Exhibit 10.6
9-30-85 (K-A)
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PRODUCT LICENSE AGREEMENT
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THIS PRODUCT LICENSE AGREEMENT entered into this 30th day of September,
1985, by and between KIRIN-AMGEN, INC., a California corporation having offices
at 1900 Oak Terrace Lane, Thousand Oaks, California 91320-1789 (said corporation
hereinafter referred to as "K-A") and ORTHO PHARMACEUTICAL CORPORATION, A New
Jersey corporation having offices at U.S. Route 202, Raritan, New Jersey 08869,
(said corporation hereinafter referred to as "ORTHO").
WITNESSETH:
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WHEREAS, K-A represents that it has developed and is continuing to develop
technology relating to erythropoietin and processes for its manufacture;
WHEREAS, K-A further represents that it is the owner or licensee of patent
applications by assignment and unpatented know-how covering said erythropoietin;
WHEREAS, ORTHO and AFFILIATES are engaged in the research, development and
sale of health care products throughout the world and wish to obtain certain
rights to such technology and to such patents and patent applications;
WHEREAS, ORTHO and K-A have entered into a TECHNOLOGY LICENSE AGREEMENT on
even date herewith for the research, development and regulatory approval of
various products;
WHEREAS, K-A is a joint venture between Amgen of Thousand Oaks, California
and Kirin Brewery Co., Ltd. of Tokyo, Japan and each, respectively, has
consented to the execution of this AGREEMENT and a Product License Agreement and
each has by separate written undertaking to ORTHO effective September 30, 1985,
and incorporated herein by reference, agreed: (a) that each will make available
to K-A all information and documents and provide assistance in order that K-A
perform all of its obligations hereunder including but not limited to providing
to ORTHO all information and documents provided for under this AGREEMENT; (b)
that each has consented to ORTHO having the right to manufacture EPO in the
United States for use and sale outside the United States except in China and
Japan; and (c) that in the event K-A is dissolved, each shall, to the extent
legally possible, continue to fulfill all obligations and duties under this
AGREEMENT.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein recited, and other good and valuable considerations, the receipt of which
is acknowledged, it is agreed as follows:
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ARTICLE 1
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DEFINITIONS
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For the purposes of this Agreement, the terms set forth in this Article I
shall have the following meanings:
1.01 "AFFILIATE" shall mean and include (i) any company which owns or
controls directly or indirectly at least forty percent (40%) of the voting stock
of ORTHO and (ii) any other company at least forty percent (40%) of whose voting
stock is owned or controlled directly or indirectly by such owning or
controlling company, and (iii) any other company with which ORTHO or such an
owning, owned, controlling or controlled company has a co-marketing, joint
venture or distribution agreement for pharmaceuticals outside the United States.
The term "ORTHO" shall also mean and include any AFFILIATE wherein the inclusion
of same shall be warranted under the provisions of the AGREEMENT.
1.02 "AGREEMENT" shall mean this Product License Agreement.
1.03 "CLOSING" shall occur when,:
(a) K-A shall execute and deliver to ORTHO this AGREEMENT and the
TECHNOLOGY LICENSE AGREEMENT.
(b) ORTHO shall execute and deliver to K-A this AGREEMENT and the
TECHNOLOGY LICENSE AGREEMENT; and
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(c) The following approvals shall have been obtained: (i) the Board
of Directors of K-A shall have authorized K-A's participation in, and its
execution and delivery of, this AGREEMENT including the Exhibits attached
hereto, and the TECHNOLOGY LICENSE AGREEMENT; and (ii) the Board of Directors of
ORTHO shall have authorized ORTHO's participation in, and its execution and
delivery of, this AGREEMENT, including the Exhibits attached hereto and the
TECHNOLOGY LICENSE AGREEMENT.
1.04 "EFFECTIVE DATE" shall be contingent on certain events and shall mean
the date on which this AGREEMENT takes effect which shall be without
interruption and simultaneous with the termination of and in accordance with the
provisions of Article 9 of the TECHNOLOGY LICENSE AGREEMENT; provided that, if
this AGREEMENT takes effect as a result of the receipt of an approval letter to
market a LICENSED PRODUCT in a MAJOR COUNTRY or if there is a pending but as yet
unapproved NDA or corresponding registration in any MAJOR COUNTRY, this
AGREEMENT shall then be in effect in the entire LICENSED TERRITORY with respect
to said PRODUCT. If there is not an approved NDA or corresponding registration
in a MAJOR COUNTRY but such approval has been granted to permit marketing of a
LICENSED PRODUCT and sales of said LICENSED PRODUCT commence in another country
in the TERRITORY, this AGREEMENT shall not come into effect but the payment
provisions of Article 4 of
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this AGREEMENT shall be followed with respect to the sale of LICENSED PRODUCTS
in said country.
1.05 "EPO" shall mean erythropoietin as described in Exhibit A.
1.06 "FDA" shall mean the United States Food & Drug Administration and
foreign counterparts thereof.
1.07 "IND" shall mean a Notice of Claimed Investigational Exemption for a
New Drug and all supplements under the United States Food, Drug & Cosmetic Act
(FDA Act) and foreign counterparts thereof.
1.08 "LICENSED FIELD" shall mean and include EPO for all indications for
human use except diagnostics.
1.09 "LICENSED KNOW-HOW" shall mean and include any and all data,
information, technology or special ability on the part of K-A including, but not
limited to, processes, techniques, methods, products, materials and compositions
relating to the research, development, manufacture, testing or use of EPO, now
owned or controlled by K-A or that shall be owned or controlled by K-A during
the term of this AGREEMENT, which is reasonably related to LICENSED PATENTS and
LICENSED PRODUCTS for use in the LICENSED FIELD; and which is useful in seeking
approval from appropriate
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governmental health authorities to market LICENSED PRODUCTS and which includes
any K-A INDs, NDAs and all supplements thereto covering PRODUCTS in the LICENSED
FIELD.
1.10 "LICENSED PATENTS" shall mean:
(a) any patent listed in Exhibit B;
(b) any patent application listed in Exhibit B, and any division,
continuation, or continuation-in-part of any such application, and any patent
which shall issue based on such application, division, continuation or
continuation-in-part;
(c) any patent which is a reissue or extension of, or a patent of
addition to, any patent defined in (a) or any application maturing into a patent
defined in (b) above;
(d) any patent application or patent corresponding to any patent
application or patent identified in (a), (b) or (c) above which is hereafter
filed or issued in any country; and
(e) any patent application related to or based on any of K-A's
technical information developed in the LICENSED FIELD during the performance of
this AGREEMENT, and any division, continuation or continuation-in-part of any
such application; and any patent which shall issue based on such application,
division, continuation or continuation-in-part; and any patent which is a
reissue or extension of, or a patent of addition to, any such patent.
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1.11 "LICENSED PRODUCTS" shall mean and include any PRODUCTS for use in
the LICENSED FIELD (i) which are within the scope of a VALID LICENSED CLAIM of a
LICENSED PATENT; or (ii) whose use is within the scope of a VALID LICENSED CLAIM
of a LICENSED PATENT; or (iii) which are manufactured or packaged within the
scope of a VALID LICENSED CLAIM of a LICENSED PATENT; or (iv) which utilize any
LICENSED KNOW-HOW.
1.12 "LICENSED TERRITORY" shall mean and include the entire world except
(a) the United States, its territories and possessions, including the
Commonwealth of Puerto Rico, (b) China and (c) Japan.
1.13 "MAJOR COUNTRY' shall mean any of the following: United States,
United Kingdom, West Germany, France and Japan.
1.14 "NDA" shall mean a New Drug Application and/or a Product License
Application and all supplements filed pursuant to the requirements of the FDA,
including all documents, data and other information concerning LICENSED PRODUCTS
which are necessary for or included in, FDA approval to market LICENSED PRODUCTS
and foreign counterparts thereof of NDAs.
1.15 "NET SALES" shall mean the amount billed by ORTHO, or an AFFILIATE
from the sale for commercial use of LICENSED PRODUCTS
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to independent third parties less the following amounts included in the billed
amount: (i) discounts, including cash discounts, or rebates actually allowed or
granted from the billed amount, (ii) credits or allowances actually granted upon
claims or returns regardless of the party requesting the return, (iii) freight
charges paid for delivery, and (iv) taxes or other government charges levied on
or measured by the billed amount whether absorbed by the billing or the billed
party and not K-A. In the event that LICENSED PRODUCTS are sold in the form of a
combination product containing one or more active ingredients, other than EPO,
NET SALES for such combination products will be calculated by multiplying actual
NET SALES of such LICENSED PRODUCTS by the fraction A/(A+B) where A is the
invoice price of the LICENSED PRODUCT if sold separately and B is the total
invoice price of any other active component or components in the combination if
sold separately by ORTHO or a single AFFILIATE. If on a country-by-country basis
the LICENSED PRODUCT and the other active component or components in the
combination are not sold separately in said country by ORTHO or a single
AFFILIATE, NET SALES for purposes of determining royalties on the combination
shall be calculated by multiplying NET SALES of the combination by the fraction
C/(C+D) where C is ORTHO's or AFFILIATE's total actual cost of LICENSED PRODUCT
at the point of formulation into the combination product and D is ORTHO's or
AFFILIATE's total actual cost of the other active ingredient(s) included in the
combination product at such point.
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1.16 "OUTSIDE RESEARCH PAYMENTS" shall mean amounts paid by ORTHO under
the TECHNOLOGY LICENSE AGREEMENT or this AGREEMENT for clinical testing to an
individual or individuals or to an entity other than K-A, ORTHO or an AFFILIATE
for purposes of independent evaluation of any PRODUCT, which data shall be used
by ORTHO and/or K-A in filing NDAs or other registrations regarding the
PRODUCTS.
1.17 "PRODUCT ORGANISMS" shall mean any and all organisms developed or
acquired by K-A, the uses of which are licensed to ORTHO pursuant to this
AGREEMENT and which have been genetically engineered to produce biologically
active LICENSED PRODUCTS, including any and all improvements thereon.
1.18 "PRODUCTS" shall mean EPO for human therapeutic uses including but not
limited to prophylactic uses except diagnostics.
1.19 "TECHNOLOGY LICENSE AGREEMENT" shall mean an agreement between K-A
and ORTHO executed on even date herewith.
1.20 "VALID LICENSED CLAIM" shall mean and include a claim in an issued
LICENSED PATENT which has not lapsed or become abandoned and which claim has not
been declared invalid by an unreversed or unappealable decision or judgment of a
court of competent jurisdiction.
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ARTICLE 2
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LICENSE
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2.01 GRANT
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K-A hereby grants to ORTHO but not AFFILIATES, except as hereinafter
provided, an exclusive license to make in one location, have made and use
LICENSED KNOW-HOW, LICENSED PATENTS and LICENSED PRODUCTS in the LICENSED
TERRITORY in the LICENSED FIELD and to sell LICENSED PRODUCTS in the LICENSED
TERRITORY in the LICENSED FIELD. ORTHO and AFFILIATES shall also be permitted
to use and sell LICENSED PRODUCTS made in one location in the United States, in
the LICENSED TERRITORY.
2.02 SUBLICENSE
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ORTHO may, with prior written notice to K-A, sublicense LICENSED
PATENTS, LICENSED KNOW-HOW and LICENSED PRODUCTS under this AGREEMENT (i) to any
AFFILIATE, or any third party, to use and sell LICENSED PRODUCTS as provided in
this AGREEMENT; and (ii) if ORTHO is not manufacturing LICENSED PRODUCTS in the
LICENSED TERRITORY, then to any one controlled (50%) AFFILIATE to make in one
location in the LICENSED TERRITORY, use and sell LICENSED PRODUCTS as provided
in this AGREEMENT.
2.03 ASSURANCE BY ORTHO
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In the event of sublicensing as provided in paragraph 2.02, ORTHO
shall assure K-A that this AGREEMENT shall apply to
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such AFFILIATE or third party sublicensee, and such AFFILIATE or third party
sublicensee shall deliver to K-A a written promise to comply with the terms of
this AGREEMENT to the extent that such terms are applicable. ORTHO shall
guarantee the due and punctual performance of any and all responsibilities under
this AGREEMENT as applied to such AFFILIATE or third party sublicensee.
