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Exhibit 10.09
Confidential
Treatment - All deleted information contained in this document
is information that Shire Limited. has requested receive
confidential treatment pursuant to Rule 24b-2 promulgated
under the Securities Exchange Act of 1934, as
amended. Portions of this agreement which have been
deleted have been replaced by asterisks (“ *****
”).
REVISED
AND RESTATED MASTER LICENCE AGREEMENT
THIS
AGREEMENT is made the 20th day of November 1995
between
GLAXO GROUP LIMITED , a company organized and existing under
the laws of England and having its registered office at Glaxo
Wellcome House, Berkeley Avenue, Greenford Middlesex UB6 0NN
England (“GROUP”), together with
GLAXO WELLCOME INC. (formerly Glaxo Canada Inc.) a
corporation organized and existing under the laws of the Province
of Ontario and having its registered office at 7333 Mississauga
Road North, Mississauga, Ontario L5N 6L4, Canada
(“GWC”) and
GLAXO WELLCOME INC. (formerly Glaxo Inc.) a corporation
organized and existing under the laws of the state of North
Carolina and having its principal place of business at Five Moore
Drive, Research Triangle Park, North Carolina 27709, United States
of America, (“GWUS”) and
BIOCHEM PHARMA INC. (formerly IAF BioChem International
Inc.) a corporation organized and existing under the laws of the
Province of Quebec and having an office at 275 Armand-Frappier
Blvd., Laval, Quebec, H7V 4A7 Canada (“PHARMA”)
and
TANAUD HOLDINGS (BARBADOS) LIMITED , a corporation
incorporated under the laws of Barbados and a wholly owned
subsidiary of PHARMA (“THB”)
TANAUD INTERNATIONAL B.V. a corporation incorporated under
the laws of the Netherlands and a wholly owned subsidiary of PHARMA
(“TIB”) and
TANAUD LLC. a limited liability company incorporated under
the laws of the State of Delaware and a wholly owned subsidiary of
PHARMA (“TLLC”)
WHEREAS:
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A.
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GROUP,
GWC, GWUS and PHARMA entered into a Master Licence Agreement dated
January 31, 1990 as amended by the Addendum to Master License
Agreement dated January 31, 1990, (collectively, the
“Original Agreement”) and now mutually desire to
replace and supersede the Original Agreement and to restate the
terms of their agreement herein with effect from November 20,
1995;
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B.
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Since
PHARMA has transferred to THB and TLLC the ownership and/or control
over proprietary rights in certain patents and know-how relating to
Modified Licensed Product (as hereinafter defined) and since THB
has assigned and sold to TIB and TLLC the right to receive royalty
payments due to PHARMA under the Original Agreement, GROUP, GWC,
GWUS and PHARMA have added THB, TIB and TLLC as parties to this
Agreement;
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C.
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PHARMA
desires that Modified Licensed Product be developed and
commercialized and is willing to enter into a licence and other
associated agreements for these purposes;
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D.
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GROUP,
GWC and GWUS desire to collaborate with PHARMA in the development
and commercialization of Modified Licensed Product and PHARMA, THB,
TlB and TLLC are willing to grant rights to GROUP, GWC and GWUS on
the terms and conditions set forth herein and to·enter into
a separate agreement with GWC substantially on the basis of the
outline of arrangements set forth in Schedule 3
hereto.
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NOW
IT IS HEREBY AGREED as follows:
For
purposes of this Agreement:
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(A)
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“Affiliate”
means any corporation or other legal entity owning, directly or
indirectly, fifty percent (50%) or more of the voting capital
shares or similar voting rights of BIOCHEM or GROUP; any
corporation or other legal entity fifty percent (50%) or more of
the voting capital shares or similar voting rights of which is
owned, directly or indirectly, by BIOCHEM or GROUP; or any
corporation or other legal entity fifty percent (50%) or more of
the voting capital shares or similar voting rights of which is
owned directly or indirectly by a corporation or other legal entity
which owns, directly or indirectly, fifty percent (50%) or more of
the voting capital shares or similar voting rights of BIOCHEM or
GROUP; or any other relationship as, in fact, constitutes actual
control
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(B)
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“BIOCHEM”
means PHARMA, THB, TIB and TLLC collectively.
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(C)
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“Calendar
Quarter” means any period of three (3) months ending on the
last day of March or June or September or December
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(D)
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“Calendar
Year” means any period of twelve (12) months ending on the
last day of December
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(E)
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“Final
Pharmaceutical Form” means any presentation of a Modified
Licensed Product in any final packaged and labelled pharmaceutical
dosage form suitable for sale to and use by the
end-user
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(F)
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“FTC”
means
(2R,cis)-4-amino-5-fluoro-1-[2-(hydroxymethyl)-1,3-oxathiolan-5-yl]-2(lH)-pyrimidinone.
Also known as:-
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(2R,5S)-5-fluoro-1-[2-(hydroxymethyl)-1,3-oxathiolan-5-yl]cytosine;
524W91; 5-fluoro-2 1
-deoxy-3 1
. thiacytidine; FTC.
