AlgoRx Pharmaceuticals, Inc. - Capsaicin License - Marco Pappagallo
EXHIBIT 10.11
LICENSE AGREEMENT
This License Agreement (the "Agreement") is entered into as of August 28,
2001 (the "Effective Date") between MARCO PAPPAGALLO, M.D. (the "Inventor"), and
ALGORX PHARMACEUTICALS, INC., a Delaware corporation ("AlgoRx").
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions. When used in this Agreement, the following terms will
have the following meanings:
1.1.1 "Affiliate" means, as to any person, another person controlled by,
under common control with, or controlling such person. For these purposes,
"control" means (a) the possession, directly or indirectly, of the power to
direct the management or policies of a person or entity, whether through the
ownership of voting securities, by contract, or otherwise, or (b) the ownership,
directly or indirectly, of at least fifty percent (50%) of the outstanding
voting securities or other ownership interest of a person or entity , or such
lesser percentage as is the maximum allowed to be owned by a foreign corporation
in a particular jurisdiction.
1.1.2 "Field of Use" means any human or non-human diagnostic, prophylactic
or therapeutic use of the Licensed Patents and Licensed Technology.
1.1.3 "Improvements" means all patentable inventions, including without
limitation compounds and methods that are based on the Licensed Technology or
which could not be conceived, developed or reduced to practice but for the use
of the Licensed Technology.
1.1.4 "Licensed Patents" means U.S. Provisional Patent Application No.
60/006,385 and U.S. Utility Patent Application No. 08/746,207 (U.S. Patent No.
6,248,788) together, subject to Section 2.1, with all applications and patents,
U.S. and foreign, claiming priority therefrom, and any applications or patents
relating to Improvements developed by the Inventor as in effect at the Effective
Date.
1.1.5 "Licensed Product(s)" means any product(s) developed, manufactured
or sold by AlgoRx or its sublicensees which make use of the Licensed
Technology.
1.1.6 "Licensed Services" means any services performed by AlgoRx or its
sublicensees which make use of the Licensed Technology.
1.1.7 "Licensed Technology" means all know-how, proprietary knowledge,
information and expertise possessed or developed by the Inventor or to which the
Inventor has acquired or will acquire rights, embodied in or relating to the
Licensed Patents and the use of capsaicin and its analogues for pain relief, and
includes the Licensed Patents and any Improvements to which the Inventor has
rights at the Effective Date, but does not include U.S. Patent Application No.
09/041294 (U.S. Patent No. 5,962,532), certain rights to which are licensed to
AlgoRx from Dr. Pappagallo and James Campbell, M.D. and Richard A. Meyer, M.S.
under a separate License Agreement of even date herewith among Dr. Pappagallo,
Dr. Campbell, Mr. Meyer and AlgoRx (the "Main License Agreement"); provided,
however, that if during the term of this Agreement the Inventor develops or
otherwise has rights to any technology under the Licensed Patents
-1-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
relating to any injectable product or injectable service (collectively,
"Injectable Products and/or Services") using capsaicin and its analogues for
pain relief ("Injectable Product Or Service Rights") then, to the extent the
Inventor has any legally licensable ownership in such Injectable Product Or
Service Rights, such Injectable Product Or Service Rights will automatically,
upon the Inventor's obtaining such Injectable Product Or Service Rights, be
licensed to AlgoRx under, and as part of the Licensed Technology as defined in,
the Main License Agreement.
1.1.8 "Losses" means claims, losses, liabilities, damages, fines,
penalties, costs and expenses (including, without limitation, interest which may
be imposed in connection therewith), expenses of investigation, reasonable fees
and disbursements of counsel and of other experts with respect to any action,
proceeding, investigation or claim.
1.1.9 "Net Sales" means revenue from sales of any Licensed Products or
provision of any Licensed Services, net of the following deductions when
applicable and separately invoiced: cash, trade, or quantity discounts; sales,
use, or other excise taxes (but not income or franchise taxes of AlgoRx or its
sublicensees) or tariffs or import/export duties imposed upon particular sales
or services; transportation charges; and rebates, allowances or credits to
customers because of rejections, recalls or returns.
1.1.10 "Product Covered by a Valid Claim" means any Licensed Product the
manufacture, use or sale of which, but for the license granted hereunder, would
infringe any Valid Claim. For purposes of this Agreement, Products Covered by
Valid Claims will be interpreted on a country or other political
jurisdiction-by-country or other political jurisdiction basis and on a
day-by-day basis within each country or other political jurisdiction.
1.1.11 "Service Covered by a Valid Claim" means any Licensed Service the
performance of which, but for the license granted hereunder, would infringe any
Valid Claim. For purposes of this Agreement, Services Covered by Valid Claims
will be interpreted on a country or other political jurisdiction-by-country or
other political jurisdiction basis and on a day-by-day basis within each country
or other political jurisdiction.
1.1.12 "Valid Claim" means a claim of any of the Licensed Patents which
has not expired nor been held invalid or unenforceable by final decision of a
court or other governmental agency of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal, and which is not admitted by the
Inventor to be invalid or unenforceable through reissue, disclaimer or
otherwise.
1.2 Interpretation. Unless the context otherwise requires, the following
rules of interpretation will apply:
1.2.1 Certain Words. The words "herein," "hereof," "therein," "thereof and
words of similar import refer to the document as a whole and not to the
particular phrase, clause, sentence, paragraph, section or division of the
document in which such word is used.
1.2.2 Singular, Plural, Etc. Words in the singular include the plural and
words in the plural include the singular, and words expressed in one gender
(whether masculine, feminine or neuter) include all other genders.
1.2.3 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
-2-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
ARTICLE 2
LICENSE
2.1 Grant Of License. The Inventor hereby grants to AlgoRx a
non-exclusive, worldwide and perpetual license to use, license or otherwise
exploit the Licensed Technology in the Field of Use, to develop, have developed,
make, have made, use, import and sell, have sold and offer for sale Licensed
Products and perform Licensed Services, with the right (subject to compliance
with Section 2.4) to sublicense with respect to any or all of such recited
purposes. Notwithstanding anything in the foregoing to the contrary (a) other
than the Licensed Patents specifically cited in Section 1.1.4, the Inventor
grants such license hereunder in and to any applications and patents, U.S. and
foreign, claiming priority therefrom only to the extent that the Inventor has
any legally licensable ownership in such other applications and patents, and (b)
Injectable Product Or Service Rights will be governed by the provisions of
Section 1.1.7 relating thereto.
2.2 No Grants To Third Parties. During the term of this Agreement, the
Inventor will not assign or otherwise grant, by license or other arrangement,
any of his rights in the Licensed Technology to third parties.
