Document:

Exhibit 10.77

 

*** TEXT OMITTED AND SUBMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST

 

LICENSE AGREEMENT

 

This License Agreement is entered into as of the Effective Date by and between Insmed Incorporated, a Virginia corporation with its principal office located at 4851 Lake Brook Dr., Glen Allen, VA 23060 (“Insmed”) and Napo Pharmaceuticals, Inc., a Delaware corporation, with its principal office located at 1170 Veterans Blvd., Suite 244, South San Francisco, California 94080 USA (“Napo”).  Hereinafter, Napo and Insmed shall be referred to jointly as the “Parties”.

 

RECITALS

 

A.                                    WHEREAS, Insmed owns the Regulatory Package and the Existing Patents;

 

B.                                    WHEREAS, Napo wishes to license rights to use the Regulatory Package and the Existing Patents in Napo’s drug development program for indications relating to diabetes, cardiac disease, hypertension, vascular disease, metabolic disease, Syndrome X and other clinical syndromes related to insulin resistance; and

 

C.                                    WHEREAS, Insmed wishes to reserve to itself exclusive rights to develop, commercialize and market Masoprocal in the Insmed Exclusive Field of Use, but is willing to allow Napo exclusivity in the Napo Exclusive Field of Use.

 

Now, therefore, for the consideration set forth below, the adequacy and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.                                      DEFINITIONS

 

As used in this Agreement, the following words will have these meanings ascribed to them:

 

1.1                               “Affiliate” means and includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, a party, where control means the ownership or control, directly or indirectly, of more than fifty percent of all of the voting power of the shares (or other securities or rights) entitled to vote for the election of directors, managers or other governing authority, as of the Effective Date.

 

1.2                               “Agreement” means this License Agreement, together with all exhibits, schedules, tables, attachments and addenda hereto.

 

1.3                               “Cause” means: if either party breaches a material provision of the Agreement or fails to substantially perform any obligation hereunder and fails to cure within thirty (30) business days after receipt of written notice, setting forth the facts underlying the claim of breach.

 

1.4                               “Effective Date” means the date upon which this Agreement has been fully executed.  If the two Parties execute on different dates, then the Effective Date is the latter of the two dates.

 

 

1.5                               “Endocrine IND” means that certain investigational new drug application No. 54,226, filed with the Division of Metabolic and Endocrine Products of the FDA on September 30,1997, that is a component of the Regulatory Package, as amended pursuant to Section 2.4(b) below.

 

1.6                               “Existing Patents” means (i) that certain use patent for Masoprocal pertaining to the Type 2 diabetes indication (U.S. Patent No. 5,827,898, issued October 27, 1998 by the PTO, entitled “Use of Bisphenolic Compounds to Treat Type II Diabetes”), assigned to Insmed when Insmed assumed rights to Masoprocal and the Regulatory Package and (ii) all related foreign patents and patent applications, if any exist at the Effective Date.

 

1.7                               “FDA” means the United States Federal Drug Administration or any corresponding and comparable regulatory agency outside the United States.

 

1.8                               “Future Products” means any Masoprocal product or Masoprocal product formulation developed, manufactured and commercialized by or for Napo or Insmed, as the case may be, except (i) that Future Products developed, manufactured or commercialized by Napo shall not include any products for indications in Insmed’s Exclusive Field of Use, (ii) that Future Products developed, manufactured or commercialized by Insmed shall not include any products for indications in Napo’s Exclusive Field of Use and (iii) that Future Products shall not include any Masoprocal analogs or other synthesized compounds with a similar chemical structure, other than pharmaceutically acceptable salts of Masoprocal.

 

1.9                               “IND” means an investigational new drug application.

 

1.10                        “Insmed” means Insmed Incorporated, as set forth in the preamble of the Agreement, and/or any of its Affiliates.

 

1.11                        “Insmed Exclusive Field of Use” means all indications relating in any way to oncology.

 

1.12                        “Insmed Product(s)” means any and all Future Products of Insmed.

 

1.13                        “License” has the meaning ascribed to it in Section 2.1 below.

 

1.14                        “Losses” means any claim, liability, demand, action, cause of action, judgment, settlement amount, attorneys’ fees, damages, fines, penalties and the costs, fees and expenses associated with any of the foregoing, in connection with or arising out of a party’s (i) activities related to the development, marketing and commercialization of Masoprocal and/or (ii) performance or failure to perform under this Agreement.

 

1.15                        “Marks” means and includes all trademarks, trade names, service marks, industrial designs, insignias, logos, domain names and designations of Napo or Insmed, as the context in this Agreement indicates.

 

1.16                        “Masoprocal” means the antidiabetic, antihypertriglyceridemic, antihypertensive SP-134101 compound, known as masoprocal.

 

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1.17                        “Napo” means Napo Pharmaceuticals, Inc., as set forth in the preamble of the Agreement, and/or any of its Affiliates.

 

1.18                        “Napo Exclusive Field of Use” means all indications relating in any way to diabetes, cardiac disease, hypertension, vascular disease, metabolic disease, Syndrome X and all other clinical syndromes related to insulin resistance.

 

1.19                        “Napo Product(s)” means any and all Future Products of Napo.

 

1.20                        “Net Sales” means, with respect to a Napo Product, the gross invoiced sales price invoiced by Napo, and/or it’s sublicensees less, any (i) trade and government discounts or rebates actually allowed and taken; (ii) sales, use, value added or other excise taxes, imposed and paid directly with respect to the sale and other governmental charges incurred in connection with the exportation or importation of the Napo Product; (iii) refunds for customer returns, not already credited on an invoice; (iv) customs duties, surcharges, transportation charges, insurance costs and other similar expenses separately invoiced and (v) third party payer rebates and charge-backs actually allowed and taken, including, but not limited to, hospital buying group charge-backs, hospital buying group and/or group purchasing organization administration fees or managed care organization rebates.  The amount of Net Sales for any annual period shall be determined on the basis of sales recorded in such period in accordance with generally accepted accounting principles.

