CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

Exhibit 10.4

 

Execution Copy

 

LICENSE AGREEMENT (U.S.)

between GRÜNENTHAL GMBH

and

JANSSEN PHARMACEUTICALS, INC.

and

JANSSEN RESEARCH & DEVELOPMENT, LLC

 

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

Index

 

 

 

LICENSE AGREEMENT (U.S.)

Page(s)

RECITALS

1

ARTICLE 1 – DEFINITIONS

3

ARTICLE 2 – LICENSE GRANTS

17

2.1

Licenses to OMP

17

(a)

Licenses for Commercialization

17

(b)

Licenses for Production

18

(c)

License for Regulatory Approval Preparation

18

(d)

Licenses for Improvement Patents Outside the Field

18

(e)

Payment for Licenses

19

(f)

Right to Sublicense

19

2.2

Licenses to Grünenthal

19

(a)

Licenses for Commercialization

19

(b)

Licenses for Production

19

(c)

License for Regulatory Approval Preparation

19

(d)

Payment for Licenses

20

(e)

[Reserved]

20

(f)

Right to Sublicense

20

2.3

Conversion of Licenses to OMP to Non-exclusive license

20

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

 

ARTICLE 3 – MANUFACTURE

20

3.1.

Manufacturing by the Parties

20

3.2.

Transfer of Manufacturing Know-How

21

3.3.

Exchange of Manufacturing Know-How

21

ARTICLE 4 – COMMERCIALIZATION

21

4.1

Commercialization Efforts

21

4.2

Pricing

22

4.3

Marketing Responsibilities/Marketing Materials

22

(a)

In General

22

(b)

Party Name on Product Promotional Materials

22

4.4

Minimum Royalties in the OMP Territory

23

4.5

Promotion Compliance Responsibilities

25

4.6

Distribution

25

(a)

Customer Support

25

(b)

Recalls

26

4.7

[Reserved]

26

4.8

Contract to Supra National Agencies

26

ARTICLE 5 - TRADEMARK AND APPEARANCE

27

ARTICLE 6 – PAYMENTS

28

6.1

Considerations of OMP to Grünenthal

28

(a)

Upfront Payments for OMP Territory

28

(b)

Milestone Payments in connection with the OMP Territory

28

(c)

Payments in connection with RAP Plan 1.63.1 and OMP
Territory Earned Royalty Payments

29

(d)

[Reserved]

29

(e)

[Reserved]

29

(f)

Proportionate Share

29

6.2

Payment of RAP Costs

30

(i)

Cost overruns

31

(ii)

Records and Audits

31

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

 

6.3

Earned Royalties for Products in OMP Territory

33

6.4

Royalties for Combination Products in OMP Territory

33

6.5

Royalty Calculation Method

34

6.6

[Reserved]

34

6.7

[Reserved]

34

6.8

Royalty Rate Reduction

34

(a)

Third Party Patents

34

(b)

Compulsory License

35

(c)

Competition in OMP Territory

35

(d)

[Reserved]

37

(e)

Royalties on Know-How of a Product containing CG-5503 as
the sole active pharmaceutical ingredient

37

(f)

Royalties on Know-How of Combination Products

37

(g)

Royalty Rock Bottom

37

6.9

Cost of Goods Sold Cap (“COGS Cap”) in OMP Territory

37

6.10

Minimum Royalties

38

6.11

Term for Royalty Payment

38

6.12

Royalty Reports and Records

39

6.13

Taxes

40

6.14

Grünenthal As Licensee

41

6.15

Remittance

41

6.16

No Overlapping Royalties

42

6.17

Payments to or Reports by Affiliates

42

ARTICLE 7– IMPROVEMENT/OWNERSHIP OF INTELLECTUAL PROPERTY

42

7.1

Ownership of Intellectual Property and Patent Rights on
Combined Territories License Agreement Effective Date

42

7.2

Maintenance of Grünenthal Background Patent

42

7.3

Disclosure of Improvements

43

7.4.

Ownership of Improvement Patents and Improvements

43

7.5

Filing of Improvement Patents

43

7.6

Extensions

44

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

 

7.7

Ownership of ADF-Formulation Patents and ADF-
Formulation Improvements

44

7.8

Notice

45

7.9

Infringement Claims Against Third Parties

45

7.10

Assistance

46

7.11

Third Party Patents

46

7.12

Notices Relating to the Act

47

7.13

Authorization Relating to Patent Term Extension

48

7.14

Trade Secrets

49

ARTICLE 8– CONFIDENTIALITY

49

8.1

Confidentiality Exceptions

49

8.2

Authorized Disclosure

50

8.3

Survival

51

8.4

Publications

51

8.5

Public Announcements

51

ARTICLE 9 – REPRESENTATIONS AND WARRANTIES

52

9.1

Representations and Warranties

52

9.2

Grünenthal Patent Warranty

53

9.3

Grünenthal Product Warranty

53

9.4

OMP Diligence Warranty

53

9.5

OMP Patent Warranty

53

9.6

No Conflicting Rights

54

9.7

No Other Representations or Warranties

54

9.8

No Liability for Consequential Damages

54

ARTICLE 10 – MANAGEMENT OF REGULATORY APPROVAL PREPARATION
(“RAP”) AND COMMERCIALIZATION

54

10.1

Steering Committee

54

(a)

Establishment of Steering Committee

54

(b)

Authority

55

(c)

Delegation

55

(d)

SC Responsibilities

55

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

 

(e)

Dispute Resolution

55

10.2

Final Decision-Making/Disputes RAP Matters

56

10.3

RAP Sub-Committee

57

(a)

Establishment of RSC

57

(b)

RSC Responsibilities

57

(c)

RSC Decision-making

58

(d)

Accounting/Financial Reporting

58

(e)

RSC Reporting

58

10.4

Commercialization Team

58

(a)

Formation of the Commercialization Team

58

(b)

Dispute Resolution

59

ARTICLE 11 – REGULATORY APPROVAL PREPARATION (“RAP”)

59

11.1

RAP Plans

59

(a)

RAP Plans

59

(b)

RAP Plan Modifications

59

11.2

Exclusive RAP Relationship

60

11.3

RAP Efforts

60

11.4

RAP Responsibilities

60

11.5

Clinical Trials

61

11.6

INDs and Drug Approval Applications

64

11.7

Regulatory Meetings and Communications

68

11.8

Territory Specific RAP Costs

69

11.9

Transfer of Materials

70

11.10

Compliance with GLP/GCP/GMP

71

11.11

Failure to perform Duties of RAP Plan

71

11.12

Combination Products and Products based on
Improvements

72

ARTICLE 12 – ADF FORMULATION

72

12.1

Decision of an abuse deterrent form (“ADF” ) Formulation

72

12.2

Development of ADF Formulation

74

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

 

 

12.3

Miscellaneous

78

12.4

Licenses for Independent ADF Formulation Improvement Patents
controlled by OMP and Grünenthal ADF
Formulation Patents

79

ARTICLE 13 – INDEMNIFICATION

80

13.1

Indemnification

80

13.2

Indemnification Procedures

81

13.3

Insurance

81

ARTICLE 14 – [Reserved]

82

ARTICLE 15 - TERM AND TERMINATION

82

15.1

Term

82

15.2

Termination For Breach

83

15.3

Termination For Bankruptcy

85

15.4

[Reserved]

86

15.5

Termination After the Start of Phase III

86

15.6

Termination By OMP

89

15.7

Mutual Termination

91

15.8

Change of Control

91

(a)

In the event of a Change of Control of OMP

91

(b)

In the event of a Change of Control of Grünenthal

91

15.9

[Reserved]

92

15.10

Surviving Rights

92

15.11

Accrued Rights, Surviving Obligations

92

15.12

[Reserved]

93

15.13

Termination Not Sole Remedy

93

ARTICLE 16 – DISPUTE RESOLUTION

93

16.1

Dispute Resolution and Arbitration

93

16.2

Arbitration

93

ARTICLE 17 – [Reserved]

94

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

 

ARTICLE 18 – MISCELLANEOUS

94

18.1

Relationship of Parties

94

18.2

Counterparts

95

18.3

Headings

95

18.4

Binding Effect

95

18.5

Assignment

95

18.6

Amendment

95

18.7

Governing Law

95

18.8

Severability

95

18.9

Entire Agreement

96

18.10

Advice of Counsel

96

18.11

Consents Not Unreasonably Withheld

96

18.12

Retained Rights

96

18.13

Force Majeure

97

18.14

Further Actions

97

18.15

No Implied Licenses

97

18.16

Notices

97

18.17

Waiver

98

18.18

Compliance with Laws

98

18.19

Bankruptcy

99

18.20

Non-Solicitation

99

18.21

Contradictions

100

ARTICLE 19 – GUARANTEE OF JOHNSON & JOHNSON, JOINT AND SEVERAL LIABILITY

100

19.1

 

100

19.2

 

100

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

EXHIBITS AND SIDE LETTERS

EXHIBITS

1.3

CG-5503

1.22

Fully Allocated Manufacturing Costs

1.29

Grünenthal Background Patents

1.63

Initial Regulatory Approval Preparation Plan

1.63.1

Additional Regulatory Approval Preparation Plan

6.5

Calculation of OMP Territory Earned Royalty

10.3 (b)

Cost Allocation Principles

11.6 (a), 1

FDA Form 1571 and Attachment for Section 13

11.6 (a), 2

Grünenthal IND Transfer Letter

11.6 (a), 3

J&J PRD IND Acceptance Letter

11.7(c)

Adverse Event Reporting Procedures for Product

SIDE LETTERS

1

Supply of CG-5503 for Evaluation of ADF-Formulation

2

Exchange of Data/Information via IntraLinks

3

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-2001)

4

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-2003)

5a

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-007 (J&JPRD) /
HP5503/14 (Grünenthal))

5b

Agreement to Approach NPS Pharmaceuticals re U.S. Patent 6,071,970

6

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-1005 (J&JPRD);
HP5503/13 (Grünenthal))

7

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-1002 (J&JPRD);
HP5503/16 (Grünenthal), Protocol R331333-PAI-1006 (J&JPRD); HP5503/15
(Grünenthal) and Protocol R331333-PAI-1009 (J&JPRD); HP5503/20 (Grünenthal))

8

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-1003 (J&JPRD);
HP5503/17 (Grünenthal) and Protocol R331333-PAI-1004 (J&JPRD); HP5503/18
(Grünenthal))

9

Disclosure of Confidential Information to OMP Affiliates

10

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-1010 (J&JPRD);
HP5503/21 (Grünenthal))

11

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-1016

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

(J&JPRD); HP5503/24 (Grünenthal))

12

Delegation of Sponsorship to J&JPRD (Protocol R331333-PAI-1011 (J&JPRD);
HP5503/22 (Grünenthal))

13

KF5503/24 (Title: A One-Year, Randomized, Open-Label, Parallel-Arm, Phase Ill
Long-Term Safety Trial, with Controlled Adjustment of Dose, of Multiple Doses of
CG5503 PR and Oxycodone CR in Subjects with Chronic Pain); Clinical trial
sponsored by J&J PRD, to be conducted in countries of the Grünenthal Territory

14

Clinical trials conducted by J&J PRD in countries of the Grünenthal Territory
(namely Phase 1 studies and studies belonging to the ACUTE part of the program)

15

KF5503/16 (Title: A randomized withdrawal, active- and placebo- controlled,
double-blind, multicenter Phase III trial assessing safety and efficacy of oral
CG5503 PR* in subjects with moderate to sever chronic malignant tumor-related
pain); Clinical trial sponsored by J&J PRD, to be conducted in countries of the
J&J and the Grünenthal Territory

16a

KF5503/37; R331333-PAI-3017 (Title: A randomized, double-blind, parallel-group,
multi-center, active- and placebo-controlled trial to evaluate the analgesic
efficacy and safety of multiple doses of CG5503 IR for postoperative pain
following bunionectomy); Clinical trial sponsored by Grünenthal and conducted in
countries of the OMP Territory

16b

KF5503/38; R331333-PAI-3018 (Title: A Randomized, Double-Blind, Active- and
Placebo-Controlled, Parallel-Group, Multicenter Study to Evaluate the Efficacy
and Safety of Tapentadol Immediate-Release Formulation in the Treatment of Acute
Paid From Bunionectomy); Clinical trial sponsored by J&J PRD and conducted in
countries of the OMP Territory

17

Clinical Studies using Laser and Mechano-Somatosensory Evoked Potentials

18

Clinical Trial HP5503/62 Evaluation of the safety, tolerability and
pharmacokinetics of a 100 mg tapentadol tamper-resistant prolonged- release
tablet when the formulation is subjected to mastication compared to 100 mg
tapentadol IR tablets swallowed intact in a population of healthy subjects;
Clinical trial sponsored by J&J PRD, to be conducted in countries of the
Grünenthal Territory

19

KF5503/59; R331333PAI2005: Open-Label Evaluation of the Pharmacokinetic Profile
and Safety of Tapentadol Oral Solution for the Treatment of Postsurgical Pain in
Children and Adolescents Aged From 6 to Less Than 18 Years, a clinical trial
sponsored by J&JPRD, to be conducted in France as a country of the Grünenthal
Territory, as well as in the United States, a country of the J&JPRD territory.

20

KF5503/62: A randomized, double-blind, placebo-controlled parallel group,
multi-center trial to evaluate the efficacy and safety of multiple dose
administration of an intravenous formulation of tapentadol in the treatment of
acute pain following bunionectomy

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

21

KF5503/65; PAI3037: A evaluation of the efficacy and safety of tapentadol oral
solution in the treatment of post-operative acute pain requiring opioid
treatment in pediatric subjects aged from birth to less than 18 years old, a
clinical trial sponsored by Janssen Research & Development, LLC (JRD),
operational lead Grünenthal (GRT), to be conducted in countries of the Janssen
Territory and Grünenthal Territory

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

LICENSE AGREEMENT (U.S.)

BETWEEN

GRÜNENTHAL GMBH

AND

JANSSEN PHARMACEUTICALS, INC.,

AND

JANSSEN RESEARCH & DEVELOPMENT, LLC

 

This License Agreement (U.S.) (the “Agreement’) is made by and between

 

Grünenthal GmbH, a German corporation having a principal place of business at
Zieglerstraße 6, 52078 Aachen, mailing address 52099 Aachen, Germany
(“Grünenthal”),

 

Janssen Pharmaceuticals, Inc. (successor in interest to Ortho-McNeil
Pharmaceutical, Inc.), a Delaware corporation having a principal place of
business at 1125 Trenton-Harbourton Road, Titusville, New Jersey, 08560
(“Ortho”),

 

Janssen Research & Development, LLC, having a principal place of business at
U.S. Route 202, Raritan, NJ 08869 (“J&J PRD”) (Ortho and J&J PRD hereinafter
collectively “OMP”), and

 

Johnson & Johnson, having a principal place of business at One Johnson & Johnson
Plaza, New Brunswick, NJ 08933 (“Johnson & Johnson”) as guarantor according to
Article 19 of the Agreement.

 

Grünenthal and OMP may be referred to individually herein as a “Party” or
together as the “Parties”.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

RECITALS

 

1.        The Parties have previously entered into a License Agreement dated
February 21, 2003, which License Agreement was amended as of December 23, 2004
and June 21, 2006 and then amended and restated in its entirety in an Amended
and Restated License Agreement dated December 28, 2006, which Amended and
Restated License Agreement was amended as of June 19, 2007, December 17, 2008,
January 16, 2009, May 22, 2009, July 15, 2010 and May 29, 2013 (such Amended and
Restated License Agreement, together with all amendments thereto, the “Combined
Territories License Agreement”).

 

2.        The Combined Territories License Agreement granted certain licenses to
OMP for Commercialization, Production, Regulatory Approval Preparation,
Improvement Patents outside the Field and the right to sublicense for the United
States, Canada and Japan.

 

4.        The Parties have decided to separate the territories to which OMP
received rights under the Combined Territories License Agreement and to amend
and restate the Combined Territories License Agreement in two separate license
agreements: this Agreement, relating to rights and obligations in the United
States, and the Canada/Japan License Agreement (the “Canada/Japan License
Agreement”), relating to rights and obligations in Canada and Japan.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree to amend
and restate the Parties’ rights and obligations under the Combined Territories
License Agreement with respect to the United States as follows:

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

LICENSE

AGREEMENT (U.S.)

between

GRÜNENTHAL GMBH

and

JANSSEN PHARMACEUTICALS, INC.

and

JANSSEN RESEARCH & DEVELOPMENT, LLC

January 13, 2015

 

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

LICENSE AGREEMENT (U.S.)

 

This License Agreement (U.S.) (this “Agreement”) is effective as of January 13,
2015 (the “Effective Date”) by and between Grünenthal GmbH, a German corporation
having a principal place of business at Zieglerstraße 6, 52078 Aachen, mailing
address 52099 Aachen, Germany (“Grünenthal”), Janssen Pharmaceuticals, Inc., a
Delaware corporation having a principal place of business at 1125 Trenton-
Harbourton Road, Titusville, New Jersey, 08560, and Janssen Research and
Development LLC, having a principal place of business at U.S. Route 202,
Raritan, NJ 08869 (hereinafter collectively “OMP”).

Grünenthal and OMP may be referred to individually herein as a “Party” or
together as the “Parties”.

Terms not otherwise defined shall have the meaning ascribed to such terms in
Article 1 of this Agreement.

 

a.    RECITALS

 

1.       Grünenthal has screened in a [***] program more than [***] compounds
and has identified CG-5503 (hereinafter defined) as an interesting drug
candidate.

2.       Grünenthal has the sole and exclusive ownership of certain Patents
claiming CG-5503.

3.       Grünenthal has conducted in-vitro and in-vivo testing of CG-5503 and
has conducted comprehensive pre-clinical, pharmacology, safety pharmacology
toxicology tests of CG-5503.

4.       Grünenthal has completed development of an iv, oral and oral
slow-release formulation of CG-5503 and all necessary trials to establish proof
of principle.

5.       Grünenthal was the IND holder in the United States for the Product
(hereinafter defined) and established in consultation with the FDA a testing
schedule for the Product and conducted Phase I and Phase II clinical trials. The
IND in the United States was transferred to OMP prior to the Effective Date.

6.       Grünenthal has set up a clinical trial plan in order to obtain
Regulatory Approval at approximately the same time in the United States and in
the EU.

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

7.       Grünenthal has to comply with the ICH Guidelines and Helsinki
Declaration which seek to minimize the number of patients exposed to
non-registered new drugs by not duplicating clinical trials in different regions
of the world.

8.       Grünenthal wants to ensure that the clinical trial plan for the Product
in the USA and Canada and the EU is carried out on a consistent and
comprehensive basis with a view to ensuring that the necessary Regulatory
Approvals are obtained as early as practicable using the best available
resources and facilities and in the most efficient and economic manner.

9.       Grünenthal aims to Commercialize, by itself or through licensees,
Product on a world-wide basis, but at the time of execution of the original
Combined Territories License Agreement had no sales organization in the United
States.

10.     OMP has considerable experience in marketing, promotion, manufacturing
and obtaining Regulatory Approvals for pain products in the United States.

11.     Accordingly, Grünenthal wishes to grant to OMP, and OMP wishes to obtain
from Grünenthal, a license to make, use and sell the Product in the United
States.

12.     Grünenthal seeks to ensure that it manages the global risk benefit
analysis for the Product by pooling all global efficacy and safety data and
presenting such to all relevant registration authorities, while acknowledging
that certain Regulatory Authorities require studies to be conducted in their
specific country.

13.     In order to comply with all applicable regulatory rules and regulations
and in order to obtain and maintain Regulatory Approvals, Grünenthal and OMP and
its Affiliates in their respective Territories have concluded a separate
pharmacovigilance agreement.to coordinate their activities, including, but not
limited to adverse event reporting.

14.     Within the clinical trial plan for achieving Regulatory Approval in the
US and the EU which has been developed by Grünenthal and subsequently
co-developed by OMP and Grünenthal, Grünenthal is prepared to allocate to, and
OMP is prepared to accept, certain responsibilities and activities pertaining to
the clinical trial plan so that the Product may be successfully Commercialized
by each Party independently in their respective Territories.

15.     OMP as licensee for the United States, representing approximately [***]
of the world market, is prepared to contribute to the resources and costs of the
Regulatory Approval Preparation by bearing [***] of such resources and costs.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

16.      OMP´s contribution to the Regulatory Approval Preparation is a
substantial part of the consideration for the licenses being granted hereunder
apart from upfront payments, milestone payments and royalty payments.

17.     OMP and Grünenthal have agreed jointly to develop the Grünenthal-ADF-
Formulation.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

 

ARTICLE 1              DEFINITIONS

 

1.1      “ADF Formulation” means an abuse deterrent formulation or drug delivery
system of the Product developed in accordance with RAP Plan 1.62 which includes
the OMP-ADF-Formulation and the Grünenthal-ADF-Formulation, which through any of
its physical, mechanical, chemical, pharmacokinetic, pharmacodynamic properties,
has the potential to reduce abuse, diversion, or other inappropriate use of
CG-5503.

 

1.2      “Affiliate” means, with respect to any person or entity, any other
person or entity which controls, is controlled by or is under common control
with such person or entity. A person or entity shall be regarded as in control
of another entity if it owns or controls directly or indirectly at least fifty
percent (50%) of the equity securities of the subject entity entitled to vote in
the election of directors (or, in the case of an entity that is not a
corporation, for the election of the corresponding managing authority).

 

1.3      “CG-5503” means any composition of matter specified on Exhibit 1.3.

 

1.4      “Combination Product” means a pharmaceutical Product containing CG-
5503 in combination with one or more other active pharmaceutical ingredient

(s) but excluding New Chemical Entities.

 

1.5      “Combination Product Market Exclusivity” means on a country-by-country
basis, the period of time during which, besides the respective Combination
Product sold by OMP, there is no other combination product containing CG- 5503
in combination with the same active pharmaceutical ingredient(s) being

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

sold by a Third Party, other than Affiliates, in the OMP Territory, excluding
such combination product containing CG-5503 from such Third Parties for which
claims of infringement according to Section 7.9 have not led to a final,
non-appealable decision of a court and claims of infringement are continuing to
be pursued in court.

 

1.6      “Combined Territories License Agreement Effective Date” means February
21, 2003.

 

1.7      “Commercialization” means any and all activities constituting, using,
importing, marketing, distributing, promoting, offering for sale, selling and
having sold a Product. When used as a verb, “Commercialize” shall mean to engage
in Commercialization.

 

1.8      “Commercialization Team” or “CT” shall have the meaning recited in
Section 10.4.

 

1.9      “Commercially Reasonable and Diligent Efforts” means those efforts and
resources normally used in the pharmaceutical business by [***] pharmaceutical
companies for a product or compound owned by it or to which it has rights, which
is of similar market potential at a similar stage in its development or product
life, taking into account, without limitation, issues of safety and efficacy,
product profile, pricing and reimbursement status, the proprietary position of,
as applicable, CG-5503 in comparison to other products in a Party’s product
portfolio, the then prevailing regulatory environment and status with respect
thereto, and relevant scientific and commercial factors.

 

1.10    “Control” or “Controlled” means the possession of the ability to grant a
license or sublicense as provided for herein without violating the terms of any
agreement or other arrangements with any Third Party. “Control” expressly
includes the right of ownership, in whole or by more than fifty percent (50%).

