Exhibit 10.21
CONFIDENTIAL TREATMENT REQUESTED
EXECUTION COPY
AMENDED AND RESTATED LICENSE
AGREEMENT
(Extended Release Metformin Formulations —
Canada)
DEPOMED, INC.
a company organized under the laws
of California, USA
with offices at
1360 O’Brien Drive
Menlo Park,
California, 94025
AND :
BIOVAIL LABORATORIES
INTERNATIONAL SRL
a Barbados society with restricted liability organized under the
laws of Barbados
whose head office is
Chelston Park
Building 2, Collymore Rock
St. Michael BH1
Barbados, West Indies
Biovail – Depomed Amended and Restated
License Agreement
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
CONFIDENTIAL TREATMENT REQUESTED
Contents
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1.
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DEFINITIONS
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2
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2.
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DEVELOPMENT AND DEVELOPMENT
COSTS
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8
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3.
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DISCLOSURE OF INFORMATION AND
REPORTING
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8
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4.
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LICENSE OF PRODUCT
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8
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5.
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ROYALTIES
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10
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500MG PRODUCT ROYALTIES
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10
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1000MG PRODUCT ROYALTIES
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11
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REDUCTION OF ROYALTIES
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11
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ROYALTY REPORTS AND
PAYMENTS
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11
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RECORDS AND AUDITS
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13
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500MG PRODUCT
SUBSTITUTION
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13
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6.
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REGULATORY AFFAIRS
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14
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REGULATORY RESPONSIBILITY
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14
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ADVERSE REACTION REPORTS
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16
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WITHDRAWAL OF REGULATORY
APPROVAL
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16
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RIGHTS OF REFERENCE
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16
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7.
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TECHNOLOGY TRANSFER;
MANUFACTURING; BATCH RELEASE
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TECHNOLOGY TRANSFER TO
BLS
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8.
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PATENTS,
INFRINGEMENT
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17
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INFRINGEMENT
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17
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INFRINGEMENT OF THIRD PARTY
PATENTS
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19
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9.
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OWNERSHIP OF INVENTIONS AND
KNOW-HOW
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20
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OWNERSHIP OF INTELLECTUAL PROPERTY
RIGHTS
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20
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DISCLOSURE OF INVENTIONS
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21
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FILING AND PROSECUTION OF PATENT
APPLICATIONS BY BLS
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21
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FILING AND PROSECUTION OF PATENT
APPLICATIONS BY DEPOMED
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22
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i
CONFIDENTIAL TREATMENT REQUESTED
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10.
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CONFIDENTIALITY
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22
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11.
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REPRESENTATIONS AND WARRANTIES;
NON-COMPETITION; EXPORTATION
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24
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REPRESENTATIONS AND WARRANTIES OF
DEPOMED
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24
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MUTUAL REPRESENTATIONS AND
WARRANTIES
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25
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NON-COMPETITION
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26
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EXPORTATION OF 500MG
PRODUCT
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26
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12.
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INDEMNIFICATION
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27
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INDEMNIFICATION OF
DEPOMED
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27
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INDEMNIFICATION OF BLS
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28
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13.
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TERM
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29
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14.
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EXPIRY AND
TERMINATION
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29
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15.
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PUBLICITY
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31
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16.
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ASSIGNABILITY
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32
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17.
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NOTICES
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33
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18.
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FORCE MAJEURE
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34
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19.
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MISCELLANEOUS
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34
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PRIOR PAYMENT
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37
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THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
ii
CONFIDENTIAL TREATMENT REQUESTED
AMENDED AND RESTATED LICENSE
AGREEMENT
(Extended Release Metformin Formulations —
Canada)
THIS AMENDED AND RESTATED LICENSE AGREEMENT is
made as of the 13 th day of December, 2005, by and
between
DEPOMED, INC.
a company organized under the laws
of California, USA
with offices at
1360 O’Brien Drive
Menlo Park,
California, 94025
(Hereinafter referred to as “
Depomed ”)
AND:
BIOVAIL LABORATORIES
INTERNATIONAL SRL
a Barbados society with restricted liability organized under the
laws of Barbados,
whose head office is
Chelston Park
Building 2, Collymore Rock
St. Michael BH1
Barbados, West Indies
(Hereinafter referred to as “ BLS
”)
RECITALS
A.
Depomed and BLS (the successor in
interest to Biovail Laboratories Incorporated) are parties to that
certain Development and License Agreement, dated as of May 28,
2002, as amended as of April 27, 2004 (the “ Prior
Agreement ”).
