Exhibit 10.2
INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST
FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY
FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION.
AMENDED AND RESTATED
LICENSE AND DEVELOPMENT AGREEMENT
THIS AMENDED AND RESTATED LICENSE AND DEVELOPMENT
AGREEMENT (this
“
Agreement ”),
dated as of July 31, 2007 (the “
Execution Date ”),
is entered into by and between
NovaDel Pharma, Inc. ,
a Delaware corporation (“
NovaDel ”),
and
Hana Biosciences, Inc
. ,
a Delaware corporation (the “
Licensee ”).
NovaDel and Licensee each may be referred to herein individually as
a “
Party ,”
or collectively as the “
Parties .”
WHEREAS, NovaDel
has certain proprietary rights and intellectual property (including
to certain patents) with respect to lingual sprays for the metered
delivery of pharmaceutical products to humans (the “
Technology ”);
and
WHEREAS ,
pursuant to that certain License and Development Agreement by and
between NovaDel and Licensee, effective as of October 26, 2004 (the
“
Effective Date ”),
as amended by that certain Amendment No. 1 To License and
Development Agreement dated August 3, 2005, as amended by that
certain Amendment No. 2 To License and Development Agreement dated
May 15, 2006, and as amended by that certain Amendment No. 3 To
License and Development Agreement dated December 22, 2006,
(collectively, the “
Initial Agreement ”),
Licensee obtained from NovaDel, and NovaDel granted to Licensee, an
exclusive, restricted, sublicensable license to develop
and
commercialize a pharmaceutical product containing ondansetron as an
active ingredient that will be administered only to humans using
the Technology; and
WHEREAS ,
the Parties desire to amend and restate the Initial Agreement in
its entirety upon the terms and conditions as set forth herein in
connection with the PAR Sublicense Agreement.
NOW, THEREFORE,
in
consideration of the foregoing premises, the mutual promises and
covenants of the Parties contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto, intending to be legally
bound, do hereby agree as follows :
ARTICLE 1
DEFINITIONS
For
the purposes of this Agreement, the following words and
phrases shall have the following meanings, unless otherwise
specifically provided herein:
1.1 “
AAA ”
shall have the meaning set forth in Section 9.1.
1.2 “
Affiliate ”
shall mean, with respect to any Entity, any other Entity that
directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such
Entity. For purposes of this Section 1.2 only,
“control” and, with correlative meanings, the terms
“controlled by” and “under common control
with” shall mean (a) the possession, directly or indirectly,
of the power to direct the management or policies of an Entity,
whether through the ownership of voting securities, by contract or
otherwise, or (b) the ownership, directly or indirectly, of at
least fifty percent (50%) of the voting securities or other
ownership interest of an Entity.
1.3 “
Agreement ”
shall have the meaning set forth in the preamble.
1.4 “
Agreement-Related Assets ”
shall have the meaning set forth in Section 8.7.2.
1.5 “
Anticipated Filing Date ”
shall have the meaning set forth in Section 3.2.2
.
1.6 “
Applicable Law ”
shall mean the applicable laws, rules, regulations, guidelines and
requirements of the Regulatory Authorities, in the
Territory.
1.7 “
Claims ”
shall have the meaning set forth in Section 3.10.6.
1.8 “
CMC ”
shall have the meaning set forth in Section 3.4.1
.
1.9 “
Commercially Reasonable Efforts ”
shall mean, with respect to the development or commercialization of
a Licensed Product, efforts and resources commonly used in the
research-based pharmaceutical industry for a product of similar
commercial potential at a similar stage in its lifecycle, taking
into consideration its safety and efficacy, its cost to develop,
the competitiveness of alternative products, its proprietary
position, the likelihood of regulatory approval, its profitability,
and all other relevant factors. Commercially Reasonable Efforts
shall be determined on a market-by-market basis for each Licensed
Product without regard to the particular circumstances of a Party,
including any other product opportunities of such
Party.
1.10 “
Confidential Information ”
shall have the meaning set forth in Article 15.
1.11 “
Common Technical Document ”
shall have the meaning set forth in the International Conference on
Harmonization of the Technical Requirements for Registration of
Pharmaceuticals for Human Use (ICH) Guideline M4,
Organization of the Common Technical Document
,
as revised on January 13, 2004.
1.12 “
Control ”
shall mean, with respect to any item of Information and Inventions,
Patents or other intellectual property right, possession of the
ability, whether directly or indirectly, and whether by ownership,
license or otherwise, to assign, or grant a license, sublicense or
other right to or under, such item, Patent or right as provided for
herein without violating the terms of any agreement or other
arrangement with any Third Party.
1.13 “
Designated Compound ”
shall mean ondansetron.
1.14
“Development Activities” shall
mean the activities performed by the Parties under the Development
Plan pursuant to Article 3.
1.15 “
Development Budget ”
shall have the meaning set forth in Section 3.2.2.
1.16
“Development Committee” shall
have the meaning set forth in Section 3.3.1.
1.17
“Development Plan” shall
have the meaning set forth in Section 3.2.1.
1.18 “
Effective Date ”
shall have the meaning set forth in the preamble.
