Exhibit
10.1
EXECUTION
COPY
DUPUYTREN’S
DISEASE LICENSE AGREEMENT
This
DUPUYTREN’S DISEASE LICENSE AGREEMENT (the “
Agreement
”),
effective as of November 21, 2006 (the “
Effective
Date
”),
is
entered into by and between BioSpecifics Technologies Corp., a corporation
organized and existing under the laws of Delaware (“
BTC
”),
and
the Research Foundation of the State University of New York for and on behalf
of
Stony Brook University, a nonprofit, educational corporation organized and
existing under the laws of New York (the “
Research
Foundation
”).
BTC
and the Research Foundation shall sometimes be referred to herein individually
as a “
Party
”
and
collectively as “
Parties
.”
RECITALS
WHEREAS,
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AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
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COMMISSION>
WHEREAS,
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AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
,
the
Research Foundation now wishes to license the Licensed Know-How to BTC, and
BTC
wishes to license the Licensed Know-How from the Research
Foundation,
on the terms and conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of the mutual promises, covenants and agreements
set
forth below, the Parties agree as follows:
ARTICLE
I.
DEFINITIONS
For
the
purposes of this Agreement, the following capitalized words and phrases, whether
used in the singular or plural, shall have the following meanings:
1.1
“
Affiliate
”
means
any corporation or other business entity controlled by, controlling, or under
common control with another entity, with “control” meaning direct or indirect
beneficial ownership of more than 50% (or such lesser percent provided that
ownership is accompanied by the power to direct the management or policies
of
the entity) of (a) the voting stock in the case of a corporation, or (b) the
profits interest or decision-making authority in the case of an unincorporated
business entity.
1.2
“
Auxilium
”
means
Auxilium Pharmaceuticals, Inc., a corporation organized and existing under
the
laws of Delaware.
1.3
“
Auxilium
License Agreement
”
means
the agreement dated as of June 3, 2004 by and between BTC and Auxilium, as
amended on May 6, 2005 and as may be subsequently amended from time to time,
by
which BTC granted to Auxilium certain licenses, as defined therein.
1.4
“
BTC
Patents
”
has
the
meaning set forth above in the recitals.
1.5
“
Combination
Product
”
means
any product containing both an agent or ingredient which constitutes a Licensed
Product and one or more other active agents or ingredients which do not
constitute Licensed Products.
1.6
“
Development
Program
”
means
the clinical studies previously performed by B&H with injectable collagenase
pertaining to Dupuytren’s disease, as described more fully in Article II hereof.
1.7
“
EMEA
”
means
the European Medicines Evaluation Agency, which coordinates the scientific
review of human pharmaceutical products under the centralized licensing
procedure of the European Community, and includes any successor
agency.
1.8
“
Enzyme
”
means
an enzyme constituted of collagenase obtained by fermentation of
Clostridium
histolyticum,
purified
by chromatography, lyophilized and substantially free from other proteinases,
and any variants or derivatives thereof.
1.9
“
European
Union
“
or
“EU”
means the countries of the European Union (or its successor) as constituted
on
the Effective Date and future members of the European Union upon their admission
for full membership with commercial rights and privileges.
1.10
“
FDA
”
has
the
meaning set forth above in the recitals.
1.11
“
Field
”
means
the prevention or treatment of Dupuytren’s disease.
1.12
“
First
Commercial Sale
”
means
(a) the date of first sale following FDA or other regulatory approval of the
NDA, MAA (as defined below) or equivalent marketing license application filed
for a Licensed Product in any country, or (b) if regulatory approval is not
required the first commercial sale of a Licensed Product in either case, to
an
independent party not an Affiliate, Sublicensee or subagent of the seller.
1.13
“
Information
”
means
(a) techniques, technology, practices, methods, procedures, inventions,
discoveries, knowledge, know-how, trade secrets, skill, experience, gene or
protein sequences, technical data, test data, analytical and quality control
data, formulas or software programs, and (b) all compounds, compositions of
matter, cells, cell lines, assays, and all other biological or chemical
materials and samples.
1.14
“
Joint
Inventions
”
means
any inventions in the Field, whether patentable or not, which are jointly
conceived, discovered, developed or otherwise made, during the Development
Program by at least one BTC employee or person contractually required to assign
or license the intellectual property rights covering such inventions to BTC
and
at least one Stony Brook employee or person contractually required by virtue
of
New York state law to assign or license the intellectual property rights
covering such inventions to the Research Foundation.
1.15
“
Licensed
Know-How
”
means
(i) any proprietary Information or materials related to the manufacture,
preparation, formulation, use or development of the Enzyme, the Licensed
Products or injectable collagenase pertaining to Dupuytren’s disease and shall
include formulations, processes, techniques, formulas, biological, chemical,
assay control and manufacturing, technical, pre-clinical, clinical or other
data, methods, know-how, and trade secrets; (ii) all Information, not generally
known, which is owned by the Research Foundation or is rightfully held with
right to sublicense as of the Effective Date, or which was developed,
discovered, conceived, reduced to practice, or acquired by the Research
Foundation or by B&H and assigned by B&H to the Research Foundation as a
result of the Development Program and which (a) relates to the Licensed Products
or (b) relates to the methods, processes or techniques for the manufacture
or
use of the Licensed Products or (c) relates to injectable collagenase pertaining
to Dupuytren’s disease and (iii) any Joint Inventions.
1.16
“
Licensed
Products
”
means
pharmaceutical products containing Enzyme as an active ingredient and any
reformulation, improvement, enhancement, combination, refinement, or
modification thereof, which are made, used and sold in the Field; provided
however, the Licensed Products shall specifically exclude dermal formulations
labeled for topical administration.
1.17
“
MAA
”
means
a
Marketing Authorization Application filed with the EMEA.
1.18
“
NDA
”
means
a
New Drug Application, Biologics License Application or a Product License
Application filed with the FDA.
1.19
“
Net
Sales
”
means
(a)
with
respect to sales of Licensed Products by BTC or its Affiliates, the gross sales
price actually received less the following items to the extent they are paid
and
included in the invoice price:
|
(i)
|
customary
trade discounts actually allowed;
|
|
(ii)
|
packing,
freight, and insurance costs;
|
|
(iii)
|
sales,
use, value-added and excise taxes;
|
|
(iv)
|
import,
export and customs duties and
taxes;
|
|
(v)
|
credit
for returns, allowances or trades actually allowed;
and
|
|
(vi)
|
government
mandated rebates, if any; and
|
(b)
with
respect to sales of Licensed Products by a Sublicensee (as defined below),
the
net sales price as required to be reported to BTC by the Sublicensee pursuant
to
the written sublicense agreement between them.
Sales
by
BTC, its Affiliates and Sublicensees to resellers or others for further
formulation, processing, repackaging or relabeling shall be excluded, and only
the subsequent resale to independent customers shall be deemed Net Sales.
In
the
case of Combination Products for which the agent or ingredient constituting
a
Licensed Product and each of the other active agents or ingredients not
constituting a Licensed Product have established market prices when sold
separately, Net Sales shall be determined by multiplying the Net Sales for
each
such Combination Product by a fraction, the numerator of which shall be the
established market price for the Licensed Products contained in the Combination
Product and the denominator of which shall be the sum of the established market
prices for the Licensed Products plus the other active agents or ingredients
contained in the Combination Product. When separate market prices are not
established, then the Parties shall negotiate in good faith to determine a
fair
and equitable method of calculating Net Sales for the Combination Product in
question, taking into account factors such as relative cost and relative
therapeutic or diagnostic contribution.
1.20
“
Orphan
Drug Designation
”
means
the special designation of Licensed Product(s) by FDA’s Orphan Product Division
which provides the Licensed Product(s) with the opportunity to obtain additional
market exclusivity from the date the drug receives FDA approval and also
possible tax and regulatory approval benefits. The term “Orphan Drug
Designation” shall include any foreign counterparts of the foregoing.
1.21
“
Sublicensee
”
means
Auxilium or any person or entity who receives in the future a sublicense from
BTC pursuant to Article III hereof.
1.22
“
Territory
”
means
all countries of the world.
ARTICLE
II.
DEVELOPMENT
PROGRAM
2.1
Development
Program
.
Pursuant to the Royalty Agreement and certain other prior agreements, which
are
being terminated contemporaneously herewith, B & H, individually or
collectively together with other Stony Brook employees, performed certain
pre-clinical, clinical, regulatory, process development and manufacturing work
related to injectable collagenase pertaining to Dupuytren’s
disease.
2.2
FDA
Letters.
The
Research Foundation consents to, and otherwise ratifies, the action previously
taken by B&H pursuant to the Royalty Agreement in executing and delivering
the FDA Letters.
ARTICLE
III.
LICENSE
GRANT
3.1
License
Grant.
The
Research Foundation hereby grants to BTC and its Affiliates a worldwide
exclusive license for the Licensed Know-How in the Field. The Research
Foundation further grants to BTC and its Affiliates a worldwide exclusive
license to use the Licensed Know-How to make, use and sell in any manner
Licensed Products in the Field, except to the extent that BTC, its Affiliates
or
Sublicensees enters into a material transfer agreement, clinical trial agreement
or any similar agreement that allows the Research Foundation to do research
or
clinical development.
3.2
Sublicenses.
(a)
BTC
shall
be entitled to grant sublicenses of its rights hereunder, provided that any
Net
Sales of Licensed Products by a BTC Sublicensee shall be deemed to be Net Sales
of BTC for purposes of royalty payments due hereunder, and BTC shall remain
obligated to pay all royalties due with respect to Licensed Products sold by
any
Sublicensee. If BTC shall grant any sublicenses in addition to the Auxilium
License Agreement under this Agreement, then it shall obtain the written
commitment of such additional Sublicensees to abide by all applicable terms
and
conditions of this Agreement and BTC shall remain fully responsible to the
Research Foundation for the performance of all such terms by such additional
Sublicensees. Upon the termination of this Agreement, each additional
Sublicensee shall have the option to convert its sublicense to a direct license
with the Research Foundation on the same terms as in the sublicense
agreement.
(b)
The
Research Foundation hereby acknowledges and consents to the sublicense that
BTC
has previously granted to Auxilium pursuant to the Auxilium License Agreement
in
respect of the Licensed Products.
3.3
Subagents.
It is
agreed that BTC has the right to take the following actions, none of which
shall
constitute a sublicense hereunder and none of which shall be subject to Section
3.2 herein:
(a)
appointing
an agent or distributor to market, sell or otherwise dispose of Licensed
Products; and
(b)
subcontracting
the development, manufacture or packaging of Licensed Products.
3.4
Term.
The term
of said license will continue in effect for as long as the Licensed Products
are
sold.
