<PAGE>
EXHIBIT 10.16
*** TEXT OMITTED AND FILED SEPARATELY
PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST
UNDER 17 C.F.R. SECTION 200.80(b)(4)
AND RULE 406 UNDER THE SECURITIES
ACT OF 1933, AS AMENDED
23 JULY 2004
PATENT AND KNOW HOW LICENSE
BETWEEN
SHIRE BIOCHEM INC.
TANAUD IRELAND INC.
TANAUD INTERNATIONAL B.V.
AND
STRUCTURAL GENOMIX, INC.
----------------------------------------
PATENT AND KNOW HOW LICENSE
Relating to the development, registration and sale of
TROXATYL(R)
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<PAGE>
PATENT AND KNOW HOW LICENSE
DATE: 23
JULY 2004
PARTIES:
(1) SHIRE BIOCHEM
INC., a company incorporated in Canada, whose address is 275
boul. Armand-Frappier, Laval, QC, Canada H7V 4A7 ("SHIRE
BIOCHEM");
(2) TANAUD IRELAND
INC., a company incorporated in Ireland, whose address is
Shannon Airport House, Shannon, County Clare, Ireland ("TANAUD
IRELAND");
(3) TANAUD
INTERNATIONAL B.V., a company incorporated in the Netherlands,
whose
address is Fred Roeskestraat 123, First Floor, 1076 EE Amsterdam,
The
Netherlands ("TANAUD BV"); and
(4) STRUCTURAL
GENOMIX, INC., a company incorporated in Delaware, whose
address
is
10505 Roselle Street, San Diego, CA 92121, U.S.A. ("LICENSEE").
BACKGROUND
(A) Shire BioChem
(formerly BioChem Pharma Inc.) is a pharmaceutical company
engaged in, among other things, the research and development of
certain
pharmaceutical products including the Licensed Product (as defined
below).
(B) During the course
of its research and development of the Licensed Product,
Shire BioChem generated the Compound Patents, the Background
Patents and
the
Shire Know-How (each defined below) in connection with the
Licensed
Product.
(C) On 3 January 1996,
Shire BioChem entered into the License Agreement (as
defined below) which, among other things, granted Shire BioChem
the
exclusive right to use the University Patents (as defined
below).
(D) The Licensee is
engaged in, among other things, the research and
development of certain pharmaceutical products.
(E) The Licensee has
requested, and Shire agrees to grant, an exclusive license
to
make, have made, use, supply and sell the Licensed Product in
the
Territory (as defined below) on the terms and conditions set out in
this
Agreement.
OPERATIVE PROVISIONS
1.
INTERPRETATION
1.1 In this
Agreement:
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<PAGE>
"ACCELERATED APPROVAL" means approval for Marketing Authorisation
of
the Licensed Product in the United States of America on the basis
of an
application made to the FDA pursuant to the Code of Federal
Regulations, Title 21, Part 314 (subpart H - accelerated approval
of
new drugs for serious or life threatening illnesses) or its
equivalent
in any jurisdiction;
"AFFILIATE" means any firm, person or company which controls,
is
controlled by or is under common control with a Party to this
Agreement
and for the purpose of this definition the term "control" means
the
possession, directly or indirectly, of the power to direct or cause
the
direction of the management and policies of such firm, person
or
company, whether through the ownership of voting securities, by
contract or otherwise or the ownership either directly or
indirectly of
more than 50% of the voting securities of such firm, person or
company;
"BACKGROUND PATENTS" means the patents and patent applications
owned by
or licensed to Shire Biochem, Tanaud Ireland or Tanaud BV as set
out in
Part I of Schedule 2;
"BUSINESS
DAY" means any day other than Saturday or Sunday on which the
banks in New York are open for business;
"CANADIAN TERRITORY" means Canada;
"CHANGE OF CONTROL" means a transaction or series of related
transactions (other than an equity financing the principal purpose
of
which is to raise new capital for the Licensee or an IPO or
follow-on
public offering), that result directly or indirectly in the change
of:
(a) control of
more than half of the voting power of the issued
share capital of the Licensee; or
(b) control of
more than half of the issued share capital
(excluding any part thereof which carries no right to
participate beyond a specified amount in the distribution of
either profit or capital) of the Licensee; or
(c) control of
the power to direct or cause the direction of the
management and policies of the Licensee, by virtue of any
power conferred under the articles of association or other
documents relating to the Licensee;
"CLAIMS" shall have the meaning given in clause 14.1;
"CLINICAL PROOF OF CONCEPT" means either (a) completion of the
[...***...] patient phase II study of the Compound [...***...]
Acute
Myelogenous Leukemia (AML) patients with a complete response rate
(CR
and CRp in aggregate) [...***...] AML patients of at least
[...***...]%
with a CR rate of at least [...***...]%; or (b) continuation of
such
phase II study with additional patients or Initiation of a phase
III
study. For the purposes of this Agreement, "CR" shall have the
meaning
given to it in Journal of Clinical Oncology, Vol. 21, 2003:
4642-4649:
"Morphologic complete remission: A CR designation requires that
the
patient achieve the morphologic leukemia-free state and have an
absolute neutrophil count of more than 1,000/uL and platelets
of
100,000/uL. Hemoglobin concentration or hematocrit has no bearing
on
remission status, although the patient must be red cell and
platelet
transfusion
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<PAGE>
independent (no red cell transfusion for 2 weeks and no
platelet
transfusion for 1 week). The bone marrow would have less than 5%
blasts
and no Auer rods. There is no requirement for bone marrow
cellularity.
There should be no residual evidence of extramedullary leukemia,"
and
"CRp" means CR but with platelets of >25,000/uL and
<100,000uL;
"COMMERCIAL SALE" means any sale of the Licensed Product to a
third
party in any country in the Territory after the receipt of the
Marketing Authorization for that country;
"COMMITTEE MEMBERS" shall have the meaning given in clause 4.1;
"COMPETING PRODUCT" means any pharmaceutical product (other than
the
Licensed Product) indicated for the treatment of acute myeloid
leukemia
that is marketed or near to market (phase II clinical development
or
later) which in Shire's reasonable opinion is likely to compete
with
the Licensed Product to the detriment of the Licensed Product,
but
excluding:
(a) any
pharmaceutical product which is a kinase inhibitor owned
or licensed by the Licensee; and
(b)
pharmaceutical products with scientifically documented
evidence, demonstrating the potential for use in combination
with the Licensed Product.