2.3 Exclusive Ownership. If, at any time after the Effective Date, the
Inventor becomes the exclusive owner of the Licensed Technology, the license
granted by the Inventor hereunder to AlgoRx will thereupon and thereafter,
during the term of this Agreement, automatically become and remain exclusive to
AlgoRx. At the Effective Date, and simultaneously with the execution and
delivery by AlgoRx and the Inventor of this Agreement, James N. Campbell has
executed and delivered to AlgoRx an Undertaking in the form of Exhibit A. From
and after the date, if ever, upon which the license granted hereunder by the
Inventor to AlgoRx and the sublicense granted by AlgoRx to the Inventor become
exclusive pursuant to this Section 2.3, then from such date and continuing
during the balance of the term of this Agreement, (a) the running royalty rate
under Section 3.2 will automatically increase from one-half percent (1/2%) to
one and one-half percent (1.5%) and (b) all references in this Agreement to
one-half percent (1/2%) automatically will be deemed to be to one and one-half
percent (1.5%), and (c) the amount of any milestone payment that has not been
become due and payable under Section 3.1 will automatically be payable when due
at an amount equal to three (3) times the amount set forth in Section 3.1 for
such milestone payment. Simultaneously with the execution and delivery by the
parties of this Agreement, Richard A. Meyer has executed and delivered to AlgoRx
and Dr. Pappagallo a Disclaimer in the form of Exhibit B.
2.4 Sublicense To The Inventor, Certain Limitations. AlgoRx hereby grants
to the Inventor a paid-up, non-exclusive license, which will terminate when this
Agreement terminates, to use the Licensed Technology in the United States,
solely for the purposes of research and development, without the right to
commercialize, and subject to the obligations of the Inventor under this
Agreement. Any Injectable Product Or Service Rights will be governed by the Main
License Agreement.
2.5 Sublicensing. Any sublicense granted by AlgoRx under this Agreement
will provide that such sublicense will terminate automatically upon termination
of this Agreement, will be consistent with the terms of this Agreement, and will
provide the Inventor with the rights to require records and to perform audits.
In each sublicense, the Inventor will be expressly identified as an intended
third party beneficiary.AlgoRx will notify the Inventor in writing promptly
after any sublicense is granted hereunder by AlgoRx and will provide the
Inventor with
-3-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
a complete copy of any such sublicense. AlgoRx will be responsible for
collection from AlgoRx's sublicensees of all royalty amounts that are due from
AlgoRx to the Inventor by AlgoRx in respect of such sublicenses, and for
remitting to the Inventor such royalty payment amounts together with a report
setting out Net Sales and royalty calculations relating to each relevant
sublicense within the same time periods as specified in Article 2. AlgoRx will
use its commercially reasonable diligent efforts to collect royalties from its
sublicensees and will not be deemed to be in breach of this Agreement for any
failure of any of its non-Affiliate sublicensees to pay royalties due from such
sublicensee to AlgoRx for so long as AlgoRx is using its commercially reasonable
diligent efforts to collect such royalties and reports on the status of such
collection efforts in the reports provided pursuant to Section 3.4.
2.6 General Obligations Of The Inventor. The Inventor will provide
commercially reasonable assistance to transfer the data and know-how necessary
for AlgoRx to begin development of the Licensed Technology. The Inventor will
have no obligation to make, or to attempt to make, any Improvements in the
Licensed Technology, and no payments will be made to the Inventor by AlgoRx
pursuant to this Agreement as consideration for any efforts by him to make such
Improvements, and all amounts paid to the Inventor by AlgoRx pursuant to this
Agreement will be solely in consideration for the license granted to AlgoRx
pursuant to Section 2.1.
ARTICLE 3
ROYALTY PAYMENTS AND REPORTS
3.1 Milestone Royalty Payment. The following milestone royalty payments
will be paid by AlgoRx to the Inventor:
Amount of Milestone
Milestone Royalty Payment
--------- -------------------
First administration to a subject of a topical or
transdermally active drug, using Licensed Technology, in
an FDA-approved Phase I clinical trial: $ 40,000.00
First administration to a subject of a topical or
transdermally active drug, using Licensed
Technology, in an FDA-approved Phase III clinical trial
or other FDA-approved clinical trial than can, under FDA
regulations, result in FDA approval for commercial use,
application or marketing of the first Licensed Product in
the Field of Use: $ 66,000.00
FDA approval for commercial use, application or marketing of
the first Licensed Product in the Field of Use: $116,000.00
-----------
Total Milestone Royalties $222,000.00
===========
-4-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
Milestone royalty payments will be paid within thirty (30) days after the
date upon which the relevant milestone has been achieved.
3.2 Running Royalties. In addition to the milestone royalty payments
provided for in Section 3.1, AlgoRx will pay a running royalty to the Inventor
of one-half percent (0.5%) of Net Sales by AlgoRx and its sublicensees in the
United States and in each other country or other political jurisdiction in which
the Licensed Products are transdermal or topical products or services, and not
Injectable Products and/or Services, and in each case are Products Covered by a
Valid Claim or the Licensed Services are with respect to transdermal delivery
and not injectable delivery, and in each case are Services Covered by a Valid
Claim, as to each such country or other political jurisdiction only during such
periods of time as such Licensed Products are, within such relevant country or
other political jurisdiction, Products Covered by a Valid Claim and/or such
Licensed Services are Services Covered by a Valid Claim. Such running royalty
payments will be paid quarterly in arrears, within sixty (60) days after the end
of each calendar quarter during the term hereof in which such Net Sales
occurred. Each such payment will be accompanied by the reports provided for in
Section 3.4.2. The obligation to pay royalties to the Inventor pursuant to this
Article 2 is imposed only once with respect to the same unit of Licensed Product
or the same Licensed Services regardless of the number of Licensed Patents
pertaining thereto, and will be payable only with respect to the final sale of
the Licensed Products or rendering of Licensed Services to the end user, and
will not be payable on intermediate transactions, such as sales by AlgoRx of
Licensed Products to its Affiliates or to distributors.
3.3 Manner Of Payment. AlgoRx will make all payments required under this
Agreement in the United States in United States dollars. Amounts due on the sale
of Licensed Products outside the United States will be converted into United
States dollars using the average rate of exchange for the applicable currency
quoted in The Wall Street Journal for the last business day of the relevant
quarter.
3.4 Reports. AlgoRx will deliver to the Inventor the following reports
during the term of this Agreement, each of which reports will be considered as
Confidential Information of AlgoRx under Article 8:
3.4.1 Milestone Royalty Payment Reports. With the payment by AlgoRx of any
milestone royalties as specified in Section 3.1, a written report, in
commercially reasonable detail, of the occurrence of such milestone event,
including therewith commercially reasonable documentary support for the
occurrence of such milestone event;
3.4.2 Running Royalty Reports. With the running royalty payments as
specified in Section 3.2, a written report setting forth, in commercially
reasonable detail, Net Sales by AlgoRx and Net Sales by sublicensees of AlgoRx,
showing in each case the royalty calculation in respect of such sublicenses, and
including therewith commercially reasonable documentary support for the
calculation of such running royalty payments for AlgoRx and such sublicensees.