 

1.11    “Core Regulatory Approval Preparation Program” or “Core RAP Program”
means the development program for the Product designed to generate all
preclinical, clinical and regulatory information required for filing Drug
Approval

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Applications in the United States, Canada, the EU and Japan. Territory Specific
Regulatory Approval Preparation for countries not listed in this definition is
not part of the Core Regulatory Approval Preparation Program, unless the Parties
mutually agree as recited in Section 11.8.

 

1.12    “Cost of Goods Sold” or “COGS” means the Fully Allocated Manufacturing
Costs of Product sold plus any royalties paid on such Product under Article 6.

 

1.13    “Drug Approval Application” means any application for Regulatory
Approval required before commercial sale or use of a Product as a drug, biologic
or therapeutic in a regulatory jurisdiction including, without limitation,
reimbursement approvals.

 

1.14    “EMEA” means the European Agency for the Evaluation of Medicinal
Products and any successor agency.

 

1.15    “EU” means the supra national community consisting of Austria, Belgium,
Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia,
Spain, Sweden and United Kingdom of Great Britain and Northern Ireland and all
other countries which after the Combined Territories License Agreement Effective
Date become part of this supra national community. In addition and only for the
purpose of this Agreement, Switzerland and the present and future European
Economic Area countries (at present: Liechtenstein, Iceland and Norway) shall
form part of this definition.

 

1.16    “FDA” means the United States Food and Drug Administration or any
successor agency.

 

1.17    “Field” means the Regulatory Approval Preparation, use, manufacture,
distribution, marketing and sale of Products for the [***].

 

1.18    “First Commercial Sale” means, with respect to a given Product, the
first sale in an arms length transaction and shipment of a Product to a Third
Party

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

other than an Affiliate by OMP in a country in the OMP Territory following
applicable Regulatory Approval of the Product in such country.

 

1.19    “FTE” means a full time scientific person dedicated with appropriate
credentials and training to the Regulatory Approval Preparation Plan, or in the
case of less than a full-time dedicated scientific person, a full-time,
equivalent scientific person year, based upon [***].

 

1.20    “Fully Allocated Manufacturing Costs” shall be as defined in Exhibit
1.22.

 

1.21    “GCP” means the then current standards for clinical trials for
pharmaceuticals, as set forth in the ICH (as defined below) guidelines and
applicable regulations promulgated thereunder, as amended from time to time, and
such standards of good clinical practice as are required by the EU and other
organizations and/or governmental agencies in countries in which a Product is
intended to be sold, to the extent such standards are not less stringent than
United States or EU GCP.

 

1.22    “GLP” means the then current standards for laboratory activities for
pharmaceuticals, as set forth in the FDA’s GLP regulations and/or the GLP
principles of the Organization for Economic Co-operation and Regulatory Approval
Preparation (OECD), as amended from time to time, and such standards of good
laboratory practice as are required by the EU and other organizations and/or
governmental agencies in countries in which a Product is intended to be sold, to
the extent such standards are not less stringent than United States or EU GLP.

 

1.23    “GMP” means (i) the regulatory requirements for current good
manufacturing practices promulgated by the FDA under the U.S. Food, Drug and
Cosmetic Act, 21 C.F.R. § 210 et seq. (“FD&C Act”) and under the Public Health
Service Act, Biological Products, 21 C.F.R. §§ 600-610 (“PHS Act”), as the same
may be amended from time to time; and (ii) such standards of good

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

manufacturing practice as are required by the EU and other organizations and/or
governmental agencies in countries in which a Product is intended to be
manufactured or sold, to the extent such standards are not less stringent than
United States or EU GMP. Bulk development (active pharmaceutical ingredient
“API”) and commercial manufacturing will comply with the current ICH Q7A
guidelines. During development phase, the clinical supplies for studies
conducted in the US will comply with cGMP according to FDA. For studies
conducted in the EU, clinical supplies will comply with annex 13 of the EU GMP
guideline.

 

1.24    “Grünenthal-ADF-Formulation” means any formulation or drug delivery
system which is a ADF Formulation useful for delivery of CG-5503 including, but
not limited to, sustained release matrix tablet formulations of the Product and
other formulations or drug delivery systems developed by or for Grünenthal based
on Grünenthal technology or Grünenthal Know-How but specifically excluding an
OMP-ADF-Formulation.

 

1.25    “Grünenthal-ADF-Formulation Patent” means any Patent Controlled by
Grünenthal and claiming a Grünenthal-ADF-Formulation and/or Grünenthal-
ADF-Formulation Improvement.

 

1.26    “Grünenthal Know-How” means Information which (i) Grünenthal discloses
to OMP under this Agreement or specifically in anticipation of this Agreement;
and (ii) is within the Control of Grünenthal, and (iii) is confidential as
defined in Article 8.

 

1.27    “Grünenthal Background Patent” means any Patent filed, published or
issued as of the Combined Territories License Agreement Effective Date relevant
or pertaining to the Field which is directed to, but is not limited to, a
method, apparatus, material, process of manufacture or use of CG-5503 or Product
and which Patent is Controlled by Grünenthal or its Affiliates on the Combined
Territories License Agreement Effective Date, however, not including
Grünenthal-ADF-Formulation Patents. Grünenthal Background Patents include those
listed in Exhibit 1.29.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

1.28    “Grünenthal Patents” means Grünenthal Background Patents, Improvement
Patents Controlled by Grünenthal and Grünenthal-ADF-Formulation Patents.

 

1.29    “Grünenthal Territory” means every country or political subdivision in
the world, with the exception of OMP Territory.

 

1.30    “ICH” means the International Conference on Harmonization of Technical
Requirements for Registration of Pharmaceuticals for Human Use.

 

1.31    “Improvement” means any improvement, enhancement or invention conceived
and/or reduced to practice, as a result of activities carried out in connection
with RAP, Commercialization or manufacture of Product, by employees or agents of
the Parties or a Third Party under a contract with either Party or an Affiliate
of either Party during the Term of this Agreement directed to CG-5503, Product
or Combination Products, but explicitly excluding OMP Technology or
ADF-Formulations.

 

1.32    “Improvement Patents” means any Patent claiming an Improvement.

 

1.33    “IND” means an investigational new drug application filed with the FDA
as more fully defined in 21 C.F.R. §312.3 and in EU clinical trial authorisation
(CTA) or its equivalent in any country.

 

1.34    “Information” means all information including screens, models,
inventions, practices, methods, knowledge, know-how, skill, experience, test
data including pharmacological, toxicological and clinical test data, analytical
and quality control data and preliminary and final reports thereof, marketing,
pricing, distribution, costs, sales, manufacturing data, and patent and legal
data or descriptions (to the extent that disclosure thereof would result in loss
or waiver of privilege or similar protection) and methods in each case relating
to CG-5503 and/or the Product.

 

1.35    “Management Committee” or “MC” means a team consisting of the managing
director responsible for research and development at Grünenthal and the
President of research and development of OMP’s Affiliate, Johnson & Johnson
Pharmaceutical Research and Development, LLC.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

1.36    “Market Exclusivity” means, on a country-by-country basis, the period of
time during which there is no product containing CG-5503 being sold by a Third
Party, other than Affiliates, in the OMP Territory, excluding such product
containing CG-5503 from such Third Parties for which claims of infringement
according to Section 7.9 have not led to a final, non-appealable decision of a
court and such claims of infringement are continuing to be pursued in court.

 

1.37    “NDA” means a new drug application and all supplements filed pursuant to
the requirements of the FDA, including all documents, data and other information
concerning Product which are necessary for or included in, FDA approval to
market a Product as more fully defined in 21 C.F.R. §314.50 et. seq.

 

1.38    “Net Sales” means the gross amount billed, as of the date of invoicing,
by OMP or an Affiliate of OMP for sales of a Product to a Third Party which is
other than an Affiliate less: to the extent actually allowed or taken for the
OMP Territory

 

(a)       normal and customary discounts, including cash discounts, discounts to
managed care or similar organizations or government organizations, rebates paid,
credited, accrued or actually taken, including government rebates such as
Medicaid chargebacks or rebates, and retroactive price reductions or allowances
actually allowed or granted from the billed amount, and commercially reasonable
and customary fees paid to distributors (other than to a distributor that is an
Affiliate of OMP),

 

(b)       credits or allowances actually granted upon claims, rejections or
returns of such sales of Products, including recalls, regardless of OMP
requesting such recalls,

 

(c)       freight, postage, shipping and insurance charges paid for delivery of
such Product, to the extent billed separately on the invoice and paid by the
buyer, and

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(d)       taxes, duties or other governmental charges levied on or measured by
the billing amount when included in billing, as adjusted for rebates,
charge-backs and refunds to the extent actually paid or allowed by the selling
party; and

 

(e)       actual uncollectible accounts receivables determined in accordance
with U.S. generally accepted accounting practices, consistently applied.

 

1.39    “New Chemical Entity” means a chemical entity which has or is claimed to
have therapeutic activity and is claimed in a composition of matter Patent in
the United States or EU.

 

1.40    “OMP-ADF-Formulation” means any formulation or drug delivery system
which is an ADF Formulation useful for the delivery of CG-5503 developed by or
for OMP including, but not limited to, ADF Formulations based on OMP Technology,
but specifically excluding a Grünenthal-ADF-Formulation.

 

1.41    “OMP-ADF-Formulation Patent” means any Patent Controlled by OMP and/or
its Affiliates claiming an OMP-ADF-Formulation and/or OMP-ADF- Formulation
Improvement.

 

1.42    “OMP Know-How” means Information which (i) OMP discloses to Grünenthal
under this Agreement or specifically in anticipation of this Agreement; and (ii)
is within the Control of OMP, and (iii) is confidential as defined in Article 8.

 

1.43    “OMP Patent” means any Patent filed, published or issued as of the
Combined Territories License Agreement Effective Date, which Patent is
Controlled by OMP and/or its Affiliates which would be infringed by the
manufacture, use or sale of the Product, and OMP ADF-Formulation Patents and
Improvement Patents Controlled by OMP or its Affiliates.

 

1.44    “OMP Technology” means an osmotic system for oral administration which
is intended to function by releasing the active agent or agents on a controlled
basis within the human gastrointestinal tract after being swallowed, or any
component of such system to the extent it is used in the system, and which is
Controlled by OMP or its Affiliates.

 

1.45    “OMP Territory” shall mean the United States.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

1.46    “OOP” means out of pocket expenses related to the Regulatory Approval
Preparation Plan and paid to Third Parties.

 

1.47    “Patent” means any issued patents, patent applications and patents
issuing therefrom, together with any extensions, registrations, confirmations,
reissues, continuations, divisions, continuations-in-part, reexaminations,
substitutions or renewals thereof.

 

1.48    “Phase I” means the portion of the clinical program which provides for
the first introduction into humans of a Product including small scale clinical
studies conducted in normal volunteers or patients to obtain information
relating to Product safety, tolerability, pharmacological activity or
pharmacokinetics, as more fully defined in 21 C.F.R. 312.21 (a) and such
definitions as used by the EU and other organizations and governmental agencies
in countries in which the Product is intended to be tested.

 

1.49    “Phase II” means that portion of the clinical program which provides for
the definitive, well controlled clinical trials of the Product in patients,
including clinical studies conducted in patients and designated to indicate
clinical efficacy safety, as well as to obtain an indication of the dosage
regimen required as more fully defined in 21 C.F. R. 312.21(b) and such
definitions as used by the EU and other organizations and governmental agencies
in countries in which the Product is intended to be tested.

 

1.50    “Phase III” means that portion of the clinical program which provides
for large scale clinical studies conducted in a sufficient number of patients to
establish Product clinical efficacy for one or more indications and its safety,
as more fully defined in 21 C.F.R. 312.21 (c) and such definitions as used by
the EU and other organizations and governmental agencies in countries in which
the Product is intended to be tested.

 

1.51    “Phase IIIB” means product support clinic trials of a Product commenced
after the first Drug Approval Application is filed in the United States or the
EU, which trials are directed to seeking Regulatory Approval for additional
label claims.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

1.52    “Phase IV” means product support clinical trials of a Product with an
approved label claim commenced after receipt of Regulatory Approval for such
Product in the country where such trial is being conducted.

 

1.53    “Product” means any pharmaceutical formulations for all and any human
use within the Field containing CG-5503 as active pharmaceutical ingredient
including Combination Product, but excluding combinations of CG-5503 with one or
more New Chemical Entities.

 

1.54    “Promotion” means those activities, including, without limitation,
congresses, opinion leader management, physicians meeting, professional
education, detailing, advertising and distributing samples of a Product normally
undertaken by a pharmaceutical company’s sales force to implement marketing
plans and strategies aimed at encouraging the appropriate use of a particular
Product. When used as a verb, “Promote” shall mean to engage in Promotion.

 

1.55    “Proportionate Share” shall have the meaning set forth in Section
6.1(f).

 

1.56    “Regulatory Approval” means all official approvals by government,
pricing, health or drug evaluation authorities (such as National Institute for
Clinical Excellence in UK or Commission de Transparence in France) in a country
(or supra-national organizations, such as the EMEA) which are required for first
use or sale, including, importation, manufacture (where manufacture is
required), pricing or reimbursement of a pharmaceutical product in such country
where required.

 

1.57    “Regulatory Approval Preparation” or “RAP” means all activities
performed by or on behalf of either Party with respect to a Product in the
United States and the EU in connection with the Core Regulatory Approval
Preparation Program or Core Pediatric Program necessary to obtain Regulatory
Approval of a Product for the indication under study. “Regulatory Approval
Preparation” shall include, without limitation, all activities related to
clinical studies of a potential therapeutic in humans including, CM&C,
preclinical testing, test method development and stability testing, toxicology,
pharmacokinetics, pharmacoeconomic studies, mechanism studies, quality
assurance/quality

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

control, clinical studies, clinical supplies, regulatory affairs, statistical
analysis and report writing. When used as a verb, “Prepare Regulatory Approval”
shall mean to engage in Regulatory Approval Preparation.

 

1.58    “Regulatory Approval Preparation Budget” or “RAP Budget” means the
budget to carry out the Core Regulatory Approval Preparation Program as
contained in the Regulatory Approval Preparation Plan.

 

1.59    “Regulatory Approval Preparation Costs” or “RAP Costs” means costs
associated with Regulatory Approval Preparation of the Product according to the
Core Regulatory Approval Preparation Program and as further defined in the
Regulatory Approval Preparation Plan in Exhibit 1.63 and Exhibit 1.63.1.

 

1.60    “Regulatory Approval Preparation Plan” or “RAP Plan” means the plan and
Regulatory Approval Preparation Budget describing the Core Regulatory Approval
Preparation Program. An initial Regulatory Approval Preparation Plan is attached
hereto as Exhibit 1.63 and incorporated herein. An additional Regulatory
Approval Preparation Plan is attached hereto as Exhibit 1.63.1 and incorporated
herein. All RAP Plans may be modified pursuant to Section 11.1(b).

 

As for this Agreement and unless otherwise specified the term “RAP Plan” shall
mean the RAP Plan 1.63 and the RAP Plan 1.63.1 and the respective plans within
the Core Pediatric Program.

 

1.61    “RAP Subcommittee” or “RSC” shall have the meaning recited in Section
10.3.

 

1.62    “Regulatory Authority” means any national (e.g., the FDA),
supra-national (e.g., the European Commission, the Council of the European
Union, or the EMEA), regional, state or local regulatory agency, department,
bureau, commission, council or other governmental entity in each country of the
world involved in the granting of Regulatory Approval.

 

1.63    “Steering Committee” or “SC” shall have the meaning set forth in Section
10.1.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

1.64    “Term” shall have the meaning set forth in Section 15.1.

 

1.65    “Territory” means those countries, possessions, or political subdivision
within, as applicable, the OMP Territory or the Grünenthal Territory.

 

1.66    “Territory Specific Regulatory Approval Preparation” or “Territory
Specific RAP” is defined in Section 11.8.

 

1.67    “Third Party” means any entity other than Grünenthal and OMP.

 

1.68    “Trade Secret” means an Improvement for which deliberately a patent
application has not been filed and which is confidential according to Article 8.

 

1.69    “United States” means the United States of America, the District of
Columbia and Puerto Rico.

 

1.70    “Valid Patent Claim” means a claim in any unexpired Grünenthal Patent,
which has not been held invalid by a non-appealed or unappealable decision by a
court or other appropriate body of competent jurisdiction. The scope of a Valid
Patent Claim shall be limited to its terms as set forth in the Patent itself and
as further defined by any court, body or law of competent jurisdiction.

 

1.71    “Year of Sale” means a 365 day (or 366 day in a leap year) period. The
“First Year of Sale” means the Year of Sale beginning on the date of the First
Commercial Sale and ending 365 days (or 366 days in a leap year) thereafter.

 

1.72    “Agreement” means this License Agreement.

 

1.73    “2004 First Amendment” means the amendment of the Combined Territories
License Agreement effective as of December 23, 2004.

 

1.74    “1.63.1 ADF” means an abuse deterrent formulation for the Product
developed in accordance with RAP Plan 1.63.1.

 

1.75    “1.63.1 Patents” means any Patent Controlled by a Party and claiming a

1.63.1 ADF.

 

1.76    “Commercial Supply Manufacturing License” shall have the meaning set
forth in Section 2.1(b).

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

1.77    “Earned Royalty” means the OMP Territory Earned Royalty.

 

1.78    “Last Patent” shall have the meaning set forth in Section 6.8(e).

 

1.79    “Minimum Royalty for OMP Territory” shall have the meaning set forth in
Section 4.4(a).

 

1.80    “Last Combo Patent” shall have the meaning set forth in Section 6.8(f).

 

1.81    “Minimum Royalty for OMP Territory” shall have the meaning set forth in
Section 4.4(a).

 

1.82    “OMP Territory Earned Royalty” shall have the meaning set forth in
Section 6.4.

 

1.83    [Reserved]

 

1.84    [Reserved]

 

1.85    “Responsible Party for Clinical Trials” means the Party subsequently
defined by mutual agreement of the Parties.

 

1.86    “Study KF5503/21” means the bunionectomy phase II b clinical study
conducted prior to the Effective Date and referred to by the Parties as “Study
KF5503/21.”

 

1.87     [Reserved]

 

1.88    “Grünenthal-ADF-Formulation Improvements” means any improvement,
enhancement or invention, other than an Independent ADF Formulation Improvement,
conceived and/or reduced to practice, as a result of activities carried out
within the scope of any regulatory approval preparation activities and the joint
activities of Grünenthal and OMP for the development of the
Grünenthal-ADF-Formulation, including but not limited to its manufacture and/or
analytics based on Grünenthal technology and/or Grünenthal Know- How by
employees or agents of the Parties or a Third Party under a contract with either
Party or an Affiliate of either Party during the Term of this Agreement directed
to Grünenthal-ADF-Formulation.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

1.89    “OMP-ADF-Formulation Improvements” means any improvement, enhance- ment
or invention, other than an Independent ADF Formulation Improvement, conceived
and/or reduced to practice, as a result of activities carried out within the
scope of the RAP activities and the joint activities of Grünenthal and OMP for
the development of the OMP-ADF-Formulation, including but not limited to its
manufacture and/or analytics based on OMP technology and/or OMP Know-How by
employees or agents of the Parties or a Third Party under a contract with either
Party or an Affiliate of either Party during the Term of this Agreement directed
to OMP-ADF-Formulation.

 

1.90    “Independent ADF Formulation Improvements” means any improvement,
enhancement or invention conceived and/or reduced to practice, by employees or
agents of only one of the Parties or a Third Party under a contract with only
one of the Parties or an Affiliate of only one of the Parties during the Term of
this Agreement outside the scope of the RAP activities and the joint activities
of Grünenthal and OMP for the development of an ADF Formulation as such party
can prove by written records and thereafter introduced by such Party into the
joint development of a ADF Formulation for the Product under this Agreement
which improvement can be used in making not only an ADF Formulation but which
can also be used in making other products including but not limited to its
manufacture and/or analytics.

 

1.91    “Independent ADF Formulation Improvement Patent” means any Patent
claiming an Independent ADF Formulation Improvement.

 

1.92    “Phase IIIB2” means product support clinical trials of the Product other
than Phase IIIB, commenced after the first Drug Approval Application is filed in
the United States or the EU and prior to receipt of Regulatory Approval in the
US or the EU.

 

1.93    “Core Pediatric Program” means all pediatric program elements including
preclinical and clinical studies, CM&C work packages and any activities for
galenical forms necessary in both the OMP Territory and Grünenthal Territory for
conducting clinical studies in pediatric patients, the results of which support
Products resulting from either RAP Plan 1.63 and/ or 1.63.1. For the

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

avoidance of doubt, any element necessary in only one Party's Territory is not
part of the Core Pediatric Program.

 

1.94    "Post Approval Commitments" means a study or data collection effort
mandated by the applicable Regulatory Authority as a condition of Regulatory
Approval in the US or the EU.

 

1.95    “Risk Management Plan” or “RMP” means a description of the product
specific risk management system in addition to the general description of the
pharmacovigilance system and more specific with regard to the EU the Guideline
on Risk Management Systems for Medicinal Products for Human Use
(EMENCHMP/96268/2005) and with regard to the United States FDA Guidance for
Industry: Development and Use of Risk Minimization Action Plans, and a Risk
Evaluation Mitigation and Strategy.

 

ARTICLE 2              LICENSE GRANTS

 

2.1      Licenses to OMP

 

(a)       Licenses for Commercialization. Grünenthal hereby grants to OMP an
exclusive (even as to Grünenthal), royalty bearing, license, within the Field,
under the Grünenthal Background Patents, Improvement Patents Controlled by
Grünenthal and Grünenthal Know-How, to Commercialize Products within the OMP
Territory. OMP shall have the right, to be exercised within [***] after receipt
of the notice of an Improvement pursuant to Section 7.3, to refuse to accept a
license under know-how or patent rights resulting from such Improvement, or, if
accepted, to terminate any such license at any time upon [***] written notice to
Grünenthal. In addition, Grünenthal shall have no right to use, import, offer
for sale, sell or distribute a product containing CG-5503 in the OMP Territory
outside the Field, without the prior written consent of OMP, which shall not be
unreasonably withheld. During the Term of this Agreement OMP shall not have any
right to sell, offer for sale, distribute and have sold Product for any
indication outside the Field or outside the OMP Territory, provided that the
foregoing shall not be interpreted to diminish the rights of either Party
pursuant to any other license agreement between OMP and Grunenthal, or their
Affiliates. Grünenthal hereby grants to

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

OMP a non-exclusive paid up license within OMP Territory within the Field under
the Grünenthal Background Patents, Improvement Patents Controlled by Grünenthal
and Grünenthal Know-How to use all Information obtained from Grünenthal’s
activities conducted under RAP Plan 1.63 and RAP Plan 1.63.1 including Study
KF5503/21 for OMP’s use in OMP Territory.

 

(b)       Licenses for Production. Grünenthal hereby grants to OMP a
non-exclusive royalty bearing, license, within the Field under the Grünenthal
Background Patents, Improvement Patents Controlled by Grünenthal and Grünenthal
Know-How, to make or have made Products worldwide for the purpose of
Commercialization of Products within the OMP Territory under the license for
Commercialization granted under Section 2.1(a) ("Commercial Supply Manufacturing
License").

 

(c)       Licenses For Regulatory Approval Preparation. Grünenthal hereby grants
to OMP:

 

(i)        a non-exclusive, paid up worldwide license, within the Field, under
the Grünenthal Background Patents, Improvement Patents Controlled by Grünenthal
and Grünenthal Know-How for use in carrying out Regulatory Approval Preparation
of the Product in the OMP Territory,

 

(ii)       Grünenthal hereby grants to OMP a non-exclusive, paid up license
within OMP Territory within the Field under the Grünenthal Background Patents,
Improvement Patents Controlled by Grünenthal and Grünenthal Know-How to use all
Information obtained from Grünenthal’s activities conducted under RAP Plan 1.63
and RAP Plan

1.63.1 including Study KF 5503/21 for OMP’s use to obtain Regulatory Approval in
OMP Territory.