"COMPOUND" means the compound troxacitabine;
"COMPOUND PATENTS" means the patents and patent applications set
out in
Part II of Schedule 2;
"CONFIDENTIAL INFORMATION" means any scientific, technical,
formulation, process, manufacturing, clinical, non-clinical,
regulatory, marketing, financial or commercial information or
data
relating to the business, projects or products of either Party
and
provided by one Party to the other by written, oral, electronic
or
other means in connection with this Agreement;
"CONSULTANCY AGREEMENT" means the consultancy agreement dated
20
February 1996 between BioChem Therapeutic Inc. and [...***...];
"DEVELOPMENT COMMITTEE" means the committee set up by the Parties
in
accordance with clause 4.1;
"DEVELOPMENT DATA" means any data, charts, studies, summaries,
analyses, reports, know-how and other information created,
generated or
discovered in connection with the Development Plan or any other
pre-clinical or clinical trials or studies of the Licensed
Product
conducted by or on behalf of the Licensee;
"DEVELOPMENT PLAN" means the plan for the development of the
Licensed
Product by the Licensee as set out in Schedule 1 including the
anticipated Timelines and development budget for the phase II study
of
the Licensed Product;
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***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
"EFFECTIVE DATE" means the date of this Agreement;
"EXCLUDED PATENTS" means the patents and patent applications
identified
in Schedule 9 which are excluded from the license granted to
the
Licensee under this Agreement;
"FDA" means the United States Food and Drug Administration and
any
successor thereto;
"FIELD" means all pharmaceutical uses of the Licensed Product
except
that in relation to the University Patents and University
Technology,
"Field" means the treatment of cancer only;
"FORCE MAJEURE" means in relation to either Party any
circumstances
beyond the reasonable control of that Party;
"GENERIC PRODUCT" means any pharmaceutical product that is
recognized
by a Regulatory Authority in a particular country in the Territory
as
"AA or AB" rated (or the equivalent rating in any jurisdiction)
against
the Licensed Product or is substitutable at the pharmacy by a
pharmacist for a prescription written for the Licensed Product;
"IMPROVEMENT" means any and all discoveries, developments,
inventions,
enhancements or modifications, patentable or otherwise,
specifically
relating to the Licensed Product and for use in the Field
created,
generated or discovered by or on behalf of either Party or its
Affiliates during the term of this Agreement, but excluding the
Development Data and any regulatory material generated in
connection
with an application for Marketing Authorization;
"INTELLECTUAL PROPERTY RIGHTS" means patents, trade marks,
service
marks, logos, trade names, rights in designs, copyright,
utility
models, rights in know-how and other intellectual property rights,
in
each case whether registered or unregistered and including
applications
for registration, and all rights or forms of protection having
equivalent or similar effect anywhere in the world;
"INITIATION" means the date of first dosing of the first patient in
the
relevant clinical study;
"IPO" means an initial public offering of the Licensee's equity
securities for admission to listing or trading on a recognized
securities exchange or listing or trading on a recognized
securities
market;
"LAUNCH" means the commencement of Commercial Sale of the
Licensed
Product in any country of the Territory;
"LICENSE AGREEMENT" means the license agreement dated 3 January
1996
between the University of Georgia Research Foundation Inc.,
Yale
University, Shire BioChem Inc. (formerly BioChem Pharma Inc.),
Tanaud
Holdings (Barbados) Limited and Tanaud LLC, as amended from time
to
time;
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<PAGE>
"LICENSED PRODUCT" means any pharmaceutical formulations that
contain
the Compound alone as a therapeutically active ingredient, or
in
combination with any other pharmaceutically active ingredient;
"MARKETING AUTHORIZATION" means the grant of all necessary
permits,
authorizations, licenses, approvals (including pricing and
reimbursement approvals, if applicable) or waivers from any
relevant
Regulatory Authority required for the research, development,
manufacture, marketing, storage, import, export, transport, use or
sale
of the Licensed Product in any country of the Territory;
"MARKETING PLAN" means the marketing plan for the Launch, marketing
and
commercialization of the Licensed Product in each country of
the
Territory prepared in accordance with clause 6.2;
"MEMORANDUM OF UNDERSTANDING" means a memorandum of
understanding
between the University and the Licensee substantially in the form
of
Schedule 7;
"MINIMUM SALES FORECASTS" means [...***...]% of the
[...***...];
[...***...]% of the [...***...]; [...***...]% of the [...***...];
and
[...***...]% of the [...***...];
"MILESTONE EVENT" means the event identified in Schedule 3
which
triggers a payment under clause 7.2;
"MILESTONE PAYMENT" means the payment by the Licensee to Shire of
the
sums identified in Schedule 3 on the occurrence of a Milestone
Event;
"MILESTONE PAYMENT TERMS" means the payment of any Milestone
Payment or
other applicable payment under clause 7, to Shire as follows:
[...***...]% of such payment to Tanaud Ireland; [...***...]% of
such
payment to Tanaud BV; and [...***...]% of such payment to Shire
BioChem;
"NDA" means a new drug application and all supplements filed with
the
FDA, including all documents, data and other information concerning
the
Licensed Product which are necessary for, or included in, a
Marketing
Authorization to use, sell, supply or market the Licensed Product
in
the United States of America;
"NET SALES" means the gross amount invoiced by the Licensee,
its
Affiliates or Sub-Licensees to third parties in respect of sales of
the
Licensed Product, less:
(a) trade,
quantity and cash discounts or rebates actually allowed
and taken, provided that such discounts or rebates are not
applied disproportionately to the Licensed Product as compared
with similar products of the selling entity, including those
granted for rejected, damaged and recalled goods;
(b) freight,
shipping and related insurance charges, provided that
such charges are no more than 1% of Net Sales;
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***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
(c) tax,
tariff or customs duties or other government duties
(other than income tax) levied on the sale, transportation or
delivery of the Licensed Product; and
(d) credits,
rebates, charge backs or similar payments granted or
given to wholesalers or other third party distributors, health
care insurance carriers, pharmacy benefit management companies
or health care organizations.
For the avoidance of doubt, sales or other transfers between
the Licensee and its Affiliates or its Sub-Licensees are not sales
to
third parties, but Net Sales shall include any subsequent sales of
the
Licensed
Product by such Affiliates or Sub-Licensees to any third
parties. Where the Licensed Product is sold otherwise than on an
arms
length basis, the amount that would have been charged in an arms
length
sale shall be deemed to be the invoice price for such Licensed
Product
and where the Licensed Product is disposed of for consideration
other
than cash, such consideration shall be valued at the fair market
value.
