Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as {redacted}. A complete version of the
exhibit has been filed separately with the Securities and Exchange Commission.
EXHIBIT 10.9
FINAL
CO-DEVELOPMENT AND
LICENSE AGREEMENT
between
NEOTHERAPEUTICS, INC.
and
GPC BIOTECH AG
Dated as of September 30, 2002
CO-DEVELOPMENT AND
LICENSE AGREEMENT
This CO-DEVELOPMENT AND LICENSE AGREEMENT (this "Agreement"), dated as
of September 30, 2002, is between Neotherapeutics, Inc., a company duly
organized and existing under the laws of Delaware and having offices at 157
Technology Drive, Irvine, California, USA for and on behalf of itself and its
Affiliates ("NEOTHERAPEUTICS"), and GPC Biotech AG, a company duly organized and
existing under the laws of the Federal Republic of Germany and having offices at
Fraunhoferstrasse 20, D-82152 Martinsried/Munich Germany, for and on behalf of
itself and its Affiliates (together with its Affiliates, "GPC").
PRELIMINARY STATEMENTS
A. NEOTHERAPEUTICS has entered into that certain License Agreement
with Johnson Matthey PLC ("J-M") dated August 28, 2001, pursuant to which
NEOTHERAPEUTICS has been granted a license, with the right to sublicense, to
certain patent rights and other know-how and technology owned by J-M.
B. NEOTHERAPEUTICS wishes to grant a sublicense to GPC, and GPC wishes
to take a sublicense from NEOTHERAPEUTICS, under certain rights granted to
NEOTHERAPEUTICS under the J-M License Agreement and under other relevant patent
rights and know-how controlled by NEOTHERAPEUTICS, upon the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing preliminary
statements and the mutual covenants and agreements of the Parties contained in
this Agreement, the Parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have those
meanings set forth in this Section 1 unless the context dictates otherwise.
1.1. "Affiliate" with respect to either Party, shall mean any Person
controlling, controlled by, or under common control with, such Party. For the
purpose of this Section 1.1, "control" shall refer to (i) the possession,
directly or indirectly, of the power to direct the management or policies of
such Party, whether through the ownership of voting securities, by contract or
otherwise, or (ii) the beneficial ownership (as such term is defined in the 1934
Act) of at least fifty percent (50%) of the voting securities or other ownership
interest of such Party.
1.2. "Confidential Information" shall have the meaning assigned to such
term in Section 12.1.
1.3. "Covered Product" shall mean any Platinum Complexes formulated for
administration to humans, the research, development, manufacture, sale or use of
which
in any country in the Territory is covered by a Valid Claim of any Patent
included in the J-M Licensed Technology or the NEOTHERAPEUTICS Licensed
Technology.
1.4. "Effective Date" shall mean the date first set forth above.
1.5. "EMEA" shall mean the European Agency for the Evaluation of
Medicinal Products and any successor thereto.
1.6. "FDA" shall mean the United States Food and Drug Administration,
or any successor thereto.
1.7. "Field" shall mean the FIELD, as such term is defined in the J-M
License Agreement, as amended from time to time.
1.8. "First Commercial Sale" shall mean, with respect to any Covered
Product, the first sale for use or consumption by the general public of such
Covered Product in a country in the Territory after all required marketing and
pricing approvals have been granted, or otherwise permitted, by the governing
health authority of such country. "First Commercial Sale" shall not include the
sale of any Covered Product for use in clinical trials or for compassionate use
prior to the approval of an NDA.
1.9. "GPC Development Technology" shall mean all Inventions and
Know-How first developed, reduced to practice or shown to have utility by one or
more employees of GPC without the involvement of one or more employees of
NEOTHERAPEUTICS in connection with the development of Covered Products, as well
as any and all Patents covering the same.
1.10. "Invention" shall mean any new or useful method, process,
manufacture, compound or composition of matter, whether or not patentable or
copyrightable, or any improvement thereof.
1.11. "J-M License Agreement" shall mean that certain License Agreement
dated August 28, 2001, by and between NEOTHERAPEUTICS and J-M, as amended from
time to time. A copy of such Agreement, including all amendments executed prior
to the execution of this Agreement, is attached hereto as Exhibit A.
1.12. "J-M Licensed Technology" shall mean the J-M Patent Rights, the
LICENSOR'S INFORMATION and the LICENSOR'S ONGOING INFORMATION to which
NEOTHERAPEUTICS has been granted a license under the J-M License Agreement, as
such capitalized terms are defined in the J-M License Agreement, as amended from
time to time.
1.13. "J-M Patent Rights" shall mean the PATENT RIGHTS, as such term is
defined in the J-M Licensed Agreement. A list of all such J-M Patent Rights in
existence on the Effective Date is included in Exhibit B attached hereto.
1.14. "J-M Royalty Term" shall mean the period beginning on the
Effective Date and ending on the earlier of (i) the expiration of the TERM, as
such term is defined
in the J-M License Agreement, as amended from time to time, or (ii) the date on
which NEOTHERAPEUTICS is no longer required to make royalty payments to J-M
pursuant to the J-M License Agreement.
1.15. "Joint Development Committee" shall mean the entity organized and
acting pursuant to Section 4.
1.16. "Joint Development Technology" shall mean all Inventions and
Know-How first developed, reduced to practice or shown to have utility by one or
more employees of GPC and one or more employees of NEOTHERAPEUTICS in connection
with the development of Covered Products, as well as any and all Patents
covering the same.
1.17. "Know-How" shall mean unpatented technical and other information
which is not in the public domain including information comprising or relating
to discoveries, inventions, data, designs, formulae, methods, models, assays,
research plans, procedures, designs for experiments and tests and results of
experimentation and testing (including results of research or development),
processes (including manufacturing processes, specifications and techniques),
laboratory records, chemical, pharmacological, toxicological, clinical,
analytical and quality control data, trial data, case report forms, data
analyses, reports or summaries and information contained in submissions to and
information from ethical committees and regulatory authorities. Know-How
includes rights protecting Know-How. The fact that an item is known to the
public shall not be taken to exclude the possibility that a compilation
including the item, and/or a development relating to the item, is (and remains)
not known to the public.
1.18. "MAA" shall mean a Marketing Authorization Application or similar
application filed with the EMEA after completion of human clinical trials to
obtain marketing approval for a Covered Product in the European Union.
1.19. "MHW" shall mean the Ministry of Health and Welfare in Japan and
any successor agency.
1.20. "NDA" shall mean a New Drug Application to be filed with the FDA,
or the equivalent thereof in other countries or regulatory jurisdictions.
1.21. "NEOTHERAPEUTICS Development Technology" shall mean all
Inventions and Know-How first developed, reduced to practice or shown to have
utility by one or more employees of NEOTHERAPEUTICS without the involvement of
one or more employees of GPC in connection with the development of Covered
Products, as well as any and all Patents covering the same.
1.22. "NEOTHERAPEUTICS Licensed Technology" shall mean the LICENSEE'S
ONGOING INFORMATION, as such term is defined in the J-M License Agreement, as
amended from time to time, as well as all Patents owned or controlled by, or
licensed to, NEOTHERAPEUTICS, and all Know-How and Inventions developed, owned
or controlled by, or licensed to, NEOTHERAPEUTICS, on or after the Effective
Date, other than the J-M Licensed Technology, which, by objective standards, is
necessary for or may be useful in the development, manufacture, use or sale of
Licensed Products in the Field in the Territory, all to the extent that
NEOTHERAPEUTICS has the right to license or otherwise make available such
Patents, Know-How and Inventions to GPC hereunder. A list of all such Patents in
existence on the Effective Date is included in Exhibit B attached hereto.
1.23. "Net Sales" shall have the meaning ascribed to the term "Net
Sales Value" in the J-M License Agreement, as amended from time to time.
Notwithstanding the foregoing, in the event a Covered Product is sold in
conjunction with another proprietary component so as to be a combination product
(whether packaged together or in the same therapeutic formulation), Net Sales
shall be calculated by multiplying the Net Sales of such combination product by
a fraction, the numerator of which shall be the fair market value of the Covered
Product as if sold separately (determined in accordance with generally accepted
accounting principles), and the denominator of which shall be the aggregate fair
market value of all the proprietary active components of such combination
product, including the Covered Product, as if sold separately. In the event no
such separate sales are made by GPC or its Affiliates, Net Sales of the
combination product shall be calculated in a manner to be negotiated and agreed
upon by the Parties, reasonably and in good faith, prior to any sale of such
combination product, which shall be based upon the respective estimated
commercial values of the proprietary active components of such combination
product.
GPC's or any of its Affiliate's transfer of Covered Product to another
Affiliate or a Sublicensee shall not result in any Net Sales, unless such
Covered Product is consumed by such Affiliate or Sublicensee in the course of
its commercial activities.
1.24. "1934 Act" shall mean the U.S. Securities Exchange Act of 1934,
as amended, and all regulations promulgated pursuant thereto from time to time.
1.25. "Party" shall mean NEOTHERAPEUTICS or GPC and, when used in the
plural, shall mean NEOTHERAPEUTICS and GPC.
1.26. "Patents" shall mean all letters patent and patent applications
throughout the Territory, as well as any and all substitutions, extensions,
renewals, continuations, continuations-in-part, divisions, patents-of-addition
and/or reissues thereof.
1.27. "Person" shall mean any natural person, corporation, firm,
business trust, joint venture, association, organization, company, partnership
or other business entity, or any government or any agency or political
subdivision thereof.
1.28. "Platinum Complexes" shall mean the platinum co-ordination
compounds that are the subject of the J-M Patent Rights.
1.29. "Royalty Term" shall mean the period beginning on the Effective
Date and ending on the date of the expiration of the last to expire Valid Claim,
if any, included in the Joint Development Technology or NEOTHERAPEUTICS
Development Technology
that covers the manufacture or sale of Covered Products. If, at the time of
expiration of the J-M Royalty Term, there are no Valid Claims included in the
Joint Development Technology or NEOTHERAPEUTICS Development Technology covering
the manufacture or sale of a Covered Product, then the Royalty Term with respect
to such Covered Product shall expire on the expiration of the J-M Royalty Term.
1.30. "Satraplatin" shall mean the platinum complex
bis(acetato)amminedichloro(cyclohexylamine)platinum(IV).
1.31. "Sublicensee" shall mean a Third Party to which GPC has
sublicensed rights under the NEOTHERAPEUTICS Licensed Technology or J-M Licensed
Technology for the commercialization of Covered Products.
1.32. "Sublicense Fees" shall mean all payments made to GPC from a
Sublicensee that relate specifically to the sublicense of rights granted to GPC
hereunder, excluding (i) payments made in consideration of research and
development efforts undertaken by GPC, (ii) payments made to reimburse GPC for
expenses previously incurred by GPC in connection with the development of
Covered Products, (iii) payments made in consideration of the purchase of equity
of GPC by a Sublicensee to the extent that such payments do not exceed the fair
market value of such equity, (iv) payments made in consideration of the
manufacture or supply of Covered Products by GPC to the extent that such
payments do not exceed GPC's costs of such manufacture and supply, (v) loans
made to GPC or (vi) Sublicense Royalties.
1.33. "Sublicense Royalties" shall mean royalty payments made to GPC
based on sales of Covered Products by a Sublicensee.
1.34. "Territory" shall mean the entire world.
1.35. "Third Party" shall mean any Person who or which is neither a
Party nor an Affiliate of a Party.
1.36. "Valid Claim" shall mean (i) a pending claim in any patent
application that has not been pending for more than five (5) years, which shall
be treated as if such pending claim were issued in then-current form, or (ii) a
claim of any issued letters patent that, in each case, has not been held invalid
or unenforceable by final decision of a court or other governmental agency of
competent jurisdiction, unappealable or unappealed within the time allowed for
appeal, and that is not admitted to be invalid or unenforceable through reissue,
disclaimer or otherwise.
2. REPRESENTATIONS AND WARRANTIES
2.1. REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES. Each Party
represents and warrants to the other Party that, as of the Effective Date:
(a) Such Party is duly organized and validly existing under the laws of
the jurisdiction of its incorporation and has full corporate power and authority
to enter into this Agreement and to carry out the provisions hereof;
(b) Such Party has taken all corporate action necessary to authorize the
execution and delivery of this Agreement and the performance of its obligations
under this Agreement; and
(c) This Agreement is a legal and valid obligation of such Party,
binding upon such Party and enforceable against such Party in accordance with
the terms of this Agreement, except as such enforceability may be affected by
laws affecting creditors' rights generally and general equitable principles. The
execution, delivery and performance of this Agreement by such Party do not
conflict with any agreement, instrument or understanding, oral or written, to
which such Party is a party or by which such Party may be bound, or violate any
law or regulation of any court, governmental body or administrative or other
agency having authority over such Party. All consents, approvals and
authorizations from all governmental authorities or other Third Parties required
to be obtained by such Party in connection with the execution, delivery and
performance of this Agreement have been obtained.
