Note: Certain portions of this document have
been marked "[C.I.]"
to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and
filed separately
with the Sec1urities and Exchange
Commission.
EXHIBIT 10(b.2)
TERMINATION AND TRANSFER AGREEMENT
THIS
TERMINATION AND TRANSFER AGREEMENT dated as of February 24, 2004
(the
"Effective Date"), is made by and between DUSA PHARMACEUTICALS, INC., a
corporation organized and existing under the laws of the State of New
Jersey,
having offices at 25 Upton Drive, Wilmington, Massachusetts 01887 U.S.A.
("DUSA") and DRAXIS HEALTH INC., a
corporation organized
and existing under the
laws of Canada, having offices at 6870 Goreway
Drive, Suite 200,
Mississauga,
Ontario L4V 1P1 Canada ("Draxis").
PRELIMINARY STATEMENTS
WHEREAS,
DUSA, Draxis, and PARTEQ RESEARCH AND DEVELOPMENT INNOVATIONS,
a
non-profit corporation without share capital organized and existing under
the
laws of the Province of Ontario, having offices at Queens University at
Kingston, Kingston, Ontario Canada KL7 3N6 ("PARTEQ") are parties to that
certain Amended and Restated Assignment Agreement dated April 16, 1999 (the
"Assignment") pursuant to which DUSA
assigned to Draxis all of DUSA's rights and
obligations under that certain the Amended and Restated License Agreement
between DUSA and PARTEQ effective as of
March 11, 1998 (the "License"), insofar
as such rights and obligations relate to
the Territory (defined below); and
WHEREAS,
in connection with the execution of the
Assignment,
DUSA and
Draxis also entered into that certain
Confidential
Disclosure
Agreement dated
April 16, 1999 (the "CDA"); and
WHEREAS,
in May 2001, Draxis obtained Registration (defined below) of
the
DUSA Product (defined below) in the
Territory; and
WHEREAS,
each of the Parties
(defined below) believe that it is in its
best interest for Draxis to: (a) return to DUSA all rights
granted to Draxis
under the Assignment and terminate the
Assignment; and (b)
transfer to DUSA all
right, title and interest in and to the
Registration together
with all relevant
know-how, pre-clinical and clinical study
data and results,
reports, records,
market research and materials including, without limitation, any CTAs,
Registration Applications (as each is defined below) and other regulatory
filings in Draxis' name relating to the
DUSA Product,
all subject to the
terms
and conditions set forth herein.
NOW
THEREFORE, in
consideration of the foregoing preliminary statements
and the mutual agreements and covenants set forth herein,
the Parties
hereby
agree as follows:
1. DEFINITIONS.
As used in
this Agreement, the following terms shall have the meanings set
forth in this Section 1 unless context clearly and unambiguously dictates
otherwise. References to the singular include the plural and vice versa,
and
references to Sections, Exhibits and Schedules are
references to the
sections,
exhibits and schedules of this
Agreement.
1.1
"Affiliate"
shall
mean, with respect to a Party, any entity
controlling, controlled by, or under common
control with, such Party, for only
so long as such control exists.
For these purposes, "control" shall refer to:
(i) the possession, directly or indirectly, of the power to direct the
management or policies of an entity,
whether through the ownership of voting
securities, by contract or otherwise; or (ii) the ownership, directly or
indirectly, of more than fifty percent (50%)
of the voting
securities or other
ownership interest of an entity.
<PAGE>
Note: Certain portions of this document have
been marked "[C.I.]"
to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and
filed separately
with the Sec1urities and Exchange
Commission.
1.2
"Agreement"
shall mean this termination and transfer agreement
together with the preliminary statements and all exhibits, schedules and
attachments hereto and thereto.
1.3
"Assignment"
shall have the meaning assigned to such term in the
preliminary statements of this
Agreement.
1.4 "CDA"
shall have the meaning
assigned to such term in the preliminary
statements of this Agreement.
1.5 "CTA"
shall mean a clinical
trial application
filed with the TPD
as
required prior to the commencement of any
clinical trial of Products, the Method
or the DUSA Product in humans in the
Territory.
1.6 "Confidential Information" shall have the meaning
assigned to such
term in the CDA.
