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Fujisawa Healthcare Inc.
CV Therapeutics, Inc.
COLLABORATION AND LICENSE AGREEMENT
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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Table Of Contents
Page
1. Definitions 1
1.1 [ * ] 1
1.2 [ * ]
1.3 "Affiliate" 1
1.4 "Collaborative Clinical Data" 1
1.5 "Collaboration" 1
1.6 "Confidential Information" 1
1.7 "Controlled" 2
1.8 "CVT Manufacturing Activities" 2
1.9 "CVT Trademarks" 2
1.10 "Designated Patents" 2
1.11 "Development Costs" 2
1.12 "Development Field" 2
1.13 "Development Plan" 2
1.14 "Development Program" 2
1.15 "FDA" 3
1.16 "FHI Clinical Data" 3
1.17 "FHI Development Technology" 3
1.18 "FHI Field" 3
1.19 "FHI Manufacturing Activities" 3
1.20 "FHI Trademarks" 3
1.21 "Full Time Employee" or "FTE" 3
1.22 "FTE Charges" 3
1.23 "Fujisawa Japan" 3
1.24 "GAAP" 3
1.25 "Improvements" 3
1.26 "IND" 4
1.27 "Information" 4
1.28 "Lead Compound" 4
1.29 "Licensed Compounds" 4
1.30 "Licensed Know-How" 4
1.31 "Licensed Patents" 4
1.32 "Licensed Product" 4
1.33 "Licensed Technology" 4
1.34 "Management Committee" 4
1.35 [ * ] 4
1.36 "NDA" 4
1.37 "Net Sales" 4
1.38 "Patent" 6
1.39 "Phase I Clinical Trial" 6
1.40 "Phase II Clinical Trial" 6
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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1.41 "Phase III Clinical Trial" 6
1.42 "Phase IV Trial" 6
1.43 "Post Approval Regulatory Issues" 6
1.44 "Product Trademarks" 6
1.45 "Regulatory Approval" 6
1.46 "Regulatory Authority" 6
1.47 "Sublicensee" 7
1.48 "Term" 7
1.49 "Territory" 7
1.50 "Third Party" 7
1.51 "Trademarks" 7
1.52 "Valid Claim" 7
2. Management During Development of Licensed Compounds 7
2.1 Management Committee. 7
2.2 Limitation of Powers 8
2.3 Liaisons 8
2.4 Meetings. 8
2.5 Decision-Making 9
2.6 Collaboration Guidelines. 9
2.7 Termination 9
2.8 Time Included in Development Costs 9
3. Development Program 9
3.1 General 9
3.2 Lead Compound 10
3.3 Development Plan; Annual Plans and Budgets. 10
3.4 Conduct of the Development Program including
Manufacturing Activities. 11
3.5 Diligence. 13
3.6 Disclosure of Information 13
3.7 Collaborative Clinical Data and FHI Clinical Data. 13
4. Commercialization 15
4.1 General 15
4.2 Diligence 15
4.3 Reviews with CVT 16
4.4 Loss of Exclusive Rights. 16
4.5 Recognition of CVT 17
5. Compensation 17
5.1 License Fee 17
5.2 Equity 17
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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5.3 IND Payment 17
5.4 Milestones 18
5.5 Royalties. 19
5.6 Additional Royalties. 19
5.7 Payment of Royalties and Other Amounts. 20
5.8 Third Party Royalties. 20
5.9 Withholding of Taxes 22
5.10 Blocked Currency 22
5.11 Non-Monetary Consideration 22
5.12 Foreign Exchange 22
5.13 Late Payments 23
6. Records and Publications 23
6.1 Records 23
6.2 Publications 23
7. Regulatory Matters 24
7.1 Regulatory Matters Before Transfer of NDA from CVT
to FHI. 24
7.2 Regulatory Matters After Transfer of NDA from CVT
to FHI. 25
7.3 Adverse Events 25
7.4 Licensed Product Recalls, Withdrawals and Safety
Notifications. 26
8. Licenses 26
8.1 Licenses To FHI. 26
8.2 Licenses To CVT 27
8.3 Non-Compete 27
8.4 Reservation of Rights 28
8.5 Right of First Negotiation for FHI. 28
8.6 Right of First Negotiation for CVT. 29
8.7 Trademarks. 30
9. Intellectual Property 30
9.1 Ownership. 30
9.2 Patent Matters. 31
9.3 Defense and Settlement of Third Party Claims 32
9.4 Infringement By Third Parties 33
9.5 Settlements 33
9.6 Cooperation 33
10. Confidentiality 33
10.1 Treatment of Confidential Information 33
10.2 Permitted or Required Disclosures 34
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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10.3 Publicity 34
10.4 Terms of the Agreement 35
10.5 Survival of Confidentiality 35
11. Representations, Warranties and Covenants 35
11.1 Mutual Representations and Warranties 35
11.2 CVT Representations, Warranties and Covenants 35
11.3 FHI Representations, Warranties and Covenants 36
11.4 Disclaimer of Warranty 36
12. Term and Termination 37
12.1 Term 37
12.2 Termination by FHI 37
12.3 Termination by CVT 37
12.4 Termination For Breach. 37
12.5 Termination Prior to NDA Submission 37
12.6 Effect of Termination 38
12.7 Bankruptcy Rights 39
12.8 Survival 40
13. Indemnification and insurance 40
13.1 By FHI 40
13.2 By CVT 40
13.3 Notice and Procedures 41
13.4 Insurance 41
13.5 Patent Infringement Matters 41
14. Dispute Resolution 41
14.1 Disputes 41
14.2 Disputes Under Sections 3.5(a) or 5.3 42
14.3 Governing Law 44
14.4 Injunctive Relief 45
14.5 No Consequential Damages 45
15. Miscellaneous 45
15.1 Entire Agreement; Amendment 45
15.2 Force Majeure 45
15.3 Notices 45
15.4 Consents Not Unreasonably Withheld or Delayed 46
15.5 United States Dollars 46
15.6 No Strict Construction 46
15.7 Assignment 46
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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15.8 Performance by Affiliates 47
15.9 Counterparts 47
15.10 Further Actions 47
15.11 Severability 47
15.12 Ambiguities 47
15.13 Headings 47
15.14 No Waiver 47
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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COLLABORATION AND LICENSE AGREEMENT
This Collaboration and license Agreement (this "Agreement")
is entered into and made effective as of July 10, 2000 (the
"Effective Date") by and between CV Therapeutics, Inc., a
Delaware corporation ("CVT"), and Fujisawa Healthcare, Inc., a
Delaware corporation ("FHI"). CVT and FHI may be referred to
herein each individually as a "Party" or jointly as the
"Parties."
Recitals
Whereas, CVT has developed and owns or controls certain
proprietary technology relating to the discovery, development,
manufacture, use and/or sale of compounds that may selectively
stimulate the activity of the adenosine A2A receptor; and
Whereas, CVT and FHI desire to establish a collaboration to
identify and develop such compounds for use in the field of
pharmacological stress testing, and FHI desires to acquire an
exclusive license to such compounds with the goal of developing,
manufacturing and commercializing pharmaceutical products based
on such compounds upon the terms and conditions contained in this
Agreement.
Now, Therefore, the Parties hereby agree as follows:
1. Definitions
1.1 [ * ] means the patented and trademarked form of [ * ]
indicated for the use of [ * ], including that associated with [
* ], given on a [ * ] and supplied in a sterile solution in
normal saline.
1.2 [ * ] means the patented and trademarked form of [ * ]
indicated as an adjunct to [ * ] in patients unable to [ * ]
adequately, given as a continuous peripheral intravenous infusion
over a period of [ * ] and supplied as a non-pyrogenic solution
in normal saline.
1.3 "Affiliate"
means any company or entity controlled by, controlling or
under common control with a Party. As used in this Section 1.3,
"control" means (a) that an entity or company owns, directly or
indirectly, fifty percent (50%) or more of the voting stock of
another entity, or (b) that an entity, person or group has the
actual ability to control and direct the management of the
entity, whether by contract or otherwise.
1.4 "Collaborative Clinical Data"
shall have the meaning ascribed in Section 3.7(a).
1.5 "Collaboration"
means the collaboration to develop Licensed
Compounds that stimulate the activity of the adenosine A2A receptor
pursuant to the terms and conditions of this Agreement.
1.6 "Confidential Information"
shall have the meaning ascribed in Section 10.1.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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1.7 "Controlled"
means, with respect to any material, Information or
intellectual property right, possession of the ability by a Party
to grant access, a license, or a sublicense to such material,
Information or intellectual property right as provided for herein
without payment to a Third Party.
1.8 "CVT Manufacturing Activities"
shall have the meaning ascribed in Section 3.4(a).
1.9 "CVT Trademarks"
means the Trademarks "CVT" and "CV THERAPEUTICS" and any
other Trademarks used to specifically identify CVT, other than
Product Trademarks.
1.10 "Designated Patents"
means the Patents designated on Schedule 1.10.
1.11 "Development Costs"
means the directly allocable out-of-pocket costs of
development (but not capital investment costs), plus FTE Charges,
incurred by CVT or FHI in accordance with Section 3.4(a) in
conducting their respective work under this Agreement and the
Development Program in accordance with the Development Plan,
including, without limitation, costs associated with preparation
and filing of submissions for Regulatory Approvals for Licensed
Compounds and/or Licensed Products. Development Costs do not
include any costs associated with marketing, sales, promotion or
distribution of Licensed Compounds and/or Licensed Products.
With respect to the manufacture and supply of Licensed Compounds
and/or Licensed Products, Development Costs shall only include
the directly allocable out-of-pocket costs (but not capital
investment costs), plus FTE Charges, incurred by CVT in
conducting CVT Manufacturing Activities under Section 3.4(a), and
the directly allocable out-of-pocket costs (but not capital
investment costs), plus FTE Charges, incurred by FHI in
conducting FHI Manufacturing Activities under Section 3.4(a), and
in any event shall not include the costs to manufacture
registration batches run at greater than ten percent (10%) of
commercial scale or the costs of producing any Licensed Compounds
and/or Licensed Products which could be sold commercially. In no
event shall such directly allocable out-of-pocket costs include
any costs which are otherwise included in FTE Charges.
1.12 "Development Field"
means the field in which CVT (and/or FHI under the terms of
this Agreement) shall conduct the Development Program, relating
to: (a) inducement of pharmacological stress and/or (b)
vasodilation of the coronary vasculature, to the extent that
either such stress or vasodilation is induced strictly for
purposes of diagnosing cardiovascular disease.
1.13 "Development Plan"
means the detailed plan pursuant to which CVT shall conduct
the Development Program, as further described in Section 3.3.
1.14 "Development Program"
means the program of research and development, including
without limitation work to obtain all necessary Regulatory
Approvals to market, promote, distribute, manufacture and sell
Licensed Compounds and/or Licensed Products in the Development
Field in the United States, which is to be conducted by CVT with
respect to the pre-clinical and clinical development of the
Licensed Compounds and Licensed Products, and by FHI to the
extent provided in Sections 3.4(a) and 14.2(e) below, all in
accordance with the Development Plan and as overseen by the
Management Committee and otherwise in accordance
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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with the terms and conditions of this Agreement. The Development Program
conducted by CVT (and/or FHI under the terms of this Agreement)
will be considered completed upon transfer of the NDA to FHI
according to the terms and conditions of this Agreement.
1.15 "FDA"
means the United States Food and Drug Administration (or
any successor agency thereto).
1.16 "FHI Clinical Data"
shall have the meaning ascribed in Section 3.7(a).
1.17 "FHI Development Technology"
means any and all: (a) Collaborative Clinical Data in the
FHI Field; (b) FHI Clinical Data in the Development Field; (c)
Improvements developed solely by FHI in the Development Field;
and (d) FHI's joint interest in any and all Improvements
developed jointly by FHI and CVT in the FHI Field.
1.18 "FHI Field"
means any and all applications, uses and indications.
1.19 "FHI Manufacturing Activities"
shall have the meaning ascribed in Section 3.4(a).
1.20 "FHI Trademarks"
means the Trademarks "FHI", "Fujisawa Healthcare, Inc."
and "Fujisawa" and any other Trademarks used to specifically
identify FHI.
1.21 "Full Time Employee" or "FTE"
shall mean one or more employees or consultants of CVT or
FHI who are directly involved in the research and development of
Licensed Compounds and/or Licensed Products under this Agreement
and who are necessary to carry out CVT's or FHI's
responsibilities under the Development Program, in accordance
with Section 3.4(a), with such time and effort to constitute one
such employee or consultant working the equivalent of a full year
of effort on a full time basis (equal to 40 hours per week), or
in the case of less than a full-time dedicated employee or
consultant, a full-time employee or consultant on a pro-rata
basis.
1.22 "FTE Charges"
means during the first twelve (12) months after the
Effective Date the amount of [ * ] per year per FTE with respect
to FTEs at the director level and above, and [ * ] per year per
FTE with respect to FTEs below the director level. At the end of
the first twelve (12) months after the Effective Date, and every
twelve (12) months thereafter, the amounts to be adjusted
according to the change in the San Francisco Bay Area Consumer
Price Index during that twelve (12) month period.
1.23 "Fujisawa Japan"
means FHI's corporate parent, Fujisawa Pharmaceutical Co.,
Ltd., located in Osaka, Japan.
1.24 "GAAP"
means generally accepted accounting principles.
1.25 "Improvements"
means any and all inventions, enhancements, improvements or
modifications to any of the Licensed Compounds and/or any of the
Licensed Products created or identified by either Party, or both
Parties, under this Agreement.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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1.26 "IND"
means an investigational new drug application as defined in
21 C.F.R. 312 et seq. for the FDA, or equivalent application to
the relevant regulatory authority of a country, to commence
clinical testing of a drug in humans, as defined by the FDA or
other relevant Regulatory Authority, as the case may be.
1.27 "Information"
means any and all information, data, know-how, processes,
manufacturing processes, trade secrets, inventions, discoveries
(whether or not patentable), inventions (whether or not
patentable), developments, results, techniques (including without
limitation, manufacturing techniques) and materials.
1.28 "Lead Compound"
shall have the meaning ascribed in Section 3.2.
1.29 "Licensed Compounds"
means the compounds known as CVT 3146 and [ * ].
1.30 "Licensed Know-How"
means any and all Information Controlled by CVT as of the
Effective Date or during the Term that is necessary or useful for
the development, use, manufacture, registration, formulation,
marketing, promotion, distribution and/or sale of Licensed
Compounds and/or any Licensed Product in the FHI Field in the
Territory, including, without limitation, CVT's interest in any
and all unpatented Improvements.
1.31 "Licensed Patents"
means: (a) the Designated Patents; and (b) any and all
Patents Controlled by CVT (including any Patents solely owned by
CVT and any Patents jointly owned by CVT and FHI, under Section
9.1) as of the Effective Date or anytime during the Term that
contain at least one claim that covers the use, manufacture,
importation, exportation, offer for sale and/or sale in the
Territory of Licensed Compounds and/or Licensed Products,
intermediates or methods used in manufacturing of Licensed
Compounds and/or Licensed Products or methods of use of Licensed
Compounds and/or Licensed Products, including, without
limitation, CVT's interest in any and all patented or patentable
Improvements.
1.32 "Licensed Product"
means any product containing or constituting either of the
Licensed Compounds in any formulation or dosage. "Licensed
Products" shall mean more than one (1) Licensed Product.
1.33 "Licensed Technology"
means the Licensed Patents and the Licensed Know-How.
1.34 "Management Committee"
means the committee established by the Parties to oversee
the Collaboration, as further described in Section 2.1.
1.35 [ * ]
means [ * ], or its successor in interest and/or assignee,
including without limitation [ * ] and/or any successor in
interest and/or assignee to [ * ].
1.36 "NDA"
means an application for Regulatory Approval by the FDA as
defined in 21 CFR 314 et seq., to commence commercial sale of a
Licensed Product in the United States.
1.37 "Net Sales"
means, collectively, the gross invoiced sales price of all
Licensed Products sold by FHI (or for the purposes of Section
3.7(e) only, CVT or its Affiliates or
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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sublicensees), or its Affiliates or its Sublicensees to Third Party
purchasers after deduction of the following items whether currently
in effect or which become effective during the Term as they pertain
to the Licensed Products:
(a) any and all normal and customary trade and quantity
discounts, customary allowances actually granted to purchasers of
a Licensed Product for returns and recalled Licensed Product,
chargeback and reporting fees paid to wholesalers and other
distributors, allowances to end users participating in trial
support, capitation, market share or other compliance incentive
programs, and other credit adjustments based upon shipping
discrepancies, order errors, etc. The allowance may be in the
form of a credit, free goods, or cash and offset against the
gross invoiced sales at time of issuance;
(b) Medicaid rebates given pursuant to agreements with U.S.
Department of Health and Human Services and any other rebates
given pursuant to government based rebate programs (including
without limitation state and local rebate programs). Such
rebates will be offset against gross invoiced sales at the time
of payment;
(c) normal and customary prompt payment discounts which will be
offset against gross invoiced sales at the time of sale. Such
prompt payment discount will be specifically calculated only on
those customer classes in which the prompt payment terms are
offered at the discount percentage currently in effect at the
time of sale;
(d) administrative fees to managed health care organizations
(including but not limited to group purchasing organizations,
HMOs, PBMs, etc.). Such administrative fees will be offset
against gross invoiced sales at the time of sale in the case of a
direct sale to such organization and in the case of an indirect
sale (i.e., through a wholesaler or distributor), at the time of
receipt of such data. The administrative fee will be calculated
as the units reported during the period multiplied by the rebate
percentage in effect during the period;
(e) freight expenses for shipping finished Licensed Product
(including insurance) to such purchasers, which will be
calculated by multiplying units of the Licensed Product sold by a
per unit freight charge calculated based upon total freight and
insurance charges divided by total FHI units sold during the
previous fiscal year. Such per unit amount will be updated
annually; and
(f) any excise and value added taxes paid on sales of Licensed
Product in finished package form.
No deductions shall be made from Net Sales for items (a),
(b), (d), (e) or (f) above, except to the extent of amounts for
such items actually granted or paid with respect to a Licensed
Product; provided that FHI may reconcile such amounts within a
given calendar quarter.
No deductions shall be made from Net Sales for commissions
paid to individuals whether they are with independent sales
agencies or are regularly employed by FHI (or for the purposes of
Section 3.7(e) only, CVT or its Affiliates or sublicensees),
and/or its Affiliates or its Sublicensees and are on its or their
payroll, or for the cost of collections. Licensed Products shall
be considered "sold" when billed out or invoiced. Sales by FHI
(or for the purposes of
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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Section 3.7(e) only, CVT or its
Affiliates or sublicensees), or its Affiliates or Sublicensees of
a Licensed Product to a Third Party distributor of such Licensed
Product in any given country shall be considered a sale to a
Third Party purchaser. Sale or transfer to an Affiliate or
Sublicensee for re-sale by such Affiliate or Sublicensee shall
not be considered a sale for the purpose of this provision, but
the resale by such Affiliate or Sublicensee to a Third Party
shall be a sale for such purposes.
1.38 "Patent"
means any and all patents, inventor certificates, patent
applications (including provisionals, divisionals, continuations
and continuations in part), patents issuing from any
applications, reissues, reexaminations, extensions and
supplemental protection certificates, and all foreign cognates of
the foregoing.
1.39 "Phase I Clinical Trial"
means any human clinical trial in normal volunteers and/or
patients intended to establish that a pharmaceutical product is
safe for its intended use, and to support its continued testing
in a Phase II Clinical Trial.
1.40 "Phase II Clinical Trial"
means any human clinical trial in patients intended to
establish the safety and biological activity of a pharmaceutical
product for its intended use, and designed to support its
continued testing in a Phase III Clinical Trial.
1.41 "Phase III Clinical Trial"
means any human clinical trial in patients intended to
establish that a pharmaceutical product is safe and efficacious
for its intended use, and designed to support a filing for
Regulatory Approval of such pharmaceutical product for marketing
and sale for such intended use.
1.42 "Phase IV Trial"
means any trial which is designed to fulfill any post-
approval commitments made to the FDA in the United States or to
any other Regulatory Authority in any other country in the
Territory for a Licensed Product.
1.43 "Post Approval Regulatory Issues"
means those issues which are discussed with the FDA or any
other Regulatory Authority in the Territory that primarily or
exclusively relate to post-approval marketing or clinical or
safety monitoring of Licensed Product such as any Phase IV Trial
of a Licensed Product or the wording of any package insert and/or
labeling for a Licensed Product or any post marketing safety
surveillance or spontaneous adverse event reports.
1.44 "Product Trademarks"
means all Trademarks which pertain to promotion, marketing
or sale of Licensed Products but excluding all CVT Trademarks and
all FHI Trademarks.
1.45 "Regulatory Approval"
means any approvals (including pricing and reimbursement
approvals), licenses, registrations or authorizations of any
Regulatory Authority necessary for the manufacture, distribution,
use or sale of Licensed Compounds and/or Licensed Products in the
applicable jurisdiction in the Territory.
