Exhibit 10.17

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

EXECUTION COPY

 

LICENSE AGREEMENT

 

BY AND BETWEEN

 

KADMON PHARMACEUTICALS, LLC

 

AND

 

ABBVIE INC.

 











 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

LICENSE AGREEMENT

 

This License Agreement (the “Agreement”) is made and entered into as of the 17th day of June, 2013 (the “Effective Date”), by and among Kadmon Pharmaceuticals, LLC, a Pennsylvania limited liability company (“Kadmon”) and AbbVie Inc., a Delaware corporation (“AbbVie”). Kadmon and AbbVie may be referred to herein individually as a “Party” or collectively as the “Parties”.

 

BACKGROUND

 

WHEREAS, Kadmon owns or controls certain proprietary rights, Regulatory Approvals, know-how and technology relating to the Product in the Territory;

 

WHEREAS, AbbVie desires to acquire a license from Kadmon to develop and Commercialize the Product in the Territory on an exclusive or non-exclusive basis, as applicable, and Kadmon desires to grant to AbbVie a license to develop and Commercialize the Product in the Territory on an exclusive or non-exclusive basis, as applicable, in accordance with the terms and conditions of this Agreement;

 

WHEREAS, Kadmon desires to supply Product to AbbVie on the terms and conditions set forth in this Agreement and the Supply Agreement and AbbVie desires to obtain supply of Product in accordance with the terms and conditions of this Agreement; and

 

WHEREAS, simultaneously with the execution and delivery of this Agreement, the Parties will be entering into certain Ancillary Agreements, including an Asset Purchase Agreement pursuant to which AbbVie will purchase assets related to Product outside of the Territory.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.

 

1.              DEFINITIONS. For purposes of this Agreement, the following terms shall have the following meanings:

 

1.1.                                                    “Affiliate” means, with respect to a Party, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Party. For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance; or (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a Person (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity). The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty

 











 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

percent (50%), and that in such case such lower percentage shall be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management or policies of such entity.

 

1.2.                                                    “Ancillary Agreements” means, collectively, the Asset Purchase Agreement, the Bill of Sale, Assignment and Assumption Agreement, the Patent Assignment Agreement, the Supply Agreement, and the Escrow Agreement.

 

1.3.                                                    “Applicable Laws” means all federal, state, local or foreign laws, codes, statutes, ordinances, regulations, rules, guidance, or orders of any kind whatsoever that are applicable to the Parties, the transactions contemplated under this Agreement or the Product, including the United States Federal Food, Drug and Cosmetic Act, the Public Health Services Act, Generic Drug Enforcement Act of 1992 (21 U.S.C. § 335a et seq.), Anti-Kickback Statute (42 U.S.C. § 1320a-7b et seq.), the Health Insurance Portability and Accountability Act of 1996, data security and confidentiality, patient and information privacy, and tax laws, and any other regulations promulgated by any Governmental Authority, all as amended from time to time.

 

1.4.                                                    “Asset Purchase Agreement” means the Asset Purchase Agreement by and between Kadmon and AbbVie of even date herewith.

 

1.5.                                                    “BID Product” means a 200mg, 400mg or 600mg, as applicable, standalone tablet (and specifically excluding capsules) that (a) contains Ribavirin as the active ingredient, and (b) is to be taken twice daily.

 

1.6.                                                    “Bill of Sale, Assignment and Assumption Agreement” means the Bill of Sale and the Assignment and Assumption Agreement, as defined in and to be entered into pursuant to the Asset Purchase Agreement.

 

1.7.                                                    “Bioequivalence” means for purposes of QD Product or BID Product, as applicable, the least square mean ratios (test/reference) for the point estimates of Cmax and AUC (Cmax, AUCt, AUCinf and AUCtau, as applicable) are between 0.8 and 1.25.

 

1.8.                                                    “Business Day” means any day that is not a Saturday, a Sunday or other day on which commercial banks are required or authorized to be closed in New York.

 

1.9.                                                    “Calendar Quarter” means a three-month period commencing on January 1, April 1, July 1, and October 1; provided, that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the end of the first full Calendar Quarter thereafter and (b) the last Calendar Quarter of the Term shall end upon the termination of this Agreement.

 

1.10.                                             “Calendar Year” means a twelve-month period commencing on January 1; provided, that (a) the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the same year and (b) the last Calendar Year of the Term shall commence on January 1 of the Calendar Year in which this Agreement is terminated or expires and end on the date of termination of this Agreement.

 

1.11.                                             “Commercially Reasonable Efforts” means with respect to the efforts to be

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

expended by a Party with respect to any objective, reasonable, good faith efforts to accomplish such objective as a Person in the life sciences industry would normally use to accomplish a similar objective under similar circumstances, taking into consideration the stage of development or product life, market potential, efficacy, safety, approved labeling, competitiveness of alternative products sold by Third Parties in the marketplace, patent and other proprietary positions, and profitability (including royalties payable to licensors of patent or other intellectual property rights) not taking into account any royalty, milestone or other payment to be made under this Agreement, and, with respect to the efforts to be expended by AbbVie, taking into consideration the impact of such activities on AbbVie’s products for the treatment of Hepatitis C virus.

 

1.12.                                             “Commercialization” and “Commercialize” means the activities carried out by or on behalf of a Party in distributing (including importing, transporting, warehousing, invoicing, handling and delivering Product to customers), promoting, marketing and selling Product, but does not include selling the Product for clinical trial purposes.

 

1.13.                                             “Confidential Information” means technical, financial, manufacturing or marketing information, ideas, methods, developments, improvements, business plans, know-how, trade secrets or other proprietary information relating thereto, together with analyses, compilations, studies or other documents, records or data prepared by the Parties and their Affiliates which contain or otherwise reflect or are generated from such information.

 

1.14.                                             “Control”, “Controls” or “Controlled by” means with respect to any item of Kadmon IP Rights or Confidential Information, ownership of or possession of the right, whether directly or through an Affiliate, by ownership or license, to use or practice such item of Kadmon IP Rights or Confidential Information.

 

1.15.                                             “Co-packaged BID Product” means any product containing a BID Product and any other approved product, in separate final dosage forms, packaged together with appropriate labeling, intended for use together for the ease of the patient.

 

1.16.                                             “Co-packaged QD Product” means any product containing a QD Product and any other approved product, in separate final dosage forms, packaged together with appropriate labeling, intended for use together for the ease of the patient.

 

1.17.                                             “Drug Master File” or “DMF” means a drug master file document containing detailed information about the manufacturing of the Product the active pharmaceutical ingredient of the Product packaging, and/or excipient, colorant, flavour, essence, or material including information describing the manufacturing site, the manufacturing facility, the operating procedures, the personnel, the manufacture, chemistry and control of the drug substance and the drug substance intermediates.

 

1.18.                                             “EMA” means the European Medicines Agency, and any successor agency or authority having substantially the same function.

 

1.19.                                             “Escrow Agent” means the escrow agent that is a signatory to the Escrow Agreement.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

1.20.                                             “Escrow Agreement” means the Escrow Agreement as defined in and to be entered into pursuant to the Asset Purchase Agreement.

 

1.21.                                             “Exclusive Product” means the Co-Packaged BID Product and/or the Co-packaged QD Product, and as modified in accordance with Section 6.3.1.

 

1.22.                                             “Existing Third Party Royalties” means any and all royalty payments to be made to Third Parties in connection with the manufacture, use, research, development and Commercialization of Product in the Territory pursuant to any agreement or commitment entered into by Kadmon or any of its Affiliates, including those agreements listed on Schedule 1.22 hereto.

 

1.23.                                             “FDA” means the United States Food and Drug Administration, and any successor agency or authority having substantially the same function.

 

1.24.                                             “Governmental Authority” means any nation or government, any provincial, state, regional, local or other political subdivision thereof, any supranational organization of sovereign states, and any entity, department, commission, bureau, agency, authority, board, court, official or officer, domestic or foreign, exercising executive, judicial, regulatory or administrative functions of or pertaining to government, including the FDA and the EMA.

 

1.25.                                             “Intellectual Property Rights” means (a) Patent Rights, (b) trademarks, trademark registrations, trademark applications, service marks, service mark registrations, service mark applications and domain names, (c) copyrights, copyright registrations and copyright applications, (d) know-how, inventions, formulae, processes and trade secrets, and (e) all rights in all of the foregoing provided by Applicable Law.

 

1.26.                                             “JPMT” means the Joint Project Management Team, to be established in accordance with the terms set forth in Schedule 1.26.

 

1.27.                                             “Kadmon Know-How” means all Technical Information, know-how, techniques, processes, methods, specifications, and other data and information (and all copyrights, trademarks, trade secret rights and other Intellectual Property Rights relating to any of the foregoing) and any DMFs Controlled by Kadmon or its Affiliates at any time during the Term, which relate to the Product and is required for, or useful in connection with developing, using, manufacturing, obtaining or maintaining regulatory approval for, or Commercializing the Product, in written or electronic form.

 

1.28.                                             “Kadmon Patent Rights” means Patent Rights Controlled by Kadmon or its Affiliates at any time during the Term, including those listed in Schedule 1.28, which (a) disclose, claim or otherwise cover the composition of matter, manufacture and/or use of the Product, or (b) disclose, claim or otherwise cover Kadmon Know-How.

 

1.29.                                             “Kadmon IP Rights” means (a) Kadmon Patent Rights, (b) Kadmon Know-How and (c) Product Trade Dress.

 

1.30.                                             “Knowledge” means all facts actually known, or which should have been reasonably known, by the relevant personnel with primary responsibility for the matter

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

in question on a day to day basis, following reasonable investigation and inquiry by such personnel.

 

1.31.                                             “Losses” means any and all losses, liabilities, damages, claims, awards, judgments, taxes, interest, penalties, costs and expenses (including, reasonable attorneys’ fees, experts’ fees and other similar out-of-pocket expenses) actually suffered or incurred.

 

1.32.                                             “Marketing Materials” means all marketing materials developed by AbbVie and/or its Affiliates, and/or with any Third Party, in connection with the Commercialization of Product in the Territory, including all advertising and display materials, product data, price lists, sales materials, marketing materials and information, marketing plans, sales, training and education materials, promotional and non-promotional materials in any medium, disease awareness materials, scientific and commercial publications, market research, artwork for the production of packaging components, television masters and other digital materials, including any and all copyright ownership in any of the foregoing.

 

1.33.                                             “NDC#” means a unique 3-segment number that identifies the labeler/vendor, the product and the trade packaging.

 

1.34.                                             “OUS Territory” means the “Territory” as defined in the Asset Purchase Agreement as the same may be varied from time to time in accordance with the terms of the Asset Purchase Agreement.

 

1.35.                                             “Patent Assignment Agreement” means the Patent Assignment Agreement as defined in and to be entered into pursuant to the Asset Purchase Agreement.

 

1.36.                                             “Patent Rights” means all rights arising under patents, provisional patent applications, patent applications or invention registrations, as well as any substitutions, continuations, continuations-in-part, divisionals and all reissues, renewals, reexaminations, extensions, supplementary protection certificates, confirmations, revalidations, registrations or patents, and all foreign counterparts thereof, registered or applied for in the United States and all other nations throughout the world, in connection with any of the foregoing.

 

1.37.                                             “Person” means any individual, corporation, partnership, joint venture, limited liability company, joint stock company, trust or unincorporated organization or Governmental Authority.

 

1.38.                                             “Product” means the BID Product and/or the Exclusive Product.

 

1.39.                                             “Product Trademark” means the trademark “RibaTab”; provided, that Product Trademark shall not include any AbbVie Product Marks or any other trademark of Kadmon or its Affiliates.

 

1.40.                                             “Product Trade Dress” means the trade dress set forth on Schedule 1.40.

 

1.41.                                             “QD Product” means a single immediate release standalone tablet (and

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

specifically excluding capsules) formulated by or on behalf of Kadmon using Kadmon Know-How to contain the entire daily Ribavirin dose of 600mg, 800 mg, 1000mg, or 1200mg, as applicable, for patients.

 

1.42.                                             “QD Product Trademark” means (a) the trademark “RibaDay” or (b) such other trademark(s) as Kadmon or its Affiliates may use from time-to-time in relation to the QD Product.