2.04 DIRECT AGREEMENT
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As a substitute for a sublicense, K-A shall, if ORTHO so requests,
enter into a separate agreement with any AFFILIATE granting a license in
accordance with the provisions of this AGREEMENT. Such agreement shall
incorporate all of the terms of this AGREEMENT to the extent that they are
applicable. ORTHO shall guarantee the due and punctual performance of any and
all responsibilities by the AFFILIATE under such separate agreement.
2.05 WARRANTY
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K-A warrants and represents that it has the full right and power to
grant the license set forth in paragraph 2.01 of this Article 2 and that there
are no outstanding agreements, assignments or encumbrances in existence
inconsistent with the provisions of this AGREEMENT.
2.06 ORTHO EFFORTS
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ORTHO agrees to use reasonable efforts to market and sell LICENSED
PRODUCTS in the LICENSED TERRITORY. If K-A in good
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faith, reasonably believes that the market for the LICENSED PRODUCT in one or
more countries in the LICENSED TERRITORY is not being adequately penetrated by
ORTHO (or its AFFILIATES or sublicensees), then K-A shall advise ORTHO in
writing as to this belief, stating in reasonable detail the basis of such
belief. Promptly thereafter, ORTHO and K-A shall meet in an atmosphere of
reasonableness and good faith in order to mutually consider the development of
revised marketing strategy for such country(ies). In the event that K-A makes a
substantial contribution to a revised marketing plan or the identification and
utilization of a new marketing entity, then the parties will consider in good
faith an appropriate arrangement with respect to such country(ies) which would
fairly recognize K-A's contribution.
2.07 IMPROVEMENTS
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2.07.1 If K-A, on the one hand, or ORTHO and/or its AFFILIATES and
sublicensee(s), on the other hand, improve the PRODUCT ORGANISMS, and/or the
LICENSED KNOW-HOW, or make LICENSED PRODUCTS or process improvements, all such
improvements shall become part of the LICENSED KNOW-HOW and shall be promptly
transferred and/or communicated to the other party in order to maintain parity
among K-A, ORTHO and its AFFILIATES and sublicensees and by the provisions
hereof shall be deemed to be a part of the LICENSED PATENTS or LICENSED KNOW-HOW
as the case may be and licensed to K-A or ORTHO, as the case may be, on a
royalty-free basis.
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2.07.2 Notwithstanding any provision of this AGREEMENT, any technology
and/or improvements developed by a party to this AGREEMENT and disclosed or
licensed under this Article 2, shall be and remain the property of the
developing party. This Paragraph 2.07.2 shall survive any termination of this
AGREEMENT.
ARTICLE 3
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REGULATORY MATTERS
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3.01 PENDING NDA
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In the event, on the effective date of this AGREEMENT, an NDA
approval letter from the FDA has not been received but an NDA or corresponding
registration is pending in a MAJOR COUNTRY for any one or more of the PRODUCTS,
this AGREEMENT takes effect and the process seeking said approval letter shall
be diligently continued and pursued by the appropriate party as set forth in the
TECHNOLOGY LICENSE AGREEMENT.
3.02 RECORDS AND PROGRESS.
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K-A, KIRIN and ORTHO shall keep and maintain complete and accurate
records of all work including all FDA filings that either has done in connection
with LICENSED PRODUCTS. The parties agree to provide each other with sufficient
technical information and assistance as is necessary for each of them to assess
the progress of the other party in its clinical testing of PRODUCTS and in its
filing and pursuit of INDs and NDAs in connection with
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LICENSED PRODUCTS including but not limited to K-A and KIRIN informing ORTHO of
all communications and discussions with the FDA.
3.03 ACCESS TO FDA FILES
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K-A and ORTHO agree that each shall have access to and the exclusive and
irrevocable right to refer to and cross-reference each other's INDs, NDAs and
supplements thereto consistent with the purposes of this AGREEMENT and the
TECHNOLOGY LICENSE AGREEMENT and with respect to K-A not for any diagnostic
purpose and each agrees to provide all appropriate documentation necessary to
achieve the purposes of this AGREEMENT. ORTHO's access and utilization under
this Paragraph shall include use within and outside the LICENSED TERRITORY. The
parties agree to notify the FDA of the right to cross-reference the above-
described documents and to execute and file all the necessary papers and
documents required to allow each to exercise its rights under this AGREEMENT.
3.04 CONTINUING OBLIGATIONS
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During the term of this AGREEMENT, K-A, KIRIN and ORTHO each shall
have a continuing obligation to advise each other of any adverse drug reactions
or any governmental regulatory problems, notices, actions or communications and
to keep all INDs, NDAs and supplements thereto current and in full force and
effect relating to the manufacture, use, and/or sale of LICENSED PRODUCTS.
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ARTICLE 4
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ROYALTIES
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4.01 PAYMENTS
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ORTHO shall pay to K-A royalties equal to ten (10) percent of NET
SALES of LICENSED PRODUCTS in the LICENSED TERRITORY.
4.02 TIMING OF PAYMENTS
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For purposes of Paragraph 4.01, all computations of royalties due to
K-A shall be made commencing on CLOSING and ending on December 31 of the year in
which this AGREEMENT takes effect. Thereafter, all royalty payments due to K-A
based on NET SALES shall be on a calendar quarterly basis and shall be payable
by ORTHO within sixty (60) days of the end of each calendar quarter.
4.03 RECORDS
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ORTHO shall keep complete and accurate records of the latest three
(3) years of NET SALES of LICENSED PRODUCTS with respect to which a royalty is
payable according to this AGREEMENT. Within sixty (60) days following each
quarterly period of a calendar year during which royalties are due under this
AGREEMENT, ORTHO shall render to K-A a written report setting forth in
reasonable detail the calculation of the amount of royalties due and payable on
a country by country basis based on sales of such
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LICENSED PRODUCTS during such calendar quarter, and ORTHO shall, upon rendering
such report, remit to K-A the amount of royalties shown thereby to be due.
4.04 ACCOUNTING
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K-A shall have the right at its own expense to nominate an
independent certified public accounting firm generally recognized as one of the
so-called "Big 8" accounting firms or another independent certified public
accountant acceptable to and approved by ORTHO, said approval not to be
unreasonably withheld, who shall have access to the records of ORTHO and those
of its AFFILIATES and Sublicensees during reasonable business hours for the
purpose of verifying the underlying information and calculations relating to the
payments as provided for in this AGREEMENT, but this right may not be exercised
more than once in any one (1) calendar year, and said accountant shall disclose
to K-A only information relating to the accuracy of the royalty report and the
royalty payments made according to this AGREEMENT. ORTHO agrees to cooperate
with an independent certified public accountant hereunder.
4.05 SALES TO AFFILIATES AND/OR SUBLICENSEES
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No royalties shall be payable on net sales of any LICENSED PRODUCT
between ORTHO and any AFFILIATE or sublicensee.
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4.06 PAYMENTS ON SALES
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Any payments due hereunder on sales outside the United States by
ORTHO shall be payable to K-A in United States Dollars at the prevailing rate of
exchange of the currency of the country in which the sales are made (as quoted
by the CITIBANK N.A. of New York for the last business day of the calendar
quarter for which the royalties are payable).
4.07 AFFILIATE PAYMENTS
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In the event that ORTHO grants a sublicense under this AGREEMENT to
any AFFILIATE, or K-A enters into a separate Agreement with any AFFILIATE
pursuant to Article 2, such AFFILIATE shall make any payments to K-A in
accordance with the provisions of this AGREEMENT in United States Dollars at the
prevailing rate of exchange of the currency of the country of such AFFILIATE on
the date on which the royalty payment is due or in such other currency as both
parties mutually agree upon.
4.08 TAXES
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Any sum required under United States tax laws or the tax laws of any
other country, to be withheld by ORTHO from payments for the account of K-A
shall be promptly paid by ORTHO for and on behalf of K-A to the appropriate tax
authorities, and ORTHO shall furnish K-A with official tax receipts or other
appropriate evidence issued by the appropriate tax authorities sufficient to
enable K-A to support a claim for income tax credit
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in respect of any sum so withheld. This same provision shall also apply to an
AFFILIATE sublicensed under Article 2 hereof or entering into a separate
agreement pursuant to said Article with relation to the tax laws of the
respective country or countries in which such AFFILIATE is doing business. If
any tax, however denominated is levied against K-A solely because of the
presence of an ORTHO facility or because ORTHO is doing business in a country,
then ORTHO shall pay such tax.
4.09 EXCHANGE RATE NOT ASCERTAINABLE
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During any period in which no exchange rate between the foreign
currency in question and the United States Dollar can be ascertained in
accordance with this Article, K-A shall have the option of having payment of
such royalties suspended with the proviso that payment of amounts due shall be
made within thirty (30) days after such a rate of exchange is next quoted by
CITIBANK N.A. of New York; provided always that K-A may at any earlier date
elect to receive payment in the foreign currency in question or in any other
currency for which an exchange rate can be ascertained. If the exchange rate
can be ascertained, but the payment by ORTHO's AFFILIATE to K-A in United States
Dollars or other currency is not permissible, ORTHO's AFFILIATE may satisfy its
obligations to K-A by the deposit in the currency of the country where the sales
of LICENSED PRODUCTS were made on which the payment was based to the credit and
account of K-A in any
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commercial bank or trust company of its choice located in that country; prompt
notice of which shall be given to K-A.
4.10 LATE PAYMENTS
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Royalty payments provided for in this AGREEMENT shall, when overdue
or adjusted pursuant to Paragraph 4.04 above, be subject to a late payment
charge calculated at the prime rate or successive prime rates publicly announced
by CITIBANK N.A. of New York, New York during the entire period of delinquency;
provided, however, that if the amount of such late payment charge exceeds the
maximum permitted by law for such charge, such charge shall be reduced to such
maximum amount.
ARTICLE 5
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SUPPLY AND MANUFACTURE
----------------------
5.01 ORTHO MANUFACTURE
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ORTHO shall have the right to manufacture in the United States its
requirements of PRODUCTS for the sale of LICENSED PRODUCTS in the LICENSED
TERRITORY and also shall have the right to sublicense said manufacture in
accordance with the provisions of Paragraph 2.02. ORTHO's rights under this
Paragraph shall not in any way be limited by any other provision of this
AGREEMENT including but not limited to Paragraph 5.02.
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5.02 K-A MANUFACTURE
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Promptly after execution of this AGREEMENT, ORTHO and K-A shall enter
into discussions with respect to the manufacture and supply of PRODUCTS by K-A
to ORTHO. Such discussions shall be conducted in an environment of
reasonableness and good faith by the parties. If agreement is reached, the
parties shall enter in an appropriate Manufacture and Supply Agreement. Such
agreement shall include provisions relating to price, supply of PRODUCTS and
PRODUCT ORGANISMS, disclosure of manufacturing technology, preparation and
delivery of specifications, record keeping, renegotiation terms, aid and
assistance to ORTHO to set up its own manufacturing facility, either within the
United States or outside the United States, if required, duration and the like.
5.03 K-A's ASSISTANCE
----------------
If ORTHO desires to establish a manufacturing facility for the
manufacture of PRODUCTS in accordance with Paragraph 5.01, K-A shall diligently
assist ORTHO in the establishment and start-up of said manufacturing facility,
including providing ORTHO with manufacturing information reasonably sufficient
for ORTHO to manufacture PRODUCTS. ORTHO shall reimburse K-A at its then-
effective monthly billing rate for its efforts in assisting ORTHO in
establishing said facility.
5.04 DELIVERY OF PRODUCT ORGANISMS
-----------------------------
K-A hereby warrants and represents that it shall faithfully and
diligently deliver to any manufacturing facility
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provided for in this Article 5 such quantities of PRODUCT ORGANISMS as are
reasonably required by ORTHO, or its designated AFFILIATE, to manufacture
LICENSED PRODUCTS. Such deliveries shall be made within thirty (30) days after
written request by ORTHO to K-A at no expense to ORTHO, or its designated
AFFILIATE, and shall be made by K-A from time to time during the term of this
AGREEMENT as the need arises to replenish PRODUCT ORGANISMS.
