License Agreement - Abbott Laboratories and DrugAbuse Sciences Inc.
LICENSE AGREEMENT
This License Agreement ("AGREEMENT") is made as of this 16 day of
August, 2000 (the "EFFECTIVE DATE") by and between ABBOTT LABORATORIES, an
Illinois corporation, with its principal office at 100 Abbott Park Road,
Abbott Park, IL 60064 ("ABBOTT") and DRUG ABUSE SCIENCES, INC., a California
corporation, with its principal office at 330 Distel Circle, Suite 150, Los
Altos, CA 94022 ("DAS").
WITNESSETH
WHEREAS, Abbott is the holder of certain patent applications and patents
("PATENTS," as more fully defined below) relating to Compound (as defined
below);
WHEREAS, Abbott also possesses proprietary Know-How (as defined below)
relating to Compound and/or Product (as defined below);
WHEREAS, DAS wishes to obtain, and Abbott wishes to grant to DAS and its
Affiliates (as defined below), an exclusive license in the Territory (as defined
below) under the Patents and Know-How for the development and commercialization
of Product for Pharmaceutical Uses (as defined below); and
WHEREAS, DAS and Abbott acknowledge that there is substantial additional
formulation and clinical work to be done in order to successfully develop and
commercialize Product.
NOW THEREFORE, in consideration of the mutual obligations and promises as
set forth herein, the parties do hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following respective meanings:
1.1 "ABBOTT'S TECHNOLOGY" means the Patents and Know-How, including all
Improvements developed by Abbott.
1.2 "ABT-431" means the following pure form of the compound more
specifically described as:[******]
1.3 [******][******][******]"AFFILIATE" means any corporation, company,
partnership, joint venture and/or firm which controls, is controlled
by, or is under common control of either party hereto. For purposes of
this definition, control shall mean direct or indirect ownership of
more than fifty percent (50%) of the stock or participating shares
entitled to vote for the election of directors (but only as long as
such ownership exists).
1.4 "COMPOUND" means any and all tetracyclic compounds with the following
formula:
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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[******]
1.5 "CONFIDENTIAL INFORMATION" means any and all information or data
relating to the Compound and/or Product which a party discloses to the
other party, its employees or representatives, or is conceived or
reduced to practice during the Term by either party or by a third
party conducting feasibility and evaluation studies for DAS, whether
in writing, orally or by observation, including, without limitation,
all scientific, clinical, technical, commercial, financial and
business information and Know-How, and other information or data
considered confidential in nature. The Confidential Information of DAS
shall also include: (i) the fact that DAS intends to develop, use or
market any particular product, process or system; and (ii) all
information concerning the business, products, marketing efforts,
technology or finances of DAS. Subject to SECTION 7.1 hereof, Abbott
shall hold in confidence and shall not directly or indirectly disclose
or provide to any third party information pertaining to the Compound,
the Process Technology or Abbott Technology without DAS's prior
written consent. Confidential Information shall not include
information or any portion thereof which:
(a) is known to the receiving party at the time of disclosure and
documented by written records made prior to the date of this
Agreement;
(b) is subsequently disclosed to the receiving party without any
obligations of confidence by an unaffiliated third person who has
not obtained it directly or indirectly from the other party and
who has the right to make such disclosure;
(c) becomes patented, published or otherwise part of the public
domain;
(d) is independently developed by or for the receiving party by
person(s) having no knowledge of or access to such information
and without breach of any confidentiality obligation as evidenced
by its written records; or
(e) is required to be disclosed by legal, regulatory, statutory or
governmental process or authorities, provided in each case the
party disclosing information promptly informs the other and uses
its best efforts to limit the disclosure and to maintain
confidentiality to the maximum extent possible and permits the
other party to attempt by appropriate legal means to limit such
disclosure.
The contents of and the Exhibits to this Agreement shall constitute
Confidential Information.
1.6 [******]
1.7 "EFFECTIVE DATE" shall have the meaning ascribed to such term in the
opening paragraph of this Agreement.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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1.8 "FIRST COMMERCIAL SALE" means the first sale of Product in the
Territory, after Regulatory Approval, by DAS or its Affiliates (or
their sublicensee(s)) to any unaffiliated third party as evidenced by
the selling party's invoice or other relevant document to such third
party. A sale to an unaffiliated third party shall not include
quantities delivered solely for research purposes, for clinical trials
or quantities distributed as samples or promotions.
1.9 "IMPROVEMENTS" means all additions, developments, modifications,
enhancements and adaptations (i) which directly relate to or are used
in connection with the Process Technology or any Pharmaceutical Uses,
or any formulations thereof or additions, developments, modifications,
enhancements, improvements and adaptations thereto, and (ii) which are
conceived or reduced to practice during the Term. Ownership of
Improvements shall be as set forth in ARTICLE 13 hereof.
1.10 "IND" means an investigational new drug application filed with the
applicable Regulatory Authority in a country of the Territory, in
order to commence human clinical testing of a drug. An IND, together
with all supplemental filings referencing the initial IND filing,
shall be deemed one and the same IND for all purposes of this
Agreement.
1.11 "KNOW-HOW" means any proprietary technology, information, methods of
use, processes, techniques or ideas or inventions (other than the
Patents) owned, possessed or used by Abbott as of the Effective Date
which is directly related to or used in connection with the Process
Technology or any Pharmaceutical Uses, including all trade secrets and
any other technical information relating to development, use or sale
of the Compound and/or Product, provided that Abbott has the right to
license and/or sublicense to DAS. To the best of Abbott's knowledge
and belief, Abbott has the right to license and/or sublicense
substantially all of the Know-How.
1.12 "NDA" means an application (whether original, supplementary or
abbreviated) to the applicable Regulatory Authority in a country of
the Territory, for approval by such Regulatory Authority, necessary
for the commercial sale of Product in such country. An NDA, together
with all supplemental filings referencing the initial NDA filing,
shall be deemed one and the same NDA for all purposes of this
Agreement.
1.13 "NET SALES" means gross sales of the Product by DAS, by any Affiliates
of DAS, or any contract sales force of DAS or its Affiliates to
unrelated third parties, in arm's length transactions, including, but
not limited to, pharmaceutical wholesalers, pharmacies, hospitals or
dispensing physicians, less any of the following charges or expenses
that are incurred in connection with gross sales of the Product during
the Term:
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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(a) discounts, including cash discounts, customary trade allowances
or rebates actually taken, governmental rebates, chargebacks,
commissions, and group purchasing management fees for formulary
access;
(b) credits or allowances given or made for rejection, recall or
return of previously sold Product actually taken;
(c) any tax or government charge, duty or assessment (including any
tax such as a value added or similar tax or government charge)
levied on the sale, transportation or delivery of Product when
included on the invoice or other written document between the
parties as payable by the purchaser and collectable by DAS, its
Affiliate or sub-licensee; and
(d) freight, postage, transportation, insurance and duties on
shipment of Product when included on the invoice or other written
document between the parties as payable by the purchaser and
collectable by DAS, its Affiliate or sublicensee.
1.14 "PATENTS" means the patent applications and patents listed in Exhibit
A hereto and any and all other patent applications and patents and
amendments thereto, including foreign equivalents, and any and all
substitutions, extensions, additions, reissues, re-examinations,
renewals, divisions, continuations, continuations-in-part or
supplementary protection certificates owned by or licensed to (with
the right to sublicense) Abbott during the Term relating to the
Product or any Improvements.
1.15 "PHARMACEUTICAL USES" means any therapeutic use of the Compound and/or
Product for the management of a disease or condition of the human
body, excluding (a) any non-therapeutic use or non-human use (which
non-therapeutic or non-human use shall include, but not be limited to,
imaging, diagnostics, veterinary medicine, etc.), and (b) [******]
1.16 "PROCESS TECHNOLOGY" means any technology within the scope of the
claims of U.S. Patent No. 5,659,037 and/or any foreign equivalents
listed on EXHIBIT D that are necessary or used for making, using or
selling Compound and/or Product, and any and all other patent
applications and patents and amendments thereto, and any and all
substitutions, extensions, additions, reissues, re-examinations,
renewals, divisions, continuations, continuations-in-part or
supplementary protection certificates owned by or licensed to (with
the right to sublicense) Abbott during the Term relating to the
Process Technology and applicable to any Compound that are necessary
or used for making, using or selling Compound and/or Product.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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1.17 "PRODRUG" means different pharmaceutical compounds which, following
administration, are converted into structurally similar active
metabolites.
1.18 "PRODUCT" means any formulation containing the Compound or any
Improvement as an active ingredient for Pharmaceutical Uses.
