Document:

Unassociated Document

Exhibit 4.16

 

CONFIDENTIAL MATERIAL OMITTED AND FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

 

 

 

 

ASSET PURCHASE AGREEMENT

 

by and between

 

GALENA BIOPHARMA, INC.

 

and

 

MIDATECH PHARMA PLC

 

DECEMBER 17, 2015

 

  

  

  

CONFIDENTIAL MATERIAL OMITTED AND FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

 

TABLE OF CONTENTS

 

	 	
Page

	 	 
	
ARTICLE I DEFINITIONS

	
1

	  	
Section 1.01

	
Definitions.

	
1

	  	
Section 1.02

	
Interpretation

	
9

	
ARTICLE II PURCHASE AND SALE OF ACQUIRED ASSETS

	
10

	  	
Section 2.01

	
Purchase and Sale.

	
10

	  	
Section 2.02

	
Assumed Liabilities

	
11

	  	
Section 2.03

	
Excluded Liabilities

	
12

	  	
Section 2.04

	
No Offset

	
13

	
ARTICLE III CLOSING

	
13

	  	
Section 3.01

	
Closing.

	
13

	  	
Section 3.02

	
Purchase Price

	
14

	  	
Section 3.03

	
Net Sales Milestone Payments

	
15

	  	
Section 3.04

	
Inventory Adjustment.

	
16

	
ARTICLE IV CONDITIONS TO CLOSING

	
17

	  	
Section 4.01

	
Conditions to Obligations of Purchaser

	
17

	  	
Section 4.02

	
Conditions to Obligation of Seller

	
18

	  	
Section 4.03

	
Frustration of Closing Conditions

	
19

	
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER

	
19

	  	
Section 5.01

	
Organization; Authority

	
19

	  	
Section 5.02

	
No Conflicts; Consents.

	
20

	  	
Section 5.03

	
Acquired Assets.

	
20

	  	
Section 5.04

	
Intellectual Property.

	
21

	  	
Section 5.05

	
Transferred Contracts

	
22

	  	
Section 5.06

	
Litigation

	
22

	  	
Section 5.07

	
Brokers or Finders

	
22

	  	
Section 5.08

	
Tax Matters.

	
22

	  	
Section 5.09

	
Product Liability

	
23

	  	
Section 5.10

	
Inventory

	
24

	  	
Section 5.11

	
Compliance with Law

	
24

	  	
Section 5.12

	
Permits

	
24

	  	
Section 5.13

	
Regulatory Matters.

	
24 

	  	
Section 5.14

	
Solvency

	
26

	  	
Section 5.15

	
Financial Statements

	
26

	  	
Section 5.16

	
Material Information

	
26

	
ARTICLE VI COVENANTS OF SELLER

	
26

	  	
Section 6.01

	
Access

	
26

	  	
Section 6.02

	
Other Covenants

	
26

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

	  	
Section 6.03

	
Payment of Indebtedness

	
27

	  	
Section 6.04

	
Exclusivity

	
27

	  	
Section 6.05

	
Inventory

	
27

	  	
Section 6.06

	
SEC Reports

	
27

	  	
Section 6.07

	
Competing Product

	
28

	
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER

	
28

	  	
Section 7.01

	
Authority

	
28

	  	
Section 7.02

	
No Conflicts; Consents.

	
28

	  	
Section 7.03

	
Litigation

	
29

	  	
Section 7.04

	
Availability of Funds

	
29

	  	
Section 7.05

	
Brokers or Finders

	
29

	
ARTICLE VIII COVENANTS OF PURCHASER

	
30

	  	
Section 8.01

	
Advise Seller

	
30

	  	
Section 8.02

	
Records.

	
30

	  	
Section 8.03

	
DISCLAIMER

	
30

	
ARTICLE IX MUTUAL COVENANTS

	
31

	  	
Section 9.01

	
Efforts.

	
31

	  	
Section 9.02

	
Bulk Transfer Laws

	
31

	  	
Section 9.03

	
Transfer Taxes

	
31

	  	
Section 9.04

	
Purchase Price Allocation.

	
32

	  	
Section 9.05

	
Recordation of Transferred Intellectual Property

	
32

	  	
Section 9.06

	
Confidentiality and Confidential Information.

	
32

	  	
Section 9.07

	
NDC, UPC, Excluded Trademarks and Seller Names.

	
34

	  	
Section 9.08

	
Channel Liabilities

	
35

	  	
Section 9.09

	
Adverse Experience Reports

	
37

	  	
Section 9.10

	
Response to Medical Inquiries and Products Complaints

	
37

	  	
Section 9.11

	
Recall

	
37

	  	
Section 9.12

	
Post-Closing Orders and Payments.

	
37

	  	
Section 9.13

	
Notification of Customers

	
38

	  	
Section 9.14

	
Assistance with Purchaser Regulatory Filings; Transfer of NDAs.

	
38

	
ARTICLE X INDEMNIFICATION

	
39

	  	
Section 10.01

	
Indemnification by Seller

	
39

	  	
Section 10.02

	
Indemnification by Purchaser

	
39

	  	
Section 10.03

	
Indemnification Procedure.

	
40

	  	
Section 10.04

	
Procedures Related to Indemnification for Other Claims

	
41

	  	
Section 10.05

	
Losses Net of Insurance, Tax Benefits

	
41

	  	
Section 10.06

	
Limitation on Indemnification.

	
41

	  	
Section 10.07

	
Termination of Indemnification.

	
42

	  	
Section 10.08

	
Tax Treatment of Indemnification Payments

	
43

	  	
Section 10.09

	
No Setoff

	
43

	  	
Section 10.10

	
No Double Recovery

	
43

	ARTICLE XI TERMINATION	
 43

 

  

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Section 11.01

	
Termination

	
43

	  	
Section 11.02

	

Return of Confidential Information

	
44

	  	
Section 11.03

	
Effect of Termination

	
45

	
ARTICLE XII MISCELLANEOUS

	
45

	  	
Section 12.01

	
Assignment

	
45

	  	
Section 12.02

	
Non-Waiver

	
45

	  	
Section 12.03

	
No Third-Party Beneficiaries

	
45

	  	
Section 12.04

	
Severability

	
46

	  	
Section 12.05

	
Entire Agreement; Amendments

	
46

	  	
Section 12.06

	
Notices

	
46

	  	
Section 12.07

	
Public Announcements

	
47

	  	
Section 12.08

	
Governing Law; Forum

	
48

	  	
Section 12.09

	
WAIVER OF JURY TRIAL

	
48

	  	
Section 12.10

	
Expenses

	
49

	  	
Section 12.11

	
Relationship of the Parties

	
49

	  	
Section 12.12

	
Counterparts

	
49

 

  

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Exhibits

 

	
Exhibit 2.01(a)(i)

	
-

	
Transferred Intellectual Property

	
Exhibit 2.01(a)(ii)

	
-

	
Transferred FDA Permits

	
Exhibit 2.01(a)(iv)

	
-

	
Transferred Contracts

	
Exhibit 2.01(a)(v)

	
-

	
Inventory

	
Exhibit 3.01(b)(ii)

	
-

	
Form of Bill of Sale

	
Exhibit 3.01(b)(iii)

	
-

	
Form of Assignment and Assumption Agreement

 

Schedules

 

	
Schedule 4.01(f)

	
-

	
MonoSol License Agreement Amendment

	
Schedule 4.01(h)

	
-

	
Closing Consents

	
Schedule 5.02(a)

	
-

	
Third Party Consents

	
Schedule 5.02(a)

	
-

	
Governmental or Regulatory Approvals

	
Schedule 5.03

	-	
Retained Assets

	
Schedule 5.05

	-	
Transferred Contracts

	
Schedule 5.12

	-	
Permits

 

  

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of December 17, 2015, is made by and between GALENA BIOPHARMA, INC., a Delaware corporation (“Seller”), and MIDATECH PHARMA PLC, a public limited company organized under the laws of England and Wales with registered number 09216368 (“Purchaser”).  Seller and Purchaser are sometimes individually referred to herein as a “Party” and are sometimes collectively referred to herein as the “Parties”.  Capitalized terms not otherwise defined in the text of this Agreement shall have the meanings set forth in Article I of this Agreement.

 

WITNESSETH:

 

WHEREAS, Seller is the licensee of certain patents and know-how relating to the proprietary product for anti-emetic treatment marketed as Zuplenz® in the United States that contains ondansetron as its sole active ingredient and is approved under its product NDA (“Zuplenz” and also referred to herein as the “Product”);

 

WHEREAS, Seller desires to sell, and Purchaser desires to purchase from Seller, certain assets of Seller related exclusively to Zuplenz in the Territory, upon the terms and subject to the conditions set forth in this Agreement; and

 

WHEREAS, Seller desires to assign, and Purchaser desires to assume from Seller, certain contracts of Seller relating exclusively to Zuplenz in the Territory, upon the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants herein set forth, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01           Definitions.

 

(a)           For purposes of this Agreement, the following terms shall have the corresponding meanings set forth below:

 

“Acquisition” means the consummation of the transactions contemplated by this Agreement and the Other Acquisition Documents.

 

“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person; and for the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

  

  

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

“Business Day” means a day other than Saturday or Sunday or a day on which banks in London, England or the State of Delaware are required to be closed.

 

“Closing Consideration” means $3,750,000.

 

“Closing Date Inventory” means the quantities of Inventory as of the Closing Date.

 

“Code” means the United States Internal Revenue Code of 1986, as amended.

 

“Competing Product” means any oral soluble film product indicated for chemotherapy induced nausea and vomiting, radiotherapy induced nausea and/or vomiting or post-operative nausea and vomiting.

 

“Confidential Information” shall have the meaning set forth in the Confidentiality Agreement.

 

“Confidentiality Agreement” means that certain Mutual Confidential Disclosure Agreement between the Parties dated October 8, 2015.

 

“Contracts” means all leases (whether for real or personal property), subleases, indentures, licenses, agreements, contracts, subcontracts, purchase orders, instruments, notes, options, warranties, commitments and all other legally binding arrangements, whether written or oral.

 

“Dollars” and “$” mean lawful currency of the United States of America.

 

“Excluded Trademarks” shall mean, whether registered or unregistered, all trademarks, trade dress, service marks, service names, brand marks, trade names, brand names, logos, business symbols, slogans or other designations of origin and all registrations, registration applications and rights relating thereto, other than the trademarks included in the Transferred Intellectual Property.

 

“FDA” means the United States Food and Drug Administration.

 

“FDA Act” means the United States Federal Food, Drug and Cosmetic Act of 1938, as amended.

 

“Final Closing Date Inventory” means Closing Date Inventory (i) as shown in Purchaser’s calculation delivered pursuant to Section 3.04(a) if no notice of disagreement with respect thereto is duly delivered pursuant to Section 3.04(b); or (ii) if such a notice of disagreement is delivered, (A) as agreed by Purchaser and Seller pursuant to Section 3.04(c) or (B) in the absence of such agreement, as shown in the Independent Auditor’s calculation delivered pursuant to Section 3.04(c).

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time and consistently applied.

 

“Governmental or Regulatory Authority” means any court, tribunal, arbitrator, agency, commission, official or other instrumentality of any country, federal, state, county, city or other political subdivision, foreign or domestic, including without limitation the FDA, the SEC, the United Kingdom Financial Conduct Authority, the London Stock Exchange plc, the AIM Market of the London Stock Exchange plc, the NASDAQ Stock Market LLC and any other governmental or regulatory instrumentality with responsibility for granting any licenses, registrations or regulatory approvals.

 

“Health Law” means any Law the purpose of which is to ensure the safety, efficacy and quality of medicines by regulating the research, development, manufacturing, commercialization and distribution of these products, including Laws relating to good laboratory practices, good clinical practices, investigational use, product marketing authorization, manufacturing compliance and approval, good manufacturing practices, labeling, advertising, privacy, promotional practices, pricing, safety surveillance, record keeping and filing of required reports, including the FDA Act, the Comprehensive Drug Abuse Prevention and Control Act of 1970, the Controlled Substances Act, the Patient Protection and Affordable Care Act, the Health Insurance Portability and Accountability Act of 1996, the Public Health Service Act, as amended, and applicable regulations issued by a Governmental or Regulatory Authority.

 

“Income Tax” means any federal, state, local, or non-U.S. income tax, including any interest, penalty, or addition thereto, whether disputed or not.

 

“Income Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Income Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

“Insolvent” means that the fair value of the assets of the relevant Person, at a fair valuation, exceeds the sum of the debts and other Liabilities of such Person.

 

“Intended Use” means the distribution, marketing, sale, and manufacture of Zuplenz in the Territory.

 

“Inventory” means the inventory of Zuplenz owned by Seller or its Subsidiaries, including, but not limited to, the existing finished quantities, work in process, raw materials, constituent substances, materials (including but not limited to, packaging materials and other collateral), stores and supplies, as well as any trade, sample or prototype inventories owned by Seller and its Subsidiaries of the Product in the Territory, as set forth on Exhibit 2.01(a)(v).  For purposes of “Purchaser Closing Date Inventory Adjustment Amount,” “Inventory” means all items of inventory with an expiration date of no less than 24 months following the Closing Date and in quantities no less than the quantities set forth on Exhibit 2.01(a)(v).

 

  

3

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

 “Law” means, individually and collectively, all laws, statutes, rules, regulations, ordinances, directives and other pronouncements or orders of any kind whatsoever of any Governmental or Regulatory Authority within the applicable jurisdiction.

 

“Legal Proceeding” means any claim, action, suit, case, litigation, proceeding, charge, criminal prosecution, judicial, governmental or regulatory investigation, arbitration, mediation or alternative dispute resolution proceeding.

 

“Liabilities” means, without limitation, any direct or indirect liability, indebtedness, claim, assessment, loss, damages (compensatory, punitive or other), obligation, deficiency, guaranty, endorsement, commitment, reimbursement, cost and expenses of any kind or nature, whether accrued, absolute, asserted, unasserted, choate, inchoate, actual, contingent, matured, unmatured, liquidated, unliquidated, secured, unsecured, present or future, known or unknown.

 

“Licensed Intellectual Property” means all intellectual property rights in the

Territory licensed to Seller or any Seller Affiliate pursuant to the MonoSol License Agreement, including, but not limited to each of (i) United States Patent Number 8,580,830 and (ii) United States Patent Number 9,095,577, including any divisions, continuations, reissues and reexaminations based upon any patent application with common priority thereto.

“Liens” means any and all liens, pledges, hypothecations, claims, encumbrances, security interests, mortgages, restrictions, options or charges of any nature.

 

“Marketing and Reference Materials” means (i) written records of marketing research materials owned or controlled by Seller which relate exclusively to the Product in the Territory, and (ii) written manuals and reference guides owned or controlled by Seller relating to the handling of reports of adverse events related to the Product in the Territory.

 

“Material Adverse Effect” means any event, condition, change, circumstance, development or state of facts, individually or in the aggregate, that has, or could reasonably be expected to have a material, adverse effect on the Acquired Assets, but excluding the events or effects of: (i) changes to the pharmaceutical industry and markets in which Purchaser or Seller operate, to the extent such changes do not have a disproportionately adverse effect on the Acquired Assets; (ii) changes in the United States, United Kingdom or world financial markets in general; (iii) changes arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; (iv) any action taken by Purchaser or its Affiliates with respect to the transactions contemplated hereby or with respect to an Acquired Asset; or (v) any effect resulting from the public announcement of this Agreement, compliance with terms of this Agreement or the consummation of the transactions contemplated by this Agreement.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

“Medicaid Rebates” means all state and federal Medicaid rebates and reimbursements related to the Products.

 

“MonoSol License Agreement” means that certain License Agreement by and between Seller and MonoSol Rx LLC dated July 17, 2014, assigned to Purchaser as one of the Transferred Contracts hereunder, as the same shall be amended in accordance with Schedule 4.01(f).

 

“NDA” means a New Drug Application or supplemental New Drug Application, as defined in the United States Federal Food, Drug and Cosmetic Act.

 

“NDC Number” shall mean the national drug code number associated with the Product.

 

“Net Sales” means, for any period, the aggregate of the gross amounts invoiced or otherwise billed, charged or received by a Selling Person for the arms’ length sale or other commercial disposition to non-Affiliates of such Selling Person of a Product (whether such Selling Person has the right to sell Zuplenz), less the following deductions to the extent specifically related to a Product and actually allowed, incurred or paid during such period:  (i) reasonable cash discounts, returns, allowances, rebates, or chargebacks; (ii) sales, value-added, excise taxes, tariffs and duties, and other taxes directly related to the sale (but excluding income or net profit taxes or franchise taxes of any kind); (iii) Medicaid and other reimbursement related rebates, co-pay reimbursements, product cost per unit paid to the manufacturer on a delivered basis, including freight and duty costs, distribution and wholesaler fee for service; and (iv) amounts allowed or credited on returns, provided that all of the foregoing deductions are incurred in the ordinary course and calculated in accordance with GAAP during the applicable calculation period throughout the Selling Person’s organization.  All such discounts, allowances, credits, rebates and other deductions shall be fairly and equitably allocated to a Product and other products or services of a Selling Person, such that a Product does not bear a disproportionate portion of such deductions.  Any disposal of a Product at no charge for, or use without charge in, clinical or preclinical trials (but excluding post-approval clinical trials for which compensation is received by the Selling Person), given as free samples, or distributed at no charge to patients unable to purchase the same shall not be included in Net Sales, in each case, except to the extent that a Selling Person has received any consideration for such Product.

 

For sake of clarity and avoidance of doubt, the transfer of a Product by a Selling Person or one of its Affiliates to another Affiliate of such Selling Person or to a sub-licensee of such Selling Person for resale shall not be considered a sale; in such cases, Net Sales shall be determined based on the amount invoiced or otherwise billed by such Affiliate or sub-licensee to an independent Third Party, less the Net Sales deductions allowed under this definition.

 

  

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CONFIDENTIAL MATERIAL OMITTED AND FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

In the case of any sale of a Product for value other than in an arm’s length transaction exclusively for cash, such as barter or counter-trade, Net Sales shall be calculated based on the fair market value of the non-cash consideration received in connection with such sale and based on the full list price for non-arm’s length transactions.  If a Product is sold together with another product and not separately invoiced or billed, the Parties shall agree upon the appropriate allocation of the amount received in consideration for the applicable Product, which allocation shall reflect the fair market value of the applicable Product and the other product.

 

“Other Acquisition Documents” means (i) the Bill of Sale, and (ii) the Assignment and Assumption Agreement.

 

“Payment Claims” means any and all payments, rebates, administrative fees or chargebacks due under any state or federal program or due to customers under any private party managed care contracts or under any other contract or program of any nature whatsoever with private parties, except for Medicaid Rebates.

 

“Permitted Liens” shall mean (i) Liens for Taxes not yet due, payable, delinquent or subject to penalties for non-payment, or which are being contested in good faith in the ordinary course of business by appropriate proceedings and (ii) mechanics’, materialmen’s, carriers’, workmen’s, warehousemen’s, repairmen’s, landlords’ or other like Liens that are incurred in the ordinary course of business and are not delinquent and which are not, individually or in the aggregate, material to the Acquired Assets.

 

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, Governmental or Regulatory Authority, or any other form of legal entity not specifically listed herein.

 

“Product Registration” means a list of all governmental authorizations granted to Seller by, or applications therefor pending with, any Governmental or Regulatory Authority in the Territory to manufacture, market, import, distribute and/or sell any of the Products in the Territory, except for those Governmental or Regulatory Authority authorizations that the failure to possess would not be material to the operation of the business related to the Products taken as a whole.

 

“Purchaser Closing Date Inventory Adjustment Amount” means, with respect to each item of Inventory, the product of (i) Seller’s actual cost of such item of Inventory as of the Closing Date and (ii) the difference between the quantities of such item of Inventory listed on Exhibit 2.01(a)(v) and the quantities included in the Final Closing Date Inventory.

 

“Purchaser Liability Cap” means an amount equal to [***].

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

“Seller Closing Date Inventory Adjustment Amount” means, with respect to the Inventory, the product of (i) Seller’s actual cost of such Inventory and (ii) the difference between the quantities of such Inventory listed on Exhibit 2.01(a)(v) and the quantities included in the Final Closing Date Inventory.

 

“Seller Liability Cap” means an amount equal to [***].

 

“Seller Names” shall mean the names and logos of Seller and any of its Affiliates.

 

“Seller’s Knowledge” means the actual knowledge of the following individuals, after such individuals have made reasonable due inquiry: Mark Schwartz, Joseph Lasaga, Christopher Lento, Ryan Dunlap, Nate Ide, James Datz and Pat Murphy.

 

“Selling Person” means the Purchaser, each of its Affiliates and each (A) licensee, sub-licensee, assignee or other grantee of rights from Purchaser or any of its Affiliates or another Selling Person to market or sell Zuplenz, (B) buyer, transferee or assignee of any Transferred Intellectual Property or Licensed Intellectual Property from Purchaser or its Affiliates or another Selling Person, or (C) any Affiliate of the foregoing.

 

“Tax” or “Taxes” means all federal, state, local and foreign income, payroll, withholding, excise, value added, sales (including bulk sales), use, personal property, use and occupancy, business and occupation, mercantile, real estate, gross receipts, license, employment, severance, stamp, premium, windfall profits, social security (or unemployment), disability, transfer, registration, alternative or add-on minimum, estimated or capital stock and franchise and other taxes and assessments of any kind whatsoever,  (ii)  all interest or penalties, addition to tax or additional amount imposed, assessed or collected by any Taxing Authority, in each case, regardless of whether disputed, and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) of this definition as a result of being a member of an affiliated, consolidated, combined or unitary group, as a result of any tax sharing or tax allocation agreement, arrangement or understanding, or as a result of being liable for another Person’s taxes as a transferee or successor, by contract or otherwise.

 

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

“Taxing Authority” means any Governmental or Regulatory Authority exercising any authority to impose, regulate or administer the imposition of Taxes.

 

“Territory” means the United States of America including its territories and possessions.

 

“Third Party” means any Person other than:  (1) Purchaser or Seller, and (2) any Affiliates of Purchaser or Seller.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

(b)           The following terms have the meanings given to such terms in the Sections set forth below:

 

	
Term

	
Section

	
Acquired Assets

	
2.01(a)

	
Additional Assumption Documents

	
3.01(b)(vi)

	
Additional Transfer Documents

	
3.01(c)(v)

	
Agreement

	
Recitals

	
Allocation

	
9.04(a)

	
Annual Net Sales Milestones

	
3.03(a)

	
Assignment and Assumption Agreement

	
3.01(b)(iii)

	
Assumed Liabilities

	
2.02

	
Bill of Sale

	
3.01(b)(ii)

	
Business Employee

	
8.03

	
Chargeback Claims

	
9.07(e)(i)

	
Claim Dispute Notice

	
10.04

	
Closing

	
3.01(a)

	
Closing Date

	
3.01(a)

	
Closing Date Inventory Statement

	
3.04(a)

	
Commercial Rebates

	
9.07(d)(i)(a)

	
Commercial Rebate Tail Period

	
9.07(d)(i)

	
Confidentiality Period

	
9.06(e)

	
Direct Claim Notice

	
10.04

	
Excluded Assets

	
2.01(b)

	
FDCA

	
5.13(a)

	
Food and Drugs Act

	
5.13

	
Government Rebate Tail Period

	
9.07(c)(i)(A)

	
Government Rebates

	
9.07(c)(i)

	
Indemnitee

	
10.03(a)

	
Indemnitor

	
10.03(a)(i)

	
Independent Auditor

	
8.02

	
Inventory

	
2.01(a)(iv)

	
Losses

	
10.01

	
NDCs

	
9.07

	
Net Sales Milestones

	
3.03

	
Non-Responsible Party

	
9.07(c)(ii)

	
Party or Parties

	
Recitals

	
Plan

	
5.14(a)

	
Product or Products

	
Recitals

	
Product Inventory List

	
5.11

	
Purchase Price

	
3.02

	
Purchaser

	
Recitals

 

  

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Purchaser Indemnitees

	
10.01

	
Purchaser Inventory Payment

	
3.04(e)

	
Purchaser Proprietary Information

	
9.06(b)

	
Quarterly Net Sales Milestones

	
3.03

	
Regulatory Agency

	
5.13

	
Responsible Party

	
9.07(c)(ii)

	
Seller

	
Recitals

	
Seller Indemnitees

	
10.02

	
Seller Inventory Payment

	
3.04(e)

	
Seller Proprietary Information

	
9.06(c)

	
Termination Date

	
11.01(b)

	
Third Party Claim

	
10.03(a)

	
Transfer Taxes

	
9.03

	
Transferred Contracts

	
2.01(a)(iii)

	
Transferred Employees

	
2.02(iv)

	
Transferred FDA Permits

	
2.01(a)(ii)

	
Transferred Intellectual Property

	
2.01(a)(i)

	
UPCs

	
6.06(a)

	
Zuplenz

	
Recitals

Section 1.02           Interpretation.  The definitions of the terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein); (ii) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof; (iii) the word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends and such phrase does not mean simply “if”; (iv) all references herein to Articles, Sections, Exhibits or Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules of this Agreement; and (v) the headings contained in this Agreement or any Exhibit or Schedule and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  All Schedules attached hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in the Exhibits and Schedules attached hereto but not otherwise defined therein, shall have the meaning as defined in this Agreement.  In the event of an ambiguity or a question of intent or interpretation, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any provisions of this Agreement.

 

  

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ARTICLE II

 

PURCHASE AND SALE OF ACQUIRED ASSETS

 

Section 2.01          Purchase and Sale.

 

(a)           Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, assign, transfer, convey and deliver, or cause to be sold, assigned, transferred, conveyed and delivered, to Purchaser, and Purchaser shall purchase and acquire from Seller, free and clear of all Liens, all of the rights, title and interest of Seller and its Subsidiaries in, to and under the assets set forth below, whether accrued, contingent or otherwise, wherever located (collectively, the “Acquired Assets”):

 

(i)           the domain name and copyrights of Seller and its Subsidiaries which are related exclusively to the Product and are set forth on Exhibit 2.01(a)(i) (the “Transferred Intellectual Property”);

 

(ii)           all governmental, regulatory filings, correspondence, submissions, marketing authorizations, permits, licenses, registrations (including Product Registration data), regulatory clearances, certificates, approvals, variances, consents and similar items of Seller and its Subsidiaries with the FDA exclusively related to the Intended Use of Zuplenz in the Territory as set forth on Exhibit 2.01(a)(ii) (the “Transferred FDA Permits”);

 

(iii)           to the extent transferrable, all state governmental and federal governmental (other than the Transferred FDA Permits), regulatory filings, correspondence, submissions, marketing authorizations, permits, licenses, registrations (including product registration data), regulatory clearances, certificates, approvals, variances, consents and similar items of Seller and its Subsidiaries exclusively related to the Intended Use of the Product in the Territory (“State Permits”), including those related to marketing, pricing or reimbursement approval (such listed State Permits, the “Transferred State Permits” and, together with the Transferred FDA Permits, the “Permits”);

 

(iv)           the Contracts set forth on Exhibit 2.01(a)(iv), including without limitation the MonoSol License Agreement (the “Transferred Contracts”), and all rights and claims of Seller arising under or with respect to the Transferred Contracts, including all rights under any warranties, indemnities and similar rights against third parties to the extent related to any Acquired Assets;

 

(v)           the Inventory;

 

  

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(vi)           copies of (A) all current marketing and sales assets that relate exclusively to Zuplenz and (B) all books, ledgers, files, reports, data, plans, records and training materials that relate exclusively to Zuplenz;

 

(vii)           all claims, causes of action or other rights of the Seller, if any, arising out of any of the Acquired Assets arising before, on or after the Closing Date;

 

(viii)           all prepaid expenses, credits, advance payments, claims, security, rebates, refunds, rights of recovery, rights of set-off, rights of recoupment, deposits, charges, sums and fees (including any such item relating to the payment of Taxes) related to the Acquired Assets; and

 

(ix)           any goodwill associated with the Acquiring Assets.

 

(b)           Purchaser is not purchasing or acquiring, and Seller is not selling or assigning, any assets or properties of Seller or any of its Affiliates that are not specifically listed above, and all such other assets and properties shall be excluded from the Acquired Assets (the “Excluded Assets”).