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
B.
Pursuant to the Prior Agreement, the
Parties have developed the 500mg Product (as defined below) and
obtained regulatory approval to market the 500mg Product in the
Territory.
C.
Depomed and BLS desire to amend and
restate in part the Prior Agreement as set forth
herein.
NOW, THEREFORE, in consideration of the
agreements and covenants hereinafter set forth herein and intending
to be legally bound hereby, the parties hereto covenant and agree
as follows:
1.
DEFINITIONS.
The terms defined in this
Article 1 shall, for all purposes of this Agreement, have the
following meanings:
1.1
“ 500mg Product ”
shall mean the once-daily oral formulation of the Active Ingredient
in combination with the AcuForm Delivery Technology that is
the subject of NDS No. 091207, file number 9427-B1245-30 filed
with the TPD on April 21, 2004 (as such NDS may be
amended or supplemented subsequent to the Effective
Date).
1.2
“ 1000mg Approval
” shall mean the approval by the FDA of a supplemental new
drug application filed in accordance with the Supply Agreement for
approval of the 1000mg Product for Marketing in the USA.
1.3
“ 1000mg Product
” shall mean the once daily oral tablet formulation of the
Active Ingredient in a 1000 mg strength to be developed using
proprietary BLS drug delivery technology pursuant to the Supply
Agreement.
1.4
“ Active Ingredient
” shall mean the chemical compound known as metformin
HCl.
1.5
“ AcuForm Delivery
Technology ” shall mean Depomed’s delivery system
designed to be retained in the stomach for an extended period of
time while that delivery system delivers the incorporated drug or
drugs, and includes the delivery system described in the patents
and patent applications listed in Schedules 1.24(a) and
1.24(b) and any and all
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
improvements to that delivery
system. The AcuForm Delivery Technology was referred to as the
“GR System” in the Prior Agreement.
1.6
“ Affiliate ”
shall mean any corporation or other entity that directly, or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the designated party
but only for so long as such relationship exists. For the purposes
of this Section, “ Control ” shall mean
ownership of at least fifty percent (or such lesser percent as
may be the maximum that may be owned by foreign interests
pursuant to the laws of the country of incorporation) of the shares
of stock entitled to vote for directors in the case of a
corporation and at least fifty percent (or such lesser percent as
may be the maximum that may be owned by foreign interests
pursuant to the laws of the country of domicile) of the interests
in profits in the case of a business entity other than a
corporation.
1.7
“ Applicable Permits
” shall mean all permits or approvals necessary to market the
500mg Product in the Territory, including, without limitation,
Regulatory Approvals granted by the TPD.
1.8
“ Application for
Regulatory Approval ” shall mean an application made to a
Regulatory Authority in any country for permission to Market a
pharmaceutical product in that country.
1.9
“ BMS Settlement
Agreement ” shall mean that certain Settlement Agreement
and Release, dated as of November 22, 2002, by and between
Depomed and Bristol-Myers Squibb Company.
1.10
“ Clinical Information
” shall mean all in-vivo or clinical, pharmacology,
toxicology, safety and efficacy data, formulary submissions,
pharmaco-economic data, Phase I, II and III clinical data and
results, and other such information now or hereafter known
and
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
available to Depomed or BLS or their
Affiliates, whether generally known to others or not, relating to
the 500mg Product.
1.11
“ Distributor ”
shall mean an entity designated by BLS to perform its
distribution and Marketing activities with respect to the 500mg
Product in the Territory, in accordance with the terms of this
Agreement.
1.12
“ Effective Date
” shall mean the date first written on page 1 of this
Agreement.
1.13
“ FDA ” shall
mean the United States Food and Drug Administration or any
successor United States governmental agency performing similar
functions with respect to pharmaceutical products.
1.14
“ Final Judgment
” shall mean a judgment by a court of competent jurisdiction
that is unappealed (and the time for appealing has expired) or is
unappealable.
1.15
“ Invention ”
shall mean the 500mg Product, any improvement to the 500mg Product,
any new use of the 500mg Product, any new performance
characteristic of the 500mg Product, any new process used to
Manufacture the 500mg Product, or any step or steps in any such
process, and includes all formulations of the 500mg Product
developed pursuant to the Prior Agreement.
1.16
“ Know-How ”
shall mean all inventions, discoveries, trade secrets, improvements
and information not in the public domain, whether or not patented
or patentable (but excluding Patent Rights), together with all
experience, data, formulas, procedures and results, and
improvements thereon, now or hereafter developed or acquired by and
proprietary or licensed with right to sublicense to Depomed on the
date hereof or which are developed or acquired during the term of
and in connection with this Agreement, which relate to or are used
in conjunction with the development, manufacture or use of 500mg
Product.