 

(d)       Licenses for Improvement Patents outside the Field. According to
Section 7.4, Grünenthal shall own any Improvement Patent based on joint
inventorship. In the situation wherein an employee, agent, officer, or
contractor of OMP or OMP’s Affiliates is an inventor, Grünenthal grants to OMP a
worldwide non- exclusive, paid-up license under all such Improvement Patents for
use outside the Field.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(e)       Payment for Licenses. The royalties that are payable pursuant to this
Section 2.1 are set forth in Article 6.

 

(f)        Right to Sublicense. The licenses granted to OMP pursuant to this
Section 2.1 include the right to sublicense to Affiliates of OMP.

 

2.2    Licenses to Grünenthal

 

(a)       Licenses for Commercialization. OMP hereby grants to Grünenthal an
non- exclusive, royalty bearing, license, within the Field under the Improvement
Patents directed to Combination Products Controlled by OMP (“Improvement
Combination Patents”) and OMP Know-How, to Commercialize Products within the
Grünenthal Territory. OMP hereby grants to Grünenthal a non- exclusive royalty
free license within the Field under Improvement Patents Controlled by OMP other
than Improvement Combination Patents to Commercialize Products within the
Grünenthal Territory; provided, however, that Grünenthal shall be responsible
for any payments due to a Third Party in the Grünenthal Territory under such
Improvement Patents.

 

(b)       Licenses for Production. OMP hereby grants to Grünenthal a
non-exclusive royalty bearing, license, within the Field under the Improvement
Combination Patents and OMP Know-How, to make or have made Products worldwide
solely for the purpose of Commercialization of Products within the Grünenthal
Territory under the license for Commercialization granted under Section 2.2(a).
OMP hereby grants to Grünenthal a non-exclusive royalty free license within the
Field under Improvement Patents other than Improvement Combination Patents to
make or have made Products worldwide solely for the purpose of Commercialization
of Products within the Grünenthal Territory under the license for
Commercialization granted under Section 2.2(a);  provided, however, that
Grünenthal shall be responsible for any payment due to a Third Party in the
Grünenthal Territory under such Improvement Patents.

 

(c)       Licenses For Regulatory Approval Preparation. (i)OMP hereby grants to
Grünenthal a non-exclusive, paid up worldwide license, within the Field, under
the Improvement Patents Controlled by OMP and OMP Know-How for use in carrying
out Regulatory Approval Preparation of the Product in the Grünenthal

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Territory. (ii) OMP hereby grants to Grünenthal an exclusive, paid up worldwide
license to use all Information obtained from OMP’s activities conducted under
RAP Plan 1.63 and 1.63.1 to obtain Regulatory Approval in Grünenthal Territory.

 

(d)       Payment for Licenses. The royalties that are payable pursuant to
Section 2.2 are set forth in Section 6.4(c) of this Agreement.

 

(e)       [Reserved]

 

(f)        Right to Sublicense. The licenses granted to Grünenthal pursuant to
this Section 2.2 include the right to sublicense to Affiliates of Grünenthal or
to licensees of Grünenthal.

 

2.3      Conversion of License to OMP to Non-exclusive License.

 

(a)       For Products based on Improvement Patents Controlled by Grünenthal the
exclusive rights granted in Sections 2.1(a) shall be converted to a non-
exclusive license upon the date OMP has provided notice according to Section
2.3(b) to Grünenthal that OMP or a Third Party having rights from OMP will start
Commercialization of a Product based on Improvement Patents in the Grünenthal
Territory according to Section 2.2(a).

 

(b)       Notice to Grünenthal to enter market. OMP shall give Grünenthal [***]
prior written notice before start of Commercialization of a Product based on
Improvement Patent in the Grünenthal Territory (with specific reference to
Section 2.3).

 

ARTICLE 3              MANUFACTURE

 

3.1      Manufacturing by the Parties. Grünenthal shall be responsible for the
manufacture of the Product,  including the manufacture of bulk active
pharmaceutical ingredient and appropriate pharmaceutical formulation for the
Grünenthal Territory. OMP shall be responsible for the manufacture of the
Product, including the manufacture of bulk active pharmaceutical ingredient and
appropriate pharmaceutical formulation, for the OMP Territory and have available
the necessary and timely production capacity to supply OMP’s

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

respective markets. Should the manufacturing at separate Grünenthal and OMP
sites appear to be economically not feasible, the Parties agree to discuss a
solution in good faith.

 

3.2      Transfer of Manufacturing Know-How. Grünenthal shall supply OMP with
the available manufacturing know-how and technical assistance to manufacture
Product, including the Grünenthal (Non-ADF SR-Matrix, the Grünenthal formulation
currently used in clinical trials) slow release formulation and/or
Grünenthal-ADF-Formulation, if so decided by the Parties according to Section
12.1(b), if OMP decides to Commercialize such formulation. Such transfer shall
occur in sufficient time to enable the execution of respective activities of the
Regulatory Approval Preparation Plan according to the timetables, recited
therein, or the appropriate regulatory filings and commercial launch in OMP´s
Territory.

 

3.3      Exchange of Manufacturing Know-how. OMP and Grünenthal will exchange,
on a regular and periodic basis, but in no event less than once per year,
manufacturing know-how relating to the Product, including with respect to the
manufacture of bulk active pharmaceutical ingredient and the ADF Formulation
(provided both are manufacturing the same ADF Formulation) and will give experts
of the other Party sufficient opportunity to visit the production facility and
to view the production process, under appropriate conditions of confidentiality.
Significant improvements to the manufacturing process, however, will be
communicated promptly to the other Party.

 

ARTICLE 4              COMMERCIALIZATION

 

4.1      Commercialization Efforts. OMP shall conduct all activities
contemplated by this Agreement in a manner which does not cause any material
injury to either the reputation of Grünenthal or to the goodwill of any Product
sold in the Grünenthal Territory. Grünenthal shall conduct all activities
contemplated by this Agreement in a manner which does not cause any material
injury to either the reputation of OMP or to the goodwill of any Product sold in
the OMP Territory. Activities contemplated by this Agreement taken due to drug
safety

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

concerns or pursuant to Section 4.2 shall not be considered to cause material
injury as mentioned above.

 

4.2      Pricing. OMP shall have sole decision authority and discretion with
respect to all pricing decisions and reimbursement strategies relating to the
OMP Territory. Grünenthal shall have sole decision authority and discretion with
respect to all pricing decisions and reimbursement strategies relating to all
countries in the Grünenthal Territory.

 

4.3      Marketing Responsibilities/Marketing Materials

 

(a)       In General. With respect to the OMP Territory for OMP, and any EU
country for Grünenthal, each Party shall provide to the other Party exemplars
for each marketing and promotional platform or campaign for each Product
contemporaneous with the implementation of such platform or campaign, provided,
however, that no such submission shall be required where there is no material
deviation from any prior submission.

 

(b)       Party Name on Product Promotional Materials. Grünenthal shall have the
option to be exercised no later than [***] after OMP´s notice (with specific
reference to this Section) to Grünenthal of OMP’s internal decision to file the
Drug Approval Application prior to the envisaged First Commercial Sale in the
United States (to the extent permitted by the applicable laws and regulations of
each country in which such Product promotional materials are to be presented),
to require OMP to include on all Product promotional materials for Product sold
in the OMP Territory the name and logo of Grünenthal and shall describe
Grünenthal as being licensor of the Product and name and logo of OMP, or the
appropriate Affiliate, under a format, style and size to be agreed between the
Parties provided, however, that the font or, as applicable, the size to be used
for Grünenthal’s name and logo shall be no less than fifty percent (50%) of the
font or, as applicable, the size to be used for OMP or the appropriate
Affiliate’s name and logo. To the extent permitted by the applicable Regulatory
Authorities, Grünenthal will include on all promotional materials for Product
using the OMP-ADF- Formulation sold in its Territory the names and logos of both
Grünenthal and

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

OMP, or the appropriate Affiliate and a logo designating the OMP Technology used
in the OMP-ADF-Formulation, under a format, style and size to be agreed between
the Parties; provided, however, that the font or, as applicable, the size to be
used for OMP’s or the appropriate Affiliate’s name and logo shall be no less
than fifty percent (50%) of the font or, as applicable, the size to be used for
Grünenthal.

 

4.4      Minimum Royalties in the OMP Territory

 

(a)       OMP Territory:

 

(i)        Subject to all terms and conditions of this Agreement, OMP shall have
to pay for the Product sold in the OMP Territory, the following minimum
royalties (“Minimum Royalty for OMP Territory”) in the OMP Territory beginning
with the [***] Year of Sale and ending at the end of the [***] Year of Sale
following First Commercial Sale in the OMP Territory pursuant to the Combined
Territories License Agreement: Beginning with the [***] Year of Sale, the
Minimum Royalty for OMP Territory for a given Year of Sale shall be the royalty
due for the prior Year of Sale. [***]. However, in the event, the effective
royalties are higher than the Minimum Royalty for OMP Territory, the effective
royalty shall apply. In no event shall Minimum Royalty for OMP Territory be
payable for more than the first [***] Years of Sale even if the Product is sold
in the OMP Territory in a different form or formulation or is a Combination
Product.

 

(ii)       If OMP has not achieved the Minimum Royalty for OMP Territory due
hereunder for a Year of Sale, OMP shall pay Grünenthal the difference

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

between the Minimum Royalty for OMP Territory due and the royalties actually
paid for that particular Year of Sale. Such difference shall be due and payable
as an adjustment when the next OMP Territory Earned Royalty payment is due
according to Section 6.12.

 

(iii)      In the event of the abatement or reduction of the OMP Territory
Royalties in accordance with Sections 6.8, 6.9 and 6.11, the Minimum Royalty for
OMP Territory shall be adjusted proportionately.

 

(b)       [Reserved]

 

(c)       The Minimum Royalty for OMP Territory shall be abated during the
calendar year and during any subsequent period in which any of the following
conditions exist and are continuing to materially impact the marketing of the
Product: The Product(s) have been withdrawn from the market by OMP

 

(i)        in response to a regulatory agency request, threat or order to
withdraw or recall such product, or

 

(ii)       for reasons related to safety or product defects pertinent to safety,
which in OMP’s view, subject to Grünenthal´s approval, which shall not be
unreasonably withheld or delayed, warrant a voluntary recall of the Product.

 

(d)       No earlier than [***] following the occurrence of one or more of the
following conditions, OMP may notify Grünenthal of such condition(s) and the
Parties shall negotiate in good faith the size of any reduction (between 1 and
100%) of the Minimum Royalty for OMP Territory, for the calendar year and any
subsequent period in which any of the following conditions exist and are
continuing to materially impact the marketing of the Product;

 

(i)        sales are reduced as a result of material regulatory issues which
arise in connection with the Product such as “Dear Doctor letters”, or

 

(ii)       sales are reduced as a result of material supply problems or lack of
supply not caused by OMP or that are a result of a force majeure event.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(iii)      sales are reduced as a result of a negative market impact based on a
negative drug class effect on the class in which class the Product is contained,
or

 

(iv)      sales are reduced as a result of other external impacts, including,
but not limited to, governmental price restrictions, parallel import of the
Product, compulsory licenses for the Product, changes in managed care treatment
protocols

 

4.5      Promotion Compliance Responsibilities. In the OMP Territory, OMP, in
Promoting a Product, and Grünenthal, to the extent Grünenthal participates in a
scientific or educational event held in the OMP Territory shall in all material
respects conform their practices and procedures relating to such Promotion to
the FD&C Act, the PHS Act, the Pharmaceutical Research and Manufacturers of
America (“PhRMA”) Code of Pharmaceutical Marketing Practices (the “PhRMA Code”)
and the American Medical Association (“AMA”) Guidelines on Gifts to Physicians
from Industry (the “AMA Guidelines”), as the same may be amended from time to
time, and promptly notify the other Party of and provide a copy of any material
correspondence or other reports with respect to Promotion of a Product submitted
to or received from the FDA, PhRMA or the AMA relating to the FD&C Act, the PHS
Act, the PhRMA Code, or the AMA Guidelines.

 

Each Party shall be fully responsible for disseminating accurate information
regarding any Product to its professional sales representatives. The Parties
agree to use Commercially Reasonable and Diligent Efforts to exchange copies of
their respective promotional materials in the OMP Territory and EU. To the
extent a Party engages in communication over the Internet such communication
shall clearly implement reasonable safeguards designed to prevent transmission
to or access to target audiences in the other Party’s Territory.

4.6      Distribution.

 

(a)       Customer Support. OMP shall use Commercially Reasonable and Diligent
Efforts to perform all customer support services which require Regulatory

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Approval, acquiescence or oversight, including, without limitation,
pharmacovigilance, responding to physician inquiries, or professional education.

 

(b)       Recalls. The Parties and their distributing entities shall use good
faith and reasonable efforts to coordinate any decision making and communication
with respect to issuing a recall, market withdrawal, suspension or correction of
any Product, provided that, to the extent required by regulatory timeframes or
public safety considerations, each Party shall have the right to make the
product recall decision within its Territory. Each Party shall notify the other
Party promptly (and in any event within [***] of receipt of written notice) if
any Product is alleged or proven to be the subject of a recall, market
withdrawal, suspension or correction in any country in its Territory. During the
term of this Agreement, each Party shall be responsible for: handling and
implementing all recalls and market withdrawals, suspensions or corrections of
any Product in its Territory. The other Party will make available to the Party,
upon request, all of the other Party’s pertinent records that the other Party
may reasonably request to assist it in effecting any of the foregoing. A Party
shall have no obligation to reimburse or otherwise compensate the other Party
for any Losses (as defined in Section 13.1) that may arise in connection with
any such recall, market withdrawal, suspension or correction relating to such
other Party´s Territory, unless and to the extent such action is due to
negligence or willful misconduct in the manufacturing distribution, Promotion
and post marketing surveillance activities, of Product, by such Party. Any
investigation conducted in connection with such an action shall be undertaken
jointly by the Parties.

 

4.7      [Reserved]

 

4.8      Contact to Supra National Agencies. Grünenthal shall have the sole
right and responsibility to initiate and/or respond to all contacts with supra
national agencies (i.e. WHO), other than Regulatory Authorities, worldwide
relating to the Products, which are Commercialized. Grünenthal shall retain
responsibility for communicating with all such agencies and satisfying all
requirements regarding the Products. Each Party shall inform the other Party of
the

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

substance of all communication with all such agencies. OMP shall assist
Grünenthal, if Grünenthal requests OMP to do so, and Grünenthal shall, if
requested by OMP, consult with OMP in preparing such communications with the
relevant supra national agency. Each Party shall be permitted to accompany the
other Party to any meeting with such agency, take part in any such
communications and receive copies of all such communications. Notwithstanding
the foregoing, OMP may respond to any agency’s inquiry regarding the Products,
in coordination with Grünenthal, if and only if:

 

(a)       in the reasonable opinion of OMP´s counsel, such response is necessary
to comply with the requirements of any law, governmental order or regulation,
and

 

(b)       OMP has requested the agency to direct the inquiry to Grünenthal
instead of OMP, and such agency has refused such request; but in any such event,
unless in the considered opinion of OMP’s counsel there is a legal prohibition
against doing so, OMP shall immediately notify Grünenthal of such agency’s
inquiry and of OMP’s intention to make such response.

 

ARTICLE 5              TRADEMARK AND APPEARANCE

 

The Parties have selected and developed different trademarks for their
respective Territory i.e. Nucynta®  for the OMP Territory and Palexia®  and
Nucynta®  for the Grünenthal Territory. Each Party’s trademark will be owned by
Grünenthal and upon Grünenthal’s request the trademark Nucynta®  in the OMP
Territory shall be assigned to Grünenthal as described below. In the case of
assignment of this Agreement by OMP to a Third Party, OMP shall simultaneously
assign the trademark Nucynta®  for the OMP Territory to such Third Party. Upon
Grünenthal’s request, such Third Party shall assign such trademark to
Grünenthal. Each Party shall bear the respective costs for such development and
maintenance of the trademark in its Territory. Grünenthal grants to OMP a
royalty free, exclusive license to use the trademark selected by OMP for the OMP
Territory for the Term of the Agreement and after expiration of the Term of
Agreement solely in connection with Product and the Field.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

ARTICLE 6              PAYMENTS

 

In consideration of the assignments, rights and licenses granted under this
Agreement, OMP agrees to pay (or has paid pursuant to the Combined Territories
License Agreement) Grünenthal as follows:

6.1      Considerations of OMP to Grünenthal.

 

(a)       Upfront Payments for OMP Territory.

 

(i)        OMP agreed to pay, and has paid, to Grünenthal a non-refundable
upfront payment of $20,000,000.

 

(ii)       The obligation to make this payment, as well as any other payments
under Section 6.2, shall not once accrued or paid be affected by any termination
under Article 15. A holding of invalidity or unenforceability of any Grünenthal
Patent for which no further appeal is or can be taken shall not affect any
obligation already accrued hereunder but shall only affect those payments
otherwise due under such Grünenthal Patent from the date such holding becomes
final.

 

(b)       Milestone Payments in connection with the OMP Territory.

 

(i)        OMP agreed to make, and made, the following non-refundable payments
to Grünenthal upon the first occurrence of each milestone event with respect to
the Product, during the term of the Combined Territories License Agreement.

 

 

 

Events

Payment

Within [***] of the enrollment of the
fifth patient in the first Phase III Clinical
Trial

[***]

Within [***] of the first NDA filing in
the United States and acceptance for
review by the FDA of a NDA

 [***]

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

 

 

Events

Payment

Within [***] of the Regulatory
Approval in the United States of the first
of the Products

 [***]

 

(ii)       It is understood that in no event should OMP be obligated to make the
payment due on any milestone more than once with respect to the Product,
regardless of the number of indications in the Field for which such Product is
developed or regardless of the number of different forms or formulations which
are developed. In no event shall OMP be obligated to make aggregate milestone
payments in the OMP Territory which exceed $25.0 million for the Products in the
Field.

 

No additional royalties, milestones or up front payments shall be due Grünenthal
for any modifications to, including addition of, RAP Plans.

 

(c)       Payments in connection with RAP Plan 1.63.1 and OMP Territory Earned
Royalty Payments. OMP agreed to pay, and paid, to Grünenthal for the extension
of the license for Regulatory Approval Preparation as per Section 2.1(c) and for
the provision of all data and documents pertaining to Study KF5503/21 and its
use in OMP Territory, a lump sum of twelve million US Dollars ($ 12,000,000).
Such lump sum was agreed upon between the Parties based on the estimated costs
for the Study KF5503/21 plus a surcharge of fifty percent (50%) of such
estimated costs.

 

(d)       [Reserved]

 

(e)       [Reserved]

 

(f)        Proportionate Share. In consideration of the share of the market
potential of either Party´s Territory, of the extension of this Agreement
through the amendments to this Agreement and further in consideration of
Grünenthal’s preparation of Study KF 5503/21, all RAP Costs and FTE resources
including, without limitation, all preclinical, clinical costs and FTE resources
shall be shared between OMP and Grünenthal as follows (each Party’s share being
its “Proportionate Share”):

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(i)        with regard to Products developed in accordance with the RAP Plan
1.63, so that [***] and

 

(ii)       with regard to Products developed in accordance with RAP Plan 1.63.1
so that [***]:

 

(x) [***].

 

(y) [***].

 

(z) [***].

 

6.2      Payment of RAP Costs.

 

With regard to OMP Territory and Grünenthal Territory. Resource plans will be
developed initially and updated on a regular basis with approval from the
Parties. OOPs will be managed by a common account (“OOP Account”), starting on
January 1, 2003. The Parties will make reasonable efforts to share the FTE
resources according to their Proportionate Share as long as reasonable for the
project (time to market, expertise, costs, etc.). The deviation between the
Proportionate Share split will be determined and balanced by a common escrow
account (“FTE Account”) every [***] starting on January 1, 2003. The Exceeding
FTEs will be charged at the then

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

existing OMP FTE rate(s) as specified in the RAP Plan. As used herein,
“Exceeding FTEs” mean the disproportionate amount of FTEs used by one Party
compared to the other Party. FTE funds will accrue interest on an annualized
basis as calculated using British Bankers Association 12 months Euro LIBOR as
fixed two banking days prior to the date on which a Proportionate Share split is
determined and balanced. The FTE Account will be carried forward until the end
of the Core RAP Program. Each Party will have the opportunity, by providing
extra FTEs in order to reduce Exceeding FTEs (provided such are approved in the
RAP Plan), to recover parts of its payment into the FTE Account as long as the
threshold of [***] is not exceeded. If the rolling balance in favor of one Party
exceeds the threshold of [***] the exceeding amount should be paid to the Party
who has provided the Exceeding FTEs. The amount in the FTE Account at the end of
the Core RAP Program should be paid to the Party who provided the Exceeding
FTEs.

 

(i)        Cost Overruns. If actual RAP expenses exceed the RAP Costs and FTE
resources approved by the Parties and allocated to one Party (“Cost Overruns”)
in accordance with this Section 6.2, these Cost Overruns shall be shared by the
Parties according to its Proportionate Share up to an amount of [***] of the
amount approved by the Parties. Additional expenses and FTE resources over and
above the [***] limit shall be solely borne by the Party for the activity that
resulted in such overage; provided, however, that if such Party is able to
demonstrate to the reasonable satisfaction of the other Party that such overage
is in the interest of both Parties, such overage shall be shared by the Parties
according to its Proportionate Share.

 

The share of Cost Overruns does not apply to RAP expenses allocated to one Party
by 100%.

(ii)       Records and Audits. During the term of this Agreement, each Party
shall keep and maintain accurate and complete records showing the expenses
incurred by it in performing its activities under the RAP Plan

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

during the three (3) preceding calendar years, which books and records shall be
in sufficient detail such that RAP Costs can accurately be determined. Upon
[***] prior written notice from a Party (the “Auditing Party”), the other Party
(the “Audited Party”) shall permit an independent certified public accounting
firm of internationally recognized standing and designated by the Parties at its
first meeting, to examine the relevant books and records of the Audited Party
and its Affiliates as may be reasonably necessary to verify the reports
submitted by the Audited Party and the accuracy of any reconciliation report. An
examination by a Party under this Section 6.2 shall occur not more than once in
any calendar year and shall be limited to the pertinent books and records for
any calendar year ending not more than [***] before the date of the request.
Once materials or accounts have been audited, no subsequent audit on them may be
performed. The accounting firm shall be provided access to such books and
records at the Audited Party’s facility(ies) where such books and records are
normally kept and such examination shall be conducted during the Audited Party’s
normal business hours. The Audited Party may require the accounting firm to sign
a standard non- disclosure agreement before providing the accounting firm access
to the Audited Party’s facilities or records. Upon completion of the audit, the
accounting firm shall provide both OMP and Grünenthal a written report
disclosing whether the reports submitted by the Audited Party are correct or
incorrect and the specific details concerning any discrepancies. No other
information shall be provided to the Auditing Party. If the accountant
determines that errors were made in the reports so submitted, the Parties shall
promptly correct any errors and make any necessary adjustments. The Auditing
Party shall bear all costs and expenses of the audit, provided, however, that if
the audit reveals that the Audited Party has incorrectly charged to the OOP
Account the lesser of [***] more than entitled to or an amount exceeding [***]
more than entitled to, the Audited Party shall bear all costs and expenses of
the audit.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

6.3      Earned Royalties For Products in OMP Territory. For the OMP Territory,
OMP shall pay Grünenthal a royalty for the rights granted based on cumulative
moving annual total Net Sales of Products (other than Combination Product) sold
by or for OMP, or its Affiliates according to the following schedule:

 

(a)      [***] within the first [***] after First Commercial Sale in OMP
Territory;

 

(b)     [***] within the months [***] after First Commercial Sale in OMP
Territory if moving annual total Net Sales in OMP Territory do not exceed [***],
otherwise, the royalty rate in 6.3(d) or 6.3(e) will apply depending on the
moving annual total Net Sales in OMP Territory;

 

(c)      [***] starting at the [***] after First Commercial Sale in OMP
Territory provided that moving annual total Net Sales in OMP Territory are below
[***];

 

(d)      [***] if moving annual total Net Sales in OMP Territory are greater
than or equal to [***] but do not exceed [***];

 

(e)      [***] if moving annual total Net Sales in OMP Territory are equal to or
greater than [***].

