR in which the
parties shall diligently and in good faith seek to agree upon the terms and
conditions of such agreement and/or collaboration. Should the parties not
reach agreement within one hundred twenty (120) days (which period may be
extended by mutual agreement of the parties), CENTAUR shall be free to
enter into negotiations and/or agreements or collaborations with third
parties.
19. WARRANTY DISCLAIMER
-------------------
19.1 DISCLAIMER BY PARTIES. Other than with respect to the provisions of this
---------------------
License Agreement and the Supply Agreement, nothing in this License
Agreement shall be construed as:
(a) CENTAUR TECHNOLOGY/PRODUCT KNOW-HOW. A warranty or representation
-----------------------------------
by CENTAUR as to the validity or scope of the CENTAUR Technology or
Product Know-How, other than as specifically provided to the
contrary herein,
(b) THIRD PARTY INFRINGEMENT. A warranty or representation that
------------------------
anything made, used, sold or otherwise disposed of under this
License Agreement is or will be free from infringement of patents,
copyrights and trademarks of third parties,
(c) PROSECUTION. An obligation to bring or prosecute actions or suits
-----------
against third parties for infringement,
(d) USE OF NAME/TRADEMARK. Conferring rights to use in advertising,
---------------------
publicity or otherwise any trademark or the name of CENTAUR or
ASTRA,
-30-
<PAGE>
(e) CENTAUR LIMITATION. Granting by implication, estoppel or otherwise
------------------
any licenses under (i) patents of CENTAUR other than the CENTAUR
Patents, and (ii) the CENTAUR Patents and Know- How outside the
Field. Except as expressly set forth in this License Agreement
and/or the Supply Agreement, CENTAUR makes no representations and
extends no warranties of any kind, either express or implied. There
are no express or implied warranties of merchantability or fitness
for a particular purpose, or that the use of the Licensed Product
will not infringe any third party patent, copyright, trademark or
other rights,
(f) ASTRA LIMITATION. Except as expressly set forth in this License
----------------
Agreement, ASTRA makes no representations and extends no warranties
of any kind, either express or implied. There are no express or
implied warranties of merchantability or fitness for a particular
purpose, or that the use of the Licensed Product will not infringe
any patent, copyright or trademark or other rights.
20. TERM AND TERMINATION
--------------------
20.1 TERM. The Term of this License Agreement (the "TERM") shall commence as of
----
the Effective Date. Unless sooner terminated pursuant to Section 20.2, 20.3
or 20.4, the Term shall expire at such time as ASTRA shall have no further
obligation to make payments to CENTAUR on Net Sales of Licensed Product
pursuant to Section 7.5.
20.2 DEFAULT. Other than as provided in Section 6.6, failure by either party to
-------
comply with any of its material obligations contained in this License
Agreement following notice and opportunity to cure, as hereinafter provided
(a "DEFAULT") shall entitle the other party to terminate this License
Agreement. The non-defaulting party shall give the other party notice
specifying the nature of the breach of this License Agreement and requiring
it to cure. If such breach is not cured within ninety (90) days after the
receipt of such notice (or one hundred twenty (120) days in event such
breach cannot be reasonably expected to be cured within ninety (90) days,
and the defaulting party gives notice to the other party of its inability
to cure such breach within a 90-day period and the defaulting party
thereafter uses reasonable efforts to cure such breach as soon as
practicable, but in no event longer than one hundred twenty (120) days),
the notifying party shall be entitled, without prejudice to any of its
other rights under this License Agreement, and in addition to any other
remedies available to it by law or in equity, to terminate this License
Agreement by giving notice to that effect to the defaulting party. The
right of either party to terminate this License Agreement, as hereinabove
provided, shall not be affected in any way by its waiver or failure to take
action with respect to any previous Default.
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<PAGE>
Notwithstanding the foregoing, and other than as provided in Section 20.3
and 20.4, a party shall not have a right to terminate this License
Agreement in the event the other party pursuant to Section 22 has sought to
resolve the dispute for which termination is being sought.
20.3 INSOLVENCY OR BANKRUPTCY. Either party may, in addition to any other
------------------------
remedies available to it by law or in equity, terminate this License
Agreement by written notice to the other party in the event (i) the other
party shall have become insolvent or bankrupt, or shall have made an
assignment for the benefit of its creditors, or (ii) there shall have been
appointed a trustee or receiver of the other party or for all or a
substantial part of its property, or (iii) any case or proceeding shall
have been commenced or some other action taken by or against the other
party in bankruptcy or seeking reorganization, liquidation, dissolution,
winding-up, arrangement, composition or readjustment of its debts or any
other relief under any bankruptcy, insolvency, reorganization or other
similar act or law of any jurisdiction now or hereafter in effect or there
shall have been issued a warrant of attachment, execution, distraint or
similar process against any substantial part of the property of the other
party, and any such event or action (except where a party voluntarily takes
such actions (e.g., where a party makes a bankruptcy filing)) shall have
----
continued for ninety (90) days undismissed, unbounded and undischarged
(alternatively a "BANKRUPTCY"); provided, however, that no such right to
terminate shall pertain solely by virtue of a voluntary reorganization for
the purpose of solvent amalgamation or reconstruction.
20.4 SPECIAL TERMINATION PROVISIONS. ASTRA shall have the right to terminate
------------------------------
this License Agreement partially or entirely with respect to a specific
Project, at any time, for any reason, upon twelve (12) months' prior notice
to CENTAUR following the second R&D Period, provided, however, that ASTRA
may terminate this License Agreement with respect to a specific indication
for use of SP at any time, for any reason upon twelve (12) months' prior
notice to CENTAUR, although the Annual Funding shall remain the same.
Should a specific Project (i.e., either SP or AP) be terminated, while the
other Project remains, research funds will be reallocated to the remaining
Project (or to a substitute project if such is mutually agreed upon by the
parties) but at a reduced minimum Annual Funding of [*], as adjusted in
accordance with Section 5. If this License Agreement is terminated with
respect to only one of the Projects, the scope of the Field and other terms
of this License Agreement shall be modified accordingly, including that all
rights with regard to such Project or such indication or use with respect
to SP as terminated, will revert to CENTAUR.
20.5 EFFECT OF TERMINATION OF LICENSE AGREEMENT.
------------------------------------------
(a) EXISTING OBLIGATIONS. Upon termination of this License Agreement
--------------------
for any
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<PAGE>
reason, nothing herein shall be construed to release either party
from any obligation that matured prior to the effective date of such
termination.
(b) EXPIRATION OF TERM OR CENTAUR DEFAULT OR BANKRUPTCY. Upon
---------------------------------------------------
termination of this License Agreement (i) at the expiration of the
Term, or (ii) by ASTRA as a result of (x) a Default by CENTAUR
hereunder, or (y) the Bankruptcy of CENTAUR, the following
provisions of this License Agreement shall survive such termination:
Section 2.1 - License Grant to ASTRA - ASTRA License
Section 2.4 - Oklahoma/Kentucky License
Section 14.1 - Ownership of Technology
Section 15.3 - Joint Patents
Section 16 - Confidentiality
Section 21.12- CENTAUR Indemnification
Section 21.14- Governing Law
Section 22 - Resolution of Disputes
(c) EXPIRATION OF TERM OR ASTRA DEFAULT OR BREACH. Upon termination of
---------------------------------------------
this License Agreement (i) at the expiration of the Term, or (ii) by
CENTAUR as a result of (x) a Default by ASTRA hereunder, or (y) the
Bankruptcy of ASTRA, the following provisions of this License
Agreement shall survive such termination:
Section 2.3 - License Grant to CENTAUR - CENTAUR Grant
Section 14.1 - Ownership of Technology
Section 15.3 - Joint Patents
Section 16 - Confidentiality
Section 21.11- ASTRA Indemnification
Section 21.14- Governing Law
Section 22 - Resolution of Disputes
21. MISCELLANEOUS PROVISIONS
------------------------
21.1 NO PARTNERSHIP. Nothing in this License Agreement is intended or shall be
--------------
deemed to constitute a partnership, agency, employer, employee or joint
venture relationship between the parties. Neither party shall incur any
debts or make any commitments for the other.
21.2 ASSIGNMENTS. Except as otherwise provided herein, neither this License
-----------
Agreement nor
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<PAGE>
any interest hereunder shall be assignable by either party by operation of
law or otherwise without the prior written consent of the other; provided,
however, that either party may assign this License Agreement to any
wholly-owned subsidiary or to any successor by merger or sale of
substantially all of its assets to which this License Agreement relates in
a manner such that the assignor shall remain liable and responsible for
the performance and observance of all its duties and obligations
hereunder, or if the assignor disappears because of such transaction, the
assignee must agree to abide by the terms and conditions of this License
Agreement, provided, however, that if a third party engaged in the
manufacture and/or sale of pharmaceutical products acquires in one (1) or
a series of transactions more than thirty percent (30%) of the capital
stock of CENTAUR entitled to vote for directors (a "TAKEOVER EVENT"),
ASTRA may, at its option, within one hundred eighty (180) days following
notice to ASTRA of such Takeover Event, upon twelve (12) months' prior
notice to CENTAUR, cease Annual Funding, in which event ASTRA shall
undertake (i) to reasonably complete the Project Work on its own, and (ii)
manufacture (or have manufactured) Substance for Licensed Product for
ASTRA's (and ASTRA's sublicensees) use worldwide as provided in the Supply
Agreement. ASTRA will make payments pursuant to Section 7.2 and Net Sales
royalty payments to CENTAUR pursuant to Section 7.3, until such time as
ASTRA's obligation to pay Net Sales royalties terminates pursuant to
Section 7.5.
21.3 FORCE MAJEURE. Neither party shall be liable to the other for loss or
-------------
damages or shall have any right to terminate this License Agreement for
any default or delay (including, without limitation, an inability to
supply Licensed Product) attributable to any act of God, earthquake,
flood, fire, explosion, strike, lockout, labor dispute, casualty or
accident, war, revolution, civil commotion, act of public enemies,
blockage or embargo, injunction, law, order, proclamation, regulation,
ordinance, demand or requirement of any government or subdivision,
authority (including, without limitation, drug regulatory authorities) or
representative of any such government, or any other cause beyond the
reasonable control of such party, if the party affected shall give prompt
notice of any such cause to the other party. The party providing such
notice shall thereupon be excused from such of its obligations hereunder
as it is so disabled and for thirty (30) days thereafter. Notwithstanding
the foregoing, nothing in this Section 21.3 shall excuse or suspend the
obligation to make any payment due hereunder in the manner and at the time
provided.
21.4 NO TRADEMARK RIGHTS. No right, express or implied, is granted by this
-------------------
License Agreement to use in any manner any trade name or trademark of
CENTAUR or ASTRA in connection with the performance of this License
Agreement or the exploitation of any license granted hereunder; each party
may make any legally required reference to the other in connection with
such manufacture or sale of Licensed Product.
-34-
<PAGE>
21.5 PUBLIC ANNOUNCEMENTS. Copies of press releases or similar written
--------------------
communications containing a party's name shall be provided to that party
prior to release.
21.6 ENTIRE AGREEMENT OF THE PARTIES AND AMENDMENT. This License Agreement and
---------------------------------------------
the Supply Agreement together with the Project Work to be entered into as
provided herein constitutes and contains the entire understanding and
agreement of the parties, and cancel and supersede any and all prior
negotiations, correspondence and understandings and agreements, whether
verbal or written, between the parties respecting the subject matter
hereof. No waiver, modification or amendment of any provision of this
License Agreement shall be valid or effective unless made in writing and
signed by a duly authorized officer of each of the parties.
21.7 SEVERABILITY. In the event any one or more of the provisions of this
------------
License Agreement should for any reason be held by any court or authority
having jurisdiction over this License Agreement or either of the parties to
be invalid, illegal or unenforceable, such provision or provisions shall be
validly reformed by addition or deletion of wording as appropriate to avoid
such result and as nearly as possible approximate the intent of the parties
and, if unreformable, shall be divisible and deleted in such jurisdiction
to the extent necessary to comply with such holding, and in all other
jurisdictions this License Agreement shall not be affected; provided,
however, that no such reformation shall be made if the effect of such
reformation would be such as to fundamentally alter the terms of this
License Agreement beyond the intent of the parties.
21.8 CAPTIONS. The captions to this License Agreement are for convenience
--------
only, and are to be of no force or effect in construing or interpreting any
of the provisions of this License Agreement.
21.9 NOTICE AND DELIVERY. Any notice, requests, delivery, approval or consent
-------------------
required or permitted to be given under this License Agreement shall be in
writing and shall be deemed to have been sufficiently given if delivered in
person, delivered by internationally recognized courier, telegraph or sent
by registered air mail letter to the party (which notice shall be
considered effective when received) to whom it is directed at its address
shown below, or such other address as such party shall have last given by
notice to the other party.
If to CENTAUR, addressed to:
President and Chief Executive Officer
Centaur Pharmaceuticals, Inc.
484 Oakmead Parkway
Sunnyvale CA 94086, USA
-35-
<PAGE>
If to ASTRA, addressed to:
President and Chief Executive Officer
ASTRA AB
S-151 85 Sodertalje
Sweden
21.10 LIMITATION OF LIABILITY. Neither party shall be liable to the other for
-----------------------
indirect, incidental or consequential damages arising out of any of the
terms or conditions of this License Agreement or with respect to its
performance or lack thereof, except in the case of a Default resulting
from any reckless and intentional breach of its material obligations
hereunder.
21.11 ASTRA INDEMNIFICATION. ASTRA shall indemnify, defend and hold CENTAUR
---------------------
and each of its officers, directors, employees, agents and consultants
and their respective heirs and assigns (each a "CENTAUR INDEMNITEE")
harmless from and against all third party costs, claims, suits, expenses
(including reasonable attorneys' fees) and damages arising out of or
resulting from (i) the development, testing, manufacture, sale, use or
promotion by ASTRA, or ASTRA's sublicensees, of any Licensed Product,
(ii) a claim of product liability with respect to a Licensed Product
(including, without limitation, a cause of action in the form of tort,
warranty or strict liability), (iii) arising out of any other activity
carried out by ASTRA or ASTRA's sublicensees pursuant to this License
Agreement, provided, however, that the CENTAUR Indemnitee gives
reasonable notice to ASTRA of any such claim or action, tenders the
defense of such claim or action to ASTRA and assists ASTRA, at ASTRA's
expense, in defending such claim or action and does not compromise or
settle such claim or action without ASTRA's prior written consent,
provided, further, however, that ASTRA's indemnification of CENTAUR
hereunder shall not extend to any cost, claim, suit, expense or damage
which arises or results from any gross negligence or intentional
misconduct of CENTAUR, or any third party for whom CENTAUR is
responsible, in the manufacture of Substance for Licensed Product by
CENTAUR, which results in the failure of CENTAUR to manufacture Substance
for Licensed Product in accordance with the Specifications.
21.12 CENTAUR INDEMNIFICATION. CENTAUR shall indemnify, defend and hold ASTRA
-----------------------
and each of its officers, directors, employees, agents and consultants
(and their respective heirs and assigns) (each an "ASTRA INDEMNITEE")
harmless from any gross negligence or intentional misconduct of CENTAUR,
or any third party for whom CENTAUR is responsible (i) in the manufacture
of Substance for Licensed Product by CENTAUR, which results in the
failure of CENTAUR to manufacture Substance for Licensed Product in
accordance with the Specifications, and (ii) arising out of
-36-
<PAGE>
CENTAUR's Co-Promote pursuant to Section 8, and provided, further, that
the ASTRA Indemnitee gives reasonable notice to CENTAUR of any such
claims or action, tenders the defense of such claim or action to CENTAUR
and assists CENTAUR at CENTAUR's expense in defending such claim or
action and does not compromise or settle such claim or action without
CENTAUR's prior written consent.
21.13 REMEDIES CUMULATIVE. Except as provided in Section 6.6, the remedies
-------------------
provided hereunder are cumulative and not exclusive.
21.14 GOVERNING LAW. This License Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York without regard to
the conflict of laws provisions thereof.
22. RESOLUTION OF DISPUTES
----------------------
22.1 GENERAL. In acknowledgment of the benefit to both parties to resolve
-------
differences quickly and efficiently with as little disruption of each
parties' business as possible, the parties agree to abide by the
following provisions in connection with any dispute that should arise
between the parties with respect to any matter relating to this License
Agreement or the Supply Agreement, including any questions regarding the
existence, validity or termination thereof.
22.2 DISPUTE RESOLUTION PROCESS.
--------------------------
(a) SELECTION OF ARBITRATORS. In the event that the parties are unable to
------------------------
resolve a dispute within thirty (30) days after commencement of
mediation efforts by members of senior management (as described in
Section 3.4), either party may submit the matter to binding
arbitration in accordance with the procedures set forth in this
Section 22.2. If a party intends to commence arbitration to resolve a
dispute, such party shall provide written notice to the other party of
such intention, and shall designate one arbitrator. Within ten (10)
days of receipt of such notice, the other party shall designate in
writing a second arbitrator. The two arbitrators so designated shall,
within ten (10) days thereafter, designate a third arbitrator. The
arbitrators so designated shall not be employees, consultants,
officers, directors or shareholders of or otherwise associated with
either party or an Affiliate of either party. Except as modified by
the provisions of this Section 22, the arbitration shall be conducted
in accordance with the then rules of commercial arbitration of and
before the American Arbitration Association in New York, New York. The
language of such arbitration shall be English and all notices and
written submissions provided in such proceeding shall be in English.
-37-
<PAGE>
(b) WRITTEN PROPOSALS. Within thirty (30) days after the designation of
-----------------
the third arbitrator, the arbitrators and the parties shall meet, at
which time each party shall be required to set forth in writing the
issues which need to be resolved and a proposed ruling on each such
issue. Written submissions shall be limited to 30 pages of text (not
including exhibits which may include copies of agreements, or extracts
from books and records, but including testimony affidavits).
(c) HEARING. The arbitrators shall set a date for a hearing, which shall
-------
be no later than thirty (30) days after the submission of written
proposals, to discuss each of the issues identified by the parties.
Each party shall have the right to be represented by counsel. The
arbitrators shall have sole discretion with regard to the
admissibility of any evidence. Unless otherwise determined by
unanimous agreement of the arbitrators the hearing shall be concluded
in one (1) day unless the arbitrators conclude by majority vote that
the hearing should be extended to avoid working an injustice to one of
the parties.
(d) RULING. The arbitrators shall use their best efforts to rule on each
------
disputed issue within thirty (30) days after the completion of the
hearings described in subsection (c) above. The arbitrators shall, by
majority decision, select the ruling proposed by one of the parties as
the arbitrators' ruling. The arbitrators' ruling shall be, in the
absence of fraud or manifest error, binding and conclusive upon both
parties and may be enforced in a court of competent jurisdiction. The
arbitrators may not award punitive or exemplary damages.
22.3 ARBITRATION COSTS. The arbitrators shall be paid a reasonable fee plus
-----------------
expenses, which fees and expenses shall be paid as designated by the
arbitrators or if the arbitrators do not so designate, such costs shall be
shared equally by the parties.
22.4 ATTORNEYS' FEES/COSTS. If any arbitration, litigation, or other legal
---------------------
proceeding occurs between the parties relating to this License Agreement,
the prevailing party shall be entitled to recover (in addition to any
other relief awarded or granted) its reasonable costs and expenses,
including attorneys' fees, incurred in the proceeding.
IN WITNESS WHEREOF, this License Agreement has been duly executed as of June 26,
1995.
ASTRA AB CENTAUR PHARMACEUTICALS, INC.
(PUBL)
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<PAGE>
/s/ Hakan Mogren /s/ Brian D. Frenzel
- ------------------ ----------------------
Name: Hakan Mogren Name: Brian D. Frenzel
Title: President and Title: President and
Chief Executive Officer Chief Executive Officer
-39-
<PAGE>
APPENDIX 1
----------
TO
DEVELOPMENT, LICENSE AND MARKETING AGREEMENT
DATED JUNE 26, 1995
BETWEEN
CENTAUR PHARMACEUTICALS, INC.
AND
ASTRA AB
SUPPLY AGREEMENT
----------------
[SEE EXHIBIT 10.14 TO THE REGISTRATION STATEMENT]
<PAGE>
APPENDIX 2
----------
TO
DEVELOPMENT, LICENSE AND MARKETING AGREEMENT
DATED JUNE 26, 1995
BETWEEN
CENTAUR PHARMACEUTICALS, INC.
AND
ASTRA AB
CENTAUR LICENSES PREVIOUSLY FURNISHED TO ASTRA
----------------------------------------------
1. License Agreement dated as of July 15, 1992 by and among Oklahoma
Medical Research Foundation, The University of Kentucky Research
Foundation and CENTAUR
2. Research Study Agreement dated as of February 1, 1993 by and between
CENTAUR and Oklahoma Medical Research Foundation
3. Research Study Agreement dated as of June 6, 1994 by and between
CENTAUR and Oklahoma Medical Research Foundation
4. Research Study Renewal Agreement dated as of January 1, 1995 by and
between CENTAUR and Oklahoma Medical Research Foundation
5. Research Study Agreement dated as of February 1, 1995 by and between
CENTAUR and the Experimental Research Center at Lund University
Hospital
<PAGE>
APPENDIX 3
----------
TO
DEVELOPMENT, LICENSE AND MARKETING AGREEMENT
DATED JUNE 26, 1995
BETWEEN
CENTAUR PHARMACEUTICALS, INC.
AND
ASTRA AB
OKLAHOMA/KENTUCKY LICENSE
-------------------------
LICENSE AGREEMENT
-----------------
This License Agreement (the "LICENSE AGREEMENT") is made and entered into
as of this _____ day of June, 1995, by and among the OKLAHOMA MEDICAL RESEARCH
FOUNDATION, an Oklahoma nonprofit corporation ("OMRF"), 825 N.E. 13th Street,
Oklahoma City, OK 73104; THE UNIVERSITY OF KENTUCKY RESEARCH FOUNDATION, a
Kentucky nonprofit corporation ("UKRF"), 120 Graham Avenue, Lexington, KY 40506-
0051 (OMRF and UKRF may be hereinafter collectively referred to as "LICENSORS");
and ASTRA AB, a corporation organized and existing under the laws of Sweden
("ASTRA"), having an office at S-151 85 Sodertalje, Sweden. OMRF, URKF,
Licensors and Astra may be individually referred to as a "PARTY" and
collectively as the "PARTIES".
RECITALS
A. Licensors own rights in and to technology relating to compositions of
and methods for using spin-trapping compounds developed or investigated by Dr.
John M. Carney of UKRF and/or Dr. Robert A. Floyd of OMRF, including the
Licensed Technology.
B. Licensors, desiring and intending to have such Licensed Technology used
in the public interest, entered into a License Agreement dated as of July 15,
1992 with Centaur Pharmaceuticals, Inc. ("CENTAUR"), a copy of which, together
with all amendments thereto as of the date hereof, is attached as Exhibit A
---------
(collectively and as subsequently hereafter amended from time to time, the
"CENTAUR LICENSE AGREEMENT"), providing in part for a grant of license to
Centaur with respect to the Licensed Technology, with Centaur's right of
sublicense.
C. Astra and Centaur entered into a Development, License and Marketing
Agreement dated as of June 26, 1995 (the "ASTRA-CENTAUR AGREEMENT") wherein
Centaur granted to Astra (the "ASTRA SUBLICENSE"), pursuant to the Centaur
License Agreement, certain
-1-
<PAGE>
sublicense rights in and to the Licensed Technology.
D. UKRF and OMRF entered into Research Study Agreement(s) with Centaur
dated as of December 1, 1992 and February 1, 1993, respectively, with respect to
the conduct of an integrated, multi-part research program relating to the
synthesis and evaluation of certain anti-oxidant compounds (collectively and as
subsequently hereafter amended from time to time, the "RESEARCH AGREEMENTS"),
copies of which, together with all amendments thereto as of the date hereof, are
attached collectively as Exhibit B.
---------
E. Pursuant to the Astra-Centaur Agreement, Astra has agreed to provide
Centaur with certain funding (the "ASTRA FUNDING") for research and development
of certain aspects of the Licensed Technology.
F. Licensors agree and acknowledge that Astra requires continued and
uninterrupted right of access to and use of the Licensed Technology in order to
exercise Astra's rights pursuant to the Astra Sublicense and Licensor Grant, in
order to research, develop, make, have made, use and sell Licensed Products.
G. Licensors desire that the Licensed Technology be used in the public
interest and is willing to grant a license to Astra on the terms and conditions
set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants and agreements contained herein, the Parties agree as follows:
1. DEFINITIONS
-----------
As used herein:
1.1 "AFFILIATE" means any person, corporation or business entity that owns
---------
or controls Astra, is under common control with Astra or which is owned or
controlled by Astra through ownership of a majority interest, directly or
indirectly, of the outstanding stock eligible to vote for the Board of Directors
or other similar governing body of the entity.
1.2 "ASTRA-CENTAUR AGREEMENT" is defined in Recital C of this License
-----------------------
Agreement.
1.3 "ASTRA SUBLICENSE" is defined in Recital C of this License Agreement.
----------------
1.4 "ASTRA'S AUDITORS" means the independent certified or chartered
----------------
accountants regularly employed by Astra to audit its accounts and certify its
financial statements.
-2-
<PAGE>
1.5 "EFFECTIVE DATE" is defined in paragraph 3.3 of this License
--------------
Agreement.
1.6 "FDA" means the U.S. Food and Drug Administration.
---
1.7 "FIRST COMMERCIAL SALE" shall mean the initial transfer by Astra, its
---------------------
Affiliate or Sublicensee, to an unrelated third party of Licensed Products
subject to royalties hereunder for commercial use, and not for research,
development or testing purposes.
1.8 "LICENSE AGREEMENT" means this License Agreement including all
-----------------
Exhibits and any amendments thereof.
1.9 "LICENSED PATENTS" shall mean the United States and foreign patents,
----------------
and patent applications set forth below and any other United States or foreign
patent applications subsequently filed by or on behalf of Licensors (or patents
licensed to the Licensors with right of sublicense) which arise out of, or which
are based on, the Licensed Technology:
(a) United States Patent No. 5,025,032, titled "Phenyl Butyl Nitrone
Compositions and Methods for Treatment of Oxidative Tissue
Damage," issued June 18, 1991;
(b) United States Patent No. 5,036,097, titled "Phenylbutyl Nitrone
Compositions and Methods for Prevention of Gastric Ulceration,"
issued July 30, 1991;
(c) United States Patent Application No. [*];
(d) United States Patent Application No. [*];
(e) United States Patent Application No. 08/173,579, titled "2,4
Disulfonyl PBN, Its Salts, and Their Use as Pharmaceuticals"
issued _______________;
(f) All patent applications and continuations-in-part contemplated by
OMRF or UKRF as of the date of the Centaur License Agreement
relating to compositions of and methods for using spin-trapping
compounds as evidenced by documented communications between Dr.
Carney and/or Dr. Floyd and Kilpatrick and Cody, patent counsel
for UKRF and
-3-
<PAGE>
OMRF;
any and all divisions, continuations, continuations-in-part, reexaminations,
reissues, extensions and foreign counterparts of these applications and patents
and all patents and comparable rights that issue thereon."
1.10 "LICENSED PROCESS" means any existing or future process which is
----------------
covered in whole or in part by an issued, unexpired claim or a pending claim
contained in the Licensed Patents in the country in which the process is
practiced.
1.11 "LICENSED PRODUCT(S)" means any product or part of a product which:
-------------------
(a) is covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the Licensed Patents in the country in
which the product or part of a product is made, used or sold,
(b) is manufactured using a Licensed Process, or
(c) is used in a Licensed Process and has no substantial use except
in a Licensed Process.
1.12 "LICENSED TECHNOLOGY" means collectively the
-------------------
(a) Licensed Patents, and
(b) Licensed Process, and
(c) all ideas, designs, inventions, discoveries, technical
information, know-how, knowledge, data, specifications, test
results and other information (including but not limited to
designs, technical information, know-how, knowledge, data,
specifications, test results and other information previously
disclosed to Centaur) relating to the subject matter of the
Licensed Patents or Licensed Process (i) known to Licensors on
the date of the Centaur License Agreement, or (ii) arising out of
collaboration between Licensors and Centaur, whether or not
pursuant to the Research Agreements.
1.13 "LICENSED TERRITORY" means the entire world.
------------------
1.14 "LICENSOR GRANT" is defined paragraph 2.1 of this License Agreement.
--------------
1.15 "NDA" means a New Drug Application or its equivalent under then
---
applicable
-4-
<PAGE>
FDA regulations for the marketing of a human pharmaceutical Licensed Product.
