Document:

2012-12-31_Exhibit 10.42-Form of Change in Control Agreement-Lorenzen

Exhibit 10.42
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into this            day of December, 2012 by and between AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY, an Iowa corporation (the "Company"), and                        (the "Executive").  The Company's Board of Directors ( the "Board") has determined that it is in the best interests of the Company and its stockholders to ensure that the Company and its Affiliates will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a termination of the Executive's employment in certain circumstances, including following a Change in Control as defined herein.  The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened termination of the Executive's employment in such circumstances and to provide the Executive with compensation and benefits arrangements upon such a termination which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations who may seek to employ the Executive.  In order to accomplish these objectives, the Board has caused the Company to enter into this Agreement with the Executive.
It is hereby agreed as follows: 
1.Definitions.  For purposes of this Agreement, the following terms will have the following meanings unless otherwise expressly provided in this Agreement: 
A."Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
B."Base Amount" shall have the meaning set forth in Section 280G(b)(3) of the Code.
C."Beneficial Owner" shall have the meaning set forth in Rule 13d-3 promulgated under Section 13 of the Exchange Act.
D."Beneficiary" means any individual, trust or other entity named by the Executive to receive the Severance Payments in the event of the death of the Executive during the Continuation Period.  Executive may designate a Beneficiary to receive such Severance Payments by completing a form provided by the Company and delivering it to the Secretary of the Company.  Executive may change his or her designated Beneficiary at any time (without the consent of any prior Beneficiary) by completing and delivering to the Secretary of the Company a new beneficiary designation form.  If a Beneficiary has not been designated by the Executive, or if no designated Beneficiary survives the Executive, then the Severance Payments if any, will be paid to the Executive's estate, which shall be deemed to be the Executive's Beneficiary. 
E."Board" means the Board of Directors of the Company. 
F."Cause" means: 
(i)the Executive's willful and continued failure to substantially perform the Executive's duties with the Company or its Affiliates (other than any such failure resulting from the Executive's incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board which specifically identifies the manner in which the Board believes that the Executive has not substantially performed his or her duties; 

(ii)the final conviction of the Executive of, or an entering of a guilty plea or a plea of no contest by the Executive to, a felony; or 
(iii)the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. 
For purposes of this definition, no act or failure to act on the part of the Executive shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without a reasonable belief that the action or omission was in the best interests of the Company or its Affiliates.  Any act, or failure to act, based on authority given pursuant to a resolution duly adopted by the Board will be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company and its Affiliates. 
G."Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: 
(i)any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 35% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described paragraph (iii) below;
(ii)the following individuals cease for any reason to constitute a majority of the number of directors then serving:  individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended;
(iii)there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (a) a merger or consolidation immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof or (b) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 35% or more of the combined voting power of the Company's then outstanding securities; or
(iv)the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or any parent thereof.

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
H."Code" means the Internal Revenue Code of 1986, as amended from time to time.
I."Date of Termination" means the date specified in a Notice of Termination pursuant to paragraph 3 hereof, or the Executive's last date as an active employee of the Company and its Affiliates before a termination of employment due to death, Disability or other reason, as the case may be. 
J."Disability" means the Executive's total and permanent disability as defined under the terms of the Company's long-term disability plan in effect on the Date of Termination. 
K."Effective Period" means the 24-month period following any Change in Control. 
L."Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time.
M."Excise Tax" shall mean any excise tax imposed under Section 4999 of the Code.
N."Good Reason" means, unless the Executive has consented in writing thereto, the occurrence of any of the following: 
(i)the assignment to the Executive of any duties materially inconsistent with the Executive's position, including any change in status, authority, duties or responsibilities or any other action which, in either such case, results in a material diminution in such status, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or the Executive's employer promptly after receipt of notice thereof given by the Executive; 
(ii)a reduction by the Company or the Executive's employer in the Executive's base salary; 
(iii)the relocation of the Executive's office to a location more than fifty (50) miles outside West Des Moines, Iowa; 
(iv)unless a plan providing a substantially similar compensation or benefit is substituted, (a) the failure by the Company or any of its Affiliates to continue in effect any fringe benefit or compensation plan, retirement plan, life insurance plan, health and accident plan or disability plan in which the Executive is participating prior to the Change in Control which adversely affects the Executive's total compensation in a material manner, or (b) the taking of any action by the Company or any of its Affiliates which would materially adversely affect the Executive's participation in or materially reduce or deprive him of his benefits under, such plans; or 
(v)the failure of the Company to obtain the assumption in writing of the Company's obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company within 15 days after such succession. 

The Executive's right to terminate the Executive's employment for Good Reason shall not be affected by the Executive's incapacity due to physical or mental illness.  In order for Good Reason to exist hereunder, the Executive must provide notice to the Company of the existence of the condition or circumstance described above within 90 days of the initial existence of the condition or circumstance (or, if later, within 90 days of the Executive's becoming aware of such condition or circumstance), and the Company must have failed to cure such condition within 30 days of the receipt of such notice, and the Executive must terminate employment within ten (10) days after the expiration of such cure period.  Subject to the preceding sentence, the Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.
O."Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their owner-ship of stock of the Company.
P."Severance Payments" means the severance payments and benefits listed in paragraph 4(A) of this Agreement.
2.Term.  The term ("Term") of this Agreement shall commence on the date first above written (the "Commencement Date") and, unless terminated earlier as provided hereunder, shall continue through December 31, 2014; provided, however, that commencing on January 1, 2014 and each January 1st thereafter, the Term shall automatically be extended for one additional year, unless at least 90 days prior to such January 1st date, the Company shall have given notice that it does not wish to extend this Agreement.  Upon the occurrence of a Change in Control during the Term, including any extensions thereof, the Term shall automatically be extended until the end of the Effective Period and may not be terminated by the Company during such time. 
3.Notice of Termination.
A.Any termination of the Executive's employment by the Company, or by any Affiliate of the Company by which the Executive is employed, for Cause, or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with paragraph 10 of this Agreement.  For purposes of this Agreement, a "Notice of Termination" for termination of employment for Cause or for Good Reason means a written notice which: (i) is given at least thirty (30) days prior to the Date of Termination; (ii) indicates the specific termination provision in this Agreement relied upon; (iii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated; (iv) specifies the employment termination date; and (v) allows the recipient of the Notice of Termination at least thirty (30) days to cure the act or omission relied upon in the Notice of Termination.  The failure to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause will not waive any right of the party giving the Notice of Termination hereunder or preclude such party from asserting such fact or circumstance in enforcing its rights hereunder.
B.A termination of employment of the Executive will not be deemed to be for Cause unless and until there has been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the 

Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive has engaged in the conduct described in paragraph 1(F) hereof, and specifying the particulars of such conduct in reasonable detail.
4.Obligations of the Company Upon Termination of Executive's Employment Following a Change in Control. 
A.If, (i) during the Effective Period, the Company terminates the Executive's employment other than for Cause or the Executive terminates employment with the Company for Good Reason, or (ii) either (1) the Executive's employment is terminated by the Company other than for Cause prior to a Change in Control (but, only if a Change in Control actually occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control, (2) the Executive terminates his employment for Good Reason prior to a Change in Control (but, only if a Change in Control actually occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person or (3) the Executive's employment is terminated by the Company other than for Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control (but, only if a Change in Control actually occurs), then the Company will provide the Executive with the payments and benefits specified below:  
(a)a cash lump sum in the amount of the Executive's annual base salary through the Date of Termination to the extent not theretofore paid; 
(b)a cash lump sum in the amount of the annual bonus that the Executive would receive for the year in which the Date of Termination occurs, pro-rated by multiplying such bonus amount by the fraction obtained by dividing the number of days in the year through the Date of Termination by 365, based on actual achievement of performance and payable at the same time bonuses are paid to other executives at the Company; 
(c)a cash lump sum in the amount equal to the product of two times the Executive's annual base salary at the greater of (A) the rate in effect at the time Notice of Termination is given or (B) the rate in effect immediately preceding the Change in Control, payable within five days following the Date of Termination;
(d)a cash lump sum amount equal to the product of two times the greater of (A) the target annual cash bonus in effect for the Executive at the time Notice of Termination is given or (B) the target annual cash bonus in effect immediately preceding the Change in Control, payable within five days following the Date of Termination; and
(e)the continuation of the provision of health insurance, dental insurance and life insurance benefits for a period of two years following the Date of Termination (the "Continuation Period") to the Executive and the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies of the Company as in effect and applicable generally to other peer executives and their families during the 90-day period immediately preceding the Effective Period or on the Date of Termination, at the election of the Executive; provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein will be secondary to those provided under such other plan during such applicable period of eligibility.

B.Any and all amounts paid under this Agreement in the amount of or otherwise in respect of the Executive's annual base salary and bonuses, whether or not deferred under a deferred compensation plan or program, are intended to be and will be treated as compensation under any and all retirement plans sponsored or maintained by the Company or by any Affiliate controlled by the Company; provided, however, to the extent the treatment of such amounts as compensation under a retirement plan could adversely affect such plan's qualification status, the amount of the benefits under such plan attributable to such potentially disqualifying compensation shall be paid by the Company and not pursuant to such plan. 
C.If the Executive's employment is terminated by reason of the Executive's death or Disability during the Term, this Agreement shall terminate automatically on the date of death or, in the event of Disability, on the Date of Termination.  In the event of Executive's death or Disability during the Continuation Period, the Severance Payments will be paid or provided to the Executive, the Executive's Beneficiary and/or the Executive's dependents under the applicable plans for the remainder of the Continuation Period.  If the Executive's employment is terminated by the Company for Cause during the Term, or if the Executive terminates his employment by the Company other than for Good Reason, this Agreement shall terminate on the Date of Termination. 
5.Mitigation of Damages.  The Executive will not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise.  Except as otherwise specifically provided in this Agreement, the amount of any payment provided for under this Agreement will not be reduced by any compensation earned by the Executive as the result of self-employment or employment by another employer or otherwise. 
6.Stock Options; Stock Appreciation Rights; Stock Bonus; Restricted Stock.  The foregoing benefits are intended to be in addition to the value of any options to acquire common stock of the Company, any equity-based awards of the Company and any other incentive or similar award or plan heretofore or hereafter adopted by the Company. 
7.Tax Effect.
A.Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a Change in Control or the termination of the Executive's employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the "Total Payments") would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, arrangement or agreement, the cash Severance Payments shall first be reduced, and the noncash Severance Payments shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income and employment taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income and employment taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments); provided, however, that, to the extent permitted by Section 409A of the Code, the Executive may elect to have the 

noncash Severance Payments reduced (or eliminated) prior to any reduction of the cash Severance Payments.
B.For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a "payment" within the meaning of Section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of Tax Counsel (as defined below) does not constitute a "parachute payment" within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Tax Counsel in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.  For purposes of this Agreement, "Tax Counsel" will mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm with expertise in the area of executive compensation tax law, who will be selected by the Company and will be reasonably acceptable to the Executive, and whose fees and disbursements will be paid by the Company. 
C.At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).  If the Executive objects to the Company's calculations, the Company shall pay to the Executive such portion of the Severance Payments (up to 100% thereof) as the Executive determines is necessary to result in the proper application of subparagraph A of this paragraph 7.
D.Notwithstanding anything in this Agreement to the contrary, the amount of the Severance Payments, and the limitation on such payments set forth in this paragraph 7, cannot be finally determined on or before the scheduled payment date, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Executive of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined.  In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at 120% of the rate provided in Section 1274(b)(2)(B) of the Code).
8.Confidential Information; Non-solicitation.  During the Term and any Continuation Period, the Executive covenants and agrees as follows: (a) to hold in a fiduciary capacity for the benefit of the Company and its Affiliates all secret, proprietary or confidential material, knowledge, data or any other information relating to the Company or any of its Affiliates and their respective businesses ("Confidential Information"), which has been obtained by the Executive during the Executive's employment by the Company or any of its Affiliates and that has not been, is not now and hereafter does not become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement), and will not, without the prior written consent of the Company or as may 

otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it; the Executive further agrees to return to the Company any and all records and documents (and all copies thereof) and all other property belonging to the Company or relating to the Company, its Affiliates or their businesses, upon termination of Executive's employment with the Company and its Affiliates; and (b) not to solicit or entice any other employee of the Company or its Affiliates to leave the Company or its Affiliates to go to work for any other business or organization which is in direct or indirect competition with the Company or any of its Affiliates, nor request or advise a customer or client of the Company or its Affiliates to curtail or cancel such customer's business relationship with the Company or its Affiliates. 
9.Rights and Remedies Upon Executive's Breach. 
A.The Executive hereby acknowledges and agrees that the provisions contained in paragraph 8 of this Agreement (the "Restrictive Covenants") are reasonable and valid in duration and in all other respects.  If any court of, or arbitrator with, competent jurisdiction determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants will not thereby be affected and will be given full effect without regard to the invalid portions. 
B.If the Executive breaches, or threatens to commit a breach of, any of the Restrictive Covenants, the Company will have the following rights and remedies, each of which rights and remedies will be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity: 
(i)Specific Performance.  The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction in aid of arbitration, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. 
(ii)Accounting.  The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of any action constituting a breach of the Restrictive Covenants. 
(iii)Cessation of Severance Payments.  The right and remedy to cease any further Severance Payments from and after the commencement of such breach by the Executive. 
C.The provisions of this subparagraph 9(C) shall apply to any dispute relating to this Agreement and not governed by subparagraph 9(B).  All such disputes shall be resolved exclusively by arbitration administered by JAMS (or its successor) under its Employment Arbitration Rules and Procedures then in effect (the "JAMS Rules").  Notwithstanding the foregoing, the Company and the Executive shall have the right to (i) seek a restraining order or other injunctive or equitable relief or order in aid of arbitration or to compel arbitration, from a court of competent jurisdiction, or (ii) interim injunctive or equitable relief from the arbitrator pursuant to the JAMS Rules, in each case to prevent any violation of this Agreement.  The Company and the Executive must notify the other party in writing of a request to arbitrate any such disputes within the same statute of limitations period applicable to such disputes.  Any arbitration proceeding brought under this Agreement shall be conducted before one arbitrator in Des Moines, Iowa or such other city to which the parties mutually agree.  The arbitrator shall be selected in accordance with the JAMS Rules, provided that the arbitrator shall be an attorney with significant experience in employment matters.  Subject to paragraph 9(D) below, each party to any dispute shall pay its own expenses of the arbitration.  The arbitrator will be empowered to award either party any 