2.2. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF NEOTHERAPEUTICS.
NEOTHERAPEUTICS represents and warrants to GPC that, as of the Effective Date:
(a) NEOTHERAPEUTICS and/or its Affiliates are the owner of, or have
exclusive rights to, all of the Patents included in the J-M Licensed Technology
(except as expressly provided in the copy of the J-M License Agreement attached
as Exhibit A) and the NEOTHERAPEUTICS Licensed Technology in existence on the
Effective Date, and have the exclusive right to grant the licenses or
sublicenses, as the case may be, therefor granted under this Agreement;
(b) All such Patents consist of either patent applications that have
been filed and are pending and actively being prosecuted as of the Effective
Date, or issued letters patent that are in full force and effect and have been
maintained through the Effective Date;
(c) NEOTHERAPEUTICS is not aware of any asserted or unasserted claim or
demand which it believes can be enforced by a Third Party against any such
Patents;
(d) To the best of NEOTHERAPEUTICS's knowledge and belief, the practice
of such Patents and the exercise of the rights granted to GPC in Section 7 do
not infringe upon or conflict with any patent, copyright or other proprietary
right of any Third Party;
(e) NEOTHERAPEUTICS and/or its Affiliates have the right to grant the
licenses or sublicenses, as the case may be, granted under this Agreement for
all of the Know-How and Inventions included in the J-M Licensed Technology and
NEOTHERAPEUTICS Licensed Technology in existence on the Effective Date;
(f) Such Know-How and Inventions were not obtained by NEOTHERAPEUTICS,
and to the best of NEOTHERAPEUTICS's knowledge and belief were not obtained by
J-M, in violation of any contractual or fiduciary obligation to which
NEOTHERAPEUTICS, J-M or any of their respective employees or staff members are
or were bound, or by the misappropriation of the trade secrets of any Third
Party;
(g) NEOTHERAPEUTICS has not entered into any agreement with any Third
Party which is in conflict with the rights granted to GPC under to this
Agreement, and the execution and performance of this Agreement by
NEOTHERAPEUTICS do not and shall not violate any agreement or undertaking to
which NEOTHERAPEUTICS is a party; and
(h) To the best of NEOTHERAPEUTICS's knowledge and belief, all of the
data and information that NEOTHERAPEUTICS has provided to GPC prior to the
Effective Date relating to such Patents, Know-How and Inventions, and to Covered
Products in general, are reasonably accurate, and NEOTHERAPEUTICS has not
omitted therefrom any material data or information in NEOTHERAPEUTICS's
possession or control reasonably in advance of the Effective Date concerning the
same.
2.3. REPRESENTATIONS AND WARRANTIES OF GPC. GPC represents and warrants
to NEOTHERAPEUTICS that, as of the Effective Date:
(a) Experience. GPC acknowledges that it can bear the economic risk
of its investment in the NEOTHERAPEUTICS Shares. GPC has by reason of its
business or financial experience or the business or financial experience of its
professional advisors who are unaffiliated with and who are not compensated by
NEOTHERAPEUTICS or any affiliate or selling agent of NEOTHERAPEUTICS , directly
or indirectly, has the capacity to protect its own interests in connection with
its purchase of the NEOTHERAPEUTICS Shares. GPC has the financial capacity to
bear the risk of this investment.
(c) Purchase Entirely for Own Account. The NEOTHERAPEUTICS Shares
will be acquired by GPC for investment for GPC's own account not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and GPC has no present intention of selling, granting any participation in, or
otherwise distributing the same. GPC does not presently have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to any of the
NEOTHERAPEUTICS Shares. GPC has not been formed for the specific purpose of
acquiring solely the NEOTHERAPEUTICS Shares.
(e) Disclosure of Information. GPC has received and reviewed
information about NEOTHERAPEUTICS, and in particular about the Patents,
Know-How, Inventions and Covered Products, and has had an opportunity to discuss
NEOTHERAPEUTICS's business, management and financial affairs with its management
and to review NEOTHERAPEUTICS's facilities. GPC understands and acknowledges
that such discussions, as well as any written information issued by
NEOTHERAPEUTICS (i) were intended to describe the aspects of NEOTHERAPEUTICS's
business and prospects which NEOTHERAPEUTICS believes to be material, but were
not necessarily an exhaustive description (except to the extent described in
Section 2.2(h)), and (ii) may have contained forward-looking statements
involving known and unknown risks and uncertainties which may cause
NEOTHERAPEUTICS's actual results in future periods
or plans for future periods to differ materially from what was anticipated and
that no representations or warranties were or are being made with respect to any
such forward-looking statements or the probability of achieving any of the
results projected in any of such forward-looking statements. Nothing contained
in this Section 2.3 shall limit in any respect NEOTHERAPEUTICS's representations
and warranties contained in this Agreement.
(g) Restricted Securities. GPC understands that the NEOTHERAPEUTICS
Shares have not been, and will not, prior to issuance under Section 9.1(c), be,
registered under the Securities Act of 1933, as amended (the "Securities Act"),
by reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of GPC's representations as expressed
herein. GPC understands that the NEOTHERAPEUTICS Shares are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, GPC must hold the NEOTHERAPEUTICS Shares indefinitely
unless they are registered with the SEC and qualified by state authorities, or
an exemption from such registration and qualification requirements is available.
GPC acknowledges that NEOTHERAPEUTICS has no obligation to register or qualify
the NEOTHERAPEUTICS Shares for resale except as set forth in the Registration
Rights Agreement to be entered into as provided in Section 9.1(c). GPC further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the
NEOTHERAPEUTICS Shares, and on requirements relating to NEOTHERAPEUTICS which
are outside of GPC's control, and which NEOTHERAPEUTICS is under no obligation
and may not be able to satisfy. GPC acknowledges that NEOTHERAPEUTICS will make
a notation on its stock books regarding the restrictions on transfers set forth
in this Section 2.3 and will transfer securities on the books of NEOTHERAPEUTICS
only to the extent not inconsistent therewith.
(i) Residence. The office or offices of GPC in which its investment
decision was made is located at the address or addresses of GPC set forth in the
preamble.
(k) Further Restrictions on Disposition. GPC agrees not to make any
disposition of all or any portion of the NEOTHERAPEUTICS Shares unless and
until: (a) there is then in effect a registration statement under the Securities
Act covering such proposed disposition and the disposition is made in accordance
with such registration statement; or (b) (i) GPC shall have notified
NEOTHERAPEUTICS of the proposed disposition and shall have furnished
NEOTHERAPEUTICS with a statement of the circumstances surrounding the proposed
disposition and (ii) if reasonably requested by NEOTHERAPEUTICS , GPC shall have
furnished NEOTHERAPEUTICS with an opinion of counsel, reasonably acceptable to
NEOTHERAPEUTICS , that such disposition will not require registration under the
Securities Act.
(m) Legends. GPC understands that the NEOTHERAPEUTICS Shares, and
any securities issued in respect of or exchange for the NEOTHERAPEUTICS Shares,
may bear one or all of the following legends until they are no longer required
by law or the provisions of this Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT") PURSUANT TO AN
EXEMPTION FROM REGISTRATION CONTAINED IN REGULATION S PROMULGATED UNDER THE
SECURITIES ACT, AND MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO A REGISTRATION UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. NO HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE
SECURITIES ACT."
Any legend required by the Blue Sky laws of any state to the extent such laws
are applicable to the shares represented by the certificate so legended.
The legend set forth above shall be removed by NEOTHERAPEUTICS from any
certificate evidencing NEOTHERAPEUTICS Shares upon transfer of such
NEOTHERAPEUTICS Shares in compliance with Rule 144(k) under the Securities Act
or upon delivery to NEOTHERAPEUTICS of an opinion, in form and substance and by
counsel reasonably satisfactory to NEOTHERAPEUTICS , that a registration
statement under the Securities Act is at that time in effect with respect to the
legended security or that such security can be freely transferred without such a
registration statement being in effect and that such transfer will not
jeopardize the exemption or exemptions from registration pursuant to which the
securities were issued.
(o) Foreign Investors. GPC hereby represents that it has satisfied
itself as to the full observance of the laws of its jurisdiction in connection
with any invitation to subscribe for the NEOTHERAPEUTICS Shares or any use of
this Agreement, including (i) the legal requirements within its jurisdiction for
the purchase of the NEOTHERAPEUTICS Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale, or transfer of the NEOTHERAPEUTICS Shares. GPC's subscription and payment
for and continued beneficial ownership of the NEOTHERAPEUTICS Shares, will not
violate any applicable securities or other laws of GPC's jurisdiction and will
not require NEOTHERAPEUTICS to obtain any permit, make any filing or take any
other action in such jurisdiction.
(q) Offshore Transaction.
(i) GPC is not organized under the laws of or is not a citizen or
resident of the United States and was not formed for the purpose of
investing in Regulation S securities, does not have any of its
securities registered under the Exchange Act, and is not owned by U.S.
Persons as defined in Regulation S and herein.
(ii) At the time the buy order to purchase the NEOTHERAPEUTICS
Shares was originated, GPC was outside the United States.
(iii) All subsequent offers and sales of the NEOTHERAPEUTICS
Shares shall be made in compliance with Regulation S, pursuant to
registration of the securities under the Securities Act or pursuant to
an exemption from such registration.
(iv) GPC agrees that from the date hereof until after one year
after the issuance of the NEOTHERAPEUTICS Shares hereunder (the
"Restrictive Period"), GPC agrees, upon any offer, sale, or transfer of
the NEOTHERAPEUTICS Shares (including any interests therein), GPC, or
any successor, or any Professional under its direction (as defined
below) (except for sales of any NEOTHERAPEUTICS Shares registered under
the Securities Act or otherwise exempt from such registration) (i) will
not sell to a U.S. Person or to an account of or for the benefit of a
U.S. Person or to anyone believed to be a U.S. Person; (ii) will not
engage in any efforts to sell the NEOTHERAPEUTICS Shares in the United
States; (iii) will, at the time the buy order or transfer is originated,
believe the buyer or transferee is outside the United States; (iv) will
send to any transferee who is a Professional, whether acting as agent or
principal, a confirmation or other notice stating that the Professional
is subject to the same restrictions on transfer to U.S. Persons or for
the account of or benefit of U.S. Persons during the Restrictive Period
as provided herein; and (v) will not in connection with the common stock
of NEOTHERAPEUTICS engage in the United States in any short selling,
option writing, equity swaps, or other types of hedging transactions or
derivative transactions. NEOTHERAPEUTICS will not honor or register and
will not be obligated to honor or register any transfer in violation of
these provisions.
(v) For purpose hereof, in general, a "U.S. Person;" means any
natural person, resident of the United States; any partnership or
corporation organized or incorporated under the laws of the United
States or any state or territory thereof; any estate of which any
executor or administrator is a U.S. Person; any trust of which any
trustee is a U.S. Person; any agency or branch of a foreign entity
located in the United States; any nondiscretionary account or similar
account, other than estate or trust, held by a dealer or other fiduciary
organized, incorporated, or (if an individual) resident of the United
States; and any partnership or corporation if organized or incorporated
under the laws of any foreign jurisdiction and formed by a U.S. Person
principally for the purpose of investing in securities and not
registered under the Securities Act unless it is organized and
incorporated and owned by "accredited investors," as defined under Rule
501(a) under the Securities Act, who are not natural persons, estates or
trusts. "U.S. Person" is further defined in Rule 902(o) under the
Securities Act.
(vi) A "Professional" is a "distributor" as defined in Rule
902(c) under the Securities Act (generally any underwriter, or other
person, who participates, pursuant to a contractual arrangement, in the
distribution of the Shares); a dealer
as defined in Section 2(12) of the Exchange Act (encompassing those who
engage in the business of trading or dealing in securities as agent,
broker, or principal); or a person receiving a selling concession, fee,
or other remuneration in respect of the sale of the Shares sold.
2.4. DEFINITION OF "KNOWLEDGE." As used in this Section 2, the phrases
"to the best of" a Party's "knowledge and belief," "known to" or similar phrases
are intended to indicate that no information has come to the attention of senior
management of the Party making the particular representation which would give
such person actual knowledge of the existence or absence of such facts.
