EXHIBIT 10.65
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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENTS HAVE
BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION
LICENSE AGREEMENT
by and between
ATLANTIC TECHNOLOGY VENTURES, INC.
and
INDEVUS PHARMACEUTICALS, INC
dated
June 28, 2002
THIS LICENSE AGREEMENT effective as of June 28, 2002 ("Effective
Date"), by and between ATLANTIC TECHNOLOGY VENTURES, INC., a corporation
organized and existing under the laws of the State of Delaware and having its
principal office at 350 Fifth Avenue, Suite 5507, New York, New York 10118
("ATLANTIC") and INDEVUS PHARMACEUTICALS INC., a corporation organized and
existing under the laws of the State of Delaware and having its principal office
at 99 Hayden Avenue, Suite 200, Lexington, Massachusetts 02421, United States
("INDEVUS").
W I T N E S S E T H:
WHEREAS, ATLANTIC has exclusively licensed from Sumner Burstein certain
of the Patent Assets pursuant to the Burstein License and is the owner of other
ATLANTIC Intellectual Property, all as defined herein and;
WHEREAS, INDEVUS desires to obtain exclusive license rights, with a
right to grant sublicenses, under the ATLANTIC Intellectual Property, and
ATLANTIC desires to grant such license to INDEVUS, upon the terms and conditions
set forth herein; and
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless specifically set forth to the contrary herein, the following
terms, where used in the singular or plural, shall have the respective meanings
set forth below:
1.1 "Act" shall mean the Federal Food Drug and Cosmetic Act of 1934, and
the rules and regulations promulgated thereunder, or any successor act,
as the same shall be in effect from time to time.
1.2 "Affiliate" shall mean (i) any corporation or business entity of which
more than fifty percent (50%) of the securities or other ownership
interests representing the equity, the voting stock or general
partnership interest are owned, controlled or held, directly or
indirectly, by a Party; (ii) any corporation or business entity which,
directly or indirectly, owns, controls or holds more than fifty percent
(50%) (or the maximum ownership interest permitted by law) of the
securities or other ownership interests representing the equity, voting
stock or general partnership interest of a Party or (iii) any
corporation or business entity of which a Party has the right to
acquire, directly or indirectly, at least fifty percent (50%) of the
securities or other ownership interests representing the equity, voting
stock or general partnership interest thereof.
1.3 "ATLANTIC Intellectual Property" shall mean the Patent Assets and
ATLANTIC Know-How.
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1.4 "ATLANTIC Know-How" shall mean all information and materials, including
but not limited to, discoveries, information, Improvements, processes,
formulas, data, inventions, know-how and trade secrets, patentable or
otherwise, which
(a) relate to Compound or Product; and
(b) are owned by ATLANTIC or are in ATLANTIC's possession
or control, have been licensed by ATLANTIC from
Burstein or are otherwise subject to the Burstein
License and/or as to which ATLANTIC has the right to
license or sublicense to Third Parties.
Such know-how shall include, without limitation, all chemical,
pharmaceutical, toxicological, preclinical, clinical, assay
control, regulatory, and any other information used or useful
for the development, manufacturing and/or regulatory approval
of Compound or Product, including such rights which ATLANTIC
may have to information developed by Third Parties and
including any data included in or generated as a result of or
under an IND or the Hannover Trial.
1.5 "Business Day(s)" means any day that is not a Saturday or a Sunday or a
day on which the New York Stock Exchange is closed.
1.6 "Burstein License" shall mean the License Agreement dated as of March
28, 1994, by and between Sumner Burstein ("Burstein") and Channel
Pharmaceuticals, Inc., a wholly-owned subsidiary of ATLANTIC, as
amended to date, a complete copy of which is attached hereto as Exhibit
1.6.
1.7 "Calendar Quarter" shall mean the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30
and December 31.
1.8 "Calendar Year" shall mean each successive period of twelve (12) months
commencing on January 1 and ending on December 31.
1.9 "cGMP" shall mean current applicable good manufacturing practices as
defined in regulations promulgated by the FDA under the Act relating to
the formulation, manufacture, testing prior to delivery, storage and
delivery of the Product.
1.10 "Centralized Procedure" shall mean the European Community Centralized
Procedure for marketing authorization in accordance with Council
Regulation EEC (2309-93) or any successor regulations.
1.11 "CFR" shall mean the United States Code of Federal Regulations.
1.12 "Compound" shall mean the chemical compounds known as (3R, 4R) Delta
6-Tetrahydrocannabinol-7-oic Acids, including the compound designated
CT-3 as diagrammed on Schedule 1.12 hereto, and any other compounds
disclosed or covered in the Patent Assets and any derivative, homolog,
or analog of any of the foregoing, and any isomer, salt, hydrate,
solvate, amide, ester, metabolite, or prodrug of any of the foregoing.
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1.13 "Effective Date" shall mean the date first above written.
1.14 "End of Phase 2 Meeting" shall mean the first end of Phase 2 meeting
with the FDA, as defined in 21 CFR Section 312.47, intended to
determine the safety of proceeding to Phase 3, evaluate the Phase 3
plan and protocols and identify any additional information necessary to
support an NDA for Product.
1.15 "Europe" shall mean the United Kingdom, France, Germany, Spain and
Italy.
1.16 "FDA" shall mean the United States Food and Drug Administration and any
successor agency having substantially the same functions, and any
corresponding or successor regulatory authority in Europe or having
jurisdiction over the Centralized Procedure if the context so
indicates.
1.17 "First Commercial Sale" shall mean the first sale of Product in any
country by INDEVUS, its Affiliate or its sublicensee(s), for end use or
consumption, after all required Regulatory Approvals have been granted
by the governing health authority of such country.
1.18 "GAAP" means generally accepted accounting principles in the United
States.
1.19 "Hannover Trial" shall mean the ongoing Phase 1 /2 Clinical Trial being
conducted at Medizinische Hochscule Hannover (the University of
Hannover Medical School in Hannover, Germany) pursuant to a Clinical
Trials Agreement dated February 14, 2002.
1.20 "Improvement" shall mean any and all improvements and enhancements,
patentable or otherwise, related to the Compound or Product including,
without limitation, in the manufacture, formulation, ingredients,
preparation, presentation, means of delivery or administration, dosage,
indication, use or packaging of Compound or Product.
1.21 "IND" shall mean an investigational new drug application and any
amendments thereto relating to the use of Compound or Product in the
United States or the equivalent application in any other regulatory
jurisdiction in the Territory, the filing of which is necessary to
commence clinical testing of pharmaceutical products in humans,
including IND number [*].
1.22 "NDA" shall mean a new drug application filed with the FDA for
marketing authorization of a Product in the United States, or a
corresponding submission in Europe or under the Centralized Procedure
or with the Japanese Ministry of Health, Labour and Welfare if the
context so indicates, and any amendments and supplements thereto.
1.23 "Net Sales" shall mean the actual gross amount invoiced by INDEVUS or
its Affiliates for commercial sales of Product in the Territory,
commencing upon the date of First Commercial Sale, after deducting, in
accordance with GAAP, the following :
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(i) trade, cash and quantity discounts;
(ii) recalls, credits and allowances on account
of returned or rejected Product, including
allowance for breakage or spoilage;
(iii) rebates and chargebacks;
(iv) retroactive price reductions;
(v) sales or excise taxes, VAT or other taxes,
and transportation and insurance charges and
additional special transportation, custom
duties, and other governmental charges;
(vi) rebates or similar payments paid in
connection with sales of Product to any
governmental or regulatory authority in
respect of any state or federal Medicare,
Medicaid or similar programs in any country
of the Territory; and
(vii) write-offs for bad debts or allowances.
Sales or other transfers between INDEVUS and
its Affiliates shall be excluded from the
computation of Net Sales and no payments
will be payable on such sales or transfers
except where such Affiliates are end users,
but Net Sales shall include the subsequent
sales to Third Parties by such Affiliates.
1.24 "Party" shall mean ATLANTIC or INDEVUS.
1.25 "Patent Assets" shall mean the United States patents and patent
applications which as of the Effective Date or at any time during the
term of this Agreement
(a) are owned by ATLANTIC or which ATLANTIC through the
Burstein License or any other license or otherwise
has or acquires rights from a Third Party, and
(b) relate to Compound, Product or any Improvement,
including but not limited to methods of their
development, manufacture, or use, or otherwise relate
to ATLANTIC Know-How,
including all certificates of invention and applications for
certificates of invention, substitutions, divisions,
continuations, continuations-in-part, patents issuing thereon
or reissues or reexaminations thereof and any and all foreign
patents and patent applications corresponding thereto,
supplementary protection certificates or the like of any such
patents and current and future patent applications, including
but not limited to the patents and patent applications listed
on Schedule 1.25 hereto and the patents and patent
applications included in the definition of Patent Rights under
the Burstein License, and any counterparts thereof which have
been or may be filed in other countries.