 

6.4      Royalties For Combination Products in OMP Territory.

 

(a)       In case of a Combination Product sold by or for OMP, or its Affiliates
hereunder in the OMP Territory, the royalties to Grünenthal shall be paid
according to the following schedule, collectively with the payments set forth in
Section 6.3, the “OMP Territory Earned Royalties”:

 

(i)       [***] starting at the First Commercial Sale in OMP Territory provided
that moving annual total Net Sales in OMP Territory are below [***];

 

(ii)      [***] if moving annual total Net Sales in OMP Territory are greater
than or equal to [***] but do not exceed [***];

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(iii)     [***] if moving annual total Net Sales in OMP Territory are equal to
or greater than [***].

 

In the event that OMP has solely developed a Combination Product the applicable
royalty shall be reduced by [***] of Net Sales.

(b)       [Reserved]

 

(c)       Royalties For Combination Products For OMP. In the event that OMP has
solely developed a Combination Product, Grünenthal shall pay OMP a royalty based
on total Net Sales of such Combination Products sold by or for Grünenthal, or
its Affiliates in the Grünenthal Territory of [***].

 

6.5      Royalty Calculation Method. Once the royalty range threshold for the
OMP Territory is exceeded (according to Sections 6.3 or 6.4) the increased OMP
Territory Earned Royalty is due on total Net Sales.

 

In [***] of each year, the cumulative sales of the prior [***] period [***] in
the OMP Territory shall be compared to the royalty ranges as described above in
Sections 6.3 or 6.4, to set the applicable OMP Territory Earned Royalty rate for
the cumulative sales of the prior [***] period [***] in the OMP Territory. An
example of the OMP Territory Earned Royalty calculation is attached hereto as
Exhibit 6.5.

 

6.6      [Reserved]

 

6.7      [Reserved]

 

6.8      Royalty Rate Reduction.

 

(a)       Third Party Patents. In the event OMP pays for the OMP Territory a
royalty to a Third Party which is other than an Affiliate, pursuant to Section
7.11 of this Agreement, then for the OMP Territory, as applicable, OMP shall be
entitled to a credit against the applicable royalty payments due to Grünenthal
under

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

this Agreement of an amount equal to [***] of the royalty actually paid to any
such Third Party which is other than an Affiliate, with the credit not to exceed
[***] of the applicable royalty rate due to Grünenthal under this Agreement.
Additional royalties paid to Third Parties shall not be considered for COGS cap
calculations according to Section 6.9.

 

(b)       Compulsory License. If at any time and from time to time a Third Party
in any country in the OMP Territory shall, under the right of a compulsory
license granted or ordered to be granted by a competent governmental authority,
manufacture, use or sell any Product, with respect to which Earned Royalties
would be payable pursuant to this Agreement, then OMP shall inform Grünenthal
thereof and both Parties shall negotiate in good faith the size of an equitable
reduction of the applicable royalty. In principle, the reduction shall be
calculated after consideration of the territory concerned, the owner of the
compulsory license and its marketing and distribution capability, pricing and
other market conditions at the time of granting such compulsory license, the
royalty rate of the compulsory license, the life cycle phase of the Product and
an equitable distribution of the financial consequences for the Parties.

 

(c)       Competition in OMP Territory.

 

(i)        If, at any time, after a composition of matter Patent claiming
CG-5503 is no longer in force and prior to expiration of the last Grünenthal
Patent claiming the Product (other than Combination Product), or OMP Patent
claiming the Product, OMP loses Market Exclusivity in the OMP Territory, the
amount of OMP Territory Earned Royalties payable to Grünenthal according to
Section 6.3 on all Products in the OMP Territory shall be reduced by [***].
Thereafter, if as a result of OMP´s loss of Market Exclusivity in the OMP
Territory, OMP´s aggregate share of all products containing CG-5503 (excluding
Combination Product) as shown in IMS in such country is less than [***], then
the amount of OMP Territory Earned Royalties payable to Grünenthal for all
Products according to Section 6.3 shall be [***]; when the share is less than
[***], the amount of OMP Territory Earned

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Royalties payable to Grünenthal according to Section 6.3 shall be [***], and
when the share is less than [***], the amount of OMP Territory Earned Royalties
payable to Grünenthal according to Section 6.3 shall be [***]. Thereafter, even
if there is a further loss of OMP´s share of all products containing CG-5503 in
the OMP Territory, the royalty rate reduction shall [***].

 

(ii)       If, at any time, after a composition of matter Patent claiming
CG-5503 is no longer in force and prior to expiration of the last Grünenthal
Patent claiming that particular Combination Product, or OMP Patent claiming that
particular Combination Product, OMP loses Combination Product Market Exclusivity
in the OMP Territory, the amount of OMP Territory Earned Royalties payable to
Grünenthal according to Section 6.4 on such Combination Product in the OMP
Territory shall be [***]. Thereafter, if as a result of OMP´s loss of
Combination Product Market Exclusivity in the OMP Territory, OMP´s aggregate
share of all combination products as shown in IMS containing CG-5503 and the
same active pharmaceutical ingredient(s) in such country is less than [***],
then the amount of OMP Territory Earned Royalties payable to Grünenthal
according to Section 6.4 for such Combination Product shall be [***]; when the
share is less than [***], the amount of OMP Territory Earned Royalties payable
to Grünenthal according to Section 6.4 shall be [***], and when the share is
less than [***], the amount of OMP Territory Earned Royalties payable to
Grünenthal according to Section6.4 shall be [***]. Thereafter, even if there is
a further loss of OMP´s share of all combination products containing CG-5503 and
the same active pharmaceutical ingredient(s), the royalty rate reduction shall
[***]. This mechanism for royalty rate reduction shall be used separately for
each particular Combination Product.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(d)       [Reserved]

 

(e)       Royalties on Know-How of a Product containing CG-5503 as the sole
active pharmaceutical ingredient. On a country-by-country basis, until the last
to expire Grünenthal Patent, or OMP Patent claiming the formulation of the
Product, under which Earned Royalties are being paid (the “Last Patent”), a
royalty for Grünenthal Know-How is included in the Earned Royalty rates. After
the Last Patent expires, the applicable royalty payable for the period recited
in Section 6.11(a) shall be [***].

 

(f)        Royalties on Know-How of Combination Products. On a country-by-county
basis, until the last to expire Grünenthal Patent, or OMP Patent claiming the
formulation of a particular Combination Product, under which royalties are being
paid (the “Last Combo Patent”), a royalty for Grünenthal Know-How is included in
the Earned Royalty rates. After the Last Combo Patent expires, the applicable
royalty payable by OMP for the period recited in Section 6.11(b) shall be [***].

 

(g)       Royalty Rock Bottom.

 

(i)        The total OMP Territory Earned Royalty rate reductions under Sections
6.8(a) through 6.8(f) cannot exceed [***] in the applicable OMP Territory Earned
royalty based on the level of moving annual Net Sales in Section 6.3.
Notwithstanding the foregoing, the effective OMP Territory Earned Royalty rate
shall in no case be below [***] of Net Sales.

 

(ii)       [Reserved]

 

6.9      Cost of Goods Sold Cap (“COGS Cap”) in OMP Territory. Cost of Goods
Sold in OMP Territory should not exceed [***]. The applicable OMP Territory
Earned Royalty rate under consideration of this COGS Cap, shall be calculated in
accordance with the timelines mentioned in Section 6.5. In the event the total
COGS percentage exceeds the [***] threshold, the incremental percentage over the
[***] threshold will be reduced from the OMP Territory

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Earned Royalty rate so that the reduction in royalties will result in a total
COGS equal to [***]. In any instance where a royalty reduction is in effect
(e.g., under Section 6.8) the royalty reduction will also apply to the COGS Cap,
such that the COGS Cap is also reduced. For the purposes of Fully Allocated
Manufacturing Costs/royalty calculation, the average of the OMP and Grünenthal
Fully Allocated Manufacturing Costs, without any internal mark-ups of Affiliates
and/or external royalties to licensors of OMP-ADF- Formulation, shall be used.
In order to determine the average, each Party shall provide to the other Party
its Fully Allocated Manufacturing Costs on an annual basis which shall be
subject to audit by the other Party in accordance with Section 6.12(f). The
rights to audit (with Grünenthal personnel or outside auditors) the records of
OMP and its Affiliates as provided for under this Agreement shall extend to
audits of OMP's and its Affiliates' records for purposes of confirming the Cost
of Goods contemplated by this Section.

 

6.10    Minimum Royalties. Minimum Royalty for OMP Territory shall be paid as
stipulated in Section 4.4.

 

6.11    Term For Royalty Payment.

 

(a)       Earned Royalties for the licenses granted and the Grünenthal Know-How
provided, payable for any Product containing CG-5503 as sole active
pharmaceutical ingredient being sold, shall be paid on a country-by-country
basis from the date of First Commercial Sale of such Product until the last to
expire of any Grünenthal Patent or OMP Patent licensed hereunder containing a
Valid Patent Claim claiming the formulation for such Product (the “Last Patented
Product”). Earned Royalties solely for Grünenthal Know-How payable under Section
6.8(e) for the Last Patented Product being sold shall be paid on a
country-by-country basis from the date of expiration of the last to expire of
any such Grünenthal Patent or OMP Patent licensed hereunder containing a Valid
Patent Claim claiming the Last Patented Product until the generic equivalent (as
defined by the then current FDA regulations) enters the market (“Generic Market
Event”), at which time the applicable OMP Territory Earned Royalty solely for
Grünenthal Know-How payable under Section 6.8(e) shall cease.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(b)       Earned Royalties payable for the licenses granted and the Grünenthal
Know- How provided for each Combination Product being sold shall be paid on a
country-by-country basis from the date of the First Commercial Sale of each such
Combination Product until the last to expire of any Grünenthal Patent or OMP
Patent licensed hereunder containing a Valid Patent Claim claiming the
formulation of the Combination Product (the “Last Combo Product”). Earned
Royalties solely for Grünenthal Know-How payable for the particular Combination
Product being sold on a country-by-country basis from the date of expiration of
the last to expire of any such Grünenthal or OMP Patent licensed hereunder
containing the particular Combination Product until an applicable Generic Market
Event, at which time the applicable OMP Territory Earned Royalty solely for
Grünenthal Know-How payable under Section 6.8(f) shall cease.

 

6.12    Royalty Reports and Records. The following Sections 6.12(a) and (b)
shall apply for the OMP Territory.

 

(a)       During the term of this Agreement and commencing with the First
Commercial Sale of Product, OMP shall furnish, or cause to be furnished to
Grünenthal, written reports, including the applicable royalty payment due,
within sixty (60) days following the end of each [***] for which royalties are
due, showing:

 

(i)        the detailed calculation of monthly Net Sales of all Products sold by
OMP and its Affiliates during the calendar half-year;

 

(ii)       the detailed calculation of Earned Royalties, payable in U.S.
Dollars, which shall have accrued hereunder in respect to such Net Sales;

 

(iii)      the exchange rates used, if any, in determining the amount of
Dollars; and

 

(iv)      any withholding taxes required to be paid from such Earned Royalties.

 

(b)       All Earned Royalties payments to be made by OMP to Grünenthal shall be
made in U.S. Dollars within [***] following the end of [***]

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

for which such Earned Royalties are due, to a Grünenthal bank account.

 

(c)       [Reserved]

 

(d)       To the extent it is necessary to convert currencies for OOPs
development costs incurred pursuant to the RAP plan, such reconciliation shall
be made in Euros using the applicable arithmetic average exchange rate for
converting the applicable currency to the Euro as published by the European
Central Bank on the last business day of each month during the period (quarter).

 

(e)       OMP shall keep accurate records in sufficient detail to enable Earned
Royalties and other payments payable hereunder to be determined. OMP shall be
responsible for all Earned Royalties and late payments that are due to
Grünenthal that have not been paid by OMP and its Affiliates. Late payments
shall accrue interest on an annual basis at a rate of [***].

 

(f)        OMP and its Affiliates shall maintain complete and accurate records,
in accordance with United States generally accepted accounting principles, which
are relevant to costs, expenses and payments under this Agreement and such
records shall be open during reasonable business hours for a period of three (3)
years from creation of individual records for examination at Grünenthal’s
expense and not more often than once each year by a certified public accountant
or other representative selected by Grünenthal and acceptable to OMP for the
sole purpose of verifying the correctness of calculations or such costs,
expenses or payments made under this Agreement. In the absence of material
discrepancies (in excess of [***]) in any request for reimbursement resulting
from such audit, the accounting expense shall be paid by Grünenthal. If material
discrepancies do result, OMP shall bear the reasonable audit expense. Any
records or accounting information received from OMP shall be Confidential
Information for purposes of Article 8.

 

6.13    Taxes.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(a)       OMP will make all payments to Grünenthal under this Agreement without
deduction or withholding for taxes except to the extent that any such deduction
or withholding is required by law in effect at the time of payment.

 

(b)       Any tax required to be withheld on amounts payable under this
Agreement will promptly be paid by OMP on behalf of Grünenthal to the
appropriate Governmental Authority, and OMP will furnish Grünenthal with proof
of payment of such tax. Any such tax required to be withheld will be an expense
of and borne by Grünenthal.

 

(c)       OMP and Grünenthal will cooperate with respect to all documentation
required by any taxing authority or reasonably requested by OMP to secure an
exemption or reduction in the rate of applicable withholding taxes.

 

(d)       If OMP had a duty to withhold taxes in connection with any payment it
made to Grünenthal under this Agreement but OMP failed to withhold, and such
taxes were assessed against and paid by OMP, then Grünenthal will indemnify and
hold harmless OMP from and against such taxes (including interest). If OMP makes
a claim under this Section 6.13(d), it will comply with the obligations imposed
by Section 6.13(b), as if OMP had withheld taxes from a payment to Grünenthal.

 

(e)       OMP shall, in consultation with Grünenthal, take all legally available
and reasonable steps to mitigate any circumstances in OMP’s control which arise
and which would result in any amount becoming subject to deduction or
withholding of taxes pursuant to subclause (a) of this clause, unless Grünenthal
would reasonably be expected to be entitled to a credit or refund for such
deduction or withholding at any time.

 

6.14    Grünenthal As Licensee. The provisions of Sections 6.5, 6.8(a) through
6.8(e), 6.10, 6.11 through 6.13, and 6.16 shall apply with equal force to
Grünenthal in the event that Grünenthal is the licensee of any Combination
Product.

 

6.15    Remittance.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(a)       Payments from OMP to Grünenthal required to be denominated in USD
shall be made to Grünenthal as beneficiary to [***] or another bank account as
provided by Grünenthal.

 

(b)       Payments from OMP to Grünenthal required to be denominated in EUR
shall be made to Grünenthal as beneficiary to [***] or another bank account as
provided by Grünenthal.

 

(c)       [Reserved]

 

6.16    No Overlapping Royalties. Notwithstanding any other provision of this
Agreement, in no event shall any Earned Royalty provided for under any Section
of this Agreement be paid with respect to any sale of a specific Product to the
extent a payment has been paid pursuant to any other Section of this Agreement
with respect to such sale of the same specific Product provided that the higher
payment amount is paid.

 

6.17    Payments to or Reports by Affiliates. Any payment required under any
provision of this Agreement to be made to either Party or any report required to
be made by either Party shall be made to or by an Affiliate of such Party if
designated as the appropriate recipient or reporting entity.

 

ARTICLE 7              IMPROVEMENTS/OWNERSHIP OF INTELLECTUAL PROPERTY

 

7.1      Ownership of Intellectual Property and Patent Rights on Combined
Territories License Agreement Effective Date. Unless otherwise stipulated in
this Agreement the intellectual property position of the Parties remains
unchanged under this Agreement.

 

7.2      Maintenance of Grünenthal Background Patents. Grünenthal agrees to
prosecute, maintain and extend - where possible - all Grünenthal Background

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Patents. This does not apply to Grünenthal-ADF-Formulation Patents unless it is
mutually agreed under Section 12.1(b) to develop the Grünenthal-ADF-
Formulation.

 

7.3      Disclosure of Improvements. Each Party shall disclose to the other
Party any Improvement as soon as reasonably possible after creation. Any
information on the OMP-ADF-Formulation or Grünenthal-ADF-Formulation shall only
be shared under a separate, mutual secrecy agreement as provided for by Section
12.1(b).

 

7.4      Ownership of Improvement Patents and Improvements. Inventorship for
Improvements which are inventions, shall be determined in accordance with U.S.
patent laws for determining inventorship and ownership of Improvement Patents
and Improvements shall be determined based on inventorship. Notwithstanding the
foregoing, in the event of Improvements conceived and/or reduced to practice by
employees, agents, officers, contractors or Affiliates of both Parties ownership
of any such Improvements and resulting Improvement Patents shall be assigned
solely to Grünenthal. In connection with Improvements which do not result in
Improvement Patents or a Trade Secret and where an employee, agent, officer,
contractor or Affiliate of OMP contributed, both Parties shall have an
unrestricted right to use such Improvement for any purpose. During the Term of
this Agreement, Grünenthal shall, at its sole expense, file, prosecute, maintain
and defend Improvement Patents which are owned by Grünenthal. OMP agrees to
cause its employees, agents, officers, contractors or Affiliates to cooperate
fully with Grünenthal in the preparation, filing and prosecution of any
Improvement Patent wherein an employee, agent, officer, contractor or Affiliate
of OMP contributed, and, with respect to such Improvement Patent, to execute any
necessary assignments to Grünenthal. During the Term of this Agreement OMP shall
at its own expense file, prosecute, maintain and defend all Improvement Patents
which are owned by OMP.

 

7.5      Filing of Improvement Patents. All Improvement Patents will be filed at
least in the U.S. and European Patent Office. Each Party shall give prior
written notice to the other Party of the countries in which it intends to file,
including conflict

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
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proceedings, re-examinations, reissuance, oppositions and revocation proceedings
and abandonment and the other Party shall have the right at that Party’s expense
to continue prosecution in countries for which the other Party intends to
abandon. The Parties agree to use reasonable efforts to ensure that any
Improvement Patent filed outside of the United States prior to a U.S. filing
will be in a form sufficient to establish the date of original filing as a
priority date for the purposes of a subsequent U.S. Filing.

 

7.6      Extensions. Each Party shall file and prosecute to obtain extensions of
its respective OMP Patent or Grünenthal Patent in the Field in any countries in
which such extensions are available. Each Party shall provide such assistance as
may reasonably be required for the other Party to fulfil its foregoing
obligations.

 

7.7    Ownership of ADF-Formulation Patents and ADF-Formulation Improvements.

 

(a)       Inventorship for ADF-Formulation Patents shall be determined in
accordance with U.S. patent laws for determining inventorship.
OMP-ADF-Formulation Improvements and/or inventions relating to
OMP-ADF-Formulations shall be solely owned by OMP, regardless of inventorship.
During the Term of this Agreement, OMP shall, at its sole expense, file,
prosecute, maintain and defend OMP ADF-Formulation Patents. Grünenthal agrees to
cause its employees, agents, officers, contractors or Affiliates to cooperate
fully with OMP in the preparation, filing and prosecution of any OMP
ADF-Formulation Patent wherein an employee, agent, officer, contractor or
Affiliate of Grünenthal or contractor of Grünenthal’s Affiliate contributed as
an inventor, and, with respect to such OMP ADF-Formulation Patent, to execute
any necessary assignments to OMP. OMP shall comply with the duties under German
laws regarding invention by employees (Arbeitnehmererfinderrecht) with regard to
the rights of any employee, agent, officer, contractor of Grünenthal or its
Affiliates.

 

Grünenthal ADF-Formulations Improvements and/or inventions relating to
Grünenthal ADF-Formulations shall be solely owned by Grünenthal, regardless of
inventorship. During the Term of this Agreement, Grünenthal

 

 

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shall, at its sole expense, file, prosecute, maintain and defend Grünenthal
ADF-Formulation Patents. OMP agrees to cause its employees, agents, officers,
contractors or Affiliates to cooperate fully with Grünenthal in the preparation,
filing and prosecution of any Grünenthal ADF-Formulation Patent wherein an
employee, agent, officer, contractor or Affiliate of OMP or contractor of OMP’s
Affiliate contributed as an inventor, and, with respect to such Grünenthal
ADF-Formulation Patent, to execute any necessary assignments to Grünenthal.

 

(b)       Inventorship for Independent ADF Formulation Improvements which are
inventions, shall be determined in accordance with U.S. patent laws for
determining inventorship and Independent ADF Formulation Improvement Patents and
Independent ADF Formulation Improvements shall be owned by the Party that has
introduced such Independent ADF Formulation Improvements Patents and Independent
ADF Formulation Improvements into the joint development of an ADF Formulation
for the Product under this Agreement. During the Term of this Agreement,
Grünenthal shall, at its sole expense, file, prosecute, maintain and defend
Independent ADF Formulation Improvement Patents which are owned by Grünenthal.
During the Term of this Agreement OMP shall at its own expense file, prosecute,
maintain and defend all Independent ADF Formulation Improvement Patents which
are owned by OMP.

 

7.8      Notice. The Parties shall promptly inform each other of any information
that comes to their attention involving actual or apparent infringements or
misappropriations by any Third Party of any Patent, Know-How or trademark
licensed in this Agreement. The Parties shall also promptly inform each other of
any claims of alleged infringement made by any Third Party against either Party
or its respective Affiliates or sublicensees resulting from the manufacture,
import, offer for sale, sale or use of the Product.

 

7.9      Infringement Claims Against Third Parties. If any Grünenthal Patent is
infringed by a Third Party which is other than an Affiliate in any country in
connection with the manufacture, use and sale of a Product in such country,
Grünenthal shall have the primary right, but not the obligation to institute,

 

 

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prosecute, and control any action or proceeding with respect to such
infringement of any such Grünenthal Patent by counsel of its own choice and at
its own expense, with OMP having the primary right in connection with OMP
Patents at OMP´s own expense. If the Party having the primary right fails to
bring an action or proceeding or otherwise accomplishes to stop the infringement
within one hundred eighty (180) days after a request by the other Party to do
so, the other Party shall have the right to bring and control any suit for
infringement under this Section, and the Party bringing any such suit shall bear
all costs and expenses of the suit and shall retain any damages or other
monetary awards recovered. The Party bringing suit under this Section 7.9 shall
keep the other Party reasonably informed as to the progress of the suit and all
settlement discussions. A settlement or consent judgment or other voluntary
final disposition of a suit brought by a Party under this Section may not be
entered into without the prior written consent of the Party owning the Patent
which is the subject matter of the suit (which consent shall not be unreasonably
withheld or delayed); provided that such settlement, consent judgment or other
disposition does not admit the invalidity or unenforceability of any Patent; and
provided further, that any rights to continue the infringing activity in such
settlement, consent judgment or other disposition shall be limited to the
product or activity that was the subject of the suit.

