<PAGE>
EXHIBIT 10.54
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
LICENSE, MANUFACTURING AND SUPPLY AGREEMENT
This Agreement ("AGREEMENT") is made and entered into on February
5, 2002 (the
"EFFECTIVE DATE") by and between:
1.
Shearwater
Corporation, having its principal place of business at
490 Discovery Drive, Huntsville, Alabama, 35806, U.S.A.
("SHEARWATER"); and
2.
Eyetech
Pharmaceuticals, Inc., 666 Fifth Avenue, 35th Floor, New
York, New York, 10103, U.S.A. ("EYETECH").
WHEREAS
A.
EYETECH is
in the business of developing pharmaceutical products,
including in particular a vascular endothelial growth factor
antagonist designated as EYE001, as defined below.
B.
SHEARWATER
has PEGylation technology, including in particular the
LICENSED TECHNOLOGY, for the formulation of pharmaceutical
products
for the treatment of human and animal disease which typically,
among
other benefits, have increased circulating lifetimes and
enhanced
therapeutic utility.
C.
SHEARWATER
has certain rights and rights to sublicense under ENZON
PATENTS to make, have made, use, sell, have sold and import
products
pursuant to a Cross-License Agreement ("CROSS-LICENSE
AGREEMENT")
entered into with Enzon, Inc. ("ENZON") on January 7, 2002.
D.
EYETECH
wishes to use the LICENSED TECHNOLOGY and may wish to
practice technology covered by SHEARWATER'S rights under the
CROSS-LICENSE AGREEMENT in order to apply the REAGENT to EYE001
to
produce the formulation of the PRODUCT.
E.
EYETECH
desires to obtain an exclusive license to the LICENSED
TECHNOLOGY from SHEARWATER to develop, market and sell the
PRODUCT
throughout the
Page 1 of 40
<PAGE>
TERRITORY, and SHEARWATER desires to grant such license to
EYETECH
under the terms and conditions specified herein.
F.
Furthermore, SHEARWATER is also engaged in the business of
manufacturing bulk quantities of pharmaceutical raw materials,
and
possesses the requisite plant, equipment and personnel to
produce
the REAGENT in accordance with the SPECIFICATIONS and all
applicable
governmental regulations, including, without limitation, U.S.
Food
and Drug Administration regulations, and consistent with
EYETECH'S
requirements.
G.
EYETECH
desires SHEARWATER to manufacture and supply bulk quantities
of the REAGENT to EYETECH for the sole purpose of permitting
EYETECH
to make, use and sell the PRODUCT, and SHEARWATER agrees to
undertake the manufacture and supply of the REAGENT specified
under
this AGREEMENT in accordance with all of the terms and
conditions
specified below.
AGREEMENT
1.
Definitions
1.1.
"ACTIVE MOLECULE"
shall mean any molecule that has not been
conjugated to polyethylene glycol, and that has potential or
actual
preventive or therapeutic activity.
1.2.
"AFFILIATE" shall
mean, with respect to any PERSON, any other PERSON
which controls, is controlled by, or is under common control
with,
such PERSON. A PERSON shall be regarded as in control of
another
PERSON if it owns, or controls, at least fifty percent (50%) of
the
voting stock or other ownership interest of the other PERSON, or
if
it possesses the power to direct or cause the direction of the
management and policies of the other PERSON by any means
whatsoever.
1.3.
"BEST EFFORTS" shall
mean that EYETECH shall act in a manner
reasonably calculated to obtain MARKETING AUTHORIZATION and
commercialize and market the PRODUCT, but shall not be required
to:
(a) act in a manner inconsistent with EYETECH'S overall
business
strategy; (b) take action which
Page 2 of 40
<PAGE>
results in a materially adverse change to this AGREEMENT; (c) act
in
a manner contrary to its normal commercial practices; or (d)
commence any litigation.
1.4.
