LICENSE AGREEMENT
This License Agreement (the "License Agreement") is made and entered into as of
this 17th day of December, 2001 ("Effective Date"), by and between Novartis
Consumer Health, Inc. (hereinafter referred to as "NCH"), a corporation
organized and existing under the laws of the State of Delaware, having an office
at 560 Morris Avenue, Summit, New Jersey 07901-1312, and Impax Laboratories,
Inc. (hereinafter referred to as "Impax"), a corporation organized and existing
under the laws of the State of Delaware, having an office at 3735 Castor Avenue,
Philadelphia, Pennsylvania 19124.
Witnesseth:
Whereas, Impax owns or possesses rights to certain products, trademarks, patents
and know-how and has the right to grant licenses with respect to same; and
Whereas, Impax wishes to grant to NCH a license to the Licensed Products (as
hereinafter defined), as well as Impax Patents and Know-How associated with
Licensed Products, to make, have made, use, market, distribute, import, export,
offer for sale and sell Licensed Products in the Territory (as hereinafter
defined); and
Whereas, NCH desires to acquire said license on the terms and subject to the
conditions set forth herein; and
Whereas, the parties are entering into a Supply Agreement (the "Supply
Agreement") with respect to the supply by Impax and its contract manufacturers
to NCH of NCH's commercial requirements of Licensed Products covered by the
terms of this License Agreement.
Now, therefore, in consideration of the mutual covenants, agreements and
obligations set forth herein, Impax and NCH hereby agree as follows:
1. DEFINITIONS
The following terms, as used in this License Agreement, shall have the meanings
set forth in this Article 1:
1.1 "Affiliate" shall mean any corporation or entity which directly or
indirectly owns, is owned by, or is under common ownership with, a party to this
License Agreement, where own or ownership means direct or indirect possession of
at least fifty percent (50%) of the outstanding voting securities of a
corporation or a comparable equity interest in any other type of entity.
1.2 "Agreement Period" shall mean the period commencing upon the Effective Date
and extending until the ++ anniversary thereof.
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++ Confidential portions omitted and filed separately with the Commission.
1.3 "ANDA" shall mean an Abbreviated New Drug Application filed with the FDA
pursuant to its rules and regulations.
1.4 "Approval(s)" shall mean any and all approvals, licenses, registrations or
authorizations of the applicable regulatory authorities necessary for the
marketing of the Licensed Products in the Territory.
1.5 "cGMP" shall mean current good manufacturing practices as required by the
rules and regulations of the FDA or such similar requirements of non-U.S.
regulatory authorities, as applicable to the manufacture, packaging, handling,
storage and control of the Licensed Products in the Territory.
1.6 "Date of First Sale" shall mean the date of first commercial sale of one or
more of the Licensed Products by NCH or any of its Affiliates to an unrelated
third party.
1.7 "FDA" shall mean the United States Food and Drug Administration and all
agencies under its direct control or any successor organization.
1.8 "Field" shall mean++ OTC market.
1.9 "Improvements" shall mean any enhancement to the Licensed Products (as
hereinafter defined) made during the Agreement Period.
1.10 "Know-How" shall mean all tangible and intangible inventions, technology,
trade secrets, data, processes, methods and any physical or chemical material,
including any replication of any part of such material, other information that
Impax owns, controls or has a license to, with the right to sublicense, existing
as of the Effective Date, which are necessary or useful to the formulation,
development, manufacture, packaging or commercialization of a Licensed Product,
and any Improvements made to any of the foregoing.
1.11 "Licensed Products" shall mean generic loratadine++ products.
1.12 "Net Sales" shall mean the actual gross sales invoiced by NCH or its
sublicensees or Affiliates to parties other than NCH or its Affiliates, for
those Licensed Products used or sold in the Field in the Territory, less, (i)
trade, quantity and cash discounts actually allowed and taken but not to exceed
such amounts as are customary in the trade, if any, (ii) credits or allowances
actually granted to customers, (iii) independent broker or agent commissions
actually allowed and paid, (iv) customer returns actually allowed, (v) freight,
insurance, handling and transportation charges and (vi) all taxes other than
income taxes on the income of NCH or its Affiliates.
1.13 "OTC" shall mean over-the-counter pharmaceuticals.
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++ Confidential portions omitted and filed separately with the Commission.
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1.14 "Patents" shall mean all patents and patent applications owned or to be
filed, or controlled, or licensed (with right to sublicense), during the term of
this License Agreement, by or on behalf of Impax or any of its Affiliates, which
contain a claim covering inventions necessary to the development, manufacture,
packaging, use, offer for sale or sale of Licensed Products, including those
patents and patent applications now owned, controlled or licensed by Impax
listed in Exhibit A, attached hereto, which list shall be updated from time to
time as appropriate, but at least once per calendar year, to incorporate any
additional patents and patent applications not listed in Exhibit A as of the
Effective Date, including patents covering any Improvements, as well as any
continuations, continuations-in-part, divisions, re-examinations, reissues or
extensions to the patents or patent applications listed in Exhibit A.