1.16 "NET SELLING PRICE" of Licensed Products means the actual cash
-----------------
receipts of Astra or its Sublicensees and, if applicable, the value of all
properties and services received in consideration of a Sale of Licensed
Products, less only:
(a) customary trade, quantity, cash discounts, or rebates actually
allowed and taken,
(b) any freight or other transportation costs, insurance charges,
import/export duties, tariffs or other excise taxes separately
invoiced to and paid or reimbursed by the purchaser,
(c) returns which are accepted by Astra or its Sublicensees from
unrelated purchasers in accordance with their normal practice and
for which Astra or its Sublicensees give credit to such
purchasers, and
(d) sales, excise, turnover and similar use taxes and any duties and
governmental charges imposed upon the production, importation,
use or Sale of such Licensed Products which Astra or its
Sublicensees are under a legal obligation to pay.
provided, however, that where a Sale is deemed consummated by the transfer or
- -------- -------
other disposition of Licensed Products for other than a selling price stated in
cash, the term "Net Selling Price" shall mean the average Net Selling Price
billed by Astra or its Sublicensee, as the case may be, in consideration of the
Sale of comparable Licensed Products during the three (3) month period
immediately preceding such Sale, without reduction of any kind.
1.17 "PROPRIETARY INFORMATION" is defined in paragraph 9.1 of this License
-----------------------
Agreement.
1.18 "RESEARCH AGREEMENTS" means collectively (i) the "Research Study
--------------------
Agreement" dated as of December 1, 1992, between UKRF and Centaur, and (ii) the
"Research Study Agreement" dated as of February 1, 1993, between OMRF and
Centaur, as the same are amended to date and may be hereafter amended, extended
or modified from time to time, copies of which, together with all amendments
thereto as of the date hereof, are collectively attached as Exhibit B.
---------
1.19 "REQUIRED CONSENTS" is defined in paragraph 13.3 of this License
-----------------
Agreement.
1.20 "SALE"/"SOLD" means the sale, transfer, exchange or other disposition
-----------
of
-5-
<PAGE>
Licensed Products, excluding:
---------
(a) transfers of Licensed Products by Astra to its Sublicensees,
(b) transfers of Licensed Products for which Astra or its
Sublicensees receives no more than nominal payment in connection
with clinical testing in support of efforts to obtain regulatory
approvals to sell Licensed Products in the Licensed Territory,
and
(c) all distribution of Licensed Products for promotional purposes
for which Astra or its Sublicensees receives no more than nominal
payment.
Sales of Licensed Products shall be deemed consummated upon the later of
recognition of revenue or receipt of payment, by Astra or its Sublicensees, as
the case may be, for such Sales of Licensed Products from the purchaser.
1.21 "SUBLICENSE INITIATION FEE" means any Sublicense Fee or non-
-------------------------
refundable advance against royalties paid or to be paid by a Sublicensee, but
does not include any payment for research or other services or reimbursement of
Astra's expenses.
1.22 "SUBLICENSEES" is defined in paragraph 2.3 of this License Agreement.
------------
2. GRANT OF LICENSE
----------------
2.1 LICENSE. Subject to the license retained by Licensors in paragraph
-------
2.2 and the other terms of this License Agreement, and effective as of the date
hereof, Licensors hereby grant to Astra (the "LICENSOR GRANT") an exclusive
right and license (co-exclusive with Centaur), with Astra's right to sublicense,
of such rights and licenses under and pursuant to the Licensed Technology, but
only to the extent set forth in the Astra Sublicense granted by Centaur, to use
the Licensed Technology to research, develop, make, have made, use, lease and
sell and have sold Licensed Products and to practice the Licensed Processes in
the Licensed Territory during the term of this License Agreement unless sooner
terminated as provided in this License Agreement.
2.2 RETAINED LICENSE. Licensors retain the perpetual, royalty-free right
----------------
and license to practice the Licensed Technology solely for research and
educational purposes.
2.3 SUBLICENSES. Astra shall have the right to sublicense the rights
-----------
granted hereunder to third parties and Affiliates of Astra (collectively the
"SUBLICENSEES") provided that Astra promptly notifies Licensors of each such
Sublicense. Any such Sublicense will survive termination of this License
Agreement only if Licensors approve the identity of the
-6-
<PAGE>
Sublicensee in writing, either before or after Astra's grant of the Sublicense.
Astra may request Licensors' approval of a Sublicensee at any time, and
Licensors will not unreasonably withhold or delay such approval.
2.4 SUBLICENSEE OBLIGATIONS. All Sublicenses granted by Astra shall
-----------------------
provide that the obligations of Astra to Licensors under Sections 5, 9, 11 and
12 of this License Agreement shall be binding upon Sublicensee as if it were a
party to this License Agreement.
2.5 SUBLICENSE COPIES AND REPORTS. Astra shall provide to Licensors (i) a
-----------------------------
copy of all Sublicense agreements promptly after execution, and (ii) annually,
following the Effective Date, copies of all reports relating to Sales of
Licensed Product received by Astra from its Sublicensees during the preceding
twelve (12) month period.
2.6 NONCASH CONSIDERATION. If Astra receives from Sublicensees anything
---------------------
of value in lieu of cash payments in satisfaction of payment of obligations
under the Sublicense and this License Agreement, then Astra shall determine the
cash value of such consideration in good faith and shall pay Licensors based on
such cash value as set forth in Section 4.
2.7 NO IMPLIED LICENSE. The license and rights granted in this License
------------------
Agreement shall not be construed to confer any rights upon Astra by implication,
estoppel or otherwise as to any technology not specifically identified in this
License Agreement as "Licensed Technology", nor shall it be construed to confer
any rights outside the Licensed Territory.
2.8 FIRST RIGHT OF NEGOTIATION. Astra shall have the first right to
--------------------------
negotiate with Licensors to obtain a license to practice any patent Licensors
may acquire or file after the date of this License Agreement (other than any
patent arising out of Licensed Technology which shall be deemed granted to Astra
pursuant to paragraph 2.1 of the License Agreement) that relates to the subject
matter of one or more Licensed Patents on such terms and conditions that
Licensors and Astra may agree through negotiations in good faith. If Astra
declines to exercise its right to negotiate or the parties have not entered into
a License within six (6) months after Licensors notify Astra of the existence of
a patent subject to this paragraph 2.8, Licensors may negotiate with and grant a
License or other rights in such patent to others (a "THIRD PARTY GRANT") on
terms substantially no more favorable to such other party than were last offered
by Licensors to Astra. Notwithstanding the foregoing, no Third Party Grant shall
diminish, reduce or modify the co-exclusive (with Centaur) right and licenses
granted by Licensors to Astra set forth at paragraph 2.1 of this License
Agreement.
3. DUE DILIGENCE - EFFECTIVE DATE
------------------------------
3.1 DILIGENCE. Astra shall use its reasonable efforts throughout the term
---------
of this License Agreement to bring one or more Licensed Products to market
through a program for
-7-
<PAGE>
exploiting the Astra Sublicense and Licensor Grant and for creating, supplying
and servicing a market for Licensed Products in the Licensed Territory.
3.2 DELIVERY. Promptly after the date hereof and thereafter from time to
--------
time upon reasonable notice, Licensors shall deliver to Astra (to the extent not
provided to Astra by Centaur pursuant to the Astra Sublicense) all data,
documentation, and other physical embodiments of the Licensed Technology
together with all cooperation, assistance and access to data reasonably
requested by Astra to effect transfer of the Licensed Technology and permit
Astra to fully utilize the Astra Sublicense and Licensor Grant.
3.3 EFFECTIVE DATE. Notwithstanding the current effectiveness of the
--------------
Licensor Grant, Astra, and its Sublicensees, covenant and agree not to use the
Licensor Grant, or any right granted herein, until on and after the date (the
"EFFECTIVE DATE") which is the earlier to occur of:
(a) notification by Licensors (the "LICENSORS NOTIFICATION") that the
Centaur License Agreement has been terminated, or
(b) notification by Astra (the "ASTRA NOTIFICATION") that the Astra-
Centaur Agreement has been terminated by Astra as a result of a
"Default" or "Bankruptcy" of Centaur (as such terms are defined
in the Astra-Centaur Agreement).
Upon the Effective Date, Astra and its Sublicensees may use and exercise the
Licensor Grant in full, without further agreement or documentation being entered
into by Astra or Licensors. Licensors covenant and agree that the effect,
accuracy or underlying basis of the Astra Notification shall be uncontestable by
Licensors. Upon termination of the Centaur License Agreement, the Licensor
Grant to Astra shall be deemed exclusive.
3.4 TERMINATION OF ASTRA FUNDING. Any termination, cessation or
----------------------------
interruption of the Astra Funding shall have no affect upon Licensor Grant or
Astra's rights herein.
4. ROYALTY
-------
4.1 PAYMENT OF ROYALTY. Commencing with the First Commercial Sale
------------------
following the Effective Date and continuing during the term of this License
Agreement as set forth in paragraph 10.1 hereof, Astra agrees to pay to
Licensors, in full consideration for the Licensor Grant:
(a) A royalty equal to [*] of the Net Selling Price of
Licensed Products Sold by or for Astra and its Sublicensees;
-8-
<PAGE>
(b) With respect to each Sublicense granted by Astra under this
License Agreement, [*] of all Sublicensee
Initiation Fees paid to Astra pursuant to such Sublicense;
(c) in the event that Astra's total annual royalty and Sublicense
payments to Licensors pursuant to the preceding paragraph 4.1(a)
and (b) during the calendar year following the Effective Date and
each calendar year thereafter is less than the annual minimum set
forth opposite such year below (the "ANNUAL MINIMUM"), a payment
to Licensors together with the annual report required in
paragraph 6.3 of this License Agreement (or, if no such annual
report is required, together with the quarterly report required
in paragraph 6.1 of this License Agreement for the three (3)
month period ending on December 31 of such calendar year) equal
to the difference between such Annual Minimum and the total
royalty and Sublicense payments paid to Licensors for the
preceding calendar year pursuant to paragraphs 4.1(a) and (b)
above:
Calendar Year Annual Minimum
------------- --------------
. First year [*]
. Second and each subsequent
year through the year
the FDA first approves
an NDA [*]
. Each year after the year the
FDA first approves an NDA [*]
4.2 NON-CUMULATIVE ROYALTIES. Royalties shall be payable by Astra with
------------------------
respect to all of its or its Sublicensees' Sales except for Astra's resale of
any products purchased from Licensors. Royalties shall not become payable at
the time of Sublicense or transfer from Astra to its Sublicensees, but shall
become payable only when Astra receives payment of royalties (after recovery of
any prepaid royalties included in any Sublicense Initiation Fee) from its
Sublicensee with respect to such Sublicensee's Sales.
4.3 NO MULTIPLE ROYALTIES. No multiple royalties shall be payable because
---------------------
any Licensed Product is covered by more than one patent within the Licensed
Patents.
4.4 DEDUCTION OF TAXES. Any income or other tax which Astra is required
------------------
to withhold and pay on behalf of Licensors with respect to the royalties payable
to Licensors under this License Agreement shall be deducted from such royalties
prior to remittance to
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Licensors; provided, however, that in regard to any tax so deducted, Astra shall
-------- -------
give Licensors such assistance as may reasonably be necessary to enable
Licensors to claim exemption therefrom. In each case, Astra shall furnish
Licensors with proper evidence of the taxes so paid on its behalf.
4.5 INTEREST. Royalty and other payments required in this License
--------
Agreement shall, if overdue, bear interest until payment at a per annum rate of
two percent (2%) above the prime rate in effect at the Chase Manhattan Bank,
N.A., New York, New York, U.S.A., on the due date, but not more than the highest
rate permitted by law. The payment of such interest shall not foreclose
Licensors from exercising any other rights they may have because any payment is
late.
4.6 CURRENCY CONVERSION AND DELIVERY. All payments required in this
--------------------------------
License Agreement shall be paid in United States dollars, delivered in
accordance with paragraph 6.2 and 13.9 of this License Agreement or to such
other place as Licensors may reasonably designate consistent with the applicable
laws and regulations in any foreign country. If any currency conversion shall
be required in connection with the payment of royalties hereunder, such
conversion shall be at the rate in effect at the Chase Manhattan Bank, New York,
New York, U.S.A., on the last business day of the calendar quarterly reporting
period to which such payment(s) relate.
5. RECORDS
-------
5.1 RECORDS OF SALES. Commencing on and after the Effective Date, Astra
----------------
shall at all times during the term of this License Agreement and for a period of
three (3) years after termination of this License Agreement keep at its
principal place of business true and accurate records of all Sales subject to
Section 4 of this License Agreement in such form and manner that all royalties
owed hereunder to Licensors may be readily and accurately determined. Such
records shall be kept for a period of at least three (3) years after the end of
the royalty period to which they pertain and shall include, but not by way of
limitation, all information necessary for Astra's Auditors to prepare the
reports required by Section 6 of this License Agreement.
5.2 INSPECTION. Commencing on and after the Effective Date, Licensors
----------
shall have the right, from time to time, at reasonable times during normal
business hours no later than three (3) years after expiration or termination of
this License Agreement and at Licensors' expense, to examine the records of
Astra, at Astra's place of business, through an independent certified public
accountant for the purpose of verifying the amounts owed to Licensors hereunder
and the accuracy of the reports furnished by Astra under Section 6 of this
License Agreement. Licensors and their accountant shall maintain the
confidentiality of all confidential information obtained from examination of
Astra's records and shall use such information only for the purposes of this
License Agreement.
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<PAGE>
6. REPORTS
-------
6.1 QUARTERLY REPORTS. Astra shall, on and after the Effective Date,
-----------------
prepare and deliver to Licensors within sixty (60) days after March 31, June 30,
September 30 and December 31 of each year during the term of this License
Agreement, a true and accurate report, giving such particulars of the business
conducted by Astra and its Sublicensees during the preceding three (3) month
period as is required to calculate the royalties due Licensors hereunder. Such
report shall include at least the following:
(a) the total Net Selling Price of all Licensed Products Sold by
Astra and its Sublicensees during the preceding three (3) month
period and for the calendar year to date,
(b) all Sublicense Initiation Fees received from Sublicensees during
the preceding three (3) month period and for the calendar year to
date, and
(c) the names and address of all new Sublicensees of Astra since the
previous report.
6.2 PAYMENTS. With each such report delivered, Astra shall pay to
--------
Licensors (by delivery to OMRF) all amounts due under this License Agreement.
If no payments are due, Astra shall so report.
6.3 AUDIT REPORT. Commencing on and after the Effective Date, and within
------------
one hundred fifty (150) days after the end of each whole or partial fiscal year
of Astra in which Licensed Products are Sold during the term of this License
Agreement, Astra shall have its books and records audited by Astra's Auditors
and shall direct them to prepare and submit to Licensors, certified financial
statements for the preceding fiscal year including, at a minimum, a balance
sheet together with an operating statement together with an audit report
thereon. Appropriate disclosure will be made in the footnotes to Astra's
audited financial statements of (i) the total Sales of Licensed Products by
Astra and its Sublicensees during the past year, and (ii) the amounts owed to
Licensors in total at the year end balance sheet date. If such disclosure is
not made in the footnotes to Astra's audited financial statements, then Astra's
Auditors shall prepare a special report covering items (i) and (ii) above and
submit it to Licensors.
7. PATENT PROSECUTION
------------------
7.1 LICENSED PATENTS. Licensors shall apply for, seek prompt issuance of,
----------------
and maintain during the term of this License Agreement the patents, patent
applications and foreign
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<PAGE>
counterparts, as the case may be, included within the Licensed Patents that are
(i) specifically identified by patent number or application serial number in
paragraph 1.9 of this License Agreement, or (ii) timely identified or specified
by Astra by notice to Licensors. Except as provided in paragraph 7.4, the
prosecution and maintenance of all patent applications, foreign counterparts and
patents within the Licensed Patents shall be the primary responsibility of
Licensors; provided, however, that Astra shall be afforded reasonable
-------- -------
opportunities to advise Licensors and shall cooperate with Licensors in such
prosecution and maintenance.
7.2 LICENSORS' REIMBURSEMENT. Except as provided in paragraph 7.4, Astra
------------------------
shall on and after the Effective Date reimburse Licensors for all reasonable
out-of-pocket fees, costs and expenses reasonably paid or incurred by Licensors
in filing, prosecuting and maintaining the Licensed Patents on a pro-rata basis
with other Foundation licensees under the Licensed Technology, taking into
consideration the relative value obtained by each such licensee from such patent
or patent application as determined by Licensors in good faith consultation with
such licensees. Astra shall, on and after the Effective Date, deliver such
reimbursement to Licensors (or, if Licensors request, directly to Licensors'
patent counsel) within thirty (30) days after Licensors (or Licensors' patent
counsel) notify Astra from time to time of the amount of such fees, costs and
expenses which have been paid or incurred by Licensors.
7.3 PATENT ABANDONMENT. Licensors shall, on and after the date hereof,
------------------
promptly advise Astra of the grant, lapse, revocation, surrender, any threatened
invalidation of, or of their intention to abandon any such patent, application
or foreign counterpart. If Licensors advise Astra of their intention not to
pursue a patent on any Licensed Technology or to abandon any such patent,
application or foreign counterpart, Astra shall have the right, at its own
expense, to pursue such patent, application or foreign counterpart, in Astra's
name or in Licensors' name, as Astra may determine, and all rights resulting
therefrom shall vest in Astra alone.
7.4 FOREIGN APPLICATION. Astra shall on and after the Effective Date
-------------------
designate each country, if any, in which Astra desires that patent
application(s) corresponding to the Licensed Patents be filed. Astra shall, on
and after the Effective Date, pay all costs and legal fees associated with the
preparation and filing of such designated foreign patent applications, and such
applications shall be in Licensors' name. Licensors may elect to file
corresponding patent applications in countries other than those designated by
Astra, but in that event Licensors shall be responsible for all costs associated
with such non-designated filings. Licensors will notify Astra that it intends
to make such filings. Astra will, on and after the Effective Date, have thirty
(30) days to decide to pay for such filings and prosecutions. If it does not
decide to pay for such applications within the 30-day period, on and after the
Effective Date, neither of such applications nor any patents that issue thereon
shall be considered to be Licensed Patents, and Astra shall forfeit its rights
under this License Agreement with respect to such applications and patents.
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<PAGE>
8. PATENT INFRINGEMENT
-------------------
8.1 NOTICE OF INFRINGEMENT. Astra shall promptly notify Licensors of any
----------------------
alleged infringement of the Licensed Patents and of any available evidence of
such infringement.
8.2 SUIT BY ASTRA. Astra shall have the right, but not the obligation, to
-------------
commence suit for any infringement of the Licensed Patents, and Licensors agree
that Astra may cause Licensors to join Astra as a party to any such suit at no
expense to Licensors. The total cost of any such infringement action commenced
or defended solely by Astra shall be borne by Astra, and Astra shall retain any
recovery or damages awarded in such action, but such recovery or damages (less
the cost of such recovery, including reasonable attorneys' and experts' fees)
shall be treated as Sales of Licensed Products, and Astra shall pay royalties
thereon to Licensors in accordance with paragraph 4.1(a) of this License
Agreement. No settlement, consent judgment or other voluntary final disposition
of the suit may be entered into without the written consent of Licensors, which
consent shall not be unreasonably withheld. Astra shall indemnify Licensors
against any order for costs or award of sanctions that may be made or entered
against Licensors in such proceedings commenced or defended solely by Astra.
8.3 SUIT BY LICENSORS. If within six (6) months after notice by Astra to
-----------------
Licensors, or by one of Licensors to Astra, of any alleged infringement, Astra
has been unsuccessful in persuading the alleged infringer to desist and has not
brought an infringement action, or if Astra notifies Licensors at any time of
Astra's intention not to bring suit against an alleged infringer, then and only
then, Licensors shall have the right, but not the obligation, to commence suit
for such infringement at Licensors' sole expense, and Licensors may, in such
suit, use the name of Astra as a nominal party. No settlement, consent judgment
or other voluntary final disposition of the suit may be entered into without the
written consent of Astra, which consent shall not be unreasonably withheld.
Astra shall not be responsible for any order for costs or awards of sanctions
that may be made or entered against Astra in such proceedings.
8.4 DEFENSE. In the event that a declaratory judgment action alleging
-------
invalidity, unenforceability or noninfringement of any of the Licensed Patents
shall be brought against Astra, Licensors or either of them, Astra shall have
the first right to defend such action; provided, however, that if Astra
-----------------
determines at any time that it does not desire to defend such action, it shall
promptly so advise Licensors, and Licensors shall then have the right to defend
such action at Licensors' sole expense. Astra shall not be responsible for any
order for costs or award of sanctions that may be made or entered against Astra
in such proceedings.
8.5 COOPERATION. In any suit either Party may commence or defend pursuant
-----------
to its rights under this License Agreement in order to enforce or defend the
validity or enforceability
-13-
<PAGE>
of the Licensed Patents, the other Party shall, at the reasonable request and
expense of the Party initiating or defending such suit, reasonably 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.
9. CONFIDENTIALITY
---------------
9.1 MAINTENANCE OF CONFIDENTIALITY. No Party shall, without the express
------------------------------
written consent of the other Parties to this License Agreement in advance, for
any reason or at any time either during or for a period of three (3) years
subsequent to the term of this License Agreement, except as otherwise provided
in this paragraph 9.1, (i) use (except in the course of practicing the licenses
granted in this License Agreement), or (ii) disclose (except as is necessary in
the course of sublicensing, marketing or selling Licensed Products or obtaining
governmental approval to do so, or as is required to be disclosed pursuant to
law (provided that the receiving Party uses reasonable efforts to give the
disclosing Party reasonable notice of such required disclosure) as contemplated
in this License Agreement) to any person (including without limitation any
director, officer or employee of a Party who is not under an obligation of
confidentiality substantially similar to the obligation contained herein) the
Licensed Technology or any other information relating to the Licensed Products
(collectively the "PROPRIETARY INFORMATION"). This obligation of non-use and
non-disclosure shall not extend to Proprietary Information:
(a) which can be demonstrated by the receiving Party to have been
within its legitimate possession prior to the time of disclosure
by the disclosing Party,
(b) which was in the public domain prior to disclosure by the
disclosing Party, as evidenced by documents which were generally
published prior to such disclosure,
(c) which, after disclosure by the disclosing Party, comes into the
public domain through no fault of the receiving Party, or
(d) which is disclosed to the receiving Party by a third party having
legitimate possession thereof and the unrestricted right to make
such disclosure.
9.2 PRIOR AGREEMENTS. The provisions of this License Agreement supersede
----------------
and shall be substituted for any terms of any prior confidentiality agreement(s)
relating to the Proprietary Information between Astra and either of the
Licensors which are not consistent with this License Agreement.
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<PAGE>
10. TERM AND TERMINATION
--------------------
10.1 DURATION. Unless sooner terminated as otherwise provided in this
--------
License Agreement, the term of this License Agreement shall commence upon the
date hereof and shall continue until the later of (i) fifteen (15) years from
the date hereof, or (ii) the date of expiration of the last to expire of the
Licensed Patents, except that upon expiration of this License Agreement at the
-----------
end of such term, Astra shall automatically have a perpetual, paid-up, royalty-
free license to use and sublicense Licensed Technology without restriction.
10.2 TERMINATION. Licensors shall have the right to terminate this
-----------
License Agreement on the occurrence of any one or more of the following events
and notice to Astra pursuant to paragraph 10.3:
(a) failure of Astra to make any payment when due required pursuant
to this License Agreement;
(b) failure of Astra to render reports to Licensors as required by
this License Agreement;
(c) the insolvency of Astra;
(d) the institution of any proceeding by Astra under any bankruptcy,
insolvency or moratorium law;
(e) any assignment by Astra of substantially all of its assets for
the benefit of creditors;
(f) placement of Astra's assets in the hands of a trustee or a
receiver unless the receivership or trust is dissolved within
thirty (30) days thereafter; or
(g) the material or intentional breach by Astra of any other term of
this License Agreement.
10.3 EXERCISE. Licensors may exercise their right of termination as
--------
provided in paragraph 10.2, by giving Astra, its trustees, receivers or assigns,
sixty (60) days prior written notice of Licensors' election to terminate this
License Agreement. Upon the expiration of such period, this License Agreement
shall automatically terminate unless (i) Astra has previously cured the breach
or condition permitting termination under the preceding paragraph 10.2, or (ii)
such breach or condition cannot reasonably be cured within sixty (60) days due
to causes beyond Astra's reasonable control, Astra commences good faith efforts
to cure such breach
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<PAGE>
within such 60-day period and Astra does cure the breach within one hundred
twenty (120) days after the expiration of such 60-day period, in which case this
License Agreement shall not terminate. Such notice and termination shall not
prejudice Licensors' rights to any royalties and other sums due hereunder and
shall not prejudice any cause of action or claim of Licensors accrued or to
accrue on account of any breach or default by Astra.
10.4 FAILURE TO ENFORCE. The failure of Licensors at any time, or for any
------------------
period of time, to enforce any of the provisions of this License Agreement shall
not be construed as a waiver of such provisions or the right of Licensors
thereafter to enforce each and every such provision.
10.5 TERMINATION BY ASTRA. Astra may terminate this License Agreement at
--------------------
any time giving Licensors six (6) months prior written notice of Astra's
election to terminate.
10.6 EFFECT. In the event this License Agreement is terminated prior to
------
its expiration for any reason whatsoever, Astra (i) shall not have any right to
return of any payments of any kind theretofore made by Astra to Licensors
pursuant to this License Agreement, (ii) shall return, or at Licensor's
direction, destroy, all plans, drawings, papers, notes, writings and other
documents, samples, organisms, biological materials and models constituting the
Licensed Technology, retaining no copies, (iii) shall refrain from using or
publishing any portion of the Licensed Technology as provided in Section 9 of
this License Agreement, and (iv) shall cease manufacturing, processing,
producing, using, selling or distributing Licensed Products; provided, however
-----------------
that Astra may continue to sell in the ordinary course of business for a period
of one hundred eighty (180) days reasonable quantities of Licensed Products
which are fully manufactured and in Astra's normal inventory at the date of
termination if:
(a) all monetary obligations of Astra to Licensors have been
satisfied, and
(b) royalties on such sales are paid to Licensors in the amounts and
in the manner provided in this License Agreement.
Upon termination of this License Agreement, any Sublicenses granted by Astra to
Sublicensees that have been approved by Licensor as contemplated by Section 2.3
and in which the Sublicensees are in full compliance, including without
limitation compliance with the obligations under Section 5, 9, 11 and 12 of this
License Agreement, shall continue in full force and effect with Licensors
substituted in Astra's place. The provisions of Sections 9, 11 and 12 of this
License Agreement shall remain in full force and effect notwithstanding any
termination of this License Agreement.
11. INDEMNIFICATION AND INSURANCE
-----------------------------
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<PAGE>
11.1 INDEMNIFICATION. Other than as specifically provided elsewhere in
---------------
this License Agreement, Astra shall defend, indemnify, and hold harmless
Licensors, The University of Kentucky, the University of Oklahoma and their
officers, directors, trustees and employees and all of their heirs, executors,
administrators and legal representatives ("INDEMNITEES") from and against any
and all claims, demands, loss, liability, expense or damage (including
investigative costs, court costs and attorneys' fees) Indemnitees may suffer,
pay or incur as a result of claims, demands or actions against any of the
Indemnitees arising or alleged to arise by reason of or in connection with any
and all personal injury, economic loss and property damage caused or alleged to
be caused or contributed to in whole or in part by the manufacture, use, lease,
sale or sublicense of Licensed Products by Astra, whether asserted under a tort
or contractual theory or any other legal theory, including but not limited to
any and all claims, demands, and actions in which it is alleged that (i) an
Indemnitee's negligence or representations about the Licensed Products caused
any defect in their manufacture, design, labeling or performance, or (ii) any
alleged infringement of any patent, trademark or copyright, caused or
contributed in whole or in part to the personal injury, economic loss or
property damage. Astra's obligations under this paragraph 11.1 shall survive
the expiration or termination of this License Agreement for any reason. The
foregoing indemnification shall not apply in the event a court of competent
jurisdiction determines that such liability, demands, damages, expenses and
losses, arose in whole or in part as a result of Licensors' intentional
misconduct or gross negligence.