3.5 Records Retention. For a period of thirty-six (36) months after the
year in which such Net Sales were received, AlgoRx and its sublicensees will
keep complete and accurate records, in sufficient detail to permit the Inventor
to confirm the accuracy of royalty calculations pursuant to this Agreement,
pertaining to the sale of Licensed Products and provision of Licensed Services
and covering all transactions during such year from which such Net Sales were
derived.
-5-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
3.6 Audit. At the request and expense of the Inventor, AlgoRx and its
sublicensees will permit an independent, certified public accountant appointed
by the Inventor and acceptable to AlgoRx in writing, at reasonable times and
upon reasonable prior written notice, to examine those records of AlgoRx and its
sublicensees as may be necessary to (a) determine the correctness of any payment
or report dealing with payments made by AlgoRx under this Agreement; or (b)
obtain information as to the royalties payable by AlgoRx for any quarter in the
case of AlgoRx's failure to report or pay royalties in accordance with this
Agreement. Such accountant will not disclose to the Inventor any information
other than information relating to the relevant quarterly reports, royalties and
payments, and will disclose such information in a format agreed upon in writing
by the parties that will ensure that no confidential information of AlgoRx is
disclosed. Results of any such examination will be available to all parties
hereto. The Inventor will bear the expense of the audit, unless such audit
discloses a variance resulting in underpayment by AlgoRx of more than five
percent (5%) of the actual amount due, and in case of such variance of more than
five percent (5%), AlgoRx will promptly pay to the Inventor the full amount of
such underpayment and will pay the expense of the audit. If AlgoRx is determined
by the relevant examination to have underpaid, more than three (3) times within
the five (5) year period commencing with the Effective Date, more than five
percent (5%) of the actual amount due, then, as to such underpayment third
occurrence and as to each underpayment occurrence, if any, thereafter, AlgoRx
will pay to the Inventor, in addition to the amount of such underpayment and the
expenses of such relevant audit, an amount, as a penalty, equal to fifty percent
(50%) of the amount of such underpayment.
3.7 Taxes. If AlgoRx is required to withhold and remit any tax to the
revenue authorities in any state or country or other political jurisdiction,
pursuant to the laws of such state or country or other political jurisdiction,
regarding any payment to the Inventor made by AlgoRx under this Agreement, such
amount will be withheld and remitted by AlgoRx and AlgoRx will notify the
Inventor in writing thereof and will promptly furnish the Inventor with copies
of any tax certificate or other documentation evidencing such withholding. All
taxes levied on the income of the Inventor arising from this Agreement will be
borne by the Inventor. The parties will take steps, consistent with then-current
commercial practices, to (a) avoid or minimize any such withholding, and (b)
take advantage of such double taxation avoidance agreements as may be available.
ARTICLE 4
LICENSE FEE
4.1 License Fee. As the payment by AlgoRx to the Inventor of a license fee
for the license granted under this Agreement, AlgoRx will reimburse to the
Inventor, upon submission to AlgoRx by the Inventor of commercially reasonable
documentation with respect thereto, a total of up to Eleven Thousand Five
Hundred Dollars ($11,500.00) in documented legal fees and costs incurred by the
Inventor in connection with his negotiation and execution of this Agreement,
including advice related to the Inventor's ownership position with respect to
the Licensed Patents, but excluding any other expenses related to any of the
Licensed Patents.
4.2 Documentation. Within thirty (30) days after the Effective Date, the
Inventor will provide AlgoRx with commercially reasonable documentation to
permit AlgoRx to verify the amount of fees and expenses for which the Inventor
seeks such reimbursement under Section 4.1.
-6-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
ARTICLE 5
INTELLECTUAL PROPERTY
5.1 Ownership Of Improvements Developed By The Inventor. The Inventor will
own any Improvements developed by him, provided that the work to develop such
Improvements was not performed pursuant to a contract requiring such work
between the Inventor and AlgoRx, and provided that no resources or Confidential
Information of AlgoRx were used for such work. Such Improvements as in effect as
of the Effective Date are included within the Licensed Technology. The Inventor
acknowledges his obligations under the Main License Agreement as to Improvements
thereunder.
5.2 Third Party Rights In Improvements. The Inventor represents that he is
not a party to any agreement existing as of the Effective Date pursuant to which
third parties are supporting, funding, or contributing to any research designed
to lead to any Improvements and/or granting rights in any Improvements.
5.3 Ownership Of Improvements Developed By AlgoRx. Any technology or
Improvements conceived or developed by AlgoRx whether on its own or by third
parties, pursuant to work carried out under contract for AlgoRx, or otherwise
involving the use of resources belonging to AlgoRx, whether facilities,
materials or AlgoRx Confidential Information, will be the property of AlgoRx.
5.4 Publications. The Inventor acknowledges that publication or oral
disclosure of any work carried out in connection with the Licensed Technology,
including Improvements existing at the Effective Date, or of the results of such
work, prior to the date of filing for patent, copyright or other applicable
statutory protection, could result in the loss of commercial value of any such
work or results. The Inventor will therefore provide AlgoRx with sufficient
disclosure in writing regarding any matter related to work and work results or
other intellectual property related to the Licensed Technology, including
Improvements, existing at the Effective Date, at least ninety (90) days prior to
publication of any kind with respect thereto by anyone other than AlgoRx, to
allow AlgoRx to evaluate such proposed disclosure as it may affect AlgoRx's
interests. The Inventor will consult with AlgoRx prior to any such disclosure or
publication and will in good faith consider modifications to such proposed
publication if such disclosure regarding work, work results or intellectual
property relating to the Licensed Technology would, in AlgoRx's good faith view,
as communicated to the Inventor in a writing signed by the President or Chief
Executive Officer of AlgoRx, would materially adversely affect the business of
AlgoRx. The provisions of Section 5.5 of the Main License Agreement will apply
to any publication by the Inventor related to Injectable Products or Services.
5.5 Infringement Of Licensed Patents. This Section 5.5 will apply only if
AlgoRx obtains an exclusive license or assignment to the Licensed Technology
pursuant to Section 2.3, provided that nothing in this Agreement will be deemed
or construed to prevent or limit any rights of AlgoRx to take any lawful action,
or to refrain from taking any action, as a licensee hereunder.
5.5.1 Notice. Each party will promptly report to the other party
promptly in writing as to any known or suspected infringement of any of the
patent rights within the Licensed Patents, and will provide the other party with
all information available to such notifying party with respect to such
infringement or suspected infringement.