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(G)
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“Independent
Third Party” means any person or entity other than BIOCHEM or
GROUP or any Affiliate or sublicensee of BIOCHEM or
GROUP
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(H)
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“Know-How”
means all information, data, discoveries and trade secrets, whether
or not reduced to writing, pertinent to Modified Licensed Product
or to the manufacture or use of Modified Licensed Product, now or
hereafter owned or controlled by BIOCHEM
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(I)
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“Licensed
Patents” means the patents and patent applications set forth
in Schedule 2 hereto, and any patents filed or obtained in any
country corresponding to the patents listed on Schedule 2, as well
as any additional patents issued or granted on additional patent
applications in any country relating to Modified Licensed Product
or its method of manufacture or use, or intermediates therefor, or
formulations thereof, and any continuations, continuations-in-part,
divisions, registrations, confirmations, reissues, renewals or
extensions of term thereof, and any registrations or confirmations
of any United States patents listed on Schedule 2 or any
application or any additional United States patents relating to
Modified Licensed Product or its method of manufacture or use, or
intermediates therefor, or formulations thereof, now or hereafter
owned or controlled by BIOCHEM
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(J)
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“Modified
Licensed Product” means
(2R,cis)-4-amino-1-(2-hydroxymethyl-1,3-oxathiolan-5-y1)-(1H)-pyrimidin-2-one
{also known as
4-amino-l-(2R-hydroxymethyl-[1,3]oxathiolan-5S-y1)-(1H)-pyrimidin-2-one;
(2R-cis)-4-amino-1[2-(hydroxymethyl)-1,3-oxathiolan-5-y1]-2-(1H)-pyrimidone;
2’3’-dideoxy,3’-thiacytidine; lamivudine and
3TC}, the corresponding 2S-enantiomer and mixtures of the R- and
S-enantiomers in any ratio including racaemic
mixtures.
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(K)
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“Net
Invoiced Sales Value” means the gross invoice price charged
for Modified Licensed Product sold by GROUP or its Affiliates or
its sublicensees to an Independent Third Party, less all allowances
or credits granted on·such sales, including those in respect
of rejected or returned goods, recalls, transportation charges or
allowances, insurance charges, normal and customary trade, quantity
and trade discounts, rebates and taxes, other than income taxes,
and other governmental charges on, or measured by, the sale,
transportation, or use of such Modified Licensed Product, which
GROUP and/or its Affiliates and/or its sublicensees has or have to
pay or absorb on such sales
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(L)
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“Net
Sales” in any Calendar Quarter means:
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(i)
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in
the case of any Modified Licensed Product sold in a particular
country hereunder by GROUP and/or its Affiliates and/or its
sublicensees in Final Pharmaceutical Form to an Independent
Third Party, uncompounded and not packaged with any other
active therapeutic and/or prophylactic ingredient, the Net
Invoiced. Sales Value of such Modified Licensed
Product;
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(ii)
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in
the case of any Modified Licensed Product sold in a particular
country hereunder by GROUP and/or its Affiliates and/or its
sublicensees in Final Pharmaceutical Form to an Independent
Third Party, compounded, packaged or sold with any other
active therapeutic and/or prophylactic ingredient, such that
one price is charged for such combination the value of the
total declared amount of the Modified Licensed Product
contained therein as agreed by discussion between GROUP and
PHARMA. If the value cannot be agreed then it shall be decided
by an independent accountant mutually acceptable to GROUP and
PHARMA whose decision shall be binding upon them;
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For
greater
clarity, the “total declared amount” shall mean
the amount of active ingredient in the Modified Licensed
Product as specified on the label or package and as approved
for that dosage form by the governing health authority. For
example, “100 mg” means the total declared value
will be 100 milligrams of active ingredient, even though the
actual formula for manufacture and formulation of such dose of
Modified Licensed product may require a different amount of
active ingredient to achieve an effective dose;
and
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(iii)
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in
the case of any Modified Licensed Product sold in a particular
country hereunder by GROUP and/or its Affiliates and/or its
sublicensees in bulk to an Independent Third Party, the Net
Invoiced Sales Value of such Modified Licensed Product sold by
said Independent Third Party in Final Pharmaceutical
Form
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(M)
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“Parties
to the first part of this Agreement” means GROUP, GWC and
GWUS
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(N)
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“Patent
Expenses” means all external fees and costs
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(i)
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incurred
by GROUP in accordance with the Original Agreement up to
November 19, 1995, in financing the patenting activities set
forth in Paragraph 8 of the Original Agreement in relation to
Modified Licensed Product and Residual Product,
and
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(ii)
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incurred
by GROUP from November 20, 1995 in financing the patenting
activities set forth in paragraph 7 hereof, in relation to
Modified Licensed Product only.
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Patent
Expenses shall include, but shall not be limited to, all
official fees and reasonable independent attorneys’
charges arising from preparation, filing, prosecution,
maintenance and defence [except as arising under the
provisions of subparagraph 7(I)] of the Licensed Patents, and
translation charges
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(O)
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“Residual
Product” means any compound falling within the general
formulae set out in Schedule 1, but excluding those products
covered by the definition of Modified Licensed Product, and also
excluding FTC.
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(P)
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“Territory”
means all countries of the world except Canada and the
USA.