1.19 "REGULATORY APPROVAL" means all governmental approvals and
authorizations necessary for the manufacture and commercial sale of
the Product in a country of the Territory, including, but not limited
to, marketing authorization, pricing approval and pricing
reimbursement, as applicable.
1.20 "REGULATORY AUTHORITY" means the United States Food and Drug
Administration or any successor entity and its equivalent in other
countries of the Territory, including, but not limited to, EMEA.
1.21 "ROYALTY PERIOD" shall have the meaning ascribed to such term in
SECTION 5.7(a) of this Agreement.
1.22 "SUBSTANCE ABUSE INDICATION" shall mean any treatment of addiction
(including, but not limited to, addiction to cocaine, heroin,
methamphetamine, and alcohol).
1.23 "TERM" means the period commencing on the Effective Date and
terminating as set forth in ARTICLE 8 below.
1.24 "TERRITORY" means the entire world.
1.25 "TRADEMARK" means any trademark registered, owned and chosen for
Product by DAS in any country of the Territory.
1.26 "WORK PLAN" means each "Feasibility and Development Work Plan"
specific to each Product indication attached hereto as EXHIBIT B, B-2,
B-3, etc.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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2. LICENSE GRANT. Abbott hereby grants to DAS and its Affiliates an exclusive
right and license in the Territory, under Abbott's Technology and the Process
Technology, for all Pharmaceutical Uses, with the right to grant sublicenses
pursuant to SECTION 4.7 hereof, to: (i) research, develop, modify, improve, make
or have made, Compound and Product; (ii) apply for and obtain Regulatory
Approvals, all as may be required to manufacture and commercialize Product; and
(iii) make, have made, register, use, import/export, market, offer to sell and
sell, Product and Compound, including co-promotion and co-marketing. During the
development phase of the Product, DAS shall have the right to use the Compound
for therapeutic drug monitoring for research and development purposes only. If a
Regulatory Authority requires therapeutic drug monitoring as a part of Product
labeling in connection with NDA approval, then DAS will offer Abbott the first
opportunity to develop and market such a therapeutic drug monitoring assay.
Should Abbott be unable or unwilling to develop and market such an assay within
a commercially reasonable time period, then DAS will have a non-exclusive
royalty bearing license to develop (or have developed) and commercialize such
assay with a royalty rate payable by DAS to Abbott of [******] of such assay.
3. INFORMATION; EXCLUSIVITY.
3.1 CONVEYANCE OF INFORMATION/INVENTORY:
(a) Within forty-five (45) days following the Effective Date, Abbott
shall convey to DAS most of the information under Abbott's and
its Affiliates' control involving the Compound, the Process
Technology and Pharmaceutical Uses of the Compound, including but
not limited to all information relating to Patents and Know-How,
worldwide regulatory documentation, draft and final clinical
reports, toxicity study reports, manufacturing protocol and batch
records, claims related to potential violations of any third
party rights, and all collaborative research agreements in the
possession of Abbott, its Affiliates and agents, but excluding
raw data sources which are not customarily required for
regulatory submission (e.g., laboratory notebooks and other
laboratory databases) and all information related to
non-Pharmaceutical Uses of the Compound. Abbott shall use
reasonable efforts in good faith to provide any remaining
information in the following forty-five (45) days. Abbott will
promptly provide DAS any other such information of which it
becomes aware during the term of this Agreement. With regard to
information from raw data sources, in the event that such
information is requested from DAS by a Regulatory Authority,
Abbott shall use reasonable efforts to provide DAS with such
information. If such information is requested for other purposes,
Abbott shall use reasonable efforts to provide DAS with such
information pursuant to SECTION 3.3 of this Agreement or, if
SECTION 3.3 is no longer applicable or if DAS so requests,
[******]. For purposes of this SECTION 3.1, information shall not
be deemed under Abbott's and its Affiliates' control if such
information is protected by confidentiality agreements with third
parties. With respect to such protected information, Abbott shall
use reasonable efforts to obtain the consent of such third
parties to release the protected information to DAS.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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(b) Abbott shall convey to DAS all available inventory of the
Compound as requested by DAS, except for such quantities
required by Abbott in connection with internal research
purposes and non-Pharmaceutical Uses and/or internal research
uses of the Compound. Any inventory of Compound conveyed to
DAS under this SECTION 3.1(b) shall be conveyed "AS IS" and
"WITH ALL FAULTS," WITHOUT WARRANTY OF ANY KIND WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR PARTICULAR PURPOSE. DAS shall pay Abbott
[******] per kilogram of compound conveyed under this SECTION
3.1(b). DAS shall be responsible for all testing, quality
control and certification of such Compound.
3.2 ABBOTT EXCLUSIVITY.
(a) During the Term, and except as described in SECTION 4.3(a),
neither Abbott nor its Affiliates, shall directly or through
intermediaries, undertake any development or commercialization
activities related to Pharmaceutical Uses, except that Abbott
shall be entitled to utilize the Compound for its internal
research purposes (including pharmaceutical research), provided
in no event shall such utilization permit Abbott to develop
and/or commercialize Pharmaceutical Uses. For the avoidance of
doubt, Abbott shall have the express right to undertake
development and commercialization activities relating to the
Compound for non-Pharmaceutical Uses.
(b) For a period of five (5) years after the Effective Date, neither
Abbott nor its Affiliates shall undertake any development or
commercialization activities with respect to any [******] for any
Substance Abuse Indication. Notwithstanding the foregoing, Abbott
shall have the express right to undertake development and
commercialization activities relating to [******] for
non-therapeutic and/or non-human uses even if related to
Substance Abuse Indication (which non-therapeutic uses and/or
non-human uses shall include, but not be limited to, imaging,
diagnostics, veterinary medicine, etc.). For the avoidance of
doubt, Abbott shall also have the express right to undertake
development and commercialization activities relating to [******]
(excluding any Compound for Pharmaceutical Uses) for any use or
indication other than any Substance Abuse Indication, as set
forth above.
(c) Notwithstanding SECTIONS 3.2(a) and (b) above, Abbott shall have
the right to use the Process Technology solely in connection with
compounds or products that are not, and do not contain, Compound,
and in its development and commercialization activities related
to the Compound as permitted in this Agreement.
3.3 ASSISTANCE. During the period commencing on the Effective Date and
ending on the first submission to a Regulatory Authority for
Regulatory Approval of the
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third Product indication, Abbott will use commercially reasonable
efforts to provide DAS information (in the possession of Abbott) and
assistance as reasonably required by DAS for regulatory purposes in
connection with this Agreement, provided, that in no event shall
Abbott be obligated to incur expenses as a result of providing such
assistance nor shall Abbott employees be required to spend a
substantial amount of time (collectively, not more than twenty (20)
hours) providing such assistance. In the event that additional time is
required by DAS, the parties shall negotiate in good faith a mutually
acceptable hourly rate to be charged DAS for such Abbott employee
time.
3.4 DAS EXCLUSIVITY. During the Term, neither DAS nor its Affiliates nor
their sublicensees, shall directly or through intermediaries, utilize
the Process Technology for any purpose other than developing, making,
using or selling Compound and/or Product under this Agreement.
4. FEASIBILITY/EVALUATION/DEVELOPMENT/MANUFACTURING/MARKETING/OTHER.
4.1 FEASIBILITY/EVALUATION STUDIES:
(a) DAS shall use commercially reasonable efforts to evaluate the
Compound for at least three (3) indications of Pharmaceutical
Uses. As of the Effective Date, the parties acknowledge that only
cocaine abuse and Parkinson's Disease are recognized indications
for the Compound. For purposes of DAS's obligations under this
Agreement or any Work Plan, the term "commercially reasonable
efforts" shall mean those efforts that would be commercially
reasonable for a company substantially similar to DAS as set
forth generally in the initial Work Plan (EXHIBIT B). DAS shall
have sole responsibility for conducting and/or supervising the
feasibility and evaluation studies on the Compound as set forth
in the Work Plan (EXHIBIT B), which Work Plan shall include a
schedule of the clinical development activities to be conducted
by DAS for the first indication under SECTION 4.3 below.