 

Section 2.02          Assumed Liabilities.  Upon the terms and subject to the conditions set forth herein, as partial consideration for the Acquired Assets, Purchaser agrees, effective at the Closing, to assume and to satisfy and discharge when due the following, but only the following, in accordance with the Assignment and Assumption Agreement, Liabilities of Seller, in each case, excluding the Excluded Liabilities (collectively, the “Assumed Liabilities”):

 

(a)           all Liabilities arising under or relating to the Transferred Contracts arising on or after the Closing;

 

(b)           all Liabilities arising under or relating to the Permits arising on or after the Closing;

 

(c)           all Liabilities arising out of Purchaser’s use of the Seller Names, Excluded Trademarks, UPC, NDC and the activities contemplated by Section 9.07 hereof arising on or after the Closing;

 

(d)           those Liabilities which are allocated to Purchaser with respect to the Channel Liabilities, as set forth in Section 9.08 hereof arising on or after the Closing; and

 

(e)           any Liabilities arising from or relating to the development, testing, manufacture, distribution, marketing, promotion or sale of Zuplenz in the Territory arising on or after the Closing (other than any Liability arising out of or relating to a breach of any representation or warranty made by Seller in Article V hereof occurring prior to the Closing).

 

  

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Section 2.03          Excluded Liabilities.  Notwithstanding anything to the contrary contained in this Agreement or any of the Other Acquisition Documents, Seller acknowledges that Seller shall retain and satisfy, and Purchaser shall not assume or otherwise be responsible or liable for, any Liabilities or obligations of Seller other than the Assumed Liabilities, whether or not relating to the Acquired Assets (collectively, the “Excluded Liabilities”).  For the avoidance of doubt, Excluded Liabilities shall include the following:

 

(a)           those Liabilities which are allocated to Seller with respect to the Channel Liabilities, as defined and set forth in Section 9.08 hereof;

 

(b)           any Liability arising under or relating to the Transferred Contracts arising prior to the Closing Date, including any obligation for monies due but not yet payable (including, but not limited to, royalties or milestones, as applicable) as of the Closing Date under any Transferred Contract;

 

(c)           any Liabilities resulting from (1) any breach or violation of any Transferred Contract by Seller occurring prior to the Closing or (2) any act or omission of Seller prior to the Closing that would have constituted a breach or violation upon notice or passage of time under any Transferred Contract;

 

(d)           any product Liability or similar claim for injury to a Person or property which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty made by Seller, or by reason of the improper performance or malfunctioning of an Acquired Asset, improper design or manufacture, failure to adequately package, label or warn of hazards or other related product defects of any Product manufactured or sold prior to the Closing Date, or any service performed by Seller prior to the Closing Date;

 

(e)           any recall, design defect or similar claims of any Product sold or any service performed by Seller prior the Closing Date;

 

(f)           any Liability resulting from or arising out of the conduct of business by Seller or any Affiliate of Seller or the ownership of the Excluded Assets, whether before, on or after the Closing;

 

(g)           all Liabilities for rebates or chargebacks with respect to the Product dispensed prior to the Closing Date;

 

(h)           any Liability of Seller for expenses or fees incident to or arising out of the negotiation, preparation, approval or authorization of this Agreement, the Other Acquisition Documents or the consummation (or preparation for the consummation) of the transactions contemplated hereby and thereby (including all attorneys’ and accountants’ fees and brokerage fees incurred by or imposed upon Seller);

 

(i)           any Liability of Seller under this Agreement or the Other Acquisition Documents;

 

  

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(j)           any Taxes for which Seller is liable, including any Liability of Seller for unpaid Taxes of any Person under Treasury Regulations §1.1502-6 (or any similar provision of state, local or foreign Law), as transferee or successor by contract or otherwise;

 

(k)           any Liability resulting from or arising out of any of the Excluded Assets and not specifically assumed by Purchaser as an Assumed Liability;

 

(l)           any Liabilities in respect of any pending or threatened Legal Proceeding arising out of, relating to or otherwise in respect of the operation of the Acquired Assets to the extent such Legal Proceeding relates to such operation on or prior to the Closing Date; and

 

(m)           any Liabilities arising out of, in respect of or in connection with the failure by Seller or any of its Affiliates to comply with any Law.

 

Section 2.04          No Offset.  Each of Purchaser’s and Seller’s obligations under Article II will not be subject to offset or reduction by reason of any actual or alleged breach of any representation, warranty, covenant or agreement contained in this Agreement, any Other Acquisition Document or any right or alleged right to indemnification hereunder.

 

ARTICLE III

 

CLOSING

 

Section 3.01          Closing.

 

(a)           Subject to the terms and conditions of this Agreement, the closing of the Acquisition (the “Closing”) shall be held remotely by exchange of electronic copies of the agreements, documents, certificates and other instruments set forth in Section 3.01(b) and Section 3.01(c) at 10:00 a.m. on the date which is five Business Days after the conditions to the Closing set forth in Article IV shall have been satisfied or waived (other than those conditions which by their nature are to be fulfilled at the Closing, but subject to the fulfillment or waiver of such conditions), or on any other date as mutually agreed by the Parties.  The date on which the Closing shall occur is hereinafter referred to as the “Closing Date”.  The Closing shall be deemed to be effective as of 12:00:01 a.m. Eastern Standard Time on the Closing Date.

 

(b)           At the Closing, Purchaser shall deliver or cause to be delivered to Seller:

 

(i)           an amount equal to the Closing Consideration by wire transfer of immediately available funds denominated in Dollars to a bank account designated in writing by Seller at least two Business Days prior to the Closing Date;

 

(ii)           an executed counterpart of the Bill of Sale, in the form attached hereto as Exhibit 3.01(b)(ii) (the “Bill of Sale”);

 

  

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(iii)           an executed counterpart of the assignment and assumption agreement, in the form attached hereto as Exhibit 3.01(b)(iii) (the “Assignment and Assumption Agreement”);

 

(iv)           such other executed instruments of transfer, conveyance, assignment, and assumption as the Seller may reasonably request in order to effect the sale, transfer, conveyance and assignment to the Purchaser of all obligations, liabilities, right, title and interest in and to the Assumed Liabilities or to give effect to the transactions set forth herein (the “Additional Assumption Documents”);

 

(v)           a certificate, dated as of the Closing Date, executed by an authorized officer of Purchaser, in his or her capacity as such, confirming the satisfaction of the conditions specified in Sections 4.02(b) and Section 4.02(c).

 

(c)           At the Closing, Seller shall deliver or cause to be delivered to Purchaser:

 

(i)           an executed counterpart of the Bill of Sale;

 

(ii)           an executed counterpart of the Assignment and Assumption Agreement;

 

(iii)           such other executed instruments of transfer, conveyance and assignment as the Purchaser may reasonably request in order to effect the sale, transfer, conveyance and assignment to the Purchaser of all right, title and interest in and to the Acquired Assets or to give effect to the transactions set forth herein (the “Additional Transfer Documents”); and

 

(iv)           and a certificate, dated as of the Closing Date, executed by an authorized officer of Seller, in his or her capacity as such, confirming the satisfaction of the conditions specified in Section 4.01(b), Section 4.01(c) and Section 4.01(e).

 

(d)           Following the Closing Date, Purchaser may submit to Seller, in writing, a request for Seller to cause delivery to Purchaser of the tangible Acquired Assets.  Promptly following receipt of such request, Seller shall arrange for delivery to Purchaser, at an address specified by Purchaser in writing, of such tangible Acquired Assets.  For the avoidance of doubt, documents and other intangible Acquired Assets may be delivered electronically.

 

Section 3.02                         Purchase Price.  Upon the terms and subject to the conditions contained in this Agreement, as consideration for the Acquired Assets to be sold, transferred, conveyed, assigned and delivered to Purchaser pursuant to Section 3.01, Purchaser shall (i) at Closing pay to the seller an aggregate amount equal to the Closing Consideration; (ii) at the Closing, assume the Assumed Liabilities; (iii) if and to the extent earned in accordance with Section 3.03, pay the Seller the Net Sales Milestone Payment(s), and (iv) pay the Purchaser Closing Date Inventory Adjustment Amount to Seller, or Seller shall pay the Seller Closing Date Inventory Adjustment Amount to Purchaser, as provided in Section 3.04 hereof (collectively, the “Purchase Price”).  For the avoidance of doubt, Purchaser shall assume Seller’s payment obligations under the Transferred Contracts, including without limitation the payment obligations under the MonoSol License Agreement (other than those payment obligations set forth in Section 7.1.1. of the MonoSol License Agreement).

 

  

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Section 3.03          Net Sales Milestone Payments.

 

(a)           In the event that: (i) there are Net Sales of [***] or greater in any [***] occurring in [***] (the “Quarterly Net Sales Milestone”), and (ii) the applicable “Annual Net Sales” dollar value set forth below is achieved during the Milestone Period (based on the Net Sales of the Product in any full calendar year) (each, an “Annual Net Sales Milestone” and, collectively, the “Annual Net Sales Milestones”), Purchaser shall, in each case, pay to Seller each of the one-time only, non-refundable, non-creditable net sales milestones (each, a “Net Sales Milestone Payment” and, collectively, the “Net Sales Milestone Payments”) in respect of the Acquired Assets as set forth below:  Each Net Sales Milestone Payment shall be paid by wire transfer in immediately available funds to an account or accounts designated in writing by Seller; which payment shall be made no later than 45 days following the achievement of the Quarterly Net Sales Milestone or, for all other Net Sales Milestone Payments, following the end of the applicable calendar year; provided that more than one Net Sales Milestone Payment may become payable in the same calendar year as any other Net Sales Milestone Payment.  Seller acknowledges the right to receive Net Sales Milestone Payments is not a security, shall not be represented by a certificate or other instrument and shall not represent a security or ownership interest in Purchaser, its Affiliates or any of their respective assets.

 

	
Net Sales Milestones:

	
Net Sales Milestone Payment:

	
Achievement of Quarterly Net Sales Milestone

	
[***]

	
Annual Net Sales

	
[***]

	
[***]

	
[***]

	
[***]

	
[***]

	
[***]

 

(b)           Commencing with the first calendar quarter following the Closing Date and continuing until the earlier to occur of (i) the payment to Seller of the Net Sales Milestone Payment with respect to the achievement of annual Net Sales of [***] or (ii) December 31, 2022 (such period, the “Milestone Period”), within 45 days after the end of each calendar quarter, Purchaser shall deliver to Seller a statement (each, a “Net Sales Statement”) setting forth (A) the amount of Net Sales with respect to such calendar quarter and with respect to the period from January 1 of the calendar year of which such calendar quarter is a part through the end of such calendar quarter and (B) the “gross to net” adjustments with respect to the calculation of Net Sales for such calendar quarter and calendar year (which calculation shall be made in conformity with, and show the individual components of, the definition of Net Sales). For the avoidance of doubt, the Seller shall be entitled to receive a Net Sales Statement within 45 days after the end of the [***] calendar year.

 

  

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(c)           Any dispute with respect to a Net Sales Statement shall be resolved in accordance with Section 3.03(b).  If such resolution results in an adjustment to the amount payable by Purchaser to Seller pursuant to Section 3.03(a), Purchaser shall pay to Seller cash in the amount of such adjustment within five Business Days after such dispute is finally resolved, which payment shall be by wire transfer of immediately available funds to the account designated by Seller.

 

(d)           For the avoidance of doubt: (i) the total amount of Net Sales Milestone Payments by the Purchaser shall not exceed $26,000,000 under this Agreement; (ii) the Purchaser shall not be required to make more than [***] for the achievement of the Quarterly Net Sales Milestone; and (iii) the Purchaser shall not be required to make more than one Net Sales Milestone Payment in respect of the achievement of any single Annual Net Sales Milestone. For example, (x) with respect to Quarterly Net Sales Milestone, if the Net Sales of the Product is equal to at least [***] during the [***] in calendar year [***], the total Net Sales Milestone Payment owed would be [***], and thereafter no further Net Sales Milestone Payments would be payable to Seller in connection with any Quarterly Net Sales Milestones achieved in any other period during calendar years [***], and (y) with respect to the Annual Net Sales Milestones, if the Net Sales of the Product is equal to [***] in the [***] calendar year, the total Net Sales Milestone Payment would be [***], and thereafter no further Net Sales Milestone Payments would be payable to Seller in connection with any Annual Net Sales Milestones achieved in [***] calendar year during the Milestone Period.

 

Section 3.04          Closing Date Inventory Adjustment.

 

(a)           As promptly as practicable, but no later than sixty days after the Closing Date, Purchaser shall cause to be prepared and delivered to Seller a statement calculating the Closing Date Inventory (the “Closing Date Inventory Statement”).

 

(b)           If Seller disagrees with Purchaser’s calculation of the Closing Date Inventory set forth in the Closing Date Inventory Statement, Seller may, within ten Business Days after delivery of the Closing Date Inventory Statement, deliver a written notice to Purchaser disagreeing with such calculation and setting forth Seller’s calculation of the Closing Date Inventory. Any such notice of disagreement shall specify those items or amounts as to which Seller disagrees.  If Seller does not deliver to Purchaser a written notice of disagreement within such ten Business Day period, then Sellers shall be deemed to have agreed to such Closing Date Inventory Statement.

 

  

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(c)           If a notice of disagreement shall be duly delivered pursuant to Section 3.04(b), Purchaser and Seller shall, during the ten Business Days following such delivery, use their good faith and commercially reasonably efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the Closing Date Inventory.  If during such period, Purchaser and Seller are unable to each such agreement, the disputed items be submitted to and determined by an independent accounting firm selected by Purchaser and Seller (the “Independent Auditor); provided, however, the Parties may mutually agree on an extended period to resolve any such dispute before submitting it to the Independent Auditor.  In making such calculation, the Independent Auditor shall only consider those items or amounts in the Closing Date Inventory Statement and Seller’s calculation of Closing Date Inventory as to which Seller has disagreed. The Independent Auditor shall deliver to Purchaser and Seller, as promptly as practicable (but in any case no later than twenty Business Days from the date of the engagement of the Independent Auditor), a report setting forth such calculation. Such report shall be final and binding upon Purchaser and Seller.  The cost of such review and report shall be borne equally by Purchaser and Seller; provided, however, that if the Independent Auditor’s report is substantially in agreement with either party’s calculations included in the Closing Date Inventory Statement, the cost of such review and report shall be borne solely by the other party.

 

(d)           Purchaser and Seller shall, and shall cause their respective representatives to, cooperate and assist in the preparation of the Closing Date Inventory Statement and the calculation of the Closing Date Inventory and in the conduct of the review referred to in this Section 3.04, including the making available, to the extent necessary, of books, records and personnel.

 

(e)           If the Final Closing Date Inventory is greater than the Inventory in the quantities listed on Exhibit 2.01(a)(v), then the Purchaser shall be obligated to pay to Seller an amount in cash equal to the Purchaser Closing Date Inventory Adjustment Amount within three Business Days after the Final Closing Date Inventory is determined.  If the Final Closing Date Inventory is less than the Inventory in the quantities listed on Exhibit 2.01(a)(v), then the Seller shall be obligated to pay to Purchaser an amount in cash equal to the Seller Closing Date Inventory Adjustment Amount within three Business Days after the Final Closing Date Inventory is determined.  Any payment that any party is obligated to make to the other party pursuant to this Section 3.04 shall be paid by wire transfer of immediately available funds into an account designated by such other party.

 

ARTICLE IV

 

CONDITIONS TO CLOSING

 

Section 4.01          Conditions to Obligations of Purchaser.  The obligation of Purchaser to effect the Closing is subject to the satisfaction (or written waiver by Purchaser) at or prior to the Closing of the following conditions:

 

(a)           No Injunctions or Restraints.  No Law, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental or Regulatory Authority or other legal restraint or prohibition by a Governmental or Regulatory Authority shall be in effect and which has the effect of making the Acquisition illegal or otherwise preventing the consummation of the Acquisition.

 

  

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(b)           Accuracy of Representations and Warranties.  All of the representations and warranties made by Seller in Article V that are qualified by any reference to any materiality qualifications, including any Material Adverse Effect qualification, shall each be true and correct as of the date hereof and as of the Closing Date as though such representations and warranties were made at such date (except that any representations and warranties that are made only as of a specified date shall be true and correct only as of such date), and all other representations and warranties made by the Seller shall each be true and correct in all material respects (except for the representations and warranties made in this Agreement by the Seller in  Section 5.01, Section 5.02, Section 5.03(b), Section 5.07 and Section 5.08 (the “Seller Fundamental Representations”) which shall be true and correct in all respects) as of the date hereof and as of the Closing Date as though such representations and warranties were made at such date (except that any representations and warranties that are made only as of a specified date shall be true and correct only as of such date).

 

(c)           Performance of Covenants.  The covenants and obligations that Seller is required to perform or comply with under this Agreement on or before the Closing Date shall have been duly performed and complied with by Seller in all material respects.

 

(d)           Deliverables.  Purchaser shall have received each of the items set forth in Section 3.01(c).

 

(e)           No Material Adverse Effect.  No Material Adverse Effect shall have occurred or there shall be no event, change or occurrence that would reasonably likely to have a Material Adverse Effect.

 

(f)           MonoSol License Agreement.  The MonoSol License Agreement shall have been amended in accordance with the terms on Schedule 4.01(f).

 

(g)           Reserved.

 

(h)           Closing Consents. The Seller shall have obtained, and delivered a copy to Purchaser, all of the consents set forth on Schedule 4.01(h).

 

Section 4.02          Conditions to Obligation of Seller.  The obligation of Seller to, and to cause its Affiliates to, effect the closing of the Acquisition is subject to the satisfaction (or written waiver by Seller) as of the Closing of the following conditions:

 

(a)           No Injunctions or Restraints.  No Law, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental or Regulatory Authority or other legal restraint or prohibition by a Governmental or Regulatory Authority shall be pending or in effect seeking to prevent or preventing the Acquisition.

 

  

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(b)           Accuracy of Representations and Warranties.  All of the representations and warranties made by Purchaser in Article VII that are qualified by any materiality qualifications shall each be true and correct as of the Closing Date as though such representations and warranties were made at such date (except that any representations and warranties that are made only as of a specified date shall be true and correct only as of such date), and all other representations and warranties of the Purchaser shall each be true and correct in all material respects as of the Closing Date as though such representations and warranties were made at such date (except that any representations and warranties that are made only as of a specified date shall be true and correct only as of such date).

 

(c)           Performance of Covenants.  The covenants and obligations that Purchaser is required to perform or comply with under this Agreement on or before the Closing Date shall have been duly performed and complied with by Purchaser in all material respects.

 

(d)           Deliverables.  Purchaser shall have made delivery to Seller of all other instruments and documents set forth in Section 3.01(b), and other than any instruments and documents set forth in Section 3.01(b) that customarily will be (and are) delivered at Closing.

 

Section 4.03          Frustration of Closing Conditions.  Neither Purchaser nor Seller may rely on the failure of any condition set forth in this Article IV to be satisfied if such failure was caused by such Party’s failure to act in good faith or to comply with its obligations under Section 9.01 to cause the Closing to occur.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth in the Schedules attached hereto, Seller hereby represents and warrants to Purchaser as follows:

 

Section 5.01          Organization; Authority.  Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Seller has the requisite corporate power and authority to own, lease and operate, as applicable, the Acquired Assets. The Seller has all of the requisite corporate power and authority to execute, deliver, perform its obligations under this Agreement and the Other Acquisition Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby.  All acts and other proceedings required to be taken by Seller to authorize the execution, delivery and performance of this Agreement and the Other Acquisition Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby have been duly and properly taken.  This Agreement has been duly executed and delivered by Seller and, assuming this Agreement has been duly authorized, executed and delivered by Purchaser, constitutes, and the Other Acquisition Documents on the Closing Date will be duly executed and delivered by Seller and upon the due authorization, execution and delivery by each other party to the Other Acquisition Documents will constitute, a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and to general equitable principles.  No other proceeding on the part of the Seller is necessary to authorize this Agreement or the Other Acquisition Documents or any of the transactions contemplated hereby or thereby.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

Section 5.02          No Conflicts; Consents.

 

(a)           Except as set forth on Schedule 5.02, the execution, delivery and performance of this Agreement by Seller does not, and the execution, delivery and performance by Seller of each Other Acquisition Document to which it is, or is specified to be, a party will not, and the consummation of the transactions contemplated hereby and thereby and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation, or give rise to any liability of Purchaser, or result in the creation of any Lien upon any of the Acquired Assets under, any provision of (i) Seller’s certificate of incorporation or by-laws , (ii) any Contract to which Seller is a party and by which any of the Acquired Assets are bound, (iii) any judgment, order, or decree, or, subject to the matters referred to in Section 5.02(b) below, any Law applicable to Seller, its properties, the Acquired Assets or any other assets of Seller, other than, in the case of clause (ii) above, any such items that would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on the ability of Seller to consummate the Acquisition.

 

(b)           No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental or Regulatory Authority or Third Party is required to be obtained or made by or with respect to Seller in connection with the execution, delivery and performance of this Agreement, the Other Acquisition Documents or the consummation of the transactions contemplated hereby or thereby, other than such consents, approvals, licenses, permits, orders, authorizations, registrations, declarations and filings the absence of which, or the failure to make which, individually or in the aggregate, (i) would not be reasonably likely to have a material adverse effect on the ability of Seller to consummate the Acquisition or perform its obligations under this Agreement or the Other Acquisition Documents, and (ii) would not give rise to any liability of Purchaser as a result of the consummation of the Acquisition.

 

Section 5.03          Acquired Assets.

 

(a)           Except as set forth in Schedule 5.03, the Acquired Assets and the Licensed Intellectual Property constitute all of the assets, rights or property (other than (x) any intellectual property that are licenses for commercial “off-the-shelf” or “shrink-wrap” software, and (y) administrative, finance and other infrastructure and back office information technology systems, networks and software), owned or used by Seller or its Affiliates and primarily related to the Intended Use of the Product in the Territory.

 

  

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

(b)           The Seller owns, leases, licenses or has the right to use the Acquired Assets and Licensed Intellectual Property free and clear of all Liens and upon the consummation of the Acquisition, the Purchaser shall acquire good and marketable title to, and all right, title and interests of Seller in and to, the Acquired Assets and Licensed Intellectual Property, free and clear of all Liens.  The Seller has the exclusive license rights to the Licensed Intellectual Property, with the right to further convey such rights to the Purchaser. Except as set forth on Schedule 5.03, the Acquired Assets include all of the assets necessary for the Intended Use of the Product in the Territory by the Purchaser, and there are no other assets (tangible or intangible) used by Seller or its Affiliates for the Intended Use of the Product in the Territory, other than those assets included in the Acquired Assets.

 

Section 5.04          Intellectual Property.

 

(a)           Seller owns free and clear of all Liens the Transferred Intellectual Property and the consummation of the Acquisition will not conflict with, alter or impair any such rights in any material respect.

 

(b)           As of the date hereof, no claims are pending before any court, arbitrator or other tribunal, or before any administrative law judge, hearing officer or administrative agency or, to Seller’s Knowledge, threatened in writing, against Seller or any of its Affiliates by any Third Party with respect to the ownership, validity or enforceability of any Transferred Intellectual Property or Licensed Intellectual Property.

 

(c)           Seller has not granted any options, licenses or agreements relating to the Transferred Intellectual Property or, with respect to Zuplenz in the Territory, relating to the Licensed Intellectual Property, except non-exclusive implied licenses to end-users in the ordinary course of business.  As of the date hereof, Seller is not bound by or a party to any material options, licenses or agreements of any kind for intellectual property of any Third Party relating to Zuplenz in the Territory, except for the Transferred Contracts.

 

(d)           To Seller’s Knowledge, no Third Party is infringing or violating or misappropriating any of the Transferred Intellectual Property or any Licensed Intellectual Property exclusively licensed to Seller, or has made any claim of ownership or right to any Transferred Intellectual Property or such Licensed Intellectual Property.  Seller has neither asserted nor threatened in writing any action or claim against any Third Party involving or relating to any Transferred Intellectual Property or such Licensed Intellectual Property.  Seller has not received any written request from any Third Party that Seller enter into a license with respect to any Third Party intellectual property right in relation to Zuplenz, the Acquired Assets or the Intended Use of Zuplenz in the Territory.

 

(e)           To Seller’s Knowledge, the Intended Use of each of Zuplenz in the Territory does not infringe or violate or constitute a misappropriation of any intellectual property of any Third Party.  Seller has not received any written claim or notice alleging any such infringement, violation or misappropriation.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

 

(f)           There is no pending or, to Seller’s Knowledge, threatened claim, interference, opposition or demand of any Third Party challenging the ownership, validity or scope of any Transferred Intellectual Property.

 

Section 5.05          Transferred Contracts.  Each Transferred Contract is valid, binding and in full force and effect and, to Seller’s Knowledge, is enforceable by Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally, general principles of equity and the discretion of courts in granting equitable remedies.  Except as set forth on Schedule 5.05, as of the date hereof and as of the Closing Date, Seller has performed in all material respects all material obligations required to be performed by it under the Transferred Contracts and is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder and, to Seller’s Knowledge, as of the date hereof, no other party to any of the Transferred Contracts is (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder. Correct and complete copies of each Transferred Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Purchaser.  There are no material disputes pending or threatened under any Transferred Contract included in the Acquired Assets.

 

Section 5.06          Litigation.  As of the date hereof, there are no (a) outstanding judgments, orders, injunctions or decrees of any Governmental or Regulatory Authority or arbitration tribunal against Seller or any of its Subsidiaries, (b) Legal Proceedings pending or, to the Seller’s Knowledge, threatened against Seller, or (c) investigations by any Governmental or Regulatory Authority which are pending or, to the Knowledge of Seller, threatened against Seller or any of its Subsidiaries, which, in the case of each of clauses (a), (b) and (c), relating to the Products or the Intended Use of Zuplenz in the Territory or the Acquired Assets and have had or would be reasonably likely to be material and adverse to the Acquired Assets, or the ability of Seller to consummate the Acquisition and the other transactions contemplated by this Agreement and the Other Acquisition Documents.

 

Section 5.07          Brokers or Finders.  Except for Mizuho Securities USA, Inc., no agent, broker, investment banker, financial advisor or other firm or Person is or will be entitled to any broker’s, financial advisor’s, finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement or the Other Acquisition Documents based upon arrangement made by or on behalf of Seller or any of its Affiliates.  For the avoidance of doubt, all fees due to Mizuho Securities USA, Inc. in connection with any of the transactions contemplated by this Agreement or the Other Acquisition Documents shall be payable by Seller.

 

Section 5.08          Tax Matters.

 

(a)           All Income Tax Returns and other material Tax Returns required to be filed by or on behalf of Seller have been timely filed with the appropriate taxing authority in all jurisdictions in which such Tax Returns are required to be filed (after giving effect to any valid extensions of time in which to make such filings), and all such Tax Returns are true, complete and correct in all material respects; and all material amounts of Taxes payable by or on behalf of Seller have been paid.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

(b)           Seller has not received written notice of any Tax deficiency outstanding, proposed or assessed nor has Seller executed or waived any statute of limitations in respect of Taxes nor agreed to any extension of time with respect to a Tax assessment deficiency.  There is no ongoing or pending audit, action, suit, or administrative or judicial proceeding now pending or threated in writing against or with respect to Seller by any Tax authority.

 

(c)           There is no material dispute or claim concerning any Tax liability of Seller (A) claimed or raised by any authority in writing or (B) as to which the directors and officers of Seller have knowledge based upon personal contact with any agent of such authority.

 

(d)           There are no Liens for Taxes other than Permitted Liens upon any of the Acquired Assets.

 

(e)           Seller is not a party to any Income Tax allocation or sharing agreement.

 

(f)           Seller has not been a party to any “reportable transaction,” as defined in Code §6707A(c)(1) and Treasury Regulation §1.6011-4(b).

 

Section 5.09          Product Liability.  There is no currently pending nor, to the Knowledge of the Seller, any threatened action, suit, proceeding, hearing, investigation, charge, complaint, claim, recall or demand giving rise to any liability for product liability, warranty, material back-charge, material additional work, field repair or other claims by any Third Party (whether based on contract or tort and whether relating to personal injury, including death, property damage or economic loss) against the Seller or any of its Subsidiaries with respect to the Product in the Territory.  All services rendered in connection with the Product and the sale of the Product by the Seller or its Subsidiaries have been in conformity with all applicable contractual commitments and all express and implied warranties, and neither the Seller not its Subsidiaries has any liability (and there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand giving rise to any liability) for damages in connection therewith.  The Product is not subject to any guaranty, warranty, or other indemnity beyond the Seller’s standard terms and conditions of sale, a true, correct and complete copy of which has been delivered to Purchaser.  To Seller’s Knowledge, no event or circumstances have occurred that relate to the Product that would reasonably form the basis for a product liability claim.

 

  

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

Section 5.10          Inventory.  The Inventory consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice, except for obsolete, damaged, defective or slow-moving items in commercially reasonable amounts. All trade inventories of the Product comprising the Inventory have the expiration dates as set forth on Exhibit 2.01(a)(v).  To Seller’s Knowledge, all of the Inventory is, as of the date hereof, free of defects (including defects in labeling, packaging and storage) and systematic or chronic problems and complies in all material respects with all applicable specifications and all applicable Law, including all regulatory requirements and environmental Laws, including cGMP, and may be introduced into interstate commerce in the United States in accordance with applicable Law.  All Inventory that has been returned, has expired or has been deemed unusable or not fit for sale, has been or will be destroyed in accordance with the policies of the Seller and applicable Law. For purposes of this Agreement, the term “cGMP” means the then-current good manufacturing practices required by the FDA, as defined in21 C.F.R. Parts 210 and 211, for the manufacture and testing of pharmaceutical materials.