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(Q)
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“USA”
means the United States of America and its possessions and
territories
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(A)
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BIOCHEM
hereby grants to GROUP, for all purposes, in the
Territory:
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(i)
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the
exclusive right under Licensed Patents to develop, register,
manufacture, have manufactured, use and sell Modified Licensed
Product; and
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(ii)
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the
exclusive right under Know-How to develop, register,
manufacture, have manufactured, use and sell Modified Licensed
Product, including the right to disclose such Know-How in the
circumstances specified in paragraph 8 hereof
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GROUP
may exercise the said rights through its Affiliates and
Independent Third Party consultants, contract manufacturers
and distributors: PROVIDED THAT GROUP shall remain responsible
for the performance by such Affiliates, consultants, contract
manufacturers and distributors of any obligations imposed on
GROUP by this Agreement
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(B)
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BIOCHEM
hereby grants to GWC in Canada (which term shall include its
territories and possessions):
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(i)
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the
sole right in conjunction with PHARMA under Licensed Patents
to develop, register, manufacture, have manufactured, use and
sell Modified Licensed Product; and
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(ii)
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the
sole right in conjunction with PHARMA under Know-How to
develop, register, manufacture, have manufactured, use and
sell
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Modified
Licensed Product, including the right to disclose such
Know-How in the circumstances specified in paragraph 8
hereof
GWC
shall exercise the said rights in the manner described in this
Agreement and the Partnership Agreement set forth in Schedule
3 hereto. Without derogation from the general applicability of
the previous sentence GWC may exercise the said rights through
its Affiliates and Independent Third Party consultants,
contract manufacturers and distributors: PROVIDED GWC shall
remain responsible for the performance by such Affiliates,
consultants, contract manufacturers and distributors of any
obligations imposed on GWC by this Agreement
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(C)
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BIOCHEM
hereby grants to GWUS in the USA:
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(i)
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the
exclusive right under Licensed Patents to develop, register,
manufacture, have manufactured, use and sell Modified Licensed
Product; and
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(ii)
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the
exclusive right under Know-How to develop, register,
manufacture, have manufactured, use and sell Modified Licensed
Product, including the right to disclose such Know-How in the
circumstances specified in paragraph 8 hereof
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GWUS
may exercise the said rights through its Affiliates and
Independent Third Party consultants, contract manufacturers
and distributors: PROVIDED THAT GWUS shall remain responsible
for the performance by such Affiliates, consultants, contract
manufacturers and distributors of any obligations imposed on
GWUS by this Agreement.
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(D)
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GROUP
in the Territory and GWUS in the USA shall have the right to grant
sublicences of GROUP’s and GWUS’ respective rights
under the Licensed Patents and Know-How: PROVIDED THAT GROUP and
GWUS shall each remain “responsible for the performance by it
and by its sublicensees of any obligations imposed on GROUP or GWUS
hereunder. GROUP and GWUS shall provide BIOCHEM with prior written
notice of the identity of any such proposed sublicensee(s) and
shall not formally appoint the organization identified as a
sublicensee unless and until BIOCHEM shall have given its approval
to such appointment, it being understood that such approval shall
not be unreasonably withheld or delayed
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(E)
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GROUP,
GWUS and GWC grant back to BIOCHEM the rights to the Residual
Products which GROUP, GWUS and GWC held under the Original
Agreement: PROVIDED THAT
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(i)
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BIOCHEM
shall not exploit commercially any Residual Product outside
the Field (hereinafter in subclause (E)(v) defined) between
*****
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After
November 19, 1999, if BIOCHEM seeks through an Independent
Third Party to exploit commercially any Residual Product
outside the Field, it shall offer to GROUP a first right to
negotiate an exclusive licence for such Residual
Product.
Further,
if GROUP wishes to exploit commercially a Residual Product,
GROUP may seek a licence from BIOCHEM. The terms of such
licence, if any, shall be as agreed between BIOCHEM and GROUP;
PROVIDED THAT BIOCHEM shall not be obligated to entertain
discussions or negotiations pertaining to, or conclude, such a
license with GROUP.
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(ii)
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BIOCHEM
shall not exploit commercially any Residual Product within the
Field until the patent for such Residual Product
expires.
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(iii)
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BIOCHEM
shall not exploit commercially any compound tested under the
Sponsored Research Agreement dated January 1, 1990 between
BIOCHEM and GWC as amended (the “SRA”) between
***** if BIOCHEM seeks through an Independent Third Party to
exploit commercially any such compound it shall offer to GROUP
a first right to negotiate an exclusive licence for such
compound.
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(iv)
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GROUP
and GWUS shall not exploit commercially any compound within
the Field with the principal purpose of reducing the royalty
payable to BIOCHEM under this Agreement.
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(v)
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In
this paragraph 2(E), a Residual Product or compound shall be
regarded as exploited within the Field if that Residual
Product or compound:
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a) is
a cytidine L nucleoside analogue with no distinct biological
difference to Modified Licensed Product,
b) has
such similar therapeutic properties and such an absence of
distinguishing therapeutic advantages compared to Modified
Licensed Product as to be perceived as clinically
interchangeable, and
c) has
its sole clinical use as a direct therapeutic substitute or
replacement for Modified Licensed Product, without any
improved ability to compete with other compounds in the field
other than Modified Licensed Product.
Furthermore,
the term “exploited outside the Field”, shall be
construed in accordance with this subclause.
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(F)
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BIOCHEM
acknowledges that the obligations imposed on BIOCHEM as set out in
paragraph 2(E) mean that BIOCHEM shall not directly or indirectly
manufacture, have manufactured, use or sell, a Residual Product or
compound (for the purposes of this Section 2(F) collectively a
“Compound” other than in accordance with that
paragraph. The restriction on use shall not preclude BIOCHEM from
conducting research and development activities related to
Compounds.
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BIOCHEM
acknowledges that where the provisions of paragraph 2(E)
require BIOCHEM to offer to GROUP a first right to negotiate,
BIOCHEM shall provide to GROUP a written notice of
BIOCHEM’s intention to exploit a Compound and allow
GROUP thirty (30) days from the date of such notice to provide
to BIOCHEM return written notice indicating whether or not
GROUP wishes to enter into negotiations with BIOCHEM for an
exclusive worldwide licence for a Compound, with the right to
sublicense.
