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EXHIBIT 10.1
MARKETING AND DISTRIBUTION AGREEMENT
BETWEEN
DEPOTECH CORPORATION
AND
PHARMACIA & UPJOHN S.P.A.
JULY 2, 1997
***Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Mark"). This Exhibit has been filed separately with
the Secretary of the Commission without the Mark pursuant to the Company's
Application Requesting Confidential Treatment under Rule 24b-2 under the 1934
Act.
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ARTICLE 1 DEFINITIONS................................................................. 1
ARTICLE 2 GRANTS...................................................................... 6
2.1 Rights Granted to P&U....................................................... 6
2.2 Transfer of Rights.......................................................... 6
2.3 Reservation of Rights....................................................... 7
2.4 Disclosure of Know How...................................................... 7
2.5 Chiron Rights............................................................... 7
2.6 RDF Nondisturbance.......................................................... 7
ARTICLE 3 DEVELOPMENT AND COMMERCIALIZATION OF DEPOCYT................................ 8
3.1 Conduct of Clinical Trials of DepoCyt....................................... 8
3.2 Development and Regulatory Approvals of DepoCyt............................. 8
3.3 Sales, Marketing and Distribution of DepoCyt................................ 10
3.4 Establishment of Minimum Annual Sales Requirements.......................... 10
3.5 Additional Indications and Alternative Formulations......................... 12
3.6 Performance of Services..................................................... 13
3.7 Coordination with Chiron.................................................... 13
3.8 Right to Reference Drug Master Files........................................ 14
ARTICLE 4 MANAGEMENT OF DEPOCYT PROGRAM............................................... 14
4.1 Project Representative...................................................... 14
4.2 Collaboration Steering Committee............................................ 14
4.3 General Rules Applicable To the CSC......................................... 15
ARTICLE 5 PAYMENTS.................................................................... 16
5.1 Initial Payment............................................................. 16
5.2 Milestone Payments.......................................................... 16
5.3 Clinical Development Funding................................................ 18
5.4 Rebate of Milestone Payments................................................ 18
ARTICLE 6 SALE AND PURCHASE OF DEPOCYT................................................ 18
6.1 Sale and Purchase........................................................... 18
6.2 Supply Limit................................................................ 19
6.3 Production Location......................................................... 19
6.4 TERMS AND CONDITIONS........................................................ 19
ARTICLE 7 PRICE AND PAYMENTS.......................................................... 20
7.1 DepoTech Share of Net Sales................................................. 20
7.2 Price Adjustments........................................................... 20
7.3 Payment of the Supply Price................................................. 21
ARTICLE 8 CONTINGENT MANUFACTURING LICENSES........................................... 21
8.1 Expanded Production Capacity................................................ 21
8.2 Supply Assurances........................................................... 22
ARTICLE 9 REPORTING, RECORDS AND ACCOUNTING........................................... 23
9.1 Records and Data............................................................ 23
9.2 Availability of Employees................................................... 24
9.3 Visit of Facilities......................................................... 24
9.4 Audits...................................................................... 24
ARTICLE 10 REPRESENTATIONS AND WARRANTIES.............................................. 25
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10.1 Mutual Representations...................................................... 25
10.2 DepoTech Representations.................................................... 25
ARTICLE 11 PATENTS..................................................................... 27
11.1 Patent Rights............................................................... 27
11.2 No Other Technology Rights.................................................. 28
11.3 Enforcement of Patent Rights................................................ 28
11.4 Third Party Claim of Infringement........................................... 29
11.5 Patent Marking.............................................................. 30
ARTICLE 12 CONFIDENTIALITY AND PUBLICATION............................................. 30
12.1 General..................................................................... 30
12.2 Confidentiality Agreements.................................................. 31
12.3 Injunctive Relief........................................................... 31
12.4 Publication................................................................. 31
12.5 Termination................................................................. 32
ARTICLE 13 INDEMNIFICATION............................................................. 32
13.1 DepoTech Indemnification.................................................... 32
13.2 P&U Indemnification......................................................... 32
13.3 Mutual Indemnification...................................................... 32
13.4 Procedure................................................................... 33
13.5 Product Liability Insurance................................................. 33
ARTICLE 14 TERM AND TERMINATION........................................................ 34
14.1 Term........................................................................ 34
14.2 Manufacturing Term.......................................................... 34
14.3 Other Causes for Termination................................................ 35
14.4 Patent Challenge............................................................ 36
14.5 Termination by P&U.......................................................... 36
14.6 Survival of Obligations..................................................... 36
14.7 Manufacturing Licenses to P&U............................................... 37
14.8 Change of Control of DepoTech............................................... 38
14.9 Acquisitions by P&U......................................................... 38
14.10 RDF and Chiron Rights....................................................... 38
ARTICLE 15 ALTERNATIVE DISPUTE RESOLUTION.............................................. 39
15.1 Executive Mediation......................................................... 39
15.2 Initiation of ADR........................................................... 39
ARTICLE 16 MISCELLANEOUS............................................................... 40
16.1 Force Majeure............................................................... 40
16.2 Limitation of Liability..................................................... 40
16.3 Relationship of the Parties................................................. 41
16.4 Notices..................................................................... 41
16.5 Successors and Assigns...................................................... 42
16.6 Amendments and Waivers...................................................... 42
16.7 Governing Law............................................................... 43
16.8 Attorneys' Fees............................................................. 43
16.9 Severability................................................................ 43
16.10 Use of Names................................................................ 43
16.11 Execution in Counterparts................................................... 43
16.12 Entire Agreement............................................................ 43
16.13 Export Control.............................................................. 44
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MARKETING AND DISTRIBUTION AGREEMENT
This MARKETING AND DISTRIBUTION AGREEMENT (the "Agreement") dated as of
July 2, 1997 (the "Effective Date"), is entered into by and between DEPOTECH
CORPORATION, a California corporation with its principal office at San Diego,
California, USA ("DepoTech") and PHARMACIA & UPJOHN S.P.A., an Italian
corporation with its principal office at Milano, Italy ("P&U").
A. DepoTech has developed novel and proprietary methods of delivering
pharmacologically active compounds to the human body. DepoTech has employed the
DepoTech Technology (as defined below) to the development of DepoCyto
sustained-release encapsulated cytarabine.
B. P&U seeks to collaborate with DepoTech in the clinical development
of, in seeking regulatory and/or marketing approval for, and in commercializing
DepoCyt in the Territory (as defined below), and in connection therewith to
obtain the exclusive right to market and sell DepoCyt in the Territory, and
DepoTech desires to grant such rights and to enter into such arrangements, all
upon the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the mutual agreements provided herein,
DepoTech and P&U agree as follows:
ARTICLE 1
DEFINITIONS
The following capitalized terms used herein shall have the respective
meanings set forth below. Certain other capitalized terms are defined elsewhere
in this Agreement.
1.1 "Act" means the United States Food, Drug, and Cosmetic Act, as
amended, or other equivalent laws, regulations or statutes applicable in each
country of the Territory, including EU Directives 65/65/EEC, 75/318/EEC,
75/319/EEC, and 91/356/EEC, as amended, and all national laws implementing such
directives, EU Regulation 2309/93, as amended, and the Pharmaceutical Law of
Japan (Yakuji Ho, Law No. 1450 of 1960, as amended).
1.2 "Additional Indications" means clinical indications for the use of
DepoCyt other than the Initial Indication.
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1.3 "Affiliate" means a person or entity that directly or indirectly
controls, is controlled by or is under common control with a party to this
Agreement. "Control" (and, with correlative meanings, the terms "controlled by"
and "under common control with") means, in the case of a corporation, the
ownership of fifty percent (50%) or more of the outstanding voting securities
thereof or, in the case of any other type of entity, an interest that results in
the ability to direct or cause the direction of the management and policies of
such entity or the power to appoint fifty percent (50%) or more of the members
of the governing body of the entity, or if not meeting the preceding
requirement, any company owned or controlled by or owning or controlling
DepoTech or P&U at the maximum control or ownership right permitted in the
country where such company exists.
1.4 "Alternative Formulations" means any formulations of the generic
chemotherapeutic compound cytarabine prepared using DepoTech Technology other
than DepoCyt.
1.5 "CSC" means the Collaboration Steering Committee described in
Section 4.2 hereof.
1.6 "Certificate of Analysis" means a summary of all DepoCyt testing
results specific to a lot of DepoCyt performed in accordance with the analytical
methods which are required to meet all applicable regulatory (including
pharmacopeia) requirements in the Territory.
1.7 "Clinical Plan" means the written plan for the further clinical
development of DepoCyt for seeking approval to sell DepoCyt in the Territory,
including a budget for Clinical Trial Expenses. The initial Clinical Plan is
attached hereto as EXHIBIT A, and shall be modified only by the CSC as provided
in Article 4 below.
1.8 "Clinical Trial(s)" means human clinical testing meeting the various
regulatory requirements and ethical guidelines as may be specified in the
individual countries in the Territory where clinical trials of DepoCyt will be
conducted or where such trials will be used to seek approval to market DepoCyt
in such country; provided, "Clinical Trials" shall not include Phase IV human
clinical testing or post-marketing surveillance.
1.9 "Clinical Trial Expenses" means, to the extent incurred for Clinical
Trials
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conducted for the Initial Indication in accordance with the Clinical Plan: (i)
expenses related to trial planning, materials, clinical site recruiting,
training and participation, monitoring of clinical sites, data analysis and data
quality assurance, preparing documents for initial fillings for Regulatory
Authority submission (including, but not limited to, all fees paid to clinical
investigators, consultants and CROs); (ii) expenses related to planning,
managing, carrying out, analyzing and preparing reports of pre-clinical studies
necessary to submit as part of initial regulatory marketing applications; (iii)
travel expenses related to planning meetings, clinical development or regulatory
submissions; and (iv) a reasonable allocation of overhead associated with the
conduct of such activities (not to exceed *** of DepoTech's direct labor costs)
and of general and administrative expenses in support of Clinical Trials (not to
exceed *** of the sum of (i), (ii) and (iii)). "Clinical Trial Expenses" shall
not include any costs incurred to conduct the Phase V testing referred to in
Exhibit A.
1.10 "DepoTech Technology" means the Patent Rights and the Know-How owned
or controlled by DepoTech on the date of this Agreement or which DepoTech
develops or acquires during the term of this Agreement useful in the
development, regulatory submission, manufacture, use or sale of DepoCyt.
1.11 "DepoCyt" means the DepoCyt sustained-release encapsulated
cytarabine product as specified in the NDAs filed in the United States by
DepoTech and to be filed by P&U in the Territory and the product labeling and
packaging as specified in various NDAs filed in the various countries in the
Territory, and all improvements thereof developed or acquired by DepoTech during
the term of this Agreement.
1.12 "EU" means all countries which are the members of the European Union
at any time during the term of this Agreement.
1.13 "First Commercial Sale" means the first arm's length sale of DepoCyt
pursuant to this Agreement to one or more Third Parties following receipt of
approval to commence selling DepoCyt from the applicable Regulatory Authority in
the applicable country.
1.14 "Initial Indication" means the ***.
1.15 "Know-How" means any knowledge and proprietary information which is
not
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Confidential Treatment and filed separately with the commission.
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generally publicly known, including, without limitation, all preclinical,
clinical, chemical, biochemical, toxicological, manufacturing, process,
formulation and scientific research information, whether or not capable of
precise separate description but which alone or when accumulated give to the one
acquiring it an ability to study, test, produce, formulate or market something
which one otherwise would not have known to study, test, produce, formulate or
market in the same way.
1.16 "Major European Country" means any of the ***.
1.17 "NDA" means a New Drug Application and associated documents required
to be filed with the United States Food and Drug Administration in order to
obtain approval to market DepoCyt in the United States, or its equivalent in
other countries in the Territory, including, without limitation, a Marketing
Authorization Application to be filed in the EU and New Drug Submission in
Canada.
1.18 "Net Sales" means the amount invoiced for sales or other
dispositions of DepoCyt hereunder (other than sales or other dispositions to
Affiliates, unless such Affiliate is the end user), less the following
deductions (to the extent they are not already reflected in the amount billed):
(a) discounts, returns, rebates, retroactive price adjustments, allowances, and
wholesaler chargebacks allowed and taken in amounts customary in the trade; and
(b) import, export, excise, sales or use taxes, tariffs or duties directly
imposed and with reference to particular sales. No other allowance or deduction
shall be made from the amount invoiced in determining Net Sales.
1.19 "Patent Rights" means all patents, inventors' certificates and
patent applications throughout the world, including any renewal, division,
continuation or continuation-in-part of any of such certificates and
applications, and any and all patents issuing thereon, and any and all reissues,
extensions, supplementary protection certificates, substitutions, confirmations,
registrations, revalidations, revisions and additions of or to any of said
patents, now or hereafter owned by or licensed to DepoTech or to any of its
Affiliates, which Patent Rights cover any aspect of the development, use,
manufacture or sale of DepoCyt, including without limitation, the patents and
patent applications listed on EXHIBIT B hereto.
1.20 "Regulatory Authority" means all governmental agencies regulating
the development, manufacture or sale of pharmaceutical products in any country
or groups of
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Confidential Treatment and filed separately with the commission.
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countries within the Territory, for example, the European Medicines Evaluation
Agency (EMEA).
1.21 "Regulatory Fees" means any fees payable to a Regulatory Authority
to obtain approval of the NDA for the Initial Indication in a country in the
Territory.
1.22 "Specifications" means the mutually agreed upon product
specifications for DepoCyt which shall comply with the requirements of all
Regulatory Authorities in the Territory. Set forth in EXHIBIT C is a preliminary
version of the Specifications, which the parties shall amend from time to time
to comply with such regulatory requirements, and ***.
1.23 "Supply Price" means the price at which DepoTech will supply Vialed
Material to P&U as set forth in Section 7.1.
1.24 "Territory" means all of the nations of the world, other than the
United States (consisting of the 50 states of the United States of America,
Puerto Rico and all territories, possessions and protectorates thereof).
