<PAGE>
Exhibit 10.16
EXECUTION COPY
DEVELOPMENT, COMMERCIALIZATION
AND MARKETING AGREEMENT
BETWEEN
ALTUS BIOLOGICS INC.
AND
DR. FALK PHARMA GMBH
DECEMBER 23, 2002
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 406 OF THE SECURITIES ACT.
<PAGE>
DEVELOPMENT, COMMERCIALIZATION AND MARKETING AGREEMENT
This
Development, Commercialization and Marketing Agreement
("Agreement")
dated as of December 23, 2002, by and between Altus Biologics Inc.,
a Delaware
corporation, with its principal office at 625 Putnam Avenue,
Cambridge, MA 02139
("ALTUS"), and Dr. Falk Pharma GmbH, a German corporation, with its
principal
office at Leinenweberstra(beta)e 5, 79041 Freiburg Germany
("FALK"). ALTUS and
FALK are sometimes referred to herein individually as a "Party" and
collectively
as the "Parties."
RECITALS
1. ALTUS
has developed a certain pharmaceutical compound known as
TheraCLEC(TM)-Total (defined below) and has certain intellectual
property rights
and development capabilities related thereto.
2. FALK
has development, marketing, distribution and sales capabilities
in
many countries in the Territory (defined below).
3. ALTUS
and FALK wish to use their respective capabilities to conduct
development of TheraCLEC-Total in a collaborative fashion so that
the resources
and expertise of each is put to good use.
4. By
combining the development experience and expertise of both FALK
and
ALTUS, the Parties wish to expedite the regulatory approval of
TheraCLEC-Total
as a significant new therapeutic in the Territory.
5. ALTUS
wishes to grant to FALK, and FALK wishes to obtain, a license
under ALTUS' intellectual property rights with respect to
TheraCLEC-Total to
permit FALK to participate in collaborative TheraCLEC-Total product
development
and market TheraCLEC-Total in the Field in the Territory under the
terms and
conditions set forth below.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants
and agreements herein contained, and for other good and valuable
consideration,
the receipt and sufficiency of which is hereby acknowledged, the
Parties,
intending to be legally bound hereby, do hereby agree as
follows:
ARTICLE 1.
DEFINITIONS
The
following capitalized terms, whether used in the singular or
the
plural, shall have the following meanings as used in this Agreement
unless
otherwise specifically indicated:
1.1
"AFFILIATE" shall mean any corporation, firm, limited liability
company, partnership or other entity, which directly or indirectly
controls or
is controlled by or is under common control with a Party to this
Agreement. For
the purposes of this Section 1.1, "control" means ownership,
directly or through
one or more Affiliates, of fifty percent (50%) or more of the
shares of stock
entitled to vote for the election of directors, in the case of a
corporation, or
fifty percent (50%) or more of the equity interests in the entity,
in the case
of any other type of legal entity, status as a general partner in
any
partnership, or any other arrangement whereby a party controls or
has the right
to control the direction of the management or policies of an
entity, whether
through the ownership of voting securities, by contract or
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 406 OF THE SECURITIES ACT.
<PAGE>
otherwise. For the avoidance of doubt, the Parties agree that a
company is
deemed to be under "common control with" another company if the two
companies
are owned or controlled by the same group of individuals.
1.2 "ALTUS
BACKGROUND TECHNOLOGY" shall mean any inventions (whether
patentable or not) and Know-How owned or controlled by ALTUS prior
to the
Effective Date.
1.3 "ALTUS
DEVELOPMENT COSTS" shall have the meaning set forth in Exhibit
C to this Agreement.
1.4 "BASE
PATENTS" shall have the meaning set forth in Section 1.29.
1.5 "CGMP"
shall mean the regulatory requirements for current good
manufacturing practices promulgated (1) under the Common Technical
Document for
the Registration of Pharmaceuticals for Human Use (ICH CTD)
Guidelines and the
ICH Good Manufacturing Practice Guide, as the same may be amended
from time to
time, and (2) by the United States Food and Drug Administration
("FDA") under
the U.S. Food, Drug and Cosmetic Act ("FD&C Act") and the
regulations
promulgated thereunder, particularly 21 C.F.R. Section 210 et seq.,
and 21
C.F.R. Section 211 at seq., respectively, and related guidance
documents, as the
same may be amended from time to time.
1.6
"CLINICAL SUPPLIES" shall mean supplies of the Licensed
Product,
manufactured, packaged and labeled in such form and strength as
agreed by the
Parties, and ready to be used for the conduct of human clinical
trials of the
Licensed Product in the Field by the Parties.
1.7
"COMBINED PHASE III CLINICAL TRIAL" shall mean an international
Phase
III clinical trial as set forth in 21 C.F.R. Section 312.21 et seq.
which is
performed consistent with the ICH Guidelines and the guidelines of
the United
States Food and Drug Administration ("FDA") and the EMEA.
1.8
"COMMERCIALLY REASONABLE AND DILIGENT EFFORTS" shall mean with
respect
to development and commercialization, a Party's use of commercially
reasonable
efforts and resources for a company of its size consistent with (i)
the exercise
of prudent scientific and business judgment for a lead product of
its type and
(ii) such Party's efforts with respect to other lead products in
its product
pipeline, and in each case taking into consideration the impact of
such efforts
and resources on the development and commercialization of the
Licensed Product
in the Territory as a whole.
1.9
"CONTROLLED" with respect to the Licensed Product Patents or
the
Licensed Product Know-how shall mean the ability of a Party to
grant a license
or sublicense to such Licensed Product Patents or Licensed Product
Know-how as
provided for herein without violating the terms of any agreement or
other
arrangement with any Third Party existing and in effect at the time
such Party
would be required hereunder to grant the other Party such license
or sublicense.
1.10
"COVER" (including variations such as "Covered", "Covering" and
the
like) shall mean that the manufacture, use, sale, offer for sale,
or importation
of a particular product would infringe an issued or pending claim
of a patent or
patent application (if that claim were to issue in a patent) in the
absence of
rights under such patent, as determined on a country-by-country
basis.
1.11
"DISTRIBUTOR" shall mean a Third Party that purchases the
Licensed
Product from FALK or its Affiliates at a price that is - on a
country-by-country-basis - less than or equal to [****] of the
IMS-Price in the
country in which the Licensed Product shall be sold to end-user
customers.
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 406 OF THE SECURITIES ACT.
<PAGE>
1.12 "DRUG
APPROVAL APPLICATION" shall mean an application for Regulatory
Approval required for commercial sale or use of the Licensed
Product as a drug
in the Field in the Territory.
1.13
"EFFECTIVE DATE" shall mean the date first written above.
1.14
"EMEA" means the European Medicines Evaluation Agency.
1.15
"EUROPEAN DEVELOPMENT AND COMMERCIALIZATION PLAN" shall mean the
plan
for development and commercialization of the Licensed Product as
set forth in
Section 2.2, as may be amended from time to time.
1.16 "FALK
BACKGROUND TECHNOLOGY" shall mean any inventions (whether
patentable or not) and Know-How owned or controlled by FALK prior
to the
Effective Date.
1.17 "FALK
DEVELOPMENT COSTS" shall have the meaning set forth in Exhibit
C to this Agreement.