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1.26 "Phase 2 Clinical Trial" shall mean the first clinical trial of Product
in patients with a particular medical indication that is designed to
show safety and efficacy of Product for its intended use.
1.27 "Phase 3 Clinical Trial" means a clinical trial conducted after an End
of Phase 2 Meeting and conducted on a sufficient number of patients
that is designed to establish that Product is safe and efficacious for
its intended use, and to define warnings, precautions and adverse
reactions that are associated with Product in the dosage range to be
prescribed, and supporting marketing authorization of such
pharmaceutical product or label expansion of Product.
1.28 "Product" shall mean any product in final form for commercial sale by
prescription, over-the-counter, or by any other method (or, where the
context so indicates, the product being tested in clinical trials),
which contains Compound as at least one of the therapeutically active
ingredients in all dosage forms and package configurations for any
indication.
1.29 "Proprietary Information" shall mean any and all scientific, clinical,
regulatory, marketing, financial and commercial information or data,
whether communicated in writing, orally or by any other means, which is
owned and under the protection of one Party and is being provided by
that Party to the other Party in connection with this Agreement.
1.30 "Regulatory Approval" means all approvals (including pricing and
reimbursement approvals required for marketing authorization), product
and/or establishment licenses, registrations or authorizations of all
regional, federal, state or local regulatory agencies, departments,
bureaus or other governmental entities, necessary for the manufacture,
use, storage, import, export, transport and sale of Product in a
regulatory jurisdiction.
1.31 "Royalty Year" shall mean each successive twelve (12) month period
commencing with the first day of the first month in which occurs the
First Commercial Sale.
1.32 "Sublicense Non-Royalty Payments" shall mean any payments received by
INDEVUS from sublicensees of rights granted by ATLANTIC to INDEVUS
under Section 2.1 of this Agreement, as consideration for the grant of
such sublicense, including without limitation, license fees, milestone
payments and license maintenance fees, but excluding amounts received
by INDEVUS (i) as Sublicense Royalty Payments; (ii) in connection with
or as a result of amounts or payments to fund or reimburse INDEVUS'
research and development in connection with Compound or Product or
(iii) in connection with or as a result of amounts or payments made as
consideration for a sublicensee's purchase of securities of INDEVUS.
1.33 "Sublicense Royalty Payments" shall mean royalty payments received by
INDEVUS from sublicensees of rights granted by ATLANTIC to INDEVUS
under Section 2.1 of this Agreement, as consideration for the grant of
such sublicensee, based on net sales of Product by such sublicensee.
1.34 "Territory" shall mean all of the countries in the world.
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1.35 "Third Party(ies)" shall mean a person or entity who or which is
neither a Party nor an Affiliate of a Party.
1.36 "Valid Claim" means a claim of an issued and unexpired patent included
within the Patent Assets, which has not been revoked or held
unenforceable or invalid by a decision of a court or other governmental
agency of competent jurisdiction, and which has not been disclaimed or
surrendered through reissue or disclaimer.
ARTICLE II
LICENSE; SUBLICENSES
2.1 License Grant. ATLANTIC hereby grants to INDEVUS an exclusive (even as
to ATLANTIC) license under the Patent Assets and the ATLANTIC Know-How,
including the right to grant sublicenses, to develop, make, have made,
use, import, offer for sale, market, commercialize, distribute and sell
and otherwise dispose of Compound and Product for all uses in the
Territory.
2.2 Improvements by INDEVUS. All rights and title to and interest in any
Improvement developed or discovered by INDEVUS in connection with the
license granted under Section 2.1 above or INDEVUS' activities
hereunder shall be vested solely in INDEVUS.
2.3 Sublicenses. INDEVUS shall have the right to grant sublicenses to
Affiliates or any Third Party to develop, make, have made, use, import,
offer for sale, market, commercialize, distribute and sell and
otherwise dispose of Compound or Product in the Territory; provided,
however that any such sublicense shall be consistent with the terms of
this Agreement. In the event that INDEVUS proposes to grant a
sublicense to any Third Party, INDEVUS shall give ATLANTIC a written
notice prior to entering into the sublicense describing the proposed
sublicense, including the specific rights proposed to be sublicensed
and the material commercial and professional terms of the proposed
sublicense. INDEVUS shall also provide ATLANTIC with a copy of any
sublicense agreements. Upon any termination of this Agreement pursuant
to Section 8.3.1 (a) by ATLANTIC for an uncured material breach by
INDEVUS, ATLANTIC may elect to have any existing sublicense
agreement(s) survive and assigned by INDEVUS to ATLANTIC provided that
(i) the sublicensee is not in breach of its sublicense agreement at the
time of such termination of this Agreement, and (ii) any sublicensee
who desires its sublicense to survive shall promptly agree in writing
to be bound by the applicable terms of and assume all obligations of
INDEVUS under this Agreement. In the event of a sublicense by INDEVUS
to a Third Party, the provisions of Section 5.3.2 of this Agreement
shall be applicable.
ARTICLE III
DEVELOPMENT AND COMMERCIALIZATION
3.1 Exchange of Information. Within ten (10) days after execution of this
Agreement, ATLANTIC shall disclose to INDEVUS in English and in writing
all ATLANTIC Intellectual Property not previously available or made
available to INDEVUS in
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electronic format, where available, and hard copies (or, upon INDEVUS'
request, originals). Throughout the term of this Agreement, and in
addition to the other communications required under this Agreement,
ATLANTIC shall also promptly disclose to INDEVUS in English and in
writing on an ongoing basis all ATLANTIC Intellectual Property, and any
and all additions or revisions thereto. In particular, ATLANTIC shall
disclose to INDEVUS in writing within two Business Days of its receipt
of any data or results of the Hannover Trial.
3.2 Diligence; Development and Commercialization. INDEVUS shall use
commercially reasonable efforts to develop and commercialize Product.
As used herein, "commercially reasonable efforts" shall mean efforts
and resources normally used by INDEVUS for a product owned by it or to
which it has exclusive rights, which is of similar market potential at
a similar stage in its development or product life, taking into account
issues of safety and efficacy, product profile, the competitiveness of
the marketplace, the proprietary position of the compound or product,
the regulatory and reimbursement structure involved, the profitability
of the applicable products, and other relevant factors. The obligations
set forth in this Section 3.2 are expressly conditioned upon the
absence of any serious adverse conditions or event relating to the
safety or efficacy of Compound or Product including the absence of any
action by any regulatory authority limiting the development or
commercialization of Compound or Product.
3.3 Reports.
3.3.1 INDEVUS shall provide ATLANTIC with an annual written report
summarizing the status of INDEVUS's clinical development and
regulatory activities with respect to Compound and Product,
with the delivery to ATLANTIC of the summary of the annual
report to an IND submitted by INDEVUS to the FDA in connection
with a clinical trial of Product to be in satisfaction of the
foregoing requirement In addition, within two (2) Business
Days prior to the anticipated filing of INDEVUS' Annual Report
on Form 10-K ("Form 10-K) with the Securities and Exchange
Commission ("SEC"), INDEVUS shall provide ATLANTIC with a
draft copy of the portion of such Form 10-K that discloses the
status of INDEVUS clinical development and regulatory
activities with respect to Compound and Product. ATLANTIC
shall designate an appropriate representative of ATLANTIC to
receive such reports and to coordinate further correspondence
between the Parties. ATLANTIC's initial designee shall be
notified to INDEVUS in writing.
3.3.2 Any disclosures of such progress and results in any of the
foregoing reports or draft reports shall be deemed Proprietary
Information of INDEVUS.
3.4 Regulatory Matters.
(a) INDEVUS shall own, control and retain primary legal
responsibility for the preparation, filing and
prosecution of all filings and regulatory
applications required to obtain authorization to
commercially develop, sell and use Product in the
Territory. INDEVUS shall promptly notify
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ATLANTIC upon the receipt of Regulatory Approvals and
of the date of First Commercial Sale.
(b) ATLANTIC shall transfer to INDEVUS as soon as
practicable after the Effective Date any IND or other
regulatory filings relating to Compound or Product
owned or controlled by ATLANTIC, and ATLANTIC shall
allow INDEVUS to cross reference any other IND or
Drug Master File relating to Compound or Product.
Upon INDEVUS' request, ATLANTIC shall consult and
cooperate with INDEVUS in connection with obtaining
regulatory approval of Product.
3.5 Trademark. INDEVUS shall select, own and maintain trademarks for
Product in the Territory.
3.6 Product Inventory. Effective as of the Effective Date, all right, title
and interest in ATLANTIC's entire current inventory of Product or
Compound (excluding that being used in the Hannover Trial) (the
"Product Inventory"), which ATLANTIC represents consists of 30.5 grams
of Product currently held at [*] shall be transferred to INDEVUS and
shall remain at [*] in the name of and for the account of INDEVUS.