 

Section 5.11          Compliance with Law.  Seller is in compliance in all material respects with, and is not in material violation or non-compliance with, nor has Seller or any of its Subsidiaries received any written notice of any violation or non-compliance with, any applicable Law with respect to the Procut or the ownership or operation of the Acquired Assets.

 

Section 5.12          Permits.  Schedule 5.12 sets forth a complete and accurate list of all Permits with or from any Governmental or Regulatory Authority necessary for Seller or any of its Subsidiaries to own and operate the Acquired Assets.  Each of the Permits is in full force and effect, Seller is in compliance in all material respects with, and is not in material violation of any of, the terms, conditions and requirements of the Permits. Seller has not received any written, or to the Seller’s Knowledge, oral, notice with respect to any failure by the Seller to timely possess any Permit with or from any Governmental or Regulatory Authority.

 

Section 5.13          Regulatory Matters.

 

(a)           The Product has been researched, developed, tested, manufactured, supplied, promoted, distributed, marketed, commercialized, stored and sold, as applicable, by Seller and, to Seller’s Knowledge, by each other Person on behalf of Seller, in compliance in all material respects with (i) all applicable Laws and (ii) all Permits.  The Product is not adulterated or misbranded within the meaning of the FDA Act or any similar governmental act or Law of any jurisdiction.

 

(b)           Seller has made available to Purchaser complete and correct copies of (i) each NDA submitted by or on behalf of Seller to the FDA with respect to the Product; (ii) all other material document, correspondence, filing or other communication submitted to a Governmental or Regulatory Authority or the Department of Justice by or on behalf of Seller or received from a Governmental or Regulatory Authority or the Department of Justice by or on behalf of Seller, in each case, with respect to the Product or the Acquired Assets; (iii) all material scientific, clinical and safety data of Seller with respect to the Product; and (iv) all audit reports performed by Seller or on its behalf to assess Seller’s compliance with applicable Health Laws.

 

  

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(c)           Seller has not received, nor with respect to the Product is there any pending or outstanding:  (i) Form 483 observations, FDA warning letters or post-sale warnings or other regulatory warning letters or sanctions; (ii) inspectional observations or establishment inspection reports reciting penalties for corrective or remedial action or requiring corrective action plans; (iii) field notifications or alerts; (iv) import alerts, holds or detentions; or (v) other documents that, in the case of each of the preceding clauses (i) through (iv), have been received by Seller from the FDA or any other Governmental or Regulatory Authority relating to the Product, or to Seller’s Knowledge, any facility in which the Product is manufactured, packaged or stored, and that assert ongoing material lack of compliance with any such Laws by Seller.

 

(d)           Seller is not in violation of, and, to Seller’s Knowledge, Seller is not the subject of, any pending investigation by a Governmental or Regulatory Authority regarding activities prohibited under, the U.S. Anti-Kickback Act (42 U.S.C. § 1320a-7b(b), et seq.), the U.S. Stark Law (42 U.S.C. § 1395nn), the U.S. False Claims Act (31 U.S.C. § 3729, et seq.), the Trade Agreements Act (19 U.S.C. §§2501-2581) or any other Laws governing participation in United States healthcare programs, or any comparable state or foreign Laws.  There are no lawsuits, actions or proceedings pending or, to Seller’s Knowledge, threatened in writing against Seller that would reasonably be expected to result in the exclusion of Seller from any third party payment program in which they participate.

 

(e)           Seller has not received any written notice from the FDA or any other Governmental or Regulatory Authority that it has commenced, and to Seller’s Knowledge neither the FDA nor any other Governmental or Regulatory Authority has threatened to commence, any action to withdraw its approval or request the recall of the Product, or commenced, or to Seller’s Knowledge threatened to commence, any action to enjoin production at any facility at which the Product is manufactured.

 

(f)           Seller has not, and to Seller’s Knowledge, no director, officer, employee or agent of Seller has, committed an act, made a statement, or failed to make a statement, that would reasonably be expected to provide a basis for any Governmental or Regulatory Authority to invoke the FDA policy respecting “Fraud, Untrue Statements of Material Facts, Bribery and Illegal Gratuities,” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy, in each case as related to the Product or the Acquired Assets.  Seller, and, to Seller’s Knowledge, no director, officer, employee or agent of Seller, has been convicted of any crime or engaged in any conduct for which debarment or similar punishment is mandated or permitted by 21 U.S.C. § 335a(a) or any similar Laws or authorized by 21 U.S.C. § 335a(b) or any similar Laws.  Seller has not, and, to Seller’s Knowledge, no director, officer, employee or agent of Seller has been, convicted of any crime or engaged in any conduct for which such Person could be excluded from participating in the Federal health care programs under Section 1128 of the Social Security Act of 1935, as amended, or any similar Laws.

 

(g)           The annual Prescription Drug User Fees for the Product due for all time periods prior to the Closing have been timely paid by Seller in full when due.

 

  

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Section 5.14          Solvency.  Seller is not currently Insolvent and Seller shall not be rendered Insolvent by any of the transactions contemplated by this Agreement or the Other Ancillary Documents. Immediately after given effect to the consummation of the transaction contemplated by this Agreement: (a) Seller shall be able to pay its Liabilities as they become due in Seller’s ordinary course of business; (b) Seller shall not have unreasonable small capital with which to conduct its present or proposed business; and (c) Seller shall have assets (calculated at fair market value) that exceed its Liabilities.

 

Section 5.15          Financial Statements.  Seller has made available to Purchaser all material financial information related to the Product and the Acquired Assets reasonably requested by Purchaser.  Such financial information was derived from the books and records of Seller and was prepared by Seller in good faith and fairly presents, in all material respects, in accordance with Seller’s accounting practices and procedures, financial information with respect to the Product as of the dates and for the periods shown.

 

Section 5.16          Material Information.  To Seller’s Knowledge, Seller has not omitted to furnish Purchaser with any information in its control or possession, or of which it is aware, concerning the Product or the Acquired Assets which would, in Seller’s reasonable judgment, reasonably be material to Purchaser’s decision to enter into this Agreement.

 

ARTICLE VI

 

COVENANTS OF SELLER

 

Seller hereby covenants and agrees as follows:

 

Section 6.01          Access.  From the date hereof until the Closing, Seller shall give Purchaser and its representatives, employees, counsel and accountants reasonable access, during normal business hours and upon reasonable advance notice, to the Acquired Assets for purposes of conducting due diligence or otherwise in connection with the transactions contemplated hereby; provided, however, that such access (i) does not unreasonably disrupt the normal operations of Seller or a Third Party, (ii) would not reasonably be expected to violate any attorney-client privilege of Seller or violate any applicable Law, and (iii) would not reasonably be expected to breach any duty of confidentiality owed to any Person whether the duty arises contractually, statutorily or otherwise.

 

Section 6.02          Other Covenants.  From the date hereof until the Closing, the Seller shall conduct its business with respect to the Product and the Acquired Assets in substantially the same manner as presently conducted and shall not, prior to Closing, solicit or fill orders for the Product in a manner inconsistent with past practice, and, except as otherwise contemplated by the terms of this Agreement or any Other Acquisition Document, Seller will not without the prior written consent of Purchaser (such consent not to be unreasonably withheld):

 

(a)           except pursuant to existing Contracts, sell, assign, lease, license, transfer, hypothecate or otherwise dispose of, or agree to sell, assign, lease, license, transfer, hypothecate or otherwise dispose of, any of the Acquired Assets, or, with respect to Zuplenz in the Territory, the Licensed Intellectual Property, or create Assumed Liabilities;

 

  

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(b)           except with respect to the MonoSol License Agreement in accordance with Schedule 4.01(f), amend, terminate, renew, extend or waive in writing any right under any Transferred Contract if such amendment, termination, renewal, extension or waiver would adversely affect the rights to be transferred to Purchaser at the Closing; or

 

(c)           authorize, commit, or agree to take any of the foregoing actions.

 

Section 6.03          Payment of Indebtedness.  On or prior to the Closing, Seller shall pay or cause to be paid, in full, any Liabilities of Seller for monies due but not yet payable as of the Closing Date under the Transferred Contracts.

 

Section 6.04          Exclusivity.  Seller agrees that, until the earlier of the Closing or the termination of this Agreement, it will not, and will direct its agents and representatives not to, solicit, entertain, negotiate or consummate any inquiries or proposals with respect to the sale or disposition of the Product, the Acquired Assets or any material rights thereto, other than the sale of the finished Product in the ordinary course of business.

 

Section 6.05          Inventory.  At the time of the Closing, all Inventory acquired by the Purchaser shall have a shelf life of no less than 24 months from the date of Closing.  If any Inventory has a shelf life of less than 24 months the Seller shall, at its option, provide it to the Purchaser at no cost or provide Purchaser a replacement at no cost.

 

Section 6.06          SEC Reports.  For a period of nine months following the Closing Date, promptly following Purchaser’s written request within such period, Seller and its Subsidiaries will cooperate with Purchaser in connection with Purchaser’s preparation of audited and unaudited financial statements relating to the Product and any “business” (within the meaning of Item 3-05 and related Items of Regulation S-X under promulgated by the U.S. Securities and Exchange Commission (the “SEC”)) attributable to the Product as of and for any of the years ended in the three-year period ended December 31, 2014 and any calendar quarter ended prior to the Closing Date as may be necessary to enable Purchaser to comply with applicable financial reporting and other requirements with respect to reports and filings with the SEC.  If requested by Purchaser, Seller shall engage Seller’s or its Subsidiaries’ independent auditors, at Purchaser’s sole cost and expense, to audit such financial statements for the periods required by Regulation S-X of the SEC and to render an opinion on such financial statements. Seller will provide, if required by Purchaser’s independent auditors, customary executed representation letters required to enable independent auditors to render an opinion on audited financial statements.  Seller shall request, and take reasonable steps to encourage, its and its Subsidiaries’ auditors to cooperate with Purchaser and its auditors.  For the avoidance of doubt, (i) all reasonable and documented out-of-pocket costs incurred by Seller and its Subsidiaries in performing its obligations under this Section 6.06 shall be the sole responsibility of Purchaser, and (ii) Seller and its Subsidiaries shall have no obligation to provide, or cause any Third Party to provide, any such information of any Third Party in performing its obligations under this Section 6.06.

 

  

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

Section 6.07          Competing Product.  Seller agrees that for the period commencing on the Closing Date and ending on the seventh anniversary of the Closing Date, neither Seller nor its Subsidiaries will directly or indirectly sell, market, develop, distribute, manufacture or otherwise promote, including pursuant to a license, any Competing Product in the Territory, or actively and knowingly assist any Third Party to do any of the foregoing.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Seller as follows:

 

Section 7.01         Authority.  Purchaser is a public limited company duly organized, validly existing and in good standing under the laws of the England and Wales.  Purchaser has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and the Other Acquisition Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby.  All corporate acts and other proceedings required to be taken by Purchaser to authorize the execution, delivery and performance of this Agreement and the Other Acquisition Documents to which it is, or is specified to be, a party and to consummate the transactions contemplated hereby and thereby have been duly and properly taken.  This Agreement has been duly executed and delivered by Purchaser and, assuming this Agreement has been duly authorized, executed and delivered by Seller, constitutes, and the Other Acquisition Documents on the Closing Date will be duly executed by Purchaser, and upon the due authorization, execution and delivery by each other party to the Other Acquisition Documents, will constitute a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and to general equitable principles.  No other proceeding on the part of the Purchaser is necessary to authorize this Agreement, the Other Acquisition Documents or the transactions contemplated hereby and thereby.

 

Section 7.02          No Conflicts; Consents.

 

(a)           The execution, delivery and performance of this Agreement by Purchaser does not, and the execution, delivery and performance by Purchaser of each Other Acquisition Document to which it is, or is specified to be, a party will not, and the consummation of the transactions contemplated hereby and thereby and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation, or result in the creation of any Lien upon any of the properties or assets of Purchaser under, any provision of (i) its articles of association, (ii) any Contract to which Purchaser is a party or by which any of its properties or assets are bound, or (iii) any judgment, order, or decree, or, subject to the matters referred to in Section 7.02(b) below, any Law applicable to Purchaser, its properties or assets, other than, in the case of clause (i) and (ii) above, any such items that would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on the ability of Purchaser to consummate the Acquisition.

 

  

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(b)           No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental or Regulatory Authority or Third Party is required to be obtained or made by or with respect to Purchaser in connection with the execution, delivery and performance of this Agreement, the Other Acquisition Documents or the consummation of the transactions contemplated hereby or thereby, other than such consents, approvals, licenses, permits, orders, authorizations, registrations, declarations and filings the absence of which, or the failure to make which, individually or in the aggregate, (i) would not be reasonably likely to have a material adverse effect on the ability of Purchaser to consummate the Acquisition or perform its obligations under this Agreement or the Other Acquisition Documents, and (ii) would not give rise to any liability of Seller or any of its Affiliates as a result of the consummation of the Acquisition.

 

Section 7.03          Litigation.  As of the date hereof, there are no (a) outstanding judgments, orders, injunctions or decrees of any Governmental or Regulatory Authority or arbitration tribunal against Purchaser, (b) except as set forth on Schedule 7.03(b) of the Purchaser’s disclosure schedules, lawsuits, actions or proceedings pending or, to the knowledge of Purchaser, threatened against Purchaser, or (c) investigations by any Governmental or Regulatory Authority which are pending or, to the knowledge of Purchaser, threatened against Purchaser, which, in the case of each of clauses (a), (b) and (c), have had or would be reasonably likely to have a material adverse effect on the ability of Purchaser to consummate the Acquisition and the other transaction contemplated by this Agreement and the Other Acquisition Documents.

 

Section 7.04          Availability of Funds.  Purchaser has cash available or has existing committed borrowing facilities, which together are sufficient to enable it to consummate the Acquisition.

 

Section 7.05          Brokers or Finders.  Except for The Fulford Group, no agent, broker, investment banker, financial advisor or other firm or Person is or will be entitled to any broker’s, financial advisor’s or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement or the Other Acquisition Documents based upon arrangement made by or on behalf of Purchaser or any of its Affiliates.  For the avoidance of doubt, all fees due to The Fulford Group in connection with any of the transactions contemplated by this Agreement or the Other Acquisition Documents shall be payable by Purchaser.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

ARTICLE VIII

 

COVENANTS OF PURCHASER

 

Purchaser hereby covenants and agrees as follows:

 

Section 8.01          Advise Seller.  Purchaser shall promptly advise Seller in writing of any change or event occurring between the date hereof and the Closing Date which Purchaser believes (i) would be reasonably likely to result in the failure of any of the conditions to the Closing set forth in Article IV to be satisfied as of the Closing Date, or (ii) would be reasonably likely, individually or in the aggregate, to have a material adverse effect on the ability of Purchaser to consummate the Acquisition or the other transactions contemplated by this Agreement and the Other Acquisition Documents.

 

Section 8.02          Records.

 

(a)           Purchaser shall, from the Closing Date until the date that is five years following the Closing Date, keep full and accurate books of all accounts and other records included within the Acquired Assets and make such books and records available for inspection and copying by Seller or its agents, at its sole expense, upon reasonable request and upon reasonable notice.

 

(b)           Purchaser shall, from the Closing Date until the third anniversary of the end of the Milestone Period, as applicable, keep accurate books and records of all accounts and other records in sufficient detail so that any Net Sales Statement can be properly and fully ascertained.  Purchaser shall, at the request of Seller, permit a nationally recognized independent certified public accountant selected by Seller that is not at the time of selection serving as the independent registered public accounting firm of Seller, and that is reasonably acceptable to Purchaser (the “Independent Auditor”), to have access during ordinary business hours and upon no less than 30 days’ prior written notice, but on no more than one occasion per calendar year, to such books and records as may be reasonably necessary to determine the accuracy of any Net Sales Statement.  The Independent Auditor shall be bound by a confidentiality agreement, in a form reasonably acceptable to Purchaser, to keep all information acquired from Purchaser confidential, and shall be permitted to disclose to Seller only whether any Net Sales Statement was accurate and the amount, if any, owed to or by Seller pursuant to Section 3.03(a). The Independent Auditor shall send a copy of its written reports to Purchaser at the same time it is sent to Seller.  Seller shall be responsible for the fees and expenses of the Independent Auditor, provided, however, that Purchaser shall reimburse Seller in full for all such documented costs and expenses of the Independent Auditor if the Independent Auditor determines that the amounts paid pursuant to Section 3.03(a) are less than 98% of the amount actually owed pursuant to the applicable Net Sales Statement.

 

Section 8.03          Disclaimer.        PURCHASER ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN ARTICLE V, SELLER MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND, EXCEPT AS SET FORTH IN ARTICLE X, ASSUMES NO RESPONSIBILITY AFTER CLOSING WHATSOEVER IN RESPECT OF THE ACQUIRED ASSETS.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

ARTICLE IX

 

MUTUAL COVENANTS

 

Section 9.01          Efforts.

 

Subject to the terms and conditions of this Agreement, following the date hereof, each Party shall use its commercially reasonable efforts to cause the Closing to occur as soon as practicable thereafter.  Following the date hereof, each of Seller and Purchaser shall not, and shall not permit any of their respective Affiliates to, take any action that would, or that would reasonably be expected to, result in any of the conditions set forth in Article IV not being satisfied.  This Section 9.01 shall not, and shall not be deemed to, restrict or prohibit Seller or Purchaser in any way whatsoever from exercising any and all rights and remedies available to it under this Agreement or any of the Other Acquisition Documents.  Each of Seller and Purchaser shall cooperate with the other Party and its employees, legal counsel, accountants and other representatives and advisers in connection with the steps required to be taken as part of their respective obligations under this Agreement; and each of them shall, at any time and from time to time after the Closing, upon the reasonable request of the other, do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, receipts, acknowledgments, acceptances and assurances as may be reasonably required (without incurring unreimbursed expense) to satisfy and perform the obligations of such party hereunder, and to allow Purchaser to accomplish the Intended Use of Zuplenz in the Territory after the Closing.

 

Section 9.02          Bulk Transfer Laws.  Purchaser acknowledges that Seller and its Affiliates will not comply with the provisions of any so-called “bulk transfer law” of any jurisdiction in connection with the sale of the Acquired Assets to Purchaser.

 

Section 9.03           Transfer Taxes.  Seller, on the one hand, and Purchaser, on the other hand, shall each be responsible for 50% of all transfer, documentary, sales, use, stamp, registration and other such Taxes, applicable to the Acquisition (such Taxes, together with any interest, penalties and additions thereto, collectively, “Transfer Taxes”).  Each Party shall file all necessary Tax Returns and other documentation required to be filed by it under applicable Law with respect to all Transfer Taxes, and, if required by applicable Law, the other Party will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.  Purchaser and Seller shall cooperate in providing each other with any appropriate resale exemption certifications and other similar documentation required to obtain any exemption from (or reduction in) Transfer Taxes, and shall cooperate in taking any commercially reasonable steps permitted by applicable Law to minimize the Parties’ liability for Transfer Taxes.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

Section 9.04          Purchase Price Allocation.

 

(a)           The Parties agree that the Purchase Price and Assumed Liabilities shall be allocated among the Acquired Assets sold by Seller and each of its Affiliates and purchased by Purchaser in a manner consistent with Section 1060 of the Code and the Treasury regulations promulgated thereunder (and corresponding provisions of applicable foreign Law) (for the avoidance of doubt, an allocation different from an allocation under Section 1060 of the Code and the Treasury regulations promulgated thereunder may be required by applicable Tax Law or foreign Law to be taken for local country Tax or accounting purposes) and in accordance with an allocation schedule set forth by Purchaser and delivered to Seller within ninety (90) days after Closing (the “Allocation”).  Seller shall have the right to review and raise any objections in writing to the Allocation during the thirty (30) day period after its receipt thereof. In the event of a disagreement that cannot be resolved by the parties discussing in good faith during such thirty (30) day period, a nationally recognized independent accounting firm mutually acceptable to Purchaser and Seller shall settle such dispute with the costs of such firm being borne equally by Seller and Purchaser.

 

(b)           Purchaser and Seller agree to (i) be bound by the Allocation for all U.S. federal income tax purposes, (ii) act in accordance with the Allocation in the preparation of all U.S. Tax Returns (including filing Form 8594), and (iii) take no position inconsistent with the Allocation for all U.S. Tax purposes, unless otherwise required by Law. In the event that any Taxing Authority disputes the Allocation, Seller or Purchaser, as the case may be, shall promptly notify the other Party of the nature of such dispute and consult with the other Party and keep such other Party reasonably apprised of material developments concerning the resolution of such dispute.

 

Section 9.05          Recordation of Transferred Intellectual Property.  Purchaser, at its sole cost and expense shall be responsible for all applicable recordations of the assignment of the Transferred Intellectual Property.  Seller agrees to execute and deliver to Purchaser, within a reasonable time after the Closing, such assignments and other documents, certificates and instruments reasonably requested by Purchaser for Purchaser’s filing with the applicable registries and other recording authorities to record the transfer of the Transferred Intellectual Property in accordance with applicable Law.

 

Section 9.06          Confidentiality and Confidential Information.

 

(a)           The terms of the Confidentiality Agreement are hereby incorporated in this Agreement as though fully set forth herein and shall apply to any information provided by Seller or Purchaser pursuant to this Agreement. As used in this Section 9.06, the term “Confidential Information” shall have the meaning assigned to that term in the Confidentiality Agreement.  Upon the Closing, the Confidentiality Agreement shall expire and be of no further force and effect with respect to all Confidential Information related to the Product, the Acquired Assets or the Assumed Liabilities; provided, however, such expiration shall in no such way prejudice or adversely affect Seller’s or Purchaser’s ability to seek damages, or any other remedy available to Seller or Purchaser, as appropriate, with respect to a violation by such Party (or its Affiliates or representatives) of the Confidentiality Agreement prior to or after the Closing Date. Upon and after the Closing Date, the Confidentiality Agreement shall remain in full force and effect pursuant to its terms with respect to all other Confidential Information that does not relate to the Product, the Acquired Assets or the Assumed Liabilities.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

(b)           From and after the Closing Date, all Confidential Information exclusively concerning the Product, the Acquired Assets and the Assumed Liabilities (the “Purchaser Proprietary Information”) shall be used by Seller and its Affiliates solely as required to perform its obligations, exercise or enforce its rights under this Agreement (or any Other Acquisition Document), to comply with applicable Law, or as otherwise required by Seller in connection with disputes or matters concerning any Third Party related solely to the period before the Closing Date (each a “Permitted Purpose”), and for no other purpose except as authorized by Purchaser.  Seller shall not disclose, or permit the disclosure of any of the Purchaser Proprietary Information to any Person except those Persons to whom such disclosure is necessary for a Permitted Purpose.  Seller shall treat, and will cause its Affiliates and the directors, officers, employees, agents, representatives and advisors of Seller or any of their Affiliates to treat, the Purchaser Proprietary Information as confidential, using the same degree of care as Seller normally employs to safeguard its own confidential information from unauthorized use or disclosure, but in no event less than a reasonable degree of care.

 

(c)           All Confidential Information obtained by Purchaser (or its Affiliates or representatives) from Seller (or its Affiliates or representatives) other than the Purchaser Proprietary Information (the “Seller Proprietary Information”) shall be used by Purchaser solely as required to perform its obligations, exercise or enforce its rights under this Agreement (or any Other Agreement), or comply with applicable Law, and for no other purpose.  Purchaser shall not disclose, or permit the disclosure of, any of the Seller Proprietary Information to any Person except those Persons to whom such disclosure is necessary to permit Purchasers to perform its obligations, exercise or enforce its rights under this Agreement (or any Other Acquisition Document), or comply with applicable Law.  Purchaser shall treat, and will cause its Affiliates and the directors, officers, employees, agents, representatives and advisors of Purchaser or any of their Affiliates to treat, the Seller Proprietary Information as confidential, using the same degree of care as Purchaser normally employs to safeguard its own confidential information from unauthorized use or disclosure, but in no event less than a reasonable degree of care.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

(d)           Either Party may be entitled to disclose the other Party’s Confidential Information (including Seller Proprietary Information or Purchaser Proprietary Information, as applicable) that is requested or required to be disclosed to be disclosed (i) to or by any Governmental or Regulatory Authorities; (ii) to comply with applicable Laws (including, without limitation, to comply with SEC or any other stock exchange disclosure requirements), (iii) to comply with judicial process or an order of any Governmental or Regulatory Authority of competent jurisdiction, or (iv) to defend or prosecute litigation; provided, however, that in each case the Party required or requested to disclose such Confidential Information shall, to the extent legally permissible, use reasonable efforts to notify the other Party in a timely manner  so that the such Party may seek a protective order or other appropriate remedy of such Confidential Information, to the extent available, or, in such Party’s sole discretion, waive compliance with the confidentiality portion of this Agreement. Each Party will cooperate in all reasonable respects, in connection with any reasonable actions to be taken for the foregoing purpose; provided further that the disclosing Party shall only disclose the portion of Confidential Information which such Party is advised by a reasoned opinion of counsel is legally required, and such Party exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such Confidential Information.

 

(e)           This obligations set forth in this Section 9.06 shall survive the Closing for five years (the “Confidentiality Period”).  If this Agreement is terminated, the terms of the Confidentiality Agreement shall apply. Upon the termination of the Confidentiality Period, a receiving Party shall return to the disclosing Party or destroy all Confidential Information (other than the Seller Proprietary Information or Purchaser Proprietary Information, as applicable) provided to it by the disclosing Party, including all copies, notes and extracts thereof or other written records containing such Confidential Information, except for (x) one (1) copy that it may keep in counsel’s secure files for the sole purpose of verifying its continuing confidentiality obligations hereunder, and (y) archival copies residing on back-up tapes made by such party in the ordinary course of business; provided, that for the avoidance of doubt, Purchaser and Seller shall not be obligated hereby to return or destroy any Confidential Information that constitutes Purchaser Proprietary Information or Seller Proprietary Information, respectively.

 

Section 9.07          NDC, UPC, Excluded Trademarks and Seller Names.

 

(a)           Until the earlier of (i) 12 months following the Closing Date or (ii) Purchaser’s establishment of the Purchaser NDC Numbers as set forth in Section 9.07(b), Seller grants a fully paid, royalty free, non-exclusive right and license to Purchaser to use the names and logos of Seller (the “Seller Names”), the Universal Product Code (“UPC”) for the Product, Seller’s National Drug Code for the Product (the “NDC”), and the Excluded Trademarks to the extent necessary to allow Purchaser to market, distribute and sell the Products in the Territory.  Seller shall not discontinue the NDC associated with the Product as of the date hereof, provided that, as soon as practicable following the Closing Date, but in no event more than 12 months thereafter, Purchaser will establish a new NDC number (the “Purchaser NDC Number”) and notify Seller thereof.  Notwithstanding the foregoing, Purchaser shall be permitted to continue to sell the Product in its then existing inventory with the former NDC Number until exhausted, provided further that Purchaser shall sell all inventory bearing Seller’s NDC Number prior to selling any inventory bearing Purchaser’s NDC Number.

 

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

(b)           In no event shall Purchaser use any Seller Names, UPC, NDC or Excluded Trademarks in any manner or for any purpose different from the use of such Seller Names, UPC, NDC and Excluded Trademarks by Seller and its Affiliates immediately prior to the Closing Date to package, market, distribute and sell the Product in the Territory without the prior written consent of Seller, and at all times shall comply in all material respects with Laws applicable thereto.  Without limiting the foregoing, Purchaser shall not: (i) take any action that may interfere with any of Seller’s rights in the Seller Names, UPC, NDC and Excluded Trademarks; (ii) register or apply for registrations, anywhere in the world, for the Seller Names or Excluded Trademarks or any other similar trademark; or (iii) knowingly engage in any action which has the specific purpose or intent of disparaging the Seller Names or the Excluded Trademarks.

 

(c)           Notwithstanding the foregoing, the Parties acknowledge that this Agreement does not, and shall not, convey, transfer or assign any right, title or interest in any trademark, name or logo of any Third Party or to Purchaser in any Excluded Trademark, Seller Names, or any other intellectual property of Seller except as specifically provided for herein.

 

Section 9.08          Channel Liabilities.

