License Agreement - Medisorb Technologies International LP and Janssen Pharmaceutica International
LICENSE AGREEMENT
This Agreement is made as of the 21 day February of 1996, between
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MEDISORB TECHNOLOGIES INTERNATIONAL L.P., a Delaware limited partnership
(hereinafter "Medisorb") and JANSSEN PHARMACEUTICA INTERNATIONAL, a division of
Cilag International AG, a Swiss business corporation ("Janssen").
WHEREAS, the parties have entered into a certain Development
Agreement, dated December 23, 1993 (the "Development Agreement"), for the
development of a Product (as described below); and
WHEREAS, Janssen has an option under the Development Agreement to
enter into this License Agreement for the Medisorb technology required to make,
use and sell the Product, which option Janssen has elected to exercise; and
WHEREAS, the parties believe that it is in their mutual best interest
for Medisorb to license to Janssen on an exclusive basis in the Territory,
Medisorb Patents and Technical Information within the Field, upon the terms and
conditions set forth herein;
NOW, IT IS HEREBY AGREED AS FOLLOWS:
(1) Definitions: The following terms shall have the meanings ascribed
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to them herein, unless the context otherwise requires:
(a) "Affiliate" shall mean any company controlling, controlled by,
or under common control with a party by ownership, directly or indirectly, of
fifty percent (50%) or more of the total ownership or by the power to control
the policies and actions of such company.
(b) "Development Program" shall mean the development activities
conducted by the parties pursuant to the Development Agreement.
(c) "Field" shall mean the treatment of [
].
(d) "Improvements" shall mean any improvements or developments to
or of the Patents and Technical Information in the Field which Medisorb may
acquire,
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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discover, invent, originate, make, conceive or have a right to, in whole or in
part, during the term of this Agreement, whether or not such improvement or
development is patentable.
(e) "International Registration Dossier" ("IRF") shall mean the
Product registration file compiled by Janssen Pharmaceutica N.V., Beerse,
Belgium on behalf of Janssen, the contents and format being such that it can be
submitted as such to national health authorities or be used as a basis for a
national application for marketing authorization for the Products in the
specific format required by such national health authorities.
(f) "Medisorb Polymers" shall mean bioresorbable aliphatic
polyesters based on glycolide, lactide, caprolactone and combinations of such
polymers, which are manufactured by Medisorb and utilized in Product(s) licensed
under this Agreement.
(g) "Net Sales" shall mean the gross amounts received from sales
of Products during a calendar quarter to third parties by Janssen, its
Sublicensees or any Affiliate of either, less any: (i) applicable sales taxes;
(ii) cash trade or quantity discounts; (iii) amounts repaid or credited by
reason of rejections or return of goods; or (iv) freight, postage and duties
paid for. No deduction from the gross sales price shall be made for any item of
cost incurred by the seller in its own operations incident to the manufacture,
sale or shipment of the product sold. For purposes hereof, Net Sales shall not
include sales of a Product from Janssen or an Affiliate of Janssen to any
Affiliate or Sublicensee of either; it being intended that Net Sales shall only
include sales to unrelated third-parties.
(h) "Patents" shall mean (i) any and all existing issued patents
and patent applications or parts thereof which describe and claim a depot
formulation of [ ] or any chemical analogues of [ ] with
similar physiological activity, based on polymers of lactic and glycolic acids
and the production and use thereof; (ii) any other patents and patent
applications filed by or on behalf of Medisorb, or under which Medisorb has the
rights to grant licenses, which are needed to practice the inventions; and (iii)
any reissues, extensions, substitutions, confirmations, registrations,
revalidations, additions, continuations, continuations-in-part, or divisions of
or to any of the foregoing which are granted hereafter or any additional
protection certificate granted with respect thereto.
(i) "Product(s)" shall mean any and all depot formulations of [
] or any chemical analogues of [ ] with similar physiological
activity, based on polymers of lactic and glycolic acids which are designed to
deliver [ ], or any of its chemical analogues, over an extended period.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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(j) "Sublicensees" shall mean any company or companies, other
than Janssen's Affiliates, sublicensed by Janssen.
(k) "Technical Information" shall mean all unpatented information,
know-how, practical experience, procedures, methodology, specifications,
formulae and data whether or not the same shall be patentable which have been
heretofore developed or acquired by Medisorb prior to the date of this Agreement
and which are necessary in order to use, manufacture or sell Products in the
Field.
(l) "Territory" shall mean worldwide with the exception of the
United States, its Territories, Protectorates, Commonwealths, and all other
political subdivisions of the United States.
