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EXHIBIT 10.43
SETTLEMENT AND MODIFICATION AGREEMENT
THIS SETTLEMENT AND MODIFICATION AGREEMENT (the "Settlement Agreement"),
effective as of the date upon which all parties have signed below (the
"Effective Date"), is by and between ASIVI, LLC, a Delaware limited liability
company, with offices at 1172 Castro Street, Mountain View, California 94040
("ASIVI"), VIVUS, INC., a Delaware corporation with a principal place of
business at 1172 Castro Street, Mountain View, California 94040 ("VI"),
ANDROSOLUTIONS, INC., a Tennessee corporation with a principal place of business
at Suite 309, 200 Fort Sanders West Blvd., Knoxville, TN 37922 (collectively
with its Affiliates, "ASI"), and Gary W. Neal, M.D., a natural person residing
at 4701 Guinn Road, Knoxville, TN 37931 ("GWN").
BACKGROUND
WHEREAS, the parties have commenced arbitration proceedings before the
American Arbitration Association captioned VIVUS, Inc. v. AndroSolutions, Inc.;
WHEREAS, the parties, without admitting liability, wish to settle their
dispute by terminating and/or modifying the following agreements previously
entered into by the parties and by entering into this Settlement Agreement: the
Memorandum of Understanding dated October 14, 1999 ("MOU"); the Confidentiality
and Non-Disclosure Agreement dated December 16, 1999 (the "Confidentiality
Agreement"); the ASIVI, LLC Operating Agreement dated February 29, 2000
("Operating Agreement"); the License Agreement dated February 29, 2000 ("License
Agreement"); and the Manufacture and Supply Agreement dated February 29, 2000
("Manufacture and Supply Agreement");
WHEREAS, ASI and VI formerly owned certain intellectual property
consisting of issued patents and/or pending patent applications relating to,
inter alia, the design, development, manufacture and use of products containing
a prostaglandin and/or other vasodilator for the treatment of female sexual
dysfunction ("FSD") which VI and ASI each assigned to ASIVI;
WHEREAS, VI desires to obtain, and ASIVI desires to assign, the FSD IP
(as defined below) to develop and commercialize Products (as defined below) for
the treatment of FSD, on the terms and conditions herein;
WHEREAS, VI desires to obtain, and ASI desires to assign, ASI's entire
interest in ASIVI;
WHEREAS, VI desires to obtain, and ASI desires to assign, the
Supplemental FSD IP (as defined below); and
WHEREAS, VI, in partial consideration for the assignment of the FSD IP,
the Supplemental FSD IP, and assignment of ASI's interest in ASIVI, and in order
to settle the dispute which is the subject of the arbitration with ASI, is
willing to make an upfront payment, certain milestone payments, and royalty
payments to ASI, and ASI is willing to accept such payments on the terms and
conditions herein.
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NOW, THEREFORE, in consideration of the mutual covenants and
undertakings set out herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, ASIVI, VI, ASI and GWN
agree as follows:
1. DEFINITIONS
1.1. "Affiliate" shall mean any corporation or other entity that
controls, is controlled by or is under common control with a party. For
purposes of this definition only, "control" shall mean ownership or
control, directly or indirectly, of more than fifty percent (50%) of the
shares or other rights of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a
corporation, to the election of the corresponding managing authority).
1.2. "Commercially Reasonable Efforts" shall, with respect to a
Product, mean efforts and resources equivalent to those normally
employed by entities in the biopharmaceutical marketplace, substantially
comparable to VI, to develop, manufacture, market or sell a product of
similar market potential at a similar stage in its product life, taking
into account for example the establishment of the Product in the
marketplace, the competitiveness of alternative products, the
proprietary position of the Product, the likelihood of regulatory
approval, including consideration of safety and efficacy, for the
Product given the regulatory authority and structure involved, the
profitability of the Product and VI's available resources. Commercially
Reasonable Efforts shall be determined on a market-by-market basis for
each Product.
1.3. "Confidential Information" shall mean only such information
of another party to this Settlement Agreement that may be reasonably
understood from legends or oral designations, the nature of the
information itself or the circumstances of such information's
disclosure, to be confidential or proprietary to another party or to a
third party to which another party owes a duty of non-disclosure.
1.4. "First Commercial Sale" shall mean, with respect to each
Product in each country, the first bona fide commercial sale of such
Product in such country by or under authority of VI.
1.5. "FDA" shall mean the U.S. Food and Drug Administration, or
any successor agency.
1.6. "FSD IP" shall mean the Know How and Patent Rights, in each
case that are owned or controlled by ASIVI as of the Effective Date, and
all U.S. and foreign patents and patent applications claiming priority
to the Patent Rights.
1.6.1. "Patent Rights" shall mean all United States and
foreign patents (including all reissues, extensions,
substitutions, re-examinations, supplementary protection
certificates, and the like, and patents of addition) and pending
patent applications (including without limitation all
continuations, continuations-in-part and divisionals thereof)
relating to, inter alia, the design, development, manufacture,
and use of products containing a prostaglandin and/or other
vasodilator for the treatment of FSD.
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1.6.2. "Know How" shall mean the Confidential Information
owned or controlled by ASIVI pursuant to the terms of the MOU
and/or the Operating Agreement necessary for the exercise of the
Patent Rights, including technical data, protocols and methods.
1.7. "IP Information" shall mean (***) the FSD IP formerly owned
by ASI, and assigned to ASIVI pursuant to the Assignment Agreement
executed by ASI and included in Exhibit 2 to the Operating Agreement
along with the (***). IP Information shall include (***) in the FSD IP.
IP Information shall further include (***)of the FSD IP.
1.8. "Licensee" shall mean a third party to whom VI has granted a
license or other right under the FSD IP to make, have made, import, have
imported, export, have exported, distribute, have distributed, sell,
have sold, use, or offer for sale Products.
1.9. "NDA" shall mean a New Drug Application submitted to the
FDA.
1.10. "Net Sales."
1.10.1. "Net Sales by Licensees" shall mean the amount
invoiced by VI's Licensees (for purposes of this definition, as
applicable, the "Selling Party") for the sale of Products to bona
fide independent third parties throughout the world, less (i)
ordinary and customary trade discounts actually allowed by the
Selling Party to the third party purchaser; (ii) credits, rebates
and returns allowed and credited to the third party purchaser
(including, but not limited to, wholesaler and retailer returns);
(iii) freight, handling and duties paid on shipments by the
Selling Party to the third party purchaser and separately
identified on the invoice; and (iv) sales taxes, excise taxes,
consumption taxes, customs duties and other compulsory payments
to governmental authorities actually paid with respect to the
sale by the Selling Party to the third party purchaser. For the
avoidance of doubt, Net Sales by Licensees shall not include
sales by a Selling Party to its Affiliates for resale; provided,
however, that if the Selling Party sells a Product to an
Affiliate for resale, Net Sales by Licensees shall include the
amounts invoiced by such Affiliate to third parties on the resale
of such Product.
1.10.2. "Net Sales by VI" shall mean the amount invoiced by
VI or its Affiliates (for purposes of this definition, as
applicable, the "Selling Party") for the sale of Products to bona
fide independent third parties throughout the world, less (i)
ordinary and customary trade discounts actually allowed by the
Selling Party to the third party purchaser; (ii) credits, rebates
and returns allowed and credited to the third party purchaser
(including, but not limited to, wholesaler and retailer returns);
(iii) freight, handling and duties paid on shipments by the
Selling Party to the third party purchaser and separately
identified on the invoice; and (iv) sales taxes, excise taxes,
consumption taxes, customs duties and other compulsory payments
to governmental authorities actually paid with respect to the
sale by the Selling Party to the third party purchaser. For the
avoidance of doubt, Net Sales by VI
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shall not include sales by a Selling Party to its Affiliates or
Licensees for resale; provided, however, that if the Selling
Party sells a Product to an Affiliate or Licensees for resale,
Net Sales shall include the amounts invoiced by such Affiliate or
Licensees to third parties on the resale of such Product. For
avoidance of doubt, Net Sales by VI shall also include Third
Party Payments for the purpose of calculating royalties payable
under Section 2.3.1.