3.5
<OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION>
ARTICLE
IV.
ROYALTIES
4.1
Royalties.
Commencing with the First Commercial Sale, BTC will pay running royalties on
Net
Sales of Licensed Products by BTC and its Affiliates and Sublicensees on a
country-by-country basis.
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
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4.2
Royalty
Period.
The
royalty obligations of BTC shall commence upon the date of the First Commercial
Sale and continue for the longer of (i) the last to expire valid claim of a
patent covering the Licensed Product, (ii) the expiration of the regulatory
exclusivity period conveyed by Orphan Drug Designation with respect to the
Licensed Product or (iii) June 3, 2016.
4.3
Currency;
Conversion; Taxes.
Royalty
payments shall be paid in U.S. Dollars at the address of the Research Foundation
set forth in Section 10.6 below, or such other place as the Research Foundation
may reasonably designate in writing, consistent with applicable laws and
regulations. Any taxes which BTC or its Affiliates or Sublicensees shall be
required by law to withhold or pay upon remittance of the royalty payments
shall
be deducted from the royalty payable to the Research Foundation and paid on
its
behalf as required. BTC shall furnish the original of any official receipts
for
such taxes. If any currency conversion shall be required in connection with
the
payment of royalties hereunder, such conversion shall be made by using the
average of the daily exchange rates for such currency quoted by the Wall Street
Journal’s (New York edition) foreign exchange desk for each of the last three
(3) banking days of each calendar quarter, or, in the case of sales by
Sublicensees, using the exchange rates provided for in the written agreements
between BTC and such Sublicensees.
4.4
Currency
Transfer Restrictions.
If in
any country in the Territory the payment or transfer of royalties on Net Sales
in such country is prohibited by law or regulation, BTC shall notify the
Research Foundation of the conditions preventing such
transfer,
and shall deposit the blocked payments in local currency in a recognized banking
institution in the relevant country for the credit of the Research Foundation.
4.5
Payments
by Others.
With
respect to any sales of Licensed Products by BTC, its Affiliates or
Sublicensees, BTC shall have the right to cause any Affiliate, Sublicensee
or
other designee to make direct payment to the Research Foundation of the
royalties otherwise due for such sales. The Research Foundation shall accept
such payments and the amount of royalties to be paid by BTC shall be reduced
by
the amount of such payments actually received by the Research Foundation.
ARTICLE
V.
REPORTS,
PAYMENTS AND ACCOUNTING
5.1
Royalty
Reports and Payments.
BTC
agrees to make written reports and royalty payments to the Research Foundation
within 90 days after the close of each calendar quarter during the term of
this
Agreement, beginning with the quarter in which the First Commercial Sale occurs.
These reports shall show for the calendar quarter in question all Net Sales
of
Licensed Products and the royalty due thereon, together with the same
information for Licensed Products sold by Affiliates and Sublicensees (if
applicable). With respect to sales of Licensed Products by Sublicensees, reports
need only include information reflected in the reports required by Section
5.4
below which are actually received during the calendar quarter in question.
Concurrently with the making of each report, BTC shall remit any royalty payment
due for the period covered by the report. BTC will make a good faith attempt,
using commercially reasonable biotech industry practices, to differentiate
between Net Sales of Licensed Products and sales of similar products outside
of
the Field in calculating the amount of the royalty due hereunder to the Research
Foundation. Absent manifest error, BTC’s good faith differentiation shall be
binding and conclusive on the Parties.
5.2
Termination
Report.
Within
ninety (90) days after the date on which BTC and its Affiliates and Sublicensees
last sell any Licensed Products, BTC shall make a final termination report
containing the same quarterly information required above.
5.3
Accounting.
BTC
agrees to keep written or digitally stored records for a period of three (3)
years from the end of each reporting period in sufficient detail to enable
the
royalties payable to be determined, and further agrees to permit its books
and
records to be examined during normal business hours by an independent accounting
firm, selected by the Research Foundation and reasonably satisfactory to BTC,
from time-to-time on reasonable notice, but not more often than once per year.
Such examination must be made confidentially and the auditing firm shall be
required to enter into reasonable confidentiality agreements. The expense of
such examination shall be borne by the Research Foundation except that in the
event the results of the audit reveal a discrepancy in the Research Foundation’s
favor of 10% or more, then reasonable out-of-pocket audit fees shall be paid
by
BTC. Any discrepancy will be promptly corrected by a payment or refund, as
appropriate.
5.4
Third
Party Reports.
BTC
agrees to require, as a term of any sublicense agreement, that the Sublicensee
shall render written reports to BTC of Net Sales of Licensed Products no less
frequently than twice per year and in sufficient detail to enable the royalties
payable by BTC hereunder to be determined (“
Third
Party Reports
”).
BTC
shall also require Sublicensees to keep records concerning Net Sales for a
period of at least three (3) years, and to permit reasonable examination of
such
records by an independent accounting firm selected by BTC. Notwithstanding
the
foregoing, nothing in this Agreement shall be construed as enlarging, or
requiring BTC to modify, Auxilium’s, its Affiliate’s or its Sublicensee’s
existing reporting and record keeping obligations pursuant to the Auxilium
License Agreement.
5.5
Confidentiality
of Reports.
The
Research Foundation agrees that the information set forth in (a) the reports
required by Sections 5.1 and 5.2, (b) the records subject to examination under
Section 5.3, and (c) all Third Party Reports, shall be maintained in confidence
by the Research Foundation and any independent accounting firm selected under
Section 5.3, shall not be used for any purpose other than verification of the
performance by BTC of its obligations hereunder, and shall not be disclosed
by
the Research Foundation or such accounting firm to any other
person.
ARTICLE
VI.
WARRANTIES;
DISCLAIMED WARRANTIES; INDEMNIFICATION
6.1
Title;
Authority.
The
Research Foundation represents and warrants that B&H, by virtue of New York
state law, have assigned to the Research Foundation all of the rights pertaining
to the Licensed Know-How licensed to BTC hereunder and that therefore the
Research Foundation has the full unrestricted legal right to enter into this
Agreement and to grant the licenses granted hereunder.
6.2
No
Other Licenses Granted
.
The
Research Foundation represents and warrants that it has not granted any license
pertaining to the Licensed Know-How to any party other than to BTC pursuant
to
this Agreement. In addition, after reasonable investigation, the Research
Foundation to the best of its knowledge is not aware that B&H have granted
any license pertaining to the Licensed Know-How to any other party.
6.3
No
Known Infringement.
As of
the Effective Date, the Research Foundation has not received any notice of
infringement of or conflict with any patent, trade secret, copyright, trademark
or other intellectual property right of any other person with respect to the
Licensed Know-How.
6.4
No
Warranty of Non-Infringement.
Nothing
in this Agreement shall be construed as a warranty or representation that any
Licensed Products made, used or sold pursuant to any license granted hereunder
is or will be free from infringement of patents, copyrights, trademarks, trade
secrets or other intellectual property rights of third parties.
6.5
Indemnification
by Research Foundation.
Notwithstanding the absence of any warranty of non-infringement, the Research
Foundation shall, during the term of this Agreement and thereafter, indemnify
and hold harmless BTC, its Affiliates, Sublicensees
and
its
and their directors, officers, agents and employees, from any losses, damages,
expenses and liabilities of any kind (including legal expenses and reasonable
attorneys’ fees and costs ) resulting from the Research Foundation’s gross
negligence or willful misconduct in connection with:
(a)
the
action or inaction of the Research Foundation, its Affiliates or B&H; or
(b)
any
breach of this Agreement by the Research Foundation or its Affiliates.
6.6
Indemnification
by BTC.
BTC
shall, during the term of this Agreement and thereafter, indemnify and hold
harmless the Research Foundation and its Affiliates and its and their directors,
officers, agents and employees, from any losses, damages, expenses, and
liability of any kind whatsoever (including legal expenses and reasonable
attorneys’ fees and costs) resulting from BTC’s (and its Affiliates’ and
Sublicensees’) gross negligence or willful misconduct in connection with the
manufacture, use, testing, sale or advertisement of Licensed Products; provided,
however, that in no case will the foregoing indemnity obligation apply to the
extent that such claim, proceeding, loss, expense, or liability is the result
of:
(a)
any
action or inaction of the Research Foundation or its Affiliates, or its or
their
agents; or
(b)
any
alleged or actual infringement by the Licensed Know-How of any patents,
copyrights, trademarks, trade secrets or other intellectual property rights
of
third parties; or
(c)
any
breach of this Agreement by the Research Foundation.
ARTICLE
VII.
TERM
AND TERMINATION
7.1
Term.
Unless
earlier terminated in accordance with this Article VII, this Agreement and
the
licenses granted hereunder shall continue in effect until the termination of
BTC’s royalty obligations. Thereafter, all licenses granted shall become fully
paid-up, irrevocable exclusive licenses.
7.2
Termination
by the Research Foundation for Default.
The
Research Foundation may terminate this Agreement if BTC commits any material
default of any of BTC’s material obligations, by notice to BTC specifying in
reasonable detail the nature of the default, provided that such default has
not
been remedied within 90 days of such notice.
7.3
Termination
by BTC.
BTC may
terminate this Agreement (a) on 30 days’ notice to the Research Foundation if
BTC elects to cease utilizing all license rights granted hereunder; (b) if
the
Research Foundation or any of its Affiliates is in material default of any
of
the Research Foundation’s material obligations or covenants, which
default
has not been remedied within 90 days’ of notice to the Research Foundation
specifying in reasonable detail the nature of the default.
7.4
Termination
for Bankruptcy.
If
voluntary or involuntary proceedings in bankruptcy by or against the Research
Foundation are instituted under any insolvency law, or a receiver or custodian
is appointed for the Research Foundation, or proceedings are instituted by
or
against the Research Foundation for corporate reorganization or dissolution,
which proceedings shall not have been dismissed within 60 days after the date
of
filing, or if the Research Foundation makes an assignment for the benefit of
creditors, or substantially all of the assets of the Research Foundation are
seized or attached and not released within 60 days thereafter, BTC may
immediately terminate this Agreement by notice to the Research Foundation.
However, in the event that BTC elects not to terminate the Agreement, the
Parties intend that the rights and licenses granted under this Agreement shall
be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code
(or
any equivalent provision of applicable foreign law), licenses or rights to
“intellectual property” as defined under Section 101(52) of the U.S. Bankruptcy
Code. BTC, as a licensee of such rights under this Agreement, shall retain
and
may fully exercise all of its rights and elections under the U.S. Bankruptcy
Code, subject to performance by the Research Foundation or its successor of
its
preexisting obligations under this Agreement.
7.5
Rights
and Obligations Upon Termination.