1.18 "FALK
MARKETING COSTS" shall have the meaning set forth in Exhibit C
to this Agreement.
1.19
"FIELD" shall mean the treatment of symptoms (e.g. malabsorption
or
pain) directly caused by exocrine pancreatic insufficiency.
1.20
"FIRST COMMERCIAL SALE" shall mean the first sale of the
Licensed
Product in any particular country in the Territory by FALK for use
by the
general public after all required marketing and pricing approval
has been
granted by the governing authorities of that country or, if no such
approval is
required, the date of first commercial sale of the Licensed Product
in such
country.
1.21
"GERMAN EX-FACTORY PRICE" shall mean the [****] sales price
(ex-factory in Germany) at which the Licensed Product is sold by
FALK or its
Affiliates to any non-Affiliated Third Party in Germany.
1.22 "ICH
GUIDELINES" means the finalized published guidelines of the
International Conference on Harmonization of Technical Requirements
for the
Registration of Pharmaceuticals for Human Use.
1.23 "IMS
PRICE" shall mean the price - [************************] - at
which the Licensed Product is sold to wholesalers in a country in
the Territory
as evidenced in the Intercontinental Medical Statistics ("IMS") for
such
country.
1.24
"INVENTION" shall mean any invention (whether or not patentable)
or
Know-how made after the Effective Date during the course of, in
furtherance of,
and as a direct result of the activities of the Parties hereunder.
An
"Invention" may be made by employees of ALTUS solely or jointly
with a Third
Party, by employees of FALK solely or jointly with a Third Party,
or jointly by
employees of ALTUS and FALK with or without a Third Party.
1.25
"KNOW-HOW" shall mean all proprietary information, trade
secrets,
techniques, data (including Confidential Information as defined in
Article 10
below), discoveries, formulae, materials, practices, methods,
knowledge,
know-how, processes, experience, test data (including
pharmacological,
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 406 OF THE SECURITIES ACT.
<PAGE>
toxicological and clinical information and test data), analytical
and quality
control data, marketing, pricing, distribution, cost and sales data
or
descriptions.
1.26
"THIRD PARTY LICENSED II" shall mean any patents; know-how and
other
intellectual property licensed to ALTUS by a Third Party as of the
Effective
Date, the practice of which is necessary to make, use or sell
Licensed Product
in the Field in the Territory, including the intellectual property
licensed to
ALTUS by
[*********************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
******************************], in connection with the development
of certain
enzyme materials and the manufacturing of pharmaceutical products
known as
TheraCLECTotal(TM) (as defined below).
1.27
"LICENSED PRODUCT" shall mean any pharmaceutical form, dosage,
strength, or formulation of TheraCLEC-Total purchased from
ALTUS.
1.28
"LICENSED PRODUCT KNOW-HOW" shall mean Know-how which: (a) is
Controlled by ALTUS as of the Effective Date or hereafter during
the Term of
this Agreement, and (b) is necessary to manufacture, commercialize,
market, sell
and distribute the Licensed Product in the Territory.
1.29
"LICENSED PRODUCT PATENTS" shall mean any and all patents and
patent
applications, together with any extensions (including supplementary
protection
certificates), registrations, reissues, continuations,
divisions,
continuations-in-part, re-examinations, substitutions or renewals
thereof, and
any patent issuing for any of the foregoing, owned or Controlled by
ALTUS as of
the Effective Date or at any time during the Term of the Agreement
that contain
one or more claims Covering a Licensed Product in the Field in the
Territory.
The Licensed Product Patents as of the Effective Date (hereinafter,
the "Base
Patents") are set forth on Exhibit A attached hereto and
incorporated herein.
1.30
"MAJOR EUROPEAN COUNTRIES" shall mean
[*****************************
*******************************************************************].
1.31 "NET
SALES" means the amount of gross invoiced sales of
[************
********************************************************************************
*****************************************], less the following
amounts to the
extent included as part of the gross invoiced sales of the Licensed
Product
sold by FALK or its
Affiliates (regardless of whether separately stated on the
sales invoice):
(a) any value added taxes ("VAT") charged to the purchaser and
[*****************************************************************];
(b) bad debt [*****************] by FALK with respect to
uncollected
and uncollectable invoiced amounts that have been written off by
FALK in
accordance with its general accounting policies and German
Generally Accepted
Accounting Principles ("GAAP") consistently applied; provided that
such amounts
shall not be deducted to the extent they exceed [**************] of
the gross
invoiced sales of the Licensed Product in the Field in the
Territory in the
aggregate on a quarterly basis;
(c) trade, quantity, cash and any government-mandated discounts
[**************] and taken, including without limitation, those
granted on
account of billing errors, rejected and damaged goods and recall
returns, and
ordinary and customary bona fide customer rebates to the extent
such
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 406 OF THE SECURITIES ACT.
<PAGE>
discounts and rebates are consistent with industry practice, but
not to the
extent such discounts and rebates could reasonably be attributable
to marketing
expenses;
(d) [*******************] for returns (including allowances
actually
given for spoiled, damaged, out-dated, rejected, or returned
product sold,
withdrawals and recalls); and
(e) charges for shipping charges, insurance, freight, and other
transportation costs [************************] of the Licensed
Product.
In determining the amounts to be deducted under (e) above, FALK
shall be
entitled to deduct up to [******************] of its gross invoiced
sales of
Licensed Product for each quarter during the first three calendar
quarters of a
given year as a reasonable approximation of the amounts to be
deducted under (e)
above; provided that at the end of the fourth calendar quarter FALK
shall be
required to make up any difference or short-fall between the
amounts actually
deducted by FALK under (e) above during the first three calendar
quarters, and
the amount actually allowed to be deducted for the year, which
allowed amount
shall be calculated
[**********************************************************
*******************************************************************************
***************************************************]. Any shortfall
due and
owing shall be paid by FALK as part of the payment due for the last
calendar
quarter each year. With respect to sales of Licensed Products sold
by FALK (or
any of its Affiliates) to a FALK Affiliate prior to resale to a
non-Affiliated
Third Party, the "Net Sales" attributable to such product shall be
determined
by
[**************************************************************************
*******************************************************************************
***************].
1.32
"PARTY" shall mean FALK or ALTUS, and, when used in the plural,
shall
mean both of them.
1.33
"PHASE I CLINICAL TRIAL" shall have the meaning set forth in 21
C.F.R. Section 312.21 et seq.
1.34
"PHASE II CLINICAL TRIAL" shall have the meaning set forth in
21
C.F.R. Section 312.21 et seq.
1.35
"PHASE III ENABLING CLINICAL TRIAL" shall mean a Phase I or Phase
II
Clinical Trial which has generated sufficient data to commence
Combined Phase
III Clinical Trials.
1.36
"PHASE IV STUDIES" shall mean any post-Regulatory Approval
after-market studies required to be performed by any Regulatory
Authority in
connection with the commercialization of the Licensed Product.
1.37
"REGULATORY APPROVAL" shall mean any approvals (including pricing
and
reimbursement approvals), licenses, registrations or authorizations
of any
national or international or local regulatory agency, department,
bureau or
other governmental entity necessary for the manufacture and sale of
the Licensed
Product in the Field in the Territory.