1.19 “
Execution Date ”
shall have the meaning set forth in the preamble.
1.20 “
Entity ”
shall mean any individual, sole proprietorship, corporation,
limited liability company, association, joint venture, partnership,
limited partnership, limited liability partnership, trust,
university, business, government or political subdivision thereof,
including an agency, or any other organization that possesses
independent legal standing.
1.21
“Exploit” shall
mean to make, have made, import, use, sell, or offer for sale,
including to research, develop, register, modify, improve,
manufacture, have manufactured, store, have used, export,
transport, distribute, promote, market or have sold or otherwise
dispose of a Licensed Product or Licensed Process.
1.22 “
Exploitation ”
shall mean the making, having made, importation, use, sale,
offering for sale of a licensed product or process, including the
research, development, registration, modification, improvement,
manufacture, storage, optimization, import, export, transport,
distribution, promotion, marketing, sale or other disposition of a
Licensed Product or Licensed Process.
1.23 “
Extraterritorial Licensees ”
shall mean NovaDel’s Affiliates and licensees outside of the
Territory.
1.24 “
FDA ”
shall mean the United States Food and Drug Administration, or any
successor agency responsible for the evaluation and approval of
pharmaceutical products.
1.25 “
GAAP ”
shall mean Generally Accepted Accounting Principles as consistently
applied.
1.26 “
Improvement ”
shall
mean any modification, variation or revision to an apparatus,
method, product or technology, or any discovery, technology,
device, process or formulation related to an apparatus, method,
product or technology, whether or not patented or patentable,
including any enhancement in the manufacture or steps or processes
thereof, ingredients, preparation, presentation, formulation, means
of delivery, packaging or dosage of an apparatus, method, product
or technology, any discovery or development of any new or expanded
indications for an apparatus, method, product or technology, or any
discovery or development that improves the stability, safety or
efficacy of an apparatus, method, product or technology, in each
case, to the extent related to the Licensed Process, Licensed
Product or Licensed Technology.
1.27 “
IND ”
shall mean an investigational new drug application filed with the
FDA for approval to commence human clinical trials, and its
equivalent in other countries or regulatory jurisdictions in the
Territory.
1.28
“Indemnification Claim Notice”
shall
have the meaning set forth in Section 10.3.1.
1.29
“Indemnified Party” shall
have the meaning set forth in Section 10.3.1.
1.30 “
Initial Commercial Sale ”
shall
mean the first sale for use or consumption by the general public of
the Licensed Product by Licensee or its Affiliates or Sublicensee
in the Territory following Regulatory Approval of the Licensed
Product. Sales for clinical studies, compassionate use, named
patient programs, sales under a treatment IND, test marketing, any
nonregistrational studies, or any similar instance where the
Licensed Product is supplied without charge shall not constitute an
Initial Commercial Sale.
1.31 “
Initial Agreement ”
shall have the meaning set forth in the preamble.
1.32 “
Infringement Suit ”
shall have the meaning set forth in Section 6.8.2.
1.33 “
Information and Inventions ”
shall mean all technical, scientific and other know-how and
information, trade secrets, knowledge, technology, means, methods,
processes, practices, formulas, instructions, skills, techniques,
procedures, experiences, ideas, technical assistance, designs,
drawings, assembly procedures, computer programs, apparatuses,
specifications, data, results and other material, including
pre-clinical and clinical trial results, manufacturing procedures
and test procedures and techniques, (whether or not confidential,
proprietary, patented or patentable) in written, electronic or any
other form now known or hereafter developed, and all Improvements,
whether to the foregoing or otherwise, and other discoveries,
developments, inventions, and other intellectual property (whether
or not confidential, proprietary, patented or patentable), in each
case, to the extent related to the Licensed Process, Licensed
Product or Licensed Technology.
1.34 “
Knowledge ”
shall mean the good faith understanding of the vice presidents,
senior vice presidents, executive vice presidents, president or
chief executive officer of the respective Party of the facts and
information then in their possession without any duty to conduct
any investigation with respect to such facts and
information.
1.35 “
Licensed Process ”
shall mean the proprietary lingual spray technology for the
delivery of pharmaceutical compounds through the mucosal membrane
of the mouth in humans using an aerosol or pump spray device that
is under the Control of NovaDel as of the Effective Date and any
Improvements thereto that are conceived and reduced to practice by
NovaDel in the course of performing the Development
Activities.
1.36 “
Licensed Product ”
shall mean any dosage of pharmaceutical composition or preparation
in finished form labeled and packaged for sale by prescription,
over-the-counter or any other method only for human application
that contains, as the sole ingredient, the Designated Compound
delivered by means of the Licensed Process.
1.37 “
Licensed Technology ”
shall mean the NovaDel Patents, the NovaDel Know-How and the Drug
Master File, collectively, but only with respect to the
Exploitation of the Licensed Product.
1.38 “
Licensee ”
shall have the meaning set forth in the preamble.
1.39 “
Licensee Shares ”
shall have the meaning set forth in Section 4.4
.
1.40 “
Losses ”
shall have the meaning set forth in Section 10.1.
