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Exhibit 10.1
LICENSE AGREEMENT
Made
this 20
th day
of January 2008 (the "
Effective Day "),
by and between Synvista, with its principal place of business at
______________________________________________________________________________
(hereinafter the "
Company ")
and Novel Therapeutic Technology Inc with its principal place of
business at POB 12006, 7 Yad Harutzim, Herzliya Pituach 46722
ISRAEL (hereinafter "
NTT ");
WHEREAS ,
NTT has sole and exclusive rights under an Exclusive License
Agreement (the "
Yissum Agreement ")
from Yissum Research Development Company of the Hebrew University
of Jerusalem ("
Yissum "),
for drug delivery technology known as the ETHOSOME™ Delivery
System know-how and formulations using such delivery system
("
Ethosome ")
, and is able and willing to enter into a licensing agreement with
the Company for Ethosome and the formulation of a drug of the
Company using the Ethosome formulation technology,
WHEREAS ,
the Company is the exclusive licensee of the rights in and to
certain organoselenium Drug as further detailed below;
and
WHEREAS ,
The Company wishes to obtain a license from NTT and NTT wishes to
grant a license to the Company for the Product (as hereinafter
defined), Drug Formulation (as defined hereinafter), Development
Results (as hereinafter defined), Resulting Patents (as hereinafter
defined), NTT Patents (as hereinafter defined) and NTT Formulation
Technology (as hereinafter defined), subject to the terms
and
conditions
of this Agreement
NOW THEREFORE THE PARTIES DO HEREBY AGREE AS
FOLLOWS:
1.
Interpretation and Definitions
1.1
The
preamble and appendices annexed to this Agreement constitute
an integral part hereof and shall be read jointly with its
terms and conditions.
1.2
In
this Agreement, unless otherwise required or indicated by the
context, the singular shall include the plural and
vice-versa ,
the masculine gender shall include the female gender, and the use
of the word "or" means "and/or”.
1.3
The
headings of the sections in this Agreement are for the sake of
convenience only and shall not serve in the interpretation of
the Agreement.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
1.4
In
this Agreement, the following capitalized terms shall have the
meanings appearing alongside them, unless provided
otherwise:
1.4.1
"
Affiliate "
means any person or organization controlling, controlled by or
under common control with the Company, including any parent,
subsidiary or affiliate company. The term "control" means direct or
indirect ownership of more than fifty percent 50% of the
outstanding stock or other voting interest, entitled to vote for
the election of a majority of directors or to direct the management
and policies of any party, directly or indirectly.
1.4.2
"
Agreement "
means this agreement together with all the appendices and annexes
hereto.
1.4.3
"
Company Confidential Information "
means the Drug and all technical, scientific and commercial
information including but not limited to any data, trade secrets,
know-how, assays, materials, formulations, solubility, stability,
analytical methods, compositions, reports, notebooks, certificates,
regulatory information, authorizations, approvals, synthesis,
materials, methods, results, and/or processes, of the Company;
which either are disclosed by the Company, or, resulting from use
of the Drug and are directly related thereto, whether disclosed
orally, in writing or electronically. Company Confidential
Information shall not include the Drug Formulation.
1.4.4
"
Development Plan "
means the written plan, and any amendments thereof, attached hereto
as
Exhibit A ,
which sets forth the development of Drug Formulation.
1.4.5
"
Development Results "
means: i) the Product; ii) Drug Formulation; iii) any and all data,
information, experiments, trade secrets, know-how, assays,
solubility, stability, analytical methods, compositions,
derivatives, synthesis, materials, results, and/or processes; and
certificates, authorizations, approvals, reports, which results
from, or arises under the Development Plan; and iv) any and all
conceptions, inventions arising under or resulting from the
Development Plan; and/or claim or disclose the Product, Drug
Formulation except for Intellectual Property Rights of NTT and
Company existing prior to the Effective Date.
1.4.6
"
Drug "
means the Company's organoselenium drug or materials, as specified
in
Exhibit B hereto,
and its racemate, metabolite, derivatives, isomers, polymorphs,
crystals.
1.4.7
"
Drug Formulation "
means the formulation of the Drug utilizing NTT's Formulation
Technology.
