COLLABORATION AGREEMENT

 

COLLABORATION AGREEMENT

by and between

NOVELOS THERAPEUTICS, INC.

(a Delaware corporation)

and

MUNDIPHARMA INTERNATIONAL CORPORATION LIMITED

(a Bermuda limited company)

February 11, 2009

(Portions of this exhibit have been omitted pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended and filed separately with the Securities and Exchange Commission. Omitted portions are indicated herein by brackets.)

 

Table of Contents

1.  DEFINITIONS		1
	1.1.  Definitions	1
	1.2.  Interpretations.	9
2.  LICENSE		9
	2.1.  Grant	9
	2.2.  Sublicense	10
	2.3.  Limitations and Reservations	10
	2.4.  Improvements	10
	2.5.  Non-Competition	11
3.  PAYMENTS		11
	3.1.  License Fee and Royalties	11
	3.2.  Calculations and Payment of Royalties.	11
	3.3.  Records	12
	3.4.  Payments	13
	3.5.  Overdue Payments	13
	3.6.  Taxes	13
	3.7.  Termination Report and Payment	13
4.  DEVELOPMENT		13
	4.1.  Alliance Manager.	13
	4.2.  Joint Consultative Committee.	14
	4.3.  JCC Responsibilities.	15
	4.4.  JCC Meetings.	15
	4.5.  Decision Making.	16
	4.6.  Pre-Clinical, CMC Development and Manufacturing Development.	16
	4.7.  Clinical Development	17
	4.8.  Data Sharing.	18
	4.9.  Collaborator Commitment to Development of Lead Product.	19
	4.10.  Development of Other Licensed Products	21
5.  REGULATORY ACTIVITIES.		21
	5.1.  Responsibility	21
	5.2.  Correspondence	21
6.  MARKETING, SELLING AND COMMERCIALIZATION.		21
	6.1.  Commercialization Efforts	21
	6.2.  Pricing/Reimbursement and Product Launch	22
	6.3.  Collaborator Trademarks.	22
	6.4.  Commercialization	23
	6.5.  Control	23

7.  MANUFACTURING.		23
	7.1.  Manufacturer Selection	23
	7.2.  GMP Batches	23
	7.3.  Novelos as Manufacturer	23
	7.4.  Collaborator as Manufacturer	24
	7.5.  Technology Transfer	24
8.  CONFIDENTIALITY		24
	8.1.  Limited Disclosure and Use	24
	8.2.  Effect of Termination	25
	8.3.  Unauthorized Use; Remedies	25
	8.4.  Exclusive Property	25
9.  REPRESENTATIONS; WARRANTIES		25
	9.1.  Limited Representation and Warranty.	25
	9.2.  Disclaimer of Warranties	28
10.  COVENANTS		29
	10.1.  Mutual Covenants.	29
	10.2.  Covenants of Novelos	29
	10.3.  Covenants of Collaborator	31
11.  INDEMNIFICATION AND INSURANCE		31
	11.1.  Indemnification.	31
	11.2.  Insurance	32
12.  PROTECTION OF INTELLECTUAL PROPERTY RIGHTS		33
	12.1.  Cooperation of Collaborator	33
	12.2.  Third Party Infringement	33
13.  TERM AND TERMINATION; REVERSION OF RIGHTS		34
	13.1.  Term of Agreement	34
	13.2.  Novelos Right to Terminate.	34
	13.3.  Collaborator Right to Terminate.	35
	13.4.  Effect of Termination	36
14.  LIMITATION OF LIABILITY		38
15.  GENERAL		38
	15.1.  Waivers and Amendments.	38
	15.2.  Entire Agreement	38
	15.3.  Severability	38
	15.4.  Relationship of the Parties	39
	15.5.  Notices	39
	15.6.  Governing Law, Jurisdiction and Dispute Resolution.	40
	15.7.  Counterparts	41
	15.8.  Assignment	41
	15.9.  Force Majeure	41

	15.10.  Further Assurances	41
	15.11.  Intellectual Property	41
	15.12.  Press Releases and External Communications	42
	15.13.  Non-Solicitation of Employees	42
	15.14.  Expenses	42
	15.15.  Headings	42
Schedule 9.1.1(e)  Government Consents and Filings		44
Attachment 1  Novelos Patents		45
Attachment 2  Novelos Trials		46
Attachment 3  Territory		47
Attachment 4  Milestone Payments		48
Attachment 5  Part A - Royalty Payments		49
Attachment 5 (continued)  Part B – Super Royalty Payments		51
Attachment 6  CMC Work Program		52
Attachment 7   Pre-Clinical Studies		54
Attachment 8  Manufacturing Development Work		56
Attachment 9  Alternative Dispute Resolution		57
Attachment 10  Press Release		59

COLLABORATION AGREEMENT

THIS COLLABORATION AGREEMENT (this “Agreement”), effective as of February 11, 2009 (the “Effective Date”), is made between Novelos Therapeutics, Inc., a Delaware corporation (“Novelos”), having a place of business at One Gateway Center, Suite 504, Newton, Massachusetts, and Mundipharma International Corporation Limited, a Bermuda limited company (“Collaborator”), having a place of business at 14 Par-la-Ville Road, P.O. Box HM2332, Hamilton HMJX Bermuda, with respect to the following facts:

RECITALS

A. Novelos has intellectual property rights, technology and know-how related to oxidized glutathione-based compounds for the treatment of cancer and hepatitis.

B. The Parties desire to enter into a collaborative program pursuant to which Novelos will grant Collaborator an exclusive License in the Territory (capitalized terms used but not defined in these Recitals shall have the meanings defined below) to develop, manufacture, market and sell the Licensed Products on the terms and conditions set forth below.

NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth below, the Parties agree as follows:

 

1.  DEFINITIONS

 

1.1.  Definitions .  For purposes of this Agreement, the terms set forth in this Section 1 shall have the respective meanings set forth below:

1.1.1.  “Action” shall mean all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions.