(2) License Grant
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(a) Medisorb hereby grants to Janssen in the Territory an
exclusive license under the Patents and Technical Information existing prior to
the effective date of this Agreement, with the right to grant sublicenses
thereunder, for all purposes within the Field to practice and use the Patents
and Technical Information, including the rights to manufacture and have
manufactured, to use and have used, and to sell and have sold Products. Medisorb
exclusively retains all rights under the Patents and Technical Information
outside the Field and for use other than in Products. The right to grant
sublicenses granted hereunder is exclusive to Janssen and shall not extend to
Janssen Affiliates or Sublicensees.
(b) Medisorb shall offer to Janssen for incorporation into this
License Agreement on reasonable terms and conditions, Medisorb Improvements in
the Field which, if incorporated into Janssen's then current commercial
Product(s), would: (i) result in significant changes in either the
specifications for such Product(s) or the processes for producing such
Product(s), and (ii) would reasonably be expected to result in enhanced market
value and/or profitability of such Product(s). Examples of such Improvements
would include: (i) the development by Medisorb of a non-aqueous injection
vehicle which offers significant advantages with respect to ease of
administration and (ii) the development by Medisorb of technology enabling[
]. It is the parties'
understanding that the effect of any such license amendment would, in general,
be either an extension of the term of this Agreement for a mutually agreed
period or a marginal increase in the then current royalty rate . All other
Medisorb Improvements shall be made available to Janssen for its use without
further agreement. Proprietary rights to Improvements jointly developed by
Medisorb and Janssen shall be governed by the terms of Section 5(c) of this
Agreement.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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(c) In the event that at any time during the term of this
Agreement Medisorb is unable for any reason whatsoever to supply the Medisorb
Polymers required by Janssen for use in Products, then the license granted under
paragraph 2(a) above shall be expanded to include the Medisorb Technology
required to make and use the Medisorb Polymers.
(3) Royalties:
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(a) Janssen shall pay or cause to be paid to Medisorb a running
royalty with respect to all Products sold to customers by Janssen, its
Affiliates and Sublicensees, payable quarter-annually in arrears within sixty
(60) days following the end of each three (3) month period ending on March 31,
June 30, September 30 or December 31 in any year during the term hereof, as
follows: (i) [ ]% of the Net Sales of each unit of Product sold during the
preceding calendar quarter during the term hereof, if such unit of Product was
manufactured by Medisorb pursuant to a written contract for the supply of
Product; or (ii) [ ]% of the Net Sales of each unit of Product sold during
the preceding calendar quarter during the term hereof, if such unit of Product
was not manufactured by Medisorb pursuant to a written contract for the supply
of Product. Any withholding or other tax that Janssen or any of its Affiliates
are required by statute to withhold and pay on behalf of Medisorb with respect
to the royalties payable to Medisorb under this Agreement shall be deducted from
said royalties and paid contemporaneously with the remittance to Medisorb;
provided, however, that in regard to any tax so deducted Janssen shall furnish
Medisorb with proper evidence of the taxes paid on its behalf.
(b) In the event that, in a country where Product is not claimed
in a valid Patent, a similar product obtains a market share greater than
[ ]% of the total market revenues for Products and similar products in such
country, the parties agree to meet and negotiate in good faith an appropriate
reduction in the royalty rate then in effect. In no event shall a reduction
in royalty rates pursuant to this section result in royalty rates [
] of the rates specified under Section 3(a)(i) and 3(a)(ii) of this Agreement.
For the purposes of this section, "similar product" shall mean a generic version
of the Product(s) where: (i) the active agent is [ ], or a chemical
analogue thereof and (ii) the excipient is comprised of lactic and/or glycolic
acids. In the event that patent protection for Product(s) becomes available
subsequent to a royalty reduction pursuant to this section, the parties agree to
(i) reinstitute the royalty otherwise applicable, and (ii) in the event that any
recovery is obtained for prior infringement of the subsequently issued patent,
the parties will first apply such recoveries to reimbursing Medisorb for
royalties it would otherwise have received.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Janssen-Medisorb
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(c) Janssen shall keep complete and adequate records with respect
to the proceeds of Products on which it has to pay royalties payable hereunder
for at least two (2) years after expiry of the year they concern. Medisorb shall
have the right to have such records of Janssen inspected and examined, at
Medisorb's expense, for the purpose of determining the correctness of royalty
payments made hereunder.
Such inspection shall be made by an independent, certified public accountant to
whom Janssen shall have no reasonable objection. Such accountant shall not
disclose to Medisorb any information other than that necessary to verify the
accuracy of the reports and payments made pursuant to this Agreement. It is
understood that such examination with respect to any quarterly accounting period
shall take place not later than two (2) years following the expiration of said
period. Not more than one examination per year shall take place.
Based upon the verification of such reports and whenever there is reasonable
doubt about the accuracy of the sales of Product realized by an Affiliate or
sublicensee, Medisorb may reasonably request Janssen to audit the books of such
Affiliate or such sublicensee in accordance with any applicable contractual
provision, in order to confirm the accuracy of such reports.
