EXHIBIT NO. 10.1
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AMENDED AND RESTATED
INTEGRILIN AGREEMENT
AMONG
MILLENNIUM PHARMACEUTICALS, INC.,
SCHERING CORPORATION
AND
SCHERING-PLOUGH, LTD.
JULY 22, 2005
TABLE OF CONTENTS
Page
ARTICLE 1 INTRODUCTION...............................................1
ARTICLE 2 DEFINITIONS................................................3
ARTICLE 3 MANAGEMENT AND DILIGENCE...................................8
3.1 Elimination of JSC...................................8
3.2 Project Coordinators.................................9
3.3 Development and Commercialization....................9
ARTICLE 4 MANUFACTURE AND SUPPLY....................................10
4.1 Manufacture.........................................10
ARTICLE 5 REPRESENTATIONS AND COVENANTS.............................10
5.1 Competitive Products................................10
5.2 Mutual Authority....................................12
5.3 Rights in Technology; Agreements with Third Parties.12
5.4 Disclaimer..........................................12
ARTICLE 6 COMPENSATION..............................................12
6.1 United States Restructuring Fee and Royalties.......12
6.2 Royalties in Canada.................................16
6.3 Royalty Outside the United States and Canada........16
6.4 Royalty Reductions..................................16
6.5 Term of Royalties Payable to a Party................18
6.6 Royalty Payments by Millennium; Termination Fee.....19
6.7 Royalty Reports and Payments........................20
6.8 Taxes...............................................21
6.9 Blocked Currency....................................21
6.10 Sublicenses.........................................21
6.11 Non-Monetary Consideration and Cross Border
Transactions........................................21
6.12 Foreign Exchange....................................22
6.13 Payments to or Reports by Affiliates................22
6.14 Cost Sharing of EACS Savings........................22
6.15 Changes to Accounting Procedures....................22
ARTICLE 7 INFORMATION AND REPORTS...................................23
7.1 Information Disclosure..............................23
7.2 Record Keeping and Audit............................24
7.3 Medical Inquiries...................................24
7.4 Publications........................................25
ARTICLE 8 LICENSES..................................................25
8.1 Patent Licenses To Schering.........................25
8.2 Patent Licenses To Millennium.......................26
8.3 Importation.........................................26
8.4 Special Patent License to Schering..................26
8.5 Nonexclusive Know-how License To Schering...........26
8.6 Nonexclusive Know-how License To Millennium.........26
8.7 Third Party Technology..............................27
8.8 License Grants to Schering Entities.................27
8.9 Exclusive Rights; Use Outside Field.................27
ARTICLE 9 PATENTS; INFRINGEMENT; TRADEMARKS.........................28
9.1 Patentable Inventions...............................28
9.2 Settlement of Third Party Claims for INTEGRILIN
Products............................................28
9.3 No Infringing Conduct...............................30
9.4 Infringement by Third Parties.......................30
9.5 Product Trademarks..................................31
9.6 Infringement of Trademarks..........................32
9.7 Validity and Enforceability Challenges..............33
ARTICLE 10 CONFIDENTIALITY...........................................33
10.1 Treatment of Confidential Information...............33
10.2 Publicity...........................................34
10.3 Use of Information for Related Products.............35
ARTICLE 11 EXPORT CONTROL............................................35
11.1 Export Control......................................35
ARTICLE 12 TERM AND TERMINATION......................................35
12.1 Term................................................35
12.2 Termination For Breach..............................35
12.3 Effect of Termination for Failure to Use Diligent
or Commercially Reasonable Efforts..................36
12.4 Effect of Termination for Other Breach..............37
12.5 Effect of Breach of, or Disruption under the
Supply Agreement....................................37
12.6 Survival............................................38
ARTICLE 13 INDEMNIFICATION...........................................38
13.1 Indemnification by Schering.........................38
13.2 Indemnification by Millennium.......................38
13.3 Relationship to Other Agreements....................39
13.4 Pre-Closing Liability...............................39
13.5 Procedures..........................................39
13.6 Settlements.........................................39
13.7 No Consequential Damages............................40
ARTICLE 14 DISPUTE RESOLUTION; GOVERNING LAW.........................40
14.1 Disputes............................................40
14.2 Alternative Dispute Resolution......................40
14.3 Governing Law.......................................41
ARTICLE 15 MISCELLANEOUS..........................................\..41
15.1 Entire Agreement; Amendment.........................41
15.2 Bankruptcy..........................................42
15.3 Force Majeure.......................................43
15.4 Notices.............................................43
15.5 Consents Not Unreasonably Withheld or Delayed.......44
15.6 Maintenance of Records..............................44
15.7 United States Dollars...............................44
15.8 Independent Contractors.............................44
15.9 No Strict Construction..............................44
15.10 Assignment..........................................44
15.11 Performance by Affiliates and Local Operating
Entities............................................45
15.12 Counterparts........................................45
15.13 Further Actions.....................................45
15.14 Severability........................................45
15.15 Ambiguities.........................................46
15.16 Headings............................................46
15.17 No Waiver...........................................46
SCHEDULES
Schedule 2.29 Millennium Patents as of the Execution Date
Schedule 2.39 Schering Patents as of the Execution Date
Schedule 6.5(a)(ii) Date of First Commercial Sale of INTEGRILIN Product
Appendix A Press Release
AMENDED AND RESTATED
INTEGRILIN AGREEMENT
THIS AMENDED AND RESTATED INTEGRILIN AGREEMENT is made effective as of
the 22 day of July 2005, (the "Execution Date") by and among MILLENNIUM
PHARMACEUTICALS, INC., a Delaware corporation having its principal place of
business at 40 Landsdowne Street, Cambridge, MA 02139, U.S.A. ("Millennium"),
SCHERING CORPORATION, a New Jersey corporation having its principal place of
business at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033, U.S.A.
("Schering Corporation") and SCHERING-PLOUGH, LTD., a corporation organized
under the laws of Switzerland having its principal place of business at
Weystrasse 20, P.O. Box, CH-6000, Lucerne 6, Switzerland ("Schering Ltd."), each
on behalf of itself and its Affiliates. Schering Corporation and Schering Ltd.
are referred to herein collectively as "Schering." Millennium and Schering are
sometimes referred to herein individually as a "Party" and collectively as the
"Parties," and references to "Millennium" and "Schering" shall include their
respective Affiliates.
ARTICLE 1
INTRODUCTION
1.1 Schering Corporation, Schering Ltd. and COR Therapeutics, Inc., a
Delaware corporation formerly having its principal place of business at 256 East
Grand Avenue, South San Francisco, California 94080, U.S.A. ("COR"), entered
into a Collaboration Agreement dated April 10, 1995, as amended and supplemented
by (a) an Amendment to Collaboration Agreement among COR, Schering Corporation
and Schering Ltd., dated December 23, 1998, (b) a Second Amendment to
Collaboration Agreement among COR, Schering Corporation and Schering Ltd., dated
November 5, 1999, (c) an Addendum to Collaboration Agreement among Millennium,
Schering Corporation and Schering Ltd., effective June 1, 2003, and (d) the
European Commercialization Agreement (the "Collaboration Agreement"). In
addition, the Parties entered into the following side letters that relate to the
Collaboration Agreement: (i) a side letter dated November 3, 2003 and pertaining
to the funding and performance of the early ACS clinical study; (ii) a side
letter dated November 30, 2004 pertaining to the Additional Field Force June 1,
2003 Addendum to the Collaboration Agreement; (iii) a letter dated April 30,
2004 related to the Pharmacogenomics Study in connection with the Early ACS
Study; and (iv) the Biomarker Study letter agreement dated February 20, 2004.
1.2 The Collaboration Agreement provided Schering the opportunity to
participate in the worldwide development and commercialization of INTEGRILIN(R)
(eptifibatide) Injection, a small peptide pharmaceutical that COR had discovered
and was developing.
1.3 On February 12, 2002, Millennium acquired COR by merger, succeeding COR
in the Collaboration Agreement.
1.4 The Parties entered into an Agreement About European Commercialization
of Integrilin, dated June 21, 2004, as amended in writing prior to the Execution
Date (the "European Commercialization Agreement"), pursuant to which the Parties
agreed to terminate Schering's rights and obligations with respect to the
commercialization and manufacturing of the INTEGRILIN Product (as defined below)
in and for the European Territory (as defined below), Schering agreed to perform
certain obligations and activities thereunder, and Millennium agreed to make
certain royalty payments to Schering based on sales of INTEGRILIN Products in
European Territory and to perform certain other obligations thereunder.
1.5 Upon Closing (as defined below) of the transactions provided for in
this A-R Agreement, the Parties desire that this A-R Agreement shall amend and
restate the Collaboration Agreement to govern the future relationship of the
Parties (other than the terms of the European Commercialization Agreement and
the Collaboration Agreement that expressly survive under the terms of this A-R
Agreement) in order to (a) terminate the continuing co-development of INTEGRILIN
Products by the Parties and transfer such responsibility to Schering; (b)
terminate the co-promotion of INTEGRILIN Products by the Parties in the United
States (and Millennium's option to co-promote INTEGRILIN Products in Canada) and
transfer to Schering (i) exclusive promotion and commercialization rights in the
United States and Canada, and (ii) non-exclusive manufacturing and development
rights worldwide; (c) provide for the continuing manufacture and supply of the
INTEGRILIN Product by Millennium to Schering for the Schering Territory (as
defined below), subject to certain rights of the Parties to be set forth in a
Supply Agreement (as defined below) to transfer such activities to Schering; (d)
transfer the marketing authorizations and regulatory responsibilities for the
INTEGRILIN Products in the United States and Canada from Millennium to Schering;
and (d) provide for Schering to continue to perform global pharmacovigilance
matters in cooperation with GSK (as defined below), all on the terms and
conditions set forth herein.
1.6 Millennium has agreed to provide certain transition services and to
supply INTEGRILIN Products to Schering. The Parties have entered into (a) a
Transition Services Agreement dated as of July 22, 2005 (the "Transition
Services Agreement") and (b) a Supply Agreement dated as of the Closing (the
"Supply Agreement"). The Transition Services Agreement is intended to provide
for an orderly and efficient transition of responsibilities and activities from
Millennium to Schering at and following Closing in a manner that facilitates the
continued development and commercialization of INTEGRILIN Products, and the
Supply Agreement is intended to provide for continued INTEGRILIN Product supply
and allow for an orderly transition of supply chain responsibility from
Millennium to Schering following the completion of activities pertaining to the
selection and approval of a second supplier of Compound.
1.7 Following the Closing, the ongoing relationship among the Parties
relating to INTEGRILIN Products will be governed by (a) this A-R Agreement and
the other Transaction Agreements, and (b) solely with respect to the European
Territory, the European Commercialization Agreement and the relevant provisions
of the Collaboration Agreement as in effect immediately prior to Closing as
amended by that certain letter agreement between the Parties with respect to the
European Territory dated as of the Closing Date (the "European Side Agreement").
ARTICLE 2
DEFINITIONS
The following terms shall have the following meanings as used in this
A-R Agreement:
2.1 "ADD ON STUDIES" means the studies related to the Early ACS Study that
are described in (a) the Pharmacogenomics Study letter agreement between the
Parties dated April 30, 2004; and (b) the Biomarker Study letter agreement
between the Parties dated February 20, 2004, each as may be amended by Schering
from time to time pursuant to Section 3.3.
2.2 "A-R AGREEMENT" means this AMENDED AND RESTATED INTEGRILIN AGREEMENT,
as amended from time to time in accordance with Section 15.1.
2.3 "AFFILIATE" means an entity that, directly or indirectly, through one
or more intermediaries, controls, is controlled by or is under common control
with Millennium or Schering. The Parties recognize that in certain countries an
Affiliate may not be majority-owned by a Party.
2.4 "ASSUMED CONTRACTS" means the agreements assumed by Schering at the
Closing or at the Contract Assignment Date, as the case may be, as defined, and
provided for, in the Transition Services Agreement.
2.5 "CLINICAL DEVELOPMENT PLAN" means any development plan furnished by
Schering pursuant to Section 7.1, as may amended by Schering from time to time
pursuant to Sections 3.3 and 7.1.
2.6 "CLOSING" has the meaning assigned to it in the Transition Services
Agreement.
2.7 "CLOSING DATE" has the meaning assigned to it in the Transition
Services Agreement.
2.8 "COLLABORATION AGREEMENT" has the meaning assigned to it in Section
1.1.
2.9 "COMPETITIVE PRODUCT" means a product incorporating a GP IIb-IIIa
inhibitor, other than the INTEGRILIN Product(s). As used herein, the term "GP
IIb-IIIa inhibitor" means a compound that is a competitive antagonist of the
binding of natural ligands to glycoprotein (GP) IIb-IIIa and inhibits human
platelet aggregation in platelet-rich plasma induced by ADP with an IC30 of less
than one micromolar.
2.10 "COMPOUND" means the compound known as eptifibatide, with the chemical
composition: L-Cysteinamide,N6-(aminoiminomethyl)-N2-(3-mercapto-1-oxopropyl)-L-
lysylglycyl-L-alpha-aspartyl-L-tryptophyl-L-prolyl-,cyclic (1->6)-disulfide
(9CI).
2.11 "CONTROL" means possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of any agreement
or other arrangement with any Third Party.
2.12 "COR" has the meaning assigned to it in Section 1.1.
2.13 "DILIGENT EFFORTS" means the carrying out of obligations requiring
Diligent Efforts in a sustained manner consistent with the efforts a Party
devotes to a product of similar market potential, profit potential or strategic
value resulting from its own research efforts, based on conditions then
prevailing. Diligent Efforts requires that: (i) each Party promptly assign
responsibility for such obligations to specific employee(s) who are held
accountable for progress and monitor such progress on an on-going basis, (ii)
each Party set and consistently seek to achieve specific and meaningful
objectives for carrying out such obligations, and (iii) each Party consistently
make and implement decisions and allocate resources designed to advance progress
with respect to such objectives.
2.14 "EARLY ACS STUDY" means the study described in the letter agreement
between the Parties dated November 3, 2003 and pertaining to the funding and
performance of the Early ACS clinical study, as such study may amended by
Schering from time to time pursuant to Section 3.3.
2.15 "EUROPEAN TERRITORY" means Albania, Andorra, Armenia, Austria,
Azerbaijan, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus,
Czech Republic, Denmark, Estonia, Finland, France, Germany, Georgia, Gibraltar,
Greece, Hungary, Iceland, Ireland, Italy, Kazakhstan, Kyrgyzstan, Latvia,
Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Monaco, The
Netherlands, Norway, Poland, Portugal, Romania, Russia, San Marino, Serbia &
Montenegro, Slovakia, Slovenia, Spain, Sweden, Switzerland, Tajikistan, Turkey,
Turkmenistan, Ukraine, United Kingdom, Uzbekistan, Vatican State, and any other
countries that may arise by succession, subdivision, consolidation or
reconstitution of these countries.
2.16 "EUROPEAN COMMERCIALIZATION AGREEMENT" has the meaning assigned to it
in Section 1.4.
2.17 "EUROPEAN SIDE AGREEMENT" has the meaning assigned to it in Section
1.7.
2.18 "EXISTING INTEGRILIN PRODUCT" means the form of INTEGRILIN Product
approved for sale in the United States as of the Closing Date.
2.19 "FULL RECOVERY OF THE BUSINESS" has the meaning assigned to it in
Section 6.1(b)(ii).
2.20 "GOVERNMENTAL AUTHORITY" means any and all foreign, federal, state or
local governments, governmental institutions, public authorities and
governmental entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including, but not limited to, departments, boards,
bureaus, commissions, agencies, courts, administrations and panels, and any
divisions or instrumentalities thereof, whether permanent or ad hoc and whether
now or hereafter constituted or existing.
2.21 "GSK" means Glaxo Group Limited, d/b/a GlaxoSmithKline, and any of its
permitted successors, assigns, sublicensees and affiliates under the GSK
Agreements.
2.22 "GSK AGREEMENTS" means (i) License, Development and Commercialization
Agreement between GSK and Millennium, dated as of June 22, 2004 ("GSK LICENSE
AGREEMENT"), and (ii) the Supply Agreement between GSK and Millennium dated as
of June 22, 2004 ("GSK SUPPLY AGREEMENT"), in each case as in existence and in
the form disclosed to Schering prior to the Execution Date and as they may be
amended in the future.
2.23 "INFORMATION" means (i) techniques and data specifically relating to
development, manufacture, use or sale of INTEGRILIN Products, including, but not
limited to, inventions, practices, methods, knowledge, know-how, skill,
experience, test data including, without limitation, pharmacological,
toxicological and clinical test data, analytical and quality control data,
regulatory submissions, correspondence and communications, marketing, pricing,
distribution, cost, sales, manufacturing, patent and legal data or descriptions
and (ii) compositions of matter, assays and biological materials specifically
relating to development, manufacture, use or sale of INTEGRILIN Products.
2.24 "INTEGRILIN PRODUCT(S)" means any form or dosage of the Compound for
pharmaceutical use in humans or animals. Pharmaceutical forms of the Compound in
different dosage forms shall be considered different INTEGRILIN Products under
this A-R Agreement.