remedy at law or in equity that the party would otherwise have been entitled to had the matter been litigated in court, including, but not limited to, general, special and punitive damages, injunctive relief, costs and attorney fees; provided, however, that the authority to award any remedy is subject to whatever limitations, if any, exist in the applicable law on such remedies.  The arbitrator shall issue a decision or award in writing, stating the essential findings of fact and conclusions of law, and the arbitrators shall be required to follow the laws of the State of Iowa.  Any judgment on or enforcement of any award, including an award providing for interim or permanent injunctive relief, rendered by the arbitrator may be entered, enforced or appealed in any court having jurisdiction thereof.  Any arbitration proceedings, decision or award rendered hereunder, and the validity, effect and interpretation of this arbitration provision, shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq.  It is part of the essence of this Agreement that any such disputes hereunder shall be resolved expeditiously and as confidentially as possible.  Accordingly, the Company and the Executive agree that all proceedings in any arbitration shall be conducted under seal and kept strictly confidential.  In that regard, no party shall use, disclose or permit the disclosure of any information, evidence or documents produced by any other party in the arbitration proceedings or about the existence, contents or results of the proceedings except as necessary and appropriate for the preparation and conduct of the arbitration proceedings, or as may be required by any legal process, or as required in an action in aid of arbitration or for enforcement of or appeal from an arbitral award.  Before making any disclosure permitted by the preceding sentence, the party intending to make such disclosure shall give the other party reasonable written notice of the intended disclosure and afford such other party a reasonable opportunity to protect its interests. 
D.The Company shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Executive's employment, in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder.  Such payments shall be made within five (5) business days after delivery of the Executive's written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require.
10.Notices.  Any notice provided for in this Agreement will be given in writing and will be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid.  Any such notice will be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, or, if mailed, on the date of actual receipt thereof.  Notices will be properly addressed to the parties at their respective addresses set forth below or to such other address as either party may later specify by notice to the other in accordance with the provisions of this paragraph: 
If to the Company: 

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
6000 Westown Parkway
West Des Moines, IA 50266
Attention: Chairman of the Board 

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
155 N. Wacker Drive
Chicago, IL 60606
Attention: Shilpi Gupta

If to the Executive: 

_______________________________

_______________________________

_______________________________
                                                 
11.Entire Agreement.  This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto, including, without limitation, any and all prior employment or severance agreements and related amendments entered into between the Company and the Executive; provided, however, that this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive's employment with the Company only in the event that the Executive's employment with the Company is terminated on or following a Change in Control, by the Company other than for Cause or by the Executive for Good Reason.  Furthermore, the Severance Payments are separate and apart from and, to the extent they are actually paid, will be in lieu of any payment under any policy of the Company or any of its Affiliates regarding severance payments generally. 
12.Waivers and Amendments.  This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties hereto or, in the case of a waiver, by the party waiving compliance.  No delay on the part of any party in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. 
13.Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the state of Iowa (without giving effect to the choice of law provisions thereof), where the employment of the Executive will be deemed, in part, to be performed, and enforcement of this Agreement or any action taken or held with respect to this Agreement will be taken in the courts of appropriate jurisdiction in Iowa. 
14.Assignment.  This Agreement, and any rights and obligations hereunder, may not be assigned by the Executive and may be assigned by the Company only to any successor in interest, whether by merger, consolidation, acquisition or the like, or to purchasers of substantially all of the assets of the Company. 
15.Binding Agreement.  This Agreement will inure to the benefit of and be binding upon the Company and its respective successors and assigns and the Executive and his legal representatives. 
16.Counterparts.  This Agreement may be executed in separate counterparts, each of which when so executed and delivered will be deemed an original, but all of which together will constitute one and the same instrument. 
17.Headings.  The headings in this Agreement are for reference purposes only and will not in any way affect the meaning or interpretation of this Agreement. 

18.Authorization.  The Company represents and warrants that the Board has authorized the execution of this Agreement. 
19.Validity.  The invalidity or unenforceability of any provisions of this Agreement will not affect the validity or enforceability of any other provisions of this Agreement, which will remain in full force and effect. 
20.Tax Withholding.  The Company will have the right to deduct from all benefits and/or payments made under this Agreement to the Executive any and all taxes required by law to be paid or withheld with respect to such benefits or payments. 
21.Section 409A.  The parties intend that payments and benefits under this Agreement comply with Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively, "Section 409A") and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of any payments under this Agreement which are subject to Section 409A until the Executive has incurred a "separation from service" within the meaning of Section 409A.  Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A.  Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid an accelerated or additional tax under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive's separation from service shall instead be paid on the first business day after the date that is six months following the Executive's separation from service (or, if earlier, the Executive's date of death).  To the extent required to avoid an accelerated or additional tax under Section 409A,  amounts reimbursable to the Executive shall be paid to the Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to the Executive) during one year may not affect amounts reimbursable or provided in any subsequent year.  The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment.
22.No Contract of Employment.  Nothing contained in this Agreement will be construed as a contract of employment between the Company or any of its Affiliates and the Executive, as a right of the Executive to be continued in the employment of the Company or any of its Affiliates, or as a limitation of the right of the Company or any of its Affiliates to discharge the Executive with or without Cause. 
IN WITNESS WHEREOF the parties have executed this Agreement as of the date first above written. 
	
			
	AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
	 
	EXECUTIVE

	 
	 
	 

	 
	 
	 

	By:                                                           
	 
	By:Exhibit 10.47

 

EXECUTION DRAFT

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission.  Double asterisks denote omissions.

 

EXCLUSIVE LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

 

This Exclusive License, Development and Commercialization Agreement (this “Agreement”) is made effective as of December 5, 2012 (the “Effective Date”) by and between Pacira Pharmaceuticals, Inc., a California corporation with a principal place of business at 5 Sylvan Way, Parsippany, New Jersey U.S. 07054 (“Pacira”) and Aratana Therapeutics, Inc., a Delaware corporation with a place of business at 1901 Olathe Blvd, Kansas City, Kansas 66103 (“Aratana”).  Pacira and Aratana are each hereafter referred to individually as a “Party” and together as the “Parties.”

 

WHEREAS, Pacira owns the global rights to develop and commercialize the Licensed Product (as hereinafter defined);

 

WHEREAS, Aratana has significant expertise in developing and commercializing pharmaceutical products in the Field (as hereinafter defined); and

 

WHEREAS, Aratana wishes to acquire and Pacira wishes to grant to Aratana an exclusive license to Develop (as herein after defined), market, sell and distribute the Licensed Product in the Field subject to the terms and conditions of this Agreement.

 

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

 

1.                             DEFINITIONS

 

1.1                          “Affiliate” shall mean with respect to any entity, any other entity that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such entity.  For purposes of this Section 1.1, “control” means ownership, directly or indirectly through one or more Affiliates, of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interests in the case of any other type of legal entity, status as a general partner in any partnership, or any other arrangement whereby a Party controls or has the right to control the Board of Directors or equivalent governing body of a corporation or other entity.

 

1.2                          “Additional Supply Agreement” shall have the meaning set forth in Section 2.3.2.

 

1.3                          “Administrative NADA” is a new animal drug application that is submitted after all of the technical sections that fulfill the requirements for the approval of the new animal drug application under 21 CFR 514.1 have been reviewed by CVM and CVM has issued a technical section complete letter for each of those technical sections.

 

 

1.4                          “Adverse Event” shall mean any unexpected, unusual, or untoward medical occurrence during the Development or Commercialization of the Licensed Product whether or not considered related to the Licensed Product, including, without limitation, any undesirable sign (including abnormal laboratory findings of clinical concern), symptom or disease temporally associated with the use of such Licensed Product.

 

1.5                          “Alternative Vial Size” shall have the meaning set forth in Section 2.3.2.

 

1.6                          “Aratana Indemnitees” shall have the meaning set forth in Section 9.1.2.

 

1.7                          “Chairperson” shall have the meaning set forth in Section 3.1.1.

 

1.8                          “Client-owned Animal Subject” shall mean any animal (pet) owned by a Third Party (and not a laboratory or test animal purchased by or on behalf of Aratana for experimental purposes).

 

1.9                          “Clinical Data” shall have the meaning set forth in Section 3.2(a).

 

1.10                   “Commercialize” or “Commercialization” shall mean any and all activities, excluding Development or manufacturing, necessary or desirable to realize and maximize commercial sales of the Licensed Product in accordance with applicable law, including distributing, importing, transporting, customs clearance, export, warehousing, packing, handling and delivering to customers, as well as offering for sale and sales, marketing, promoting and reimbursement related activities, including booking sales.  When used as a verb “Commercialize” means to engage in Commercialization.

 

1.11                   “Commercially Reasonable Efforts” shall mean the use of commercially reasonable efforts and the dedication of commercially reasonable resources.  With respect to the Licensed Product, Commercially Reasonable Efforts means efforts and diligence in, as applicable, Development or Commercialization of Licensed Product that is in accordance with the efforts and resources a reasonably comparable animal health company (in the case of Aratana) or specialty pharmaceutical company (in the case of Pacira) would use for a product owned by it and to which it has exclusive rights which is of similar market potential and at a similar stage of its product life as the Licensed Product, taking into account the establishment of the Licensed Product in the marketplace, the proprietary position of the Licensed Product, the regulatory and reimbursement structure involved and the profitability of the Licensed Product.  Commercially Reasonable Efforts shall be determined on a jurisdiction by jurisdiction basis within the Territory for the Licensed Product.

 

1.12                   “Confidential Information” shall mean with respect to a Party (the “Receiving Party”), all information which is disclosed by the other Party (the “Disclosing  Party”) to the Receiving Party hereunder or to any of its employees, consultants, Affiliates, licensee or Sublicensees, except to the extent that the Receiving Party can demonstrate by written record or other suitable physical evidence that such information, (a) as of the date of disclosure is demonstrably known to the Receiving Party or its Affiliates other than by virtue of a prior confidential disclosure to such Party or its Affiliates; (b) as of the date of disclosure is in, or subsequently enters, the public domain, through no fault or omission of the Receiving Party; (c) is obtained from a Third Party having a lawful right to make such disclosure free from any

 

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obligation of confidentiality to the Disclosing Party; or (d) is independently developed by or for the Receiving Party without reference to or reliance upon any Confidential Information of the Disclosing Party.  Confidential Information shall include all information disclosed to or accessible by Aratana or Pacira, as the case may be, relating to the subject matter of this Agreement prior to the Effective Date.

 

1.13                   “Control” or “Controlled” shall mean with respect to Pacira the possession by ownership or contract by Pacira, as the result of its pending or issued intellectual property rights, of the right to exclude Third Parties from Developing and commercializing a given compound, product, or process.

 

1.14                   “CVM” shall mean the Center for Veterinary Medicine (and any successor authority) of the FDA.

 

1.15                   “Delivery” means Pacira making available at the loading docks of the manufacturing facilities the bulk vials of the Licensed Product for collection by Aratana or its nominated carrier.

 

1.16                   “Development” and “Develop” shall mean all activities relating to research and development in connection with seeking, obtaining and/or maintaining any Regulatory Approval of the Licensed Product throughout the Territory in the Field, including all development activities, all animal clinical studies and all other activities relating to seeking, obtaining and/or maintaining any Regulatory Approvals from any Regulatory Authority, but excluding any manufacturing activities.

 

1.17                   “Development Plan” shall have the meaning set forth in Section 3.1.

 

1.18                   “Drug Approval Application” shall mean any application for Regulatory Approval including, without limitation, (a) any application filed with the FDA and (b) any equivalent application filed with any Foreign Regulatory Authority for Regulatory Approval required prior to any sale or use or any Commercialization of a Licensed Product in any country or jurisdiction in the Territory.

 

1.19                   “European Union” shall mean the member states of the European Union, as may exist from time to time, which as of the date hereof include Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom, and all other countries which accede to the European Union during the Term.

 

1.20                   “EXPAREL®” shall mean Bupivacaine Liposome Injectable Suspension — NDA #022496.

 

1.21                   “Ex-U.S.” shall mean any jurisdiction in the Territory residing outside the United States of America.

 

1.22                   “Ex-U.S.  Development Costs” shall have the meaning set forth in Section 5.4.1.

 

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1.23                   “Ex-U.S. Sublicense” shall have the meaning set forth in Section 2.2.1.

 

1.24                   “Ex-U.S. Sublicensee” shall have the meaning set forth in Section 2.2.1.

 

1.25                   “FDA” shall mean the U.S. Food and Drug Administration and any successor agency or authority thereto.

 

1.26                   “First Commercial Sale” shall mean with respect to the Licensed Product, on a jurisdiction-by-jurisdiction basis in the Territory, the date when Aratana or any Affiliate or any Sublicensee first sells or otherwise commercially disposes of such Licensed Product for use or consumption in the Field after receipt of the relevant Regulatory Approval in such jurisdiction.

 

1.27                   “Field” shall mean all prophylactic or therapeutic uses of the Licensed Product for veterinary use.  For the avoidance of doubt, the Field shall not include use of the Licensed Product in humans.

 

1.28                   “Foreign Regulatory Authorities” shall mean any applicable supranational, national, federal, provincial, state or local regulatory agency, department, bureau or other Governmental Authority of any country or jurisdiction in the Territory (other than the United States of America), having responsibility in such country or jurisdiction for any Regulatory Approvals of any kind in such country or jurisdiction, and any successor agency or authority thereto.