 

1.21                        “Prostate Cancer Study” means the recently completed study pertaining to the effects of Masoprocal on prostate cancer patients conducted under IND No. 68,392, filed with the Division of Oncology Drug Products of the FDA that references IND No. 54,226,

 

1.22                        “PTO” means the United States Patent and Trademark Office or any corresponding and comparable agency outside the United States.

 

1.23                        “Publication” means a scientific, professional or academic publication, monograph, abstract or similar distillation.  For the avoidance of doubt, this shall not include any press release or any announcement required under US or UK securities laws.

 

1.24                        “Publishing Party” has the meaning ascribed to it in Section 3.4(d) below.

 

1.25                        “Regulatory Package” means all of Insmed’s intellectual property relating to Masoprocal, including without limitation, all of the masoprocal-related pre-clinical and clinical research dossier associated with the Endocrine IND and modifications, variations, amendments and any regulatory documents filed with the FDA or any other regulatory agency associated with the Endocrine IND, as set forth on Exhibit A attached.

 

1.26                        “Relevant Legislation” has the meaning ascribed to it in Section 3.4(b) below.

 

1.27                        “Representative(s)” means, as to either party, such party’s Affiliates and its and their directors, officers, shareholders, employees, agents, advisors, consultants (including, without limitation, legal counsel and accountants) and controlling persons (where the term “person” is broadly interpreted to include, without limitation, any corporation, partnership or other entity or any individual).

 

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1.28                        “Reviewing Party” has the meaning ascribed to it in Section 3.4(d) below.

 

1.29                        “SEC” means the United States Securities and Exchange Commission.

 

1.30                        “Term Sheet” means that certain binding term sheet dated January 3, 2007 setting forth the understanding of both Parties regarding the License.

 

1.31                        “UKLA” means the United Kingdom Listing Authority.

 

2.                                      LICENSE TO NAPO

 

2.1                               Description of License.  Subject to Insmed’s Exclusive Field of Use as described in Section 2.2 below, Insmed hereby grants to Napo immediately upon the Effective Date a perpetual, irrevocable, world-wide license to use the Existing Patents and the Regulatory Package (the “License”), in exchange for the consideration set forth in Section 2.4.  The License shall be an exclusive license (even as to Insmed) in the Napo Exclusive Field of Use, and Napo shall have the right to sublicense and/or transfer its rights under the License to one or more party or parties provided such party(ies) shall be required to meet Napo’s obligations as defined by the terms of this Agreement.

 

2.2                               Exclusive Fields of Use.  Insmed reserves to itself all rights relating to the development, manufacturing and commercialization of Masoprocal in the Insmed Exclusive Field of Use.  Napo shall not, without Insmed’s express written consent, clinically develop, commercialize or promote Masoprocal for any cancer indication.  Napo shall have all rights relating to the development, manufacturing and commercialization of Masoprocal in the Napo Exclusive Field of Use.  Insmed will not, without Napo’s express written consent, clinically develop, commercialize or promote Masoprocal for diabetes, cardiac disease, hypertension, vascular disease, metabolic disease, Syndrome X or any other clinical syndrome related to insulin resistance.

 

2.3                               Delivery of Existing Patents and Regulatory Package.  On or prior to March 9, 2007, Insmed shall have delivered to Napo, at Napo’s expense, a copy of all files relating to the Regulatory Package and the Existing Patents.

 

2.4                               Consideration.  In consideration of this License, Napo has already remitted to Insmed or will remit to Insmed the following:

 

(a)                                 Payment Upon Execution of the Term Sheet.  Promptly after execution by both Parties of the Term Sheet, Napo remitted to Insmed by wire transfer of immediately available funds, [***]dollars ($[***]).

 

(b)                                 Payment Upon Delivery of Data.  After Insmed has (i) amended the Endocrine IND to include, and incorporate, the safety data from the Prostate Cancer Study and (ii) delivered such Endocrine IND Amendment to Napo, such delivery to be no later than March 9, 2007, and all other components of the Regulatory Package, Napo will remit to Insmed another [***]dollars ($[***]) by wire transfer in immediately available funds.

 

*** Confidential Treatment Requested

 

 

(c)                                  Payments After Execution of This Agreement.  After this Agreement has been fully-executed, such execution to be no later than February 28, 2007, Napo will then remit to Insmed additional consideration for the License in accordance with the following milestones:

 

	
Milestone Event
    	
 
    	
Payment to Insmed
    	
 
    
	
Proof of Concept *
    	
 
    	
$
    	
[***
    	
]
    
	
Successful Filing   of  NDA(or foreign equivalent) for   Masoprocal
    	
 
    	
$
    	
[***
    	
]
    
	
Approval of NDA (or   foreign equivalent) for Masoprocal
    	
 
    	
$
    	
[***
    	
]
    

 

* Proof of Concept refers to the first Phase 2 clinical study to establish the efficacy of a Napo Product for metabolic disease or diabetes, assuming that Napo deems such study to be successful.  In the event Napo (or a strategic partner collaborating with Napo) must conduct a second Phase 2 clinical study to establish such efficacy, then this proof of concept milestone payment will be due upon conclusion of a successful clinical study; provided, however, that if Napo is required to initiate a third Phase 2 clinical study, then, upon initiation of the third study, Napo shall remit this Proof of Concept milestone payment.

