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EXHIBIT 10.10
STRATEGIC ALLIANCE AGREEMENT
THIS AGREEMENT is entered into as of the 17th day of September, 1997
(the "Effective Date"), by and between PENWEST Pharmaceuticals Group ("PPG"), a
division of PENWEST, LTD., a Washington corporation, with its principal place of
business at 2981 Route 22, Patterson, New York 12563, and Endo Pharmaceuticals
Inc., a Delaware corporation with its principal place of business at 223
Wilmington West Chester Pike, Chadds Ford, PA 19317 ("Endo").
A. PPG has developed a controlled-release agent covered by one or more
patents, patent applications, know-how and other proprietary technology, which
agent PPG markets under the name and mark "TIMERx(R)" ("TIMERx").
B. Endo manufactures and markets various pharmaceutical products,
including without limitation the product marketed under the name "Numorphan,"
having as an active drug substance oxymorphone HCL ("Oxymorphone") and has
developed know-how and other proprietary technology with respect thereto. Endo
is interested in developing one or more products incorporating Oxymorphone and
TIMERx to make a solid-dosage controlled-release delivery system for oral
administration in humans in one or more dosage strengths.
C. The parties desire to engage in certain research, development, and
testing activities designed to determine if such drugs can be developed using
TIMERx. If such activities are successful, Endo desires to make and market such
drug(s) as its only line of controlled-release Oxymorphone products. In that
connection, Endo desires to contract for a supply of TIMERx for use in the
manufacture of such controlled-release forms of Oxymorphone, and PPG is willing
to supply the same provided that Endo agrees to obtain all of its and its
Affiliates' and sublicensees' requirements of TIMERx from PPG as provided
herein.
D. The parties desire to build mutual opportunities for the expansion
of the scope of their efforts and agreements to involve other drugs in related
areas and to cooperate in promoting the marketing of such products, worldwide.
NOW, THEREFORE, the parties hereby agree as follows:
I. DEFINITIONS. Certain terms used herein are defined alphabetically in
"Section 1," Sections 1.1 through 1.48, as set forth in the Definitions Exhibit
attached hereto and incorporated herein by this reference. For convenience of
reference,
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italicized type indicates at least one of the uses in the body of the Agreement
of terms defined in the Definitions Exhibit.
II. DEVELOPMENT PERIOD(S).
A. During each Development Period, each of PPG and Endo will exert its
Best Commercial Efforts: (i) to perform the respective Development Tasks
allotted to it; (ii) to do so in accordance with the applicable Development
Budget; and (iii) to assist and to cooperate as requested with the other party's
Best Commercial Efforts to do the same as to its own Development Tasks.
B. Each party will, promptly and throughout each Development Period,
provide to the other party all necessary or useful information in or coming into
its possession or reasonably available to it to support the achievement of the
Development Tasks. Notwithstanding anything else to the contrary contained
herein, nothing shall require either party to disclose confidential information
for which such party has an obligation of confidentiality to a third party, but
each party will exert its Best Commercial Efforts to bring to the attention of
the Alliance Committee any such third party restrictions as may be relevant to
its role hereunder.
C. Each party's Project Contact(s) will provide written reports to the
other party's Project Contact(s) at least quarterly (and more often upon
reasonable request of the other party) throughout each Development Period,
stating in detail all efforts made and in process, and all significant progress
achieved and difficulties encountered in the reporting party's portion of the
development effort since the last such report. Each of the Project Contacts will
also be available throughout each Development Period to answer any reasonable
questions from the other party's Project Contacts, as appropriate.
D. During the Development Period, Endo shall provide Oxymorphone and
related materials reasonably required to support the applicable Development
Tasks, although it is understood that the same may be required to remain at one
or more of Endo's facilities covered by Facilities Certifications. During the
Development Period, PPG shall provide all TIMERx reasonably required for the
applicable Development Tasks, all as shall be more fully described in the
applicable Development Tasks adopted by Committee Action, although it is
understood that the prototypes of the Formulated TIMERx will be developed
internally by PPG's personnel at its own research facilities, and that such
prototypes may then be tested with the Oxymorphone in accordance with the
Development Tasks at one or more of such Endo facilities. The costs of such
materials will be treated as among the parties' respective expenditures pursuant
to the Development Budget, using for this purpose the Formulated TIMERx Price as
to the TIMERx and the Oxymorphone Price as to the Oxymorphone.
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E. Subject to Section 5.3, each party will *********************************
********************************************************, regardless of which
party is allocated one or more of the relevant Development Tasks. Each party
shall submit to the Alliance Committee at least quarterly (or on such other
schedule as may be determined by Committee Action) a written accounting of the
expenditures, costs, and other resources actually devoted by it to the
Development Tasks in accordance with the applicable Development Budget since the
last such accounting. Each of the parties' quarterly accountings will be
reviewed and approved in whole or in part (and/or returned in whole or in part
to a party for correction or adjustment prior to resubmission) by Committee
Action. The Alliance Committee will notify each party on a quarterly basis of
the results of such review by it of the accountings of both parties. Subject to
Section 5.3, to the extent that both parties' accountings for prior
expenditures, costs and other resources for a particular Development Budget have
been so approved, the Alliance Committee will direct by a quarterly invoice
(with copies to both parties), issued against records for such quarter and
payable prior to the 30th day following the date of invoice, that the party
which has, with respect to such Development Budget, devoted thereto less in the
aggregate than the other party to that time (taking into account all prior
reconciliation invoices with respect to such Development Budget under this
section) shall reconcile such disparity by paying to the other party
************************* in such aggregate amounts.
F. The parties hereby agree that the Designated Product(s) described in Exhibit
2.6 shall be the "Initial Designated Product(s)." The initial Development Tasks,
and the initial Development Budget with respect to such Initial Designated
Product(s) shall be laid out in a project plan to be developed *****************
following the Effective Date by the parties' Project Contacts, subject to
approval by Committee Action. During such ****** period, the parties will
conduct the Proof of Principle Studies, and during the *************** of such
period, Endo shall conduct the Patent Review (and PPG shall cooperate reasonably
therewith). Other than the costs of the Proof of Principle Studies or the Patent
Review, and the incidental costs of the Project Contacts associated with the
development of such a project plan, neither party will devote substantial
resources or make substantial expenditures in connection with the Initial
Development Period prior to the approval of such project plan by Committee
Action. The parties understand that such project plan will be preliminary and
will require revisions, clarifications and supplementation by Committee Action
in light of the interim results achieved or difficulties encountered during the
Initial Development Period.
G. Except for the Initial Designated Products described in Section 2.6, neither
party will be obligated to designate any drug product or potential drug product
as a Designated Product under this Agreement. However, during the term of this
Agreement, neither party shall, and hereby represents and warrants that none of
its Affiliates shall, develop, attempt to develop, or actively investigate any
version, materials, or system for any controlled-release or time-release oral
tablet or capsule
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product containing any Oxymorphone as its only active ingredient, or as one
active ingredient together with ASA or APAP (or agree or seek to agree with
others to do so or any part thereof), *****************************************:
(i) such activities are with respect to a Certification Period (and subsequent
Marketing Period(s)) as to which **************************************** or as
to which it ******************************, as permitted hereunder, or (ii) the
relevant product has been demonstrated ****************************************
************* as a Designated Product, as shown by a *********************
Development Period therefor pursuant to Section 5.2, or (iii) all of the
conditions in Sections 2.7.1 and 2.7.2 have been satisfied. In addition, neither
party shall, and hereby represents and warrants that none of its Affiliates
shall, during the ************************ term of this Agreement, in a
co-development project or marketing arrangement with a non-Affiliate third party
(i.e. this clause will not apply to internal projects of either party), develop,
attempt to develop, or actively investigate any version, materials, or system
for any controlled-release or time-release oral tablet or capsule product for
either (a) any controlled multisource opiate analgesic product (e.g., morphine,
oxycodone, hydromorphone) not covered by the preceding sentence, or (b) any
other tablet or capsule product containing a new chemical entity with opiate
analgesic activity (provided, however, that this clause (b) will not apply to
restrict PPG as to any such products as to which Endo has no actual or potential
competitive product then at a substantially equivalent or later stage of
development) ****************************************: (i) such activities are
with respect to a Certification Period (and subsequent Marketing Period(s)) as
to which *********** ************************************ or as to which it
*****************************, as permitted hereunder, or (ii) the relevant
product has been demonstrated ************* ******************** as a Designated
Product, as shown by a *********************** Development Period therefor
pursuant to Section 5.2, or (iii) the other party has informed the party that
would otherwise be restricted by this section that such other party has
*******************************************************************************
********* (it being understood that such other party shall inform the party that
would otherwise be restricted by this section, and which has a bona fide intent
to commence such a project with a non-Affiliate third party, whether or not such
other party has such ******************** whenever it is requested in writing to
do as to a particular ADS), or (iv) all of the conditions in Sections 2.7.1 and
2.7.2 have been satisfied. Such conditions are:
1. The party desiring to conduct a project or to enter a third-party
agreement covered hereby has first notified the other party hereto of
its desire to do so; and
2. such notifying party has exerted its *****************************,
through good faith negotiations over a period of at least ********, to
reach agreement with the other party hereto to add such product or
investigation to the coverage of this Agreement, unless such other
party waives this Section 2.7.2 in writing or fails to negotiate in
good faith.
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III. CERTIFICATION PERIOD(S).
A. During each Certification Period, each of PPG and Endo will exert its
****** ********************: (i) to perform the respective Certification Tasks
allotted to it; (ii) to do so in accordance with the applicable Certification
Budget; and (iii) to assist and to cooperate as requested with the other party's
*************************** to do the same as to its own Certification Tasks.
B. Each party will, promptly and throughout each Certification Period,
provide to the other party all necessary or useful information in or coming into
its possession or reasonably available to it to support the achievement of the
Certification Tasks. Notwithstanding anything else to the contrary contained
herein, nothing shall require either party to disclose confidential information
for which such party has an obligation of confidentiality to a third party, but
each party will exert its ************* *********** to bring to the attention of
the Alliance Committee any such third party restrictions as may be relevant to
its role hereunder.
C. Each party's Project Contact(s) will provide written reports to the
other party's Project Contact(s) at least quarterly (and more often upon
reasonable request of the other party) throughout each Certification Period,
stating in detail all efforts made and in process, and all significant progress
achieved and difficulties encountered in the reporting party's portion of the
certification effort since the last such report. Each of the Project Contacts
will also be available throughout each Certification Period to answer any
reasonable questions from the other party's Project Contacts, as appropriate.
D. During each Certification Period in which it is participating, Endo
shall provide Oxymorphone and related materials reasonably required to support
the applicable Certification Tasks, and PPG shall provide all Formulated TIMERx
reasonably required therefor, all as shall be more fully described in the
applicable Certification Tasks adopted by Committee Action. The costs of such
materials will be treated as among the parties' respective expenditures pursuant
to the Certification Budget, using for this purpose the Formulated TIMERx Price
as to the TIMERx and the Oxymorphone Price as to the Oxymorphone. Where, as
permitted hereunder, a party is not participating in a Certification Period, it
will sell such materials to the participating party pursuant to Section 6.9.5 or
Section 7, as applicable, and the price paid therefor shall be treated as part
of the buyer's expenditures pursuant to the Certification Budget.
E. The parties hereby agree that, unless the Initial Development Period is
terminated pursuant to Section 5.2 or Section 5.3, a separate Certification
Period will be established directed toward the filing of one or more NDAs with
the FDA for the Initial Designated Product(s), and securing an Approval with
respect thereto in the United States (the "Initial US Certification Period").
Each party will ***************
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*********************************************** for the Initial US Certification
Period regardless of which party is allocated one or more of the relevant
Certification Tasks, subject to Section 5.5. In no event shall the aggregate of
both parties' expenditures, costs, and other resources to be devoted to the
Certification Tasks pursuant to the Certification Budget during the Initial US
Certification Period, when added to the aggregate of both parties' expenditures,
costs, and other resources devoted to the Initial Development Budget, exceed
*************************************, unless both parties have consented
thereto in writing. If the Certification Tasks for the Initial US Certification
Period have not been completed when such ********* level of aggregate
expenditures, costs and other resources has been reached, and one party but not
the other desires to spend further sums or to devote further resources to
complete such Certification Tasks, then the following shall apply:
1. The party that does not participate further in the Initial US
Certification Period once such point is reached shall not be required
to contribute to the reconciliations for the costs of such
Certification Period under Section 3.7. Rather, a Certification Excess
shall be established with respect to the Initial Designated Product in
the US, which shall equal the sums such party would have paid under
Section 3.7, had it fully participated in such Certification Period,
but did not pay due to its election under this section.
2. If Endo is the party electing not to participate further in the Initial
US Certification Period, this shall have the results stated in Section
6.9 as to the Initial Designated Product in the United States, except
that:
a. the relevant Exclusivity Period for the applicable license to
PPG in the US will be coterminous with the License Term, and
Section 6.9.3 will accordingly not be applicable; and
b. the applicable license to PPG will be royalty-bearing without
the relevant Net Realization being reduced as specified in
clause (ii) of Section 6.9.4.
3. If PPG is the party electing not to participate further in the Initial
US Certification Period, this shall be treated, for all purposes of the
licenses and the parties' rights hereunder, as if PPG had continued to
participate in the Initial US Certification Period, except that the
Certification Excess described in Section 3.5.1 shall have the results
stated in Section 4.5.
F. Certification Periods other than the Initial US Certification Period as
described in Section 3.5 may be instituted from time to time by Committee
Action, and shall be so instituted if: (i) an Eligible Party so requests as to
certain Specified Nation(s) and (ii) Committee Action determines that there is a
reasonable likelihood that Approval(s) for such Designated Product will be
obtained in such Specified Nation(s).
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1. If both parties, as Eligible Parties, elect to participate fully in
such Certification Period, each party will share equally the total
costs of the entire Certification Budget, regardless of which party is
allocated one or more of the relevant Certification Tasks, unless both
parties have consented in writing to an alternative arrangement.
2. If an Eligible Party not requesting such Certification Period elects
not to participate fully therein, it shall do so by written notice to
the other party given within 90 days of the request by the requesting
party for such Certification Period (whether or not such Certification
Period has been instituted by Committee Action prior to such election).
3. A party that does not fully participate in a Certification Period
(whether due to its election or because it is not an Eligible Party as
to that Certification Period) shall not be required to contribute to
the reconciliations for the costs of such Certification Period under
Section 3.7. Rather, a Certification Excess shall be established with
respect to the relevant Designated Product(s) in the relevant Specified
Nation(s), which shall equal the sums such party would have borne or
paid under Sections 3.6.1 and 3.7, had it participated in such
Certification Period, but did not pay due to its election or such
ineligibility under this section.