ARTICLE 6
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CONFIDENTIALITY
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6.01 LIMITATIONS OF USAGE
--------------------
All confidential information transmitted by either party to the other
including all confidential information developed pursuant to this AGREEMENT,
shall be identified with reference to this AGREEMENT and the receiving party
shall, while this AGREEMENT is in effect and for three (3) years after
termination thereof, make no use of this information other than in furtherance
of this AGREEMENT and shall use the same efforts to keep secret and prevent the
disclosure of such information to parties other than its agents, officers,
employees and representatives authorized to receive such information as it would
its own confidential information except for such confidential information that,
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(a) was known to the receiving party at the time of its disclosure
and not previously subject to any obligation of confidentiality at the time of
its disclosure;
(b) was generally available to the public or was otherwise part of
the public domain at the time of its disclosure;
(c) became generally available to the public or became otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this AGREEMENT; or
(d) became known to the receiving party after its disclosure (i) from
a source other than the disclosing party (including from independent development
by the receiving party), (ii) other than from a third party who had an
obligation to the disclosing party not to disclose such information to others,
and (iii) other than under an obligation of confidentiality.
Each receiving party may disclose any of the LICENSED KNOW-HOW and
confidential information to the extent such disclosure is necessary to comply
with applicable laws or regulations, or to make and use LICENSED PRODUCTS in
accordance with the terms of this AGREEMENT.
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ARTICLE 7
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PATENTS
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7.01 PROSECUTION AND MAINTENANCE
---------------------------
K-A agrees to faithfully continue, at its expense, the prosecution of
all patent applications listed in Exhibit B within the LICENSED FIELD and, when
necessary, to file and prosecute additional applications covering patentable
technology relating to EPO in the United States and other countries throughout
the world. K-A shall have the duty and responsibility to pay all taxes and
annuities on all applications and patents listed in Exhibit B within the
LICENSED FIELD. K-A shall provide ORTHO with copies of all applications listed
in Exhibit B within the LICENSED FIELD, all future-filed applications and all
correspondence with Patent Offices applicable thereto. If K-A chooses not to
prosecute and maintain certain applications/patents under this AGREEMENT, K-A
shall so notify ORTHO and ORTHO shall, in its sole discretion, decide whether to
assume the responsibility and expenses therefore for each such application or
patent. In that event, the applications/patents for which ORTHO shall assume
responsibility shall be assigned to ORTHO. If ORTHO so assumes responsibility,
it shall be entitled to recover all its related reasonable expenses (including
attorneys' fees) from the sale of LICENSED PRODUCTS in the country prior to any
payments under Article 4 of this AGREEMENT.
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7.02 REVIEW
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K-A shall give ORTHO the opportunity to review, through their patent
counsel, the status of all pending patent applications listed in Exhibit B and
shall keep ORTHO informed of the status of their prosecution, including such
Patent Office proceedings as interferences, reexamination, oppositions and
requests for patent term extension under the Act. Notwithstanding the above, K-
A shall have sole responsibility for all decisions in connection with the filing
and prosecution of all patent applications and the maintenance of all patents.
K-A and ORTHO shall each take all appropriate actions to maximize the benefits
for both K-A and ORTHO with respect to any patent term restoration and/or
regulatory exclusivity that may be available in connection with any LICENSED
PATENT or LICENSED PRODUCT.
ARTICLE 8
---------
ENFORCEMENT
-----------
8.01 INFRINGEMENT BY ORTHO
---------------------
(i) If, as a result of the manufacture, use and sale of LICENSED
PRODUCTS, ORTHO is sued for patent infringement or threatened with such a
lawsuit or other action by a third party, then ORTHO shall actively consult with
K-A in its attempts to resolve same. If the settlement of a lawsuit or
threatened lawsuit or other action requires any payments to a third party, then
ORTHO and K-A shall share said payments on an equal basis.
-24-
(ii) If, as a result of the manufacture, use and sale of any
LICENSED PRODUCT, ORTHO is sued for patent infringement or threatened with such
a lawsuit or other action in a country and as a result of same ORTHO is
prevented from the commencement of marketing said LICENSED PRODUCT in said
country, then provided that LICENSED PRODUCTS are being marketed or in the
future are marketed in another country or countries, ORTHO shall be entitled to
recover the equivalent of 50% of the OUTSIDE RESEARCH PAYMENTS directly related
to the LICENSED PRODUCT incurred by ORTHO in accordance with ARTICLE 4 of the
TECHNOLOGY LICENSE AGREEMENT for registration in the problem country.
(iii) If, as a result of the manufacture, use and sale of any
LICENSED PRODUCT, ORTHO is sued for patent infringement or threatened with such
a lawsuit or other action in any country, and as a result of same, ORTHO is
prevented from further marketing said PRODUCT in said country then if
(A) said PRODUCT has been on sale less than three (3) years in said
country and provided that LICENSED PRODUCTS are being marketed or in
the future are marketed in another country or countries, ORTHO shall
be entitled to recover the equivalent of 50% of the OUTSIDE RESEARCH
PAYMENTS directly related to the LICENSED PRODUCT incurred by ORTHO
in accordance with ARTICLE 4 of the TECHNOLOGY LICENSE AGREEMENT for
registration in the problem country.
-25-
(B) said PRODUCT has been on sale more than three (3) years in said
country, there shall be no recovery by ORTHO under this Paragraph by
ORTHO from K-A.
(iv) In connection with any lawsuit or threatened lawsuit or other
action as set forth in (i), (ii) or (iii) above, ORTHO and K-A shall
share on an equal basis all reasonable expenses (including attorneys'
fees) incurred therewith.
8.02 INFRINGEMENT BY THIRD PARTIES
-----------------------------
Either party shall promptly notify the other party of any
infringement of any LICENSED PATENTS, misappropriation of a trade secret or
declaration of an interference proceeding relating to LICENSED PATENTS or
LICENSED KNOW-HOW, and shall provide the other party with all available evidence
relating thereto. K-A and ORTHO shall then consult with each other as to the
best manner in which to proceed. K-A shall have the right, but not the
obligation, to bring, defend and maintain any appropriate suit or action. If K-A
requests ORTHO to join K-A in such suit or action and ORTHO agrees to do so,
ORTHO shall execute all papers and perform such other acts as may be reasonably
required and may, at its option, be represented by counsel of its choice. K-A
shall pay ORTHO its reasonable expenses (including its attorney's fees) in
connection with any such suit or action. Should K-A lack standing to bring any
such action, then K-A may cause ORTHO to do so upon first undertaking to
indemnify and hold ORTHO harmless (to
-26-
the extent permissible by law) from all consequent liability and to promptly
reimburse all reasonable expense (including attorney fees) stemming therefrom.
In the event K-A fails to take action with respect to such matters within a
reasonable period, not more than six (6) months, following receipt of such
notice and evidence, ORTHO shall have the right, but not the obligation, to
bring, defend and maintain any appropriatesuit or action. If ORTHO finds it
necessary to join K-A in such suit or action, K-A shall execute all papers and
perform such other acts as may be reasonably required and may, at its option, be
represented by counsel of its choice. ORTHO shall pay to K-A the reasonable
expenses of K-A (including its attorney's fees) in connection with any such suit
or action. Absent an agreement between the parties to jointly bring any action
or suit hereunder and share the expenses thereof, any amount recovered in any
such action or suit shall be retained by the party bearing its expenses thereof.
-27-
ARTICLE 9
---------
TERM AND TERMINATION
--------------------
9.01 TERM
----
This AGREEMENT shall come into effect on the EFFECTIVE DATE and shall
remain in effect unless the parties mutually agree in writing to terminate, or
until termination occurs pursuant to Paragraph 9.02 below.
9.02 DEFAULT
-------
In the event that K-A or ORTHO (the "Defaulting party") shall:
a) default in a material obligation hereunder, including failure to
make any payments, and fail to remedy such default within 60 days after notice
of such default by the Non-Defaulting party; or
b) become bankrupt or insolvent, or file a petition in bankruptcy or
make a general assignment for the benefit of creditors or otherwise acknowledge
insolvency or be adjudged bankrupt; or
c) go or be placed in a process of complete liquidation or
dissolution other than for an amalgamation or reconstruction; or
d) suffer the appointment of a receiver for any substantial portion
of its business who shall not be discharged within 60 days after such receiver's
appointment,then, and in any
-28-
such event, the Non-Defaulting party, at its option, may terminate its
obligations to, and the rights of, the Defaulting party under the license
granted in this AGREEMENT upon 30 days written notice to the Defaulting party,
which termination shall be effective as of the occurrence of the event giving
rise to the option to terminate.
9.03 RIGHTS UPON DEFAULT
-------------------
(a) Upon termination of this AGREEMENT as a result of K-A's default under
Paragraph 9.02, ORTHO shall have the right, but not the obligation, to make, use
and sell LICENSED PRODUCTS under LICENSED PATENTS and LICENSED KNOW-HOW, and all
of ORTHO's payment obligations under this AGREEMENT shall continue, provided
however, that ORTHO shall have the right to off-set against any such payments
any and all reasonable expenses directly incurred as a result of K-A's default.
(b) The grant of certain rights pursuant to this AGREEMENT involves
unique rights which do not have a readily ascertainable fair market value. For
this reason, among others, K-A might be irreparably damaged in the event that
this AGREEMENT is not deemed to be specifically enforceable with respect to
ORTHO's (and its AFFILIATES' and sublicensees') obligation of confidentiality
and its covenant not to establish or sublicense more than one manufacturing
facility in the LICENSED TERRITORY. As such, K-A shall be entitled to all
equitable and/or legal remedies that
-29-
might be available to it solely for the purpose of enforcing the provisions of
this Paragraph 9.03(b).
9.04 SURVIVAL
--------
Notwithstanding the termination of a party's obligations to or the
rights of the Defaulting party under this Agreement in accordance with the
provisions of this Paragraph 9.03, and the provisions of Article 6, shall
survive such termination and continue in full force and effect for a period of
not more than three (3) years following termination.
9.05 EFFECT OF TERMINATION
---------------------
Nothing herein shall limit any remedies available to either party at
law or in equity for the default of the other party under Paragraph 9.02 (b),
(c) or (d). Termination shall not excuse the obligation of either party to pay
money due to the other party.
-30-
ARTICLE 10
----------
MISCELLANEOUS PROVISIONS
------------------------
10.01 NO INFRINGEMENT
---------------
K-A is not aware of (i) any third party rights upon which, in its
opinion, this AGREEMENT will infringe, or (ii) any claimed infringement against
K-A with respect to LICENSED PRODUCTS.
10.02 EFFORTS
-------
The parties hereto shall use reasonable and practical efforts to
obtain any and all consents, approvals, orders or authorizations required to be
obtained with respect to the provisions hereof.
10.03 NOTICES
-------
All notices, requests, demands and other communications required or
permitted to be given under this AGREEMENT shall be in writing and shall be
mailed to the party to whom notice is to be given, by telex or facsimile, and
confirmed by first class mail, registered or certified, return receipt
requested, postage prepaid, and properly addressed as follows (in which case
such notice shall be deemed to have been duly given on the third (3rd) day
following the date of such sending):
-31-
KIRIN-AMGEN
-----------
Kirin-Amgen, Inc.
1900 Oak Terrace Lane
Thousand Oaks, CA 91320-1789
U.S.A.
Telex No. 4994440 (K-A)
Attn: Corporate Secretary
with a copy to:
Musick, Peeler & Garrett
One Wilshire Boulevard
Suite 200
Los Angeles, CA 90017
U.S.A.
Telex No. 701 357 (MPG LAW OD)
Attn: Joel S. Marcus, Esq.
ORTHO
-----
President
Ortho Pharmaceutical Corporation
U.S. Route 202
Raritan, New Jersey 08869
U.S.A.
with a copy to:
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, N.J. 08933-7033
U.S.A.
Telex No. 844-481
Attn: General Counsel
Any party by giving notice to the other in the manner provided above may change
such party's address for purposes of this Paragraph 10.03.
