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Exhibit 10.1
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.
PRODUCT DEVELOPMENT AND
COMMERCIALIZATION SUBLICENSE AGREEMENT
This
Development and Commercialization Sublicense Agreement (this
“
Agreement ”)
is made and entered into this 31st day of July, 2007 (the
“
Effective Date ”),
by and among HANA Biosciences, Inc., a Delaware corporation
(“
HANA ”),
PAR Pharmaceutical, Inc., a Delaware corporation (“
PAR ”),
and NovaDel Pharma, Inc., a Delaware corporation (“
NovaDel ”).
WHEREAS,
HANA has exclusive, restricted sublicensable rights under a
license from NovaDel , the owner of certain patents,
intellectual property and know-how relating to lingual sprays
for the metered delivery of pharmaceutical products to
humans;
WHEREAS,
HANA has commenced the development of a pharmaceutical product
containing ondansetron as an active ingredient that will be
administered to humans using the Licensed Technology (as
defined below) on terms and conditions set forth
herein;
WHEREAS
, HANA
desires to sublicense to PAR the Licensed Technology, and PAR
desires to accept such sublicense on the terms and conditions set
forth herein; and
WHEREAS
,
simultaneously
with the execution of this Agreement, the Parties are entering into
that certain Subscription Agreement that provides, on the terms and
subject to the conditions set forth therein, for a purchase by PAR
of the common stock of HANA in an amount up to
$5,000,000.
NOW,
THEREFORE, in consideration of the mutual covenants and
promises contained in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, HANA, PAR and NovaDel agree as
follows:
ARTICLE 1
DEFINITIONS
For
purposes of this Agreement, the following words and phrases
shall have the following meanings, unless otherwise
specifically provided herein:
1.1
AAA
has
the meaning set forth in Section 15.2.1.
1.2
Affiliate
shall
mean, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person. For
purposes of this Section 1.1 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 Person, 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 a
Person
1.3
Agreement
has
the meaning set forth in the preamble.
1.4
Agreement Related Assets
has
the meaning set forth in Section 11.3.2.
1.5
Anticipated Filing Date
has
the meaning set forth in Section 4.2.2.
1.6
Applicable Law
shall
mean the applicable laws, rules, regulations, guidelines and
requirements of the Regulatory Authorities in the
Territory.
1.7
CGMP
means
the regulatory requirements for current good manufacturing
practices promulgated by the FDA under the U.S. Food, Drug and
Cosmetic Act and the regulations promulgated thereunder,
particularly 21 C.F.R. Section 210 et seq., and 21 C.F.R. Sections
600-610, as the same may be amended from time to time.
1.8
Commercialization
means
the marketing, promotion, advertising, selling and/or distribution
of the Licensed Product in the Territory after Regulatory Approval
therefor has been obtained; and the term “
Commercialize ”
has a corresponding meaning.
1.9
Commercially Reasonable Efforts
shall
mean, with respect to the development or commercialization of the
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
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.
1.11
Confidential Information
has
the meaning set forth in Section 9.1.
1.12
Control
shall
mean, with respect to any item of Information and Inventions,
Patent Rights 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
Development Committee
has
the meaning set forth in Section 4.1.2.
1.14
Designated Compound means
ondansetron.
1.15
Development Plan has
the meaning set forth in Section 4.1.1.
1.16
Effective Date has
the meaning set forth in the preamble.
1.17
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.
1.18
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.
1.19
FDA means
The Food and Drug Administration of the United States Department of
Health and Human Services, or any successor agency(ies) thereof
performing similar functions.
1.20
GAAP shall
have the meaning set forth in Section 6.8.
1.21
HANA
has
the meaning set forth in the preamble .
1.22
HANA Indemnified Parties has
meaning set forth in Section 12.1.
1.23
HANA Know-How shall
mean all Information and Inventions Controlled by HANA or an
Affiliate of HANA at any time during the Term that (a) are
necessary for the use of the Licensed Process to Exploit the
Licensed Product, and (b) are not generally known.
