EXHIBIT 10.16 (REDACTED)
CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND
EXCHANGE COMMISSION ([* * *] Denotes
Omission)
LICENSE
AGREEMENT
This License Agreement (“
Agreement ”), dated as of December 21, 2004, is
entered into by and between IMMUCELL CORPORATION, a corporation
organized under the laws of the State of Delaware and having its
principal place of business at 56 Evergreen Drive, Portland, Maine
04103 (“ IMMUCELL ”), and PFIZER INC., a
corporation organized under the laws of the State of Delaware and
operating through its Pfizer Animal Health Division with a
principal place of business at 235 East 42 nd Street, New York, New York, 10017
(“ PFIZER ”).
WHEREAS, IMMUCELL owns or controls,
or may acquire rights to, certain patents, patent applications,
technology, know-how, trade secrets and scientific and technical
information relating to nisin-based animal health products,
including an intra-mammary pharmaceutical for treatment of bovine
mastitis in lactating cows, and desires to engage a global
development and marketing partner to further develop and
commercialize said pharmaceutical in such field;
WHEREAS, PFIZER has extensive
experience and expertise in the development and commercialization
of animal health pharmaceuticals and desires to acquire exclusive
licenses in the Territory (as defined below) to certain patents,
patent applications, technology, know-how, trade secrets and
scientific and technical information owned, controlled or to be
acquired by IMMUCELL for PFIZER’s further development and
commercialization of said pharmaceutical for use in the designated
field; and
WHEREAS, IMMUCELL desires to grant
such exclusive licenses to PFIZER, all upon the terms and
conditions set forth herein.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and in consideration of the mutual covenants
and agreements provided herein, and intending to become legally
bound, IMMUCELL and PFIZER hereby agree as follows:
For purposes of this Agreement, the
following definitions shall be applicable:
1.1 “ Affiliate ”
means any entity directly or indirectly controlled by, controlling,
or under common control with, a party to this Agreement, but only
for so long as such control shall continue. For purposes of this
definition, “control” (including, with correlative
meanings, “controlled by”, “controlling”
and “under common control with”) means possession,
direct or indirect, of (a) the power (shared or otherwise) to
direct or cause direction of the management and policies of an
entity (whether through ownership of securities or partnership or
other
[* * *] Confidential Treatment Requested. The
confidential portions have been filed separately with the
Securities & Exchange Commission.
ownership interests, by contract or otherwise),
or (b) at least 50% of the voting securities (whether directly or
pursuant to any option, warrant or other similar arrangement) or
other comparable equity interests.
1.2 “ Business Day
” means a day other than a Saturday, Sunday, bank or other
public holiday in New York, New York.
1.3 “ Clinical Study
” means a clinical study or studies addressing, without
limitation, sub-clinical and clinical mastitis, with study design
and statistical power intended to meet the requirements for
approval of an NADA for the Licensed Product, including, without
limitation those studies specified in Exhibit A attached
hereto.
1.4 “ Competing Product
” means any nisin-based intra-mammary product for treatment
of bovine mastitis in lactating cows, other than the Licensed
Product.
1.5 “ Confidentiality
Agreements ” mean those certain Mutual Confidentiality
Agreements between IMMUCELL and Pfizer Limited, dated January 8,
2004, as thereafter amended, and August 17, 2001.
1.6 “ Contract
Manufacturer ” means any third party manufacturer
approved or designated by PFIZER, and identified to IMMUCELL by
written notice, to fill plastets with Raw Material for purposes of
conducting PFIZER’s clinical development plan, and/or to
manufacture Licensed Product designed for commercial distribution
or any other purpose permitted under the terms of this
Agreement.
1.7 “ CVM ” means
the United States Center for Veterinary Medicine and any successor
agency thereto.
1.8 “ Drug Product
” means Raw Material further manufactured to finished,
sterile intra-mammary unit dose (“plastet”) generally
known as MastOut ® . For purposes of clarification only, “
Active Drug Product ” shall mean Drug Product with Raw
Material, and “ Placebo Drug Product ” shall
mean Drug Product without Raw Material.
1.9 “ Effective Date
” means the date that this Agreement has been fully executed
by IMMUCELL and PFIZER.
1.10 “ EMEA ”
means the European Medicines Agency and any successor agency
thereto.
1.11 “ European Patent
Convention Countries ” means countries under the European
Patent Convention, which includes, for example, the United Kingdom,
Spain, Italy, France, The Netherlands, Ireland, Sweden and
Germany.
1.12 “ European Union
” means Member States as of the Effective Date consisting of
Austria, Belgium, Cyprus, Czech Republic, Denmark, Finland,
Estonia, France, Germany, Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal,
Slovakia, Slovenia, Spain, Sweden, and the United Kingdom, as well
as any
country within the Territory which by execution
of an accession treaty becomes a Member State during the
Term.
1.13 “ Field ”
means the use of nisin-based intra-mammary agents in the treatment
of clinical and sub-clinical bovine mastitis in lactating
cows.