10.04 ENTIRE AGREEMENT; AMENDMENT
---------------------------
This AGREEMENT (together with all Exhibits attached hereto)
constitutes the full and complete agreement and
-32-
understanding between the parties hereto and shall supersede any and all prior
written and oral agreements including but not limited to any "Agreement in
Principle" concerning the subject matter contained herein. This AGREEMENT may
not be modified or amended nor may any provision hereof be waived without a
written instrument executed by K-A and ORTHO.
10.05 WAIVER
------
No failure or delay by any party to insist upon the strict
performance of any term, condition, covenant or agreement of this AGREEMENT, or
to exercise any right, power or remedy hereunder or consequent upon a breach
hereof shall constitute a waiver of any such term, condition, covenant,
agreement, right, power or remedy or of any such breach or preclude such party
from exercising any such right, power or remedy at any later time or times.
10.06 HEADINGS
--------
Headings in this AGREEMENT are included herein for the convenience
of reference only and shall not constitute a part of this AGREEMENT for any
purpose.
10.07 ARBITRATION AND ATTORNEYS' FEES AND COSTS
-----------------------------------------
In the event any dispute should arise between the parties hereto as
to the validity, construction, enforceability or performance of this AGREEMENT
or any of its provisions, such
-33-
dispute shall be settled by arbitration. Said arbitration shall be conducted at
Chicago, Illinois, in accordance with the rules then obtaining of the American
Arbitration Association with a panel of three (3) arbitrators. The rules of
discovery then pertaining to the courts of law in such jurisdiction shall apply
thereto. The unsuccessful party to such arbitration shall pay to the successful
party all costs and expenses, including reasonable attorneys' fees incurred
therein by such successful party.
10.8 GOVERNING LAW
-------------
This AGREEMENT shall be construed in accordance with the internal
laws, and not the law of conflicts, of the State of California applicable to
agreements made and to be performed in that state.
10.9 BINDING EFFECT
--------------
This AGREEMENT shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.
10.10 NUMBER AND GENDER
-----------------
Words in the singular shall include the plural, and words in a
particular gender shall include either or both additional genders, when the
context in which such words are used indicates that such is the intent.
-34-
10.11 COUNTERPARTS
------------
This AGREEMENT may be executed in one or more counterparts by the
parties hereto. All counterparts shall be construed together and shall
constitute one AGREEMENT.
10.12 AGREEMENT TO PERFORM NECESSARY ACTS
-----------------------------------
Each party agrees to perform any further acts and execute and
deliver any and all further documents and/or instruments which may be reasonably
necessary or desirable to carry out the provisions of this AGREEMENT.
10.13 VALIDITY
--------
If for any reason any clause or provision of this AGREEMENT, or the
application of any such clause or provision in a particular context or to a
particular situation, circumstance or person, should be held unenforceable,
invalid or in violation of law by any court or other tribunal, then the
application of such clause or provision in contexts or to situations,
circumstances or persons other than that in or to which it is held
unenforceable, invalid or in violation of law shall not be affected thereby, and
the remaining clauses and provisions hereof shall nevertheless remain in full
force and effect, provided however, that any provisions so held unenforceable,
invalid or in violation of law shall be rewritten by the parties in a lawful
manner to reflect its intent.
-35-
10.14 REPRESENTATIONS
---------------
Each of the party hereto acknowledges and agrees (i) that no
representation or promise not expressly contained in this AGREEMENT has been
made by the other party hereto or by any of its agents, employees,
representatives or attorneys; (ii) that this AGREEMENT is not being entered into
on the basis of, or in reliance on, any promise or representation, expressed or
implied, covering the subject matter hereof, other than those which are set
forth expressly in this AGREEMENT; and (iii) that each party has had the
opportunity to be represented by counsel of its own choice in this matter,
including the negotiations which preceded the execution of this AGREEMENT.
10.15 ASSIGNMENT
----------
Neither party shall assign its rights or obligations under this
AGREEMENT without prior written consent of the other party, provided however,
ORTHO may assign its rights and obligations by sublicensing its AFFILIATES or
third parties as provided in Paragraph 2.02 hereinabove.
10.16 INDEPENDENT CONTRACTORS
-----------------------
K-A and ORTHO shall not be deemed to be partners, joint venturers or
each other's agents, and neither shall have the right to act on behalf of the
other except as expressly provided hereunder or otherwise expressly agreed to in
writing.
-36-
10.17 FORCE MAJEURE
-------------
Neither party shall be liable for failure to perform as required by
any provision of this AGREEMENT where such failure results from a force majeure
beyond such party's control. In the event of any delay attributable to a force
majeure, the time for performance affected thereby shall be extended for a
period equal to the time lost by reason of the delay. If, as a result of a
force majeure, K-A is unable to manufacture LICENSED PRODUCTS, for the purposes
of this AGREEMENT, and strictly in accordance with the provisions of Paragraphs
2.01 and 2.02 of this AGREEMENT, then, ORTHO shall have the right, but not the
obligation, to manufacture said LICENSED PRODUCTS and K-A shall provide ORTHO
any assistance, information and/or know-how required by ORTHO to manufacture
such LICENSED PRODUCTS.
10.18 INDEMNITY
---------
Each party to this AGREEMENT shall be responsible for its own acts
relating to the manufacture and use of LICENSED PRODUCTS and neither shall
indemnify the other for costs, expenses, liability, damages and claims for any
injury or death to persons or damage to or destruction of property or other loss
arising out of or in connection with any LICENSED PRODUCTS made or used by
either party.
-37-
10.19 PUBLICITY AND DISCLOSURE
------------------------
In the absence of specific agreement between the parties, neither
party shall originate any publicity, news release or other public announcement,
written or oral, whether to the public press, to stockholders or otherwise,
relating to this AGREEMENT, to any amendment hereto as to performance hereunder,
save only such announcement as in the opinion of legal counsel to the party
making such announcement is required by law or practice to be made. The party
making any such announcement shall give the other party an opportunity to review
the form of the announcement before it is made. Routine references to this
AGREEMENT and the arrangements hereunder without undue frequency and without
emphasis shall be allowed in the usual course of business provided that notice
of such use is given to the other party. If, in the opinion of ORTHO, excessive
use occurs, such references shall be discontinued after discussion among the
parties.
10.20 COSTS AND EXPENSES
------------------
K-A and ORTHO shall each bear and pay for their respective costs and
expenses regarding the negotiation and preparation of this AGREEMENT and all
documents, instruments and agreements related thereto.
10.21 EXPORT CONTROL LAWS
-------------------
10.21.1 The parties hereby agree that any Technical Data (as that
term is defined in Section 379.1 of the U.S. Export
-38-
Administration Regulations) exported from the United States pursuant to this
AGREEMENT and any other related agreements, and any direct product thereof,
shall not be shipped, either directly or indirectly, to Afghanistan or any Group
P, Q, S, W, Y or Z Countries (as specified in Supplement No. 1 to part 370 of
the Export Administration Regulations), unless (i) separate specific
authorization to reexport such Technical Data or such direct products is
provided by the U.S. Offfice of Export Administration or (ii) such specific
authorization is not required pursuant to part 379.8 of the U.S. Export
Administration Regulations. The parties further agree that the export and
reexport of commodities pursuant to this AGREEMENT and any other related
agreements shall be subject to the licensing requirements of the U.S. Export
Regulations.
10.21.2 In the event that a specific authorization of, or a
validated license from, a government other than that of the exporting party is
required, K-A and ORTHO each agree that the party within the jurisdiction of
such other government shall, upon the request of the party proposing to make the
export, use reasonable efforts to obtain, as expeditiously as applicable, the
requisite authorization or license.
10.22 PATENT MARKING
--------------
ORTHO shall mark or cause to be marked all LICENSED PRODUCTS sold
under this AGREEMENT, in accordance with any applicable laws and regulations.
-39-
IN WITNESS WHEREOF, the undersigned have caused this AGREEMENT to be
executed by their duly authorized representatives in the manner legally binding
upon them on the first date written above.
KIRIN-AMGEN, INC.
a California corporation
/s/Robert D. Weist By /s/George B. Rathmann
- ------------------- -----------------------------
Witness George B. Rathmann, President
ORTHO PHARMACEUTICAL CORPORATION
a New Jersey corporation
/s/Dennis N. Longstreet By /s/Gary V. Parlin
- ------------------------ -----------------------------
Witness Gary V. Parlin, President
-40-
EXHIBIT A
---------
DESCRIPTION OF ERYTHROPOIETIN
-----------------------------
The chemical structure of r-HuEPO is best described by its amino acid
sequence which is depicted below:
NH\\2\\ - ala pro pro arg leu ile cys asp ser arg val leu glu arg try
Y*
leu leu glu ala lys glu ala glu asn ile thr thr gly cys ala
Y
glu his cys ser leu asn glu asn ile thr val pro asp thr lys
val asn phe tyr ala trp lys arg met glu val gly gln gln ala
val glu val trp gln gly leu ala leu leu ser glu ala val leu
Y
arg gly gln ala leu leu val asn ser ser gln pro trp glu pro
leu gln leu his val asp lys ala val ser gly leu arg ser leu
thr thr leu leu arg ala leu gly ala gln lys glu ala ile ser
pro pro asp ala ala ser ala ala pro leu arg thr ile thr ala
asp thr phe arg lys leu phe arg val tyr ser asn phe leu arg
gly lys leu lys leu tyr thr gly glu ala cys arg thr gly asp
arg - COOH
* 'Y' designates N-linked glycosalation site.
Exhibit B
---------
ERYTHROPOIETIN (Page 1)
- ---------------
Docket Inventor(s) Title Country S.N. Filing
No. Date
- ----------- ----------- ---------------------------- ------- --------- -----------
155 F. Lin Recombinant Methods and U.S. 561,024 12/13/83
Materials Applied to Micro-
bial Expression of Erythro-
poietin
155-CIP-1 F. Lin Recombinant Methods and U.S. 582,185 2/21/84
Materials Applied to Micro-
bial Expression of Erythro-
poietin
155-CIP-2 F. Lin Recombinant Methods and U.S. 655,841 9/28/84
Materials Applied to Micro-
bial Expression of Erythro-
poietin
155-CIP-3 F. Lin Production of Erythropoietin U.S. 675,298 11/30/84
Australia Via PCT US84/
02021 12/11/84
China 85106196 6/19/85
Canada 469,938 12/12/84
Czechoslovakia PV 4438-85 6/18/85
EPO designating 84308654.7 12/12/84
Austria
Belgium
France
Germany
Italy
Luxembourg
Netherlands
Sweden
Switzerland
Lichtenstein
United Kingdom
* Information not yet available.
Exhibit B
---------
ERYTHROPOIETIN (Page 2)
- ---------------
Docket Inventor(s) Title Country S.N. Filing
No. Date
- --------- ----------- ------- ---------- -------------- --------
Finland 852,377 6/14/85
Denmark Via PCT US84/
0201 12/11/84
E. Germany G/277534-2 6/19/85
Greece * *
Hungary 2404/85 6/18/85
Israel 73785 12/11/84
Japan Via PCT US84/
02021 12/11/84
Korea 7923/1984 12/13/84
New Zealand 201,501 12/10/84
Portugal * *
South Africa 84/9625 12/11/84
Spain 538,519 12/12/84
USSR 3917560/04 6/19/85
* Information not yet available.
Exhibit B
---------
ERYTHROPOIETIN (Page 3)
- ---------------
Docket Inventor(s) Title Country S.N. Filing
No. Date
- -------- ------------- ----------------------------- -------- ---------- -------
132 J. Egrie ATCC HB8209 - Its Monoclonal U.S. 463,724 2/4/83
Antibody to Erythropoietin
ATCC HB8209/Budapest
Canada 446,767 2/3/84
Israel 71001 2/17/84
Japan Via PCT US84/
00151 2/3/84
EPO designating 84/300693.3 2/3/84
Austria
Belgium
France
Germany
Italy
Luxembourg
Netherlands
Sweden
Switzerland
Liechtenstein
United Kingdom
190 P. Lai Protein Purification U.S. 747,119 6/20/85
T. Strickland
* Information not yet available.