"BIOLOGICS LICENSE
APPLICATION" shall mean a Biologics License
Application, as defined in the U.S. Federal Food, Drug, and
Cosmetics Act, as amended, and the regulations promulgated
thereunder, and any corresponding supranational, foreign or
domestic
MARKETING AUTHORIZATION application, registration or
certification,
necessary or useful to market the PRODUCT in the TERRITORY.
1.5.
"CONTROLLED" shall
mean the ability to grant a license or sublicense
as contemplated herein without violating the terms of any
agreement
or other arrangement with any THIRD PARTY.
1.6.
"DOLLARS" shall mean
U.S. dollars.
1.7.
"EMEA" shall mean the
European Medicines Evaluation Agency, and any
successor agency thereto, having the administrative authority
to
regulate the marketing of human pharmaceutical products or
biological therapeutic products, delivery systems and devices in
the
European Union.
1.8.
"ENZON PATENTS" shall
mean (a) all patent applications owned or
CONTROLLED by Enzon, Inc. ("ENZON") or its AFFILIATES that [**])
all
patents owned or CONTROLLED by ENZON or the ENZON AFFILIATES
that
[**]). For clarity, excluded from ENZON PATENTS are patents and
patent applications [**]. Further excluded from ENZON PATENTS
are
[**]. The ENZON PATENTS include those listed on Schedule IV.
1.9.
"EYE001" shall mean
EYETECH'S lead compound as of the EFFECTIVE
DATE, known to EYETECH as "EYE001," an anti-VEGF aptamer.
1.10.
"FDA" shall mean the U.S. Food and Drug Administration, and any
successor agency thereto, having the administrative authority
to
regulate the marketing of human pharmaceutical products or
biological therapeutic products, delivery systems and devices in
the
United States.
Page 3 of 40
<PAGE>
1.11.
"FIRST COMMERCIAL SALE" shall mean, with respect to any PRODUCT,
the
first sale for use or consumption by the general public of such
PRODUCT. A transfer of the PRODUCT by EYETECH, its AFFILIATES or
its
SUBLICENSEES (a) solely for research and development purposes
and
for the purpose of directly enabling EYETECH, its AFFILIATES and
its
permitted SUBLICENSEES to research and develop PRODUCTS under
this
AGREEMENT and (b) prior to EYETECH'S receipt of MARKETING
AUTHORIZATION from the FDA (or from the governing health
authority
of
any other country) for use of such PRODUCT in humans, shall not
be considered a FIRST COMMERCIAL SALE, except in the case of (b)
to
the extent such PRODUCT is purchased for sale to a THIRD PARTY
end
user after such Marketing Authorization is obtained.
1.12.
"GOOD MANUFACTURING PRACTICES" or "GMP" shall mean the current
good
manufacturing practices required by the FDA and set forth in
the
Food, Drug and Cosmetics Act or FDA regulations, policies or
guidelines in effect at a particular time for the manufacturing
and
testing of pharmaceutical materials.
1.13.
"ICH" shall mean the International Conference on Harmonization.
1.14.
"LAW" means any local, state or federal rule, regulation, statute
or
law in any jurisdiction relevant to the activities undertaken
pursuant to this AGREEMENT or applicable to either of the
parties
with respect to any matters set forth herein.
1.15.
"LICENSED TECHNOLOGY" shall mean, collectively, the SHEARWATER
PATENT RIGHTS and the SHEARWATER KNOW-HOW.
1.16.
"MARKETING AUTHORIZATION" shall mean such governmental approval
for
the marketing of the PRODUCT in a country or countries in the
TERRITORY as is necessary to enable EYETECH, its AFFILIATES, or
its
SUBLICENSEES to sell and distribute lawfully the PRODUCT to
such
countries in the TERRITORY.
