PATENT AND KNOW-HOW LICENSE AGREEMENT

Exhibit 10.7

 

PATENT AND KNOW-HOW LICENSE AGREEMENT

 

Between

 

PIERRE FABRE MEDICAMENT S.A.

 

and

 

NOVACEA, Inc.

 

Dated

 

July 19, 2005

TABLE OF CONTENTS

 

 

ii

 

iii

 

iv

SCHEDULES

 

 

v

PATENT AND KNOW-HOW LICENSE AGREEMENT

 

THIS PATENT AND KNOW-HOW LICENSE AGREEMENT (the “Agreement”) is executed on July 19, 2005 (the “Effective Date”) by and between P IERRE F ABRE M EDICAMENT S.A., a corporation organized under the laws of France with headquarters at 45, place Abel-Gance, 921000 B OULOGNE , F RANCE (“P IERRE F ABRE ”) and N OVACEA , I NC ., a Delaware corporation with a principal place of business at 601 Gateway Boulevard, Suite 800, S OUTH S AN F RANCISCO , C ALIFORNIA 94080, U.S.A. (“N OVACEA ”).

 

RECITALS

 

WHEREAS , P IERRE F ABRE , a pharmaceutical and health care company, has evidenced the antimitotic activity of a Vinca Alkaloid derivative known as “V INORELBINE ” (INN), formulated in softgel capsules which are covered by certain Softgel Patents filed by C ARDINAL H EALTH 409 I NC . (“CAH”) in various countries, including the USA and Canada;

 

WHEREAS , P IERRE F ABRE entered into a license and supply agreement dated June 6, 2002, with CAH, pursuant to which P IERRE F ABRE has obtained a license under the Softgel Patents with the right to sublicense;

 

WHEREAS , P IERRE F ABRE has successfully obtained regulatory approval of the Licensed Product in various EU countries and has successfully introduced the Licensed Product in such EU countries; and

 

WHEREAS , N OVACEA , further to a due diligence process, has confirmed its interest to collaborate with P IERRE F ABRE to further develop the Licensed Product in the USA and Canada with a view to commercialize Licensed Product in such countries.

 

NOW, THEREFORE , in consideration of the premises and the mutual covenants and agreements herein contained, the Parties agree as follows:

 

ARTICLE 1 – DEFINITIONS

 

For purposes of this Agreement, the capitalized terms not otherwise defined herein shall have the meanings set forth in Schedule 1 attached hereto and incorporated herein by reference.

 

ARTICLE 2 – SUBJECT MATTER OF THE AGREEMENT

 

2.1.	License Grant by P IERRE F ABRE to N OVACEA .

 

2.1.1. Subject to Section 2.6 below, P IERRE F ABRE hereby grants to N OVACEA and N OVACEA accepts the following rights and licenses, with the right to grant sublicenses in accordance with Section 2.4 hereof:

 

(a)

under the P IERRE F ABRE Know-How: (i) the exclusive right to develop, register, use, sell, offer to sell and import the Licensed Product in the Field in the N OVACEA Territory; and (ii) the exclusive right to use Improvements originating

from P IERRE F ABRE to develop, register, use, sell, offer to sell and import Licensed Product in the Field in the N OVACEA Territory;

 

(b)

under the Softgel Patents: (i) the exclusive right to use, sell, offer to sell and import the Licensed Product in the Field, including in the Cancer Field, consistent with the claims in the Softgel Patents, in the N OVACEA Territory; and (ii) the exclusive right to use Improvements to use, sell, offer to sell and import Licensed Product in the Field in the N OVACEA Territory;

 

(c)

under any future P IERRE F ABRE Patent that is not a Softgel Patent: (i) the exclusive right to develop, register, use, sell, offer to sell and import the Licensed Product in the Field in the N OVACEA Territory; and (ii) the exclusive right to use improvements originating from P IERRE F ABRE to develop, register, use, sell, offer to sell and import the Licensed Product in the Field in the N OVACEA Territory;

 

(d)

subject to P IERRE F ABRE ’s prior approval (which approval shall not be unreasonably withheld or delayed), the non-exclusive right to conduct a portion of the first Phase 3 Clinical Trial for the Licensed Product in the advanced breast cancer indication, (as described in the version of the Development Plan attached hereto as Schedule 5.1.1), in those countries of the P IERRE F ABRE Territory in which Pierre Fabre has Affiliates devoted to oncology, as listed on Schedule 2.1.1 attached hereto, solely to facilitate the Approval of Licensed Product in the N OVACEA Territory, and provided that to ensure coherence of the message delivered both by P IERRE F ABRE ’s Affiliates and N OVACEA to the scientific community, N OVACEA agrees to associate P IERRE F ABRE in its contact with investigators in those countries which will be selected to conduct such Phase 3 Clinical Trial; and

 

(e)

under the P IERRE F ABRE Know-How and P IERRE F ABRE Patents, the non-exclusive worldwide right to procure the packaging services for the Finished Product contemplated in Section 5.3.4 of the Supply Agreement (the “Packaging Services”), as provided in Section 2.1.2, below.

 

2.1.2. If P IERRE F ABRE does not provide Packaging Services pursuant to Section 5.3.4 of the Supply Agreement, then N OVACEA shall have the right, without payment of consideration other than that provided in Article 11 of this Agreement, to procure such Packaging Services from a Third Party. The rights and licenses granted in Sections 2.1.1 and 2.1.2 hereof may be referred to herein collectively as the “N OVACEA Licenses.”

 

2.1.3. The N OVACEA Licenses shall permit N OVACEA to develop, register, use, sell, offer to sell and import the Licensed Product in the Field in the N OVACEA Territory.

 

2.2.	License Grant by N OVACEA to P IERRE F ABRE .

 

N OVACEA hereby grants to P IERRE F ABRE an exclusive, fully paid-up and royalty-free license, including the right to grant sublicenses in accordance, with Section 2.4 hereof, under the N OVACEA Know-How and N OVACEA ’s patent rights with respect to the Licensed Product, if any, (i) to develop, register, use, sell, offer to sell and import the Licensed Product in the Field in the

 

2

P IERRE F ABRE Territory, and (ii) to use Improvements originating from N OVACEA to develop, register, use, sell, offer to sell and import Licensed Product in the Field in the P IERRE F ABRE Territory (the “P IERRE F ABRE License”).

 

2.3.	Covenant Not to Sue .

 

P IERRE F ABRE agrees that during the Royalty Term, neither it nor any of its Affiliates will assert against N OVACEA , its Affiliates or permitted sublicensees, any Patent not included in the P IERRE F ABRE Patents that is or might be infringed by reason of the development, use, sale, offer for sale or importation by N OVACEA , its Affiliate or a permitted sublicensee of a Licensed Product or Improvement, in the Field, in the N OVACEA Territory.

 

2.4.	Right to sublicense .

 

2.4.1. N OVACEA right to sublicense to Affiliates. At any time following the end of the US End Of Phase 2 Meeting with the FDA (as defined in the Development Plan for the USA), N OVACEA shall have the right to grant sublicenses to its Affiliates under the N OVACEA Licenses in the N OVACEA Territory without any P IERRE F ABRE consent required.

 

2.4.2. N OVACEA right to sublicense to Third Parties. N OVACEA shall have the right to grant sublicenses under the N OVACEA Licenses to Third Parties in Canada only with the prior written consent of P IERRE F ABRE , such consent not to be unreasonably withheld or delayed; provided however, that N OVACEA will keep P IERRE F ABRE regularly informed of its progress in selecting a sublicensee in Canada and will discuss with P IERRE F ABRE any requirements that N OVACEA believes a sublicensee should reasonably possess or meet such as (i) presence and strength in oncology and (ii) the nature of its portfolio to ensure that it includes no Competing Product, but N OVACEA shall not be required to discuss with P IERRE F ABRE the specific financial compensation that N OVACEA is seeking for itself for the grant of any sublicense. For clarity, N OVACEA shall have no right to grant sublicenses to Third Parties in the USA under the N OVACEA Licenses without the prior written consent of P IERRE F ABRE , which may be given or withheld in its sole discretion.