Exhibit 10.6
9-30-85 (K-A)
- ------------
TECHNOLOGY LICENSE AGREEMENT
----------------------------
THIS TECHNOLOGY LICENSE AGREEMENT entered into this 30th day of
September, 1985, by and between KIRIN-AMGEN INC., a California corporation
having offices at 1900 Oak Terrace Lane, Thousand Oaks, California 91320-1789
(said corporation hereinafter referred to as "K-A") and ORTHO PHARMACEUTICAL
CORPORATION, a New Jersey corporation having offices at U.S. Route 202, Raritan,
New Jersey 08869, (said corporation hereinafter referred to as "ORTHO").
WITNESSETH:
----------
WHEREAS, K-A represents that it has developed and is continuing to
develop technology relating to erythropoietin and processes for its manufacture;
WHEREAS, K-A further represents that it is the owner or licensee of
patent applications by assignment and unpatented know-how covering said
erythropoietin;
WHEREAS, ORTHO and AFFILIATES are engaged in the research, development and
sale of health care products throughout the world and wish to obtain certain
rights to such technology and to such patents and patent applications;
WHEREAS, K-A is a joint venture between Amgen of Thousand Oaks, California
and Kirin Brewery Co., Ltd. of Tokyo, Japan and each, respectively, has
consented to the execution of this AGREEMENT and a Product License Agreement and
each has by separate written undertaking to ORTHO effective September 30, 1985,
and incorporated herein by reference, agreed: (a) that each will make available
to K-A all information and documents and provide assistance in order that K-A
perform all of its obligations hereunder including but not limited to providing
to ORTHO all information and documents provided for under this AGREEMENT; (b)
that each has consented to ORTHO having the right to manufacture EPO in the
United States for use and sale outside the United States except in China and
Japan; and (c) that in the event K-A is dissolved, each shall, to the extent
legally possible, continue to fulfill all obligations and duties under this
AGREEMENT.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein recited, and other good and valuable considerations, the receipt of which
is acknowledged, it is agreed as follows:
-2-
ARTICLE 1
---------
DEFINITIONS
-----------
For the purposes of this Agreement, the terms set forth in this Article I
shall have the following meanings:
1.01 "ACT" shall mean the Drug Price Competition and Patent Term
Restoration Act of 1984 and equivalent subsequent legislation in the United
States and in any foreign country.
1.02 "AFFILIATE" shall mean and include (i) any company which owns or
controls directly or indirectly at least forty percent (40%) of the voting stock
of ORTHO and (ii) any other company at least forty percent (40%) of whose voting
stock is owned or controlled directly or indirectly by such owning or
controlling company, and (iii) any other company with which ORTHO or such an
owning, owned, controlling or controlled company has a co-marketing, joint
venture or distribution agreement for pharmaceuticals outside the United States.
The term "ORTHO" shall also mean and include any AFFILIATE wherein the inclusion
of same shall be warranted under the provisions of the AGREEMENT.
1.03 "AGREEMENT" shall mean this Technology License Agreement.
-3-
1.04 "CLOSING" shall occur when,:
(a) K-A shall execute and deliver to ORTHO this AGREEMENT and a
Product License Agreement to market LICENSED PRODUCTS;
(b) ORTHO shall execute and deliver to K-A this AGREEMENT and a
Product License Agreement and shall further deliver, as provided in Paragraph
5.01(i), to K-A the amount of $2,500,000 in the form of a certified or cashier's
check, representing an aggregate initial royalty payment;
(c) The following approvals shall have been obtained: (i) the Board
of Directors of K-A shall have authorized K-A's participation in, and its
execution and delivery of, this AGREEMENT, including the Exhibits attached
hereto and a Product License Agreement; and (ii) the Board of Directors of ORTHO
shall authorize ORTHO's participation in, and its execution and delivery of,
this AGREEMENT, including the Exhibits attached hereto and a Product License
Agreement.
1.05 "EFFECTIVE DATE" shall mean the date on which this AGREEMENT takes
effect which is the date first written above.
1.06 "EPO" shall mean erythropoietin as described in Exhibit A.
1.07 "FIELD OF ACTIVITY" shall mean the areas of research, development,
and regulatory approval of EPO for all
-4-
human therapeutic uses including but not limited to prophylactic uses, except
diagnostics and shall include but not be limited to, toxicology, dosage studies,
model studies, clinical studies, product registration and government approvals.
1.08 "FDA" shall mean the United States Food & Drug Administration and
foreign counterparts thereof.
1.09 "IND" shall mean a Notice of Claimed Investigational Exemption for a
New Drug and all supplements under the United States Food, Drug & Cosmetic Act
(FDA Act) and foreign counterparts thereof.
1.10 "LICENSED FIELD" shall mean and include EPO for all indications for
human use except diagnostics.
1.11 "LICENSED KNOW-HOW" shall mean and include any and all data,
information, technology or special ability on the part of K-A including, but not
limited to, processes, techniques, methods, products, materials and compositions
relating to the research, development, manufacture, testing or use of EPO now
owned or controlled by K-A or that shall be owned or controlled by K-A during
the term of this AGREEMENT, which is reasonably related to LICENSED PATENTS and
LICENSED
-5-
PRODUCTS for use in the LICENSED FIELD; and which is useful in seeking approval
from appropriate governmental health authorities to market LICENSED PRODUCTS and
which includes any K-A INDs and NDAs and all supplements thereto and foreign
counterparts thereof covering PRODUCTS in the LICENSED FIELD.
1.12 "LICENSED PATENTS" shall mean:
(a) any patent listed in Exhibit B;
(b) any patent application listed in Exhibit B, and any division,
continuation, or continuation-in-part of any such application, and any patent
which shall issue based on such application, division, continuation or
continuation-in-part;
(c) any patent which is a reissue or extension of or a patent of
addition to, any patent defined in (a) or any application maturing into a patent
defined in (b) above;
(d) any patent application or patent corresponding to any patent
application or patent identified in (a), (b) or (c) above which is hereafter
filed or issued in any country; and
(e) any patent application related to or based on any of K-A's
technical information developed in the LICENSED FIELD during the performance of
this AGREEMENT, and any division, continuation or continuation-in-part of any
such application; and any patent which shall issue based on such
-6-
application, division, continuation or continuation-in-part; and any patent
which is a reissue or extension of, or a patent of addition to, any such patent.
1.13 "LICENSED PRODUCTS" shall mean and include any PRODUCTS for use in
the LICENSED FIELD (i) which are within the scope of a VALID LICENSED CLAIM of a
LICENSED PATENT; or (ii) whose use is within the scope of a VALID LICENSED CLAIM
of a LICENSED PATENT; or (iii) which are manufactured or packaged within the
scope of a VALID LICENSED CLAIM of a LICENSED PATENT; or (iv) which utilize any
LICENSED KNOW-HOW.
1.14 "LICENSED TERRITORY" shall mean and include the entire world except
(a) the United States, its territories and possessions, including the
Commonwealth of Puerto Rico, (b) China and (c) Japan.
1.15 "MAJOR COUNTRY" shall mean any of the following: United States,
United Kingdom, West Germany, France and Japan.
1.16 "NDA" shall mean a New Drug Application and/or a Product License
Application and all supplements filed pursuant to the requirements of the FDA,
including all documents, data and other information concerning LICENSED PRODUCTS
which are necessary for, or included in, FDA
-7-
approval to market LICENSED PRODUCTS and foreign counterparts thereof of NDAs.
1.17 "OUTSIDE RESEARCH PAYMENTS" shall mean amounts paid by ORTHO for
clinical testing to an individual or individuals or to an entity other than K-A
or ORTHO or an AFFILIATE for purposes of independent evaluation of any of the
PRODUCTS, which data shall be used by ORTHO and/or K-A in filing NDAs or other
registrations regarding the PRODUCTS.
1.18 "PHASE I" shall mean that portion of the NDA approval process which
provides for the first introduction into man (when only animal and in vitro data
-- ----
are available) of a LICENSED PRODUCT with the purpose of determining human
toxicity, metabolism, absorption, elimination and other pharmacological action,
preferred routes of administration and safe dosage range.
1.19 "PHASE II" shall mean that portion of the NDA approval process which
provides for the initial trials of a LICENSED PRODUCT on a limited number of
patients for specific disease control or prophylaxis purposes. PHASES I and II
may overlap and, when indicated, may require additional animal data before they
can be completed. Such animal tests are required to be designed to take into
account the expected
-8-
duration of administration of LICENSED PRODUCTS to human beings, the age groups,
and physical status.
1.20 "PRODUCTS" shall mean EPO for human therapeutic uses including but
not limited to prophylactic uses except diagnostics.
1.21 "PRODUCT ORGANISMS" shall mean and include any and all organisms
developed or acquired by K-A, the uses of which are licensed to ORTHO pursuant
to this AGREEMENT and which have been genetically engineered to produce
biologically active LICENSED PRODUCTS, including any and all improvements
thereon.
1.22 "VALID LICENSED CLAIM" shall mean and include a claim in an issued
LICENSED PATENT which has not lapsed or become abandoned and which claim has not
been declared invalid by an unreversed or unappealable decision or judgment of a
court of competent jurisdiction.
ARTICLE 2
---------
LICENSE
-------
2.01 GRANT
-----
K-A hereby grants to ORTHO but not AFFILIATES, except as hereinafter
provided, an exclusive license to make
-9-
in one location, have made, and use LICENSED KNOW-HOW, LICENSED PATENTS and
LICENSED PRODUCTS in the LICENSED TERRITORY in the LICENSED FIELD for use in
research and in the development and regulatory approval of LICENSED PRODUCTS.
ORTHO and AFFILIATES shall also be permitted to use LICENSED PRODUCTS made in
one location in the United States, in the LICENSED TERRITORY.
2.02 SUBLICENSE
----------
ORTHO may, with prior written notice to K-A, sublicense LICENSED
PATENTS, LICENSED KNOW-HOW and LICENSED PRODUCTS under this AGREEMENT (i) to any
AFFILIATE or third party, to use LICENSED PRODUCTS as provided in this
AGREEMENT; and (ii) if ORTHO is not manufacturing LICENSED PRODUCTS in the
LICENSED TERRITORY, then to any one controlled (50%) AFFILIATE to make in one
location in the LICENSED TERRITORY and use LICENSED PRODUCTS as provided in this
AGREEMENT.
2.03 ASSURANCE BY ORTHO
------------------
In the event of sublicensing as in Paragraph 2.02, ORTHO shall assure
K-A that this AGREEMENT shall apply to such AFFILIATE or third party
sublicensee, and such AFFILIATE or third party sublicensee shall deliver to K-A
a written promise to comply with the terms of this AGREEMENT to the
-10-
extent that such terms are applicable. ORTHO shall guarantee the due and
punctual performance of any and all responsibilities under this AGREEMENT as
applied to such AFFILIATE or third party sublicensee.
2.04 DIRECT AGREEMENT
----------------
As a substitute for a sublicense, K-A shall, if ORTHO so requests,
enter into a separate agreement with any AFFILIATE of ORTHO granting a license
in accordance with the provisions of this AGREEMENT. Such agreement shall
incorporate all of the terms of this AGREEMENT to the extent that they are
applicable. ORTHO shall guarantee the due and punctual performance of any and
all responsibilities by the AFFILIATE under such separate agreement.
2.05 WARRANTY
--------
K-A warrants and represents that it has the full right and power to
grant the license set forth in Paragraph 2.01 of this Article 2 and that there
are no outstanding agreements, assignments or encumbrances in existence
inconsistent with the provisions of this AGREEMENT.
-11-
ARTICLE 3
---------
RESEARCH & DEVELOPMENT ACTIVITY
-------------------------------
3.01 DEVELOPMENT PROGRAM.
-------------------
K-A and ORTHO hereby agree to conduct a Development Program, as set
forth below.
(a) K-A and ORTHO shall meet promptly, after execution of the
AGREEMENT, to formulate an outline of research and development activities which
shall be conducted by K-A until the formulation of a Development Plan. Within
ninety (90) days after execution of this AGREEMENT, the parties shall establish
a detailed development plan for the Development Program ("Development Plan").