1.7
"Draxis Know-How"
shall mean any and all
improvements,
discoveries,
claims, formulae, processes, trade secrets,
technologies and know-how (including
confidential data and information), whether patentable or unpatentable,
generated, owned or controlled by Draxis or
its Affiliates
during the term of
the Assignment: (i) useful or necessary for
the development, use or sale of: (1)
Products and/or the Method in the Territory; or (2) the DUSA Product in the
Territory; or (ii) relating to the Invention;
including,
without limitation,
synthesis, preparation, recovery and purification processes and techniques,
control methods and assays, chemical data, toxicological and pharmacological
data and techniques, clinical data, medical uses, product forms and product
formulations and specifications.
1.8
"Draxis Patent
Rights" shall mean all patents
(including,
without
limitation, all reissues, extensions, substitutions, re-registrations,
re-examinations, re-validations, supplementary protection certificates and
patents of addition) and patent
applications (including, without limitation, all
provisional applications, continuations, continuations-in-part and
divisions)
which: (i) are useful or necessary for the development, use or sale of: (1)
Products and/or the Method in the Territory; or (2) the DUSA Product in the
Territory; or (ii) relate to the Invention; and in each case are owned by
or
licensed to Draxis or its Affiliates as of the Effective Date as set forth on
Schedule 1.8.
1.9
"Draxis Intellectual
Property" shall mean,
collectively, the
Draxis
Know-How and Draxis Patent Rights.
1.10 "DUSA
Product" shall mean
collectively:
(i) Levulan(R) 20%
topical
solution; and (ii) DUSA's proprietary, disposable applicator being
commercialized under the trademark Kerastick(R), for the application of
Levulan(R) 20% topical solution.
1.11
"Effective Date" shall
have the meaning assigned to such term in the
introductory paragraph of this
Agreement.
1.12
"First Commercial Sale" shall mean the first sale for use or
consumption of the DUSA Product in the
Territory.
-2-
<PAGE>
Note: Certain portions of this document have
been marked "[C.I.]"
to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and
filed separately
with the Sec1urities and Exchange
Commission.
1.13
"GAAP" shall mean
generally accepted
accounting
principles in the
United States, consistently applied by the
party at issue.
1.14
"Gross Sales" shall mean the gross invoiced sales price received by
DUSA or its Affiliates and sublicensees, if
any, with respect to the sale of the
DUSA Product for the Territory, it being agreed by the Parties that only a
customary number of samples of the DUSA
Product shall be provided to the market
for promotional purposes, as determined by DUSA in its reasonable sole
discretion.
1.15
"Improvements"
shall have the meaning
assigned to such term
in the
License and incorporated by reference in to
the Assignment.
1.16
"Indemnitee" shall
have the meaning assigned to such term in Section
8.3.
1.17
"Invention"
shall have the meaning assigned to such term in the
License and incorporated by reference in to
the Assignment.
1.18
"Levulan(R)"
shall mean DUSA's
brand of the chemical
compound 5 -
aminolevulinic acid HCl.
1.19
"License" shall have the meaning assigned to such term in the
preliminary statements of this
Agreement.
1.20
"Materials"
shall have the meaning
assigned to such term in Section
3.2.1.
1.21
"Method" shall have the meaning assigned to such term in the
License
and incorporated by reference in to the
Assignment.
1.22
"Party" shall mean DUSA or Draxis and, when used in the plural,
shall
mean DUSA and Draxis.
1.23
"Products"
shall have the meaning assigned to such term in the
License and incorporated by reference in to
the Assignment.
1.24
"Proprietary
Information"
shall have the meaning
assigned to such
term in Section 7.2.
1.25
"Registration" shall
mean approval by the Regulatory Authorities in
the Territory of any Registration Application including, but not limited to,
pricing and reimbursement approvals, for Products, the Method or the DUSA
Product.
1.26
"Registration
Application"
shall mean any
filing(s) made with
the
Regulatory Authorities including, without limitation, a new drug submission
filed with the TPD, for regulatory
approval of the
marketing, manufacture
and
sale (and pricing, as applicable) of the Products, the Method or the DUSA
Product in the Territory.
