QuickLinks -- Click here to rapidly navigate through this document

As Filed with the Securities and Exchange Commission on September 27, 2013

Registration No. 001-36033

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



AMENDMENT NO. 1
TO
FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934



Theravance Biopharma, Inc.
(Exact name of registrant as specified in its charter)

Cayman Islands
(State or other jurisdiction of
incorporation or organization)
  Not Applicable
(I.R.S. Employer
Identification No.)

Ugland House, South Church Street
George Town, Grand Cayman, Cayman Islands

(Address of principal executive offices)

 

KY1-1104
(Zip Code)

(650) 808-6000
(Registrant's telephone number, including area code)



        Securities to be registered pursuant to Section 12(b) of the Act:

Title of Each Class
to be so Registered
  Name of Each Exchange on Which
Each Class is to be Registered
Common Share, par value $0.00001 per share   The NASDAQ Stock Market LLC

        Securities to be registered pursuant to Section 12(g) of the Act None

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

        We are an "emerging growth company" as defined under the federal securities laws. For implications of our status as an emerging growth company, please see "Risk Factors" in Item 1A and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of this registration statement.

   



INFORMATION REQUIRED IN REGISTRATION STATEMENT

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10

        Our information statement is filed as Exhibit 99.1 to this Form 10. For your convenience, we have provided below a cross-reference sheet identifying where the items required by Form 10 can be found in the information statement.

Item No.
  Caption   Location in Information Statement
1.   Business   "Summary", "Risk Factors", "The Spin-Off", "Our Business", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Where to Obtain More Information"

1A.

 

Risk Factors

 

"Risk Factors"

2.

 

Financial Information

 

"Historical Selected Financial Data", "Unaudited Pro Forma Combined Balance Sheet", "Capitalization" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"

3.

 

Properties

 

"Our Business" and "Our Relationship with Theravance, Inc. after the Spin-Off"

4.

 

Security Ownership of Certain Beneficial Owners and Management

 

"Security Ownership of Certain Beneficial Owners and Management"

5.

 

Directors and Executive Officers

 

"Management" and "Board of Directors"

6.

 

Executive Compensation

 

"Compensation of Non-Employee Directors", and "Compensation of Named Executive Officers"

7.

 

Certain Relationships and Related Transactions and Director Independence

 

"Security Ownership of Certain Beneficial Owners and Management", "Related Person Transactions", "Our Relationship with Theravance, Inc. after the Spin-Off" and "Board of Directors"

8.

 

Legal Proceedings

 

"Our Business"

9.

 

Market Price of Dividends on Registrant's Common Equity and Related Stockholder Matters

 

"The Spin-Off," "Dividend Policy", "Description of Share Capital", "Compensation of Non-Employee Directors" and "Compensation of Named Executive Officers"

10.

 

Recent Sales of Unregistered Securities

 

Not Applicable

11.

 

Description of Registrant's Securities to be Registered

 

"The Spin-Off", "Dividend Policy" and "Description of Share Capital"

12.

 

Indemnification of Directors and Officers

 

"Indemnification of Directors and Officers"

13.

 

Financial Statements and Supplementary Data

 

"Historical Selected Financial Data" and "Unaudited Pro Forma Combined Balance Sheet"

Item No.
  Caption   Location in Information Statement
14.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   Not Applicable

15.

 

Financial Statements and Exhibits

 

See "Index to Combined Financial Statements" and the statements referenced therein

        The information required by this item is contained in the "Unaudited Pro Forma Balance Sheet" and "Index to Financial Statements" and the statements referenced therein and is incorporated herein by reference.

        The following documents are filed as exhibits hereto:

Exhibit No.   Exhibit
  2.1   Form of Separation and Distribution Agreement by and between Theravance Biopharma, Inc. and Theravance, Inc.***

 

3.1

 

Amended and Restated Memorandum and Articles of Association of Theravance Biopharma, Inc.***

 

4.1

 

Specimen Stock Certificate of Theravance Biopharma, Inc.***

 

10.1

 

Form of Transition Services Agreement by and between Theravance Biopharma, Inc. and Theravance, Inc.***

 

10.2

 

Form of Tax Sharing and Indemnification Agreement by and between Theravance Biopharma, Inc. and Theravance, Inc.***

 

10.3

 

Form of Employee Matters Agreement***

 

*10.4

 

2013 Equity Incentive Plan***

 

*10.5

 

Form of Notice of Grant of Stock Option and Stock Option Agreement under the 2013 Equity Incentive Plan***

 

*10.6

 

Theravance Biopharma, Inc. 2013 Employee Stock Purchase Plan***

 

*10.7

 

Theravance Biopharma, Inc. Change in Control Severance Plan***

 

*10.8

 

Form of Offer Letter with Executive Officers***

 

*10.9

 

Theravance Biopharma, Inc. Cash Bonus Program***

 

*10.10

 

Form of Indemnity Agreement***

 

10.11

 

Amended and Restated Lease Agreement, 951 Gateway Boulevard, between Theravance, Inc. and HMS Gateway Office L.P., dated January 1, 2001**

 

10.12

 

First Amendment to Lease for 951 Gateway Boulevard effective as of June 1, 2010 between Theravance, Inc. and ARE-901/951 Gateway Boulevard, LLC**

 

10.13

 

Lease Agreement, 901 Gateway Boulevard, between Theravance, Inc. and HMS Gateway Office L.P., dated January 1, 2001**

 

10.14

 

First Amendment to Lease for 901 Gateway Boulevard effective as of June 1, 2010 between Theravance, Inc. and ARE-901/951 Gateway Boulevard, LLC**

Exhibit No.   Exhibit
  10.15   Theravance Respiratory Company LLC Operating Agreement***

 

10.16

 

Technology Transfer and Supply Agreement, dated as of May 22, 2012 between Theravance, Inc. and Hospira Worldwide, Inc.†

 

10.17

 

Commercialization Agreement between Theravance, Inc. and Clinigen Group plc dated March 8, 2013†

 

10.18

 

License Agreement between Theravance, Inc. and Janssen Pharmaceutica, dated as of May 14, 2002†

 

21.1

 

Subsidiaries of Theravance Biopharma, Inc.***

 

99.1

 

Preliminary Information Statement of Theravance Biopharma, Inc., dated August 1, 2013

*
Management contract or compensatory plan or arrangement.

**
Previously filed.

***
To be filed by amendment.

Confidential treatment has been requested from the Securities and Exchange Commission as to certain portions of this exhibit.


SIGNATURES

        Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, as amended, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

    Theravance Biopharma, Inc.

Date: September 27, 2013

 

By:

 

/s/ RICK E WINNINGHAM

Rick E Winningham
Chief Executive Officer


INDEX TO EXHIBITS

Exhibit No.   Exhibit
  2.1   Form of Separation and Distribution Agreement by and between Theravance Biopharma, Inc. and Theravance, Inc.***

 

3.1

 

Amended and Restated Memorandum and Articles of Association of Theravance Biopharma, Inc.***

 

4.1

 

Specimen Stock Certificate of Theravance Biopharma, Inc.***

 

10.1

 

Form of Transition Services Agreement by and between Theravance Biopharma, Inc. and Theravance, Inc.***

 

10.2

 

Form of Tax Sharing and Indemnification Agreement by and between Theravance Biopharma, Inc. and Theravance, Inc.***

 

10.3

 

Form of Employee Matters Agreement***

 

*10.4

 

2013 Equity Incentive Plan***

 

*10.5

 

Form of Notice of Grant of Stock Option and Stock Option Agreement under the 2013 Equity Incentive Plan***

 

*10.6

 

Theravance Biopharma, Inc. 2013 Employee Stock Purchase Plan***

 

*10.7

 

Theravance Biopharma, Inc. Change in Control Severance Plan***

 

*10.8

 

Form of Offer Letter with Executive Officers***

 

*10.9

 

Theravance Biopharma, Inc. Cash Bonus Program***

 

*10.10

 

Form of Indemnity Agreement***

 

10.11

 

Amended and Restated Lease Agreement, 951 Gateway Boulevard, between Theravance, Inc. and HMS Gateway Office L.P., dated January 1, 2001**

 

10.12

 

First Amendment to Lease for 951 Gateway Boulevard effective as of June 1, 2010 between Theravance, Inc. and ARE-901/951 Gateway Boulevard, LLC**

 

10.13

 

Lease Agreement, 901 Gateway Boulevard, between Theravance, Inc. and HMS Gateway Office L.P., dated January 1, 2001**

 

10.14

 

First Amendment to Lease for 901 Gateway Boulevard effective as of June 1, 2010 between Theravance, Inc. and ARE-901/951 Gateway Boulevard, LLC**

 

10.15

 

Theravance Respiratory Company LLC Operating Agreement***

 

10.16

 

Technology Transfer and Supply Agreement, dated as of May 22, 2012 between Theravance, Inc. and Hospira Worldwide, Inc.†

 

10.17

 

Commercialization Agreement between Theravance, Inc. and Clinigen Group plc dated March 8, 2013†

 

10.18

 

License Agreement between Theravance, Inc. and Janssen Pharmaceutica, dated as of May 14, 2002†

 

21.1

 

Subsidiaries of Theravance Biopharma, Inc.***

 

99.1

 

Preliminary Information Statement of Theravance Biopharma, Inc., dated August 1, 2013

*
Management contract or compensatory plan or arrangement.

**
Previously filed.

***
To be filed by amendment.

Confidential treatment has been requested from the Securities and Exchange Commission as to certain portions of this exhibit.



QuickLinks

INFORMATION REQUIRED IN REGISTRATION STATEMENT CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10
SIGNATURES
INDEX TO EXHIBITS

Exhibit 10.16

 

TECHNOLOGY TRANSFER AND SUPPLY AGREEMENT

 

THIS TECHNOLOGY TRANSFER AND SUPPLY AGREEMENT (this “Agreement”) is made as of this 22nd day of May, 2012 (the “Effective Date”) by and between Theravance, Inc., a Delaware Corporation having its principal place of business at 901 Gateway Blvd., South San Francisco, California, 94080 (“Theravance”) and Hospira Worldwide, Inc., a Delaware Corporation having its principal place of business at 275 North Field Drive, Lake Forest, Illinois, 60045 (“Hospira”).

 

WITNESSETH:

 

WHEREAS, Theravance owns the rights to the human pharmaceutical compound, telavancin that is marketed and sold under the name, VIBATIV® (“Product”);

 

WHEREAS, Theravance desires to engage Hospira to perform manufacture, fill, and finish services with respect to the Product; and

 

WHEREAS, Hospira desires to perform such services for Theravance with respect to the Product;

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, Theravance and Hospira hereby agree as follows:

 

ARTICLE 1.                        DEFINITIONS

 

The following words and phrases when used herein with capital letters shall have the meanings set forth or referenced below:

 

1.1                               “Act” shall mean the United States Federal Food, Drug and Cosmetic Act (21 U.S.C. 301), as amended from time to time.

 

1.2                               “Active Pharmaceutical Ingredient” or “API” means the active pharmaceutical substance of the Drug in bulk form prior to incorporation into the Product.

 

1.3                               “Active Pharmaceutical Ingredient Specifications” means the detailed description and parameters of the API set forth on Exhibit 1.3.

 

1.4                               “Adverse Drug Experience(s)” has the meaning as set forth in 21 CFR 310.305.

 

1.5                               “Affiliate” means, with respect to a party, any corporation, partnership, joint venture and/or firm which controls, is controlled by or is under common control with such party.  As used in this Section 1.5, “control” means:  (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors; and (b) in the case of non-corporate entities, the direct or indirect power to manage, direct or cause the direction of the management and policies of the non-corporate entity or the power to elect at least fifty percent (50%) of the members of the governing body of such non-corporate entity.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 



 

1.6                               “Applicable Law” means all laws applicable to the manufacture, processing, packaging, distribution, sale and use of the Product as may be amended and in effect from time to time, including the Act and the regulations promulgated thereunder; the Canadian Food and Drugs Act (R.S., chapter F-27) and related regulations; European Directive 2003/94/EC and 2001/83/EC, and related legislation; all applicable cGMP; and all corresponding laws, ordinances, rules and regulations of any other applicable jurisdiction.

 

1.7                               “Business Day” shall mean a day which is not a Saturday or Sunday or a bank or public holiday in San Francisco, California, Chicago, Illinois or McPherson, Kansas.

 

1.8                               “Certificate of Analysis” means a document, signed by an authorized representative of Hospira, describing the Product Specifications of and testing methods applied to the Product, and the results thereof.

 

1.9                               “Certificate of Compliance” means a document, signed by an authorized representative of Hospira, attesting that a particular lot, batch or run was manufactured in accordance with cGMP, Applicable Law, and the Product Specifications.  The Certificate of Compliance may be included within the Certificate of Analysis, or separately, if required by Theravance for regulatory purposes or Applicable Law.

 

1.10                        “cGMP” means those principles and guidelines of good manufacturing practices as set forth in 21 C.F.R. Parts 210 and Part 211; EU Directive 2003/94/EC - guidelines of good manufacturing practices for medicinal products for human use (EudraLex Vol. 4); Canadian Good Manufacturing Practices as contained in Canada Food & Drug Regulations C.R.C., c. 870, C.02- C.04; the ICH Guideline on Good Manufacturing Practice for Active Pharmaceutical Ingredients (ICH Q7A), as adopted by EU Directive 2004/27; and the corresponding requirements, of any other applicable jurisdiction.

 

1.11                        “Commercial Year” means each period of twelve (12) consecutive calendar months during this Agreement beginning on January 1st and ending December 31st, except for the first Commercial Year, which shall commence on the first day of the month after the month of Theravance’s first bona fide sale of Product manufactured by Hospira to a non-Affiliate customer after the Product has received Regulatory Approval for manufacturing at Hospira’s McPherson, Kansas site and ends on December 31st thereafter.

 

1.12                        “Components” means all those vials or component parts of the vials into which the Drug will be filled, and the labeling, packaging, ancillary goods, shipping materials and other items to be supplied by Hospira or its Components supplier(s) to manufacture the Product in accordance with the Product Specifications.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

2



 

1.13                        “Confidential Information” means all information, data, and know how, whether commercial, financial, technical, operational, or otherwise in any format, disclosed hereunder by one party or any of its Affiliates to the other party or any of its Affiliates in connection with this agreement which by its nature is clearly confidential, or is otherwise marked or designated as confidential or proprietary, whether disclosed orally in documentary form, by documentation or otherwise and including the terms of this Agreement, except any portion thereof which:

 

(a)                                 is known to the recipient at the time of the disclosure, as evidenced by its written records or other competent evidence;

 

(b)                                 is disclosed to the recipient by a Third Party lawfully in possession of such information and not under an obligation of nondisclosure;

 

(c)                                  is or becomes patented, published or otherwise part of the public domain through no fault of the recipient; or

 

(d)                                 is developed by or for the recipient independently of Confidential Information disclosed hereunder as evidenced by the recipient’s written records or other competent evidence;

 

Notwithstanding the forgoing, specific aspects of Confidential Information shall not be deemed to be within the forgoing exceptions when such exceptions only apply to more general knowledge or when the relevant specific aspects are identified using Confidential Information disclosed under this Agreement.

 

1.14                        “Drug” means the human pharmaceutical compound, telavancin, a lipoglycopeptide used for the treatment of Gram-positive pathogens.

 

1.15                        “EMA” means the European Medicines Agency and any successor entity.

 

1.16                        “Excipient” means [***].

 

1.17                        “Excipient Specifications” means the detailed description and parameters of the Excipient set forth in Exhibit 1.3.

 

1.18                        Facility means Hospira’s pharmaceutical manufacturing plant at McPherson, Kansas, or such other manufacturing facility agreed by the parties in writing.

 

1.19                        “FDA” means the United States Food and Drug Administration or any successor entity.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

3



 

1.20                        “Health Canada” means the Therapeutic Products Inspectorate of the Canadian Health Products and Food Branch and any successor entity.

 

1.21                        “Manufacturing Process” means any and all processes (or any step in any process) that is provided to Hospira by Theravance and that will be used to manufacture the Product, as evidenced in the batch documentation and/or technology transfer reports.

 

1.22                        “Master Batch Record” shall mean the document that defines the manufacturing methods, materials, and other procedures, directions and controls associated with the manufacture and testing of the Product, which may be amended in writing from time to time by mutual agreement of the parties.

 

1.23                        “MSDS” means the Material Data Safety Sheet for the Product or the API containing such information as may be required by applicable government agencies.

 

1.24                        “Product” means VIBATIV® in a 750mg dosage form, filled, finished and packaged in accordance with the Product Specifications.

 

1.25                        “Product Specifications” means those manufacturing, materials, packaging, labeling, testing, and performance specifications for the Product filed with the relevant Regulatory Authority, required for the manufacture of the Product that is to be purchased and supplied under this Agreement, as such are set forth on Exhibit 1.25 which specifications may be amended by the parties from time to time in accordance with this Agreement.

 

1.26                        “QP” shall mean a qualified person who is entrusted to perform “QP Testing/ Release” of the Product in the European Union, in accordance with European Directive 2001/83/EC relating to Medicinal Products for Human Use.

 

1.27                        “Regulatory Approval” means any licenses and permits for the manufacture of the Product at the Facility and all other approvals (including supplements, amendments, pre- and post-marketing approvals, and pricing and reimbursement approvals), licenses, registrations or authorizations of a relevant Regulatory Authority necessary for the distribution, sale or use of the Product in the Territory.

 

1.28                        “Regulatory Authority” means the FDA and/or the EMA or any other federal, state or local or other regulatory agency, department, bureau or other governmental entity, which is responsible for issuing Regulatory Approvals of the Product in the Territory.

 

1.29                        “Specially Regulated Waste” means any hazardous waste, toxic waste, medical waste, nuclear waste, mixed waste, or other waste materials or by-products, including waste water, which may be subject to or require special handling, treatment, storage, or disposal under any federal, state or local laws or regulations intended to address such types of waste materials that arise from the manufacture of the Product.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

4



 

1.30                        “Term” means, individually the Initial Term of this Agreement, or collectively the Initial Term and any Renewal Term, as those defined terms are used herein.

 

1.31                        “Territory” means:  (i) the United States of America, including the District of Columbia, the Commonwealth of Puerto Rico, all territories and possessions of the United States of America, United States military bases, and any other location over which the FDA has jurisdiction to regulate medicinal products intended for human use; (ii) Canada; and (iii) the European Union (“EU 27”) and any other countries that are later admitted to the European Union by acceding to the treaties of the European Union.

 

1.32                        “Third Party” shall mean a party other than Hospira or Theravance and their respective Affiliates.

 

1.33                        “Waste” shall mean all rejects, improper goods, garbage, refuse, remainder, residue, waste water or other discarded material, including solid, liquid, semisolid, or contained gaseous material that arises from the manufacture of the Product, including rejected, excess or unsuitable materials, API and Products.  The term Waste shall not include any Specially Regulated Waste.

 

ARTICLE 2.                        TECHNOLOGY TRANSFER PROJECT

 

2.1                               General.  The parties shall undertake a technology transfer project (“Project”) consisting of the activities set forth in Exhibit 2.1 (Statement of Work”).  Under the Project, Hospira shall assist Theravance in the technology transfer related to the Manufacturing Process and to obtain the required sNDA or equivalent approval(s) in the jurisdictions in the Territory.  Hospira then shall manufacture and deliver Product to Theravance for sale by Theravance as a human pharmaceutical product.

 

2.2                               Commercially Reasonable Efforts.  Each party shall use all commercially reasonable efforts successfully to complete the Project.  However, the parties understand and agree that neither of them can guarantee that the Project will be successful, nor warrants that a marketable product will result from the Project.

 

ARTICLE 3.                        TECHNOLOGY TRANSFER FEES; PROJECT MANAGEMENT

 

3.1                               Technical Transfer Fee.  Theravance shall pay to Hospira a technical transfer fee (“Technical Transfer Fee”) for its work under the Project in accordance with the payment schedule set forth in Exhibit 2.1.

 

3.2                               Stability Studies.  If so requested by Theravance, Hospira will perform stability studies on the Product separate and apart from the Project.  Hospira will invoice Theravance for any such stability studies at the prices set forth in Exhibit 3.2.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

5



 

3.3                               Changes in Project Scope.

 

(a)                                 If Theravance requests changes in the Project or the Product Specifications, or if technical difficulties require that Hospira perform either additional work or repeat work, and such additional work is required not because of Hospira’s fault or negligence, Hospira shall within [***] Business Days provide Theravance with a new or revised proposal with cost estimates for such changes or additional work, based on its customary per/hour, per/person rates relative to the work to be performed, including costs for reasonable travel and sustenance, materials and supplies. If Theravance approves such costs, the mutually agreeable changes will be documented in writing and signed by both parties as a change order, and Hospira shall perform such agreed-upon new or additional work.  Theravance shall pay Hospira’s costs for such additional work or repeat work performance as set forth in this Agreement.

 

(b)                                 In the event that Theravance decides to pursue marketing and sales activities for the Product in countries or geographic regions outside of the Territory, Hospira shall provide Theravance with all reasonable additional technical/developmental and regulatory support, including, for example, regulatory support for Theravance’s supplemental regulatory filings, packaging and product development, labeling, and Regulatory Authority inspections. Any additional technical/developmental and regulatory support for such other countries or geographic regions shall be considered a change in Project scope and the Parties will agree to the reasonable incremental costs of such additional support in accordance with Section 3.3(a).  Any additional pre-approval inspections of the Facility that may be required by relevant Regulatory Authorities as a result shall be reimbursed in accordance with Section 7.3(c).

 

3.4                               Project Manager.  Each party will appoint an authorized individual who will have primary responsibility for day-to-day interactions with the other party for the activities under the Project (“Project Manager”).  Each party will use all reasonable efforts to provide the other party with at least [***] days prior written notice of any change in its Project Manager.  All communications between Hospira and Theravance regarding the conduct of the activities under the Project will be addressed to its Project Manager.

 

3.5                               Technology Transfer Supplies.  Based on Theravance’s Product Specifications, Hospira will manufacture the Product in compliance with cGMP for production and regulatory purposes as follows: [***] (“Technology Transfer Supplies”) at the prices set forth in Exhibit 2.1.  In accordance with a schedule to be mutually agreed by the parties, Theravance shall issue its purchase order(s) for such Technology Transfer Supplies at least [***] days before any requested manufacturing date.  For the sake of clarity, all relevant provisions of Articles 5, 7, 8 and 9 shall apply to the manufacture and delivery of the Technology Transfer Supplies.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

6



 

ARTICLE 4.                        THERAVANCE’S REGULATORY SUBMISSIONS

 

4.1                               Regulatory Review.

 

(a)                                 Upon Theravance’s request, Hospira shall review those portions of Theravance’s proposed submissions for Regulatory Approval as related to Hospira’s manufacturing, packaging and quality control procedures before the submissions are filed with relevant Regulatory Authorities.  Hospira shall complete its review of any English-language submissions within [***] Business Days after receipt. For any non English-language submissions, Theravance shall provide Hospira with a submission translated into English and the parties will agree on a reasonable period of time that Hospira may require for review of such submissions.

 

(b)                                 Upon Theravance’s request, Hospira shall consult with and advise Theravance in responding to questions from Regulatory Authorities regarding Theravance’s regulatory submission(s) for the Products, provided, however, that Theravance shall have the final control over such submissions.  In the event that any additional review and consultation is required by a Regulatory Authority (for example, for technical responses to a Regulatory Authority finding of deficiency, should one arise), Hospira shall provide Theravance with cost estimates (which shall include a professional services fee at its customary per/hour, per/person rates relative to the work to be performed, consistent with its charges to other similarly-situated customers).  If Theravance approves such costs in writing, Theravance shall reimburse Hospira for such approved costs upon completion of the work and within [***] days of receipt of Hospira’s invoice.

 

4.2                               User Fees.  Theravance shall pay any Regulatory Authority user fees which may become payable for the Product.

 

4.3                               Ownership of Regulatory Approvals.  The parties agree that Theravance shall be the sole and exclusive owner of all right, title and interest in and to all Regulatory Approvals related to the Product and any submissions for such Regulatory Approvals.  Hospira shall reasonably assist Theravance in the preparation of all documents necessary to effect Theravance’s rights in such Regulatory Approval applications and submissions.  Theravance shall provide to Hospira for its files a final copy of the CMC section of any such applications and/or submissions for Regulatory Approval.

 

4.4                               Qualification of and Purchases from Alternate Sites.  Theravance shall have the right, in its sole discretion, to qualify manufacturing site(s) with Third Parties to manufacture and supply the Product during the Term (each, an “Alternate Supplier”). Theravance may obtain [***] of its requirements of Product in the Territory from such Alternate Supplier(s) during the Term; provided, however, that if Hospira is unable to fulfill any of its manufacturing and supply obligations hereunder then Theravance may obtain such amount of its requirements of Product that Hospira is unable to supply from such Alternate Suppliers and for such period of time that Hospira is unable to supply.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

7



 

ARTICLE 5.                        MANUFACTURE AND SUPPLY OF PRODUCT

 

5.1                               Purchase and Sale of Product.  Upon obtaining the first of the Regulatory Approvals required for manufacturing Product at the Facility, pursuant to the terms and conditions of this Agreement and during each Commercial Year, and subject to the exceptions of Section 4.4, Hospira shall manufacture, sell and deliver Product to Theravance, and Theravance shall purchase and take delivery of [***] of its requirements for Product in those jurisdictions within the Territory where Regulatory Approval(s) have been obtained.  Notwithstanding any of the foregoing, Theravance shall be entitled to [***] for purposes of [***] and such batches shall [***] to purchase and take delivery of Product from [***] under this Section 5.1.

 

5.2                               Manufacturing Standards.  Hospira will manufacture, package, and label the Product in accordance with the Product Specifications, cGMP and all Applicable Laws, as then in effect.  The parties agree that, should Theravance wish to implement any amendment to the Product Specifications, Theravance shall provide written notice thereof to Hospira for Hospira’s review and approval, which approval shall not be unreasonably withheld.  Each party further agrees promptly to notify the other of any new instructions or changes to the Product Specifications required by the FDA or Applicable Laws and shall confer with each other with respect to the best means to comply with such instructions or change requirements.

 

5.3                               Government Approvals.  Hospira agrees to manufacture and supply those quantities of Product requested in Purchase Orders by Theravance that are necessary to validate the Facility, obtain Regulatory Approval(s) and build Theravance’s inventory in anticipation of the commercial sale of the Products and Theravance shall be required to pay for such Product in accordance with the terms of this Agreement irrespective of whether the Product ultimately receives any Regulatory Approvals in the Territory.  Notwithstanding the forgoing or anything else in this Agreement to the contrary, Theravance shall be entitled to designate the intended jurisdiction or market within the Territory (e.g. the United States, Canada or EU 27) for which any Product is to be manufactured, tested, packaged, labeled and released.

 

5.4                               Active Pharmaceutical Ingredient; Excipient

 

(a)                                 Supply.

 

(i)                                     Hospira shall manufacture Product for Theravance from quantities of API and Excipient that Theravance shall supply to Hospira at no cost.  Theravance shall supply API and Excipient to Hospira in quantities sufficient to satisfy Hospira’s gross manufacturing requirements of the Product no later than [***] prior to the scheduled start of API/Excipient compounding.  Hospira shall use the API and Excipient received from Theravance only for the technology transfer activities contemplated by this Agreement and the manufacture of Product for Theravance hereunder.  Theravance shall deliver or arrange for the delivery of API and the Excipient, [***] pursuant to no-cost purchase orders that Hospira issues to Theravance.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

8



 

(ii)                                  With each delivery of API/Excipient, Theravance will include a certificate of analysis, signed by an authorized individual of Theravance (or its designee) containing basic information regarding the API/Excipient, including:  (A) the manufacturing date of the batch/lot delivered; (B) the batch/lot number; and (C) the quantity of API/Excipient in such batch/lot as shipped to Hospira.  Theravance shall also supply a separate sample (“tailgate sample”; “satellite sample”) for each container of API/Excipient supplied.

 

(iii)                               Within [***] days of Hospira’s receipt of any API or Excipient supplied by or on behalf of Theravance hereunder, Hospira shall:  (A) perform an identification test on the API and Excipient and confirm the shipment quantity; (B) perform any other tests mutually agreed upon in writing; and (C) notify Theravance of any inaccuracies with respect to quantity or of any claim that any portion of the shipment fails the identification or other test.  In the event Hospira notifies Theravance of any deficiency in the quantity or quality of API and/or Excipient received, Theravance shall promptly ship to Hospira, at Theravance’s own expense, the quantity of API and/or Excipient necessary to complete the shipment.  In the event Hospira notifies Theravance that the API and/or Excipient shipment does not conform to the API Specifications and/or Excipient Specifications, Theravance shall have the right to confirm such findings at the Facility.

 

(iv)                              If Theravance determines that such shipment of API and/or Excipient conforms to the API Specifications and/or Excipient Specifications, the parties shall submit samples of such shipment to a mutually acceptable independent expert for testing.  If such independent expert determines that the shipment conforms to the API Specifications and/or Excipient Specifications, Hospira shall bear all expenses of shipping and testing such shipment samples.  If Theravance or such independent expert determines that such shipment does not meet the API Specifications and/or Excipient Specifications, Theravance shall replace, at no cost to Hospira, the portion of the API and/or Excipient shipment which does not conform to the API Specifications and/or Excipient Specifications and bear all expenses of shipping and testing the shipment samples.  Notwithstanding the foregoing, the independent expert may also determine that additional sample testing by an independent laboratory is necessary Hospira shall dispose of any nonconforming portion of any API and/or Excipient shipment as directed by Theravance, at Theravance’s expense.

 

(b)                                 Title.  Notwithstanding the [***] terms of Section 5.4(a)(i), [***] to the API and Excipient while they are in the Facility.  Subject to the limitation in Section 5.4(c), Hospira shall assume responsibility and risk for the safekeeping, storage and handling for all shipments of API and Excipient delivered hereunder and accepted by Hospira.