Following termination of this Agreement for any reason, nothing herein shall
be
construed to release either Party from any obligation that arose prior to the
date of such termination. After termination, BTC and its Affiliates and
Sublicensees may complete Licensed Products in the process of manufacture at
the
date of termination and sell them along with any other Licensed Products in
inventory, provided that BTC shall pay royalties as required by Article IV
and
shall submit the reports required by Article V for such Licensed Products.
7.6
Return
of Confidential Information.
Upon
termination of this Agreement, BTC shall return or destroy all Licensed Know-How
that is written, to the Research Foundation, provided that BTC may retain one
copy of all written materials for legal and archival purposes only.
ARTICLE
VIII.
CONFIDENTIALITY,
DISCLOSURE, AND PUBLICATIONS
8.1
Confidentiality
.
(a)
During
the term of this Agreement and for a period of five (5) years following its
expiration or termination, each Party shall maintain in confidence all
Information disclosed by the other Party which is marked or identified as
confidential or which the receiving Party has reason to know is confidential
or
proprietary (referred to herein as “
Confidential
Information
“),
and
shall not disclose Confidential Information to anyone except those Affiliates,
Sublicensees, employees, subagents, consultants, or subcontractors having a
“need to know” in order to carry out the receiving Party‘s activities as
contemplated by this Agreement. Each receiving Party shall obtain
written
agreements
from its Affiliates, Sublicensees, employees, subagents, consultants or
subcontractors, prior to disclosure to them of Confidential Information,
obligating them to hold in confidence and not use any Confidential Information
except as permitted by this Agreement. Notwithstanding the foregoing sentence,
if employees or consultants of a receiving Party have previously signed general
confidentiality agreements in favor the receiving Party as employer, and if
those agreements bind the employees or consultants to protect Information
disclosed hereunder to at least the same extent required by this Section ,
then
it shall be sufficient for the employing Party to (i) notify the employees
or
consultants of the fact that Information disclosed hereunder is governed by
such
confidentiality agreements and (ii) identify to such employees or consultants
the specific Information so governed. Each Party shall use the same degree
of
effort used to protect its own most valuable proprietary Information from
unauthorized use or disclosure, and shall be responsible for ensuring compliance
with these obligations by its Affiliates, Sublicensees, employees, subagents,
consultants and subcontractors. Each Party shall promptly notify the other
upon
discovery of any unauthorized use or disclosure of the other’s Confidential
Information.
(b)
The
receiving Party shall not use Confidential Information for any purpose,
including for the development of products in the Field, except as specifically
permitted by this Agreement.
8.2
Exceptions.
The
obligation of confidentiality and non-use in this Article shall not apply to
the
extent that:
(a)
either
Party (the “
Recipient
”)
is
required to disclose Confidential Information by law, order or regulation of
a
governmental agency or a court of competent jurisdiction, or
(b)
the
Recipient can demonstrate that (i) the disclosed Information was, at the time
of
disclosure to the Recipient, already in the public domain or which, after
disclosure, becomes part of the public domain other than as a result of action
of the Recipient, its Affiliates, Sublicensees, employees, subagents,
consultants or subcontractors in violation hereof; (ii) the Recipient can
demonstrate that the disclosed Information was rightfully known or independently
developed by the Recipient or its Affiliates prior to the date of disclosure
to
the Recipient, or (iii) the disclosed Information was received by the Recipient
or its Affiliates on an unrestricted basis from a source unrelated to any Party
to this Agreement and not under a duty of confidentiality to the other Party
or
(c)
the
disclosure is made to the FDA, EMEA or other regulatory agency as part of a
product approval process.
8.3
Legally
Compelled Information.
In the
event that either Party becomes legally compelled to disclose any Confidential
Information belonging to the other Party, it shall notify the other Party prior
to disclosure so that the other Party can seek a protective order or other
appropriate remedy.
8.4
Publications.
Prior to
public disclosure of or submission for publication of an abstract, manuscript
or
oral presentation describing the results of any aspect of the Development
Program or other scientific activity between BTC and the Research Foundation,
the Party disclosing or submitting such abstract, manuscript or oral
presentation (“
Disclosing
Party
”)
shall
send the other Party (“
Responding
Party
”)
by a
recognized delivery service for next day delivery a copy of the abstract,
manuscript or oral presentation materials to be submitted. The Responding Party
shall have 30 days, in the case of an abstract or oral presentation materials,
or 60 days, in the case of a manuscript, from the date of receipt of the
abstract, manuscript or oral presentation materials. If the Responding Party
believes the subject matter of such abstract, manuscript or oral presentation
contains Confidential Information or a patentable invention of significant
commercial value to the Responding Party, then prior to the expiration of the
relevant period, the Responding Party shall notify the Disclosing Party in
writing of its determination and the basis for its conclusion. Upon receipt
of
such notice, the Disclosing Party shall delay public disclosure of or submission
of abstract, manuscript or oral presentation for an additional period of 60
days
to permit preparation and filing of a patent application on the disclosed
subject matter. No publication or presentation shall be made by the Disclosing
Party unless and until the Responding Party’s comments have been addressed and
any information determined by the Responding Party to be Confidential
Information of the Responding Party has been removed. Determination of
authorship for any paper or inventorship for any patent shall be in accordance
with accepted scientific practice or patent law, as appropriate. Should any
questions of authorship or inventorship arise, they will be determined by good
faith consultation between the senior management of the respective Parties.
ARTICLE
IX.
DISPUTE
RESOLUTION; ARBITRATION
9.1
Exclusive
Remedy.
The
Parties agree that the terms of this Article shall be the exclusive means of
resolving any dispute, controversy or claim (a “
Dispute
”)
arising out of or relating to this Agreement, except that either Party may
seek
injunctive relief or other provisional remedies from a court of competent
jurisdiction if necessary to protect such Party’s name, intellectual property
rights, or to prevent irreparable harm.
9.2
Good
Faith Negotiations.
In the
event of any Dispute arising out of or relating to or in connection with any
provision of the Agreement, or the rights or obligations hereunder, the Parties
shall try to settle their differences amicably between themselves. Either Party
may initiate such informal dispute resolution by sending written notice of
the
dispute to the other Party, and within ten (10) business days after such notice
appropriate representatives of the Parties shall meet for attempted resolutions
by good faith negotiations. If such representatives are unable to resolve such
disputed matters, they shall be referred to the senior management of the
respective Parties, for discussion and resolution. If they are unable to resolve
the dispute within thirty (30) days (or such longer period of time as the
Parties may agree to in writing) of initiating such negotiations, then the
Parties must resort to binding arbitration, as set forth in Section 9.3 below.
9.3
Binding
Arbitration.
Any
Dispute not so resolved shall be submitted, by a written notice of request
to
arbitrate given by either Party, to final and binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association
(“
AAA
”)
then
in force except as modified in accordance with the provisions of this Section.
The arbitration proceedings shall be held in the City of New York in New York
State.
9.4
Arbitrators.
The
arbitral tribunal shall be composed of three arbitrators, one appointed by
each
Party within 15 days, and the two arbitrators so appointed shall, within 15
days
of their appointment, appoint a third arbitrator who shall act as Chairman
of
the tribunal. If the Dispute involves scientific or technical matters, at least
2 of the 3 arbitrators chosen shall have educational training and/or experience
sufficient to demonstrate a reasonable level of knowledge in the field of
biotechnology.
9.5
Procedures
.
(a)
Prompt
resolution of any Dispute is important to both Parties; and the Parties agree
that the arbitration of any Dispute shall be conducted expeditiously. The
arbitrators shall be instructed and directed to assume management initiative
and
control over the arbitration process (including scheduling of events,
pre-hearing discovery and activities, and the conduct of the hearing), in order
to complete the arbitration as expeditiously as is reasonably practical for
obtaining a just resolution of the Dispute. The arbitrators shall be directed
that any arbitration shall be completed within 1 year from the filing of notice
of a request for such arbitration.
(b)
The
arbitrators shall determine what discovery shall be permitted, consistent with
the goal of limiting the cost and time which the Parties must expend for
discovery; provided that the arbitrators shall permit such discovery as they
deem necessary to permit an equitable resolution of the Dispute.
(c)
In
arriving at decisions, the arbitrators shall apply the terms and conditions
of
this Agreement in accordance with the rules of law governing it in accordance
with Section 10.4. The arbitrators are empowered to render the following awards
in accordance with any provision of this Agreement: (i) enjoining a Party from
performing any act prohibited, or compelling a Party to perform any act
required, by the terms of this Agreement or any related agreement, and (ii)
ordering such other legal or equitable relief, including any provisional legal
or equitable relief, or specifying such procedures as the arbitrator deems
appropriate, to resolve any Dispute submitted for arbitration. Any monetary
award made and shall be payable in U.S. Dollars free of any tax or any
deduction. The arbitrators shall issue to both Parties a written explanation
in
English of the reasons for the award and a full statement of the facts as found
and the rules of law applied in reaching the decision. An award rendered in
connection with an arbitration pursuant to this Article shall be the sole,
exclusive, final and binding remedy between the Parties regarding the Dispute
and any counterclaims made, and judgment upon any award may be entered and
enforced in any court of competent jurisdiction.
9.6
Expenses.
The
award rendered by the arbitrators shall include the costs of arbitration,
arbitrator fees, reasonable attorneys’ fees and reasonable costs for expert and
other witnesses.
9.7
Confidentiality
of Proceedings.
The
arbitration proceedings shall not be made public without the joint consent
of
the Parties, and each Party shall maintain the confidentiality of such
proceedings and decision unless otherwise required by law or permitted in
writing by the other Party.
ARTICLE
X.
MISCELLANEOUS
PROVISIONS
10.1
Indemnification
Procedures.
In the
event either Party seeks indemnification under any provision for indemnification
afforded by this Agreement, the following procedures shall be
followed:
(a)
Notice
of Claim
.
The
Party seeking indemnification (the “
Indemnitee
”)
shall
give the other Party (the “
Indemnifying
Party
”)
prompt
notice of any losses or of the discovery of facts upon which a request for
indemnification may be made. The Indemnifying Party shall not be liable for
any
losses that it can show resulted from any delay in providing such notice. The
notice must contain a description of the claim and the nature and amount of
the
loss (to the extent known), and shall include copies of all papers and official
documents received in respect of any losses.
(b)
Control
of Defense.