ATLANTIC represents and warrants that the manufacture, testing,
delivery and storage of Product Inventory was and is in compliance with
cGMP and all other applicable laws and regulations.
3.7 Agreements. Attached hereto as Exhibit 3.7 is a list of all contracts,
agreements and other arrangements between ATLANTIC and any and all
Third Parties relating to the research, development or
commercialization of the Compound or Product (other than the Burstein
License which is attached as Exhibit 1.6). ATLANTIC shall promptly (and
in no event later than five days after a request from INDEVUS) assign
to INDEVUS those contracts and agreements listed in Exhibit 3.7 which
INDEVUS shall specifically request, and ATLANTIC shall terminate such
other contracts, agreements or other arrangements, with any costs,
expenses or liability associated with such contracts, agreements or
other arrangements or the termination thereof, to be the sole
responsibility of ATLANTIC. With the exception of obligations under
Agreements specifically assigned to INDEVUS pursuant to this Section
3.7, INDEVUS shall not be responsible for any contractual obligations
relating to Compound or Product incurred by ATLANTIC.
ARTICLE IV
CONFIDENTIALITY AND PUBLICITY
4.1 Non-Disclosure and Non-Use Obligations. All Proprietary Information
disclosed by one Party to the other Party hereunder shall be maintained
in confidence and shall not be disclosed to any Third Party or used for
any purpose except as expressly permitted herein without the prior
written consent of the Party that disclosed the Proprietary Information
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to the other Party during the term of this Agreement and for a period
of five years thereafter. The foregoing non-disclosure and non-use
obligations shall not apply to the extent that such Proprietary
Information:
(a) is known by the receiving Party at the time of its
receipt, and not through a prior disclosure by the
disclosing Party, as documented by business records;
(b) is or becomes properly in the public domain or
knowledge;
(c) is subsequently disclosed to a receiving Party by a
Third Party who may lawfully do so and is not under
an obligation of confidentiality to the disclosing
Party; or
(d) is developed by the receiving Party independently of
Proprietary Information received from the other
Party, as documented by research and development
records.
4.2 Permitted Disclosure of Proprietary Information. Notwithstanding
Section 4.1, a Party receiving Proprietary Information of another Party
may disclose such Proprietary Information:
(a) to governmental or other regulatory agencies in order
to obtain patents pursuant to this Agreement, or to
gain approval to conduct clinical trials or to market
Product, but such disclosure may be only to the
extent reasonably necessary to obtain such patents or
authorizations;
(b) by each of INDEVUS or ATLANTIC to its respective
agents, consultants, Affiliates, INDEVUS'
sublicensees and/or other Third Parties for the
research and development, manufacturing and/or
marketing of the Compound and/or Product (or for such
parties to determine their interests in performing
such activities) on the condition that such Third
Parties agree to be bound by the confidentiality
obligations consistent with this Agreement; or
(c) if required to be disclosed by law or court order,
provided that notice is promptly delivered to the
non-disclosing Party in order to provide an
opportunity to challenge or limit the disclosure
obligations; provided, however, without limiting any
of the foregoing, it is understood that the Parties
or their Affiliates may make disclosure of this
Agreement and the terms hereof in any filings
required by the SEC, may file this Agreement as an
exhibit to any filing with the SEC and may distribute
any such filing in the ordinary course of its
business, provided, however, that to the maximum
extent allowable by SEC rules and regulations, the
Parties shall be obligated to maintain the
confidentiality obligations set forth herein and
shall redact any confidential information set forth
in such filings..
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(d) Upon execution of this Agreement, either Party may
issue a press release in the form to be attached as
Exhibit 4.2.
4.3 Publication In the event ATLANTIC or any Affiliate of or consultant to
ATLANTIC wishes to make a publication relating to Compound or Product,
it shall deliver to INDEVUS a copy of the proposed publication or an
outline of the oral disclosure at least sixty (60) Business Days prior
to submission or presentation, such that any issue of patent protection
can be resolved in accordance with the terms of this Agreement.
ARTICLE V
PAYMENTS; ROYALTIES AND REPORTS
5.1 License and Transfer Fee. In consideration of the rights granted by
ATLANTIC hereunder, INDEVUS shall pay ATLANTIC US $[*] within ten (10)
days after the Effective Date, of which US$[*] shall be deemed a
license fee and US$[*] shall be deemed a transfer fee for the Product
Inventory.
5.2 Milestone Payments. Subject to the terms and conditions contained in
this Agreement, and in further consideration of the rights granted by
ATLANTIC hereunder, INDEVUS shall pay ATLANTIC the following milestone
payments, contingent upon occurrence of the specified event, with each
milestone payment to be made no more than once with respect to the
achievement of such milestone (but payable the first time such
milestone is achieved) for Compound or Product, as applicable:
(a) US [*] upon completion of a Phase 2 Clinical Trial,
the results of which meet or exceed the primary
clinical efficacy endpoints and safety outcome
measurements outlined in the Clinical Trial protocol;
(b) US $[*] upon the commencement (first dosing of the
first patient) of the first Phase 3 Clinical Trial;
(c) US $[*] upon the commencement (first dosing of the
first patient) of the second Phase 3 Clinical Trial;
(d) US $[*] upon the FDA's first acceptance for filing of
an NDA;
(e) US $[*] upon the first acceptance for filing of an
NDA under the Centralized Procedure or in Europe;
(f) US $[*] upon receipt of first written Regulatory
Approval for marketing in the United States by the
FDA;
(g) US $[*] upon receipt of written Regulatory Approval
for marketing each of the second and third
indications in the United States by the FDA;
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(h) US $[*] upon receipt of written Regulatory Approval
in Europe, provided that in the event the approval is
granted in less than all of the countries listed in
the definition of "Europe", INDEVUS shall pay an
amount equal to US $[*] multiplied by the number of
countries in Europe in which such approval is
granted;
(i) US $[*] upon receipt of written Regulatory Approval
by the Ministry of Health, Labour and Welfare (or any
successor agency having substantially the same
functions) in Japan; and
(j) US $[*] upon the achievement of cumulative Net Sales
of US $[*].
INDEVUS shall notify ATLANTIC in writing within thirty (30)
days after the achievement of each milestone (ninety (90) days
for milestone (j)), and such notice shall be accompanied by
the appropriate milestone payment. An amount equal to (i) [*]
of milestone payments made under Section 5.2 (f), (g) (h)
and/or (i) (the "Approval Milestone Payments") shall be
creditable against any amounts otherwise payable to ATLANTIC
under Section 5.3.1 or 5.3.2 (b) of this Agreement and (ii)
[*] of any payments made under Section 5.1 and 5.2 of this
Agreement shall be creditable against any amounts otherwise
payable under Section 5.3.2 (a) of this Agreement. Except as
specifically set forth in this Section 5.2, the payments
described in this Section 5.2 shall be payable only upon the
initial achievement of each milestone, and no amounts shall be
due hereunder for any subsequent or repeated achievement of
such milestones, regardless of the number of Products for
which such milestone may be achieved.
5.3 Royalties and Other Payments.
5.3.1 Royalties Payable By INDEVUS.
(i) Subject to the terms and conditions of this
Agreement, and in further consideration of
the rights granted by ATLANTIC hereunder,
INDEVUS shall pay to ATLANTIC royalties in
an amount equal to [*] of Net Sales in each
Royalty Year by INDEVUS or its Affiliates in
the United States if the manufacture, use or
sale of such Product would, absent the
license granted hereunder, infringe one or
more Valid Claims of the Patent Assets in
the United States.
(ii) Subject to the terms and conditions of this
Agreement, and in further consideration of
the rights granted by ATLANTIC hereunder,
INDEVUS shall pay to ATLANTIC royalties
equal to [*] of Net Sales in each Royalty
Year by INDEVUS or its Affiliates in each
country in the Territory other than the
United States where the manufacture, use or
sale of such Product would,
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absent the license granted hereunder,
infringe one or more Valid Claims of the
Patent Assets in such country.
(iii) Royalties on Net Sales at the rates set
forth in (i) and (ii) above shall accrue as
of the date of First Commercial Sale of
Product in the applicable country and shall
continue and accrue on Net Sales on a
country-by-country basis until the
expiration of the last to expire Patent
Asset in such country. Thereafter, INDEVUS
shall be relieved of any royalty payment
under this Section 5.3.
(iv) The payment of royalties set forth above
shall be subject to the following
conditions:
(A) only one payment shall be due with
respect to the same unit of
Product;
(B) no royalties shall accrue on the
disposition of Product by INDEVUS,
Affiliates or sublicensees as
samples (promotion or otherwise) or
as donations (for example, to
non-profit institutions or
government agencies) or to clinical
trials; and
(C) ATLANTIC shall be responsible for
payment of any royalties or other
obligations owed by ATLANTIC or
relating to the Patent Assets to
any Third Party, including without
limitation, pursuant to the
Burstein License.