-7-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
5.5.2 Action By AlgoRx. If AlgoRx believes that any patent rights
within the Licensed Patents have been infringed by any third party, AlgoRx,
subject to applicable law, will have the right at its discretion to negotiate to
obtain an agreement to end such infringement or use without authorization. If
such negotiation is unsuccessful, AlgoRx will have the right, in its
commercially reasonable judgment and subject to applicable law, to institute an
infringement action or other appropriate legal action against such third party,
and, in its commercially reasonable judgment, to settle any such action or
dispute, provided that AlgoRx will not compromise or settle any such action
without the prior written consent of the Inventor, which consent the Inventor
will not unreasonably or untimely withhold. AlgoRx will have the sole and
exclusive right to select counsel and will pay all expenses of any such action,
including without limitation attorneys' fees and court costs, provided that (1)
if there is a determination, by the court or authorized body resolving such
action, of gross negligence, intentional misrepresentation or fraud by the
Inventor, then the Inventor will, upon the written request of AlgoRx to the
Inventor and subject to clause (2) immediately following, promptly pay, or
promptly reimburse AlgoRx for, the expenses of such action as such reimbursement
or payment amount will be set forth in AlgoRx's written request therefor,
provided that if the Inventor has been determined to have committed fraud there
will be no limit as to liability of the Inventor to AlgoRx. Notwithstanding
anything in the foregoing to the contrary, AlgoRx recognizes that Inventor did
not direct (and was not involved in) the prosecution of the Licensed Patents.
Any damages, royalties, settlement fees or other consideration paid by the third
party infringer as a result of legal action or settlement negotiations in
connection with such infringement will be paid to and will be the property of
AlgoRx. The amount of such damages, royalties, settlement fees, or other
consideration actually received by AlgoRx, net of the expenses incurred by
AlgoRx in such legal action, will be treated as Net Sales pursuant to Article 2
and a royalty in accordance with Sections 2.3 and 3,2 on such net amount will be
payable by AlgoRx to the Inventor in respect of such amount, as part of the
royalty provided in Article 2, provided that the value of any non-cash
consideration so received by AlgoRx will be determined in good faith by the
Board of Directors of AlgoRx and all royalty amounts thereon will, as calculated
upon such determined fair market value, be paid to the Inventor in cash and not
in kind. If deemed necessary by AlgoRx, the Inventor, subject to applicable law,
will bring suit against third party infringers or join as a party to the action,
at AlgoRx's option and expense. To the extent that AlgoRx has paid for the
expenses of such action, any damages, royalties, settlement fees or other
consideration paid by the third party infringer as a result of such legal action
in connection with such infringement will be held by the Inventor as agent for
AlgoRx and will be remitted by them to AlgoRx promptly after their receipt
thereof.
5.5.3 Action By The Inventor. If AlgoRx declines to act pursuant to
Section 5.5.2. AlgoRx will, promptly after such decision not to act, give
written notice to the Inventor of such decision. If the Inventor believes, after
delivery of such notice by AlgoRx, that any patent rights within the Licensed
Patents have been infringed by any third party, the Inventor may at his expense
take any action the sees fit with respect to such infringement, including
initiating legal proceedings. If the Inventor commences any such action, the
Inventor will promptly notify AlgoRx, in writing in commercially reasonable
detail, of such commencement. In exercising his rights pursuant to this Section
5.5.3, the Inventor will have the sole and exclusive right to select counsel and
will, except as provided below, pay all expenses of the action, including
without limitation attorneys' fees and costs, and will have the right, in his
commercially reasonable judgment, to settle any such action or dispute, provided
that the Inventor will not compromise or settle any such action without the
prior written consent of AlgoRx, which consent will not be unreasonably or
untimely withheld. AlgoRx, in its sole discretion, and subject to the
limitations stated in the last sentence of this Section 5.5.3, may elect in
writing to the Inventor, within sixty
-8-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
(60) days after the commencement of such litigation, to contribute to the costs
incurred by the Inventor in connection with such litigation. Any damage,
royalties, settlement fees or other consideration received by the Inventor as a
result of such litigation will be shared by the Inventor and AlgoRx pro rata
based on their respective sharing of the costs of such litigation. If deemed
necessary by the Inventor, or by AlgoRx, by written notice to the other, AlgoRx
will join as a party to the action but will be under no obligation to
participate except to the extent that such participation is required as a result
of being a named party to the action. At the written request of the Inventor if
he is participating in such action, AlgoRx will offer reasonable assistance in
connection therewith at no charge to the Inventor provided that for purposes of
this Section 5.5.3, all out-of-pocket expenses incurred by AlgoRx in rendering
such assistance will be treated as amounts contributed by AlgoRx to the costs of
such litigation. AlgoRx will have the right to participate in and be represented
in any such action by its own counsel at its own expense.
5.6 Infringement Actions By Third Parties.
5.6.1 Notice; Defense By AlgoRx. In the event of the institution of
any action by a third party against AlgoRx or the Inventor for patent
infringement involving the manufacture, use, distribution, marketing or sale of
any Licensed Product or performance of any Licensed Service, the defendant party
hereto will promptly notify the other party hereto in writing of such action if
such action includes claims with respect to the Licensed Patents. AlgoRx will
have the right to defend such action at its own expense, and the Inventor will
assist and cooperate with AlgoRx, at AlgoRx's expense, to the extent necessary
in the defense of such action. During the pendency of such action, AlgoRx will
pay any royalties for Licensed Products or Licensed Services for which such
infringement is claimed, with respect to the country or countries or other
political jurisdiction(s) in which such infringement is claimed, into an escrow
account to be implemented by AlgoRx at such bank as the Board of Directors of
AlgoRx, acting in good faith, determines, and with the fees and cost of
implementing and operating such escrow account to be paid by AlgoRx, provided
that AlgoRx will during such pendency continue to pay royalties, as otherwise
provided in this Agreement, with respect to all other Licensed Products or
Licensed Services, and other countries or other political jurisdictions, with
respect to which, in each case, no allegation of infringement has been made,.
5.6.2 AlgoRx As Prevailing Party. If AlgoRx finally prevails because
it is held not to be infringing any patents belonging to such third party or
because such third party's patent is held invalid, AlgoRx will remit to the
Inventor the royalties kept in escrow pursuant to Section 5.6.1, to the extent
the Licensed Products or Licensed Services made the subject of the action are
determined to have been, and to be, Products or Services Covered by a Valid
Claim, and will continue to pay the royalties as set forth in Article 2,
provided that AlgoRx will be entitled to a credit against payments due under
this Agreement of an amount equal to one-half (1/2) of the commercially
reasonable costs actually incurred by AlgoRx in such action, and further
provided that in no event will such credit be more than fifty percent (50%) of
such payments due hereunder for Licensed Products or Licensed Services in such
country or other political jurisdiction which is the subject of such action. Any
such credit not deducted for a calendar quarter as a result of the immediately
preceding sentence may be carried forward and deducted by AlgoRx in subsequent
calendar quarters.