Beginning with the Effective Date and until the First Commercial
Sale, DAS shall use commercially reasonable efforts to conduct
and/or supervise the studies called for by the Work Plan. All
such studies shall be paid for by DAS. DAS shall provide Abbott
with summaries of such studies, including summaries of reports
and data generated under such studies, at the quarterly review
meetings held pursuant to SECTION 4.2 below (or otherwise), and
all such information shall be treated as DAS's Confidential
Information. Periodically, as the progress of the studies may
dictate, the Work Plan may be amended at DAS's reasonable
discretion, and such amendments shall be reflected in an amended
EXHIBIT B to be prepared, distributed, and attached hereto by
DAS. Recognizing that the Work Plan calls for certain work to be
done by one or more third parties and recognizing such work
(e.g., formulations) may involve the patented subject matter of
such third party, DAS will use commercially reasonable efforts to
(i) provide in its license with the third party that the patented
subject matter of such third party
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may be sublicensed to Abbott in the event that the Compound and
Product are returned to Abbott under SECTIONS 4.3(c) and 4.8; and
(ii) negotiate a royalty-free license/sublicense with such third
party. In the event that DAS is unable to negotiate a
royalty-free license/sublicense, Abbott agrees to assume the
royalty obligations thereunder if it elects to practice under
such license/sublicense following the return of the Compound and
Product under SECTIONS 4.3(c) and 4.8. DAS agrees to promptly
provide Abbott with written notice of the terms of any licenses
entered into with third parties which pertain to the Compound
and/or Product.
(b) Upon commencement of work to develop the second and subsequent
indications of the Product, DAS shall provide Abbott with a Work
Plan for the feasibility and evaluation studies and for the
clinical development activities on the Compound that it proposes
to undertake with respect to the second and subsequent Product
indications, which Work Plan shall contain substantially similar
content and time frames as provided in the initial Work Plan
attached hereto. Such Work Plan shall be in the same general form
as that provided for in SECTION 4.1 above, shall be attached to
this Agreement as EXHIBIT B-2, B-3, etc., and shall be subject to
the same rights of amendment, license and review as provided
herein, including Abbott's rights to initiate an ADR under
SECTION 4.3(c).
4.2 REVIEW: Beginning one month following the Effective Date and until the
First Commercial Sale, three (3) representatives of Abbott and three
(3) representatives of DAS shall meet for informational purposes on a
quarterly basis, rotating such meetings so that one is held via
teleconference in one quarter and the second is held in person the
next quarter, each such meeting to be held at a mutually agreeable
time, to review the progress of each Work Plan, the results of such
work and studies remaining to be completed under the Work Plan, as the
same shall exist from time to time. In the event any such personal
meeting is not held at Abbott Park, DAS shall reimburse Abbott for the
reasonable travel and lodging expenses incurred by up to three (3)
Abbott personnel to attend the meeting. Each meeting shall include
review of the status of Patents and of any proposed studies of
Compound. DAS will provide Abbott with summaries of the data generated
under each Work Plan. In the event either party believes that it would
be beneficial to meet less frequently than quarterly, or that it would
be beneficial to end the practice of such meetings prior to the First
Commercial Sale, then such party shall inform the other party of its
desires, and, if the other party agrees, the parties shall then
establish a mutually agreeable meeting schedule.
4.3 CLINICAL DEVELOPMENT:
(a) DAS shall use commercially reasonable efforts to develop the
Compound for at least three (3) indications of Pharmaceutical
Uses. As of the Effective Date, the parties acknowledge that only
cocaine abuse and Parkinson's Disease are recognized indications
for the Compound. DAS shall have sole responsibility for
designing, conducting and paying for the
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cost of the clinical development of Product and shall use
commercially reasonable efforts to diligently conduct such
clinical development as set forth below. Except as set forth in
SECTION 3.2 above, Abbott hereby agrees that it shall not
undertake any research or development related to Pharmaceutical
Uses of the Compound during the Term, except as may be necessary
following the license granted to Abbott under SECTION 4.8 in the
event of a termination of this Agreement under SECTIONS 8.2, 8.3
or 8.4, or a partial termination of this Agreement under SECTION
4.3(c).
(b) After successfully completing formulation, bioavailability and
delivery work for the first indication of Pharmaceutical Uses,
DAS shall use commercially reasonable efforts to develop two (2)
additional indications of Pharmaceutical Uses. DAS shall be
obligated to commence development of the second such indication
within two (2) years of commencing development of the first
indication. Subject to DAS's reasonable determination of the
commercial viability of a third indication and Abbott's rights
under SECTION 4.3(c) below, DAS shall be obligated to commence
development of the third such indication within two (2) years of
commencing development of the second indication. For purposes of
this SECTION 4.3(b), development of an indication shall be deemed
to have commenced upon enrollment of the first subject in the
first clinical study for an indication using the formulation
selected for clinical development.
(c) In the event DAS breaches a material obligation under this
Agreement or under a Work Plan, Abbott may then advise DAS that
Abbott believes that DAS has breached such material obligation
and that Abbott is adversely impacted thereby. Upon so advising
DAS, Abbott may initiate an alternative dispute resolution
procedure ("ADR") as set forth in EXHIBIT C, and request the ADR
to rule upon whether DAS has breached any such material
obligation. In the event that the neutral party to such ADR
renders a ruling that DAS has breached such material obligation
and that Abbott was adversely impacted thereby, and DAS fails to
comply with the terms of the neutral's ruling within the time
specified therein for compliance, or if such compliance cannot be
fully achieved by such date, DAS has failed to commence
compliance and/or has failed to use diligent efforts to achieve
full compliance as soon thereafter as is reasonably possible,
then Abbott's sole remedy shall be (i) the right to terminate
this Agreement and the licenses granted hereunder, and to obtain
from DAS a license to Improvements under SECTION 4.8; or (ii) if,
at the time Abbott initiates the ADR, the ADR only alleges DAS's
failure to develop the Product for some, but not all of those
indications, then Abbott shall only be entitled to a partial
termination of this Agreement and the licenses granted hereunder
as to those Product indications for which failure to develop is
alleged and determined by the ADR, and shall obtain from DAS a
license to Improvements under SECTION 4.8 as to Improvements only
with respect to such Product indications, with no effect on DAS's
rights hereunder for those Product indications and Improvements
that the
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neutral party has not declared have not been adequately developed
by DAS hereunder.
4.4 COMMERCIALIZATION: DAS shall use commercially reasonable efforts to
develop and commercialize the Product in at least the following major
countries: United States, Canada, Germany, France, U.K., Italy and
Spain (each a "Major Country"), at least three (3) additional European
countries, at least two (2) Latin American countries, and Japan, using
at least that level of effort it would use with similar compounds in
its portfolio, provided that DAS's marketing analyses support the
profitability of Product commercialization in any such country. In the
event that DAS elects not to market in a particular country(ies),
either directly or through third parties, Abbott shall have the right,
upon notice to DAS, to market, either directly or through third
parties, the Product in each such country, by paying to DAS the same
royalty to which Abbott would otherwise be entitled if DAS was
marketing the Product in such country. DAS agrees to provide Product
to Abbott for sale in each such country at the same cost (as evidenced
by DAS's internal records) incurred by DAS in procuring or
manufacturing Product for its own sales. If there is any material
disagreement between the parties concerning whether commercially
reasonable efforts towards commercialization have been made with
respect to a particular indication after Regulatory Approval in a
country, then the matter may be submitted to ADR where remedies for
failure to expend such efforts could include a requirement to expend
additional efforts to make up for any failures, damages and/or
termination of the license rights in the applicable country, unless
DAS chooses to undertake such activities and expenses as needed to
correct the failure.
4.5 MARKETING: DAS shall have sole responsibility for marketing Product,
including entering into any co-marketing and/or co-promotion
arrangements. DAS shall distribute all Product samples in the United
States in accordance with the Prescription Drug Marketing Act.
4.6 MANUFACTURING: DAS and its Affiliates shall have sole responsibility
for manufacturing Product or having Product manufactured for it by a
third party manufacturer. However, during the three (3) month period
following the Effective Date, DAS will negotiate in good faith
exclusively with Abbott with respect to the manufacture of the Product
for clinical and commercial supply. Thereafter, in the event DAS
negotiates terms and conditions with a third party manufacturer of
Product, DAS shall, prior to executing a definitive agreement with
such third party, provide Abbott with a summary of the material terms
and conditions and allow Abbott the opportunity to meet or beat such
terms and conditions. If Abbott fails to meet or beat such terms and
conditions within twenty-one (21) days of its receipt, DAS shall be
free to execute a definitive agreement for the manufacture and supply
of Product with such third party.