2.25 "JOINT PRODUCTION COMMITTEE" or "JPC" means the committee described in
Article 3.
2.26 "KNOW-HOW" means the Millennium Know-how and/or Schering Know-how as
the context requires.
2.27 "MARKETING PLAN" means any marketing plan furnished by Schering
pursuant to Section 7.1, as may amended by Schering from time to time pursuant
to Section 7.1.
2.28 "MILLENNIUM KNOW-HOW" means Information which (i) either (A) COR or
Millennium disclosed to Schering under the Collaboration Agreement, or (B)
Millennium discloses to Schering under this A-R Agreement or any other
Transaction Agreement, and (ii) was or is within the Control of COR or
Millennium. Notwithstanding anything herein to the contrary, Millennium Know-how
shall exclude Millennium Patents.
2.29 "MILLENNIUM PATENT(S)" means the rights granted by any Governmental
Authority under a Patent which covers the Compound or an INTEGRILIN Product or a
method, apparatus, material or manufacture useful in the development,
manufacture, use or sale of the Compound or an INTEGRILIN Product, which Patent
is owned or Controlled by Millennium prior to termination of this A-R Agreement
under Article 12, including, without limitation, those Patents set forth on
SCHEDULE 2.29.
2.30 "NET SALES" means the amount billed by a Party, an Affiliate or a
permitted sublicensee for sales of INTEGRILIN Products to an unrelated Third
Party less: (i) discounts, including, without limitation, cash discounts
(including, without limitation, quantity discounts), charge-back payments and
rebates granted to managed health care organizations or to federal, state and
local governments, their agencies, and purchasers and reimbursers or to trade
customers, including, but not limited to, wholesalers and chain and pharmacy
buying groups (other than GPO Fees) (with any such discounts or reductions which
are based on sales to the customer of multiple products being allocated to the
INTEGRILIN Product and such other products on a pro rata basis), (ii) credits or
allowances actually granted upon claims, damaged goods, rejections or returns of
INTEGRILIN Product, including, without limitation, recalls, regardless of the
party requesting such, (iii) freight, postage, shipping and insurance charges
actually allowed or paid for delivery of INTEGRILIN Product, to the extent
included in the amount billed to a Third Party in connection with the sale of
INTEGRILIN Product, (iv) commissions paid to Third Parties, and (v) taxes,
duties or other governmental charges levied on, absorbed or otherwise imposed on
sale of INTEGRILIN Product, including without limitation value-added taxes, or
other governmental charges otherwise measured by the billing amount, when
included in billing, as adjusted for rebates and refunds. Discounts under clause
(i) shall not include administrative fees paid or payable to group purchasing
organizations (as defined in 42 CFR 1001.952(j) as of the Execution Date) solely
in connection with the management of INTEGRILIN Product distribution ("GPO
Fees"). Transfers between a Party and its Affiliates (or between such Affiliates
or between a Party or its Affiliate and a permitted sublicensee) shall not have
effect for purposes of calculating Net Sales under this A-R Agreement.
In the event a Party is receiving royalties under this A-R Agreement from
any INTEGRILIN Product sold in the form of a combination product containing one
or more active ingredients in addition to the Compound (which may be either
combined in a single formulation or packaged together as a single unit), Net
Sales for such combination product will be calculated by multiplying actual Net
Sales of such combination product by the fraction A/(A+B) where A is the invoice
price of the INTEGRILIN Product if sold separately, and B is the total invoice
price of any other active ingredient or ingredients in the combination, if sold
separately. If, on a country-by-country basis, the other active ingredient or
ingredients in the combination are not sold separately in said country, Net
Sales for the purpose of determining royalties of the combination product shall
be calculated by multiplying actual Net Sales of such combination product by the
fraction A/C where A is the invoice price of the INTEGRILIN Product if sold
separately, and C is the invoice price of the combination product. If, on a
country-by-country basis, neither the INTEGRILIN Product nor the other active
ingredient or ingredients of the combination product is sold separately in said
country or the mechanics provided above are otherwise inapplicable (as in the
case of medical devices) or produce an inequitable result that does not fairly
reflect the value of the Compound or the other active ingredient(s) of the
combination product, then Net Sales for the purposes of determining royalties of
the combination product shall be determined in writing by the Parties in good
faith.
2.31 "NET SELLING PRICE" means, with respect to a period, the weighted
average unit net selling price of INTEGRILIN Product in the United States which
is calculated as follows: The weighted average of the separately sold and priced
unit sizes of INTEGRILIN Product (e.g., each unique NDC numbered product) each
of which is calculated by taking the total Net Sales that are reasonably
allocable (in accordance with generally accepted accounting principles) to such
separately sold and priced unit size of INTEGRILIN Product in such period and
dividing it by the total units of such separately sold and priced unit size of
INTEGRILIN Products sold in the United States during such period.
2.32 "OTHER TRADEMARKS" has the meaning assigned in Section 9.5.
2.33 "PATENT" means (i) unexpired letters patent (including, without
limitation, inventor's certificates) which have not been held invalid or
unenforceable by a court of competent jurisdiction from which no appeal can be
taken or has been taken within the required time period, including, without
limitation, any substitution, extension, registration, confirmation, reissue,
re-examination, renewal or any like filing thereof and (ii) pending applications
for letters patent, including, without limitation, any continuation, division or
continuation-in-part thereof and any provisional applications.
2.34 "PATENT COSTS" means the reasonable and verifiable: (a) fees and
expenses paid to outside counsel and other Third Parties; (b) direct costs of
in-house counsel; and (c) filing and maintenance expenses, in each case incurred
in connection with the establishment and maintenance of rights under Patents
applicable to INTEGRILIN Products or the Compound, including the costs of patent
interference, opposition, reissue, re-examination or other proceedings. In-house
counsel costs shall be determined on the basis of time actually spent on Patents
applicable to INTEGRILIN Products or the Compound.
2.35 "PATENT RIGHTS" means the Millennium Patents and/or the Schering
Patents as the context requires.
2.36 "REGULATORY APPROVAL" means any approvals (including, without
limitation, supplements, amendments, pre- and post-approvals, pricing and
reimbursement approvals), licenses, registrations or authorizations of any
national, supra-national (e.g., the European Commission or the Council of the
European Union), regional, state or local regulatory agency, department, bureau,
commission, council or other Governmental Authority, necessary for the
manufacture, distribution, use or sale of INTEGRILIN Products in a regulatory
jurisdiction.
2.37 "ROYALTY TERM" has the meaning assigned to it in Section 6.5.
2.38 "SCHERING KNOW-HOW" means Information which (i) Schering either (A)
disclosed to COR or Millennium under the Collaboration Agreement, or (B)
discloses to Millennium under this A-R Agreement or any other Transaction
Agreement, and (ii) is within the Control of Schering. Notwithstanding anything
herein to the contrary, Schering Know-how shall exclude Schering Patents.
2.39 "SCHERING PATENT(S)" means the rights granted by any Governmental
Authority under a Patent which covers the Compound or an INTEGRILIN Product or a
method, apparatus, material or manufacture useful in the development,
manufacture, use or sale of INTEGRILIN Products, which Patent is owned or
Controlled by Schering prior to termination of this A-R Agreement under Article
12. Those Schering Patents existing as of the Execution Date are set forth in
SCHEDULE 2.39 (attached hereto).
2.40 "SCHERING TERRITORY" means the all countries and territories
throughout the world, except for the European Territory.
2.41 "SOLVAY" means Solvay, Societe Anonyme, a Belgian corporation with
offices at 33, rue due Prince Albert, B-1050, Bruxelles, Belgium.
2.42 "SOLVAY AGREEMENT" means the New Long Term Supply Agreement between
Millennium and Solvay, dated January 1, 2003 and the License and Supply
Agreement dated July 27, 1994 between Millennium (formerly COR Therapeutics) and
Solvay, as amended prior to the Closing Date.
2.43 "STOCK OUT" means the interruption in the supply of INTEGRILIN Product
to Schering by Millennium and the sale of INTEGRILIN Product to customers in the
United States that:
(a) results in a nationwide outage of INTEGRILIN Product in the United
States of at least one (1) week at the wholesaler level;
(b) begins on first day of nationwide wholesaler outage; and
(c) ends on first day following Full Recovery of the Business.
2.44 "SUPPLY AGREEMENT" has the meaning assigned to it in Section 1.6.
2.45 "THIRD PARTY" means any entity other than Millennium or Schering or an
Affiliate of either of them.
2.46 "TRADEMARKS" means the trademark INTEGRILIN(R) and each of the Other
Trademarks.
2.47 "TRANSACTION AGREEMENTS" means this A-R Agreement, the Supply
Agreement, the Assignment and Assumption Agreement, the Transfer Letters, the
Transition Services Agreement and the European Side Agreement.
2.48 "TRANSITION SERVICES AGREEMENT" has the meaning assigned to it in
Section 1.6.
2.49 "UCB" means UCB S.A., a Belgian corporation with offices at chemin du
Foriest, B-1420 Braine-l'Alleud, Belgium.
2.50 "UNITED STATES" or "U.S." means the fifty states of the United States
of America and the District of Columbia.
ARTICLE 3
MANAGEMENT AND DILIGENCE
3.1 ELIMINATION OF JSC. Effective upon Closing, the Joint Strategic
Committee ("JSC") established by the Parties pursuant to the Collaboration
Agreement shall be disbanded and shall have no further authority or purpose
whatsoever. Except as may otherwise be expressly set forth in this A-R
Agreement, the Transition Agreement and the Supply Agreement, all
responsibilities, authority and decision making powers held by the JSC
immediately prior to Closing shall be assumed by Schering effective upon
Closing. A Joint Production Committee ("JPC") has been established pursuant to
the Supply Agreement, and its role and responsibilities are defined in the
Supply Agreement.
3.2 PROJECT COORDINATORS. Each Party shall designate a single project
coordinator to serve as the primary point of contact and to coordinate all of
the activities contemplated under this A-R Agreement and the Transition Services
Agreement. Such project coordinators will be responsible for the coordination of
the relationship of the Parties under and during the term of the Transition
Services Agreement.
3.3 DEVELOPMENT AND COMMERCIALIZATION.
(a) In the United States, Schering shall use Diligent Efforts to (i)
market, promote and sell the then-current INTEGRILIN Product, and (ii) perform
the Early ACS Study in accordance with the protocol as may be amended by
Schering in its sole discretion from time to time; PROVIDED, HOWEVER, it is
understood that Schering shall not have any obligation to develop any new
INTEGRILIN Product or to develop the Existing INTEGRILIN Product for any new
indications; and PROVIDED FURTHER that Schering shall have the right to
terminate or modify the Early ACS Study, Add On Studies or Clinical Development
Plan in its sole discretion at any time.
(b) Schering shall not implement a commercial pricing strategy for
INTEGRILIN Products in the United States (including discounts, rebates, etc.)
that would (i) economically disadvantage the INTEGRILIN Products in favor of any
other group of products in Schering's U.S. product portfolio, or (ii)
economically advantage any other product or group of products in Schering's U.S.
product portfolio at the expense of the INTEGRILIN Products. Schering will use
Diligent Efforts to maximize Net Sales of the then-current INTEGRILIN Product in
the United States through its commercial marketing, pricing and contracting
strategies consistent with commercial practices it employs with respect to any
other similarly situated products.
(c) In Australia, Schering shall use Diligent Efforts to develop an
INTEGRILIN Product and obtain Regulatory Approval. Once such Regulatory Approval
has been obtained in Australia, Schering shall use Diligent Efforts to
commercialize such INTEGRILIN Product in Australia. In Canada, Schering shall
use Diligent Efforts to commercialize the INTEGRILIN Product approved as of the
Closing Date.
(d) In the Schering Territory (except in the case of the United States
which is addressed in 3.3(a) above, and Australia and Canada which are addressed
in 3.3(c) above), Schering shall use commercially reasonable efforts to develop
and obtain Regulatory Approval for an INTEGRILIN Product. Once such Regulatory
Approval has been obtained in a country, Schering shall use commercially
reasonable efforts to commercialize such INTEGRILIN Product in such country.
(e) In this A-R Agreement, the use of commercially reasonable efforts
can be satisfied by less than the level of efforts associated with the use of
Diligent Efforts. The Parties acknowledge that development activities pursuant
to Sections 3.3(a) are limited to performance of the ongoing Early ACS Study or
any other registration study undertaken by Schering pursuant to a future
Clinical Development Plan. For clarity, any decision by Schering to terminate or
modify the Early ACS Study, an Add On Study or any other registration study
prior to its completion shall not be a breach of its obligations under this A-R
Agreement and shall not require the consent of GSK, but, for clarity, any
modification shall be made in compliance with the European Side Agreement.
(f) Schering shall have the sole right with respect to invoicing and
booking sales, establishing all terms of sale (including, without limitation,
pricing and discounts), and warehousing and distributing all INTEGRILIN Products
in the Schering Territory, and shall perform all related services. Schering
shall also have the sole right with respect to handling all returns, recalls or
withdrawals, order processing, invoicing and collection, distribution, and
inventory and receivables in the Schering Territory. If Millennium receives any
orders for any INTEGRILIN Product for the Schering Territory, it shall refer
such orders to Schering.
ARTICLE 4
MANUFACTURE AND SUPPLY
4.1 MANUFACTURE. Effective upon Closing, the terms of Supply Agreement
shall govern the rights and obligations of the Parties with respect to the
manufacture and supply of INTEGRILIN Products for the Schering Territory.
Pursuant to and as more fully defined in the Supply Agreement, Millennium holds
a right to put, and Schering holds a right to call, the manufacturing rights and
obligations under the Supply Agreement at the times and on the conditions set
forth therein.
ARTICLE 5
REPRESENTATIONS AND COVENANTS
5.1 COMPETITIVE PRODUCTS.
(a) For so long as Schering (or in the event of a sublicense, its
sublicensee) holds the right to sell an INTEGRILIN Product under this A-R
Agreement in a particular country in the Schering Territory, Schering (and any
of such sublicensees) shall not promote the sale of, or engage in pre-approval
promotion activities relating to, any injectable formulation of a Competitive
Product in such country.
(b) If during the term of this A-R Agreement Schering develops and
commercially introduces an INTEGRILIN Product in a non-injectable dosage form in
one or more countries in the Schering Territory, then the terms of this Section
5.1(b) shall apply. Except as provided below, Schering (or in the event of a
sublicense, its sublicensee) shall not promote the sale of, or engage in
pre-approval promotion activities relating to, any Competitive Product in a
particular country in the same non-injectable dosage form in which an INTEGRILIN
Product has been commercially introduced by Schering under this A-R Agreement in
such country; PROVIDED, HOWEVER, that the foregoing restriction shall not apply
to any orally administered product.
(c) If Millennium or any of its Affiliates, sublicensees or
collaboration partners intends to promote the sale of, or engage in pre-approval
promotion activities relating to, any Competitive Product (including, without
limitation, any Competitive Product derived from the collaboration between
Millennium and Eli Lilly and Company) or generically equivalent product, it
shall notify Schering at least one year in advance of the date that Millennium
reasonably believes its promotion of a Competitive Product or generically
equivalent product may commence. Such notice shall be provided separately for
each country and product in question. For purposes of this Section,
"pre-approval promotion" shall mean the outside activities of sales
representatives or the sponsorship of events, such as symposia, primarily for
the purpose of highlighting the benefits of Competitive Products or, if
applicable, generically equivalent products, which activities are otherwise
allowed by applicable regulatory authorities. Pre-approval promotion shall
exclude, however, scientific publications by any person and presentations by
researchers or investigators who are not employees of Millennium or its
Affiliates, sublicensees or collaboration partners. Millennium represents and
warrants to Schering, as of the Execution Date and as of the Closing Date, that
neither it nor any of its Affiliates, sublicensees or collaboration partners is
engaged in pre-approval promotion activities relating to any Competitive Product
or generically equivalent product in any county in the Schering Territory and
that it has no plans to promote the sale of, or engage in pre-approval promotion
activities relating to, any Competitive Product or generically equivalent
product in the Schering Territory. As used herein, a "generically equivalent
product" is any product containing the Compound.