1.38
"REGULATORY AUTHORITY" shall mean any local, national or
international regulatory agency, department, bureau or other
governmental
authority whose approval is required prior to commercializing the
Licensed
Product in the Field in the Territory or any individual country
therein.
1.39
"STEERING COMMITTEE" shall mean that body established pursuant
to
Section 3.1 below.
1.40 "TERRITORY" shall
mean the countries listed on Appendix 1 hereto.
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 406 OF THE SECURITIES ACT.
<PAGE>
1.41
"THERACLEC-TOTAL" shall mean commercial formulations of that
product
currently known as TheraCLEC-Total consisting of the
[***************************], as disclosed in IND Application No.
[*****] filed
with the United States Food and Drug ("FDA") Administration on May
28, 2002.
1.42
"THIRD PARTY" shall mean any entity other than ALTUS or FALK.
1.43
"VALID CLAIM" shall mean an issued claim, or a pending claim that
is
being prosecuted in good faith, of any Licensed Product Patent,
that has not
been withdrawn, cancelled, disclaimed, abandoned, or held invalid,
unpatentable
or unenforceable by a tribunal of competent jurisdiction in a final
decision (i)
which is unappealable or (ii) from which all appeals have been
exhausted. If a
Valid Claim is the subject of a final decision holding it not
invalid,
unpatentable or unenforceable, the scope of the Valid Claim shall
be interpreted
so as to reflect the construction placed upon it in the final
decision.
ARTICLE 2.
SCOPE OF THE COLLABORATION
2.1 GLOBAL
GOALS. The Parties agree, pursuant and subject to the terms of
this Agreement, to further develop the Licensed Product in the
Field in the
Territory, with the goal of obtaining Regulatory Approval for the
Licensed
Product as soon as reasonably practicable for commercial marketing
and sale in
the Field in the Territory.
2.2
EUROPEAN DEVELOPMENT AND COMMERCIALIZATION PLAN. The overall
strategy
for the development, commercialization and marketing of the License
Product in
the Field in the Territory shall be set forth in a written plan
(hereinafter,
the "European Development and Commercialization Plan"). The
European Development
and Commercialization Plan shall include a Development Plan (to be
provided by
ALTUS in accordance with Section 4.3 below) and a Commercialization
Plan (to be
provided by FALK in accordance with Section 5.3 below). The
European Development
and Commercialization Plan will be reviewed periodically by the
Steering
Committee and shall be discussed at Steering Committee meetings.
Notwithstanding
the foregoing, in the event any provision set forth in the European
Development
and Commercialization Plan conflicts with or is inconsistent with a
provision of
this Agreement, the provisions of this Agreement shall control.
ARTICLE 3.
MANAGEMENT OF THE COLLABORATION
3.1
ESTABLISHMENT OF STEERING COMMITTEE. The Parties hereby establish
a
Steering Committee for coordinating the development,
commercialization, and
marketing of the Licensed Product in the Field in the Territory.
The Steering
Committee will be composed of [*******] representatives of each
Party, who shall
be appointed (and may be replaced at any time) by such Party on
written notice
to the other Party in accordance with this Agreement. Such
representatives shall
include individuals within the senior management of each Party with
expertise
and responsibilities in the areas of clinical development, process
sciences,
manufacturing, regulatory affairs or product development and
marketing, as
applicable to the stage of development or commercialization of the
Licensed
Product. One of the three representatives for each Party shall be
designated as
that Party's General Manager. Although the members of the Steering
Committee can
and should change as the life cycle of the Licensed Product
changes, the Parties
will endeavor to keep the General Managers consistent for each
Party throughout
the collaboration to maintain continuity in the collaboration. The
initial
Steering Committee members, including the General Manager, from
each Party are
listed on Exhibit D attached hereto to the extent identified
therein. Any member
of the Steering Committee may designate a substitute to attend and
perform the
functions of that member at any meeting of the Steering Committee.
The Steering
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 406 OF THE SECURITIES ACT.
<PAGE>
Committee will meet at least [****] each year (face-to-face) during
the Term of
this Agreement, or at any frequency agreed by the Steering
Committee. In any
event, the Steering Committee will meet [************] after the
execution of
this Agreement or as soon as practicable as mutually agreed by the
Parties. Each
representative on the Steering Committee will have one vote in
decisions
submitted to the Steering Committee. Unless otherwise specifically
set forth in
this Agreement, all issues to be resolved by the Steering Committee
shall be
resolved by the affirmative vote of [**********************] on the
Steering
Committee (or such representative's designee). ALTUS shall also
notify FALK of
and shall use [************************************] to accommodate
requests by
FALK to participate in
[*******************************************************
*********************].
3.2
RESPONSIBILITIES OF STEERING COMMITTEE. The Steering Committee
shall,
subject to the provisions set forth in Article 4 and Article 5
hereinafter and
the dispute resolution procedures of Article 16, be the primary
vehicle for
interaction between the Parties with respect to the
development,
commercialization, and marketing of the Licensed Product in the
Field in the
Territory. In particular, the Steering Committee shall perform the
following
functions consistent with its objective of managing an effective
and efficient
Combined Phase III Clinical Trial that satisfies the development,
regulatory and
commercialization requirements of North America and the Territory
and leverages
the clinical development activities in both territories:
(i) exchange of
information and facilitation of cooperation
and coordination between the Parties as they exercise their
respective rights
and meet their respective obligations under this Agreement;
(ii) manage, review and monitor execution of the European
Development and Commercialization Plan;
(iii) review, prepare and recommend changes to the European
Development and Commercialization Plan;
(iv) facilitate coordination of information flow, consistent
with the EU privacy directive, with respect to regulatory approvals
from the
appropriate regulatory authorities in the Territory; and ensuring
compliance in
all material respects with all applicable laws, regulations, and
all other
requirements of applicable good laboratory practices;
(v) establish, monitor, review and modify all development time
lines to be adhered to by the Parties for all Phase III and Phase
IV clinical
development and Regulatory Approval activities in the
Territory;
(vi) approve all contracts, agreements, commitments and
undertakings with Third Parties regarding Phase III and Phase IV
clinical
development activities in the Territory where the committed
expenditures exceed
a threshold amount to be determined by the Steering Committee;
(vii) facilitate coordination of information flow with respect
to the Combined Phase III Clinical Trials and Phase IV Studies (if
any) between
the EU and North America;
(viii) facilitate coordination of supply of Clinical Supplies
for EU activities;
(ix) [**********] relating to material business, scientific,
clinical, medical, regulatory or management issues arising out of
this Agreement
in accordance with Section 16.1; and
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 406 OF THE SECURITIES ACT.
<PAGE>
(x) perform such other
functions as appropriate to further the
purposes of this Agreement, as determined by the mutual agreement
of the
Parties.
3.3
STEERING COMMITTEE PROCEDURES. The representatives of the
Steering
Committee shall designate a Chairperson who will serve as such. The
Chairperson
shall send notices (not less than [*************] in advance of
such meetings)
and agendas for all regular Steering Committee meetings to all
Steering
Committee members. The location of regularly scheduled Steering
Committee
meetings shall alternate among the offices of the Parties, unless
otherwise
agreed. Meetings may be held telephonically, but each member shall
attend at
least *** meeting in person each year. The Party hosting any
Steering Committee
meeting shall appoint one person (who need not be a member of the
Steering
Committee) to attend the meeting and record the minutes of the
meeting. Such
minutes shall be circulated to the Parties promptly following the
meeting for
review, comment and distribution.