5.6.3 AlgoRx Not As Prevailing Party. If AlgoRx finally is not the
prevailing party in such action, whether by judgment, award, decree or
settlement, and is required to pay a royalty to such third party, AlgoRx will
keep the royalties kept in escrow pursuant to Section 5.6.1 as a reimbursement
of such royalties payable to a third party and, if the escrowed
-9-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
amount is insufficient to reimburse AlgoRx for such royalties payable to a third
party, will continue to pay to the Inventor the royalties for such Licensed
Products or Licensed Services in such country or other political jurisdiction
which is the subject of such action, if such Licensed Products or Licensed
Services are, therein, Products or Services Covered by a Valid Claim, but AlgoRx
will be entitled to a credit against any payments due under this Agreement of an
amount equal to the royalty paid to such third party, provided that in no event
will such credit be more than fifty percent (50%) of the payment due hereunder
for Licensed Products or Licensed Services in such country or other political
jurisdiction which is the subject of such action. In addition, if AlgoRx incurs
litigation expenses or is required to pay damages to such third party, AlgoRx
will be entitled to a credit against payments due under this Agreement of the
reasonable costs actually incurred in such action plus the damages payable to
the third party, until such costs and damages are recovered in full by AlgoRx.
The credit for expenses and damages (taken with the foregoing credit for
royalties to third parties) will, together, not be more than fifty percent (50%)
of the payment due hereunder by AlgoRx for Licensed Products or Licensed
Services, in such country or countries and such other political jurisdiction(s),
which are the subject of such action for the relevant period, but such credit
for expenses and damages will be extended for successive periods until the
entire amount of such expenses and damages incurred by AlgoRx has been
recovered; no credit will be afforded hereunder to AlgoRx if AlgoRx is found by
a court or other body of competent jurisdiction to have intentionally infringed
a third party's patent, or to have been unintentional but grossly negligent in
infringing a third party's patent.
5.6.4 Defense By The Inventor. If AlgoRx declines to defend such
action by a third party against the Inventor for patent infringement involving
the manufacture, use, distribution, marketing or sale of any Licensed Product or
performance of any Licensed Services, the Inventor may defend such action at his
own expense and will be entitled to require assistance from AlgoRx at the
Inventor's expense.
5.6.5 Consents To Settlement And Compromise. If AlgoRx defends an
action pursuant to Section 5.6.1, AlgoRx will not compromise or settle any such
action without the prior written consent of the Inventor, which will not be
unreasonably or untimely withheld. If the Inventor defends an action pursuant to
Section 5.6.4, the Inventor will not compromise or settle any such action
without the prior written consent of AlgoRx, which will not be unreasonably or
untimely withheld.
5.7 Patent Prosecution And Maintenance. AlgoRx may at its election and
subject to applicable law take over the prosecution and maintenance of the
Licensed Patents, including filing new applications in foreign countries
corresponding to any of the Licensed Patents, and any proceedings concerning
assertion of inventorship or ownership by the Inventor with respect to any of
the Licensed Patents or corresponding applications in foreign countries (each an
"Ownership Proceeding"), or filing in the United States and foreign countries
for patents relating to any existing Improvements made by the Inventor. The
Inventor, however, makes no representation or warranty as to the achievability
of any such action. If AlgoRx takes over such prosecution and maintenance,
AlgoRx will decide whether to file an application for patenting, or otherwise
pursue prosecution of, elements of the Licensed Technology in a particular
jurisdiction, and will decide whether it will fund any Ownership Proceedings. If
AlgoRx takes over such prosecution and maintenance, and thereafter declines to
pursue patent protection for an element of the Licensed Technology in a
particular jurisdiction, or decides not to fund an Ownership Proceeding, (a)
AlgoRx will promptly after such decision not to act, give written notice to the
Inventor of such decision, and (b) after delivery of such notice, the Inventor
may at his expense take any action he sees fit with respect to such filing or
other prosecution or with
-10-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
respect to such Ownership Proceeding(s), provided that the Inventor will
undertake no action with respect to any Ownership Proceeding unless such action
is approved in writing by AlgoRx, which approval AlgoRx will not unreasonably or
untimely withhold. Any applications for patents (or patents resulting from such
applications) so prosecuted by the Inventor, or obtained by the Inventor as a
result of an Ownership Proceeding, will be included in the Licensed Technology,
and the Inventor will comply with the obligations provided in this Agreement
with respect to such applications and patents. If the Inventor chooses to seek
such protection, AlgoRx hereby grants the Inventor the right, subject to the
provisions of Article 8, to use information relating to the Licensed Technology
solely for the purposes of filing and prosecuting such application. If the
Inventor declines to pursue patent protection for an element of the Licensed
Technology for which AlgoRx has also declined to pursue patent protection, (a)
the Inventor will, promptly after such decision not to act, give written notice
to AlgoRx of such decision, and (b) after delivery of such notice, AlgoRx will
have a period of ninety (90) days after such notice within which to file an
application for patenting, or otherwise pursue protection of, such elements of
the Licensed Technology. If AlgoRx undertakes any prosecution and maintenance of
the Licensed Patents, and/or any Ownership Proceeding, and/or any filing in the
United States and foreign countries for patents relating to any Improvements
made by the Inventor, (a) the Inventor will provide all commercially reasonable
assistance and participation to AlgoRx in connection therewith as AlgoRx may in
good faith request of him, provided that within thirty (30) days after
submission by the Inventor to AlgoRx of commercially reasonable supporting
documentation therefor, AlgoRx will reimburse the Inventor for his reasonable
travel and lodging expenses incurred in connection with rendering such
assistance and participation, and (b) AlgoRx will indemnify the Inventor for,
and hold him harmless against, any Losses incurred by the Inventor that are
caused by legal action by third parties against the Inventor arising from such
prosecution or maintenance, or Ownership Proceeding(s), so undertaken by AlgoRx.
AlgoRx will deduct the costs for any such prosecution or maintenance actions,
and any Ownership Proceeding(s), and for any such indemnification of the
Inventor pursuant to this Section 5.7, from royalty payments due under Article
3.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Representations Of The Inventor. The Inventor warrants to AlgoRx that:
(a) to his knowledge, the Inventor is a co-inventor who contributed to the
invention and development of the Licensed Patents as of the Effective Date (the
"Present Technology"), and (b) he has been advised by his legal counsel that he
is one of the lawful co-owners of the Licensed Patents, and (c) no third party
has been granted by him any rights to such Licensed Patents, and (d) he has been
advised by his legal counsel that he has the lawful right to grant the license
and rights granted to AlgoRx pursuant to this Agreement, and (e) this Agreement
is his valid and binding obligation, enforceable in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of creditors' rights
generally, and (f) neither AlgoRx nor AlgoRx's attorneys or other advisors or
representatives of AlgoRx have made any representations or warranties to the
Inventor with respect to the income tax or other tax consequences of any of the
transactions contemplated by this Agreement and he is in no manner relying on
AlgoRx or AlgoRx's attorneys or other advisors or representatives of AlgoRx with
respect to any such tax consequences or for any other advice with respect to any
such matters, or as to any other matters with respect to this Agreement.