(d) Section 5.1(a) and 5.1(b) shall have no further force or effect and
shall terminate automatically upon the earlier of (i) termination of this A-R
Agreement, (ii) the assignment or conveyance by Schering to an independent Third
Party of all rights to and control of development and commercialization of
INTEGRILIN Products in the Schering Territory such that Schering only retains a
passive revenue stream, or (iii) with respect to a particular country in the
Schering Territory, either (A) the expiration of the Royalty Term applicable to
such country, or (B) the date Millennium or any of its Affiliates, sublicensees
or collaboration partners first promotes the sale of, or engages in pre-approval
promotion activities relating to, a Competitive Product (including, without
limitation, any Competitive Product derived from the collaboration between
Millennium and Eli Lilly and Company) or generically equivalent product in such
country. Notwithstanding anything in this A-R Agreement to the contrary, if
Millennium or any of its Affiliates, sublicensees or collaboration partners
obtains regulatory approval for a generically equivalent product in the United
States, then (i) Net Sales in the United States shall be treated as Net Sales
outside the United States and Canada for the purpose of calculating royalties
from and after the date of first sale in the United States following such
regulatory approval, and the royalty obligations in Section 6.1(b) and the
related provisions in Sections 6.4(a) (with corresponding changes to Section
8.7(a)), 6.5(a)(i), 6.6(c)(ii), 6.7(b), 6.10(b), 9.2(c)(i) and 9.5(d)(i) shall
terminate and Sections 6.3, 6.4(b) (with corresponding changes to Section
8.7(a)), 6.5(a)(ii), 6.6(c)(i), 6.7(a), 6.10(a), 9.2(c)(ii) and 9.5(d)(ii) each
shall be deemed to apply to the United States, and (ii) the words "In countries
other than the United States" shall be deemed to be deleted from the last
sentence of Section 9.4.
(e) Notwithstanding the foregoing, the restrictions, representations
and covenants contained in Sections 5.1(c) and 5.1(d) shall only apply to a
sublicensee or collaboration partner of Millennium or its Affiliates solely to
the extent that the development and commercialization of a Competitive Product
or generically equivalent product is within the scope of the relevant agreement
between Millennium (or its Affiliate) and such sublicensee or collaboration
partner, including, without limitation, any agreement under which Millennium or
an Affiliate transfers or grants any rights or receives any consideration with
respect to the development or commercialization of a Competitive Product or
generically equivalent product (other than a cross license entered into with the
agreement of the Parties pursuant to Section 9.2 or 9.4). If Millennium is
acquired by, or otherwise undergoes a change of control with, a Third Party that
is promoting a Competitive Product at the time of such transaction, then the
notice requirements set forth in the first sentence of Section 5.1(c) shall not
apply with respect to the promotion of such Competitive Product by such Third
Party.
5.2 MUTUAL AUTHORITY. Millennium and Schering each represents and warrants
to the other that (i) it has the authority and right to enter into and perform
this A-R Agreement and (ii) its execution, delivery and performance of this A-R
Agreement will not conflict in any material fashion with the terms of any other
agreement to which it is or becomes a party or by which it is or becomes bound.
5.3 RIGHTS IN TECHNOLOGY; AGREEMENTS WITH THIRD PARTIES. As of the
Execution Date and the Closing Date, each of Millennium and Schering has
sufficient right in and to its Know-how and Patent Rights, free and clear of any
liens or encumbrances, to grant the rights set forth in this A-R Agreement.
During the term of this A-R Agreement, each Party will use Diligent Efforts not
to diminish the rights under its Know-how and Patent Rights granted to each
other herein, including without limitation by not committing or permitting any
acts or omissions which would cause the material breach of any agreements
between itself and Third Parties which provide for intellectual property rights
applicable to the development, manufacture, use or sale of INTEGRILIN Products.
Each Party agrees to provide promptly the other Party with notice of any such
alleged breach. As of the Execution Date, each Party is in compliance in all
material respects with any aforementioned agreements with Third Parties.
5.4 DISCLAIMER. Neither Party makes any warranty pursuant to this A-R
Agreement to the other Party except as expressly set forth in this Article 5
concerning its Patent Rights or Know-how, including without limitation the
validity or scope of its Patent Rights or that INTEGRILIN Products will be free
from infringement of the Patent rights of Third Parties. Neither Party makes any
warranty pursuant to this A-R Agreement to the other Party of any INTEGRILIN
Product's merchantability or fitness for a particular purpose and makes no
warranty as to the efficacy, safety or financial success of the INTEGRILIN
Products.
ARTICLE 6
COMPENSATION
6.1 UNITED STATES RESTRUCTURING FEE AND ROYALTIES.
(a) RESTRUCTURING FEE. In consideration of the restructuring of rights
with respect to the United States and Canada under the terms of this A-R
Agreement, Schering shall pay to Millennium a non-refundable restructuring fee
of U.S. $35.5 million by wire transfer at the Closing.
(b) ROYALTIES.
(i) In lieu of profit sharing under the Collaboration Agreement,
Millennium shall receive royalties at the following rates on each of the annual
Net Sales tiers in the United States, as follows:
TABLE A
-----------------------------------------------------------------------
Calendar Year Net Sales Tiers
of INTEGRILIN Products
In The United States (Described Below) Royalty Rate
-------------------------------------- ------------
That portion of calendar year Net Sales up to and [**]%
including U.S.$[**]
That portion of calendar year Net Sales greater than [**]%
U.S.$[**] up to and including U.S.$[**]
That portion of calendar year Net Sales greater than [**]%
U.S.$[**]
- -------------------------------------------------------------------------------
Such royalties shall be payable quarterly on U.S. Net Sales occurring on and
after Closing. For purposes of calculating the royalty to be paid during each
calendar quarter, each of the annual royalty tiers specified in Table A above
shall be applied pro rata in each quarter (i.e. by dividing the annual Net Sales
thresholds for each tier by four). The quarterly royalty payments shall be
subject to a true up in the fourth quarter of each calendar year. At the time of
the true up, Schering will calculate the annual Net Sales of INTEGRILIN Products
in the United States and the royalties due to Millennium based on Table A set
forth above and an adjustment will be made by Schering to the payment due to
Millennium for the fourth quarter. Millennium shall refund to Schering any
overpayment in royalties paid during the calendar year that are not offset by
royalties owed in the last quarter of such calendar year. Such refund shall be
made by Millennium within 45 days of the end of such calendar year. For the
portion of calendar year 2005 remaining after Closing, and the last calendar
year during the Royalty Term, the annual royalty tier thresholds to be applied
to that period for determining the total royalty due in each such period will be
reduced pro rata based on the number of days in such period divided by 365.
For purposes of illustrating the foregoing only, if, in the first calendar
quarter, Net Sales in the United States equaled U.S. $[**], then the quarterly
royalties payable would be U.S. $[**] (i.e., [**]% of U.S. $[**] or U.S. $[**]%
of U.S. $[**] or U.S. $[**]% of U.S. $[**] or U.S. $[**]). If, in the second,
third and fourth calendar quarters, Net Sales in the United States equaled U.S.
$[**] in each quarter, then the aggregate royalties due for the calendar year
would be U.S.$[**] million (i.e., 24% of U.S. $[**] or U.S. $[**]% of U.S. $[**]
or $[**]), the quarterly royalties payable for the second and third calendar
quarter would be U.S. $[**] (i.e., [**]% of U.S. $[**] or U.S. $[**]) and the
quarterly royalties payable for the fourth calendar quarter following the true
up and year-end adjustments would be U.S. $[**].
(ii) MINIMUM ROYALTIES IN 2006 AND 2007.
(A) Schering shall be obligated to pay a minimum annual
royalty with respect to the United States of U.S. $85.35 million
("Minimum Annual Royalty") in each of the calendar years ending
December 31, 2006 and December 31, 2007 (each such calendar year, a
"Minimum Royalty Year" and such two year period, the "Minimum Royalty
Period"); PROVIDED, HOWEVER, that Schering's obligation to pay the
Minimum Annual Royalty shall for all future Minimum Annual Royalty
payments (1) terminate automatically if Millennium, an Affiliate
controlled by Millennium or Millennium's parent or successor in
interest following a change in control promotes the sale of a
Competitive Product (including, without limitation, any Competitive
Product derived from the collaboration between Millennium and Eli Lilly
and Company) in the United States, (2) terminate automatically if
Millennium is in material breach of the Supply Agreement and such
breach has a material adverse impact on Net Sales of the INTEGRILIN
Product, or (3) shall not apply if a Stock Out occurs at any time
during the period commencing on the Closing Date and ending on
December 31, 2007, except to the extent the Stock Out is caused by the
failure of Schering to use Diligent Efforts to forecast and order
INTEGRILIN Products in the Schering Territory necessary to meet its
reasonable forecasts, and except in each case ((1), (2) or (3)) to the
extent caused by the negligence or intentional misconduct of Schering
or a Schering Indemnified Party. For purposes of clarity, a Stock Out
first occurring in calendar year 2007 will not have any effect on the
Minimum Annual Royalty applicable to calendar year 2006.
(B) Notwithstanding the foregoing, solely in the event of a
Stock Out, if following the Stock Out there is a Full Recovery of the
Business and the Recovery Period begins prior to the expiration of the
Minimum Royalty Period, then Schering's Minimum Annual Royalty
obligation shall be reinstated; provided that the applicable Minimum
Annual Royalty shall be reduced pro rata based upon the total number of
calendar days of the Stock Out and the Repair Period (as defined
below). The term "Full Recovery of the Business" shall mean that the
[**] of INTEGRILIN Products by Schering or its sublicensee in the
United States for each of [**] consecutive periods of [**] consecutive
calendar months after the end of the Stock Out (the "Recovery Period")
meets or exceeds the [**] of INTEGRILIN Products in the United States
during the most recent corresponding periods of [**] consecutive
calendar months occurring prior to the commencement of any Stock Out.
The period of time beginning on the first calendar day after the end of
the Stock Out and ending on the first day of the Recovery Period is
herein referred to as the "Repair Period". Notwithstanding the
forgoing, if the Stock Out commences after June 30 of a Minimum Royalty
Year, and if subsequently there is a Full Recovery except that the
Recovery Period does not commence until after December 31 of such
Minimum Royalty Year, then the Minimum Annual Royalty obligation for
such Minimum Royalty Year shall be reinstated for the period prior to
the Stock Out in such Minimum Royalty Year; provided that the
applicable Minimum Annual Royalty obligation shall be reduced pro rata
based upon the total number of calendar days of the Stock Out and any
Repair Period that occurred in such Minimum Royalty Year.
(C) Payment of the Minimum Annual Royalty shall become an
obligation of Schering to Millennium on the last day of the Minimum
Royalty Year for which such Minimum Annual Royalty is due. In the event
royalties paid to Millennium for each of Minimum Royalty Year do not
reach the Minimum Annual Royalty required for that year, Schering shall
pay to Millennium, in addition to the royalties due for such calendar
year specified in Section 6.1(b)(i), the amount necessary to bring the
accumulated royalty payments to Millennium up to the amount of the
required Minimum Annual Royalty. Said amount shall be payable to
Millennium from Schering within [**] days of the end of the applicable
Minimum Royalty Year in connection with payment of the running
royalties then due; PROVIDED, that, if a Stock Out occurs on or before
December 31 of a Minimum Royalty Year and the Minimum Annual Royalty is
reinstated due to a Full Recovery of the Business that is not completed
before the end of such Minimum Royalty Year, then any payment due with
respect to the Minimum Annual Royalty for such Minimum Royalty Year
shall be paid within [**] days after the end of the Recovery Period.
(D) By way of example, if a Stock Out commences on June 1,
2006 and ends on June 20, 2006, then Schering's Minimum Annual Royalty
obligation for 2006 and 2007 would terminate. However, if both (1) the
[**] in the US for [**] of 2006 meets or exceeds the [**] in the US for
[**] of 2005, and (2) the [**] for [**] of 2007 meets or exceeds the
[**] for [**] of 2006, then a Full Recovery of the Business will have
occurred and the Minimum Royalty Obligation will be reinstated. In such
example, the Recovery Period would be the [**] month period beginning
on October 1, 2006 and ending on [**], and the Repair Period would be
the period beginning on June 21, 2006 and ending on September 30, 2006.
In this example the total the duration of the Stock Outage (20 days)
and the Repair Period (82 days) would be 102 days and the reinstated
Minimum Annual Royalty for 2006 would be calculated as follows:
$85,350,000 multiplied by ((365 days - 102 days) / 365 days) =
$61,498,763
and related payment by Schering would be due within [**] days after the
end of the Recovery Period. In such example, if no additional Stock Out
occurs the reinstated Minimum Annual Royalty for 2007 would be the full
amount of $85,350,000 and any related payment by Schering would be due
within [**] days after the end of 2007.
(iii) ROYALTY ADJUSTMENT POST-2007 BASED ON COST SAVINGS BY
SCHERING. If, in the calendar year ending December 31, 2008 or in any subsequent
calendar year during the Royalty Term, (A) the Sales Representative Effort
expended by Schering or its sublicensee for the INTEGRILIN Products in the
United States in such calendar year is equivalent to less than [**] percent
([**]%) of the 2005 effort of [**] sales representatives currently dedicated
[**]% of their time to promoting INTEGRILIN Product, and (B) Net Sales of
INTEGRILIN Products in the United States in such calendar year are less than
U.S. $[**], then the royalty rate shall be a flat [**] percent ([**]%) for such
calendar year in lieu of the royalty tier rates provided for in Table A in
Section 6.1(b)(i) above. For the purpose of this Section 6.1(b)(iii) only,
"Sales Representative Effort" shall mean the efforts, to be measured using a
methodology to be established or approved by the Parties in writing, of sales
representatives in the United States to promote INTEGRILIN Products. In
establishing the methodology for measurement of Sales Representative Efforts,
the Parties shall take into consideration all factors that they determine to be
relevant, including, by way of example, the following: positioning of calls,
appropriateness of calls, nature of contact and the role of the person contacted
in influencing the buying process and decision.
6.2 ROYALTIES IN CANADA. Millennium shall receive a running royalty on Net
Sales of INTEGRILIN Products in Canada at the rate of [**]% per calendar year.
6.3 ROYALTY OUTSIDE THE UNITED STATES AND CANADA. Millennium shall receive
a running royalty on Net Sales of all INTEGRILIN Products in the Schering
Territory (outside the United States and Canada) at the following rates:
TABLE B
--------------------------------------------------------------------------
Calendar Year Net Sales
of INTEGRILIN Products in the Schering Territory
Outside the United States and Canada Royalty Rate
--------------------------------------------------------- ------------
That portion of calendar year Net Sales that are less than [**]%
U.S. $[**]
That portion of calendar year Net Sales that are equal to [**]%
or greater than U.S. $[**]
The measure of annual sales set forth in Table B above shall be the sum of
Net Sales of INTEGRILIN Products in all countries in the Schering Territory
other than the United States and Canada, and the royalty rate indicated shall
apply to all Net Sales during the calendar year. By way of example, if, in a
given calendar year, Net Sales in the Schering Territory outside Canada and the
United States equaled U.S. $[**], then the royalty due for the year would be
U.S. $[**] (i.e., [**]% of U.S. $[**]).
6.4 ROYALTY REDUCTIONS.
(a) The royalties payable for INTEGRILIN Products sold in the United
States under Section 6.1(b) shall be subject to reduction as follows:
(i) Royalties payable to a Party for the Existing INTEGRILIN
Product sold in the United States shall be reduced by [**]% of any royalties
payable to Third Parties in connection with rights necessary to practice or use
(A) the manufacturing process used by Millennium and its third-party suppliers
to manufacture the INTEGRILIN Product as of the Closing Date, or (B) the
manufacturing process independently developed by UCB that is filed for
Regulatory Approval with a Governmental Authority; PROVIDED, that the royalty
reduction set forth in this Section 6.4(a)(i) shall not apply to royalties paid
by Millennium ( which are charged as the Cost of Goods Shipped under, in
accordance with and as defined in the Supply Agreement) or Schering to Solvay
pursuant to the Solvay Agreement in connection with the manufacture of bulk
INTEGRILIN Products employing the Solvay manufacturing process as authorized
under the Solvay Agreement or royalties paid by Schering with respect to
technology that does not cover the manufacture, use or sale of an INTEGRILIN
Product;
(ii) If the Net Selling Price is reduced in a calendar quarter by
more than [**]% of the Net Selling Price of the INTEGRILIN Product in the
quarter ending immediately prior to the Closing (the "NSP Benchmark Price"),
then the royalties payable by Schering in such quarter to Millennium shall be
reduced by [**]%;
(iii) If a generically equivalent product is launched in the United
States and there is a [**]% or greater loss in unit sales (by volume) in any
subsequent calendar quarter following such launch as compared to unit sales (by
volume) of Schering in the calendar quarter immediately prior to such launch,
then the royalties payable by Schering in such subsequent calendar quarters to
Millennium shall be reduced by [**]% (as used herein, a "generically equivalent
product" is any product containing the Compound);
(iv) If pursuant to the terms of Section 3.1.2 of the Supply
Agreement, the INTEGRILIN Product does not have a Regulatory Approval allowing
for the use of the new manufacturing process developed by UCB on or before [**]
(or any extension expressly provided for under Section 3.1.2 of the Supply
Agreement), then the royalties payable by Schering to Millennium shall be
reduced by [**] percent [**]%) in subsequent calendar quarters until such time
as such Regulatory Approval is effective; and
(v) If pursuant to the terms of Section 3.1.2 of the Supply
Agreement, a Regulatory Approval allowing for the use at a second supplier or
supply site of the new manufacturing process developed by UCB is not obtained on
or before [**] (or any extension expressly provided for under Section 3.1.2 of
the Supply Agreement), and the royalty deduction is not otherwise triggered and
in effect under clause (iv), above, then the royalties payable by Schering to
Millennium shall be reduced by [**] percent ([**]%) in subsequent calendar
quarters until such time as such Regulatory Approval is effective for such
second supplier or supply site.