1.25 "Third Party" means any person or entity other than P&U, DepoTech or
their Affiliates.
1.26 "Vialed Material" means the finished but unlabeled vial form of
DepoCyt.
ARTICLE 2
GRANTS
2.1 RIGHTS GRANTED TO P&U. Subject to the terms and conditions of this
Agreement, DepoTech hereby grants to P&U:
(a) the exclusive right (against DepoTech and all others, except
to the extent that DepoTech acquires rights hereunder) to import, offer to sell,
sell and have sold DepoCyt in the Territory;
(b) the exclusive right (against DepoTech and all others, except
to the extent that DepoTech has reserved rights or acquires rights hereunder) to
use DepoTech Technology
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anywhere in the world to develop and finish DepoCyt (from Vialed Material
supplied by DepoTech) for sale in the Territory and to exercise the rights
granted under paragraph (a) above; and
(c) subject to the conditions set forth in Article 8 and Section
14.7 below, the exclusive right (against DepoTech and all others, except to the
extent that DepoTech has reserved rights or acquires rights hereunder) to use
DepoTech Technology anywhere in the world to make and have made DepoCyt
(including Vialed Material) for sale in the Territory.
2.2 TRANSFER OF RIGHTS. P&U shall have the right to grant the rights
granted in this Article 2 to: (a) its Affiliates; (b) Third Parties which
distribute other pharmaceutical products of P&U or its Affiliates; (c) in
respect to its right to finish and, if applicable, manufacture DepoCyt, Third
Parties performing such activities as contract manufacturers for P&U; and (d)
other Third Parties only with the prior written consent of DepoTech, which
consent shall not be unreasonably withheld or delayed.
2.3 RESERVATION OF RIGHTS. Subject to the contingent rights granted P&U
under Section 2.1(c) and the terms of this Agreement, DepoTech hereby retains
and reserves the exclusive right to manufacture Vialed Material using DepoTech
Technology. In respect to Vialed Material to be supplied to P&U, DepoTech shall
have the right to sublicense the manufacture of Vialed Material, or to have
Vialed Material made by Third Parties, only with P&U's prior written consent,
which consent shall not be unreasonably withheld or delayed.
2.4 DISCLOSURE OF KNOW HOW. DepoTech shall from time to time at the
request of P&U disclose and provide reasonable access to all of its Know How
relating to DepoCyt which may be useful in obtaining regulatory approvals,
conducting clinical trials, obtaining pricing approvals and marketing for
Additional Indications, finishing of DepoCyt and otherwise to further develop
and commercialize DepoCyt, including, subject to the terms of Article 8 and
Section 14.7, manufacture of Vialed Material.
2.5 CHIRON RIGHTS. P&U acknowledges that DepoTech has previously entered
into a Collaboration Agreement with Chiron Corporation ("Chiron"), pursuant to
which DepoTech and Chiron are developing, and intend to manufacture, market and
sell, DepoCyt in the United States. DepoTech represents that it has now acquired
from Chiron all rights Chiron had in respect to DepoCyt in the Territory, and
that, except as otherwise previously disclosed in writing to P&U's
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counsel, it has the right to grant P&U the rights herein free of any claim of
Chiron.
2.6 RDF NONDISTURBANCE. A significant portion of DepoTech Technology was
acquired by DepoTech from the Research Development Foundation, a nonprofit
Nevada corporation ("RDF"), under an agreement under which such Technology may
revert to RDF under certain circumstances. Accordingly, RDF has entered into the
separate agreement with P&U referred to in Section 10.2(g) below.
ARTICLE 3
DEVELOPMENT AND COMMERCIALIZATION OF DEPOCYT
3.1 CONDUCT OF CLINICAL TRIALS OF DEPOCYT. Set forth in Exhibit A, as a
"Clinical Plan," is a statement of the general objectives of the Clinical
Trials. Through the CSC, the parties shall amend and expand such statement from
time to time so that it reflects the then current plan and budget for conducting
the Clinical Trials. DepoTech shall use its commercially reasonable and diligent
efforts to conduct and to complete the Clinical Trials for the Initial
Indication in accordance with the Clinical Plan and any relevant clinical
protocol. All Clinical Trials shall be conducted in accordance with all
applicable GCPs and other legal and regulatory requirements. DepoTech shall not
depart in any material manner from the Clinical Plan and any relevant clinical
protocol, without the prior approval of the CSC. DepoTech shall bear all costs
for such Clinical Trials, but P&U shall reimburse DepoTech for all Clinical
Trial Expenses and Regulatory Fees incurred for the Initial Indication, subject
to the provisions of Section 5.3 below. DepoTech's obligations to conduct
Clinical Trials required by Regulatory Authorities in any country in the
Territory, other than the EU, Japan and Canada shall be subject to the
determination of the CSC. All costs associated with such Clinical Trials for
such countries (other than EU, Japan and Canada) shall be borne solely by P&U.
3.2 DEVELOPMENT AND REGULATORY APPROVALS OF DEPOCYT.
(a) Preparation and Submission of NDAs. (1) DepoTech shall obtain,
at its expense, all clearances, registrations, permits and other governmental
approvals which may be required to manufacture DepoCyt and import it into the
EU, Japan, Canada and such countries in the Territory as determined by the CSC.
DepoTech shall also compile and prepare all NDAs required to obtain approval to
sell DepoCyt for the Initial Indication in Canada, the EU and Japan. DepoTech
shall use commercially reasonable and diligent efforts to so compile and
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prepare NDAs for the Initial Indication for all other countries in the
Territory. DepoTech shall consult with P&U concerning all regulatory and other
governmental submissions related to the use of DepoCyt for the Initial
Indication and provide P&U with access to and the right to approve such
submissions prior to filing the same. P&U shall reimburse DepoTech for all
Regulatory Fees incurred for the Initial Indication, subject to the provisions
of Section 5.3. DepoTech shall provide P&U a complete copy of the New Drug
Application submitted to obtain approval to sell DepoCyt in the United States.
(2) All NDAs filed in the Territory shall be submitted in the name of
P&U or one of its Affiliates. The parties now contemplate that DepoCyt will
qualify for the centralized registration procedure in obtaining the approval to
sell DepoCyt in the EU. As soon as reasonably practical, the parties shall meet
or initiate contact with the EMEA and confirm that such procedure may be
followed. If such procedure cannot be followed for any reason, the
decentralized/mutual recognition registration procedure shall be followed. The
initial filing under such decentralized procedure shall be made in the United
Kingdom or such other country reasonably determined by the CSC.
(b) P&U's Responsibilities. Following the submission of each NDA,
each of P&U and DepoTech shall exercise commercially reasonable and diligent
efforts toward obtaining the approval of each NDA filed in the Territory. After
obtaining approval of each NDA, P&U shall exercise commercially reasonable and
diligent efforts toward maintaining all regulatory and other governmental
approvals, clearances, registrations or permits which may be required to sell
DepoCyt for the Initial Indications in countries within the Territory. P&U shall
consult with DepoTech concerning all supplemental or additional regulatory and
other governmental submissions related to DepoCyt and provide DepoTech with
access to such submissions prior to filing the same. Unless incurred in
connection with any submission to obtain approval for the Initial Indication,
the costs and expenses of making such supplemental regulatory or other
governmental submissions shall be borne entirely by P&U; provided, that DepoTech
shall provide all data and information related to the manufacture of DepoCyt
without additional cost. DepoTech shall also provide P&U with all other
information and Know How possessed or controlled by DepoTech which may
reasonably be required in connection with the conduct of Clinical Trials,
obtaining, renewing and maintaining any NDAs and marketing and selling DepoCyt
in the Territory. P&U shall be solely responsible for obtaining all pricing and
reimbursement approvals for DepoCyt in the Territory.
(c) Orphan Drug Designations. To the extent available and assuming
DepoCyt qualifies, the parties intend to seek orphan drug designations for
DepoCyt in Japan and, when such designation is available under applicable law,
in the EU. P&U shall apply for such
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designations in its name, and DepoTech shall provide all information and other
assistance reasonably required to support P&U's efforts to obtain such
designations.
3.3 SALES, MARKETING AND DISTRIBUTION OF DEPOCYT.
(a) Sales, Marketing and Distribution. P&U shall be solely
responsible for the sale, marketing and distribution of DepoCyt pursuant to this
Agreement including, without limitation, commissioning and paying for any and
all Phase IV and other post-marketing human clinical studies, post-marketing
surveillance and other marketing studies in the Territory. P&U shall use
reasonable diligence in proceeding with the sale, marketing and distribution of
DepoCyt. Reasonable diligence as used herein shall be the same standard of
effort used by P&U in the sale, marketing and distribution of P&U
pharmaceuticals having a potential market size and profitability similar to
those of DepoCyt. No later than *** prior to the estimated date of First
Commercial Sale in a country within the Territory (other than Canada), P&U shall
submit its annual strategic marketing plan for DepoCyt in the Territory for
review by DepoTech to assure consistency in the product profile and promotional
claims (such plan shall be submitted within *** from the date hereof for
Canada). Thereafter, P&U shall submit such marketing plans annually to DepoTech
prior to November 1 of each year for such review. P&U shall be responsible for
final packaging, labeling, marketing, sales and distribution of DepoCyt in the
Territory, at its sole cost. P&U shall be responsible for invoicing the
customers of DepoCyt and collecting payment therefor. P&U may carry out its
obligations to market DepoCyt in the Territory through Third Parties, as
provided in Sections 2.1 and 2.2 above.
(b) Trademarks. DepoCyt shall be sold under such trademarks and
trade names as P&U may select and own. P&U shall have the right to so use
"DepoCyt" or any other mark owned or controlled by DepoTech, and DepoTech hereby
grants P&U the exclusive license to use any trademarks or trade names owned or
controlled by DepoTech for use in connection with the marketing and sale of
DepoCyt in the Territory. Such marks owned by DepoTech shall include all
trademarks and trade names registered in the Territory by Chiron for the sale of
DepoCyt.
(c) Labels. To the extent permitted under applicable law, each
DepoCyt package shall identify DepoTech as the manufacturer of DepoCyt.
3.4 ESTABLISHMENT OF MINIMUM ANNUAL SALES REQUIREMENTS.
(a) Minimum Annual Sales. Commencing with the *** following the
First Commercial Sale in any ***, the parties shall establish minimum annual
sales requirements (the
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"Minimum Annual Sales Requirements"). Prior to November 1 of each such year, P&U
shall submit to DepoTech annual strategic marketing plans for DepoCyt for the
Territory. The plan shall contain projected sales targets for each ***, the ***,
*** and the ***. The Minimum Annual Sales Requirements shall then be *** of such
projected sales targets. Minimum Annual Sales Requirements may be amended at any
time on mutual agreement of the parties. Set forth in EXHIBIT D is P&U's
non-binding estimate of its annual sales for the first *** following such First
Commercial Sale, which estimate is based on the assumptions described in such
Exhibit.
(b) Failure to Attain Minimum Annual Sales Requirements. If (i)
P&U shall fail to meet the Minimum Annual Sales Requirements in the entire
Territory, and (ii) P&U shall fail to meet the Minimum Annual Sales Requirements
in any of the *** during any year (the "Deficit Year")(such of those countries
in which P&U failed to meet the Minimum Annual Sales Requirements shall be
referred to as the "Deficit Countries"), and (iii) such failure is not due to
circumstances beyond the reasonable control of P&U, and (iv) P&U shall not make
up the shortfall between the actual Net Sales and the Minimum Annual Sales
Requirement during the Deficit Year by exceeding such Minimal Annual Sales
Requirement in the *** of the following *** by an amount which, when added to
the actual Net Sales in the Deficit Year, equals or exceeds the Minimum Annual
Sales Requirement for the Deficit Year in which the shortfall occurred, and (v)
P&U shall not, within *** following the giving of notice by DepoTech that the
conditions set forth in (i), (ii) and (iv) have occurred, pay to DepoTech an
amount equal to *** of the difference between (A) the Minimum Annual Sales
Requirement for DepoCyt for the Deficit Countries for the Deficit Year, and (B)
the sum of (x) the actual Net Sales for DepoCyt in the Deficit Countries for the
Deficit Year plus (y) the amount by which Net Sales in the Deficit Countries
during the *** of the *** following the Deficit Year exceed the Minimum Annual
Sales Requirement in the Deficit Countries for such ***, then DepoTech shall
have the right, exercisable by delivering notice to P&U and, as its sole remedy,
to ***. DepoTech shall have the right to ***. P&U shall grant DepoTech the right
to reference ***.
3.5 ADDITIONAL INDICATIONS AND ALTERNATIVE FORMULATIONS.
(a) Scope of P&U's Rights. Subject to Section 3.4(b) above,
DepoTech and P&U agree that P&U's rights hereunder include the exclusive right
to commercialize, market and sell DepoCyt in the Territory. P&U and its
Affiliates shall not research, develop, manufacture or market DepoCyt in the
Territory for any Additional Indications, and shall not enter into any
arrangement or contract with a Third Party that would permit such Third Party to
engage in such conduct, except, in either case, pursuant to this Agreement. In
addition, P&U shall not develop
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Alternative Formulations that are commercially suitable for use in the treatment
of human cancer during the term of this Agreement without the prior written
consent of DepoTech. In the Territory, DepoTech and its Affiliates shall not, by
itself or through a Third Party, research, develop, manufacture or market any
other formulation of cytabarine for oncological indications or any other
pharmaceutical product suitable for the Initial Indication, other than as
provided in paragraph (c) below.
(b) Additional Indications. After consultation with DepoTech and
consideration of its views, P&U may determine to obtain approval from Regulatory
Authorities to sell DepoCyt in the Territory for any Additional Indications. Any
costs and expenses associated with obtaining such approval, including clinical
trials and regulatory fees, shall be borne solely by P&U. DepoTech and its
Affiliates will not, in the Territory, directly or indirectly, develop,
manufacture, sell or license DepoCyt for any Additional Indications without the
prior written consent of P&U.