1.14 “ Governmental
Authority ” means any court, agency, department,
authority or other instrumentality of any foreign, federal, state,
county, city or other political subdivision.
1.15 “ IMMUCELL
Confidential Information ” means all information about
any element of IMMUCELL Technology, as well as any other
information regarding the business or operations of IMMUCELL, that
(A) is disclosed by IMMUCELL to PFIZER or its Affiliates during the
Term of this Agreement and, if in written form, designated
“confidential” by IMMUCELL at the time of disclosure
or, if in oral form, memorialized in writing as
“confidential” and delivered to PFIZER within thirty
(30) days after disclosure, or (B) was deemed confidential and
supplied by IMMUCELL to PFIZER prior to the Term of this Agreement
under the Confidentiality Agreements (and, to the extent such prior
disclosure was made after November 1, 2004, is memorialized in
writing as confidential within 60 days after the Effective Date),
except to the extent that PFIZER can show that such information (i)
as of the date of disclosure to PFIZER, was already lawfully in
PFIZER’s possession free from any obligation to keep it
confidential at the time of receipt from the other party; or (ii)
was or is, now or in the future, public knowledge through no act or
omission of PFIZER or its officers, employees, agents,
subcontractors, sublicensees, distributors or Affiliates; or (iii)
was lawfully obtained by PFIZER from a third party having the right
to disclose it free from any obligation of confidentiality; or (iv)
was independently developed by or for PFIZER without violating the
terms of this Agreement or the Confidentiality Agreements; or (v)
is, in the reasonable opinion of legal counsel, required to be
disclosed under Law; provided that, in the case of (v),
PFIZER (x) provides IMMUCELL sufficient prior notice (to the extent
practicable) of such disclosure and agrees to cooperate, at the
request and sole expense of IMMUCELL with IMMUCELL’s efforts
to preserve the confidentiality of such information and (y)
complies with Section 7.1(b) hereof.
1.16 “ IMMUCELL
Improvements ” shall have the meaning set forth in
Section 6.3 hereof.
1.17 “ IMMUCELL Patent
Rights ” means all Patent Rights within IMMUCELL
Technology, including the Patent Rights listed in Exhibit B
attached hereto.
1.18 “ IMMUCELL
Technology ” means Technology that is or was:
(a) developed by employees of or
consultants to IMMUCELL alone or jointly with third parties
including, without limitation, IMMUCELL Improvements; or
(b) acquired by purchase, license,
assignment or other means from third parties by
IMMUCELL.
1.19 “ Launch ”
means the first shipment of the Licensed Product for commercial
sale by or for PFIZER, its Affiliates or its sublicensees to an
unaffiliated third party after receipt by PFIZER of the first
Registration for the Licensed Product.
1.20 “ Law ” or
“ Laws ” means all laws, statutes, rules,
regulations, orders, judgments and/or ordinances of any
Governmental Authority.
1.21 “ Licensed Product
” means the animal health pharmaceutical MastOut
®
or any other animal health
pharmaceutical, the manufacture, use, sale, offer for sale or
importation of which, in the absence of a license, would infringe
any of the IMMUCELL Patent Rights or utilizes any IMMUCELL
Technology.
1.22 “ Major EU Markets
” means the United Kingdom, France, Germany Spain, Italy and
The Netherlands.
1.23 “ Marketing
Authorization Application ” means the equivalent of an
NADA, submitted under the EMEA or any comparable application
required by a Governmental Authority in any country in the
Territory.
1.24 “ NADA ”
means a New Animal Drug Application submitted under the CVM or any
comparable application required by a Governmental Authority in any
other country in the Territory.
1.25 “ Net Sales
” means, subject at all times to Sections 5.1 and
5.2 , gross sales of PFIZER, its Affiliates and sublicensees
or distributors of Licensed Product to third parties, less bad
debts related to the Licensed Product (with any subsequent
adjustments for bad debts being appropriately credited to or
accrued against Net Sales for the period in which the adjustment
occurs), normal and customary trade discounts actually allowed or
accrued, credits or allowances for rejected or returned Licensed
Product previously sold, taxes the legal incidence of which falls
on the purchaser and is separately shown on the seller’s
invoices and transportation, insurance and postage charges, if
prepaid by PFIZER, any of its Affiliates or any sublicensee of
PFIZER and billed on the seller’s invoices as a separate
item, and compulsory payments and rebates, accrued, paid or
deducted pursuant to governmental regulations or agreements (other
than employment agreements or agreements with Affiliates) with
third parties (provided such agreements with third parties are
identified and made available to IMMUCELL for review and deductions
relating to such agreements are identified separately in any
statements pursuant to Section 5.3 ). Net Sales shall be
determined from books and records maintained by PFIZER, its
Affiliates and sublicensees in accordance with generally acceptable
accounting principles in the United States, consistently
applied.