1.27
"Regulatory
Authority"
shall mean the TPD
together with the Health
Products and Food Branch of Health Canada,
or any successors thereto, as well as
any state or local health regulatory
authorities
having jurisdiction over any
activities contemplated by the Parties including, without limitation, the
marketing, manufacture, and sale of Products,
the Method or the DUSA Product in
the Territory.
-3-
<PAGE>
Note: Certain portions of this document have
been marked "[C.I.]"
to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and
filed separately
with the Sec1urities and Exchange
Commission.
1.28
"Royalty Payment
Period" shall mean the period commencing as of the
First Commercial Sale and terminating upon
the expiration of five (5) years. For
these purposes, a "year" shall refer a calendar
year beginning on the Effective
Date and ending of 365 days (or 366 days in
a leap year) thereafter.
1.29
"Territory" shall mean Canada.
1.30
"TPD" shall mean the Therapeutic Products Directorate of Health
Canada, or any successor thereto.
1.31
"Transfer Fees" shall have the meaning assigned to such term in
Section 3.3
1.32
"United States,"
"U.S." or "U.S.A."
shall mean The United States of
America.
2. REPRESENTATIONS AND
WARRANTIES.
2.1
Representations and Warranties of Both Parties. Each Party represents
and warrants to the other Party, as of the
Effective Date, that:
2.1.1 such Party:
(1) is a corporation duly organized, validly
existing and in good standing under the
laws of the
jurisdiction in which it is
incorporated; (2) has the corporate power and authority and the legal
right to
own and operate its property and assets, to lease the property and assets it
operates under lease, and to carry on its
business as it is now being conducted;
and (3) is in compliance with all
requirements of
applicable law, except to the
extent that any noncompliance would not have a material
adverse effect on
the
properties, business, financial or other condition of
such Party and would not
materially adversely affect such Party's ability to perform its
obligations
under this Agreement;
-4-
<PAGE>
Note: Certain portions of this document have
been marked "[C.I.]"
to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and
filed separately
with the Sec1urities and Exchange
Commission.
2.1.2 such Party: (1)
has the corporate power and authority and the
legal right to enter into this Agreement and to perform its obligations
hereunder; and (2) has taken all necessary corporate action on its part to
authorize the execution and delivery of
this Agreement and the
performance
of
its obligations hereunder. The Agreement
has been duly executed and delivered on
behalf of such Party, and constitutes a legal, valid, binding obligation,
enforceable against such Party in
accordance with its terms;
2.1.3 such Party has obtained all necessary consents, approvals and
authorizations of all governmental
authorities and third
parties required to be
obtained by such Party in connection with
this Agreement; and
2.1.4 the execution and delivery of this Agreement and the
performance of such Party's obligations hereunder: (1) do not, to the best of
such Party's knowledge, conflict with or violate any
requirement of applicable
laws or regulations; and (2) do not conflict with, or constitute a default
under, any contractual obligation of such
Party.
2.2
Representations and Warranties of Draxis. Draxis hereby represents
and
warrants to DUSA, as of the Effective Date,
that:
2.2.1 Draxis is the owner of a Registration for the DUSA Product
and
such Registration is in full force and
effect and has been maintained to date;
2.2.2 to the best of Draxis' knowledge: (1) Draxis has disclosed to
DUSA all Draxis Know-How in its or its
Affiliates possession; and (2) Draxis and
its Affiliates have exclusive rights to all of the Draxis
Know-How in existence
on the Effective Date and the exclusive
right to grant
licenses with
respect
thereto;
2.2.3 Draxis is the owner of, or has exclusive rights to, all of
the
Draxis Patent Rights set forth on Schedule 1.8,
and has the exclusive
right to
grant to DUSA the rights granted under this
Agreement. Schedule 1.8 sets forth a
complete and accurate list of all Draxis
Patent Rights;
2.2.4 Draxis has not entered into any agreement with any third
party
that is in conflict with the return of rights to DUSA pursuant to this
Agreement; and
2.2.5 Draxis is in full compliance with the terms and
conditions of
the Assignment and no payments or other financial obligations are due from
Draxis to any third party (including,
without limitation, PARTEQ) thereunder.
2.3
Representations
and Warranties of
DUSA. DUSA hereby
represents and
warrants to Draxis, as of the Effective Date, that DUSA is in full
compliance
with the terms and conditions of the
Assignment.