(b) The royalties payable for INTEGRILIN Products sold in the Schering
Territory but outside the United States under Sections 6.2 and 6.3 shall be
subject to reduction as follows:
(i) If a generically equivalent product is introduced by a Third
Party in any country (outside the United States) in which neither Millennium nor
Schering has patent coverage preventing sale or use and such generically
equivalent product has sales in such country equal to at least [**] percent
([**]%) of unit sales (by volume) of the INTEGRILIN Product in such country in
any calendar quarter, the royalty obligation in such country set forth above
shall be reduced by [**]% until Millennium or Schering is granted patent
coverage of the INTEGRILIN Product in such country or the generically equivalent
product is withdrawn from such market (as used herein, a "generically equivalent
product" is [**]); and
(ii) The royalty rate for an INTEGRILIN Product in a given country
outside the United States shall be reduced by [**]% if the patent coverage for
such Product in such country expires before the expiration of the Royalty Term
applicable to such country; and
(iii) Royalties payable to a Party for an INTEGRILIN Product sold
outside the United States shall be reduced by [**]% of any royalties payable to
Third Parties attributable to the manufacture, use or sale of such INTEGRILIN
Product (other than royalties paid to Solvay pursuant to the Solvay Agreement in
connection with the manufacture of bulk INTEGRILIN Products employing the Solvay
manufacturing process as authorized under the Solvay Agreement or royalties paid
with respect to technology that does not cover the manufacture, use or sale of
an INTEGRILIN Product).
(c) In any event, the aggregate reduction of royalties set forth in
Section 6.4(a), above shall not reduce the net royalty payable to a Party in a
calendar quarter under Section 6.1(b) by more than [**]% in total and the
aggregate reduction of royalties set forth in Section 6.4(b), above shall not
reduce the net royalty payable to a Party in a calendar quarter under Sections
6.2 and 6.3 by more than [**]% in total.
6.5 TERM OF ROYALTIES PAYABLE TO A PARTY.
(a) Millennium's rights to receive royalties on sales of INTEGRILIN
Product in the United States under Sections 6.1(b) shall begin on the Closing
Date. Effective upon Closing Millennium shall continue to receive royalties on
sales of INTEGRILIN Products from the other countries in the Schering Territory
as provided in Sections 6.2 and 6.3. Millennium's rights to receive such
royalties on and after Closing shall expire as set forth below ("Royalty Term"):
(i) Millennium's rights to receive royalties under Section 6.1(b)
shall expire on the date that Schering is no longer engaged in the
commercialization and sale of an INTEGRILIN Product in the United States; and
(ii) Millennium' rights to receive royalties under Sections 6.2 and
6.3 shall expire on a country-by-country basis upon the later of (A) fifteen
years from the first commercial sale of such INTEGRILIN Product in such country
under the Collaboration Agreement or this A-R Agreement, whichever comes first,
and (B) expiration of the last to expire Millennium Patent covering the
manufacture, use or sale of such INTEGRILIN Product. The dates of first
commercial sale of an INTEGRILIN Product in each country in the Schering
Territory where the INTEGRILIN Product is being sold as of the Execution Date
are set forth in SCHEDULE 6.5(A)(II), attached hereto, and Schering shall notify
Millennium in writing of the date of first commercial sale of INTEGRILIN Product
in any other country in the Schering Territory that occurs on or after the
Execution Date.
(b) Schering's rights to receive royalties under Section 6.6 shall
begin on the termination date specified in Section 6.6 and, unless otherwise
provided in Section 6.6(b), shall expire:
(i) with respect to the United States, on the date that Millennium
(or its Affiliates, successor in interest, or sublicensee) is no longer engaged
in the commercialization and sale of an INTEGRILIN Product in the United States;
and
(ii) with respect to all countries in the Schering Territory other
than the United States, on a country-by-country basis upon the later of (A)
fifteen years from the first commercial sale of such INTEGRILIN Product in such
country under the Collaboration Agreement, or if the first commercial sale in
such country occurs on or after Closing under this A-R Agreement, and (B)
expiration of the last to expire Schering Patent covering the manufacture, use
or sale of an INTEGRILIN Product. In circumstances where Schering has not
launched an INTEGRILIN Product prior to termination, Millennium shall notify
Schering in writing of the date of first commercial sale of an INTEGRILIN
Product in any country in the Schering Territory that occurs on or after the
date of termination of the license in such country.
6.6 ROYALTY PAYMENTS BY MILLENNIUM; TERMINATION FEE.
(a) In the event Schering's rights are terminated in a country or
countries by Millennium pursuant to Section 12.3, 12.4(a) or 12.4(b), Millennium
shall make royalty payments to Schering at a rate equal to [**]% of the Net
Sales of INTEGRILIN Products in the relevant terminated country(ies) in the
Schering Territory for the period of time set forth in Section 6.5(b).
(b) In the event this A-R Agreement is terminated by Schering
pursuant to Section 12.2, Millennium shall make royalty payments to Schering on
Net Sales of INTEGRILIN Products in the Schering Territory occurring on or after
the effective date of such termination at [**]% of Net Sales in the United
States and Canada and at the same rates that were payable by Schering to
Millennium pursuant to Sections 6.3 in the remaining countries in the Schering
Territory. If Schering terminates this A-R Agreement pursuant to Section 12.2 as
a result of a breach by Millennium in the period beginning on the Closing Date
and ending on the third anniversary of the Closing Date, Millennium shall pay
Schering a termination fee as follows:
(i) if the Termination Date occurs prior to the first anniversary
of the Closing Date, the termination fee shall be an amount equal to $[**];
(ii) if the Termination Date occurs after the first anniversary of
the Closing Date but prior to the second anniversary of the Closing Date, the
termination fee shall be an amount equal to $[**]; and
(iii) if the Termination Date occurs after the second anniversary
of the Closing Date but prior to the third anniversary of the Closing Date, the
termination fee shall be an amount equal to $[**].
As used in this Section, "Termination Date" means the first date of the
applicable notice of breach pursuant to Section 12.2(a) that gave rise to such
termination. Millennium shall pay Schering the applicable termination fee within
[**]) days of the effective date of termination of this A-R Agreement. For
purposes of clarity, if a notice of breach is disputed under Section 12.2(c) and
it is ultimately determined that such notice was improper and no termination
results, then no termination fee will be due to Schering with respect to such
notice.
(c) In the event that following such termination, Millennium or its
Affiliates assigns, sells, licenses or otherwise conveys to any Third Party the
rights to develop and commercialize INTEGRILIN Products in one or more countries
in the Schering Territory, then
(i) with respect to all countries in the Schering Territory other
than the United States, Millennium shall pay to Schering:
(A) [**] percent ([**]%) of all consideration received by
Millennium and its Affiliates from such Third Party; or
(B) if the amount provided for under Section 6.6(c)(i) is
less than the royalty Millennium would have paid to Schering under the
applicable termination royalty under Section 6.6(a) or (b), above, if it had
retained rights to INTEGRILIN Product in such country(ies), then Millennium
shall pay to Schering royalties on Net Sales of INTEGRILIN Products by such
Third Party at the same rate as it would have paid if Millennium was selling the
INTEGRILIN Product; and
(ii) with respect to the United States, Millennium shall pay to
Schering royalties at the applicable termination royalty rate under Section
6.6(a) or (b) on the Net Sales of the INTEGRILIN Product in the United States by
such Third Party at the same rate as it would have paid if Millennium was
selling the INTEGRILIN Product.
(d) The royalties payable by Millennium under Sections 6.6(a), (b) and
(c) shall be subject to reduction in the manner set forth in Section 6.4;
PROVIDED, that aggregate reduction of royalties shall not reduce (i) the net
royalty payable to Schering for sales of INTEGRILIN Products in the United
States under this Section 6.6 by more than [**]%, and (ii) the net royalty
payable to Schering for sales of INTEGRILIN Products in the Schering Territory
but outside the United States under this Section 6.6 by more than [**]% in a
particular country. The royalties shall be paid by Millennium in accordance with
Sections 6.7 through 6.13.
6.7 ROYALTY REPORTS AND PAYMENTS.
(a) ROYALTY REPORTS FOR OUTSIDE THE UNITED STATES. All royalty payments
for all countries in the Schering Territory other than the United States shall
be made to the receiving Party or its designee quarterly within [**] days
following the end of each calendar quarter for which royalties are due from the
selling Party. Each royalty payment shall be accompanied by a statement
summarizing the Net Sales during the relevant three-month period.
(b) ROYALTY REPORTS FOR THE UNITED STATES. An initial good faith report
of estimated Net Sales (and gross sales and deductions used in calculating Net
Sales) in the United States shall be provided [**] business days after the end
of each calendar quarter. A final royalty report shall be provided no later than
[**] days following the end of each calendar quarter and shall include
reconciliation between reported gross and Net Sales. Net Sales (and gross sales
and deductions used in calculating Net Sales) shall be reported for the United
States. In the event Net Sales in the United States reported for a calendar year
on or after December 31, 2007 are below U.S. $[**], such report shall also
include a report of the sales representative level of effort equivalence to
support the calendar year applicability of royalty rate provided for in Section
6.1(b)(iii) above.
(c) PAYMENTS. Royalty payments under this A-R Agreement shall be made
in U.S. Dollars to the receiving Party or its designee quarterly within [**]
days following the end of each calendar quarter along with the final royalty
report.
6.8 TAXES. The Party receiving royalties shall pay any and all taxes levied
on account of royalties it receives under this A-R Agreement. If laws or
regulations require that taxes be withheld, the selling Party will (a) deduct
those taxes from the remittable royalty, (b) pay the taxes to the proper taxing
authority, and (c) send evidence of the obligation together with proof of
payment to the other Party within sixty (60) days following that payment.
6.9 BLOCKED CURRENCY. In each country where the local currency is blocked
and cannot be removed from the country, royalties accrued in that country shall
be paid to the receiving Party in the country in local currency by deposit in a
local bank designated by the receiving Party, unless the Parties otherwise
agree.
6.10 SUBLICENSES. In the event either Party grants licenses or sublicenses
to others to sell INTEGRILIN Products which are subject to royalties under
Sections 6.1-6.3 or Section 6.6, such licenses or sublicenses shall include an
obligation for the licensee or sublicensee to account for and report its sales
of INTEGRILIN Products on the same basis as if such sales were Net Sales by the
Party granting the license or sublicense, and such Party shall pay to the other
Party receiving payment under this A-R Agreement with respect to such sales in
the Schering Territory (a) outside the United States the greater of (i) [**]% of
the aggregate amounts that such Party actually receives from such licensee or
sublicensee with respect to such sales, or (ii) royalties on such sales by the
sublicensee as if such sales of the licensee or sublicensee were Net Sales of
the Party granting the license or sublicense; and (b) in the United States,
royalties on such sales by the sublicensee as if such sales of the licensee or
sublicensee were Net Sales of the Party granting the license or sublicense.
6.11 NON-MONETARY CONSIDERATION AND CROSS BORDER TRANSACTIONS.
(a) In the event a Party receives any non-monetary consideration in
connection with the sale of INTEGRILIN Products, such Party's royalty obligation
under Article 6 in United States Dollars shall be based on the fair market value
of such other consideration. In such case, the selling Party shall disclose the
terms of such arrangement to the other Party and the Parties shall endeavor in
good faith to agree on such fair market value.
(b) The Parties recognize that in certain territories, and in
particular in free trade regions, customers or other Third Parties may import
INTEGRILIN Products purchased in one country for use in another. If such
activity materially distorts the aggregate relative profitability of Schering
from the sale of INTEGRILIN Products in one or more countries of the Schering
Territory, the Parties shall establish an equitable mechanism to adjust the
compensation of the Parties hereunder to offset the economic effect of such
cross-border transfers to the extent it is practical to do so.
6.12 FOREIGN EXCHANGE. For the purpose of computing the Net Sales for
INTEGRILIN Products sold in a currency other than United States Dollars, such
currency shall be converted into United States Dollars using the rate of
exchange used by Schering for Affiliate conversions for such currency in the
relevant calendar quarter; PROVIDED, HOWEVER, that such rate of exchange shall
approximate fair market value and, in the event of rapidly changing exchange
rates, Schering shall, upon request by Millennium, consult with Millennium and
the Parties shall agree on a mechanism to assure that exchange rates are
calculated to reflect fair market values on an ongoing basis.
6.13 PAYMENTS TO OR REPORTS BY AFFILIATES. Any payment required under any
provision of this A-R Agreement to be made to either Party or any report
required to be made by any Party shall be made to or by an Affiliate of that
Party if designated in writing by that Party as the appropriate recipient or
reporting entity.
6.14 COST SHARING OF EACS SAVINGS. In the event Schering terminates the
Early ACS Study prior to enrollment of all patients, or materially revises the
Early ACS protocol in such a way that the overall study budget is intended to be
reduced from the current budget of U.S. $[**], any actual cost savings arising
from the termination or protocol revision will be shared by Schering 50:50 with
Millennium. Such cost savings, if any, shall be equal to the amount by which the
current budget of $[**] exceeds the aggregate of Schering's actual internal and
external costs incurred in connection with the Early ACS Study. Schering will
pay Millennium its share of the estimated savings, if any, within [**] days of
closing enrollment in the study, PROVIDED that Schering's revised study costs
may include estimates of reasonable future expenses that will be incurred for
one-year patient follow-up. Within [**] days after making such payment, Schering
shall provide Millennium with a final statement of such estimated cost savings
and, within [**] days of receipt of such statement, Millennium or Schering, as
applicable, shall make a reconciliation payment to the other to reflect the
50:50 sharing of such cost reduction as of the date of such statement. For
clarity, Schering shall have the right in its sole discretion to terminate the
Early ACS Study at any time and any such termination shall not be a breach of
Schering's diligence obligations under the A-R Agreement.
6.15 CHANGES TO ACCOUNTING PROCEDURES. The Parties recognize that Schering
may change the accounting procedures it uses to make computations of Net Sales
hereunder from time to time during the Royalty Term; PROVIDED that any such
changes are made in accordance with generally accepted accounting principles,
consistently applied, and generally applicable across all Schering
pharmaceutical product lines.
ARTICLE 7
INFORMATION AND REPORTS
7.1 INFORMATION DISCLOSURE.
(a) CLINICAL DEVELOPMENT PLANS AND REPORTS. The Parties acknowledge
that, as of the Execution Date, the Early ACS Study is being conducted in
accordance with the protocol as filed with the Governmental Authority for the
United States for the study. If Schering decides to conduct an additional
registration study for an INTEGRILIN Product, it shall promptly furnish
Millennium with a plan for such study (a "Clinical Development Plan"). Schering
shall provide Millennium with a quarterly report summarizing its activities with
respect to, and any results from, the Early ACS Study and any such other
registration study within [**] days after the end of each calendar quarter in
which such study is performed or results achieved. Schering shall also provide
Millennium with written notice of any (i) material amendment to the protocol for
the Early ACS Study or a Clinical Development Plan for such other registration
study, and (ii) termination of the Early ACS Study or any such other
registration study in each case promptly after such event. For clarity, nothing
in this Section 7.1 is intended, or shall be construed to, limit Schering's
rights under Section 3.3.
(b) MARKETING PLAN REPORTS. The first Marketing Plan shall be delivered
to Millennium at the Closing. For calendar years after 2006, Schering shall
provide Millennium with annual updates to the Marketing Plan on or before [**]
of the previous calendar year. The Marketing Plan and each update thereto shall
include planned sales representative full time equivalents to be devoted to
promotion of the INTEGRILIN Product under this A-R Agreement and projected Net
Sales for the next calendar year; except that the first Marketing Plan shall
also cover the period from Closing until the end of calendar year 2006. Schering
shall also provide Millennium with a quarterly product report within [**] days
after the end of each calendar quarter. The quarterly product report shall
include: (i) an update to the projected annual Net Sales for the remainder of
the then-current calendar year; and (ii) any description of any material changes
to the Marketing Plan.
(c) FINANCIAL REPORTS. In accordance with Article 10, except as
required by law or as Millennium counsel determines is necessary or material to
include in SEC filings or other similar required disclosures or Millennium
royalty revenue forecasts, all information provided to Millennium pursuant to
this Section 7.1 is provided in confidence and solely for Millennium's internal
planning and with respect to its receipt of payments to be received by
Millennium under Sections 6.1, 6.2 and 6.3. Millennium shall not use any
information provided to Millennium pursuant to this Section 7.1 in connection
with any Competitive Products. Schering shall not have any liability for any use
by Millennium of such information.
(d) COMPETITIVE PRODUCT LIMITATION. In the event that Millennium (or
its Affiliates or its successor in interest following a change in control of
Millennium) acquires rights to a Competitive Product, whether through merger,
acquisition, licensing or otherwise, then information provided by Schering under
this A-R Agreement or the other Transaction Agreements shall be restricted to a
defined, limited list of employees at Millennium who need to know such
information (and its accountants and attorneys); provided that (i) such
employees (A) do not have direct operational responsibility for development or
commercialization of the Competitive Product, and (B) need to know such
information, and (ii) such information shall only be used for the limited
purpose of financial planning, accounting, and (as determined to be necessary by
legal counsel to Millennium) for SEC filings or other similar required
disclosures or for Millennium royalty revenue forecasts. Millennium shall
promptly provide Schering in writing with a list identifying those named
individuals at Millennium who will be provided access to such information, and
shall notify Schering in writing of any changes to that list of named
individuals.
