EXHIBIT 10.30
DATED August 22, 2001
---------------------
Biorex Laboratories Limited
-and-
Glycyx Pharmaceuticals, Ltd
------------------------------------------------------
License Agreement
for Japan, Korea & Taiwan
------------------------------------------------------
THE INFORMATION HEREIN MARKED BY [*] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE SEC.
Table of Contents
1. DEFINITIONS........................................................... 1
2. REPRESENTATIONS AND WARRANTIES........................................ 7
3. GRANT................................................................. 7
4. DEVELOPMENT........................................................... 9
5. COMMERCIALISATION..................................................... 10
6. TRADE NAME............................................................ 11
7. PAYMENTS TO BIOREX.................................................... 11
8. REPORTS AND ACCOUNTING................................................ 12
9. PAYMENT TERMS......................................................... 13
10. INFRINGEMENT.......................................................... 13
11. CONFIDENTIALITY....................................................... 14
12. PATENT PROSECUTION AND MAINTENANCE.................................... 15
13. TERM AND TERMINATION.................................................. 16
14. INDEMNITY............................................................. 18
15. FORCE MAJEURE......................................................... 20
16. ASSIGNMENT............................................................ 20
17. MISCELLANEOUS......................................................... 21
THIS AGREEMENT is made the 22nd day of August 2001
BETWEEN:
(1) Biorex Laboratories Limited a company incorporated in England and Wales
having its registered office at 2 Crossfield Chambers, Gladbeck Way,
Enfield, Middlesex, EN2 7HT, England ("Biorex"); and
(2) Glycyx Pharmaceuticals, Ltd a company incorporated in Bermuda having its
registered office at Milner House, 18 Parliament Street, Hamilton, HM12
Bermuda ("Glycyx").
WHEREAS:
A. By an agreement dated 17 September 1992 between Biorex and Glycyx, Biorex
granted to Glycyx an exclusive licence to make, have made, use, sell and
have sold products in certain territories excluding Japan, Korea and
Taiwan.
B. Biorex and Glycyx now wish to enter into an exclusive licence in respect of
Japan, Korea and Taiwan.
IT IS AGREED AS FOLLOWS:
1. DEFINITIONS
1.1 For the purposes of this Agreement, the terms defined in this Clause shall
have the meanings specified below:
"Affiliate" means any corporation or other entity which
controls, is controlled by, or is under common
control with, a party to this Agreement. A
corporation or other entity shall be regarded as
in control of another corporation or entity if it
owns or directly or indirectly controls more than
fifty percent (50%) of the voting stock or other
ownership interest of the other corporation or
entity, or if it possesses, directly or
indirectly, the power to direct or cause the
direction of the management and policies of the
corporation or other entity.
"Balsalazide" means 5-[4(2-Carboxyethelcarbamoyl)-phenylazo]-
salicylic acid disodium salt dihydrate.
"Biorex Fees" means the fees payable to Biorex under Clause 7.1.
1
"Commercial Introduction" of any Product, means the first sale for use
or consumption by the general public of such
Product in a country within the Territory
after required marketing and, if required,
pricing approval has been granted by the
governing health authority of such country.
"Development Payments" means payments made to Glycyx by Third
Parties exclusively for (a) development work
and/or (b) supply of materials provided by
Glycyx provided that such development work
and/or supply of materials are exclusively
for the purposes of (a) obtaining regulatory
approval of the Products and/or (b)
conducting clinical trials or clinical
studies to promote Products, in any region in
the Territory.
"Initial License Fees" means any initial license fees received by
Glycyx and/or its Affiliates in consideration
of the grant of a Sublicense in the
Territory.
"Launch" means a commercial launch of the Product in
any country in the Territory supported by
such marketing expense and support and
launched in such quantities as may be
appropriate for the Product to have a
significant effect on total sales of any
similar or competitive product in such
country.
"MAA" means a product license application filed
with the Ministry of Health and Welfare in
Japan, or counterpart application for
marketing approval in any other country in
the Territory, with respect to a Product.
"Manufacturing Technology" shall mean all methods, processes, designs,
data, procedures and other information owned
by or licensed to Biorex or its Affiliates
during the term of this Agreement that are
reasonably required for pilot production or
commercial manufacturing of Products,
including, without limitation, final quality
assurance-quality control procedures,
manufacturing procedures (including
conditions, times, temperatures, pressures
and rates), product and raw material
specifications, and other technology related
thereto, including all patent and other
intellectual property rights thereto.