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
1.17
“ knowledge ”
shall mean, with respect to Depomed, the actual knowledge of the
executive officers of Depomed, after reasonable inquiry directed to
such employees of Depomed who would reasonably be expected to have
knowledge of relevant matters.
1.18
“ Manufacture ”
shall mean to process, prepare, make, have made and analyze, and
Manufacturing and Manufactured shall have a
corresponding meaning.
1.19
“ Manufacturing Transfer
Agreement ” shall mean the Manufacturing Transfer
Agreement, dated as of the Effective Date, by and between Depomed
and BLS providing for the grant to Depomed of exclusive Marketing
rights in the United States to the 1000mg Product, and for the
grant of Manufacturing rights in the United States to the 1000mg
Product.
1.20
“ Market ” shall
mean to promote, distribute, package, label, market, advertise,
sell or offer to sell, and Marketing shall have a
corresponding meaning.
1.21
“ NDA ” shall
mean a New Drug Application or equivalent application for approval
to market submitted to the FDA.
1.22
“ Net Sales ”
shall mean the total of all amounts invoiced by BLS, its
Affiliates, Distributors and assigns for 500mg Product and 1000mg
Product, as applicable, sold to independent, unrelated third
parties in the Territory in bona fide arms-length transactions,
less the following deductions actually allowed and taken by such
third parties and not otherwise recovered by or reimbursed to BLS
or its Affiliates, sub-licensees and assigns: (i) trade, cash
and quantity discounts in such amounts as are customary in the
trade; (ii) rebates, credits or other reimbursements actually
paid; (iii) taxes on sales (such as sales or use taxes) to the
extent added to the sales price and set forth separately as such in
the total amount invoiced; (iv) value added taxes when
included as part of the sales price and not refunded to the
payor; (v) freight, insurance, and other transportation
charges to the extent added to the sales price and set forth
separately as such in the total amount invoiced; and
(vi) amounts repaid or credited by reason of rejections,
defects or returns or
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
because of retroactive price
reductions. Net Sales shall not include sales of a 500mg Product or
a 1000mg Product between or among BLS, its Affiliates,
sub-licensees or assigns.
1.23
“ Party ” shall
mean Depomed or BLS, and Parties shall mean Depomed and
BLS.
1.24
“ Patent Rights ”
shall mean any patent application or issued patent covering 500mg
Product or any improvement to 500mg Product or any methods for
making or using 500mg Product or any improvement to such methods,
which patents or patent applications are owned by or licensed to
Depomed as of the date hereof or which are developed or acquired by
or licensed to Depomed during the term of this Agreement, in the
Territory, including any addition, continuation,
continuation-in-part, or division thereof or any substitute
application thereof, any reissue or extension of any such patent,
and any confirmation patent, registration patent revalidation
patent, or patent of addition based on any such patent, and
includes without limitation the Canadian patents and patent
applications set forth in Schedule 1.24(a). “ Foreign
Patent Rights ” shall mean any patent application or
issued patent covering 500mg Product or any improvement to 500mg
Product or any methods for making or using 500mg Product or any
improvement to such methods, which patents or patent applications
are owned by or licensed to Depomed as of the date hereof or which
are developed or acquired by or licensed to Depomed during the term
of this Agreement, in the United States, including any addition,
continuation, continuation-in-part, or division thereof or any
substitute application thereof, any reissue or extension of any
such patent, and any confirmation patent, registration patent
revalidation patent, or patent of addition based on any such
patent, and includes without limitation the United States patents
and patent applications set forth in
Schedule 1.24(b).
1.25
“ Regulatory Data
” shall mean all information and data necessary to obtain or
maintain Regulatory Approval for 500mg Product in the Territory,
including post-approval reports, filings and submissions and shall
include, but not be limited to, any Clinical Information required
for that purpose.
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
1.26
“ Regulatory Approval
” shall mean the permission or consent granted by any
relevant Regulatory Authority for the Marketing of a 500mg Product
in the Territory, and includes all of the contents of the
Application for Regulatory Approval as approved by that Regulatory
Authority.
1.27
“ Regulatory Authority
” shall mean, in respect of any country, any government or
other agency responsible for the issuance of approval to Market
pharmaceutical products in or sold from that country, including
without limitation the TPD.