(4) Production of Product/Technology Transfer:
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(a) Janssen shall use its reasonable efforts to commercialize and
market Product, or to have the same commercialized and marketed.
(b) In the event that Janssen determines to manufacture Product
itself or have Product manufactured by a third party, Medisorb shall transfer to
Janssen all relevant Technical Information, and provide such technical
assistance, upon mutually agreed terms and conditions, as is required by Janssen
in order to enable the manufacture of Product by Janssen or its designated third
party manufacturer. However, with respect to such third party manufacturers,
except as limited by a written Product manufacturing agreement between Janssen
and Medisorb, Medisorb will have a right of first refusal as to the manufacture
and supply to Janssen of all Product(s), and component bioabsorbable polymers
utilized in such Product(s). Medisorb will have a period of thirty (30) days
following written notice from Janssen of terms it is offering to, or prepared to
accept from, a third party manufacturer to notify Janssen of its intention to
exercise its right of first refusal to supply Product and/or component
bioabsorbable polymers thereof to Janssen, its Affiliates and Licensees on terms
no less favorable to Janssen than those offered by such third party
manufacturer. Such third party manufacturer cannot be an in-kind competitor to
Medisorb and must be reasonably acceptable to Medisorb with respect to
confidential protection of
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Medisorb's Technical Information. In the event that at any time during the term
of this Agreement Medisorb is unable for any reason whatsoever to supply the
Medisorb Polymers required by Janssen for use in Products, then the right of
first refusal under this paragraph respecting the supply of the component
bioabsorbable polymers shall be eliminated. For the purposes of this section, an
"in-kind" competitor shall mean any organization which regularly engages in the
contract development and/or contract manufacture of injectable controlled
release drug delivery systems comprising a polymeric excipient based on lactic
and/or glycolic acids and/or other closely related monomers. This Section 4(b)
specifically supercedes Section 7(B) of the Development Agreement, which Section
7(B) shall be of no further force or effect.
(c) The right of first refusal granted to Medisorb pursuant to
Section 4(b) above shall be contingent upon: (i) Medisorb and Janssen reaching
an agreement concerning the financing, scheduling and construction in Europe of
a Medisorb manufacturing facility within twelve (12) months of the date first
above written or the initiation of Phase III human clinical trials, whichever is
later, and (ii) prior to the qualification of Medisorb's European manufacturing
facility, Medisorb using reasonable efforts to supply from its United States
manufacturing facilities all of Janssen's commercial requirements for Product
pursuant to the Product Supply Agreement anticipated by Section 7(A) of the
Development Agreement.
(5) Proprietary Rights
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(a) Medisorb will retain title to and ownership of all technology
(including, without limitation, all patents, inventions, and data relating
thereto) relating to absorbable polymers, controlled release of active agents,
and/or manufacturing methods or processes relating to such polymers and the
controlled delivery systems for active agents based on such polymers previously
owned by Medisorb or developed by Medisorb as a result of the Development
Program or otherwise. Medisorb will pay its own costs and expenses in connection
with the protection of any such technology, including all patent application and
maintenance costs and Janssen agrees to provide Medisorb with any necessary
utility information.
Medisorb shall inform Janssen of any patent application it wishes to
file to protect proprietary rights defined in Article 5, resulting from either
the Development Program or the preliminary Development Program and shall forward
a copy of any such patent application to Janssen at least one month prior to
filing.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Janssen-Medisorb
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Medisorb shall consider any suggestions made by Janssen for amplifying
such application and shall accordingly amend the application where in Medisorb's
opinion it is appropriate.
Nine months after the first filing, Medisorb shall propose a list of
countries in which it intends to file foreign equivalents. Janssen shall be
given the opportunity to propose further countries to be added to the list. In
case the adding of some or all of these further countries is unacceptable to
Medisorb, Janssen shall have the right to file patent applications in those
countries, in Medisorb's name and at Janssen expense. Medisorb shall assist in
the transfer of rights for the latter patent applications and shall provide all
information necessary to file and prosecute such patent applications.
Medisorb shall not abandon part or whole of any of the patents or
patent applications without having first consulted Janssen, which shall have the
right to further pursue any patents or patent applications which Medisorb wishes
to abandon, or parts thereof, in its own name and at its own expense.
(b) Janssen and/or its Affiliate will retain title to and
ownership of all technology (including, without limitation, all patents,
inventions, and data relating thereto) relating to [ ] or
any chemical analogues of [ ] with similar physiological
activity previously owned by Janssen and/or its Affiliate or developed by
Janssen as a result of this Agreement or otherwise. Janssen and/or its
Affiliate will pay its own costs and expenses in connection with the
protection of any such technology, including all patent application and
maintenance costs and Medisorb agrees to provide Janssen with any necessary
utility information.