1.46 "Regulatory Authority"
means any national, supra-national, regional, state or
local regulatory agency, department, bureau, commission, council
or other governmental entity,
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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with jurisdiction over the manufacture, distribution, use or sale of
Licensed Compounds or a Licensed Product in the applicable jurisdiction
in the Territory.
1.47 "Sublicensee"
shall have the meaning ascribed in Section 8.1(a).
1.48 "Term"
shall have the meaning ascribed in Section 12.1.
1.49 "Territory"
means the United States and its territories and
possessions, Canada and Mexico.
1.50 "Third Party"
means any Party other than CVT or FHI or their respective
Affiliates.
1.51 "Trademarks"
means all trademarks, service marks, trade names and logos,
whether registered or not, and all applications therefor, and all
goodwill associated therewith.
1.52 "Valid Claim"
means a claim of an issued and unexpired Patent that (a)
has not been revoked, declared unenforceable or unpatentable, or
held invalid by a court or other governmental agency of competent
jurisdiction that is unappealable or unappealed within the time
allowed for appeal, (b) has not been admitted to be or rendered
invalid or unenforceable through reissue, disclaimer or
otherwise, and (c) has not been finally cancelled, withdrawn,
abandoned or rejected by any governmental agency of competent
jurisdiction.
2. Management During Development of Licensed Compounds
2.1 Management Committee.
(a) Formation. Within ten (10) days after the Effective Date,
CVT and FHI shall establish the Management Committee, which shall
oversee, review and coordinate the development of the Licensed
Compounds and Licensed Products in the Development Field for
Regulatory Approval in the United States under the Development
Program, under the terms and conditions of this Agreement.
(b) Purpose and Principles. The general purposes of the
Management Committee shall be (i) to determine the overall
Development Program, (ii) to coordinate the development
activities hereunder, and (iii) to approve plans and budgets for
the development of a Licensed Product in the Development Field
for Regulatory Approval in the United States, as set forth more
fully in Article 3, all based on the principles of prompt,
diligent and commercially reasonable development of the Licensed
Product consistent with good pharmaceutical practices. In
addition to its overall development responsibility, the
Management Committee in particular shall: (1) establish the
strategy for the pre-clinical and clinical development of
Licensed Compounds and Licensed Products in the Development
Field, and Regulatory Approval of Licensed Products in the
Development Field in the United States, together with preparing
the applicable Development Plans and Annual Plans and Budgets (as
defined in Section 3.3); and (2) perform such other functions as
are appropriate to further the purposes of this Agreement as
determined by the Parties.
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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2.2 Limitation of Powers
. The Management Committee shall not have the right to amend
or interpret this Agreement. Issues regarding the interpretation
of this Agreement shall be referred to the respective chief
executive officers of each Party. The actions of the Management
Committee shall not substitute for either Party's ability to
exercise any right set forth herein, nor excuse the performance
of any obligation set forth herein.
2.3 Liaisons
. Each Party will designate an individual to serve as the
liaison between the Parties to undertake and coordinate any day-
to-day communications as may be required between the Parties
relating to their respective activities under this Agreement.
Each Party may change such liaison from time to time during the
Term upon written notice thereof to the other Party.
2.4 Meetings.
(a) General. The Management Committee shall hold meetings at
such times as it elects to do so, but in no event shall such
meetings be held less frequently than three (3) times per
calendar year. The Management Committee shall meet on an
alternating basis at CVT's facilities in Palo Alto, CA and FHI's
facilities in Deerfield, IL, or at such other locations as the
Parties may otherwise agree. Other representatives of either
Party may attend meetings of the Management Committee as non-
voting participants. With the consent of the representatives of
each Party serving on the Management Committee, Third Parties
involved in the Development Program or the manufacture or
commercialization of Licensed Compounds and/or Licensed Products
may attend meetings of such Committee as non-voting observers.
Meetings of the Committee may be held by audio or video
teleconference with the consent of each Party, provided that at
least two (2) meetings per year as set forth above shall be held
in person. Each Party shall be responsible for all of its own
out-of-pocket expenses of participating in the Management
Committee. Meetings of the Management Committee shall be
effective only if a voting representative of each Party is
present or participating.
(b) Membership. The Management Committee shall initially have
three (3)-voting representatives of each Party, each of whom
shall be authorized to vote on behalf of his or her respective
Party. The Management Committee may change its size from time to
time by written agreement of the Parties; provided, however, that
at all times it shall be composed of an equal number of voting
representatives appointed by each of CVT and FHI. Each Party may
replace its Committee voting representatives at any time upon
notice to the other Party; provided, however, that each Party's
voting representatives shall at all times be persons possessing
the appropriate level of skill, experience and familiarity with
the Development Program.
(c) Chairpersons. The Management Committee shall be chaired by
a representative of CVT. The chairperson shall be responsible for
calling meetings, preparing and circulating an agenda in advance
of each meeting, and preparing and issuing minutes of each
meeting within thirty (30) days thereafter. Any such agenda and
minutes shall be approved by the other Party in advance of any
issuance. From time to time, the Management Committee may
establish subcommittees or subordinate committees (which may or
may not include members of the Management Committee itself) to
oversee particular projects or activities, and such
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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subcommittees or subordinate committees shall be constituted and shall
operate as the Management Committee agrees.
2.5 Decision-Making
. The Management Committee shall attempt to operate by
consensus, with each Party's voting representatives to present a
unified position on each issue. The Management Committee shall
attempt in good faith to resolve any disagreement among the
voting representatives of the Management Committee in light of
the principles set forth in this Article 2. Should the
Management Committee be unable to reach consensus on an issue,
however, CVT shall have the right to cast the tie-breaking vote
(subject to the terms of Sections 3.4(a), 6.2 and 14.2 below).
2.6 Collaboration Guidelines.
(a) General. In all matters related to the Collaboration, the
Parties shall strive to balance as best they can the legitimate
interests and concerns of the Parties and to realize the economic
potential of Licensed Compounds and Licensed Products.
(b) Independence. Subject to the terms of this Agreement, the
activities and resources of each Party shall be managed by such
Party, acting independently and in its individual capacity. The
relationship between CVT and FHI is that of independent
contractors and neither Party shall have the power to bind or
obligate the other Party in any manner, other than as is
expressly set forth in this Agreement.
2.7 Termination
. Notwithstanding anything to the contrary contained herein,
the Management Committee shall disband and terminate upon the
transfer of the NDA for the first Licensed Product from CVT to
FHI in accordance with Section 7.1(a) below; provided, however,
that FHI will provide semi-annual reports to CVT in accordance
with Section 4.3.
2.8 Time Included in Development Costs
. Time spent by CVT representatives attending and preparing
for meetings of the Management Committee shall be included in the
Development Costs and charged to FHI pursuant to Section 3.4(b).
Time spent by FHI representatives attending and preparing for
meetings of the Management Committee shall also be included in
the Development Costs and shall be charged to CVT pursuant to
Section 3.4(c).
3. Development Program
3.1 General
. The Management Committee shall coordinate and facilitate
development of Licensed Compounds and Licensed Products in order
to obtain Regulatory Approvals and commercialize Licensed
Products in the U.S. as expeditiously as is commercially
reasonable. The Management Committee shall prepare and approve
the Development Program, the Development Plan and the Annual
Plans and Budgets as described in Section 3.3 and direct the
clinical development and regulatory program for Licensed
Compounds and Licensed Products. Subject to Sections 3.4(a) and
14.2(e) below, and except as set forth in such plans and budgets
approved by the Management Committee, or as otherwise agreed to
by the Management Committee (under Section 3.4(a) or otherwise),
the Development Program will be implemented by CVT.
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
3.2 Lead Compound
. The Parties acknowledge and agree that CVT 3146 is the
lead development candidate ("Lead Compound"). CVT may replace
the Lead Compound with [ * ] at any time during the Term by
providing FHI with forty five (45) days written notice thereof,
which notice shall include the reason(s) for making any such
replacement. Upon FHI's receipt of such notice, FHI shall have
forty five (45) days in which to notify CVT that: (a) CVT should
proceed with the development of [ * ] as the Lead Compound under
the terms and conditions of this Agreement; or (b) FHI will
terminate this Agreement under Section 12.2 below; provided,
however, that if FHI has not provided any written notice by the
end of such forty five (45)-day period, FHI automatically shall
be deemed to have elected clause (a). If such notice from FHI to
CVT indicates that FHI desires for CVT to proceed with the
development of [ * ] as the Lead Compound, the Management
Committee will then promptly and expeditiously prepare a
Development Program and Annual Plan and Budget for [ * ]. FHI
shall not be responsible for any Development Costs other than for
pre-clinical studies after the Effective Date in connection with
[ * ], until the date that FHI notifies CVT that it accepts (or,
as set forth above, is deemed to have accepted) development of [
* ] as the new Lead Compound. The Parties acknowledge and agree
that while CVT 3146 is the Lead Compound, CVT shall have no
responsibility to conduct in parallel development activities with
respect to [ * ] other than pre-clinical studies after the
Effective Date, unless the parties otherwise mutually agree. Once
CVT has replaced CVT 3146 with [ * ] as the Lead Compound, FHI
shall be free to develop CVT 3146 in the FHI Field at FHI's sole
cost and expense.
3.3 Development Plan; Annual Plans and Budgets.
(a) Development for Regulatory Approval in the United States.
The development of the Licensed Compounds and Licensed Products
in the Development Field for Regulatory Approval in the United
States shall be governed by a comprehensive development plan
("Development Plan") and a detailed and specific plan and budget
for all development proposed for the Licensed Compounds and
Licensed Products for each calendar year and by each clinical
phase of development during the Development Program ("Annual Plan
and Budget"). The Development Plan will be the planned
development program for Licensed Compounds and Licensed Products
designed to generate the pre-clinical, clinical and regulatory
information required for filing NDAs in the U.S. Each Annual Plan
and Budget shall be consistent with the Development Plan as then
in effect. An initial Development Plan and Annual Plan and
Budget for activities through Phase I Trial(s) for the first
Licensed Compound is set forth as Schedule 3.3 to this Agreement
and has been approved by both Parties. Promptly after the
Effective Date, the Management Committee shall complete and
approve a detailed Development Plan and an Annual Plan and Budget
covering the remainder of calendar year 2000 and calendar year
2001. The Development Plan and Annual Plan and Budget shall
include commercially reasonable timelines in order to achieve the
prompt and diligent development of Licensed Compounds and
Licensed Products. Periodically thereafter, the Management
Committee shall assign responsibilities for updating the
Development Plan and preparing the Annual Plan and Budgets on
such schedule and with such process as the Management Committee
shall determine. The Management Committee shall review and
approve the Annual Plan and Budget on a timely basis.
(b) Development in the Territory Outside the U.S. The Parties
acknowledge and agree that the development of Licensed Compounds
and Licensed Products in
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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the Territory outside of the U.S. shall
be determined by FHI in its sole discretion, subject to the
remainder of this Section 3.3(b). If FHI determines that it
would like to develop Licensed Compounds and/or Licensed Products
outside the U.S. prior to the transfer of the NDA from CVT in
accordance with 7.1(a) below, then FHI will coordinate such
development with CVT and such development will be managed by the
Management Committee under the terms and conditions of this
Agreement; provided, however, that FHI shall not conduct any
clinical studies of Licensed Compounds or Licensed Products prior
to the transfer of the NDA to FHI under Section 7.1(a) below
without obtaining CVT's prior written consent. FHI will be
responsible at its sole expense for filing, obtaining and
maintaining any and all Regulatory Approvals for Licensed
Compounds and Licensed Products in the Territory outside the U.S.
FHI shall be responsible for any Development Costs for
development of Licensed Compounds and Licensed Products in the
Territory outside of the U.S.
(c) Development Outside the Development Field in the Territory.
The Parties acknowledge and agree that the development of
Licensed Compounds and Licensed Products outside of the
Development Field in the Territory shall be determined by FHI in
its sole discretion. FHI shall be responsible for any Development
Costs for development of Licensed Compounds and Licensed Products
outside of the Development Field.
3.4 Conduct of the Development Program including Manufacturing
Activities.
(a) CVT shall manage all pre-clinical and clinical development
of Licensed Compounds and Licensed Products in the Development
Field in the U.S. and all "CVT Manufacturing Activities" (as
defined below) under the oversight of the Management Committee as
provided in Section 2.1 and in accordance with the Development
Program, Development Plan, Annual Plan and Budget and the terms
of this Agreement. FHI shall manage all "FHI Manufacturing
Activities" (as defined below) under the oversight of the
Management Committee as provided in Section 2.1 and in accordance
with the Development Program, Development Plan, Annual Plan and
Budget and the terms of this Agreement. Specifically, with
respect to each Party's respective Manufacturing Activities under
this Agreement, the Parties will coordinate and cooperate with
each other as reasonably requested. Notwithstanding anything to
the contrary contained in this Agreement, and subject to the
budget provisions of Section 3.4(c), FHI Manufacturing Activities
shall be within the sole control and discretion of FHI; provided,
however, that FHI will provide status reports at the meetings of
the Management Committee and cooperate with the Management
Committee. CVT will coordinate with FHI from and after the
Effective Date with respect to CVT Manufacturing Activities.
Consistent with the other terms of this Section 3.4(a), the
Management Committee shall determine the timeline(s) for each
Party's respective Manufacturing Activities that will reasonably
allow each Party to meet its respective obligations under this
Agreement, including, without limitation, the timing of
transition from CVT Manufacturing Activities to FHI Manufacturing
Activities and the timing of commencement of FHI Manufacturing
Activities hereunder. As used herein, "CVT Manufacturing
Activities" shall mean CVT's activities in identifying,
selecting, qualifying and entering into definitive agreement(s)
with Third Party(ies) to manufacture clinical supplies of
Licensed Compounds and Licensed Products and to supply raw
materials and components for clinical supplies of Licensed
Compounds and Licensed Products. As used herein, "FHI
Manufacturing Activities" shall mean FHI's activities, in
accordance with the timeline(s) and
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
transition plan to be
determined by the Management Committee as provided above, to: (i)
identify, select, qualify and enter into a definitive
agreement(s) with Third Party(ies) to contract manufacture
commercial supplies of Licensed Compounds and Licensed Products
and to supply raw materials and components for commercial
supplies of Licensed Compounds and Licensed Products; and (ii) to
conduct process development and scale up work to develop a
commercial process for the manufacture and supply of Licensed
Compounds and Licensed Products, including, without limitation,
related analytical and stability work. In addition to FHI
Manufacturing Activities, FHI shall undertake such other
development activities as may be determined by the Management
Committee and set forth in the Development Plan, and shall be
entitled to elect to assume development as (but only as) provided
in Section 14.2(e).
(b) FHI shall reimburse CVT for seventy-five percent (75%) of
CVT's Development Costs incurred after the Effective Date with
respect to CVT's activities under Section 3.4(a) above, including
CVT Manufacturing Activities, provided that CVT's Development
Costs are in accordance with the applicable Annual Plan and
Budget. CVT shall invoice FHI for such CVT Development Costs on
a quarterly basis, within thirty (30) days after the end of each
calendar quarter, and such invoices shall be accompanied by the
appropriate documentation, including a comprehensive summary of
FTE time, costs and listing of expenditures, and such completed
and acceptable reports as may be required under the Development
Plan and otherwise meeting the requirements of the applicable
Annual Plan and Budget. FHI shall pay all such invoices within
forty-five (45) days after the end of each such calendar quarter.
(c) CVT shall reimburse FHI for twenty-five percent (25%) of
FHI's Development Costs incurred after the Effective Date with
respect to FHI's activities (if any) under Section 3.4(a) above,
including FHI Manufacturing Activities, provided that FHI's
Development Costs are in accordance with the applicable Annual
Plan and Budget; provided however, that if FHI elects to assume
development under Section 14.2(e), in such event CVT shall
reimburse FHI for twenty five percent (25%) of FHI's Development
Costs, up to a maximum of twenty-five percent (25%) of CVT's
Development Costs for the last Annual Plan and Budget approved in
good faith under which CVT was conducting the development
activities under this Agreement. FHI shall invoice CVT for such
FHI Development Costs on a quarterly basis, within thirty (30)
days after the end of each calendar quarter, and such invoices
shall be accompanied by the appropriate documentation, including
a comprehensive summary of FTE time, costs and listing of
expenditures, and such completed and acceptable reports as may be
required under the Development Plan and otherwise meeting the
requirements of the applicable Annual Plan and Budget. CVT shall
pay all such invoices within forty-five (45) days after the end
of each such calendar quarter. At FHI's option, but only with
the prior written agreement of CVT, any monies owed by CVT under
this Section 3.4(c) may be deducted from amounts FHI owes to CVT
under Section 3.4(b). In no event will CVT be responsible for
payment of any Development Costs incurred by FHI after the
transfer of the NDA to FHI pursuant to Section 7.1(a) below.
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
3.5 Diligence.
(a) Each Party shall use commercially reasonable, diligent
efforts consistent with industry standards to carry out their
respective responsibilities under this Agreement to develop and
market Licensed Products in the Development Field in the United
States. In the event one Party in good faith believes that the
other Party is in material breach of its obligations under this
Section 3.5(a) not caused by the first Party, the first Party
shall promptly notify the other Party of such breach in writing.
In the event of any such notice hereunder, the other Party shall
have sixty (60) days thereafter to cure such material breach. In
the event the other Party fails to timely cure its material
breach within such sixty (60) day period, then either Party may
submit the issue for binding arbitration under Section 14.2
below.
(b) The Parties will use commercially reasonable diligent
efforts to cooperate with each other in carrying out the
Development Plan and the applicable Annual Plan and Budget under
this Agreement.
From and after the date of transfer of the NDA for the first
Licensed Product from CVT to FHI under Section 7.1(a) below, FHI
shall have the authority in its sole discretion to make any and
all decisions relative to all clinical matters and any Phase IV
Trial, Post Approval Regulatory Issues or other post approval
research studies relating to Licensed Compounds and/or Licensed
Products, and with respect to all such matters CVT shall have no
responsibility to make any payments that might otherwise be
required under Section 3.4(c) or to perform any activities under
Section 3.4(a).
3.6 Disclosure of Information
. CVT shall provide FHI with Information relating to the
Licensed Compounds and/or Licensed Products, as follows:
(a) Promptly following the Effective Date (but in no event more
than thirty (30) days thereafter), CVT shall provide FHI access
(and upon request for specified items, provide copies to FHI), of
any and all Information that is in CVT's possession and/or
Control relating specifically to the Licensed Compounds.
(b) Thereafter, through the Management Committee CVT shall
disclose to FHI any material Information in CVT's possession
and/or Control specifically relating to the Licensed Compounds
and/or Licensed Products and shall provide FHI access to any and
all such Information, whether material or not, as is reasonably
requested by FHI at reasonable times and upon reasonable advance
written notice.
Nothing herein shall require CVT to breach any
confidentiality obligations owed to Third Parties. CVT shall
notify FHI of any such confidentiality obligations and, if
requested by FHI, shall use good faith efforts to attempt to
obtain a waiver of them for the benefit of FHI.
3.7 Collaborative Clinical Data and FHI Clinical Data.
(a) Any and all pre-clinical and clinical data developed for,
related to and/or relative to the Licensed Compounds and/or any
Licensed Products and generated by CVT pursuant to this Agreement
is referred to herein as the "Collaborative Clinical Data". The
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
Collaborative Clinical Data shall not include any "FHI Clinical
Data", which means any and all pre-clinical and clinical data (if
any) developed for, related to and/or relative to the Licensed
Compounds and/or any Licensed Products and generated solely by
FHI pursuant to this Agreement. All Collaborative Clinical Data
and all FHI Clinical Data will be owned solely by FHI, subject to
the license rights for the benefit of CVT under Section 8.2 below
and the remaining provisions of this Section 3.7.
(b) CVT shall have the right to disclose the Collaborative
Clinical Data in the FHI Field and/or the FHI Clinical Data in
the Development Field to potential partners for any use outside
the Territory, and to qualified potential financial investors in
CVT, under confidentiality obligations binding the recipients of
such information under terms that are consistent with Article 10,
provided that such partner and/or financial investor could not be
reasonably anticipated to compete with FHI in the Development
Field in the Territory. In addition, CVT shall have the right to
disclose the Collaborative Clinical Data in the FHI Field and/or
the FHI Clinical Data in the Development Field to Regulatory
Authorities outside the Territory.
(c) Either Party shall be entitled to use the Collaborative
Clinical Data in the FHI Field and/or the FHI Clinical Data in
the Development Field in scientific publications consistent with
standard industry practice, subject however to the terms of
Section 6.2 hereof.