1.10.3. "Bundles." In the case of discounts on "bundles" of
products or services which include Products, Net Sales by
Licensees and Net Sales by VI will be calculated by discounting
the bona fide list price of such Product by the average
percentage discount of all products of VI and/or its Licensees in
a particular "bundle," calculated as follows:
Average percentage discount on a particular bundle = (1 - A/B) x
100
where A equals the total discounted price of a particular
"bundle" of products, and B equals the sum of the undiscounted
bona fide list prices of each unit of every product in such
"bundle." VI shall provide ASI documentation, reasonably
acceptable to ASI, establishing such average discount with
respect to each "bundle." If VI cannot so establish the average
discount of a "bundle," Net Sales shall be based on the
undiscounted list price of the Products in the "bundle." If a
Product in a "bundle" is not sold separately and no bona fide
list price exists for such Product, the parties shall negotiate
in good faith an imputed list price for such Product, and Net
Sales with respect thereto shall be based on such imputed list
price.
1.11. "Product" shall mean any product containing a prostaglandin
and/or other vasodilator within the Field of Use, the sale of which
would infringe upon a Valid Claim.
1.12. "Valid Claim" means (i) a claim of an issued and unexpired
patent included within the Patent Rights which has not been held
unenforceable or invalid by a court or other governmental agency of
competent jurisdiction, and which has not been disclaimed or admitted to
be invalid or unenforceable through reissue or otherwise, or (ii) a
claim of a pending patent application within the Patent Rights.
1.13. "Field of Use" shall mean the diagnosis, prophylaxis and/or
treatment involving female sexual dysfunction ("FSD"), including without
limitation enhancing female sexual desire and responsiveness, and
preventing, treating and/or managing female sexual arousal disorder,
orgasmic disorder, and pain disorder.
1.14. "Third Party Payments" shall mean any and all cash and
non-cash consideration received by VI or VI's Affiliates for the grant
of a license or other right attributable to the FSD IP related to the
manufacturing, marketing, promotion, distribution, or sale of Products
or other method, process or procedure covered by the FSD IP, including
but not limited to initial lump-sum payments and milestones. All
non-cash consideration will be valued at the fair market value thereof
established by agreement of the parties or, failing that, by a qualified
"Big 5" or
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national independent accountant approved by VI and ASI. VI will bear the
cost of such accountant. Third Party Payments shall be included within
the definition of Net Sales by VI as of the date such Third Party
Payments are actually received by VI for purposes of determining the
applicable percentage of Third Party Payments to be paid to ASI under
Section 2.3.1 of this Settlement Agreement.
1.15. "Novel Chemical Entity" shall mean a new composition of
matter having a molecular structure that was not previously found in
nature or synthesized, and that is or comes to be conceived of or
developed by ASI or GWN during the term of this Settlement Agreement.
1.16. "Supplemental FSD IP" shall mean the patents and/or patent
applications identified in Technology Assignment Agreement C, attached
hereto as Exhibit 3.
2. PAYMENTS
2.1. Upfront Payment. Within three (3) business days of the
Effective Date, VI shall deposit with its counsel, Wilson Sonsini
Goodrich & Rosati, a check in the sum of $750,000, payable to ASI,
pending confirmation that pursuant to Section 12.1 ASI has furnished its
counsel, Rothwell Figg Ernst & Manbeck, with all IP materials described
in Section 12.1 and that ASI has directed its counsel to deposit such
materials for overnight delivery to VI counsel. Upon receipt of such
confirmation, VI shall direct its counsel to likewise deposit the
$750,000 payment for overnight delivery to ASI counsel. VI shall ensure
that the bank account from which the $750,000 check is drawn is
sufficiently funded to allow for the immediate availability of the
$750,000 upon ASI's deposit of said check. For the avoidance of doubt,
the depositing of the $750,000 payment for overnight delivery to ASI
counsel shall be made on the same day as the deposit of IP materials for
overnight delivery to VI counsel under Section 12.1 of this Settlement
Agreement.
2.1.1. ASI Right to Rescind. In the event that VI fails to
deliver payment to ASI under this Section 2.1, ASI shall have the
right to rescind this Settlement Agreement in its entirety.
2.2. Milestone Payments. VI agrees to make the following one-time
payments to ASI within thirty (30) days after achievement of the
specified milestone: (i) (***) upon the first submission, by VI or on
VI's behalf, of an NDA for a product covered by the Patent Rights; and
(ii) (***) upon the first approval of an NDA for a product covered by
the Patent Rights.
2.3. Continuing Payments.
2.3.1. Payment to ASI on Net Sales by VI or its Affiliates.
VI shall make payments to ASI at the applicable percentage of
annual Net Sales by VI, as defined herein, as follows:
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Annual Net Sales by VI Payment Rate
---------------------- ------------
Up to (***) (***)
(***)up to (***) (***)
(***)up to (***) (***)
Equal to or greater than (***) (***)
2.3.2. Payment to ASI on Net Sales for Products Sold by
Licensees. VI shall make payments to ASI at the applicable percentage of
annual Net Sales by Licensees, as defined herein, as follows:
Annual Net Sales by Licensees Payment Rate
----------------------------- ------------
Up to (***) (***)
(***)up to (***) (***)
(***)up to (***) (***)
(***)up to (***) (***)
Equal to or greater than (***) (***)
2.3.3. Third Party Royalties. If VI, or any Affiliate or
Licensees of VI, becomes obligated to pay to third parties royalties or
other amounts with respect to any Product through litigation or under
agreements for patent rights or other technologies which VI or such
Affiliate or Licensee determines are desirable to license or acquire
with respect to such Product, VI shall be responsible for making such
payments. VI shall not deduct such payments from any payments to ASI,
and such payments shall not be deducted from gross invoiced amounts for
Products in calculating Net Sales.
2.3.4. One Payment. No more than one payment shall be due to ASI
with respect to a sale of a particular Product or for a Third Party
Payment received by VI.
2.3.5. Payment Term. The payments due under this Section 2.3
shall be payable until the expiration of the last to expire Valid
Claim.
3. PAYMENTS; REPORTS; AND RECORDS
3.1. Payments.
3.1.1. Timing of Payments. After the First Commercial Sale of a
Product on which royalties are payable hereunder, VI shall make
quarterly written reports to ASI within sixty (60) days after the end of
each calendar quarter, stating in such report, separately for Net Sales
by VI and Net Sales by Licensees, the number, description and aggregate
Net Sales, by country, of each Product sold during the calendar quarter
upon which a royalty is
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payable. Concurrently with the making of such reports, VI shall
pay to ASI payments due at the rates specified hereunder. This
Section 3.1.1 shall not apply to any payments for Third Party
Payments.
3.1.2. Timing of Payments for Third Party Payments. Within
thirty (30) days following VI's actual receipt of any Third Party
Payment, VI shall pay any amount due ASI for such Third Party
Payment, at the applicable percentage set forth in Section 2.3.1,
and provide written notice to ASI indicating the amount of Third
Party Payment received and the percentage rate applied to such
amount.
3.1.3. Payment Method. All payments due under this
Settlement Agreement shall be made by bank wire transfer in
immediately available funds to a bank account designated by ASI,
with the exception of the Upfront Payment set forth in Section
2.1 above. All payments due to ASI hereunder shall be paid in
United States dollars.
3.1.4. Currency Conversion. If any currency conversion shall
be required in connection with the calculation of amounts payable
hereunder, such conversion shall be made using the buying
exchange rate for conversion of the foreign currency into U.S.
Dollars, quoted for current transactions reported in The Wall
Street Journal (U.S., Western Edition) for the last business day
of the calendar quarter to which such payment pertains.