2
"Net Receipts" means:
(i) the gross amount received by Glycyx or
an Affiliate of Glycyx in respect of
Supplies for consumption within the
Territory (excluding for the avoidance
of doubt, transfers or dispositions for
charitable, promotional and marketing,
pre-clinical, clinical, regulatory or
government purposes), less deductions
for:
(a) normal and customary trade,
quantity and cash discounts and
sales returns and allowances,
including:
(i) those granted on account of
price adjustments, billing
errors, rejected goods,
damaged goods, returns and
rebates,
(ii) administrative and other
fees and reimbursements and
similar payments to
wholesalers and other
distributors, buying groups,
pharmacy benefit management
organizations, health care
insurance carriers and other
institutions, and
(iii) allowances, rebates and fees
paid to distributors
(b) customs and excise duties and other
duties related to the sales to the
extent that such items are included
in the gross amount invoiced;
(c) rebates and similar payments made
with respect to sales paid for by
any governmental or regulatory
authority;
3
(d) sales and other taxes and duties
directly related to the sale or
delivery of such Products (but not
including taxes assessed against
the income derived from such sale);
and
(e) delivery, packing and insurance
expenses to the extent that such
expenses are included in the
relevant invoice as separate items;
and
(ii) the Initial License Fees and any other
gross amount received by Glycyx or any
Glycyx Affiliate from any Third Party
under the terms of any Sublicense in so
far as such amounts are attributable to
the grant of rights in respect of any
Product in the Territory excluding:
(a) sales taxes or other equivalent
taxes levied on any invoice
rendered by Glycyx (or any Glycyx
Affiliate) in respect of sums due
under such Sublicense (but not
including taxes assessed against
the income derived from such
payments);
(b) any Development Payments;
(c) any sums received under sub-
paragraph (i) above,
(iii) any payments recovered from infringing
Third Parties as provided in Clause
10.2.3
but less any deductions made pursuant to
Clauses 7.2 and/or 10;
"Patent Rights" means all rights of Biorex in the Territory to
any subject matter claimed in or covered by any
of the following:
(i) Japanese patent no. 1433303 and any
continuations, continuation-in-part,
divisions, substitutions, renewals,
reissues and extensions thereof;
4
(ii) Any and all other patent rights, now
existing or hereafter acquired
(including applications therefor),
pertaining to the subject matter
described in paragraph (a) above, or
that are otherwise related to
Balsalazide, or to prodrugs, analogs or
isomers thereof or improvements of any
of the foregoing, obtained in any
country within the Territory.
"Products" means products incorporating Balsalazide,
whether or not such products are covered by
the Patent Rights, or any other material
whose manufacture, use or sale by an
unlicensed third party would constitute an
infringement of any Valid Claim included
within the Patent Rights.
"Report" means any report prepared pursuant to Clause
8.1.
"Salix" means Salix Pharmaceuticals Inc., a company
incorporated under the laws of California
having its principal place of business at
8540 Colonnade Center Drive, Raleigh, NC
27615, USA, a Glycyx Affiliate.
"Sublicense" has the meaning given by Clause 3.2.3.
"Sublicensee" has the meaning given by Clause 3.2.3.
"Supplies" means any and all of the following:
(b) Products, and
(c) components of Products including,
without limitation, ingredients,
intermediates, Balsalazide chemical or
pharmaceutical dosage forms of Products
sold by Glycyx or its Affiliates to
Third Parties for (i) further processing
or packaging, and/or (ii) sale by Third
Parties.
5
"Technical Information" means all formulae, raw material and product
specifications, designs and procedures,
formulation data, processes and methods,
pharmacology, toxicology and other pre-
clinical tests results, clinical trials data
and results, know-how, trade secrets,
inventions and other scientific, medical,
technical and marketing data and information,
including all patent and other intellectual
property rights thereto, which:
(a) are owned or controlled by, or licensed
to, Biorex or its Affiliates during the
term of this Agreement, and
(b) that are reasonably necessary for the
development, manufacture, sale or use of
Products. Technical Information shall
include information and method relating
to the characterisation, synthesis,
formulation, stability, manufacture or
assay of Balsalazide.
"Territory" means Japan, Korea and Taiwan.
"Third Party" means any entity other than Glycyx or Biorex
and their respective Affiliates.
"Trade Name" means the trade name "Colazide"
"Valid Claim" means a claim of an issued and unexpired
patent included within the Patent Rights,
which has not been held permanently revoked,
unenforceable or invalid by a decision of a
court or other governmental agency of
competent jurisdiction, unappealable or
unappealed within the time allowed for
appeal, and which has not been admitted to be
invalid or unenforceable through reissue or
disclaimer or otherwise.
6
2. REPRESENTATIONS AND WARRANTIES
2.1 Authorisation. Biorex represents and warrants that
-------------
2.1.1 it has the full right and authority to grant the licenses provided
in this Agreement and perform its obligations hereunder;
2.1.2 to the best of Biorex's knowledge, Glycyx may exercise the licenses
granted to it under this Agreement without conflict with or
infringement of any rights or alleged rights of any person or
entity;
2.1.3 Biorex has not, and will not during the term of this Agreement, make
any commitment or incur any obligation in conflict with the licenses
granted in this Agreement;
2.1.4 Biorex is, at the date of this Agreement, the sole legal owner of
Japanese patent no. 1433303;
2.1.5 as of the date of this Agreement, Biorex and its Affiliates have no
patents or patent applications within the Territory, other than
Japanese patent no. 1433303, related to Balsalazide, or to prodrugs,
analogs or isomers thereof, or improvements or any of the foregoing;
and
2.1.6 as of the date of this Agreement, Biorex and its Affiliates have no
registered trade marks or trade mark applications for the Trade Name
within the Territory.
2.2 No other Representations. Except to the extent provided in this Clause 2,
------------------------
Biorex makes no representations, extends no warranties of any kind, either
expressed or implied, with respect to use, sale, or other disposition by
Glycyx or its Sublicensees or its vendees or other transferees of Products
incorporating or made by use or subject matter licensed under this
Agreement. THE WARRANTIES EXPRESSLY SET FORTH IN THIS CLAUSE 2 BY EITHER
PARTY ARE EXCLUSIVE AND NO OTHER WARRANTY, WRITTEN OR ORAL, INCLUDING
WARRANTIES OF SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR PURPOSE, IS
EXPRESSED OR IMPLIED.