(d) CVT shall have the exclusive (except as to FHI) license
(with the right to sublicense) to use the Collaborative Clinical
Data in the FHI Field and/or the FHI Clinical Data in the
Development Field outside of the Territory under the license
granted to CVT under Section 8.2 below, in consideration for
which CVT shall make payment to FHI of the following percentages
of any and all monies, upfront fees, licensing fees, royalties,
milestones and premium on any equity investment and/or discount
on any research and development support and/or loans (but
excluding the fair market value of any research and development
support, loans or other amounts received in connection with the
purchase of equity and the like) received by CVT from a Third
Party sublicensee of CVT under CVT's license rights with respect
to such Collaborative Clinical Data in the FHI Field and FHI
Clinical Data in the Development Field (collectively the "Total
Consideration"), but only if such Third Party sublicensee
includes such Collaborative Clinical Data in the FHI Field and/or
the FHI Clinical Data in the Development Field in a filing
submitted to a Regulatory Authority outside of the Territory
(collectively, the "Third Party-Filed Clinical Data"):
(i) [ * ] of the Total Consideration if the Third Party-Filed
Clinical Data includes non-public safety data with respect to a
Licensed Compound and/or Licensed Product, but not any non-public
efficacy data from any Phase II Clinical Trial of a Licensed
Compound and/or Licensed Product or any Phase III Clinical Trial
of a Licensed Compound and/or Licensed Product; or
(ii) [ * ] of the Total Consideration if the Third Party-Filed
Clinical Data includes any non-public efficacy data from any
Phase II Clinical Trial of a Licensed Compound and/or Licensed
Product, but not any non-public efficacy data from any Phase III
Clinical Trial of a Licensed Compound and/or Licensed Product; or
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
(iii) [ * ] of the Total Consideration if the Third Party-
Filed Clinical Data includes any non-public efficacy data from
any Phase III Clinical Trial of a Licensed Compound and/or
Licensed Product.
(e) In the event CVT (rather than a Third Party as provided in
Section 3.7(d) above) includes such Collaborative Clinical Data
in the FHI Field and/or FHI Clinical Data in the Development
Field in a filing submitted by CVT to a Regulatory Authority
outside of the Territory (collectively "CVT-Filed Clinical
Data"), then in consideration for CVT's license rights to use
such CVT-Filed Clinical Data, CVT shall make payment to FHI of
the following percentages of Net Sales of Licensed Products:
(i) [ * ] of the Net Sales of Licensed Products by CVT or its
Affiliates or sublicensees if the CVT-Filed Clinical Data
includes non-public safety data with respect to a Licensed
Compound and/or Licensed Product, but not any non-public efficacy
data from any Phase II Clinical Trial of a Licensed Compound
and/or Licensed Product or any Phase III Clinical Trial of a
Licensed Compound and/or Licensed Product; or
(ii) [ * ] of the Net Sales of Licensed Products by CVT or its
Affiliates or sublicensees if the CVT-Filed Clinical Data
includes any non-public efficacy data from any Phase II Clinical
Trial of a Licensed Compound and/or Licensed Product, but not any
non-public efficacy data from any Phase III Clinical Trial of a
Licensed Compound and/or Licensed Product; or
(iii) [ * ] of the Net Sales of Licensed Products by CVT or
its Affiliates or sublicensees if the CVT-Filed Clinical Data
includes any non-public efficacy data from any Phase III Clinical
Trial of a Licensed Compound and/or Licensed Product.
As used in Sections 3.7(d) and (e), "non-public" data
comprising the Collaborative Clinical Data in the FHI Field or
the FHI Clinical Data in the Development Field shall include any
Information published or otherwise disclosed by CVT in violation
of its confidentiality obligations under Article 10. CVT shall
promptly notify FHI in the event CVT and/or any Third Party uses
any such Collaborative Clinical Data and/or FHI Clinical Data as
provided in Sections 3.7(d) and (e) above.
4. Commercialization
4.1 General
. Except as otherwise provided in Section 4.4 below, FHI:
(a) shall have the exclusive right in its sole discretion to
commercialize the Licensed Compounds and Licensed Products in the
FHI Field in the Territory; (b) shall be solely responsible for
manufacturing, marketing, promotion, sales and distribution of
the Licensed Compounds and each Licensed Product in the FHI Field
in the Territory; and (c) shall have the sole responsibility and
decision-making authority over all aspects of the manufacturing,
marketing, promotion, sale and distribution of Licensed Compounds
and Licensed Products in the FHI Field in the Territory.
4.2 Diligence
. FHI shall, directly or through its Affiliates or
Sublicensees, use commercially reasonable, diligent efforts
consistent with industry standards to carry out its
responsibilities under this Agreement to manufacture (or cause to
be manufactured), market,
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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promote and sell Licensed Products in
the Development Field in the United States. Without limiting the
generality of the foregoing, FHI shall commence commercial sales
of each Licensed Product in the United States for a particular
indication within [ * ] after receiving Regulatory Approval of
the NDA (or NDA supplement) to market and sell such Licensed
Product in the United States for such indication, except in the
case where commercial supplies of the Licensed Product are
unavailable for reasons reasonably outside FHI's control, in
which case the [ * ] time period may be extended on written
notice from FHI to CVT (including an explanation of the reasons
for such delay) for up to an additional [ * ]. Notwithstanding
the foregoing, however the Parties agree that FHI's diligence
obligations under this Section 4.2 with respect to indications
outside of the Development Field and in the Territory outside the
United States shall not apply unless FHI has determined, in its
sole discretion, to proceed under Section 3.3(b) and/or Section
3.3(c), as the case may be.
4.3 Reviews with CVT
. Subject to Section 4.4(b) below, following NDA approval
for the first Licensed Product, FHI shall provide CVT on a semi-
annual basis during the Term (every February 1 and August 1) with
reports describing all of FHI's material marketing and clinical
and regulatory efforts with respect to Licensed Products during
the immediately preceding six (6) month period and forecasts and
plans for such efforts for the immediately following twelve (12)
month period. Such reports will be provided by FHI to CVT
commencing within ninety (90) days after the first such NDA
approval, with the next such report to be provided on the
February 1 or August 1 deadline next following the initial report
(provided that if this would result in the second report being
provided within less than six (6) months, FHI may deliver the
second report at the next applicable deadline). The Parties shall
meet once annually to review all such reports.
4.4 Loss of Exclusive Rights.
(a) CVT shall have the right to convert the exclusive licenses
granted to FHI pursuant to Section 8.1 below to co-exclusive
licenses to FHI (with co-exclusive licenses to CVT as provided in
Section 8.2 below), with such conversion to take effect
automatically upon thirty (30) days' prior written notice from
CVT to FHI if either of the following events occurs at any time
during the Term of this Agreement:
(i) FHI's net royalty obligation to Third Parties on its sales
of [ * ] in the U.S. is less than [ * ], provided that this
subsection (i) shall not apply if FHI's underlying license
agreement(s) with all Third Parties with respect to [ * ] have
been terminated, or if [ * ] or its manufacture, use or sale in
the U.S. have expired, terminated or lapsed or is no longer
covered by a Valid Claim within any Patent in the U.S.; or
(ii) FHI files an NDA for, commercially launches or acquires
rights, in any case to any approved product for use in the
Development Field in the Territory, other than a Licensed Product
or any other product (if any) licensed by FHI from CVT.
FHI shall notify CVT in writing promptly of the occurrence
of any event covered under this Section 4.4(a).
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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(b) In the event that FHI's licenses under Section 8.1 below
become co-exclusive with CVT as provided in Section 4.4(a) above,
from and after the effective date of the conversion of such
license rights: (i) FHI's royalty obligations to CVT under
Section 5.5 below shall be reduced by [ * ]; (ii) FHI's royalty
obligations under Section 5.6 shall terminate; (iii) FHI's
obligations under Sections 4.3 and 8.6 shall terminate; and (iv)
CVT shall no longer have any obligations to FHI under Sections
3.7(d), 3.7(e) or 8.5 of this Agreement. In addition, FHI shall
provide CVT, at CVT's reasonable request, such reasonable
cooperation (including any information included in FHI
Development Technology) with respect to the Licensed Compounds
and/or Licensed Products or their development, manufacture or use
in FHI's possession or Control as may be necessary for CVT to
market and sell Licensed Products.
4.5 Recognition of CVT
. CVT shall receive recognition on all package labels of
all Licensed Products in the Territory where legally permissible.
If the space required for such recognition would result in
additional production costs, FHI shall promptly notify CVT in
writing of such costs, and shall only be required to include such
recognition based on CVT's written agreement to reimburse FHI for
such additional costs. CVT shall receive recognition in all
promotional materials for all Licensed Products where legally
permissible. The Parties acknowledge and agree that in the event
CVT exercises its option under Section 4.4 to convert the
exclusive licenses granted to FHI hereunder to co-exclusive
licenses, then, at FHI's option, CVT shall no longer receive
recognition on all package labels and/or promotional materials.
5. Compensation
5.1 License Fee
. On the Effective Date, FHI shall pay to CVT a non-
creditable, non-refundable license fee of Two Million Dollars
($2,000,000.00).
5.2 Equity
. The Parties have entered into that certain stock purchase
agreement of even date herewith, a copy of which is attached as
Schedule 5.2, pursuant to which FHI shall make an investment of
Four Million Dollars ($4,000,000) in return for shares of CVT
common stock as further described in such agreement. Such equity
investment as described in accordance with the terms of such
agreement shall be paid to CVT on the Effective Date.
5.3 IND Payment
. On the Effective Date hereof, FHI shall pay to CVT a fee
of Four Million Dollars ($4,000,000) in consideration for
successfully filing the IND (the "IND Payment"). Notwithstanding
anything to the contrary contained herein, if the IND (or any
other application outside the U.S in one of the Permitted
Countries, as hereinafter defined, to permit human clinical
testing) for the Lead Compound is not successfully filed prior to
the Effective Date or within [ * ] after the Effective Date, then
CVT shall within two (2) business days thereafter refund to FHI
by wire transfer the IND Payment. CVT will use its commercially
reasonable diligent efforts consistent with industry standards to
successfully file the IND (or such other application).
"Permitted Countries" shall mean [ * ]. If subsequently the IND
or such other application is successfully filed by CVT under this
Agreement, then FHI shall within two (2) business days thereafter
either (a) repay CVT by wire transfer the full amount of the IND
Payment or (b) terminate this Agreement under Section 12.2
(including the notice provision therein), in which event FHI
shall be entitled to keep the IND Payment previously refunded by
CVT. Under this Section 5.3, a "successfully filed" IND or such
other application shall mean
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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that (i) if an IND was filed with
the FDA, a period of thirty (30) days has passed from CVT's
receipt of a notice from the FDA that the FDA has received such
IND, and during such thirty (30) day period the FDA has not put a
clinical hold on such IND (or did so but CVT has subsequently
received a notice from the FDA confirming that the clinical hold
has been removed), or (ii) if an application was filed outside
the U.S. in one of the Permitted Countries to permit human
clinical testing, such application has been accepted by the
appropriate Regulatory Authority, or CVT is otherwise able to
commence human clinical testing thereunder as provided under
applicable laws and regulations. If within thirty (30) days after
the expiration of such twelve (12) month period, FHI in good
faith believes that CVT is in material breach of its obligations
to file the IND or such other application under this Section 5.3,
either Party may initiate arbitration pursuant to Section 14.2
below.
5.4 Milestones
. FHI shall make the following non-creditable, non-
refundable payments to CVT within five (5) business days after
receipt by FHI of written notice from CVT of the occurrence of
each of the corresponding events:
Event Payment
Initiation of the first [ * ]
Phase II Clinical Trial
for the first Licensed
Product under an IND filed
in the U.S.
Initiation of the first [ * ]
Phase III Clinical Trial
for the first Licensed
Product under an IND filed
in the U.S.
First submission of an NDA [ * ]
for the first Licensed
Product in the U.S.
First receipt of approval [ * ]
of an NDA for the first
Licensed Product in the
U.S.
If under the Development Program CVT is able to file an NDA
for the first Licensed Product without having had to conduct a
Phase II Clinical Trial, or is able to file such NDA without
having had to conduct a Phase III Clinical Trial, then FHI shall
pay CVT the milestone payment applicable to such missed event at
the time of receipt of approval of the NDA, in addition to the
milestone payment payable at the time of such NDA approval. FHI
shall make each of the foregoing milestone payments no more than
once, regardless of the number of times a particular milestone is
achieved. "Initiation" as used in this Section 5.4 shall mean
the enrollment of the first patient in the study.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
5.5 Royalties.
(a) Subject to Section 4.4(b) above:
(i) FHI shall owe and pay to CVT a royalty of [ * ] of Net Sales
of all Licensed Products by FHI and its Affiliates and
Sublicensees in the Territory, subject to clause (ii) below.
(ii) On a country-by-country and Licensed Product-by-Licensed
Product basis, FHI's royalty obligation under clause (i) above
shall be reduced to [ * ] of Net Sales of a Licensed Product by
FHI and its Affiliates and Sublicensees in any country in the
Territory in which such Licensed Product or the manufacture,
sale, promotion, distribution or use thereof would not be covered
by a Valid Claim within the Licensed Patents.
(b) FHI's royalty obligations to CVT under Section 5.5(a)(i)
above shall expire, on a country-by-country and Licensed Product-
by-Licensed Product basis, on the later of (i) the expiration of
the last-to-expire of the Valid Claims within the Licensed
Patents that would (but for the licenses granted to FHI under
this Agreement) be infringed by the manufacture, sale, promotion,
distribution or use of a Licensed Product in such country, or
(ii) the tenth (10th) anniversary of the date of the first
commercial sale of such Licensed Product in such country by FHI,
its Affiliates or its Sublicensees hereunder. FHI's royalty
obligations to CVT under Section 5.5(a)(ii) above shall expire,
on a country-by-country and Licensed Product-by-Licensed Product
basis, on the tenth (10th) anniversary date of the first
commercial sale of such Licensed Product in such country by FHI,
its Affiliates or its Sublicensees. Following any such
expiration, the licenses granted to FHI by CVT pursuant to
Section 8.1 below shall terminate with respect to such Licensed
Product in such country, and CVT automatically shall be deemed to
have granted to FHI a non-exclusive, fully paid-up, royalty-free,
perpetual license under the Licensed Technology to develop, use,
make, have made, import, export, offer for sale and sell such
Licensed Product in such country.
5.6 Additional Royalties.
(a) Subject to Section 4.4(b) above, commencing at the start of
the first full calendar quarter which is at least forty-five (45)
days after the date on which the FDA approves the NDA for the
first Licensed Product, and terminating [ * ] thereafter, FHI
shall owe and pay to CVT a royalty on Net Sales of [ * ] in the
Territory as follows: (i) for that portion of Net Sales of [ * ]
by FHI or its Affiliates or sublicensees up to [ * ] in each one
(1)-year period (as defined below), FHI shall owe and pay CVT [ *
]; (ii) for that portion of Net Sales of [ * ] by FHI or its
Affiliates or sublicensees over [ * ] in each one (1)-year period
and up to [ * ] in each one (1)-year period, FHI shall owe and
pay CVT a royalty equal to [ * ] of such Net Sales of [ * ] by
FHI or its Affiliates or sublicensees; and (iii) for that portion
of such Net Sales of [ * ] by FHI or its Affiliates or
sublicensees in excess of [ * ] in each one (1)-year period, FHI
shall owe and pay CVT a royalty equal to[ * ] of Net Sales of [ *
] by FHI or its Affiliates or sublicensees. For purposes of this
provision, the one (1)-year periods for measurement of Net Sales
of [ * ] shall consist of periods of four (4) calendar quarters,
commencing as set forth above.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
(b) Subject to Section 4.4(b) above, after the expiration of
such [ * ] period under clause (a), FHI shall pay CVT royalty
equal to [ * ] of Net Sales of [ * ] by FHI or its Affiliates or
sublicensees for that portion of Net Sales in excess of [ * ] per
one (1)-year period (as measured as provided above).
(c) Subject to Section 4.4(b) above, FHI's obligations to pay
royalties to CVT under this Section 5.6 shall expire in the same
fashion and at the same time as FHI's obligations to CVT under
Section 5.5(a) hereof, as more fully described in Section 5.5(b)
hereof; provided, however, that if FHI's underlying license
agreement(s) with all Third Parties with respect to [ * ] have
been terminated, or if [ * ] or its manufacture, use or sale in
the U.S. have expired, terminated or lapsed or is no longer
covered by a Valid Claim within any Patent in the U.S., then
FHI's obligations to pay royalties to CVT under this Section 5.6
shall terminate upon the effective date set forth in Sections
4.4(a) and (b) for conversion of license rights.
5.7 Payment of Royalties and Other Amounts.
(a) Within thirty (30) days of the end of each calendar quarter
following the first commercial sale of a Licensed Product in the
Territory hereunder: (i) FHI shall provide CVT with a written
report of Net Sales of all Licensed Products and of [ * ] in the
Territory during such quarter, accompanied by full payment of all
royalties accrued and owing to CVT under Sections 5.5 and 5.6 (if
applicable) during such quarter; and (ii) CVT shall provide FHI
with a written report of Net Sales of Licensed Products by CVT
and its Affiliates and sublicensees under Section 3.7(e),
accompanied by full payment of all royalties accrued and owing to
FHI under Section 3.7(e). Within sixty (60) days following the
end of each calendar year following the first commercial sale of
a Licensed Product hereunder, FHI or CVT, as the case may be
shall provide the other Party with a written report of Net Sales
of all Licensed Products and FHI shall provide CVT with a written
report of Net Sales of [ * ] during such year. Each such report
shall set forth on a Licensed Product-by-Licensed Product and
country-by-country basis, aggregate Net Sales of such Licensed
Product and of [ * ], the number of units of such Licensed
Product and of [ * ] sold, gross sales for such Licensed Product
and of [ * ], and the deductions taken from such gross sales in
calculating any Net Sales.
(b) All amounts due to each Party from the other Party under
this Agreement shall be made by wire transfer of immediately
available United States funds into an account designated in
writing by an officer of CVT or FHI, as the case may be.
5.8 Third Party Royalties.
(a) During the Term:
(i) if FHI is ordered by a court of competent jurisdiction in a
final unappealable judgment to license Valid Claims under one (1)
or more Patents owned or Controlled by a Third Party, or
otherwise to pay any monies to a Third Party (including, without
limitation, [ * ]) in order to make, have made, export, import,
use, offer for sale and/or sell any Licensed Product in the FHI
Field in the Territory; or
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
(ii) if FHI deems it necessary or desirable to enter into an
agreement for a license under one or more issued Patents owned or
Controlled by a Third Party (including, without limitation, [ *
]), to develop, make, have made, export, import, manufacture,
use, offer for sale and/or sell a Licensed Product in the FHI
Field in the Territory, and CVT agrees in writing that such
license agreement is necessary or desirable, or Independent
Patent Counsel as provided in Section 5.8(b) determines that such
license agreement is necessary or desirable; then, for purposes
of this Section 5.8 the Parties shall share any and all monies,
upfront fees, licensing fees, royalties and milestones, required
to be paid by FHI to any such Third Party (collectively the "Total
Amount Payable to Third Parties"), as follows:
(1) If the Total Amount Payable to Third Parties includes any
lump sum payments, then FHI shall be entitled to offset [ * ] of
such lump sum payments actually made by FHI, against up to [ * ]
of the milestones payable to CVT under this Agreement pursuant to
Section 5.4 above, or in the event all milestones have been paid
by FHI to CVT hereunder, then within thirty (30) days of CVT's
receipt of written notice from FHI that FHI has made such lump
sum payment to such Third Party, CVT shall promptly reimburse FHI
for the balance of the [ * ] of such lump sum payment not
otherwise offset against milestone payments as provided herein.
(2) With respect to any payments comprising the Total Amount
Payable to Third Parties other than lump sum payments covered by
the foregoing clause (1), FHI shall be entitled to offset [ * ]
of such payments actually made by FHI (the "Offset Amount"),
against up to [ * ] of the royalties payable to CVT under
Sections 5.5 and 5.6 of this Agreement. If the Offset Amount to
which FHI is entitled under the preceding sentence exceeds [ * ]
of the royalties due to CVT during any calendar quarter, then FHI
shall be entitled to carry forward such excess amount not yet
offset hereunder (the "Unused Offset Amount") to subsequent
calendar quarter(s) during the Term of this Agreement, and to
offset such Unused Offset Amount and future Offset Amounts (if
any) against up to [ * ] of the royalties subsequently due to CVT
hereunder, until the full Offset Amounts are repaid to FHI by the
offsetting mechanism under this provision. If, upon the
expiration or termination of this Agreement, there remains any
Unused Offset Amount (and any unused offset under clause (1)
above), FHI shall be entitled to deduct any such remaining Unused
Offset Amount (and any unused offset under clause (1) above) from
the final royalty payment owed to CVT under this Agreement, and
if such final royalty payment is less than the amount of such
remaining Unused Offset Amount, CVT shall pay FHI an amount equal
to the difference within thirty (30) days after receipt of an
invoice from FHI.