 

(c)                                  Loss and Replacement of API and Excipient.  In the event of loss or damage of any API and/or Excipient delivered hereunder or the failure of Product to meet Product Specifications, Theravance shall supply to Hospira replacement API and/or Excipient according to the terms set forth in Section 5.4(a), except as otherwise provided herein.  If the replacement of such API and/or Excipient results from a negligent act or omission or the willful

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

9



 

misconduct by Hospira in the manufacture, handling or storage of Product or API and/or Excipient, Theravance shall supply to Hospira replacement API and/or Excipient and Hospira shall be responsible for the cost of the replacement API and/or Excipient equal to Theravance’s purchase cost/kg (as evidenced by Theravance’s invoices).

 

(d)                                 Maximum Liability.  Notwithstanding any of the foregoing, in no event shall Hospira’s liability for such replacement costs of API and/or Excipient exceed: (i) [***]; (ii) [***]; or (iii) in the event of loss during the handling and storage of API and/or Excipient (x) prior to the start of compounding operations; or (y) during storage of the Product after completion of filling operations and prior to delivery, [***]. For greater clarity, Hospira’s liability under (iii), above, explicitly excludes loss of API during any and all aspects of compounding, filling and finishing the API, the Excipient and/or Product. Theravance expressly acknowledges and agrees that this Section 5.4(d) states Theravance’s sole remedy, and Hospira’s sole liability, with respect to any claim arising hereunder for any such loss, damage, or misuse of API and/or Excipient by Hospira.

 

5.5                               Facility; Dedicated Equipment.

 

(a)                                 Maintenance of Facility.  Hospira shall secure and maintain in good order, at its sole cost and expense, such current governmental registrations, licenses and permits as are required by Regulatory Authorities in order for Hospira to perform all of its obligations under this Agreement.  Hospira further agrees that at all times during the Term, that it shall maintain the Facility, and all equipment, machinery, systems, intangibles and contract rights in use at the Facility in the ordinary course of business, in compliance with cGMP and Applicable Laws.

 

(b)                                 Dedicated Equipment; Costs. The parties anticipate that certain specialized and dedicated equipment (“Dedicated Equipment”) will be required to manufacture the Product for Theravance.  The list of such Dedicated Equipment and Hospira’s estimate of the purchase cost is attached in Exhibit 5.5.  Hospira shall obtain firm quotes from one or more equipment manufacturers and advise Theravance of the overall costs to be incurred in connection with the purchase, installation and validation of such Dedicated Equipment.  After Theravance approves such costs, which approval shall not be unreasonably withheld, Hospira shall install and validate the Dedicated Equipment and bill Theravance for the associated costs.  Theravance shall make payment to Hospira no later than [***] days after Theravance receives Hospira’s invoice for the same.  Title to the Dedicated Equipment shall be in Theravance’s name.  Hospira shall label such Dedicated Equipment as Theravance property and evidencing Theravance’s ownership interests.  Hospira shall use commercially reasonable efforts to maintain the Dedicated Equipment in good condition, normal wear and tear excepted.  The parties shall address all issues involving warranty repairs or replacement with the equipment supplier by mutual accord.  Hospira shall use Dedicated Equipment only in connection with the manufacture the Product; provided, however, that if Hospira wishes to use such Dedicated Equipment for manufacture of any product(s) other than the Product, Hospira and Theravance shall meet and discuss the technical and practical ramifications of such use and appropriate compensation to Theravance.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

10


 

5.6                               Components.  Hospira shall be responsible for the procurement and qualification of the Components required for the manufacture of the Product.  Hospira will source all of the Components from suppliers that have been approved and qualified by Hospira in accordance with Hospira’s internal vendor qualification and approval processes.  The parties understand and agree that Theravance will have reviewed and approved the Components and Component suppliers listed in the Product Specifications.  Under no circumstances shall Hospira have any liability to Theravance, nor shall Hospira be deemed to be in breach of this Agreement, if Hospira is unable to supply the Product to Theravance due to a failure of such suppliers to provide such Components to Hospira.

 

5.7                               Product Labeling.

 

(a)                                 Hospira shall label the Product in accordance with the Product Specifications using content provided by Theravance.  Theravance shall control the content and type of all labeling and packaging (and any changes or supplements thereto) for the Product and shall have the responsibility, at Theravance’s expense, for:  (i) ensuring such content is compliant with Regulatory Approval and all Applicable Law; and (ii) any changes or supplements to such content, including the expense of securing any approvals required by any applicable Regulatory Authority for any such changes or supplements.  Hospira shall be responsible for obtaining such labels (and any changes or supplements thereto) in accordance with content specified by Theravance.

 

(b)                                 Any changes to the labeling and packaging shall be communicated to Hospira in writing at least [***] days prior to the desired implementation date together with the required documentation specifying the content to be included in the labeling and packaging, including all necessary photo-ready art (or its substantial equivalent).  Theravance shall reimburse Hospira for Hospira’s actual costs of making any changes under this Section 5.7(b) and for the cost of any labeling that Hospira is unable to use due to such changes.

 

5.8                               Off-Site Waste.  If necessary, Hospira shall hire, direct and pay all costs for a waste contractor to remove all Waste from Hospira’s manufacturing facility for Product consistent with the Product’s MSDS.  The costs associated with the removal of Specially Regulated Waste shall be borne by Theravance.  Hospira shall only dispose of Specially Regulated Waste at sites and through waste management vendors that have been approved in writing by Theravance, whose approval shall not be withheld unreasonably.  Hospira shall document the destruction of any Specially Regulated Waste in writing and provide copies of such written documentation to an authorized representative of Theravance.  Theravance maintains the right, but not the obligation, to witness the actual disposal of Specially Regulated Waste.  Theravance shall, upon request by Hospira, provide the MSDS for the API and the MSDS for the Product to Hospira.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

11



 

5.9                               Delivery.  Hospira shall deliver the Product to Theravance, [***].  Title to and risk of loss over the Products shall pass to [***].  Hospira shall not deliver any Product until both Hospira and Theravance have released such Product pursuant to the Product Specifications and/or the Quality Agreement in the form attached here as Exhibit 7.2 (“Quality Agreement”).  [***] For any shipments outside the United States, Theravance shall be the exporter of record; provided, however, that Hospira shall assist Theravance in the preparation of any required export documentation.

 

5.10                        [***]  Hospira shall use its best efforts to ensure that [***].  Except if caused by events of Force Majeure or other manufacturing, quality control or other issues beyond Hospira’s reasonable ability to control, [***], Theravance shall have the right to [***] that Hospira eventually issues for the Products [***].

 

5.11                        Price and Payment.

 

(a)                                 Price.  Hospira shall invoice Theravance for Product it delivers to Theravance at the price(s) as set forth on Exhibit 5.11.  Each invoice shall reference the price of the Product in effect on the date of Hospira’s invoice.  All pricing is firm through December 31, 2013.  Beginning January 1, 2014 and on each succeeding January 1st thereafter during the Term, Hospira shall have the right to increase the price of the Product once annually.  Price increases shall be effective for deliveries beginning January 1st of each calendar year.  Such increases shall not exceed [***]Hospira shall use all reasonable efforts to provide written notice to Theravance of any anticipated price increase no later than October 31st of any calendar year.

 

(b)                                 Payment.  Hospira shall invoice Theravance upon delivery of the Product.  Theravance shall make payment net [***] days from the date of receipt of Hospira’s invoice.  Hospira shall include on all invoices the relevant purchase order number as provided by Theravance.  The currency to be used to invoice and for payment shall be US Dollars.  Hospira shall send invoices by email to AP@Theravance.com.

 

(c)                                  Taxes.  Theravance shall pay all federal, state, county or municipal sales or use tax, excise, customs charges, duties or similar charge, or any other tax assessment (other than that assessed against income), license, fee or other charge lawfully assessed or charged on the manufacture, sale or transportation of the Product that Hospira manufactures, sells and delivers pursuant to this Agreement.  In particular, Theravance shall be responsible for and pay all Prescription Drug User (PDUFA) annual establishment fees with respect to the Product.  Theravance shall provide Hospira with copies of any state tax exemption form(s) if it intends to claim exemption for sales or use taxes in any state(s) where the Product is to be shipped.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

12



 

5.12                        Inspection; Nonconforming Product.

 

(a)                                 Documentation; Inspection. Upon completion of the manufacture of each batch of Product, Hospira will provide Theravance with a Certificate of Analysis confirming that the batch was manufactured in conformity with the Product Specifications and all Applicable Laws.  In addition, Hospira will provide Theravance with a copy of the Master Batch Record and all other documents and records as required by the Quality Agreement for Theravance’s release of the batch and such samples of the batch that Theravance may reasonably request.  For purposes of testing and releasing the Product for sale in the European Union, Hospira will make available to Theravance its Qualified Person(s) (“QP”) at one or more of its European Affiliates.

 

(b)                                 Theravance shall have a period of [***] days from the date of its receipt of all such documentation (and if, applicable, batch samples) to inspect, and accept or reject, the corresponding batch as conforming or non-conforming with the Product Specifications and all Applicable Laws.  If Theravance rejects the batch, it shall promptly so notify Hospira and provide the reason for the rejection.  If the reason for the rejection is non-conformance with Product Specifications and, as a result of further review and testing, Hospira determines that the Batch does conform to the Product Specifications, Hospira shall so notify Theravance and the parties shall then submit samples of such batch to a mutually acceptable independent expert for testing.

 

(c)                                  Testing. If such independent expert determines that the batch conforms to the Product Specifications, Theravance shall bear all expenses of shipping and testing such batch samples and Theravance shall be responsible for Hospira’s invoice price of the batch.  If such independent expert determines that the batch does not meet the Product Specifications, Hospira shall bear all expenses of shipping and testing the batch samples.  Notwithstanding the foregoing, the independent expert may also determine that additional sample testing by an independent laboratory is necessary. Absent manifest error, the test results of the independent expert (or those of the independent laboratory, if so referred by the expert) shall be binding on the parties.

 

(d)                                 Replacement; Disposition of Rejected Product.  Hospira shall use all reasonable efforts to replace, at no cost to Theravance, that portion of the batch which does not conform to the Product Specifications or otherwise was not manufactured in accordance with Applicable Laws [***]; provided, however, that Theravance provides sufficient replacement API and Excipient to Hospira in accordance with the provisions of Section 5.4.  Hospira shall dispose of any rejected Product at its own cost and expense.

 

(e)                                  Deemed Acceptance; Latent Defects.  Any Product that Theravance does not reject pursuant to this Section 5.12 shall be deemed accepted, and all claims with respect to Product not conforming with Product Specifications are waived by Theravance, except as to latent defects which are not discoverable by the exercise of ordinary diligence and reasonable care, render the Product not conforming to Product Specifications, and are solely caused by Hospira.  The parties shall consult to confirm the cause of any latent defect.  If the parties do not

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

13



 

agree as to whether the Product is non-conforming, they shall submit samples of such Product for independent testing in accordance with Section 5.12(b).  If it is determined that the Product is non-conforming and the cause of the defect is attributable to Hospira, then Hospira will replace at no cost to Theravance all such defective Product with Product that meet the Product Specifications, subject to the limitation of Section 5.4(d).  All other relevant provisions of Section 5.12 shall apply to the manufacture and delivery of such replacement Product.

 

5.13                        Miscellaneous.

 

(a)                                 Approval of Subcontracting.  Hospira shall not subcontract or otherwise delegate to any Third Party any portion of its obligations under this Agreement without Theravance’s prior written approval; provided, however, that the foregoing restriction on subcontracting shall not prohibit Hospira from subcontracting non-essential or routine tasks involving the Facility generally, such as janitorial services or other general infrastructure maintenance or upgrades.

 

(b)                                 Process Rework.  Process rework created as a result of Theravance’s changes shall be billed separately at a reasonable fee mutually agreed upon in writing.

 

(c)                                  Sub-Lots.  Should Theravance desire Hospira to split a manufacturing lot of Product into two (2) or more sub-lots during packaging, Hospira will [***].

 

(d)                                 Storage Fee.  Theravance will use its commercially reasonable efforts to take delivery of all Products from the Facility as soon as reasonably practicable after Hospira’s release of the Product.  A cold storage fee of [***] shall be due and payable to Hospira if Theravance stores Product at the Facility for more than [***] days after the date of Theravance’s Product release.  The cold storage fee can be waived in the event of a discrepancy being investigated for the batch(es) under investigation.

 

(e)                                  QP Testing/Release. Hospira shall not charge Theravance for any QP Testing/Release performed by its QPs as envisaged in Section 5.12(a), if such QP Testing/Release is performed for a lot or lots of Product destined for the European Union only, and in lieu of testing and release for United States designated Product.  However, if Theravance desires or requires QP Testing/Release of a lot or lots for both the United States and the European Union, then Hospira will [***] QP Testing/Release of such lot(s).

 

ARTICLE 6.                        ORDERS AND FORECASTS

 

6.1                               [***] Year Product Supply Forecast.  For capacity planning purposes, upon its submission for Regulatory Approval, Theravance shall provide Hospira with a written forecast of its estimated annual requirements of the Product [***] (“Annual Forecast”).  Thereafter, by [***] of each calendar year, Theravance shall [***] for the period commencing [***].

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

14



 

6.2                               First Purchase Order.  The parties shall cooperate in estimating and scheduling production for Theravance’s first commercial order of Product approximately [***] in advance of the anticipated date of Regulatory Approval or Theravance’s desired Product availability date.

 

6.3                               Rolling Forecast.  Concurrent with the placing of its first commercial order of Product, and during each calendar quarter thereafter, Theravance shall provide to Hospira a good faith, estimated rolling forecast of the quantity of the Product that Theravance expects to order for [***] (each, a “Rolling Forecast”).  [***] shall be considered a binding commitment upon Theravance to purchase quantities described therein and a binding commitment upon Hospira to produce and deliver such quantities on the delivery dates described therein (“Firm Order Period”).  [***] shall be non-binding upon the parties.

 

6.4                               Purchase Orders.  Theravance shall submit a purchase order (“Purchase Order”) to Hospira [***] days prior to the requested delivery date of the Product.  All Purchase Orders shall be made on or before the first day of the calendar month by which the [***] days advanced notice period is measured and shall reference this Agreement and shall be governed exclusively by the terms contained herein.  Theravance shall set forth in each Purchase Order:  (i) the quantity of Product ordered; (ii) the amount of API and Excipient required to fill the Purchase Order; (iii) the specified delivery date and delivery instructions; and (iv) the price to be paid for the Product. Work will commence only upon Hospira’s receipt of Theravance’s Purchase Order.

 

6.5                               Purchase Order Acceptance.  Hospira will confirm each Purchase order issued in accordance with Section 6.4 within ten (10) Business Days after receipt and shall use all commercially reasonable efforts to meet the delivery dates set forth therein.

 

6.6                               Additional Quantities.  Should Theravance order quantities of Product in excess of [***] over the forecasted amount of the latest Firm Order Period, Hospira shall not be obligated to supply said additional quantities; provided, however, that Hospira shall use reasonable commercial efforts to produce and deliver to Theravance said additional quantities within [***] days of issuance of the Purchase Order for such additional quantities.

 

6.7                               Format of Forecasts and Purchase Orders.  Theravance shall submit each Rolling Forecast and all Purchase Orders electronically in spreadsheet form and will specify the quantities of Products in units and the Hospira product number (list number/inventory number).

 

6.8                               Minimum Purchase Requirement.  Beginning with the Commercial Year during which Hospira manufactures [***] Product pursuant to Theravance’s forecasts, Theravance agrees to purchase from Hospira in such Commercial Year (and in each Commercial Year thereafter) a percentage of its Annual Forecast of the Drug Product in those jurisdictions within the Territory where Regulatory Approval(s) have been obtained in accordance with the provisions of this Section 6.8 (“Minimum Purchase Requirement”).  [***] Theravance’s Minimum Purchase requirements shall be [***], but in no case shall be [***] in any Commercial Year.  In lieu of Theravance taking delivery of all of the Minimum Purchase Requirement,

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

15



 

Theravance shall have the option to pay for the shortfall of the Minimum Purchase Requirement at the prices set forth in Exhibit 5.11 and waive Hospira’s manufacture and delivery obligations for the Product.  In the latter event, Hospira shall invoice Theravance for the amount payable, and Theravance shall pay Hospira such amount within [***] days after receipt of Hospira’s invoice.  Notwithstanding the foregoing, all Product paid for by Theravance shall count towards the Minimum Purchase Requirement.

 

6.9                               Purchase Order Changes; Cancellations

 

(a)                                 Changes.  If Theravance requests that changes be made to any of its Purchase Orders within the Firm Order Period, Hospira shall attempt to accommodate such changes within reasonable manufacturing capabilities and efficiencies.  If Hospira can accommodate such changes, Hospira shall advise Theravance of any costs associated therewith.  If Theravance indicates in writing to Hospira that it should proceed to make the changes, Theravance shall be deemed to have accepted the obligation to pay Hospira for such costs.  If Hospira cannot accommodate such change, Theravance shall nonetheless be bound to its original Purchase Orders.

 

(b)                                 Cancellations.  If Theravance cancels any Purchase Order within [***] prior to the start of manufacture, Hospira shall be relieved of its manufacturing obligations relating to such order and Theravance will pay Hospira for such canceled order in full.  Notwithstanding the foregoing, Theravance shall not be liable for any cancellation that is due to its inability to supply sufficient API and/or Excipient for such Purchase Order requirements, and such inability is caused by an event of force majeure or other condition not reasonably within the control of Theravance; provided, however, that Theravance provides Hospira with no less than [***] days prior written notice of the impending inability to supply and the date upon which it expects the required quantities of API and/or Excipient to be delivered to Hospira.

 

6.10                        Shortage of Supply.  In the event that Hospira is unable to manufacture the Product in accordance with Theravance’s Purchase Orders, Hospira shall notify Theravance within [***].  If the inability is not: (a) caused by an event of force majeure; (b) attributable in whole or in part to Theravance’s acts or omissions or breach of its obligations under this Agreement; or (c) attributable in whole or in part to Hospira’s Component suppliers’ acts or omissions, then Hospira shall undertake all commercially reasonable measures to minimize any possible shortage of Product to Theravance as a result of its manufacturing issues.  If Hospira cannot undertake such measures promptly, then either party may request that the Project Managers convene a meeting to discuss possible remedial action.  For any Commercial Year where Hospira is unable to supply Product for a Firm Order Period, Theravance shall have no Minimum Purchase Requirement in that Commercial Year and shall be entitled to source all of its requirements for Product from Alternate Suppliers during the period of time that Hospira remains unable to supply.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

16



 

ARTICLE 7.                        QUALITY

 

7.1                               Quality Control.  Hospira shall apply its quality control procedures and in-plant quality control checks on the manufacture, packaging, and labeling of Product in the same manner as Hospira applies such procedures and checks to products of similar nature manufactured for sale by Hospira.  In addition, Hospira will test and release Product in accordance with the test methods described in Exhibit 7.1 to ensure that Product conforms to the Product Specifications.  The parties may change the test methods from time to time by mutual agreement.

 

7.2                               Quality Agreement.  The parties shall use all commercially reasonable efforts to negotiate and execute a quality agreement substantially in the form of the Quality Agreement attached hereto as Exhibit 7.2 within [***] days following the Effective Date.

 

7.3                               Audit Rights.

 

(a)                                 General Audit.  Upon [***] days prior written notice to Hospira, Theravance shall have the right to have representatives visit the Facility during normal business hours to review Hospira’s manufacturing operations relating to the Product and assess its compliance with cGMP and quality assurance standards and to discuss any related issues with Hospira’s manufacturing and management personnel.  Hospira shall provide Theravance with copies of Hospira’s manufacturing records (including the Master Batch Record) and other relevant documentation relating to the Products for the purposes of assuring Product quality and compliance with agreed-upon manufacturing procedures. Such general audits shall: (i) be limited to not more than [***] auditors designated by or representing Theravance; (ii) last for not more than [***]; and (iii) may be conducted not more than [***] per calendar year.

 

(b)                                 For Cause Audits.  Theravance shall also have the right to conduct “for-cause” audits to address significant product or safety concerns as discovered through Product failures related to Hospira’s manufacture of the Product.  Product failures would include issues related to stability out of specification, sterility, labeling or container integrity.  Theravance shall notify Hospira in writing in advance of the audit and thereafter, Theravance and Hospira shall mutually determine the timing of the audit.  Each for-cause audit shall be limited to two (2) auditors for no more than two (2) days, except if the parties mutually agree that a longer for-cause audit period is necessary.

 

(c)                                  Regulatory Authority Inspections.  Hospira also agrees to allow any Regulatory Authority to conduct any inspection of the Facility related to the manufacture of the Product which such Regulatory Authority may require and Hospira agrees to reasonably cooperate with the Regulatory Authority in connection with such inspection. Hospira will provide Theravance with notice of any such inspection as soon as practicable. In the event that a Regulatory Authority other than the FDA, Health Canada and the EMA requests or requires an audit of the Facility related to pre-approval inspection (“PAI”), Hospira shall be entitled to charge a fee of [***].  This fee shall include PAI preparation activities and support of the audit.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

17



 

(d)                                 Confidential Information in Audits.  Audits by Theravance or its designees may involve the disclosure of Confidential Information of Hospira or other customers of Hospira, and any such Confidential Information shall be subject to the terms of Article 11 hereof.  The results of such audits and inspections shall be considered Confidential Information under Article 11 and shall not be disclosed to Third Parties, [***], unless required by law and only then upon prior written notice to Hospira or to Theravance as the case may be.

 

7.4                               [***]  Notwithstanding the general audit rights in Section 7.3(a), Hospira will permit [***].  Theravance will provide Hospira with sufficient advance notice [***] that Hospira may make appropriate arrangements.

 

7.5                               Change in Product Specifications; Manufacturing Process.  Each of Theravance and Hospira agrees that it will not change the Product Specifications or any aspect of the manufacturing process (including changes to the Components, equipment, processes or procedures used to manufacture Product) without the prior written approval of the other party, which approval shall not be unreasonably withheld, delayed, or conditioned.  Upon agreement, the parties shall implement all such changes in accordance with the change control provisions of the Quality Agreement.

 

7.6                               Complaints and Adverse Reactions.  Each party shall promptly advise the other of any complaints, notices of Adverse Drug Experience(s) or event reports, safety issues or toxicity issues relating to the Products of which it becomes aware, and which may be the result of, or have an effect on, the Product manufacturing operations performed by Hospira.  Theravance shall be responsible for all reporting of such information to Regulatory Authorities.  Hospira shall promptly evaluate any complaint or notice of Adverse Drug Experience(s) and reasonably assist Theravance in responding to the same.

 

7.7                               Record Keeping.  Hospira shall supply Theravance with such records documenting the technology transfer work as foreseen in the Project Statement of Work or as are otherwise requested by Theravance.  Hospira shall retain all records documenting the technology transfer work and all records relating to the manufacture of each batch of Products for not less than five (5) years or for such other period as required by Applicable Law. Thereafter, Hospira shall not destroy such records without giving Theravance prior written notice and the opportunity further to store such records or to have such records shipped to Theravance, at Theravance’s cost and expense.

 

7.8                               Failed Batch.  In accordance with the Quality Agreement, Hospira shall investigate, and cooperate fully with Theravance in investigating, any batch of the Product that fails to comply with cGMP or fails to meet the Product Specifications or any Regulatory Authority requirements.  Hospira shall keep Theravance informed of the status of any investigation and, upon completion of the investigation, shall provide Theravance with a final written report describing the cause of the failure and summarizing the results of the investigation.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

18



 

7.9                               Product Recalls.

 

(a)                                 In the event: (i) any Regulatory Authority or other national government authority issues a request, directive or order that the Product be recalled; (ii) a court of competent jurisdiction orders such a recall, or (iii) Theravance or Hospira reasonably determines that Product should be recalled, the parties shall take all appropriate corrective actions, and shall cooperate in any governmental investigations surrounding the recall.

 

(b)                                 In the event that such recall results from a breach of Hospira’s express warranties under Sections 8.2(a) and 8.2(b), Hospira shall be responsible for replacing the quantity of Products that were recalled at no cost to Theravance.  Hospira shall use all commercially reasonable efforts to replace such Product as soon as practicable.  In addition, Hospira agrees that it shall be responsible for the administrative expenses of any recall.  For purposes of this Agreement, the administrative expenses of recall shall include the expenses of notification and destruction or return of the recalled Product, and any costs associated with the delivery of replacement Product, but shall not include lost profits of either party, nor the cost to replace API in excess of the limitations stated in Section 5.4(d).  In the event that the recall does not result from the breach of Hospira’s express warranties under this Agreement, Theravance shall be responsible for the expenses of the recall.

 

ARTICLE 8.                        WARRANTIES; COVENANTS AND INDEMNIFICATION

 

8.1                               Theravance’s Warranties.  Theravance represents and warrants that:

 

(a)                                 the API and the Excipient delivered to Hospira pursuant to this Agreement shall, at the time of delivery, not be adulterated or misbranded within the meaning of the Act or within the meaning of any other Applicable Law in which the definitions of adulteration and misbranding are substantially the same as those contained in the Act, as the Act and such laws are constituted and effective at the time of delivery, and will not be an article which, under the provisions of Sections 404 and 505 of the Act, may not be introduced into interstate commerce;

 

(b)                                 the API and the Excipient supplied to Hospira hereunder shall have been manufactured in accordance with all applicable cGMP (including ICH Q7A) and meet the API Specifications and Excipient Specifications set forth on Exhibit 1.3;

 

(c)                                  all specifications, including API Specifications, Excipient Specifications and Product Specifications that Theravance provides to Hospira shall conform to the appropriate submissions that Theravance files with the relevant Regulatory Authorities;

 

(d)                                 to the best of its knowledge, the Manufacturing Process does not infringe any patents or know-how of a Third Party;

 

(e)                                  Theravance’s performance of its obligations under this Agreement will not result in a material violation or breach of any agreement, contract, commitment or obligation to which Theravance is a party or by which it is bound and will not conflict with or constitute a default under its corporate charter or bylaws; and

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

19



 

(f)                                   it will not sell Product into any regulatory jurisdiction unless and until it receives the necessary Regulatory Authority approvals.

 

8.2                               Hospira’s Warranties and Covenants.  Hospira represents and warrants to Theravance that:

 

(a)                                 all Product that Hospira delivers to Theravance pursuant to this Agreement shall, at the time of delivery, not be adulterated or misbranded within the meaning of the Act or within the meaning of any other Applicable Law in which the definitions of adulteration and misbranding are substantially the same as those contained in the Act, as the Act and such laws are constituted and effective at the time of delivery and will not be an article which may not under the provisions of Sections 404 and 505 of the Act be introduced into interstate commerce;

 

(b)                                 all Product Hospira delivers to Theravance pursuant to this Agreement shall, at the time of delivery, be free from defects in material and workmanship and shall be:  (i) manufactured in accordance and conformity with the Product Specifications; (ii) manufactured in compliance with all Applicable Laws, including those relating to the environment, food or drugs and occupational health and safety, including those enforced or promulgated by the FDA, Health Canada and EMA (including compliance with cGMP) and (iii) at the time of delivery free and clear of any and all encumbrances, liens and other Third Party claims, with good and marketable title thereto transferred to Theravance.

 

(c)                                  in its performance of its obligations under the Statement of Work and this Agreement, Hospira will not knowingly incorporate into the manufacturing process any patents or know-how of a Third Party for which it does not have a license that permits it to do so and/or to be able to grant to Theravance the licenses and other rights otherwise required to be granted to Theravance hereunder;

 

(d)                                 Hospira’s performance of its obligations under this Agreement will not result in a material violation or breach of any agreement, contract, commitment or obligation to which Hospira is a party or by which it is bound and will not conflict with or constitute a default under its corporate charter or bylaws;

 

(e)                                  the foregoing warranties shall not extend to any nonconformity or defect which relates to or is caused by API and/or the Excipient supplied by Theravance to Hospira.  Except for Hospira’s indemnity obligations in Section 8.3, the replacement provisions of Sections 5.4(c) and (d), 5.12(d) and 7.9(b) shall be Theravance’s sole and exclusive remedy for nonconforming or defective Products; and

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

20



 

(f)                                   HOSPIRA MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCT.  ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY HOSPIRA.

 

8.3                               Indemnification by Hospira.  Hospira shall indemnify and hold harmless Theravance and its Affiliates and their respective officers, directors, employees, contractors, consultants and agents (each, a “Theravance Indemnitee”) from and against any and all losses, damages, liabilities, expenses and costs, including reasonable legal expense and attorneys’ fees (“Losses”), to which any Theravance Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party (a “Claim”) against a Theravance Indemnitee arising or resulting, directly or indirectly, from: (a) Hospira’s breach of any representation or warranty set forth in Section 8.2(a-d) and Section 8.2(f); (b) any infringement of any Third Party intellectual property right relating to Hospira’s manufacturing processes used in the manufacture of Product pursuant to this Agreement (excluding infringement due to adherence to the Manufacturing Process, the API Specifications, the Excipient Specifications, the Product Specifications, API, Excipient or Product); or (c) any negligent or wrongful act or omission on the part of Hospira, its employees, agents or representatives and which relates to Hospira’s performance hereunder.  Notwithstanding anything to the contrary herein, the foregoing indemnity shall not apply to the extent such Losses arise out of or result from any material breach of the representations, warranties and covenants made by Theravance under this Agreement, or Theravance’s negligent or wrongful acts or omissions or willful misconduct.

 

8.4                               Indemnification by Theravance.  Theravance shall indemnify and hold harmless Hospira and its Affiliates and their respective officers, directors, employees, contractors, consultants and agents (each, an “Hospira Indemnitee”) from and against any and all Losses to which any Hospira Indemnitee may become subject as a result of any Claim against a Hospira Indemnitee arising or resulting directly or indirectly from: (a) Theravance’s breach of any representation or warranty set forth in Section 8.1; (b) any infringement of any Third Party intellectual property right relating to the Manufacturing Process, the API Specifications, the Excipient Specifications, the Product Specifications, API, the Excipient, the Drug or Product (excluding Hospira’s processes used in the manufacture of the Product pursuant to this Agreement); (c) the use of or lack of safety or efficacy, sale, administration, import and/or transport by Theravance or its Affiliates or licensees of the Product manufactured and supplied by Hospira under this Agreement; and (d) any negligent or wrongful act or omission on the part of Theravance, its employees, agents or representatives and which relate to Theravance’s performance hereunder.  Notwithstanding anything to the contrary herein, the foregoing indemnity shall not apply to the extent such Losses arise out of or result from any material breach of the representations, warranties and covenants made by Hospira under this Agreement, or Hospira’s negligent or wrongful acts or omissions or willful misconduct.