 

2.4.3. Responsibilities of N OVACEA . N OVACEA shall be responsible for performing all of its obligations set forth in this Agreement, without regard to whether it has granted any sublicense under Sections 2.4.1 or 2.4.2. Without limitation of the preceding sentence, N OVACEA shall be responsible for reporting to P IERRE F ABRE the sales of Licensed Product and Improvements by any Affiliate or sublicensee of N OVACEA , and paying the Patent and Know-How Royalties on Net Sales to PIERRE FABER, in each case as though such sales were made by N OVACEA itself.

 

2.4.4. P IERRE F ABRE Right to Sublicense. P IERRE F ABRE shall have the unrestricted right to grant sublicenses under the P IERRE F ABRE Patents, P IERRE F ABRE Know-How, N OVACEA Know-How and N OVACEA Patent rights with respect to the Licensed Product, if any, to manufacture, register, use, sell, offer to sell and import the Licensed Product and Improvements in the Field, to its Affiliates and Third Parties in the P IERRE F ABRE Territory, without any N OVACEA consent required.

 

3

2.5.	Effectiveness of Licenses .

 

Notwithstanding anything to the contrary set forth in this Article 2, the grants of the N OVACEA Licenses and the P IERRE F ABRE License shall be of no force and effect until the Effective Date.

 

2.6.	Termination of N OVACEA Licenses in Canada .

 

Within one hundred eighty (180) days from the end of the US End Of Phase 2 Meeting, N OVACEA , in consultation with the JDC, shall promulgate a specific Development Plan for Canada. Such Development Plan for Canada shall be in substantially the same level of detail as the Development Plan for the USA attached as Schedule 5.1.1 hereto, and shall be consistent with P IERRE F ABRE ’ S Global Product Strategy (as defined in Section 7.3 below).

 

If, at any time during the aforesaid one hundred eighty (180) day period, N OVACEA decides that it does not wish to pursue development/Approval activities of the Licensed Product in Canada, it shall give P IERRE F ABRE prompt written notice of its decision, whereupon P IERRE F ABRE shall have the right to terminate the N OVACEA Licenses for Canada upon a further thirty (30) days’ prior written notice to N OVACEA . If N OVACEA fails to promulgate such a Development Plan for Canada within such one hundred eighty (180) day period, P IERRE F ABRE shall have the right to terminate the N OVACEA Licenses for Canada upon thirty (30) days’ prior written notice to N OVACEA .

 

Upon termination of the N OVACEA Licenses for Canada as provided above, then (a) N OVACEA shall provide P IERRE F ABRE free of charge, on an orderly and timely basis, with all materials and documents in connection with the development of the Licensed Product in Canada including any IND or other regulatory filing and correspondence that may have taken place with HC, if any, (b) all obligations of P IERRE F ABRE pertaining to Canada shall. terminate forthwith and (c) the provisions of Section 18.2.2 shall apply with respect to Canada.

 

ARTICLE 3 – TRADEMARK

 

In the N OVACEA Territory, the Licensed Product and (to the extent lawful and appropriate) Improvements, if any, will be sold exclusively under the Trademark. Terms and conditions of use of the Trademark by N OVACEA , its Affiliates and its permitted sublicensees (if applicable), during and after the Royalty Term, are set forth in the Trademark License Agreement of even date hereof.

 

ARTICLE 4 – DISCLOSURE AND USE OF KNOW-HOW

 

4.1.	Disclosure of P IERRE F ABRE Know-How .

 

Unless supplied to N OVACEA prior to the Effective Date under the Disclosure Agreement, on or about the Effective Date, P IERRE F ABRE will supply N OVACEA with all available P IERRE F ABRE Know-How. Thereafter, during the Royalty Term, P IERRE F ABRE will promptly disclose to N OVACEA any and all additional P IERRE F ABRE Know-How that becomes available to P IERRE F ABRE .

 

4

4.2. Disclosure of N OVACEA Know-How .

 

During the Royalty Term, N OVACEA will promptly disclose to P IERRE F ABRE all N OVACEA Know-How that becomes available to N OVACEA .

 

4.3.	Use of P IERRE F ABRE Know-How .

 

P IERRE F ABRE agrees that N OVACEA , its Affiliates and its permitted sublicensees (if applicable) have the right to use and reference all P IERRE F ABRE Know-How derived from P IERRE F ABRE ’s, its Affiliates’ and sublicensees’ development activities in the P IERRE F ABRE Territory prior to and during the Royalty Term (including Clinical Trials) (i) for regulatory filings that may be made by N OVACEA , its Affiliates or its permitted sublicensees solely for a Licensed Product or Improvement originating from P IERRE F ABRE within the Field in the N OVACEA Territory and (ii) in furtherance of the development and commercialization of Licensed Product or Improvements in the Field in the N OVACEA Territory, in each case at no cost; provided, that, the above-referenced rights of N OVACEA , its Affiliates and its permitted sublicensees to any such P IERRE F ABRE Know-How acquired by P IERRE F ABRE , its Affiliates or sublicensees from a Third Party shall be subject to any restrictions agreed upon by P IERRE F ABRE , its Affiliates or sublicensees with such Third Party.

 

4.4.	Use of N OVACEA Know-How .

 

N OVACEA agrees that P IERRE F ABRE , its Affiliates and its sublicensees have the right to use and reference all N OVACEA Know-How derived from N OVACEA and its Affiliates’ and sublicensees’ development activities in the N OVACEA Territory during the Royalty Term (including Clinical Trials and those pharmaceutical and pre-clinical studies conducted by N OVACEA , its Affiliates or permitted sublicensees pursuant to the Development Plan or for regulatory filing purposes) (i) for regulatory filings that may be made by P IERRE F ABRE , its Affiliates and sublicensees solely for a Licensed Product or Improvement originating from N OVACEA within the Field in the P IERRE F ABRE Territory and (ii) in furtherance of the development and commercialization of Licensed Product and Improvements in the Field in the P IERRE F ABRE Territory, in each case at no cost; provided, that, the above-referenced rights of P IERRE F ABRE , its Affiliates and its sublicensees to any such N OVACEA Know-How acquired by N OVACEA , its Affiliates or its sublicensees from a Third Party shall be subject to any restrictions agreed upon by N OVACEA , its Affiliates or its sublicensees with such Third Party.

 

ARTICLE 5 – DEVELOPMENT - REGISTRATION

 

5.1.	Development Plan .

 

5.1.1. Development Plan for the USA. N OVACEA , in consultation with P IERRE F ABRE , has determined that additional clinical development activities are necessary and appropriate to supplement P IERRE F ABRE Know-How in order to meet the requirements for Approval of the Licensed Product in the USA. The clinical development activities contemplated as of the Effective Date are set forth in the Development Plan attached as Schedule 5.1.1 hereto. No later than twelve (12) months prior to the estimated date of filing of the first NDA in the USA, pursuant to the procedure set forth in Section 5.1.3, N OVACEA shall supplement the Development

 

5

Plan to reflect N OVACEA ’s strategy for securing Compendia Listings of the Licensed Product that N OVACEA intends to pursue in the USA.

 

5.1.2. Development Plan for Canada. The Development Plan for Canada shall be established by N OVACEA as provided in Section 2.6 above. Upon such establishment of a Development Plan for Canada, such Development Plan shall be appended to and made a part of this Agreement for all purposes as Schedule 5.1.2 hereto. P IERRE F ABRE shall use its Diligent Efforts to facilitate N OVACEA ’s access to HC for purposes of conducting meetings concerning the development and registration of the Licensed Product in Canada. Subject to P IERRE F ABRE ’s prior approval, after the termination of this Agreement with respect to Canada pursuant to Section 2.6 hereof, N OVACEA shall have the right to conduct Clinical Trials with respect to the Licensed Product in the Cancer Field in Canada solely to facilitate the Approval of the Licensed Product in the USA.