-11-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
6.2 Representations Of AlgoRx. AlgoRx represents and warrants to the
Inventor that: (a) AlgoRx has the power and authority to execute, deliver and
perform this Agreement and (b) this Agreement is a valid and binding obligation
of AlgoRx, enforceable in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights generally.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification By The Inventor. The Inventor will defend, indemnify
and hold harmless AlgoRx and AlgoRx's sublicensees and their respective
officers, Directors, employees, agents and representatives and any person
claiming by or through any of them from and against any and all Losses arising
out of or resulting from (a) any breach of any of the material representations
or warranties made by the Inventor in this Agreement, and (b) any failure by the
Inventor to perform any of his material obligations contained in this Agreement.
7.2 Indemnification By AlgoRx. AlgoRx will defend, indemnify and hold
harmless the Inventor from and against any and all Losses arising out of or
resulting from (a) any breach of any of the material representations or
warranties made by AlgoRx in this Agreement, (b) any failure by AlgoRx to
perform any of its material obligations contained in this Agreement, and (c) any
claim arising out of or in connection with the manufacture, commercialization,
marketing, sale, or use of any Licensed Product that is manufactured by AlgoRx
or the performance of any Licensed Service performed by AlgoRx, provided that
the amount of any such indemnification will be decreased by any amounts
disbursed by AlgoRx pursuant to Section 5.6 because the Licensed Technology is
held to infringe any third party rights, and not otherwise recouped by AlgoRx by
a decrease in royalty payments hereunder as provided herein.
ARTICLE 8
CONFIDENTIALITY
8.1 Confidential Information. It is contemplated that in the course of the
performance of this Agreement each party will, from time to time, disclose
proprietary and confidential information to the other. For purposes of this
Agreement, "Confidential Information" means all confidential and proprietary
information of one party hereto disclosed by such party to the other party
during the term of this Agreement, including information contained in all
tangible materials, such as but not limited to samples of chemical substances
and drugs, instruments, and other materials remitted to a party, and which the
disclosing party identifies as confidential to the receiving party in writing
("writing" to include, for purposes of this Agreement, electronic communication
such as email, and to include without limitation a stamping or legend denoting
the confidential and/or proprietary nature of such information placed on the
first page and/or on subsequent pages of printed or electronic forms of such
information) either before, or at the time of, such disclosure, if such
disclosure is initially in written form, or, if initially orally disclosed, then
as so identified in writing by the disclosing party to the receiving party
within thirty (30) days after such initial oral disclosure.
8.2 Confidentiality Exceptions. Except to the extent expressly authorized
by this Agreement or otherwise agreed in writing by the parties, the receiving
party will keep confidential, and will take such reasonable measures to maintain
such Confidential Information of the disclosing party as confidential as it
takes to protect its own proprietary Confidential Information, and will not
publish or otherwise disclose and will not use for any purpose any
-12-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
Confidential Information furnished to it by the other party pursuant to this
Agreement, except to the extent that it can be established by the receiving
party by competent proof that such Confidential Information:
(a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure by the other party;
(b) was generally available to the public or otherwise part of the
public domain, other than through any act or omission of the receiving party in
breach of this Agreement, at the time of its disclosure to the receiving party;
(c) after its disclosure to the receiving party became generally
available to the public or otherwise part of the public domain other than
through any act or omission of the receiving party in breach of this Agreement;
(d) was disclosed to the receiving party by a third party who had no
obligation to the disclosing party not to disclose such Confidential Information
to others; or
(e) was independently developed by the receiving party by persons
who did not have access to the Confidential Information, and other than through
any act or omission of the receiving party in breach of this Agreement.
8.3 Permitted Uses. Each party may disclose the other's Confidential
Information to the extent such disclosure is reasonably necessary in filing or
prosecuting patent applications, prosecuting or defending litigation or
complying with applicable governmental regulations, provided that if a party is
required to make any such disclosure of the other party's Confidential
Information it will give reasonable advance written notice to the other party of
such disclosure requirement, describing such requirement in commercially
reasonable detail, and, except to the extent commercially inappropriate in the
case of pending patent applications, will use its best efforts to secure
confidential treatment of such Confidential Information so required to be
disclosed. AlgoRx may disclose any Confidential Information of the Inventor to
any sublicensee of AlgoRx so long as such disclosure is limited to Confidential
Information the sublicensee needs to know, in the commercially reasonable and
good faith judgment of AlgoRx, in order for such sublicensee to fulfill its
obligations under its sublicense from AlgoRx and provided that such sublicensee
is required in writing by AlgoRx to preserve the confidentiality of such
Confidential Information under obligations at least as stringent as those
imposed upon AlgoRx under this Agreement.
ARTICLE 9
TERM AND TERMINATION
9.1 Term. The license granted pursuant to this Agreement will expire upon
the expiration of the last to expire of the Licensed Patents, unless earlier
terminated in accordance with this Article 9.
9.2 Termination By AlgoRx. AlgoRx can terminate this Agreement:
(a) upon at least thirty (30) days prior written notice to the
Inventor, which notice will be effective no earlier than the first anniversary
of the Effective Date;
-13-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
(b) upon at least thirty (30) days prior written notice to the
Inventor, if during the term of this Agreement (i) the relevant applicable
policies of the university or other institution with which the Inventor is
affiliated, whether as an employee or consultant or otherwise at the relevant
time changes, or (ii) applicable law changes, in either case in the good faith
judgment of AlgoRx after consultation with its outside legal counsel, such that
AlgoRx no longer has the same access and rights to Improvements and/or to the
Licensed Technology hereunder as was in effect at the Effective Date, and in
either case if the Inventor is unable by law or, if lawful, by exercise of his
commercially reasonable diligent efforts, to secure the right for AlgoRx to use
and sublicense such Improvements and/or the Licensed Technology, as relevant, in
accordance with this Agreement;
(c) upon at least ten (10) days prior written notice to the Inventor
if the any or all of the Inventor fail to fulfill any material obligation of the
Inventor hereunder, other than the Inventor's obligation to procure for AlgoRx
the right to use Improvements or the Licensed Technology, and if such relevant
failure is not cured within ninety (90) days after receipt by the Inventor of a
written notice of such failure.