1.1.2.  “Affiliate” shall mean, with respect to either Party, any person, firm, trust, corporation or other entity or combination thereof which directly or indirectly (a) controls a Party, (b) is controlled by a Party, or (c) is under common control with a Party; the terms “control” and “controlled” meaning ownership of fifty percent (50%) or more, including ownership by trusts with substantially the same beneficial interests, of the voting and equity rights of such person, firm, trust, corporation or other entity or combination thereof or the power to direct the management of such person, firm, trust, corporation or other entity or combination thereof.

1.1.3.  “Agreement” shall have the meaning set forth in the preamble, together with all appendices, exhibits and schedules attached hereto, as the same may be amended or supplemented from time to time, by written agreement of the Parties.

1.1.4.  “Alliance Manager” shall have the meaning set forth in Section 4.1.1.

1.1.5.  “API” shall mean the active pharmaceutical ingredient of a product.

1.1.6.  “BAM” shall mean the Russian private joint stock company BAM, having a principal place of business at Pskovskaya Str., 17, St Petersburg 190 121, Russia.

1.1.7.  “BAM-RL” shall mean the Russian private joint stock company BAM – Research Laboratories, having a principal place of business at Pskovskaya Str., 17, St Petersburg 190 121, Russia.

1.1.8.  “2000 BAM Agreement” shall mean the Technology, Assignment, Legal Protection and Consideration Agreement dated June 20, 2000 between BAM-RL and Novelos.

1.1.9.  “2005 BAM Agreement” shall mean the Technology, Assignment, Legal Protection and Consideration Agreement dated April 1, 2005 between BAM and Novelos

1.1.10.  “Bankruptcy Code” shall mean, as applicable, the U.S. Bankruptcy Code, as amended from time to time, and the rules and regulations and guidelines promulgated thereunder or the bankruptcy laws of any Governmental Authority, as amended from time to time, and the rules and regulations and guidelines promulgated thereunder.

1.1.11.  “CMC” shall mean chemistry, manufacturing and controls.

1.1.12.  “CTD” shall mean a Common Technical Document providing for a harmonized structure and format for an NDA suitable for submission for Regulatory Approval in the Territory, consistent with the ICH Guidelines.

1.1.13.  “Co-Chair” shall have the meaning set forth in Section 4.2.4.

1.1.14.  “Collaborator” shall have the meaning set forth in the preamble of this Agreement.

1.1.15.  “Collaborator Indemnitees” shall have the meaning set forth in Section 11.1.1.

1.1.16.  “Collaborator Know-How” shall mean, information, procedures, instructions, techniques, data, technical information, knowledge and experience (including, without limitation, toxicological, pharmaceutical, clinical, non-clinical and medical data, health registration data and marketing data), designs, dossiers and technology relating to or concerned with the Licensed Products (or any of their components or constituent parts) owned or controlled by Collaborator and used in connection with the Licensed Products, whether now existing or developed by or on behalf of Collaborator or its Affiliates after the date of this Agreement, in written, electronic or other form; provided, however, that the Collaborator Know-How shall not include the Collaborator Patents, the Novelos Know-How or the Novelos Patents.

1.1.17.  “Collaborator Patents” shall mean all Patents owned or controlled by Collaborator throughout the Territory that claim any improvements upon or modifications to the inventions and discoveries disclosed or claimed in any of the Novelos Patents or which claim the manufacture or use of any composition of matter or method of use relating to the Licensed Products and/or relating to GSSG in any combination with heavy metals.

1.1.18.  “Collaborator Technology” shall mean any Collaborator Patents and Collaborator Know-How and other discoveries and technical information developed, owned or controlled by Collaborator related to the Licensed Products.  All Collaborator Technology (except published Collaborator Patents) shall be the Confidential Information of Collaborator.

1.1.19.  “Collaborator Trials” shall mean the following trials in respect of the Lead Product to be conducted by Collaborator:  (i) the Label Expansion Trial, and (ii) any bridging or other studies that are required by the Japanese Regulatory Authorities to be conducted to obtain Regulatory Approval in Japan, provided that the Collaborator decides such trials are commercially viable to conduct pursuant to Section 4.9.2(c), in each case as such trials may be modified after the Effective Date in consultation with the JCC.

1.1.20.  “Commercially Reasonable Efforts” shall mean a level of resources, efforts and urgency to develop and commercialize the Lead Product applied by a Party that is consistent with such Party’s practices in actively pursuing the development and commercialization of its other pharmaceutical products at a similar stage of product life to the Lead Product and of similar market potential, profit potential and strategic value, based on conditions prevailing at the relevant time, taking into account, without limitation, competing products, market demand, proprietary position, safety, regulatory status, medical or scientific developments in the field of oncology, any adverse governmental intervention and any potential legal liability or other legal issues.

1.1.21.  “Confidential Information” shall mean, with respect to a Party, all secret, confidential, proprietary or non-publicly available information, data and materials of any kind whatsoever, and all tangible and intangible embodiments thereof of any kind whatsoever, which is disclosed by such Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”) pursuant to this Agreement, together with analyses, data, compilations, studies or other documents or records prepared by the Receiving Party or its representatives that contain or otherwise reflect or are generated from such disclosed information, and, (i) if disclosed in writing or other tangible medium, is marked or identified in writing as confidential at the time of disclosure to the Receiving Party or (ii) if otherwise disclosed or if not so marked or identified in writing, is identified as confidential at the time of disclosure to the Receiving Party and is summarized and identified as confidential in writing or by electronic means within thirty (30) days after such disclosure or which would reasonably be understood to be confidential.  Notwithstanding the foregoing, Confidential Information of a Party shall not include information which, and only to the extent, the Receiving Party can establish by written documentation or electronic records (a) has been publicly known prior to disclosure of such information by the Disclosing Party to the Receiving Party; (b) has become publicly known without fault on the part of the Receiving Party, subsequent to disclosure of such information by the Disclosing Party to the Receiving Party; (c) has been received by the Receiving Party at any time from a source, other than the Disclosing Party, rightfully having possession of and the right to disclose such information free of confidentiality obligations; (d) has been otherwise known by the Receiving Party free of confidentiality obligations prior to disclosure of such information by the Disclosing Party to the Receiving Party; or (e) has been independently developed (as demonstrated by contemporaneous written or electronic evidence maintained in the ordinary course of business by the Receiving Party) by employees or agents of the Receiving Party without access to or use of such information disclosed by the Disclosing Party to the Receiving Party.