"OTHER TERRITORIES" means throughout the world, except for the
Canadian
Territory and the US Territory;
"PARTY" AND "PARTIES" means respectively Shire or the Licensee, or
as
the case may be, both such parties;
"PREMIUM ON EQUITY" means in relation to the acquisition by any
third
party of any equity (or any form of security convertible into
equity)
in the Licensee or its Affiliates in connection with any
Sub-License
Agreement, the excess of actual purchase price paid for such
equity
over the fair market value of such equity. For clarity, if the
fair
market value of the equity is $8.00 and the amount paid by the
third
party is $10.00, the Premium on Equity is $2.00. Any dispute over
the
fair market value of the Licensee's stock shall be resolved through
the
dispute resolution procedure set out in clause 24.2;
"PRINCIPAL MARKETS" means the United States of America, Canada,
Japan,
the United Kingdom, Germany, France, Italy and Spain;
"QUARTER" means a three month period ending on the last day of
March,
June, September or December in any calendar year;
"REASONABLE COMMERCIAL EFFORTS" means commercial efforts
consistent
with normal business practices and effort used by the Licensee
in
connection with other products of similar market size or
importance
which the Licensee intends to launch or has launched and sold in
the
Territory, or in the absence of any such similar products then
such
effort shall be assessed by reference to good business practice in
the
light of all the circumstances;
"REGULATORY AUTHORITY" means any competent government agency,
regulatory authority or other administrative body responsible
for
granting Marketing Authorization in a particular country or
multinational group of countries in the Territory, including the
FDA;
"REMEDIES" shall have the meaning given in clause 12.2;
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<PAGE>
"SALES FORECASTS" means the sales of the Licensed Product
anticipated
by the Licensee for a 4 year period from Launch of the Licensed
Product
in the US Territory as set out in Schedule 4;
"SEC" means the Securities Exchange Commission in the United States
of
America and any successor thereto;
"SHIRE" means Shire BioChem, Tanaud Ireland or Tanaud BV or
collectively Shire BioChem, Tanaud Ireland and Tanaud BV as the
case
may be;
"SHIRE INTELLECTUAL PROPERTY" means the Shire Patents, the
University
Patents, University Technology and the Shire Know-How;
"SHIRE KNOW-HOW" means all information, procedures,
instructions,
techniques, data, technical information (including
toxicological,
pharmaceutical, non-clinical, clinical and medical data, health
registration data and marketing data), processing
specifications,
pricing studies and market evaluation materials owned by Shire or
its
Affiliates (other than Shire Laboratories Inc.) and reasonably
necessary for the development, or in the case of pricing and
market
evaluation materials, for commercialization, of the Licensed
Product in
the Territory;
"SHIRE MATERIALS" means the Compound and other materials identified
in
Schedule 5;
"SHIRE PATENTS" means the Compound Patents and Background Patents
and
including, in each case, any divisionals, extensions, reissues,
substitutions, renewals, continuations, continuations-in-part,
provisionals, re-examinations and foreign counterparts thereof
(including European supplementary protection certificates) and
patents
issuing thereon;
"SUB-LICENSEE" means any non-Affiliate third party sub-licensee of
the
rights (or any part of the rights) granted to the Licensee under
this
Agreement;
"SUB-LICENSE AGREEMENT" means any agreement between the Licensee
and
the Sub-Licensee granting the right or license under the Shire
Intellectual Property (or any part of it) to develop, manufacture,
have
manufactured, use, sell, offer for sale, import or supply the
Licensed
Product;
"SUB-LICENSE INCOME" means any consideration in any form received
by
the Licensee or its Affiliates in connection with a Sub-License
Agreement, but excluding royalties on Net Sales and amounts
received
under arms length non-convertible debt instruments negotiated
on
standard commercial terms, including (a) upfront fees,
milestone
payments, license maintenance fees, distribution or joint
marketing
fees, development funding (in excess of the Licensee's cost of
performing such development), and any investment in the Licensee,
and
(b) exchange products, cross-licensed products, options,
marketing
rights and such other forms of non-cash consideration that may
be
deemed to have value;
"SUB-LICENSEE MOU" means a memorandum of understanding between
Shire
and a Sub-Licensee substantially in the form of Schedule 7;
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<PAGE>
"TERRITORY" means the Canadian Territory, the US Territory and the
Other
Territories;
"THIRD PARTY ACTION" shall have the meaning given in clause
13.1;
"TIMELINES" means the timelines for the research, development,
registration and
Launch of the Licensed Product as set out in the
Development Plan;
"TRADE MARKS" means the trade marks and applications for trade
marks set
out
in Schedule 6;
"UNIVERSITY" means each of the University of Georgia Research
Foundation
Inc.
and Yale University;
"UNIVERSITY PATENTS" means the patents and patent applications set
out in
Part
III of Schedule 2 and including, any divisionals, extensions,
reissues, re-examinations, continuations, and foreign
counterparts
thereof and patents issuing thereon;
"UNIVERSITY TECHNOLOGY" means the "Licensed Technology" as defined
in the
License Agreement; and
"US
TERRITORY" means the United States of America and its territories
and
possessions.
1.2 In
this Agreement, unless the context requires otherwise:
(a)
the
headings are included for convenience only and shall not
affect its construction;
(b)
references
to "persons" includes individuals, bodies corporate
(wherever incorporated), unincorporated associations and
partnerships;
(c)
words
denoting the singular shall include the plural and vice
versa;
(d)
references
to the word "including" are to be construed without
limitation;
(e)
words
denoting one gender shall include each gender and all
genders; and
(f)
any
reference to an enactment or statutory provision is a
reference to it as it may have been, or may from time to time
be
amended, modified, consolidated or re-enacted.
1.3 The
Schedules comprise part of and shall be construed in accordance
with
the
terms of this Agreement. In the event of any inconsistency
between
the
Schedules and the terms of this Agreement, the terms of this
Agreement shall prevail.
2.
GRANT OF LICENSE
2.1
Subject to the terms of this Agreement, Shire hereby grants the
Licensee:
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<PAGE>
(a)
an
exclusive license under the Shire Patents and Shire Know-How to
develop, manufacture, have manufactured, use, sell, offer for
sale, import and supply the Licensed Product in the Territory
and
in the Field; and
(b)
an
exclusive sub-license under the University Patents and
University Technology to develop, manufacture, have
manufactured,
use, sell, offer for sale, import and supply the Licensed
Product
in the Territory and in the Field.
2.2 Except
to the extent necessary to enable Shire to perform its
obligations
under this Agreement and subject to the terms of the License
Agreement
(and
in particular the University's rights under Articles 2.2 and 2.4
of
the
License Agreement) the term "exclusive" for the purposes of
clause
2.1,
means to the exclusion of all others, including Shire and its
Affiliates.