 

(a)           Returns.  For the period from the Closing through twelve months thereafter, Seller shall bear the cost of returns of any Product which Seller previously sold; provided, however, that such returns will be subject to the requirement that the Product being returned shall have been returned in compliance with Seller’s standard Healthcare Distribution Management Association return policy guidelines or have been accepted by Seller during such twelve month period.  From and after such twelve month period, Purchaser shall be responsible for all returns of the Product; provided, however, that Purchaser shall not be responsible for any downstream returns from end user customers or returns from wholesalers from Inventory existing as of the Closing that was sold by the Seller prior to the Closing Date.  For the avoidance of doubt, Purchaser shall bear the cost of returns of all Product sold by or on behalf of Purchaser.  Where a portion of a production lot of the Product is sold by Seller prior to the Closing and the remaining portion of such production lot of the Product is sold by Purchaser following the Closing, the liability for the return of any unit of Product of such production lot within the twelve month period referenced above shall be allocated to Seller and Purchaser based on actual sales by either the buyer or the seller of the identified lots associated with such returns. All returns of Product following the Closing will be processed by Purchaser, through a Purchaser-identified third party logistics provider. During the twelve month period following the Closing Seller shall bear the cost of any returns for which it is responsible for and will reimburse Purchaser for such costs associated with these returns.

 

(b)           Medicaid Rebates.

 

  

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(i)           Seller shall bear the cost of a portion of Medicaid Rebates bearing the Seller’s NDC billed by applicable Governmental or Regulatory Authorities with respect to the calendar quarter in which the Closing occurs, such portion to equal the product of the aggregate amount of Medicaid Rebates billed by applicable Governmental or Regulatory Authorities with respect to Product dispensed in such calendar quarter multiplied by a fraction, (i) the numerator of which is the total number of days from the first day of such calendar quarter through the Closing, plus thirty (30) and (ii) the denominator of which is the total number of days from the first day of such calendar quarter through the last day of such calendar quarter; provided, however, that Purchaser  shall bear the additional costs of any Medicaid Rebates payable by Seller with respect to such calendar quarter, to the extent the costs payable as provided above exceed Seller’s historical Medicaid Rebates as a result of price increases or the setting of any new “best price” for the Product established by the Purchaser with respect to such calendar quarter.  The Purchaser shall bear the cost of the balance of Medicaid Rebates billed by Governmental or Regulatory Authorities with respect to such calendar quarter in which the Closing occurs, and the cost of Medicaid Rebates billed by applicable Governmental or Regulatory Authorities with respect to subsequent time periods.  For the avoidance of doubt, Seller shall be entitled to any and all federal and state Medicaid refunds, credits and other adjustments relating to the sale of the Product dispensed on or prior to the Closing and Purchaser shall be entitled to any and all federal and state Medicaid refunds, credits and other adjustments relating to the sale of the Product dispensed after the Closing.

 

(ii)           Notwithstanding any other provision of this Agreement, following the Closing, Seller shall be responsible for the administration of the Medicaid Rebate process for any products which bear the NDC associated with a Product as of the date hereof and Purchaser shall be responsible for the administration of such process for any products which bear a Purchaser NDC Number.  Seller, on the one hand, and the Purchaser, on the other hand, shall each furnish the other with any information necessary for each party’s performance of its administrative responsibilities pursuant to this Section 9.08(b) in the form reasonably requested by the other party, including, without limitation, applicable pricing information.  For so long as Seller is responsible for the administration of the Medicaid Rebate process for the Product, the Purchaser shall provide Seller with the necessary information within five days of the close of each calendar quarter in the form reasonably requested by Seller.  Any fines associated with incorrect or late information provided by Seller or the Purchaser to the other party under this Section 9.08(b) shall be reimbursed by Seller or the Purchaser, as the case may be, to the other party.

 

(c)           Payment Claims.  Seller shall bear the liability for any Payment Claims arising from sales of Product by customers any time prior and up to sixty days following the Closing.  The Purchaser shall bear the liability for any Payment Claims arising from sales of Product by customers any time after 60 days following the Closing.  However, each party shall be responsible for administration and payment of any Payment Claims it receives subject to the reconciliation and reimbursement procedure set forth below.  Seller, on the one hand, and Purchaser, on the other hand, shall each furnish the other with any information necessary for each party’s performance of its administrative responsibilities pursuant to this Section 9.08(c) in the form reasonably requested by the other party, including, without limitation, applicable pricing information.  Within 90 days following the Closing, each of Seller and the Purchaser shall send the other an accounting of all payments it has made on Payment Claims which are the obligation of the other party.  Each party shall, within 30 days of receiving such accounting, reimburse the other party for such payments.

 

  

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

Section 9.09          Adverse Experience Reports.  Within three Business Days after the Closing, Seller shall provide Purchaser with copies of all adverse experiences in its or its Affiliates possession or control regarding the Product, since the date of Seller’s first commercial sale of any Product in the United States.  After the Closing, Seller shall submit to Purchaser all adverse drug experience information brought to the attention of Seller or its Affiliates in respect of the Product, as well as any material events and matters concerning or affecting the safety of the Product.  Additionally, after the Closing, Seller shall assist Purchaser with the provision of data relating to adverse experiences for the Product, for Purchaser’s preparation of its first Periodic Adverse Drug Experience Report after the Closing.  After the Closing, Purchaser shall have all responsibility for investigating and reporting adverse experiences for the Products, and addressing any FDA or other Governmental or Regulatory Authority inquiries relating to the safety of the Product. Purchaser shall reimburse Seller for any and all out-of-pocket expenses incurred by Seller in connection with its assistance of Purchaser as provided in this Section 9.09.

 

Section 9.10          Response to Medical Inquiries and Products Complaints.  After the Closing, the Purchaser shall assume all responsibility for responding to any medical inquiries or complaints about the Product.  For a period of three months from the Closing, Seller shall provide reasonable assistance in responding to such inquiries or complaints.  The Purchaser shall reimburse Seller for any and all out-of-pocket expenses incurred by Seller in connection with its assistance of the Purchaser as provided in this Section 9.10.

 

Section 9.11          Recall.  Subject to the indemnification rights of each party as set forth in Article X hereof, in the event that the Product is quarantined or recalled, or is subject to stop-sale action, whether voluntary or by governmental action, it is agreed and understood that any expenses, including reasonable fees of any experts or attorneys that may be utilized by either party, government fines or penalties, related to such recall, quarantine or stop-sale, shall be borne by Purchaser unless it is determined that Seller has breached its obligations under this Agreement and such breach is a significant basis upon which said recall, quarantine or stop-sale was initiated, in which case such expenses shall be shared according to the relative responsibility of each party.  Said determination may be made by the Governmental or Regulatory Authority involved, or by mutual agreement of the parties following examination and review of all records pertinent to the manufacture of the Product subject to such recall

 

Section 9.12          Post-Closing Orders and Payments.

 

(a)           From and for three months after the Closing Date, Seller shall promptly deliver to Purchaser any purchase orders for the Product received after the Closing, and refer all purchase inquiries it shall receive with respect to the Products in the Territory (other than with respect to Excluded Assets or Excluded Liabilities), to Purchaser or its designee.

 

  

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(b)           From and after the Closing, in the event Purchaser, on the one hand, makes a payment in respect of an Excluded Liability, or Seller, on the other hand, makes a payment in respect of an Assumed Liability as set forth in Section 2.02 of this Agreement, which ultimately is determined to be the responsibility of the other Party in accordance with Section 2.02 hereof, the other Party shall reimburse the Party which made the erroneous payment within fifteen (15) days after the receipt of an invoice containing supporting detail for such payment.  In the event Purchaser, on the one hand, received a payment in respect of an Acquired Asset, or Seller, on the other hand, receives a payment in respect of an asset of Seller which is not an Acquired Asset as set forth in Section 2.01 of this Agreement, which ultimately is determined to be a receivable of the other Party in accordance with Section 2.01 hereof, the Party which received the erroneous payment shall remit such amount to the other Party within fifteen (15) days after the receipt of such payment.

 

Section 9.13          Notification of Customers.  Seller and Purchaser shall jointly notify Seller’s direct customers (including wholesalers) of the Product after the Closing Date in forms of letter to be agreed upon, that Purchaser has acquired and Seller has transferred the right to market, distribute and sell the Product in the Territory.

 

Section 9.14          Assistance with Purchaser Regulatory Filings; Transfer of NDAs.

 

(a)           For the period of time commencing on the Closing Date and ending six months after the Closing Date, Seller shall provide reasonable assistance to Purchaser in its preparation and filing with the FDA of filings required to be filed by Purchaser in connection with the Product in the Territory, including without limitation, furnishing a letter(s) from Seller to the FDA, duly executed by the Seller, transferring the rights to the Transferred FDA Permits to the Purchaser once all regulatory files have been transferred.  To the extent that the next annual report with respect to any NDA is due more than six months from the Closing Date, Seller shall also provide reasonable assistance to Purchaser in the preparation of such annual report.  It is understood and agreed that Purchaser, as the owner of the Product Registration for the Products, shall have the responsibility for all regulatory filings after the Closing Date.  Seller’s obligations pursuant to this Section 9.14 shall be limited to assistance with respect to matters and information that are in the possession or control of Seller and not otherwise in the possession or control of Purchaser.

 

(b)           For the period from the Closing Date through six months thereafter, Seller shall cooperate with Purchaser in disclosing and copying any relevant records and reports which are required to be made, maintained and reported pursuant to any Governmental or Regulatory Authority or applicable Law in the Territory.  The parties agree to use their reasonable efforts to take any other actions required by the FDA or other Governmental or Regulatory Authority to effect the transactions contemplated hereby.  On the Closing Date, each of the parties hereto shall take any actions necessary to effect the transfer of the NDA and Permits from Seller to Purchaser, including notices to the FDA or other Governmental or Regulatory Authority regarding such transfer from Seller to Purchaser of the NDAs and Permits.  Except as otherwise expressly provided for herein, all costs related thereto shall be borne by Purchaser.

 

  

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Section 9.15          Marketing and Reference Materials.  Subject to the terms and conditions of Section 9.07(b), if applicable, Seller grants to Purchaser a non-exclusive license to use, reproduce and make derivative works of the Marketing and Reference Materials in the Territory in connection with Purchaser’s marketing, use, and sale of the Product in the Territory.

 

Section 9.16          Transitional Assistance.  Seller, for a period of 120 days after the Closing Date, shall, at Purchaser’s sole cost and expense, provide to Purchaser reasonable transitional assistance in connection with its sale of the Product in the Territory; provided, however, (i) notwithstanding anything set forth in Section 9.14(b), any costs in connection with the transfer of any NDA or Marketing Authorization Application to Purchaser shall be Seller’s sole cost and expense, and (ii) nothing contained herein shall require Seller to maintain any level of commercial infrastructure or expertise (other than regulatory) post-Closing to support Purchaser, including without limitation with respect to maintenance of field support, employees, promotional activities or managed care activities.

 

ARTICLE X

 

INDEMNIFICATION

 

Section 10.01        Indemnification by Seller.  From and after the Closing, Seller shall defend, indemnify and hold harmless Purchaser, its Affiliates and their respective employees, agents, officers and directors (collectively, the “Purchaser Indemnitees”), from and against any and all losses, liabilities, obligations, claims, fees (including, without limitation, reasonable documented attorneys’ fees and documented fees of other professionals), expenses and lawsuits (“Losses”) suffered or incurred by any Purchaser Indemnitee to the extent arising from or relating to any of the following:

 

(a)           the breach of any representation or warranty of Seller contained in this Agreement, any Other Acquisition Document or any certificate delivered hereunder;

 

(b)           the breach of or failure to comply with any covenant or obligation of Seller under this Agreement or any Other Acquisition Document;

 

(c)           the Excluded Liabilities; and

 

(d)           Seller’s portion of the Transfer Taxes.

 

Section 10.02        Indemnification by Purchaser.  From and after the Closing, Purchaser shall defend, indemnify and hold harmless Seller, its Affiliates and their respective employees, agents, officers and directors (collectively, the “Seller Indemnitees”), from and against any and all Losses suffered or incurred by any Seller Indemnitee to the extent arising from or relating to any of the following:

 

  

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(a)           the breach of any representation or warranty of Purchaser contained in this Agreement any Other Acquisition Document or any certificate delivered hereunder;

 

(b)           the breach of or failure to comply with any covenant or obligation of Purchaser under this Agreement or any Other Acquisition Document;

 

(c)           any Assumed Liability; and

 

(d)           Purchaser’s portion of the Transfer Taxes.

 

Section 10.03        Indemnification Procedure.

 

(a)           Procedures Relating to Indemnification for Third Party Claims.  In order to receive the benefits of the indemnity under Section 10.01 or Section 10.02, as applicable, in respect of, arising out of or involving a claim or demand made by any Third Party (a “Third Party Claim”) against a Purchaser Indemnitee or Seller Indemnitee (either, an “Indemnitee”), such Indemnitee must:

 

(i)           give the indemnifying Party (the “Indemnitor”) written notice describing the matter in reasonable detail, including the nature of any claim or potential claim, promptly after the Indemnitee receives notice thereof; provided that failure of the Indemnitee to provide such notice shall not constitute a waiver of, or result in the loss of, such Party’s right to indemnification under this Agreement, except to the extent that the Indemnitor’s rights, and/or its ability to defend against or settle such claim or potential claim, are materially prejudiced by such failure to notify;

 

(ii)           allow the Indemnitor to assume the control of the defense or settlement with counsel of its choice reasonable satisfactory to the Indemnitee, provided that (A) settlement of, or an adverse judgment with respect to, the Third Party Claim shall not include any admission or ongoing obligation or restriction on the part of the Indemnitee, and with respect to indemnification by the Seller, such settlement may not adversely affect the rights of the Purchaser with respect to the Acquired Assets (including the Product) or the Assumed Liabilities without the Purchaser’s prior written consent, and (B) the Third Party Claim involves only monetary damages (which amount shall be fully indemnified by the Indemnitor); and

 

(iii)           reasonably cooperate with the Indemnitor in its defense of the claim (including, without limitation, making documents and records available for review and copying and making persons within the Indemnitee’s control available for pertinent interview and testimony), so long as such cooperation does not vitiate any legal privilege to which such Indemnitee is entitled.

 

  

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If the Indemnitor defends the Third Party Claim, the Indemnitee may at its expense and using attorneys of its choice, participate in, but shall not have any control of, the defense of such claim. The Indemnitor shall have no liability under this Article X as to any claim for which settlement or compromise of such claim, or an offer of settlement or compromise of such claim, is made by an Indemnitee without the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld, delayed or conditioned.

 

Section 10.04        Procedures Related to Indemnification for Other Claims.  An Indemnitee seeking indemnification under Section 10.01 or Section 10.02, as applicable, that does not involve a Third Party Claim shall, as soon as reasonably practicable after receipt deliver to the Indemnitor, written notice (a “Direct Claim Notice”) describing in reasonable detail the facts giving rise to the indemnification claim to the extent then known, provided, however, that the failure by any Indemnitee to so notify the Indemnitor shall not relieve the Indemnitor from any liability which it may have to such Indemnitee under Section 10.01 or Section 10.02, as applicable, except to the extent that the Indemnitor has been materially prejudiced by such failure.  The Indemnitor shall have thirty (30) days after its receipt of a Direct Claim Notice to (i) agree to the amount set forth in the Direct Claim Notice and pay such amount to such Indemnitee in immediately available funds or (ii) provide such Indemnitee with written notice that it disputes its obligation to provide the indemnification sought in the Direct Claim Notice (a “Claim Dispute Notice”).  If the Indemnitor does not notify the Indemnitee within forty-five (45) days following its receipt of such notice that Indemnitor disputes its liability to the Indemnitee with respect to such claim, such claim specified in the Direct Claim Notice shall be conclusively deemed a liability of the Indemnitor.  If the Indemnitor delivers a Claim Dispute Notice, the Indemnitee and the Indemnitor shall negotiate in good faith to resolve the matter.  In the event that the controversy is not resolved within 20 Business Days after the giving of the Claim Dispute Notice, the parties thereafter may pursue any and all available remedies at law (subject to the limitations and conditions provided in this Agreement).

 

Section 10.05        Losses Net of Insurance, Tax Benefits.  The amount of any Loss for which indemnification is provided under this Article X shall be net of any amounts recovered by the Indemnitee under insurance policies or in respect of any indemnity or contribution with respect to such Loss; provided that in no event shall any indemnification payment be delayed in anticipation of the receipt of any such insurance proceeds, and provided further, that in the event a portion of indemnification payment is made with respect to which proceeds are later received, the Indemnitee shall promptly remit payment to the Indemnitor with respect to that portion of such payment which is later covered.

 

Section 10.06        Limitation on Indemnification.

 

(a)           Notwithstanding anything to the contrary herein, (i) Seller shall not have any liability under Section 10.01(a), unless the aggregate of all Losses for which Seller would be liable under Section 10.01(a) exceeds on a cumulative basis, an amount equal to $25,000 (the “Deductible Amount”), and then only to the extent of any such excess, (ii) Seller’s aggregate liability under Section 10.01(a)  and (b) shall in no event exceed, on a cumulative basis, the Seller Liability Cap, provided, however, that there shall be no cap on Seller’s liability for Losses under Sections 10.01(c) and (d), (iii) the Purchaser’s aggregate liability under Sections 10.02(a) and (b) shall in no event exceed, on a cumulative basis, the Purchaser Liability Cap; provided, however that there shall be no cap on the Purchaser’s liability for Losses under Section 10.02(c) and (d).

 

  

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(b)           Following the Closing, the Parties’ rights to indemnification pursuant to this Article X shall, except for equitable relief and specific performance of covenants that survive Closing, be the sole and exclusive remedy available to the parties with respect to any matter arising under or in connection with this Agreement or the transactions contemplated hereby, other than for claims of intentional misrepresentation or fraud.  Each Party hereby waives, from and after the Closing Date, to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action it or any of its Affiliates may have against the other Party and its Affiliates arising under or based upon this Agreement, the Other Acquisition Documents, any document or certificate delivered in connection herewith, the Product, the Acquisition, the Acquired Assets, the Excluded Assets, the Excluded Liabilities and the Assumed Liabilities, or any federal, state, local or foreign statute, law, ordinance, rule or regulation or otherwise (except pursuant to the indemnification provisions set forth in this Article X).

 

(c)           NOTWITHSTANDING ANY PROVISION HEREIN, NEITHER SELLER NOR PURCHASER SHALL IN ANY EVENT BE LIABLE TO THE OTHER PARTY OR ANY INDEMNITEE ON ACCOUNT OF ANY INDEMNITY OBLIGATION SET FORTH IN SECTION 10.01 OR SECTION 10.02 FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES (EXCEPT TO THE EXTENT THE PARTY OR INDEMNITEE IS REQUIRED TO PAY SUCH TYPES OF DAMAGES TO A THIRD PARTY), INCLUDING LOSS OF FUTURE REVENUE OR INCOME, LOSS OF BUSINESS REPUTATION OR OPPORTUNITY RELATING TO THE BREACH OR ALLEGED BREACH OF THIS AGREEMENT, OR DIMINUTION OF VALUE OR ANY DAMAGES BASED ON ANY TYPE OF MULTIPLE.

 

Section 10.07        Termination of Indemnification.

 

(a)           The obligations to indemnify and hold harmless an Indemnitee pursuant to (i) Section 10.01(a) and Section 10.02(a), shall terminate when the applicable representation or warranty terminates pursuant to Section 10.07(b) below, and (ii) the other clauses of Section 10.01 and Section 10.02, shall survive and remain in full force for the applicable periods described therein or, if no such period is specified,  indefinitely; provided, however, that for the avoidance of doubt, there shall be no time limit, other than applicable statute of limitations, for indemnification claims brought by Seller arising from Section 10.02(c) and by Purchaser arising from Section 10.03(c); provided further, however, that as to foregoing clause (i) such obligations to indemnify and hold harmless shall not terminate with respect to any item as to which the Indemnitee or the related Party thereto shall have, before the expiration of the applicable period, previously made a claim by delivering a notice of such claim (stating in reasonable detail the basis of such claim) to the Indemnitor.

 

  

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(b)           The representations and warranties of Seller contained in Article V shall survive the Closing solely for purposes of Section 10.01(a) and shall terminate at the close of business on the 12-month anniversary following the Closing Date (other than with respect to those representations and warranties of Seller contained in Section 5.01, Section 5.02, and Section 5.03(b), which shall survive indefinitely, and those representations and warranties contained in Section 5.08, which shall survive the Closing Date and expire 60 days after the expiration of the applicable statute of limitations), and the representations and warranties of Purchaser contained in Article VII shall survive the Closing solely for purposes of Section 10.02(a), and shall terminate at the close of business on the 12 month anniversary following the Closing Date (other than with respect to those representations and warranties of Purchaser contained in Section 7.01, Section 7.02 and Section 7.05, which shall survive indefinitely).

 

Section 10.08         Tax Treatment of Indemnification Payments.  For all Tax purposes, each of Purchaser, Seller and their respective Affiliates agrees to treat any indemnity payment under this Agreement as an adjustment to the Purchase Price received by Seller for the transactions contemplated by this Agreement unless a final determination (as defined in Section 1313 of the Code) provides otherwise.

 

Section 10.09        No Setoff.  Purchaser shall not, and shall have no right to, setoff any Losses suffered by Purchaser or any Purchaser Indemnitee against any Net Sales Milestone or any payments to be made by Purchaser to Seller under this Agreement or any of the Other Acquisition Documents.

 

Section 10.10        No Double Recovery.  Neither Party shall be entitled to recover the same or duplicative damages with respect to the same breach from the other Party under more than one of this Agreement and the Other Acquisition Documents.  For the purposes of this Section 10.10, each Party shall be deemed to have made and received all payments made and received by its Affiliates.

 

ARTICLE XI

 

TERMINATION

 

Section 11.01         Termination.  This Agreement may be terminated and the transactions contemplated hereby abandoned by:

 

(a)           mutual written consent of Seller and Purchaser;

 

(b)           by Seller or Purchaser if the Closing does not occur on or prior to December 24, 2015 (the “Termination Date”);

 

(c)           Purchaser, if there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement and such breach, inaccuracy or failure has not been cured by Seller within 30 days of Purchaser’s receipt of written notice of such breach, inaccuracy or failure from Purchaser; provided that there is not then a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Purchaser pursuant to this Agreement;

 

  

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(d)           Seller, if there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Purchaser pursuant to this Agreement and such breach, inaccuracy or failure has not been cured by Purchaser within 30 days of Purchaser’s receipt of written notice of such breach, inaccuracy or failure from Seller; provided that there is not then a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement;

 

(e)           Seller, if any of the conditions set forth in Section 4.02 shall not have been, or if it becomes reasonably apparent that any of such conditions will not be, fulfilled by the Termination Date, unless such failure shall be due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;

 

(f)           Purchaser, if any of the conditions set forth in Section 4.01 shall not have been, or if it becomes reasonably apparent that any of such conditions will not be, fulfilled by the Termination Date, unless such failure shall be due to the failure of Purchaser to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or

 

(g)           either Party, if the Closing does not occur on or prior to the Termination Date, provided, however, that the Party seeking termination is not in breach in any material respect of any of its representations, warranties, covenants or agreements contained in this Agreement.

 

Section 11.02        Return of Confidential Information.  If the transactions contemplated by this Agreement are terminated as provided herein:

 

(a)           Purchaser shall return to Seller all documents and other material received by Purchaser, its Affiliates and their respective representatives from Seller, any of its Affiliates or any of their respective Affiliates or representatives relating to the transactions contemplated hereby and by the Other Acquisition Documents, whether so obtained before or after the execution hereof, to Seller; and

 

(b)           All confidential information received by Purchaser, its Affiliates and their respective representatives with respect to Seller, any of its Affiliate or any of their respective Affiliates and the Acquired Assets shall be treated in accordance with the Confidentiality Agreement, which shall remain in full force and effect notwithstanding the termination of this Agreement.

 

  

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Section 11.03        Effect of Termination.  In the event of termination by Seller or Purchaser pursuant to this Article XI, written notice thereof shall forthwith be given to the other Party and the transactions contemplated by this Agreement shall be terminated, without further action by either Party.  If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Article XI, this Agreement shall become void and of no further force or effect, except for the provisions of (a)relating to the confidentiality obligations of the Parties; (b) Section 12.07 relating to public announcements; (c) Section 12.08 relating to governing law and forum; (d) Section 12.09 relating to waiver of jury trial; (e) Section 12.10 relating to expenses; and (f) this Article XI.  Nothing in this Article XI shall be deemed to release either Party from any liability for any breach by such Party of the terms and provisions of this Agreement prior to the termination of this Agreement.

 

ARTICLE XII

 

MISCELLANEOUS

 

Section 12.01       Assignment.  Except as otherwise expressly permitted by this Agreement, neither Party shall assign or otherwise transfer this Agreement or any interest herein or right hereunder without the prior written consent of the other Party, and any such purported assignment, transfer or attempt to assign or transfer any interest herein or right hereunder shall be void and of no effect; provided, however, that, (i) Purchaser may, without such consent, assign its rights to purchase the Acquired Assets hereunder, in whole or in part, to one or more of its Affiliates, provided that no such assignment shall relieve the Purchaser of any of its obligations hereunder, and (ii) following the Closing, either Party shall have the right, without such consent, on written notice to the other Party, to assign all of its rights and obligations hereunder to a successor to all or substantially all of such Party’s business or assets, or to a successor of that portion of such Party’s business to which this Agreement relates, in each case whether by way of merger, sale of stock, sale of assets or other similar transaction (or series of related transactions); provided, further, that in the case of an assignment by Purchaser in the foregoing cases, Purchaser shall provide notice to Seller containing the name and contact information of the assignee, and any assignee shall expressly agree to assume Purchaser’s obligations pursuant to this Agreement, including, the applicable payment obligations under Section 3.02.  Subject to the foregoing, this Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

 

Section 12.02        Non-Waiver.  Any failure on the part of a Party to enforce at any time or for any period of time any of the provisions of this Agreement shall not be deemed or construed to be a waiver of such provisions or of any right of such Party thereafter to enforce each and every such provision on any succeeding occasion or breach thereof.

 

Section 12.03        No Third-Party Beneficiaries.  This Agreement is for the sole benefit of the Parties and their successors and permitted assigns and the Indemnitees, and nothing herein express or implied shall give or be construed to give to any Person, other than the Parties and such successors and permitted assigns and the Indemnitees, any legal or equitable rights hereunder.

 

  

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Section 12.04         Severability.  If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms and provisions of the Agreement shall remain in full force and effect.  Upon such determination, the Parties shall negotiate in good faith to modify this Agreement so as to give effect to the original intent of the Parties to the fullest extent permitted by applicable Law.

 

Section 12.05        Entire Agreement; Amendments.  This Agreement, together with the Other Acquisition Documents and the Confidentiality Agreement (in each case, following execution and delivery thereof), contains the entire understanding of the Parties with respect to the subject matter hereof and thereof and supersedes all previous and contemporaneous verbal and written understandings, agreements, representations and warranties with respect to such subject matter or on which the Parties may have relied.  This Agreement may not be amended, supplemented or modified except by an instrument in writing signed on behalf of each Party.  No waiver of any provision of this Agreement shall be valid unless the waiver is in writing and signed by the waiving Party.

 

Section 12.06        Notices.  Unless otherwise explicitly set forth herein, any notice required or permitted to be given hereunder shall be in writing and shall be deemed properly delivered, given and received: (a) if delivered personally by hand, when delivered; (b) if sent by electronic mail or other electronic transmission, upon delivery; (c) if sent by registered, certified or first class mail, at 5:00 p.m., New York City time, on the third Business Day after being sent; and (d) if sent by reputable overnight courier, at 5:00 p.m., New York City time, one Business Day after being sent, in each case to the addresses of each Party set forth below or to such other address or addresses as shall be designated in writing in the same matter:

 

(a)           If to Purchaser:

 

Midatech Pharma PLC

65 Innovation Drive

Milton Park, Abingdon

Oxfordshire OX14 4RQ

United Kingdom

Attn: Nick Robbins-Cherry

Telephone: +44 1235 841 575

Email: nickrc@midatechpharma.com

with a copy (which shall not constitute notice) to:

 

  

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Brown Rudnick LLP

8 Clifford Street

London W1S 2LQ

United Kingdom

Attn: Tim Matthews

Facsimile: 020 7851 6100

Telephone: 020 7851 6126

Email: tmatthews@brownrudnick.com

 

and

 

Brown Rudnick LLP

One Financial Center

Boston, Massachusetts 02110

United States of America

Attn: Sam Williams

Facsimile: 617-289-0440

Telephone: 617-856-8200

Email: swilliams@brownrudnick.com

(b)           If to Seller:

 

Galena Biopharma, Inc.

2000 Crow Canyon Place, Suite 380

San Ramon, CA 94583

Attention:      Chief Executive Officer

Facsimile:       855-883-7422

Email: mwschwartz@galenbiopharma.com

 

with a copy (which shall not constitute notice) to:

Fredrikson & Byron, P.A.