3. TERMINATION;
TECHNOLOGY TRANSFER.
3.1
Termination
of Assignment.
Effective as of the
Effective Date,
the
Parties agree to terminate the Assignment
and all obligations of each Party to
the other under the Assignment, except for
those set forth in Sections 6.1, 6.2,
and 14.1 (solely with respect to claims
arising prior to the Effective Date) of
the License which are incorporated by
reference into the Assignment, which shall
survive such termination. Thereafter, DUSA shall be free to develop and
commercialize Products and the Method in the
Territory without
compensation or
other obligation to Draxis, subject to payment of the
termination payment
set
forth in Section 4.1.
-5-
<PAGE>
Note: Certain portions of this document have
been marked "[C.I.]"
to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and
filed separately
with the Sec1urities and Exchange
Commission.
3.2
Technology Transfer; Grant of Rights.
3.2.1 Within thirty
(30) days of the
Effective Date,
Draxis will
return or transfer to DUSA all data, information and materials including,
without limitation, all pre-clinical and clinical study data and results,
reports, records, market research,
Confidential
Information and all regulatory
filings (e.g., all CTAs, Registration Applications and Registrations)
(collectively, the "Materials"), together with all know-how,
including Draxis
Know-How, pertaining to the development and
commercialization
of Products and
the Method as well as the DUSA Product, received by Draxis or its Affiliates
from DUSA or developed by Draxis, its Affiliates and/or their third party
contractors or collaboration partners during the term of the Assignment.
Schedule 3.2.1 sets forth an initial list of Materials for transfer. In
addition, the Parties shall work together to
identify any additional Materials
and know-how, including Draxis Know-How, that should be transferred.
In the
event that, after the Effective Date, Draxis or DUSA identifies any such
Materials or know-how, including Draxis Know-How, received by Draxis or its
Affiliates from DUSA or developed by Draxis,
its Affiliates and/or its third
party contractors or collaboration
partners during the
term of the Assignment,
the identifying Party shall promptly notify the
other and the Parties agree to
promptly make arrangements for the return or
transfer to DUSA of such Materials
or know-how, including Draxis Know-How, as applicable. Notwithstanding the
foregoing, Draxis shall be entitled to retain
archival copies of all
Materials
and know-how, including Draxis Know-How, in electronic or hardcopy form
for
purposes of its ongoing confidentiality
obligations pursuant to Section 7.
3.2.2 To the extent
required for DUSA to
access Materials
in the
possession of third party contractors and collaboration partners engaged by
Draxis or its Affiliates to perform
services on its or
their behalf
including,
without limitation, to conduct: (1) preclinical or
clinical studies on Products
and the Method as well as the DUSA Product;
or (2) market
research on the
DUSA
Product, Draxis agrees to grant permission
under any applicable
agreement for
such third parties to give access to DUSA
such Materials and any
other data and
documentation relating to Products, the Method or the DUSA
Product in their
possession. In addition, Draxis shall assign,
or have its Affiliate assign, its
rights to DUSA as needed under applicable agreements to permit such access by
DUSA and, subject to the prior written
approval of DUSA,
Draxis may assign
to
DUSA obligations of confidentiality, if any, that are required for
purposes of
such access. As of the Effective Date, Draxis has identified the third party
contractors and collaboration partners set
forth on Schedule 3.2.2.
3.2.3 To enable DUSA to fully exploit its rights under the
License,
Draxis and its Affiliates hereby grant to
DUSA an exclusive,
irrevocable, fully
paid-up, royalty-free, right and license under the Draxis
Intellectual Property
to develop, make, have made, use, offer to sell, sell and have
sold Products,
the Method and the DUSA Product for all
indications
worldwide.
The foregoing
license shall include the right to grant
sublicenses.
3.3 Fees
and Expenses.
Each party
shall bear its own
fees and expenses
incurred in connection with the transactions contemplated by this Agreement;
provided, that, the Parties agree that any
fees, charges,
transfer taxes, bulk
sales taxes or other payments ("Transfer Fees") required to be made to any
governmental entity in connection with the
transfer of Materials shall be borne
by DUSA. Draxis and
