<PAGE>
EXHIBIT NO. 10.51
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
LICENSE AGREEMENT
BY AND BETWEEN
PFIZER INC.
AND
EYETECH PHARMACEUTICALS, INC.
Dated as of December 17, 2002
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ARTICLE 1
DEFINITIONS......................................................................
1
ARTICLE 2
LICENSES.........................................................................
14
2.1 Eyetech
Grants............................................................................
14
2.2 License Grant to
Eyetech..................................................................
16
2.3
Sublicensing..............................................................................
16
ARTICLE 3
BASE PAYMENTS AND PERFORMANCE
MILESTONES......................................... 17
3.1 Base
Payments.............................................................................
17
3.2 Performance
Milestones....................................................................
18
ARTICLE 4
REVENUE
SHARE....................................................................
21
4.1 Revenue
Share.............................................................................
21
4.2 Survival of Licenses After
Expiration of Royalty Term and After Expiration of
Co-Promotion
Term.........................................................................
23
4.3 Third Party
Royalties.....................................................................
23
ARTICLE 5
ACCOUNTING
AND PROCEDURES FOR
PAYMENTS........................................... 26
5.1 Sales Subject to Royalty
Obligations......................................................
26
5.2 Royalty Payments; Royalty
Reports; Pfizer Operating Profit................................
26
5.3 Currency Exchange; Late
Payments..........................................................
27
5.4 Withholding
Taxes.........................................................................
28
5.5
Audits....................................................................................
28
5.6 Blocked
Payments..........................................................................
29
ARTICLE 6
TECHNICAL AND OTHER
INFORMATION..................................................
29
6.1 Disclosure of Technical
Information.......................................................
29
6.2
Confidentiality...........................................................................
30
6.3 Publicity Related to this
Agreement.......................................................
30
6.4 Applicability of Obligations
to Affiliates, Employees, Directors, Agents,
Independent Contractors and
Consultants...................................................
31
ARTICLE 7
PATENTS..........................................................................
31
7.1 Third Party License
Agreements............................................................
31
7.2 Disclosure of Patent
Applications and
Proceedings......................................... 32
7.3 Prosecution and Maintenance;
Costs........................................................
33
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7.4 Third Party Infringement
Actions..........................................................
34
7.5 Patent Term
Extensions....................................................................
36
7.6 US Territory Intellectual
Property Infringement Claims....................................
37
7.7 ROW Territory Intellectual
Property Infringement Claims...................................
37
7.8 Ownership and Prosecution of
Patent Rights Included in the Collaboration
Intellectual
Property.....................................................................
37
ARTICLE 8
REPRESENTATIONS, WARRANTIES AND
COVENANTS........................................ 38
8.1 Eyetech Representations and
Warranties....................................................
39
8.2 Pfizer Representations and
Warranties.....................................................
44
8.3 Eyetech
Covenants.........................................................................
45
8.4 No Consequential or Punitive
Damages......................................................
46
ARTICLE 9
TERM.............................................................................
47
ARTICLE 10
TERMINATION......................................................................
47
10.1
Termination for
Convenience...............................................................
47
10.2
Termination for
Breach....................................................................
48
10.3
Breach of
Non-Competition
Obligations.....................................................
50
10.4
Effects of
Termination....................................................................
50
10.5
Non-Competition...........................................................................
52
10.6
Acquisitions Involving
Competing Products.................................................
54
10.7
Competing Products in
the
EU..............................................................
55
ARTICLE 11
DISPUTE
RESOLUTION...............................................................
55
11.1
Arbitration...............................................................................
55
11.2
No
Limitation.............................................................................
57
ARTICLE 12
MISCELLANEOUS....................................................................
57
12.1
Force
Majeure.............................................................................
57
12.2
Assignment................................................................................
57
12.3
Governing
Law.............................................................................
57
12.4
Jurisdiction..............................................................................
58
12.5
Notices...................................................................................
58
12.6
Entire Agreements;
Amendments.............................................................
59
12.7
Severability..............................................................................
60
12.8
Waivers...................................................................................
60
12.9
Binding
Effect............................................................................
60
12.10 Further
Assurances........................................................................
60
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12.11 Third
Party
Beneficiaries.................................................................
61
12.12
Performance by Subsidiaries and
Affiliates................................................
61
12.13
Counterparts..............................................................................
61
12.14
Headings..................................................................................
61
12.15
Offset....................................................................................
62
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EXHIBIT 1.8 -
COMPOUND
EXHIBIT 1.18 - EYETECH PATENT RIGHTS
EXHIBIT 8.1(f) -
CERTAIN
INTELLECTUAL PROPERTY MATTERS
EXHIBIT 8.1(i) -
FUNDING
SOURCES
EXHIBIT 8.1(j) -
STUDIES
iii
<PAGE>
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement") dated as of December 17,
2002
(the "Execution Date") between Pfizer Inc., a corporation organized
under the
laws of the state of Delaware, 235 East 42nd Street, New York, New
York 10017
("Pfizer"), and Eyetech Pharmaceuticals, Inc. ("Eyetech"), a
corporation
organized under the laws of the state of Delaware, 500 Seventh
Avenue, 18th
Floor, New York, New York 10018.
WHEREAS, Eyetech owns or licenses or may acquire rights under
certain
patents and patent applications, licenses to patents and patent
applications,
know-how, trade secrets and scientific and technical information
relating to the
aptamer known as Macugen;
WHEREAS, the Parties desire to co-promote products containing or
based
on the Macugen aptamer in the US Territory (as defined below);
and
WHEREAS, Pfizer desires to acquire from Eyetech exclusive rights
to
develop and commercialize products containing or based on the
Macugen aptamer in
the ROW Territory (as defined below).
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
Any capitalized terms used herein that are not expressly defined
in
this Agreement shall have the meanings set forth in the
Collaboration Agreement.
For purposes of this Agreement, the following definitions shall be
applicable:
1.1
"Affiliate" means any Person directly or indirectly controlled
by, controlling or under common control with, a Party, but only for
so long as
such control shall continue. For purposes of this definition,
"control"
(including, with correlative meanings, "controlled by",
<PAGE>
"controlling" and "under common control with") means, with respect
to a Person,
possession, direct or indirect, of (a) the power to direct or cause
direction of
the management and policies of such Person (whether through
ownership of
securities or partnership or other ownership interests, by contract
or
otherwise), or (b) at least 50% of the voting securities (whether
directly or
pursuant to any option, warrant or other similar arrangement) or
other
comparable equity interests. For the avoidance of doubt, neither of
the Parties
shall be deemed to be an "Affiliate" of the other.
1.2 "AMD
Product" means a Product developed for use in the
treatment of age-related macular degeneration.
1.3 "Approval"
means receipt from the applicable Regulatory
Authority of approval to market a drug in one or more
countries.
1.4
"Bankruptcy Code" means 11 U.S.C Sections 101-1330, as
amended.
1.5 "Cash
Flow" means, with respect to any Person (or any
combination of two or more Persons) for any fiscal period, such
Person's (or
such combination's) EBITDA for such fiscal period, less any
milestone payment
amounts received by such Person (or combination) pursuant to
Section 3.1(a) of
this Agreement included in such EBITDA and less any capital
expenditures paid by
such Person (or such combination) during such fiscal period.