1.15 "Royalty Computation Period" shall mean a three (3) month calendar quarter
ending on the last day of March, June, September and December of a given year
during the Agreement Period.
1.16 "Royalty Period" means that period beginning on the Date of First Sale of
the Licensed Products in the Territory by NCH, and ending on (i) the expiration
of the Agreement Period or (ii) the earlier termination of this License
Agreement.
1.17 "Territory" shall mean United States of America, Canada and Mexico.
2. GRANTS
2.1 Subject to the terms of this License Agreement, Impax hereby grants, and NCH
hereby accepts, an exclusive license to Licensed Products as well as Patents and
Know-How associated with Licensed Product, to make, have made, use, market,
distribute, import, export, offer for sale and sell the Licensed Products in the
Field in the Territory, including the right to sublicense, subject to the prior
written approval of Impax which approval shall not be unreasonably withheld or
delayed. Sublicensing any or all of its rights under this License Agreement
shall not relieve NCH of its obligations hereunder. NCH shall retain sole
discretion over any and all aspects of commercialization.
2.2 Upon (i) the expiration (but not the earlier termination other than by NCH
pursuant to Section 9.2) of the Royalty Period or (ii) early termination by NCH
pursuant to Section 9.2 hereof, NCH shall have a non-revocable, perpetual,
paid-up, royalty-free, non-exclusive license to the Licensed Products as well as
the Patents and Know-How associated with Licensed Product, with the right to
sublicense, to make, have made, use, market, distribute, import, export, offer
for sale and sell Licensed Products in the Field in the Territory.
3. COVENANTS
3.1 Impax hereby covenants and agrees that it shall use the Confidential
Information belonging to NCH (as to which obligations of confidentiality apply)
solely for the purposes specified in this License Agreement and for no other
purpose.
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3.2 NCH hereby covenants and agrees that it shall use the licensed Patents,
Trademarks and Know-How and Confidential Information belonging to Impax (as to
which obligations of confidentiality apply) solely for the purposes specified in
this License Agreement and for no other purpose.
3.3 Impax hereby covenants and agrees to keep NCH fully informed of all
Improvements to the Licensed Product.
3.4 Impax hereby covenants and agrees during the term of this License Agreement,
not to (1) commercialize, or cause to be commercialized, or fund, or provide
services, including without limitation, consulting, research, development and/or
manufacturing services, with respect to, the commercialization of a loratadine
++ product for use in the Field in the Territory, or (2) license, assign or
otherwise convey, to any third party, except as may be expressly permitted in
this License Agreement, any of the rights or licenses granted to NCH under this
License Agreement. NCH acknowledges that Impax retains the right to manufacture
and sell and license others to manufacture and sell the Licensed Product in the
++ prescription and ++ OTC market.
3.5 Impax hereby covenants that it will comply with all Applicable Laws with
respect to the manufacture, packaging and storage of the Licensed Products.
3.6 NCH hereby covenants that it will comply with all Applicable Laws with
respect to the marketing, sale and distribution of the Licensed Products.
4. LICENSE FEES, MILESTONE PAYMENTS AND ROYALTIES
4.1 In consideration of the license granted to NCH under this License Agreement
as stipulated in Article 2 above, NCH shall pay to Impax the following
non-refundable license fees and milestone payments at the times stated below:
4.1.1 ++ dollars ($++) within eight (8) days of execution of this
License Agreement;
4.1.2 ++ dollars ($++) upon the filing with the FDA of the OTC switch
application for the Licensed Product as referred to in Section 5; and
4.1.3 ++ dollars ($++) upon the Date of First Sale of the Licensed
Product in the Field in the United States of America.
4.2 Novartis shall make each payment due pursuant to Sections 4.1.2 and 4.1.3
within thirty (30) days after the occurrence of the related triggering event
listed above.
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++ Confidential portions omitted and filed separately with the Commission.
4.3 Total Milestone Payments. The parties agree that the milestone payments set
forth in Section 4.1 above represent all of the milestone payments to be paid by
Novartis to Impax in connection with the transactions contemplated hereby.
Novartis shall not be required to pay additional milestone payments to Impax for
exercising its right pursuant to Section 5.4 hereof to add additional countries
to the Territory.
4.4 As further consideration for the license granted to NCH under this License
Agreement as stipulated in Article 2 above, during the Agreement Period NCH
and/or its sublicensees shall pay to Impax a running royalty of ++ Percent (++%)
on annual Net Sales of Licensed Products in the Territory.
4.4.1 The obligation to pay running royalties shall expire with the
expiration of the Royalty Period, except as otherwise provided for under this
License Agreement.