3.4
PRODUCTION REQUIREMENTS REPORTS. FALK shall be responsible for
preparing and delivering to the Steering Committee and ALTUS an
[**********]
Licensed Product production requirement report, which report shall
be updated
[********************]. Such report shall be provided to the
Steering Committee
and ALTUS within [*************] of the end of each
[***************]
(beginning with the [*************] following the Phase III
Enabling Clinical
Trial for the Licensed Product) and shall include the forecasted
requirements
for Clinical Supplies, Licensed Product placebo and commercial
supplies for the
subsequent [*****************] period.
3.5
DISPUTE RESOLUTION. Except as hereinafter provided, all issues
that
come before the Steering Committee that require action, approval or
resolution
and for which the Steering Committee is unable to reach agreement
by a vote of a
majority of the representatives of the Steering Committee shall be
resolved in
accordance with Article 16.
ARTICLE 4.
DEVELOPMENT
4.1
DEVELOPMENT EFFORTS. ALTUS shall be responsible for and shall
use
Commercially Reasonable and Diligent Efforts to develop the
Licensed Product in
the Field in the Territory in accordance with the terms of this
Agreement. ALTUS
shall commit such of its resources as may be necessary to perform
its
obligations as set forth herein or in the Development Plan (as
defined below)
and shall use personnel with such skills and experiences as are
designed to
accomplish efficiently and expeditiously the objectives of the
development of
the Licensed Product as set forth herein or in the Development Plan
and each
update thereof in good scientific manner and in compliance in all
material
respects with all applicable laws, regulations, and all other
requirements of
applicable good laboratory practices. In connection with the
performance by
ALTUS of its obligations hereunder, ALTUS shall maintain and
utilize such
scientific staff, laboratories, offices and other facilities as are
reasonably
designed for such purposes. FALK shall use Commercially Reasonable
and Diligent
Efforts to perform those activities it is obligated to perform with
respect to
the clinical development of the Licensed Product as are set forth
in this
Agreement or that have been assigned to FALK, with FALK's approval,
by the
Steering Committee, and shall commit such of its resources as may
be necessary
to perform such obligations and shall use personnel with such
skills and
experiences as are designed to efficiently and expeditiously
satisfy such
obligations. Each Party shall cooperate with and use Commercially
Reasonable and
Diligent Efforts to support the other Party in the conduct of such
development
efforts.
4.2
DEVELOPMENT RESPONSIBILITIES. All decisions regarding the
Combined
Phase III Clinical Trial in the Territory in the Field, including
but not
limited to formulation of overall development plans, making overall
decisions
regarding the design of all clinical trials in the Territory,
management of
clinical team activity, and management of regulatory activity shall
be made
through the Steering Committee,
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 406 OF THE SECURITIES ACT.
<PAGE>
subject to the dispute resolution mechanism set forth in Section
16.1 below.
Prior to the Combined Phase III Clinical Trial, ALTUS shall keep
the Steering
Committee informed of the progress of the clinical development,
including
development plans, time lines and process development work, and
will discuss
with the Steering Committee developments and decisions that ALTUS
anticipates
will have a significant impact on the Combined Phase III Clinical
Trial and/or
Regulatory Approvals in the Territory.
4.3
DEVELOPMENT PLAN. Attached hereto as Exhibit B is a copy of the
development plan (hereinafter the "Development Plan") for the
development of
Licensed Product in the Field in the Territory. From time to time,
ALTUS shall
submit to the Steering Committee an updated Development Plan as
appropriate, but
at least [******]. The Development Plan (and any updates thereto)
shall become
part of and be incorporated into the European Development and
Commercialized
Plan and shall be reviewed and discussed at the Steering Committee
meetings.
4.4
CLINICAL TRIALS. The Steering Committee shall have responsibility
for
and control over management of clinical trials for the Licensed
Product in the
Field in the Territory and all decisions regarding such trials
shall be made
jointly through the Steering Committee, subject to the dispute
resolution
mechanism set forth in Section 16.1 below. The Parties may use one
or more Third
Parties to assist in the performance of such clinical trials. All
clinical data
and reports related to clinical trials for the Licensed Product
shall be jointly
owned by the Parties and each Party shall have access to, and
copies of; all
such data and reports related to clinical trials for the Licensed
Product in the
Field in the Territory, and each Party may use such data in
accordance with the
terms of this Agreement without [********************] to the other
Party. Each
Party shall treat such data and reports as Confidential Information
of the other
Party, and neither Party shall disclose or use such data or reports
for any
purpose other than performing its obligations under this Agreement
or as
otherwise expressly authorized in writing by the Steering
Committee. All data,
database information and safety reports from such clinical trials
shall be
centralized and held at ALTUS or by a Third Party selected by ALTUS
and agreed
to by FALK, provided, however, that FALK shall be entitled to
obtain and keep
copies of such information and reports. If a Party itself obtains
data from a
clinical trial hereunder, it shall promptly transfer all of the
clean, final
data for such trial to ALTUS or to such Third Party, as the case
may be. The
Steering Committee shall coordinate the transfers of any such data.
All Phase I
Clinical Trials, Phase II Clinical Trials, and Combined Phase III
Clinical
Trials for the Licensed Product in the Field in the Territory shall
be performed
in compliance with and conformity to both FDA and EMEA requirements
and to ICH
Guidelines. At the completion of each Phase I Clinical Trial, Phase
II Clinical
Trial and Combined Phase III Clinical Trial, ALTUS shall prepare a
written
report, substantially in the form reasonably expected to be
submitted to the
FDA, the EMEA or other applicable Regulatory Authority, summarizing
the results
of such clinical trial, and containing an analysis of the clinical
significance
of such results, which reports shall be submitted to FALK and the
Steering
Committee as soon as is reasonably practicable after completion of
the relevant
clinical trial. Such reports shall be referred to herein as the
"Phase I
Report," the "Phase II Report," and the "Phase III Report,"
respectively.
4.5 DRUG
APPROVAL APPLICATIONS.
(a) FALK shall be responsible for and shall use Commercially
Reasonable and Diligent Efforts in filing all Drug Approval
Applications and
seeking Regulatory Approvals for the Licensed Product in the
Territory in the
Field; provided that ALTUS shall assist FALK in preparing and
filing such Drug
Approval Applications and seeking such Regulatory Approvals. FALK
shall pay [***
******] associated with the preparation, filing, prosecution,
meetings,
communications, and review by regulatory agencies of such Drug
Approval
Applications and Regulatory Approvals (including the activities set
forth in
Section 4.5). The Regulatory Approvals for the Licensed Product in
the Territory
shall be prosecuted and obtained in the name of FALK; provided that
any such
Regulatory Approvals shall be obtained in the joint name of FALK
and ALTUS if
permitted under applicable rules and
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 406 OF THE SECURITIES ACT.