At its
option, the Indemnifying Party may assume the defense of any third party claim
by giving written notice to the Indemnitee within thirty (30) days of the
Indemnitee’s notice. The assumption of the defense of a third party claim by the
Indemnifying Party shall not be construed as an acknowledgment that the
Indemnifying Party is liable to the Indemnitee. Upon assuming the defense of
a
third party claim, the Indemnifying Party shall have the right to choose legal
counsel and direct and control the defense in its sole discretion. In the event
that it is ultimately determined that the Indemnifying Party is not obligated
to
indemnify the Indemnitee from the claim, the Indemnitee shall reimburse the
Indemnifying Party for all costs and expenses incurred.
(c)
Right
to Participate in Defense.
The
Indemnitee shall be entitled to participate in, but not control, the defense
of
a third party claim and to employ counsel of its choice for such purpose;
provided, however, that such participation shall be at the Indemnitee's own
expense unless the indemnifying Party has failed to assume the defense, in
which
case the Indemnitee shall control the defense.
(d)
Settlement.
If the
Indemnifying Party has acknowledged in writing the obligation to indemnify
the
Indemnitee for losses requiring only the payment of money damages in connection
with a third party claim, and that will not result in the Indemnitee's becoming
subject to injunctive or other, the Indemnifying Party shall have the sole
right
to consent to the entry of any judgment, enter into any settlement or otherwise
dispose of such claim on such terms as the Indemnifying Party deems
appropriate
in its sole discretion. With respect to all other claims or losses, the
Indemnifying Party shall have authority to consent to the entry of any judgment,
enter into any settlement or otherwise dispose of such claim or loss provided
it
obtains the prior written consent of the Indemnitee (which consent shall not
be
unreasonably withheld or delayed). Regardless of whether the Indemnifying Party
chooses to defend or prosecute any third party claim, no Indemnitee shall admit
any liability with respect to, or settle, compromise or discharge, any such
claim without the prior written consent of the Indemnifying Party.
(e)
Cooperation
of Indemnitee.
Regardless of whether the Indemnifying Party chooses to defend or prosecute
any
third party claim, the Indemnitee shall cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony, provide
such
witnesses and attend such conferences, discovery proceedings, hearings, trials
and appeals as may be reasonably requested. Such cooperation shall include
access to and reasonable retention by the Indemnified Party of, records and
information that are reasonably relevant to such third party claim, and making
the Indemnitee’s employees and agents available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder. The Indemnifying Party shall reimburse the Indemnitee for all its
reasonable out-of-pocket expenses in connection therewith.
(f)
Reimbursement
of Expenses.
The
verifiable costs and expenses, including fees and disbursements of counsel,
incurred by the Indemnitee in connection with any claim shall be reimbursed
quarterly by the Indemnifying Party, without prejudice to the Indemnifying
Party's right to contest its indemnification obligations, and such
reimbursements shall be subject to refund in the event the Indemnifying Party
is
ultimately held not to be obligated to indemnify the Indemnitee.
10.2
Assignment.
This
Agreement may not be assigned by either Party without the prior written consent
of the other, except that BTC may assign this Agreement to a party which
acquires (whether by merger, sale of assets or otherwise) all or substantially
all of that portion of BTC’s business to which this Agreement
pertains.
10.3
Entire
Agreement.
This
Agreement constitutes the entire Agreement between the Parties with respect
to
the subject matter hereof, and supersedes all previous agreements, whether
written or oral. This Agreement may not be modified orally, but only by an
instrument in writing signed by both Parties.
10.4
Choice
of Law.
The
validity, performance, construction and effect of the Agreement shall be
governed by the substantive laws of the state of New York without reference
to
conflicts of laws provisions.
10.5
Severability.
If any
provision of this Agreement is declared invalid or unenforceable by an
arbitrator pursuant to Section 9.5 (or by a court whose decision is final and
binding pursuant to subsection 9.1) that provision shall be deemed fully
severable. The remaining provisions of this Agreement shall remain in full
force
and effect and will be construed as if the invalid or unenforceable provision
had been deleted.
10.6
Notices.
Any
notice or report required or permitted to be given shall be in writing and
delivered personally, sent by facsimile (and promptly confirmed by personal
delivery, registered or certified mail or overnight courier as provided herein),
sent by nationally-recognized overnight courier, or sent by registered or
certified mail, postage prepaid, return receipt requested. Such notices and
reports shall be sent to the following addresses and persons (or such other
address or person as a Party may provide by a communication complying with
this
section), and shall be effective upon personal delivery or 5 days after dispatch
by mail or courier, whichever is applicable:
If
to
BTC,
BioSpecifics
Technologies Corp.
35
Wilbur
Street
Lynbrook,
New York 11563
Tel:
(516) 593 7000
Fax:
(516) 593-7039
Attn:
President
with
a
copy to:
Carl
A.
Valenstein
Thelen
Reid & Priest LLP
701
8th
Street NW
Washington,
DC 20001
Tel:
(202) 508 4195
Fax:
(202) 654-1836
If
to the
Research Foundation,
Office
of
Technology Licensing and Industry Relations
N5002
Melville
Memorial
Library
Stony
Brook, New York
11794-3369
Tel:
(631) 632-9009
Fax:
(631) 632-1505
Attn:
Director
10.7
Waiver.
The
delay or failure of any Party to require performance of any provision in any
one
instance shall not be deemed a waiver and shall not affect the right to enforce
the provision later or in any other instance. The observance of any term or
condition may be waived, either generally or in a particular instance by the
Party entitled to enforce such term or condition, but shall only be effective
if
in writing and signed by such Party.
10.8
Force
Majeure.
If
either Party shall be delayed, interrupted in or prevented from the performance
of any obligation hereunder (other than an obligation to
make
a
payment) by reason of
force
majeure,
including
an act of God, fire, flood, earthquake, war (declared or undeclared), acts
of
terrorism, public disaster, strike or labor unrest, governmental act, rule
or
regulation, or any other cause beyond such Party’s control, such Party shall not
be liable to the other therefore and the time for performance of such obligation
shall be extended for a period equal to the duration of the contingency which
occasioned the delay, interruption or prevention. The Party invoking such
force
majeure
rights
must notify the other Party within a period of 15 days from the first and last
day of the
force
majeure
unless
it
renders such notification impossible, in which case, notification shall be
made
as soon as possible. If the resulting delay exceeds 4 months, both Parties
shall
consult in good faith to determine an appropriate course of action.
10.9
Independent
Contractors.
It is
expressly agreed that the Parties shall be independent contractors and that
the
relationship shall not constitute a partnership or agency of any kind. Neither
Party may bind the other or make statements on behalf of the other without
prior
written consent.
10.10
Publicity.
Neither
Party shall use the name of the other Party in any publicity release without
the
prior written permission of the other, which shall not be unreasonably withheld.
Except as required by law, neither Party shall publicly disclose the terms
and
conditions of the Agreement without the prior written consent of the other
Party.
10.11
Headings.
The
captions used in this Agreement are inserted for convenience of reference only
and shall not be construed to create obligations, benefits or
limitations.
10.12
Counterparts.
This
Agreement may be executed in counterparts, each of which shall constitute an
original and all of which taken together shall constitute one and the same
instrument.
[
Signature
Page Follows
]
IN
WITNESS WHEREOF, the Parties have executed this Agreement on the dates set
forth
below.
BIOSPECIFICS
TECHNOLOGIES CORP.
|
|
THE
RESEARCH FOUNDATION OF THE STATE UNIVERSITY NEW YORK AT STONY
BROOK
|
|
|
|
|
|
|
|
|
|
|
By
:
|
/s/
Thomas L. Wegman
|
|
By
:
|
/s/
Donna L. Tumminello
|
Name:
|
Thomas
L. Wegman
|
|
Name:
|
Donna
L. Tumminello
|
Title:
|
President
|
|
Title:
|
Assistant
Director of Business Development
|
Date:
|
November
21, 2006
|
|
Date:
|
November
21, 2006
|
Signature
Page to Dupuytren
’
s
License Agreement
Exhibit
10.2
EXECUTION
COPY
FROZEN
SHOULDER LICENSE AGREEMENT
This
FROZEN SHOULDER LICENSE AGREEMENT (the “
Agreement
”),
effective as of November 21, 2006 (the “
Effective
Date
”),
is
entered into by and between BioSpecifics Technologies Corp., a corporation
organized and existing under the laws of Delaware (“
BTC
”),
and
the Research Foundation of the State University of New York for and on behalf
of
Stony Brook University, a nonprofit, educational corporation organized and
existing under the laws of New York (the “
Research
Foundation
”).
BTC
and the Research Foundation shall sometimes be referred to herein individually
as a “
Party
”
and
collectively as “
Parties
.”
RECITALS
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
WHEREAS,
the Research Foundation now wishes to license the University Know-How and the
University Patents in respect of Frozen Shoulder to BTC, and BTC wishes to
license the University Know-How and the University Patents in respect of Frozen
Shoulder from the Research Foundation, on the terms and conditions set forth
in
this Agreement.
NOW,
THEREFORE, in consideration of the mutual promises, covenants and agreements
set
forth below, the Parties agree as follows:
ARTICLE
I.
DEFINITIONS
For
the
purposes of this Agreement, the following capitalized words and phrases, whether
used in the singular or plural, shall have the following meanings:
1.1
“
Affiliate
”
means
any corporation or other business entity controlled by, controlling, or under
common control with another entity, with “control” meaning direct or indirect
beneficial ownership of more than 50% (or such lesser percent provided that
ownership is accompanied by the power to direct the management or policies
of
the entity) of (a) the voting stock in the case of a corporation, or (b) the
profits interest or decision-making authority in the case of an unincorporated
business entity.
1.2
“
Auxilium
”
means
Auxilium Pharmaceuticals, Inc., a corporation organized and existing under
the
laws of Delaware.
1.3
“
Auxilium
License Agreement
”
means
the agreement dated as of June 3, 2004 by and between BTC and Auxilium, as
amended on May 6, 2005 and as may be subsequently amended from time to time,
by
which BTC granted to Auxilium certain licenses, as defined therein.
1.4
“
Combination
Product
”
means
any product containing both an agent or ingredient which constitutes a Licensed
Product and one or more other active agents or ingredients which do not
constitute Licensed Products.
1.5
“
Development
Program
”
means
the clinical studies previously performed by B&W with injectable collagenase
pertaining to Frozen Shoulder, as described more fully in Article II hereof.
1.6
“
EMEA
”
means
the European Medicines Evaluation Agency, which coordinates the scientific
review of human pharmaceutical products under the centralized licensing
procedure of the European Community, and includes any successor
agency.
1.7
“
Enzyme
”
means
an enzyme constituted of collagenase obtained by fermentation of
Clostridium
histolyticum,
purified
by chromatography, lyophilized and substantially free from other proteinases,
and any variants or derivatives thereof.
1.8
“
European
Union
“
or
“EU”
means the countries of the European Union (or its successor) as constituted
on
the Effective Date and future members of the
European
Union upon their admission for full membership with commercial rights and
privileges.