1.6
"Collaboration Agreement" means the Collaboration Agreement
dated as of the date hereof between the Parties.
1.7
"Collaboration Intellectual Property" means Patent Rights and
Technical Information developed or acquired by either Party, or
jointly by the
Parties, or by their respective Affiliates, in the course of the
Parties' and
their respective Affiliates' activities pursuant to this Agreement
or the
Collaboration Agreement.
2
<PAGE>
1.8 "Compound"
means the anti-VEGF aptamer known as Macugen
(EYE001), as more specifically described in Exhibit 1.8, including
without
limitation metabolites or prodrugs thereof, and any hydrates,
conjugates, salts,
esters, isomers, polymorphs or analogues of any of the
foregoing.
1.9 "Control"
or "Controlled" means, with respect to any
intellectual property right, the possession (whether by ownership
or license) by
a Party (or by any Subsidiary of a Party) of the ability to grant
to the other
Party a license under such right without violating the terms of any
agreement
with any third party.
1.10
"Co-Promote" shall have the meaning ascribed to it in the
Collaboration Agreement.
1.11
"DME Product" means a Product developed for use in the
treatment of diabetic macular edema.
1.12
"EBITDA" means, with respect to any Person (or combination of
two or more Persons) for any fiscal period, an amount equal to the
sum of (a)
the Net Income of such Person (or such combination) for such fiscal
period plus
(b) depreciation, amortization, Interest Expense and taxes deducted
in
calculating such Net Income, plus (c) any extraordinary or
nonrecurring losses
deducted in calculating such Net Income, minus (d) any
extraordinary or
nonrecurring gains included in calculating such Net Income, all as
determined in
accordance with GAAP.
1.13
"Effective Date" means the HSR Clearance Date.
1.14
"EMEA" means The European Agency for the Evaluation of
Medicinal Products.
1.15
"Escrow Agent" means the third party financial institution
party to, and serving as escrow agent in accordance with, the
Escrow Agreement.
3
<PAGE>
1.16
"Escrow Agreement" means the escrow agreement entered into by
and among the Parties, and a third party financial institution in
accordance
with Section 3.1(c).
1.17
"EU" means the European Union, as it may be expanded from time
to time.
1.18
"Eyetech Patent Rights" means all Patent Rights, now or
hereafter during the Term, Controlled by Eyetech or its
Subsidiaries relating
to, or useful in connection with, the manufacture, use or sale of
the Compound
or the Products, including, without limitation, the patents and
patent
applications set forth on Exhibit 1.18, but excluding patents and
patent
applications claiming drug delivery devices, methods or technology
licensed by
any third party to Eyetech under any license agreement other than
the Gilead
License, the Shearwater License or the Isis License.
1.19
"Eyetech Technical Information" means all scientific or
technical information and related know-how and trade secrets, now
or hereafter
during the term of this Agreement, Controlled by Eyetech or its
Subsidiaries
relating to the Compound or the Products, including but not limited
to: (a)
medical, clinical, toxicological or other scientific data and (b)
processes and
analytical methodology useful in the development, testing,
analysis, manufacture
or packaging of the Compound or the Products (excluding drug
delivery know-how
and technology licensed by any third party to Eyetech under any
license
agreement other than the Gilead License, the Shearwater License or
the Isis
License).
1.20
"Field" means the prevention, treatment or control of all
ophthalmic diseases or conditions.
1.21
"Fixed Charge Coverage Ratio" means the ratio of:
(a) the
aggregate amount of EBITDA for the twelve (12)
month period ended on the last day of the most recently completed
fiscal quarter
referred to in clause (a)(i), (b)(i) or
4
<PAGE>
(c)(i), as applicable, of the definition of [**] (such four full
fiscal quarter
period being referred to herein as the "Prior Quarters") for which
financial
statements contained in an SEC Report have been filed with the SEC
or, where
Eyetech or any Person acquiring control of or merging with Eyetech
in connection
with a Change in Control is not required under applicable law to
file SEC
Reports, for which financial statements have been delivered to
Pfizer, to
(b) the
aggregate amount of Fixed Charges of such Person
for the Prior Quarters.
In addition to and without limitation of the foregoing, for
purposes of this
Section 1.21, in the case of a Change in Control of Eyetech,
"EBITDA" and "Fixed
Charges" shall be calculated as if such Change in Control occurred
during the
most recently completed Prior Quarter after giving effect on a pro
forma basis
for the period of such calculation to, without duplication,
Interest Expense
with respect to Indebtedness and transaction fees incurred with
respect to the
transactions related to such Change in Control of Eyetech and any
Person that
acquires control of Eyetech or with whom Eyetech merges in such
Change in
Control (and the application of the net proceeds thereof) during
the period
commencing on the first day of the Prior Quarters to and including
the last day
of the Prior Quarters (the "Reference Period"), all as if such
incurrence (and
application) and expense occurred on the first day of the Reference
Period.
Furthermore, if interest on any Indebtedness incurred with respect
to the
transactions related to such Change in Control may optionally be
determined at
an interest rate based upon a factor of a prime, LIBOR, or similar
rate, a
eurocurrency interbank offered rate, or other rates, then the
interest rate in
effect on the date of such transactions will be deemed to have been
the interest
rate in effect on such Indebtedness during the Reference
Period.
5
<PAGE>
1.22
"Fixed Charges" means, with respect to any Person (or any
combination of two or more Persons) for any fiscal period, such
Person's (or
such combination's) (a) Interest Expenses and (b) dividends paid by
such Person
(or such combination) during such fiscal period, all as determined
in accordance
with GAAP.
1.23
"Generic Competition" shall exist during a given calendar
quarter with respect to a Product in any country in the ROW
Territory if, during
such calendar quarter, one or more Generic Products shall be
commercially
available in such country and shall have, in the aggregate, a [**]
percent
([**]%) or more market share of the aggregate of (Products and
Generic Products)
(based on data provided by IMS International, or if such data is
not available,
such other reliable data source as reasonably determined by Pfizer
and agreed by
Eyetech (such agreement not to be unreasonably withheld)) as
measured by unit
sales. In the event IMS International data (or such other agreed
data source) is
not sufficient to determine the percentage market share for each
country in the
EU, the percent market share for the EU countries for which data is
not
available will be deemed to be the average percent market share for
those EU
countries in which the data is available.
1.24
"Generic Products" mean, with respect to a Product
commercialized by Pfizer in a country, products (other than
Products
commercialized by Pfizer pursuant to this Agreement) that (a)
contain the same
active chemical entity(ies) as contained in such Product and (b)
have the same
therapeutic benefit as such Product.
1.25
"Gilead License" means the Licensing Agreement dated as of
March 30, 2000, by and among Eyetech, Gilead Sciences, Inc.
("Gilead") and
NeXstar Pharmaceuticals, Inc., as amended from time to time.
6
<PAGE>
1.26
"Indebtedness" means (a) indebtedness for borrowed money; (b)
the deferred price of property or services (which shall not include
ordinary
course of business payables); (c) obligations evidenced by notes,
bonds,
debentures, mortgages or similar instruments; (d) capital or
finance lease
obligations or hire purchase arrangements; (e) receivables sold or
discounted
(other than on a non-recourse basis); (f) any amount raised under
any other
transaction (including any forward sale or purchase agreement)
having the
commercial effect of a borrowing; and (g) the amount of any balance
sheet
liability in respect of any guarantee or indemnity for any of the
items referred
to in paragraphs (a) to (f) above.