3. GRANT
3.1 Grant. Biorex hereby grants to Glycyx the exclusive right and license under
-----
the Patent Rights, the Technical Information and Manufacturing Technology
to develop, have developed, make, have made, use, sell and have sold
Products within the Territory. Notwithstanding the foregoing, Biorex may
authorise Salix, its Affiliates and successors to manufacture Balsalazide
within the Territory solely for sale and use outside the Territory.
7
3.2 Sublicenses.
-----------
3.2.1 The license granted to Glycyx under Clause 3.1 above shall
include the right to grant Sublicenses within the Territory.
Glycyx shall provide Biorex with a copy of any Sublicense
issued hereunder, which copy shall be maintained in confidence
pursuant to Clause 11. Notwithstanding the foregoing, except
as provided in Clause 3.2.4 Glycyx shall not grant to any
Third Party a sublicence or marketing rights for the
manufacture or sale of a Product in any other country within
the Territory without first obtaining Biorex's consent, which
shall not be withheld unreasonably.
3.2.2 In the event that Glycyx receives from a Sublicensee hereunder
notice of a default by Glycyx that would give rise to a
termination of the Sublicense agreement, Glycyx shall promptly
provide such notice to Biorex. Except where Biorex enters into
an agreement with the Sublicensee to provide an alternative
arrangement in such circumstances, Glycyx shall ensure that
the Sublicense agreement shall provide that, in the event of
such a breach by Glycyx and a failure by Glycyx to cure the
breach within the cure period specified in the Sublicense
agreement, Biorex will have an additional period to cure the
breach and to assume Glycyx's rights and obligations under the
Sublicense agreement.
3.2.3 Subject to Clause 3.2.4, in this Agreement the term
"Sublicense" shall mean any agreement under which Glycyx
grants to a Third Party (the "Sublicensee") rights to:
(a) market, promote, and/or distribute Products in the
Territory using Supplies purchased from Glycyx; and/or
(b) make, have made, use and/or sell or have sold Products
in the Territory.
3.2.4 The following types of arrangements shall not be Sublicenses
hereunder:
(a) subcontracting of Third Parties to develop the Product
or new Products for Glycyx; or
(b) subcontracting of Third Parties to manufacture the
Products or ingredients for supply to Glycyx or its
Sublicensees only.
3.3 Documentation. Glycyx and Biorex agree to execute and file such formal
-------------
patent licenses and similar instruments as the other party may
reasonably request to evidence or perfect the licenses granted herein.
8
4. DEVELOPMENT
4.1 Clinical Development and Regulatory Approvals.
---------------------------------------------
4.1.1 Glycyx shall procure that it and its Sublicensees shall use
commercially reasonable efforts to obtain all necessary
regulatory approvals to market a Product in each country within
the Territory.
4.1.2 Biorex and Glycyx acknowledge that additional pre-clinical and
clinical studies may be necessary in order to apply for and
obtain regulatory approvals in any country in the Territory, and
hereby agree to discuss plans for such studies should they be
necessary and to negotiate in good faith their respective rights
and obligations relative to conducting or having such studies
conducted.
4.2 Technical Information. Biorex shall promptly provide to Glycyx, and in
---------------------
any event at least semi-annually, all Technical Information (including
such regulatory filings) and information that it develops or acquires
after the date hereof. In addition, Biorex shall use all reasonable
efforts to so provide to Glycyx all similar items and information
generated or developed by or for other licensees of Biorex and to
permit Glycyx to use such items and information to the same extent it
may use Technical Information hereunder. Glycyx and Sublicensees
hereunder shall have a right to use all such Technical Information and
information of such other licensees for purposes of this Agreement, and
to cross-reference all such regulatory filings. In the event that
Biorex does not obtain from any other licensee of Biorex the right to
permit Glycyx to use such items or information, Biorex shall not
provide to such licensee any information of Glycyx provided to Biorex
under Clause 4.3 below.
4.3 Exchange of Data. Each party shall keep the other informed as to its
----------------
progress in the development and testing of all Products and the
preparing, filing and obtaining of the approvals necessary for
marketing such Products. Each party shall notify the other at least
thirty (30) days in advance of, and make available to the other party
for review prior to submittal, all filings and correspondence to be
submitted by such party (but not by Third Parties) to regulatory
authorities with respect to marketing approval of such a Product, and
all proposed publications by such party of test data or results related
to such Products. Such items shall be made available at such party's
principal place of business, or if reasonable to do so, they shall be
sent to the other party. Glycyx will provide Biorex with copies of any
similar filings, correspondence and proposed publications which it
receives from its Sublicensees. In addition, each party shall provide
the other with copies of such other documents as it reasonably requests
promptly after such request.
9
4.4 Visit of Facilities. Representatives of Glycyx and Biorex may, upon
-------------------
reasonable notice and at times reasonably acceptable to the other party
(a) visit the facilities where the clinical trials are being conducted
with respect to Products, and the facilities where the other party
manufactures any Product, or active compound contained therein (or has
such a product or compound manufactured, but subject always to the
consent of the relevant Sublicensee or subcontractor) to the extent
relating to such product or compound; and (b) consult informally,
during such visits and by telephone, with personnel of the other party
performing work on such tests, trials or manufacturing.
4.5 Technical Assistance. Biorex shall at the request of Glycyx, provide to
--------------------
Glycyx such reasonable technical assistance as is in Biorex's control,
with respect to the clinical testing and manufacturing of Products In
addition, Biorex shall at the request of Glycyx, use all reasonable
efforts to provide technical support and assistance to Sublicensees
hereunder, including assisting in prospective Sublicensees' evaluation
of the Products. Biorex will be reimbursed by Glycyx or such
Sublicensee for its out-of-pocket expenses incurred in rendering such
assistance.
