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License And Supply Agreement

Supply Agreement

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ONYX PHARMACEUTICALS INC | CyDex, Inc | Proteolix, Inc

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Title: License and Supply Agreement
Governing Law: New York     Date: 2/23/2010
Industry: Biotechnology and Drugs     Sector: Healthcare

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[ ** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Exhibit 10.22 LICENSE AND SUPPLY AGREEMENT       This License and Supply Agreement (this " Agreement ") is made this 12th day of October, 2005 (the " Effective Date "), by and between CyDex, Inc. , a Delaware corporation with offices at 10513 W. 84th Terrace, Lenexa, Kansas 66214, (" CyDex "), and Proteolix, Inc. , a Delaware corporation with offices at 225 Gateway Boulevard, South San Francisco, California 94080 (" Proteolix "). Recitals       Whereas , CyDex is engaged in the business of developing and commercializing novel drug delivery technologies designed to enhance the solubility and effectiveness of existing and development-stage drugs;       Whereas , CyDex is the exclusive worldwide licensee of CAPTISOL®, a patented drug formulation system designed to enhance the solubility and stability of drugs;       Whereas , Proteolix desires to obtain a license to use such patented drug formulation system in connection with its development and commercialization of a certain pharmaceutical compound and CyDex is willing to grant such license to Proteolix under the terms and conditions set forth herein; and       Whereas , CyDex desires to sell CAPTISOL® to Proteolix, and Proteolix desires to purchase CAPTISOL® from CyDex, in accordance with the terms and conditions contained herein.       Now, Therefore , in consideration of the following mutual promises and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties, intending to be legally bound, agree as follows: 1. Definitions.      For the purposes of this Agreement, the terms hereunder shall have the meanings as defined below:       1.1 " Affiliate " means, with respect to any party, any entity controlling, controlled by, or under common control with such party, during and for such time as such control exists. For these purposes, "control" shall refer to the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of the relevant entity.       1.2 " CAPTISOL " means CAPTISOL®, also known scientifically as sulfobutylether b(beta) cyclodextrin, sodium salt.  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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      1.3 " CAPTISOL Data Package " means (a) all toxicology/safety and other relevant scientific safety data owned, licensed or developed by CyDex and its Affiliates; (b) all toxicology/safety and other relevant scientific data owned, licensed or developed by the licensees or sublicensees of CyDex or its Affiliates or other third parties (to the extent permitted in the applicable license or other agreements between CyDex and/or its Affiliates and such licensees, sublicensees or other third parties) on CAPTISOL alone (and not in conjunction with a product formulation); and (c) all CMC and manufacturing process data relating to the preparation of CAPTISOL, in each case to the extent necessary or useful for the formulation of the Product.       1.4 " CAPTISOL Improvement " means any technology or improvement specifically related to the physical properties of CAPTISOL, whether or not patentable, that is developed by Proteolix or its Affiliates or Sublicensees, solely or jointly with a third party.       1.5 " Claim " has the meaning specified in Section 10.1 .       1.6 " Clinical Grade CAPTISOL " means CAPTISOL which (a) has been manufactured under conditions of current good manufacturing practices for bulk excipients as set forth in U.S. Pharmacopoeia <1078> or any successor thereto, (b) is intended for use in humans, and (iii) is intended for clinical trials for the Product.       1.7 " Commercial Grade CAPTISOL " means CAPTISOL which (a) has been manufactured under conditions of current good manufacturing practices for bulk excipients as set forth in U.S. Pharmacopoeia <1078> or any successor thereto, (b) is intended for use in humans, and (iii) is intended for commercial sale of the Product.       1.8 " Commercial Launch Date " means, in any particular country, the first commercial sale of the Product by Proteolix, or an Affiliate or Sublicensee of Proteolix to a third party.       1.9 " Compound " means that certain pharmaceutical compound known as PR-171, owned by or licensed to Proteolix and developed and manufactured by or on behalf of Proteolix.       1.10 " Confidential Information " has the meaning specified in Section 8.1 .       1.11 " Detailed Forecast " has the meaning specified in Section 3.2(b) .       1.12 " Disclosing Party " has the meaning specified in Section 8.1 hereof.       1.13 " DMF " means a Drug Master File for CAPTISOL, as currently filed, or as hereafter updated from time to time, by CyDex with the FDA.       1.14 " FDA " means the United States Food and Drug Administration, or any successor thereto.       1.15 " Field " means the treatment of any and all diseases and conditions in humans, except: (a) for the treatment or prophylaxis of fungal infections; or (b) as a topical ocular treatment of dry eye.  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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      1.16 " IND " means an Investigational New Drug application, as defined in the United States Federal Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or similar application filed with an equivalent regulatory body in another country.       1.17 " Indemnitee " has the meaning specified in Section 10.3 .       1.18 " Indemnitor " has the meaning specified in Section 10.3 .       1.19 " Initial Detailed Forecast " has the meaning specified in Section 3.2(b) .       1.20 " Licensed Patents " means all patents and patent applications in the Territory which cover CAPTISOL and which now or at any time during the Term are owned by or licensed to CyDex or any CyDex Affiliate with the right to sublicense, including any and all extensions, renewals, continuations, substitutions, continuations-in-part, divisions, patents-of-addition, reissues, reexaminations and/or supplementary protection certificates to any such patents. Set forth in Exhibit A attached hereto is a list of the Licensed Patents as of the Effective Date. Such Exhibit shall be updated by CyDex from time to time.       1.21 " Product " means the Compound combined with or formulated using CAPTISOL in a parenteral dosage form/formulation.       1.22 " Losses " has the meaning set forth in Section 10.1 .       1.23 " Marketing Approval " means final approval of an NDA by the FDA, or final approval of a comparable document filed with an equivalent health regulatory authority in any other country or in the European Union (using the centralized process or mutual recognition), including all required marketing, pricing or reimbursement approvals.       1.24 " NDA " means a New Drug Application, as defined in the United States Federal Food, Drug and Cosmetics Act and the regulations promulgated thereunder; or similar application filed with an equivalent regulatory body in another country.       1.25 " Net Sales " means gross amounts invoiced by Proteolix, its Affiliates and Sublicensees for sales of the Product in the Field, less the following: (a) normal and customary trade, quantity and/or cash discounts, allowances and rebates actually allowed or given; (b) returns and credits actually allowed for rejections, defects or recalls of Product, outdated or returned Product, or because of rebates or retroactive price reductions; (c) freight, postage, shipping insurance and other transportation expenses (if separately identified on the invoice); and (d) sales, value-added, excise or use taxes, tariffs, duties and customs fees and other taxes imposed with respect to specific sales. "Net Sales" shall not include amounts for any Product furnished to a third party for use in clinical trials and Product distributed as promotional and free goods. Furthermore, "Net Sales" shall not include amounts from sales or other dispositions of Product between Proteolix and any of its Affiliates or Sublicensees, unless such Affiliate or Sublicensee is an end-user of such Product.       1.26 " Notice of Termination " has the meaning specified in Section 13.2 .  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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      1.27 " Phase 1 Trial " means those clinical trials on sufficient numbers of normal volunteers and patients that are designed to establish that a drug is safe for its intended use, and to support its continued testing in Phase 2 Trials.       1.28 " Phase 2 Trial " means those trials in sufficient numbers of patients that are designed to establish the safety and biological activity of a drug for its intended use, and to define warnings, precautions and adverse reactions that are associated with a drug in the dosage range to be prescribed.       1.29 " Pfizer " has the meaning specified in Section 8.5 .       1.30 " Purchase Volume Limitations " has the meaning specified in Section 3.2(c) .       1.31 " Receiving Party " has the meaning specified in Section 8.1 .       1.32 " Ql " has the meaning specified in Section 3.2(c) .       1.33 " Research Grade CAPTISOL " means CAPTISOL which has not been manufactured under required conditions of current good manufacturing practices and is not suitable for use in humans, but which meets the Specifications for Research Grade CAPTISOL.       1.34 " Specifications " means the specifications for CAPTISOL set forth in Exhibit B hereto, as such may be amended from time to time pursuant to Section 3.4 .       