1.26 [* * *]
1.27 [* * *]
1.28 “ Nutrition 21
” means Nutrition 21, Inc., a New York corporation (formerly
known as AMBI Inc.).
[* * *] Confidential Treatment Requested. The
confidential portions have been filed separately with the
Securities & Exchange Commission.
1.29 “ Nutrition 21
Agreements ” shall have the meaning set forth in
Section 11.1 hereof.
1.30 “ Patent Rights
” means all the patents and patent applications issuing as
patents relating to PFIZER Technology or IMMUCELL Technology,
including all continuations, continuations-in-part, divisionals,
provisionals and renewals, and letters of patent granted with
respect to any of the foregoing, patents of addition, supplementary
protection certificates, registration or confirmation patents and
all reissues, re-examinations and extensions thereof. Patent Rights
shall also include any patent restoration or extension period
granted by a Governmental Authority, including but not limited to
the compensation for patent term lost during the clinical trial or
regulatory approval process.
1.31 “ PFIZER Confidential
Information ” means all information about any element of
PFIZER Technology, as well as any other information regarding the
business or operations of PFIZER, that (A) is disclosed by PFIZER
to IMMUCELL or its Affiliates during the Term of this Agreement
and, if in written form, designated “Confidential” in
writing by PFIZER at the time of disclosure or, if in oral form,
memorialized in writing as “confidential” and delivered
to IMMUCELL within thirty (30) days after disclosure, and (B) was
deemed confidential and supplied by PFIZER to IMMUCELL prior to the
Term of this Agreement under the Confidentiality Agreements (and,
to the extent such disclosure was made orally after November 1,
2004, is memorialized in writing as confidential within 60 days
after the Effective Date), except to the extent that IMMUCELL can
show that such information (i) as of the date of disclosure to
IMMUCELL, was already lawfully in IMMUCELL’s possession free
from any obligation to keep it confidential at the time of receipt
from the other party; or (ii) was or is, now or in the future,
public knowledge through no act or omission of IMMUCELL or its
officers, employees, agents, subcontractors, sublicensees,
distributors or Affiliates; or (iii) was lawfully obtained by
IMMUCELL from a third party having the right to disclose it free
from any obligation of confidentiality; or (iv) was independently
developed by or for IMMUCELL without violating the terms of this
Agreement or the Confidentiality Agreements; or (v) in the
reasonable opinion of legal counsel, is required to be disclosed
under Law; provided that, in the case of (v), IMMUCELL
provides PFIZER at least three Business Days’ prior notice
(to the extent practicable) of such disclosure and agrees to
cooperate with PFIZER’s efforts to preserve the
confidentiality of such information and (y) complies with
Section 7.1(b) hereof.
1.32 “ PFIZER Quarter
” means each of the four (4) thirteen (13) week periods (i)
with respect to the United States, commencing on January 1 of any
year, and (ii) with respect to any country in the Territory other
than the United States, commencing on December 1 of any
year.
1.33 “ PFIZER Patent
Rights ” means all Patent Rights within PFIZER
Technology.
1.34 “ PFIZER
Technology ” means Technology that is or was:
(a) developed by employees of or
consultants to PFIZER alone or jointly with third parties;
or
(b) acquired by purchase, license,
assignment or other means from third parties by PFIZER, except that
Technology acquired under this Agreement shall constitute Pfizer
Technology only to the extent expressly provided herein.
1.35 “ Raw Material
” means pharmaceutical-grade nisin.
1.36 “ Registrations
” means the marketing authorizations or approvals issued by
the competent Governmental Authority of any country in the
Territory, including without limitation, the CVM and the
EMEA.
1.37 “ Technology
” means and includes all materials, technology, data,
technical and scientific information, intellectual property,
know-how, expertise and trade secrets that relate to or are used in
connection with the manufacture of Raw Material for use in the
intra-mammary treatment of bovine mastitis.
1.38 “ Territory
” means the entire world.
1.39 “ Trademark
” means the MastOut ® trademark, tradename and related rights with
respect to the Licensed Product.
1.40 “ Valid Claim
” means any claim from an issued and unexpired patent
included within the IMMUCELL Patent Rights or PFIZER Patent Rights
which has not been revoked or held unenforceable or invalid by a
final, nonappealable decision of a court or other Governmental
Authority of competent jurisdiction or unappealed within the time
allowable for appeal, and which has not been admitted to be invalid
or unenforceable by IMMUCELL (as to IMMUCELL Patent Rights) or
PFIZER (as to PFIZER Patent Rights), through reissue, disclaimer or
otherwise.
|
Section 2.
|
LICENSE
AND ADDITIONAL RIGHTS.
|
2.1 Exclusive License and Right
to Sublicense .