4.6 Progress Reports. Glycyx shall provide to Biorex quarterly reports
----------------
describing in reasonable detail its progress and its Sublicensees'
progress in developing and securing marketing and regulatory approval
of Products hereunder. Such obligation shall continue until the
Commercial Introduction of the first Product, after which such reports
shall be provided semi-annually.
5. COMMERCIALISATION
5.1 Marketing. Subject to Clauses 5.2 and 5.3 below, with respect to each
---------
Product for which Glycyx or its relevant Sublicensee has received
necessary regulatory approvals to market such Product in a country
within the Territory, Glycyx shall itself or shall procure that its
relevant Sublicensee uses commercially reasonable efforts to procure:
5.1.1 the commencement of marketing of such Product in such country
within one hundred and eighty days (180) days of receiving
approval (including, if required, pricing and reimbursement
approval) to market such Product in that country; and
5.1.2 after commencing marketing of such Product in such country, to
meet and develop the market demand for such Product in such
country.
5.2 Termination for Failure to Market. If Glycyx or its relevant
---------------------------------
Sublicensee fails to fulfil the Clause 5.1 obligations with respect to
any country in the Territory for which Glycyx or its relevant
Sublicensee has received necessary regulatory approvals to market the
Products then:
5.2.1 If Glycyx or its relevant Sublicensee does not remedy such
failure within one hundred and twenty (120) days after
receiving a written request to do so, Biorex shall have the
right to terminate Glycyx's exclusive rights in that country
upon written notice to Glycyx;
10
5.2.2 If Glycyx or its relevant Sublicensee has not fulfilled the
Clause 5.1 obligations within twelve (12) months after
receiving approvals, Biorex may terminate Glycyx's rights in
that country.
5.3 Sole Remedy for Failure to Market. Clause 5.2 sets forth Biorex's sole
---------------------------------
remedies for a failure by Glycyx to meet its obligations under Clauses
5.1 and 5.2.
5.4 Excused Performance. In addition to the provisions of Clause 15,
-------------------
Glycyx's obligations with respect to any Product under Clause 4.1 or
this Clause 5, are expressly conditioned upon the continuing absence of
any adverse condition relating to the safety, quality or efficacy of
that Product or any other restrictions or delays imposed or caused by
governmental authorities, or other condition or event beyond Glycyx's
control that would reasonably justify Glycyx, after consulting with
Biorex, in exercising prudent and justifiable business judgment, to
conclude that development or marketing of such Product should be
delayed, suspended or stopped altogether, and Glycyx's obligation to
develop or market any such Product shall be delayed or suspended so
long as any such condition or event exists, but for a maximum of five
(5) years from the commencement of such delay or suspension. In
addition, Glycyx shall not be responsible for any delays caused by
failure of any health regulatory agency to accept data provided by
Biorex or by inability of Glycyx to obtain, or delays in obtaining,
sufficient quantities of clinical materials on reasonable terms.
6. TRADE NAME
6.1.1 As between the parties, Glycyx shall have the right to supply
Products in the Territory by reference to the Trade Name and to
apply to register the Trade Name as a trade mark in the
Territory.
6.1.2 Biorex makes no representation and gives no warranty that the
Trade Name can be registered as a trade mark in the Territory
or can be used in the Territory without infringing the rights
of a Third Party.
7. PAYMENTS TO BIOREX
7.1 Biorex Fees. Subject to the provisions of Clause 10, Glycyx shall pay
------------
to Biorex [*] percent ([*]%) of all Net Receipts.
7.2 Third Party Royalties. In the event that Glycyx is required to pay to a
---------------------
Third Party any royalties on a Product with respect to technology
incorporated in such Product other than the technology licensed
hereunder, Glycyx may deduct such payment in calculating Net Receipts
with respect to such Product for the purposes of this Agreement.
[*] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SEC.
11
8. REPORTS AND ACCOUNTING
8.1 Reports. After the Commercial Introduction of a Product, Glycyx shall
-------
furnish to Biorex on a quarterly basis a written report covering
Glycyx's fiscal quarters showing, on a country by country basis:
(i) Net Receipts for the preceding fiscal quarter;
(ii) withholding taxes, if any, required by law to be deducted in
respect of such amounts; and
(iii) the dates of the Commercial Introductions of any Products in any
country in the Territory during the reporting period.
Reports shall be due forty-five (45) days following the close of each
respective quarter. Glycyx shall keep accurate records in sufficient
detail to enable the Net Receipts to be determined. For the avoidance
of doubt, Glycyx shall be entitled to enter into Sublicenses in which
the Sublicensee is required to pay royalties on a semi-annual basis. In
case no payment is due for any quarter period hereunder, Glycyx shall
so report.
8.2 Audits
------
8.2.1 Upon the written request of Biorex, at Biorex's expense and not
more than once each Glycyx fiscal year, Glycyx shall permit or
procure an independent public accountant selected by Biorex and
reasonably acceptable to Glycyx to have access during normal
business hours to such of the records of Glycyx, its
Sublicensees and Affiliates as may be reasonably necessary to
verify the accuracy of the Reports made not more than thirty-six
(36) months prior to the date of such request. Biorex may, at
its discretion, require Glycyx to arrange such verification of
Sublicensee reports.