1.41 “
NDA ”
shall mean a New Drug Application filed pursuant to the
requirements of the FDA, as more fully defined in 21 C.F.R. §
314.5
et seq .,
and any equivalent application required by any Regulatory Authority
for the marketing, sale or use of the Licensed Product in the
Territory for human application.
1.42 “
Net Sales ”
shall mean [***]
1.43 “
NovaDel ”
shall have the meaning set forth in the preamble.
1.44 “
NovaDel
Know-How ”
shall mean all Information and Inventions Controlled by NovaDel or
an Affiliate of NovaDel as of the Effective Date or, from time to
time, during the Term that (a) (i) are necessary for the use of the
Licensed Process to Exploit the Licensed Product or (ii) relate to
Improvements to the Licensed Product or Licensed Process that are
conceived and/or reduced to practice in the course of Exploiting
the Licensed Product or Licensed Process, and (b) are not generally
known, but excluding any Information and Inventions to the extent
claimed by any NovaDel Patents.
1.45 “
NovaDel Patents ”
shall mean the Patents that NovaDel Controls (a) as of the
Effective Date that are listed on Exhibit A hereto and (b) from
time to time during the Term that claim (i) the Licensed Process,
(b) the Licensed Product, (c) NovaDel Know-How, or (d) any
Improvements that are conceived and/or reduced to practice in the
course of Exploiting the Licensed Product or Licensed
Process.
1.46 “
PAR ”
shall have the meaning set forth in Section 3.2.1
.
1.47 “
PAR Sublicense Agreement ”
shall have the meaning set forth in Section 3.2.1
.
1.48 “
Parties ”
shall have the meaning set forth in the preamble.
1.49 “
Party ”
shall have the meaning set forth in the preamble.
1.50 “
Patents ”
shall mean any of the following: (a) United States patents; (b)
United States patent applications (both provisional and
non-provisional), PCT patent applications, and divisionals,
continuations and claims of continuation-in-part applications which
shall be directed to subject matter specifically described in such
United States and/or PCT patent applications, and the resulting
patents (whether such divisionals, continuations or
continuation-in-part applications are based upon a United States
patent, United States patent application or PCT application); (c)
any patents resulting from reissues or reexaminations of the United
States patents described in (a) and (b) above; (d) foreign patents;
(e) foreign patent applications and, to the extent applicable,
divisionals, continuations and claims of continuation-in-part
applications which shall be directed to subject matter specifically
described in such foreign patent applications, and the resulting
patents (whether such divisionals, continuations or
continuation-in-part applications are based upon a foreign patent
application or a foreign patent); and (f) any foreign patents,
resulting from foreign procedures similar to United States reissues
and reexaminations, of the foreign patents and applications
described in (d) and (e) above.
1.51 “
Regulatory Approval ”
shall mean approval by the FDA to market the Licensed Product in
the United States, or equivalent Regulatory Authority in Canada to
market the Licensed Product in Canada, including the issuance by
the FDA or such other Regulatory Authority of an action letter
indicating the approval of the NDA and the manufacturing processes
and facilities for commercial supplies of the Licensed
Product.
1.52 “
Regulatory Authority ”
shall mean any applicable supra-national, federal, national,
regional, state, provincial or local regulatory agencies,
departments, bureaus, commissions, councils or other government
entities regulating or otherwise exercising authority with respect
to the Licensed Technology or the Licensed Product in the
Territory.
1.53 “
Regulatory Documentation ”
shall mean all applications, registrations, licenses,
authorizations and approvals (including all Regulatory Approvals),
all correspondence submitted to or received from Regulatory
Authorities (including minutes and official contact reports
relating to any communications with any Regulatory Authority), all
supporting documents and all clinical studies and tests, relating
to any Licensed Product, and all data contained in any of the
foregoing, including all regulatory drug lists, advertising and
promotion documents, adverse event files and complaint
files.
1.54 “
Sublicensee ”
shall mean any Third Party to which Licensee grants a sublicense
pursuant to Section 2.4 under the licenses granted to Licensee by
NovaDel under Section 2.1.
1.55 “
Technology ”
shall have the meaning set forth in the preamble.
1.56 “
Term ”
shall have the meaning set forth in Section 7.1.
1.57 “
Territory ”
shall mean the United States of America and Canada.
1.58 “
Third Party ”
shall mean any Entity other than NovaDel, Licensee and their
respective Affiliates.
1.59 “
Third Party Claim ”
shall have the meaning set forth in Section 10.3.2.
1.60 “
Trademark ”
shall
include any word, name, symbol, color, designation or device or any
combination thereof, including any trademark, trade dress, brand
mark, trade name, brand name, logo or business symbol.
1.61 “
Valid Claim ”
shall mean, with respect to a particular country, a claim of a
Patent in such country that (a) has not been revoked or held
unenforceable or invalid by a decision of a court or governmental
agency of competent jurisdiction from which no appeal can be taken
or has been taken within the time allowed for appeal, and (b) has
not been abandoned, disclaimed, denied or admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise in such
country, except if a claim, or the subject matter thereof, of a
pending patent application shall not have issued within four (4)
years after the filing date from which such claim, or subject
matter thereof, takes priority, such claim shall not constitute a
valid claim for purposes of this agreement unless and until such
claims shall issue.