(a) Subject to the terms of this
Agreement including, without limitation, Section 2.1(b)
hereof, IMMUCELL hereby grants to PFIZER, and PFIZER hereby
accepts: (i) an exclusive sublicense under the IMMUCELL Patent
Rights to the patents set forth in Exhibit B which are
listed as “Licensed from Nutrition 21”, including the
right to sublicense, under the said IMMUCELL Patent Rights to
develop, make, have made, use, sell, offer for sale and import
Licensed Product in the Field in the Territory, (ii) an exclusive
license under the IMMUCELL Patent Rights to the patents and patent
applications (and any patents issuing therefrom) set forth in
Exhibit B which are listed as “Patents and
Applications Filed by IMMUCELL”, including the right to
sublicense, to use IMMUCELL Technology and IMMUCELL Confidential
Information for the purpose of the development, manufacture, use,
sale, offer for sale and importation of Licensed Product in the
Field in the Territory, (iii) an exclusive license to IMMUCELL
Technology which does not encompass the IMMUCELL Patent Rights set
forth in Section 2.1(a)(i) and (ii), to develop,
make, have made, use, sell, offer for sale and import Licensed
Product in the Field in the Territory, including the right to
sublicense, and (iv)
(b) an exclusive license, including
the right to sublicense, to use and register the Trademark
(collectively, the “ License ”). Any and all
rights to sublicense the License granted hereunder shall be subject
to the terms and conditions of this Agreement.
(c) PFIZER may sublicense any of its
rights under Section 2.1(a)(i) of this Agreement to a third
party (including a sublicense of manufacturing rights to a Contract
Manufacturer), and make disclosures of IMMUCELL Confidential
Information to such third party, only if (i) such third party is a
Qualified Person (as defined below) and agrees to comply with the
terms of this Agreement (including without limitation the
confidentiality provisions hereof) and (ii) PFIZER gives notice of
such third party to IMMUCELL at least three Business Days before
entering into an agreement with any such third party. PFIZER agrees
to provide a copy of each such third party agreement to IMMUCELL,
PFIZER having the right to redact financial information from such
copies. For purposes of this paragraph, a “Qualified
Person” is a person or entity that is not otherwise involved
in the manufacture of any Nisin Preparations, as defined
hereinbelow (other than manufacture for delivery to, or for the
benefit of, A&B, Nutrition 21, IMMUCELL, or their respective
affiliates); “Nisin Preparations” means all products
containing a measurable concentration of any form, variant, or
derivative of nisin for incorporation into food additives for food
preservation, food preservatives and food preservation methods or
for human health products; and “A&B” means Aplin
& Barrett, Limited, the company with whom Nutrition 21 entered
into a License Agreement dated as of December 12, 1996.
2.2 Term of License Grant .
Unless terminated earlier pursuant to Section 10 , the
License in each country shall commence on the Effective Date, and
shall terminate, on a country-by-country basis on the latest date
on which the Licensed Product is covered by a Valid Claim under the
IMMUCELL Patent Rights in that country, or ten (10) years from the
Launch of the Licensed Product in such country, whichever is later
(the “ Initial Term” ); provided ,
however , that any time prior to termination of the Initial
Term the parties may jointly agree in writing to extend the Initial
Term for an additional three (3) year period, and thereafter may at
any time jointly agree in writing to extend any such renewal
term(s) for successive three-year periods (each, a “
Renewal Term ” and collectively with the Initial Term,
the “ Term ”).
2.3 Additional Rights Outside the
Field; Exclusivity .
(a) IMMUCELL shall be entitled to
manufacture or have manufactured non-pharmaceutical grade nisin for
applications outside the Field, subject at all times to the terms,
conditions and restrictions contained in this Agreement.
(b) IMMUCELL agrees not to
manufacture or have manufactured, directly or indirectly, Raw
Material for applications outside the Field unless IMMUCELL first
offers PFIZER an opportunity in writing to manufacture or supply,
directly or indirectly, such Raw Material on substantially
equivalent terms. PFIZER shall have sixty (60) days from receipt of
such offer to communicate, in writing, its acceptance or rejection
thereof. In the event PFIZER communicates its acceptance, the
parties shall in good faith promptly negotiate and enter into a
separate agreement setting forth the terms and conditions
for
such manufacture or supply. In the
event PFIZER does not accept the offer within the stated 60-day
period, or if the parties for any reason fail to reach agreement on
terms within ninety (90) days after PFIZER’s written
acceptance of the offer, IMMUCELL shall be permitted to manufacture
or have manufactured, directly or indirectly, Raw Material solely
for applications outside the Field, subject at all times to the
terms, conditions and restrictions contained in this
Agreement.
(c) In respect of IMMUCELL
Technology, but subject to Section 2.4 below, IMMUCELL
retains all rights, including the right to sublicense, to develop,
make, have made, use, sell, offer for sale and import products
outside the Field, including without limitation nisin-based
products for treatment of mastitis in non-lactating
cows.