Where
GROUP indicates to BIOCHEM in its return notice GROUP’s
wish to commence negotiations, BIOCHEM shall provide to GROUP
all relevant information concerning the Compound to allow
GROUP and BIOCHEM to conduct negotiations toward an exclusive
licence agreement for the Compound.
Where
these license negotiations are not completed within ninety
(90) days from the date of GROUP’s receipt of the
written notice, or GROUP indicates that it does not wish to
further consider such Compound, BIOCHEM shall be allowed to
exploit such Compound or to grant to an Independent Third
party the right to exploit such Compound; PROVIDED THAT
BIOCHEM will not offer more favourable terms to any Individual
Third Party without first offering such more favourable terms
exclusively to GROUP. If BIOCHEM desires to sign with an
Independent Third Party dealing at arm’s length with
BIOCHEM a licence containing more favourable terms than those
offered to GROUP hereunder (the “Third Party
Offer”), BIOCHEM shall, once the details of the licence
agreement shall have been negotiated between BIOCHEM and such
Independent Third Party, offer (the “GROUP Offer”)
to GROUP the right to execute an exclusive licence agreement
upon the same terms and conditions as those contained in the
Third Party Offer. The GROUP Offer and a copy of the Third
Party Offer shall be sent to GROUP and shall be open for
acceptance by GROUP for thirty (30) days from the receipt of
the Group Offer by GROUP. GROUP shall be obliged by notice to
BIOCHEM within the said thirty (30) days, either to accept or
refuse the GROUP Offer. If GROUP accepts the GROUP Offer,
GROUP and BIOCHEM shall execute the GROUP Offer immediately
following receipt by BIOCHEM of the notice of acceptance of
GROUP. If GROUP refuses the GROUP Offer or fails to notify
BIOCHEM of its decision within the said thirty (30) days,
BIOCHEM shall be free to execute the Third Party
Offer.
In
determining whether any terms are more favourable than terms
offered to GROUP, regard shall be had to the totality of the
terms rather to any single component or parts
thereof.
GROUP,
GWUS and GWC grant back to BIOCHEM the right to FTC which
GROUP, GWUS and GWC held under the Original
Agreement
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(A)
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In
consideration of the rights granted to GROUP herein, GROUP has paid
to PHARMA and TIB collectively in accordance with the Original
Agreement the sum of *****
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(B)
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In
consideration of the rights granted to GROUP herein, GROUP shall
pay to TIB a royalty on GROUP’s Net Sales of any Modified
Licensed Product as follows:
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(i)
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in
each country of the Territory, for so long as there is in that
country a Licensed Patent covering the particular Modified Licensed
Product sold in such country by GROUP or its Affiliates or its
sublicensees, the said royalty shall be ***** Net Sales of that
Modified Licensed Product;
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(ii)
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if
there is no Licensed Patent covering a particular Modified Licensed
Product sold in any country in the Territory by GROUP, or its
Affiliates or its sublicensees, the said royalty shall be ***** of
Net Sales of that Modified Licensed Product, and such royalty shall
be paid for a period of ***** from the date of first
commercial sale of that Modified Licensed Product in that
country;
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(iii)
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if
a Licensed Patent exists in any such country but is declared
invalid by a court of competent jurisdiction from which no appeal
has been or can be made such that it no longer validly covers a
particular Modified Licensed Product sold the said royalty shall be
***** of Net Sales of that Modified Licensed Product, commencing on
the date of declaration of invalidity and continuing for the
balance of the period of ***** from the date of first commercial
sale of that Modified Licensed Product in that country;
and
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(iv)
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upon
the expiration of the last-to-expire Licensed Patent in any country
in the Territory covering a particular Modified Licensed Product
sold in such country by GROUP or its Affiliates or its
sublicensees, GROUP shall have no further royalty obligation for
sales in such country of that Modified Licensed
Product
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(C)
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GROUP
shall not be obliged to pay royalties at the full rate set forth in
subparagraph 3(B)(i) on Net Sales of a Modified Licensed Product
sold in
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a
given country in the Territory by GROUP, or its Affiliates or its
sublicensees, if no patent covering the manufacture, use, or sale
of Modified Licensed Product has yet proceeded to grant or issue;
it being understood and agreed that in such countries such
royalties shall be paid at the reduced rate in accordance with the
provisions of subparagraph 3(B)(ii) until such time as a patent is
granted or issued, covering the manufacture, use, or sale of that
Modified Licensed Product by GROUP or its Affiliates or its
sublicensees, whereupon GROUP shall pay when royalties next fall
due under the provisions of paragraph 4 an additional lump sum
royalty of ***** on Net Sales of Modified Licensed Product sold
from the date of commercial sale of Modified Licensed Product in
that country until the date of grant or issue of such patent in
that country and shall pay royalties on Net Sales at the full rate
set forth in subparagraph 3(B)(i) for the Modified Licensed Product
concerned in the relevant country with effect from the date of
grant or issue of such patent in that country
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(D)
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In
the event that any patent included among the Licensed Patents is
declared invalid by a court of competent jurisdiction from which no
appeal has been or can be made such that it no longer validly
covers the Modified Licensed Product sold, royalties pertaining to
that patent shall, from the date of such declaration, cease to be
made at the full rate set forth in subparagraph 3(B)(i) but shall
instead be made at the reduced rate set forth in subparagraph
3(B)(iii)
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(E)
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The
Patent Expenses incurred by GROUP and ***** of the payments made by
GROUP pursuant to subparagraph 3(A) shall be deducted from royalty
payments arising under subparagraph 3(B) using the following
procedure: at the end of the Calendar Year in which the first
commercial sale of a Modified Licensed Product takes place, the
Patent Expenses and ***** being ***** of the total payments made
pursuant to subparagraph 3(A) incurred to date, shall be calculated
and added together to determine the “Royalty
Credit.”· Said Royalty Credit shall be deducted in
whole or in part to a maximum of ***** the royalties due in each
Calendar Quarter, from the royalties due for the first Calendar
Quarter in which royalties are due, and each Calendar Quarter
thereafter until the total deductions made equal the Royalty
Credit. In the event that the said total deductions made in a
Calendar Quarter do not equal the outstanding balance of the
Royalty Credit, deductions from royalties will continue to be made
in each successive Calendar Quarter in accordance will the
aforesaid procedure until GROUP has recovered the full Royalty
Credit. At the end of each Calendar Quarter, after the Calendar
Quarter during which the first commercial sale of a Modified
Licensed Product took place, the Royalty Credit shall be
recalculated by adding to it any further Patent Expenses incurred
during the Calendar Quarter just ended, and subtracting from the
resulting sum the deductions made from royalties during the
previous Calendar Quarter.