5.3.2 Payments in the Event of Sublicense. In the event INDEVUS
enters into a sublicense with a Third Party or Third Parties
under Section 2.3 of this Agreement, then the following shall
be applicable as of the effective date of the sublicense:
(a) INDEVUS' obligation to pay ATLANTIC any of the
milestone payments set forth in Section 5.2 above
shall terminate and, in lieu thereof, ATLANTIC shall
be entitled to [*] of Sublicense Non-Royalty Payments
received by INDEVUS, net of [*] of any amounts paid
by INDEVUS under Section 5.1 or 5.2 of this Agreement
prior to the effective date of the sublicense; and
(b) INDEVUS'obligation to pay ATLANTIC any royalties
under Section 5.3.1 above shall terminate and, in
lieu thereof, ATLANTIC shall be entitled to [*] of
Sublicense Royalty Payments received by INDEVUS, for
the same period set forth in Section 5.3.1(iii), net
of [*] (not to exceed an aggregate of $[*]) of (i)
any Approval Milestone Payments paid by
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INDEVUS prior to the effective date of the sublicense
and (ii) any amounts paid by INDEVUS under Section
5.3.2 (a) above. .
5.3.3 Affiliate Sales. In the event that INDEVUS transfers Compound
(for conversion to Product) or Product to one of its
Affiliates, there shall be no royalty due at the time of
transfer. Subsequent sales of Product by the Affiliate to end
users such as patients, hospitals, medical institutions,
health plans or funds, wholesalers (which are not
sublicensees), pharmacies or other retailers, shall be
reported as Net Sales hereunder by INDEVUS.
5.3.4 Compulsory Licenses. If a compulsory license is granted to a
Third Party with respect to Product in any country in the
Territory with a royalty rate lower than the royalty rate
provided by Section 5.3.1, then the royalty rate to be paid by
INDEVUS on Net Sales in that country under Section 5.3.1 shall
be reduced to the rate paid by the compulsory Third Party
licensee.
5.3.5 Third Party Licenses. If one or more licenses from a Third
Party or Third Parties are obtained by INDEVUS in order to
develop, make, have made, use, sell or import Compound or
Product in a particular country, any royalties or other
payments paid under such Third Party patent licenses by
INDEVUS in such country for such Calendar Quarter shall be
creditable against the royalty or other payments payable to
ATLANTIC by INDEVUS in such country.
5.3.6 Combination Product. Notwithstanding the provisions of Section
5.3.1, in the event a Product is sold as a combination product
with other biologically active components, Net Sales, for
purposes of royalty payments on the combination product, shall
be calculated by multiplying the Net Sales of that combination
product by the fraction A/B, where A is the gross selling
price of the Product sold separately and B is the gross
selling price of the combination product. If no such separate
sales are made by INDEVUS or its Affiliates, Net Sales for
royalty determination shall be calculated by multiplying Net
Sales of the combination product by the fraction C/(C+D),
where C (excluding the fully allocated cost of the other
biologically active component in question) is the fully
allocated cost of the Compound and D is the fully allocated
cost of such other biologically active components.
5.4 Reports; Payment of Royalty. During the term of the Agreement for so
long as royalty or other payments are due, INDEVUS shall furnish to
ATLANTIC a quarterly written report for the Calendar Quarter showing
the Net Sales of all Products subject to royalty payments sold by
INDEVUS and its Affiliates (or, if sales of Product were made by an
INDEVUS sublicensee, the Sublicense Royalty Payments received from such
sublicensee as a result of such sales) during the reporting period and
the royalties or other payments payable to ATLANTIC under this
Agreement. Reports shall be due on the ninetieth (90th) day following
the close of each Calendar Quarter. Royalties or other payments shown
to have accrued by each royalty report, if any, shall be due and
payable on the date such report is due. INDEVUS shall keep complete and
accurate records in sufficient detail to enable the royalties or other
payments hereunder to be determined.
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5.5 Audits. Upon the written request of ATLANTIC and not more than once in
each Calendar Year, INDEVUS shall permit an independent certified
public accounting firm selected by ATLANTIC and reasonably acceptable
to INDEVUS to have access during normal business hours, upon ten-days
notice to INDEVUS, to such of the records of INDEVUS as may be
reasonably necessary to verify the accuracy of the royalty reports
hereunder for any Royalty Year ending not more than twenty-four (24)
months prior to the date of such request. The accounting firm shall
disclose to ATLANTIC only whether the royalty reports are correct or
incorrect and the specific details concerning any discrepancies.
5.5.1 If such accounting firm concludes that additional royalties
were owed during such Royalty Year, INDEVUS shall pay the
additional royalties within sixty (60) days of the date
ATLANTIC delivers to INDEVUS such accounting firm's written
report so concluding; provided however, that, in the event
that INDEVUS shall not be in agreement with the conclusion of
such report (a) INDEVUS shall not be required to pay such
additional royalties and (b) such matter shall be resolved
pursuant to the provisions of Section 9.5 herein. In the event
such accounting firm or, if the matter is resolved in
accordance with Section 9.5 herein, any arbitration award
concludes that amounts were overpaid by INDEVUS during such
period, ATLANTIC shall repay INDEVUS the amount of such
overpayment within sixty (60) days of the date ATLANTIC
delivers to INDEVUS such accounting firm's written report so
concluding. The fees charged by such accounting firm shall be
paid by ATLANTIC; provided, however, that if an error in favor
of ATLANTIC of more than the greater of (i) [*] or (ii) [*] of
the royalties due hereunder for the period being reviewed is
discovered, then the fees and expenses of the accounting firm
shall be paid by INDEVUS.
5.5.2 Upon the expiration of twenty-four (24) months following the
end of any Royalty Year the calculation of royalties payable
with respect to such year shall be binding and conclusive upon
ATLANTIC, and INDEVUS shall be released from any liability or
accountability with respect to royalties for such year.
5.5.3 ATLANTIC shall treat all financial information subject to
review under this Section 5.5 in accordance with the
confidentiality provisions of this Agreement.
5.6 Payment Exchange Rate. All payments to ATLANTIC under this Agreement
shall be made in United States dollars. In the case of sales outside
the United States, the rate of exchange to be used in computing Net
Sales shall be calculated monthly in accordance with GAAP and based on
the conversion rates published in the Wall Street Journal, Eastern
edition (if available).
5.7 Tax Withholding. If laws, rules or regulations require withholding of
income taxes or other taxes imposed upon payments set forth in this
Article V, ATLANTIC shall provide INDEVUS, prior to any such payment,
once each Royalty Year or more frequently if
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required, with all forms or documentation required by any applicable
taxation laws, treaties or agreements to such withholding or as
necessary to claim a benefit thereunder (including, but not limited to
Form W-8BEN or any successor forms) and INDEVUS shall make such
withholding payments as required and subtract such withholding payments
from the payments set forth in this Article V. INDEVUS will use
commercially reasonable efforts consistent with its usual business
practices and cooperate with ATLANTIC to ensure that any withholding
taxes imposed are reduced as far as possible under the provisions of
the current or any future taxation treaties or agreements between
foreign countries.