3. J-M LICENSE AGREEMENT
3.1. REPRESENTATIONS AND WARRANTIES OF NEOTHERAPEUTICS. NEOTHERAPEUTICS
represents and warrants to GPC that, as of the Effective Date:
(a) The J-M License Agreement is in full force and effect and has not
been modified or amended, except that no representation or warranty is made with
respect to J-M or matters solely within the control or direction of J-M that are
not known to NEOTHERAPEUTICS;
(b) To the best of NEOTHERAPEUTICS's knowledge and belief, neither J-M
nor NEOTHERAPEUTICS is in default with respect to a material obligation under,
and neither such party has claimed or has grounds upon which to claim that the
other party is in default with respect to a material obligation under, the J-M
License Agreement;
(c) To the best of NEOTHERAPEUTICS's knowledge and belief, the rights
that J-M has licensed to NEOTHERAPEUTICS pursuant to the J-M License Agreement
were not and are not subject to any restrictions or limitations except as set
forth in the copy of the J-M License Agreement attached as Exhibit A; and
(d) NEOTHERAPEUTICS has not waived or allowed to lapse any of its rights
under the J-M License Agreement, and no such rights have lapsed or otherwise
expired or been terminated.
3.2. NEOTHERAPEUTICS OBLIGATIONS. NEOTHERAPEUTICS agrees that during
the term of this Agreement:
(a) NEOTHERAPEUTICS will use commercially reasonable efforts to fulfill
its obligations under the J-M License Agreement to the extent such obligations
have not been delegated to GPC and to the extent that failure to do so would
adversely affect GPC or its rights hereunder;
(b) NEOTHERAPEUTICS shall not enter into any subsequent agreement with
J-M that modifies or amends the J-M License Agreement in any way that could
potentially adversely affect GPC's rights or economic interest under this
Agreement without GPC's prior written consent, and shall provide GPC with a copy
of all modifications to or amendments of the J-M License Agreement, regardless
of whether
GPC's consent was required with respect thereto; provided that, NEOTHERAPEUTICS
may redact confidential portions of any such modifications and amendments, but
only to the extent that any such redactions do not impair GPC's ability to take
full advantage of its rights and benefits under this Agreement;
(c) NEOTHERAPEUTICS shall not terminate the J-M License Agreement in
whole or in part, directly or indirectly, without GPC's prior written consent;
(d) NEOTHERAPEUTICS shall promptly furnish GPC with copies of all
reports and other communications NEOTHERAPEUTICS receives from J-M that relate
to the subject matter of this Agreement;
(e) NEOTHERAPEUTICS shall promptly furnish GPC with copies of all
reports and other communications that NEOTHERAPEUTICS furnishes to J-M that
relate to the subject of this Agreement, and to the extent any such reports or
communications relate to the efforts of GPC under this Agreement,
NEOTHERAPEUTICS shall give GPC a reasonable opportunity to review and comment
upon such reports or communications before they are transmitted to J-M;
(f) NEOTHERAPEUTICS shall furnish GPC with copies of all notices
received by NEOTHERAPEUTICS relating to any alleged breach or default by
NEOTHERAPEUTICS under the J-M License Agreement within three (3) business days
after NEOTHERAPEUTICS's receipt thereof and, if NEOTHERAPEUTICS cannot or
chooses not to cure or otherwise resolve any such alleged breach or default,
NEOTHERAPEUTICS shall so notify GPC within five (5) days thereafter and allow
GPC, in GPC's sole discretion, to cure or otherwise resolve any such alleged
breach or default; and
(g) NEOTHERAPEUTICS, acting as an intermediary between J-M and GPC,
shall allow GPC to enjoy the direct benefit of all of NEOTHERAPEUTICS's
affirmative rights, to the extent they relate to the J-M Licensed Technology.
4. JOINT DEVELOPMENT COMMITTEE
4.1. MEMBERS. The Parties shall establish a Joint Development Committee
(the "Joint Development Committee"), which shall comprise three (3)
representatives designated by each Party (or such other number as the Parties
may agree in writing). The initial members of the Joint Development Committee
are set forth on Exhibit C. Any Member of the Joint Development Committee may be
represented at any meeting by a designee who is appointed by such member for
such meeting and who has authority to act on behalf of such member, as evidenced
by written notice from such Member to the chairperson of the Joint Development
Committee. The chairperson of the Joint Development Committee shall be one of
the representatives designated by GPC. The initial chairperson is designated on
Exhibit C. Each Party shall be free to replace its representative members with
new appointees who have authority to act on behalf of such Party on the Joint
Development Committee, on written notice to the other Party.
4.2. RESPONSIBILITIES. The Joint Development Committee shall be
responsible for planning, overseeing and directing the development and
commercialization of, and regulatory filings relating to, Covered Products.
4.3. MEETINGS. The Joint Development Committee shall meet quarterly
until the achievement of the first milestone described in Section 9.2 and,
thereafter, as frequently as the Parties deem appropriate, on such dates and at
such times as the Parties shall agree, on ten (10) days' written notice to the
other Party unless such notice is waived by the other Party. The Joint
Development Committee may convene or be polled or consulted from time to time by
means of telecommunications, video conferences or correspondence, as deemed
necessary or appropriate by the Parties. To the extent that meetings are held in
person, they shall alternate between the offices of the Parties unless the
Parties otherwise agree. The chairperson shall be responsible for sending
notices of meetings to all members.
4.4. DECISIONS.
(a) A quorum for a meeting of the Joint Development Committee shall
require the presence of at least one NEOTHERAPEUTICS member (or designee) and at
least one GPC member (or designee) in person or by telephone. All decisions made
or actions taken by the Joint Development Committee shall be made unanimously by
its members, with the NEOTHERAPEUTICS members cumulatively having one vote and
the GPC members cumulatively having one vote.
(b) In the event that unanimity cannot be reached by the Joint
Development Committee with respect to a matter that is a subject of its
decision-making authority within thirty (30) days after the matter is first
brought before the Joint Development Committee, then the matter shall be decided
by the chairperson of the Joint Development Committee in good faith.
4.5. MINUTES. Within fifteen (15) days after each Joint Development
Committee meeting, GPC shall prepare and distribute minutes of the meeting,
which shall provide a description in reasonable detail of the discussions had at
the meeting and a list of any actions, decisions or determinations approved by
the Joint Development Committee at such meeting. GPC shall be responsible for
circulation of all draft and final minutes. Draft minutes shall be circulated to
all members of the Joint Development Committee sufficiently in advance of the
next meeting to allow review and comment prior to the meeting. Minutes shall be
approved or disapproved, and revised as necessary, at the next meeting. Final
minutes shall be distributed to the members of the Joint Development Committee.
4.6. TERM. The Joint Development Committee shall exist until the
expiration of the Royalty Term for all Covered Products.
4.7. EXPENSES. Each Party shall be responsible for all travel and
related costs for its representatives to attend meetings of, and otherwise
participate on, the Joint Development Committee.
4.8. ADDITIONAL STUDIES. NEOTHERAPEUTICS reserves the right, subject to
the approval and oversight of the Joint Development Committee, which approval
will not be unreasonably withheld, to propose additional studies of Satraplatin
at its own expense.
5. CO-PROMOTION. In the event GPC determines to directly market Covered Products
in the United States itself rather than licensing such Covered Products to a
Third Party for commercialization, GPC shall notify NEOTHERAPEUTICS in writing
reasonably in advance of the commencement of commercialization of any such
Covered Product. If, within ten (10) days after receipt of such notice from GPC,
NEOTHERAPEUTICS indicates in writing to GPC that it desires to co-promote such
Covered Product with GPC, the Parties shall negotiate in good faith the terms of
such co-promotion of such Covered Product. If GPC proposes to enter into an
agreement with a Third Party that includes a grant of rights to such Third Party
to market a Covered Product in the United States, GPC shall use commercially
reasonable efforts to obtain co-promotion rights in the United States with such
Third Party that include NEOTHERAPEUTICS.
6. OWNERSHIP; PATENT PROTECTION
6.1. OWNERSHIP OF GPC DEVELOPMENT TECHNOLOGY. Except as otherwise
provided in this Agreement, the entire right, title and interest in and to all
GPC Development Technology shall be owned solely by GPC, and all decisions
regarding the protection of GPC Development Technology shall remain with GPC.
6.2. OWNERSHIP OF J-M LICENSED TECHNOLOGY, NEOTHERAPEUTICS LICENSED
TECHNOLOGY, NEOTHERAPEUTICS DEVELOPMENT TECHNOLOGY. Except as otherwise provided
in this Agreement, the entire right, title and interest in and to all
NEOTHERAPEUTICS Licensed Technology and NEOTHERAPEUTICS Development Technology
and, as between the Parties, J-M Licensed Technology shall be owned solely by
NEOTHERAPEUTICS, and, except as otherwise set forth in this Agreement or the J-M
License Agreement, all decisions regarding the protection of J-M Licensed
Technology, NEOTHERAPEUTICS Licensed Technology and NEOTHERAPEUTICS Development
Technology shall remain with NEOTHERAPEUTICS.
6.3. OWNERSHIP OF JOINT DEVELOPMENT TECHNOLOGY. GPC and NEOTHERAPEUTICS
shall jointly own all rights, title and interests in Joint Development
Technology.
6.4. PATENT FILING, PROSECUTION AND MAINTENANCE.
(a) Reasonably promptly after the Effective Date the Joint Development
Committee, in consultation with the Parties' respective patent counsel, shall
agree upon a patent filing policy with respect to the NEOTHERAPEUTICS Licensed
Technology, the Joint Development Technology and the NEOTHERAPEUTICS Development
Technology. In addition, from time to time, the Joint Development Committee
shall determine, in accordance with such policy, whether and in what
jurisdictions patent applications should be filed with respect to any Know-How
or Inventions included in the
NEOTHERAPEUTICS Licensed Technology, the Joint Development Technology and the
NEOTHERAPEUTICS Development Technology.
(b) Following a determination by the Joint Development Committee that a
patent application should be filed with respect to any Know-How or Inventions
included in the NEOTHERAPEUTICS Licensed Technology, NEOTHERAPEUTICS, through
outside patent counsel (including, without limitation, foreign patent counsel
and agents) reasonably acceptable to GPC, shall promptly file a patent
application with respect thereto in the jurisdiction(s) selected by the Joint
Development Committee, and thereafter NEOTHERAPEUTICS shall prosecute such
application and maintain any letters patent issuing therefrom. NEOTHERAPEUTICS
shall take all such actions in consultation with GPC and its patent counsel and
shall keep GPC apprised as to the status of all pending patent applications. The
out-of-pocket costs of filing, prosecuting and maintaining any Patents actually
incurred by NEOTHERAPEUTICS under this Section 6.3(b) shall be reimbursed by
GPC. NEOTHERAPEUTICS shall invoice GPC for such costs on a quarterly basis. Such
invoices shall be payable forty-five (45) days after receipt thereof. If the
Joint Development Committee determines to not have a patent application filed
with respect to any Know-How or Inventions included in the NEOTHERAPEUTICS
Licensed Technology, NEOTHERAPEUTICS may, notwithstanding anything else
contained herein, file, prosecute and maintain a patent application and any
letters patent issuing therefrom at its own expense.
(c) The preparation, filing, prosecuting and maintenance of Patents
included in the J-M Licensed Technology shall be accomplished as provided in the
J-M License Agreement, subject to the provisions of this Agreement. Furthermore,
the Parties' respective rights and obligations under this Section shall be
subject, in all events, to any superior rights of J-M under the J-M License
Agreement regarding the J-M Licensed Technology.
(d) If J-M elects to abandon the prosecution or maintenance of any J-M
Patent Right in any country pursuant to Section 1 of Article VII of the J-M
License Agreement and NEOTHERAPEUTICS elects not to assume the prosecution or
maintenance of such J-M Patent Right, NEOTHERAPEUTICS shall so notify GPC. If
GPC notifies NEOTHERAPEUTICS that GPC wishes to assume the prosecution or
maintenance of such J-M Patent Right, NEOTHERAPEUTICS shall exercise its right
to assume such prosecution or maintenance on behalf of GPC, and NEOTHERAPEUTICS
shall assign its rights to such J-M Patent Right in such country to GPC.
6.5. TERMINATION OF SUPPORT BY GPC. GPC shall have the right to
terminate its obligations, if any, under this Agreement in any country with
respect to any Patent included in the NEOTHERAPEUTICS Licensed Technology, from
time to time, upon notice to NEOTHERAPEUTICS; provided, however, that no such
notice shall be effective with respect to any such Patent if it is given fewer
than sixty (60) days prior to a deadline for taking any action that must be
taken in order to preserve the owner's rights in such Patent. Upon the delivery
of any such effective notice, GPC's rights, licenses and obligations under this
Agreement with respect to such Patent shall terminate in any such
country, except those obligations that shall have accrued prior to the delivery
of such notice.