4.5 To the extent that Impax is unable to meet NCH's firm orders made pursuant
to the terms and conditions of the Supply Agreement on more than one occasion
during any twelve (12) month period, and as a direct result of Impax's
nonperformance with respect thereto, NCH is unable to supply Licensed Product
such that an out-of-stock condition ensues in NCH warehouses, and NCH receives
backorders for the Licensed Product, Impax shall not be entitled to receive
royalty payments pursuant to this License Agreement on the Net Sales of Licensed
Product filling such backorders, but the foregoing shall not constitute a breach
of this Agreement. Failure by Impax to supply Licensed Product ordered pursuant
to a change order issued to Impax pursuant to the Supply Agreement which
increases the order for the related month above NCH's forecast shall not be
considered nonperformance by Impax for purposes of this Section and the Supply
Agreement.
5. OTC SWITCH & RIGHT TO EXPAND TERRITORY
5.1 NCH shall, at its sole expense, perform, or have a third party laboratory
perform, stability studies on three (3) batches of Licensed Product to support
the switch of the Licensed Product from a prescription pharmaceutical product to
an OTC product (the "Rx to OTC Switch"). Each stability batch shall be (a) at
least 1/10 of normal commercial scale, (b) comprised of no less than one hundred
thousand (100,000) tablets and (c) packaged in Child Resistant Closure ("CRC")
blister packaging. Impax shall (a) deliver to NCH sufficient Licensed Product
(manufactured and packaged in CRC blister packaging in accordance with cGMPs at
Impax's commercial manufacturing facility) to perform these stability studies by
no later than March 31, 2002 and (b) provide to NCH the ANDA analytical methods
and analytical methods transfer data used to test the Impax generic loratadine
++ product. NCH shall reimburse to Impax up to a maximum of ++ Dollars ($++) to
offset Impax's cost of manufacturing and packaging the Licensed Product for
these stability studies. Impax shall calculate these costs based on its actual
costs without mark up, including CRC blister packaging and any changes made to
Licensed Product flavoring and NCH shall make payment to Impax within thirty
(30) days of receipt of Impax's invoices therefor.
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++ Confidential portions omitted and filed separately with the Commission.
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5.2 NCH shall use its commercially reasonable efforts to file the application to
the FDA for the Rx to OTC Switch of the Licensed Product and to obtain Approval
of such application as promptly as possible. Impax will provide all of the CM&C
(except the stability studies discussed in Section 5.1 above) and currently
completed bioequivalence data needed for the application to the FDA. If
new/additional bioequivalence data is required, the incremental expense will be
the sole responsibility of NCH.
5.3 NCH shall have the right to file the Rx to OTC Switch application on or
after December 31, 2003. Notwithstanding the foregoing, NCH shall have the right
to file the OTC switch application immediately upon the occurrence of any of any
of the following:
5.3.1 Schering Plough, or any of its affiliates or
successors-in-interest to its OTC loratadine business, files an OTC switch
application for any loratadine product.
5.3.2 Either party becomes aware, via publicly available information,
that Schering Plough, or any of its affiliates or successors-in-interest to its
OTC loratadine business, plans to or has switched any loratadine product to OTC
status.
5.3.3 Either party becomes aware that any third party has filed an OTC
switch application (505 b 2, or similar filing) for any loratadine product.
5.3.4 Either party becomes aware of any reasonable indication that any
third party has filed an OTC switch application with FDA for any loratadine
product, through litigation dockets, Citizen's petitions or other verifiable
source.
5.3.5 Any third party launches any OTC loratadine product.
5.4 NCH shall have the right to expand the Territory under this License
Agreement to include additional countries throughout the Agreement Period. NCH
shall exercise this right by giving sixty (60) days written notice to Impax that
it wishes to expand the Territory to include a particular country or countries.
If the rights to the Licensed Product are available in such country, Impax will
grant such rights to NCH, this License Agreement will be amended to include the
country or countries in question to the Territory and from that time forward,
the terms and conditions of this License Agreement will apply to the Territory
as expanded.
5.4.1 In the event that Impax determines that it wishes to license the
rights to the Licensed Products in the Field in a country or countries that NCH
has not added to the Territory as of that time, Impax shall notify NCH of its
desire to license such rights and NCH shall have sixty (60) days from its
receipt of such notice to inform Impax of whether it wishes to add such country
to the Territory.
5.4.2 If NCH does not notify Impax in writing that it wishes to add
such country or countries to the Territory within this sixty (60) day period,
Impax shall be free to grant rights to Licensed Products in the Field to third
parties at any time thereafter and NCH shall have no further rights to Licensed
Products in the Field in such country.
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6. PAYMENT PROCEDURES, RECORDS, AUDITING
6.1 All payments due Impax pursuant to Article 4 shall be made in U.S. dollars
by wire transfer to such bank in the United States of America as Impax shall
specify from time to time. For purposes of determining the running royalty
payment due to Impax, Net Sales shall be converted on a country-by-country basis
to U.S. dollars at the exchange rate prevailing at the close of the last
business day of the relevant Royalty Computation Period as published the next
day in The Wall Street Journal.