1.17. "NET
INVOICED SALES" means the actual amount invoiced for PRODUCT
sold less (a) [**]; (b) [**]; (c) [**]; (d) [**], (to the
extent
separately stated on the invoice and billed to the purchaser);
(e)
[**] the PRODUCT to the extent identified specifically on the
invoice, (f) [**] , provided that where the PRODUCT is:
Page 4 of 40
<PAGE>
1.17.1. sold by EYETECH [**]; or
1.17.2. sold to any AFFILIATE of EYETECH;
the NET INVOICED SALES amount of each such PRODUCT shall be
[**].
For sales made by SUBLICENSEES of EYETECH, the NET INVOICED
SALES
amount shall be [**] the PRODUCT, which shall also be subject
to
Sections 1.17.1 and 1.17.2.
1.18. "NET
SALES" shall mean the aggregate of the NET INVOICED SALES of
all PRODUCT sold by EYETECH, its AFFILIATES and SUBLICENSEES.
1.19.
"PEG" shall mean poly (ethylene glycol).
1.20.
"PEGYLATION", with a correlative meaning for "PEGYLATED", shall
mean
[**] bonding of polyethylene glycol [**] with or to other
materials,
including but not limited to proteins, peptides, biomolecules,
small
molecules, therapeutic agents, diagnostic agents, imaging
agents,
implanted devices, and equipment. "PEGYLATION" shall include
the
synthesis, derivatization, characterization, and modification
of
polyethylene glycol for such purposes, together with the
synthesis,
derivatization, characterization, and modification of the raw
materials and intermediates for the manufacture of the REAGENT
or
PRODUCT by means of [**] bonding, and all methods of making and
using each and all of the foregoing. For clarity, PEGYLATION
shall
[**].
1.21.
"PERSON" shall mean an individual, corporation, partnership,
limited
liability company, trust, business trust, association, joint
stock
company, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization, governmental authority, or any
other
form of entity not specifically listed herein.
1.22.
"PRODUCT" shall mean a product produced by linking EYE001 to
the
REAGENT.
1.23.
"REAGENT" shall mean [**].
1.24.
"ROYALTY TERM" shall mean, with respect to each PRODUCT in each
country in the TERRITORY, the period of time equal to the longer
of
(a) [**] years from
Page 5 of 40
<PAGE>
the date of the FIRST COMMERCIAL SALE of such PRODUCT in such
country, or (b) if the manufacture, use or sale of such PRODUCT
in
such country is covered in whole or in part by a VALID PATENT
CLAIM,
the term for which such VALID PATENT CLAIM remains in effect.
1.25.
"SHEARWATER CORE TECHNOLOGY" shall mean technology relating to
the
[**], including, without limitation, the SHEARWATER KNOW-HOW and
the
SHEARWATER PATENT RIGHTS.
1.26.
"SHEARWATER KNOW-HOW" shall mean (a) all technical, scientific
and
other know-how, information, trade secrets, knowledge,
technology,
ideas, concepts, formulae, procedures, methods, processes,
protocols, techniques, materials and results of experimentation
and
testing, including samples, data, results and other materials,
(whether or not patented or patentable) in written, electronic
or
any other form, in which SHEARWATER has an ownership or
licensable
interest; and (b) which are necessary or useful for EYETECH to
make,
use, develop, sell or seek MARKETING AUTHORIZATION to market a
PRODUCT, or otherwise necessary or useful to practice the
licenses
granted under this AGREEMENT.
1.27.
"SHEARWATER PATENT RIGHTS" shall mean all of the legal rights
conferred upon SHEARWATER under the patents and patent
applications
listed in Schedule III in the TERRITORY and all provisionals,
converted provisionals, non-provisional U.S. applications,
continuations, divisionals, continuations-in-part, or
substitutes
thereof and all patents issuing therefrom or reexamination,
reissues
or extensions of said patents and all foreign counterparts of
said
applications and patents, and which are necessary or useful to
produce and sell the PRODUCT. Schedule III sets forth the status
of
the patents included in the SHEARWATER PATENT RIGHTS as of the
time
this AGREEMENT is executed. Schedule III may be updated from time
to
time to list any other patents or patent applications which
become
included in the SHEARWATER PATENT RIGHTS.