2.3 This
Agreement and the grant of any license pursuant to clauses 2.1
and
10.1
shall in all respects be conditional upon the Licensee
receiving
US$12 million in cash from its investors and providing
documentary
evidence, to Shire's reasonable satisfaction, of receipt of such
sum by
no
later than September 30, 2004. If such condition subsequent is
not
fulfilled (or waived) on or before September 30, 2004, this
Agreement
shall automatically terminate, Shire shall be entitled to retain
any
upfront payment received and neither party shall have a claim of
any
nature whatsoever against the other party under this Agreement
(except in
respect of any rights or liabilities of the parties which have
accrued
prior to
termination).
2.4 The
Licensee undertakes to:
(a)
use all
reasonable efforts to ensure that the condition subsequent
in clause 2.3 is fulfilled as soon as reasonably practicable
and
in any event by September 30, 2004; and
(b)
keep Shire
informed of the progress towards satisfaction of such
condition precedent and in particular promptly disclose in
writing
to Shire anything which will or may prevent the condition
subsequent from being satisfied.
3.
SUB-LICENSING
3.1 The
Licensee shall have the right to sub-license the rights granted
under
this
Agreement to its Affiliates or any third party, provided that:
(a)
the
Licensee provides Shire the opportunity to review the
Sub-License Agreement (which, subject to the disclosure to the
University to the extent required under the License Agreement
and
subject to the Universities' confidentiality obligations
thereunder, Shire shall treat as Confidential Information of
the
Licensee) prior to its execution and considers in good faith
any
reasonable amendments to the Sub-License Agreement requested by
Shire and
subject to clause 3.1A, shall obtain the University's
prior consent (such consent not be unreasonably withheld or
delayed);
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(b)
any
Sub-License Agreement shall be in writing and, with the
exception of the financial terms, be consistent with the terms
of
this Agreement (except that the Sub-Licensee shall not have the
right to sub-license, unless Shire and the University have
consented to such right, which consent, if requested by the
Licensee, shall not be unreasonably withheld or delayed); and
(c)
the
Licensee shall remain responsible to Shire with respect to all
the operations of its
Sub-Licensee relevant to the use Licensed
Product under this Agreement as if such operations were carried
out by the Licensee, including the provision of Reasonable
Commercial Efforts in the development, manufacture,
registration
and Launch of the Licensed Product, the making of any payments
under this Agreement, the provision of indemnities, the
provision
of insurance and compliance with applicable law.
3.1A The
Licensee may enter into a Sublicense Agreement without the
prior
consent of the University if:
(a)
the
relevant territory of the Sub-License Agreement is outside the
Principal Markets; or
(b)
the
relevant territory of the Sub-License Agreement is within the
Principal Markets, provided that, the Sub-Licensee, at the time
of
grant:
(i) is
listed on a recognized securities exchange and has
market
capitalization of not less than U.S.$ [...***...]
million, or is a private company with cash of not less than
U.S.$ [...***...] million; and
(ii) has a
current marketing authorization for at least one
other regulatory-approved pharmaceutical oncology product
in any country in the Principal Markets prior to the date
of the Sub-License Agreement.
3.2 Shire
shall use reasonable endeavours to procure that the University
signs a Memorandum of Understanding, and shall provide the same to
the
Licensee on the Effective Date for countersignature by the
Licensee. Upon
request by the Licensee, Shire shall consent (which consent shall
not be
unreasonably withheld or delayed) to signing a Sub-Licensee MOU,
provided
that, the reason for the termination of this Agreement does not
relate in
any
way to any act or omission of the Sub-Licensee, its Affiliates,
representatives or sub-licensees.
3.3 In the
event that the Licensee enters a Sub-License Agreement pursuant
to
clause 3.1, the Licensee shall promptly after execution of such
Sub-License Agreement, provide Shire with a copy of the final form
of the
Sub-License Agreement, which Shire shall treat as Confidential
Information of Licensee.
3.4 The
Licensee shall not, and shall procure that its Affiliates and
Sub-Licensees shall not:
(a)
utilize
any part of the Shire Intellectual Property in the making
of any patent application, except as otherwise agreed in
writing
by the Parties pursuant to the terms of this Agreement; or
11 ***CONFIDENTIAL TREATMENT
REQUESTED
<PAGE>
(b)
manufacture, supply, market or sell, or knowingly assist any
third party to manufacture, supply, market or sell any
Competing Product anywhere in the Territory; unless in the
event of a Change of Control of Licensee, the new controlling
party has a Competing Product and Shire does not terminate the
Agreement pursuant to clause 19.2(c), in which event, this
sub-clause 3.3(b) shall not apply.
3.5 Shire
agrees not to terminate the License Agreement without the prior
written consent of the Licensee (which consent shall not be
unreasonably
withheld or delayed). Shire further agrees that within 5 Business
Days
after a request from Licensee, Shire shall provide the University
with
the
written notice under clause 2.2(a) of the Memorandum of
Understanding, provided that the reason for the termination of
the
License
Agreement by the University does not relate in any way to any
act
or
omission of the Licensee, its Affiliates, representatives or
Sub-Licensees.
4.
THE DEVELOPMENT COMMITTEE
4.1 The
Parties shall establish a Development Committee consisting of 4
individuals ("COMMITTEE MEMBERS"); 2 of whom shall be nominated by
Shire;
and
2 of whom shall be nominated by the Licensee. Either Party may
replace its Committee Members by notice to the other Party. The
Committee
Members shall be appropriately qualified and experienced in order
to make
a
meaningful contribution to Development Committee meetings.
4.2 The
purpose of the Development Committee is to provide a forum for
the
Parties to share information and knowledge on the on-going
research,
development and commercialisation of the Licensed Product
including
monitoring the progress of non-clinical and clinical studies,
reviewing
clinical trial programmes, considering proposed regulatory
filings,
Launch plans, marketing and promotional plans, reviewing
competitor
activity and discussing any regulatory, technical, quality
assurance or
safety issues in relation to the Licensed Product. The
Development
Committee
shall conduct its discussions in good faith with a view to
operating to the mutual benefit of the Parties and in furtherance
of the
successful development and commercialisation of the Licensed
Product.
4.3 The
Development Committee shall meet as often as the Committee
Members
may
determine, but in any event not less than once per calendar year.
The
Committee Members may invite individuals with special skills to
attend
such
meetings where it is considered to be relevant and appropriate.
The
quorum for Development Committee meetings shall be 2 Committee
Members,
comprising 1 Committee Member from each Party.
5.
DEVELOPMENT AND MARKETING AUTHORIZATIONS
5.1 Shire
shall use reasonable efforts within 90 days from the Effective
Date:
(a)
to deliver
to the Licensee (or its nominee) the Shire Know-How to
the extent that it is reasonably necessary for the research and
development of the Licensed Product by the Licensee in
accordance
with the Development Plan, the University Technology under
Shire's
possession or control;
(b)
to deliver
to the Licensee (or its nominee) the Shire Materials;
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<PAGE>
(c)
transfer
the investigational new drug application (filed with the
FDA) relating to the development and use of Licensed Product to
the Licensee; and
(d)
transfer
its rights and obligations to the Licensee under the
clinical research services agreements relating to the phase I
clinical studies ([...***...] and [...***...]) of the Licensed
Product between Shire Pharmaceutical Development Inc. and
Quintiles Inc. From the Effective Date, the Licensee shall bear
the cost of and risk in such phase I studies.