 

5.1.3. Amendment of Development Plan. The Development Plan set forth on Schedule 5.1.1 attached hereto reflects the studies anticipated at the Effective Date in order to seek Approval of the Licensed Product in the USA. It is understood that such Development Plan and the Development Plan for Canada, to be further attached as Schedule 5.1.2 hereto, shall be subject to updating, modifications or additions by N OVACEA based on, among other things, review, requests and recommendations of the FDA or HC. Any proposed substantive update to, modification of or addition to any Development Plan shall be discussed within the JDC and shall take into consideration the requests and recommendations of the FDA and HC, as applicable; provided, however, that N OVACEA shall have no right to amend or otherwise modify the Development Plan attached hereto as Schedule 5.1.1 prior to the end of the US End Of Phase 2 Meeting without the prior written consent of P IERRE F ABRE .

 

5.2.

JDC .

 

The JDC shall be formed promptly after the Effective Date and shall have the responsibilities set forth in Schedule 5.2 attached hereto.

 

5.3.	Development Responsibilities .

 

5.3.1. Transfer and Assignment of IND to N OVACEA . P IERRE F ABRE hereby agrees to transfer and assign or cause to be transferred and assigned by SmithKline Beecham Corporation (d/b/a GlaxoSmithKline) to N OVACEA within sixty (60) days of the Effective Date, IND N°36,397 for “ Navelbine (Vinorelbine tartrate) Soft Capsules ” filed with the FDA.

 

5.3.2. Contracts with Investigators. Attached hereto as Schedule 5.3.2 is a list of all contracts between GlaxoSmithKline and US and Canadian investigators which, to P IERRE F ABRE ’s knowledge, are outstanding at the Effective Date. Within sixty (60) days after the Effective Date and upon fifteen (15) days’ prior notice to N OVACEA , P IERRE F ABRE shall cause all such contracts and other outstanding contracts, if any, to be transferred and assigned by GlaxoSmithKline to N OVACEA .

 

6

5.3.3. Development Obligations of N OVACEA .

 

(a)

Subject to the timely transfer of the IND by P IERRE F ABRE or its designee as provided in Section 5.3.1, above, and except as provided in Clause (b) below, N OVACEA shall, at its expense, use Diligent Efforts to: (i) undertake the development activities described in the Development Plan with respect to the Licensed Product in the Cancer Field in the USA and in Canada, if applicable, and (ii) make regulatory filings to seek Approval of the Licensed Product in the Cancer Field in the USA and Canada, if applicable, all within the timeframe(s) set forth in such Development Plan.

 

(b)

P IERRE F ABRE agrees to [*] with N OVACEA the cost for that portion of the [*] for the Licensed Product in the USA as described in the version of the Development Plan attached hereto as Schedule 5.1.1 , [*], participating in such Clinical Trial, based on [*] [*] Following such [*], N OVACEA shall provide P IERRE F ABRE with a report setting forth in reasonable written detail the out-of-pocket costs of such Clinical Trial actually paid by N OVACEA (including evidence thereof), [*] and [*] participating therein. P IERRE F ABRE shall be deemed to agree to such report and its obligation set forth therein if it does not object in writing thereto within sixty (60) days of its receipt thereof. To satisfy its obligation under this Clause (b), P IERRE F ABRE shall have no obligation to make any payment directly to N OVACEA . [*] Upon P IERRE F ABRE ’s request, N OVACEA shall provide written evidence to P IERRE F ABRE as to the aggregate amount that N OVACEA has credited, along with a break-out of the amounts [*] on which such credit is applied.

 

5.3.4. N OVACEA Decision-Making Authority. After the US End Of Phase 2 Meeting, subject to its obligation to discuss certain matters through the JDC ( e.g. , proposed amendments to the Development Plan), N OVACEA shall have the final say on the development of the Licensed Product in the N OVACEA Territory; provided, however, that, if P IERRE F ABRE reasonably determines that a decision by N OVACEA would be inconsistent with the Global Product Strategy, then P IERRE F ABRE may present the matter for resolution by the JDC. If the JDC is unable to resolve the dispute within thirty (30) days of the date on which the disputed matter is first presented to the JDC pursuant to this Section 5.3.4, then the dispute resolution procedures in Section 22.2 shall apply. N OVACEA shall exercise its good faith judgment consistent with its obligation to use Diligent Efforts in determining whether to cease development of the Licensed Product within an indication set forth in the Development Plan (whether an Approved Indication or Compendia Indication) or to develop new indications that it has decided to develop based on the then available pre-clinical and clinical data. N OVACEA shall keep P IERRE F ABRE informed of its progress in complying with the Development Plan and the results of the studies conducted thereunder in the N OVACEA Territory as provided in Section 5.5, below.

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

7

5.3.5. Cessation of Development by N OVACEA .

 

(a)

Subject to Section 23.7, below (force majeure), if for a period of three (3) consecutive months N OVACEA has not used its Diligent Efforts to pursue the development of Licensed Product in a given country in the N OVACEA Territory in accordance with the Development Plan (other than for justifiable and demonstrable safety, efficacy, technical or regulatory reasons), then at any time thereafter, P IERRE F ABRE may give written notice of N OVACEA ’s abandonment of Licensed Product in such country(ies). Within thirty (30) days of receipt of any such notice, N OVACEA may elect to provide written evidence of an active plan for resuming active development of the Licensed Product in such country(ies) within thirty (30) days after receipt of such written notice from P IERRE F ABRE ; provided, that, (i) if N OVACEA does not provide such evidence within such thirty (30) day period, or (ii) N OVACEA does provide such evidence but at any time it fails to use Diligent Efforts to abide by such active plan, then P IERRE F ABRE shall have the right to terminate the N OVACEA Licenses for the Licensed Product in such country(ies), upon ten (10) days’ prior written notice to N OVACEA .

 

(b)

Notwithstanding anything to the contrary set forth in this Agreement, if P IERRE F ABRE ’s termination right under Section 5.3.5(a) relates to the Licensed Product in the USA, then P IERRE F ABRE shall have the right to terminate all the N OVACEA Licenses in the entire N OVACEA Territory.

 

5.3.6. Technical Failure of Development. In case the results of Clinical Trials listed in the Development Plan for the USA do not allow N OVACEA to file an initial NDA for the Licensed Product in the USA for the indication then under development, due to justifiable and demonstrable safety, efficacy or regulatory reasons, as disclosed by N OVACEA to P IERRE F ABRE in reasonable written detail, then N OVACEA shall have the right to terminate development of the Licensed Product and the further right, in its discretion, to terminate this Agreement pursuant to Section 17.2.4, below. If N OVACEA elects to terminate development of a Licensed Product pursuant to this Section 5.3.6 but not to terminate the Agreement pursuant to Section 17.2.4, below, then N OVACEA shall, promptly and in consultation with the JDC, promulgate a new development plan for a different target indication for the Licensed Product, consistent with the Global Product Strategy. Following such consultation, such development plan shall be deemed to be the Development Plan for the USA for purposes of this Agreement. If N OVACEA fails to promulgate a new development plan consistent with the Global Product Strategy within ninety (90) days following the date on which it terminated development pursuant to this Section 5.3.6, either Party shall have the right to terminate this Agreement pursuant to Section 17.2.4, below.

 

5.3.7. Right to Terminate Development Activities Without Cause. N OVACEA shall have the right to terminate its development activities hereunder and this Agreement, without cause, following the U.S. End Of Phase 2 Meeting, as provided in Section 17.4.

 

5.4.	Protocols .

 

As it implements the Development Plan, N OVACEA shall prepare draft protocols for those Clinical Trials and compendia clinical studies to be conducted by N OVACEA pursuant to the Development Plan, and N OVACEA shall submit a protocol, synopsis for each Clinical Trial (in the form attached as Schedule 5.4 hereto), and a compendia synopsis for each compendia clinical

 

8

study (in a similar form to the one attached as Schedule 5.4 hereto), to P IERRE F ABRE to allow P IERRE F ABRE a reasonable opportunity (being no less than thirty (30) days) to review and comment upon same; provided, however, that N OVACEA shall have final decision-making authority regarding pre-clinical trials, Clinical Trials and compendia clinical studies in the N OVACEA Territory. P IERRE F ABRE shall notify N OVACEA in writing of its comments. If P IERRE F ABRE timely objects to such draft protocols for safety, efficacy or regulatory reasons, N OVACEA shall give due consideration to P IERRE F ABRE objections, it being understood that all final decisions with respect to such protocols shall be made by N OVACEA . Failure of P IERRE F ABRE to notify N OVACEA within the applicable time period for review shall constitute approval of such draft protocols.