 

(d)                                 Payment Upon Sales of Napo Products.  At such time as Napo is selling a Napo Product, Napo will pay to Insmed, on a quarterly basis, annual royalties of [***]percent ([***]%) on all Net Sales of Napo Products in the United States and [***]percent ([***]%) on all Net Sales of Napo Products approved for sale in Western Europe and Japan, for a period of time which is the longer of (a) the maximum length of time that Masoprocol is protected by a licensed patent or (b) five (5) years from the date upon which Napo receives FDA approval of the new drug application or foreign equivalent for any Future Product.  However, Napo may, at any time prior to the completion of Phase 3 clinical studies, opt out of this royalty payment obligation to Insmed by paying Insmed a single lump-sum [***]dollars ($[***]) payment.

 

(e)                                  Fully-Paid License Into Perpetuity.  When Napo has paid to Insmed the consideration set forth in this Section 2.4, both the License and the right of reference set forth in Section 3.3 will be a fully-paid, irrevocable license into perpetuity.  The perpetual nature of the License and the right of reference will in no way be affected by Napo’s election in Section 2.4(d) to pay the single lump-sum of [***]dollars ($[***]), in lieu of paying the scheduled royalties on Net Sales.

 

2.5                               Use of Marks.  Except as otherwise set forth in this Agreement with respect to rights of reference and cross-reference, neither party will use the other party’s Marks, without the prior written consent of a duly authorized signatory of the other party, which consent shall not be unreasonably withheld, conditioned or delayed.  No license, either express or implied, is granted by either party to use the Marks of the other for any purpose except as specifically stated in the Agreement.  When permitted, the use by either party of the Marks of the other party, must clearly

 

*** Confidential Treatment Requested

 

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indicate that the Marks are the trademarks or service marks of the applicable party.  Each party agrees to use the Marks of the other exactly in the form provided, and will not create any derivative or combination Marks with the other party’s Marks.  Each party’s use of the Marks of the other shall be in accordance with applicable trademark law and each party shall not do or cause to be done, or permit another to do, any act that would in any way impair, reduce, or contest the owner’s right, title, and interest in the Marks.  Each party’s use of the Marks will not create any right, title, or interest in or to the use of the Marks, and all such uses and goodwill associated with the Marks will inure solely to the benefit of owner thereof.

 

2.6                               Regulatory Compliance.  For so long as Insmed owns the Endocrine IND, Insmed covenants to maintain regulatory compliance in accordance with good clinical practices, good manufacturing practices and good laboratory practices (GCP, GMP and GLP) to preserve the integrity of the Endocrine IND.  To this end, Insmed agrees to, among other things, make all required regulatory filings properly and in a timely fashion.  In the event that Insmed were to sell, assign, license or transfer to a third party the Endocrine IND, Insmed shall include in the transaction documentation for such transaction an affirmative covenant on the part of the third party to whom or to which Insmed is selling, assigning, licensing or otherwise transferring.  The covenant on the part of the third party will be in partial consideration for the sale, assignment, license of other transfer to the third party.  The covenant will be a post-closing condition and will constitute an ongoing obligation on the part of the third party to recognize this Agreement, to assume Insmed’s obligations under all applicable regulatory schemes and to assume Insmed’s obligations under the terms herein.  Napo shall be specifically named as a third party beneficiary for purposes of that affirmative covenant; and, Napo agrees that, as a third party beneficiary, in the event of a subsequent breach by such third party, Napo will look solely to that third party for remedy or redress.  So long as the obligations are clearly articulated in the affirmative covenant, Napo will not look to Insmed to ensure any conduct or for any remedy or redress.

 

3.                                      OWNERSHIP OF INTELLECTUAL PROPERTY AND CONFIDENTIALITY

 

3.1                               Ownership of Intellectual Property.

 

(a)                                 Regarding ownership of the Regulatory Package and the Existing Patents, both Parties covenant:

 

(i)                                     that, all right, title and interest in the Regulatory Package and the Existing Patents resides and will remain with Insmed, subject only to the License and Napo’s right of reference, as described in Section 3.3.

 

(ii)                                  that, prior to the Effective Date, Insmed maintained both the Existing Patents (including payment of any maintenance fees on the Existing Patents) and the Endocrine IND, and updated the reports on the Endocrine IND.

 

(iii)                               that, after the Effective Date, Napo will maintain both the Existing Patents (including payment of any maintenance fees on the

 

 

Existing Patents) and the Endocrine IND, and will update reports on the Endocrine IND.

 

(iv)                              that, all right, title and interest relating to the development, manufacturing and commercialization of Masoprocal in Napo’s Exclusive Field of Use, any Napo Products and any patents on Napo Products will reside with Napo.

 

(v)                                 that, all right, title and interest relating to the development, manufacturing and commercialization of Masoprocal in Insmed’s Exclusive Field of Use, any Insmed Products and any patents on Insmed Products will reside with Insmed.

 

(vi)                              that, unless later negotiated and otherwise agreed, (A) Napo will be responsible for all expenses incurred in the pursuit of its development, manufacturing and commercializing efforts with respect to Masoprocal and (B) Insmed will be responsible for all expenses incurred in the pursuit of its development, manufacturing and commercializing efforts with respect to Masoprocal .

 

(b)                                 Regarding ownership of Future Products and intellectual property in Future Products, both Parties covenant:

 

(i)                                     The ownership of any and all intellectual property generated from the activities conducted by Insmed or on behalf of Insmed on or related to Masoprocal (except in Napo’s Exclusive Field of Use), will reside with Insmed or those strategic partners to whom Insmed elects to transfer such ownership.

 

(ii)                                  The ownership of any and all intellectual property generated from the activities conducted by Napo or on behalf of Napo on or related to Masoprocal (except in Insmed’s Exclusive Field of Use), will reside with Napo or those strategic partners to whom Napo elects to transfer such ownership.

 

(c)                                  So long as Napo has an exclusive license in the Napo Exclusive Field of Use, Napo will be responsible for the maintenance and defense of the Existing Patents, at Napo’s expense.