(c) Any inventions, other than those falling under either section
5(a) or 5(b) hereof, having an inventorship jointly between at least one
employee of Janssen or an Affiliate of Janssen and one employee of Medisorb or
an Affiliate of Medisorb shall be jointly-owned by Janssen and Medisorb. Each
party will cooperate fully in the filing and prosecution of such patent
applications.
Janssen and Medisorb shall agree on which of both shall be responsible
for the filing, prosecution and maintenance of any such joint patent
applications and patents (hereinafter referred to as the "Responsible Party").
In principle, the party having contributed the most to the invention to be
protected shall be the responsible party, unless agreed upon differently. Upon
mutual consent, the responsible party may select an agent for drafting, filing
and prosecuting a joint application. However, both parties shall agree who shall
be the agent and to what extent this agent shall be used.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Janssen-Medisorb
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The Responsible Party shall consult the other party when drafting any
new jointly owned patent application. The final draft shall be forwarded to the
other party at least one month prior to filing to give the opportunity to make
final comments.
The Responsible Party shall propose a list of countries in which it
intends to file such patent applications. The other party shall be given the
opportunity to propose further countries to be added to the list. In case the
adding of some or all of these further countries is unacceptable to the
Responsible Party, the other party shall have the right to file patent
applications in those countries, in its own name and at its own expense. The
Responsible Party shall assist in the transfer of rights for the latter patent
applications and shall provide all information necessary to file and prosecute
such patent applications.
The Responsible Party shall not abandon part or whole of any of the
patents or patent applications without having first consulted the other party,
which shall have the right to further pursue any patents or patent applications
which the responsible party wishes to abandon, or parts thereof, in its own name
and at its own expense.
All out-of-pocket costs made in relation to joint patent applications
and patents shall be shared equally by Janssen and Medisorb. A statement of
costs shall be made up on a quarterly basis and invoiced to the other party.
Medisorb shall grant to Janssen an exclusive fully-paid up royalty
free license with the right to sublicense to make, have made, use and sell under
any such patents or patent applications for the duration of the patents, any
continuations, continuations in part, divisions, patents of addition, reissues,
renewals or extensions thereof or any supplementary protection certificates
granted with respect thereto, in respect of any claims concerning the
application of [ ] or any chemical analogues of [ ]
with similar physiological activity. However, nothing contained in this
paragraph shall obviate Janssen's obligation to pay royalties under Section 3
hereof with respect to any Products developed hereunder.
Janssen shall grant to Medisorb an exclusive fully paid-up royalty
free license with the right to sublicense to make, have made, use and sell under
any such patents or patent applications for the duration of the patents, any
continuations, continuations in part, divisions, patents of addition, reissues,
renewals or extensions thereof or any supplementary protection certificates
granted with respect thereto, in respect of any claims concerning the
application of bioabsorbable polymers in the field of human and/or veterinary
medicine.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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(d) In addition, each party will retain exclusive title to its
respective confidential information in accordance with the provisions of Article
9 below.
(6) Patent Infringement
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(a) In the event that either party becomes aware that any third
party is infringing any patents included within the Patents in any country or
countries, the party becoming aware of such infringement shall promptly give
notice of such infringement to the other party. Any possible action against such
alleged infringement of the Patents will be carried out by either or both of the
parties in accordance with the provisions specified hereinafter in paragraphs
(b), (c), (d) and (e).
(b) Whenever it would concern a patent or patent application
falling within the definition of Patents and of which Medisorb retains full
title and ownership pursuant to Article 5 a), Medisorb shall use all reasonable
efforts to take action against such infringement in its own name, at its own
expense and on its own behalf.
If Medisorb fails to take action against such infringement, or if
Medisorb does not use reasonable efforts in carrying out such action after
commencement thereof, within thirty (30) days after the notice referred to in
paragraph (a) above or after having become aware of such infringement, Janssen
shall be entitled at its own discretion and at its own expense, to take
immediate action against such infringement in its own name, at its own expense
and on its own behalf. If Janssen commences or assumes such action, Janssen may
credit [ ] of any royalty otherwise due to Medisorb
for sales in such country or countries against the amount of the expenses and
costs of such action, including without limitation, attorney fees actually
incurred by Janssen. The amount of expenses so deducted shall be paid to
Medisorb out of the recoveries, if any, received by Janssen as a result of such
action. Except for such repayment of royalties deducted, Janssen shall be
entitled to retain all recoveries therefrom.
In no event shall Medisorb settle with such infringing third party in
the Field without the prior written consent of Janssen.