11.2 INSURANCE. Without limiting Astra's indemnity obligations under the
---------
preceding paragraph 11.1, prior to testing any compounds in humans, Astra shall
obtain a liability insurance policy which:
(a) insures Indemnitees for all claims, demands and actions mentioned
in the preceding paragraph 11.1 of this License Agreement;
(b) includes a contractual endorsement providing coverage for all
such liability which may be incurred by Indemnitees in connection
with this License Agreement;
(c) requires the insurance carrier to provide Licensors with no less
than thirty (30) days written notice of any change in the terms
of coverage of the policy or its cancellation; and
(d) provides Indemnitees with product liability coverage in the
following amounts for the periods indicated below:
(i) $500,000 in product liability coverage during the period
in which one (1) or more Licensed Products are being used
in United
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<PAGE>
States FDS clinical trials in human beings but no Licensed
Products are approved by FDA for use in human beings;
(ii) $2,500,000 in product liability coverage for each Licensed
Product approved by FDA for use in human beings;
provided that the aggregate maximum amount of product liability coverage for all
- -------------
Licensed Products at any time shall not exceed $10,000,000 combined single
limit for bodily injury and property damage liability, subject to a deductible
of not more than $100,000 per occurrence, and provided further that Astra, at
its option, may provide Licensors with a certificate of Astra's insurer
substantially in the form of Exhibit C attached hereto, in lieu of naming
---------
Licensors as insureds.
Astra shall maintain such liability insurance policy throughout the term of this
License Agreement and for three (3) years thereafter.
11.3 NOTICE OF CLAIMS. Astra will promptly notify Licensors of all claims
----------------
involving Licensed Products.
11.4 EVIDENCE OF INSURANCE. Astra shall provide Licensors with copies of
---------------------
liability policies which comply fully with this License Agreement during the
entire period Astra is required to maintain such insurance. If Astra fails at
any time to maintain insurance as required in this License Agreement, Licensors
may (but shall be under no obligation to) purchase their own policy providing
all or any of the coverage and recover from Astra the cost thereof, which shall
be payable on demand.
11.5 INDEMNIFICATION BY ASTRA. Astra shall indemnify and hold harmless
------------------------
Indemnitees against and with respect to all losses, damages, claims, liabilities
or expenses (including reasonable attorneys' fees and expenses) incurred or
sustained by any of them as a result of, or arising out of, any violation,
breach or nonfulfillment on the part of Astra of any representation, warranty,
covenant or agreement made by Astra pursuant to this License Agreement.
Licensors or Indemnities shall notify Astra in writing promptly after it or they
acquire actual knowledge of any action or claim against it or them hereunder
which may give rise to liability of Astra pursuant to this paragraph 11.5.
Astra may, at its own expense, through legal counsel reasonably approved by
Licensors, defend or settle any such claim or action, provided that Astra posts
security that is adequate in the reasonable discretion of Licensors to protect
Licensors or Indemnities and provided Licensors are notified in writing of
Astra's intent to so defend within ten (10) days after Astra has been notified
by Licensors or such other Indemnities of such claim or action.
11.6 CONTRIBUTION BY ASTRA. If the indemnification provided for in the
---------------------
preceding
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<PAGE>
paragraph 11.5 is unavailable or insufficient to hold harmless Indemnities in
respect of any of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above, then Astra shall contribute to the amount
paid or payable by each such Indemnities as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by Astra on the one hand
and Licensors and any other Indemnities on the other from the activities from
which such losses, claims, damages or liabilities arose, as well as the relative
fault of Astra on the one hand and Licensors on the other in connection with the
actions or inactions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations.
12. MERCHANTABILITY, EXCLUSION OF WARRANTIES, LIMITATION OF DAMAGES AND
-------------------------------------------------------------------
WARRANTIES.
----------
12.1 NO WARRANTY. Astra has made its own evaluation of the potential
-----------
capabilities, safety, utility and commercial application of the Licensed
Technology, Licensed Products and Licensed Processes.
ACCORDINGLY, LICENSORS MAKE NO REPRESENTATION OR WARRANTY OF ANY KIND
WITH RESPECT TO THE LICENSED TECHNOLOGY, LICENSED PRODUCTS OR LICENSED
PROCESSES AND EXPRESSLY DISCLAIM ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER IMPLIED WARRANTIES WITH
RESPECT TO THE CAPABILITIES, SAFETY, UTILITY OR COMMERCIAL APPLICATION
OF LICENSED TECHNOLOGY, LICENSED PRODUCTS AND LICENSED PROCESSES.
12.2 LIMITATION OF LIABILITY. LICENSORS SHALL NOT BE LIABLE FOR ANY
-----------------------
DIRECT, CONSEQUENTIAL OR OTHER DAMAGES SUFFERED BY ASTRA OR ANY OTHER RESULTING
FROM THE USE OF THE LICENSED TECHNOLOGY, LICENSED PRODUCTS OR LICENSED
PROCESSES.
12.3 REPRESENTATIONS AND WARRANTIES OF ASTRA. Astra hereby makes the
---------------------------------------
following representations and warranties to Licensors, which representations and
warranties, together with all other representations and warranties of Astra in
this License Agreement, are true and correct on the date hereof:
(a) Astra is a corporation duly organized, validly existing and in
good standing under the laws of Sweden and has all requisite
corporate power and authority to enter into this License
Agreement and perform its obligations hereunder.
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<PAGE>
(b) Neither the execution or delivery of this License Agreement, nor
the consummation of the transactions contemplated herein, will
(i) violate or conflict with any provision of the incorporation
documents or By-laws of Astra, as each may have been amended,
(ii) with or without the giving of notice of the lapse of time or
both (x) result in a breach of, or violate, or be in conflict
with or constitute a default under, or result in the termination
or cancellation of, or accelerate the performance required under,
any security instrument, mortgage, note, debenture, indenture,
loan, lease, contract, agreement or other instrument, to which
Astra is a party or by which Astra or any of Astra's properties
or assets may be bound or affected, or (y) result in the loss or
adverse modification of any lease, franchise, license or other
contractual right or other authorization granted to or otherwise
held by Astra, (iii) require the consent of any party to any such
agreement or commitment to which Astra is a party or by which any
of Astra's properties or assets are bound, (iv) result in the
creation or imposition of any lien, claim or encumbrance upon any
property or assets of Astra, or (v) require any consent,
approval, authorization, order, filing, registration or
qualification of or with any court or governmental authority or
arbitrator to which Astra is subject or by which any of its
properties or assets may be bound or affected.
(c) All actions to authorize the execution and delivery of this
License Agreement and the consummation of the transactions
contemplated herein have been duly taken, and this License
Agreement constitutes the valid and binding obligation of Astra
enforceable in accordance with its terms.
(d) There are no claims (relating to patent infringement or any other
matters), actions, suits, proceedings, arbitrations or
investigations pending or, to the best of Astra's knowledge,
threatened, against Astra which is adversely determined would
adversely affect the Licensed Technology (or the patentability
thereof) or other technology practiced by Astra, or Astra's
ability to enter into or carry out this License Agreement or use
or license Licensed Technology.
12.4 REPRESENTATIONS AND WARRANTIES OF OMRF. OMRF hereby makes the
--------------------------------------
following representations and warranties to Astra, which representations and
warranties, together with all other representations and warranties of OMRF in
this License Agreement, are true and correct on the date hereof:
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<PAGE>
(a) OMRF is a nonprofit corporation duly organized, validly existing
and in good standing under the laws of the State of Oklahoma and
has all requisite corporate power and authority to enter into
this License Agreement and perform its obligations hereunder.
(b) Neither the execution or delivery of this License Agreement, nor
the consummation of the transactions contemplated herein, will
(i) violate or conflict with any provision of the Articles of
Incorporation or By-laws of OMRF, as each may have been amended,
(ii) require the consent of any party to any agreement or
commitment to which OMRF is a party or which affects the Licensed
Technology, (iii) result in the creation or imposition of any
lien, claim or encumbrance upon the Licensed Technology; or (iv)
require any consent, approval, authorization, order, filing,
registration or qualification of or with any court or
governmental authority or arbitrator to which OMRF is subject or
by which the Licensed Technology may be affected.
(c) All actions to authorize the execution and delivery of this
License Agreement and the consummation of the transactions
contemplated herein have been duly taken, and this License
Agreement constitutes the valid and binding obligation of OMRF
enforceable in accordance with its terms.
(d) There are no claims (relating to patent infringement or any other
matters relating to the Licensed Technology), actions, suits,
proceedings, arbitrations or investigations pending or, to the
best of OMRF's knowledge, threatened, against OMRF which if
adversely determined would adversely affect the Licensed
Technology (or the patentability thereof) or OMRF's ability to
enter into or carry out this License Agreement.
(e) OMRF represents and warrants to the best of its knowledge and
belief that OMRF (together with UKRF) is the sole owner of the
Licensed Technology and such is free of any lien, encumbrance,
restriction, and other legal or equitable claim, apart from the
possible non-exclusive rights held by the United States
Government as a result of research sponsorship.
(f) OMRF further represents and warrants that OMRF has not granted
(and will not grant during the term of this License Agreement)
such rights or licenses to the Licensed Technology as set forth
in the Licensor Grant
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<PAGE>
(other than to Centaur pursuant to Centaur License Agreement).
12.5 REPRESENTATIONS AND WARRANTIES OF UKRF. UKRF hereby makes the
--------------------------------------
following representations and warranties to Astra, which representations and
warranties, together with all other representations and warranties of UKRF in
this License Agreement, are true and correct on the date hereof:
(a) UKRF is a nonprofit corporation duly organized, validly existing
and in good standing under the laws of the State of Kentucky and
has all requisite corporate power and authority to enter into
this License Agreement and perform its obligations hereunder.
(b) Neither the execution or delivery of this License Agreement, nor
the consummation of the transactions contemplated herein, will
(i) violate or conflict with any provision of the Articles of
Incorporation or By-laws of UKRF, as each may have been amended,
(ii) require the consent of any party to any agreement or
commitment to which UKRF is a party or which affects the Licensed
Technology, (iii) result in the creation or imposition of any
lien, claim or encumbrance upon the Licensed Technology, or (iv)
require any consent, approval, authorization, order, filing,
registration or qualification of or with any court or
governmental authority or arbitrator to which UKRF is subject or
by which the Licensed Technology may be affected.
(c) All actions to authorize the execution and delivery of this
License Agreement and the consummation of the transactions
contemplated herein have been duly taken, and this License
Agreement constitutes the valid and binding obligation of UKRF
enforceable in accordance with its terms.
(d) There are no claims (relating to patent infringement or any other
matters relating to the Licensed Technology), actions, suits,
proceedings, arbitrations or investigations pending or, to the
best of UKRF's knowledge, threatened, against OMRF which if
adversely determined would adversely affect the Licensed
Technology (or the patentability thereof) or UKRF's ability to
enter into or carry out this License Agreement.
(e) UKRF represents and warrants to the best of its knowledge and
belief that UKRF (together with OMRF) is the sole owner of the
Licensed Technology and such is free of any lien, encumbrance,
restriction, and other legal or equitable claim, apart from the
possible non-exclusive
-22-
<PAGE>
rights held by the United States Government as a result of
research sponsorship.
(f) UKRF further represents and warrants that UKRF has not granted
(and will not grant during the term of this License Agreement)
such rights or licenses to the Licensed Technology as set forth
in the Licensor Grant (other than to Centaur pursuant to Centaur
License Agreement).
13. MISCELLANEOUS AND GENERAL
-------------------------
13.1 EXPORT CONTROLS. Astra acknowledges that Licensors are subject to
---------------
United States laws and regulations controlling the export of technical data,
computer software, laboratory prototypes and other commodities and that
Foundation's obligations hereunder are contingent on compliance with all
applicable United State export and other laws and regulations. The transfer of
certain technical data and commodities may require a license from the cognizant
agency of the United States Government and/or written assurances by Astra that
Astra shall not export data or commodities to certain foreign countries without
prior approval of such agency. Licensors neither represent that a license shall
not be required nor that, if required, it shall be issued.
13.2 LEGAL COMPLIANCE. Astra agrees that it will comply with all
----------------
applicable laws and regulations in relation to its manufacture, processing,
producing, use, selling or distributing of Licensed Products and that it will
not at any time take any action which would cause Licensors or Astra to be in
violation of any of such applicable laws and regulations.
13.3 REQUIRED CONSENTS. Astra shall obtain any and all licensees,
-----------------
permits, approvals or authorizations (the "REQUIRED CONSENTS") required by any
governmental entity or agency having jurisdiction over the transactions
contemplated by this License Agreement. Licensors shall cooperate with, and
provide reasonable assistance to, Astra in obtaining the Required Consents;
provided, however, that Astra shall reimburse Licensors for all of Licensor's
- -------- -------
out-of-pocket expenses incurred in providing such assistance.
13.4 INDEPENDENT CONTRACTOR. Astra's relationship to Licensors hereunder
----------------------
shall be that of a license only. Astra shall not be the agent of Licensors and
shall have no authority to act for or on behalf of Licensors in any matter.
Persons retained by Astra as employees or agents shall not by reason thereof be
deemed to be employees or agents of Licensors.
13.5 PATENT MARKING. Astra agrees to mark, to the extent practical, 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, to the extent practical, in such a manner as to conform with
the patent laws and practice of the country of manufacture or sale.
-23-
<PAGE>
13.6 USE OF NAMES. No name of any Party to this License Agreement, or of
------------
any officer, trustee, director or employee of any Party, may be used by any
Party in any manner for announcing, advertising, promoting or marketing Licensed
Products or Licensed Processes unless the written permission of such Party, or
the individual, as the case may be, is obtained in advance.
13.7 INTERPRETATION. The Parties are equally responsible for the
--------------
preparation of this License Agreement, and in any judicial proceeding the terms
hereof shall not be more strictly construed against one Party than the other.
13.8 NOTICES. All notices, statements and reports required or
-------
contemplated herein by one Party to the other shall be in writing and shall be
deemed to have been given upon delivery in person or upon the expiration of five
(5) days after the deposit in a lawful mail depository in the country of
residence of the Party giving the notice, registered or certified airmail
postage prepaid, and addressed as follows:
If to Licensors:
---------------
OMRF:
Attention: President
Oklahoma Medical Research Foundation
825 N. E. 13th Street
Oklahoma City, OK 73104
Facsimile: (405) 271-3980
With a copy to:
John S. Pratt, Esquire
Kilpatrick & Cody
1100 Peachtree Street
Atlanta, GA 30309-4530
Facsimile: (404) 815-6555
UKRF:
Director
Office of Intellectual Property
University of Kentucky Research Foundation
120 Graham Avenue
-24-
<PAGE>
Lexington, KY 40506-0051
Facsimile:
With a copy to:
Office of Legal Counsel
University of Kentucky
2 Administration Building
Lexington, KY 40506-0032
Facsimile:
If to Astra:
-----------
Astra AB
S-151 85 Sodertalje
Sweden
Attention: President and Chief Executive
Officer
Facsimile: 011 46 85 53 29 000
Any Party hereto may change the address to which notices to such Party are
to be sent by giving notice to the other Parties at the addresses and in the
manner provided above. Any notice herein required or permitted to be given may
be given, in addition to the manner set forth above, by telex, facsimile or
cable, provided that the Party giving such notice obtains acknowledgement by
telex, facsimile or cable to be notified. Notice made in this manner shall be
deemed to have been given when such acknowledgement has been transmitted.
13.9 ASSIGNMENTS AND INUREMENT. Except as otherwise provided in this
-------------------------
License Agreement, Astra shall not grant, transfer, convey or otherwise assign
any of its rights or delegate any of its obligations under this License
Agreement (except in the course of a merger, consolidation or acquisition of all
or substantially all of Astra's business) without the prior written consent of
Licensors, which consent shall not be unreasonably withheld or delayed, and any
attempt by Astra to do so shall be of no effect; however, this License Agreement
shall be assignable by each of Licensors, provided that any such assignee has
agreed in writing with Astra to be bound by the terms and provisions of this
License Agreement. This License Agreement shall be binding upon and inure to
the benefit of the successors and permitted assigns of the Parties hereto.
13.10 GOVERNING LAW. This License Agreement shall be construed, governed,
-------------
interpreted and applied in accordance with the laws of the State of New York,
except that questions affecting the construction and effect of any patent shall
be determined by the law of
-25-
<PAGE>
the country in which the patent was granted.
13.11 ENTIRE AGREEMENT. This License Agreement constitutes the entire
----------------
agreement between Licensors and Astra with respect to the subject matter hereof
and shall not be modified, amended or terminated except as herein provided or
except by another agreement in writing executed by the Parties hereto.
13.12 HEADINGS. The section and paragraph headings are for convenience
--------
only and are not part of this License Agreement.
13.13 SEVERABILITY. All rights and restrictions contained herein may be
------------
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and are intended to be limited to the extent
necessary so that they will not render this License Agreement illegal, invalid
or unenforceable. If any provision or portion of any provision of this License
Agreement not essential to the commercial purpose of this License Agreement
shall be held to be illegal, invalid or unenforceable by a court of competent
jurisdiction, it is the intention of the Parties that the remaining provisions
or portions thereof shall constitute their agreement with respect to the subject
matter hereof, and all such remaining provisions or portions thereof shall
remain in full force and effect. To the extent legally permissible, any
illegal, invalid or unenforceable provision of this License Agreement shall be
replaced by a valid provision which will implement the commercial purpose of the
illegal, invalid or unenforceable provision. In the event that any provision
essential to the commercial purpose of this License Agreement is held to be
illegal, invalid or unenforceable and cannot be replaced by a valid provision
which will implement the commercial purpose of this License Agreement, this
License Agreement and the rights granted herein shall terminate.
13.14 COUNTERPARTS. This License Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this License Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
-26-
<PAGE>
Licensors:
---------
OKLAHOMA MEDICAL RESEARCH FOUNDATION
By:_________________________________
Dr. William G. Thurman, President
hereunto duly authorized
UNIVERSITY OF KENTUCKY RESEARCH
FOUNDATION
By:__________________________________
hereunto duly authorized
ASTRA:
-----
ASTRA AB
(publ)
By:__________________________________
Hakan Mogren, President and
Chief Executive Officer
hereunto duly authorized
-27-
<PAGE>
EXHIBIT A
---------
TO
LICENSE AGREEMENT
MADE AND ENTERED INTO AS OF JUNE ___, 1995
BY AND AMONG
OKLAHOMA MEDICAL RESEARCH FOUNDATION,
AND
THE UNIVERSITY OF KENTUCKY RESEARCH FOUNDATION
AND
ASTRA AB
CENTAUR LICENSE AGREEMENT
-------------------------
<PAGE>
EXHIBIT B
---------
TO
LICENSE AGREEMENT
MADE AND ENTERED INTO AS OF JUNE ___, 1995
BY AND AMONG
OKLAHOMA MEDICAL RESEARCH FOUNDATION,
AND
THE UNIVERSITY OF KENTUCKY RESEARCH FOUNDATION
AND
ASTRA AB
RESEARCH AGREEMENTS
-------------------
<PAGE>
EXHIBIT C
---------
TO
LICENSE AGREEMENT
MADE AND ENTERED INTO AS OF JUNE ___, 1995
BY AND AMONG
OKLAHOMA MEDICAL RESEARCH FOUNDATION,
AND
THE UNIVERSITY OF KENTUCKY RESEARCH FOUNDATION
AND
ASTRA AB
ASTRA INSURANCE CERTIFICATE
---------------------------
<PAGE>
APPENDIX 4
----------
TO
DEVELOPMENT, LICENSE AND MARKETING AGREEMENT
DATED JUNE 26, 1995
BETWEEN
CENTAUR PHARMACEUTICALS, INC.
AND
ASTRA AB
ASTRA STRATEGIC RESEARCH AREAS
------------------------------
[REFERENCE TO APPENDIX 4 REPLACED IN ITS ENTIRETY BY AMENDMENT DATED OCTOBER 7,
1997 -- SEE EXHIBIT 10.15 TO THE REGISTRATION STATEMENT]
<PAGE>
APPENDIX 5
----------
TO
DEVELOPMENT, LICENSE AND MARKETING AGREEMENT
DATED JUNE 26, 1995
BETWEEN
CENTAUR PHARMACEUTICALS, INC.
AND
ASTRA AB
FIRST AMENDMENT TO CENTAUR LICENSES
-----------------------------------
[SEE EXHIBIT 10.12 TO THE REGISTRATION STATEMENT]
<PAGE>
EXHIBIT 10.16
31, October 1996
DEVELOPMENT, PATENT AND TRADEMARK/KNOW-HOW LICENSING AND SUPPLY
AGREEMENT - CPI-1189
between
H. Lundbeck A/S
9 Ottiliavej
DK-2500 Copenhagen-Valby
Denmark
and
Centaur Pharmaceuticals, Inc.
484 Oakmead Parkway
Sunnyvale, CA 94086
United States of America
- --------------------------------------------------------------------------------
[*] - Confidential treatment is being sought with respect to this portion of
this agreement. This portion has been omitted from this filing and has
been filed spearately with the Securities and Exchange Commission.
1
<PAGE>
31, October 1996
TABLE OF CONTENTS
PREAMBLE
1. Definitions
2. Grant of License Rights; Mechanism for Expansion of Territory; Rights
Relating To a "Back-Up Compound" and to "Additional Compounds"
3. Competition Clause
4. Payments and Creditability of Same; Maximum Lundbeck Payments During
Specified Years
5. Royalties
6. Steering Committee; Joint Project Team; Development Plan and Related
Activities
7. Manufacturing and Supply
8. Marketing
9. Reporting of Adverse Reactions
10. Confidentiality
11. Patent Prosecution; Patent and Trademark Infringement; Know-How;
Proprietary Rights
12. Liability and Indemnification
13. Term and Termination
14. Force Majeure
15. Warranties and Representations
16. Resolution of Disputes
17. Miscellaneous Provisions
18. Know-How and Information
2
<PAGE>
31, October 1996
ANNEXES:
ANNEX A: Patents and Patent Applications
ANNEX B: Development Plan
ANNEX C: Manufacturing Agreement (including tentative quality specifications)
3
<PAGE>
31, October 1996
LICENSE AGREEMENT
between
H. Lundbeck A/S
9 Ottiliavej
DK-2500 Copenhagen-Valby
Denmark
(hereinafter "LUNDBECK")
and
Centaur Pharmaceuticals, Inc.
484 Oakmead Parkway
Sunnyvale, CA 94086
United States of America
(hereinafter "CENTAUR")
WHEREAS, Centaur has invented and developed the chemical compound known under
the name "CPI-1189" and is the owner of certain patent rights in various
European and other countries covering CPI-1189;
WHEREAS, Centaur has developed certain know-how concerning the formulation and
use of pharmaceutical forms of CPI-1189 for Parkinson's disease;
WHEREAS, Lundbeck wishes to obtain from Centaur for the Territory/1/ certain
rights relating to CPI-1189 for Parkinson's disease;
WHEREAS, Centaur and Lundbeck wish jointly to undertake the further development
of CPI-1189 for Parkinson's disease so that data and/or documentation developed
can be used by Lundbeck for governmental approval, marketing and selling in the
Territory, and Centaur can use such data and/or documentation outside the
Territory;
WHEREAS, Centaur is willing to manufacture and supply and Lundbeck may wish to
act as "back-up" supplier of CPI-1189 for the Territory;
NOW, THEREFORE, intending to be legally bound and in consideration of the mutual
promises hereinafter set forth, the parties hereto hereby agree as follows:
______________________________
/1/ Initial capitalized terms are defined below in this Agreement.
4
<PAGE>
31, October 1996
1. DEFINITIONS
For the purposes of this Agreement the following definitions shall apply:
1.1 "Additional Compounds" shall mean any compound, the rights to use for
Primary Indication are owned or controlled by Centaur and which Centaur
intends to develop for the Primary Indication. Additional Compounds shall
include such compounds and all pharmaceutically acceptable salts, esters,
prodrugs, metabolites, precursors and other such forms thereof for use in
treating the Primary Indication.
1.2 "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 Agreement to the extent
of at least fifty percent (50%) of the stock or shares entitled to vote for
the election of directors or at least 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 vote
on or 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 Agreement. "Centaur" and "Lundbeck"
shall mean the entities identified in the preamble, together with the
respective Affiliates of each.
1.3 "Approval for Sale" shall mean that Lundbeck has obtained all necessary
authorizations including the conclusion of relevant price and reimbursement
negotiations necessary to obtain the first commercial sale of Licensed
Products for treatment of Primary Indication in any part of the Territory
to an Independent Third Party for treatment of human patients.
1.4 "Back-Up Compound" shall mean as defined in Section 2.4.
1.5 "Bulk Product" shall mean finished goods packaged in bulk ready for final
packaging and labelling as Licensed Product in accordance with Annex C or
such other material as might be agreed to by the parties.
1.6 "Bulk Substance" shall mean the pure active substance of CPI-1189 delivered
in suitable containers as agreed by the parties in accordance with Annex C
or such other material as might be agreed to by the parties.
1.7 "Centaur Technology" shall mean Licensed Patents and Centaur's Know-How.
1.8 "Combination Product" shall mean any finished pharmaceutical product made
for human therapy containing CPI-1189 as an active ingredient in
combination with one or more other active ingredients.
1.9 "Confidential Information" shall mean any and all information of or about a
party including all information relating to any technology, product,
process or intellectual property of such
5
<PAGE>
31, October 1996
party only as pertinent to Licensed Product (including, but not limited to,
owned or licensed intellectual property rights, data, Know-How, samples,
technical and non-technical material, and specifications) as well as any
business plan, financial information, or other confidential commercial
information of or about such other party. Notwithstanding the foregoing,
specific information shall not be considered "Confidential Information"
with respect to such party to the extent that the other party possessing
such information can demonstrate by written record or other suitable
physical evidence that:
(a) such specific information was lawfully in such other party's
possession or control prior to the time such information was disclosed
to such other party by the party to whom the information relates;
(b) such specific information was developed by such other party
independently of the Confidential Information of the other party;
(c) such specific information was lawfully obtained by such other party
from a third party under no obligation of confidentiality to the party
to whom such information relates; or
(d) such specific information was at the time it was disclosed or obtained
by such other party, or thereafter became, publicly known otherwise
than through a breach by such other party of such other party's
obligations to the party to whom such information relates, provided,
however, that disclosure of such information to a regulatory authority
or governmental body, unless it becomes generally disseminated, will
not be considered publicly known.
1.10 "CPI-1189" shall mean the chemical compound developed by Centaur known as
CPI-1189 as well as all pharmaceutically acceptable salts, esters,
prodrugs, precursors, metabolites and other such forms thereof. (For the
full and exhaustive description of CPI-1189 reference is made to the letter
between the parties dated contemporaneously with the Date of Execution.)
1.11 "Date of Execution" shall mean the date of signature to this Agreement by
the party last to sign.
1.12 "DKK" shall mean the official currency of Denmark, the Danish Kroner.
1.13 "European Union" shall (i) if used as reference to a geographical area mean
the following countries as they presently exist regardless of whether they
change form, including without limitation their respective territorial
possessions at the Date of Execution: Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,
Portugal, Spain, Sweden and the United Kingdom; and (ii) if used as a
reference to a body or agency having regulatory authority, mean the
relevant centralized European Union authority as in existence from time to
time.
1.14 "FDA" shall mean the Food and Drug Administration of the United States of
America.
6
<PAGE>
31, October 1996
1.15 "Force Majeure" shall mean as defined in Section 14.1.
1.16 "IND" shall mean an investigational new drug application filed with the
FDA.
1.17 "Independent Third Party" with respect to a party hereto shall mean an
organization or a person that is neither the party nor an Affiliate of a
party.
1.18 "Know-How" shall mean with respect to either party, collectively, all
proprietary information, Confidential Information, methods, products,
ideas, processes, technologies, inventions, data, information and all
intellectual property rights connected therewith, whether or not patentable
and whether oral, written or stored in any computer format, owned,
controlled or licensed to either party, now or during the term of this
Agreement, to the extent related to the research, development, manufacture,
use or sale of CPI-1189, Bulk Product, Bulk Substance and/or Licensed
Product for the Primary Indication in the Territory, explicitly including
without limitation Synthesis Data, and in the case where licensed to a
party, where such party has, or may in the future have, the right to
transfer, disclose and/or grant licenses to the other without violating
contractual agreements with such third party existing prior or subsequent
to the Effective Date.
1.19 "Licensed Patents" shall mean any and all present or future patents and
patent applications in the Territory or covering any part of the Territory
including a Valid Claim covering CPI-1189 and/or its use as a medicinal
product for the Primary Indication in whole or in part which are or become
owned by Centaur, which Centaur has, now or in the future, the right to
grant licenses to Lundbeck, including the issued patents and patent
applications listed in Annex A, forming an integral part of this agreement,
as well as any and all extensions, divisions, continuations, continuations-
in-part, reexaminations, and reissues thereof in the Territory.