1.28.
"SHEARWATER'S MANUFACTURING COST" shall mean the sum of the
following costs incurred by SHEARWATER, [**] to the REAGENT sold
to
EYETECH by SHEARWATER, and to other services performed by
SHEARWATER
for EYETECH: [**] relating to the [**], including, without
limitation, [**] related to the [**] pursuant to Section 4, and
the
[**].
Page 6 of 40
<PAGE>
1.29.
"SPECIFICATIONS" shall mean the specifications of the REAGENT
set
forth in Schedule I hereto. The SPECIFICATIONS and test methods
listed in Schedule I may be modified at any time but only by
the
mutual agreement of both parties as set forth in Section 5.3.
Any
such modification to the SPECIFICATIONS shall be rendered into
writing and appended at Schedule I.
1.30.
"SUBLICENSEE" shall mean any PERSON, including AFFILIATES, to
which
EYETECH grants a sublicense to develop, make, have made, use,
import, export, offer for sale and sell the PRODUCT.
SUBLICENSEE
shall not include distributors or other parties to which
EYETECH
sells the PRODUCT in the ordinary course of business, or
manufacturers or contract synthesis facilities which produce
the
active molecule in EYE001 for EYETECH.
1.31.
"TERRITORY" shall mean the world.
1.32.
"THIRD PARTY" shall mean any party other than SHEARWATER,
EYETECH
and their respective AFFILIATES.
1.33.
"VALID PATENT CLAIM" shall mean either (a) a claim of an issued
and
unexpired patent included within the SHEARWATER PATENT RIGHTS
or
ENZON PATENTS which has not been held unenforceable, unpatentable
or
invalid by a decision of a court or other governmental agency
of
competent jurisdiction, unappealable or unappealed within the
time
allowed for appeal, and which has not been admitted to be invalid
or
unenforceable through reexamination, reissue, disclaimer or
otherwise, or
(b) a claim of a pending patent application included
within the SHEARWATER PATENT RIGHTS or ENZON PATENTS, which
claim
has not been abandoned or finally disallowed without the
possibility
of appeal or refiling of such application.
1.34. The
following schedules are attached hereto and incorporated in and
are deemed to be an integral part of this AGREEMENT:
Schedule I
THE SPECIFICATIONS
Schedule II
REMUNERATION AND
INITIAL FORECAST
Schedule III
SHEARWATER PATENT RIGHTS
Page 7 of 40
<PAGE>
Schedule IV
ENZON PATENTS
2.
Representations and Warranties
2.1.
By Both Parties. Each
party represents and warrants to the other
that: (a) it has the full right and power to enter into and
perform
this AGREEMENT; (b) this AGREEMENT constitutes its legal, valid
and
binding obligation; (c) to the best of its knowledge, there are
no
agreements or arrangements between such party and any THIRD
PARTY
which could prevent it from, or conflict with such party's
carrying
out all of its obligations hereunder, including (without
limitation), in the case of SHEARWATER, its grant to EYETECH of
the
licenses described in Section 3.1 below; (d) to the best of its
knowledge, it has sufficient legal and/or beneficial title under
its
intellectual property rights necessary for the purposes
contemplated
under this AGREEMENT and to grant the licenses contained in
this
AGREEMENT; (e) to the best of its knowledge, it is not aware of
any
material communications alleging that it has violated or, by
conducting its obligations as currently proposed under this
AGREEMENT, it would violate any of the intellectual property
rights
of any THIRD PARTY; and (f) all of its employees, officers and
consultants have executed agreements requiring assignment to
the
party of all inventions made during the course of and as a result
of
their association with such party and obligating the individual
to
maintain as confidential the CONFIDENTIAL INFORMATION of such
party,
as set forth in Section 9 herein.