6.1.1 Payments hereunder shall be made without deduction other than
such amounts, if any, as NCH is required by law to deduct or withhold. NCH shall
obtain a receipt from the relevant taxing authorities for all withholding taxes
paid and forward such receipts to Impax to enable Impax to claim any and all tax
credits for which it may be eligible. NCH shall reasonably assist Impax in
claiming exemption from such deductions or withholdings under any double
taxation or similar agreement or treaty from time to time.
6.2 NCH shall pay to Impax royalties as set forth in Article 4 within forty-five
(45) days after the end of each Royalty Computation Period. Each payment of
royalties shall be accompanied by a statement, on a country by country basis, of
the amount of Net Sales during such quarter, the amount of aggregate Net Sales
in the Territory during such quarter and the amount of royalties or other
payments due on such sales.
6.3 During the Agreement Period, NCH shall keep complete and accurate books and
records setting forth gross sales, net sales, amounts deducted from gross sales
to arrive at Net Sales, calculations of royalty payments owed to Impax, and any
other information necessary to allow the calculation of royalties to be paid by
NCH to Impax for each country within the Territory, for no less than three (3)
years after the end of each Royalty Computation Period. NCH shall permit Impax,
at Impax's expense, to have said books and records examined by independent
certified public accountants retained by Impax and acceptable to NCH, during
regular business hours upon reasonable advance notice but not later than three
(3) years following the close of the Royalty Computation Period in question, and
no more than one (1) time per year. Such accountant shall report to Impax only
those findings required to verify or contradict the royalty amounts calculated
by NCH to be owed to Impax, and the amounts of any discrepancy. Any information
obtained or reports completed by said accountants during such examination will
be considered Confidential Information of NCH under Article 8 hereof. If it is
determined as a result of said examination that there was an underpayment of
royalties due Impax, NCH will pay to Impax the balance of the royalties due
within thirty (30) days. Similarly, in the event it is determined that there has
been an overpayment of royalties, Impax will credit such overpaid amount against
running royalty payments owed by NCH at the end of the next Royalty Computation
Period, or subsequent Royalty Computation Periods when required, until such time
as such overpayment has been fully credited against the running royalties;
provided, however, that such credit shall not exceed fifty percent (50%) of any
royalties due Impax in such Royalty Computation Period, and any residual credit
shall be carried over to the next Royalty Computation Period and applied in
accordance with this Section 6.3. If it is determined that there was an
underpayment of royalties due Impax of five percent (5%) or more, (a) NCH shall
reimburse Impax for its reasonable cost of the examination and (b) Impax shall
have the right to have such an examination of NCH relevant books and records
performed twice in each of the immediately following two (2) years.
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7. REPRESENTATIONS AND WARRANTIES
7.1 Impax warrants and represents that:
7.1.1 It is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into and perform this agreement and to grant all of the rights, powers and
authorities herein granted in Article 2.
7.1.2 The execution, delivery and performance of this License Agreement
do not conflict with, violate or breach any agreement to which Impax is a party,
or Impax's Certificate of Incorporation or Bylaws.
7.1.3 This License Agreement has been duly executed and delivered by
Impax and is a legal, valid and binding obligation enforceable against Impax in
accordance with its terms.
7.1.4 Impax has the right, title and interest in and to the Patents and
Know-How which are the subject of this License Agreement, necessary to grant the
license granted pursuant to Article 2, and which are free of any lien or
encumbrance or any rights or claims of any third party in the Territory.
7.1.5 To the best of Impax's knowledge, the Licensed Products do not
infringe any valid patents or other proprietary rights of third parties, nor do
said third parties have any claim of ownership with respect to the Licensed
Products, Patents and Know-How. In addition, Impax represents and warrants that
the Licensed Products do not infringe U.S. Patent No. 4,863,931, U.S. Patent No.
4,282,233 and U.S. Patent No. 4,659,716 and that it has filed certifications
against each of these patents pursuant to 21 U.S.C. Section 355 of the federal
Food, Drug and Cosmetic Act.
7.1.6 The Patents licensed under this License Agreement are neither
invalid nor unenforceable, nor would a court of competent jurisdiction hold them
invalid or unenforceable. If, during the Agreement Period, Impax (a) becomes
aware that anyone (including Impax) has requested a re-examination of any such
Patents, (b) requests a re-issuance of any such Patents, or (c) becomes aware
that a declaratory judgment action has been filed to have any such Patents
declared invalid or unenforceable, Impax promptly shall notify NCH of such and
specify which Patents are involved.
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7.1.7 During the term of this License Agreement, Impax shall not enter
into any agreement that is inconsistent with or in derogation of Impax's
representations and warranties under this License Agreement.