2.4 Additional Products . In
the event that IMMUCELL should develop, acquire rights to or
obtain, directly or indirectly, any other intra-mammary nisin-based
animal health product during the Term of this Agreement, IMMUCELL
agrees that PFIZER shall have the option to acquire exclusive
distribution rights to such products, with distribution terms to be
set forth in a separate agreement, negotiated promptly and in good
faith; provided , however , that negotiations for
such rights shall be limited in time to six (6) months after
written notice to PFIZER by IMMUCELL of its development of,
acquisition of rights to or obtaining such products. Any such
notice shall include, at a minimum, a reasonably detailed
description of technical and scientific information, ownership
rights, clinical data and fields of application.
|
Section 3.
|
CLINICAL
DEVELOPMENT AND COMMERCIALIZATION .
|
3.1 Clinical Development
Plan. After the Effective Date, PFIZER shall have the exclusive
right to, and responsibility for, preparing and implementing a
clinical development plan, including the Clinical Studies as set
forth in Exhibit A , for developing the Licensed Product and
obtaining the Registrations. All decisions with respect to the
creation, modification and implementation of such development plans
shall be made by PFIZER in its sole discretion. PFIZER shall be
solely responsible for conducting all Clinical Studies and for
costs related thereto.
3.2 Joint Steering Committee
. The parties shall establish a joint steering committee (the
“ Joint Steering Committee ”) for the sole
purpose of monitoring progress of PFIZER’s clinical
development plan for the Licensed Product. The Joint Steering
Committee shall consist of four (4) persons (or such greater number
as the parties agree), with an equal number of representatives of
PFIZER and IMMUCELL, and shall meet at least quarterly, or with
such other frequency as the parties shall mutually agree, during
the period commencing immediately after the Effective Date and
ending on the Launch of the Licensed Product (the “
Initial Period’ ) and as mutually agreed-upon
thereafter, either in person at a location to be designated by
PFIZER, or by videoconference or teleconference.
3.3 Clinical Supply
.
(a) IMMUCELL shall use commercially
reasonable efforts to make available to PFIZER by March 31, 2005,
but in no event later than December 31, 2005, [* * *]
[* * *] Confidential Treatment Requested. The
confidential portions have been filed separately with the
Securities & Exchange Commission.
finished plastets of Active Drug
Product and [* * *] finishe[d] plastets of Placebo Drug Product for
purposes of PFIZER conducting the US Clinical Study trials
(collectively, “ Clinical Supply ”), it being
understood that IMMUCELL’s failure to deliver Clinical Supply
prior to December 31, 2005 shall not, in and of itself, be deemed
to constitute a breach of this Agreement. Such Clinical Supply
shall be of a suitable specification to allow: (i) registerable
efficacy trials to be initiated by PFIZER and (ii) registerable
VICH stability Drug Product studies to be initiated by IMMUCELL.
After delivery of the Clinical Supply, IMMUCELL shall make best
efforts to furnish (subject to reimbursement by PFIZER at
IMMUCELL’s cost, with no markup permitted) such additional
Drug Product plastets and/or Raw Material as PFIZER may reasonably
request in writing for purposes of those US Clinical Study trials.
IMMUCELL shall bear the cost of all Raw Material contained within
the Clinical Supply, and PFIZER shall pay IMMUCELL for the cost of
manufacture of the Clinical Supply plastets and any such additional
Drug Product plastets and/or Raw Material requested by PFIZER, each
within 30 days from receipt of IMMUCELL’s invoice therefor.
Exhibit A attached hereto shall contain mutually agreed
quality requirements for the Clinical Supply.
(b) PFIZER shall have sole
responsibility for approving the Contract Manufacturer to create
Clinical Supply from the Raw Material, and PFIZER hereby consents
to the selection of [* * *] as the Contract Manufacturer for such
purpose.
(c) IMMUCELL shall be solely
responsible for the characterization of minor nisin
variants/impurities, validation of all required analytical methods
agreed to by the parties and transfer of such methods to PFIZER or
the Contract Manufacturer, and for IMMUCELL’s costs related
to these studies. IMMUCELL shall provide access to PFIZER personnel
as necessary for training as part of the transfer process. IMMUCELL
shall be solely responsible for conducting stability studies on
Clinical Supply “Drug Product” subject to CVM guideline
73. PFIZER shall ensure that IMMUCELL receives [* * *] finished
plastets for this purpose from the initial Clinical
Supply.
3.4 Regulatory Matters; Product
Attributes .
(a) Subject to its rights to
terminate this Agreement, PFIZER agrees to use commercially
reasonable efforts to obtain registration of the Licensed Product,
at least in the United States and Major EU Markets, within the time
frames contemplated by this Agreement. PFIZER shall be responsible
for the preparation, submission and prosecution of regulatory
dossiers, including the NADA, the Marketing Authorization
Application and their equivalents, of Licensed Product to
Governmental Authorities in all markets in the Territory; all such
filings shall be at PFIZER’s sole discretion. To assist
PFIZER in its regulatory activities, IMMUCELL shall provide
technical support and grant PFIZER access to existing data,
including without limitation, IMMUCELL Technology.