2.2.
By SHEARWATER. In
addition to the representations and warranties set
forth in Section 5.2, SHEARWATER represents and warrants to
EYETECH
that:
2.2.1. As of the EFFECTIVE DATE, SHEARWATER is not aware of:
(A) any existing
claims or litigation brought by a THIRD
PARTY
under any THIRD PARTY patent, trade secret or
other THIRD PARTY proprietary right in respect of
SHEARWATER'S exploitation of the LICENSED TECHNOLOGY;
(B) any basis
upon which practice of the inventions
described in the SHEARWATER PATENT RIGHTS or KNOW-HOW
would infringe on the rights of THIRD PARTIES; or
Page 8 of 40
<PAGE>
2.2.2. any licenses or restrictions other than those included
herein on its or its licensees' ability to practice the
LICENSED TECHNOLOGY.
2.2.3. SHEARWATER has made or will make available to EYETECH
all material technical information in its possession of which
it is aware that is pertinent to the development, manufacture,
commercialization or use of the PRODUCT, and useful or
necessary to enable EYETECH to exercise its rights under this
AGREEMENT.
2.2.4. SHEARWATER shall comply with all applicable present and
future LAWS applicable to the transportation, storage, use
handling and disposal of hazardous materials. SHEARWATER has
and will maintain during the term of this AGREEMENT all
government permits, including without limitation health,
safety and environmental permits necessary for the conduct of
the activities that SHEARWATER undertakes pursuant to this
AGREEMENT.
2.3. By EYETECH.
EYETECH warrants to SHEARWATER that it will use
its BEST EFFORTS to seek MARKETING AUTHORIZATION, and develop,
commercialize and market the PRODUCT by [**]. If EYETECH
believes that it cannot, within the exercise of reasonable
business judgment, commercialize the PRODUCT in one or more
countries in the TERRITORY by [**], then EYETECH may request
from SHEARWATER an extension of time, and the parties shall
negotiate in good faith to determine a time extension that is
mutually acceptable. In the event that EYETECH does not use
BEST EFFORTS in this regard, the licenses granted to EYETECH
in Section 3.1 [**]. In the event that the licenses granted to
EYETECH in Section 3.1 [**] of the TERRITORY as provided for
herein above, EYETECH'S obligations to pay milestones and
royalties to SHEARWATER, as provided for in this AGREEMENT,
shall continue. Notwithstanding the foregoing, in the event
EYETECH does not use at least reasonable efforts to develop,
seek MARKETING AUTHORIZATION, commercialize and market the
PRODUCT in [**] in the TERRITORY by [**] or such later date as
mutually agreed to by the parties, it shall be deemed a
material breach of this AGREEMENT by EYETECH and SHEARWATER
may terminate this AGREEMENT under Section 11.4.
Page 9 of 40
<PAGE>
2.4. Limitation of
Liability. EXCEPT AS EXPRESSLY PROVIDED
ELSEWHERE IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF ANY OF THE TERMS
OR CONDITIONS OF THIS AGREEMENT OR WITH RESPECT TO ITS
PERFORMANCE HEREUNDER, EXCEPT WHERE SUCH DAMAGES WERE CAUSED
BY NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY.
Notwithstanding the foregoing, each party shall be liable to
the other for special, indirect, incidental, consequential,
punitive or exemplary damages arising out a breach of the
non-disclosure and non-use obligations under Section 9.
Nothing in this Section 2.4 is intended to limit either
party's obligations under Section 10.
2.5. EXCEPT AS SET
FORTH IN THIS AGREEMENT, SHEARWATER AND EYETECH
DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
3. Grant
of Licenses
3.1.
Grant.
