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EXHIBIT 10.35
SETTLEMENT, RELEASE AND PATENT LICENSE
This Settlement, Release and Patent License Agreement (this
"AGREEMENT") is
made as of February 9, 2007 ("EFFECTIVE DATE"), by and among
Takeda
Pharmaceutical Company Limited, a Japanese corporation with its
principal place
of business at 1-1 Doshomachi 4-Chome, Chuo-ku, Osaka, Japan
540-8645
("TAKEDA"), Wako Pure Chemical Industries, Ltd., a Japanese
corporation with its
principal place of business at 1-2 Doshomachi 3-Chome, Chuo-ku,
Osaka, Japan
540-8605 ("WAKO"), TAP Pharmaceutical Products Inc., a Delaware
corporation with
its principal place of business at 675 N. Field Drive, Lake
Forest, Illinois
("TAP"), and Abbott Laboratories, Limited - Laboratories Abbott,
Limitee, a
corporation organized and existing under the Canadian Business
Corporations Act
and having its principal place of business at Montreal,
Quebec
("ABBOTT-CANADA"), on the one hand, and QLT USA, Inc., a
Delaware corporation
with its principal place of business at 2579 Midpoint Drive,
Fort Collins,
Colorado 80525 ("ATRIX") and Sanofi-Synthelabo, Inc., a Delaware
corporation
with a principal place of business at 55 Corporate Boulevard,
Bridgewater, NJ
08807 ("SANOFI"), on the other hand (collectively, the
"PARTIES").
WHEREAS, the Parties deem it to be in their best interests and
to their
mutual advantage to settle their disputes on the terms and
conditions set forth
in this Agreement, without admitting liability, in order to
achieve certainty in
their business dealings and avoid the expense of litigation.
NOW, THEREFORE, in view of the foregoing and for other good and
valuable
consideration, receipt and sufficiency of which are hereby
acknowledged, the
Parties agree as follows:
1. DEFINITIONS.
1.1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following
terms shall have the following meanings:
(a) "AFFILIATE" shall mean any Person that controls, is
controlled by,
or is under common control with a Party to this Agreement. For
purposes of this
definition, "control" shall mean (i) in the case of a corporate
entity, direct
or indirect ownership of more than fifty percent (50%) of the
securities having
the right to vote for the election of directors, and (ii) in the
case of a
non-corporate entity, direct or indirect ownership of a majority
of the equity
interests with the power to direct the management and policies
of such
non-corporate entity. Notwithstanding the foregoing, in no event
shall Abbott
Laboratories be considered an Affiliate of any of the
Parties.
(b) "CLAIMS" shall mean any and all claims, actions, causes of
action,
demands, suits, proceedings, administrative proceedings, losses,
damages, costs,
expenses, liabilities, charges, interest, penalties, fines and
charges of
whatever nature (including costs of collection, attorneys' fees
and other costs
of defense, costs of enforcing indemnification provisions, and
expenses of
investigation), whether known or unknown.
(c) "CONTROL" or "CONTROLLED," as to patent rights, shall
mean
ownership of such patent right or the ability of a Person to
grant a license, or
sublicense, or covenant not to sue under any such patent
rights.
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(d) "GOVERNMENTAL AUTHORITY" shall mean any nation, territory
or
government (or union thereof), foreign, domestic or
multinational, any state,
local or other political subdivision thereof, and any bureau,
court, tribunal,
board, commission, department, agency or other Person exercising
executive,
legislative, judicial, regulatory or administrative functions of
government.
(e) "LICENSOR" or "LICENSORS" shall mean any and each of Takeda,
Wako,
TAP, and Abbott-Canada, collectively and individually.
(f) "LITIGATION" shall mean, collectively, that certain
lawsuit
captioned "TAP Pharmaceutical Products Inc., Takeda Chemical
Industries, Ltd.
and Wako Pure Chemical Industries, Ltd. v. Atrix Laboratories,
Inc. and
Sanofi-Synthelabo Inc.," No. 03-C-7822, United States District
Court for the
Northern District of Illinois and the appeal pending therefrom
captioned "TAP
Pharmaceutical Products Inc., Takeda Chemical Industries, Ltd.
and Wako Pure
Chemical Industries, Ltd. v. Atrix Laboratories, Inc. and
Sanofi-Synthelabo
Inc.," No. 2006-1258, United States Court of Appeals for the
Federal Circuit.