1.1.22.  “Disclosing Party” shall have the meaning set forth in Section 1.1.21.

1.1.23.  “Effective Date” shall have the meaning set forth in the preamble of this Agreement.

1.1.24.  “EMEA” shall mean the European Medicines Agency.

1.1.25.  “European Registration Trial” shall have the meaning set forth in Section 4.7.1.

1.1.26.  “FDA” shall mean the United States Food and Drug Administration.

1.1.27.  “First Commercial Sale” shall mean the first sale, or other distribution for consideration, of a Licensed Product to a Third Party by Collaborator or its Affiliate or Sublicensee in a country in the Territory following grant of a Regulatory Approval and Pricing Approval for a Licensed Product in such country, but excluding distributions for purposes of product demonstrations, test marketing, clinical trial purposes or compassionate or similar uses.

1.1.28.  “Force Majeure” shall have the meaning set forth in Section 15.9.

1.1.29.  “GCP” shall mean the current Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses, and reporting of clinical trials, including without limitation the requirements in 21 C.F.R. Parts 11, 50, 54, 56, 312, and 314 and principles detailed in ICH Guidelines, that provide assurance that the data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of trial subjects are protected.

1.1.30.  “Generic Product Competition” shall mean where generic products that are chemically equivalent to the relevant Licensed Product are being legally sold in a country of the Territory and Collaborator’s volume market share in such country is reduced as a result of the availability of such generic products by twenty percent (20%) or more of the market share by volume in the country(ies) where the generic products are being sold, as evidenced by IMS data.

1.1.31.  “GLP” shall mean the current Good Laboratory Practices as promulgated under the Act at 21 C.F.R. Part 58 and principles detailed in ICH Guidelines related to laboratory practice.

1.1.32.  “GMP” shall mean all applicable standards relating to current Good Manufacturing Practices for fine chemicals, API, intermediates, bulk products or finished pharmaceutical products, including without limitation (i) the principles detailed in the Act at 21 U.S.C. 351(a)(2)(B), in U.S. FDA regulations at 21 C.F.R. Parts 210 and 211 and in The Rules Governing Medicinal Products in the European Community, Volume IV, Good Manufacturing Practice for Medicinal Products, (ii) the principles detailed in ICH Guidelines relating to the manufacture of API and finished pharmaceuticals, (iii) Laws promulgated by any Governmental Authority having jurisdiction over the manufacture of compounds or Licensed Products or any components of either of the foregoing, or (iv) guidance documents (including advisory opinions, compliance policy guides and guidelines) promulgated by any Governmental Authority having jurisdiction over the manufacture of compounds or Licensed Products, which guidance documents are being implemented within the pharmaceutical manufacturing industry.

1.1.33.  “Governmental Authority” shall mean any (i) federal, state, local, foreign or international government; (ii) court, arbitral or other tribunal or governmental or quasi-governmental authority of any nature (including any governmental agency, political subdivision, instrumentality, branch, department, official, or entity); or (iii) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature pertaining to government.

1.1.34.  “GSSG” shall mean oxidized glutathione.

1.1.35.  “ICH Guidelines” shall mean the guidelines of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use.

1.1.36.  “Improvement” shall mean all discoveries, concepts, ideas, confidential information, trade secrets, and know-how relating to the Licensed Products, the Novelos Technology and/or the Collaborator Technology, whether patentable or not, made or conceived during the Agreement by Novelos or its Affiliates, Collaborator or its Affiliates, any Sublicensees, or any combination thereof, alone or together, including, but not limited to, all processes, new uses of known processes, methods, articles of manufacture, machines, instrumentation, chemical composition of matter, techniques, and formulae.

1.1.37.  “Independent Data” shall mean, with respect to the Licensed Products, all data, including without limitation, toxicological, pharmaceutical, clinical, non-clinical and medical data, health registration data and marketing data, developed or procured by or on behalf of a Sponsoring Party or its Affiliates in an Independent Trial in respect of which the Non-Sponsoring Party has not paid to the Sponsoring Party fifty percent (50%) of its out-of-pocket development costs.

1.1.38.  “Independent Trial” shall have the meaning set out in Section 4.7.5.

1.1.39.  “JCC” shall mean the Joint Consultative Committee established by the Parties pursuant to Section 4.2.

1.1.40.  “Label Expansion Trial” shall mean a Phase II clinical study of the Lead Product in first-line advanced NSCLC to be conducted by Collaborator to support a broader use of the Lead Product in combination with other platinum-based chemotherapy agents instead of a more limited use of the Lead Product in combination with carboplatin and paclitaxel, which is a combination used more commonly in the USA than in the Territory.

1.1.41.  “Laws” shall mean all applicable laws, rules, regulations, judgments, orders, decrees, statutes, ordinances and other requirements of any Governmental Authority or instrumentality within the Territory and any other jurisdiction in which Licensed Products are developed, manufactured or sold, pursuant to the terms of this Agreement.

1.1.42.  “Lead Product” shall mean NOV-002, a combination of GSSG and cisplatin (1000:1 molar ratio), including the salts, esters, metabolites, tautomers, isomers, conjugates and complexes thereof.

1.1.43.  “Lee’s Pharma Agreement” shall mean the Collaboration Agreement dated December 14, 2007 between Novelos and Lee’s Pharma (HK) Ltd. pursuant to which Novelos granted an exclusive license to Lee’s Pharma (HK) Ltd. to develop, make, have made, register, use, market, sell, have sold, import, distribute and offer for sale the Lead Product, NOV-205 or any product containing GSSG and to exploit the Novelos Technology in the Lee’s Pharma Territory.