 

1.29                   “Generic Intrusion” shall mean, on a jurisdiction-by-jurisdiction basis, the launch in such jurisdiction in the Territory in the Field of an extended release injectible bupivacaine referencing any Drug Approval Application which is deemed bioequivalent or directly substitutable to the Licensed Product by a Regulatory Authority in the respective jurisdiction of the Territory.

 

1.30                   “Governmental Authority” shall mean any governmental or quasi-governmental department, commission, board, bureau, agency, court or other instrumentality of any country or jurisdiction in the Territory or any political subdivision thereof.

 

1.31                   “Initial Supply Agreement” shall have the meaning set forth in Section 2.3.2.

 

1.32                   “JCCC” shall have the meaning set forth in Section 3.1.

 

1.33                   “Know-How” shall mean all information, data, knowledge, discoveries and trade secrets whether or not reduced to writing pertinent to the Licensed Product or to the manufacture, use or sale of the Licensed Product now or hereafter Controlled by Pacira.

 

1.34                   “Law” shall mean all laws, treaties, statutes, ordinances, judgments, decrees, rules, codes, injunctions, writs, regulations, binding arbitration rulings, orders, and judicial or administrative interpretations or promulgations of any Governmental Authority having jurisdiction over the transactions contemplated hereunder.

 

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1.35                   “Licensed Patent Rights” shall mean any patents and patent applications, having claims directed to or providing exclusivity to the Licensed Product, or to the acquisition, manufacture, use, method of use, performance, sale, offer for sale, importation or other disposition of the Licensed Product that is owned or Controlled by Pacira, including but not limited to those patents and patent applications described in Schedule 1.35 attached hereto, and any divisional, continuation, continuation-in-part, reissue, reexamination, confirmation, revalidation, registration, patent of addition, renewal, extension, substitute or foreign counterparts thereof, or any patent issuing therefrom or any supplementary protection certificates related thereto.

 

1.36                   “Licensed Product” shall mean DepoBupivacaineTM Extended Release Liposome Injection for use in the Field.

 

1.37                   “Licensed Product Infringement Claim” shall mean a claim or action alleging infringement of any claim of any patent or other proprietary right of a Third Party in the Territory by the manufacture, use or sale of the Licensed Product by Aratana, its Affiliates, or Sublicensees but which claim or action does not also allege any infringement of such claim of any patent or other proprietary right of a Third Party by the manufacture, use or sale of EXPAREL® in the human field.

 

1.38                   “Minimum Annual Revenue” shall have the meaning set forth in Section 10.2.5.

 

1.39                   “Net Sales” shall mean the total gross sales of all Licensed Product invoiced and actually collected by Aratana, its Affiliates or any Sublicensees (or a further sublicensee of a Sublicensee) to Third Parties throughout the Territory, less the following amounts actually deducted or allowed during the applicable reference period (regardless of the period in which such related sales were made):

 

(a)                         transport, freight and insurance costs;

 

(b)                         sales and excise taxes and duties;

 

(c)                          normal and customary trade, quantity and cash discounts and rebates;

 

(d)                         refunds and chargebacks;

 

(e)                          actual rebates and credits or allowances allowed to customers in respect thereof; and

 

(f)                           amounts repaid or credited for actually returned or recalled Licensed Product.

 

Notwithstanding anything else contained in this Section 1.39, the supply or other disposition of Licensed Product at no cost or charge to the recipient (x) as reasonable quantities of samples consistent with industry practice (y) for use in non-clinical or clinical studies or (z) for use in any tests or studies reasonably necessary to comply with any law, regulation or request by any Regulatory Authority shall not be included in the calculation of Net Sales.

 

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1.40                   “OctoPlus” means OctoPlus Sciences B.V.

 

1.41                   “OctoPlus Agreement” means that certain Non-Exclusive License Agreement, dated September 9, 2010, between Pacira and OctoPlus, as amended, supplemented or modified from time to time.

 

1.42                   “Other Jurisdictions” shall have the meaning set forth in Section 10.2.3.

 

1.43                   “Pacira Indemnitees” shall have the meaning set forth in Section 9.1.1.

 

1.44                   “Pacira Intellectual Property” shall have the meaning set forth in Section 2.4.

 

1.45                   “Primary Territory” shall mean the United States, its territories and possessions, the SP Royalty Territory and the other countries of the European Union.

 

1.46                   “RDF” shall mean Research Development Foundation.

 

1.47                   “RDF Agreement” shall mean that certain Assignment Agreement between Pacira (as successor to SkyePharma, Inc.) and RDF dated February 9, 1994, as amended, supplemented or modified from time to time.

 

1.48                   “Regulatory Approval” shall mean any and all approvals or authorizations of any kind of any Regulatory Authority necessary required prior to any commercial marketing, sale or use of the Licensed Product (or any component thereof) for use in the Field in any country or jurisdiction in the Territory for a particular indication in the Field.  For clarity, Regulatory Approval: (i) in the United States shall consist of approval by the FDA of the Administrative NADA; and (ii) shall not include any approvals, licenses, registrations or authorizations necessary for the manufacture or supply of the Licensed Product, or any component thereof, by Pacira to Aratana or its Affiliates or Sublicensees.

 

1.49                   “Regulatory Authority” shall mean the FDA or any Foreign Regulatory.

 

1.50                   “Renewal Term” shall have the meaning set forth in Section 10.1.

 

1.51                   “Royalty Rate” shall have the meaning set forth in Section 5.3.1.

 

1.52                   “Shared Infringement Claim” shall mean a claim or action alleging infringement of any claim of any patent or other proprietary right of a Third Party in the Territory by the manufacture, use or sale of the Licensed Product by Aratana, its Affiliates, or Sublicensees and which claim or action also alleges infringement of such claim of any patent or other proprietary right of a Third Party by the manufacture, use or sale of EXPAREL® in the human field.

 

1.53                   “SkyePharma” shall mean SkyePharma Holding, Inc.

 

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1.54                   “SkyePharma Agreement” shall mean that certain Stock Purchase Agreement among Pacira (as successor to Blue Acquisition Corp.), SkyePharma and SkyePharma, Inc. dated January 8, 2007.

 

1.55                   “Sublicensee” shall mean any Affiliate or Third Party to whom Aratana grants, in accordance with the terms of this Agreement, a sublicense of some or all of the rights granted to Aratana under this Agreement.

 

1.56                   “Supply Agreement” shall have the meaning set forth in Section 2.3.

 

1.57                   “SP Royalty” shall mean [**]% of Net Sales payable to SkyePharma per the SkyePharma Agreement.

 

1.58                   “SP Royalty Territory” shall mean the United Kingdom, Italy, France, Germany, Spain and Japan.

 

1.59                   “Term” shall have the meaning set forth in Section 10.1.

 

1.60                   “Territory” shall mean worldwide.

 

1.61                   “Third Party” shall mean any person or entity other than Aratana, Pacira and their respective Affiliates or Sublicensees.

 

1.62                   “Trademark(s)” shall mean (i) EXPAREL® and (ii) any other trademark or trademarks including logo mark and/or trade dress selected by, registered or owned by Pacira, its Affiliates or sublicensees in connection with the promotion and marketing of EXPAREL in the Territory.

 

1.63                   “Upfront Payment Amount” shall have the meaning set forth in Section 5.1.

 

1.64                   “U.S. Development Costs” shall have the meaning set forth in Section 5.4.3.

 

1.65                   “U.S. Sublicense” shall have the meaning set forth in Section 2.2.2.

 

1.66                   “U.S. Sublicensee” shall have the meaning set forth in Section 2.2.2.

 

In this Agreement, unless the context requires otherwise:

 

(a)                                 the headings are included for convenience only and shall not affect the construction of this Agreement;

 

(b)                                 words denoting the singular shall include the plural and vice versa;

 

(c)                                  words denoting one gender shall include each gender and all genders;

 

(d)                                 the words “include” or “including” shall mean “include, without limitation” or “including, without limitation,” as the case may be, and the language following “include” or “including” shall not be deemed to set forth an exhaustive list; and

 

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(e)                                  any reference to an enactment or statutory provision is a reference to it as it may have been, or may from time to time be amended, modified, consolidated or reenacted.

 

The Schedules to this Agreement comprise part of and shall be construed in accordance with the terms of this Agreement.

 

2.                             GRANT OF RIGHTS

 

2.1                          Grant of License.  Pacira hereby grants to Aratana an exclusive (even as to Pacira) royalty-bearing license, including the limited right to grant sublicenses (as provided herein), to the Licensed Patent Rights and Pacira’s Know-How to Develop, register, use, have used, distribute, have distributed, sell, offer for sale, have sold, import, have imported and Commercialize, the Licensed Product in the Territory, solely for any and all uses within the Field.  The license granted hereunder shall specifically not include the right of Aratana or any Affiliate or Sublicensee of Aratana to manufacture the Licensed Product or to utilize the Trademarks in connection with the Development or Commercialization of the Licensed Product.

 

2.2                          Right to Sublicense.

 

2.2.1                    Sublicenses Outside the United States.  Aratana shall have the limited right to grant sublicenses under the license set forth in Section 2.1 to Develop and Commercialize the Licensed Product outside the United States (an “Ex-U.S. Sublicense”), solely for any and all uses within the Field; provided, however, that (i) Aratana shall provide Pacira periodic updates of its ex-US sublicensing activities at each meeting of the JCCC (as hereinafter defined); (ii) Pacira shall be notified of the proposed grant of an Ex-U.S. Sublicense to any and all potential Sublicensees outside the United States (an “Ex-U.S. Sublicensee”), for approval by Pacira which approval shall not be unreasonably withheld together with a copy of the proposed Ex-U.S. Sublicense, such approval to be determined within [**] calendar days of receipt of the notice and copy of the proposed sublicense; (iii) any and all Ex-U.S. Sublicenses shall be consistent with all the terms and conditions of this Agreement and shall require the Ex-U.S. Sublicensee to comply fully with the obligations imposed by this Agreement; and (iv) following execution of such Ex-U.S. Sublicense, Aratana shall provide Pacira with a copy of each such Ex-U.S. Sublicense and any supplements, amendments or modifications within [**] calendar days of execution.  Aratana will be fully responsible under this Agreement for the actions and omissions of such Ex-U.S. Sublicensees as if such actions or omissions were its own.  Aratana will not grant an Ex-U.S. Sublicense other than as permitted in this Section 2.2.1.  Notwithstanding the foregoing, any Ex-U.S. Sublicense shall not provide the Ex-U.S. Sublicensee with the right to grant further sublicenses under such Ex-U.S. Sublicense unless such further sublicense is expressly conditioned upon the prior written consent of Pacira, which consent may be withheld by Pacira in its absolute discretion.

 

2.2.2                    Sublicenses Within United States.  In the event Aratana determines to sublicense all or any portion of the rights granted in the United States in the Field hereunder to an Affiliate or Third Party (a “U.S. Sublicense”), the Parties will work together to find the appropriate partner.  Any such U.S. Sublicense, including any supplement, amendment or modification thereto, will require the written consent of Pacira, which consent will be considered in the good-faith business judgment of Pacira but may be withheld by Pacira in its sole discretion.  Any and all U.S. Sublicenses shall be consistent with all the terms and conditions of

 

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this Agreement and shall require each Sublicensee under a U.S. Sublicense (a “U.S.  Sublicensee”) to comply fully with the obligations imposed by this Agreement and, following execution of such U.S Sublicense, Aratana shall provide Pacira with a copy of each such U.S. Sublicense within [**] calendar days of execution.  Aratana will be fully responsible under this Agreement for the actions and omissions of each U.S. Sublicensee as if such actions or omissions were its own.  Aratana will not grant a U.S. Sublicense other than as permitted in this Section 2.2.2.  Notwithstanding the foregoing, any U.S. Sublicense shall not provide the U.S. Sublicensee with the right to grant further sublicenses under such U.S. Sublicense unless such further sublicense is expressly conditioned upon the prior written consent of Pacira, which consent may be withheld by Pacira in its absolute discretion.

 

2.3                          Manufacturing.

 

2.3.1                    Exclusive Supplier.  During the Term, Pacira shall be the exclusive supplier of the Licensed Product to Aratana.  Neither Aratana nor any Affiliate or Sublicensee shall have the right to make or have made the Licensed Product in the Territory.

 

2.3.2                    Supply Agreements.  Concurrently herewith, the Parties are entering into a supply agreement in substantially the form attached hereto as Exhibit A (the “Initial  Supply Agreement”), pursuant to which Pacira is agreeing to supply unlabeled vials of the Licensed Product to Aratana in the sizes and at the prices contemplated thereby.  Thereafter, during the Term, in the event that Pacira manufactures the Licensed Product for its human health program in any vial size not contemplated by the Initial Supply Agreement (an “Alternative Vial  Size”), or in the event that Aratana requires the Licensed Product in any Alternative Vial Size and agrees to pay for all reasonable costs incurred by Pacira in connection with developing the process to manufacture the Licensed Product in such Alternative Vial Size, the Parties agree that they will negotiate in good faith to enter into an additional supply agreement (the “Additional Supply Agreement” and, together with the Initial Supply Agreement, the “Supply  Agreements”) on substantially similar terms as the Initial Supply Agreement with appropriate, negotiated economic adjustments based on the differences between the Alternative Vial Size and the vial sizes contemplated by the Initial Supply Agreement.

 

2.4                          Ownership.  Aratana shall own all right, title and interest in any Drug Approval Application during the Term and all trade names, trademarks and trade dress utilized in the Commercialization of the Licensed Product.  Pacira shall own all right, title and interest in and to the Licensed Patent Rights, Know How and Trademarks (collectively “Pacira Intellectual  Property”).  To the extent any rights, title or interest in or to any Pacira Intellectual Property would otherwise vest in Aratana, any of its Affiliates or any of their respective personnel or contractors, Aratana hereby assigns (and shall cause Aratana’s Affiliates and the respective personnel and contractors of Aratana or Aratana’s Affiliates to assign) all such rights, title and interest to Pacira.