(b) In the event FHI determines that it is necessary or
desirable to enter into an agreement for a license under Section
5.8(a)(ii) above and CVT does not agree in writing with FHI, then
either Party may submit resolution of the matter to an
independent outside patent counsel in accordance with the
following procedure (such counsel shall be referred to as
"Independent Patent Counsel"). If the Parties cannot agree
whether such license is necessary or desirable, either Party may
send the other Party written notice requesting that an
Independent Patent Counsel render an opinion as to whether such
agreement is necessary or desirable. Each Party shall select its
own outside patent counsel and both such outside patent counsel
shall select
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
the Independent Patent Counsel, within thirty (30)
days from the date of the first notice above. Both Parties and
their respective outside patent counsel will cooperate with
Independent Patent Counsel, so that Independent Patent Counsel
can render an opinion as expeditiously as possible. Independent
Patent Counsel is to act as a neutral participant and shall have
no past, present or anticipated future affiliation with either
Party. If Independent Patent Counsel determines that such
license arrangement is necessary or desirable, then CVT shall
share in the Total Amount Payable to Third Parties as provided
for in this Section 5.8. If Independent Patent Counsel determines
that such license arrangement is not necessary or desirable, then
CVT shall not be obligated to so share in such Total Amount
Payable to Third Parties, and FHI shall not be entitled to such
offset against royalties due to CVT. The decision of Independent
Patent Counsel shall be final and binding on the Parties, and the
cost and expenses of Independent Patent Counsel shall be shared
between the Parties. Each Party shall bear its own costs and
expenses with respect to it own respective outside patent
counsel.
5.9 Withholding of Taxes
. Any tax required to be withheld by a Party on account of
royalties payable to the other Party under this Agreement shall
be deducted from the amount of royalties otherwise due. The
withholding Party shall secure and send to the other Party
written proof of any such taxes withheld by the withholding Party
or its Sublicensees (or sublicensees, in the case of CVT) for the
benefit of the other Party. The withholding Party shall
reasonably assist the other Party in claiming exemption from such
deductions or withholdings under any double taxation or similar
agreement or treaty from time to time in force.
5.10 Blocked Currency
. In each country where the local currency is blocked and
cannot be removed from the country, at the election of the Party
paying royalties, royalties accrued in that country shall be paid
to the other Party in that country in local currency by deposit
in a local bank designated by the other Party.
5.11 Non-Monetary Consideration
. In the event FHI (or for the purposes of Section 3.7(e)
only, CVT or its Affiliates or sublicensees), or its Affiliates
or Sublicensees receives any non-monetary consideration in
connection with the sale of Licensed Products, the Net Sales of
such Licensed Product shall be calculated based on the fair
market value of such other consideration. In such case, such
Party shall disclose the terms of such arrangement to the other
Party and the Parties shall endeavor in good faith to agree on
such fair market value as promptly as possible. Similarly, in the
event the Total Consideration received by CVT under Section 3.7
or to be paid by FHI under Section 5.8, is made up of any non-
monetary consideration, such non-monetary consideration shall be
calculated based on the fair market value of such other
consideration.
5.12 Foreign Exchange
. Subject to Section 5.10, for the purpose of computing the
Net Sales of Licensed Products sold in a currency other than
United States Dollars, such currency shall be converted into
United States Dollars using the rate of exchange set forth in the
Wall Street Journal for the close of business the last day of the
calendar quarter in which such sales occurred.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
5.13 Late Payments
. Any amount not paid when due under this Agreement shall
bear interest at the lesser of (a) one and one half percent (1
1/2%) per month, compounded monthly or (b) the highest rate
permitted by applicable law.
6. Records and Publications
6.1 Records
. Each Party shall keep or cause to be kept such records as
are required to determine, in a manner consistent with generally
accepted accounting principles in the United States, any sums or
credits due under this Agreement, including, but not limited to,
development costs, royalties, etc. At the request (and expense)
of either Party, the other Party and its Sublicensees (or
sublicensees, in the case of CVT) shall permit an independent
certified public accountant appointed by such Party who shall be
subject to the confidentiality restrictions set forth in Article
10 and reasonably acceptable to the other Party, at reasonable
times not more than once a year and upon reasonable notice, to
examine only those records as may be necessary to determine, with
respect to any calendar year ending not more than three (3) years
prior to such Party's request, the correctness or completeness of
any payment made under this Agreement. Results of any such
examination shall be (a) limited to information relating to the
Licensed Compounds and Licensed Products, (b) made available to
both Parties and (c) deemed Confidential Information subject to
Article 10. The Party requesting the audit shall bear the full
cost of the performance of any such audit, unless such audit
discloses a variance of more than five percent (5%) from the
amount of the original report, royalty or payment calculation.
In such case, the Party being audited shall bear the full cost of
the performance of such audit, as well as promptly paying any
shortfall reported and any interest due thereon. Any
overpayments shall be promptly repaid, and any interest due
thereon.
6.2 Publications
. Prior to the filing of the first NDA for the Licensed
Product neither Party shall publish or present the results of
studies carried out under this Agreement without the opportunity
for prior review by the other Party. Subject to Section 10.3,
each Party agrees to provide the other Party the opportunity to
review any proposed abstracts, manuscripts or presentations
(including verbal presentations) which relate to the Licensed
Compounds and/or any Licensed Product at least five (5) business
days prior to their intended submission for publication or
presentation and agrees, upon request of the other Party, not to
submit any such abstract, manuscript or presentation for
publication or publication until the other Party is given a
reasonable period of time to file for patent application(s) for
any material in such publication or presentation which it
believes to be patentable. The Parties agree to review and
consider delay of publication and filing of patent applications
as appropriate. In the event of a disagreement over publication,
the Management Committee will review such requests and recommend
subsequent action but in such event CVT shall not have a tie-
breaking vote. Neither Party shall have the right to publish or
present Confidential Information of the other Party which is
subject to Section 10.1 without the prior consent of the other
Party. Nothing contained in this Section 6.2 shall prohibit the
inclusion of information necessary for a patent application,
except for Confidential Information of the non-filing Party,
provided the non-filing Party is given a reasonable opportunity
to review the information to be included prior to submission of
such patent application. Notwithstanding anything to the contrary
contained in this Agreement, only FHI in its sole discretion
shall have the right to publish or present the results of any
Phase IV
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
Trials conducted at its expense or any other studies
conducted at its expense following the filing of the first NDA
for the Licensed Product.
7. Regulatory Matters
7.1 Regulatory Matters Before Transfer of NDA from CVT to FHI.
The Parties agree that before the NDA is transferred from
CVT to FHI in accordance with Section 7.1(a) below, the following
shall apply:
(a) CVT shall prepare and submit the IND for the Lead Compound
in accordance with Section 3.2 hereof. CVT shall prepare and
submit in its name the NDA for the first Licensed Product;
provided, however, that the CMC section of the NDA ("CMC
Section") shall be prepared by FHI, in coordination and
cooperation with CVT. The Parties will coordinate and cooperate
with respect to the various activities needed to complete and
file the NDA. Within ten (10) days after FDA approval of such
NDA, CVT shall transfer such NDA to FHI. Until such time as such
NDA is transferred to FHI, CVT shall own and hold all Regulatory
Approvals under the Development Program and shall be responsible
for the filing and maintenance of all such Regulatory Approvals,
with all costs and expenses associated therewith to be included
in Development Costs under this Agreement.
(b) Except for FHI Manufacturing Activities (as provided in
Section 3.4(a)), Post Approval Regulatory Issues (as provided in
Section 7.1(c)) and the preparation of the CMC Section (as
provided in Section 7.1(a)), CVT will have all other regulatory
responsibility under the Development Program in collaboration and
cooperation with FHI and under the oversight of the Management
Committee. Such regulatory responsibility of CVT shall include,
without limitation, the following: (i) preparation and
modification of all protocols, investigator brochures and other
clinical trial documentation; (ii) drug shipments; (iii) meetings
with FDA or any other Regulatory Authority, including, without
limitation, meeting preparation, meeting coordination,
preparation of minutes and reaching agreement with the FDA or any
other Regulatory Authority on applicable regulatory matters; (iv)
preparation and coordination of any FDA or other Regulatory
Authority advisory committee presentation for the first Licensed
Product (which FHI shall be entitled to attend); (v) the
processing, tracking and reporting of all IND adverse event
reports; and (vi) the maintenance of one (1) or more databases of
the Collaborative Clinical Data accumulated from all clinical
trials of Licensed Compounds and Licensed Products conducted by
CVT under this Agreement.
(c) With respect to any Post Approval Regulatory Issues, FHI
shall be responsible for and control any and all decisions with
respect thereto, including without limitation meetings, meeting
minutes and reaching agreement with FDA or any other Regulatory
Authority. FHI will coordinate Post Approval Regulatory Issues
with CVT, but FHI shall have the final decision making authority
with respect to any Post Approval Regulatory Issues.
(d) Prior to the transfer of the NDA to FHI under Section
7.1(a), FHI shall be entitled to attend the advisory committee
presentation (if any) for the first Licensed Product and any
preparatory practice sessions held with respect to such advisory
committee presentation (if any), as noted in Section 7.1(b)(iv)
above, and also to attend the end-of-Phase II Trials meeting
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
and pre-NDA meeting with the FDA relating to such Licensed Product.
CVT shall make all reasonable efforts to provide FHI copies of
any materials relating to any Post Approval Regulatory Issue
prior to their presentation or disclosure to the FDA or any other
Regulatory Authority in the Territory, so that FHI may have an
opportunity to review and provide comments, and CVT shall make
reasonable efforts to allow FHI to be involved in the preparation
for any meetings or telephone calls with the FDA or any other
Regulatory Authority in the Territory relating to any Post
Approval Regulatory Issue. Notwithstanding the foregoing, in the
event any such meetings and/or telephone calls with the FDA
and/or any other Regulatory Authority in the Territory relate to
and/or concern Post Approval Regulatory Issues, the Parties agree
that: (i) CVT shall not meet with the FDA without FHI; and (ii)
with respect to any such telephone calls, CVT will use reasonable
efforts to have FHI participate in such calls and to the extent
FHI is unable to so participate, CVT agrees that it will make no
commitments to FDA and/or any such Regulatory Authority regarding
any Post Approval Regulatory Issues without FHI's prior consent.
7.2 Regulatory Matters After Transfer of NDA from CVT to FHI.
The Parties agree that after the transfer of the NDA from
CVT to FHI in accordance with Section 7.1(a) above, the following
shall apply:
(a) FHI shall have the authority in its sole discretion to make
any and all decisions relative to all clinical, manufacturing and
regulatory matters from and after the date of transfer of the NDA
for the first Licensed Product to FHI under Section 7.1(a) above,
including without limitation Post Approval Regulatory Issues.
Once such NDA is transferred to FHI, FHI shall own and hold all
such Regulatory Approvals, and any other Regulatory Approvals for
Licensed Products in the Territory, and shall be responsible for
the maintenance thereof at its own cost and expense.
(b) FHI shall have the sole authority and responsibility to
report any and all adverse events related to the use of Licensed
Products in the Territory from and after the date of the NDA for
the first Licensed Product is transferred to FHI under Section
7.1(a) above.
7.3 Adverse Events
. For so long as CVT is conducting any clinical trials of
Licensed Compounds or Licensed Products under this Agreement, CVT
shall own and maintain (or cause to be maintained) one (1) or
more databases of adverse event information for such trials. If
FHI conducts any clinical trials of Licensed Compounds or
Licensed Products under this Agreement, FHI shall own and
maintain (or cause to be owned and maintained) one (1) or more
databases of adverse drug event information for such trials, and
after the transfer of the NDA to FHI under Section 7.1(a) above,
FHI shall own and maintain (or cause to be maintained) one (1) or
more databases of product complaints and adverse drug event
information for all Licensed Products sold by FHI or its
Affiliates or Sublicensees in the Territory. Each Party shall
provide the other with access to such database as requested to
meet the requesting Party's regulatory obligations. The Parties
shall establish in writing and maintain a procedure for the
mutual exchange of adverse event reports and safety information
associated with Licensed Compounds or Licensed Products, to
permit each Party to satisfy its respective regulatory
requirements.
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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7.4 Licensed Product Recalls, Withdrawals and Safety
Notifications.
(a) Licensed Product Sold by FHI. Subject to Section 7.4(b),
with respect to any Licensed Product sold by FHI or its
Affiliates or Sublicensees under this Agreement, FHI in its sole
discretion as the controlling Party shall determine if such
Licensed Product should be recalled, withdrawn or the subject of
a safety notification.
(b) Licensed Product Sold by CVT. In the event the licenses to
FHI become co-exclusive with CVT under Section 4.4, or if this
Agreement is terminated under Section 12.3 with respect to a
particular indication for a Licensed Product, with respect to any
Licensed Product (if any) for any indication sold by CVT or its
Affiliates or sublicensees in such circumstances under this
Agreement, CVT in its sole discretion as the controlling Party
shall determine if such Licensed Product should be recalled,
withdrawn or the subject of a safety notification if such
Licensed Product (or a Licensed Product for such indication) is
not being sold under an NDA held by FHI; provided, however, that
if such Licensed Product (or a Licensed Product for such
indication) is being sold under an NDA held by FHI, FHI as the
NDA holder shall determine in good faith as the controlling Party
if such Licensed Product should be recalled, withdrawn or the
subject of a safety notification, after first consulting with
CVT, and if such Licensed Product (or a Licensed Product for such
indication) is being sold under an NDA held jointly by FHI and
CVT, the Parties shall consult and agree on how to proceed before
taking any such action hereunder.
(c) Direction and Cooperation. Any such action shall occur
under the direction of the controlling Party(ies) (as provided in
Sections 7.4(a) and (b) above), who shall notify the other Party
promptly following its determination to take such action, and the
other Party shall cooperate as reasonably requested.
(d) Expenses. The out-of-pocket expenses incurred by either
Party in connection with any notification, shipping, disposal and
return of the Licensed Product that is the subject of a recall,
withdrawal or safety notification shall be paid by the
controlling Party(ies) (as provided in Sections 7.4(a) and (b)
above), except for any expenses or other Losses (as defined in
Section 13.1) that are the responsibility of an indemnifying
Party as provided in Article 13.
8. Licenses
8.1 Licenses To FHI.
(a) Subject to the terms of this Agreement, CVT hereby grants to
FHI an exclusive, royalty-bearing license under the Licensed
Technology to develop, make, have made, use, offer for sale,
sell, import and export Licensed Compounds and Licensed Products
for the FHI Field in the Territory. FHI may grant sublicenses
under such license rights without CVT's prior approval to
Affiliates of FHI and to Third Parties, provided that CVT's prior
written consent to a sublicense (not to be unreasonably withheld
or delayed) shall be required if such sublicensee shall have
responsibility for marketing and sales of Licensed Compounds and
Licensed Products (in any case, a "Sublicensee").
Notwithstanding the foregoing however, FHI may grant sublicenses
under such license rights without CVT's prior approval if the
Sublicensee is in the Territory outside of the U.S. and/or will
not be the primary entity marketing and selling
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the Licensed Compound and/or Licensed Product in the Territory. Any
Sublicensee shall agree to be bound by the terms and conditions
of this Agreement. FHI shall provide written notification to CVT
of any Sublicensee for which CVT's prior consent is not required
hereunder, within thirty (30) days of granting the sublicense.
Notwithstanding the foregoing exclusive grant of rights to FHI,
FHI agrees that CVT retains the right to use and practice the
Licensed Technology to develop Licensed Compounds and Licensed
Products as agreed upon under the Development Program and under
this Agreement.
(b) FHI hereby covenants that it will use and practice the
Licensed Technology in accordance with the terms and conditions
of this Agreement and in substantial compliance with all
applicable laws and regulations.
8.2 Licenses To CVT
. FHI and CVT hereby agree on the following license rights
to CVT to use the FHI Development Technology (as defined in
Section 1.17), including, without limitation, the Collaborative
Clinical Data in the FHI Field and the FHI Clinical Data in the
Development Field:
(a) As provided in Section 3.7 above, FHI hereby grants to CVT
an exclusive (except as to FHI) license (with the right to
sublicense) to use the Collaborative Clinical Data in the FHI
Field and the FHI Clinical Data in the Development Field outside
of the Territory to develop, make, have made, use, market, sell,
export and import any pharmaceutical products (including any
Licensed Products), in consideration for CVT's payment to FHI of
the royalty provided in Section 3.7 above, and an exclusive
(except as to FHI) royalty-free license (with the right to
sublicense) to use and practice all other FHI Development
Technology (other than Collaborative Clinical Data and FHI
Clinical Data) outside of the Territory to develop, make, have
made, use, market, sell, export and import any pharmaceutical
products (including any Licensed Products).
(b) In the event CVT exercises its right to convert the licenses
granted to FHI hereunder from exclusive to co-exclusive under
Section 4.4 above, FHI automatically shall be deemed to grant to
CVT a co-exclusive (with FHI) license (with right to sublicense)
to use any and all FHI Development Technology to use, market,
sell, export and import any Licensed Product inside the
Territory.
(c) In connection with termination of the Agreement (if any),
FHI automatically shall grant CVT an exclusive (except as to FHI)
license (with right to sublicense) to use any and all FHI
Development Technology as provided in Section 12.6(b) below.
8.3 Non-Compete
. CVT hereby covenants that for the Term, and for [ * ]
following expiration thereof pursuant to Section 12.1, CVT shall
not, and shall not grant a license to a Third Party to, in whole
or in part, develop, manufacture, sell, distribute or
commercialize products in the Territory in the Development Field;
provided however, that in the event that FHI's licenses under
Section 8.1 become co-exclusive with CVT as provided in Section
4.4 above, or upon termination of this Agreement pursuant to
Section 12.2, 12.3, 12.4 or 12.5 below, upon such license
conversion or termination, as the case may be, CVT shall have no
further obligations to FHI under this Section 8.3.
Notwithstanding the foregoing, however, in the event that under
Section 12.3 below, there is only a partial termination of this
Agreement and the
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indication for which this Agreement is still in
effect is in the Development Field in the United States, CVT's
obligations under this Section 8.3 shall remain in full force and
effect. Nothing in this Section 8.3 shall be construed or implied
in any manner to limit or narrow the scope of FHI's exclusive
licenses described in Section 8.1.
8.4 Reservation of Rights
. CVT reserves all rights to use the Licensed Technology,
except as otherwise expressly granted to FHI pursuant to this
Agreement, including, without limitation, the right of CVT (with
or without Third Parties or Affiliates) to freely use, assign,
transfer, grant licenses thereunder and otherwise dispose of the
Licensed Technology for any purpose(s) that do(es) not conflict
with and is(are) consistent with the terms and conditions of this
Agreement. Nothing in this Agreement shall be construed or
implied in any manner to grant FHI any license rights with
respect to any technology of CVT other than as expressly set
forth in this Agreement.
8.5 Right of First Negotiation for FHI.
(a) Subject to the terms and conditions of this Section 8.5, CVT
hereby grants to FHI a right of first negotiation to obtain a
license under the Licensed Technology to develop, use, make, have
made, import, export, offer for sale and sell Licensed Products
in the rest of the world outside of the Territory (an "Ex-North
American License").
(b) CVT shall notify FHI in writing if it intends to grant a
license under the Licensed Technology to a Third Party to
develop, use, make, have made, import, export, offer for sale or
sell Licensed Products for some or all of the world outside of
the Territory. CVT will not grant a Third Party such a license
prior to the completion of the initial Phase I Clinical Trial for
a Licensed Product hereunder. FHI shall then have a period of
forty-five (45) days from its receipt of such notice (the "FHI
Notification Period") to notify CVT in writing if FHI is
interested in obtaining an Ex-North American License. If, by the
end of FHI Notification Period, CVT receives written notice from
FHI that it desires to obtain such a license, which notice shall
include FHI's proposed terms for such license, then CVT and FHI,
for a period of ninety (90) days or such longer period of time as
mutually agreed to in writing by the Parties (the "FHI
Negotiation Period"), shall negotiate in good faith the terms
upon which the Parties would be willing to enter into an
agreement for such license, and if such terms are agreed upon,
then the Parties shall enter into a definitive written agreement
pursuant to which CVT shall grant to FHI an Ex-North American
License. Neither Party shall be obligated to enter into any
agreement under this Section 8.5 except on terms acceptable to
such Party in its sole discretion.
(c) If the Parties fail to execute a definitive written
agreement for an Ex- North American License by the end of the FHI
Negotiation Period, or if CVT does not receive written notice
from FHI that it is interested in obtaining an Ex-North American
License by the end of the FHI Notification Period, then FHI's
right of first negotiation shall terminate and CVT shall have no
further obligations to FHI under this Section 8.5.
(d) Notwithstanding Section 8.5(c) above, in the event that the
Parties have conducted negotiations pursuant to Section 8.5(b),
but have not executed a definitive written agreement for an Ex-
North American License by the end of the FHI Negotiation Period,
then CVT agrees that it shall not enter into an agreement to
grant a license under the Licensed
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Technology with a Third Party,
the territory for which includes Japan, on economic terms (which
economic terms shall include without limitation marketing and
selling capabilities and other expertise of such Third Party)
that taken as a whole are less favorable to CVT than those last
proposed in writing by FHI, unless CVT first offers FHI the
opportunity to accept such terms. CVT shall notify FHI in
writing of such terms, and unless within thirty (30) days of
FHI's receipt of such notice, CVT receives written notice from
FHI that FHI accepts such terms, then CVT shall have no further
obligations to FHI under this Section 8.5.