1.9
“
FDA
”
has
the
meaning set forth above in the recitals.
1.10
“
Field
”
means
the prevention or treatment of Frozen Shoulder.
1.11
“
First
Commercial Sale
”
means
the first commercial sale of a Licensed Product by BTC under the terms of a
Supply Agreement or by a Sublicensee to a Third Party.
1.12
“
Frozen
Shoulder
”
means
the condition or syndrome of shoulder adhesive capsulitis or other conditions
or
syndromes of the shoulder.
1.13
“
Indication
”
shall
mean a pharmaceutical application of injectable collagenase.
1.14
“
Information
”
means
(a) techniques, technology, practices, methods, procedures, inventions,
discoveries, knowledge, know-how, trade secrets, skill, experience, gene or
protein sequences, technical data, test data, analytical and quality control
data, formulas or software programs, and (b) all compounds, compositions of
matter, cells, cell lines, assays, and all other biological or chemical
materials and samples.
1.15
“
Joint
Inventions
”
means
any inventions in the Field, whether patentable or not, which are jointly
conceived, discovered, developed or otherwise made, during the Development
Program by at least one BTC employee or person contractually required to assign
or license the intellectual property rights covering such inventions to BTC
and
at least one Stony Brook employee or person contractually required by virtue
of
New York state law to assign or license the intellectual property rights
covering such inventions to the Research Foundation.
1.16
“
Licensed
Products
”
means
pharmaceutical products containing Enzyme as an active ingredient and any
reformulation, improvement, enhancement, combination, refinement, or
modification thereof, which are made, used and sold in the Field and the
development, manufacture, use or sale of which would, in the absence of this
Agreement, infringe one or more Valid Claims; provided however, the Licensed
Products shall specifically exclude dermal formulations labeled for topical
administration.
1.17
“
MAA
”
means
a
Marketing Authorization Application filed with the EMEA.
1.18
“
NDA
”
means
a
New Drug Application, Biologics License Application or a Product License
Application filed with the FDA.
1.19
“
Net
Sales
”
means
(a)
with
respect to sales of Licensed Products by BTC or its Affiliates, the gross sales
price actually received less the following items to the extent they are paid
and
included in the invoice price:
|
(i)
|
customary
trade discounts actually allowed;
|
|
(ii)
|
packing,
freight, and insurance costs;
|
|
(iii)
|
sales,
use, value-added and excise taxes;
|
|
(iv)
|
import,
export and customs duties and
taxes;
|
|
(v)
|
credit
for returns, allowances or trades actually allowed;
and
|
|
(vi)
|
government
mandated rebates, if any; and
|
(b)
with
respect to sales of Licensed Products by a Sublicensee (as defined below) where
BTC has elected not to supply the Licensed Product, the net sales price as
required to be reported to BTC by the Sublicensee pursuant to the written
sublicense agreement between them.
For
purposes of clarification, if Auxilium acquires BTC, then notwithstanding any
termination of the Auxilium License Agreement, the Net Sales price shall be
the
price that would have been reported by Auxilium to BTC under the Auxilium
License Agreement as if the Auxilium License Agreement had remained in
effect.
(c)
with
respect to sales of Licensed Products by a Sublicensee (as defined below) where
BTC has elected to supply the Licensed Product, the net sales price as required
to be reported to BTC under the Supply Agreement entered into between
them.
In
the
case of (a) and (b) above, sales by BTC, its Affiliates and Sublicensees to
resellers or others for further formulation, processing, repackaging or
relabeling shall be excluded, and only the subsequent resale to independent
customers shall be deemed Net Sales.
In
the
case of Combination Products for which the agent or ingredient constituting
a
Licensed Product and each of the other active agents or ingredients not
constituting a Licensed Product have established market prices when sold
separately, Net Sales shall be determined
by
multiplying the Net Sales for each such Combination Product by a fraction,
the
numerator of which shall be the established market price for the Licensed
Products contained in the Combination Product and the denominator of which
shall
be the sum of the established market prices for the Licensed Products plus
the
other active agents or ingredients contained in the Combination Product. When
separate market prices are not established, then the Parties shall negotiate
in
good faith to determine a fair and equitable method of calculating Net Sales
for
the Combination Product in question, taking into account factors such as
relative cost and relative therapeutic or diagnostic contribution.
1.20
“
Patent
”
means
any patent issued with respect to the Patent Applications, and any reissues
or
extensions thereof.
1.21
“
Sublicensee
”
means
Auxilium or any person or entity who receives in the future a sublicense from
BTC pursuant to Article III hereof.
1.22
“
Sublicense
Income
”
means
the upfront payments and milestone payments actually received by BTC from (i)
Auxilium and included within the definition of Sublicense Income as defined
in
the Auxilium License Agreement, or (ii) any other Sublicensee pursuant to
Article III hereof.
1.23
“
Supply
Agreement
”
shall
mean any commercial supply agreement related to the manufacturing and/or supply
of the Licensed Product between BTC and a Sublicensee or any Third Party.
1.24
“
Territory
”
means
all countries of the world.
1.25
“
Third
Party
”
shall
mean any person or other entity other than BTC or its Affiliates.
1.26
“
University
Know-How
”
means
(i) any proprietary Information or materials related to the manufacture,
preparation, formulation, use or development of the Enzyme and the Licensed
Products and shall include formulations, processes, techniques, formulas,
biological, chemical, assay control and manufacturing, technical, pre-clinical,
clinical or other data, methods, and know-how, and trade secrets; (ii) all
Information, not generally known, which is owned by the Research Foundation
or
is rightfully held with right to sublicense as of the Effective Date, or which
was developed, discovered, conceived, reduced to practice, or acquired by the
Research Foundation or by Stony Brook inventors and assigned by Stony Brook
inventors to the Research Foundation as a result of the Development Program
and
which (a) relates to the Licensed Products or (b) relates to the methods,
processes or techniques for the manufacture or use of the Licensed Products
and
(iii) any Joint Inventions.
1.27
“
University
Patents
”
means
the patent applications in respect of Frozen Shoulder that is covered by the
assignment agreement attached hereto as
Exhibit
A
,
and any
divisions, continuations and continuations-in-part thereof, any foreign patent
applications corresponding thereto, and any patent issued with respect to such
patent applications, and any reissues or extensions thereof.
1.28
“
Valid
Claim
”
means
a
claim of an issued and unexpired patent included within the University Patents,
which has not been held permanently revoked, unenforceable or invalid by a
decision of a governmental agency or court of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and which has
not
been admitted to be invalid or unenforceable through reissue or disclaimer
or
otherwise.
ARTICLE
II.
DEVELOPMENT
PROGRAM
2.1
Frozen
Shoulder Development Program
.
Pursuant to certain protocols, B&W, individually or collectively, together
with other Stony Brook employees, performed certain pre-clinical, clinical,
regulatory, process development and manufacturing work related to injectable
collagenase pertaining to Frozen Shoulder.
ARTICLE
III.
LICENSE
GRANT
3.1
License
Grant.
The
Research Foundation hereby grants to BTC and its Affiliates a worldwide
exclusive license for the University Know-How in the Field and the University
Patents in the Field. The Research Foundation hereby reserves all rights to
any
University Know How and University Patents outside of the Field. The Research
Foundation further grants to BTC a worldwide exclusive license to use the
University
Know-How
and the University Patents to develop, manufacture, use and sell in any manner
Licensed Products in the Field, except to the extent that BTC, its Affiliates
or
Sublicensees enters into a material transfer agreement, clinical trial agreement
or any similar agreement that allows the Research Foundation to do research
or
clinical development. This grant is subject to the payment by BTC to Research
Foundation of any consideration required to be paid by Article IV of this
Agreement.
3.2
Government
Rights.
BTC
acknowledges that the license granted to it hereunder are subject to a certain
license granted to the United States government by the Research Foundation,
as
described in a letter dated as of October 6, 2006, a copy of which is attached
hereto as
Exhibit
C
.
3.3
Sublicenses.
(a)
BTC
shall
be entitled to grant sublicenses of its rights hereunder, provided that any
Net
Sales of Licensed Products by a BTC Sublicensee shall be deemed to be Net Sales
of a Sublicensee for purposes of royalty payments due hereunder, and BTC shall
remain obligated to pay all royalties due with respect to Licensed Products
sold
by BTC and any Sublicensee. If BTC shall grant any sublicenses in addition
to
the Auxilium License Agreement under this Agreement, then it shall obtain the
written commitment of such additional Sublicensees to abide by all applicable
terms and conditions of this Agreement and BTC shall remain fully responsible
to
the Research Foundation for the performance of all such terms by such additional
Sublicensees. Upon the termination of this Agreement, each Sublicensee shall
have the option to convert its sublicense to a direct license with the Research
Foundation on the same terms as in the sublicense agreement.
(b)
The
Research Foundation hereby acknowledges and consents to the sublicense that
BTC
has previously granted to Auxilium pursuant to the Auxilium License Agreement
in
respect of the Licensed Products.
3.4
Subagents.
It is
agreed that BTC has the right to take the following actions, none of which
shall
constitute a sublicense hereunder and none of which shall be subject to Section
3.3 herein:
(a)
appointing
an agent or distributor to market, sell or otherwise dispose of Licensed
Products; and
(b)
subcontracting
the development, manufacture or packaging of Licensed Products.
3.5
Term.
The term
of said license will continue in effect for as long as the Licensed Products
are
sold.
ARTICLE
IV.
ROYALTIES
AND MILESTONE PAYMENTS
4.1
Royalties.
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
4.2
Royalty
Period.
The
royalty obligations of BTC shall commence on the date of the First Commercial
Sale and continue for the longer of (i) the last to expire Valid Claim of a
Patent covering the Licensed Product or (ii) June 3, 2016.
4.3
Currency;
Conversion; Taxes.
Royalty
payments shall be paid in U.S. Dollars at the address of the Research Foundation
set forth in Section 11.6 below, or such other place as the Research Foundation
may reasonably designate in writing, consistent with applicable laws and
regulations. Any taxes which BTC or its Affiliates or Sublicensees shall be
required by law to withhold or pay upon remittance of the royalty payments
shall
be deducted from the royalty payable to the Research Foundation and paid on
its
behalf as required. BTC shall furnish the original of any official receipts
for
such taxes. If any currency conversion shall be required in connection with
the
payment of royalties hereunder, such conversion shall be made by using the
average of the daily exchange rates for such currency quoted by the Wall Street
Journal’s (New York edition) foreign exchange desk for each of the last three
(3) banking days of each calendar quarter, or, in the case of sales by
Sublicensees, using the exchange rates provided for in the written agreements
between BTC and such Sublicensees.