5.2 For a
period of 3 months following the Effective Date, Shire shall
provide the Licensee with a reasonable amount of access during
normal
business hours to [...***...], and [...***...], as is
reasonably
necessary to teach the Shire Know-How to the Licensee, provided
that, the
personnel remain employed or engaged by Shire and such access is
limited
to
no more than an aggregate of 25 person working days and no more
than 2
working days in any working week. Shire shall not terminate the
employment or engagement of any of the above personnel for 3
months
following the
Effective Date. Shire shall promptly inform the Licensee
if,
during such period, any of the relevant personnel cease to work
for
Shire. In the event that the Licensee requires additional access to
Shire
personnel, the Parties shall in good faith negotiate the cost to
the
Licensee of such access.
5.3 The
Licensee shall:
(a)
at
[...***...], use its Reasonable Commercial Efforts to perform,
or procure the performance of, the activities and services in
the
Development Plan;
(b)
perform,
or procure the performance of, any such activities and
services with reasonable care and skill and ensure that
personnel
employed or engaged by it in the provision of any such
activities
and services are competent and have appropriate professional
qualifications, training and experience;
(c)
complete
the Development Plan as expeditiously as reasonably
possible using its Reasonable Commercial Efforts to meet and
comply with the Timelines; and
(d)
update
Shire at regular intervals, to be agreed between the
Parties, on the progress of the Development Plan and submit a
written report to Shire and the University every [...***...] as
soon as reasonably practicable after [...***...] of each year
and
in any event by [...***...] respectively, detailing its
progress
of the research, development, registration and
commercialisation
of the Licensed Product and the amount of direct expenditures
associated with the development of the Licensed Product for the
previous [...***...] months.
5.4 Upon
completion of the Development Plan, the Licensee shall, at
[...***...], use, or cause its Affiliates and Sub-Licensees to
use,
Reasonable Commercial Efforts to prepare, file, prosecute and
maintain
all
applications for Marketing Authorization and any other
necessary
licenses, permits, authorizations and approvals (or waivers)
required by
any
Regulatory Authority for the Launch, use, promotion, import,
sale,
distribution or commercialisation of the Licensed Product in
the
Principal Markets. The Licensee shall file its application for
13 ***CONFIDENTIAL
TREATMENT REQUESTED
<PAGE>
NDA
in the United States of America no later than [...***...]
following
completion of the Development Plan with respect to that
country.
6.
LAUNCH AND MARKETING EFFORTS
6.1 The
Licensee shall, at [...***...] use its Reasonable Commercial
Efforts,
or
procure that its Affiliates or Sub-Licensees use their
Reasonable
Commercial Efforts, to:
(a)
Launch the
Licensed Product in the Principal Markets as soon as
reasonably practicable following receipt of Marketing
Authorization in the relevant country and in any event Launch
the
Licensed Product no later than [...***...] following receipt of
Marketing Authorization in such country; and
(b)
research,
develop, manufacture, distribute and sell, or cause its
Affiliates or Sub-Licensees (except for third party contract
research organisations or pharmaceutical manufacturers) to
research, develop, manufacture, distribute and sell the
Licensed
Product in the Principal Markets.
6.2 The
Licensee shall, within [...***...] from filing the NDA for the
Licensed Product, provide the Development Committee with its
Marketing
Plan
setting out its strategy for the Launch of the Licensed Product
including revised Sales Forecasts (if applicable), anticipated
pricing
levels and reimbursement levels, if appropriate, and marketing
and
promotion plans and spend, in relation to the Licensed Product for
the
calendar year following approval of the NDA. Thereafter, and on or
before
31
October of each calendar year, the Licensee shall provide the
Development Committee with its Marketing Plan for the next calendar
year.
Each
Marketing Plan shall include net sales targets, projections
with
respect to sales force staffing levels, marketing research
strategies,
marketing and promotion plans, physician education plans and
general
advertising and related budgets for sales of the Licensed Product
in the
relevant calendar year.
6.3
Licensee shall:
(a)
perform,
or procure the performance of, the activities set out in
the Marketing Plan;
(b)
use
Reasonable Commercial Efforts to meet the Sales Forecasts; and
(c)
on
reasonable request from Shire, provide it with copies of the
packaging, packaging inserts and any advertising or promotional
materials (including translations, if necessary) used in
connection with the sale of the Licensed Product in the
Territory.
6.4 The
Licensee acknowledges that the Sales Forecasts are its good
faith
estimates of sales of the Licensed Product in the Territory based
on
information available to the Licensee at the Effective Date.
6.5 The Licensee may, on
submitting the first Marketing Plan and subject to
the
terms of this Agreement, revise the Sales Forecasts. Any reduction
in
the
Sales Forecasts must be based on the following:
14 ***CONFIDENTIAL TREATMENT
REQUESTED
<PAGE>
(a)
an
unexpected and materially adverse change in the market for the
Licensed Product in the Territory;
(b)
unexpected
clinical data generated from the Development Plan or an
unexpected pricing decision from a Regulatory Authority which,
in
each case, has an adverse effect on the anticipated sales of
the
Licensed Product; or
(c)
advice
from a Regulatory Authority which specifies restrictions to
the use of the Licensed Product that reduces the anticipated
market for the Licensed Product in the Territory.
6.6
Notwithstanding anything contained in clause 6.5, any such
reduction in
the
Sales Forecast in the first Marketing Plan must:
(a)
be
supported by a written report explaining, to Shire's reasonable
satisfaction, the reasons for such reduction;
(b)
not be due
to reasons which could have reasonably been foreseen by
the Licensee at the Effective Date and shall not, in any event,
be
less than the [...***...] identified at the Effective Date; and
(c)
be more
than [...***...]% of the initial Sales Forecast before the
Licensee shall be entitled to seek such a reduction.
6.7 In the
event that the Licensee fails to meet a Minimum Sales Forecasts
in
any
calendar year, the Licensee shall pay Shire, within 30 days from
the
end
of the relevant calendar year, an additional payment
representing
[...***...] that [...***...] on the [...***...] the [...***...] for
the
[...***...] and the [...***...].
7.