9.3 Termination By The Inventor. The Inventor can terminate this
Agreement:
(a) upon at least ten (10) days prior written notice to AlgoRx, if
AlgoRx fails to make a payment or provide a report it is required to provide
pursuant to Article 3, if such failure is not cured within one hundred and
eighty (180) days after receipt by AlgoRx from any of the Inventor of a written
notice of such failure;
(b) upon at least ten (10) days prior written notice to AlgoRx, if
AlgoRx fails to fulfill any material obligation of AlgoRx other than the payment
and report obligations contained in Article 3, if such failure is not cured
within one hundred and eighty (180) days after receipt by AlgoRx from any of the
Inventor of a written notice of such failure.
9.4 Effects Of Termination. Upon any termination of this Agreement:
(a) AlgoRx will cease to have any rights to use the Licensed
Technology pursuant to this Agreement, and will cease to grant any sublicenses
pursuant to this Agreement;
(b) AlgoRx will be allowed a grace period of one hundred and eighty
(180) days after the effective date of termination to dispose of any existing
inventory of Licensed Products already manufactured and to continue to perform
any Licensed Services already contracted for, unless the relevant performance
cannot, by commercially reasonable diligence, be completed within such one
hundred and eighty (180) day grace period, in which case AlgoRx will use its
commercially reasonable diligent efforts to terminate the agreement(s) relating
to such Licensed Services. At the end of such one hundred and eighty (180) day
grace period, all remaining Licensed Products not disposed of by AlgoRx will
either be destroyed by AlgoRx, or purchased by the Inventor, at the Inventor's
election as communicated in writing to AlgoRx at least forty-five (45) days
prior to the end of such grace period. AlgoRx will have a further thirty (30)
days after the end of such grace period to prepare the final report and pay the
royalties applicable to Net Sales during such one hundred and eighty (180) day
grace period;
(c) AlgoRx will remit to the Inventor all documentation and
materials relating to prosecution and maintenance of Licensed Patents, as well
as all Confidential Information relating to the Licensed Technology, in each
case that is in possession of AlgoRx.
-14-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
9.5 Surviving Obligations. The parties' obligations pursuant to Articles
3, 4, 5, 6, 7, 8, 9 and 10 will survive termination of this Agreement.
ARTICLE 10
MISCELLANEOUS
10.1 Relationship Of The Parties. Nothing in this Agreement is intended to
create, or creates, a partnership, trust, joint venture or employment
relationship between the parties. The relationship of the parties hereunder is
that of licensors and licensee, and no party hereto has any authority to bind
any other party hereto with respect to the subject matter of this Agreement.
10.2 Assignment; Successors And Assigns. The Inventor may not assign the
Licensed Technology or this Agreement, in whole or in part, without the prior
written consent of AlgoRx, which consent will not be unreasonably withheld or
delayed, provided that the Inventor may assign any or all of his rights and
obligations under this Agreement to an entity controlled by the Inventor,
provided further that the Inventor will after such assignment remain fully
liable and responsible for his representations and warranties hereunder, as well
as for the performance and observance of all of his duties and obligations
hereunder. AlgoRx may assign this Agreement in whole or in part, upon at least
thirty (30) days' prior written notice to the Inventor of such assignment. This
Agreement will inure to the benefit of and be binding upon the parties'
respective successors and assigns, and upon the Inventor's heirs, executors and
administrators.
10.3 Notices. Any report, payment, notice, or other communication required
or permitted under this Agreement will be in writing, will be delivered
personally, including delivery by courier such as FedEx or DHL, or by certified
mail, return receipt requested, postage prepaid, or by facsimile, or by
electronic mail ("email") and will be deemed given and received upon actual
delivery or, if mailed by certified mail, three (3) days after deposit in the
mail, or upon transmission by facsimile with confirmed answerback or upon
transmission by email upon confirmed delivery to the intended recipient,
addressed as follows:
If to AlgoRx, to:
AlgoRx Pharmaceuticals, Inc.
Attn: Chief Executive Officer
12A Powder Horn Hill
Wilton, Connecticut 06897
Facsimile: 203-762-2054
Email: rmburch@algorx.com
with a copy to:
Heller Ehrman White & McAuliffe LLP
Attn: Bruce W. Jenett
275 Middlefield Road
Menlo Park, CA 94025
Facsimile: 650-324-0638
Email: bjenett@hewm.com
If to the Inventor, to:
-15-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
Marco Pappagallo, M.D.
401 East 34th Street, Apt. N26
New York, New York 10016
Facsimile: 212-518-2701
Email: marco.pappagallo@med.nyu.edu
with a copy to:
Shapiro Sher & Guinot
Attn: William E. Carlson
36 S. Charles Street, Suite 2000
Baltimore, Maryland 21201
Facsimile: 410-539-7611
Email: wec@shapirosher.com
and with a copy to:
Holland & Knight LLP
Attn: Patrea L. Pabst
1201 West Peachtree Street, N.E.
One Atlantic Center, Suite 2000
Atlanta, Georgia 30309
Facsimile: 404-817-473
Email: ppabst@hklaw.com
Each party will notify all other parties hereto of changes of address of
the notifying party in the manner provided for in this Section 10.3.
Notwithstanding anything in the foregoing to the contrary, notices of default,
notices of termination, demands for payment, and demands for defense and/or
indemnification will not be considered to have been delivered hereunder if sent
only by electronic mail.
10.4 Amendments And Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Inventor and AlgoRx.
10.5 Severability. If any provision of this Agreement is held to be
unenforceable under applicable law, such provision will be excluded from this
Agreement to the extent so held unenforceable, and the balance of such
provision, and the balance of this Agreement, will be interpreted as if such
provision or portion thereof were so excluded, and will be enforceable in
accordance with its terms.
10.6 Force Majeure. Neither party will be deemed to be in default of this
Agreement to the extent the performance of such party's obligations or attempts
to cure any breach are delayed or prevented by reason of any act of God, war,
fire, natural disaster, accident, act of government, or any other cause beyond
the reasonable control of such party, if the party affected gives prompt written
notice of any such event to the other party or parties. In the event of a force
majeure event, the time for performance or cure will be extended for the period
equal to the duration of such force majeure event but not in excess of six (6)
months.
10.7 Dispute Resolution; Governing Law. The parties will attempt amicable
resolution among or between themselves of any dispute arising under this
Agreement before any judicial
-16-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
action is taken. The party who wishes to submit a dispute for amicable
resolution will send to the other party to this Agreement a written notice
containing the particulars of such dispute and state in such notice such party's
or parties' request for such amicable resolution. The parties will then have
ninety (90) days after the date of receipt by the recipient of the notice of
such dispute, to negotiate in good faith to attempt to resolve such dispute. If,
after such ninety (90) day period, such dispute is not resolved to the
satisfaction of the parties, acting in good faith, either party may seek
judicial resolution of such dispute. This Agreement will be governed by the laws
of the State of New York, without reference to its conflict of laws provisions.