1.4.8
"
First Commercial Sale "
means, with respect to any country, the first bona fide
arm's-length sale of the Product in such country following receipt
of all regulatory approvals necessary to commence regular,
commercial scale sales of the Product in such country, excluding,
however, any sale or other distribution for use in a clinical
trial. Any sale prior to receipt of all approvals necessary to
commence commercial sales, such as any so-called "named patient
sale" or "compassionate use" sale, shall not be deemed a First
Commercial Sale.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
"
Intellectual Property Rights "
shall mean any and all patents and patent applications and the
rights in such patents, in the Territory, including any and all
divisionals, continuations, continuations-in-part, reissues,
renewals, substitutions, registrations, re-examinations,
revalidations, extensions, supplementary protection certificates,
pediatric exclusivity periods and the like of any such patents and
patent applications, and foreign equivalents
"
Intercompany Consideration" means
consideration received by the Company and its Affiliates from among
the Company and its Affiliates.
"
License "
means the license granted by NTT to the Company under Section 3.1
hereto.
1.4.9
"
Net Sales "
means the gross amount invoiced for sales of Product by or on
behalf of the Company, its Affiliates or Sublicensees to any third
party (whether an end-user, or a distributor), exclusive of
Inter-Company transfers or sales to or from Affiliates or
Sublicensees, less the following deductions from such gross amounts
only to the extent reasonable and customary, and which are actually
incurred and included in gross amounts invoiced (i) all discounts,
returns, rejections and retroactive price reductions given in
respect of such sales and credits or allowances actually paid or
granted, (ii) deducting sales, excise and similar taxes (including
VAT) or other relevant governmental charges, and (iii)
transportation, packaging and insurance charges; amounts actually
credited, rebated or allowed for rejections or returns of Product;
retroactive price reductions that are actually allowed or granted,
bad debt, transportation expenses related to the sale of Product
and custom duties imposed and with reference to the sale of
Product. Such deductions shall be directly related to the sale of
Products that were awarded within the regular running of the
business of the Company and made at "arms length". In the event of
sales not made at "arms length", Net Sales shall be calculated in
accordance with the current market conditions, or in the absence of
such conditions, according to reasonable conditions for such
sale.
1.4.10
"
NTT Confidential Information "
means the NTT Formulation Technology, the Ethosome Drug Delivery
System, as defined below, and all technical, scientific and
commercial information including but not limited to any data, trade
secrets, know-how, assays, materials, formulations, solubility,
stability, analytical methods, compositions, reports, notebooks,
certificates, regulatory information, authorizations, approvals,
synthesis, materials, methods, results, and/or processes, of NTT;
whether disclosed orally, in writing or
electronically.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
1.4.11
"
NTT Formulation Technology "
means a drug delivery technology and know-how, information, trade
secrets and NTT Patents in formulations of drugs known as the
ETHOSOME
TM Drug
Delivery System "(Ethosome")
1.4.12
"
NTT Patents "
shall mean the patents and/or patent applications covering or
disclosing NTT Formulation Technology; and including but not
limited to, U.S. Patent No. [***], U.S. Patent No. [***] and PCT
International Application No. [***] and any continuations,
continuations-in-part, extensions, divisions, substitutions or
additions to such applications and all patents which are reissues
thereof, re-validations and registrations based thereon, and any
and all foreign patents and patent applications corresponding
thereto.
1.4.13
"
Party "(
collectively: the "
Parties ")
means each of the Company and NTT.
1.4.14
"
Product "
means a pharmaceutical preparation or composition containing the
Drug Formulation which is covered by a Valid Patent
Claim.
1.4.15
"
Regulatory Approval "
means any approvals (including supplements, amendments, pre- and
post-approvals and price approvals), licenses, registrations or
authorizations of any national, supra-national (e.g., the European
Commission or the Council of the European Union), regional, state
or local regulatory agency, department, bureau, commission, council
or other governmental entity, necessary for the manufacture,
distribution, or sale of Products in a regulatory
jurisdiction.
1.4.16
"
Reporting Period "
means, with respect to the Product in any country in the Territory,
on a bi-annual basis, commencing with the First Commercial Sale of
such Product in such country and ending upon termination of the
this Agreement.