1.1.44.  “Lee’s Pharma Territory” shall mean Hong Kong, Macau, the People’s Republic of China and Taiwan.

1.1.45.  “License” shall have the meaning set forth in Section 2.1.

1.1.46.  “Licensed Products” shall mean all pharmaceutical preparations in all dosage strengths, formulations and methods of administration that contain the Lead Product or any other combination of GSSG and any heavy metal in any molar ratio, including in each case the salts, esters, metabolites, tautomers, isomers, conjugates and complexes thereof and any Improvements thereto made by either Party individually or jointly by the Parties as set forth in Section 2.4.

1.1.47.  “Losses” shall have the meaning set forth in Section 11.1.1.

1.1.48.  “MAA” shall mean marketing authorization application.

1.1.49.  “NDA” shall mean a new drug application or supplemental new drug application or any amendments or supplements thereto in CTD format.

1.1.50.  “Net Sales” shall mean with respect to Licensed Products sold, licensed or otherwise distributed (hereinafter “Sale”), the gross amount invoiced or otherwise charged to Third Parties in an arm’s length transaction in connection with the Sale of the Licensed Products by Collaborator or any Affiliate of Collaborator or any Sublicensee for all Licensed Products sold by Collaborator or any Affiliate of Collaborator or any Sublicensee in the Territory, less the following amounts actually deducted or allowed:

For Licensed Products distributed to Third Parties in other than an arm’s length transaction (for example, at less than fair market value), excluding distributions for purposes of product demonstrations, test marketing, clinical trial purposes or compassionate or similar uses, the amount of Net Sales attributed to such Licensed Products shall be the fair market value of the Licensed Products based on the Sale in an arm’s length transaction of comparable amounts thereof.

1.1.51.  “Non-Sponsoring Party” shall have the meaning set forth in Section 4.8.5.

1.1.52.  “NOV-205” shall mean a mixture of GSSG and inosine developed by Novelos which acts as a hepatoprotective agent with immunomodulating and anti-inflammatory properties and is currently in Phase 1b clinical trials in the U.S.A.

1.1.53.  “Novelos” shall have the meaning set forth in the preamble of this Agreement.

1.1.54.  “Novelos Indemnitees” shall have the meaning set forth in Section 11.1.2.

1.1.55.  “Novelos Know-How” means all discoveries, information, procedures, instructions, techniques, data, technical information, knowledge and experience (including, without limitation, toxicological, pharmaceutical, clinical, non-clinical and medical data, health registration data and marketing data), designs, dossiers and technology relating to or concerned with the Licensed Products (or any of their components or constituent parts) owned or controlled by Novelos and used in connection with the Licensed Products, whether now existing or developed by or on behalf of Novelos or its Affiliates after the date of this Agreement, in written, electronic or other form; provided, however, that the Novelos Know-How shall not include the Novelos Patents, the Collaborator Know-How or the Collaborator Patents.

1.1.56.  “Novelos Patents” shall mean all Patents owned or controlled by Novelos throughout the world that claim the manufacture or use of any composition of matter or method of use relating to the Licensed Products and relating to oxidized glutathione in any combination with heavy metals, which are set forth in Attachment 1 to this Agreement.

1.1.57.  “Novelos Technology” shall mean the Novelos Patents and Novelos Know-How.  All Novelos Technology (except published Novelos Patents) shall be Confidential Information of Novelos.

1.1.58.  “Novelos Trials” shall mean the Phase II and Phase III clinical trials being or to be conducted by or on behalf of Novelos for the Lead Product, which are summarized in Attachment 2 to this Agreement, as may be modified after the Effective Date in consultation with the JCC.

 

1.1.59.  “NSCLC” shall mean non-small cell lung cancer.

1.1.60.  “Party” shall mean Novelos or Collaborator and, when used in the plural, shall mean Novelos and Collaborator collectively.

1.1.61.  “Patents” shall mean any patents and pending patent applications that have issued or may be issued in any country, including (i) all provisional and non-provisional applications, substitutions, divisions, confirmations, continuations, continuations-in-part, registrations, supplementary protection certificates and any renewals of any of the above; (ii) all letters patent granted thereon, and all patents-of-addition, re-issues, re-examinations and extensions or restorations by existing or future extension or restoration mechanisms; and (iii) all supplementary protection certificates, together with any foreign counterpart thereof.

1.1.62.  “Pricing Approval” shall mean the licenses, registrations, authorizations and approvals of any Regulatory Authority in the Territory necessary for the pricing and/or reimbursement of the Licensed Products in each country of the Territory.

1.1.63.  “Receiving Party” shall have the meaning set forth in Section 1.1.21.

1.1.64.  “Regulatory Approval” shall mean the technical, medical and scientific licenses, registrations, authorizations and approvals of any Regulatory Authority in the Territory, necessary for the distribution, marketing, promotion, offer for sale, use, import, export or sale of the Licensed Products in the Territory, but excluding Pricing Approval.

1.1.65.  “Regulatory Authority” shall mean any international, national (e.g., the Medicines and Healthcare products Regulatory Agency (the “MHRA”)), supra-national (e.g., EMEA), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity involved in the granting of Regulatory Approval and/or Pricing Approval in the Territory.

1.1.66.  “Royalties” shall have the meaning set forth in Section 3.1.2.

1.1.67.  “Royalty Period” shall have the meaning set forth in Section 3.2.1.

1.1.68.  “Sale” shall have the meaning set forth in Section 1.1.50.

1.1.69.  “Sponsoring Party” shall have the meaning set forth in Section 4.8.5.

1.1.70.  “Sublicensee” shall mean a non-Affiliate sublicensee appointed by Collaborator in one or more countries of the Territory and approved by Novelos in accordance with Section 2.2(ii), or a non-Affiliate sublicensee appointed by Novelos in one or more countries outside the Territory, as the case may be.