4.7 SUBLICENSING:
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(a) During the two (2) year period following the Effective Date, DAS
may sublicense to unrelated third parties its rights to one or
more Product indications under this Agreement, only with Abbott's
prior written consent, which consent shall not be unreasonably
withheld. After such two year period, DAS may sublicense to
unrelated third parties its rights to one or more Product
indications under this Agreement without obtaining Abbott's prior
written consent. Each sublicense shall be in writing and shall
include provisions acknowledging that such sublicense is subject
to the license granted DAS under this Agreement, that each
sublicensee shall make reports and keep and maintain records of
sales to at least the same extent as required under this
Agreement, allowing Abbott the same access and audit rights
permitted under this Agreement, and that such sublicense shall be
automatically terminated upon termination of this Agreement. DAS
shall remain primarily liable for the performance of
sublicensees. DAS shall provide Abbott with a copy of each
sublicense agreement.
(b) All consideration received by DAS as a result of each sublicense
of its rights under this Agreement and any sub-sublicense
agreement (including, but not limited to fees, payments,
milestones, royalties, etc.) (collectively, the "SUBLICENSE
CONSIDERATION") shall be divided between DAS and Abbott as
follows:
(i) For any sublicense executed between the Effective Date
and the one year anniversary thereof, the Sublicense
Consideration shall be shared [******] to Abbott and
[******] to DAS, regardless of when paid to DAS under
the sublicense.
(ii) For any sublicense executed after the first anniversary
of the Effective Date but on or before the date on which
the first NDA for the first Product indication is filed,
the Sublicense Consideration shall be shared [******] to
DAS and [******] to Abbott, regardless of when paid to
DAS under the sublicense.
(iii) For any sublicense executed after the date on which the
first NDA for the first Product indication is filed, but
prior to the First Commercial Sale, the Sublicense
Consideration shall be shared [******] to DAS and [******]
to Abbott, regardless of when paid to DAS under the
sublicense.
(iv) For any sublicense executed after the First Commercial
Sale, but prior to the fifth (5th) anniversary of the
First Commercial Sale, the Sublicense Consideration shall
be shared [******] to DAS and [******] to Abbott,
regardless of when paid to DAS under the sublicense.
(v) For any sublicense executed after the fifth (5th)
anniversary of the First Commercial Sale, the Sublicense
Consideration shall be shared [******] to DAS and [******]
to Abbott.
(c) Furthermore, the amount of such Sublicense Consideration
payable to Abbott under SECTION 4.7(b) above shall be reduced
(or credited) by the amount DAS receives from all sublicenses
as reimbursement for actual and reasonable research and
development costs incurred by DAS in its evaluation and
development of the Compound, subject to a cap of [******],
which total costs shall be allocated and deducted ratably over
the period during which DAS is receiving royalty payments from
sublicenses. Such research and development costs shall consist
of those customary costs to perform a clinical protocol which
are documented and are payable upon receipt of a signed
clinical study report. All research and development costs for
which reimbursement is requested by DAS shall be measurable
and are subject to Abbott's audit rights under SECTION 5.7(c).
(d) Notwithstanding anything to the contrary contained in this
SECTION 4.7, no sublicense or sub-sublicense may be entered into
by DAS without Abbott's prior written approval, which may be
withheld by Abbott in its
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sole discretion, if such sublicense would result in [******]. For
example, if [******].
4.8 IMPROVEMENTS: All Improvements and all new patents which relate to the
Compound or the Product which come into existence during the Term and
which relate to or are derived from work done by or for DAS or their
Affiliates or sublicensees relating to the Compound without any
contribution by Abbott, its Affiliates, contractors, or agents, shall
be deemed the property of DAS. Provided, however, in the event this
Agreement is terminated by Abbott for any reason, as set forth in
ARTICLE 8, or is partially terminated by Abbott as set forth in
SECTION 4.3(c), all such Improvements shall be exclusively licensed to
Abbott solely for use with the Compound and Product on a worldwide,
royalty-free, paid-up basis, and DAS retains all rights in and to any
such Improvements for any and all other uses.
5. EXECUTION FEE, MILESTONE PAYMENTS AND ROYALTIES.
5.1 EXECUTION FEE. DAS shall pay to Abbott Four Hundred Thousand
Dollars ($400,000) on the Effective Date.
5.2 MILESTONE PAYMENTS (FIRST SUBSTANCE ABUSE INDICATION): DAS shall make
the following milestone payments to Abbott for the first Substance
Abuse Indication for the Product within [******], regardless of
whether or not DAS has sublicensed any of its rights under this
Agreement:
(a) FIRST MILESTONE PAYMENT: [******].
(b) SECOND MILESTONE PAYMENT: [******].
(c) THIRD MILESTONE PAYMENT: [******].
(d) FOURTH MILESTONE PAYMENT: [******].
5.3 MILESTONE PAYMENTS (PARKINSON'S INDICATION): DAS shall make the
following milestone payments to Abbott for the [******]
(a) FIRST MILESTONE PAYMENT: [******].
(b) SECOND MILESTONE PAYMENT: [******].
(c) THIRD MILESTONE PAYMENT: [******].
(d) FOURTH MILESTONE PAYMENT: [******].
5.4 MILESTONE PAYMENTS [******] DAS shall make the following milestone
payments to Abbott for the first Non-Parkinson's Disease and
Non-Substance Abuse Indication for the Product [******] occurrence of
the following events, regardless of whether or not DAS has sublicensed
any of its rights under this Agreement:
[******] Confidential Treatment Requested. The confidential portions have
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(a) FIRST MILESTONE PAYMENT: [******]
(b) SECOND MILESTONE PAYMENT: [******]
(c) THIRD MILESTONE PAYMENT: [******]
(d) FOURTH MILESTONE PAYMENT: [******]
5.5 MILESTONE PAYMENTS (OTHER INDICATIONS): [******]
5.6 SALES MILESTONES:
(a) Upon the first attainment of [******] of all Products in a
calendar year of [******] payment is otherwise due.
(b) Upon the first attainment of [******] of all Products in a
calendar year of [******]
(c) For purposes of calculating Net Sales of all Products under this
SECTION 5.6 for the one-time payment of sales milestones, Net
Sales shall include the combined sales of Products by DAS, its
Affiliates, their contract sales forces and all sublicensees and
their contract sales forces.
5.7 ROYALTY PAYMENTS:
(a) ROYALTY RATE AND ROYALTY PERIOD: Beginning with the First
Commercial Sale by DAS, any Affiliates of DAS, or any contract
sales force of DAS or its Affiliates, DAS shall pay to Abbott
a royalty on annual aggregate worldwide Net Sales of all
Product for all Pharmaceutical Uses in accordance with the
following schedule:
ANNUAL NET SALES ROYALTY
[******] [******]
[******] [******]
[******] [******]
[******] [******]
If DAS is required to pay royalties in excess of [******] of its
annual Net Sales of Product to any third party in order to develop
Product, such third party royalty payments in excess of [******]
shall be shared equally by DAS and Abbott, up to an additional
[******] and Abbott's share thereof (up to a maximum of [******]
shall be credited accordingly against royalty payments due to
Abbott hereunder if annual Net Sales of Product in a calendar year
exceed [******] provided, however, that Abbott's liability
hereunder for such annual royalty credits shall not exceed [******]
of annual Net Sales.
For example, if DAS is obligated to make third party royalty
payments equal to [******] of annual Net Sales, DAS shall be solely
responsible for the first [******], the next [******] shall be
shared equally by DAS and Abbott, and Abbott's share [******] shall
be credited dollar for dollar against royalty payments due to Abbott
hereunder, if and only if, annual Net Sales in such calendar year
are greater than [******]. The remaining balance of [******] of
third party royalties shall by DAS' sole responsibility.
The obligation of DAS to pay a royalty to Abbott shall be on a
country-by-country basis and shall continue with respect to Product
manufactured or sold in a country until such time as the last
Patent included in the Abbott Technology covering such Product has
expired and/or is invalidated in such country ("ROYALTY PERIOD").
(b) REDUCED ROYALTY PERIOD: Upon the end of the Royalty Period in any
country of the Territory on a country-by-country basis, DAS shall
have an exclusive, perpetual license under Abbott's Technology in
such country of the Territory, with all of the rights granted under
Article 2 hereof, except that, for so long as Product continues to
be sold in such country by DAS, DAS shall pay to Abbott a reduced
royalty equal to [******] of the royalty that would otherwise be
due during the Royalty Period (the "REDUCED ROYALTY PERIOD").
The royalty payable for the Reduced Royalty Period shall be
calculated by (i) adding total [******] in all countries
wherein a royalty (full or reduced) is payable hereunder; (ii)
taking that portion of [******] which are attributable to countries
under a reduced royalty and multiplying such amount by the product
of the applicable royalty rate times [******]; (iii) taking that
portion of [******] which are attributable to countries under a
full royalty rate and multiplying such amount by the [******]; and
(iv) adding the products obtained in (ii) and (iii) above to
determine the total amount of royalty payable.