(b) IMMUCELL shall use commercially
reasonable efforts to prepare and deliver to PFIZER the
documentation for the CMC section of the regulatory dossier by no
later than [* * *], but the dossier shall be drafted and submitted
to the CVM by PFIZER.
[* * *] Confidential Treatment Requested. The
confidential portions have been filed separately with the
Securities & Exchange Commission.
(c) All NADA’s, Marketing
Authorization Applications and their equivalents in other
Territories, shall be owned and maintained by PFIZER, subject to
Section 10.4 below.
(d) PFIZER shall have sole
responsibility for determining the attributes of the Licensed
Products and achievable claims related thereto.
(e) PFIZER shall be responsible, at
its sole cost and discretion, for pursuing additional claims
related to the Licensed Product. Any studies that are required for
enhancements to the Licensed Product shall be monitored by the
Joint Steering Committee.
3.5 Manufacturing and
Marketing .
(a) PFIZER shall have sole
responsibility for approving the Contract Manufacturer (including
itself) to create Raw Material and/or Licensed Product. PFIZER
agrees to consider an assignment by IMMUCELL of that certain
Contract Manufacture Agreement between IMMUCELL and [* * *] in
draft form dated March 19, 2003 (the “[* * *]
Agreement ”), taking into account PFIZER’s
supply and quality requirements, but reserves the right to
condition any such assignment and assumption by PFIZER on [* * *]
making such amendments to the [* * *] Agreement as may be requested
by PFIZER in its sole discretion with prior notice to IMMUCELL.
IMMUCELL agrees to cooperate with PFIZER in furtherance of any such
negotiations. In the event PFIZER or [* * *] declines any such
assignment or assumption for any reason, and provided that PFIZER
does not in connection therewith enter into any similar replacement
agreement with [* * *] IMMUCELL shall bear any costs of terminating
the [* * *] Agreement.
(b) Subject to its rights to
terminate this Agreement, PFIZER agrees to use commercially
reasonable efforts to commercialize the Licensed Product, in at
least the United States and Major EU Markets, within the time
frames contemplated by this Agreement. Upon its receipt of notice
from PFIZER identifying the commercial manufacturer (being either
PFIZER or its designated Contract Manufacturer), IMMUCELL shall aid
in the transfer of the manufacturing process for Raw Material and
Licensed Product to such commercial manufacturer in accordance with
the specifications set forth in Exhibit C attached
hereto.
(c) No later than six (6) months
after establishing the commercial manufacture operations in
accordance with sub-section (a) above, PFIZER or its designated
Contract Manufacturer shall supply up to a maximum of [* * *] of
Raw Material to IMMUCELL per calendar year during the Term, free of
charge, for the sole purpose of IMMUCELL’s
investigations.
(d) PFIZER shall be solely
responsible for all aspects of distribution, sales and marketing of
the Licensed Product, and all related expenses. IMMUCELL’s
name shall appear on product packaging as co-inventor/developer, in
a format reasonably acceptable to IMMUCELL.
[* * *] Confidential Treatment Requested. The
confidential portions have been filed separately with the
Securities & Exchange Commission.
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Section 4.
|
FEES AND
ROYALTIES.
|
4.1 Fees . In consideration
of the rights granted hereunder, and subject to the terms and
conditions of this Agreement, PFIZER shall pay to IMMUCELL the
following license fees:
(a) One Million Five Hundred
Thousand Dollars (US$1,500,000) payable on the Effective Date by
wire transfer according to instructions provided in writing by
IMMUCELL;
(b) $[* * *] payable 18 months after
the Effective Date or, if earlier, within forty-two (42) days of
IMMUCELL’s invoice issuable to PFIZER after the successful
transfer by IMMUCELL to PFIZER or its designated Contract
Manufacturer of a commercially viable manufacturing process for Raw
Material; provided , however , that the criteria for
successful transfer shall be at PFIZER’s sole
decision;
(c) $[* * *] payable within
forty-two (42) days of completion of the Clinical Study in the
United States; provided , however , that if PFIZER
during such 42-day period gives notice of termination pursuant to
Section 10.2(c) of this Agreement, then such amount shall
not be deemed to have become payable;
(d) $[* * *] payable within
forty-two (42) days of acceptance by the CVM of PFIZER’s NADA
submission for the Licensed Product in the United States;
provided , however , that if PFIZER during such
42-day period gives notice of termination pursuant to Section
10.2(c) of this Agreement, then such amount shall not be deemed
to have become payable;
(e) $[* * *] payable within
forty-two (42) days of the date of first acceptance by the EMEA of
PFIZER’s Marketing Authorization Application for the Licensed
Product in Europe; provided , however , that if
PFIZER during such 42-day period gives notice of termination
pursuant to Section 10.2(c) of this Agreement, then such
amount shall not be deemed to have become payable;
(f) $[* * *] payable within
forty-two (42) days of IMMUCELL’s invoice issuable to PFIZER
after the last to file of either (i) a European National Phase
Application of International Patent Application No. PCT/US03/31986
(entitled “Method of Purifying Lantibiotics”) in one of
the E uropean Patent Convention Countries , or (ii) a new
United States patent application which claims a Nisin A Composition
intended for use as a pharmaceutical preparation for intra-mammary
infusion; and
(g) $[* * *] payable within
forty-two (42) days of IMMUCELL’s invoice issuable to PFIZER
following the issuance of a patent maturing from the European
National Phase Application referred to in Section 4.1(f)(i), with
claims directed toward a method for purifying nisin.
