|
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE
OMISSIONS
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PRODUCT LICENSE AND ASSIGNMENT AGREEMENT
Dated as of October 11, 2006
By and Among
CYTOGEN CORPORATION
(a Delaware corporation),
INPHARMA AS
(a Norwegian company)
and
INPHARMA INC.
(a Delaware corporation)
----------------------------------------------------------------------------
<PAGE>
Inpharma Disclosure Schedule
----------------------------
Section 1.44 Estimated Inventory
Section 1.49 Licensed Intellectual Property
Section 1.50 Licensed Patents
Section 1.52 Marketing Materials
Section 1.67 Regulatory Approvals
Section 1.71 Territory Trademarks
Section 2.02 Inventory Unit Price
Section 4.03 Consents and Approvals
Section 4.05 Litigation
Section 4.06 Compliance with Law
Section 4.07 Regulatory Matters
Section 4.08 Brokers
Section 4.09(a) Intellectual Property - Patents and Product
Trademarks
Section 4.09(b) Intellectual Property -- Contracts
Section 4.10(a) Title
Section 4.12 Financial Information
Section 4.13 No Adverse Effect
Cytogen Disclosure Schedule
---------------------------
Section 5.03 Consents and Approvals
Section 5.05 Litigation
Section 5.06 Brokers
Section 5.07 No Adverse Effect
Exhibits
--------
A Form of Press Release
B Trademark Assignment
C Domain Name Assignment Agreement
D Books and Records
<PAGE>
PRODUCT LICENSE AND ASSIGNMENT AGREEMENT
This Product License and Assignment Agreement (this "Agreement")
is made
---------
and entered into as of October 11, 2006 (the "Effective Date"),
by and among
---------------
CYTOGEN CORPORATION, a Delaware corporation having an address at
650 College
Road East, Suite 3100, Princeton, New Jersey 08540, United
States ("Cytogen"),
-------
INPHARMA AS, a Norwegian company having an address at Pb 2030
(Konnerudgt. 27),
3003 Drammen, Norway ("Inpharma Norway"), and INPHARMA, INC., a
Delaware
----------------
corporation having an address at 101 Federal Street, Suite 1900,
Boston,
Massachusetts 02110 ("Inpharma USA," together with Inpharma
Norway, "Inpharma").
------------ --------
RECITALS
--------
WHEREAS, Inpharma Norway and Inpharma USA are engaged in the
development,
import, manufacture, use, marketing, distribution, sale and
commercialization of
the Product (as defined below);
WHEREAS, upon the terms and subject to the conditions of this
Agreement,
Inpharma desires to sell or license to Cytogen, and Cytogen
desires to purchase
or license from Inpharma, certain of the assets, tangible and
intangible,
associated with the development, import, manufacture, use,
marketing,
distribution, sale and commercialization of the Product in North
America, and in
addition Inpharma desires to grant, and Cytogen wishes to
acquire, an option to
purchase or license from Inpharma equivalent assets and rights
for the Product
in Europe and Asia; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants
and promises contained herein, and for other good and valuable
consideration,
the receipt and sufficiency of which hereby are acknowledged,
the Parties agree
as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following defined terms have the
meanings
described below:
Section 1.01 "Action or Proceeding" means any cause of action,
suit,
----------------------
proceeding, arbitration, Order, inquiry, hearing, assessment
with respect to
fines or penalties or litigation (whether civil, criminal,
administrative,
investigative or informal) commenced, brought, conducted or
heard by or before,
or otherwise involving, any Governmental or Regulatory
Authority.
Section 1.02 "Actual Inventory Value" has the meaning set forth
in Section
----------------------
2.02 (c).
Section 1.03 "Adverse Events" shall mean all deaths, serious
injuries and
--------------
malfunctions, as defined in United States Food and Drug
Administration
Regulations at 21 C.F.R. Part 803,
1
<PAGE>
and all events required to be reported under comparable legal or
regulatory
requirements to non-U.S. governmental authorities.
Section 1.04 "Affiliate" means, with respect to any Person,
another Person
---------
that directly, or indirectly through one or more intermediaries,
controls, is
controlled by or is under common control with such Person.
"Control" and, with
correlative meanings, the terms "controlled by" and "under
common control with,"
means the power to direct or cause the direction of the
management or policies
of a Person, whether through the ownership of voting securities,
by contract,
resolution, regulation or otherwise.
Section 1.05 "Agreement" has the meaning set forth in the
Preamble
---------
hereto.
Section 1.06 "Assets" means all assets and properties of any
kind, nature,
------
character and description (whether real, personal or mixed,
whether tangible or
intangible, whether absolute, accrued, contingent, fixed or
otherwise and
wherever situated), including the goodwill related thereto,
operated, owned or
leased by such Person, including documents, instruments, general
intangibles and
Intellectual Property.
Section 1.07 "Books and Records" means copies of all files,
documents,
------------------
instruments, papers, books and records of Inpharma or its
Affiliates directly
related to the Product, as identified in the document list
attached as Exhibit
-------
D.
-
Section 1.08 "Business Day" means a day other than Saturday,
Sunday or any
------------
day on which banks located in New York are authorized or
obligated to close.
Section 1.09 "CalPhos Mouth Rinse" means a formulation that:
[**].
-------------------
Section 1.10 "cGMPs" means current Good Manufacturing Practices,
as set
-----
forth in C.F.R. Parts 210 and 211.