10.8 Counterparts. This Agreement may be executed in counterparts, each of
which will be an original, but all of which together will constitute one and the
same instrument.
10.9 Entire Agreement; References. This Agreement, including each Exhibit
attached hereto, each of which Exhibits is incorporated herein by reference, is
the entire agreement of the parties with respect to the specific subject matter
hereof, and supercedes in their entirety any previous agreements, discussions or
understandings, whether written or oral, with respect to the specific subject
matter hereof, between or among them. References herein to "Sections" are to
Sections hereof and to "Articles" are to Article hereof, and to "Exhibits" are
to Exhibits attached hereto, each of which Exhibits is incorporated herein by
reference, in each case unless specifically stated otherwise herein.
10.10 Assistance. The parties will provide to each other all commercially
reasonable information and assistance required by the relevant requesting party
or by such party's authorized attorneys, agents or representatives, in
connection with the requesting party's exercise of such party's rights and
discharge of such party's obligations under this Agreement, including the
prosecution and maintenance of the Licensed Patents, the prosecution of third
party infringers of the Licensed Patents and the defense of any actions for
infringement of third party rights which involve Licensed Patents claims.
ALGORX PHARMACEUTICALS, INC. INVENTOR:
/s/ Marco Pappagallo
By: /s/ Gordon Saul ---------------------------
---------------------------------------- MARCO PAPPAGALLO, M.D.
Name: GORDON SAUL Date signed: August__, 2001
--------------------------------------
Title:
--------------------------------------
Date signed: August 28, 2001
-17-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
EXHIBIT A
LICENSE UNDERTAKING
I, JAMES N. CAMPBELL, as the "Undertaking Party," hereby acknowledge, and
agree to, the following, effective as of August 28, 2001 (the "Effective Date of
this Undertaking"):
1. I have read the License Agreement dated August 28, 2001 between AlgoRx
Pharmaceuticals, Inc. ("AlgoRx") and Dr. Marco Pappagallo (the "Agreement"). All
capitalized terms not defined herein have the meaning ascribed to them in the
Agreement.
2. To the extent that I have any ownership rights in the Licensed
Technology, as defined in the Agreement, I hereby grant to AlgoRx the same
license rights granted to AlgoRx by Dr. Pappagallo, as the "Inventor" in the
Agreement, and hereby agree to be bound by the same obligations as the Inventor
under the Agreement, to the extent applicable.
3. If, as a result of any proceedings or action, I am named as an inventor
on a patent or patent application comprised in the Licensed Patents, as defined
in the Agreement, or otherwise included in the Licensed Technology, I hereby
grant AlgoRx, with respect to such patent or patent application, the same
license rights granted to AlgoRx by the Inventor in the Agreement, and agree to
be bound by the same obligations as the Inventor under the Agreement.
4. If, after the Effective Date of this Undertaking, any amounts become
due and payable to Dr. Pappagallo and me as the sole owners of the Licensed
Technology pursuant to Section 2.3 of the Agreement, AlgoRx will pay one-half
(1/2) of such amounts directly to Dr. Pappagallo and the other one-half (1/2) to
me, and such payment to me will discharge AlgoRx of its obligation towards me
with respect to such amounts.
5. Notwithstanding Paragraphs 2 and 3 hereof, the only warranties I make
in connection with this License Undertaking and the license hereby granted are
those warranties contained in Section 6.1 of the Agreement, as if made by, and
with respect to, myself alone.
6. This Agreement will inure to the benefit of and be binding upon the
parties' respective successors and assigns, and upon my and Dr. Pappagallo's
heirs, executors and administrators, may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of all parties hereto, will be governed by the laws of the State of New
York, without reference to its conflict of laws provisions, may be executed in
counterparts, each of which will be an original, but all of which together will
constitute one and the same instrument, and is the entire agreement of the
parties with respect to the specific subject matter hereof, and supercedes in
their entirety any previous agreements, discussions or understandings, whether
written or oral, with respect to the specific subject matter hereof, between or
among them.
-18-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappagallo
ALGORX PHARMACEUTICALS, INC. UNDERTAKING PARTY:
By: /s/ Gordon M. Saul /s/ James N. Campbell
-------------------------------------- ---------------------------------
Name: GORDON M. SAUL (Signature)
Title: Chief Business Officer Printed name: James N. Campbell
Date signed: August 28, 2001 Date signed: August 29, 2001
AGREED AS TO PARAGRAPH 4 OF
THIS UNDERTAKING:
/s/ Marco Pappagallo
- ----------------------------------------
DR. MARCO PAPPAGALLO
Date signed: August____,2001
[SIGNATURE PAGE TO UNDERTAKING - ALGORX CAPSAICIN LICENSE FROM DR.
MARCO PAPPAGALLO]
-19-
AlgoRx Pharmaceuticals, Inc. - Capsaicin License -- Marco Pappayallo
EXHIBIT B
DISCLAIMER
The undersigned RICHARD A. MEYER hereby, effective as of the Effective
Date of, and as defined in, that certain License Agreement dated as of August
28, 2001 by and between Dr. Marco Pappagallo, as licensor thereunder, and AlgoRx
Pharmaceuticals, Inc. ("AlgoRx"), as licensee thereunder, irrevocably and
completely disclaim any and all ownership interest I may have now or in the
future with respect to any rights arising in any way from or under U.S.
Provisional Patent Application No. 60/006,385 and U.S. Utility Patent
Application No. 08/746,207 (U.S. Patent No. 6,248,788) together with all
applications and patents, U.S. and foreign, claiming priority therefrom (the
"Pappagallo Patents"), and confirm that I am not at the date on which I have
signed this Disclaimer, as set forth below, nor at the Effective Date if a
different date, nor was I prior to the Effective Date, a contributor to or an
inventor with respect to, any such Pappagallo Patents.
This Disclaimer is rendered to and for the benefit of, and will inure to the
benefit of, Dr. Marco Pappagallo (and, if he becomes a co-exclusive owner with
Dr. Pappagallo pursuant to the Undertaking given by him in connection with the
License Agreement, Dr. James N. Campbell) and AlgoRx, and their respective
successors and assigns, and Dr. Pappagallo's (and, as relevant, Dr. Campbell's)
heirs, executors and administrators, will be governed by the laws of the State
of New York, without reference to its conflict of laws provisions, and
supercedes in their entirety any previous agreements, discussions or
understandings, whether written or oral, with respect to the specific subject
matter hereof, by me with either of Dr. Pappagallo or AlgoRx.
I have been advised by my own legal counsel as to the nature and
consequences of my signing this Disclaimer.
Date signed: August 30, 2001
/s/ Richard A. Meyer,
---------------------------------
RICHARD A. MEYER, M.S.
-20-