1.4.17
"
Resulting Patents "
means patents and patent applications and the rights in such
patents, in the Territory, including any and all divisionals,
continuations, continuations-in-part, reissues, renewals,
substitutions, registrations, re-examinations, revalidations,
extensions, supplementary protection certificates, pediatric
exclusivity periods and the like of any such patents and patent
applications, and foreign equivalents of the foregoing that
incorporate information or results arising under or resulting from
the Development Plan, and/or claim or disclose the Product, Drug
Formulation; except for Intellectual Property Rights of NTT and
Company existing prior to the Effective Date.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
1.4.18
"
Sublicensee "
shall mean the granting or licensing of any rights to a third party
by the Company or its Affiliates to make, commercialize, use, sell
and/or import (except where the implied right to use accompanies
the sale to the third party end user the Product by the Company or
its Affiliates or Sublicensees).
1.4.19
"
Sub-License Consideration "
means the consideration received by the Company for the granting of
a Sublicense. Notwithstanding the foregoing, Sublicense
Consideration shall not include: i) consideration received by the
Company and its Affiliates from among the Company and its
Affiliates ("
Intercompany Consideration ");
and ii) payments made to the Company by a licensee for research and
development expenses directly related to the Products as defined by
FASB accounting; iii) payments made to the Company by a licensee
for any equity investment or financing at a price per share (or
other security or debt, warrant of other financial instrument)
equal to or lower than the market value of such shares (or other
securities).
1.4.20
"
Territory "
means worldwide.
1.4.21
"
Valid Patent Claim "
shall mean a claim of an issued and unexpired patent, including
those with an extended term under patent term adjustment, patent
term extension or pediatric exclusivity claiming the Drug or Drug
Formulation, including NTT Patents and Resulting Patents, which
would be infringed by the unauthorized sale or use of the Product
in the country of sale, which claim has not been revoked or held
unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction (which decision is no
longer appealable), and which claim has not been disclaimed, denied
or admitted to be invalid or unenforceable through reissue,
re-examination or disclaimer or otherwise (including such claim
during the term of any statutory or regulatory exclusivity periods
that relate back to or apply to that claim).
2.
Development Plan
2.1
Performance NTT
will use its reasonable efforts to perform the Development Plan in
accordance with the timetable set forth therein. Performance of the
Development Plan will be subject to the Company's provision to NTT
such information regarding suggested Drug concentrations and any
relevant data requested by NTT as set forth in the Development
Plan. NTT shall provide personnel, facilities, and resources as
required to accomplish the work necessary to complete and
accordance with the Project. NTT shall retain separate laboratory
data books and notebooks for any and all data, results,
experiments, and information of the Development Results; copies of
all such records shall be provided to Company upon Company's
written request. NTT shall not co-mingle Drug or Company
Confidential Information with that of a third party; or with any
NTT Formulation Technology of NTT not under this
Agreement.
NTT,
upon written request from the Company, and/or upon
Termination, shall provide to Company a detailed Report. In
addition, NTT shall provide such additional periodic written
reports or attend such additional meetings with Company as
Company shall determine are necessary with respect to the
status of NTT's activities under this Agreement and the
Project, at the Company 's expense and on reasonable notice
from Company. NTT shall conduct regular telephone conferences
and no less frequently than once every two weeks with Company
to discuss the details, results and progress of the
Development Plan.
NTT
expressly disclaims any and all implied or express warranties
pertaining to the Development Results and makes no express or
implied warranties of merchantability, fitness for any
particular purpose of the Development Results, chemical
stability, toxicology and/or tolerability
thereof.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
2.2
Compliance .
In carrying out the Development Plan, NTT agrees that if applicable
it will comply with all generally accepted standards of Good
Laboratory practices and all applicable local, state and federal
laws.
2.3
Regulatory Cooperation .