Section 1.11 "Chargeback" means a credit, chargeback,
reimbursement,
----------
purchase discount or other payment required to be made to any
pharmaceutical
wholesaler or distributor in connection with the sale of a
Product (other than a
Product bearing Cytogen's Product Registration Number) by such
wholesaler or
distributor to a customer at a discount price pursuant to a
Contract between
such customer, on the one hand, and Inpharma, Cytogen or their
respective
Affiliates, on the other hand, or pursuant to the FSS or Section
340B of the
Public Health Services Act. For clarity, Chargeback shall not
include Rebate (as
defined below).
2
<PAGE>
Section 1.12 "Competitor" means a third party having [**].
----------
Section 1.13 "Contract" means any and all legally binding
commitments,
--------
contracts, purchase orders, leases, licenses, security
agreements or other
agreements, whether written or oral.
Section 1.14 "Customer Lists" means all past and current
customer and
---------------
potential customer lists of the Product for the Initial
Territory and Option
Territories (to the extent applicable).
Section 1.15 "Cytogen Disclosure Schedule" has the meaning set
forth in
----------------------------
the preamble to Article V of this Agreement.
Section 1.16 "Cytogen Governmental Consents" has the meaning set
forth in
-----------------------------
Section 5.03.
Section 1.17 "Cytogen Indemnified Parties" has the meaning set
forth in
---------------------------
Section 7.02(b).
Section 1.18 "Cytogen Labeled Product" shall mean Product sold
or
--------------------------
distributed for the Initial Territory and Option Territories (to
the extent
applicable) after the Effective Date by or on behalf of
Cytogen.
Section 1.19 "Damages" has the meaning set forth in Section
7.02(a).
-------
Section 1.20 "Encumbrance" means any mortgage, pledge,
assessment,
-----------
security interest, deed of trust, lease, lien, adverse claim,
levy, charge, or
any other third party right of any kind, or any conditional sale
or title
retention agreement or other agreement to give any of the
foregoing in the
future.
Section 1.21 "Estimated Inventory Value" has the meaning set
forth in
---------------------------
Section 2.02(c).
Section 1.22 "Excluded Assets" means all Assets of Inpharma and
its
----------------
Affiliates except the Purchased Assets.
Section 1.23 "Excluded Liabilities" means all Liabilities of
Inpharma and
--------------------
its Affiliates.
Section 1.24 "Expiration Date" means the date [**] after the
Effective
----------------
Date.
3
<PAGE>
Section 1.25 "Exploit" means to develop, have developed, import,
have
-------
imported, manufacture, have manufactured, use, have used,
market, have marketed,
distribute, have distributed, sell, have sold and otherwise
commercialize.
Section 1.26 "FDA" means the United States Food and Drug
Administration,
---
and any successor thereto, and all foreign equivalents.
Section 1.27 "FFDCA" means the Federal Food, Drug, and Cosmetic
Act, as
-----
amended.
Section 1.28 "Financial Information" has the meaning set forth
in Section
----------------------
4.12.
Section 1.29 "Finished Goods" means a manufactured Product
packaged,
---------------
tested, released and ready for sale to the ultimate
customer.
Section 1.30 "First Commercial Sale" means [**], which the
parties have
-----------------------
agreed is the deemed date of first commercial sale of the
Product.
Section 1.31 "Generic Caphosol" means a formulation that:
[**].
----------------
Section 1.32 "Governmental or Regulatory Authority" means any
court,
---------------------------------------
tribunal, arbitrator, authority, agency, commission, official or
other
instrumentality of the United States or other country, or any
supra-national
organization, state, county, city or other political
subdivision.
Section 1.33 "Indemnification Claim Notice" has the meaning set
forth in
------------------------------
Section 7.02(c).
Section 1.34 "Indemnified Parties" has the meaning set forth in
Section
--------------------
7.02(b).
Section 1.35 "Indemnifying Party" has the meaning set forth in
Section
-------------------
7.02(c).
Section 1.36 "Independent Accounting Firm" has the meaning set
forth in
-----------------------------
Section 2.02(c).
Section 1.37 "Initial Territory" means North America.
-----------------
Section 1.38 "Inpharma" has the meaning set forth in the
Preamble to this
--------
Agreement.
4
<PAGE>
Section 1.39 "Inpharma Disclosure Schedule" has the meaning set
forth in
------------------------------
the preamble to Article IV of this Agreement.
Section 1.40 "Inpharma Indemnified Parties" has the meaning set
forth in
------------------------------
Section 7.02(a).
Section 1.41 "Inpharma Labeled Product" shall mean Product sold
or
--------------------------
distributed prior to Effective Date by or on behalf of Inpharma,
and any Product
retained, sold or distributed by or on behalf of Inpharma
following the
Effective Date, including Product sold or distributed by or on
behalf of
Inpharma in Other Territories after the Effective Date.
Section 1.42 "Intellectual Property" means all (a) Patents, (b)
Know-How
----------------------
and (c) copyrights in works of authorship of any type, (d)
trademarks, service
marks, and trade names, and (e) domain names.
Section 1.43 "Inventors" shall mean the inventors listed on the
Licensed
---------
Patents.
Section 1.44 "Inventory" or "Inventories" mean that portion of
Inpharma
--------- -----------
Norway's on hand inventories of Finished Goods not previously
rejected, in
sellable condition as determined by Cytogen, and [**]
immediately before the
Effective Date), with remaining product dating of not less than
[**] from the
Effective Date, together with the Books and Records relating to
such Finished
Goods, details of which are set forth on Section 1.44 of the
Inpharma Disclosure
Schedule.