 

7.10    Assistance. In the event of any patent infringement litigation involving
the Product and any Patent, the non-prosecuting or non-defending Party shall
render such reasonable assistance as may be requested by the prosecuting or
defending Party in connection with such infringement actions. If one Party
requests the other Party's reasonable assistance in connection with such
infringement claims or actions, the requesting Party shall reimburse the other
Party for such direct, documented out-of-pocket expenses as are reasonably
incurred during the course of its providing such requested assistance. Before
incurring such expenses, the Parties shall in good faith agree in writing on the
nature and extent of assistance to be rendered.

 

7.11    Third Party Patents. If a Patent or Patents of a Third Party should
exist or should issue to a Third Party in any country in the OMP Territory
during the

 

 

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term of this Agreement, which OMP believes, in its reasonable judgment, may be
infringed by the manufacture, use or sale of the Product in such country, and
OMP believes in its reasonable judgment, that it would be impractical or
impossible to continue to Commercialize or Commercialize the Product without
obtaining a royalty bearing license from such Third Party under such Patent or
Patents in said country, then OMP shall promptly notify Grünenthal in writing to
that effect with legal opinions. OMP and Grünenthal shall [***] towards the
Patent of such Third Party under the consideration of the interest of both
Parties. However, if the Parties are unable to agree on [***], the dispute will
be referred to the responsible managing director of Grünenthal and the President
of OMP for resolution. If these individuals cannot agree [***] shall have the
right to participate in all negotiations with such Third Party directed to
obtain rights to such Patent of the Third Party. [***] shall comply with any
[***] in the case where the Parties have reached [***]. In case a license has
been obtained from a Third Party OMP may deduct from the amount of royalties due
to Grünenthal on Net Sales of Product according to Sections 6.3 and 6.4(a), as
applicable, fifty percent (50%) of the Earned Royalty actually paid by OMP to
any Third Party according to Section 6.8(a), pursuant to a license entered into
under this Section. This Section shall apply vice versa for Grünenthal if
Grünenthal is making payments to OMP according to Section 6.4(c). For the
purpose of this Section 7.11, Third Party shall exclude Affiliates.

 

[***].

 

7.12    Notices Relating to the Act. Grünenthal shall notify OMP of:

 

(a)       the issuance of each U.S. patent included among the Grünenthal Patents
including – if the Parties have mutually agreed under Section 12.1(b) to

 

 

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develop the Grünenthal-ADF-Formulation – the Grünenthal-ADF-Formulation Patents,
giving the date of issue and patent number for each such Patent; and

 

(b)       communications pertaining to any patent included among the Grünenthal
Patents including – if the Parties have mutually agreed under Section 12.1(b) to
develop the Grünenthal-ADF-Formulation – the Grünenthal-ADF- Formulation Patents
which Grünenthal receives as patent owner pursuant to the Drug Price Competition
and Patent Term Restoration Act of 1984 (hereinafter the “Act”), including but
not necessarily limited to notices pursuant to §§101 and 103 of the Act from
persons who have filed an abbreviated NDA (“ANDA”) or a “paper” NDA.

 

7.13    Authorization Relating to Patent Term Extension. Grünenthal hereby
authorizes OMP to

 

(a)       provide in any NDA a list of patents which includes Grünenthal Patents
that relate to such Product and such other information as OMP believes is
appropriate;

 

(b)       commence suit for infringement of Grünenthal Patents under § 271(e)
(2) of Title 35 of the United States Code or any other relevant statute in any
OMP Territory; and

 

(c)       exercise any rights that may be exercisable by Grünenthal as patent
owner under the Act or any other relevant statute in any OMP Territory,
including without limitation, applying for an extension of the term of any
Patent included in Grünenthal Patents.

 

In the event that applicable law in any country provides for the extension of
the term of any patent included among Improvement Patents or Grünenthal Patents,
such as under the U.S. Drug Price Competition and Patent Term Restoration Act of
1984, the Supplementary Certificate of Protection of the Member States of the
European Union and other similar measures in any other country, the Party owning
such Grünenthal Patent or OMP Patent shall, at the other Party’s cost for its
own Territory, apply for and use its reasonable efforts to obtain such an
extension or, should the law require the other Party to so apply, the Party
owning the Patent hereby gives permission to

 

 

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HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
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such other Party to do so. OMP and Grünenthal agree to cooperate with one
another in obtaining such extension. Each Party agrees to cooperate with the
other Party in the exercise of the authorization granted herein and will execute
such documents and take such additional action as the may reasonably be
necessary in connection therewith, including, if necessary, permitting itself to
be joined as a Party in any suit for infringement brought by a Party hereunder.

7.14    Trade Secrets. Upon disclosure by one party of an Improvement to the
other Party, the Parties will discuss whether it is appropriate to keep such
Improvement as a Trade Secret. In the event the Parties agree to treat such
Improvement as a Trade Secret, the Party/Parties who made the Improvement will
take the necessary legal or organizational measures to protect such
Improvement’s secrecy. Should one of the Parties disagree to keep such
Improvement as a Trade Secret or no mutually decision be reached within 3 months
from disclosure of the Improvement by one Party to the other Party such
Improvement shall be filed as a Patent according to Section 7.5 unless otherwise
agreed to.

 

ARTICLE 8              CONFIDENTIALITY

 

8.1      Confidentiality Exceptions. Except to the extent expressly authorized
by this Agreement or otherwise agreed in writing, the Parties agree that the
receiving Party shall keep confidential and shall not publish or otherwise
disclose or use for any purpose other than as provided for in this Agreement any
Information and other confidential and proprietary information and materials
furnished to it by the other Party or developed by either Party pursuant to this
Agreement (collectively, “Confidential Information”), except to the extent that
it can be reasonably demonstrated by the receiving Party that such Confidential
Information:

 

(a)       was in the lawful knowledge and possession of the receiving Party
prior to the time it was disclosed to, or learned by, the receiving Party, or
was otherwise developed independently by the receiving Party, as evidenced by
written records kept in the ordinary course of business, or other documentary
proof of actual use by the receiving Party;

 

 

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

 

(c)       became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement; or

 

(d)       was disclosed to the receiving Party, other than under an obligation
of confidentiality, by a Third Party which is other than an Affiliate who had no
obligation to the disclosing Party not to disclose such information to others.

 

8.2      Authorized Disclosure. Except as expressly provided otherwise in this
Agreement, each Party may disclose Confidential Information of the other Party
as follows:

 

(a)       to Third Parties under appropriate terms and conditions including
confidentiality provisions substantially equivalent to those in this Agreement
for consulting, manufacturing, development, external testing and marketing
trials with respect to the Products covered by this Agreement, or otherwise as
is reasonably necessary to exercise the rights and licenses granted herein
(including the right to grant sublicenses according to this Agreement) or

 

(b)       to the extent such disclosure is reasonably necessary in filing or
prosecuting patent, copyright and trademark applications, prosecuting or
defending litigation, complying with applicable governmental regulations,
obtaining Regulatory Approval, conducting preclinical or clinical trials,
provided, however, that if a Party is required by law or regulation to make any
such disclosure of the other Party's Confidential Information it will (i) ,
except where impracticable for necessary disclosures, for example in the event
of medical emergency, give reasonable advance notice to the other Party of such
disclosure requirement, (ii) except to the extent inappropriate in the case of
patent applications, will use its reasonable efforts to secure confidential
treatment of such Confidential Information required to be disclosed and (iii)
only disclose such Confidentiality Information which in the opinion of the
disclosing Party’s legal counsel is legally required to be disclosed after
taking

 

 

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HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

into due consideration the other Party’s opinion provided such opinion can be
obtained in a timely manner.

 

(c)       for Confidential Information other than Trade Secrets and information
relating to Improvements and inventions, to those natural persons being ultimate
beneficial owners of Grünenthal and the supervisory board and advisory board to
the extent such disclosure is reasonably necessary or required by law and only
to the extent such persons have a right under applicable German law or a need to
know and unless already under confidentiality obligation by applicable German
law, or under appropriate terms and conditions including confidentiality
provisions substantially equivalent to those in this Agreement.

 

8.3      Survival. This Article 8 shall survive the termination of this
Agreement for a period of [***].

 

8.4      Publications. Notwithstanding any other provision of this Agreement,
neither Party shall be free to disclose the results of its activities conducted
under this Agreement until [***] without the prior written consent of the other
Party (which consent shall not be unreasonably withheld or delayed). The
publishing Party shall submit any such proposed publication to the other Party
at least [***] in advance to allow review of such planned public disclosure. The
reviewing Party shall, within [***] of receiving such proposed publication,
inform the publishing Party in writing whether it denies its consent and on what
basis. In all other cases the consent shall be deemed given. Notwithstanding the
foregoing, the Parties will make reasonable efforts to exchange information
relating to and discuss publication strategies relating to Products.

 

8.5      Public Announcements. Neither Party shall originate any publicity, news
release or public announcements, written or oral, whether to the public or
press, stockholders or otherwise relating to this Agreement, including their
existence, the subject matter to which the agreements relate, performance under
the agreements or any of their terms, to any amendment hereto or thereto or
performances hereunder or thereunder without the prior written

 

 

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consent of the other Party, save only such announcements that are required by
law to be made or that are otherwise agreed by the Parties. Such announcements
shall be brief and factual. If a Party decides to make an announcement required
by law, it shall disclose such information only to the extent necessary
according to local law and seek to avoid to the maximum possible any disclosure
with regard to the financial conditions, chemical structures and names,
including INN and substance-code-number. Such party will give the other Party at
least [***] advance notice, where possible, of the text of the announcement so
that the other Party will have an opportunity to comment upon the announcement.
To the extent that the receiving Party reasonably requests that any information
in the materials proposed to be disclosed or deleted, the disclosing Party shall
request confidential treatment of such information pursuant to Rule 406 of the
Securities Act of 1933 or Rule 24b-2 of the Securities Exchange Act of 1934 as
amended, as applicable (or any other applicable regulation relating to the
confidential treatment of information) so that there be omitted from the
materials that are publicly filed any information that the receiving Party
reasonably requests to be deleted, unless in the opinion of the disclosing
Party’s legal counsel such Confidential Information is legally required to be
fully disclosed.

 

ARTICLE 9              REPRESENTATIONS AND WARRANTIES

 

9.1      Representations and Warranties. Each of the Parties hereby represents
and warrants as of the Effective Date as follows:

 

(a)       This Agreement is a legal and valid obligation binding upon such Party
and enforceable in accordance with its terms. The execution, delivery and
performance of the Agreement by such Party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a Party or by which
it is bound, nor violate any law or regulation of any court, governmental body
or administrative or other agency having jurisdiction over it.

 

 

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HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(b)       Each Party has not granted any right to any Third Party relating to
its respective technology in the Field which would conflict with the rights
granted to the other Party hereunder.

 

(c)       Each Party Controls all of the rights, title and interest in and to
its know-how and its Patents which are licensed hereunder.

 

9.2      Grünenthal Patent Warranty. Grünenthal warrants as of the Effective
Date that it owns the entire right, title and interest in the Grünenthal Patents
and that it has given to OMP all material Information requested by OMP prior to
the Combined Territories License Agreement Effective Date relating to Grünenthal
Patent, Grünenthal Know-How and/or CG-5503 and Product in Grünenthal's
possession or under its Control. Nothing in this Agreement shall be construed as
a warranty that Grünenthal Patents are valid or enforceable or that their
exercise does not infringe any patent rights of Third Parties.

 

9.3      Grünenthal Product Warranty. Grünenthal represents and warrants that
the Product in Phase II clinical trials as of the Combined Territories License
Agreement Effective Date which is being licensed hereunder has the chemical
structure shown in Exhibit 1.3.

 

9.4      OMP Diligence Warranty. OMP acknowledges and agrees that it has
received access to information relating to CG-5503 that OMP deemed necessary to
conduct and complete its due diligence relating to CG-5503 to its satisfaction.
OMP acknowledges and agrees that Grünenthal has answered all questions of OMP
relating to the due diligence of CG-5503, and OMP warrants that it has
diligently reviewed all such information, including the Information and
information relating to Grünenthal Patent Rights, Grünenthal Know-How and/or
CG-5503 and Product provided by Grünenthal.

 

9.5      OMP Patent Warranty. OMP warrants that as of the Combined Territories
License Agreement Effective Date, to the best of their knowledge there are no
OMP Patents or Patents of its Affiliates that would be infringed by the
Commercialization of CG-5503 in its pharmaceutical formulation as of the
Combined Territories License Agreement Effective Date, absent a license granted.
If OMP obtains knowledge of such OMP Patents after the Combined

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Territories License Agreement Effective Date, OMP warrants that it will not
enforce any OMP Patents which exist as of the Combined Territories License
Agreement Effective Date to prevent the Commercialization of CG-5503 by
Grünenthal in the Grünenthal Territory during the Term and thereafter.

 

9.6      No Conflicting Rights. From and after the Combined Territories License
Agreement Effective Date, neither Party will grant any right to any Third Party
relating to its respective technology in the Field which would conflict with the
rights granted to the other Party hereunder.

 

9.7      No Other Representations or Warranties. EXCEPT AS SPECIFICALLY AND
EXPRESSLY SET FORTH IN THIS ARTICLE 9, NO PARTY MAKES ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, RELATING TO ITS INTELLECTUAL
PROPERTY AND/OR KNOW-HOW, OR ANY OTHER INFORMATION DISCLOSED, REVEALED OR
OTHERWISE MADE AVAILABLE BY ONE PARTY TO THE OTHER UNDER THIS AGREEMENT OR
OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO
VALUE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR FOR ORDINARY
PURPOSES, OR ANY OTHER MATTER.

 

9.8      No Liability for Consequential Damages. Neither Party shall be liable
to the other for incidental or consequential damages arising out of or related
to the subject matter of this Agreement.

 

ARTICLE 10            MANAGEMENT OF REGULATORY APPROVAL PREPARATION (“RAP”) AND
COMMERCIALIZATION

 

10.1    Steering Committee.

 

(a)       Establishment of Steering Committee. Within [***], the Parties have
established a Steering Committee (“SC”), which is composed of four (4)
representatives of each Party who were appointed (and may be replaced at any
time) by such Party on written notice to the other Party. The representatives
from each Party

 

 

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will collectively have one vote in decisions, with decisions made by  unanimous
vote.

 

(b)       Authority. The Parties agree that, in voting on matters as described
in this Article 10, it shall be conclusively presumed that each voting member of
the SC has the authority and approval of such member’s respective senior
management in casting his or her vote and that decisions of the SC made in
accordance with this Article 10 shall be binding upon each of the Parties;
provided, however, that the SC, other than as expressly provided for herein,
shall not have the authority to amend or modify this Agreement. The members of
the SC will undertake reasonable efforts to obtain from their respective senior
management the authority to cast their vote prior to the respective meeting,
however, in no event later than 10 days after such meeting.

 

(c)       Delegation. The SC shall create such subcommittees or subteams as it
may deem necessary or appropriate and may at the same time define the
composition and rules of such sub-committees. One such subcommittee that shall
be created by the SC shall be a RAP Subcommittee (“RSC”) which shall be
described hereinafter. The RSC shall be led by a representative chosen by
Grünenthal.

 

(d)       SC Responsibilities. The SC shall be responsible for overseeing the
RAP of Products in OMP´s Territory and the EU. In addition, the SC shall review
and approve any recommendations from the RSC with respect to the modification,
amendment or departure from the RAP Plan, RAP Budgets for OMP Territory and the
EU, RAP Costs and any other financial activities. Any modifications to the RAP
Plan (including the work plans, budgets and timelines therein) approved at a SC
meeting shall be considered approved and shall constitute an amendment upon SC
ratification of the meeting minutes related thereto.

 

(e)       Dispute Resolution. If the members of the SC cannot reach in its
meeting a unanimous decision with respect to RAP matters referred to it for
approval or the Parties can not agree to meet within [***] of the initial
request for a meeting to resolve the dispute, such undecided matters shall be

 

 

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HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
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promptly referred to the Management Committee for decision unless otherwise
agreed by the SC.

 

Unless otherwise agreed by the MC, the meeting of the Management Committee shall
be convened by each of its members after co-ordination with the other member and
shall take place within [***] after referral to the Management Committee. The
meeting shall take place at the place of the Party not hosting the  last SC
meeting. If the members of the Management Committee cannot reach in its meeting
a unanimous decision with respect to RAP matters referred to it for approval or
if the meeting does not take place within the timeframe foreseen above, for such
undecided matters the procedures for “Final decision-making/Disputes RAP
Matters” set forth below in Section 10.2 shall apply.

 

10.2    Final Decision-Making/Disputes RAP Matters. If the Management Committee
cannot agree in its meeting, or unless otherwise agreed by the MC, the final
decision on such undecided matters shall be made by Grünenthal for OMP Territory
and Grünenthal Territory, except as to Excepted RAP Matters. “Excepted RAP
Matters” are defined as:

 

(i)        increasing the budget for the RAP Plan by more than 10% of the
previously approved RAP Budget,

 

(ii)       altering the RAP Plan in a manner which would change indication(s)
for which a Product is being Prepared For Regulatory Approval,

 

(iii)      terminating or suspending a Phase III Clinical Trial prior to
completion in accordance with its protocol,

 

(iv)      material issues relating to the initial label, revised label or
changes to the label of Product, or

 

(v)       alteration of a protocol which would change one or more endpoints
outlined in such protocol and which would materially delay the filing of a Drug
Approval Application with a Regulatory Authority.

 

If a final decision cannot be reached at the Management Committee with respect
to any of the Excepted RAP Matters, which have been referred to that level for

 

 

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resolution or approval, the status quo shall be maintained with respect to
Excepted RAP Matters items 10.2 (i) as far as it concerns OMP Territory and
Grünenthal Territory and with respect to Excepted RAP Matter 10.2 (ii). As to
Excepted RAP Matters item 10.2 (iii), the Phase III Clinical Trial shall be
terminated for the affected Territory if an external expert advisory panel
recommends termination or the FDA or the EMA orders termination of the Phase III
Clinical Trial or suspended for the affected Territory if any safety issue arise
that require to immediately put the Phase III clinical trial on hold, otherwise
for the not affected Territory the status quo shall be maintained. With respect
to Excepted RAP Matter (iv), no label or labeling, or changes to the label of
labeling, will be finalized until the Parties reach mutual agreement. As to
Excepted RAP Matter item (v), endpoints shall be altered or changed, independent
of its effect on timing, if recommended or mandated by a  Regulatory Authority,
otherwise the status quo shall be maintained.

 

10.3    RAP Sub-Committee.

 

(a)       Establishment of RSC. After the Combined Territories License Agreement
Effective Date, the Parties have established a RAP Subcommittee (“RSC”) to
coordinate all activities with respect to the RAP of Products, within the
budgets approved hereunder. The first meeting of the RSC has occurred.   The RSC
shall be led by a representative chosen by Grünenthal.

 

(b)       RSC Responsibilities. The RSC shall be responsible, with the oversight
and approval of the SC, for overseeing the Parties’ independent RAP activities
hereunder, including, without limitation, coordinating all RAP to be conducted
independently by OMP and/or Grünenthal pursuant to the RAP Plan for their
respective territories and may propose modifications of the RAP Plan to the SC.
The RSC will determine the allocation of costs between OOP and internal FTEs
based on the principles of Exhibit 10.3(b). Within its responsibilities, the RSC
may decide on certain cost allocations of the annual budget within the limits of
such budget. If actual costs of implementing the RAP Plan exceed the total
amounts budgeted for expenditure during the relevant period, and will lead to an
overage of the annual budget, the RSC will revise, provided that  the Parties
mutually agree, the RAP Plan and submit it in writing, with an explanation of
the variance and the reasons therefore for approval to the SC.

 

 

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The RSC shall be responsible for implementation of the RAP Plan under the
oversight of the SC.

 

(c)       RSC Decision-making. The RSC will operate by consensus. In the event
that the RSC members do not reach consensus with respect to a matter that is
within the purview of the RSC herein, unresolved disputes will be referred
promptly to the SC, where the matter will be dealt with as recited in Sections
10.1 (e) and 10.2.

 

(d)       Accounting/Financial Reporting. Each Party will appoint a
representative with expertise in the areas of accounting, cost allocation,
budgeting and financial reporting to the RSC. Such representatives shall work
under the direction of the SC to provide services to and consult with the RSC in
order to address the financial, budgetary and accounting issues which arise in
connection with the RAP Plan.

 

(e)       RSC Reporting. The RSC shall monthly prepare and provide the SC with
minutes of its meetings summarizing the progress of the RAP.

 

10.4    Commercialization Team.

 

(a)       Formation of the Commercialization Team. Within [***], a
Commercialization Team (“CT”) has been created, comprised of an equal number of
representatives of each Party. The CT shall, during the RAP of Product,
coordinate (i) with the RSC those activities deemed necessary for a successful
Commercialization of Products in the OMP Territory and Grünenthal Territory, as
outlined herein, upon Regulatory Approval. The commercial matters shall be to
develop a publication and scientific symposia strategy, develop and implement a
strategy for Phase IV Clinical Trials, establishment of key opinion leaders,
coordinate and create a calendar of key scientific and clinical meetings which
both Parties plan to attend, develop, search and select a single, worldwide
trademark to be used by both Parties if Grünenthal exercises its option in
Section 5.1(a), create a unified promotional message to target audiences, and
all other commercial matters agreed to by the Parties. One representative from
each Party shall be designated as that

 

 

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Party’s “Commercialization Team Leader” to act as the primary CT contact for
that Party.

 

(b)       Dispute Resolution. If the members of the CT cannot reach in its
meeting a unanimous decision with respect to commercialization matters referred
to it by the RSC or SC or the Parties, then such dispute shall be escalated to
the managing director of Grünenthal and President of OMP for their consideration
and agreement; and, if they are unable to agree after negotiation, the matter
shall default to the status quo. If there is no previously agreed to status quo
on a particular issue, then each Party will have final decision making authority
for such issue in its respective Territory. In no event, will any such
irresolvable disputes arising in the CT be resolved under the dispute resolution
process of Sections 10.1(e) and 10.2.

 

ARTICLE 11            REGULATORY APPROVAL PREPARATION (“RAP”)

 

11.1    RAP Plans.

 

(a)       RAP Plans. The Parties have attached as Exhibit 1.63 an initial RAP
Plan (“ RAP Plan 1.63”), with the 2004 First Amendment as Exhibit 1.63.1, an
additional RAP Plan (“RAP Plan 1.63.1”). RAP Plan 1.63 and 1.63.1 are prepared
and drafted by Grünenthal, revised by Grünenthal in response to comments
received from OMP and agreed to by Parties which shall set out the details of
the RAPs of the Product on a world-wide basis.

 

(b)       RAP Plan Modifications. The Parties acknowledge that the RAP Plan, as
the RAP progresses needs to be revised and modified by the RSC and approved by
the SC with regard to OMP Territory and Grünenthal Territory, with Grünenthal
taking the lead in the modification process of RAP Plan 1.63 and OMP taking the
lead in the modification process of RAP Plan 1.63.1. Disputes shall be resolved
as set out in Sections 10.1(e), 10.2; and 10.3(c). Each such revised RAP Plan
shall include, without limitation, detailed plans for, as applicable, the RAP
activities and clinical studies of Product, designation of which Party is
responsible for each task, staffing levels required to carry out such activities
(which levels shall be reasonably necessary for the attainment

 

 

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of the RAP goals, as applicable) including specification of a budget setting
forth the estimated expenditures required (RAP Costs and FTE Resources) to carry
out such activities, and a detailed budget covering each activity that will be
continued or initiated during the next calendar year. If a specific activity
would best be undertaken by a Third Party contractor the RAP Plan shall indicate
which Party shall manage, account for and be liable for such Third Party
contractor.