1.20 "Licensed Products" shall mean Products and/or Combination Products.
1.21 "Marketing Quarter" shall mean the three (3) month period commencing on the
first day of January, April, July and October of each calendar year.
1.22 "Marketing Year" shall mean calendar year periods except for the first
Marketing Year. The first Marketing Year shall commence after Registration
in the first country in the Territory and on the first day of the month in
which Lundbeck makes its first commercial sale of Licensed Product (that
is, invoices its first sale of a Licensed Product to an Independent Third
Party) in the Territory until December 31st of that year. Subsequent
Marketing Years shall be the applicable calendar year. The date on which
the first Marketing Year so commences shall be immediately confirmed by
Lundbeck to Centaur in writing.
1.23 "NDA" shall mean a new drug application filed with the FDA.
1.24 "Net Sales" shall mean gross sales of Licensed Products invoiced by
Lundbeck and/or its Affiliates and/or its sublicensees to Independent Third
Parties in the Territory less (1) the total of ordinary and customary trade
discounts earned and actually taken or granted, (2)
7
<PAGE>
31, October 1996
any statutory or contractual rebates paid to any governmental or any other
public authority, agency or entity (3) cash and quantity discounts allowed,
(4) allowances and adjustments actually credited or paid to customers for
spoiled, damaged, outdated and/or returned Licensed Product, (5) freight,
insurance, transportation costs and handling charges included by the seller
in its invoices to Independent Third Parties, (6) excise, sales, and value
added taxes included by the seller in its invoices to Independent Third
Parties, and (7) customs duties and other compulsory payments made by the
seller to national, provincial and local government authorities.
Where (i) Licensed Products are sold as one of a number of items without a
separate price; or (ii) the consideration for the Licensed Product shall
include any non-cash element; or (iii) the Licensed Product shall be
transferred in any manner other than an invoiced sale except for Licensed
Products transferred as samples or any other similar transfer for
promotional purposes usually made in the relevant part of the Territory,
the Net Sales applicable to any such transaction shall be deemed to be
Lundbeck's average Net Sales for the applicable quantity of Licensed
Products at that time in the country in which the transaction occurred. If
there are no independent Net Sales of Licensed Products in the country at
that time, then Lundbeck and Centaur shall mutually agree on a surrogate
measurement.
With respect to a Licensed Product that is a Combination Product, "Net
Sales" shall mean the "Adjusted Gross Sales" (as defined below) of such
Combination Product in the Territory less the allowances and adjustments
listed in items 1 through 7 in the first paragraph of this Section 1.24.
'"Adjusted Gross Sales" of Combination Products shall mean the gross sales
multiplied by a fraction, A/(A + B), where "A" shall be the average per
unit price of Licensed Product as sold alone in that country in the
Territory and "B" shall be the average per unit selling price in the
Territory of each pharmaceutically active ingredient in the Combination
Product other than Licensed Product. If B is available in the Territory,
the least expensive presentation shall be used as reference for the
calculation. The fraction, A/(A+B), shall never be less than one-half
(1/2). If sufficient information is not available to make this
calculation, then Lundbeck and Centaur shall mutually agree on a surrogate
measurement
1.25 "Plan" shall mean the development plan described in Sections 6.3 and 6.4
that is attached hereto, and made a part of this Agreement, as Annex B.
1.26 "Primary Indication" shall mean the treatment of Parkinson's Disease (as
defined in Merck Manual of Geriatrics, 1990, p. 975) and sequelae hereof in
humans .
1.27 "Product" shall mean any finished pharmaceutical drug for human therapy
containing CPI-1189 as the sole active ingredient.
1.28 "Registration" shall mean all written governmental approvals excluding any
price and/or reimbursement approval required for the legal marketing of
Licensed Product in the Territory (e.g., approval by the United Kingdom
Medicines Control Agency or by other equivalent government or supranational
agencies in a the Territory that regulates, licenses or otherwise approves
the import, manufacture, promotion and/or sale of pharmaceutical
8
<PAGE>
31, October 1996
products in that country).
1.29 "Standard Manufacturing Price" or "SMP" shall mean as defined in Section
7.6 below.
1.30 "Steering Committee" shall mean a committee as described in Section 6.1
below.
1.31 "Substantial Competition" shall mean that a competitor to Lundbeck or a
Lundbeck Affiliate or a Lundbeck sub-licensee in a given country,
introduces and markets an identical product to or one which produces the
same clinical effects using the same molecule as does a Licensed Product
and such competitor obtains more than twenty percent (20%) of the total
CPI-1189 market share including the total Combination Product market share,
as applicable, (calculated by Marketing Year) in that country based upon
sales revenues denominated in the currency of that country.
1.32 "Synthesis Data" shall mean all present and future data and/or
documentation related to the manufacture of CPI-1189 and/or Bulk Product
and/or Bulk Substance and/or Licensed Product.
1.33 "Territory" shall mean the present geographic locations of all and any of
the following countries as they presently exist regardless of whether they
change form, including without limitation their respective territorial
possessions at the Date of Execution: Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the United
Kingdom, Albania, Armenia, Azerbajdzjan, Belaruss, Bosnia-Hercegovinia,
Bulgaria, Croatia, the Czech Republic, Estonia, Georgia, Kazakhastan,
Kirgizistan, Latvia, Lithuania, Macedonia, Moldovia, Poland, Rumania,
Russia, Serbia, Slovakia, Slovenia, Tadzhikistand, Turkmenistan, Ukraine,
Uzbekistand, Yugoslavia and South Africa. "Territory" may be expanded in
accordance with the procedures set out in paragraph 2.3 below.
1.34 "Trademark(s)" shall mean any and all trademarks for use in conjunction
with Licensed Products in any part of the Territory excluding any trademark
comprising the name of either party generally used by such party to
identify itself (a "House-Mark").
1.35 "USD" shall mean the official currency of the United States of America, the
U.S. dollar.
1.36 "US Registration" shall mean all governmental approvals required for the
legal marketing of Licensed Product in the United States of America.
1.37 "Valid Claim" shall mean any claim of an issued and unexpired patent which
has not been held unenforceable, unpatentable, or invalid by a court or
governmental agency of competent jurisdiction, unappealed or unappealable
within the time allowed for appeal, nor has been admitted by the holder of
the patent to be unenforceable, unpatentable, or invalid through reissue,
disclaimer, or otherwise.
1.38 When any term defined in this Agreement in singular or plural is used in
this Agreement in plural or singular, respectively, this shall be deemed a
reference to the defined term unless
9
<PAGE>
31, October 1996
the context explicitly so indicates.
2. GRANT OF LICENSE RIGHTS; MECHANISM FOR EXPANSION OF TERRITORY; RIGHTS
RELATING TO A "BACK-UP COMPOUND" AND TO "ADDITIONAL COMPOUNDS".
2.1 License Grant to Lundbeck
-------------------------
(a) Patent and Know-How License. Subject to the terms and conditions of
---------------------------
this Agreement, Centaur hereby grants to Lundbeck and Lundbeck hereby
accepts:
(i) Exclusive License. The sole and exclusive, royalty-bearing
-----------------
license (the "Exclusive License"), including the right to grant
sublicenses as provided herein, under the Centaur Technology to
develop, import, export, package, use, sell, market, promote,
distribute and have sold Licensed Products for the Primary
Indication in the Territory in accordance with this Agreement. A
sublicense includes but is not limited to co-marketing and co-
promotion arrangements, provided that Centaur is informed of who
the co-marketing or co-promotion partners are and has no
reasonable objection to them.
(ii) Non-Exclusive License. A non-exclusive license (the "Non-
---------------------
Exclusive License"), including the right to grant sublicenses
under the Centaur Technology to synthesize, formulate and
manufacture Bulk Product and Bulk Substance for Licensed Product
for non-clinical, clinical or commercial use and sale for the
Primary Indication in the Territory as provided in 7.2 and as a
"Back-Up Supplier" as provided in Sections 7.1, 7.18 (b), 7.19,
7.20 and 7.21 below or in accordance with Section 13.9 below.
(b) Trademark License. Lundbeck and Centaur shall decide as set forth in
-----------------
Section 11.8 on the Trademark(s) under which Licensed Product will be
marketed, promoted, offered for sale and sold in the Territory, which
Trademark(s), except for those owned and in use by either party to
identify itself or its products, shall be owned by Centaur. Subject to
the terms and conditions of this Agreement, Centaur hereby grants and
Lundbeck hereby accepts the sole and exclusive, royalty-bearing
license ("Trademark License"), with right to sublicense, to use the
Trademark(s) on Licensed Product in the Territory and in accordance
with Section 5.11. Centaur's obligations regarding maintenance and
protection of the Trademark(s) are set forth in Section 11 below.
(c) The "Lundbeck License". The Exclusive License, Non-Exclusive License
----------------------
and Trademark License may be herein collectively referred to as the
"Lundbeck License".
2.2 License Grant to Centaur. Subject to the terms and conditions of this
-------------------------
Agreement, Lundbeck hereby grants to Centaur, and Centaur hereby accepts, a
royalty-free license for the whole world outside the Territory, with the
power to grant sublicenses under its license,
10
<PAGE>
31, October 1996
to use any and all Lundbeck owned or controlled Know-how, Confidential
Information, Synthesis Data and patents for the manufacture, use and sale
of CPI-1189 and/or Licensed Products as set forth herein. A sublicense
includes but is not limited to co-marketing and co-promotion arrangements.
2.3 Mechanism for Expansion of Territory. The scope and definition in Section
------------------------------------
1.33 of the "Territory" may be expanded in the following manner. Regarding
Australia, New Zealand, Egypt, Saudi Arabia, Yemen, Jordan, Lebanon,
Israel, Turkey, Oman, United Arab Emirates, Kuwait Pakistan and the Gulf
States, Centaur will give Lundbeck a first right of negotiation, with a
preference given to Lundbeck over any other party offering substantially
similar terms and conditions. Further, if these areas are not part of
another multi-country transaction or not being serviced by Centaur itself
before the first NDA filing for a Licensed Product, then these countries
will be included in the Territory on the same terms and conditions as
contained in this Agreement by adding the sales of Licensed Products in the
so included countries to the sales in the Territory when calculating the
royalties under Section 5, and countries so included shall in all and every
respect be included in the definition of "Territory" in Section 1.33.
2.4 "Back-Up" Compound and Option for Additional Compounds.
-----------------------------------------------------
(a) "Back-Up" Compound. Should the parties mutually determine in good
------------------
faith that CPI-1189 will be unsuccessful in clinical development for
the Primary Indication, such determination to be made within sixty
(60) days after notice to this effect made by either of the parties,
then Centaur will substitute one Back-Up Compound, which shall be the
most promising Additional Compound for the Primary Indication as
mutually agreed by the parties, at no additional cost to Lundbeck.
Upon such substitution, all rights to CPI-1189 will revert to Centaur
and the Back-Up Compound will be considered licensed hereunder as if
it was CPI-1189 and that every reference to CPI-1189 will be a
reference to the Back-Up Compound. For the purposes of this Section
2.4. (a) "unsuccessful" shall mean that CPI-1189 is not
neuroprotective meaning it is not halting or significantly delaying
disease progress in Primary Indication and/or that CPI-1189 has
unacceptable side effects or for some other reasons determined by the
parties.
(b) Option to License Additional Compounds. Should Centaur invent and
--------------------------------------
develop one or more Additional Compounds, for the longer of (i) the
four (4) year period commencing on the Date of Execution or (ii) the
date of submission of the first application for Registration in the
Territory for CPI-1189, Lundbeck shall have the option to license each
such Additional Compound, it being understood that any Additional
Compound shall be deemed invented and developed in the said period if
Centaur initiates plans for an IND for the Additional Compound in such
period. Each time Centaur initiates plans for an IND for an
Additional Compound, Centaur shall notify Lundbeck in writing of
information concerning chemical, toxicological, pharmacological and
manufacturing details of such Additional Compound. Lundbeck shall,
within ninety (90) days of written notification from Centaur, either
(i) waive its right to exercise the option (with failure to respond in
writing being deemed a waiver), or (ii) send written notification to
exercise its option. Should
11
<PAGE>
31, October 1996
Lundbeck exercise its option to license an Additional Compound, then
such Additional Compound will automatically become licensed to
Lundbeck (as if a new agreement for the Additional Compound had been
signed) and unless otherwise agreed by the parties such license shall
be under the same terms and conditions as set forth herein, including
those for Down-Payments as described in Section 4 and royalties as
described in Section 5, provided, however, that Lundbeck will not be
required to pay an additional Annual Fee but rather the period for
payment of the Annual Fee referred to in Section 4.3 will be extended
until the date of the first application for Registration in the
Territory of such Additional Compound, and that the duration of any
patent covering an Additional Compound shall not extend the payment of
Basic Royalty for Licensed Product. Should Lundbeck not exercise its
option, then Centaur shall be free to do what it wishes with that
Additional Compound, including to enter into negotiations and/or an
agreement and/or collaboration with another party always provided that
Lundbeck and Centaur shall comply with the obligations set out in
Section 3.2 hereof.
(c) Option to License Extends to Each Additional Compound. The exercising
-----------------------------------------------------
by Lundbeck of its option under subparagraph (b) to license one
Additional Compound shall not prevent Lundbeck from exercising its
option to license any other Additional Compound.
(d) Third Party Royalties. If Centaur is required to pay an Independant
---------------------
Third Party royalty on an Additional Compound then Lundbeck shall
reimburse Centaur 50 % such royalty provided that the amount of such
royalty does not exceed 50 % of the royalties to be paid to Centaur
directly.
2.5 Use outside Primary Indication in the Territory. In the Territory, Centaur
-----------------------------------------------
shall not itself, through an Affiliate or through an Independent Third
Party apply for registration, market, sell or in any other way
commercialize in any form or formulation CPI-1189 or an Additional
Compound, licensed to Lundbeck under section 2.4, for any indication,
therapy or use whatsoever inside or outside the Primary Indication without
the prior written approval from Lundbeck, made at Lundbeck's sole
discretion.
3. COMPETITION CLAUSE
3.1 No rights are granted to Lundbeck by this Agreement except for the
Territory. Lundbeck shall refer all orders received for delivery of
Licensed Product outside the Territory to Centaur. Centaur shall refer all
orders received for delivery of Licensed Product within the Territory to
Lundbeck.
3.2 Lundbeck or any of its sublicensees of Licensed Products shall, for the
term of this Agreement, refrain from marketing any other product in the
Territory which is competitive with Licensed Product. A competitive
product is a pharmaceutical for human therapy (i) with similar
pharmacological profile and (ii) with a similar labelled indication and
(iii) with a similar mechanism(s) of action for Parkinson's disease, it
being understood that (i), (ii) and (iii) are cumulative. Likewise,
Centaur, shall refrain from marketing on its own, through an
12
<PAGE>
31, October 1996
Affiliate or through Independent Third Party license partners any
competitive product to Licensed Product in the Territory or any Additional
Compound for one year prior to and two years following the date of
Registration of Licensed Product in the Territory.
4. PAYMENTS AND CREDITABILITY OF SAME; MAXIMUM LUNDBECK PAYMENTS DURING
SPECIFIED YEARS
4.1 Down-Payments. Lundbeck will pay to Centaur the following amounts (which
-------------
shall not be paid more than once in the event that a Back-Up Compound is
substituted for CPI-1189) in accordance with this schedule.
(a) Upon execution of this Agreement, the sum of [*]; and
(b) On the later of (i) within seven (7) days of the date of the Phase I
Lundbeck Notice after the completion of Phase I studies/2/ (conducted
under the Plan) in the United States or in any country in the
Territory, or (ii) January 1, 1998, the sum of [*];and
(c) Within seven (7) days of the date of the Phase II Lundbeck Notice
after the completion of Phase II studies/3/ (conducted under the Plan)
in the United States or
_________________________
/2/ At the time that Centaur reasonably determines reasonably uncontested by
Lundbeck that Phase I studies as set forth in the Plan have all been
satisfactorily completed, Centaur will send notice of such completion to
Lundbeck. Upon receipt of that notice, Lundbeck will have 15 days to notify
Centaur in writing whether it intends to continue under the Agreement or
terminate the Agreement (the "Phase I Lundbeck Notice"). Failure of Lundbeck to
give the Phase I Lundbeck Notice will be deemed a decision by Lundbeck to
continue with the Agreement. If Lundbeck determines that it will continue under
the Agreement, it shall make the down-payment specified in 4.1(b). In the event
that Lundbeck decides to terminate the Agreement and such decision to terminate
is after 1997 (termination prior to 1998 is governed by Section 4.4(a)), then
Lundbeck may do so on ninety (90) days prior written notice during which time it
will be obligated to continue making all payments required by this Agreement
except the down-payment described in Sections 4.1 (a) or 4.1(b).
/3/ At the time that Centaur reasonably determines reasonably uncontested by
Lundbeck that Phase II studies as set forth in the Plan have all been
satisfactorily completed, Centaur will send notice of such completion to
Lundbeck. Upon receipt of that notice, Lundbeck will have 15 days to notify
Centaur in writing whether it intends to continue under the Agreement or
terminate the Agreement (the "Phase II Lundbeck Notice"). Failure of Lundbeck to
give the Phase II Lundbeck Notice will be deemed a decision by Lundbeck to
continue with the Agreement. If Lundbeck determines that it will continue under
the Agreement, it shall make the down-payment specified in 4.1(c). In the event
that Lundbeck decides to terminate the Agreement and such decision to terminate
is after 1997 (termination prior to 1998 is governed by Section 4.4(a)), then
Lundbeck may do so on ninety (90) days prior written notice during which time it
will be obligated to continue making all payments required by this Agreement
except the down-payment described in Section 4.1(c).
13
<PAGE>
31, October 1996
in any country in the Territory, the sum of [*]; and
(d) Within seven (7) days of the date of submission of the first
application for Registration in the Territory, the sum of [*]; and
(e) Within seven (7) days of Approval for Sale of a Licensed Product in
the first country in the European Union, the sum of [*].
4.2 Creditability. [*]
-------------
4.3 Annual Fee. In addition to the payments to be made under Section 4.1
----------
above, Lundbeck shall pay an annual fee (the "Annual Fee") of [*] during
the below initial period of this Agreement to assist financially in
Centaur's development of CPI-1189 and Additional Compounds (which
development work is limited to in vitro and/or in vivo screening to
identify Additional Compounds, development of surrogate markers to support
clinical evaluations and work to determine the mechanism of action of CPI-
1189; and the Annual Fee shall be Lundbeck's only financial participation
in all such screening, development and work to so determine the mechanism
of action of CPI-1189 and all other expenses related hereto shall be borne
solely by Centaur and shall not be covered by Section 6.5). The Annual Fee
shall be paid quarterly in arrears in [*] amounts on 1 January, 1 April, 1
July and 1 October. The first such payment which shall cover the partial
quarter from the Date of Execution until December 31, 1996 shall be paid on
1 January 1997 in an amount equal to [*] multiplied by the number of days
from Date of Execution to year end 1996 and divided by the total number of
days in the fourth calendar quarter of 1996, and any final payment shall be
prorated similarly. Such Annual Fee shall be paid until the later of (i)
the date of the first application for Registration in the Territory for the
Licensed Product or (ii) the end of the four (4) year period commencing the
Date of Execution.
4.4 Maximum Lundbeck Payments During Specified Years.
------------------------------------------------
(a) From the Date of Execution through the end of calendar year 1997, the
aggregate of the signing down-payment (see Section 4.1 (a)), the
Annual Fee, Lundbeck's cost of pre-clinical, clinical, non-clinical
and regulatory activities and manufacturing costs paid or, in
accordance with Section 6.5, internally performed by Lundbeck will not
exceed [*]. Further, if Lundbeck determines to cancel this
Agreement at any time during this period, Lundbeck will pay to
Centaur, the balance between the amount it has already so paid and/or
performed and [*]
14
<PAGE>
31, October 1996
[*], should any balance remain. Similarly, should the costs of what
the parties agree to (which is expected to be less than [*] for
Lundbeck) exceed this [*], Centaur will be responsible for costs in
excess of [*]. This means that, notwithstanding any other provision of
this Agreement, if Lundbeck exercises its right to cancel this
Agreement on ninety (90) days prior written notice in 1996 or 1997, it
will pay any remaining balance between the amount it has already paid
to Centaur those years and [*].
(b) During calendar year 1998, including the end of Phase I down-payment
(cf. Section 4.1 (b)) (which will be paid on the later of achievement
of this milestone or January 1, 1998), the aggregate of the Annual
Fee, Lundbeck's cost of pre-clinical, clinical, non-clinical and
regulatory activities and manufacturing costs paid or, in accordance
with Section 6.5, internally performed by Lundbeck will not exceed
[*]. Similarly, should the costs of what the parties agree to (which
is expected to be less than [*] for Lundbeck) exceed this [*], Centaur
will be responsible for costs in excess of [*]. For purposes of
computing Lundbeck's maximum payment in 1998, the Down-Payments
provided for in Sections 4.1(c) through (e) shall be deemed to occur
after calendar year 1998.
5. ROYALTIES
5.1 At the end of each Marketing Quarter, Lundbeck shall pay a royalty to
Centaur for the licenses granted hereunder. Such royalty shall be based on
the Net Sales of Licensed Products by Lundbeck, its Affiliates and/or its
sublicensees in accordance with the following provisions.
5.2 The Basic Royalty. Lundbeck will pay to Centaur a royalty (the "Basic
-----------------
Royalty") based on the total Net Sales of Licensed Product in the Territory
during each Marketing Year, calculated quarterly on a Marketing Year basis,
as follows:
[*] on the first [*] of Net Sales; and
[*] on Net Sales over [*] up to and including [*]; and
[*] on Net Sales over [*] up to and including [*]; and
[*] on Net Sales over [*] up to and including [*]; and
15
<PAGE>
31, October 1996
[*] on the Net Sales in excess of [*].
5.3 Example of Calculation. For example, if Net Sales in the Territory for a
----------------------
Marketing Year total [*], the royalty to be paid by Lundbeck shall be [*]
on the first [*] Net Sales, or [*] plus [*] on Net Sales over [*] up to and
including [*], or [*] plus [*] on Net Sales over [*] up to and including
[*], or [*] plus [*] on Net Sales over [*] up to and including [*], or [*]
plus [*] on Net Sales over [*], or [*] for a total royalty of [*].
5.4 Conversion into DKK and then USD. Net Sales are to be calculated in local
--------------------------------
currencies for each of the countries in the Territory and shall be
converted into DKK based on the average of the purchase exchange rate for
currency conversion quoted by the Den Danske Bank on the first Copenhagen
banking day of the first month of each applicable Marketing Quarter and the
last Copenhagen banking day of the last month of each applicable Marketing
Quarter. If Den Danske Bank has no such exchange rate, the conversion
shall be made at the average rate as calculated above for such remittances
by Bank of America, San Francisco, CA, U.S.A. Prior to being paid to
Centaur, royalty amounts shall be converted from DKK into U.S. Dollars,
using the average of the purchase exchange rates for conversion from DKK to
USD on the first and last banking day of the applicable Marketing Quarter
as quoted by Den Danske Bank or, if such rate is not available, then a
quote by Bank of America, San Francisco, CA, U.S.A.
5.5 Lundbeck shall within forty-five (45) days from the last day of each
Marketing Quarter pay to Centaur the royalties due for that Marketing
Quarter and provide Centaur with a statement (the "Royalty Report")
showing the total Net Sales effected hereunder by Lundbeck during the
preceding Marketing Quarter in the Territory and all Net Sales shall be
segmented in each such report according to sales on a country-by-country
basis, including the rates of exchange used for conversion to DKK from the
currency in which such sales were made and from DKK to USD.
5.6 Royalty payments due to Centaur hereunder shall be made in United States
Dollars by wire transfer to the Bank of America or other such bank as
identified by Centaur. Bank fees charged by Den Danske Bank will be borne
by Lundbeck; bank fees charged by Bank of America will be borne by Centaur.
5.7 No multiple royalties shall be payable because a Licensed Product, its
manufacture, use or sale is or shall be covered by more than one of the
Licensed Patents licensed under this Agreement. Should a distributor being
an Independant Third Party be used to selling Licensed Product for
Lundbeck's account, royalties will be paid on distributor's Net Sales to
the end-user. No royalties shall be payable on sales between Lundbeck, its
Affiliates or sublicensees or between Lundbeck Affiliates and sublicensees
unless such sales are for use as opposed to resale by the purchasing party.
5.8 All taxes assessed or imposed against or required to be withheld from all
payments due
16
<PAGE>
31, October 1996
Centaur shall be deducted from amounts payable hereunder and shall be paid
to appropriate fiscal or tax authorities by Lundbeck on behalf of Centaur.
Tax receipts received by Lundbeck evidencing payment of such taxes shall be
forwarded promptly to Centaur.
5.9 Royalty Rebate for Substantial Competition. On a country by country basis,
------------------------------------------
while the Basic Royalty is being paid, there will be a rebate if in a given
country Substantial Competition exists, which rebate will be [*] of
the smoothed royalty rate (SRR). For the purposes of calculating the SSR
the Net Sales in countries in which only the Trademark Royalty is being
paid (see Section 5.10) shall not be included. During each Marketing Year
the SRR will be computed by adding the sum of (a) [*] times the total
Territory Net Sales (excluding Net Sales in countries for which only
Trademark Royalties are paid) under [*], (b) [*] times the total Territory
Net Sales (excluding Net Sales in countries for which only Trademark
Royalties are paid) between [*] and [*], (c) [*] times the total Territory
Net Sales (excluding Net Sales in countries for which only Trademark
Royalties are paid) between [*] and [*], (d) [*] times the total Territory
Net Sales (excluding Net Sales in countries for which only Trademark
Royalties are paid) between [*] and [*], (e) [*] times the total Territory
Net Sales (excluding Net Sales in countries for which only Trademark
Royalties are paid) above [*], and dividing this total sum by the total Net
Sales in the Territory. [*] of the SRR will be multiplied by the Net Sales
from the country where Substantial Competition exists and that amount will
be subtracted from the royalty amount (based upon calculation using the
Basic Royalty) otherwise due from that country at the end of each Marketing
Year. The Royalty Rebate shall not affect the Basic Royalty computation.
For example, applying the figures of Section 5.3, if the SRR is [*] namely
[*] and if the Net Sales for the same Marketing Year in countries where
Substantial Competition exists totals [*], then the Royalty Rebate is [*]
and the total royalty to be paid by Lundbeck for such Marketing Year shall
be [*].
5.10 Duration of Royalty Payments; Duration of Patent Royalty; Trademark
-------------------------------------------------------------------
Royalty; Duration of Trademark Royalty.
--------------------------------------
(a) The Basic Royalty Rate will be paid on Net Sales in the Territory,
subject to subparagraph (b) below, until expiration of the Licensed
Patents. The Trademark Royalty will be paid on a country by country
basis until ten years after the last to expire of the Licensed Patents
in the Territory.
(b) The Basic Royalty (reduced, if appropriate, for Substantial
Competition rebates under Section 5.9 above and the creditability of
certain payments under Section 4.2 above) is to be paid until Licensed
Product is not protected by a patent containing a Valid Claim in a
country in the European Union, at which point in time, in that country
and in any other country where a Licensed Patent is not outstanding, a
royalty will be paid at the Trademark Royalty Rate, which will equal
[*] of Net Sales. Further, after this event occurs, in each country
in the Territory where Licensed Product is no longer protected by a
Licensed
17
<PAGE>
31, October 1996
Patent containing a Valid Claim, [*]. If patent protection is
regained through filing of new patents with Valid Claims (i.e., new
Licensed Patents), the royalty rate will revert to the Basic Royalty
until expiration of such new patent.
5.11 Paid Up License. When Lundbeck no longer owes royalties to Centaur,
---------------
Lundbeck will have either a fully paid up sole and exclusive license to the
Trademark (but excluding any portion of Centaur's House-Mark), or Centaur
will transfer free of charge ownership to Lundbeck of the Trademark (but
excluding any portion of the Trademark which comprises Centaur's House-
Mark) for that country with Lundbeck as registered owner of the Trademark,
as determined mutually by Centaur and Lundbeck at that time after
consultation with their financial advisors in the most tax efficient way
for both parties. At the time when Lundbeck either has a sole and
exclusive license for the Trademark or ownership of same in a country, it
will be Lundbeck's responsibility to pay all costs for the maintenance and
defense of that Trademark. While Lundbeck is paying the Basic Royalty or
Trademark Royalty, Centaur will pay all costs for the maintenance and
defense of the Trademark in that country, provided, however, that if
Centaur determines that it is not in its financial interest to continue
paying such maintenance and defense costs, then at Centaur's discretion, it
may transfer to Lundbeck either a fully paid up exclusive license or
ownership of the Trademark in the country at which point Lundbeck will no
longer need to pay the [*] royalty, but will be responsible for all
maintenance and defense costs in that country.