7.1.8 As of the Effective Date, Impax is not aware of any third party
that is infringing the Patents licensed to NCH.
7.2 NCH warrants and represents that:
7.2.1 It is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into and perform this License Agreement.
7.2.2 The execution, delivery and performance of this License Agreement
do not conflict with, violate or breach any agreement to which NCH is a party,
or NCH's Certificate of Incorporation or Bylaws.
7.2.3 This License Agreement has been duly executed and delivered by
NCH and is a legal, valid and binding obligation enforceable against NCH in
accordance with its terms.
7.2.4 NCH will use its commercially reasonable efforts to file with the
FDA its OTC Switch application for the Licensed Product, to maintain and fully
comply with all FDA requirements with respect to the Licensed Products, to
engage in the commercial sale of the Licensed Products promptly after receipt of
FDA approval of its OTC Switch application; and use its commercially reasonable
efforts in keeping with its business judgment to commercialize the Licensed
Products.
8. CONFIDENTIALITY
8.1 Both Impax and NCH agree that subject to the limitations set forth in
Section 8.3, all information disclosed to the other party, whether in oral,
written or graphic form, and identified in writing by the disclosing party as
confidential shall be deemed "Confidential Information" of the disclosing party.
In particular, Confidential Information shall be deemed to include, but not be
limited to any patent application or drawing or potential patent claim, trade
secrets, information, ideas, inventions, samples, processes, procedures,
methods, formulations, packaging designs and materials, test data, future
development plans, Licensed Product launch date, technological know-how and
engineering, manufacturing, regulatory, marketing, servicing, sales, financing
or human resources matters relating to the disclosing party and its business.
8.2 Each party will take precautions as it normally takes with its own
confidential and proprietary information to prevent disclosure to third parties.
8.3 Both Impax and NCH agree that, notwithstanding the above, the obligations of
confidentiality shall not be deemed to apply to:
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8.3.1 Information which at the time of disclosure is or thereafter
becomes generally known or available to the public, through no wrongful act or
failure to act on the part of the receiving party.
8.3.2 Information that was known by or in the possession of the
receiving party at the time of receiving such information from the disclosing
party as evidenced by written records.
8.3.3 Information obtained by the receiving party from a third party
source who is not breaching a commitment of confidentiality to the disclosing
party by revealing such information to the receiving party.
8.3.4 Information that is independently developed by the receiving
party without use of confidential information of the other party as evidenced by
written records.
8.3.5 Information that is the subject of a granted written permission
to disclose that is issued by the disclosing party to the other party. NCH
specifically acknowledges that Impax will need to disclose certain information
to Teva Pharmaceuticals. Impax and NCH will work together in good faith to
determine what information Impax may disclose to Teva Pharmaceuticals.
8.3.6 Information that is required to be disclosed pursuant to the law,
but only to the extent required to be disclosed; provided that, the disclosing
party notifies the other party in writing and gives the other party reasonable
time to comment on the same prior to disclosure.
8.4 During the Agreement Period and for a period of five (5) years after the end
of the Agreement Period each party shall maintain all Confidential Information
in trust and confidence and shall not disclose any Confidential Information to
any third party or use any such information for any unauthorized purpose, other
than as authorized in Section 8.3 hereof or as necessary to accomplish the
purpose of this License Agreement subject to an appropriate binder of
confidentiality as set forth in Section 8.5. Each party may use such
Confidential Information only to the extent required to accomplish the purposes
of this License Agreement. Confidential Information shall not be used for any
purpose or in any manner that is not consistent with this License Agreement or
that would constitute a violation of any laws or regulations including, without
limitation, the export control laws of the United States. Each party hereby
agrees that it will not in any way attempt to obtain, either directly or
indirectly, any information regarding any Confidential Information from any
third party who has been employed by, provided consulting services to, or
received in confidence information from, the other party.
8.5 Both parties will make diligent efforts to ensure that all employees,
consultants, agents, subcontractors and manufacturing contractors who may have
access to Confidential Information of the other party, and any other third
parties who might have access to Confidential Information, will use such
information in a manner consistent with the terms of this License Agreement and
will be bound by the terms set forth in this Article 8. No Confidential
Information shall be disclosed to any employees, subcontractors, agents or
consultants who do not have a need to receive such information.
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8.6 To the extent either party discloses confidential information of the other
party to an employee, consultant, subcontractor or manufacturing contractor
(collectively "Agents") or permits an Agent to have access to such confidential
information, such party shall indemnify the other party for any claims, damages,
losses, liabilities, costs or expenses, including reasonable attorneys' fees,
incurred by the other party as a result of the indemnifying party's Agent
further disclosing or misusing such confidential information.
9. TERM AND TERMINATION
9.1 The term of this License Agreement shall begin as of the Effective Date and
shall remain in effect for the Agreement Period, unless earlier terminated as
provided herein.