3.1.5. Taxes. All payments required to be paid to ASI
pursuant to this Settlement Agreement shall be paid with
deduction for withholding for or on account of any applicable
sales, use, value-added, or other federal, state or local taxes
or import duties or tariffs, or similar governmental charges
imposed by a jurisdiction other than the United States
("Withholding Taxes"). VI shall provide ASI a certificate
evidencing payment of any Withholding Taxes hereunder, and shall
provide any further assistance reasonably requested by ASI to
enable ASI to obtain the benefit of any deduction.
3.2. Reports; Inspection. VI shall maintain accurate books and
records that enable the calculation of royalties payable hereunder to be
verified. VI shall retain the books and records for each calendar year
period for three (3) years after the submission of the corresponding
report under Section 3.1.1 hereof. Upon thirty (30) days prior notice to
VI, independent accountants selected by ASI, which shall be from a "Big
5" or national accounting firm and reasonably acceptable to VI, after
entering into a confidentiality agreement with VI, may have access to
VI's books and records during VI's normal business hours to conduct a
review or audit once per calendar year, for the sole purpose of
verifying the accuracy of VI's payments and compliance with this
Settlement Agreement. Any such inspection or audit shall be at ASI's
expense, however, if an inspection reveals underpayment of five percent
(5%) or more in any audit period, VI shall pay the costs of the
inspection. VI shall promptly pay to ASI any underpayment identified in
such an audit.
4. CONFIDENTIALITY
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4.1. Termination of Confidentiality Agreement. The
Confidentiality and Non-Disclosure Agreement, dated December 16, 1999,
by and between ASI, VI and ASIVI, is hereby terminated and any
information deemed Confidential Information under that Confidentiality
and Non-Disclosure Agreement shall be deemed Confidential Information
under this Settlement Agreement.
4.2. Confidentiality Obligations. Except as expressly provided
herein, the party in receipt of Confidential Information (the "Receiving
Party") shall not disclose to any third party or use for any purpose any
Confidential Information furnished to it by the other party (the
"Disclosing Party"). Notwithstanding the foregoing, Confidential
Information shall not include any information that, in each case as
demonstrated by written documentation: (i) was already known to the
Receiving Party, other than under an obligation of confidentiality, at
the time of disclosure; (ii) was generally available to the public or
otherwise part of the public domain at the time of its disclosure to the
Receiving Party; (iii) became generally available to the public or
otherwise part of the public domain after its disclosure and other than
through any act or omission of the Receiving Party in breach of this
Settlement Agreement; (iv) was subsequently lawfully disclosed to the
Receiving Party by a third party who did not acquire it directly or
indirectly from the Disclosing Party; or (v) was developed by the
Receiving Party without use of or reference to any Confidential
Information of the Disclosing Party.
4.3. Permitted Use and Disclosures. The Receiving Party may use
and disclose the Confidential Information of the Disclosing Party to the
extent necessary to exercise its rights or perform its obligations under
this Settlement Agreement, in filing or prosecuting applications and
patents, prosecuting or defending litigation, complying with applicable
governmental regulations or court order or otherwise submitting
information to tax or other governmental authorities, conducting trials,
or making a permitted sublicense or otherwise exercising rights
expressly granted to it pursuant to the terms of this Settlement
Agreement, provided that if the Receiving Party is required to make any
such disclosures of the Disclosing Party's Confidential Information,
other than pursuant to a confidentiality agreement, it shall give
reasonable advance notice to the Disclosing Party of such disclosure
and, save to the extent inappropriate in the case of patent
applications, shall use its reasonable efforts to secure confidential
treatment of such Confidential Information in consultation with the
Disclosing Party prior to its disclosure (whether through protective
orders or otherwise) and disclose only that portion of the Confidential
Information necessary to comply with such requirements.
4.4. Confidential Terms. Each party agrees not to disclose any
terms of this Settlement Agreement to any third party without the
consent of the other party; provided, disclosures may be made as
necessary in the exercise of a party's rights under this Settlement
Agreement, as required by securities or other applicable laws, or to a
party's accountants, attorneys and other professional advisors, or by
VI, ASIVI, and ASI to actual or prospective investors or corporate
partners.
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4.5. Information Furnished Under Settlement Agreement. All
information and materials furnished by a party to another party pursuant
to or in connection with the terms of this Settlement Agreement shall be
treated as Confidential Information, including but not limited to
information furnished under Sections 3.1, 12.1, and 15.9.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1. ASIVI. ASIVI represents and warrants to VI, ASI, and GWN
that: (i) it is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware;
and (ii) the execution, delivery and performance of this Settlement
Agreement have been duly authorized by all necessary company action on
the part of ASIVI; (iii) it is the sole, equal, and exclusive owner of
all right, title and interest in the FSD IP; (iv) it has the right to
grant the rights granted herein, and the FSD IP is free and clear of any
lien, encumbrance or security interest; (v) it has not previously
granted, and will not grant, any right, license or interest in and to
the FSD IP, or any portion thereof, inconsistent with the assignment to
VI; and (vi) there are no threatened or pending actions, lawsuits,
claims or arbitration proceedings in any way relating to the FSD IP,
other than the arbitration proceeding referenced in the Recitals above.
5.2. VI. VI represents, warrants and covenants to ASIVI, ASI, and
GWN that: (i) it is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware; (ii) the
execution, delivery and performance of this Settlement Agreement have
been duly authorized by all necessary corporate action on the part of
VI; (iii) it will use Commercially Reasonable Efforts to develop and
commercialize Products under the FSD IP; and (iv) it will use good faith
efforts to obtain and maintain the Patent Rights.
5.3. ASI, GWN. ASI and GWN represent, warrant and covenant to VI
and ASIVI as follows:
5.3.1. ASI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Tennessee.
5.3.2. The execution, delivery and performance of this
Settlement Agreement have been duly authorized by all necessary
corporate action on the part of ASI.
5.3.3. The Supplemental FSD IP includes all patents and
pending patent applications, which are owned or controlled as of
the Effective Date by ASI or GWN, or their Affiliates or
beneficiaries, that that relate to the Field of Use; that, as of
the Effective Date, no other such patents or patent applications
exist; that, as of the Effective Date, neither ASI nor GWN, nor
their Affiliates or beneficiaries, have transferred, assigned or
licensed any rights in such patents and patent applications to
any third-party; and that there are no threatened or pending
actions, lawsuits, claims or arbitration proceedings in any way
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relating to such patents and patent applications, other than the
arbitration proceeding referenced in the Recitals above;
5.3.4. ASI and GWN have previously transferred to ASIVI all
of the patents and pending patent applications owned or
controlled as of February 29, 2000 by ASI or GWN, or their
Affiliates or beneficiaries, that relate to the design,
development, manufacture, or use of products containing a
prostaglandin and/or other vasodilator within the Field of Use;
and
5.3.5. ASI and GWN have, concurrent with the execution of
this Settlement Agreement, assigned to VI all of the patents and
pending patent applications owned or controlled as of the
Effective Date by ASI or GWN, or their Affiliates or
beneficiaries, that relate to the Field of Use.
5.3.6. ASI and GWN have not assigned, licensed, sold or
otherwise transferred any patents or patent applications that
relate to the Field of Use during the period from February 29,
2000 up to and including the Effective Date of this Settlement
Agreement
6. INTELLECTUAL PROPERTY
6.1. Prosecution and Maintenance of Patent Rights. As provided by
Technology Assignment Agreement A, Technology Assignment Agreement B,
and Technology Assignment Agreement C, attached hereto as Exhibits 1, 2
and 3, respectively, VI shall, at its expense, have the sole right to
file, prosecute, maintain and enforce the Patent Rights, including
without limitation the patents and patent applications encompassed
thereby. VI shall not be entitled to offset any amount expended in
connection with such activities against payments, if any, due under
Article 2 of this Settlement Agreement. ASI and GWN shall provide any
cooperation reasonably requested by VI in connection therewith,
including but not limited to the IP Information delivered to VI pursuant
to Section 12.1 below.