1.1.71.  “Term” shall have the meaning set forth in Section 13.1.

1.1.72.  “Territory” shall mean the countries listed in Attachment 3 hereto.

 

1.1.73.  “Third Party” shall mean any person or entity other than Collaborator, Novelos or an Affiliate or Sublicensee of Collaborator or Novelos.

1.1.74.  “Trademarks” shall mean the trademarks, domain names and internet sites to be selected and owned by Collaborator under which the Licensed Products will be promoted, marketed and sold by Collaborator and its Affiliates and Sublicensees in the Territory in accordance with Section 6.3.

1.1.75.  “USA” shall mean the United States of America, its territories and possessions.

 

1.2.  Interpretations.

1.2.1.  In the event an ambiguity or a question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring either Party by virtue of the authorship of any provisions of this Agreement.  The language in this Agreement is to be construed in all cases according to its fair meaning.

1.2.2.  The definitions of the terms herein apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun will include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” will be deemed to be followed by the phrase “without limitation.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein), (ii) any reference to any Laws herein will be construed as referring to such Laws as from time to time enacted, repealed or amended, (iii) any reference herein to any person will be construed to include the person’s successors and assigns, (iv) the words “herein”, “hereof” and “hereunder”, and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (v) any reference herein to the words “mutually agree” or “mutual written agreement” will not impose any obligation on either Party to agree to any terms relating thereto or to engage in discussions relating to such terms except as such Party may determine in such Party’s sole discretion, (vi) all references herein to Sections or Attachments will be construed to refer to Sections and Attachments to this Agreement, (vii) the word “days” means calendar days unless otherwise specified, (viii) except as otherwise expressly provided herein all references to “$” or “dollars” refer to the lawful money of the U.S., and (ix) the words “copy” and “copies” and words of similar import when used in this Agreement include, to the extent available, electronic copies, files or databases containing the information, files, items, documents or materials to which such words apply.

 

2.  LICENSE

 

2.1.  Grant .  During the Term hereof and subject to the other terms and conditions of this Agreement, Novelos hereby grants to Collaborator (i) the exclusive, royalty-bearing, non-transferable and non-sublicenseable (except as set forth in Section 2.2 hereof) right to research, register, develop, make, have made, use, warehouse, promote, market, sell, have sold, import, distribute, and offer for sale the Licensed Products solely and exclusively in the Territory and (ii) the exclusive, non-transferable and non-sublicenseable (except as set forth in Section 2.2 hereof) right to exploit the Novelos Technology in the Territory solely for the purpose of researching, registering, developing, making, having made, using, warehousing, promoting, marketing, selling, having sold, importing, distributing and offering for sale the Licensed Products in the Territory (the foregoing rights referred to hereinafter as the “License”).

 

 

2.2.  Sublicense .  Collaborator shall be entitled to sublicense its License under Section 2.1 (i) to any of its Affiliates without Novelos’s approval and (ii) to Sublicensees with Novelos’s prior written approval, such approval not to be unreasonably delayed or withheld.   Collaborator shall guarantee the performance of its Affiliates and Sublicensees under this Agreement with respect to any sublicense granted pursuant to this Section 2.2.

 

2.3.  Limitations and Reservations .  Novelos reserves for itself all rights not granted herein, including, but not limited to, (i) the irrevocable right to research, register, develop, make, have made, use, warehouse, market, sell, have sold, import, distribute, and offer for sale the Licensed Products outside of the Territory, and (ii) the irrevocable right to exploit the Novelos Technology outside of the Territory.  Except for the license set forth in Section 2.1(ii), no title in or to the Novelos Technology is transferred to Collaborator pursuant to this Agreement, and no title in or to any Collaborator Technology is transferred to Novelos pursuant to this Agreement.

 

2.4.  Improvements .  Any Improvement shall be owned exclusively by the Party who discovered, created or developed such Improvement.  If such Improvement rises to the level of a patentable invention, then the Party who discovered, created or developed it shall be the sole owner of any Patents related to such Improvement.  Such Party shall be responsible for the preparation, filing, prosecution and maintenance of any Patent covering such an Improvement, and shall bear the costs associated with obtaining and maintaining any such Patent.  Any Improvement discovered, created or developed during any joint trials that the Parties elect to conduct pursuant to Section 4.7.4 shall be jointly owned by the Parties in proportion to the Parties’ respective financial contribution to such joint trial, and Collaborator shall be responsible for the preparation, filing, prosecution and maintenance of any Patent covering such a joint Improvement in the Territory, and Novelos shall be responsible for the preparation, filing, prosecution and maintenance of any such Patent outside the Territory, with each Party bearing the costs associated with obtaining and maintaining any such Patent in their respective geographic territories.  To the extent that any Improvement discovered, created or developed by or on behalf of Novelos relates to the Licensed Products, including new dosage forms, formulations and methods of administration, such Improvements will be communicated to Collaborator and licensed to Collaborator pursuant to Section 2.1 hereof without additional compensation, unless such Improvements are discovered, created or developed by or on behalf of Novelos in an Independent Trial, in which case such Improvements will be automatically licensed to Collaborator pursuant to Section 2.1 upon receipt by Novelos of Collaborator’s cash payment of fifty percent (50%) of the out-of-pocket development costs in accordance with the procedure set forth in Section 4.8.5.  To the extent that any Improvement discovered, created or developed by or on behalf of Collaborator relates to the Licensed Products, including new dosage forms, formulations and methods of administration, such Improvements will be communicated to Novelos and automatically licensed to Novelos without any compensation, unless such Improvements are discovered, created or developed by or on behalf of Collaborator in an Independent Trial, in which case such Improvements will be automatically licensed to Novelos upon receipt by Collaborator of Novelos’ cash payment of fifty percent (50%) of the out-of-pocket development in accordance with the procedure set forth in Section 4.8.5.