 

3.                             DEVELOPMENT/COMMERCIALIZATION OF LICENSED PRODUCTS

 

3.1                          Joint Clinical and Commercial Committee.  Within [**] calendar days after the Effective Date, the Parties shall establish a Joint Clinical and Commercial Committee (“JCCC”) to direct Development and Commercialization of the Licensed Product, including but

 

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not limited to the sharing by both parties of information on Development of the Licensed Product, sublicensing and other business development activities of Aratana related to the Licensed Product, intellectual property management and Commercialization, and ensuring any plans for Development or Commercialization of the Licensed Product will not be adverse to, materially conflict with, or interfere with any regulatory approval, manufacture, marketing authorization or marketing efforts for EXPAREL® outside of the Field.  The JCCC will consist of an equal number of, and not less than [**], representatives of each Party, as determined by the CEO of each Party.  Any decisions made by the JCCC shall be unanimous with each Party’s representatives collectively having one vote.  The JCCC shall have the following powers and duties:

 

·                                          Oversee the Development of the Licensed Product in the Field, including but not limited to the clinical development program, which shall be reviewed and subject to the approval of the JCCC (the “Development  Plan”);

 

·                                          Review, coordination and approval of any scientific publications relating to the Licensed Product;

 

·                                          Review and approval of any Commercialization plans for the Licensed Product in the Territory;

 

·                                          Review of any sublicensing or business development activities related to the Licensed Product in the Field; and

 

·                                          Such other powers and duties as agreed to by the Parties.

 

3.1.1                    Chairmanship.  One JCCC representative from a Party shall chair the JCCC (the “Chairperson”) on a rotating annual calendar year basis, alternating between a representative from Aratana and a representative from Pacira, with the initial Chairperson to be from [**].  The Chairperson shall send notices and agendas for all JCCC meetings to all JCCC members and ensure review and approval of the minutes of each JCCC meeting within [**] calendar days of adjournment of a JCCC meeting.

 

3.1.2                    Meetings.  The JCCC will meet as needed upon request from at least one of the Parties to the then-current Chairperson, but not less than [**].  At each meeting, the Parties shall provide updates on the status of their respective responsibilities.  Meetings may be held by teleconference, videoconference or in person, as mutually agreed upon by the Parties.  At each meeting, a secretary shall by appointed by the Chairperson to record meeting minutes.  Within [**] calendar days after a meeting, the Chairperson shall circulate draft minutes to the Parties for review, comment and distribution, in order to finalize the minutes within [**] calendar days of such meeting.

 

3.1.3                    Dispute Resolution.  If a dispute arises in connection with the Development Plan, Commercialization of the Licensed Product or any other issue addressed by the JCCC, the JCCC shall confer immediately and use commercially reasonable efforts to resolve the dispute or issue within [**] calendar days of their initial conference.  No such dispute or

 

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issue shall be considered resolved until the JCCC has unanimously agreed to the resolution; provided, however, that if the JCCC does not reach consensus, within a [**] calendar day period, the resolution of the dispute or issue shall be made by the JCCC representatives of Aratana unless such resolution in the opinion of any member of the JCCC would be reasonably expected to be adverse to, materially conflict with, or interfere with the regulatory approval, manufacture, marketing authorization or marketing efforts for EXPAREL® outside of the Field, in which case such dispute will be handled in accordance with Section 11 of this Agreement.

 

3.2                          Responsibilities of Pacira.  Under the supervision of the JCCC, Pacira shall:

 

(a)                        make available to Aratana copies of any and all documentation in possession of Pacira related to the Licensed Product including but not limited to research data and reports, regulatory materials and correspondence (including INDs and NDAs in U.S.), clinical and preclinical data (including all raw data), chemistry, manufacturing and controls (CMC) data, relevant to conducting animal clinical studies and obtaining Regulatory Approval in the Field in the Territory (collectively, the “Clinical Data”) and Aratana shall have the right to use the Clinical Data solely in connection with, and as necessary for, the Development and Commercialization of the Licensed Product;

 

(b)                        provide to Aratana without charge (EXW Incoterms 2010 Pacira’s or its designee’s manufacturing facility) such reasonable quantities of Licensed Product in unlabeled [**] vials (or [**] vials at all such times when such vials are otherwise being manufactured for commercial sale in Pacira’s human health program for EXPAREL®) necessary for Aratana to conduct such studies in the Field in the Territory as necessary to seek Regulatory Approvals in accordance with the Development Plan;

 

(c)                         supply unlabeled vials (without commercial packaging) of bulk Licensed Product to Aratana (EXW Incoterms 2010 Pacira’s manufacturing facility), at the transfer prices and otherwise pursuant to the terms and conditions set forth in the Supply Agreements; and

 

(d)                        keep the JCCC reasonably informed of any activities concerning the manufacture of the Licensed Product, including those related to a Change in Process (as defined in the Supply Agreement).

 

3.3                                 Responsibilities of Aratana.  Under the supervision of the JCCC, Aratana shall:

 

(a)                        at its sole cost and expense and using Commercially Reasonable Efforts, be responsible for Development of Licensed Product in the Territory in accordance with the Development Plan approved by the JCCC;

 

(b)                        use Commercially Reasonable Efforts to conduct or cause to be conducted such clinical studies necessary to achieve Regulatory Milestone C described in Section 5.2.1 below;

 

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(c)                         be responsible for the preparation and filing at its sole cost and expense of any Drug Approval Applications in the Territory, including an Administrative NADA, which Drug Approval Applications shall be filed no later than [**] days following receipt of the requisite technical section complete letters for each of the technical sections that fulfill the requirements for the approval of the Administrative NADA;

 

(d)                        be responsible for the performance of all activities and undertakings as may be required by any Regulatory Authorities to obtain approval of the Drug Approval Applications;

 

(e)                         at its sole cost and expense, be responsible for the Commercialization of the Licensed Product, including all sales and marketing activities, in the Field in the Territory;

 

(f)                          following Delivery by Pacira be responsible for the labeling, packaging and shipping of bulk vials of the Licensed Product for commercial sale, utilizing such branding, trade names and trade dress selected by Aratana and approved by the JCCC;

 

(g)                         following receipt of Regulatory Approval, be responsible at its sole cost and expense for (i) the maintenance and updating of all Regulatory Approvals as may be required by any Regulatory Authorities, including any post approval studies required by any Regulatory Authorities and pharmacovigilance and (ii) any user fees relating to the manufacturing of the Licensed Product for Aratana that are required by the FDA; and

 

(h)                        such other activities requested by the JCCC.

 

3.4                          Adverse Events.  The Parties agree to provide each other with Adverse Event information and product complaint information relating to Licensed Product as compiled and prepared by the Parties in the normal course of business in connection with the Development, Commercialization or sale of the Licensed Product, within time frames consistent with reporting obligations under applicable Law.  All reports, updates, Adverse Events, product complaint and other information provided by one Party to the other Party under this Agreement (including under this Section 3.4), shall be considered Confidential Information of the disclosing Party, subject to the terms of Section 6 hereof it being understood that the FDA may publish information relating to Adverse Events on its website.

 

3.5                          Commercialization in the U.S.  In the event that Aratana proposes to exercise its rights pursuant to Section 2.2.2 to pursue a U.S. Sublicense or a co-promotion partner for the Commercialization of the Licensed Product in the U.S., Aratana shall, prior to entering into negotiations with any Third Party relating to such U.S. Sublicense, co-promotion agreement or similar arrangement, negotiate in good faith with Pacira for a period of [**] days regarding shared Commercialization rights between Aratana and Pacira in the Field in the U.S.; provided, however, that each Party’s decision to accept or reject such shared Commercialization rights on the terms offered by the other Party shall be made in its absolute discretion.

 

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4.                             ADDITIONAL OBLIGATIONS OF ARATANA

 

4.1                          Compliance.  Aratana shall be solely responsible for compliance with all applicable Law in the Territory relating to the storage (following the delivery of the Licensed Product by Pacira), Development, Commercialization, and all other activities concerning the Licensed Product.

 

4.2                          Permits and Licenses.  Aratana shall throughout the Term, at its expense, obtain and maintain any and all licenses, permits, orders, authorizations and consents required by any Regulatory Authorities in the Territory to perform its obligations under this Agreement.

 

4.3                          Sale of Licensed Product.  Aratana shall use its Commercially Reasonable Efforts to market and sell the Licensed Product, either directly or through a Sublicensee, in the Territory in compliance with all applicable laws using techniques and methods which are customary in the pharmaceutical industry for veterinary products.

 

4.4                          Exclusive Supplier.  During the Term, Aratana agrees to purchase all of its requirements for Licensed Product exclusively from Pacira, and Pacira agrees to supply the Licensed Product on the terms and conditions to be set forth in the Supply Agreements.

 

4.5                          No Competing Products.  During the Term, neither Aratana nor any of its Affiliates shall Develop or Commercialize either directly or indirectly (including, but not limited to, by providing any assistance or license to any Third Party to do any of the foregoing), any injectible long-acting analgesic product for veterinary use other than the Licensed Product.  Aratana shall not grant any Third Party (other than Pacira) a right of reference to any Drug Approval Application.

 

4.6                          Use of Confidential Information.  Aratana shall only use Confidential Information for the purposes of this Agreement and shall not modify, copy or reverse engineer any aspect or component of the Licensed Product or Know-How nor shall Aratana authorize or permit any Third Party to modify, copy or reverse engineer any aspect or component of the Licensed Product or Know How.

 

5.                             PAYMENTS AND ROYALTIES

 

5.1                          Upfront Payment.  In consideration of the grant of the licenses and rights hereunder, Aratana shall pay to Pacira the non-refundable sum of U.S. $1,000,000 (the “Upfront  Payment Amount”) upon execution of this Agreement.

 

5.2                          Milestone Payments

 

5.2.1                    Milestone Payments:  In further consideration of the grant of the license and rights by Pacira hereunder, and subject to the other terms of this Agreement (including the remainder of this Section 5), Aratana shall pay to Pacira the following milestone payments within [**] calendar days of achievement of the designated milestones:

 

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Regulatory Milestone
    	
 
    	
Milestone Amount
    	
 
    
	
A. [**]
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
B. [**]
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
C. [**]
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
D. [**]
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
E. [**]
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
Total Potential Regulatory   Milestones
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
Commercial Milestones
    	
 
    	
 
    	
 
    	
 
    
	
A. Upon achievement of annual Net Sales of   Licensed Product of U.S. $[**] in the Territory:
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
B.  Upon achievement of annual Net   Sales of Licensed Product of U.S. $[**] in the Territory:
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
C.  Upon achievement of annual Net   Sales of Licensed Product of U.S. $[**] in the Territory:
    	
 
    	
U.S.   $
    	
[**]
    	
 
    
	
Total Potential Commercial Milestones
    	
 
    	
U.S.   $
    	
[**]
    	
 
    

 

5.2.2                    Milestones Achieved Only Once: Each Regulatory and Commercial Milestone can only be achieved once.  After the Licensed Product achieves a regulatory or commercial milestone, payment shall not come due upon the achievement of the same milestone.

 

5.2.3                    Notice of Achievement of Milestones.  Aratana shall provide Pacira with notice of achievement of any Regulatory or Commercial Milestones within [**] calendar days of achievement of such Milestone.

 

5.3                          Payment of Royalties; Royalty Rates

 

5.3.1                    Royalty Payments.  Commencing on the Effective Date and continuing for the Term in the Territory, Aratana shall pay to Pacira royalty payments based on annual Net Sales by Aratana or its Affiliates as follows:

 

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Territory
    	
 
    	
Annual Net Sales
    	
 
    	
Royalty Rate
    	
 
    
	
U.S.
    	
 
    	
 
    	
$
    	
[**] 
    	
 
    	
[**]
    	
%
    
	
 
    	
 
    	
›
    	
$
    	
[**]
    	
 
    	
[**]
    	
%
    
	
Ex-U.S.
    	
 
    	
 
    	
$
    	
[**] 
    	
 
    	
[**]
    	
%
    
	
 
    	
 
    	
›
    	
$
    	
[**]
    	
 
    	
[**]
    	
%
    

 

(collectively, the “Royalty Rate”).  All calculations for this Section 5.3.1 shall be done in U.S. dollars.  Royalties on sales by any Ex-U.S. Sublicensees and U.S. Sublicensees shall be paid in accordance with Sections 5.4.1 and 5.4.2 below.

 

5.3.2                    Third-Party Royalty Payments.  Should Aratana be required to pay royalties to a Third Party (excluding any SP Royalty (which, except as provided in Section 5.4.3, shall be the responsibility of Pacira) and any royalties due RDF under the RDF Agreement and not including any royalties that may be due Sublicensees for the sale of Licensed Product) in order to settle or avoid any Licensed Product Infringement Claim or Shared Product Infringement Claim in the Territory, the royalty paid to Pacira shall be reduced by [**] percent ([**]%) of the royalty paid to such Third Party, but in no event shall the royalty paid to Pacira for Net Sales in the Territory be reduced by more than [**] percent ([**]%).

 

5.3.3                    Reduction of Royalty Rate.  In the event of Generic Intrusion in any jurisdiction of the Territory, the Royalty Rate shall be reduced by [**]% in such jurisdiction.

 

5.3.4                    Royalty Floor.  Notwithstanding any reduction in Royalty Rate payable to Pacira as contemplated in Sections 5.3.2 and 5.3.3 above, at no time shall the Royalty Rate paid to Pacira on Net Sales by Aratana in any jurisdiction in the Territory be reduced below [**] percent ([**]%).