4.4
Currency
Transfer Restrictions.
If in
any country in the Territory the payment or transfer of royalties on Net Sales
in such country is prohibited by law or regulation, BTC shall notify the
Research Foundation of the conditions preventing such transfer, and shall
deposit the blocked payments in local currency in a recognized banking
institution in the relevant country for the credit of the Research Foundation.
4.5
Payments
by Others.
With
respect to any sales of Licensed Products by BTC, its Affiliates or
Sublicensees, BTC shall have the right to cause any Affiliate, Sublicensee
or
other designee to make direct payment to the Research Foundation of the
royalties otherwise due for such sales. The Research Foundation shall accept
such payments and the amount of royalties to be paid by BTC shall be reduced
by
the amount of such payments actually received by Research
Foundation.
4.6
Offsets
for Third Party Licenses.
If the
Parties agree in writing that BTC, its Affiliates or Sublicensees must obtain
a
license from an independent Third Party in order for BTC to manufacture, use
or
sell a Licensed Product and if BTC and the Research Foundation agree on the
terms of such license (a “
Third
Party License
”),
then
the Parties shall share the cost of that license as defined herein. Such cost
includes license fees, royalties and other fixed costs associated with the
Third
Party License minus the costs apportioned to any Sublicensee.
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
4.7
Milestone
Payments
.
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
.
4.8
Payments
Related to Sublicense Income
.
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
ARTICLE
V.
REPORTS,
PAYMENTS AND ACCOUNTING
5.1
Royalty
Reports and Payments.
BTC
agrees to make written reports and royalty payments to the Research Foundation
within ninety (90) days after the close of each calendar quarter during the
term
of this Agreement, beginning with the quarter in which the First Commercial
Sale
occurs. These reports shall show for the calendar quarter in question all Net
Sales of Licensed Products and the royalty due thereon, together with the same
information for Licensed Products sold by Affiliates and Sublicensees (if
applicable). With respect to sales of Licensed Products by Sublicensees, reports
need only include information reflected in the reports required by Section
5.4
below which are actually received during the calendar quarter in question.
Concurrently with the making of each report, BTC shall remit any royalty payment
due for the period covered by the report. BTC will make a good faith attempt,
using commercially reasonable biotech industry practices, to differentiate
between Net Sales of Licensed Products and sales of similar products outside
of
the Field in calculating the amount of the royalty due hereunder to the Research
Foundation. Absent manifest error, BTC’s good faith differentiation shall be
binding and conclusive on the Parties.
5.2
Termination
Report.
Within
ninety (90) days after the date on which BTC and its Affiliates and Sublicensees
last sell any Licensed Products, BTC shall make a final termination report
containing the same quarterly information required above.
5.3
Accounting.
BTC
agrees to keep written or digitally stored records for a period of three (3)
years from the end of each reporting period in sufficient detail to enable
the
royalties payable to be determined, and further agrees to permit its books
and
records to be examined during normal business hours by an independent accounting
firm, selected by the Research Foundation and reasonably satisfactory to BTC,
from time-to-time on reasonable notice, but not more often than once per year.
Such examination must be made confidentially and the auditing firm shall be
required to enter into reasonable confidentiality agreements. The expense of
such examination shall be borne by the Research Foundation except that in the
event the results of the audit reveal a discrepancy in the Research Foundation’s
favor of 10% or more, then reasonable out-of-pocket audit fees shall be paid
by
BTC. Any discrepancy will be promptly corrected by a payment or refund, as
appropriate.
5.4
Third
Party Reports.
BTC
agrees to require, as a term of any sublicense agreement, that the Sublicensee
shall render written reports to BTC of Net Sales of Licensed Products no less
frequently than twice per year and in sufficient detail to enable the royalties
payable by BTC hereunder to be determined (“
Third
Party Reports
”).
BTC
shall also require Sublicensees to keep records concerning Net Sales for a
period of at least three (3) years, and to permit reasonable examination of
such
records by an independent accounting firm selected by BTC. Notwithstanding
the
foregoing, nothing in this Agreement shall be construed as enlarging, or
requiring BTC to modify,
Auxilium’s,
its Affiliate’s or its Sublicensee’s existing reporting and record keeping
obligations pursuant to the Auxilium License Agreement.
5.5
Confidentiality
of Reports.
The
Research Foundation agrees that the information set forth in (a) the reports
required by Sections 5.1 and 5.2, (b) the records subject to examination under
Section 5.3, and (c) all Third Party Reports, shall be maintained in confidence
by the Research Foundation and any independent accounting firm selected under
Section 5.3, shall not be used for any purpose other than verification of the
performance by BTC of its obligations hereunder, and shall not be disclosed
by
the Research Foundation or such accounting firm to any other
person.
ARTICLE
VI.
WARRANTIES;
DISCLAIMED WARRANTIES; INDEMNIFICATION
6.1
Title;
Authority.
The
Research Foundation represents and warrants that B&W, by virtue of New York
state law, have assigned to the Research Foundation all of the rights pertaining
to the University Know-How and the University Patents licensed to BTC hereunder
and that therefore the Research Foundation has the full unrestricted legal
right
to enter into this Agreement and to grant the licenses granted
hereunder.
6.2
No
Other Licenses Granted
.
The
Research Foundation represents and warrants that it has not granted any license
pertaining to the University Know-How or the University Patents to any party
other than to BTC pursuant to this Agreement. In addition, after reasonable
investigation, the Research Foundation to the best of its knowledge is not
aware
that B&W, individually or collectively, have granted any license pertaining
to the University Know-How or the University Patents to any Third Party, other
than the United States government, as set forth in Section 3.2 of this
Agreement.
6.3
No
Known Infringement.
As of
the Effective Date, the Research Foundation has not received any notice of
infringement of or conflict with any patent, trade secret, copyright, trademark
or other intellectual property right of any other person with respect to the
University Know-How.
6.4
No
Warranty of Non-Infringement.
Nothing
in this Agreement shall be construed as a warranty or representation that any
Licensed Products made, used or sold pursuant to any license granted hereunder
is or will be free from infringement of patents, copyrights, trademarks, trade
secrets or other intellectual property rights of Third Parties.
6.5
Indemnification
by Research Foundation.
Notwithstanding the absence of any warranty of non-infringement, the Research
Foundation shall, during the term of this Agreement and thereafter, indemnify
and hold harmless BTC, its Affiliates, Sublicensees and its and their directors,
officers, agents and employees, from any losses, damages, expenses and
liabilities of any kind (including legal expenses and reasonable attorneys’ fees
and costs ) resulting from the Research Foundation’s gross negligence or willful
misconduct in connection with:
(a)
the
action or inaction of the Research Foundation, its Affiliates or B&W; or
(b)
any
breach of this Agreement by the Research Foundation or its Affiliates.
6.6
Indemnification
by BTC.
BTC
shall, during the term of this Agreement and thereafter, indemnify and hold
harmless the Research Foundation and its Affiliates and its and their directors,
officers, agents and employees, from any losses, damages, expenses, and
liability of any kind whatsoever (including legal expenses and reasonable
attorneys’ fees and costs) resulting from BTC’s (and its Affiliates’ and
Sublicensees’) gross negligence or willful misconduct in connection with the
manufacture, use, testing, sale or advertisement of Licensed Products; provided,
however, that in no case will the foregoing indemnity obligation apply to the
extent that such claim, proceeding, loss, expense, or liability is the result
of:
(a)
any
action or inaction of the Research Foundation or its Affiliates, or its or
their
agents; or
(b)
any
alleged or actual infringement by the University Know-How of any patents,
copyrights, trademarks, trade secrets or other intellectual property rights
of
Third Parties; or
(c)
any
breach of this Agreement by the Research Foundation.
ARTICLE
VII.
TERM
AND TERMINATION
7.1
Term.
Unless
earlier terminated in accordance with this Article VII, this Agreement and
the
licenses granted hereunder shall continue in effect until the termination of
BTC’s royalty obligations. Thereafter, all licenses granted shall become fully
paid-up, irrevocable exclusive licenses.
7.2
Termination
by the Research Foundation for Default.
The
Research Foundation may terminate this Agreement if BTC commits any material
default of any of BTC’s material obligations, by notice to BTC specifying in
reasonable detail the nature of the default, provided that such default has
not
been remedied within ninety (90) days of such notice.
7.3
Termination
by BTC.
BTC may
terminate this Agreement (a) on 30 days’ notice to the Research Foundation if
BTC elects to cease utilizing all license rights granted hereunder or (b) if
the
Research Foundation or any of its Affiliates is in material default of any
of
the Research Foundation’s material obligations or covenants, which default has
not been remedied within ninety (90) days of notice to the Research Foundation
specifying in reasonable detail the nature of the default.
7.4
Termination
for Bankruptcy.
If
voluntary or involuntary proceedings in bankruptcy by or against a Party are
instituted under any insolvency law, or a receiver or
custodian
is appointed for a Party, or proceedings are instituted by or against a Party
for corporate reorganization or dissolution, which proceedings shall not have
been dismissed within sixty (60) days after the date of filing, or if a Party
makes an assignment for the benefit of creditors, or substantially all of the
assets of a Party are seized or attached and not released within sixty (60)
days
thereafter (that Party, a “Bankruptcy Party”), then the other Party may
immediately terminate this Agreement by notice to the Bankruptcy Party. However,
in the event that the other Party elects not to terminate the Agreement, the
Parties intend that the rights and licenses granted under this Agreement shall
be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code
(or
any equivalent provision of applicable foreign law), licenses or rights to
“intellectual property” as defined under Section 101(52) of the U.S. Bankruptcy
Code.
7.5
Rights
and Obligations Upon Termination.
Following termination of this Agreement for any reason, nothing herein shall
be
construed to release either Party from any obligation that arose prior to the
date of such termination. After termination, BTC and its Affiliates and
Sublicensees may complete Licensed Products in the process of manufacture at
the
date of termination and sell them along with any other Licensed Products in
inventory, provided that BTC shall pay royalties as required by Article IV
and
shall submit the reports required by Article V for such Licensed Products.
7.6
Return
of Confidential Information.
Upon
termination of this Agreement, BTC shall return or destroy all University
Know-How that is written, to the Research Foundation, provided that BTC may
retain one copy of all written materials for legal and archival purposes
only.
7.7
Third
Party Beneficiary Status of Auxilium.
In the
event of BTC’s bankruptcy and inability to perform its obligations hereunder,
Auxilium shall have the right to cure any default by BTC and perform BTC’s
obligations, and enforce BTC’s rights, hereunder, as a third party beneficiary.
ARTICLE
VIII.