1.35 " Sublicensees " has the meaning specified in Section 2.3 .       1.36 " Term " has the meaning specified in Section 13.1 .       1.37 " Testing Methods " has the meaning specified in Section 3.5(a) .       1.38 " Third-Party Manufacturer " has the meaning specified in Section 3.6 .       1.39 " Territory " means the entire world. 2. Grant of Rights.       2.1 License Grants from CyDex to Proteolix.            (a) Licensed Patents . Subject to the terms and conditions of this Agreement, CyDex hereby grants to Proteolix an exclusive, nontransferable license during the Term under the Licensed Patents, solely to develop, make, have made, use, market, distribute, sell, offer for sale and import the Product in the Field in the Territory. Notwithstanding the foregoing, to the extent that any Licensed Patents are licensed to CyDex or its Affiliates by a third party on a non-exclusive basis, the license granted to Proteolix in the foregoing sentence shall be exclusive as to CyDex and non-exclusive as to any third party. Proteolix may not sublicense the Licensed Patents, except as expressly set forth in Section 2.3 below. For purposes of clarification, CyDex grants no rights to Proteolix to manufacture, import, sell or offer to sell bulk CAPTISOL, except as otherwise provided in Section 3.7(c) .  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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           (b) CAPTISOL Data Package . Subject to the terms and conditions of this Agreement, CyDex hereby grants to Proteolix a non-exclusive, nontransferable license during the Term under CyDex’ right in and to the CAPTISOL Data Package, solely to develop, make, have made, use, market, distribute, sell, offer for sale and import the Product in the Field in the Territory. Proteolix may not sublicense its rights to the CAPTISOL Data Package, except as expressly set forth in Section 2.3 below.       2.2 Grant of License from Proteolix to CyDex. Proteolix hereby grants to CyDex a non-exclusive, transferable, perpetual, royalty-free license, with the right to grant sublicenses, under Proteolix’, its Affiliates’ and Sublicensees’ rights in and to CAPTISOL Improvements to develop, make, have made, use, market, distribute, sell, offer for sale and import any CAPTISOL Improvement in the Territory. Proteolix shall provide prompt notice of any such CAPTISOL Improvement, and shall notify and consult with CyDex at least [ ** ] days prior to the filing of any patent application with respect to such CAPTISOL Improvement.       2.3 Sublicensing. Proteolix shall have the right to grant sublicenses to its Affiliates and licensees of the Product (collectively " Sublicensees ") under the licenses granted to Proteolix pursuant to Section 2.1 ; provided that (a) each such Sublicensee has agreed to be bound by all applicable terms and obligations of the rights and licenses granted by CyDex to Proteolix under this Agreement (including, without limitation, Proteolix’ confidentiality obligations), (b) the terms and conditions of each such sublicense is consistent with and no less restrictive than the terms and conditions of this Agreement, and (c) Proteolix provides to CyDex a copy of each such sublicense agreement with respect to the Product, provided, however , Proteolix may redact any proprietary or financial terms from any such copy. If necessary to engage a third party manufacturer for the Product, Proteolix shall be permitted under this Agreement to treat any such third party manufacturer as a Sublicensee, subject to the terms of this Section 2.3 . In any event, Proteolix shall procure from any third party manufacturer of the Product, such third party’s agreement that all bulk CAPTISOL supplied pursuant to this Agreement shall be used solely for the manufacture of the Product. Other than as specifically provided in and this Section 2.3 , Proteolix shall not have the right to grant sublicenses to any third party under the licenses granted pursuant to Section 2.1 .       2.4 Reservation of Rights. This Agreement confers no right, license or interest by implication, estoppel, or otherwise under any patents, patent applications, know-how or other intellectual property rights of either party except as expressly set forth in this Section 2 and elsewhere in this Agreement. Each party hereby expressly retains and reserves all rights and interests with respect to patents, patent applications, know-how or other intellectual property rights not expressly granted to the other party hereunder. 3. Manufacture and Supply of CAPTISOL.       3.1 Purchase of CAPTISOL. Proteolix agrees that Proteolix and its Affiliates and Sublicensees shall purchase CAPTISOL for use in Product exclusively from CyDex and that they shall not manufacture (or have manufactured on their behalf) CAPTISOL for such use without CyDex’ prior written consent. CyDex agrees that CyDex shall produce (or have produced for it) and sell to Proteolix one hundred percent (100%) of Proteolix’ and its Affiliates’  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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and Sublicensees’ requirements for CAPTISOL for use in Product, during the Term and subject to the provisions of this Agreement. Purchases of CAPTISOL may include Research Grade CAPTISOL, Clinical Grade CAPTISOL and/or Commercial Grade CAPTISOL. Proteolix may place orders for CAPTISOL on behalf of its Affiliates and Sublicensees; provided, however , that: (a) Proteolix shall instruct CyDex as to the location for the shipment thereof; (b) Proteolix shall guarantee payment to CyDex of all amounts payable with respect thereto; and (c) if Proteolix requests that CyDex deliver such orders to Proteolix for re-delivery thereof by Proteolix to its Affiliates or Sublicensees, Proteolix shall comply with all applicable laws, rules and regulations applicable to the transportation of CAPTISOL from Proteolix to its Affiliates and Sublicensees.       3.2 Supply Terms.            (a) Long-term Forecast. No later than [ ** ] months prior to the anticipated Commercial Launch Date by Proteolix or its Affiliates or Sublicensees of a Product in any particular country, Proteolix shall provide CyDex with a forecast setting forth Proteolix’ estimate of the required quantities of Commercial Grade CAPTISOL for each of the following [ ** ] years. Such long-term forecast shall thereafter be updated by Proteolix at least once every [ ** ] months.            (b) Detailed Forecasts.                 (i) Commercial Forecasts: At least [ ** ] calendar quarters prior to the calendar quarter in which Proteolix anticipates the placement of its first order for Commercial Grade CAPTISOL, and thereafter on a calendar quarterly basis until the First Commercial Sale Date, Proteolix shall deliver to CyDex a detailed rolling forecast setting forth Proteolix’ anticipated requirements and anticipated delivery schedules for Commercial Grade CAPTISOL for the calendar quarter in which the Commercial Launch Date of a Product is anticipated to occur and, in addition, for each full calendar quarter during the [ ** ] month period following such anticipated Commercial Launch Date (the " Initial Detailed Forecast "). No later than the first day of the first full calendar quarter following the Commercial Launch Date, and no later than the first day of each full calendar quarter thereafter, Proteolix shall deliver to CyDex a detailed rolling forecast setting forth Proteolix’ anticipated requirements and anticipated delivery schedules for Commercial Grade CAPTISOL for each of the [ ** ] full calendar quarters during the [ ** ] month period following the delivery date of such forecast (each, a " Detailed Forecast "). Each Detailed Forecast shall be firm and binding on Proteolix with respect to Proteolix’ obligation to purchase quantities of Commercial Grade CAPTISOL for the [ ** ] and [ ** ] full calendar quarter in such Detailed Forecast, subject to the permissible variances set forth in Section 3.2(c) below, and estimates of Proteolix’ requirements for the [ ** ] and [ ** ] full calendar quarters in such Detailed Forecast. If Proteolix fails to provide any updated Detailed Forecast in accordance with this Section 3.2(b) , the Detailed Forecast last provided by Proteolix shall be deemed to be the updated Detailed Forecast, and the next full calendar quarter estimate of Proteolix’ requirements for Commercial Grade CAPTISOL set forth in such Detailed Forecast shall be a firm and binding obligation with respect to Proteolix’ obligation to purchase Commercial Grade for such next full calendar quarter.  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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                (ii) Clinical Forecasts: Beginning [ ** ] months after the Effective Date, Proteolix shall deliver to CyDex at least every [ ** ] months, a rolling forecast of their estimated requirements for Clinical Grade CAPTISOL for so long as Proteolix requires clinical grade material during the Term. Upon commencement of the Detailed Forecast as specified in Section 3.2(b) above, the Clinical Forecast shall be incorporated, as a separate subsection, into such Detailed Forecast. The frequency of the Clinical Forecast shall then be the same as for the Detailed Forecast. The Clinical Forecast shall be for planning purposes only, and thus shall not be binding in any manner whatsoever until a PO has been placed by Proteolix for said Clinical Grade CAPTISOL and accepted by CyDex.            (c) Detailed Forecast Variances. Each updated Detailed Forecast may modify the amount of Commercial Grade CAPTISOL estimated in the previous Detailed Forecast in accordance with the following limitations (the " Purchase Volume Limitations "):                 (i)  for the first calendar quarter covered by such updated Detailed Forecast (" Ql "), no change may be made without the prior express written consent of CyDex;                 (ii)  for the second calendar quarter covered by such updated Detailed Forecast, no change in excess of a [ ** ] percent [ ** ] volume increase or decrease from the prior Detailed Forecast may be made without the prior express written consent of CyDex;                 (iii)  for the third calendar quarter covered by such updated Detailed Forecast, no change in excess of a [ ** ] percent [ ** ] volume increase or decrease from the prior Forecast may be made without the prior express written consent of CyDex; and                 (iv)  for the fourth calendar quarter covered by such updated Detailed Forecast, no change in excess of a [ ** ] percent [ ** ] volume increase or decrease from the prior Forecast may be made without the prior express written consent of CyDex. In each case CyDex’ consent may be conditioned on such payment or other terms as CyDex may require.            (d) Purchase Orders. Together with each Detailed Forecast provided under Section 3.2(b) above, Proteolix shall place a firm purchase order with CyDex in a form mutually agreed upon by the parties, for Proteolix’ order of Commercial Grade CAPTISOL for Q1 delivery consistent with the Detailed Forecast. Each purchase order, for all grades of CAPTISOL, shall specify: (i) the grade of CAPTISOL ordered ( i.e. , Commercial Grade CAPTISOL, Clinical Grade CAPTISOL or Research Grade CAPTISOL); (ii) quantities; (iii) delivery dates; and (iv) reasonable shipping instructions. CyDex shall use commercially reasonable efforts to comply with Proteolix’ requested delivery dates; provided, however , that the purchase order is received by CyDex at least [ ** ] days prior to the stipulated delivery date. No purchase order shall be binding upon CyDex until accepted by CyDex in writing; provided, however , that CyDex shall accept such orders for Commercial Grade CAPTISOL from Proteolix to the extent that the quantities of CAPTISOL ordered do not exceed the Purchase Volume Limitations. CyDex shall not be obligated to accept such orders to the extent that the quantities of Commercial Grade CAPTISOL ordered exceed the Purchase Volume Limitations, but CyDex shall use good faith efforts to fill such orders for such excess quantities from available supplies.  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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If CyDex, despite the use of good faith efforts, is unable to supply such quantities that exceed the Purchase Volume Limitations to Proteolix, such inability to supply shall not be deemed to be a breach of this Agreement by CyDex or a failure by CyDex to supply for any purpose. Ordered quantities of Commercial Grade CAPTISOL shall be specified in multiples of [ ** ] kilograms, subject to a minimum order quantity of [ ** ] kilograms. CyDex shall use reasonable efforts to notify Proteolix within [ ** ] business days after its receipt of Proteolix’ purchase order of its ability to fill any amounts of such order that are in excess of the Purchase Volume Limitations. If any purchase order or other document submitted by Proteolix hereunder or any other document passing between the parties contains terms or conditions in addition to or inconsistent with the terms of this Agreement, the terms of this Agreement shall control and prevail and such additional or inconsistent terms are hereby expressly rejected.       3.3 Delivery. CyDex shall deliver to Proteolix or Proteolix’ designee each order of CAPTISOL, packed for shipment in accordance with CyDex’ customary practices and the Specifications, CIP Proteolix designated location (Incoterms 2000). Title and risk of loss and/or damage to CAPTISOL shall pass to Proteolix upon delivery of CAPTISOL to Proteolix or Proteolix’ designee at Proteolix’s designed location. CyDex acknowledges the inherent risk that a batch of CAPTISOL may be lost in production or shipment, and CyDex agrees to maintain an inventory of CAPTISOL sufficient to supply at least [ ** ] days worth of Proteolix’ requirements in the event of production or delivery delays.       3.4 Modified Specifications. CyDex shall have the right to change the Specifications from time to time during the Term; provided that such change has no adverse effect or consequence on Proteolix’ development or commercialization of the Product including, for example, an effect or consequence that requires Proteolix to conduct any clinical study requested by the FDA or other regulatory agency. Any change in the Specifications that would have an adverse effect or consequence on Proteolix’ development or commercialization of the Product will require Proteolix’ prior written consent. In the event that CyDex desires to change the Specifications, CyDex shall give Proteolix at least [ ** ] days notice. CyDex shall cooperate with Proteolix to have any change approved by the FDA and other regulatory agencies having jurisdiction. In the event that the FDA or another regulatory agency having jurisdiction requires Proteolix to implement any changes to the Specifications, CyDex shall use all reasonable efforts to make such changes. CyDex shall promptly advise Proteolix as to any lead-time changes or other terms that may result from a change to the Specifications, including but not limited to price adjustments necessary to enable CyDex to recover costs it actually incurred for materials already purchased by CyDex expressly for Proteolix, its Affiliates or Sublicensees and rendered unusable by a change in Specifications requested by Proteolix or as necessary to comply with government regulatory requirements with respect to the Product If a regulatory agency requires a change to the Specifications where such change is specific to CAPTISOL and not specific to the Product then CyDex shall be responsible for the costs incurred to generate such unique, modified Specifications.       3.5 Quality Control; Acceptance and Rejection.            (a) Quality Control. CyDex shall conduct or have conducted quality control testing of CAPTISOL prior to shipment in accordance with the Specifications and other CyDex-  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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approved quality control testing procedures (the " Testing Methods "). CyDex shall retain or have retained accurate and complete records pertaining to such testing. Each shipment of CAPTISOL hereunder shall be accompanied by a certificate of analysis for each lot of CAPTISOL therein.            (b) Acceptance Testing. Proteolix shall have a period of [ ** ] days after the date of receipt to test or cause to be tested CAPTISOL supplied under this Agreement. Proteolix or its designee shall have the right to reject any shipment of CAPTISOL that does not conform in all material respects with the Specifications at the time of delivery pursuant to Section 3.3 hereof when tested in accordance with the Testing Methods. All shipments of CAPTISOL shall be deemed accepted by Proteolix unless CyDex receives written notice of rejection from Proteolix within such [ ** ] day period, describing the reasons for the rejection in reasonable detail. Once a delivery of CAPTISOL is accepted or deemed accepted hereunder, Proteolix shall have no recourse against CyDex in the event CAPTISOL is subsequently deemed unsuitable for use for any reason, except as provided in Sections 7.4 and 10 below.            (c) Confirmation. CyDex shall notify Proteolix as soon as reasonably practical (but in any event within [ ** ] days) after its receipt of a notice of rejection from Proteolix pursuant to Section 3.5(b) above, whether CyDex accepts Proteolix’ basis for rejection and Proteolix shall cooperate with CyDex in determining whether such rejection was necessary or justified. If the parties are unable to agree as to whether a shipment of CAPTISOL supplied by CyDex or its Third-Party Manufacturer hereunder meets the Specifications, such question shall be submitted to an independent quality control laboratory mutually agreed upon by the parties. The findings of such independent laboratory shall be binding upon the parties. The cost of the independent quality control laboratory shall be borne by the party whose results are shown by such laboratory to have been incorrect.            (d) Return or Destruction of Rejected Shipments. Proteolix may not return or destroy any batch of CAPTISOL until it receives written notification from CyDex that CyDex does not dispute that the batch fails to meet the Specifications; provided that if Proteolix does not receive such written notice within [ ** ] days after its delivery of a notice of rejection to CyDex pursuant to Section 3.5(b) above, CyDex shall be deemed to agree that such batch fails to meet the Specifications. CyDex will indicate in its notice either that Proteolix is authorized to destroy the rejected batch of CAPTISOL or that CyDex requires return of the rejected CAPTISOL. Upon written authorization from CyDex to do so, Proteolix shall promptly destroy the rejected batch of CAPTISOL and provide CyDex with written certification of such destruction. Upon receipt of CyDex’ request for return, Proteolix shall promptly return the rejected batch of CAPTISOL to CyDex. In each case, CyDex will reimburse Proteolix for the documented, reasonable costs associated with the destruction or return of the rejected CAPTISOL.            (e) Refund or Replacement. Proteolix shall not be required to pay any invoice with respect to any shipment of CAPTISOL properly rejected pursuant to this Section 3.5 . Notwithstanding the foregoing, Proteolix shall be obligated to pay in full for any rejected shipment of CAPTISOL that is subsequently determined to meet the Specifications in accordance with Section 3.5(c) , irrespective of whether Proteolix has already paid CyDex for a replacement shipment. If Proteolix pays in full for a shipment of CAPTISOL and subsequently  