 

1.43.                                             “Reference Selling Price” or “RSP” means US$4.38 per 200mg of Ribavirin.

 

1.44.                                             “Regulatory Approvals” means all licenses, permits, authorizations and approvals of, all pricing agreements and price reimbursement agreements with, and all registrations, filings and other notifications to, any governmental agency or department necessary, appropriate or useful for the manufacture, use or Commercialization of the Product, including the ANDA.

 

1.45.                                             “Ribavirin” means that certain compound having the formula 1-[(2R,3R,4S,5R)-3,4-dihydroxy-5-(hydroxymethyl)oxolan-2-yl]-1H-1,2,4-triazole-3-carboxamide. CAS # [36791-04-5].

 

1.46.                                             “SKU” means a stock keeping unit.

 

1.47.                                             “Supply Agreement” means the supply agreement by and between Kadmon and AbbVie of even date herewith pursuant to which Kadmon shall supply AbbVie with Ribavirin tablets, in substantially the form attached hereto as Exhibit B.

 

1.48.                                             “Technical Information” means any and all technical and/or scientific data and information, including any chemical, formulation, structural, functional biological, chemical, pharmacological, toxicological, pharmaceutical, physical, analytical, process, pre-clinical, clinical, assay, control, safety, manufacturing and quality control data and information, and all copyrights, trade secret rights and other Intellectual Property Rights relating to any of the foregoing.

 

1.49.                                             “Territory” means the United States of America, its territories, protectorates and possessions.

 

1.50.                                             “Third Party” means a Person other than Kadmon and its Affiliates and AbbVie and its Affiliates.

 

1.51.                                             “Unit Sales” means the number of units sold by AbbVie or on behalf of AbbVie of each SKU of Exclusive Product, to the extent such SKU contains a different dose of Ribavirin.

 

1.52.                                             Other Terms.  The definition of each of the following terms is set forth in the section of the Agreement indicated below:

 

	
 
    	
Defined Term
    	
 
    	
Section
    	
 
    
	
 
    	
“AbbVie”
    	
 
    	
Preamble
    	
 
    
	
 
    	
“AbbVie Indemnitees”
    	
 
    	
11.2
    	
 
    


 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

	
 
    	
“AbbVie Product Marks”
    	
 
    	
4.2.1
    	
 
    
	
 
    	
“Agreement”
    	
 
    	
Preamble
    	
 
    
	
 
    	
“ANDA”
    	
 
    	
6.3.1
    	
 
    
	
 
    	
“Bankrupt Party”
    	
 
    	
13.3
    	
 
    
	
 
    	
“breaching Party”
    	
 
    	
12.4
    	
 
    
	
 
    	
“Code”
    	
 
    	
13.3
    	
 
    
	
 
    	
“Deductible”
    	
 
    	
11.4
    	
 
    
	
 
    	
“Effective Date”
    	
 
    	
Preamble
    	
 
    
	
 
    	
“High Dose BID Product”
    	
 
    	
6.3.3
    	
 
    
	
 
    	
“High Dose QD Product”
    	
 
    	
6.3.4
    	
 
    
	
 
    	
“Indemnified Party”
    	
 
    	
11.3
    	
 
    
	
 
    	
“Indemnifying Party”
    	
 
    	
11.3
    	
 
    
	
 
    	
“Infringement”
    	
 
    	
8.2.1
    	
 
    
	
 
    	
“Infringement Claim”
    	
 
    	
8.3.1
    	
 
    
	
 
    	
“Kadmon”
    	
 
    	
Preamble
    	
 
    
	
 
    	
“Kadmon Indemnitees”
    	
 
    	
11.1
    	
 
    
	
 
    	
“Licensing Party”
    	
 
    	
13.3
    	
 
    
	
 
    	
“non-breaching Party”
    	
 
    	
12.4
    	
 
    
	
 
    	
“Party” and “Parties”
    	
 
    	
Preamble
    	
 
    
	
 
    	
“QD Product Development”
    	
 
    	
2.4
    	
 
    
	
 
    	
“Royalty Payment”
    	
 
    	
6.3.1
    	
 
    
	
 
    	
“Royalty Term”
    	
 
    	
5.3.1
    	
 
    
	
 
    	
“SDEA”
    	
 
    	
5.1
    	
 
    
	
 
    	
“Supply Agreement   Requirements Obligation”
    	
 
    	
7.1
    	
 
    
	
 
    	
“Term”
    	
 
    	
12.1
    	
 
    
	
 
    	
“Trademark Consent   Agreement”
    	
 
    	
6.2.1
    	
 
    
	
 
    	
“USPTO”
    	
 
    	
4.2.1
    	
 
    


 

2.              LICENSE GRANTS AND OTHER OBLIGATIONS.

 

2.1.         License Grants.

 

2.1.1.                  Kadmon hereby grants to AbbVie, and AbbVie hereby accepts, a royalty-free, non-exclusive, perpetual and irrevocable license, with a right to grant sub-licenses to its Affiliates and otherwise in accordance with Section 2.1.4, under the Kadmon IP Rights, to make or have made and Commercialize BID Product in the Territory.

 

2.1.2.                  Kadmon hereby grants to AbbVie, and AbbVie hereby accepts, an exclusive (even as to Kadmon and its Affiliates, and any successor and assign thereof), perpetual and irrevocable license, with a right to grant sub-licenses to its Affiliates and otherwise in accordance with Section 2.1.4, under (a) the Kadmon IP Rights and (b) the QD Product Trademark, subject to Section 3.2, to develop, make or have made, use and Commercialize the Exclusive Product in the Territory.

 

2.1.3.                  Kadmon hereby further grants to AbbVie, and AbbVie hereby accepts an exclusive (even as to Kadmon and its Affiliates, and any successor and assign thereof), royalty-free, perpetual and irrevocable license, with a right to grant sub-

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

licenses to its Affiliates and otherwise in accordance with Section 2.1.4, to cross-reference Kadmon’s Regulatory Approvals (including the ANDA) and Kadmon Know-How for purposes of exercising AbbVie’s rights hereunder in the Territory and the OUS Territory, including for purposes of obtaining and maintaining Regulatory Approvals for Exclusive Products.

 

2.1.4.                  AbbVie shall have the right to grant sublicenses to Third Parties under the licenses granted to AbbVie in Sections 2.1.1, 2.1.2 and 2.1.3 for purposes of (a) manufacturing the Product and/or (b) developing Exclusive Product, in each case, in accordance with the terms and conditions of this Agreement and the Ancillary Agreements.

 

2.1.5.                  Kadmon shall retain ownership and shall not be deemed to have granted a license under this Agreement to any rights or assets or for any purpose other than expressly set forth in this Section 2.1.

 

2.1.6.                  Neither AbbVie, its Affiliates nor their respective sublicensees shall, directly or indirectly, sell Product for use in clinical trials; provided, that nothing herein shall prohibit AbbVie from procuring supplies of Product for the purpose of performing its own clinical trials and development activities.

 

2.2.         Delivery of Kadmon Know-How and Regulatory Documentation.

 

2.2.1.                  In furtherance of the rights and license granted by Kadmon to AbbVie under this Agreement, Kadmon shall, within thirty (30) days after the Effective Date, and regularly thereafter during the Term on an ongoing basis, provide AbbVie (a) copies of Kadmon Know-How (b) copies of Kadmon’s Regulatory Approvals (including the ANDA) and any other regulatory filings and materials relating thereto, in the case of each of clauses (a) and (b), that are necessary or useful for AbbVie to Commercialize the Product or develop the Exclusive Product in the Territory and in the OUS Territory.

 

2.2.2.                  Without limiting Section 2.2.1, Kadmon shall, on the first Business Day following the Effective Date, submit to the FDA a letter in the form of the letter attached hereto as Schedule 2.2.2 documenting AbbVie’s right of reference to filings with the FDA relating to the Product, including all abbreviated new drug applications, granted under Section 2.1.3.  Kadmon shall further file with the FDA, on the first Business Day following the Effective Date, an ANDA change documenting AbbVie’s addition as a distributor of the Product.

 

2.2.3.                  Promptly following the Effective Date, the Parties shall establish the JPMT in accordance with the terms set forth on Schedule 1.26 to oversee interactions between the Parties in order to facilitate the delivery of materials identified in this Section 2.2 and for all other matters set forth in Schedule 1.26.

 

2.3.         Exclusivity.  Kadmon and its Affiliates shall not, directly or indirectly, during the Term, (a) develop, manufacture, have manufactured, use, or Commercialize Exclusive Product or any capsule product containing more than 200mg of Ribavirin in the Territory or the OUS Territory or enter into any relationship with any Third Party to develop,

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

manufacture, have manufactured, use, or Commercialize Exclusive Product or any capsule product containing more than 200mg of Ribavirin, or (b) provide to any Third Party any right to reference Kadmon’s Regulatory Approvals and other regulatory filings and materials (including the ANDA and any DMFs applicable to Product) in order for such Third Party to secure or submit any applications for Regulatory Approval for Exclusive Product or otherwise provide any Third Party information included in the ANDA or its DMFs applicable to Product in order to secure or submit any applications for Regulatory Approval for Exclusive Product.

 

2.4.         QD Product Development.  Kadmon is responsible at its own cost, either by itself or via subcontractors, for undertaking the development activities necessary to obtain Regulatory Approvals for QD Product (“QD Product Development”).  Kadmon will use Commercially Reasonable Efforts to complete QD Product Development and will conduct such activities in accordance with Applicable Laws (including, to the extent applicable, current good clinical practices, current good laboratory practices, and current good manufacturing practices) and sound and ethical business and scientific practices.  Kadmon shall update AbbVie on a Calendar Quarter basis, and from time-to-time upon AbbVie’s request, regarding the progress of the QD Product Development; provided that AbbVie shall have no financial or other obligations with respect to the performance of QD Product Development, other than milestone payments under Section 6.2.

 

2.5.         Co-Promotion of QD Product.  In the event AbbVie pays to Kadmon the performance milestone described in Section 6.2.2, then within *** (***) days after such payment, the Parties shall negotiate in good faith with a view to entering into a co-promotion agreement with respect to QD Product in the Territory on terms mutually acceptable to the Parties.

 

3.              REGULATORY MATTERS.

 

3.1.         Maintenance of Regulatory Approvals Generally.

 

3.1.1.                  Kadmon shall be solely responsible for maintaining all Regulatory Approvals and related Governmental Authority filings in the Territory, and shall maintain such Regulatory Approvals and related Governmental Authority filings in a manner consistent with Applicable Law throughout the Term.  Kadmon shall not have the right to withdraw or otherwise cease maintaining the Regulatory Approvals and related Governmental Authority filings in the Territory during the Term.  AbbVie shall, upon reasonable requests made at reasonable intervals, be provided the opportunity to make copies of the Regulatory Approvals and related Governmental Authority filings (redacted of any Kadmon Confidential Information not relating to Product), including all correspondence with Governmental Authorities regarding Product, and Kadmon shall furnish AbbVie within five (5) Business Days of filing: (a) each application and/or filing submitted by Kadmon to a Governmental Authority for any Regulatory Approval or maintenance of such Regulatory Approval hereunder and the issuance of any such Regulatory Approval; and (b) the renewal, extension, modification or revocation of any Regulatory Approval.  Kadmon shall consult with AbbVie prior to proposing any material change to Product and/or any Regulatory Approval to a Governmental Authority, or acceding to any material change to Product and/or any such Regulatory Approval proposed

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

by a Governmental Authority, and shall (x) not submit any proposed material change without AbbVie’s prior written consent, and (y) accommodate any concerns raised by AbbVie as a result of such consultation.

 

3.1.2.                  Kadmon shall provide to AbbVie prior written notice of any and all DMF-related submissions to Governmental Authorities, after Kadmon receives notice from the applicable Third Party. Without limiting the foregoing, Kadmon shall notify AbbVie of any communications with any applicable Governmental Authority relating to the potential discontinuance and/or withdrawal of the DMF, or any safety, efficacy or potency concern relating to Product within five (5) Business Days of receipt.

 

3.1.3.                  At Kadmon’s reasonable request, AbbVie shall promptly, but in no case no later than ten (10) Business Days after such request, provide Kadmon with documents in its Control and possession related to the Commercialization of Product and reasonably necessary for Kadmon to maintain the Regulatory Approvals in the Territory.