1.28
“ Substitute Product
” shall mean any once daily oral formulation containing
between 400 mg and 600 mg of Active Ingredient as the sole active
ingredient and utilizing technology other than the
AcuForm Delivery Technology and that does not infringe a Valid
Claim.
1.29
“ Supply Agreement
” shall mean the Supply Agreement, dated as of the Effective
Date, between Depomed and BLS relating, inter alia, to the 1000mg
Product.
1.30
“ Technical Information
” shall mean all Know-How, and all trade secrets, inventions,
data and technology relating to the 500mg Product, and any
improvements and modifications to any of the foregoing, and
includes, without limitation, processes and analytical methodology
used in the development, testing, analysis and manufacture of the
500mg Product, and medical, clinical, toxicological and other
scientific data relating to the 500mg Product.
1.31
“ Territory ”
shall mean the country of Canada.
1.32
“ TPD ” means the
Therapeutic Products Directorate — Health Canada or any
successor Canadian governmental agency performing similar functions
with respect to pharmaceutical products.
1.33
“ Valid Claim ”
shall mean a claim of (a) an unexpired issued patent falling
within Patent Rights, which claim shall not have been withdrawn,
cancelled, disclaimed or held invalid
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
by a court, tribunal, arbitrator or
governmental agency of competent jurisdiction in a final or
unappealed or unappealable decision or (b) of any patent
application that has not been cancelled, withdrawn or abandoned, or
has been pending for more than seven years.
2.
DEVELOPMENT AND DEVELOPMENT
COSTS
2.1
Depomed shall have no obligations to
perform, or incur any expense with respect to, any research or
development with respect to the 500mg Product.
3.
DISCLOSURE OF INFORMATION AND
REPORTING
3.1
During the term of this Agreement,
each Party shall disclose to the other, in confidence under the
terms of Article 10 hereof, Technical Information and Clinical
Information, and copies of correspondence with any Regulatory
Authority (whether inside or outside of the Territory), as the same
shall become available, including information and correspondence
relating to the safety and efficacy of 500mg Product and any
regulatory problems relating thereto, all to the extent necessary
or useful to enable the receiving Party to Manufacture or Market
the 500mg Product.
3.2
Appropriate representatives of the
Parties will meet (in person or by video or telephone conference)
from time to time, but at least quarterly, to discuss regulatory
affairs, marketing and commercialization of 500mg Product in Canada
and the United States. Within two (2) weeks after the
Effective Date, each Party shall designate a representative to
coordinate the meetings contemplated by this
Section 3.2.
4.
LICENSE OF PRODUCT
4.1
Depomed hereby grants to BLS an
exclusive license in the Territory under the Patent Rights,
Know-How and Technical Information, with the right, subject to
Section 4.3 , to grant sublicenses of the same scope as
the license granted by this Agreement, or to
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
appoint a Distributor, to
Manufacture and Market 500mg Product in, and import 500mg Product
into, the Territory.
4.2
Depomed hereby grants to BLS a
non-exclusive license under the Foreign Patent Rights, Know-How and
Technical Information, with the right, subject to Section 4.3
, to grant sublicenses of the same scope as the license
granted by this Section 4.2, to Manufacture 500mg Product in
the United States or Puerto Rico for export to the Territory for
sale in the Territory in compliance with this Agreement.
4.3
BLS may grant sub-licenses
under Section 4.1 or Section 4.2 with respect to the
Manufacturing of the 500mg Product (i) to any Affiliate of BLS
without consent, and (ii) to no more than two third parties,
simultaneously, with the prior written consent of Depomed, which
consent shall not be unreasonably delayed or withheld. BLS shall
not grant further sub-licenses without the consent of Depomed,
which may be granted in Depomed’s discretion. The
Parties acknowledge that 500mg Product will initially be
manufactured for BLS by MOVA Pharmaceutical Corporation (“
MOVA ”) pursuant to a supply agreement between BLS and
MOVA. Depomed acknowledges that BLS has granted a sublicense to
MOVA under the Prior Agreement and consents to the continuation of
that sub-license pursuant to Section 4.2 of this
Agreement.
4.4
BLS shall have the right to market
and sell 500mg Product under any trademark or trademarks that BLS
chooses and has the legal right to use, whether now or hereafter
acquired or developed. Nothing herein shall be deemed to give
either Party any rights to the trademarks of the other Party. BLS
may freely refer to the trademark “AcuForm” with
respect to 500mg Product so long as it is used in a form that
is approved by Depomed and protects the proprietary interests of
Depomed in such trademark. BLS shall endeavour to indicate in any
promotional and marketing materials for the 500mg Product that the
500mg Products incorporates the AcuForm Delivery Technology,
unless BLS determines in its sole discretion that the use of the
trademark “AcuForm” may infringe a third
party’s trademark in the Territory; provided, however, that
BLS may deplete its existing stock of
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
promotional and marketing materials
that does not contain any reference to the AcuForm Delivery
Technology.