200 South Sixth Street, Suite 4000

Minneapolis, MN 55402

Attention:      Christopher J. Melsha

Facsimile:       (612) 492-7077

Email: cmelsha@fredlaw.com

 

Section 12.07        Public Announcements; Registration and Filing of this Agreement.

 

  

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(a)           Neither Party shall make any public announcement regarding this Agreement, or the subject matter contained herein, without the prior written consent of the other Party (which consent will not be unreasonably withheld, conditioned or delayed by such other Party), except to the extent required to be disclosed (i) to or by any Governmental or Regulatory Authorities; (ii) to comply with applicable Laws or the requirements of any Governmental or Regulatory Authority (including, without limitation, to comply with SEC, the United Kingdom Financial Conduct Authority or stock exchange (including the NASDAQ Stock Market LLC, the London Stock Exchange plc and the AIM Market of the London Stock Exchange plc) disclosure requirements), or (iii) to comply with judicial process or an order of any Governmental or Regulatory Authority of competent jurisdiction; provided, however, that in each case the Party required to disclose such information shall use its reasonable best efforts to give the other Party reasonable advance notice and review of any such disclosure.  Notwithstanding the foregoing, the Parties shall coordinate on a mutually acceptable joint press release to be issued by each of the Parties in connection with the execution of this Agreement.

 

(b)           To the extent, if any, that either Party concludes in good faith that it or the other Party is required to file or register this Agreement or a notification thereof with any Governmental or Regulatory Authority including, without limitation, the U.S. Securities and Exchange Commission, in accordance with law, such Party shall inform the other Party thereof. The Parties shall cooperate, each at its own expense, in such filing, registration or notification and shall execute all documents reasonably required in connection therewith. In such filing, registration or notification, the Parties shall request confidential treatment of any sensitive provisions of this Agreement, to the extent permitted by law. The Parties shall promptly inform each other as to the activities or inquiries of any such Governmental or Regulatory Authority relating to this Agreement, and shall reasonably cooperate to respond to any request for further information therefrom on a timely basis.

 

Section 12.08        Governing Law; Forum.  This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof.  Any judicial proceeding brought with respect to this Agreement must be brought in any court of competent jurisdiction in the State of Delaware, and, by execution and delivery of this Agreement, each Party (a) accepts, generally and unconditionally, the exclusive jurisdiction of such courts and any related appellate court, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement, and (b) irrevocably waives any objection it may now or hereafter have as to the venue of any such suit, action or proceeding brought in such a court or that such court is an inconvenient forum.

 

Section 12.09        WAIVER OF JURY TRIAL.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.09.

 

  

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Section 12.10        Expenses.  Whether or not the transactions contemplated hereby are consummated, and except as otherwise specifically provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs or expenses.

 

Section 12.11        Relationship of the Parties.  In making and performing this Agreement, the Parties are acting, and intend to be treated, as independent entities and nothing contained in this Agreement shall be construed or implied to create an agency, partnership, joint venture, or employer and employee relationship between Seller and Purchaser or any of their respective Affiliates.  Except as otherwise expressly provided herein, neither Party may act on behalf of the other Party, and neither Party may make (or has any authority to make) any representation, warranty or commitment, whether express or implied, on behalf of the other Party or incur any charges or expenses for or in the name of the other Party.  No Party shall be liable for the act of any other Party unless such act is expressly authorized in writing by both Parties.  The relationship of the Parties under this Agreement is, and is intended to be, one of independent contractors hereunder.

 

Section 12.12        Counterparts.  This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, shall bear the signatures of each of the Parties.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against the Party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument.  A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

 

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the Parties have caused this Asset Purchase Agreement to be duly executed as of the date first written above.

 

 

	  	
SELLER:

	 	 
	  	
GALENA BIOPHARMA, INC.

	 	 
	 	 
	  	
/s/ Mark W. Schwartz

	  	
Name: Mark W. Schwartz

	  	
Title: President & Chief Executive Officer

	 	 
	 	 
	  	
PURCHASER:

	 	 
	  	
MIDATECH PHARMA PLC

	 	 
	 	 
	  	
/s/ James N. Phillips

	  	
Name:

	
James N. Phillips

	  	
Title:

	
Chief Executive Officer

 

 

[Signature page to Asset Purchase Agreement]Unassociated Document

Exhibit 4.17

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LICENSE AND SUPPLY AGREEMENT

 

 

By and between 

 

 

MONOSOL RX, LLC, and

 

 

GALENA BIOPHARMA, INC.

 

 

 

  

  

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TABLE OF CONTENTS

 

	
Page

	 
	 	 
	
SECTION 1. INTERPRETATION AND CONSTRUCTION; DEFINITIONS

	
1

	 	 
	
1.1.

	
Interpretation and Construction

	
1

	
1.2.

	
Definitions

	
 1

	 	 	 
	
SECTION 2. RIGHTS AND OBLIGATIONS

	
9

	 	 
	
2.1.

	
Commercialization License

	
9

	
2.2.

	
Manufacturing Exclusivity

	
10

	
2.3.

	
Supply Interruption

	
10

	
2.4.

	
Effect of Supply Interruption

	
11

	
2.5.

	
Housemark Licenses

	
11

	
2.6.

	
Trademark License

	
11

	
2.7.

	
Marking of Promotional Materials

	
11

	
2.8.

	
MSRx Retained Rights

	
12

	
2.9.

	
Exclusivity

	
12

	 	 	 
	
SECTION 3. ALLIANCE MANAGEMENT

	
12

	 	 
	
3.1.

	
Development and Commercialization Committee

	
12

	
3.2.

	
Expenses

	
14

	 	 	 
	
SECTION 4. DEVELOPMENT; MAINTENANCE OF REGULATORY APPROVALS

	 
14

	 	 
	
4.1.

	
General

	
 14

	
4.2.

	
Development Responsibilities of MSRx

	
 14

	
4.3.

	
Clinical Costs

	
15

	
4.4.

	
Development Responsibilities of Galena

	
15

	
4.5.

	
Changes

	
 15

	 	 	 
	
SECTION 5. COMMERCIALIZATION

	
16

	 	 
	
5.1.

	
Galena Responsibility and Control

	
16

	
5.2.

	
Specific Commercialization Rights and Obligations of Galena

	
 16

	
5.3.

	
Product Launch and Market Coverage

	
 17

	
5.4.

	
Commercialization and Marketing Expenses

	
 17

	 	 	 
	
SECTION 6. MANUFACTURING

	
17

	 	 
	
6.1.

	
Supply Obligations

	
17

	
6.2.

	
Supply Price

	
18

	
6.3.

	
Raw Materials

	
18

	
6.4.

	
Quality Assurance and Quality Control; Expiration of Product

	
18

	
6.5.

	
Forecasts, Order and Delivery of Products

	
18

	
6.6.

	
Invoice

	
19

	
6.7.

	
Product Not in Compliance with Purchase Order

	
 19

	
6.8.

	
Inspection by Galena

	
20

	
6.9.

	
Inspections by Regulatory Authorities

	
20

	
6.10.

	
Quality Agreement

	
20

 

  

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

	
SECTION 7. PAYMENTS AND REPORTS

	
20

	 	 
	
7.1.

	
Milestone Payments

	
20

	
7.2.

	
Form of First Milestone Payment

	
21

	
7.3.

	
Royalties

	
22

	
7.4.

	
Royalty Reports and Payments

	
23

	
7.5.

	
Manner of Payment

	
23

	
7.6.

	
Bartering Prohibited

	
24

	
7.7.

	
Taxes and Withholding

	
24

	
7.8.

	
Accounting

	
24

	
7.9.

	
Record Keeping; Audits

	
24

	
7.10.

	
Underpayments and Overpayments

	
25

	 	 	 
	
SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS

	
25

	 	 
	
8.1.

	
Representations, Warranties and Covenants of Each Party

	
25

	
8.2.

	
Additional MSRx Representations, Warranties and Covenants

	
26

	
8.3.

	
Additional Galena Representations, Warranties and Covenants

	
27

	
8.4.

	
Disclaimer

	
27

	 	 	 
	
SECTION 9. CONFIDENTIAL INFORMATION

	
28

	 	 
	
9.1.

	
General

	
28

	
9.2.

	
Exceptions

	
28

	
9.3.

	
Permitted Disclosures

	
29

	
9.4.

	
Confidential Terms

	
29

	
9.5.

	
Equitable Remedies

	
29

	 	 	 
	
SECTION 10. INDEMNIFICATION; LIMITATION OF LIABILITY

	
29

	 	 
	
10.1.

	
Indemnification by Galena

	
29

	
10.2.

	
Indemnification by MSRx

	
30

	
10.3.

	
Procedure for Indemnification

	
30

	
10.4.

	
Assumption of Defense

	
31

	
10.5.

	
Insurance

	
31

	
10.6.

	
Limitation of Liability

	
32

	 	 	 
	
SECTION 11. TERM AND TERMINATION

	
32

	 	 
	
11.1.

	
Term

	
32

	
11.2.

	
Termination

	
32

	
11.3.

	
No Waiver

	
33

	
11.4.

	
Effects of Termination

	
34

	 	 	 
	
SECTION 12. REGULATORY MATTERS

	
35

	 	 
	
12.1.

	
Regulatory Activities in the Territory

	
35

	
12.2.

	
Communications and Meetings with Governmental Authorities

	

35

	
12.3.

	
Regulatory Information

	
36

	
12.4.

	
Recalls or Other Corrective Action

	
37

	
12.5.

	
Events Affecting Integrity or Reputation

	
38

 

  

  

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SECTION 13. INTELLECTUAL PROPERTY

	
38

	 	 
	
13.1.

	
Patent Prosecution and Maintenance

	
38

	
13.2.

	
Infringement by Third Parties

	
38

	
13.3.

	
Infringement of Third Party Rights

	
39

	 	 	 
	
SECTION 14. MISCELLANEOUS

	
39

	 	 
	
14.1.

	
Independent Contractor

	
39

	
14.2.

	
Registration and Filing of this Agreement

	
39

	
14.3.

	
Notices

	
40

	
14.4.

	
Binding Effect; No Assignment

	
41

	
14.5.

	
No Implied Waivers; Rights Cumulative

	
41

	
14.6.

	
Severability

	
41

	
14.7.

	
Force Majeure

	
41

	
14.8.

	
Amendment

	
42

	
14.9.

	
Rules of Construction

	
42

	
14.10.

	
Publication

	
42

	
14.11.

	
Expenses

	
42

	
14.12.

	
Governing Law; Submission to Jurisdiction; Waiver

	
42

	
14.13.

	
Entire Agreement

	
43

	
14.14.

	
Third Party Beneficiaries

	
43

	
14.15.

	
Rights in Bankruptcy

	
43

	
14.16.

	
Counterparts; Signatures

	
44

 

  

  

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LICENSE AND SUPPLY AGREEMENT

 

This LICENSE AND SUPPLY AGREEMENT (together with any Schedules hereto, this “Agreement”) is entered into as of July 17, 2014 by and between MonoSol Rx, LLC, a Delaware limited liability company (“MSRx”), and Galena Biopharma, Inc., a Delaware corporation (“Galena”). MSRx and Galena are sometimes referred to hereinafter individually as a “Party” and collectively as the “Parties.”

 

RECITALS:

 

A.               MSRx owns patented and trade secret proprietary technology related to film- based drug delivery systems which are orally dissolving film strips (“PharmPilm”) containing active pharmaceutical ingredients.

 

B.                MSRx and Galena desire to collaborate on the commercialization of a PharmFilm product containing the active pharmaceutical ingredient Ondansetron (the “Product”, as further defined below) in the Territory (as defined below).

 

C.                Galena wishes to obtain the exclusive right to commercialize the Product in the Territory and MSRx desires to grant such an exclusive right to Galena, pursuant to the terms and subject to the conditions set forth in this Agreement.

 

D.                In consideration of the mutual representations, warranties and covenants contained herein, the Parties agree as follows:

 

SECTION 1. INTERPRETATION AND CONSTRUCTION; DEFINITIONS

 

1.1.              Interpretation and Construction. The headings of Sections in this Agreement are provided for convenience only and shall not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided in this Agreement, the word “including” does not limit the preceding words or terms and shall be deemed to be followed by the words “without limitation.” Unless otherwise expressly provided in this Agreement, the terms “shall have responsibility for”, “shall be responsible for” or the like, shall be deemed to be followed by “and shall be obligated to duly carry out such responsibility.”

 

1.2.              Definitions. As used herein, the following terms shall have the following :

 

1.2.1       “Act” means, as applicable, the United States Federal Food, Drug, and Cosmetic Act of 1938, as amended (21 U.S.C. §§ 301 et seq.).

 

1.2.2        “Adverse Drug Experience” means any of: an “adverse drug experience,” a “life-threatening adverse drug experience,” a “serious adverse drug experience,” or an “unexpected adverse drug experience,” as those terms are defined at either 21 C.F.R. §312.32 or 21 C.F.R. §314.80, and any other applicable regulations promulgated by the FDA, as related to the use of the Product which requires reporting to a Regulatory Authority.

 

  

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

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1.2.3        “Affiliate” of a Person means any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such first Person. “Control” and, with correlative meanings, the terms “controlled by” and “under common control with,” shall mean to possess the power to direct the management or policies of a Person, whether through: (a) direct or indirect beneficial ownership of fifty percent (50%) or more of the voting interest in such entity; (b) the right to appoint fifty percent (50%) or more of the directors of such entity; or (c) by contract or otherwise. The Parties acknowledge and agree that under no circumstances shall the term “Affiliate” as defined herein mean as to either Party, for any purpose, any (i) Venture Entity having, directly or indirectly, an interest in or controlling, alone or with others, such Party, or (ii) other Persons in which such Venture Entity have an interest or are controlled by, controlling or are under common control with such Person, unless such Party directly possesses the power to control and direct management of such other Persons.

 

1.2.4        “Agreement” has the meaning set forth in the Preamble of this Agreement.

 

1.2.5        “Annual Net Sales” means the total Net Sales of the Product in the Territory for a given calendar year (or any part thereof, as applicable in the given context) in which Product is sold.

 

1.2.6        “API” means the active pharmaceutical ingredient Ondansetron, including any and all salt forms thereof.

 

1.2.7        “Applicable Law” means all laws, rules and regulations, including any rules, regulations, guidelines, or other requirements of Regulatory Authorities, applicable to the Commercialization or Supply of the Product, as the case may be, that may be in effect from time to time in the Territory.

 

1.2.8        “Average Field Force” means, for any month or calendar quarter, the simple average number of Field Personnel each day of such month or calendar quarter, as applicable, which shall be the quotient determined by dividing (i) the sum of the number of Field Personnel on each day of such month or calendar quarter by (ii) the number of days in such month or calendar quarter, as applicable.

 

1.2.9        “Bankruptcy Code” has the meaning set forth in Section 14.15.

 

1.2.10      “Business Day” means any day on which banking institutions in New York, New York, United States are open for business.

 

1.2.11      “Calendar Quarter” means the three month period in any given calendar year ending on March 31, June 30, September 30, and December 31.

1.2.12      “Certificate of Analysis” means a certificate evidencing the analytical tests conducted on a specific lot of Product reflecting that such Product and any Raw Materials used therein conform to the relevant Specifications and applicable regulations and setting forth, inter alia, the items tested and test results, and accompanied by all documentation required by Applicable Law and/or a Regulatory Authority to Commercialize the Product in the Territory.

 

1.2.13      “Certificate of Compliance” means a certificate evidencing that the Product delivered to Galena was manufactured in accordance with cGMP and any applicable Regulatory Approvals.

 

1.2.14      “cGCP” means the applicable regulatory requirements for current good clinical practices promulgated by the FDA under 21 C.F.R. § 50, as the same may be amended from time to time.

 

1.2.15      “cGLP” means the applicable regulatory requirements for current good laboratory practices promulgated by the FDA under 21 C.F.R. § 58, as the same may be amended from time to time.

 

 

 

CONFIDENTIAL MATERIAL OMITTED AND FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

1.2.16      “cGMP” means the applicable regulatory requirements for current good manufacturing practices promulgated by the FDA under 21 C.F.R. §§ 210, 211, as the same may be amended from time to time.

 

1.2.17      “Commercialization” means any and all activities directed to marketing, promoting, distributing, offering for sale and selling the Product. When used as a verb, “Commercialize” means to engage in Commercialization.

 

1.2.18     “Commercially Reasonable Efforts” means, with respect to a Party, the efforts and resources which would be used (including, without limitation, the promptness in which such efforts and resources would be applied) by that Party relating to a certain activity or activities, consistent with its normal business practices, which are equivalent to the general level of effort and resources which would be used in the pharmaceutical industry by a company similar in size and scope, with respect to a product having a similar market potential and at a similar stage in life cycle, taking into account, as applicable, the competitiveness of the marketplace and any legal and regulatory issues involved, the profitability of the applicable products and other relevant factors, including technical, legal, scientific, medical, sales performance, and/or marketing factors.

 

1.2.19      “Competing Product” means any alternative PharmFilm or similar thin film product containing the API that is marketed and sold in the Territory.

 

1.2.20      “Confidential Information” has the meaning set forth in Section 9.1.

 

1.2.21      “Development” means drug development activities which occur as a conditions set forth by the FDA as post-Regulatory Approval requirements for the NDA #022524 or are required to keep the NDA in good standing including, among other things: pharmaceutical formulation development, ICH stability testing, cGMP, cGMP audits, cGCP, cGCP audits, cGLP, cGLP audits, analytical method validation, manufacturing process validation, cleaning validation, scale-up, quality assurance/quality control systems and their

management, statistical analysis and report writing, clinical studies, regulatory filing submissions and approvals, and regulatory affairs related to the foregoing. When used as a verb, “Develop” means to engage in Development.

 

1.2.22      “Disclosing Party” has the meaning set forth in Section 9.1.

 

1.2.23      “Dosage Strengths” means the 4mg and 8mg dosage strengths of the

 

Product.

 

1.2.24      “Drug Product” means a drug product as defined in 21 C.F.R. § 314.3 for administration to human subjects and “API” as defined by ICH Q7.

 

1.2.25      “Escrow Agreement” means that certain Escrow Agreement dated the date hereof by and among MSRx, Galena, Richard D. Sparkman, as Trustee for the Chapter 7 Bankruptcy Estates of Vestiq Holdings, Inc. and its subsidiaries, and U.S. Bank National Association, a national banking association, as escrow agent.

 

1.2.26      “Effective Date” means the date this Agreement is released from escrow pursuant to the Escrow Agreement.

 

 

 

CONFIDENTIAL MATERIAL OMITTED AND FILED

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

1.2.27      “FDA” means the United States Food and Drug Administration, and any of its successor agencies or departments.

 

1.2.28      “Field Personnel” means full-time employees of Galena and independent contractors engaged by Galena on a full-time basis who (x) are not based at Galena’s principal place of business; (y) spend substantially all of their time as a sales representatives, contracting/account managers, medical science liaisons or marketing or medical representatives working primarily with respect to commercial products; and (z) work in the field visiting physicians, pharmacies, institutions and other customers or potential customers whose primary responsibility is (a) to influence prescribing and purchasing products or (b) to develop contractual or business relationships for products.

 

1.2.29     “First Commercial Sale” means the first sale of the Product to a Third Party by Galena or its Affiliates within the Territory.

 

1.2.30       “Force Majeure” has the meaning set forth in Section 14.7.

 

1.2.31      “GAAP” means accounting principles generally accepted in the United States, consistently applied.

 

1.2.32      “Galena” has the meaning set forth in the Preamble to this Agreement.

 

1.2.33      “Galena Common Stock” means the common stock of Galena, par value $0.0001 per share.

 

1.2.34      “Galena Housemark” means collectively the name and logo of Galena or any of its Affiliates as identified on Schedule 1.2 attached hereto and made a part hereof.

1.2.35      “Indemnitee” has the meaning set forth in Section 10.3.1.

1.2.36      “Indemnitor” has the meaning set forth in Section 10.3.1.

1.2.37      “Indication” means the approved indications for Zuplenz as of the Effective Date. For avoidance of doubt, the currently approved indications are prevention of nausea and vomiting associated with highly emetogenic cancer chemotherapy, prevention of nausea and vomiting associated with initial and repeat courses of moderately emetogenic cancer chemotherapy, prevention of nausea and vomiting associated with radiotherapy in patients receiving total body irradiation, single high-dose fraction to abdomen, or daily fractions to the abdomen, and prevention of postoperative nausea and/or vomiting in humans.

1.2.38      “Intellectual Property” means all: (a) all patents, patent applications including provisional applications and statutory invention registrations, including reissues, divisions, continuations, continuations-in-part, and reexaminations, all inventions disclosed therein; (b) copyrightable works, copyrights in works of authorship of any type, including computer software and industrial designs, registrations and applications for registration thereof; (c) trade secrets, know-how, processes, specifications, product designs, manufacturing information, engineering and other manuals and drawings, standard operating procedures, flow diagrams, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, safety, quality assurance, quality control and clinical data, technical information, data, research records, supplier lists and similar data and information and other material confidential or proprietary technical, business and other information necessary or useful to Supply or Commercialize the Product in the Territory, and all rights in any jurisdiction to limit the use or disclosure thereof with respect to the Supply or Commercialization of the Product in the Territory; (d) including with respect to extensions and the like regarding any of the foregoing; (e) any and all rights of application regarding any of the foregoing; and (f) as further provided in Section 13.2, rights to sue and recover damages or obtain injunctive relief for infringement, or misappropriation thereof.

 

  

  

CONFIDENTIAL MATERIAL OMITTED AND FILED

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

1.2.39      “Lien” or “Liens” means any mortgage, pledge, security interest, right of first refusal, option, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), any sale of receivables with recourse against MSRx, any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar statute, or any subordination arrangement in favor of any Third Party other than in connection with MSRx’s commercial lending arrangements.

1.2.40      “Losses” means any and all damages (including all incidental, consequential, statutory and treble damages except as otherwise specifically limited in this Agreement), awards, deficiencies, settlement amounts, defaults, assessments, fines, dues, penalties, costs, fees, liabilities, obligations, taxes, liens, losses, lost profits and expenses (including, without limitation, court costs, interest and reasonable fees of attorneys, accountants and other experts) incurred by or awarded to Third Parties and required to be paid to Third Parties with respect to a Third Party Claim by reason of any judgment, order, decree, stipulation or injunction, or any settlement entered into in accordance with the provisions of this Agreement, together with all documented out-of-pocket costs and expenses incurred in complying with any judgments, orders, decrees, stipulations and injunctions that arise from or relate to a Third Party Claim.

1.2.41      “Marketing Expenses” means all costs and expenses incurred in connection with the Commercialization of the Product in the Territory, including, without limitation: (a) marketing, advertising, sampling, and promotional activities; (b) marketing studies; (c) primary and secondary market research; (d) promotional materials; and (e) samples. Marketing Expenses shall not include any deductions allowed under the definition of Net Sales.

1.2.42      “Milestone” means the First Milestone, the Second Milestone, the Third Milestone, and each Net Sales Milestone, all as described in Section 7.1.

1.2.43      “MSRx” has the meaning set forth in the Preamble to this Agreement.

1.2.44      “MSRx Housemark” means collectively the name and logo of MSRx or any of its Affiliates as identified on Schedule 1.1 attached hereto and made a part hereof.

1.2.45      “MSRx IP” means any and all Intellectual Property and Regulatory Approvals owned or controlled by MSRx or its Affiliates and which is useful or necessary to Supply or Commercialize the Product.

1.2.46      “MSRx Patents” has the meaning set forth in Section 13.1.1.

1.2.47      “NDA” means the approved new drug application for the Product under NDA #022524, including all amendments and supplements thereto and all documentation submitted to the FDA in connection therewith.

 

  

  

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1.2.48      “Net Sales” means, for any period of determination, the aggregate amount invoiced by Galena (or any Affiliate, successor, subcontractor, or agent of Galena) to a Third Party distributor, agent, contractor or end user for the sale of Product during such period less amounts for the following accruals: (a) Product Supply Price, (b) credits, refunds, allowances, charge-backs, rebates, fees, reimbursements, and similar payments provided to wholesalers, chains, mass merchandisers, group purchasing organizations and other distributors, buying groups, health care insurance carriers, pharmacy benefit management companies, health maintenance organizations, other institutions or health care organizations, any governmental, quasi-governmental or regulatory body, agency or authority in respect of any state or federal Medicare, Medicaid or similar programs or other customers; (c) credits or discounts related to sales promotions, trade show discounts and stocking allowances and trade volume and cash discounts and rebates (including coupons and government charge-backs) in amounts that are usual and customary; (d) any price adjustments, shelf stock or floor stock adjustments, billing errors, rejected goods, product recalls, damaged goods and returns, allowances, adjustments, reimbursements, Third Party administration fees, discounts, rebates, voucher and coupon redemptions, or other price reductions provided to any customer; (e) any invoiced charge for freight, insurance, handling, or other transportation costs, to the extent included in the gross amount invoiced to the customer; (f) rebates or other price reductions provided any governmental, quasi-governmental or regulatory body, agency or authority in respect of any state or federal Medicare, Medicaid or similar programs; and (g) sales, use, and other like taxes, duties or excises, excluding income tax. Notwithstanding, the amounts recognized as Net Sales, including any deductions accrued pursuant to clauses (a) through (g) of this Section shall be consistent with, and determined from books and records maintained in accordance with GAAP and shall only be deducted once and only to the extent not otherwise deducted from the aggregate amount invoiced. “Net Sales” shall not include revenue received by Galena (or any of its Affiliates) from transactions with an Affiliate, where the Product in question will be resold to an independent Third Party distributor, agent or end user by the Affiliate where such revenue received by the Affiliate from such resale is included in Net Sales. For the avoidance of doubt, distribution of the Product in connection with clinical studies and as samples shall not be included in this definition.

1.2.50        “Orange Book” means the FDA’s publication entitled “Approved Drug Products with Therapeutic Equivalence Evaluations.”

1.2.51        “Party” or “Parties” has the meaning set forth in the Preamble to this Agreement.

 

1.2.52        “Patent Claims” has the meaning set forth in Section 13.3.

1.2.53        “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other legal entity or organization, including a government or political subdivision, department or agency of a government.

1.2.54        “PharmFilm” has the meaning set forth in the Recitals of this Agreement.

 

  

  

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1.2.55        “Product” means a PharmFilm Drug Product containing the API for the Indication.

1.2.56        “Product Supply Price” has the meaning set forth in Section 6.2.

1.2.57        “Quarterly Royalty Reports” has the meaning set forth in Section 7.4.

1.2.58        “Raw Materials” has the meaning set forth in Section 6.2.

1.2.59        “Recall” has the meaning set forth in Section 12.4.1.

1.2.60       “Recall Expenses” has the meaning set forth in Section 12.4.1.

1.2.61        “Recall Objection Notice” has the meaning set forth in Section 12.4.1.

1.2.62        “Receiving Party” has the meaning set forth in Section 9.1.

1.2.63        “Regulatory Approval” means any approvals (including applications therefore, supplements and amendments thereto and pricing and reimbursement approvals), licenses, registrations or authorizations of any Regulatory Authority, necessary for the Commercialization, Supply, manufacture, testing, labeling, packaging, or shipping of the Product in the Territory, including the NDA for the Product.

1.2.64        “Regulatory Authority” means any national, regional, state, provincial or local regulatory agency, department, bureau, commission, council or other governmental authority in the Territory involved in the granting of approvals (including pricing and reimbursement approvals), licenses, registrations or authorizations for the marketing, sale, manufacturing, testing, labeling, packaging, shipping or supply of drug products, including the FDA.

1.2.65       “Royalty Period” means each twelve (12) month period during the Term commencing with the twelve (12) month period starting on the first Calendar Quarter following the First Commercial Sale.

 

1.2.66       “Specifications” means the written specifications for, Components, Finished Product, API, Excipients and Raw Materials mutually agreed upon by the Parties including, without limitation, the expiry period of such Components, Product, API, Excipients and Raw Materials as set forth in the NDA for the Product. The Specifications, and any modifications or supplements thereto, as are mutually agreed in writing by the Parties from time to time after the Effective Date and during the Term, are hereby incorporated by reference in this Agreement.

 

1.2.67      “Supply” means the manufacture, processing, testing, storing, labeling and packaging (as specified in this Agreement) for sale and delivery of the Product.

 

1.2.68      “Term” has the meaning set forth in Section 11.1.

 

1.2.69      “Territory” means the United States of America and all of its territories and possessions, including Puerto Rico and the U.S. Virgin Islands.

 

 

 

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1.2.70      “Third Party” means any Person other than MSRx and Galena and their respective Affiliates.