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Such
Patent Expenses deductions from royalty payments shall be
calculated separately for Modified Licensed Products which are
sold for significantly different indications, such that the
Patent Expenses attributable to one indication are deducted
from the royalties payable on Net Sales of Modified Licensed
Product for that indication.
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(F)
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If,
in order to manufacture, have manufactured, use or sell Modified
Licensed Product GROUP shall decide following reasonable
consultation with BIOCHEM that it or its Affiliates or sublicensees
shall require any indemnifications relating to, or licenses under,
any patents owned in whole or in part in the Territory by an
Independent Third Party which cover Modified Licensed Product or
formulations or uses thereof or processes for or intermediates used
in the manufacture thereof the amount of the royalty payable to TIB
by GROUP on Net Sales of Modified Licensed Product in the Territory
in any Calendar Quarter shall be reduced by the amount of royalty
and/or lump sum payments that GROUP or its sublicensees shall be
required to pay to such Independent Third Party in consideration of
its activities in respect of Modified Licensed Product in that
Calendar Quarter: PROVIDED THAT, irrespective of the number of such
arrangements made with Independent Third Parties, the total
permitted royalty reduction shall not exceed ***** of the amount
that would otherwise be payable by way of royalty by GROUP to TIB
on Net Sales of such Modified Licensed Product in the Territory in
the said Calendar Quarter. GROUP shall provide TIB with
documentation of such royalties or such lump sum payments so paid
to any Independent Third Party
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(G)
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In
consideration of the rights granted to GWUS herein, GWUS has paid
to PHARMA, TIB and TLLC collectively in accordance with the
Original Agreement the sum of *****
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(H)
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In
consideration of the rights granted to GWUS herein, GWUS shall pay
to TLLC a royalty on GWUS’ Net Sales of any Modified Licensed
Product as follows:
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(i)
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*****
commencing on ***** or sales made until *****
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(ii)
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*****
commencing on ***** or sales made until December 30, 1998;
and
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(iii)
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*****
commencing December 31, 1998.
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PROVIDED
THAT
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(a)
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such
royalty rates shall be payable for so long as there is in the USA a
Licensed Patent covering the particular Modified Licensed Product
sold in the USA by GWUS;
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(b)
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if
there is no Licensed Patent covering a particular Modified Licensed
Product sold in the USA by GWUS, the royalty rates applicable to
such Modified Licensed Product shall be reduced to ***** Net Sales
of that Modified Licensed Product respectively, for the relevant
time periods set out above and such royalty rates shall be paid for
a period ***** from the date of first commercial sale of that
Modified Licensed Product in the USA;
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(c)
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if
a Licensed Patent exists in the USA but is declared invalid by a
court of competent jurisdiction from which no appeal has been or
can be made such that it no longer validly covers a particular
Modified Licensed Product sold the said royalty rates shall be
reduced to ***** of Net Sales of that Modified Licensed Product
respectively, for the relevant time periods set out above,
commencing on the date of declaration of invalidity and continuing
for the balance of the period of ***** from the date of first
commercial sale of that Modified Licensed Product in the USA;
and
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(d)
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upon
the expiration of the last-to-expire Licensed Patent in the USA
covering the particular Modified Licensed Product sold in the USA
by GWUS, GWUS shall have no further royalty obligation for sales in
the USA of that Modified Licensed Product
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(I)
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*****
of the total payments made pursuant to subparagraphs 3(G) hereof
shall constitute a “Royalty Credit” to GWUS. Said
Royalty Credit shall be deducted in whole or in part from the
royalties due from GWUS to TLLC in accordance with the procedure,
mutatis mutandis, set forth in subparagraph 3(E). Furthermore the
provisions of subparagraph 3(F) shall apply mutatis mutandis to any
arrangements made by or for the benefit of GWUS with Independent
Third Parties. PROVIDED THAT, irrespective of the number of such
arrangements made with Independent Third Parties, the total
permitted royalty reduction shall not exceed a maximum of *****
from GWUS to TLLC on Net Sales of such Modified Licensed Product in
the USA in the said Calendar Quarter.