<PAGE>
regulations, and provided further that ALTUS shall be permitted
to
cross-reference such Drug Approval Applications and Regulatory
Approvals that
are in FALK's name. In the event that the laws or regulations in a
country in
the Territory do not allow the Licensed Product to be registered
solely in the
name of FALK, FALK shall register the Licensed Product at its
discretion (i)
[************************************************ *******] or
(ii)
[***************************************************]. Prior to
submitting any
Drug Approval Application, FALK shall discuss with the Steering
Committee the
scope and general content of such Drug Approval Application. The
Steering
Committee may review and comment on all Drug Approval Applications,
and such
comments will be [********] by FALK to the [****************]. All
Drug Approval
Applications to be filed by or on behalf of FALK for the Licensed
Product in the
Territory must be approved by ALTUS in advance in writing.
Regulatory documents
or copies thereof for each filing shall be centralized and held at
the offices
of ALTUS, provided, however, that FALK shall be entitled to obtain
and keep
copies of originals of any such documents but only for the uses
specifically set
forth in this Agreement. Each Party will immediately notify the
other Party of
any material developments relating to the clinical development of
the Licensed
Product, including, without limitation, any material comments or
concerns raised
by any Regulatory Authority.
(b) Each Party agrees to provide to the other Party a copy of
any
documents or reports relating to the Licensed Product that are
filed with any
regulatory authority in the Territory under this Agreement,
including any Drug
Approval Applications. All such documents and reports shall be
centralized and
held at ALTUS or by a Third Party selected by ALTUS and agreed to
by FALK,
provided however, that FALK shall be entitled to obtain and keep
copies of any
such documents and records. The Steering Committee shall coordinate
the
transfers of any such documents or reports.
4.6
REGULATORY MEETINGS AND COMMUNICATIONS. FALK shall be responsible
for
conducting all meetings and discussions and routine telephone
communications
with the EMEA or other Regulatory Authority, related to clinical
studies, Drug
Approval Applications and Regulatory Approvals for the Licensed
Product in the
Field in the Territory; provided that FALK shall use Commercially
Reasonable and
Diligent Efforts to conduct such meetings and discussions to
facilitate the
Regulatory Approval of the Licensed Product in the Field in the
Territory. ALTUS
shall assist FALK in these efforts. FALK will keep ALTUS and the
Steering
Committee apprised of all material communications with such
regulatory
authorities, and ALTUS or its designee shall be entitled to attend
all meetings
with Regulatory Authorities. FALK shall [*****************] with
respect to the
conduct of any inspections by any Regulatory Authority of FALK's
site and
facilities related to the Licensed Product, and each Party shall be
given the
opportunity to attend such site inspection and the summary, or wrap
up, meeting
related to the Licensed Product with such regulatory authority at
the conclusion
of such site inspection. To the extent either Party receives
written or material
oral communication from any regulatory authority relating to the
Licensed
Product in the Field in the Territory, the Party receiving such
communication
shall notify the other Party and provide a copy of any written
communication as
soon as reasonably practicable.
4.7
TRANSFER OF MATERIALS. During the development of the Licensed
Product,
each Party may transfer certain of its proprietary materials to the
other Party.
Each Party agrees that it will use such materials of the other
Party only for
the purposes of this Agreement, and will not transfer such
materials to any
non-Affiliated Third Party without the prior written consent of the
other Party
hereunder. Except as expressly provided in this Agreement, the
transfer of any
such proprietary materials by one Party to another shall not be
deemed to be a
[***************] in the proprietary material. All right, title and
interest in
and to all such proprietary materials (and any patent rights
relating thereto)
shall remain in the Party transferring such materials.
4.8
DEVELOPMENT COSTS. All ALTUS Development Costs (as defined in
Exhibit
C) shall be paid directly by [*****]. ALTUS shall send to FALK a
[**********]
for all FALK Development Costs
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 406 OF THE SECURITIES ACT.
<PAGE>
(as defined in Exhibit C) incurred by ALTUS for such month in
connection with
development work performed pursuant to this Agreement. FALK shall
[********]
ALTUS for all such FALK Development Costs within [*********] of
receipt of the
[*******] by FALK; provided, however, that FALK shall be entitled
to pay its
share of costs related to clinical trials in the Field in the
Territory which
have been contracted directly by FALK directly to the relevant CRO
(Contract
Research Organisation). Each Party shall keep complete and accurate
books and
records pertaining to the Development Costs, which books and
records shall be
retained until [***********] after the end of the period to which
such books and
records pertain. Each Party shall have the right, at its expense,
to have an
[*********************** **************] the books and records of
the other
Party relating to the Development Costs, PROVIDED, HOWEVER, that
neither Party
shall conduct more than one such [******************].
4.9 4.9
Safety Data Base. The Parties will, as soon as practical,
organize
a serious adverse event data base (the "SAE Data Base"). ALTUS and
FALK shall
jointly own the SAE Data Base and all data contained therein, and
the data from
the SAE Data Base shall be made available to both Parties.
ARTICLE 5.
COMMERCIALIZATION AND MARKETING IN THE TERRITORY
5.1
COMMERCIALIZATION AND MARKETING EFFORTS. FALK shall use
Commercially
Reasonable and Diligent Efforts to commercialize and market the
Licensed Product
in the Field in the Territory in accordance with the terms of this
Agreement,
and ALTUS shall cooperate with and use Commercially Reasonable and
Diligent
Efforts to support FALK in FALK's conduct of such commercialization
and
marketing efforts. During the term of this Agreement and with
respect to sales
of Licensed Product in Germany, FALK shall
[*******************************************].
5.2
COMMERCIALIZATION AND MARKETING RESPONSIBILITIES. FALK shall
have
responsibility and control over the commercialization and marketing
of the
Licensed Product in the Field in the Territory, including but not
limited to
designing and implementing all product launch, promotion, marketing
and sales
activities, handling the packaging and shipment of all commercial
product,
booking sales, handling all returns, handling all aspects of order
processing,
invoicing, collection, and receivables, collection of data for
purposes of
satisfying applicable regulatory requirements, collection of data
of sales to
hospitals and other end users, distribution, inventory, and
warehousing. FALK
will discuss with the Steering Committee any [********]
commercialization and
marketing issues as may be appropriate. Notwithstanding anything in
this
Agreement or the European Development and Commercialization Plan to
the
contrary, FALK shall have
[****************************************************
******] under this Agreement. In particular, FALK may
[************************************
*********************************] within
the Territory if [**********************] that the
commercialization in such
country might [*****************] the commercialization of the
Licensed Product
in the Territory as a whole; provided that FALK shall inform the
Steering
Committee of any such decision and the reasons therefor.
5.3
COMMERCIALIZATION PLAN. Within a reasonable period of time after
a
Phase III Enabling Clinical Trial with respect to the Licensed
Product in the
Field in the Territory, FALK shall submit to the Steering Committee
a detailed
[*********] (the "Commercialization Plan") for the
commercialization of the
Licensed Product in the Field in the Territory. The
Commercialization Plan shall
include proposed [*****************] arrangements relating to sales
of the
Licensed Product. FALK shall submit to the Steering Committee an
annual updated
Commercialization Plan on the first anniversary of the First
Commercial Sale of
the Licensed Product and each [*********] thereafter. The
Commercialization Plan
(and each update thereto) shall become part of and be incorporated
into the
European Development and Commercialization Plan and shall be
reviewed and
discussed at the Steering Committee meetings.