 

8.5                               Conditions of Indemnification.  If either party seeks indemnification from the other hereunder, it shall promptly give notice to the other party of any Claim and shall cooperate

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

21



 

fully with the other party in the investigation and defense of all such Claim.  The indemnifying party shall have the option to assume the other party’s defense in any such Claim with counsel reasonably satisfactory to the other party.  In the event the indemnifying party assumes such defense, the indemnified party shall have the right, but not the obligation, to be represented by counsel of its own selection and at its own expense.  No settlement or compromise shall be binding on a party hereto without its prior written consent, such consent not to be unreasonably withheld.

 

8.6                               No Consequential Damages.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES OR LOST PROFITS RESULTING FROM ANY BREACH OF THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

ARTICLE 9.                        INTELLECTUAL PROPERTY RIGHTS

 

9.1                               Hospira’s Proprietary Rights.  Hospira has granted no license, express or implied, to Theravance to use Hospira proprietary technology, know-how or other proprietary rights:  (a) existing as of the Effective Date; or (b) developed by or for Hospira on or after the Effective Date outside the scope of any Project undertaken by Hospira pursuant to this Agreement.

 

9.2                               Theravance’s Proprietary Rights.  Theravance has granted no license, express or implied, to Hospira to use Theravance’s proprietary technology, know-how or other proprietary rights other than for Hospira’s technology transfer and manufacturing obligations under this Agreement.  Theravance shall be the sole owner of any proprietary technology, know-how or other proprietary rights developed by Hospira pursuant to the Project (“Project Inventions”), and Theravance shall be entitled to apply for patent protection on such Project Inventions at Theravance’s expense and risk.  Hospira agrees to assist Theravance as reasonably necessary to apply for, obtain and maintain patent protection on Project Inventions, including executing any necessary legal papers and furnishing information or data in its possession reasonably necessary to apply for, obtain or maintain such patent protection.  Hospira agrees to assign, and does hereby assign, such Project Inventions to Theravance without further compensation.  Hospira shall have no right to use Project Inventions in the making, having made, using, offering for sale, selling, and/or importing of Drugs and/or Products other than for the purposes of this Agreement.

 

ARTICLE 10.                 TERM AND TERMINATION

 

10.1                        Term.  This Agreement shall commence on the Effective Date and, unless earlier terminated as provided below, shall expire at the end of the fifth (5th) Commercial Year (“Initial Term”). This Agreement may be extended for additional terms of one (1) year (each, a “Renewal Term”) upon the mutual written consent of the Parties; provided, however, that either party shall have given notice to the other of its intent to renew the Agreement at least [***] prior to the end of the Initial Term and that the parties have commenced good faith negotiations on such renewal.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

22


 

10.2                        Termination of the Project.  Either party wishing to terminate the Project shall request in writing a pre-termination consultation with the other party to review potential concerns and to make reasonable efforts to continue with this Agreement.  Upon [***] days following said consultation, either party may terminate the Project or this Agreement upon [***] days prior written notice to the other party if the terminating party determines in good faith that the technology transfer for the Product is not technically feasible using commercially reasonable efforts.  If the Project or this Agreement is terminated in accordance with this Section 10.2, Hospira shall advise Theravance of Hospira’s actual technology transfer costs on the Project incurred prior to such termination.  Theravance will pay to Hospira that portion of the Technology Transfer Fee that represents: (a) the technology transfer work Hospira has completed and for which payment has not yet been received; and (b) on a pro rata basis, all technology transfer work that Hospira has undertaken but not yet completed as of the date of notice of termination.  In addition, Theravance shall reimburse Hospira for all of its documented out-of-pocket costs related to any non-cancelable commitments for raw materials, Components and services that Hospira has undertaken as part the Project in accordance with the Statement of Work.

 

10.3                        General Termination Rights.  Either party may terminate this Agreement as follows:

 

(a)                                 immediately by providing written notice to the other party:  (i) if proceedings in voluntary or involuntary bankruptcy are initiated by, on behalf of or against the other party (and, in the case of any such involuntary proceeding, not dismissed within ninety (90) days); or (ii) if the other party is adjudicated bankrupt, files a petition under applicable insolvency laws, is dissolved or has a receiver appointed for substantially all of its property; or

 

(b)                                 by giving to the other party [***] days’ prior written notice upon the breach of any warranty or any other material provision of this Agreement by the other party if the breach is not cured within [***] days after written notice thereof to the party in default; or

 

(c)                                  upon notice to the other party should the other party continue to be unable to perform its obligations under this Agreement for a period in excess of [***] days by reason of force majeure, in accordance with Section 12.1(a); or

 

(d)                                 after September 30, 2012, by giving to the other party [***] prior written notice [***].  The provisions of this Section 10.3(d) shall apply only [***] and not to the transfer, sale or divestiture of substantially all of the stock, business and/or assets of Theravance.  In the event Theravance exercises this termination right, Theravance shall be obligated to order, purchase and take delivery of [***] of Product from Hospira prior to the effective date of termination of the Agreement at the then-current prices set forth on Exhibit 5.11.  In lieu of

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

23



 

Theravance ordering and taking delivery of any or all of the [***], Theravance shall have the option to [***] Hospira’s manufacture and delivery obligations for such batches.  This obligation shall not be exclusive of any other obligation owed by or accruing to Theravance prior to the date of termination.

 

10.4       Theravance’s Failure to Purchase Minimums.  If, in any [***] consecutive Commercial Years after the first Commercial Year, Theravance [***], Hospira may terminate this Agreement upon [***] days prior written notice to Theravance.

 

10.5       Accrued Payment Obligations.  Upon termination pursuant to this Article 10, Theravance shall reimburse Hospira for Hospira’s cost of all Components purchased and on hand or on order, if such Components were ordered by Hospira based on Theravance’s Firm Purchase Orders, and such supplies of Components that cannot be reasonably used by Hospira for other purposes.  Hospira shall invoice Theravance for all amounts due hereunder.  Payment shall be made pursuant to Section 5.11(b).  At Theravance’s option and request Hospira shall ship to Theravance any such remaining supply of Component at Theravance’s cost.

 

10.6       Return of Inventory and Dedicated Equipment.  In the event of expiry or earlier termination of this Agreement, Hospira shall return to Theravance at Theravance’s option and request any Dedicated Equipment, remaining inventory of API and/or Excipient and Product at Theravance’s expense, unless termination shall have been as a result of a breach of this Agreement by Hospira, in which case such inventory shall be returned at Hospira’s expense.

 

10.7       Return of Confidential Information.  Upon expiry or termination of this Agreement for any reason, each party shall immediately return to the other all of the other party’s Confidential Information, in any form or medium disclosed by the disclosing Party (or upon a party’s instructions in writing, destroy the same and certify its destruction), provided, however, that each party shall be allowed to retain one (1) copy of the other’s Confidential Information solely for the purpose of ensuring continued compliance with Article 11.  For the avoidance of doubt, any such retained copy shall continue to be protected by the non-use and non-disclosure obligations in Article 11 for as long as it is in the possession of the receiving party notwithstanding any early termination or expiration under Section 11.2 or otherwise.

 

10.8       Survival.  The expiry or earlier termination of this Agreement shall not relieve either party of any obligations that it may have incurred prior to such expiry or earlier termination, and all covenants and agreements contained in this Agreement, which by their terms or context are intended to survive, will continue in full force and effect for a period of three (3) years unless a different time period is indicated in this Agreement.

 

ARTICLE 11.                 CONFIDENTIAL INFORMATION

 

11.1       Nondisclosure.  It is contemplated that in the course of the performance of this Agreement each party may, from time to time, disclose Confidential Information to the other.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

24



 

Hospira agrees that, except as expressly provided herein, it shall not disclose Confidential Information received from Theravance, and shall not use Confidential Information disclosed to it by Theravance, for any purpose other than to fulfill Hospira’s obligations hereunder.  Theravance agrees that, except as expressly provided herein, it shall not disclose Confidential Information received from Hospira, and shall not use Confidential Information disclosed to it by Hospira, for any purpose other than to fulfill Theravance’s obligations hereunder.  Each party shall use reasonable and customary precautions to safeguard the other party’s Confidential Information, including ensuring that it will limit the permitted disclosures of the other’s Confidential Information only to those persons who have a “need to know” such Confidential Information and ensuring that all employees, consultants and agents who are given access to such Confidential Information are informed of the confidential and proprietary nature of such Confidential Information and have contractual or professional confidentiality and non-use obligations that are at least as restrictive as those contained in this Agreement.

 

11.2                        Exceptions to Duty of Nondisclosure.

 

(a)                                 Notwithstanding Section 11.1 or any other provisions of this Agreement, nothing contained in this Agreement shall preclude Theravance from utilizing Confidential Information of Hospira as may be necessary in prosecuting the patent rights of Theravance pursuant to Article 9, obtaining Regulatory Approval(s), manufacturing Product pursuant to the terms and conditions of this Agreement, or complying with Applicable Laws or court orders (provided, however, that Theravance uses reasonable efforts to seek confidential treatment of such information, except as required to file and prosecute such patent applications).

 

(b)                                 Notwithstanding any other provision of this Agreement, a receiving party may disclose Confidential Information of the disclosing party if such disclosure is required by law to be disclosed; provided, however, that the receiving party gives the disclosing party prompt advance notice of such legal requirement so that the disclosing party has a reasonable opportunity to apply for confidential treatment of such Confidential Information or seek other appropriate equitable relief. The receiving party shall cooperate in good faith with any such effort by the disclosing party. Should Theravance determine that this Agreement or any collateral document needs to be filed with the Securities and Exchange Commission, it will seek customary confidentiality of commercial terms and sensitive information contained herein or therein through a confidential treatment request, and consult with Hospira in advance concerning such request.

 

(c)                                  The obligations of the parties relating to Confidential Information shall expire [***] years after the termination of this Agreement.

 

11.3                        Public Announcements.  Neither party shall make any public announcement concerning the transactions contemplated herein, or make any public statement which includes the name of the other party or any of its Affiliates, or otherwise use the name of the other party or any of its Affiliates in any public statement or document, except as may be required by law or

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

25



 

judicial order, without the written consent of the other party, which consent shall not be unreasonably withheld.  Subject to any legal or judicial disclosure obligation, any such public announcement proposed by a party that names the other party shall first be provided in draft to the other party.

 

11.4                        Injunctive Relief. The parties acknowledge that either party’s breach of this Article 11 may cause the other party irreparable injury for which it would not have an adequate remedy at law.  In the event of a breach or threatened breach, the non-breaching party may be entitled to injunctive relief in addition to any other remedies it may have at law or in equity

 

ARTICLE 12.                 MISCELLANEOUS

 

12.1                        Force Majeure and Failure of Suppliers.

 

(a)                                 Excusable Delay.  Neither party shall be considered to be in breach of this Agreement if a delay in the performance of any of its duties or obligations hereunder (except the payment of money) has been caused by or is the result of an act of God, acts of a public enemy, insurrections, riots, embargoes, labor disputes, including strikes, lockouts, job actions, boycotts, fires, explosions, floods, shortages of material or energy, or other unforeseeable causes beyond the reasonable control and without the fault or negligence of the party so affected (each an event of “force majeure”).  The performance of the affected party shall be extended for a period equal to the period of such delay; provided, however, that the affected party shall give prompt notice to the other party of such cause, and shall take promptly whatever reasonable steps are necessary to relieve the effect of such cause and resume compliance with this Agreement as soon as possible.  Should the event of force majeure continue for a period longer than [***] days, the party not so affected may terminate this Agreement in accordance with Section 10.3(c).

 

(b)                                 Transfer of Production.  If Hospira becomes subject to an event of force majeure which interferes with production of Product at the Facility, the parties shall mutually agree on implementation of an agreed-upon action plan to transfer production of Product to another Hospira plant.  The parties shall, after the execution of this Agreement and at the request of either party, meet to discuss and define such an action plan.

 

12.2                        Notices.  All notices hereunder shall be delivered as follows: (a) personally; (b) by facsimile and confirmed by first class mail (postage prepaid); (c) by registered or certified mail (postage prepaid); or (d) by overnight courier service, to the following addresses of the respective parties:

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

26



 

If to Theravance:

 

Theravance, Inc.

901 Gateway Boulevard

South San Francisco, CA

94080

 

Attention:  [***]

Vice President,

Technical Operations

Facsimile:  [***]

 

If to Hospira:

 

Hospira, Inc.

275 North Field Drive

Lake Forest, Illinois 60045

Attention:    V.P. Contract Manufacturing

Facsimile:    [***]

 

With a copy to:

 

Theravance, Inc.

901 Gateway Boulevard

South San Francisco, CA

94080

 

Attention:  [***]

Senior Vice President,

General Counsel

Facsimile:  [***]

 

With copy to:

 

Hospira, Inc.

Building H1; Department NLEG

275 N. Field Drive

Lake Forest, IL 60045

Attention:    General Counsel

Facsimile:    [***]

 

Notices shall be effective upon receipt if personally delivered or delivered by facsimile and confirmed by first class mail, on the third business day following the date of registered or certified mailing or on the first business day following the date of or delivery to the overnight courier. A party may change its address listed above by written notice to the other party.

 

12.3                        Choice of Law.  This Agreement shall be construed, interpreted and governed by the laws of the State of Delaware, excluding its choice of law provisions. The United Nations Convention on the International Sale of Goods is hereby expressly excluded.

 

12.4                        Alternative Dispute Resolution.  The parties recognize that bona fide disputes may arise which relate to the parties’ rights and obligations under this Agreement.  The parties agree that except as provided in Section 11.4, any such dispute shall be resolved by alternative dispute resolution in accordance with the procedures set forth in Exhibit 12.4.

 

12.5                        Assignment.  Neither party shall assign this Agreement nor any part thereof without the prior written consent of the other party; provided, however, that:  (a) either party may assign this Agreement to one of its wholly-owned subsidiaries or its parent corporation without such consent; and (b) either party, without such consent, may assign this Agreement in connection with the transfer, sale or divestiture of substantially all of its business to which this Agreement pertains or in the event of its merger or consolidation with another company.  Any

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

27



 

permitted assignee shall assume all obligations of its assignor under this Agreement.  No assignment shall relieve any party of responsibility for the performance of any accrued obligation which such party then has hereunder.  For the avoidance of doubt Theravance may assign this agreement without Hospira’s consent to any Third Party to whom it licenses the right to commercialize the Product.

 

12.6                        Entire Agreement.  This Agreement, together with the Exhibits referenced and incorporated herein, constitute the entire agreement between the parties concerning the subject matter hereof and supersede all written or oral prior agreements or understandings with respect thereto.  If there is any conflict, discrepancy, or inconsistency among the terms of the Quality Agreement, any Statement of Work, the Agreement or other form used by the parties, the Quality Agreement will control as regards all issues related to quality assurance; in all other cases, the Agreement will control.

 

12.7                        Severability.  This Agreement is subject to the restrictions, limitations, terms and conditions of all applicable governmental regulations, approvals and clearances.  If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein.

 

12.8                        Waiver-Modification of Agreement.  No waiver or modification of any of the terms of this Agreement shall be valid unless in writing and signed by authorized representatives of both parties.  Failure by either party to enforce any such rights under this Agreement shall not be construed as a waiver of such rights, nor shall a waiver by either party in one or more instances be construed as constituting a continuing waiver or as a waiver in other instances.

 

12.9                        Insurance.  Each party will procure and maintain, at its own expense, for the duration of the Agreement, and for [***] years thereafter if written on a claims made or occurrence reported form, the types of insurance specified below with carriers rated A- VII or better with A. M. Best or like rating agencies:

 

(a)                                 Workers’ Compensation accordance with applicable statutory requirements and shall provide a waiver of subrogation in favor of the other party;

 

(b)                                 Employer’s Liability with a limit of liability in an amount of not less than [***];

 

(c)                                  Commercial General Liability including premises operations, products & completed operations, blanket contractual liability, personal injury and advertising injury including fire legal liability for bodily injury and property damage in an amount not less than [***] per occurrence and [***] in the aggregate;

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

28



 

(d)                                 Commercial Automobile Liability for owned, hired and non-owned motor vehicles with a combined single limit in an amount not less than [***] each occurrence;

 

(e)                                  Excess Liability including products liability with a combined single limit in an amount of not less than [***];

 

(f)                                   Commercial Crime or Fidelity Bond in an amount of not less than [***] per occurrence and in the aggregate including an endorsement for Third Party liability without the requirement of a conviction;

 

(g)                                  Marine Insurance covering all shipments from warehouse to warehouse as described on the bill of lading at a full replacement cost.

 

Each party shall include the other party and its Affiliates, directors, officers, employees and agents as additional insureds with respect to Commercial General Liability, Commercial Automobile Liability and Excess Liability but only as their interest may appear by written contract.  Prior to commencement of services, and annually thereafter, each party shall furnish to the other party certificates of insurance evidencing the insurance coverages stated above and shall require at least [***] days written notice to the other party prior to any cancellation, non-renewal or material change in said coverage.  In the case of cancellation, non-renewal or material change in said coverage, each party shall promptly provide to the other party a new certificate of insurance evidencing that the coverage meets the requirements in this Section.  Each party agrees that its insurance shall act as primary and noncontributory from any other valid and collectible insurance maintained by the other party.  Each party may, at its option, satisfy, in whole or in part, its obligation under this Section through its self- insurance program.

 

12.10                 Exhibits.  All Exhibits referred to herein are hereby incorporated by reference.

 

12.11                 Debarment Warranty.  Hospira and Theravance each represent and warrant that it has never been, and it will not employ, contract with, or retain any person or entity directly or indirectly in connection with the services contemplated by this Agreement, if such a person or entity, as applicable, has ever been:  (a) debarred or convicted of a crime for which a person or entity can be debarred under any governmental statute (including 21 USC Section 335a, as amended (“Section 335a”)) or, to such party’s knowledge, threatened to be debarred or indicted for a crime or otherwise engaged in conduct for which a person or entity can be debarred under any governmental statute, including Section 335a; (b) disqualified under 21 CFR 312.70 or, to such party’s knowledge, threatened to be disqualified thereunder; or (c) to such party’s knowledge, threatened to be disqualified or indicted for a crime for which a person can be excluded by the federal government as set forth by the Department of Health and Human Services Office of Inspector General at http://exclusions.oig.hhs.gov and the Excluded Parties List System at http://epls.arnet.gov, which includes the General Services Administration.  If,

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

29



 

during the term of this Agreement or within three (3) years thereafter, either Party or any other person or entity directly or indirectly involved in the services performed under this Agreement is so debarred, disqualified, suspended, indicted, excluded or, to either Party’s knowledge, comes under investigation by the FDA or any other Regulatory Authority for debarment, disqualification, suspension, indictment, or exclusion, the Party will immediately notify the other Party of same.  Each Party agrees to provide written certification to the other that it has not used the services of any debarred, disqualified, suspended or excluded person or entity in any capacity related to the services hereunder if such certification is requested in connection with any certification regarding same that the other Party may make to a Regulatory Authority.

 

12.12                 Construction. In construing this Agreement, unless expressly specified otherwise; (a) references to Articles, Sections and Exhibits are to articles, sections of, and exhibits to, this Agreement; (b) except where the context otherwise requires, use of either gender includes the other gender, and use of the singular includes the plural and vice versa; (c) headings and titles are for convenience only and do not affect the interpretation of this Agreement; (d) any list or examples following the word “including” shall be interpreted without limitation to the generality of the preceding words; (e) except where the context otherwise requires, the word “or” is used in the inclusive sense; (f) all references to “dollars” or “$” herein shall mean U.S. Dollars; and (g) each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof.  In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions.  Any terms or conditions contained in an invoice that are inconsistent or in conflict with this Agreement shall be deemed not to be a part of such invoice.

 

12.13                 Counterparts and Facsimile Signatures.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.  Signatures provided by facsimile transmission or in Adobe™ Portable Document Format (PDF) sent by electronic mail shall be deemed to be original signatures.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

SIGNATURE PAGE FOLLOWS

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

30



 

IN WITNESS WHEREOF, the parties intending to be bound by the terms and conditions hereof have caused this Agreement to be signed by their duly authorized representatives as of the date first above written.

 

 

HOSPIRA WORLDWIDE, INC.

 

THERAVANCE, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Anthony N. Cacich

 

By:

/s/ Junning Lee

 

(Signature)

 

 

(Signature)

 

 

 

 

 

Name:

Anthony N. Cacich

 

Name:

Junning Lee

 

 

 

 

 

Title:

Corporate Vice President

 

Title:

Vice President, Technical Operations

 

One 2 One Contract Manufacturing Services

 

 

 

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

31



 

Note Regarding Exhibits

 

Exhibits 1.3, 1.25, 2.1, 3.2 and 7.1 to this Agreement are subject to further revision and updating to reflect final, mutually agreed upon details concerning, among other things, Active Pharmaceutical Ingredient and Excipient Specifications, Product Specifications, Technology Transfer Activities, Stability Studies and Product Test Methods.

 

Any such revisions will be properly reflected in a writing signed by both parties.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

32


 

EXHIBIT 1.3

 

Active Pharmaceutical Ingredient and Excipient Specifications

 

US/Canada Specification - TLV Drug Substance

 

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

33



 

EXHIBIT 1.3

 

Active Pharmaceutical Ingredient and Excipient Specifications (cont.)

 

EU Manufacturing QC Release Specification - TLV Drug Substance (Same as regulatory spec)

 

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

34



 

EXHIBIT 1.3

 

Active Pharmaceutical Ingredient and Excipient Specifications (cont.)

 

Specification for Excipient ([***])

 

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

35



 

EXHIBIT 1.25

 

Product Specifications

 

EU Specification - TLV Drug Product

 

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

36



 

EXHIBIT 1.25

 

Product Specifications (cont.)

 

US/Canada Specification - TLV Drug Product

 

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

37



 

EXHIBIT 2.1

 

Statement of Work

Technology Transfer Activities

 

MILESTONE I:                                                                                                        PROJECT INITIATION

 

Start Date:

[***]

 

 

Activities:

· Product and process evaluation

 

· Identify filling line requirements

 

· Initiate technology transfer

 

· Project management

 

 

Fees:

[***]

Payment:

Following kick-off

 

MILESTONE II                                                                                                       PRODUCT DEVELOPMENT

 

Start Date:

Upon receipt of product requirements and agreed methods of transfer documentation [***]

 

 

Activities:

[***]

 

 

Fees:

[***]

Payment:

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

38



 

EXHIBIT 2.1

 

Technology Transfer Activities (cont.)

 

MILESTONE III                                                                                                  WATER, CLINICAL AND REGISTRATION BATCH PRODUCTION

 

Start Date:

[***]

 

 

Activities:

[***]

 

 

Fees:

[***]

 

 

Payment:

[***]

 

MILESTONE IV                                                                                                   PROCESS VALIDATION AND REVIEW

 

Start Date:

[***]

 

 

Activities:

[***]

 

 

Fees:

[***]

 

 

Payment:

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

39



 

EXHIBIT 2.1

 

Technology Transfer Activities (cont.)

 

MILESTONE V                                                                                                        REGULATORY FILING PREPARATION AND SUBMISSION

 

Start Date:

[***]

Activities:

[***]

 

 

Fees:

[***]

 

MILESTONE VI                                                                                                   COMMERCIALIZATION

 

Start Date:

[***]

 

 

Activities:

[***]

 

 

Fees:

[***]

Payment:

[***]

 

 

Total Fees:

[***]

 

Product Assumptions:

 

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

40



 

EXHIBIT 2.1

 

Technology Transfer Activities (cont.)

 

Product Assumptions (cont’d):

 

[***]

 

Development Fee Assumptions:

 

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

41



 

EXHIBIT 3.2

 

Stability Studies

 

Test No.

 

Test

1

 

[***]

2

 

[***]

3

 

[***]

4

 

[***]

5

 

[***]

6

 

[***]

7

 

[***]

8

 

[***]

9

 

[***]

 

Development Stability

 

[***]

 

Fees:

[***]

 

Commercial Stability

 

 

 

Test Interval (Test #)

Storage Condition

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

Fees:

[***]

 

 

Payment:

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

42


 

Exhibit 5.5

 

Dedicated Equipment

 

List:

 

-40C Upright Freezer, 23 ft3

 

 

 

Cost:

 

[***]

 

 

 

Timing:

 

TBD

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

43



 

EXHIBIT 5.11

 

Commercial Product Prices

 

Presentation

 

Batch size

 

Package Configuration

 

Commercial Year Volume, units

 

Price per Unit

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

Commercial Pricing Assumptions and Terms:

 

[***]

 

 

 

 

 

 

 

 

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

44



 

EXHIBIT 7.1

 

Product Test Methods

 

Telavancin Drug Product Release Testing Method Summary

[***]

 

Telavancin Drug Substance ID Release Testing Method Summary

[***]

 

[***] Release Testing Method Summary

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

45



 

EXHIBIT 7.1

 

Product Test Methods (cont.)

 

[***]

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

46



 

EXHIBIT 7.2

 

Form of Quality Agreement

 

Theravance and Hospira agree to consult and use reasonable efforts to prepare and complete the Technical & Quality Agreement no later than [***] days after the Effective Date.  Upon completion, the Technical & Quality Agreement shall be attached to this Exhibit 7.2 and shall be made an integral part of this Agreement.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

47



 

EXHIBIT 12.4

 

Alternative Dispute Resolution

 

The parties recognize that bona fide disputes as to certain matters may arise from time to time during the Term which relate to either party’s rights and/or obligations.  To have such a dispute resolved by this Alternative Dispute Resolution (“ADR”) provision, a party first must send written notice of the dispute to the other party for attempted resolution by good faith negotiations between their respective presidents (or their designee(s), provided any such designee has the authority to act on behalf of such party to effectuate any such resolution) 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 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 its 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 neutral having requisite legal and commercial expertise and credentials (including with respect to the substantive law of the State of Delaware) 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:

 

(a)                                 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 Vita for each candidate.  No candidate shall be an employee, director, or shareholder of either party or any of their subsidiaries or Affiliates.

 

(b)                                 Such list shall include a statement of disclosure by each candidate of any circumstances likely to affect his or her impartiality.

 

(c)                                  Each party shall number the candidates in order of preference (with the number one (1) signifying the greatest preference) and shall 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, that 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.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

48



 

(d)                                 If the parties collectively have identified fewer than three (3) candidates deemed to have conflicts, the CPR immediately shall designate as the neutral the candidate for whom the parties collectively have indicated the greatest preference.  If a tie should 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)-2(d) shall be repeated.

 

3.                                      No earlier than twenty-eight (28) days or later than fifty-six (56) days after selection, the neutral shall hold a hearing to resolve each of the issues identified by the parties.  Except as otherwise agreed by the parties or as set forth herein, the ADR proceeding shall be governed in accordance with the CPR Rules for Non-Administered Arbitration of International Disputes (the “CPR Rules”).  The ADR proceeding shall take place in San Francisco, California, unless another location is agreed upon by the parties.

 

4.                                      In advance of the ADR proceeding, each party shall submit 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.

 

5.                                      Except as expressly set forth herein, no discovery shall be required or permitted by any means, including depositions, interrogatories, requests for admissions, or production of documents.  The parties agree that disclosure of documents shall be implemented by the neutral consistent with Mode B in Schedule 1 to the CPR Protocol on Disclosure of Documents and Presentation of Witnesses in Commercial Arbitration which provides for the disclosure of documents that each side will present in support of its case as well as pre-hearing disclosure of documents essential to a matter of import in the proceeding for which the party has demonstrated a substantial need, provided, however, that such documents have been identified with reasonable particularity.

 

6.                                      The hearing shall be conducted expeditiously over two (2) consecutive days.  Each party shall be entitled to five (5) hours of hearing time which may be allocated for opening statements, the presentation of testimony or other evidence, the cross-examination of witnesses, or closing argument.  The neutral may extend the time allotted for the hearing only for good cause or upon agreement of the parties.  The parties agree that the presentation of witnesses and testimony shall be implemented by the neutral consistent with Mode B in Schedule 3 to the CPR Protocol on Disclosure of Documents and Presentation of Witnesses in Commercial Arbitration, which provides for testimony to be presented orally at the hearing, and does not permit testimony to be submitted through written witness statements, depositions, or affidavits.  The neutral shall not be permitted to appoint experts or require the production of evidence that is not offered by the parties.

 

7.                                      The neutral shall rule on each disputed issue within fourteen (14) days following completion of the hearing.  Such ruling shall adopt in its entirety the proposed ruling and remedy of one of the parties on each disputed issue but may adopt one party’s proposed rulings and remedies on some issues and the other party’s proposed rulings and remedies on other issues.  The neutral shall not issue any written opinion or otherwise explain the basis of the neutral’s ruling or award.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

49



 

8.                                      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 reporter, and any expenses for a hearing room, shall be paid as follows:

 

(a)                                 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.

 

(b)                                 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 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.

 

9.                                      The rulings of the neutral and the allocation of fees and expenses shall be binding, non-reviewable (except for an alleged act of corruption or fraud on the part of the arbitrator), and non-appealable, and may be entered as a final judgment in any court having jurisdiction.

 

10.                               Except as provided in paragraph 9 or as required by law, 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.

 

11.                               The neutral may not award any form of damages or relief prohibited by Section 8.6 of the Agreement.  The parties hereby waive the right to punitive damages.

 

12.                               The neutral shall have the authority to grant injunctive relief and other specific performance.

 

13.                               The neutral shall, in rendering its decision, apply the substantive law of the State of Delaware, without regard to its conflict of laws provisions.

 

14.                               The hearings shall be conducted in the English language.

 

CONFIDENTIAL

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

50




Exhibit 10.17

 

COMMERCIALIZATION AGREEMENT

by and between

 

THERAVANCE, INC.