Section 1.45 "Know-How" means any technical information (whether
patented,
--------
patentable or otherwise), including all product specifications,
processes,
product designs, plans, trade secrets, ideas, concepts,
manufacturing,
engineering and other manuals and drawings, standard operating
procedures, flow
diagrams, chemical, pharmacological, toxicological,
pharmaceutical, physical and
analytical, safety, efficacy, stability, quality assurance,
quality control and
clinical data, data, research records, compositions, annual
product reviews,
process validation reports, analytical method validation
reports, specifications
for stability trending and process controls, testing and
reference standards for
impurities in and degradation of products, technical data
packages, chemical and
physical characterizations, dissolution test methods and
results, formulations
for administration, clinical trial reports, regulatory
communications and
labeling and all other confidential or proprietary technical and
business
information, whether written or oral and in whatever format
kept.
Section 1.46 "Launch" or "Launched" means the first invoiced
commercial
------ --------
sale of the Generic Caphosol or CalPhos Month Rinse in a country
in the Initial
Territory following approval of the applicable Governmental or
Regulatory
Authority required for the Exploitation of such Generic Caphosol
or CalPhos
Month Rinse in such country.
Section 1.47 "Law" means any supranational, federal, state or
local law,
---
statute or ordinance, or any rule, regulation, or published
guidelines or
pronouncements having the effect of law promulgated by any
Governmental or
Regulatory Authority, including cGMPs.
5
<PAGE>
Section 1.48 "Liability" means any liability (whether known or
unknown,
---------
asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated
or unliquidated, and due or to become due), including any
liability for Taxes.
Section 1.49 "Licensed Intellectual Property" means all
Intellectual
--------------------------------
Property owned or controlled by Inpharma or any of its
Affiliates that is
necessary or currently used for the import, manufacture, use,
marketing or sale
of the Product, other than the Intellectual Property comprised
in the Purchased
Assets. For clarity, the Licensed Intellectual Property consists
of (a) the
Licensed Patents; and (b) any Know-How owned or controlled by
Inpharma at the
Effective Date that is used or useful for, or otherwise related
to, the
manufacturing, marketing or distribution of the Product. The
Licensed
Intellectual Property is further described in Section 1.49 of
the Inpharma
Disclosure Schedule.
Section 1.50 "Licensed Patents" means the Patents of the
Licensors (as
-----------------
defined below) described in Section 1.50 of the Inpharma
Disclosure Schedule.
Section 1.51 "Licensors" has the meaning set forth in Section
2.01(b).
---------
Section 1.52 "Marketing Materials" means all advertising,
promotional and
-------------------
training materials, web pages and literature owned by Inpharma
and used in
connection with the Exploitation of the Product in the
Territory, as described
in Section 1.52 of the Inpharma Disclosure Schedule.
Section 1.53 "Net Sales" means the total gross sales of the
Product in the
---------
Territory invoiced by Cytogen, its Affiliates or sublicensees
(other than
Inpharma and its Affiliates hereunder) to third parties, net of,
where
applicable, any deductions specifically related to a Product and
actually
allowed, incurred, paid, accrued or taken for [**].
If a Product is sold or offered for sale in combination with
other
products, the Net Sales allocated to the Product shall be
determined by
multiplying the [**]. If other products in the combination are
not sold
separately, the Net Sales from sales of such combined products
shall be
determined in a fair and equitable manner. For greater
certainty, the amount of
any [**].
6
<PAGE>
Section 1.54 "Option Territories" means Europe and/or Asia, as
applicable.
------------------
Section 1.55 "Order" means any writ, judgment, decree,
injunction or
-----
similar order of any Governmental or Regulatory Authority (in
each such case
whether preliminary or final).
Section 1.56 "Other Territories" means all countries except
those
------------------
contained in the Territory.
Section 1.57 "Party" means either Cytogen or Inpharma, and
"Parties" means
-----
Cytogen, and Inpharma collectively.
Section 1.58 "Patents" means all existing patents and patent
applications
-------
and all patent applications hereafter filed, including any
continuations,
continuations-in-part, divisions, provisionals or any substitute
applications,
any patent issued with respect to any such patent applications,
any reissue,
reexamination, renewal or extension (including any supplementary
protection
certificate) of any such patent, and any confirmation patent or
registration
patent or patent of addition based on any such patent, and all
foreign
counterparts of any of the foregoing.
Section 1.59 "Permitted Encumbrance" means any Encumbrance for
Taxes not
----------------------
yet due or delinquent or for those Taxes being contested in good
faith by
appropriate proceedings for which adequate reserves have been
established that
individually or in the aggregate would not be material.
Section 1.60 "Person" means any natural person, corporation,
general
------
partnership, limited partnership, limited liability company,
proprietorship,
other business organization, trust, union, association or
Governmental or
Regulatory Authority.
Section 1.61 "Product" means any composition according to any
statement of
-------
invention set out in either or both of the Licensed Patents,
including without
limitation, a specially formulated mouth rinse, approved by the
FDA as a medical
device under FDA 510(k) K030802.
Section 1.62 "Product Registration Number" means the product
registration
----------------------------
number assigned after a clearance by the FDA of a pre-market
notification
submission for the Product as a medical device pursuant to
Section 510(k) of the
FFDCA, and applicable FDA rules and regulations.
Section 1.63 "Purchase Price" has the meaning set forth in
Section
---------------
3.01(b).