 

(d)                                 Insmed has the right to file applications and prosecute patents, at its own expense, to secure protection of intellectual property associated with Insmed Product(s).

 

(e)                                  Napo has the right to file applications and prosecute patents, at its own expense, to secure protection of intellectual property associated with Napo Product(s).

 

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3.2                               Protection of Intellectual Property.  Neither party anticipates the exchange of any information that either considers to be proprietary or confidential, other than the contents of the Regulatory Package.  Both Parties acknowledge (i) that the Regulatory Package contains reports, data, summaries, compilations and other information that has not been publicly filed and (ii) that it is in the best interests of both Parties and their respective development activities to treat such contents as proprietary and confidential.  Each party (a) agrees not to disclose any portion of the Regulatory Package to any third person, real or legal, other than as required to develop, manufacture, market and commercialize Masoprocal, (b) will exercise the same degree of care to safeguard the confidentiality of the Regulatory Package as it would exercise in protecting other confidential property it may have, and (c) agrees to take all necessary steps to prevent inadvertent or unauthorized disclosure, publication or dissemination of any contents of the Regulatory Package.  All Representatives of both Napo and Insmed that have access to any contents of the Regulatory Package will be bound by the foregoing restrictions and each party will take such steps as are necessary to ensure that its Representatives are bound by this provision and are aware of their obligations.  The foregoing non-disclosure obligations shall not apply to filings, announcements and disclosures that are required to be made by either party under the Relevant Legislation.

 

3.3                               Right of Reference.  Insmed agrees to provide Napo a right of reference to all applicable components of the Regulatory Package, and to any clinical safety data, developed under the Endocrine IND, as necessary and appropriate to permit the development, marketing and commercialization of Masoprocal by Napo.  It is the intention of both Parties that this right of reference (i) is irrevocable and perpetual, (ii) shall survive any termination of this Agreement or any assignment to a third party by either Napo or Insmed, (iii) shall survive the expiration of any period during which Napo is obliged to pay royalties to Insmed and (iv) shall survive the appointment by either party, or appointment by the court, of a trustee or receiver, subject to applicable law governing insolvency or bankruptcy.

 

3.4                               Ongoing Exchange of Safety Data.  To the extent that the Parties are obliged, under U.S federal regulations codified in 21CFR312.32 and 21CFR312.33 to report certain clinical data for safety purposes, Insmed and Napo each agree that, in addition to making any requisite filing(s), it shall notify directly the other party and provide the other party with all such clinical data regarding adverse events involving Masoprocal, with respect to the Endocrine IND and any future Masoprocal INDs sponsored by Insmed or Napo.  Such notification shall occur within the same timeframe and using the format and content as described in 21CFR312.32.  Such notification(s) shall be by facsimile, and/or overnight courier at such number(s) and/or addresses designated by each party.  Napo and Insmed shall also have an ongoing obligation to summarize for the other party all other adverse drug experiences not described above on an annual basis using the format as described in 21CFR312.33 Annual Reports.

 

3.5                               Press Releases, Filings and Publications.

 

(a)                                 Neither party shall issue a press release or other announcement of the execution of this Agreement (except that Napo was required to make an announcement of the binding Term Sheet prior to the Effective Date) unless and until the form and content of the press release or announcement  

 

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is approved by the other party, which approval shall not be unreasonably withheld, conditioned or delayed.

 

(b)                                 Both Parties acknowledge that each may, at some time, be required to file this Agreement or to make a disclosure regarding this Agreement under the rules of the SEC or the UKLA or other United States or United Kingdom securities laws and regulations (collectively, the “Relevant Legislation”), as the case may be, and the Parties agree that the filing party will seek, whenever possible under the Relevant Legislation (i) confidential treatment for portions of this Agreement containing proprietary information and (ii) redaction or omission of the compound name “Masoprocal” when making such filing or announcement, and that, whenever such confidential treatment is permitted, the filing party will provide the other party with an opportunity to review the confidential treatment request prior to filing this Agreement with the SEC or the UKLA, as the case may be; provided that timely compliance with the Relevant Legislation shall not be thereby affected.

 

(c)                                  Except as permitted by the foregoing provisions or as otherwise required by law, both Parties hereby agree not to disclose any terms or conditions of this Agreement to any third party without the prior consent of the other party; provided, however, that each party shall be entitled to disclose the terms of this Agreement without such consent to its strategic partners, to prospective investors or to other financing sources on the condition that such entities or persons agree to keep such terms confidential for the same time periods as such party is required to keep such terms confidential.

 

(d)                                 With respect to Publications, consistent with Section 3.2 above, both Parties have an interest in maintaining the confidentiality of the Regulatory Package.  Consequently, any party, its employees or consultants wishing to make a Publication (including any oral presentation or disclosure made without obligation of confidentiality) relating to work performed by such party related to Future Products (the “Publishing Party”) shall transmit to the other party (the “Reviewing Party”) a copy of the proposed written publication at least thirty (30) days prior to submission for publication, or an abstract of such oral disclosure at least fifteen (15) days prior to submission of the abstract or the oral disclosure.  The Reviewing Party shall have the right to: (i) request a delay in publication or presentation in order to protect patentable information; (ii) propose modifications to the Publication for patent reasons; or (iii) make reasonable requests that the information be maintained as a trade secret.

 

If the Reviewing Party requests a delay as described in clause (i) above, the Publishing Party shall delay submission or presentation of the publication for a period of sixty (60) days to enable the Reviewing Party to file a patent application protecting its rights in such information to be

 

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filed.  Upon the expiration of thirty (30) days, in the case of proposed written disclosures, or fifteen (15) days, in the case of an abstract of proposed oral disclosures, from transmission of such proposed disclosures to the Reviewing Party, the Publishing Party shall be free to proceed with the written publication or the oral presentation, respectively, unless the Reviewing Party has requested the delay described above.