For example, if [******]:
(i) [******]
[******] Confidential Treatment Requested. The confidential portions have
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(ii) [******]
(iii) [******]
(iv) [******]
(c) ROYALTY REPORTS AND PAYMENTS: Beginning with the [******]. Each report
shall be accompanied by [******]. In the event that conversion from
foreign currency is required in calculating a royalty payment
hereunder, the exchange rate used shall be the ratio in effect at the
end of the last business day of the applicable quarter for which
royalties are calculated, as reported by THE WALL STREET JOURNAL, or a
substantially similar global publication if THE WALL STREET JOURNAL is
no longer published.
(d) BOOKS AND RECORDS/AUDIT RIGHTS: DAS shall keep books and records
accurately showing all Products manufactured, used or sold under the
terms of this Agreement. The relevant portions of such books and
records shall be open to inspection by representatives of Abbott, at
Abbott's cost, solely for the purposes of determining the correctness
of the royalties payable under this Agreement. Such audit, conducted
no more than one time per calendar year, shall be during normal
business hours after reasonable advance notice and subject to suitable
confidentiality provisions. In the event an audit shows a deficiency
to be due, [******]. If the audit shows that an excess was paid, DAS
shall be entitled to deduct the amount of such excess from the payment
due for the next calendar quarter. Such books and records shall be
preserved for a period of at least three (3) years after the date of
the royalty payment to which they pertain, and no audit may be
conducted with respect to royalties due in any calendar year that is
more than two (2) years preceding the calendar year in which the audit
is being conducted. Books and records for a given calendar year may
only be audited once.
(e) WITHHOLDING TAXES ON ROYALTIES: Where any sum due to be paid to Abbott
hereunder is subject to any withholding or similar tax, the parties
shall use all reasonable efforts to do all such acts and things and to
sign all such documents as will enable them to take advantage of any
applicable double taxation agreement or treaty. In the event there is
no applicable double taxation agreement or treaty, or if an applicable
double taxation agreement or treaty reduces but does not eliminate
such withholding or similar tax, DAS shall pay such withholding or
similar tax to the appropriate government authority, deduct the amount
paid from the amount due Abbott and secure and send to Abbott the best
available evidence of such payment sufficient to enable Abbott to
obtain a deduction for such withheld taxes or obtain a refund thereof.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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6. REPRESENTATIONS/WARRANTIES.
6.1 REPRESENTATIONS AND WARRANTIES OF ABBOTT: Abbott represents and
warrants that it is duly organized, validly existing and in good
standing under the laws of Illinois, that it has full corporate power
and authority to enter into this Agreement and to carry out its
provisions, and that there are no outstanding agreements, assignments
or encumbrances in existence that are inconsistent with the provisions
of this Agreement. Abbott further represents and warrants that it is
duly authorized to execute and deliver this Agreement and to perform
its obligations hereunder and that the execution, delivery and
performance of this Agreement by it does not require the consent,
approval or authorization of or notice, filing or registration with
any governmental or regulatory agency.
6.2 REPRESENTATIONS AND WARRANTIES OF DAS: DAS represents and warrants
that it is duly organized, validly existing and in good standing under
the laws of California, that it has full corporate power and authority
to enter into this Agreement and to carry out its provisions, and that
there are no outstanding agreements, assignments or encumbrances in
existence that are inconsistent with the provisions of this Agreement.
DAS further represents and warrants that it is duly authorized to
execute and deliver this Agreement and to perform its obligations
hereunder, and that the execution, delivery and performance of this
Agreement by it does not require the consent, approval or
authorization of or notice, filing or registration with any
governmental agency or Regulatory Authority.
6.3 INDEMNIFICATION BY DAS: DAS shall indemnify and hold Abbott, its
Affiliates and their directors, officers, employees and agents
harmless from and against any and all liabilities, actions, suits,
claims, demands, prosecutions, damages, costs, expenses or money
judgments finally awarded (including reasonable legal fees)
(collectively, "LIABILITIES") incurred by or instituted or rendered
against Abbott to the extent such Liabilities result from a third
party claim arising from the willful misconduct or the negligent acts
or omissions of DAS or its Affiliates or DAS's material breach of this
Agreement, except to the extent such third party claims arise out of
the gross negligence or willful misconduct of Abbott, its Affiliates
and their directors, officers, employees and agents, and provided that
Abbott gives DAS prompt notice in writing of any such claim or lawsuit
and permits DAS to undertake sole control of the defense and
settlement thereof at DAS's expense. In any such claim or lawsuit:
(a) Abbott will cooperate in the defense by providing access to
witnesses and evidence available to it. Abbott shall have the
right to participate, at its expense, in any defense to the
extent that in its reasonable judgment Abbott may be prejudiced
by DAS's sole defense thereof.
(b) With respect to this Agreement, Abbott shall not settle, offer to
settle or admit liability in any claim or suit in which Abbott
intends to seek
[******] Confidential Treatment Requested. The confidential portions have
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indemnification by DAS without the written consent of a duly
authorized officer of DAS.
6.4 REPORTABLE OCCURRENCES: Each party warrants that it shall advise the
other promptly of any occurrence which is reported or reportable by it
to the Regulatory Authorities relating in any way to the Compound or
the Product.
6.5 LIMITATION: EXCEPT FOR THE EXPRESS WARRANTIES IN THIS ARTICLE 6,
NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, IN FACT OR BY
OPERATION OF LAW, STATUTORY OR OTHERWISE. EACH PARTY SPECIFICALLY
DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. EXCEPT FOR VIOLATIONS OF ARTICLE 7 AND AMOUNTS
FINALLY AWARDED FOR INDEMNIFICATION FOR THIRD PARTY LIABILITIES UNDER
SECTION 6.3, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY HERETO
OR TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED PROFITS RELATING TO
THE SAME) ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER
SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR
OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS
ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME.
7. CONFIDENTIALITY AND NON-DISCLOSURE.
7.1 NONDISCLOSURE: Neither party shall use or disclose any Confidential
Information received by it from the other party pursuant to this
Agreement without the prior written consent of the other. This
obligation will continue for a period of seven (7) years after
termination of this Agreement or expiration of the Term, whichever is
earlier. The parties recognized in SECTION 3.2 of this Agreement that
Abbott may be utilizing Compound, Process Technology and Abbott
Technology in certain limited circumstances, including, but not
limited to, non-Pharmaceutical Uses and for internal research
purposes. Abbott shall be permitted to disclose information pertaining
to the Compound, the Abbott Technology and the Process Technology in
such circumstances only if the recipient of such information is under
a duty of confidentiality to Abbott, and further, provided that no
such disclosure of such information shall be made for Pharmaceutical
Uses, nor shall Confidential Information of DAS be disclosed.
7.2 RESTRICTION: Each party shall restrict dissemination of Confidential
Information to those of its employees, contractors, agents and
sublicensees (if any) who have an actual need to know and have a legal
obligation to protect the confidentiality of such Confidential
Information. All Confidential Information disclosed by one party to
the other shall remain the sole property of the disclosing party and
neither party shall obtain any right of any kind to the Confidential
Information disclosed, except as granted under this Agreement.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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7.3 RESTRICTION EXEMPTIONS: Nothing contained in this ARTICLE 7 shall be
construed to restrict the parties from using or disclosing
Confidential Information solely to the extent and solely as required:
(a) for regulatory, tax or customs reasons;
(b) for audit purposes;
(c) by court order or other governmental order or request; or
(d) to perform acts permitted by this Agreement, including (i)
disclosure by DAS to third parties undertaking feasibility and
evaluation studies, clinical trials and the like on behalf of
DAS, so long as such third parties are under a legal obligation
to DAS to protect the confidentiality of such Confidential
Information, or (ii) disclosure by DAS in connection with the
marketing and commercial sale of Product, to the extent required
by law.
8. TERM AND TERMINATION.
8.1 This Agreement shall continue in effect unless and until terminated
as provided in this SECTION 8 or in SECTIONS 4.3 or 4.4. Upon the
end of the Royalty Period in any country of the Territory, DAS
shall have an exclusive, perpetual and irrevocable license under
Abbott's Technology, with all of the rights granted under ARTICLE 2
hereof, and without any further obligation to Abbott, except for
the payment obligations accruing prior to such date and except for
any obligation to pay a reduced royalty for the Reduced Royalty
Period, as provided in SECTION 5.7(b) hereof.