The Development Plan shall: (i) identify the technical problems involved and the
general projects to be carried out regarding the PRODUCTS, (ii) estimate the
personnel to be contributed by K-A and ORTHO for each project, and (iii) set
forth a projected timetable for the work, including clinical testing, to be
performed by K-A and ORTHO. The Development Plan shall include a General Outline
of both PHASE I and PHASE II, identifying the investigator or investigators, the
hospitals or research facilities where the clinical pharmacology will be
undertaken, any expert committees or panels to be utilized, the maximum number
of subjects to be involved, and the estimated duration of these early phases of
-12-
investigation. K-A and ORTHO shall diligently conduct the projects set forth in
the Development Plan and shall use reasonable efforts to reach the goals of the
Development Program in their conduct of those projects. The parties shall
prepare and supply to each other written reports of their respective progress
under the Development Plan every three (3) months. The parties shall make
appropriate revisions, if any, to the Development Plan every three (3) months.
(b) If any party desires, at any time, to modify the Development
Plan, it shall notify the other party of the modification. Routine-type or minor
modifications to the Development Plan may be accomplished by communicating same
to the other party. Any major modification or amendment to the Development Plan
shall be considered by both parties in good faith and be mutually agreed upon.
3.02 COMPENSATION.
------------
(a) Upon reasonable notice and request by ORTHO, K-A will assign a
reasonable number of Scientists to work on the Development Program, for whose
work K-A shall be reimbursed monthly at its then-effective normal monthly
billing rate. For purposes of this AGREEMENT, the term "Scientist" shall include
research scientists and research associates but shall exclude laboratory
assistants.
-13-
(b) ORTHO shall pay for any contracted services identified in the
Development Program within the LICENSED TERRITORY including, but not limited to,
clinical studies and consultant services.
(c) At the end of each calendar month, K-A shall submit a written
statement containing reasonable detail to ORTHO setting forth the number of
Scientist-months of work that it performed during such calendar month and any
other related outside expenditures. After ORTHO has received such a statement
and has had a reasonable period, not to exceed thirty (30) days, to review it,
ORTHO shall promptly pay K-A an amount equal to K-A's then-effective monthly
billing rate times the Scientist-months involved in conducting projects under
the Development Plan for such month. K-A shall notify ORTHO of any change in
accordance with this paragraph in writing at least thirty (30) days in advance
of the proposed change.
3.03 RECORDS OF COSTS.
----------------
K-A shall keep correct and complete records containing all
information required for the determination of costs to be paid to it under this
AGREEMENT for a period of not less than three (3) years after the performance of
any services hereunder. K-A shall permit the books and records that it keeps
pursuant to this paragraph to be inspected and
-14-
audited during reasonable business hours by an independent certified public
accountant selected by ORTHO, to the extent necessary to verify such costs. The
parties hereby acknowledge that any work that is to be performed by K-A for
ORTHO under the Development Program shall be as an independent contractor, and
that ORTHO shall not incur any obligations for the remuneration or other
expenses (and relevant reporting obligations) of any employee or representative
of K-A by virtue of such employee's or representative's participation in the
Development Program.
3.04 DISCLOSURE OF PRODUCT TECHNOLOGY.
--------------------------------
(a) For purposes of advancing the Development Program, K-A and ORTHO
shall disclose to each other any information, including such technology as may
be characterized as inventive and appropriate for reduction to patent
applications which shall be prepared and filed by the developing party's Patent
Counsel and subsequently included in Exhibit B of this AGREEMENT, that each has
relating to the FIELD OF ACTIVITY and which will be useful in furthering the
goals of the Development Program. To further promote the purposes of the
Development Program, each party shall actively collaborate with the other by
disclosing on a regular and periodic basis, such technical, clinical and other
information developed by such party that is pertinent
-15-
to the progress of the Development Program. K-A and ORTHO each acknowledge that
any technical and other information disclosed under this Paragraph 3.04 shall be
considered LICENSED KNOW-HOW and further agree that any such technical, clinical
and other information shall not otherwise be disclosed except as permitted by
this AGREEMENT.
(b) To facilitate further effective commercial development, and
registration of the PRODUCTS within the FIELD OF ACTIVITY, K-A shall, within
reason, permit representatives of ORTHO to inspect its respective facilities,
technical reports, memoranda and other documents, including but not limited to
laboratory notebooks, directly relating to the Development Program, and to make
copies of any and all such reports, memoranda and other documents; provided,
however, that the rights hereunder shall not extend beyond the LICENSED KNOW-HOW
and shall be limited solely to information that has been actually used by K-A
for the development of the PRODUCTS.
(c) Upon commencement of the Development Program, K-A agrees to
supply ORTHO with sufficient technical information and assistance for ORTHO to
be able to assess the progress of the work performed under the Development Plan
during the course of the Development Program. Any technical information supplied
by a party to the other hereunder shall
-16-
remain confidential and shall thereafter be deemed a part of the LICENSED KNOW-
HOW for purposes hereof.
3.05 DISCLOSURE OF LICENSED KNOW-HOW
-------------------------------
K-A shall disclose to ORTHO on a continuing basis all such LICENSED
KNOW-HOW including the contents of any K-A INDs and NDAs filed in Japan pursuant
to the regulations of the FDA as is reasonably required for ORTHO to conduct
PHASE I and PHASE II studies, clinical studies and obtain product registration
of LICENSED PRODUCTS in the LICENSED TERRITORY. With respect to information for
the manufacture of LICENSED PRODUCTS pursuant to this AGREEMENT not contained in
INDs, K-A shall disclose same to ORTHO upon completion of PHASE II studies
according to ORTHO's protocol. Additionally, K-A shall promptly provide ORTHO
with sufficient information necessary to satisfactorily assess the progress of
its work with respect to the development of LICENSED PRODUCTS. ORTHO shall also
provide K-A with sufficient information necessary to enable K-A to
satisfactorily assess the progress of ORTHO's clinical testing and LICENSED
PRODUCTS registration work.
3.06 IMPROVEMENTS
------------
3.06.1 If K-A, on the one hand, or ORTHO and/or its AFFILIATES and
sublicensee(s), on the other hand, improve the
-17-
PRODUCT ORGANISMS, and/or the LICENSED KNOW-HOW, or make LICENSED PRODUCTS or
process improvements, all such improvements shall become part of the LICENSED
KNOW-HOW and shall be promptly transferred and/or communicated to the other
party in order to maintain parity among K-A, ORTHO and its AFFILIATES and
sublicensees and by the provisions hereof shall be deemed to be a part of the
LICENSED PATENTS or LICENSED KNOW-HOW as the case may be and licensed to K-A or
ORTHO, as the case may be, on a royalty-free basis.
3.06.2 Notwithstanding any provision of this AGREEMENT, any technology
and/or improvements developed by a party to this AGREEMENT and disclosed or
licensed under this Article 3, shall be and remain the property of the
developing party. This Paragraph 3.06.2 shall survive any termination of this
AGREEMENT.
3.07 WARRANTY
--------
K-A warrants that any vialed clinical PRODUCTS and/or PRODUCT
ORGANISMS provided to ORTHO for use in accordance with the provisions of this
AGREEMENT shall conform with the description and specifications set forth in the
appropriate AMGEN IND in the United States or supplement thereof and shall be
suitable for use as set forth in said IND. K-A expressly disclaims all other
warranties, expressed
-18-
or implied, including without limitation warranties of merchantability or
fitness for a particular purpose with respect to the vialed clinical PRODUCTS
and/or PRODUCT ORGANISMS furnished by K-A to ORTHO hereunder.
ARTICLE 4
---------
CLINICAL STUDIES AND REGISTRATION
---------------------------------
4.01 EPO
---
K-A shall, as soon as practicable and at its own expense, conduct the
necessary studies and testing and prepare and file an IND for EPO for dialysis
and other indications in Japan and shall so advise ORTHO in writing and provide
ORTHO with copies of all materials filed with the FDA. K-A shall, at its own
expense, have the responsibility to comply, with respect to any IND filed by K-
A, with any FDA request for all additional information and repetition of tests
required by the FDA. K-A shall, at its own expense exert reasonable efforts to
conduct toxicology and dosage studies, model studies and clinical studies with
respect to dialysis and other indications and shall file an NDA in Japan if
sufficient supporting data can be developed. ORTHO shall, at its own expense
conduct toxicology and dosage studies, model studies and clinical studies for
dialysis and for not less
-19-
than two (2) other indications and shall file appropriate NDAs or supplements if
sufficient supporting data can be developed. ORTHO shall have the right to use
such materials and any supporting data thereof for the filing of any
registrations corresponding to K-A's INDs, NDAs and all supplements thereto,
whether within or outside the LICENSED TERRITORY.
4.02 ORTHO STUDIES
-------------
ORTHO, at its sole cost and expense, shall use its reasonable efforts
in the LICENSED TERRITORY to pursue the preclinical, clinical and other studies
outlined in the Development Program. ORTHO shall keep and maintain complete and
accurate records of all work that it does in connection with this AGREEMENT.
These records shall be made available by ORTHO at reasonable times for
examination at K-A's request. In addition, ORTHO shall provide K-A with
sufficient technical information and assistance as is necessary for K-A to
assess the progress of ORTHO in its clinical studies and registration. In
connection with such clinical testing, K-A shall supply, at K-A's sole cost and
expense, reasonable quantities of vialed clinical PRODUCTS ready for clinical
use and sufficient for ORTHO to utilize for such purposes. If K-A is unable to
supply one hundred (100) percent of ORTHO's needs for said clinical testing,
-20-
then ORTHO shall have the right, but not the obligation, to manufacture its
needs and K-A shall provide to ORTHO any assistance, information and/or know-how
required by ORTHO to so manufacture. Notwithstanding the above, if K-A is unable
to supply one hundred (100) percent of ORTHO's needs for said clinical testing,
it shall provide to ORTHO at least fifty (50) percent of its manufacture of such
vialed clinical PRODUCTS and shall not provide any of said PRODUCTS to any third
party. If K-A is unable to so supply as a result of any applicable laws and
regulations, then ORTHO shall have the right, but not the obligation to
manufacture its needs of said PRODUCTS and K-A shall provide to ORTHO any
assistance, information and/or know-how required by ORTHO to manufacture such
PRODUCTS.
4.03 RECORDS AND PROGRESS.
---------------------
ORTHO and K-A shall keep and maintain complete and accurate records
of all work including all FDA filings that either has done in connection with
LICENSED PRODUCTS. The parties agree to provide each other with sufficient
technical information and assistance as is necessary for each of them to assess
the progress of the other party in its clinical testing of PRODUCTS and in its
filing of INDs and NDAs in connection with such PRODUCTS including but not
limited to K-A informing ORTHO of all communications and discussions with the
FDA relating to its INDs.
-21-
4.04 ACCESS TO FDA FILES
-------------------
K-A and ORTHO agree that each shall have access to and the exclusive and
irrevocable right to refer to and cross-reference each other's INDs, NDAs and
supplements thereto consistent with the purposes of this AGREEMENT and the
Product License Agreement and with respect to K-A not for any diagnostic purpose
and each agrees to provide all appropriate documentation necessary to achieve
the purposes of this AGREEMENT. ORTHO's access and utilization under this
Paragraph shall include use within and outside the LICENSED TERRITORY. The
parties agree to notify the FDA of the right to cross-reference the above-
described documents and to execute and file all the necessary papers and
documents required to allow each to exercise its rights under this AGREEMENT.
4.05 CONTINUING OBLIGATIONS
----------------------
During the term of this AGREEMENT, K-A and ORTHO each shall have a
continuing obligation to advise each other of any adverse drug reactions or any
governmental regulatory problems, notices, actions or communications and to keep
all INDs, NDAs and supplements thereto current and in full force and effect
relating to the manufacture or use, of LICENSED PRODUCTS.
-22-
ARTICLE 5
---------
ROYALTY PAYMENTS
----------------
5.01 MILESTONE EVENTS AND ROYALTY PAYMENTS In accordance with the grant of
-------------------------------------
Paragraph 2.01, ORTHO shall make the following royalty payments to K-A at the
following times in accordance with the occurrence of the following milestone
events:
(i) $2,500,000 - due and payable upon execution of this
AGREEMENT as an aggregate initial royalty payment.