 

To the extent possible in the reasonable exercise of its discretion, the Publishing Party shall incorporate all modifications proposed under clause (ii) above.  If a trade secret that is the subject of a reasonable request made under clause (iii) above cannot be otherwise protected without unreasonable expense to the Reviewing Party, such information shall be omitted from the publication.

 

Nothing in this subsection (d) shall apply to any announcement which is required to be made under the Relevant Legislation.  Subsection (b) above shall apply to such an announcement.

 

4.                                      INDEMNIFICATION

 

4.1                               Indemnification by Napo.  Napo agrees to indemnify and defend Insmed and its Representatives against all Losses, arising out of or resulting from (i) Napo’s activities and the activities of any third party affiliated with Napo on the development, marketing and commercialization of Masoprocal, (ii) any allegation that any Napo Product (or any part of any such Napo Product), the development of which Napo, or a Representative of Napo, actively managed, infringes any patent, trademark, copyright or trade secret of any third party, but only if (a) Insmed has given reasonable notice to Napo of the claim or cause of action, and (b) Insmed has not, by act or failure to act, compromised the position of Napo with respect to the resolution or defense of the claim, or cause of action.

 

4.2                               Indemnification by Insmed.  Insmed agrees to indemnify and defend Napo and its Representatives against all Losses, arising out of or resulting from (i) Insmed’s activities and the activities of any third party affiliated with Insmed on the development, marketing and commercialization of Masoprocal, (ii) any allegation that any Insmed Product (or any part of any such Insmed Product), the development of which Insmed, or a Representative of Insmed, actively managed, infringes any patent, trademark, copyright or trade secret of any third party, but only if (a) Napo has given reasonable notice to Insmed of the claim or cause of action, and (b) Napo has not, by act or failure to act, compromised the position of Insmed with respect to the resolution or defense of the claim, or cause of action.

 

5.                                      TERM AND TERMINATION

 

5.1                               Term.  This Agreement will commence on the Effective Date, and will remain in effect until Insmed has received the consideration specified in Section 2.4, for so long as and to the extent that, such consideration is payable, unless this Agreement is sooner terminated, as set forth below; provided, however, the Parties intend that, notwithstanding the expiration of the term of this Agreement, Section 2.4(e) shall survive.

 

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5.2                               Termination With Cause.  This Agreement may be terminated immediately by either party upon written notice to the other party if Cause exists.

 

5.3                               Termination By Mutual Consent.  This Agreement may be terminated by mutual written consent of the Parties for any reason or no reason.

 

5.4                               Survival of Certain Obligations Upon Expiration.  After this Agreement expires by its terms, Napo’s License and right of reference shall survive as set forth in Section 2.4(e).

 

5.5                               Survival of Certain Obligations Upon Termination.  If this Agreement is terminated, however, prior to expiration by its terms, all other future and continuing rights and obligations under this Agreement will terminate, except

 

(a)                                 that (i) if Insmed terminates this Agreement for Cause, and can document such Cause, or (ii) if Napo terminates this Agreement without Cause, or (iii) if Napo terminates this Agreement with Cause under circumstances where a reasonably prudent person would find that Napo has failed to adequately demonstrate such Cause or that Napo’s showing of Cause leaves room for doubt as to the actual existence of such Cause, then the License shall terminate and Napo’s covenant not to pursue development, marketing and commercialization of Masoprocal in the Insmed Exclusive Field of Use shall survive.

 

(b)                                 that (i) if Napo terminates this Agreement for Cause, and can document such Cause, or (ii) if Insmed terminates this Agreement without Cause, or (iii) if Insmed terminates this Agreement with Cause under circumstances where a reasonably prudent person would find that Insmed has failed to adequately demonstrate such Cause or that Insmed’s showing of Cause leaves room for doubt as to the actual existence of such Cause , then Napo’s right of reference to the Regulatory Package, as described in Section 3.3 shall survive and Insmed’s covenant not to pursue development, marketing and commercialization of Masoprocal in the Napo Exclusive Field of Use shall survive.

 

(c)                                  Any claim or cause of action for breach of the Agreement, existing as of the date of expiration or termination, or any claim for indemnification, and any obligation to indemnify, which claim or cause of action will remain in full force and effect until such rights and obligations are fully discharged.

 

6.                                      GENERAL AND MISCELLANEOUS

 

6.1                               Amendments and Modifications; No Waiver.  This Agreement may not be amended, modified or supplemented except by a written instrument signed by a duly authorized signatory of each of the Parties hereto.  No supplement, modification or waiver of the Agreement shall be binding unless executed in writing by the Parties.  No waiver of any of the provisions of the Agreement shall be deemed or shall constitute a waiver of any other provision hereof

 

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(whether or not similar), nor shall such waiver in any one instance constitute a continuing waiver unless otherwise expressly provided.

 

6.2                               Assignment.  This Agreement may not be assigned by either party without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that either party may assign the Agreement without the other party’s consent in the event of (i) a merger with or acquisition by a third party or (ii) a sale of substantially all of such party’s assets to a third party, or (iii) an assignment by Napo to a third party, Affiliate or otherwise, of a license for substantially all Napo’s rights under the License in (A) the Existing Patents, (B) the Regulatory Package and/or (C) any Napo Product(s), or (iv) an assignment by Insmed to a third party, Affiliate or otherwise, of a license for substantially all Insmed’s rights in any Insmed Product(s).  Any successor-in-interest to Insmed’s rights in either or both the Existing Patents and/or the Regulatory Package shall receive such rights subject to the License and the terms of this Agreement.

 

6.3                               Attorneys’ Fees.  If any legal action is commenced by either party, the prevailing party shall be awarded reasonable attorneys’ fees, expert and non-expert witness fees and costs, and other expenses incurred directly in connection the legal action, in addition to any other relief granted.