(A) Subject to
the terms and conditions of this AGREEMENT,
SHEARWATER hereby grants to EYETECH, for the term of this
AGREEMENT, an exclusive license (with the right to grant
sublicenses as set forth in Section 3.2 below) under the
LICENSED TECHNOLOGY to develop, make, have made, use, import,
offer for sale and sell the PRODUCT in the TERRITORY.
(B) Subject to
the terms and conditions of this AGREEMENT,
SHEARWATER shall grant to EYETECH, until the last-to-expire
VALID PATENT CLAIM of ENZON PATENTS, a sole license (with the
right to grant sublicenses as set forth in Section 3.2 below)
under those rights SHEARWATER has to the ENZON PATENTS, solely
to develop, make, have made, use, import, offer for sale and
sell in the TERRITORY that version of the PRODUCT that [**].
Such license shall be subject to the retained rights of ENZON
and the ENZON AFFILIATES to practice all the
Page 10 of 40
<PAGE>
inventions described and claimed in the ENZON PATENTS for the
conduct of research and development (such purposes not
including in connection with human clinical trials) of
pharmaceutical products that it is developing either itself,
with its AFFILIATE, or in conjunction with a THIRD PARTY.
(C) Subject to
the terms and conditions of this AGREEMENT,
SHEARWATER shall grant to EYETECH, for the sole purpose of,
and with respect to and only with respect to, the manufacture,
use, sale, offer for sale, and importation in the TERRITORY of
that version of the PRODUCT that [**], a non-exclusive license
under those rights SHEARWATER has:
(I) to patents
or patent applications (other than the ENZON
PATENTS) owned or CONTROLLED by ENZON or the ENZON
AFFILIATES; and
(II) all patent claims
owned or CONTROLLED by ENZON or the
ENZON AFFILIATES that (x) are not within the ENZON
PATENTS or the PATENTS in subclause (i) above; (y) [**];
and (z) claim the composition, manufacture, or use of
that version of [**].
The license granted under this Section 3.1(c) excludes [**].
The license granted under this Section 3.1(c) shall remain in
effect on a country-by-country basis until the longer of (1)
the [**] anniversary of the FIRST COMMERCIAL SALE of the
PRODUCT in a particular country, or (2) the expiration of the
last-to-expire VALID PATENT CLAIM of the ENZON PATENTS
claiming the composition, manufacture, or use of such PRODUCT
in such country.
3.2.
Sublicenses. EYETECH
shall have the right to grant sublicenses under
the licenses in Section 3.1 above to any THIRD PARTY or
AFFILIATE,
provided that, under each sublicense, each SUBLICENSEE shall be
subject to terms and conditions that are consistent with the
terms
and conditions of this AGREEMENT as applicable; provided,
however,
that [**] this AGREEMENT.
Page 11 of 40
<PAGE>
3.3.
ENZON Patent
Rights.
3.3.1. EYETECH agrees and acknowledges that the availability of
the
licenses to be granted under Sections 3.1(b) and 3.1(c) are
subject to the following condition precedent: EYETECH must
[**] with the [**]PRODUCT: [**] in the PRODUCT[**] and the
[**] to be [**] to be used to [**] of the [**], to the extent
known[**], to the extent known[**] PRODUCT with [**]; so that
[**] the PRODUCT and that such license [**]. In the event that
[**] product [**] as the PRODUCT and that the [**], the
licenses under Sections 3.1(b) and 3.1(c) shall be [**]. If,
at anytime during the term of this AGREEMENT, EYETECH wishes
to make, use, import, export, offer for sale and sell in the
TERRITORY [**] EYETECH shall [**] of the PRODUCT, [**] of
PRODUCT based on those terms provided in this AGREEMENT.