8.2.2 In the event such accountant concludes that additional amounts
were owed during such period, the additional amounts shall be
paid promptly. The fees charged by such accountant shall be paid
by Biorex unless the audit establishes that the amounts payable
by Glycyx for the audited period are more than one hundred and
five percent (105%) of the amounts actually paid for such
period, in which case Glycyx shall pay the reasonable fees and
expenses charged by the accountant.
8.2.3 Upon the expiration of thirty-six (36) months following the date
of any Report, the calculation of Biorex Fees payable with
respect to the quarter covered by such Report shall be binding
and conclusive upon Biorex; and Glycyx shall be released from
any liability or accountability with respect to Biorex Fees for
such year.
12
8.3 Confidential Financial Information. Biorex agrees that all information
----------------------------------
subject to review under this Clause 8 is confidential and shall cause
its accountant to retain all such information in confidence except for
discussions with Biorex.
9. PAYMENT TERMS
9.1 Payment of Biorex Fees. Subject to Clause 9.2, amounts shown to have
----------------------
accrued by each Report shall be due and payable on the date such Report
is due. Glycyx shall use commercially reasonable efforts to ensure
prompt receipt of Net Receipts.
9.2 Initial License Fees. Glycyx shall forthwith upon receipt of any
Initial License Fees, pay to Biorex the corresponding Biorex Fee in
respect of such Initial License Fee by electronic bank transfer into
the bank account designated by Biorex from time to time for such
purpose.
9.3 Currency Conversion. All payments to Biorex shall be made in British
-------------------
Pounds. Biorex Fees shall be first determined in the currency in which
such amounts are received by Glycyx and then converted to its
equivalent in British Pounds. The midpoint between the buying and
selling rates of exchange for such currency in British Pounds, as
quoted in The Wall Street Journal (U.S. edition) as of the last
-------------------
business day of the quarter for which the calculation is made, shall be
used for such conversion, or such other benchmark as may be agreed in
writing between Biorex and Glycyx from time to time.
9.4 Exchange Control. Notwithstanding Clauses 9.1, 9.2 and 9.3 if at any
----------------
time legal restrictions prevent the prompt remittance of part or all
payments with respect to any country of the Territory, payment shall be
made through such lawful means or methods as Biorex may designate.
9.5 Late Payments. Any payments that are not paid on or before the date
-------------
such payments are due under this Agreement shall bear interest to the
extent permitted by applicable law at the time by the base rate laid
down from time to time by the Bank of England plus one percent,
calculated on the number of days such payment is delinquent. This
Clause 9.5 shall in no way limit any other remedy available to either
party.
10. INFRINGEMENT
10.1 Infringement Rights. The provisions of this Clause 10 shall govern the
-------------------
parties' rights and obligations, as between themselves, with respect to
actions against and by Third Parties for infringement of patents
licensed under this Agreement or owned by such Third Parties. In the
event that either party learns of a significant infringement of the
Patent Rights within the Territory, it shall promptly notify the other
party.
13
10.2 Enforcement of Patent Rights.
----------------------------
10.2.1 Glycyx and its Sublicensees shall have the exclusive right to
bring, direct and control any action to enforce the Patent
Rights against infringers within the Territory.
10.2.2 Glycyx may deduct from Net Receipts all of its costs and
expenses incurred in any quarterly period in enforcing the
Patent Rights. Any remaining undeducted costs and expenses may
be carried forward and deducted under the same conditions from
the Net Receipts in each subsequent quarter.
10.2.3 After reimbursement to Glycyx for its unreimbursed expenses,
all damages and other payments recovered by Glycyx from such
infringing parties shall be included in Net Receipts. Biorex
shall cooperate with Glycyx, at Glycyx's expense, in
connection with any such litigation, including without
limitation by joining as a party if necessary or appropriate
and executing such documents as Glycyx may reasonably request.
10.3 Third Party Claims. In the event that Glycyx is sued by a Third Party
------------------
alleging that the manufacture, sale or use of a Product in the
Territory infringes patent rights of such Third Party, then Glycyx may
withhold up to [*] percent ([*]%) of any Biorex Fees payable in any
quarter with respect to the region involved in such claim and apply
such amounts to any damages, costs, liabilities or expenses (including
the reasonable fees of attorneys and other professionals) incurred as a
result of such claim up to a maximum of [*] percent ([*]%) of such
damages, costs, liabilities and expenses. All unreimbursed damages,
costs liabilities and expenses shall thereafter be deducted in
calculating the Net Receipts in successive quarters.
11. CONFIDENTIALITY
11.1 General. Except as expressly otherwise provided in this Agreement, each
-------
party shall hold in confidence and not use or disclose to any Third
Party (other than employees, consultants, advisors, permitted
Sublicensees and Third Parties with whom such party is considering
entering into a business relationship who are similarly bound in
writing) any product, technical, manufacturing, process, marketing,
financial, business or other information, ideas, or know-how of the
other party that is identified in writing by the other party as
confidential ("Proprietary Information") at the time of its disclosure
or within thirty (30) days thereafter; provided, however, that
Proprietary Information of a party shall not include:
11.1.1 Items which at the time of disclosure are published or
otherwise generally available to the public;
11.1.2 Items which, after disclosure to the other party, are
published or become generally available to the public through
no breach of this Agreement by the other party or the other
party's employees or agents; or
[*] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SEC.