5.8 Exchange Controls. Notwithstanding any other provision of this
Agreement, if at any time legal restrictions prevent the prompt
remittance of part or all of the royalties with respect to Net Sales in
any country, payment shall be made through such lawful means or methods
as INDEVUS may determine. When in any country the law or regulations
prohibit both the transmittal and deposit of royalties on sales in such
a country, royalty payments shall be suspended for as long as such
prohibition is in effect (and such suspended payments shall not accrue
interest), and promptly after such prohibition ceases to be in effect,
all royalties or other payments that INDEVUS or its Affiliates would
have been obligated to transmit or deposit, but for the prohibition,
shall be deposited or transmitted, as the case may be, to the extent
allowable (with any interest earned on such suspended royalties which
were placed in an interest-bearing bank account in that country, less
any transactional costs). If the royalty rate specified in this
Agreement should exceed the permissible rate established in any
country, the royalty rate for sales in such country shall be adjusted
to the highest legally permissible or government-approved rate.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 ATLANTIC Representations and Warranties. ATLANTIC represents and
warrants to INDEVUS that as of the Effective Date:
(a) the issued patents included in the Patent Assets are
valid and enforceable over any references or prior
art known to ATLANTIC or its agents, including
Burstein, taken alone or in combination;
(b) this Agreement has been duly executed and delivered
by ATLANTIC and constitutes legal, valid, and binding
obligations enforceable against ATLANTIC in
accordance with its terms, except as enforceability
is limited by (A) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law
affecting creditor's rights generally, or (B) general
principals of equity, whether considered in a
proceeding in equity or at law;
(c) no approval, authorization, consent, or other order
or action of or filing with any court, administrative
agency or other governmental authority is
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required for the execution and delivery by ATLANTIC
of this Agreement or the consummation by ATLANTIC of
the transactions contemplated hereby;
(d) ATLANTIC has the full corporate power and authority
to enter into and deliver this Agreement, to perform
and to grant the licenses granted under Article II
hereof and to consummate the transactions
contemplated hereby; all corporate acts and other
proceedings required to be taken to authorize such
execution, delivery, and consummation have been duly
and properly taken and obtained;
(e) ATLANTIC has not previously assigned, transferred,
conveyed or otherwise encumbered its right, title and
interest in the ATLANTIC Intellectual Property or
entered into any agreement with any Third Party which
is in conflict with the rights granted to INDEVUS
pursuant to this Agreement;
(f) it is the sole owner or exclusive licensee under the
ATLANTIC Intellectual Property, all of which are free
and clear of any liens, charges and encumbrances, no
other person, corporate or other private entity, or
governmental or university entity or subdivision
thereof (including, without limitation, [*]) has any
claim of ownership or rights with respect to the
ATLANTIC Intellectual Property, whatsoever
Notwithstanding the foregoing, with respect only to
(a) U. S. Serial No. [*], (b) International patent
application number [*] and (c) U.S. Serial No. [*],
which are listed in Schedule 1.25 (Patent Assets)
attached hereto, ATLANTIC is an owner of at least an
undivided interest in the invention disclosed and
claimed in (a) and (b), above, and has been granted a
license, with a right to grant a sublicense, by the
United States Government under the United States
Government's ownership rights in (c);
(g) ATLANTIC has disclosed to INDEVUS the complete texts
of all Patent Assets as well as all information
received by ATLANTIC concerning the institution or
possible institution of any interference, opposition,
re-examination, reissue, revocation, nullification,
or any official proceeding involving a Patent Asset,
and that it will continue such disclosure with
respect to new events during the term of the
Agreement;
(h) to the best of ATLANTIC's knowledge, the development,
manufacture, use and sale of Compound and Products
would not infringe any patent rights owned or
possessed by any Third Party;
(i) Schedule 1.25 is a complete and accurate list of all
patents and patent applications in the Territory
relating to Compound or Product owned or
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exclusively licensed by ATLANTIC or to which ATLANTIC
has the right to license;
(j) there are no claims, judgments or settlements against
or owed by ATLANTIC relating to the Patent Assets or
pending or, to the best of ATLANTIC's knowledge,
threatened claims or litigation against ATLANTIC or
Burstein relating to the Patent Assets;
(k) ATLANTIC has disclosed to INDEVUS all relevant
information known by it regarding the ATLANTIC
Intellectual Property reasonably related to the
activities contemplated under this Agreement;
(l) no contract research organization, corporation,
business entity or individual which have been
involved in any studies conducted for the purpose of
obtaining regulatory approvals have been debarred
individuals or entities within the meaning of 21
U.S.C. section 335(a) or (b);
(m) in connection with development of Compound and
Product, ATLANTIC has complied and is complying in
all material respects with applicable U.S. and German
laws and regulations including U.S. good laboratory
practices in its conduct of toxicology studies on
Compound and U.S. good clinical practices in its
conduct of clinical studies on Compound and any
corresponding German regulations in connection with
the Hannover Trial;
(n) attached as Exhibit 1.6 is a true and complete copy
of the Burstein License, including all supplements
thereto and modifications or amendments thereof.
ATLANTIC is not, and to the best of ATLANTIC's
knowledge, Burstein is not, in default under or in
breach of any terms or provisions of the Burstein
License and such agreement is in full force and
effect as of the date hereof. During the term of this
Agreement, ATLANTIC shall not amend, modify,
terminate or cause a default under the Burstein
License, or reject the Burstein License pursuant to
11 U.S.C. ss. 365;
(o) IND number [*] is owned by ATLANTIC free and clear of
any rights of any Third Party and is active, in good
standing and in full force and effect with all
applicable regulatory agencies; and
(p) EXCEPT AS SPECIFICALLY PROVIDED HEREIN, ATLANTIC DOES
NOT MAKE, AND EXPRESSLY DISCLAIMS ANY WARRANTIES,
EITHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, AS TO ANY
MATTER WHATSOEVER, INCLUDING, INCLUDING WITHOUT
LIMITATION ANY EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
CONCERNING THE PATENT ASSETS.
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* Confidential treatment requested.
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6.2 INDEVUS Representations and Warranties. INDEVUS represents and warrants
to ATLANTIC that as of the Effective Date:
(a) this Agreement has been duly executed and delivered
by it and constitutes legal, valid, and binding
obligations enforceable against it in accordance with
its terms;
(b) it has full corporate power and authority to execute
and deliver this Agreement and to consummate the
transactions contemplated hereby. All corporate acts
and other proceedings required to be taken to
authorize such execution, delivery, and consummation
have been duly and properly taken and obtained;
(c) no approval, authorization, consent, or other order
or action of or filing with any court, administrative
agency or other governmental authority is required
for the execution and delivery by it of this
Agreement or the consummation by it of the
transactions contemplated hereby.
ARTICLE VII
PATENT MATTERS
7.1 Filing, Prosecution and Maintenance of Patent Applications or Patents.
INDEVUS shall have the first right to file, prosecute and maintain the
Patent Assets in ATLANTIC's name and shall initially be responsible for
the payment of all patent prosecution and maintenance costs, subject to
the next sentence. INDEVUS shall credit against any milestone payments
payable to ATLANTIC under Section 5.2 of this Agreement and/or under
Section 5.3.2 (a) amounts paid by INDEVUS for patent prosecution and
maintenance costs incurred during the Term of this Agreement in
connection with the filing, prosecution and maintenance of the Patent
Assets. If INDEVUS elects not to file, prosecute or maintain a patent
application or patent included in the Patent Assets in any particular
country, it shall provide ATLANTIC with written advance notice
sufficient to avoid any loss or forfeiture, and ATLANTIC shall have the
right, but not the obligation, at its sole expense, to file, prosecute
or maintain such patent application or patent in such country in
ATLANTIC's name. Thereafter, INDEVUS' royalty obligations related to
that Patent Asset in such country shall terminate and such patent or
patent application in such country shall no longer be deemed a Patent
Asset. Upon INDEVUS' request, ATLANTIC shall reasonably cooperate in
the filing, prosecution or maintenance of any patent application or
patent included in the Patent Assets.
7.2 Patent Office and Court Proceedings. Each Party shall inform the other
Party of any request for, filing, or declaration of any proceeding
before a patent office seeking to protest, oppose, cancel, reexamine,
declare an interference proceeding, initiate a conflicts proceeding, or
analogous process involving a patent application or patent included in
the Patent Assets, or of the filing of an action in a court of
competent jurisdiction seeking a judgment that a patent included in the
Patent Assets is either invalid or unenforceable or both.. Each Party
thereafter shall cooperate fully with the other with respect to any
such
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patent office or court proceeding. Each Party will provide the other
with any information or assistance that is reasonable. Notwithstanding
the foregoing or the provisions of Section 7.3 below, in the event of
any such action or proceeding, ATLANTIC shall indemnify and hold
INDEVUS and its Affiliates harmless from and against any and all
claims, damages, judgments, liabilities, costs and expenses including,
without limitation reasonable litigation costs and legal fees and
expenses, that may be incurred by, levied upon or are payable by
INDEVUS or any of its Affiliates as a result of such action or
proceeding or due to the breach of ATLANTIC's representations and
warranties under Section 6.1 of this Agreement.
7.3 Enforcement and Defense.
(a) Each Party shall promptly give the other Party notice
of any infringement in the Territory of any patent
application or patent included in the Patent Assets
that comes to such Party's attention. The Parties
will thereafter consult and cooperate fully to
determine a course of action, including, without
limitation, the commencement of legal action by any
Party. However, INDEVUS shall have the first right to
initiate and prosecute such legal action at its own
expense and in the name of ATLANTIC and INDEVUS, or
to control the defense of any declaratory judgment
action relating to Patent Assets. INDEVUS shall
promptly inform ATLANTIC if INDEVUS elects not to
exercise such first right, and ATLANTIC thereafter
shall have the right either to initiate and prosecute
such action or to control the defense of such
declaratory judgment action in the name of ATLANTIC
and, if necessary, INDEVUS. In no event shall
ATLANTIC be obligated to enforce or defend any of the
Patent Assets.
(b) If INDEVUS elects not to initiate and prosecute an
infringement or defend a declaratory judgment action
in any country in the Territory as provided in
Subsection 7.3(a), and ATLANTIC elects to do so, the
cost of any agreed-upon course of action, including
the costs of any legal action commenced or any
declaratory judgment action defended, shall be borne
solely by ATLANTIC.
(c) For any such legal action or defense, in the event
that any Party is unable to initiate, prosecute, or
defend such action solely in its own name, the other
Party will join such action voluntarily and will
execute all documents necessary for the Party to
prosecute, defend and maintain such action. In
connection with any such action, the Parties will
cooperate fully and will provide each other with any
information or assistance that either reasonably may
request.