 

3.2.         NDC#s and Distributors.  AbbVie shall distribute and sell the Product using NDC#s that reflect AbbVie as a distributing and selling party.  The Parties shall take all actions necessary to obtain such new NDC#s as promptly as practicable.  Kadmon shall further file a change to the ANDA adding AbbVie as a distributor of Product.

 

3.3.         Regulatory Interactions in the Territory.

 

3.3.1.                  BID Product-related interactions:

 

a)             Subject to Section 3.3.2, Kadmon shall be primarily responsible for interfacing, corresponding and meeting with Governmental Authorities with respect to the BID Product in the Territory.  Notwithstanding the foregoing, with respect to BID Product Commercialized by AbbVie hereunder, Kadmon is obligated to submit such materials to Governmental Authorities as AbbVie may provide from time-to-time to enable AbbVie’s Commercialization of BID Product, and Kadmon shall take all such actions as are necessary to enable AbbVie to communicate with Governmental Authorities with respect to such BID Product and related materials.

 

b)             Kadmon shall provide AbbVie reasonable prior notice of any meetings and conferences scheduled with Governmental Authorities in the Territory with respect to BID Product.  At all such meetings and conferences AbbVie shall have the right to attend as an observer to the extent permitted by Governmental Authorities; provided that AbbVie shall be permitted to contribute and participate in interactions during such meetings as they pertain to BID Product Commercialized by AbbVie hereunder.

 

c)              Kadmon shall promptly forward, but in no case no later than five (5) Business Days after receipt, copies of any communication it receives from any Governmental Authority in the Territory with respect to BID Product.  However, should such communication relate to the safety of BID Product, Kadmon shall forward such communication to AbbVie within twenty-four (24)

 

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hours of receipt and otherwise in accordance with the SDEA.  Kadmon shall forward to AbbVie all regulatory documents intended for submission with the applicable Governmental Authority and directed specifically to BID Product fifteen (15) Business Days prior to such submission.  Kadmon shall exercise Commercially Reasonable Efforts to accommodate any concerns raised by AbbVie as a result of such consultation.

 

3.3.2.                  Exclusive Product-related interactions:

 

a)             Notwithstanding the foregoing in Section 3.3.1, the Parties acknowledge and agree that AbbVie shall be primarily responsible for interfacing, corresponding and meeting with Governmental Authorities with respect to the development and Commercialization of Exclusive Product in the Territory.  Kadmon will provide and make all necessary filings with Governmental Authorities, with assistance of AbbVie Regulatory Affairs, to enable AbbVie to communicate with Governmental Authorities with respect to such Exclusive Products in the Territory.  Kadmon shall further, upon AbbVie’s request, provide all necessary materials and information necessary for AbbVie to communicate and make all necessary filings with Governmental Authorities.

 

b)             Kadmon shall not, without the consent of AbbVie or unless so required by Applicable Law, correspond or communicate with Governmental Authorities concerning Exclusive Product.  If Kadmon is advised by its legal counsel that it is required by Applicable Law to communicate with Governmental Authorities, then Kadmon shall so advise AbbVie as soon as practicable and, unless Applicable Law prohibits, provide AbbVie, to the extent practicable, in advance with a copy of any proposed written communication with Governmental Authorities and reasonably comply with any and all reasonable direction of AbbVie concerning any meeting or written or oral communication with Governmental Authorities concerning such Exclusive Products.

 

3.3.3.                  Marketing Materials-related interactions shall be handled in accordance with Section 4.3.

 

3.4.         Regulatory Compliance.

 

3.4.1.                  In the exercise of its rights and the performance of its obligations under this Agreement, including the Commercialization of Product, AbbVie shall comply with all Applicable Laws and with all applicable Regulatory Approvals.

 

3.4.2.                  In the exercise of its rights and the performance of its obligations under this Agreement, including the manufacture, packaging, and Commercialization of, and regulatory interactions regarding, Product hereunder and/or generally outside of this Agreement, Kadmon shall comply with all Applicable Laws, and with all applicable Regulatory Approvals. Without limiting the generality of this Article 3, all Product manufactured, packaged and labeled, and Commercialized by Kadmon shall be manufactured, packaged and labeled, and Commercialized strictly in accordance with Applicable Laws and Regulatory Approvals.

 

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3.5.         Regulatory Assistance.  Kadmon shall help prepare and submit such filings with applicable Governmental Authorities as may be necessary or useful for AbbVie to exercise its rights or carry out its obligations under this Agreement (including such filing as may be requested by AbbVie).  In the event that AbbVie desires to prepare any such filings, AbbVie shall have the right to do so, and Kadmon shall be obligated to submit such filings as prepared by AbbVie. Further, Kadmon shall provide AbbVie with reasonable assistance with respect to Kadmon’s submission under the ANDA of the AbbVie Product Marks. The documented out-of-pocket costs directly associated with any filings pursuant to this Section 3.5 shall be borne by AbbVie.

 

3.6.         FDA Audit.  Upon the request of the FDA or any other Governmental Authority, such agency shall be granted access to observe and inspect each Party’s facilities and/or the procedures used in the manufacturing or warehousing of Product and to audit such facilities and such procedures for compliance with current good manufacturing practices and/or other Applicable Laws.  The Party being audited shall provide notice to the other Party.  The audited Party shall provide a reasonable written description of any such governmental inquiries, notifications or inspections within two (2) days after such visit or inquiry; provided, that the audited Party shall also furnish to the other Party (a) any report or correspondence issued by the FDA or other Governmental Authority in connection with such visit or inquiry, including any FDA Form 483 (List of Inspectional Observations) or applicable portions of any FDA Warning Letters which pertain to Product in the Territory and (b) in accordance with above, copies of proposed responses or explanations relating to items set forth above, in each case redacted of trade secrets or other Confidential Information of such Party or its Affiliates that are unrelated to its obligations under this Agreement or are unrelated to Product.  After the filing of a response with the FDA or other Governmental Authority, the filing Party will promptly notify the other Party of any further contacts with such agency relating to the subject matter of the response.

 

3.7.         Recalls.

 

3.7.1.                  Each Party shall notify the other Party within twenty-four (24) hours of any issue it discovers that could potentially lead to a recall of BID Product.  Kadmon shall be solely responsible for investigating the circumstances and conducting such a recall and communications with Governmental Authorities and/or the public regarding the recall.  However, Kadmon shall consult with AbbVie and reasonably consider AbbVie’s input when deciding whether to conduct a recall and pertaining to recall-related communications.

 

3.7.2.                  AbbVie shall notify Kadmon within twenty-four (24) hours of any issue it discovers that could potentially lead to a recall of Exclusive Product which relates to the BID Product component.  AbbVie shall be solely responsible for investigating the circumstances and conducting such a recall and communications with Governmental Authorities and/or the public regarding the recall.  Kadmon shall cooperate with AbbVie in giving full effect to any investigation and/or recall as it relates to the BID Product component of an Exclusive Product.

 

3.7.3.                  Kadmon shall be responsible for all costs associated with all mandatory or voluntary recalls that relate to Product manufactured by or on behalf Kadmon under

 

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the Supply Agreement. AbbVie shall be responsible for all costs associated with all mandatory or voluntary recalls that relate to Product manufactured by or on behalf AbbVie.

 

4.              COMMERCIALIZATION.

 

4.1.         Diligence Obligations. AbbVie shall use Commercially Reasonable Efforts to pursue Regulatory Approvals to market, and, if Regulatory Approval is obtained, commercially launch, the Exclusive Product in the Territory.

 

4.2.         Product Trademark, AbbVie Product Marks, and Labeling.

 

4.2.1.                  AbbVie shall have the right to Commercialize BID Product or Co-packaged BID Product under either (a) the Product Trademark or Product Trade Dress or (b) trademarks or trade dress that AbbVie develops and obtains approval for on its own from the U.S. Patent and Trademark Office (“USPTO”), provided, however, to the extent that AbbVie does not obtain approval from the USPTO for a given trademark or trade dress, then such trademark or trade dress shall not be confusingly similar to the Product Trademark (“AbbVie Product Marks”). AbbVie shall be the sole and exclusive owner of the AbbVie Product Marks, including any goodwill associated therewith.

 

4.2.2.                  AbbVie shall Commercialize the Co-packaged QD Product using the QD Product Trademark (in addition to such other AbbVie Product Marks as AbbVie may choose to apply), only in the event that the QD Product Trademark is approved by both the FDA and the USPTO. In the event the QD Product Trademark is not approved by both the FDA and USPTO, then AbbVie shall have no obligation to use the QD Product Trademark.

 

4.2.3.                  The Parties shall use Commercially Reasonable Efforts to obtain approval for the AbbVie Products Marks from all applicable Governmental Authorities, including Kadmon filing any materials that AbbVie reasonable requests in connection therewith.

 

4.3.         Marketing Materials.  AbbVie shall have the right to develop its own Marketing Materials and other promotional and labeling materials. With respect to the BID Product, AbbVie shall coordinate with Kadmon and provide any Marketing Materials in advance to Kadmon for review. AbbVie shall, with support from Kadmon (including Kadmon’s submission of appropriate documentation to enable AbbVie to), obtain all necessary advanced regulatory review and approval of Marketing Materials developed after the Effective Date by AbbVie for the BID Product, including submitting such Marketing Materials to the Office of Prescription Drug Promotion, and shall provide copies of the Marketing Materials so submitted to Kadmon for its records. AbbVie shall be responsible for adherence to regulations governing labeling, prescription drug advertising and prescription drug marketing with respect to its own Marketing Materials.

 

4.4.         Product Price.

 

4.4.1.                  AbbVie shall have the exclusive right to establish the price and to initiate any

 

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promotional pricing program for Product sold or distributed by AbbVie or on its behalf hereunder in the Territory. AbbVie also shall be solely responsible for booking sales of Product sold or distributed by AbbVie or on its behalf hereunder in the Territory.

 

4.4.2.                  Notwithstanding anything to the contrary in Article 3, AbbVie shall be solely responsible for communications and filings with and submissions to any Governmental Authority or other federal, state or local governmental authority concerning Product sales, prices, discounts, rebates, fees, charge-backs, and other payments associated with AbbVie’s distribution and sale of Product under this Agreement, including all reporting and disclosure obligations under the Medicaid Drug Rebate Program (e.g., Monthly and Quarterly Average Manufacturer Price, Baseline Average Manufacturer Price, and Rebate Per Unit, as applicable), Medicare Part B (Quarterly Average Sales Price), the Veteran’s HealthCare Act 602 (Public Health Service 340B Quarterly Ceiling Price), the Veteran’s HealthCare Act 603 (Quarterly and Annual Non-Federal Average Manufacturer Price and Federal Ceiling Price), Best Price, Federal Supply Schedule Contract Prices and Tricare Retail Pharmacy Refunds and Medicare Part D.

 

4.4.3.                  AbbVie shall be solely responsible for all federal, state and local government and private purchasing, pricing or reimbursement programs with respect to Product sold by AbbVie, including taking all necessary and proper steps to execute agreements and file other appropriate reports and other documents with governmental and private entities. AbbVie shall be solely responsible for payment and processing of all rebates, whether required by contract or local, state or federal law, for Product sold by AbbVie.

 

4.4.4.                  Kadmon shall provide all assistance reasonably requested by AbbVie in implementing the provisions of this Section 4.3 and shall ensure that all information furnished to AbbVie is complete and accurate in all respects.