 

5.3.5                    Payment of Royalties.  Aratana shall make royalty payments owed to Pacira pursuant to Section 5.3 hereunder quarterly in arrears, within [**] calendar days from the end of each calendar quarter.  For purposes of determining when a sale of any Licensed Product occurs under this Agreement, the sale shall be deemed to occur on the earlier of (a) the date the Licensed Product (in final form) is shipped by Aratana or its Affiliates or Sublicensees for sale to a Third Party or (b) on the date of payment on the invoice to the purchaser of the Licensed Product.  Each royalty payment shall be accompanied by a report for each jurisdiction in the Territory in which sales of Licensed Products occurred in the calendar quarter covered by such statement, specifying: (i) the total gross sales and Net Sales (including an itemization of the deductions applied to gross sales to derive such Net Sales) in each jurisdiction’s currency; (ii) the number of units of Licensed Product sold (less damaged, rejected, returned or recalled Licensed Product) during the relevant Calendar Quarter; (iii) the applicable royalty rate under this Agreement; (iv) the royalties payable in each jurisdiction’s currency; (v) the applicable exchange rate to convert from each jurisdiction’s currency to U.S. dollars under Section 5.5 and (vi) the royalties payable in U.S. dollars.

 

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5.4                          Sublicense Payments.

 

5.4.1                    Payments for Ex-U.S. Sublicenses.  Subject to any adjustments to royalty payments set forth in Section 5.4.2, Aratana shall pay to Pacira fifty percent (50%) of all (a) sublicense fees, milestones and royalty payments received by Aratana pursuant to any Ex-U.S. Sublicenses and (b) any profits, including any amounts by which resale/transfer price exceeds Product Price, derived by Aratana in connection with any transfer or resale of Bulk Product (as defined in the Supply Agreement) or Licensed Product to any Ex-U.S. Sublicensees as contemplated by the Supply Agreement; provided, however, that prior to making any such payments to Pacira, Aratana shall first be entitled to recoup from any upfront fees or milestone payments (but not from any royalty payments or supply revenue) received by Aratana from any Ex-U.S. Sublicensee its out-of-pocket Third Party direct, documented fees and expenses associated with any Drug Approval Applications for the Licensed Product in jurisdictions in the Territory outside the United States, including any fees and expenses associated with any Ex-U.S. clinical program used for submission with any such Drug Approval Application (“Ex-U.S.  Development Costs”).  For the avoidance of doubt, Aratana may not recoup identified and specified Ex-U.S. Development Costs against payments received pursuant to any Ex-U.S. Sublicense more than once.  Ex-U.S. Development Costs shall not include the Upfront Payment Amount or any milestone or royalty payments due or payable to Pacira hereunder and Aratana may not recoup any Ex-U.S. Development Costs against any payments due or payable to Pacira hereunder.  Aratana’s right to recoup expenses pursuant to this Section 5.4.1 shall also not supersede its payment obligations pursuant to Section 5.4.2 below.

 

5.4.2                    SP Royalty Payments on Sales by Sublicensees in SP Royalty Territory.  In addition to Aratana’s obligation to pay to Pacira 50% of any sublicense fees, milestones and royalty payments received pursuant to Section 5.4.1 above, for as long as Pacira has an obligation to pay the SP Royalty, the Parties shall share in the responsibility for the SP Royalty in the SP Royalty Territory as follows:

 

(a)                        If the royalty received from a Sublicensee is less than [**]% of Net Sales in the Third Party Royalty Territory, Pacira shall be responsible for [**]% and Aratana shall be responsible for [**]% of the SP Royalty such that Aratana shall pay to Pacira [**]% of any royalties on Net Sales received from a Sublicensee in the SP Royalty Territory;

 

(b)                        If the royalty received from a Sublicensee is greater than or equal to [**]% but less than [**]% of Net Sales in the SP Royalty Territory, Pacira shall be responsible for [**]% and Aratana shall be responsible for [**]% of the SP Royalty such that Aratana shall pay to Pacira [**]% of any royalties on Net Sales received from a Sublicensee in the SP Royalty Territory;

 

(c)                         If the royalty received from a Sublicensee is greater than or equal to [**]% of Net Sales in the SP Royalty Territory, Pacira shall be responsible for [**]% and Aratana shall be responsible for [**]% of the SP Royalty such that Aratana shall pay to Pacira [**]% of any royalties received on Net Sales from a Sublicensee in the SP Royalty Territory; and

 

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(d)                        For as long as Pacira has the obligation, Pacira shall pay the SP Royalties to SkyePharma in accordance with the terms of the SkyePharma Agreement.  Pacira shall also be responsible for payment to RDF of any amounts due under the RDF Agreement.

 

5.4.3                    Payments for U.S. Sublicenses.  Aratana and Pacira shall equally share fifty percent (50%) of all (a) sublicense fees, milestones and royalty payments received by Aratana from any U.S. Sublicensees (b) any profits, including any amounts by which resale/transfer price exceeds Product Price, derived by Aratana in connection with any transfer or resale of Bulk Product (as defined in the Supply Agreement) or Licensed Product to any U.S. Sublicensees as contemplated by the Supply Agreement until Aratana recoups its out-of-pocket Third Party direct, documented fees and expenses associated with any Drug Approval Application in the United States for the Licensed Product, including any fees and expenses associated with the Development of the Licensed Product in the U.S. (“U.S. Development  Costs”), and any milestones (other than the Upfront Payment Amount) paid to Pacira hereunder.  Any sharing of royalty payments under this Section 5.4.3 shall be updated to reflect any sharing of SP Royalty as provided in Section 5.4.2.  Following Aratana’s recoupment of its U.S. Development Costs, except as provided below, the license granted to Aratana for the United States shall terminate and  Aratana shall no longer be entitled to receive any royalties or other payments due under the U.S. Sublicense with all rights thereunder reverting to Pacira, and upon such event Aratana shall comply with Section 10.3.5 below; provided, however, if Aratana enters into a U.S. Sublicense and is nevertheless able to continue to meet its financial obligations and royalty payments to Pacira as outlined in Sections 5.2 and 5.3.1, Aratana will be entitled to retain its rights to the Licensed Product and can retain all amounts in excess of the amounts due Pacira hereunder.

 

5.4.4                    Payment of Sublicense Payments, etc.  Aratana shall pay to Pacira within [**] calendar days of receipt of its share of any payments received by Aratana pursuant to any Ex-U.S. Sublicense or U.S. Sublicense.  Each sublicense payment shall be accompanied by a report specifying (i) the sublicense fees, milestones and royalty payments received in each jurisdiction’s currency; (ii) an account of deductions taken for any U.S. Development Costs or Ex-U.S. Development Costs (as the case may be); (iii) the applicable exchange rate to convert from each jurisdiction’s currency to U.S. dollars under Section 5.5; (iv) a breakdown of any SP Royalty amounts; (v) the amount payable in United States Dollars; and (vi) any other information requested by Pacira.

 

5.5                          Accounting.  All payments hereunder shall be made in U.S. dollars.  Conversion of foreign currency to United States dollars shall be made at the conversion rate existing in the United States (as reported in The Wall Street Journal, East Coast edition) on the immediately preceding business day.  If The Wall Street Journal ceases to be published, then the rate of exchange to be used shall be that reported in such other business publication of national circulation in the United States as the Parties reasonably agree.

 

5.6                          Taxes; Withholding; Restrictions on Payment.  Each Party shall pay the applicable taxes levied on all payments made to it under this Agreement.  If provision is made in Law or regulation of any jurisdiction for withholding of taxes of any type, levies or other charges with respect to any amounts payable under this Agreement to the other Party, the paying Party

 

17

 

shall promptly pay such tax, levy or charge for and on behalf of the other Party to the proper governmental authority, and shall promptly furnish the other Party with receipt of such payment.  The paying Party shall have the right to deduct any such tax, levy or charge actually paid from payment due to the other Party or be promptly reimbursed by the other Party.  Each Party agrees to assist the other Party in claiming exemption from such deductions or withholdings under double taxation or similar agreement or treaty from time to time in force and in minimizing the amount required to be so withheld or deducted and shall use all reasonable and legal efforts to reduce tax withholding on payments made hereunder. If by law, regulations or fiscal policy of a particular jurisdiction in the Territory, remittance of royalties in U.S. dollars is restricted or forbidden, written notice thereof shall promptly be given to Pacira, and payment of the royalty shall be made by the deposit thereof in local currency to the credit of Pacira in a recognized banking institution reasonably designated by Pacira by written notice to Aratana.

 

5.7                          Reports.  Following the date of First Commercial Sale of the first Licensed Product hereunder, Aratana shall, and shall require each of its Sublicensees to, provide monthly reports to Pacira no later than the [**] calendar day after the end of each such calendar month setting forth (i) the gross sales and Net Sales of Licensed Product in each jurisdiction of the Territory; (ii) the number of units of Licensed Product sold in each jurisdiction of the Territory; and (iii) such other information reasonably requested by Pacira.  Aratana also agrees to provide such information to, and reasonably cooperate with, Pacira as may be reasonably requested by Pacira in order to comply with its reporting obligations to SkyePharma and RDF.

 

5.8                          Records Retention; Review.

 

5.8.1                    Royalties.  Commencing as of the date of First Commercial Sale of the first Licensed Product hereunder, Aratana and its Affiliates and Sublicensees shall keep for at least [**] years from the end of the calendar year to which they pertain complete and accurate records of sales by Aratana or its Affiliates and Sublicensees, as the case may be, of each Licensed Product, in sufficient detail to allow the accuracy of the payments hereunder to be confirmed.

 

5.8.2                    Review.  Subject to the other terms of this Section 5.8.2, at the request of Pacira, which shall not be made, without cause, more frequently than [**] per calendar year during the Term, upon at least [**] calendar days’ prior written notice from Pacira, and at the expense of Pacira (except as otherwise provided herein), Aratana shall permit an independent certified public accountant reasonably selected by Pacira and reasonably acceptable to Aratana to inspect (during regular business hours) the relevant records required to be maintained by Aratana under this Section 5.8 for any period within the preceding [**] calendar years.  In every case the accountant must have previously entered into a confidentiality agreement with both Parties substantially similar to the provisions of Section 6 and limiting the disclosure and use of such information by such accountant to authorized representatives of the Parties and the purposes germane to this Section 5.8.  Results of any such review shall be binding on both Parties absent manifest error.  Each Party agrees to treat the results of any such accountant’s review of the other Party’s records under this Section 5.8 as Confidential Information of the other Party subject to the terms of Section 6.  If any review reveals either (i) a deficiency in the calculation and/or payment of royalties, milestones or other amounts due Pacira hereunder by Aratana or (ii) an overpayment of royalties, milestones or other payments due Pacira hereunder, then: (a) Aratana

 

18

 

shall promptly pay Pacira the amount remaining to be paid for an underpayment or take a credit towards payment of royalties for the next calendar quarter for an overpayment, and (b) if there is an underpayment exceeding [**] percent ([**]%) of any such payment, Aratana shall pay all reasonable costs and expenses incurred by Pacira in connection with the review.

 

5.8.3                    Other Parties.  Aratana shall include in any agreement with its Affiliates or Sublicensees terms requiring such party to retain records as required in this Section 5.6 and to permit Pacira to inspect such records as required by this Section 5.8.3.

 

6.                             TREATMENT OF CONFIDENTIAL INFORMATION

 

6.1                          Confidential Obligations.  Pacira and Aratana each recognize that the other Party’s Confidential Information constitutes highly valuable and proprietary confidential information.  Pacira and Aratana each agree that during the Term and for [**] years thereafter, it will keep confidential, and will cause its employees, consultants, Affiliates and Sublicensees to keep confidential, all Confidential Information of the other Party; provided, however that Aratana’s and its employees’, consultants’, Affiliates’ and Sublicensees’ obligation to keep confidential with respect to Pacira’s Know How and trade secrets related to the Licensed Product and know how related to its proprietary manufacturing drug delivery systems shall continue in perpetuity.  Neither Pacira nor Aratana nor any of their respective employees, consultants, Affiliates or Sublicensees shall use Confidential Information of the other Party for any purpose whatsoever other than exercising any rights granted to it or reserved by it hereunder.  Without limiting the foregoing, each Party may disclose information to the extent such disclosure is reasonably necessary to (a) file and prosecute patent applications and/or maintain patents which are filed or prosecuted in accordance with the provisions of this Agreement, or (b) file, prosecute or defend litigation in accordance with the provisions of this Agreement or (c) comply with applicable laws, regulations or court orders; provided, however, that if a Party is required to make any such disclosure of the other Party’s Confidential Information in connection with any of the foregoing, it will give reasonable advance notice to the other Party of such disclosure requirement and will use reasonable efforts to assist such other Party in efforts to secure confidential treatment of such information required to be disclosed.

 

6.2                          Limited Disclosure and Use.  Pacira and Aratana each agree that any disclosure of the other Party’s Confidential Information to any officer, employee, consultant or agent of the other Party or any of its Affiliates or Sublicensees shall be made only if and to the extent necessary to carry out its rights and responsibilities under this Agreement, shall be limited to the maximum extent possible consistent with such rights and responsibilities and shall only be made to the extent any such persons are bound by written confidentiality obligations to maintain the confidentiality thereof and not to use such Confidential Information except as expressly permitted by this Agreement.  Pacira and Aratana each further agree not to disclose or transfer the other Party’s Confidential Information to any Third Parties under any circumstance without the prior written approval from the other Party (such approval not to be unreasonably withheld), except as otherwise required by applicable Law, and except as otherwise expressly permitted by this Agreement.  Each Party shall take such action, and shall cause its Affiliates or Sublicensees to take such action, to preserve the confidentiality of each other’s Confidential Information as it would customarily take to preserve the confidentiality of its own Confidential Information, using, in all such circumstances, not less than prudent and reasonable care.  Each Party, upon the

 

19

 

request of the other Party, will return all the Confidential Information disclosed or transferred to it by the other Party pursuant to this Agreement, including all copies and extracts of documents and all manifestations in whatever form, within [**] calendar days of such request or, if earlier, the termination or expiration of this Agreement; provided however, that a Party may retain (a) any Confidential Information of the other Party relating to any license which expressly survives such termination and (b) one (1) copy of all other Confidential Information in inactive archives solely for the purpose of establishing the contents thereof.