(c) Restrictions on Development of Alternative Formulations.
Subject to the terms set forth in paragraph (d) below, DepoTech and its
Affiliates shall have the right to research, develop, manufacture or market
Alternative Formulations or enter into any arrangements or contract with a Third
Party that would permit such Third Party to engage in such conduct; provided,
that such Alternative Formulations are unsuitable for and unable to be used for
oncology indications, and are unlikely to adversely affect the sales or market
price of DepoCyt in the Territory.
(d) Right of First Negotiation on Alternative Formulations.
DepoTech hereby grants to P&U and its Affiliates a right of first negotiation to
obtain, in the Territory, a license to, or collaborative or marketing rights
with respect to, any Alternative Formulations that DepoTech has developed or may
in the future develop.
(1) Notification to P&U. Immediately prior to the earlier of
(A) submitting any NDA in the Territory for an Alternative Formulation, or
(B) entering into any agreement with a Third Party with respect to an
Alternative Formulation in the Territory, DepoTech shall promptly give P&U
written notice containing reasonable details concerning such Alternative
Formulation and the material terms, if applicable, on which DepoTech would
propose to enter into an agreement with such Third Party. DepoTech may
elect to give such written notice to P&U earlier than the date required
under the preceding sentence. P&U shall respond to DepoTech within *** of
the giving of such notice of its interest in obtaining rights to the
Alternative Formulation.
(2) Negotiation of Terms. For a period of up to *** after
the giving of notice of P&U's intention to seek rights relating to such
Alternative Formulation, the parties shall negotiate in good faith a
reasonable agreement based upon the value of the Alternative Formulation
and the contributions or anticipated contributions of both parties to the
commercialization of the Alternative Formulation.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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(3) Commercialization by DepoTech. In the event that P&U
fails to respond within ***, indicates that it is not interested in
seeking a license regarding such Alternative Formulation or the parties
fail to reach a final agreement within the time period set forth in
paragraph (2) above, DepoTech and its Affiliates shall be free to
commercialize such Alternative Formulation either independently or with
one or more Third Parties; provided, that DepoTech shall not offer rights
to a Third Party on terms more favorable in the aggregate than those
previously offered to P&U.
3.6 PERFORMANCE OF SERVICES. Each party shall use commercially
reasonable and diligent efforts to perform its responsibilities hereunder in a
prudent and skillful manner, and in accordance, in all material respects, with
applicable laws then in effect. Each party shall furnish all labor, supervision,
facilities, supplies and materials necessary to perform the activities assigned
to it hereunder.
3.7 COORDINATION WITH CHIRON. Together with Chiron, the parties shall
establish procedures in respect to DepoCyt to (a) coordinate the conduct of
clinical trials for Additional Indications, including data and cost sharing
arrangements, (b) allow the free exchange and use of data from clinical trials
conducted by either party (including Phase IV trials after the publication of
their results), and (c) exchange of reports and other information required to
permit DepoTech, Chiron and P&U to comply with their respective obligations to
all Regulatory Authorities in the United States and the Territory, including
information about adverse drug events.
3.8 RIGHT TO REFERENCE DRUG MASTER FILES. DepoTech (or any Third Party
permitted under Section 2.3 above) shall have the right to reference *** and
regulatory documents for use in all regulatory filings for DepoCyt worldwide in
qualifying *** for use in producing Vialed Material. P&U and its Affiliates
shall have the right to reference DepoTech's DepoCyt and Vialed Material Drug
Master File and regulatory documents in the United States for use in all
regulatory filings for DepoCyt in the Territory. DepoTech shall cause Chiron to
grant the same rights to any DMF or NDA for DepoCyt filed in Chiron's name
solely for obtaining regulatory approval to sell DepoCyt in the Territory.
ARTICLE 4
MANAGEMENT OF DEPOCYT PROGRAM
4.1 PROJECT REPRESENTATIVE. P&U and DepoTech each shall appoint a person
(a
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"Project Representative") to coordinate its part of (a) the development and (b)
the commercialization activities contemplated by this Agreement. The Project
Representatives shall be the primary contacts between the parties for day-to-day
collaboration pursuant to this Agreement. Each party shall notify the other
within thirty (30) days of the Effective Date of the appointment of its Project
Representatives and shall notify the other party as soon as practicable upon
changing this appointment.
4.2 COLLABORATION STEERING COMMITTEE.
(a) Composition of the CSC. The clinical testing and regulatory
approval process of DepoCyt in the Territory shall be conducted under the
direction of the CSC which shall be composed of three (3) named representatives
of P&U and three (3) named representatives of DepoTech. Each party may
substitute one or more of its representatives, from time to time in its sole
discretion, effective upon notice to the other party of such change.
(b) Responsibilities of the CSC. The purposes of the CSC shall be
to supervise and coordinate the Clinical Trials and the process of obtaining
regulatory approvals of DepoCyt in the various countries in the Territory, and
shall determine in what countries in the Territory regulatory filings should be
made. As part of its responsibilities, the CSC shall (a) review data developed
from the Clinical Trials, (b) monitor the progress of the Clinical Trials and
evaluate the work performed and the results obtained therefrom, (c) approve
modifications to the Clinical Plan, and establish and modify all Clinical Trial
protocols, (d) determine when an NDA for DepoCyt should be filed with the
Regulatory Authority and (e) carry out such other activities as the parties may
from time to time agree.
4.3 GENERAL RULES APPLICABLE TO THE CSC.
(a) Meetings. Unless otherwise agreed, the CSC shall meet no less
than semiannually. Each party shall be responsible for its own costs incurred in
connection with such meetings. The site of the meetings shall alternate between
a site chosen by DepoTech and a site chosen by P&U, with the party hosting the
meeting choosing the chairperson for the meeting.
(b) Actions. Each member of the CSC shall have one vote. Any
approval, determination, decision or other action by the CSC shall require the
unanimous vote of the members of the CSC.
(c) Records of Action. The chairperson of the CSC shall promptly
prepare and deliver to the other party within fifteen (15) days after the date
of such meeting minutes of such meeting summarizing the matters reviewed and any
actions taken and decisions made at
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such meetings in form and content reasonably acceptable to the other party.
(d) Disagreements. All disagreements within the CSC shall be
resolved in the following manner: The representatives of the CSC promptly shall
present the disagreement to the Managing Director on behalf of P&U, and the
President on behalf of DepoTech. Such executives shall confer to discuss and to
resolve between themselves such disagreement. In the event that the parties are
unable to reach agreement, the parties may, by mutual agreement, submit the
dispute for resolution pursuant to Article 15. Notwithstanding the foregoing,
P&U alone shall resolve all disagreements concerning which countries in the
Territory either party shall conduct clinical trials, seek governmental approval
or sell DepoCyt, so long as P&U pays for all costs incurred in carrying out such
activities.
ARTICLE 5
PAYMENTS
5.1 INITIAL PAYMENT. Within ten (10) days after execution of this
Agreement, P&U shall pay to DepoTech the nonrefundable, noncreditable amount of
2 MUSD.
5.2 MILESTONE PAYMENTS. P&U shall pay DepoTech milestone payments within
thirty (30) days of the times set forth below:
(a) Upon the granting of the approval of the Notice of Compliance
required to sell DepoCyt in Canada, P&U shall pay the nonrefundable,
noncreditable amount of ***.
(b) Upon the granting of FDA approval for marketing DepoCyt in the
United States, P&U shall pay the nonrefundable, noncreditable amount of ***.
(c) ***, (1) upon the submission to the EMEA of an NDA under the
centralized registration procedure, P&U shall pay ***, or (2) if the
decentralized/mutual recognition registration procedure is followed, upon the
submission of an NDA in any of the Major European Countries, P&U shall pay ***
for each such country (up to an aggregate of ***). "Submission" under this
paragraph (c) shall mean the filing or, in respect to the EMEA and where
otherwise applicable, receipt from the applicable Regulatory Authority of a
notice of receipt of a valid application.
(d) Upon the receipt of regulatory approval from the EU Commission
necessary to commence marketing DepoCyt in the EU under the centralized
registration
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Confidential Treatment and filed separately with the commission.
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procedure, P&U shall pay ***, or if the decentralized/mutual recognition
registration procedure is followed, upon the receipt of regulatory approvals
(inclusive of necessary price and reimbursement approvals) necessary to commence
marketing DepoCyt in any of the Major European Countries, P&U shall pay *** for
each such country (up to an aggregate of ***).
(e) Upon the submission of an NDA to the Japanese Ministry of
Health and Welfare to market DepoCyt in Japan, P&U shall pay ***.
(f) Upon the earlier of (1) receipt of regulatory approvals
necessary to commence marketing DepoCyt in Japan (inclusive of necessary price
and reimbursement approvals) or (2) First Commercial Sale in Japan, P&U shall
pay ***. Certain milestone payments set forth above shall be reduced, on an
event-by-event basis, in the event that they are not completed by the target
dates set forth below. For example, if DepoTech misses the target date for
filing in Europe but achieves the target date for filing in Japan, only the
European filing milestone would be reduced. The following table sets forth the
target date for each milestone and the two delay periods. The first delay period
("First Delay Period") will refer to a delay of between one day and three months
from the target date. The second delay period ("Second Delay Period") will refer
to a delay of between three months and one day and six months from the target
date. If a delay greater than one day and six months occurs, the parties will
assess the situation and renegotiate the product development and affected
milestone payments in good faith.
Milestone
Payment(1)
(set forth First Adjusted Second Adjusted
Milestone Payment (as set Target in Section Delay Milestone Delay Milestone
forth above) Date 5.2) Period Payment(1) Period Payment(1)
- -----------------------------------------------------------------------------------------------
Canadian approval *** *** *** *** *** ***
(Section 5.2(a)
European submission *** *** *** *** *** ***
(Section 5.2(c))
European approval *** *** *** *** *** ***
(Section 5.2(d))
Japanese submission *** *** *** *** *** ***
(Section 5.2(e))2
Japanese approval *** *** *** *** *** ***
(Section 5.2(f))2
(1) All milestone payments are in millions and are to be paid in U.S. dollars.
If the decentralized/mutual recognition
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Confidential Treatment and filed separately with the commission.
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procedure is used for the EU, the Adjusted Milestone Payments shall be *** of
the amounts set forth above for each Major European Country, and the Target
Dates and Delay Periods for European submission and approval shall be extended
by ***.
(2) ***.
5.3 CLINICAL DEVELOPMENT FUNDING. P&U shall reimburse DepoTech for ***
of all Clinical Trial Expenses and Regulatory Fees for the Initial Indication
incurred by DepoTech since ***, by the payment to DepoTech, monthly in arrears
and not later than the 15th day after DepoTech's invoice, the lesser of: (a) the
cumulative amount of Clinical Trial Expenses and Regulatory Fees actually
incurred since ***, or (b) *** times the number of months lapsed since ***;
less, in each case, (c) the cumulative amount previously paid by P&U under this
Section 5.3. Notwithstanding the foregoing, P&U shall not be obligated to
reimburse DepoTech for any Clinical Trial Expenses or Regulatory Fees incurred
in connection with obtaining all regulatory approvals in the EU, Canada and
Japan for the Initial Indication which, in the aggregate, exceed ***.
5.4 REBATE OF MILESTONE PAYMENTS. If approval to sell DepoCyt in a Major
European Country for the Initial Indication is not obtained prior to ***,
DepoTech shall refund *** of the pro-rata payments previously made under Section
5.2(c) for such Major European Country. If approval to sell DepoCyt in Japan for
the Initial Indication is not obtained prior to ***, DepoTech shall refund ***
of the payment previously made under Section 5.2(e).
ARTICLE 6
SALE AND PURCHASE OF DEPOCYT
6.1 SALE AND PURCHASE. Subject to the terms and conditions of this
Agreement (including Article 8 and Exhibit E): (a) DepoTech shall use its
commercially reasonable and diligent efforts to manufacture and sell to P&U such
quantities of Vialed Material as P&U may require; and (b) P&U agrees, for
itself, its Affiliates and sublicensees, to satisfy, solely through P&U's
purchase of Vialed Material under this Agreement, *** of P&U's, its Affiliates'
and sublicensees' requirements of DepoCyt in the Territory. P&U shall be solely
responsible for finishing Vialed Material into DepoCyt, including all labelling
and packaging.
6.2 SUPPLY LIMIT. Notwithstanding the foregoing, DepoTech shall be under
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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no obligation to fill orders in excess of *** vials per year (*** vials through
calendar year ***), unless mutually agreed by the parties in writing. DepoTech
represents that its production facility at 11011 N. Torrey Pines Road, La Jolla,
California 92037 is or will be validated for the production of Vialed Material
and that, except for non-commercial quantities of other products manufactured on
a small scale line using its DepoFoam technology, such facility will be used
solely to produce Vialed Material for sale to P&U and Chiron. DepoTech shall use
a dedicated production line at such facility to produce such Vialed Material. If
DepoTech is unable to supply all of requirements of DepoCyt (and, if applicable,
other products using its DepoFoam delivery system), it shall allocate its
available supplies equitably among all requirements in proportion to their
actual purchases in the prior ***.
6.3 PRODUCTION LOCATION. Except as otherwise provided in Article 8
below, all Vialed Material shall be produced at DepoTech's facilities in San
Diego County, or such other locations as agreed by the parties, which facilities
shall be approved by the FDA for the manufacture of the Vialed Material.