NTT shall cooperate with US and European regulatory authorities,
and allow them access to NTT's facilities and premises and to
records and data that are relevant for the Development Plan. Each
Party shall promptly inform the other Party of any request or
effort by any such regulatory authority to review records and data,
or to contact, visit, or inspect NTT or NTT's records and data,
relating to the Development Plan, and shall notify the other Party
within two (2) business days, or as reasonably practicable, if any
regulatory authority issues or gives any notice of intent to
inspect, notice of inspection, notice of inspectional observations,
warning letter, or other written communication concerning the
Development Plan. The Company shall have the sole right and
responsibility with respect to interactions with regulatory
authorities regarding the development, marketing, sale and/or
manufacturing of Products, including but not limited to any IND,
marketing authorization. Each party agrees to notify (the
"Notifying Party") the other party within two (2) working days of
any information of which the Notifying Party becomes aware
concerning any side effect, injury, toxicity or sensitivity
reaction, or any unexpected incident, and the severity thereof,
whether or not determined to be attributable to any NTT Formulation
Technology, Drug Formulation, and/or Product (hereinafter "
Adverse Experience "),
where such Adverse Experience is (i) serious and associated with
the clinical uses, studies, investigations, tests and marketing of
Product, whether or not determined to be attributable to Product.
With respect to all other adverse experiences (non-serious expected
or non-serious unexpected adverse experiences), the Notifying Party
shall furnish the other party with copies of such non-serious
adverse experiences in connection with the marketing of Product
within 10 working days after receipt. "Serious" as used in this
Section refers to an experience which results in death, is
immediately life threatening, results in persistent and significant
disability/incapacity or requires in-patient hospitalization, or
prolongation of existing hospitalization, or is a congenital
anomaly, cancer or an overdose. Other important medical events that
may jeopardize the patient or may require intervention to prevent
one of the outcomes previously listed should also be considered
serious. "Unexpected" as used in this Section refers to a condition
or development not listed in the current labeling for Product, and
includes an event that may be symptomatically and
pathophysiologically related to an event listed in the labeling,
but differs from the event because of increased frequency or
greater severity or specificity. Furthermore, each party agrees
throughout the Term to notify the Company of any "Serious" Adverse
Experience which occurs in the Territory within 2 working days
after the Notifying Party becomes aware of such event and of any
Non-serious Adverse Experience which occurs in the Territory within
10 working days after the Notifying Party becomes aware of such
event.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
2.4
Company's Information and License .
The Company will provide NTT, Drug and related know how as set
forth in the Development Plan ("
Company's Information ").
The Company hereby grants NTT the right to use the Company's
Information solely for conducting the Development Plan. NTT may not
use the Drug or Company Confidential Information for any other
purpose. Any information, data, results, know, how, materials,
derivatives, methods, and/or composition related directly to the
Drug resulting from the Development Plan, and which is not the Drug
Formulation, shall be solely and exclusively owned by the Company
("
New Company Information ”),
and NTT has not rights to use. Upon termination of this Agreement,
NTT shall have no use right under this Section.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
2.5
Changes to the Development Plan .
Any variation of the Development Plan must be agreed in writing by
NTT and Company.
2.6
Limitation on Use .
NTT will not use the Drug, Product, Drug Formulation, Development
Results, Intellectual Property Rights including Resulting Patents
that result from the Development Plan and/or Development Results,
Company Confidential Information for any purpose other than as
explicitly set forth in this Agreement. Upon termination or
completion of the Development Plan, all Company Confidential
Information, Drug shall be returned to Company or destroyed at
Company's sole option and at Company's expense. However, nothing
herein shall affect NTT's rights to use NTT's Formulation
Technology for any purpose, including without
limitation, for the purpose of other drugs
formulation.
2.7
NTT
shall provide to the Company at Termination and/or upon
written request from the Company, a detailed Report including
the Developmental Results. In addition, NTT shall provide such
additional periodic written reports or attend such additional
meetings with Company as Company shall determine are necessary
with respect to the status of NTT's activities under the
Development Plan, at the Company's expense and on reasonable
notice from Company.
2.8
At
the expiration or termination of this Agreement, and subject
to the provisions of Section 8A below, (i) all Drug, and (ii)
any materials, information, databases and records, accounts,
notes, reports and data obtained or generated by NTT in the
course of providing services under this Agreement, which
constitute Company Confidential Information, and (iii) any
Development Plan Results which constitute New Company
Information, shall, at Company's option and at its direction
and written request, and wherever reasonably practicable, and
subject to the provisions of Section 8.1 below be (a)
delivered to Company at its offices in such form(s) as Company
shall request, (b) retained by NTT in accordance with
applicable law, regulation, and NTT policy, or (c) disposed
of, unless NTT is otherwise required to retain such materials,
information, databases and records, accounts, notes, reports
or data, or copies thereof, under applicable law or
regulations. All costs of delivering the same to Company,
including without limitation shipping costs, or of disposing
or retaining the same shall be borne by
Company.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
3.