 

5.5.	Progress Meetings .

 

During meetings of the JDC, N OVACEA shall provide P IERRE F ABRE with progress reports on its, its Affiliates’ and its permitted sublicensees’ development activities in the N OVACEA Territory for each indication of the Licensed Product ( e.g. , whether an Approved Indication or Compendia Indication) and, if available to P IERRE F ABRE , P IERRE F ABRE shall provide N OVACEA with similar reports on its and its sublicensees’ development activities with respect to the Licensed Product in countries in the P IERRE F ABRE Territory.

 

5.6.	Scientific Publications .

 

N OVACEA shall not publish or present the results of any of its development activities for the Licensed Product or Improvements within the Field, including, but not limited to, on-line publications of information regarding results of Clinical Trials conducted by N OVACEA , its Affiliates or permitted sublicensees, without the opportunity for prior review by P IERRE F ABRE and without P IERRE F ABRE ’s prior written consent (not to be unreasonably withheld or delayed). Subject to Article 14 hereof, N OVACEA agrees to provide P IERRE F ABRE the opportunity to review any proposed abstracts, manuscripts or presentations (including verbal presentations) which relate to the Licensed Product or Improvements at least ten (10) (and where practicable, at least thirty (30)) days prior to their intended submission for publication and agrees, upon request, not to submit any such abstract or manuscript for publication until P IERRE F ABRE is given a reasonable period of time to secure a Patent for any material in such publication which it believes to be patentable. Neither Party shall have the right to publish or present Confidential Information of the other Party. Nothing contained in this Section 5.6 shall prohibit the inclusion of information if necessary for a patent application, except for Confidential Information of the non-filing Party, provided the non-filing Party is given a reasonable opportunity to review the information to be included prior to submission of such patent application. Notwithstanding the foregoing, the Parties recognize that independent investigators may be engaged in the future to conduct pre-clinical trials, Clinical Trials and compendia clinical studies of the Licensed Product or Improvements. The Parties recognize that such investigators operate in an academic environment and may release information regarding such studies in a manner consistent with academic standards; nevertheless, each Party will use Diligent Efforts to prevent publication by an independent investigator prior to the filing of relevant patent applications and to prevent disclosure by an independent investigator of Confidential Information of the other Party.

 

9

5.7.	Supply of Licensed Product during Clinical Development .

 

For the pre-clinical (if applicable) and clinical development of the Licensed Product within the Field in the N OVACEA Territory, P IERRE F ABRE shall comply with its supply obligations set forth in the Supply Agreement.

 

5.8.	Regulatory Exclusivity .

 

The JDC shall oversee the process of applying for and securing regulatory exclusivity rights that may be available under applicable Legal Requirements in the N OVACEA Territory. Each Party shall reasonably cooperate with the other to take such reasonable actions to assist the other Party in obtaining such exclusivity rights in each country, as directed by the JDC.

 

5.9.	Right to Audit Third Parties .

 

To the extent permitted by applicable Legal Requirements, each Party shall allow the other Party’s authorized representatives and Regulatory Authorities from the other Party’s territory, with reasonable notice and during regular business hours, and at the other Party’s sole cost and expense, (i) to examine and inspect its facilities or, subject to any Third Party confidentiality restrictions or obligations, the facilities of any subcontractor or investigator used by it in the Clinical Trials, and (ii) subject to any Third Party confidentiality restrictions or obligations, to inspect and copy all data, documentation and work product relating to the activities performed by the subcontractor or investigator, including, without limitation, but subject to Section 14.5, the medical records of any patient participating in any Clinical Trial. This right to inspect and copy all data, documentation, and work product relating to a Licensed Product or Improvement may be exercised at any time during the term of this Agreement (subject to each Party’s record retention policies then in effect), or such longer period as shall be required by applicable Legal Requirements.

 

5.10.

Development of Licensed Product or Improvement outside of Cancer Field .

 

The Parties acknowledge that, as of the date of this Agreement, it is currently anticipated that N OVACEA will develop and commercialize the Licensed Product only in the Cancer Field. If N OVACEA decides to develop the Licensed Product or an Improvement outside the Cancer Field, it shall so notify P IERRE F ABRE , whereupon the Parties will promptly begin to negotiate in good faith: (i) the terms and conditions (including, without limitation, the payment of milestones and royalties and the establishment of minimum sales) on which N OVACEA shall have the right to conduct such proposed development and commercialization, giving due consideration to the potential market opportunity identified by N OVACEA , the risks in pursuing such opportunity and the relative contributions of the Parties (including intellectual property rights contributed) to the manufacture, use and sale of Licensed Product for the indication(s) proposed by N OVACEA , (ii) the impact of anticipated sales outside of the Cancer Field on Projected Net Sales of the Licensed Product in the Cancer Field, (iii) any other necessary or desirable amendments to this Agreement and the Related Agreements, and (iv) a restatement of any or all such agreements if the Parties so agree, that may be necessary or desirable with respect to such development in the non-Cancer Field. To the extent the Parties are unable to agree on all of the matters contemplated in Clause (i) above, then any such matters with respect to which there is no

 

10

agreement will be determined by an Outside Expert (as defined in Section 22.4 below) pursuant to Section 22.4, below.

 

ARTICLE 6 – REGULATORY MATTERS

 

6.1.	Drug Master Files; Cross Reference Rights; General Matters .

 

6.1.1. Drug Master Files. P IERRE F ABRE has established Drug Master Files (collectively, “DMFs”) with the FDA and HC relating to the manufacture of Compound.

 

6.1.2. Ownership by P IERRE F ABRE . P IERRE F ABRE and N OVACEA agree that, as between P IERRE F ABRE and N OVACEA , P IERRE F ABRE shall be the sole owner of all DMFs relating to the Compound.

 

6.1.3. Letters of Authorization. P IERRE F ABRE shall provide letters of authorization to the FDA and HC, and take such other action as N OVACEA may reasonably request to allow N OVACEA , its Affiliates or its permitted sublicensees (if applicable), to refer to DMFs in connection with any submissions or filings which N OVACEA , its Affiliates or its permitted sublicensees make with respect to the Licensed Product in the N OVACEA Territory.

 

6.1.4. Discussion within JDC. Regulatory matters concerning the ongoing development and Approval of the Licensed Product and any Improvement in the N OVACEA Territory and in major countries of the P IERRE F ABRE Territory, may be discussed within the JDC.

 

6.2.	Approval .

 

N OVACEA shall be solely responsible (whether directly or in coordination with its Affiliates or permitted sublicensees) for all filings and other submissions to the FDA and the HC in the N OVACEA Territory with respect to the Licensed Product. N OVACEA shall be solely responsible for determining whether the data package from the Clinical Trials conducted for a given indication supports an Approval for such indication or a Compendia Listing in a given country in the N OVACEA Territory. N OVACEA shall give P IERRE F ABRE the opportunity to participate in the preparation for, and to attend, meetings with the FDA and/or HC during the regulatory process of the Licensed Product; provided, however, that prior to participation by P IERRE F ABRE in any such meeting the Parties shall consult in good faith as to the number and function of the proposed P IERRE F ABRE attendees and such attendees shall, to the extent not inconsistent with the Global Product Strategy, defer to and support the positions espoused by N OVACEA at such meetings. All costs payable to apply for, maintain and or renew any Approvals or Compendia Listings will be fully borne by N OVACEA , its Affiliates or its permitted sublicensees, as the case may be; provided, however, that all costs related to the participation by P IERRE F ABRE in any such FDA or HC meetings shall be borne by P IERRE F ABRE

 

6.3.	Diligence during Regulatory Process .

 

N OVACEA shall use Diligent Efforts to make regulatory submissions in the N OVACEA Territory for the purpose of securing Approval of the Licensed Product based on data from the registrational Clinical Trials to be performed in support of those indications for which a

 

11

registration strategy (as opposed to a Compendia Listing strategy) is set forth in the Development Plan. Provided that no additional Clinical Trials beyond those set forth in the Development Plan are required by the FDA or HC, N OVACEA agrees to use Diligent Efforts to file a NDA for a first Approved Indication of the Licensed Product as set forth in the Development Plan.