1.24
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.
1.25
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.
1.26
Indemnification Claim Notice shall
have the meaning set forth in Section 12.4.1.
1.27
Indemnified Party has
meaning set forth in Section 12.4.1.
1.28
Information And Invention 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.
1.29
Infringement Suit has
meaning set forth in Section 10.3.
1.30
Initial Commercial Sale means
the first sale for use or consumption by the general public of the
Licensed Product by PAR or its Affiliates 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
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 of the NovaDel-Hana
License and any Improvements thereto that are conceived and reduced
to practice by NovaDel in the course of performing its obligations
under the NovaDel-Hana License.
1.32
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 active ingredient, the Designated
Compound delivered by means of the Licensed Process.
1.33
Licensed Technology shall
mean the NovaDel Patent Rights, the NovaDel Know-How and
Improvements thereof, and the Drug Master File, collectively, but
only with respect to the Exploitation of the Licensed
Product.
1.34
Licensed Trademark shall
mean “ZENSANA” owned by HANA as evidenced by U.S.
Trademark Application Serial No. 78,710,181.
1.35
Lock-Up Period has
meaning set forth in Section 6.1.
1.36
Losses has
the meaning set forth in Section 12.1.
1.37
NDA means
a New Drug Application as defined in the United States Federal
Food, Drug and Cosmetic Act and applicable regulations promulgated
thereunder as amended from time to time 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.
1.38
Net Sales means
[***]
1.39
NovaDel
has
the meaning set forth in the preamble .
1.40
NovaDel-Hana License means
that certain License and Development Agreement originally dated
October 26, 2004, by and between NovaDel and HANA, as amended and
restated effective as of July 31, 2007.
1.
41
NovaDel Indemnified Parties has
meaning set forth in Section 12.1.
1.42
NovaDel Know-How shall
mean all Information and Inventions Controlled by NovaDel or an
Affiliate of NovaDel as of the effective date of the NovaDel-Hana
License 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
License Process, and (b) are not generally known, but excluding any
Information and Inventions to the extent claimed by any NovaDel
Patents.
1.43
NovaDel Patents shall
mean the Patent Rights that NovaDel Controls (a) as of the
effective date of the NovaDel-Hana License that are listed on
Exhibit A hereto and (b) from time to time during the Term that
claim (i) the Licensed Process, (ii) the Licensed Product, (iii)
NovaDel Know-How, or (iv) any Improvements that are conceived
and/or reduced to practice in the course of Exploiting the Licensed
Product or License Process.
1.44
Par
has
the meaning set forth in the preamble .
1.45
PAR Indemnified Parties has
meaning set forth in Section 12.2.
1.46
Party or Parties means
HANA, NovaDel and/or PAR, as applicable.
1.47
Patent Rights means
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.
1.48
Person means
an individual, partnership, joint venture, association,
corporation, limited liability company and any other form of
business organization, government, regulatory or governmental
agency, commission, department or instrumentality.
1.49
Product Liability Claim means
a Third Party’s assertion of a strict liability claim of
actual personal injury or death as a result of the use of the
Licensed Product during the Term.
1.50
Product Trademarks has
meaning set forth in Section 5.4.
1.51
Regulatory Approval means
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 the 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
Subscription Agreement has
the meaning set forth in Section 6.1.
1.55
Term has
the meaning set forth in Section 11.1.
1.56
Territory means
the United States of America and Canada.
1.57
Third Party means
any Person other than PAR, NovaDel, HANA and their respective
Affiliates.
1.58
Third Party Claim shall
have the meaning set forth in Section 12.5.2.
1.59
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.
1.60
Valid Claim shall
mean, with respect to a particular country, a claim of a Patent
Right 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
SCOPE OF THE COLLABORATION
2.1
Objectives .