5.12 Lundbeck Records. Lundbeck shall keep for a period of five (5) Marketing
----------------
Years following the year to which such records relate, full, true and
accurate books of accounts and other records containing all information and
data which may be necessary to ascertain and verify the royalties payable
to Centaur hereunder.
5.13 Centaur Audit. Centaur shall have the right to have such pertinent books
-------------
and records of Lundbeck inspected and examined at all reasonable times for
the purpose of determining the accuracy of payments made hereunder in
respect of a Royalty Report which is not more than five (5) years old.
Such inspection and examination shall be conducted by an independent,
certified public accountant selected by Centaur and to whom Lundbeck shall
have no reasonable objection. Such accountant shall not disclose to
Centaur any information except for information necessary to verify the
accuracy of the reports and payments made pursuant to this Agreement.
Results of such review shall be made available to both parties. If the
review reflects an underpayment, Lundbeck shall promptly remit to Centaur
any amounts due with interest calculated using the simple average of the
prime rate of interest as quoted by the Bank of America, San Francisco, CA,
USA on the date originally due and the date of remittance. If the
underpayment (excluding said interests) is equal to or greater than five
percent (5%) of the payments made by Lundbeck to Centaur for such period
under review, Lundbeck shall pay all costs of such review and audit.
6. STEERING COMMITTEE; JOINT PROJECT TEAM; DEVELOPMENT PLAN AND RELATED
ACTIVITIES
18
<PAGE>
31, October 1996
6.1 The Steering Committee. Following the Date of Execution, the parties will
----------------------
form a Steering Committee composed of four individuals, with two
individuals designated by each of Lundbeck and Centaur, which will set
policy with regard to the Plan and its implementation. For example, the
Steering Committee is authorized to amend or modify the Plan (in writing),
to establish the budget for its implementation, and to determine the
overall strategy for development and non-clinical and clinical trial
efforts and continue until all Registrations for all countries in the
Territory and in the United States are obtained for Licensed Product. All
decisions of the Steering Committee will require the approval of three or
more members. The Steering Committee will meet, either in person or by
conference telephone call, at least once each calendar quarter. Should
meetings be in person, the locations will alternate between one chosen by
Lundbeck and one chosen by Centaur. Members of the Steering Committee may
invite guests to attend meetings, provided, however, that the other party
has no objection against such guests attending and that the party inviting
such guests shall obligate such guests to hold all Confidential Information
and Know-How in confidence at least to the same extent as the party itself
is obligated to hereunder. The members of the Steering Committee shall be
medicinally trained professionals with a scientific university degree.
6.2 The Joint Project Team and the Project Leaders. The Joint Project Team
----------------------------------------------
shall be composed of employees from both Lundbeck and Centaur. The Joint
Project Team shall consist of project responsible managers and staff, each
appointed by Lundbeck and Centaur respectively, who shall be responsible to
the Steering Committee for the day-to-day management of the project and
implementation of the Plan and any amendments thereto in accordance with
the policies established by the Steering Committee. Each of the parties
will further appoint a project leader (the "Project-Leader"), each of whom
will spend at least half of their time on this project. While as a general
guideline Lundbeck's Project Leader will have responsibility for clinical
and non-clinical activities performed by Lundbeck for Licensed Product in
all countries in the Territory and Centaur's Project Leader will have
responsibility for Centaur's research and development, Centaur's
identification of surrogate markers and Centaur's non-clinical and clinical
activities for Licensed Product in the United States, the ultimate decision
for the allocation of activities will be made by the Steering Committee.
The Project Leaders will communicate on an on-going basis and in any event
no less than an average of once every week either in person or by
telephone, fax or E-mail. Meetings of the Joint Project Team will be
arranged on an as needed basis as determined jointly by the Project
Leaders, with the location of successive meetings selected first by the
Lundbeck Project Leader and then by the Centaur Project Leader. Each party
may change its Project Leader by thirty (30) days prior written notice to
the other.
6.3 The Plan. Centaur and Lundbeck have jointly developed and attached as
--------
Annex B to this Agreement their development plan for the Licensed Product
(hereinafter the "Plan") and shall jointly prepare the relevant
documentation for applications for Registration and NDA. The intent of the
parties is that the Plan shall set forth all the non-clinical and clinical
activities and trials to be conducted by the parties specifying the timing
and finalization of each such study and of the reporting of any such study
hereunder and all other development activities to be conducted by the
parties hereto in connection with the
19
<PAGE>
31, October 1996
development of the Licensed Product for application for Registration and
NDA. The Plan's aim is to satisfy the requirements of the health
authorities in the Territory and the FDA in a manner which maximizes
efficiency and minimizes cost. If the Plan itself does not specify which
party is to perform a study and/or activity, the Steering Committee shall
do so.
6.4 Review and, If Necessary, Revision of the Plan. The Plan will subsequently
----------------------------------------------
be discussed by the parties and/or the Steering Committee and with the
European Agency for the Evaluation of Medicinal Products or the European
Committee for Proprietary Medicinal Products, in Lundbeck's option, and if
possible with the FDA. After such presentation to the said public
authorities, the Steering Committee shall in good faith discuss and, if so
agreed, amend the draft Plan in accordance with the directions and
suggestion made by the said public authorities and such amended Plan shall
after being approved in writing by Centaur and Lundbeck be regarded as the
final Plan and shall be considered the replacement Plan and should be
annexed to this Agreement as Annex B and shall after being so annexed be
regarded as an integral part of this Agreement. Should the activities of
the Plan prove to be inadequate for whatever reason for Lundbeck to obtain
Registration in the Territory or for Centaur to obtain US-Registration,
then the Steering Committee shall meet to revise the Plan to accomplish the
goals as set forth above.
6.5 Division of Costs. Costs of performance of the activities of the Plan
-----------------
shall be shared equally by Centaur and Lundbeck. Tasks pursued through an
Independent Third Party shall first be approved by the Steering Committee.
In the case of costs incurred internally by Lundbeck or Centaur, the
parties will first attempt to obtain a third party bid, if available to
perform that task. If such a third party bid is not available then
reimbursement shall be computed as set forth in 6.5.A. below.
A. Preclinical, Clinical, Non-clinical and Regulatory Costs. Costs for
---------------------------------------------------------
Preclinical, Clinical, Non-clinical and Regulatory efforts (including but
not limited to toxicological activities, formulation development,
activities to support pivotal efficacy and safety claims in regulatory
filings) will be shared equally by Lundbeck and Centaur for Registration in
the United States and such major countries in the European Union as
identified in Annex B. If the activities contemplated in the Plan show to
be inadequate to so obtain Registration in the United States and said major
countries in the European Union, the Steering Committee shall consider and
decide on the necessary amendments to the Plan and before costs for so
amended activities may be claimed by either party under this Section 6.5.
For Lundbeck or Centaur internally incurred Preclinical, Clinical, Non-
clinical and Regulatory costs, costs will be calculated as either (i) the
sum of the following, all determined in accordance with U.S. Generally
Accepted Accounting Principles ("U.S. GAAP"):
a. Direct labor costs, including benefits; and
b. Direct materials costs, including animals, chemicals, supplies; and
c. Bulk Product costs (see definition of Standard Costs); and
d. Costs to conduct and monitor Preclinical, Clinical and Non-clinical
Activities,
20
<PAGE>
31, October 1996
including but not limited to remuneration to patients, if any, product
liability insurance, transport charges of drug to test centers,
housing, food, care and monitoring of patients while at test centers,
and performance of clinical chemistries and pharmacokinetics; and
e. Costs to prepare and present reports to regulatory authorities; and
f. Indirect costs associated with conducting, monitoring and reporting on
Preclinical, Clinical and Non-clinical Activities, including but not
limited to consulting, travel, education seminars, etc.; and
g. A portion of Preclinical, Clinical and Non-clinical Activities
overhead, including but not limited to animal handing and animal
facilities costs, facilities, insurance, telephone and utilities costs
for space used in activities, depreciation, etc. allocated on the
basis of hours spent on performance of the activities of the Plan by
the Lundbeck/Centaur personnel working in the project contemplated in
this Section 6, relative to the total amount of hours spent by all
research and development personnel, but not considering general or
administrative personnel, of that party; and
h. A portion of administrative costs and other corporate overhead costs
which reasonably support Preclinical, Clinical and Non-clinical
Activities and Regulatory activities allocated on the basis of hours
spent on performance of the activities of the Plan by the
Lundbeck/Centaur personnel working in the project contemplated in this
Section 6, relative to the total amount of hours spent by all research
and development personnel, but not considering general or
administrative personnel, of that party;
or alternatively (ii) a party may substitute for the items in Section 6.5 A
(i) (a), (g) and (h) the following:
j. Standardized direct labor costs including a portion of Preclinical,
Clinical and Non-clinical Activities overhead, including but not
limited to animal handing and animal facilities costs, facilities,
insurance, telephone and utilities costs for space used in activities,
depreciation, etc. and a portion of administrative costs and other
corporate overhead costs which reasonably support Preclinical,
Clinical and Non-clinical Activities and Regulatory activities all to
be allocated on the basis of hours spent on performance of the
activities of the Plan by the Lundbeck/Centaur personnel working in
the project contemplated in this Section 6, relative to the total
amount of hours spent by all research and development personnel, but
not considering general and administrative personnel, of that party;
such standardized direct labor costs including overheads shall be
calculated by using one standard rate for academic personnel and one
standard rate for non-academic personnel such rates to reflect a fair
average of such labor costs, including benefits, and said overheads,
these standard rates to be approved by the other party in advance of
being applied and to be adjusted in accordance with the relevant labor
price index as evidenced by the relevant party and approved by the
other party.
21
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31, October 1996
The parties shall be free to choose which of the mechanisms for calculation
set forth in (i) and (ii) above it will apply and shall notify the other in
writing in advance of initiation of the first activity under the Plan, and
the parties may change to the other mechanism and vice versa for each new
activity undertaken under the Plan after having notified the other party
before it initiates this new activity.
B. Settlement of Expenditures. After the end of each calendar quarter,
--------------------------
Lundbeck and Centaur will review the actual expenditures made by each of
Lundbeck and Centaur in performing the activities of the Plan. Within
forty-five (45) days after the end of that quarter, the party whose
expenditures were greater than the other will pay to the other an amount
equal to half of that excess.
C. Records. Both parties shall keep for a period of five (5) calendar years
-------
following the year to which such records relate, full, true and accurate
books of accounts and other records containing all information and data
which may be necessary to ascertain and verify the expenditures paid or
defrayed by it under this Section 6.5.
D. Audit. The other party shall have the right to have such pertinent books
-----
and records set out in Section 6.5 C of the other party inspected and
examined at all reasonable times for the purpose of determining the
accuracy of any payment made hereunder in respect of such expenditures
which are not paid and/or defrayed more than five (5) years before the
request for inspection. Such inspection and examination shall be conducted
by an independent, certified public accountant selected by the party
requesting the audit and to whom the other party shall have no reasonable
objection. Such accountant shall not disclose to the party requesting the
audit any information except for information necessary to verify the
accuracy of the reports and payments made pursuant to this Agreement.
Results of such review shall be made available to both parties. If the
review reflects any wrongful payment, the relevant party shall promptly
remit to the other party any amounts due with interest calculated using the
prime rate if interest as quoted by the Bank of America, San Francisco, CA,
USA on the date of remittance. If the wrongful payment (excluding said
interests) is equal to or greater than five percent (5%) of the total costs
paid or defrayed by either party for such period under review, the party
not having requested the audit shall pay all costs of such review and
audit.
E. Early NDA/Application for Registration. Activities conducted under the Plan
--------------------------------------
shall remain covered by this Section 6.5 irrespective of application for
Registration or an NDA has been filed prior to the relevant activity being
commenced.
F. Budget. A party that is to perform an activity under the Plan shall no
------
later than at the time it presents to the Steering Committee the activity
for approval for initiation as set forth in Section 6.6 present a budget
for the expected costs to be incurred in connection with the relevant
activity, and the Steering Committee shall have authority to approve such
budget. If such budget is later exceeded by the greater of 10 % of such
budget or USD 10,000, the party performing the relevant activity shall
inform the Steering Committee accordingly, and the Steering Committee shall
authorize such excess, before this may be claimed under this Section 6.5 by
the party having performed the relevant activity.
22
<PAGE>
31, October 1996
6.6 Initiation of Activities. From the Date of Execution, no activities under
------------------------
the Plan will be initiated without approval of the protocol by the Steering
Committee at regularly scheduled meetings of or through written approvals
of Steering Committee.
6.7 Centaur shall supply Lundbeck with all Synthesis Data and all the clinical
and non-clinical data pertinent to CPI-1189 and/or Licensed Product useful,
pertinent or required for regulatory purposes in the Territory for Primary
Indication available as of Date of Execution free of charge. Each party
shall when performing activities under the Plan supply to the other party's
Project Leader the data developed as a part of the activities under or
outside the Plan pertinent to Licensed Product in hard copy and in
computer format agreed by the Steering Committee. No party shall deny a
reasonable request from the other party for such data.
6.8 All activities conducted by Centaur and Lundbeck under the Plan, including
all activities and trials with Licensed Product, shall be carried out
according to the Plan and under common and agreed criteria for protocol
writing, selection of contract research organizations and Good Clinical
Practice, Good Manufacturing Practice and Good Laboratory Practice
guidelines as currently applicable in both the Territory and the United
States of America. The Steering Committee shall agree mutually to the
initiation and subsequent monitoring and modification of all activities
conducted under the Plan. With regard to CPI-1189 activities Centaur has
performed prior to the Date of Execution, Centaur will repeat or supplement
any of those activities rejected by regulatory authorities in the European
Union countries being a part of the Territory until such activities are
accepted by the said regulatory authorities or it is not commercially
practicable to do so, in which latter case Lundbeck may conduct the
relevant activities for Centaur's account applying Section 6.10 mutatis
mutandis.
6.9 Lundbeck will prepare the relevant documentation for an application for
Registration with the health authorities in the parts of the Territory that
it wishes to pursue its rights granted hereunder and, solely in its own
name, apply for Registration of Licensed Product in its own name and shall
remain the sole holder of the Registration in the Territory, subject to
Section 13.2 below. If one year after Lundbeck has received the first
Approval for Sale in the European Union, Lundbeck has failed to so apply
for Registration in any of the countries in the Territory, or, if local
studies are required or customarily made in any country in the Territory,
Lundbeck has not within one year after having received the said first
Approval for Sale initiated such studies and has not within one year after
completion of such studies applied for Registration in any of such
countries in the Territory, then that country will be deemed excluded from
the Territory and all rights to Licensed Product in that country (including
the right to market) will revert to Centaur.
6.10 The parties shall use best reasonable efforts to conduct the development of
the Licensed Product in accordance with the activities and timetable set
forth in the Plan.
If a party is unable for reasons within its control (for reasons beyond its
control refer to Section 6.11) to reach a milestone or to initiate, conduct
or complete a study referred to in the Plan by a date set forth in the
Plan, the Project Leader of the party not in compliance
23
<PAGE>
31, October 1996
with the Plan shall without delay inform the other Project Leader hereof.
The Joint Project Team, or if either party so requests the Steering
Committee, shall convene to discuss how the problems can be resolved. If
either the milestone or the study has not been reached or completed or the
parties have not agreed upon a solution to the problems within six (6)
months from the date in question, the other party may decide to initiate,
conduct and/or complete (or have initiated, conducted and/or completed) the
relevant activity by paying the costs for or internally perform the
necessary activities under the Plan and by requiring the other party to
compensate its costs in this connection as assessed in accordance with the
principles of Section 6.5 hereof applying the following mechanism:
If Lundbeck is the party not having complied with the Plan as set out in
this Sub-section, then after having completed the relevant activities
Centaur may forward a statement setting forth the tasks carried out and a
supporting invoice on the said costs in the amount that Lundbeck is to pay
under Section 6.5, which Lundbeck shall pay within thirty (30) days of
invoice.
If Centaur is the party not having complied with the Plan as set out in
this Sub-section, then after having completed the relevant activities
Lundbeck may forward a statement setting forth the tasks carried out and a
supporting invoice on the said costs that Centaur is to pay under Section
6.5, and Centaur shall have the option either (i) to pay this invoice
within thirty (30) days, or (ii) to request within the same period Lundbeck
to apply this invoice with accrued interests (applying the interest rate
set forth in Section 5.13) in any following payment to Centaur hereunder
under Section 4 and/or 5 until the invoice and the interests are recovered
in full by Lundbeck through the reduced payments.
This right to claim compensation as provided for in this Sub-section shall
be the sole and exclusive remedy for such failure to reach a milestone or
initiate, conduct and/or complete a study.
6.11 In the event a party is unable due to Force Majeure, to reach a milestone
or complete a study set forth in the Plan, the parties shall meet and
discuss why the milestone or the study has not been reached or completed
and will agree as to the actions to be taken to obtain Registration in the
Territory or US Registration as quickly as possible.
6.12 Procedure For Presentation of Study Documentation. All non-clinical and
-------------------------------------------------
clinical studies and reports on such activities to be conducted under the
Plan shall be discussed and closely liaised between the two Project
Leaders, before being initiated by either party as set forth in the Plan.
This shall include that the party that is to perform an activity under the
Plan through its Project Leader shall send to the other party the study
protocol and the first draft study report respectively and allow the other
party's Project Leader to comment on each protocol and report.
6.13 Information On Development Status. Both parties shall quarterly and within
---------------------------------
15 days of the other party's reasonable request, advise the other party in
writing of the status of their work under the Plan and any activity
conducted under Section 6.14. Furthermore, they shall immediately upon
request send the requesting party copies of all written material prepared
according to the obligations hereunder, including but not limited to
24
<PAGE>
31, October 1996
correspondence and minutes of meetings with any public health authorities.
6.14 Activities Outside Plan. All non-clinical or clinical activities relating
-----------------------
to CPI-1189 and/or Licensed Products outside the Plan, which are performed
by either party, their Affiliates or Independent Third Parties anywhere in
the world before Registration in the Territory, shall be disclosed and
discussed between the parties or by the Steering Committee and approved,
such approval not to be unreasonably withheld or delayed, by the parties
before initiated by either party provided the other party or the Steering
Committee forwards its comments and decision on approval within one (1)
month of receipt of the protocol. If an approval is not received by such
one (1) month deadline, it is acknowledged that the other party consents to
initiation of the study. On all non-clinical and clinical activities both
parties shall send the other party a first draft report and allow the other
party to comment on each report, provided that such comments are submitted
to issuing party within one (1) month from receipt of such draft report by
the Receiving Party and all of the Receiving Party's reasonable comments
shall be included in the final report.
6.15 All costs and/or expenses arising or incurred in connection with
preparation and filing of the application for Registration in the Territory
and maintenance of Lundbeck's Registration in the Territory shall be borne
by Lundbeck, unless Centaur has expressly agreed to the costs or that
Centaur is not otherwise to bear under this Agreement., and similarly
Centaur shall bear all costs and/or expenses in connection with the
preparation and filing of the application for US Registration or medical
registration worldwide that Lundbeck is not otherwise to bear under this
Agreement.
6.16 Neither Centaur nor Lundbeck warrants that Registration of the Licensed
Product will be obtained in or outside the Territory.
6.17 Should Centaur license CPI-1189 to another party outside of the Territory,
and that other party determines that non-clinical or clinical activities
are necessary for regulatory approval in its territory, Centaur will
provide in the license that it (Centaur) will at a minimum be able to
review, comment on and reject those non-clinical and clinical trials.
Centaur will provide an opportunity for Lundbeck to review and comment on
those non-clinical and clinical trials as follows. Centaur will inform
Lundbeck of the non-clinical and clinical activities being conducted by its
licensee and describe those trials. Lundbeck will have fifteen days (15)
after having received the information reasonably necessary for evaluation
to provide Centaur with its comments in writing. If Lundbeck fails to
provide such written comments within that fifteen day (15) period, it will
be assumed that it has no comments. If Lundbeck has comments, Centaur will
incorporate them into its comments to its licensee. In no event shall
Lundbeck initiate any contact with Centaur's licensee in connection with
its review and comment on such non-clinical and clinical trials. All
information given by Centaur to Lundbeck relating to the activities of its
licensee will be deemed Confidential Information.
6.18 Dispute Resolution. If a disagreement arises between the Project Leaders,
------------------
it shall be referred to the Steering Committee for resolution.
Disagreements, if any, which may arise between the respective parties'
representatives in the Steering Committee shall be amicably resolved
whenever possible. In the event the Steering Committee is deadlocked,
25
<PAGE>
31, October 1996
the matter shall be referred to the President of each of Centaur and
Lundbeck for resolution who must either resolve or determine how to resolve
the situation or if necessary the overall relationship. Other disputes will
be resolved in accordance with Section 16 below.
6.19 Centaur Development Partner in Japan. Should Centaur determine to contract
------------------------------------
with an Independent Third Party as a development partner for Licensed
Products for registration, promotion or sales in Japan (as opposed to
contracting with an Independent Third Party to merely distribute Licensed
Product in Japan not to conduct non-clinical or clinical activities), then
Centaur will consult with Lundbeck and take into consideration Lundbeck's
views regarding that Independent Third Party and its capabilities, such
Independent Third Party to be a leading pharmaceutical company experienced
in international pharmaceutical development. Lundbeck will be free to
suggest alternative Independent Third Parties to Centaur. Centaur shall
consider and take in to due consideration Lundbeck's views prior to making
a final decision regarding with which company to contract with emphasis on
the objective that such Independent Third Party shall conduct development
activities and establish adverse event reporting systems that will be
consistent with those set out in this Agreement.
7. MANUFACTURING AND SUPPLY
7.1 Overview. The parties will on a regular basis coordinate and exchange
--------
information related to producing Bulk Product and Bulk Substance. Lundbeck
and Centaur will communicate and collaborate with regard to manufacturing
processes and costs. Lundbeck may audit Centaur's manufacturing facility
from a financial and manufacturing perspective, and will be given the
opportunity to provide comments and suggestions to Centaur to improve
efficiency and reduce the cost of the Bulk Product and, if Lundbeck
manufactures, vice versa. Regardless, Centaur will be responsible for the
quality of the Bulk Product it produces.
Centaur will unless otherwise agreed supply the Bulk Product and/or Bulk
Substance for galenic (experimental), non-clinical and clinical for its own
use and will supply the Bulk Product for commercial use (including without
limitation use for promotional purposes) meeting quality standards as set
forth below. "Bulk Product for commercial use" shall when used in this
Section 7 mean all Bulk Product which is used by Lundbeck in Licensed
Products that are transferred to an Independent Third Party such transfer
being a part of the Net Sales. Centaur, in consultation with and with the
approval of Lundbeck shall establish a back-up supplier for the Territory
for supplies of Bulk Product for commercial use, which back-up supplier may
also serve as a back-up supplier for outside of the Territory. Should the
parties not be able to agree on a back-up supplier, then, until they do so,
if at all, Lundbeck will serve as back-up supplier for the Territory.
Additionally, even if the parties agree on a back-up supplier, Lundbeck
may, by providing eighteen (18) months prior written notice to Centaur,
become the back-up supplier of Bulk Product for commercial use for the
Territory. Should Lundbeck become back-up supplier for the Territory, it
will provide up to 10% (the exact amount to be coordinated by the parties,
with sensitivity to Lundbeck's production scheduling) of the requirements
of Bulk Product for
26
<PAGE>
31, October 1996
commercial use for the Territory.
Lundbeck will supply Bulk Substance and/or Bulk Product for its own galenic
(experimental), non-clinical and clinical use except for the initial period
of this Agreement until Lundbeck is capable of manufacturing Bulk Substance
and/or Bulk Product during which initial period Centaur will supply
Lundbeck Bulk Substance and/or Bulk Product as required to duly initiate
and conduct the activities under the Plan. Lundbeck will prepare the
necessary documentation for deliveries of Bulk Substance and/or Bulk
Product according to European Union and FDA requirements for experimental
use. In addition, Lundbeck will prepare documentation for full scale
commercial manufacturing in the Territory. Should the other party so
request due to insufficiency of its own such supplies and if agreed to by
the other party, the parties will supply each other with amounts of Bulk
Substance and/or Bulk Product for development purposes.
7.2 Non-Clinical and Clinical Supply. Centaur undertakes to manufacture and
--------------------------------
supply Bulk Product and/or Bulk Substance for Lundbeck's initial galenic
(experimental), non-clinical use, which shall include supplies in the
amounts and at the times stipulated and contemplated in the Plan and Annex
B until Lundbeck is itself ready to supply its own needs which is expected
mid-1997. Subsequent to this initial period, Lundbeck undertakes to
manufacture or have manufactured and supply Bulk Product and/or Bulk
Substance for its own galenic (experimental), non-clinical and clinical
use. Both parties shall continuously after mid-1997 use their reasonable
efforts to supply to the other party amounts of Bulk Product and/or Bulk
Substance for the galenic (experimental), non-clinical and clinical use
should the other party so request due to insufficiency of its own such
supplies. For supplies under this Section 7.2 the supplied party shall pay
the SMP as set out in Section 7.6, without Lundbeck paying the fifty
percent (50%) set forth in Section 7.19.
7.3 Drug Master Files. Lundbeck and Centaur will in parallel and in close
-----------------
cooperation prepare and regularly update (i) drug master files regarding
manufacturing processes (known as "DMF 2") and regarding facilities (known
as "DMF 1") for Bulk Substance for development purposes to be filed with
and to comply with both standards directed by FDA and regulatory
authorities in the Territory (the "DMF's"), and (ii) chemical
manufacturing control (known as "CMC")-documentation, including but not
limited to documentation on formulation of tablets being Licensed Products,
to be filed with and to comply with the standards of the regulatory
authorities in the Territory (the "CMC-documentation"). The DMF's and the
CMC-documentation shall be made available to the other party within a
reasonable time after such is available and upon the reasonable request by
the other part. The DMF's and the CMC-documentation shall be regarded as
part of Synthesis Data and shall be made available at no additional charge
to the other party other than that the costs for preparing these files
shall be included by the parties in the costs recoverable in accordance
with Section 6.5.
7.4 Supply of Commercial Bulk Product. Centaur undertakes to manufacture or
---------------------------------
have manufactured and supply Bulk Product to Lundbeck for commercial use in
Licensed Product, and Lundbeck undertakes to purchase from Centaur all Bulk
Product needed by Lundbeck for commercial use in Licensed Product to be
sold throughout the Territory subject to Lundbeck's right to produce Bulk
Product as set forth in this Section 7.
27
<PAGE>
31, October 1996
7.5 Regulatory Clearance.
--------------------
A. Centaur to Secure Regulatory Approvals. Centaur will use its best
--------------------------------------
reasonable efforts to obtain all regulatory approvals necessary for the
manufacture or supply of Bulk Product for Licensed Products in the
Territory, which shall be obtained in due time to avoid any delay in
Lundbeck's launch and marketing of Licensed Products as reasonably notified
by Lundbeck, and Centaur shall promptly provide Lundbeck with such
information regarding the manufacture and quality control of Bulk Product
for Licensed Products necessary to permit Lundbeck to seek marketing
approval of Licensed Products in the Territory. The undertaking by Centaur
shall include, without limitation, the following within the said
time-limit:
(a) Manufacturing Approval. Centaur will prepare a Plant Master File for
----------------------
Bulk Product containing all relevant Synthesis Data (collectively the
"Documentation") in accordance with the requirements as applicable at
any time of relevant regulatory authorities in the Territory and the
United States.
(b) Right of Reference. Centaur will provide to all regulatory
------------------
authorities in the Territory and/or to Lundbeck (i) on filing of its
Plant Master File, and thereafter for new filings, (ii) at the time of
submission of an NDA, any statement or other document necessary or
appropriate to permit and authorize Lundbeck or Lundbeck's
sublicensees or Affiliates to cross-reference Centaur's Drug Master
File or Plant Master File when and as deemed necessary by Lundbeck for
regulatory authorities in the Territory.