 

1.2.71      “Third Party Claim” has the meaning set forth in Section 10.3.1.

 

1.2.72      “Trade Demand” means the trailing Calendar Quarters average Units of Product ordered from Third Party distributors, agents, contractors or end users for the sale of Product.

 

1.2.73      “Unit” shall mean a single dosage strip of the Product (containing either of the Dosage Strengths), in an individual foil pouch, for sample or sale.

 

1.2.74      “Venture Entity” shall mean a Person for which its primary business is the investment of capital in other Persons, and shall explicitly exclude any Person which markets, sells, promotes, develops or manufactures Drug Products and any Person for which its primary business is owning or controlling Intellectual Property.

 

1.2.75      “WAC” shall mean the Wholesale Acquisition Cost per Unit of Product. WAC is calculated, for any period of determination, by dividing the aggregate amount invoiced by Galena (or any Affiliate, successor, subcontractor, or agent of Galena) to a Third Party distributor, agent, contractor or end user for the sale of Product by the amount of Product supplied under the invoice.

 

1.2.76      “Zuplenz Trademark” means collectively the name and logo as identified on Schedule 1.3 attached hereto and made a part hereof.

 

SECTION 2. RIGHTS AND OBLIGATIONS

 

2.1.             Commercialization License. Subject to the terms and conditions of this Agreement, MSRx hereby grants to Galena and its Affiliates, and Galena and its Affiliates accept, an exclusive (even as to MSRx and its Affiliates), royalty-bearing license under MSRx’s IP to Commercialize the Product in the Territory in accordance with the terms of this Agreement. MSRx covenants and agrees with Galena that during the Term MSRx will not grant any license or similar right with respect to the Product to make or have made the Product for sale in the Territory. Galena shall be responsible for the actions of its Affiliates with respect to their activities under the license granted hereunder.

 

2.2.             Manufacturing Exclusivity. Unless otherwise agreed to in writing by both Parties, MSRx shall have the exclusive right to Supply all of the Product Commercialized under this Agreement; provided, however, that MSRx may designate such obligation to one of its Affiliates or a Third Party selected by MSRx. Notwithstanding anything to the contrary contained herein, MSRx’s right to exclusively Supply all Product is conditioned upon it remaining in good standing with Regulatory Authorities, meaning that an FDA inspection does not result in an “Official Action Indicated” (significant objectionable conditions or practices) or further sanction by the FDA and that MSRx retains necessary licenses to operate a manufacturing facility for the Product . In the event such FDA sanctions cause a Supply Interruption, Galena may require MSRx to designate a Third Party manufacturer as outlined under Section 2.4.

 

  

  

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2.3.             Supply Interruption. A “Supply Interruption” will be deemed to have occurred and continuing if Galena has ordered Product from MSRx consistent with its obligations under Section 6.5 and that during a period of at least three (3) consecutive months Galena has not received at least [***] percent ([***]%) of those quantities of Product so ordered, which failure results a material disruption in Galena’s ability to Commercialize the Product in the Territory. Notwithstanding the foregoing, no Supply Interruption will be deemed to have occurred if the applicable purchase orders referenced above exceed [***]% of the applicable quantities of Product set forth in the forecast delivered by Galena for the Calendar Quarter immediately preceding such purchase order and MSRx delivers [***]% of the applicable quantities. Galena will provide written notice to MSRx detailing any Supply Interruption and MSRx shall be deemed to have cured such Supply Interruption upon delivery to Galena of quantities of Product covered under such outstanding orders (the “Supply Cure”) but only for that amount which does not exceed [***]% of the applicable quantities of Product set forth in the forecast delivered by Galena for the Calendar Quarter immediately preceding such purchase order. A Supply Interruption shall be deemed ongoing until such time as MSRx affects a Supply Cure. A “Supply Outage” shall occur if, in any six (6) consecutive Agreement Months, MSRx fails to meet, in at least four (4) of those months or in any two consecutive calendar months, [***] percent ([***]%) of the actual Trade Demand for the Product In the event MSRx has not cured a Supply Outage within thirty (30) days of Galena’s written notification thereof to MSRx, MSRx shall reimburse Galena for lost Net Sales from the date of MSRx’s receipt of such written notification through the date Product is delivered under outstanding purchase orders for the Product allocated to the drug wholesalers utilized by Galena. The foregoing reimbursement will be determined by calculating (x) the difference between the average daily amount of Net Sales of the Product during the six (6) months immediately prior to MSRx’s receipt of Galena’s written notice of such Supply Outage and the actual amount of Net Sales during the Supply Outage, less (y) the royalty payments that would have been due to MSRx under Section 7.2 with respect to such Net Sales. Such reimbursement amount shall be paid quarterly to Galena commencing with the first month following the month in which the Supply Outage occurs, except that the maximum aggregate limit for all such reimbursement in respect of a Supply Outage during the Term shall not under any circumstances exceed [***] Dollars ($[***]), per occurrence with a maximum cap of [***] Dollars ($[***]). Notwithstanding anything to the contrary contained in this Section 2.3, no reimbursement shall be owed to Galena for a Supply Outage where Force Majeure applies or in circumstances where the failure to Supply Product is due to acts or omissions of Galena. The reimbursement described in this Section 2.3 constitutes Galena’s exclusive remedy in the event of a Supply Outage.

 

2.4.             Effect of Supply Interruption. In addition, in the event of a Supply Interruption ongoing for more than three (3) months, Galena shall have the right upon written notice to MSRx to request that MSRx establish and qualify a Third Party manufacturing subcontractor as an alternative supplier of Product (an “Alternate Supplier”) at MSRx expense. MSRx agrees to make available such Intellectual Property of MSRx and all know-how that is necessary for the Supply, manufacture, packaging and labeling of the Product by such Alternate Supplier. If at any time before, during, or following the qualification process of such Third Party manufacturer MSRx cures the Supply Interruption, MSRx shall recommence the Supply of all of the Product Commercialized under this Agreement in accordance with this Section 2.4.

 

2.5.             Housemark Licenses.

 

2.5.1         Subject to the terms and conditions of this Agreement, Galena hereby grants to MSRx, and MSRx accepts, a non-exclusive license to use the Galena Housemark in the Territory solely in conjunction with the labeling and specified packaging of Product and solely as such are approved by Galena, which shall be non-transferable except for limited sublicenses to packaging subcontractors for the sole purpose of packaging activities.

 

 

 

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2.5.2          Subject to the terms and conditions of this Agreement, MSRx hereby grants to Galena, and Galena accepts, a non-exclusive, non-transferable license to use the MSRx Housemark in the Territory solely in conjunction with the Product and solely as such are approved by MSRx. The MSRx Housemark shall appear on the label of the Product as set forth on Schedule 1.1.

 

2.6.             Trademark License. Subject to the terms and conditions of this Agreement, MSRx hereby grants to Galena, and Galena accepts, an exclusive license to use the Zuplenz Trademark for purposes related to the Commercialization of the Product in the Territory contemplated by this Agreement.

 

2.7.             Marking of Promotional Materials. Subject to Section 2.5.2, the label for the Product shall be a Galena label in accordance with Galena’s customary practices. All promotional materials, package inserts or outserts and packaging for the Product or samples of Product used during the Term shall be consistent with the label of the Product. Neither Party shall have any rights to the other Party’s trademarks, names or logos for any use other than as contemplated in this Agreement. The packaging for the Product shall indicate that the Product is manufactured for Galena by MSRx.

 

2.8.             MSRx Retained Rights. Any rights of MSRx not expressly granted to Galena under the provisions of this Agreement shall be retained by MSRx. In furtherance of the foregoing and not in limitation thereof, MSRx shall retain the right: (a) to exploit the MSRx IP to develop and Commercialize the Product outside the Territory, without any duty to account to Galena or obtain Galena’s consent for such exploitation, subject to Section 2.1; (b) to carry-out its obligations under this Agreement; and (c) to exploit the MSRx IP for purposes outside of the Product, without any duty to account to Galena or obtain Galena’s consent for such exploitation, subject to Section 2.1.

 

2.9.             Exclusivity. Except as set forth in this Agreement, the Parties agree that they shall not, directly, or indirectly (whether through an Affiliate, Third Party or otherwise), in the Territory during the Term, make, have made, use, develop, import/export, register, file, promote, market, manufacture, distribute, offer to sell, sell or otherwise Commercialize the Product or assist any Third Party in the foregoing.

 

SECTION 3. ALLIANCE MANAGEMENT

 

3.1              Development and Commercialization Committee.

 

3.1.1         The Parties hereby establish a committee which shall provide a forum for open communication between the Parties regarding Product Development and Commercialization activities, and which shall be responsible for such matters related to Development and Commercialization of the Products in the Territory as may be described below. The Development and Commercialization Committee shall consist of such even number of individuals as shall be agreed by the Parties, fifty percent (50%) of whom shall be Galena designees and fifty percent (50%) of whom shall be MSRx designees (the “Committee”). Each Party shall have the right at any time and from time to time to designate a replacement, on a permanent or temporary basis, for any or all of its previously-designated members of the Committee. MSRx shall appoint one of its designees to serve as the Chair of the Committee. The initial Committee shall consist of six (6) members (including the Chair of such Committee), three (3) of whom shall be designated by each Party within ten (10) business days after the Effective Date. The Committee shall meet at least once per Calendar Quarter, and more frequently as mutually agreed by the Parties, on such dates, and at such places and times, as the Parties shall agree; provided, however, that the Parties shall use their Commercially Reasonable Efforts to cause the first meeting of the Committee to occur within thirty (30) days after the Effective Date. The Chair shall send a notice and agenda for each meeting of the Committee to all members of the Committee reasonably in advance of the meeting. The Party hosting any Committee meeting shall appoint one person (who need not be a member of the Committee) to attend the meeting and record the minutes of the meeting in writing. Such minutes shall be circulated to the members of the Committee in a time frame to be agreed upon by the Committee after the meeting and the members agree to review and comment on such minutes in a time frame to be agreed upon by the Committee. The Parties agree to use Commercially Reasonable Efforts to promptly finalize any dispute regarding minutes of any meeting.

 

  

  

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3.1.2       The Committee has no decision-making authority except as expressly set forth herein. All decisions of the Committee shall be made by unanimous vote or unanimous written consent of both Parties, with each Party having, collectively among its respective designees, one vote in all decisions. The members of the Committee shall use Commercially Reasonable Efforts to decide all matters assigned to the Committee under this Agreement or otherwise referred to it by mutual written agreement of the Parties; provided, however, that if the members of the Committee are unable to make a decision by unanimous vote or unanimous written consent within ten (10) days after commencing discussions regarding such decision, then any Committee member may submit it to the Executive Officers of the Parties for resolution. Each Party shall designate an “Executive Officer” of its company as the designee in the event of any dispute that has not been resolved by the Committee in accordance with this Section 3.1.2. The Executive Officer must be at least at the level of an officer of the respective Party. The Executive Officers of the Parties shall discuss in good faith the issue to be resolved and make a decision based on an assessment of the objectives for the applicable Development Plan

 

3.1.3       Purposes and Powers. The principal purpose of the Committee shall be to provide a forum for open communication between the Parties with respect to the Development and Commercialization of the Product in general. The Committee shall make recommendations regarding the overall strategy for the Development Plan, and shall provide advice, guidance, direction and other recommendations with respect to the Development Plan. Subject to the express rights of the Parties as set forth herein, the functions of the Committee shall include:

 

3.1.3.1                 Creating a documented plan encompassing the Development activities required of both Parties as outlined with respect to MSRx in Section 4.2 and with respect to Galena in Section 4.4 which document shall include Development activities, responsible parties, and timelines (the “Development Plan”);

 

3.1.3.2                 Acting as liaison between the Parties to ensure open and regular communication channels, and more particularly to ensure that the Parties are informed of, and have a forum to discuss, the ongoing progress of the Development Plan;

 

3.1.3.3                 Reviewing and recommending (or declining to recommend) proposed amendments to the Development Plan;

 

3.1.3.4                 Reviewing and recommending (or declining to recommend), activities: (a) related to the publication and/or dissemination of the clinical data and reports, including publications, posters, abstracts and presentations; and (b) with respect to other matters that intersect or overlap with Commercialization activities; and

 

 

 

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3.1.3.5                 Performing such other activities and discharging such other responsibilities as may be assigned to the Committee by the Parties pursuant to this Agreement or as may be mutually agreed upon in writing by the Parties from time to time.

3.1.4           Galena agrees to keep the Committee reasonably informed in respect of its Commercialization of the Product in the Territory pursuant to its authority and responsibility set forth in Section 5.1, and in particular Galena shall: (a) provide the Committee with copies of Galena’s annual Product marketing plans on a quarterly basis, information regarding Galena’s Commercialization strategy, and updates regarding the foregoing and the progress of Galena’s Commercialization activities; (b) promptly advise the Committee of any unforeseen material problems or delays encountered since the date of its last report in connection with the Commercialization activities; and (c) provide MSRx as soon as reasonably practicable with such other documentation and information as MSRx’s Committee members may reasonably request in writing from time to time with respect to the status of the Commercialization activities and progress. Galena’s marketing plan will, at a minimum, include details on market share projections, deployment and coverage details, patient/prescriber feedback, and reimbursement rates. Galena will reasonably and in good faith consider any comments and recommendations that the Committee may have with respect to the Commercialization of the Product.

 

3.2            Expenses. Each Party shall be responsible for all travel and related costs and expenses for its members and approved invitees to attend meetings of, and otherwise participate on, the Committee.

 

SECTION 4. DEVELOPMENT; MAINTENANCE OF REGULATORY APPROVALS

 

4.1.            General. MSRx and Galena shall cooperate in the conduct of all Development activities for the Product. Without limiting the foregoing, and as part of their respective responsibilities set forth below, MSRx and Galena shall:

 

4.1.1            Maintain the Product in compliance in all material respects with all requirements of Applicable Law:

 

4.1.2            Maintain records, which shall be complete and accurate in all material respects and shall fully and properly reflect all expenses, in connection with the Development of the Product; and

 

4.1.3            Cooperate and use Commercially Reasonable Efforts to assist in completing any and all clinical studies required as a condition of the continuing Regulatory Approval of the NDA.

 

4.2.             Development Responsibilities of MSRx. MSRx shall have overall responsibility for the performance of all manufacturing-related Development activities, including API and Product specifications, maintaining cGMP processes and procedures in conjunction with manufacturing, packaging, storage and stability of the Product, maintenance of the API DMF, and other manufacturing-related activities. MSRx shall have overall responsibility for the performance of FDA-required Development activities, which may include clinical trial design and conduct, bioanalytical sample shipping, pharmacokinetic and bioequivalent evaluation, data management, statistical evaluation and clinical study report writing. MSRx shall be responsible and pay for all of the costs and expenses incurred in connection with its obligations under this Section 4.2, except as provided for in Section 4.3. MSRx shall supply Galena with all safety data from outside of the Territory and any data and documentation requested by Galena necessary or useful in fulfilling its responsibilities under Section 4.4, and Galena shall supply MSRx with any data and documentation requested by MSRx necessary or useful in fulfilling MSRx’s responsibilities under this Section 4.2.

 

 

 

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4.3.            Clinical Costs. MSRx shall be solely responsible for conducting any post- marketing clinical studies that may be required as a condition of the continuing Regulatory Approval of the NDA for the Product; provided; however, each Party shall equally share the costs of such clinical studies.

 

4.4.            Development Responsibilities of Galena. Galena shall have overall responsibility for the performance of the following selected Development activities: (a) maintenance of the Product’s approved NDA and preparation and filing of any supplements thereto; (b) preparing and submitting periodic product safety reports; (c) making all required “OPDP” submissions; (d) filing of any post-marketing obligations required by the FDA; and (e) developing and implementing a pharmacovigilance and medical information program. Galena shall be responsible and pay for all of the costs and expenses incurred in connection with its obligations under this Section 4.4, including the annual FDA establishment and product fees for the two (2) SKUs of the Product. MSRx hereby transfers all right, title and interest in and to the NDA to Galena and, as soon as practicable and in no event later than seven (7) Business Days after the Effective Date, MSRx shall send an NDA transfer letter to the FDA acknowledging such transfer. The NDA shall initially be held in the name of Galena; provided, however, the NDA may be transferred to one of Galena’s Affiliates. Any responsibility of Galena under this Section 4.4 shall be Galena’s sole responsibility and MSRx shall be prohibited from conducting such responsibility. MSRx shall have the right to access, use and reference the NDA, including any and all data and other information directly relating thereto solely for the purpose of developing and obtaining Regulatory Approvals to market and sell products outside of the Territory, the Indication and/or the Dosage Strength. Galena agrees to provide similar use of the NDA to MSRx’s partners outside of the Territory as reasonably requested by MSRx. MSRx shall be responsible for all costs and expenses related to its access, use and reference to the NDA as contemplated by this Section 4.4.

 

4.5.            Changes.

 

4.5.1            In the event that Galena is required to change the labeling, packaging or Specifications for the Product pursuant to Applicable Law, or in response to an order or request of a Regulatory Authority or following the transfer of the NDA per this Agreement, Galena shall advise MSRx in writing of any such change, as well as any Supply scheduling adjustments which may result from such change. Galena shall be responsible for the costs of implementing any such change; provided, however, that MSRx shall be solely responsible for all such costs if such change: (a) results from the fault or negligence of MSRx; (b) results from the breach by MSRx of its obligations under this Agreement; or (c) relates to the manufacturing facility generally or to equipment which is not specifically dedicated to the Product (including the use of a secondary or “redundant” manufacturing facility). Upon request, each of the Parties shall provide to the other Party reasonable advance notice of and documentation of such Party’s costs related to such change and permit the other Party to review and audit such costs under the same audit guidelines as set forth in Sections 7.8 and 7.9.

 

 

 

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4.5.2            Subject to Section 2.5.2, Galena shall have the right, upon prior written notice to MSRx, to change the labeling or packaging for the Product. Such changes shall be at Galena’s sole cost and expense (including paying MSRx for the cost of any and all inventory, work-in-process, Raw Materials and packaging materials of MSRx which becomes obsolete or unusable as a result of such request), and the Parties shall agree in good faith on a reasonable timeframe for implementation of such changes, including without limitation, giving effect to the use of the remaining work-in-process, Raw Materials and packaging materials in-process or held in inventory by MSRx prior to effecting such change. MSRx shall not be required to make any such change if: (a) it results in the need for any un-reimbursable capital investment by MSRx; or (b) it results in any un-reimbursable cost increases (including manpower allocations or resources) to MSRx.

 

4.5.3            Both Parties shall have the right to request that a change be made to the Specifications for the Product at its expense and upon prior written notice and approval to the other Party and, if approved, the Parties shall agree on a reasonable timeframe for implementation of such changes. Any changes required to the Specifications of the Product by the FDA that are not a result of a filing or submission elected by Galena shall be the financial responsibility of MSRx. No change shall be made to the Specifications without the mutual agreement of the Parties and neither Party shall be required to make or accept any such change if: (a) it results in the need for any un-reimbursable capital investment by such Party; (b) it results in any un-reimbursable cost increases (including manpower allocations or resources) to such Party; or (c) it requires any changes to the Regulatory Approvals or could have a material adverse effect on the Commercialization of the Product.

 

SECTION 5. COMMERCIALIZATION

 

5.1             Galena Responsibility and Control. Except as otherwise expressly set forth herein, Galena shall have responsibility for all Commercialization activities for the Product in the Territory, including developing strategies and tactics related to the advertising, promotion, pricing, marketing and selling the Product. Galena shall have final decision-making authority and primary responsibility for all Commercialization strategies, plans and activities regarding the Product in the Territory. Galena shall comply and shall require all of its Third Party agents and contractors, if any, to comply, with all Applicable Laws in Commercializing the Product in accordance with this Agreement.

 

5.2             Specific Commercialization Rights and Obligations of Galena. Galena shall use Commercially Reasonable Efforts to Commercialize the Product in a manner consistent with the then-current Commercialization plan. Subject to any conditions or limitations set forth herein, it shall be Galena’s sole right and responsibility to: (a) develop advertising and promotional materials related to the Product; (b) book sales for the Product; (c) handle all returns of the Product; (d) handle all aspects of order processing, invoicing and collection of receivables for the Product; (e) collect data regarding sales to hospitals and other end users of the Product; (f) monitor inventory levels of the Product; (g) provide first line customer support and pharmacovigilance; (h) warehouse the Product; and (i) determine the prices for the Product and any discounts and rebates that may be offered thereto, including decisions relating to customer allowances and credits. Galena shall determine the Commercialization plan(s) and Commercialization activities, and the execution thereof shall be within Galena’s sole decision- making authority and control.

 

5.3             Product Launch and Market Coverage. Provided there are no regulatory or legal disputes or issues related to the Commercialization of the Product and provided Galena has on hand enough approved and saleable Product to successfully launch the Commercialization of the Product consistent with the forecasts delivered by Galena in accordance with Section 6.5.1 then Galena will use Commercially Reasonable Efforts to begin its Commercialization of the Product on or before December 31, 2014. Until such time as (i) the previous rolling twelve (12) months net sales for Galena exceeds [***] million dollars ($[***]) or (ii) there is a Competing Product approved by the FDA and be placed into the market for sale, Galena will maintain a minimum Average Field Force of [***] ([***]) Field Personnel with a minimum of [***] percent ([***]%) of a sales representative’s commission plan based on the Product.

 

 

 

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5.4             Commercialization and Marketing Expenses. Except as expressly set forth in this Agreement, Galena shall be responsible and pay for [***] percent ([***]%) of the Marketing Expenses for the Product in the Territory including the costs and expenses incurred in connection with Galena’s responsibilities under this Section 5.

 

SECTION 6. MANUFACTURING

 

6.1.            Supply Obligations. Subject to the terms and conditions hereof (including Section 2.2), during the Term, MSRx shall exclusively Supply Galena and Galena’s Affiliates with, and Galena shall exclusively purchase from MSRx, all of Galena’s and its Affiliates’ requirements for the Product in the Territory during the Term, pursuant to purchase orders delivered by Galena or its Affiliate to MSRx in accordance with Section 6.4. MSRx shall Supply the Product in Units (single dosage strips packaged according to Product and/or sample Specifications and bulk packed for shipment as agreed by the Parties) in accordance with the terms and conditions of this Agreement, Applicable Law, the Specifications and cGMP. MSRx shall release the Product to Galena in accordance with this Section 6.

 

6.2.             Supply Price. With respect to Product supplied by MSRx to Galena under this Agreement: (a) MSRx shall supply quantities of each Unit of the Product to Galena at a cost per Unit of $[***] (the “Product Supply Price”); (b) MSRx shall supply each such dose individually packaged in a foil sachet; and (c) MSRx will supply Product in soldier-packed boxes of no less than [***] Units per box.

 

6.3.             Raw Materials. MSRx shall have responsibility for the procurement, manufacture, vendor qualification and compliance, quality control, processing, testing, storage, treatment and handling of all packaging, API and other raw materials, chemicals, work-in- process and other materials used for Supply (collectively, “Raw Materials”). MSRx shall be solely responsible for disposing of all Raw Materials and wastes arising from its performance hereunder and for performance of its obligations hereunder in accordance with Applicable Law in effect at the time and place of manufacture of the Product.

 

6.4.             Quality Assurance and Quality Control; Expiration of Product. All quality control processes and procedures relating to the Product shall be the sole cost and responsibility of MSRx. MSRx shall conduct quality control testing of Product prior to shipment in accordance with the Product’s NDA and Applicable Law. MSRx shall prepare and retain records pertaining to such testing as required by Applicable Law and MSRx’s standard operating procedures. In no event shall the Product Supplied by MSRx hereunder have an expiration date of less than thirty (30) months from the date it is released for shipment to Galena (or Galena’s subcontractor).

 

6.5.             Forecasts, Order and Delivery of Products.

 

6.5.1                In order to assist MSRx in planning production. Galena shall deliver to MSRx in advance of each Calendar Quarter a supply forecast that includes the quantities of Product by Dosage Strength (including samples) required by Galena (and/or its Affiliates, subcontractors and distributors) by month for the next twelve (12) months. The first such forecast for each Product by Dosage Strength shall be delivered by Galena to MSRx no later than thirty (30) days after the Effective Date of the Agreement and thereafter on the first Business Day of each February, May, August and November of each calendar year during the Term for the immediately succeeding calendar quarter. MSRx shall, no later than ten (10) days after receipt of each such forecast, notify Galena in writing of any objections or prospective problems in meeting Galena’s forecasted requirements. If no communication is forthcoming then the forecast is presumed to be accepted.

 

 

 

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6.5.2                Galena shall furnish to MSRx binding purchase orders on a monthly basis. Each such purchase order shall designate the quantity of Product by Dosage Strength ordered and the requested date of delivery of the Product to Galena or to Galena’s Affiliates or any Third Party designated by Galena. Galena shall furnish purchase orders by the 5th Business Day of each month and a minimum of sixty (60) days prior to the requested delivery (release for shipment) date. Each purchase order shall be in whole batch sizes based on the 115kg batch size utilized by MSRx (i.e., soldier-packed boxes of no less than [***] Units per box), subject to the proviso in Section 6.2(c). Galena may split purchase orders for a batch on a 50/50 basis between any two of the following: Dosage Strengths, samples, and commercial supply. The Parties agree that no provision of any purchase order, invoice or of any confirmation or acknowledgement or any other documentation or forms submitted by either Party to the other Party shall be controlling to the extent it sets forth any terms or conditions that are additional to, or in conflict or inconsistent with, the terms or conditions of this Agreement.

 

6.5.3                MSRx shall ensure its ability to Supply Product covered under binding purchase orders furnished by Galena in accordance with the terms of this Agreement. MSRx and Galena will consider a purchase order filled as long as no less than [***]% and no more than [***]% of the quantities are delivered against the purchase order. Galena agrees to accept delivery of up to [***]% of the requested purchase order.

 

6.5.4                MSRx shall deliver Product set forth in each purchase order Ex Works (Incoterms 2010 edition, published by the International Chamber of Commerce) at the applicable manufacturing facility to Galena’s designated carrier as specified by Galena in the applicable purchase order or otherwise notified in writing to MSRx by Galena. Galena reserves the right to designate the carrier for shipment from the manufacturing facility.

6.6.           Invoice. MSRx shall invoice Galena at the Product Supply Price for all quantities of Product delivered in accordance herewith. Each invoice shall be delivered concurrently with each shipment of Product and be accompanied by a Certificate of Analysis, Certificate of Compliance and any other documentation required by the applicable Regulatory Authorities or by Applicable Law to Commercialize the Product in the Territory. Payments shall be made in accordance with Section 7.4, and shall be due within sixty (60) days after receipt of the invoice with respect thereto, subject to the procedure for rejected shipments set forth in Section 6.7 for a period of six (6) months from the First Commercial Sale. Thereafter, payments shall be due within thirty (30) days after receipt of the invoice.

 

6.7.           Product Not in Compliance with Purchase Order. Within thirty (30) days after receipt of the Product or stability failure for the Product, as applicable. Galena or its agent shall perform an examination of the Certificates of Analysis and other documentation, if any, provided with each shipment of Product, and shall determine whether such Product meets the requirements of the applicable purchase order. In the event that Galena determines, within such thirty (30) day period, that any Product Supplied by MSRx does not conform to the applicable purchase order, Galena shall give MSRx written notice thereof and the reason(s) therefore within thirty (30) days after receipt thereof. If Galena does not submit written notice of rejection within such thirty (30) day period, such Product shall be deemed accepted by Galena. If MSRx agrees that a rejection is justified, MSRx shall have the right, and if such right is exercised shall not be deemed a default hereunder: (a) to correct such shipment to conform to the applicable purchase order; or (b) grant Galena a credit on that portion of the shipment that is nonconforming.

 

 

 

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6.8.           Inspection by Galena. At any time during the Term of this Agreement and upon not less than ten (10) Business Days’ prior written notice, MSRx shall permit Galena to inspect any facility (including any subcontractors’ facilities) where the Supply of the Product is carried out in order to assess MSRx’s compliance with cGMP and other Applicable Law, and to discuss any related issues with MSRx’s management personnel.

 

6.9.           Inspections by Regulatory Authorities. MSRx shall allow representatives of any Regulatory Authority to inspect the relevant parts of the facility where the Supply of Product is carried out and to inspect the lot, batch and other manufacturing records to verify compliance with cGMP and other Applicable Law and practices and shall promptly notify Galena of the scheduling of any such inspection relating to Supply. MSRx shall promptly send to Galena a copy of any reports, citations, or warning letters received by MSRx in connection with an inspection by a Regulatory Authority to the extent such documents relate to or affect Supply.