The Parties agree, pursuant and subject to the terms of this
Agreement, that HANA intends to assign to PAR, and PAR intends to
assume, all of HANA’s rights and obligations to develop and
obtain Regulatory Approval for the Licensed Product in the
Territory and to commercialize the Licensed Product in the
Territory.
2.2
Diligence Obligations .
PAR shall use Commercially Reasonable Efforts in accordance with
the terms and conditions of this Agreement, including the
Development Plan, to (a) develop and commercialize the Licensed
Product in the entire Territory; (b) file the NDA with the FDA in
PAR’s name and obtain Regulatory Approval(s) with respect to
the Licensed Product in the Territory; and (c) Exploit the Licensed
Product in the Territory.
2.3
Outsourcing of MARQIBO Development .
HANA holds the exclusive license and patent rights for the
commercialization of Sphingosomal Vincristine sulfate liposome for
the therapeutic treatment of patients with leukemia, lymphoma and
solid tumors currently being developed under the trade name
“MARQIBO.” In the event that HANA in its sole
discretion, elects to grant a Third Party a right to manufacture
and sell such product, HANA will inform PAR and, if PAR so
requests, HANA will allow PAR to submit a proposal for HANA’s
consideration prior to entering into negotiations with any other
Third Party to manufacture and sell the product.
2.4
Co-Promotion of ZENSANA .
Within ninety (90) days following PAR’s submission of an NDA
for the Licensed Product, HANA may submit a proposal for
PAR’s consideration with respect to the Parties’ joint
promotion and commercialization of such Licensed Product;
provided ,
however ,
that any determination whether to jointly promote and commercialize
the Licensed Product with HANA will be in PAR’s sole
discretion and if PAR determines to jointly promote with HANA, then
PAR and HANA will negotiate in good faith an agreement that
provides for the rights and obligations in respect
thereof.
ARTICLE 3
GRANT OF RIGHTS
3.1
License Grant .
Subject to Section 3.3 and the other terms and conditions of this
Agreement, HANA hereby grants to PAR and its Affiliates and PAR
accepts:
3.1.1
A
non-transferable (except as provided in Section 11.3.2),
nonsublicenseable (except as set forth in this Section 3.1 and
Section 3.2), royalty-bearing, exclusive sublicense 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; provided, however, that PAR shall have the
right to (i) utilize Third Parties to manufacture the Licensed
Product in the Territory, and (ii) use, have used, manufacture
or have manufactured the Licensed Product outside of the
Territory solely for purposes of the distribution and sale of
the Licensed Product inside the Territory. PAR shall be
entitled to use a Third Party contract sales organization to
market the Licensed Product in the Territory; provided, that
the employees of such Third Party contract sales organization
that are utilized to market the Licensed Product are trained
and managed by PAR and carry only PAR’s
products.
3.1.2
In
the event that PAR elects to use the Licensed Trademark in
connection with the Exploitation of the Licensed Product in
the Territory pursuant to Section 0
,
then a non-transferable (except as provided in Article 12),
nonsublicenseable, royalty-bearing, non-exclusive right and
license under the Licensed Trademark will be granted for the
sole purpose of using the Licensed Trademark to market,
distribute and sell the Licensed Product in the Territory, to
the full end of the Term for which the Licensed Product is
licensed, unless sooner terminated as herein after
provided.
3.1.3
PAR
shall not sell, distribute or transfer the Licensed Product to
any Person that, to PAR’s knowledge or should reasonably
know, is using or intends to use the Licensed Product outside
of the Territory or is selling or transferring, or intends to
sell or transfer, the Licensed Product to a Person who is
using or intends to use such Licensed Product outside of the
Territory.
3.1.4
PAR
agrees that during the Term it will use the Licensed
Technology only as explicitly provided and in accordance with
the term and conditions of this Agreement. PAR expressly
acknowledges and agrees that the only licenses granted under
this Agreement are the licenses expressly granted under this
Agreement and that there shall be no implied license or
license by estoppel.