(c) Good Manufacturing Practices And Quality Requirements. Centaur will
-----------------------------------------------------
undertake such steps to achieve, with respect to Bulk Product,
manufacturing compliance with "Good Manufacturing Practices"
guidelines as in effect in any part of the Territory from time to time
during this Agreement. The parties shall no later than six (6) months
before the first firm order as set forth in Section 7.10 is
anticipated by Lundbeck to be placed by it execute an agreement which
is on all material terms substantially identical with Annex C hereto,
which Annex C shall be amended to properly reflect the revised
specifications of Licensed Product.
(d) Regulatory Inspection. Should any national, supra-national or
---------------------
international regulatory authority give notice of intent to conduct an
inspection at Centaur's manufacturing plant or the plant of any sub-
contractor of Centaur or take any other regulatory action with respect
to the manufacture and supply of Bulk Product, Centaur will promptly
give Lundbeck notice thereof, supply all information pertinent thereto
and grant access to such authorities as required.
(e) Contact With Regulatory Authorities. Centaur will be responsible for
-----------------------------------
all contacts with the regulatory authorities with respect to the
Documentation after it has been submitted to the relevant authority
and will continuously keep the Documentation updated (with copies to
Lundbeck) with respect to developments and changes in production
methods, quality, specifications or in other respects of Bulk Product,
28
<PAGE>
31, October 1996
provided that such changes shall be made only to the extent this is
consistent with this Agreement, including without limitation Annex C.
(f) Regulatory Approval - Licensed Product. Centaur will use its best
--------------------------------------
reasonable efforts to assist Lundbeck in providing to regulatory
authorities all information with respect to the manufacture or quality
control of Bulk Product necessary for regulatory approval of Licensed
Products in the Territory.
(g) Reference Standard. Centaur shall provide Lundbeck from time to time
------------------
with reasonable quantities of Bulk Product of reference standard
quality for analytical purposes free of charge.
(h) Centaur To Inform Lundbeck. With respect to Centaur's undertakings
--------------------------
set forth in this Section 7.5, Centaur shall regularly inform Lundbeck
of the status of such undertakings including, without limitation, the
preparation and progress of Documentation.
B. Collaborative Effort. Lundbeck and Centaur will collaborate closely and
--------------------
regularly with each other in the performance of their respective
undertakings pursuant to Section 7.2, 7.3, 7.4 and 7.5 and shall provide
documents in their possession which would assist the other party with
respect to such obligations. The Steering Committee may decide to engage in
these collaborative efforts in furtherance of an optimal solution to
questions emerging.
C. Where Lundbeck Manufactures. As provided for above if Lundbeck makes
---------------------------
clinical supplies to Centaur and for below if Lundbeck is the "back-up
supplier" in accordance with Sections 7.1, 7.19 7.20, 7.21 and 13.9, it
will manufacture a portion of the Bulk Product necessary to serve the
market in the Territory. To the extent that Lundbeck is explicitly
required to perform any of the activities described in this Section 7, then
its obligations will be the same as the obligations of Centaur as described
above, and Lundbeck will similarly be required to keep Centaur informed,
all as if the word "Lundbeck" were substituted for "Centaur" and vice versa
in the provisions above.
7.6 Price of Bulk Product. Lundbeck will after Registration purchase all
---------------------
(subject to Lundbeck's own production described in this Section 7) Bulk
Product, at the Standard Manufacturing Price ("SMP"). The SMP shall equal
[*] of Standard Costs, which includes costs of production, quality control,
quality assurance, handling, shipping and warehousing. Standard Costs shall
equal the sum of A through E below:
A. Active and inactive raw materials and Bulk Products at purchase price
B. Finishing supplies at purchase price
C. Full direct labor costs including benefits costs
D. Variable overheads (variable overheads include the expenses generated
within a production department such as wages and benefits of indirect
labor, indirect operating supplies, etc.)
E. Fixed overheads (fixed overheads include those expenses necessary to
run a particular manufacturing site (e.g. plant administration, taxes,
insurance,
29
<PAGE>
31, October 1996
depreciation, repairs and maintenance) and are allocated to product
based on its share of total direct labor hours, machine hours, cycle
time and/or volume of end product)
Provided, however, that in calculating Standard Costs, the sum of items D
and E shall not exceed [*] of the sum of items A, B and C.
If Centaur sources Bulk Product from a third party, the price charged to
Lundbeck for such Bulk Product will be as if the Bulk Product was
manufactured by Centaur, i.e., the SMP, using Centaur's average Standard
Costs for the last three deliveries of Bulk Product of Centaur origin to
Lundbeck.
If Centaur sources Bulk Product from a third party without having sourced
Bulk Product itself for the preceding twelve (12) months before the date of
relevant delivery to Lundbeck hereunder, the price charged to Lundbeck for
such Bulk Product will be the actual price charged to Centaur by the second
supplier for the Bulk Product in question plus [*] always provided that the
price so charged by the second supplier does not exceed the price otherwise
charged to Centaur by the same supplier for other similar supplies as per
Centaur's written evidence should Lundbeck so request.
Should Centaur ever purchase Bulk Product or Bulk Substance whether for
non-commercial or commercial use and/or finished Licensed Product from
Lundbeck, it shall pay to Lundbeck Lundbeck's SMP price as calculated
above.
7.7 Use of U.S. Generally Accepted Accounting Principles ("U.S. GAAP), Records
--------------------------------------------------------------------------
and Audit.
---------
A U.S. GAAP. U.S. GAAP will be used in determining the components items A
---------
through E in Section 7.6. The parties will have their accounting personnel
communicate and coordinate to avoid any uncertainty and differences in
understanding.
B. Records. Both parties shall keep for a period of five (5) calendar years
--------
following the year to which such records relate, full, true and accurate
books of accounts and other records containing all information and data
which may be necessary to ascertain and verify the SMP calculated under
Section 7.6.
C. Audit. The other party shall have the right to have such pertinent books
-----
and records set out in Section 7.7 B of the other party inspected and
examined at all reasonable times for the purpose of determining the
accuracy of any payment made hereunder in respect of the SMP which are not
charged more than three (3) years before the request for inspection. Such
inspection and examination shall be conducted by an independent, certified
public accountant selected by the party requesting the audit and to whom
the other party shall have no reasonable objection. Such accountant shall
not disclose to the party requesting the audit any information except for
information necessary to verify the accuracy of the reports and payments
made pursuant to this Agreement. Results of such review shall be made
available to both parties. If the review reflects any wrongful payment,
the relevant party shall promptly remit to the other party any amounts due
with interest calculated using the simple average of the prime rate if
interest as quoted by the Bank of America, San
30
<PAGE>
31, October 1996
Francisco, CA, USA on the date of the amount being originally due and the
date of remittance. If the wrongful payment (excluding said interests) is
equal to or greater than five percent (5%) of the total costs paid or
defrayed by either party for such period under review, the party not having
requested the audit shall pay all costs of such review and audit.
7.8 Minimizing Manufacturing Costs. Centaur shall use its best reasonable
------------------------------
efforts at all times to minimize Standard Cost while maintaining acceptable
quality standards. If Lundbeck allege that Centaur's Standard Costs are
too high, Centaur will have the burden of proving that its Standard Costs
are not too high.
7.9 Forecast. Lundbeck will, before each January 1, April 1, July 1 and
--------
October 1, present to Centaur a written non-binding forecast estimating the
quantities of Bulk Product to be delivered during each of the next fifteen
(15) months.
7.10 Firm Orders. Lundbeck will place firm orders for delivery not less than
-----------
ninety (90) days prior to the required shipment date, and Centaur will be
obliged to deliver all ordered Bulk Product by the delivery date stated in
the order, except to the extent that such supply would exceed the latest
non-binding forecast given by more than twenty percent (20%) for the month
in question.
7.11 Delivery Terms. Each delivery of Bulk Product will be effected Ex Works
--------------
Centaur's plant, in accordance with Incoterms 1990, as published by the
International Chamber of Commerce. All quantities of Bulk Product will be
delivered suitably packed for transportation. If so requested by Lundbeck,
Centaur will act as Lundbeck's agent free of charge, except that such
expenses may be included in the calculation of SMP, to make arrangements
based upon Lundbeck's instructions for shipping and to prepare export
documentation for the Bulk Product to such destination as Lundbeck may
specify. Lundbeck will be responsible for all other arrangements including
payment for shipping and customs at destination.
7.12 Payment for Bulk Product. Prior to the beginning of any calendar quarter
------------------------
(starting on January 1, April 1, July 1 and October 1) Lundbeck will
estimate the amount of Bulk Product that Lundbeck will purchase from
Centaur and Lundbeck will pay to Centaur in advance (using the definitions
in Section 7.6) and forecast actual costs for that quarter. After that
quarter ends, Lundbeck and Centaur will review the actual amount Lundbeck
purchased and Centaur's actual costs within forty-five (45) days of the end
of that quarter, should Lundbeck's advance payment have been greater than
the SMP of the actual amount it purchased, Centaur will refund to Lundbeck
the difference, or should Lundbeck's advance payment have been less than
the SMP of the actual amount it purchased, Lundbeck will pay to Centaur the
difference.
7.13 Lundbeck Improvements to Know-How. In the event that Lundbeck develops
---------------------------------
improvements to Know-How and/or Synthesis Data, such improvements will be
shared cost free with Centaur, which shall be free to use said improvements
in its own manufacture of Bulk Product or Bulk Substance, unless Lundbeck
can establish that such improvements can be used independent from Centaur
Know-How and/or Synthesis Data
31
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31, October 1996
and, if so, the parties shall, if Centaur so wishes, in good faith
negoatiate terms for a license to Centaur of such improvements. If Centaur
and Lundbeck jointly develop patents relating to the manufacturing of Bulk
Product and/or Bulk Substance and/or Licensed Products, those patents will
be jointly owned and Lundbeck will not be required to pay any royalties for
their use.
7.14 Notification of Events Concerning Supply. Centaur shall continuously at any
----------------------------------------
time unless having declared Force Majeure under Section 14 after the
Registration of the first formulation of Licensed Product has been obtained
in the Territory and for the term of this Section 7 hold a buffer of Bulk
Product equivalent to not less than fifty (50) days average delivery to
Lundbeck based on the deliveries in the last six (6) months. Centaur will
promptly notify Lundbeck of any circumstances that may be of importance as
to Centaur's ability to supply Lundbeck with Bulk Product. In the event
Lundbeck should commence manufacture of Bulk Product as provided herein,
Centaur will support Lundbeck in setting up a well functioning production,
e.g., by furnishing Lundbeck with information, know-how, Synthesis Data and
advice regarding processing and choice of machinery, equipment etc.
7.15 Lundbeck Inspection. Within thirty (30) days following receipt of each
-------------------
shipment and before Bulk Product is put into further production, whichever
is first to occur, Lundbeck shall carry out customary tests and inspections
as required by the regulatory authorities in the Territory. Should any
quantity of Bulk Product be found not to conform with the Specifications,
Centaur shall, at its sole cost, replace the defective quantity without
delay and no later than thirty (30) days of receipt of Lundbeck's notice to
this effect, provided that Lundbeck has notified Centaur of such non-
conformity within sixty (60) days following receipt of the defective
quantity of Bulk Product.
7.16 Changes in Manufacturing Process. No changes shall be made in the
--------------------------------
processes or specifications used in producing Bulk Product for Licensed
Product without agreement by both parties. If such changes are required
for regulatory reasons, neither party shall unreasonably withhold its
consent to such changes. The parties shall enter into an Agreement for the
manufacturing of Bulk Product substantially similar to that attached as
Annex C.
7.17 Term. Lundbeck's obligation to purchase Bulk Product for commercial use in
----
accordance with this Section 7 shall commence as of the Date of Execution
and, subject to Section 7.22 below, shall expire on a country by country
basis in the Territory when there is no patent protection of CPI-1189
prohibiting an Independent Third Party from the legal or actual
manufacturing and distribution of Bulk Product in a given country. The
parties shall in reasonable time before such patent protection expires
start to re-negotiate delivery terms, with a preference given by Lundbeck
to Centaur over any other party offering substantially similar terms and
conditions.
7.18 Back-Up Supplier.
----------------
(a) Appointment. Centaur, in consultation and collaboration with and with
-----------
the approval of Lundbeck shall establish a back-up supplier for Bulk
Product for commercial use for the Territory, which back-up supplier
may also serve as a back-up supplier for
32
<PAGE>
31, October 1996
outside of the Territory. Centaur shall no later than twenty-four
months after the Date of Execution suggest to Lundbeck such a back-up
supplier to which Lundbeck may agree or disagree. If Lundbeck approves
any such back-up supplier, it shall be consistent with the provisions
of the manufacturing agreement between Centaur and Lundbeck attached
as Annex C hereto. These obligations will apply only to a back-up
supplier who will be producing Bulk Product for the Territory.
(b) Failure to Agree on Back-Up Supplier or Uncertainty of Supply. If
-------------------------------------------------------------
Centaur and Lundbeck cannot agree on a back-up supplier within three
(3) months of Centaur suggesting a back-up supplier to Lundbeck in
accordance with subparagraph (a) immediately above, then Lundbeck,
until they do, if at all, shall have the right, but not the obligation
to manufacture Bulk Product itself as a back-up supplier for the
Territory and in accordance with Section 7.19 below. Additionally,
even if the parties agree on a back-up supplier, Lundbeck may, by
providing eighteen (18) months prior written notice to Centaur become
back-up supplier of Bulk Product for the Territory.
(c) May Choose Back-Up Supplier At Any Time. Should Lundbeck become back-
---------------------------------------
up supplier for the Territory, the parties may still at any time agree
another back-up supplier and then, transfer the back-up supply
obligations from Lundbeck to such other party.
7.19 Lundbeck's Manufacture of Bulk Product. Should Lundbeck determine to
--------------------------------------
become a back-up supplier for the Territory in accordance with Section
7.18, then Lundbeck shall be entitled under Lundbeck's Non-exclusive
License to manufacture up to ten percent (10%) of Lundbeck's (or Lundbeck's
Affiliates and sublicensees) total requirement of Bulk Product for
commercial use (the exact amount to be coordinated by the parties with
sensitivity to Lundbeck's production scheduling). Notwithstanding such
manufacture by Lundbeck, Lundbeck shall, other than for Bulk Product
covered by the provisions of Sections 7.2, 7.20 and 13.9(b) pay to Centaur
with respect to such manufacture, an amount equal to fifty (50) percent of
Centaur's Standard Costs as if such Bulk Product had been manufactured by
Centaur.
7.20 Force Majeure - Manufacture.
---------------------------
(a) Lundbeck Right to Manufacture. Centaur will notify Lundbeck as
-----------------------------
promptly as at all practicable of any Force Majeure event. In the
event Centaur shall, for reasons of Force Majeure (as defined in
Section 14.1 below but without regard to the time periods stated
therein), be unable to supply Lundbeck (or Lundbeck's Affiliates or
sublicensees) with its requirements of Bulk Product for commercial
use, Lundbeck will be free to manufacture or have manufactured Bulk
Product to satisfy its requirements and, if Lundbeck in its sole
discretion determines to do so and if so requested by Centaur,
Centaur's requirements for Bulk Product as well. Lundbeck will pay to
Centaur with respect to such manufacture no part of Centaur's Standard
Costs or SMP.
33
<PAGE>
31, October 1996
(b) Centaur May Recommence Manufacture; If Centaur Does Not Recommence
----------------------------------
Manufacture. Within one hundred twenty days (120) of the first
occurrence of the Force Majeure event (as defined in Section 14 below
but without regard to the time periods stated therein), Centaur will
provide written notice to Lundbeck if it intends to attempt to
recommence manufacture of Bulk Product. If Centaur states that it
will not recommence manufacture, or it is unable to do so within one
year from the end of this one hundred twenty (120) day period, then
Lundbeck may continue to manufacture all of its requirements for Bulk
Product in the Territory. At any time thereafter, should Centaur be
able to recommence manufacture of Bulk Product, it may do so upon one
hundred eighty (180) days prior written notice to Lundbeck and the
parties will resume their prior obligations to supply and purchase of
Bulk Product as from the time that supplies are actually recommenced
using the pricing scheme set out in Section 7.6. Should Centaur
recommence manufacture after such one hundred eighty (180) day prior
written notice and Lundbeck still have in inventory Bulk Product which
it has not sold, then Centaur will purchase such stocks (inventory) of
Bulk Product from Lundbeck at a price equal to fifty (50%) of
Lundbeck's SMP, and Centaur shall have the right to sell and Lundbeck
shall have the obligation to purchase, any Bulk Product so purchased
at 100% of Centaur's SMP.
7.21 Discretionary Lundbeck Supply of Centaur. Should Centaur not be able to
----------------------------------------
manufacture Bulk Product for commercial use for any reason, force majeure
or otherwise it may ask Lundbeck to supply all or part of Centaur's needs
for Bulk Product but Lundbeck, in its sole discretion, may refuse to do so.
If Lundbeck agrees to do so the provisions above relating to Lundbeck's
manufacturing of Bulk Product shall apply.
7.22 Default of Supply Obligation. Failure by either party to comply with any
----------------------------
of its material obligations contained in this Section 7 concerning
Manufacturing and Supply following notice and opportunity to cure, as
hereinafter provided (a "Default") shall not be governed by the provisions
of Section 13.4 below but rather by this Section 7.22. The non-defaulting
party shall give the other party notice specifying the nature of the breach
of this Section 7 and requiring it to cure such breach. If such breach is
not cured within one hundred twenty (120) days after the receipt of such
notice (or one hundred eighty (180) days in event such breach cannot be
reasonably expected to be cured within one hundred twenty (120) days), and
the defaulting party gives notice to the other party of its inability to
cure such breach within a 120-day period and the defaulting party
thereafter uses reasonable efforts to cure such breach as soon as
practicable, but in no event longer than one hundred eighty (180) days),
the notifying party, if the notifying party is Lundbeck, shall have such
rights as set forth in Section 13.9 and if the notifying party is Centaur,
shall be entitled to terminate Lundbeck's rights and/or Centaur's
obligations (the choice being in Centaur's sole discretion) under this
Section 7, in either case by giving notice to that effect to the defaulting
party. Notwithstanding the foregoing, a party shall not have a right to
employ these remedies under this Section 7.22 in the event the other party
pursuant to Section 16 has sought to resolve the dispute for which the
remedy is being sought.
8. MARKETING
34
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31, October 1996
8.1 Lundbeck's Commercialization of Licensed Product. Lundbeck agrees to use
------------------------------------------------
its best reasonable efforts to commercialize Licensed Product in the
Territory and will keep Centaur continuously informed with respect to such
commercialization.
8.2 Price and Reimbursement Approval. Lundbeck shall as promptly as
--------------------------------
practicable but in no event later than six (6) months from having received
Registration, or as soon as legally possible, apply for price and
reimbursement approval in each country in the Territory to the extent that
price and reimbursement approval is mandatory or commonly obtained in each
such country. Lundbeck shall start marketing Licensed Product, on a
country by country basis in the Territory, as promptly as practicable after
the date of Registration and, if such is necessary or commonly obtained,
receipt of price and reimbursement approval, of the Licensed Product in
each country in the Territory. If one year after Lundbeck has received
Approval for Sale in a particular country within the Territory, Lundbeck
has failed to commence sale in such country, then that country will be
deemed excluded from the Territory and all rights to Licensed Product in
that country (including the right to market) will revert to Centaur.
8.3 Product Manager. Lundbeck shall at the latest one (1) year before it
---------------
anticipates the start of the first Marketing Year appoint a product manager
for the Licensed Products who shall have, as one of his/her major
responsibilities, the marketing of Licensed Products and who shall as of
the appointment be the focal person for future contacts between Lundbeck
and Centaur. Centaur will identify a contact person for this function.
Either party may replace such product manager or contact by giving thirty
(30) days prior written notice to the other.
8.4 Marketing Plans. Lundbeck shall three (3) months at the latest before the
---------------
start of the first Marketing Year, and thereafter annually for the duration
of the Agreement on November 30, send to Centaur a copy of its three year
non-binding marketing plan(s) for the Licensed Product in the Territory.
8.5 Packaging. Lundbeck shall package the Licensed Product in a package with
---------
graphics and of a design which are comparable to those used for other
Lundbeck similar products. Unless otherwise prohibited by regulatory
authority, Licensed Product(s) or the packaging in which they are contained
shall bear the label "Distributed or Manufactured (as appropriate) under
license from Centaur Pharmaceuticals, Inc., CA, USA", or any similar
wording as may be mutually agreed upon by the parties.
8.6. Information Regarding Post-Registration Material. Apart from the updating
------------------------------------------------
of Know-How, Confidential Information and Synthesis Data, the parties shall
keep each other reasonably informed about other material concerning
Licensed Products such as without limitation marketing plans, strategic
marketing planning and sales penetration information to be used in the
United States of America or in the Territory, which each party shall be
free to communicate to the other party, including but not limited to any
information which may directly or indirectly affect the marketing success
of Licensed Products in the United States of America or in the Territory,
always provided that the other party directly or through an Affiliate or a
licensee does not develop and/or market any other drug than Licensed
Products for the Primary Indication. The parties shall at least six months
before
35
<PAGE>
31, October 1996
the anticipated first sale of Licensed Products to an Independent Third
Party seek to establish mechanisms in furtherance of such exchange of
information. All material supplied by a party to the other party under this
provision shall be Confidential Information in the hands of the receiving
party; however, notwithstanding Section 10 or any other provision of this
Agreement, both Parties shall be free to communicate to any of its
Affiliates and/or licensees of Licensed Product Information received by the
Parties under this provision, provided such Affiliates and licensees are
under a secrecy obligation which is at least as limiting as Section 10.
8.7 Marketing Costs. Lundbeck shall pay for all costs related to its marketing
---------------
and sale of Licensed Products in the Territory.
8.8 Phase IV Trials. The parties shall at least six months before the
---------------
anticipated first sale of Licensed Products to an Independent Third Party
seek to establish mechanisms in furtherance of procedures and organisations
similar to those set forth in Section 6 in order to coordinate performance
of and collect information relating to Phase IV trials, i.e. trials with
Licensed Products that are conducted after the first US-Registration or the
first Registration have been granted subject to such trials are not being
conducted as a part of the Plan.
9. REPORTING OF ADVERSE REACTIONS
9.1 General. The parties shall regularly agree to arrangements and revisions
-------
hereof to secure the proper reporting of adverse drug reactions under any
legislation that either party's operations with CPI-1189 and/or Licensed
Products are subject to, and such arrangements shall be designed by taking
due consideration of the stage reached in the development or marketing. If
no such arrangements are agreed to, or if arrangements previously agreed to
are terminated by either party with a notice of one (1) month, then the
parties shall apply the procedures set forth in Section 9.2-9.9.
9.2 Definitions. For the purpose of this Article 9, the following definitions
-----------
shall apply:
(a) "Adverse Drug Reactions (ADR)" shall mean an undesirable experience
occurring to a patient treated with Licensed Product, in so far the
experience may be related to the Licensed Product administered and
provided that the experience has occurred simultaneously with or after
the patient has received treatment with the Licensed Product at doses
recommended for use in humans for the prophylaxis, diagnosis or
treatment of disease or the modification of physiological function.
(b) "Serious Adverse Drug Reaction (SADR)" shall mean an ADR, which is
fatal, life-threatening, disabling, incapacitating or which results in
or prolongs hospitalization.
(c) "Unexpected Adverse Drug Reaction (UADR)" shall mean an ADR not listed
in the data sheet filed with the Health Authorities in the Territory
by Lundbeck or, if applicable, an affiliate or sublease of Lundbeck
which sheet contains a product characteristics, including all relevant
safety information.
36
<PAGE>
31, October 1996
(d) "Serious, Unexpected Adverse Drug Reaction (SUADR)" shall mean an ADR,
which is both Serious and Unexpected.
9.3 Report. Within thirty (30) days from any agreed six (6) months period,
------
each party shall provide the other party with a written report giving
relevant information on any ADR having occurred during the preceding six
(6) month period and of other clinical safety and/or toxicity findings
related to Licensed Products, which have come to its attention during the
same period.
9.4 Notice. Each party shall notify the other party of any SADR, UADR and/or
------
SUADR reported to it as having occurred in its territory, within forty-
eight (48) hours from it becoming known to the relevant party that such an
event has occurred. All future details relating to the reported SADR, UADR
and/or SUADR shall be forwarded to the other party after receipt.
9.5 Notice Requirement of Sublicensees. Centaur and Lundbeck will each ensure
----------------------------------
that its respective licensees and sublicensees are obligated to notify
promptly its licensor, whether Centaur or Lundbeck, of any ADR, SADR, UADR
and/or SUADR which has come to said sublicensee's attention. The party who
has received notification of such event shall inform the other of such
event promptly.
9.6 Duty to Inform. Each party will keep the other party informed of any
--------------
action it will take as a consequence of the receipt of such reports, in the
case of SADR, SUADR and/or increased incidence of ADR and/or UADR,
destroying the reputation of Licensed Product), recall of Licensed Product,
etc., which may be anticipated to have an impact on the other party's
activities hereunder.
9.7 Notification. Each party shall be liable for notification to the relevant
------------
health authorities of any kind of ADR, (whether UADR, SADR and/or SUADR)
reported to it by the other and/or third parties, in compliance with
national legal requirements in its territory which relates to such
notification. However, each party undertakes to have any notification
reviewed and approved by the other party before filing, in order for the
parties to assure full compliance between the data stated in the
notification and the parties' central archives. In case the other party can
not legitimately be informed prior to filing with the relevant health
authorities due to time constrains, the relevant party shall simultaneously
with notifying the national authorities, forward to the other party a copy
of the notification filed, indicating that the relevant health authorities
have already been informed.
9.8 Pharmacovigilance Guidelines. The pharmacovigilance guidelines herein
----------------------------
agreed upon, reflect Council Directive 93/39/EEC of June 14, 1993, Chapter
Va and Council Regulation (EEC) No. 2309/93 of July 22, 1993. However,
these guidelines shall, inter partes, apply only as a minimum, being
understood that national pharmacovigilance legislation applicable shall be
abided by and prevail to the extent such national pharmacovigilance
legislation is more restrictive than stated herein.
9.9 Additional Reporting. Clinical findings related to the administration of
--------------------
Licensed Product to pregnant women and/or administered in indications or at
dosages which have not been
37
<PAGE>
31, October 1996
approved by the relevant health authorities, in particular overdoses, shall
be reported without undue delay, i.e. within ten (10) working days from the
relevant party having recorded the incident, whether or not such
administration results in an ADR, SADR, UADR and/or SUADR, and thereby
already has been reported and whether or not the administration took place
as a part of a clinical trial.
9.10 Information, Data, Reports. Information, data and reports exchanged
--------------------------
hereunder shall be forwarded to the other party for the attention of the
Drug Surveillance Unit.
9.11 Confidential Treatment. Information and data exchanged under this Section
----------------------
9 shall be considered as Confidential Information.
9.12 Right of Inspection. Each party hereto shall have the right with a notice
-------------------
of one week to inspect and audit the pharmacovigilance facilities, files,
data, procedures and other pharmacovigilance related matters of the other
party hereto relating to CPI-1189 and Licensed Product, and without
prejudice to any other remedy hereunder the parties shall continuously
jointly discuss the optimizing of all pharmacovigilance related matters.
10. CONFIDENTIALITY
10.1 Survival. Confidential Information supplied by one party to the other as a
--------
result of this Agreement, shall be held in confidence by the receiving
party until December 31, 2020 or ten (10) years after expiration or
termination of this Agreement, whichever period is the longer.
10.2 Non-Confidential Information. This secrecy obligation should not be
----------------------------
considered violated, if and to the extent that Confidential Information:
(a) is disclosed to government agencies for the purpose of obtaining
Approval for Sale or filing or prosecuting patent applications;
(b) must be disclosed to those persons who have a need to know in order to
effectuate the development or, except as regards Synthesis Data,
marketing of Licensed Product, provided that each such person signs an
agreement obligating that person to hold the Confidential Information
and Synthesis Data (when applicable) in confidence to the same extent
as the parties hereto, it being understood that for employees of
either party such obligation may be undertaken in a general
confidentiality statement towards its employer; or
(c) are disclosed pursuant to an order or requirement of a court,
administrative agency or other government body but only, if possible,
after informing the other party in advance of such disclosing and
giving such party the opportunity to object and/or obtain satisfactory
confidential protection.
10.3 Burden of Proof. A party asserting that its obligation of confidentiality
---------------
under this Article does not apply because of an exception to that
obligation shall have the burden of proving
38
<PAGE>
31, October 1996
the exception it asserts.