ARTICLE 2
GRANT OF RIGHTS
2.1
License Grants to Licensee. Subject
to Section 2.3 and the other terms and conditions of this
Agreement, NovaDel hereby grants to Licensee and Licensee accepts,
a non-transferable (except as provided in Article 12),
sublicenseable (only as provided in Section 2.4), royalty-bearing,
exclusive right and license under the Licensed Technology to
Exploit the Licensed Product in the Territory, to the full end of
the Term for which the Licensed Technology is licensed, unless
sooner terminated as herein after provided.
2.2
License Grant to NovaDel. Licensee
hereby grants to NovaDel a limited, royalty-free, non-exclusive
right and license in the Territory in and to the Licensed
Technology to the extent necessary to perform its Development
Activities under Article 3.
2.3
Retained Rights. NovaDel
retains all right, title and interest, including the right to grant
licenses to Third Parties, in and to the Licensed Technology.
Licensee shall have no rights, express or implied, with respect to
the Licensed Technology, except as expressly set forth in Section
2.1, and Licensee covenants to NovaDel that none of Licensee, its
Affiliates or Sublicensees shall use the Licensed Technology,
directly or indirectly, for any purpose other than for
administration of the Designated Compound in connection with the
Exploitation of Licensed Product hereunder. Notwithstanding
anything in this Agreement to the contrary, NovaDel does hereby
retain, without any duty of accounting or otherwise to Licensee or
a Sublicensee, as applicable,:
2.3.1 The
right to enter into collaborations or other agreements with, and to
grant licenses and other rights under the NovaDel
Patents and NovaDel Know-How to Third Parties to Exploit products
containing compounds other than the Designated Compound and to use
the Licensed Process in connection therewith; and
2.3.2 The
right to independently Exploit products containing compounds other
than the Designated Compound and to use the Licensed Process in
connection therewith ;
and
2.3.3 An
irrevocable, non-exclusive, royalty-free right to use the Licensed
Technology (including the Licensed Process) with respect to the
Designated Compound, for its internal, non-commercial research and
development activities; and
2.3.4 The
rights for all other territories other than the Territory and
non-human uses of the Designated Compound.
2.4
Sublicenses. Licensee
shall have the right to grant sublicenses under the grants in
Section 2.1 to Third Parties pursuant to a separate written
agreement, subject to the following requirements and
conditions:
2.4.1 Licensee
must obtain NovaDel’s prior written consent in respect of
each such sublicense, such consent not to be unreasonably withheld
but in no case will exceed thirty (30) days. Except to the extent
the Parties otherwise agree pursuant to the terms of a particular
sublicense granted under this Section 2.4, any sublicense agreement
must be fully consistent with the terms and conditions of this
Agreement, and provide that Sublicensee will indemnify NovaDel and
its Affiliates to the extent provided in Article 10.
2.4.2 Within
five (5) days after execution or receipt thereof, as applicable,
Licensee shall provide NovaDel with a full and complete copy of
each sublicense agreement granted hereunder and shall deliver
copies of all reports (including relating to royalties and other
payments) received by Licensee from such Sublicensees.
2.4.3 Termination
of this Agreement by NovaDel pursuant to Section 8.3 with respect
to Licensee shall not terminate any sublicense granted by Licensee
pursuant to this Section 2.4 with respect to a Sublicensee,
provided that (a) such Sublicensee is not in breach of any
provision of this Agreement or the applicable sublicense agreement,
(b) such Sublicensee shall perform all obligations of Licensee
under this Agreement, (c) NovaDel shall have all rights with
respect to any and all Sublicensees as it had hereunder with
respect to Licensee prior to termination of this Agreement with
respect to Licensee, and (d) Licensee shall include in any
sublicense a provision in which said Sublicensee acknowledges its
obligations to NovaDel hereunder and the rights of NovaDel to
terminate such sublicense agreement for a breach of such sublicense
agreement by such Sublicensee. The failure of Licensee to include
in a sublicense the provisions referenced in clause (d) shall
render the affected sublicense void.
ARTICLE 3
D
EVELOPMENT AND COMMERCIALIZATION ACTIVITIES
3.1
Development and Commercialization .
Licensee or its Sublicensee shall have the sole right and
obligation to develop and commercialize the Licensed Product in the
Territory. NovaDel shall perform or cause to be performed, on
behalf of Licensee, certain Development Activities in accordance
with this Article 3. Except as set forth herein or in an applicable
sublicense, Licensee shall be solely responsible for all costs and
expenses in connection with all development and commercialization
activities, including the Development Activities performed by
NovaDel on behalf of Licensee.
3.2
Development Activities. Except
as the Parties otherwise agree pursuant to the terms of a
sublicense agreement:
3.2.1
Election Upon Termination of Par Sublicense.