Section 1.64 "Purchased Assets" means: (i) the Territory
Trademarks; (ii)
----------------
the domain name www.caphosol.com; (iii) the Customer Lists, (iv)
the Books and
----------------
Records, (v) the Inventory, and (vi) the Marketing Materials
owned or controlled
by Inpharma at the Effective Date specifically used or useful
for the
manufacturing, marketing or distribution of the Product for the
Territory.
7
<PAGE>
Section 1.65 "Reasonable Best Efforts" means such prompt,
substantial and
------------------------
diligent efforts as a prudent Person desirous of achieving a
result would use in
similar circumstances; provided that the Parties shall be
required to expend
only such resources to achieve such result as are commercially
reasonable in
similar circumstances.
Section 1.66 "Rebate" means any rebate payable pursuant to (i)
state
------
Medicaid or other state and/or governmental pharmaceutical
assistance programs
and (ii) Contracts between Inpharma, Cytogen or their respective
Affiliates, on
the one hand, and managed care organizations (including pharmacy
benefit
management companies, health plans and insurance companies), on
the other hand,
in each case relating to utilization of the Product during any
particular
period.
Section 1.67 "Regulatory Approvals" means the approval of the
applicable
---------------------
Governmental or Regulatory Authority required for the
development, importation,
exportation, distribution, marketing, promotion and sale of the
Product in a
country, including, without limitation, those identified in
Section 1.67 of the
Inpharma Disclosure Schedule for the Product (including all
additions,
supplements, extensions and modifications thereto and the
official regulatory
files relating thereto).
Section 1.68 "Statement of Actual Inventory Value" has the
meaning set
--------------------------------------
forth in Section 2.02(c).
Section 1.69 "Tax" means all of the following taxes (with the
exception of
---
income taxes attributable to Cytogen or any of its Affiliates)
in connection
with the import, manufacture, use, marketing and sale of the
Product or the
transactions contemplated hereby: (i) any net income,
alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad
valorem, transfer,
franchise, profits, license, excise, severance, stamp,
occupation, premium,
property, environmental or windfall profit tax, custom, duty or
other tax,
governmental fee or other like assessment imposed by an
governmental, regulatory
or administrative entity or agency responsible for the
imposition of any such
tax; (ii) any Liability for the payment of any amounts of the
type described in
clause (i) above as a result of being a member of any
affiliated, consolidated,
combined, unitary or other group for any Taxable period; and
(iii) any Liability
for the payment of any amounts of the type described in clause
(i) or (ii) above
as a result of any express or implied obligation to indemnify
any other Person.
Section 1.70 "Territory" means (a) the Initial Territory; and
(b) any
---------
Option Territory in respect of which Cytogen exercises an option
pursuant to
Section 2.04, but only after Cytogen has exercised such
Option.
Section 1.71 "Territory Trademarks" means, with respect to the
Territory,
---------------------
the mark CAPHOSOL and all rights to own and use such marks in
the Territory on
or in connection with the Product, whether such rights are
registered or
unregistered, all registrations and applications for any of the
foregoing, all
extensions or renewals of any of the foregoing, and all of the
goodwill
connected with the use of and symbolized by the foregoing. The
trademarks for
the Initial Territory and Option Territory are identified in
Section 1.71 of
the Inpharma Disclosure Schedule.
8
<PAGE>
Section 1.72 "Third Party Claim" has the meaning set forth in
Section
-------------------
7.02(d).
Section 1.73 "Trademark Assignment" has the meaning set forth in
Section
---------------------
2.02(b).
Section 1.74 "Valid Claim" means a claim in any issued Patent
that has
------------
not been disclaimed or held unenforceable or invalid by a
decision of a court or
governmental agency of competent jurisdiction by a decision
beyond right of
review.
Section 1.75 "Year" means, with respect to the Initial Territory
or Option
----
Territory, any 12-month period following the First Commercial
Sale of the
Product in such Territory or any anniversary of such First
Commercial Sale.
Section 1.76 Construction of Certain Terms and Phrases.
Unless the context of this Agreement otherwise requires: (a)
words of any
gender include each other gender; (b) words using the singular
or plural number
also include the plural or singular number, respectively; (c)
the terms
"hereof," "herein," "hereby" and derivative or similar words
refer to this
entire Agreement; (d) the terms "Article", "Section" or
"Exhibit" refer to the
specified Article, Section or Exhibit of this Agreement; (e) the
term "or" has,
except where otherwise indicated, the inclusive meaning
represented by the
phrase "and/or"; (f) "Dollars" or "$" means United States
dollars; and (g) the
terms "including" and "includes" mean "including without
limitation" and
"includes without limitation," respectively. Whenever this
Agreement refers to a
number of days, such number shall refer to calendar days unless
Business Days
are specified.
ARTICLE II
LICENSE, ASSIGNMENT AND OPTION
Section 2.01 Licenses to Licensed Intellectual Property.
(a) Subject to the terms and conditions of this Agreement and
with
effect from the Effective Date, Inpharma hereby grants to
Cytogen a perpetual,
exclusive (even as to Inpharma), royalty- and fee-bearing right
and license,
under the Licensed Intellectual Property, to Exploit the Product
in the
Territory (the "License").