 

4.5.         Exclusive Product Exclusivity. In accordance with Section 2.3, neither Kadmon nor any of its Affiliates shall seek or solicit or enter into any arrangements to seek or solicit by way of Third Parties or otherwise, customers for Exclusive Product in the Territory. During the Term, neither Kadmon nor any Affiliate of Kadmon shall promote, sell or otherwise distribute Exclusive Products in the Territory or knowingly sell or otherwise distribute Exclusive Products to any Third Party for promotion, resale or other distribution in the Territory except as expressly provided herein. If Kadmon or any Affiliate of Kadmon receives any orders for Exclusive Product, Kadmon shall refer all such orders to AbbVie or AbbVie’s designee.  If Kadmon or any Affiliate of Kadmon becomes aware that any Third Party to which Kadmon or any Affiliate has sold or otherwise distributed Product has promoted, resold or distributed such Product as Exclusive Product in the Territory, Kadmon and its Affiliates shall provide immediate written notice to such Third Party to cease any such commercialization activities with respect to Exclusive Product and copy AbbVie on such notice.  If such Third Party fails to cease such commercialization activities with respect to Exclusive Product within ten (10) Business Days after delivery of such notice, or such Third Party ceases such commercialization activities but at a later time again promotes, resells or distributes such Product as Exclusive Product in the Territory, then Kadmon shall immediately cease any

 

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further sale or distribution of Product to such Third Party.

 

4.6.         Phase IV Studies.  AbbVie shall have the right to conduct, at its own cost and expense, Phase IV clinical studies for the Product in the Territory; provided, however, that AbbVie shall provide Kadmon with a copy of such study reports as result from Phase IV clinical studies for which the primary objective is studying the Product (and not, for instance, studies regarding Hepatitis C virus in general) for Kadmon’s use; provided, further, that, such study reports shall be AbbVie’s Confidential Information and shall be handled by Kadmon in accordance with the terms and conditions of Article 9.

 

5.              PHARMACOVIGILANCE.

 

5.1.         SDEA.  Within ninety (90) days after the Effective Date, the Parties shall enter into an agreement to initiate the process for the exchange of pharmacovigilance data in a mutually agreed format to ultimately be reflected in a definitive safety data exchange agreement (“SDEA”), including post-marketing spontaneous reports received by a Party or its Affiliates in order to monitor the safety of the Product and to meet reporting requirements with any applicable Governmental Authority.  The Parties agree that there shall only be one SDEA with respect to this Agreement and the Asset Purchase Agreement.

 

6.              CONSIDERATION AND REPORTING.

 

6.1.         Upfront Payment.  In partial consideration for the rights and licenses granted by Kadmon to AbbVie hereunder, AbbVie shall pay a one-time upfront payment of forty-four million dollars (US$44,000,000); provided that *** (US$***) of such one-time upfront payment (the “Escrow Amount”) shall be delivered by or on behalf of AbbVie by wire transfer of immediately available funds to the Escrow Agent for deposit in accordance with the terms of the Escrow Agreement in order to help secure the indemnification obligations of Kadmon under this Agreement; provided, however that the amount escrowed shall in no event limit or otherwise restrict AbbVie’s ability to collect or obtain Losses from Kadmon in excess of the Escrow Amount.  All funds deposited with the Escrow Agent shall be applied by the Escrow Agent in accordance with the Escrow Agreement.  AbbVie shall pay the remaining balance of the upfront payment to Kadmon on the Effective Date by wire transfer of immediately available funds to a bank account designated by Kadmon.  Kadmon shall provide to AbbVie the wire transfer information of its designated account at least three (3) days prior to the Effective Date.

 

6.2.         Performance Milestone Payments.  AbbVie shall make the payments set forth below in this Section 6.2 as additional consideration for the rights and licenses granted by Kadmon to AbbVie hereunder:

 

6.2.1.                  On the Effective Date, AbbVie shall file an intent to use trademark application for the Product Trademark with the USPTO, and Kadmon shall withdraw its Product Trademark application not later than one Business Day following the filing of the intent to use trademark application for the Product Trademark by AbbVie. Kadmon shall also execute a trademark consent agreement in the form of the agreement attached hereto as Exhibit A (the “Trademark Consent Agreement”) in

 

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anticipation of the event that Kadmon’s RibaSphere, RibaPak, or other trademark applications are cited against AbbVie’s application for the Product Trademark. AbbVie shall make a one-time payment to Kadmon in the amount of *** not later than ten (10) Business Days after both of the following have occurred:  (a) Kadmon has filed a request for express abandonment (withdrawal) of its application for the Product Trademark with the USPTO, and (b) Kadmon has delivered an executed Trademark Consent Agreement, consenting to AbbVie’s trademark application for the Product Trademark.

 

6.2.2.                  AbbVie shall make a one-time payment to Kadmon in the amount of *** not later than ten (10) Business Days after Kadmon has provided AbbVie with a copy of a final study report (in a form appropriate for submission to the FDA) demonstrating (a) the Bioequivalence of the QD Product with its reference product for each dosage strength of the QD Product and (b) meeting any other end points of such study.

 

6.2.3.                  AbbVie shall make a one-time payment to Kadmon in the amount of *** not later than ten (10) Business Days after the first commercial sale to a Third Party in the Territory of QD Product by or on behalf of Kadmon (after all required Regulatory Approvals in the Territory for the QD Product have been obtained).

 

6.3.         Royalties.

 

6.3.1.                  Subject to the terms of this Agreement, for a period of *** years commencing on the day immediately following AbbVie’s first commercial sale of Exclusive Product in the Territory (the “Royalty Term”), an annual royalty payment (the “Royalty Payment”) equal to ***% of the RSP of annual Unit Sales of Exclusive Products in the Territory will be paid by AbbVie to Kadmon. (An illustrative example of the calculation of the Royalty Payment is set forth on Schedule 6.3.1.)  Following the Royalty Term, no additional Royalty Payment shall be due and owing except for any Royalty Payment that was accrued but unpaid during such Royalty Term.  Notwithstanding the foregoing or anything to the contrary herein, (a) no Royalty Payment will be due and owing for the Co-Packaged Bid Product if AbbVie no longer has the right to reference or use the abbreviated new drug application number 077-456 (the “ANDA”), including if the ANDA is revoked, and (b) in the event that Kadmon has obtained Regulatory Approval for the QD Product, for purposes of this Section 6.3.1, “Exclusive Product” will include, for so long as AbbVie has the right to reference or use the Regulatory Approval covering such QD Product, any product containing (i) a single immediate release standalone tablet (and specifically excluding capsules) formulated (whether or not by or on behalf of Kadmon or whether or not using Kadmon Know-How) to contain the entire daily Ribavirin dose of 600mg, 800 mg, 1000mg, or 1200mg, as applicable, for patients and (ii) any other approved drug, in separate final dosage forms, packaged together with appropriate labeling, intended for use together for the ease of the patient.

 

6.3.2.                  Within *** (***) days after the end of each Calendar Quarter, AbbVie shall deliver a report to Kadmon specifying the Unit Sales of Exclusive Product in the

 

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Territory during the just completed Calendar Quarter, and the actual aggregate amount payable to Kadmon on account of such sales of Exclusive Product during such Calendar Quarter, which report will provide Kadmon with calculations of the amount of the Royalty Payment in sufficient detail to enable Kadmon to review Unit Sales of the Exclusive Product for the period and the amount of the Royalty Payment paid.  Any amounts payable by AbbVie under this Section 6.3.1 shall be due and payable within *** (***) days after the end of each Calendar Quarter.

 

6.3.3.                  At any time during the Royalty Term, the Royalty Payment due for any Co-packaged BID Product having a 400mg or greater dose of Ribavirin (such 400mg or greater dose of Ribavirin, the “High Dose BID Product”) shall be reduced by eighty percent (80%) in the event one or more Third Parties commercializes in the Territory (a) a High Dose BID Product and (b) such Third Party(ies)’ High Dose BID Product(s) achieve a twenty-five percent (25%) market share by unit sales (as determined by IMS Health or other reputable source) for such High Dose BID Product(s).

 

6.3.4.                  At any time during the Royalty Term, the Royalty Payment due for a Co-packaged QD Product having a 600mg or greater dose of Ribavirin (such 600mg or greater dose of Ribavirin, the “High Dose QD Product”) shall be reduced by eighty percent (80%) in the event one or more Third Parties commercializes in the Territory (a) a High Dose QD Product and (b) such Third Party(ies)’ High Dose QD Product(s) achieve a twenty-five percent (25%) market share by unit sales (as determined by IMS Health or other reputable source) for such High Dose QD Product(s).  An illustrative example of the calculation of a reduction of the Royalty Payment is set forth on Schedule 6.3.1.

 

6.3.5.                  The reduction of the Royalty Payments as described in Sections 6.3.3 and 6.3.4 shall not take effect until the first day of the Calendar Quarter next following the Calendar Quarter during which the matters described in (a) Sections 6.3.3(a) and (b); or (b) Sections 6.3.4(a) and (b), as applicable, first occur.

 

6.4.         Withholding.  Notwithstanding any other provision of this Agreement, AbbVie shall be entitled to withhold, or cause to be withheld, any and all amounts paid or deemed paid by it to any Person as a result of the transactions contemplated by this Agreement, that it reasonably believes are required to be withheld under Applicable Law. To the extent such amounts are so deducted and withheld and paid over to the applicable Governmental Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid and the payor Party shall secure and send to the payee Party evidence in its possession of such payment.

 

6.5.         Records and Audits.

 

6.5.1.                  Each Party and its Affiliates shall maintain complete and accurate books and records of account, in accordance with generally accepted accounting principles in the United States, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by a Party to the other Party under this Agreement, and all payments by a Party to the other Party

 

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under this Agreement. Upon reasonable written notice to a Party, but no more often than once per Calendar Year, such Party shall permit, and shall cause its Affiliates to permit, an independent certified public accountant of national standing designated by the other Party to audit such books and records of account of such Party and its Affiliates, in order to confirm the accuracy and completeness of all such reports and all such payments. The accounting firm shall disclose to the Party requesting the audit only whether the audited reports are correct or incorrect and the specific details concerning any discrepancies.  No other information shall be provided to the Party requesting the audit.

 

6.5.2.                  The Party requesting an audit shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit correctly identifies any underpayments by the audited Party hereunder or overpayments by the auditing Party that are the fault of the audited Party hereunder in excess of ***% of the amount actually payable by such Party to the Party requesting the audit hereunder, or ***, whichever is greater, then, in addition to paying the full amount of such underpayment or overpayment, plus accrued interest in accordance with Section 6.7, the audited Party shall reimburse the other Party for all reasonable costs and expenses incurred by such Party in connection with that audit.  In the event that such audit reveals an overpayment by the audited party, or an underpayment by the auditing Party, the auditing Party shall promptly refund any such overpayment or pay to the audited Party the amount of such underpayment, as applicable.

 

6.5.3.                  The audited Party shall not be required to maintain books and records for more than two (2) years following the end of any Calendar Year.

 

6.5.4.                  The Party requesting an audit shall treat all financial information subject to review under this Article 6 in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with the audited Party and/or its Affiliates obligating it to retain all such information in confidence pursuant to such confidentiality agreement, unless the accounting firm is already subject to confidentiality obligations by virtue of its professional engagement with the Party being audited in which case a separate confidentiality agreement shall not be required.

 

6.6.         Currency. All payments to be made by a Party under this Agreement shall be paid in USD, by wire transfer, pursuant to the instructions of Kadmon, as designated from time to time at least seven (7) Business Days prior to the date payment is due.

 

6.7.         Late Payment. In the event that any payment is not paid in accordance with the provisions of this Article 6, the overdue amount shall bear interest, at a rate equal to the Fed (U.S.) Prime Rate, as of the date such payment is due, per annum, or, if lower, the maximum rate permitted under Applicable Law, as of the date the payment is due, until the entire unpaid overdue amount shall have been paid in full.

 

7.              MANUFACTURE AND SUPPLY.

 

7.1.         Supply from Kadmon. Contemporaneously with this Agreement, the Parties will execute

 

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the Supply Agreement pursuant to which Kadmon will supply to AbbVie and AbbVie will purchase from Kadmon, the quantities of AbbVie’s requirements for Product in semi-finished and/or finished form as set forth in the Supply Agreement (“Supply Agreement Requirements Obligation”).

 

7.2.         Alternative Supply Arrangements. In accordance with the Supply Agreement, Kadmon shall use Commercially Reasonable Efforts to facilitate AbbVie establishing itself or a Third Party as an alternate manufacturer of Product to supply AbbVie’s worldwide requirements for Product beyond the Supply Agreement Requirements Obligation (including in the event of circumstances in which Kadmon’s supply is interrupted and Kadmon is unable to fulfill the Supply Agreement Requirements Obligation).