ROYALTY AND MILESTONE PAYMENTS
7.1 In
consideration of the rights granted under this Agreement, the
Licensee
shall pay Shire (or its nominee) the non-creditable and
non-refundable
sum
of US$3 million within 3 Business Days from the Effective Date
and
the
non-creditable and non-refundable sum of US$1 million within 5
Business Days of the first anniversary of the Effective Date,
in
accordance with the Milestone Payment Terms.
7.2 Upon
the occurrence of each Milestone Event, the corresponding
non-refundable Milestone Payment shall be made by the Licensee to
Shire
in
accordance with the Milestone Payment Terms. For the avoidance
of
doubt, each Milestone Payment shall be made no more than once
with
respect to the achievement of a Milestone Event, but shall be
payable the
first time the Milestone Event is achieved. [...***...]% of any
development Milestone Payments (but not sales Milestone Payments)
shall
be
creditable against royalties due to Shire under sub-clauses
7.3(a),
7.3(b), 7.3(c), 7.3(d) (but not royalties under sub-clause 7.3(e)),
and
if
applicable, sub-clauses 7.4(a), 7.4(b), 7.4(c), 7.4(d) (but not
royalties under sub-clause 7.4(e)), provided that, in no event will
the
credit for such development Milestone Payments reduce the
royalties
payable to Shire in any Quarter by more than [...***...]%. Any
amount
that
has not been so credited
15
***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
may
be credited against royalties due in subsequent Quarters, subject
to
the
limitation described in the previous sentence. For the avoidance
of
doubt, upon expiry or termination of this Agreement, Shire shall
not be
liable to the Licensee for any credit amount accrued and not
credited.
7.3
Subject to clauses 7.4, 7.7(b) and 8.2, during the term of this
Agreement, the Licensee shall pay Shire:
(a)
a royalty
of [...***...]% of the first US$[...***...] of Net Sales
of the Licensed Product in the Territory in any calendar year;
(b)
a royalty
of [...***...]% of any Net Sales in excess of
US$[...***...] and up to US$[...***...] in the Territory in any
calendar year;
(c)
a royalty
of [...***...]% of any Net Sales in excess of
US$[...***...] and up to US$[...***...] in the Territory in any
calendar year;
(d)
a royalty
of [...***...]% of any Net Sales in excess of
US$[...***...] in the Territory in any calendar year; and
(e)
any
royalties or other payments to be made by Shire or its
Affiliates under the License Agreement or the Consultancy
Agreement, incurred after the Effective Date, other than
payments
under Articles 4.5 and 4.6 of the License Agreement.
[...***...]%
of any payments made by the Licensee for milestone payments
properly paid by the Licensee under Article 4.2(c) of the
License
Agreement shall be creditable against royalties in accordance
with
clause 7.2 above.
7.4 At any
time during calendar year [...***...], Licensee shall have the
right to pay to Shire the non-creditable and non-refundable sum
of
US$[...***...] in accordance with the Milestone Payment Terms and
in such
event, Licensee shall have no obligation to make any payments to
Shire
under clause 7.3, but instead shall pay Shire the following:
(a)
a royalty
of [...***...]% of the first US$[...***...] of Net Sales
of the Licensed Product in the Territory in any calendar year;
(b)
a royalty
of [...***...]% of any Net Sales in excess of
US$[...***...] and up to US$[...***...] in the Territory in any
calendar year;
(c)
a royalty
of [...***...]% of any Net Sales in excess of
US$[...***...] and up to US$[...***...] in the Territory in any
calendar year;
(d)
a royalty
of [...***...]% of any Net Sales in excess of
US$[...***...] in the Territory in any calendar year; and
(e)
any
royalties or other payments to be made by Shire or its
Affiliates under the License Agreement or the Consultancy
Agreement, incurred after the Effective Date, other than
payments
under Articles 4.5 and 4.6 of the License Agreement.
16
***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
7.5 In the event that the
Licensee supplies a Licensed Product to any
customer as part of a package or combination of products, then the
Net
Sales of the Licensed Product shall be whichever is the higher
of:
(a)
the fair
market value of such Licensed Product when sold by
itself; or
(b)
the
proportion of the selling price of such package of products
which is reasonably attributable to the Licensed Product.
7.6 For
the purposes of clause 7.5, fair market value means the value
of
Licensed Product sold to similar customers in the Territory with
similar
pricing and reimbursement structures and for similar quantities.
Any
dispute as to the determination of fair market value or proportion
of the
selling price of a package of products attributable to the
Licensed
Product shall be resolved through the dispute resolution procedure
set
out
in clause 24.2.
7.7
Subject to clauses 7.9 and 8.2, in the event that Licensee or
its
Affiliates enters into a Sub-License Agreement in any Territory,
then
Licensee shall pay to Shire in addition to the Milestone
Payments:
(a)
subject to
clause 7.10, [...***...]% of any Sub-License Income;
and
(b)
in lieu of
royalties under clauses 7.3 or 7.4 applicable to Net
Sales by such Sub-Licensee in its particular territory, the
greater of:
(i)
[...***...]% of any royalty payments received by Licensee
or its Affiliates from the Sub-Licensee or its Affiliates
for sales of Licensed Products by or on behalf of the
Sub-Licensee; or
(ii)
[...***...]% of Net Sales by the Sub-Licensee and its
Affiliates.
7.8 In the
event that Sub-License Income corresponds to a Milestone
Payment
under this Agreement which has not already been paid by the
Licensee and
such
Sub-License Income is greater than the respective Milestone
Payment,
the
Licensee shall pay Shire on the occurrence of the Milestone Event
the
full
Milestone Payment plus [...***...]% of the difference between
the
Sub-License Income and the relevant Milestone Payment.
7.9 In
addition to any payments made by the Licensee under clause 7.7,
the
Licensee shall pay any royalties or other payments to be made by
Shire or
its
Affiliates under the License Agreement and the Consultancy
Agreement,
incurred
after the Effective Date, other than payments under Articles
4.5
and
4.6 of the License Agreement.
7.10 In the
event that the Licensee or its Affiliates receives any
Sub-License
Income by way of cash consideration in relation to the acquisition
of
equity (or any form of security convertible into equity) in the
Licensee
or
its Affiliates or non-cash consideration upon which payment would
be
due
to Shire under clause 7.7, the Licensee shall pay Shire:
(a)
in
relation to the acquisition of equity (or any form of security
convertible into equity) in the Licensee or its Affiliates the
greater of:
17
***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
(i)
[...***...]% of the Premium on Equity; or
(ii)
[...***...]% of the total amount received or to be received
by the Licensee or its Affiliates; or
(b)
in
relation to the payment of non-cash consideration, [...***...]%
of the fair market cash value of such non-cash consideration at
the date of receipt of the non-cash consideration by the
Licensee
or its Affiliate.
8.