4. If Endo is the party electing not to participate, or is so ineligible,
this shall have the results stated in Section 6.9.
5. If PPG is the party electing not to participate, or is so ineligible,
this shall have the results stated in Section 6.8.
G. Except as otherwise provided in Section 3.6 or Section 5.5, each party
shall submit to the Alliance Committee at least quarterly (or on such other
schedule as may be determined by Committee Action) a written accounting of the
expenditures, costs, and other resources actually devoted by it to the
Certification Tasks in accordance with the applicable Certification Budget since
the last such accounting. Each of the parties' quarterly accountings will be
reviewed and approved in whole or in part (and/or returned in whole or in part
to a party for correction or adjustment prior to resubmission) by Committee
Action. The Alliance Committee will notify each party on a quarterly basis of
the results of such review by it of the accountings of both parties. Except as
otherwise provided in Section 3.6 or Section 5.5, to the extent that both
parties' accountings for prior expenditures, costs and other resources for a
particular Certification Budget have been so approved, the Alliance Committee
will direct by a quarterly invoice (with copies to both parties), issued against
records for each such quarter and payable prior to the 30th day following the
date of invoice, that the party which has, with respect to such Certification
Budget, devoted thereto less in the aggregate than the other party to that time
(taking into account all
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prior reconciliation invoices with respect to such Certification Budget under
this section) shall reconcile such disparity by paying to the other party
******** of the difference in such aggregate amounts.
IV. MARKETING PERIOD(S).
A. Endo hereby agrees, during the Marketing Period for each and every
Designated Product as to which it participated throughout the Development Period
and the relevant Certification Period as to the United States, to use its
****************************** to manufacture, market, promote and sell the
Designated Product throughout the United States, once Approval has been obtained
therefor in the United States, commencing with any normal and appropriate
pre-Approval preparations and a full product launch as soon as practical
following the applicable Approval, and to do so in accordance with the
applicable Manufacturing and Marketing Plan(s).
B. PPG hereby agrees, during the Marketing Period for each and every
Designated Product as to which it participated throughout the Development Period
and the relevant Certification Period as to the United States, but as to which
Endo did not fully participate (including without limitation an election by Endo
not to continue to participate in the Initial US Certification Period after the
********** level of aggregate expenditures, costs and other resources referred
to in Section 3.5.2 has been reached), and as to which Section 6.9 applies
(entirely or to the extent provided in Section 3.5.2, where that section is
applicable), to use its ******************** to manufacture, market, promote and
sell the Designated Product throughout the United States or to arrange therefor
with appropriate third parties, once Approval has been obtained therefor in the
United States, commencing with any normal and appropriate pre-Approval
preparations and a full product launch as soon as practical following the
applicable Approval, and to do so in accordance with the applicable
Manufacturing and Marketing Plan(s). When considering the establishment of any
relationships whereby PPG would contract for a third party to manufacture the
Designated Product covered by this section, PPG will give some preference for
manufacturing to be conducted by Endo, where Endo has a demonstrated ability to
manufacture such Designated Product.
C. Each of the parties shall, during the Marketing Period for each and
every Designated Product as to which it participated throughout the Development
Period and the relevant Certification Period as to Specified Nation(s) other
than the United States (whether or not the other party also so participated), to
use its Best Commercial Efforts either (i) to present to the Alliance Committee
a plan (in the form of a Manufacturing and Marketing Plan) for such party's
manufacturing, marketing, promoting and selling the Designated Product
throughout such Specified Nation(s) and/or other nations to be proposed as
Specified Nation(s) under a Manufacturing and Marketing Plan (other than the
United States) or (ii) to present to the Alliance Committee an arrangement
whereby a third party or third parties will do some or all
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of the tasks described under clause (i). The Alliance Committee will determine,
by Committee Action, which of the approaches (i.e., clause (i) and/or clause
(ii), and as to one or both of the parties' approaches so presented) will be
most likely to maximize the early market entry and ultimate market success of
the applicable Designated Product in the applicable Specified Nation(s), or any
of them, it being understood, however, that the Alliance Committee will give
preference, other factors being essentially equal, for marketing, promotion and
selling to be conducted by a party hereto or an Affiliate of a party hereto, if
any such approach is presented in a timely manner by such party. If and to the
extent that PPG is determined by Committee Action to be the party whose approach
to clauses (i) and (ii) above will be pursued, this will (unless otherwise
specified by such Committee Action) have the results stated in Section 6.9 as to
the relevant Specified Nation(s), except that (unless Section 6.9 is fully
applicable due to any of the reasons stated therein, other than as provided in
this Section 4.3):
1. the relevant Exclusivity Period for the applicable license to PPG in
the Specified Nation(s) will be as provided in Section 1.24 (mutatis
mutandis for application to patents on Endo Technology existing as of
the Effective Date or on Joint Technology and to Endo's Confidential
Technology provided to PPG), and Section 6.9.3 will accordingly not be
applicable; and
2. the applicable license to PPG will be royalty-bearing without the
relevant Net Realization being reduced as specified in clause (ii) of
Section 6.9.4.
D. Supply of Formulated TIMERx by PPG (or otherwise as provided in
Section 7.4) in accordance with the Specifications is desired by both parties
for the technically satisfactory production, regulatory approval, and
exploitation of the Designated Product(s). In accordance with Section 7 (and
except as provided in Section 7.4), PPG will supply Endo and its Affiliates and
sublicensees with sufficient quantities of Formulated TIMERx produced in
accordance with the Specifications in compliance with GMP and all applicable
laws and regulations, to meet their requirements for the manufacturing of the
Designated Product(s) during the Marketing Period, and Endo shall purchase all
of its and its Affiliates' and sublicensees' requirements thereof from PPG
during such period. The price for all Formulated TIMERx sold hereunder shall
equal the applicable Formulated TIMERx Price, and shall be payable by Endo to
PPG within forty-five (45) days after the shipping of the Formulated TIMERx to
Endo. As provided in Exhibit 1.35, the price of the Formulated TIMERx used in
the Designated Product will be one of the deductions applied in the calculation
of the Net Realization.
E. Endo hereby agrees to pay to PPG Royalties equal to the Applicable
Percentage of the relevant Net Realization from any and all Designated Products;
provided, however, that, if a Development Excess exists pursuant to Section
5.3.3 (where PPG is the terminating party) or a Certification Excess exists
pursuant to Sections 3.5.1, 3.6.3, or 5.5.3 (where PPG is the non-participating
or terminating party), Endo shall pay
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PPG ************************ the Applicable Percentage of the relevant Net
Realization from the relevant Designated Product(s) from the relevant Specified
Nation(s), until Endo has thereby ********************************************
**********************. (That is, for example, if the total resources devoted by
both Endo and PPG to the relevant Development Period and Certification Period,
as approved pursuant to Section 2.5 and/or Section 3.7, is ************* in this
example, and Endo bore **************** and PPG bore ****** of that total prior
to PPG's making its election under Section 5.3 or Section 5.5.3, and if the
Applicable Percentage is ****, then Endo would pay PPG ********************** of
the Net Realization from the relevant Designated Product(s) from the relevant
Specified Nation(s) until Endo has thereby recouped the ***********************
*********************************************************, which would occur in
this example when the total of such Net Realization reaches **************.
Where a Development Period is relevant to more than one Certification Period,
the total resources so devoted to that Development Period will, for the purposes
of this section, be apportioned to the various relevant Certification Periods
pro rata by the respective total resources devoted to those Certification
Periods.)
F. Endo has agreed to make the payments specified in Section 4.5 in recognition
of PPG's anticipated contributions of know-how, resources, and money during the
Development Period(s) and the Certification Period(s), and irrespective of
whether any patents cover such Designated Products; provided, however, that if
there are any Net Realizations from Designated Products sold in the United
States to which no license to U.S. PPG Patents or to U.S. Joint Technology
Patents (including patent applications, as if patents had issued thereon) is
applicable to the making, using, sale, offer for sale, or import thereof, such
Net Realizations shall be ****************************************************
******************************************** Royalties hereunder.
G. All Royalties and other amounts payable pursuant to this Agreement shall be
due quarterly within 60 days following the end of each calendar quarter for Net
Realization in such calendar quarter. Each such payment shall be accompanied by
a statement of Net Realization for the quarter and the calculation of the
Royalties payable hereunder. All Royalties and all other amounts payable under
this Agreement will bear interest at the rate of 1 1/2% per month or the maximum
legal rate, whichever is less, from the date due through the date of payment.
Endo shall keep and shall cause its Affiliates and its and their sublicensees to
keep complete, true and accurate records for the purpose of showing the
derivation of all Royalties payable to PPG under this Agreement. PPG or its
representatives shall have the right to inspect, copy, and audit such records at
any time during reasonable business hours upon notice to Endo or any of its
Affiliates or sublicensees, respectively. Information gathered during such an
audit shall be held in confidence by PPG and its Affiliates, except to the
extent any of the exceptions stated in Sections 10.1.1 through 10.1.7 apply
thereto, and PPG's auditors will be required to execute an agreement consistent
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with this obligation and otherwise reasonably acceptable to Endo. Any such audit
shall be at the expense of PPG, unless the audit reveals that, with respect to
the period under audit, less than 90% (for the first such audit conducted with
respect to a particular Designated Product) or 97% (for any subsequent audits
with respect to such Designated Product) of the Royalties due to PPG hereunder
have been paid, in which event Endo shall pay or reimburse PPG for the
reasonable expenses of such audit, in addition to PPG's other remedies for such
underpayment.
H. All monies due hereunder shall be paid in United States Dollars to PPG
in Patterson, New York, USA. The rate of exchange to be used shall be the
average commercial rate of exchange for the 30 days preceding the date of
payment for the conversion of local currency to United States Dollars as
published by The Wall Street Journal (or if it ceases to be published, a
comparable publication to be agreed upon by the parties) or, for those countries
for which such average exchange rate is not published by The Wall Street
Journal, the exchange rate fixed on the fifth day prior to the date of payment
as promulgated by the appropriate United States governmental agency as mutually
agreed upon by the parties.
V. TERM AND TERMINATION.
A. The term of this Agreement shall begin on the Effective Date and shall,
unless earlier terminated as provided herein, continue until the last to occur
of: (i) the fifth anniversary of the later of the Effective Date or the most
recent agreement of the parties to start a Development Period hereunder; or (ii)
the end of the last License Term to expire or be terminated, if any such License
Term(s) are in effect on any date determined under clause (i) or clause (iii)
below; or (iii) the end of the term of any license under Section 6.9, if any
such license(s) are in effect on any date determined under clause (i) or (ii).
B. A Development Period for a Designated Product may be terminated before
completion thereof, if it is determined by Committee Action that due to
unfavorable or inconclusive results to that time, no further efforts are likely
to lead to the successful development of the Designated Product. The Initial
Development Period will terminate pursuant to this section if Committee Action
determines that, due solely to technical reasons of the pharmaceutical sciences
growing from results obtained in the course of the Proof of Principle Studies,
that it will not be practicable to develop any Initial Designated Product. The
Initial Development Period will also terminate if the Patent Review results in a
determination by Endo, concurred in by Committee Action, that the PPG Patents
are not as contemplated hereunder. If the Initial Development Period is
terminated pursuant to this section, this Agreement shall thereupon terminate,
and, subject to Section 5.11, neither party will have any further liabilities or
obligations to the other hereunder. Similarly, Committee Action may determine
that no Certification Period should be undertaken with respect to a
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Designated Product in one or more nation(s), but such a determination will not
by itself terminate this Agreement.
C. Either party may at its option terminate its participation in a
Development Period (including without limitation the Initial Development Period)
at its election and upon at least 30 days' prior written notice to the other
party (subject, however, to a continuing duty to contribute as provided herein
to the costs of tasks previously committed prior to such notice), if it
determines that no further efforts are likely to lead to the successful
development of any of the relevant Designated Products.
1. If the terminating party is Endo, this shall have the results stated in
Section 6.9.
2. If the terminating party is PPG, this shall have the results stated in
Section 6.8.
3. The terminating party shall not be required to contribute further to
the annual reconciliations for the costs of such Development Period
under Section 2.5, other than to the extent that a disparity of the
sort described in Section 2.5 has theretofore accrued that would call
for a reconciliation payment by such terminating party to the other
party, in which event such reconciliation payment shall be accounted
for and made by such terminating party within sixty (60) days of the
termination of its participation under this section, or with the next
scheduled annual reconciliation payment under Section 2.5 (whichever is
sooner). Rather, a Development Excess shall be established with respect
to the relevant Designated Product(s), which shall equal the sums such
party would have paid under Section 2.5, had it participated fully in
such Development Period, but did not pay due to its election under this
section.
D. A Certification Period for a Designated Product may be terminated
before completion thereof, if it is determined by Committee Action that due to
unfavorable or inconclusive results to that time, no further efforts are likely
to lead to the applicable Approval for the Designated Product.
E. Either party may at its option terminate its participation in any
Certification Period (including without limitation the Initial US Certification
Period) at its election and upon at least 30 days' prior written notice to the
other party (subject, however, to a continuing duty to contribute as provided
herein in the costs of tasks previously committed prior to such notice), if it
determines that no further efforts are likely to lead to the applicable Approval
for any of the relevant Designated Products.
1. If the terminating party is Endo, this shall have the results stated in
Section 6.9.
2. If the terminating party is PPG, this shall have the results stated in
Section 6.8.
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ASTERISKS DENOTE SUCH OMISSIONS.
3. The terminating party shall not be required to contribute further to
the annual reconciliations for the costs of such Certification Period
under Section 3.7, other than to the extent that a disparity of the
sort described in Section 3.7 has theretofore accrued that would call
for a reconciliation payment by such terminating party to the other
party, in which event such reconciliation payment shall be accounted
for and made by such terminating party within sixty (60) days of the
termination of its participation under this section, or with the next
scheduled annual reconciliation payment under Section 3.7 (whichever is
sooner). Rather, a Certification Excess shall be established with
respect to the relevant Designated Product(s), which shall equal the
sums such party would have paid under Section 3.7, had it participated
fully in such Certification Period, but did not pay due to its election
under this section.