1.27
"Interest Expense" means, for any period, without duplication,
the sum of (a) the interest expense of such Person for such period
as determined
on a consolidated basis in accordance with GAAP, including, without
limitation,
(i) any amortization or accretion of debt discount, (ii) the net
cost under any
hedge instrument, (iii) the interest portion of any deferred
payment obligation,
and (iv) all accrued interest; (b) the interest component of
capitalized lease
obligations determined on a consolidated basis in accordance with
GAAP; and (c)
that portion of all operating lease rentals representative of an
interest factor
(which shall be deemed to be equal to 1/3 of all operating lease
rentals).
1.28
"Isis License" means the License Agreement dated as of
December 31, 2001, by and between Eyetech and Isis Pharmaceuticals,
Inc.
("Isis"), as amended from time to time.
1.29
"Law" or "Laws" means all laws, statutes, rules, Codes,
regulations, orders, judgments and/or ordinances of any
Governmental Authority.
1.30
"Launch" means the initial shipping of a Product as a, or for,
commercial sale to an unaffiliated third party, excluding any
shipping for test
marketing, clinical trial purposes or compassionate or similar
use.
7
<PAGE>
1.31
"[**]:
(a) at any given
time, both (i) Eyetech's Quarterly Cash
Flow for each of Eyetech's [**] most recently completed fiscal
quarters [**]
and (ii) [**] for the [**] period ended on the last day of the most
recently
completed fiscal quarter referred to in clause (i) has been equal
to or greater
than [**];or
(b) on the date
of [**], both (i) the Quarterly Cash Flow
of the combination of [**] in connection with such [**] for each of
such [**]
most recently completed fiscal [**] quarters [**] and (ii) the [**]
period
ended on the last day of the most recently completed fiscal quarter
referred to
in clause (i) has been equal to or greater than [**]; or
(c) at any given time
[**], both (i) the Quarterly Cash Flow
[**] in connection with such [**] as to periods [**] for each of
such [**} most
recently completed fiscal quarters [**] and (ii) the [**] as to
periods [**]
period ended on the last day of the most recently completed fiscal
quarter
referred to in clause (i) has been equal to or greater than [**];
or
(d) [**] pursuant to
Section 17.11 of the Collaboration
Agreement.
As used in this Section 1.31 and the other provisions of this
Agreement relating
to the defined terms used in this Section 1.31, (x) "fiscal
quarters" shall
refer to full calendar quarters or successive periods of 13 weeks,
as applicable
and [**] under this Agreement and the Collaboration Agreement [**]
immediately
prior to the [**] related to such [**], but otherwise will include
only [**] in
connection with or as part of [**].
Notwithstanding anything to the contrary contained herein, if any
Quarterly
Cash Flow [**] referenced above is derived from financial
statements for any
completed fiscal year ended on or before the last day of the most
recently
completed fiscal quarter for which the Quarterly Cash Flow [**] is
computed for
the purpose of [**] and either (a) such financial statements for
such completed
fiscal year are not accompanied by an audit opinion of a
nationally
recognized independent accounting firm or (b) the audit opinion
accompanying
such financial statements contains a going concern qualification,
then [**]
shall be deemed to exist based upon any such Quarterly Cash Flow
[**].
1.32
"Major Country" means France, Germany, Italy, Spain or the
United Kingdom.
1.33
"MEEI/Draper License" means the License Agreement dated as of
April 4, 2002, by and among Eyetech, The Massachusetts Eye and Ear
Infirmary
("MEEI") and The Charles Stark Draper Laboratory, Inc. ("Draper"),
as amended
from time to time.
1.34
"NDA" means a New Drug Application filed with the FDA with
respect to a Product.
1.35
"Net Income" means, with respect to any Person (or any
combination of two or more Persons) for any fiscal period, the
consolidated net
income (or loss) of such Person (or such combination on a pro forma
basis), all
as determined in accordance with GAAP.
1.36
"Net Sales"
means the gross amounts billed or invoiced by
Pfizer, its Affiliates and sublicensees for Products in the ROW
Territory, less
the following deductions:
(a) trade,
quantity and cash discounts allowed, but
expressly excluding discounts or allowances offered as part of a
package of
products that includes a Product sold by Pfizer, its Affiliates or
sublicensees;
8
<PAGE>
(b) refunds,
chargebacks and any other allowances which
effectively reduce the net selling price;
(c) actual
product returns, credits and allowances
allowed to customers, and actual bad debts;
(d) rebates
actually paid or credited to any governmental
agency (or branch thereof) or to any third party payor,
administrator or
contractee;
(e) discounts
mandated by, or granted to meet the
requirements of, applicable state, provincial or federal law,
wholesaler,
including required chargebacks and retroactive price
reductions;
(f)
transportation, freight, postage charges and other
charges, such as insurance, relating thereto, in each case included
as a
specific line item on an invoice to such third parties; and
(g) taxes,
excises or other governmental charges upon or
measured by the production, sale, transportation, delivery or use
of goods, in
each case included as a specific line item on an invoice to such
third parties.
If any such sales to third parties are made in transactions that
are
not at arm's length between the buyer and the seller, then the
gross amount to
be included in the calculation of Net Sales shall be the amount
that would have
been invoiced had the transaction been conducted at arm's length.
Such amount
that would have been invoiced shall be determined, wherever
possible, by
reference to the average selling price of the relevant Product in
arm's-length
transactions in the relevant country.
If Pfizer, its Affiliate or sublicensee sells a Product in
unfinished
form to a third party for resale, then the gross amount to be
included in the
calculation of Net Sales arising from such sale
9
<PAGE>
shall be the amount invoiced by the third party upon resale, in
lieu of the
amounts invoiced by Pfizer, its Affiliates or sublicensee when
selling the
Product in unfinished form. Otherwise, where Pfizer, its Affiliate
or
sublicensee sells a Product in finished form to a third party that
does not
require a sublicense under the Eyetech Patent Rights for further
resale (each
such third party hereinafter a "Distributor"), the amount to be
included in the
calculation of Net Sales shall be the price invoiced from Pfizer or
its
Affiliate or sublicensee to the third party, not the amount
invoiced by the
third party upon resale.
If, in addition to or in lieu of a transfer price paid for
quantities
of Product supplied, any Distributor provides consideration to
Pfizer, its
Affiliate or sublicensee in connection with any Product or the
Distributor's
rights or relationship with Pfizer, its Affiliate or sublicensee in
relation
thereto, then such consideration shall be included in the
calculation of Net
Sales in the Quarter in which it becomes due to Pfizer or its
Affiliate or
sublicensee (as applicable). Notwithstanding the foregoing, amounts
received by
Pfizer, or its Affiliates or sublicensees, for the sale of Products
among Pfizer
and its Affiliates or sublicensees for resale shall not be included
in the
computation of Net Sales hereunder.
Net Sales shall be determined from books and records maintained
in
accordance with GAAP, consistently applied throughout the
organization and
across all products of the entity whose sales of Product are giving
rise to Net
Sales.