 

 

2.5.  Non-Competition .  In further consideration of the payments made and to be made under this Agreement, Novelos agrees that during the Term it shall not, and shall not grant rights to an Affiliate or a Third Party to, research, register, develop, make, have made, use, warehouse, promote, market, sell, have sold, offer for sale, import, distribute or commercialize pharmaceutical products containing the Licensed Products or NOV-205 for any indication in the field of oncology in the Territory.  For the avoidance of doubt, nothing in this Agreement shall be construed to prevent Novelos from developing, registering, making, using, selling, commercializing or otherwise engaging in any activities outside the Territory pertaining to pharmaceutical products containing the Licensed Products or NOV-205 for any indication or granting rights to an Affiliate or a Third Party to do any of the foregoing outside the Territory, provided that such activities do not interfere with Collaborator’s rights under this Agreement inside the Territory, as determined in accordance with the decision making provisions of Section 4.5.

 

3.  PAYMENTS

 

3.1.  License Fee and Royalties .  For the License granted in Section 2.1 of this Agreement, Collaborator shall make the following payments to Novelos, subject to the recovery by Collaborator of the costs of the European Registration Trial in accordance with the mechanism set forth in Section 4.7.1:

3.1.1.  milestone payments in the amounts described in Attachment 4 , at the times set forth in Attachment 4 , such payment shall be made within 30 days of reaching the applicable milestone;

3.1.2.  a royalty on Net Sales of the Licensed Products in the percentages described in Attachment 5 – Part A (“Royalties”); and

3.1.3.  super royalty payments in the amounts described in Attachment 5 – Part B , at the times set forth in Attachment 5 – Part B , such payment shall be made within thirty (30) days of reaching the applicable Net Sales thresholds.

 

3.2.  Calculations and Payment of Royalties .

3.2.1.  Unless set forth otherwise on Attachment 5 – Part A , Royalties shall be paid in quarterly (based on a calendar year beginning on January 1st and ending on December 31 ^st ) increments (the “Royalty Period”).  Royalties shall be calculated for each Royalty Period as of the last day of each such Royalty Period.  Payment of Royalties with respect to each Royalty Period shall be due within forty-five (45) days after the end of each Royalty Period, beginning with the Royalty Period in which the First Commercial Sale of a Licensed Product occurs.

3.2.2.  Within forty-five days of the end of each Royalty Period (whether or not Royalties are due), Collaborator shall deliver to Novelos true and accurate reports, giving such particulars of the business conducted by Collaborator and its Affiliates and Sublicensees under this Agreement as shall be pertinent to an accounting of Royalties and other payments under this Agreement.  Reports shall include at least the following on a Licensed Product-by-Licensed Product and country-by-country basis:

 

3.3.  Records .  Collaborator shall keep at its principal place of business, or upon written notice to Novelos, the principal place of business of the appropriate division to which this Agreement relates, accurate records in sufficient and customary detail such that the amounts payable may be verified.  During the Term and for a period of three (3) years following termination, Collaborator, its Affiliates and Sublicensees shall permit a Third Party accounting firm appointed by Novelos and reasonably acceptable to Collaborator to inspect, audit and copy its books and records regarding the sale of Licensed Products, during normal business hours, provided that Collaborator, its Affiliates or Sublicensees, as applicable, has received at least thirty (30) business days’ prior written notice regarding the foregoing.  Novelos may request its Third Party accounting firm to conduct such audit no more than once in any twelve (12) month period at any one location.  Such records shall include but not be limited to invoice registers and original invoices; product sales analysis reports; price lists, accounting general ledgers; sublicense and distributor agreements; product catalogues and marketing materials; sales tax returns; and shipping documents.  Such examination shall be made at Novelos’s expense, except that if such examination discloses a shortage of eight percent (8%) or more in the amount of Royalties or other payments due Novelos for any year, then, in addition to paying the shortage of Royalties, Collaborator shall reimburse Novelos for the cost of such examination or audit, including any professional fees and out of pocket costs incurred by Novelos.  A written confidentiality agreement will be required before the Third Party accounting firm commences such an examination or audit, and the results of the audit shall be treated as Confidential Information unless and until a related legal Action (including arbitration) is taken.

 

 

3.4.  Payments .  All amounts owing to either Party under this Agreement shall be paid in U.S. dollars, by check or other instrument representing immediately available funds payable to the receiving Party or in a wire transfer sent to an account specified by the receiving Party, if any are listed.  If Collaborator (or an Affiliate or Sublicensee) invoices or otherwise charges Third Parties in connection with the Sale of the Licensed Products in a currency other than U.S. dollars, Royalties payable shall be expressed in their U.S. dollar equivalent based on the rate of exchange applicable on the last working day of the corresponding Royalty Period as published in the Wall Street Journal.  Although Collaborator and Novelos may arrange for direct payment to Novelos by an Affiliate or Sublicensee of Collaborator (as applicable), Collaborator shall remain responsible for all unpaid amounts due pursuant to this Agreement.

 

3.5.  Overdue Payments .  Overdue payments shall bear simple interest until paid at an annual rate of two percent (2%) or the maximum rate allowed by law, whichever is lower.  Interest accruing under this Section 3.5 shall be due on demand.

 

3.6.  Taxes .  Collaborator is responsible for all taxes related to this Agreement and the transactions contemplated hereby, except taxes based on net income or gross receipts of Novelos.  If Collaborator is required by applicable law to deduct any taxes, assessments or other charges from or in respect of any amounts payable to Novelos under this Agreement, such deduction shall be made and paid to the relevant taxing authority or other Governmental Authority in accordance with all applicable laws, and only the remaining amount after such deduction shall be paid to Novelos hereunder.  The amounts payable by Collaborator to Novelos pursuant to this Section 3.6 shall in no event be increased by such taxes, assessments or other charges.  The Parties shall reasonably cooperate in completing and filing documents required under the provisions of any applicable tax treaty or under any other applicable law, and take any other reasonable actions in order to enable Collaborator to make such payments to Novelos without any deduction or withholding.  In addition, upon Novelos’ request, Collaborator shall furnish Novelos with proof of payment of any taxes, assessment or charges deducted hereunder.