Grant of License by NTT
3.1
Grant of License .
NTT hereby grants to the Company an exclusive worldwide through
multiple tier license, in the Territory, to: 1) the Intellectual
Property Rights resulting from and/or arising under the Development
Plan and/or Development Results including Resulting Patents, and/or
the Drug Formulation and/or Product ; and 2) to make, have made,
use, have used and/or license the Drug Formulation and/or the
Development Results, and 3) to make, have made, sell, have sold,
use, have used, license, and/or import Product; and 4) an exclusive
license in the Territory to any Patents covering the Drug
Formulation and Product to enable the Company to make, have made,
sell, have sold, and/or use Products. The Company shall not use the
Drug Formulation and/or the Development Results for any purpose
other than exercise of the License. NTT hereby grants to the
Company a non-exclusive license, in the Territory under the NTT
Patents, to use the NTT Formulation Technology to 1) develop, make,
have made, and use, the Drug Formulation, and 2) develop, make,
have made, sell, have sold, and use, Product.
No Implied Licenses .
Except as explicitly set forth in this Agreement, neither Party
shall acquire any license or other intellectual property interest,
by implication or otherwise, in any proprietary information
disclosed to it under this Agreement or under any trademarks,
patents or patent applications owned or controlled by the other
Party or its Affiliates.
3.2
Rights to Sublicense .
The Company shall have the right to grant sublicenses, through
multiple tiers of sublicenses, provided that ally such sublicense
shall expressly provide for the Sublicensee to be bound by
obligations consistent with those provided in this
Agreement.
The
Company shall provide NTT with prompt written notice of each
sublicense agreement, as well as a copy of such sublicense
agreement; provided that the Company may redact from such copy
any terms not necessary to confirm compliance with this
Agreement.
3.3
Term of the License .
The
License shall commence on the effective day and shall end, if
not ended or terminated prior thereto pursuant to the
provisions hereof, at the earlier of the
following:
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
(a)
the date the Company notifies NTT that the Company does not
intend to proceed with further development of the Drug
Formulation, such notice to be made promptly after the Company
makes such determination; or
(b)
the date the Company notifies NTT that the Company does not
intend to continue to commercialize Product(s) based upon NTT
Formulation Technology, such notice to be made promptly after
the Company makes such determination; or
(c)
The later to occur of (i) date of expiration of the last valid
registered NTT Patent or Resulting Patent in the Territory
upon which the Product, absent the License, would infringe any
Valid Patent Claim included in the registered NTT Patents
and/or Resulting Patent, or any portion thereof, and (ii) the
end of a period of 15 years from the date of making the First
Commercial Sale pursuant to the License.
4.
Consideration and Reporting.
4.1
License-fee milestone payments .
In consideration for the rights granted herein to the Company, the
Company will make the following non-refundable license-fee
milestone payments to NTT:
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Milestone
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Payment (in US Dollars)
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Within 5 days
following the Effective Date
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[***]
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90
days from the Effective Day
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[***]
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The
earliest of (a) within 30 days of the first enrollment in any
country of the first patient in a Phase III clinical trial
study (or equivalent clinical program outside of the United
States) or, (b) 36 months from Effective Day.
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[***]
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The
earliest of (a) Within 30 days of first received Regulatory
Approval or, (b) 72 months form the effective
day.
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[***]
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4.2
Royalties .
In addition to the fees set forth in Section 4.1 above, in
consideration of the rights granted to the Company by NTT
hereunder, for sales of the Product by the Company, its Affiliates
and Sublicensees, the Company shall pay to NTT a [***]% royalty on
Net Sales of the Product. No royalty shall accrue under this
Section 4.2 on sales among the Company, its Affiliates and
Sublicensees, unless the Company or such Affiliate or Sublicensee
is the end user of a Product.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
4.3
Sub-License Fee .