     

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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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properly rejects such shipment in accordance with this Section 3.5 , Proteolix shall be entitled, upon confirmation that such shipment failed to meet the Specifications in all material respects, either: (i) to a refund or credit equal to the purchase price paid with respect to such rejected shipment; or (ii) to require CyDex to replace such rejected shipment at no additional cost to Proteolix. Proteolix acknowledges and agrees that, except for the indemnification obligations set forth in Section 10 below, Proteolix’ rights to a refund or credit for or to receive replacement of properly rejected shipments of CAPTISOL hereunder shall be Proteolix’ sole and exclusive remedy, and CyDex’ sole obligation, with respect to non-conforming CAPTISOL delivered hereunder.            (f) Exceptions. Proteolix’ rights of rejection, return, refund and replacement set forth in this Section 3.5 shall not apply to any CAPTISOL that is non-conforming due to damage caused by Proteolix, its Affiliates or Sublicensees or their respective employees or agents, including but not limited to, misuse, neglect, improper storage, transportation or use beyond any dating provided.       3.6 Facilities and Inspections. Without limiting CyDex’ responsibility under this Agreement, CyDex shall have the right at any time to satisfy its supply obligations to Proteolix hereunder either in whole or in part through arrangements with third parties engaged to perform services or supply facilities or goods in connection with the manufacture or testing of CAPTISOL (each, a " Third-Party Manufacturer "). CyDex shall give Proteolix prior written notice of any such arrangement. CyDex shall permit no more than [ ** ] of Proteolix’ authorized representatives, during normal working hours and upon reasonable prior notice to CyDex but in no event less than [ ** ] days prior notice, to inspect that portion of all CyDex facilities utilized for the manufacture, preparation, processing, storage or quality control of CAPTISOL or such facilities of any Third-Party Manufacturer, no more frequently than [ ** ] per calendar year. Notwithstanding the foregoing, CyDex agrees to reasonably cooperate, and shall require any Third-Party Manufacturer to reasonably cooperate, with all regulatory authorities and shall submit to reasonable CAPTISOL-related inspections by such authorities. With respect to inspection of the facilities of a Third Party Manufacturer by Proteolix, its Affiliates or Sublicensees, Proteolix shall be responsible for any reasonable fees charged by CyDex’ Third Party Manufacturer in connection with such inspections (as of the Effective Date, [ ** ] Dollars [ ** ] per person per day). Proteolix’ authorized representatives shall be accompanied by CyDex personnel at all times, shall be qualified to conduct such manufacturing audits, shall comply with all applicable rules and regulations relating to facility security, health and safety, and shall execute a written confidentiality agreement with terms at least as restrictive as those set forth in Section 8 (Confidentiality) hereof. In no event shall any such manufacturing audit exceed [ ** ] days in duration. Proteolix shall ensure that its authorized representatives conduct each manufacturing audit in such a manner as to not interfere with the normal and ordinary operation of CyDex or its Third-Party Manufacturer. Except as expressly set forth in this Section 3.6 , neither Proteolix nor its Affiliates, sublicensees or their respective employees or representatives shall have access to CyDex’ facilities or the facilities of any Third-Party Manufacturer.  