7.2 RECORD KEEPING AND AUDIT.
(a) BOOKS AND RECORDS. Each Party shall maintain (and shall cause its
applicable Affiliates to maintain) true, accurate and complete books and records
with respect to any other payments paid or payable or credits or refunds due by
or among the Parties and their respective Affiliates hereunder (including,
without limitation, Net Sales and Patent Costs and any invoices or source
documentation and any supporting calculations or documentation with respect
thereto) (collectively, the "Books and Records"). Each Party shall keep (and
shall cause each of its applicable Affiliates to keep) the Books and Records at
its principal place of business at all times during the term of this A-R
Agreement and shall continue to maintain (and shall cause each of its applicable
Affiliates to maintain) the Books and Records for the longer of (A) such period
as may be required by applicable law, or (B) such period as is required by such
Party's internal record retention practices.
(b) AUDIT. Each Party shall have the right to audit the Books and
Records of the other Party in accordance with this Section. An internationally
recognized independent accounting firm retained by the auditing Party, to whom
the audited Party has no reasonable objection, shall have the right, upon
reasonable prior written notice, to have access to the Books and Records for the
sole purpose of determining the appropriateness of the calculation of the
payments or credits due, and amounts required to be refunded or reimbursed,
under this A-R Agreement. Such examination shall be conducted during regular
business hours no more than once in each calendar year during the term of this
A-R Agreement and only with respect to any calendar year ending not more than
three years prior to such Party's request.
(c) EXPENSE OF AUDIT. Any audit undertaken by a Party pursuant to this
Section 7.2 shall be at auditing Party's cost and expense. In the event any such
audit reveals a miscalculation, incorrect entry or other matter that has
resulted in an overcharge or undercharge, the applicable Party shall promptly
make a single payment to the other of an amount equal to the sum of such
overcharge or undercharge, as the case may be, together with interest on the
late payment, which interest shall accrue at the annual rate of LIBOR plus 1%.
Notwithstanding the foregoing, if such overcharge exceeds five percent (5%) of
the amount due for the period being audited, then the reasonable out-of-pocket
costs and expenses incurred by the auditing Party in connection with such audit
shall be reimbursed by the audited Party.
7.3 MEDICAL INQUIRIES.
(a) SCHERING TERRITORY. Schering shall handle all medical questions or
inquiries from members of the medical profession regarding the INTEGRILIN
Products in the Schering Territory at Schering's expense. Millennium shall refer
to Schering all such questions and inquiries within forty-eight (48) hours of
receipt. In no event will Millennium respond to any such medical question or
inquiry.
(b) OUTSIDE THE SCHERING TERRITORY. Millennium or its designee shall
handle all medical questions or inquiries from members of the medical profession
regarding the INTEGRILIN Products outside the Schering Territory at Millennium's
expense. Schering shall refer to Millennium all such questions and inquiries
within forty-eight (48) hours of receipt.
7.4 PUBLICATIONS. Millennium shall not publish or present the results of
studies carried out under the Collaboration Agreement or this A-R Agreement. To
the extent that Schering or its Affiliates has direct or indirect control over
the publication of data and results arising from studies involving Compound
and/or INTEGRILIN Product that carried out under the Collaboration Agreement or
this A-R Agreement, and subject to the terms of Section 10.2, Schering will
provide the intellectual property counsel of Millennium a copy of any proposed
written publication of data and results arising from such studies (a
"Publication"). Schering will use good faith efforts to provide Millennium with
a copy of any such Publication by Schering or its Affiliates at least thirty
(30) days prior to their intended submission for publication, or with respect to
Publications by Third Party investigators performing such studies, will provide
Millennium with a copy promptly after the Publication becomes available to
Schering. Requests for review of Publications pursuant to this Section 7.4 shall
be furnished to the Chief Patent Counsel of Millennium (or his or her designee,
of each Party.). Nothing contained in this Section 7.4 shall prohibit the
inclusion of information necessary to be included in a patent application,
except for unlicensed Confidential Information of the nonfiling Party. To the
extent practical, as Schering establishes new relationships with Third Party
clinical investigators to conduct studies involving the Compound and/or
INTEGRILIN Product, Schering will endeavor to enter into agreements limiting
publication of data and results from studies by such investigators in a manner
consistent with the principles described above, but shall have no liability for
the failure to secure such agreements.
ARTICLE 8
LICENSES
8.1 PATENT LICENSES TO SCHERING. Millennium grants to Schering under the
Millennium Patents (a) an exclusive (even as to Millennium) license in the
Schering Territory to use (other than to research and develop), sell, offer for
sale and have sold the Compound and INTEGRILIN Products, and (b) a non-exclusive
license to research, develop, make, have made, use, and import the Compound and
INTEGRILIN Products worldwide solely for purposes of exercising its rights under
the grant set forth in clause (a) above, in each case under the terms and
conditions of this A-R Agreement. Schering may grant sublicenses under the
Millennium Patents only with the prior approval of Millennium (which approval
shall be promptly considered and not unreasonably withheld); provided, that
Schering may grant sublicenses without prior approval to Affiliates of Schering
(or any successor thereto) in which Schering (or any successor thereto) holds
greater than 50% control. In the event of any such sublicense to an Affiliate of
Schering, Schering Corporation (or any successor thereto) shall remain primarily
liable for the performance of all obligations by such Affiliate in the United
States, and Schering Ltd. shall remain primarily liable for the performance of
all obligations by such Affiliate outside the United States.
8.2 PATENT LICENSES TO MILLENNIUM. Schering grants to Millennium under the
Schering Patents (a) an exclusive (even as to Schering) license in the European
Territory to use (other than to research and develop), sell, offer for sale and
have sold the Compound and INTEGRILIN Products, and (b) a non-exclusive license
to research, develop, make, have made, use, and import the Compound and
INTEGRILIN Products worldwide solely for purposes of exercising its rights under
the grant set forth in clause (a) above, in each case subject to the terms and
conditions of this A-R Agreement. Millennium may grant sublicenses, PROVIDED,
that Millennium (or any successor thereto) shall remain primarily liable for the
performance of all obligations by such sublicensee.
8.3 IMPORTATION. Schering shall not, and shall not authorize or permit its
sublicensees to, import any Compound or INTEGRILIN Product in the European
Territory for use in a manner inconsistent with the exclusive grant to
Millennium set forth in Section 8.2(a). Millennium shall not, and shall not
authorize or permit its sublicensees to, import any Compound or INTEGRILIN
Product in the Schering Territory for use in a manner inconsistent with the
exclusive grant to Schering set forth in Section 8.1(a).
8.4 SPECIAL PATENT LICENSE TO SCHERING. In addition to the licenses granted
in Section 8.1, Millennium grants to Schering a worldwide, royalty-free,
irrevocable, perpetual license, with right of sublicense, under the Patents
assigned to COR and Millennium under Section 12.1 of the Collaboration Agreement
for all purposes other than the activities covered by the licenses granted in
Section 8.1. Such license shall survive the expiration or termination of this
A-R Agreement and shall be (i) exclusive (even as to Millennium) with respect to
such Patents which result from inventions made solely by Schering employees and
(ii) non-exclusive with respect to such Patents which resulted from inventions
made jointly by Schering employees (on the one hand) and COR or Millennium
employees (on the other hand).
8.5 NONEXCLUSIVE KNOW-HOW LICENSE TO SCHERING. Subject to the royalty
obligations in Section 6.1(b), 6.2 and 6.3, Millennium grants Schering a
non-exclusive, perpetual, worldwide license to use Millennium Know-how for any
purpose, other than to sell, offer for sale and have sold the Compound and
INTEGRILIN Products in the European Territory. The license granted in this
Section includes the right to sublicense. No license is granted to Schering to
use any information it obtains solely by reason of its review of Millennium
Patents and Patent applications or with respect to the prosecution history of
such Patents and Patent applications other than for the activities covered by
the licenses granted in Section 8.1.
8.6 NONEXCLUSIVE KNOW-HOW LICENSE TO MILLENNIUM. Except as provided in
Article 10 and subject to the royalty obligation in Section 6.6, Schering grants
Millennium a non-exclusive, perpetual, worldwide license to use Schering
Know-how for any purpose, other than to sell, offer for sale and have sold the
Compound and INTEGRILIN Products in the Schering Territory. The license granted
in this Section includes the right to sublicense.
8.7 THIRD PARTY TECHNOLOGY.
(a) The licenses granted under Sections 8.1 through 8.6 contemplate
sublicenses of Third Party technology. Any sublicense of Third Party technology
hereunder shall be subject to the terms and conditions of the license under
which such sublicense is granted. Any royalties paid or payable to Third Parties
for the manufacture, use or sale of INTEGRILIN Products that are sold in the
Schering Territory prior to the Closing Date shall be paid by the Parties in
accordance with the terms of the Collaboration Agreement. Any royalties paid to
Third Parties attributable to the manufacture, use or sale of INTEGRILIN
Products that are sold in the Schering Territory on or after the Closing Date
shall be borne and paid by Schering; provided that Schering shall be entitled to
a setoff for certain royalties against any royalty owed to Millennium on the
sale of such INTEGRILIN Products in the United States to the extent expressly
provided for in Section 6.4(a) and (c) and a setoff for certain royalties
against any royalty owned to Millennium on the sale of such INTEGRILIN Products
outside the United States to the extent expressly provided for in Section 6.4(b)
and (c). In the event of a reversion or termination of license rights in a
country or countries in the Schering Territory resulting in the payment of
royalties on Net Sales in such country or countries by Millennium to Schering,
then Millennium shall be similarly entitled to a setoff for certain royalties
against any royalty owed to Schering on the sale of such INTEGRILIN Products in
the Schering Territory to the extent expressly provided for in Sections 6.4(a)
and (c) with respect to the United States and Section 6.4(b) and (c) with
respect to countries in the Schering Territory outside the United States.
(b) During the term of this A-R Agreement, if either Party becomes
aware of material Third Party rights that may be desirable to license in order
to manufacture, market and sell INTEGRILIN Products, it will notify the other
Party. Schering will determine whether and on what terms a license should be
sought under such rights in the Schering Territory and will have the sole right
to pursue such a license. Millennium will determine whether and on what terms a
license should be sought under such rights outside the Schering Territory and
will have the sole right to pursue such a license. In the event that such
acquired rights results in payments to a Third Party, such payments shall be
treated in the manner set forth in Section 8.7(a) above.
8.8 LICENSE GRANTS TO SCHERING ENTITIES. The licenses granted to Schering
hereunder, including without limitation licenses granted in Sections 8.1, 8.4
and 8.5, shall be deemed to be granted to Schering Corporation with respect to
the United States and to Schering Ltd. with respect to all other countries.
8.9 EXCLUSIVE RIGHTS; USE OUTSIDE FIELD.
(a) The exclusive licenses granted in Sections 8.1(a) and 8.2(a) shall
be exclusive only to the extent the licensor has the right to grant an exclusive
license with respect to the Patent in question.
(b) Each Party hereby covenants to the other that it will not practice
the Patents or Know-how of the other Party except as expressly licensed in
Article 8 or Article 12 of this A-R Agreement.
ARTICLE 9
PATENTS; INFRINGEMENT; TRADEMARKS
9.1 PATENTABLE INVENTIONS.
(a) Prior to the Closing Date, the rights and obligations of the
Parties with respect to patentable inventions shall be governed by the terms of
the Collaboration Agreement, and following the Closing Date this Section 9.1
shall govern. If a patentable invention is conceived of by the employees of the
Parties or their agents in the course of practicing the licenses granted under
Article 8 during the term of this A-R Agreement, the Parties shall discuss that
invention and the desirability of filing patent applications covering that
invention. The Party whose employees or agents made the invention shall make the
final decision with respect to such filings. If an invention is made jointly by
the employees of each Party, patent counsel designated by each Party shall
discuss and determine whether a patent application covering such invention shall
be filed.
(b) Each Party shall select its own counsel and bear its own expenses
incurred in filing and prosecuting its Patents under this Section; PROVIDED that
(i) Schering shall promptly reimburse Millennium for fifty percent (50%) of
Millennium's Patent Costs relating to Patents and patent applications in all
countries other than in the European Territory, and (ii) Millennium shall
promptly reimburse Schering for fifty percent (50%) of Schering's Patent Costs
relating to Patents and patent applications in all countries in the Schering
Territory. For clarity, as between the Parties, Millennium shall bear one
hundred percent (100%) of the Patent Costs relating to Patent and patent
applications in the European Territory.
(c) Each Party shall provide the other Party with drafts of any new
patent application that covers the manufacture or use of an INTEGRILIN Product
prior to filing that application in the United States, allowing adequate time
for review and comment by the other Party if possible; PROVIDED, HOWEVER, the
providing Party shall not be obligated to delay the filing of any patent
application. The receiving Party shall maintain any such patent application in
confidence, pursuant to Article 10. This requirement for provision of drafts
shall not apply to Millennium Patents (including patent applications) arising
from Millennium Patents in existence as of April 10, 1995.
9.2 SETTLEMENT OF THIRD PARTY CLAIMS FOR INTEGRILIN PRODUCTS.
(a) If a Third Party asserts that a patent or other right owned by it
is infringed by the manufacture, use, sale or import of an INTEGRILIN Product by
Schering or its sublicensee, the Party first obtaining knowledge of such a claim
shall immediately provide the other Party notice of such claim and the related
facts in reasonable detail. In such event, with respect to the Schering
Territory, Schering may attempt to settle a claim or action or otherwise resolve
the problem raised by the asserted infringement; PROVIDED that Schering shall
not settle such claim or action without the prior written consent of Millennium
if such settlement (i) would require Millennium to bear any expense or reduction
in royalties other than those expressly provided for in Section 9.2(c), below,
(ii) makes an admission of invalidity or unenforceability of the Millennium
Patents; PROVIDED FURTHER that such consent shall be promptly considered and not
unreasonably withheld. The matter shall be deemed settled and resolved if
Schering or its sublicensee obtains: (A) a statement or representation from the
third party that: (1) no legal action will be taken against Millennium, Schering
and Schering's sublicense, or (2) the patent or other right is not infringed by
Millennium, Schering or, Schering's sublicensee's sale of INTEGRILIN Products in
that country and (B) either (1) a license permitting Schering or such
sublicensee to use the Third Party technology in question for the manufacture,
use and sale of INTEGRILIN Products in that country; or (2) a holding that the
patent is invalid, or the patent or other right is unenforceable or not
infringed by a court of competent jurisdiction from which no appeal has or can
be taken. Millennium shall cooperate with Schering in its efforts to settle or
resolve any such matter, including, without limitation, by granting cross
licenses under the Millennium Patents.
(b) If Schering's efforts to settle or otherwise resolve such claim are
not undertaken or are unsuccessful, Schering shall have the primary right, but
not the obligation, to defend against such claim. Millennium shall cooperate
with Schering at Schering's request and expense in such defense and shall have
the right to be represented by counsel of its own choice and at Millennium's
expense. If Schering shall fail to defend against such claim within a period of
one hundred and twenty (120) days after receiving written notice from Millennium
or otherwise of such claim, Millennium shall have the right to defend by counsel
of Millennium's own choice at Millennium's expense, and Schering shall cooperate
with Millennium at Millennium's request and expense in such defense and shall
have the right, at Schering's own expense, to be represented by counsel of its
own choice.
(c) ALLOCATION OF EXPENSE ROYALTY REDUCTION.
(i) If, as a result of a settlement permitted under this Section or
otherwise approved by Millennium or litigation under Section 9.2, Schering or
its sublicensee is required to pay the Third Party a royalty or make any payment
of any kind with respect to the Existing INTEGRILIN Product (including, without
limitation, attorneys' fees) for the rights necessary to practice or use of (A)
the manufacturing process used by Millennium and its third-party suppliers to
manufacture the Existing INTEGRILIN Product, or (B) the manufacturing process
independently developed by UCB that is filed for Regulatory Approval with a
Governmental Authority, Schering may deduct from the amount of royalties owed to
Millennium in connection with the United States, [**]% of the amount of the
royalty or such other amount payable to the Third Party in respect of the sale
of INTEGRILIN Products up to, but not more than, [**]% of the amounts otherwise
payable to Millennium in connection with sales of such INTEGRILIN Products in
the United States. The provisions of this Section 9.2 shall not apply in the
event the Third Party claim is made with respect to technology that does not
cover the manufacture, use or sale of INTEGRILIN Product or with respect to the
royalties payable to Solvay under the Solvay Agreement in connection with the
manufacture of bulk INTEGRILIN Products employing the Solvay manufacturing
process as authorized under the Solvay Agreement.