1.37
"Party" means either Eyetech or Pfizer; "Parties" means both
Eyetech and Pfizer.
1.38
"Patent Rights" means the rights and interest in and to all
issued patents and pending patent applications in any country in
the Territory,
including, without limitation, all divisionals, continuations,
renewals,
continuations-in-part, patents of addition, supplementary
protection
certificates, extensions, registrations or confirmation patents and
reissues
thereof.
10
<PAGE>
1.39
"Person" means any natural person or any corporation, company,
partnership, joint venture, firm or other entity, including without
limitation a
Party.
1.40
"Pfizer Patent Rights"
means all Patent Rights, Controlled by
Pfizer or its Subsidiaries as of the Effective Date or developed or
acquired by
Pfizer or its Subsidiaries in the course of the activities
contemplated by this
Agreement or the Collaboration Agreement, relating to, or useful in
connection
with, the manufacture, use or sale of the Compound or the
Products.
1.41
"Pfizer Technical Information" means all scientific or
technical information and related know-how and trade secrets,
Controlled by
Pfizer or its Subsidiaries as of the Effective Date or developed or
acquired by
Pfizer or its Subsidiaries in the course of the activities
contemplated by this
Agreement or the Collaboration Agreement, including but not limited
to: (a)
medical, clinical, toxicological or other scientific data and (b)
processes and
analytical methodology useful in the development, testing,
analysis, manufacture
or packaging of the Compound or the Products.
1.42
"Product Operating Profit" means Net Sales less the
Product-related costs attributable to the following: cost of goods
sold; third
party royalties; advertising and promotion expenses, including but
not limited
to Product samples, speaker programs and market research; field
force costs,
including but not limited to field aids; continuing medical
education programs;
research and development; destroyed returns, destroyed inventory
and other
salvage; and other direct expenses relating to the manufacture,
promotion and
sale of the Product, including but not limited to direct legal
expenses.
1.43
"Products" means any product, which (a) contains or is based
on the Compound, either alone or in combination with one or more
other
therapeutically active substances, and (b) is for use in the Field;
including
for the avoidance of doubt any AMD Product, DME Product or
11
<PAGE>
other product developed for any new indication in the Field or as a
new
un-pegylated formulation of any such AMD Product, DME Product or
other product;
and which product either (x) if manufactured, used, sold, offered
for sale, or
imported would, in the absence of the licenses granted hereunder,
infringe a
Valid Claim, or (y) utilizes Eyetech Technical Information or
Collaboration
Intellectual Property in its manufacture, use or development.
1.44
"Quarter" means each of the periods ending on each of the four
(4) thirteen (13) week periods as used by Pfizer as reported in its
filings with
the Securities and Exchange Commission, the first commencing on
January 1 of any
year. For sake of clarification, outside the United States, Net
Sales are
computed on each of four (4) thirteen (13) week periods, the first
commencing on
December 1 of any year.
1.45
"Quarterly Cash Flow" means, with respect to any Person (or
any combination of two or more Persons) for any fiscal quarter,
such Person's
(or such combination's) Cash Flow for such fiscal quarter.
1.46
"Regulatory Authority" means any Governmental Authority,
including without limitation EMEA or FDA, with responsibility for
granting any
licenses or approvals (with the exception of price approvals)
necessary for the
marketing and sale of pharmaceutical products in any country.
1.47
"Royalty Term" means, on a country-by-country and
Product-by-Product basis, the period commencing on the Effective
Date and ending
on the latest date on which such Product is covered by a Valid
Claim, or fifteen
(15) years from the Launch of such Product in such country,
whichever is later.
1.48
"ROW Territory" means all countries in the world outside the
US Territory.
12
<PAGE>
1.49
"SEC Reports" means all annual, quarterly or periodic reports
and registration statements required to be filed with the
Securities and
Exchange Commission ("SEC") under applicable law.
1.50
"Shearwater License" means the License, Manufacturing and
Supply Agreement dated as of February 5, 2002, by and between
Eyetech and
Shearwater Corporation ("Shearwater"), as amended from time to
time.
1.51
"Subsidiary" means, with respect to a Party, a majority or
wholly owned direct or indirect subsidiary of such Party.
1.52
"Technical Information" means Eyetech Technical Information or
Pfizer Technical Information.
1.53
"Term" means the period commencing on the Effective Date and
ending on the expiration of the last-to-expire Royalty Term.
1.54
"Territory" means the US Territory and the ROW Territory.
1.55
"US Territory" means the United States of America, including
its territories, possessions and Puerto Rico.
1.56
"Valid Claim" means any claim from (a) an issued and unexpired
patent included within the Eyetech Patent Rights or the
Collaboration
Intellectual Property (other than, in the case of Collaboration
Intellectual
Property, claims of Patent Rights that claim inventions solely
owned by Pfizer
or solely licensed by Pfizer) that has not been revoked or held
unenforceable or
invalid by a decision of a court or other Governmental Authority of
competent
jurisdiction, and that has not been disclaimed, denied or admitted
to be invalid
or unenforceable through reissue or disclaimer or otherwise; or (b)
a patent
application included within the Eyetech Patent Rights or the
Collaboration
Intellectual Property (other than, in the case of Collaboration
Intellectual
13
<PAGE>
Property, claims of Patent Rights that claim inventions solely
owned by Pfizer
or solely licensed by Pfizer) that has not been cancelled,
withdrawn or
abandoned or been pending for more than [**] years.
1.57
"Year" means a calendar year.
ARTICLE 2
LICENSES
2.1 Eyetech
Grants. Subject to the terms of this Agreement,
Eyetech hereby grants to Pfizer, and Pfizer hereby accepts:
(a) an
exclusive (even as to Eyetech) license under the
Eyetech Patent Rights and Eyetech Technical Information, and under
Eyetech's
rights in Collaboration Intellectual Property, to develop, make,
have made, use,
sell, offer for sale, import, and have imported Products in the ROW
Territory
and a nonexclusive license under the Eyetech Patent Rights and
Eyetech Technical
Information, and under Eyetech's rights in Collaboration
Intellectual Property,
to use, make and have made Products in the US Territory solely for
export to and
sale in countries in the ROW Territory; and
(b) an
exclusive (even as to Eyetech) license under the
Eyetech Patent Rights and Eyetech Technical Information, and under
Eyetech's
rights in Collaboration Intellectual Property, to develop, make,
have made, use,
sell, offer for sale, import, and have imported Products in the US
Territory,
[**] under the Eyetech Patent Rights and Eyetech Technical
Information, and
under Eyetech's rights in Collaboration Intellectual Property, to
develop, make,
have made, use, sell, offer for sale, import, and have imported
Products in the
US Territory [**}; provided that [**], as set forth in this Section
2.1(b) [**]
other than in accordance with the Collaboration Agreement; provided
further that
if, [**] set forth in Section 1.31(b)[**] in this Section
2.1(b)[**] at such
time [**] set forth in Section 1.31(d) [**] set forth in Section
1.31(d) [**].
The [**] license set forth in this Section 2.1(b) is subject to all
of Pfizer's
obligations under the Collaboration Agreement so long as the
Collaboration
Agreement shall remain in effect.