7. GRANT OF LICENSES
7.1. EXCLUSIVE SUBLICENSE GRANT. NEOTHERAPEUTICS hereby grants GPC an
exclusive royalty-bearing right and sublicense in the Field throughout the
Territory, with the right to grant further sublicenses in accordance with the
terms of this Agreement, under the J-M Licensed Technology to research, develop,
make, have made, use, sell, offer for sale, have sold, import and export Covered
Products.
7.2. EXCLUSIVE LICENSE GRANT. NEOTHERAPEUTICS hereby grants to GPC an
exclusive royalty-bearing right and license in the Field throughout the
Territory, with the right to grant sublicenses in accordance with the terms of
this Agreement, under the NEOTHERAPEUTICS Licensed Technology, the
NEOTHERAPEUTICS Development Technology and NEOTHERAPEUTICS's interest in the
Joint Development Technology to research, develop, make, have made, use, sell,
offer for sale, have sold, import and export Covered Products.
7.3. SCOPE OF EXCLUSIVITY. The licenses granted to GPC pursuant to
Sections 7.1 and 7.2 shall be exclusive even as to NEOTHERAPEUTICS, except to
the extent necessary for NEOTHERAPEUTICS to perform its obligations under this
Agreement.
7.4. PROVISIONS REGARDING SUBLICENSES. Any sublicense by GPC of the
rights granted to GPC hereunder shall be consistent with the terms of this
Agreement and shall include an obligation for the Sublicensee to comply with the
applicable obligations of GPC set forth in this Agreement. GPC shall provide to
NEOTHERAPEUTICS a copy of any sublicense agreement of the rights granted herein
with any Third Party promptly after entering into such sublicense; provided
that, GPC may redact confidential portions of any such sublicense agreement, but
only to the extent that any such redactions do not impair NEOTHERAPEUTICS'
ability to ensure compliance with the provisions of this Agreement.
7.5. TRANSFER OF INFORMATION. Promptly following the Effective Date,
NEOTHERAPEUTICS shall coordinate with the Joint Development Committee and
provide copies of and access to all of LICENSOR'S INFORMATION, LICENSOR'S
ONGOING INFORMATION and all other information relating to the J-M Patent Rights
in its possession. Thereafter, NEOTHERAPEUTICS will continue to provide such
information, as well as NEOTHERAPEUTICS Development Technology, to GPC as it
becomes available to or is conceived by NEOTHERAPEUTICS as soon as practicable
after it becomes available to or is conceived by NEOTHERAPEUTICS.
8. DEVELOPMENT AND COMMERCIALIZATION
8.1. DEVELOPMENT EFFORTS BY GPC. GPC shall, either itself or through its
Affiliates or Sublicensees:
(a) at its own expense, or at the expense of its Affiliates or
Sublicensees, diligently conduct the development of Covered Products within the
Field using Platinum Complexes. GPC shall exercise in the performance of such
development commercially reasonable technical skill and competence;
(b) use its commercially reasonable endeavors to obtain appropriate
regulatory approvals for Covered Products in the United States or any of the
countries currently comprising the European Union and Japan and to promote the
distribution and sale of Covered Products in the Field in such countries where
such regulatory approval is obtained;
(c) ensure that all literature prepared by GPC and relating to Covered
Products bears an acknowledgement to the effect that they are subject to a
license from J-M and NEOTHERAPEUTICS, and all protocols prepared by GPC and
relating to Covered Products bears an acknowledgement to the effect that they
are subject to a license from NEOTHERAPEUTICS and attach to all Covered Products
a label quoting relevant patent numbers and stating that such Covered Products
are made under license under J-M and NEOTHERAPEUTICS; and
(d) advise NEOTHERAPEUTICS promptly of all approvals granted with
respect to Covered Product.
8.2. DELEGATION OF IND AUTHORITY; RIGHT TO REFERENCE. NEOTHERAPEUTICS
acknowledges that a Phase II clinical trial of Satraplatin has been conducted
pursuant to an Investigational New Drug Application Number 44,615 filed with the
FDA (the "Filed IND"). Promptly after the Effective Date, NEOTHERAPEUTICS shall
prepare for filing with the FDA all documents necessary to designate and
delegate to GPC all exclusive (even as to NEOTHERAPEUTICS) authority to take
actions and receive all communications from the FDA with respect to the Filed
IND and shall file such documents with the FDA following GPC's review and
approval of such documents. NEOTHERAPEUTICS shall not take any action to revoke
or limit the delegation described in the preceding sentence. In addition, in the
event that the FDA, for any reason, fails to recognize and give full effect to
the delegation described in this Section, NEOTHERAPEUTICS shall not take any
action with respect to the Filed IND or the clinical trials conducted pursuant
to the Filed IND without the prior approval of the Joint Development Committee.
In addition to the foregoing, NEOTHERAPEUTICS hereby grants to GPC an
irrevocable right to reference the Filed IND and all other regulatory
submissions, approvals, clearances, data and other documents and information
related to the Filed IND that NEOTHERAPEUTICS has filed or referenced with the
FDA. Promptly after the Effective Date, the Parties shall begin planning and
coordinating the transfer to the Joint Development Committee of all
responsibilities regarding clinical trials conducted pursuant to the Filed IND.
GPC shall promptly provide to NEOTHERAPEUTICS copies of all correspondence
related to Covered Products delivered to or received from the FDA.
8.3. OWNERSHIP OF REGULATORY FILINGS. Except for the Filed IND, all
INDs, NDAs and other regulatory filings made or filed by GPC with respect to any
Covered Products shall be in the name of, and be owned solely by, GPC.
8.4. REPORTING. (a) GPC shall promptly notify NEOTHERAPEUTICS concerning
any happening or circumstance that GPC understands will result in
NEOTHERAPEUTICS's loss of any of its rights under the J-M License Agreement, and
GPC shall reasonably cooperate with NEOTHERAPEUTICS to prevent any such loss.
(b) Following any acquisition of or by NEOTHERAPEUTICS (whether through
merger, consolidation, acquisition (directly or indirectly) of stock
representing thirty percent (30%) or more of the outstanding voting stock or
other of its equity securities, sale of all or substantially all of its assets,
or otherwise) by or of any Third Party that is a substantial competitor of GPC,
as determined by objective standards (which shall include, but not be limited
to, a determination as to whether such Third Party is developing or marketing a
drug of the same chemical class as the Covered Product or whether such Third
Party is developing or marketing a drug targeted to the same tumor type as a any
product under development or being marketing by GPC) , GPC shall not be required
to include in any report furnished by GPC pursuant to this Agreement, or provide
to any representative of NEOTHERAPEUTICS (or any successor thereto), any
information that GPC, acting in good faith, determines to be competitively
sensitive or enabling information, unless such information is required for
compliance with the obligations to J-M under the J-M License Agreement, in which
event NEOTHERAPEUTICS or its successor, as the case may be, and J-M (if it shall
receive such information) shall execute a nondisclosure agreement, satisfactory
to GPC in form and substance, concerning all such information.
8.5. TRADEMARKS. GPC shall market the Covered Products throughout the
Territory under trademarks (collectively, the "Trademarks") selected by GPC. GPC
shall own all right, title and interest in and to such Trademarks and shall bear
all costs and expenses of registering, and maintaining the registration of,
same.
9. MONETARY OBLIGATIONS
9.1. LICENSE FEE. In partial consideration of the rights and licenses
granted to GPC under this Agreement, GPC shall pay to NEOTHERAPEUTICS the
following license fees at the times indicated below:
(a) Within ten (10) days after the execution of this Agreement, or such
later date as the First Amendment to the J-M License Agreement shall have been
amended to (x) delete all references in the J-M License Agreement to the form
sub-license agreement attached as Exhibit 1 to the J-M License Agreement and (y)
change the references in Section (7) of the First Amendment to Paragraph 1 of
Article IX in lieu of the references to Paragraph 6 of Article VII, GPC shall
pay NEOTHERAPEUTICS a non-refundable, non-creditable, one-time license fee in
the amount of US$2,000,000 in cash.
(b) Within thirty (30) days of the first dosing of the first patient in
the first Phase III or registrational clinical trial of Satraplatin after the
Effective Date (such date of dosing, the "Dosing Date"), GPC shall pay
NEOTHERAPEUTICS a non-refundable, non-creditable, one time license fee in the
amount of $2,000,000, $1,000,000 of which fee shall be payable in cash and
$1,000,000 of which fee shall be payable through the purchase by GPC, for an
aggregate payment of $1,000,000, of a number of shares of common stock, par
value $.001 per share, of NEOTHERAPEUTICS equal to the lesser of (i) the
quotient obtained by dividing (x) $1,000,000 by (y) one hundred and fifty
percent (150%) of the average closing sale price of the NEOTHERAPEUTICS common
stock, as reported by the Nasdaq quotation system for the twenty (20)
consecutive trading days ending on the third trading day before the Dosing Date,
or (ii) 19.9% of the number of shares of NEOTHERAPEUTICS common stock
outstanding as of the Dosing Date, or such other number of shares as Nasdaq may
specify as the highest number of shares of common stock that NEOTHERAPEUTICS may
issue hereunder without first obtaining stockholder approval (the
"NEOTHERAPEUTICS Shares"); provided that, if the number of NEOTHERAPEUTIC Shares
to be issued pursuant to this Section is determined pursuant to clause (ii)
above, then, until GPC has purchased the number of shares of NEOTHERAPEUTICS
common stock determined pursuant to clause (i) above and subject to
NEOTHERAPEUTICS ability to issue additional shares without first obtaining
stockholder approval pursuant to Nasdaq regulations, all milestone payments owed
by GPC to NEOTHERAPEUTICS pursuant to Section 9.2 below shall be used to
purchase additional shares of NEOTHERAPEUTICS common stock at the price
determined as of the date of the achievement of the applicable milestone in
accordance with the formula set in clause (i)(y) above, and such additional
shares shall be considered to be NEOTHERAPEUTICS Shares hereunder. Concurrently
with the first issuance of the NEOTHERAPEUTICS Shares, the Parties shall execute
a Registration Rights Agreement in the form attached hereto as Exhibit D. GPC
agrees that it shall be a condition of the issuance of the NEOTHERAPEUTICS
Shares that GPC make the representations set forth in Section 2.3 as of the date
of issuance of the NEOTHERAPEUTICS Shares. GPC represents that it has not
engaged in any short selling, option writing, equity swaps, or other types of
hedging transactions or derivative transactions with respect to the common stock
of NEOTHERAPEUTICS, and GPC further agrees that it will not engage in any such
transaction with respect to the common stock of NEOTHERAPEUTICS at any time
during the period commencing on the Effective Date and ending one year after the
issuance of the NEOTHERAPEUTICS Shares.
9.2. DEVELOPMENT MILESTONE PAYMENTS BY GPC. (a) In partial
consideration of the rights and licenses granted to GPC by NEOTHERAPEUTICS under
this Agreement, GPC shall pay NEOTHERAPEUTICS the following milestone payments
upon the first occurrence of each event set forth below achieved by GPC or its
Affiliates:
(i) {redacted} upon acceptance by the FDA of an NDA covering Satraplatin
(ii) {redacted}
(iii) {redacted}
{redacted} Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
(iv) {redacted}
(v) {redacted}
(vi) {redacted}
(vii) {redacted}
Each of the foregoing payments shall be made within thirty (30) days after
achievement of such milestone. For the avoidance of doubt, after GPC has made
any of the foregoing payments with respect to any one Covered Product, GPC shall
have no further obligation to make such payment with respect to any other
Covered Product. As used in this Section 9.2, "approval" shall mean approval by
the FDA, the EMEA or the MHW of a NDA, MAA or other application for regulatory
approval to market and sell a Covered Product in the United States, the European
Union or Japan, and with respect to the European Union shall also include any
government pricing or reimbursement approval necessary to market or sell such
Covered Product in the European Union.
9.3. ROYALTIES. (a) Subject to Section 9.3(b), in partial consideration
of the rights and licenses granted to GPC under this Agreement, GPC shall pay
NEOTHERAPEUTICS a royalty on Net Sales of each Covered Product, commencing on
the First Commercial Sale of each Covered Product by GPC or its Affiliates in
each country in the Territory, in an amount equal to the applicable percentage
of the world-wide Net Sales of such Covered Product by GPC and its Affiliates
throughout the Territory during each calendar year (or portion thereof) during
the term of this Agreement:
(i) {redacted}
(ii) {redacted}
(iii) {redacted}
{redacted}
(b) Notwithstanding the foregoing, GPC's obligation to make payments
with respect to each Covered Product in each country in the Territory under
Sections 9.3 and 9.4 shall expire upon the expiration of the Royalty Term with
respect to such Covered Product in such country.