If
that certain Product Development and Commercialization Sublicense
Agreement by and between Licensee, NovaDel and PAR Pharmaceutical,
Inc. (“
PAR ”),
dated as of the Execution Date (the “
PAR Sublicense Agreement ”)
is terminated, Licensee shall notify NovaDel within sixty (60) days
following such termination of Licensee’s election to
undertake further development of Licensed Product. Within sixty
(60) days following delivery of such notice to NovaDel, Licensee
will adopt and provide to NovaDel a development plan describing its
strategy and principal activities in seeking Regulatory Approval
and commercializing the Licensed Product in accordance with the
terms of this Agreement (the “
Development Plan ”).
If
Licensee fails to notify NovaDel within the sixty (60) day period
of its election to undertake further development, fails to provide
NovaDel within the sixty (60) day period a Development Plan, or
elects not to continue development of Licensed Product, this
Agreement shall terminate in accordance with the provisions of
Section 8.4
3.2.2
General .
Under the direction and supervision of the Development Committee,
NovaDel and Licensee each shall perform, or cause to be performed,
its respective Development Activities in accordance with the
Development Plan and corresponding development budget (the
“
Development Budget ”).
Notwithstanding the foregoing, the Parties acknowledge and agree
that there can be no assurances that the objectives of the
Development Activities can be achieved, or that they can be
achieved in the manner or in the time set forth in the Development
Plan. Although outcomes cannot be guaranteed, each Party shall use
Commercially Reasonable Efforts to perform or cause to be performed
its respective Development Activities in good scientific manner,
and in material compliance with Applicable Law. In addition, and
without limiting Licensee’s obligations under this Section
3.2.2, Licensee or its Sublicensee shall file the NDA with the FDA
on or before the last day of the thirty-second (32nd) month after
the Execution Date (the “
Anticipated Filing Date ”);
provided, however, that Licensee or its Sublicensee may extend the
Anticipated Filing Date by four (4) months by delivering, at any
time after the second (2nd) anniversary of the Execution Date,
written notice of such extension to NovaDel. The Anticipated Filing
Date, as extended, may thereafter be extended only upon the mutual
agreement of Licensee or its Sublicensee and NovaDel.
3.2.3
Reports. Within
thirty (30) days after the end of each calendar quarter in which
Development Activities are performed, each Party shall provide to
the Development Committee a written progress report, which shall
describe the Development Activities it has performed, or cause to
be performed, during such calendar quarter, evaluate the work
performed in relation to the goals of the Development Plan and in
relation to the Development Budget, and provide such other
information as may be required by the Development Plan or
reasonably requested by the Development Committee with respect to
the Development Activities. Minutes from periodic project team
meetings or other meetings between the Parties can serve as a
substitute for the required progress reports outlined in this
Section 3.2.3.
3.2.4
Development Plan and Budget. The
Development Committee shall review the Development Plans and the
Development Budgets at least quarterly and shall have the right to
make such modifications or updates to the Development Plans or
Development Budgets that it deems appropriate. The Parties
acknowledge and agree that the amounts set forth in the Development
Budgets are estimates and, given the unpredictability of the
Development Activities, there can be no assurances that the
Development Activities can be completed within the Development
Budgets, provided, however, that the Parties agree to use their
Commercially Reasonable Efforts to adhere to the Development
Budgets not to exceed the amounts set forth in such Development
Budgets without written approval of the Development
Committee.
3.3
Development Committee. Except
as the Parties otherwise agree pursuant to the terms of a
sublicense agreement:
3.3.1
Formation and Authority of Development Committee.
NovaDel
and Licensee shall establish a development committee (the
“
Development Committee ”),
which shall oversee the Development Activities performed by the
Parties, review and approve the Development Budget and approve any
changes to the Development Plan and Development Budget. Each Party
shall appoint an equal number of representatives with the requisite
experience and seniority to enable them to make decisions on behalf
of the Parties with respect to the Development Activities. From
time to time, each Party may substitute its representatives on
written notice to the other Party.
3.3.2
Procedural Rules of Development Committee.
The
Development Committee shall meet monthly, or as otherwise agreed to
by the Parties. The Development Committee shall adopt such standing
rules as shall be necessary for its work. A quorum of the
Development Committee shall exist whenever there is present at a
meeting at least one representative appointed by each Party.
Members of the Development Committee may attend a meeting either in
person or by telephone, video conference or similar means in which
each participant can hear what is said by the other participants.
Representation by proxy shall not be allowed. The Development
Committee shall take action by unanimous consent of NovaDel and
Licensee, with each such Party having a single vote, irrespective
of the number of representatives actually in attendance at a
meeting, or by a written resolution signed by the designated
representatives of each of NovaDel and Licensee.
3.3.3
Dispute Resolution. If
the Development Committee cannot, or does not, reach agreement on
an issue, then either Party shall have the right to refer such
issue to the Chief Executive Officers of the Parties who shall
confer on the resolution of the issue. Any final decision mutually
agreed to by the Chief Executive Officers of the Parties shall be
in writing and shall be conclusive and binding on the Parties. If
such officers are not able to agree on the resolution of an issue
within twenty (20) days after such issue was first referred to
them, either Party shall have the right to refer such dispute to
arbitration pursuant to Article 9.
3.3.4
Limitations on Authority of Development Committee.