14
<PAGE>
(c) The
licenses granted by Eyetech in Sections 2.1(a)
and 2.1(b) are subject to a retained right of Eyetech to perform
Eyetech's
obligations and exercise Eyetech's rights under the Collaboration
Agreement and
the Other Product-Related Agreements.
(d) The
licenses granted in Sections 2.1(a) and (b)
include sublicenses, as applicable. The sublicenses granted by
Eyetech to Pfizer
in Sections 2.1(a) and (b) are subject to the following terms of
the Gilead
Agreement, the Isis Agreement and the Shearwater Agreement,
respectively:
(i) Sections
2.4, 2.5, 3.6, 3.8, 6.3 and 6.7 of
the Gilead Agreement;
(ii)
Sections 4.3 and 4.4 of the Isis Agreement;
and
(iii)
Sections 2.3, 3.2, 3.5, 4.1, 4.9, 8.1,
8.2.3, 9.1 and 9.6 of the Shearwater Agreement.
(e) Any sublicensee
obligations required by the Gilead
Agreement, the Isis Agreement and the Shearwater Agreement to be
included in a
sublicense thereunder, including without limitation any required
provision
making the applicable third party licensor a third party
beneficiary of any
sublicense thereunder, shall be deemed to be included in this
Agreement.
(f) The
licenses granted by Eyetech in Sections 2.1(a)
and 2.1(b) with respect to the patents referenced in the third
paragraph of
Exhibit 8.1(i) hereof are subject to 35 USC Sections 200-212, 37
CFR Section 401
et seq. and applicable governmental implementing regulations. Any
right granted
in this Agreement greater than that permitted under 35 USC Sections
200-212 or
37 CFR Section 401 et seq. shall be subject to modification as may
be required
to conform to the provisions of those statutes. All rights reserved
to the
United States government and others under 35 USC Sections 200-212
and 37 CFR
Section 401 shall remain and shall in no way be affected by this
Agreement.
15
<PAGE>
2.2 License
Grant to Eyetech. Pfizer hereby grants to Eyetech a
nonexclusive right and license (and sublicense, as applicable)
under the Pfizer
Patent Rights and Pfizer Technical Information, and under Pfizer's
rights in
Collaboration Intellectual Property, solely to Co-Promote the
Products in the US
Territory and to exercise Eyetech's rights and perform Eyetech's
obligations
under this Agreement and the Collaboration Agreement.
2.3
Sublicensing.
(a) The
license in Section 2.1(a) above includes the
right by Pfizer to grant sublicenses; provided that, Eyetech's
prior written
consent, not to be unreasonably withheld or delayed, shall be
required for
sublicenses to non-Affiliates under such license. The license in
Section 2.1(b)
above does not include any right by Pfizer to grant sublicenses
without
Eyetech's prior written consent.
(b) Any
sublicense granted by Pfizer must be granted
pursuant to a written agreement that subjects the sublicensee to
all relevant
restrictions, limitations and obligations in this Agreement and in
the
Collaboration Agreement.
(c) Pfizer
shall be responsible for failure by its
sublicensees to comply with, and Pfizer guarantees to Eyetech the
compliance by
each of its sublicensees with, all relevant restrictions,
limitations and
obligations in this Agreement and in the Collaboration
Agreement.
(d) In the
event of a material default by any sublicensee
under a sublicense agreement, Pfizer will inform Eyetech and take
such action,
after consultation with Eyetech, that in Pfizer's reasonable
business judgment
is required to address such default.
(e) Pfizer
shall provide Eyetech with a copy of each
sublicense agreement, in final executed form, that Pfizer enters
into in
accordance with this Section 2.3 not later than five (5) days after
the
execution of such sublicense agreement; provided that Pfizer may
redact the
16
<PAGE>
financial terms from such copies if permitted under the applicable
requirements
of the Gilead License, the Shearwater License and the Isis License
requiring
delivery to Gilead, Shearwater or Isis of copies of sublicense
agreements.
ARTICLE 3
BASE PAYMENTS AND PERFORMANCE MILESTONES
In consideration of the licenses granted to Pfizer hereunder and
the
disclosure to Pfizer of Eyetech Technical Information, and subject
to the
provisions of this Agreement, Pfizer shall pay to Eyetech Base
Payments and
Performance Milestones as follows:
3.1 Base
Payments.
(a)
Subject to the
terms and conditions of this
Agreement, Pfizer shall pay to Eyetech the following payments (the
"Base
Payments"):
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Event
Payment
------------------------------------------------------------------------------
<S>
<C>
(i) Signing of
this Agreement.
$75,000,000
------------------------------------------------------------------------------
(ii)
Acceptance for filing of [**] Product.
$[**]
------------------------------------------------------------------------------
(iii)
Acceptance for filing of [**] Product.
$[**]
------------------------------------------------------------------------------
(iv)
Approval of [**].
$[**]
------------------------------------------------------------------------------
(v) Approval
of [**].
$[**]
------------------------------------------------------------------------------
(vi)
Filing of [**].
$[**]
------------------------------------------------------------------------------
(vii)
Launch of [**].
$[**]
------------------------------------------------------------------------------
(viii) Launch of
[**].
$[**]
------------------------------------------------------------------------------
(ix)
Launch of [**].
$[**]
------------------------------------------------------------------------------
(x) Launch of
[**].
$[**]
------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
The Parties understand and agree that the payments referenced in
this Section
3.1(a) are subject to the terms and conditions set forth in
Sections 3.1(b) and
(c).
(b) The
signing fee set forth in Section 3.1(a)(i) shall
be made as set forth in Section 3.1(c) below. The payments pursuant
to Sections
3.1(a)(ii) through 3.1(a)(v) shall be made within fifteen (15) days
after
Pfizer's receipt from Eyetech of copies of the written
notifications received by
Eyetech from [**]. The payments pursuant to Sections 3.1(a)(vi)
through
3.1(a)(x) shall be made within fifteen (15) days after the date on
which the
applicable event has been achieved.
(c) Payment of
the $75,000,000 signing fee will be made
by Pfizer no later than five (5) Business Days after the date of
execution of
this Agreement to an account of a mutually satisfactory financial
institution,
which will serve as Escrow Agent, pending occurrence of the
Effective Date. All
amounts held in such account shall be held for the benefit of
Eyetech and
Eyetech will receive interest accrued in accordance with the terms
of the Escrow
Agreement. Upon the occurrence of the Effective Date, such amounts
shall be
released to Eyetech in accordance with the terms of the Escrow
Agreement.
3.2
Performance Milestones.
(a) Subject to
the terms and conditions of this
Agreement, Pfizer shall pay to Eyetech the following payments
(each, a
"Performance Milestone Payment") in respect of each of the
following milestone
events (each, a "Performance Milestone"):
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Milestone Event
Payment
Amount
--------------------------------------------------------------------------------------------------------
<S>
<C>
(i) In the
event Net Sales in the [**] equal or exceed $[**] in any Year.
$[**]
--------------------------------------------------------------------------------------------------------
(ii)
In the event Net Sales in the [**] equal or exceed $[**] in any
Year.
$[**]
--------------------------------------------------------------------------------------------------------
(iii) In
the event Net Sales in the [**] equal or exceed $[**] in any Year.