-------
(b) Except as may be permitted by separate agreement between
Cytogen
and the Licensors, the License to the Licensed Patents shall not
be sublicensed
by Cytogen without the prior written consent of the head
licensors, [**]
("Licensors"). Any such sublicense shall not require the consent
of Inpharma,
---------
but Cytogen shall provide written notice of such sublicense to
Inpharma. The
License to the remainder of the Licensed Intellectual Property
may be
sublicensed by Cytogen without consent of the Licensors or
Inpharma.
9
<PAGE>
(c) Cytogen shall mark the boxes of Products with the patent
numbers
applicable to such Products given the country in which such
Products are
distributed or sold.
(d) Notwithstanding anything to the contrary in this
Agreement,
Inpharma undertakes not to knowingly sell Product, or allow its
Affiliates to
sell Product, to any Person which Inpharma or its Affiliates has
reason to
believe intends to export such Product for sale in the
Territory.
Section 2.02 Purchase and Sale of Purchased Assets.
(a) Upon the terms and subject to the conditions of this
Agreement,
Inpharma hereby sell, assign, transfer, convey and deliver to
Cytogen, and
Cytogen purchases, acquires and accepts from Inpharma, all of
Inpharma's right,
title and interest, as at the Effective Date, in and to the
Purchased Assets,
free and clear of any Encumbrances.
(b) In furtherance of the purchase and sale set forth in
Section
2.02(a) above, the Parties have, as applicable, executed and
delivered the
Trademark Assignment attached at Exhibit B and the Domain Name
Assignment
--------------------- ------------------------
Agreement attached at Exhibit C.
---------
(c) Purchase of Inventory. On the Effective Date, Cytogen
shall
-----------------------
purchase the Inventories (approximately [**] of Product) at the
prices
calculated in accordance with Section 2.02 of the Inpharma
Disclosure Schedule
for an aggregate estimated amount of US [**] (the "Estimated
Inventory Value").
--------------------------
Inpharma shall make the Inventory available to Cytogen, at
Inpharma's
distribution facility located at the Norsk Medisinal Depot,
Oslo, Norway, on the
Effective Date. The Inventory shall be accompanied by Product
Release
Certificates reasonably acceptable in form and content to
Cytogen; Cytogen
acknowledges that it has received copies of such Product Release
Certificates
before the Effective Date and that such copies are reasonably
acceptable in form
and content to Cytogen. Inpharma shall bear all risk of loss for
the Inventory
until Cytogen's receipt of the Inventory, including, without
limitation, all
casualty losses and losses with the respect to or arising from
Inpharma's or its
agents' or representatives' handling or storage of the
Inventory. Inpharma is
retaining a portion of its on hand inventories of Finished Goods
located in
Norway, in excess of approximately [**], for distribution in the
Other
Territories. From and after the Effective Date, Inpharma shall
not sell, ship or
otherwise deliver the Inventory to any Person (other than
Cytogen as provided
for herein) without the mutual written consent of the Parties.
Cytogen shall pay
the Estimated Inventory Value in payment for the Inventories at
the Effective
Date by wire transfer of immediately available funds to an
account designated by
Inpharma (such designation to be made no later than three (3)
Business Days
prior to the Effective Date). The final actual inventory value
(the "Actual
------
Inventory Value") shall be finally determined as set forth
below, and a
----------------
reimbursement of any difference between the Actual Inventory
Value and the
Estimated Inventory Value shall be made to Inpharma or Cytogen,
as the case may
be, as follows:
(i) Within [**] following the Effective Date, Inpharma shall
examine its records to determine the quantities of Inventory
existing as of the
Effective Date and deliver a statement of Actual Inventory Value
(the "Statement
---------
of Actual Inventory Value") based upon such Inventory quantities
and the unit
---------------------------
prices set forth on Section 2.02 of the Inpharma Disclosure
Schedule.
10
<PAGE>
(ii) Cytogen may dispute any amounts reflected on the
Statement
of Actual Inventory Value, in writing, specifying the amount
thereof in dispute
and setting forth, in reasonable detail, the basis for such
dispute, within [**]
of Inpharma's delivery of the Statement of Actual Inventory
Value to Cytogen. In
the event of such a dispute, Cytogen and Inpharma shall attempt
to reconcile
their differences, and any resolution by them as to any disputed
amounts shall
be final, binding and conclusive on the Parties. If Inpharma and
Cytogen are
unable to resolve any such dispute within [**] after Cytogen's
delivery of its
notice of dispute to Inpharma, Cytogen and Inpharma shall submit
the items
remaining in dispute for resolution to a mutually acceptable
independent
accounting firm of national reputation (the "Independent
Accounting Firm"),
-----------------------------
which shall determine and report to Inpharma and Cytogen its
determination of
the payment obligation for such remaining disputed items, and
such report shall
be final, binding and conclusive on the Parties. The fees and
disbursements of
the Independent Accounting Firm shall be allocated to Cytogen in
the same
proportion as the aggregate amount of such remaining disputed
items so submitted
to the Independent Accounting Firm that is unsuccessfully
disputed by Cytogen
(as finally determined by the Independent Accounting Firm) bears
to the total
amount of such remaining disputed items so submitted, and the
balance shall be
paid by Inpharma. In acting under this Agreement, the
Independent Accounting
Firm shall be entitled to the privileges and immunities of
arbitrators. Inpharma
agrees to grant Cytogen and its representatives reasonable
access to Inpharma's
and its Affiliates' books and records wherever located in order
to verify the
Statement of Actual Inventory Value.
(d) Adjustment of Inventory Value; Reconciliation of Amounts.