10.4 Confidentiality Agreement. Confidential Information exchanged under the
-------------------------
Confidentiality Agreement between the parties dated August 29, 1995 shall
be governed by the provisions of this Article and the said Confidentiality
Agreement will remain in force only to the extent consistent with the
obligations stated in this Section 10 (in the event of any inconsistency,
this Section 10 shall govern).
10.5 Supply of Confidential Information. Confidential Information supplied by a
----------------------------------
party to the other shall remain the property of the supplying party. Each
party shall supply Confidential Information to the other to the extent it
is necessary for the other to fulfil its obligations under this Agreement.
11. PATENT PROSECUTION; PATENT AND TRADEMARK INFRINGEMENT; KNOW-HOW;
PROPRIETARY RIGHTS
11.1 Patent Prosecution. Centaur shall continuously use its best reasonable
------------------
efforts in the continued prosecution and maintenance of Licensed Patents
including, without limitation,
(a) taking those actions needed to maintain the pendency of all pending
national phase patent applications within Licensed Patents; to gain
their allowance and grant as issued patents; and to maintain these
issued patents by the timely payment of all taxes and maintenance
fees;
(b) taking those actions needed to maintain the pendency of pending South
African patent application and pending Patent Cooperation Treaty (PCT)
patent application US96/04538 through PCT Chapter I and Chapter II
processing; to convert, no later than 26. September 1997 with written
confirmation hereof to Lundbeck, and in accordance with a written
notice as how to so convert by Centaur to Lundbeck no later than 3.
September 1997, this PCT patent application to any and all necessary
supranational and/or national applications in the countries of the
European Union, Norway, Switzerland, Iceland, Poland, Rumania,
Hungary, Russia, Estonia, Latvia, Lithuania, the Czech Republic,
Croatia and Slovenia (for the purpose of this Section 11.1 such
countries are collectively called "Core Patent Countries") and those
other jurisdictions in the Territory reasonably agreed upon by Centaur
and Lundbeck, and thereafter to maintain the pendency of all these
national phase and supranational phase patent applications; to gain
their allowance and grant as issued patents; and to maintain them by
the timely payment of all taxes and maintenance fees; and
(c) taking those actions needed to obtain any appropriate Supplementary
Protection Certificates for medicinal products or patent term
extensions for medicinal products for Licensed Patents wherever within
the Territory such Certificates or extensions are desirable and
permitted.
(d) Notwithstanding the above, should Centaur believe that prosecution or
maintaining
39
<PAGE>
31, October 1996
Licensed Patents in a given country or countries of the Territory
other than in the Core Patent Countries is not necessary or
commercially advisable, Centaur will give Lundbeck notice of this fact
no less than sixty (60) days before any action for the further
prosecution or maintaining is due. Within thirty (30) days of such
notice Lundbeck may notify Centaur in writing that it wishes to
prosecute and /or maintain such patent(s) on behalf of Centaur.
Lundbeck may then do so and Centaur will cooperate with Lundbeck in
this effort. Lundbeck's costs in so prosecuting and/or maintaining a
patent in a country may be credited, dollar for dollar, against
royalties Lundbeck would otherwise pay on Net Sales of Licensed
Product in that country. Costs of prosecuting and/or maintaining a
patent in one country may not be credited against royalties on Net
Sales of Licensed Product in another country.
(e) Centaur shall within 15 days of Lundbeck's request, advise Lundbeck in
writing of the status of the patent filing, prosecution and/or
maintenance pertinent to Licensed Patents.
11.2 Notice. Each party shall notify the other party promptly in writing of any
------
infringement of Licensed Patents in the Territory or of equivalent patents
for CPI-1189 outside the Territory which becomes known to such party, and
Lundbeck and Centaur shall always use their best reasonable efforts to
avoid Substantial Competition.
11.3 Centaur's Right to Commence Action. Centaur shall have the initial sole
----------------------------------
right to commence an action for infringement against the infringing party
in its own name and/or in the name of Lundbeck (and/or its Affiliates and
sublicensees, if applicable), together with the right to enforce and
collect any judgment thereon, but such decision to be taken in consultation
with Lundbeck. If Centaur elects to exercise the right to commence an
action, then Lundbeck shall provide reasonable assistance in the
prosecution of such action including, but not limited to, consenting to
being joined in such action as a voluntary plaintiff. Centaur shall bear
its own internal and external legal and other costs and expenses associated
with the prosecution of the action. If Centaur brings an action and joins
Lundbeck herein and the court awards costs against Lundbeck, then Centaur
shall reimburse Lundbeck for such costs. Lundbeck shall have the right to
independently retain legal counsel and consultants, at Lundbeck's sole cost
and expense, but such counsel or consultants shall not have the right to
affect Centaur's sole management of the prosecution of the action.
11.4 Monetary Recovery - Centaur Prosecution. Any monetary recovery (whether by
---------------------------------------
settlement or judgment) in connection with an infringement action commenced
by Centaur shall be applied first to reimburse Centaur for its out-of-
pocket expenses (including reasonable attorneys' fees) incurred in
prosecuting such action and of any expenses of Lundbeck involved in the
action, and second, to the extent any monetary recovery represents lost
profits from lost sales of Licensed Product, that profit, less Centaur's
royalty on lost Net Sales will be paid to Lundbeck with the royalty amount
paid to Centaur. Any balance remaining shall be shared in the ratio of
80:20, Centaur:Lundbeck, respectively.
11.5 Lundbeck Prosecution and Monetary Recovery. Should Centaur not initiate
------------------------------------------
appropriate
40
<PAGE>
31, October 1996
and diligent action with respect to any such infringement set out in
Sections 11.3-4 within three (3) months after receiving notice of any
infringement, other than insignificant infringements, or possible
infringement, other than insignificant possible infringements, of a
Licensed Patent, Lundbeck shall have the right, but not the obligation, to
take such action, at its own expense, in its own name and/or in the name of
Centaur with the right to enforce and collect any judgment thereon. If
Lundbeck elects to exercise the right to commence an action, then Centaur
shall provide reasonable assistance in the prosecution of such action
including, but not limited to, consenting to being joined in such action as
a voluntary plaintiff. Lundbeck shall bear its own internal and external
legal and other costs and expenses associated with the prosecution of the
action. If Lundbeck brings an action and joins Centaur herein and the court
awards costs against Centaur, then Lundbeck shall reimburse Centaur for
such costs. and shall reimburse Centaur's costs associated with Lundbeck
having prosecuted the action fully or partly in Centaur's name. Centaur
shall have the right to independently retain legal counsel and consultants,
at Centaur's sole cost and expense, but such counsel or consultants shall
not have the right to affect Lundbeck's sole management of the prosecution
of the action, except in the case where the opponent alleges that the
Licensed Patents are invalid, in which case Centaur may enter such case and
control it to the extent required to defend the validity of Licensed
Patents, and if Centaur is so entering the case then Section 11.6 (i) shall
apply mutatis mutandis. Any monetary recovery (whether by settlement or
judgment) in connection with an infringement action commenced by Lundbeck
shall be applied first to reimburse Lundbeck for its out-of-pocket expenses
(including reasonable attorneys' fees) incurred in prosecuting such action
and of any expenses of Centaur involved in the action, and second, to the
extent any monetary recovery represents lost profits from lost sales of
Licensed Product, that profit, less Centaur's royalty on lost Net Sales
will be paid to Lundbeck with the royalty amount paid to Centaur. Any
balance remaining shall be shared in the ratio of 80:20, Lundbeck:Centaur,
respectively.
11.6 Third Party Claims of Infringement. In the event of a third party claim
----------------------------------
that the exercise of the Lundbeck License with respect to the manufacture,
sale or other use of Licensed Product infringes any patent of such third
party in a country in the Territory (a "Third Party Claim"), Centaur shall
consult with Lundbeck and with respect to such Third Party Claim, Centaur
shall (i) undertake, at Centaur's sole cost and expense, defense of such
Third Party Claim, or (ii) request Lundbeck to undertake such defense, at
Lundbeck's sole cost and expense. Each party will provide such reasonable
assistance as the other needs and from time to time reasonably request.
Neither Lundbeck nor Centaur shall settle any Third Party Claim, including
an agreement to pay Third Party Royalties, without the reasonable approval
of the other party. If Lundbeck shall, at Lundbeck's sole cost and
expense, undertake to defend such Third Party Claim, fifty percent (50 %)
of all such costs and expenses incurred by Lundbeck, including, without
limitation, expert witness and attorneys' fees, and such damages payable to
any third party (other than Third Party Royalties) shall be deducted from
Basic Royalty or Trademark Royalty royalties payable to Centaur hereunder
from any country in the Territory, provided that Centaur as per the Date of
Execution has no knowledge of the Third Party Claim and/or of direct or
indirect arrangement as to the use of CPI-1189 or any right pertaining
thereto with the party so making the Third Party Claim, otherwise all such
costs and expenses may be deducted in the said royalty payments.
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31, October 1996
11.7 Payment of Third Party Royalties. Except as provided in Section 2.4 (d),
--------------------------------
should Lundbeck or its sublicensees or Affiliates obtain one or more
licenses under a patent not licensed hereunder and agree to pay a royalty
in order to make, use or sell a Licensed Product in the Territory
(whether as a condition of settlement of an infringement action, or by
court order or for any other reason) the obtaining of such license must
be reasonably approved by Centaur unless required by court order. The
Basic Royalty or the Trademark Royalty payable to Centaur hereunder shall
be reduced by fifty percent (50%) of the royalties paid to such third
party, unless Centaur as per the Date of Execution has no knowledge of
the Third Party Claim and/or of direct or indirect arrangement as to the
use of CPI-1189 or any right pertaining thereto with the party so making
the Third Party Claim in which case the said royalties shall be reduced
with all the Third Party Royalties.
11.8 Registering Trademark. Lundbeck shall select, and Centaur shall approve,
---------------------
which approval shall not be unreasonably withheld or delayed, at least
one Trademark for possible use on Licensed Products in the Territory and
Centaur shall file applications for registrations and shall maintain such
Trademark(s) in its own name. If Centaur has difficulties or is unable to
register a selected Trademark, Centaur shall promptly advise Lundbeck and
the parties shall discuss either to continue prosecution of the
application, or Centaur shall select another Trademark which Lundbeck
shall approve, which approval shall not be unreasonably withheld or
delayed. All costs and expenses (including attorney's fees) associated
with the filing of applications, prosecution of applications,
registration and maintenance of registrations of Trademark shall be paid
by Centaur. Lundbeck shall assist and cooperate with Centaur in its
filing and prosecuting all Trademark applications and maintaining
Trademark registrations as well as will sign all documents necessary to
carry out filing and prosecuting such applications and maintaining such
registrations, if necessary. Trademarks so selected and registered shall
be the sole and exclusive property of Centaur.
11.9 No Confusingly Similar Marks. Neither Centaur nor Lundbeck shall select,
----------------------------
file an application or register any trademark in the Territory
confusingly similar to that which Lundbeck selects pursuant to the above
paragraph. Lundbeck shall not elect, file an application or register any
trademark outside the Territory confusingly similar to that which
Lundbeck selects pursuant to the above paragraph.
11.10 Quality Control Provision. All Licensed Products offered for sale by
-------------------------
Lundbeck bearing any Trademark licensed hereunder shall be of good
quality. The term "good quality" shall for the purposes of this Section
11.10 mean that the Licensed Product bearing the Trademark shall comply
with the applicable laws and regulations for such products in the
jurisdiction in which such Licensed Products are manufactured or offered
for sale.
12. LIABILITY AND INDEMNIFICATION
12.1 Limitation of Liability - Direct Damages. A party shall be liable to the
----------------------------------------
other for any direct damage or personal injury caused or contributed to
by any action or inaction only if such action or inaction was the result
of negligence.
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31, October 1996
12.2 Limitation of Liability - Indirect Damages. Neither party nor its
------------------------------------------
directors, officers and employees shall be held liable for any incidental,
indirect or consequential damages, including, but not limited to the loss
of opportunity, loss of the use of any data or information supplied
hereunder, loss of revenue or profit in connection with or arising out of
this Agreement, the services performed by either party hereunder or the
existence, furnishing, functioning, or the other party's use of any
information, documentation or services provided pursuant to this Agreement,
even if the party causing the damage have been advised of the possibility
of such damages.
12.3 Centaur Indemnification. Centaur agrees to indemnify, defend and hold
-----------------------
Lundbeck and each of its officers, directors, employees, agents and
consultants (and their respective heirs and assigns) (each a "Lundbeck
Indemnitee") harmless against all costs, claims, suits, expenses (including
reasonable attorneys' fees) and damages in the Territory arising from any
negligence of Centaur and each of Centaur's officers, directors, employees,
agents, sub-contractors and consultants in the manufacture of Bulk Product
and/or Bulk Sustance by Centaur if Centaur has failed to manufacture Bulk
Product and/or Bulk Substance in accordance with the Specifications,
provided that the Lundbeck Indemnitee gives reasonable notice to Centaur of
any such claims or action, tenders the defense of such claim or action to
Centaur and assists Centaur at Centaur's expense in defending such claim or
action and does not compromise or settle such claim or action without
Centaur's prior written consent.
12.4 Lundbeck Indemnification. Lundbeck agrees to indemnify, defend and hold
------------------------
Centaur and each of its officers, directors, employees, agents and
consultants (and their respective heirs and assigns) (each a "Centaur
Indemnitee") harmless against all costs, claims, suits, expenses (including
reasonable attorneys' fees) and damages in the Territory arising from any
negligence of Lundbeck, or any third party for whom Lundbeck is
responsible, (a) in the manufacture of Bulk Product and/or Bulk Substance
by Lundbeck if Lundbeck has failed to manufacture Bulk Product and/or Bulk
Substance in accordance with the Specifications, or (b) in the
distribution, promotion, marketing and/or selling of Licensed Product in
the Territory, provided that the Centaur Indemnitee gives reasonable notice
to Lundbeck of any such claims or action, tenders the defense of such claim
or action to Lundbeck and assists Lundbeck at Lundbeck's expense in
defending such claim or action and does not compromise or settle such claim
or action without Lundbeck's prior written consent.
12.5 Insurance. Both parties hereto shall take out and maintain in full force
---------
and effect for the term of this Agreement insurance with first class
insurers covering their respective liabilities under this Article, and each
party shall without delay upon request from the other party forward copies
of the relevant certificates of such insurance.
13. TERM AND TERMINATION
13.1 Term. The term of this Agreement shall be for a period beginning with the
----
Date of Execution. Unless sooner terminated pursuant to this Section 13,
the term of this Agreement shall end at such time as Lundbeck shall have no
further obligation to make
43
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31, October 1996
payments to Centaur on Net Sales of Licensed Product, but the perpetual
royalty-free license to the Trademark set forth in Section 5.11 shall
continue unaffected unless terminated pursuant to Section 13.2-13.9.
13.2 Lundbeck Right to Terminate on Three or Twelve Months Prior Written Notice.
--------------------------------------------------------------------------
(a) Lundbeck may at any time, prior to obtaining Approval for Sale of a
Licensed Product in the first country in the European Union, terminate
this Agreement for any reason, effective upon three (3) months' prior
written notice. Upon such termination, Lundbeck shall have no further
rights or obligations under this Agreement except (i) for the payment
obligation provided in Section 4.4 above, (ii) for the costs of any
activities under the Plan or other obligations that Lundbeck had
previously committed to (as opposed to generally agreeing to perform
by virtue of adopting the Plan and the commencement of which having
not been finally approved by the Steering Committee), and (iii) that
Lundbeck shall promptly transfer to Centaur all permissions for
clinical trials and Registrations it has made in the Territory and all
Trademarks under which it would have or is marketing Licensed Product.
(b) Lundbeck may at any time, after having obtained Approval for Sale of a
Licensed Product in the first country in the European Union, terminate
this Agreement for any reason, effective upon twelve (12) months'
prior written notice.
(c) Upon termination as set forth in Sub-paragraphs (a) and (b)
immediately above, Lundbeck shall have no further rights or
obligations under this Agreement except that Lundbeck shall promptly
transfer to Centaur all permissions for clinical trials and
Registrations it has made in the Territory and all Trademarks under
which it would have or is marketing Licensed Product To the extent
Lundbeck is not legally able to effect such transfers, with regard to
the Registrations, Lundbeck will transfer to Centaur all materials
submitted to the relevant regulatory agencies as well as back-up
materials to permit Centaur to make its own filings, and with regard
to the Trademarks Lundbeck cease using the Trademarks to market, sell
and promote the Licensed Products. The license granted to Centaur in
Section 2.2 will become worldwide. Lundbeck shall return all
Confidential Information, except for one copy held in Lundbeck's
confidential legal files for the sole purpose of monitoring compliance
with its confidentiality obligations. Lundbeck shall, among other
things, cease using the permission to perform clinical trials in the
Territory, Registrations and Confidential Information.
13.3 Extended Force Majeure Conditions. With the exception of a Force Majeure
---------------------------------
situation involving Centaur's ability to supply Bulk Product, which is
governed by Section 7.20 above, if Force Majeure conditions as set forth in
Section 14 below persist for more than twelve (12) months from the date
when the notice in which a party has pleaded Force Majeure was sent, the
other party will be entitled to terminate this Agreement by written notice
with immediate effect.
13.4 Material Breach. If either party is in material breach of any of its
---------------
obligations under this Agreement (except for breaches of obligations under
Section 7 which are addressed in
44
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31, October 1996
Section 7.22 and Section 13.9 and not hereunder), the other party may give
notice of such breach to the defaulting party and request the latter to
remedy the same. If the party in breach fails to remedy said breach within
thirty (30) days after the date of notice, then this Agreement may be
terminated immediately by written notice of termination given by the
complaining party, providing such notice is given within ninety (90) days
from the expiration of the first thirty (30) day period. If the breach by
its nature cannot be remedied, the notice of breach shall have effect as
notice of termination at the date it is received by defaulting party.
13.5 Insolvency or Bankruptcy. Either party may, in addition to any other
------------------------
remedies available to it by law or in equity, terminate this Agreement by
written notice to the other in the event (i) the other party shall have
become insolvent or bankrupt, or shall have made an assignment for the
benefit of its creditors, or (ii) there shall have been appointed a trustee
or receiver of the other party, or (iii) any case or proceeding shall have
been commenced or some other action taken by or against the other party in
bankruptcy or seeking reorganization, liquidation, dissolution, winding-up,
arrangement, composition or readjustment of its debts or any other relief
under any bankruptcy, insolvency, reorganization or other similar act or
law of any jurisdiction now or hereafter in effect of there shall have been
issued a warrant of attachment, execution, distraint or similar process
against any substantial part of the property of the other party, and any
such event or action (except where a party voluntarily takes such actions
(e.g., where a party makes a bankruptcy filing)) shall have continued for
-----
ninety (90) days undismissed, unbounded and /or undischarged (alternatively
a "Bankruptcy").
13.6 Certain Consequences of Bankruptcy. In addition to the rights provided in
----------------------------------
Section 13.5 above, in the event of a Lundbeck Bankruptcy, all rights will
revert to Centaur and the parties undertake to enact an orderly transition
to do so including, without limitation, that Lundbeck shall promptly
transfer to Centaur all Registrations it has made in the Territory and all
Trademarks under which it would have or is marketing Licensed Product. To
the extent Lundbeck is not legally able to effect such transfers, with
regard to the Registrations, Lundbeck will transfer to Centaur all
materials submitted to the relevant regulatory agencies as well as back-up
materials to permit Centaur to make its own filings, and with regard to the
Trademarks, Lundbeck will license Centaur exclusively on a royalty-free
basis to use the Trademarks to market, sell and promote the Licensed
Products on a world-wide basis.
13.7 Certain Consequences of an Acquisition of Centaur. Should a multi-national
-------------------------------------------------
pharmaceutical or diagnostic company acquire more than 50% of the
outstanding stock of Centaur entitled to vote for directors and there are
still non-clinical, clinical or other activities ongoing under the Plan,
then Lundbeck may, at its sole option, request that it have another
partner for these trials, in which case Centaur will cooperate and consult
with Lundbeck and use its best reasonable efforts to find such other
partner.
13.8 Rights Upon and Effect of Termination of Agreement.
--------------------------------------------------
(a) Existing Obligations. Upon termination of this Agreement for any
--------------------
reason, nothing herein shall be construed to release either party from
any obligation that matured
45
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31, October 1996
prior to the effective date of such termination.
(b) Surviving Provisions. Upon termination of this Agreement the
--------------------
following provisions in addition to those provisions which survive
according to their own terms, such as without limitation Section 5.11
and Section 10, shall survive: Sections 1, 9, 16 and 17.8.
(c) Sale of Stocks (Inventory). Upon termination of this Agreement under
--------------------------
Section 13.2 or under Section 13.3, 13.4 or 13.5 by Centaur, Centaur
shall have the right to buy any stocks of Licensed Products remaining
unsold (if produced by Lundbeck, at Lundbeck's production costs or if
purchased by Lundbeck, at Lundbeck's purchase price) and/or any stocks
of CPI-1189 (if produced by Lundbeck, at Lundbeck's production costs
or if purchased by Lundbeck, at Lundbeck's purchase price) in the
possession of Lundbeck after the effective date of termination. In
the event Centaur does not wish to exercise the right to buy back
Licensed Products, and/or CPI-1189, Lundbeck shall have the right to
use the remaining CPI-1189 for the manufacture of Licensed Products
and sell out the remaining stock of Licensed Products within a
reasonable period of time.
(d) Termination by Centaur or Lundbeck Voluntary Termination. At the
--------------------------------------------------------
effective date of termination by Centaur for a material breach by
Lundbeck or if Lundbeck determines to terminate this Agreement in
accordance with Section 13.2 above, in both cases the provisions of
Section 13.2 will apply and, in addition, Centaur shall have the
royalty-free, non-exclusive, worldwide right to use Confidential
Information (Know How, Information and Synthesis Data) owned and
controlled by Lundbeck. Lundbeck will allow any reference to the
Registrations obtained.
13.9 Special Provisions Relating to Centaur Default of Section 7 Obligations and
---------------------------------------------------------------------------
Bankruptcy and Supply of Bulk Product. Should there be a Centaur Default
-------------------------------------
(as defined in Section 7.22) of its material obligations under Section 7,
except for Force Majeure in which case Section 7.20 applies, or a Centaur
Bankruptcy (as defined above in Section 13.5), then Lundbeck has the
following rights.
(a) If a Licensed Product exists (meaning that a Licensed Product has
obtained regulatory approval, but not necessarily reimbursement
approval, in any country in the Territory or in the United States),
then Lundbeck has the right to (i) manufacture all of its requirements
of Bulk Product in the Territory, and (ii) may establish a back-up
manufacturer of its choosing. Lundbeck will continue to pay royalties
on Net Sales of Licensed Product to Centaur, but will not be required
to make any payments to Centaur related to supply of Bulk Product
maintaining full and unchanged access and license to Centaur
Technology and to regularly receive Centaur Know-How; or
(b) If a Licensed Product does not exist (using the same meaning of
"exist" as subparagraph (a) above) and non-clinical or clinical
development is still necessary, then Lundbeck (i) may perform the non-
clinical and clinical activities under the Plan that remain to be
done, crediting one half of those costs plus interest as set forth in
46
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31, October 1996
Section 6.10 against royalties it will owe Centaur, (ii) will have no
obligation to make any further Annual Fee payments under Section 4.3
above, (iii) will have no obligation to make any further payments
under Section 4.1 above, (i) may manufacture all of its requirements
of Bulk Product for the Territory, and (v) may establish a back-up
manufacturer of its choosing. Lundbeck will continue to pay royalties
on Net Sales of Licensed Product to Centaur, but will not be required
to make any payments to Centaur related to supply of Bulk Product
maintaining full and unchanged access and license to Centaur
Technology; or
(c) Lundbeck may terminate this Agreement by written notice to Centaur to
take effect forthwith.
14. FORCE MAJEURE
14.1 "Force Majeure" when used in this Agreement means any default or delay
(including, without limitation, an inability to supply Bulk Product and/or
Licensed Product) attributable to any act of God, earthquake, flood, fire,
explosion, destruction of machines, of factories, of substantial
installations, strike, lockout, go-slows, occupation of factories and
premises, work stoppages, labor dispute, casualty or accident, war,
revolution, civil commotion, act of public enemies, blockage or embargo,
injunction, law, order, proclamation, regulation, ordinance, demand or
requirement of any government or subdivision, authority (including, without
limitation, drug regulatory authorities) or representative of any such
government, or any other cause beyond the reasonable control of such party.
Neither party shall be liable to the other for loss or damages or shall
have any right to terminate this Agreement for Force Majeure, if the party
affected shall give prompt notice of any such cause to the other party.
The party providing such notice shall thereupon be excused from such of
its obligations hereunder as it is so disabled and for thirty (30) days
thereafter provided, however, that Force Majeure events relating to Section
7 will be governed by the provisions of Section 7.20 and events relating to
Section 13 will be governed by Section 13.3. Notwithstanding the
foregoing, nothing in this Section shall excuse or suspend the obligation
to make any payment due hereunder in the manner and time provided.
15. WARRANTIES AND REPRESENTATIONS
15.1 General Representations. Each party hereby represents and warrants to the
-----------------------
other as follows:
(a) Duly Organized. It is a corporation duly organized, validly existing
--------------
and is in good standing under the laws of the jurisdiction of its
incorporation, is qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which the conduct of its
business or the ownership of its properties requires such
qualification and has all requisite power and authority, corporate or
otherwise, to conduct its business as now being conducted, to own,
lease and operate its properties and to execute, deliver and perform
this Agreement.
47
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31, October 1996
(b) Due Execution. The execution, delivery and performance by it of this
-------------
Agreement (including the grant of the Lundbeck License by Centaur and
of the Centaur License by Lundbeck) have been duly authorized by all
necessary corporate action and do not and will not (i) require any
consent or approval of its stockholders, (ii) violate any provision of
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to it
or any provision of its charter or by-laws, or (iii) result in a
breach of or constitute a default under any agreement, mortgage,
lease, license, permit, patent or other instrument or obligation to
which it is a party or by which it or its assets may be bound or
affected.
(c) No Third Party Approval. No authorization, consent, approval,
-----------------------
license, exemption of, or filing or registration with, any court or
governmental authority or regulatory body is required for the due
execution, delivery or performance by it of this Agreement (including
the grant of the Lundbeck License by Centaur and of the Centaur
License by Lundbeck) as it relates to CPI-1189.
(d) Binding Agreement. This Agreement is a legal, valid and binding
-----------------
obligation of such party, enforceable against it in accordance with
its terms and conditions, except as may be limited by bankruptcy laws
or other laws affecting the rights of creditors generally, and rules
of law governing equitable remedies. Each is not under any obligation
to any person, contractual or otherwise, that is conflicting or
inconsistent in any respect with the terms of this Agreement
(including the grant of the Lundbeck License by Centaur and of the
Centaur License by Lundbeck) or that would impede the diligent and
complete fulfilment of its obligations hereunder.
(e) Governmental Status. It is not debarred or suspended from receiving
-------------------
contracts from the United States or Danish government or other
governmental authority or agency.
(f) Full Disclosure. Each party has disclosed to the other in good faith
---------------
any and all material information relevant to the subject matter of
this Agreement to such party's ability to observe and perform its
obligations hereunder.
15.2 Centaur Representations. Centaur represents and warrants to Lundbeck that:
-----------------------
(a) as of the Date of Execution, to the best of Centaur's knowledge and
belief, Centaur is the sole owner of the entire right, title and
interest in and to those Licensed Patents which include a Valid Claim
for CPI-1189 and the same are free of any liens, encumbrances,
restrictions, licenses and other legal or equitable claims of any kind
or nature;
(b) as of the Date of Execution, to the best of Centaur's knowledge and
belief, Centaur is the sole owner or licensee of the entire right,
title and interest in the part of the Centaur Technology not being
Licensed Patents which include a Valid Claim for CPI-1189 and the same
are free of any liens, encumbrances, restrictions, licenses and other
legal or equitable claims of any kind or nature;
48
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31, October 1996
(c) it has the right to grant the Lundbeck License;
(d) has not granted any license or sublicense of Centaur Technology for
CPI-1189 in the Primary Indication;
(e) as of the Date of Execution, to the best of Centaur's knowledge and
belief, there are no third party rights, licenses or patents, other
than the Lundbeck License, which is necessary for Lundbeck's use and
enjoyment of the Lundbeck License; and
(f) as of the Date of Execution Centaur has initiated no plans for and has
filed no IND for an Additional Compound.