3.2
License Grant to NovaDel .
In the event that NovaDel and PAR agree pursuant to Section
0
that
NovaDel is to perform certain development activities under the
Development Plan, PAR hereby grants to NovaDel a limited,
royalty-free, co-exclusive right and license in the Territory in
and to the Licensed Technology to the extent necessary to perform
such development activities.
3.3
Retained Rights .
PAR acknowledges that NovaDel retains all right, title and
interest, including the right to grant licenses to Third Parties,
in and to the Licensed Technology. PAR shall have no rights,
express or implied, with respect to the Licensed Technology except
as expressly set forth in Section 3.1, and PAR covenants to HANA
and NovaDel that none of PAR or its Affiliates 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, PAR
acknowledges that NovaDel retains, without any duty of accounting
or otherwise to PAR:
3.3.1
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
3.3.2
The
right to independently Exploit products containing compounds
other than the Designated Compound and to use the Licensed
Process in connection therewith; and
3.3.3
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
3.3.4
The
rights for all other territories other than the Territory and
non-human uses of the Designated Compound.
3.4
Additional Covenants and Agreements .
3.4.1
HANA
covenants and agrees that, from and after the Effective Date
until the termination of this Agreement, neither it nor any of
its Affiliates shall seek to develop (directly or indirectly)
any lingual spray technology for the delivery of anti-emetic
pharmaceutical compounds.
3.4.2
Promptly
after the Effective Date, each of NovaDel and HANA shall at
its cost and expense, use good faith reasonable efforts to
disclose to PAR in writing, or via mutually acceptable
electronic media, copies or reproductions of all HANA Know-How
and NovaDel Know-How, not previously disclosed to PAR,
reasonably necessary in order to enable PAR to exploit its
rights granted under this Article 3. In addition, during the
Term, each of HANA and NovaDel shall promptly disclose to PAR
in writing, or via mutually acceptable electronic media, on an
ongoing basis, copies or reproductions of all new HANA
Know-How and NovaDel Know-How that is reasonably necessary to
market, sell or have sold the Licensed Product. Such HANA
Know-How and NovaDel Know-How and other information shall be
automatically deemed to be within the scope of the licenses
granted herein without payment of any additional
compensation.
3.5
Manufacturing .
3.5.1
Subject
to the other provisions of this Section 3.5.1, PAR 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
PAR may contract with a Third Party to perform such
manufacturing services. PAR 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; provided, however, that PAR shall have the ultimate
decision making authority in the event of any dispute between
NovaDel and PAR relating to the terms of any such
manufacturing agreement (or the choice of such Third Party
manufacturer). NovaDel and its Extraterritorial Licensees (as
defined in the NovaDel-Hana License) retain the right to
purchase product from said Third Party, if applicable, at the
same costs as PAR with the exception of an increase of cost
due to a modification to the packaging/labeling by NovaDel or
any Extraterritorial Licensee.
3.5.2
PAR
agrees that, at all times during the performance of the
development activities, it, or its designee, will act in
accordance with all Applicable Laws.
3.5.3
To
the extent PAR 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 9 of
this Agreement.
3.5.4
PAR
shall not object to permitting any Third Party manufacturer
from selling NovaDel and its Extraterritorial Licensees
Licensed Product under Section 3.5.1 in the identical
packaging and labeling as PAR 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
PAR.
3.5.5
PAR
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 PAR for obtaining such
licenses or permissions within thirty (30) days of an
Extraterritorial Licensee’s receipt of an invoice from
PAR itemizing such expenses
3.5.6
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 PAR 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 PAR; provided, however, that in no event shall the
scope of the indemnification to PAR be any less than the scope of
the Extraterritorial Licensee’s indemnification obligations
to NovaDel.
ARTICLE 4
DEVELOPMENT PROGRAM
4.1
Development Plan; Responsibility and Control
.