 

6.4.	Maintenance of Approvals .

 

6.4.1. N OVACEA Obligation. N OVACEA shall have sole responsibility at its expense for maintaining, and shall use Diligent Efforts to maintain the Approvals in the N OVACEA Territory, until such time as either both Parties may agree in their discretion that N OVACEA should assign its rights to any such Approvals to P IERRE F ABRE or N OVACEA is required by the terms of this Agreement or any Related Agreement to do so.

 

6.4.2. P IERRE F ABRE Obligation. P IERRE F ABRE shall keep N OVACEA informed on a timely basis as to any developments relating to its activities with respect to the Licensed Product or Improvement that would have a material adverse effect on any Approval in the N OVACEA Territory, including without limitation any manufacturing developments relating to the CMC section of any NDA. With respect to documents, data and other information to be provided by P IERRE F ABRE to N OVACEA in accordance with this Section 6.4 for submission to a Regulatory Authority in the N OVACEA Territory, P IERRE F ABRE shall provide same in the English language. N OVACEA shall be responsible for (i) formatting same to local country requirements, (ii) incorporation of any additional necessary information and data and (iii) assembly of documents, data and information to the format as may be required by such Regulatory Authority. In addition to paper and other tangible copies, P IERRE F ABRE shall, upon N OVACEA ’s request, and subject to availability, also provide to N OVACEA electronic copies of such documents, data and other information.

 

6.4.3. Access to Regulatory Filings. N OVACEA shall provide to P IERRE F ABRE on a timely manner, access to copies of all regulatory filings submitted by it to a Regulatory Authority in the N OVACEA Territory for any Licensed Product or Improvement.

 

ARTICLE 7 – COMMERCIALIZATION

 

7.1.

Launch .

 

Provided that N OVACEA has received necessary supplies from P IERRE F ABRE pursuant to the Supply Agreement, N OVACEA agrees to use Diligent Efforts to commercially launch the Licensed Product in each country of the N OVACEA Territory within ninety (90) days from the date of Approval of a first Approved Indication in each such country of the N OVACEA Territory.

 

7.2.

JCC .

 

The JCC shall be formed promptly after the Effective Date and shall have the responsibilities set forth in Schedule 7.2 attached hereto.

 

12

7.3.	Certain Responsibilities .

 

N OVACEA shall use Diligent Efforts to promote and commercialize the Licensed Product in the N OVACEA Territory, so long as such activities do not conflict with the global development and commercialization strategy for the Licensed Product determined by P IERRE F ABRE for the Licensed Product, as set forth in Schedule 7.3 attached hereto (the “Global Product Strategy”).

 

7.4.	Compliance with Legal Requirements .

 

N OVACEA agrees that it, its Affiliates and its permitted sublicensees will comply in all material respects with all applicable Legal Requirements in marketing, promoting and selling the Licensed Product and Improvements in the N OVACEA Territory, and N OVACEA shall bear all responsibility with respect thereto, irrespective of any Affiliate or sublicensee it may have granted pursuant to Section 2.4.1 and/or 2.4.2 hereof.

 

7.5.	Supply of Licensed Product for Commercialization .

 

For the duration of the Royalty Term, P IERRE F ABRE shall supply N OVACEA , and N OVACEA shall purchase from P IERRE F ABRE , all of N OVACEA ’s requirements of Licensed Product and Improvements for commercialization in each country of the N OVACEA Territory pursuant to the terms and conditions set forth in the Supply Agreement.

 

7.6.	Trade Dress Marking .

 

The Licensed Product and Improvements will be marketed in the N OVACEA Territory under N OVACEA ’s trade dress (i.e., packaging and labeling); provided that all packaging elements, package inserts and promotional material will contain, in a commercially reasonable presentation and legible manner, the following wording: “Licensed from P IERRE F ABRE M EDICAMENT S.A.” In addition, P IERRE F ABRE shall be identified as the owner of the Trademark on each such item.

 

7.7.	Progress Meetings and Commercial Reporting .

 

N OVACEA shall provide P IERRE F ABRE with the following written information:

 

(a)

on a monthly basis, within fifteen (15) business days after the end of the preceding month, N OVACEA ’s internal report of gross sales of the preceding month, in units and value, in each country of the N OVACEA Territory; and

 

(b)

on a quarterly basis, within thirty (30) days after the end of each Quarter, N OVACEA ’s internal report of (i) gross sales, (ii) Net Sales and (iii) inventory levels (in units), of the preceding Quarter, all such information to be provided on a country by country and dosage form by dosage form basis.

 

(c)

if and to the extent N OVACEA has such information available, it shall provide to P IERRE F ABRE , in a timely manner, each qualitative analysis obtained by N OVACEA from a Third Party and in the format available to N OVACEA with respect to sales results, in units and value for the Licensed Product and

 

13

Improvements, by market segment and material commercial activities for the USA and Canada (market segment data for USA and Canada being (1) outpatient office-based, (2) outpatient hospital clinics and (3) hospitals.

 

Subject to any restriction in an agreement with Third Parties, each Party will supply the other, free of charge and on a timely basis after receipt thereof, with information that is made available to it from outside panels ( e.g. , Key Opinion Leaders opinions and market research), for (i) each indication in each major market and (ii) the Licensed Product, Improvement, if any and Competing Products.

 

7.8.	Phase 3b and Phase 4 Clinical Trials .

 

N OVACEA will be responsible for the design, conduct and costs of non-registrational Phase 3b and Phase 4 Clinical Trials in the N OVACEA Territory provided that N OVACEA (i) will share its overall plans for non-registrational studies and resulting data with P IERRE F ABRE through the JDC or JCC and (ii) will submit to P IERRE F ABRE all non registrational study protocol synopses for its comments, provided that P IERRE F ABRE may only object to a protocol or trial if it is not consistent with the Global Product Strategy, in which case, N OVACEA shall not implement such protocol in the N OVACEA Territory.

 

7.9.	Medical Inquiries .

 

N OVACEA shall have sole responsibility, at its expense, for handling all medical inquiries concerning the Licensed Product and Improvements in the N OVACEA Territory.

 

ARTICLE 8 – NON-COMPETITION-IV FORM

 

8.1.	P IERRE F ABRE Competing Products .

 

8.1.1. Restrictions on P IERRE F ABRE . For the duration of the Royalty Term, PIERRE FABRE agrees that, without N OVACEA ’s prior written consent, neither P IERRE F ABRE nor any of its Affiliates or agents shall: (i) develop, market or sell a Competing Product within the Field in the N OVACEA Territory, or (ii) assist (by license or otherwise) any Third Party in the development, marketing or sale of a Competing Product within the Field in the N OVACEA Territory.

 

8.1.2. Expansion of N OVACEA Licenses to Competing Products. P IERRE F ABRE agrees to discuss with N OVACEA the expansion of the N OVACEA Licenses to include any Competing Product that P IERRE F ABRE has developed in the P IERRE F ABRE Territory and that it wishes to develop or commercialize in the N OVACEA Territory, and the Parties shall negotiate in good faith a patent and know-how license agreement, trademark agreement and supply agreement (or appropriate amendments to this Agreement and the Related Agreements) with respect to any such Competing Product, including, without limitation, minimum sales, milestone payments, royalty obligations and supply terms with respect to development and commercialization thereof by N OVACEA .