 

and

 

CLINIGEN GROUP PLC

Dated:  March 8, 2013

 



 

COMMERCIALIZATION AGREEMENT

 

This Commercialization Agreement (“Agreement”) dated March 8, 2013, is made by and between THERAVANCE, INC., a Delaware corporation having its principal office at 901 Gateway Boulevard, South San Francisco, California 94080, United States (“Theravance”), and CLINIGEN GROUP PLC, Pitcairn House Crown Square, Centrum 100, BURTON UPON TRENT, DE14 2WW United Kingdom (“Clinigen”). Theravance and Clinigen may be referred to as a “Party” or together, the “Parties”.

 

RECITALS

 

WHEREAS, Theravance invented a proprietary compound known as Telavancin (VIBATIV®) for the treatment of serious Gram-positive bacterial infections in humans;

 

WHEREAS, Clinigen and Theravance are willing to undertake commercialization activities in the Territory and to coordinate such activities and investment as provided by this Agreement with respect to Telavancin; and

 

WHEREAS, Clinigen and Theravance believe that a collaboration pursuant to this Agreement for the commercialization of Telavancin in the Territory would be desirable and compatible with their respective business objectives.

 

NOW, THEREFORE, in consideration of the foregoing premises and the representations, covenants and agreements contained herein, Theravance and Clinigen, intending to be legally bound, hereby agree as follows:

 

ARTICLE I.                                                                          DEFINITIONS

 

For purposes of this Agreement, the following initially capitalized terms, whether used in the singular or plural, shall have the following meanings:

 

1.01              Adverse Drug Experience” means any of: an “adverse drug experience,” a “life-threatening adverse drug experience,” a “serious adverse drug experience,” or an “unexpected adverse drug experience,” as those terms are defined at either 21 C.F.R.(S)312.32 or 21 C.F.R.(S)314.80 of the United States Code of Federal Regulations.

 

1.02              Affiliate” of a Party means any Person, whether de jure or de facto, which directly or indirectly controls, is controlled by, or is under common control with such Person for so long as such control exists, where “control” means the decision-making authority as to such Person and, further, where such control shall be presumed to exist where a Person owns more than fifty percent (50%) of the equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to vote on or direct the affairs of the entity.

 

1.03              API Compound” means bulk quantities of Telavancin active pharmaceutical ingredient compound prior to the commencement of secondary manufacturing resulting in the Licensed Product.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

1



 

1.04              Annual Net Sales” means Net Sales on a Calendar Year basis.

 

1.05              Breaching Party” shall have the meaning set forth in Section 14.02.

 

1.06              Business Day” means any day on which banking institutions in both San Francisco, California, United States and London, England are open for business.

 

1.07              Calendar Month” means for each Calendar Year, each of the twelve (12) one-month periods.

 

1.08              Calendar Quarter” means for each Calendar Year, each of the four (4) three-month periods ending March 31, June 30, September 30 and December 31; provided, however, that the first calendar quarter for the first Calendar Year shall extend from the Effective Date to the end of the first complete calendar quarter thereafter.

 

1.09              Calendar Year” means, for the first calendar year, the period commencing on the Effective Date and ending on December 31 of the calendar year during which the Effective Date occurs, and each successive period beginning on January 1 and ending twelve (12) consecutive Calendar Months later on December 31.

 

1.10              Claim” means all charges, complaints, actions, suits, proceedings, hearings, investigations, claims and demands.

 

1.11              Clinigen” means Clinigen Group PLC, however in so far as Clinigen Group PLC has delegated rights and responsibilities to its Affiliates, the term “Clinigen” shall include such Affiliate in the context of such rights and responsibilities.

 

1.12              Clinigen Invention” means an Invention invented solely or jointly by an employee, agent or contractor of Clinigen or its Affiliates (excluding Joint Inventions).

 

1.13              Clinigen Know-How” means all present and future information directly relating to the Licensed Product or a Clinigen Invention that is required for Theravance to perform its obligations or exercise its rights under this Agreement or that facilitates manufacturing, or Commercialization of the Licensed Product outside the Territory, and which during the Term are in Clinigen’s or any of its Affiliates’ possession or control and are or become owned by, or otherwise may be licensed (provided there are no restrictions on Clinigen thereof) by, Clinigen. Clinigen Know-How does not include any Clinigen Patents, Theravance Patents, Joint Invention Patents, or Theravance Know-How.

 

1.14              Clinigen Patents” means all present and future Patents (excluding Theravance Patents and Joint Invention Patents) owned by or licensed to Clinigen that cover a Theravance Compound and/or a Licensed Product and/or the making, having made, Commercialization, use, offer for sale, sale, exportation or importation of a Theravance Compound and/or a Licensed Product.

 

1.15              Commercialization” means any and all activities directed to marketing, promoting, distributing, offering for sale and selling the Licensed Product, and importing and exporting (within the Territory) the Licensed Product (to the extent applicable). When used as a verb, “Commercialize” means to engage in commercialization.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

2



 

1.16              Confidential Information” means all secret, confidential or proprietary information, data or know-how (including Clinigen Know-How and Theravance Know-How) whether provided in written, oral, graphic, video, computer or other form, provided by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) pursuant to this Agreement or generated pursuant to this Agreement, including but, not limited to, information relating to the Disclosing Party’s existing or proposed research, Development efforts, patent applications, business or products, the terms of this Agreement and any other materials that have not been made available by the Disclosing Party to the general public.  Confidential information shall not include any information or materials that the Receiving Party can document with competent written proof:

 

(a)                                 were already known to the Receiving Party (other than under an obligation of confidentiality) at the time of disclosure by the Disclosing Party;

 

(b)                                 were generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

 

(c)                                  became generally available to the public or otherwise part of the public domain after its disclosure or development, as the case may be, and other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

 

(d)                                 were disclosed to a Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or

 

(e)                                  were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party.

 

Notwithstanding the foregoing, specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the rightful possession of the Receiving Party merely because they are contained within more general public disclosures or more general information in the rightful possession of the Receiving Party.

 

1.17              Country” means any generally recognized sovereign entity.

 

1.18              Defense Notice” shall have the meaning set forth in Section 12.03(b).

 

1.19              Development” or “Develop” means nonclinical and clinical drug development activities, including, among other things: test method development and stability testing, characterization of impurities, toxicology, formulation, process development, manufacturing scale-up, development-stage manufacturing of nonclinical and clinical supplies, current Good Manufacturing Practices audits, current Good Clinical Practices audits, current Good Laboratory Practices audits, analytical method validation, manufacturing process validation, cleaning validation, scale-up and post approval changes, quality assurance/quality control development, statistical analysis and report writing, nonclinical and clinical studies (including Phase 3B/Phase 4 Studies), regulatory filing submission and approval, and regulatory affairs related to the foregoing. When used as a verb, “Develop” means to engage in development.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

3



 

1.20              Diligent Efforts” means the carrying out of obligations in a sustained manner consistent with the efforts a Party devotes to a product of similar market potential, profit potential or strategic value, based on conditions then prevailing and as if such Party and its Affiliates had no financial stake in any Directly Competing Product with the objective of Commercializing the Licensed Product in the Territory in accordance with the general guidelines outlined in Section 3.04, and the other terms and conditions of this Agreement. Diligent Efforts requires that: (i) each Party promptly assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis; (ii) each Party set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations; and (iii) each Party consistently make and implement decisions and allocate resources designed to advance progress with respect to such objectives.

 

1.21              Directly Competing Product” means one or more compounds, products, or combination products, other than the Licensed Product, [***].

 

1.22              Disclosing Party” shall have the meaning set forth in Section 1.16.

 

1.23              Disclosure Letter” means the letter from Theravance addressed to Clinigen of even date herewith .

 

1.24              Effective Date” means the date of the last signature to this Agreement.

 

1.25              EMA” means the European Medicines Agency and any successor agency thereto.

 

1.26              European Union” means the union of member states of the European community, its territories and possessions as of the Effective Date.

 

1.27              Excluded Claim” shall have the meaning set forth in Section 15.05(f).

 

1.28              FDA” means the United States Food and Drug Administration and any successor agency thereto.

 

1.29              Field” means veterinary or human pharmaceutical use of the Licensed Product.

 

1.30              First Commercial Sale” means the first shipment of commercial quantities of any Licensed Product sold to a Third Party by a Party or its Affiliates or sublicensees in a Country in the Territory after receipt of Marketing Authorization Approval for such Licensed Product in such Country. Sales for test marketing, sampling and promotional uses, clinical trial purposes or compassionate or similar uses shall not constitute a First Commercial Sale.

 

1.31              Force Majeure Event” shall have the meaning set forth in Section 15.03.

 

1.32              Fully Burdened Cost” means [***].

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

4



 

1.33              Governmental Authority” means any court, tribunal, arbitrator, agency, judicial, executive or legislative body, commission, official or other instrumentality of

 

(a)                                 any government of any Country,

 

(b)                                 a federal, state, province, regional, county, city, municipal or other political subdivision thereof,

 

(c)                                  any supranational body or

 

(d)                                 any patent and trademark office of any Country.

 

1.34              Hatch-Waxman Certification” shall have the meaning set forth in Section 13.04.

 

1.35              Housemark” means the name and logo of Clinigen or Theravance or any of their respective Affiliates as identified by one Party to the other from time to time.

 

1.36              Indemnified Party” shall have the meaning set forth in Section 12.03(a).

 

1.37              Indemnifying Party” shall have the meaning set forth in Section 12.03(a).

 

1.38              ICH” means the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use.

 

1.39              including” means including without limitation.

 

1.40              Infringement Claim” shall have the meaning set forth in Section 13.03(a).

 

1.41              Infringement Notice” shall have the meaning set forth in Section 13.03(b).

 

1.42              “Improvement” means any finding, enhancement, discovery, technology, information, invention, addition, modification, adaptation, advance, development, formulation, variation, or change (whether or not patented or patentable) with respect to a Theravance Compound and/or a Licensed Product conceived, developed and/or reduced to practice before or during the Term which is reasonably useful or necessary in connection with the use, manufacture, distribution, import/export, sale, Development, or Commercialization of a Licensed Product.

 

1.43              Invention” means any invention, industrial design, utility model, know-how, discovery or Improvement (whether patentable or not) invented, created or developed before or during the Term that is specifically related to a Theravance Compound and/or a Licensed Product, such as discoveries and ideas made as a result of research, manufacturing, Development or Commercialization.

 

1.44              Joint Invention” means an Invention invented jointly by an employee, agent or contractor of Theravance or its Affiliates and an employee, agent or contractor of Clinigen or its Affiliates.

 

1.45              Joint Invention Patents” means all present and future Patents covering Joint Inventions.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

5



 

1.46              Joint Steering Committee” shall have the meaning set forth in Section 3.01(b).

 

1.47              Laws” means all laws, statutes, rules, regulations (including, without limitation, current Good Manufacturing Practice Regulations as specified in 21 C.F.R. (S)(S) 210 and 211; Investigational New Drug Application regulations at 21 C.F.R. (S) 312; World Health Organization Good Manufacturing Practices, the European Union Guide to Good Manufacturing Practice for Medicinal Products, the body of European Union legislation in the pharmaceutical sector as is compiled in Volume 1 and Volume 5 of the publication “The rules governing medicinal products in the European Union” including European Union Directive 2001/83/EC, applicable ICH Guidelines; NDA regulations at 21 C.F.R. (S) 314, relevant provisions of the Federal Food, Drug and Cosmetic Act and other laws and regulations enforced by the FDA, and ordinances and other pronouncements having the binding effect of law of any Governmental Authority.

 

1.48              Licensed Product” means any study test materials, pharmaceutical composition or product containing a Theravance Compound as an active ingredient.

 

1.49              Losses” means any and all damages (including all incidental, consequential and statutory damages), awards, deficiencies, settlement amounts, defaults, assessments, fines, dues, penalties, costs, fees, liabilities, obligations, taxes, liens, losses, lost profits and expenses (including without limitation court costs, interest and reasonable fees of attorneys, accountants and other experts) incurred by or awarded to Third Parties and required to be paid to Third Parties with respect to a Claim by reason of any judgment, order, decree, stipulation or injunction, or any settlement entered into in accordance with the provisions of this Agreement, together with all documented out-of-pocket costs and expenses incurred in complying with any judgments, orders, decrees, stipulations and injunctions that arise from or relate to a Claim of a Third Party.

 

1.50              Major Market Country” shall mean each of the United Kingdom, Germany, France, Italy and Spain.

 

1.51              Marketing Authorization” means, with respect to a Country, any and all regulatory authorization(s) required by the relevant Governmental Authority to market and sell the Licensed Product in such Country.

 

1.52              Marketing Authorization Approval” shall mean the decision(s) of a Governmental Authority to issue, renew, amend and/or register Marketing Authorization.

 

1.53              Marketing Plan” means the plan, prepared by and mutually agreed upon by the Parties, identifying the core strategic, commercial and promotional claims and objectives for the Licensed Product in the Territory as reviewed and approved under 5.01(a).

 

1.54              Net Sales” means the gross sales of the Licensed Product sold by Clinigen, its Affiliates or their licensees (or such licensees’ Affiliates) to a Third Party, less the following to the extent borne by the seller and not taken into account in determining gross sales price: (a) deduction of cash, trade and quantity discounts actually given; (b) discounts, refunds, rebates, chargebacks, retroactive price adjustments, and any other allowances actually given which effectively reduce the net selling price, including institutional rebate or discount; and (c) credits and allowances for product returns actually made.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

6



 

1.55              Net Sales Report” shall have the meaning set forth in Section 6.03(b).

 

1.56              Officers” shall have the meaning set forth in Section 3.01(e)(ii).

 

1.57              Patents” means any and all issued patents and patent applications existing upon the Effective Date and in the future, including, without limitation, provisional applications, continuation applications, substitutions, continuations-in-part, divisional applications, renewals, Patent Cooperation Treaty applications, and all letters patent granted thereon, invention patents, utility model patents, industrial design patents, all patents-of-addition, reexaminations, reissues, registrations, confirmations, revalidations, certificates of addition, utility models and petty patents, including extensions or restorations of terms thereof by existing or future extension or restoration mechanisms (including regulatory extensions), pediatric use extensions, supplementary protection certificates or any other such right, together with any foreign counterparts thereof.

 

1.58              Patent Resolution Issue” shall have the meaning set forth in Section 13.02(i).

 

1.59              Person” means any natural person, corporation, general partnership, limited partnership, limited liability company, joint venture, joint-stock company, proprietorship or other business organization or legal entity.

 

1.60              Phase 3B/Phase 4 Studies” means those activities which provides for a clinical study or studies of the Licensed Product conducted in accordance with ICH and local standards, which are not required for receipt of Marketing Authorization in the Territory and which are principally intended to support the marketing and Commercialization of the Licensed Product, including without limitation investigator or institution initiated trials, clinical experience trials, and studies conducted to fulfill local commitments made as a condition of any Marketing Authorization.

 

1.61              Post-Term Option” shall have the meaning set forth in Section 2.07.

 

1.62              Promotional Materials” means the written, printed, video or graphic advertising, promotional, educational and communication materials (other than Licensed Product labeling) for marketing, advertising and promotion of the Licensed Product in the Territory.

 

1.63              Receiving Party” shall have the meaning set forth in Section 1.16.

 

1.64              Recording Party” shall have the meaning set forth in Section 6.09.

 

1.65              Step-In Rights” shall have the meaning set forth in Section 13.02(d).

 

1.66              Taxes” shall have the meaning set forth in Section 6.08.

 

1.67              Telavancin” means the chemical compound known as Telavancin, the chemical structure of which is attached as Exhibit A.

 

1.68              Term” means, on a Country-by-Country basis, the period from the Effective Date until the later of (a) the expiration or termination of the last Valid Claim of the last Theravance Patent, Clinigen Patent, or Joint Invention Patent covering a Theravance Compound and/or the

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

7



 

Licensed Product and/or its use or process of manufacture or (b) fifteen (15) years after First Commercial Sale in the Territory, unless this Agreement is terminated earlier in accordance with Article XIV.

 

1.69              Territory” shall mean the following European Union countries: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, England, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Northern Ireland, Poland, Portugal, Romania, Scotland, Slovakia, Slovenia, Spain, Sweden, and Wales; plus the following non-European Union countries: Switzerland and Norway; plus the following acceding and candidate countries: Croatia, Iceland, Montenegro, Serbia, Macedonia, Turkey, Albania, Bosnia and Herzegovina, Kosovo; plus the following additional countries within Europe:  Andorra, Liechtenstein, Monaco, San Marino, and Vatican City, but excluding Armenia, Azerbaijan, Belarus, Georgia, Moldova, Russia and Ukraine.

 

1.70              Theravance” means Theravance, Inc., a Delaware corporation, however in so far as Theravance, Inc. has delegated rights and responsibilities to its Affiliates, the term “Theravance” shall include such Affiliate in the context of such rights and responsibilities.  For example, in the provisions of this Agreement that address a Marketing Authorization, the term “Theravance” includes Theravance UK Limited.

 

1.71              Theravance Compound” means Telavancin as well as all salts, esters, complexes, chelates, hydrates, isomers, stereoisomers, crystalline and amorphous forms, prodrugs, solvates, pegylated and other modified forms, metabolites and metabolic precursors (whether active or inactive) of Telavancin.

 

1.72              Theravance Invention” means an Invention invented solely or jointly by an employee, contractor or agent of Theravance or its Affiliates (excluding Joint Inventions).

 

1.73              Theravance Know-How” means all present and future information directly relating to the Licensed Product or a Theravance Invention, including all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, nonclinical and clinical trial results, manufacturing procedures, test procedures and purification techniques, (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed, and other discoveries, developments, inventions and other intellectual property (whether or not confidential, proprietary, patented or patentable) that are required for Clinigen to perform its obligations or exercise its rights under this Agreement or that facilitates manufacturing, Development, or Commercialization of the Licensed Product in the Territory, and which during the Term are in Theravance’s or any of its Affiliates’ possession or control and are or become owned by, or otherwise may be licensed (provided there are no restrictions on Theravance thereof) by, Theravance. Theravance Know-How does not include any Theravance Patents, Clinigen Patents, Joint Invention Patents, or Clinigen Know-How.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

8



 

1.74              Theravance Patents” means all present and future Patents (excluding Clinigen Patents and Joint Invention Patents) owned by or licensed to Theravance or any of its Affiliates that cover a Theravance Compound and/or a Licensed Product and/or the making, having made, use, Development, Commercialization, offer for sale, sale, exportation or importation of a Theravance Compound and/or a Licensed Product. All the Theravance Patents as of the Effective Date are shown in Exhibit B.

 

1.75              Theravance Trademarks” means all trademarks and community designs to which Theravance or any of its Affiliates have rights relating to a Licensed Product in the Territory, excluding any Theravance Housemark.  The Theravance Trademarks for which there are registrations or pending applications relating thereto as of the Effective Date are set forth in Exhibit C.

 

1.76              Third Party” means a Person who is not a Party or an Affiliate of a Party.

 

1.77              Third Party Claim” shall have the meaning set forth in Section 12.03(a).

 

1.78              United States” means the United States of America, its territories and possessions.

 

1.79              Valid Claim” means any claim(s) pending in a patent application or in an unexpired patent which has not been held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not has been admitted to be invalid or unenforceable through reissue or disclaimer. If in any Country there should be two or more such decisions conflicting with respect to the validity of the same claim, the decision of the higher or highest tribunal shall thereafter control; however, should the tribunals be of equal rank, then the decision or decisions upholding the claim shall prevail when the decisions are equal in number, and the majority of decisions shall prevail when the conflicting decisions are unequal in number.

 

ARTICLE II.                                                                     RIGHTS AND OBLIGATIONS

 

2.01              License Grants from Theravance to Clinigen.

 

(a)                                 Commercialization License. Subject to the terms of this Agreement, including without limitation Section 2.03(a), Theravance hereby grants to Clinigen, and Clinigen accepts, an exclusive (even as to Theravance and its Affiliates) sublicensable, transferrable license under the Theravance Patents, Theravance Know-How, Theravance Inventions and Theravance’s rights in the Joint Inventions and/or Joint Invention Patents to Commercialize the Licensed Product in the Field in the Territory. The exclusivity specified in this Section 2.01(a) means and shall be construed in the following manner: Theravance and its Affiliates reserve a sublicensable, transferrable right under the Theravance Patents, Theravance Know-How, Theravance Inventions and Theravance’s rights in the Joint Inventions and/or Joint Invention Patents to Commercialize the Licensed Product within or outside of the Field, outside of the Territory.

 

(b)                                 Trademark License. Subject to the terms of this Agreement, including without limitation Section 2.03(a), Theravance hereby grants to Clinigen, and Clinigen accepts, an exclusive (even as to Theravance and its Affiliates) sublicensable, transferrable license under the Theravance Trademarks, Theravance’s rights in the Theravance Trademarks and the trade

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

9


 

dress associated with such Trademarks excepting out the logos of, and references to, Third Parties unless required by applicable Law, together with all the goodwill of the business symbolized thereby, for the purpose of Commercialization of the Licensed Product in the Field in the Territory. The exclusivity specified in this Section 2.01(b) means and shall be construed in the following manner: Theravance and its Affiliates reserve a sublicensable, transferrable right under the Theravance Trademarks and Theravance’s rights in the Theravance Trademarks for the purpose of Development and Commercialization of the Licensed Product within or outside of the Field, outside of the Territory.

 

(c)                                  Further Assurances. Theravance and Clinigen agree that they will duly cooperate in executing and registering with required Governmental Authorities this Agreement and/or any other agreements (including entering into separate license agreements, as applicable) in accordance with which Clinigen and/or Theravance are granted rights and licenses in order to effectuate the rights and licenses granted hereunder. Theravance and Clinigen shall execute and cause their respective Affiliates to execute any and all documents and perform and cause their respective Affiliates to perform any and all actions necessary to ensure that this Agreement and/or any other agreements granting Clinigen and/or Theravance rights and licenses duly comply with all applicable government requirements.

 

2.02              License Grants from Clinigen to Theravance.  Effective only upon the existence of any Clinigen Patent, Clinigen Know-How, Clinigen Inventions, Joint Invention and/or Joint Invention Patents, and subject to the terms of this Agreement, including without limitation Section 2.03(b), Clinigen grants to Theravance, and Theravance accepts the following licenses outside the Territory:

 

(a)                                 Development License: an exclusive (even as to Clinigen and its Affiliates), royalty-free, sublicensable, transferrable license for the entire term of legal protection under the Clinigen Patents, Clinigen Know-How, Clinigen Inventions and Clinigen’s rights in the Joint Inventions and/or Joint Invention Patents to use and Develop the API Compound and the Licensed Product within or outside of the Field, inside and outside the Territory. For the avoidance of doubt, the licenses granted in this Section 2.02 shall not alter in any way the licenses granted by Theravance to Clinigen under this Agreement.

 

(b)                                 Commercialization License: an exclusive (even as to Clinigen and its Affiliates), royalty-free, sublicensable, transferrable license for the entire term of legal protection under the Clinigen Patents, Clinigen Know-How, Clinigen Inventions and Clinigen’s rights in the Joint Inventions and/or Joint Invention Patents to Commercialize the Licensed Product within or outside of the Field, outside the Territory.

 

(c)                                  Manufacturing License: a non-exclusive, royalty-free, sublicensable, transferrable license for the entire term of legal protection under the Clinigen Patents, Clinigen Know-How, Clinigen Inventions and Clinigen’s rights in the Joint Inventions and/or Joint Invention Patents to import, export, use, make and have made API Compound and formulated Licensed Product within or outside of the Field, inside and outside the Territory.

 

2.03              Licenses to Third Parties. The licenses granted to Clinigen under Section 2.01 shall not prevent Theravance from granting:

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

10



 

(a)                                 licenses to Third Parties under Theravance Patents, Theravance Know-How, Theravance Inventions, Theravance’s rights in the Joint Inventions and/or Joint Invention Patents to Develop the API Compound and the Licensed Product inside or outside the Territory;

 

(b)                                 licenses to Third Parties under Theravance Patents, Theravance Know-How, Theravance Inventions, Theravance’s rights in the Joint Inventions and/or Joint Invention Patents to Commercialize the Licensed Product outside the Territory; and

 

(c)                                  licenses to Third Parties under the Theravance Patents, Theravance Know-How, Theravance Inventions, Theravance’s rights in the Joint Inventions and/or Joint Invention Patents to import, export, use, make and have made the API Compound and the Licensed Product inside or outside the Territory.

 

For the avoidance of doubt, the licenses granted in this Section 2.03 shall not alter in any way the licenses granted by Theravance to Clinigen under this Agreement.

 

2.04              Co-Ownership in the Joint Inventions and Joint Invention Patents. If the applicable Laws do not require granting a license in and to the Joint Inventions and Joint Inventions Patent as provided in Section 2.01 to Section 2.03 above, the Parties herewith unambiguously agree and acknowledge, and provide their express consent and approval, that each of Theravance and Clinigen have a right to use the Joint Inventions and Joint Invention Patents in accordance with the terms provided in Section 2.01 to Section 2.03 above unless otherwise is agreed by the Parties in writing with regard to any Joint Invention or Joint Invention Patent.

 

2.05              Sublicensing and Subcontracting. Each Party may sublicense or subcontract its rights, if any, to Develop, manufacture and/or Commercialize the API Compound and the Licensed Product in whole or in part to one or more of its Affiliates, provided that the rights sublicensed or subcontracted to such Affiliate shall automatically terminate upon a change of control of such Affiliate in connection with which such Affiliate ceases to be an Affiliate of such Party. Each Party may also sublicense or subcontract its rights, if any, to Develop, manufacture and/or Commercialize the API Compound and the Licensed Product, in whole or in part, to one or more Third Parties provided, however, that any such sublicense from Clinigen shall require the prior written consent of Theravance, such consent not to be unreasonably withheld. Each Party shall secure all appropriate covenants, obligations and rights from any such sublicensee or subcontractor granted by it under this Agreement, including, but not limited to, intellectual property rights and confidentiality obligations in any such agreement or other relationship, to ensure that such sublicensee can comply with all of such Party’s covenants and obligations to the other Party under this Agreement that are applicable to the sublicensees. Each Party’s rights to sublicense, subcontract or otherwise transfer its rights granted under this Article II are limited to those expressly set forth in this Section 2.05.

 

2.06              Trademarks and Housemarks.

 

(a)                                 Trademarks. The Licensed Product shall be Commercialized under trademarks in the Territory (and trade dress selected and approved by the Joint Steering Committee).  Clinigen shall exclusively own all trademarks in the Territory other than the Theravance Trademarks, and shall be responsible for the procurement, filing and maintenance of

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

11



 

trademark registrations in the Territory for such trademarks and all costs and expenses related thereto. Theravance shall be responsible for the procurement, filing and maintenance of trademark registrations in the Territory for the Theravance Trademarks and all costs and expenses related thereto. Clinigen shall also exclusively own all trade dress and copyrights associated with the Licensed Product in the Territory. Theravance agrees not to register or, in connection with the sale of any product, use in the Territory any trademark or trade dress which is identical to or confusingly similar to any of Clinigen’s trademarks or trade dress used for a Licensed Product unless otherwise agreed between the Parties. Clinigen agrees not to register or, in connection with the sale of any product, use any trademark which is identical to or confusingly similar to any of Theravance’s trademarks used for a Licensed Product unless otherwise agreed between the Parties.

 

(b)                                 Housemarks. Each Party acknowledges the goodwill and reputation that has been associated with the other Party’s Housemarks over the years, and shall use such Housemarks in a manner that maintains and promotes such goodwill and reputation and is consistent with trademark guidelines. Each Party shall take all reasonable precautions and actions to protect the goodwill and reputation that has inured to the other Party’s Housemarks, shall refrain from doing any act that is reasonably likely to impair the reputation of such Housemarks, and shall cooperate fully to protect such Housemarks.

 

2.07              Post-Term Option.  Following the expiration of the Term (unless this Agreement is terminated earlier in accordance with Article XIV, in which case this provision has no force or effect) Clinigen shall have the option (the “Post-Term Option”), on a Country-by-Country basis, to continue to have the exclusive right to Commercialize the Licensed Product in such Countries in the Territory under Section 2.01 and the other terms and conditions of this Agreement applicable to Section 2.01. Clinigen will notify Theravance in writing as to whether or not it is exercising the Post-Term Option, and for which Countries in the Territory, within thirty (30) days of the expiration of the Term.  After such date the Post-Term Option will expire.

 

ARTICLE III.                                                                GOVERNANCE

 

3.01              Joint Steering Committee.

 

(a)                                 Purpose.  The purposes of the Joint Steering Committee shall be (i) to determine the overall strategy for this collaboration between the Parties and (ii) to coordinate the Parties’ activities hereunder. The Parties intend that their respective organizations will work together and will use Diligent Efforts to assure success of the collaboration in accordance with Section 3.04.

 

(b)                                 Members. Within thirty (30) days after the Effective Date, the Parties shall establish a joint steering committee (the “Joint Steering Committee”), which shall consist of four (4) members, two (2) of whom shall be designated by each of Clinigen and Theravance and shall have appropriate expertise, with at least one (1) member from each Party being at least at a vice president level or higher in the case of Theravance and a member of its senior management in the case of Clinigen. Each of Clinigen and Theravance may replace any or all of its representatives on the Joint Steering Committee at any time upon written notice to the other Party. A Party may designate a substitute to temporarily attend and perform the functions of such Party’s designee at

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

12



 

any meeting of the Joint Steering Committee. Clinigen and Theravance each may, on advance written notice to the other Party, invite non-member representatives of such Party to attend meetings of the Joint Steering Committee. Each Party shall secure all appropriate covenants, obligations and rights from any such members, substitute members or non-member representatives permitted herein, including, but not limited to confidentiality obligations and intellectual property rights, to ensure that such Party can comply with all of such Party’s covenants and obligations to the other Party under this Agreement. The Joint Steering Committee shall be chaired by a representative of Theravance on the Joint Steering Committee. The other representative of Theravance on the Joint Steering Committee shall serve as secretary of the Joint Steering Committee.