 

8.              INTELLECTUAL PROPERTY RIGHTS.

 

8.1.         Prosecution and Maintenance of Kadmon Patent Rights.

 

8.1.1.                  Kadmon shall use Commercially Reasonable Efforts to secure and protect the Kadmon Patent Rights, at its own cost, including, filing and prosecuting any patent applications and maintaining any patents within the Kadmon Patent Rights; provided, however, that Kadmon may at any time decline to undertake or continue such prosecution or maintenance of Kadmon Patent Rights. If Kadmon elects not to file, prosecute or maintain any Kadmon Patent Rights in the Territory, Kadmon shall provide written notice, within a reasonable period of time (which in any event will not be less than ninety (90) days prior to the next action or payment due date required to keep such Kadmon Patent Right in full force and effect), of such election to AbbVie and, in the event AbbVie so elects, shall assign such rights to AbbVie and shall execute such documents and perform such acts as may be reasonably necessary to so assign such rights to AbbVie and such Patent Rights shall cease to be Kadmon Patent Rights.

 

8.1.2.                  Kadmon shall have the first right to control any interference, opposition, post-grant review, reexamination and similar proceedings relating to Kadmon Patent Rights claiming the Product. AbbVie shall be provided prompt notice of the institution of such proceedings, or the intent to institute such proceedings, within a reasonable period of time, and shall provide AbbVie advance copies of any documents related thereto for review and comment; provided, however, that the final decision with respect thereto shall rest with Kadmon.

 

8.1.3.                  Without limiting the foregoing, AbbVie shall be copied on all filings and correspondence to, and Kadmon shall promptly provide to AbbVie copies of all correspondence received from, the USPTO regarding Kadmon Patents Rights covering, including disclosing and/or claiming, the QD Product.

 

8.2.         Third Party Infringement.

 

8.2.1.                  Each Party shall promptly report in writing to the other Party during the Term any (a) known or suspected infringement of any Kadmon Patent Rights, or (b) unauthorized use of any Kadmon Know-How, of which such Party becomes aware (“Infringement”).  The reporting Party shall provide the other Party with all

 

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available evidence supporting such infringement, suspected infringement, unauthorized use or suspected unauthorized use. Promptly after receipt of a notice of Infringement, the Parties shall discuss in good faith the infringement and appropriate actions that could be taken to cause such infringement to cease.

 

8.2.2.                  Kadmon shall have the first right to initiate a suit or take other appropriate action that it believes is reasonably required to protect the Kadmon Know-How or the Kadmon Patent Rights claiming the Product in the Territory against any Infringement. If Kadmon decides not to initiate a suit or take other appropriate action with respect to any such Infringement in the Territory, AbbVie may undertake such actions, in which case Kadmon shall, and shall cause its Affiliates to, cooperate with AbbVie in its efforts to initiate a suit or take other appropriate action with respect to any Infringement in the Territory and shall agree to be parties in any suit, if requested.

 

8.2.3.                  Without regard to which Party initiates a suit or takes other appropriate action with respect to any Infringement in the Territory under Section 8.2.2, all costs (including all reasonable costs and expenses associated with any defense of a claim hereunder) associated with any such action in the Territory, and any costs and expenses incurred by any Party or its Affiliates with respect to any Infringement shall be the sole responsibility of the Party initiating the action.  Any proceeds from such actions shall be allocated between the Parties first to compensate each Party on a pro rata basis for amounts it incurred in pursuing such actions and second to the Party instituting the action.

 

8.2.4.                  The enforcing Party under Section 8.2.2 shall have the sole and exclusive right to select counsel for any suit initiated by it.  If required under Applicable Law in order for such enforcing Party to initiate and/or maintain such suit or action, the other Party shall join as a party to the suit or action.  Such other Party shall offer reasonable assistance to such enforcing Party in connection therewith at such enforcing Party’s cost and expense.

 

8.3.         Patent Infringement Claims Against Kadmon and/or AbbVie.

 

8.3.1.                  In the event of the institution of any infringement claim against either Party as a result of any claim made or brought by any Third Party that the manufacture, use, sale or other Commercialization of the Product infringes, misappropriates or otherwise conflicts with the Patent Rights or any other intellectual property rights of any Third Party (“Infringement Claim”), the Party first having notice shall as soon as reasonably practicable notify the other Party.

 

8.3.2.                  AbbVie shall have the first right to defend the Parties and their Affiliates against an Infringement Claim.  Kadmon shall, and shall cause its Affiliates to, reasonably cooperate with AbbVie at Kadmon’s own expense in its efforts to defend against such Infringement Claim if requested, and shall agree to be a party in any suit, if requested by AbbVie.  Further, Kadmon shall have a right, in Kadmon’s sole discretion and at Kadmon’s sole expense, to join or otherwise participate in such legal action with legal counsel selected by Kadmon; provided, however, that such participation shall not undermine AbbVie’s right to control such legal action.

 

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AbbVie shall notify and keep Kadmon apprised in writing of such action.  Any settlement of such Infringement Claim that would admit liability on the part of Kadmon or any of its agents or Affiliates shall be subject to Kadmon’s prior written approval, which approval will not be unreasonably withheld, conditioned or delayed.  If AbbVie decides not to pursue defense of any such Infringement Claim, Kadmon may defend such Infringement Claim, in which case AbbVie shall, and shall cause its Affiliates to, cooperate fully with Kadmon in its efforts to defend such Infringement Claim and shall agree to be parties in any suit, if requested.  Any settlement of such Infringement Claim that would admit liability on the part of AbbVie or any of its agents or Affiliates shall be subject to AbbVie’s prior written approval, such approval to be granted or withheld by AbbVie in its sole discretion. Without regard to which Party defends an Infringement Claim under this Section 8.3.2, all damages in excess of the Deductible (as defined in Section 11.4 hereof), including all reasonable costs and expenses associated with any defense of a claim hereunder, associated with any such Infringement Claim, and any costs and expenses incurred by any Party or its Affiliates to obtain a license or otherwise settle any Infringement Claim, shall be the sole responsibility of Kadmon and Kadmon shall promptly reimburse any costs and expenses incurred by AbbVie with respect thereto in excess of the Deductible; provided, however, that (a) if the amounts paid or contractually required to be paid by Kadmon under this Section 8.3.2, under Section 8.3.3 or Section 11.2 for purposes of obtaining a license or otherwise settling any Infringement Claim(s) (including amounts for defense costs), exceeds ten million dollars (US$10,000,000) in the aggregate after taking into consideration the Deductible, then AbbVie shall obtain the prior written consent of Kadmon, which consent shall not be unreasonably withheld or delayed, prior to paying or agreeing to pay such amounts in connection with obtaining any such license or settling any such Infringement Claim(s); and (b) AbbVie shall obtain Kadmon’s prior written consent, which consent shall not be unreasonably withheld or delayed, for any settlement or licensing that involves any agreement or commitment imposing any affirmative obligation or restriction on the part of Kadmon, other than the payment of money on terms consistent with this Section 8.3.2.

 

8.3.3.                  If, during the Term, a Party believes it is necessary to seek a license from any Third Party in order to avoid or settle an Infringement Claim during the exercise of the rights herein granted, whether or not there has been the institution of any Infringement Claim, such Party shall notify the other Party.  In the event AbbVie determines itself that it would be advisable to obtain such a license, then AbbVie shall have the right, at its sole discretion, to obtain such a license; provided, however, that if the amounts paid or contractually required to be paid by Kadmon under Section 8.3.2, under this Section 8.3.3 and Section 11.2 for purposes of obtaining a license or otherwise settling any Infringement Claim(s) (including amounts for defense costs), exceeds ten million dollars (US$10,000,000) in the aggregate after taking into consideration the Deductible, then, AbbVie shall obtain the prior written consent of Kadmon, which consent shall not be unreasonably withheld or delayed, prior to paying or agreeing to pay any such amounts in connection with obtaining any such license or settling any such Infringement Claim(s).  Subject to the preceding sentence, all costs and expenses incurred by either Party associated with obtaining and maintaining a license shall be deemed

 

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Existing Third Party Royalties and shall be the sole responsibility of Kadmon in accordance with Section 8.5.

 

8.4.         Maintenance and Protection of the QD Product Trademark and AbbVie Product Mark.

 

8.4.1.                  Kadmon agrees to maintain, at its sole cost and expense, the QD Product Trademark in the Territory.  Kadmon shall give notice to AbbVie of any decision by Kadmon to cease its maintenance of any such trademark.  If Kadmon elects not to maintain any such trademark, AbbVie may, but is not required to, provide notice to Kadmon that AbbVie desires to maintain such trademark.  If AbbVie elects to continue maintenance, then Kadmon shall assign such trademark to AbbVie and Kadmon shall execute such documents and perform such acts as may be reasonably necessary to so assign such trademark to AbbVie and from and after such assignment such trademark shall cease to be a QD Product Trademark and shall become an AbbVie Product Mark.

 

8.4.2.                  Kadmon shall have the first right to initiate a suit or take other appropriate action that it believes is reasonably required to protect the QD Product Trademark in the Territory against any Third Party who either infringes any such trademark or brings claims or proceedings against either or both of the Parties for infringement of the Third Party’s trademarks in relation to the use of such trademark.  Further, AbbVie shall have a right, in AbbVie’s sole discretion and at AbbVie’s sole expense, to join or otherwise participate in such legal action in the Territory with legal counsel selected by AbbVie; provided, however, that such participation shall not undermine Kadmon’s right to control such legal action.  Kadmon shall notify and keep AbbVie apprised in writing of such action and shall consider and take into account AbbVie’s reasonable interests and requests regarding such action.  Any settlement of such an action that would admit liability on the part of AbbVie, or impose any obligation on AbbVie, or any of its agents or Affiliates shall be subject to AbbVie’s prior written approval, such approval to be granted or withheld by AbbVie in its sole discretion.  If Kadmon decides not to pursue or defend any such action in the Territory, AbbVie may pursue or defend such action, in which case Kadmon shall, and shall cause its Affiliates to, cooperate fully with AbbVie in its efforts to pursue or defend such action and shall agree to be parties in any suit, if requested.  Any settlement of such an action that would admit liability on the part of Kadmon or any of its agents or Affiliates shall be subject to Kadmon’s prior written approval, which approval will not be unreasonably withheld, conditioned or delayed.  Without regard to which Party pursues or defends such action under this Section 8.4.2, all damages (including all reasonable costs and expenses associated with any defense of a claim hereunder) associated with any such action in the Territory shall be the sole responsibility of Kadmon and Kadmon shall promptly reimburse any costs incurred by AbbVie with respect thereto.

 

8.4.3.                  The rights and obligations of the Parties set forth in Sections 8.4.1 and 8.4.2 shall be in effect under this Agreement until such time, if ever, that Kadmon transfers and assigns the QD Product Trademark to AbbVie or its designee pursuant to Section 8.4.1. Upon such assignment, the QD Product Trademark shall be considered an AbbVie Product Mark and Kadmon shall cease to have any rights or interests to the

 

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QD Product Trademark.

 

8.4.4.                  AbbVie shall have sole discretion with respect to the maintenance, enforcement and defense of the AbbVie Product Marks and Kadmon shall have no rights with respect to the AbbVie Product Marks (except those rights which may be granted in the Supply Agreement to permit Kadmon (or Kadmon’s supplier) to apply the AbbVie Product Marks to Product being supplied to AbbVie).

 

8.5.         Existing Third Party Royalties.  Kadmon shall be solely responsible for, and shall otherwise pay promptly when due, all Existing Third Party Royalties; provided, that, if Kadmon fails to pay Existing Third Party Royalties, then Kadmon shall promptly provide AbbVie with copies of any demand Kadmon receives for payment regarding such Existing Third Party Royalties, and AbbVie shall have the right to make such payment on behalf of Kadmon.  In such event, Kadmon shall promptly reimburse AbbVie any documented amounts paid by AbbVie or, at AbbVie’s election, AbbVie may offset such amounts paid by AbbVie against the Royalty Payments to be made by AbbVie to Kadmon.