4.1.1
Within
sixty (60) days after the Effective Date, PAR will adopt a
development plan, and provide such development plan to
NovaDel, describing its strategy and principal activities in
seeking Regulatory Approval for the Licensed Product and
commercializing the Licensed Product in accordance with the
terms of this Agreement (the “
Development Plan ”),
which may be amended by PAR in its commercially reasonable
discretion. PAR will use its Commercially Reasonable Efforts to
execute the Development Plan. Subject to the Development Plan and
the other terms and conditions contained in this Agreement, PAR
shall have control over and responsibility for executing all
aspects of the Development Plan, including planning, strategy,
administrative management, and fiscal control; provided, however,
that PAR shall include the Development Committee in such efforts in
a consultative capacity. In the event that PAR desires, PAR may
request NovaDel to conduct certain development activities, and, if
NovaDel agrees, NovaDel and PAR shall negotiate in good faith the
scope of such development activities to be undertaken by NovaDel,
appropriate amendments to the Development Plan and the amounts to
be paid to NovaDel for the provision of such development
activities; provided that it is understood that PAR shall not be
entitled to amend the Development Plan to include the performance
of any activities by NovaDel without the prior written consent of
NovaDel.
4.1.2
PAR
and
NovaDel
shall establish a development committee (the “
Development Committee ”),
which shall confer at least on an annual basis to coordinate
PAR’s and
NovaDel’s
performance of their respective responsibilities under this
Agreement. PAR and
NovaDel
each shall appoint an equal number of representatives with the
requisite experience and seniority to enable them to make decisions
on behalf of the Parties. From time to time, PAR and
NovaDel
each may substitute its representatives on written notice to the
other .
The Development Committee shall not have the power to amend or
modify the Development Plan, which may only be amended or modified
as provided in Section 4.1.1.
4.1.3
By
no later than November 1 of each calendar year during the
Term, PAR shall prepare and deliver to NovaDel an updated
Development Plan for the following calendar year. NovaDel
shall have the right to comment on the Development Plan
(including the initial Development Plan delivered pursuant to
Section 4.1.1), and PAR shall consider such comments in good
faith; provided that nothing contained herein is intended to
limit PAR’s sole discretion with respect to the
development of the Licensed Product in the
Territory.
4.2
Clinical and Regulatory Approval .
4.2.1
Subject
to the terms of the Development Plan, in the Territory, PAR
shall (a) use its Commercially Reasonable Efforts to conduct
required clinical trials of the Licensed Product and obtain
Regulatory Approval, and (b) be responsible for all activities
related to the toxicology, formulation, process development,
quality assurance/quality control, and regulatory affairs for
the Licensed Product and (c) include HANA and NovaDel in such
efforts in a consultative capacity; provided, however, that,
as and to the extent requested by PAR and agreed to by NovaDel
pursuant to Section 4.1.1, NovaDel may collaborate with PAR in
executing the Development Plan; provided further, however, for
purposes of clarity, neither HANA nor NovaDel shall have the
right to direct or control PAR’s conduct of such
activities.
4.2.2
Subject
to the terms of the Development Plan, PAR shall use its
Commercially Reasonable Efforts to prepare any required
application(s) for Regulatory Approval, including the filing
of the NDA with the FDA in PAR’s name, and shall have
responsibility for: (a) all clinical data and reports related
to Licensed Product studies, including clinical trials for the
Licensed Product; and (b) all NDAs and other Regulatory
Approvals for the Licensed Product in the Territory. PAR shall
inform HANA and NovaDel of all communications with the FDA,
and shall provide copies of all FDA submissions and other
written communication with the FDA as soon as reasonably
practicable. The Parties shall cooperate in good faith with
respect to all such submissions and meetings with the FDA
relating to regulatory approval of the Licensed Product. In
addition, and without limiting PAR’s obligations under
Section 0
or
this Section 0
,
PAR shall file the NDA with the FDA on or before the last day
of the thirty-second (32nd) month after the Effective Date
(the “
Anticipated Filing Date ”);
provided, however, that PAR may extend the Anticipated Filing Date
by four (4) months by delivering, at any time after the second
(2nd) anniversary of the Effective Date, written notice of such
extension to NovaDel. The Anticipated Filing Date, as extended, may
thereafter be extended only upon the mutual agreement of PAR and
NovaDel.