5.
ROYALTIES
500mg Product
Royalties
5.1
In consideration for the license
granted herein, and subject to the other provisions of this
Article 5 of this Agreement, BLS shall pay to Depomed an
earned royalty of six percent of Net Sales which are Net Sales of
500mg Product. Notwithstanding the foregoing, the earned royalty
payable under this Agreement in respect of Net Sales which are Net
Sales of 500mg Product shall be increased to ten percent of such
Net Sales in the event that the 1000mg Approval is not obtained on
or before June 30, 2007 (whether or not the failure to obtain
the 1000mg Approval constitutes a breach or default under the
Supply Agreement), and shall apply to all Net Sales of the 500mg
Product made from [***] until 1000mg Approval is obtained.
If any delay in the obtaining of 1000mg Approval is due to
Depomed’s failure to comply with Section 2.8 of the
Supply Agreement, the increase in royalty shall not take effect on
[***] , but shall be delayed for a period of time equivalent
to the length of any delay that is due to Depomed’s
non-compliance with Section 2.8 of the Supply
Agreement.
5.2
BLS shall pay the earned royalties
required by Section 5.1, in respect of the Net Sales of the
500mg Product in the Territory until:
(a)
the expiry of [***] from the
first commercial sale of 500mg Product in the Territory;
or
(b)
the 500mg Product is no longer
covered by a Valid Claim ,
whichever is later.
5.3
If at any time during the term of
this Agreement, 500mg Product is not, or is no longer, covered by a
Valid Claim, but the [***] period referred to in
Section 5.2(a) has not
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
expired in the Territory, then the
Net Sales of 500mg Product in the Territory that are subject to
payment of earned royalty shall be reduced to one-half of such
actual Net Sales.
5.4
Upon the expiration of the
obligations of BLS to make the royalty payments required by
Sections 5.1, 5.2 or 5.3 in the Territory, the licenses granted to
BLS in Sections 4.1 and 4.2 shall become perpetual, fully paid-up,
and royalty free.
1000mg Product
Royalties
5.5
In consideration for the license
granted herein, and subject to the other provisions of this
Article 5 of this Agreement, BLS shall pay to Depomed an
earned royalty of one percent of Net Sales which are Net Sales of
1000mg Product.
5.6
BLS shall pay the earned royalties
required by Section 5.5, in respect of the Net Sales of the
1000mg Product in the Territory until the expiry of [***]
from the first commercial sale of the 1000mg Product in the
Territory.
Reduction of
Royalties
5.7
In the event that a court or
governmental agency compels BLS to grant a sub-license to any third
party for 500mg Product in the Territory under terms or conditions
more favorable than those contained herein, BLS shall automatically
have the benefit of the more favorable terms with respect to all
sales of 500mg Product in the Territory.
Royalty Reports and
Payments
5.8
Within ten (10) days after the
end of each calendar month, BLS shall deliver a report to Depomed
specifying the gross sales of the 500mg Product sold by BLS, its
Affiliates, sub-licensees or distributors in that calendar month in
the Territory.
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
5.9
Within fifteen (15) days after the
end of each calendar quarter, BLS shall submit to Depomed a report
setting forth separately the Net Sales of 500mg Product and the
1000mg Product sold during said calendar quarter in the Territory,
the calculation of earned royalties payable for such calendar
quarter, and the basis for any reduction in those earned royalties
taken pursuant to this Agreement. Earned royalty payments hereunder
shall be made within forty-five days following the end of each
calendar quarter, and each payment shall include royalties which
shall have accrued during said calendar quarter.
5.10
No multiple royalties shall be
payable because the 500mg Product, or the 1000mg Product, or their
respective manufactures, use or sale is or shall be covered by more
than one Patent Right.
5.11
The remittance of royalties payable
on Net Sales in the Territory shall be made to Depomed in United
States dollars at the free market rate of exchange of the currency
for the last business day of the calendar quarter for which the
report and payment referred to in Section 5.9 is applicable,
as published in the Wall Street Journal (New York edition), less
any withholding or transfer taxes which are applicable. BLS shall
supply Depomed with proof of payment of any taxes deducted from the
royalties payable to Depomed and paid on Depomed’s
behalf.