 

9.              CONFIDENTIAL INFORMATION.

 

9.1.         Confidentiality Obligations.  All Confidential Information disclosed by one Party to the other Party hereunder shall, during the Term, be maintained in confidence by the receiving Party and shall not be disclosed to Third Parties nor used for any purpose except to perform the receiving Party’s obligation or exercise the receiving Party’s rights pursuant to and in accordance with this Agreement, without the prior written consent of the disclosing Party.  Both Parties shall require employees to whom Confidential Information is disclosed to undertake confidentiality and non-use obligations at least as restrictive as the terms of this Article 9.  The foregoing obligations of confidentiality shall not apply to the extent that the subject Confidential Information:

 

a)                                     is known by receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by the receiving Party’s business records;

 

b)                                     is properly in the public domain;

 

c)                                      is subsequently disclosed to the receiving Party by a Third Party who may lawfully do so and is not, to the knowledge of the receiving Party, under an obligation of confidentiality to the disclosing Party;

 

d)                                     is developed by the receiving Party independently of Confidential Information received from the disclosing Party, as documented by the receiving Party’s business records;

 

e)                                      is disclosed to governmental or other regulatory agencies in order to obtain patents or to gain or maintain approval to conduct clinical studies or to market Product (including by AbbVie outside of the Territory), but such disclosure may be only to the extent reasonably necessary to obtain patents or authorizations and all reasonable steps shall be taken in order to

 

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protect the confidentiality of such Confidential Information;

 

f)                                       is necessary to be disclosed to Affiliates, agents, consultants, and/or other Third Parties inside or outside the Territory for the research and development, manufacturing and/or marketing of Product (or for such entities to determine their interest in performing such activities) for sale or use in the Territory in accordance with this Agreement on the condition that such Affiliates and/or Third Parties agree to be bound by the confidentiality and non-use obligations contained in this Agreement; or

 

g)                                      to the extent required by Applicable Law (including in connection with any securities reporting obligations of the United States Securities and Exchange Commission (SEC) or stock market on which the receiving Party is listed) or court order; provided, however, that the recipient promptly provides to the disclosing Party prior written notice of such disclosure and provides reasonable assistance in obtaining an order or other remedy protecting the Confidential Information from public disclosure.

 

9.2.         Injunctive Relief.  In the event of any unauthorized use or disclosure by either Party of any of the other Party’s Confidential Information, the other Party shall be entitled to seek preliminary and permanent injunctive relief, as provided under Applicable Law, to prevent or enjoin any such unauthorized use or disclosure of any of the other Party’s Confidential Information.

 

9.3.         Public Disclosures.  No disclosure of the existence, or the terms, of this Agreement may be made by either Party, and no Party shall use the name, trademark, trade name or logo of the other Party, its Affiliates or their respective employee(s) in any publicity, promotion, press release or disclosure relating to this Agreement or its subject matter, without the prior express written permission of the other Party, except as may be required by Applicable Law. Notwithstanding the foregoing, the Parties have agreed to (a) permit public disclosure of the transactions contemplated by this Agreement strictly in accordance with the agreed upon language set forth on Schedule 9.3 (provided that in no event shall Kadmon issue any press release or similar public statement or disclosure except as provided in Section 9.3(b) and (c)), (b) allow disclosure of this Agreement and the Ancillary Agreements to each Party’s insurers and to existing or potential equity investors and debt providers, provided that such Third Parties are bound by confidentiality restrictions at least as stringent as those contained in Section 9.1, and (c) allow disclosure of the existence of this Agreement to its field employees and vendors and for internal communications.

 

9.4.         Publications.  Kadmon shall not publish any information relating to the Product without the written consent of AbbVie (which consent may be withheld or given in AbbVie’s sole discretion), unless such information has already been publicly disclosed either prior to the Effective Date or after the Effective Date through no fault of Kadmon or otherwise not in violation of this Agreement. AbbVie shall have the right to make such publications as it chooses, in its sole discretion, subject to the review rights of Kadmon as set forth in this Section 9.4.  The Party wishing to make a publication or presentation regarding the Product shall submit to the other Party any publication or presentation

 

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(including in any seminars, symposia or otherwise) of information related directly or indirectly to the Product for review and, in the case of a publication proposed by Kadmon, approval, at least ninety (90) days prior to submission of the publication or presentation.  The reviewing Party shall have the right (a) solely in the case that AbbVie is the reviewing Party, to propose modifications to the publication or presentation for patent reasons, trade secret reasons or business reasons or (b) to request a reasonable delay in publication or presentation in order to protect patentable information.  If the reviewing Party requests modifications to the publication or presentation, the publishing Party shall edit such publication to prevent disclosure of trade secret or proprietary business information prior to submission of the publication or presentation.  If the reviewing Party requests a delay, the publishing Party shall delay submission or presentation for a period of ninety (90) days to enable patent applications protecting each Party’s rights in such information to be filed.  Notwithstanding the foregoing right of Kadmon to review (but not approve) AbbVie publications or presentations regarding the Product, if the planned publication or presentation does not include any Confidential Information of Kadmon, then AbbVie shall have no obligation to submit such publications or presentations to Kadmon for review.

 

10.       WARRANTIES AND LIABILITIES.

 

10.1.                                             Mutual Representations and Warranties.  Kadmon and AbbVie, each for itself and its Affiliates, represent and warrant to the other Party as of the Effective Date:

 

a)                                     the execution, delivery to the other Party and performance by it of this Agreement and its compliance with the terms and provisions of this Agreement do not and will not conflict, in any material respect, with, or result in a breach of, any of the terms or provisions of: (i) any other contractual obligations of, or contractual prohibitions on, such Party, including any settlement agreements; (ii) the provisions of its charter, operating documents or bylaws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which it or any of its property is bound except where such breach or conflict would not materially impact the warranting Party’s ability to meet its obligations hereunder;

 

b)                                     this Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity;

 

c)                                      such Party is duly organized, validly existing and in good standing under the laws of the state or other jurisdiction of incorporation or formation and has full corporate or limited liability company, as the case may be, power and authority to enter into this Agreement and to carry out the provisions hereof;

 

d)                                     such Party is duly authorized, by all requisite corporate action, to execute and deliver this Agreement and the execution, delivery and performance

 

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of this Agreement by such Party does not require any shareholder action or approval, and the person executing this Agreement on behalf of such Party is duly authorized to do so by all requisite corporate or limited liability company, as the case may be, action;

 

e)                                      no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of such Party in connection with the valid execution, delivery and performance of this Agreement; and

 

f)                                       such Party has not been, and no Person currently or formerly working for such Party and involved in the development, manufacture or commercialization of the Product has been:

 

i.                                          debarred, disqualified or excluded by the FDA (or subject to a similar sanction by any regulatory authority outside the Territory);

 

ii.                                       the subject of an FDA debarment, disqualification or exclusion investigation or proceeding (or similar proceeding by any regulatory authority outside the Territory) and

 

iii.                                    each Party shall immediately, within one (1) Business Day, notify the other in the event that it or any Person working for such Party should become debarred, disqualified or excluded or the subject of an FDA debarment, disqualification or exclusion investigation or proceeding.

 

g)                                 Express Warranties.  Neither Party nor any other Person has made any representation or warranty as to the Parties, the Product, or this Agreement, except as expressly set forth in this Agreement (including the related portions of the Disclosure Schedule) or any Ancillary Agreement.

 

10.2.                                             Additional Representations, Warranties and Covenants of Kadmon.  Kadmon hereby represents, warrants and covenants to AbbVie as of the Effective Date:

 

a)                                there is no pending litigation against Kadmon or any Affiliate of Kadmon that (i) alleges that any of Kadmon’s activities relating to Product have violated, or by developing Product would violate, any of the Intellectual Property Rights of any Third Party (nor has it received any written communication threatening such litigation), or (ii) seeks to invalidate any of the Kadmon Patent Rights;

 

b)                                to Kadmon’s Knowledge, the exploitation of the Kadmon IP Rights by AbbVie with respect to Product in the Territory will not infringe any Patent Rights of any Third Party;

 

c)                                 there are no investigations, inquiries, actions or other proceedings pending before, or to Kadmon’s Knowledge threatened by, the FDA or other Government Authority with respect to Product or Ribavirin (including any

 

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threat to withdraw or initiate withdrawal of any regulatory filings related to Product or Ribavirin), and Kadmon has not received written notice threatening any such investigation, inquiry, action or other proceeding, including any FDA Warning Letters or unclosed FDA form 483s with respect to Product.  During the Term, Kadmon shall, within one (1) Business Day, notify AbbVie in writing upon learning of any such actual or threatened investigation, inquiry, action or proceeding;

 

d)                                Neither Kadmon, any of its Affiliates, nor to the knowledge of Kadmon, any director, officer, manager, member, partner, shareholder, or employee of Kadmon or any if its Affiliates, nor any person or entity providing services on Kadmon’s behalf has been:

 

i.                                          party to a corporate integrity agreement, consent order, consent decree, permanent injunction or other settlement agreement with any Governmental Authority or pursuant to any permit, license, authorization, approval, registration, or the like;

 

ii.                                       assessed a civil monetary penalty pursuant to 42 U.S.C. § 1320a-7a;

 

iii.                                    excluded from participation in Federal or state health care programs, including Medicare and Medicaid or otherwise debarred from contracting with Governmental Authorities, including, but not limited to appearance on the HHS/OIG List of Excluded Individuals/Entities and/or the General Services Administration’s List of Parties Excluded from Federal Programs;

 

iv.                                   convicted (as that term is defined in 42 C.F.R. § 1001.2) of any of those offenses described in 42 U.S.C. §§ 1320a-7, 1320a-7b or 18 U.S.C. §§ 669, 1035, 1347, 1518, including, but not limited to, any of the following categories of offenses:

 

A.                                    criminal offenses relating to the delivery of an item or service under any Federal health care program (as that term is defined in 42 U.S.C. § 1320a-7b) or health care benefit program (as that term is defined in 18 U.S.C. § 24(b));

 

B.                                    criminal offenses under Federal or state law relating to patient neglect or abuse in connection with the delivery of a health care item or service;

 

C.                                    criminal offenses under Federal or state law relating to fraud and abuse, theft, embezzlement, false statements to third parties, money laundering,

 

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kickbacks, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service or with respect to any act or omission in a program operated by or financed in whole or in part by any Federal, state, or local governmental agency;

 

D.                                    Federal or state laws relating to the interference with or obstruction of any investigations into any criminal offenses described in clauses (A) through (C) above; or

 

E.                                     criminal offenses under Federal or state law relating to the unlawful manufacturing, distribution, prescription, or dispensing of a controlled substance or listed chemical;

 

v.                                      named as a defendant in a U.S. Attorney complaint made or any other action taken pursuant to the False Claims Act under 31 U.S.C. §§ 3729-3731 or qui tam action brought pursuant to 31 U.S.C. § 3729 et seq., in either case, that is not under seal;

 

vi.                                   to Kadmon’s Knowledge, been investigated for or had action taken or threatened that could lead to one of the above results in clause (iv);

 

vii.                                in the case any of the above actions in clause (iv) should occur or notice of an action or threat of any of the above actions in clause (iv) shall be received in writing by Kadmon or any of its employees, representatives or agents then, as applicable, Kadmon shall provide notice to AbbVie within one (1) Business Day; or

 

viii.                             Kadmon shall not use in any capacity the services of any Person which has had any of the above actions described in clause (iv) taken against them;

 

e)                                 Kadmon holds all necessary Regulatory Approvals required to perform the services and obligations contemplated as part of this Agreement, and no action has been taken against any such Regulatory Approval to suspend, revoke, restrict, or otherwise limit such Regulatory Approval.  Should any action be taken, Kadmon shall provide notice to AbbVie within one (1) Business Day;

 

f)                                  Kadmon is not in violation in any material respect of any, and has conducted its business as it relates to the Product in the Territory in accordance in all material respects with all, Applicable Laws;

 

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g)                                 The Kadmon IP Rights constitute all intellectual property Controlled by Kadmon that is necessary or useful to Commercialize Product in the Territory, and there is not any other intellectual property necessary for such purposes that is not Controlled by Kadmon;