6.2. No Liens. ASIVI or VI shall not incur, nor suffer to exist,
any lien, claim or other encumbrance on any of the FSD IP.
6.3. Enforcement. If either ASIVI, ASI, or GWN become aware that
any Patent Rights are being infringed by any third party, such party
shall promptly notify VI in writing describing the facts relating
thereto in reasonable detail. As provided in Technology Assignment
Agreement A, Technology Assignment Agreement B and Technology Assignment
Agreement C, attached hereto as Exhibits 1, 2 and 3, respectively, VI
shall have the sole right, in its discretion, to institute any action,
suit or proceeding, including any declaratory judgment action (each an
"Action"), at its expense, using counsel of its choice. ASI shall
provide any cooperation reasonably requested by VI in connection with
any such Action, at VI's expense. VI shall retain any amount recovered
in any such Action, but shall not be entitled to offset any amount
expended in connection with any such Action against payments, if any,
due under Article 2.
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7. DISPUTE RESOLUTION
7.1. Settlement of Disputes. The parties will attempt to settle
any dispute, controversy or claim between them arising out of or
relating to the validity, construction, enforceability or performance of
this Settlement Agreement, including disputes relating to alleged breach
or to termination of this Settlement Agreement (each, a "Dispute")
through consultation and negotiation in good faith and in the spirit of
mutual cooperation.
7.2. Failure to Settle Dispute. If those attempts fail, then the
Dispute may be made the subject of a lawsuit. If VI or ASIVI initiates
such a suit, it shall be filed and litigated in the state or federal
court in or for Knoxville, Tennessee. If ASI or GWN initiates such a
suit, it shall be filed and litigated in the state or federal court in
or for Santa Clara County, California.
7.3. Specific Performance. The parties hereto acknowledge that
recovery of damages will be an inadequate remedy for a breach of the
provisions of this Settlement Agreement and agree that, in the event of
any such breach or threatened breach, the respective rights and
obligations hereunder shall be enforceable by specific performance,
injunction, or other equitable relief, but nothing herein contained is
intended to, nor shall it, limit or affect any rights at law or by
statute or otherwise of any party aggrieved as against another for such
breach, it being the intention of the parties by this Section 7.3 to
make clear their agreement that their respective rights and obligations
in this Settlement Agreement shall be enforceable in equity as well as
at law or otherwise.
7.4. Expenses. Should any party breach this Settlement Agreement,
in addition to all other remedies available at law or in equity or
otherwise, such party shall pay all of any other party's costs and
expenses resulting therefrom and/or incurred in enforcing this
Settlement Agreement, including legal fees and expenses.
8. INDEMNIFICATION
8.1. Indemnification of ASI, GWN. VI and ASIVI shall indemnify,
defend and hold harmless ASI and its directors, officers and employees,
and GWN (each an "ASI Indemnitee") from and against any and all
liabilities, damages, losses, costs or expenses (including reasonable
attorneys' and professional fees and other expenses of litigation and/or
arbitration) (a "Liability") resulting from a claim, suit or proceeding
(any of the foregoing, a "Claim") brought by a third party against an
ASI Indemnitee, arising from or occurring as a result of (i) a material
breach by VI or ASIVI of their respective obligations under this
Settlement Agreement, (ii) the negligence or willful misconduct of VI or
of ASIVI, or (iii) activities performed by ASIVI, VI, its Affiliates, or
its Licensees in connection with the development, manufacture or sale of
any Product, except to the extent caused by the negligence or willful
misconduct of ASI.
8.2. Indemnification of VI and ASIVI. ASI and GWN shall
indemnify, defend and hold harmless VI and ASIVI and their respective
directors, officers and employees (each a "VI
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Indemnitee") from and against any and all liabilities, damages, losses,
costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration) (a "Liability")
resulting from a claim, suit or proceeding (any of the foregoing, a
"Claim") brought by a third party against a VI Indemnitee, arising from
or occurring as a result of (i) a material breach by ASI or GWN of their
respective obligations under this Settlement Agreement, (ii) the
negligence or willful misconduct of ASI or of GWN, or (iii) ASI's or
GWN's use of the FSD IP, except to the extent caused by the negligence
or willful misconduct of VI, its Affiliates, or Licensees, or of ASIVI.
8.3. Indemnification Procedures. In the event that an Indemnitee
intends to claim indemnification under this Article 8, it shall promptly
notify the other party (the "Indemnitor") in writing of such alleged
Liability. The Indemnitor shall have the sole right to control the
defense and/or settlement thereof, provided that the indemnified party
may participate in any such proceeding with counsel of its choice at its
own expense. The indemnity agreement in this Article 8 shall not apply
to amounts paid in settlement of any Claim 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
Article 8 but the omission so to deliver written notice to the
Indemnitor shall not relieve the Indemnitor of any liability that it may
have to any Indemnitee other than under this Article 8. The Indemnitee
under this Article 8, its employees and agents, shall cooperate fully
with the Indemnitor and its legal representatives and provide full
information in the investigation of any Claim covered by this
indemnification. Neither party shall be liable for any costs or expenses
incurred by the other party without its prior written authorization.
9. TERM AND TERMINATION
9.1. Term. The term of this Settlement Agreement shall commence
on the Effective Date, and unless earlier terminated as provided in this
Article 9, shall continue in full force and effect until the expiration
of the last to expire Valid Claim.
9.2. Termination for Cause. VI and ASIVI will have the right to
terminate this Settlement Agreement upon sixty (60) days notice of a
material breach by ASI or GWN, provided that ASI or GWN may avoid such
termination if before the end of such sixty (60) day period ASI or GWN
cures such breach or default. ASI and GWN will have the right to
terminate this Settlement Agreement upon sixty (60) days notice of a
material breach by VI or ASIVI, provided that VI or ASIVI may avoid such
termination if before the end of such sixty (60) day period VI or ASIVI
cures such breach or default. However, if the party accused of breach
disputes an asserted breach in writing within such sixty (60) day
period, the non-breaching party shall not have the right to terminate
this Settlement Agreement unless and until it has been determined in a
legal proceeding conducted pursuant to Section 7.2 that this Settlement
13
Agreement was materially breached, and the party accused of the breach
fails to cure the breach within sixty (60) days after such
determination.
9.3. Termination for Dissolution, Transfer of Interest to ASI. In
the event that VI is dissolved and permanently ceases its business
operations, ASI may terminate this Settlement Agreement and, to the
extent permitted by law, shall immediately become a joint owner with VI
of all right, title, and interest in and to the FSD IP, including the
Patent Rights. VI agrees to cooperate in good faith and to take any
reasonable action necessary to effectuate such joint ownership upon such
dissolution.
9.4. Accrued Rights and Obligations. Termination of this
Settlement Agreement for any reason shall not release any party hereto
from any liability which, at the time of such termination, has already
accrued to the other party or which is attributable to a period prior to
such termination, nor preclude either party from pursuing any rights and
remedies it may have hereunder or at law or in equity which accrued or
are based upon any event occurring prior to such termination.
9.5. Survival. The following provisions of this Settlement
Agreement shall survive termination of this Settlement Agreement for any
reason: Articles 1, 4, 6, 7, 9, 10, 11, 12, 13, 15, and 16, and Sections
14.1, 14.2, 14.3, 14.4, 14.5, 14.7, and 14.9. In the event that this
Settlement Agreement is terminated under Section 9.2 as a result of a
material breach, Sections 14.8.1 and 14.8.2 shall also survive such
termination.
10. SETTLEMENT
10.1. Settlement of all Claims and Counterclaims. This Settlement
Agreement resolves, satisfies, and settles all claims and counterclaims
involved in the aforementioned arbitration proceedings.
11. LICENSE AGREEMENT
11.1. Termination of License Agreement. The License Agreement
entered into by and between VI and ASIVI dated February 29, 2000 is
hereby terminated, and the parties thereto are released of all of their
rights and obligations thereunder. For the avoidance of doubt, the
survival provisions of Section 11.5 of the License Agreement are
likewise terminated and do not survive.