$[**]
--------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<S>
<C>
--------------------------------------------------------------------------------------------------------
(iv)
In the event Net Sales in the [**] equal or exceed $[**] in any
Year.
$[**]
--------------------------------------------------------------------------------------------------------
(v)
In the event Net
Sales in the [**] equal or exceed $[**] in any Year.
$[**]
--------------------------------------------------------------------------------------------------------
</TABLE>
The Parties understand and agree that all of the Performance
Milestone Payments
referenced in this Section 3.2(a) are subject to the terms and
conditions set
forth in Sections 3.2(b) and (c).
(b)
Performance Milestone Payments shall be due and
owing, on or before the date sixty (60) days after the end of the
applicable
Year, commencing with the first full Year following (or commencing
concurrently
with, if Launch occurs on January 1 of any Year) the first Launch
of an AMD
Product in the US Territory and for the subsequent [**] Years
immediately
following such first full Year.
(c) Subject to
the limitation set forth in Section
3.2(b), each Performance Milestone Payment shall be paid in annual
installments
of twenty percent (20%) of the total payment amount over five (5)
Years,
commencing with the first Year in which such Performance Milestone
is achieved
and continuing for each of the immediately following four (4) Years
during which
the Performance Milestone is achieved. It is agreed and understood
that no
Performance Milestone Payment (taking all annual installments as a
single
Performance Milestone Payment) shall be payable more than once. For
the
avoidance of doubt, the following examples are provided to
illustrate how
Performance Milestone Payments might be paid:
Example #1
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Year 1
Year 2
Year 3
Year 4 Year
5
Year 6
------------------------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
<C>
<C>
<C>
Aggregate Net Sales
$[**]
$[**]
$[**]
$[**]
$[**]
$[**]
Level [**]
------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<S>
<C>
<C>
<C>
<C>
<C>
<C>
------------------------------------------------------------------------------------------------------------
Performance Milestone $[**]
$[**]
$[**]
$[**]
$[**]
$[**]
Payment to Eyetech
------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
Example #2
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Year 1 Year 2
Year 3
Year 4
Year 5
----------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
<C>
<C>
Aggregate Net Sales Level [**]
>$[**] >$[**]
>$[**]
>$[**]
>$[**]
<$[**] <$[**]
<$[**]
<$[**]
----------------------------------------------------------------------------------------------
>$[**]>$[**]
[**]
[**]
[**]
[**]
[**]
>$[**]
>$[**]
>$[**]
----------------------------------------------------------------------------------------------
Total Performance Milestone
$[**]
$[**]
$[**]
$[**]
$[**]
Payments to Eyetech
----------------------------------------------------------------------------------------------
</TABLE>
For avoidance of doubt, the five (5) consecutive Year period during
which each
Performance Milestone Payment is payable in increments may be a
different five
(5) consecutive Year period for each of the respective Performance
Milestone
Payments (e.g., in Example #2 above, the Performance Milestone
Payment for
achieving an aggregate annual Net Sales level [**] of $[**] would
continue to be
payable in installments in years 6 and 7 if the Performance
Milestone were
achieved in such years notwithstanding the fact that the
Performance Milestone
Payment for achieving an aggregate annual Net Sales level [**] of
$[**] would no
longer be payable after year 5).
ARTICLE 4
REVENUE SHARE
4.1 Revenue
Share. In consideration of the licenses granted to
Pfizer hereunder and the disclosure to Pfizer of Eyetech Technical
Information,
and subject to the terms and conditions of this Agreement, Pfizer
shall share
revenues with Eyetech based on Net Sales by Pfizer, its Affiliates
and
sublicensees [**] in accordance with the following:
21
<PAGE>
(a) EU. With
respect to Net Sales in the EU in each Year,
Pfizer shall pay Eyetech the greater of (i) twenty percent (20%) of
Product
Operating Profit and (ii) (x) for aggregate Net Sales of all
Products in
such Year below $1 billion, a royalty of fifteen percent (15%)
of
such Net Sales, and (y) for aggregate Net Sales of all Products in
such Year of
$1 billion or more, a royalty of twenty percent (20%) of such
incremental Net
Sales.
(b) Rest of
ROW Territory. With respect to Net Sales in
the ROW Territory, excluding the EU, Pfizer shall pay Eyetech a
royalty of ten
percent (10%) of aggregate Net Sales of all Products.
(c) Royalty
Adjustments for Generic Products. If, during
a given Quarter, there is Generic Competition in a particular
country, then, for
each such country in which there is Generic Competition, the
royalties set forth
in Section 4.1(a) or 4.1(b) shall be reduced by [**] percent
([**]%).
Notwithstanding anything to the contrary in this Section 4.1(c) or
in Section
4.1(d) or 10.7, in no event shall the aggregate reduction in the
royalty
payments otherwise payable under Section 4.1(a) or 4.1(b) with
respect to any
given Net Sales of Products in a country be reduced by more than an
aggregate of
[**] percent ([**]%) as a result of the royalty reduction
provisions of this
Section 4.1(c) and Sections 4.1(d) and 10.7.
(d) Revenue
Share Term. Royalty payments [**] under this
Section 4.1 shall continue on a Product-by-Product and
country-by-country basis
for the applicable Royalty Term; provided that during portions of
any Royalty
Term in which no Valid Claim exists with respect to a Product in a
country, the
royalty payments otherwise payable under Section 4.1(a) or 4.1(b)
shall, subject
to the limitations set forth in Section 4.1(c), be reduced by [**]
percent
([**]%).
(e) Certain
ROW Sales. Pfizer shall not, for the purpose
of circumventing the higher royalty payable in respect of EU Net
Sales, sell
Products to a third party in the ROW
22
<PAGE>
Territory outside of the EU in situations in which Pfizer knows
that such third
party will resell the Products into the EU.
4.2 Survival
of Licenses After Expiration of Royalty Term and
After Expiration of Co-Promotion Term. Upon expiration of each
Royalty Term, on
a Product-by-Product and country-by-country basis, the licenses set
forth in
Section 2.1(a) and, subject to Pfizer continuing to manufacture the
Products in
accordance with the same quality standards observed by Pfizer with
respect to
the manufacture of Products during the Royalty Term, the license to
Trademarks
in the ROW Territory set forth in Section 10.1(d) of the
Collaboration Agreement
shall become fully paid-up and perpetual with respect to such
Product in such
country. Upon expiration of the Co-Promotion Term, on a
Product-by-Product
basis, the licenses set forth in Sections 2.1(b) shall become fully
paid-up,
perpetual non-exclusive licenses with respect to such Product in
the US
Territory. For the avoidance of doubt, this Section 4.2 shall not
apply with
respect to any license set forth in Section 2.1 that is terminated
before the
applicable Royalty Term or Co-Promotion Term expires, as
applicable.
4.3 Third
Party Royalties. With respect to royalties payable to
third parties payable based on sales of Products:
(a) With
respect to such Net Sales in the US Territory,
Eyetech shall pay such royalties and include all such royalty
payments in its
Quarterly Expense Reports (as defined in Section 8.6(b) of the
Collaboration
Agreement) for the purpose of including such royalty payments in
calculations of
the quarterly payments payable pursuant to Section 8.6(d) of the
Collaboration
Agreement.