9.2 In the event either party commits a material breach or defaults in the
performance or observance of any of the material provisions of this License
Agreement, and such breach or default is not cured within ninety (90) days after
the receipt of notice thereof from the other party specifying such breach or
default (or such additional time if ninety (90) days is not sufficient time to
cure such breach or default and the breaching or defaulting party is diligently
attempting to cure, the party not in breach or default shall be entitled
(without prejudice to any of its' other rights) to terminate this License
Agreement, without additional penalty, termination fee or cost, by giving notice
to take effect immediately. Notwithstanding the foregoing, should Impax breach
the covenant of Section 3.4 hereof, or in the event NCH terminates this License
Agreement pursuant to the provisions of this Section 9.2 due to a material
breach by Impax, then the license granted under this License Agreement
immediately shall convert to a (i) non-revocable, perpetual, paid-up,
royalty-free, non-exclusive license to the Licensed Products as well as Patents
and Know-How associated with Licensed Product, with the right to sublicense, to
make, have made, use, market, distribute, import, export, offer for sale and
sell Licensed Products in the Territory and (ii) NCH shall have access to, and
Impax shall cooperate in the disclosure and transfer to NCH of, any and all
information and/or Know-How in Impax's possession which NCH may require in order
to make, have made, use, market, distribute, import, export, offer for sale and
sell the Licensed Products, and such transfer of information and Know-How shall
not be subject to transfer costs to NCH.
9.3 If NCH, in its sole discretion, chooses not to pursue the remedy provided
for in Section 9.2 hereof in the event Impax commits a material breach or
defaults in the performance or observance of any of the material provisions of
this License Agreement and same is not cured within the cure period set forth in
Section 9.2, NCH shall be entitled to reduce the running royalty rate to fifty
percent (50%) of the then-current running royalty rate until the expiration of
the Royalty Period or until such time as the breach is cured. Upon cure, the
royalty rate shall be increased to a rate equal to the rate in effect at the
time of the breach, subject to any additional adjustments that have been made,
or are later made, pursuant to this License Agreement. By paying royalties at
such reduced royalty rate, NCH shall maintain the exclusive license in the
Territory.
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9.4 NCH shall have the right to terminate this License Agreement and the royalty
obligations with respect thereto upon the occurrence of any of the events listed
below by providing Impax with sixty (60) days prior written notice of such
termination and payment upon such termination of such amounts as have accrued
under this License Agreement and remain unpaid as of the date of termination.
Payment of accrued amounts shall be the sole remedy and/or cost afforded Impax
for such termination.
9.4.1 The Impax generic loratadine ++product has not received final
ANDA approval by December 31, 2003 for Rx marketing.
9.4.2 If NCH determines in the exercise of its sole discretion that the
business of selling the Licensed Products is not sufficiently profitable (due to
market conditions, COGS, Regulatory issues, etc.) to merit continuing to sell
the Licensed Product.
9.4.3 Impax is or becomes a Named Defendant (as defined below) in any
bona fide adversarial proceeding (including, without limitation, a lawsuit or
arbitration) in any jurisdiction in the Territory related to U.S. Patent No.
4,863,931, U.S. Patent No. 4,282,233 and/or U.S. Patent No. 4,659,716 and/or
their counterparts in countries other than the United States of America. "Named
Defendant" shall mean a defendant in any capacity. Before NCH exercises its
right to terminate pursuant to this Section 9.4.3, Impax shall have sixty (60)
days to dispose of such adversarial proceeding.
9.5 The termination of this License Agreement by either party shall not release
either party from any obligation that matured prior to the effective date of the
termination.
9.6 The confidentiality provisions set forth in Article 8 hereof shall survive
the termination or expiration of this License Agreement as set forth therein.
9.7 Except as otherwise expressly provided in this License Agreement, upon a
termination of this License Agreement:
9.7.1 All licensed rights under the Patents and Know-How granted to NCH
shall terminate and revert to Impax, and NCH shall not make any use whatsoever
of said rights, nor sell any Licensed Products in the Territory, except as
expressly provided for elsewhere in this License Agreement.
9.7.2 NCH shall provide to Impax the results of the stability studies
performed pursuant to Section 5.1 hereof.
9.7.3 Upon (i) expiration (but not earlier termination other than by
NCH pursuant to Section 9.2) of the License Agreement or (ii) early termination
by NCH pursuant to Section 9.2 hereof, NCH shall retain a non-revocable,
perpetual, paid-up, royalty-free, non-exclusive license to the Licensed Products
as well as Patents and Know-How associated with Licensed Product, with the right
to sublicense, to make, have made, use, market, distribute, import, export,
offer for sale and sell Licensed Products in the Territory, pursuant to Section
2.2 hereof.
- --------
++ Confidential portions omitted and filed separately with the Commission.