 

(c)                                  Responsibilities. The Joint Steering Committee shall perform the following functions:

 

(i)                                               Oversee the Commercialization of the Licensed Product in the Territory pursuant to the terms of this Agreement. Have joint approval of, designs and protocols (if any) as well as internal publication plans and primary publications of clinical and nonclinical studies featuring a Licensed Product (e.g., publications for major international peer-reviewed journals and conferences);

 

(ii)                                            At each meeting of the Joint Steering Committee, review Net Sales for the year-to-date as available;

 

(iii)                                         Coordinate and monitor regulatory strategy and activities for the Licensed Product in the Territory in accordance with Article VIII;

 

(iv)                                        Review and approve the trademarks selected under Section 2.06;

 

(v)                                           Discuss the state of the markets for the Licensed Product in the Territory and opportunities and issues concerning the Commercialization of the Licensed Product in the Territory, including consideration of marketing and promotional strategy, marketing research plans, labeling and Licensed Product positioning;

 

(vi)                                        Life cycle management of, and intellectual property protection for, the Licensed Product in the Territory;

 

(vii)                                     At each meeting of the Joint Steering Committee, review the status of the major Commercialization activities related to the Licensed Product in the Territory and any results therefrom; and

 

(viii)                                  Have such other responsibilities as may be assigned to the Joint Steering Committee pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.

 

Notwithstanding the foregoing, Clinigen (and not the Joint Steering Committee) shall have the authority to establish and adjust pricing, develop go-to-market strategies and develop and implement marketing processes.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

13



 

(d)                                 Meetings. The Joint Steering Committee shall meet in person at least twice during every Calendar Year, and more frequently (i) as mutually agreed by the Parties or (ii) as required to resolve disputes or disagreements, on such dates, and at such places and times, as such Parties shall agree; provided that the Parties shall endeavor to have the first meeting of the Joint Steering Committee within thirty (30) days after the establishment of the Joint Steering Committee and no more than sixty (60) days after the Effective Date of this Agreement. Meetings of the Joint Steering Committee may also be held by means of telecommunications or video conferences as deemed appropriate by the Parties.

 

(e)                                  Decision-Making.

 

(i)                                               The Joint Steering Committee may make decisions with respect to any subject matter that is subject to the Joint Steering Committee’s decision-making authority and functions as set forth in Section 3.01(c). All decisions of the Joint Steering Committee shall be made by consensus, with the representatives from each Party presenting a unified position on behalf of such Party. The Joint Steering Committee shall use Diligent Efforts to resolve the matters within its roles and functions or otherwise referred to it.

 

(ii)                                            With respect to any unresolved issue, if the Joint Steering Committee cannot reach consensus within ten (10) Business Days after the matter has been brought to the Joint Steering Committee’s attention, then such issue shall be referred to the Chief Executive Officer of Theravance and the Chief Executive Officer of Clinigen (collectively, the “Officers”) for resolution.  The Parties agree that use of the Officers for resolution of any unresolved issues will be on an exceptional basis.  If the Officers are unable to reach consensus within thirty (30) days after the matter has been referred to them, the final decision will be made by the chairman of the Joint Steering Committee.

 

3.02              Minutes of Joint Steering Committee Meetings.  Definitive minutes of all Joint Steering Committee meetings shall be finalized no later than thirty (30) days after the meeting to which the minutes pertain as follows:

 

(a)                                 Distribution of Minutes. Within ten (10) days after a Joint Steering Committee meeting, the secretary of such committee shall prepare and distribute to all members of such committee draft minutes of the meeting. Such minutes shall provide a list of any issues yet to be resolved, either within such committee or through the relevant resolution process.

 

3.03              Expenses. Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate on, the Joint Steering Committee.

 

3.04              General Guidelines and Coordination Efforts. In all matters related to the Commercialization collaboration established by this Agreement, the Parties shall strive to balance as best they can the legitimate interests and concerns of the Parties and to jointly make key manufacturing, regulatory and Commercialization decisions related to the Licensed Product in the Territory in order to maximize the value of the Licensed Product both inside and outside the Territory, independent of the then-current Development status of the Licensed Product outside the Territory.  In all matters relating to this Agreement, the Parties shall seek to comply with good

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

14



 

pharmaceutical and environmental practices in accordance with ICH standards and consistent with practices generally acceptable to Governmental Authorities in the United States (including the FDA), the European Union (including the EMA) and its member states and the other competent Governmental Authorities in the Territory.  The Parties intend, following the Effective Date, to organize meetings of internal staff to communicate and explain the provisions of this Agreement to ensure the efficient and timely Commercialization of the Licensed Product in the Territory.

 

ARTICLE IV.                                                                 MARKETING AUTHORIZATIONS

 

4.01              Obligation for Transferring and Maintaining Marketing Authorizations.

 

(a)                                 Transfer of Marketing Authorization.  As soon as practicable but no more than sixty (60) days after the Effective Date, Theravance will transfer to Clinigen the relevant Marketing Authorization(s) for the Licensed Product in the Territory.  If the transfer of the relevant Marketing Authorization(s) for the Licensed Product is not possible within such sixty (60) day period, then Theravance and Clinigen will use Diligent Efforts to complete the transfer as promptly as possible thereafter.  For the purpose of such transfer, Theravance shall transfer or assign the Marketing Authorization(s) for the Licensed Product to Clinigen and/or cause that Marketing Authorization(s) for the Licensed Product to issue in the name of Clinigen.  Theravance shall execute and deliver all documents reasonably necessary to effect that transfer, assignment or issuance, and take all actions reasonably necessary to effect that transfer, assignment or issuance. Theravance hereby appoints Clinigen as Theravance’s attorney-in-fact, with full power of substitution, to execute, deliver and file in Theravance’s name any documents and take any actions reasonably necessary or desirable to transfer or assign any Marketing Authorization(s) for the Licensed Product to Clinigen or cause any Marketing Authorization(s) for the Licensed Product to issue in the name of Clinigen.  It is expressly agreed that any communication with Governmental Authorities within the Territory (including but not limited to the EMA) after the Effective Date by Theravance or any other entity acting in the name or on behalf of Theravance requires the prior written approval of Clinigen. After the transfer, Clinigen will be the Marketing Authorization holder and will maintain such Marketing Authorization.  Should there be a variation in the FDA approval that would necessitate a variation in Marketing Authorization(s), Theravance must inform Clinigen as soon as practicable, but not more than fifteen (15) days after such variation has become effective. Following the expiration of the Term, and except for such Countries (if any) for which Clinigen has exercised the Post-Term Option, Clinigen will transfer the relevant Marketing Authorization(s) to Theravance or Theravance’s designee in the Territory and Theravance or Theravance’s designee will become the Marketing Authorization holder for such Marketing Authorization(s).

 

(b)                                 Diligent Efforts. Clinigen will, in accordance with the priorities agreed by the Joint Steering Committee, exercise Diligent Efforts in pursuing any further required Marketing Authorization Approvals necessary to Commercialize the Licensed Product in each Country of the Territory.  Theravance will, in accordance with the priorities agreed by the Joint Steering Committee, exercise Diligent Efforts in providing Clinigen with evidence confirming that there is, within the marketing authorization dossier for the Licensed Product, an authorized manufacturing site which fulfills the requirements set out in Article 41 of Directive 2001/83/EC and otherwise provide Clinigen the information necessary to maintain the Marketing Authorization Approvals.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

15



 

(c)                                  Clinigen Funding Responsibility. Clinigen shall bear all costs and expenses associated with obtaining any further Marketing Authorization Approvals for the Licensed Product in each Country of the Territory during the Term. Clinigen will be the Marketing Authorization holder for any such approvals in any Country in the Territory during the Term. Following the expiration of the Term, Theravance or Theravance’s designee will become the Marketing Authorization holder for any such approvals in any Country in the Territory other than those Countries for which Clinigen has exercised the Post-Term Option.

 

(d)                                 Theravance Assistance.  To the extent reasonably required by Clinigen for the exercise of their rights hereunder, Theravance shall provide free of charge to Clinigen the existing US, Canadian and European Union regulatory dossier and, within reason, other related documents such as variations, amendments and supporting information for the Licensed Product (in CTD format), as well as stability data according to ICH guidelines. Upon Clinigen’s request, and at Theravance’s sole discretion and cost, Theravance will endeavor to provide Clinigen such other reasonable assistance as may be reasonably required by Clinigen to achieve its Marketing Authorization Approval objectives and Diligent Efforts obligations related to the Licensed Product, which such assistance may be provided directly or through Theravance’s vendors or contractors.

 

4.02              Transfer of Information from Theravance to Clinigen. As soon as practicable but no more than sixty (60) days after the Effective Date, the Parties shall determine what additional existing information and materials relating to the Licensed Product are necessary for Clinigen’s Marketing Authorization Approval obligations pursuant to this Article IV, and establish a process for transferring such information and material to Clinigen (including, to the extent available, in appropriate electronic format) or provide means of access thereto reasonably acceptable to both Parties.  Clinigen may request attendance at Theravance-agreed audits as an observer.

 

4.03              Non-EU Countries. If the legal authority to market and sell the Licensed Product in a Country in the Territory that is not a member of the European Union requires a local Marketing Authorization and/or regulatory authorization in addition to the EMA Marketing Authorization, such as a wholesale trading license, that Clinigen does not possess, then Clinigen shall be permitted to obtain such Marketing Authorization and/or regulatory authorization in addition to the EMA Marketing Authorization to Commercialize the Licensed Product in that Country in the Territory through partners, sublicensees, subcontractors or local distributors who shall obtain and possess such licenses as trustee for Clinigen.  For the sake of clarity and avoidance of doubt, such local partners, sublicensees, subcontractors or local distributors shall not be entitled to any rights or licenses beyond the scope of the rights and license granted to Clinigen under this Agreement.

 

ARTICLE V.                                                                      COMMERCIALIZATION

 

5.01              Marketing Plans.

 

(a)                                 General. The Joint Steering Committee shall be consulted upon and review an overall Marketing Plan for the Licensed Product in the Territory prepared by Clinigen. Each Marketing Plan shall define the goals and objectives for Commercializing the Licensed Product in the Territory and in the pertinent Calendar Year. Clinigen shall be responsible for pricing and market approach, but major strategic changes to this plan shall require Joint Steering

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

16



 

Committee approval. Major strategic changes are defined as changes in Territory (additions or deletions), the application for or withdrawal of Marketing Authorizations in any Country in the Territory or regulatory issues.

 

(b)                                 Contents of Each Marketing Plan.

 

(i)                                               Clinigen shall be responsible for developing and executing the overall Marketing Plan for the Licensed Product.  Such Marketing Plan shall contain as appropriate results of market research and strategy, including market size, dynamics, growth, customer segmentation, customer targeting, competitive analysis and Licensed Product positioning in each Country in the Territory; and sales plans for each Country or other pertinent geographic subdivision of the Territory.

 

(ii)                                            The Joint Steering Committee shall retain the authority to review and approve core advertising and promotion programs and strategies in each Country in the Territory, including literature, media plans, symposia and speaker programs; and Phase 3B/Phase 4 Studies to be conducted (if any) in the Territory, in recognition of the requirements of applicable Laws.

 

5.02              Obligations for Commercialization. Clinigen shall use Diligent Efforts to Commercialize the Licensed Product in each Country in the Territory in accordance with the then-current Marketing Plan and to ensure that Licensed Product intended for sale in the Territory is not exported from or sold outside of the Territory.

 

5.03              Commercialization.

 

(a)                                 Clinigen Responsibility. Under the guidance provided by the Joint Steering Committee,

 

(i)                                               Clinigen shall have the responsibility for Commercialization of the Licensed Product for distribution and sale in each Country in the Territory. Clinigen shall bear all costs and expenses associated with the Commercialization of the Licensed Product for sale or distribution in the Territory.

 

(ii)                                            Clinigen shall have the sole responsibility to distribute, sell, record sales and collect payments for the Licensed Product in the Territory.

 

(iii)                                         Considering the input provided by the Joint Steering Committee (subject to applicable Laws), Clinigen shall have the responsibility for establishing and modifying the terms and conditions with respect to the sale of the Licensed Product in the Territory, including, without limitation, the price or prices at which the Licensed Product will be sold, any discount applicable to payments or receivables, and similar matters.

 

(iv)                                        Clinigen will be responsible for storage after delivery to Clinigen, order receipt, order fulfillment, shipping and invoicing of the Licensed Product in the Territory.

 

(b)                                 Semi-Annual Reports. Clinigen shall provide the Joint Steering Committee a formal Commercialization report semi-annually. Such reports shall set forth in detail the results of Clinigen’s Commercialization activities related to the Licensed Product performed during such semi-annual period in each Country in the Territory.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

17



 

(c)                                  Theravance Assistance. Upon Clinigen’s request, and as agreed and coordinated by the Joint Steering Committee, Theravance will endeavor to provide Clinigen such reasonable assistance as may be reasonably required by Clinigen to achieve its Commercialization objectives and Diligent Efforts obligations related to the Licensed Product, which such assistance may be provided directly or through Theravance’s vendors or contractors. Clinigen will reimburse Theravance within thirty (30) days of receipt of invoice for all of Theravance’s fully burdened internal and external costs associated with providing such support or assistance to Clinigen.

 

5.04              Theravance Access to and Use of Commercial Information. Clinigen will provide Theravance with full and timely access free of charge to any and all information and data generated by or on behalf of Clinigen and its Affiliates or sublicensees or subcontractors related to Commercialization of the Licensed Product. Theravance will have the unrestricted right, subject to its obligations under Article X, to use and cite any such information and data to support Development and Commercialization of the Licensed Product outside the Territory.

 

ARTICLE VI.                                                                 FINANCIAL PROVISIONS

 

6.01              Signing Fee.                                          Two (2) Business Days after the Effective Date, Clinigen shall pay to Theravance a non-creditable, non-refundable amount of Five Million United States Dollars (U.S. $5,000,000.00).

 

6.02              Payment of Royalties on Net Sales.

 

(a)                                 During Calendar Years 2013 and 2014.

 

(i)                                               Patent Royalties. As further partial consideration for the acquisition of license rights under the Theravance Patents by Clinigen under this Agreement, where there is a Valid Claim of a Theravance Patent or a Joint Patent covering a Theravance Compound and/or the Licensed Product and/or its use or process of manufacture in a Country of the Territory at the time Net Sales in such Country occur, Clinigen shall pay Theravance, within thirty (30) days after the end of each Calendar Quarter during the Calendar Years 2013 and 2014, royalty payments as follows:

 

1)                                     On total Annual Net Sales in the Territory up to and including [***]: 20%

 

2)                                     On total Annual Net Sales in the Territory between [***]

 

3)                                     On total Annual Net Sales in the Territory greater than [***]: 30%

 

(ii)                                            Know-How Royalty. As further partial consideration for the acquisition of license rights under the Theravance Know-How by Clinigen under this Agreement, where an obligation to pay royalties under Section 6.02(a)(i) is not applicable in the

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

18



 

Territory, Clinigen shall pay Theravance, within thirty (30) days after the end of each Calendar Quarter during the Calendar Years 2013 and 2014, royalty payments as follows:

 

1)                                     On total Annual Net Sales in the Territory up to and including [***]

 

2)                                     On total Annual Net Sales in the Territory between [***]

 

3)                                     On total Annual Net Sales in the Territory greater than [***]

 

(b)                                 Beginning January 1, 2015.

 

(i)                                               Patent Royalties. As further partial consideration for the acquisition of license rights under the Theravance Patents by Clinigen under this Agreement, where there is a Valid Claim of a Theravance Patent or a Joint Patent covering a Theravance Compound and/or the Licensed Product and/or its use or process of manufacture in a Country of the Territory at the time Net Sales in such Country occur, Clinigen shall pay Theravance, within thirty (30) days after the end of each Calendar Quarter from January 1, 2015 and during the remainder of the Term, royalty payments as follows:

 

1)                                     On total Annual Net Sales in the Territory up to and including [***]

 

2)                                     On total Annual Net Sales in the Territory greater than [***]: 30%

 

(ii)                                            Know-How Royalty. As further partial consideration for the acquisition of license rights under the Theravance Know-How by Clinigen under this Agreement, where an obligation to pay royalties under Section 6.02(b)(i) is not applicable in the Territory, Clinigen shall pay Theravance, within thirty (30) days after the end of each Calendar Quarter from January 1, 2015 and during the remainder of the Term, royalty payments as follows:

 

1)                                     On total Annual Net Sales in the Territory up to and including [***]

 

2)                                     On total Annual Net Sales in the Territory greater than [***]

 

(iii)                                         Post-Term RoyaltyAs further partial consideration for the acquisition of exclusive rights to continue to sell the Licensed Product following its exercise of the Post-Term Option, Clinigen shall pay Theravance, within thirty (30) days after the end of each Calendar Quarter from the date the Post-Term Option is exercised, royalty payments as follows:

 

1)                                     On total Annual Net Sales in the Territory up to and including [***]

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

19


 

2)                                     On total Annual Net Sales in the Territory greater than [***]

 

6.03              Royalty Responsibilities; Net Sales Reports.

 

(a)                                 Payments to Third Parties.

 

(i)                                               Subject to Section 6.03(a)(ii), if, as a result of a settlement approved by both Parties or as a result of a final non-appealable judgment, Clinigen is required to pay any amounts to a Third Party directly because using or selling the Licensed Product in a Country of the Territory is found to infringe the rights of such Third Party, Clinigen shall deduct [***] of any such amount paid to such Third Party from the royalties otherwise due Theravance on Net Sales of the Licensed Product in such Country.

 

(ii)                                            Clinigen shall pay any amounts owed to a Third Party as a result of the use of Clinigen Patents or Clinigen Know-How with respect to sales of Licensed Product and shall not deduct any of such amounts from the royalties due Theravance.

 

(b)                                 Net Sales Report. Within thirty (30) days after the end of each Calendar Quarter, Clinigen shall submit to Theravance a written report setting forth on a Country-by-Country basis Net Sales during such Calendar Quarter, total royalty payments due Theravance, relevant market share data and any payments made to any Third Party pursuant to Section 6.03(a)(i) (each a “Net Sales Report”).

 

6.04              GAAP. All financial terms and standards defined or used in this Agreement for sales or activities shall be governed by and determined in accordance with United States generally accepted accounting principles, consistently applied.

 

6.05              Currencies. Monetary conversion from the currency used in the Territory into United States Dollars shall be calculated as follows, unless otherwise mutually agreed to by the Parties: the quarterly rate shall be the daily closing spot rates on the last Business Day of the relevant Calendar Quarter using the exact figures provided by the Financial Times.

 

6.06              Manner of Payments. All sums due under this Article VI shall be payable in United States Dollars by bank wire transfer in immediately available funds to such bank account(s) set forth in Section 15.17 of this Agreement. Clinigen shall notify Theravance as to the date and amount of any such wire transfer to Theravance at least five (5) Business Days prior to such transfer.

 

6.07              Interest on Late Payments. If Clinigen shall fail to make a timely payment pursuant to this Article VI, any such payment that is not paid on or before the date such payment is due under this Agreement shall bear interest, to the extent permitted by applicable Laws, at the average one-month London Inter-Bank Offering Rate (LIBOR) for the United States Dollar as reported from time to time in The Wall Street Journal, effective for the first date on which payment was delinquent and calculated on the number of days such payment is overdue or, if such rate is not regularly published, as published in such source as the Joint Steering Committee agrees.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

20



 

6.08              Taxes. Clinigen shall be responsible for all taxes, levies and other duties on Licensed Product sale arising out of this Agreement (“Taxes”) other than taxes attributable to Theravance income.  If Clinigen is required by applicable law (after giving effect to any applicable tax treaty) to deduct or withhold any Taxes (other than taxes attributable to Theravance income) from or in respect of any amount payable to Theravance under this Agreement, (a) Clinigen shall make the necessary withholding or deduction of applicable Taxes and pay the relevant taxation authority the minimum amount necessary to comply with the applicable law, and (b) the corresponding amount payable hereunder shall be increased as may be necessary so that after Clinigen makes all required deductions or withholdings, Theravance shall receive an amount equal to the amount it would have received had no such deductions or withholdings been made.  Should Theravance be able, within the maximum period allowable by applicable law, to utilize as a tax credit or tax deduction any amounts withheld or deducted by Clinigen as provided above, Theravance shall promptly notify Clinigen of the amount of such tax credit or other tax benefit within thirty (30) days after such amount can first be calculated and, at the time of such notice, refund the amount of such credit (or amount of tax saved with respect to such deduction) to Clinigen, or, if Clinigen so requests in writing prior to such time, provide a credit for such amount to Clinigen hereunder whereby Clinigen shall be entitled to deduct such amount from the next payment due to Theravance under this Agreement.   Both Parties shall reasonably cooperate with each other, including by providing such certifications or other documentation, as may reasonably be necessary to obtain any exemption, reduction or exception available under applicable law from any such deduction or withholding from amounts payable hereunder.

 

6.09              Financial Records; Audits. Clinigen shall keep, and shall cause its Affiliates, sublicensees and subcontractors to keep, such accurate and complete records of Net Sales as are necessary to determine the amounts due to Theravance under this Agreement and such records shall be retained by Clinigen or any of its Affiliates or sublicensees (in such capacity, the “Recording Party”) during the Term. During normal business hours and with reasonable advance notice to the Recording Party, such records shall be made available for inspection, review and audit, at the request and expense of Theravance, by an independent certified public accountant, or the local equivalent, appointed by Theravance and reasonably acceptable to the Recording Party for the sole purpose of verifying the accuracy of the Recording Party’s accounting reports and payments made or to be made pursuant to this Agreement; provided, however, that such audits may not be performed by Theravance more than once per Calendar Year. Such accountants shall be instructed not to reveal to Theravance the details of their review, except for (i) such information as is required to be disclosed under this Agreement and (ii) such information presented in a summary fashion as is necessary to report the accountants’ conclusions to Theravance, and all such information shall be deemed Confidential Information of the Recording Party; provided, however, that in any event such information may be presented to Theravance in a summary fashion as is necessary to report the accountants’ conclusions. All costs and expenses incurred in connection with performing any such audit shall be paid by Theravance unless the audit discloses at least a five percent (5%) shortfall, in which case the Recording Party will bear the full cost of the audit for such Calendar Year. Theravance will be entitled to recover any shortfall in payments due to it as determined by such audit plus interest thereon calculated in accordance with Section 6.07, or alternatively shall have the right to offset and deduct any such shortfall in payments due to it against payments Theravance is otherwise required to make to the Reporting Party under this Agreement. The documents from which were calculated the sums due under this Article VI shall

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

21



 

be retained by the relevant Party during the Term.  If the Recording Party is not Clinigen, Clinigen shall cause its Affiliate or sublicensee to perform the obligations under this Section 6.09.

 

ARTICLE VII.                                                            PROMOTIONAL MATERIALS

 

7.01              Markings of Promotional Materials. To the extent not forbidden under applicable Laws, and further to the extent reasonably practicable, all Promotional Materials for use with the Licensed Product in the Territory will, at Theravance’s sole discretion, indicate the contribution of the license from Theravance for the Licensed Product. Subject to the foregoing, the Theravance Housemark and the Clinigen Housemark shall both be given exposure and prominence on all Promotional Materials, as well as labeling, package inserts or outserts and packaging for the Licensed Product in the Territory. Unless required by applicable Laws, Theravance at its sole discretion may choose not to have the Theravance Housemark displayed on such Promotional Materials or labeling.

 

7.02              Statements Consistent with Labeling. Clinigen and its Affiliates, sublicensees and subcontractors shall ensure that sales representatives detail the Licensed Product in a manner and consistent with the requirements of applicable Laws.

 

ARTICLE VIII.                                                       REGULATORY MATTERS

 

8.01              Regulatory Filings. Clinigen shall also be solely responsible for filing any additional regulatory applications for the Licensed Product in the Territory with the appropriate Governmental Authorities and will use Diligent Efforts in seeking appropriate Marketing Authorization and Marketing Authorization Approval for the Licensed Product in each Country in the Territory.  If agreed by the Joint Steering Committee, and if consistent with Clinigen’s Diligent Efforts obligations, Clinigen may choose not to seek Marketing Authorization and Marketing Authorization Approval for the Licensed Product in a particular Country.  The regulatory approvals which may be required for the performance of this Agreement include, without limitation: permission to conduct any clinical trials in the Territory, permissions necessary for conduct of clinical trials in the Territory (e.g., permission for importation of a medicinal preparation for clinical trials, permission for exportation of biological materials), Marketing Authorization and Marketing Authorization Approval. Upon Clinigen’s request, and as agreed and coordinated by the Joint Steering Committee, Theravance will endeavor to provide Clinigen such reasonable assistance as may be reasonably required by Clinigen to fulfill its responsibilities hereunder. Such Theravance assistance may be provided directly or through Theravance’s vendors or contractors. Clinigen shall be responsible for maintaining the regulatory approvals obtained under this Section 8.01 and shall solely own all such regulatory approvals in the Territory. Clinigen shall be fully responsible for bearing all costs and expense associated with undertaking and completing said registration activities in the Territory, including but not limited to the costs of preparing and prosecuting applications for such regulatory approvals and fees payable to regulatory agencies in obtaining and maintaining same.

 

8.02              Access to and Use of Regulatory Filings.

 

(a)                                 Clinigen will provide Theravance with full and timely access free of charge to any and all regulatory filings and associated data generated by or on behalf of Clinigen

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

22



 

and its Affiliates or sublicensees or subcontractors related to the Licensed Product. Theravance will have the unrestricted right to use and cite any such regulatory filings and associated data to support Development and Commercialization of the Licensed Product outside the Territory.

 

(b)                                 Theravance will, on an annual basis, provide Clinigen with an index listing all regulatory filings relating to the Licensed Product outside the Territory.  At Clinigen’s request, Theravance will provide Clinigen with full and timely access free of charge to any and all such regulatory filings and associated data generated by or on behalf of Theravance and its Affiliates or sublicensees or subcontractors that is reasonably necessary for the Commercialization of the Licensed Product inside the Territory.  Clinigen will have the right to use and cite any such regulatory filings and associated data to fulfill its obligations under this Agreement inside the Territory.

 

8.03              Exchange of Drug Safety Information.

 

(a)                                 Clinigen shall be responsible for recording, investigating, summarizing, notifying, reporting and reviewing all Adverse Drug Experiences in the Territory in accordance with applicable Laws and shall require that its Affiliates, sublicensees and subcontractors (i) adhere to all requirements of applicable Laws that relate to the reporting and investigation of Adverse Drug Experiences in the Territory, and (ii) inform the Joint Steering Committee promptly of such matters arising therefrom.

 

(b)                                 Theravance shall notify Clinigen as soon as practicable of all “adverse reactions”, “serious adverse reactions” and “unexpected adverse reactions” as such terms are defined in Directive 2001/83/EC and all “adverse events,” “adverse experiences” and “adverse drug reactions” as such terms are defined in ICH E2A that occur outside the Territory to enable Clinigen to comply with the Guideline on good pharmacovigilance practices (GVP) Module VI — Management and reporting of adverse reactions to medicinal products.

 

8.04              Recalls or Other Corrective Action. Each Party shall, as soon as practicable, notify the other Party of any recall information received by it in sufficient detail to allow the Parties to comply with any and all applicable Laws. Clinigen shall promptly notify Theravance of any material actions to be taken by Clinigen with respect to any recall or market withdrawal or other corrective action related to the Licensed Product in the Territory prior to such action to permit Theravance a reasonable opportunity to consult with Clinigen with respect thereto. All costs and expenses with respect to a recall, market withdrawal or other corrective action in the Territory shall be borne by Clinigen, subject to Clinigen’s right to be indemnified pursuant to Section 12.02 if applicable. Clinigen shall have sole responsibility for and shall make all decisions with respect to any recall, market withdrawals or any other corrective action related to the Licensed Product in the Territory.

 

8.05              Events Affecting Integrity or Reputation. The Parties shall notify each other immediately of any circumstances of which they are aware and which could impair the integrity and reputation of the Licensed Product or if a Party is threatened by the unlawful activity of any Third Party in relation to the Licensed Product, which circumstances shall include, by way of illustration, deliberate tampering with or contamination of the Licensed Product by any Third Party as a means of extorting payment from the Parties or another Third Party. In any such

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

23



 

circumstances, the Parties shall use Diligent Efforts to limit any damage to the Parties and/or to the Licensed Product. The Parties shall promptly call a Joint Steering Committee meeting to discuss and resolve such circumstances.

 

ARTICLE IX.                                                                ORDERS; SUPPLY AND RETURNS

 

9.01              Orders and Bookings of Sales. Except as otherwise expressly stated in this Agreement, Clinigen shall have the right in the Territory to (i) receive, accept and fill orders for Licensed Product sold by Clinigen, (ii) control invoicing, order processing and collection of accounts receivable for Licensed Product sold by Clinigen and (iii) record in its books of account sales of Licensed Product sold by Clinigen.

 

9.02              Supply of API Compound for Commercial Requirements. Theravance shall be responsible, either directly or through Theravance’s vendors or contractors, for supplying at Clinigen’s expense API Compound for Commercialization activities in the Territory. Clinigen will reimburse Theravance within forty five (45) days of receipt of itemized invoices for all of Theravance’s Fully Burdened Cost incurred after the Effective Date associated with supplying such API Compound as mutually agreed by the Parties. Such API Compound shall be manufactured and supplied in accordance with all applicable Laws and then current Good Manufacturing Practices. A forecast for API Compound requirements for Commercialization of the Licensed Product in the Territory shall be prepared and periodically updated by the Joint Steering Committee and coordinated with the applicable Marketing Plan for the Licensed Product.

 

9.03              Supply of Licensed Product for Commercialization. Theravance shall be responsible, either directly or through Theravance’s vendors or contractors, for supplying at Clinigen’s expense formulated, packaged and labeled Licensed Product for Commercialization activities in the Territory or, at Clinigen’s request, unlabeled finished product for Clinigen to manage packaging and labeling within the Territory. Such formulated, packaged and labeled Licensed Product shall be manufactured and supplied in accordance with all applicable Laws and then current Good Manufacturing Practices. Clinigen will reimburse Theravance within thirty (30) days of receipt of itemized invoices for all of Theravance’s Fully Burdened Cost incurred after the Effective Date associated with supplying such formulated Licensed Product as mutually agreed by the Parties. A forecast for formulated, packaged and labeled Licensed Product requirements for Commercialization in the Territory shall be prepared and periodically updated by the Joint Steering Committee and coordinated with the applicable Marketing Plan for the Licensed Product.  During the three (3) month period following the Effective Date, the Parties shall in good faith use Diligent Efforts to enter into a supply agreement to carry out the principles set forth in this Section 9.03 and to address manufacturing of the API Compound and the formulated Licensed Product, to comply with regulatory requirements for sale in the Territory.