(g) "LITIGATION PARTY" or "LITIGATION PARTIES" shall mean any
and each
of Atrix, Sanofi, Takeda, Wako, and TAP, collectively and
individually.
(h) "PARTY" shall mean any and each of Atrix, Sanofi, Takeda,
Wako,
TAP, and Abbott-Canada, collectively and individually.
(i) "PERSON" shall mean an individual, corporation,
partnership,
limited partnership, limited liability company, unincorporated
association,
trust, joint venture, union or other organization or entity,
including a
Governmental Authority.
(j) "RELEASED PARTY" OR "RELEASED PARTIES" shall mean any and
each of
Atrix and Sanofi, collectively and individually.
(k) "RELEASING PARTY" or "RELEASING PARTIES" shall mean any and
each
of Takeda, Wako, TAP, and Abbott-Canada, collectively and
individually.
(l) "SUBJECT PRODUCT" or "SUBJECT PRODUCTS" shall mean (i)
the
following products marketed or sold on or prior to the Effective
Date by Atrix
or licensed by Atrix and sold by its Affiliates or licensees in
the Territory on
or prior to the Effective Date: the Eligard(R) products (which
contain
leuprolide acetate in 7.5 mg, 22.5 mg, 30 mg, and 45 mg dosages)
and dental
products called Atridox(TM), Atrisorb Free Flow(TM),
Atrisorb-D(TM) and
Doxyrobe(TM); and (ii) products that are the same as or have
only non-colorable
(i.e. insubstantial or immaterial) differences from any of the
foregoing
products.
(m) "SUBJECT PRODUCT PATENT RIGHTS" shall mean any and all
rights in
the following that are owned, licensed or Controlled by any of
the Releasing
Parties, and that claim or cover the Subject Products (or the
manufacture, use
or sale thereof), whether the following are existing as of the
Effective Date or
thereafter: (i) patents in the Territory; (ii) patent
applications in the
Territory, including provisional applications, and (iii) any
patents issuing
therefrom and any divisionals, continuations,
continuations-in-part, reissues,
re-examinations, extensions, and term extensions (under
applicable patent law or
regulation or other law or regulation) in the Territory of any
of the
above-described patents or patent applications.
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(n) "SUBLICENSEE" shall mean any Person, and their
respective
sublicensees, to whom a sublicense is granted pursuant to
Section 5.2.
(o) "TERRITORY" shall mean the United States of America, its
territories and possessions including the Commonwealth of Puerto
Rico, and
Canada.
1.2. ADDITIONAL DEFINITIONS. Certain additional capitalized
terms are
defined below in the body of this Agreement.
2. RELATIONSHIP OF AGREEMENT WITH MOTION TO DISMISS; STIPULATED
ORDER OF
DISMISSAL.
Forthwith after execution of this Agreement, the Litigation
Parties will
jointly file a motion to dismiss (the "MOTION TO DISMISS") the
appeal in the
case entitled "TAP Pharmaceutical Products Inc., Takeda Chemical
Industries,
Ltd. and Wako Pure Chemical Industries, Ltd. v. Atrix
Laboratories, Inc. and
Sanofi-Synthelabo Inc.," No. 2006-1258 in the U.S. Court of
Appeals for the
Federal Circuit (the "Appeals Court") in the form of Exhibit A
attached to this
Agreement. If the Appeals Court grants the Motion to Dismiss
prior to issuing
any opinions on the merits of the appeal (including a ruling
pursuant to Federal
Rule of Appellate Procedure 36), then the Litigation Parties
shall, within three
business days after the Appeals Court grants the Motion to
Dismiss, file a
Stipulated Order of Dismissal in the case captioned "TAP
Pharmaceutical Products
Inc., Takeda Chemical Industries, Ltd. and Wako Pure Chemical
Industries, Ltd.
v. Atrix Laboratories, Inc. and Sanofi-Synthelabo Inc.," No.