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

10.




 

      3.7 Inability to Supply.            (a) Notice. CyDex shall notify Proteolix if CyDex is unable to supply the quantity of (i) Commercial Grade CAPTISOL ordered by Proteolix in accordance with the Purchase Volume Limitations set forth in Section 3.2(c) or (ii) Research Grade CAPTISOL or Clinical Grade CAPTISOL ordered by Proteolix as set forth in Section 3.2(d) above: (1) within [ ** ] days after CyDex’ receipt of a purchase order from Proteolix as provided in Section 3.2(d) ; or (2) immediately upon becoming aware of an event of force majeure or any other event that would render CyDex unable to supply to Proteolix the quantity of CAPTISOL that CyDex is required to supply hereunder.            (b) Allocation. If CyDex is unable to supply to Proteolix the quantity of CAPTISOL that CyDex is required to supply hereunder, CyDex (i) shall allocate its available CAPTISOL among Proteolix and any other purchasers of CAPTISOL with which CyDex then has an on-going contractual relationship, in proportion to the quantity of CAPTISOL for which each of them has orders pending at such time and (ii) shall take all reasonable steps necessary to minimize supply delays.            (c) Right to Manufacture. If CyDex is not able to supply CAPTISOL to Proteolix which meets Specifications or in the quantity requirements for CAPTISOL ordered in accordance with this Section 3 , Proteolix shall be entitled to manufacture CAPTISOL but only for Proteolix’ clinical use, marketing, sale and distribution of the Product. Notwithstanding the above, Proteolix may exercise such right to manufacture CAPTISOL only if (i) CyDex’ inability to supply CAPTISOL could reasonably be expected to result in a period of time during which no CAPTISOL would be available to Proteolix for the clinical use, marketing, sale and distribution of the Product, (ii) there is no reason to believe that CyDex would be able to re-start manufacture of CAPTISOL more quickly than Proteolix or Proteolix’ designee could start manufacture of CAPTISOL, and (iii) CyDex’ inability to supply CAPTISOL did not result, wholly or in part, from factors within the control of CyDex. 4. Compensation.       4.1 Payments and Royalties for Licenses.            (a) One-Time Fee. Proteolix shall pay to CyDex a [ ** ] one-time fee of [ ** ] dollars ($ [ ** ] ) in partial consideration of the rights granted Proteolix under this Agreement, which amount shall be due and payable in full upon the Effective Date.            (b) Milestone Payments. Pursuant to Section 5.2(a) , written notice of each of the milestone events listed below with respect to the Product shall be provided to CyDex, and within [ ** ] days after such written notice of each of the milestone events, Proteolix shall pay to CyDex the applicable non-refundable milestone fee listed next to each such event in further consideration of the rights granted Proteolix hereunder. The milestone payments are as follows:

 

 

 

Milestone

 

Milestone Payment

[ ** ]

 

[ ** ]

 

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

11.




 

 

 

 

Milestone

 

Milestone Payment

[ ** ]

 

[ ** ]

[ ** ]

 

[ ** ]

[ ** ]

 

[ ** ]

[ ** ]

 

[ ** ]

[ ** ]

 

[ ** ]

Upon first achievement of [ ** ] in annual Net Sales of Product

 

[ ** ]

Upon first achievement of [ ** ] in annual Net Sales of Product

 

[ ** ]

Upon first achievement of [ ** ] in annual Net Sales of Product

 

[ ** ]

           (c) Royalties.                 (i)  In addition to amounts payable pursuant to Sections 4.1(a) and 4.1(b) above, Proteolix shall make royalty payments to CyDex on a calendar quarterly basis, in an amount equal to the appropriate royalty rate, according to the following rate schedule, to the applicable Net Sales during such quarter arising from the sale of the Product in the Territory. All royalties payable to CyDex pursuant to this Section 4.1(c)(i) shall be due and payable within [ ** ] days after receipt of the Quarterly Report as set forth in Section 5.2(a) .

 

 

 

Aggregate Net Sales in

 

 

Each Calendar Year

 

Royalty Rate

Up to, and including, [ ** ]

 

[ ** ]

[ ** ] to [ ** ]

 

[ ** ]

[ ** ] to [ ** ]

 

[ ** ]

Above [ ** ]

 

[ ** ]

For clarity, the royalty rates set forth above in Section 4.1(c) shall be applied to the total Net Sales of Product falling within the applicable range of aggregate annual Net Sales during the quarter. For example, if at the end of the first quarter of a particular calendar year, aggregate Net Sales of such Product was [ ** ] , then sales representing the first [ ** ] in such first quarter would be subject to the [ ** ] royalty rate and the remaining [ ** ] would be subject to the [ ** ] royalty rate under Section 4.1(c) . In subsequent quarters of the same calendar year, all sales of Product would be subject to the [ ** ] royalty rate until total aggregate sales of Product in such calendar year reached [ ** ] , at which point all further sales of Product up to [ ** ] would be subject to the [ ** ] royalty rate. For aggregate sales exceeding [ ** ] in the same calendar year, such sales of Product would be subject to the [ ** ] royalty rate.  