 

6.3                          Public and Private Disclosure.  Neither Party may publicly disclose the existence or terms or any other matter of fact regarding this Agreement and any ancillary agreements without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed; provided, however, that either Party may make such a disclosure and provide a copy of this Agreement and any ancillary agreements (a) to the extent required by applicable Law or by the requirements of any nationally recognized securities exchange, quotation system or over-the-counter market on which such Party has its securities listed or traded or (b) in the form of the press release attached hereto as Exhibit B.  In the event that such disclosure is required as aforesaid, the disclosing Party shall make reasonable efforts to provide the other Party with notice beforehand and to coordinate with the other Party with respect to the wording and timing of any such disclosure.  The Parties, upon the execution of this Agreement, will mutually agree to a press release with respect to this transaction for publication.  Once such press release or any other written statement is approved for disclosure by both Parties, either Party may make subsequent public disclosure of the contents of such statement without the further approval of the other Party.  Notwithstanding the foregoing, either Party may disclose to a Third Party the existence or terms or any other matter of fact regarding this Agreement and any ancillary agreements and provide a copy of this Agreement and any ancillary agreements without the prior written consent of the other Party: (i) pursuant to, and in accordance with, any existing contractual obligations with such party or (b) if such Third Party is an investor or a prospective investor, purchaser, partner, lender or other potential financing source (or a representative of any of the foregoing) who is obligated in writing to keep such information confidential.

 

6.4                          Use of Name.  Neither Party shall employ or use the name of the other Party in any promotional materials or advertising without the prior express written permission of the other party.

 

7.                             PROVISIONS CONCERNING THE OWNERSHIP, FILING, PROSECUTION AND MAINTENANCE OF INTELLECTUAL PROPERTY

 

7.1                          Third Party Licensors.  The Parties agree and acknowledge that each of Pacira, RDF and OctoPlus have certain respective rights and obligations under the RDF Agreement and the OctoPlus Agreement.  The Parties agree that this Section 7 shall be subject in all respects to the applicable terms and conditions of the RDF Agreement and the OctoPlus Agreement and, in the event of any conflict between the terms of the RDF Agreement or the OctoPlus Agreement, on the one hand, and this Agreement, on the other hand, the terms of the RDF Agreement or the OctoPlus Agreement, as applicable, shall govern.

 

20

 

7.2                          Patent Filing, Prosecution and Maintenance.  Subject to the other terms of this Section 7, Pacira shall be responsible for preparing, filing, prosecuting, obtaining and maintaining, at its sole cost and expense, all Licensed Patent Rights in the Territory.

 

7.3                          Notice of Infringement.  If, during the Term, either Party learns of any actual, alleged or threatened infringement by a Third Party of any Licensed Patent Rights under this Agreement, such Party shall promptly (but no later than [**] business days) notify the other Party and shall provide such other Party with available evidence of such infringement.

 

7.4                          Infringement of Patent Rights.

 

7.4.1                    By Pacira.  Pacira shall have the first right (but not the obligation), at its own expense, to bring suit (or take other appropriate legal action) against any actual, alleged or, based on the reasonable belief of Pacira, threatened infringement or misappropriation of the Licensed Patent Rights in the Territory in the Field, or to defend an action seeking declaratory judgment filed against Pacira with respect to the Licensed Patent Rights in the Territory in the Field.  Pacira shall have sole control over the prosecution and settlement of such claims.  Aratana shall have the right, at its own expense, to be represented in any such action by Pacira by counsel of Aratana’s own choice subject to approval by Pacira.

 

7.4.2                    Infringement Suits Requested by Aratana.  Aratana shall have the right to require Pacira to sue for infringement one alleged infringer under the Licensed Patent Rights in one country of the Territory.  Pacira will choose such country at its sole discretion.  Pacira will be under no obligation to bring any other suit in any other country in the Territory with regard to the requested infringer nor will it be obligated to bring a lawsuit against any other alleged infringer in the Territory requested by Aratana during the pendency of the first lawsuit brought by Pacira at Aratana’s request under this Section 7.4.2.  Pacira shall have sole control over the initiation, conduct and settlement of such lawsuit.  Aratana shall have the right, at its own expense, to be represented in any such action by Pacira by counsel of Aratana’s own choice subject to approval by Pacira.

 

7.4.3                    Allocation of Recovery.  Any damages, monetary awards or other amounts recovered (net of any amounts due to RDF or OctoPlus), whether by judgment or settlement, pursuant to any suit, proceeding or other legal action taken under this Section 7.4, shall be applied as follows:

 

(a)                        First, to reimburse the Parties on a pro rata basis for their respective costs and expenses (including reasonable attorneys’ fees and costs) incurred in prosecuting such enforcement action; and

 

(b)                        Second, [**] percent ([**]%) to Aratana and [**] percent ([**]%) to Pacira.

 

7.4.4                    Cooperation.  If either Party brings any such action or proceeding contemplated by this Section 7.4, the other Party agrees to be joined as party plaintiff if necessary to prosecute such action or proceeding, and to give the Party bringing such action or proceeding reasonable assistance including prompt access to witnesses and documents within such other Party’s control and authority to file and prosecute the suit; provided, however, that

 

21

 

neither Party shall be required to transfer any right, title or interest in or to any property to the other Party or any Third Party to confer standing on a Party hereunder.

 

7.5                          Defense of Claims.

 

7.5.1                    Pacira shall have the first right (but not the obligation) to defend any Licensed Product Infringement Claim.  If Pacira determines to defend such Licensed Product Infringement Claim, Pacira shall have sole control over the defense and settlement of such Licensed Product Infringement Claims; provided, however, that Aratana shall be entitled in each instance to participate in an advisory capacity through counsel of its selection at its own expense.  Aratana agrees to give Pacira reasonable assistance and authority to defend the suit.  If Pacira declines to defend such Licensed Product Infringement Claim, Aratana may defend such claim; provided, however, Aratana may not settle any Licensed Product Infringement Claim without the consent of Pacria.  Any damages and costs (but exclusive of any related royalty payments which are the subject of Section 5.3.2) generated in the defense of such Licensed Product Infringement Claims by Pacira (other than costs and expenses incurred by Aratana from its participation in such claim pursuant to this Section 7.5.1, which shall be borne solely by Aratana) shall be borne [**]% by Aratana and [**]% by Pacira.

 

7.5.2                    Pacira shall have the first right (but not the obligation) to defend any Shared Infringement Claim.  If Pacira determines to defend such Shared Product Infringement Claim, Pacira shall have sole control over the defense and settlement of such Shared Infringement Claims; provided, however, that Aratana shall be entitled in each instance to participate in an advisory capacity through counsel of its selection at its own expense.  Aratana agrees to give Pacira reasonable assistance and authority to defend the suit.  Any damages and costs (but exclusive of any related royalty payments which are the subject of Section 5.3.2) generated in the defense of such Shared Infringement Claims (other than costs and expenses incurred by Aratana from its participation in such claim pursuant to this Section 7.5.2, which shall be borne solely by Aratana) shall be borne by Aratana and Pacira on a pro rata basis based on the aggregate net sales of the Licensed Product and EXPAREL® in the applicable jurisdiction of the Territory for the twelve-month period ending on the date of filing of the Shared Infringement Claim.

 

8.                             REPRESENTATIONS, WARRANTIES AND COVENANTS

 

8.1                          Representations, Warranties and Covenants.  Each Party hereby represents, warrants and covenants to the other Party as of the Effective Date, as follows:

 

8.1.1                    Such Party (i) has the power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder, and (ii) has taken all necessary action on its part required to authorize the execution and delivery of this Agreement.  This Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal, valid and binding obligation of such Party and is in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered a proceeding at law or equity.

 

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8.1.2                    Such Party is not aware of any pending or threatened litigation (and has not received any communication) that alleges that such Party’s activities related to this Agreement have violated, or that by conducting the activities as contemplated in this Agreement such Party would violate, any of the intellectual property rights of any Person (after giving effect to the license grants in this Agreement).

 

8.1.3                    All necessary consents, approvals and authorizations of all regulatory and governmental authorities and other Persons required to be obtained by such Party in connection with the execution and delivery of this Agreement and the performance of its obligations under this Agreement have been obtained (other than such consents, approvals and authorizations that the Parties will obtain in the course of performing their obligations under this Agreement).

 

8.1.4                    The execution and delivery of this Agreement the performance of such Party’s obligations hereunder (i) do not conflict with or violate in any material way any requirement of applicable Law, (ii) do not conflict with or violate any provision of the articles of incorporation, bylaws, limited partnership agreement or any similar instrument of such Party, and (iii) do not conflict with, violate, or breach or constitute a default or require any consent under, any contractual obligation or court or administrative order by which such Party is bound.

 

8.2                          Additional Representations, Warranties and Covenants of Aratana.  Aratana represents, warrants and covenants to Pacira, as of the Effective Date, that:

 

8.2.1                    Aratana (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and (ii) has full power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as it is contemplated to be conducted by this Agreement.

 

8.2.2                    Neither Aratana nor any of its Affiliates has been debarred or is subject to debarment and neither Aratana nor any of its Affiliates shall use in any capacity, in connection with the services to be performed under this Agreement, any Person who has been debarred pursuant to Section 306 of the U.S. Act (21 U.S.C 335a), or who is the subject of a conviction described in such section.  Aratana agrees to inform Pacira in writing immediately if it or any Person who is performing services on behalf of Aratana under this Agreement is debarred or is the subject of a conviction described in Section 306 of the U.S. Act, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the knowledge of Aratana, is threatened, relating to the debarment or conviction of Aratana or any Person performing services on behalf of Aratana under this Agreement.

 

8.2.3                    Aratana will use Commercially Reasonable Efforts to Develop and Commercialize the Product for the Field in the Territory.

 

8.2.4                    Aratana and its Affiliates shall launch the Licensed Product within [**] months of Regulatory Approval in the Primary Territory.

 

8.2.5                    Aratana has, or will have, the necessary financial resources available to it to consummate the transactions contemplated hereby and satisfy its obligations hereunder, in each case when and as contemplated by this Agreement.

 

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8.3                          Additional Representations, Warranties and Covenants of Pacira.  Pacira represents, warrants and covenants to Aratana, as of the Effective Date, that:

 

8.3.1                    Pacira (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and (ii) has full power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as it is contemplated to be conducted by this Agreement.

 

8.3.2                    Neither Pacira nor any of its Affiliates has been debarred or is subject to debarment and neither Pacira nor any of its Affiliates shall use in any capacity, in connection with the services to be performed under this Agreement, any Person who has been debarred pursuant to Section 306 of the U.S. Act, or who is the subject of a conviction described in such section.  Pacira agrees to inform Aratana in writing immediately if it or any Person who is performing services on behalf of Pacira under this Agreement is debarred or is the subject of a conviction described in Section 306 of the U.S. Act, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the knowledge of Aratana, is threatened, relating to the debarment or conviction of Pacira or any Person performing services on behalf of Pacira under this Agreement.

 

8.3.3                    Pacira shall pay when due any SP Royalties to SkyePharma and maintain the SkyePharma Agreement in effect as necessary to enable Aratana to exercise the rights being granted hereunder.

 

8.3.4                    Pacira owns or Controls, and has the right, power, and authority to license, the Licensed Patent Rights and Know-How to Aratana under this Agreement.

 

8.3.5                    Pacira has not granted or will grant during the term of this Agreement any license, or right of any similar nature with respect to any Licensed Patent Rights or Know-How which would conflict with the license granted to Aratana under this Agreement.

 

8.3.6                   To the knowledge of Pacira, all of the Licensed Patent Rights that have issued are valid and enforceable, and no proceeding is pending or, to the knowledge of Pacira, threatened, nor to the knowledge of Pacira has any claim been made, which challenges or challenged the legality, validity, or enforceability of any Licensed Patent Right.

 

8.3.7                    All maintenance fees, annuity payments, and similar payments relating to the Licensed Patent Rights to be made by Pacira prior to the date hereof have been made and all such payments to be made by Pacira on or after the date hereof, solely to the extent Pacira determines, in its sole discretion, that its continued payment of any such fee is warranted or desired, will be made in a timely manner during the Term; provided, however, that notwithstanding the foregoing, if Pacira exercises it right under this Section 8.3.7 to cease payment of any maintenance fees, annuity payments, or similar payments relating to the Licensed Patent Rights, Pacira will, not less than [**] calendar days prior to such non-payment, inform Aratana of such decision and upon receipt of such notice, Aratana shall have [**] calendar days to notify Pacira of its election to make such payment or to direct Pacira to make such payment and promptly reimburse Pacira for doing so (Aratana’s failure to deliver such

 

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notice to Pacira within the [**]-day period shall constitute a waiver of Aratana’s rights under this Section 8.3.7).

 

8.3.8                    To the knowledge of Pacira, Aratana’s exercise of its license rights in accordance with the terms of this Agreement will not infringe any patent or other intellectual property rights of any Third Party.

 

8.4                          Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY (AND THEIR RESPECTIVE AFFILIATES) HEREBY DISCLAIMS ANY AND ALL WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING WITH RESPECT TO ANY TECHNOLOGY LICENSED UNDER THIS AGREEMENT, INCLUDING ANY WARRANTY OF QUALITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.  FOR THE AVOIDANCE OF DOUBT, NOTHING CONTAINED IN THIS SECTION 8.4 SHALL OPERATE TO LIMIT OR INVALIDATE ANY EXPRESS WARRANTY CONTAINED HEREIN.

 

9.                             INDEMNIFICATION

 

9.1                          Indemnification.

 

9.1.1                    Aratana Indemnity.  Subject to Section 9.1.2 below, Aratana shall indemnify, defend and hold harmless Pacira, its Affiliates and their respective directors, officers, employees, stockholders and agents and their respective successors, heirs and assigns (the “Pacira Indemnitees”) from and against any liability, damage, loss or expense (including reasonable attorneys’ fees and expenses of litigation) incurred by or imposed upon such Pacira Indemnitees, or any of them, in connection with any Third Party claims, suits, actions, demands or judgments, including, without limitation, personal injury and product liability matters, to the extent arising out of (a) the Development or Commercialization of the Licensed Product by any person of or in connection with Licensed Product in the Territory sold by Aratana or any Affiliate or Sublicensee under this Agreement, (b) any material breach of this Agreement by Aratana, or (c) the gross negligence, willful misconduct or violation of applicable Law on the part of Aratana or any Affiliate or Sublicensee, in any such case under this Section 9.1.1, except to the extent of Pacira’s responsibility therefor under Section  9.1.2 below.