 

6.4                               Authority.  Each party to this Agreement represents and warrants to the other that the person executing this Agreement on such party’s behalf has full power and corporate authority to do so, and that such party has obtained all necessary approvals and consents necessary for such party to enter into this Agreement.  Each party covenants, represents and warrants to the other party as follows: (i) it is duly organized, validly existing, and authorized to conduct business under the laws of the state and country of its organization; and (ii) this Agreement when executed and delivered will constitute the party’s legal, valid and binding obligation enforceable in accordance with its terms.

 

6.5                               Breaches.  Each party acknowledges its responsibility for the conduct of its Representatives, and is liable to the other party for breaches by its Representatives of any of the terms and conditions of this Agreement.

 

6.6                               Counterparts and Facsimile.  This Agreement may be executed in two counterparts, each of which shall be deemed an original, but both of which, taken together, shall constitute one and the same instrument.  Signatures transmitted by facsimile or scanned PDF file, if identified and legible, will be regarded as original signatures.

 

6.7                               Dispute Resolution.  Any disputes arising between the Napo and Insmed relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by either party of its obligations hereunder, whether before or after termination of this Agreement (a “Dispute”) shall be finally resolved by binding arbitration as provided below.

 

(a)                                 Arbitration of any Dispute will be conducted under the commercial rules of the American Arbitration Association, in the English language by a panel of three arbitrators (the “Arbitration Panel”).  Napo and Insmed

 

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shall each appoint one arbitrator to the Arbitration Panel and the third arbitrator shall be appointed by the two arbitrators appointed by Napo and Insmed.

 

(b)                                 The Arbitration Panel shall have the authority to grant specific performance, and to allocate between Napo and Insmed the costs of arbitration in such equitable manner as it shall determine.

 

(c)                                  The Arbitration Panel shall issue a written opinion and the decision of the Arbitration Panel shall be binding on both Parties.  Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be.

 

6.8                               Entire Agreement.  This Agreement and any further documentation contemplated by the terms of this Agreement to fully effect the License of the Existing Patents and the Regulatory Package constitutes the entire agreement between the Parties hereto pertaining to the subject matter expressly addressed in this Agreement and, to the extent that any term or provision in this Agreement expressly conflicts with a prior written term sheet or communication, then this Agreement shall prevail and shall supersede such prior written term sheet or communication; and, similarly, this Agreement shall supersede any and all oral communications with respect to any matter expressly addressed herein.

 

6.9                               Further Acts.  The Parties agree to take such further acts and to execute and deliver such additional instruments or documentation, as may be necessary or advisable to give effect to the purpose and intent of this Agreement and to protect their respective interests.

 

6.10                        Incorporation By Reference.  All exhibits, schedules and attachments to this Agreement are incorporated into this Agreement, are made a part of this Agreement by reference and are to be construed as integral to the intentions of the Parties.

 

6.11                        Injunctive Relief.  The Parties recognize and agree that breach of the obligations in the Agreement may result in irreparable harm to the other party, which harm would be difficult to quantify, and that neither party will have an adequate remedy at law for such a breach.  Therefore, each party agrees to waive any defense that the other party has an adequate remedy at law and agrees that the other party may enforce its rights in equity by injunctive or other equitable relief.  The Parties also waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief.  An aggrieved party shall have the right to a preliminary injunction without a showing of actual damages, unless there exists a statutory prohibition on the waiver of such showing of actual damages.

 

6.12                        Jurisdiction, Venue and Governing Law.  This Agreement, the rights and obligations of the Parties hereto, and any claims or disputes, will be governed by and construed in accordance with the laws of the State of Delaware without reference to conflicts of law principles.

 

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6.13                        No Drafting Bias.  This Agreement has been drafted and negotiated jointly by the Parties, and reviewed by legal counsel of each party.  Therefore, any rule that an ambiguity shall be construed and interpreted in favor of the non-drafting party shall not apply.

 

6.14                        No Third Party Beneficiaries.  The Parties do not intend to create any rights in favor of any third parties by entering into this Agreement; and, in the event that either party fails to perform any obligation under the Agreement, no third party shall have any cause of action arising out of such failure.

 

6.15                        Severability.  In the event that any one or more of the provisions contained in the Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of the Agreement.  The remainder of the Agreement shall remain in full force and effect.

 

SIGNATURE PAGE TO FOLLOW

 

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SIGNATURE PAGE

 

LICENSE AGREEMENT

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by their duly authorized officers and this Agreement will be effective as of the Effective Date.

 

 

	
Napo Pharmaceuticals, Inc.
    	
 
    	
Insmed Incorporated
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Lisa A. Conte
    	
 
    	
/s/   Geoffrey Allan
    
	
Lisa   A. Conte
    	
 
    	
Geoffrey   Allan
    
	
Chief   Executive Officer
    	
 
    	
Chief   Executive Officer
    
	
February 28,   2007
    	
 
    	
February 28,   2007
    

 

 

EXHIBIT A

 

REGULATORY PACKAGE

 

The Regulatory Package contains, at a minimum, the following items relating to Masoprocal (as defined in the Agreement), including both the material in existence when Insmed assumed rights to the Regulatory Package and material associated with the Endocrine IND that Insmed has generated since it assumed such rights:

 

1.                                      All pre-clinical reports

 

2.                                      All clinical reports, data and documents

 

3.                                      Copies of all the original and official paper regulatory files

 

4.                                      All historical paper correspondence

 

5.                                      The complete paper contents of the FDA regulatory binders as of July 20, 2001 (originally, in black 3-ring binders with yellow front pages)

 

6.                                      Any FDA regulatory filings since July 20, 2001

 

7.                                      Safety data from the Prostate Cancer Study

 

8.                                      All files and paper documentation, past and current, pertaining to US patent 5,287,898.Exhibit 10.80

 

MASTER SERVICE AGREEMENT

 

This Master Service Agreement (this “Agreement”) made as of February 13, 2017 (the “Effective Date”) by and between Alamo Pharma Services, Inc., a Delaware corporation with offices at 77 N. Broad Street, Doylestown, PA 18901 (“Alamo”), and Napo Pharmaceuticals, Inc., a Delaware corporation with its principal place of business at 201 Mission Street, Ste. 2375, San Francisco, California 94105 (“Client”).  Alamo and Client may each be referred to herein as a “Party” and collectively, the “Parties.”