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

12.




 

                (ii)  The obligation of Proteolix to pay royalties to CyDex under this Section 4.1(c) shall commence on the first Commercial Launch Date of the Product in the Field in the Territory and continue, on a country-by-country basis, (1) until the expiration of the last to expire patent within the Licensed Patents in such country, and (2) after the period described in (1), a period of [ ** ] years with royalties to be calculated on aggregate annual Net Sales at a rate equal to [ ** ] percent [ ** ] of the royalty rates set forth in Section 4.1(c)(i) above. Thereafter, Proteolix shall have a paid up, royalty-free license with respect to the Product in the Field.       4.2 Pricing for CAPTISOL.            (a) Pricing. The purchase prices for CAPTISOL are as specified in Exhibit C attached hereto. CyDex reserves the right to increase the purchase prices set forth on Exhibit C on each January 1 during the Term, by written notice to Proteolix, by a percentage equal to the aggregate percentage increase, if any, in the Producer Price Index PCU325412 (Pharmaceutical preparations) as reported by the Bureau of Labor Statistics, U.S. Department of Labor, for the twelve (12) month period ending October 31 of the prior year. If Proteolix fails to place a firm purchase order for any Q1 for a quantity of Commercial Grade CAPTISOL to be delivered during such Q1 equal to or greater than the quantity of Commercial Grade CAPTISOL Proteolix is obligated to purchase pursuant to the applicable Detailed Forecast, allowing for the variances as defined in Section 3.2(c) , CyDex may adjust the purchase price of Commercial Grade CAPTISOL ordered under this Agreement so as to permit CyDex to recover all reasonable costs and expenses incurred by CyDex in reliance upon Proteolix’ binding obligation, including but not limited to the costs of the raw materials and supplies of CAPTISOL acquired or used in contemplation of fulfilling such order.            (b) Invoicing; Payment. CyDex shall invoice Proteolix upon shipment of each order of CAPTISOL. All invoices shall be sent to the address specified in the applicable purchase order, and each invoice shall state the purchase price for CAPTISOL in such shipment, plus any insurance, taxes, shipping costs or other costs incidental to such purchase or shipment initially paid by CyDex but to be borne by Proteolix hereunder; provided, however , that if such insurance, taxes, shipping costs or other costs incidental to such purchase or shipment initially paid by CyDex but to be borne by Proteolix are not known at the time CyDex invoices Proteolix for the purchase price for the CAPTISOL ordered by Proteolix, CyDex may invoice such costs at a later date. Payment of such invoices shall be made within [ ** ] days after the date of delivery of such invoice pursuant to Section 14.7 .       4.3 Currency. All amounts due hereunder are stated in, and shall be paid in, U.S. dollars. Net Sales based on foreign revenue will be converted to U.S. dollars at the rate of exchange published in The Wall Street Journal , Eastern U.S. Edition on the last day of each calendar quarter. Proteolix shall provide CyDex, together with each royalty payment owed pursuant to Section 4.1(c) above, a schedule detailing the calculation of Net Sales resulting from the conversion of foreign revenue to U.S. dollars as set forth herein.       4.4 Taxes. All amounts due hereunder exclude all applicable sales, use, and other taxes, and Proteolix will be responsible for payment of all such taxes (other than taxes based on CyDex’ income), fees, duties, and charges, and any related penalties and interest, arising from  

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

13.




 

the payment of amounts due hereunder or the sublicense or license, as the case may be, under the Licensed Patents hereunder. Proteolix shall make all payments to CyDex hereunder free and clear of, and without reduction for, any withholding taxes; any such taxes imposed on payments of amounts to CyDex hereunder will be Proteolix’ sole responsibility, and Proteolix will provide CyDex with official receipts issued by the appropriate taxing authority, or such other evidence as the CyDex may reasonably request, to establish that such taxes have been paid. Proteolix shall indemnify and hold CyDex harmless from any and all such taxes and any actions brought against CyDex by any taxing authority with respect to such taxes.       4.5 Late Payments. Unpaid balances shall accrue interest, from due date until paid, at a rate equal to the lesser of (a) the prime rate, as reported in The Wall Street Journal , Eastern U.S. Edition, on the date such payment is due, plus an additional [ ** ] percent [ ** ] or (b) the maximum rate permitted under applicable law. If any amount due hereunder and not subject to a reasonable, good-faith dispute by Proteolix remains outstanding for more than [ ** ] days after its due date, CyDex may, in addition to any other rights or remedies it may have, refuse to ship CAPTISOL hereunder except upon payment by Proteolix in advance. 5. Records; Reports; Audit.       5.1 Records. During the Term and for a period of [ ** ] years thereafter, Proteolix shall, and shall require its Affiliates and Sublicensees to, maintain complete and accurate records relating to (a) subject enrollment in clinical studies for the Product; (b) the achievement of each of the milestone events set forth in Section 4.1(b) above; and (c) Net Sales of Product.       5.2 Reports.            (a) Quarterly Reports. Within [ ** ] calendar days following the conclusion of each calendar quarter during the Term, Proteolix shall provide CyDex with a written report with respect to such calendar quarter that (i) indicates subject enrollment numbers during such calendar quarter with respect to clinical studies conducted by Proteolix, its Affiliates or Sublicensees for the Product; (ii) sets forth the achievement of each of the milestone events set forth in Section 4.1(b) above during such calendar quarter whether achieved by Proteolix, its Affiliates and Sublicensees, and (iii) sets forth in reasonable detail complete and accurate records of Proteolix’, its Affiliates’ and Sublicensees’ Net Sales of the Product in the Territory during such calendar quarter.            (b) Annual Reports. Annually, by December 1st of each calendar year during the Term, Proteolix shall provide CyDex with a written report that: (i) sets forth the achievement of each of the milestone events set forth in Section 4.1(b) above during such calendar year whether achieved by Proteolix, its Affiliates or Sublicensees; (ii) sets forth Proteolix’ anticipated requirements of CAPITSOL for preclinical and clinical use during the next calendar year; (iii) sets forth in reasonable detail complete and accurate records of Proteolix’, its Affiliates’ and Sublicensees’ Net Sales of the Product in the Territory during such calendar year.       5.3 Audit. During the Term and for a period of [ ** ] years thereafter, CyDex shall have the right, during normal business hours and upon reasonable notice but no more often than [ ** ] per year, to inspect and audit Proteolix’, its Affiliates’ and Sublicensees’ records relevant to  

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

14.