 

9.1.2                   Pacira Indemnity.  Subject to Section 9.1.1 above, Pacira shall indemnify, defend and hold harmless Aratana, its Affiliates and Sublicensees and their respective directors, officers, employees, and agents, and their respective successors, heirs and assigns (the “Aratana Indemnitees”), from and against any liability, damage, loss or expense (including reasonable attorneys’ fees and expenses of litigation) incurred by or imposed upon such Aratana Indemnitees, or any of them, in connection with any Third Party claims, suits, actions, demands or judgments, including, without limitation, personal injury and product liability matters (but excluding any patent infringement matters, which are governed by Section 7 above), to the extent arising out of (a) any material breach of this Agreement by Pacira or (b) the gross negligence, willful misconduct or violation of applicable Law on the part of Pacira, in any such case under this Section 9.1.2, except to the extent of Aratana’s or any Affiliate’s or Sublicensee’s responsibility therefor under Section  9.1.1 above.

 

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9.2                          Indemnification Procedures.  In the event that any Indemnitee is seeking indemnification under Section 9.1 above from a Party (the “Indemnifying Party”), the other Party shall notify the Indemnifying Party of such claim with respect to such Indemnitee as soon as reasonably practicable after the Indemnitee receives notice of the claim, and the Party (on behalf of itself and such Indemnitee) shall permit the Indemnifying Party to assume direction and sole control of the defense of the claim (including the right to settle the claim solely for monetary consideration) and shall cooperate as requested (at the expense of the Indemnifying Party) in the defense of the claim.  The indemnification obligations under Section 9 shall not apply to any harm suffered as a direct result of any delay in notice to the Indemnifying Party hereunder or to amounts paid in settlement of any claim, demand, action or other proceeding if such settlement is effected without the consent of the Indemnifying Party, which consent shall not be withheld or delayed unreasonably.  The Indemnitee, its employees and agents, shall reasonably cooperate with the Indemnifying Party and its legal representatives in the investigation of any claim, demand, action or other proceeding covered by Section 9.1.

 

9.3                          Insurance.

 

9.3.1                   Pacira Insurance.  In the event Aratana obtains insurance pursuant to Section 9.3.2 below, Pacira shall thereafter, during the remainder of the Term and for a period of [**] years after the expiration date of the last unit of Licensed Product sold by Aratana, maintain a policy of product liability insurance for the Product insuring against personal injury, death and damage to property.  The said policy shall have a liability limit of not less than [**] U.S. dollars ($[**]) per occurrence and in the aggregate, and shall be maintained with a financially sound and reputable insurer.  If the above required insurance policy is written on a claims made basis, such policy must include a provision for an extended reporting period of not less than [**] months.  Pacira will provide [**] calendar days written notice to Aratana prior to any cancellation.  Pacira shall, within [**] calendar days from the date of obtaining insurance coverage, furnish to Aratana a certificate of insurance evidencing the foregoing coverage.

 

9.3.2                    Aratana Insurance.  Aratana shall to the extent available, during the Term and for a period of [**] years after the expiration date of the last unit of Licensed Product sold by Aratana, maintain a policy of product liability insurance for the Licensed Product insuring against personal injury, death and damage to property.  The said policy shall have a liability limit of not less than [**] U.S. dollars ($[**]) per occurrence and in the aggregate, and shall be maintained with a financially sound and reputable insurer.  If the above required insurance policy is written on a claims made basis, such policy must include a provision for an extended reporting period of not less than [**] months.  Aratana shall provide [**] calendar days’ written notice to Pacira prior to any cancellation.  Aratana shall, within [**] calendar days from the date of obtaining insurance coverage furnish to Pacira a certificate of insurance evidencing the foregoing coverage.

 

9.4                          Survival.  The indemnification obligations set forth in this Section 9 shall survive the termination of this Agreement and remain in full force and effect for an indefinite period after termination in relation to any claim based on events which occur during the Term.

 

9.5                          Limitation of Liability.  Except in the event of a Party’s fraud, gross negligence or willful misconduct or a breach by Aratana (or any of its Affiliates or Sublicensees)

 

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of any exclusivity or confidentiality obligations under this Agreement, in no event shall either Party be liable to compensate the other Party for any indirect, incidental, punitive, special or consequential damages, including, without limitation, loss of anticipated profits, loss of time, or loss of opportunity, in connection with this Agreement or any breach thereof, and whether any such loss or damage may be based upon principles of contract, warranty, negligence or other tort, the failure of any limited or exclusive remedy to achieve its essential purpose, or for any other reason whatsoever.

 

10.                      TERM AND TERMINATION

 

10.1                   Term.  This Agreement shall commence on the Effective Date and unless terminated earlier in accordance with the provisions hereof shall continue for a period of fifteen (15) years (“Initial Term”).  Upon expiration, provided that Aratana is not in any material breach of its obligations or any condition, representation, warranty or covenant under this Agreement or the Supply Agreement, Aratana shall have the option to renew this Agreement (subject to the provisions of Section 10.2.6) for a single five (5) year term (the “Renewal Term”) upon written notice to Pacira no later than six (6) months prior to the end of the Initial Term.  The Initial Term and the Renewal Term, if applicable, are referred to herein as the “Term.”

 

10.2                    Termination Rights.

 

10.2.1             Termination for Breach.  Subject to the other terms of this Agreement, this Agreement and the rights and options granted herein may be terminated by either Party upon any material breach by the other Party of any material obligation or condition, representation, warranty or covenant effective [**] calendar days after giving written notice to the breaching Party which notice shall describe such breach in reasonable detail.  The foregoing notwithstanding, if such default or breach is cured or remedied or shown to be non-existent within the aforesaid [**] day period the notice shall be automatically withdrawn and of no effect.  If the Parties agree in writing, the [**] day period may be extended.  However, prior to giving any notice of termination for breach, the Parties shall first attempt to resolve any disputes as to the existence of any breach as set forth in Section 11.

 

10.2.2             Termination for Non-Payment.  Pacira may terminate this Agreement on thirty (30) calendar days’ written notice to Aratana upon the failure of Aratana to pay any amounts due hereunder.

 

10.2.3             Termination upon Termination of the Supply Agreement.  This Agreement shall automatically terminate upon Pacira’s termination of the Supply Agreement in accordance with the terms thereof.

 

10.2.4             Termination for Failure to Receive Regulatory Approval.  Pacira may terminate this Agreement (i) with respect to the United States and each country in the European Union, on a county-by-country basis on thirty (30) calendar days’ written notice in the event Aratana does not obtain Regulatory Approval for the Licensed Product in such country within [**] years of the Effective Date, or (ii) with respect to jurisdictions other than the United States and European Union (the “Other Jurisdictions”) on a country by country basis on thirty (30)

 

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calendar days’ written notice; if Aratana has not commenced Development and dosed its first patient/subject in support of obtaining Regulatory Approval for the Licensed Product in the Other Jurisdictions within [**] years of the Effective Date.

 

10.2.5             Termination for Failure to Achieve the First Commercial Sale Within Six (6) Months of Regulatory Approval.  Pacira may terminate this Agreement on sixty (60) calendar days’ written notice to Aratana with respect to any jurisdiction in the Territory on a country by country basis in the event Aratana or its Sublicensee fails to achieve the First Commercial Sale of the Licensed Product within [**] months of receipt of Regulatory Approval in such jurisdiction.

 

10.2.6            Termination for Failure to Achieve Minimum Annual Revenue.  Either Party may terminate this Agreement on thirty (30) calendar days’ written notice to the other Party in the event that Aratana and/or its Sublicensees fail to achieve sufficient Net Sales to provide to Pacira annual revenue of not less than U.S. $[**] (the “Minimum Annual  Revenue”) under this Agreement by the [**] year following First Commercial Sale of the Licensed Product and each year thereafter, provided, however, that should Pacira exercise its right to terminate under this Section 10.2.6, Aratana shall have the option to pay Pacira an additional “make-whole” payment to satisfy the Minimum Annual Revenue within [**] calendar days of its receipt of Pacira’s notice of termination, in which case such payment shall negate Pacira’s ability to terminate the Agreement under this Section 10.2.6 solely with respect to the failure to achieve the Minimum Annual Revenue for such year.  Should Aratana exercise its right to extend the Term, the Parties shall work in good faith to renegotiate the Minimum Annual Revenue taking into consideration the global sales of the Licensed Product.  The revised Minimum Annual Revenue amount shall be agreed upon within [**] calendar days prior to the commencement of the Renewal Term.

 

10.2.7             Termination for Bankruptcy.  In the event that either Party files for protection under bankruptcy laws, makes an assignment for the benefit of creditors, appoints or suffers appointment of a receiver or trustee over its property, files a petition under any bankruptcy or insolvency act or has any such petition filed against it which is not discharged within sixty (60) calendar days of the filing thereof, then the other Party may terminate this Agreement effective immediately upon written notice to such Party.

 

10.2.8             Termination by Right.  Following Generic Intrusion in the Territory by a Third Party, Aratana may terminate this Agreement on a country by country basis, as the intrusion in such country occurs, with ninety (90) calendar days’ written notice to Pacira.

 

10.2.9             Termination by Mutual Consent.  This Agreement may be terminated upon mutual consent of the Parties.

 

10.2.10      Voluntary Termination by Aratana.  Aratana may terminate this Agreement or any of the licenses granted under this Agreement, on a country-by-country basis within the Territory, at any time and without specifying a reason therefor, in each case on thirty (30) calendar days’ written notice to Pacira; provided, however, that the foregoing termination right shall not apply to the United States or any country in the European Union.

 

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10.3         Effects of Termination.  Upon any termination of this Agreement pursuant to Section 10.2, on a jurisdiction-by-jurisdiction basis, as of the effective date of such termination, all licenses granted to Aratana hereunder in such jurisdiction shall terminate and all rights to the Licensed Product and the Licensed Patent Rights and Know-How in such jurisdiction (in each case to the extent not applicable to ongoing licenses in non-terminated jurisdictions) shall be returned to Pacira, provided, however, that:

 

10.3.1             Aratana shall retain, for a period of [**] calendar days from the effective date of expiration or termination, a nonexclusive license to the Licensed Patent Rights and Know-How as necessary to sell off any Licensed Product in inventory or on order as of the effective date of such termination or expiration (and Aratana shall pay Pacira any Royalty Payments due with respect to such sales);

 

10.3.2             Neither Party shall be under any further obligation to the other in relation to the Licensed Product in the Territory provided, however that Pacira shall fulfill, and Aratana shall pay for, any Purchase Order placed by Aratana under the Supply Agreement and accepted by Pacira prior to the effective date of termination of this Agreement;

 

10.3.3             Aratana shall forthwith make all payments due to Pacira (including any Royalty Payments with respect to the period prior to the effective date of termination and the period during which Aratana’s sell-off rights under Section 10.3.1 above ends);

 

10.3.4             Neither Party shall have any rights in relation to the Confidential Information of the other Party.  Each Party shall return to the other Party all of the other Party’s Confidential Information and copies thereof (whatever the format) except for copies that must be retained in order to comply with applicable Laws, which information may be retained, but only for so long as required and subject to the confidentiality obligations herein; and

 

10.3.5             Aratana shall (and shall cause its Affiliates and Sublicensees to): (i) assign or re-assign, as applicable, to vest in Pacira all right, title and interest in all Regulatory Approvals and Drug Approval Applications for the Licensed Product in all respects (upon which Aratana shall have no further rights of any nature with respect to such Regulatory Approvals and Drug Approval Applications); (ii) assign (or, if a non-owned asset or right, exclusively license) to Pacira all rights to any intellectual property or know-how Controlled by Aratana or its Affiliates or Sublicensees with respect to the Licensed Product; (iii) deliver to Pacira all files and documents relating to any of the foregoing and/or containing any product information including any clinical data, protocols and other documents related to the Development or Commercialization of the Licensed Product; and (iv) reasonably cooperate with Pacira to ensure the smooth transition of the marketing, distribution and sale of the Licensed Product in the Territory to Pacira or its designee.

 

10.4                   Remedies.  Except as otherwise expressly set forth in this Agreement, the termination provisions of this Section 10 are in addition to any other relief and remedies available to either Party at law.

 

10.5                   Surviving Provisions.  Other than Section 10.2 herein, notwithstanding any provision herein to the contrary, the rights and obligations of the Parties set forth in Sections 6, 7

 

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and 9 as well as any rights or obligations otherwise accrued hereunder (including any accrued payment obligations), shall survive the expiration or termination of the Term.  Without limiting the generality of the foregoing, Aratana shall have no obligation to make any milestone or royalty payment to Pacira that has not accrued prior to the effective date of any termination of this Agreement, but shall remain liable for all such payment obligations accruing prior to the effective date of such termination and any milestone payment which becomes due as a result of the sell-off period provided under Section 10.3.1 above.

 

11.                      DISPUTES

 

11.1                   Negotiation.  The Parties recognize that a bona fide dispute as to certain matters may from time to time arise during the Term that relates to either Party’s rights and/or obligations hereunder.  In the event of the occurrence of such a dispute (other than a claim for non-payment under  ̈Section 10.2.2), either Party may, by written notice to the other Party, have such dispute referred to their respective senior officials designated below or their successors, for attempted resolution by good faith negotiations within [**] calendar days after such notice is received.  Said designated senior officials are as follows:

 

For Aratana:                                  Chief Executive Officer, or its designee

 

For Pacira:                                             Chief Executive Officer, or its designee

 

In the event the designated senior officials are not able to resolve such dispute within the [**] day period, either Party may invoke the provisions of Section 11.2.  Failure to invoke Section 11.2 may cause the Agreement to be subject to an assertion of termination.