4.2.3
PAR
shall, and shall cause its Affiliates to, promptly disclose to
NovaDel all Regulatory Documentation and all other Information
and Inventions in the possession or Control of PAR or its
Affiliates that relate to the Exploitation of the Licensed
Product. NovaDel and NovaDel’s Extraterritorial
Licensees shall have a perpetual, royalty-free, irrevocable,
worldwide right to use and reference the Regulatory
Documentation and any data included or referenced therein for
all purposes. PAR 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 Licensees outside of the
Territory.
4.2.4
PAR
will be the primary contact for Chemistry, Manufacturing and
Control matters in all relevant regulatory applications except
to regulatory bodies outside the United
States and Canada. PAR will keep NovaDel reasonably informed
of all such communications, if any, between PAR and the
Regulatory Authorities in the United States and
Canada.
4.2.5
PAR
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 9.
4.3
Development Program Reporting .
PAR shall provide HANA and NovaDel at least quarterly with updates
regarding the progress of the Development Program and Regulatory
Approval process, including all planned and ongoing clinical trials
for the Licensed Product, planned and ongoing formulation and
stability studies, interaction with Regulatory Authorities, planned
and ongoing promotional advertising and other marketing efforts,
rolling forecasts of projected sales of each Licensed Product for
the upcoming twelve (12) months, and also shall advise HANA and
NovaDel of any unforeseen material problems or delays encountered
since the date of its last such report and any other information
reasonably requested by HANA or NovaDel with respect to the
development activities related to the Licensed Product undertaken
by PAR in such calendar quarter.
4.4
Development Costs .
PAR shall be solely responsible for all costs and expenses incurred
by it after the Effective Date relating to the development of the
Licensed Products for Exploitation in the Territory, including
costs and expenses, if any, incurred by NovaDel at in accordance
with Section 4.1.1.
4.5
Regulatory Records .
PAR
shall maintain records of its 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 development activities, and which shall be
retained by PAR for at least five (5) years after the termination
of this Agreement, or for such longer period as may be required by
Applicable Law. NovaDel shall have the right, during normal
business hours and upon reasonable notice, to inspect and copy any
such records; provided,
however, that NovaDel shall not have the right to conduct more than
one such inspection in any twelve (12)-month period.
ARTICLE 5
COMMERCIALIZATION OBLIGATIONS
5.1
Regulatory Compliance .
All Commercialization activities in respect of the Licensed Product
in the Territory shall be conducted by PAR in compliance with
Applicable Laws and the Regulatory Approval in the country of
sale.
5.2
Labeling and Patent Marking .
The Licensed Product shall be packaged by PAR and labeled in a
manner consistent with the requirements of the Regulatory
Authorities and all Applicable Laws in the country in which it will
be sold, and where legally permissible, shall identify any
applicable Patent Rights consistent with any patent marking
requirements.
5.3
Commercialization Efforts .
Following receipt of Regulatory Approval of the Licensed Product by
the FDA, PAR shall use Commercially Reasonable Efforts to Exploit
the Licensed Product in the United States. PAR shall have the right
to Exploit the Licensed Product in Canada; provided, however, that
if PAR does not use Commercially Reasonable Efforts to
Commercialize the Licensed Product in Canada within one hundred
eighty (180) days following Regulatory Approval by Health Canada,
then HANA may Commercialize the Licensed Product in Canada,
provided further, that, in such case, PAR shall be entitled to a
royalty of
[***] percent
(
[***] %)
of the Net Sales in Canada. In addition, and without limiting
PAR’s obligations under Section 0
or
this Section 0
,
PAR shall 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. PAR 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. PAR shall, at all times during
the Term after receipt of Regulatory Approval, 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 for
those formulations and indications for which PAR is commercializing
the Licensed Product. Should PAR fail to meet the above 'standard',
the NovaDel and PAR will discuss PAR’s continued commitment
to commercialize the Licensed Product and the termination of this
Agreement.