11.2. Effect of Termination of License Agreement. Termination of
the License Agreement pursuant to this Settlement Agreement will not be
deemed (a) to be a Dissolving Event permitting dissolution of ASIVI
pursuant to Section 8 of the Operating Agreement, and (b) to permit
termination of the Manufacturing and Supply Agreement between VI and ASI
dated February 29, 2000.
14
12. IP ANALYSIS
12.1. Information and Analysis. Within three (3) business days of
the Effective Date, ASI shall deposit with its counsel, Rothwell Figg
Ernst & Manbeck, all IP Information, (***) of the patents and patent
applications that ASI assigned to ASIVI. ASI shall direct its counsel to
prepare all such materials for overnight delivery to the offices of VI
counsel, Wilson Sonsini Goodrich & Rosati, 650 Page Mill Rd., Palo Alto,
California 94304, and upon receipt of confirmation that VI counsel is in
custody of the payment for ASI described in Section 2.1 above, to
deposit all such IP Information materials for shipment in the manner
previously described. VI may use all IP Information and materials
furnished by ASI in order to (***) and to exercise its rights under this
Settlement Agreement. At VI's reasonable request and direction, ASI
agrees to cooperate with VI in (***). For the avoidance of doubt, the
depositing of IP materials for overnight delivery shall be made on the
same day as the deposit of the $750,000 payment for overnight delivery
under Section 2.1 of this Settlement Agreement.
The parties acknowledge that ASI has previously furnished counsel for VI
with certain IP Information, and that additional copies of such
materials need not be provided in the manner described above.
Nonetheless, ASI and GWN agree to that they shall ensure that VI is in
receipt of all IP Information, whether previously furnished or not.
13. MEMORANDUM OF UNDERSTANDING
13.1. Termination of Memorandum of Understanding. The MOU entered
into by and between VI and ASI dated October 14, 1999 is hereby
terminated, and the parties thereto are released of all of their rights
and obligations thereunder. For the avoidance of doubt, any survival
provisions of the MOU are terminated and do not survive.
14. ASIVI OPERATING AGREEMENT
14.1. Assignment of FSD IP to VI. ASIVI hereby transfers and
assigns to VI its entire right, title, and interest in the FSD IP.
Assignment of the Patent Rights is provided for in Technology Assignment
Agreement A and Technology Assignment Agreement B, attached hereto as
Exhibits 1 and 2, respectively. Such assignments to VI shall include all
rights to use and practice the FSD IP and to make, use and sell
Products.
14.2. Modification to Allow Transfer of Interest. Section 7.1 of
the ASIVI Operating Agreement is deleted in its entirety, and in its
place inserted the following: "A Member may Transfer all of its Interest
to another Member."
14.3. Transfer and Consent to Transfer of Interest of Managing
Member. ASI hereby transfers and assigns, and VI hereby consents to the
transfer and assignment by ASI, to VI its entire interest in ASIVI.
15
14.4. Effect of Transfer of Interest. The transfer of ASI's
interest in ASIVI to VI:
14.4.1. will relieve ASI of all obligations and liabilities
arising under the Operating Agreement.
14.4.2. will not entitle ASI to any redemption of its
interest, distribution, or payment in connection with its
assignment other than as set forth in this Settlement Agreement.
14.5. Deletion of Sections. Sections 4.6, 5.4, 8.1(e), 8.1(f),
8.2(d)(iii), 11.4, 11.5, 11.6, and 11.7 are hereby deleted from the
Operating Agreement in their entirety.
14.6. Initial Publication. The initial publication of a clinical
study resulting from Product development shall list GWN as the lead
author.
14.7. Retention of Rights; Abandonment of Supplemental FSD IP. To
the extent that any portion of the U.S. Provisional Patent Application
filed on September 8, 2002 set forth in Technology Assignment Agreement
C, attached hereto as Exhibit 3, discloses, claims, and/or relates to
subject matter that is outside the field of sexual function in men and
women, all rights in and to such subject matter shall be retained by
ASI. Except with respect to that subject matter retained by ASI pursuant
to this Section 14.7, if any, ASI shall not claim priority to any patent
or patent application that is the subject of the Patent Rights or the
Supplemental FSD IP.
Following the Execution Date of this Settlement Agreement, VI agrees to
(***)
16
14.8. Covenants Not to Sue.
14.8.1. VI Covenant Not to Sue. VI shall not make, or
threaten to make, any claim against ASI or GWN alleging
infringement of any Valid Claim based on the conduct by ASI or
GWN of (i) basic research and testing within the Field of Use for
non-commercial purposes, (ii) direct patient care by GWN, or
(iii) activities outside the Field of Use. The covenant set forth
in this Section 14.8.1 shall not extend to activities within the
Field of Use related to research, testing and development of
products for commercial purposes, and shall not be construed as a
grant of any rights to ASI or GWN under any Investigational New
Drug application of ASIVI or VI, or under any other patent or
other intellectual property owned or controlled by VI, including
without limitation the patents and patent applications
encompassed by the Patent Rights. The performance by ASI or GWN
of any activities under the covenant set forth in this Section
14.8.1 shall not result in any liability of ASIVI or VI, and ASI
and GWN agree to indemnify ASIVI and VI to the extent of any such
liability. The covenant granted herein is independent of the
option and conditional license grant set forth in that certain
Manufacture and Supply Agreement between VIVUS, Inc. and
AndroSolutions, Inc. dated February 29, 2000. Notwithstanding
Section 16.3 below, the covenant set forth in this Section 14.8.1
is personal to ASI and GWN and may not be assigned or otherwise
transferred.
14.8.2. ASI, GWN Covenant Not to Sue and Statement of
Non-Liability. ASI and GWN shall not make, or threaten to make,
any claim against VI, its Affiliates or Licensees alleging
infringement based upon VI's, its Affiliates' or its Licensees'
making, having made, importing, having imported, exporting,
having exported, distributing, having distributed, selling,
having sold, using, or offering for sale products within the
Field of Use. ASI and GWN further agree that VI, its Affiliates
or Licensees cannot be held liable for infringement of a right
purportedly originating from ASI or GWN relating to the Field of
Use. The parties acknowledge and agree that the covenant not to
sue and statement of non-liability set forth in this Section
14.8.2 is intended to and shall bind all present and future
successors, heirs, assigns, and licensees of GWN or ASI who come
to acquire any rights from GWN or ASI relating to products within
the Field of Use, and ASI and GWN shall provide any such third
parties with notice of the covenant not to sue and the statement
of non-liability.
ASI and GWN further covenant that they shall, within ten (10)
days of the Effective Date for any existing patents or patent
applications, or concurrently with the filing of any patent
application after the Effective Date, record with the U.S. Patent
and Trademark Office, or other appropriate government entity in
the case of international patents, a short form of the covenant
contained in this Section 14.8.2, in the form attached hereto as
Exhibit 4, in connection with any patent or patent application
within the Field of Use.
The covenant set forth in this Section 14.8.2 shall not extend to
activities by VI, its
17
Affiliates, or its Licensees (i) for products not within the
Field of Use, or (ii) involving the use of a Novel Chemical
Entity in a product. In addition, other than the covenant set
forth in this Section 14.8.2, this Section 14.8.2 shall not be
construed as a grant of any other rights to VI, its Affiliates,
or its Licensees under any intellectual property owned or
controlled by ASI or GWN. The performance by VI, its Affiliates,
and its Licensees of any activities under the covenant set forth
in this Section 14.8.2 shall not result in any liability of ASI
or GWN, and VI agrees to indemnify ASI and GWN to the extent of
any such liability.
14.9. ASIVI Dissolution. Subsequent dissolution of ASIVI, for
whatever reason, shall have no effect on this Settlement Agreement
whatsoever.