(ii) $2,500,000 royalty payment due and payable upon
commencement of PHASE II clinical studies.
(iii) $2,500,000 royalty payment due and payable upon the initial
filing of any MAJOR COUNTRY registration.
(iv) $2,500,000 royalty payment due and payable upon the
approval of any MAJOR COUNTRY registration.
5.02 PAYMENT DATES.
-------------
The milestone royalty payments set forth in Paragraph 5.01 shall each be
due and payable to K-A by ORTHO thirty (30) days following the occurrence of the
milestone events set forth in Paragraph 5.01.
-23-
ARTICLE 6
---------
CONFIDENTIALITY
---------------
6.01 LIMITATIONS OF USAGE
--------------------
All confidential information transmitted by either party to the other
including all confidential information developed pursuant to this AGREEMENT,
shall be identified with reference to this AGREEMENT and the receiving party
shall, while this AGREEMENT is in effect and for three (3) years after
termination thereof, make no use of this information other than in furtherance
of this AGREEMENT and shall use the same efforts to keep secret and prevent the
disclosure of such information to parties other than its agents, officers,
employees and representatives authorized to receive such information as it would
its own confidential information except for such confidential information that,
(a) was known to the receiving party at the time of its disclosure
and not subject to any obligation of confidentiality at the time of its
disclosure;
(b) was generally available to the public or was otherwise part of
the public domain at the time of its disclosure;
(c) became generally available to the public or became otherwise
part of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this AGREEMENT; or
-24-
(d) became known to the receiving party after its disclosure (i)
from a source other than the disclosing party (including from independent
development by the receiving party), (ii) other than from a third party who had
an obligation to the disclosing party not to disclose such information to
others, and (iii) other than under an obligation of confidentiality.
Each receiving party may disclose any of the LICENSED KNOW-HOW
and confidential information to the extent such disclosure is necessary to
comply with applicable laws or regulations, or to make and use LICENSED PRODUCTS
in accordance with the terms of this AGREEMENT.
ARTICLE 7
---------
PATENTS
-------
7.01 PROSECUTION AND MAINTENANCE
---------------------------
K-A agrees to faithfully continue, at its expense, the prosecution of
all patent applications listed in Exhibit B within the LICENSED FIELD and, when
necessary, to file and prosecute additional applications covering patentable
technology relating to EPO in the United States and other countries throughout
the world. K-A shall have the duty and responsibility to pay all taxes and
annuities on all applications and patents listed in Exhibit B of the
-25-
AGREEMENT. K-A shall provide ORTHO with copies of all applications listed in
Exhibit B, all future-filed applications within the LICENSED FIELD and all
correspondence with Patent Offices applicable thereto. If K-A chooses not to
prosecute and maintain certain applications/patents under this AGREEMENT, K-A
shall so notify ORTHO and ORTHO shall, in its sole discretion, decide whether to
assume the responsibility and expenses therefore for each such application or
patent. In that event, the applications/patents for which ORTHO shall assume
responsibility shall be assigned to ORTHO.
7.02 REVIEW
------
K-A shall give ORTHO the opportunity to review, through their patent
counsel, the status of all pending patent applications listed in Exhibit B and
shall keep ORTHO informed of the status of their prosecution, including such
Patent Office proceedings as interferences, reexamination, oppositions and
requests for patent term extension under the Act. Notwithstanding the above, K-A
shall have sole responsibility for all decisions in connection with the filing
and prosecution of all patent applications and the maintenance of all patents.
K-A and ORTHO shall each take all appropriate actions to maximize the benefits
for both K-A and ORTHO with respect to any patent term restoration and/or
-26-
regulatory exclusivity that may be available in connection with any LICENSED
PATENT or LICENSED PRODUCT.
ARTICLE 8
---------
ENFORCEMENT
-----------
8.01 INFRINGEMENT BY ORTHO
---------------------
(i) If, as a result of the manufacture and use of LICENSED PRODUCTS,
ORTHO is sued for patent infringement or threatened with such a lawsuit or other
action by a third party, then ORTHO shall actively consult with K-A in its
attempts to resolve same. If the settlement of a lawsuit or threatened lawsuit
or other action requires any payments to a third party, then ORTHO and K-A shall
share said payments on an equal basis.
(ii) If, as a result of the manufacture and use of any LICENSED
PRODUCT, ORTHO is sued for patent infringement or threatened with such a lawsuit
or other action in a country and as a result of same ORTHO is prevented from the
commencement of marketing said LICENSED PRODUCT in said country, then provided
that LICENSED PRODUCTS are being marketed or in the future are marketed in
another country or countries, ORTHO shall be entitled to recover the equivalent
of 50% of the OUTSIDE RESEARCH PAYMENTS directly related to the LICENSED PRODUCT
incurred by ORTHO in accordance with
-27-
ARTICLE 4 of this AGREEMENT for registration in the problem country.
(iii) In connection with any lawsuit or threatened lawsuit or other
action as set forth in (i) or (ii) above, ORTHO and K-A shall share on an equal
basis all reasonable expenses (including attorneys' fees) incurred therewith.
8.02 INFRINGEMENT BY THIRD PARTIES
-----------------------------
Either party shall promptly notify the other party of any
infringement of any LICENSED PATENTS, misappropriation of a trade secret or
declaration of an interference proceeding relating to LICENSED PATENTS or
LICENSED KNOW-HOW, and shall provide the other party with all available evidence
relating thereto. K-A and ORTHO shall then consult with each other as to the
best manner in which to proceed. K-A shall have the right, but not the
obligation, to bring, defend and maintain any appropriate suit or action. If K-A
requests ORTHO to join K-A in such suit or action and ORTHO agrees to do so,
ORTHO shall execute all papers and perform such other acts as may be reasonably
required and may, at its option, be represented by counsel of its choice. K-A
shall pay ORTHO its reasonable expenses (including its attorney's fees) in
connection with any such suit or action. Should K-A lack standing to bring any
such action, then K-A may cause ORTHO
-28-
to do so upon first undertaking to indemnify and hold ORTHO harmless (to the
extent permissible by law) from all consequent liability and to promptly
reimburse all reasonable expense (including attorney fees) stemming therefrom.
In the event K-A fails to take action with respect to such matters within a
reasonable period, not more than six (6) months, following receipt of such
notice and evidence, ORTHO shall have the right, but not the obligation, to
bring, defend and maintain any appropriate suit or action. If ORTHO finds it
necessary to join K-A in such suit or action, K-A shall execute all papers and
perform such other acts as may be reasonably required and may, at its option, be
represented by counsel of its choice. ORTHO shall pay to K-A the reasonable
expenses of K-A (including its attorney's fees) in connection with any such suit
or action. Absent an agreement between the parties to jointly bring any action
or suit hereunder and share the expenses thereof, any amount recovered in any
such action or suit shall be retained by the party bearing the expenses thereof.
ARTICLE 9
---------
TERM AND TERMINATION
--------------------
9.01 TERM
----
This AGREEMENT shall come into effect on the EFFECTIVE DATE and shall
terminate on the earlier of the
-29-
tenth (10th) year anniversary of the EFFECTIVE DATE or as to the LICENSED
PRODUCT upon receipt of an approval letter on the LICENSED PRODUCT from the FDA,
or the counterpart of said approval letter on a LICENSED PRODUCT in any MAJOR
COUNTRY, whichever occurs first.
9.02 RIGHTS UPON TERMINATION
-----------------------
Upon termination of this AGREEMENT as provided for in Paragraph 9.01
above, all LICENSED PATENTS and LICENSED KNOW-HOW shall become the sole property
of K-A, and ORTHO shall have no further rights thereto under this AGREEMENT. Any
rights ORTHO might obtain with respect to LICENSED PATENTS and LICENSED KNOW-HOW
shall be in accordance with the provisions of the Product License Agreement to
market LICENSED PRODUCTS.
9.03 DEFAULT
-------
In the event that K-A or ORTHO (the "Defaulting party") shall:
a) default in a material obligation hereunder, including failure to
make any payments, and fail to remedy such default within 60 days after notice
of such default by the Non-Defaulting party; or
b) become bankrupt or insolvent, or file a petition in bankruptcy or
make a general assignment for the benefit of
-30-
creditors or otherwise acknowledge insolvency or be adjudged bankrupt; or
c) go or be placed in a process of complete liquidation or
dissolution other than for an amalgamation or reconstruction; or
d) suffer the appointment of a receiver for any substantial portion
of its business who shall not be discharged within 60 days after such receiver's
appointment,then, and in any such event, the Non-Defaulting party, at its
option, may terminate its obligations to, and the rights of, the Defaulting
party under the license granted in this AGREEMENT upon 30 days written notice to
the Defaulting party, which termination shall be effective as of the occurrence
of the event giving rise to the option to terminate.
9.04 RIGHTS UPON DEFAULT
-------------------
(a) Upon termination of this AGREEMENT as a result of K-A's default
under Paragraph 9.03, ORTHO shall have the right, but not the obligation, to
make, use and sell LICENSED PRODUCTS under LICENSED PATENTS and LICENSED KNOW-
HOW, and all of ORTHO's payment obligations under this AGREEMENT shall continue,
provided however, that ORTHO shall have the right to off-set against any such
payments any and all reasonable expenses directly incurred as a result of K-A's
default.
-31-
(b) The grant of certain rights pursuant to this AGREEMENT involves
unique rights which do not have a readily ascertainable fair market value. For
this reason, among others, K-A might be irreparably damaged in the event that
this AGREEMENT is not deemed to be specifically enforceable with respect to
ORTHO's (and its AFFILIATES' and Sublicensees') obligation of confidentiality
and its convenant not to establish or sublicense more than one manufacturing
facility in the LICENSED TERRITORY. As such, K-A shall be entitled to all
equitable and/or legal remedies that might be available to it solely for the
purpose of enforcing the provisions of this Paragraph 9.04(b).
9.05 SURVIVAL
--------
Notwithstanding the termination of a party's obligations to or the
rights of the Defaulting party under this Agreement in accordance with the
provisions of Paragraph 9.03, the provisions of Article 6 shall survive such
termination and continue in full force and effect for a period of not more than
three (3) years following termination.
9.06 EFFECT OF TERMINATION
---------------------
Nothing herein shall limit any remedies available to either party at
law or in equity for the default of the other party under Paragraph 9.03(b), (c)
or (d). Termination
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shall not excuse the obligation of either party to pay money due to the other
party.
ARTICLE 10
----------
MISCELLANEOUS PROVISIONS
------------------------
10.01 NO INFRINGEMENT
---------------
K-A is not aware of (i) any third party rights upon which, in its
opinion, this AGREEMENT will infringe, or (ii) any claimed infringement against
K-A with respect to LICENSED PRODUCTS.
10.02 EFFORTS
-------
The parties hereto shall use reasonable and practical efforts to
obtain any and all consents, approvals, orders or authorizations required to be
obtained with respect to the provisions hereof.
10.03 NOTICES
-------
All notices, requests, demands and other communications required or
permitted to be given under this AGREEMENT shall be in writing and shall be
mailed to the party to whom notice is to be given, by telex or facsimile, and
confirmed by first class mail, registered or certified, return receipt
requested, postage prepaid, and properly
-33-
addressed as follows (in which case such notice shall be deemed to have been
duly given on the third (3rd) day following the date of such sending):
K-A
---
Kirin-Amgen Inc.
1900 Oak Terrace Lane
Thousand Oaks, CA 91320-1789
U.S.A.
Telex No. 4994440 (K-A)
Attn: Corporate Secretary
with a copy to:
Musick, Peeler & Garrett
One Wilshire Boulevard
Suite 2000
Los Angeles, CA 90017
U.S.A.
Telex No. 701 357 (MPG LAW OD)
Attn: Joel S. Marcus, Esq.
ORTHO
-----
President
Ortho Pharmaceutical Corporation
U.S. Route 202
Raritan, New Jersey 08869
U.S.A.
with a copy to:
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, N.J. 08933-7033
U.S.A.