The
------------------------------------------------------------
Statement of Actual Inventory Value shall be deemed final for
the purposes of
this Section 2.03 upon the earlier of (i) the failure of Cytogen
to notify
Inpharma of a dispute within [**] after Inpharma's delivery of
the Statement of
Actual Inventory Value to Cytogen or (ii) the resolution of all
disputes
pursuant to Section 2.02. Within [**] of the Statement of Actual
Inventory Value
being deemed final, a payment shall be made as follows:
(i) In the event that the amount of the Actual Inventory
Value
reflected on the Statement of Actual Inventory Value is less
than the Estimated
Inventory Value, then Inpharma shall pay an amount equal to such
difference to
an account designated by Cytogen by wire transfer in immediately
available
funds; or
(ii) In the event that the amount of the Actual Inventory
Value
reflected on the Statement of Actual Inventory Value exceeds the
Estimated
Inventory Value, then Cytogen shall pay an amount equal to such
excess to an
account designated by Inpharma by wire transfer in immediately
available funds.
Section 2.03 Transfer of Regulatory Approval.
On and promptly after the Effective Date (or the exercise of the
Options,
as applicable), Inpharma shall (a) use its Reasonable Best
Efforts to effect the
transfer of ownership of the Regulatory Approval for the
Territory to Cytogen,
including the filing with the FDA and any other relevant
Governmental or
Regulatory Authorities all information required in order to
transfer such
(including any authorization letters or notices, and letters of
acceptance)
Regulatory Approvals as set forth in Section 6.03, (b) provide
Cytogen a
complete copy of the 510(k) K030802 for the Product, including
all
correspondence with the FDA relating to such 510(k),
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and (c) de-list the Product from the medical device listing
files with the FDA
and use its Reasonable Best Efforts to assist Cytogen to file a
medical device
listing form for the Product with the FDA.
Section 2.04 Option
(a) Inpharma hereby grants to Cytogen the exclusive options to
acquire
the exclusive licenses to market, distribute, sell and otherwise
commercialize
the Product in each of Europe and Asia (the "Options"). The
Option for Europe
-------
and Asia shall be exercisable by Cytogen for [**] after the
Effective Date.
Cytogen may exercise any Option by delivering to Inpharma,
before expiration of
the Option: (a) written notice exercising the Option; and (b)
the exercise price
for the Option being exercised, as set forth in Section 3.04, by
wire transfer
of immediately available funds to an account designated by
Inpharma.
(b) On exercise of an Option for an Option Territory: (a)
such
territory shall for the purposes of this Agreement, including
without limitation
the License, become part of the "Territory"; (b) Inpharma shall
promptly assign
(or shall cause its Affiliates to assign) any Trademarks and
domain names for
the relevant Option Territory to Cytogen on the terms of
assignments
substantially in the form of Exhibit B and Exhibit C; (c) such
transaction shall
be made on the terms and conditions set forth in this Agreement;
and (d) the
representations and warranties of Inpharma in Article 4 hereof
shall speak as of
such transaction, provided that Inpharma shall be provided an
opportunity to
update the Inpharma Disclosure Schedule for any events occurring
after the
Effective Date.
Section 2.05 Reservation of Inpharma Rights
(a) Notwithstanding anything herein to the contrary, Cytogen
agrees
that Inpharma or its Affiliates may reference and/or use all
information and
data in the Regulatory Approval in the United States to obtain
and/or maintain
registration of Product and to manufacturer, market, sell
Product in Other
Territories.
(b) Notwithstanding anything contained in this Agreement to
the
contrary, from and after the Effective Date, Inpharma and its
Affiliates shall
retain all of their right, title and interest in and to the
Excluded Assets.
Except as expressly set forth herein, this Agreement does not
grant to Cytogen
any right, title, interest, ownership or license, by
implication, estoppel or
otherwise, to any Intellectual Property of Inpharma.
Section 2.06 Deliveries.
On the Effective Date, Inpharma shall deliver to Cytogen copies
of the
Marketing Materials and any Inpharma Governmental Consents and
Inpharma Third
Party Consents.
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ARTICLE III
FINANCIAL PROVISIONS
Section 3.01 Fees for License Issuance and Sale of Purchased
Assets.