 

3.7.  Termination Report and Payment .  Within forty-five (45) days after the date of termination of this Agreement (pursuant to Section 13 of this Agreement), Collaborator shall make a final report and payment to Novelos as set forth in this Agreement for the then-current Royalty Period.

 

4.  DEVELOPMENT

 

4.1.  Alliance Manager .

4.1.1.  Each Party shall appoint one employee representative who possesses a good understanding of and experience in technical development and regulatory issues and the requisite experience to act as its alliance manager for this relationship (the “Alliance Manager”).  As soon as the Lead Product has achieved Regulatory Approval in any of the United Kingdom, Germany, France, Spain or Italy, then each Party shall replace its respective Alliance Manager with an employee representative who possesses a good understanding of commercialization and marketing issues to act as its Alliance Manager in respect of the launch, promotion, marketing sale and distribution of the Lead Product in the Territory.

4.1.2.  Each Party may replace its respective Alliance Manager at any time upon written notice to the other.  Any Alliance Manager may designate a substitute with due qualification and authority to temporarily perform the functions of that Alliance Manager.  Each Alliance Manager shall be charged with creating and maintaining a collaborative work environment between the Parties, including coordinating JCC meetings in conjunction with the Co-Chairs.  The Alliance Managers will meet and confer on a regular basis, as often as necessary but not less than once per month, either in person or by teleconference, to discuss the status of the Parties’ alliance under this Agreement.  Each Alliance Manager will also be responsible for:

 

4.2.  Joint Consultative Committee .

4.2.1.  The Parties shall establish a Joint Consultative Committee (“JCC”) to consult and collaborate on all operational matters related to the Lead Product in the Territory, including all pre-clinical development, CMC, clinical development, manufacturing, regulatory, launch strategy and marketing matters.

4.2.2.  The JCC shall consist of an equal number of three (3) representatives of each Party, which shall include each Party’s Alliance Manager.  JCC members shall be appropriately qualified and experienced to make a meaningful contribution to JCC meetings.  The names of the initial members of the JCC shall be provided by each Party to the other Party within thirty (30) days after the Effective Date.  A Party’s JCC members may be replaced with an appropriately qualified representative at any time upon written advance notice to the other Party.

4.2.3.  In the event a JCC representative from either Party is unable to attend or participate in a meeting of the JCC, the Party who designated such representative may designate an appropriately qualified substitute representative for the meeting, in its sole discretion.

4.2.4.  Each Party shall appoint one of its JCC representatives to co-chair the meetings (each, a “Co-Chair”).  The Co-Chairs shall (i) coordinate and prepare the agenda and ensure the orderly conduct of the meetings; (ii) attend each meeting; and (iii) prepare and issue minutes of each meeting within thirty (30) days thereafter accurately reflecting the discussions and decisions of the JCC.  Such minutes from each meeting shall not be finalized until each Co-Chair representing each Party has reviewed and confirmed the accuracy of such minutes in writing.  The Co-Chairs shall solicit agenda items from JCC representatives and provide an agenda along with appropriate information for such agenda reasonably in advance of any meeting.  It is understood that such agenda will include all items requested by either Co-Chair for inclusion therein.  In the event the Co-Chair from either Party is unable to attend or participate in a JCC meeting, the Party who designated such Co-Chair may designate a substitute Co-Chair for such meeting in its sole discretion.

 

 

4.3.  JCC Responsibilities .

4.3.1.  The JCC shall have the following responsibilities:

4.3.2.  The JCC shall act solely in an advisory and consultative capacity with respect to matters concerning the development and commercialization of the Lead Product both within and outside the Territory.

4.3.3.  The JCC shall conduct its discussions in good faith with a view to operating to the mutual benefit of the Parties and in furtherance of the successful development and commercialization of the Lead Product in the Territory.

 

4.4.  JCC Meetings .

4.4.1.  The JCC shall have its initial meeting within sixty (60) days after the Effective Date.  Thereafter, the JCC shall meet as frequently as required, but in no event less than once every three calendar months.

4.4.2.  The JCC meetings may be conducted by telephone, videoconference or in person as determined by the Co-Chairs; provided that, at least once every six (6) months, a meeting shall be held in person.  All in-person JCC meetings shall be held on an alternating basis between Novelos’ head office in Massachusetts and the office of Collaborator’s Affiliate in Cambridge, United Kingdom.  Each Party shall be responsible for its own expenses relating to such meetings.  As appropriate, other employee representatives or agents of the Parties may attend JCC meetings as non-voting observers and/or presenters.  Each Party may also call for special meetings of the JCC to resolve particular matters requested by such Party that are within the areas of responsibility of the JCC.  Each Co-Chair shall provide its Party’s representatives with no less than fifteen (15) business days’ notice of each regularly scheduled meeting, and no less than ten (10) business days’ notice of any special meetings called by either Party.  The initial meeting shall take place at Novelos’ head office in Massachusetts.

 

 

4.5.  Decision Making .

4.5.1.  Subject to Section 4.5.2, (i) all decisions with respect to matters relating to the Licensed Products outside the Territory shall be made solely by Novelos and Affiliates, with such decisions to be made in a fair and reasonable manner and in conformity with this Agreement, including without limitation Section 4.3.3, and (ii) all decisions with respect to matters relating to the Licensed Products within the Territory shall be made solely by Collaborator and its Affiliates, with such decisions to be made in a fair and reasonable manner and in conformity with this Agreement, including without limitation Section 4.3.3.