15. MANUFACTURE AND SUPPLY AGREEMENT
15.1. Modification of Definitions. The following terms in the
Manufacture and Supply Agreement shall have the same meaning and
definition as set forth in this Settlement Agreement, notwithstanding
the definitions provided in the Manufacture and Supply Agreement: "FSD
IP," "Product," and Valid Claim."
15.1.1. FSD IP. All references to or use of the term "ASIVI
Technology" in the Manufacture and Supply Agreement are deleted,
and in their place inserted the term "FSD IP."
15.2. Deletion of Sections. The following Sections are deleted in
their entirety from the Manufacture and Supply Agreement: 1.3, 1.7,
1.7.1, 1.7.2, 1.8, 1.10, and 9.
15.3. Independent Accountant. Section 4.1 of the Manufacturing
and Supply Agreement is modified by adding the following text at the end
of the section: "Any accountant chosen or designated under this Section
4.1 shall be limited to a "Big 5" or national accounting firm."
15.4. Payments Cumulative. Section 4.3 of the Manufacture and
Supply Agreement is modified as follows: all text in Section 4.3 after
the word "certain" is deleted, and in its place inserted the following:
"Settlement Agreement executed in July 2001."
15.5. Termination. Section 8.1 of the Manufacture and Supply
Agreement is modified as follows: the reference to "License Agreement"
is deleted, and in its place inserted the following: "Settlement
Agreement executed in July 2001."
15.6. Assignment. Section 10.5 is deleted in its entirety, and in
its place inserted the following: "Neither party may assign this Supply
Agreement or any of its rights or obligations hereunder except with the
written consent of the other party."
15.7. VI Best Efforts. Section 3.1 of the Manufacturing and
Supply Agreement is modified by adding the following text at the end of
the section: "To the extent practicable, VI agrees to
18
use its best efforts to cause each of its Licensees, if any, to: (i)
purchase its requirements for Product from VI, or (ii) purchase the
Applicable Percentage of such Licensee's requirements of Product
directly from ASI.
15.8. Confidentiality. Article 5 of the Manufacture and Supply
Agreement is deleted in its entirety, and in its place inserted the
following: "The definition of Confidential Information under Section 1.3
of the Settlement Agreement and the parties' rights and obligations in
connection therewith under Article 4 of the Settlement Agreement are
incorporated by reference herein."
15.9. VI Disclosure of Manufacturing Specifications, Good Faith
Cooperation. In order for ASI to evaluate and consider the exercise of
its option under Section 2.1 of the Manufacture and Supply Agreement, VI
shall provide to ASI written notice of its intention to submit an NDA
for a Product within nine (9) months of such submission. Upon such
notice from VI, ASI shall, within 30 days, provide VI with written
notice that ASI desires to evaluate its manufacturing option, that ASI
possesses the financial wherewithal and capacity to exercise such
option, and that it possesses a good faith and reasonable expectation
that it is able to exercise such option, furnishing VI with
contemporaneous evidence reasonably sufficient to support ASI's
representations as to financial wherewithal, capacity and expectations.
Upon such notice from ASI, VI shall, within twenty (20) days, disclose
the following information relating to the Product that VI reasonably
believes will be included in such submission: (i) specifications and
test methods for the excipients, active ingredient, drug product, and
container closure system; (ii) formulation and master batch records; and
(iii) manufacturing equipment list and specifications. The parties
acknowledge and agree that the aforementioned information may be
modified at any time and is subject to FDA approval. VI agrees to notify
ASI of any such modifications and shall update or supplement the
disclosures required under this Section 15.9 accordingly. VI further
agrees to cooperate in good faith and, at ASI's reasonable request, to
provide such additional information necessary and proper for ASI to
obtain the full benefit of its option under Section 2.1 of the
Manufacture and Supply Agreement.
15.10. Notices. Section 10.3 of the Manufacture and Supply
Agreement is deleted in its entirely, and in its place inserted the
following: "Any notice required or permitted by this Manufacture and
Supply Agreement shall be in writing and shall be sent by hand delivery,
by prepaid registered or certified mail, return receipt requested, or by
facsimile transmission, addressed to the other party at the address
shown in Section 16.4 of the Settlement Agreement or at such other
address for which such party gives notice hereunder. Such notice shall
be deemed to have been given upon delivery, if sent by hand delivery,
three (3) days after deposit in the mail, or upon transmission by
facsimile."
19
16. MISCELLANEOUS
16.1. Governing Law. This Settlement Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware,
without reference to its conflicts of laws provisions.
16.2. Independent Contractors. The relationship of the parties
hereto is that of independent contractors. The parties hereto are not
deemed to be agents, partners or joint ventures of the other for any
purpose as a result of this Settlement Agreement or the transactions
contemplated thereby. Neither party shall have the power to obligate or
bind the other party in any manner whatsoever.
16.3. Assignment. The parties agree that their rights and
obligations under this Settlement Agreement shall not be delegated,
transferred or assigned to a third party without the prior written
consent of the other party hereto; provided that either party may assign
all of its rights and obligations under this Settlement Agreement,
without the other party's consent (a) to its Affiliates, and (b) to an
entity that acquires all or substantially all of the business or assets
of the assigning party to which this Settlement Agreement pertains,
whether by merger, reorganization, acquisition, sale or otherwise; which
Affiliate or acquiring entity (y) agrees in a writing provided to the
non-assigning party prior to any assignment, to assume all of the
obligations of the assigning party hereunder, and (z) has provided to
the non-assigning party evidence reasonably satisfactory to the
non-assigning party of its ability to perform all such obligations in a
timely manner. This Settlement Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted
assigns.
16.4. Notices. Any notice required or permitted by this
Settlement Agreement shall be in writing and shall be sent by hand
delivery, by prepaid registered or certified mail, return receipt
requested, or by facsimile transmission, addressed to the other party at
the address shown below or at such other address for which such party
gives notice hereunder. Such notice shall be deemed to have been given
upon delivery, if sent by hand delivery, three (3) days after deposit in
the mail, or upon transmission by facsimile.
20
To ASIVI: ASIVI, LLC
1172 Castro Street
Mountain View, California 94040
Attention: Legal Affairs
Facsimile: (650) 934-5389
With a copy to: Wilson Sonsini Goodrich & Rosati, PC
650 Page Mill Road
Palo Alto, CA 94304
Attention: Mark Casper, Esq.
Facsimile: (650) 496-4082
To VIVUS: VIVUS, Inc.
1172 Castro Street
Mountain View, CA 94040
Attention: Legal Affairs
Facsimile: (650) 934-5389
With a copy to: Wilson Sonsini Goodrich & Rosati, PC
650 Page Mill Road
Palo Alto, CA 94304
Attention: Mark Casper, Esq.
Facsimile: (650) 496-4082
To ASI: AndroSolutions, Inc.
200 Fort Sanders West Blvd., Suite 309
Knoxville, TN 37922
Attention: Gary W. Neal, M.D., President
Facsimile: (865) 531-6550
With a copy to: Zoltick Technology Law Group, PLLC
Loudoun Tech Center
21515 Ridgetop Circle, Suite 200
Sterling, VA 20166
Attention: Martin M. Zoltick, Esq.
Facsimile: (571) 434-7264
21
To GWN: AndroSolutions, Inc.
200 Fort Sanders West Blvd., Suite 309
Knoxville, TN 37922
Attention: Gary W. Neal, M.D., President
Facsimile: (865) 531-6550
With a copy to: Zoltick Technology Law Group, PLLC
Loudoun Tech Center
21515 Ridgetop Circle, Suite 200
Sterling, VA 20166
Attention: Martin M. Zoltick, Esq.
Facsimile: (571) 434-7264
16.5. Force Majeure. Neither party shall lose any rights
hereunder or be liable to the other party for damages or losses (except
for payment obligations) on account of failure of performance if such
failure is occasioned by war, strike, fire, Act of God, earthquake,
flood, lockout, embargo, governmental acts or orders or restrictions,
failure of suppliers, or any other reason where failure to perform is
beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the nonperforming party and such
party has exerted all reasonable efforts to avoid or remedy such force
majeure; provided, however, that in no event shall a party be required
to settle any labor dispute or disturbance.