(c) Whenever it would concern a patent or patent application
falling within the definition of Patents and of which Janssen retains full title
and ownership pursuant to Article 5 B), Janssen shall have the right but not the
obligation to take action against such infringement in its own name, at its own
cost and on its own behalf. If Janssen fails to take action against such
infringement, or if Janssen does not use reasonable efforts in carrying out such
action after commencement thereof, within thirty (30) days after the notice
referred to
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Janssen-Medisorb
License Agreement
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in paragraph (a) above or after having become aware of such infringement,
Medisorb shall be entitled at its own discretion and at its own expense, to take
action against such infringement. Medisorb shall be entitled to retain all
recoveries, if any, therefrom.
(d) Whenever it would concern a patent or patent application
falling within the definition of Patents and of which Janssen and Medisorb
jointly retain full title and ownership pursuant to Article 5 (c), and whenever
in such case the infringing product would be a drug product falling within the
definition of the Field, Janssen shall have the right but not the obligation to
take action against such infringement in its own name, at its own cost and on
its own behalf. If Janssen fails to take action against such infringement, or if
Janssen does not use reasonable efforts in carrying out such action after
commencement thereof, within thirty (30) days after the notice referred to in
paragraph (a) above or after having become aware of such infringement, Medisorb
shall be entitled at its own discretion and at its own expense, to take action
against such infringement, it being understood that Janssen will have a
continuing right to take over any such action at its own expense and shall pay
to Medisorb from any recoveries Janssen receives (i) Medisorb's expenses and
(ii) from any sums remaining after deduction of Medisorb's and Janssen's
expenses, an amount proportionate to Medisorb's expenses in relation to
Janssen's expenses.
Whenever it would concern a patent or patent application falling
within the definition of Patents and of which Janssen and Medisorb jointly
retain full title and ownership pursuant to Article 5 (c), and whenever in such
case the infringing product would be a drug product falling outside the
definition of the Field, Medisorb shall have the right but not the obligation to
take action against such infringement in its own name, at its own cost and on
its own behalf. If Medisorb fails to take action against such infringement, or
if Medisorb does not use reasonable efforts in carrying out such action after
commencement thereof, within thirty (30) days after the notice referred to in
paragraph (a) above or after having become aware of such infringement, Janssen
shall be entitled at its own discretion and at its own expense, to take action
against such infringement, it being understood that Medisorb will have a
continuing right to take over any such action at its own expense. If Janssen
commences or assumes such action, Janssen may credit [ ]of any
royalty otherwise payable to Medisorb payable hereunder against the amount of
the expenses and costs of such action, including without limitation, attorney
fees actually incurred by Janssen. The amount of expenses so deducted shall be
paid to Medisorb out of the recoveries, if any, received by Janssen as a result
of such action. Except for such repayment of royalties deducted, Janssen shall
be entitled to retain all recoveries therefrom.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Janssen-Medisorb
License Agreement
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(e) Each party agrees to cooperate reasonably with the other party
in such litigation, including making available to the other party records,
information, and evidence relevant to the infringement of the Patent.
(7) Third Party Intellectual Property Rights
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(a) Medisorb warrants that to the best of its current knowledge
and belief the Products to be developed hereunder will not infringe the patent
rights of any third party.
(b) In the event that the manufacture, use or sale of the Product
would constitute an infringement of the rights of a third party in a country
because of the use of the Patents or Medisorb's know how, each party shall, as
soon as it becomes aware of the same, notify the other thereof in writing,
giving in the same notice full details known to it of the rights of such third
party and the extent of any alleged infringement. The parties shall after
receipt of such notice meet to discuss the situation, and, to the extent
necessary attempt to agree on a course of action in order to permit Janssen to
practice the license granted hereunder. Such course of action may include: (a)
modifying the Product or its manufacture so as to be noninfringing; (b)
obtaining an appropriate license from such third party; or (c) fight the claimor
suit. In the event that within a short period of time, the parties fail to
agree on an appropriate course of action Janssen may decide upon the course of
action in the interest of the further development, manufacturing or
commercialization of the Product.
(c) In the event that the parties cannot agree on modifying the
Product or in the case that such modification would not be economically viable
or regulatorily feasible, Janssen, whenever it relates to know how, whether
patented or not, owned by Janssen in accordance with the provisions of Article 5
(b) and (c), or Medisorb, whenever it relates to know how, whether patented or
not, owned by Medisorb in accordance with the provisions of Article 5 (a), will
have the right to negotiate with such third party for such license. Both
parties hereto will in any event in good faith consult with each other with
respect to such negotiations and the party negotiating such license as indicated
above, will make every effort to minimize the amount of license fees and
royalties payable thereunder. In no event shall either party as a result of
such settlement, grant a sublicense or cross license to the third party to
settle the suit, without the prior written approval of the other party. In the
event that such negotiations result in a consummated agreement, any license fee
and/or royalties to be paid thereunder shall be paid by the party responsible
for the negotiations as indicated above, [ ] of any
license fees or royalties paid by Janssen under such license will be creditable
against royalties due to Medisorb with respect to such country or countries.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Janssen-Medisorb
License Agreement
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(d) In the event that either or both parties would further to such
notification under Paragraph 7 (b) decide to defend such suit or claim in which
a third party alleges that the manufacture, use or selling of the Product
infringes said third party's patent in a country, Janssen shall have the right
to apply [ ] of the royalties due to Medisorb on
the sales of the allegedly infringing Product against its litigation expenses.