 

RECITALS

 

A.                                    Alamo offers a wide range of services and offerings to clients in the pharmaceutical, medical device, diagnostic, life science and healthcare industries.

 

B.                                    Client hereby engages Alamo, and Alamo hereby accepts such engagement, to provide various types of services pursuant to the terms hereof and one or more separate project agreements (each a “Project Agreement”) to be executed by the Parties.  Client and Alamo shall enter into a Project Agreement for each program they wish to be governed by the terms and conditions of this Agreement.

 

1.                                      Interpretation and Construction

 

(a)                                 The Parties desire for the terms and conditions set forth in this Agreement to govern the relationship between the Parties.  Unless otherwise specifically set forth in a Project Agreement, in the event of a conflict or inconsistency between the terms and conditions set forth in this Agreement and the terms and conditions set forth in a Project Agreement, the terms and conditions set forth in this Agreement shall take precedence, govern and control.

 

(b)                                 The Parties hereby acknowledge that the terms set forth in this Agreement shall be incorporated by reference into each Project Agreement, as if fully set forth at length therein.

 

(c)                                  The Parties acknowledge that in addition to Alamo, certain of Alamo’s Affiliates (as defined below) may provide certain Services (as defined below) to Client, and may directly enter into a Project Agreement with Client, subject to Client’s prior written consent, pursuant to which such Alamo Affiliate shall provide services to Client, as forth in detail in said executed Project Agreement.  In such event, the Project Agreement shall confirm that this Agreement shall govern the relationship between Client and the particular Alamo Affiliate, and such parties agree to be bound by the terms set forth herein.  Client agrees that Alamo acts solely on its own behalf and shall not be liable, or otherwise responsible, for the acts and/or omissions of any Alamo Affiliate under any circumstances in connection with any Project Agreement that is not signed by Alamo.  Further, each Alamo Affiliate acts solely on its own behalf and shall not be liable, or otherwise responsible, for the acts and/or omissions of Alamo or any other Alamo Affiliate under any circumstances in connection with this Agreement or any Project Agreement that is not signed by that Alamo Affiliate.  As set forth above, the term “Affiliate” means any corporate or non-corporate business entity which controls, is controlled by, or is under common control with a Party to this Agreement.  A corporation or non-corporate business entity shall be regarded as in control of another corporation or entity: (i) if it owns or directly or indirectly controls at least fifty percent (50%) of the voting stock or interests of the other corporation or entity, or (ii) in the

 

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absence of the ownership of at least fifty percent (50%) of the voting stock or interests of such corporation or entity, if it possesses directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation or non-corporate business entity, as applicable.

 

2.                                      The Services

 

Client shall retain Alamo to provide the services (hereinafter the “Services”) as set forth in one or more Project Agreements.

 

3.                                      Representations and Warranties of the Parties

 

(a)                                 Mutual Representations and Warranties.  Each Party hereby represents and warrants to the other Party that:

 

(i)                                     it shall comply with all statutes, federal and state applicable laws, ordinances, rules or regulations of any governmental or regulatory authority including (but not limited to) the OIG Compliance Program Guidance for Pharmaceutical Manufacturers, the PhRMA Code on Interactions with Healthcare Professionals, the Accreditation Council for Continuing Medical Education requirements for continuing medical education, the American Medical Association Ethical Guidelines on Gifts to Physicians from Industry, the Federal Food, Drug and Cosmetic Act (“FDCA”), the Medicare/Medicaid anti-kickback statute, the Prescription Drug Marketing Act (“PDMA”), the Health Insurance Portability and Accountability Act, and similar state laws, rules and regulations (collectively, “Applicable Law”);

 

(ii)                                  after reasonable inquiry neither it nor, to the extent applicable, any of its employees: (a) has been debarred by the FDA pursuant to its authority under Sections 306(a) and (b) of the U.S. Food, Drug, and Cosmetic Act (21 U.S.C. § 335(a), or (b) is the subject of any investigation or proceeding which may result in debarment by the FDA.  In addition, neither it or any of its employees is included in the List of Excluded Individuals/Entities (maintained by the U.S. Department of Health and Human Services Office of Inspector General) or the List of Parties Excluded from Federal Procurement and Nonprocurement maintained by the U.S. General Services Administration, or is the subject of any investigation or proceeding which may result in inclusion in any such list.  Each Party agrees to immediately notify the other Party if it becomes aware of any such debarment, exclusion, investigation or proceeding of it or, to the extent applicable, any of its employees;

 

(iii)                               it shall maintain in full force and effect all necessary licenses, permits, approvals (or waivers) and authorizations required by Applicable Law to carry out its obligations under this Agreement and any Project Agreement;

 

(iv)                              it is not a party to any agreement which would prevent it from fulfilling its obligations under this Agreement and any Project Agreement and that during the term of this Agreement and any Project Agreement, it will not enter into any agreement which would in any way prevent or restrict it from performing its obligations set forth herein and any Project Agreement;

 