(ii) If, as a result of a settlement permitted under this Section
or otherwise approved by Millennium or litigation under Section 9.2, Schering or
its sublicensee is required to pay the Third Party a royalty or make any payment
of any kind (including, without limitation, attorneys' fees) for the right to
manufacture, use, sell or import the INTEGRILIN Products in a particular country
in the Schering Territory outside the United States, Schering may deduct from
the amount of royalties owed to Millennium in connection with the same country,
[**]% of the amount of the royalty or such other amount payable to the Third
Party in respect of the sale of the allegedly infringing INTEGRILIN Product up
to, but not more than, [**]% of the amounts otherwise payable to Millennium in
connection with sales of such INTEGRILIN Product in that particular country. The
provisions of this Section 9.2 shall not apply in the event the Third Party
claim is made with respect to technology that does not cover the manufacture,
use or sale of INTEGRILIN Product or with respect to the royalties payable to
Solvay under the Solvay Agreement in connection with the manufacture of bulk
INTEGRILIN Products employing the Solvay manufacturing process as authorized
under the Solvay Agreement.
9.3 NO INFRINGING CONDUCT. A Party shall not be required to manufacture an
INTEGRILIN Product in a particular country if in the sole judgment of such Party
such manufacture may involve infringement of the patent rights of a Third Party.
9.4 INFRINGEMENT BY THIRD PARTIES. Schering and Millennium shall promptly
notify the other in writing of any alleged or threatened infringement of
Millennium Patents or Schering Patents, of which they become aware. Schering,
subject to any prior rights of Third Party licensee or licensors under
agreements entered into pursuant to Section 8.7(a), shall have the first right,
but not the obligation, to control the prosecution of any infringement described
in this Section 9.4. If Schering does not initiate an infringement action within
one hundred and twenty (120) days of learning of the infringement, Millennium
shall have the right, but not the obligation, to bring such an action, and
Schering shall not hinder the prosecution of such action in any way. In the
event either Party brings an infringement action in accordance with this Section
9.4, the other Party shall cooperate fully, including, if required to bring such
action, the furnishing of a power of attorney and the granting of any cross
licenses under the Millennium Patents or the Schering Patents; PROVIDED, that
neither Party shall be required to grant any such license with respect to its
Patents without its consent, such consent to be promptly considered and not
unreasonably withheld. The costs of any litigation commenced pursuant to this
Section 9.4, including attorneys' fees and expenses, but excluding any
allocation for internal resources devoted to the litigation, shall be borne
solely by the Party assuming the right to bring suit, and reimbursed to the
other Party to the extent the other Party incurs such expense. Any recovery
realized as a result of such litigation shall be paid to Schering and, to the
extent specifically attributable to lost sales, shall be deemed to be Net Sales
after deducting any expenses incurred by the Party assuming the right to bring
suit, including any expenses reimbursed to the other Party, and to the extent
recovered by or on behalf of Millennium, shall be paid to Schering. No
settlement or consent judgment or other voluntary final disposition of a suit
under this Section 9.4 may be entered into without the joint consent of
Millennium and Schering, which shall be promptly considered and not unreasonably
withheld. In countries other than the United States, such consent shall be
considered PER SE reasonable if the settlement does not impose an admission of
guilt, financial obligation, injunction against or other restriction upon
Millennium.
9.5 PRODUCT TRADEMARKS.
(a) The Existing INTEGRILIN Product is sold under either the trademark
INTEGRILIN(R) worldwide, unless the trademark INTEGRILIN is neither registrable
nor available for use in a particular country. If the trademark INTEGRILIN is
neither registrable nor available for use in a particular country in the
Schering Territory, the INTEGRILIN Product has been and shall be marketed in
such country under a trademark selected by Schering (e.g. INTEGRILINTM, without
limitation) (hereinafter, "Other Trademarks"). INTEGRILIN Products, other than
the Existing INTEGRILIN Product, shall be marketed in all countries in the
Schering Territory under trademarks selected by Schering in its sole discretion.
(b) Subject to Section 9.5(h), the mark INTEGRILIN will be owned solely
by Millennium worldwide and filed and prosecuted by outside counsel selected by
Schering in the Schering Territory. Schering will have the right and obligation
to file and prosecute the mark INTEGRILIN in each county in the Schering
Territory. Both Parties shall have the right to comment on and be copied on all
correspondence relating to filing and prosecution of the mark INTEGRILIN;
PROVIDED that Schering shall have ultimate responsibility and decision-making
authority regarding such filing and prosecution. Other trademarks selected by
Schering for sale of INTEGRILIN Products shall be owned in the Schering
Territory by Schering. For the purposes of Section 9.6, Schering shall be deemed
to be the prosecuting Party.
(c) All of the reasonable direct costs of in-house counsel, the fees
and expenses of outside counsel and other Third Parties and other reasonable
direct costs of searching, filing, prosecuting, maintaining and defending the
mark "INTEGRILIN" in the Schering Territory shall be borne by Schering.
(d) Millennium and Schering hereby grant each other limited,
non-sublicensable (except to Affiliates and as required for manufacture, use and
sale of the INTEGRILIN Products in the Schering Territory) rights to the use of
certain of their respective trademarks (including without limitation
"INTEGRILIN" and the Other Trademarks) and service marks, trade names and logos
used with an INTEGRILIN Product (collectively hereinafter referred to as
"Marks") in connection with the commercialization activities provided for in
this A-R Agreement and the other Transaction Agreements. To that end, Millennium
and Schering agree not to unreasonably withhold consent to the limited use of
the other Party's relevant Marks for the duration of this A-R Agreement in
connection with the commercialization activities provided for herein, and in the
other Transaction Agreements. In addition, subject to Section 9.5(h), Millennium
grants to Schering an exclusive (even as to Millennium), royalty-free license
(with the right to sublicense) to use the mark "INTEGRILIN" or Other Trademarks
for the manufacture, use, sale and import of INTEGRILIN Products (i) in the
United States, during the Royalty Term, and (ii) in all countries in the
Schering Territory other than the United States, through December 31, 2045;
PROVIDED in each case that such licenses shall lapse in the event this A-R
Agreement is terminated pursuant to Article 12.
(e) Each Party agrees to conform with the customary guidelines of the
granting Party under this Section 9.5 with respect to manner of use, and to
maintain the quality standards of the granting Party with respect to the goods
sold and services provided in connection with such Marks. Each Party recognizes
and agrees that, except as provided in Section 9.5(h), no ownership rights are
vested or created by the limited rights of use granted to the other Party in
connection with this use of its respective Marks, and that all use thereof
inures to the benefit of the owner of the Marks. Further, except when used in
accordance with any usage guidelines provided by the owner of the Mark, each
Party shall submit to the other Party any materials bearing the other Party's
Marks for review and approval prior to the use thereof and shall make no use of
the Marks of the other Party without the other Party's written consent.
(f) Each Party shall execute any documents required in the reasonable
opinion of the other Party to be entered as a "registered user" or recorded
licensee of the other Party's Marks, or to be removed as registered user or
licensee thereof.
(g) Without implying any right of use, each Party agrees to indemnify
and to hold the other Party harmless in the event that the other Party incurs
liability as a result of the use of the other Party's Marks, PROVIDED that
prompt notice is given to the owner of the Marks of any claim that the other
Party's Marks infringe the rights of a Third Party, and good faith cooperation
in the defense of the claim is provided.
(h) Millennium shall, upon receipt of a written request from Schering
with respect to a country in the Schering Territory, transfer and assign to
Schering, its successors and assigns without further consideration (i) all of
Millennium's right, title and interest in and to the trademark "INTEGRILIN" and
the related logos, trade dress and designs and the Other Trademarks, if any,
together with the registrations thereof in such country (collectively, the
"Assigned Marks"), together with all goodwill associated with said Assigned
Marks and symbolized by said Assigned Marks, and (ii) any and all rights to sue
for, and receive damages and other relief arising from, the infringement of the
Assigned Marks after the effective date of such transfer and assignment. Any
such transfer and assignment shall be completed as soon as practicable following
receipt of Schering's written transfer request. Schering may exercise its rights
under this Section 9.5(h) on a country-by-country basis at any time and from
time to time. The transfer and assignment of the Assigned Marks by Millennium to
Schering pursuant to this Section 9.5(h) shall be subject in each case to an
obligation on the part of Schering to transfer and assign the Assigned Marks
back to Millennium upon the termination of this A-R Agreement. All of costs and
expenses of the assignments and transfers specified in this Section 9.5(h) shall
be borne by Schering.
9.6 INFRINGEMENT OF TRADEMARKS. Except for routine trademark oppositions
where cost is not reasonably expected to exceed $1,500, which shall be the
responsibility of the prosecuting Party, with respect to an INTEGRILIN Product,
each Party shall notify the other Party with a copy to the General Counsel for
that Party promptly upon learning of any actual, alleged or threatened
infringement of any trademark or of any unfair trade practices, trade dress
imitation, passing off of counterfeit goods, or like offenses, or any such
claims brought by a Third Party in the Schering Territory against an INTEGRILIN
Product (hereinafter "Infringement"). Upon learning of such Infringement the
Parties shall confer and Schering shall have the right, but not the obligation,
at its sole expense to bring an action to deal with the Infringement. If
Schering so elects, Schering shall take all reasonable and appropriate steps to
resolve the Infringement, with the reasonable cooperation and assistance of the
Millennium, subject to reimbursement by Schering for its reasonable time and out
of pocket expense. If Schering fails to exercise this right within ninety (90)
days after receiving notice of an Infringement by Millennium, then Millennium
shall have the right, but not the obligation, at its sole expense to bring an
action to deal with the Infringement. If Millennium so elects, Millennium shall
take all reasonable and appropriate steps to resolve the Infringement, with the
reasonable cooperation and assistance of Schering, subject to reimbursement by
Millennium for its reasonable time and out of pocket expense. Any damages or
recovery shall first be applied to reimburse the expenses incurred by the Party
bringing the suit or action and the remainder shall, to the extent specifically
attributable to lost sales of an INTEGRILIN Product, be paid to Schering and be
added to Net Sales in that country.
9.7 VALIDITY AND ENFORCEABILITY CHALLENGES. In the event that a Third Party
asserts, as a defence or as a counterclaim in any infringement action under
Section 9.4, in a declaratory judgment or similar action or under the Drug Price
Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman), or similar
legislation outside the United States, that any Millennium Patent or Schering
Patent is invalid or unenforceable, Schering shall have the first right, but not
the obligation, through counsel of its choosing, to defend such Millennium
Patents and control any proceeding in connection therewith, at Schering's sole
cost. If Schering determines not to defend such Millennium Patent, Millennium
shall, at its sole cost, have the right to do so and to control any proceeding
in connection therewith. No settlement or consent judgment or other voluntary
final disposition of a suit under this Section 9.7 may be entered into without
the joint consent of Millennium and Schering, which shall be promptly considered
and not unreasonably withheld.
ARTICLE 10
CONFIDENTIALITY
10.1 TREATMENT OF CONFIDENTIAL INFORMATION. The Parties agree that during
the term of this A-R Agreement, and for a period of five (5) years after this
A-R Agreement expires or terminates, a Party receiving Confidential Information
of the other Party will (i) maintain in confidence such Confidential Information
to the same extent such Party maintains its own proprietary industrial
information of similar kind and value (but at a minimum each Party shall use
commercially reasonable efforts), (ii) not disclose such Confidential
Information to any Third Party without prior written consent of the other Party,
except for disclosures made in confidence to a Third Party sublicensee, business
partner or other party for use specifically in the development, manufacturing or
commercialization of the INTEGRILIN Products (e.g., clinical investigators,
strategic consultants and advisors, etc.), and (iii) not use such Confidential
Information for any purpose except those permitted by this A-R Agreement. As
used herein, "Confidential Information" shall mean all Information, and other
information and materials, received by either Party from the other Party
pursuant to this A-R Agreement and all Information developed or exchanged during
the term of the prior Collaboration Agreement. For the avoidance of doubt, the
Clinical Development Plans, the Marketing Plans and the data and other
Information set forth therein shall be deemed the Confidential Information of
Schering. A Party shall have no such obligation with respect to any portion of
such Confidential Information which:
(a) is publicly disclosed by the disclosing Party, either before or
after it becomes known to the receiving Party; or
(b) was known to the receiving Party, without obligation to keep it
confidential, prior to when it was received from the disclosing Party; or
(c) is subsequently disclosed to the receiving Party by a Third Party
lawfully in possession thereof without obligation to keep it confidential; or
(d) has been published by a Third Party; or
(e) has been independently developed by the receiving Party without the
aid, application or use of Confidential Information; or
(f) is required by law to be disclosed, but then only to the limited
extent of such legally required disclosure.
By virtue of the exclusive license grants set forth in Section 8, the
Parties acknowledge and agree that any and all Information relating to the
Compound or INTEGRILIN Products shall, irrespective of the Party that originally
disclosed such Information, be deemed to be Confidential Information of both
Parties, and each Party shall deemed to be a disclosing Party with respect
thereto, for purposes of this A-R Agreement.
10.2 PUBLICITY. The Parties agree that the public announcement of the
execution of this A-R Agreement shall be substantially in the form of the press
release attached as Appendix A. Any other publication, news release or other
public announcement relating to this A-R Agreement or to the performance
hereunder, shall first be reviewed and approved by both Parties, which approval
shall be promptly considered and not unreasonably withheld; PROVIDED, HOWEVER,
that any disclosure which is required by law, as advised by the disclosing
Party's counsel, may be made without the prior consent of the other Party,
although the other Party shall be given prompt notice of any such legally
required disclosure and to the extent practicable shall provide the other Party
an opportunity to comment on the proposed disclosure. In this regard, the
Parties recognize that Millennium is a publicly-held biopharmaceutical company,
that the INTEGRILIN Products are one of Millennium's first major revenue
generating products and that Millennium will need to provide information
regarding Millennium's projections of royalty revenue and status of INTEGRILIN
Products to the investment community from time to time without the need for
seeking prior consent of Schering; PROVIDED, HOWEVER, that except as required by
law, Millennium shall seek not to disclose information that would provide an
advantage to competitors or disclose confidential royalty rates such that
royalty revenue projections could reveal confidential Schering INTEGRILIN
Product sales projections. The Parties acknowledge that Millennium will be
obligated to file a copy of this A-R Agreement with the U.S. Securities and
Exchange Commission. Millennium will submit a copy of its proposed filing to
Schering for approval, which approval shall be promptly considered and not
unreasonably withheld.
10.3 USE OF INFORMATION FOR RELATED PRODUCTS. Neither Party shall use, or
to permit any Third Party to use, Confidential Information provided by the other
Party or developed in the course of the collaboration under the Collaboration
Agreement in the promotion or sale of any Competitive Product.
ARTICLE 11
EXPORT CONTROL
11.1 EXPORT CONTROL. This A-R Agreement is made subject to any restrictions
concerning the export of products or technical information from the United
States of America or other countries which may be imposed upon or related to
Millennium or Schering from time to time. Each Party agrees that it will not
export, directly or indirectly, any technical information acquired from the
other Party under this A-R Agreement or any products using such technical
information to a location or in a manner that at the time of export requires an
export license or other governmental approval, without first obtaining the
written consent to do so from the appropriate agency or other Governmental
Authority.
ARTICLE 12
TERM AND TERMINATION
12.1 TERM.
(a) Section 12.1(b) of A-R Agreement shall become effective on the
Execution Date. The remaining terms and conditions of this A-R Agreement shall
become effective upon Closing and shall remain in effect with respect to each
INTEGRILIN Product until the expiration of the Royalty Term. The terms and
conditions governing the conditions to Closing are set forth and governed by the
Transition Services Agreement.
(b) In the event that the conditions to Closing set forth in Section
5.2 of the Transition Services Agreement are not satisfied or waived on or
before December 31, 2005, then a Party whose conditions have not been satisfied
may, by written notice to the other Party terminate this A-R Agreement and the
other Transaction Agreements, whereupon neither Party shall have any further
obligation to the other hereunder or thereunder. If the Closing does not occur
and this A-R Agreement is terminated pursuant to this Section 12.1(b), the
Collaboration Agreement will remain in full force and effect, without giving
effect to this A-R Agreement or the other Transaction Agreements.
12.2 TERMINATION FOR BREACH.
(a) If either Party believes that the other is in material breach of
this A-R Agreement (including, without limitation, a breach relating to the
failure to use Diligent Efforts or commercially reasonable efforts), then the
non-breaching Party may deliver notice of such breach to the other Party. In
such notice the non-breaching Party shall identify the actions or conduct that
such Party would consider to be an acceptable cure of such breach. The allegedly
breaching Party shall have ninety (90) days to either cure such breach or, if
cure cannot be reasonably effected within such ninety (90) day period, to
deliver to the other Party a plan for curing such breach which is reasonably
sufficient to effect a cure. Such a plan shall set forth a program for achieving
cure as rapidly as practicable. Following delivery of such plan, the breaching
Party shall use Diligent Efforts to carry out the plan and cure the breach.
