EXECUTION COPY
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Agreement
among
ICN Pharmaceuticals, Inc.,
Ribapharm Inc.,
Hoffmann-La Roche Inc.
and
F. Hoffmann-La Roche Ltd
Dated as of January 6, 2003
TABLE OF CONTENTS
Page ARTICLE I Definitions and Interpretation..........................................................................1 ----------------------------------------
1.1 Definitions.................................................................................1
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1.2 Interpretation..............................................................................6
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ARTICLE II Grant of License.......................................................................................6 ---------------------------
2.1 License.....................................................................................6
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2.2 Limit of Grant..............................................................................6
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2.3 Schering Consent............................................................................6
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ARTICLE III Compensation..........................................................................................7 ------------------------
3.1 Royalties...................................................................................7
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3.2 Most Favored Licensee.......................................................................9
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3.3 Extent of Royalty Obligations..............................................................10
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3.4 Payment Terms..............................................................................11
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3.5 Taxes......................................................................................11
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3.6 Reports and Records........................................................................12
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3.7 Sales in Foreign Currencies................................................................13
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ARTICLE IV Resolution of Contested Proceedings and Release.......................................................13 ----------------------------------------------------------
4.1 United States Litigations..................................................................13
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4.2 European Litigations.......................................................................13
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4.3 Foreign Oppositions........................................................................14
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4.4 Mutual Releases............................................................................14
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ARTICLE V Representations, Warranties and Limitation of Liability................................................14 -----------------------------------------------------------------
5.1 Representations of Ribapharm and ICN.......................................................14
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5.2 Representations of Roche...................................................................15
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5.3 Mutual Representation and Warranty.........................................................16
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ARTICLE VI Indemnification and Insurance.........................................................................16 ----------------------------------------
6.1 Indemnification by Roche...................................................................16
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6.2 Indemnification by Ribapharm and ICN.......................................................16
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6.3 Obligations of the Party Seeking to Be Indemnified.........................................17
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6.4 Limits on Indemnification..................................................................17
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ARTICLE VII Publicity and Confidentiality........................................................................17 -----------------------------------------
7.1 Publicity and Confidentiality..............................................................17
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ARTICLE VIII Term and Termination................................................................................18 ---------------------------------
8.1 Term.......................................................................................18
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8.2 Termination................................................................................18
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8.3 Rights and Obligations Upon Termination or Expiration......................................19
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8.4 Surviving Provisions.......................................................................20
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ARTICLE IX Assignment; Successors................................................................................20 ---------------------------------
9.1 Assignment.................................................................................20
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9.2 Successors.................................................................................20
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ARTICLE X Dispute Resolution.....................................................................................21 ----------------------------
10.1 Arbitration................................................................................21
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10.2 Pre-Litigation Dispute Resolution..........................................................21
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10.3 Provisional Remedy.........................................................................21
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10.4 Royalty Dispute............................................................................21
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ARTICLE XI General Provisions....................................................................................22 -----------------------------
11.1 Relationship of the Parties................................................................22
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11.2 Excusable Delay............................................................................22
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11.3 Notices....................................................................................22
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11.4 Expenses...................................................................................23
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11.5 Further Assurances.........................................................................23
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11.6 Amendment..................................................................................24
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11.7 Waiver.....................................................................................24
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11.8 No Third Party Beneficiaries...............................................................24
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11.9 Entire Agreement...........................................................................24
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11.10 Construction...............................................................................24
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11.11 Counterparts...............................................................................24
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11.12 Severability...............................................................................24
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11.13 Joint and Several Liability of Roche.......................................................25
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11.14 Bankruptcy.................................................................................25
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11.15 Remedies Cumulative........................................................................25
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11.16 Governing Law..............................................................................25
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Appendices
A. Arbovirus Patent Rights B. Generic Lawsuits C. Th1/Th2 Patent Rights D. Additional Licensed Patents
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AGREEMENT
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This Agreement (Agreement) is made as of January 6, 2003 (the Effective Date) by and among (i) ICN Pharmaceuticals, Inc. (ICN) and Ribapharm Inc. (Ribapharm), each a Delaware corporation, and (ii) Hoffmann-La Roche Inc., a New Jersey corporation, and F. Hoffmann-La Roche Ltd, a Swiss corporation (individually and together, Roche).