Each
Party to this Agreement shall retain the rights, powers, and
discretion granted to it under this Agreement, and no such rights,
powers, or discretion shall be delegated to or vested in the
Development Committee unless such delegation or vesting of rights
is expressly provided for in this Agreement or the Parties
expressly so agree in writing. The Development Committee shall not
have the power to amend or modify this Agreement, which may only be
amended or modified as provided in Section 16.4.
3.4
Regulatory Approvals. Except
as the Parties otherwise agree pursuant to the terms of a
sublicense, all INDs, NDAs and other filings, applications or
requests pursuant to or in connection with the Regulatory Approvals
required under the Development Plan shall be made in the name of
Licensee; provided, however, that Licensee shall consult with
NovaDel with respect to the preparation and submission of any such
filings, applications or requests in connection with Regulatory
Approvals.
3.4.1 Licensee
will be the primary contact for Chemistry, Manufacturing and
Control (“
CMC ”)
matters in all relevant regulatory applications except to
regulatory bodies outside the United States and Canada. Licensee
will keep NovaDel reasonably informed of all such communications,
if any, between Licensee and the Regulatory Authorities in the
United States and Canada.
3.4.2 NovaDel
and NovaDel’s Extraterritorial Licensees shall have a
perpetual, royalty-free, irrevocable, worldwide right to use and
reference the Regulatory Documentation with respect to the Licensed
Product and any data included or referenced therein for all
purposes. Licensee agrees to utilize the Common Technical Document
format for its marketing applications in order to facilitate any
subsequent submissions filed by NovaDel or its Extraterritorial
Licensee’s outside of the Territory. Licensee shall keep
NovaDel reasonably informed as to the communications, if any,
between Licensee and the Regulatory Authorities.
3.4.3 Licensee
agrees to keep the Common Technical Document, except for those
sections in the Summary Basis of Approval and available through the
Freedom of Information Act, strictly confidential in accordance
with Article 15.
3.5
Regulatory Records. NovaDel
and Licensee each shall maintain, or cause to be maintained,
records of its respective Development Activities in sufficient
detail and in good scientific manner appropriate for patent and
regulatory purposes, which shall be complete and accurate and shall
fully and properly reflect all work done and results achieved in
the performance of its respective Development Activities, and which
shall be retained by such Party for at least five (5) years after
the termination of this Agreement, or for such longer period as may
be required by Applicable Law. Each Party shall have the right,
during normal business hours and upon reasonable notice, to inspect
and copy any such records; provided, however, that neither Party
shall have the right to conduct more than one such inspection in
any twelve (12)-month period.
3.6
Development Expenses. Except
as the Parties otherwise agree pursuant to the terms of a
sublicense:
3.6.1
Licensee’s Obligation. In
consideration of NovaDel’s performance of its Development
Activities, Licensee shall reimburse NovaDel for the reasonable and
documented costs and expenses incurred by NovaDel in performing
such activities in accordance with the Development Budget (as may
be amended in accordance with Section 3.2.4). Licensee shall bear
all costs and expenses incurred by or on behalf of Licensee in
connection with the performance of its Development
Activities.
3.6.2
Invoices and Payments. Within
thirty (30) days after the end of each month in which Development
Activities are performed, NovaDel shall invoice Licensee for any
costs and expenses incurred by NovaDel or its Affiliates in such
month. Each invoice shall be payable to NovaDel within thirty (30)
days after invoice date.
3.6.3
Books and Records. Each
Party
shall
maintain complete and accurate books, records and accounts that, in
reasonable detail, fairly reflect any reimbursable costs and
expenses incurred by it or its Affiliates in performance of the
Development Activities in conformity with GAAP. Each Party
shall
retain such books, records and accounts until the later of (a)
three (3) years after the end of the period to which such books,
records and accounts pertain, and (b) the expiration of the
applicable tax statute of limitations (or any extensions thereof),
or for such longer period as may be required by Applicable Law.
Each Party shall have the right to have its certified public
accountant, who shall be reasonably acceptable to NovaDel and
Licensee, as applicable, audit the books and financial records of
the other Party and their respective Affiliates relating to its
Development Activities during one or more calendar quarters;
provided, however, that Licensee shall not have the right to audit
a calendar quarter more than two (2) years after the end of such
quarter, to conduct more than one such audit in any twelve-month
period, or to audit any calendar quarter more than once; and
provided further that each Party shall bear the cost of such audit
unless the audit reveals a variance of more than five percent (5%)
from the reported results, in which case audited Party shall bear
the cost of the audit. The results of such accounting firm shall be
final, absent manifest error.
3.7
Cooperation. Each
Party shall cooperate with any and all reasonable requests for
assistance from the other Party with respect to the Development
Activities, including by making its employees, consultants and
other scientific staff available upon reasonable notice during
normal business hours at their respective places of employment to
consult with such other Party on issues arising in connection with
the performance of such Development Activities.
3.8
Development and Use of Trademarks. Licensee
shall have the sole right to determine the Trademarks to be used
with respect to the Exploitation of the Licensed Product in the
Territory, provided that the product labeling and promotional
materials disclose that the Licensed Product are delivered using
the Licensed Process.