14
11.1.3 Items which the other can document were or are (i) in its
possession at the time of disclosure and not acquired directly
or indirectly from such party, (ii) independently developed.
11.2 Exceptions. A party may disclose Proprietary Information of the other:
----------
11.2.1 in connection with the order of a court of law or in
compliance with laws or regulations relating to registrations
or sale of securities or product approval; or
11.2.2 if such information is also rightfully acquired from a Third
Party who, to the best of such party's knowledge and belief,
is entitled to rightfully make such disclosure, but only to
the extent such party complies with any restrictions imposed
by the Third Party;
11.2.3 after five (5) years from the date such information is
disclosed to it hereunder.
11.3 Licensed Information. Any Proprietary Information of or used by Biorex
--------------------
which is or may be subject to an exclusive licence to Glycyx hereunder,
shall not be disclosed by Biorex to any Third Party for use in the
Territory except for purposes not inconsistent with such exclusive
license and only pursuant to confidentiality and non-use restrictions
at least as restrictive as those provided herein.
11.4 Terms of this Agreement. Glycyx and Biorex agree not to disclose the
-----------------------
financial terms or conditions of this Agreement to any Third Party
without the prior written consent of the other party hereto (which
consent shall not be unreasonably withheld), except as required by
applicable law, or to professional advisers, or to persons with whom
Biorex or Glycyx has entered into or proposes to enter into a business
relationship for the purposes of raising capital to run their business,
and then only under conditions of confidence.
12. PATENT PROSECUTION AND MAINTENANCE
12.1 Control. Glycyx shall have the right to take such actions as are
-------
necessary or appropriate, with counsel of its choosing, to effect the
patent applications within the Patent Rights and to obtain patent
protection with respect to the subject matter therein in any country
within the Territory. In the event that Glycyx or a Sublicensee elects
not to prosecute or maintain a patent application or patent within the
Patent Rights, Biorex shall have the right to do so at its own expense.
12.2 Expenses. The cost of Glycyx's preparing, filing, prosecuting and
--------
maintaining all patent applications and patents contemplated by this
Agreement shall be borne by Glycyx.
15
12.3 Co-operation. Glycyx shall provide Biorex with copies of all material
------------
documentation after Glycyx's receipt from or prior to submission to any
governmental agency with jurisdiction to issue such patents, as
appropriate, so that Biorex may be informed and appraised of the
continuing prosecution. Glycyx shall consult with Biorex and its
counsel concerning prosecution of any patent application and adopt
reasonable suggestions made with respect thereto, and shall use its
best efforts to amend any patent application to include claims
reasonably requested by Biorex and required to protect the product
contemplated to be sold under this Agreement. Biorex shall make
available to Glycyx or its authorised attorneys, agents or
representatives, Biorex's employees, agents or consultants necessary or
appropriate to enable Glycyx to file, prosecute and maintain patent
applications and resulting patents within the Patent Rights. Biorex
shall sign or cause to have signed all documents relating to said
patent applications or patents at no charge to Glycyx.
13. TERM AND TERMINATION
13.1 Expiration. Unless terminated earlier pursuant to this Clause 13, this
----------
Agreement shall expire fifteen (15) years from the date of Launch. Upon
expiration of this Agreement, Glycyx shall have an irrevocable,
non-exclusive, royalty-free licence (with the right to sublicense)
under the Technical Information and Manufacturing Technology to make,
have made, use, sell and have sold Products in the Territory.
13.2 Termination for Cause. Either party may terminate this Agreement
---------------------
following the material breach of any material provision of this
Agreement by the other party if the breaching party has not commenced
to cure such breach within ninety (90) days after written notice
thereof by the other party and thereafter proceeded diligently to cure
such breach within a reasonable time; provided, that in no event shall
such reasonable time to cure such breach exceed one hundred eighty
(180) days from the date of such notice. In determining whether there
has been a material breach of a material provision of this Agreement
for purposes of this Clause 13.2, all of the circumstances of the
breach shall be considered, including the breaching party's conduct,
the hardship of termination, the extent to which the breaching party
has performed its obligations, the extent to which the non-breaching
party will obtain the benefits it reasonably anticipated, and similar
factors.
13.3 Termination by Glycyx. Glycyx shall have the right to terminate this
---------------------
Agreement and the licences granted herein, in whole or as to any
specified Product or country, at any time, and from time to time, by
giving notice in writing to Biorex. Such termination shall be effective
ninety (90) days from the date Biorex receives such notice and all
Glycyx's rights associated therewith shall cease as of that date;
provided, however, that if Glycyx revokes in writing its notice of
termination before the end of such 90 day period, such notice of
termination shall have no effect and the rights specified in such
notice of termination shall not terminate.
16
13.4 Termination by Biorex. Without prejudice to any other rights Biorex may
---------------------
have to terminate under this Agreement:
13.4.1 if Salix or Glycyx ceases business or seeks protection from
its creditors pursuant to Chapter 11 of the U.S. Bankruptcy
Code or files or has filed against it a voluntary or
involuntary bankruptcy procedure that is not dismissed within
sixty (60) days or if a receiver or assignee is appointed for
the benefit of its creditors or if it takes or suffers any
similar action in consequence of debt with respect to all or
substantially all of its assets; then Biorex shall have the
right to terminate this Agreement forthwith.