6.4 TERMS AND CONDITIONS. THE SUPPLY OF VIALED MATERIAL HEREUNDER IS
EXPRESSLY LIMITED TO AND CONDITIONED UPON THE PARTIES' ACCEPTANCE OF THE
ADDITIONAL TERMS AND CONDITIONS OF SALE ATTACHED HERETO AS EXHIBIT E AND NO
TERMS ADDITIONAL TO OR DIFFERENT FROM THOSE IN OR INCORPORATED BY REFERENCE IN
THIS AGREEMENT ARE BINDING ON DEPOTECH UNLESS AGREED TO IN WRITING BY DEPOTECH.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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ARTICLE 7
PRICE AND PAYMENTS
7.1 DEPOTECH SHARE OF NET SALES. As compensation for the manufacture and
supply of Vialed Material, P&U shall pay to DepoTech an amount equal to *** of
Net Sales, but not less than *** (the "Supply Price"). Such minimum Supply Price
is based on the assumption that DepoCyt is approved only for the Initial
Indication and its approved labeling shall contain ***.
7.2 PRICE ADJUSTMENTS. The Supply Price payable in accordance with
Section 7.1 above shall be subject to adjustment as follows:
(a) Additional Indications and Changes in the Market Price. If
(1)***, or (2)***, the parties shall negotiate in good faith such equitable
modifications to the Supply Price as may be required as a result of such changed
circumstances.
(b) Loss of Patent Coverage. In the event (i) DepoCyt is no longer
claimed under any of DepoTech's valid and enforceable Patent Rights in any
country and (ii)***, the Supply Price for Vialed Material for use in making
DepoCyt for sale in such country shall be reduced to *** of Net Sales in such
country (and the minimum price shall be reduced to ***).
(c) Non-Commercial Sales. The parties shall discuss and agree upon
commercially reasonable reductions in the Supply Price on dispositions of
DepoCyt for use by or for indigent patients, treatment INDs and named patient
uses, and clinical trials (which dispositions shall not exceed *** of the total
vials distributed by P&U).
7.3 PAYMENT OF THE SUPPLY PRICE.
(a) Prior to January 1 of each year, the parties shall establish a
reasonable estimate of the Supply Price. Such estimated Supply Price shall be
used to make tentative payments during that year, and shall be subject to
retroactive adjustment as provided below. Within sixty (60) days after the end
of each calendar quarter, P&U shall pay to DepoTech an amount equal to the
aggregate estimated Supply Price for all DepoCyt sold in that quarter. Within 60
days after the end of year, P&U shall submit its report of its actual Net Sales
for such year, and within 20 days thereafter the parties shall make the
appropriate adjustment of the Supply Price for DepoCyt sold in such year. P&U
shall deliver to DepoTech within thirty (30)
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days after the end of each calendar quarter a sales report, including quantities
and monetary amounts, of P&U's and its Affiliates and sublicensees Net Sales.
Such quarterly reports shall indicate the Net Sales on a country-by-country
basis, as well as all calculations used to determine the Supply Price.
(b) All payments to DepoTech under this Agreement shall be in U.S.
dollars and shall be made by wire transfer of immediately available funds to the
bank account designated in writing by DepoTech from time to time. With respect
to any payment based on Net Sales made in a currency other than U.S. dollars,
P&U shall convert Net Sales to U.S. dollars in accordance with generally
accepted accounting principles, consistently applied, in accordance with P&U's
customary foreign translation methods for its financial reporting.
ARTICLE 8
CONTINGENT MANUFACTURING LICENSES
8.1 EXPANDED PRODUCTION CAPACITY. As soon as reasonably practicable, P&U
shall notify DepoTech in writing when it expects, if at all, its aggregate
annual requirements of Vialed Material in the Territory to exceed *** vials.
DepoTech shall then have the right to produce all such excess requirements of
Vialed Material upon the terms set forth herein. If DepoTech fails to commit in
writing to produce such excess quantities within *** after such notice from P&U,
or at anytime thereafter fails to provide reasonable assurances that it will be
able to produce such quantities, P&U shall have the right to manufacture or to
have manufactured such excess requirements (or, if such excess requirements are
less than *** vials, its requirements exceeding *** vials) for use and sale in
the Territory, whereupon DepoTech shall then grant P&U such licenses and provide
such other materials and services as are described in Section 14.7 below.
DepoTech shall continue to produce, and P&U shall continue to purchase, such
quantities of Vialed Material not so permitted to be manufactured by or for P&U
for so long as this Agreement shall continue pursuant to Article 14.
8.2 SUPPLY ASSURANCES. The parties recognize that the availability of
adequate quantities of Vialed Material consistent with P&U's requirements is
essential for the commercial success of DepoCyt. The parties therefore agree as
follows:
(a) Each party shall maintain an inventory of Vialed Material or
DepoCyt sufficient to satisfy P&U's requirements for at least *** based on P&U's
requirements for the prior *** (or,
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Confidential Treatment and filed separately with the commission.
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during the first *** after the First Commercial Sale, the first *** set forth in
the forecast provided under Paragraph 1.2 of Exhibit E).
(b) DepoTech shall use commercially reasonable and diligent
efforts to validate its other production facility at 10450 Science Center Drive
in San Diego (or such other facility as the parties may mutually agree) for the
production of Vialed Material. Upon completion of such validation (including the
approval of all Regulatory Authorities in the EU, Canada and Japan), DepoTech
shall confirm in writing that such other facility may be used as a second source
and will be available for use to permit DepoTech to comply with its supply
obligations hereunder.
(c) If such written confirmation is not provided prior to *** or
thereafter P&U asserts reasonable grounds for insecurity with respect to
DepoTech's ability to supply Vialed Material (and DepoTech is unable to promptly
furnish adequate assurance of due performance):
(1) DepoTech shall make available to P&U sufficient
technology and know-how to enable P&U (or a qualified Third Party
designated by P&U and reasonably acceptable to DepoTech) to manufacture
Vialed Material. DepoTech shall update such information from time to time
thereafter so that P&U possesses all such technology and know-how then
used by DepoTech to manufacture the Vialed Material, including all
manufacturing and controls information contained in any DMF or otherwise
contained or referred to in any NDA and reasonable technical assistance to
transfer effectively to P&U such technology and know how.
(2) Subject to the occurrence of the conditions or events
referred to above in this paragraph (c), DepoTech hereby grants P&U and
its Affiliates a non-exclusive, limited license under the DepoTech
Technology and other relevant know how and patents to manufacture and have
manufactured Vialed Material. Subject to the royalty payable under Section
14.7 below, such license may be used only as follows:
(A) To manufacture or have manufactured such portion
of its requirements of Vialed Material in the Territory reasonably
necessary for P&U to maintain a validated facility as a backup
source of Vialed Material (up to *** of its annual requirements);
and
(B) If DepoTech is unable to supply Vialed Material
within *** after receipt of a purchase order from P&U (even if
caused by any of the reasons referred to in Section 16.1 below), P&U
or such Third Party may make or have made Vialed Material until ***
after DepoTech provides written notice that it can again provide
Vialed Material.
(d) Such licenses shall be subject to the amounts and other terms
set forth below in Section 14.7(a) and such additional terms as may be required
to carry out the intent of the foregoing standby license, including rights to
reference DMF's, conduct of bioequivalence studies, and technical assistance.
ARTICLE 9
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Confidential Treatment and filed separately with the commission.
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REPORTING, RECORDS AND ACCOUNTING
9.1 RECORDS AND DATA. Each party shall maintain records in sufficient
detail and in good scientific manner appropriate for regulatory and other
governmental purposes and so as to properly reflect all work done and results
achieved in the performance of clinical development activities hereunder. Such
records shall include books, records, reports, research notes, charts, graphs,
comments, computations, analyses, recordings, photographs, computer programs and
documentation thereof, computer information storage means, samples of materials
and other graphic or written data generated in connection with such activities,
including any data required to be maintained pursuant to applicable governmental
regulations. Each party shall provide the other the right to inspect such
records, and shall provide copies of all requested records, to the extent
reasonably required for the performance of the other's obligations under this
Agreement.
9.2 AVAILABILITY OF EMPLOYEES. Each party shall make its employees
engaged in activities relating to this Agreement and relevant reports of
nonemployee consultants available, upon reasonable notice during normal business
hours, at their respective places of employment to consult with the other party
on issues arising during the term hereof and in connection with any request from
any regulatory agency, including regulatory, scientific, technical,
commercialization and clinical testing issues.
9.3 VISIT OF FACILITIES. Representatives of each party may, upon
reasonable notice and at times reasonably acceptable to the other party, (a)
visit the facilities where the other party's activities under this Agreement are
being conducted, (b) consult informally, during such visits and by telephone,
with personnel of the other party performing work under this Agreement and (c)
with the other party's prior approval, which approval shall not be unreasonably
withheld, visit the sites of any clinical trials or other experiments being
conducted by such other party in connection with such other party's activities
under this Agreement, but only to the extent in each case as such trials or
other experiments relate to such activities.
9.4 AUDITS. Upon DepoTech's request, P&U shall permit an independent,
certified public accountant selected by DepoTech, except one to whom P&U has
reasonable objection, to have access during ordinary business hours to P&U's
records necessary to determine the accuracy of any report or payment made in
respect to any calendar quarter and obtain information as to the amount payable
to DepoTech for any such period. Such examination shall be at DepoTech's
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expense and shall not take place more than once each year. However, if such
examination reveals an underpayment of monies owed to DepoTech in excess of ***,
then said examination shall be at P&U's expense. The right of examination with
respect to any year shall terminate *** after the end of any such year.
Information supplied to DepoTech by such independent, certified public
accountants shall not include any proprietary information not required to be
disclosed under other sections of this Agreement.
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Confidential Treatment and filed separately with the commission.
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ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 MUTUAL REPRESENTATIONS. Each party hereby represents and warrants to
the other as follows:
(a) Due Organization. It is a corporation duly organized and
validly existing and in good standing under the laws of its jurisdiction in
which it is chartered.
(b) Due Authority. It has the power and authority to execute and
deliver this Agreement, and to perform its obligations hereunder.
(c) No Conflict. The execution, delivery and performance by it of
this Agreement and its compliance with the terms and provisions hereof does not
and will not conflict with or result in a breach of any of the terms and
provisions of or constitute a default under (i) any loan agreement, guaranty,
financing agreement, agreement affecting any of the Patent Rights or Know How or
other agreement or instrument binding or affecting it or its property; (ii) the
provisions of its charter document or bylaws; or (iii) any material law, rule,
regulation or any order, writ, injunction or decree of any court or governmental
authority entered against it or by which any of its property is bound.
(d) Binding Obligation. This Agreement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation enforceable against it in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to the availability
of particular remedies under general equity principles.
(e) No Actions. There are no actions, suits or proceedings pending
or, to its knowledge, threatened against it or its Affiliates which affect its
ability to carry out its obligations under this Agreement.
10.2 DEPOTECH REPRESENTATIONS. In addition to the foregoing, DepoTech
represents, warrants and covenants to P&U as follows:
(a) No Proceedings. There are no actions, suits or proceedings
pending or, to DepoTech's knowledge, threatened against DepoTech or any of its
Affiliates, at law or in equity before any court or administrative office or
agency which affect the Patent Rights.
(b) No Infringement. To DepoTech's knowledge, practice of the
DepoTech Technology as contemplated by this Agreement will not involve any
infringement or constitute
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an unauthorized use of any patent, copyright, trade secret, proprietary
information, license or right therein belonging to any Third Party.
(c) Patents. Each of the patent applications included in the
Patent Rights is currently pending and in good standing, and has not been
abandoned. DepoTech has no knowledge of any facts or circumstances that could
adversely affect DepoTech's ability to obtain patents based on such applications
or the validity of such patents if any are issued.
(d) Conflicting Rights. DepoTech has not granted, and during the
term of this Agreement will not grant, any right to any Third Party relating to
the Patent Rights or the Know How in the Territory which would conflict with the
rights granted to P&U hereunder.
(e) Right to Practice. DepoTech's right to practice those aspects
of the DepoTech Technology embodied in those Patent Rights of DepoTech
identified on Exhibit B hereto as "RDF Patents" is held pursuant to an
exclusive, worldwide assignment of all right, title and interest in such Patent
Rights to DepoTech by RDF (such technologies, the "RDF Technologies").
(f) Status of RDF Agreements. DepoTech has provided to P&U a true,
correct and complete copy of that certain Assignment Agreement, dated as
February 9, 1994, between DepoTech and RDF (the "Assignment Agreement"). The
Assignment Agreement constitutes the only agreement between DepoTech and RDF
with respect to the RDF Technologies. DepoTech has complied with all obligations
imposed on it by the Assignment Agreement. The Assignment Agreement is in full
force and effect. To DepoTech's knowledge, no right, title or interest in any
aspect of the RDF Technologies is owned by any Third Party other than RDF. Under
the terms of the Assignment Agreement, DepoTech has the exclusive, worldwide
right to practice the RDF Technologies and to license the RDF Technologies to
P&U pursuant to this Agreement. DepoTech has no knowledge of any fact or
circumstance that could adversely affect DepoTech's rights to practice the RDF
Technologies in the Territory under the Assignment Agreement.
(g) RDF Agreement with P&U. DepoTech has delivered to P&U the
agreement of RDF, in form satisfactory to P&U, to grant rights to the RDF
Technologies to P&U on an exclusive basis throughout the Territory for the
purposes of conducting the development and commercialization program
contemplated by the parties under this Agreement in the event that DepoTech
shall, for any reason, no longer have the full and unencumbered right to grant
rights to the RDF Technologies to P&U (the "RDF Agreement").
(h) Compliance with RDF Agreements. DepoTech shall, for the
benefit of P&U, its Affiliates and sublicensees, faithfully and timely perform
and discharge its obligations
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to RDF under the Assignment Agreement.
(i) Disclosure of NDA. DepoTech has disclosed to P&U a correct and
complete copy of its NDA submitted to the United States Food and Drug
Administration.
ARTICLE 11
PATENTS
11.1 PATENT RIGHTS.DepoTech shall file, prosecute and maintain patent and
other regulatory applications with respect to Patent Rights in the Territory.