(a) On the Effective Date, Cytogen shall (i) pay Inpharma [**]
by wire
transfer of immediately available funds to an account designated
by the Inpharma
(such designation to be made no later than three (3) Business
Days prior to the
Effective Date) (the "First Payment") and (ii) holdback an
amount equal to [**]
--------------
(the "Holdback") pursuant to Section 3.01(c) below to secure the
indemnification
--------
obligations of Inpharma set forth in this Agreement; and
(b) On the six month anniversary of the Effective Date, Cytogen
shall
pay Inpharma one million dollars ($1,000,000) by wire transfer
of immediately
available funds to an account designated by the Inpharma (such
designation to be
made no later than three (3) Business Days prior to such six
month anniversary)
(the "Second Payment," together with the First Payment and the
Holdback, the
---------------
"Purchase Price"). Within [**] after the Effective Date, Cytogen
shall provide
---------------
Inpharma a bank guarantee or letter of credit, in form and
substance reasonably
acceptable to Inpharma, guaranteeing the payment to Inpharma of
the Second
Payment; and
(c) Within [**] after the Effective Date, Cytogen shall deposit
the
Holdback amount in an escrow account mutually acceptable to the
parties, [**];
provided; however, that in the event the escrow account earns
annual interest at
less [**]. [**] of the Holdback amount (the "Initial Holdback")
will be released
----------------
and paid to Inpharma on the [**] of the Effective Date;
provided, that, if there
is a Cytogen indemnification claim pursuant to Section 7.02(a)
of this Agreement
that is then outstanding on such [**] date, then only the
portion of such
Initial Holdback in excess of such claim shall be released and
paid to Inpharma;
provided, further, that, if there is a Cytogen indemnification
claim pursuant to
Section 7.02(a) of this Agreement that is then outstanding on
such [**] date in
an amount equal to or greater than the Initial Holdback, then
such Initial
Holdback shall only be released and paid to Inpharma when such
Cytogen
indemnification claim is resolved pursuant to the terms of
Article VII of this
Agreement. The remaining Holdback amount, and any interest
earned on the
Holdback amount (the "Remaining Holdback"), if any, shall be
distributed to the
------------------
Inpharma on the [**] of the Effective Date; provided, that, if
there is a
Cytogen indemnification claim pursuant to Section 7.02(a) of
this Agreement that
is then outstanding on such [**] date, then only the portion of
such Remaining
Holdback in excess of such claim shall be released and paid to
Inpharma;
provided, further, that, if there is a Cytogen indemnification
claim pursuant to
Section 7.02(a) of this Agreement that is then outstanding on
such [**] date in
an amount equal to or greater than the Remaining Holdback, then
such Remaining
Holdback shall only be released and paid to Inpharma when such
Cytogen
indemnification claim is resolved pursuant to the terms of
Article VII of this
Agreement.
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<PAGE>
Section 3.02 License Milestone Payments.
(a) Cytogen shall pay Inpharma the following milestone
payments
("Milestone Payments") in partial consideration for the licenses
and rights
-------------------
granted for the Initial Territory:
(i) Cytogen shall make a one-time payment of [**] to
Inpharma
if Net Sales in calendar 2007 equal or exceed [**];
(ii) Cytogen shall make a one-time additional payment of [**]
to
Inpharma if and when Net Sales to third parties in the Initial
Territory in any
Year equal or exceed [**] for the first time; provided, however,
that this
milestone fee will be reduced by the amount of any milestone
payment made under
Section 3.02(a)(i) above;
(iii) Cytogen shall make a one-time additional payment of [**]
to
Inpharma if and when Net Sales to third parties in the Initial
Territory in any
Year equal or exceed [**] for the first time;
(iv) Cytogen shall make a one-time additional payment [**]
to
Inpharma if and when Net Sales to third parties in the Initial
Territory in any
Year equal or exceed [**] for the first time; and
(v) Cytogen shall make a one-time additional payment [**] to
Inpharma if and when Net Sales to third parties in the Initial
Territory in any
Year equal or exceed [**] for the first time.
(b) Each Milestone Payment set forth above is due within [**]
after
the end of the calendar quarter in which each milestone was
achieved. In the
event that two (2) sales milestone are reached in the same
calendar year (or
fiscal year for Cytogen if different from calendar year) the
second Milestone
Payment will be deferred for twelve (12) months from the date
the first such
Milestone Payment is paid, and no more than one (1) Milestone
Payment will be
paid in any given fiscal year.
Section 3.03 Royalties.
In addition to the Milestone Payments, Cytogen shall pay: (i) to
Inpharma,
a royalty of [**] of Net Sales in the Initial Territory (on a
country-by-country
basis) until the expiration date of the last Valid Claim of any
Licensed Patent;
and (ii) to the Licensors, a royalty of [**] of Net Sales, in
the Initial
Territory and any Option Territory for which Cytogen exercises
the Option (on a
country-by-country basis), until the expiration date of the last
Valid Claim of
any Licensed Patent. Inpharma shall pay any royalty amounts due
to the Licensors
in excess of the [**] set forth above.
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<PAGE>
Section 3.04 Option Payments.
Cytogen shall pay Inpharma the following consideration for the
Options
granted under Section 2.04(a):
(a) As consideration for the grant of the Option, on the
Effective
Date Cytogen shall pay Inpharma a fee of [**] (the "Upfront
Option Fee"). The
-------------------
exercise price for the option for Europe shall be [**], against
which [**] of
the Upfront Option Fee shall be credited. The exercise price for
the option for
Asia shall be [**], against which [**] of the Upfront Option Fee
shall be
credited. Cytogen may, at its sole discretion, exercise its
Option for either
Europe or Asia or both territories, and the fees set forth above
shall be
independent of each other.
(b) If Cytogen exercises any Option, future milestone payments
shall
be payable by Cytogen to Inpharma as follows:
(i) Cytogen shall make a one-time additional payment of [**]
to
Inpharma if and when Net Sales to third parties in Asia equal or
exceed [**] in
any Year for the first time;
(ii) Cytogen shall make a one-time additional payment of [**]
to
Inpharma if and when Net Sales to third parties in Asia reach
[**] in any Year
for a second time; and
(iii) Cytogen shall pay to Inpharma [**] of any upfront
license
fees and milestone payments (but not royalties) received by
Cytogen or its
Affiliates in consideration of the grant by Cytogen or its
Affiliates of the
license or equivalent right to Exploit the Product in any
country or countries
in Europe or Asia, to the extent such upfront license fees and
milestone
payments are in excess of the respective amounts paid by Cytogen
to Inpharma for
such rights pursuant to Section 3.04(a). For the purposes of
this payment
obligation, the term "upfront license fees" means [**].