PAYMENT TERMS
8.1 Unless
otherwise expressly stated, payments due under this Agreement
shall be made by the Licensee to Shire (or its nominee) as
follows:
(a)
in respect
of any development Milestone Payments, within
[...***...] days from identification of the occurrence of the
development Milestone Event by the Licensee;
(b)
in respect
of any sales Milestone Payments, within [...***...]
days from the end of the Quarter in which the relevant
Milestone
Event occurred;
(c)
in respect
of Net Sales royalty payments during any Quarter,
within [...***...] days from the end of that Quarter;
(d)
in respect
of any payments under clause 7.7, within [...***...]
days from receipt of the Sub-Licensing Income by the Licensee
or
its Affiliates from the Sub-Licensee, or in relation to
royalties
on Net Sales within [...***...] days from the end of the
relevant
Quarter; and
(e)
in respect
of any payments to be made under the License Agreement
during any Quarter, within [...***...] days from the end of the
Quarter.
8.2 The
payment of all Net Sales royalty revenue from the Licensee, its
Affiliates or its Sub-Licensees, to Shire shall:
(a)
in respect
of sales of the Licensed Product in the US Territory,
be paid to Tanaud Ireland;
(b)
in respect
of sales of the Licensed Product in the Canadian
Territory, be paid to Shire BioChem; and
(c)
in respect
of sales of the Licensed Product in the Other
Territories, be paid to Tanaud BV.
8.3 All
payment sums due under this Agreement to Shire shall be paid in
US
dollars. Net Sales shall be determined in the currency in which
the
Licensed Product was sold and shall be converted into US dollars
using
the spot rate on the last day of the relevant Quarter as
18
***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
published by the Wall Street Journal for the relevant Quarter for
which
such
payment is being determined.
8.4 At the
same time as payment of any Net Sales royalty falls due, the
Licensee shall submit to Shire a statement in writing recording
the
calculation of the amounts payable and including:
(a)
the number
of Licensed Products which have been supplied in each
country of the Territory during the previous Quarter;
(b)
the Net
Sales generated in each country of the Territory during
the previous Quarter; and
(c)
the amount
of royalties due and payable to Shire in relation to
sales of the Licensed Product in the US Territory, the Canadian
Territory, the Other Territories, and the Territory as a whole
(including where appropriate the exchange rate used).
8.5
Interest shall be payable by the Licensee on any amounts payable to
Shire
under this Agreement which are not paid by the due date for
payment. All
interest shall accrue and be calculated on a daily basis (both
before and
after any judgment) at the rate of [...***...]% per annum above the
base
rate
of Barclays Bank plc from time to time, for the period from the
due
date
for payment until the date of actual payment.
8.6
Notwithstanding any other provision of this Agreement, if at any
time
legal restrictions prevent the prompt remittance of part or all of
the
payments required hereunder in any country, payment shall be made
through
such
lawful means as Shire may determine.
8.7 Any
tax that the Licensee, its Affiliates or Sub-Licensees are
required
to
withhold to comply with relevant laws with respect to the
royalties
and
other payments due under this Agreement, shall be deducted from
said
payments prior to remittance; provided, however, that in regard to
any
tax
so deducted, the Licensee shall give or cause to be given to
Shire
such
assistance, including documentary evidence, as may reasonably
be
necessary to enable Shire to claim exemption therefrom or
credit
therefor, and in each case, the Licensee shall furnish to Shire
proper
evidence of the taxes paid on its behalf. Unless otherwise
expressly
stated, all sums due under this Agreement shall be paid without
deduction, set-off or counterclaim.
8.8 The
obligation of the Licensee to pay royalties and any other
payments
due
under this Agreement, shall continue on a country-by-country
basis
for
the term of this Agreement. Subject to clause 8.9, in the event
that
there are no issued Shire Patents or University Patents covering
the use
of
the Licensed Product in a country in the Territory, the royalty
payments due to Shire (but not those due to the University under
the
License Agreement) for Net Sales in such country shall be reduced
by
[...***...]%, provided that:
(a)
one or
more Generic Products have been granted marketing
authorization and are being sold in such country; and
18
***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
(b)
IMS data
demonstrates that the market share for the Licensed
Product in such country has been reduced by [...***...]% or
more
in any two consecutive Quarters following the launch of the
Generic Product in such country.
8.9 In the
event that after the grant of marketing authorization of the
Generic Product any Shire Patent or University Patent application
is
issued, and such patent is able to prevent the sale of the
Generic
Product in the
relevant country the royalty payments due to Shire for Net
Sales in such country shall return to the royalty rates set out in
clause
7.3
or 7.4 as applicable.
9.
RECORDS AND REPORTS
9.1 During
the term of this Agreement, and for a period of [...***...]
years
after its expiry or termination, the Licensee shall, and shall
procure
that
its Affiliates and Sub-Licensees shall, keep at its or their
normal
place of business detailed, accurate and up to date records and
books of
account showing the sales of the Licensed Product in each country
in the
Territory sufficient to ascertain:
(c)
any Net
Sales generated in connection with the sale of the
Licensed Product and royalties payable to Shire under this
Agreement; and
(d)
the
achievement or progress towards achievement of any Milestone
Event, provided that, in the event that the Milestone Event
relates to the development of the Licensed Product, the
Licensee
has failed to meet the Timelines and, in Shire's reasonable
opinion, the Licensee has failed to adequately explain the
reasons
for the delay.
9.2 On no
less than [...***...] Business Days notice from Shire, the
Licensee
shall make, or procure that its Affiliates or Sub-Licensees make,
such
records and books of account available for inspection by Shire (or
its
nominee) for the purpose of audit to confirm payments due under
this
Agreement, but not more than [...***...] in any calendar year in
relation
to
royalties payable to Shire under this Agreement and not more
than
[...***...] in any calendar year in relation to the achievement of
any
Milestone Event. Shire (or its nominee) shall be entitled to take
copies
or
extracts from such records or books of account during any such
review
or
audit.
9.3 Shire
shall be solely responsible for its costs and expenses in
making
any
such review or audit, unless Shire identifies a discrepancy in
the
sums
paid in any calendar year from those payable under this
Agreement
for
that calendar year of greater than [...***...]%, in which event
the
Licensee shall pay Shire's costs and expenses incurred in
connection with
the
review or audit, and make good the deficit in the payments
(including
any
interest amount calculated in accordance with clause 8.5).
9.4 All
information disclosed by the Licensee, its Affiliates or its
Sub-Licensees pursuant to this clause 9 shall be deemed
Confidential
Information of Licensee, its Affiliates or its Sub-Licensees,
as
applicable.