3.3.2. EYETECH agrees and acknowledges that any such licenses to
be
granted under Sections 3.1(b) and 3.1(c) are subject to the
following limitations and conditions:
(A) Such
licenses shall [**];
(B) Such
licenses shall [**];
(C) Such
licenses shall [**] the PRODUCT
(D) [**]Such
licenses shall [**] a product with the [**]
(E) Such
licenses shall [**] the PRODUCT [**];
(F) Such
licenses shall [**] the PRODUCT [**];
(G) EYETECH
shall [**] for such PRODUCT, [**];
(H) [**]EYETECH
shall [**];
(I) Subject to
any prior termination, such licenses shall
[**]; and
(J) Such
licenses shall [**].
3.4. SHEARWATER
Covenant. SHEARWATER covenants that, during the
term of this AGREEMENT, and subject to the terms of this
AGREEMENT, it will not grant
Page 12 of 40
<PAGE>
any THIRD PARTY a license under the LICENSED TECHNOLOGY or its
rights under the ENZON PATENTS to, and shall not itself, make,
have made, use, sell or have sold the PRODUCT in the
TERRITORY. Furthermore, SHEARWATER covenants that, during the
term of this AGREEMENT, it will not enter into any agreement
with a THIRD PARTY in which it licenses the LICENSED
TECHNOLOGY to such THIRD PARTY for use in making, using,
selling or importing products which [**]. Notwithstanding the
foregoing, the parties understand and agree that any agreement
existing as of the EFFECTIVE DATE between SHEARWATER and a
THIRD PARTY, under which SHEARWATER grants a license, a
license option or other rights under SHEARWATER'S LICENSED
TECHNOLOGY, is not subject to the foregoing indication
limitation.
3.5. EYETECH
Covenant.
3.5.1. EYETECH hereby covenants that it will refrain from
judicially challenging the validity or enforceability
of any ENZON PATENTS and will contractually restrict
its SUBLICENSEES from similarly challenging the
validity or enforceability of the ENZON PATENTS. In the
event EYETECH or its SUBLICENSEES so challenge the
ENZON PATENTS: (a) EYETECH shall pay for all attorney's
fees, costs of suit, and other out-of-pocket expenses
incurred by ENZON and/or SHEARWATER in resisting or
opposing such challenge in the event that such
challenge is not successful; and (b) EYETECH'S and its
SUBLICENSEES' sublicense rights to such ENZON PATENTS
shall terminate.
3.5.2. EYETECH hereby covenants that it will refrain from
judicially challenging the validity or enforceability
of any SHEARWATER PATENT RIGHTS and will contractually
restrict its SUBLICENSEES from similarly challenging
the validity or enforceability of the SHEARWATER PATENT
RIGHTS. In the event EYETECH or its SUBLICENSEES so
challenge the SHEARWATER PATENT RIGHTS: (a) EYETECH
shall pay for all attorney's fees, costs of suit, and
other out-of-pocket expenses incurred by SHEARWATER in
resisting or opposing such challenge in the event that
such challenge is not successful; and (b) EYETECH'S and
its SUBLICENSEES' sublicense rights to such SHEARWATER
PATENT RIGHTS shall terminate.
4.
Manufacture and Supply of the Reagent
4.1.
Exclusivity.
SHEARWATER will manufacture and supply one hundred
percent (100%) of EYETECH'S, its AFFILIATES' and SUBLICENSEES'
purchase requirements of the REAGENT for the manufacturing of
the
PRODUCT.
Page 13 of
40
<PAGE>
EYETECH, its AFFILIATES and SUBLICENSEES will purchase the
REAGENT
exclusively from SHEARWATER for the manufacture of the PRODUCT,
subject to Sections 4.7 and 4.8.
4.2.
Audit. During the term
of this AGREEMENT, SHEARWATER shall supply
the REAGENT for use in manufacturing PRODUCT exclusively to
EYETECH,
its AFFILIATES and SUBLICENSEES. Upon reasonable advance
notice,
EYETECH shall grant to SHEARWATER reasonable access to
EYETECH'S
books and records during normal business hours for the purpose
of
verifying EYETECH'S compliance with the purchase requirement in
Section 4.1 above.
4.3.