 

9.04              Manufacturing in the Territory. If the Joint Steering Committee decides to have the Licensed Product made, packaged or labeled by a Third Party in the Territory and assigns responsibility to Clinigen to supervise or manage such work and Clinigen accepts such responsibility, then Clinigen shall have a non-exclusive, royalty-free, sublicensable, transferrable license under the Theravance Patents, Theravance Trademarks, Theravance Know-How, Theravance Inventions and Theravance’s rights in the Joint Inventions and/or Joint Invention Patents to import, export, use, make and have made API Compound and formulated Licensed

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

24



 

Product within the Field and inside the Territory to the extent necessary to fulfill its assigned responsibilities, subject to any limitations established by Theravance.  For the sake of clarity and avoidance of doubt, the foregoing license shall not expand Clinigen’s rights with respect to the Commercialization of the Licensed Products.

 

ARTICLE X.                                                                     CONFIDENTIAL INFORMATION

 

10.01       Confidential Information. Each of Clinigen and Theravance and their respective Affiliates and sublicensees shall keep all Confidential Information received from the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information. Each of Clinigen and Theravance undertake and make their respective Affiliates and sublicensees undertake to take any and all steps or actions necessary or desirable under applicable legislation to keep secret the Confidential Information disclosed under this Agreement. Neither Party or its respective Affiliates or sublicensees shall use such Confidential Information for any purpose other than in the performance of or as described in this Agreement, or disclose the same to any other Person other than to such of its agents or contractors who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement. A Receiving Party shall advise any agent or contractor who receives such Confidential Information of the confidential nature thereof and of the obligations contained in this Agreement relating thereto, and the Receiving Party shall ensure that all such agents comply with such obligations as if they had been a Party hereto. The Confidential Information may be disclosed in confidence to the Receiving Party’s employees, directors, officers, agents, contractors and any other Persons on a need to know basis on the condition that it is not to be reproduced, copied or used for any other purpose than the purpose for which it is provided hereunder. No disclosure of the Confidential Information shall be made by the Receiving Party to its employees, directors, officers, agents and other Persons unless and until such employees, directors, officers, agents, contractors and other Persons have agreed in writing: (a) to hold such Confidential Information in confidence at least to the extent that the Receiving Party is obligated hereunder; and (b) not to use such Confidential Information, except as permitted by the terms of this Agreement. Upon termination of this Agreement, the Receiving Party shall return or destroy, at the Disclosing Party’s request, all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the Receiving Party’s, its agents’ or contractors’ possession, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall be deemed to be the property of the Disclosing Party, and shall continue to be subject to the provisions of this Article X notwithstanding any earlier termination of this Agreement or otherwise. Each Party will be liable for breach of this Article X by any of its agents, Affiliates, sublicensees, subcontractors, or its Affiliates’ sublicensees and subcontractors.

 

10.02       Permitted Disclosure and Use. Notwithstanding Section 10.01, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Marketing Authorization of the Licensed Product or any other necessary permissions, approvals and other documents issued by Governmental Authorities; (b) enforce the provisions of this Agreement; or (c) comply with Laws. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 10.02, such Party shall give reasonable advance notice of such intended disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

25



 

confidential treatment of such information. The Receiving Party will cooperate reasonably with the Disclosing Party’s efforts to protect the confidentiality of the information.  Notwithstanding Section 10.01, the Theravance may use and disclose the Confidential Information of Clinigen as necessary to make, have made and Develop the Licensed Product and to make, have made and Develop additional compounds or products for the treatment of bacterial infections so long as the recipient of such Confidential Information is bound by confidentiality obligations no less restrictive than contemplated by the Parties in this Agreement and the Clinigen is named as an intended third party beneficiary of such confidentiality agreement.

 

10.03       Publications. Subject to any Third Party rights existing as of the Effective Date, Clinigen shall submit to the Joint Steering Committee for review and approval (i) all proposed academic, scientific or medical publications relating to a Licensed Product or any research or Development activities under this Agreement and intended for major international peer reviewed journals, (ii) public presentations for major international conferences relating to a Licensed Product or any research or Development activities under this Agreement and (iii) a copy of any other publications or public presentations related to the Licensed Product or any research or Development activities under this Agreement not covered by (i) and (ii) on a full and timely access basis, in each case for review in connection with preservation of Patent rights, and trade secrets, to determine whether Confidential Information should be modified or deleted from the proposed publication or public presentation and/or to confirm consistency with industry standard and customary good publication practice. Written copies of such proposed publications and presentations shall be submitted to the Joint Steering Committee no later than sixty (60) days before submission for publication or presentation and the Joint Steering Committee shall provide its comments with respect to such publications and presentations within ten (10) Business Days after its receipt of such written copy. The review period may be extended for an additional sixty (60) days if a representative of the non-publishing Party on the Joint Steering Committee can demonstrate a reasonable need for such extension including, but not limited to, the preparation and filing of patent applications. By mutual agreement of the Parties, this period may be further extended. The Parties will each comply with standard academic practice regarding authorship of scientific publications and recognition of contribution of other parties in any publications relating to the Licensed Product or any research or Development activities under this Agreement.

 

10.04       Public Announcements. Except as may be expressly permitted under Section 10.03 or required by applicable Laws and subject to the final two sentences of this Section 10.04, neither Party will make any public announcement of any information regarding this Agreement, the Licensed Product or any research or Development activities under this Agreement without the prior written approval of the other Party, which approval shall not be withheld unreasonably. Once any statement is approved for disclosure by the Parties or information is otherwise made public in accordance with the preceding sentence, either Party may make a subsequent public disclosure of the contents of such statement without further approval of the other Party. Notwithstanding the foregoing, within sixty (60) days following the Effective Date, appropriate representatives of the Parties will meet and agree upon a process and principles for reaching timely consensus on how the Parties will make public disclosure concerning this Agreement, the Licensed Product or any research and Development activities under this Agreement.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

26



 

10.05       Confidentiality of this Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Article X.

 

10.06       Survival. The obligations and prohibitions contained in this Article X shall survive the expiration or termination of this Agreement for a period of ten (10) years.

 

ARTICLE XI.                                                                REPRESENTATIONS AND WARRANTIES; COVENANTS

 

11.01       Mutual Representations and Warranties. Theravance and Clinigen each represents and warrants to the other as of the Effective Date that:

 

(a)                                 Such Party:

 

(i)                                               is a company duly organized, validly existing, and in good standing under the Laws of its incorporation;

 

(ii)                                            is duly qualified as a corporation and in good standing under the Laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, where the failure to be so qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder;

 

(iii)                                         has the requisite corporate power and authority and the legal right to conduct its business as now conducted and hereafter contemplated to be conducted;

 

(iv)                                        has or will obtain all necessary licenses, permits, consents, or approvals from or by, and has made or will make all necessary notices to, all Governmental Authorities having jurisdiction over such Party, to the extent required for the ownership and operation of its business, where the failure to obtain such licenses, permits, consents or approvals, or to make such notices, would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder; and

 

(v)                                           is in compliance with its charter documents;

 

(b)                                 The execution, delivery and performance of this Agreement by such Party and all instruments and documents to be delivered by such Party hereunder:

 

(i)                                               are within the corporate power of such Party;

 

(ii)                                            have been duly authorized by all necessary or proper corporate action;

 

(iii)                                         do not conflict with any provision of the charter documents of such Party;

 

(iv)                                        will not, to the best of such Party’s knowledge, violate any Laws or regulation or any order or decree of any court of governmental instrumentality; will not violate or conflict with any terms of any indenture, mortgage, deed of trust, lease, agreement, or other

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

27



 

instrument to which such Party is a party, or by which such Party or any of its property is bound, which violation would have a material adverse effect on its financial condition or on its ability to perform its obligations hereunder;

 

(c)                                  This Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other Laws affecting creditors’ rights generally, or by the availability of equitable remedies; and

 

(d)                                 All of its employees, officers, and consultants have executed agreements or have existing obligations under Laws requiring assignment to such Party of all Inventions made by such individuals during the course of and as the result of their association with such Party, and obligating such individuals to maintain as confidential such Party’s Confidential Information.

 

11.02       Additional Clinigen Representations and Warranties. Clinigen further represents, warrants to Theravance as of the Effective Date that:

 

(a)                                 Clinigen has utilized its own scientific, marketing and distribution expertise and experience to analyze and evaluate both the scientific and commercial value of this collaboration and, except for the specific warranties and representations made by Theravance hereunder, has solely relied on such analysis and evaluations in deciding to enter into this Agreement; and

 

(b)                                 Neither Clinigen nor any of its Affiliates is a party to or otherwise bound by any oral or written contract or agreement that will result in any Person obtaining any interest in, or that would give to any Person any right to assert any claim in or with respect to, any of Clinigen’s rights granted under this Agreement.

 

11.03       Additional Theravance Representations and Warranties.  Theravance further represents and warrants to Clinigen as of the Effective Date that:

 

(a)                                 Having carried out and completed diligent searches in relation to the Theravance Patents and Theravance Trademarks, and other than as set forth in the Disclosure Letter, Theravance is not aware, nor has been made aware, of any conflict or likely future conflict with the intellectual property rights of any Third Party with respect to Theravance Patents, Theravance Inventions, Theravance Know-How or Theravance Trademarks or which will arise as a result of the Commercialization of the Licensed Products.

 

(b)                                 Exhibit B sets forth a complete and accurate list of the Theravance Patents as of the Effective Date.

 

(c)                                  Exhibit C sets forth a complete and accurate list of the registrations or pending applications for Theravance Trademarks as of the Effective Date.

 

(d)                                 Theravance is the sole and exclusive owner of the entire right, title and interest in each of the Theravance Patents, Theravance Trademarks, Theravance Inventions,

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

28



 

Theravance Know-How and Marketing Authorizations.  As of the Effective Date, the Theravance Patents, Theravance Trademarks, Theravance Inventions, Theravance Know-How and Marketing Authorizations are not subject to any encumbrance, lien or claim of ownership by any Third Party, and Theravance is not aware of any facts that would preclude Theravance from having unencumbered title to the Theravance Patents, Theravance Trademarks, Theravance Inventions, Theravance Know-How and Marketing Authorizations. Other than as set forth in the Disclosure Letter, Theravance has not received any notice of any claim by any Third Party challenging the ownership or right to use of Theravance in and to the Theravance Patents, Theravance Trademarks, or Marketing Authorizations, or challenging its right to use or ownership of any of the Theravance Know-How or Theravance Inventions, or making any adverse claim of ownership thereof.

 

(e)                                  To the knowledge of Theravance, no intellectual property rights other than those under the Theravance Patents, Theravance Know-How, Theravance Inventions, Theravance’s rights in the Joint Inventions and/or Joint Invention Patents, and Theravance Trademarks are necessary for Clinigen to Commercialize the Licensed Products, except as set forth in the Disclosure Letter.

 

(f)                                   To the knowledge of Theravance, no Third Party is infringing any of the issued Theravance Patents nor has Theravance put any Third Party on notice of infringing any of the issued Theravance Patents except as set forth in the Disclosure Letter.

 

(g)                                  To the knowledge of Theravance, no Third Party is infringing any of the Theravance Trademarks nor has Theravance put any Third Party on notice of infringing any of the Theravance Trademarks.

 

(h)                                 There is no pending, decided or settled opposition, interference proceeding, reexamination proceeding, cancellation proceeding, injunction, lawsuit, hearing, investigation, complaint, arbitration, mediation, demand, International Trade Commission investigation, decree, or any other dispute, disagreement, or claim involving a Theravance Patent, in each case alleged in writing to Theravance (collectively referred to herein as “Disputes”), nor to the knowledge of Theravance has any such Dispute been threatened, in each case challenging the legality, validity, enforceability or ownership of any Theravance Patent.

 

(i)                                     Theravance has not received notice from any Third Party of a claim that an issued patent of any Third Party would be infringed by the manufacture, having made, use, Development, Commercialization, distribution, marketing, offer for sale, sale, exportation or importation of a Theravance Compound and/or a Licensed Product under this Agreement;

 

(j)                                    To Theravance’s knowledge, each of the Theravance Patents is valid and enforceable (if issued) or subsisting and not abandoned (if pending).  Theravance has not received notice from any Third Party of a claim asserting the invalidity, misuse, unregisterability or unenforceability of any of the Theravance Patents, or challenging its right to use or ownership of any of the Theravance Patents, Theravance Inventions, or the Theravance Know-How, or making any adverse claim of ownership thereof;

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

29


 

(k)                                 To Theravance’s knowledge, the conception, development and reduction to practice of the Theravance Inventions, Theravance Know-How and the inventions claimed in the Theravance Patents have not constituted or involved the misappropriation of trade secrets or other rights or property of any Third Party.  Theravance has not received notice from any Third Party that any trade secrets or other intellectual property rights of such Third Party would be misappropriated by the development and reduction to practice of the Theravance Inventions, Theravance Know-How, or the inventions claimed in the Theravance Patents;

 

(l)                                     Other than as set forth in the Disclosure Letter, there is no claim or demand of any Person or entity pertaining to, or any proceeding which is pending or, to the knowledge of Theravance, threatened, that challenges the validity, use or existence of any Theravance Patent, Theravance Know-How, Theravance Invention, Theravance Trademark, Marketing Authorization, the rights granted herein to Clinigen in respect of any Theravance Patent, Theravance Know-How, Theravance Invention, Theravance Trademark, Marketing Authorization, or claims that any default exists under any license with respect to any Theravance Patent, Theravance Know-How, Theravance Invention, or Theravance Trademark, Marketing Authorization or to which Theravance is a party, except where such claim, demand or proceeding would not materially and adversely affect the ability of Theravance to carry out its obligations under this Agreement; and

 

(m)                             To Theravance’s belief and knowledge the production of formulated Licensed Products that meet the regulatory requirements in the Territory is technically possible.

 

11.04       Covenants.

 

(a)                                 Compliance.                           Each Party hereby covenants and agrees during the Term that it shall carry out its obligations or activities hereunder in accordance with (i) the terms of this Agreement and (ii) all applicable Laws.

 

(b)                                 Clinigen Covenant, Agreement and Obligation Relating to Further Commercialization. Clinigen and its Affiliates and Clinigen’s and its Affiliates’ licensees and sublicensees under this Agreement [***].

 

11.05       Disclaimer of Warranty. Subject to the specific warranties and representations given under Section 11.01 through and including Section 11.03, nothing in this Agreement shall be construed as a warranty or representation by either Party (i) that the Licensed Product made, used, sold or otherwise disposed of under this Agreement is or will be free from infringement of patents, copyrights, trademarks, industrial design or other intellectual property rights of any Third Party, (ii) regarding the effectiveness, value, safety, non-toxicity, patentability, or non-infringement of any patent technology, the Licensed Product or any information or results provided by either Party pursuant to this Agreement or (iii) that the Licensed Product will obtain Marketing Authorization or appropriate pricing approval in the Territory. Each Party explicitly accepts all of the same as experimental and for Development purposes, and without any express or implied warranty from the other Party. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS, WAIVES, RELEASES, AND RENOUNCES ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

30



 

11.06       Breach by Clinigen.  Breach of any Clinigen representation or warranty specified in Section 11.01 and Section 11.02 above shall constitute a material breach of this Agreement by Clinigen. Without any prejudice to any other remedies granted to Theravance by this Agreement and/or by applicable Laws, in this event Theravance may unilaterally refuse to perform this Agreement in whole or in any part without recourse to a court thus having this Agreement terminated upon thirty (30) days written notice. Such termination shall become effective at the end of such thirty (30) day period, unless Clinigen cures such breach, during such thirty (30) day period, or if such breach is curable but not within such thirty (30) day period, and Clinigen initiates and diligently pursues a cure for such breach then such termination shall become effective at the end of forty-five (45) days unless Clinigen cures such breach. Clinigen shall fully reimburse Theravance for all damages, costs and expenses (including actual damages and lost profit) resulting from such refusal to perform.

 

11.07       Consequences of Breach by Clinigen.  Clinigen further undertakes to fully reimburse and compensate Theravance for all direct damages, costs and expenses (including reasonable attorneys’ fees), which Theravance may suffer or which may be asserted against Theravance caused by, or arising in connection with:

 

(a)                                 any material breach by Clinigen of representations and warranties provided by Clinigen hereunder;

 

(b)                                 the relationship between Clinigen and any of its Affiliates, employees, agents or contractors, including, but not limited to, all authors of the Clinigen Know-How, Clinigen Patents, Clinigen Inventions and Joint Inventions and other owners of intellectual property used by Clinigen for performance of its obligations under this Agreement; or

 

(c)                                  any claim of any party alleging that the ownership, disposal and/or use by Theravance (or any of its respective Affiliates, sublicensees or subcontractors), of the Clinigen Know-How, Clinigen Patents, Clinigen Inventionsand/or Joint Inventions infringes upon such party’s intellectual property or related rights or other such party’s rights or interests.

 

Notwithstanding the definition of Losses, for the sake of clarity and avoidance of doubt, Clinigen shall not be liable to Theravance (or any of its respective Affiliates, sublicensees or subcontractors) to reimburse and/or compensate Theravance for any consequential, indirect, incidental or special damages under this Section 11.07.

 

11.08       Breach by Theravance.  Breach of any Theravance representation or warranty specified in Section 11.01 and Section 11.03 above shall constitute a material breach of this Agreement by Theravance. Without any prejudice to any other remedies granted to Clinigen by this Agreement and/or by applicable Laws, in this event Clinigen may unilaterally refuse to perform this Agreement in whole or in any part without recourse to a court thus having this Agreement terminated upon thirty (30) days written notice. Such termination shall become effective at the end of such thirty (30) day period, unless Theravance cures such breach, during such thirty (30) day period, or if such breach is curable but not within such thirty (30) day period,

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

31



 

and Theravance initiates and diligently pursues a cure for such breach then such termination shall become effective at the end of forty-five (45) days unless Theravance cures such breach. Theravance shall fully reimburse Clinigen for all damages, costs and expenses (including actual damages and lost profit) resulting from such refusal to perform.

 

11.09       Consequences of Breach by Theravance.  Theravance further undertakes to fully reimburse and compensate Clinigen all direct damages, costs and expenses (including reasonable attorneys’ fees), which Clinigen may suffer or which may be asserted against Clinigen caused by, or arising in connection with:

 

(a)                                 any material breach by Theravance of representations and warranties provided by Theravance hereunder;

 

(b)                                 the relationship between Theravance and any of its Affiliates, employees, agents or contractors, including, but not limited to, all authors of the Theravance Know-How, Theravance Patents, Theravance Inventions and Joint Inventions and other owners of intellectual property used by Theravance for performance of its obligations under this Agreement; or

 

(c)                                  any claim of any party alleging that the ownership, disposal and/or use by Clinigen (or any of its respective Affiliates, sublicensees or subcontractors) of the Theravance Know-How, Theravance Patents, Theravance Inventions and/or Joint Inventions infringes upon such party’s intellectual property or related rights or other such party’s rights or interests.

 

Notwithstanding the definition of Losses, for the sake of clarity and avoidance of doubt, Theravance shall not be liable to Clinigen (or any of its respective Affiliates, sublicensees or subcontractors) to reimburse and/or compensate Clinigen for any consequential, indirect, incidental or special damages under this Section 11.09.

 

ARTICLE XII.                                                           INDEMNIFICATION

 

12.01       Indemnification by Clinigen. Subject to Section 12.04 and Section 13.02, Clinigen shall defend, indemnify and hold harmless Theravance and its Affiliates and each of their officers, directors, employees, successors and assigns from and against all Claims of Third Parties, and all associated Losses, to the extent arising out of (a) Clinigen’s negligence or willful misconduct in performing any of its obligations under this Agreement, (b) a breach by Clinigen of any of its representations, warranties, covenants or agreements under this Agreement, (c) the manufacture, use, handling, storage, marketing, sale, offering for sale, importation, distribution or other disposition of the API Compound or the Licensed Product by Clinigen, its Affiliates, agents or sublicensees, or (d) any agreement between Clinigen and a Third Party pertaining to the Licensed Product, except to the extent such Losses result from the negligence or willful misconduct of Theravance.

 

12.02       Indemnification by Theravance. Subject to Section 12.04 and Section 13.02, Theravance shall defend, indemnify and hold harmless Clinigen and its Affiliates and each of their officers, directors, employees, successors and assigns from and against all Claims of Third Parties, and all associated Losses, to the extent arising out of (a) Theravance’s negligence or willful misconduct in performing any of its obligations under this Agreement, (b) a breach by Theravance of any of its representations, warranties, covenants or agreements under this Agreement, (c) an

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

32



 

Infringement Claim, (d) the manufacture, use, handling, storage, marketing, sale, offering for sale, importation, distribution or other disposition of the API Compound or the Licensed Product by Theravance, its Affiliates, agents or sublicensees, or (e) any agreement between Theravance and a Third Party pertaining to the Licensed Product, except to the extent such Losses result from the negligence or willful misconduct of Clinigen.

 

12.03       Procedure for Indemnification.

 

(a)                                 Notice. Each Party will notify promptly the other in writing if it becomes aware of a Claim (actual or potential) by any Third Party (a “Third Party Claim”) for which indemnification may be sought by that Party and will give such information with respect thereto as the other Party shall reasonably request. If any proceeding (including any governmental investigation) is instituted involving any Party for which such Party may seek an indemnity under Section 12.01 or Section 12.02, as the case may be (the “Indemnified Party”), the Indemnified Party shall not make any admission or statement concerning such Third Party Claim, but shall promptly notify the other Party (the “Indemnifying Party”) orally and in writing and the Indemnifying Party and Indemnified Party shall meet to discuss how to respond to any Third Party Claims that are the subject matter of such proceeding. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party or any failure by such Party to notify the Indemnifying Party of the claim materially prejudices the defense of such claim.

 

(b)                                 Defense of Claim. If the Indemnifying Party elects to defend or, if local procedural rules or Laws do not permit the same, elects to control the defense of a Third Party Claim, it shall be entitled to do so provided it gives notice to the Indemnified Party of its intention to do so within twenty-five (25) days after the receipt of the written notice from the Indemnified Party of the potentially indemnifiable Third Party Claim (the “Defense Notice”). The Indemnifying Party expressly agrees the Indemnifying Party shall be responsible for satisfying and discharging any award made to or settlement reached with the Third Party pursuant to the terms of this Agreement without prejudice to any provision in this Agreement or right at Laws which will allow the Indemnifying Party subsequently to recover any amount from the Indemnified Party to the extent the liability under such settlement or award was attributable to the Indemnified Party. Subject to compliance with the Defense Notice, the Indemnifying Party shall retain counsel reasonably acceptable to the Indemnified Party (such acceptance not to be unreasonably withheld, refused, conditioned or delayed) to represent the Indemnified Party and shall pay the reasonable fees and expenses of such counsel related to such proceeding. In any such proceeding, the Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party. The Indemnified Party shall not settle any claim for which it is seeking indemnification without the prior written consent of the Indemnifying Party which consent shall not be unreasonably withheld, refused, conditioned or delayed. The Indemnified Party shall, if requested by the Indemnifying Party, cooperate in all reasonable respects in the defense of such claim that is being managed and/or controlled by the Indemnifying Party. The Indemnifying Party shall not, without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld, refused, conditioned or delayed), effect any settlement of any pending or threatened proceeding in which the Indemnified Party is, or based on the same set of facts could have been, a party and indemnity could have been sought hereunder by the Indemnified Party, unless such settlement

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

33



 

includes an unconditional release of the Indemnified Party from all liability on claims that are the subject matter of such proceeding. If the Defense Notice is not made, then neither Party shall have the right to control the defense of such Third Party Claim and the Parties shall cooperate in and be consulted on the material aspects of such defense at each Party’s own expense; provided that if the Indemnifying Party does not make the Defense Notice, the Indemnifying Party may at any subsequent time during the pendency of the relevant Third Party Claim irrevocably elect, if permitted by local procedural rules or Laws, to defend and/or to control the defense of the relevant Third Party Claim so long as the Indemnifying Party also agrees to pay the reasonable fees and costs incurred by the Indemnified Party in relation to the defense of such Third Party Claim from the inception of the Third Party Claim until the date the Indemnifying Party assumes the defense or control thereof.

 

12.04       Assumption of Defense. Notwithstanding anything to the contrary contained herein, an Indemnified Party shall be entitled to assume the defense of any Third Party Claim with respect to the Indemnified Party, upon written notice to the Indemnifying Party pursuant to this Section 12.04, in which case the Indemnifying Party shall be relieved of liability under Section 12.01 or Section 12.02, as applicable, solely for such Third Party Claim and related Losses.

 

12.05       Insurance. During the Term of this Agreement and for a period of three (3) years after the termination or expiration of this Agreement, Clinigen shall obtain and/or maintain at its sole cost and expense, product liability insurance (including any self-insured arrangements) in amounts which are reasonable and customary in the Territory for companies of comparable size and activities. Such product liability insurance or self-insured arrangements shall insure against liability pertaining to its obligations under this Agreement including without prejudice to the generality of the foregoing, personal injury, physical injury, and property damage. Clinigen shall provide written proof of the existence of such insurance to Theravance upon request.

 

ARTICLE XIII.                                                      PATENTS and INVENTIONS

 

13.01       Inventions.

 

(a)                                 Disclosure and Determination of Inventorship. Each Party shall promptly disclose to the other Party in writing any Inventions made by it during the Term.  The determination of inventorship for such Inventions shall be made in accordance with the applicable patent Laws.

 

(b)                                 Ownership of Inventions. Theravance shall own all Theravance Inventions and Clinigen shall own all Clinigen Inventions. Theravance and Clinigen shall each own an equal, undivided interest in all Joint Inventions.

 

13.02       Preparation, Prosecution and Maintenance of Patents.

 

(a)                                 Preparation, Prosecution and Maintenance of Theravance Patents.

 

(i)                                               Responsibility. Theravance shall have the exclusive right and the obligation to prepare, file, prosecute in a diligent manner (including without limitation by conducting interferences, oppositions and reexaminations or other similar proceedings), maintain (by timely paying all maintenance fees, renewal fees, and other such fees and expenses required

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

34



 

under applicable Laws) and extend all Theravance Patents, in accordance with input from Clinigen as provided herein. Theravance may elect not to prepare, file, prosecute, maintain or extend Theravance Patents subject to the provisions of Section 13.02(d), or, if applicable, Theravance may cause its licensors or licensees to prepare, file, prosecute, maintain or extend Theravance Patents.

 

(ii)                                            Abandonment. Theravance shall consult with Clinigen and comply with Section 13.02(d) prior to abandoning any Theravance Patents in the Territory.

 

(iii)                                         Input. Theravance shall regularly advise Clinigen of the status of all Theravance Patents in the Territory, and, at Clinigen’s request, shall provide Clinigen with copies of all documentation concerning Theravance Patents in the Territory, including all correspondence to and from any Governmental Authority.  Prior to filing patent applications relating to Theravance Inventions or significant prosecution documents relating to Theravance Patents in the Territory, Theravance shall solicit Clinigen’s advice on the content of the patent application or prosecution document and Theravance shall take into account Clinigen’s reasonable comments related thereto, unless (without fault of Theravance) deadlines will not permit such review or Clinigen notifies Theravance that it does not wish to review such documents.  In the event of a dispute between the Parties regarding the content of patent applications or prosecution documents, Theravance shall have the final decision-making authority with respect to any action relating to Theravance Inventions or Theravance Patents subject to the provisions of Section 13.02(d) and Section 13.02(i).  Theravance and Clinigen shall agree on which Countries in the Territory corresponding Theravance Patents shall be filed within the priority period.  For all Countries outside the Territory, Theravance shall make the final decision regarding which Countries corresponding Theravance Patents shall be filed.

 

(iv)                                        Expenses.  Theravance shall be responsible for all of Theravance’s expenses to procure Theravance Patents in the Territory and outside the Territory, including all filing fees, translations, maintenance, annuities and protest proceedings.

 

(b)                                 Preparation, Prosecution and Maintenance of Clinigen Patents.

 

(i)                                               Responsibility. Clinigen shall have the exclusive right and the obligation to prepare, file, prosecute in a diligent manner (including without limitation by conducting interferences, oppositions and reexaminations or other similar proceedings), maintain (by timely paying all maintenance fees, renewal fees, and other such fees and expenses required under applicable Laws) and extend all Clinigen Patents, in accordance with input from Theravance as provided herein.  Clinigen may elect not to prepare, file, prosecute, maintain or extend Clinigen Patents subject to the provisions of Section 13.02(e), or, if applicable, Clinigen may cause its licensors or licensees to prepare, file, prosecute, maintain or extend Clinigen Patents.

 

(ii)                                            Abandonment.  Clinigen shall consult with Theravance and comply with Section 13.02(e) prior to abandoning any Clinigen Patents.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

35



 

(iii)                                         Input.  Clinigen shall regularly advise Theravance of the status of all Clinigen Patents and, at Theravance’s request, shall provide Theravance with copies of all documentation concerning Clinigen Patents, including all correspondence to and from any Governmental Authority.  Prior to filing patent applications relating to Clinigen Inventions or significant prosecution documents relating to Clinigen Patents outside the Territory, Clinigen shall solicit Theravance’s advice on the content of the patent application or prosecution document and Clinigen shall take into account Theravance’s reasonable comments related thereto, unless (without fault of Clinigen) deadlines will not permit such review or Theravance notifies Clinigen that it does not wish to review such documents.  In the event of a dispute between the Parties regarding the content of patent applications or prosecution documents, Clinigen shall have the final decision-making authority with respect to any action relating to Clinigen Inventions or Clinigen Patents subject to the provisions of Section 13.02(e) and Section 13.02(i).  Theravance and Clinigen shall agree on which Countries in the Territory corresponding Clinigen Patents shall be filed within the priority period.  For all Countries outside the Territory, Clinigen shall make the final decision regarding which Countries corresponding Clinigen Patents shall be filed, subject to Theravance’s Step-In-Rights in Section 13.02(e).