(b) If the Party receiving notice of breach fails to cure such breach
within the ninety (90) day period, or the Party providing the notice reasonably
determines that the proposed corrective plan or the actions being taken to carry
it out are not commercially practicable, the Party originally delivering the
notice may declare a breach hereunder upon thirty (30) days advance written
notice and, at its option, give notice of termination of this A-R Agreement. If
such breach pertains solely to the failure of a Party to use Diligent Efforts or
commercially reasonable efforts, as applicable, in a given country or countries,
such breach shall be subject to Section 12.3. Any other material breach shall be
subject to Section 12.4, below.
(c) If a Party gives notice of breach or termination under this Section
12.2 (including, without limitation, a notice relating to the failure to use
Diligent Efforts or commercially reasonable efforts) and the other Party
disputes whether such notice and termination are proper, then the issue of
whether such notice is effective or whether this A-R Agreement has been
terminated shall be resolved in accordance with Article 14. If as a result of
such dispute resolution process it is determined that the notice of breach or
termination was proper, then such notice shall be deemed effective on the day
following the date of final resolution of the issue under Article 14 and the
cure period provided hereby shall commence as of the date of such determination.
If as a result of such dispute resolution process it is determined that the
notice of breach or termination was improper, then such notice shall have no
effect.
(d) Notwithstanding any other provision of this A-R Agreement to the
contrary, Millennium shall have no right to terminate this A-R Agreement if
Schering is the breaching Party and such breach pertains solely to Schering's
failure to use Diligent Efforts to develop INTEGRILIN Products, including,
without limitation, any obligation to perform the Early ACS Study, the Add On
Studies or any other registration study under a Clinical Development Plan.
12.3 EFFECT OF TERMINATION FOR FAILURE TO USE DILIGENT OR COMMERCIALLY
REASONABLE EFFORTS.
(a) If Schering is the breaching Party and such breach pertains solely
to Schering's failure to use Diligent Efforts or commercially reasonable
efforts, as applicable, in a given country, Millennium shall only have the right
under Section 12.2 to terminate Schering's licenses (other than the licenses in
Sections 8.4 and 8.5) with respect to the applicable INTEGRILIN Product in such
country, and in such event, Schering hereby grants to Millennium an exclusive
(even as to Schering) license under the Schering Patents, with the right to
sublicense, subject to the royalty provisions of Section 6.6, to make, have
made, use, sell, offer for sale, have sold and import INTEGRILIN Products in
such country; PROVIDED, HOWEVER, that to the extent Schering still holds rights
in one or more other countries in the Schering Territory, it shall retain the
right to make, have made, use, import and export INTEGRILIN Products in the
country(ies) affected by the breach to the extent necessary to enable Schering
to continue to exercise its rights in those countries where Schering still holds
rights.
(b) In addition, if such failure to use Diligent Efforts pertains to
the United States, Millennium shall also have the right under Section 12.2 to
terminate the licenses granted to Schering under Section 8.1 and, in such event,
Schering hereby grants to Millennium an exclusive (even as to Schering) license
under the Schering Patents, with the right to sublicense, subject to the royalty
provisions of Section 6.6(a), to make, have made, use, sell, offer for sale,
have sold and import INTEGRILIN Products throughout the entire Schering
Territory.
12.4 EFFECT OF TERMINATION FOR OTHER BREACH.
(a) In the event of termination of this A-R Agreement by Millennium
pursuant to Section 12.2 for a material breach by Schering (other than failure
to use Diligent Efforts or commercially reasonable efforts), the licenses
granted to Schering under Section 8.1 shall terminate and in such event, in
addition to surviving provisions under Section 12.6, Schering grants to
Millennium an exclusive (even as to Schering) license under the Schering
Patents, with the right to sublicense, subject to the royalty provisions of
Section 6.6(a), to make, have made, use, sell, offer for sale, have sold and
import INTEGRILIN Products through out the world.
(b) In the event of termination of this A-R Agreement by Millennium for
material breach by Schering under Section 12.2, Schering shall assign to
Millennium all Regulatory Approvals relating to INTEGRILIN Products, and shall
cooperate with Millennium (at Schering's own expense) to effect such transfers
in an orderly fashion. Schering shall also, upon request of Millennium, assign
to Millennium to the extent permitted (and use commercially reasonable efforts
to obtain the consents of Third Parties required for such assignment) and use
commercially reasonable efforts to transfer to Millennium in an orderly fashion
to facilitate the uninterrupted supply of product (i) all related manufacturing
and/or supply contracts for the INTEGRILIN Product assigned to Schering by
Millennium after the Closing, and (ii) to the extent Schering has assumed such
activities in its own operations, the transfer of the then-current manufacturing
process to Millennium, its successor licensees and/or successor contract
manufacturers.
(c) In the event of termination of this A-R Agreement by Schering
pursuant to Section 12.2 for a material breach by Millennium, all rights and
obligations revert to Millennium in the manner provided for in 12.4(a) and (b),
however, such rights shall be subject to the additional royalty provisions of
section 6.6(b).
12.5 EFFECT OF BREACH OF, OR DISRUPTION UNDER THE SUPPLY AGREEMENT. In the
event the Supply Agreement is terminated for material breach by Millennium in
accordance with the terms of Section 8.2 of the Supply Agreement, Schering shall
have the right to terminate this A-R Agreement by giving Millennium thirty (30)
days prior written notice of termination. If Millennium breaches its obligations
under the Supply Agreement, or the supply of INTEGRILIN Products is otherwise
disrupted or delayed, Schering's obligations under this A-R Agreement to use
Diligent Efforts or commercially reasonable efforts, as the case may be, shall
be automatically reduced to take into account such breach, disruption or delay;
PROVIDED, that if the Supply Agreement is terminated, Schering shall use
commercially reasonable efforts to obtain an alternative source of supply for
the INTEGRILIN Products for the Schering Territory.
12.6 SURVIVAL. Except as provided in Section 12.1(b), the following
provisions shall survive any expiration or termination of this A-R Agreement for
the period of time specified: Section 7.2 and 15.6, Articles 1, 2, 10 (as
provided therein), 12, 13 and 14; Sections 5.4, 6.5, 6.6 through 6.9, 6.10,
6.11, 6.12, 6.13, 8.4, 8.5, 8.6, 11.1, 15.2 and 15.4 shall survive indefinitely;
the 50 year trademark license in Section 9.5(d), (e), (f), (g) and (h) shall
survive so long as its terms apply; Section 7.2 shall survive for 5 years
following the last commercial sale of products covered by such provisions.
Termination of this A-R Agreement shall not relieve the Parties of any liability
which accrued hereunder prior to the effective date of such termination nor
preclude either Party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this A-R
Agreement nor prejudice either Party's right to obtain performance of any
obligation. The remedies provided in Sections 9.2 and 9.4 are not exclusive of
other remedies available to a Party in law or equity.
ARTICLE 13
INDEMNIFICATION
13.1 INDEMNIFICATION BY SCHERING. Schering shall indemnify, defend and hold
harmless Millennium and its Affiliates, directors, officers, employees and
agents (collectively, the "Non-Schering Indemnified Party(ies)") from and
against any and all suits, claims, actions, demands, liabilities, losses or
expenses (including, without limitation, reasonable attorneys' and experts'
fees) (collectively "Losses") resulting directly or indirectly from: (a) the
breach of one or more of Schering's material obligations under this A-R
Agreement; (b) the negligence or intentional misconduct of Schering or its
Affiliates in connection with performance under this A-R Agreement; or (c) Third
Party product liability claims relating to INTEGRILIN Products QA/QC released
for use in the Schering Territory after the Closing Date but excluding any such
Third Party claims with respect to INTEGRILIN Products sold by or on behalf of a
Non-Schering Indemnified Party on or after the effective date of termination of
this A-R Agreement; except in each case (i) to the extent Schering is
indemnified by Millennium pursuant to any other Transaction Agreement, or (ii)
to the extent caused by the negligence or intentional misconduct of a
Non-Schering Indemnified Party. For purposes of clarity, failure by Schering to
QA/QC release INTEGRILIN Product shall not be an exception to the Third Party
product liability indemnification in clause (c), above.
13.2 INDEMNIFICATION BY MILLENNIUM. Millennium shall indemnify, defend and
hold harmless Schering, its Affiliates, and their directors, officers, employees
and agents (collectively, the "Schering Indemnified Party(ies)") from and
against any and all Losses arising out of acts or omissions on or after the
Closing resulting directly or indirectly from: (a) the breach of one or more of
Millennium's material obligations under this A-R Agreement; (b) any use by
Millennium of information or documents disclosed by Schering pursuant to this
A-R Agreement, (c) the negligence or intentional misconduct of Millennium or its
Affiliates in connection with the performance under this A-R Agreement; or (d)
Third Party product liability claims relating to INTEGRILIN Products sold by or
on behalf of a Non-Schering Indemnified Party on or after the effective date of
the termination of this A-R Agreement, except in each case to the extent caused
by the negligence or intentional misconduct of Schering or any other Schering
Indemnified Party.
13.3 RELATIONSHIP TO OTHER AGREEMENTS. All claims for indemnification that
arise out of an act or omission of a Party prior to the Closing Date shall be
claimed solely under the indemnification provisions in Article 16 of the
Collaboration Agreement or under Article 11 of the European Commercialization
Agreement, as provided for under their terms. Except as provided in Section
13.4, all claims for indemnification that arise out of an act or omission of a
Party after the Closing Date that fall within the scope of the indemnification
under the Transition Services Agreement shall be claimed solely under the
indemnification provisions in Article IX of the Transition Services Agreement
and all claims for indemnification that arise out of an act or omission of a
Party after the Closing Date that fall within the scope of the indemnification
under the Supply Agreement shall be claimed solely under the indemnification
provisions in Article X of the Supply Agreement.
13.4 PRE-CLOSING LIABILITY. The rights and obligations of the Parties with
respect to any and all Losses resulting directly or indirectly from development,
use or commercialization of INTEGRILIN Products, including, without limitation,
any product liability claims relating to INTEGRILIN Products QA/QC released for
use in the Schering Territory, on or before the Closing Date shall continue to
be controlled by and subject to the terms and conditions of the Collaboration
Agreement or European Commercialization Agreement, as the case may be,
including, without limitation, the indemnification obligations in the
Collaboration Agreement (or the European Commercialization Agreement.
13.5 PROCEDURES. Each Party agrees to promptly give the other Party written
notice of any claim for which indemnification may be sought under this A-R
Agreement. Failure of an indemnified Party to provide notice of a claim to the
indemnifying Party shall only affect the indemnified Party's right to
indemnification if and to the extent that such failure has a material adverse
effect on the indemnifying Party's ability to defend or the nature or the amount
of the relevant Losses. The indemnifying Party shall have the right to assume
the defense of any suit or claim related to the Losses if it has assumed
responsibility for the suit or claim in writing; PROVIDED, HOWEVER, that if in
the reasonable judgment of the indemnified Party, such suit or claim involves an
issue or matter which could have a materially adverse effect on the business
operations or assets of the indemnified Party, the indemnified Party may waive
its rights to indemnity under this A-R Agreement and control the defense or
settlement thereof, but in no event shall any such waiver be construed as a
waiver of any indemnification rights which such Party may have at law or in
equity. If the indemnifying Party defends the suit or claim, the indemnified
Party may participate in (but not control) the defense thereof at its sole cost
and expense.
13.6 SETTLEMENTS. Neither Party may settle a claim or action related to any
Losses without the prior written consent of the other Party if such settlement
would impose any monetary obligation on the other Party or require the other
Party to submit to an injunction or otherwise limit the other Party's rights
under this A-R Agreement; provided that such consent shall be promptly
considered and not unreasonably withheld. Any payment made by a Party to settle
any such claim or action shall be at its own cost and expense.
13.7 NO CONSEQUENTIAL DAMAGES. With respect to any claim by one Party
against the other arising out of the performance or failure of performance of
the other Party under this A-R Agreement, the Parties expressly agree that the
liability of such Party to the other Party for such breach shall be limited
under this A-R Agreement or otherwise at law or equity to direct damages only
and in no event shall a Party be liable for any indirect, special, punitive,
exemplary or consequential damages suffered or incurred by the other Party.
ARTICLE 14
DISPUTE RESOLUTION; GOVERNING LAW
14.1 DISPUTES. The Parties recognize that disputes as to certain matters
may from time to time arise during the term of this A-R Agreement which relate
to either Party's rights and/or obligations hereunder. It is the objective of
the Parties to establish procedures to facilitate the resolution of disputes
arising under this A-R Agreement in an expedient manner by mutual cooperation
and without resort to litigation. To accomplish this objective, the Parties
agree to follow the procedures set forth in this Article 14 if and when a
dispute arises under this A-R Agreement. Any Party may, by written notice to the
other, have a dispute referred to their respective executive officers designated
below or their successors, for attempted resolution by good faith negotiations
within thirty (30) days after such notice is received. Said designated officers
are as follows:
FOR SCHERING: Executive Vice President & President - Global Pharmaceutical
Business
FOR MILLENNIUM: President
The Schering representative participating in such dispute resolution
process shall in any event be a person with worldwide responsibility for the
research, development, manufacture and marketing of all pharmaceutical products
of Schering. In the event the designated executive officers are not able to
resolve such dispute within such 30-day period, either Party may then invoke the
provisions of Section 14.2 below.
14.2 ALTERNATIVE DISPUTE RESOLUTION. Any disputed matter that remains
unresolved under 14.1 shall be finally settled by binding arbitration ("ADR") in
accordance with the commercial arbitration rules of the American Arbitration
Association ("AAA") then in force by a panel of three arbitrators appointed in
accordance with said rules (the "Arbitrators"); PROVIDED that the Arbitrators
shall have appropriate experience in the biopharmaceutical industry. The place
of arbitration shall be New York, New York, and any written evidence originally
in a language other than English shall be submitted in English translation
accompanied by the original or a true copy thereof. The award rendered shall be
final and binding upon all parties participating in such arbitration. The
judgment rendered by the Arbitrators may, at the Arbitrators' discretion,
include costs of arbitration, reasonable attorneys' fees and reasonable costs
for any experts and other witnesses. Nothing in this A-R Agreement shall be
deemed as preventing either Party from seeking injunctive relief from any court
having jurisdiction over the Parties and the subject matter of the dispute as
necessary to protect any Party's name, proprietary information, trade secrets,
know-how or any other proprietary rights. Judgment upon the award may be entered
in any court having jurisdiction, or application may be made to such court for
judicial acceptance of the award and/or an order of enforcement as the case may
be. The Parties agree to use their good faith efforts to resolve the dispute
within three (3) months (if the dispute relates to the failure to use Diligent
Efforts or commercially reasonable efforts) or within six (6) months (for all
other disputes) of receipt of the original notice of dispute and any arbitration
pursuant to this Section 14.2 must be completed within one (1) year of such
notice. Notwithstanding the foregoing, any disputes regarding the scope,
validity, enforceability or inventorship of any patents or patent applications
shall be submitted for final resolution by a court of competent jurisdiction.
14.3 GOVERNING LAW. This A-R Agreement shall be construed in accordance
with, and governed in all respects by, the laws of the State of New York
(without giving effect to principles of conflicts of laws that would require the
application of any other law).
ARTICLE 15
MISCELLANEOUS
15.1 ENTIRE AGREEMENT; AMENDMENT. This A-R Agreement, the other Transaction
Agreements, and the surviving provisions of the Collaboration Agreement and the
European Commercialization Agreement set forth in the Transition Services
Agreement set forth the complete, final and exclusive agreement and all the
covenants, promises, agreements, warranties, representations, conditions and
understandings between the Parties hereto and supersede and terminate all prior
agreements and understandings between the Parties. For clarity, the following
agreements are unaffected by this A-R Agreement and shall survive the Closing:
(a) Vytorin Clinical Outcomes Study letter agreement dated January 31, 2005
pertaining to the conduct of the IMPROVE IT trial by Schering and Merck & Co. in
connection with the Early ACS Study, (b) Letter from Millennium dated July 21,
2003 and countersigned by Schering on July 27, 2003, re: UCB New Process
Development Program-Expense Apportionment Agreement confirming both parties'
acceptance of the JSC's decision to jointly fund the UCB New Process Development
Program (as described in Attachment A to that letter), as modified by the Supply
Agreement, and (c) Security Agreement, dated April 21, 1999, entered into
between COR Therapeutics, Inc. and Schering Corporation granting to Schering a
security interest in certain Collateral (as defined therein) related to
inventory of INTEGRILIN Product. There are no covenants, promises, agreements,
warranties, representations, conditions or understandings, either oral or
written, between the Parties other than as are set forth herein and therein. No
subsequent alteration, amendment, change or addition to this A-R Agreement shall
be binding upon the Parties unless reduced to writing and signed by an
authorized officer of each Party.