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(J)
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Nothing
contained herein shall obligate GROUP or GWUS to pay royalties on
sales of Modified Licensed Product to its Affiliates or its
sublicensees or to pay more than one royalty on sales of any
specific units of Modified Licensed Product
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(A)
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GROUP
shall deliver to TIB for Net Sales in the Territory, and GWUS shall
deliver to TLLC for Net Sales in the USA, written statements of and
the royalties due thereon in each Calendar Quarter, on or before
the thirtieth (30th) day following the end of that Calendar
Quarter. In
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GROUP’s
statements, Net Sales shall be expressed separately for major
countries and convenient groupings of other countries, and
separately where Modified Licensed Product is sold for
significantly different indications.
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(B)
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GROUP
shall, on or before the sixtieth (60th) day following the end of
each Calendar Quarter, pay to TIB or to whomsoever BIOCHEM shall
direct in writing in pounds sterling to a bank designated in
writing by BIOCHEM (or in such other currency or manner as may be
agreed between the parties from time to time), the amount of such
royalties shown in each written statement to be due, less any
permitted deduction pursuant to subparagraph 3(E) and/or 3(F)
hereof. All foreign currencies shall be converted into pounds
sterling or other agreed currency at the rate of exchange published
in the Financial
Times of London or in any other financial source mutually
agreed upon between the parties on the last business day of the
Calendar Quarter in question
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(C)
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GWUS
shall, on or before the sixtieth (60th) day following the end of
each Calendar Quarter, pay to TLLC or to whomsoever BIOCHEM shall
direct in writing in United States dollars to a bank designated in
writing by BIOCHEM (or in such other currency or manner as may be
agreed between the parties from time to time), the amount of such
royalties shown in each written statement to be due, less any
permitted deduction pursuant to subparagraph 3(I)
hereof.
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(D)
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Any
tax which GROUP or its Affiliates or GWUS is required to pay or
withhold with respect to payments to be made to TIB, TLLC or
BIOCHEM hereunder shall be deducted from the amount otherwise due:
PROVIDED THAT, in regard to any such deduction, GROUP shall give
BIOCHEM such assistance as may reasonably be necessary to enable or
assist BIOCHEM to claim exemption therefrom or a reduction thereof
and shall upon request provide documentation from time to time as
to confirm the payment of the tax
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(E)
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GROUP
and GWUS shall each keep books and records in sufficient detail to
determine the calculation of royalties payable by GROUP and GWUS
hereunder. Such books and records shall, at·the request and
expense of BIOCHEM, be made available for reasonable review by an
independent, certified public accountant acceptable to both parties
for the sole purpose of verifying the accuracy of the royalty
payments made by GROUP and GWUS under this Agreement: PROVIDED THAT
if an inaccuracy in the royalty payments of greater than five
percent (5%) is determined by such a review the cost of the review
shall be borne by GROUP or GWUS. Such review shall be conducted no
more frequently than once per Calendar Year and shall be scheduled
during ordinary business hours. Such books and records shall be
retained by GROUP and GWUS for three (3) years from the date of
their origin: PROVIDED THAT, if a review is requested
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during
the third year, each such book and record subjected to review shall
be retained for one (1) year beyond the completion of the
review
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5.
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EXCHANGE OF INFORMATION AND REPORTS
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(A)
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Promptly
upon execution of this Agreement, BIOCHEM shall, insofar as it has
not already done so, and, insofar as it is not precluded by statute
or regulation, communicate to GROUP all Know-How in its possession
at that time. Thereafter, BIOCHEM shall, insofar as it is not
precluded by statute or regulation, promptly communicate to GROUP
all Know-How that it generates or acquires
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(B)
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GROUP
shall promptly provide to BIOCHEM all relevant information related
to the Modified Licensed Product on a timely basis. BIOCHEM shall
have prompt access to marketing plans for Modified Licensed Product
through GROUP. GROUP shall provide to BIOCHEM quarterly written
reports on the progress of the technical development of Modified
Licensed Product. GROUP shall provide BIOCHEM with periodic summary
reports on its progress in seeking regulatory approval for Modified
Licensed Product and of plans for launch of Modified Licensed
Product in the USA and in countries of the Territory and of the
anticipated commercial potential therefor in such
countries
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(C)
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The
parties will each identify individual employees within their
respective organizations who will be responsible as contacts for
the information exchange activities required herein. Each party
will advise the other parties of the identity of its selected
individuals within thirty (30) days following the signing of this
Agreement, and within thirty (30) days of any change to that
selection. The selected individuals will meet at least three (3)
times per year.
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(D)
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BIOCHEM
shall promptly provide to GROUP all information in its possession
or control concerning side-effects, injury, toxicity or sensitivity
reaction and incidents or severity thereof associated with all
uses, studies, investigations or tests with Modified Licensed
Product (animal or human) throughout the world, whether or not
determined to be attributable to Modified Licensed
Product
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(E)
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The
parties will cooperate in arranging scientific meetings, announcing
the results of clinical trials and distributing appropriate
information to the public in a timely manner
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(F)
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GROUP
and its Affiliates shall, at their own expense, pursue with
reasonable diligence and use every reasonable effort to develop
Modified Licensed Product for use in treatment of Hepatitis B.
Although GROUP shall have the principal responsibility for the
development of Modified
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Licensed
Product it shall generally cooperate with BIOCHEM in the
developmental activities
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6.
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EXPLOITATION OF MODIFIED LICENSED PRODUCT
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(A)
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GROUP
shall use commercially reasonable efforts to launch Modified
Licensed Product in such countries of the Territory where it
believes there to be significant commercial potential for Modified
Licensed Product and it shall also use commercially reasonable
efforts, consistent with GROUP’s sound and reasonable
business practice and judgement, to maximize sales of Modified
Licensed Product in such countries of the Territory.