 

11.2    Exclusive RAP Relationship. It is understood and agreed by the Parties
that, during the Term, the Parties shall work exclusively with each other to
Prepare for Regulatory Approval of the Product solely in accordance with and
under the terms of this Agreement.

 

11.3    RAP Efforts.

 

(a)      The Parties agree to coordinate and to carry out all RAP activities as
agreed   in the RAP Plan. RAP activities will, to the extent practicable,
utilize the then- prevailing infrastructure and expertise of each Party in a
given activity or with respect to a specific RAP activity.

 

11.4    RAP Responsibilities. Consistent with its responsibilities under this
Agreement and the RAP Plan (particularly, those recited in Article 11), each
Party agrees to perform the following, subject to applicable law, including
confidentiality, data protection and privacy restrictions,

 

(a)       provide to the other Party all preclinical data, assays and associated
materials, protocols, procedures and any other information in such Party’s
possession that the other Party deems reasonably necessary for the RAP of
Product;

 

(b)       conduct all agreed studies and other activities assigned to the
respective Party, including human clinical studies for Product; and

 

(c)       file required communications with Regulatory Authorities in either the
OMP Territory or the EU as applicable and, as provided for by Section 11.6 and
as otherwise reasonably requested by the other Party, consult with the other

 

 

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Party in preparing such Drug Approval Applications and communications with the
relevant Regulatory Authorities in the Territory.

 

11.5    Clinical Trials.

 

(a)       The Parties will conduct, sponsor, support and/or assist in any
clinical trial for the Product, in accordance with the most current version of
the RAP Plan and shall provide each other forthwith with all Information
gathered in OMP Territory and Grünenthal Territory, including but not limited to
clinical data, database information and reports related to clinical trials for
the Product reasonably requested by the other Party in a mutually agreed upon
format compatible to both Parties’ systems. The overall amount of patients
included in the various studies and the distribution of patients between the OMP
Territory and Grünenthal Territory shall be determined by the Parties after
considering the Parties’ discussions with Regulatory Authorities in order to
support Drug Approval Applications. The Parties will make reasonable efforts to
split the overall amount of patients [***] between OMP´s Territory and the EU
for Products developed in accordance with RAP Plan 1.63 as long as reasonable
for the project (time to market, expertise, costs etc.). All Information,
including but not limited to clinical data, database information and reports
related to clinical trials for the Product shall be owned by Grünenthal, and
during the Term OMP shall have full use of all such Information for the Product,
solely for purposes provided for under this Agreement. Subject to Articles 7 and
8 and notwithstanding the foregoing, either Party may use its know-how resulting
from the Information for any purpose. All clinical data, database information
and reports from such clinical trials for Products shall be in English,
centralized and held at Grünenthal, with a duplicate set provided to OMP, for
deposit at a site of its own selection.

 

(b)       Both Parties shall inform each other of Post Approval Commitments in
their territory and allow the other Party an opportunity to review and comment
on how such Party intends to meet such Post Approval Commitments prior to
finalization of same. Such comments of the other Party shall be considered in
good faith. Section 11.6(e) and Section 11.6(g) shall apply mutatis mutandis.
Notwithstanding the above, the decision of the Party in which such Post

 

 

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Approval Commitment is requested shall be final. The decision shall be
communicated to the other Party in due time.

 

With regard to OMP Territory and the EU the following shall apply:

 

(i)        If the Parties agree on a joint Phase IIIB, Phase IIIB2, or Phase IV
study relating to the Product developed under RAP Plan 1.63, the costs for such
study will be [***] and if the Product was developed under RAP Plan 1.63.1,
[***] of the costs associated with the such study. Each Party shall have full
use of all Information and documents arising out of such studies.

 

(ii)       With regard to the EU the costs for all Post Approval Commitments
will be borne by Grünenthal if the Post Approval Commitments are requested from
the Regulatory Authorities in the EU and by OMP if the Post Approval Commitments
are requested from the Regulatory Authorities in the OMP Territory.

 

(iii)      The costs for a jointly agreed upon Core Pediatrics Program,  other
than Post Approval Commitments, shall be shared between OMP and Grünenthal so
that [***]. Each Party shall have full use of all Information and documents
arising out of such studies.

 

(iv)      Each party shall bear the costs for the compilation and execution of a
Risk Management Plan required for its territory.

 

(v)       If the Parties do not agree on a joint study, the Party conducting
such Core Pediatric Program, Phase IIIB, Phase IIIB2 and Phase IV study alone,
shall bear all costs related to such study and shall own all Information
including, but not limited to, data and clinical reports arising out of such
study. The Party conducting any Post Approval Commitments shall own all
Information arising out of such Post Approval Commitment. Any such clinical
trial shall be the sole and

 

 

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exclusive property of the Party conducting such study. No person or entity,
including the other Party, shall have any right, title or interest therein.
However, all completed Pediatric Studies, Phase IIIB, Phase IIIB2, Phase IV
studies and Post Approval Commitments shall be included free of charge as
supportive in subsequent Drug Approval Applications for the Product. With
respect to any Pediatric Study, Phase IIIB, Phase IIIB2 and Phase IV study or
Post Approval Commitment conducted by a Party alone, if a Regulatory Authority
requests access to or review of data or reports owned by that Party, that Party
shall provide to the other Party free of charge such data solely for the purpose
of satisfying the request of the Regulatory Authority. Notwithstanding the
foregoing, adverse event reporting shall apply to any Core Pediatric Program,
Phase IIIB, Phase IIIB2 and Phase IV studies, and Post Approval Commitment.
Notwithstanding the foregoing, with respect to the clinical trial KF 5503/68
Part I, the following shall apply:

 

[***].

 

(vi)      The non-sponsoring party may elect to engage in such study and share
the costs up to the date of the first patient enrollment in a clinical study or
in the case of other nonclinical studies, the date on which data is first
collected in the study without additional costs. Thereafter, the other Party may
use data or know-how arising out of any such study either

 

 

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as a submission to a Regulatory Authority for an extension of the label of the
Product (other than solely as requested by a Regulatory Authority) or to support
any Commercialization or Promotional activities with respect to any Product for
such purposes only if that Party pays to the sponsoring Party an amount equal to
[***], unless otherwise agreed to. However, the Parties agree that data or
know-how arising out of such study may be used by the other Party free of
charge, only and to the extent it is in response to an unsolicited request as
reasonably evidenced.

 

With regard to Grünenthal Territory other than the EU, Grünenthal shall bear all
costs in connection with Phase IIIB, IIIB2, Phase IV Studies, Core Pediatric
Program and Post Approval Commitment.

 

With regard to Grünenthal Territory other than the EU, the Parties shall obtain
the data and know-how of Phase IIIB, Phase IIIB2 and Phase IV Studies and Post
Approval Commitments free of charge.

 

11.6    INDs and Drug Approval Applications.

 

(a)       With regard to OMP Territory Grünenthal shall transmit and has
transmitted the FDA Form 1571 and attachment for section 13 (Exhibit 11.6 (a),
1) and a letter to the FDA (Exhibit 11.6 (a), 2) stating that Grünenthal
transfers and assigns IND 61,345 to J&J PRD. Consequently J&J PRD as of the date
of the letter will become the official and responsible sponsor of IND 61,345.

 

Simultaneously with the above mentioned letters of Grünenthal J&J PRD shall send
and has sent a letter to the FDA (addressed to the Division Director) (Exhibit
11.6 (a), 3) with copies of said letter to Grünenthal GmbH and Grünenthal USA,
Inc. confirming that Grünenthal GmbH has agreed to transfer IND 61,345 to J&J
PRD and that J&J PRD accepts this transfer along with acknowledging full
responsibility for the maintenance of said IND as prescribed under CFR 21
section 312 except as defined in section 13 of the respective Form 1571. Such
letter shall also contain the statement that J&J PRD grants to Grünenthal GmbH
and/or its US Affiliate, Grünenthal Inc., One

 

 

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Pluckemin Way, Bedminster, New Jersey 07921, the right of reference to IND
61,345 and the statement that Grünenthal maintains safety responsibility as
defined in section 13 of the respective Form 1571. In addition this letter shall
be accompanied by an executed FDA Form 1571 signed by J&J PRD which assigns J&J
PRD as sponsor.

 

OMP shall take any and all necessary steps to comply with the documents referred
to in this Section 11.6 (a) to FDA granting Grünenthal and/or its US Affiliate a
right of reference to IND 61,345 with respect to any INDs, Drug Approval
Applications, and Regulatory Approvals with regard to Products. In no event,
Grünenthal shall take any action relating to the Product if a negative effect on
the safety, efficacy or the commercial potential of the Product can be
reasonably anticipated. OMP may revoke the right of reference to IND 61,345 only
in case of the entire termination of this Agreement pursuant to Section 15.2(b)
(termination by OMP for breach) or 15.3.

 

(b)       Consistent with the then effective RAP Plan in regard to timing,
content and scope of INDs and Drug Approval Applications and Regulatory
Approvals, OMP shall be responsible for obtaining and filing

 

(i)        further submissions to the referenced transferred IND with regard to
OMP Territory, including, but not withstanding, Drug Approval Applications
(NDAs) and any and all manners of the seeking of Regulatory Approval(s) for the
Product(s) in the OMP Territory, provided, however, no such IND Submission, Drug
Approval Application and/or Regulatory Approval may be filed or sought unless
they are part of the RAP Plan. OMP shall bear the respective registration fees
and all electronic document processing costs.

 

Grünenthal shall be responsible for obtaining and filing INDs and Drug Approval
Applications and seeking Regulatory Approvals for the Product in the Grünenthal
Territory and shall bear the respective registration fees and all electronic
document processing costs.

 

Prior to submitting any IND or Drug Approval Application, the Parties shall
consult and coordinate in preparing such filings and in reviewing and
determining the content and scope thereof. Each Party shall have the right to

 

 

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review and comment (prior to filing with a Regulatory Authority) on all INDs,
Drug Approval Applications or Regulatory Approvals in the OMP Territory and EU
of the other Party in accordance with specific timelines or other arrangements
agreed upon by the SC, and each Party’s comments will be given all due
consideration. The same shall apply for all changes (except for immaterial
changes) or amendments of INDs, Drug Approval Applications and Regulatory
Approvals and request of a Party to the other Party to amend existing INDs. If
requested by either Party in writing the INDs and/or applications for a Drug
Approval Application and/or application for a Regulatory Approval for Products
developed in accordance with RAP Plan 1.63 and/or Products developed in
accordance with RAP Plan 1.63.1 shall be split in order to pursue separately
with regard to such Products. Grünenthal shall own all INDs, Drug Approval
Applications, and Regulatory Approvals for Product in the Grünenthal Territory
and OMP shall own all INDs, Drug Approval Applications, and Regulatory Approvals
in the OMP Territory, provided, however, such INDs, Drug Approval Applications
and Regulatory Approvals are part of the RAP Plan. Each Party shall provide
copies of all regulatory documents to the other Party for the United States and
the EU, including a copy of any Regulatory Approval of the Product in the United
States and the EU, to be used for registration purposes by Grünenthal in the
Grünenthal Territory or OMP in the OMP Territory. A centralized electronic
repository shall be created and maintained by Grünenthal containing all data
generated by the Parties relating to Products in a format to be agreed upon and
which is compatible to both Parties’ systems. When requested in writing the
Parties shall discuss the transfer of safety responsibility.

 

(c)       OMP shall use the INDs, Drug Approval Applications and Regulatory
Approvals only

 

(i)        consistent with the then effective RAP Plan in regard to timing,
content and scope,

 

(ii)       consistent with the Agreement.

 

Except as permitted in Sections 11.5 and 11.6, OMP shall not use such INDs or
any drug Approval Application or Regulatory Approval as the basis for, or

 

 

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refer to them in any IND other than the referenced transferred IND, any Approval
Applications or Regulatory Approvals that are not part of the RAP Plan, nor
permit any third party to do so, and OMP shall not use the data in said INDs,
Drug Approval Application or Regulatory Application as part of another or other
INDs, Drug Approval Applications or Regulatory Approvals that are not part of
the RAP Plan, nor permit any third party to do so.

 

(d)       Each Party shall be responsible for and comply with all legal
requirements in connection with the holding of INDs including but not limited to
reporting responsibilities and annual updates.

 

(e)       The Parties shall to the extent allowable by law have the right to
participate in all meetings and/or telephone conversations with Regulatory
Authorities in the OMP Territory and EU and the Parties shall inform each other
in due time thereof in advance giving the other party all details necessary. The
number of participants and the role of the participants shall be decided by each
Party under due consideration of the other Party’s concern, if any, and under
due consideration of the issues discussed in the meeting and/or telephone
conference. All contacts including face-to-face meetings and telephone
conversations with the Regulatory Authorities in the OMP Territory and the EU in
which the other Party does not participate shall be summarized in writing and
transmitted immediately to the other Party and in no case later than within
[***] after such contact has taken place.

 

(f)        As applicable and where possible in due time in advance and during
the entire Term of this Agreement, each Party, for their respective Territory,
shall notify each other of the existence of any material data which have to be
reported to the respective Regulatory Authorities in the OMP Territory or the
EU, any material documents or reports which have to be filed with the FDA or any
other Regulatory Authority in the EU under this Agreement or material
communication with such Regulatory Authority. If not possible in due time in
advance the Parties shall inform each other at the latest within [***] of such
filing or communication and, upon request, shall provide a copy of such
document(s) to the other Party.

 

 

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(g)       Except as mentioned in the preceding paragraph and with the exception
of immaterial communications any and all other planned communications of the
Parties with the Regulatory Authorities in the OMP Territory and the EU, oral or
in writing, must be discussed with the other Party, prior to any actual contact
with such Regulatory Authority. All drafts of material communication(s) with the
Regulatory Authority in the OMP Territory and the EU shall be transmitted in a
timely manner in order to give the other party the opportunity to comment such
communication(s).

 

(h)       In case of any disagreement between the Parties on planned
communications as mentioned above the Parties shall refer the issue to the SC
and the SC shall become responsible for deciding such issues. If the members of
the SC cannot reach in its meeting an unanimous decision with respect to the
communications the dispute resolution of Section 10.1 (e) and 10.2 shall apply.

 

(i)        On request of Grünenthal OMP shall promptly conduct all steps
necessary in order to have the concerned IND transferred back to Grünenthal in
the respective Territory in case OMP has decided to discontinue activities in
the respective Territory with respect to Product development in accordance with
RAP Plan 1.63 or the overall activities allocated to OMP in the RAP Plan or OMP
intends to withdraw the concerned IND.

 

(j)        Other than with respect to transfers of any or all of the following
to Grünenthal upon the termination of this Agreement as provided in this
Agreement, at no time during the Term of this Agreement or after expiration of
this Agreement, and other than to designated Affiliates, shall OMP transfer
title or otherwise attempt in any manner to dispose of any such INDs, Drug
Approval Applications or Regulatory Approvals for Products in the OMP Territory
and OMP shall maintain any and all such INDs, Drug Approval Applications and
Regulatory Approvals.

 

11.7    Regulatory Meetings and Communications.

 

(a)       Within [***], the RSC has met and agreed upon processes and procedures

 

 

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for sharing information needed to support each Party’s respective regulatory
responsibilities, including without limitation, a global safety database
relating to Product.

 

(b)       Immediately after confirmation of any meetings with Regulatory
Authorities in OMP Territory or the EU, each Party shall notify the other Party
of such meeting and both Parties shall have the right to attend any
such  meetings with Regulatory Authorities set up by the other Party to ensure
that the Product is consistently Prepared for Regulatory Approval. The Parties
shall cooperate in good faith with respect to the conduct of any inspections by
any Regulatory Authority of a Party’s or contractor’s site and facilities, and
each Party shall at a minimum be given the opportunity to attend the summary, or
wrap up, meeting with a Regulatory Authority at the conclusion of such site
inspection. If such attendance would result in the disclosure to the other Party
of confidential information or trade secrets unrelated to the subject matter of
this Agreement, the Parties shall enter into a confidentiality agreement
covering the unrelated subject matter. To the extent either Party receives
written or material oral communication from the FDA or any other Regulatory
Authority in the EU relating to any activities subject to this Agreement, the
Party receiving such communication shall notify the other Party and provide a
copy of any written communication as soon as reasonably practicable and in no
case later than three (3) business days thereafter.

 

(c)       Adverse Event Reporting. Notwithstanding anything herein to the
contrary, the Parties shall handle adverse events reporting relating to Products
as set forth in Exhibit 11.7(c). Further, the Parties agree and acknowledge that
OMP may provide information specifically related to OMP Technology, which it
obtains under this Section 11.7 to OMP’s other clients developing and/or
marketing other products using OMP Technology.

 

11.8    Territory Specific RAP Costs.

 

(a)       Any cost or expense incurred or to be incurred by Grünenthal as a
result of regulatory approval preparation activities, to obtain Regulatory
Approval outside the OMP Territory and the EU or a territory otherwise included
by

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

mutual agreement in the current version of the RAP Plan (“Territory Specific
RAP”), shall not be shared under this Agreement.

 

(b)       All Territory Specific RAP must be communicated from Grünenthal to OMP
prior to conducting any RAP activities regardless of whether such Territory
Specific RAP is included as a RAP Cost under Section 6.2. Grünenthal shall take
any comments of OMP into consideration. All Information including, but not
limited to, data and clinical reports arising out of any Territory Specific RAP,
including, without limitation, any clinical trial, submitted to the Parties
pursuant to this Section 11.8, shall be the sole and exclusive property of
Grünenthal and no person or entity, including OMP, shall have any right, title
or interest therein. However, OMP shall have free of charge full use of all such
Information for the Product including but not limited to using such Information
as a submission for indication or extension to a Regulatory Authority or to
support any Commercialization or Promotion activities with respect to any
Product. All such Information relating to Product shall be included in the
centralized electronic repository set up by the Parties for use by either Party
for the fulfillment of regulatory submissions or legal obligations. However, if,
with respect to any activities by OMP, a Regulatory Authority requests access to
or review of data or reports owned by Grünenthal, Grünenthal shall provide OMP
with such data to comply with the request of the Regulatory Authority under such
conditions as will protect its legitimate ownership rights. Notwithstanding the
foregoing, adverse event reporting shall apply to any Territory Specific RAP.

 

11.9    Transfer of Materials. During the Term hereunder, the Parties anticipate
that each Party will transfer certain of its proprietary materials to the other
Party. Each Party agrees that it will use such materials of the other Party only
for the purposes of this Agreement, hereunder, and will not transfer such
materials to any Third Party without the consent of the other Party except with
respect to Grünenthal's Affiliates and licensees and to OMP´s Affiliates engaged
in RAP that need to obtain the proprietary material for the fulfillment of this
Agreement. Ownership of proprietary materials made or assembled by a Party or a
Third Party during and in furtherance of this Agreement, shall be

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

determined in accordance with Article 7. Each Party shall have the right to
transfer such material to Third Parties under the form of a material transfer
agreement agreed upon by the Parties. All transfers of materials pursuant to
this Agreement may be charged to the common account as a RAP Cost of the Party
transferring such material.

 

11.10  Compliance with GLP/GCP/GMP. All of the RAP activities, including all
tasks specified by the RAP Plan and its associated work plans, shall, in
accordance with timelines set forth therein, and shall be done in accordance
with GLP, GMP and GCP, as applicable. Each Party is prepared, at its sole
discretion, to assist the other Party with regard to GLP, GCP and GMP
compliance. With respect to any facility or site at which a Party conducts RAP
pursuant to this Agreement, including, where commercially reasonable and within
the control of the other Party, Third Party facilities or sites, each Party
shall have the right, at its expense, upon reasonable written notice and during
normal business hours, to inspect such site and facility and any records
relating thereto as is reasonably necessary to verify the other Party’s
compliance with the terms of this Agreement relating to GLP, GCP and GMP. Such
inspection shall be subject to the confidentiality provisions of this Agreement.
Each Party agrees, to the extent possible, to include in any contract or other
written arrangement with a Third Party relating to such facilities and sites a
clause permitting the other Party to exercise its rights under this Section
11.10.

 

11.11  Failure to perform Duties of RAP Plan. In the event that a Party fails to
carry out any of its duties or responsibilities under the RAP Plan, due to
reasons within the control of such Party, and such failure shall have continued
for [***] after written notice thereof was provided to such failing Party, then
the non-failing Party may assume control of the disrupted part of the RAP of
Product in the OMP-Territory or EU, as applicable, except for filing of any Drug
Approval Applications which shall remain the failing Party’s responsibility. The
failing Party shall continue to be responsible for its Proportionate Share of
the RAP Costs for RAP being conducted by the non- failing Party, along with an
[***] such RAP Costs of the activities of which the non-failing Party has
assumed control, as compensation to the

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

non-failing Party for the disruption to the RAP Plan caused by the failing
Party. If the non-failing Party has not assumed control over the disrupted part
of the RAP of Product and the failure to carry out the duties or
responsibilities of the failing Party has continued for [***] after receipt of
the above mentioned written notice this failure shall be considered a material
breach in accordance with Section 15.2. Such breach may entitle the
non-breaching Party to terminate immediately at the end of such [***] period
without notice period. If such breach relates to an OMP Territory such right to
terminate shall only apply to the OMP Territory, as applicable.

 

11.12  Combination Products and Products based on Improvements. If it is the
intention to jointly develop a Combination Product or Products based on
Improvements, the Parties shall cooperate in essentially the same manner as for
Product, containing CG-5503 as the sole active pharmaceutical ingredient under
this Agreement so that Combination Products and Products based on Improvements
can be promptly registered in each Party's Territory. The Parties will discuss
in good faith if and how to achieve this goal. If the Parties' cannot agree, the
Party conducting such development alone, shall bear all costs related to such
development and all Information including, but not limited to, data and clinical
reports arising out of such development, including, without limitation, any
clinical trial, shall be the sole and exclusive property of the Party conducting
such development and no person or entity, including the other Party, shall have
any right, title or interest therein. The non-sponsoring Party shall have the
option to use data or know-how arising out of any such development as a
submission to a Regulatory Authority only if that Party pays to the sponsoring
Party an amount equal to [***], unless otherwise agreed to by the Parties.

 

ARTICLE 12            ADF FORMULATION

 

12.1    Decision of an abuse deterrent form (“ADF”) Formulation.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(a)       The Parties anticipate that the Product will initially be
Commercialized using a Grünenthal formulation currently being used in clinical
trials. However, in the event that the filing of a Drug Approval Application in
the OMP Territory for the ADF Formulation, (which has been selected according to
Section 12.1(b)), would not delay the filing of a Drug Approval Application for
the Grünenthal formulation currently used in clinical trials by more than six
(6) months, then OMP may file its Drug Approval Application for the selected ADF
Formulation.