Recitals
A. Ribapharm is the owner of patents in various countries which contain claims relating to certain pharmaceutical uses of ribavirin, an oral antiviral product.
B. Roche has developed an antiviral product containing ribavirin.
C. Ribapharm, ICN or both have filed suit and/or counterclaims against Roche in Europe and the United States contending that Roche's intended commercialization of its ribavirin product would infringe Ribapharm's patents relating to ribavirin.
D. Roche has filed suit, opposition proceedings and/or counterclaims against Ribapharm, ICN or both contending that Ribapharm's ribavirin patents are neither valid nor infringed by Roche's intended commercialization of ribavirin.
E. The Parties wish to obviate the need for such contested proceedings in favor of Ribapharm granting a non-exclusive license to Roche under Ribapharm's ribavirin patents.
Agreement
For consideration, the value, sufficiency, and receipt of which are hereby acknowledged, the Parties agree as follows.
ARTICLE I
Definitions and Interpretation
1.1 Definitions
In this Agreement, capitalized terms have the meanings set forth below.
Act means the Federal Food, Drug and Cosmetic Act (21 U.S.C.ss.301, et seq.), including all amendments or supplements.
Accounting Period means [REDACTED].
Adjusted Gross Sales means the amount of gross sales of Products (whether in active ingredient form, semi-finished form, finished product form, or otherwise) invoiced by Roche and by its Affiliates to Third Parties less deductions for returns and reasonably established return reserves (including allowances actually given for spoiled, damaged, out-dated, rejected, returned
Products sold, withdrawals, and recalls), rebates [REDACTED], volume (quantity) discounts, taxes (value added or sales taxes, government mandated exceptional taxes and other taxes imposed on the gross sales amount), as computed [REDACTED] in Swiss Francs [REDACTED], whereby the amount of such sales in foreign currencies is converted into Swiss Francs on the basis of the average monthly rate of exchange at the time in accordance with Roche's then current standard practices, which will be in accordance with IAS. Notwithstanding the foregoing, amounts received by Roche and its Affiliates for the sale of Products among Roche and its Affiliates for resale will not be included in the computation of Adjusted Gross Sales. [REDACTED].
Affiliate means any individual or entity directly or indirectly controlling, controlled by or under common control with, a Party. For the purposes of this Agreement, the direct or indirect ownership of fifty percent (50%) or more of the outstanding voting securities of an entity, or the right to receive fifty percent (50%) or more of the profits or earnings of an entity will be deemed to constitute control. Such other relationship as in fact results in actual control over the management, business and affairs of an entity will also be deemed to constitute control. Anything to the contrary notwithstanding, Genentech will not be considered an Affiliate of Roche.
Agreement has the meaning set forth in the preamble.
ANDA means an Abbreviated New Drug Application filed with the FDA for marketing approval for a drug pursuant to the Act and the Regulations.
Approval Authority means a governmental authority whose approval is required in a country for a Product Registration.
Arbovirus Patents means those patents and patent applications which are listed in Appendix A.
[REDACTED].
Bankruptcy Code means Title 11, U.S. Code.
Breaching Party has the meaning set forth in Section 8.2(a).
Business Day means a day when banks are open for business in New York City.
Claims has the meaning set forth in Section 6.1.
Combined Product means a pharmaceutical product consisting of or containing two or more active ingredients, one of which is the Licensed Compound and one or more of which is not, sold together for a single unit price.
Commercial Sale means, with respect to a Product in any country in the Territory, all sales by Roche or any of its Affiliates after Product Registration in such country which transfer to a Third Party purchaser physical possession and title to commercial quantities of the Product in such country.
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Effective Date has the meaning set forth in the preamble.
Effectively Commercially Available has the meaning set forth in Section 3.1(c).
Effective Royalty Rates has the meaning set forth in Section 3.2.
EPC Countries means the states which at the relevant time are members of the European Patent Convention.
FDA means the United States Food and Drug Administration, or any successor.
Field means the use of the Licensed Compound in combination therapy with PEG-IFN-alpha for the treatment of chronic hepatitis C.
Formula means the fraction [REDACTED] described in the definition of Net Sales.
Genentech means Genentech, Inc., of 1 DNA Way, South San Francisco, California 94080-4990, U.S.A.
Generic Lawsuits means individually and collectively those (i) certain federal district court actions filed by ICN and/or Ribapharm which are set forth in Appendix B, and (ii) any similar court actions in the United States with any Third Party which may arise in the future related to the Litigation Patents.