All costs incurred with respect to the filing, prosecution and maintenance of
the Patent Rights shall be borne by DepoTech. DepoTech shall give P&U an
opportunity to review the text of the patent applications included in the Patent
Rights before filing, and in good faith shall consider and incorporate the
reasonable requests of P&U. DepoTech shall supply P&U with a copy of such
applications as filed by DepoTech, together with notice of its filing date and
serial number. DepoTech shall keep P&U fully informed with copies of all
substantive communications to and from United States and foreign patent offices
regarding such application within a reasonable time prior to filing such
communication or promptly following receipt thereof, as the case may be.
DepoTech shall reasonably consider any comments P&U may have relating to such
applications or communications. In the event that DepoTech elects not to file a
patent application in the Patent Rights in any country in the Territory, or
decides to abandon any pending application or not to maintain any patent with
claims covering a Patent Right in any country in the Territory, it shall provide
adequate notice to P&U and give P&U the opportunity to file or maintain such
application or patent at its own expense. In the event P&U shall thereupon file
or maintain such application, DepoTech shall assign ownership of such Patent
Right and all costs of prosecution and maintenance of such Patent Rights shall
thereafter be borne by P&U. DepoTech and P&U shall also cooperate to obtain
supplementary protection certificates in respect to Patent Rights issued by each
national patent office in the European Union, and the equivalent patent term
extensions in Japan and other countries. Each application for such extensions
shall be prepared by P&U and timely submitted by DepoTech.
11.2 NO OTHER TECHNOLOGY RIGHTS. Except as otherwise provided in this
Agreement, under no circumstances shall a party hereto, as a result of this
Agreement, obtain any ownership interest or other right in any technology, trade
secrets, patents, pending patent applications, products of the other party,
including items owned, controlled or developed by the other, or
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transferred by the other to such party at any time pursuant to this Agreement.
11.3 ENFORCEMENT OF PATENT RIGHTS. *** shall use good faith efforts to
enforce the Patent Rights. Upon learning of a significant and continuing
infringement of any Patent Rights by a Third Party, DepoTech promptly shall
provide notice to P&U in writing of the fact and shall supply P&U with all
evidence possessed by DepoTech pertaining to and establishing said infringement.
*** shall have *** from the giving of notice under this Section, or such lesser
period of time if a further delay would result in ***, to abate the
infringement, to file suit against at least one of the infringers in a country
of the Territory, at its sole expense, following consultation with ***. ***
shall not be obligated to bring or maintain *** with respect to claims directed
to any one method or composition.
If *** does not, within *** days of the giving of such notice or such
lesser period of time if a further delay would result ***, abate the
infringement or file suit to enforce such Patent Rights against *** in a country
of the Territory, *** shall have the right to take whatever action it deems
appropriate in its own name or, if required by law, in the name of ***, to
enforce such Patent Rights. Regardless of which party takes an enforcement
action, all monies recovered upon the final judgment or settlement of any such
enforcement action (after reimbursement of all litigation costs and expenses
incurred by each party) shall be allocated in an equitable manner based on the
financial losses incurred by each party as a consequence of such third party's
acts in the Territory.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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11.4 THIRD PARTY CLAIM OF INFRINGEMENT.
(a) DepoTech Patent Rights; Defense by ***. If a claim of
infringement is brought against *** in any country in the Territory alleging
infringement of any patent in such country owned by a Third Party by reason of
the manufacture, use or sale of DepoCyt, or if *** becomes aware of any
potentially-infringing patent owned by a Third Party in any country in the
Territory, *** shall promptly give notice thereof to *** and provide *** with
all information in *** possession regarding such claim or potential
infringement. *** shall indemnify, defend and hold *** harmless against any
damages, costs, expenses and liabilities (including attorneys' fees and
expenses) arising out of such claim. *** shall conduct the defense of any suit
for infringement at its expense and *** may participate in such defense, at its
option and expense. *** shall furnish to *** such assistance as *** may
reasonably need and request from time to time for the conduct of the defense of
such suit. *** shall not dispose of or settle any such claim in any manner which
may *** prior written consent, which shall not be unreasonably withheld. If ***
defends against such claim or suit, there shall be *** hereunder; provided, that
*** by reason of any infringement, including any ***. Without limiting any
obligation of *** hereunder or any remedies available to ***, if *** fails to
defend such claim or suit, *** shall have the right to do so, and *** hereby
agrees to *** in connection with such defense.
(b) Damages. Without limiting *** obligations under Section
11.4(a), if as a result of any suit or claim falling within the provisions of
Section 11.4(a), *** for which *** is obligated to *** under Section 11.4(a),
*** which would otherwise be payable to ***. If *** becomes obligated to pay
damages, royalties or other costs to any Third Party (including royalties to
allow P&U to make, have made, use or sell DepoCyt), such amounts shall be ***.
***.
11.5 PATENT MARKING. P&U shall mark DepoCyt with appropriate patent
numbers or indicia at DepoTech's instruction and election, as, when and where
P&U may reasonably accommodate same, given packaging, printing schedules and
other factors, in those countries where such markings have notice value as
against infringers.
ARTICLE 12
CONFIDENTIALITY AND PUBLICATION
12.1 GENERAL. All Know-How or other confidential information or materials
disclosed by one party to the other prior to the date hereof or during the term
of this Agreement, including
*** Portions of this page have been omitted pursuant to a request
for Confidential Treatment and filed separately with the commission.
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chemical and biological materials ("Confidential Information"), shall not be
used by the receiving party except in connection with the activities
contemplated by this Agreement, shall be maintained in confidence by the
receiving party, and shall not be disclosed by the receiving party to any other
person, firm or agency, governmental or private, without the prior written
consent of the disclosing party, except to the extent Confidential Information
is:
(1) known by or in possession of the receiving party at the time
of its receipt as documented in written records;
(2) independently developed outside the scope of this Agreement by
employees of the receiving party having no access to or knowledge of the
Confidential Information disclosed hereunder;
(3) in the public domain at the time of its receipt or thereafter
becomes part of the public domain through no fault of the receiving party;
(4) received without an obligation of confidentiality from a Third
Party having the right to disclose such information;
(5) required to be disclosed to governmental agencies in order to
gain approval to sell DepoCyt, or disclosure is otherwise required by law,
regulation or governmental or court order (so long as the receiving party
provides notice of such disclosure, seeks to obtain protective orders or
other available confidentiality treatment and, in the case of disclosures
to the SEC, seeks confidential treatment to the extent reasonably
requested by the disclosing party);
(6) released from the restrictions of this Section 12.1 by the
express written consent of the disclosing party; or
(7) disclosed to agents, consultants, assignees, sublicensees or
subcontractors of P&U or DepoTech or their Affiliates which have a need to
know such information in connection with the performance of this
Agreement, provided that such persons are or agree to be subject to the
provisions of this Section 12.1 or substantially similar provisions.
12.2 CONFIDENTIALITY AGREEMENTS. P&U and DepoTech shall use all
commercially reasonable efforts to obtain, if not already in place,
confidentiality agreements from its relevant employees and agents, to protect
the confidential information as herein provided.
12.3 INJUNCTIVE RELIEF. Both parties acknowledge that either party would
not have an adequate remedy at law for breach of any of the covenants contained
in this Article 12 and hereby consent to the enforcement of same by the
non-breaching party by means of temporary or permanent injunction issued by any
court having jurisdiction thereof and further agrees that it be entitled to
assert any claim it may have for damages resulting from the breach of such
covenants in addition to seeking injunctive or other relief.
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12.4 PUBLICATION. During the term of this Agreement, P&U and DepoTech
each acknowledge the other party's interest in publishing certain of its results
to obtain recognition within the scientific community and to advance the state
of scientific knowledge. Each party also recognizes the mutual interest in
obtaining valid patent protection and protecting business interests.
Consequently, either party, its employees or consultants wishing to make a
publication (including any oral disclosure made without obligation of
confidentiality) relating to work performed by such party as part of the
activities being conducted under this Agreement (the "Publishing Party") shall
transmit to the other party (the "Reviewing Party") a copy of the proposed
written publication or an outline of such oral disclosure at least fifteen (15)
days prior to submission for publication or oral disclosure. To the extent such
publications or disclosures contain clinical or other data generated by P&U or
information about clinical or sales results in the Territory, such publication
or disclosure shall not be made without the prior written consent of P&U, which
consent shall not be unreasonably withheld. The parties will jointly issue press
releases following the execution of this Agreement, the form and substance of
which shall be approved by both parties.
12.5 TERMINATION. All obligations of confidentiality imposed under this
Article 12 shall expire ten (10) years following termination of this Agreement.
ARTICLE 13
INDEMNIFICATION
13.1 DEPOTECH INDEMNIFICATION. DepoTech shall indemnify and hold P&U, its
directors, officers, employees, agents, Affiliates and sublicensees harmless
against all claims, damages, liabilities, losses, costs and expenses
(collectively, "Claims") arising from ***.
13.2 P&U INDEMNIFICATION. P&U shall indemnify and hold DepoTech, its
directors, officers, employees, agents, Affiliates and sublicensees harmless
against all Claims arising from any ***.
13.3 MUTUAL INDEMNIFICATION. Each party agrees to indemnify and hold the
other party and its Affiliates, officers, directors, employees, agents and
shareholders harmless against any and all Claims arising out of or in connection
with (a) the breach by the indemnifying party
*** Portions of this page have been omitted pursuant to a request for
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of any of its representations or warranties contained in this Agreement or (b)
the nonperformance, partial or total, of any covenants of the indemnifying party
contained in this Agreement (including its Exhibits).
13.4 PROCEDURE.
(a) Notice to Indemnifying Party. As a condition to the
indemnified party's right to indemnification under this Section, the indemnified
party shall give prompt written notice to the indemnifying party of any suits,
claims or demands by third parties or the indemnified party which may give rise
to any loss for which indemnification may be required under this Section. The
indemnifying party shall be entitled to assume the defense and control of any
suit, claim or demand of any third party at its own cost and expense; provided,
that the other party shall have the right to be represented by its own counsel
at its own cost in such matters. In the event that the indemnifying party shall
decline to assume control of any such suit, claim or demand, the party entitled
to indemnification shall be entitled to assume such control, conduct the defense
of, and settle such suit, claim or action, all at the sole cost and expense of
the indemnifying party. The indemnifying party shall not settle or dispose of
any such matter in any manner which would adversely impact the rights or
interests of the indemnified party without the prior written consent of the
indemnified party, which shall not be unreasonably withheld.
(b) Joint Defense.***.
13.5 PRODUCT LIABILITY INSURANCE.***.
ARTICLE 14
TERM AND TERMINATION
14.1 TERM. (a) The exclusive rights granted under Section 2.1 shall
remain in effect, on a country-by-country basis until the later of (a) *** from
the date of First Commercial Sale in such country or (b) the last-to-expire of
the Patent Rights in such country claiming DepoCyt or its method of manufacture
or use which, but for the rights granted hereunder, would be infringed by P&U.
Thereafter, P&U shall have a fully-paid up, non-exclusive right under Section
2.1 in such country, including the right to manufacture anywhere in the world
Vialed Material and DepoCyt for sale in such country. Notwithstanding such
conversion of such exclusive rights, the exclusive trademark license granted to
P&U under Section 3.3(b) shall continue for all trademarks of DepoTech then used
by P&U in connection with the sale of DepoCyt. Upon
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Confidential Treatment and filed separately with the commission.
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expiration of such exclusive rights in a country (and expiration of any market
exclusivity, orphan drug designations or other exclusivity rights), P&U shall
grant DepoTech the right to reference its NDAs in connection with DepoTech's
regulatory filings to obtain approval to sell DepoCyt in such country.
(b) All references in this Agreement to the "term of this
Agreement" or words of similar meaning shall mean the period ending upon the
expiration pursuant to paragraph (a) above of all exclusivity rights granted
under Section 2.1 in all countries of the Territory. All references in this
Agreement to the "termination of this Agreement" or words of similar meaning
shall mean the period ending upon the earlier of (i) the expiration pursuant to
paragraph (a) above of all exclusivity rights granted under Section 2.1 in all
countries of the Territory, or (ii) the termination of this Agreement under
Sections 14.3, 14.4 or 14.5.
14.2 MANUFACTURING TERM. The term of DepoTech's manufacturing and supply
obligations shall be co-extensive with the term set forth above, except that it
shall continue indefinitely thereafter until either party elects to terminate
upon *** prior notice. Following such termination of P&U's exclusive rights as
provided in Section 14.1, if P&U does not elect to manufacture Vialed Material
itself under the paid up rights granted under Section 14.1, DepoTech shall
continue to supply Vialed Material on such commercially reasonable terms as the
parties shall negotiate in good faith, which terms shall include a reduced
Supply Price to reflect P&U's paid up rights, the then current patent position
of DepoCyt in the Territory and the expiration of DepoTech's payment obligations
to RDF.
14.3 OTHER CAUSES FOR TERMINATION. Either party may terminate this
Agreement by written notice to the other in the event that (i) the other party
fails to perform any material obligation hereunder and such failure is not cured
within ninety (90) days following notice thereof from the nondefaulting party,
except obligations under Section 3.4 or Article 8, as to which the sole remedies
are set forth therein, or (ii) any bankruptcy, receivership, insolvency or
reorganization proceedings are instituted by the other party or any such
proceedings are instituted against the other party and not dismissed within
ninety (90) days. The failure to obtain the approvals to sell DepoCyt referred
to in Section 5.4 above prior to the dates set forth therein shall be deemed a
breach by DepoTech of a material obligation.
(a) Breach. If either party terminates this Agreement pursuant to
clause (i) hereof, then the terminating party shall be entitled to pursue all of
its legal and contractual remedies (but in no event shall it be entitled to
recover lost profits or other consequential
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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damages). In the event of such a termination, the non-breaching party shall have
the ***. Additionally, if P&U is the breaching party and to the extent allowed
under applicable law, all registrations held by P&U to sell DepoCyt shall be
transferred, at DepoTech's expense, to DepoTech. P&U shall also then grant
DepoTech the right to use any of P&U's trademarks then used by P&U exclusively
for DepoCyt.