 

Net Sales. The costs of such audits shall be borne solely by CyDex; provided, however , that in the event such an audit reveals an underpayment by Proteolix of royalties owed hereunder of more than [ ** ] percent [ ** ] , Proteolix shall immediately (i) pay CyDex all amounts by which Proteolix has underpaid CyDex as revealed by the audit, plus interest accrued thereon (from the applicable original due date) at the rate set forth in Section 4.5 above and (ii) reimburse CyDex for the costs of such audit. In the event such an audit reveals an overpayment by Proteolix of royalties owed hereunder, CyDex shall immediately credit all amounts by which Proteolix has overpaid CyDex as revealed by the audit against any amounts owed by Proteolix to CyDex in the next payment period. All information concerning royalty payments and reports, and any information learned in the course of any audit or inspection under this Section 5.3 , shall be deemed to be Confidential Information of Proteolix, subject to the terms and provisions of Section 8 (Confidentiality) below, except to the extent necessary for CyDex to enforce its rights under this Agreement. 6. Development and Commercialization by Proteolix.       6.1 Diligence. Proteolix agrees that, during the Term, it will use, and shall require its Affiliates and Sublicensees to use, commercially reasonable efforts to conduct clinical development of the Product, to obtain Marketing Approval in the United States, Japan and the European Union, and to market, promote, and sell the Product thereafter in each country in which Marketing Approval is obtained, in an effort to maximize Net Sales and, thus, royalties payable under this Agreement.       6.2 Costs and Expenses. Proteolix shall be solely responsible for all costs and expenses related to its development and commercialization of the Product, including without limitation costs and expenses associated with all preclinical activities and clinical trials, and all regulatory filings and proceedings relating to the Product.       6.3 Preclinical In Vivo Studies. If Proteolix wishes to conduct any preclinical in vivo study utilizing CAPTISOL (administered alone or in conjunction with the Compound) at doses greater than those set forth in Exhibit D , Proteolix shall notify CyDex of any such study and of the protocol therefor in writing at least [ ** ] days prior to commencing such study. If CyDex determines in its reasonable good faith determination that such study would materially adversely affect a product utilizing CAPTISOL, CyDex shall notify Proteolix within [ ** ] days after receipt of such notice and protocol from Proteolix, and the parties shall discuss and attempt to resolve the matter in good faith. If the parties cannot resolve such matter within [ ** ] days after CyDex notifies Proteolix of such determination, then the dispute shall be presented to the chief executive officer of each party, or his or her respective designee, for resolution. If the parties’ chief executive officers, or their respective designees, cannot resolve the dispute within [ ** ] days after being requested by a party to resolve such dispute, either party may initiate a short-form arbitration proceeding pursuant to Section 14.4(b) (Short-Form Arbitration) below. If CyDex determines in its reasonable good faith determination that such study would not materially adversely affect a product utilizing CAPTISOL, CyDex shall notify Proteolix within [ ** ] days following receipt of Proteolix’ notice. Proteolix agrees to (a) immediately inform CyDex if any adverse effects are observed and ascribed to CAPTISOL in any study conducted  

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

15.




 

under this Section 6.3 , and (b) provide CyDex with copies of the final and full reports of all studies conducted under this Section 6.3 , promptly upon completion thereof.       6.4 Right of Reference. Proteolix shall have the right to reference the DMF solely in connection with Proteolix’ regulatory filings submitted in connection with obtaining Marketing Approval for the Product.       6.5 Access to Proteolix’ Data. CyDex shall have the right to reference and utilize all toxicology/safety and other relevant scientific data developed on CAPTISOL alone (and not in conjunction with a product formulation) by Proteolix, its Sublicensees or Affiliates in connection with CyDex’ development and commercialization of CAPTISOL, at no cost to CyDex. Upon request by CyDex, Proteolix shall either provide CyDex with a copy of all such data or shall make such data accessible to CyDex at such times and locations mutually agreed upon by the parties. 7. Regulatory Matters.       7.1 CAPTISOL Information Submitted for Regulatory Review. Except as otherwise set forth herein, Proteolix shall be solely responsible for all communications with regulatory agencies in connection with the Product. Notwithstanding the foregoing, Proteolix shall provide CyDex with copies of the portions of all regulatory submissions containing CAPTISOL data alone (and not in conjunction with any product formulation) [ ** ] days prior to submission and shall allow CyDex to review and comment upon said submissions. If CyDex determines in its reasonable good faith determination that any such submission would materially adversely affect a product utilizing CAPTISOL, CyDex shall notify Proteolix within [ ** ] days after receipt of such submission, and the parties shall discuss and attempt to resolve the matter in good faith. If the parties cannot resolve such matter within [ ** ] days after CyDex notifies Proteolix of such a determination, then the dispute shall be presented to the chief executive officer of each party, or his or her respective designee, for resolution. If the parties’ chief executive officers, or their respective designees, cannot resolve the dispute within [ ** ] days after being requested by a party to resolve such dispute, either party may initiate a short-form arbitration proceeding pursuant to Section 14.4(b) below. Proteolix shall inform CyDex of meetings with the FDA (or other regulatory agencies in the Territory) regarding the Product [ ** ] days prior to such event and shall allow CyDex to participate in any FDA (or other regulatory agency) review that might reasonably include inquiries regarding CAPTISOL. If Proteolix submits written responses to the FDA that include data on CAPTISOL alone, CyDex shall be permitted to review such written materials prior to submission. If CyDex reasonably objects to the contents of such written responses relating to CAPTISOL, the parties agree to cooperate in working toward a reasonable and mutually agreeable response.       7.2 Material Safety. CyDex shall provide Proteolix, in writing, from time to time, with (a) relevant information currently known to it regarding handling precautions, toxicity and hazards with respect to CAPTISOL, and (b) the then-current material safety data sheet for CAPTISOL. Notwithstanding the foregoing or anything in this Agreement to the contrary, Proteolix is solely responsible for (i) use of all documentation provided by CyDex, including without limitation, use in any regulatory submission to the FDA or any other regulatory agency  

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

16.