8.6 Right of First Negotiation for CVT.
(a) Subject to the terms and conditions of any underlying
license agreements for [ * ] that FHI may have with [ * ] and/or
any other Third Party and subject to the terms and conditions of
this Section 8.6, FHI hereby grants to CVT a right of first
negotiation to obtain a license of FHI's rights and interests in
the Licensed Compounds, [ * ] in the [ * ] and [ * ].
(b) FHI shall notify CVT in writing if it intends to grant a
license of its rights and interests in the [ * ] to a Third
Party. CVT shall then have a period of forty-five (45) days from
its receipt of such notice (the "CVT Notification Period") to
notify FHI in writing if CVT is interested in obtaining a license
to the [ * ]. If by the end of CVT Notification Period FHI
receives written notice from CVT that it desires to obtain such a
license, which notice shall include CVT's proposed terms for such
license, then CVT and FHI, for a period of ninety (90) days or
such longer period of time as mutually agreed to in writing by
the Parties (the "CVT Negotiation Period"), shall negotiate in
good faith the terms upon which the Parties would be willing to
enter into an agreement for such license, and if such terms are
agreed upon, then the Parties shall enter into a definitive
written agreement pursuant to which FHI shall grant to CVT such a
license. Neither Party shall be obligated to enter into any
agreement under this Section 8.6 except on terms acceptable to
such Party in its sole discretion.
(c) If the Parties fail to execute a definitive written
agreement for such license by the end of the CVT Negotiation
Period, or if FHI does not receive written notice from CVT that
it is interested in obtaining such a license by the end of the
CVT Notification Period, then CVT's right of first negotiation
shall terminate and FHI shall have no further obligations to CVT
under this Section 8.6.
(d) Notwithstanding anything to the contrary contained in this
Agreement, in no event shall FHI have any obligation under this
Section 8.6 if FHI desires to license, sell and/or grant any
other rights in whole or in part to its parent or any Affiliate.
(e) Notwithstanding Section 8.6(c) above, in the event that the
Parties have conducted negotiations pursuant to Section 8.6(b),
but have not executed a definitive written agreement for a
license to the [ * ] by the end of the CVT Negotiation Period,
then FHI agrees that it shall not enter into an agreement to
grant a license to a Third Party on economic terms (which
economic terms shall include without limitation marketing and
selling capabilities and other expertise of such Third Party)
that taken as a whole are less favorable to FHI than those last
proposed in writing by CVT, unless FHI first offers CVT the
opportunity to accept such terms. FHI shall notify CVT in
writing of such terms, and unless within thirty (30) days of
CVT's
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receipt of such notice, FHI receives written notice from
CVT that CVT accepts such terms, then FHI shall have no further
obligations to CVT under this Section 8.6.
8.7 Trademarks.
(a) CVT Trademarks. CVT hereby grants to FHI the non-exclusive,
royalty free license to use its relevant CVT Trademarks solely in
connection with the commercialization of Licensed Products
hereunder during the Term of this Agreement, and subject to the
terms and conditions of this Agreement including the remainder of
this Section 8.7.
(b) Use of CVT Trademarks.
(i) FHI agrees to conform to reasonable quality control
standards of CVT with respect to the goods sold and services
provided in connection with the CVT Trademarks. FHI recognizes
and agrees that no ownership rights are vested or created by the
limited rights of use granted to FHI in connection with this
limited use of the CVT Trademarks, and that all use thereof
inures to the benefit of CVT. Further, except when used strictly
in accordance with such quality control standards provided by
CVT, FHI shall submit to CVT any materials bearing the CVT
Trademarks for review and approval prior to the use thereof and
shall make no use of the CVT Trademarks without CVT's prior
written consent. CVT agrees that it will cooperate with FHI in
order to allow FHI to meet its obligations to CVT under Section
4.5.
(ii) FHI shall execute any documents required in CVT's reasonable
opinion to be entered as a "registered user" or recorded licensee
of the CVT Trademarks, or to be removed as registered user or
licensee thereof.
(c) FHI Trademarks. CVT shall have no right to use FHI
Trademarks.
(d) Product Trademarks. FHI shall own all Product Trademarks.
9. Intellectual Property
9.1 Ownership.
(a) Notwithstanding anything to the contrary in this Agreement,
but subject to Section 3.7(a), CVT shall remain the sole owner of
the Licensed Technology (except for any joint inventions or other
joint Improvements of CVT and FHI under this Agreement as
provided under Sections 9.1(c) or (d) below), and of all
intellectual property that it owned as of the Effective Date, and
FHI shall be the sole owner of all of any FHI Clinical Data (if
any), the Collaborative Clinical Data and the FHI Development
Technology and any intellectual property that it owned as of the
Effective Date.
(b) CVT shall own all right, title and interest to the CVT
Trademarks. FHI shall own all right, title and interest to the
Product Trademarks and the FHI Trademarks.
(c) Any and all inventions discovered solely by CVT under this
Agreement shall be solely owned by CVT. Any and all inventions
discovered solely by FHI under this
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Agreement shall be solely
owned by FHI. Any and all inventions made under this Agreement
jointly by employees or agents of (or others obligated to assign
inventions to) CVT and FHI respectively shall be jointly owned by
CVT and FHI, and the Parties shall jointly own any Patents on any
jointly owned inventions hereunder. All determinations of
inventive contribution and inventorship shall be determined under
United States laws of inventorship.
(d) Any and all Improvements that are not inventions (covered by
Section 9.1(c) above) and that are discovered solely by CVT under
this Agreement shall be solely owned by CVT. Any and all such
Improvements discovered solely by FHI under this Agreement shall
be solely owned by FHI. Any and all such Improvements made under
this Agreement jointly by employees or agents of (or others
obligated to assign any such Improvements to) CVT and FHI
respectively shall be jointly owned by CVT and FHI.
9.2 Patent Matters.
(a) Licensed Patents.
(i) CVT shall have the first right, but not the obligation to
file applications for, prosecute and maintain the Licensed
Patents (including, without limitation, any Licensed Patents that
consist of Patents jointly owned with FHI under Section 9.1
above). CVT shall use commercially reasonable diligent efforts to
prosecute and maintain the Licensed Patents. CVT shall keep FHI
regularly informed as to the status and issuance of the
applications for the Licensed Patents. CVT must give timely
advance notice to FHI of all intended actions and copies of all
correspondence that would impact on the existence or scope of the
Licensed Patents and CVT (along with its patent counsel) will
seriously consider all comments and suggestions made by FHI (or
its patent counsel) relating to the prosecution of the Licensed
Patents, before any documents, correspondence or other papers are
filed with the United States Patent and Trademark Office or other
comparable office in the Territory. FHI shall reimburse CVT for [
* ] of the costs and expenses incurred by CVT in the filing,
prosecution and maintenance of the Licensed Patents in the
Territory following the Effective Date; provided that FHI shall
have no payment obligations under this Section 9.2(a)(i) with
respect to any extraordinary costs or expenses related to an
interference proceeding (other than an interference brought by or
on behalf of [ * ]) or legal or administrative action in
connection with the Licensed Patents. In the event that FHI
notifies CVT that it does not wish to pay its share of the costs
and expenses of filing, prosecution or maintenance of a
particular Licensed Patent, such Licensed Patent thereafter shall
cease to be deemed a "Licensed Patent," and FHI shall have no
further obligations under this Section 9.2(a)(i) with respect to
such Patent and no further license rights with respect to such
Patent under this Agreement.
(ii) In the event that FHI notifies CVT in writing that FHI
desires that CVT file a patent application in a particular
country in the Territory covering a particular invention in the
Licensed Know-How, and CVT fails to file such application within
one hundred and twenty (120) days of receiving such notice, or
such shorter period of time that may be required to preserve such
patent rights, then FHI shall thereafter have the right but not
the obligation to file and prosecute such application and
maintain any Patents issuing therefrom in the Territory, at FHI's
expense. Following CVT's receipt of written notice from FHI
confirming
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that FHI intends to so file and prosecute such
application, CVT shall assign to FHI all of its right, title and
interest in such application and Patents issuing therefrom in the
Territory.
(b) In the event that a Party that has responsibility for the
filing, prosecution and maintenance of a Patent under this
Section 9.2 (the "Responsible Party") intends to abandon the
prosecution or maintenance of such Patent, it shall notify the
other Party no later than one hundred twenty (120) days prior to
the date that it intends to abandon the prosecution or
maintenance, as applicable, of such Patent, and in any event, no
later than sixty (60) days prior to the date that a payment,
response or other action is required by the applicable patent
agency in order to keep such Patent effective. Such other Party
must notify the Responsible Party within such one hundred twenty
(120) day period that such other Party wishes to assume the
responsibility for prosecuting (if applicable) and maintaining
such Patent, whereupon the Responsible Party shall permit the
other Party to take over the prosecution (if applicable) or
maintenance of such Patent, and shall cooperate with such other
Party in the transfer of such responsibilities. Thereafter, the
original Responsible Party shall have no further obligation or
rights under this Section 9.2 with respect to such Patent, and
the other Party shall have the right, but not the obligation, to
prosecute (if applicable) and maintain such Patent at its
expense.
(c) Without limiting the generality of CVT's obligations to keep
FHI informed as to the status of the Licensed Patents described
in Section 9.2(a), the Responsible Party (as defined in Section
9.2(b) above) shall keep the other Party regularly informed as to
the status and issuance of all Patent applications for which the
Responsible Party has the obligation to prosecute under this
Section 9.2. The Responsible Party must give timely advance
notice to the other Party of all intended actions and copies of
all correspondence that would impact on the existence or scope of
such Patents with respect to the manufacture, use or sale of the
Licensed Compounds and Licensed Products. The Responsible Party
(along with its patent counsel) will seriously consider all
comments and suggestions made by the other Party relating to the
filing and prosecution of such Patent applications before any
documents, correspondence, and other communications are filed
with the United States Patent and Trademark Office or its foreign
equivalent. All Information, including without limitation all
documents and materials and the existence thereof, disclosed by
the Responsible Party to the other Party pursuant to this Section
9.2(c) shall be deemed Confidential Information and subject to
Article 10.
9.3 Defense and Settlement of Third Party Claims
. FHI shall control the defense of any suits, actions or
claims by a Third Party alleging infringement of a Third Party's
Patent rights by the manufacture, use, sale, offer for sale,
export and/or import by FHI, its Affiliates or Sublicensees of a
Licensed Compound and/or Licensed Product. If the basis for such
claim of infringement arises from or involves any Licensed
Technology, data and/or any Information provided to FHI by CVT or
developed by CVT or otherwise generated by either Party in
connection with the Collaboration pursuant to this Agreement, the
Parties shall share all costs, expenses, fees, charges, monies
and/or royalties (collectively "Costs"), paid in connection with
any such suits, actions or claims or to any Third Party in past
or prospective settlement as follows: [ * ] of all Costs to be
paid by FHI and [ * ] of all Costs to be paid by CVT; provided,
however, that such Costs to be shared hereunder shall not include
any costs, expenses or other amounts included or includible under
the royalty offset provisions of Section 5.8 above. Without
limiting the generality of the foregoing, the Parties shall also
share in the same fashion [ * ]any
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and all Costs (subject to the
foregoing proviso) in the event a suit, action or claim brought
by [ * ] alleges that the practice of any of the Licensed Patents
infringes any of [ * ] Patent rights. The Parties will
reasonably cooperate with one another with respect to any such
Third Party suits, actions or claims.
9.4 Infringement By Third Parties
. FHI and CVT shall each promptly notify the other in
writing if it learns of any actual, alleged or threatened
infringement of the Licensed Patents by a Third Party. FHI shall
have the first right, but not the obligation, at its own expense,
to bring suit (or take other appropriate legal action) against
any actual, alleged or threatened infringement of the Licensed
Patents by a Third Party, including the defense and settlement
thereof (subject to Section 9.5 below), to the extent such
infringement relates to a Licensed Compound or a Licensed Product
in the Territory. If FHI does not initiate an infringement
action or otherwise abate any such actual, alleged or threatened
Third Party infringement of the Licensed Patents within ninety
(90) days of the later of (i) receiving notification from CVT
under this Section 9.4 of such infringement, (ii) sending notice
to CVT under this Section 9.4 of such infringement, or (iii) a
written request from CVT to take action with respect to such
infringement, or if such infringement is outside the scope of
FHI's first right to take action as provided above, then CVT
shall have the right, but not the obligation, at its own expense,
to bring suit (or take other appropriate legal action) against
any such actual, alleged or threatened infringement of the
Licensed Patents by a Third Party, including the defense and
settlement thereof (subject to Section 9.5 below). In the event
either Party brings an infringement action in accordance with
this Section 9.4, the other Party shall provide reasonable
assistance and authority to file and bring the action, including,
if required to bring such action, being joined as a party
plaintiff; provided, however, that neither Party shall be
required to transfer any right, title or interest in or to any of
its property to the other Party or a Third Party to confer
standing on a Party hereunder. In addition, if either Party
brings an infringement action hereunder, the other Party shall
have the right to be represented separately in such action by
counsel of its own choice, at its own expense. Any recovery
realized as a result of such suit, claim or action or related
settlement shall first be applied pro rata to reimburse the
Parties' costs and expenses in connection with such suit, claim
or action, and any remaining amounts shall belong to the Party
bringing the suit, action or claim, or fifty percent (50%) to
each Party if the suit is brought jointly.
9.5 Settlements
. Neither Party may enter into any settlement or consent
judgment or other voluntary final disposition of a suit under
this Article 9 without the prior written consent of the other
Party.
9.6 Cooperation
. Each Party agrees to cooperate with the other and take
all reasonable additional actions as may be reasonably required
to achieve the intent of this Article 9, including, without
limitation, the execution of necessary and appropriate
instruments and documents.
10. Confidentiality
10.1 Treatment of Confidential Information
. A Party receiving or gaining access to Confidential
Information, as defined below, (the "Receiving Party") of the
other Party (the
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"Disclosing Party") will (i) maintain in
confidence such Confidential Information to the same extent the
Receiving Party maintains its own proprietary information (but at
a minimum each Party shall use commercially reasonable efforts),
(ii) not disclose such Confidential Information to any Third
Party without prior written consent of the Disclosing Party,
except for disclosures made in confidence to any Third Party
pursuant to a plan approved in advance by the Management
Committee, and (iii) not use such Confidential Information for
any purpose except those permitted by this Agreement. As used
herein, "Confidential Information" shall mean all Information,
and other information and materials, received by the Receiving
Party from the Disclosing Party pursuant to this Agreement or
designated Confidential Information hereunder. A Party shall have
no non-disclosure or non-use obligations under this Article 10
with respect to any portion of any Confidential Information
which:
(a) is generally known or available to the public through no act
or failure to act on the part of the Receiving Party; or
(b) was known to the Receiving Party as shown by its written
records, without obligation to keep it confidential, prior to
when it was received from the Disclosing Party; or
(c) is subsequently disclosed to the Receiving Party by a Third
Party lawfully in possession thereof without obligation to keep
it confidential; or
(d) has been independently developed by the Receiving Party
without the aid, application or use of Confidential Information
or any other breach of this Article 10 as shown by the Receiving
Party's written records.
10.2 Permitted or Required Disclosures
. A Party shall have no non-disclosure obligation under
this Article 10 with respect to any portion of Confidential
Information which is required by law to be disclosed, but then
only to the limited extent of such legally required disclosure;
and provided that (a) the Disclosing Party is notified reasonably
in advance of such disclosure by the Receiving Party and (b) the
Receiving Party cooperates as reasonably requested with the
Disclosing Party in attempting to obtain confidential or other
protective treatment of such Confidential Information. In
addition to the foregoing, either Party may disclose Confidential
Information of the other Party under this Agreement to the extent
such disclosure is reasonably necessary in filing, prosecuting or
maintaining Patents, prosecuting or defending litigation,
enforcing rights and/or obligations under this Agreement,
conducting pre-clinical or human clinical testing of Licensed
Products, or conducting each Party's respective Manufacturing
Activities under this Agreement, in each case consistent with the
other terms and conditions of this Agreement.
10.3 Publicity
. The Parties agree that the public announcement of the
execution of this Agreement shall be in the form of the press
release attached as Schedule 10.3. Any other publication, news
release or other public announcement relating to this Agreement
or to the performance hereunder, shall first be reviewed and
approved by both Parties, which approval shall not be
unreasonably withheld or delayed; provided, however, that a Party
may reuse a previously approved disclosure without having to re-
obtain the other Party's consent. In addition, notwithstanding
the foregoing provisions any disclosure which is required by law
as advised by the disclosing Party's counsel may be made without
the prior consent of the other
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
Party, although the other Party
shall be given prompt notice of any such legally required
disclosure and to the extent practicable shall provide the other
Party an opportunity to comment on the proposed disclosure. In
this regard, the Parties recognize that CVT is a publicly-held
biotechnology company, that the Licensed Products are among CVT's
first potential products and that CVT will need to provide
information regarding the status of the Licensed Compounds and
Licensed Products to the investment community from time to time.
The Parties acknowledge that CVT will be obligated to file a copy
of this Agreement with the U.S. Securities and Exchange
Commission. CVT will submit a copy of its proposed filing to FHI
for review and comment prior to filing.
10.4 Terms of the Agreement
. The Parties agree that the material terms of this
Agreement will be considered Confidential Information of both
Parties. Notwithstanding the foregoing, each Party shall have
the right to disclose the material terms of this Agreement in
confidence to any bona fide potential investor, or investment
banker, provided that such Party shall receive, an adequate
binder of confidentiality consistent and substantially similar to
the terms contained in this Article 10 and this Agreement.
10.5 Survival of Confidentiality
. All obligations of confidentiality and non-use imposed
upon the Parties under this Agreement shall continue indefinitely
until such time as the information that is subject to such
obligations no longer comprises Confidential Information under
one of the exceptions set forth in Section 10.1.
11. Representations, Warranties and Covenants
11.1 Mutual Representations and Warranties
. CVT and FHI each represent, warrant and covenant to the
other that: (a) it has the authority and right to enter into and
perform this Agreement; (b) its execution, delivery and
performance of this Agreement will not conflict in any material
fashion with the terms of any other agreement to which it is or
becomes a party or by which it is or becomes bound; (c) it shall
comply in all material respects with all laws, rules, regulations
and other governmental requirements applicable to its actions
under this Agreement; and (d) no consent of any Third Party is
required for either Party to grant the licenses and rights
granted to the other Party under this Agreement and/or to perform
its obligations hereunder.
11.2 CVT Representations, Warranties and Covenants
. CVT hereby represents, warrants and covenants to FHI as
follows:
(a) CVT owns or Controls the Licensed Technology;
(b) CVT has not as of the Effective Date, and during the Term of
the Agreement will not, grant any right to any Third Party under
the Licensed Technology that would conflict with any of the
rights granted to FHI under this Agreement;
(c) To the best of CVT's knowledge as of the Effective Date, the
practice of the Licensed Patents in the Territory would not
infringe any intellectual property rights of any Third Party, and
there has been no lapse of any claims within the Licensed
Patents;
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
(d) To the best of CVT's knowledge as of the Effective Date: (i)
CVT has disclosed to FHI all material Information in its
possession or Control relating to the Licensed Compounds and the
Licensed Products; and (ii) there is no prior art that has not
been cited by CVT to the United States Patent and Trademark
Office that CVT believes to be material to the patentability of
any claims within the Licensed Patents in the Territory;
(e) CVT has conducted and shall conduct all pre-clinical studies
for the Licensed Compounds and Licensed Products in substantial
compliance with then-current good laboratory practices as defined
and/or required by Regulatory Authorities, and all applicable,
laws, rules, regulations and guidelines governing the conduct of
pre-clinical and clinical studies in the Territory. CVT shall
conduct all clinical studies for the Licensed Compounds and the
Licensed Products in substantial compliance with then-current
good clinical practices as they are defined and/or required by
Regulatory Authorities, and all applicable laws, rules,
regulations and guidelines governing the conduct of clinical
studies in the Territory. To the best of CVT's knowledge as of
the Effective Date, neither CVT nor any of the laboratories or
other individuals or entities participating in such pre-clinical
studies have been or are "debarred" as such term is used in
Section 335a of the United States Code. To the best of CVT's
knowledge as of the Effective Date, any and all necessary
financial disclosures relating to clinical investigators have
been obtained in accordance with United States Code of Federal
Regulations 21 CFR part 54, from the investigators and/or
institutions participating in such clinical studies to the extent
required; and
(f) As of the Effective Date, CVT has not received any notices
or communications that the development, manufacture, use, sale,
exportation or importation of the Licensed Compounds and/or
Licensed Products would infringe any intellectual property rights
of any Third Party in the Territory.
11.3 FHI Representations, Warranties and Covenants
. FHI hereby represents, warrants and covenants to CVT as
follows:
(a) FHI has not as of the Effective Date, and during the Term of
the Agreement will not, grant any right to any Third Party under
any agreement or arrangement that would conflict with any of the
rights granted to CVT under this Agreement;
(b) With respect to any aspects of the Development Program
conducted by FHI or any other activities conducted by FHI to
develop Licensed Compounds and Licensed Products and/or
manufacturing capacity therefor, FHI shall conduct all such
activities in substantial compliance with then-current good
practices (including good manufacturing practices) as they are
defined and/or required by Regulatory Authorities, and all
applicable laws, rules, regulations and guidelines governing such
activities in the Territory.