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(B)
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PHARMA
and GWC shall enter into a Partnership Agreement as set out in
Schedule 3 hereto and establish a partnership (hereinafter called
“the Partnership”) to exploit Modified Licensed Product
in Canada.
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(C)
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GWUS
shall use commercially reasonable efforts, consistent with
GWUS’ sound and reasonable business practice and judgment, to
maximize sales of Modified Licensed Product in the USA. GWUS will
hold the NDA for Modified Licensed Product but shall make suitable
reference to PHARMA in compliance with FDA requirements, on all
packaging and promotional materials.
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(D)
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GROUP
shall supply to GWC at GROUP’s expense any and all supplies
of Modified Licensed Product for
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(i)
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clinical
evaluation packages to health care personnel,
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(ii)
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compassionate
use, and
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(iii)
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samples
requested by government.
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(E)
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GROUP
and GWUS shall be free to set prices for Modified Licensed Product
as they choose taking into account cost of manufacture, market
conditions and all other relevant factors but GROUP and GWUS shall
not set such a price with the principal purpose of reducing the
royalties payable to BIOCHEM under this Agreement.
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(A)
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BIOCHEM
shall undertake and/or continue at the expense of, and in full
consultation with, GROUP or its designated Affiliate:
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(i)
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the
filing of any additional patent applications in the Territory and
USA and Canada based upon patent applications set out in Schedule 2
hereto or relating to Modified Licensed Products: PROVIDED THAT
BIOCHEM shall consult with GROUP
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regarding
countries in which such additional patent applications should be
filed and shall also file patent applications in those countries
where GROUP requests that BIOCHEM files;
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(ii)
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prosecuting
all pending and new patent applications included within Licensed
Patents and responding to oppositions or any other form of action
for invalidity or revocation of patent rights filed by third
parties against the grant of patents for such applications [except
as arising under subparagraphs 7(H) and 7(I)]; and
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(iii)
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maintaining
in force any patents and patent applications included within
Licensed Patents by duly filing all necessary papers and paying any
fees required by the patent laws of the particular country in which
such patents were granted or such patent applications were
filed
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(B)
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BIOCHEM
may use independent patent counsel and/or advisors satisfactory to
BIOCHEM and GROUP for the purposes of the activities to be
conducted pursuant to subparagraph 7(A). BIOCHEM shall provide to
GROUP copies of all documents relating to the prosecution of all
patent applications. BIOCHEM shall provide to GROUP every six (6)
months a report on its progress in seeking patent protection
pursuant to subparagraph 7(A)
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(C)
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BIOCHEM
shall notify GROUP in a timely manner of any decision to abandon a
patent application or an issued patent included within Licensed
Patents. Thereafter GROUP shall have the option of continuing to
prosecute any such patent application or of keeping the issued
patent in force
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(D)
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BIOCHEM
shall execute, and BIOCHEM agrees to procure from any inventor(s)
or the beneficiaries or executors of such inventor(s), his or her
agreement to execute all documents and perform all acts, at
GROUP’s expense, reasonably necessary to file, prosecute,
maintain and enforce the Licensed Patents.
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(E)
|
GROUP
and GWUS shall each be entitled to offset all Patent Expenses
incurred by it under this Paragraph 7 against royalties due under
subparagraph 3(B) and 3(H) respectively, in accordance with the
Royalty Credit provisions set forth in subparagraphs 3(E) and
3(I)
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(F)
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GROUP,
GWUS and BIOCHEM shall cooperate fully on all matters relating to
the filing, prosecution and maintenance of Licensed
Patents
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(G)
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Recognizing
the interests of the parties in avoiding disclosures that might
prejudice the Licensed Patents, it is hereby agreed that GROUP,
GWUS and BIOCHEM shall have the right to make publications or
presentations relating to Modified Licensed Product PROVIDED THAT
the party
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intending
to publish shall furnish the other with a copy of the manuscript
for any proposed publication or presentation no later than ninety
(90) days prior to the submission of such proposed publication or
presentation to a journal, editor, or other third party for the
purpose of review and comment. The other party shall have the right
to request modifications of any manuscript to be published or
presented, if such manuscript will jeopardize a patent application,
patent, trade secret, or other proprietary right relating to this
Agreement. If the party intending to publish does not agree with
such modification, the parties shall consult independent patent
counsel satisfactory to both parties, whose determination shall be
binding. Either party shall also have the right to request a
reasonable additional period of time in which to obtain, as
necessary in its sole discretion, additional patent protection,
before information contained in a manuscript is published or
presented by the other
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(H)
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In
the event that BIOCHEM, GROUP or GWUS determines that an
Independent Third Party is making, using, or selling a product that
may infringe a Licensed Patent, it will promptly notify the other
party in writing. GROUP or GWUS may, at its sole option, bring suit