IAS has the meaning set forth in Section 3.6(d).
ICN has the meaning set forth in the preamble.
Indemnifying Party has the meaning set forth in Section 6.3.
Licensed Compound means oral ribavirin, having the chemical formula 1-(beta)-D-ribofuranosyl-1H-1,2,4-triazole-3-carboxamide. For the avoidance of doubt, oral ribavirin does not include prodrugs of ribavirin such as viramidine.
Licensed Patents means rights under patents and patent applications in the Field, as well as corresponding certificates of invention or certificates of protection, substitutes, extensions, provisionals, supplementary protection certificates, renewals, continuations, continuations-in-part, divisions, patents of addition (re-examination or re-issue), in any country of the Territory, which are owned by, or licensed to, Ribapharm and/or its Affiliates as of the Effective Date or during the term of this Agreement which relate to the use of the Licensed Compound in the Field. In particular, Licensed Patents shall include (i) the Arbovirus Patents, (ii) the Th1/Th2 Patents and (iii) those other patents and patent applications listed in Appendix D.
Litigation Patents means the Arbovirus Patents and the Th1/Th2 Patents, including any renewals, extensions, re-examinations or re-issues thereof.
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Medical Needs Programs means programs pursuant to which Product is provided free of charge or at a reduced price to patients who are not adequately covered by healthcare coverage in their country, [REDACTED].
Net Sales means the amount calculated by subtracting from the amount of Adjusted Gross Sales a lump sum deduction of [REDACTED] in lieu of those sales related deductions which are not accounted for on a product by product basis (e.g., outward freights, postage charges, transportation insurance, packaging materials for dispatch of goods, custom duties, bad debt, discounts granted later than at the time of invoicing, cash discounts and other direct sales expenses). Notwithstanding the foregoing, amounts received by Roche and its Affiliates for the sale of Products among Roche and its Affiliates for resale will not be included in the computation of Net Sales. If the Product is sold as a Combined Product, Net Sales for the Combined Product will be calculated by multiplying actual Net Sales of such Combined Product by the fraction [REDACTED], where A is the [REDACTED] of the Product sold separately by Roche or an Affiliate and containing the Licensed Compound [REDACTED] and B is the [REDACTED] of any other active component or components in the Combined Product sold separately by Roche or an Affiliate.
Non-Breaching Party has the meaning set forth in Section 8.2(a).
No-Sales Distributions has the meaning set forth in Section 3.3(c).
Party means each of ICN, Ribapharm and Roche.
PEG-IFN-alpha means any product containing the branched pegylated (40kDa) interferon alpha 2a that was used, on or before August 10, 2001, as the active ingredient in Roche's product referred to as PEGASYS. Without limiting the foregoing, PEG-IFN-alpha includes variations in the composition of the product due to minor changes in manufacturing that are approved by governmental regulatory authorities for such product. Examples of such minor changes in manufacturing are (i) adjustment of excipients, pH, electrolytes, or preservatives, or use of new raw materials such that the raw materials do not lead or result in chemical changes to or chemical modifications of the PEG, linker or interferon alpha portion of the active ingredient, (ii) starting materials or intermediates that do not chemically change the PEG, linker or interferon alpha portion of the active ingredient, (iii) other manufacturing variations that result from the need to accommodate new sources of raw materials or manufacturing methods, or (iv) changes in the average number of PEG units and/or their location of attachment on the interferon alpha portion based on batch to batch variations or manufacturing site to manufacturing site variations and such that the manufacturing modifications are not chemical changes to or chemical modifications of the PEG, linker or interferon alpha portion of the active ingredient. Examples of changes that are not minor manufacturing modifications are any chemical changes to or chemical modifications of the PEG, linker or interferon alpha portion of the active ingredient.
Product means any pharmaceutical product consisting of or containing the Licensed Compound which is promoted and sold for use in combination with PEG-IFN-alpha, including without limitation a Combined Product.
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Product Registrations means any and all government approvals required by any government or regulatory authority in the Territory necessary to permit the development, manufacture, marketing, importing, use, or sale of a pharmaceutical product in any part of the Territory.
Regulations means the regulations made under the Act, as amended or supplemented.
Ribapharm has the meaning set forth in the preamble.
Roche has the meaning set forth in the preamble.