13.4.2 if:
(a) a Sublicensee terminates its Sublicense with Glycyx and
(b) Biorex and the Sublicensee have either:
(i) prior to the date of the relevant Sublicense
agreement; or
(ii) on the same day as the date of the relevant
Sublicense agreement; or
(iii) after the date of the relevant Sublicense agreement
and with the consent of Glycyx, such consent not to
be delayed or unreasonably withheld
entered into an agreement under which Biorex agrees, in
the event of termination of the Sublicense, to grant a
licence directly to the Sublicensee;
then Glycyx's rights and licenses under this Agreement shall
terminate forthwith automatically in respect of the country
covered by the relevant Sublicense.
13.4.3 if:
(a) by reason of any act or omission on the part of Glycyx, a
Sublicensee is entitled to a royalty-free licence to
manufacture Products; and
(b) the Sublicensee exercises such right, and such licence
continues for more than 180 days
then Biorex shall have the right to terminate Glycyx's rights
and licenses under this Agreement forthwith in respect of the
region covered by the relevant Sublicense.
17
13.5 Effect of Termination.
---------------------
13.5.1 Upon a termination of this Agreement by Glycyx under Clause
13.3 above, or by Biorex under Clause 13.4 above, or by reason
of a material breach by Glycyx, all licenses granted to Glycyx
hereunder (or in the event of a partial termination the
licenses to the Products and countries to which such
termination pertains) shall terminate. In the event of such a
termination, Glycyx shall (to the extent that any applicable
Sublicense agreement allows) assign to Biorex filings made in
Glycyx's or its Sublicensees name with the health regulatory
authorities within the terminated country that pertain to the
Products.
13.5.2 Expiration or termination of this Agreement shall not relieve
the parties of any obligation accruing prior to such
expiration or termination.
13.5.3 Upon termination of this Agreement by either party, Glycyx
shall provide Biorex with a written inventory of all Products
in process of manufacture or in stock, and Glycyx (and its
Affiliates and Sublicensees) shall have the privilege of
disposing of such Products within a period of one hundred
eighty (180) days; provided, however, that Glycyx shall pay
Biorex Fees on any sales of such Products at the rate and at
the time herein provided and shall render Reports thereon.
13.5.4 In event of any termination of this Agreement or any licenses
granted hereunder, whether in whole or in part, any
Sublicense, marketing or other distribution rights granted by
Glycyx hereunder shall survive, and the relevant Sublicense
and/or distribution agreements, if any, shall be deemed
assigned to Biorex, except where Biorex and the relevant
Sublicensee enter into an agreement to provide an alternative
arrangement in the event of such termination.
13.5.5 Upon the expiration or termination of this Agreement for any
reason, the parties' rights and obligations under the
following provisions shall survive: Clause 1, Clauses 6, 8.2,
8.3 and Clauses 9, 11, 13, 14 and 17; provided that the
indemnification provision of Clause 14 shall survive only with
respect to claims that are made prior to three (3) years after
expiration or termination of this Agreement. In addition, upon
expiration of this Agreement under Clause 13.1 above, the
parties rights and obligations under Clause 4 shall survive.
14. INDEMNITY
14.1 Glycyx. Subject to Biorex's compliance with its obligations set forth
------
in Clause 14.3 below, Glycyx agrees to indemnify and hold Biorex, its
Affiliates and their employees and agents harmless from and against any
losses, claims, damages, liabilities or actions (including reasonable
attorneys' fees and court and other expenses of litigation)
(collectively, the "Liabilities") suffered or incurred in connection
with Third Party claims for personal injuries or any Product recall to
the extent caused by:
18
14.1.1 any failure to test for or provide adequate warnings of
adverse side effects to the extent such failure arises out of
acts or omissions in connection with the performance of
Glycyx's clinical testing obligations hereunder;
14.1.2 any manufacturing defect in any Product or other material
manufactured by Glycyx or its subcontractors; or
14.1.3 any other act or omission (without regard to culpable conduct)
of Glycyx or its subcontractors in connection with the
activities contemplated under this Agreement, except to the
extent such Liabilities resulted from negligence, recklessness
or intentional misconduct of Biorex.
14.2 Biorex. Subject to Glycyx's compliance with its obligations set forth
------
in Clause 14.3, Biorex agrees to indemnify and hold Glycyx, its
Affiliates, and Sublicensees and their employees and agents harmless
from and against any Liabilities suffered or incurred in connection
with third party claims for personal injuries or any Product recall to
the extent caused by:
14.2.1 any failure to test for or provide adequate warnings of
adverse side effects to the extent such failure arises out of
acts or omissions in connection with Biorex's clinical testing
obligations hereunder;
14.2.2 any manufacturing defect in any Product or other material
manufactured by Biorex or its subcontractors; or
14.2.3 any other act or omission (without regard to culpable conduct)
of Biorex or its subcontractors in connection with the
activities contemplated under this Agreement, except to the
extent such Liabilities resulted from negligence, recklessness
or intentional misconduct of Glycyx or its Affiliates,
sublicensees or subcontractors.
Notwithstanding the foregoing, Biorex shall not be obligated to
indemnify Glycyx or its Affiliates, Sublicensees or subcontractors with
respect to Liabilities incurred in the course of human clinical trials
conducted by Glycyx (itself or through subcontractors), or with respect
to Liabilities resulting from the use of Products supplied by Biorex as
clinical trials materials for use in such clinical trials.