F. PPG may at its option terminate the Exclusivity Period for a particular
Designated Product in one or more Specified Nation(s) if Endo fails to ********
******************* in such Specified Nation(s) under the then-current
Manufacturing and Marketing Plan(s) for such Designated Product during ********
***************************************
G. If Endo fails to launch full-scale marketing of a Designated Product in
any Specified Nations within the time frames specified in the then-current
Manufacturing and Marketing Plan(s) therefor, or announces its intention to
discontinue active marketing of such Designated Product in such nation(s), PPG
may at its option elect to terminate the License Term for such Designated
Product in such nation(s) upon the delivery of written notice to Endo. Any such
termination of such License Term will have the effect of removing the affected
Specified Nation(s) from the Territory for such Designated Product and shall
have the results stated in Section 6.9.
H. In the event that either party materially breaches any of the terms,
conditions or agreements contained in this Agreement to be kept, observed or
performed by it, then the other party may terminate this Agreement, at its
option and without prejudice to any of its other legal or equitable rights or
remedies, by giving the party who committed the breach (i) in the case of breach
of obligations other than the payment of money, 90 days' notice in writing,
unless the notified party within such 90-day period shall have cured the breach,
and (ii) in the case of breach of an obligation for the payment of money, 30
days' notice in writing, unless the notified party within such 30-day period
shall have cured the breach, including any required payment of interest on
previously unpaid amounts as set forth herein.
1. If the defaulting party is Endo, a termination under this section
shall have the results stated in Section 6.9.
2. If the defaulting party is PPG, a termination under this section shall
have the results stated in Section 6.8.
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I. This Agreement will automatically terminate if Endo files for
protection under federal or state bankruptcy laws, becomes insolvent, makes an
assignment for the benefit of creditors, appoints or suffers appointment of a
receiver or trustee over its property, files a petition under any bankruptcy or
insolvency act or has such petition filed against it. A termination under this
section shall have the results stated in Section 6.9.
J. This Agreement will automatically terminate if PPG files for protection
under federal or state bankruptcy laws, becomes insolvent, makes an assignment
for the benefit of creditors, appoints or suffers appointment of a receiver or
trustee over its property, files a petition under any bankruptcy or insolvency
act or has such petition filed against it. A termination under this section
shall have the results stated in Section 6.8.
K. Endo's obligations regarding payment of Royalties accrued as of the
date of termination, PPG's rights under Sections 6.10 and 6.11 (except if this
Agreement is terminated due to an uncured breach on the part of PPG), and Endo's
rights under Section 6.12 (except if this Agreement is terminated due to an
uncured breach on the part of Endo), and the provisions of Sections 5, 6.6, 6.8
- - 6.13, 9, 10, 12, 13, and 14, hereof shall survive any expiration or
termination of this Agreement.
VI. OWNERSHIP AND LICENSES.
A. Except as otherwise explicitly licensed or transferred as provided
herein, each party will, as between it and the other party hereto, retain
ownership of any and all inventions, copyrights, trade secrets, patent rights
and other technology and rights to the extent made solely by its personnel,
Affiliates, or contractors (other than the other party hereto), and the parties
will jointly own any and all Joint Technology. Inventorship for these purposes
will be determined under the prevailing U.S. rules and interpretations. Unless
otherwise approved by Committee Action, the party primarily responsible for the
filing of a PLA, including without limitation NDAs in the U.S., shall own such
PLAs. Neither party makes any grant of rights by implication.
B. Except as otherwise provided herein, each party shall be responsible,
as it shall determine, for the filing and prosecution of any and all patent
applications with respect, in whole or in part, to its own intellectual property
and for the maintenance of any available patent protection with respect thereto,
and the Alliance Committee will determine which of PPG or Endo, or both, will be
responsible for the filing and prosecution of any and all patent applications
with respect to the Joint Technology, with due regard to reasonable concerns, if
any, expressed by either party as to the impact such a filing and prosecution
may have on its other rights and technologies; provided however, that neither
party commits that any such patent protection will be available or continuous
hereunder.
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C.
1. PPG hereby grants to Endo a license under the Joint Technology, the PPG
Patents, and PPG's Confidential Technology disclosed to Endo hereunder
to make, have made, use, sell, offer for sale, and import the
Designated Product(s) in the Territory during the License Term
applicable to such Designated Product. Such license shall be exclusive
as to the applicable nation(s) during the Exclusivity Period applicable
thereto for such Designated Product, and shall otherwise be
nonexclusive. Such license does not extend to the making of TIMERx or
Formulated TIMERx, but does cover the incorporation of the same into
the Designated Product(s). Endo shall have no right to grant
sublicenses hereunder without the prior written consent of PPG, which
consent shall not be unreasonably withheld. PPG will, throughout the
License Term, promptly notify Endo of all PPG Patents referred to in
Section 1.38.3 and provide Endo with access to all of the same, solely
for use within the scope of the license stated in this section.
2. Endo hereby grants to PPG a license, with right to sublicense, under
any and all Endo Technology and Joint Technology to make, have made,
use, sell, offer for sale, and import the Designated Product(s) in the
Territory; provided, however, that during the term and within the scope
of the Exclusivity Period(s) for the license granted by PPG to Endo
under Section 6.3.1, such license under Section 6.3.1 will take
precedence over the license under this Section 6.3.2, and the rights
under this section will be exercised by Endo. The license under this
Section 6.3.2 shall be exclusive to PPG for an "Exclusivity Period" (as
defined in Section 1.24, mutatis mutandis for application to patents on
Endo Technology and Joint Technology and to Endo's Confidential
Technology provided to PPG); provided, however, that if and to the
extent that the license granted to Endo under Section 6.3.1 continues
after the end of an applicable Exclusivity Period thereunder (whether
pursuant to Section 5.6, 1.24, or otherwise), this license to PPG under
this Section 6.3.2 shall be nonexclusive.
D. Endo acknowledges that PPG, for itself and for others, applies, and
will seek to apply, TIMERx to other products. Other than Section 2.7, no
provision hereof, and no exclusivity hereunder, shall prevent PPG from so
applying TIMERx or Formulated TIMERx, so long as the end product is not a
Designated Product for manufacture or sale in the Territory during the
Exclusivity Period applicable thereto.
E. [intentionally omitted]
F. In recognition of the parties' cooperative efforts with respect to the
Joint Technology, but without the express or implied grant of any license to any
underlying or enabling rights or technology (except as otherwise provided
herein), it
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ASTERISKS DENOTE SUCH OMISSIONS.
is agreed that each party and its Affiliates shall have the nonexclusive,
worldwide right and license, with right to sublicense, under the Joint
Technology, to make, have made, use, sell, offer for sale, and import any
products or services (other than a Designated Product by PPG or its Affiliates
in the relevant Specified Nation(s) during an applicable Exclusivity Period
under the license in Section 6.3.1, or by Endo or its Affiliates in the relevant
Specified Nation(s) during an applicable Exclusivity Period described in Section
6.9.3). Such license will be royalty-free except as is otherwise provided
herein. Each party will promptly notify the other of all Joint Technology and
provide such other party with access to all of the same.
G. Subject to and conditional upon the failure or continuing unwillingness
of PPG to meet Endo's and its Affiliates' and sublicensees' requirements as
provided in Section 7.4, PPG grants to Endo a nonexclusive license under the
TIMERx Production Technology to make and have made Formulated TIMERx in the
Territory solely for use in the Designated Product(s) for sale in the Territory
during the License Term. Endo shall have no right to grant sublicenses of its
rights hereunder (whether to Affiliate(s) or otherwise) without the prior
written consent of PPG, which consent shall not be unreasonably withheld.
H. Subject to and conditional upon PPG's termination of its participation
in a Development Period pursuant to Section 5.3 or in a Certification Period
pursuant to Section 5.5, or PPG's election not to participate in a Certification
Period (or its ineligibility to do so) as provided in Section 3.6, or the
termination of this Agreement pursuant to Section 5.8 due to an uncured breach
by PPG, or a termination pursuant to Section 5.10, PPG's license to Endo under
Section 6.3.1 and its conditional license under Section 6.7, shall continue with
respect to the relevant Specified Nation(s) and the relevant Designated
Product(s) or successors thereto containing Oxymorphone and designed as tablets
or capsules for substantially the same functions and indications (as may be
determined by Committee Action), but with the following changes and adjustments
as to such license with respect to such Designated Product(s) or successors in
the relevant Specified Nation(s):
1. Endo's license to PPG under Section 6.3.2 shall terminate upon the
effectiveness of this Section 6.8 with respect to the relevant
Designated Product in the relevant Specified Nation(s).
2. The Exclusivity Period for the license under Section 6.3.1, to the
extent applicable to the relevant Designated Product(s) in the relevant
Specified Nation(s), shall, unless earlier ended pursuant to Section
1.24.1, last until the longer of ************** commencing with the
effective date of the applicable termination (or from the start of a
Certification Period covered by Section 3.6.5) or until there are no
more Joint Technology Patents (if any) applicable to such Designated
Product in the relevant Specified Nation(s) (or, as to pending
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ASTERISKS DENOTE SUCH OMISSIONS.
patent applications, that would be so applicable, if they were then
issued as patents), and shall thereafter be nonexclusive in such
Specified Nation(s).
3. The license under Section 6.3.1, to the extent applicable to the
relevant Designated Product(s) in the relevant Specified Nation(s),
will be royalty-bearing and Sections 4.5, 4.7 and 4.8 shall apply
thereto; provided, however, that the relevant Net Realization (without
regard to Section 4.6, which it is agreed shall not be applicable)
shall be ************* prior to the calculation of the proportion
thereof to be paid to PPG as Royalties hereunder.
4. The parties' agreements under Section 4.4 and Section 7 will continue
to apply to Endo's and its Affiliates' and sublicensees' requirements
of Formulated TIMERx for use in the Designated Product(s) produced
pursuant to this section for sale in the relevant Specified Nation(s),
throughout the life of the license under Section 6.3.1, to the extent
applicable to the relevant Designated Product(s) in the relevant
Specified Nation(s).
5. As used herein, the "relevant Specified Nation(s)" shall be the entire
Territory as to a termination of PPG's participation in a Development
Period, and shall be the Specified Nation(s) for the applicable
Certification Period as to a termination of PPG's participation in a
Certification Period or its election not to participate therein (or its
ineligibility to do so).
6. The license under Section 6.3.1, to the extent applicable to the
relevant Designated Product(s) in the relevant Specified Nation(s),
will apply only to the PPG Patents, the Joint Technology, the TIMERx
Production Technology, and PPG's Confidential Technology made or
discovered prior to expiration of ************** after the
effectiveness of the applicable termination (or prior to the start of a
Certification Period covered by Section 3.6.5), together with any and
all intellectual property and other rights thereto and therein in the
relevant Specified Nation(s), inclusive of later-issued patents to the
extent disclosing the same. Notwithstanding Sections 1.38.2 or 1.38.3,
any such technology made or discovered more than *****************
following such termination shall not be licensed to Endo for
exploitation with respect to the applicable Designated Product(s) in
the relevant Specified Nation(s). PPG will, throughout the term of the
license under Section 6.3.1, to the extent applicable to the relevant
Designated Product(s) in the relevant Specified Nation(s), promptly
notify Endo of all the licensed PPG technology and provide Endo with
access to all of the same, solely for use within the scope of the
license under Section 6.3.1, to the extent applicable to the relevant
Designated Product(s) in the relevant Specified Nation(s).
7. The requirement that Endo obtain PPG's consent to sublicenses under
Section 6.3.1 shall not apply to the extent that such sublicenses
relate only to the
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ASTERISKS DENOTE SUCH OMISSIONS.
relevant Designated Product in the relevant Specified Nation(s) covered
by this section.
I. Subject to and conditional upon Endo's termination of its participation
in a Development Period pursuant to Section 5.3 or in a Certification Period
pursuant to Section 5.5, or Endo's election not to participate in a
Certification Period (or its ineligibility to do so) as provided in Section 3.5
(to the extent specified in Section 3.5.2) or Section 3.6, or the termination of
an Exclusivity Period pursuant to Section 5.6 or of a License Term pursuant to
Section 5.7, or (to the extent specified in Section 4.3) the acceptance by
Committee Action under Section 4.3 of PPG or its designated third party to
pursue the activities described in that section in a Specified Nation(s), or the
termination of this Agreement pursuant to Section 5.8 due to an uncured breach
by Endo, or a termination pursuant to Section 5.9, Endo's license to PPG under
Section 6.3.2 shall continue with respect to the relevant Specified Nation(s)
and the relevant Designated Product(s) or successors thereto designed as tablets
or capsules for substantially the same functions and indications (as may be
determined by Committee Action), but with the following changes and adjustments
as to such license with respect to Designated Product(s) or successors in the
relevant Specified Nation(s):
1. Except where the applicable termination is only of an Exclusivity
Period under Section 5.6, the License Term with respect to the relevant
Designated Product(s) in the relevant Specified Nation(s) affected by
such termination shall, for purposes of the licenses granted by PPG
under Sections 6.3.1 and 6.7, terminate upon the applicable
termination.
2. The term of the license under Section 6.3.2, to the extent applicable
to the relevant Designated Product(s) in the relevant Specified
Nation(s), shall last for the duration of a "Marketing Period" as
specified in Section 1.33.1, mutatis mutandis for application to
patents on Endo Technology or Joint Technology.
3. Except where the applicable termination is only of an Exclusivity
Period under Section 5.6, the license under Section 6.3.2, to the
extent applicable to the relevant Designated Product(s) in the relevant
Specified Nation(s), shall be exclusive within its scope to PPG for an
"Exclusivity Period" (as defined in Section 1.24, mutatis mutandis for
application to patents on Endo Technology existing as of the Effective
Date and to Endo's Confidential Technology provided to PPG) lasting,
unless earlier terminated pursuant to Section 1.24.1 as made applicable
by this section, until the longer of ********************* commencing
with the effective date of the applicable termination (or from the
start of a Certification Period covered by Section 3.6.4) or until
there are no more Joint Technology Patents (if any) applicable to such
Designated Product in the relevant Specified Nation(s) (or, as to
pending patent applications, that
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would be so applicable, if they were then issued as patents), and shall
thereafter be nonexclusive in such Specified Nation(s).