 

h)                                All Patent Rights within the Kadmon Patent Rights are in full force and effect, valid, subsisting and, in the case of issued Patent Rights, enforceable, and inventorship of the Kadmon Patent Rights is properly identified on such Kadmon Patent Rights.  None of the Kadmon Patent Rights is currently involved in any interference, reissue, reexamination, or opposition proceeding in the Territory, and neither Kadmon nor any of its Affiliates has received any written notice from any person, or has Knowledge, of such actual or threatened proceeding that remains active or unresolved; no Third Party has filed, pursued or maintained or threatened in writing to file, pursue or maintain any claim, lawsuit, charge, complaint or other action in the Territory alleging that any Kadmon Patent Rights are invalid or unenforceable;

 

i)                                    To Kadmon’s Knowledge, there is no unauthorized use, infringement or misappropriation of any of the Kadmon IP Rights by any Third Party, including any current or former employee or consultant of Kadmon or its Affiliates;

 

j)                                   The process for manufacturing Product does not infringe or misappropriate any Third Party patent or know-how or breach any confidentiality or non-use obligation owed to a Third Party;

 

k)                                All development activities conducted by or on behalf of Kadmon and its Affiliates relating to Product have been conducted in compliance in all material respects with all Applicable Laws, including all current good manufacturing practices, all current good laboratory practices and all current good clinical practices;

 

l)                                    None of the representations or warranties of Kadmon contained herein or in any Ancillary Agreement and none of the other information or documents furnished to AbbVie by Kadmon or its representatives pursuant to the terms of this Agreement or in any Ancillary Agreement, is false or misleading in any material respect or omits to state a fact herein or therein necessary to make the statements herein or therein not misleading in any material respect.  There is no fact which adversely affects or in the future may adversely affect Product or the Kadmon IP Rights in any material respect which has not been set forth or referred to in this Agreement; and

 

m)                            All tangible information and data provided, or made available (including through any online data rooms), by or on behalf of Kadmon to AbbVie on or before the Effective Date in contemplation of this Agreement (or any other transaction between the Parties) was and is true, accurate and complete in all material respects, and Kadmon has not failed to disclose, or cause to be disclosed, any information or data that would cause the

 

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information and data that has been disclosed to be misleading in any material respect.

 

10.3.                                             Warranty Disclaimer.  EXCEPT AS SET FORTH IN ARTICLE 10 HEREOF, NEITHER PARTY MAKES ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE.

 

10.4.                                             Consequential Damage Disclaimer.  EXCEPT FOR EACH PARTY’S INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 11 OR KADMON’S BREACH OF SECTION 2.3, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY HERETO FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS, LOST SALES OR LOSS OF GOODWILL, EVEN IF THAT PARTY HAS BEEN PLACED ON NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

 

11.       INDEMNIFICATION AND INSURANCE.

 

11.1.                                             By AbbVie.  AbbVie shall indemnify, defend and hold harmless Kadmon, its Affiliates and their respective employees, officers, directors and agents (“Kadmon Indemnitees”) from and against any and all Losses that the Kadmon Indemnitees directly incur, and all Losses that the Kadmon Indemnitees actually pay to one or more Third Parties (whether such claim is asserted as a tort, breach of contract or otherwise), in each instance to the extent resulting from or arising out of (a) any breach by AbbVie of any of its representations, warranties or obligations pursuant to this Agreement, (b) AbbVie’s or its Affiliates’ negligence (or more culpable act or omission) or violation of Applicable Laws or regulations in performing or failing to perform its rights or obligations in connection with this Agreement or (c) the development, manufacture, use or Commercialization of Product by or on behalf of AbbVie and/or its Affiliates in the Territory (except for matters conducted solely by Kadmon under this Agreement or the Ancillary Agreements); provided, however, that AbbVie will not be obligated to indemnify or hold harmless Kadmon Indemnitees from any such Losses to the extent resulting from (i) any breach by Kadmon of any of its representations, warranties or obligations pursuant to this Agreement, (ii) Kadmon’s or its Affiliates’ negligence (or more culpable act or omission) or violation of Applicable Laws or regulations in performing or failing to perform its rights or obligations in connection with this Agreement, (iii) any claim made or brought by any Third Party that the manufacture, use, sale or other Commercialization of the Product infringes, misappropriates or otherwise conflicts with the Patent Rights or any other intellectual property rights of any Third Party, or (iv) any claim made or brought by any Third Party that the execution and delivery of this Agreement or the grant of any of the rights under this Agreement to AbbVie conflicts with or otherwise tortiously interferes with the rights of any other Third Party.

 

11.2.                                             By Kadmon.  Kadmon shall indemnify, defend and hold harmless AbbVie, its Affiliates and their respective employees, officers, directors and agents (“AbbVie Indemnitees”) from and against any and all Losses that the AbbVie Indemnitees directly

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

incur, and all Losses that the AbbVie Indemnitees actually pay to one or more Third Parties (whether such claim is asserted as a tort, breach of contract or otherwise), in each instance to the extent resulting from or arising out of (a) any breach by Kadmon of any of its representations, warranties or obligations pursuant to this Agreement, (b) Kadmon’s or its Affiliates’ negligence (or more culpable act or omission) or violation of Applicable Laws or regulations in performing or failing to perform its rights or obligations in connection with this Agreement, (c) the development, manufacture, use or Commercialization of Product by or on behalf of Kadmon and/or its Affiliates or licensees (except for matters conducted solely by AbbVie under this Agreement or the Ancillary Agreements), (d) any claim made or brought by any Third Party that the manufacture, use, sale or other Commercialization of the Product infringes, misappropriates or otherwise conflicts with the Patent Rights or any other intellectual property rights of any Third Party, or (e) any claim made or brought by any Third Party that the execution and delivery of this Agreement or the grant of any of the rights under this Agreement to AbbVie conflicts with or otherwise tortiously interferes with the rights of any other Third Party; provided, however, that Kadmon will not be obligated to indemnify or hold harmless AbbVie Indemnitees from any such Losses to the extent resulting from (i) any breach by AbbVie of any of its representations, warranties or obligations pursuant to this Agreement or (ii) AbbVie’s or its Affiliates’ negligence in performing its obligations under this Agreement (or more culpable act or omission) or violation of Applicable Laws or regulations in performing or failing to perform its rights or obligations in connection with this Agreement.

 

11.3.                                             Claims for Indemnification.  A Party entitled to indemnification under this Article 11 (an “Indemnified Party”) shall give prompt written notification, with sufficient detail to allow the receiving Party to make an assessment thereof, to the Party from whom indemnification is sought (the “Indemnifying Party”) of the commencement of any action, suit or proceeding relating to a Third Party claim for which indemnification may be sought or, if earlier, upon the assertion of any such claim by a Third Party (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a Third Party claim as provided in this Section 10.3 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually damaged as a result of such failure to give notice).  Except with respect to indemnification claims pursuant to Section 11.2(d), in which case AbbVie shall have the first right to assume the defense of such claim in accordance with Section 8.3.2, within fourteen (14) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such action, suit, proceeding or claim with counsel reasonably satisfactory to the Indemnified Party.  If the Indemnifying Party does not assume control of such defense, the Indemnified Party shall control such defense and, without limiting the Indemnifying Party’s indemnification obligations, the Indemnifying Party shall reimburse the Indemnified Party for all reasonable and documented costs, including attorney fees, incurred by the Indemnified Party in defending itself within thirty (30) days after receipt of any invoice therefore from the Indemnified Party.  The Party not controlling such defense may monitor and participate in the controlling Party’s defense at its own expense; provided that, if the Indemnifying Party assumes control of such defense and the Indemnified Party in good faith concludes, based on advice from counsel, that the

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

Indemnifying Party and the Indemnified Party have conflicting interests with respect to such action, suit, proceeding or claim, the Indemnifying Party shall be responsible for the reasonable fees and expenses of separate counsel to the Indemnified Party in connection therewith.  The Party controlling such defense shall keep the other Party advised of the status of such action, suit, proceeding or claim and the defense thereof and shall consider recommendations made by the other Party with respect thereto.  The Party not controlling such defense shall cooperate with the controlling Party and shall make available to the controlling Party all witnesses, information and materials in such Party’s possession or under such Party’s control relating thereto as are reasonably required by the controlling Party, subject to appropriate provisions for the protection of confidentiality.  The Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, delayed or conditioned.  The Indemnifying Party shall not agree to any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that is not solely for monetary damages, that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto, that imposes any liability or obligation on the Indemnified Party, or that acknowledges fault by the Indemnified Party without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld.

 

11.4.                                             Limitation.  No claim may be made by any AbbVie Indemnitee for indemnification pursuant to Section 11.2 or 8.3.2 unless and until the aggregate amount of Losses for which all AbbVie Indemnitees seek to be indemnified exceeds *** (the “Deductible”), in which case Kadmon shall be liable only for such Losses in excess of the Deductible and, in any event, all AbbVie Indemnitees shall first seek recovery from the Escrow Amount before seeking recovery directly from Kadmon with respect to any indemnification claim pursuant to Sections 11.2 or 8.3.2 hereof.

 

11.5.                                             Insurance.

 

11.5.1.           Kadmon and its Affiliates shall, at their sole cost and expense, obtain and maintain in full force and effect commercial general liability insurance, which complies with all Applicable Laws of the Territory, and provides for minimum loss coverage at least *** and product liability insurance, which complies with all Applicable Laws of the Territory, and provides for minimum loss coverage at least ***.  Kadmon hereby specifically acknowledges and agrees that this Article shall not be construed to create any limit on Kadmon’s liability hereunder and/or indemnification obligation under Section 11.2 hereof. As soon as practicable following the Effective Date and following the receipt from AbbVie of information required by Kadmon’s insurer for such purpose, Kadmon shall cause AbbVie to be named as additional insured under Kadmon’s commercial general liability insurance policy. The Parties agree that for the purposes of this Section 11.5 Kadmon shall be permitted to provide this Agreement and any Ancillary Agreement to its insurer.

 

11.5.2.           Any Losses as to which indemnification provided for in Sections 11.1 and 11.2 may apply shall be determined net of any cash recovery actually received by an Indemnified Party with respect to insurance specifically with respect to the specific

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

matter for which indemnification is sought, less any costs actually incurred in obtaining such recovery (including premium adjustments and similar charges).

 

11.5.3.           AbbVie and its Affiliates shall, at their sole cost and expense, obtain no later than the date of first commercial sale of Product in the Territory by or on behalf of AbbVie, and shall maintain in full force and effect commercial general liability insurance, which shall provide product liability coverage which complies with all Applicable Laws of the Territory, and provides for minimum loss coverage at least equal to the insurance coverage maintained by AbbVie with respect to AbbVie’s and its Affiliates’ proprietary pharmaceutical products. AbbVie hereby specifically acknowledges and agrees that this Article shall not be construed to create any limit on AbbVie’s liability hereunder and/or indemnification obligation under Section 11.1 hereof.  Kadmon acknowledges and agrees that AbbVie may satisfy its obligations under this Section 11.5.3 through a self-insurance program.

 

11.6.                                             Escrow Instructions.  In the event that any claim for indemnification under this Agreement is made against the Escrow Amount that is subject to an alternative dispute resolution proceeding pursuant to Schedule 14.6, then in the event a final order is rendered pursuant to such dispute procedure relating to the liability of either Party, the Parties shall deliver to the Escrow Agent a joint written instruction authorizing the release of the applicable portion of the Escrow Amount in accordance with such final order.

 

12.       TERM AND TERMINATION.

 

12.1.                                             Term.  This Agreement shall enter into effect on the Effective Date hereof, and unless terminated earlier in accordance with the terms of this Agreement, shall remain in full force and effect in perpetuity with respect to the license grants (the “Term”).

 

12.2.                                             Termination by AbbVie or the Parties Jointly for Convenience.  At any time during the Term, (a) AbbVie may, at its convenience, terminate this Agreement upon *** days’ prior written notice to Kadmon, and (b) the Parties may, by mutual written agreement, terminate this Agreement immediately.

 

12.3.                                             Termination Related to Bankruptcy or Similar Action.  Kadmon or AbbVie, as the case may be, shall have the right to terminate this Agreement, immediately upon giving written notice of termination to the other Party, in the event that the other Party files a voluntary petition, or suffers the filing of a substantiated involuntary petition under the bankruptcy provisions of Applicable Law which is not dismissed within ninety (90) days of its filing, is declared insolvent, undergoes voluntary or involuntary dissolution, makes an assignment for the benefit of creditors, fails or is unable to pay its debts as they come due, or suffers the appointment of a receiver or trustee over all, or substantially all, of its assets or properties.