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9.7.4 NCH shall have up to one (1) year from the date of termination of
this License Agreement to sell or otherwise dispose of its existing stock of the
Licensed Products and to fulfill any outstanding contractual obligations with
respect to the sale or supply of the Licensed Products; provided that, Impax
shall continue to receive royalty payments as stipulated in Article 4 hereof.
9.7.5 Except as otherwise set forth herein, termination under this
Article 9 shall be without prejudice to and shall not affect the right of either
party to recover any and all damages to which it may be entitled, or exercise
any other remedies which it may otherwise have under this License Agreement.
10. PATENTS
10.1 Impax shall undertake and shall bear all costs of the prosecution and
maintenance of the Patents in the Territory. Impax shall employ reasonable
efforts to keep NCH fully and timely informed, at NCH's reasonable expense, in
respect to the course and conduct of the patent application prosecution matters
within the scope of the Patents licensed under this License Agreement and such
information (to which the obligation of confidentiality applies) disclosed
pursuant to this Section 10.1 shall be Confidential Information for purposes of
Article 8.
11. INFRINGEMENT OF PATENTS AND TRADEMARKS
11.1 If either party shall become aware of any infringement of any Patent in the
Territory, then the party having such knowledge shall give notice to the other
within ten (10) days of becoming aware of such infringement and the basis
therefor.
11.2 Subject to Section 11.3 hereof, Impax shall have the sole right to take
such action, as it deems appropriate and reasonable, whether by action, suit,
proceeding or otherwise, at its own expense, to prevent or eliminate the
infringement of the Patents by others and to collect damages. NCH agrees to
cooperate with Impax in any reasonable manner in an action brought by Impax.
Impax agrees to pay all reasonable out-of-pocket expense incurred by NCH as a
result of NCH's cooperation in the prosecution of any such action, suit or
proceeding for infringement. Impax shall be entitled to retain any damages
recovered by bringing the action for patent infringement.
11.3 Within ninety (90) days of receipt of notice by Impax of the infringement
of any Patents by commercial sale or offer for commercial sale through more than
one (1) sales outlet within one (1) or more countries of the Territory, or by
commercial use of the products or contributing to, or inducement of, any of the
foregoing, Impax shall commence reasonable action to terminate such
infringement. Should Impax take such reasonable action within ninety (90) days
of receipt of such notice and nevertheless fail to terminate the infringement
within one hundred eighty (180) days of receipt of notice of such infringement,
Impax shall bring formal suit against the infringer in a court of competent
jurisdiction to terminate such infringement. Should Impax fail to take
reasonable action to terminate such infringement within said ninety (90) days,
or to terminate such infringement within said one hundred eighty days (180),
then, the running royalty for Licensed Products sold in such country shall be
immediately reduced to fifty percent (50 %) of the then-current running royalty
rate. The reduced rate shall remain in effect until expiration of the Royalty
Period, or until such time as the infringement terminates, the infringed Impax
Patents expire, or as otherwise provided for in this License Agreement.
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12. INFRINGEMENT OF THIRD PARTY RIGHTS
12.1 If either party to this License Agreement shall become aware of any action,
or suit, or threat of action or suit, by a third party alleging that the
manufacture, use, marketing, distribution, offer for sale or sale of any
Licensed Product infringes a patent or violates any other proprietary rights of
any third party, the party aware of same shall notify the other party of the
same and fully disclose the basis therefor within ten (10) days of becoming
aware of such action, or suit, or threat of such action or suit.
12.2 Impax shall have the right, but not the obligation, (a) to secure a
license, at Impax's expense, with the right to sublicense, which would obviate
the alleged infringement and Impax shall grant to NCH, at no additional cost, a
sublicense under such license; or (b) to develop at Impax's expense one or more
substitute Licensed Products which are substantially equivalent in performance
to the then-existing Licensed Products but which are free of the alleged
infringement. NCH shall cooperate at NCH's reasonable expense in such
development, and in negotiations for such license, as Impax may reasonably
request.
12.3 In the event Impax elects not to exercise its rights under Section 12.2
within ninety (90) days of receiving notice of such claim, or otherwise notifies
NCH within such ninety (90) days that it does not intend to exercise such right,
NCH shall have the right to defend any such claim at its own expense and sole
discretion as to the control, conduct and prosecution of such defense. If, by
the terms of any settlement or if by a judgment, decree or decision of a court,
tribunal or other authority of competent jurisdiction emanating from NCH's
defense of such claim, NCH is required to obtain a license from a third party in
order to make, have made, use, offer for sale, sell or import Licensed Product
(hereinafter "Third Party License") and/or to compensate or pay damages to such
third party, and/or pay royalties under such license, and/or incur cost or
expense in the defense of such claim, then, NCH shall have the right to credit
all of such compensation, damages, royalties and reasonable out-of-pocket cost
and expense against running royalties owed to Impax until such time as any
allowable credit is fully taken.