 

(b)       At present, Grünenthal is working on its own ADF Formulations of the
Product and is considering further suitable technologies of abuse deterrent
formulations. OMP is considering an OMP-ADF-Formulation incorporating OMP
Technology. It is the aim of the Parties to agree, as soon as all relevant data
regarding the decision criteria described below are available, on one worldwide
ADF Formulation for Commercialization. In advance of agreeing upon a worldwide
ADF Formulation, each Party shall, independently of the other Party and
objectively, evaluate its own ADF Formulation regarding all main decision
criteria. The main decision criteria are:

 

(i)        abuse deterrence potential of various administration routes,

 

(ii)       feasibility of bio-equivalence to the current formulation (non ADF),

 

(iii)      development costs,

 

(iv)      costs of goods,

 

(v)       scope of patent protection,

 

(vi)      development time,

 

(vii)     regulatory aspects,

 

(viii)     legal aspects,

 

(ix)      improvement of overall activity profile.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Thereafter, the Parties shall exchange simultaneously the results of the above
mentioned evaluation in written form and shall discuss the merits of each ADF
Formulation.

 

12.2    Development of ADF Formulation.

 

(a)       The Parties have agreed to jointly develop and use the Grünenthal-ADF-
Formulation but if the Parties would agree later jointly to use the OMP-ADF-
Formulation worldwide,

 

(i)        OMP shall be responsible for all CM&C activities related to the OMP-
ADF-Formulation on a worldwide basis. The RAP Plan will be modified, the Parties
shall be responsible for its RAP. The RAP Costs incurred after such decision
will be shared equally by the Parties. Such RAP will be considered as OOP which
will be shared equally by the Parties. The responsibility for the manufacture
and supply of the OMP-ADF- Formulation in the Grünenthal Territory shall be
based solely upon Grünenthal’s exercise of its option in accordance with Section
12.2(a)(v)(a).

 

(ii)       Licenses for Commercialization. OMP hereby grants to Grünenthal and
its Affiliates an exclusive (even as to OMP), paid-up license, within the Field
under the OMP ADF-Formulation Patents, Independent ADF Formulation Improvement
Patents Controlled by OMP and OMP Know- How, to Commercialize Products within
the Grünenthal Territory. The license to Commercialize Products based on any OMP
ADF- Formulation Patent is subject to a mutual agreement under Section 12.1(b)
to develop the OMP ADF-Formulation. Grünenthal shall not have any right to sell,
offer for sale, distribute and have sold Product under the OMP ADF-Formulation
Patents and OMP Know-How for any indication outside the Field.

 

(iii)      Licenses for Production. OMP hereby grants to Grünenthal and its
Affiliates a non-exclusive, paid-up license, within the Field under the OMP
ADF-Formulation Patents, Independent ADF Formulation Improvement Patents
Controlled by OMP and OMP Know-How, to

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

make Products worldwide solely for the purpose to Commercialize Products within
the Grünenthal Territory. The license to make Products based on OMP
ADF-Formulation Patents is subject to a mutual agreement under Section 12.1(b)
to develop the OMP-ADF- Formulation and Grünenthal’s election under Section
12.2(a)(v)(a) to manufacture the OMP ADF-Formulation.

 

(iv)      License for RAP. OMP hereby grants to Grünenthal and its Affiliates a
non-exclusive, paid up worldwide license, within the Field, under the OMP
ADF-Formulation Patents, Independent ADF Formulation Improvement Patents
Controlled by OMP and OMP Know-How for use in carrying out RAP of the Product.
The license to carrying out RAP of the Product based on OMP-ADF-Formulation
Patents is subject to a mutual agreement under Section 12.1(b) to develop the
OMP ADF- Formulation.

 

(v)       Manufacturing of OMP-ADF-Formulation. In the event that both OMP and
Grünenthal elect to Commercialize Product using the OMP-ADF- Formulation,
Grünenthal shall have the option to:

 

(a)       install a manufacturing equipment train for the OMP-ADF- Formulation
in a Grünenthal facility or a facility of a Grünenthal Affiliate for use
exclusively for manufacturing Product and/or Combination Product. OMP shall use
and shall cause any applicable Third Party (in as far as OMP is able to achieve
such rights) to support Grünenthal in the installment of such manufacturing
equipment train and the provision of Grünenthal with the necessary technical
training assistance. Such support shall be charged to Grünenthal on a
transparent, standard allocated cost basis, or

 

(b)       have OMP manufacture Product with the OMP-ADF-Formulation for
Grünenthal at an OMP, OMP Affiliate, or licensor of OMP- ADF-Formulation
facility in the EU, if available. Such supply shall be at OMP`s Fully Allocated
Manufacturing Cost, without any internal mark-ups.  In the case OMP has
terminated the

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Agreement, OMP will supply Product to Grünenthal at OMP´s Fully Allocated
Manufacturing Cost. Additionally, in case of such supply by OMP a royalty of
[***] on Net Sales shall be paid by Grünenthal until the last to expire of any
OMP-ADF- Formulation Patent which claims the Product. In the event that OMP
manufactures Product for Grünenthal, then Grünenthal shall have the right to
have a limited number of employees present to oversee such manufacturing work,
to inspect OMP´s manufacturing facility, review OMP´s standard operating
procedures for manufacturing and inspect related records, upon reasonable
notice, during normal business hours, under appropriate conditions of
confidentiality. Notwithstanding anything to the contrary in this Agreement, in
the event that OMP supplies Product to Grünenthal hereunder, such supply shall
be pursuant to the terms of a mutually acceptable supply agreement to be entered
into between the Parties, which agreement shall contain reasonable,
industry-standard terms. OMP and Grünenthal shall negotiate in good faith a
supply agreement on reasonable terms and conditions.

 

For the purpose of this Section 12.2(a)(v), OMP shall include its Affiliates.

 

(vi)      The Party carrying out RAP of the selected ADF Formulation shall
regularly exchange information as set forth, but not limited to, timelines,
technology, allocated capacity, dissolution profiles, PK etc., regarding the ADF
Formulation and its RAP.

 

(b)       The Parties have agreed jointly on July 23, 2004 to jointly develop
and use  the Grünenthal-ADF-Formulation in the Grünenthal Territory and OMP
Territory. With regard to the above mentioned decision of the Parties the
following shall apply:

 

(i)        Grünenthal shall be responsible for all CM&C activities related to
the supply of Grünenthal-ADF-Formulation for the Grünenthal Territory. OMP shall
be responsible for all CM&C activities related to the supply

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

of Grünenthal-ADF Formulation for the OMP Territory. The RAP Plan will be
modified and the Parties shall be responsible for its RAP on a Grünenthal
Territory and OMP Territory-wide basis. The RAP Costs incurred after such
decision will be shared equally by the Parties for the OMP Territory and
Grünenthal Territory. Each Party shall be responsible for manufacture and supply
of the Grünenthal-ADF- Formulation in its Territory. Such RAP for OMP Territory
and Grünenthal Territory will be considered an OOP which will be shared equally
by the Parties.

 

(ii)       Licenses for Commercialization. Grünenthal hereby grants to OMP and
its Affiliates an exclusive (even as to Grünenthal), paid-up license, within the
Field under the Grünenthal ADF-Formulation Patents and Independent ADF
Formulation Improvement Patents Controlled by Grünenthal to Commercialize
Products within the OMP Territory. OMP shall not have any right to Commercialize
Product under the Grünenthal ADF-Formulation Patents for any indication outside
the Field. OMP shall not have any right to commercialize Product under the
Grünenthal-ADF-Formulation Patents outside OMP Territory.

 

(iii)      Licenses for Production. Grünenthal hereby grants to OMP and its
Affiliates a non-exclusive, paid-up license, within the Field under the
Grünenthal ADF-Formulation Patents, and Independent ADF Formulation Improvement
Patents Controlled by Grünenthal; to make Products worldwide for the purpose to
Commercialize Products within the OMP Territory under the Commercial Supply
Manufacturing License.

 

(iv)      License for RAP. Grünenthal hereby grants to OMP and its Affiliates a
non-exclusive, paid up worldwide license, within the Field, under the Grünenthal
ADF-Formulation Patents and Independent ADF Formulation Improvement Patents
Controlled by Grünenthal for use in carrying out RAP of the Product.

 

(v)       Information Exchange. The Party carrying out RAP of the selected ADF

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Formulation shall regularly exchange information as set forth, but not limited
to, timelines, technology, allocated capacity, dissolution profiles, PK etc.,
regarding the ADF Formulation and its RAP.

 

(c)       If the Parties have not agreed to jointly use one ADF Formulation
worldwide, both Parties shall have the right to develop their own ADF
Formulation and there shall be no dispute resolution mechanism available under
Section 10.1(e) and 10.2 relating to selection of the ADF Formulation. If
Grünenthal elects not to use the OMP-ADF-Formulation, then Grünenthal shall not
be responsible for any development costs associated with the development thereof
and vice versa. In such case, the development of different ADF Formulations for
the respective Territories should in no case delay the joint Core RAP Program,
other than as allowed in Section 12.1(a). Any Party has the right at any time to
use the ADF Formulation of the other Party by equally sharing the development
costs thereof incurred after the decision not to jointly use one ADF Formulation
worldwide, and for future development costs by [***].

 

12.3  Miscellaneous

 

(a)       The Parties are aware that the ADF Formulation applies only for
Products developed in accordance with RAP Plan 1.63.

 

(b)       It is the intention of the Parties to develop a 1.63.1 ADF. Each Party
shall inform the other Party of its 1.63.1 ADF in accordance with Section
12.1(b).

 

(c)       OMP hereby grants Grünenthal and its Affiliates an exclusive (even as
to OMP) license within the Field under OMP 1.63.1 Patents and OMP Know How, to
Commercialize Products within the Grünenthal Territory; a non exclusive license
within the Field under the OMP 1.63.1 Patents and OMP Know How, to make Products
worldwide solely for the purpose to Commercialize Products within the Grünenthal
Territory; a non exclusive license within the Field under the OMP 1.63.1 Patents
and OMP Know How for use in carrying out RAP of the Product in Grünenthal
Territory, the terms and conditions of which shall be negotiated in good faith
by the Parties.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(d)       Grünenthal hereby grants to OMP and its Affiliates an exclusive (even
as to Grünenthal) license within the Field under the Grünenthal 1.63.1 Patents
and Grünenthal Know How to Commercialize Products within the OMP Territory; a
non exclusive license within the Field under the Grünenthal 1.63.1 Patents and
Grünenthal Know How, to make Products worldwide solely for the purpose to
Commercialize Products within the OMP Territory; a non exclusive license within
the Field under the Grünenthal 1.63.1 Patents and Grünenthal Know How for use in
carrying out RAP of the Product in OMP Territory, the terms and conditions of
which shall be negotiated in good faith by the Parties.

 

(e)       If the Parties are developing a 1.63.1 ADF in parallel the decision
making process of Section 12.1(b) shall apply.

 

(f)        If a Party has a 1.63.1 ADF developed by a third party the Party
engaging the third party shall obtain a worldwide license on such 1.63.1 ADF
with the right to sublicense this 1.63.1 ADF to the other Party to this
Agreement for use in its Territory at the same conditions as the engaging Party
unless otherwise agreed by the Parties.

 

(g)       If the Parties cannot agree on a worldwide 1.63.1 ADF and consequently
OMP uses its own 1.63.1 ADF the COGS Cap as per Section 6.7 shall not apply.

 

12.4    Licenses for Independent ADF Formulation Improvement Patents controlled
by OMP and Grünenthal ADF Formulation Patents

 

(a)       OMP grants to Grünenthal a worldwide non-exclusive, paid up license
under any Independent ADF Formulation Improvement Patent Controlled by OMP for
any product made, used or sold by Grünenthal and/or its Affiliates which product
would be covered by at least one claim issued from at least one of the following
US Patent Applications Publ. No. [***].

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(b)       Grünenthal grants to OMP a worldwide non-exclusive, paid-up license
under any Grünenthal ADF Formulation Patent Controlled by Grünenthal for any
product other than the Product made, used or sold by OMP and/or its  Affiliates
provided such product would not be covered by any claims issued from the
following US Patent Applications Publ. No. [***].

 

(c)       The licenses granted to Grünenthal and OMP respectively pursuant to
Section 12.4 (a) and (b) include the right to sublicense to Affiliates or to
licensees of Grünenthal and OMP respectively.

 

ARTICLE 13            INDEMNIFICATION

 

13.1    Indemnification. Each Party (the “Indemnifying Party”) shall be solely
and completely responsible and liable for, and shall indemnify, defend and hold
the other Party (the “Indemnified Party”) harmless from and against, any and all
claims (whether made by a Third Party or the Indemnified Party), losses,
damages, liabilities, settlements, penalties, fines, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses), but
expressly excluding consequential, special and punitive damages (unless paid to
a Third Party as part of a Third Party claim) and lost profits (collectively,
the “Losses”), arising out of:

 

(a)       the conduct of the research and development program other than
clinical trials contemplated herein in the Indemnifying Party's Territory;

 

(b)       the conduct of clinical trials by the Indemnifying Party acting as
Responsible Party for Clinical Trials, no matter in which Territory such
clinical trials take place;

 

(c)       the manufacture, use, handling, storage, sale, distribution or other
disposition of Products (including clinical trial samples) by or on behalf of
the Indemnifying Party; except, in the case of clauses (a), (b) and (c) above,
to

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

the extent that such Losses do not also result from the willful misconduct or
gross negligence of the Indemnified Party.

 

13.2    Indemnification Procedures.

 

(a)       In the event that either Party receives notice of a claim with respect
to a  Product in the Territory, such Party shall inform the other Party as soon
as reasonably practicable. The Parties shall confer how to respond to the claim
and how to handle the claim in an efficient manner.

 

(b)       In the event that a Party is seeking indemnification under Section
13.1, it shall inform the indemnifying Party of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit the indemnifying
Party to assume direction and control of the defense of the claim (including the
right to settle the claim solely for monetary consideration), shall cooperate as
requested (at the expense of the indemnifying Party) in the defense of the
claim, and shall not settle or compromise the claim without the express written
consent of the indemnifying Party.

 

13.3    Insurance. Beginning on the date that the first Product is first
administered in a human clinical trial in any country in the Territory, each
Grünenthal and OMP shall each have and maintain, each at its own cost, the
following insurances:

 

(a)       Commercial General Liability, and Product Liability (maintained for a
period of at least five (5) years after the expiration or termination of this
Agreement) providing at a minimum, insurance coverage for bodily injury,
property damage and liability with respect to the contractual indemnification
provisions provided under this Agreement). The policy shall have a limit of no
less than twenty five million dollars (US-$25,000,000) for each occurrence of
bodily injury up to a maximum of two hundred million dollars (US-$200,000,000)
per calendar year, which may include a self-insured retention, and

 

(b)       Foreign Local Coverage: Where required by law, the Party acting as
Responsible Party for Clinical Trials of the clinical trial in such country of
the

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Territory shall obtain foreign local coverages in an amount that, at a minimum,
satisfies the legal requirements of that jurisdiction.

 

(c)       Policy Conditions: All policies under (a), (b) and (c) above shall
provide that coverage under such policy shall not be suspended, voided,
canceled, non- renewed, reduced in scope or the above mentioned limits, except
after at least twenty five (25) days written notice has been given to the other
Party. In addition, each Party shall provide to the other Party a copy of the
certificate(s) of insurance for each policy procured and maintained pursuant to
Sections 13.3(a) through (c) above.

 

In no event shall a Party’s failure to request or obtain any such certificate of
insurance from the other Party serve to waive that Party’s right to insist upon
full compliance with the other Party’s insurance procurement and maintenance
obligations pursuant to this Section 13.3.

 

The provisions of Section 13.3 shall apply accordingly in case of
Commercialization of Products; provided, however, that in case of Section
13.3(b) the Party which is required by the laws of the respective jurisdiction
is responsible to provide such local coverage.

 

ARTICLE 14            [Reserved]

 

ARTICLE 15           TERM AND TERMINATION

 

15.1    Term.

 

(a)       This Agreement commenced on the Effective Date and shall remain in
effect until the expiration, on a country-by-country basis, of OMP’s or
Grünenthal´s obligation to pay current royalties for the last Commercialized
Product or future Products under development, unless earlier terminated as
provided in this Article 15  (“Term”).

 

Thereafter, subject to the remainder of Article 15, OMP shall have a fully paid
up, non-exclusive license to make, use and sell Product under the Grünenthal
Patents claiming the Commercialized Products, its use, or the manufacture
thereof in the OMP Territory. Rights under all other Grünenthal Patents (the

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

“Other Rights”) shall revert to Grünenthal except as provided in Section
15.1(b), and OMP shall promptly transfer to Grünenthal all Drug Approval
Application and Regulatory Approvals including all clinical data associated
therewith if and when OMP is no longer selling any Product hereunder. Grünenthal
shall be free to Prepare Regulatory Approval of and Commercialize Product
without any limitations; provided, however, that if Grünenthal desires to
continue to Prepare Regulatory Approval of or Commercialize the Product
utilizing the OMP-ADF-Formulation (provided the Parties had already agreed to
jointly use the OMP-ADF-Formulation pursuant to Section 12.1(b)) the licenses
and option or rights with regard to manufacture and supply, as set forth in
Section 12.2, shall survive.

 

(b)       In case of an ongoing development of Product by OMP and provided such
development is conducted using Commercially Reasonable and Diligent Efforts, the
Agreement shall not expire, and the Other Rights shall not revert to Grünenthal
until OMP´s obligation to pay royalties for the last Product (which may be the
Product in development) have ended, unless earlier terminated as provided in
this Article 15. For purposes of this Article 15, the term “OMP” shall include
each Affiliate or assignee of any rights or obligations of OMP and/or each
Affiliate referenced herein.

 

Upon the expiration of the Agreement, in the event that there is no Product in
development hereunder by OMP and no royalties being paid hereunder on any
Product being sold by OMP, all rights to Grünenthal Patents shall revert to
Grünenthal, except those Grünenthal Patents in which an OMP employee or agent is
a joint inventor. In connection with such Grünenthal Patents, OMP shall retain a
worldwide, non-exclusive license outside the Field.

 

OMP Patents shall be retained by OMP except that OMP shall grant to Grünenthal a
worldwide exclusive license to Commercialize Product provided Grünenthal is
developing or Commercializing Product. Such license shall be royalty bearing at
a rate of [***] Net Sales of Product in OMP Territory.

 

15.2    Termination For Breach.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(a)       Either Party may terminate this entire Agreement or this Agreement
partly with regard to Products developed in accordance with the RAP Plan 1.63.1
in the event the other Party shall have materially breached or defaulted in the
performance of any of its material obligations hereunder with regard to the OMP
Territory, and such default shall have continued for [***] after written notice
thereof was provided to the breaching Party by the non- breaching Party. Any
termination shall become effective at the end of such [***] period unless the
breaching Party (or any other party on its behalf) has cured any such breach or
default prior to the expiration of the [***] period.

 

A termination only with regard to Products developed in accordance with RAP Plan
1.63 is excluded.

 

(b)       In the event of termination of this Agreement by OMP, in its entirety
or partly with regard to Product developed in accordance with RAP Plan 1.63.1
pursuant to this Section 15.2, the licenses and rights granted to OMP in Article
2 and 12 (if the Parties have previously agreed to jointly develop the
Grünenthal-ADF-Formulation) and all obligations of OMP related to such license
as set forth in Articles 6 and 7 and all relevant definitions in Article 1 shall
survive termination. In addition, if such termination occurs during RAP, then
OMP may assume control of all RAP activities of the Product(s) terminated that
are relevant or necessary to the filing of any Drug Approval Applications in the
OMP Territory and Grünenthal shall provide OMP with all necessary assistance and
documentation for OMP to carry out such RAP activities.

 

(c)       In the event of termination of this Agreement by Grünenthal in its
entirety or partly with regard to Product developed in accordance with RAP Plan
1.63.1 pursuant to this Section 15.2, the licenses and rights granted to
Grünenthal in Articles 2 and 12 (if the Parties have previously agreed to
jointly develop the OMP-ADF-Formulation) and all obligations of Grünenthal
related to such license as set forth in Articles 6 and 7 and all relevant
definitions in Article 1 shall survive termination. All rights granted by
Grünenthal related to Product(s) terminated shall revert to Grünenthal and OMP
shall promptly

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

transfer to Grünenthal all INDs, Drug Approval Application and Regulatory
Approvals including all clinical data associated therewith in case of entire
termination of this Agreement or the respective INDs (if IND relates solely to
Product terminated), Drug Approval Applications and Regulatory Approvals
including all clinical data associated therewith in case of partly termination.
Grünenthal shall not be free to Prepare Regulatory Approval of or Commercialize
Product in OMP Territory until this Agreement is terminated with regard to the
OMP Territory.

 

Grünenthal shall be free to prepare Regulatory Approval of and Commercialize
Product in OMP Territory without any limitations upon termination of this
Agreement in its entirety.

 

15.3    Termination For Bankruptcy. Notwithstanding Section 18.19, either Party
hereto shall have the right to terminate this entire Agreement or this Agreement
partly with regard to Products developed in accordance with the RAP Plan 1.63.1
(excluding termination only with regard to Products developed in accordance with
the RAP Plan 1.63) forthwith by written notice to the other Party

 

(a)       if the other Party is declared insolvent or bankrupt by a court of
competent jurisdiction,

 

(b)       if a voluntary or involuntary petition in bankruptcy is filed in any
court of competent jurisdiction against the other Party and such petition is not
dismissed within [***] after filing, or

 

(c)       if the other Party shall make or execute an assignment of
substantially all of its assets for the benefit of creditors.

 

(d)       In the event of termination of this Agreement by OMP in its entirety
or partly with regard to Product developed in accordance with RAP Plan 1.63.1,
pursuant to this Section 15.3, the licenses and rights granted to OMP in
Articles 2 and 12 (if the Parties have previously agreed to jointly develop the
Grünenthal-ADF-Formulation) and all obligations of OMP related to such license
as set forth in Articles 6 and 7 and all relevant definitions in Article 1

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

shall survive termination. In addition, if such termination occurs during RAP,
then OMP may assume control of all RAP activities of the Product(s) terminated
that are relevant or necessary to the filing of any Drug Approval Applications
in the OMP Territory and Grünenthal shall provide OMP with all necessary
assistance and documentation for OMP to carry out such RAP activities.

 

(e)       In the event of termination of this Agreement by Grünenthal in its
entirety or partly with regard to Product developed in accordance with RAP Plan
1.63.1, pursuant to this Section 15.3, the licenses and rights granted to
Grünenthal in Article 2 and 12 (if the Parties have previously agreed to jointly
develop the OMP-ADF-Formulation) and all obligations of Grünenthal related to
such license as set forth in Articles 6 and 7 and all relevant definitions in
Article 1 shall survive termination. All rights granted by Grünenthal related to
Product(s) terminated shall revert to Grünenthal and OMP shall promptly transfer
to Grünenthal all INDs, Drug Approval Application and Regulatory Approvals
including all clinical data associated therewith in case of entire termination
of this Agreement or the respective INDs (if IND relates solely to Product
terminated), Drug Approval Applications and Regulatory Approvals including all
clinical data associated therewith in case of partly termination. Grünenthal
shall not be free to Prepare Regulatory Approval of or Commercialize Product in
OMP Territory until this Agreement is terminated in its entirety.

 

15.4    [Reserved]

 

15.5    Termination After the Start of Phase III.

 

(a)       Either Party may terminate this Agreement

 

(i)        in its entirety, or

 

(ii)       partly for the OMP Territory with regard to Product developed in
accordance with RAP Plan 1.63.1

 

after start of Phase III of the Product(s) and prior to First Commercial Sale of

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

that Product(s) in OMP Territory, upon [***] prior written notice. In case of
such termination, the terminating Party shall still be responsible for its share
of planned budgeted OOP during the [***] notice period.