11.4 Disclaimer of Warranty
. Each Party acknowledges that the other Party cannot
assure the safety, usefulness or efficacy of any Licensed
Compound or Licensed Product for any use. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTY CONCERNING ITS PATENT RIGHTS OR
INFORMATION LICENSED UNDER THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION THE VALIDITY OR SCOPE OF ITS PATENT
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
RIGHTS OR THAT PRODUCTS WILL BE FREE FROM INFRINGEMENT OF THE PATENT RIGHTS
OF THIRD PARTIES. AND NEITHER PARTY MAKES ANY WARRANTY OF ANY
TECHNOLOGY'S, COMPOUND'S OR PRODUCT'S MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
12. Term and Termination
12.1 Term
. This Agreement shall become effective on the Effective
Date and shall remain in effect until expiration of all of FHI's
royalty obligations under Section 5.5 (the "Term"), unless
earlier terminated as provided in Sections 12.2, 12.3 or 12.4
below.
12.2 Termination by FHI
. FHI may terminate this Agreement at any time upon ninety
(90) days prior written notice to CVT, without owing payment of
any milestones falling due after the effective date of such
termination, but subject to Sections 12.5 and 12.6 below.
12.3 Termination by CVT
. CVT may terminate this Agreement on thirty (30) days
prior written notice to FHI, on a Licensed Product-by-Licensed
Product, indication-by-indication and country-by-country basis in
the Territory, in the event that FHI or its Affiliates or
Sublicensees fail to launch a Licensed Product in any such
country within [ * ] after Regulatory Approval to market such
Licensed Product is obtained for a particular indication in such
country, except if FHI's right to sell such Licensed Product
indication-by-indication in such country has been suspended by
the applicable Regulatory Authority of such country for a reason
other than FHI's or its Affiliate's, Sublicensee's or
distributor's misconduct.
12.4 Termination For Breach.
(a) If either Party believes that the other Party is in material
breach of this Agreement, then the non-breaching Party may
deliver notice of such breach to the other Party. In such notice
the non-breaching Party shall identify the actions or conduct
that such Party would reasonably consider to be an acceptable
cure of such material breach. The allegedly breaching Party
shall have sixty (60) days from such notice to cure such material
breach, or ten (10) business days from such notice if such breach
consists of a failure to pay any monies due and payable to the
other Party hereunder (in each case, the "Cure Period"). If the
Party receiving notice of material breach fails to cure such
breach within the applicable Cure Period, the Party originally
delivering the notice may terminate this Agreement effective
immediately on or after the end of the Cure Period by written
notice to the other Party.
(b) Subject to Article 14, termination of the Agreement under
this Section 12.4 shall not prevent a non-breaching Party from
seeking any available legal and/or equitable remedies for the
damages arising from or in connection with such material breach.
12.5 Termination Prior to NDA Submission
. Subject to Section 12.6, if FHI terminates this Agreement
pursuant to Section 12.2 above, or if CVT terminates this
Agreement pursuant to Section 12.4 above for FHI's breach, in
either case prior to CVT's submission of the first NDA for a
Licensed Product, then: (a) FHI shall reimburse CVT for seventy-
five percent (75%) of all budget completion fees incurred by CVT
in terminating any studies then being conducted pursuant to the
applicable Annual Plan and Budget which CVT (after using its
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
commercial reasonable efforts) was unable to cancel; and (b) CVT
shall reimburse FHI for twenty-five percent (25%) of all budget
completion fees incurred by FHI in terminating FHI Manufacturing
Activities and in terminating those development activities (if
any) assigned to FHI by the Management Committee under Section
3.4(a) above, or in the event FHI has assumed development under
Section 14.2(e) below, twenty five percent (25%) of all budget
completion fees incurred by FHI in such event in accordance with
Section 3.4(c), in any case which FHI (after using its commercial
reasonable efforts) was unable to cancel. Such fees which either
Party may owe the other under this Section 12.5 shall be due and
payable within thirty (30) days of a Party's receipt of an
invoice detailing such fees. Such reimbursement shall be in
addition to any other payments owed to either Party to the other
Party under this Agreement.
12.6 Effect of Termination
. Upon the effective date of any termination of this
Agreement at any time before expiration of the Term:
(a) All licenses granted by each Party to the other Party
pursuant to Article 8 above shall automatically terminate;
provided, however, that if CVT terminates this Agreement pursuant
to Section 12.3 above, then the foregoing termination of such
licenses shall only apply to the particular Licensed Product for
the particular indication in the particular country that was the
subject of such termination.
(b) Subject to Section 12.6(e) below, FHI automatically shall be
deemed to have granted to CVT an exclusive (except as to FHI),
irrevocable, perpetual, license with the right to sublicense
under the Collaborative Clinical Data in the FHI Field, the FHI
Clinical Data in the Development Field and under any other FHI
Development Technology, to develop, use, make, have made, import,
offer for sale and sell Licensed Compounds, Licensed Products and
any other pharmaceutical products worldwide; provided, however,
that if CVT terminates this Agreement pursuant to Section 12.3,
then the foregoing grant of license rights from FHI to CVT shall
apply only to the particular Licensed Product for the particular
indication in the particular country that was the subject of such
termination.
(c) Subject to Section 12.6(e) below, FHI automatically shall be
deemed to have granted to CVT an irrevocable, non-exclusive,
perpetual, sublicenseable right of reference to all Regulatory
Approvals (including without limitation NDAs) relating to the
Licensed Products, and shall cooperate with CVT (at CVT's
expense) to effect such grant in a timely and orderly fashion;
provided, however, that if CVT terminates this Agreement pursuant
to Section 12.3, then the foregoing grant of license rights from
FHI to CVT shall apply only to those Regulatory Approvals
relating to the particular Licensed Product for the particular
indication, in the particular country that was the subject of
such termination.
(d) FHI automatically shall be deemed to have granted to CVT
exclusive (even as to FHI) irrevocable, perpetual, sublicenseable
license to use the Product Trademarks solely in connection with
the development and commercialization of Licensed Products,
subject to CVT's compliance with reasonable quality control
requirements of FHI as customary in a trademark license (to be
agreed upon by the Parties at such time); provided, however, that
if CVT terminates this Agreement pursuant to Section 12.3 above,
then the foregoing license shall apply only to those Product
Trademarks that relate to the particular Licensed Product for the
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
particular indication in the particular country that was the
subject of such termination. The license granted to CVT under
this Section 12.6(d) shall be in consideration of the payment by
CVT to FHI of a royalty equal to [ * ] of the Total Consideration
from the sale of any Licensed Products throughout the world (or
Licensed Products for the particular indication in the particular
country, if applicable) by CVT, its Affiliates and/or its
sublicensees, where such royalty shall accrue and be paid on the
terms equivalent to those set forth in Sections 5.5 and 5.7
above. If FHI terminates this Agreement under Section 12.4
above, then the royalty in consideration of the license under
this Section 12.6(d) shall equal [ * ] of the Total
Consideration, and the other royalty terms set forth herein shall
apply.
(e) If this Agreement is terminated by either Party pursuant to
Section 12.2 or 12.4 above or partially terminated under Section
12.3 above, then the licenses described in Sections 12.6(b) and
(c) above shall be in consideration for CVT's payment to FHI of a
royalty equal to [ * ] of the Total Consideration from the sale
of any Licensed Products throughout the world (or Licensed
Products for the particular indication in the particular country,
if applicable) by CVT, its Affiliates and/or its sublicensees,
where such royalty shall accrue and be paid on terms equivalent
to those set forth in Sections 5.5 and 5.7 above; provided,
however, that the foregoing royalty obligation shall continue
until such time as the royalties paid by CVT to FHI under this
Section 12.6(e) have totaled [ * ] of the total amount of
Development Costs incurred by FHI in accordance with the
Development Plan, whereupon the licenses granted to CVT under
this Section 12.6 shall become fully paid-up and royalty-free
(except that only in the case of CVT termination of this
Agreement under Section 12.4 for FHI's breach of a payment
obligation to CVT, the licenses granted to CVT under this Section
12.6 shall be fully paid up and royalty-free).
(f) Following any termination of this Agreement or expiration of
the Term, FHI, its Affiliates and Sublicensees shall be entitled
to sell all of their finished inventory of Licensed Products in
existence on the date of any such termination or expiration,
subject to payment to CVT of royalties pursuant to Sections 5.5
and 5.7 above. Notwithstanding the foregoing, however, in no
event shall FHI, its Affiliates or Sublicensees be entitled to
manufacture any new inventory of Licensed Products (or for a
particular indication if there is a partial termination under
Section 12.3 above) from and after the effective date of such
termination.
12.7 Bankruptcy Rights
. In the event that this Agreement is terminated or
rejected by a Party or its receiver or trustee under applicable
bankruptcy laws due to such Party's bankruptcy, then all rights
and licenses granted under or pursuant to this Agreement by such
Party to the other Party are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the Bankruptcy Code and any
similar law or regulation in any other country, licenses of
rights to "intellectual property" as defined under Section
101(52) of the Bankruptcy Code. The Parties agree that all
intellectual property rights licensed hereunder, including
without limitation any patents or patent applications of a Party
in any country covered by the license grants under this
Agreement, are part of the "intellectual property" as defined
under Section 101(52) of the Bankruptcy Code subject to the
protections afforded the non-terminating Party under Section
365(n) of the Bankruptcy Code, and any similar law or regulation
in any other country.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
12.8 Survival
. The following provisions shall survive any expiration or
termination of this Agreement: Sections 3.7, 5.7, 5.8(a)(ii)(1)
and (2), 8.3 (to the extent provided therein) and 15.3 and
Articles 6, 9, 10, 11, 12, 13 and 14. Termination of this
Agreement shall not relieve either Party of any liability which
accrued hereunder prior to the effective date of such termination
nor preclude either Party from pursuing all rights and remedies
it may have hereunder or at law or in equity with respect to any
breach of this Agreement nor prejudice either Party's right to
obtain performance of any obligation. The remedies provided
under this Article 12 are cumulative, and are not exclusive of
other remedies available to a Party in law or equity.
13. Indemnification and insurance
13.1 By FHI
. FHI hereby agrees to indemnify, defend and hold harmless
CVT and its Affiliates, and their respective officers, directors,
agents and employees from and against any and all Third Party
suits, claims, actions, demands, liabilities, expenses and/or
loss, including reasonable legal expenses and attorneys' fees
(collectively, "Losses") resulting from (a) the development (to
the extent FHI conducts any of the development of the Licensed
Compounds and/or Licensed Products), use, manufacture, handling,
storage, transport, distribution, sale or other disposition of
the Licensed Compounds and/or Licensed Products by FHI, its
Affiliates, agents or Sublicensees, except to the extent such
Losses result from the negligence or wrongdoing of CVT, its
Affiliates, sublicensees, agents, representatives, consultants
and/or employees (Affiliates, Sublicensees (or in the case of
CVT, sublicensees), agents, representatives, consultants or
employees of either Party shall be collectively referred to
herein as such Party's "Representatives"); (b) FHI's breach of
any of its obligations, covenants, representations or warranties
under this Agreement; and/or (c) the negligence or wrongdoing of
FHI and/or any of its Representatives under this Agreement,
except to the extent such Losses result from the negligence or
wrongdoing of CVT and/or any of its Representatives.
13.2 By CVT
. CVT hereby agrees to indemnify, defend and hold harmless
FHI, its Affiliates, and their respective officers, directors,
agents and employees from and against any and all Losses
resulting from: (a) CVT's breach of any of its obligations,
covenants, representations or warranties under this Agreement;
(b) the negligence or wrongdoing of CVT and/or any of its
Representatives under this Agreement, except to the extent such
Losses result from the negligence or wrongdoing of FHI and/or any
of its Representatives; and/or (c) the development, use,
handling or other disposition of the Licensed Compounds and/or
Licensed Products by CVT and/or any of its Representatives in
connection with CVT's conduct of the Development Program, except
to the extent such Losses result from the negligence or
wrongdoing of FHI and/or any of its Representatives. In the event
the licenses granted to FHI are converted to co-exclusive
licenses with CVT under Section 4.4 or in the event there is a
partial termination of this Agreement under Section 12.3 as to a
particular indication for a Licensed Product, CVT hereby agrees
to indemnify, defend and hold harmless FHI, its Affiliates, and
their respective officers, directors, agents and employees from
and against any and all Losses resulting from the development,
use, manufacture, handling, storage, transport, distribution,
sale or other disposition of the Licensed Compounds and/or
Licensed Products by CVT and/or any of its Representatives,
except to the extent such Losses result from the negligence or
wrongdoing of FHI and/or any of its Representatives.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
13.3 Notice and Procedures
. In all cases where one Party seeks indemnification by the
other under this Article 13, the Party seeking indemnification
shall promptly notify the indemnifying Party of receipt of any
claim or lawsuit covered by such indemnification obligation and
shall cooperate fully with the indemnifying Party in connection
with the investigation and defense of such claim or lawsuit. The
indemnifying Party shall have the right to control the defense,
with counsel of its choice, provided that the non-indemnifying
Party shall have the right to be represented by advisory counsel
at its own expense. The indemnifying Party shall not settle or
dispose of the matter in any manner which could negatively and
materially affect the rights or liability of the non-indemnifying
Party without the non-indemnifying Party's prior written consent,
which shall not be unreasonably withheld or delayed.
13.4 Insurance
. The Parties shall maintain the insurance coverages
described on Schedule 13.4.
13.5 Patent Infringement Matters
. Any suit, claim or action related to infringement of any
Third Party Patents (including, without limitation, [ * ]) shall
be handled in accordance with the provisions of Section 9.3 and
each Party's indemnification obligations under this Article 13
shall not apply with respect to any such suit, claim or action.
14. Dispute Resolution
14.1 Disputes
. The Parties recognize that disputes as to certain matters
may from time to time arise during the Term which relate to
either Party's rights and/or obligations hereunder, or to the
interpretation, performance, breach, validity or termination of
this Agreement (a "Dispute", but excluding any determination as
to the validity of any Patents). It is the objective of the
Parties to establish procedures to facilitate the resolution of
Disputes arising under this Agreement in an expedient manner by
mutual cooperation and without resort to litigation. To
accomplish this objective, the Parties agree to follow the
procedures set forth in this Article 14 if and when a Dispute
arises under this Agreement. From the date of referral of any
Dispute hereunder to the Management Committee or senior
management of the Parties as provided below, and until such time
as any matter has been resolved by the Parties or has been
finally settled by arbitration hereunder, the running of the cure
periods (if any) as to which a Party must cure a breach that is
part of the subject matter of the Dispute shall be suspended.
Subject to Section 14.2 below, the Parties shall refer any
Dispute promptly to the Management Committee for attempted
resolution, if it has not been disbanded as provided in Section
2.7 above. If the Management Committee is unable to resolve any
dispute within thirty (30) days, or if it has been disbanded as
provided in Section 2.7 above, either Party may, by written
notice to the other Party, have such Dispute referred to each
Party's respective executive officers designated below or their
other senior management with settlement authority, for attempted
resolution by good faith negotiations within thirty (30) days
after such notice hereunder. Said designated officers are as
follows:
For FHI: Theron Odlaug
For CVT: Louis G. Lange
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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In the event the designated executive officers are not able to
resolve such Dispute within such thirty (30)-day period, the
Parties agree that such Dispute shall be resolved by binding
arbitration in accordance with this Section 14.1. If a Party
intends to begin arbitration to resolve such Dispute, such Party
shall provide written notice (the "Arbitration Notice") to the
other Party informing such other Party of such intention and the
issues to be resolved. Any arbitration hereunder shall be
conducted pursuant to the then-current Commercial Arbitration
Rules of the American Arbitration Association ("AAA"), including
the Supplementary Procedures for Large Complex Disputes (the "AAA
Rules"), except as modified herein. The arbitration shall be
conducted by a panel of three (3) arbitrators (the "Panel"), to
be mutually agreed upon by the Parties and appointed by the AAA
within thirty (30) days after the date the Arbitration Notice is
filed with the AAA by the Party initiating arbitration hereunder.
The individuals comprising the Panel are to act as neutral
arbitrators and shall have no past, present or anticipated future
affiliation with either Party or their respective counsel. If
the Parties are unable to agree upon all or any number of the
three (3) mutually acceptable arbitrators within thirty (30) days
after the filing of the Arbitration Notice with the AAA, the AAA
promptly shall appoint the arbitrator(s) to complete the Panel
after the demand for arbitration in accordance with the criteria
set forth in this Section 14.1. Also within thirty (30) days
after the filing of the Arbitration Notice with the AAA, the
Parties shall mutually agree upon the location of the
arbitration; provided, however, that if the Parties cannot
mutually agree on a location, then the arbitration shall be
conducted in the San Francisco Bay area, California, if the Party
initiating the arbitration is FHI or in the Chicago metropolitan
area, Illinois, if the Party initiating the arbitration is CVT.
The Panel shall apply the substantive law of the State of
California, without regard to its conflicts of laws provisions,
except that the interpretation of and enforcement of this Section
14.1 shall be governed by the Federal Arbitration Act. The Panel
shall issue appropriate protective orders to safeguard each
Party's Confidential Information. If a Party can demonstrate to
the Panel that the complexity of the issue or other reasons
warrant the extension of one or more of the timetables in the AAA
rules, the Panel may extend such timetables, but in no event
shall the proceeding extend more than one (1) year from the date
of filing of the Arbitration Notice with the AAA. The decision
of the Panel shall be in writing setting forth the basis
therefor. The Panel shall have the authority to award any remedy
allowed by law or in equity, including but not limited to
compensatory damages and/or prejudgment interest, and to grant
final, complete, interim, or interlocutory relief, including
specific performance, injunctions and other equitable relief, but
not punitive or other damages set forth in Section 14.5 (and the
Parties shall be deemed to have waived any right to such excluded
damages). Each Party shall bear its own costs, fees and expenses
in the arbitration and shall share equally the administrative
charges, arbitrators' fees and related expenses of the
arbitration, unless the Panel determines that one Party prevailed
clearly and substantially over the other Party, in which case the
non-prevailing Party shall also pay the fees of the Panel, as
well as (if ordered by the Panel) the prevailing Party's
reasonable attorneys' fees, expert witness costs and/or other
arbitration expenses. The Parties shall abide by the award
rendered in the arbitration, and such award may be enforced and
executed upon in any court having jurisdiction over the Party
against whom enforcement of such award is sought.
14.2 Disputes Under Sections 3.5(a) or 5.3
. In the event there is a Dispute (as defined in Section
14.1) regarding CVT's exercise of due diligence under Sections
3.5(a) or 5.3, the Parties shall follow the procedures set forth
in this Section 14.2. From the date of referral of any Dispute
hereunder to senior management of the Parties as provided below,
and until such
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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time as any matter has been resolved by the
Parties or has been finally settled by arbitration hereunder, the
running of the cure periods (is any) as to which a Party must
cure a breach that is part of the subject matter of the Dispute
shall be suspended, except as expressly provided in Section
14.2(a) below.
(a) If CVT fails to cure its material breach under Section
3.5(a) within the sixty (60) day cure period described in such
Section ("CVT Diligence Cure Period"), the Parties shall
immediately refer the Dispute hereunder to each Party's
respective executive officers designated below or their other
senior management with settlement authority for attempted
resolution by good faith negotiations immediately after the end
of the CVT Diligence Cure Period:
For FHI: Theron Odlaug
For CVT: Louis G. Lange
In the event the designated executive officers are not able to
resolve such Dispute within ten (10) days thereafter, the Parties
agree that such Dispute shall be resolved by binding arbitration
in accordance with Section 14.2(c).
(b) If FHI in its good faith judgment believes that CVT has not
been diligent in filing the IND (or other application to permit
human clinical testing outside of the United States) pursuant to
Section 5.3 above, then during the thirty (30)-day time period
set forth in the last sentence of Section 5.3, the Parties shall
immediately refer the Dispute hereunder to their respective
officers specified in Section 14.2(a) above for attempted
resolution. In the event such officers are not able to resolve
such Dispute within five (5) days thereafter, the Parties agree
that such Dispute shall be resolved by binding arbitration in
accordance with Section 14.2(c).