(8) Term:
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(a) Except as otherwise provided herein, this Agreement and the
term of the license granted to Janssen hereunder shall commence on the date
first written above and shall expire (i) upon expiration of the last to expire
Patent in such country or (ii) fifteen (15) years after the date of the first
commercial sale of Product in such country, whichever is later; provided, that
in no event shall the license granted hereunder expire later than the twentieth
anniversary of the first commercial sale of Product in any country with the
exception of the following countries where the fifteen (15) year minimum shall
pertain regardless: Canada, France, Germany, Italy, Japan, Spain and the United
Kingdom. After expiration of the license granted to Janssen hereunder, Janssen
shall retain a fully paid-up non-exclusive license to manufacture, use and sell
Products in the Field in the Territory.
(b) Medisorb may convert the exclusive license granted under this
Agreement to non-exclusive if Janssen does not maintain the following minimum
annual royalty payments to Medisorb:
(i) With respect to the entire Territory, excluding Japan, the
minimum royalty obligation will first apply to the twelve month period following
the anniversary of the end of the month in which the Product was launched in the
third major country. For the purpose of this Article only, major country shall
mean France, Germany, United Kingdom or Italy. During the first twelve month
period that such minimum royalty obligation is applicable, the minimum royalty
amount to be paid by Janssen will be calculated by multiplying the applicable
royalty rate by [ ] percent of the actual aggregate net sales of other
[ ] products during such twelve month period in the three major
countries referred to above.
As from the subsequent twelve month period the minimum annual royalty amount to
be paid by Janssen will be calculated by multiplying the applicable royalty rate
by [ ]% of the aggregate net sales of other [ ] products
during such period in all countries where Product has been launched and marketed
for a period of minimally twelve months prior to the actual reference twelve
month period; and
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Janssen-Medisorb
License Agreement
Page 13
(ii) In Japan the minimum royalty obligation will be first
applied to the twelve month period following the anniversary of the end of the
month in which the Product was launched. The minimum annual royalty amount to
be paid by Janssen will be calculated by multiplying the applicable royalty
rate by an amount representing [ ]% of the aggregate net sales of other
[ ] products in Japan during such period.
Janssen shall have the right to make up any shortfall in minimum royalty
payments from Product sales, both in Japan and in the rest of the Territory
provided, such make-up payment is made at the same time and in the same manner
as required for the underlying minimum royalty obligation.
Janssen may elect to have its exclusive rights converted into non-exclusive
rights on a country by country basis. As a consequence thereof, such country's
other [ ] products sales will no longer be taken into account for
calculating the above minimum royalty obligation.
(c) In the event that either party shall enter or be put into
voluntary or compulsory liquidation or have a receiver appointed or default in
the observance or performance of its obligations under this Agreement and shall
fail to remedy such default within ninety (90) days after the delivery of
written notice from the other party, the other party shall be entitled upon
giving written notice to terminate this Agreement.
(d) Janssen may terminate this Agreement without cause upon 30
days prior written notice. Thereafter, Janssen shall have no further rights or
privileges with respect to the use of Medisorb Technology in Products and
Medisorb shall be under no further obligation of non-competition or exclusive
dealing.
(e) Any early termination of the Agreement shall be without
prejudice to the rights of either party against the other accrued under this
Agreement prior to termination.
(f) Upon any termination of this Agreement, any remaining
inventory of Product may be sold, provided all royalties otherwise due hereunder
are paid with respect to such sales.
(9) Confidentiality:
---------------
(a) Each party agrees to keep confidential and to not use for any
purpose other than as set forth herein all technical information and materials
supplied by the
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
Janssen-Medisorb
License Agreement
Page 14
other hereunder and any information a party may acquire about the other or its
activities as a result of entering into this Agreement, provided that such
obligation shall not apply to technical information or material which: (i) was
in the receiving party's possession without restriction prior to receipt from
the other party or its Affiliates; (ii) was in the public domain at the time of
receipt; (iii) becomes part of the public domain through no fault of the
receiving party; (iv) shall be lawfully received from a third party with a right
of further disclosure; (v) shall be required to be disclosed by law, by
regulation or by the rules of any securities exchange.
(b) Except as may be otherwise provided herein, the
confidentiality obligations as set out in this Section shall continue so long as
this Agreement remains in force and thereafter for a period of seven (7) years.
(c) Janssen shall cause its Affiliates and Sublicensees to abide
by the obligations of confidentiality with respect to unpublished information
within the Patents and Technical Information.