(b) Bankruptcy. If either party terminates this Agreement pursuant
to clause (ii) hereof, the terminating party shall have an exclusive right in
the Territory (including the right to grant rights under the rights granted
hereunder) to make, have made, use and sell DepoCyt, subject to all royalty
obligations to Third Parties. If P&U terminates this Agreement pursuant to
clause (ii) hereof, it shall in addition have the exclusive right (including the
right to grant rights thereunder) to make, have made, use and sell DepoCyt in
the Territory, subject to an obligation to pay to DepoTech an amount equal to
10% of Net Sales. The rights granted to P&U by DepoTech pursuant to this
Agreement constitute "intellectual property" within the meaning of Sections 101
and 365(n) of the United States Bankruptcy Code (the "Code") and the rights of
P&U to obtain DepoTech Technology in the event of a DepoTech bankruptcy pursuant
to any escrow or similar arrangement are "supplementary to" such rights within
the meaning of Section 365(n) of the Code.
14.4 PATENT CHALLENGE. DepoTech shall have the right to terminate this
Agreement if P&U commences legal proceedings to challenge the validity of the
Patent Rights within any country in the Territory and does not withdraw such
challenge within 60 days after written request from DepoTech, which shall have
been given within 30 days after commencement of such proceedings.
14.5 TERMINATION BY P&U. P&U shall have the right at any time to
terminate this Agreement upon *** prior notice to DepoTech. In the event of such
a termination, all of P&U's rights to DepoCyt shall revert to DepoTech, and P&U
shall grant DepoTech the perpetual, royalty-free, exclusive right to make, have
made, use and sell Vialed Material and DepoCyt in the Territory. Additionally,
to the extent allowed under applicable law, all registrations held by P&U to
sell DepoCyt shall be transferred to DepoTech at P&U's expense for its internal
costs and DepoTech's expense for fees and expenses payable to Regulatory
Authorities and other Third Parties.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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14.6 SURVIVAL OF OBLIGATIONS. No termination of this Agreement shall
eliminate any rights and obligations accrued prior to such termination. Promptly
following any termination of this Agreement under Sections 14.3, 14.4 or 14.5,
each party shall return all written materials containing Confidential
Information, except one copy that may be retained for record keeping purposes
only. The provisions of Articles 12, 13, 15 and 16 and Sections 9.4, 11.4, 14.6,
14.7(b), 14.7(c) (under the terms set forth therein) and 14.10 of this Agreement
and Paragraphs 5.1(e), (f), and (g), 5.2(e), (f) (i) and (l), 8, 9, and 10.3 of
Exhibit E shall survive any termination of this Agreement; provided, that
neither party shall be liable to the other under Article 13 with respect to
Claims arising out of the other party's activities with respect to DepoCyt
occurring following termination of this Agreement.
14.7 MANUFACTURING LICENSES TO P&U. Upon the occurrence of the following
conditions or events P&U shall have the right to manufacture Vialed Material:
(a) Upon the occurrence of the conditions referred to in Section
8.1 or 8.2 above, DepoTech shall grant P&U a non-exclusive, perpetual (so long
as P&U complies with the terms of this license), sublicensable right and license
to use the DepoTech Technology anywhere in the world solely to manufacture and
have manufactured the quantities of Vialed Material DepoTech does not supply as
provided in such Sections for use and sale in the Territory. P&U shall pay an
amount on its sales of DepoCyt so manufactured by or for it equal to *** of Net
Sales of such DepoCyt.
(b) Upon the expiration, on a country-by-country basis, under
Section 14.1 of the exclusive rights granted hereunder, DepoTech shall grant P&U
non-exclusive, royalty-free, perpetual (so long as P&U complies with the terms
of this license), sublicensable rights under the DepoTech Technology solely to
manufacture and have manufactured DepoCyt and Vialed Material anywhere in the
world for use and sale in the Territory, except to the extent P&U then obtains
Vialed Material or DepoCyt from DepoTech.
(c) Upon the termination of this Agreement by P&U under Section
14.3, DepoTech shall grant P&U an exclusive, royalty-free, perpetual (so long as
P&U complies with the terms of this license), sublicensable right and license
under the DepoTech Technology solely to manufacture and have manufactured
DepoCyt and Vialed Material anywhere in the world for use and sale in the
Territory. In each such case, at the request of P&U, DepoTech shall provide P&U
or its designee with all available information and data comprising any such
technology and shall render reasonable technical assistance to enable P&U or its
designee to manufacture Vialed Material and DepoCyt in a commercial manner, to
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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validate its production facility in accordance with all regulatory requirements,
to obtain all process equipment and raw materials not commercially available and
to obtain regulatory approval to sell DepoCyt so manufactured by or for P&U.
Unless arising under paragraph (c) above, P&U shall compensate DepoTech for all
reasonable costs and expenses incurred by DepoTech in providing such information
and data and rendering such technical assistance.
14.8 CHANGE OF CONTROL OF DEPOTECH. In the event that a Third Party
active in the pharmaceutical industry (the "Acquiring Party") shall acquire by
stock purchase, merger or otherwise, directly or indirectly, *** or more of the
outstanding shares entitled to vote for the election of directors of DepoTech,
or substantially all of its assets to which this Agreement relates, P&U shall
have the right, within *** of such acquisition, to *** upon 30 days notice to
the Acquiring Party and to DepoTech, except for the sales reports referred to in
Section 7.3(a) above and as otherwise required by law.
14.9 ACQUISITIONS BY P&U. In the event that P&U shall acquire control of
any Third Party which is a competitor of DepoTech in the development of
alternative drug delivery technologies suitable for use for the indications for
which DepoCyt is approved, P&U agrees ***.
14.10 RDF AND CHIRON RIGHTS.
(a) In the event that the RDF shall, by notice to P&U given
pursuant to the RDF Agreement or otherwise, indicate that DepoTech has breached
an obligation to RDF under the Assignment Agreement or any other agreement with
RDF which relates to the DepoTech Technology licensed to P&U hereunder, P&U may
in its discretion proceed to cure any such breach and shall be entitled to
immediately offset the cost of any such cure against amounts due to DepoTech
hereunder, or to otherwise recover such amounts from DepoTech by process of law.
(b) In the event the (i) DepoTech's rights to the Assigned
Proprietary Technologies (as that term is defined in the Assignment Agreement)
are reconveyed to the RDF or its assigns pursuant to the terms of the Assignment
Agreement, or (ii) DepoTech's rights under the Assignment Agreement are
converted into a non-exclusive license to the Assigned Proprietary Technologies,
then P&U shall have the right, in its sole discretion, to enter into such
agreement or agreements with RDF as P&U deems necessary or desirable to secure
an exclusive license to the Assigned Proprietary Technologies within the
territories and for the purposes contemplated by this Agreement, and to
immediately offset any amounts that may be payable to RDF under
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such agreement or agreements against amounts due to DepoTech hereunder, or to
otherwise recover such amounts from DepoTech by process of law.
(c) In respect to DepoTech's agreement with Chiron concerning the
termination of Chiron's rights to sell DepoCyt in the Territory, P&U shall have
the right, similar to that provided in paragraph (a) above, to cure any breach
by DepoTech of its obligation to Chiron and offset the cost of such cure; and
P&U shall have the right, similar to that provided in paragraph (b) above, to
enter into an agreement directly with Chiron in the event such rights to DepoCyt
revert to Chiron.
ARTICLE 15
ALTERNATIVE DISPUTE RESOLUTION
15.1 EXECUTIVE MEDIATION. The parties recognize that a bona fide dispute
as to certain matters may from time to time arise during the term of this
Agreement which relate to either party's rights or obligations hereunder. In the
event of the occurrence of such a dispute, either party may, by written notice
to the other, have such dispute referred to their respective officer designated
below or their successors, for attempted resolution by good faith negotiations
within sixty (60) days after such notice is received. Said designated officers
are as follows:
For DepoTech - Chief Executive Officer
For P&U - Managing Director
In the event the designated officers are not able to resolve such dispute
within such thirty (30) day period, any party may invoke the provisions below.
15.2 INITIATION OF ADR.
(a) Any dispute arising out of or relating to this Agreement,
including any question regarding its existence, validity or termination, which
is not resolved under the procedure set forth in Section 15.1 above shall be
referred to and finally resolved by arbitration in London, England under the
Rules of the London Court of International Arbitration ("LCIA") by three (3)
arbitrators appointed in accordance with said Rules (i.e., two party-appointed
arbitrators shall select the third arbitrator). The decision reached by such
arbitrators in any such proceeding shall be final and binding upon the parties
thereto. The parties shall, however, in addition to the rights provided in
Section 12.3, remain free to apply to any competent judicial authority for
interim or conservatory measures, even after the transmittal of the file to the
aforesaid arbitrators and even if there are no exceptional circumstances. The
arbitration proceedings shall be conducted in the English language.
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(b) Whenever a party shall decide to institute arbitration
proceedings, it shall give sixty (60) days' prior written notice to that effect
to the other party.
(c) The arbitration tribunal shall determine the proportion in
which the parties shall pay the costs and fees of the arbitration. Each party
shall pay its own costs (including, without limitation, attorneys' fees) and
expenses in connection with such arbitration.
(d) The arbitration proceedings shall be confidential and the
tribunal shall issue appropriate protective orders to safeguard each party's
Confidential Information. Except as required by law, no party shall make (or
instruct the tribunal to make) any public announcement with respect to the
proceedings or decision of the neutral without the prior written consent of each
other party. The existence of any dispute submitted to arbitration, and the
award of the tribunal, shall be kept in confidence by the parties and the
neutral, except as required in connection with the enforcement of such award or
as otherwise required by applicable law.
(e) Any judgment upon the award rendered by the tribunal may be
entered in any court having jurisdiction thereof.
ARTICLE 16
MISCELLANEOUS
16.1 FORCE MAJEURE. Each party shall be excused for any failure or delay
in performing any of its obligations under this Agreement (except payment
obligations), if such failure or delay is caused by Force Majeure. For purposes
of this Agreement, "Force Majeure" shall mean any act of God, accident,
explosion, fire, storm, earthquake, flood, drought, riot, embargo, civil
commotion, war, act of war, strike or other labor difficulty or any other
similar or dissimilar circumstances or event beyond the reasonable control of
the party relying upon such circumstance or event.
16.2 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY OR ITS
AFFILIATES BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE,
FAILURE TO WARN OR FAILURE TO TEST), STRICT LIABILITY OR OTHERWISE, including,
but not limited to, loss of profits or revenue, except to the extent such
damages are claimed by third parties and for which either party is required to
indemnify the other party under Section 11.4 or Article 13.
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16.3 RELATIONSHIP OF THE PARTIES. The parties agree that each is acting
as an independent contractor with respect to the other and nothing contained in
this Agreement is intended, or is to be construed, to constitute P&U and
DepoTech as partners or joint venturers or DepoTech or P&U as an agent of the
other. Neither party hereto shall have any express or implied right or authority
to assume or create any obligations on behalf of or in the name of the other
party or to bind the other party to any contract, agreement or undertaking.
16.4 NOTICES. Any notice or other communication hereunder shall be in
writing and shall be deemed given when so delivered in person, by overnight
courier (with receipt confirmed) or by facsimile transmission (with receipt
confirmed by telephone or by automatic transmission report) as follows (or to
such other address as may be specified in writing to the other party hereto):
DepoTech Corporation
10450 Science Center Drive
San Diego, CA 92121
Attention: President
Facsimile: (619) 623-0376
Copy to:
Brobeck, Phleger & Harrison LLP
550 West C Street, Suite 1300
San Diego, CA 92101
Attention: Faye H. Russell, Esq.
Facsimile: (619) 234-3848
Pharmacia & Upjohn S.p.A.
Via Robert Koch, 1.2
20152 Milano, Italy
Attention: Managing Director
Facsimile: +39 2 4838 2033
Copy to:
Wiggin & Dana
301 Tresser Blvd.
Stamford, CT 06901
Attention: James F. Farrington, Jr.
Facsimile: (203) 363-7676
16.5 SUCCESSORS AND ASSIGNS. The terms and provisions of this Agreement
shall inure to the benefit of, and be binding upon, P&U, DepoTech, and their
respective successors and
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assigns; provided, that neither P&U nor DepoTech may transfer or assign any of
its rights and obligations hereunder without the prior written consent of the
other, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, either party may transfer or assign any of its rights and obligations
hereunder to an Affiliate or a person that acquires all or substantially all of
the assets of such party to which this Agreement relates or pursuant to a merger
or consolidation. Each party shall notify the other within thirty (30) days
prior to any such transfer, assignment, merger or consolidation. Any purported
assignment in contravention of this Section 16.5 shall, at the option of the
nonassigning party, be null and void and of no effect.
16.6 AMENDMENTS AND WAIVERS. No amendment, modification, waiver,
termination or discharge of any provision of this Agreement, nor consent to any
departure by P&U or DepoTech therefrom, shall in any event be effective, unless
the same shall be in writing specifically identifying this Agreement and the
provision intended to be amended, modified, waived, terminated or discharged and
signed by the party against whom enforcement of such amendment is sought, and
each amendment, modification, waiver, termination or discharge shall be
effective only in the specific instance and for the specific purpose for which
given. No provision of this Agreement shall be varied, contradicted or explained
by any oral agreement, course of dealing or performance or any other matter not
set forth in an agreement in writing and signed by the party against whom
enforcement of such variance, contradiction or explanation is sought.
16.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (USA), without regard to its
conflict of laws rules (and without limiting the foregoing, the United Nations
Convention On Contracts for International Sale of Goods [1980] shall not govern
this Agreement).
16.8 ATTORNEYS' FEES. Each party shall bear its own legal fees incurred
in connection with the transactions contemplated hereby.
16.9 SEVERABILITY. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the parties hereto as nearly as may be
possible; provided, that nothing herein shall be construed so as to defeat the
overall intention
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42
of the parties.