03-C-7822 in the
United States District Court for the Northern District of
Illinois (the
"District Court"), in the form of Exhibit B attached to this
Agreement, and make
other appropriate filings requesting the District Court -- and
take all other
actions reasonably required -- to dismiss with prejudice all
claims for relief
asserted by any Party against any other Party in the Litigation.
If the District
Court dismisses case no. 03-C-7822 in accordance with the
Stipulated Order of
Dismissal, (a) Atrix shall and the Releasing Parties shall
instruct Patterson,
Belknap, Webb & Tyler to instruct the Escrow Agent (as that
term is defined in
the Escrow Agreement dated June 8, 2006 between Atrix and
JPMorgan Chase Bank,
N.V. (the "JP Morgan Escrow Agreement")) to deliver the Escrow
Funds (as that
term is defined in the JP Morgan Escrow Agreement) to Atrix in
accordance the
terms of the JP Morgan Escrow Agreement; and (b) Atrix and
Sanofi shall pay
their respective shares of the Settlement Amount in accordance
with Section 3.1.
If the Appellate Court denies the Motion to Dismiss or issues an
opinion on the
merits of the appeal prior to granting the Motion to Dismiss,
then this
Agreement shall automatically and immediately terminate, cease
to have any force
and effect, and shall be deemed null and void and of no effect
on a retroactive
basis.
3. MONETARY CONSIDERATION.
3.1. PAYMENT BY ATRIX AND SANOFI. Subject to the conditions set
forth in
Section 2, which are for the benefit of and may be waived by
Atrix and Sanofi
jointly, (a) Atrix shall pay to TAP the amount of $112.5
million, and (b) Sanofi
shall pay to TAP the amount of $45 million (the amounts in (a)
and (b), in the
aggregate being the "SETTLEMENT AMOUNT"), in each case, within
three business
days after both of the following events occur: the Appeals Court
grants the
Motion to Dismiss and the District Court dismisses case no.
03-C-7822 in
accordance with the Stipulated Order of Dismissal. All payments
shall be made in
United States Dollars. Atrix and Sanofi shall deposit their
respective share of
the Settlement Amount with their respective legal counsel on the
Effective Date
to be held in escrow on behalf of such Parties for payment to
TAP in accordance
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with this Agreement. The Settlement Amount shall be paid to TAP
by wire transfer
of immediately available funds to an account previously
designated by TAP to
Atrix and Sanofi in writing and TAP shall apportion the
Settlement Amount among
the other Releasing Parties, if any apportionment is to be made.
Payment of the
Settlement Amount to TAP shall constitute full payment of any
portion of the
Settlement Amount to the other Releasing Parties entitled
thereto. TAP
represents that it will comply with any applicable United States
federal, state
or local withholding tax obligations with respect to such
payments, if any, that
TAP makes to the other Releasing Parties. TAP acknowledges that,
as between TAP
on the one hand and Atrix and Sanofi on the other hand, TAP
assumes full
responsibility to fulfill any withholding tax obligations with
respect to the
Settlement Amount. The Settlement Amount, once paid, is not
refundable.
3.2. NO OTHER FUNDS TRANSFER. The Settlement Amount represents
full and
complete payment for all of the rights and releases granted to
Atrix, Sanofi and
any Atrix and Sanofi Releasees (as defined in Section 4.1) under
this Agreement,
and neither Atrix, Sanofi nor any Atrix and Sanofi Releasee
shall be under any
obligation to pay any additional or further amounts to any
Releasing Party under
this Agreement.
3.3. TAXES. If the United States Internal Revenue Service or any
state or
local taxing authority within the United States imposes on Atrix
or Sanofi any
withholding tax on any portion of the Settlement Amount under
the Internal
Revenue Code of 1986, as amended or the Treasury regulations
thereunder, TAP
shall indemnify and hold harmless Atrix and Sanofi for the
amount of such
withholding tax, plus any interest, penalties or additions to
tax related
thereto.