(d) Any confidential information relating to the subject matter of
this Agreement imparted to the other party prior to the execution of this
Agreement shall be considered to fall under the terms of this Agreement.
(10) Disclaimer of Warranty: Medisorb makes no representations or
----------------------
warranties, express or implied, with respect to the Medisorb Patents and
Technical Information licensed to Janssen hereunder, including without
limitation any warranties of merchantability or fitness for a particular
purpose.
(11) Liability
---------
(a) Janssen agrees to indemnify, defend and hold harmless Medisorb
from and against any liability, loss, damages and expenses (including reasonable
attorney fees) Medisorb may suffer as the result of claims, demands, costs or
judgments which may be made or instituted against Medisorb by reason of personal
injury or damage to property arising out or caused by Janssen's promotion, use
and sale of the Product, except where such liabilities claims, demands, costs or
judgments are caused by Medisorb's failure to provide Janssen with any
information as specified in Section 12 (c) and Article 13. Medisorb will notify
Janssen as soon as it becomes aware of any such claim or action and agrees to
give reasonable assistance in the investigation and defense of such claim or
action it being understood that it shall allow Janssen to control the
disposition of the same.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Janssen-Medisorb
License Agreement
Page 15
(b) Medisorb agrees to indemnify, defend and hold harmless Janssen
from and against any liability, loss, damages and expenses (including reasonable
attorney fees) Janssen may suffer as the result of claims, demands, costs or
judgments which may be made or instituted against Janssen by reason of personal
injury or damage to property arising out or caused by Medisorb's failure to
provide Janssen with any information as specified in Section 12 (c) and Article
13.
(c) In no event shall either party be liable for loss of profits,
loss of goodwill or any consequential or incidental damages of any kind of the
other party.
(12) Product Information and Adverse Drug Events
-------------------------------------------
(a) As Janssen has superior knowledge of the end-use applications
to which Products licensed hereunder will be put, Janssen is responsible for
providing third parties with adequate information as to the medical profile of
such Products. Janssen will provide Medisorb with copies of the IPID
(International Product Information Document) and the IPPI (International Patient
Package Insert), which are all part of the IRF for the Product. For the purpose
of this Agreement IPID refers to the document that summarizes all medically
relevant features of the Product, including the instructions for use meant to
inform the medical profession, whereas the IPPI is a patient-oriented document,
based upon the IPID that summarizes all relevant information on the Product in
lay language. Janssen will keep Medisorb informed of any revisions or amendments
in the IPID and IPPI of the Product.
(b) Medisorb does not claim the expertise to judge whether
Product(s) will perform acceptably in Janssen's application(s). Janssen is the
sole judge as to whether Product(s) will perform acceptably in Janssen's
application(s). Janssen represents and warrants on an on-going basis during the
term of this agreement that it has the capability to assess the suitability of
Product(s) in Janssen's application(s) and agrees to conduct adequate testing to
confirm the safety and efficacy of Products prior to commercialization.
(c) Medisorb will provide to Janssen promptly after its discovery
by Medisorb, any information in its possession which indicates adverse effects
in humans associated with the Products, including the bioabsorbable polymeric
components thereof, licensed hereunder. For the purpose of this Agreement
"adverse event" shall mean an experience which is noxious and unintended and
which occurs at doses normally used in man for the prophylaxis, diagnosis or
therapy of a disease or for the modification of a physiological function and any
report of an overdose.
(13) Government Approvals
--------------------
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
Janssen-Medisorb
License Agreement
Page 16
Janssen shall be responsible for conducting all necessary testing as
well as determining what, if any, government approvals are required for the use
and sale of Product licensed hereunder and shall comply with all such
requirements prior to and following the sale or distribution of such Products.
Medisorb shall cooperate fully with Janssen in obtaining regulatory
approvals for Product licensed hereunder and shall, at Janssen's request,
provide appropriate regulatory authorities with any and all information
concerning Medisorb's technology, Medisorb polymers and Medisorb's manufacturing
process for such Product.
In this respect Medisorb undertakes that it has submitted or will as
soon as possible submit a type IV Drug Master File to the FDA identifying
Medisorb's method of manufacture, release specifications and testing methods
used in the manufacture of its bioabsorbable polymers and a type I Drug Master
File of Medisorb's manufacturing facilities where Product may be manufactured.
Medisorb will authorize Janssen at its request to cross-reference any Medisorb
Drug Master Files relating to the Medisorb Polymers.