4. The license under Section 6.3.2, to the extent applicable to the
relevant Designated Product(s) in the relevant Specified Nation(s),
will be royalty- bearing and Sections 4.5, 4.7 and 4.8 shall apply
thereto, mutatis mutandis, as follows: (i) subject to clause (ii)
below, PPG shall pay Royalties thereunder to Endo with respect to
relevant Net Realization of PPG or its Affiliates or licensees pursuant
to such license under this Section 6.9 and with due regard (as provided
in Section 4.5, but applied in the other direction) to any Development
Excess or Certification Excess theretofore borne by PPG due to Endo's
not making the payments it would otherwise have made under Section 2.5
and/or Section 3.7; and (ii) the relevant Net Realization shall be
************* *********** prior to the calculation of the proportion
thereof to be paid to Endo as Royalties hereunder; and (iii) payments
of Royalties will be made to Endo in Chaddsford, PA USA.
5. Throughout the life of the license under Section 6.3.2, to the extent
applicable to the relevant Designated Product(s) in the relevant
Specified Nation(s), Endo will provide to PPG and its Affiliates and
sublicensees reasonable assistance on commercially reasonable terms for
the purposes of developing, testing, certifying, making, using,
selling, offering for sale, or importing the relevant Designated
Product(s) or any services involving such Designated Product(s) in the
relevant Specified Nation(s), including without limitation making
available to PPG the benefit of any and all Facilities Certifications
to the maximum extent permitted by law. Without limiting the generality
of the foregoing, Endo will specifically either:
(i) supply PPG and its Affiliates and sublicensees with
sufficient quantities of the Oxymorphone active drug substance
(ADS) produced in accordance with the Specifications in
compliance with GMP and all applicable laws and regulations,
to meet their reasonable requirements for the manufacturing of
the Designated Product(s). If and to the extent this clause
(i) is effective, PPG shall purchase all of its and its
Affiliates' and sublicensees' requirements thereof for such
uses from Endo during such period. The price for all
Oxymorphone ADS sold hereunder shall equal the applicable
Oxymorphone Price, and shall be payable by PPG to Endo within
thirty (30) days after the shipping of the Oxymorphone ADS to
PPG. As provided in Exhibit 1.35, ***************************
************************************************************
*************************************************************.
The Oxymorphone ADS shall be provided FOB Garden City, New
York, and all other terms of such supply shall be as provided
in Section 7, mutatis mutandis for application to the
Oxymorphone ADS sold by Endo,
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ASTERISKS DENOTE SUCH OMISSIONS.
inclusive without limitation of the provisions of Section 7.4,
which shall be applicable if Endo for any reason fails to
supply PPG with its and its Affiliates' and sublicensees'
requirements of Oxymorphone ADS during the life of the license
under Section 6.3.2, to the extent applicable to the relevant
Designated Product(s) in the relevant Specified Nation(s); or
(ii) manufacture and sell to PPG and its Affiliates and
sublicensees, on commercially reasonable terms, the finished
Designated Product(s) for sale in the relevant Specified
Nation(s) and shall deliver the same to the relevant Specified
Nation(s), or otherwise assist PPG or its Affiliates or
sublicensees to effect such deliveries.
In the absence of any specific election by PPG between clause
(i) and (ii), it will be deemed to have selected clause (ii). PPG may,
on good cause shown and after consultation with Endo, reasonably elect
to switch a single time as to the relevant Designated Product in any
Specified Nation (unless Endo in its discretion approvals subsequent
switches, one way or the other as to such Designated Product in such
Specified Nation) from the course specified in clause (ii) to that in
clause (i), and Endo agrees to reasonably assist PPG to be able to make
such a switch. PPG will, at the reasonable request of Endo, switch to
clause (i) in those situations in which it is able to do so without
significant harm to its interests and in which this would be of
substantial benefit to Endo.
6. As used herein, the "relevant Specified Nation(s)" shall mean the
entire Territory as to a termination of Endo's participation in a
Development Period or as to the termination of this Agreement pursuant
to Section 5.8 due to an uncured breach by Endo or a termination
pursuant to Section 5.9. The "relevant Specified Nation(s)" shall mean
the Specified Nation(s) for the applicable Certification Period as to a
termination of Endo's participation in a Certification Period or its
election not to participate therein (or its ineligibility to do so);
shall mean, as to Marketing Period licenses to PPG or its designated
third parties under Section 4.3, those nation(s) to which the last
sentence of Section 4.3 is applicable; and shall mean the applicable
Specified Nation(s) as to the termination of an Exclusivity Period
pursuant to Section 5.6 or of a License Term pursuant to Section 5.7.
7. As used herein, the "then-existing Endo Technology and then-existing
Joint Technology" shall mean the Endo Technology and Joint Technology
made or discovered prior to the expiration of ************ following
the effectiveness of the applicable termination (or prior to the start
of a Certification Period covered by Section 3.6.4), together with any
and all intellectual property and other rights thereto and therein in
the relevant Specified Nation(s), inclusive of later-issued patents to
the extent disclosing the same. Notwithstanding Section
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ASTERISKS DENOTE SUCH OMISSIONS.
6.10, Endo Technology made or discovered following more
than ************* such termination shall not be licensed to PPG for
exploitation with respect to the applicable Designated Product(s) in
the relevant Specified Nation(s). Endo will promptly notify PPG of all
existing Endo Technology and provide PPG with access to all of the
same, solely for use within the scope of the license under Section
6.3.2, to the extent applicable to the relevant Designated Product(s)
in the relevant Specified Nation(s).
J. Subject to Section 6.9.7, Endo hereby grants to PPG a worldwide,
nonexclusive license, with right to sublicense, under any and all Endo
Improvement Technology to make, have made, use, sell, offer for sale, and import
any products or services using or based upon TIMERx or related technology. Such
license will be royalty-free except as is otherwise provided herein. Endo will,
throughout the term of this license, promptly notify PPG of all Endo Improvement
Technology and provide PPG with access to all of the same, solely for use within
the scope of the license stated in this section.
K. Endo hereby grants PPG a nonexclusive and royalty-free license, with
right to sublicense, under all rights of Endo and its Affiliates and
sublicensees in and to the Endo Test and Regulatory Data to use the same for
purposes of marketing or complying with governmental requirements of any country
(other than with respect to a Designated Product or a product directly
competitive with a Designated Product for manufacturing, marketing or use in the
Territory during an applicable Exclusivity Period); provided that PPG will not
use any of the same for purposes of marketing or disclosure to the public, to
the extent the particular Endo Test and Regulatory Data is then Endo's
Confidential Technology, unless Endo has consented thereto, which consent shall
not be unreasonably withheld. Endo hereby consents to PPG's and its
sublicensees' cross-referencing, in any PLAs or other regulatory filings made by
them within the scope of such license, any PLA filing made or drug master file
created by Endo or its Affiliates relating to or containing any of the Endo Test
and Regulatory Data. The license under this section shall survive any
termination or expiration of the term of this Agreement, except a termination
under Section 5.8 due to an uncured breach by PPG. Endo will, throughout the
License Term and solely for use within the scope of the license stated in this
section, provide to PPG on request access to all of the Endo Test and Regulatory
Data in or coming into Endo's possession or otherwise reasonably available to
it.
L. PPG hereby grants Endo a nonexclusive, paid-up license, with right to
sublicense, under all rights of PPG and its Affiliates in and to the PPG Test
and Regulatory Data to use the same for purposes of complying with governmental
requirements, but solely with respect to the Designated Product(s) for marketing
or use in the Territory. PPG hereby consents to Endo's and its sublicensees'
cross-referencing, in any PLAs or other regulatory filings made by them within
the scope of such license, any PLA filing made or drug master file created by
PPG or its
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Affiliates relating to or containing any of the PPG Test and Regulatory Data.
The license and rights under this section shall survive any termination or
expiration of the term of this Agreement, except a termination under Section 5.8
due to an uncured breach by Endo. PPG will, throughout the License Term and
solely for use within the scope of the license stated in this section, provide
to Endo on request access to all of the PPG Test and Regulatory Data in or
coming into PPG's possession or otherwise reasonably available to it.
M. Each party agrees to mark and to have marked by its sublicensees every
product manufactured, used or sold by it or its sublicensees in accordance with
the laws of the United States or other applicable Specified Nation relating to
the marking of patented articles with notices of patent.
VII. SUPPLY OF FORMULATED TIMERX.
A. All sales of Formulated TIMERx shall be F.O.B. Patterson, New York, and
Endo shall bear all transportation, insurance, taxes, duties, and other costs
and risks of loss, spoilage and damage associated with the shipping and delivery
of Formulated TIMERx to Endo or its Affiliates or sublicensees.
B. Subject to Sections 2.5 and 3.7, PPG shall perform routine quality
control tests with respect to all Formulated TIMERx as required by the FDA, or
otherwise as PPG deems necessary in accordance with its applicable policies, and
PPG will also bear the expenses and fees for filing the Drug Master File for
TIMERx with the FDA. No other or special tests by PPG with respect to the raw
materials or Formulated TIMERx will be required, unless and to the extent that
Endo establishes that the same are required in order to obtain or maintain a
governmental license to market a Designated Product in the Territory. PPG shall
promptly, upon completion of each lot or batch of Formulated TIMERx, deliver to
Endo a copy of the record of such test performed on said lot or batch. Endo will
perform quality control tests on Formulated TIMERx immediately on receipt at its
plant and advise PPG within thirty (30) days of any deviations from
Specifications.
C. If Endo considers any such shipment not to conform to the applicable
Specifications, Endo shall notify PPG as provided in Section 7.2 and provide PPG
with the relevant analysis. PPG'S SOLE OBLIGATION AND ENDO'S EXCLUSIVE
REMEDY FOR ANY SUCH NONCONFORMITY SHALL BE AS FOLLOWS:
i) PPG shall at its own expense accept return of any
shipment not accepted, or else reimburse Endo for the
cost of disposal or destruction;
ii) PPG shall use its Best Commercial Efforts to replace
the non- conforming shipment with conforming
Formulated TIMERx; and
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
iii) Section 7.4 shall apply if in any circumstances set
out in that Section PPG shall be unable to supply
replacement conforming Formulated TIMERx.
D. If for any reason PPG fails to supply Endo with its and its Affiliates'
and sublicensees' requirements of Formulated TIMERx during a Marketing Period,
PPG shall, AS ENDO'S SOLE AND EXCLUSIVE REMEDY FOR ANY FAILURE TO SUPPLY
FORMULATED TIMERx, grant Endo a nonexclusive license to manufacture Formulated
TIMERx under the TIMERx Production Technology and make knowledgeable personnel
reasonably available, at PPG's expense, to consult with Endo, all to the extent
necessary to enable Endo to produce Formulated TIMERx that would otherwise have
been supplied by PPG hereunder for Endo and its Affiliates and sublicensees in
connection with the production of the relevant Designated Product pursuant to
this Agreement during such Marketing Period.
1. Such license shall be royalty-free, it being understood that *********
**********************************************************************
**********************************************************************
*****************************.
2. Endo shall maintain TIMERx Production Technology delivered to Endo
pursuant to this section, whether orally or in writing, in strictest
confidence and shall use such information and technology only for the
purpose of producing Formulated TIMERx for its own use and the use of
its Affiliates and sublicensees in connection with this Agreement.
3. Endo acknowledges that, in doing the foregoing, PPG will not be
providing a "turnkey" operation. Rather, PPG will only be required to
make reasonably available to Endo the best standard of knowledge and
information then available to PPG and directly used in its or its
Affiliate's manufacture of Formulated TIMERx.
E. While PPG is supplying Formulated TIMERx hereunder to Endo, PPG shall,
after receipt of reasonable prior notice, give duly accredited representatives
of Endo access at all reasonable times during regular business hours to PPG's
plant in which the Formulated TIMERx is being produced, to ensure production
practices created Formulated TIMERx conforming to Specifications. PPG will exert
its Best Commercial Efforts to maintain at all times during the Marketing Period
at least two approved sources for the production of Formulated TIMERx (whether
or not inclusive of PPG's own production facilities). To the extent necessary to
obtain or maintain an Approval, PPG will exert its Best Commercial Efforts to
obtain similar access for Endo to the production facilities of any of PPG's
third-party suppliers of the Formulated TIMERx.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
F. Endo shall deliver to PPG firm written orders stating its (and/or its
Affiliates' and sublicensees') requirements for Formulated TIMERx to be used for
production of the Designated Product(s) for commercial use or sale no less than
************* in advance of the requested delivery date therefor, by giving firm
orders at the beginning of each month that creates firm orders during the third
following month (the order-submission month and the first and second months
following having already been the subject of prior firm orders). All such orders
shall be firm and shall not be cancelled or deferred by Endo.
G. At least ************* before Endo and/or its Affiliates or
sublicensees begin production of the Designated Product for commercial use or
sale (and in any event not later than concurrently with the submission of the
first order for use in the production of the applicable Designated Product
intended for commercial sale during each Marketing Period), Endo shall deliver
to PPG a written, non-binding estimate of all requirements of Formulated TIMERx
therefor during the following *************. Endo will deliver to PPG updates to
such estimates on or before the first day of each
********************************** thereafter, which updates may revise
estimates previously submitted, and will add estimates for additional months so
that each such estimate covers the ********** period following the end of the
firm-order period (that is, the ************************ after the month in
which such estimates are made).
H. PPG will exert Best Commercial Efforts to supply Endo with all amounts
of Formulated TIMERx requested by Endo, but PPG shall have no obligation to
supply Endo with quantities of Formulated TIMERx during any quarter in excess of
**** of the quantity estimated in Endo's estimate for that quarter which
estimate was given to PPG **************************************** pursuant to
Section 7.7 (the "*********** Estimated Quantity"), nor shall Endo order
quantities for any *********************************************************.
I. Each party shall promptly notify the other of any fact, circumstance,
condition or knowledge dealing with TIMERx, Formulated TIMERx, or the Designated
Product of which the Party becomes aware that bears upon the safety or efficacy
of TIMERx, Formulated TIMERx, or the Designated Product. Each party shall
immediately notify the other of any inspection or audit relating to TIMERx,
Formulated TIMERx, or the Designated Product by any governmental regulatory
authority in the Territory. If a representative of the governmental authority
takes samples in connection with such audit or inspection, the parties shall
immediately provide each other, as appropriate, samples from the same batch. The
party in receipt of such notice will provide the other party within 72 hours,
with copies of all relevant documents, including FDA Forms 482 and 483 (as
applicable), warning letters and other correspondence and notifications as such
other party may reasonably request. PPG and Endo agree to cooperate with each
other during any inspection, investigation or other inquiry by the FDA or other
governmental entity, including providing information and/or documentation, as
requested by the FDA, or other governmental entity. To the extent
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25
permissible, PPG and Endo also agree to discuss any responses to observations or
notifications received and to give the other party an opportunity to comment on
any proposed response before it is made. In the event of disagreement concerning
the content or form of such response, Endo shall be responsible for deciding the
appropriate form and content of any response with respect to any of its cited
activities and PPG shall be responsible for deciding the appropriate form and
content of any response with respect to any of its cited activities. Each party
shall inform the other of all comments and conclusions received from the
governmental authority.