16.6. Advice of Counsel. VI, ASIVI, ASI, and GWN have each
consulted counsel of their choice regarding this Settlement Agreement,
and each acknowledges and agrees that this Settlement Agreement shall
not be deemed to have been drafted by one party or another and will be
construed accordingly.
16.7. Compliance with Laws. Each party shall furnish to the other
party any information requested or required by that party during the
term of this Settlement Agreement or any extensions hereof to enable
that party to comply with the requirements of any U.S. or foreign, state
and/or government agency.
16.8. Severability; Waiver. If any provision(s) of this
Settlement Agreement are determined to be invalid or unenforceable by a
court of competent jurisdiction, the remainder of the Settlement
Agreement shall remain in full force and effect without said provision.
The parties shall in good faith negotiate a substitute clause for any
provision declared invalid or unenforceable, which shall most nearly
approximate the intent of the parties in entering this Settlement
Agreement. The failure of a party to enforce any provision of the
Settlement Agreement shall not be construed to be a waiver of the right
of such party to thereafter enforce that provision or any other
provision or right.
22
16.9. Entire Agreement; Modification. This Settlement Agreement
sets forth the entire agreement and understanding of the parties with
respect to the subject matter hereof, and supersedes all prior
discussions, agreements and writings in relation thereto, except that
the Operating Agreement, and the Manufacture and Supply Agreement, as
modified herein, remain in effect. This Settlement Agreement may not be
altered, amended or modified in any way except by a writing signed by
both parties.
16.10. Counterparts. This Settlement Agreement may be executed in
two counterparts, each of which shall be deemed an original and which
together shall constitute one instrument.
23
IN WITNESS WHEREOF, ASIVI, VI, ASI, and GWN have caused this Settlement
Agreement to be executed by their respective duly authorized representatives as
of the date first written above.
ASIVI, LLC VIVUS, INC.
By: /s/ Gary W. Neal By: /s/ Leland Wilson
------------------------------------ ------------------------------------
AndroSolutions, Inc. Leland F. Wilson
Managing Member President/Chief Executive Officer
Gary W. Neal, M.D., President
Date: July 10, 2001 Date: July 12, 2001
------------------------------------ ------------------------------------
ANDROSOLUTIONS, INC.
By: /s/ Leland Wilson By: /s/ Gary W. Neal
------------------------------------ ------------------------------------
VIVUS, Inc. Gary W. Neal, M.D.
Managing Member President
Leland F. Wilson
President/Chief Executive Office
Date: July 12, 2001 Date: July 10, 2001
------------------------------------ ------------------------------------
GARY W. NEAL, M.D.
/s/ Gary W. Neal
-------------------------------------
Gary W. Neal, M.D.
Individually and on behalf of himself
Date: July 10, 2001
---------------------
24
EXHIBIT 1
TECHNOLOGY ASSIGNMENT AGREEMENT A
ASSIGNMENT
ASIVI, LLC, a Delaware limited liability company, with offices at 1172
Castro Street, Mountain View, CA 94040 (ASIVI), for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby assigns, sells and transfers to VIVUS, Inc., a Delaware corporation
having offices at 1172 Castro Street, Mountain View, CA 94040, and its
successors, assigns and legal representatives, all hereinafter referred to as
the "Assignee":
1. its entire right, title and interest in and to any and all patents
and pending patent applications relating to, inter alia, the design,
development, manufacturing, and use of products containing a prostaglandin
and/or other vasodilator for the treatment of female sexual dysfunction, as
specified on Exhibit A attached hereto (the "FSD IP");
2. the full and complete right to file patent applications in the name
of the Assignee, its designee, or its designee's election, on the aforesaid FSD
IP, in all countries of the world;
3. the entire right, title and interest in and to any Letters Patent
which may issue thereon in the United States or in any country, and any
renewals, revivals, reissues, reexaminations and extensions thereof, and any
patents of confirmation, registration and importation of the same; and
4. the entire right, title and interest in all Convention and Treaty
Rights of all kinds thereon, including without limitation all rights of priority
in any country of the world, in and to the above FSD IP.
ASIVI hereby authorizes and requests the competent authorities to grant
and to issue any and all such Letters Patent in the United States and throughout
the world to Assignee of the entire right, title and interest therein, as fully
and entirely as the same would have been held and enjoyed by ASIVI had this
assignment, sale and transfer not been made.
ASIVI further agrees at any time to execute and to deliver upon request
of Assignee such additional documents, if any, as are necessary or desirable to
secure patent protection on said FSD IP, throughout all countries of the world,
and otherwise to do the necessary acts to give full effect to and to perfect the
rights of Assignee under this Assignment, including the execution, delivery and
procurement of any and all further documents evidencing this assignment,
transfer and sale as may be necessary or desirable.
ASIVI hereby covenants that no assignment, sale, agreement or
encumbrance has been or will be made or entered into which would conflict with
this assignment.
25
ASIVI further covenants that it will, upon request by Assignee, provide
Assignee promptly with all pertinent facts and documents relating to said FSD IP
and said Letters Patent and legal equivalents as may be known and accessible to
ASIVI, and will testify as to the same in any interference, litigation or
proceeding related thereto and will promptly execute and deliver to Assignee or
its legal representatives any and all papers, instruments or affidavits required
to apply for, obtain, maintain, issue and enforce said application, said FSD IP
and said Letters Patent and said equivalents thereof which may be necessary or
desirable to carry out the purposes thereof.
ASIVI, LLC
Date: July 12, 2001 By: /s/ Leland Wilson
----------------- -------------------
VIVUS, Inc.
Managing Member
Leland F. Wilson
President/Chief Executive Officer
Date: July 10, 2001 By: /s/ Gary W. Neal
----------------- -----------------------------
AndroSolutions, Inc.
Managing Member
Gary W. Neal, M.D.
President
26
EXHIBIT A
DESCRIPTION OF PROPERTY CONTRIBUTED TO VIVUS, INC. BY ASIVI, LLC
(***)
27
EXHIBIT 2
TECHNOLOGY ASSIGNMENT AGREEMENT B
ASSIGNMENT
ASIVI, LLC, a Delaware limited liability company, with offices at 1172
Castro Street, Mountain View, CA 94040 (ASIVI), for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby assigns, sells and transfers to VIVUS, Inc., a Delaware corporation
having offices at 1172 Castro Street, Mountain View, CA 94040, and its
successors, assigns and legal representatives, all hereinafter referred to as
the "Assignee":
1. its entire right, title and interest in and to any and all patents
and pending patent applications relating to, inter alia, the design,
development, manufacturing, and use of products containing a prostaglandin
and/or other vasodilator for the treatment of female sexual dysfunction, as
specified on Exhibit A attached hereto (the "FSD IP");
2. the full and complete right to file patent applications in the name
of the Assignee, its designee, or its designee's election, on the aforesaid FSD
IP, in all countries of the world;
3. the entire right, title and interest in and to any Letters Patent
which may issue thereon in the United States or in any country, and any
renewals, revivals, reissues, reexaminations and extensions thereof, and any
patents of confirmation, registration and importation of the same; and
4. the entire right, title and interest in all Convention and Treaty
Rights of all kinds thereon, including without limitation all rights of priority
in any country of the world, in and to the above FSD IP.
ASIVI hereby authorizes and requests the competent authorities to grant
and to issue any and all such Letters Patent in the United States and throughout
the world to Assignee of the entire right, title and interest therein, as fully
and entirely as the same would have been held and enjoyed by ASIVI had this
assignment, sale and transfer not been made.