5.4
Trademarks .
PAR shall have the right and obligation to determine the trademark
and any other related logos, trade names, and similar source
identifiers that are created or selected for use to be used on and
with the Licensed Product, including the whether to use the
Licensed Trademark (collectively, the “
Product Trademarks ”).
With the exception of the Licensed Trademark, the Product
Trademarks shall not include any trademarks, logos, trade names or
similar source identifiers that are owned or licensed by HANA or
NovaDel as of the Effective Date.
ARTICLE 6
ROYALTIES AND OTHER CONSIDERATIONS
6.1
License Fee and Equity .
Simultaneously with the execution of this Agreement, PAR shall
purchase Five Million Dollars ($5,000,000) worth of shares of newly
issued HANA common stock at a price per share that reflects a
twenty-five percent premium to the then current market price of
HANA’s common stock pursuant to the terms and conditions of
that certain Stock Purchase Agreement between the Parties of even
date herewith (the “
Subscription Agreement ”).
The number of shares of HANA’s common stock issued to PAR
will be determined by dividing the sum of Five Million Dollars
($5,000,000) by one hundred twenty-five percent (125%) of the
weighted average closing price per share of HANA’s common
stock on the NASDAQ Global Market during the ten (10) business days
prior to the Effective Date. PAR represents that it is acquiring
the shares of common stock of HANA for investment purposes only and
covenants that it will not sell, transfer or otherwise dispose of
any such shares until the earliest of: (a) the one (1) year
anniversary of the Effective Date, (b) the filing of an NDA for the
Licensed Product, and (c) the termination of this Agreement.
PAR shall pay HANA for such shares by wire transfer of immediately
available funds upon execution and delivery of this Agreement (the
“
Lock-Up Period ”).
Following the expiration of the Lock-Up Period, the Investor
further agrees that, without the prior written consent of the
Company, it will not sell more than fifty percent (50%) of the
aggregate number of Shares purchased hereunder in any ninety (90)
day period until the first anniversary of the end of the Lock-Up
Period, at which time this further restriction shall no longer be
applicable.
6.2
Milestone Payments .
In addition to the preceding amounts, PAR shall also pay milestone
payments to HANA as follows:
6.2.1
[***] Dollars
($
[***] )
within ten (10) days following PAR’s receipt of Regulatory
Approval from the FDA of the NDA for the Licensed Product;
plus
6.2.2
If
Net Sales during a specified fiscal year equal at least
$
[***] in
the Territory, then PAR will pay to HANA
[***] Dollars
($
[***] )
within 60 days following the end of such year; plus
6.2.3
If
Net Sales during a specified fiscal year equal at least
$
[***] in
the Territory, then PAR will pay to HANA
[***] Dollars
($
[***] )
within 60 days following the end of such year; plus
6.2.4
If
cumulative Net Sales of the Licensed Product reaches
[***] Dollars
($
[***] )
within five (5) years following Regulatory Approval by the FDA of
the NDA, then PAR will pay to HANA
[***] Dollars
($
[***] )
within 60 days after obtaining such Net Sales threshold;
plus
6.2.5
If
cumulative Net Sales of the Licensed Product reaches
[***] Dollars
($
[***] )
within five (5) years following Regulatory Approval by the FDA of
the NDA, then PAR will pay to HANA
[***] Dollars
($
[***] )
within 60 days after obtaining such Net Sales
threshold.
6.3
Royalty Payments .