(c) The obligation to pay royalties to NEOTHERAPEUTICS under this
Section 9.3 is imposed only once with respect to the same unit of a Covered
Product, regardless of the number of Patents pertaining thereto.
9.4. SUBLICENSE INCOME.
(a) {redacted}
(b) {redacted}
{redacted} Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
9.5. THIRD PARTY PAYMENTS. (a) GPC, at its sole expense, shall pay all
amounts owing to any Third Party to obtain rights to any Valid Claims of any
issued patent or patent application issued to Third Parties determined by the
Joint Development Committee to be necessary for GPC's exercise of its rights
hereunder to research, develop, make, have made, use, sell, offer for sale, have
sold, import or export any Covered Product (collectively, "Third Party
Payments"). Except as provided in Section 9.5(b), GPC shall not be entitled to
any credit under this Agreement on account of any Third Party Payments paid by
GPC.
(b) {redacted}
9.6. PAYMENTS UNDER J-M LICENSE. Notwithstanding anything else
contained herein, NEOTHERAPEUTICS shall remain solely responsible to J-M for all
payments due to J-M under the J-M License.
9.7. REIMBURSEMENT OF NEOTHERAPEUTICS DEVELOPMENT EXPENSES. Within
thirty (30) days of receipt of invoices from NEOTHERAPEUTICS, which invoices
shall be delivered by NEOTHERAPEUTICS no more frequently than quarterly, GPC
shall reimburse NEOTHERAPEUTICS for all costs and expenses (including full
reimbursement for NEOTHERAPEUTICS personnel) incurred by NEOTHERAPEUTICS in the
development of Covered Products as approved in advance by the Joint Development
Committee.
10. PAYMENTS AND REPORTS
10.1. PAYMENT. Except as otherwise provided in this Agreement, all
royalty and other payments due hereunder shall be paid quarterly within thirty
(30) days after the end of each calendar quarter. Each such payment shall be
accompanied by a statement, Covered Product-by-Covered Product and
country-by-country, of the amount of Net Sales during such quarter, the amount
of royalties due on such Net Sales, the amount of Sublicense Fees and Sublicense
Royalties during such quarter and the amount owed to NEOTHERAPEUTICS on account
of such Sublicense Fees and Sublicense Royalties.
10.2. MODE OF PAYMENT. GPC shall make all payments required under this
Agreement as directed by NEOTHERAPEUTICS from time to time, in U.S. Dollars
(except as provided in Section 10.6). All royalties due hereunder shall first be
determined in the currency of the country in which the Covered Products in
question were sold and then converted into equivalent U.S. funds. The exchange
rate for such conversion shall be that rate quoted in The Wall Street Journal on
the last business day of the applicable reporting period.
10.3. RECORDS RETENTION. GPC and its Affiliates shall keep complete and
accurate records pertaining to the sale of Covered Products in the Territory in
accordance with the obligations therefor set forth in the J-M License Agreement.
10.4. AUDIT REQUEST. At the request and expense (except as provided
below) of NEOTHERAPEUTICS, GPC and its Affiliates shall permit an independent,
certified
{redacted} Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
public accountant appointed by NEOTHERAPEUTICS and reasonably acceptable to GPC,
at reasonable times and upon reasonable notice, to examine no more than once per
year those records and all other material documents relating to or relevant to
Net Sales in the possession or control of GPC and its Affiliates, for a period
of three years after such royalties have accrued. The results of any such
examination shall be made available to both Parties. If, as a result of any
inspection of the books and records of GPC or its Affiliates, it is shown that
GPC's royalty payments under this Agreement were less than the amount which
should have been paid, then GPC shall make all payments required to eliminate
any discrepancy revealed by said inspection within forty-five (45) days after
NEOTHERAPEUTICS's demand therefor. Furthermore, if the aggregate royalty
payments GPC made were less than ninety five (95%) of the amount which should
have been paid made during the period in question, GPC shall also reimburse
NEOTHERAPEUTICS for the reasonable out-of-pocket cost of such inspection and
shall pay interest on the deficiency pursuant to Section 10.7.
10.5. TAXES. In the event that GPC is required to withhold any tax to
the tax or revenue authorities in any country in the Territory in connection
with any payment to NEOTHERAPEUTICS due to the laws of such country which
payment is credited to NEOTHERAPEUTICS's tax liability, such amount shall be
deducted from the royalty or other payment to be made by GPC, and GPC shall
notify NEOTHERAPEUTICS and promptly furnish NEOTHERAPEUTICS with copies of any
tax certificate or other documentation evidencing such withholding. Each Party
agrees to cooperate with the other Party in claiming exemptions from such
deductions or withholdings under any agreement or treaty from time to time in
effect.
10.6. BLOCKED CURRENCY. If at any time legal restrictions prevent GPC's
prompt remittance of part or all of the royalties due with respect to any
country where a Covered Product is sold, GPC shall convert the amount owed to
NEOTHERAPEUTICS into U.S. funds and shall pay NEOTHERAPEUTICS directly from
GPC's U.S. source of funds for the amount impounded. GPC shall then pay all
future royalties due to NEOTHERAPEUTICS from GPC's U.S. source of funds so long
as the legal restrictions of this Section 10.6 still apply.
10.7. LATE PAYMENTS. In the event that any payment GPC is required to
make hereunder is not made within thirty (30) days after such payment was
originally due, GPC shall pay interest on the past due amount as follows:
(a) If GPC's late payment pertains to a payment NEOTHERAPEUTICS is
required to make under the J-M License Agreement and causes NEOTHERAPEUTICS to
become liable to pay interest with respect to such payment under the J-M License
Agreement, then GPC shall pay interest on the past due amount as provided under
the applicable provision(s) of the J-M License Agreement.
(b) In all other events, GPC shall pay interest on the past due amount
at the rate of twelve percent (12%) per annum, until payment in full is made.
11. MANUFACTURING. Promptly following the Effective Date, GPC and
NEOTHERAPEUTICS shall negotiate in good faith the terms of a Supply Agreement
regarding the supply of PLATINUM COMPLEXES (as defined in the J-M License
Agreement) to GPC. {redacted}
12. CONFIDENTIALITY
12.1. CONFIDENTIALITY; EXCEPTIONS. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the Parties agree
that, during the term of this Agreement and for five years thereafter, each
Party, its Affiliates and its Sublicensees, if any (collectively, a "receiving
Party"), shall use their best efforts to keep completely confidential, shall not
publish or otherwise disclose to any Third Party and shall not use for any
purpose other than the performance of this Agreement both the financial terms of
this Agreement and any information furnished to it by the other Party, its
Affiliates or its Sublicensees, if any (collectively, a "disclosing Party") (and
shall ensure that its and its Affiliates' and its Sublicensees' respective
directors, officers, employees or agents do likewise), except to the extent that
it can be established by the receiving Party by competent proof that such
information: (i) is, or hereafter becomes, generally available to the public
other than by reason of any default by the receiving Party with respect to its
confidentiality obligations hereunder; (ii) was already known to the receiving
Party at the time of disclosure by the disclosing Party; (iii) was lawfully
disclosed to the receiving Party by a Third Party who was not in default of any
confidentiality obligation to the disclosing Party; or (iv) is independently
developed by or for the receiving Party without reference to or reliance upon
the information furnished by the disclosing Party (all such information to which
none of the foregoing exceptions applies, "Confidential Information"). The
NEOTHERAPEUTICS Licensed Technology and NEOTHERAPEUTICS Development Technology
shall be the Confidential Information of NEOTHERAPEUTICS and the GPC Development
Technology shall be the Confidential Information of GPC. The Joint Development
Technology shall be the Confidential Information of both Parties.
12.2. EXCLUSIONS TO CONFIDENTIALITY. The restrictions contained in
Section 12.1 shall not apply to any Confidential Information in the hands of a
receiving Party that (i) is submitted by the receiving Party to governmental
authorities to facilitate the issuance of marketing approvals for a Covered
Product, provided that reasonable measures shall be taken to assure confidential
treatment of such information, if practicable; (ii) is provided by GPC to any
Third Party under appropriate terms and conditions, including confidentiality
provisions equivalent to those in this Agreement, for consulting, manufacturing
development, manufacturing, external testing, marketing trials and sublicensing
or potential sublicensing; or (iii) is otherwise required to be disclosed in
compliance with applicable laws or regulations (including, without limitation,
to comply with any governmental or stock exchange disclosure requirements) or an
order by a court or other regulatory body having competent jurisdiction;
provided, however, that if a receiving Party is required to make any such
disclosure of the disclosing Party's Confidential Information such receiving
Party shall, except where impracticable for necessary disclosures (for example
to physicians conducting studies or to health authorities), give reasonable
advance notice to the other Party of such disclosure
{redacted} Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
requirement and, except to the extent inappropriate in the case of patent
applications or otherwise, will use its best efforts to secure confidential
treatment of such Confidential Information required to be disclosed. In
addition, any press release or other public announcement permitted by the terms
of Section 17.7 hereof shall be excluded from the provisions of Section 12.1.
12.3. INJUNCTIVE RELIEF. The Parties acknowledge that monetary damages
alone would not adequately compensate the disclosing Party in the event of a
material breach by the receiving Party of this Section 12, and that, in addition
to all other remedies available to the disclosing Party under this Agreement, at
law or in equity, it shall be entitled to injunctive relief for the enforcement
of its rights under this Section 12, without the posting of a bond or other
security.
13. INTELLECTUAL PROPERTY
13.1. PATENT ENFORCEMENT. (a) Each Party shall notify the other promptly
after such Party becomes aware of any alleged infringement of any Patent
licensed to GPC under this Agreement in any country in the Territory. Except as
provided in Section 13.3, GPC shall have the first right, but not the duty, to
institute patent infringement actions against Third Parties with respect to any
such alleged infringement. GPC shall take all such actions under this Section
13.1(a) (other than with respect to a Patent included solely in the GPC
Development Technology) in reasonable consultation with NEOTHERAPEUTICS and
shall keep NEOTHERAPEUTICS apprised as to the status of any such infringement
action GPC institutes. NEOTHERAPEUTICS shall execute all reasonable, necessary
and proper documents and take such actions as shall be appropriate to allow GPC
to institute and prosecute infringement actions under this Section 13.1(a).
(b) The costs and expenses of bringing and maintaining any infringement
action under Section 13.1(a) shall be borne solely by GPC.
(c) Any award or compensation (including the fair market value of
non-monetary compensation) paid by Third Parties as a result of any infringement
action brought by GPC under Section 13.1(a) (whether by way of settlement or
otherwise) shall be allocated first to reimbursement of GPC for all expenses
incurred by it in connection with such action. Any remaining award or
compensation shall be used to pay NEOTHERAPEUTICS the royalty it would have been
entitled to receive had the balance of such recovery or damages, to the extent
attributable to sales of such infringing products, been attributable to sales of
Covered Products by GPC hereunder.
(d) Except as provided in Section 13.3, in the event GPC elects not to,
or fails to, exercise its rights under Section 13.1(a) with respect to any
alleged infringement of a Patent licensed to GPC under this Agreement (excluding
any Patent included solely in the GPC Development Technology) within one hundred
twenty (120) days after receiving notice thereof, NEOTHERAPEUTICS shall have the
right, but not the duty, to institute patent infringement actions against Third
Parties with respect to any such alleged infringement. NEOTHERAPEUTICS shall
take all such actions under this Section 13.1(d) in reasonable consultation with
GPC and shall keep GPC apprised as to
the status of any such infringement action NEOTHERAPEUTICS institutes. GPC shall
execute all reasonable, necessary and proper documents and take such actions as
shall be appropriate to allow NEOTHERAPEUTICS to institute and prosecute
infringement actions under this Section 13.1(d). Any award or compensation
(including the fair market value of non-monetary compensation) paid by Third
Parties as a result of any infringement action brought by NEOTHERAPEUTICS under
this Section 13.1(d) (whether by way of settlement or otherwise) shall be
allocated first to reimbursement of NEOTHERAPEUTICS for all expenses incurred by
it in connection with such action. Any remaining award or compensation shall be
allocated equally between the Parties.
13.2. INFRINGEMENT ACTIONS BY THIRD PARTIES. (a) Each Party shall notify
the other Party promptly in writing of any claim of, or action for, infringement
of any Patents owned or licensed by Third Parties which is threatened, made or
brought against either Party by reason of either Party's performance of its
obligations under this Agreement or manufacture, use or sale of any Covered
Products in the Territory in the Field.