 

14

8.2.	N OVACEA Competing Products .

 

8.2.1. Restrictions on N OVACEA . During the Royalty Term, N OVACEA agrees that neither it, any Affiliate nor any sub-licensee or agent shall (i) develop, market or sell a Competing Product within the Field in the N OVACEA Territory or (ii) assist (by license or otherwise) any Third Party in the development, marketing or sale of a Competing Product within the field in the N OVACEA Territory; provided, that:

 

(a)

if N OVACEA acquires a Competing Product by reason of a merger, change of control or acquisition of all or substantially all of the assets of a Third Party (any such event being hereinafter refereed to as “Acquisition”) that, at the time of such Acquisition, is being marketed in a country of the N OVACEA Territory, then N OVACEA must make a decision within ninety (90) days after closing on such Acquisition to (i) either keep such Competing Product in such country (in which case the N OVACEA Licenses in such country shall terminate and all rights to the Licensed Product will revert free of charge to P IERRE F ABRE in such country, including all Approvals, N OVACEA shall cooperate with P IERRE F ABRE in evidencing the reversion of such rights to P IERRE F ABRE , and the terms of Section 18.2.2(a)-(d) below shall otherwise be applicable) or (ii) to divest the Competing Product. If N OVACEA elects the latter option, it will have a reasonable period of time (not to exceed six (6) months from the date of Acquisition) to use its Diligent Efforts to divest such Competing Product (the progress of which N OVACEA shall report in reasonable detail to P IERRE F ABRE in writing on or before the first day of each Quarter); and

 

(b)

if N OVACEA acquires a Competing Product through an Acquisition that, at the time of such Acquisition is in development, then N OVACEA (i) may continue to develop such Competing Product but will not conduct any development activity versus the Licensed Product in the N OVACEA Territory or in the P IERRE F ABRE Territory unless agreed to by P IERRE F ABRE or requested by a Regulatory Authority, and (ii) may not itself market the Competing Product in the N OVACEA Territory unless it first terminates its right to market the Licensed Product, in which case the N OVACEA Licenses with respect to such Licensed Product shall terminate and all rights to such Licensed Product will revert free of charge to P IERRE F ABRE , including the right to all Approvals (and N OVACEA shall cooperate with P IERRE F ABRE in evidencing the reversion of such rights to P IERRE F ABRE , and the terms of Section 18.2.2(a)-(d) below shall otherwise be applicable); provided that N OVACEA may license the marketing and manufacturing rights to such Competing Product to a Third Party without being required to terminate its rights to market the Licensed Product under this Agreement.

 

8.2.2. Rights in P IERRE F ABRE Territory. Nothing in this Section 8.2 shall preclude N OVACEA from developing and commercializing a Competing Product in the P IERRE F ABRE Territory subject to the following:

 

(a)

N OVACEA shall not use the P IERRE F ABRE Patents or the P IERRE F ABRE Know-How for such purposes; and

 

15

(b)

N OVACEA , its Affiliates or sublicensees shall not conduct or have conducted any development activity comparing a Competing Product versus the Licensed Product, an Improvement or any product containing Compound, unless prior agreed with P IERRE F ABRE (P IERRE F ABRE ’s consent not to be unreasonably withheld) or unless requested by a Regulatory Authority.

 

8.3.

IV Form .

 

8.3.1. General. Notwithstanding anything to the contrary set forth in this Agreement or any Related Agreement, (i) nothing in this Agreement or any Related Agreement shall preclude P IERRE F ABRE , its Affiliates or its sublicensees from pursuing the development, marketing and commercialization of the IV Form in the Field in the N OVACEA Territory, and (ii) nothing in this Agreement or any Related Agreement shall preclude P IERRE F ABRE from supplying Compound, the IV Form and/or any product containing Compound in injection form in the N OVACEA Territory at any time.

 

8.3.2. Right of First Refusal of IV Form. If P IERRE F ABRE decides to license to a Third Party its rights to develop, use, sell, offer to sell or import the IV Form in the Field in the United States of America, it shall first offer N OVACEA , in writing, the exclusive right to negotiate such license pursuant to this Section 8.3.2. If, within thirty (30) days of the date of the notice delivered pursuant to the immediately preceding sentence, P IERRE F ABRE receives written notice from N OVACEA that N OVACEA has accepted such right of first negotiation (an “Acceptance Notice”), the Parties shall thereupon promptly continue to negotiate in good faith the terms and conditions of a license for the IV Form in such county; provided, that, P IERRE F ABRE shall have no further obligation to negotiate such license with N OVACEA if the Parties are unable to agree upon the terms and conditions of such license within sixty (60) days of the date of the Acceptance Notice. For the avoidance of doubt, this shall not preclude P IERRE F ABRE from concluding agreements with distributors, wholesalers or buying organizations in the United States of America, as long as P IERRE F ABRE remains the NDA holder for the IV Form.

 

ARTICLE 9 – MINIMUM SALES IN THE CANCER FIELD

 

9.1.

General .

 

9.1.1. Projected Net Sales in the Cancer Field. During the Royalty Term, N OVACEA shall use Diligent Efforts to maximize the sales of the Licensed Product. Attached as Schedule 9.1.1(a) hereto are N OVACEA projected Net Sales in the Cancer Field (the “Projected Net Sales”) for the first six (6) Commercial Years following the estimated Date of Launch in the USA, along with the assumptions underlying such Projected Net Sales. In connection with the establishment of any Development Plan for Canada pursuant to Section 5.1.2 above, N OVACEA shall prepare Projected Net Sales for the first six (6) Commercial Years for Canada and set forth the assumptions underlying such Projected Net Sales. Such Canadian Projected Net Sales and underlying assumptions shall be appended to and made a part of this Agreement for all purposes as Schedule 9.1.1(b) hereto.

 

9.1.2. Five Years of Projected Net Sales at All Times. So that there exists at all times Projected Net Sales for five (5) Commercial Years for each country of the N OVACEA Territory,

 

16

no later than ninety (90) days prior to the end of each Commercial Year, the Parties shall meet through the JCC in order to discuss and agree to the Projected Net Sales for the fifth Commercial Year following each such Commercial Year, which Projected Net Sales shall be based on the assumptions set forth on Schedule 9.1.1(a) or Schedule 9.1.1(b) attached hereto, as the case may be.

 

9.2.	Minimum Sales .

 

9.2.1. Definition. For all purposes under this Agreement “Minimum Sales” for the Licensed Product in the Cancer Field in any Commercial Year in any county of the N OVACEA Territory shall mean [*] percent ([*]%) of Projected Net Sales for such country for any such Commercial Year; provided, however that Minimum Net Sales shall not exceed $[*] in any Commercial Year, irrespective of any adjustment of Projected Net Sales pursuant to Section 9.3.1 below.

 

9.2.2. Failure to Achieve Minimum Sales. If N OVACEA fails to achieve Minimum Sales in the Cancer Field, in either the USA or Canada, for any [*] consecutive Commercial Years during the Royalty Term, then P IERRE F ABRE May terminate the N OVACEA Licenses with respect to the Licensed Product in the USA or Canada, wherever such failure shall have occurred, upon ten (10) days’ prior written notice, said notice to be sent within thirty (30) days from the date P IERRE F ABRE receives the report delivered pursuant to Section 7.7(b) that evidences N OVACEA ’s failure to reach said Minimum Sales for the second of the [*] successive Commercial Years; provided, that, if N OVACEA fails to reach Minimum Sales for [*] consecutive Commercial Years in the USA, then P IERRE F ABRE shall have the right, in its discretion, to terminate the N OVACEA Licenses with respect to the entirety of the N OVACEA Territory. P IERRE F ABRE may rely on the reports delivered pursuant to Section 7.7 to determine whether Minimum Sales have been achieved during any Commercial Year. Failure by N OVACEA to provide P IERRE F ABRE with any report pursuant to Section 7.7 in a timely manner shall entitle P IERRE F ABRE to rely upon any other report provided by N OVACEA under this Agreement or any Related Agreement (such as royalty reports) evidencing N OVACEA ’s failure to reach Minimum Sales.

 

9.2.3. Declining Sales Trend. Notwithstanding anything to the contrary in Section 9.2.2 above, if N OVACEA fails to achieve Minimum Sales during a Commercial Year and if the Net Sales during the first Commercial Half Year of the following Commercial Year (the “Following Commercial Year”) are below [*] percent ([*]%) of the total Minimum Sales for such Following Commercial Year, then N OVACEA shall, promptly following receipt of written request from P IERRE F ABRE , take all necessary anticipatory steps as identified by the Parties in good faith (excluding, however, any communication or filing with any Regulatory Agency) that will enable the Approvals to be transferred to P IERRE F ABRE or its designee in the USA or Canada, as applicable, as soon as possible after N OVACEA receives the termination notice referenced in Section 9.2.2, if, in fact, P IERRE F ABRE delivers such notice.