(b) With
respect to such sales in the ROW Territory,
Pfizer shall be responsible for [**] percent ([**]%) of such
royalties, except
as provided for in subsection (d)
23
<PAGE>
below. For the avoidance of doubt, in the event that any
withholding or other
taxes are payable by Pfizer on any third party royalty payments due
with respect
to sales in the ROW Territory, then Pfizer shall make such tax
payments in
addition to making the payments to Eyetech set forth in the
immediately
preceding sentence. If any withholding or other taxes are payable
by Eyetech on
any third party royalty payments due with respect to sales in the
ROW Territory,
and such taxes are not deductible from the royalty payments due to
the third
parties, then Pfizer shall pay to Eyetech an additional amount
equal to such
taxes. Pfizer shall indemnify Eyetech and its Affiliates and their
respective
directors, officers, employees and agents from and against any
liability with
respect to withholding or other taxes that are payable by Pfizer or
Eyetech on
any third party royalty payments due with respect to sales in the
ROW Territory.
The Parties shall establish such procedures as are reasonably
necessary to
permit them to reconcile Eyetech's actual payments of such third
party royalties
with Pfizer's payments to Eyetech under this Section 4.3(b).
Notwithstanding the
foregoing provisions of this Section 4.3(b), Pfizer shall not have
any
responsibility for withholding taxes that become payable solely as
a result of
an assignment by Eyetech of Eyetech's rights to receive payments
from Pfizer to
an Affiliate of Eyetech or other third party.
(c) With
respect to Pfizer's responsibility for the
payments of royalties payable by Eyetech to third parties payable
based on Net
Sales as set forth in Section 4.3(b), Eyetech shall send Pfizer a
quarterly
invoice that shall be based on Pfizer's quarterly report of Net
Sales pursuant
to Section 5.2 and shall reflect the amounts due from Pfizer under
Section
4.3(b). Pfizer shall, within fifteen (15) days after its receipt of
such
invoice, make payment under such invoice by electronic transfer in
immediately
available funds to the account
24
<PAGE>
designated in writing by Eyetech, which designation shall take
place at least
two (2) Business Days before the payment is due.
(d) Pfizer
shall be entitled to deduct a portion of third
party royalties payable by Pfizer with respect to sales in the EU
from royalties
otherwise payable to Eyetech pursuant to Section 4.1(a) as
follows:
(i) With
respect to third party royalties
payable pursuant to third party agreements, other than the
MEEI/Draper License,
entered into by Eyetech prior to the Execution Date, on sales of
Products in the
EU corresponding to increments of aggregate Net Sales of all
Products in the EU
of greater than $[**] in any Year, Pfizer may deduct [**]percent
([**]%) of such
incremental third party royalties.
(ii)
With respect to third party royalties
payable pursuant to any other third party license agreement, other
than the
MEEI/Draper License, on sales of Products in the EU corresponding
to increments
of aggregate Net Sales of all Products in the EU of greater than
$[**] in any
Year, which agreement is necessary to avoid infringement of third
party rights
with respect to Products in the EU, Pfizer may deduct [**] percent
([**]%) of
such incremental third party royalties, up to a maximum aggregate
deduction in
any Year of [**] percent ([**]%) of such incremental Net Sales.
(e)
Notwithstanding anything to the contrary contained
herein, any and all third party royalties which relate to or
otherwise result
from any misrepresentation or breach of Eyetech's representations
or warranties
contained in this Agreement or the Collaboration Agreement shall be
excluded
from the provisions of this Section 4.3.
(f) Nothing in
this Section 4.3 shall be construed to
limit either Party's indemnification obligations pursuant to the
Collaboration
Agreement.
25
<PAGE>
(g) After the
Effective Date, Eyetech shall use
commercially reasonable efforts to negotiate and execute any
amendments to the
Gilead License, Shearwater License and Isis License necessary to
conform the
definitions of "Net Sales" (or comparable terms thereunder) with
the definition
of "Net Sales" hereunder, so as to provide for an equivalent basis
for
calculating royalties due under the Gilead License, Shearwater
License and Isis
License as is used under this Agreement; provided that Eyetech
shall have no
obligation to pay any money to obtain such amendments and Eyetech
shall have no
obligation to enter into any amendment that would increase
Eyetech's or its
sublicensees' (including Pfizer's) royalty or other obligations
under the Gilead
License, Shearwater License or Isis License.
ARTICLE 5
ACCOUNTING AND PROCEDURES FOR PAYMENTS.
Payments hereunder shall be subject to the following
provisions:
5.1 Sales
Subject to Royalty Obligations. Sales between or among
Pfizer, its Affiliates or sublicensees shall not be subject to
royalties under
Section 4.1; royalties shall only be calculated upon sales by
Pfizer, its
Affiliates and sublicensees to independent third parties. Pfizer
shall be
responsible for payment obligations arising from sales by its
Affiliates and
sublicensees.
5.2 Royalty
Payments; Royalty Reports; Pfizer Operating Profit.
(a) Pfizer
shall provide Eyetech with a report of Net
Sales with respect to each Quarter (based on the quarters specified
in the
second sentence of Section 1.44) within forty-five (45) days after
the end of
such period, which report shall identify, on a country-by-country
basis, the
Product, gross sales, Net Sales, deductions from gross sales taken
to calculate
Net Sales, and the royalty amount payable to Eyetech under Section
4.1, as well
as the
26
<PAGE>
computation of such royalty amount. Pfizer shall make royalty
payments to
Eyetech on Net Sales with respect to each Quarter within sixty (60)
days after
the end of each such period. Royalty reports shall be kept
confidential by
Eyetech and not disclosed to any other party other than Gilead,
Shearwater, Isis
and their respective accountants and Boards of Directors. In
addition, Eyetech
shall be entitled to disclose such information as required for the
purposes of
preparing and disclosing to third parties Eyetech's financial
statements, as
required to comply with applicable Laws or requirements imposed by
any stock
exchange or Nasdaq and to third party lenders in connection with
Eyetech's
financing activities.
(b) Within
ninety (90) days of the end of the final
Quarter of each Year during the Term, Pfizer will provide Eyetech
with a report
[**] by which [**] and pay [**] to Eyetech together with such
report.
5.3 Currency
Exchange; Late Payments. All payments made hereunder
shall be made in U.S. dollars and shall be made by electronic
transfer in
immediately available funds to such bank account as Eyetech shall
designate in
writing at least five (5) business days before the payment is due.
For the
purposes of determining the amount of royalties due for the
relevant Quarter,
the amount of Net Sales in any foreign currency shall be computed
by (a)
converting such amount for the relevant Quarter into U.S. dollars
at the Average
Exchange Rate for the Quarter (the "Average Exchange Rate" means,
for each
Quarter for each currency in which Products sales to third parties
are
denominated, the average of the prevailing commercial rate of
exchange for
purchasing U.S. dollars with such currency on the last business day
of each
Pfizer accounting period in the relevant Quarter as published in
The Financial
Times), and (b) deducting the amount of any governmental tax, duty,
charge or
other fee actually paid by Pfizer or its Affiliates in respect of
such
conversion into and remittance of U.S. dollars. All payments
27
<PAGE>
under this Agreement shall bear interest from the date due until
paid at a rate
equal to the prime rate of Citibank, NA as announced on the date
such payment
was due plus three percent (3%), compounded on a calendar quarterly
basis. In
addition, Pfizer shall reimburse Eyetech for all reasonable costs
and expenses,
including without limitation reasonable attorneys' fees and legal
expenses,
incurred in the collection of late payments.