against such alleged infringer. In the event that GROUP or GWUS
decides to bring suit, it shall give prompt written notice to
BIOCHEM of that fact, and BIOCHEM shall take all reasonable steps
to assist GROUP or GWUS in such suit. GROUP or GWUS shall be
entitled to all amounts recovered in such suit, except that BIOCHEM
shall have the right to elect to pay up to ***** of the litigation
costs and receive a percentage of any recovery equal to the
percentage of litigation costs paid. BIOCHEM must make such
election within sixty (60) days of its receipt of GROUP’s or
GWUS’ notice that GROUP or GWUS respectively has decided to
bring suit. BIOCHEM shall also have the right to be represented by
separate counsel at its own expense in any such suit. GROUP or GWUS
shall have control over any such suit, and decisions as to
settlement, methods and/or terms and conditions for resolving the
suit shall be made by GROUP or GWUS after consultation with
BIOCHEM. If GROUP or GWUS elects not to bring a suit against the
alleged infringer, it shall promptly notify BIOCHEM of that fact,
and BIOCHEM shall have the right to commence such action at its own
cost and expense, in which case BIOCHEM shall be entitled to all
amounts recovered in such action. GROUP or GWUS shall take all
reasonable steps to assist BIOCHEM in such suit
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|
(I)
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In
the event that GROUP or its Affiliates or its sublicensee(s) is or
are sued by an Independent Third Party charging patent infringement
for the manufacture, use or sale of a Modified Licensed Product,
GROUP shall promptly notify BIOCHEM and both parties shall meet to
consider a common strategy for responding to the suit. Failure to
agree upon a strategy will result in the matter being referred to
independent patent counsel satisfactory to both parties whose
determination shall be binding. BIOCHEM shall take all reasonable
steps to assist GROUP in the
|
response
to such suit which response shall be progressed by GROUP in full
consultation with BIOCHEM. GROUP shall be entitled to withhold up
to ***** of the royalties otherwise payable to BIOCHEM until such
time as the suit is resolved or settled, and use that withheld
royalty to cover external legal defence costs incurred in such
infringement suit. If GROUP avails itself of the provisions of this
paragraph, GROUP agrees to supply BIOCHEM with documentation to
confirm the legal costs incurred
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(J)
|
BIOCHEM
shall inform GROUP of any change in the status of any patent
related to Residual Products where such change will entitle GROUP
to rights to those Residual Products in this
Agreement.
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Unless
otherwise provided for in this Agreement, the parties shall
treat any and all information and data (including Know-How)
received or derived under this Agreement as strictly
confidential, and shall not disclose the same to any
Independent Third Party for the period of thirty (30) years
from the date first above written, except for information
which:
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(A)
|
is
or shall have been known to the receiving party prior to the
disclosure by the other party as evidenced by written record or
other proof; or
|
|
(B)
|
is
or shall have been public knowledge through no fault of the
receiving party; or
|
|
(C)
|
is
acquired lawfully by the receiving party from a third party that
has no confidentiality obligation to the disclosing party;
or
|
|
(D)
|
the
receiving party needs to disclose to a third party for the purposes
of this Agreement: PROVIDED, HOWEVER, THAT such third party shall
be bound by a similar confidentiality obligation, and the
disclosing party shall take such action as is necessary to procure
that any such information revealed is treated as strictly
confidential, including obtaining a signed confidential disclosure
agreement
|
Notwithstanding
the above, the parties may disclose such
information:
|
(ii)
|
in
the case of GROUP and GWUS, to their Affiliates and employees,
their sublicensees and employees and to Independent Third Party
consultants and contractors subject to such consultants and
contractors entering into suitable secrecy agreements with GROUP,
GWUS or their Affiliates. GROUP, GWUS or their Affiliates shall
promptly notify BIOCHEM of any such agreements and provide copies
of such agreements to BIOCHEM;
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(iii)
|
in
the case of GWC, to its Affiliates and employees, and to
Independent Third Party consultants and contractors subject to such
consultants and contractors entering into suitable secrecy
agreements with GWC or its Affiliates. GWC or its Affiliates shall
promptly notify BIOCHEM of any such agreements and provide copies
of such agreements to BIOCHEM;
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|
(iv)
|
to
competent government agencies; and
|
to
the extent such disclosure is necessary to achieve the
purposes of this Agreement
|
(A)
|
GROUP
shall indemnify, protect and hold BIOCHEM and BIOCHEM’s
directors, officers, employees and agents harmless against any and
all losses, damages, fines, costs, expenses (including
attorneys’ fees) and liabilities (including but not limited
to claims, actions, legal proceedings or lawsuits, based on any
civil or criminal claims of liability, including without
limitation, negligence, gross negligence, recklessness, willful
misconduct, product liability, strict liability, breach of express
or implied warranty, fraud, misrepresentation, or violation of any
statute, regulation or rule) (referred to collectively as
“Liabilities”), asserted at any time arising out of or
involving GROUP’s or its Affiliates’ or
sublicensees’ development, manufacture, use or sale of
Modified Licensed Products. Such indemnification shall not extend
to Liabilities to the extent that they result from the negligence,
recklessness, willful misconduct or fraud of BIOCHEM, its
directors, officers, employees or agents. To the extent such
Liabilities result from the negligence, recklessness or willful
misconduct or fraud of or by BIOCHEM, its directors, officers,
employees and agents, BIOCHEM shall indemnify, protect and hold
harmless GROUP and GROUP’s directors, officers, employees,
agents, Affiliates and sublicensees against any and all such
Liabilities
|
|
(B)
|
A
party seeking indemnification under section 9(A) (hereinafter
called the “Indemnified Party”) shall give prompt
written notification to the party from whom indemnification is
sought (hereinafter called the “Indemnifying Party”) or
any claims, actions, legal proceedings or lawsuits for which the
Indemnified Party may assert indemnification from the Indemnifying
Party under this Agreement. The Indemnifying Party shall have the
right, at its own cost to defend any such claim, action, legal
proceeding or lawsuit. The Indemnified Party shall have the right
to be represented by separate counsel at its own expense, in any
such claim, action, legal proce
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