 

6.10.           Quality Agreement. Within thirty (30) days from the Effective Date, the Parties will enter into an agreement that details the quality assurance obligations of each Party (the “Quality Agreement”). MSRx will provide Galena with a draft copy of the Quality Agreement prior to the Effective Date of the Agreement. Notwithstanding the foregoing, neither the Quality Agreement, nor the absence of a Quality Agreement, shall affect the rights and obligations of the Parties under this Agreement. The Parties shall amend the Quality Agreement from time to time as the Parties deem necessary. All Product supplied to Galena shall be supplied in accordance with the Quality Agreement. The Quality Agreement, as may be amended from time to time, is hereby incorporated by reference into and made part of this Agreement.

 

SECTION 7. PAYMENTS AND REPORTS

 

7.1            Milestone Payments.

 

7.1.1        One-time non-refundable payments will be due from Galena to MSRx in consideration of each of the following milestone events:

 

7.1.1.1       Following the completion of the transfer to Galena of the NDA, as contemplated by Section 4.4, hereof, Galena shall pay to MSRx the sum of (i) Five Million Dollars ($5,000,000) and (ii) the [***] for the [***] ([***]) SKUs of the Product for Calendar Year 2014 ($[***]) (the “First Milestone”); provided that such payments in respect of the First Milestone shall be payable in two installments, as follows: (x) the first installment of $[***] shall be payable in cash upon its release pursuant to the terms of the Escrow Agreement, and (y) the second installment of [***] Dollars ($[***]) shall be payable in any combination of cash or shares of Galena Common Stock, as described in Section 7.2, within ninety (90) days following Galena’s receipt of written confirmation of such NDA transfer.

 

  

  

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7.1.1.2       The earlier of either (i) within thirty (30) days of Galena’s achievement of [***] for the Product in [***]% of the commercially insured lives in the United States of America with the [***], as defined by Fingertip Formulary or (ii) by December 31, 2014, Galena shall pay the sum of $[***] (the “Second Milestone”).

 

7.1.1.3       Within thirty (30) days from the date that MSRx pays all applicable issue fee(s) relating to the notice of allowance issued by the United Statement Patent and Trademark Office covering the issuance of a U.S. patent with composition claims covering the Product that extend the term beyond 2028, Galena shall pay to MSRx the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the “Third Milestone”).

 

7.1.2            Commencing on the Effective Date, a one-time non-refundable payment will be due from Galena to MSRx in consideration of Galena’s achievement of the following Net Sales milestones (each, a “Net Sales Milestone,” and together, the “Net Sales Milestones”) achieved during the Term:

 

	
Net Sales Milestone Event

	
Milestone Payment

	
Annual Net Sales reach $[***]

	
$[***]

	
Annual Net Sales reach $[***]

	
$[***]

	
Annual Net Sales reach $[***]

	
$[***]

	
Annual Net Sales reach $[***]

	
$[***]

	
Annual Net Sales reach $[***]

	
$[***]

	
Annual Net Sales reach $[***]

	
$[***]

 

 

For each Net Sales Milestone achieved, Galena shall notify MSRx in writing and promptly remit payment to MSRx against the applicable Net Sales Milestone in timing consistent with the Quarterly Royalty Reports described in Section 7.4 below. For the avoidance of doubt, in no event shall more than one Net Sales Milestone be payable in any one calendar year, but in such case the Net Sales Milestone with the highest payment shall be deemed earned and Galena shall have no further obligation with respect to any such lesser Net Sales Milestones.

 

  

  

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7.2              Form of First Milestone Payment. Galena may, in its sole discretion, satisfy the second installment of the payment relating to the First Milestone (i.e., the installment described in clause (y) of Section 7.1.1.1) in cash or by the issuance of shares of Galena Common Stock to MSRx or its designee, or any combination thereof; provided, however, that Galena’s right to issue shares of Galena Common Stock shall be conditioned upon such shares being registered for resale under the Securities Act of 1933, as amended (the “Securities Act”) at the time of issuance. If Galena elects to issue shares to satisfy such installment, the number of shares of Galena Common Stock to be issued shall be determined by dividing the amount of such installment to be satisfied in Galena Common Stock by the closing sale price (during the regular trading day) of one share of Galena Common Stock as of the 89th day following the achievement of the First Milestone, as reported on the NASDAQ Global Market. Notwithstanding anything to the contrary contained herein, under no circumstances shall Galena be permitted to satisfy any such Milestone payment with shares of Galena Common Stock unless such issuance of Galena Common Stock is permitted under Rule 5635(a) of the NASDAQ Listing Rules (or any successor rule thereto). In the event Galena elects to issue shares of Galena Common stock in satisfaction of the First Milestone, it shall undertake to file a registration statement under the Securities Act on Form S-3 (or such other appropriate form as Galena is then eligible to use) covering the resale of such shares by MSRx (the “Registration Statement”). Following the effective date of the Registration Statement, Galena shall use commercially reasonable efforts to maintain the effectiveness of the Registration Statement until the earlier of (A) such time as the shares of Galena Common Stock covered thereby have been resold pursuant to the Registration Statement or are eligible to be resold by MSRx pursuant to Rule 144 promulgated under the Securities Act, or (B) the effective time of a merger, consolidation, tender offer or other similar business combination transaction pursuant to which all of the outstanding shares of Galena Common Stock are purchased or otherwise acquired by a third party pursuant to such merger, consolidation, tender offer or other business combination transaction. MSRx agrees to provide Galena with such information regarding itself, its beneficial ownership of Galena Common Stock, and the intended method of disposition of the shares subject to the Registration Statement as shall be reasonably required by Galena to effect such registration. Galena shall bear all expenses relating to the preparation and filing of the Registration Statement and all expenses relating to the sale of the Galena Common Stock covered thereby by MSRx, including underwriting discounts and commissions and any professional fees or costs of accounting, financial or legal advisors to MSRx, up to a maximum aggregate of [***] Dollars ($[***]).

 

7.3               Royalties.

 

7.3.1       As consideration for the license and other rights granted to Galena under this Agreement, during the Term and in addition to any payments set forth in Sections 6 and 7.1, Galena shall pay to MSRx a royalty payment based upon the actual U.S. dollar value of Net Sales, except as expressly provided herein, of [***] ([***]%) percent of Annual Net Sales; provided, however, that in the event any Third Party Commercializes a Competing Product, such royalty rate shall be reduced to [***] percent ([***]%) beginning with the first Calendar Quarter such Competing Product is marketed and sold in the Territory and continuing until there is no Competing Product in the Territory at which time the royalty payment will revert back to [***] ([***]%) percent. For avoidance of doubt, Galena shall not pay MSRx a royalty payment for any Product in the distribution channel prior to the Effective Date. Further, Galena shall not pay a royalty payment to MSRx on any orders for the Product received by Galena from Cardinal Health, AmerisourceBergen, and McKesson for the purposes of return or replacement of any Product in distribution channel as of the Effective Date that is set to expire.

 

7.3.2        The target minimum royalty in each Royalty Period shall be:

 

	
Year

	
Target Royalty

	
Year 1

	
[***]

	
Year 2

	
[***]

	
Year 3 and beyond

	
$[***]

 

  

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

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If for any Royalty Period the total royalties payable to MSRx pursuant to this Section 7.3 do not meet or exceed such target minimum royalty then, Galena may, at its sole discretion, within forty-five (45) days after the end of such Royalty Period pay to MSRx the difference between: (a) such target minimum royalty and (b) all royalty payments made to MSRx pursuant to this Section 7.3 for such Royalty Period. Pursuant to this section, should a Competing Product or generic-like product become available utilizing the API with a film strip technology, no Minimum Royalty shall be due on an annualized basis from such time that such other product receives approval from the FDA. If Galena does not make such payment within such forty-five (45) day timeframe, then MSRx shall have for a period of thirty (30) days an option to terminate this Agreement upon forty-five (45) days prior written notice to Galena.

 

7.4           Royalty Reports and Payments. During the Term, Galena shall make quarterly royalty payment reports (“Quarterly Royalty Reports”) to MSRx on or before the sixtieth (60th) day following the end of the Calendar Quarters ending on March 31, June 30, September 30, and December 31. Each Quarterly Royalty Report shall cover the most recently completed Calendar Quarter and shall show: (a) the gross and Net Sales of the Product during the most recently completed Calendar Quarter including reasonable detail with respect to the calculation of Net Sales such as units sold, discounts, credits and other components in the calculation of Net Sales; and (b) the royalties, in U.S. dollars, payable with respect to such Net Sales. Each Quarterly Royalty Report shall be accompanied by the payment shown as due on such Quarterly Royalty Report.

 

7.5           Manner of Payment. All sums due under this Agreement shall be payable in U.S. dollars by bank wire in immediately available funds to such bank account(s) as MSRx shall designate. Galena shall notify MSRx as to the date and amount of any such wire transfer to MSRx at least two (2) Business Days prior to such transfer. All amounts greater than thirty (30) days past due to MSRx hereunder shall bear interest at the rate equal to [***] percent ([***]%) per month or at the highest rate permitted by New Jersey law, whichever is less.

 

7.6           Bartering Prohibited. Galena and its Affiliates, and subcontractors shall not solicit or accept any bartered goods or services in exchange for the sale or transfer of the Product.

 

7.7           Taxes and Withholding. Except with respect to the calculation of Net Sales, all payments under this Agreement will be made without any deduction or withholding for or on account of any tax, duties, levies, or other charges unless such deduction or withholding is required by Applicable Law. If Galena is so required to deduct or withhold. Galena will: (a) notify MSRx of such requirement in writing; (b) pay to the relevant authorities the full amount required to be deducted or withheld promptly upon the earlier of determining that such deduction or withholding is required; and (c) forward to MSRx an official receipt (or certified copy) or other documentation reasonably acceptable to MSRx evidencing such payment to such authorities.

 

7.8           Accounting. All financial terms and standards defined or used in this Agreement for sales or activities occurring in the Territory shall be governed by and determined in accordance with GAAP, including the calculation of Net Sales and royalties due MSRx hereunder; provided that when the actual results become known relative to any accrued amount, any difference between the actual results and the accrual is reported and accounted for in the next payment due hereunder (subject to customary processing periods). To the extent that the difference between such accruals and the actual results has led to an underpayment, Galena shall pay MSRx the amount of such underpayment on the next date payment is due to MSRx hereunder. To the extent that the difference between such accruals and the actual results has led to an overpayment to MSRx, Galena may set-off such overpayments against subsequent payments to be made to MSRx; additionally, if any overpayments remain upon the expiration or termination of this Agreement, MSRx shall refund such overpayments to Galena within thirty (30) days of receiving an invoice for such overpayment together with applicable supporting documentation.

 

  

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

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7.9              Record Keeping; Audits. Galena and its Affiliates shall keep books and accounts of record in connection with Net Sales of the Product in sufficient detail to permit accurate determination of all figures necessary for verification of royalties to be paid hereunder. Galena and its Affiliates shall maintain such records for a period of at least three (3) years after the end of the Calendar Quarter in which they were generated; provided, however, that if any records are in dispute and Galena has received written notice from MSRx of the records which are in dispute, Galena and its Affiliates shall keep such records until the later of one (1) year or until such dispute is resolved. No more than once every calendar year, upon reasonable notice to Galena, an independent auditor designated by MSRx shall have the right to examine Galena’s (or its Affiliates’ or subcontractors’) records to determine the correctness of the amount of royalties paid to MSRx under the terms of this Agreement. All costs and expenses of such auditor incurred in connection with performing any such audit shall be paid by MSRx unless such audit discloses an underpayment of at least [***] percent ([***]%), in which case Galena shall bear such costs and expenses.

 

7.10             Underpayments and Overpayments. If an audit conducted pursuant to Section 7.10 reveals that additional royalties were due to MSRx under this Agreement, then Galena shall pay to MSRx the additional royalties within ten (10) days of the date Galena receives written notice of such underpayment, together with interest thereon from the date such royalty payments were due in the first instance at the rate equal to [***] percent ([***]%) per month or at the highest rate permitted by New Jersey law, whichever is less. If an audit conducted pursuant to Section 7.10 reveals that MSRx was paid royalties in excess of those royalties due to MSRx under this Agreement, then Galena shall deduct such amount from the next royalty payment due MSRx under this Agreement.

 

SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS

 

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

 

8.1.1        Such Party: (a) is duly formed and in good standing under the laws of the jurisdiction of its formation; (b) has the power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; and (c) has taken all necessary action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. 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 enforceable against it 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.

 

8.1.2       All necessary consents, approvals and authorizations of all Regulatory- 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 hereunder have been obtained.

 

 

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

8.1.3        The execution and delivery of this Agreement, the performance of such Party’s obligations hereunder, and any actions or omissions of such Party related to the activities contemplated hereunder and the circumstances surrounding this Agreement: (a) do not and will not conflict with or violate any Applicable Law or any provision of the articles of incorporation, bylaws or other governing charter documents of such Party; and (b) do not and will 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.

 

8.1.4      Each Party agrees not to engage in any action that is in violation or inconsistent with the terms and conditions of this Agreement or that interferes with the consummation of the transactions contemplated under this Agreement.

 

8.2               Additional MSRx Representations, Warranties and Covenants. MSRx represents, warrants and covenants to Galena as follows:

 

8.2.1       MSRx exclusively owns the MSRx IP and shall continue to do so during the Term. MSRx has not received any written notice of any Third Party Claim alleging infringement or misappropriation of any Intellectual Property of any Third Party related to the MSRx IP or the Product, and, to the knowledge of the management of MSRx, without independent investigation, there are no circumstances or conditions in existence as of the Effective Date that would reasonably be expected to give rise to a claim that the MSRx IP or the Product infringes any Intellectual Property of any Third Party or that MSRx has misappropriated any Intellectual Property of any Third Party related to the MSRx IP or the Product.

 

8.2.2       MSRx and its Affiliates have the right to grant the licenses granted to Galena herein and MSRx owns all right, title and interest in and to all of the MSRx IP and the NDA free and clear of any Liens as of the Effective Date. Without limiting the foregoing, MSRx has not granted any licenses to any Third Party that would prohibit the license granted to Galena under Section 2 of this Agreement.

 

8.2.3       Neither MSRx nor any of its Affiliates is a party to or otherwise bound by any oral or written contract or agreement that will result in any Third Party obtaining any interest in, or that would give to any Third Party any right to assert any claim in or with respect to, any of Galena’s rights under this Agreement.

 

8.2.4       During the Term, MSRx shall comply with and maintain in force all licenses, consents, permits and authorization and maintain all facilities which may be required with respect to the Supply of Product and its performance of its obligations hereunder.

 

8.2.5       During the Term MSRx shall comply with and maintain in force all licenses, consents, permits and authorization which may be required with respect to the facility where the Supply of the Product is carried out and its performance of its obligations hereunder, including without limitation, licenses and permits issued or required by all Regulatory Authorities and those required in relation to the generation, storage, treatment, transport, possession, handling and disposal of any waste and MSRx shall Supply Product in compliance with all such licenses, consents, permits and authorization.

 

8.2.6       MSRx shall not during the Term in the Territory: (a) Supply (either directly or indirectly) or arrange for the supply of Product or any Competing Product to any Affiliate of MSRx or any Third Party or for MSRx’s own account; or (b) manufacture Product or any Completing Product for the account of any Third Party besides Galena or its Affiliates or their permitted Third Party designees for distribution in the Territory.

 

 

 

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

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8.2.7       The Product shall: (a) be Supplied in accordance with the Specifications, Quality Agreement, cGMP and applicable current FDA guidelines; (b) be in conformity with the applicable Specifications, applicable Regulatory Approval, Applicable Law and the Certificate of Analysis; and (c) be in dosage form labeled, packaged and tested for commercial sale in the Territory and title to such Product shall pass to Galena as provided herein free and clear of any security interest, lien or other encumbrance.

 

8.2.8       The Product as delivered to Galena in accordance with Section 6 above shall not contain any product or article that would cause the Product to be adulterated or misbranded within the meaning of the Act.

 

8.2.9       To the best of MSRx’s knowledge: (a) it has not and will not use during the Term services of any persons debarred under 21 U.S.C. § 335(a) or (b) in any capacity associated with or related to the manufacture of the Product; and (b) neither MSRx nor any of its officers or employees has been convicted of a felony under United States law for conduct relating to the development or approval, including the process for development or approval, of any drug product, new drug application or abbreviated new drug application and neither MSRx nor any of its officers or employees has been convicted of a felony under United States law for conduct relating to the regulation of any product under the Act.

 

8.3.            Additional Galena Representations, Warranties and Covenants. Galena further represents, warrants and covenants to MSRx that:

 

8.3.1       It has utilized its own scientific, marketing and distribution expertise and experience to analyze and evaluate both the scientific and commercial value of the Product and, subject to the representations, warranties and covenants of MSRx contained in this Agreement, has solely relied on such analysis and evaluations in deciding to enter into this Agreement.

 

8.3.2        Neither Galena nor any of its Affiliates is a party to or otherwise bound by any oral or written contract or agreement that will result in any Third Party obtaining any interest in, or that would give to any Third Party any right to assert any claim in or with respect to, any of MSRx’s rights under this Agreement.

 

8.3.3        During the Term, Galena shall comply with and maintain in force all licenses, consents, permits and authorizations necessary to perform its obligations under this Agreement.

 

8.3.4        During the Term, Galena shall not directly or indirectly, and shall cause its Affiliates not to directly or indirectly, develop, market and/or sell Competing Product, or enter into any agreement or arrangement or otherwise engage in any activities relating to the foregoing.

 

  

  

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

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8.4.            Disclaimer. EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH HEREIN, NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY OR REPRESENTATION BY MSRX THAT: (A) THE PRODUCT IS OR WILL BE FREE FROM INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS, INDUSTRIAL DESIGN OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY; OR (B) REGARDING THE EFFECTIVENESS, VALUE, SAFETY, NON-TOXICITY OF THE PRODUCT OR ANY INFORMATION OR RESULTS PROVIDED BY MSRX PURSUANT TO THIS AGREEMENT. EXCEPT AS SET FORTH HEREIN, MSRX HEREBY DISCLAIMS, AND GALENA HEREBY WAIVES, RELEASES AND RENOUNCES, ALL WARRANTIES, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY DEFECT IN THE PRODUCT PROVIDED HEREUNDER OR THE API INCLUDED THEREIN, INCLUDING, BUT NOT LIMITED TO, (I) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR (II) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE.

 

SECTION 9. CONFIDENTIAL INFORMATION

 

9.1.            General. Pursuant to the terms of this Agreement, each of MSRx and Galena (in such capacity, the “Disclosing Party”) has disclosed and will be disclosing to the other Party, and to the officers, directors, employees, agents and/or representatives of each (in such capacity, the “Receiving Party”) certain secret, confidential or proprietary data, Intellectual Property and related information, including, without limitation, operating methods and procedures, marketing, manufacturing, distribution and sales methods and systems, sales figures, pricing policies and price lists and other business information (“Confidential Information”). Without limiting the foregoing, it is acknowledged that the MSRx IP shall constitute the Confidential Information of MSRx (subject to Section 9.2) and the Quarterly Royalty Payments shall constitute the Confidential Information of Galena for purposes of this Agreement. The Receiving Party shall make no use of any Confidential Information of the Disclosing Party except in the exercise of its rights and the performance of its obligations set forth in this Agreement. The Receiving Party: (a) shall keep and hold as confidential, and shall cause its officers, directors, employees, agents and representatives to keep and hold as confidential, all Confidential Information of the Disclosing Party; and (b) shall not disclose, and shall cause its officers, directors, employees, agents and representatives not to disclose, any Confidential Information of the Disclosing Party. Confidential Information disclosed by the Disclosing Party shall remain the sole and absolute property of the Disclosing Party, subject to the rights granted in this Agreement or Applicable Law.

 

9.2.            Exceptions. The above restrictions set forth in Section 9.1 on the use and disclosure of Confidential Information shall not apply to any information which: (a) is already known to the Receiving Party at the time of disclosure by the Disclosing Party, as demonstrated by competent proof (other than as a result of prior disclosure under any agreement between the Parties with respect to confidentiality); (b) is or becomes generally known or available to the public other than through any act or omission of the Receiving Party in breach of this Agreement; (c) is acquired by the Receiving Party from a Third Party who is not directly or indirectly under an obligation of confidentiality to the Disclosing Party with respect to same, or (iv) is developed independently by the Receiving Party without the use, direct or indirect, of the Disclosing Party’s Confidential Information. In addition, nothing in this Section 9 shall be interpreted to limit the ability of either Party to disclose its own Confidential Information to any other Person on such terms and subject to such conditions as it deems advisable or appropriate.

 

9.3.            Permitted Disclosures. It shall not be a breach of Section 9.1 if a Receiving Party discloses Confidential Information of a Disclosing Party: (a) pursuant to Applicable Law, including securities laws applicable to a public company, to any Regulatory Authority or the listing standards or agreements of any national or international securities exchange or The NASDAQ Stock Market or other governmental authority; or (b) in a judicial, administrative or arbitration proceeding to enforce such Party’s rights under this Agreement; provided, however, that the Receiving Party (i) provides the Disclosing Party with as much advance written notice as possible of the required disclosure, (ii) reasonably cooperates with the Disclosing Party in any attempt to prevent, limit or seek confidential treatment for the disclosure and (iii) discloses only the minimum amount of Confidential Information necessary for compliance.

 

  

  

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9.4.            Confidential Terms. Each Party acknowledges and agrees that the terms and conditions of this Agreement shall be considered Confidential Information of each Party and shall be treated accordingly. Notwithstanding the foregoing, each Party acknowledges and agrees that the other may be required to disclose some or all of the information included in this Agreement in order to comply with its obligations under securities laws or the listing standards or agreements of any national or international securities exchange or The NASDAQ Stock Market, and hereby consents to such disclosure to the extent deemed advisable or appropriate by its respective counsel (but only after consulting with the other to the extent practicable). The Parties may also disclose the existence of this Agreement and terms thereof to their directors, investors, officers, employees, attorneys, accountants and other advisers on a need to know basis and may, upon obtaining a written confidentiality agreement, further disclose the existence and terms of this Agreement to any Third Party to whom it may be relevant in connection with financings, acquisitions and similar transactions.

 

9.5.            Equitable Remedies . Each Party specifically recognizes that any breach by it of this Section 9 may cause irreparable injury to the other Party and that actual damages may be difficult to ascertain, and in any event, may be inadequate. Accordingly (and without limiting the availability of legal or equitable, including injunctive, remedies under any other provisions of this Agreement), each Party agrees that in the event of any such breach, the other Party shall be entitled to seek injunctive relief and such other legal and equitable remedies as may be available.

 

SECTION 10. INDEMNIFICATION; LIMITATION OF LIABILITY

 

10.1.            Indemnification by Galena. Galena shall defend, indemnify and hold harmless MSRx and its Affiliates and each of their respective officers, directors, shareholders, employees, successors and assigns from and against all Third Party Claims, and all associated Losses, to the extent arising out of: (a) the gross negligence or willful misconduct of Galena or any of its Affiliates or subcontractors in performing any of Galena’s obligations under this Agreement; or (b) a material breach by Galena or any of its Affiliates or subcontractors of any of Galena’s representations, warranties, covenants or agreements under this Agreement; provided, however, that in all cases referred to in this Section 10.1, Galena shall not be liable to indemnify MSRx for any Losses of MSRx to the extent that such Losses of MSRx were caused by: (i) the gross negligence or willful misconduct or intentional wrongdoing of MSRx or any of its Affiliates; (ii) any breach by MSRx or any of its Affiliates of MSRx’s representations, warranties, covenants or agreements under this Agreement; or (iii) matters for which MSRx provides indemnity pursuant to Section 10.2(c).

 

10.2.            Indemnification by MSRx. MSRx shall defend, indemnify and hold harmless Galena and its Affiliates and each of their respective officers, directors, shareholders, employees, successors and assigns from and against all Third Party Claims, and all associated Losses, to the extent arising out of: (a) MSRx’s gross negligence or willful misconduct in performing any of its obligations under this Agreement; (b) a material breach by MSRx of any of its representations, warranties, covenants or agreements under this Agreement; or (c) a claim or demand by a Third Party that the Product in the Territory during the Term infringes on the Intellectual Property or other proprietary rights of such Third Party; provided, however, that in all cases referred to in this Section 10.2, MSRx shall not be liable to indemnify Galena for any Losses of Galena to the extent that such Losses of Galena were caused by (i) the gross negligence or willful misconduct or intentional wrongdoing of Galena or any of its Affiliates or subcontractors or (ii) any breach by Galena or any of its Affiliates of Galena’s representations, warranties, covenants or agreements under this Agreement.

 

  

  

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10.3.           Procedure for Indemnification.

 

10.3.1      Notice. In the case of a Third Party Claim or demand other than Patent Claims (which are subject to the procedures set forth in Section 13.3) (“Third Party Claim”) made by any Person who is not a Party of this Agreement (or an Affiliate thereof) as to which a Party (the “Indemnitor”) may be obligated to provide indemnification pursuant to this Agreement, such Party seeking indemnification hereunder (“Indemnitee”) will notify the Indemnitor in writing of the Third Party Claim (and specifying in reasonable detail the factual basis for the Third Party Claim and to the extent known, the amount of the Third Party Claim) reasonably promptly after becoming aware of such Third Party Claim; provided, however, that failure to give such notification will not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually materially prejudiced as a result of such failure.

 

10.3.2      Defense of Claim. If a Third Party Claim is made against an Indemnitee, the Indemnitor will be entitled, within thirty (30) days after receipt of written notice from the Indemnitee of the commencement or assertion of any such Third Party Claim, to assume the defense thereof by providing written notice to Indemnitee of its intention to assume the defense of such Third Party Claims within such thirty (30) day period (at the expense of the Indemnitor) with counsel selected by the Indemnitor and reasonably satisfactory to the Indemnitee for so long as the Indemnitor is conducting a good faith and diligent defense. Should the Indemnitor so elect to assume the defense of a Third Party Claim, the Indemnitor will not be liable to the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, that if under applicable standards of professional conduct a conflict of interest exists between the Indemnitor and the Indemnitee in respect of such claim, such Indemnitee shall have the right to employ separate counsel to represent such Indemnitee with respect to the matters as to which a conflict of interest exists and in that event the reasonable fees and expenses of such separate counsel shall be paid by such Indemnitor; provided, further, that the Indemnitor shall only be responsible for the reasonable fees and expenses of one separate counsel for such Indemnitee. If the Indemnitor assumes the defense of any Third Party Claim, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnitor. If the Indemnitor assumes the defense of any Third Party Claim, the Indemnitor will promptly supply to the Indemnitee copies of all correspondence and documents relating to or in connection with such Third Party Claim and keep the Indemnitee informed of developments relating to or in connection with such Third Party Claim, as may be reasonably requested by the Indemnitee (including, without limitation, providing to the Indemnitee on reasonable request updates and summaries as to the status thereof). If the Indemnitor chooses to defend a Third Party Claim, all Indemnitees shall reasonably cooperate with the Indemnitor in the defense thereof (such cooperation to be at the expense, including reasonable legal fees and expenses, of the Indemnitor). If the Indemnitor does not elect to assume control by written acknowledgement of the defense of any Third Party Claim within the thirty (30) day period set forth above, or if such good faith and diligent defense is not being or ceases to be conducted by the Indemnitor, the Indemnitee shall have the right, at the expense of the Indemnitor, after three (3) Business Days’ written notice to the Indemnitor of its intent to do so, to undertake the defense of the Third Party Claim for the account of the Indemnitor (with counsel selected by the Indemnitee), and to compromise or settle such Third Party Claim, exercising reasonable business judgment.

 

  

  

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10.3.3           Settlement of Claims. If the Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee for a Third Party Claim, the Indemnitee will agree to any settlement, compromise or discharge of such Third Party Claim that the Indemnitor may recommend that by its terms obligates the Indemnitor to pay the full amount of Losses (whether through settlement or otherwise) in connection with such Third Party Claim and unconditionally and irrevocably releases the Indemnitee completely from all Losses in connection with such Third Party Claim; provided, however, that, without the Indemnitee’s prior written consent, the Indemnitor shall not consent to any settlement, compromise or discharge (including, without limitation, the consent to entry of any judgment), that provides for injunctive or other nonmonetary relief affecting the Indemnitee.

10.4.         Assumption of Defense. Notwithstanding anything to the contrary contained herein, an Indemnitee shall be entitled to assume the defense of any Third Party Claim with respect to the Indemnitee upon written notice to the Indemnitor pursuant to this Section 10.4, in which case, the Indemnitor shall be relieved of liability under Section 10.1 or 10.2, as applicable, solely for such Third Party Claim and related Losses.