8.2 If DAS determines in its reasonable scientific and commercial judgment
that the Compound does not have an acceptable profile or a reasonable
likelihood of commercial success, or that it is economically or
technically impractical for DAS to continue developing and marketing
the Product, DAS shall have the right to terminate this Agreement upon
ninety (90) days written notice, at the end of which the termination
shall be effective. Upon such termination DAS shall pay all payments,
milestones or royalties which may have become due prior to the
effective date of such termination, and DAS shall assign and Abbott
shall be entitled to retain for its own use, all studies and
information relating to the Compound and shall be granted a license to
all Improvements as set forth in SECTION 4.8 hereof.
8.3 Either party may terminate this Agreement by giving to the other party
prior written notice of not less than thirty (30) days in the case of
a monetary breach and of not less than ninety (90) days in the event
the other party shall commit a non-monetary material breach of this
Agreement, and such breaching party shall fail to cure, or commence
action to cure, such breach during such thirty (30) or ninety (90) day
period, as applicable. In the case of a non-monetary breach, the cure
period may be extended for such longer period as may reasonably be
necessary if cure is not reasonably possible within the initial ninety
(90) day period, provided the breaching party continues its diligent
efforts to cure. No
[******] Confidential Treatment Requested. The confidential portions have
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such cancellation and termination shall release the breaching party
from any obligations hereunder incurred prior thereto. In the event of
a dispute whether a material breach has occurred, the existence of
material breach shall be determined using the ADR set forth in EXHIBIT
C. A party's right to terminate this Agreement shall only apply if the
breaching party fails to cure such breach in the manner required by
the final judgment of the ADR hearing. In the event that this
Agreement is terminated for DAS's material breach, Abbott shall be
entitled to retain for its own use all funds previously paid by DAS,
together with all studies, information and Improvements generated
hereunder. In the event that this Agreement is terminated for Abbott's
material breach, DAS shall not be liable for payments not yet due and
payable under ARTICLE 5 hereof, and DAS shall be entitled to retain
for its own use all studies, information and Improvements generated
hereunder.
8.4 Either party may terminate this Agreement on thirty (30) days notice
if the other party passes a resolution or the court makes an order for
its winding up; or has a receiver or administrator appointed over its
business or all of its assets; or is or becomes bankrupt; or ceases
its business operations. In the event that this Agreement is
terminated under this SECTION 8.4 subject to the other terms of this
Agreement, the terminating party shall be entitled to retain for its
own use all studies, information and Improvements (subject to the
license set forth in SECTION 4.8 as it concerns Abbott) generated
hereunder. Notwithstanding the bankruptcy or insolvency of Abbott or
the impairment of performance by Abbott of its obligations under this
Agreement as a result of bankruptcy or insolvency of Abbott, DAS shall
be entitled to retain the licenses granted herein, without any further
obligation to Abbott other than the payment obligations under ARTICLE
5.
8.5 Termination of this Agreement shall be without prejudice to any rights
of either party against the other which may have accrued up to the
date such termination becomes effective.
8.6 All causes of action accruing to either party under this Agreement
shall survive expiration or termination of this Agreement for any
reason.
8.7 Upon any termination or expiration of this Agreement, each party shall
promptly return to the other party all written Confidential
Information, and all copies thereof (retaining one copy of the
Confidential Information of the other in its confidential files for
archival purposes only), which is not covered by a paid-up license or
other rights specified herein surviving such termination or
expiration.
9. INFRINGEMENT OF PATENTS BY THIRD PARTY. In the event of an actual or
suspected infringement of a Patent by a third party, the following shall
apply:
9.1 NOTICE: Each party shall give the other written notice if one of them
becomes aware of any infringement by a third party of any Patent. Upon
notice of any such infringement, the parties shall promptly consult
with one another with a view toward reaching agreement on a course of
action to be pursued.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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9.2 DAS'S RIGHT TO BRING INFRINGEMENT ACTION:
(a) DAS ELECTION: If a third party infringes any Patent, DAS shall
have the first right, but not the obligation, to institute and
prosecute an action or proceeding to abate such infringement and
to resolve such matter by settlement or otherwise.
(i) DAS shall notify Abbott of its intention to bring an action
or proceeding prior to filing the same and in sufficient
time to allow Abbott the opportunity to discuss with DAS the
choice of counsel for such matter. DAS shall keep Abbott
timely informed of material developments in the prosecution
or settlement of such action or proceeding. DAS shall be
responsible for all fees and expenses of any action or
proceeding against infringers which DAS initiates. Abbott
shall cooperate fully at its expense by joining as a party
plaintiff if reasonably requested to do so by DAS or if
required to do so by law to maintain such action or
proceeding and by executing and making available such
documents as DAS may reasonably request. Abbott may be
represented by counsel in any such legal proceedings, at
Abbott's own expense.
(ii) If DAS elects not to exercise such first right, Abbott shall
have the right, at its discretion, to institute and
prosecute an action or proceeding to abate such infringement
and to resolve such matter by settlement or otherwise. DAS
shall cooperate fully by joining as a party plaintiff if
reasonably requested to do so by Abbott or if required to do
so by law to maintain such action and by executing and
making available such documents as Abbott may reasonably
request. DAS may be represented by counsel in any such
action, at its own expense.
(b) DAS USE OF PROCEEDS: All amounts of every kind and nature
recovered from an action or proceeding of infringement brought by
DAS shall belong to DAS, and shall be used first to reimburse DAS
for its documented and actual costs of prosecution, including
attorneys' fees, expert fees and all other related expenses,
second to reimburse Abbott for its documented and actual costs if
it is represented by counsel in the proceeding, and the balance
shall thereafter be considered Net Sales under this Agreement and
subject to royalty payments under SECTION 5.7.
(c) ABBOTT'S USE OF PROCEEDS: All amounts of every kind and nature
recovered from an action or proceeding of infringement brought by
Abbott shall belong to Abbott, and shall first be used to
reimburse Abbott for its documented and actual costs of
prosecution, second to reimburse DAS for its documented and
actual costs if it is represented by counsel in the proceedings,
and the balance shall belong to Abbott.
[******] Confidential Treatment Requested. The confidential portions have
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10. INFRINGEMENT OF THIRD PARTY RIGHTS; DAS DEFENSE OF SUIT: If Abbott, its
Affiliates, DAS, its Affiliates, sublicensees, distributors or other customers
are sued or threatened with suit in the Territory by a third party alleging
infringement in one or more countries of the Territory of patents or other
intellectual property rights that are alleged to cover the manufacture, use,
sale, import, export or distribution of one or more Products, Abbott or DAS,
whichever is relevant, will promptly notify the other in writing and provide a
copy of the lawsuit or claim. DAS shall control the defense in any such claim or
suit. If DAS expends any amounts in connection with any third party claim of
infringement or misappropriation, or is required to pay a royalty or other
amount to a third party for the manufacture, use, sale, import, export or
distribution of one or more Products in the Territory as a result of a final
judgment or settlement, such amounts shall be fully deductible by DAS from the
royalties payable and accruing to Abbott thereafter under SECTION 5.7, but only
where such claim, judgement or settlement arises out of DAS's practice of a
Patent, the Process Technology or use of the Abbott Technology. Abbott shall
fully cooperate with DAS in the defense of any such action at Abbott's expense.
DAS shall have the right to settle any such suit, including the right to grant
one or more sublicenses, with the prior written approval, which approval shall
not unreasonably be withheld, provided that DAS shall not otherwise have the
right to surrender, limit or adversely affect any rights to the Patents.
11. Patent Prosecution and Maintenance; Patent Costs; Patent Term Extension.
11.1 DISCLOSURE OF PATENTS/APPLICATIONS TO DAS: Within thirty (30) days
following the Effective Date, Abbott shall disclose to DAS the
complete text of, and all other information in its possession or
control directly related to (a) all patent applications included in
the Patents filed anywhere in the Territory; and (b) all patents
included in the Patents as well as all information in Abbott's, its
Affiliates and its patent counsel's possession concerning the
institution or possible institution of any interference, opposition,
reexamination, reissue, revocation, nullification or any official
proceeding involving an issued patent included in the Patents anywhere
in the Territory.
11.2 PROSECUTION AND MAINTENANCE: Abbott shall be solely responsible for
the preparation, filing, prosecution and maintenance of the Patents
and Process Technology patents in Abbott's name, including oppositions
and interferences, subject to DAS's right to assume such duties in the
event Abbott reasonably fails to adequately prepare, file, prosecute
and maintain the Patents and Process Technology patents. Abbott and
DAS shall consult and cooperate with each other, and Abbott shall keep
DAS reasonably informed, with respect to the prosecution and
maintenance of the Patents and Process Technology patents hereunder.