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

17

9.3.	Adjustment of Projected Net Sales .

 

9.3.1. Material Change in Key Assumptions. Projected Net Sales prepared by N OVACEA in accordance with the foregoing in this Article 9, other than Projected Net Sales for the then current Commercial Year, shall be adjusted from time to time in the affected country of the N OVACEA Territory in the event that either Party reasonably demonstrates there has been any material change in any of the key assumptions set forth in Section III of Schedule 9.1.1 (a)  or Schedule 9.1.1(b) (the “Key Assumptions”), as applicable. Notwithstanding anything to the contrary set forth in this Agreement, in the event the Parties disagree on whether there was any material change in any of the Key Assumptions or in the appropriate amount of any resulting adjustment to Projected Net Sales, then the dispute shall be resolved pursuant to Section 22.4 below.

 

9.3.2. Failure to Supply Licensed Product. If P IERRE F ABRE is unable to provide N OVACEA with N OVACEA ’s requirements of Licensed Product for sale in the USA and Canada pursuant to the Supply Agreement, then the Minimum Sales shall be adjusted by the effect thereof on N OVACEA ’s Projected Net Sales.

 

ARTICLE 10 – GOVERNANCE AND COMMITTEE STRUCTURE

 

10.1.

JDC and JCC .

 

The Parties will cooperate with one another as described in this Agreement through two committees: the Joint Development Committee, or JDC, and the Joint Commercialization Committee, or JCC, each of which shall be subject to the overall direction and coordination of the Parties and have the responsibilities as provided in Schedules 5.2 and 7.2 attached hereto, respectively.

 

10.2.

General Committee Membership and Procedures .

 

10.2.1. Membership. Each committee shall consist of two (2) representatives from each of N OVACEA and P IERRE F ABRE with general expertise in the area under such committee’s purview. Each Party will have one vote on each committee regardless of the number of members it may have on a committee. Each Party’s representatives may serve on more than one committee as appropriate in view of the individual’s expertise. Each Party may replace its representatives on a committee at any time upon written notice to the other Party. Each committee shall have co-chairpersons. N OVACEA and P IERRE F ABRE shall each select from their representatives a co-chairperson for each of the committees. The co-chairpersons of each committee shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting of such committee, and preparing and issuing minutes to committee members of each meeting within thirty (30) days thereafter; provided, that, a committee co-chairperson shall call a meeting of the applicable committee promptly upon the written request of the other co-chairperson to convene such a meeting. Such minutes will not be finalized until both chairpersons review and confirm the accuracy of such minutes by their execution of such minutes.

 

10.2.2. Meetings. Each committee shall hold meetings at such times as it elects to do so in response to the request of either Party’s representative on a committee; provided, however,

 

18

that the JDC shall meet not less frequently than twice each calendar year, and the JCC shall meet no less frequently than every calendar year prior to the first NDA filing in any country of the N OVACEA Territory and no less frequently than twice each calendar year following the first such NDA filing. The JDC and JCC shall coordinate, where practicable, their respective meetings scheduled to occur on consecutive days in the same meeting location. Each committee shall meet alternately at P IERRE F ABRE ’s facilities in France and N OVACEA ’s facilities in the USA, or at such locations as the Parties may otherwise agree after giving due consideration to the location of international oncology meetings to which both Parties may participate ( e.g. , ASCO, AACR and ECCO). Other employees of each Party involved in the development, manufacture or commercialization of the Licensed Product may attend meetings of such committee as nonvoting participants, and, with the prior written consent of each Party, consultants, representatives, or advisors involved in the development, manufacture or commercialization of the Licensed Product may attend meetings of such committee as nonvoting observers; provided, that, such Third Party representatives are under obligations of confidentiality and non-use applicable to the Confidential Information of each Party that are at least as stringent as those set forth in Article 14 of this Agreement. Each Party shall be responsible for all of its own expenses of participating in any committee (including without limitation in any Working Group as defined below). Meetings of any committee may be held by audio or video teleconference with the consent of each Party; provided, that, at least one (1) meeting of such committee per calendar year shall be held in person.

 

10.2.3. Meeting Agendas. Each Party will disclose to the other proposed agenda items along with appropriate information related to such agenda item at least five (5) business days in advance of each meeting of the applicable committee; provided, that, under exigent circumstances requiring committee input, a Party may provide its agenda items to the other Party within a lesser period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as such other Party consents to such later addition of such agenda items or the absence of a specific agenda for such committee meeting.

 

10.2.4. Principal Contact Person. Promptly following the Effective Date, to provide interim decision-making authority for each committee, each Party shall designate to the other Party in writing a principal contact person for addressing matters within the scope of each committee (each a “Principal Contact Person”). Prior to the formation of any particular committee, each Party shall exercise all the decision-making authority and responsibility that could be exercised following the formation of such committee by such Party’s representatives on such committee, as provided in this Article 10, and any and all such decisions shall be binding upon such committee and the Parties as if such decisions were made by such committee as duly constituted hereunder.

 

ARTICLE 11 – FINANCIAL TERMS

 

In consideration of the N OVACEA Licenses hereby granted to it by P IERRE F ABRE with respect to the Licensed Product, N OVACEA shall make to P IERRE F ABRE upfront, milestone and royalty payments as hereinafter provided.

 

19

11.1.

Upfront Payment .

 

In consideration of the rights and licenses granted to it under the P IERRE F ABRE Patents with respect to the Licensed Product and any Improvement originating from P IERRE F ABRE in the Field, N OVACEA shall make to P IERRE F ABRE an upfront, non-reimbursable and non-creditable payment of [*] Dollars ($[*]) by wire transfer to the account designated in writing by P IERRE F ABRE , within five (5) business days after the Effective Date.

 

11.2.

Milestone Payments in the Cancer Field .

 

In consideration of the rights and licenses granted to it under the P IERRE F ABRE Patents with respect to the Licensed Product and any Improvement originating from P IERRE F ABRE in the Cancer Field, N OVACEA shall make to P IERRE F ABRE (i) development, (ii) regulatory and, (iii) sales milestone payments (each a “Milestone Payment”) as provided below:

 

11.2.1. Development Milestones Payments.

 

 

11.2.2. Regulatory Milestone Payments.

 

 

Provided that if the N OVACEA Licenses for Canada are terminated pursuant to Section 2.6 hereof, then regulatory Milestone Payments N°2 and N°3 will not be due.

 

11.2.3. Sales Milestones Payments in the Cancer Field. Based on its sales performance with the Licensed Product and Improvements in the Cancer Field, N OVACEA shall make to P IERRE F ABRE up to [*] in total sales Milestone Payments, as set forth in the table below. Each such sales Milestone Payment shall be due only once.

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

20

 

For the avoidance of doubt, with respect to the first Commercial Year in which N OVACEA ’s Net Sales in the Cancer Field during such Commercial Year reach $ [*] million Dollars, N OVACEA shall owe P IERRE F ABRE a payment of $ [*] million. With respect to the first Commercial Year in which N OVACEA ’s Net Sales in the Cancer Field during such Commercial Year reach $ [*] million, N OVACEA shall owe P IERRE F ABRE a payment of $ [*] million, for a total under this Section 11.2.3 of $ [*] million. With respect to the first Commercial Year in which N OVACEA ’s Net Sales in the Cancer Field during such Commercial Year reach $ [*] million, N OVACEA shall owe a payment of $ [*] million, for a total under this Section 11.2.3 of $ [*] million. With respect to the first Commercial Year in which N OVACEA ’s Net Sales in the Cancer Field during such Commercial Year reach $ [*] million, N OVACEA shall owe P IERRE F ABRE a payment of $ [*] million, for a total under this Section 11.2.3 of $[*] million. With respect to the first Commercial Year in which N OVACEA ’s Net Sales in the Cancer Field during such Commercial Year reach $ [*] million, N OVACEA shall owe P IERRE F ABRE a payment of $ [*] million, for a total under this Section 11.2.3 of $ [*] million.