(b) Except as provided in Section 13.3, in the event that such an action
for infringement is commenced solely against a Party or both Parties jointly
and/or any of their respective Affiliates or Sublicensees, as the case may be,
with respect to any Covered Product developed and commercialized by GPC, its
Affiliates and/or Sublicensees, GPC shall defend such action at its own expense,
and NEOTHERAPEUTICS hereby agrees to assist and cooperate with GPC to the extent
necessary in the defense of such suit, in accordance with Section 13.2(c). GPC
shall have the right to settle any such action or consent to an adverse judgment
thereto, and NEOTHERAPEUTICS's consent shall not be required unless such
settlement or consent: (i) imposes any material obligation on NEOTHERAPEUTICS
(including under Section 13.2(d)), or (ii) materially impairs NEOTHERAPEUTICS's
rights in or to any J-M Licensed Technology, NEOTHERAPEUTICS Licensed
Technology, NEOTHERAPEUTICS Development Technology and/or Joint Development
Technology, in which event NEOTHERAPEUTICS's consent shall not be unreasonably
withheld or delayed.
(c) The costs of defending any infringement action with respect to a
Covered Product developed and commercialized by GPC, its Affiliates and/or
Sublicensees shall be borne solely by GPC.
(d) During the pendency of any such action, GPC shall continue to pay
all royalties due hereunder. Subject to Section 9.5(b), GPC shall be fully
liable for the payment of any award for damages, or any amount due pursuant to
any settlement entered into by GPC, to the extent that any such action pertains
to a Covered Product developed and commercialized by GPC and/or its Affiliates
or Sublicensees.
(e) Except to the extent that the provisions of Section 13.1 shall apply
to any portion thereof, GPC shall retain any award or compensation (including
the fair market value of non-monetary compensation) received by GPC as a result
of any such action (i.e., as a result of a counterclaim).
13.3. SUPERIOR RIGHTS OF J-M. Notwithstanding any other provision of
this Agreement, the Parties' respective rights and obligations under this
Section 13 shall be subject, in all events, to any superior rights of J-M under
the J-M License Agreement regarding the J-M Licensed Technology.
14. INDEMNIFICATION
14.1. BY GPC. GPC shall indemnify and hold NEOTHERAPEUTICS and its
Affiliates and their respective directors, officers, employees and agents,
harmless from and against any and all liabilities, damages, losses, costs and
expenses (including the reasonable fees of attorneys and other professionals and
other reasonable litigation expenses) arising out of or resulting from:
(i) the negligence, recklessness or intentional misconduct of
GPC, its Affiliates or its Sublicensees and their respective directors,
officers, employees and agents, in connection with the work performed by
GPC in connection with the development of Covered Products or pursuant
to Section 8 or in connection with GPC's exercise of any of its rights
hereunder;
(ii) any and all product liability claims resulting from the
development and/or commercialization of any Covered Product by GPC, its
Affiliates or its Sublicensees;
(iii) any warranty claims, Covered Product recalls or any tort
claims of personal injury (including death) or property damage relating
to or arising out of the manufacture, use, distribution or sale of any
Covered Product by GPC, its Affiliates or its Sublicensees due to any
negligence, recklessness or intentional misconduct by, or strict
liability of, GPC, its Affiliates or its Sublicensees, and their
respective directors, officers, employees and agents, except, in each
case, to the comparative extent such claim arose out of or resulted from
the negligence, recklessness or intentional misconduct of
NEOTHERAPEUTICS or its Affiliates and their respective directors,
officers, employees and agents; or
(iv) any breach of any representation or warranty made by GPC in
Section 2.1.
14.2. BY NEOTHERAPEUTICS. NEOTHERAPEUTICS shall indemnify and hold GPC,
its Affiliates and its Sublicensees and their respective directors, officers,
employees and agents, harmless from and against any and all liabilities,
damages, losses, costs and expenses (including the reasonable fees of attorneys
and other professionals and other reasonable litigation expenses) arising out of
or resulting from:
(i) the negligence, recklessness or intentional misconduct of
NEOTHERAPEUTICS or its Affiliates and their respective directors,
officers, employees and agents, in connection with the work performed by
NEOTHERAPEUTICS under the development of Covered Products or pursuant to
Section 5 or in connection with NEOTHERAPEUTICS's exercise of any of its
rights hereunder; or
(ii) any breach of any representation or warranty made by
NEOTHERAPEUTICS pursuant to Section 2 or 3.1.
14.3. NOTICE. In the event that any Person entitled thereto (an
"Indemnitee") is seeking indemnification under Section 14.1 or 14.2, such
Indemnitee shall inform the indemnifying Party of a claim as soon as reasonably
practicable after the indemnitee receives notice of the claim, shall permit the
indemnifying Party to assume direction and control of the defense of the claim
(including the sole right to settle it at the sole discretion of the
indemnifying Party, provided that such settlement does not impose any material
obligation on the indemnitee or the other Party) and shall cooperate as
requested (at the expense of the indemnifying Party) in the defense of the claim
(including, without limitation, granting the indemnifying Party limited access
to pertinent records and making persons under such Indemnitee's control
available for interview and testimony).
14.4. COMPLETE INDEMNIFICATION. As the Parties intend complete
indemnification, all costs and expenses incurred by any Indemnitee to enforce
this Section 14 shall be reimbursed by the indemnifying Party.
15. TERM; TERMINATION
15.1. TERM. This Agreement shall commence as of the Effective Date and,
unless sooner terminated as provided hereunder, shall expire as follows:
(a) As to each Covered Product in each country in the Territory, this
Agreement shall expire upon the expiration of the Royalty Term with respect to
such Covered Product in such country.
(b) This Agreement shall expire in its entirety upon the termination of
the respective Royalty Terms with respect to all Covered Products in all
countries in the Territory.
15.2. EFFECT OF EXPIRATION. Following the expiration of this Agreement
with respect to a Covered Product in a country in the Territory pursuant to
Section 15.1(a), GPC shall have the royalty-free, perpetual right to continue to
make, have made, use, sell, offer for sale, have sold and export such Covered
Product in such country. Following the expiration of the term of this Agreement
in its entirety pursuant to Section 15.1(b), GPC shall have the royalty-free,
perpetual right to continue to make, have made, use, sell, offer for sale, have
sold and export all Covered Products in all countries in the Territory.
15.3. TERMINATION BY EITHER PARTY. Each Party shall have the right to
terminate this Agreement, upon notice to the other Party, in the event that:
(i) Such other Party materially defaults with respect to any of
its material obligations under this Agreement and does not cure such
default within sixty (60) days after the receipt of a notice from the
non-breaching Party specifying the nature of, and requiring the remedy
of, such default (or, if such default cannot be cured within such sixty
(60)-day period, if the breaching Party does not commence and diligently
continue actions to cure same during such sixty
(60)-day period); provided that, (x) if NEOTHERAPEUTICS is the Party
claiming a default by GPC, GPC shall promptly following receipt of such
notice of default notify NEOTHERAPEUTICS if it intends to seek to cure
such default, (y) if the default relates to the payment of any amounts
owed under this Agreement, the cure period described above shall be
fifteen (15) days from receipt of notice of such default, and (z) if any
such default is limited to the breaching Party's obligations with
respect to a particular Covered Product and/or a particular country in
the Territory, then any termination of this Agreement under this clause
(i) due to such default shall be limited to the breaching Party's rights
under this Agreement with respect to such Covered Product and/or
country. Any termination pursuant to this clause (i) shall be without
prejudice to any of the non-breaching Party's other rights under this
Agreement, and in addition to any other remedies available to it by law
or in equity;
(ii) The other Party shall have: (i) voluntarily commenced any
proceeding or filed any petition seeking relief under the bankruptcy,
insolvency or other similar laws of any jurisdiction, (ii) applied for,
or consented to, the appointment of a receiver, trustee, custodian,
sequestrator, conciliator, administrator or similar official for it or
for all or substantially all of its property, (iii) filed an answer
admitting the material allegations of a petition filed against or in
respect of it in any such proceeding, (iv) made a general assignment for
the benefit of creditors of all or substantially all of its assets, (v)
admitted in writing its inability to pay all or substantially all of its
debts as they become due, or (vi) taken corporate action for the purpose
of effecting any of the foregoing; or
(iii) An involuntary proceeding shall have been commenced, or any
involuntary petition shall have been filed, in a court of competent
jurisdiction seeking: (i) relief in respect of the other Party, or of
its property, under the bankruptcy, insolvency or similar laws of any
jurisdiction, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conciliator, administrator or similar official for such
other Party or for all or substantially all of its property, or (iii)
the winding-up or liquidation of such other Party; and, in each case,
such proceeding or petition shall have continued undismissed for sixty
(60) days, or an order or decree approving or ordering any of the
foregoing shall have continued unstayed, unappealed and in effect for
thirty (30) days.
15.4. TERMINATION BY GPC. Notwithstanding any other provision of this
Agreement, GPC shall have the right to terminate this Agreement, in its entirety
or with respect to any particular Covered Product and/or country in the
Territory, at any time upon six (6) months' notice (or less, at NEOTHERAPEUTICS
discretion) to NEOTHERAPEUTICS.
15.5. EFFECT OF EXPIRATION OR TERMINATION. (a) Subject to Section
15.5(b), upon any termination of this Agreement by NEOTHERAPEUTICS pursuant to
Section 15.3 or by GPC pursuant to Section 15.4, GPC shall (i) transfer and
assign to NEOTHERAPEUTICS all of GPC's right, title and interest in and to any
GPC Development Technology and all data, reports, records, materials and other
intellectual
property owned or controlled by GPC that relates exclusively to the Covered
Products; (ii) grant NEOTHERAPEUTICS a non-exclusive license, solely for the
purpose of NEOTHERAPEUTICS's developing, making, having made, using, marketing
and selling Covered Products, under GPC's interest in any Joint Development
Technology that does not exclusively relate to the Covered Products; and (iii)
transfer and assign to NEOTHERAPEUTICS ownership of all INDs, NDAs and other
regulatory filings made or filed with respect to any Covered Product (or, if
such transfer and assignment is not permitted under the laws of any applicable
jurisdiction, GPC shall take such other permitted actions with respect to such
filings as may be reasonably requested by NEOTHERAPEUTICS), all upon
commercially reasonable, arms length financial terms and conditions that the
Parties shall negotiate in good faith and agree upon as soon as practicable
after such termination of this Agreement; provided that, if this Agreement is
terminated by GPC pursuant to Section 15.4, then NEOTHERAPEUTICS shall not be
obligated to pay any amount for the licenses and transfers described in this
sentence. In the event the Parties, despite the mutual use of good faith
efforts, are unable to agree upon such terms and conditions, the Parties shall
appoint an independent valuation expert who shall determine such terms and
conditions, which determination shall be binding upon the Parties. If the
Parties are unable to agree upon the appointment of such an expert, then each
Party shall nominate an expert (the cost of whom shall be borne by such Party),
and both experts appointed by the Parties shall jointly appoint the expert who
shall make such determination. Any expert appointed pursuant to this Section
15.5(a) shall have at least fifteen (15) years' experience in the business of
pharmaceutical development and commercialization. Except as provided above, the
costs and expenses of any expert acting under this Section 15.5(a) shall be
borne equally by the Parties.
(b) Notwithstanding the foregoing:
(i) In the event of any termination of this Agreement by NEOTHERAPEUTICS
pursuant to Section 15.3 or by GPC pursuant to Section 15.4 with respect to
fewer than all of the Covered Products and/or fewer than all of the countries in
the Territory, the rights, licenses and other benefits to be transferred,
granted and otherwise assigned to NEOTHERAPEUTICS under Section 15.5(a) shall be
expressly limited to those pertaining to the Covered Products and/or the
countries in the Territory to which such termination applies; and
(ii) At any time prior to any transfer, granting and assignment of
rights, licenses and benefits to NEOTHERAPEUTICS pursuant to Section 15.5(a),
NEOTHERAPEUTICS may elect, upon notice to GPC, to waive the application of
Section 15.5(a) with respect to such rights, licenses and benefits. Following
any such waiver neither Party shall have any obligation or liability to the
other with respect to such rights, licenses and benefits.
15.6. RIGHT TO SELL STOCK ON HAND. Provided that GPC is not in material
breach of any obligation under this Agreement at the time of any termination of
this Agreement, in whole or in part, GPC shall have the right for one year
thereafter to dispose of all Covered Product then in its inventory and to
complete manufacture of and dispose of any work-in-progress then being
manufactured, as though this Agreement had
not terminated. GPC shall pay royalties thereon, in accordance with the
provisions of this Agreement, as though this Agreement had not terminated.
15.7. SURVIVAL OF SUBLICENSES. Upon any termination of this Agreement,
all sublicenses granted by GPC under this Agreement shall be automatically
assigned to NEOTHERAPEUTICS, which shall thereafter receive all benefits and
have all obligations under the sublicenses as in the place and stead of GPC.