VIII. USE OF TRADEMARKS. Endo agrees to market the Designated Product(s) in
conjunction with the appropriate PPG Trademark(s), and as provided in this
section, including uses on such packaging, labeling and other materials as the
Alliance Committee shall reasonably determine. The provisions of this Section 8
shall apply, mutatis mutandis, to marketing of Designated Product(s) by PPG or
its designees as contemplated under Sections 4.2, 4.3, or 6.9, with respect to
the use by PPG or such designees of the Endo Trademarks.
A. Endo acknowledges that all PPG Trademarks and all rights therein or
registrations thereof, worldwide, shall belong exclusively to PPG. All use of
the PPG Trademarks as contemplated in this Agreement by Endo shall accrue to the
benefit of PPG. Endo shall make no use of any of the PPG Trademarks except to
identify and promote the Designated Product as contemplated hereunder for sale
in the Territory. Endo shall not continue using the PPG Trademarks after
termination or expiration of this Agreement, nor after the removal or alteration
of any such PPG Trademark from Exhibit 1.20, except to complete the sale of
inventory of the Designated Product on hand at the time of termination or
expiration, or at the time of such removal or alteration.
B. Endo shall cooperate with PPG to protect the interest of PPG in the PPG
Trademarks, and shall neither attempt to register nor authorize others to
register any PPG Trademarks without the prior written consent of PPG in each
instance. Endo shall promptly inform PPG of any actual or apparent infringement
of any PPG Trademarks or other intellectual properties of PPG which may come to
Endo's attention during the term hereof.
C. Endo shall use all appropriate notices of trademark status of the PPG
Trademarks, including the "(TM)" designation (or the (R) symbol for registered
marks, if any), in all labeling and promotional materials and shall otherwise
conform with all policies and notices of PPG's rights in the marks and for the
protection of the PPG Trademarks, including without limitation the inclusion of
an appropriate footnote acknowledging the use of the PPG Trademark(s) under
license. Endo will impose a spatial separation between any PPG Trademarks and
any other names or marks of Endo or any others, and will not otherwise use any
of PPG's names, marks or
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symbols in any manner that could, whether immediately or over time, create any
substantial association between them and the business of Endo.
D. Samples of the Designated Product and any advertising, promotional
materials or packaging related thereto that bear the PPG Trademarks shall be
provided by Endo to PPG at least thirty days prior to the first use or sale
thereof, and at other times upon the request of PPG. Endo shall not put any of
such items into initial use without first obtaining the written approval of PPG,
which approval shall not be unreasonably withheld. PPG shall at all times have
the right to enter into Endo's facilities and/or to take other appropriate
methods to check the quality of the Designated Product manufactured or offered
by Endo, from time to time during the term of this Agreement. If at any time or
times PPG thinks that the quality of the Designated Product manufactured or
offered by Endo, or the packaging or promotional materials therefor, is not
suitable for using the PPG Trademarks or any of them, PPG, at its option, shall
have the right to suspend or prohibit the use of such PPG Trademark(s), provided
that PPG has given Endo a written notice thereof and a period of 60 days to
bring them up to PPG's standards; provided further, however, that PPG need not
give such opportunity to cure any deficiency that has been the subject of more
than two such notices on prior occasions during the preceding twelve months.
IX. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
A. Each party represents and warrants to the other that it is duly
organized and validly existing under the laws of the state of its organization,
that it has the requisite corporate or limited liability company authority to
execute and deliver this Agreement and to perform its obligations hereunder, and
that the execution and performance of its obligations hereunder are not and will
not be in violation of or in conflict with any material obligation it may have
to any third party.
B. PPG represents and warrants that any Formulated TIMERx supplied by it
to Endo hereunder for use in the Designated Product, at the point of delivery:
1. will conform to the Specifications in effect as of the order date
therefor; and
2. to PPG's current knowledge, without undertaking any special
investigation, will not infringe upon the intellectual property rights
of any third party.
C. Each party represents and warrants to the other that it has obtained,
and will at all times during the term of this Agreement hold and comply with,
all licenses, permits and authorizations necessary to perform this Agreement and
to test, manufacture, market, export, and import the Designated Product(s),
Oxymorphone, or Formulated TIMERx to be so tested, manufactured, marketed,
exported or imported by it as provided herein, as now or hereafter required
under any applicable
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
statutes, laws, ordinances, rules and regulations of the United States and any
applicable foreign, state, and local governments and governmental entities,
including without limitation all Facilities Certifications (as to Endo).
D. THE FOREGOING WARRANTIES ARE IN LIEU OF, AND THE PARTIES EACH DISCLAIM,
ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR ARISING BY LAW, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NON-INFRINGEMENT. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A
REPRESENTATION OR WARRANTY (i) BY PPG AS TO THE PATENTABILITY, VALIDITY, OR
SCOPE OF ANY PPG PATENTS, PPG'S CONFIDENTIAL TECHNOLOGY, TIMERx PRODUCTION
TECHNOLOGY, PPG TEST AND REGULATORY DATA, OR JOINT TECHNOLOGY, NOR AS TO THE
UTILITY, EFFICACY, NONTOXICITY, SAFETY OR APPROPRIATENESS OF TIMERx OR THE
DESIGNATED PRODUCT; OR (ii) BY ENDO AS TO THE PATENTABILITY, VALIDITY, OR SCOPE
OF ANY ENDO TECHNOLOGY, ENDO TEST AND REGULATORY DATA, OR JOINT TECHNOLOGY, NOR
AS TO THE UTILITY, EFFICACY, NONTOXICITY, SAFETY OR APPROPRIATENESS OF ANY
PRODUCTS MADE THEREFROM.
E. PPG shall indemnify, defend and hold Endo and its Affiliates and
sublicensees harmless from any and all third-party claims to the extent arising
from, in connection with, based upon, by reason of, or relating in any way to:
1. any claim, action or damages arising out of any alleged infringement by
reason of the manufacture, use or sale by Endo of the Designated Product(s) to
the extent such infringement would apply as well to the manufacture, sale or
distribution of TIMERx alone;
2. PPG's ***************************************************************
************* and the Specifications therefor hereunder; provided,
however, that matters of infringement of third party rights or
intellectual properties shall be included under this clause only to the
extent the same are covered by Section 9.5.1 or are within PPG's
knowledge, without undertaking any special investigation, and of which
PPG failed to inform Endo within 30 days following the later of the
Effective Date or PPG's first obtaining such knowledge;
3. any failure of the Formulated TIMERx manufactured by PPG or its
alternate supplier (but not by Endo under Section 7.4), as delivered to
Endo hereunder for use in the Designated Product(s), to conform to the
Specifications; or
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
4. any failure of PPG to comply with its obligation under Section 7.9 to
notify Endo of any information coming into PPG possession and
***********************************************************************
***,
and not arising from any other aspect of the Designated Product(s) ************,
*******************************************************************************
******************************************************************************
************************************** following its delivery to Endo hereunder.
F. Endo shall indemnify, defend and hold PPG harmless from any and all
third-party claims to the extent arising from, in connection with, based upon,
by reason of, or relating in any way to, the formulation, development, supply,
production, manufacture, sale, delivery, distribution or use of the Designated
Product(s) by Endo, its Affiliates or sublicensees, ***************************
*****************************.
G. Notwithstanding anything to the contrary set forth elsewhere herein,
neither Endo nor PPG shall be obligated to indemnify the other party for claims
or liabilities to the extent arising from such other party's, or its
Affiliates', sublicensees' or assigns', negligence, intentional misconduct, or
breach of its duties, obligations, warranties or representations set forth
herein.
H. Whenever indemnification is provided for a party under this Agreement,
such right of indemnification shall extend also to the indemnified party's
Affiliates, officers, directors, shareholders, successors, assigns, agents,
employees, and insurers to the extent the same become subject to such claim in
such capacity. The party seeking indemnification shall provide the indemnifying
party with written notice of any claim or action within ten (10) days of its
receipt thereof, and shall afford the indemnifying party the right to control
the defense and settlement of such claim or action. The party seeking
indemnification shall provide reasonable assistance to the indemnifying party in
the defense of such claim or action. If the defendants in any such action
include both Endo and PPG, and either party concludes that there may be legal
defenses available to it which are different from, additional to, or
inconsistent with, those available to the other, that party shall have the right
to select separate counsel to participate in the defense of such action on its
behalf, and such party shall bear the cost and expense of such separate defense,
unless and to the extent the parties otherwise agree, or it is determined
through arbitration hereunder that such costs and expense are or were required
to be indemnified by the other party hereunder and are or were required to be
incurred separately due to such different, additional, or inconsistent defenses.
Should the indemnifying party determine not to defend such claim or action, the
other party shall have the right to maintain the defense of such claim or action
and the indemnifying party agrees to provide reasonable assistance to it in the
defense of such claim or action and to bear the reasonable cost and expense of
such defense (including attorneys' and experts' fees
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and expenses). Neither party shall settle any such claim or action in a way that
prejudices or adversely impacts the other party to this Agreement without the
prior approval of such other party (which approval shall not be unreasonably
withheld).
I. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT
(OTHER THAN FOR: BREACHES OF SECTION 9.3; INDEMNITIES UNDER SECTIONS 9.5 AND 9.6
FOR PATENT INFRINGEMENT OR FOR HARM TO PERSONS OR TANGIBLE PROPERTY; AND
BREACHES OF SECTION 10), NEITHER PARTY SHALL UNDER ANY CIRCUMSTANCES BE LIABLE
FOR ANY THIRD PARTY CLAIMS OR FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT OR
SPECIAL DAMAGES, INCLUDING ANY LOST PROFITS OR SAVINGS, ARISING FROM ANY BREACH
OF WARRANTY OR THE PERFORMANCE OR BREACH OF ANY OTHER PROVISION OF THIS
AGREEMENT OR THE USE OR INABILITY TO USE TIMERx, THE DESIGNATED PRODUCT, PPG
PATENTS, PPG'S CONFIDENTIAL TECHNOLOGY, TIMERx PRODUCTION TECHNOLOGY, PPG TEST
AND REGULATORY DATA, ENDO TECHNOLOGY, ENDO TEST AND REGULATORY DATA, OR JOINT
TECHNOLOGY, OR ANY CLAIMS ARISING IN TORT, PERSONAL INJURY, OR PRODUCT
LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
X. CONFIDENTIALITY AND NON-SOLICITATION.
A. In the course of performance under this Agreement or during the
discussions leading thereto, a party may disclose, or may have disclosed, to the
other confidential information belonging to such party in writing, orally or by
demonstration or sample, which information is marked or stated in writing to be
"confidential" or "trade secret" information, or where the circumstances of the
disclosure and/or the nature of the information otherwise reasonably give notice
of the confidential character of the information. All such confidential
information of a party shall be maintained in confidence by the other and will
not be used by the other party for any purpose except as authorized hereunder.
Each party shall exercise, and shall cause its Affiliates, sublicensees, and
consultants to exercise, a reasonable degree of care and at least the same
degree of care as it uses to protect its own confidential information of similar
nature to preserve the confidentiality of such information of the other party.
Each party shall safeguard such information against disclosure to third parties,
including without limitation employees and persons working or consulting for
such party that do not have an established, current need to know such
information for purposes authorized under this Agreement. This obligation of
confidentiality does not apply to information and material:
1. that were properly in the possession of the receiving party, without
any restriction on use or disclosure, prior to receipt from the other
party;
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2. that are at the time of disclosure hereunder in the public domain by
public use, publication, or general knowledge;
3. that become general or public knowledge through no fault of the
receiving party or its Affiliates following disclosure hereunder;
4. that are properly obtained by the receiving party from a third party
not under a confidentiality obligation to the disclosing party hereto;
5. that are documented to have been independently developed by or on
behalf of the receiving party without the assistance of the
confidential information of the other party;
6. that consist merely of an idea or conception for the combination of one
or more active drug ingredients with a controlled-release agent such as
TIMERx; or
7. to the extent the same are required to be disclosed by order of any
court or governmental authority; provided, however, that the receiving
party shall use its Best Commercial Efforts to give the disclosing
party prior notice of any such disclosure so as to afford the
disclosing party a reasonable opportunity to seek, at the expense of
the disclosing party, such protective orders or other relief as may be
available in the circumstances.
B. Neither party shall make any public announcement or other publication
regarding this Agreement (whether as to the existence or terms hereof) or the
development work or project hereunder or the results thereof without the prior,
written consent of the other party, which consent shall not be unreasonably
withheld; provided that the foregoing shall not prohibit any disclosure which,
in the opinion of counsel to the disclosing party, is required by any applicable
law or by any competent governmental authority. In no event shall either party
make any disclosure of any such results before a patent application has been
filed with respect thereto, except upon the prior written approval of the other
party.
C. Each of PPG and Endo agrees that during the License Period, neither of
them will directly or indirectly solicit or encourage any employee or consultant
of the other to leave or terminate such employment or consultancy for any
reason, including without limitation, becoming employed or otherwise engaged in
any capacity by such party (or any person or entity associated with such party,
whether or not an Affiliate), nor will it assist others in doing so.
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XI. INFRINGEMENT.
A. PPG shall promptly inform Endo of any suspected infringement of any of
the PPG Patents or Joint Technology Patents or the infringement or
misappropriation of the TIMERx Production Technology or Joint Technology by a
third party, to the extent such infringement or misappropriation involves the
manufacture, use or sale of a Designated Product or a substitutable or directly
competitive product in the Territory ("Covered Infringement"). Endo shall
promptly inform PPG of any suspected infringement of any of the PPG Patents or
Joint Technology Patents or infringement or misappropriation of the TIMERx
Production Technology or Joint Technology of which Endo is aware, whether or not
the same involves a Covered Infringement.
B. If the suspected infringement or misappropriation does not involve a
Covered Infringement, PPG may take, or refrain from taking, any action it
chooses, with or without notice to Endo, and Endo shall have no right to take
any action with respect to such suspected infringement or misappropriation, nor
to any recoveries with respect thereto. If the suspected infringement or
misappropriation involves a Covered Infringement, PPG shall, within 120 days of
the first notice referred to in Section 11.1, inform Endo whether or not PPG
intends to institute suit against such third party with respect to a Covered
Infringement. Endo will not take any steps toward instituting suit against any
third party involving a Covered Infringement until PPG has informed Endo of its
intention pursuant to the previous sentence.