PFIZER agrees to give IMMUCELL prompt notice of
any approval or other event giving rise to payment obligations
under subsections (c), (d), or (e) above, and IMMUCELL shall
then
[* * *] Confidential Treatment Requested. The
confidential portions have been filed separately with the
Securities & Exchange Commission.
promptly issue Pfizer an invoice for the
relevant payment. Except as expressly stated in this Section
4.1 , no payments shall be due or owing in respect of any other
approvals of any Governmental Authority sought and/or obtained by
PFIZER or IMMUCELL in any other countries within the
Territory.
4.2 Payments for Certain Filing
Delays .
(a) In addition to the payments
under Section 4.1 , and subject to the terms and conditions
of this Agreement including, without limitation, the provisos set
forth in sub-section (b) hereinbelow, in the event PFIZER fails to
file the complete administrative NADA with the CVM by [* * *], then
PFIZER shall pay to IMMUCELL the following amounts by the following
dates until such time as such filing is made:
(i) $[* * *] for each calendar
quarter ending [* * *], payable within forty-two (42) days after
the end of each such quarter;
(ii) $[* * *] for each calendar
quarter ending [* * *], payable within forty-two (42) days after
the end of each such quarter;
(iii) $[* * *] for each calendar
quarter ending September [* * *], payable within forty-two (42)
days after the end of each such quarter; and
(iv) $[* * *] for each calendar
quarter after the calendar quarter ending [* * *], payable within
forty-two (42) days after the end of each such quarter.
(b) The timing of all of the
payments specified in sub-section (a) above are expressly
conditioned upon IMMUCELL:
(i) providing PFIZER with Clinical
Supply in accordance with Section 3.3(a) before March 31,
2005 to allow: (A) registerable efficacy trials to be initiated by
PFIZER and (B) registerable VICH stability drug product
studies to be initiated by IMMUCELL;
(ii) preparing and transferring to
PFIZER all CMC documentation in a suitable form, as reasonably
requested by PFIZER, prior to end of 2005; and
(iii) otherwise cooperating with
PFIZER and fulfilling its obligations as specified in the License
Agreement.
(c) If any of the obligations
specified in sub-section (b) above are not met by IMMUCELL for any
reason, the timing of payments specified in sub-section (a) above
shall be adjusted on a month-to-month basis in line with the delays
caused thereby.
[* * *] Confidential Treatment Requested. The
confidential portions have been filed separately with the
Securities & Exchange Commission.
4.3 Royalty Payments . In
addition to the payments under Section 4.1 and Section
4.2 , and subject to the terms and conditions of this
Agreement, PFIZER shall pay to IMMUCELL with respect to the
Licensed Product:
(a) [* * *]% of Net Sales for the
portion of Net Sales of Licensed Product in a calendar year in the
Territory less than or equal to $[* * *]; plus
(b) [* * *]% of Net Sales for the
portion of Net Sales of Licensed Product in a calendar year in the
Territory greater than $[* * *].
4.4 Guaranteed Minimum Royalties
for Designated Territories . Notwithstanding anything contained
in this Agreement to the contrary, so long as this Agreement
remains in effect and following approval of the NADA or Marketing
Authorization Application by the CVM or EMEA, whichever shall first
occur, PFIZER shall be obligated to pay IMMUCELL guaranteed minimum
royalties for the United States and for the European Union (“
Minimum Royalties ”) as set forth in Exhibit D
attached hereto, at all times taking into account the payments made
under Section 4.3 for the United States or European Union,
respectively, it being acknowledged and agreed that Minimum
Royalties shall be due regardless of commercial sales of Licensed
Product.
4.5 Duration of Royalty
Payments . Payments under Section 4.3 on Net Sales in a
given country shall continue until the expiration of the Term in
such country.
4.6 Suspension of Further Payment
Obligations . Notwithstanding the foregoing, upon due
termination by PFIZER of this Agreement for any reason, PFIZER
shall have no further obligation to make any payments specified in
Sections 4.1, 4.2, 4.3 or 4.4 after the effective
date of termination; provided , however , that any
such payments made by PFIZER or otherwise accrued prior to the
effective date of termination (except for those referenced in
Sections 4.1 (c), (d) and (e) as not having become payable )
shall not be refundable.
|
Section 5.
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ACCOUNTING AND PROCEDURES FOR
PAYMENT.
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5.1 Inter-Company Sales .