(14) Force Majeure: Neither party shall be liable for its failure to
-------------
perform any of its obligations hereunder if such failure is occasioned by a
contingency beyond its reasonable control including, but not limited to,
occurrences such as strikes or other labor disturbances, lock out, riot, war,
default by a common carrier, fire, flood, storm, earthquake, other acts of God,
inability to obtain raw materials, failure of plant facilities or government
regulation, act or failure to act. Each party shall notify the other immediately
upon occurrence or cessation of any such contingencies. If such contingency
continues unabated for at least 180 consecutive days, either party shall have
the right to terminate this Agreement without further obligation beyond those
actually incurred prior to such termination.
(15) Press Communications: Neither party shall originate any
--------------------
publicity, news release or public announcement, written or oral relating to this
Agreement, including its existence, without the prior written approval of the
other party.
(16) Notices: Any legal notice required or permitted hereunder shall
-------
be considered properly given if in writing and sent by first class mail,
certified mail or by telefacsimile to the party being notified at the respective
address of such party as follows:
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
Janssen-Medisorb
License Agreement
Page 17
If to Medisorb:
Medisorb Technologies International L.P.
6954 Cornell Road
Cincinnati, OH 45242
USA
Facsimile: 513-489-2348
If to Janssen:
Janssen Pharmaceutica
Kollerstrasse 38
6300 Zug 6
Switzerland
Facsimile: 00-41-42449565
Such notice shall be effective upon receipt or upon refusal to accept such
notice. In any case, notice shall be presumed effective no later than five (5)
days after such notice is sent.
Neither party shall originate any publicity, news release or public
announcement, written or oral, relating to this Agreement, including its
existence, without the written approval of the other party.
(17) Assignment: This Agreement shall not be assigned by either party
----------
without the prior written consent of the other party; provided, however, that
assignment shall be permitted without such consent to any party, not less than
50% of the total interest of which owns, is owned by, or is under common control
with the assigning party. In the event of any such permitted assignment the
assignee shall be subject to and shall agree in writing to be bound by the terms
and conditions of this Agreement.
(18) Dispute Resolution: The parties shall amicably discuss and
------------------
negotiate any matters which arise under this Agreement and are not specifically
set forth hereunder. If any disputes arise under this Agreement, the parties
shall use their best efforts to meet and resolve such disputes. In the event
that the parties are unable to resolve any such disputes, then both parties
hereby agree to submit said disputes to the jurisdiction of the competent Courts
of Zurich, Switzerland, and agree that any litigation in any way related to this
Agreement shall be submitted to such Courts and that same shall be subject to
Swiss law.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
Janssen-Medisorb
License Agreement
Page 18
(19) Severability: In the event any one or more of the provisions of
------------
this Agreement should for any reason be held by any court or authority having
jurisdiction over this Agreement or any of the parties hereto to be invalid,
illegal or unenforceable such provision or provisions shall be validly reformed
to as nearly approximate the intent of the parties as possible and, if
unreformable; shall be divisible and deleted in such jurisdiction, elsewhere
this Agreement shall not be affected.
(20) Captions: The captions of this Agreement are for convenience
--------
only, and shall not be deemed of any force or effect whatsoever in construing
this Agreement.
(21) Waiver: The failure on the party of a party to exercise or
------
enforce any right conferred upon it hereunder shall not be deemed to be a waiver
of any such right, nor operate to bar the exercise or enforcement thereof at any
time thereafter.
(22) Survival: The following Articles of this Agreement shall survive
--------
the termination or expiration of this Agreement: 5, 9, 10, 11, 15, 17, and 18.
(23) Miscellaneous: This Agreement may be executed by the parties
-------------
hereto in counterparts, each of which when so executed and delivered shall be
considered to be an original, but all such counterparts shall together
constitute but one and the same instrument. This Agreement is the complete
agreement of the parties and supersedes all previous understandings and
agreements relating to the subject matter hereof. Neither this Agreement nor
any of the terms hereof may be terminated, amended, supplemented, waived or
modified orally , but only by an instrument in writing signed by the party
against whom enforcement of the termination, amendment, supplement, waiver or
modification is sought.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
Janssen-Medisorb
License Agreement
Page 19
IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have executed this Agreement as of the day and year first above written.
JANSSEN PHARMACEUTICA INTERNATIONAL
A division of Cilag International AG
By: /s/ Erik Rombouts
---------------------------------------
Name: Erik Rombouts
-------------------------------------
Title: Operations Director
------------------------------------
Date: February 21, 1996
-------------------------------------
[Second Janssen Signatory]
-------------------------
By: /s/ Heinz Schmid
---------------------------------------
Name: Heinz Schmid
-------------------------------------
Title: General Manager
------------------------------------
Date: February 21, 1996
-------------------------------------
MEDISORB TECHNOLOGIES INTERNATIONAL L.P.
by: Medisorb Technologies
International, Inc.,
its General Partner
By: /s/ David R. Lohr
---------------------------------------
Name: David R. Lohr
-------------------------------------
Title: President
------------------------------------
Date: January 31, 1996
-------------------------------------
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.