15.2 BANKRUPTCY.
(a) All rights and licenses granted under or pursuant to this A-R
Agreement, including amendments hereto, by each Party to the other Party are,
for all purposes of Section 365(n) of Title 11 of the U.S. Code ("Title 11"),
licenses of rights to intellectual property as defined in Title 11. Each Party
agrees during the term of this A-R Agreement to create and maintain current
copies or, if not amenable to copying, detailed descriptions or other
appropriate embodiments, to the extent feasible, of all such intellectual
property. If a case is commenced by or against either Party (the "Bankrupt
Party") under Title 11, then, unless and until this A-R Agreement is rejected as
provided in Title 11, the Bankrupt Party (in any capacity, including
debtor-in-possession) and its successors and assigns (including, without
limitation, a Title 11 Trustee) shall, at the election of the Bankrupt Party
made within sixty (60) days after the commencement of the case (or, if no such
election is made, immediately upon the request of the non-Bankrupt Party) either
(i) perform all of the obligations provided in this A-R Agreement to be
performed by the Bankrupt Party including, where applicable and without
limitation, providing to the non-Bankrupt Party portions of such intellectual
property (including embodiments thereof) held by the Bankrupt Party and such
successors and assigns or otherwise available to them or (ii) provide to the
non-Bankrupt Party all such intellectual property (including all embodiments
thereof) held by the Bankrupt Party and such successors and assigns or otherwise
available to them.
(b) If a Title 11 case is commenced by or against the Bankrupt Party
and this A-R Agreement is rejected as provided in Title 11 and the non-Bankrupt
Party elects to retain its rights hereunder as provided in Title 11, then the
Bankrupt Party (in any capacity, including debtor-in-possession) and its
successors and assigns (including, without limitation, a Title 11 Trustee) shall
provide to the non-Bankrupt Party all such intellectual property (including all
embodiments thereof) held by the Bankrupt Party and such successors and assigns
or otherwise available to them immediately upon the non-Bankrupt Party's written
request therefor. Whenever the Bankrupt Party or any of its successors or
assigns provides to the non-Bankrupt Party any of the intellectual property
licensed hereunder (or any embodiment thereof) pursuant to this Section 15.2,
the non-Bankrupt Party shall have the right to perform the obligations of the
Bankrupt Party hereunder with respect to such intellectual property, but neither
such provision nor such performance by the non-Bankrupt Party shall release the
Bankrupt Party from any such obligation or liability for failing to perform it.
(c) All rights, powers and remedies of the non-Bankrupt Party provided
herein are in addition to and not in substitution for any and all other rights,
powers and remedies now or hereafter existing at law or in equity (including,
without limitation, Title 11) in the event of the commencement of a Title 11
case by or against the Bankrupt Party. The non-Bankrupt Party, in addition to
the rights, power and remedies expressly provided herein, shall be entitled to
exercise all other such rights and powers and resort to all other such remedies
as may now or hereafter exist at law or in equity (including, without
limitation, under Title 11) in such event. The Parties agree that they intend
the foregoing non-Bankrupt Party rights to extend to the maximum extent
permitted by law and any provisions of applicable contracts with Third Parties,
including without limitation for purposes of Title 11, (i) the right of access
to any intellectual property (including all embodiments thereof) of the Bankrupt
Party or any Third Party with whom the Bankrupt Party contracts to perform an
obligation of the Bankrupt Party under this A-R Agreement, and, in the case of
the Third Party, which is necessary for the development, registration and
manufacture of licensed products and (ii) the right to contract directly with
any Third Party described in (i) in this sentence to complete such contracted
work. Any intellectual property provided pursuant to the provisions of this
Section 15.2 shall be subject to the licenses set forth elsewhere in this A-R
Agreement and the payment obligations of this A-R Agreement, which shall be
deemed to be royalties for purposes of Title 11.
15.3 FORCE MAJEURE. Both Parties shall be excused from the performance of
their obligations under this A-R Agreement to the extent that such performance
is prevented by force majeure and the nonperforming Party promptly provides
notice of the prevention to the other Party. Such excuse shall be continued so
long as the condition constituting force majeure continues and the nonperforming
Party takes reasonable efforts to remove the condition. For purposes of this A-R
Agreement, force majeure shall include conditions beyond the control of the
Parties, including, without limitation, an act of God, voluntary or involuntary
compliance with any regulation, law or order of any government, war, civil
commotion, terrorism, labor strike or lock-out, epidemic, failure or default of
public utilities or common carriers, destruction of production facilities or
materials by fire, earthquake, storm or like catastrophe; PROVIDED, HOWEVER, the
payment of invoices due and owing hereunder shall not be delayed by the payor
because of a force majeure affecting the payor.
15.4 NOTICES. Any notice required or permitted to be given under this A-R
Agreement shall be in writing, shall specifically refer to this A-R Agreement
and shall be deemed to have been sufficiently given for all purposes if mailed
by first class certified or registered mail, postage prepaid, express delivery
service or personally delivered. Unless otherwise specified in writing, the
mailing addresses of the Parties shall be as described below.
For Millennium: Millennium Pharmaceuticals, Inc.
40 Landsdowne Street
Cambridge, MA 02139
Attn: Chief Executive Officer
With a Copy to: Millennium Pharmaceuticals, Inc.
40 Landsdowne Street
Cambridge, MA 02139
Attn: General Counsel
For Schering Ltd.: Schering-Plough, Ltd.
Weystrasse 20, P.O. Box CH-6000
Lucerne 6
Switzerland
Attn: President
For Schering Corporation: Schering Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attention: General Counsel
With a copy to: Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attention: Senior Vice President Global Licensing
15.5 CONSENTS NOT UNREASONABLY WITHHELD OR DELAYED. Whenever provision is
made in this A-R Agreement for either Party to secure the consent or approval of
the other, that consent or approval, unless indicated to be in a Party's "sole
discretion," shall be promptly considered and not unreasonably withheld, and
whenever in this A-R Agreement provisions are made for one Party to object to or
disapprove a matter, such objection or disapproval shall not unreasonably be
exercised.
15.6 MAINTENANCE OF RECORDS. Each Party shall keep and maintain all records
required by law or regulation with respect to INTEGRILIN Products and shall make
copies of such records available to the other Party upon request.
15.7 UNITED STATES DOLLARS. References in this A-R Agreement to "Dollars"
or "$" shall mean the legal tender of the United States of America.
15.8 INDEPENDENT CONTRACTORS. The relationship between Millennium and
Schering is that of independent contractors and neither Party shall have the
power to bind or obligate the other Party in any manner.
15.9 NO STRICT CONSTRUCTION. This A-R Agreement has been prepared jointly
and shall not be strictly construed against either Party.
15.10 ASSIGNMENT.
(a) Neither Party may assign or transfer this A-R Agreement or any
rights or obligations hereunder without the prior written consent of the other
(which shall be promptly considered and not unreasonably withheld); PROVIDED,
HOWEVER, that (i) a Party may make such an assignment without the other Party's
consent to Affiliates, and (ii) in the event of a change in control of a Party,
such Party may assign or transfer its rights and obligations under this A-R
Agreement to the surviving entity without the prior consent of the other Party;
PROVIDED that the assignee agrees to be bound to all of the terms and conditions
of this A-R Agreement applicable to such assigned or transferred rights and
obligations. Any permitted successor or assignee of rights and/or obligations
hereunder shall, be subject to the successor entity agreeing in writing with the
other Party to expressly assume performance of all of such assigning Party's
rights and/or obligations under this A-R Agreement. Any permitted assignment
shall be binding on the successors of the assigning Party. In the event a Party
assigns this A-R Agreement to an Affiliate, the assigning Party shall remain
primarily liable to the other Party for the performance of the assignee
Affiliate. Any assignment or attempted assignment by either Party in violation
of the terms of this Section 15.10 shall be null and void and of no legal
effect.
(b) Any divestiture or assignment (except in a permitted change of
control scenario (see subsection (a) above) by Schering of an INTEGRILIN Product
(or its successor in interest following a change in control of Schering) shall
be subject to the prior written consent of Millennium (which consent shall be
promptly considered and not unreasonably withheld); provided that, in the event
that Schering (or its successor in interest following a change in control of
Schering) acquires rights to a product deemed competitive by a regulatory
authority from a Third Party as a result of an acquisition, license, merger, or
change of control and is legally compelled by a Governmental Authority to divest
or assign to a Third Party Schering's (or its successor's) rights and
obligations to either the INTEGRILIN Product or such competitive product, and
Schering decides to divest or assign the INTEGRILIN Product in order to comply,
then Millennium shall not have the right to withhold consent to such divestiture
or assignment if (i) such Governmental Authority has overseen and approved the
selection of the Third Party to receive such rights, and (ii) the assignee or
licensee agrees to be bound to all of the terms and conditions hereof applicable
to such assigned rights and delegated obligations.
15.11 PERFORMANCE BY AFFILIATES AND LOCAL OPERATING ENTITIES. Each of
Millennium and Schering acknowledge that obligations under this A-R Agreement
may be performed by Affiliates of Millennium and Schering. Each of Millennium
and Schering guarantee performance of this A-R Agreement by its Affiliates.
Wherever in this A-R Agreement the Parties delegate responsibility to local
operating entities, the Parties agree that such entities may not make decisions
inconsistent with this A-R Agreement, amend the terms of this A-R Agreement or
act contrary to its terms in any way.
15.12 COUNTERPARTS. This A-R Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.13 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
A-R Agreement.
15.14 SEVERABILITY. If any one or more of the provisions of this A-R
Agreement is held to be invalid or unenforceable (i) in the alternative dispute
resolution proceedings specified in Article 15 from which no court appeal can be
or is taken or (ii) for disputes not subject to Article 15, by any court of
competent jurisdiction from which no appeal can be or is taken, the provision
shall be considered severed from this A-R Agreement and shall not serve to
invalidate any remaining provisions hereof. The Parties shall make a good faith
effort to replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by the Parties when
entering this A-R Agreement may be realized.
15.15 AMBIGUITIES. Ambiguities, if any, in this A-R Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authored the ambiguous provision.
15.16 HEADINGS. The headings for each article and section in this A-R
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.
15.17 NO WAIVER. Any delay in enforcing a Party's rights under this A-R
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such Party's rights to the future enforcement of its
rights under this A-R Agreement, excepting only as to an express written and
signed waiver as to a particular matter for a particular period of time.
[END OF TEXT; SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have executed this A-R Agreement in
duplicate originals by their proper officers as of the date and year first above
written.
SCHERING CORPORATION MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ E. Kevin Moore By: /s/ Marsha H. Fanucci
Title: Vice President & Treasurer Title: CFO
Date: 7/22/2005 Date: July 22, 2005
SCHERING-PLOUGH, LTD.
By: /s/ E. Kevin Moore
Title: Officer
Date: 7/22/2005
SCHEDULE 2.29
MILLENNIUM PATENTS AS OF THE EXECUTION DATE
INTEGRILIN PATENT PORTFOLIO-FIRST FAMILY: COMPOUND AND USE OF COMPOUND
Note: Potential expiration dates are indicated in parenthesis for applications
that have not yet been granted.
- ---------------- --------------- ----------- ---------- -------- -------------
Docket Title AN PN Issue Expiration
Millennium Date or Date
(Filing
Date)
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP4CN4 PLATELET 08/463,765 5,686,570 11NO1997 11NO2014
AGGREGATION
INHIBITORS
(Integrilin
compound)
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP4CN9 PLATELET 08/482,278 5,807,825 15SE1998 15SE2015
AGGREGATION
INHIBITORS
(Method of use
of Integrilin
compound)
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP4CN12 PLATELET 08/472,808 5,756,451 26MY1998 11NO2014
AGGREGATION
INHIBITORS (TD over
(Generic 5686570)
compound)
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP4CN15 PLATELET 08/482,263 5,968,902 19OC1999 02JE2015
AGGREGATION
INHIBITORS (TD over
(Method of use several other
of generic patents the
compound) earliest of
which expires
02/06/15)
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3AU PLATELET 60369/90 636159 16AU1993 18NO2014
AGGREGATION
INHIBITORS
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3CA PLATELET 2,059,124 2,059,124 20AU2002 15JE2010
AGGREGATION no extension
INHIBITORS available
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3EP PLATELET 90911002.5 0477295 02JA1997 27FE2012
AGGREGATION
INHIBITORS
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3FI PLATELET 915919 104364 14JA2000 27FE2012
AGGREGATION
INHIBITORS
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3HU PLATELET 5490/90 216318 14AP1999 15JE2010
AGGREGATION no extension
INHIBITORS available
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3JP PLATELET 02-510369 3281370 22FE2002 15JE2010
AGGREGATION up to 5 years
INHIBITORS extension
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3KR PLATELET 701881/91 180918 04DE1998 04DE2013
AGGREGATION up to 5 years
INHIBITORS extension
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3LK PLATELET 10336 10336 22MR1996 22MR2011
AGGREGATION no extension
INHIBITORS available
- ---------------- --------------- ----------- ---------- -------- -------------
MPI89-001CP3NO PLATELET 91.4962 304267 23NO1998 27FE2012
AGGREGATION
INHIBITORS
- ---------------- --------------- ----------- ---------- -------- -------------
INTEGRILIN PATENT PORTFOLIO-FIRST FAMILY: COMPOUND AND USE OF COMPOUND (CONT'D)
Note: Potential expiration dates are indicated in parenthesis for applications
that have not yet been granted.
- ------------------ ----------- ---------- ------- ----------- ------------
Docket Title AN PN Issue Date Expiration
Millennium or (Filing Date
Date)
- ------------------ ----------- ---------- ------- ----------- ------------
MPI89-001CP3RU PLATELET 5010733.14 2156468 20SE2000 15JE2010
AGGREGATION no extension
INHIBITORS available
- ------------------ ----------- ---------- ------- ----------- ------------
[**] [**] [**] [**] [**] [**]
- ------------------ ----------- ---------- ------- ----------- ------------
[**] [**] [**] [**] [**] [**]
- ------------------ ----------- ---------- ------- ----------- ------------
MPI89-001CP3NODV1 PLATELET 98.2249 312965 22JY2002 27FE2012
AGGREGATION
INHIBITORS
- ------------------ ----------- ---------- ------- ----------- ------------
INTEGRILIN PATENT PORTFOLIO-SECOND FAMILY: FORMULATION
Note: Potential expiration dates are indicated in parenthesis for
applications that have not yet been granted.
- ------------ ----------------------- ---------- --------- ---------- ----------
Docket Title AN PN Issue Date Expiration
Millennium or (Filing Date
Date)
- ------------ ----------------------- ---------- --------- ---------- ----------
MPI92-020CN8 STABLE POLYPEPTIDE 08/462,661 5,747,447 05MY1998 05MY2015
COMPOSITION (Storage
stable compositions and
methods; i.e., citrate
formulation)
- ------------ ----------------------- ---------- --------- ---------- ----------
MPI92-010AU STABLE POLYPEPTIDE 41182/93 679913 06NO1997 27AP2013
COMPOSITION up to 5
years
extension
- ------------ ----------------------- ---------- --------- ---------- ----------
MPI92-010CA STABLE POLYPEPTIDE 2,133,205 Pending 27AP1993 (20 yrs.
COMPOSITION from
filing
date) no
extension
available
- ------------ ----------------------- ---------- --------- ---------- ----------
MPI92-010EP STABLE INJECTABLE 93910827.0 0639202 22FE1995 27AP2013
POLYPEPTIDE COMPOSITION
- ------------ ----------------------- ---------- --------- ---------- ----------
MPI92-010IL STABLE INJECTABLE 105533 105533 08MR1999 28AP2013
PEPTIDE COMPOSITIONS no
AND METHODOF THEIR extension
PREPARATION available
- ------------ ----------------------- ---------- --------- ---------- ----------
MPI92-010JP STABLE POLYPEPTIDE 05-519452 3368282 15NO2002 27AP2013
COMPOSITION up to 5
years
- ------------ ----------------------- ---------- --------- ---------- ----------
MPI92-010MX STABLE INJECTABLE 93.2509 190216 30OC1998 29AP2013
POLYPEPTIDE COMPOSITION no
extension
available
- ------------ ----------------------- ---------- --------- ---------- ----------
MPI92-010TW STABLE POLYPEPTIDE 82103230 105566 17DE1999 26AP2013
COMPOSITION AND METHOD no
OF PREPARING THE SAME extension
available
- ------------ ----------------------- ---------- --------- ---------- ----------
INTEGRILIN PATENT PORTFOLIO-THIRD FAMILY: METHODS OF PRODUCTION
Note: Potential expiration dates are indicated in parenthesis for applications
that have not yet been granted.
- ----------- ------- ------ ------- -------------- ----------------
Docket Title AN PN Issue Date or Expiration Date
Millennium (Filing Date)
- ----------- ------- ------ ------- -------------- ----------------
[**] [**] [**] [**] [**]
- ----------- ------- ------ ------- -------------- ----------------
[**] [**] [**] [**] [**] (20 yrs from
filing date)
- ----------- ------- ------ ------- -------------- ----------------
[**] [**] [**] [**] [**] (20 yrs from
filing date)
* * *
SCHEDULE 2.39
SCHERING PATENTS AS OF THE EXECUTION DATE
None
SCHEDULE 6.5(A)(II)
DATE OF FIRST COMMERCIAL SALE OF INTEGRILIN PRODUCT
To be completed by the Parties on or before Closing.