 

(iv)                                        Expenses.  Clinigen shall be responsible for all of Clinigen’s expenses to procure Clinigen Patents in the Territory and outside the Territory, including all filing fees, translations, maintenance, annuities and protest proceedings.

 

(c)                                  Preparation, Prosecution and Maintenance of Joint Invention Patents.

 

(i)                                               Responsibility. Theravance shall have the exclusive right and the obligation to prepare, file, prosecute in a diligent manner (including without limitation by conducting interferences, oppositions and reexaminations or other similar proceedings), maintain (by timely paying all maintenance fees, renewal fees, and other such fees and expenses required under applicable Laws) and extend all Joint Invention Patents, in accordance with input from Clinigen as provided herein.  Theravance may elect not to prepare, file, prosecute, maintain or extend Joint Invention Patents subject to the provisions of Section 13.02(f), or, if applicable, Theravance may cause its licensors or licensees to prepare, file, prosecute, maintain or extend Joint Invention Patents. The Parties agree to cooperate in the preparation and prosecution of all Joint Invention Patents, including without limitation by obtaining and executing necessary powers of attorney and assignments by the named inventors, providing relevant technical reports to the filing Party concerning the Invention disclosed in Joint Invention Patents, and obtaining execution of such other documents which shall be needed in the filing and prosecution of Joint Invention Patents. Theravance and Clinigen shall be indicated as co-owners of the Joint Invention Patents in the all applicable documents and filings if it is not prohibited by applicable Laws.

 

(ii)                                            Abandonment. Theravance and Clinigen shall agree to abandon, or comply with Section 13.02(f) prior to the abandonment of, any Joint Invention Patents.

 

(iii)                                         Input. Theravance shall regularly advise Clinigen of the status of all Joint Invention Patents and, at Clinigen’s request, shall provide Clinigen with copies of all

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

36



 

documentation concerning Joint Invention Patents, including all correspondence to and from any Governmental Authority.  Prior to filing patent applications relating to Joint Inventions or significant prosecution documents relating to Joint Invention Patents, Theravance shall solicit Clinigen’s advice on the content of the patent application or prosecution document and Theravance shall take into account Clinigen’s reasonable comments related thereto, unless (without fault of Theravance) deadlines will not permit such review or Clinigen notifies Theravance that it does not wish to review such documents.  In the event of a dispute between the Parties regarding the content of patent applications or prosecution documents, Theravance shall have the final decision-making authority with respect to any action relating to Joint Inventions or Joint Invention Patents subject to the provisions of Section 13.02(f) and Section 13.02(i). Theravance and Clinigen shall agree on which Countries in the Territory corresponding Joint Invention Patents shall be filed within the priority period.  For all Countries outside the Territory, Theravance shall make the final decision regarding which Countries corresponding Joint Invention Patents shall be filed subject to the provisions of Section 13.02(f).

 

(iv)                                        Expenses. Clinigen shall be responsible for all of Theravance’s external, properly documented, out-of-pocket expenses incurred after the Effective Date to procure Joint Invention Patents in the Territory, including without limitation all filing fees, translations, maintenance, annuities, and protest proceedings.  Theravance will invoice Clinigen on a quarterly basis beginning the first Calendar Quarter following the Effective Date, setting forth all such expenses incurred.  Reimbursement will be made to Theravance in United States Dollars within thirty (30) days of receipt of the invoice by Clinigen.  Theravance shall be responsible for all of its external expenses to procure Joint Invention Patents outside the Territory and for its internal expenses associated with all Joint Invention Patents.

 

(d)                                 Clinigen Step-In Rights for Theravance Inventions and Theravance Patents. If Theravance elects not to prepare and file a patent application for a Theravance Invention in any Country in the Territory or not to prosecute and maintain a Theravance Patent in any Country in the Territory, Theravance shall give Clinigen written notice thereof at least sixty (60) days prior to allowing any rights to the Theravance Invention or the Theravance Patent to lapse or become abandoned or unenforceable, and Clinigen shall thereafter have the right (hereinafter regardless of which Party is exercising such right, “Step-In Rights”), at its sole expense, to prepare and file a patent application for the Theravance Invention in such Country or to prosecute and maintain the Theravance Patent in such Country. Clinigen shall provide Theravance with written notice of its decision to exercise its Step-In Rights within thirty (30) days from receipt of the notice from Theravance regarding its decision not to prepare or file a patent application on a Theravance Invention in such Country or not to prosecute or maintain a Theravance Patent in such Country. Within ninety (90) days after the exercise of Step-In Rights by Clinigen for any Theravance Invention or Theravance Patent, Theravance shall assign all of its rights in and to the respective Theravance Invention and/or the Theravance Patent to Clinigen in such Country.

 

(e)                                  Theravance Step-In Rights for Clinigen Inventions and Clinigen Patents. If Clinigen elects not to prepare and file a patent application for a Clinigen Invention in any Country or not to prosecute and maintain a Clinigen Patent in any Country, Clinigen shall give Theravance written notice thereof at least sixty (60) days prior to allowing any rights to the Clinigen Invention or the Clinigen Patent to lapse or become abandoned or unenforceable, and

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

37



 

Theravance shall thereafter have the right, at its sole expense, to prepare and file a patent application for the Clinigen Invention in such Country or to prosecute and maintain the Clinigen Patent in such Country.  Theravance shall provide Clinigen with written notice of its decision to exercise its Step-In Rights within thirty (30) days from receipt of the notice from Clinigen regarding its decision not to prepare or file a patent application on a Clinigen Invention in such Country or not to prosecute or maintain a Clinigen Patent in such Country. Within ninety (90) days after the exercise of Step-In Rights by Theravance for any Clinigen Invention or Clinigen Patent, Clinigen will assign all of its rights in and to the respective Clinigen Invention or the Clinigen Patent to Theravance in such Country.

 

(f)                                   Step-In Rights for Joint Inventions and Joint Invention Patents. If Theravance elects not to prepare and file a patent application for a Joint Invention or not to prosecute and maintain a Joint Invention Patent, Theravance shall give Clinigen written notice thereof at least sixty (60) days prior to allowing any rights to the Joint Invention or the Joint Invention Patent to lapse or become abandoned or unenforceable, and Clinigen shall thereafter have the right, at its sole expense, to prepare and file a patent application for the Joint Invention or to prosecute and maintain the Joint Invention Patent.  Clinigen shall provide Theravance with written notice of its decision to exercise its Step-In Rights within thirty (30) days from receipt of the notice from Theravance regarding its decision not to prepare or file a patent application on a Joint Invention or not to prosecute or maintain a Joint Invention Patent. Within ninety (90) days after the exercise of Step-In Rights by Clinigen for any Joint Invention or Joint Invention Patent, Theravance will assign all of its rights in the Joint Invention and/or the Joint Invention Patent to Clinigen.

 

(g)                                  Execution of Documents. Each of the Parties shall execute or have executed by its appropriate Affiliates or agents such documents as may be necessary to prepare, file, prosecute, maintain or extend any Patents, and each Party shall cooperate with the other Party so far as reasonably necessary with respect to furnishing all information and data in its possession reasonably necessary to prepare, file, prosecute, maintain or extend any Patents.

 

(h)                                 Patent Term Extensions. The Parties shall cooperate with each other to obtain patent term extensions or other extensions of patent rights, for a Licensed Product in the Territory, if available. The Joint Steering Committee shall determine which Patents the Parties shall endeavor to have extended in the Territory. If the Joint Steering Committee does not agree as to which Patents should be extended in the Territory, then the Parties shall resort to the dispute resolution procedures set forth in Section 3.01(e). Theravance shall determine which Theravance Patents the Parties shall endeavor to have extended outside the Territory. Theravance shall be responsible for filing all such extensions for Theravance Patents and Joint Invention Patents; and Clinigen shall be responsible for filing all such extensions for Clinigen Patents.

 

(i)                                     Patent-Related Dispute Resolution. If the Parties disagree on any preparation, prosecution or maintenance issue for Patents which is not specifically addressed and resolved by this Article XIII (a “Patent Resolution Issue”), the Parties agree to seek guidance and resolution from an independent, mutually-acceptable patent attorney with experience and expertise relevant to the matter in dispute as further described in this Section 13.02(i) instead of resorting to arbitration process as described in Section 15.05.  If the Parties reach an impasse as to any Patent Resolution Issue (even after resorting to Section 3.01(e)(ii)), then they shall submit

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

38



 

the Patent Resolution Issue to an experienced patent attorney mutually-acceptable to the Parties, who does not otherwise perform work for either Party or any of its Affiliates, for resolution.  The Parties shall engage such attorney within thirty (30) days after either Party notifies the other in writing of a Patent Resolution Issue impasse remaining unresolved after resorting to Section 3.01(e)(ii).  If they cannot agree as to who such attorney shall be within such time period, then the total of two nominees of the Parties (one from each Party) shall select a third patent attorney who shall be the attorney to resolve the dispute.  The Parties shall share equally the expenses incurred for the services of such patent attorney.  Within fifteen (15) days after engaging the patent attorney, the Parties shall each submit necessary documentation to the patent attorney.  Within five (5) Business Days thereafter, the Parties shall convene a meeting with the patent attorney during which each Party may orally present its position on the Patent Resolution Issue.  The Parties shall endeavor to cause the patent attorney to render his or her guidance as to the Patent Resolution Issue within five (5) Business Days after such discussion.  Neither Party shall engage in any ex parte communications with the patent attorney.  The Parties shall accept and follow the guidance and resolution of the patent attorney absent any fraud in the proceedings.

 

13.03       Patent Infringement.

 

(a)                                 Infringement Claims by Third Parties. With respect to any and all Claims instituted by Third Parties against Theravance or Clinigen or any of their respective Affiliates, sublicensees or subcontractors for patent infringement involving the manufacture, use, license, marketing, sale, offer for sale or importation of a Theravance Compound or Licensed Product in the Territory during the Term or for trademark infringement involving the Theravance Trademarks in the Territory during the Term (an “Infringement Claim”), Theravance shall defend, indemnify and hold harmless Clinigen and its Affiliates and each of their officers, directors, employees, successors and assigns from and against all such Infringement Claims of Third Parties, and all associated Losses in accordance with Article XII.

 

(b)                                 Infringement of Theravance Patents. In the event that either Party becomes aware of actual or threatened infringement of a Theravance Patent or a Theravance Trademark during the Term, that Party will promptly notify the other Party in writing (an “Infringement Notice”).  Theravance will have the first right but not the obligation to bring an infringement action against any Third Party.  If Theravance elects to pursue such an infringement action, Theravance shall be solely responsible for the expenses associated with such action and Theravance shall retain all recoveries.  During the Term, in the event that Theravance does not undertake such an infringement action within ninety (90) days after the Infringement Notice, Clinigen shall be permitted to do so in Theravance’s name. If Clinigen elects to pursue such an infringement action, Clinigen shall be solely responsible for the expenses associated with such action and Clinigen shall retain all recoveries. If a Party is authorized to bring an infringement action under this Section 13.03 but the Party is not recognized by the applicable court or other relevant body as having the requisite standing to pursue such action, then the other Party shall join as a party-plaintiff.  If Theravance recommends not pursuing an infringement action, and the Joint Steering Committee recommends not pursuing such infringement action, and Clinigen elects to pursue such infringement action by joining Theravance as a party plaintiff, then Clinigen agrees to indemnify and hold harmless Theravance for all Losses arising from the infringement action.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

39


 

(c)                                  Infringement of Clinigen Patents. In the event that either Party becomes aware of actual or threatened infringement of a Clinigen Patent or a Clinigen Trademark during the Term, that Party will promptly send an Infringement Notice to the other Party.  Clinigen will have the first right but not the obligation to bring an infringement action against any Third Party.  If Clinigen elects to pursue such an infringement action, Clinigen shall be solely responsible for the expenses associated with such action and Clinigen shall retain all recoveries.  During the Term, in the event that Clinigen does not undertake such an infringement action within ninety (90) days after the Infringement Notice, Theravance shall be permitted to do so in Clinigen’s name. If Theravance elects to pursue such an infringement action, Theravance shall be solely responsible for the expenses associated with such action and Theravance shall retain all recoveries.  If a Party is authorized to bring an infringement action under this Section 13.03 but such Party is not recognized by the applicable court or other relevant body as having the requisite standing to pursue such action, then the other Party shall join as a party-plaintiff.  If Clinigen recommends not pursuing an infringement action, and the Joint Steering Committee recommends not pursuing such infringement action, and Theravance elects to pursue such infringement action by joining Clinigen as a party plaintiff, then Theravance agrees to indemnify and hold harmless Clinigen for all Losses arising from the infringement action.

 

(d)                                 Infringement of Joint Invention Patents. In the event that either Party becomes aware of actual or threatened infringement of a Joint Invention Patent during the Term, that Party will promptly send an Infringement Notice to the other Party.  In such an event, the matter will be handled as provided in Section 13.03(b).

 

13.04       Notice of Certification. Each Party shall promptly give notice to the other of any certification filed under the “U.S. Drug Price Competition and Patent Term Restoration Act of 1984” as amended or as it may be amended (or any substantially similar patent and/or competition legislation in the Territory) claiming that any Patent is invalid or that infringement will not arise from the manufacture, use or sale of the Licensed Product by a Third Party (“Hatch-Waxman Certification”). This Section 13.04 is intended by the Parties to apply to any successor legislation in the U.S. and to any counterpart or substantially similar legislation outside the U.S.

 

(a)                                 Notice. If a Party decides not to bring an infringement action against the entity making such a certification, the Party shall give notice to the other Party of its decision within twenty-one (21) days after receipt of notice of such certification.

 

(b)                                 Option.  The other Party then may, but is not required to, bring an infringement action against the entity that filed the certification.

 

(c)                                  Name of Party. Any suit by either Party shall either be in the name of Theravance or in the name of Clinigen or jointly in the name of Theravance and Clinigen, as may be required by Laws.

 

13.05       Representation of Other Party. If a Party elects to pursue an infringement or other legal action under this Article XIII, the other Party not bringing suit may be represented in such an action by attorneys of its own choice and at its own expense.  The Party bringing suit shall take the lead in and control any such action.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

40



 

13.06       Assistance. Each Party shall execute any legal papers necessary for the prosecution of an infringement or other legal action under this Article XIII and shall provide reasonable assistance as requested by the other Party.

 

13.07       Settlement. No settlement or consent judgment or other voluntary final disposition of any suit or legal action under this Article XIII may be entered into without the joint written consent of both Parties (which consent will not be withheld unreasonably).

 

ARTICLE XIV.                                                       TERM AND TERMINATION

 

14.01       Term and Expiration of Term. Unless otherwise mutually agreed to by the Parties, this Agreement shall commence on the Effective Date and shall end upon expiration of the Term, unless terminated early as contemplated hereunder.  Unless terminated early under this Article XIV or unless and to the extent Clinigen has exercised the Post-Term Option, the licenses granted by Theravance to Clinigen pursuant to Section 2.01 and the licenses granted by Clinigen to Theravance pursuant to Section 2.02 shall be considered fully-paid and shall become non-exclusive upon expiration of the Term.

 

14.02       Termination for Material Breach. Either Party may, without prejudice to any other remedies available to it at law or in equity, terminate this Agreement subject to Section 14.05(a) in the event that the other Party (as used in this Section 14.02, the “Breaching Party”) shall have materially breached or defaulted in the performance of any of its obligations.  The Breaching Party shall, if such breach can be cured, have sixty (60) days after written notice thereof was provided to the Breaching Party by the non-breaching Party to remedy such default (or, if such default cannot be cured within such 60-day period, the Breaching Party must commence and diligently continue actions to cure such default during such 60-day period). Any such termination shall become effective at the end of such 60-day period unless the Breaching Party has cured any such breach or default prior to the expiration of such 60-day period (or, if such default is capable of being cured but cannot be cured within such 60-day period, the Breaching Party has commenced and diligently continued actions to cure such default provided always that, in such instance, such cure must have occurred within one hundred twenty (120) days after written notice thereof was provided to the Breaching Party by the non-breaching Party to remedy such default).

 

14.03       Theravance Right to Terminate the Agreement Due to Failure to Commercialize in a Major Market Country. Theravance may terminate this Agreement subject to Section 14.05(b), if there has been no First Commercial Sale in at least three of the Major Market Countries within six months following the later to occur of (i) Marketing Authorization Approval for such Major Market Country has been transferred to Clinigen pursuant to Regulation (EC) No. 2141/96 and (ii) receipt of Licensed Product from Theravance that meets all specifications required for Commercialization in such Major Market Country.  Clinigen shall have sixty (60) days after written notice thereof was provided by Theravance to remedy such default (or, if curing such default requires more than such 60-day period, Clinigen must commence and diligently continue actions to cure such default during such 60-day period). Any such termination shall become effective at the end of such 60-day period unless Clinigen has cured such default prior to the expiration of such 60-day period (or, if such default is capable of being cured but cannot be cured within such 60-day period, Clinigen has commenced and diligently continued actions to cure such default provided always that, in such instance, such cure must have occurred within one hundred

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

41



 

twenty (120) days after written notice thereof was provided to Clinigen by Theravance to remedy such default) unless:

 

(a)                                 The Joint Steering Committee agrees to waive the default; or

 

(b)                                 Theravance is a Breaching Party.

 

14.04       Clinigen Right to Terminate Agreement After Commercialization. At any time after First Commercial Sale, Clinigen shall have the right to terminate this Agreement, subject to Section 14.05(b), upon the provision of three-hundred sixty-five (365) days written notice.

 

14.05       Effects of Termination.

 

(a)                                 Effect of Termination for Material Breach.

 

(i)                                               Material Breach by Theravance. In the event this Agreement is terminated by Clinigen pursuant to Section 14.02 for material breach by Theravance or its Affiliates or sublicensees,

 

1)                                     All licenses granted by Theravance to Clinigen under this Agreement shall survive subject to Clinigen’s continued obligation to pay royalties on Net Sales to Theravance hereunder;

 

2)                                     All licenses granted by Clinigen to Theravance under this Agreement shall terminate; and

 

3)                                     Clinigen shall retain all of its rights to bring an action against Theravance for damages and any other available remedies in law or equity.

 

(ii)                                            Material Breach by Clinigen.  In the event that this Agreement is terminated by Theravance pursuant to Section 14.02 for material breach by Clinigen or its Affiliates or sublicensees:

 

1)                                     Clinigen and its Affiliates or sublicensees shall, at their sole expense, promptly transfer to Theravance copies of all data, reports, records and materials in their possession or control that relate to the Licensed Product and return to Theravance, or destroy at Theravance’s request, all relevant records and materials in their possession or control containing Confidential Information of Theravance (provided that Clinigen may keep one copy of such Confidential Information of Theravance for archival purposes only in accordance with Section 10.01);

 

2)                                     Clinigen and its Affiliates or sublicensees shall, at their sole expense, transfer to Theravance, or shall cause their designee(s) to transfer to Theravance, ownership of all Marketing Authorizations and regulatory filings made or filed for the Licensed Product, such transfer to be as permitted by applicable Laws and regulations; otherwise Clinigen shall cooperate as necessary to permit Theravance to exercise its rights hereunder;

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

42



 

3)                                     Theravance shall continue to have the unrestricted right to access, use and cite free of charge any information, data and regulatory filings generated by or on behalf of Clinigen or its Affiliates or sublicensees relating to the Licensed Product;

 

4)                                     All of the provisions of Section 14.05(b) shall apply for the benefit of Theravance subject to the limitations set forth in Section 14.05(b);

 

5)                                     All licenses granted by Theravance to Clinigen under this Agreement shall terminate and all licenses granted by Clinigen to Theravance under this Agreement shall survive;

 

6)                                     Clinigen and its Affiliates and Clinigen’s and its Affiliates’ licensees and sublicensees under this Agreement [***]; and

 

7)                                     Theravance shall retain all of its rights to bring an action against Clinigen for damages and any other available remedies in law or equity.

 

(b)                                 Effect of Termination by Theravance Under Section 14.03 or by Clinigen Under Section 14.04. If Theravance terminates this Agreement under Section 14.03 or if Clinigen terminates this Agreement under Section 14.04, then at the sole election of Theravance, all or any of the following shall apply:

 

(i)                                               Clinigen and its Affiliates and sublicensees shall, at their sole expense, promptly transfer to Theravance copies of all data, reports, records and materials in their possession or control that relate to the Licensed Product and return to Theravance, or destroy at Theravance’s request, all relevant records and materials in their possession or control containing Confidential Information of Theravance (provided that Clinigen may keep one copy of such Confidential Information of Theravance solely for archival purposes in accordance with Section 10.01), subject to such Person’s document retention obligations under applicable insurance policies, Laws and regulations, including EU GMP Directive 2003/94/EC and associated guidance;

 

(ii)                                            Clinigen and its Affiliates and sublicensees shall, at their sole expense, transfer to Theravance, or shall cause their designee(s) to transfer to Theravance, ownership of all Marketing Authorizations and regulatory filings made or filed for the Licensed Product, such transfer to be as permitted by any Third Party licenses or other such prior rights and applicable Laws and regulations, otherwise Clinigen shall cooperate as necessary to permit Theravance to exercise its rights hereunder;

 

(iii)                                         Theravance shall continue to have the unrestricted right to access, use and cite free of charge any information, data and regulatory filings generated by or on behalf of Clinigen or its Affiliates or sublicensees relating to the Licensed Product;

 

(iv)                                        Theravance shall have the right at its sole expense, for its own benefit or together with or through a Third Party, to make, have made, Develop and Commercialize the Licensed Product in the Territory;

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

43



 

(v)                                           All licenses granted by Clinigen to Theravance under this Agreement shall survive, and in addition Clinigen and its Affiliates and sublicensees shall exclusively grant to Theravance all applicable licenses worldwide under the Clinigen Patents, Clinigen Inventions, Clinigen Know-How, and Clinigen’s rights in the Joint Inventions and/or Joint Invention Patents to enable Theravance by itself and/or through one or more Third Party sublicensees to make, have made, Develop and Commercialize the Licensed Product worldwide. Clinigen shall also provide Theravance with all such information and data which Clinigen and its Affiliates and sublicensees reasonably have available, for example access to drug master file, clinical data and the like, and shall execute such instruments as Theravance reasonably requests, to enable Theravance and/or one or more Third Party sublicensees to obtain the appropriate Marketing Authorizations to market and sell the Licensed Product worldwide and for any other lawful purpose related to Development, manufacture and Commercialization of the Licensed Product worldwide;

 

(vi)                                        All licenses granted by Theravance to Clinigen with respect to the Licensed Product under this Agreement shall terminate;

 

(vii)                                     Clinigen and its Affiliates and sublicensees shall return to Theravance all available Licensed Product stock which is then held by Clinigen and its Affiliates and sublicensees or cause the Licensed Product stock to be provided to Theravance if held by a vendor or other Third Party on behalf of Clinigen; and

 

(viii)                                  Clinigen shall provide Theravance with a perpetual royalty-free license to, or otherwise assign ownership of (to Theravance’s satisfaction), all trademarks, trade dress and copyrights owned by Clinigen relating to the Licensed Product.

 

14.06       Accrued Rights; Surviving Obligations. Termination, relinquishment or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of any Party prior to such termination, relinquishment or expiration. Such termination, relinquishment or expiration shall not relieve any Party from obligations which are expressly or by implication intended to survive termination, relinquishment or expiration of this Agreement, including without limitation Article X, and shall not affect or prejudice any provision of this Agreement which is expressly or by implication provided to come into effect on, or continue in effect after, such termination, relinquishment or expiration.

 

ARTICLE XV.                                                            MISCELLANEOUS

 

15.01       Relationship of the Parties. Each Party shall bear its own costs incurred in the performance of its obligations hereunder without charge or expense to the other except as expressly provided in this Agreement. Neither Party shall have any responsibility for the hiring, termination or compensation of the other Party’s employees or for any employee benefits of such employee. No employee or representative of a Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party’s approval. For all purposes, and notwithstanding any other provision of this Agreement to the contrary, the legal relationship of the parties under this Agreement to Theravance shall be that of independent contractors. This Agreement does not constitute a formal legal partnership or joint venture between the Parties.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

44



 

15.02       Registration and Filing of This Agreement. To the extent, if any, that either Party concludes in good faith that it or the other Party is required to file or register this Agreement or a notification thereof with any Governmental Authority, including without limitation the U.S. Securities and Exchange Commission, the U.S. Federal Trade Commission, or the London Stock Exchange, in accordance with Laws, such Party shall inform the other Party thereof. Should both Parties jointly agree that either of them is required to submit or obtain any such filing, registration or notification, they shall cooperate, each at its own expense, in such filing, registration or notification and shall execute all documents reasonably required in connection therewith. In such filing, registration or notification, the Parties shall request confidential treatment of sensitive provisions of this Agreement, to the extent permitted by Laws. The Parties shall promptly inform each other as to the activities or inquiries of any such Governmental Authority relating to this Agreement, and shall reasonably cooperate to respond to any request for further information therefrom on a timely basis.

 

15.03       Force Majeure. The occurrence of an event which materially interferes with the ability of a Party to perform its obligations or duties hereunder which is not within the reasonable control of the Party affected, not due to malfeasance by such Party, and which could not with the exercise of due diligence have been avoided (each, a “Force Majeure Event”), including, but not limited to, an injunction, order or action by a Governmental Authority, fire, accident, labor difficulty, strike, riot, civil commotion, natural disaster, inability to obtain raw materials, delay or errors by shipping companies or change in law, shall not excuse such Party from the performance of its obligations or duties under this Agreement, but shall merely suspend such performance during the continuation of the Force Majeure. The Party prevented from performing its obligations or duties because of a Force Majeure Event shall promptly notify the other Party of the occurrence and particulars of such Force Majeure and shall provide the other Party, from time to time, with its best estimate of the duration of such Force Majeure Event and with notice of the resolution thereof. The Party so affected shall use Diligent Efforts to avoid or remove such causes of nonperformance as soon as is reasonably practicable. Upon resolution of the Force Majeure Event, the performance of any suspended obligation or duty shall promptly recommence. The Party subject to the Force Majeure Event shall not be liable to the other Party for any direct, indirect, consequential, incidental, special, punitive, exemplary or other damages arising out of or relating to the suspension or termination of any of its obligations or duties under this Agreement by reason of the occurrence of a Force Majeure Event, provided such Party complies in all material respects with its obligations under this Section 15.03.

 

15.04       Governing Law. This Agreement shall be construed, and the respective rights of the Parties determined, according to the law of the State of New York excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction

 

15.05       Dispute Resolution.

 

(a)                                 The Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, controversy or claim arising from or related to this Agreement or the breach thereof.  If the Parties do not fully settle, and a Party wishes to pursue the matter, each such dispute, controversy or claim that is not an “Excluded Claim” shall be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the American Arbitration Association (“AAA”), and judgment on the arbitration award may be entered in any court having jurisdiction thereof.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

45



 

(b)                                 The arbitration shall be conducted by a panel of three persons experienced in the pharmaceutical business: within thirty (30) days after initiation of arbitration, each Party shall select one person to act as arbitrator and the two Party-selected arbitrators shall select a third arbitrator, who shall be unaffiliated with both Parties and their respective Affiliates, within thirty (30) days of their appointment.  If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be appointed by the AAA.  The place of arbitration shall be New York, New York.

 

(c)                                  Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved.  Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending the arbitration award.  The arbitrators shall have no authority to award punitive or any other type of damages not measured by a Party’s compensatory damages.  Each Party shall bear its own costs and expenses and attorneys’ fees and an equal share of the arbitrators’ fees and any administrative fees of arbitration

 

(d)                                 Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties.  In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable New York statute of limitations.

 

(e)                                  The Parties agree that, in the event of a good faith dispute over the nature or quality of performance under this Agreement, neither Party may terminate this Agreement until final resolution of the dispute through arbitration or other judicial determination.  The Parties further agree that any payments made pursuant to this Agreement pending resolution of the dispute shall be refunded if an arbitrator or court determines that such payments are not due.

 

(f)                                   As used in this Section 15.05, the term “Excluded Claim” shall mean a dispute, controversy or claim that concerns the validity or infringement of a patent, trademark or copyright.

 

15.06       Theravance Equitable Relief.  Clinigen acknowledges and agrees that the restrictions set forth in Article X, Section 11.04(b) and Section 14.05(a)(ii)6) of this Agreement are reasonable and necessary to protect the legitimate interests of Theravance and that Theravance would not have entered into this Agreement in the absence of such restrictions, and that any breach or threatened breach of any such provision will result in irreparable injury to Theravance for which there will be no adequate remedy at law.  In the event of a breach or threatened breach of Article X Section 11.04(b) or Section 14.05(a)(ii)6) Theravance shall be authorized and entitled to obtain from any court of competent jurisdiction equitable relief, whether preliminary or permanent, specific performance and an equitable accounting of all earnings, profits and other benefits arising from such breach, which rights shall be cumulative and in addition to any other rights or remedies to which Theravance may be entitled in law or equity.  Clinigen agrees to waive any requirement

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

46



 

that Theravance (a) post a bond or other security as a condition for obtaining any such relief, and (b) show irreparable harm, balancing of harms, consideration of the public interest or inadequacy of monetary damages as a remedy.  Nothing in this Section 15.06 is intended, or should be construed, to limit Theravance’s rights to equitable relief under 15.05(c) or any other remedy for a breach of any other provision of this Agreement.

 

15.07       Attorneys’ Fees and Related Costs. In the event that any legal proceeding (other than pursuant to the arbitration dispute resolution provision in Section 15.05) is brought to enforce or interpret any of the provisions of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees, court costs and expenses of litigation whether or not the action or proceeding proceeds to final judgment.

 

15.08       Assignment. This Agreement may not be assigned by either Party without the prior written consent of the other Party; provided, however, that either Party may assign this Agreement, in whole or in part, to any of its Affiliates if such Party guarantees the performance of this Agreement by such Affiliate; and provided further that either Party may assign this Agreement to a successor to all or substantially all of the assets of such Party whether by merger, sale of stock, sale of assets or other similar transaction. This Agreement shall be binding upon, and subject to the terms of the foregoing sentence, inure to the benefit of the Parties hereto, their permitted successors, legal representatives and assigns.