Sales between or among PFIZER, its Affiliates or sublicensees
(except for sales to end users) shall not be counted toward Net
Sales. PFIZER shall be responsible for payments on Net Sales of its
Affiliates or sublicensees.
5.2 Calculation of Net Sales
. All payments under Section 4 shall be computed and paid in
United States dollars. For the purposes of determining the amount
of royalties due under Section 4.3 for the relevant PFIZER
Quarter, the amount of Net Sales in respect of sales originally
denominated in a foreign currency shall be computed by converting
such foreign currency amount into U.S. dollars at the prevailing
commercial rate of exchange for purchasing dollars with such
foreign currency as published in the Wall Street Journal for
the close of the last Business Day of the PFIZER Quarter for which
the relevant royalty payment is to be made to IMMUCELL.
5.3 Royalty Payments and
Reports . PFIZER shall make royalty payments to IMMUCELL with
respect to each PFIZER Quarter within 90 days after the end of each
such period, and each payment shall be accompanied by a report
identifying the country, Net Sales for each such country for the
relevant PFIZER Quarter, and the amount payable to IMMUCELL, as
well as computation thereof including any applicable offset. In
addition, PFIZER shall use reasonable efforts, based on its current
monitoring procedures used to track other similar
[* * *] Confidential Treatment Requested. The
confidential portions have been filed separately with the
Securities & Exchange Commission.
products, to provide IMMUCELL with sales
estimates on a quarterly basis in regions where such procedures are
commonly used, but shall not be obliged to provide binding
estimates, it being understood that (i) such estimates shall not be
used for calculation of royalties, and (ii) a failure to provide
such estimates shall not be deemed to constitute a breach of this
Agreement. Subject to Section 7.4 , said reports shall be
kept confidential by IMMUCELL and not disclosed to any other party
other than IMMUCELL’s accountants or attorneys, who shall be
obligated to keep such information confidential, and such
information and reports shall only be used for purposes of this
Agreement,.
5.4 Method of Payments . All
payments hereunder shall be made by electronic transfer in
immediately available funds via either a bank wire transfer, an ACH
(automated clearing house) mechanism, or any other means of
electronic funds transfer, at PFIZER’s election, to such bank
account as IMMUCELL shall designate in writing at least five
Business Days before the payment is due. In the event that any
payment due hereunder is not paid when due, such payment obligation
shall bear interest from the date on which the payment was due and
payable, at 7.5% per annum.
5.5 Inspection of Records .
PFIZER shall, and shall cause its Affiliates and sublicensees to,
keep for two (2) years from the date of each payment of royalties
complete and accurate records of gross sales of Licensed Product,
Net Sales of Licensed Product, and amounts payable hereunder to
IMMUCELL for the Licensed Product, all in sufficient detail to
allow the accruing royalties to be determined accurately. IMMUCELL
shall have the right for a period of two years after receiving any
report or statement with respect to royalties due and payable to
appoint at its expense an independent certified public accountant
reasonably acceptable to PFIZER to inspect the relevant records of
PFIZER, and its relevant Affiliates or sublicensees as the case may
be, to verify such report or statement. PFIZER shall make such
records available for inspection by such independent certified
public accountant during regular business hours at such place or
places where such records are customarily kept, upon prior written
notice of at least ten (10) Business Days’ from IMMUCELL, to
verify the accuracy of the reports and payments. Such accountants
may be required by PFIZER to enter into a reasonably acceptable
confidentiality agreement, and in no event shall such accountants
disclose to IMMUCELL any information other than such as relates to
the accuracy of reports and payments made or due hereunder. Such
inspection right shall not be exercised more than once in any
calendar year nor more than once with respect to sales in any given
period. IMMUCELL agrees to hold in strict confidence all
information concerning royalty payments and reports, and all
information learned in the course of any audit or inspection,
except to the extent necessary for IMMUCELL to reveal such
information in order to enforce its rights under this Agreement or
if disclosure is required by law. The failure of IMMUCELL to
request verification of any report or statement during said
two-year period shall be considered final acceptance of the
accuracy of such report, and neither PFIZER nor its Affiliates or
sublicensees shall have any obligation to maintain records
pertaining to such report or statement beyond said two-year period.
The results of each inspection, if any, shall be binding on both
parties unless PFIZER objects, by delivery to IMMUCELL of a written
notice of objections, within thirty (30) days of receipt of a
report of the independent certified public accountant retained by
IMMUCELL. The costs and expenses of the independent certified
public accountant retained by IMMUCELL pursuant to this Section to
review the records of PFIZER or its Affiliates or sublicensees
shall be paid by IMMUCELL; provided , however , that
if the results of any review of such records shall reveal that the
Net Sales
reported for any period covered by such review
shall have been understated by ten percent (10%) or more, PFIZER
shall reimburse IMMUCELL for all such costs and
expenses.
5.6 Tax Matters . It is
understood and agreed by the parties that any payments