Abbott will provide DAS with copies of all material documents received
or prepared by Abbott in the prosecution and maintenance of the
Patents and Process Technology patents. Abbott shall provide copies in
a timely manner to allow DAS an opportunity, if it so elects, to
review and comment on Abbott's proposed patent strategy. Abbott shall
invoice DAS and DAS shall promptly reimburse Abbott for one-half of
all reasonable direct prosecution and maintenance costs (including but
not limited to, outside attorneys' and translation fees) incurred by
Abbott for all of the Patents and Process Technology patents after the
Effective Date.
[******] Confidential Treatment Requested. The confidential portions have
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11.3 PATENT EXTENSIONS: DAS shall have the right and sole responsibility
for obtaining patent term extensions under the provisions of 35 USC
Section 156 for any U.S. Patent and for non-U.S. Patents under
similar provisions of law of other countries involving a Product
which has obtained Regulatory Approval.
12. TRADEMARK: DAS may select any Trademark or Trademarks for the Product in
the Territory. All costs related to the selection and maintenance of the
Trademark(s) shall be borne by DAS. The Trademark(s) shall be owned by DAS, and
Abbott shall have no claims or rights in or to the Trademark(s).
13. IMPROVEMENTS: All Improvements made solely by DAS and/or its Affiliates
hereunder shall be the sole and exclusive property of DAS. All Improvements made
solely by Abbott and/or its Affiliates shall become part of Abbott's Technology,
licensed exclusively to DAS with all of the rights set forth in ARTICLE 2
hereof. All Improvements made jointly by Abbott and DAS (or by their Affiliates)
hereunder shall become jointly owned, provided that to the extent that such
Improvements are owned by Abbott, they shall be included in the license granted
to DAS under ARTICLE 2 hereof. The provisions of this ARTICLE 13 are subject to
the rights of the terminating party under ARTICLE 8 hereof.
14. MISCELLANEOUS.
14.1 FORCE MAJEURE: If the performance by either party of any of its
obligations under this Agreement shall be prevented by circumstances
beyond its reasonable control which could not have been avoided by the
exercise of reasonable diligence, then such party shall be excused
from the performance of that obligation for the duration of the event.
The affected party shall promptly notify the other party in writing
should such circumstances arise, give an indication of the likely
extent and duration thereof, and shall use commercially reasonable
efforts to resume performance of its obligations as soon as
practicable.
14.2 NOTICES: Any notice required to be given or made under this Agreement
by one of the parties hereto to the other shall be in writing, by
personal delivery, registered U.S. mail or overnight courier,
addressed to such other party at its address indicated below, or to
such other address as the addressee shall have last furnished in
writing to the addressor and shall be effective upon the date of
receipt.
If to DAS: Drug Abuse Sciences, Inc.
330 Distel Circle
Suite 150
Los Altos, CA 94022
Attn: Philippe Pouletty, M.D., CEO and Chairman
If to Abbott: Abbott Laboratories
100 Abbott Park Road
Dept. 309; Bldg. AP30
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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Abbott Park, IL 60064-3537
Attn: Senior Vice President,
Pharmaceutical Operations
With a copy to: Abbott Laboratories
100 Abbott Park Road
Dept. 364; Bldg. AP6D
Abbott Park, IL 60064-6032
Attn: Senior Vice President,
General Counsel and Secretary
14.3 APPLICABLE LAW/COMPLIANCE: This Agreement shall be governed by and
construed in accordance with the laws of the State of New York,
excluding its conflict of laws provision. Each party hereto shall
comply with all applicable laws, rules, ordinances, guidelines,
consent decrees and regulations of any federal, state or other
governmental authority.
14.4 ENTIRE AGREEMENT: This Agreement and the attachments (Exhibits)
contain the entire understanding of the parties with respect to the
subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly
merged in and made a part of this Agreement. This Agreement may be
amended, or any term hereof modified, only by a written instrument
duly executed by both parties hereto.
14.5 COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
14.6 SEVERABILITY/HEADINGS: If any provision of this Agreement is deemed
unenforceable, the remainder of the Agreement will not be affected
and, if appropriate, the parties will attempt to replace the
unenforceable provision with a new provision that, to the extent
possible, reflects the parties' original intent. The captions and
headings used in this Agreement are for reference only and are not to
be construed in any way as terms or used to interpret the provisions
of this Agreement.
14.7 ASSIGNMENT: Neither party may without written approval of the other
assign this Agreement or transfer its interest or any part thereof
under this Agreement to any third party except that (i) either party
may assign this Agreement without consent to a third party that
acquires all or substantially all of the business to which this
Agreement pertains, or, (ii) either party may assign this Agreement in
whole or part to any Affiliate or sublicensee of that party and such
party hereby guarantees the performance by such Affiliates and
sublicensees.
14.8 DISPUTE RESOLUTION: The parties hereto shall attempt to settle any
dispute arising out of or relating to this Agreement in an amicable
way. Except for claims for injunctive or other equitable relief, which
may be brought in any court of
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been filed separately with the Securities & Exchange Commission.
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competent jurisdiction, any controversy, claim or right of termination
for cause which may arise under, out of, in connection with, or
relating to this Agreement, or any breach thereof, shall be settled
according to the Alternative Dispute Resolution provisions attached
hereto as EXHIBIT C.
14.9 INDEPENDENT CONTRACTOR: It is understood that both parties hereto are
independent contractors and engage in the operation of their own
respective businesses and neither party hereto is to be considered the
agent of the other party for any purpose whatsoever and neither party
has any authority to enter into any contract or assume any obligation
for the other party or to make any warranty or representation on
behalf of the other party. Each party shall be fully responsible for
its own employees, servants and agents, and the employees, servants
and agents of one party shall not be deemed to be employees, servants
and agents of the other party for any purpose whatsoever.
14.10 BOARD OF DIRECTOR APPROVAL: This Agreement is subject to approval of
DAS's Board of Directors, notice of which shall be given by DAS to
Abbott within five (5) days of the date hereof. In the event DAS fails
to give notice within such time period, Board of Director approval
will be deemed to have been given.
14.11 PUBLICITY: No press release or other public announcement shall be
made by either party concerning the execution of this Agreement or the
fact that DAS has licensed the Compound from Abbott. Neither party
shall use the name of the other party, its officers, the other party's
employees and agents for purposes of any public commercial activity
without the other party's prior written consent, except where the name
of the other party must be disclosed as a matter of law. Should either
party be required by law to make a disclosure, the disclosing party
shall submit a copy of the proposed disclosure to the other party for
review. The non-disclosing party shall have three (3) weeks to review
and comment on the content of such disclosure. The disclosing party,
subject to legal requirements, shall use all reasonable efforts to
accommodate the non-disclosing party's comments. For non-routine
matters like an emergency, special circumstance, or other situation
where the law compels a disclosure in less than three (3) week's time,
the non-disclosing party agrees to use commercially reasonable efforts
to provide its review and comment in order to meet the disclosing
party's timetable.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.
ABBOTT LABORATORIES DRUG ABUSE SCIENCES, INC.
By: /s/ Arthur J. Higgins By: /s/ Philippe Pouletty
--------------------------------- ---------------------------------
Name: Arthur J. Higgins Name: Philippe Pouletty, M.D.
------------------------------- --------------------------------
Its: Senior Vice President, Its: Chairman and CEO
Pharmaceutical Operations
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
<PAGE>
EXHIBIT A
TO
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
ABBOTT LABORATORIES
AND
DRUG ABUSE SCIENCES, INC.
DATED AUGUST ________, 2000
PATENTS AND PATENT APPLICATIONS
U.S. Patent No. 5,597,832
Corresponding Pending Ex-U.S. patent applications:
Country Application # Filing Date
----------------------------------------------
Canada 2,159,481 03/18/1994
EP 94912799.7 03/18/1994
Israel 108,993 03/16/1994
Korea 95704355 03/18/1994
Norway 19953957 03/18/1994
Philippines 48037 04/05/1994
PC PCT/US94/02894 03/18/1994
Corresponding Issued Ex-U.S. patent applications:
Country Application # Filing Date
----------------------------------------------
Australia 6520394 03/18/1994
China 94912799.7 03/18/1994
Japan 108,993 03/18/1994
Mexico 95704355 03/29/1994
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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EXHIBIT B
TO
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
ABBOTT LABORATORIES
AND
DRUG ABUSE SCIENCES, INC.