5.12
If the transfer or the conversion of
all or a part of the remittance into the United States dollar
equivalent in any such instance is not lawful or possible, the
payment of such part of the royalties shall be made by the
deposit thereof, in the currency of the country where the sale on
which the royalty was based was made, to the credit and account of
Depomed or its nominee in any commercial bank or trust company of
Depomed’s choice located in that country. Notification of
such choice of bank or trust company shall be given to Depomed at
least thirty days prior to the date that any payment is due. Prompt
notice of deposits by BLS shall be given to Depomed. Any tax burden
levied by any country on
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
payments due or made by BLS to
Depomed under this Agreement shall be borne by Depomed.
Records and Audits
5.13
BLS and its Affiliates shall keep
and maintain, and shall cause its Distributors and assigns to keep
and maintain, records of Net Sales. Such records shall be open to
inspection by Depomed or, in the case of Distributors and assigns,
by BLS on behalf of Depomed, at any mutually agreeable time during
normal business hours within two years after the royalty period to
which such records relate by an independent certified public
accountant (or the equivalent in countries other than the United
States) reasonably acceptable to BLS but selected by Depomed. Said
accountant shall have the right to examine the records kept
pursuant to this Agreement and report findings of said examination
of records to Depomed only insofar as it is necessary to evidence
any error on the part of BLS. This right of inspection shall
be exercised only once for any calendar year. The cost of such
inspection shall be borne by Depomed unless the result of such
examination is the determination that Net Sales have been
understated by at least three percent for any calendar year in
which event BLS shall bear the reasonable cost of such
inspection.
500mg Product
Substitution
5.14
If at any time during the Term of
this Agreement BLS determines that the 500mg Product should not be
Marketed in the Territory, BLS may Market, and authorize any
Affiliate of BLS to Market, a Substitute Product. BLS shall pay to
Depomed the royalties that would be required by this Article 5
if the Substitute Product were a 500mg Product, in respect of all
net sales of that Substitute Product by BLS or by its Affiliate,
calculated in a manner consistent with Section 1.22 of this
Agreement. Provided that BLS makes the payments required by this
Agreement in respect of such Substitute Product, BLS shall not
be
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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CONFIDENTIAL TREATMENT REQUESTED
deemed to be in default of its
obligations under this Agreement by reason of that substitution or
its failure to Market the 500mg Product.
6.
REGULATORY AFFAIRS
Regulatory
Responsibility
6.1
During the term of this Agreement,
BLS shall have full control and authority, with full responsibility
over, commercialization of 500mg Product in the Territory, and all
such activity shall be undertaken at BLS’s expense. BLS will
use, or will cause an Affiliate of BLS to use, commercially
reasonable efforts in undertaking investigations and actions
required to maintain appropriate governmental approvals to market
500mg Product in the Territory.
6.2
BLS shall bear responsibility for,
and shall bear all costs related thereto, to take such actions as
may be necessary, in accordance with accepted business
practices and legal requirements, to obtain and maintain the
authorization and/or ability to Market the 500mg Product in the
Territory. Notwithstanding the foregoing, BLS shall be entitled to
allow any Regulatory Approval or other authorization to Market the
500mg Product to expire or lapse, and to discontinue Marketing the
500mg Product, if, as a consequence of any changes to any
applicable laws or regulations, any Regulatory Authority requires
any changes to the Marketing of the 500mg Product, the
Manufacturing process for the 500mg Product, or to the 500mg
Product specifications that BLS does not want to make (each an
“ Unforeseen Requirement ”). If BLS discontinues
the Marketing of the 500mg Product as a result of an Unforeseen
Requirement, Depomed can terminate this Agreement with respect to
500mg Product, and itself Market the 500mg Product in the
Territory, upon reimbursement of BLS for all regulatory and other
fees associated with transfer of the 500mg Product to Depomed. BLS
shall notify Depomed at least ninety days in advance of
discontinuing the Marketing of the 500mg Product as a result of an
Unforeseen Requirement.
THE SYMBOL [***] IS USED TO INDICATE THAT A
PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTION.
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6.3
BLS shall have the responsibility,
and shall bear all costs related to, communications with any
government agencies to satisfy its requirements regarding the
authorization and/or continued authorization to Market the 500mg
Product in commercial quantities in the Territory. Depomed shall
promptly notify BLS of any inquiry or other communication that it
receives from the TPD concerning the 500mg Product. BLS shall
handle all communications with the TPD