12.4 Nothing in this Article 12, or in Article 11, shall be construed as a
waiver or cure of any breach of any warranties set forth in Article 7, or any
release of any claim by NCH as may be appropriate relating thereto.
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13. NOTICES
All notices required or permitted hereunder shall be given in writing
and sent by facsimile transmission, or mailed postage prepaid by first class
certified or registered mail, or sent by a nationally recognized express courier
service, or hand delivered at the following addresses:
Novartis Consumer Health, Inc.
560 Morris Avenue
Summit, New Jersey 07901-1312
Attention: General Counsel
Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, Pennsylvania 19124
Attention: CEO
Any notice, if mailed properly addressed, postage prepaid, shall be
deemed made three (3) days after the date of mailing as indicated on the
certified or registered mail receipt, or on the next business day if sent by
express courier service or on the date of delivery or transmission if hand
delivered or sent by facsimile transmission.
14. FORCE MAJEURE
Neither party shall be responsible or liable to the other hereunder for
failure or delay in performance of this License Agreement due to any war, fire,
flood, accident or other casualty, or any labor disturbance or act of God or the
public enemy, or any other contingency beyond such party's reasonable control.
In addition, in the event of the applicability of this Article, the party
affected by such force majeure shall use reasonable efforts, consistent with
good business judgment, to eliminate, cure and overcome any of such causes and
resume performance of its obligations.
15. PUBLICITY
Impax and NCH agree not to issue any press release or other public
statement disclosing the existence of or relating to this License Agreement
without prior written consent of the other party; provided, however, that
neither Impax nor NCH shall be prevented from complying with any duty of
disclosure it may have pursuant to law subject to notifying the other party in
writing and giving such other party reasonable time to comment on the same prior
to disclosure.
16. ASSIGNMENT
This License Agreement and all rights and obligations hereunder are
personal to the parties hereto and may not be assigned without the express prior
written consent of the other party. Any assignment or attempt at same in the
absence of such prior written consent shall be void and without effect; provided
that, either party may assign this License Agreement to an Affiliate or any
successor by merger or sale of all or substantially all of its business units to
which this License Agreement relates without such consent. This License
Agreement shall be binding upon the successors and permitted assigns of the
parties and the name of a party appearing herein will be deemed to include the
names of such party's successors and permitted assigns to the extent necessary
to carry out the intent of this License Agreement.
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17. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New Jersey as though made and to be fully performed in
said State.
18. SEVERABILITY
If any one or more of the provisions of this License Agreement shall be
held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby. In the event any provision shall be held invalid,
illegal or unenforceable the parties shall use commercially reasonable efforts
to substitute a valid, legal and enforceable provision which, insofar as
possible, implements the purposes hereof.
19. MISCELLANEOUS
19.1 Impax must inform NCH in writing of Impax's intention to file a voluntary
petition in bankruptcy, or of another's intention to file an involuntary
petition in bankruptcy in respect to Impax at least thirty (30) days prior to
the filing of such a petition; provided that, if Impax is not aware of another's
intention to file an involuntary petition in bankruptcy in respect of Impax
thirty (30) days prior to the filing of such petition, Impax shall inform NCH in
writing of such other party's intention to file as soon as reasonably possible
after Impax becomes aware of it. Upon receipt of such notice, NCH in its sole
discretion shall have the option of terminating this License Agreement upon
sixty (60) days written notice to Impax, unless Impax refrains from filing its
petition, withdraws its petition, prevents the other party from filing its
involuntary petition or obtains dismissal of the petition, as the case may be,
during this sixty (60) period. The filing of such petition without conforming to
this requirement shall be deemed a material, pre-petition incurable breach of
this License Agreement.
19.2 The failure of any party hereto at any time or times to require performance
of any provisions hereof shall in no manner affect its rights to enforce such
provision at a later time.
20. INDEPENDENT CONTRACTORS
The parties shall perform their obligations under this License Agreement as
independent contractors and nothing contained in this License Agreement shall be
construed to be inconsistent with such relationship or status. This License
Agreement shall not constitute, create or in any way be interpreted as a joint
venture or partnership of any kind.
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21. COUNTERPARTS
This License Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
22. ENTIRE AGREEMENT
This License Agreement, together with the Supply Agreement, constitute
the entire understanding between the parties relating to the subject matter
thereof, and no amendment or modification to this License Agreement shall be
valid or binding upon the parties unless made in writing and signed by the
representatives of such parties.
IN WITNESS WHEREOF, the parties hereto have caused this License Agreement to be
executed as of the date first written above by their duly authorized officers.
NOVARTIS CONSUMER IMPAX LABORATORIES, INC.
HEALTH, INC.
By: /s/ Lynne Millheiser By: /s/ Barry R. Edwards
------------------------------- -----------------------------
Name: Lynne Millheiser Name: Barry R. Edwards
--------------------------- ---------------------------
Title: Sr. Vice President O.T.C. Title: co-CEO
---------------------------- -------------------------
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