3.9
Diligence Obligations. Following
receipt of Regulatory Approval of the Licensed Product by the FDA,
Licensee (or its Sublicensees) shall use Commercially Reasonable
Efforts to Exploit the Licensed Product in the United States.
Licensee shall have the right, but not the obligation, to Exploit
the Licensed Product in Canada. In addition, Licensee directly or
through a Sublicensee will consummate the Initial Commercial Sale
in the United States within nine (9) months after receipt of
Regulatory Approval from the FDA for the Licensed Product. Licensee
(or its Sublicensee if there is a sublicense agreement) shall have
responsibility for all advertising, marketing, promotion,
distribution, selling and other commercialization activities,
including developing strategies and tactics related to such
activities for the Licensed Product. Licensee (or its Sublicensee
if a there is a sublicense agreement) shall, at all times during
the Term of this Agreement, use efforts, including but not limited
to appropriate promotional campaigns and materials, and qualified
commercial personnel, consistent with those typically used in the
pharmaceutical industry and equal to those committed to products of
similar size and expected value to seek to commercialize the
Licensed Product in the Territory after receipt of Regulatory
Approval for those formulations and indications for which Licensee
(or its Sublicensee if a there is a sublicense agreement) is
commercializing the Licensed Product. Should Licensee (or its
Sublicensee if a there is a sublicense agreement) fail to meet the
above 'standard', the Parties will discuss Licensee’s (or its
Sublicensee’s if a there is a sublicense agreement) continued
commitment to commercialize the Licensed Product and the
termination of this Agreement or sublicense agreement, if
applicable.
3.10
Manufacturing. Except
as the Parties otherwise agree pursuant to the terms of an
applicable sublicense:
3.10.1 Subject
to the other provisions of this Section 3.10.1, Licensee shall be
solely responsible for the manufacture of the Licensed Product,
both for clinical development and following receipt of Regulatory
Approval of the Licensed Product; provided that Licensee may
contract with a Third Party to perform such manufacturing services.
Licensee shall share all data and other information relating to the
manufacturing process and shall consult with NovaDel with respect
thereto. Without limiting the generality of the foregoing, NovaDel
shall have the opportunity to review, prior to execution, all
agreements with Third Parties relating to the manufacture of the
Licensed Product. Any disputes between NovaDel and Licensee
relating to the manufacture of the Licensed Product shall be
resolved in the manner set forth in Section 3.3.3 hereof. NovaDel
and its Extraterritorial Licensees retain the right to purchase
product from said Third Party, if applicable, at the same costs as
Licensee with the exception of an increase of cost due to a
modification to the packaging/labeling by NovaDel or any
Extraterritorial Licensee.
3.10.2 Licensee
agrees that, at all times during the performance of the Development
Activities, it, or its designee, will act in accordance with all
Applicable Laws.
3.10.3 To
the extent Licensee contracts with a Third Party to manufacture the
Licensed Product, such Third Party shall agree in writing to be
bound by the obligations of confidentiality and non-use at least
equivalent in scope to those set forth in Article 15 of this
Agreement.
3.10.4 NovaDel
and its Extraterritorial Licensees may purchase Licensed Product
under Section 3.10.1 in the identical packaging and labeling as
Licensee purchases such Licensed Product for sale in the United
States, subject to the requirement by NovaDel and Sublicensees to
have such Licensed Product uniquely identified by a separate batch
record identification or other indicia sufficient to distinguish
sales by NovaDel, or its Extraterritorial Licensees, from those of
Licensee.
3.10.5 Licensee
shall use Commercially Reasonable Efforts to obtain any required
licenses, permissions needed and documentation (e.g., Certificate
of Pharmaceutical Product) in order for NovaDel and its
Extraterritorial Licensees to buy and export Licensed Product from
the United States. NovaDel shall reimburse all reasonable expenses
incurred by Licensee for obtaining such licenses or permissions
within thirty (30) days of an Extraterritorial Licensee’s
receipt of an invoice from Licensee itemizing such
expenses.
3.10.6 NovaDel
warrants, covenants and agrees that any license agreement that
NovaDel enters into with an Extraterritorial Licensee regarding
Licensed Product that are subject to this Agreement shall contain
an indemnity clause requiring the Extraterritorial Licensee to
indemnify Licensee and its Affiliates against any and all claims,
proceedings, demands, liability and expenses of any kind, including
legal expenses and attorneys’ fees (collectively,
“
Claims ”),
arising out of or in connection with the manufacture, sale, use,
consumption, advertisement or other disposition of Licensed Product
by the Extraterritorial Licensee, its Affiliates or any end user,
or arising from any violation of law, negligence, willful or
reckless misconduct, or from any breach of any material obligation
of such Extraterritorial Licensee under its agreement with NovaDel,
other than Claims resulting from the gross negligence or willful
misconduct of Licensee; provided, however, that in no event shall
the scope of the indemnification to Licensee be any less than the
scope of the Extraterritorial Licensee’s indemnification
obligations to NovaDel.