(d) Any recovery obtained by INDEVUS or ATLANTIC shall be
shared as follows:
(i) the Party that initiated and prosecuted, or
maintained the defense of, the action shall
recoup all of its costs and expenses
(including
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reasonable attorneys' fees) incurred in
connection with the action, whether the
recovery is by settlement or otherwise;
(ii) the other Party then shall, to the extent
possible, recover its costs and expenses
(including reasonable attorneys' fees)
incurred in connection with the action;
(iii) if ATLANTIC initiated and prosecuted, or
maintained the defense of, the action, the
amount of any recovery remaining then shall
be retained by ATLANTIC; and
(iv) if INDEVUS initiated and prosecuted, or
maintained the defense of, the action, the
amount of any recovery remaining shall be
retained by INDEVUS, except that ATLANTIC
shall receive a portion equivalent to the
royalties it would have received in
accordance with the terms of this Agreement
if such amount were deemed Net Sales.
(e) ATLANTIC shall inform INDEVUS of any certification
regarding any Patent Assets it has received pursuant
to either 21 U.S.C.ss.ss.355(b)(2)(A)(iv) or
(j)(2)(A)(vii)(IV) or under Canada's Patented
Medicines (Notice of Compliance) Regulations Article
5 and shall provide INDEVUS with a copy of such
certification within five (5) days of receipt.
ATLANTIC's and INDEVUS' rights with respect to the
initiation and prosecution, or defense, of any legal
action as a result of such certification or any
recovery obtained as a result of such legal action
shall be allocated as defined in Subsections 7.3(d)
(i) through (iv); provided, however, that INDEVUS
shall exercise the first right to initiate and
prosecute, or defend, any action and shall inform
ATLANTIC of such decision within fifteen (15) days of
receipt of the certification, after which time, if
INDEVUS has not advised ATLANTIC of its intention to
initiate and prosecute, or defend, such action,
ATLANTIC shall have the right to initiate and
prosecute, or defend, such action.
7.4 Patent Term Extensions or Restorations and Supplemental Protection
Certificates. The Parties shall cooperate with each other in obtaining
patent term extensions or restorations or supplemental protection
certificates or their equivalents in any country in the Territory where
applicable and where desired by INDEVUS. If elections with respect to
obtaining such extension or supplemental protection certificates are to
be made, INDEVUS shall have the right to make the election and ATLANTIC
shall abide by such election. ATLANTIC shall notify INDEVUS of (a) the
issuance of each U.S. patent included within the Patent Assets, giving
the date of issue and patent number for each such patent, and (b) each
notice pertaining to any patent included within the Patent Assets
pursuant to the United States Drug Price Competition and Patent Term
Restoration Act of 1984 (hereinafter called the " 1984 Act"), including
notices pursuant to ss.ss. 101 and 103 of the 1984 Act from persons who
have filed an abbreviated NDA ("ANDA"). Such notices shall be given
promptly, but in any event within five (5) calendar days of each such
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patent's date of issue or receipt of each such notice pursuant to the
Act, whichever is applicable. ATLANTIC shall notify INDEVUS of each
filing for patent term extension or restoration under the 1984 Act, any
allegations of failure to show due diligence and all awards of patent
term restoration (extensions) with respect to the Patent Assets.
Likewise, ATLANTIC shall inform INDEVUS of patent extensions in the
rest of the world regarding Compound or Product.
7.5 Security Interest. Within fifteen (15) days from the Effective Date,
ATLANTIC shall grant to INDEVUS a first priority security interest,
senior to any and all other liens and encumbrances, in all of the
ATLANTIC Patent Assets, whether now owned or hereafter acquired by
ATLANTIC and in all of ATLANTIC'S rights in and to all ATLANTIC Patent
Assets controlled by ATLANTIC (collectively, the "Collateral"). The
grant of the security interest will secure the performance when due of
the obligations of ATLANTIC owed to INDEVUS under this Agreement.
ATLANTIC shall execute and deliver such agreements, instruments,
documents or notices (including without limitation financing statements
or amendments thereto), and take such other actions, as INDEVUS may
reasonably deem necessary in order to perfect, protect and preserve any
lien granted or purported to be granted by such security interest and
to enable INDEVUS to exercise and enforce any of its rights and
remedies hereunder with respect to any Collateral.
ARTICLE VIII
TERM AND TERMINATION
8.1 Term and Expiration. This Agreement shall be effective as of the
Effective Date and unless terminated earlier pursuant to Section 8.2
and 8.3 below, the term of this Agreement shall continue in effect on a
country-by-country basis until the expiration of the last to expire
Patent Asset in such country..
8.2 Termination by Notice. Notwithstanding anything contained herein to the
contrary, INDEVUS shall have the right to terminate this Agreement at
any time by giving thirty (30) days advance written notice to ATLANTIC.
Except as set forth in this Agreement, in the event of such
termination, (i) the rights and obligations hereunder, excluding any
payment obligation that has accrued as of the termination date and
excluding rights and obligations relating to confidentiality, shall
terminate immediately, and (ii) the provisions of Section 8.4 shall be
applicable.
8.3 Termination.
8.3.1 Termination for Cause. Either Party may terminate this
Agreement by notice to the other Party at any time during the
term of this Agreement as follows:
(a) if the other Party is in breach of any material
obligation hereunder by causes and reasons within its
control, or has breached, in any material respect,
any representations or warranties set forth in
Article VI, and has not cured such breach within
ninety (90) days after notice requesting cure of the
breach, provided, however, that if the breach is not
capable of being cured within ninety (90) days of
such written notice, the Agreement may
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not be terminated sooner than one hundred twenty
(120) days of such written notice so long as the
breaching Party commences and is taking commercially
reasonable actions to cure such breach as promptly as
practicable; or
(b) upon the filing or institution of bankruptcy,
reorganization, liquidation or receivership
proceedings, or upon an assignment of a substantial
portion of the assets for the benefit of creditors by
the other Party; provided, however, in the case of
any involuntary bankruptcy, reorganization,
liquidation, receivership or assignment proceeding
such right to terminate shall only become effective
if the Party consents to the involuntary proceeding
or such proceeding is not dismissed within ninety
(90) days after the filing thereof.
8.3.2 Licensee Rights Not Affected.
(a) In the event INDEVUS terminates this Agreement under
Section 8.3.1(b), or this Agreement is otherwise
terminated under Section 8.3.1(b), or ATLANTIC is a
debtor in a bankruptcy proceeding, whether voluntary
or involuntary, all rights and licenses granted
pursuant to this Agreement are, and shall otherwise
be deemed to be, for purposes of Section 365(n) of 11
U.S.C.ss.101 et seq. (the "Bankruptcy Code"),
licenses of rights to "intellectual property" as
defined under Section 101(35A) of the Bankruptcy
Code. The Parties agree that INDEVUS and ATLANTIC
shall retain and may fully exercise all of their
respective rights, remedies and elections under the
Bankruptcy Code. The Parties further agree that, in
the event of the commencement of a bankruptcy
proceeding by or against ATLANTIC under the
Bankruptcy Code, INDEVUS shall be entitled to all
applicable rights under Section 365 of the Bankruptcy
Code, including but not limited to, entitled to a
complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all
embodiments of such intellectual property upon
written request therefor by INDEVUS.
(b) In the event INDEVUS is a debtor in a bankruptcy
proceeding, whether voluntary or involuntary, all
rights and licenses granted pursuant to this
Agreement are, and shall otherwise be deemed to be,
for purposes of Section 365 of the Bankruptcy Code,
executory contracts. The Parties agree that
applicable law does not excuse ATLANTIC from
accepting performance by, or rendering performance
under this Agreement and all rights and licenses
granted hereunder to, a person or entity other than
INDEVUS.
8.4 Effect of Expiration or Termination. Expiration or termination of this
Agreement shall not relieve the Parties of any obligation accruing
prior to such expiration or termination. INDEVUS and its Affiliates and
sublicensees shall have the right to sell or otherwise dispose of the
stock of any Product subject to this Agreement then on hand or in
process
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of manufacture. In addition to any other provisions of this Agreement
which by their terms continue after the expiration of this Agreement,
the provisions of Article IV shall survive the expiration or
termination of this Agreement and shall continue in effect for five (5)
years from the date of expiration or termination. In addition, any
other provision required to interpret and enforce the Parties' rights
and obligations under this Agreement shall also survive, but only to
the extent required for the full observation and performance of this
Agreement. Any expiration or early termination of this Agreement shall
be without prejudice to the rights of any Party against the other
accrued or accruing under this Agreement prior to termination. Except
as expressly set forth herein, the rights to terminate as set forth
herein shall be in addition to all other rights and remedies available
under this Agreement, at law, or in equity, or otherwise. Upon
termination of this Agreement pursuant to Section 8.2 or upon
termination by ATLANTIC pursuant to Section 8.3.1(a), INDEVUS shall, if
requested to do so in writing by ATLANTIC, negotiate a license to
ATLANTIC of know-how relating to the manufacture or sale of Compound or
Product that was developed by INDEVUS during the Term of this Agreement
and is owned and controlled by INDEVUS at the time of termination, on
commercially reasonable terms to be negotiated in good faith between
the Parties.