15.8. EFFECT OF TERMINATION OF J-M LICENSE AGREEMENT. Upon any
termination of the J-M License Agreement, GPC shall attorn to and accept J-M in
place of NEOTHERAPEUTICS such that this Agreement shall be deemed to be an
agreement between J-M and GPC.
15.9. ACCRUED RIGHTS, SURVIVING OBLIGATIONS. (a) Termination,
relinquishment or expiration of this Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either Party
prior to such termination, relinquishment or expiration. Such termination,
relinquishment or expiration shall not relieve either Party from obligations
which are expressly indicated to survive termination or expiration of this
Agreement. The rights of the Parties upon termination described in this
Agreement shall not be exclusive of any other rights or claims at law or in
equity that either Party may have against the other arising out of this
Agreement.
(b) Termination, relinquishment or expiration of this Agreement shall
not terminate each Party's obligation to pay all royalties, milestone payments
and other monetary obligations that may have accrued hereunder prior to such
termination. All of the Parties' rights and obligations under Sections 6.1, 6.2,
8.5, 10, 12, 13 (solely with respect to actions pending at such time), 14, 15.2,
15.5, 15.6, 15.7, 15.8, 15.9, 17.1 (if in effect at such time), 17.3, 17.5,
17.12, 17.13 and 17.14 shall survive termination, relinquishment or expiration
hereof.
16. FORCE MAJEURE
Neither Party shall be held liable or responsible to the other Party nor
be deemed to be in default under or in breach of any provision of this Agreement
for failure or delay in fulfilling or performing any obligation under this
Agreement when such failure or delay is due to force majeure, and without the
fault or negligence of the Party so failing or delaying. For purposes of this
Agreement, force majeure shall be defined as causes beyond the control of the
Party, including, without limitation, acts of God; acts, regulations, or laws of
any government; war; civil commotion; destruction of production facilities or
materials by fire, flood, earthquake, explosion or storm; labor disturbances;
epidemic; and failure of public utilities or common carriers. In such event
NEOTHERAPEUTICS or GPC, as the case may be, shall immediately notify the other
Party of such inability and of the period for which such inability is expected
to continue. The Party giving such notice shall thereupon be excused from such
of its obligations under this Agreement as it is thereby disabled from
performing for so long as it is so disabled and for thirty (30) days thereafter.
To the extent possible, each Party shall use reasonable efforts to minimize the
duration of any force majeure.
17. MISCELLANEOUS
17.1. RELATIONSHIP OF PARTIES. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, employment or joint venture
relationship between the Parties. Neither Party shall be entitled to, or shall,
incur any debts or make any commitments for the other, except to the extent, if
at all, specifically provided herein.
17.2. ASSIGNMENT. (a) Each Party shall be entitled to assign this
Agreement to any of its Affiliates upon sixty (60) days' prior written notice to
the other Party; provided, however, that in the event of any such assignment,
the assigning Party shall remain jointly and severally liable with respect to
all of its obligations hereunder, and in the event of any default relating to
any such obligations, the other Party shall be entitled to proceed against
either such Affiliate or directly against the assigning Party, as such other
Party may determine in its sole discretion, to enforce this Agreement.
(b) Except as provided in Section 17.5(a), neither Party shall be
entitled to assign its rights hereunder without the express written consent of
the other Party, except that each Party may assign this Agreement to any
assignee of all or substantially all of such Party's business (or that portion
thereof to which this Agreement relates) or in the event of such Party's merger,
consolidation or similar transaction.
(c) No assignment contemplated by this Section 17.3 shall be valid or
effective unless and until the assignee/transferee shall agree in writing to be
bound by the provisions of this Agreement.
17.3. DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS
2 AND 3.1, THE PARTIES EXPRESSLY DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR ARISING FROM
A COURSE OF DEALING OR USAGE OF TRADE PRACTICE.
17.4. FURTHER ACTIONS. Each Party shall execute, acknowledge and deliver
such further instruments, and take all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
17.5. NOTICE. Any notice or request required or permitted to be given
under or in connection with this Agreement shall be deemed to have been
sufficiently given if in writing and personally delivered or sent by certified
mail (return receipt requested), facsimile transmission (receipt verified), or
overnight express courier service (signature required), prepaid, to the Party
for which such notice is intended, at the address set forth for such Party
below:
(i) In the case of GPC, to:
GPC BIOTECH AG
Fraunhoferstrasse 20
D-82152 Martinsried/Munich
Germany
Attention: Chief Executive Officer
Facsimile No.: 011-49-89-8565-2610
With a copy to:
Ropes & Gray
One International Place
Boston, Massachusetts
USA
Attention: Marc A. Rubenstein, Esq.
Facsimile No.: 617-951-7050
(ii) In the case of NEOTHERAPEUTICS, to:
157 Technology Drive
Irvine, California 92618
USA
Attention:
Facsimile No.: 949-788-6706
or to such other address for such Party as it shall have specified by like
notice to the other Party, provided that notices of a change of address shall be
effective only upon actual receipt thereof. If delivered personally or by
facsimile transmission, the date of delivery shall be deemed to be the date on
which such notice or request was given. If sent by overnight express courier
service, the date of delivery shall be deemed to be the next business day after
such notice or request was deposited with such service. If sent by certified
mail, the date of delivery shall be deemed to be the fifth (5th) business day
after such notice or request was deposited with the postal service in the
country of mailing.
17.6. USE OF NAME. Except as otherwise provided herein, neither Party
shall have any right, express or implied, to use in any manner the name or other
designation of the other Party or any other trade name or trademark of the other
Party (including, without limitation, any Trademark) for any purpose in
connection with the performance of this Agreement.
17.7. PUBLIC ANNOUNCEMENTS. (a) Except as required by law (including,
without limitation, the applicable disclosure requirements of any relevant
regulatory authority or stock exchange) and as permitted by Section 12.2,
neither Party shall make any public announcement concerning this Agreement, any
Covered Product or any other subject matter hereof without the prior written
consent of the other Party, which shall not be unreasonably withheld or delayed.
It shall not be unreasonable for a Party to withhold consent with respect to any
public announcement containing any of such Party's
Confidential Information. In the event of any required or proposed public
announcement, (i) the Parties shall consult with each other in good faith as to
the timing thereof, and (ii) the Party making such announcement shall provide
the other Party with a copy of the proposed text prior to such announcement
sufficiently in advance of the scheduled release of such announcement to afford
such other Party a reasonable opportunity to review and comment upon the
proposed text. Notwithstanding the foregoing, the Parties agree to prepare a
mutually agreeable press release that may be used by either Party in connection
with this Agreement, and any further announcement containing substantially the
same information may be used without the need to seek the consent of the other
Party.
(b) Each Party acknowledges and agrees that the other Party needs to
communicate with its investors regularly and keep them apprised of the
development status of the products in which such Party has an interest. In order
to facilitate this communication, promptly after the Effective Date each Party
shall designate, from time to time, one employee who shall have primary
responsibility for reviewing and approving all proposed investor communications
of the other Party, to the extent that they pertain to this Agreement, any
Covered Product or any other subject matter hereof. Each Party shall instruct
such employee to review the content of such draft communications as
expeditiously as possible and otherwise to cooperate with and assist the other
Party in connection therewith, so long as the number of such communications and
the timing thereof are reasonable.
(c) Following a Party's consent to or approval of the public
announcement of any information pursuant to this Section 17.7, both Parties
shall be entitled to make subsequent public announcements of such information
without renewed compliance with this Section 17.7, unless the scope and/or
duration of such consent or approval is expressly limited.
17.8. WAIVER. A waiver by either Party of any of the terms and
conditions of this Agreement in any instance shall not be deemed or construed to
be a waiver of such term or condition for the future, or of any subsequent
breach hereof. All rights, remedies, undertakings, obligations and agreements
contained in this Agreement shall be cumulative, and none of them shall be in
limitation of any other remedy, right, undertaking, obligation or agreement of
either Party.
17.9. COMPLIANCE WITH LAW. Nothing in this Agreement shall be deemed to
permit a Party to export, re-export or otherwise transfer any Covered Product
sold under this Agreement without compliance with applicable laws.
17.10. SEVERABILITY. When possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
17.11. AMENDMENT. No amendment, modification or supplement of any
provisions of this Agreement shall be valid or effective unless made in writing
and signed by a duly authorized officer of each Party.
17.12. GOVERNING LAW; ENGLISH ORIGINAL; JURISDICTION. (a) This Agreement
shall be governed by and interpreted in accordance with the laws of the
Commonwealth of Massachusetts without regard to its choice of law principles.
The English original of this Agreement shall prevail over any translation
hereof.
(b) Without prejudice to the rights and obligations of the Parties under
Section 17.13, each Party hereby consents to the in personam jurisdiction of any
state or federal court sitting in the Commonwealth of Massachusetts with respect
to any matter arising in connection with this Agreement and further consents to
the service of any process, notice of motion or other application to any such
court or a judge thereof outside the Commonwealth of Massachusetts by registered
or certified mail or personal service, provided that reasonable time is allowed
for appearance. Each Party hereby waives, to the greatest extent it may do so,
any defense it may have on the grounds of inconvenient forum with respect to any
action or proceeding maintained in any state or federal court in Massachusetts.
17.13. ARBITRATION. (a) Any dispute arising out of or relating to any
provisions of this Agreement shall be finally settled by arbitration to be held
in Boston, Massachusetts, under the auspices and then current commercial
arbitration rules of the American Arbitration Association (the "AAA"). Such
arbitration shall be conducted by three (3) arbitrators. Within thirty (30) days
after the commencement of any arbitration, each Party shall appoint one
arbitrator, and these two arbitrators shall jointly appoint the third
arbitrator, who shall have significant experience in pharmaceutical drug
development and commercialization; provided, however, that if the two
arbitrators appointed by the Parties are unable to agree upon the third
arbitrator within thirty (30) days after their appointment, then the third
arbitrator shall be appointed by the AAA. The Parties shall instruct such
arbitrators to render a determination of any such dispute within four (4) months
after their appointment. All arbitration proceedings shall be conducted in
English. Judgment upon any award rendered may be entered in any court having
jurisdiction, or application may be made to such court for a judicial acceptance
of the award and an order of enforcement, as the case may be.
(b) Section 17.14(a) shall not prohibit a Party from seeking injunctive
relief from a court of competent jurisdiction in the event of a breach or
prospective breach of this Agreement by the other Party which would cause
irreparable harm to the first Party.
17.14. NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY OR ANY
OF ITS RESPECTIVE AFFILIATES OR SUBLICENSEES BE LIABLE TO THE OTHER PARTY OR ANY
OF ITS AFFILIATES OR SUBLICENSEES FOR SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT
LIABILITY OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, LOSS OF
PROFITS OR REVENUE, OR CLAIMS OF CUSTOMERS OF ANY OF THEM OR OTHER THIRD PARTIES
FOR SUCH OR OTHER DAMAGES.
17.15. ENTIRE AGREEMENT. This Agreement (together with the Exhibits
hereto) sets forth the entire agreement and understanding between the Parties as
to the subject matter hereof and merges all prior discussions and negotiations
between them, and neither of the Parties shall be bound by any conditions,
definitions, warranties, understandings or representations with respect to such
subject matter other than as expressly provided herein or as duly set forth on
or subsequent to the Effective Date in writing and signed by a proper and duly
authorized officer or representative of the Party to be bound thereby. Without
limiting the generality of the foregoing, the terms and conditions of this
Agreement shall supersede the terms and conditions of any confidentiality,
non-disclosure or similar such agreement that the Parties may have executed
prior to the Effective Date.
17.16. PARTIES IN INTEREST. All the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties hereto and their respective permitted successors and assigns.
17.17. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.
17.18. COUNTERPARTS. This Agreement may be executed simultaneously in
two counterparts, any one of which need not contain the signature of more than
one Party, but both such counterparts taken together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed by its duly authorized officer as of the day and year first above
written.
NEOTHERAPEUTICS, INC.
By: /s/ Rajesh Shrotriya
--------------------------------------
Name: Rajesh C. Shrotriya, M.D.
Title: Chairman, CEO & President
GPC BIOTECH AG
By: /s/ Bernd R. Seizinger
--------------------------------------
Name: Bernd R. Seizinger
Title: Chief Executive Officer
By: /s/ S. Meier-Ewert
--------------------------------------
Name: S. Meier-Ewert
Title: Chief Scientific Officer
EXHIBIT A
J-M License Agreement
The Johnson Matthey PLC License Agreement was filed as Exhibit 10.5 to Form
10-Q, as filed with the Securities and Exchange Commission on November 14,
2001, and incorporated herein by this reference.