[********************************]
after completion of a Phase III Enabling Clinical Trial for
Licensed
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 406 OF THE SECURITIES ACT.
<PAGE>
Product in the Field in the Territory, FALK will enter into an
agreement with a
Third Party contractor covering the packaging of the Licensed
Product. FALK
shall also have identified a second source reasonably capable of
packaging the
Licensed Product in the event such Third Party contractor is unable
to do so.
5.4
COMMERCIALIZATION COSTS. Except as otherwise provided herein, all
FALK
Marketing Costs shall be paid for [***************], all as more
fully provided
in Exhibit C.
5.5 PRODUCT
TRADEMARKS. It is the intent of the Parties that one or more
product trademark(s) other than TheraCLEC, TheraCLEC-Total, or such
other
trademark to be used in connection with sales of the Licensed
Product in the
United States, shall be developed for use on and in connection with
the Licensed
Product in the Territory (each, a "Product Trademark"). FALK shall
have the
[**********************] for developing and promoting the Product
Trademark(s),
subject to the prior review and written approval of ALTUS and the
Steering
Committee, which approval by ALTUS shall
[*******************************] and
shall be required solely for the purpose of ensuring that the
mark(s) proposed
by FALK for use as the Product Trademark(s) are not confusingly
similar to
TheraCLEC, TheraCLEC-Total, or such other trademark as is intended
to be used in
connection with sales of the Licensed Product in the United States.
If it is
determined that it is not possible to register or otherwise use one
or more of
the Product Trademark(s) in any country within the Territory, then
the Parties
shall agree on an appropriate trademark to use in each such
country. FALK shall
own the Product Trademark(s), and shall be responsible for
procurement and
maintenance of trademark registrations for such trademark(s) in
connection with
sales of the Licensed Product in the Field in the Territory. If
FALK elects not
to procure or maintain a trademark registration for any such
trademark(s) in
connection with the Licensed Product in a country of the Territory,
it shall so
inform ALTUS in writing in a reasonable time before any action is
due thereon.
ALTUS shall then have the right but not the obligation to procure
and maintain
such trademark(s) in such country at FALK's expense. The cost of
filing,
prosecution and maintenance for the Product Trademark(s) shall be
paid by FALK
during the term of this Agreement.
5.6
MARKETING MATERIALS AND PACKAGING. The Licensed Product marketed
and
sold in each country in the Territory pursuant to this Agreement
shall be
marketed and sold under the particular Product Trademark applicable
to sales of
the Licensed Product in such country, and the packaging used for
the Licensed
Product shall identify ALTUS as the licensor of such product using
the ALTUS
trademark and logo (collectively, the "ALTUS Mark"). ALTUS shall
have
[***************] right to control the use of the ALTUS Mark in
connection with
sales of the Licensed Product. FALK's use of the ALTUS Mark shall
be in strict
compliance with the uses of the ALTUS Mark set forth in the most
recent version
of the ALTUS Style Guide, a copy of which (together with any
subsequent
revisions thereto) shall be furnished by ALTUS to FALK. From time
to time, as
reasonably requested by ALTUS, FALK shall submit to ALTUS for
ALTUS' review
copies of marketing materials, packaging, instruction booklets,
printed
materials, advertisements, and any other documents containing the
ALTUS Mark,
together with an English language translation thereof, if requested
by ALTUS. In
the event ALTUS objects to FALK's use of the ALTUS Mark, ALTUS
shall so notify
FALK in writing, and FALK shall cease using the ALTUS Mark or
change its use of
the ALTUS Mark to the satisfaction of ALTUS as soon as practicable.
FALK agrees
that ALTUS shall be identified as licensor on all packaging and
printed
literature and advertisements for Licensed Product sold by FALK or
its
distributors, subject to legal and commercial requirements on a
country-by-country basis and in a manner in accordance with such
legal and
commercial requirements. The packaging and printed literature and
advertisements
for the Licensed Product shall indicate that the Licensed Product
is an
innovation of ALTUS and that such product is distributed under a
license granted
by ALTUS. The packaging shall also contain the patent numbers of
any Licensed
Product Patents where such marking is required or provided for
under applicable
law. Such marking shall further conform to the laws and practices
of the
jurisdiction in which the Licensed Product is manufactured, sold
and/or
delivered. FALK shall make copies of all marketing and
promotional
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 406 OF THE SECURITIES ACT.
<PAGE>
materials for the Licensed Product available to ALTUS for filing
with the
appropriate regulatory authorities, as required under applicable
law.
ARTICLE 6.
FALK PAYMENTS
6.1
FUNDING SUPPORT FOR DEVELOPMENT COSTS. Subject to the other terms
and
conditions of this Agreement, and as consideration for the
development work and
the development license rights granted to FALK by ALTUS under this
Agreement,
FALK shall pay to ALTUS the following non-refundable,
non-cancellable, and
non-creditable amounts upon the first occurrence of such event with
respect to
the Licensed Product, which payments shall be required to be paid
in order for
FALK to maintain its development license in the Territory:
<TABLE>
<CAPTION>
Event
Payment
<S>
<C>
(a)
[*************************************].
[*********](1)
(b)
[**************************************
[*********](1)
**************************************
**************************************
*****************].
(c)
[*****************************************
[*********]
****************************************].
(d)
[*****************************************
[*********]
****************************************].
(e)
[*****************************************
[*********]
****************************************].
(f)
[*****************************************
[*********]
*****************************************
************************************].
(g)
[****************************************
[*********]
*****************************************
*****************************************
*****************************************
*****************************************
***********************].
(h)
[****************************************
[*********]
*****************************************
*****************************************
*****************************************
*****************************************
***********************].
</TABLE>
----------
(1)
[************************************************************************
*************************************************************************
*************************************************************************
*************************************************************************
*************************************************************************
*************************************************************************
*************].
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 406 OF THE SECURITIES ACT.
<PAGE>
For purposes of the payments set forth in Section 6.l(c)-(f)
above,
[********************************************************************]
shall be
deemed to be [**********] when ALTUS has delivered to FALK the
[****************************], or the [*************],
respectively, as the
case may be.
6.2
Subject to the other terms and conditions of this Agreement, and
as
consideration for the commercial license rights granted to FALK by
ALTUS under
this Agreement, FALK shall pay to ALTUS the following
nonrefundable,
non-cancellable, and non-creditable amounts upon the first
occurrence of the
Licensed Product to reach such event, which payments shall be
required to be
paid in order for FALK to maintain its commercial license in the
Territory:
<TABLE>
<S>
<C>
(a)
[****************************************
[*********]
*****************************************
*****************************************
*****************************************
*****************************************
***********************].
(b)
[****************************************
[*********]
*****************************************
*****************************************
*****************************************
*****************************************
***********************].
</TABLE>
6.3 The
payments set forth in Section 6.1(c)-(h) and Section 6.2(a)-(b)
shall be paid by FALK to ALTUS within [**********] days after the
applicable
[*****************************]; provided, however that unless
otherwise agreed
to by the Parties, any past due amounts shall bear interest at the
rate that is
the lesser of (i) the
[******************************************************]
as reported by Datastream (or a successor or similar organization)
from time to
time, plus, at ALTUS' option, an additional [**************], or
(ii) the
highest rate permitted by applicable law, in each case calculated
on the number
of days such a payment is overdue.