ARTICLE IX
MISCELLANEOUS
9.1 Force Majeure. Neither Party shall be held liable or responsible to the
other Party nor be deemed to have defaulted under or breached the
Agreement for failure or delay in fulfilling or performing any term of
the Agreement during the period of time when such failure or delay is
caused by or results from causes beyond the reasonable control of the
affected Party including, but not limited to, fire, flood, embargo,
war, acts of war (whether war be declared or not), insurrection, riot,
civil commotion, strike, lockout or other labor disturbance, act of God
or act, omission or delay in acting by any governmental authority or
the other Party. The affected Party shall notify the other Party of
such force majeure circumstances as soon as reasonably practicable.
9.2 Assignment. The Agreement may not be assigned or otherwise transferred
without the prior written consent of the other Party; provided,
however, that either Party may assign this Agreement to an Affiliate or
in connection with the transfer or sale of its business or all or
substantially all of its assets related to Compound or Product or in
the event of a merger, consolidation, change in control or similar
corporate transaction. Any permitted assignee shall assume all
obligations of its assignor under this Agreement.
9.3 Severability. In the event that any of the provisions contained in this
Agreement are held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby,
unless the absence of the invalidated provision(s) adversely affect the
substantive rights of the Parties. In such event, the Parties shall
replace the invalid, illegal or unenforceable provision(s) with valid,
legal and enforceable provision(s) which, insofar as practical,
implement the purposes of this Agreement.
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9.4 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered
personally, sent by facsimile (and promptly confirmed by personal
delivery, registered or certified mail or overnight courier), sent by
nationally-recognized overnight courier or sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to INDEVUS to:
INDEVUS PHARMACEUTICALS, INC.
99 Hayden Avenue, Suite 200
Lexington, MA 02421
Attention: President
Fax No.: 781-862-3859
if to ATLANTIC to:
ATLANTIC TECHNOLOGY VENTURES, INC.
350 Fifth Avenue, Suite 5507
New York, New York 10118
Attention: Chief Executive Officer
Fax No.: 212.267.2159
or to such other address as the Party to whom notice is to be given may have
furnished to the other Parties in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered if personally
delivered or sent by facsimile on a Business Day, upon confirmed delivery by
nationally-recognized overnight courier if so delivered and on the third
Business Day following the date of mailing if sent by registered or certified
mail.
9.5 Applicable Law and Dispute Resolution. The Agreement shall be governed
by and construed in accordance with the laws of the United States of
America and State of New York without reference to any rules of
conflict of laws.
(a) The Parties agree to attempt initially to solve all
claims, disputes, or controversies arising under, out
of, or in connection with this Agreement (a
"Dispute") by conducting good faith negotiations. Any
Disputes which cannot be resolved by good faith
negotiation within twenty (20) Business Days, shall
be referred, by written notice from either Party to
the other, to the Chief Executive Officer of each
Party. Such Chief Executive Officers shall negotiate
in good faith to achieve a resolution of the Dispute
referred to them within twenty (20) Business Days
after such notice is received by the Party to whom
the notice was sent. If the Chief Executive Officers
are unable to settle the Dispute between themselves
within twenty (20) Business Days, they shall so
report to the Parties in writing. The Dispute shall
then be referred to mediation as set forth in the
following subsection (b).
-25-
(b) Upon the Parties receiving the Chief Executive
Officers' report that the Dispute referred to them
pursuant to subsection (a) has not been resolved, the
Dispute shall be referred to mediation by written
notice from either Party to the other. The mediation
shall be conducted pursuant to the American
Arbitration Association ("AAA") procedures. The place
of the mediation shall be New York, New York. If the
Parties have not reached a settlement within twenty
(20) Business Days of the date of the notice of
mediation, the Dispute shall be referred to
arbitration pursuant to subsection (c) below.
(c) If after the procedures set forth in subsections (a)
and (b) above, the Dispute has not been resolved, a
Party shall decide to institute arbitration
proceedings, it shall give written notice to that
effect to the other Party. The Parties shall refrain
from instituting the arbitration proceedings for a
period of sixty (60) days following such notice.
During such period, the Parties shall continue to
make good faith efforts to amicably resolve the
dispute without arbitration. If the Parties have not
reached a settlement during that period the
arbitration proceedings shall go forward and be
governed by the AAA rules then in force. Each such
arbitration shall be conducted by a panel of three
arbitrators: one arbitrator shall be appointed by
each of ATLANTIC and INDEVUS and the third
arbitrator, who shall be the Chairman of the
tribunal, shall be appointed by the two
Party-appointed arbitrators. Any such arbitration
shall be held in New York, New York, USA .
The arbitrators shall have the authority to grant specific performance. Judgment
upon the award so rendered may be entered in any court having jurisdiction or
application may be made to such court for judicial acceptance of any award and
an order of enforcement, as the case may be. In no event shall a demand for
arbitration be made after the date when institution of a legal or equitable
proceeding based on such claim, dispute or other matter in question would be
barred by the applicable statute of limitations. Each Party shall bear its own
costs and expenses incurred in connection with any arbitration proceeding and
the Parties shall equally share the cost of the mediation and arbitration levied
by the AAA.
Any mediation or arbitration proceeding entered into pursuant to this Section
9.5 shall be conducted in the English language. Subject to the foregoing, for
purposes of this Agreement, each Party consents, for itself and its Affiliates,
to the jurisdiction of the courts of the State of New York, county of New York
and the U.S. District Court for the Southern District of New York.
9.6 Entire Agreement. This Agreement, including the exhibits and schedules
hereto and the security interest required by Section 7.5 hereto,
contains the entire understanding of the Parties with respect to the
subject matter hereof and supersedes all previous writings and
understandings. This Agreement may be amended, or any term hereof
modified, only by a written instrument duly executed by all Parties
hereto.
-26-
9.7 Independent Contractors. It is expressly agreed that the Parties shall
be independent contractors and that the relationship between the
Parties shall not constitute a partnership, joint venture or agency.
Neither Party shall have the authority to make any statements,
representations or commitments of any kind, or to take any action,
which shall be binding on the other Party, without the prior consent of
such other Party.
9.8 Waiver. The waiver by a Party hereto of any right hereunder or the
failure to perform or of a breach by another Party shall not be deemed
a waiver of any other right hereunder or of any other breach or failure
by said other Party whether of a similar nature or otherwise.
9.9 Headings. The captions to the several Articles and Sections hereof are
not a part of the Agreement, but are merely guides or labels to assist
in locating and reading the several Articles and Sections hereof.
9.10 Counterparts. The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.11 Use of Names. Except as otherwise provided in this Agreement, neither
Party shall use the name of the other Party in relation to this
transaction in any public announcement, press release or other public
document without the consent of such other Party, which consent shall
not be unreasonably withheld or delayed; provided, however, that either
Party may use the name of the other Party in any document required to
be filed to obtain Regulatory Approval or to comply with applicable
laws, rules or regulations.
9.12 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT
OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.
ATLANTIC TECHNOLOGY VENTURES, INC.
By: /s/ Frederic P. Zotos
-----------------------------------------------------
Name: Frederic P. Zotos, Esq.
Title: President and Chief Executive Officer
INDEVUS PHARMACEUTICALS, INC.
By: /s/ Glenn L. Cooper
-----------------------------------------------------
Name: Glenn L. Cooper, M.D.
Title: President and Chief Executive Officer
-27-
EXHIBIT 1.6
- -----------
[The License Agreement dated March 28, 1994 between Channel Therapeutics, Inc.
and Dr. Sumner Burstein was previously filed as an exhibit to Atlantic's
registration statement on Form SB-2 as filed with the SEC on October 24, 1995,
as amended. Confidential treatment for this agreement was granted by the SEC.]
SCHEDULE 1.12
DIAGRAM OF [CT-3]
[*]
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* CONFIDENTIAL TREATMENT REQUESTED.
SCHEDULE 1.25
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PATENT ASSETS
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Country Filed Serial # Issued Patent # Inventors
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*Application for restoration on file. [**]
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*The British Patent Office has allowed Atlantic's application for restoration, subject to payment of outstanding renewal fees, &
recordation of the exclusive license and licensee's name change. These matters will be taken care of by the July 22, 2002
deadline.
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* CONFIDENTIAL TREATMENT REQUESTED.