ARTICLE 4
ROYALTIES AND OTHER CONSIDERATION
4.1
Royalties. As
consideration for the rights, privileges and licenses granted
hereunder and the Development Activities performed by NovaDel
pursuant to Article 3, Licensee shall make the following payments
to NovaDel:
4.1.1 Licensee
shall pay to NovaDel royalties as follows: (i)
[***] percent
(
[***] %)
of up to the first $
[***] of
Net Sales by Licensee or any Affiliate or Sublicensee of Licensee
of the Licensed Product during each calendar year in the Territory
plus (ii)
[***] percent
(
[***] %)
of Net Sales greater than $
[***] and
up to $
[***] by
Licensee or any Affiliate or Sublicensee of Licensee of the
Licensed Product during each calendar year in the Territory plus
(iii)
[***] percent
(
[***] %)
of Net Sales greater than $
[***] by
Licensee or any Affiliate or Sublicensee of Licensee of the
Licensed Product during each calendar year in the Territory (see
Exhibit B for schedule of royalty calculation).
4.1.2 The
conversion rate for payments under Section 4.1.1, as it pertains to
sales in Canada, shall be calculated by using the conversion rate
on the last day of the calendar quarter for which the sales apply.
The conversion rate to be used will be taken from the currency
converter at
www.oanda.com .
Canadian dollar sales will be converted into U.S. dollars and then
the royalty rates outlined in Section 4.1.1 will
apply.
4.1.3 Notwithstanding
anything to the contrary contained herein, any and all royalties to
be received by Licensee pursuant to the PAR Sublicense Agreement
shall be paid to a lock-box account. Accordingly, the Parties agree
that, within thirty (30) days after the Execution Date, the Parties
and the Sublicensee will take such actions reasonably requested by
NovaDel, and enter into documentation in form and substance
reasonably satisfactory to NovaDel (including, without limitation,
a security agreement, lockbox agreement and irrevocable payment
instructions), in order to (i) grant to NovaDel a first priority,
perfected security interest in all of Licensee’s right, title
and interest under the Par Sublicense Agreement (including without
limitation its right to receive payments of the sublicense fees and
other amounts payable by Par thereunder) and in and to any lockbox
account(s) to which royalty payments thereunder may be made, (ii)
perfect NovaDel’s security interest in such lockbox
account(s) and provide for remittances therefrom in accordance with
the terms in this Agreement and (iii) irrevocably instruct PAR to
make all royalty payments under the PAR Sublicense Agreement
directly to such lockbox account(s).
4.2
Royalty Term. Except
as the Parties otherwise agree pursuant to the terms of an
applicable sublicense, Licensee’s royalty obligations under
Section 4.1.1 shall terminate, on a country-by-country basis, with
respect to the Licensed Product upon the later of (a) the
expiration or invalidation in such country of the last NovaDel
Patent that includes at least one Valid Claim covering the Licensed
Product in such country and (b) the twentieth (20th) anniversary of
the Execution Date; provided, however, if (i) the last NovaDel
Patent that includes at least one Valid Claim covering the Licensed
Product in such country expires or is invalidated prior to the
twentieth (20th) anniversary of the Execution Date and (ii) and no
regulatory exclusivity with respect to such Licensed Product exists
in such country (whether as a result of expiration of the
exclusivity period or otherwise), then the royalty obligations
under Section 4.1.1 in such country shall be reduced in accordance
with the terms of Section 4.6.
4.3
Royalty Payments. Royalties
under Section 4.1.1 shall be payable to NovaDel on a calendar
quarterly basis, within forty-five (45) days after the end of each
calendar quarter. Licensee will submit to NovaDel documentation to
support the total amount of funds spent by the Licensee on
pharmaceutical development and clinical studies for the Licensed
Product. Licensee will submit along with payment to NovaDel, a
quarterly royalty statement in a format mutually agreed by both
Parties. Along with the statement will be all supporting
documentation comprising of a statement of net sales for the period
and copies of actual paid invoices covering clinical supplies,
consultants, clinical studies, investigator fees, document
preparation, regulatory fees and other direct fees related to
development of the Licensed Product,
4.4
Licensee Fee & Equity. Simultaneously
with the execution of the Initial Agreement, Licensee issued and
sold to NovaDel 73,121 shares of its common stock (the
“
Licensee Shares ”)
totaling a value of $500,000. Upon execution of this Agreement,
NovaDel will transfer and assign to Licensee all of its right,
title and interest in and to the Licensee Shares and Licensee will
redeem the Licensee Shares. Such transfer and assignment by NovaDel
will be evidenced by a duly executed stock power or other form of
assignment and shall be accompanied by the original certificate
representing the Licensee Shares.
4.5
Milestone Payments.
4.5.1 Licensee
has paid, and NovaDel hereby acknowledges receipt of, the Milestone
Payments in the total sum of $
[***] ,
as described in Sections 4.5.1, 4.5.2 and 4.5.3 of the Initial
Agreement.
4.5.2 Licensee
shall pay to NovaDel the additional sum of $
[***] within
ten (10) Business Days from the date on which the NDA for the
Licensed Product is approved by the FDA.
4.6
Reduction of Payments. In
the event that, or from and after the date on which, (a) no Valid
Claim of a N
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