ROW Countries has the meaning set forth in Section 3.1(c).
Schering Consent has the meaning set forth in Section 2.3.
Schering License means the Exclusive License and Supply Agreement between Ribapharm and Schering-Plough Ltd. made as of July 28, 1995, as may be amended.
Successful European Appeal means a decision of the Technical Board of Appeals of the European Patent Office [REDACTED] holding that at least one Valid Claim of Ribapharm's patents in the European opposition is valid and otherwise enforceable.
Successful Japanese Appeal means a decision of a court beyond the right of further review [REDACTED] holding that at least one claim of Ribapharm's involved patents is valid and otherwise enforceable.
Successful US Appeal means a decision of a court on appeal [REDACTED] holding that at least one claim of Ribapharm's patents in suit is valid and otherwise enforceable (including infringed) against the Third Party's oral ribavirin product involved in the decision.
Term means the term of this Agreement, as set forth in Section 8.1.
Territory means all countries of the world and their territories and possessions.
Th1/Th2 Patents means those patents and patent applications which are listed in Appendix C.
Third Party means any person other than ICN, Ribapharm, Roche, and each of their respective Affiliates.
United States means the United States of America and its territories and possessions.
Unlicensed Third Party Sales means the sale of an oral ribavirin product within the Field by a Third Party without a license from Ribapharm. For the avoidance of doubt, Unlicensed Third Party Sales do not include sales pursuant to the Schering License or sales by Genentech and its affiliates.
Valid Claim means a claim of an issued and unexpired patent in a country in the Territory which is included within the Litigation Patents, and which (i) has not been finally revoked or
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held unenforceable or invalid by a decision of a court of last resort or other governmental agency of competent and final jurisdiction, (ii) has not been abandoned, disclaimed, dedicated to the public or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, and (iii) has not been finally construed or otherwise expressly limited by a court of last resort or other governmental agency of competent and final jurisdiction so as to not cover the anti-viral use for which Roche has then received regulatory approval to sell its oral ribavirin.
1.2 Interpretation
In this Agreement, unless the context requires otherwise
(a) the singular includes the plural and vice versa;
(b) words denoting persons include corporations, partnerships, and other legal entities;
(c) a reference to a specified section, paragraph, or schedule is a reference to that specified section, paragraph, or schedule of this Agreement;
(d) the article and section headings and the Table of Contents are for convenience only, are not part of this Agreement, and do not affect the interpretation or enforcement of this Agreement;
(e) "including" means including without limitation; and
(f) a reference to a Party includes its successors and permitted assigns.
ARTICLE II
Grant of License
2.1 License
Ribapharm grants to Roche and its Affiliates, and Roche accepts on behalf of itself and its Affiliates, a non-exclusive, non-transferable and non-sublicensable right and license under the Licensed Patents within the Field throughout the Territory to make, have made, use, sell and distribute Products.
2.2 Limit of Grant
Roche has no right or license with respect to the Licensed Patents except as expressly granted in this Agreement.
2.3 Schering Consent
Ribapharm represents and warrants to Roche that ICN has previously exclusively licensed the Licensed Patents for use within the Field throughout the Territory to Schering Plough Ltd. pursuant to the Schering License and that the rights and obligations of ICN under the
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Schering License have been assigned to and assumed by Ribapharm with the consent of Schering-Plough Ltd. pursuant to a letter agreement dated March 8, 2002 between ICN, Schering-Plough Ltd. and Ribapharm. Roche represents and warrants to Ribapharm and ICN that by a Settlement and License Agreement dated August 10, 2001 by and between Roche and Schering Corporation, an affiliate of Schering Plough Ltd., Schering Corporation agreed to waive so much of its exclusivity under the Licensed Patents as to allow ICN and Roche to enter into a license to commercialize Roche's PEG-IFN-alpha product in combination therapy with the Licensed Compound, and further agreed that upon written notice to Schering Corporation, Schering Corporation would consent to and modify Schering-Plough Ltd.'s exclusive rights under the Schering License to allow for the grant of such a license to Roche without requiring consideration from ICN to Schering Plough Ltd. (the Schering Consent). To the best of each Party's information and belief, the Schering Consent is the only consent that may be required from Schering Plough Ltd. to enable each of the Parties to enter into and perform this Agreement. The Parties shall cooperate to promptly obtain the Schering Consent in writing.
ARTICLE III
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