 

11.2                   Arbitration.  Subject to Section 11.1, any dispute, controversy or claim initiated by either Party arising out of, resulting from or relating to this Agreement, or the performance by either Party of its obligations under this Agreement (other than bona fide Third Party actions or proceedings filed or instituted in an action or proceeding by a Third Party against a Party), whether before or after termination of this Agreement, shall be finally resolved by binding arbitration.  Whenever a Party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other Party.  Any such arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association by a panel of three arbitrators appointed in accordance with such rules with the arbitration taking place in New Jersey.  The method and manner of discovery in any such arbitration proceeding shall be governed by the laws of the State of New Jersey.  The arbitrators shall have the authority to grant injunctions and/or specific performance and to allocate between the parties the costs of arbitration in such equitable manner as they determine.  Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be.  In no event shall a demand for arbitration be made after the date when institution of a legal or equitable proceeding based upon such claim, dispute or other matter in question would be barred by the applicable statute of limitations.  Notwithstanding the foregoing, either Party shall have the right, without waiving any right or remedy available to such Party under this Agreement or otherwise, to seek and obtain from any court of competent jurisdiction any interim or provisional relief that is necessary or desirable to protect the rights or property of such Party, pending the selection of

 

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the arbitrators hereunder or pending the arbitrators’ determination of any dispute, controversy or claim hereunder.

 

12.                      MISCELLANEOUS

 

12.1                   Notification.  All notices, requests and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth below or to such other address as a party may designate by notice hereunder, and shall be either (i) delivered by hand, (ii) made by facsimile transmission (to be followed with written confirmation by overnight courier providing evidence of receipt), (iii) sent by overnight courier providing evidence of receipt, or (iv) sent by registered or certified mail, return receipt requested, postage prepaid.  The addresses and other contact information for the parties are as follows:

 

	
If to   Pacira:
    	
 
    	
Pacira   Pharmaceuticals, Inc.

5   Sylvan Way

Parsippany,   NJ 07054

Attn:   David Stack, CEO

Facsimile   No.: [**]

Telephone   No.: [**]

Email:   [**]
    
	
 
    	
 
    	
 
    
	
With a   copy to:
    	
 
    	
Pacira   Pharmaceuticals, Inc.

5   Sylvan Way

Parsippany,   NJ 07054

Attn:   Corporate Counsel

Facsimile   No.: (973) 267-0050

Email:   Contracts@Pacira.com
    
	
 
    	
 
    	
 
    
	
If to   Aratana:
    	
 
    	
Aratana   Therapeutics, Inc.

901   Olathe Blvd

Kansas   City, KS 66103

ATTN:   Steven St. Peter

Facsimile   No. (913) 904-9641:

Telephone   No.: (913) 951-2133

Email:   sstpeter@aratanarx.com
    

 

All notices, requests and other communications hereunder shall be deemed to have been delivered upon receipt.

 

12.2                   Language.  This Agreement has been prepared in the English language and the English language shall control its interpretation.

 

12.3                   Governing Law.  This Agreement will be construed, interpreted and applied in accordance with the laws of the State of New Jersey, excluding its conflict of law rules.

 

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12.4                   Limitations.  Except as expressly set forth in this Agreement, neither Party grants to the other Party any right or license to any of its intellectual property.

 

12.5                   Entire Agreement.  This is the entire Agreement between the Parties with respect to the subject matter hereof and supersedes all prior representations, understandings and agreements between the Parties with respect to the subject matter hereof.  No modification shall be effective unless in writing with specific reference to this Agreement and signed by the Parties.

 

12.6                   Waiver.  The terms or conditions of this Agreement may be waived only by a written instrument executed by the Party waiving compliance.  The failure of either Party at any time or times to require performance of any provision hereof shall in no manner affect its rights at a later time to enforce the same.  No waiver by either Party of any condition or term shall be deemed as a continuing waiver of such condition or term or of another condition or term.

 

12.7                   Headings.  Section and subsection headings are inserted for convenience of reference only and do not form part of this Agreement.

 

12.8                   Assignment.  Neither this Agreement nor any right or obligation hereunder may be assigned, delegated or otherwise transferred, in whole or part, by Aratana without the prior express written consent of Pacira, except with respect to a transfer to Affiliate or pursuant to a sale of substantially all of the assets of Aratana.  The terms and conditions of this Agreement shall be binding upon and inure to the benefit of the permitted successors and assigns of the parties. Any transfer by Aratana other than in accordance with the terms hereof shall be void and shall entitle Pacira to immediately terminate this Agreement.

 

12.9                   Force Majeure.  Neither Party shall be liable for failure of or delay in performing obligations set forth in this Agreement, and neither shall be deemed in breach of its obligations, if such failure or delay is due to natural disasters or any causes beyond the reasonable control of such Party.  In event of such force majeure, the Party affected thereby shall use reasonable efforts to cure or overcome the same and resume performance of its obligations hereunder.

 

12.10            Construction.  The Parties hereto acknowledge and agree that:  (i) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (ii) the rule of construction to the effect that any ambiguities are resolved against the drafting Party shall not be employed in the interpretation of this Agreement; and (iii) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto and not in favor of or against any Party, regardless of which Party was generally responsible for the preparation of this Agreement.

 

12.11            Severability.  If any provision(s) of this Agreement are or become invalid, are ruled illegal by any court of competent jurisdiction or are deemed unenforceable under then current applicable Law from time to time in effect during the License Term, it is the intention of the Parties that the remainder of this Agreement shall not be affected thereby provided that a Party’s rights under this Agreement are not materially affected.  The Parties hereto covenant and agree to renegotiate any such term, covenant or application thereof in good faith in order to provide a reasonably acceptable alternative to the term, covenant or condition of this Agreement

 

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or the application thereof that is invalid, illegal or unenforceable, it being the intent of the Parties that the basic purposes of this Agreement are to be effectuated.

 

12.12            Status.  Nothing in this Agreement is intended or shall be deemed to constitute a partner, agency, employer-employee, or joint venture relationship between the Parties.

 

12.13            Section 365(n).  All licenses granted under this Agreement are deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to “intellectual  property” as defined in Section 101 of such Code.  The Parties agree that Aratana may fully exercise all of its rights and elections under the U.S. Bankruptcy Code, regardless of whether either Party files for bankruptcy in the United States or other jurisdiction.  The Parties further agree that, in the event Aratana elects to retain its rights as a licensee under such Code, Aratana shall be entitled to complete access to any technology licensed to it hereunder and all embodiments of such technology.  Such embodiments of the technology shall be delivered to Aratana not later than: (a) the commencement of bankruptcy proceedings against Pacira, upon written request, unless Pacira elects to perform its obligations under the Agreement, or (b) if not delivered under clause (a) of this Section 12.13, upon the rejection of this Agreement by or on behalf of Aratana, upon written request.

 

12.14            Export Compliance.  Aratana and its Affiliates and Sublicensees shall comply with all United States laws and regulations controlling the export of certain commodities and technical data, including without limitation all Export Administration Regulations of the United States Department of Commerce.  Among other things, these laws and regulations prohibit or require a license for the export of certain types of commodities and technical data to specified countries.  Aratana hereby gives written assurance that it will comply with, and will cause its Affiliates and Sublicensees to comply with, all United States export control laws and regulations, that it bears sole responsibility for any violation of such laws and regulations by itself or its Affiliates or Sublicensees, and that it will indemnify, defend, and hold Aratana harmless (in accordance with Section 9) for the consequences of any such violation.

 

12.15            Further Assurances.  Each Party agrees to execute, acknowledge and deliver such further instructions, 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.

 

12.16             Counterparts.  This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, each of the Parties have caused this Exclusive License, Development and Commercialization Agreement to be executed by its duly authorized representative as of the Effective Date.

 

	
 
    	
 
    
	
PACIRA PHARMACEUTICALS, INC.:
    	
ARATANA THERAPEUTICS, INC.:
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   David Stack
    	
 
    	
By:
    	
/s/   Steven St. Peter
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
David   Stack
    	
 
    	
Name:
    	
Steven   St. Peter
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
President,   CEO
    	
 
    	
Title:
    	
President
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
December 5,   2012
    	
 
    	
Date:
    	
12/5/2012
    

 

34

 

SCHEDULE 1.35

 

LICENSED PATENTS

 

See attached

 

 

EXPAREL PATENTS

 

	
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2

 

	
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3

 

SCHEDULE 1.36

 

LICENSED PRODUCT

 

DepoBupivacaineTM Extended Release Liposome Injection

 

 

EXHIBIT A

 

Form of Initial Supply Agreement

 

Incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

 

2

 

EXHIBIT B

 

Form of Press Release

 

FOR IMMEDIATE RELEASE

 

Pacira Pharmaceuticals, Inc. and Aratana Therapeutics Inc. Enter into Global Licensing Agreement for Development and Commercialization of Bupivacaine Liposome Injectable Suspension for Animal Health Indications

 

PARSIPPANY, N.J. and KANSAS CITY, Kan., December 6, 2012 — Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX) and Aratana Therapeutics Inc. today announced a global licensing agreement for the development and commercialization of bupivacaine liposome injectable suspension for animal health indications. Under the agreement, Aratana will develop and seek approval for the use of the product in veterinary surgery to manage postsurgical pain, focusing initially on developing the product for cats, dogs and other companion animals.

 

Bupivacaine liposome injectable suspension is approved for human use in the United States for the management of postsurgical pain and is currently marketed by Pacira under the name EXPAREL®. EXPAREL is a non-opioid local anesthetic, which was approved by the U.S. Food and Drug Administration (FDA) in October 2011 for administration into the surgical site to produce postsurgical analgesia. EXPAREL utilizes DepoFoam®, a proprietary delivery technology utilized in several Pacira products approved for human use. Veterinary development of the product may address the estimated 33 million surgical procedures performed each year on companion animals in the U.S.(1)

 

Steven St. Peter, M.D., chief executive officer of Aratana Therapeutics, stated, “Given the rapid and widespread implementation of EXPAREL by surgeons performing human procedures, we are confident that adoption of this innovative product by veterinary surgeons will be equally impressive. The global companion animal health market remains significantly underserved despite the more than 150 million companion animals in the U.S.(2) — many of whom will undergo surgical procedures. We believe this product fits nicely into our growing portfolio of companion animal therapeutics and will be welcomed by veterinarians committed to providing their patients with the best care available.”

 

“The management of postsurgical pain in animal health settings represents a large and growing market for our EXPAREL product,” said David Stack, president and chief executive officer of Pacira. “We continue to see EXPAREL adoption in a wide range of surgical settings, the generation of positive Phase 4 data and considerable sales growth during our launch year. We also have recently completed the installation of our expanded manufacturing suite — these milestones all strongly position the program for a strategic partnership. Given the Aratana team’s combined decades of veterinary drug development experience, we believe Aratana is the ideal partner for maximizing the product’s value in the companion animal health market.”

 

Under the agreement, Aratana made a one-time payment to Pacira of $1 million and will pay additional development and commercial milestones totaling up to $42.5 million. In addition, upon approval of the product by the FDA, Aratana will pay Pacira a double-digit royalty on net sales of

 

 

the product.  Should Aratana sublicense the product to a third party, Aratana and Pacira will share the proceeds by a predetermined formula (after Aratana has recovered certain direct development costs).  Pacira will be responsible for all product manufacturing, and Pacira and Aratana will form a joint committee to oversee commercialization and development activities.

 

About Pacira

 

Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX) is an emerging specialty pharmaceutical company focused on the clinical and commercial development of new products that meet the needs of acute care practitioners and their patients. The company’s current emphasis is the development of non-opioid products for postsurgical pain control, and its lead product, EXPAREL® (bupivacaine liposome injectable suspension), was commercially launched in the United States in April 2012. EXPAREL and two other products have utilized the Pacira proprietary product delivery technology DepoFoam®, a unique platform that encapsulates drugs without altering their molecular structure and then releases them over a desired period of time. Additional information about Pacira is available at http://www.pacira.com.

 

About Aratana Therapeutics

 

Aratana Therapeutics is a biopharmaceutical company positioned to deliver high quality new medicines that address significant therapeutic needs for cats and dogs (companion animals).  Aratana licenses and develops proprietary, patent-protected compounds acquired from human pharmaceutical and biotechnology companies and then maximizes the value of the programs for the animal health market.  For more information, please visit www.aratanatherapeutics.com.

 

Forward Looking Statements

 

Any statements in this press release about our future expectations, plans and prospects, including statements about our plans to develop and commercialize a bupivacaine liposome injectable suspension product for animal health indications, the size of the market for such a product and the level and rate of adoption for such a product and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks relating to: the attainment of all necessary regulatory approvals for the marketing of any product developed under the Aratana license agreement; the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL; the rate and degree of market acceptance of EXPAREL; the size and growth of the potential markets for EXPAREL and our ability to serve those markets; our commercialization and marketing capabilities; and other factors discussed in the “Risk Factors” of our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2011, our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, and in other filings that we periodically make with the SEC. In addition, the forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

 

(1) Small Animal and Equine Veterinary Surveys Regarding Surgical Procedures and Local Anesthetic Use (2008). Brakke Consulting, Inc., Dallas, TX.  Prepared for Pacira Pharmaceuticals, Inc.

 

2

 

(2) American Veterinary Medical Association (2011). www.avma.org

 

*EXPAREL is a registered trademark of Pacira Pharmaceuticals, Inc.

 

For Pacira Pharmaceuticals, Inc.

James S. Scibetta, 973-254-3570

or

Media Contact:

Pure Communications, Inc.

Susan Heins, 864-286-9597

 

For Aratana Therapeutics Inc.

Investors & Media:

Joshua Drumm, Ph.D. / Andrew Mielach

Tiberend Strategic Advisors, Inc.

(212) 827-0020

jdrumm@tiberend.com

amielach@tiberend.com

 

3

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