 

10.5.         Insurance. Immediately upon First Commercial Sale, during the Term and for a period of five (5) years after the termination or expiration of this Agreement, each Party shall obtain and/or maintain, respectively, at its sole cost and expense, product liability insurance (including any self-insured arrangements) in amounts, respectively, which are reasonable and customary in the U.S. pharmaceutical industry for companies of comparable size and activities at the respective place of business of each Party but in no event less than [***] dollars ($[***]). All insurance policies reflecting such insurance shall be written on a “‘per occurrence” or “claims made” basis with an insurance company rated at least A-3 by Best’s rating guide. Each of the Parties and their designees who have an insurable interest shall be added as an additional insured on the other Party’s product liability insurance policy. If requested, each Party shall provide the other with a certificate of insurance and shall keep such policy current. Each such insurance policy shall provide for at least thirty (30) calendar days prior written notice to the other Party of the cancellation or any substantial modification of the terms of coverage. Such product liability insurance (or self-insured arrangements) shall insure against all liability, including without limitation personal injury, physical injury, or property damage arising out of the manufacture, sale, distribution, or marketing of the Product. Each Party also agrees to waive, and will require its insurers to waive, all rights of subrogation against the other Party, and its directors, officers, employees, and agents on all the foregoing coverages.  Each Party shall provide written proof of the existence of such insurance to the other Party upon written request.

 

10.6.         Limitation of Liability. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR TO THE EXTENT CAUSED BY GROSS NEGLIGENCE OR INTENTIONAL ACTS OR OMISSIONS, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OF ITS AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, BUSINESS OR GOODWILL) SUFFERED OR INCURRED BY SUCH OTHER PARTY OR ITS AFFILIATES IN CONNECTION WITH A BREACH OR ALLEGED BREACH OF THIS AGREEMENT. THE FOREGOING SENTENCE SHALL NOT APPLY IN CASES OF FRAUD AND SHALL NOT LIMIT THE OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER PARTY FROM AND AGAINST THIRD PARTY CLAIMS UNDER THIS SECTION 10.

 

  

  

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SECTION 11. TERM AND TERMINATION

 

11.1.         Term. This Agreement shall commence as of the Effective Date and, unless earlier terminated or renewed in accordance with the terms hereof, shall expire on the tenth (10th) anniversary of the Effective Date (together with any renewal term, the “Term”). Thereafter this Agreement may be renewed on an annual basis by Galena by delivery written notice to MSRx not less than one hundred twenty (120) days prior to expiration of the initial Term or any renewal Term, as applicable.

 

11.2.          Termination. In addition to any other provision of this Agreement expressly providing for termination of this Agreement:

 

11.2.1      this Agreement may be terminated by either Party: (a) immediately upon written notice if the other Party shall file in any court or agency, pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for reorganization (except for the purposes of a bona fide amalgamation or other reorganization) or for an arrangement or for the appointment of a receiver or trustee of the other Party or of its assets, or if the other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days after the filing thereof, or if the other Party shall propose or be a party to any dissolution or liquidation, or if the other Party shall make an assignment for the benefit of its creditors; or (b) if the other Party commits any material misrepresentation or breach of any of its covenants, obligations, representations or warranties under this Agreement to which such action to terminate applies and, in the case of a breach which is capable of remedy, such Party fails to remedy the same within ninety (90) days after receipt of a written notice describing the breach and requiring it to be so remedied (or, in the case of Galena’s covenants and obligations under Section 5.3, Galena fails to remedy the same within sixty (60) days after receipt of a written notice describing the breach and requiring it to be so remedied);

 

11.2.2      this Agreement may be terminated by MSRx upon thirty (30) days prior written notice to Galena in the event that Galena fails to promptly pay any milestone as and when due pursuant to Section 7.1, or any royalty as and when due pursuant to Section 7.3.1, unless Galena makes such payment then due within thirty (30) days following receipt of such written termination notice from MSRx;

 

11.2.3      this Agreement may be terminated by MSRx as contemplated by Section 7.3.2 unless Galena makes such payment then due under 7.3.2 within thirty (30) days following receipt of such written termination notice from MSRx;

 

11.2.4      this Agreement may be terminated by MSRx upon ninety (90) days prior written notice to Galena in the event that Galena fails to use its Commercially Reasonable Efforts to maintain the NDA for the Product during the Term and Galena fails to remedy such failure within ninety (90) days of receipt of such notice;

 

 

 

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11.2.5      this Agreement may terminated by Galena upon thirty (30) days written notice if, on or prior to thirty (30) days after the Effective Date, any Third Party initiates any judicial or other governmental proceeding (including bringing any motion, appeal or otherwise seeking any remedy in any ongoing judicial or governmental proceeding) commenced under the Bankruptcy Code objecting to or attempting to void or render unenforceable this Agreement, or which otherwise delays or hinders Galena’s ability to Commercialize the Product; or

 

11.2.6      this Agreement may be terminated by Galena for any reason upon one hundred eighty (180) days written notice any time following January 1, 2016, provided that Galena has paid or does pay MSRx all sums then due and payable and all Pediatric Research Equity Act costs then committed and assignable to Galena prior to the actual termination date.

 

11.3.          No Waiver. The right of Galena or MSRx to terminate this Agreement, as herein above provided, shall not be affected in any way by Galena’s or MSRx’s respective waiver or failure to take action with respect to any prior default or breach.

 

11.4.          Effects of Termination.

 

11.4.1      Effect of Termination Generally. On the expiration or earlier termination of this Agreement for any reason, except as otherwise expressly provided herein, all rights and obligations of each Party hereunder shall cease.

 

11.4.2      Disposition and Transfer of Inventory upon Termination; Royalties Due Thereon Not Affected By Termination. On the expiration or earlier termination of this Agreement by MSRx due to Galena’s material breach of this Agreement: (a) all unpaid royalties for Product sold as of the effective date of termination shall remain due and payable as scheduled; (b) at MSRx’s option, MSRx shall complete all work-in-process and Galena shall purchase at the Product Supply Price under this Agreement, all remaining inventory of the Product and, at cost, all Raw Materials relating thereto in MSRx’s possession or control, and MSRx shall use all Commercially Reasonable Efforts to mitigate the cost thereof to Galena and to consult with Galena in connection with such attempts to mitigate; (c) Galena shall have the right to sell out such remaining inventory of Product for a period of up to eighteen (18) months; and (d) Galena shall pay to MSRx a royalty, in the same amount and calculated in accordance with the terms set forth in Section 7.3 and subject to all of the provisions of Sections 7.4 through and including 7.10, on each sale of remaining inventory of Product by Galena and/or its Affiliates when and as such Product is sold.

 

11.4.3      Effect of Certain Instances of Termination. In the event this Agreement is terminated by MSRx pursuant to Sections 11.2.2 through and including 11.2.4, Galena hereby assigns all of its rights, title and interests in and to the NDA for the Product as filed with the FDA (or the data and information that would otherwise be in the NDA for the Product if such NDA has not been filed, to the extent such data and information is in Galena’s possession and control) to MSRx and Galena agrees to cooperate with MSRx and to execute and deliver any and all documents reasonably necessary to perfect its rights to the NDA for the Product. In the event this Agreement is terminated by Galena in accordance with Section 11.2.5 on or prior to ninety (90) days after the Effective Date, the full amount of the payment made by Galena in respect of the First Milestone shall be returned to Galena within ten (10) Business Days of the effective date of such termination, provided, however, that to the extent such payment was made by Galena through the issuance of shares of Galena Common Stock in accordance with Section 7.2, MSRx shall either return such shares to Galena for cancellation or, at MSRx’s sole option, return an amount in cash equal to the value of such shares as determined in accordance with Section 7.2.

 

 

 

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11.4.4      Accrued Rights. Termination, relinquishment or expiration of this Agreement for any reason shall be without prejudice to any right which shall have accrued to the benefit of either Party prior to such termination, relinquishment or expiration including damages arising from any breach under this Agreement. Termination, relinquishment or expiration of this Agreement shall not relieve either Party from any obligation which is expressly or by implication intended to survive such termination, relinquishment or expiration of this Agreement and shall not affect or prejudice any provision of this Agreement which is expressly or by implication provided to come into effect on, or continue in effect after, such termination, relinquishment or expiration. Remedies for breaches under this Agreement shall also survive any termination, relinquishment or expiration of this Agreement.

 

11.4.5      Survival. The following Sections of this Agreement, as well as any other provisions in this Agreement which specifically state they will survive termination or expiration of this Agreement, shall survive termination of this Agreement for any reason: Section 1, Section 2.1 through Section 2.5 inclusive (provided that the license granted in Section 2.1 shall be non-exclusive and all such sections shall survive for the sole purpose of selling out remaining inventory of Product as set forth in Section 11.4.2(c)), Section 2.6, Section 6.5 with respect to any unpaid reimbursements in respect of a Supply Interruption), Section 7.1 with respect to unpaid Milestone payments, Section 7.3 with respect to unpaid royalty payments and royalty payments due under Section 11.4.2 or 11.4.3 above, Sections 7.4 through and including Section 7.10 with respect to royalty payments due after such termination or expiration, Section 8.4, Section 9, Section 10, Section 11.3, this Section 11.4, Section 12.3, Section 13.2 and 13.3 with respect to pending claims thereunder, and Section 14.

 

11.4.6      Return of Confidential Information. Within thirty (30) days of any expiration or termination of this Agreement: (a) Galena shall cease to use and shall deliver to MSRx, upon written request, all Confidential Information of MSRx, except for any documents or records that Galena is required to retain by Applicable Law; and (b) MSRx shall cease to use and shall deliver to Galena, upon written request, all Confidential Information of Galena except for any documents or records that MSRx is required to retain by Applicable Law.

 

SECTION 12. REGULATORY MATTERS

 

12.1.          Regulatory Activities in the Territory. MSRx and Galena shall use Commercially Reasonable Efforts, in good faith, to conduct such research and development activities, including clinical trials, necessary to maintain Regulatory Approval for the Product in the Territory and shall cooperate to take all such reasonable actions as shall be necessary or appropriate to prepare and file all documentation with the Regulatory Authorities for the maintenance of Regulatory Approval of the Product in the Territory and to furnish such information to the Regulatory Authorities in connection therewith.

 

12.2.          Communications and Meetings with Governmental Authorities.Communications with Governmental Authorities. Subject to the provisions of this Section 12. Galena shall be solely responsible for interfacing, corresponding and meeting with all Regulatory Authorities for the NDA. At all times during the Term, Galena shall be responsible, at its expense, for reporting any and all Serious Adverse Drug Events and Adverse Drug Experiences to applicable Regulatory Authorities. Immediately upon receipt of any contact with or communication from any Regulatory Authority relating to the Product or becoming aware of any Serious Adverse Drug Event or Adverse Drug Experience in the Territory, each of the Parties shall forward a copy or description of the same to the other Party and shall use Commercially Reasonable Efforts to respond to all reasonable inquiries from the other Party relating thereto. Both Parties shall use Commercially Reasonable Efforts to cooperate to provide all reasonable assistance and take all actions which are necessary to comply with any Applicable Law.

 

 

 

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12.2.2      MSRx’s Participation in Meetings with Regulatory Authorities. MSRx, to the extent not prohibited by the Regulatory Authority, shall be allowed to attend all meetings between representatives of Galena and/or its agents and Regulatory Authorities relating to the Product. Galena shall provide MSRx as soon as reasonably possible (but in any event at least five (5) Business Days before any such meeting) with copies of all documents, correspondence and other materials in its possession which are relevant to the matters to be addressed at any such meeting. Galena shall also provide MSRx with prompt access to all exchanges of correspondence with a Governmental Authority with respect to the Product.

 

12.2.3       Notification by Galena of any Regulatory Actions. Galena shall as soon as reasonably possible (but in any event at least three (3) Business Days), after receipt of any inspections, proposed regulatory actions, investigations or requests by any Regulatory Authority with respect to the Supply of Product in the Territory, as well as any corrective or other actions with Regulatory Authorities initiated by Galena with respect thereto, notify MSRx in reasonable detail with respect thereto and will provide MSRx with copies of all related documentation. MSRx shall have the right to attend all material preparation, internal caucus, and debriefing sessions related to meetings or discussions, whether in person, by teleconference or otherwise, between Galena or its agents with respect to the Supply of Product in the Territory, and Galena shall provide MSRx with reasonable prior written notice of any such sessions and copies of meeting minutes with respect thereto.

 

12.2.4      Approval of Labeling and Promotional Materials. Subject to the provisions of this Agreement, Galena shall timely submit to the applicable Regulatory Authorities and obtain any necessary Regulatory Authority approvals of any promotional materials, label, labeling, package inserts or outserts, monographs and packaging.

 

12.3.          Regulatory Information.

 

12.3.1      Assistance. Subject to the terms of this Section 12. in the Territory, each Party agrees to use Commercially Reasonable Efforts to provide the other with all reasonable assistance and take all actions reasonably requested by the other Party that are necessary or desirable to enable the other Party to comply with any Applicable Law.

12.3.2      Notice. Each Party or its respective representative shall provide the other Party with notice, as soon as reasonably practicable to enable the other Party to comply in all material respects with Applicable Law, of notification or other information which it receives (directly or indirectly) from, any Regulatory Authority (and providing, as soon as reasonably possible, copies of any associated written requests) that: (a) raises any material concerns regarding the safety or efficacy of the Product; (b) indicates or suggests a Third Party Claim arising in connection with the Product; or (c) is reasonably likely to lead to a recall, market withdrawal or field correction of, field alert report or comparable report with respect to the Product. Information that shall be disclosed pursuant to this Section 12.3.2 shall include, but not be limited to:

 

(i)              inspections by a Regulatory Authority of manufacturing, distribution or other related facilities concerning the Product;

 

 

 

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(ii)             inquiries by a Regulatory Authority concerning clinical investigation activities (including, without limitation, inquiries regarding investigators, clinical monitoring organizations and other related Parties) with respect to the Product;

 

(iii)            any communication from a Regulatory Authority involving the manufacture, sale, promotion or distribution of the Product, or any other Regulatory Authority reviews or inquiries relating to any event set forth in this Section 12.3.2(c);

 

(iv)            any receipt of a FDA Warning Letter relating to the

 

Product;

 

(v)             any initiation of any Regulatory Authority investigation, detention, seizure or injunction concerning the Product; and

 

(vi)            any other regulatory action (e.g., proposed labeling or other registrational dossier changes and recalls) which would affect the Product.

 

12.4.           Recalls or Other Corrective Action.

 

12.4.1      Notice of Action. As soon as reasonably possible, Galena shall notify MSRx of any actions to be taken by Galena or its Affiliates, subcontractors or agents with respect to any recall or market withdrawal or field correction of, field alert report or comparable report or any matter which is suspected or likely to be the subject of a complaint which may require a recall, market correction or similar action relating to the Product in the Territory (a “Recall”) prior to (but in any event at least ten (10) Business Days prior to) any such action so as to permit MSRx a reasonable opportunity to consult with Galena with respect thereto. Galena agrees to consider MSRx’s consultation in good faith; provided, however, nothing in this Section 12.4 is intended to limit Galena’s ability to recall, withdraw or take any other corrective action relating to the Product. At Galena’s reasonably written request and cost (except as set forth in this Section 12.4), MSRx shall provide reasonable assistance to Galena in conducting such Recall. The cost of any Recall, including, the costs of notifying customers and the costs associated with the shipment of the Product from customers and all reasonable credits extended to customers as a result thereof, and the costs of replacing the Product (“Recall Expenses”), occasioned or required as part of a general Recall of the products of a Party, shall be borne as provided in the following sentences. Any Recall Expenses caused by MSRx or the failure of MSRx to Supply the Product conforming to the Specifications or applicable Regulatory Approvals or other breach of this Agreement by MSRx shall be borne by MSRx, except to the extent such Recall Expenses are caused in whole or in part by Galena of any of its Affiliates or licensees, or subcontractors. Any Recall Expenses caused by Galena or the failure of Galena to Commercialize the Product conforming to the applicable Regulatory Approvals or other breach of this Agreement by Galena shall be borne by Galena, except to the extent caused in whole or in part by MSRx or any of its Affiliates. In the event that either Party disputes that it is the cause of a Recall, the Parties agree to attempt to resolve such dispute within ten (10) days after receipt of a notice of objection regarding such recall (the “Recall Objection Notice”). If Galena and MSRx fail within ten (10) days after delivery of the Recall Objection Notice to agree as to the Party that is the cause of such Recall, the issue, and as applicable, any representative samples of the Product, shall be submitted to a mutually acceptable independent laboratory or consultant (if not a laboratory analysis issue) for analysis or review. The results of such evaluation shall be binding upon the Parties. The Party that is determined to have been incorrect in its determination of the Party that is the cause of such Recall shall pay [***] percent ([***]%) of the Recall Expenses including the cost of any such evaluation. If the fees of the independent laboratory or consultant are due in advance, Galena and MSRx shall each pay [***] percent ([***]%) of such fees; provided, however, that promptly after the independent laboratory or consultant completes its evaluation, the Party that was incorrect in its determination shall reimburse the other Party for its [***] percent ([***]%) share of such fees.

 

  

  

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12.4.2     Recall Information Received. Each Party shall, as soon as reasonably practicable, notify the other Party of any recall, market withdrawal or field correction of, field alert report or comparable report or complaint with respect to the Product and supply all information received by it relating thereto in sufficient detail to allow the Parties to comply with Applicable Law.

 

12.5.          Events Affecting Integrity or Reputation. During the Term, the Parties shall notify each other immediately of any circumstances of which they are aware and which could materially impair the integrity and reputation of the Product or if a Party is threatened by the unlawful activity of any Third Party in relation to the Product, which circumstances shall include, by way of illustration, deliberate tampering with or contamination of the Product by any Third Party as a means of extorting payment from the Parties or another Third Party. In any such circumstances, the Parties shall use Commercially Reasonable Efforts to limit any damage to the Parties and/or to the Product.

 

SECTION 13. INTELLECTUAL PROPERTY

 

13.1.           Patent Prosecution and Maintenance.

 

13.1.1      MSRx IP. MSRx shall be responsible for the preparation, filing, prosecution and maintenance of the MSRx IP, including the MSRx Patents and the Zuplenz Trademark. Additionally, MSRx shall use Commercially Reasonable Efforts to list the MSRx Patents in the Orange Book. The cost of such preparation, filing, prosecution and maintenance of the MSRx IP shall be borne by MSRx. MSRx shall consider in good faith the requests and suggestions of Galena with respect to strategies for prosecution and maintenance of MSRx IP in the Territory and, as applicable, revisions to correspondence with the U.S. Patent and Trademark Office.

 

13.1.2      Cooperation of the Parties. Each Party agrees to cooperate fully in the preparation, filing, prosecution and maintenance of any registered MSRx IP under this Agreement and in the obtaining and maintenance of any extensions, supplementary protection certificates and the like with respect to any registered MSRx IP.

 

13.2.           Infringement by Third Parties. The Parties shall promptly notify the other in writing of any alleged or threatened infringement of any MSRx Patent of which they become aware. In the event a Party brings or desires to bring an infringement action in accordance with this Section 13.2, the other Party shall use its best efforts to cooperate fully, including, if required to bring such action, the furnishing of a power of attorney to bring suit in the other Party’s name and/or being named as a party in such suit and as necessary, becoming a client of the other Party’s legal counsel and agreeing that such legal counsel will act solely under the instruction of the other Party and will sign a waiver with such legal counsel to that effect and the Party bringing the action shall keep the other Party and/or their designated legal counsel reasonably informed as to the progress of such action. Except as expressly set forth in this Agreement, any recovery related to the Product which is realized by either Party as a result of such litigation, after reimbursement of any litigation expenses of MSRx and Galena, shall be shared equally by the Parties.

 

  

  

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13.3.           Infringement of Third Party Rights. Each Party shall promptly notify the other in writing of any allegation by a Third Party that the activity of either of the Parties or their Affiliates or subcontractor or sublicense in connection with the Development, Supply or Commercialization of the Product infringes the issued patent rights (or would infringe the claims, if issued, of a pending patent application) of any Third Party in the Territory (“Patent Claims”). In the event of a litigation in accordance with this Section 13.3, the Party not controlling such litigation shall use its best efforts to cooperate fully, including, if required for the purposes of any cross claim or counterclaim, the furnishing of a power of attorney to bring suit in the other Party’s name and/or being named as a party in such suit and as necessary, becoming a client of the other Party’s legal counsel and agreeing that such legal counsel will act solely under the instruction of the other Party and will sign a waiver with such legal counsel to that effect and the Party bringing the action shall keep the other Party and/or their designated legal counsel reasonably informed as to the progress of such action. Neither Party shall enter into any settlement of any litigation, without the prior written consent of the other, such consent not to be unreasonably withheld, delayed or conditioned.

 

SECTION 14. MISCELLANEOUS

 

14.1.           Independent Contractor. Neither MSRx nor Galena, together in each case with their respective employees or representatives, are under any circumstances to be considered as employees, partners, joint venturers, agents or representatives of the other by virtue of this Agreement, and neither shall have the authority or power to bind the other or contract in the other’s name.

 

14.2.           Registration and Filing of this Agreement. To the extent, if any, that either Party concludes in good faith that it or the other Party is required to file or register this Agreement or a notification thereof with any Regulatory Authority including, without limitation, the U.S. Securities and Exchange Commission or the U.S. Federal Trade Commission, in accordance with Applicable Law, such Party shall inform the other Party thereof. Should both Parties jointly agree in writing that either of them is required to submit or obtain any such filing, registration or notification, they shall cooperate, each at its own expense, in such filing, registration or notification and shall execute all documents reasonably required in connection therewith. In such filing, registration or notification, the Parties shall request confidential treatment of sensitive provisions of this Agreement, to the extent permitted by Applicable Law. The Parties shall promptly inform each other as to the activities or inquiries of any such Regulatory Authority relating to this Agreement, and shall reasonably cooperate to respond to any request for further information therefrom on a timely basis.

 

14.3.           Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed given when so delivered in person, by overnight courier, by facsimile transmission (with receipt confirmed by automatic transmission report) or two (2) Business Days after being sent by registered or certified mail (postage prepaid, return receipt requested), as follows:

 

If to Galena:

Galena Biopharma, Inc.

4640 SW Macadam Avenue Suite 270

Portland, OR 97239

Attention: Chief Executive Officer

Facsimile No.: 503.400.6611

 

  

  

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With a copy to:

 

	 	
If to MSRx:    

	
MonoSol Rx, LLC

30 Technology Drive

Warren, New Jersey 07059

Attention: Vice President, Business Development

Facsimile No.: 908.561.1209

With a copy to:

 

Day Pitney LLP 

One Jefferson Road 

Parsippany, New Jersey 07054 

Attention: Lori J. Braender, Esq.

Facsimile No.: 973.966.1015

 

 

Either Party may by notice given in accordance with this Section 14.3 to the other Party designate another address or person for receipt of notices hereunder.

 

14.4.           Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns (other than pursuant to the foregoing Section 14.4(b)). Neither MSRx nor Galena may assign any of its rights or delegate any of its liabilities or obligations hereunder without the prior written consent of the other Party, except that without the prior consent of the other Party: (a) either Party may assign this Agreement to any purchaser of all or a substantial part of its assets or business related to the Product; and (b) either Party may assign this Agreement and/or its rights and obligations under this Agreement, in whole or in part, to any of its Affiliates and may assign any of its rights to payments of royalties or any other amounts due under this Agreement to any of its Affiliates or any Third Party. Any purported assignment or transfer in violation of this Section will be void ab initio and of no force or effect.

 

14.5.           No Implied Waivers; Rights Cumulative. No failure on the part of MSRx or Galena to exercise and no delay in exercising any right, power, remedy or privilege under this Agreement, or provided by statute or at law or in equity or otherwise, including the right or power to terminate this Agreement, shall impair, prejudice or constitute a waiver of any such right, power, remedy or privilege or be construed as a waiver of any breach of this Agreement or as an acquiescence therein, nor shall any single or partial exercise of any such right, power, remedy or privilege preclude any other or further exercise thereof or the exercise of any other right, power, remedy or privilege.

 

14.6.           Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable. The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable provision.

 

 

 

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14.7.           Force Majeure. Neither Party shall be liable for delay in delivery or nonperformance (except for any obligation for the payment of money), in whole or in part, nor shall the other Party have the right to terminate this Agreement except as otherwise specifically provided in this Section 14.7, to the extent that such delay in delivery or nonperformance is caused by any event reasonably beyond the control of such Party and without the fault or negligence of the such Party, including fires, floods, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), terrorism, insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any Regulatory Authority (a “Force Majeure”); provided, however, that the Party affected by such a condition shall, within ten (10) days of its occurrence, give written notice to the other Party stating the nature of the condition, its anticipated duration and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is reasonably required and the nonperforming Party shall use its Commercially Reasonable Efforts to remedy its inability to perform; provided, however, that in the event the suspension of performance continues for a period of one hundred eighty (180) consecutive calendar days after the date of the occurrence, and such failure to perform would constitute a material breach of this Agreement in the absence of such force majeure event, the nonaffected Party may terminate this Agreement immediately by written notice to the other Party.

 

14.8.           Amendment. This Agreement may not be amended except by an instrument signed by each of the Parties hereto.

 

14.9.           Rules of Construction. The Parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or ruling of construction providing that ambiguities in an agreement or other document shall be construed against the Party drafting such agreement or document.

 

14.10.           Publication. The Parties acknowledge that each of Galena and MSRx intends to issue press releases and other public statement disclosing the existence of or relating to this Agreement, and each agrees to provide the other Party a copy of such release and statement and to obtain the express written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that neither Party shall be prevented from complying with any duty of disclosure it may have pursuant to Applicable Law, including securities laws applicable to a public company.

 

14.11.           Expenses. Except as expressly set forth herein, each Party shall bear all fees and expenses incurred by such Party in connection with, relating to or arising out of the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including attorneys’, accountants’ and other professional fees and expenses.

 

 

 

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

14.12.            Governing Law; Submission to Jurisdiction; Waiver. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without regarding to its conflict of laws principles. In the event any action shall be brought to enforce or interpret the terms of this Agreement, the Parties agree that such action will be brought in the State or Federal courts located in Delaware. Each of MSRx and Galena hereby irrevocably submits with regard to any action or proceeding for itself and in respect to its property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of MSRx and Galena hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement: (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process; (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise); and (c) to the fullest extent permitted by Applicable Law, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper, and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

14.13.           Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, written or oral, between the Parties.

 

14.14.           Third Party Beneficiaries. None of the provisions of this Agreement, express or implied, is intended to be or shall be for the benefit of or enforceable by any Person (including, without limitation, any creditor of either Party hereto) other than Galena and MSRx and their respective successors and permitted assigns. No such Person shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against either Party hereto.

 

14.15.           Rights in Bankruptcy. The Parties acknowledge that all rights and licenses granted under or pursuant to any Section of this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code and other similar foreign laws (collectively, the “Bankruptcy Code”), licenses of rights to be “intellectual property” as defined under the Bankruptcy Code or such foreign laws. If a case is commenced during the Term by or against MSRx or its Affiliates under a Bankruptcy Code then, unless and until this Agreement is rejected as provided in such Bankruptcy Code, MSRx (in any capacity, including debtor-in-possession) and its successors and assigns (including, without limitation, a trustee) shall perform all of the obligations provided in this Agreement to be performed by such Party. If a Bankruptcy Code case is commenced during the Term by or against MSRx, this Agreement is rejected as provided in the Bankruptcy Code and Galena elects to retain its rights hereunder as provided in the Bankruptcy Code, then MSRx, subject to the Bankruptcy Code case (in any capacity, including debtor-in-possession) and its successors and assigns (including, without limitation, a Title 11 trustee), shall provide to Galena copies of all information necessary for Galena to prosecute, maintain and enjoy its license under the MSRx IP under the terms of this Agreement held by MSRx and such successors and assigns promptly upon Galena’s written request therefor. All rights, powers and remedies of Galena, as a licensee hereunder, provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including, without limitation, the Bankruptcy Code) in the event of the commencement of a Bankruptcy Code case by or against MSRx.

 

14.16.           Counterparts; Signatures. This Agreement may be executed in multiple counterparts, all of which, when executed, shall be deemed to be an original and all of which together shall constitute one and the same document. Signatures provided by facsimile or e-mail transmission shall be deemed to be original signatures.

 

  

  

CONFIDENTIAL MATERIAL OMITTED AND FILED

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

[Signature Page Follows]

 

 

 

 

 

  

  

CONFIDENTIAL MATERIAL OMITTED AND FILED

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ASTERISKS ([***]) DENOTE SUCH OMISSIONS.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THIS OMITTED INFORMATION.

 

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

 

 

 

GALENA BIOPHARMA, INC.

 

 

 

By: /s/ Mark J. Ahn, Ph. D.

Name: Mark J. Ahn, Ph. D.

Title: President & Chief Executive Officer

 

 

 

MONOSOL RX, LLC

 

 

 

By: /s/ Keith Kendall

Name: Keith Kendall

Title: Co-President & Chief Operating Officer

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