6.4
ROYALTIES.
(a) ROYALTY.
(i) As consideration for the license rights granted to FALK by
ALTUS under this Agreement, FALK shall pay to ALTUS a royalty on
Net Sales of
the Licensed Product sold by FALK (or its Affiliates) at the
following
[********] royalty rate (which rate [********] according to the
total amount of
FALK's [************] Deemed Net Sales (defined below) invoiced
since the
Effective Date):
<TABLE>
<CAPTION>
[**********] Deemed Net Sales euros
("(euro)") (in millions)
[*********]
<S>
<C>
[*******]
[****]
[*******]
[****]
[*******]
[****]
[*******]
[****]
[*******]
[****]
[*******]
[****]
[*******]
[****]
</TABLE>
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 406 OF THE SECURITIES ACT.
<PAGE>
By way of example, if FALK's [*******] Deemed Net Sales of the
Licensed Product
since the Effective Date equal [***********], the total royalty
owed by FALK
would equal [*********], as set forth below.
<TABLE>
<CAPTION>
[**********] Deemed Net
Example:
Sales of (euro) 499 million
<S>
<C>
[*******]
[*******************]
[*******]
[*******************]
[*******]
[*******************]
[*******]
[*******************]
[*******]
[*******************]
[*******]
[***************]
</TABLE>
(ii) For purposes of this Section 6.4(a), FALK's "[*********]
Deemed Net Sales" as of the end of a particular calendar quarter
shall be
determined as follows:
(1) If less than
[********************] of FALK's
gross invoiced sales for the calendar quarter are
attributable to sales to Distributors, FALK's
"[********] Deemed Net Sales" as of the end of
that calendar quarter shall equal: (a)
[************************************************
*************************************************]
; and
(2) If
[********************] or more of FALK's gross
invoiced sales for the calendar quarter are
attributable to sales to Distributors (such gross
invoiced sales to Distributors in excess of such
[*******] hereinafter referred to as "Excess
Distributor Sales"), FALK's "[*********] Deemed
Net Sales" as of the end of that calendar quarter
shall equal: (a) [********************
*************************************************
*************************************************
*************************************************
*************************************************
*************************************************
***************************************].
In the event that
during the term of this Agreement there is a
material change in the outline conditions in the Territory as they
relate to the
question whether a Third Party should be considered a [*********]
for the
purpose of this Agreement, the Parties undertake to renegotiate in
good faith
and to adjust the definition in Section 1.11 above in order to
reflect such
change in the outline conditions from the situation prevailing at
the signing
hereof.
(iii) FALK shall pay royalties with respect to sales of the
Licensed Product on a country by country basis until the later of
(i) the date
of expiration of the last to expire Valid Claim of a Base Patent
Covering the
Licensed Product in such country, and (ii) [*************] from the
First
Commercial Sale of the Licensed Product in such country.
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 406 OF THE SECURITIES ACT.
<PAGE>
(b) ROYALTY PAYMENT DATES. Royalties paid by FALK pursuant to
Section 6.3(a) shall be paid by FALK within thirty (30) days after
the end of
each calendar quarter in which Net Sales are made. All such
payments shall be
accompanied by a statement showing the source of such revenues,
including the
Net Sales of the Licensed Product in each country, a calculation of
the
Cumulative Deemed Net Sales as of the end of that quarter, and a
calculation of
the amount of payment due for each such jurisdiction. In the event
royalties are
not paid within the time period set forth in this Section 6.3(b),
unless
otherwise agreed to by the Parties, such royalties shall bear
interest at the
rate that is the lesser of (i) the average one-month European
Interbank Offered
Rate ("EURIBOR") as reported by Datastream (or a successor or
similar
organization) from time to time, plus, at ALTOS' option, an
additional
[**************], or (ii) the highest rate permitted by applicable
law, in each
case calculated on the number of days such a payment is
overdue.
(c) ACCOUNTING. All payments due to ALTUS by FALK and royalties
owed
to ALTUS shall be paid in euros. Whenever payment for the Licensed
Product is
received by FALK in a foreign currency other than euros, for the
purpose of
calculating royalties on FALK's Net Sales, conversion from such
foreign currency
into euros shall be made on the last day of each calendar quarter
at the
applicable rate of conversion on that date as retrieved from the
Reuters System
(or any other source agreed upon in writing by the parties) for the
applicable
calendar quarter.
(d) TAXES. All sums due to ALTUS under this Agreement shall be
paid
in full, subject to deduction for withholding taxes, charges and
other duties
levied on account of such payment that may be imposed in the
Territory save
insofar as ALTUS shall be capable of obtaining a credit therefore.
The Parties
agree to co-operate in all respects necessary to take advantage of
such double
taxation agreements as may be available. It is the understanding of
FALK, after
consultation with its tax advisors based on current law, that
payments to ALTUS
hereunder can be made, subject to the fulfillment of applicable
formal
requirements, without the requirement of taxes to be withheld,
although FALK
provides no warranty or assurance of such result. In the event that
taxing
authorities assert a contrary result, the parties will cooperate in
appropriate
proceedings to challenge such assertion. If FALK is required to
deduct or
withhold it will (i) promptly notify ALTUS of such requirement,
(ii) pay to the
relevant authorities the full amount to be deducted or withheld
promptly upon
the earlier of determining that such deduction or withholding is
required or
receiving notice that such amount has been assessed against ALTUS
and (iii) send
proof of payment to ALTUS by transmitting an official receipt (or
certified
copy), or other documentation reasonably acceptable to ALTUS and
obtainable by
FALK evidencing such payments to such authorities. Any such
required tax,
charges and other duties actually paid on ALTUS' behalf shall be
deducted from
the sums due to ALTUS under this Agreement.
6.5 VALUE
OF RIGHTS. ALTUS and FALK understand and acknowledge that the
value of each of the rights granted by this Agreement might
fluctuate while this
Agreement is in effect. Notwithstanding any such fluctuation, ALTUS
and FALK
have agreed to allocate the value of these rights in the manner
represented by
the royalties and other payments contemplated hereunder and intend
such
allocation to be binding and unchanging.
ARTICLE 7.
MANUFACTURING AND SUPPLY
7.1 SUPPLY
OF THE LICENSED PRODUCT.
(a) CLINICAL SUPPLIES. ALTUS shall provide or cause to be
provided
all Clinical Supplies of the Licensed Product for the completion of
human
clinical trials for the Licensed Product in the Field in the
Territory. ALTUS
may enter into one or more "manufacturing and supply
agreement(s)"
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 406 OF THE SECURITIES ACT.