(c) If a Party intends to begin arbitration to resolve any
Dispute under this Section 14.2, such Party shall provide an
Arbitration Notice (as defined in Section 14.1) to the other
Party informing such other Party of the intention to begin
arbitration and the issues to be resolved. Any arbitration
hereunder shall be conducted by the AAA (as defined in Section
14.1) pursuant to the AAA Rules (as defined in Section 14.1),
except as modified herein. In the event arbitration is initiated
under this Section 14.2, the arbitration shall be conducted by a
Panel (as defined in Section 14.1), to be mutually agreed upon by
the Parties and appointed by the AAA within ten (10) days after
the date the Arbitration Notice is filed with the AAA by the
Party initiating arbitration hereunder. The Panel shall be
comprised of three (3) experts in the field of clinical trials
and/or drug development, and the individuals comprising the Panel
are to act as neutral arbitrators and shall have no past, present
or anticipated future affiliation with either Party or their
respective counsel. If the Parties are unable to agree upon or
all or any number of the three mutually acceptable experts
comprising the Panel within ten (10) days after the filing of the
Arbitration Notice with the AAA, the AAA shall promptly (but in
no event more than thirty (30) days thereafter)_ appoint the
arbitrator(s) to complete the Panel in accordance with the
criteria set forth in this Section 14.2(c). Also within ten (10)
days after the filing of the Arbitration Notice with the AAA, the
Parties shall mutually agree upon the location of the
arbitration; provided, however, that if the Parties cannot
mutually agree on a location, then the location criteria set
forth in Section 14.1 shall control. The Panel shall apply the
substantive law
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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of the State of California, without regard to its
conflicts of laws provisions, except that the interpretation of
and enforcement of this Section 14.2 shall be governed by the
Federal Arbitration Act. The Panel shall issue appropriate
protective orders to safeguard each Party's Confidential
Information. If a Party can demonstrate to the Panel that the
complexity of the issue or other reasons warrant the extension of
one or more of the timetables in the AAA rules, the Panel may
extend such timetables, but any arbitration proceeding under this
Section 14.2 shall be on an expedited basis, as determined by the
Panel, and in no event shall the proceeding extend more than one
hundred and twenty (120) days from the date of filing of the
Arbitration Notice with the AAA. The decision of the Panel
shall be in writing setting forth the basis therefor. The Panel
shall have the authority to determine whether or not CVT has met
its obligations under Section 3.5(a) or Section 5.3, as the case
may be, and/or has cured any material breach on its part within
the applicable CVT Due Diligence Cure Period, and the remedies
set forth in Sections 14.2(d) and (e) below shall be FHI's sole
remedy and recourse in the event of CVT's material breach under
Section 3.5(a) or Section 5.3. Each Party shall bear its own
costs, fees and expenses in the arbitration and shall share
equally the administrative charges, arbitrators' fees and related
expenses of the arbitration, unless the Panel determines that one
Party prevailed clearly and substantially over the other Party,
in which case the non-prevailing Party shall also pay the fees of
the Panel, as well as (if ordered by the Panel) the prevailing
Party's reasonable attorneys' fees, expert witness costs and/or
other arbitration expenses. The Parties shall abide by the
determination of the arbitrators, and such determination may be
enforced and executed upon in any court having jurisdiction over
the Party against whom enforcement of such award is sought.
(d) In the event the Panel determines that CVT has met its
obligations under Section 3.5(a) or Section 5.3, as the case may
be, and/or has cured any material breach on its part within the
applicable CVT Diligence Cure Period, CVT shall continue with the
Development Program under the terms and conditions of this
Agreement. In the event the Panel rules in CVT's favor, FHI
shall be precluded from sending CVT another Arbitration Notice
regarding CVT's material breach under Section 3.5(a) for a period
of at least twelve (12) months from the date of the Panel's
decision.
(e) In the event the Panel determines that CVT has not met its
obligations under Section 3.5(a) or Section 5.3, as the case may
be, and/or has not cured any such breach within the applicable
CVT Diligence Cure Period, then FHI has the right to elect, on
written notice to CVT, either: (i) to terminate this Agreement
under Section 12.4 (provided that there will be no additional
notice or cure period thereunder); or (ii) to assume control of
the Development Program, including without limitation the right
to act as chair and cast the tie-breaking vote of the Management
Committee under Sections 2.4 and 2.5 above. In the event the
Panel rules in FHI's favor, CVT shall still be responsible for
its twenty-five percent (25%) share of the Development Costs
under Section 3.4(c) above.
14.3 Governing Law
. Subject to Section 14.1 and 14.2 in the case of
arbitration thereunder, resolution of all Disputes arising out of
or related to this Agreement or the performance, enforcement,
breach or termination of this Agreement and any remedies relating
thereto, shall be governed by and construed under the substantive
laws of the State of California,
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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as applied to Agreements
executed and to be performed entirely in the State of California
by residents of the State of California.
14.4 Injunctive Relief
. Nothing in this Article 14 shall prevent either Party
from seeking a temporary restraining order or injunction against
the other Party as required to prevent such other Party's misuse
of the intellectual property or Confidential Information of the
Party seeking such temporary restraining order or injunction.
14.5 No Consequential Damages
. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR
ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES INCURRED BY EITHER PARTY UNDER THIS AGREEMENT OR
OTHERWISE.
15. Miscellaneous
15.1 Entire Agreement; Amendment
. This Agreement sets forth the complete, final and
exclusive agreement between the Parties with respect to the
subject matter hereof, and all of the covenants, promises,
agreements, warranties, representations, conditions and
understandings between the Parties hereto with respect to such
subject matter, and supersedes and terminates all prior
agreements and understandings between the Parties with respect to
such subject matter. There are no covenants, promises,
agreements, warranties, representations, conditions or
understandings, either oral or written, between the Parties with
respect to such subject matter other than as are set forth herein
and therein. No subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the Parties
unless reduced to writing and signed by an authorized officer of
each Party.
15.2 Force Majeure
. Both Parties shall be excused from the performance of
their obligations under this Agreement (including, without
limitation, under Sections 3.5(a), 4.2 or 5.3) to the extent that
such performance is prevented by force majeure and the non-
performing Party promptly provides notice of the prevention to
the other Party. Such excuse shall be continued so long as the
condition constituting force majeure continues and the non-
performing Party takes reasonable efforts to remove the
condition. For purposes of this Agreement, "force majeure" shall
include conditions beyond the control of the Parties, including
without limitation, an act of God, war, civil commotion, labor
strike or lock-out, failure of supplier to supply, epidemic,
failure or default of public utilities or common carriers,
destruction of production facilities or materials by fire,
earthquake, storm or like catastrophe;
15.3 Notices
. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this
Agreement and shall be deemed to have been sufficiently given for
all purposes on the same business day as delivered in person or
faxed (with machine confirmation of receipt), five (5) days after
mailing by U.S. first class certified or registered mail, postage
prepaid, and the next business day after express or courier
delivery service. Unless otherwise specified in writing, the
mailing addresses of the Parties shall be as described below:
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
For CVT: CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
Attention: Chief Executive Officer
With a copy to: General Counsel
Telephone: (650) 812-0585
Telecopy: (650) 858-0390
With a copy to: Cooley Godward LLP
3175 Hanover Street
Palo Alto, CA 94306
Attention: Robert L. Jones, Esq.
Telephone: (650) 843-5000
Telecopy: (650) 849-7400
For FHI: Fujisawa Healthcare, Inc.
Three Parkway North Center
Deerfield, IL 60015
Attention: General Counsel
With a copy to: the Chief Executive
Officer,
the Senior Vice President of
Finance, and
the Executive Vice President
Telephone: (847) 317-8870
Telecopy: (847) 317-7288
With a copy to: Richards & O'Neil, LLP
885 Third Avenue
New York, New York 10022-4873
Attention: Michael O. Braun, Esq.
Telephone: 212-207-1210
Telecopy: 212-750-9022
15.4 Consents Not Unreasonably Withheld or Delayed
. Whenever provision is made in this Agreement for either
Party to secure the consent or approval of the other, that
consent or approval shall not unreasonably be withheld or
delayed, and whenever in this Agreement provisions are made for
one Party to object to or disapprove a matter, such objection or
disapproval shall not unreasonably be exercised, unless expressly
stated that such consent is to be given in such Party's sole
discretion.
15.5 United States Dollars
. References in this Agreement to "Dollars" or "$" shall
mean the legal tender of the United States of America.
15.6 No Strict Construction
. This Agreement has been prepared jointly and shall not be
strictly construed against either Party.
15.7 Assignment
. Neither Party may assign or transfer this Agreement or
any rights or obligations hereunder without the prior written
consent of the other, except a Party may make
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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such an assignment
without the other Party's consent to a successor-in-interest to
substantially all of the business assets of such Party to which
this Agreement relates, whether in a merger, sale of stock, sale
of assets or other transaction. Any permitted successor or
assignee of rights and/or obligations hereunder shall, in a
writing to the other Party, expressly assume performance of such
rights and/or obligations. Any permitted assignment shall be
binding on the successors of the assigning Party. Any assignment
or attempted assignment by either Party in violation of the terms
of this Section 15.7 shall be null and void and of no legal
effect.
15.8 Performance by Affiliates
. The Parties recognize that each Party may perform some or
all of its obligations under this Agreement through one or more
of its Affiliates; provided, however, that each Party shall
remain responsible for and shall guarantee such performance by
its Affiliates and shall cause its Affiliates to comply with the
provisions of this Agreement in connection with such performance.
Each Party hereby expressly waives any requirement that the other
Party exhaust any right, power or remedy, or proceed against an
Affiliate, for any obligation or performance hereunder prior to
proceeding directly against such Party.
15.9 Counterparts
. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
15.10 Further Actions
. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may
be necessary or appropriate in order to carry out the purposes
and intent of this Agreement.
15.11 Severability
. If any one or more of the provisions of this Agreement is
held to be invalid or unenforceable by any court of competent
jurisdiction from which no appeal can be or is taken, then such
provision(s) shall be considered severed from this Agreement and
shall not serve to invalidate any remaining provisions hereof.
The Parties shall make a good faith effort to replace any invalid
or unenforceable provision with a valid and enforceable one such
that the objectives contemplated by the Parties when entering
this Agreement may be realized.
15.12 Ambiguities
. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be
deemed to have authored the ambiguous provision.
15.13 Headings
. The headings for each Article and Section in this
Agreement have been inserted for convenience of reference only
and are not intended to limit or expand on the meaning of the
language contained in the particular Article or Section.
15.14 No Waiver
. Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other
matter shall not constitute a waiver of such Party's rights to
the future enforcement of its rights under this Agreement,
excepting only as to an express written and signed waiver as to a
particular matter for a particular period of time.
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
In Witness Whereof, the Parties have executed this Agreement
in duplicate originals by their proper officers as of the date
and year first above written.
Fujisawa Healthcare, Inc. CV Therapeutics, Inc.
By: /s/ Noboru Maeda By: /s/ Louis Lange
Louis G. Lange, M.D., Ph.D.
Title: Chairman & CEO Title: Chairman & CEO
Date: July 10, 2000 Date: July 10, 2000
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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SCHEDULE 1.10
Designated Patents
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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SCHEDULE 3.3
Initial Plan and Budget
[ * ]
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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SCHEDULE 5.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is dated
and entered into as of July 10, 2000 (the "Effective Date"), by
and between CV THERAPEUTICS, INC., a Delaware corporation
("Company"), and FUJISAWA HEALTHCARE, INC., a Delaware
corporation ("Purchaser").
WHEREAS, Company and Purchaser are parties to a
Collaboration and License Agreement, of even date herewith (as
amended, modified or supplemented from time to time, the "License
Agreement"), pursuant to which the parties desire to establish a
collaboration and Purchaser desires to obtain an exclusive
license from Company; and
WHEREAS, as a condition to entering into the License
Agreement, Purchaser desires to acquire and Company is willing to
issue and sell to Purchaser shares of common stock, $.001 par
value, of Company (the "Common Stock"), subject to the terms and
conditions specified herein;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the
parties, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. For purposes of this Agreement, in
addition to the terms defined elsewhere herein, the following
terms shall have the meanings set forth below:
"Affiliate" shall have the meaning given such term in Rule
12b-2 of the Exchange Act.
"Business Day" shall mean any day other than a Saturday,
Sunday or legal holiday on which banks in New York, New York are
open for the conduct of their banking business.
"Closing" shall have the meaning specified in Section 2.02
herein.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"IPO Documents" shall mean Company's (a) Registration
Statement No. 333-12675 declared effective by the SEC on November
19, 1996, and Prospectus dated November 19, 1996, and (b)
Registration Statement No. 333-86447 declared effective by the
SEC on October 13, 1999, and Prospectus dated October 6, 1999.
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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"knowledge" of Company shall mean the knowledge of one or
more of the executive officers of Company.
"Per Share Fair Market Price" of the Common Stock on any
date shall mean (a) if the Common Stock is then traded on a
securities exchange or the Nasdaq National Market, the average of
the closing prices of the Common Stock on such exchange or market
over the thirty (30) Trading Days ending on such date; (b) if the
Common Stock is then regularly traded over-the-counter, the
average of the sale prices or secondarily the closing bid of the
Common Stock over the thirty (30) Trading Days ending on such
date; or (c) if there is no active public market for the Common
Stock, the fair market value thereof shall be determined as of
such date by a nationally recognized investment banking firm
chosen in good faith by Company's board of directors.
"Rule 144" shall mean Rule 144 as promulgated by the SEC
under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by
the SEC.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"SEC" shall mean the Securities and Exchange Commission.
"Shares" shall have the meaning specified in Section 2.01
herein.
"Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Stock is listed
or admitted to trading is open for the transaction of business
or, if the Common Stock is not listed or admitted to trading on
any national securities exchange, a Business Day.
ARTICLE II
PURCHASE AND SALE OF THE SHARES
2.01 Issuance of the Shares. Subject to the terms and
conditions of this Agreement, at the Closing (as defined below)
Company agrees to issue and sell to Purchaser, and Purchaser
agrees to purchase from Company, at an aggregate purchase price
of Four Million Dollars ($4,000,000), such number of shares
(rounded to the nearest whole share) of Common Stock (the
"Shares") equal to $4,000,000 divided by an amount equal to the
product of 4/3 multiplied by the Per Share Fair Market Price as
of the date which is one Business Day prior to the Effective
Date. By way of illustration only, if the Per Share Market Price
on such date were $45.00, the number of Shares would equal
$4,000,000 divided by $60.00 (the product of $45.00 multiplied by
4/3), or 66,667 Shares.
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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2.02 Closing; Delivery of the Shares.
(a) The purchase and sale of the Shares shall take
place at a closing (the "Closing") to be held at the offices of
Cooley Godward LLP, Five Palo Alto Square, 3000 El Camino Real,
Palo Alto, CA 94306 at 10:00 A.M. (Pacific Daylight Time) on the
Effective Date, or at such other location, time and date as may
be mutually agreed upon by the parties. The Closing shall take
place contemporaneously with the execution and delivery of this
Agreement and the License Agreement by Company and Purchaser.
(b) At the Closing, subject to the terms and
conditions contained in this Agreement, Purchaser shall provide a
wire transfer of immediately available funds to an account of
Company specified to Purchaser, in an amount equal to Four
Million Dollars ($4,000,000), in payment of the full purchase
price for the Shares.
(c) Within five (5) business days after Closing,
Company shall deliver one or more stock certificates evidencing
the Shares, registered in the name of Purchaser and dated as of
the date of the Closing.
ARTICLE III
CONDITIONS TO CLOSING
3.01 Conditions to Purchaser's Obligations. The obligation
of Purchaser to purchase and pay for the Shares at the Closing is
subject to each of the following additional conditions precedent:
(a) Opinion of Counsel. Purchaser shall have received
at the Closing an opinion from Cooley Godward LLP, counsel to
Company, regarding this Agreement and the transactions
contemplated hereby;
(b) Board Resolutions. Purchaser shall have received
at the Closing copies of the resolutions of the Board of
Directors of Company authorizing the execution and delivery of
this Agreement and the performance by Company of all transactions
contemplated hereby, certified by an appropriate officer of
Company;
(c) Officer's Certificate. Purchaser shall have
received at the Closing, a certificate, executed by the
appropriate officer of Company and dated as of the date of the
Closing, together with and certifying (A) the names of the
officers of Company authorized to sign this Agreement; (B) a copy
of the certificate of incorporation of Company, as amended and in
effect as of the date of the Closing; (C) a copy of the bylaws of
Company, as amended and in effect as of the date of the Closing;
and (D) that the representations and warranties contained in
Article IV hereof are true and correct as of the date of the
Closing; and
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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(d) License Agreement. Purchaser shall have received
at the Closing the License Agreement, duly executed by an
authorized officer of Company and dated as of the date of the
Closing.
3.02 Conditions to Company's Obligations. The obligation of
Company to issue and sell the Shares at the Closing is subject to
the following additional conditions precedent:
(a) Board Resolutions. Company shall have received at
the Closing copies of the resolutions of the Board of Directors
of Purchaser authorizing the execution and delivery of this
Agreement and the performance by Purchaser of all transactions
contemplated hereby, certified by an appropriate officer of
Purchaser;
(b) License Agreement. Company shall have received at
the Closing the License Agreement, duly executed by an authorized
officer of Purchaser and dated as of the date of the Closing; and
(c) Purchase Price. Purchaser shall have delivered
Four Million Dollars ($4,000,000) in immediately available funds
to Company's specified account in accordance with Section 2.02(b)
herein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Purchaser as follows:
4.01 Corporate Status. Company is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate
power and authority to own and use its properties and assets and
to transact the business in which it is currently engaged.
4.02 Corporate Power and Authority. The execution and
delivery by Company of this Agreement, the performance of the
terms and obligations herein, and the issuance, sale and delivery
of the Shares are each within Company's corporate powers, and
each has been duly authorized by all necessary corporate action
on the part of Company. This Agreement, when executed and
delivered hereunder, will constitute the valid and legally
binding obligation of Company enforceable against Company in
accordance with its terms, subject to (a) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and (b) the effect of general
principles of equity, regardless of whether considered in a
proceeding in equity or at law.
4.03 Government Approvals. No authorization, consent,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by Company of this Agreement
or the issuance and sale of the Shares to Purchaser except for
the filing by Company with the SEC or any state securities
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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
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authorities of any notices or filings required in connection with
the exemptions from the registration or qualification
requirements of the Securities Act and/or applicable state
securities law.
4.04 Capitalization. As of May 31, 2000, the authorized
capital stock of Company consists of: (a) 30,000,000 shares of
Common Stock, $.001 par value, of which 18,528,069 shares are
issued and outstanding and of which 142,519 shares are treasury
shares, and (b) 5,000,000 shares of Preferred Stock, $.001 par
value, of which 300,000 are designated Series A Junior
Participating Preferred, none of which are issued and
outstanding. As of May 31, 2000, an aggregate of 2,331,143
shares of Company's Common Stock were reserved for future
issuance pursuant to stock options granted by Company and
outstanding on May 31, 2000 and an additional 1,087,179 shares of
Company's Common Stock were reserved and available for the grant
of future stock options under all of Company's stock option or
equity incentive plans. The Shares, when issued against payment
of the aggregate purchase price set forth in Section 2.01, will
be duly authorized, validly issued, fully paid, non-assessable
and free and clear of all liens and encumbrances. As of the date
hereof, except for the options described hereinabove or except as
described in the IPO Documents, the SEC Documents or the Schedule
of Exceptions attached hereto, there are no options, warrants,
convertible securities or other rights to purchase shares of
capital stock or other securities of Company which are
authorized, issued or outstanding, nor is Company obligated in
any other manner to issue shares of its capital stock or other
securities, and Company has no obligation to purchase, redeem or
otherwise acquire any shares of its capital stock or any interest
therein or to pay any dividend or make any other distribution in
respect thereof, except as contemplated by this Agreement. Except
as described in the IPO Documents, the SEC Documents or the
Schedule of Exceptions attached hereto, (a) no person is entitled
to any preemptive right, catch-up right, right of first refusal
or similar right with respect to the issuance of any capital
stock of Company, (b) there are no restrictions on the transfer
of shares of capital stock of Company other than those imposed by
relevant federal and state securities laws and (c) there exists
no agreement between Company's stockholders and to which Company
is a party with respect to the voting or transfer of Company's
capital stock or with respect to any other aspect of Company's
affairs.
4.05 No Violation. Neither the execution or delivery by Company
of this Agreement, nor the performance of the terms and
obligations herein, will (a) violate Company's charter or bylaws,
(b) constitute a breach or default under any agreement or
instrument to which Company is a party or by which Company is
bound, which breach or default would have a material adverse
effect on Company, its assets or properties, or (c) violate any
applicable law, rule or regulation, which violation would have a
material adverse effect on Company, or (d) violate any order,
writ, injunction, decree or judgment of any court or governmental
authority applicable to or binding upon Company, which violation
would have a material adverse effect on Company.
4.06 Financial Statements.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
(a) All financial statements contained in the SEC
Documents (as defined in Section 4.08) filed by Company with the
SEC, have been prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied throughout
the periods indicated except as may be expressly stated in the
notes thereto and, as to the unaudited financial statements,
subject to normal recurring year-end audit adjustments and the
absence of notes thereto. Each balance sheet fairly presents the
financial condition of Company and its subsidiaries as at the
date of such balance sheet, and each statement of operations, of
stockholders' equity and of cash flows, fairly presents the
results of operations, the stockholders' equity and the cash
flows of Company and its subsidiaries for the periods then ended,
all in accordance with GAAP.
(b) Since the date of Company's most recent filing of
financial statements with the SEC, there has been no material
adverse change in the business, property, assets, operations or
financial condition of Company and its subsidiaries.