In addition to the milestone payments described above, PAR shall
pay to HANA royalty payments based on Net Sales of the Licensed
Product as follows:
6.3.1
PAR
shall pay to HANA amounts due to NovaDel as royalties under
the NovaDel-Hana License as follows:
6.3.1.1
[***] percent
(
[***] %)
of up to the first $
[***] of
Net Sales by PAR or any Affiliate during each fiscal year in the
Territory; plus
6.3.1.2
[***] percent
(
[***] %)
of Net Sales greater than $
[***] and
up to $
[***] by
PAR or any Affiliate during each fiscal year in the Territory;
plus
6.3.1.3
[***] percent
(
[***] %)
of Net Sales greater than $
[***] by
PAR or any Affiliate during each fiscal year in the
Territory.
6.3.2
After
cumulative Net Sales exceed
[***] Dollars
($
[***] )
within five (5) years following Regulatory Approval by the FDA of
the NDA, PAR shall pay to HANA royalty payments based on Net Sales
equal to
[***] percent
(
[***] %)
of Net Sales in excess of
[***] Dollars
($
[***] )
per Contract Year (in addition to the
[***] percent
(
[***] %)
royalty provided in Section 6.3.1.3).
6.3.3
All
royalties shall be payable to HANA on a calendar quarterly
basis, within forty-five (45) days after the end of each
calendar quarter. The conversion rate for payments under this
section, 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 this
section will apply.
6.3.4
Notwithstanding
anything to the contrary contained herein, any and all amounts
to be received by HANA
from
PAR pursuant to Section 6.3.1 shall be paid to a lock-box
account. Accordingly, the Parties agree that, within thirty
(30) days after the Effective Date, the Parties 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 HANA’s right, title and
interest under this Agreement (including without limitation
its right to receive payments of the sublicense fees and other
amounts payable by PAR hereunder) and in and to any lockbox
account(s) to which 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 the NovaDel-Hana License and (iii)
irrevocably instruct PAR to make all payments under this
Agreement directly to such lockbox account(s); provided,
however, that any payment obligation owed by PAR to HANA
pursuant to Section 6.3.1 shall be deemed paid immediately
upon delivery of such amount to the agreed-to lock box
account.
6.4
Royalty Term .
PAR’s royalty obligations under Section 6.3 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 Effective 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
Effective Date and (ii) 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 6.3 in such country shall be
reduced in accordance with the terms of Section 6.7.
6.5
Mode of Payment .
All payments to HANA under this Agreement shall be paid in United
States Dollars by wire transfer of immediately available funds to a
bank account in the United States as HANA may reasonably
designate.
6.6
Non-Refundable, Non-Creditable .
Subject to Sections 6.8
and
8.2, the amounts paid or payable under this Article 6 shall be
non-refundable and non-creditable against any other amounts due
NovaDel or HANA under this Agreement.
6.7
Reduction of Royalty .
In the event that, or from and after the date on which, (a) no
Valid Claim of a NovaDel Patent covering the Licensed Product
exists in a country in the Territory and (b) 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), the royalty payment set forth in Section 6.3
with respect to the Licensed Product in such country shall be
reduced by
[***] percent
(
[***] %).
In addition, if at any time during the Term the royalties owed by
HANA to NovaDel pursuant to the NovaDel-Hana License are reduced,
then (i) HANA shall promptly provide PAR with written notice of
such reduction and (ii) HANA and PAR shall amend this Article 6 to
reduce the royalties owed by PAR to HANA in the identical
manner.
6.8
Accounting .
The Parties acknowledge that any expenses or costs deducted from
Net Sales under this Agreement may be based upon accruals, which
accruals will be compliant with Generally Accepted Accounting
Principles (“
GAAP ”),
consistently applied; provided that when the actual results become
known relative to any accrued amount, any difference between the
actual results and the accrual is reported and accounted for in the
next payment due hereunder. To the extent that the difference
between such accruals and the actual results has led to an
underpayment, PAR shall pay HANA the amount of such underpayment
on
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