15.3 Lundbeck Representations. Lundbeck represents and warrants to Centaur
------------------------
that:
(a) Lundbeck is acknowledged by the authorities in parts of the Territory
as an approved manufacturer and marketer of drugs, and is as such
under the inspection of the competent authorities;
(b) Lundbeck, to the best of its knowledge, has been granted every
reasonable assistance by Centaur in any inquiry concerning this
Agreement and its subject matter; and
(c) it has the right to grant the Lundbeck License;
15.4 Warranty Disclaimers. Nothing in this Agreement shall be construed as:
--------------------
(a) a warranty or representation by Centaur as to the validity or scope of
the Centaur Technology, other than as specifically provided to the
contrary herein;
(b) a warranty or representation that anything made, used, sold or
otherwise disposed of under this Agreement is or will be free from
infringement of patents, copyrights and trademarks of third parties;
(c) an obligation to bring or prosecute actions or suits against third
parties for infringement;
(d) conferring rights to use in advertising, publicity or otherwise any
trademark or the name of Centaur or Lundbeck;
(e) granting by implication, estoppel or otherwise any licenses under (i)
patents of Centaur other than the Centaur Patents, and (ii) the
Centaur Technology outside of the Primary Indication and/or outside of
the Territory;
(f) any representation by either party, express or implied, other than as
specifically set forth herein, including representations of
merchantability or fitness for a particular purpose, or that the use
of Licensed Product will not infringe any third party patent,
49
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31, October 1996
copyright, trademark or other rights.
16. RESOLUTION OF DISPUTES
16.1 General. In acknowledgment of the benefit to both parties to resolve
-------
differences quickly and efficiently with as little disruption of each
parties' business as possible, the parties agree to abide by the following
provisions in connection with any dispute that should arise between the
parties with respect to any matter relating to this Agreement, including
any questions regarding the existence, validity or termination thereof.
16.2 Conciliation. In the event that any controversy or claim shall arise
------------
under, out of, in connection with, or relating to this Agreement or the
breach thereof, the party initiating such controversy or making such claim
shall provide to the other party a written notice containing a brief and
concise statement of the initiating party's claims, together with relevant
facts supporting them. During a period of sixty (60) days, or such longer
period as may be mutually agreed upon in writing by the parties, following
the date of said notice, the parties shall make good faith efforts to
settle the dispute. Such efforts will include, but shall not be limited
to, full presentation of both parties' claims and responses, with or
without the assistance of counsel, before the President of Lundbeck and the
President of Centaur, or an equivalent executive if such positions do not
exist in the respective companies.
16.3 Arbitration.
-----------
(a) Selection of Arbitrators. In the event that the parties are unable to
------------------------
resolve a dispute in accordance with Section 16.2 above, either party
may submit the matter to binding arbitration in accordance with the
procedures set forth below. If a party intends to commence
arbitration to resolve a dispute, such party shall provide written
notice to the other party of such intention, and shall designate one
arbitrator. Within ten (10) days of receipt of such notice, the other
party shall designate in writing a second arbitrator. The two
arbitrators so designated shall, within ten (10) days thereafter,
designate a third arbitrator. The arbitrators so designated shall not
be employees, consultants, officers, directors or shareholders of or
otherwise associated with either party or an Affiliate or sublicensee
of either party. Except as modified by the provisions of this Section
16, the arbitration shall be conducted in accordance with the then
rules of commercial arbitration of and before the American Arbitration
Association in Toronto, Canada. The language of such arbitration shall
be English and all notices and written submissions provided in such
proceeding shall be in English.
(b) Written Proposals. Within thirty (30) days after the designation of
-----------------
the third arbitrator, the arbitrators and the parties shall meet at
which time each party shall be required to set forth in writing the
issues which need to be resolved and a proposed ruling on each such
issue. Written submissions shall be limited to 30 pages to text (not
including exhibits which may include copies of agreements, or extracts
from books and records, but including testimony affidavits).
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31, October 1996
(c) Hearing. The arbitrators shall set a date for a hearing, which shall
-------
be no later than thirty (30) days after the submission of written
proposals, to discuss each of the issues identified by the parties.
Each party shall have the right to be represented by counsel. The
arbitrators shall have sole discretion with regard to the
admissibility of any evidence. Unless otherwise determined by
unanimous agreement of the arbitrators the hearing shall be concluded
in one (1) day unless the arbitrators conclude (by majority vote or
greater) that the hearing should be extended to avoid working an
injustice to one of the parties. The arbitrators shall have the right
to grant a temporary injunction or a preliminary injunction for good
cause shown, upon the filing of a petition for such relief by a party
to this Agreement, the arbitrators deciding on the security, if any,
to be made by the party seeking such relief for any unwarranted
injunction
(d) Ruling. The arbitrators shall use their best efforts to rule on each
------
disputed issue within thirty (30) days after the completion of the
hearings described in subsection (c) above. The arbitrators shall, by
majority decision, select the ruling proposed by one of the parties as
the arbitrators' ruling. The arbitrators' ruling shall be, in the
absence of fraud or manifest error, binding and conclusive upon both
parties and may be enforced in a court of competent jurisdiction. The
arbitrators may not award punitive or exemplary damages.
(e) Arbitration Costs. The arbitrators shall be paid a reasonable fee
-----------------
plus expenses, which fees and expenses shall be paid as designated by
the arbitrators or if the arbitrators do not so designate such costs
shall be shared equally by the parties.
(f) Attorneys' Fees/Costs. If any arbitration, litigation, or other legal
---------------------
proceeding occurs between the Parties relating to this Agreement, the
prevailing party shall be entitled to recover (in addition to any
other relief awarded or granted) its reasonable costs and expenses,
including attorneys' fees, incurred in the proceeding.
17. MISCELLANEOUS PROVISIONS
17.1 Assignability and Sublicenses. This Agreement shall not be assignable or
-----------------------------
transferable, in whole or in part, by either party without the prior
written consent of the other. No assignment or sublicense agreement shall
relieve any party of responsibility for the performance of any accrued
obligation which such party has then hereunder.
17.2 Publications. The parties to this Agreement are free to make presentations
------------
and publications relating to the results of any activities conducted
pursuant to this Agreement prior to marketing of Licensed Product, but with
due regard to the protection of Confidential Information and Licensed
Patents hereunder and always provided that the Steering Committee has
approved the scientific content of any such presentation or publication.
For that purpose, the parties agree to provide the party's Project Leader
and each member of the Steering Committee with a copy of any proposed
written presentation,
51
<PAGE>
31, October 1996
abstract and/or publication relating to the results of such activities at
least thirty (30) days prior to submission thereof for publication or
presentation thereof. Each party will take due note of any comment by the
other party and shall respect the response of the Steering Committee.
17.3 Public Announcements. Each party agrees that, except as may be required by
--------------------
law, it shall not disclose the existence, substance or details of this
Agreement without the prior written consent of the other party. In cases
in which disclosure is proposed or required by law, the disclosing party,
prior to such disclosure, will notify the non-disclosing party of the
contents of the proposed disclosure. The non-disclosing party shall have
the right to make reasonable changes to the disclosure to protect its
interests. The disclosing party shall not unreasonably refuse to include
such changes in its disclosure. Notwithstanding the above, any publicity,
press release or announcement relating to the Licensed Product issued by
Lundbeck shall mention Centaur to the extent reasonably feasible.
17.4 Notices. All notices hereunder shall be in writing and shall be delivered
-------
personally or mailed by registered or certified (air) mail (return receipt
requested), postage prepaid, or by internationally recognized courier, or
by facsimile or delivery service for which receipt is given, to the
following addresses of the respective parties, with a copy to the
addressee's General Counsel:
If to Centaur: Centaur Pharmaceuticals, Inc.
484 Oakmead Parkway
Sunnyvale, CA 94086
United States of America
Attention: President
If to Lundbeck: H. Lundbeck A/S
Ottiliavej 9
DK-2500 Copenhagen-Valby
Denmark
Attention: President
Such notice shall be effective upon receipt.
17.5 Entire Agreement and Modifications. This Agreement constitutes the entire
----------------------------------
agreement between the parties concerning the subject matter hereof and
supersedes all written or oral prior agreements or understandings with
respect to the subject matter hereof. No variation or modification of the
terms of this Agreement, nor any waiver of any of the terms or provisions
hereof, shall be valid unless in writing and signed by an authorized
representative of each party or by the party against whom enforcement
thereof may be sought.
17.6 Headings. The headings contained in this Agreement are for convenience and
--------
reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
17.7 Severability. The provisions of this Agreement are separate and
------------
divisible, and the
52
<PAGE>
31, October 1996
invalidity or unenforceability of any part shall not affect the validity or
enforceability of any remaining part or parts, all of which shall remain in
full force and effect. However, the parties agree to substitute, any
invalid or unenforceable provision, by a valid and enforceable provision
which achieves, to the greatest extent possible, the financial balance and
mutual understanding already established between the parties.
17.8 Governing Law. This Agreement shall be construed, interpreted and governed
-------------
by the laws of the Province of Ontario and of the Commonwealth of Canada
without regard to its conflict of law rules. Any issue of law pertaining to
one or more Licensed Patents shall be construed, interpreted and governed
by the law of the jurisdiction granting such Licensed Patent.
17.9 Public Notification and Approval.
--------------------------------
(a) Both parties may notify any relevant public national and/or supra-
national entity, including the competition authorities of the United
States of America, the European Union and of the European Economic
Area, of the existence of this Agreement to comply with notification
procedures and/or seek application of approval of this Agreement under
relevant competition law, and such notifying party shall keep the
other party informed about any such notification and other
communication with the said public entities after such notification.
If none of the parties have informed the other party of its intention
of notifying this Agreement and/or seeking application of approval of
this Agreement within 30 days after the Date of Execution both parties
shall be regarded as having agreed not to notify this Agreement to
supra-national authorities. Both party shall be solely responsible
for notifications to the national public entities in its own
country/state, and the party having not duly notified the national
public entities in its own country/state shall hold the other party
harmless for any claim, fine or any other sanctions from such national
public entities.
(b) The notifying party shall decide at its own discretion how the form of
notification/approval to be chosen, including, but not limited to
letter of comfort or formal decision, but the other party may in
parallel apply another form of notification after having duly
consulted the first party. Should a party before making any such
notification wish to informally consult or otherwise discuss with the
said public entities this Agreement and the notification to be made,
the notifying party shall inform the other party before any such
discussions are commenced.
(c) Subject to one party intending to notify the said public entities the
other party shall provide without any undue delay all financial and
other information about the non-notifying party's company and the
group of companies that the non-notifying party is affiliated with and
relevant market information for the Licensed Product reasonably
required by the notifying party or required by the public entities to
which notification is made enabling the notifying party to duly make
the notification or redress inquiries from the said public entities,
but the non-notifying party may elect to communicate such information
to the public authorities directly. The notifying party shall reveal
Confidential Information only to such public entities to the extent
necessary for the notification to the said public entities and shall
do its utmost to
53
<PAGE>
31, October 1996
impose confidentiality obligations relating to the Confidential
Information that are as least as limiting on such public entity as
those obligations imposed on the notifying party hereunder.
(d) Should the final decision from the said public entities, or the
final decision from any body to which the public entities' decision
may be appealed, decide not to approve this Agreement the parties
agree to substitute in good faith without delay any not so approved
provision by a valid and enforceable arrangement which achieves to
the greatest extent possible the mutual understanding already
established between the parties, but the invalidity or
unenforceability of any part shall not effect the validity or
enforceability of remaining part or parts of this Agreement all of
which shall remain in full force and effect.
18. KNOW HOW AND INFORMATION
18.1. Centaur material. Information, Know How and Synthesis Data supplied by
----------------
Centaur to Lundbeck are the property of Centaur in whatever shape
Information, Know How and Synthesis Data are available, both original and
copy. Centaur shall provide all Know How, Information and Synthesis Data
as licensed in accordance with this Agreement during the entire term of
this Agreement within a reasonable time after such is available.
18.2 Lundbeck material. Information, Know How and Synthesis Data supplied by
-----------------
Lundbeck to Centaur are the property of Lundbeck in whatever shape
Information, Know How and Synthesis Data are available, both original and
copy. Lundbeck shall provide all Know How, Information and Synthesis Data
as licensed in accordance with this Agreement during the entire term of
this Agreement within a reasonable time after such is available.
54
<PAGE>
31, October 1996
This Agreement has been made in duplicate and signed by the parties hereto.
Copenhagen, Sunnyvale, CA
H. Lundbeck A/S Centaur Pharmaceuticals, Inc.
/s/ Erik Sprunk-Jansen /s/ Brian Frenzel
- ---------------------- -----------------
Erik Sprunk-Jansen Brian Frenzel
President President
/s/ Eva Steiness
- ----------------
Eva Steiness
Executive Vice President
/s/ Ole Antonsen
- ----------------
Ole Antonsen
Senior Vice President
Date: 31.10.96 Date: October 31, 1996
----------- -------------------
ANNEXES:
ANNEX A: Patents and Patent Applications
ANNEX B: Development Plan
ANNEX C: Manufacturing Agreement
55
<PAGE>
31, October 1996
ANNEX A
PATENTS AND PATENT APPLICATIONS
to Development, Patent and Trademark/Know-How Licensing and Supply Agreement -
CPI-1189 between H. Lundbeck A/S and Centaur Pharmaceuticals, Inc.
56
<PAGE>
CONFIDENTIAL
Annex A
Lundbeck/Centaur Patents and Patent Applications
<TABLE>
<CAPTION>
Docket Application
Number Title File Date Country Number Status
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
[*]
- -----------------------------------------------------------------------------------------------------------------------------------
008MA Benzamides for Neurodegenerative Disorder Treatment 4/1/96 Morocco PV.24193 Pending
- -----------------------------------------------------------------------------------------------------------------------------------
[*]
- -----------------------------------------------------------------------------------------------------------------------------------
008ZA Benzamides for Neurodegenerative Disorder Treatment South Africa N/A Pending
- -----------------------------------------------------------------------------------------------------------------------------------
009 Pharm Comp'ns of Acetoamidobenzamide Cpds for 4/3/95 United States 08/415,694 Pending
for Neurodegenerative Disorders of America
- -----------------------------------------------------------------------------------------------------------------------------------
010 Nitro- and Aminabenzamble Compounds for 4/3/95 United States 08/415,248 Pending
for Neurodegenerative Disorders of America
- -----------------------------------------------------------------------------------------------------------------------------------
011 Pharm Comp'ns of Nitro- & Aminabenzamble Cpds 4/3/95 United States 08/415,847 Allowed
for Neurodegerative Disorders of America
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
31, October 1996
ANNEX B
DEVELOPMENT PLAN
to Development, Patent and Trademark/Know-How Licensing and Supply Agreement -
CPI-1189 between H. Lundbeck A/S and Centaur Pharmaceuticals, Inc.
Major countries in the European Union identified according to Section 6.5 A:
France, Italy, Germany, Spain and United Kingdom.
Development Bar Chart:
The following Gantt charts outline the development plan for CPI-1189.
Solid black bars represent tasks performed or to be performed by Centaur.
Solid white bars represent tasks to be performed by Lundbeck.
Shaded bars represent tasks to be performed jointly.
Stripped bars represent tasks for which responsibility will be determined
by the steering committee.
[DIAGRAMS REPRESENTING DEVELOPMENT PLAN OMITTED]
[*]
57
<PAGE>
31, October 1996
ANNEX C
MANUFACTURING AGREEMENT (INCLUDING TENTATIVE QUALITY SPECIFICATIONS)
to Development, Patent and Trademark/Know-How Licensing and Supply Agreement -
CPI-1189 between H. Lundbeck A/S and Centaur Pharmaceuticals, Inc.
59
<PAGE>
DRAFT
AGREEMENT
concerning
Manufacture and Analysis under Contract
between
Centaur Pharmaceuticals Inc.
484 Oakmead Parkway,
Sunnyvale, CA 94086
USA
(hereinafter referred to as "CENTAUR")
and
H. Lundbeck A/S
Ottiliavej 9
DK-2500 Valby
(hereinafter referred to as "LUNDBECK")
1. OBJECT
1.1 As CENTAUR is manufacturing pharmaceutical bulk Products (hereinafter
referred to as Products) of which LUNDBECK is holder of the Marketing
Approval, the relations between LUNDBECK and CENTAUR have to be
established according to the instructions given in "The rules governing
medicinal products in the European Community, Volume IV, Guide to Good
Manufacturing Practice for medicinal products". This Agreement concerns
manufacture and analytical control of Products mentioned in appendix I.
2. RELATION TO AUTHORITIES
2.1 CENTAUR certifies that it is acknowledged by the "Food and Drug
Administration" in USA as an approved manufacturer of drugs and is as such
under the inspection of the same authorities.
Page 1/8
<PAGE>
2.2 LUNDBECK bears towards the authorities in ... (hereinafter referred to
as the Territory) the responsibility for ensuring that the
specifications, the manufacturing processes established by CENTAUR
(hereinafter referred to as Specifications) are adequate in all respects
as required by the health authorities in the Territory. CENTAUR shall at
all times supply LUNDBECK with the current manufacturing procedures and
analytical procedures. The procedures do not enter this agreement and
the agreement will not be updated due to new version of manufacturing
procedures.
3 MANUFACTURE
3.1 CENTAUR bears the responsibility towards LUNDBECK that Products comply
with the Specifications and that the conditions for storage and
transportation until delivery of the Products to LUNDBECK are fulfilled.
CENTAUR is furthermore responsible to LUNDBECK for the manufacture and
the analytical control are in compliance with the GMP-rules referred to
in item 1.
3.2 CENTAUR shall ensure that all materials delivered to it are correct and
according to Specifications for the Products.
3.3 LUNDBECK has the right to obtain sufficient information, including full
details on the manufacturing processes and analytical procedures, from
CENTAUR to enable it to evaluate CENTAUR's ability to successfully
accomplish the work required. LUNDBECK has the right to evaluate
CENTAUR's ability by visiting CENTAUR's premises upon announcement
during the term of this Agreement for inspection of facilities,
equipment, procedures and personnel.
3.4 Any significant change in manufacturing technical arrangements shall be
agreed upon by both parties and shall be set out in writing. Such change
shall be made in such a way that it does not cause Products to fail to
meet the specifications or adversely affect them in any other way.
3.5 CENTAUR will not move the production to any other site than the site
stated in Appendix I or to a third party without LUNDBECK's approval.
CENTAUR shall permit LUNDBECK to inspect such new production site
Page 2/8
<PAGE>
prior to moving any production process. Manufacturer shall not
delegate, assign, or subcontract any of its rights and obligations
hereunder to any third party unless LUNDBECK's written approval has been
obtained.
3.6 LUNDBECK requires that reworking not covered by previously agreed to
procedures shall be authorized by LUNDBECK's Quality Control Department
before the reworking procedure is initiated.
4. DOCUMENTATION
4.1 CENTAUR shall prepare a "Batch Record" for each batch of Products
delivered to LUNDBECK. The Batch Record shall include the following:
- Production and packaging site
- Name of preparation and batch number;
- full manufacturing details;
- the batch number and quantity of each starting material used in the
formulation;
- a record of the in-process control followed and of the results
obtained;
- signature of the person(s) responsible for the manufacturing operation
and the date of the signature;
- certificates of analytical records for each batch,
4.2 The Batch Record shall be approved by CENTAUR, and for each batch
LUNDBECK requires such Batch Record sent to LUNDBECK's Quality Control
department.
4.3 The analytical records shall state the results for each analysis
performed to ensure that the starting materials and the Products comply
with the Specifications. The said certificates shall be approved by
CENTAUR's Quality Control Department, and shall be submitted to
LUNDBECK. Supporting analytical data will be available at CENTAUR for
inspection by LUNDBECK, or will be submitted to LUNDBECK as agreed to
between the Parties.
5 RETENTION OF REFERENCE SAMPLES AND DOCUMENTATION
5.1 Batch manufacturing records and analytical records as well as reference
samples of starting materials and finished Product shall be kept by
CENTAUR for at least
Page 3/8
<PAGE>
one year after expiry of Product. Likewise, CENTAUR shall be monitoring
the stability of the Product and supply LUNDBECK with the results
thereof upon request.
6 RELEASE
6.1 LUNDBECK is responsible for the release of Products in the Territory.
CENTAUR must not deliver Products to LUNDBECK before LUNDBECK's release
in writing is received.
6.2 Before releasing the Products to the Territory LUNDBECK will ensure,
that the Products comply with the Specifications, by carrying out
analysis of each batch and by reviewing the Batch Record and the
analytical Records provided by CENTAUR.
7 CONTACT PERSONS
7.1 The parties have appointed the following persons as responsible for the
drawing up of technical arrangements for the manufacture, packaging and
the quality control of the Products:
For LUNDBECK: Mrs. Tove Friche Nielsen,
-------------------------
Director of Quality Assurance
-----------------------------
H. Lundbeck A/S, Valby.
For CENTAUR: Ms. Claire Qwan, Quality Assurance Officer
------------------------------------------
Centaur Pharmaceuticals INC., Sunnyvale
8 COMPLAINTS
8.1 CENTAUR shall be kept informed by LUNDBECK about all complaint LUNDBECK
may receive concerning the quality of the Products and vice versa. For
the entire shelf-life of the Products CENTAUR undertakes to answer all
enquiries by LUNDBECK regarding Products and fully assist and cooperate
with LUNDBECK in relation to any complaints about the quality of
Products.
Page 4/8
<PAGE>
9 MISCELLANEOUS
9.1 Terms and conditions for the price and supply of the Products and
the term of the contactual relationship for the Products have
been agreed by the Parties in a separate Supply Agreement.
9.2 This Agreement, is written in two original copies, one for each
party, and is valid as long as LUNDBECK continues purchasing the
Products from CENTAUR.
Copenhagen,
H. LUNDBECK A/S
Vice President
Regulatory Affairs and
Quality Assurance
------------------------- ----------------- -------
Name Jacques Mascaro Title Date
Sunnyvale,
CENTAUR PHARMACEUTICALS INC.
------------------------- ----------------- -------
Name Title Date
Page 5/8
<PAGE>
APPENDIX I
To Agreement between
Centaur Pharmaceuticals INC. and H. Lundbeck A/S dated 1996-10-11
concerning Manufacture and Analysis under Contract
Product: [to be completed]/R/ Tablets
- --------
Delivered as: Bulk
- -------------
Production site: [to be completed]
- ----------------
Page 6/8
<PAGE>
<TABLE>
<S> <C>
Solubility:
Average concentration=SD
------------------------
Water pH 6.0:
Ethanol: [*]
Ethyl acetate
Phosphate buffer pH 2.0
Specifications:
Primary Chemical Name
Other Chemical Name
Other Name [*]
Chemical Formula
Molecular Weight
Melting Point
Preliminary specification on particle
size distribution
(mean diameter, laser light diffraction):
d 10%, more than:
d 50%, interval: [*]
d 95%, less than:
Attributes:
Appearance
Water Content
Identity by FTTR [*]
by Ptoton NMR
Purity by HPLC
Melting Point
Heavy Metals as Lead
Elemental Analysis Target Percentages=SD
---------------------
Carbon
Hydrogen [*]
Nitrogen
Oxygen
</TABLE>
Page 7/8
<PAGE>
Copenhagen,
H. LUNDBECK A/S
Vice President
Regulatory Affairs and
Quality Assurance
- --------------------- ------------------------- ----------------------
Name Jacques Mascaro Title Date
Sunnyvale,
CENTAUR PHARMACEUTICALS INC.
- --------------------- ------------------------- ----------------------
Name Title Date
Page 8/8
<PAGE>
Centaur Pharmaceuticals, Inc.
484, Oakmead Parkway
Sunnyvale, CA 94086
USA
H. Lundbeck A/S
9, Ottiliavej
DK-2500 Copenhagen-Valby
Denmark 31 October 1996
Gentlemen:
This letter will serve to verify that the compound known as CPI-1189 referred to
in the "Development, Patent and Trademark/Know-How Licensing and Supply
Agreement - CPI-1189" between the parties to this letter and dated the same date
as this letter is the chemical formula [*] with a chemical structure as follows:
[DIAGRAM OF CHEMICAL COMPOUND OMITTED]
Very truly yours,
Centaur Pharmaceuticals, Inc.
/s/ Brian Frenzel
-------------------------------
Brian Frenzel
President
Agreed:
H. Lundbeck A/S
/s/ Erik Sprunk-Jansen
- ------------------------
Erik Sprunk-Jansen
President
/s/ Ole Antonsen
- ------------------------
Ole Antonsen
Senior Vice President
Date: 31.10.96
__________________
<PAGE>
Centaur Pharmaceuticals, Inc.
484, Oakmead Parkway
Sunnyvale, CA 94086
USA
As of October 31, 1996
H. Lundbeck A/S
9 Ottiliavej
DK-2500 Copenhagen-Valby
Denmark
Gentlemen:
This letter will confirm the following amendments to the "Development, Patent
and Trademark/Know-How Licensing and Supply Agreement - CPI-1189" (the "License
Agreement") between the parties to this letter and dated the same date as this
letter using the definitions and terms of the License Agreement:
Section 2.3 shall be changed by adding to the fourth line of this section, after
"Kuwait" and before "Pakistan" a comma.
Section 2.4 (b) shall be changed by adding to the twentyfourth line after
"...Basic Royalty for Licensed Product" and before "Should Lundbeck not",
"should the Additional Compound be patent protected the royalty paid on Net
Sales of the Additional Compound shall be at the Basic Royalty for the duration
of such patent (reduced, if appropriate, for Substantial Competition rebates
under Section 5.9 and the creditability of certain payments under Section 4.2)"
Section 2.5, second word, "outside" shall be changed to "Outside".
In Section 5.10 (b) and wherever otherwise relevant all references to
"Trademark Royalty" as such term is used and defined in the License Agreement
will be deemed, to be references to "Know-How/Trademark Royalty" with regard to
countries which are not part of the European Union but included in the
Territory.
Section 6.2, the word "(Project-Leader)" in the seventh line shall be changed to
"(Project Leader)", i.e. written without hyphen.
<PAGE>
Section 6.5 D shall be changed by adding to the twelfth line after "calculated
using the" and before "the prime rate" "simple average of" and by changing in
the thirteenth line after "CA, USA" and before "If the wrongful" "on the date of
remittance" to "on the date originally due and the date of remittance".
Section 6.8 shall be changed by changing "Section 6.10 mutatis mutandis" in the
last line after "applying" to "the principles of Section 6.10 with the necessary
changes".
Section 7.7 C shall be changed by changing in the twelfth line after "the prime
rate" and before "interest" "if" to "of".
Section 7.13 shall be changed by amending the fourth line after "or Bulk
Substance," to "but if Lundbeck can establish that such improvement can be used
independent from Centaur Know-How and/or Synthesis Data Lundbeck shall in
addition be free to license its said improvements to independent Third Parties,
in so far as that does not involve disclosure of Centaur's Know-How and/or
Synthesis Data that are still secret" and by deleting", unless Lundbeck can
establish that such improvements can be used independent from Centaur Know-How
and/or Synthesis Data and, if so, the parties shall, if Centaur so wishes, in
good faith negotiate terms for a license to Centaur of such improvements".
Section 7.20 (b) shall be changed by inserting in the fourth last line after
"fifty" and before "(50%)" "percent".
Section 8.5 shall be changed by inserting in the fifth line after "Centaur
Pharmaceuticals, Inc." and before "CA, USA" "Sunnyvale".
Section 11.1 (b) shall be changed in the fourth line by deleting "." after "26"
and in the sixth line by deleting "." after 3".
Section 11.5 shall be changed by amending line twenty after "entering the case
than" with the following: "the principles of Section 11.6 (i) shall apply with
the necessary changes" and by deleting "Section 11.6 (i) shall apply mutatis
mutandis".
Section 11.6 shall be changed by amending line fifteen after "hereunder" and
before "provided that" with the following: "from countries where such Third
Party Claim claims infringement" and by deleting "from any country in the
Territory" and in the last line by changing "the said" to "any".
2
<PAGE>
Section 11.7 shall be amended by inserting in line seven after "Centaur
hereunder" and before "shall be reduced" "from countries where such Third Party
Claim claims infringement" and in line nine by deleting after "Date of
Execution" and before "knowledge" "no".
Very truly yours,
Centaur Pharmaceuticals, Inc.
/s/ Brian Frenzel
------------------------------
Brian Frenzel
President
AGREED
H. Lundbeck A/S
/s/ Erik Sprunk-Jansen
- -----------------------------
Erik Sprunk-Jansen
President
/s/ Ole Antonsen
- -----------------------------
Ole Antonsen
Senior Vice President
3