4.5.2.  In the event that a decision made or proposed to be made by Novelos or its Affiliates or Third Party licensees or Sublicensees with respect to the Licensed Products is reasonably believed by Collaborator to have an actual or potential material adverse effect on a matter relating to the Licensed Products within the Territory, Collaborator will refer the matter to the JCC for good faith discussion and consideration, with the aim of resolving the issue promptly and collaboratively in accordance with the principles of Section 4.3.3.  If the issue cannot be resolved within thirty (30) days of its referral to the JCC, the Parties shall refer the matter to their respective executive officers referred to in Section 15.6.2 to reach consensus in accordance with Section 15.6.3.  In the event that the Parties’ executive officers do not reach consensus with respect to a particular matter after endeavoring in good faith for thirty (30) days to do so, then the mediation and alternative dispute resolution provisions set forth in Sections 15.6.4 and15.6.5 and in Attachment 9 shall apply.

 

4.6.  Pre-Clinical, CMC Development and Manufacturing Development.

4.6.1.  On the Effective Date, the Parties anticipate that each of: (i) the CMC work program set out in Attachment 6 , (ii) the pre-clinical work program set out in Attachment 7 , and (iii) the manufacturing development work program set out in Attachment 8 , will be required by the EMEA in respect of the Lead Product in the Territory.  Furthermore, Novelos anticipates that the work programs set out in Attachments 6, 7 and 8 are substantially the same as those that will be required by the FDA in respect CMC development, pre-clinical development and manufacturing of the Lead Product for the USA, although the FDA may elect to waive one or more of the activities or guidelines set out in Attachments 6, 7 or 8 .  The Parties accordingly agree to work collaboratively to the fullest extent possible with the aim of expediting development of the Lead Product in the Territory and eliminating any potential duplication of effort in performing the work programs set out in Attachments 6, 7 and 8 in accordance with the following provisions:

 

4.7.  Clinical Development .   Each Party shall use Commercially Reasonable Efforts to undertake its respective clinical development activities set forth below, all of which shall be conducted in accordance with GLP and GCP as applicable:

4.7.1.  Collaborator shall be responsible for carrying out the Collaborator Trials at its cost in the Territory.  However, in the unlikely event that the EMEA requires the Collaborator to conduct an additional clinical trial for the Lead Product in first-line advanced stage NSCLC in order to obtain Regulatory Approval for that indication in the European Union (the “European Registration Trial”), then the Collaborator shall be entitled, in its sole discretion, either (i) to convert the Label Expansion Trial into the European Registration Trial, subject to sub-paragraphs (a) and (c) below, or (ii) to commence a new Phase III clinical trial for the Lead Product in first-line advanced stage NSCLC as the European Registration Trial, subject to sub-paragraphs (b) and (c) below:

4.7.2.  Novelos shall conduct and complete the Novelos Trials as soon as practicable at its cost, as well as any other FDA clinical requirements.  Novelos shall forward the final study report for each Novelos Trial to Collaborator within three (3) months after completion of each such trial in accordance with the applicable protocol.

4.7.3.  Novelos shall provide Collaborator with a copy of the full NDA in CTD format for the Lead Product for the indication of NSCLC (first-line advanced stage) at least five (5) business days prior to its submission to the FDA.

4.7.4.  The Parties may discuss and decide whether or not to conduct additional joint clinical trials of any of the Licensed Products from time to time, which, if agreed by the Parties, shall be carried out in accordance with a joint clinical development plan to be agreed in writing by the Parties and which shall identify the Parties’ responsibilities with respect to the administration and funding of the agreed joint clinical trials.

4.7.5.  In addition, each Party may decide, in its sole discretion, to conduct and fund further development work, including toxicology, formulation and pharmaceutical development, pharmacoeconomic analyses, market research, non-clinical studies and/or clinical trial(s) of the Licensed Products in its respective territory without any financial contribution or involvement of the other Party (an “Independent Trial”) and with no right of access to the data or intellectual property resulting therefrom by the non-contributing Party unless it pays fifty percent (50%) of the cost of generating such data or intellectual property, respectively, in accordance with the procedure set forth in Section 4.8.5.

4.7.6.  Novelos shall provide clinical trial supplies to Collaborator, if so requested, at the cost charged to Novelos by its contract manufacturers.

 

4.8.  Data Sharing .

4.8.1.  All data generated by or on behalf of Novelos shall be the property of Novelos; all data generated by or on behalf of Collaborator or its Affiliates or Sublicensees shall be the property of Collaborator.  All data generated by or on behalf of the Parties jointly in accordance with Section 4.7.4 above shall be the joint property of the Parties in proportion to their respective financial contributions to the generation of such data.

4.8.2.  On the Effective Date, Novelos shall deliver, or will have previously delivered, to Collaborator all Novelos Know-How in existence on such date.  In addition, Novelos shall provide free of charge to Collaborator all results and data generated from time to time in the Novelos Trials on a timely basis, including a copy of the final study report issued in each Novelos Trial within fifteen (15) days of such report’s completion.

 

4.8.3.  All data generated by or on behalf of Collaborator at its cost, including without limitation any data arising from the Label Expansion Trial (if not converted to the European Registration Trial pursuant to Section 4.7.1 and the costs thereof recovered from Novelos pursuant to Section 4.7.1(a)), pre-clinical, CMC, clinical and/or manufacturing development work not required by the FDA but conducted by or on behalf of Collaborator pursuant to Section 4.6.1(b), shall only be made available to Novelos upon Collaborator’s receipt of a cash payment equal to fifty percent (50%) of the documented out-of-pocket development costs incurred by Collaborator in generating such data.

4.8.4.  Collaborator shall provide free of charge to Novelos all data generated from time to time in the European Registration Trial, on the basis that Collaborator’s costs of conducting such trial are to be recovered in full from Novelos from a reduction in Royalties, super-royalties and milestones in accordance with the mechanism set forth in Section 4.7.1(a) and (b).

4.8.5.  The Independent Data generated from time to time in any Independent Trials conducted and funded by a Party (the “Sponsoring Party”), including final study reports issued in such Independent Trials, shall be owned by the Sponsoring Party and shall not be provided to the other Party (the “Non-Sponsoring Party”) unless such Non-Sponsoring Party makes a cash payment equal to fifty percent (50%) of the documented out-of-po