EXHIBIT 3.7
LIST OF AGREEMENTS
License Agreements
l. Channel Pharmaceuticals and Dr. Sumner Burstein - March 28th, 1994
Consulting Agreements
1. [*]
2. Channel Pharmaceuticals and Dr. Sumner Burstein - September 27th, 1995
Material Transfer Agreements
1. [*]
2. [*]
3. [*]
4. [*]
5. [*]
6. [*]
7. [*]
8. [*]
9. [*]
10. [*]
Research Service Agreements
1. [*]
2. [*
3. [*]
4. [*]
5. [*]
6. Quintiles Master Service Agreement - January 1998
7. Product Development Proposal - Atlantic Pharmaceuticals and
Pharmaceutics International, Inc. - February 1997
8. [*]
9. [*]
Additional Documents
1. [*]
2. [*]
3. [*]
4. Assignment of Patent Application Serial #[*] and Serial #[*]
- ------------------
* CONFIDENTIAL TREATMENT REQUESTED.
EXHIBIT 4.2
FORM OF PRESS RELEASE
FOR IMMEDIATE RELEASE
Contact:
Michael W. Rogers William B. Boni
Executive Vice President and CFO VP, Corp. Communications
(781) 861-8444 (781) 402-3410
INDEVUS LICENSES WORLDWIDE RIGHTS
TO ANTI-INFLAMMATORY AND ANALGESIC COMPOUND
Company also updates status of other compounds in pipeline
LEXINGTON, MA, July 1, 2002 -- Indevus Pharmaceuticals, Inc. (NASDAQ: IDEV)
today announced that it has licensed exclusive worldwide rights from Atlantic
Technology Ventures, Inc. (OTC BB:ATLC.OB) to CT-3, a novel anti-inflammatory
and analgesic compound currently in clinical development.
CT-3, a new chemical entity also known as ajulemic acid, is a nonpsychoactive
synthetic derivative of tetrahydrocannabinol (THC). The principal mechanism of
action of the compound appears to be the potent inhibition of the inflammatory
cytokines, particularly interleukin-l(beta) and TNF-alpha. The compound has
significant activity in multiple pre-clinical models of pain and inflammation.
Unlike most available nonsteroidal anti-inflammatory agents (NSAIDS), in
pre-clinical studies CT-3 does not appear to produce gastrointestinal
ulceration.
An IND (investigational new drug application) has been filed with the U.S. Food
and Drug Administration (FDA) for CT-3, and an initial Phase I clinical trial
designed to assess the safety of CT-3 showed that it was well tolerated, with no
clinically significant adverse events and no evidence of psychotropic activity.
The compound is currently being studied in Europe in a small Phase II study in
patients with chronic neuropathic pain.
"We are excited about the potential of a novel potent NSAID which lacks the
ulcerogenic effects of traditional compounds," said Glenn L. Cooper, M.D.
chairman, president and chief executive officer of Indevus. "CT-3 has the
potential to be an important new medication for painful inflammatory conditions
such as arthritis, post-operative pain, musculoskeletal injuries, headache and
neuropathic pain. Furthermore, the compound possesses activity in preclinical
models of multiple sclerosis and the cutaneous inflammation associated with
exposure to the chemical warfare blister agent sulfur mustard. The U.S. Army
Medical Research Institute is pursuing further work on this important
application. The overall field of inflammation and pain management is large and
not fully satisfied, and we believe a compound such as CT-3 may have broad
applications in these major markets."
The acquisition of CT-3 by Indevus includes an up-front licensing payment,
development milestones and royalty payments from Indevus to Atlantic. Indevus is
responsible for the clinical
development, regulatory activities and commercialization of this compound. A
director of Indevus is a shareholder of Atlantic Technology Ventures. The
transaction was approved by all of the disinterested directors of Indevus.
Atlantic Technology Ventures is a biopharmaceutical company engaged in the
development of biomedical and pharmaceutical products and related technologies
for use in cancer, infection, ophthalmic disorders, pain and inflammation and
dermatological conditions. Atlantic's strategy is to identify nascent medical
products and technologies that have the potential to address unmet market needs,
rapidly develop these through a definitive proof-of-principle, then parmer,
license or sell them td realize significant revenue.
Status of additional Indevus products
CT-3 is the latest addition to the Indevus product portfolio, which also
includes: trospium, in Phase III for overactive bladder; pagoclone, in Phase III
for panic disorder and Phase II for generalized anxiety disorder; PRO 2000, in
Phase II for the prevention of the sexual transmission of HIV; dersalazine, in
Phase I for inflammatory bowel disease; and citicoline for stroke, which has
completed several Phase III clinical trials.
Trospium
As recently announced, enrollment has been completed in a Phase III, 524-patient
clinical trial with trospium in overactive bladder. The co-primary endpoints of
the trial are the comparisons of the reduction in the frequency of urination and
the reduction in incontinence episodes among trospium-treated patients versus
placebo patients. Data from this trial is expected in the fall, and assuming a
positive outcome, the Company expects to file a New Drug Application for
trospium by the end of 2002. This data will expand the current clinical trial
database for trospium, which comprises over 2200 patients in Europe. European
trials include two double-blind, placebo-controlled dose-ranging studies, five
double-blind, placebo-controlled studies and several comparative trials, one of
which was a long-term comparative 52-week study on safety, tolerability and
efficacy.
Pagoclone
Following the return of exclusive, worldwide rights to pagoclone from Pfizer Inc
on June 7, 2002, Indevus has initiated corporate partnering discussions for this
compound. Decisions regarding the continued clinical development and partnering
of pagoclone for generalized anxiety and panic disorders will be based on
additional analyses of a total data package from six clinical trials and will
include ongoing consultation with Aventis, S.A., licensor of this drug. Aventis
has a contractual right for a period of 90 days from the termination of the
agreement between Pfizer and Indevus to elect to develop pagoclone under the
terms established in that agreement.
Dersalazine
Dersalazine, for inflammatory bowel disease, is undergoing Phase I clinical
testing in the U.K. Plans for future Phase II testing in ulcerative colitis will
be dependent on the successful completion of this trial.
Citicoline
Two important meta-analyses of clinical trials with citicoline presented at the
27th International Stroke Conference in February 2002 suggest that treatment
with this drug may reduce infarct growth after stroke and reduce rates of death
or disability over a long term. The first of these analyses retrospectively
analyzed seven controlled trials enrolling 1,963 patients who received oral or
intravenous citicoline at doses ranging from 500 to 2000 milligrams daily and
showed that treatment with citicoline was associated with a significant
reduction in rates of death or disability at long-term follow-up. On a combined
basis across these trials, 54.6 percent of citicoline patients experienced death
or disability, compared with 66.4 percent of placebo patients, p<0.00001.
The second of these analyses retrospectively analyzed data regarding infarct
growth following stroke from two clinical trials in a total of 214 patients.
Doses of 500 milligrams/day and 2000 milligrams/day were used in these trials.
The mean volume increase in infarct size was 84.7 percent for the placebo group,
34.0 percent for the 500 milligram group and 1.8 percent for the 2,000 milligram
group, p=0.015.
As a result of corporate partnering interest following these findings, Indevus
has signed a non-binding memorandum of agreement with a privately held
biotechnology company to fund the further development of citicoline. The
finalization of this agreement is contingent upon the negotiation of a
definitive contract and agreement on the design and clinical endpoints of an
additional large Phase III trial.
PRO 2000
Government agencies in the U.S. and the U.K. have selected PRO 2000, a topical
microbicide to prevent the sexual transmission of HIV, for testing in large,
logistically complex Phase II and Phase III trials planned to begin in 2002 and
2003. The U.K.'s Department for International Development provided the most
recent financial support for the clinical testing of PRO 2000 through a grant of
approximately $22.7 million made to an international research collaboration.
Indevus Pharmaceuticals is engaged in the development and commercialization of a
portfolio of products and product candidates, including multiple compounds in
latestage clinical development. The Company's lead products under development
include trospium for overactive bladder, pagoclone for panic/anxiety disorders,
PRO 2000 for the prevention of infection by HIV and other sexually transmitted
pathogens, and dersalazine for inflammatory bowel disease.
Except for the descriptions of historical facts contained herein, this press
release contains forward-looking statements that involve risks and uncertainties
that could cause the Company's actual results and financial condition to differ
materially from those anticipated by the forward looking statements. These risks
and uncertainties are set forth in the Company's filings under the Securities
Act of 1933 and the Securities Exchange Act of 1934 under "Risk Factors" and
elsewhere, and include, but are not limited to: uncertainties relating to
clinical trials, including the Phase III trial with trospium; regulatory
approval and commercialization of our products; the early stage of products
under development; need for additional funds and corporate partners; history of
operating losses and expectation of future losses; product liability and
insurance
uncertainties; risks relating to the Redux-related litigation; dependence on
third parties for manufacturing and marketing; competition; risks associated
with contractual arrangements; limited patent and proprietary rights; and other
risks.