16.10 USE OF NAMES. Neither party shall use the name, trade name or
trademark of the other party in connection with this Agreement without the
express prior written consent of the other party, and nothing herein shall be
deemed to require any party to use any name or mark of the other party in
connection with commercialization of DepoCyt hereunder, except as set forth in
this Agreement.
16.11 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same instrument.
16.12 ENTIRE AGREEMENT. This Agreement, together with all exhibits and
schedules attached hereto and all documents referred to herein, contains the
entire agreement and understanding of the parties hereto, and supersedes any
prior agreements or understandings between the parties with respect to the
subject matter hereof including without limitation the letter of intent between
the parties dated February 19, 1997.
16.13 EXPORT CONTROL. P&U agrees not to export, or allow the export or
reexport of any DepoCyt outside the Territory. In addition, P&U agrees to comply
with all export laws and regulations governing the import or export of DepoCyt
within the Territory.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
39
43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as an instrument under seal and delivered as of the date first
above written.
DEPOTECH CORPORATION
/s/ Edward L. Erickson
-----------------------------------------
By: Edward L. Erickson
President and Chief Executive Officer
PHARMACIA & UPJOHN S.P.A.
/s/ Lamberto Andreotti
---------------------------------
By: Lamberto Andreotti
Managing Director
40
44
EXHIBIT A
CLINICAL PLAN
SEE ATTACHED 2 PAGES
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
41
45
EXHIBIT A
CLINICAL PLAN
EUROPE
***
JAPAN
***
PHASE V
***
46
DEPOTECH CORPORATION
PU COST PROJECTION
DEPOCYT
(IN 000'S)
JAPAN TOTAL EUROPE TOTAL
------------------------------ ------------------------------
1997 1998 1999 JAPAN 1997 1998 1999 EUROPE
------- ------- ------- -------- ------- ------- ------- --------
CLINICAL COSTS
CRO Payments *** *** *** *** *** *** *** ***
Toxicology Study *** *** *** *** *** *** *** ***
Other *** *** *** *** *** *** *** ***
------------------------------ ---------- ------------------------------ ----------
Total
------------------------------ ---------- ------------------------------ ----------
REGULATORY SUPPORT
Labor & Travel *** *** *** *** *** *** *** ***
Regulatory Consulting *** *** *** *** *** *** *** ***
------------------------------ ---------- ------------------------------ ----------
Total
------------------------------ ---------- ------------------------------ ----------
MANUFACTURING *** *** *** *** *** *** *** ***
REGULATORY FEES *** *** *** *** *** *** *** ***
OVERHEAD *** *** *** *** *** *** *** ***
------------------------------ ---------- ------------------------------ ----------
TOTAL DEPOCYT
============================== ========== ============================== ==========
CANADA TOTAL TOTAL
-------------------------------
1997 1998 1999 CANADA EX-U.S.
------- ----- ------ ------- --------
CLINICAL COSTS
CRO Payments *** *** *** *** ***
Toxicology Study *** *** *** *** ***
Other *** *** *** *** ***
------------------------------- -------------------------
Total
------------------------------- -------------------------
REGULATORY SUPPORT
Labor & Travel *** *** *** *** ***
Regulatory Consulting *** *** *** *** ***
------------------------------- -------------------------
Total
------------------------------- -------------------------
MANUFACTURING *** *** *** *** ***
REGULATORY FEES *** *** *** *** ***
OVERHEAD *** *** *** *** ***
------------------------------- -------------------------
TOTAL DEPOCYT
=============================== =========================
47
EXHIBIT B
DEPOTECH PATENT RIGHTS
SEE THE ATTACHED FOUR PAGES
All Patents marked with an asterisk are subject to the terms of the
Assignment Agreement with RDF.
42
48
EXHIBIT B
DEPOTECH PATENT RIGHTS
All Patent marked with an asterisk (*) are subject to the terms of the
Assignment Agreement with RDF.
- -----------------------------------------------------------------------------------------------------------------------------
DEPOTECH PATENTS AND APPLICATIONS COVERING DepoCyt(TM)
- -----------------------------------------------------------------------------------------------------------------------------
Patent Application Title/Claims Patent Number Date of Country Status Expiration Date
Issuance
- -----------------------------------------------------------------------------------------------------------------------------
*"Multivesicular Liposomes Having A Biologically Expected USA Notice of Expected
Active Substance Encapsulated therein in the Sept. 1997 Allowance Sept. 2011
presence of A Hydrochloride" - 43 Process Claims June 1997
- -----------------------------------------------------------------------------------------------------------------------------
*"Multivesicular Liposomes Having a Biologically Expected USA Notice of Expected
Active Substance Encapsulated Therein in the Sept. 1997 Allowance Sept. 2011
presence of A Hydrochloride" -7 Composition June 1997
claims and 1 Method of Treatment Claim
- -----------------------------------------------------------------------------------------------------------------------------
*"Multivesicular Liposomes Having A Biologically EPO Published
Active Substance Encapsulated Therein in the 8/31/88
presence of A Hydrochloride" - 22 Process Claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 04/07/93 Austria Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 602190 02/23/88 Australia Issued 2/23/2008
23 process claims, 5 method claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 04/07/93 Belgium Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 1323568 10/26/93 Canada Issued 10/26/2010
23 process claims, 5 method claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 04/07/93 Switzerland Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
49
- -----------------------------------------------------------------------------------------------------------------------------
DEPOTECH PATENTS AND APPLICATIONS COVERING DepoCyt(TM)
- -----------------------------------------------------------------------------------------------------------------------------
Patent Application Title/Claims Patent Number Date of Country Status Expiration Date
Issuance
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 04/07/93 Germany Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 172057 10/16/97 Denmark Granted 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 04/07/93 EPC Granted 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 04/07/93 Spain Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
*"Multivesicular Liposomes Having A Biologically 95439 02/12/96 Finland Issued 2/23/2008
Active Substance Encapsulated Therein in the
presence of A Hydrochloride" - 22 Process Claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 4/07/93 France Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 4/07/93 Great Britain Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 4/07/93 Greece Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 62221 1/11/95 Ireland Issued 2/23/2008
23 process claims, 1 method
- -----------------------------------------------------------------------------------------------------------------------------
50
- -----------------------------------------------------------------------------------------------------------------------------
DEPOTECH PATENTS AND APPLICATIONS COVERING DepoCyt(TM)
- -----------------------------------------------------------------------------------------------------------------------------
Patent Application Title/Claims Patent Number Date of Country Status Expiration Date
Issuance
- -----------------------------------------------------------------------------------------------------------------------------
*"Multivesicular Liposomes Having a Biologically 85509 6/30/92 Israel Issued 2/23/2008
Active Substance Encapsulated Therein in the
presence of A Hydrochloride" - 22 Process and 3
Compositions Claims, 2 method claims"
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 4/07/93 Italy Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " Japan Pending
22 process claims, 5 method claims
- -----------------------------------------------------------------------------------------------------------------------------
* " South Korea Allowed
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 4/07/93 Luxembourg Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 4/07/93 Netherlands Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 174087 3/16/94 Norway Issued 2/22/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 223599 1/25/91 New Zealand Issued 2/22/2008
28 process claims, 6 method claims (from spec)
- -----------------------------------------------------------------------------------------------------------------------------
* " 86805 5/29/92 Portugal Issued 2/22/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 0280503 4/07/93 Sweden Issued 2/23/2008
22 process claims
- -----------------------------------------------------------------------------------------------------------------------------
51
- -----------------------------------------------------------------------------------------------------------------------------
DEPOTECH PATENTS AND APPLICATIONS COVERING DepoCyt(TM)
- -----------------------------------------------------------------------------------------------------------------------------
Patent Application Title/Claims Patent Number Date of Country Status Expiration Date
Issuance
- -----------------------------------------------------------------------------------------------------------------------------
*"Multivesicular Liposomes Having a Biologically 39083 05/01/90 Taiwan Issued 2/23/2008
Active Substance Encapsulated Therein in the
presence of A Hydrochloride" - 22 Process Claims
- -----------------------------------------------------------------------------------------------------------------------------
* " 88/1241 10/26/88 South Africa Issued 2/23/2008
22 process claims, 5 method claims
- -----------------------------------------------------------------------------------------------------------------------------
"Method for treating Neurologic Disorders" - 4 US 5,455,044 10/03/95 USA Issued 10/03/2012
Method Claims
- -----------------------------------------------------------------------------------------------------------------------------
"Method for treating Neurologic Disorders" - 5 US 5,576,018 11/19/96 USA Issued 11/19/2013
Method Claims
- -----------------------------------------------------------------------------------------------------------------------------
"Method for treating Neurologic Disorders" - 47 Canada Pending
Method Claims
- -----------------------------------------------------------------------------------------------------------------------------
" Japan Pending
- -----------------------------------------------------------------------------------------------------------------------------
DepoCyt "Species" patent - narrow species To be filed 2Q97 in the US,
patent to cover DepoCyt formulation and PCT, and other countries
oncology uses for this formulation
- -----------------------------------------------------------------------------------------------------------------------------
52
EXHIBIT C
SPECIFICATIONS FOR VIALED MATERIAL AND DEPOCYT
SEE THE ATTACHED 2 PAGES
43
53
EXHIBIT C
SPECIFICATIONS FOR VIALED MATERIAL AND DEPOCYT
(AS OF 11/22/97 PRE-NDA SUBMISSION)
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
44
54
EXHIBIT C
TENTATIVE MODIFICATIONS TO DEPOCYT SPECIFICATIONS TO COMPLY WITH EU
REQUIREMENTS
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
45
55
EXHIBIT D
ANNUAL SALES FORECAST
Set forth below is P&U's non-binding forecast of its estimated sales of DepoCyt
for the *** following the First Commercial Sale in the ***. Such estimated
requirements are based on the following assumptions:
1. ***
2. The Initial Indication is ***.
3. Sales price is *** per vial, and ***.
4. Approved labeling contains ***.
SALES IN ***
Country Year 1 Year 2 Year 3
------- ------ ------ ------
*** *** *** ***
TOTAL *** *** ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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EXHIBIT E
ADDITIONAL TERMS AND CONDITIONS OF SALE
1. QUANTITY; FORECASTS; ORDER PROCEDURE.
1.1 P&U agrees to purchase the Vialed Material in production batch
quantities (approximately *** vials) or multiples thereof.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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57
1.2 Within 30 days after submission of the first NDA in the EU, P&U
shall deliver to DepoTech a non-binding, good-faith *** forecast of purchases of
Vialed Material (such forecast shall be provided within 60 days from the date
hereof in respect to Canada). Beginning on the first day of the *** which is ***
immediately prior to the *** in which the First Commercial Sale of DepoCyt in
the Territory is projected to occur, P&U shall provide to DepoTech a rolling
forecast of purchases of Vialed Material for the following ***, including
desired delivery dates. Thereafter, P&U shall provide such rolling forecast to
DepoTech every *** during the term of this Agreement. The first *** of each
rolling forecast shall be a firm order by P&U, against which DepoTech is
authorized to institute production and P&U is authorized to give shipping
orders. The total amount of Vialed Material ordered by P&U for delivery in the
first *** of such forecast shall be not less than *** (the "Minimum Order
Amount") or more than *** (the "Maximum Order Amount") of the most recent
forecast for Vialed Material for such ***. If P&U's requirement hereunder for
any quarter exceeds the Maximum Order Amount, DepoTech and P&U will discuss in
good faith the additional amount which DepoTech will be able to supply
consistent with its other obligations and P&U will adjust its order accordingly.
P&U shall indemnify DepoTech and reimburse it promptly upon request for all
reasonable out-of-pocket costs and expenses, including the cost of carrying
increased inventory, to the extent caused by any P&U failure to order at least
the Minimum Order Amount, and DepoTech shall act reasonably to mitigate any such
costs and expenses. To the extent DepoTech fails to deliver Vialed Material in
the quantities required under this Paragraph 1.2 or within the time period
required under Paragraph 2.1 below, the Supply Price for such Vialed Material
shall be *** of the amount otherwise due. P&U shall exercise reasonable efforts
to level load its production requirements in recognition of DepoTech's finite
capacity and the lead times necessary for production.
1.3 Vialed Material shall be ordered on P&U or its designees' standard
purchase order forms. The only function of the purchase order is to set forth
the quantities of Vialed Material desired by the desired delivery dates for the
quantity of Vialed Material ordered and shipping destination of Vialed Material.
Within five (5) business days, DepoTech shall either acknowledge receipt of the
purchase order on DepoTech's standard acknowledgment form, or contact P&U about
DepoTech's ability to supply quantities of Vialed Material in excess of the
forecast, and/or alternative ship dates which shall be agreed to in writing
using the purchase order form and acknowledgment form. Except as otherwise set
forth above, the only function of DepoTech's acknowledgment form is to
acknowledge receipt of the purchase order. All other terms and conditions of
either the purchase orders or the acknowledgment forms are void and of no
effect, and the terms and conditions of this Agreement shall control.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
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58
1.4 P&U's forecasts and purchase orders shall reflect its good faith
expectations of customer demand and P&U shall act in a commercially reasonable
manner to schedule orders to avoid creating production capacity problems for
DepoTech.
2. DELIVERY.
2.1 Vialed Material shall be delivered to P&U DDP (INCOTERMS 1990) P&U's
warehouses in the Territory within five (5) business days of the applicable
delivery dates set forth in the purchase orders. All customs, duties, costs,
taxes, insurance premiums and other expenses relating to such transportation and
delivery shall be at DepoTech's expense. All Vialed Material shall be delivered
with a remaining shelf life of at least ***. If technically feasible and
approved by the appropriate Regulatory Authority, the shelf life shall be
increased to *** (including *** of inventory held by DepoTech under the
Agreement) after completion of required stability tests.
2.2 DepoTech shall package Vialed Material for delivery to P&U according
to the Specifications. DepoTech shall include with each shipment copies of all
applicable quality and testing records, which shall be in a form acceptable for
the appropriate Regulatory Authorities.