4. RELEASES, COVENANTS NOT TO SUE, AND DISMISSALS.
4.1. RELEASES BY EACH RELEASING PARTY. Upon full payment of the
Settlement
Amount, each Releasing Party, each acting on behalf of itself
and its respective
predecessors, successors, and assigns, does hereby now and shall
forever release
and discharge Atrix and Sanofi, and their predecessors,
successors, assigns and
Affiliates, and each of their respective current and former
officers, directors,
employees, agents, attorneys, representatives, distributors,
resellers,
licensees, direct or indirect customers and contract
manufacturers (collectively
and individually, "ATRIX RELEASEES" and "SANOFI RELEASEES"),
from and against
(a) any and all Claims arising under, related to, or connected
with any Subject
Product Patent Rights in the Territory with respect to the
period before the
Effective Date, (b) any and all Claims raised in the Litigation,
including but
not limited to any requests in the Litigation to recover
damages, fees or
expenses due for alleged infringement of the Subject Product
Patent Rights, or
any requests to recover attorneys' fees or costs in connection
with the
Litigation, (c) any and all Claims arising out of or related to
actions taken or
statements made concerning or in connection with the Litigation
in the
Territory, (d) any and all matters which could have been raised
(whether or not
due to compulsory counterclaim requirements) in, or as a result
of, the
Litigation in the Territory; and (e) any and all Claims, arising
during the
period before the Effective Date, related to allegations that
the Subject
Products (or any aspect thereof for use in the Subject Products)
infringe any
Subject Product Patent Rights Controlled by a Releasing Party in
the Territory.
Releasing Parties, acting jointly and severally, represent and
warrant, as of
the Effective Date, to Atrix and Sanofi that they possess and
Control (and have
always possessed and Controlled) the exclusive right to sue for
infringement or
misappropriation of the Subject Product Patent Rights in the
Territory and that
no other Person has ever had the right to recover damages for
infringement or
misappropriation of any Subject Product Patent Rights in the
Territory.
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4.2. RELEASES BY ATRIX AND SANOFI. Upon full payment of the
Settlement
Amount, Atrix and Sanofi, each acting on behalf of itself and
its respective
predecessors, successors and assigns, does hereby now and shall
forever release
and discharge the Releasing Parties, and each of their
respective predecessors,
successors, assigns and Affiliates, and each of their respective
current and
former officers, directors, employees, agents, attorneys,
representatives,
distributors, resellers, licensees, and direct or indirect
customers
(collectively and individually, "COLLECTIVE TAP RELEASEES"),
from and against
(a) any and all Claims raised in the Litigation, including but
not limited to
any Claim that U.S. Patent No. 4,728,721 is invalid or
unenforceable in the
Territory or should be reexamined or revoked, any Claim that any
Releasing Party
wrongfully enforced or committed patent misuse with respect to
U.S. Patent No.
4,728,721 in the Territory or any claim to recover attorneys'
fees or costs in
connection with the Litigation, (b) any and all Claims arising
out of or related
to actions taken or statements made concerning or in connection
with the
Litigation in the Territory, (c) any and all matters which could
have been
raised (whether or not due to compulsory counterclaim
requirements) in, or as a
result of, the Litigation in the Territory, and (d) any and all
Claims arising
during the period before the Effective Date that U.S. Patent No.
4,728,721 is
invalid or unenforceable or should be re-examined, opposed, or
revoked in the
Territory and/or any and all Claims arising during the period
before the
Effective Date that any Releasing Party wrongfully enforced or
committed patent
misuse with respect to U.S. Patent No. 4,728,721 in the
Territory.
4.3. COVENANTS NOT TO SUE. No Atrix Releasee or Sanofi Releasee
shall now
or at any time in the future initiate any arbitration, lawsuit
or other
proceeding asserting (or otherwise assert, directly or through
any third party)
any Claim released pursuant to this Agreement. No Collective TAP
Releasee shall
now or at any time in the future initiate any arbitration,
lawsuit or other
proceeding asserting (or otherwise assert, directly or through
any third party)
(a) any Claim released pursuant to this Agreement, or (b) that
the Subject
Products infringe any Subject Product Patent Rights Controlled
by any Collective
TAP Releasee in the Territory, provided that nothing shall be
construed to
release Atrix and Sanofi
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