The First Amendment to the License Agreement dated August 28, 2001 between
Johnson Matthey PLC and NeoTherapeutics, Inc. dated September 30, 2002, is
filed as Exhibit 10.8 to this Form 10-Q and incorporated herein by this
reference.
EXHIBIT B
Patent Rights
Filed as Schedule A of Exhibit 10.5 to Form 10-Q, as filed with the Securities
and Exchange Commission on November 14, 2001, and incorporated herein by this
reference.
EXHIBIT C
Initial Members of Joint Development Committee
GPC Designees: Marcel Rozencweig, Chairman
Michael Petrone
Ed McNiff
NEOTHERAPEUTICS
Designees: Gino Lenaz
Ashok Gore
Shanta Chawla
EXHIBIT D
Registration Rights Agreement
NEOTHERAPEUTICS, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of
_______ __, 2002, between NeoTherapeutics, Inc., a Delaware corporation (the
"Company"), and GPC Biotech AG, a company organized under the laws of the
Federal Republic of Germany (the "GPC").
RECITALS
The Company and GPC are parties to a Co-Development and License Agreement
(the "License Agreement") dated as of September __, 2002, pursuant to which the
Company has agreed to sell to GPC and GPC has agreed to purchase from the
Company shares of the Company's Common Stock, upon the attainment of certain
milestones under the License Agreement. As a condition to GPC's obligation to
purchase shares of Common Stock under the License Agreement, the Company and GPC
are required to enter into this Agreement in order to provide GPC with certain
rights to register for resale the shares of the Company's Common Stock purchased
under the License Agreement.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS; REGISTRATION RIGHTS.
1.1 DEFINITIONS. For purposes of this Agreement:
(a) "Common Stock" means the common stock, par value $0.001 per
share, of the Company.
(b) "Exempt Registration" means a registration statement relating to
the sale of securities by the Company pursuant to a stock option, stock purchase
or similar benefit plan or an SEC Rule 145 transaction or any other registration
statement that would not customarily provide for the secondary sale of equity
shares for cash.
(c) "Holder" means (i) GPC and (ii) any person owning Registrable
Securities to whom the rights under this Section 1 have been transferred in
accordance with Section 1.9 of this Agreement.
(d) "person" means any individual, corporation, partnership, limited
liability company, trust, business, association or government or political
subdivision thereof, governmental agency or other entity.
(e) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act and the declaration or
ordering of effectiveness of such registration statement or document.
(f) The term "Registrable Securities" means (i) the shares of Common
Stock issued under the License Agreement, and (ii) any other shares of Common
Stock of the Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
shares listed in clause (i) and this clause (ii); provided, however, that the
foregoing definition shall exclude in all cases any Registrable Securities sold
or transferred by a Holder in a transaction in which such Holder's rights under
this Agreement are not assigned. Notwithstanding the foregoing, securities shall
only be treated as Registrable Securities if and so long as they have not been
(A) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B) sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 4(1) thereof so that all transfer restrictions, and
restrictive legends with respect thereto, if any, are removed upon the
consummation of such sale.
(g) "SEC" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
(h) "Securities Act" means the Securities Act of 1933, as amended.
1.2 COMPANY REGISTRATION.
(a) Initiation. If (but without any obligation to do so) the Company
proposes to register (including for this purpose a registration effected by the
Company for stockholders other than the Holders) any of its stock in connection
with the public offering of such securities solely for cash (other than an
Exempt Registration), the Company shall, at such time, promptly give each Holder
notice of such proposed registration. Upon the written request of each Holder
given within 20 days after receipt by such Holder of the Company's notice, the
Company shall, subject to the provisions of Section 1.2(b), cause to be
registered all of the Registrable Securities that each such Holder has requested
to be registered.
(b) Underwritten Offering. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 1.2(a) to include any of the Holders' securities in
such underwriting unless they accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it (or by other
persons entitled to select the underwriters), and then only in such quantity as
the underwriters determine in their sole discretion will not jeopardize the
success of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata (to the nearest 100 shares) among the selling stockholders according to the
total amount of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by such
selling stockholders). For purposes of the preceding apportionment, for any
participating Holder that is a partnership, limited liability company or
corporation, the partners, retired partners, members,
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retired members and stockholders of such Holder, or the estates and family
members of any such partners, members, retired partners or members and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "selling stockholder," and any pro-rata reduction with respect to such
"selling stockholder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all Persons included in such "selling
stockholder," as defined in this sentence.
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.2 prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Securities in such registration.
1.3 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of such Registrable Securities.
(d) Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement with the managing
underwriter of such offering in usual and customary form and consistent with the
other provisions of this Agreement. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement.
(f) Promptly notify each Holder covered by the registration
statement at any time when the Company becomes aware of the happening of any
event as a result of which the registration statement or the prospectus included
in such registration statement or any supplement to the prospectus (as then in
effect) contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements there in (in the case of the
prospectus, in light of the circumstances under which they were made) not
misleading or, if for any other reason it shall be necessary during such time
period to amend or supplement the
3
registration statement or the prospectus in order to comply with the Securities
Act, whereupon, in either case, each Holder shall immediately cease to use such
registration statement or prospectus for any purpose and, as promptly as
practicable thereafter, the Company shall prepare and file with the SEC, and
furnish without charge to the appropriate Holders and managing underwriters, if
any, a supplement or amendment to such registration statement or prospectus
which will correct such statement or omission or effect such compliance and such
copies thereof as the Holders and any underwriters may reasonably request.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange or market on which similar
securities issued by the Company are then listed or traded, if applicable.
(h) Use its reasonable best efforts to furnish, at the request of
any Holder requesting registration of Registrable Securities pursuant to this
Section 1, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this Section
1, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities and
(ii) a letter dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities (to the extent the then applicable
standards of professional conduct permit said letter to be addressed to the
Holders).
1.4 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
1.5 EXPENSES OF REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registrations initiated
pursuant to Section 1.2, including without limitation all registration, filing
and qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company and the reasonable fees and disbursements of one counsel
for the Holders, shall be borne by the Company.
1.6 DELAY OF REGISTRATION. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.7 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under this Section 1:
4
(a) Indemnification by the Company. To the extent permitted by law,
the Company will indemnify and hold harmless each Holder, any underwriter (as
defined in the Securities Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), against
any losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and the
Company will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 1.7(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable to any Holder, underwriter or controlling person for
any such loss, claim, damage, liability, or action to the extent that it arises
out of or is based upon a Violation (x) which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person or
(y) which occurs in any preliminary prospectus if a final, amended or
supplemental prospectus which corrects such Violation is delivered by the
Company to such person at or prior to the written confirmation of the sale
giving rise to such loss, claim, damage, liability, or action.
(b) Indemnification by the Holders. To the extent permitted by law,
each selling Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter, any other Holder selling securities in such registration
statement and any controlling person of any such underwriter or other Holder,
against any losses, claims, damages, or liabilities (joint or several) to which
any of the foregoing persons may become subject, under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with such
registration statement; and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this Section 1.7(b), in connection with investigating or defending
any such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 1.7(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that in no event shall any
indemnification by a Holder under this Section 1.7(b) exceed the net
5
proceeds from the offering received by such Holder, except in the case of
willful fraud by such Holder.
(c) Procedures. Promptly after receipt by an indemnified party under
this Section 1.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 1.7, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.7. No indemnifying party,
in the defense of any such claim or litigation, shall, except with the consent
of each indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation. The indemnity agreements
contained in this Section 1.7 shall not apply to amounts paid in settlement of
any loss, claim, damage, liability or action if such settlement is effected
without the consent of the indemnifying party, such consent not to be
unreasonably withheld.
(d) Contribution. If the indemnification provided for in this
Section 1.7 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided, that in no event shall any contribution by a Holder
under this Section 1.7(d) exceed the net proceeds from the offering received by
such Holder, except in the case of willful fraud by such Holder. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.
6
(e) Underwriting Agreement. Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.
(f) Survival. The obligations of the Company and Holders under this
Section 1.7 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.8 REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Holders the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration, the Company agrees
to:
(a) make and keep public information available, in accordance with
SEC Rule 144, at all times after the effective date of the first registration
statement filed by the Company for the offering of its securities to the general
public so long as the Company remains subject to the periodic reporting
requirements under Sections 13 or 15(d) of the Exchange Act;
(b) file with the SEC in a timely manner all reports and other
documents as may be required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144,
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register securities granted Holders under Section 1.2 may not be assigned to a
transferee or assignee of Registrable Shares without the prior written consent
of the Company, except that such rights may be freely transferred to any party
controlling, controlled by or under common control with a Holder without such
consent; provided, that the Company is provided with prompt notice of the name
and address of such transferee and such transferee agrees in writing to be bound
by the provisions of this Agreement.
1.10 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be entitled to
exercise any registration right provided for in this Section 1 after such time
as Rule 144(k) or another similar exemption under the Securities Act is
available for the sale of all of such Holder's shares without limitation as to
volume or manner of sale.
2. MISCELLANEOUS.
2.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof, and any and
all other written or oral
7
agreements relating to the subject matter hereof existing among any of the
parties hereto are expressly canceled.
2.2 RECAPITALIZATIONS, ETC. The provisions of this Agreement (including
any calculation of share ownership) shall apply, to the full extent set forth
herein with respect to the Registrable Securities and to the Common Stock, to
any and all shares of capital stock of the Company or any capital stock,
partnership or member units or any other security evidencing ownership interests
in any successor or assign of the Company (whether by merger, consolidation,
sale of assets or otherwise) that may be issued in respect of, in exchange for,
or in substitution of the Registrable Securities by reason of any stock
dividend, split, combination, recapitalization, liquidation, reclassification,
merger, consolidation or otherwise.
2.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
2.4 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended or
waived only with the written consent of the Company and the holders of at least
a majority of the Registrable Securities then outstanding. GPC and its
successors and assigns acknowledge that by operation of this Section 2.4, the
holders of at least a majority of the then outstanding Registrable Securities,
when acting together with the Company, will have the right and power to diminish
or eliminate any rights or increase any or all obligations under this Agreement.
2.5 NOTICES. Any notice required or permitted by this Agreement shall be
in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by electronic mail or fax, or
forty-eight (48) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, addressed (a) if to the Company or
NeoTherapeutics, to 157 Technology Drive, Irvine, California 92618, Attention:
Chief Executive Officer or via facsimile to (949) 788-6706, with a copy to
Latham & Watkins, 650 Town Center Drive, Suite 2000, Costa Mesa, California
92626-1925, Attention: Alan W. Pettis, or via facsimile to (714) 755-8290, or
(b) if to GPC, to Fraunhoferstrasse 20, D-82152 Martinsried/Munich, Germany,
Attention: Chief Executive Officer or via facsimile to 49-89-8565-2610, with a
copy to Ropes & Gray, One International Place, Boston, Massachusetts 02110,
Attention: Marc A. Rubenstein, or via facsimile to (617) 951-7050.
2.6 SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. Until the parties have agreed upon an enforceable
replacement for such provision, (a) such provision shall be excluded from this
Agreement, (b) the balance of the Agreement shall be interpreted as if such
provision were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms.
2.7 DELAYS OR OMISSIONS; REMEDIES CUMULATIVE. No delay or omission to
exercise any right, power or remedy accruing to any party under this Agreement,
upon any breach or
8
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
2.8 ATTORNEY'S FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of any this
Agreement, the prevailing party shall be entitled to reasonable attorney's fees,
costs and necessary disbursements in addition to any other relief to which such
party may be entitled.
2.9 GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law thereof. The
Company and GPC hereby irrevocably submit to the exclusive jurisdiction of the
state and federal courts sitting in Orange County, California, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each of the Company and GPC hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by receiving a copy thereof sent
to the Company at the address in effect for notices to it under this instrument
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law.
2.10 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
2.11 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
2.12 AGGREGATION OF STOCK. All shares of Company stock held or acquired by
affiliated Persons (including former and current partners, former and current
members and former and current stockholders) shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
2.13 CONFIDENTIALITY. Each Holder agrees that, except with the prior
written permission of the applicable party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the Company or any other party to which such
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Holder has been or shall become privy by reason of this Agreement. The
provisions of this Section 2.13 shall be in addition to, and not in substitution
for, the provisions of any separate nondisclosure agreement executed by the
parties hereto with respect to the transactions contemplated hereby.
[Signature Page Follows]
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The parties have executed this Registration Rights Agreement as of the
date first above written.
NEOTHERAPEUTICS, INC. GPC BIOTECH AG
By: By:
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Name: Name:
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Title: Title:
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