3. SPECIFICATIONS. Either of the parties shall have the right to request
changes to the Specifications. Such request shall be made in writing. No change
shall be implemented by either party, whether requested by a party or by a
Regulatory Authority, until the parties have mutually agreed in writing to such
change and the implementation date of such change, subject to the receipt of any
necessary approvals by a Regulatory Authority. The reasonable costs incurred to
implement such changes to the Specifications shall be borne as follows: (a) in
the event the change to the Specifications is requested by *** and requires a
change in the NDA, *** shall bear all such costs; (b) in the event the change to
the Specifications is required by *** shall bear all such costs; and (c) in the
event the change to the Specifications is otherwise required by ***.
Notwithstanding the foregoing, DepoTech shall be solely responsible for any
changes to the Specifications required to obtain approvals of NDAs to sell
DepoCyt in the EU, Canada and Japan.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
49
59
4. NONCONFORMING VIALED MATERIAL.
4.1 P&U may reject any shipment of Vialed Material which is not
conforming with the Specifications. In order to reject a shipment, P&U must (i)
give notice to DepoTech of P&U's intent to reject the shipment within sixty (60)
days of receipt together with a detailed written indication of the reasons for
such possible rejection, and (ii) as promptly as reasonably possible thereafter
but in any event within an additional thirty (30) days, provide DepoTech with
notice of final rejection and the full basis therefor. After notice of intention
to reject is given, P&U shall cooperate with DepoTech in determining whether
rejection is necessary or justified. If no such notice of intent to reject is
timely received, P&U shall be deemed to have accepted such delivery of Vialed
Material. DepoTech shall notify P&U as promptly as reasonably possible whether
it accepts P&U's basis for any rejection. DepoTech shall promptly replace all
Vialed Material properly rejected, at its expense.
4.2 Unless DepoTech requests the return to it of a rejected batch within
sixty (60) days of receipt of P&U's notice of rejection, P&U shall destroy such
batch promptly, at DepoTech's expense, and provide DepoTech with certification
of such destruction. P&U shall, upon receipt of DepoTech's request for return,
promptly dispatch said batch to DepoTech, at DepoTech's cost.
5. DEPOTECH AND P&U DUTIES.
5.1 P&U shall:
(a) order and receive labeling and other packaging supplies from
vendors;
(b) package and label Vialed Material for sale to Third Parties in
accordance with the Specifications;
(c) perform identity testing of Vialed Material and final release
testing of DepoCyt in accordance with all applicable regulatory requirements and
agreed testing procedures, including the use of a "qualified person" (as
required by EU Directive 75/319/EEC; Article 21 or any successor regulation);
(d) ascertain and comply with all applicable laws and regulations
and standards of industry or professional conduct in connection with the use,
distribution or promotion of DepoCyt, including without limitation, those
applicable to product claims, labeling, approvals, registrations and
notifications; and
(e) keep for five (5) years after termination of this Agreement
(or such other period of time required by the Regulatory Authority in each
country in the Territory) records of all DepoCyt sales and customers sufficient
to adequately administer a recall of DepoCyt and to fully cooperate (at P&U's
expense) in any decision by the parties to recall, retrieve and/or replace
DepoCyt;
(f) immediately notify DepoTech of any ADEs or any other
unexpected results or any actual or potential government action relevant to
DepoCyt and, if and to the extent requested by DepoTech in writing, to suspend
distribution of DepoCyt;
(g) retain under proper storage conditions such samples of DepoCyt
as are required to comply with the general retention requirements as specified
in cGMPs; and
(h) participate and cooperate with DepoTech representatives who
may, upon reasonable prior notice and in a reasonable manner, audit P&U
facilities and records, and promptly
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60
take reasonable corrective action as may be required by DepoTech to comply with
cGMP requirements, and when requested by DepoTech, describe in writing
appropriate corrective action planned or taken.
5.2 DepoTech shall:
(a) be responsible for supplying Vialed Material;
(b) promptly notify P&U of any problems or unusual production
situations which have the potential to adversely affect production of Vialed
Material, or its timely delivery to P&U or its designee;
(c) perform quality assurance final product release of the Vialed
Material in accordance with all applicable regulatory requirements and agreed
testing procedures;
(d) provide a Certificate of Analysis to P&U;
(e) immediately notify P&U of any ADEs or any other unexpected
results or any actual or potential government action relevant to Vialed Material
or DepoCyt and, if and to the extent requested by P&U in writing, to suspend its
manufacture of Vialed Material;
(f) keep for five (5) years after termination of this Agreement
(or such other period of time required by the Regulatory Authority in each
country in the Territory) records of all DepoCyt sales and customers sufficient
to adequately administer a recall of DepoCyt and to fully cooperate (at
DepoTech's expense) in any decision by the parties to recall, retrieve and/or
replace DepoCyt;
(g) ascertain and comply with all applicable laws and regulations
and standards of industry or professional conduct in connection with the
manufacture of Vialed Material and the conduct of the Clinical Trials, including
without limitation, those applicable to approvals, registrations and
notifications;
(h) assist P&U in complying with all applicable laws and
regulations by providing all relevant Know How in its possession, including
material safety data sheets and other information about chemical and physical
characteristics of DepoCyt and the Vialed Material;
(i) retain under proper storage conditions such samples of Vialed
Material as are required to comply with the general retention requirements as
specified in GMPs;
(j) perform stability testing as described in an approved
stability protocol and report any out of specification test results to P&U
within three (3) business days and report annually to P&U all stability test
results;
(k) participate and cooperate with P&U representatives who may,
upon reasonable prior notice and in a reasonable manner audit DepoTech
facilities and records and promptly take reasonable corrective action as may be
required by P&U to comply with cGMP requirements and when requested by P&U
describe in writing appropriate corrective action planned or taken;
(l) immediately notify P&U of any incident or data of which it
becomes aware that could result in a recall; and
(m) Assure that penicillin or penicillin containing products will
not be received, stored, handled, dispensed, manufactured or packaged in the
same facility(ies) or in facilities that share a common Heating, Ventilation and
Air Conditioning systems or utilize the same equipment in the manufacture or
handling of the components, raw materials or
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packaging as Vialed Material.
6. TAXES. DepoTech shall pay any and all taxes levied on account of the
Supply Price or other payments it receives under this Agreement. If laws or
regulations require that taxes be withheld, P&U shall (a) deduct these taxes
from the remittable amount, (b) pay the taxes to the proper taxing authority,
and (c) send proof of payment to DepoTech within forty-five (45) days following
that payment. P&U shall cooperate with DepoTech to claim exemption from such
withholdings under any double taxation treaty or similar agreement in force from
time to time and shall endeavor to secure any such exemptions before payments
are made hereunder.
7. BLOCKED CURRENCY. If at any time legal restrictions in any country in the
Territory prevent the prompt remittance of part or all of any amounts owing to
DepoTech hereunder, then P&U shall, at DepoTech's election, either (a) have no
obligation to pay such amounts to DepoTech for the period such restrictions
remain in place, and shall thereafter pay such amounts to DepoTech, or (b) pay
such amounts in such country in local currency by deposit in a local bank
designated by DepoTech. P&U shall, during the period that its obligation to make
payments directly to DepoTech is suspended pursuant to this Section, exert
commercially reasonable efforts to cause such amounts to be remitted to
DepoTech.
8. COMPLAINTS. Each party shall maintain a record of all complaints it
receives with respect to DepoCyt. Each party shall notify the other of any
complaint received by it in sufficient detail and within five (5) business days
after the event, and in any event in sufficient time to allow the responsible
party to comply with any and all regulatory requirements imposed upon it in any
country in the Territory.
9. DATA SHARING AND ADVERSE DRUG EVENTS. The parties recognize that the
holder of an NDA may be required to submit information and file reports to
various governmental agencies on DepoCyt. Information must be submitted at the
time of initial filing for investigational use in humans and at the time of a
request for market approval of a new drug. In addition, supplemental information
must be provided on compounds at periodic intervals and adverse drug experiences
("ADE") must be reported at more frequent intervals depending on the severity of
the experience. Consequently, each party agrees to follow P&U's standard
operating procedures for the reporting of ADEs and to:
(a) provide to the other for initial and/or periodic submission to
a Regulatory Authority significant information on DepoCyt from preclinical
laboratory, animal toxicology and pharmacology studies, as well as adverse drug
experience reports from clinical trials and commercial experiences with DepoCyt;
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62
(b) report to the other within three (3) calendar days of the
initial receipt of a report of any fatal or life-threatening adverse reaction
with DepoCyt, or sooner if required for either party to comply with regulatory
requirements; and
(c) report to the other within five (5) business days of the
initial receipt of a report of any adverse reaction with DepoCyt that is serious
and unexpected or sooner if required for either party to comply with regulatory
requirements; and
(d) send to the other a list with any other serious (expected)
adverse reaction with DepoCyt monthly or sooner if required for either party to
comply with regulatory requirements. "Serious adverse reaction" means any
drug-related event that: results in death; is life-threatening (i.e. results in
an immediate risk of death); requires inpatient hospitalization or prolongation
of existing hospitalization (for treating the event); results in persistent or
significant disability/incapacity; is a congenital anomaly/birth defect or a new
cancer; is an inadvertent medication overdose (irrespective of whether it gives
signs/symptoms or not). In addition, any other drug-related event the
Investigator judges to be serious can also be considered a serious adverse
reaction.
An unexpected adverse reaction is one not identified in nature, specificity,
severity or frequency in the current investigator brochure or the U.S. labeling
for DepoCyt. Each party also agrees that if it contracts with a Third Party for
research, development or marketing to be performed by such Third Party on
DepoCyt, that party agrees to require such Third Party to report to the
contracting party the information set forth in subparagraphs (a), (b), (c) or
(d) above. Furthermore, DepoTech will facilitate the coordination the reporting
of such information directly between P&U and Chiron.
10. WARRANTIES.
10.1 DEPOTECH'S WARRANTIES. DepoTech warrants to P&U that DepoCyt, upon
receipt of the Certificate of Analysis, (i) will conform in all respects to the
Specifications, as then in effect, and the Act, (ii) will not be adulterated,
misbranded or mislabeled within the meaning of the Act; and (iii) was
manufactured in accordance with all applicable GMP. Should any failure to
conform with such warranties appear prior to the expiration date of any Vialed
Material (whether discovered by P&U, its Affiliates, or their distributors or
customers), and if given prompt written notice by P&U, DepoTech shall correct
such nonconformity, at its option, by (a) replacement of the nonconforming
Vialed Material, or (b) refund of the Supply Price.
10.2 P&U'S WARRANTIES. P&U warrants to DepoTech that it will not
adulterate, misbrand or mislabel DepoCyt within the meaning of the Act.
10.3 LIMITATION OF LIABILITY. A PARTY'S SOLE AND EXCLUSIVE REMEDY FOR ANY
BREACH OF THE FOREGOING WARRANTIES BY THE OTHER PARTY SHALL BE ITS RIGHTS SET
FORTH ABOVE AND ITS RIGHTS UNDER ARTICLE 13 OF THE AGREEMENT. EXCEPT FOR THE
FOREGOING WARRANTIES, NEITHER PARTY WARRANTS THE MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OF DEPOCYT OR THE PERFORMANCE OR NONINFRINGEMENT THEREOF,
MAKES ANY WARRANTY, EXPRESS OR IMPLIED, WITH
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63
RESPECT TO DEPOCYT, SPECIFICATIONS, SUPPORT, SERVICE OR ANYTHING ELSE AND MAKES
ANY WARRANTY TO P&U'S CUSTOMERS OR AGENTS. DEPOTECH HAS NOT AUTHORIZED ANYONE TO
MAKE ANY REPRESENTATION OR WARRANTY OTHER THAN AS PROVIDED ABOVE. THE FOREGOING
LIMITATIONS OF WARRANTIES SHALL NOT IN ANY WAY LIMIT A PARTY'S RIGHTS UNDER
ARTICLE 13 OF THE AGREEMENT.
11. INSPECTION.
11.1 Prior to commencement of manufacture and/or packaging of DepoCyt,
and at least once during each year, each party shall permit the other party or
its designated representative to review such party's licenses and permits
relating to the facilities and operations utilized by such party in the
manufacture and/or packaging of DepoCyt. Such review shall be conducted during
regular business hours, on mutually agreeable dates.
11.2 In the event that either party's facilities used for the production
of Vialed Material or DepoCyt are the subject of an inspection by any duly
authorized agency of the federal, state, local or any foreign government, such
party shall thereafter notify the other party immediately (by telephone and, if
possible, in writing) upon learning of such inspection, and shall supply the
other party with copies of any correspondence or portions of correspondence
which relate to Vialed Material or DepoCyt. Such other party may send
representatives to the manufacturing facility and may participate fully in any
portion of such inspection relating to Vialed Material or DepoCyt. In the event
either party receives (or has received in the past 12 months) any regulatory
letter or written comments from any Regulatory Agency in connection with its
manufacture of Vialed Material, including but not limited to receipt of a Form
483 (Inspectional Observations) or a Warning Letter, it shall provide the other
party with a copy of each such communication and the proposed response.
11.3 To the extent applicable to it, each party shall maintain all
manufacturing and analytical records, all records of shipments of Vialed
Material and DepoCyt, and all validation data relating to Vialed Material for
the time periods required by applicable laws and regulations and shall make such
data available to the EMEA (or other Regulatory Authority) upon the other
party's request or if required by law.
12. REGULATORY COMPLIANCE. Each party shall comply in all respects with the
requirements of the Act, all other applicable laws and the Specifications, then
in effect.
13. ENVIRONMENTAL. Each party shall identify to the other party all haulers
and disposal sites utilized for disposal of Vialed Material or DepoCyt and such
party shall permit, or cause those with whom such party contracts for the
disposal of waste to permit the other party or its designated representative to
visit all disposal sites for Vialed Material or DepoCyt.
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