<PAGE>
with Third Party contract manufacturer(s) for such Clinical
Supplies. The cost
of Clinical Supplies
[*********************************************************
***************************].
(b) COMMERCIAL SUPPLIES. ALTUS shall be responsible for
establishing
and shall use Commercially Reasonable and Diligent Efforts to
establish a
commercial manufacturing process for, and making available,
commercial supplies
of the Licensed Product at the scale and in the amounts required
to
[*************] for the Licensed Product in the Field in the
Territory. FALK
shall have the [**************] its requirements for commercial
supplies of the
Licensed Product from ALTUS. If FALK takes advantage of such
[********], the
purchase price shall be equal to [****] of the German Ex-Factory
Price for the
Licensed Product; provided, however, that if ALTUS' aggregate
fully-burdened
manufacturing costs for such Licensed Product exceeds [*****] of
the German
Ex-Factory Price,
[************************************************************
*******************************************************************************
*******************************************************************************
*******]. ALTUS shall keep full, true and accurate books of account
containing
all particulars that may be necessary for the purpose of evidencing
its fully
burdened manufacturing costs as a basis for the purchase price to
be paid by
FALK for Licensed Product. Such books and records shall be kept at
ALTUS'
principal place of business. FALK or its authorized independent
accountant shall
have the right to [************] of such books and records of ALTUS
that are
necessary to report on the purchase price for the commercial
supplies of the
Licensed Product for the period or periods requested by FALK and
the correctness
of any purchase price payment made by FALK to ALTUS. With regard to
further
details of such [*****], the provisions in Section 13.4 hereinafter
shall apply
mutatis mutandis. As soon as practicable after completion of a
Phase III
Enabling Clinical Trial for the Licensed Product, ALTUS will enter
into a
manufacturing and supply agreement with a Third Party contract
manufacturer(s)
covering the manufacture, supply and quality control with respect
to the
Licensed Product. ALTUS shall also ensure that [****************]
for the
manufacture and supply of the Licensed Product. FALK will be
responsible for
paying
[***********************************************************************
***********************]. The terms of the supply of commercial
supplies by
ALTUS, in particular regarding all packaging, handling, shipping,
delivery,
insurance, tariffs, taxes and the like pertaining to delivery of
the Licensed
Product to FALK, will be governed by a "Supply and Distribution
Agreement" to be
negotiated and entered into between the Parties, which agreement
shall include
customary indemnification provisions relating to the quality of the
manufactured
product and shall have terms consistent with this Agreement.
ARTICLE 8.
LICENSES
8.1
LICENSE TO FALK. Subject to the terms hereof, ALTUS hereby grants
to
FALK a [***********************] (except pursuant to Section 17.1),
[********]
license, with the right to [********], under the Licensed Product
Patents to
[**************************************** ***************] the
Licensed Product
in the Field in the Territory in accordance with the terms of this
Agreement.
Subject to the terms hereof, ALTUS hereby grants to FALK a
[********************
***********] (except pursuant to Section 17.1),
[******************************
********], under the Licensed Product Know-how to
[****************************
********************* ***************] the Licensed Product in the
Field in the
Territory in accordance with the terms of this Agreement.
8.2 THIRD
PARTY LICENSED IP. In respect of the Third Party Licensed LP
licensed from [********] to ALTUS, ALTUS shall obtain for FALK an
acknowledgment
in writing from [*******] to the rights of FALK under this
Agreement whereby the
rights and licenses granted hereunder to the Third Party Licensed
IP shall
continue (free of any payment) notwithstanding any termination of
the rights of
ALTUS in respect of the Third Party Licensed IP, substantially in
the form of
the document contained in
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 406 OF THE SECURITIES ACT.
<PAGE>
Schedule 8.2. In respect of any further Third Party Licensed IP
licensed to
ALTUS, ALTUS shall use Commercially Reasonable and Diligent Efforts
to obtain
for FALK license rights to such Third Party Licensed IP as is
necessary for FALK
to undertake the actions contemplated hereby on terms and
conditions similar to
those enjoyed by ALTUS; provided that under no circumstances shall
ALTUS be
required to incur any additional financial or other obligations in
order to
assist FALK in obtaining such a license, and FALK shall be
responsible for
[**************************************] with respect to such
license. Without
limiting the foregoing, in connection kith the negotiation of a
commercial
supply agreement with [*******], if any, ALTUS shall use
Commercially Reasonable
Efforts to obtain for FALK without any additional obligation of
FALK such
license rights from [*********] as may be necessary for FALK to
undertake the
actions contemplated hereby.
8.3
RETENTION OF RIGHTS. Notwithstanding the license granted to FALK
in
Section 8.1, ALTUS shall retain the right within the Territory (i)
to
[*************************] relating to the Licensed Product, (ii)
to use at its
own cost the Licensed Product Patents and Licensed Product Know-how
for its own
internal use and for non-commercial purposes, and (iii) to perform
all other
activities contemplated by this Agreement.
8.4
EXCLUSIVITY. During the full Term of this Agreement (as defined
in
Section 14.1) ALTUS agrees and obligates itself, and for five years
from the
date hereof, FALK agrees and obligates itself not to
[**********************]
any other products that consist of
[*******************************************
**********] in the Territory in the Field outside this
collaboration.
ARTICLE 9.
TRADEMARKS
9.1
PRODUCT TRADEMARK. All of the Licensed Product shall be sold in
the
Territory under the applicable Product Trademark and the ALTUS Mark
as described
in Section 5.7.
9.2 GRANT
OF LICENSE. ALTUS grants to FALK, subject to compliance with
the
other terms and conditions of this Agreement, a non-exclusive,
royalty-free,
non-transferable license, with the right to sublicense, to use the
ALTUS Mark
solely within the Territory and solely in connection with the sale
of the
Licensed Product in the Field.
9.3
QUALITY CONTROL. FALK shall apply the Product Trademark and the
ALTUS
Mark only to the Licensed Product and only in accordance with the
terms of this
Agreement. ALTUS shall have the right, at any time during regular
business hours
but no more than one time per calendar year, to conduct an
examination of the
Licensed Product to determine the quality of the Licensed Product.
If at any
time, the Licensed Product shall, in the reasonable opinion of
ALTUS, fail to
conform with the appropriate standards of quality as required under
this
Agreement, ALTUS or its authorized representatives shall notify
FALK. Upon such
notification, the Parties shall discuss and implement actions to
meet standards
of quality to the complete satisfaction of ALTUS.
9.4
ACKNOWLEDGMENT OF OWNERSHIP RIGHTS.
(a) FALK acknowledges and agrees that ALTUS is the exclusive
owner
of all right, title, and interest in and to the ALTUS Mark, and
that all use of
the ALTUS Mark by FALK will inure to the exclusive benefit of
ALTUS. FALK
undertakes to make use of the ALTUS Mark only in such a way that
the rights of
ALTUS in said mark will not be diminished in any way. FALK shall
not use the
ALTUS Mark as all or part of any corporate name, trade name,
trademark, service
mark, certification mark, collective membership mark, domain name,
or any other
designation confusingly similar to the ALTUS Mark.
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 406 OF THE SECURITIES ACT.
<PAGE>
(b) ALTUS acknowledges and agrees that FALK is the exclusive
owner
of all right, title, and interest in and to the "Dr. FALK"
trademark and logo
(collectively, the "FALK Mark"), and that all use of the FALK Mark
by ALTUS will
inure to the exclusive benefit of FALK. ALTUS undertakes to make
use of the FALK
Mark only in such a way that the rights of FALK in said mark will
not be
diminished in any way. ALTOS shall not use the FALK Mark as all or
part of any
corporate name, trade name, trademark, service mark, certification
mark,
collective membership mark, domain name, or any other designation
confusingly
similar to the FALK Mark.
9.5 USE OF
TRADEMARK DESIGNATIONS. FALK shall use the TM designation in
conjunction with any use of the ALTUS Mark within the Territory