14.3 Procedure. A party (the "Indemnitee") that intends to claim
---------
indemnification under this Clause 14 shall promptly notify the other
party (the "Indemnitor") in writing of any loss, claim, damage,
liability or action in respect of which the Indemnitee or any of its
Affiliates, employees or agents intend to claim such indemnification,
and the Indemnitor shall have the right to participate in, and, to the
extent the Indemnitor so desires, jointly with any other Indemnitor
similarly noticed, to assume the defence thereof with counsel mutually
satisfactory to the parties; provided, however, that an Indemnitee
shall have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitee, if representation of such
Indemnitee by the counsel retained by the
19
Indemnitor would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other party represented by
such counsel in such proceeding. The indemnity agreement in this Clause
14 shall not apply to amounts paid in settlement of any loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Indemnitor, which consent shall not be withheld
unreasonably. The failure to deliver written notice to the Indemnitor
within a reasonable time after the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Clause 14, but
the omission so to deliver written notice to the Indemnitor shall not
relieve it of any liability that it may have to any Indemnitee
otherwise than under this Clause 14. The Indemnitee under this Clause
14, its employees and agents, shall cooperate fully with the Indemnitor
and its legal representatives in the investigation of any action, claim
or liability covered by this indemnification.
15. FORCE MAJEURE
Neither party shall be held liable or responsible to the other party
nor be deemed to have defaulted under or breached this Agreement for
failure or delay in fulfilling or performing any term of this Agreement
when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected party or from fire, floods,
embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other
labour disturbances, acts of God or acts, omissions or delays in acting
by any governmental authority or the other party.
16. ASSIGNMENT
This Agreement may not be assigned or otherwise transferred, nor,
except as expressly provided hereunder, may any right or obligations
hereunder be assigned or transferred, by either party without the
written consent of the other party; provided, however that either
Biorex or Glycyx may, without such consent, assign this Agreement and
its rights and obligations hereunder in connection with the transfer or
sale of all or substantially all of its business, if such assets
include substantially all of the assets relating to its performance of
its respective obligations hereunder, or in the event of its merger or
consolidation with another company at any time during the term of this
Agreement. Any purported assignment in violation of the preceding
sentence shall be void. Any permitted assignee shall assume all
obligations of its assignor under this Agreement. No assignment shall
relieve either party of responsibility for the performance of any
accrued obligation which such party then has hereunder.
20
17. MISCELLANEOUS
17.1 Notices. Any notice or report required or permitted to be given or made
-------
under this Agreement by one of the parties hereto to the other shall be
in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier) or courier, postage prepaid,
addressed to such other party at its address indicated below, or to
such other address as the addressee shall have last furnished in
writing to the addressor and shall be effective upon receipt by the
addressee.
Glycyx Pharmaceuticals, Ltd
8540 Colonnade Center Drive
Raleigh
NC 27615
USA
Attention: President
(with a copy to Salix at the same address).
Biorex Laboratories Limited
2 Crossfield Chambers
Gladbeck Way
Enfield
Middlesex EN2 7HT
Attention: Managing Director
17.2 Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of England, without regard to conflicts of
laws provisions.
17.3 Export Laws. Biorex shall procure and maintain all U.K. export licenses
-----------
required for it to transfer to Glycyx and its Sublicensees all
Technical Information, Patent Rights, Manufacturing Technology and
other technical data, and shall comply with all other U.K. laws,
regulations and governmental directives relating to the export of
technical data, goods and services.
17.4 No Consequential Damages. EXCEPT AS PROVIDED IN CLAUSE 14, IN NO EVENT
------------------------
SHALL EITHER GLYCYX OR BIOREX OR THEIR AFFILIATES BE LIABLE FOR
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING
WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFITS, PRODUCTION, USE OR
SALES) BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.
21
17.5 Entire Agreement. This Agreement contains the entire understanding of
----------------
the parties with respect to the subject matter hereof in respect of the
Territory. All express or implied agreements and understandings, either
oral or written, heretofore made are expressly excluded provided that
nothing in this Agreement shall speak to exercise or limit liability
for fraud. This Agreement may be amended, or any term hereof modified,
only by a written instrument duly executed by both parties hereto.
17.6 Headings. The captions to the several Clauses and Clauses hereof are
--------
not a part of this Agreement, but are merely guides or labels to assist
in locating and reading the several Clauses hereof.
17.7 Independent Contractors. It is expressly agreed that Glycyx and Biorex
-----------------------
shall be independent contractors and that the relationship between the
two parties shall not constitute a partnership, joint venture or
agency. Neither Glycyx nor Biorex shall have the authority to make any
statements, representations or commitments of any kind, or to take any
action, which shall be binding on the other, without the prior written
authorisation of the other party to do so.
17.8 Waiver. The waiver by either party of any right hereunder or the
------
failure to perform or of a breach by the other party shall not be
deemed a waiver of any other right hereunder or of any other breach or
failure by said other party whether of a similar nature or otherwise.
17.9 Further Assurances. Glycyx shall use commercially reasonable efforts to
-------------------
ensure that each of its Sublicensees and subcontractors shall observe
and perform all the obligations and restrictions applicable to it under
this Agreement.
17.10 Severability. In case any one or more of the provisions contained in
------------
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, but this
Agreement shall be construed as if such invalid or illegal or
unenforceable provisions had never been contained herein.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written.
For and on behalf of: For and on behalf of:
Biorex Laboratories Limited Glycyx Pharmaceuticals, Ltd
Signed: .signature.................. Signed: .signature...............
Full Name: LILY BAXENDALE ............. Full Name: ROBERT P. RUSCHER .......
Job Title: MANAGING DIRECTOR .......... Job Title: PRESIDENT & CEO .........
22