 

12.4.                                             Termination for Material Breach.  In the event that either Party to this Agreement (the “breaching Party”) commits a material breach or default of any of its obligations hereunder, the other Party hereto (the “non-breaching Party”) may give the breaching Party written notice of such breach or default.  In the event that the breaching Party fails to cure such breach or default within ninety (90) days after the date of the

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

non-breaching Party’s notice thereof, or if such breach or default cannot be cured within ninety (90) days after the date of the non-breaching Party’s notice thereof, then the non-breaching Party may terminate this Agreement immediately; provided, that, notwithstanding the foregoing, Kadmon’s right to terminate this Agreement under this Section 12.4 shall be a remedy of last resort and may be invoked only in the case where the breach cannot be reasonably remedied by the payment of monetary damages or other remedy under Applicable Law.  Termination under this Section 12.4 shall only become effective after resolution of any dispute for which termination is being sought.

 

13.       CONSEQUENCES OF TERMINATION.

 

13.1.                                             Termination by AbbVie or the Parties Jointly Under Section 12.2 or by a Party Under Section 12.3 or 12.4.  Upon the effective date of termination of this Agreement following termination by AbbVie or the Parties jointly under Section 12.2 or by a Party under Section 12.3 or 12.4:

 

13.1.1.           all licenses and all rights granted to AbbVie under this Agreement shall terminate;

 

13.1.2.           notwithstanding Section 13.1.1, AbbVie and its Affiliates shall be entitled, during the eighteen (18) month period following such effective date of termination, to sell any inventory of Product which remains on hand, or in the manufacture and supply pipeline, as of the effective date of the termination, in all cases in accordance with the terms and conditions set forth in this Agreement which shall be deemed to survive for such eighteen (18) month period for the purpose of this Section 13.1.2.  In the event that this Agreement is terminated by AbbVie under Sections 12.3 or 12.4 and any inventory remains following such eighteen (18) month period, then Kadmon shall purchase such inventory at AbbVie’s cost of goods, plus ***.

 

13.2.                                             Discontinuation of Use; Return of Confidential Information.  Except for rights granted pursuant to this Article 13, upon expiration or termination of this Agreement, each Party will discontinue use of the other Party’s Confidential Information and will return to the other Party (unless otherwise mutually agreed in writing by the Parties and except for one copy for archival purposes only) within thirty (30) days after the effective date of expiration or termination all physical embodiments of any of the other Party’s Confidential Information, that were provided by such other Party under this Agreement.

 

13.3.                                             Bankruptcy.

 

13.3.1.           If this Agreement is terminated by either Party pursuant to Section 12.3 due to the rejection of this Agreement by or on behalf of the other Party or such other Party’s “affiliate” (as defined pursuant to the Code) (the “Bankrupt Party”) under Article 365 of the United States Bankruptcy Code (the “Code”), all licenses and rights to licenses granted under or pursuant to this Agreement by the Bankrupt Party to the other Party (the “Licensing Party”) are, and shall otherwise be deemed to be, for purposes of Article 365(n) of the Code, licenses of rights to “intellectual property” as defined under Article 101(35A) of the Code.  The Parties agree that the Licensing Party shall retain and may fully exercise all of its rights and elections under the Code, and that upon commencement of a bankruptcy proceeding by or against the

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

Bankrupt Party under the Code, the Licensing Party shall be entitled to a complete duplicate of or complete access to (as the Licensing Party deems appropriate), any such intellectual property and all embodiments of such intellectual property if not already in the Licensing Party’s possession. Such intellectual property and all embodiments thereof shall be promptly delivered to the Licensing Party (a) upon any such commencement of a bankruptcy proceeding upon written request therefor by the Licensing Party, unless the Bankrupt 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 the Bankrupt Party upon written request therefore by the Licensing Party.

 

13.3.2.           The Parties further agree that in the event the Bankrupt Party seeks to sell, transfer or otherwise convey the Kadmon IP Rights or Regulatory Approvals, including the ANDA, pursuant to Section 363 of the Code, such sale, transfer or conveyance must be made subject to this Agreement and all licenses and rights to licenses granted under and pursuant to this Agreement, and that no other consideration would suffice to adequately protect the Licensing Party’s rights and interests under this Agreement so as to permit such sale, transfer or conveyance free and clear of the Licensing Party’s rights and interests under Section 363(f) of the Code.

 

13.3.3.           The foregoing provisions of this Section 13.3 are without prejudice to any rights the Licensing Party may have arising under the Code or Applicable Law.

 

13.4.                                             Survival.  Except as otherwise provided herein, in the event of any expiration or termination of this Agreement, (a) all financial obligations hereunder owed as of the effective date of such expiration or termination, including such obligations that have accrued, but have not been invoiced, as of such effective date, shall remain in effect, (b) all rights and obligations that have accrued under this Agreement, including in respect of breaches of the provisions of this Agreement, prior to such expiration or termination, shall survive, and (c) Articles 9, 11 and 14 and Sections 3.7, 8.3, 13.1, 13.2, and, if applicable, 13.3 shall survive. In the event of Kadmon’s material, uncured breach of this Agreement under Section 12.4, notwithstanding any other provision of this Agreement to the contrary, AbbVie may either terminate this Agreement (in which case all of AbbVie’s licenses granted under this Agreement and all royalty obligations under Section 6.3 shall terminate) or continue this Agreement (including AbbVie’s licenses and royalty obligations) and pursue damages.

 

14.       GENERAL PROVISIONS.

 

14.1.                                             Assignment.  Neither Party may assign or transfer its rights or delegate its obligations under this Agreement, in whole or in part, without the prior written consent of the other Party, except that a Party may make such an assignment or delegation without the other Party’s consent to (a) Affiliates, provided that such assignment does not relieve such assigning Party from its obligations hereunder or (b) a successor to substantially all of the business of such Party to which this Agreement pertains, whether in a merger, sale of stock, sale of assets, spin-off or other transaction.  Any permitted successor or assignee of rights and/or obligations hereunder shall, in writing to the other Party, expressly assume such rights and/or obligations.  Any attempted assignment or

 

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delegation by either Party in violation of the terms of this Section 14.1 shall be null, void and of no legal effect.

 

14.2.                                             Relationship of the Parties.  In the exercise of their respective rights, and the performance of their respective obligations, under this Agreement, the Parties are, and shall remain, independent contractors.  Nothing in this Agreement shall be construed to constitute the Parties as partners, joint venturers, or participants in a joint enterprise or undertaking, or to constitute either of the Parties as the agent of the other Party for any purpose whatsoever.  Neither Party shall bind, or attempt to bind, the other Party hereto to any contract or the performance of any other obligation, or represent to any Third Party that it is authorized to enter into any contract or binding obligation on behalf of the other Party hereto.

 

14.3.                                             Force Majeure.  Neither Party shall be liable for any failure to perform, or any delay in the performance of, any of its obligations under this Agreement to the extent, but only to the extent, that such Party’s performance is prevented by the occurrence of an event of force majeure.  For purposes of this Section 14.3, an event of force majeure shall mean and include, war, civil war, insurrection, rebellion, civil unrest, fire, flood, earthquake, adverse weather conditions, strike, lockout, labor unrest, acts of the public enemy, acts of government authorities, and, in general, any other cause or condition beyond the reasonable control of the Party whose performance is affected thereby.  In the event that a Party’s performance is affected by the occurrence of any event of force majeure, that Party shall furnish immediate written notice thereof to the other Party hereto.

 

14.4.                                             Notices.  Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed given only if delivered by hand or sent by facsimile transmission (with transmission confirmed) or by internationally recognized overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in this Section 14.4 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 14.4.  Such Notice shall be deemed to have been given as of the date delivered by hand or on the second Business Day (at the place of delivery) after deposit with an internationally recognized overnight delivery service.

 


	
To:
    	
Kadmon
    	
Kadmon Pharmaceuticals, LLC
    
	
 
    	
 
    	
450 East 29th Street
    
	
 
    	
 
    	
New York, NY 10016
    
	
 
    	
 
    	
Attn: Steven N. Gordon, Executive Vice President and   General Counsel
    
	
 
    	
 
    	
Facsimile: (212) 355-7855
    
	
 
    	
 
    	
 
    
	
 
    	
with a copy to:
    	
DLA Piper LLP (US)
    
	
 
    	
 
    	
1251 Avenue of the Americas
    
	
 
    	
 
    	
New York, New York 10020-1104
    
	
 
    	
 
    	
Attn: Howard S. Schwartz, Esq.
    
	
 
    	
 
    	
Facsimile: (410) 580-3251
    




 

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To:
    	
AbbVie
    	
AbbVie Inc.
    
	
 
    	
 
    	
1 North Waukegan Road
    
	
 
    	
 
    	
North Chicago, Illinois 60064
    
	
 
    	
 
    	
Attn:  Executive Vice President, Global   Commercial Operations
    
	
 
    	
 
    	
Facsimile:  (847) 935-3294
    
	
 
    	
 
    	
 
    
	
 
    	
with a copy to:
    	
AbbVie Inc.
    
	
 
    	
 
    	
1 North Waukegan Road
    
	
 
    	
 
    	
North Chicago, Illinois 60064
    
	
 
    	
 
    	
Attn:  Executive Vice President, Business   Development, External Affairs and General Counsel
    
	
 
    	
 
    	
Facsimile:  (847) 935-3294
    




 

14.5.                                             Governing Law.  This Agreement shall be governed by, and interpreted in accordance with the laws of the State of New York, without reference to conflicts of laws principles; provided, however, that the validity or enforcement of Intellectual Property Rights hereunder shall be determined under the laws of that jurisdiction in which those Intellectual Property Rights are registered or for which an application for registration has been filed.  The United Nations Conventions on Contracts for the International Sale of Goods shall not be applicable to this Agreement.

 

14.6.                                             Dispute Resolution.  If a dispute arises between the Parties, the Parties shall follow the alternative dispute resolution provisions provided for in Schedule 14.6.

 

14.7.                                             Severability. To the fullest extent permitted by Applicable Law, the Parties waive any provision of law that would render any provision in this Agreement invalid, illegal or unenforceable in any respect.  If any provision of this Agreement is held to be invalid, illegal or unenforceable, in any respect, then such provision will be given no effect by the Parties and shall not form part of this Agreement.  To the fullest extent permitted by Applicable Law and if the rights or obligations of any Party will not be materially and adversely affected, all other provisions of this Agreement shall remain in full force and effect and the Parties will use their best efforts to negotiate a provision in replacement of the provision held invalid, illegal or unenforceable that is consistent with Applicable Law and achieves, as nearly as possible, the original intention of the Parties.

 

14.8.                                             Interpretation.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. The subject headings of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any provision of this Agreement.

 

14.9.                                             Entire Agreement and Amendments.  This Agreement, together with all Schedules attached hereto, and the Ancillary Agreements, constitute the entire agreement between the Parties, and supersedes all prior agreements, understandings and communications between the Parties, with respect to the subject matter hereof and

 

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thereof. No modification or amendment of this Agreement shall be binding upon the Parties unless in writing and executed by the duly authorized representative of each of the Parties.

 

14.10.                                      Waivers.  The failure by either Party hereto to assert any of its rights hereunder, including the right to terminate this Agreement due to a breach or default by the other Party hereto, shall not be deemed to constitute a waiver by that Party of its right thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

14.11.                                      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.

 

14.12.                                      Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall be deemed to constitute one and the same instrument.  An executed signature page of this Agreement delivered by facsimile or PDF transmission shall be as effective as an original executed signature page.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, duly authorized representatives of the Parties have duly executed this Agreement to be effective as of the Effective Date.

 

 

	
Kadmon   Pharmaceuticals, LLC
    	
 
    	
AbbVie   Inc.
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Steven N. Gordon
    	
 
    	
By:   
    	
/s/   William Chase
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:   
    	
Steven   N. Gordon
    	
 
    	
Name:
    	
William   Chase
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Executive   Vice President and
   General Counsel
    	
 
    	
Title:
    	
Authorized   Officer
    


 

Signature Page to License Agreement

 









 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK ***, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

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