5.4
Withholding Taxes. Except as otherwise provided in Section
4.3(b), any taxes required to be paid or withheld by Pfizer, its
Affiliates or
sublicensees for the account of Eyetech on amounts payable under
this Agreement
shall be deducted from the amounts payable at the rates specified
by applicable
Law. In addition, Pfizer shall provide promptly to Eyetech receipts
from the
government or taxing authority-evidencing payment of such
taxes.
5.5 Audits.
Pfizer shall, and shall cause its Affiliates and
sublicensees to, keep full and accurate books and records setting
forth gross
sales, Net Sales, Product Operating Profit for the EU and amounts
payable to
Eyetech. Pfizer shall permit Eyetech, at Eyetech's sole expense, by
a nationally
recognized independent certified public accountants selected by
Eyetech (as to
which Pfizer has no reasonable objection), to examine such books
and records
upon at least thirty (30) days' advance written notice during
normal business
hours and in a manner that does not materially interfere with
Pfizer's business,
but not later than three (3) years following the rendering of any
such reports,
accountings and payments. The foregoing right of review may be
exercised only
once with respect to each such periodic report and payment. Such
accountants may
be required by Pfizer to enter into a reasonably acceptable
confidentiality
agreement, and in no event shall such accountants reveal to Eyetech
the details
of its review except insofar as is necessary to verify the accuracy
of reports
and payments made or due hereunder. The results of any such audit
shall be
delivered in writing to each Party. Any underpayment determined by
such audit
shall promptly
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be paid or refunded by Pfizer. If Pfizer has underpaid amounts due
under this
Agreement by more than five percent (5%) over any reporting period,
Pfizer shall
also reimburse Eyetech for the cost of such audit (with the cost of
the audit to
be paid by Eyetech in all other cases), plus interest at the
interest rate set
forth in Section 5.3, from the date of any such underpayment. Any
dispute
arising out of any such audit and any other dispute arising out of
the Parties'
respective payment obligations under this Agreement shall be
resolved through
binding arbitration in accordance with Article 11, and either party
may submit
such dispute to such binding arbitration.
5.6 Blocked
Payments. In the event that, by reason of applicable
Laws or regulations in any country, it becomes impossible or
illegal for Pfizer
to transfer, or have transferred on its behalf, royalties or other
payments to
Eyetech, such royalties or other payments shall be deposited in
local currency
in the relevant country to the credit of Eyetech in a recognized
banking
institution designated by Eyetech or, if none is designated by
Eyetech within a
period of thirty (30) days, in a recognized banking institution
selected by
Pfizer and identified in a notice in writing given to Eyetech.
ARTICLE 6
TECHNICAL AND OTHER INFORMATION
6.1 Disclosure
of Technical Information. Promptly upon execution
and delivery of this Agreement, and thereafter periodically during
the Term
(periodically shall mean, except as otherwise provided in the
Collaboration
Agreement, at least calendar quarterly prior to the first Approval
of a Product
in the Territory, and thereafter at least annually), Pfizer and
Eyetech shall
each disclose to the other all Eyetech Technical Information and
Pfizer
Technical Information not previously disclosed. Each report shall
be in the
format and contain the level of detail to be reasonably agreed upon
by the
Parties. All Eyetech Technical Information heretofore disclosed
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by Eyetech to Pfizer shall be deemed to have been disclosed
pursuant to this
Agreement and shall be subject to the provisions of this Agreement,
including
but not limited to this Article 6.
6.2
Confidentiality. During the Term and for five (5) years after
the expiration or termination of this Agreement, each Party shall
maintain
Confidential Information (as defined in Section 11.2 of the
Collaboration
Agreement) provided by the other Party in confidence, and shall not
disclose,
divulge or otherwise communicate such Confidential Information to
others, or use
it for any purpose other than as permitted under this Agreement and
the
Collaboration Agreement. The receiving Party shall have the right
to disclose
Confidential Information received from the other Party to
governmental agencies
to the extent reasonably required or desirable to secure Approval
for marketing
of Products (provided that the receiving Party shall use reasonable
efforts to
secure confidential treatment thereof), and to preclinical and
clinical
investigators where reasonably necessary or desirable for their
information to
the extent normal and usual in the custom of the trade and under
a
confidentiality agreement with provisions governing confidentiality
and non-use
substantially the same as those contained herein.
6.3 Publicity
Related to this Agreement. The Parties recognize
that each Party may from time to time desire to issue press
releases and make
other public statements or disclosures regarding the subject matter
of this
Agreement. In such event, the Party desiring to issue an a press
release or make
a public statement or disclosure shall provide the other Party with
a copy of
the proposed press release, statement or disclosure for review and
approval in
advance, which advance approval shall not be unreasonably withheld,
conditioned
or delayed. No other public statement or disclosure concerning the
existence or
terms of this Agreement shall be made, either directly or
indirectly, by either
Party hereto, without first obtaining the written approval of the
other Party.
Once any public statement or disclosure has been approved in
accordance with
this
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Section, then either Party may appropriately communicate
information contained
in such permitted statement or disclosure. Notwithstanding the
foregoing
provisions of Section 5.2, Section 6.2 or this Section 6.3, a Party
may (a)
disclose the existence and terms of the Transaction Agreements (as
defined in
the Collaboration Agreement) where required, as reasonably
determined by the
disclosing Party, by applicable Law, by applicable stock exchange
or Nasdaq
regulation or by order or other ruling of a competent court, (b)
disclose the
existence and terms of the Transaction Agreements under obligations
of
confidentiality to agents, advisors, contractors, investors and
sublicensees,
and to potential agents, advisors, contractors, investors and
sublicensees, in
connection with such Party's activities hereunder and in connection
with such
Party's financing activities and (c) publicly announce any of the
matters set
forth in Exhibit 17.14(c) of the Collaboration Agreement, provided
that such
announcements do not entail disclosure of non-public technical or
scientific
information (which for clarity, excludes clinical trial results)
and the
announcing Party provides the other Party with a copy of the
proposed text of
such announcement sufficiently in advance of the scheduled release
or
publication thereof to afford such other Party a reasonable
opportunity to
review and comment upon the proposed text.
6.4
Applicability of Obligations to Affiliates, Employees,
Directors, Agents, Independent Contractors and Consultants. The
confidentiality
obligations of the Parties under this Article 6 shall be applicable
to Parties,
as well as their respective Affiliates, employees, directors,
agents,
independent contractors and consultants.
ARTICLE 7
PATENTS
7.1 Third
Party License Agreements. The Parties acknowledge that
the provisions of this Article 7 are subject in all respects to the
provisions
of any license agreements between
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Eyetech and third party licensors of the Eyetech Patent Rights and
the
obligations of Eyetech and the rights of Pfizer under this Article
7 are limited
accordingly. Eyetech and Pfizer shall, within the foregoing
constraints,
cooperate in the con