 

The terminating Party shall also continue to provide [***] of its plan FTE
resources for a period of [***] after the date of the notice of termination and
thereafter [***] of its plan FTE resources for a further [***] after which time
no further FTE`s shall be due for the [***].

 

(b)       (i)      If OMP terminates this Agreement under Section 15.5(a) in its
entirety, the licenses and rights granted to Grünenthal in Article 2 and  12 (if
the Parties have previously agreed to jointly develop the OMP- ADF-Formulation)
and all obligations of Grünenthal related to such license as set forth in
Articles 6 and 7 and all relevant definitions in Article 1 shall survive
termination. All rights granted by Grünenthal shall revert to Grünenthal and OMP
shall promptly transfer to Grünenthal all INDs, Drug Approval Application and
Regulatory Approvals including all clinical data associated therewith.
Grünenthal shall be free to Prepare Regulatory Approval of and Commercialize
Product without any limitations.

 

(ii)      If OMP terminates this Agreement under Section 15.5(a) partly
with  regard to Products developed in accordance with the RAP Plan 1.63.1 the
licenses and rights granted to Grünenthal in Article 2 and 12 (if the Parties
have previously agreed to jointly develop the OMP-ADF- Formulation) and all
obligations of Grünenthal related to such license as set forth in Articles 6 and
7 and all relevant definitions in Article 1 shall survive termination. All
rights granted by Grünenthal shall pertaining to Products developed in
accordance with RAP Plan 1.63.1 revert to Grünenthal and OMP shall promptly
transfer to Grünenthal the respective INDs (if IND relates solely to terminated
Product), Drug Approval Applications and Regulatory Approvals including all
clinical data associated therewith. Grünenthal shall not be free to Prepare
Regulatory Approval of or Commercialize Product in OMP Territory

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

until this Agreement is terminated in its entirety.

 

(c)       If Grünenthal terminates this entire Agreement under Section 15.5(a),
but OMP decides to pursue the Regulatory Approval Preparation of Product, OMP
shall obtain a worldwide exclusive license under Grünenthal Patents and
Grünenthal Know-How to make, use and sell Product and the licenses granted to
Grünenthal under Section 2.2(c)(ii) shall apply to OMP mutatis mutandis, at the
following royalty rates:

 

(i)        In the OMP Territory, the Earned Royalty rates as recited in this
Agreement shall apply; and

 

(ii)       For the rest of the world outside the OMP Territory:

 

-          at a royalty rate of [***] if Grünenthal terminates before [***] of
total planned patients of Phase III have been recruited, or

 

-          at a royalty rate of [***], if Grünenthal terminates after [***] of
total planned patients of Phase III have been recruited.

 

In the event OMP elects to Commercialize Product using ADF Formulation of
Grünenthal, an additional royalty of [***] on Net Sales for the OMP Territory
and [***] for the Grünenthal Territory shall be paid to Grünenthal. If
Grünenthal terminates this Agreement under Section 15.5(a) only with regard to
Products developed in accordance with RAP Plan 1.63.1 and OMP decides to pursue
the Regulatory Approval Preparation with regard to such Products, Grünenthal
shall retain its rights with regard to the Grünenthal Territory and OMP shall
not obtain the world-wide exclusive license referred to in Section 15.5(c) first
paragraph above. In the event OMP elects to Commercialise such Products using
Grünenthal-ADF-Formulation an additional royalty of [***] on Net Sales for the
OMP Territory shall be paid to Grünenthal. In case OMP subsequently ceases the
Regulatory Approval Preparation of the Product for the OMP Territory this
Agreement is automatically terminated in its entirety for the OMP Territory.

 

(d)       Termination during Commercialization. OMP may terminate this Agreement

 

(i)        in its entirety, or

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(ii)       partly for the OMP Territory with regard to Product developed in
accordance with RAP Plan 1.63.1

 

during Commercialization upon [***] prior written notice.

 

If OMP terminates this Agreement under this Section 15.5(d), the licenses and
rights granted to Grünenthal in Article 2 and 12 (if the Parties have previously
agreed to jointly develop the OMP-ADF-Formulation) and all obligations of
Grünenthal related to such license as set forth in Articles 6 and 7 and all
relevant definitions in Article 1 shall survive termination. All rights granted
by Grünenthal with respect to such Product terminated shall revert to Grünenthal
and OMP shall promptly transfer to Grünenthal all INDs, Drug Approval
Application and Regulatory Approvals including all clinical data associated
therewith in case of entire termination of this Agreement or the respective INDs
(if IND relates solely to terminated Product), Drug Approval Applications and
Regulatory Approvals including all clinical data associated therewith in case of
partly termination. Grünenthal shall have the option to request OMP to transfer
all rights to such terminated Product back to Grünenthal at any time during the
notice period upon [***] written notice. Grünenthal shall not be free to Prepare
Regulatory Approval of or Commercialize Product in OMP Territory until this
Agreement is terminated in its entirety. Grünenthal shall be free to Prepare
Regulatory Approval of and Commercialize any Product without any limitations
upon termination of this Agreement in its entirety.

 

15.6    Termination By OMP.

 

(a)       OMP may terminate this Agreement, at any time, in its entirety upon 30
days prior written notice as a result of :

 

(i)        material data regarding the safety or efficacy of the Product which
arise during the Regulatory Approval Preparation of the Product that
convincingly indicate a materially and adversely different safety or efficacy
profile as compared to the target profile of that Product as of the Combined
Territories License Agreement Effective Date, or the effective date of the 2004
First Amendment, as applicable;

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

(ii)       there is a materially adverse regulatory development relating to the
approvability in the United States of a Product compared to the registration
requirements of that Product as of the Combined Territories License Agreement
Effective Date, or the effective date of the 2004 First Amendment, as
applicable.

 

OMP may terminate this Agreement on a Product by Product basis upon 30 days
prior written notice only if

 

(i)

material data regarding the safety or efficacy of a Product which arise during
the Regulatory Approval Preparation of the Product convincingly indicate a
materially and adversely different safety or efficacy profile as compared to the
target profile of that Product as of the Combined Territories License Agreement
Effective Date, or the effective date of the 2004 First Amendment, as
applicable;

 

(ii)

there is a materially adverse regulatory development relating to the
approvability in the United States of a Product compared to the registration
requirements of that Product as of the Combined Territories License Agreement
Effective Date, or the effective date of the 2004 First Amendment, as
applicable;

 

and such material data as referred to in (i) above or materially adverse
regulatory development as referred to in (ii) above apply only to such Product
terminated. In case such material data and material adverse regulatory
development apply also to other Products OMP may terminate this Agreement only
in its entirety.

 

(b)       In the event of termination by OMP under Section 15.6(a), OMP shall
have no obligation to make payments relating to Regulatory Approval Preparation
Costs of the Product(s) terminated which accrue following the effective date of
termination, including but not limited to FTE costs, except, however, all
initiated and committed OOP which shall be shared. In addition, the licenses and
rights granted to Grünenthal in Article 2 and 12 (if the Parties have previously
agreed to jointly develop the OMP-ADF-Formulation) and all obligations of
Grünenthal related to such license as set forth in Articles 6 and 7 and all
relevant definitions in Article 1 shall survive termination. All rights

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

granted by Grünenthal related to Products terminated shall revert to Grünenthal
and OMP shall promptly transfer to Grünenthal all INDs, Drug Approval
Applications and Regulatory Approvals including all clinical data associated
therewith in case of entire termination of this Agreement or the respective INDs
(if IND relates solely to terminated Product), Drug Approval Applications and
Regulatory Approvals including all clinical data associated therewith in case of
partly termination. Grünenthal shall not be free to Prepare Regulatory Approval
of or Commercialize Product in OMP Territory until this Agreement is terminated
in its entirety. Grünenthal shall be free to Prepare Regulatory Approval of and
Commercialize any Product without any limitations upon termination of this
Agreement in its entirety.

 

15.7    Mutual Termination. In case of a common decision by the SC to terminate
the Regulatory Approval Preparation in its entirety for reasons referred to in
Section 15.6(a), both Parties will equally share the cost of discontinuation and
all licenses hereunder shall terminate.

 

15.8    Change of Control.

 

(a)       In the event of a Change of Control of OMP. In the event that
substantially all of OMP’s assets are sold, or greater than 35% of OMP’s voting
securities are transferred (whether by stock sale, merger, consolidation,
reorganization, recapitalization or otherwise with respect to OMP or Johnson &
Johnson) to any Third Party, other than Affiliates of OMP, during RAP of
Product, joint RAP shall continue, but the Excepted RAP Matters under Section
10.2 shall no longer exist and all final decisions shall be made by Grünenthal.

 

(b)       In the event of a Change of Control of Grünenthal. In the event of an
Grünenthal Change in Control (defined below) during RAP of Product, joint RAP
shall continue but all final decisions relating to RAP of Product shall no
longer be made by Grünenthal but instead will be made by OMP and the Excepted
RAP Matters under Section 10.2 shall continue to exist.

 

(i)        Grünenthal Change of Control shall mean any transaction or series of
related transactions in which a Third Party (other than Affiliates of Grünenthal
or the existing owner of Grünenthal [***]) acquires or becomes the ultimate
beneficial owner of (x) more than fifty percent (50%) of the outstanding voting
securities of Grünenthal or the surviving entity, whether by merger,
consolidation, reorganization, tender offer or similar means, or (y) all or
substantially all of the assets of Grünenthal.

 

(ii)      [***].

 

15.9    [Reserved]

 

15.10  Surviving Rights. Without limiting this Article 15, Sections 2.1(d), 7.4,
7.7, and 12.4 and Articles 1, 8, 9, 13 and 18 shall survive the expiration and
any termination of this Agreement for any reason. The termination of this
Agreement for any reason whatsoever shall be without prejudice to any
obligations or rights on the part of either Party which have accrued prior to
such termination and shall not affect or prejudice any provision of this
Agreement which is expressly or by implication provided to come into effect on,
or continue in effect after such termination.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

15.11  Accrued Rights, Surviving Obligations. Termination, relinquishment or
expiration of the Agreement for any reason shall be without prejudice to any
obligations which shall have accrued prior to such termination, relinquishment
or expiration, including, without limitation, the payment obligations under
Article 6 hereof and this Article 15 and any and all damages arising from any
breach hereunder. Such termination, relinquishment or expiration shall not
relieve either Party from obligations that are expressly indicated to survive
termination or expiration of the Agreement. Notwithstanding anything to the

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

contrary in this Agreement, in the event of termination by a Party after the
date of filing of a Regulatory Approval in such Party's Territory, such Party
will cooperate with the other Party, to the extent requested by such other
Party, in transferring such Regulatory Approval (or filing thereof) to such
other Party at such other Party's cost (unless such termination was due to the
breach of this Agreement by, insolvency of, or voluntary termination by such
Party).

 

15.12  [Reserved]

 

15.13  Termination Not Sole Remedy. Termination is not the sole remedy under
this Agreement and, whether or not termination is effected, all other remedies
will remain available except as agreed to otherwise herein.

 

ARTICLE 16            DISPUTE RESOLUTION

 

16.1    Dispute Resolution and Arbitration. In the case of any disputes between
the Parties arising from this Agreement, and in case this Agreement does not
provide a solution for how to resolve such disputes, the Parties shall discuss
and negotiate in good faith a solution acceptable to both Parties and in the
spirit of this Agreement. If after negotiating in good faith pursuant to the
foregoing sentence, the Parties fail to reach agreement, then Grünenthal’s
managing director and OMP´s chairman for pharmaceutical sector shall discuss in
good faith an appropriate resolution to the dispute. If these executives fail,
after good faith discussions undertaken in reasonable promptness, to reach an
amicable agreement, then either Party may upon written notice to the other
submit to binding arbitration pursuant to Section 16.2.

 

16.2    Arbitration. In the case of any dispute arising out of or in connection
with this Agreement, the Parties shall negotiate in good faith within [***] days
after written notice has been given by one Party to the other Party requesting
such negotiations. Within this [***] day period, the Parties shall also consider
to use mediation. If the Parties do not resolve their dispute within a period of
[***] days after written notice was given, the dispute shall be finally settled
by binding arbitration under the Rules of Arbitration of the International
Chamber of Commerce by three (3) arbitrators, the chairperson

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

of whom shall be appointed by the two party arbitrators. The seat of arbitration
shall be Düsseldorf, Germany and the language of the proceedings shall be
English. The Parties agree that any award or decision made by the arbitral
tribunal shall be final and binding upon them and may be enforced in the same
manner as a judgment or order of a court of competent jurisdiction. The arbitral
tribunal shall render its final award within [***] from the date on which the
Request for Arbitration by one of the Parties wishing to have recourse to
arbitration is received by the ICC Secretariat. The ICC Secretariat may extend
this time limit pursuant to a reasoned request from the arbitral tribunal or on
its own initiative if it decides it is necessary to do so. The costs of the
arbitration shall be fixed and paid as specified in the award. The arbitral
tribunal shall determine the dispute by applying the provisions of this
Agreement and the governing law set forth in Section 18.7. By agreeing to
arbitration, the Parties do not intend to deprive any court of its jurisdiction
to issue, at the request of a Party, a pre-arbitral injunction, pre-arbitral
attachment or other order in aid of the arbitration proceedings and the
enforcement of any award. Without prejudice to such provisional or interim
remedies in aid of arbitration as may be available under the jurisdiction of a
competent court, the arbitral tribunal shall have full authority to grant
provisional or interim remedies and to award damages for the failure of any
Party to the dispute to respect the arbitral tribunal’s order to that effect.

 

ARTICLE 17            [Reserved]

 

ARTICLE 18           MISCELLANEOUS

 

18.1    Relationship of Parties. For the purposes of this Agreement, each Party
is an independent contractor and not an agent or employee of the other Party.
Neither Party shall have authority to make any statements, representations, nor
commitments of any kind, or to take any action which shall be binding on the
other Party, except as may be explicitly provided for herein or authorized in
writing.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

18.2    Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

 

18.3    Headings. All headings in this Agreement are for convenience only and
shall not affect the meaning of any provision hereof.

 

18.4    Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the Parties and their respective lawful successors and permitted
assigns.

 

18.5    Assignment. Neither Party may assign this Agreement without the prior
written consent of the other Party, except that a Party may assign this
Agreement in whole or in part to any Affiliate, provided that (i) the assigning
Party remains obligated for its Affiliate´s performance of this Agreement, and
(ii) the assigning Party provides prior written notice to the other Party of the
anticipated assignment. Either Party may assign this Agreement to any party
succeeding (by sale, merger, reverse merger or otherwise) to substantially all
of the business and operations of such Party subject to the other Party´s right
to terminate this Agreement pursuant to Article 15.

 

18.6    Amendment. This Agreement may be amended, supplemented, or otherwise
modified at any time, but only by means of a written instrument signed by both
Parties.

 

18.7    Governing Law. This Agreement and the legal relations among the Parties
shall solely be governed by and construed and any dispute arising out of or in
connection with this Agreement shall solely be resolved in accordance with,
German law, without regard to its conflicts of law rules.

 

18.8    Severability. In the event of any provisions of this Agreement being or
becoming ineffective or of any omission being discovered, the validity of the
remaining provisions shall not thereby be affected. In place of the ineffective
provisions or for the purpose of rectifying the omission a reasonable arrange-
ment shall operate being the nearest legally possible approach to that which

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

the parties hereto desired or would have desired in consideration of the spirit
and object of this Agreement had they considered the point.

 

18.9    Entire Agreement. This Agreement, together with all Exhibits and Side
Letters Nr. 1 through Amended Side Letter Nr. 21, attachments and schedules
hereto, constitutes the entire agreement between the Parties with respect to the
subject matter hereof; provided,  however, that all rights and obligations of
the Parties under the Combined Territories License Agreement arising prior to
the Effective Date shall be governed by the Combined Territories License
Agreement. For the sake of clarity, all rights and obligations of the Parties
with respect to Canada and Japan arising on and after the Effective Date of this
Agreement shall be governed by Canada/Japan License Agreement. The Parties
acknowledge and agree that this Agreement, together with the Canada/Japan
License Agreement, amends, restates, supersedes and terminates the Combined
Territories License Agreement and all previous agreements between the Parties
under the Combined Territories License Agreement.

 

18.10  Advice of Counsel. OMP and Grünenthal have each consulted counsel of
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one Party or another
and will be construed accordingly.

 

18.11  Consents Not Unreasonably Withheld. Whenever provision is made in this
Agreement for either Party to secure the consent or approval of the other, that
consent or approval shall not unreasonably be withheld, and whenever in this
Agreement provision is made for one Party to object to or disapprove  a matter,
such objection or disapproval shall not unreasonably be exercised.

 

18.12  Retained Rights. Nothing in this Agreement shall limit in any respect the
right of either Party to conduct research and Regulatory Approval Preparation
and to market products using such Party's technology other than as herein
expressly provided. Furthermore, nothing in this Agreement shall be construed to
provide any license, implied or express, under any Patent Controlled by a Party,
except to the extent of the express Products for the

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

particular Regulatory Approval Preparation indications that are the subject of
continuing joint Regulatory Approval Preparation and Commercialization pursuant
to this Agreement.

 

18.13  Force Majeure. Neither Party shall lose any rights hereunder or be liable
to the other Party for damages or losses on account of failure of performance by
the defaulting Party if the failure is occasioned by government action, war,
terrorist act, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the control of the defaulting Party, provided
that the Party claiming force majeure has exerted reasonable efforts to avoid or
remedy such force majeure; provided, however, that in no event shall a Party be
required to settle any labor dispute or disturbance. The Party giving notice
shall be excused from such obligations hereunder as it is disabled from
performing for so long as it is so disabled; provided, however, that Party
commences and continues to take reasonable and diligent actions to cure or
remedy such force majeure. In the event of any such force majeure event, the
Parties shall meet promptly to determine an equitable solution to the effects of
any such event. The term of the agreement shall not be extended by any  force
majeure.

 

18.14  Further Actions. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

 

18.15  No Implied Licenses. No rights to any other patents, know-how or
technical information, or other intellectual property rights, other than as
explicitly identified herein are granted or deemed granted by this Agreement.
Except as otherwise provided herein, no right, express or implied, is granted by
the Agreement to use in any manner the name “Grünenthal” or “OMP”, or any other
trade name or trademark of the other Party or its Affiliates in connection with
the performance of the Agreement.

 

18.16  Notices. All notices hereunder shall be in writing by mail, courier or
personal delivery and shall be deemed given upon receipt thereof. All notices
shall be given

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

- if to Grünenthal,

 

addressed to:

Grünenthal GmbH

52099 Aachen

Germany

Attention: CEO

 

With a copy to:

 

Grünenthal GmbH

52099 Aachen

Germany

Attention: Global Legal

 

- if to OMP:

 

addressed to:

Janssen Pharmaceuticals, Inc.

1125 Trenton-Harbourton Road,

Titusville, New Jersey, 08560

Attention: President

 

With a copy to: Office of General Counsel

 

Johnson & Johnson

One Johnson & Johnson Plaza

New Brunswick, NJ 08933

Attention: Corporate Law Leader, Medicines & Nutritionals

 

18.17  Waiver. Except as specifically provided for herein, the waiver from time
to  time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party's rights or remedies provided in this
Agreement.

 

18.18  Compliance with Laws. The Parties shall comply with all applicable laws,
rules, regulations and orders of the United States and applicable European

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

countries and supra-governmental organizations and all jurisdictions and any
agency or court thereof in connection with this Agreement and the transactions
contemplated thereby.

 

18.19  Bankruptcy. All rights and licenses granted under or pursuant to this
Agreement are, and shall otherwise be deemed to be, for purposes of Section
365(n) of Title 11, U.S. Code (the “Bankruptcy Code”), licenses and rights to
“intellectual property” as defined under Section 101(60) of the Bankruptcy Code.
The Parties agree that the other Party, as a licensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and elections
under the Bankruptcy Code. Each Party agrees during the term of this Agreement
to create and maintain current copies or, if not amenable to copying, detailed
descriptions or other appropriate embodiments, of all such intellectual
property. The Parties further agree that, in the event of the commencement of a
bankruptcy proceeding by or against one Party under the Bankruptcy Code, the
other Party shall be entitled to a complete duplicate of (or complete access to,
as appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in its possession, shall be
promptly delivered to the other Party

 

(a)       upon any such commencement of a bankruptcy proceeding upon written
request therefore by the other Party, unless such Party elects to continue to
perform all of its obligations under this Agreement, or

 

(b)       if not delivered under (a) above, upon the rejection of this Agreement
by or on behalf of such Party upon written request therefor by the other Party.

 

18.20  Non-Solicitation. During the Term, neither Party shall solicit, without
prior written consent, for employment any employees of the other Party that have
been involved in the cooperation or the promotion, marketing and sale of the
Product. The Parties agree that the term “solicit” shall not include general
solicitations of employment not specifically directed towards a Party´s
employees, newspaper or other periodical advertisements, or general searches
conducted by professional recruiting firms.

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

18.21  Contradictions. In case of contradiction of the wording between the body
of this Agreement and the Exhibits and/or the Side Letters, the wording of the
body of the Agreement shall take precedence over the Exhibits and the Side
Letters.

 

ARTICLE 19          GUARANTEE OF JOHNSON & JOHNSON, JOINT AND SEVERAL LIABILITY

 

19.1    Johnson & Johnson, the parent corporation of OMP, hereby unconditionally
and irrevocably guarantees the performance when due of any and all of the
obligations of OMP and/or any other Johnson & Johnson Affiliate having
obligations under this Agreement. Notwithstanding the foregoing, the guarantee
set forth in this Section 19.1 shall automatically terminate, and shall be of no
further force and effect, in the event that (i) this Agreement is assigned by
OMP pursuant to Section 18.5 to any person or entity that is not a Johnson &
Johnson Affiliate or (ii) OMP or another Johnson & Johnson Affiliate is
otherwise no longer a party to this Agreement.

 

19.2    Each company defined as OMP or to which obligations under this Agreement
have been assigned shall be jointly and severally responsible for such
obligation.

 

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the Effective Date.

 

 

 

 

 

JANSSEN

 

JANSSEN RESEARCH

PHARMACEUTICALS, INC.

 

& DEVELOPMENT, LLC

 

 

 

By:

/s/ Michael Grissinger

 

By:

/s/ Michael Grissinger

Name:

Michael Grissinger

 

Name:

Michael Grissinger

Title:

Authorized Signatory

 

Title:

Authorized Signatory

Date:

January 12, 2015

 

Date:

January 12, 2015

 

 

GRUNENTHAL GMBH

 

 

 

 

 

By:

/s/ Prof. Dr. Eric-Paul Paques

 

By:

/s/ Dr. Alberto Grua

Name:

Prof. Dr. Eric-Paul Paques

 

Name:

Dr. Alberto Grua

Title:

CEO

 

Title:

Chief Commercial Officer EU,  Australia and Nor America

Date:

2015-01-13

 

Date:

2015-01-13

 

 

[Signature Page to Licence Agreement (U.S.)]

 

 

CERTAIN PORTIONS OF THE EXHIBIT THAT ARE NOT MATERIAL AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED HAVE BEEN REDACTED PURSUANT TO ITEM 601(B)(10)(IV)
OF REGULATION S-K.  [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

 

Solely with respect to Article 19:

 

 

 

 

 

JOHNSON & JOHNSON

 

 

 

 

 

By:

/s/ Eric Jung

 

 

 

Name:

Eric Jung

 

 

 

Title:

Assistant Secretary

 

 

 

Date:

1/12/2015

 

 

 

 

 

 

[Signature Page to Licence Agreement (U.S.)]