DATED AUGUST _______, 2000
WORK PLAN
------------------------------------------------------------------------------------------------------------------------
TITLE DESCRIPTION INVESTIGATOR DURATION EXPECTED
COMPLETION
------------------------------------------------------------------------------------------------------------------------
Proof of Concept on IV - [******] To be determined [******] 06.01
formulation
------------------------------------------------------------------------------------------------------------------------
Formulation Improvement - [******] [******] [******] 12.01
09.02
------------------------------------------------------------------------------------------------------------------------
[******] - [******] To Be Determined [******] 3.03
- End points: [******]
------------------------------------------------------------------------------------------------------------------------
Pivotal Trial - [******] [******] [******] 03.04
------------------------------------------------------------------------------------------------------------------------
NDA Filing, US and EU [******] 05.04
------------------------------------------------------------------------------------------------------------------------
NDA approval US 12.04
NDA approval EU 06.05
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[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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EXHIBIT C
TO
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
ABBOTT LABORATORIES
AND
DRUG ABUSE SCIENCES, INC.
DATED AUGUST ________, 2000
ALTERNATIVE DISPUTE RESOLUTION
The parties recognize that a bona fide dispute as to certain matters may
arise from time to time during the term of this Agreement which relates to
either party's rights and/or obligations. To have such a dispute resolved by
this Alternative Dispute Resolution (ADR) provision, a party must send written
notice of the dispute to the other party for attempted resolution by good faith
negotiations between their respective presidents (or their equivalents) of the
affected subsidiaries, divisions, or business units within twenty-eight (28)
days after such notice is received (all references to "days" in this ADR
provision are to calendar days). If the matter has not been resolved within
twenty-eight (28) days of the notice of the dispute, or if the parties fail to
meet within such twenty-eight (28) days, either party may initiate an ADR
proceeding as provided herein. The parties shall have the right to be
represented by counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the
other party of the issues to be resolved by ADR. Within fourteen (14) days after
receipt of such notice, the other party may, by written notice to the party
initiating the ADR, add additional issues to be resolved within the same ADR.
2. Within twenty-one (21) days following receipt of the original ADR
notice, the parties shall select a mutually acceptable independent and neutral
third party (a "neutral") to preside in the resolution of any disputes in this
ADR proceeding. If the parties are unable to agree on a mutually acceptable
neutral within such period, either party may request the President of the CPR
Institute for Dispute Resolution (CPR), 366 Madison Avenue, 14th Floor, New
York, New York 10017, to select a neutral pursuant to the following procedures:
(i) The CPR shall submit to the parties a list of not less than five
(5) candidates within fourteen (14) days after receipt of the
request, along with a CURRICULUM VITAE for each candidate. No
candidate shall be an employee, director, or shareholder of, or
in any way affiliated with, either party or any of their
subsidiaries or Affiliates.
(ii) Such list shall include a statement of disclosure by each
candidate of any circumstance likely to affect his or her
impartiality.
(iii) Each party shall number the candidates in order of preference
(with the number one (1) signifying the greatest preference) and
shall
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been filed separately with the Securities & Exchange Commission.
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deliver the list to the CPR within seven (7) days following
receipt of the list of candidates. If a party believes a conflict
of interest exists regarding any of the candidates, the party
shall provide a written explanation of the conflict to the CPR
along with its list showing its order of preference for the
candidates. Any party failing to return a list of preferences on
time shall be deemed to have no order of preference.
(iv) If the parties collectively have identified fewer than three (3)
candidates deemed to have conflicts, the CPR shall designate as
neutral the candidate for whom the parties collectively have
indicated the greatest preference. If a tie shall result between
two candidates, the CPR may designate either candidate. If the
parties collectively have identified three (3) or more candidates
deemed to have conflicts, the CPR shall review the explanations
regarding conflicts, and, in its sole discretion, may either (i)
immediately designate as the neutral the candidate for whom the
parties collectively have indicated the greatest preference, or
(ii) issue a new list of not less than five (5) candidates, in
which case the procedures set forth in subparagraphs 2(a) through
2(d) shall be repeated.
(b) No earlier than twenty-eight (28) days or later than fifty-six (56)
days after the selection, the neutral shall hold a hearing to resolve
each of the issues identified by the parties. The ADR proceeding shall
take place at a location agreed upon by the parties. If the parties
cannot agree, the neutral shall designate a location other than the
principle place of business of either party or any of their
subsidiaries or Affiliates.
(c) At least seven (7) days prior to the hearing, each party shall submit
the following to the other party and the neutral:
(i) a copy of all exhibits on which such party intends to rely in any
oral or written presentation to the neutral;
(ii) a list of any witnesses such party intends to call at the
hearing, and a short summary of the anticipated testimony of each
witness;
(iii) a proposed ruling on each issue to be resolved, together with a
request for a specific damage award or other remedy for each
issue. The proposed rulings and remedies shall not contain any
recitation of the facts or any legal arguments and shall not
exceed one (1) page per issue.
(iv) a brief in support of each party's proposed rulings and remedies
provided that the brief shall not exceed twenty (20) pages. This
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been filed separately with the Securities & Exchange Commission.
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page limitation shall apply regardless of the number of issues
raised in the ADR proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d), no
discovery shall be required or permitted by any means, including
depositions, interrogations, requests for admissions, or
production of documents.
(d) The hearing shall be conducted on two (2) consecutive days and shall
be governed by the following rules:
(i) Each party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each party
has had the five (5) hours to which it is entitled.
(ii) Each party shall be entitled, but not required, to make an
opening statement, to present regular and rebuttal testimony,
documents or other evidence, to cross examine witnesses, and to
make a closing argument. Cross examination of witnesses shall
occur immediately after their direct testimony, and cross
examination shall be charged against the party conducting the
cross examination.
(iii) The party initiating the ADR shall begin the hearing and, if it
chooses to make an opening statement, shall address not only
issues it raised but also any issues raised by the responding
party. The responding party, if it chooses to make an opening
statement, also shall address all issues raised in the ADR.
Thereafter, the presentation of regular and rebuttal testimony
and documents, other evidence, and closing arguments shall
proceed in the same sequence.
(iv) Except when testifying, witnesses shall be excluded from the
hearing until closing arguments.
(v) Settlement negotiations, including any statements made therein,
shall not be admissible under any circumstances. Affidavits
prepared for purposes of the ADR hearing also shall not be
admissible. As to all other matters, the neutral shall have sole
discretion regarding the admissibility of any evidence.
(e) Within seven (7) days following completion of the hearing, each party
may submit to the other party and the neutral a posthearing brief in
support of its proposed rulings and remedies, provided that such brief
shall not contain or discuss any new evidence and shall not exceed ten
(10) pages. This page limitation shall apply regardless of the number
of issues raised in the ADR proceeding.
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been filed separately with the Securities & Exchange Commission.
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(f) The neutral shall rule on each disputed issue within fourteen (14)
days following completion of the hearing.
(g) The neutral shall be paid a reasonable fee plus expenses. These fees
and expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the
fees and expenses of a court recorder, and any expenses for a hearing
room, shall be paid as follows:
(i) If the neutral rules in favor of one party on all disputed issues
in the ADR, the losing party shall pay 100% of such fees and
expenses.
(ii) If the neutral rules in favor of one party on some issues, and
the other party on other issues, the neutral shall issue with the
rulings a written determination as to how such fees and expenses
shall be allocated between the parties. The neutral shall
allocate the fees and expenses in a way that bears a reasonable
relationship to the outcome of the ADR, with the party prevailing
on more issues, or on issues of greater value or gravity,
recovering a relatively larger share of its legal fees and
expenses.
(h) The rulings of the neutral and the allocation of fees and expenses
shall be binding, nonreviewable, and nonappealable, and may be entered
as a final judgment in any court having jurisdiction.
(i) Except as provided in paragraph 9 and except as to such disclosure
which is required by applicable law or regulation, the existence of
the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings, and
briefs), and the rulings shall be deemed Confidential Information. The
neutral shall have the authority to impose sanctions for unauthorized
disclosure of Confidential Information.
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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EXHIBIT D
TO
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
ABBOTT LABORATORIES
AND
DRUG ABUSE SCIENCES, INC.
DATED AUGUST ________, 2000
PROCESS TECHNOLOGY PATENTS
U.S. Patent No. 5,659,037
Corresponding Pending Ex-U.S. patent applications:
Country Application # Filing Date
----------------------------------------------
Canada 2,195,676 08/03/1995
EPC 959275660 08/03/1995
Japan 50809696 08/03/1995
Mexico 971221 08/03/1995
PC PCT/US95/09859 08/03/1995
[******] Confidential Treatment Requested. The confidential portions have
been filed separately with the Securities & Exchange Commission.
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