 

in the Territory, (ii) document control and retention, and (iii) determining the suitability of any documentation provided by CyDex hereunder for use in any regulatory submission.       7.3 Adverse Event Reporting.            (a) Proteolix shall adhere, and shall require that its Affiliates, Sublicensees, co-marketers and distributors adhere, to all requirements of applicable law and regulations that relate to the reporting and investigation of any adverse event, including without limitation an unfavorable and unintended confirmed diagnosis, symptom, sign, syndrome or disease, whether or not considered CAPTISOL or Product-related, which occurs or worsens following administration of CAPTISOL or Product. Proteolix shall provide CyDex with copies of all reports of any such adverse event directly involving CAPTISOL that results in death, is life-threatening, requires or prolongs inpatient hospitalization, results in disability, congenital anomaly or is medically important ( i.e. , may require other medical or surgical intervention to prevent other serious criteria from occurring) which Proteolix has reason to believe are associated with CAPTISOL within [ ** ] business days following Proteolix’ (a) submission of any such report to any regulatory agency, or (b) receipt from its Sublicensee, co-marketer or distributor of any such report to any regulatory agency, as the case may be. Proteolix shall also advise CyDex regarding any proposed labeling or registration dossier changes affecting CAPTISOL. Reports from Proteolix shall be delivered to the attention of Vice President, Chief Scientific Officer, CyDex, with a copy to CEO, CyDex, at the address set forth in Section 14.7 (Notices). The parties shall mutually cooperate with regard to investigation of any such serious adverse event which is believed to be directly associated with CAPTISOL, whether experienced by Proteolix, CyDex or any other Affiliate, Sublicensee, co-marketer or distributor of CyDex or Proteolix.            (b) CyDex shall adhere, and shall require that its Affiliates, Sublicensees, co-marketers and distributors adhere, to all requirements of applicable law and regulations that relate to the reporting and investigation of any adverse event, including without limitation an unfavorable and unintended confirmed diagnosis, symptom, sign, syndrome or disease, whether or not considered CAPTISOL-related, which occurs or worsens following administration of CAPTISOL alone or upon administration of a CAPTISOL-enabled formulated product. CyDex shall provide Proteolix with copies of all reports, some content of which may be redacted solely to protect the confidential information of third parties, of any such adverse event directly involving CAPTISOL that results in death, is life-threatening, requires or prolongs inpatient hospitalization, results in disability, congenital anomaly or is medically important ( i.e. , may require other medical or surgical intervention to prevent other serious criteria from occurring) which CyDex has reason to believe are associated with CAPTISOL within [ ** ] business days following CyDex’ (a) submission of any such report to any regulatory agency, or (b) receipt from its Sublicensee, co-marketer or distributor of any such report to any regulatory agency, as the case may be. Reports from CyDex shall be delivered to the attention of Vice President of Development, Proteolix, with a copy to Chief Scientific Officer, Proteolix, at the address set forth in Section 14.7 (Notices). The parties shall mutually cooperate with regard to investigation of any such serious adverse event which is believed to be directly associated with CAPTISOL, whether experienced by Proteolix, CyDex or any other Affiliate, Sublicensee, co-marketer or distributor of CyDex or Proteolix. Such written notification to Proteolix as well as assistance  

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

17.




 

with any resulting investigation shall be provided in a manner such that no third party confidential information is compromised in doing so by either Proteolix or CyDex.       7.4 Product Recalls. If any CAPTISOL should be alleged or proven not to meet the Specifications, Proteolix shall notify CyDex immediately, and both parties shall cooperate fully regarding the investigation and disposition of any such matter. If Proteolix should deem it appropriate to recall any Product and such recall is due to the failure of CAPTISOL to conform to the relevant Specifications at the time of delivery by CyDex, then CyDex agrees, upon substantiation thereof, to bear all reasonable direct costs associated with said recall, including refund of the purchase price for such CAPTISOL and the actual cost of conducting the recall in accordance with the recall guidelines of the applicable governmental authority. Proteolix shall in all events be responsible for conducting any such recalls with respect to the Product and shall maintain records of all sales of Product and customers sufficient to adequately administer any such recall, for a period of [ ** ] years after expiration or termination of this Agreement. 8. Confidentiality.       8.1 Definition. Proteolix and CyDex each recognizes that during the Term, it may be necessary for a party (the " Disclosing Party ") to provide Confidential Information to the other party (the " Receiving Party ") that is highly valuable, the disclosure of which would be highly prejudicial to the Disclosing Party. The disclosure and use of Confidential Information will be governed by the provisions of this Section 8 . Neither Proteolix nor CyDex shall use the other’s Confidential Information except as expressly permitted in this Agreement. For purposes of this Agreement, " Confidential Information " means all information disclosed by the Disclosing Party to the Receiving Party and designated in writing by the Disclosing Party as "Confidential" (or equivalent), and all material disclosed orally which is declared to be confidential by the Disclosing Party at the time of such disclosure and confirmed in a writing marked as "Confidential" (or equivalent) and delivered to the Receiving Party within thirty (30) days after such disclosure, including but not limited to product specifications, data, know-how, formulations, product concepts, sample materials, business and technical information, financial data, batch records, trade secrets, processes, techniques, algorithms, programs, designs, drawings, and any other information related to a party’s present or future products, sales, suppliers, customers, employees, investors or business. Without limiting the generality of the foregoing, CyDex’ Confidential Information includes all materials provided as part of the CAPTISOL Data Package.       8.2 Obligation. The Receiving Party agrees that it will disclose the Disclosing Party’s Confidential Information to its own officers, employees, consultants and agents only if and to the extent necessary to carry out its responsibilities under this Agreement or in accordance with the exercise of its rights under this Agreement, and such disclosure shall be limited to the maximum extent possible consistent with such responsibilities and rights. The Receiving Party shall not disclose Confidential Information of the Disclosing Party to any third party without such Disclosing Party’s prior written consent, and any such disclosure to a third party shall be pursuant to the terms of a non-disclosure agreement no less restrictive than this Section 8 . The Receiving Party shall take such action to preserve the confidentiality of the Disclosing Party’s Confidential Information as it would customarily take to preserve the confidentiality of its own  

     

[ ** ] =

 

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

18.




 

Confidential Information (but in no event less than a reasonable standard of care). The Receiving Party, upon the Disclosing Party’s request, will return all of the Disclosing Party’s Confidential Information, including all copies and extracts of documents, within sixty (60) days of the request, and in any event, promptly following the expiration or termination of this Agreement; provided, however ; that each party may retain one archival copy of such Confidential Information solely to be able to monitor its obligations that survive under this Agreement.       8.3 Exceptions. The use and non-disclosure obligations set forth in this Section 8 shall not apply to any Confidential Information, or portion thereof, that the Receiving Party can demonstrate:                 (i) at the time of disclosure is in the public domain;                 (ii) after disclosure, becomes part of the public domain, by publication or otherwise, through no fau

   
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