 

11.2.4. Milestone Payment Mechanics. All Milestone Payments to be made by N OVACEA as provided in this Section 11.2 are one-time only, due and payable on an annual basis, non-reimbursable and non-creditable in all circumstances; and will be made within thirty (30) days of the triggering event by wire transfer to an account designated in writing from time to time by P IERRE F ABRE at SOCIETE GENERALE in France or such other financial institution as P IERRE F ABRE may designate in writing from time to time, the specific wiring instructions with respect to which shall be provided by P IERRE F ABRE to N OVACEA from time to time.

 

11.3.

Patent and Know-Plow Royalty in the Field .

 

11.3.1. Royalty Rates. In further consideration of the N OVACEA Licenses, N OVACEA shall pay P IERRE F ABRE a royalty (the “Patent and Know-How Royalty”) as set forth below.

 

(a)

the Patent and Know-How Royalty rate shall be [*] percent ([*]%) on the Net Sales of each dosage form of (i) the Licensed Product and (ii) Improvements that N OVACEA , its Affiliates and/or its permitted sublicensees (if applicable) make in each country of the N OVACEA Territory;

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

21

(b)

the Parties acknowledge that the sale by N OVACEA of Licensed Product during the Royalty Term may be affected by competition from Third Parties that, for whatever reason, have chosen to compete notwithstanding the P IERRE F ABRE Patents. In the event that there are lawful sales of a Generic Product in any Quarter during the Royalty Term, the royalty rate applicable to Net Sales of Licensed Product and Improvements during such Quarter shall be determined by the formula W = X x (Y-Z), in which “W” is the applicable royalty rate, “X” is [*], “Y” is 100 % and “Z” is the number of percentage points of Market Share, rounded to the nearest whole percentage point, captured by such Generic Product during such Quarter; provided, however, that in no event shall the applicable Patent and Know-How Royalty rate be less than [*] percent ([*]%);

 

(c)

with respect to sales of a Competing Product other than lawful sales of a Generic Product, when such Competing Product takes a Market Share in excess of [*]% for any Quarter in a country of the N OVACEA Territory, the Patent and Know-How Royalty rate applicable to Net Sales made in such country shall be reduced to [*] percent ([*]%) for such Quarter;

 

(d)

for purposes of this Section 11.3.1, “Market Share” shall be based on the grams of Compound (expressed as base) in unit sales of Generic Product (when considered for purposes of Clause (b) above) or other Competing Product (when considered for purposes of Clause (c) above) made by the applicable Third Party(ies) in the subject country of the N OVACEA Territory, divided by the sum of (i) the grams of Compound (expressed as base) in unit sales of Generic Product or other Competing Product, as the case may be, made by Third Party(ies) and (ii) the grams of Compound (expressed as base) in unit sales for such form of the Licensed Product made by N OVACEA in the subject country of the N OVACEA Territory. Unit sales of Generic Product or other Competing Product shall be determined by the sales reported by IMS America Ltd. of Plymouth Meeting, Pennsylvania (“IMS”) or its equivalent in other countries of the N OVACEA Territory or any successor thereto, or such other source as the Parties may mutually agree (the “Sales Reporting Organizations”); and

 

(e)

any reductions in Patent and Know How Royalty under Clause (b) or Clause (c) above shall be effective for sales made by N OVACEA , its Affiliates and its sublicensees for the Licensed Product in such country during the Quarter giving rise to such reduction. Thereafter, Third Party unit sales as reported by the Sales Reporting Organizations shall be used by the Parties on a quarterly basis to determine the Patent and Know-How Royalty rate for the Licensed Product in such country for each successive Quarter, with such rate remaining the same, adjusting pursuant to Clause (b) or Clause (c), above or, if the Market Share of neither a Generic Product nor another Competing Product fails to exceed [*] percent ([*]%) during any such Quarter, returning to the rate otherwise applicable under Clause (a) above, effective for such Quarter.

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

22

11.3.2. Royalty Due Dates. Commencing with the first Date of Launch of the Licensed Product in a first country of the N OVACEA Territory until the end of the Royalty Term in each country, all Patent and Know-How royalty payments accrued as of the end of each Commercial Half Year, as herein provided shall be paid by N OVACEA to P IERRE F ABRE , within sixty (60) days after the end of each Commercial Half Year (i.e., payment is due on or about the last day of each February and August following the Date of Launch). In the event N OVACEA fails to pay any amount within sixty (60) days after the end of each Commercial Half Year, P IERRE F ABRE may charge a monthly late payment fee equal to one percent (1.0%).

 

11.3.3. Reports. Each Patent and Know-How Royalty payment shall be accompanied by a written report, showing (a) the Net Sales of each dosage form of Licensed Product or Improvement sold by N OVACEA , its Affiliates and its permitted sublicensees and the level of inventory (in units) in each country of the N OVACEA Territory during the reporting period; (b) the Patent and Know-How Royalty, payable in Dollars, which shall have accrued hereunder in respect of such Net Sales; (c) withholding taxes, if any, required by Legal Requirements to be deducted in respect of such Net Sales; and (d) the exchange rates used in determining the amount of Dollars. With respect to sales of a Licensed Product or Improvement invoiced in Dollars, the Net Sales, and Patent and Know-How Royalty payable shall be expressed in Dollars. With respect to sales of a Licensed Product or Improvement invoiced in a currency other than Dollars, the Net Sales, and Patent and Know-How Royalty payable hereunder shall be expressed in the domestic currency of the party making the sale, together with the Dollar equivalent of the Patent and Know-How Royalty payable, calculated using the simple average of the exchange rates published in the Wall Street Journal on the last day of each month of the Commercial Year. N OVACEA shall, upon written request, furnish to P IERRE F ABRE appropriate evidence of payment of any tax or other amount deducted from any Patent and Know-How Royalty payment. In case no Patent and Know-How Royalty is due for any Patent and Know-How Royalty period hereunder, N OVACEA shall so report. A sample of a Patent and Know-How Royalty report (without any withholding taxes) required to be delivered by N OVACEA pursuant to this Section 11.3 is attached as Schedule 11.3 hereto.

 

11.3.4. Royalty Payments. Except as otherwise provided in this Section 11.3.4, Patent and Know-How Royalties shall be payable in Dollars and shall be paid by N OVACEA on its account and on account of its Affiliates and sublicensees by wire transfer to P IERRE F ABRE ’s bank account opened at SOCIETE GENERALE in France or at such other financial institution as P IERRE F ABRE may designate in writing from time to time, the specific wiring instructions with respect to which shall be provided by P IERRE F ABRE to N OVACEA from time to time. If at any time legal restrictions prevent the prompt remittance of part or all of the Patent and Know-How Royalties with respect to any country of the N OVACEA Territory where the Licensed Product or an Improvement is sold, N OVACEA shall have the right and option to make such payments by depositing the amount thereof in local currency to P IERRE F ABRE ’s account in a bank or other depository in such country.

 

11.3.5. Accrual of Royalties. No Patent and Know-How Royalty shall be payable on a Licensed Product or an Improvement used in the N OVACEA Territory for development purposes if such Licensed Product or Improvement is given free of charge by N OVACEA for such purposes.

 

23

No Patent and Know-How Royalty shall be payable on sales among N OVACEA , its Affiliates and/or its sublicensees, but Patent and Know-How Royalty shall be payable on subsequent sales by N OVACEA , its Affiliates or its sublicensees to a Third Party.

 

11.3.6. Third Party Royalties.

 

(a)

Subject to Clauses (b) and (c) below, if, based on the written advice of reputable, independent outside counsel selected by the Parties, a copy of which shall be promptly provided to the Parties, N OVACEA shall deem it necessary in respect of sales of the Licensed Product to obtain a license from any Third Party in order for N OVACEA , its Affiliates or its permitted sublicensees to exercise their rights hereunder to use or sell the Licensed Product in the Cancer Field, each Party shall bear [*] percent ([*]%) of any licen