20
***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
10. TRADE
MARKS
10.1
Shire hereby grants the Licensee an exclusive license, with the
right
to sublicense, to use the Trade Marks in relation to the sale,
promotion and marketing of the Licensed Product in the Territory
for
the term of this Agreement. The Licensee shall:
(a) use the
Trade Marks only in a manner which conforms to the
reasonable directions and standards notified to it by Shire
from time to time;
(b) market the
Licensed Product throughout the Territory under the
Trade Marks and ensure that all marketing materials for the
Product shall display the Trade Marks;
(c) not use,
register or attempt to register any trade marks,
company, business or trading names or domain names which are
identical or similar to (or which incorporate) any of the
Trade Marks, any aspect of them, or any other trade marks or
trade names used by Shire, without Shire's prior written
consent; and
(d) not do
anything which could, in Shire's reasonable opinion,
bring the Trade Marks or Shire into disrepute or which could
otherwise damage the goodwill attaching to the Trade Marks or
any other trade marks or trade names of Shire.
10.2
Shire shall, [...***...], maintain the registrations for the
Trade
Marks, and shall use reasonable efforts to prosecute any
applications
for registration of the Trade Marks through to grant in the
Territory.
10.3
The Licensee acknowledges that:
(a) it shall
not acquire, nor claim, any right, title or interest
in or to any of the Trade Marks or the goodwill attaching to
them by virtue of this Agreement or its use of the Trade
Marks, other than the rights specifically granted to it under
clause 10.1; and
(b) all
goodwill arising from use of the Trade Marks by the
Licensee before, during or after the term of this Agreement
shall accrue and belong to Shire, and the Licensee shall, at
Shire's request and cost, promptly execute all documents
required by Shire to confirm this.
11.
INTELLECTUAL PROPERTY, IMPROVEMENTS AND PATENTS
11.1
Except as set out in this Agreement and the License Agreement,
all
right, title and interest in the Shire Intellectual Property and
the
Trade Marks shall belong to Shire, and the Licensee shall not have
any
right, title or interest in the Shire Intellectual Property or
the
Trade Marks.
11.2
All Intellectual Property Rights in the Development Data shall
belong
to the Licensee. The Licensee shall disclose reasonably
detailed
summaries of the Development Data to Shire through the
Development
Committee.
11.3
Shire shall, at its sole option, file, prosecute, maintain or
extend
the Shire Patents. Subject to the terms of the License Agreement,
Shire
shall:
21
***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
(a) keep the
Licensee reasonably informed of any material
developments or notices in connection with the prosecution of
any Shire Patents or University Patent applications, but only
to the extent that the material developments or notices relate
to the Licensed Product;
(b) give the
Licensee a reasonable opportunity to comment on any
Shire response to such developments or notices that are
intended to be filed in any patent office in relation to the
Compound Patents and consider in good faith any such comments;
and
(c) give the
Licensee a reasonable opportunity to liaise and
cooperate with the University in the prosecution and
maintenance of the University Patents.
11.4
Any expenses incurred after the Effective Date in the filing,
prosecution or maintenance of:
(a) the
University Patents, shall borne by the Licensee;
(b) the
Compound Patents shall be borne by the Licensee and shall
be creditable (but non-refundable) against royalty payments
due from Licensee to Shire under clause 7 (including for the
avoidance of doubt, payments under clause 7.7(b)), provided
that, in no event will any credit amount under this Agreement
reduce the royalties payable to Shire in any Quarter by more
than [...***...]% (and any amount that has not been so
credited may be credited against royalties due in subsequent
Quarters, subject to the limitation described in the previous
sentence); and
(c) the
Background Patents, shall be borne by Shire.
11.5
In the event that Shire elects not to continue to file, prosecute
or
maintain patent protection for any of the Compound Patents, the
Licensee shall have the right, at its option, to maintain such
Compound
Patents on behalf of Shire. Without limiting the generality of
the
foregoing, in no event shall Shire provide the Licensee with notice
of
abandonment of any Compound Patents less than 30 days prior to its
date
of lapse.
11.6
Shire shall maintain patent protection for all Background
Patents
identified as [...***...] and [...***...] in the Principal
Markets.
11.7
Shire reserves all of its rights not expressly granted to the
Licensee
under this Agreement. The Licensee shall not, and shall not attempt
or
purport to file or prosecute in any country any patent
application
which claims, or purports to claim, any Shire Intellectual
Property,
except as permitted under clause 11.5. Additionally, the Licensee
shall
not, directly or indirectly prevent or attempt to prevent Shire
from
filing or prosecuting
in any country any patent application which
claims, discloses or uses or purports to claim, disclose or use
any
Shire Intellectual Property.
12.
INFRINGEMENT OF SHIRE INTELLECTUAL PROPERTY RIGHTS
12.1
Each Party shall promptly notify the other, with such details as it
has
in its possession, on becoming aware of any third party
infringement,
or suspected infringement, of any part of the Shire
Intellectual
Property or the Trade Marks in the Territory.
22
***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
12.2
Subject to the terms of the License Agreement, Shire shall have
the
first right, but not the obligation, to take action in respect of
any
infringements of the Shire Intellectual Property or the Trade
Marks,
including any injunctive, compensatory or other remedies or
relief
(collectively "REMEDIES") as may be necessary or desirable to
prevent
such infringement and preserve the Shire Intellectual Property.
The
Licensee shall permit any such Remedies to be brought in its name
if
permitted or required by law. Shire may compromise or settle any of
the
Remedies at its sole discretion, provided that, Shire shall not
make
any settlement or compromise that adversely affects the interests
of
the Licensee in respect of the Licensed Products in the
Territory
without the prior written consent of the Licensee, such consent not
to
be unreasonably withheld or delayed.
12.3
In the event that Shire does not pursue any Remedies with respect
to
the Shire Intellectual Property or the Trade Marks within 60
days
following notice of alleged infringement or 10 days before the
time
limit, if any, for the filing of any infringement action, whichever
is
sooner, then the Licensee shall, subject to the terms of the
License
Agreement, have the right but, not the obligation, to pursue
the
Remedies against such third party infringer at its sole cost,
provided
that, the Licensee does not make any settlement or compromise
that
adversely affects the interests of Shire without the prior
written
consent of Shire, such consent not to be unreasonably withheld
or
delayed. For the avoidance of doubt, the Licensee's right to pursue
any
Remedies with respect to the infringement, or suspected
infringement,
of any part of the Shire Intellectual Property is limited to the
extent
that such infringement, or suspected infringement relates to
the
Compound.
12.4
In the event that either Party pursues the Remedies under clauses
12.2
or 12.3:
(a)
the other
Party shall provide reasonable assistance to and
cooperate with the Party pursuing such Remedies, including
providing access to relevant documents and personnel and
furnishing a power of attorney if required by law;
(b) the
Party