Telex No. 844-481
Attn: General Counsel
Any party by giving notice to the other in the manner provided above may change
such party's address for purposes of this Paragraph 10.03.
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10.04 ENTIRE AGREEMENT; AMENDMENT
---------------------------
This AGREEMENT (together with all Exhibits attached hereto)
constitutes the full and complete agreement and understanding between the
parties hereto and shall supersede any and all prior written and oral
agreements, including but not limited to any "Agreement in Principle",
concerning the subject matter contained herein. This AGREEMENT may not be
modified or amended nor may any provision hereof be waived without a written
instrument executed by K-A and ORTHO.
10.05 WAIVER
------
No failure or delay by any party to insist upon the strict performance
of any term, condition, covenant or agreement of this AGREEMENT, or to exercise
any right, power or remedy hereunder or consequent upon a breach hereof shall
constitute a waiver of any such term, condition, covenant, agreement, right,
power or remedy or of any such breach or preclude such party from exercising any
such right, power or remedy at any later time or times .
10.06 HEADINGS
--------
Headings in this AGREEMENT are included herein for the convenience of
reference only and shall not constitute a part of this AGREEMENT for any
purpose.
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10.07 ARBITRATION AND ATTORNEYS' FEES AND COSTS
-----------------------------------------
In the event any dispute should arise between the parties hereto as to
the validity, construction, enforceability or performance of this AGREEMENT or
any of its provisions, such dispute shall be settled by arbitration. Said
arbitration shall be conducted at Chicago, Illinois, in accordance with the
rules then obtaining of the American Arbitration Association with a panel of
three (3) arbitrators. The rules of discovery then pertaining to the courts of
law in such jurisdiction shall apply thereto. The unsuccessful party to such
arbitration shall pay to the successful party all costs and expenses, including
reasonable attorneys' fees incurred therein by such successful party.
10.8 GOVERNING LAW
-------------
This AGREEMENT shall be construed in accordance with the internal
laws, and not the law of conflicts, of the State of California applicable to
agreements made and to be performed in that state.
10.9 BINDING EFFECT
--------------
This AGREEMENT shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.
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10.10 NUMBER AND GENDER
-----------------
Words in the singular shall include the plural, and words in a
particular gender shall include either or both additional genders, when the
context in which such words are used indicates that such is the intent.
10.11 COUNTERPARTS
------------
This AGREEMENT may be executed in one or more counterparts by the
parties hereto. All counterparts shall be construed together and shall
constitute one AGREEMENT.
10.12 AGREEMENT TO PERFORM NECESSARY ACTS
-----------------------------------
Each party agrees to perform any further acts and execute and deliver
any and all further documents and/or instruments which may be reasonably
necessary or desirable to carry out the provisions of this AGREEMENT.
10.13 VALIDITY
--------
If for any reason any clause or provision of this AGREEMENT, or the
application of any such clause or provision in a particular context or to a
particular situation, circumstance or person, should be held unenforceable,
invalid or in violation of law by any court or other tribunal, then the
application of such clause or provision in contexts or to situations,
circumstances or persons other than that in or to
-37-
which it is held unenforceable, invalid or in violation of law shall not be
affected thereby, and the remaining clauses and provisions hereof shall
nevertheless remain in full force and effect, provided however, that any
provisions so held unenforceable, invalid or in violation of law shall be
rewritten by the parties in a lawful manner to reflect its intent.
10.14 REPRESENTATIONS
---------------
Each of the parties hereto acknowledges and agrees (i) that no
representation or promise not expressly contained in this AGREEMENT has been
made by the other party hereto or by any of its agents, employees,
representatives or attorneys; (ii) that this AGREEMENT is not being entered into
on the basis of, or in reliance on, any promise or representation, expressed or
implied, covering the subject matter hereof, other than those which are set
forth expressly in this AGREEMENT; and (iii) that each party has had the
opportunity to be represented by counsel of its own choice in this matter,
including the negotiations which preceded the execution of this AGREEMENT.
10.15 ASSIGNMENT
----------
Neither party shall assign its rights or obligations under this
AGREEMENT without prior written consent of the other party, provided however,
ORTHO may
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assign its rights and obligations by sublicensing its AFFILIATES or third
parties as provided in Paragraph 2.02 hereinabove.
10.16 INDEPENDENT CONTRACTORS
-----------------------
K-A and ORTHO shall not be deemed to be partners, joint venturers or
each other's agents, and neither shall have the right to act on behalf of the
other except as expressly provided hereunder or otherwise expressly agreed to in
writing.
10.17 FORCE MAJEURE
-------------
Neither party shall be liable for failure to perform as required by
any provision of this AGREEMENT where such failure results from a force majeure
beyond such party's control. In the event of any delay attributable to a force
majeure, the time for performance affected thereby shall be extended for a
period equal to the time lost by reason of the delay. If, as a result of a force
majeure, K-A is unable to manufacture LICENSED PRODUCTS, then, for the purposes
of this AGREEMENT and strictly in accordance with the provisions of Paragraphs
2.01 and 2.02 of this AGREEMENT, ORTHO shall have the right, but not the
obligation, to manufacture said LICENSED PRODUCTS and K-A shall provide to ORTHO
any assistance, information and/or know-how required by ORTHO to manufacture
such LICENSED PRODUCTS.
-39-
10.18 INDEMNITY
---------
Each party to this AGREEMENT shall be responsible for its own acts
relating to the manufacture and use of LICENSED PRODUCTS and neither shall
indemnify the other for costs, expenses, liability, damages and claims for any
injury or death to persons or damage to or destruction of property or other loss
arising out of or in connection with any LICENSED PRODUCTS made or used by
either party.
10.19 PUBLICITY AND DISCLOSURE
------------------------
In the absence of specific agreement between the parties, neither
party shall originate any publicity, news release or other public announcement,
written or oral, whether to the public press, to stockholders or otherwise,
relating to this AGREEMENT, to any amendment hereto as to performance hereunder,
save only such announcement as in the opinion of legal counsel to the party
making such announcement is required by law or practice to be made. The party
making any such announcement shall give the other party an opportunity to review
the form of the announcement before it is made. Routine reference to this
AGREEMENT and the arrangements hereunder without undue frequency and without
emphasis shall be allowed in the usual course of business provided that notice
of such use is given to the other party. If, in the opinion of ORTHO, excessive
use occurs, such reference shall be discontinued after discussion among the
parties.
-40-
10.20 COSTS AND EXPENSES
------------------
K-A and ORTHO shall each bear and pay for their respective costs and
expenses regarding the negotiation and preparation of this AGREEMENT and all
documents, instruments and agreements related thereto.
10.21 EXPORT CONTROL LAWS
-------------------
10.21.1 The parties hereby agree that any Technical Data (as that
term is defined in Section 379.1 of the U.S. Export Administration Regulations)
exported from the United States pursuant to this AGREEMENT and any other related
agreements, and any direct product thereof, shall not be shipped, either
directly or indirectly, to Afghanistan or any Group P, Q, S, W, Y or Z Countries
(as specified in Supplement No. 1 to part 370 of the Export Administration
Regulations), unless (i) separate specific authorization to reexport such
Technical Data or such direct products is provided by the U.S. Office of Export
Administration or (ii) such specific authorization is not required pursuant to
part 379.8 of the U.S. Export Administration Regulations. The parties further
agree that the export and reexport of commodities pursuant to this AGREEMENT and
any other related agreements shall be subject to the licensing requirements of
the U.S. Export Regulations.
-41-
10.21.2 In the event that a specific authorization of, or a
validated license from, a government other than that of the exporting party is
required, K-A and ORTHO each agree that the party within the jurisdiction of
such other government shall, upon the request of the party proposing to make
the export, use reasonable efforts to obtain, as expeditiously as applicable,
the requisite authorization or license.
IN WITNESS WHEREOF, the undersigned have caused this AGREEMENT to be
executed by their duly authorized representatives in the manner legally binding
upon them on the first date written above.
KIRIN-AMGEN INC.
a California Corporation
/s/ Robert D. Weist By /s/ George B. Rathmann
-------------------------- --------------------------------
Witness George B. Rathmann, President
ORTHO PHARMACEUTICAL CORPORATION
a New Jersey corporation
/s/ Dennis N. Longstreet By /s/ Gary V. Parlin
-------------------------- --------------------------------
Witness Gary V. Parlin, President
-42-
EXHIBIT A
---------
DESCRIPTION OF ERYTHROPOIETIN
-----------------------------
The chemical structure of r-HuEPO is best described by its amino acid
sequence which is depicted below:
NH\\2\\ - ala pro pro arg leu ile cys asp ser arg val leu glu arg try
Y*
leu leu glu ala lys glu ala glu asn ile thr thr gly cys ala
Y
glu his cys ser leu asn glu asn ile thr val pro asp thr lys
val asn phe tyr ala trp lys arg met glu val gly gln gln ala
val glu val trp gln gly leu ala leu leu ser glu ala val leu
Y
arg gly gln ala leu leu val asn ser ser gln pro trp glu pro
leu gln leu his val asp lys ala val ser gly leu arg ser leu
thr thr leu leu arg ala leu gly ala gln lys glu ala ile ser
pro pro asp ala ala ser ala ala pro leu arg thr ile thr ala
asp thr phe arg lys leu phe arg val tyr ser asn phe leu arg
gly lys leu lys leu tyr thr gly glu ala cys arg thr gly asp
arg - COOH
* 'Y' designates N-linked glycosalation site.
Exhibit B
---------
ERYTHROPOIETIN (Page 1)
--------------
Docket No. Inventor(s) Title Country S.N. Filing Date
- ---------- ---------- ------------------------ -------- ----------- ------------
155 F. Lin Recombinant Methods and U.S. 561,024 12/13/83
Materials Applied to Micro-
bial Expression of Erythro-
poietin
155-CIP-1 F. Lin Recombinant Methods and U.S. 582,185 2/21/84
Materials Applied to Micro-
bial Expression of Erythro-
poietin
155-CIP-2 F. Lin Recombinant Methods and U.S. 655,841 9/28/84
Materials Applied to Micro-
bial Expression of Erythro-
poietin
155-CIP-3 F. Lin Production of Erythropoietin U.S. 675,298 11/30/84
Australia Via PCT US84/
02021 12/11/84
China 85106196 6/19/85
Canada 469,938 12/12/84
Czechoslovakia PV 4438-85 6/18/85
EPO designating 84308654.7 12/12/84
Austria
Belgium
France
Germany
Italy
Luxembourg
Netherlands
Sweden
Switzerland
Lichtenstein
United Kingdom
* Information not yet available.
Exhibit B
---------
ERYTHROPOIETIN (Page 2)
- --------------
Docket No. Inventor(s) Title Country S.N. Filing Date
---------- ---------- ----------- ----------- -------------- -----------
Finland 852,377 6/14/85
Denmark via PCT US84/
0201 12/11/84
E. Germany G/277534-2 6/19/85
Greece * *
Hungary 2404/85 6/18/85
Israel 73785 12/11/84
Japan Via PCT US84/
02021 12/11/84
Korea 7923/1984 12/13/84
New Zealand 201,501 12/10/84
Portugal * *
South Africa 84/9625 12/11/84
Spain 538,519 12/12/84
USSR 3917560/04 6/19/85
* Information not yet available.
Exhibit B
---------
ERYTHROPOIETIN (Page 3)
- --------------
Docket No. Inventor(s) Title Country S.N. Filing Date
- ---------- ---------- ---------------------------- ---------- ------------- ------------
132 J. Egrie ATCC HB8209 - Its Monoclonal U.S. 463,724 2/4/83
Antibody to Erythropoietin
ATCC HB8209/Budapest
Canada 446,767 2/3/84
Israel 71001 2/17/84
Japan Via PCT US84/
00151 2/3/84
EPO designating 84/300693.3 2/3/84
Austria
Belgium
France
Germany
Italy
Luxembourg
Netherlands
Sweden
Switzerland
Liechtenstein
United Kingdom
190 P. Lai Protein Purification U.S. 747,119 6/20/85
T. Strickland
* Information not yet available.