CONFIDENTIALITY,
DISCLOSURE, AND PUBLICATIONS
8.1
Confidentiality
.
(a)
During
the term of this Agreement and for a period of five (5) years following its
expiration or termination, each Party shall maintain in confidence all
Information disclosed by the other Party which is marked or identified as
confidential or which the receiving Party has reason to know is confidential
or
proprietary (referred to herein as “
Confidential
Information
“),
and
shall not disclose Confidential Information to anyone except those Affiliates,
Sublicensees, employees, subagents, consultants, or subcontractors having a
“need to know” in order to carry out the receiving Party‘s activities as
contemplated by this Agreement. Each receiving Party shall obtain written
agreements from its Affiliates, Sublicensees, employees, subagents, consultants
or subcontractors, prior to disclosure to them of Confidential Information,
obligating them to hold in confidence and not use any Confidential Information
except as permitted by this Agreement. Notwithstanding the foregoing sentence,
if employees or consultants of
a
receiving Party have previously signed general confidentiality agreements in
favor the receiving Party as employer, and if those agreements bind the
employees or consultants to protect Information disclosed hereunder to at least
the same extent required by this Section , then it shall be sufficient for
the
employing Party to (i) notify the employees or consultants of the fact that
Information disclosed hereunder is governed by such confidentiality agreements
and (ii) identify to such employees or consultants the specific Information
so
governed. Each Party shall use the same degree of effort used to protect its
own
most valuable proprietary Information from unauthorized use or disclosure,
and
shall be responsible for ensuring compliance with these obligations by its
Affiliates, Sublicensees, employees, subagents, consultants and subcontractors.
Each Party shall promptly notify the other upon discovery of any unauthorized
use or disclosure of the other’s Confidential Information.
(b)
The
receiving Party shall not use Confidential Information for any purpose,
including for the development of products in the Field, except as specifically
permitted by this Agreement.
8.2
Exceptions.
The
obligation of confidentiality and non-use in this Article shall not apply to
the
extent that:
(a)
either
Party (the “
Recipient
”)
is
required to disclose Confidential Information by law, order or regulation of
a
governmental agency or a court of competent jurisdiction, or
(b)
the
Recipient can demonstrate that (i) the disclosed Information was, at the time
of
disclosure to the Recipient, already in the public domain or which, after
disclosure, becomes part of the public domain other than as a result of action
of the Recipient, its Affiliates, Sublicensees, employees, subagents,
consultants or subcontractors in violation hereof; (ii) the Recipient can
demonstrate that the disclosed Information was rightfully known or independently
developed by the Recipient or its Affiliates prior to the date of disclosure
to
the Recipient, or (iii) the disclosed Information was received by the Recipient
or its Affiliates on an unrestricted basis from a source unrelated to any Party
to this Agreement and not under a duty of confidentiality to the other Party
or
(c)
the
disclosure is made to the FDA, EMEA or other regulatory agency as part of a
product approval process.
8.3
Legally
Compelled Information.
In the
event that either Party becomes legally compelled to disclose any Confidential
Information belonging to the other Party, it shall notify the other Party prior
to disclosure so that the other Party can seek a protective order or other
appropriate remedy.
8.4
Publications.
Prior to
public disclosure of or submission for publication of an abstract, manuscript
or
oral presentation describing the results of any aspect of the Development
Program or other scientific activity between BTC and the Research Foundation,
the Party disclosing or submitting such abstract, manuscript or
oral
presentation
(“
Disclosing
Party
”)
shall
send the other Party (“
Responding
Party
”)
by a
recognized delivery service for next day delivery a copy of the abstract,
manuscript or oral presentation materials to be submitted. The Responding Party
shall have 30 days, in the case of an abstract or oral presentation materials,
or 60 days, in the case of a manuscript, from the date of receipt of the
abstract, manuscript or oral presentation materials. If the Responding Party
believes the subject matter of such abstract, manuscript or oral presentation
contains Confidential Information or a patentable invention of significant
commercial value to the Responding Party, then prior to the expiration of the
relevant period, the Responding Party shall notify the Disclosing Party in
writing of its determination and the basis for its conclusion. Upon receipt
of
such notice, the Disclosing Party shall delay public disclosure of or submission
of abstract, manuscript or oral presentation for an additional period of 60
days
to permit preparation and filing of a patent application on the disclosed
subject matter. No publication or presentation shall be made by the Disclosing
Party unless and until the Responding Party’s comments have been addressed and
any information determined by the Responding Party to be Confidential
Information of the Responding Party has been removed. Determination of
authorship for any paper or inventorship for any patent shall be in accordance
with accepted scientific practice or patent law, as appropriate. Should any
questions of authorship or inventorship arise, they will be determined by good
faith consultation between the senior management of the respective Parties.
ARTICLE
IX.
PATENT
MATTERS
9.1
Filing
and Prosecution of Patents
.
(a)
During
the term of the Agreement, BTC or any Sublicensee, pursuant to any sublicense
agreement, shall have the right to, and in the reasonable exercise of its
commercial discretion, prepare, file, prosecute, maintain, renew and defend
all
of the patents and applications included within the University Patents in the
countries where such University Patents are filed as of the Effective Date.
In
the event that neither BTC nor any of its Sublicensees intend to file for patent
protection or wish to continue preparation, prosecution, or maintenance of
the
patents and applications included within the University Patents, then BTC shall
give at least thirty (30) days advance notice to the Research Foundation, and
in
no event less than a reasonable period of time for the Research Foundation
to
act. In such case, the Research Foundation shall have the right to prepare,
file, prosecute, maintain, renew and defend all of the patents and applications
included within the University Patents in the countries where such University
Patents are filed as of the Effective Date.
(b)
BTC
or
its Sublicensee shall be responsible for all costs and expenses incurred for
such prosecution and maintenance. At BTC’s or any of its Sublicensee’s request,
the Research Foundation shall cooperate and provide BTC or such Sublicensee
with
all necessary assistance and documentation in connection with the filing,
prosecution and maintenance of all applications included within the University
Patents. At the request of the Research Foundation, BTC or its Sublicensee
will
provide
the
Research Foundation with reports relating to the filing, prosecution and
maintenance of the University Patents and copies of any intended filings.
9.2
Enforcement
of University Patents
.
(a)
In
the
event that either Party becomes aware of a suspected infringement of a
University Patent, or of the institution by a Third Party of any proceedings
alleging the invalidity or unenforceability of any University Patent, such
Party
shall promptly notify the other Party, and, following such notification, the
Parties shall confer. BTC or any Sublicensee, pursuant to any sublicense
agreement, shall have the right, but shall not be obligated, to prosecute an
infringement action or to defend such proceedings at its own expense, in its
own
name and entirely under its own direction and control. BTC may deduct any
unreimbursed litigation expenses and legal fees from any recovery of damages
or
settlement received by BTC from any such suit, and twenty percent (20%) of
the
balance of the proceeds shall be paid to Research Foundation. The Research
Foundation will reasonably assist BTC or its Sublicensee in such actions or
proceedings if so requested, and will lend its name to such actions or
proceedings if requested by BTC or its Sublicensee or if required by law,
provided that BTC shall pay or reimburse the Research Foundation for all costs
which the Research Foundation may incur in providing such asssistance. If BTC
or
its Sublicensee elect not to bring any action for infringement or defend any
proceeding challenging any claims in an issued patent included within the
University Patents within 90 days of being requested to do so, the Research
Foundation may bring such action or defend such proceeding at its own expense,
in its own name and entirely under its own direction and control. BTC or its
Sublicensee will reasonably assist the Research Foundation in any action or
proceeding if so requested by the Research Foundation or required by law,
provided that the Research Foundation shall pay or reimburse BTC or its
Sublicensee for all costs which BTC or its Sublicensee may incur in affording
such assistance. No settlement of any action or proceeding may be entered into
by either Party without the prior written consent of the other, which consent,
in the case of the Research Foundation shall not be unreasonably withheld,
and
in the case of BTC or any Sublicensee may be withheld in BTC’s or any
Sublicensee’s sole and absolute discretion.
(b)
If
either
Party brings such an action or defends such a proceeding and subsequently ceases
to pursue it or withdraws therefrom, that Party shall promptly notify the other
Party who may then substitute itself for the withdrawing Party under the terms
of this Section.
ARTICLE
X.
DISPUTE
RESOLUTION; ARBITRATION
10.1
Exclusive
Remedy.
The
Parties agree that the terms of this Article shall be the exclusive means of
resolving any dispute, controversy or claim (a “
Dispute
”)
arising out of or relating to this Agreement, except that either Party may
seek
injunctive relief or other provisional remedies from a court of competent
jurisdiction if necessary to protect such Party’s name, intellectual property
rights, or to prevent irreparable harm.
10.2
Good
Faith Negotiations.
In the
event of any Dispute arising out of or relating to or in connection with any
provision of the Agreement, or the rights or obligations hereunder, the Parties
shall try to settle their differences amicably between themselves. Either Party
may initiate such informal dispute resolution by sending written notice of
the
dispute to the other Party, and within ten (10) business days after such notice
appropriate representatives of the Parties shall meet for attempted resolutions
by good faith negotiations. If such representatives are unable to resolve such
disputed matters, they shall be referred to the senior management of the
respective Parties, for discussion and resolution. If they are unable to resolve
the dispute within thirty (30) days (or such longer period of time as the
Parties may agree to in writing) of initiating such negotiations, then the
Parties must resort to binding arbitration, as set forth in Section 10.3 below.
10.3
Binding
Arbitration.
Any
Dispute not so resolved shall be submitted, by a written notice of request
to
arbitrate given by either Party, to final and binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association
(“
AAA
”)
then
in force except as modified in accordance with the provisions of this Section.
The arbitration proceedings shall be held in the City of New York in New York
State.
10.4
Arbitrators.
The
arbitral tribunal shall be composed of three arbitrators, one appointed by
each
Party within 15 days, and the two arbitrators so appointed shall, within 15
days
of their appointment, appoint a third arbitrator who shall act as Chairman
of
the tribunal. If the Dispute involves scientific or technical matters, at least
2 of the 3 arbitrators chosen shall have educational training and/or experience
sufficient to demonstrate a reasonable level of knowledge in the field of
biotechnology.
10.5
Procedures
.
(a)
Prompt
resolution of any Dispute is important to both Parties; and the Parties agree
that the arbitration of any Dispute shall be conducted expeditiously. The
arbitrators shall be instructed and directed to assume management initiative
and
control over the arbitration process (including scheduling of events,
pre-hearing discovery and activities, and the conduct of the hearing), in order
to complete the arbitration as expeditiously as is reasonably practical for
obtaining a just resolution of the Dispute. The arbitrators shall be directed
that any arbitration shall be completed within 1 year from the filing of notice
of a request for such arbitration.