C. If PPG notifies Endo that it intends to institute suit against a third
party with respect to a Covered Infringement, and Endo does not agree to join in
such suit as provided in Section 11.4, PPG may bring such suit on its own and
shall in such event bear all costs of, and shall exercise all control over, such
suit. PPG may, at its expense, bring such action in the name of Endo and/or
cause Endo to be joined in the suit as a plaintiff. Recoveries, if any, whether
by judgment, award, decree or settlement, shall belong solely to PPG.
D. If PPG notifies Endo that it desires to institute suit against such
third party with respect to a Covered Infringement, and Endo notifies PPG within
30 days after receipt of such notice that Endo desires to institute suit
jointly, the suit shall be brought jointly in the names of both parties and all
costs thereof shall be borne equally to the extent applicable to the Covered
Infringement. Recoveries, if any, whether by judgment, award, decree or
settlement, shall (to the extent attributable to the Covered Infringement),
after the reimbursement of each of PPG and Endo for its share of the joint costs
in such action, be shared equally between PPG and Endo.
E. If PPG notifies Endo that it does not intend to institute suit against
such third party with respect to a Covered Infringement, Endo may institute suit
on its own. Endo shall bear all costs of, and shall exercise all control over,
such suit. Recoveries,
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if any, whether by judgment, award, decree or settlement, shall belong solely to
Endo; provided however that, after reimbursement of Endo for its costs in such
action, any portion of such net recoveries which constitutes the equivalent of,
or damages or payments in lieu of, a royalty measured by the defendant's sales,
shall be shared equally between PPG and Endo.
F. Should either PPG or Endo commence a suit under the provisions of this
Section 11 and thereafter elect to abandon the same, it shall give timely notice
to the other party, who may, if it so desires, be joined as a plaintiff in the
suit (or continue as such if it is already one) and continue prosecution of such
suit, provided, however, that the sharing of expenses and any recovery of such
suit shall be as may be determined for that situation by Committee Action.
XII. ESCALATION PROCEDURES.
A. The parties intend that, to the maximum extent practicable, they shall
reach decisions hereunder cooperatively through the deliberations of the
Alliance Committee and by consent of its members as described in Section 1.10.1.
In cases in which that does not occur (other than as to a question of patent
validity or as to a matter left to the discretion of a party hereunder), either
party may institute an Escalation Procedure in which a proposed Committee Action
approved by at least two members of the Alliance Committee, is provided in
writing to each party's Escalation Officer. Such Escalation Officers shall
discuss the proposed Committee Action, and shall meet with respect thereto if
either of them believes a meeting or meetings to be useful. If the Escalation
Officers do not resolve the matter by either approving the proposed Committee
Action (whether or not in a revised form) or agreeing to reject it, within
thirty (30) days (or such lesser or longer period as they may agree is a useful
period for their discussions), then either of them may institute a formal
mediation of such matter pursuant to Section 12.2.
B. Any dispute or difference (other than as to a question relating to
patent validity or as to a matter left to the discretion of a party hereunder),
between the parties arising out of or in connection with this Agreement,
including without limitation a disagreement over a proposed Committee Action,
that cannot be resolved by the consent of the Escalation Officer of each party
shall be referred to mediation before any party resorts to arbitration,
litigation, or other dispute resolution procedure. Unless the parties agree
otherwise, the mediation will be conducted in accordance with The CPR Mediation
Procedure for Business Disputes (Revised 1994) of the CPR Institute for Dispute
Resolution by a mediator who has had both training and experience as a mediator
of general corporate and commercial matters. If the parties cannot agree on a
mediator, then the mediator will be selected by the President of the CPR
Institute for Dispute Resolution in accordance with the criteria set forth in
the preceding sentence. Within thirty days after the selection of the mediator,
the parties and their respective attorneys will meet with the mediator for
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one mediation session of at least four hours. If the dispute cannot be settled
during such mediation session or during any mutually agreed continuation of such
session, any party to this Agreement may give to the mediator and the other
party to this Agreement written notice declaring the mediation process at an
end, and such dispute will be resolved by arbitration pursuant to Section 13.
All discussions pursuant to this section will be confidential and will be
treated as compromise and settlement discussions. Nothing said or disclosed, and
no document produced, in the course of such discussions which is not
independently discoverable may be offered or received as evidence or used for
impeachment or for any other purpose in any arbitration or litigation. The costs
of any mediation pursuant to this section will be shared equally by the parties
to this Agreement. Each party to this Agreement acknowledges receipt of a copy
of The CPR Model Mediation Procedure for Business Disputes (Revised 1994) of the
CPR Institute for Dispute Resolution. The use of mediation will not be construed
under the doctrines of laches, waiver or estoppel to affect adversely the rights
of either party, and in particular either party may seek a preliminary
injunction or other interim judicial relief at any time if in its judgment such
action is necessary to avoid irreparable damage.
XIII. ARBITRATION. Should the parties fail to reach agreement with respect to
a dispute or difference (other than as to a question relating to patent validity
or as to a matter left to the discretion of a party hereunder), between the
parties arising out of or in connection with this Agreement, including without
limitation a disagreement over a proposed Committee Action, through the
aforesaid mediation or otherwise, then the dispute or difference will be
determined by arbitration in New York City in accordance with the
Non-Administered Arbitration Rules & Commentary (Amended 1993) of the CPR
Institute for Dispute Resolution by a tribunal of three independent and
impartial arbitrators, one of which will be appointed by each of Endo and PPG,
and the third of which shall have had both training and experience as an
arbitrator of general corporate and commercial matters and who shall be, and for
at least ten years shall have been, a partner, shareholder or member in a highly
respected law firm headquartered in the United States. If the parties to this
Agreement cannot agree on the third arbitrator, then the third arbitrator will
be selected by the President of the CPR Institute for Dispute Resolution in
accordance with the criteria set forth in the preceding sentence; provided that
no person who served as a mediator pursuant to Section 12.2 with respect to such
dispute may be selected by the President of the CPR Institute for Dispute
Resolution as an arbitrator pursuant to this section. The tribunal may decide
any issue as to whether, or as to the extent to which, any dispute is subject to
the arbitration and other dispute resolution provisions in this Agreement. The
tribunal must base its award on the provisions of this Agreement and must render
its award in a writing which must include an explanation of the reasons for such
award. Any arbitration pursuant to this section will be governed by the
substantive laws of the State of New York applicable to contracts made and to be
performed in that state, without regard to conflicts of law rules, and by the
arbitration law of the Federal Arbitration Act
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34
(9 U.S.C. sec.1 et seq.), and judgment upon the award rendered by the arbitrator
may be entered by any court having jurisdiction thereof. The statute of
limitations of the state of New York applicable to the commencement of a lawsuit
will apply to the commencement of an arbitration under this section, except that
no defenses will be available based upon the passage of time during any
negotiation or mediation required pursuant to Section 12. All fees, costs and
expenses of the arbitrators, and all other costs and expenses of the
arbitration, will be shared equally by the parties to this Agreement unless such
parties agree otherwise or unless the tribunal in the award assesses such costs
and expenses against one of such parties or allocates such costs and expenses
other than equally between such parties. Each party to this Agreement
acknowledges receipt of a copy of the Non-Administered Arbitration Rules &
Commentary (Amended 1993) of the CPR Institute for Dispute Resolution.
Notwithstanding the foregoing, either party may, on good cause shown, seek a
temporary restraining order and/or a preliminary injunction from a court of
competent jurisdiction, to be effective pending the institution of the
arbitration process and the deliberation and award of the arbitration tribunal.
XIV. MISCELLANEOUS.
A. This Agreement incorporates the Definitions Exhibit and the numbered
Exhibits referenced herein. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter hereof.
B. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and permitted assigns; provided, however,
that except as part of the transfer of all or substantially all assets to a
single buyer or pursuant to a merger or other corporate reorganization, neither
party shall assign or delegate any of its rights or obligations hereunder at any
time without the prior written consent of the other party hereto, which consent
shall not be unreasonably withheld.
C. All notices, requests or other communication provided for or permitted
hereunder shall be given in writing and shall be hand delivered or sent by
facsimile, reputable courier or by registered or certified mail, postage
prepaid, return receipt requested, to the address set forth on the signature
page of this Agreement, or to such other address as either party may inform the
other of in writing. Notices will be deemed delivered on the earliest of
transmission by facsimile, actual receipt or three days after mailing as set
forth herein.
D. Any terms of this Agreement may be amended, modified or waived only in
a writing signed by both parties.
E. If any provision of this Agreement shall be held invalid, illegal or
unenforceable, such provision shall be enforced to the maximum extent permitted
by
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35
law and the parties' fundamental intentions hereunder, and the remaining
provisions shall not be affected or impaired.
F. Nothing herein contained shall constitute this a joint venture
agreement or constitute either party as the partner, principal or agent of the
other, this being an Agreement between independent contracting entities. Neither
party shall have the authority to bind the other in any respect whatsoever.
G. In the event that either party hereto is prevented from carrying out
its obligations under this Agreement by events beyond its reasonable control,
including without limitation acts or omissions of the other party, acts of God
or government, natural disasters or storms, fire, political strife, labor
disputes, failure or delay of transportation, default by suppliers or
unavailability of parts, then such party's performance of its obligations
hereunder shall be excused during the period of such event and for a reasonable
period of recovery thereafter, and the time for performance of such obligations
shall be automatically extended for a period of time equal to the duration of
such event or events; provided, however, that the other party may, at its
election, terminate this Agreement upon 120 days' prior notice to the party
affected by such events, unless such events cease to prevent such affected
party's performance hereunder during such 120-day period.
H. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York without regard to its
conflict of laws rules.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and acknowledge this Agreement as of the date
first written above.
ENDO PHARMACEUTICALS INC. PPG
By /s/ Carol A. Ammon By John V. Talley, Jr.
---------------------------------- -------------------------------
Its Its President
--------------------------------- ------------------------------
Address: Address:
223 Wilmington West Chester Pike 2981 Route 22
Chadds Ford, PA 19317 Patterson, N.Y. 12563
FAX: FAX: (914) 878-3420
Attn: Carol A. Ammon Attn: John V. Talley
CC: Osagie Imasogie CC: Michael Mallon
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
DEFINITIONS EXHIBIT
XV. DEFINITIONS.
A. "AFFILIATE" of PPG shall mean and include the entities listed as such
in Exhibit 1.1, and "Affiliate" of Endo shall mean and include the entities
listed as such in Exhibit 1.1, which, in each case are the entities that,
directly or indirectly, own and control the voting of more than 50% of the
voting capital interests of such party ("Parent"), or more than 50% of the
voting capital interests (or equivalent control) of which is, directly or
indirectly, owned, and the voting of which is controlled, by such party or its
Parent, as of the Effective Date. Subject to Section 14.2, for purposes of this
definition and this Agreement:
1. no entity shall remain an "Affiliate" unless it continues to meet the
foregoing criteria; and
2. no entity shall become an "Affiliate" (even if it meets such criteria)
without the consent of the other party hereto, which consent shall not
be unreasonably withheld.
B. "ALLIANCE COMMITTEE" shall mean a committee of six members, three of
whom will be designated in writing by each of PPG and Endo. The initial Alliance
Committee shall have six members, as follows: John V. Talley, Jr., Dr. Paul
Wotton, and Dr. Anand Baichwal, designated by PPG, and Dr. D. Kao, Chuck
Cottone, and Osagie Imasogie designated by Endo. If at any time a vacancy occurs
(whether due to death, disability, resignation, removal by a party of its
designee by written notice to the other party, or otherwise), the vacancy will
be filled as soon as is reasonably practicable by designation by the party that
originally designated the prior incumbent. In the meantime, the Alliance
Committee shall continue to function with its remaining members, provided that
any Committee Action described in Section 1.2 will continue to require the
consent of at least four members.
C. "APPLICABLE PERCENTAGE" shall mean the following percentages of the
following portions of Net Realization:
1. ********************** of all Net Realization from all units of each
respective Designated Product *************************************;
2. ********************* of all Net Realization from all units of each
respective Designated Product sold by Endo or its distributors or
licensees ************* *****************, until the aggregate of all
such Net Realization from such Designated Product described in this
clause 1.3.2 during the term of this Agreement equals
**********************************************;
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37
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
3. *********************** of all Net Realization from all units of each
respective Designated Product sold by Endo or its distributors or
licensees ************* *******************, after the aggregate of all
such Net Realization from such Designated Product described in clause
1.3.2 and this clause 1.3.3 during the term of this Agreement equals
***************, but before such aggregate equals
******************************************;
4. ********************* of all Net Realization from all units of each
respective Designated Product sold by Endo or its distributors or
licensees ************** ************************, after the aggregate
of all such Net Realization from such Designated Product described in
clause 1.3.2, clause 1.3.3, and this clause 1.3.4 equals
*****************;
5. ********************* of all Net Realization from all units of each
respective Designated Product sold by PPG or its distributors or
licensees ****************** *****************, until the aggregate of
all such Net Realization from such Designated Product described in this
clause 1.3.5 during the term of this Agreement equals
*************************************;
6. ********************* of all Net Realization from all units of each
respective Designated Product sold by PPG or its distributors or
licensees ****************** *********************, after the aggregate
of all such Net Realization from such Designated Product described in
clause 1.3.5 and this clause 1.3.6 during the term of this Agreement
equals ****************, but before such aggregate equals
********************************************; and
7. ********************* of all Net Realization from all units of each
respective Designated Product sold by PPG or its distributors or
licensees ***************** ******************, after the aggregate of
all such Net Realization from such Designated Product described in
clause 1.3.5, clause 1.3.6, and this clause 1.3.7 equals
***************.
D. "APPROVAL" shall mean, with respect to each Designated Product and as
to each nation in the Territory, the approval by the Regulatory Authority in
such nation of a Designated Product for commercial sale in oral solid-dosage
form for administration in humans, pursuant to a Product License Application
("PLA") submitted by or for Endo, or if a license to PPG under Section 6.9 is
applicable, pursuant to a PLA submitted by or for PPG. In the United States, the
"Approval" for a Designated Product shall be the approval of the U.S. Food and
Drug Administration (herein "FDA") of such Designated Product for sale in oral
solid-dosage form for administration in humans, pursuant to a New Drug
Application ("NDA").