Minimum Purchases and
Rolling Forecast. As soon as practicable after
the EFFECTIVE DATE the parties shall mutually agree upon the
contents of Schedule II which shall set forth the minimum
purchase
requirements of EYETECH for the REAGENT for the [**] calendar
quarters immediately following the EFFECTIVE DATE. EYETECH shall,
at
least thirty (30) days prior to the commencement of the [**]
each
successive calendar quarter following the EFFECTIVE DATE,
furnish
SHEARWATER with a rolling forecast of its requirements of the
REAGENT during the forthcoming [**] calendar quarters, with the
required quantities for the first [**] calendar quarters to be
a
binding order for supply of the REAGENT and the forecast for
the
remaining [**]) calendar quarters to be an estimate only.
Notwithstanding the foregoing, (i) SHEARWATER shall only be bound
to
supply up to [**] percent ([**]%) of the initial forecast for
any
calendar quarter. In the event that EYETECH'S forecast exceeds
[**]
percent ([**]%) of the initial forecast for any calendar
quarter,
then the parties will meet in good faith to discuss how
SHEARWATER
can meet the
revised forecast, and (ii) in no event shall EYETECH
purchase less than [**] percent ([**]%) of the initial forecast
for
any calendar quarter.
4.4.
Purchase Orders.
EYETECH will order the REAGENT from SHEARWATER by
means of a standard EYETECH purchase order and SHEARWATER shall
ship
or cause the REAGENT to be shipped pursuant to its standard
shipping
documents; provided, however, that all terms and conditions
respecting any orders of REAGENT other than quantity and
delivery
dates shall be governed exclusively by the terms of this
AGREEMENT.
Such EYETECH purchase order
Page 14 of 40
<PAGE>
shall specify the quantity and delivery date of the REAGENT.
However, in case of inconsistency between the purchase order or
the
standard shipping documents and the terms and conditions of
this
AGREEMENT,
the terms and conditions of this AGREEMENT or any
modification of this AGREEMENT agreed to in writing by the
parties
shall govern as to matters dealt with in this AGREEMENT, any
such
inconsistent terms in such purchase order or shipping documents
are
hereby expressly rejected. EYETECH shall, at least thirty (30)
days
prior to the commencement of the third and each successive
calendar
quarter following the EFFECTIVE DATE, provide SHEARWATER with a
written purchase order for such calendar quarter. Any such
purchase
order shall be sent to the attention of SHEARWATER'S Sales
Manager.
4.5.
Fulfillment. To the
extent that any orders for REAGENT do not exceed
[**] percent ([**]%) of EYETECH'S forecast for a respective
calendar
quarter, and to the extent forecasts and purchase orders are
submitted as provided hereunder, SHEARWATER shall commence
fulfilling these orders no later than: (a) [**] of the date an
order
is placed; or (b) any other mutually agreed upon delivery date.
If
SHEARWATER determines that it cannot commence fulfilling an order
by
the later of [**] of the date an order is placed or any other
agreed
upon delivery date, then SHEARWATER will promptly notify EYETECH
in
writing within [**] hours of such determination. To the extent
that
such order for REAGENT does not exceed [**] percent ([**]%) of
EYETECH'S forecast for a respective calendar quarter, and to
the
extent that such purchase order is submitted as provided
hereunder,
the provisions of Section 4.7 apply.
4.6.
Payment of Invoices.
SHEARWATER shall send invoices to EYETECH for
the REAGENT shipped to EYETECH no earlier than the date on which
the
REAGENT is placed aboard the carrier at the point of shipment
from
the place of manufacture or storage owned or controlled by
SHEARWATER. All shipments of REAGENT will be delivered to EYETECH
at
the address first set forth above. All risk of loss or damage
to
REAGENT shall transfer upon delivery to such destination. All
invoices will be in DOLLARS, payable to SHEARWATER, at the
address
provided above or such other address as SHEARWATER may from time
to
time