(b)
The
arbitrators shall determine what discovery shall be permitted, consistent with
the goal of limiting the cost and time which the Parties must expend for
discovery; provided that the arbitrators shall permit such discovery as they
deem necessary to permit an equitable resolution of the Dispute.
(c)
In
arriving at decisions, the arbitrators shall apply the terms and conditions
of
this Agreement in accordance with the rules of law governing it in accordance
with Section 11.4. The arbitrators are empowered to render the following awards
in accordance with any provision of this Agreement: (i) enjoining a Party
from
performing
any act prohibited, or compelling a Party to perform any act required, by the
terms of this Agreement or any related agreement, and (ii) ordering such other
legal or equitable relief, including any provisional legal or equitable relief,
or specifying such procedures as the arbitrator deems appropriate, to resolve
any Dispute submitted for arbitration. Any monetary award made and shall be
payable in U.S. Dollars free of any tax or any deduction. The arbitrators shall
issue to both Parties a written explanation in English of the reasons for the
award and a full statement of the facts as found and the rules of law applied
in
reaching the decision. An award rendered in connection with an arbitration
pursuant to this Article shall be the sole, exclusive, final and binding remedy
between the Parties regarding the Dispute and any counterclaims made, and
judgment upon any award may be entered and enforced in any court of competent
jurisdiction.
10.6
Expenses.
The
award rendered by the arbitrators shall include the costs of arbitration,
arbitrator fees, reasonable attorneys’ fees and reasonable costs for expert and
other witnesses.
10.7
Confidentiality
of Proceedings.
The
arbitration proceedings shall not be made public without the joint consent
of
the Parties, and each Party shall maintain the confidentiality of such
proceedings and decision unless otherwise required by law or permitted in
writing by the other Party.
ARTICLE
XI.
MISCELLANEOUS
PROVISIONS
11.1
Indemnification
Procedures.
In the
event either Party seeks indemnification under any provision for indemnification
afforded by this Agreement, the following procedures shall be
followed:
(a)
Notice
of Claim
.
The
Party seeking indemnification (the “
Indemnitee
”)
shall
give the other Party (the “
Indemnifying
Party
”)
prompt
notice of any losses or of the discovery of facts upon which a request for
indemnification may be made. The Indemnifying Party shall not be liable for
any
losses that it can show resulted from any delay in providing such notice. The
notice must contain a description of the claim and the nature and amount of
the
loss (to the extent known), and shall include copies of all papers and official
documents received in respect of any losses.
(b)
Control
of Defense.
At its
option, the Indemnifying Party may assume the defense of any Third Party claim
by giving written notice to the Indemnitee within thirty (30) days of the
Indemnitee’s notice. The assumption of the defense of a Third Party claim by the
Indemnifying Party shall not be construed as an acknowledgment that the
Indemnifying Party is liable to the Indemnitee. Upon assuming the defense of
a
Third Party claim, the Indemnifying Party shall have the right to choose legal
counsel and direct and control the defense in its sole discretion. In the event
that it is ultimately determined that the Indemnifying Party is not obligated
to
indemnify the Indemnitee from the claim, the Indemnitee shall reimburse the
Indemnifying Party for all costs and expenses incurred.
(c)
Right
to Participate in Defense.
The
Indemnitee shall be entitled to participate in, but not control, the defense
of
a Third Party claim and to employ counsel of its choice for such purpose;
provided, however, that such participation shall be at the Indemnitee's own
expense unless the indemnifying Party has failed to assume the defense, in
which
case the Indemnitee shall control the defense.
(d)
Settlement.
If the
Indemnifying Party has acknowledged in writing the obligation to indemnify
the
Indemnitee for losses requiring only the payment of money damages in connection
with a Third Party claim, and that will not result in the Indemnitee's becoming
subject to injunctive or other, the Indemnifying Party shall have the sole
right
to consent to the entry of any judgment, enter into any settlement or otherwise
dispose of such claim on such terms as the Indemnifying Party deems appropriate
in its sole discretion. With respect to all other claims or losses, the
Indemnifying Party shall have authority to consent to the entry of any judgment,
enter into any settlement or otherwise dispose of such claim or loss provided
it
obtains the prior written consent of the Indemnitee (which consent shall not
be
unreasonably withheld or delayed). Regardless of whether the Indemnifying Party
chooses to defend or prosecute any Third Party claim, no Indemnitee shall admit
any liability with respect to, or settle, compromise or discharge, any such
claim without the prior written consent of the Indemnifying Party.
(e)
Cooperation
of Indemnitee.
Regardless of whether the Indemnifying Party chooses to defend or prosecute
any
Third Party claim, the Indemnitee shall cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony, provide
such
witnesses and attend such conferences, discovery proceedings, hearings, trials
and appeals as may be reasonably requested. Such cooperation shall include
access to and reasonable retention by the Indemnified Party of, records and
information that are reasonably relevant to such Third Party claim, and making
the Indemnitee’s employees and agents available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder. The Indemnifying Party shall reimburse the Indemnitee for all its
costs incurred in providing such cooperation.
(f)
Reimbursement
of Expenses.
The
verifiable costs and expenses, including fees and disbursements of counsel,
incurred by the Indemnitee in connection with any claim shall be reimbursed
quarterly by the Indemnifying Party, without prejudice to the Indemnifying
Party's right to contest its indemnification obligations, and such
reimbursements shall be subject to refund in the event the Indemnifying Party
is
ultimately held not to be obligated to indemnify the Indemnitee.
11.2
Assignment.
This
Agreement may not be assigned by either Party without the prior written consent
of the other, except that BTC may assign this Agreement to a party which
acquires (whether by merger, sale of assets or otherwise) all or substantially
all of that portion of BTC’s business to which this Agreement
pertains.
11.3
Entire
Agreement.
This
Agreement constitutes the entire Agreement between the Parties with respect
to
the subject matter hereof, and supersedes all previous
agreements,
whether written or oral. This Agreement may not be modified orally, but only
by
an instrument in writing signed by both Parties.
11.4
Choice
of Law.
The
validity, performance, construction and effect of the Agreement shall be
governed by the substantive laws of the state of New York without reference
to
conflicts of laws provisions.
11.5
Severability.
If any
provision of this Agreement is declared invalid or unenforceable by an
arbitrator pursuant to Section 10.5 (or by a court whose decision is final
and
binding pursuant to subsection 10.1) that provision shall be deemed fully
severable. The remaining provisions of this Agreement shall remain in full
force
and effect and will be construed as if the invalid or unenforceable provision
had been deleted.
11.6
Notices.
Any
notice or report required or permitted to be given shall be in writing and
delivered personally, sent by facsimile (and promptly confirmed by personal
delivery, registered or certified mail or overnight courier as provided herein),
sent by nationally-recognized overnight courier, or sent by registered or
certified mail, postage prepaid, return receipt requested. Such notices and
reports shall be sent to the following addresses and persons (or such other
address or person as a Party may provide by a communication complying with
this
section), and shall be effective upon personal delivery or 5 days after dispatch
by mail or courier, whichever is applicable:
If
to
BTC,
BioSpecifics
Technologies Corp.
35
Wilbur
Street
Lynbrook,
New York 11563
Tel:
(516) 593-7000
Fax:
(516) 593-7039
Attn:
President
with
a
copy to:
Carl
A.
Valenstein
Thelen
Reid & Priest LLP
701
8th
Street NW
Washington,
DC 20001
Tel:
(202) 508-4195
Fax:
(202) 654-1836
If
to the
Research Foundation,
Office
of
Technology Licensing and Industry Relations
N5002
Melville
Memorial
Library
Stony
Brook, New York
11794-3369
Tel:
(631) 632-9009
Fax:
(631) 632-1505
Attn:
Director
11.7
Waiver.
The
delay or failure of any Party to require performance of any provision in any
one
instance shall not be deemed a waiver and shall not affect the right to enforce
the provision later or in any other instance. The observance of any term or
condition may be waived, either generally or in a particular instance by the
Party entitled to enforce such term or condition, but shall only be effective
if
in writing and signed by such Party.
11.8
Force
Majeure.
If
either Party shall be delayed, interrupted in or prevented from the performance
of any obligation hereunder (other than an obligation to make a payment) by
reason of
force
majeure,
including
an act of God, fire, flood, earthquake, war (declared or undeclared), acts
of
terrorism, public disaster, strike or labor unrest, governmental act, rule
or
regulation, or any other cause beyond such Party’s control, such Party shall not
be liable to the other therefore and the time for performance of such obligation
shall be extended for a period equal to the duration of the contingency which
occasioned the delay, interruption or prevention. The Party invoking such
force
majeure
rights
must notify the other Party within a period of 15 days from the first and last
day of the
force
majeure
unless
it
renders such notification impossible, in which case, notification shall be
made
as soon as possible. If the resulting delay exceeds 4 months, both Parties
shall
consult in good faith to determine an appropriate course of action.
11.9
Independent
Contractors.
It is
expressly agreed that the Parties shall be independent contractors and that
the
relationship shall not constitute a partnership or agency of any kind. Neither
Party may bind the other or make statements on behalf of the other without
prior
written consent.
11.10
Publicity.
Neither
Party shall use the name of the other Party in any publicity release without
the
prior written permission of the other, which shall not be unreasonably withheld.
Except as required by law, neither Party shall publicly disclose the terms
and
conditions of the Agreement without the prior written consent of the other
Party.
11.11
Headings.
The
captions used in this Agreement are inserted for convenience of reference only
and shall not be construed to create obligations, benefits or
limitations.
11.12
Counterparts.
This
Agreement may be executed in counterparts, each of which shall constitute an
original and all of which taken together shall constitute one and the same
instrument.
[
Signature
Page Follows
]
IN
WITNESS WHEREOF, the Parties have executed this Agreement on the dates set
forth
below.
BIOSPECIFICS
TECHNOLOGIES CORP.
|
|
THE
RESEARCH FOUNDATION OF THE STATE UNIVERSITY NEW YORK AT STONY
BROOK
|
|
|
|
|
|
|
|
|
|
|
By
:
|
/s/
Thomas L. Wegman
|
|
By
:
|
/s/
Donna L. Tumminello
|
Name:
|
Thomas
L. Wegman
|
|
Name:
|
Donna
L. Tumminello
|
Title:
|
President
|
|
Title:
|
Assistant
Director of Business Development
|
Date:
|
November
21, 2006
|
|
Date:
|
November
21, 2006
|
Signature
Page to Frozen Shoulder License Agreement
EXHIBIT
A
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
EXHIBIT
B
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
EXHIBIT
C
<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>