As additional consideration for the license granted to the company
the Company shall pay NTT a Sub-License Fee of [***] percent ([***]
%) of all Sub-License Consideration for rights in the Drug
Formulation or Product by Sublicensee. Any consideration paid to a
third party for a license to patents covering the Drug Formulation
or Products, shall, in the event necessary to enable the
commercialization of the Product and related to NTT Formulation
Technology, and subject to NTT's consent to such sub-license, which
will not be unreasonably withheld or delayed, be credited against
the Royalties and Sub-License Fees due to NTT.
4.4
Reporting. Ten
(10) days after the end of each Reporting Period, the Company shall
furnish NTT with a report (herein "
Periodic Report ")
detailing the total sales effected during the Reporting Period and
the total Royalties due to NTT in respect of that period (each, a
"
Royalty Period ").
The Periodic Reports shall contain full particulars of all sales
made by the Company and/or Sub-Licensees and all of the proceeds
obtained by the Company in respect of granting Sub-Licenses,
including sales broken down according to countries, a breakdown of
the number of Products sold, discounts, returns, the currency in
which the sales were made, invoice date and all other relevant
information enabling the Royalties and Sub-License Consideration
payable to be calculated. The Periodic Reports shall also specify
any sale to an Affiliate and shall set forth full details
thereof.
4.5
Terms of Payment .
On the date prescribed for the submission of each Periodic Report,
the Company shall pay the Royalties due to NTT in accordance with
the Periodic Report; provided that, for royalties due to NTT with
respect to Net Sales of Products by the Company's Sublicensees,
such payment shall be due within the 30 days after the Company
receives such royalties from such Sublicensee, but in no event
later than 60 days after the end of such calendar
quarter.
All
amounts payable under this Section will first be calculated in
United Stated dollars after converted from the currency of
sale. The buying rates involved for the currency of the United
States into which the currencies involved are being exchanged
shall be the arithmetic averages of the ones quoted by the
Western Edition of The Wall Street Journal at the close of
business on the last business day of each calendar month of
the applicable Royalty Period. In the event that such
publication no longer publishes such rates, another financial
publication mutually agreed on by the Parties shall be
substituted.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.
4.6
Payments by the Company to NTT .
All payments due under this Agreement shall be payable in United
States dollars. The Company shall make all payments to NTT by bank
wire transfer in immediately available funds, or as otherwise
specified by NTT in writing.
4.7
Records .
The Company and its Affiliates shall maintain complete and accurate
records of the Product made, used or sold by them or their
Sublicensees under this Agreement, and any amounts payable to NTT
in relation to the Product, which records shall contain sufficient
information to NTT to confirm the accuracy of any reports delivered
to them in accordance with Section 4. The Company and its
Affiliates shall retain such records relating to a given Royalty
Period for at least two (2) years after the conclusion of that
Royalty Period.
4.8
Audit Rights .
NTT (acting as the "
Auditing Party ")
shall have the right, at its own expense, to cause an independent
certified public accountant reasonably acceptable to the Company,
to inspect such records of the Company or its Affiliates (the
"
Audited Party ")
during normal business hours for the sole purpose of verifying any
reports and payments delivered under this Agreement. Such
accountant shall be bound by a confidentiality agreement, and shall
not disclose to the Auditing Party any information other than
information relating to accuracy of reports and payments delivered
under this Agreement and shall provide the Audited Party with a
copy of any report given to the Auditing Party. The Parties shall
reconcile any underpayment or overpayment within 30 days after the
accountant delivers the results of the audit. The Auditing Party
shall bear the full cost of the audit unless the audit performed
under this Section reveals an underpayment in excess of [***]% in
any Royalty Period, in which case the Audited Party shall bear the
full cost of such audit. NTT may exercise its rights under this
Section no more than once every calendar year and only with
reasonable prior notice to the Company. The Company shall require
that its Affiliates and its Sublicensees shall have the obligation
to account and provide records to the Company for all their sales
of Products as annual Net Sales by the Company.
4.9
Late Payments .
In the event that any payment, including royalty payments, due
hereunder is not made within 30 days of receiving written notice of
the date due, the payment shall accrue interest from that date due
at the rate of [***]% per month.
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Co
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