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38
E. "BEST COMMERCIAL EFFORTS" shall mean the exertion on a substantially
continuous basis of efforts as would normally be devoted to the applicable task
by commercial parties with similar resources to those of the applicable party,
where such parties are highly motivated to accomplish such task to the maximum
extent practicable, and consider and treat such task as having a priority at
least as high as that for any similar task with respect to such party's other
drug development or marketing efforts (as the case may be). Best Commercial
Efforts will not mean that a party commits that it will actually accomplish the
applicable task, nor that it will devote thereto efforts or resources beyond
those that a prudent commercial enterprise would devote, even though remaining
motivated to do so as described above.
F. "CERTIFICATION BUDGET(S)" shall mean the set of expenditures, costs,
and other resources anticipated to be devoted by the respective parties to the
Certification Tasks during a Certification Period, with respect to the
applicable Designated Product.
G. "CERTIFICATION EXCESS" shall mean the amount which a party would have
borne or paid under Sections 3.6.1 and 3.7, had it participated fully in a
Certification Period, but did not pay due to its ineligibility to participate in
such Certification Period or due to its election, duly made as provided herein,
not to participate fully in such Certification Period.
H. "CERTIFICATION PERIOD" shall mean, with respect to each Designated
Product and as to each Specified Nation or group of Specified Nations as may be
specified herein or by Committee Action, the period beginning at the later of
the end of the Development Period for such Designated Product or the institution
of such Certification Period by Committee Action, and ending on the earliest of:
1. the completion of all of the Certification Tasks applicable thereto;
2. the termination of the Certification Period for such Designated Product
pursuant to Section 5.4; or
3. the termination of this Agreement as provided herein.
I. "CERTIFICATION TASK(S)" shall mean, with respect to each Designated
Product and as to each Specified Nation or group of Specified Nations as may be
specified herein or by Committee Action for the relevant Certification Period:
1. those tasks or milestones as shall be designated from time to time by
Committee Action as being, within industry norms and standards,
sufficient (together with the Development Tasks for such Designated
Product) to support the filing of an NDA with the FDA for such
Designated Product, or, as to other nations than the U.S., to support
the filing of an analogous PLA in the applicable Regulatory Authority;
-3-
39
2. the filing of one or more NDAs and other PLAs with respect to the
Designated Product with the FDA and/or the other Regulatory Authorities
designated by Committee Action;
3. obtaining Approval of such NDAs and PLAs (on a nation-by-nation basis,
as to the approval by the Regulatory Authority having jurisdiction in
that nation); and
4. the preparation by Endo, or if and to the extent that Sections 4.2 or
4.3, or a license to PPG under Section 6.9 are applicable, the
preparation by PPG, and the approval by Committee Action, of an initial
Manufacturing and Marketing Plan for such Designated Product.
In most cases, the Certification Tasks will include (without limitation)
large-scale trials of safety and efficacy, of the sort called "Phase III
Clinical Trials" in the FDA context, and all other testing and studies including
as to efficacy, bioequivalence, and safety and toxicology, in connection with
the development, licensing, manufacture and marketing of the Designated Product,
and for compliance with all requirements imposed by the government of the United
States (inclusive without limitation of the FDA and the DEA) and by any other
government(s) as may be designated by Committee Action. However, the applicable
Certification Tasks may be defined and altered in specific cases by Committee
Action, whether or not in conformity with the above described usual case as now
anticipated. Committee Action to designate Certification Tasks may occur
contemporaneously with the designation of the Designated Product, but this
(and/or alterations and amendments) may be deferred for later Committee Action.
J. "COMMITTEE ACTION" shall mean an official act, decision, or ruling of
the Alliance Committee, which shall require in each case that at least one of
the following applies:
1. all members of the Alliance Committee present and acting (but in any
event a minimum of four such members) have consented thereto, where
such consent is given either in writing (signed either collectively or
in multiple identical counterparts, the signers being considered
"present and acting" for this purpose) or by vote at a duly convened
meeting of the Alliance Committee subsequently entered into the minutes
of such meeting; or
2. at least two members of the Alliance Committee have consented thereto
(in the manner described above), and have further instituted an
Escalation Procedure in which the act, decision, or ruling has received
the written approval of the Escalation Officer of each party; or
-4-
40
3. arbitration pursuant to Section 13 results in the adoption of the act,
decision, or ruling as constituting Committee Action.
A Committee Action may include the rescinding or amendment of any prior
Committee Action.
K. "CONFIDENTIAL TECHNOLOGY" shall mean all technology that is, at the
relevant time hereunder, protected or required to be protected as confidential
information pursuant to Section 10 hereof.
L. "DESIGNATED PRODUCT(S)" shall mean one or more solid-dosage form(s) of
controlled-release pharmaceutical(s) for oral administration in humans that
combine(s) Oxymorphone with TIMERx and, perhaps, also with other active drug
substances or excipients. The parties anticipate that there will be multiple
Designated Products developed and marketed under this Agreement and the
relationship established hereby, as the same shall be designated pursuant to
Section 2.6 or otherwise from time to time by written consent of both parties.
M. "DEVELOPMENT BUDGET(S)" shall mean the set of expenditures, costs, and
other resources anticipated to be devoted by the respective parties to the
Development Tasks during a Development Period.
N. "DEVELOPMENT EXCESS" shall mean the amount which a party would have
borne or paid under Section 2.5, had it participated fully in a Development
Period, but did not pay due to its election, duly made as provided herein, not
to participate fully in such Development Period.
O. "DEVELOPMENT PERIOD" shall mean, with respect to each Designated
Product, the period from the designation of such Designated Product as such by
the parties (or as stated in Section 2.6), through the earliest of
1. the successful completion of the Development Tasks therefor;
2. the termination of the Development Period for such Designated Product
pursuant to Section 5.2; or
3. the termination of this Agreement as provided herein.
P. "DEVELOPMENT TASK(S)" shall mean, with respect to each Designated
Product:
1. those tasks or milestones, together with estimated completion dates or
durations therefor, as shall be designated from time to time by
Committee Action as being, within industry norms and standards,
sufficient evidence of a potentially useful and marketable product that
the next steps in the
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41
development of such product would be Certification Tasks, or (where no
Certification Tasks have then been designated by Committee Action)
large-scale clinical trials to determine the safety and efficacy of
such Designated Product; and
2. the designation by Committee Action of an initial set of Certification
Tasks and an initial Certification Budget for such Designated Product.
In most instances, the Development Tasks will include (without limitation)
formulation development, in vitro dissolution studies and/or animal studies and
bioavailability studies, as well as small-scale clinical trials conducted under
an Investigational New Drug Application ("IND") filed with the FDA, of the sort
called "Phase I Clinical Trials" and "Phase II Clinical Trials" in order to
demonstrate that, within the scope of such studies, the Designated Product is
shown, when administered BID, to be a stable formulation having substantially
equigesic effect in blood level studies to the targeted dosage strength of the
relevant immediate release Oxymorphone product. In most cases, the large-scale
trials to follow during the Certification Period would be of the sort called
"Phase III Clinical Trials" in the FDA context. However, the applicable
Development Tasks may be defined and altered in specific cases by Committee
Action, whether or not in conformity with the above described usual case as now
anticipated.
Q. "ELIGIBLE PARTY" shall mean:
1. with respect to the first proposed Certification Period for a
particular Designated Product (or group of Designated Products that
were developed in the same Development Period), a party to this
Agreement that participated in the Development Period for the relevant
Designated Product(s) and that did not, as to such Development Period,
exercise its rights to cease its participation hereunder; and
2. with respect to any other proposed Certification Period, a party to
this Agreement that participated in the Development Period and the
first Certification Period for the relevant Designated Product (or
group of Designated Products developed in such Development Period), and
that did not, as to either of such Development Period or such first
Certification Period, exercise its rights to cease its participation
hereunder.
R. "ENDO IMPROVEMENT TECHNOLOGY" shall mean any and all technology and
rights of Endo, or in which Endo or any of its Affiliates or sublicensees
otherwise has any rights or interests during the term of this Agreement, to the
extent the same are improvements, modifications, alterations, or enhancements to
any of the inventions covered by the PPG Patents, PPG's Confidential Technology,
or the TIMERx Production Technology, and to the extent made or discovered, or
disclosing
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42
inventions made or discovered, prior to the end of the applicable Certification
Period, together with all United States and foreign intellectual property and
other rights and interests of Endo and its Affiliates and sublicensees thereto
and therein, including without limitation patents, trade secrets, copyright,
periods of market exclusivity, and other related rights or interests.
S. "ENDO TECHNOLOGY" shall mean any and all technology and rights of Endo,
or in which Endo or any of its Affiliates or sublicensees otherwise has any
rights or interests during the term of this Agreement, which are used or
contemplated to be used in connection with the activities contemplated under
this Agreement, including without limitation all Oxymorphone rights and
technology (and other technology, rights and properties) to the extent the same
directly relate to, are desirable for, or are necessary or useful for, the
production, storage and/or marketing of one or more Designated Product(s) and
any and all Endo Improvement Technology, together with all United States and
foreign intellectual property and other rights and interests of Endo and its
Affiliates and sublicensees thereto and therein, including without limitation
patents, trade secrets, copyright, periods of market exclusivity, and other
related rights or interests.
T. "ENDO TRADEMARK(S)" shall mean those names, symbols and or characters
described in Exhibit 1.20 hereto, as the same may be amended from time to time
during the term of this Agreement by Endo on at least six (6) months' prior
written notice to PPG, that are owned by Endo and that have been designated by
it for use in conjunction with PPG's packaging and promotion of a Designated
Product hereunder, pursuant to Section 8.
U. "ENDO TEST AND REGULATORY DATA" shall mean any and all test data, test
designs and protocols, clinical studies and results thereof, government licenses
and applications therefor, government certifications and findings, and related
materials, information and rights (including without limitation information
regarding bioavailability and bioequivalence, and any adverse drug reactions),
developed, commissioned or otherwise obtained by Endo or any of its Affiliates
or sublicensees during the term of this Agreement for the uses intended by this
Agreement relating to TIMERx, Endo Technology, Joint Technology, the Designated
Product, PPG Patents, Joint Technology, TIMERx Production Technology and/or
PPG's Confidential Technology.
V. "ESCALATION OFFICER" shall mean the President and Chief Executive
Officer of PENWEST, LTD., (currently Tod Hamachek) and the President and Chief
Executive Officer of Endo (currently Carol Ammon) , and the persons holding such
positions from time to time.
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43
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
W. "ESCALATION PROCEDURE" shall mean the decision making procedure
described in Section 12, whereby the parties intend to avoid deadlocks between
them and undue delays reaching mutually-acceptable Committee Action(s).
X. "EXCLUSIVITY PERIOD" shall mean, with respect to each Designated
Product:
1. with respect to any member nation of the European Union (and any other
nation in the Territory in which applicable law would restrict the
permissible duration of a period of exclusivity to the life of
applicable patents), the Exclusivity Period is the period during the
License Term for such Designated Product in such nation, until there
are no longer any PPG Patents (exclusive of those described in Section
1.38.3) or Joint Technology Patents in that nation applicable to the
Designated Product or, if later, until all of PPG's Confidential
Technology provided to Endo hereunder has been disclosed without
restriction to the public (but in this case, where there are no longer
any such PPG Patents and there are no Joint Technology Patents in that
nation applicable to the Designated Product, the Exclusivity Period
will not last longer in such nation than ten years from the first
Approval for such Designated Product in any nation in the European
Union); and
2. with respect to any other nation, the Exclusivity Period is coterminous
with the License Term,
except where the Exclusivity Period is shortened as otherwise provided in this
Agreement.
Y. "FACILITIES CERTIFICATIONS" shall mean those governmental
certifications, licenses and other approvals however designated held or obtained
at any time by or for Endo or its Affiliates or sublicensees, and for the
facilities of any of them, that are required for the legal production,
transportation, storage, testing and or packaging of Oxymorphone products,
whether for commercial or research use or sale, or otherwise.
Z. "FORMULATED TIMERX" shall mean TIMERx *********************************
**************************************************************************.
AA. "FORMULATED TIMERX PRICE" shall mean *********************************
*******************************************************************************
************************************************************ to be provided to
Endo or its Affiliates or sublicensees hereunder, as shall be determined and
adjusted ********** ***********************; provided, however, that any amounts
paid or payable by PPG for third-party royalties (or for materials acquisition
costs to the extent attributable to third-party intellectual properties and
essentially equivalent to royalties) which are the responsibility of PPG under
Sections 9.5.1 or 9.5.2 *********************************
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44
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
********************************. If any patent applications are filed or
prosecuted by PPG on Joint Technology, as provided in Section 6.2, the
reasonable costs thereof, and of the maintenance of any patents that issue
therefrom, shall (to the extent not reflected in a Development Budget or a
Certification Budget and the reconciliations under Sections 2.5 or 3.7) be part
of the allocable indirect costs of the manufacture or acquisition of any
Formulated TIMERx provided for use in a Designated Product that would be
disclosed in whole or in part in such patent or patent application.
BB. "INITIAL DEVELOPMENT PERIOD" shall mean the Development Period for the
Initial Designated Product(s), to be planned and conducted as described in
Section 2.6.
CC. "JOINT TECHNOLOGY" shall mean any and all inventions, improvements,
modifications, alterations, or enhancements that are made jointly by Endo or any
of its Affiliates, on the one hand, and PPG or any of its Affiliates, on the
other hand, during and in the course of the parties' cooperative development
activities under or in support of this Agreement, together with all United
States and foreign intellectual property and other rights and interests of the
parties and their respective Affiliates thereto and therein, including without
limitation patents, trade secrets, copyright, periods of market exclusivity, and
other related rights or interests, to the extent the same remain protected by
any such rights and interests from being used freely by others.
DD. "JOINT TECHNOLOGY PATENT(S)" shall mean any United States patents and
foreign equivalents and United States and foreign patent applications and all
divisions, continuations, continuations-in-part, reissues, or extensions
thereof, any periods of marketing exclusivity relating thereto, and any letters
patent that issue thereon, to the extent the same claim any Joint Technology.
EE. "LICENSE TERM" shall mean, with respect to each Designated Product in
each nation in the Territory, the cumulative period covered by the Development
Period, the Certification Period, and the Marketing Period.