Section 3.05 Reporting and Payment
Cytogen shall deliver to Inpharma, within [**] after the end of
each
calendar quarter after the Effective Date, reasonably detailed
written
accountings of Net Sales during such calendar quarter. Such
report shall
indicate Net Sales on a country-by-country basis, and the
calculation of the
payments to be made hereunder. When Cytogen delivers such
accountings, Cytogen
shall also deliver all payments due under this Agreement to
Inpharma for such
calendar quarter. All payments due shall be made in United
States dollars by
wire transfer to such bank account as Inpharma may
designate.
15
<PAGE>
Section 3.06 Recordkeeping and Audit.
Cytogen shall keep accurate and complete records of all matters
relevant to
its Exploitation of the Product, including records of all
charges and payments
relevant to the calculation of Net Sales under this Agreement.
Cytogen shall
maintain such records and copies during the term of this
Agreement and for no
less than [**] after its expiration or termination, and shall
allow
representatives of an independent accounting firm selected by
Inpharma and
reasonably acceptable to Cytogen to inspect and audit such
records (limited to
twice each calendar year) during normal business hours and on no
less than [**]
advance written notice. If an inspection and audit reveals that
Cytogen has any
understated amounts due by more than [**] for any given payment
period, Cytogen
shall bear Inpharma's costs of such inspection and audit.
Otherwise, Inpharma
shall bear all its own costs of such inspection and audit.
Cytogen shall not
levy any fee for allowing or facilitating an inspection and
audit pursuant to
this clause. Any information obtained by Inpharma and/or
representatives of the
independent accounting firm in connection with this provision
shall be protected
as "Confidential Information" of Cytogen.
Section 3.07 Payment of Sales, Currency Exchange, Use and Other
Taxes.
(a) Each Party shall be responsible for all sales, use,
transfer,
value added, gross receipts and other similar Taxes that it is
legally
responsible for, if any, arising out of the sale of the
Purchased Assets and
license of the Licensed Intellectual Property pursuant to this
Agreement.
(b) All undisputed payments due under this Agreement shall be
paid in
United States dollars by wire transfer to a bank designated in
writing by
Inpharma. For the purpose of Net Sales for Product sold in a
currency other than
United States dollars, Cytogen shall convert the amount of Net
Sales in foreign
currencies using the average exchange rate (as reported by
Reuters or other
reliable source of exchange rate information, as agreed to by
the parties) for
the quarter in which the sales occurred (in the case of royalty
payments) or for
the relevant time period for any other payments.
(c) If tax withholdings or assessments for taxes are required
under
the Law of any country with respect to payments to Inpharma,
Cytogen shall
withhold the required amount and pay it to the appropriate
Governmental or
Regulatory Authority, provided however that Cytogen shall
provide Inpharma
information with respect to such withholding so Inpharma may
claim the
appropriate tax credit. Cytogen shall not have an obligation to
pay the amount
of any such withholding to Inpharma to the extent paid by
Cytogen to the
applicable Governmental or Regulatory Authority. Cytogen shall
provide Inpharma
with evidence of such withholding and any other documents or
assistance
reasonably requested to allow Inpharma to claim any applicable
tax credits in
respect of such withholding.
Section 3.08 Milestones and Royalties Holdback. [**]:
[**].
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INPHARMA
Inpharma represents and warrants to Cytogen, subject to such
exceptions as
are specifically disclosed in the disclosure schedule
(referencing the
appropriate Sections hereof) supplied by Inpharma to Cytogen and
dated as of
Effective Date (the "Inpharma Disclosure Schedule"), which
Inpharma Disclosure
-----------------------------
Schedule shall be deemed to be representations and warranties of
Inpharma as if
made herein, as follows:
Section 4.01 Organization, Etc.
Inpharma Norway is a company duly organized, validly existing
and in good
standing under the laws of Norway and has all requisite power
and authority to
own its assets and carry on its business as currently conducted
by it. Inpharma
USA is a corporation duly organized, validly existing and in
good standing under
the laws of Delaware, United States and has all requisite power
and authority to
own its assets and carry on its business as currently conducted
by it. Inpharma
is duly qualified to conduct its business and is in good
standing in each
jurisdiction where such qualification is required, except for
any jurisdiction
where failure to so qualify would not materially adversely
affect the Purchased
Assets or Licensed Intellectual Property or materially impair or
delay
Inpharma's ability to perform its obligations hereunder.
Section 4.02 Authority of Inpharma.
Inpharma has all necessary power and authority to enter into
this Agreement
and to carry out the transactions contemplated hereby. The
execution, delivery
and performance by Inpharma of this Agreement have been duly and
validly
authorized and no additional corporate or shareholder
authorization or consent
is required in connection with the execution, delivery and
performance by
Inpharma of this Agreement. This Agreement has been duly and
validly executed
and delivered by Inpharma and, when executed and delivered by
Cytogen, will
constitute a legal, valid and binding obligation of Inpharma
enforceable against
it in accordance with its terms except (a) as limited by
applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application
affecting enforcement of creditors' rights generally, and (b) as
limited by Laws
relating to the availability of specific performance, injunctive
relief or other
equitable remedies.
17
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Section 4.03 Consents and Approvals.
(a) Section 4.03(a) of the Inpharma Disclosure Schedule sets
forth a
complete and accurate list of all consents, waivers, approvals,
Orders or
authorizations of, or registrations, declarations or filings
with, any
Governmental or Regulatory Authority that are required by or
with respect to
Inpharma or its Affiliates in connection with the execution
and
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