4.07 Litigation. There is no pending, or to Company's
knowledge overtly threatened, action, suit, proceeding,
arbitration, or investigation before any court, governmental
agency, instrumentality or arbitrator, which, if determined
adversely to Company, could reasonably be expected to materially
adversely affect the business, property, assets, operations or
financial condition of Company and its subsidiaries or which
purports to affect the legality, validity or enforceability of
this Agreement.
4.08 SEC Filings. Company has filed with the SEC on a timely
basis, or received a valid extension of such time of filing, all
forms, reports and documents required to be filed by it under the
Exchange Act since November 19, 1996 (such documents collectively
referred to as the "SEC Documents"). As of their respective
dates, the SEC Documents complied in all material respects with
the requirements of the Securities Act and the Exchange Act and
the rules and regulations of the SEC promulgated thereunder, and
none of the SEC Documents, when filed, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
4.9 Compliance with Statutes, etc. Each of Company and its
subsidiaries is in compliance with all applicable laws, rules,
regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, in respect of the conduct of
its business and the ownership of its property except, where such
failure to be in compliance would not have a material adverse
effect on Company.
4.10 Securities Laws. Assuming the accuracy of the
representations and warranties of Purchaser contained in Article
V hereof, the issuance of the Shares is exempt from the
provisions of the Securities Act. All notices, filings,
registrations, or qualifications under state securities or "blue-
sky" laws which are required in connection with the offer, issue
and delivery of the Shares pursuant to this Agreement, if any,
have been or will be completed by Company on a timely basis.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
4.11 Tax Returns and Payments. Each of Company and its
subsidiaries has filed all federal, state, local, foreign and
other tax returns required to be filed by it and has paid all
taxes and other assessments which have become due pursuant to
such tax returns and all other taxes and assessments which have
become due, except for those contested in good faith and for
which adequate reserves have been established. Each of Company
and its subsidiaries has made adequate provisions on its books of
account for all taxes, assessments and governmental charges with
respect to its business, properties and operations for all prior
fiscal years and for the current fiscal year to the date hereof.
No governmental authority has asserted a lien or other claim
against Company or any of its subsidiaries with respect to unpaid
taxes which has not been discharged or resolved, which would have
a material adverse effect on Company.
4.12 Insurance. Company and each of its subsidiaries
maintains insurance on all of its properties with financially
sound and reputable insurance companies against such risks and in
such amounts as are customarily maintained by companies of
comparable size engaged in a similar business.
4.13 No Infringement. To its knowledge, Company owns or
possesses rights to use all patents, patent applications,
trademarks, service marks, trade names, copyrights, trade
secrets, licenses and rights with respect to the foregoing which
are required to conduct its business without any known
infringement of the rights of others. No event has occurred
which, to the knowledge of Company, permits, or after notice or
lapse of time or both would permit, the revocation or termination
of any such rights, and, to the knowledge of Company, neither
Company nor any of its subsidiaries is liable to any person or
entity for infringement under applicable law with respect to such
rights. As of the Effective Date, Company is not pursuing any
action against any third party for the infringement of Company's
patents, patent applications, trademarks, service marks, trade
names, copyrights, trade secrets, or licenses relating to its
business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Company as follows:
5.01 Corporate Status. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate
power and authority to own and use its properties and assets and
to transact the business in which it is currently engaged.
5.02 Corporate Power and Authority. The execution and
delivery by Purchaser of this Agreement, the performance of the
terms and obligations therein, and the purchase of the Shares are
each within Purchaser's corporate powers, and each has been duly
authorized by all necessary corporate action on the part of
Purchaser. This Agreement, when executed and delivered hereunder,
will constitute valid and legally binding obligations of
Purchaser enforceable against Purchaser in accordance with their
terms, subject to (a) applicable bankruptcy, insolvency,
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
reorganization, moratorium or similar laws affecting creditors'
rights generally, and (b) the effect of general principles of
equity, regardless of whether considered in a proceeding in
equity or at law.
5.03 Investment. Purchaser is acquiring the Shares for
Purchaser's own account, not as a nominee or agent for
investment, and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the
meaning of the Securities Act.
5.04 Shares Not Registered. Purchaser understands that the
Shares are not registered under the Securities Act on the ground
that the sale provided for in this Agreement and the issuance of
Shares hereunder is exempt from registration under the Securities
Act pursuant to Section 4(2) thereof, and that Company's reliance
on such exemption is predicated on Purchaser's representations
set forth herein.
5.05 Accredited Investor. Purchaser represents that it is an
"accredited investor" within the meaning of Rule 501 of
Regulation D adopted pursuant to the Securities Act.
5.06 Restricted Shares. Purchaser understands that the
Shares may not be sold, transferred, or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective registration
statement covering the Shares or an available exemption from
registration under the Securities Act, the Shares must be held
indefinitely. Purchaser is aware that the Shares may not be sold
pursuant to Rule 144 promulgated under the Securities Act unless
all of the conditions of that Rule are met.
5.07 Legend. To the extent applicable, each certificate or
other document evidencing the Shares, whether upon initial
issuance or transfer thereof, shall be endorsed with the legends
substantially in the form set forth below:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS
COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE, SATISFACTORY TO COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE HOLDER HEREOF
DATED AS OF JULY 10, 2000, A COPY OF WHICH IS ON FILE
AT THE COMPANY'S PRINCIPAL OFFICES AND IS AVAILABLE
UPON REQUEST."
5.08 Investment Information.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
(a) Purchaser has been furnished with all the
information necessary to make an informed investment decision.
Purchaser has been given access to such information relating to
Company as Purchaser has requested.
(b) By reason of Purchaser's business or financial
experience, Purchaser has the capacity to make the decision
referred to in subsection (a) above.
ARTICLE VI
COVENANTS OF COMPANY
6.01 Rule 144 Reporting. With a view to making available
the benefits of certain rules and regulations of the SEC that may
permit the sale of the Shares to the public without registration,
Company agrees to use its best efforts to:
(a) make and keep public information regarding Company
available (as those terms are understood and defined in Rule 144
under the Securities Act) at all times;
(b) file with the SEC in a timely manner all reports
and other documents required of Company under the Securities Act
and the Exchange Act at any time; and
(c) so long as Purchaser owns any Shares or securities
convertible into, exchangeable for or exercisable for Common
Stock, furnish to Purchaser forthwith upon written request as to
Company's compliance with the reporting requirements of Rule 144
and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of Company.
ARTICLE VII
COVENANTS OF PURCHASER
7.01 Restrictions on Purchase of Common Stock. Until the
first anniversary of the expiration or termination of the License
Agreement, Purchaser shall not purchase, and shall ensure that
none of its Affiliates purchases, any Common Stock other than the
purchase or acquisition of Shares contemplated by this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by
Company therefrom, shall in any event be effective unless the
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
same shall be in writing and signed by Purchaser, and then such
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
8.02 Notices. All notices and other communications provided
for hereunder shall be in writing, shall specifically refer to
this Agreement, shall be addressed to the receiving party's
address set forth below or to such other address as a party may
designate by notice hereunder, and shall be deemed to have been
sufficiently given for all purposes if (a) mailed by first class
certified or registered mail, postage prepaid, (b) sent by
express delivery service, (c) personally delivered, or (d) made
by telecopy or facsimile transmission (with machine confirmation
of delivery).
If to Company: CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
Attn: General Counsel
Telephone: 650-475-9611
Facsimile: 650-858-0388
with a copy to: Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attn: Robert L. Jones
Telephone: 650-843-5034
Facsimile: 650-857-0663
If to Purchaser: Fujisawa Healthcare, Inc.
Three Parkway North Center
Deerfield, IL 60015
Attn: General Counsel
Telephone: 847-317-8870
Facsimile: 847-317-7288
with a copy to: Richards & O'Neil, LLP
885 Third Avenue
New York, NY 10022-4873
Attn: Michael Braun
Facsimile: 212-750-9022
8.03 No Waiver; Remedies. No failure on the part of
Purchaser to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
8.04 Attorneys' Fees. In the event that any dispute
among the parties to this Agreement should result in litigation,
the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses enforcing any
right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and
expenses of attorneys and accountants, which shall include,
without limitation, all fees, costs and expense of appeals.
8.05 Binding Effect; Assignment. This Agreement shall
be binding upon and inure to the benefit of Company and Purchaser
and their respective successors and assigns, provided that
neither Company nor Purchaser may assign or transfer any or all
of its rights or obligations under this Agreement without the
prior written consent of the other party. Notwithstanding any
assignment by Purchaser, the provisions of Sections 7.01 shall
continue to be binding upon Purchaser in accordance with the
terms of this Agreement.
8.06 Governing Law; Consent to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without reference to the
conflicts or choice of law principles thereof. Company and
Purchaser hereby irrevocably consent to the exclusive personal
jurisdiction of any state or federal courts located in Delaware,
in any action, claim or other proceeding arising out of any
dispute in connection with this Agreement, any rights or
obligations hereunder, or the performance of such rights and
obligations. Purchaser and Company agree to waive their
respective rights to a jury trial with respect to any action,
claim, or other proceeding arising out of any dispute in
connection with this Agreement, any rights or obligations
hereunder, or the performance of such rights and obligations.
8.07 Severability. To the extent any provision of this
Agreement is prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
8.08 Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto with
respect to the provisions hereof and supersedes all prior oral or
written agreements and understandings relating to the provisions
hereof. No statement, representation, warranty, covenant or
agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the
express terms and provisions of this Agreement.
8.09 Further Action. Each party shall, without further
consideration, take such further action and execute and deliver
such further documents as may be reasonably requested by the
other party in order to carry out the provisions and purposes of
this Agreement.
8.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original, but all of which, when taken together, shall constitute
one and the same instrument.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
8.11 Survival. The representations, warranties,
covenants and agreements made herein by Company and Purchaser
shall survive the Closing.
[THE REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK;
SIGNATURES ARE ON FOLLOWING PAGE]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
IN WITNESS WHEREOF, Company and Purchaser have caused this
Stock Purchase Agreement to be executed in their names by their
duly authorized officers or representatives effective as of the
date first above written.
CV THERAPEUTICS, INC.
By: _____/s/ Louis Lange_________
Name: Louis G. Lange, M.D., Ph.D.
Title: Chairman & CEO
FUJISAWA HEALTHCARE, INC.
By: __ /s/ Noboru Maeda______
Name: Noboru Maeda
Title: Chairman & CEO
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
SCHEDULE OF EXCEPTIONS
This Schedule of Exceptions is made and given with respect
to Article IV of the attached Stock Purchase Agreement (the
"Agreement"), by and between CV Therapeutics, Inc., a Delaware
corporation (the "Company"), and Fujisawa Healthcare, Inc., a
Delaware corporation (the "Purchaser").
The section numbers in this Schedule of Exceptions
correspond to the section numbers in the Agreement, however, any
information disclosed herein under any section number shall be
deemed to be disclosed and incorporated into any other section
number under the Agreement where such disclosures would be
appropriate. Unless the context otherwise requires, all
capitalized terms shall have the same meaning as defined in the
Agreement.
Section 4.04
As of May 31, 2000, an aggregate of 249,203 shares of Common
Stock of the Company were reserved for future issuance pursuant
to outstanding warrants granted by the Company.
On February 2, 1999, the Company adopted a Preferred Share
Purchase Rights Plan pursuant to which shareholders have certain
rights to purchase shares of Series A Junior Participating
Preferred.
$196,250,000 of 4_% Convertible Subordinated Notes due March
7, 2007 and Shares of Common Stock Issuable Upon Conversion of
the Notes.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
SCHEDULE 10.3
Form of Press Release
PRESS RELEASE
FOR IMMEDIATE RELEASE
Contacts: CV Therapeutics Fleishman-Hillard
Dan Spiegelman Carol Harrison
SVP & Chief Financial Officer (212) 453-2442
(650) 812-9509
Christopher Chai
Treasurer & Director,
Investor Relations
(650) 812-9560
Fujisawa Healthcare
Maribeth Landwehr
Corporate Communications
(847) 317-8988
CV THERAPEUTICS AND FUJISAWA HEALTHCARE ANNOUNCE
COLLABORATION ON CVT-3146 FOR CARDIAC IMAGING
CVT partners with market leader in pharmacologic cardiac imaging
PALO ALTO, CA and DEERFIELD, IL (July 11, 2000) - CV
Therapeutics, Inc. (Nasdaq: CVTX) and Fujisawa Healthcare, Inc.
(FHI) announced today a collaboration to develop and market
second generation pharmacologic cardiac stress agents. Under this
agreement FHI receives exclusive North American rights to CVT-
3146, a short acting selective A2A adenosine receptor agonist,
and a backup compound. CVT and FHI will collaborate on the
development of CVT-3146. Leveraging the strengths of both
organizations, CVT will be responsible for managing the CVT-3146
clinical development program. FHI will be responsible for selling
and marketing CVT-3146 in North America. In the U.S. FHI
currently markets Adenoscanr (adenosine), the market leading
pharmacologic cardiac stress-imaging agent.
CVT will receive $10.0 million from FHI, which consists of a
cash payment, the prepayment of a development milestone, and the
purchase of CVT common stock at a premium.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
CVT may receive up to an additional $24.0 million in cash based upon
development and regulatory milestones. FHI will reimburse CVT for 75%
of the development costs, and if approved by the FDA, CVT will receive
a royalty based on product sales of CVT-3146 and may receive a
royalty on other products.
"We are pleased to collaborate with the market leader in
cardiac perfusion imaging," said Louis G. Lange, M.D., Ph.D.,
Chairman and Chief Executive Officer of CV Therapeutics. "The
structure of this collaboration reflects our leadership in
adenosine technology and cardiovascular drug discovery. In
addition, this collaboration will allow us to focus our financial
resources on our two late stage clinical programs: ranolazine and
CVT-510."
"Our partnership with CV Therapeutics and the development of
CVT-3146 represents Fujisawa's continued commitment to the
cardiovascular therapeutic area," said Noboru Maeda, Chairman and
Chief Executive Officer at Fujisawa Healthcare, Inc. "CVT-3146
allows us to expand our current portfolio of cardiovascular
products available to clinicians."
About cardiac perfusion imaging studies
Cardiac perfusion imaging studies are used for the detection
and characterization of coronary artery disease by identifying
areas of insufficient blood flow in the heart. During these
tests, blood flow is measured when the patient's heart is at rest
and when it is working. Relatively low blood flow when the heart
is working is indicative of which areas of the heart may be
diseased.
To stimulate the work of the heart sufficiently to perform
the test many patients exercise on a treadmill. However, more
than a third of the patients who take the test are unable to
exercise adequately because of medical conditions such as
peripheral vascular disease and arthritis. For these patients, a
pharmacologic agent that temporarily increases the coronary blood
flow is required to simulate the heart at work. In 1997,
approximately 5.2 million cardiac perfusion imaging studies were
performed in the US, of which 1.8 million were conducted using a
pharmacologic agent.
Stimulation of the A2A adenosine receptor in the heart
induces vasodilation and thus increases coronary blood flow. In
animal studies, CVT-3146 has been shown to increase coronary
blood flow without adversely affecting peripheral blood pressure.
Statements in this press release concerning the development
and potential application of CVT-3146 and other compounds are
forward-looking statements that involve risks and uncertainties,
including, but not limited to, uncertainties related to CVT's
early stage of development and clinical trials. Actual results
could differ materially. Factors that could cause or contribute
to such differences are more fully discussed in CVT's Annual
Report on Form 10-K for the year ended December 31, 1999.
CV Therapeutics, Inc., headquartered in Palo Alto, CA, is a
biopharmaceutical company focused on applying molecular
cardiology to the discovery, development and commercialization of
novel, small molecule drugs for the treatment of cardiovascular
diseases. CVT is currently conducting clinical trials for two of
its products. Ranolazine, the first in a new class of
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
compounds known as partial fatty acid oxidation (pFOX) inhibitors
for the potential treatment of angina, is in Phase III clinical trials.
CVT-510, an A1 adenosine receptor agonist, for the potential
treatment of atrial arrhythmias, is in Phase II clinical trials.
For more information, please visit CV Therapeutics' web site at
www.cvt.com.
Fujisawa Healthcare, Inc., headquartered in Deerfield, IL,
develops, manufactures, and markets proprietary pharmaceutical
products in the United States and abroad. Fujisawa Healthcare,
Inc. is a subsidiary of Fujisawa Pharmaceutical Co., Ltd., based
in Osaka, Japan. Fujisawa Pharmaceutical Co., Ltd., founded in
1894, is a leading pharmaceutical manufacturer and has
international operations in North America, Europe, and Asia.
Additional information on Fujisawa Healthcare, Inc. and its
products can be found on the Company's web site at
www.fujisawa.com.
-end-
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
SCHEDULE 13.4
INSURANCE
FHI'S INSURANCE OBLIGATIONS
A. FHI shall, at its sole cost and expense, obtain and keep in
force during the Term and for a period of not less than [ *
] years after termination, cancellation or expiration of
this Agreement the following insurance: (i) general
liability insurance, including blanket contractual liability
coverage, with bodily injury, death and property damage
limits of [ * ]; (ii) clinical studies and product
liability insurance with bodily injury, death and property
damage limits of not less than [ * ] (provided, however that
with respect to such clinical studies liability insurance,
FHI shall only be required to maintain such insurance for[ *
] years after completion of the last clinical study on the
Licensed Compounds and Licensed Products conducted by FHI
under this Agreement); and, (iii) workers' compensation
insurance with limits to satisfy statutory requirements and
employer's liability insurance with limits of [ * ]. FHI
shall furnish to CVT upon within thirty (30) days after the
Effective Date, and on annual renewals thereof,
certificate(s) of insurance evidencing the insurance
coverage required by this Agreement and providing for at
least thirty (30) days' prior written notice to CVT of any
cancellation, termination, material change or reduction of
such coverage.
B. FHI shall use its commercially reasonable efforts to cause
Third Parties engaged by FHI to perform services in
connection with the Development Program and/or the
commercial manufacturing and/or sale of the Licensed
Compounds and/or Licensed Products to maintain such types of
insurance coverages and for such period of time as are
customary for such Third Party given the nature of the
services to be provided.
CVT'S INSURANCE OBLIGATIONS
A. CVT shall, at its sole cost and expense, obtain and keep in
force until such time as the NDA is transferred to FHI as
provided for in Section 7.1(a) of this Agreement and for a
period of not less than [ * ] years thereafter the following
insurance: (i) general liability insurance, including
blanket contractual liability coverage, with bodily injury,
death and property damage limits of [ * ]; (ii) overlying
umbrella liability coverage with limits of [ * ]; (iii)
clinical studies and product liability insurance with bodily
injury, death and property damage limits of not less than [
* ] (provided, however that with respect to such clinical
studies liability insurance, CVT shall only be required to
maintain such insurance for [ * ] years after completion of
the last clinical study on the Licensed Compounds and
Licensed Products conducted by CVT under this Agreement);
and, (iv) workers' compensation insurance with limits to
satisfy statutory requirements and employer's liability
insurance with limits of U.S. [ * ]. CVT shall furnish to
FHI upon within thirty (30) days after the Effective Date,
and on annual renewals thereof, certificate(s) of insurance
evidencing the insurance coverage required by this Agreement
and providing
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
for at least thirty (30) days' prior written
notice to FHI of any cancellation, termination, material
change or reduction of such insurance coverage.
B. In the event the licenses granted to FHI are converted to co-
exclusive licenses with CVT under Section 4.4 or in the
event there is a partial termination of this Agreement under
Section 12.3 as to a particular indication for a Licensed
Product, CVT shall, at its sole cost and expense, obtain and
keep in force as of effective date such licenses become co-
exclusive or of such partial termination (such effective
date shall be referred to herein as "CVT Insurance Effective
Date") and until the termination, cancellation or expiration
of this Agreement and for a period of not less than [ * ]
years thereafter the following insurance: (i) general
liability insurance, including blanket contractual liability
coverage, with bodily injury, death and property damage
limits of [ * ]; (ii) overlying umbrella liability coverage
with limits of [ * ]; (iii) clinical studies and product
liability insurance with bodily injury, death and property
damage limits of not less than [ * ] (provided, however that
with respect to such clinical studies liability insurance,
CVT shall only be required to maintain such insurance for [
* ] years after completion of the last clinical study on the
Licensed Compounds and Licensed Products conducted by CVT
under this Agreement); and, (iv) workers' compensation
insurance with limits to satisfy statutory requirements and
employer's liability insurance with limits of U.S. [ * ].
CVT shall furnish to FHI upon within thirty (30) days after
the CVT Insurance Effective Date, and on annual renewals
thereof, certificate(s) of insurance evidencing the
insurance coverage required by this Agreement and providing
for at least thirty (30) days' prior written notice to FHI
of any cancellation, termination, material change or
reduction of such insurance coverage.
C. CVT shall use its commercially reasonable efforts to cause
Third Parties engaged by CVT to perform services in
connection with the Development Program and/or if
applicable, the commercial manufacturing and/or sale of the
Licensed Compounds and/or Licensed Products to maintain such
types of insurance coverages and for such period of time as
are customary for such Third Party given the nature of the
services to be provided.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