FF. "MANUFACTURING AND MARKETING PLAN(S)" shall mean, with respect to each
Designated Product and as to those Specified Nation(s) specified in such
Manufacturing and Marketing Plan, a detailed business, manufacturing, and
marketing plan of the sort prepared internally and used by Endo and/or its
Affiliates (or, if a license to PPG under Section 6.9 is applicable, and/or in
the circumstances described in Section 4.2 or 4.3, such a plan of the sort
prepared and used internally by PPG and/or its designated third-party marketer)
with respect to their drug products generally, including without limitation
quantifiable and verifiable plans, goals and milestones for the levels and types
of resources, personnel, promotion, advertising, detailing, and other efforts to
be devoted to the manufacturing, packaging, quality control, and marketing of
such Designated Product, and with
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45
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
respect to the measures of the degree of success achieved in doing so, including
without limitation target dates for the full-scale market launch of the
Designated Product in each of the Specified Nation(s), and Minimum Net
Realization(s) for each of the Specified Nation(s) in such Manufacturing and
Marketing Plan (and related goals and projections for pretax profitability).
Each Manufacturing and Marketing Plan shall also describe the schedule and
methods to be used to effect the revision thereof and the adoption of
substituted Manufacturing and Marketing Plans no less often than annually,
through Committee Action.
GG. "MARKETING PERIOD" shall mean, with respect to each Designated Product
and as to each nation in the Territory, the period beginning at the end of the
Certification Period for such Designated Product in such nation and ending on
the earliest of:
1. the twentieth (20th) anniversary of the end of such Certification
Period or, if later, the time at which there are no longer any PPG
Patents or Joint Technology Patents applicable to such Designated
Product in such nation, to the extent such patents disclose inventions
made prior to the end of such Certification Period; or
2. the termination of the Marketing Period for such Designated Product in
such nation pursuant to Section 5.7 or of the License Term for such
Designated Product in such nation pursuant to Section 6.9.1; or
3. the termination of this Agreement as provided herein.
HH. "MINIMUM NET REALIZATION" shall mean, with respect to each Designated
Product and each Specified Nation or group of Specified Nations under the
then-current Manufacturing and Marketing Plan therefor, a minimum amount of Net
Realization generated from sales of such Designated Product in such Specified
Nation(s) (as will be stated in such Manufacturing and Marketing Plan). The
Minimum Net Realization(s) shall be set at levels at least as high as those that
Endo and its Affiliates would expect to obtain from the marketing of their most
prominently marketed drug products, taking into account the level and nature of
competitive products, the method of promotion and marketing, the Net
Realizations specified and obtained for such Designated Product in other
nations, and other factors as shall be determined by Committee Action.
II. "NET REALIZATION" shall mean that portion of the amounts paid or
payable (whether in cash, cash equivalents, current or deferred consideration,
barter, or other monetary or in-kind compensations or considerations of any
nature) attributable to the sale or other distribution of a Designated Product,
or to the grant of any rights to make, market, or otherwise exploit a Designated
Product, which is to be treated hereunder as a net amount realized by the actual
or intended recipient of the same, *******************************************
as provided under a
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46
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Manufacturing and Marketing Plan approved by Committee Action and appropriately
attributable thereto (including without limitation the Formulated TIMERx Price
paid to PPG for the Formulated TIMERx incorporated therein, or if Section 6.9.5
becomes applicable, the amounts paid to Endo thereunder), all to be determined
in accordance with the accounting and attribution standards and principles
described in Exhibit 1.35, as the same may be amended from time to time by
Committee Action.
JJ. "OXYMORPHONE PRICE" shall mean ***************************************
*******************************************************************************
******************************************************** to be provided to PPG
or its Affiliates or sublicensees hereunder, as shall be determined and adjusted
************* ***********************; provided, however, that any amounts paid
or payable by Endo for third-party royalties (or for materials acquisition costs
to the extent attributable to third-party intellectual properties and
essentially equivalent to royalties) which are the responsibility of Endo under
Section 9.6 ******************************************************************.
KK. "Patent Review" shall mean Endo's and its counsel's review, during the
first 30 days after the Effective Date, of the PPG Patents listed in Exhibit
1.38, to confirm to Endo's reasonable satisfaction that the same are as
contemplated to the extent relevant to this Agreement.
LL. "PPG PATENTS" shall mean:
1. those United States patents and foreign equivalents listed in Exhibit
1.38 and all divisions, continuations, continuations-in-part, reissues,
or extensions thereof, any periods of marketing exclusivity relating
thereto;
2. (i) those United States and foreign patent applications pending as of
the Effective Date that are owned by PPG, to the extent the same would,
if issued as patent(s), in the absence of the licenses granted
hereunder be infringed by Endo's production, use, sale, offer for sale,
or import of a Designated Product as contemplated under this Agreement;
and (ii) subject to Section 6.8.6, any other patent rights owned or
controlled and sublicenseable by PPG, to the extent the same would in
the absence of the licenses granted hereunder be infringed by Endo's
production, use, sale, offer for sale, or import of a Designated
Product as contemplated under this Agreement and to the extent
disclosing inventions made or discovered prior to the end of the
applicable Certification Period; and
3. subject to Section 6.8.6, PPG's rights under United States and foreign
patents in the Territory, if any, to the extent disclosing any of PPG's
improvements, modifications, alterations, or enhancements to any of the
inventions covered by
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the PPG Patents that are made for or are otherwise related to or useful
with one or more of the Designated Product(s) prior to the end of the
applicable Certification Period.
MM. "PPG TEST AND REGULATORY DATA" shall mean any and all test data, test
designs and protocols, clinical studies and results thereof, government licenses
and applications therefor, government certifications and findings, and related
materials, information and rights (including without limitation information
regarding bioavailability and bioequivalence, and any adverse drug reactions),
developed, commissioned or otherwise obtained by PPG or any of its Affiliates
during the term of this Agreement relating to TIMERx, PPG Patents, and/or TIMERx
Production Technology and that are developed for or are otherwise related to or
useful with a Designated Product.
NN. "PROOF OF PRINCIPLE STUDIES" shall mean those early-stage in vitro
studies to be mutually agreed upon by the parties and conducted by them within
the first 120 days of the Initial Development Period as part of the Initial
Development Tasks, and directed at a determination of whether there is physical
compatibility between Oxymorphone ADS and TIMERx and whether it is likely, as a
technical matter of the pharmaceutical sciences, that at least one Initial
Designated Product can be developed.
OO. "PPG TRADEMARK(S)" shall mean those names, symbols and or characters
described in Exhibit 1.20 hereto, as the same may be amended from time to time
during the term of this Agreement by PPG on at least six (6) months' prior
written notice to Endo, that are owned by PPG and that have been designated by
it for use in conjunction with Endo's packaging and promotion of a Designated
Product hereunder, pursuant to Section 8.
PP. "PROJECT CONTACT(S)" shall mean the persons appointed by each party to
serve as contact persons between the parties from time to time in relation to
this Agreement (in addition to those representatives of the parties on the
Alliance Committee, who may or may not also contemporaneously be Project
Contact(s)). The initial Project Contact for PPG for business matters is Michael
Mallon, and the initial Project Contact for PPG for technical and scientific
matters is Dr. Dileep Bhagwat. The initial Project Contact for Endo for business
matters is Osagie Imasogie, and the initial Project Contact for Endo for
technical and scientific matters is Dr. D. Kao. Each party shall promptly notify
the other party of any substitution of other personnel as its Project
Contact(s). Each party may select and supervise its other project staff as
needed.
QQ. "REGULATORY AUTHORITY" shall mean the competent authority for each
nation of the Territory or for any relevant grouping of nations legally
responsible for authorizing the sale or supply of drug products in that nation
or group.
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RR. "ROYALTIES" shall mean the royalties payable to PPG pursuant to
Section 4.5 hereof, or the royalties payable to Endo pursuant to Section 6.9, if
that section becomes applicable.
SS. "SPECIFICATIONS" shall mean such standards and analytical methods
established by Committee Action from time to time with respect to particular
Designated Products and the components thereof (including without limitation the
Formulated TIMERx).
TT. "SPECIFIED NATION(S)" shall mean, as applicable, those nations
specified herein or by Committee Action as the nation(s) in which or as to which
the Certification Tasks under the respective Certification Period will be
conducted, and/or those nations specified in a Manufacturing and Marketing Plan
as nation(s) in which the manufacturing, marketing, and promotional activities
for a Designated Product will be conducted.
UU. "TERRITORY" shall initially mean all nations of the world, but may be
reduced as to particular nations and particular Designated Products, pursuant to
Section 5.7 or Section 6.9.1.
VV. "TIMERX PRODUCTION TECHNOLOGY" shall mean PPG's rights under the PPG
Patents and any and all other patents, patent applications, and other technology
belonging to PPG or which PPG has the right to practice and to sublicense from
time to time during the term of this Agreement that directly relate to, are
desirable for, or are necessary or useful for the production of, Formulated
TIMERx for use in a Designated Product.
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EXHIBIT 1.1
Affiliates
PPG Affiliates:
PENWEST, LTD.
Edward Mendell Co., Inc.
Penford Products Co.
Edward Mendell GmBH
Edward Mendell Finland OY
PENWEST Foreign Sales Corporation
Endo Affiliates: None
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EXHIBIT 1.20
Trademarks
Endo Trademarks:
Endo
Numorphan
PPG Trademarks:
TIMERx(R) Oral Delivery System
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 1.35
Accounting and Attribution Standards and Principles
NET SALES **********************************************************
**********************************************************
**********************************************************
**********************************************************
*****************************.
GRANTS OF RIGHTS Amount realized from grant of rights to make, market or
otherwise exploit a Designated Product.
MANUFACTURING
COSTS
Bulk ADS The Oxymorphone Price for the Oxymorphone ADS used.
Cost"
TIMERx The Formulated TIMERx Price for the Formulated TIMERx used.
Excipient
Dose Form ***********************************************************
Finishing ***********************************************************
& ***********************************************************
Packaging ************** that are approved by Committee Action.
DEVELOPMENT COSTS
Dosage ************************************ approved by Committee
Form Action that is applied to ********************************.
MARKETING
EXPENSES
Premarketing Expenses incurred ****************************************
**********************************************************
**********************************************************
******************************* Expenses are subject to
Alliance Committee review and approval by Committee Action
on a quarterly basis.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 1.35, CONTINUED
Sales & Product As mutually agreed, but not to be duplicative with
Management Field Selling costs defined below, subject to
Alliance Committee review and approval by Committee
Action on a quarterly basis.
Field Selling Common Standard Selling Cost per detail multiplied by
number of details subject to Alliance Committee
review and approval by Committee Action on a
quarterly basis.
Advertising & ***************************************************
Promotion (to the extent not already included in Sales &
Product Management costs defined above)
********************************* subject to Alliance
Committee review and approval by Committee Action on
a quarterly basis.
Commissioned Actual reasonable commissions, if applicable.
Sales Rep.
FINISHED PRODUCT
DISTRIBUTION
EXPENSE (FPDE)
Variable and ****************************************************
Fixed ************************.
POST REGISTRATION Studies required by the FDA or other applicable
STUDIES Regulatory Authority. Direct costs will be charged.
Studies are subject to Alliance Committee review and
approval by Committee Action.
GENERAL & *****************************************************
ADMIN. EXPENSES *****************************************************
(G&A) **************************************************,
and as reviewed and approved by Committee Action on a
quarterly basis.
TOTAL COST OF ****************************************************
SALES ***************************************************.
Note, however, that the Total Costs of Sales will not
include as appropriately attributable expenses or
costs any amounts paid or payable by a party for
third-party royalties to the extent the same would be
the responsibility of the paying party under Section
9.5.1, 9.5.2, or 9.6 of the Agreement.
NET REALIZATION *************************************************.
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EXHIBIT 1.38
PPG Patents
Patent
Number Date Title Inventor
- ----------------------------------------------------------------------------------------------
U.S. Patents
- ------------
1. 4,994,276 2/19/91 Directly Compressible Sustained A. Baichwal
Release Excipient J. Staniforth
2. 5,128,143 7/7/92 Sustained Release Excipient and A. Baichwal
Tablet Formulation J. Staniforth
3. 5,135,757 8/4/92 Compressible Sustained Release A. Baichwal
Solid Dosage Forms J. Staniforth
4. 5,169,639 12/8/92 Controlled Release Verapamil A. Baichwal
Tablets J. Staniforth
5. 5,330,761 7/19/94 Bioadhesive Tablet for Non- A. Baichwal
Systemic Use Products
6. 5,399,358 3/21/95 Sustained Release Formulations A. Baichwal
for 24 Hour Release of J. Staniforth
Metoprolol
7. 5,399,359 3/21/95 Controlled Release Oxybutynin A. Baichwal
Formulations T. McCall
8. 5,399,362 3/21/95 Once-A-Day Metoprolol Oral A. Baichwal
Dosage Form T. McCall
9. 5,455,046 10/3/95 Sustained Release Heterodisperse A. Baichwal
Hydrogel Systems for Insoluble
Drugs
10. 5,472,711 12/5/95 Agglomerated Hydrophilic A. Baichwal
Complexes with Multi-Phasic J. Staniforth
Release Characteristics
11. 5,478,547 12/26/95 Agglomerated Hydrophilic A. Baichwal
Complexes with Multi-Phasic J. Staniforth
Release Characteristics
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12. 5,512,297 4/30/96 Sustained Release Heterodisperse A. Baichwal
Hydrogel Systems for Insoluble
Drugs
13. 5,554,387 9/10/96 Sustained Release Heterodisperse A. Baichwal
Hydrogel Systems for Insoluble
Drugs
14. 5,612,053 3/18/97 Controlled Release Insufflation A. Baichwal
Carrier for Medicaments J. Staniforth
Japanese Patents
- ----------------
1. 1903060 2/8/95 Directly Compressible Sustained A. Baichwal
Release Excipient J. Staniforth
2. 2014960 4/12/95 Controlled Release Verapamil A. Baichwal
Tablet J. Staniforth
Australian Patents
- ------------------
1. 649163 8/1/92 Controlled Release Verapamil A. Baichwal
Tablet J. Staniforth
2. 623182 10/12/9 Directly Compressible Sustained A. Baichwal
Excipient J. Staniforth
3. 669531 10/1/96 Agglomerated Hydrophilic A. Baichwal
Complexes with Multi-Phasic J. Staniforth
Release Characteristics
Europe (EPO) Patents
- --------------------
1. EPO360562* 7/28/93 Directly Compressible Sustained A. Baichwal
Release Excipient J. Staniforth
(*subject to opposition proceeding; patent upheld by EPO Opposition Division now
under appeal.
2. EPO550737 1/22/97 Controlled Release Verapamil A. Baichwal
Tablet J. Staniforth
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EXHIBIT 2.6
Initial Designated Products
Oxymorphone SE, all oral tablet dosage strengths
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