ASIVI further agrees at any time to execute and to deliver upon request
of Assignee such additional documents, if any, as are necessary or desirable to
secure patent protection on said FSD IP, throughout all countries of the world,
and otherwise to do the necessary acts to give full effect to and to perfect the
rights of Assignee under this Assignment, including the execution, delivery and
procurement of any and all further documents evidencing this assignment,
transfer and sale as may be necessary or desirable.
ASIVI hereby covenants that no assignment, sale, agreement or
encumbrance has been or will be made or entered into which would conflict with
this assignment.
28
ASIVI further covenants that it will, upon request by Assignee, provide
Assignee promptly with all pertinent facts and documents relating to said FSD IP
and said Letters Patent and legal equivalents as may be known and accessible to
ASIVI, and will testify as to the same in any interference, litigation or
proceeding related thereto and will promptly execute and deliver to Assignee or
its legal representatives any and all papers, instruments or affidavits required
to apply for, obtain, maintain, issue and enforce said application, said FSD IP
and said Letters Patent and said equivalents thereof which may be necessary or
desirable to carry out the purposes thereof.
ASIVI, LLC
Date: July 12, 2001 By: /s/ Leland Wilson
----------------- -------------------
VIVUS, Inc.
Managing Member
Leland F. Wilson
President/Chief Executive Officer
Date: July 10, 2001 By: /s/ Gary W. Neal
----------------- -----------------------------
AndroSolutions, Inc.
Managing Member
Gary W. Neal, M.D.
President
29
EXHIBIT A
DESCRIPTION OF PROPERTY CONTRIBUTED TO VIVUS, INC. BY ASIVI, LLC
(***)
30
EXHIBIT 3
TECHNOLOGY ASSIGNMENT AGREEMENT C
ASSIGNMENT
AndroSolutions, Inc., a Tennessee corporation with a principal place of
business at Suite 309, 200 Fort Sanders West Blvd., Knoxville, TN 37922
(collectively with its Affiliates, "ASI"), for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, hereby assigns,
sells and transfers to VIVUS, Inc., a Delaware corporation having offices at
1172 Castro Street, Mountain View, CA 94040, and its successors, assigns and
legal representatives, all hereinafter referred to as the "Assignee":
1. its entire right, title and interest in and to any and all patents
and pending patent applications relating to, inter alia, the treatment of female
sexual dysfunction, as specified on Exhibit A --------- attached hereto (the "
Supplemental FSD IP");
2. the full and complete right to file patent applications in the name
of the Assignee, its designee, or its designee's election, on the aforesaid
SUPPLEMENTAL FSD IP, in all countries of the world;
3. the entire right, title and interest in and to any Letters Patent
which may issue thereon in the United States or in any country, and any
renewals, revivals, reissues, reexaminations and extensions thereof, and any
patents of confirmation, registration and importation of the same; and
4. the entire right, title and interest in all Convention and Treaty
Rights of all kinds thereon, including without limitation all rights of priority
in any country of the world, in and to the above SUPPLEMENTAL FSD IP.
ASI hereby authorizes and requests the competent authorities to grant
and to issue any and all such Letters Patent in the United States and throughout
the world to Assignee of the entire right, title and interest therein, as fully
and entirely as the same would have been held and enjoyed by ASI had this
assignment, sale and transfer not been made.
ASI further agrees at any time to execute and to deliver upon request of
Assignee such additional documents, if any, as are necessary or desirable to
secure patent protection on said SUPPLEMENTAL FSD IP, throughout all countries
of the world, and otherwise to do the necessary acts to give full effect to and
to perfect the rights of Assignee under this Assignment, including the
execution, delivery and procurement of any and all further documents evidencing
this assignment, transfer and sale as may be necessary or desirable.
31
ASI hereby covenants that no assignment, sale, agreement or encumbrance
has been or will be made or entered into which would conflict with this
assignment.
ASI further covenants that it will, upon request by Assignee, provide
Assignee promptly with all pertinent facts and documents relating to said
SUPPLEMENTAL FSD IP and said Letters Patent and legal equivalents as may be
known and accessible to ASI, and will testify as to the same in any
interference, litigation or proceeding related thereto and will promptly execute
and deliver to Assignee or its legal representatives any and all papers,
instruments or affidavits required to apply for, obtain, maintain, issue and
enforce said application, said SUPPLEMENTAL FSD IP and said Letters Patent and
said equivalents thereof which may be necessary or desirable to carry out the
purposes thereof.
ANDROSOLUTIONS, INC.
Date: July 10, 2001 By: /s/ Gary W. Neal
----------------- -----------------------------
Gary W. Neal, M.D.
President
32
EXHIBIT A
DESCRIPTION OF PROPERTY CONTRIBUTED TO VIVUS, INC.
BY ANDROSOLUTIONS, INC.
(***)
33
EXHIBIT 4
SHORT FORM PROVIDING NOTICE OF COVENANT NOT TO SUE
AND STATEMENT OF NON-LIABILITY
"All subject matter claimed within this patent or patent application is
subject to the following covenant not to sue and statement of non-liability:
THE HOLDER OF ANY RIGHTS UNDER THIS PATENT OR PATENT APPLICATION SHALL
NOT MAKE, OR THREATEN TO MAKE, ANY CLAIM AGAINST VIVUS, INC. ("VI"), ITS
AFFILIATES OR LICENSEES ALLEGING INFRINGEMENT BASED UPON VI'S, ITS AFFILIATES'
OR ITS LICENSEES' MAKING, HAVING MADE, IMPORTING, HAVING IMPORTED, EXPORTING,
HAVING EXPORTED, DISTRIBUTING, HAVING DISTRIBUTED, SELLING, HAVING SOLD, USING,
OR OFFERING FOR SALE PRODUCTS RELATING TO THE DIAGNOSIS, PROPHYLAXIS, AND/OR
TREATMENT OF FEMALE SEXUAL DYSFUNCTION, INCLUDING WITHOUT LIMITATION ENHANCING
FEMALE SEXUAL DESIRE AND RESPONSIVENESS, AND PREVENTING, TREATING AND/OR
MANAGING FEMALE SEXUAL AROUSAL DISORDER, ORGASMIC DISORDER, AND PAIN DISORDER.
FURTHER, VI, ITS AFFILIATES OR LICENSEES CANNOT BE HELD LIABLE FOR
INFRINGEMENT OF ANY RIGHTS UNDER THIS PATENT OR PATENT APPLICATION RELATING TO
THE DIAGNOSIS, PROPHYLAXIS, AND/OR TREATMENT OF FEMALE SEXUAL DYSFUNCTION,
INCLUDING WITHOUT LIMITATION ENHANCING FEMALE SEXUAL DESIRE AND RESPONSIVENESS,
AND PREVENTING, TREATING AND/OR MANAGING FEMALE SEXUAL AROUSAL DISORDER,
ORGASMIC DISORDER, AND PAIN DISORDER.
THIS COVENANT NOT TO SUE AND STATEMENT OF NON-LIABILITY IS INTENDED TO
AND SHALL BIND ALL PRESENT AND FUTURE SUCCESSORS, HEIRS, ASSIGNS, AND LICENSEES
OF ANY RIGHTS UNDER THIS PATENT OR PATENT APPLICATION RELATING TO PRODUCTS FOR
THE DIAGNOSIS, PROPHYLAXIS, AND/OR TREATMENT OF FEMALE SEXUAL DYSFUNCTION,
INCLUDING WITHOUT LIMITATION ENHANCING FEMALE SEXUAL DESIRE AND RESPONSIVENESS,
AND PREVENTING, TREATING AND/OR MANAGING FEMALE SEXUAL AROUSAL DISORDER,
ORGASMIC DISORDER, AND PAIN DISORDER.
A HOLDER OF ANY RIGHTS UNDER THIS PATENT OR PATENT APPLICATION MUST
PROVIDE NOTICE OF THE ABOVE-STATED COVENANTS AND STATEMENT OF NON-LIABILITY TO
ANY THIRD PARTY ACQUIRING RIGHTS UNDER THIS PATENT OR PATENT APPLICATION."