 

15.09       Notices. All demands, notices, consents, approvals, reports, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if (a) delivered personally, by facsimile with confirmation of receipt, by mail (first class, postage prepaid), or by overnight delivery using a globally-recognized carrier, to the Parties at the following addresses:

 

Theravance:

 

Theravance, Inc.

901 Gateway Boulevard

South San Francisco, CA 94080

Facsimile: [***]

Attn: Head, Business Development

 

 

 

Clinigen:

 

Clinigen Group PLC

Pitcairn House Crown Square

Centrum 100, BURTON UPON TRENT

DE14 2WW United Kingdom

Facsimile:

Attn: Chief Executive Officer

 

or to such other address as the addressee shall have last furnished in writing in accord with this provision to the addressor; or (b) sent electronically to all representatives of the addressee on the Joint Steering Committee with any attachments in a standard format (e.g., MSWord, PDF, etc.) and acknowledged by the recipient by a reply email.  All notices sent electronically shall also be sent in paper form if requested by the recipient.  All notices shall be deemed effective upon receipt by the addressee.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

47



 

15.10       Severability. In the event of the invalidity of any provisions of this Agreement or if this Agreement contains any gaps, the Parties agree that such invalidity or gap shall not affect the validity of the remaining provisions of this Agreement. The Parties will replace an invalid provision or fill any gap with valid provisions which most closely approximate the purpose and economic effect of the invalid provision or, in case of a gap, the Parties’ presumed intentions. In the event that the terms and conditions of this Agreement are materially altered as a result of the preceding sentences, the Parties shall renegotiate the terms and conditions of this Agreement in order to resolve any inequities. Nothing in this Agreement shall be interpreted so as to require either Party to violate any applicable Laws, rules or regulations.

 

15.11       Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

 

15.12       Waiver. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. No waiver by any Party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. Except as expressly set forth in this Agreement, all rights and remedies available to a Party, whether under this Agreement or afforded by law or otherwise, will be cumulative and not in the alternative to any other rights or remedies that may be available to such Party.

 

15.13       Entire Agreement. This Agreement (including the exhibits and schedules hereto) constitutes the entire agreement between the Parties hereto with respect to the within subject matter and supersedes all previous agreements and understandings between the Parties, whether written or oral. This Agreement may be altered, amended or changed only by a writing making specific reference to this Agreement and signed by duly authorized representatives of Theravance and Clinigen.

 

15.14       No License. Nothing in this Agreement shall be deemed to constitute the grant of any license or other right in either Party, to or in respect of the Licensed Product, patent, trademark, Confidential Information, trade secret or other data or any other intellectual property of the other Party, except as expressly set forth herein.

 

15.15       Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including without limitation any creditor of either Party hereto. No such Third Party shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any Claim in respect of any debt, liability or obligation (or otherwise) against either Party hereto.

 

15.16       Counterparts. This Agreement may be executed in any two counterparts, each of which, when executed, shall be deemed to be an original and both of which together shall constitute one and the same document.

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

48



 

15.17       Parties addresses and bank details

 

THERAVANCE, INC.

 

Theravance, Inc.

901 Gateway Blvd.

South San Francisco, CA 94080

 

[***]

 

CLINIGEN GROUP PLC

 

[***]

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

49


 

IN WITNESS WHEREOF, Theravance and Clinigen, by their duly authorized officers, have executed this Agreement on the 8th day of March, 2013.

 

 

THERAVANCE, INC.

 

CLINIGEN GROUP PLC

 

 

 

 

By:

/s/ Rick E Winningham

 

By:

/s/ Peter George

 

Rick E Winningham

 

 

Peter George

 

Chief Executive Officer

 

 

Chief Executive Officer

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

50



 

EXHIBIT A

 

Structure of Chemical Compound known as Telavancin

 

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 


 

EXHIBIT B

 

[***]

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 



 

EXHIBIT C

 

Theravance Trademarks as of the Effective Date in the Territory

 

[***]

 


***CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 




Exhibit 10.18

 

[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

License Agreement

 

executed as of the date last below written (hereinafter referred to as “Effective Date”) by and between

 

JANSSEN PHARMACEUTICA, Naamloze Vennootschap, a business corporation organized under the laws of Belgium, entered in the Trade Register of Turnhout under Nr. 4203, having its principal office at B-2340 Beerse (Belgium), Turnhoutseweg 30, facsimile: +32 14 602 443 (hereinafter referred to as “JANSSEN”)

 

and

 

Theravance, INC., a businesses corporation organized under the laws of Delaware, United States of America, and having its principal office at South San Francisco, CA 94080, 901 Gateway Boulevard, facsimile: +1650-808-6095 (hereinafter referred to as “THERAVANCE”)

 

WITNESSETH

 

WHEREAS, JANSSEN has developed through its research a drug delivery system on the basis of cyclodextrin derivatives for the administration of therapeutic compounds with low aqueous solubility or chemical stability; and

 

WHEREAS, JANSSEN has accumulated and is the owner of certain proprietary information in connection with the use of hydroxypropyl-beta-cyclodextrin (“HPBCD”) in pharmaceutical applications; and

 

WHEREAS, JANSSEN owns or controls certain patent and/or patent applications in connection with the use of HPBCD in pharmaceutical applications; and

 

WHEREAS, THERAVANCE intends [*], and has requested a license from JANSSEN under the above-mentioned patents and proprietary information for said purpose; and

 

WHEREAS, JANSSEN is willing to grant such a license under the terms and conditions set forth hereinafter.

 

NOW, THEREFORE, in consideration of the premises, mutual covenants and obligations herein contained, it is agreed by and between the parties hereto as follows

 

Article 1: Definitions

 

Each term defined below shall, for the purpose of this Agreement, have the following meaning unless the context clearly requires otherwise and the singular shall include the plural and vice versa:

 

1.1                               “Affiliate” of a party to this Agreement shall mean any company which owns or controls at least forty per cent (40%) of the voting stock of such party or any other company at least forty per cent (40%) of whose voting stock is owned by or controlled by such owning or controlling company or by a party to this Agreement.

 

1.2                               “Field” shall mean [*].

 

1.3                               “HPBCD” shall mean [*] as covered by the Patents, [*] and the toxicological and pharmacokinetic profile of which is specified in the Know How.

 


[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 



 

1.4                               “Know-How” shall mean [*]. Know-How shall include but shall not be limited to [*], all as indicated in Exhibit II hereto and made a part hereof.

 

1.5                               “Major Countries” shall mean any or all of the following: United States, UK, France, Germany, Spain and Italy.

 

1.6                               “Net Sales” shall mean the amount billed, invoiced or received (whichever is first) on [*], less:

(a)                                 Customary trade, quantity, or cash discounts and non-affiliated brokers’ or agents’ commissions actually allowed and taken, discounts, refunds, chargebacks, retroactive price adjustments, rebates, including but not limited to government mandated rebates, and any other allowances which effectively reduce the net selling price;

 

(b)                                 Amounts repaid or credited by reason of rejections or return; and/or

 

(c)                                  Any freight or other transportation costs, insurance charges, duties, tariffs and all sales and excise taxes based directly on sales or turnover or delivery or use of material produced under this Agreement and/or

 

(d)                                 Any other similar and customary deductions (as defined and accepted by generally accepted accounting principles (“GAAP”)), actually incurred.

 

Net Sales shall not include sales of Product by THERAVANCE to its sub-licensees.

 

1.7                               “Patents” shall mean the patents and patent applications owned or controlled (including patents that can be sublicensed) by JANSSEN or by any JANSSEN Affiliate claiming the use of HPBCD in pharmaceutical applications, including any continuations, continuations-in-part, divisions, reissues, renewals or extensions thereof or any supplementary protection certificate granted on the basis of the marketing authorisations obtained by THERAVANCE for the Product. An updated list of the Patents is attached hereto as Exhibit 1.

 

1.8                               “Process Patents” shall mean the patent owned, or licensed by JANSSEN, as specifically listed in Exhibit B, that claims a process for preparing HPBCD, including any extensions thereof or any supplementary protection certificate relating thereto or any other patent or patent application hereafter acquired by JANSSEN under which JANSSEN is licensed with the right to sub-license and [*].

 

1.9                               “Product” shall mean any pharmaceutical product in finished dosage form containing [*] the manufacture, use or sale of which infringes a Valid Claim of a Patent, and/or utilises the proprietary information encompassed in the Know-How.

 

1.10                        “Specifications” shall mean the basic specifications of HPBCD described in Exhibit III hereto and made a part hereof.

 

1.11                        “Territory” shall mean the world.

 

1.12                        “Valid Claim” shall mean a claim in a Patent which has not lapsed or become abandoned and which claim has not been declared invalid or that has not been finally rejected by a court of competent jurisdiction or a patent authority such as the European Patent Office or which has not been admitted to be invalid or unenforceable through reissue or disclaimer.

 

Article 2: Grant

 

2.1                               Subject to the terms and conditions of this Agreement, JANSSEN hereby grants THERAVANCE a world-wide sole license in the Field under the Patents (i.e. “sole license” means JANSSEN solely retains the right to practice under the Patents in the Field without the right to transfer, other than to an Affiliate, any rights under the Patents in the Field and THERAVANCE has an exclusive license under the Patents in the Field subject only to JANSSEN’s retained right) and a world-wide sole license in the Field under the Know-How for the sole purpose of developing, registering, making, having made, using and selling the Products and a non-exclusive license under the Process Patents for the sole purpose of making or having HPBCD made for the benefit of THERAVANCE, THERAVANCE’s Affiliates or THERAVANCE’s sublicensees for the Product in accordance with Article 5 below.

 


[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

2



 

2.2                               Promptly following the Effective Date, and thereafter during the term of this Agreement, JANSSEN shall disclose the Know-How to THERAVANCE or to regulatory agencies as THERAVANCE deems necessary for the exercise of its rights hereunder.

 

2.3                               All rights herein granted, are personal to THERAVANCE and are indivisible and non-transferable, subject to Article 2.4 below, except that the rights granted to THERAVANCE may be exercised by any of THERAVANCE’s Affiliates.

 

2.4                               THERAVANCE will be entitled to grant sublicenses for the Product to third parties. THERAVANCE will notify JANSSEN of any third party so sublicensed by THERAVANCE. THERAVANCE shall procure that any such third party so sublicensed will abide by the obligations of this Agreement. In the event such a sublicense pertains to one or more Major Countries, THERAVANCE shall require Janssen’s prior written approval, such approval not to be unreasonably withheld.

 

2.5                               THERAVANCE acknowledges JANSSEN’s representation that, depending on the nature and scope of the responsibilities sublicensed to such a third party in the United States, it may be necessary for JANSSEN to consult with the Public Health Services Office of Technology (“OTT”) further to an agreement entered into between Janssen and OTT on March 26, 1998 (“OTT Agreement”).

 

Article 3: Royalties—Milestone payments

 

3.1                               In consideration of the rights and licenses granted by JANSSEN to THERAVANCE, THERAVANCE agrees to pay a royalty of [*].

 

3.2                               THERAVANCE’s obligation to pay Patent royalties hereunder will remain in effect on a country-by-country basis until expiration of the last Patent in the subject country having a Valid Claim covering the Product.

 

THERAVANCE’s obligation to pay Know-How royalties shall remain in effect for a period of ten years following the first commercial sale of Product in any country of the Territory. No further Know-How royalties shall be payable after the expiry of the above ten-year period.

 

Notwithstanding the above, it is understood that the combined Patent and Know-How royalties payable by THERAVANCE shall amount to no less than [*] notwithstanding the prior expiry of the last Patent in the subject country having a Valid Claim covering the Product.

 

3.3                               In consideration of the rights and licenses granted hereunder, THERAVANCE agrees to pay milestone payments to JANSSEN in accordance with the following schedule:

 

·                                          [*] shall be paid within thirty (30) days following the execution of this Agreement;

 

·                                          [*] shall be paid within thirty (30) days following [*];

 

·                                          [*] shall be paid within thirty (30) days following [*];

 

·                                          [*] shall be paid within thirty (30) days following [*].

 

The foregoing milestone payments are non-refundable and not creditable against future royalties. In the event that the Product fails at any stage prior to any of the above milestone payments becoming due, such remaining milestone payments shall be payable if the failed Product is replaced by THERAVANCE with a back-up compound in the Field which requires HPBCD for its development and/or commercialisation.

 


[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

3



 

Article 4: Sales and Royalty Reports—Royalty Payments

 

4.1                               Ninety (90) days following each calendar quarter, THERAVANCE shall submit to JANSSEN a sales report showing its total sales of Product in Territory in units and Net Sales value. Such sales report shall also include a royalty report containing a calculation of the royalty due and payable to JANSSEN.

 

4.2                               Together with such royalty report, THERAVANCE shall pay the royalty due and payable. All royalty payments to be made by THERAVANCE to JANSSEN shall be converted into US Dollars at the average rate of exchange for the calendar quarter for which royalty payments are being remitted according to THERAVANCE’s normal procedures, as consistently applied by THERAVANCE for its other products.

 

All payments shall be made by wire transfer to a designated JANSSEN account within ninety (90) days following the end of each calendar quarter. In the event that royalties are payable with respect to Net Sales in a country whose currency cannot be freely converted, such currency shall be converted in accordance with the normal procedures consistently applied by THERAVANCE

 

4.3                               Any income or other taxes which THERAVANCE is required by law to pay or withhold on behalf of JANSSEN with respect to milestones or royalties payable to JANSSEN under this Agreement shall be deducted from the amount due. THERAVANCE shall furnish JANSSEN with proof of such payments. Any such tax required to be paid or withheld shall be an expense of and borne solely by JANSSEN. THERAVANCE shall provide JANSSEN with a certificate or other documentary evidence to enable JANSSEN to support a claim for a refund or a foreign tax credit with respect to any such tax so withheld or deducted by THERAVANCE.

 

4.4                               THERAVANCE shall keep true and accurate books clearly specifying its sales per country of Territory in Net Sales value as well as in units sold for the purpose of making such reports.

 

JANSSEN shall have the right to nominate an independent certified public accountant acceptable to and approved by THERAVANCE who shall have access, on reasonable notice, to THERAVANCE and its Affiliates’ records during reasonable business hours for the purpose of verifying the royalties payable as provided in this Agreement for the two preceding years. This right may not be exercised more than once in any calendar year, and once a calendar year is audited it may not be re-audited. The said accountant shall disclose to JANSSEN only information for the purpose of verifying the accuracy of the royalty report and the royalty payments made according to this Agreement.

 

Any adjustment required by such audit shall be made within thirty (30) days of the determination by the accountants. If the adjustment payable to JANSSEN is greater than [*], then the cost to JANSSEN for the audit shall be paid by THERAVANCE.

 

Article 5: Supply of HPBCD

 

5.1                               In order to be assured of a source being able to supply constant standard quality of pharmaceutical grade HPBCD complying with the Specifications and the toxicological and pharmacokinetic data contained in JANSSEN’s Know-How, JANSSEN has entered into an agreement with ROQUETTE FRERES a manufacturer of cyclodextrins which agreement provides that HPBCD produced by ROQUETTE FRERES shall comply with the Specifications. The data contained within the JANSSEN Know-How have been validated utilising HPBCD supplied by the said supplier.

 


[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

4



 

5.2                               It will be the responsibility of THERAVANCE to procure supplies of HPBCD either from ROQUETTE FRERES or from an alternative supplier under terms and conditions to be agreed separately with such supplier, provided that, at THERAVANCE’s request, JANSSEN shall assist THERAVANCE in its negotiations with ROQUETTE FRERES regarding the terms and conditions of supply of HPBCD. If despite good faith efforts ROQUETTES FRERES and THERAVANCE would be unable to enter into a supply agreement, THERAVANCE and JANSSEN will meet following THERAVANCE’s request to discuss in good faith potential course of action, including the use of alternative suppliers. It is understood by THERAVANCE that to the extent it wants to utilise an alternative supplier, JANSSEN can not provide a guarantee that such supplier is capable of supplying pharmaceutical grade HPBCD nor that the specifications of such alternative supplier would comply with the data contained within the JANSSEN Know-How.

 

Article 6: Warranties

 

6.1                               JANSSEN represents and warrants to the best of its knowledge, that as of the date hereof it has title to and ownership of the Patents and Know-How.

 

6.2                               JANSSEN makes no representation or warranty, express or implied, that the use of HPBCD shall eventually result in marketable Product. No further statement of warranty covering HPBCD shall be binding on JANSSEN without the written consent of an authorised officer of JANSSEN.

 

6.3                               Each party further warrants that it has the right to enter into this Agreement and that it is under no obligation to any third party, express or implied, conflicting with the terms and conditions of this Agreement.

 

6.4                               Nothing in this Agreement shall be considered as a warranty, either express or implied, that the use of HPBCD in Products will not infringe any third party’s patent rights.

 

Article 7: Product liability

 

7.1                               THERAVANCE agrees to indemnify and hold JANSSEN harmless from and against all claims, actions, direct damages, losses, costs and expenses of any kind resulting from or arising out of claims by third parties based on product liability or similar theories relating to the development, manufacturing, transportation, storage, promotion or sale of the Product, except to the extent such losses arose or resulted from faulty conduct or negligence by JANSSEN in supplying the Know-How and so long as (i) JANSSEN allows THERAVANCE to participate in or, at THERAVANCE’s sole option but without any obligation, to conduct at THERAVANCE’s expense the defense of a claim or action for which indemnification is sought under this Article, and (ii) JANSSEN does not compromise or settle such claim or action without THERAVANCE’s prior written consent, which shall not be unreasonably withheld.

 

7.2                               In no event shall THERAVANCE be liable for any consequential or indirect damage of JANSSEN whatsoever.

 

Article 8: Patent Infringement

 

8.1                               If either party learns of an infringement of a Patent by a third party, using HPBCD in the promotion or sale of a product substantially similar to a Product, the party learning of the alleged infringement shall promptly inform the other party.

 

8.1.1                     In case of such an infringement, JANSSEN shall have the right (but not the obligation), in its own name and at its own cost, to either bring an enforcement action to stop the alleged infringement or settle with the alleged infringer; provided, however, that no such settlement shall diminish or otherwise affect THERAVANCE’s rights hereunder, unless THERAVANCE gives its prior written consent. THERAVANCE will give reasonable assistance to JANSSEN in such action against a third

 

5



 

party, including making available to JANSSEN records, information and evidence relevant to the infringement and, if necessary, being named a party in such action.

 

All sums awarded or received in settlement of such suit shall be equally divided between JANSSEN and THERAVANCE, after having reimbursed both parties for all reasonable out of pocket expenses incurred in bringing or assisting in such action.

 

8.1.2                     Whenever JANSSEN elects not to take action against such infringement within a reasonable period of time not to exceed three (3) months THERAVANCE will have the right but not the obligation to take action in its own name, at its own expense and by counsel of its own choice.

 

JANSSEN will give all reasonable assistance in taking such action, including being a named party and making available to THERAVANCE records, information and evidence relevant to the infringement. THERAVANCE will be entitled to all recovery monies awarded or received in settlement of such suit. Any out of pocket expenses incurred by JANSSEN in assisting THERAVANCE in such action will be reimbursed by THERAVANCE out of the recovery monies awarded or received.

 

Whenever THERAVANCE so elects to take action JANSSEN will at any time be entitled to be represented in such action at its own cost and by counsel of its own choice.

 

THERAVANCE will in no event settle or consent to a judgement or other final disposition of a suit without the prior written approval of JANSSEN, which shall not unreasonably be withheld. Furthermore, whenever during such action, the infringing party would invoke a declaration of invalidity of the Patents, JANSSEN will be entitled to take over the direction of the suit.

 

8.1.3                     In the event that all of the claims included within the Patents under which THERAVANCE is developing, registering, or selling the Product shall be held invalid or not infringed by a court of competent jurisdiction, whether or not there is a conflicting decision by another court of jurisdiction, THERAVANCE may pay the royalties which would have otherwise been due under the Patent on sales covered by such claims into an escrow account until such judgement shall be finally reversed by an unappealed or unappealable decree of a court of competent jurisdiction of higher authority, in which event royalty payments shall be resumed and the full amount in escrow shall become due and payable. In the event the judgement is upheld, the full escrow amount will revert to THERAVANCE and no further royalties under the Patents will be due.

 

8.2                               THERAVANCE shall be responsible at its own cost and responsibility to defend against any claim or allegation that the development, manufacturing or commercialisation of the Product infringes a third party patent.

 

Article 9: Regulatory Matters

 

9.1                               THERAVANCE shall be responsible at its own cost to file and maintain the marketing authorisation applications in connection with Product and in general to procure any license, registration or approval required to use HPBCD in the import, manufacture and sale of the Product in any country of Territory where THERAVANCE decides to commercialise Product.

 

All scientific and technical data, information and knowledge developed by THERAVANCE with respect to the Product, including the registration file shall be exclusively owned by THERAVANCE and JANSSEN shall have no right to use such THERAVANCE’s information.

 

9.2                               JANSSEN shall reasonably assist THERAVANCE whenever the regulatory authorities in any country of the Territory have questions in relation to HPBCD and the use thereof in pharmaceutical applications. Any request for additional information specifically related to HPBCD shall be referred to JANSSEN and JANSSEN shall use reasonable efforts to address the same in

 

6



 

due time in consultation with THERAVANCE. To the extent necessary representatives of both parties will meet to discuss any such requests.

 

Article 10: Adverse Drug Reporting

 

Each party will notify the other in writing of any adverse drug reaction or other unusual physiochemical, pharmacologic, toxicological or pharmacokinetic finding in relation to the use of HPBCD in the Product including, without limitation, any experimental or clinical use. The parties will establish a standard operating procedure in relation to ADE-reporting.

 

Article 11: Commercialisation

 

All business decisions, including but not limited to the selection of the trademark(s) for Product, pricing, reimbursement, package design, sales and promotional activities and the decision to launch or continue to market a Product in a particular country in the Territory, shall be within the sole discretion and responsibility of THERAVANCE.

 

Notwithstanding the above it is agreed that THERAVANCE shall otherwise use reasonable efforts consistent with its normal business practices to market and promote Product. In doing so it will use the same level of effort as with its other, similar products of similar sales potential. Failure to use reasonable efforts as qualified herein can be considered a material breach in accordance with the provisions of Article 14.1.

 

Article 12: Confidentiality—Limitations on Use

 

12.1                        Neither party shall disclose proprietary or confidential information of the other party to any third party without prior written consent of the other party, except and to the extent as required by law, including without limitation to governmental regulatory agencies, and is thereafter publicly disclosed or made available to the public by operation of law, or except that any of such confidential and proprietary information can be shown by the receiving party’s written records:

(i)                                     to be in its possession or in the possession of its employees prior to such disclosure to the receiving party; or

 

(ii)                                  is now or hereafter becomes available as public knowledge or literature through no fault of the receiving party; or

 

(iii)                               is received by such party from an independent third party who did not receive the information directly or indirectly from the other party.

 

Such proprietary and confidential information shall be disclosed to each party’s personnel only on a strict need-to-know basis.

 

The obligation of confidentiality contained in this Article, shall survive the expiration and/or termination of this Agreement for [*].

 

12.2                        In the event that THERAVANCE licenses the Product to third parties or otherwise involves third parties in the manufacturing and/or commercialisation of Product and such third party needs to receive certain Know-How, THERAVANCE shall, prior to disclosing any such Know-How enter into a confidentiality undertaking that is essentially similar to the one contained herein and shall in any event provide such Know-How on a strict need-to-know basis.

 


[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

7


 

Article 13: Term

 

Unless sooner terminated in accordance with the provisions of Article 14, this Agreement shall remain in full force and effect from the Effective Date until the date THERAVANCE has no further royalty obligation towards JANSSEN under the provisions of Article 3.

 

Upon termination of THERAVANCE’S royalty obligations for Know-How, THERAVANCE will have a royalty-free right to use the Know-How in the manufacture, use and sale of Product.

 

Article 14: Termination

 

14.1                        In the event JANSSEN or THERAVANCE or their respective Affiliates (or licensees or distributors in case of THERAVANCE) are in breach of any of the respective obligations and conditions contained in this Agreement the other party shall be entitled to give the party in breach notice requiring it to make good such breach. If such breach constitutes a material breach and is not cured or there is no commencement of cure within sixty (60) days after receipt of such notice, including good faith efforts by senior management of both parties to overcome the issue, the notifying party shall be entitled (without prejudice to any of its other rights conferred on it by this Agreement) to terminate this Agreement by giving a notice to take effect immediately. The right of either party to terminate this Agreement in accordance with this Article 14.1 shall not be affected in any way by its waiver of, or failure to take action with respect to any previous breach.

 

14.2                        In the event that one of the parties hereto shall go into liquidation, a receiver or a trustee be appointed over a significant and/or material property or estate of that party and said receiver or trustee is not removed within sixty (60) days, or the party makes an assignment for the benefit of creditors, and whether any of the aforesaid events be the outcome of the voluntary act of that party, or otherwise, the other party shall be entitled to terminate this Agreement forthwith by giving a written notice to the first party.

 

14.3                        THERAVANCE may terminate this Agreement in its entirety upon one (1) month written notice to JANSSEN.

 

Article 15: Effects of Termination

 

In case of termination of this Agreement in accordance with Article 14 and if there is no good faith dispute between the parties, THERAVANCE shall immediately refrain from formulating and selling or offering for sale Product in Territory and return all proprietary and confidential Know-How and information relative to HPBCD together with all physical embodiments thereof shall be returned to JANSSEN. Furthermore THERAVANCE shall make all payments accrued under this Agreement prior to the effective termination date

 

Notwithstanding the above, THERAVANCE may reasonably sell out its remaining stock of Product which THERAVANCE has in stock at the moment of termination of this Agreement, provided it shall pay the royalties due and payable on such sales.

 

Article 16: Force Majeure

 

Neither party hereto shall be liable to the other party for failure or delay in meeting any obligation hereunder due to circumstances beyond such party’s reasonable control such as, but not limited to, strikes, lockouts, acts of God, riots, war, fire, flood, embargoes, failure of power, acts of government or of any agency, provided that the party affected shall immediately inform the other party about the cause of such delay. The party so affected shall use its reasonable efforts to eliminate, cure and overcome any such causes and resume performance of its covenants with all possible speed.

 

8



 

Article 17: Severability

 

If any clause or provision of this Agreement or the application of any such clause or provision in a particular context or to a particular situation or circumstance should be held unenforceable or otherwise in conflict with or in violation of any applicable law, by, or as a result of determination of any court, tribunal or authority acting in a judicial capacity of competent jurisdiction, the decision of which is binding upon the parties, the parties agree that such determination shall not affect the validity and application of such clause or provision in contexts, situations or circumstances other than that in or to which it is held unenforceable and shall only apply for those countries of the Territory amenable under the law applied by such tribunal, court or authority.

 

Parties further agree to replace any clause or provision so held unenforceable in a lawful manner, reflecting to the extent possible, the economic, business and other purposes of the clause or provision held void or unenforceable in such specific contexts, situations or circumstances.

 

Article 18: General provisions

 

18.1                        No damages shall be owed by either party to the other if this Agreement or any part of it is held invalid or void at any time by virtue of future acts of legislation.

 

18.2                        Neither party shall assign or otherwise dispose of the whole or any part of its rights under this Agreement without the prior written consent of the other party, except that either party may assign this Agreement to one of its Affiliates and except as provided in 18.5.

 

18.3                        Neither party nor its employees or representatives are under any circumstances to be considered as employees or agents or representatives of the other party. Neither party nor its employees have the authority or power to bind the other party or contract in the other party’s name.

 

18.4                        Save as required by law, no announcement or circular in connection with the subject matter of this Agreement shall be made by or on behalf of JANSSEN or THERAVANCE without the prior approval of the other party, such approval not to be unreasonably withheld. This Agreement may be filed with regulatory authorities as required by law.

 

18.5                        A change of control of THERAVANCE through a merger, acquisition or sale of substantially all assets (including the assets relating to the development of the Product) shall not by and of itself give rise to the right for JANSSEN to terminate the License, provided always that prior to the closing of any such transaction the acquiring party has agreed in writing to abide by the terms and conditions of the License Agreement.

 

18.6                        No rights are granted by either party to the other except those expressly set forth in this Agreement.

 

Article 19: Dispute Resolution—Applicable Law

 

The Parties hereto shall attempt to settle any dispute arising out of or relating to this Agreement in an amicable way. In the event that such attempts should fail, then the Parties can take such actions as are available at law under the laws of the State of New York, United States of America, with venue for any such dispute being New York City, New York.

 

Article 20: Notices

 

Any notice required or permitted under this Agreement shall be made in writing either by registered mail or facsimile to the parties at their respective addresses first above written or as subsequently changed by notice duly given.

 

9



 

Notices by registered mail are deemed to be given after three (3) days of mailing. Notices by facsimile shall be deemed to be given one day after the date on which such notice has been given.

 

Article 21: Headings

 

The section headings in this Agreement are for convenience only and shall not in any way affect the meaning or interpretation of this Agreement.

 

IN WITNESS WHEREOF, JANSSEN and THERAVANCE have caused this instrument to be executed in duplicate by their respective duly authorised officers.

 

 

 

THERAVANCE, INC.

 

 

This 14th day of May, 2002

 

 

 

/s/ BRAD SHAFER

 

By

/s/ DAVID BRINKLEY

(title)

Brad Shafer

 

(title)

David Brinkley

 

Senior Vice President

 

 

Senior Vice President

 

General Counsel

 

 

Commercial Development

 

 

 

 

 

JANSSEN PHARMACEUTICA N.V.

 

 

This 14th day of May 2002

 

 

 

/s/ RIK CARLIER

 

/s/ GUY VERCAUTEREN

Rik Carlier

 

Guy Vercauteren

Licensing Director

 

International Vice President,

 

 

Business Development

 

10



 

EXHIBIT I

 

PATENTS

 

SCHEDULE A

 

Hydroxypropyl-ß-cyclodextrin patents (Müller)

 

[*]

 

Country

 

Type

 

Application
Number

 

Filing Date

 

Patent
Number

 

Grant Date

 

Expiry Date

 

Abandonment
Date

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

 

 

 

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

 

 

 

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

 

 

[*]

 

 

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]