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(v)                                 the execution, delivery and performance of this Agreement and the consummation of the transaction(s) contemplated hereby has been duly authorized by all requisite corporate action; that this Agreement constitutes the legal, valid, and binding obligation of each Party, enforceable in accordance with its terms (except to the extent enforcement is limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and by general principles of equity); and that this Agreement and performance of the Services hereunder does not violate or constitute a breach under any organizational document of a Party or any contract, other form of agreement, or judgment or order to which a Party is bound;

 

(b)                                 Alamo represents warrants and covenants that:

 

(i)                                     Alamo shall perform the Services in a professional, workmanlike manner and in accordance with those specifications and timelines which are agreed to in advance and in writing by Alamo and Client;

 

(ii)                                  the personnel assigned to perform Services rendered under a Project Agreement shall be capable professionally and duly qualified to perform the Services in accordance with any agreed upon hiring profile that may be set forth in a Project Agreement;

 

(iii)                               Alamo is not a party to any agreement which would prevent it from fulfilling its obligations under this Agreement and that during the term of this Agreement, it will not enter into any agreement to provide services which would prevent it from performing the Services to Client under an executed Project Agreement;

 

(c)                                  Client represents warrants and covenants that:

 

(i)                                     Client will act in good faith to provide Alamo with the necessary materials, information, product training, and assistance required to enable Alamo to perform the Services in compliance with all Applicable Law.  Certain Client obligations and responsibilities unique to a specific Project Agreement may be specified within a Project Agreement;

 

(ii)                                  Client either owns the product(s) that is the subject of a Project Agreement, or has received all lawful authority from a third party necessary to grant Alamo the right to provide the Services described in a Project Agreement.  To the best of its knowledge, effective the date of this Agreement Client’s patents, copyrights, trademarks, trade names and trade dress do not infringe on any intellectual property or product rights of any third party.  Client further represents and warrants that the marketing and promotion of any Client product by Alamo, as set forth in a Project Agreement, does not infringe on any intellectual property or product marketing rights of any third party;

 

(iii)                               Client is solely responsible for reviewing and approving Client’s product promotional materials and literature and for ensuring all such materials comply with Applicable Law;

 

(iv)                              the program(s) pursuant to which Alamo is performing the Services are Client’s marketing and promotional programs that are being implemented by Alamo and as such, Client is responsible for ensuring that each program set forth in a Project Agreement adheres to Applicable Law;

 

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(v)                                 Client is responsible for complying with all state and county drug disposal ordinances, including but not limited to the Alameda County Safe Drug Disposal Ordinance (http ://www. ac 2:0V. or viacel-ils afedisp osal/index htm);

 

(vi)                              Client is responsible for all decisions concerning the marketing, planning, strategy and detailing of the Product, and shall have the sole right and responsibility for establishing and modifying the terms and conditions of the sale of the Product, including without limitation, terms and conditions such as the price at which the Product will be sold, whether the Product shall be subject to any discounts, the distribution of the Product, and whether credit is to be granted or refused in connection with the sale of any Product; and

 

(vii)                           Client is responsible for all regulatory reporting requirements including but not limited to aggregate spend reporting, reporting required by any State, as applicable, and pursuant to the disclosure requirements set forth in the Patient Protection and Affordable Care Act (commonly referred to in the Physician Payments Sunshine Act.

 

4.                                      Independent Contractors; Alamo Personnel

 

(a)                                 Alamo and its directors, officers, employees and any persons providing services under the Agreement and any Project Agreement are at all times independent contractors with respect to Client.  Persons provided by Alamo to perform Services shall not be deemed employees of Client.  Neither this Agreement nor the Services to be rendered hereunder shall for any purpose whatsoever or in any way or manner create any employer-employee relationship between Alamo, its directors, officers, employees and any persons providing Services under the Agreement and Client.  Client understands that Alamo may utilize independent contractors in connection with its performance of the Services.

 

(b)                                 Alamo is, and at all times shall remain, solely responsible for the human resource and performance management functions of all Alamo personnel provided to perform the Services.  Alamo shall be solely responsible for all disciplinary, probationary and termination actions taken by it, and for the formulation, content and dissemination of all employment policies and rules (including written disciplinary, probationary and termination policies) applicable to its employees, agents and contractors (individually, an “Alamo Employee” and collectively, the “Alamo Employees”).

 

(c)                                  Alamo shall obtain and maintain worker’s compensation insurance and other insurances required for Alamo Employees performing the Services and acknowledges that Client does not, and shall not obtain or maintain such insurances, all of which shall be Alamo’s sole responsibility.

 

(d)                                 Alamo acknowledges and agrees that Alamo Employees are not, and are not intended to be or be treated as, employees of Client and that no such individual is, or is intended to be, eligible to participate in any benefits programs or in any Client “employee benefit plans” (as defined in Section 3(3) of ERISA) (“Client’s Benefits Plan”).

 

(e)                                  Except as otherwise set out in this Agreement or in a Project Agreement, Client shall have no responsibility to Alamo or any Alamo Employee for any compensation, expense reimbursements or benefits (including, without limitation, vacation and holiday remuneration,

 

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healthcare coverage or insurance, life insurance, pension or profit-sharing benefits and disability benefits), payroll-related or withholding taxes, or any governmental charges or benefits (including, without limitation, unemployment and disability insurance contributions or benefits and workers compensation contributions or benefits) that may be imposed upon or be related to the performance by Alamo or its employees, agents or contractors of the obligations under this Agreement or any Project Agreement, all of which shall be the sole responsibility of Alamo.  To clarify, Client will not withhold any income tax or payroll tax of any kind on behalf of Alamo.

 

(f)                                   Limitations.  Notwithstanding anything to the contrary in this Section 4, Alamo shall have no obligation or responsibility for any damages, liability, loss and costs, including but not limited to attorney’s fees (collectively, “Liability”) to the extent such Liability is attributed solely to discriminatory and/or intentional acts of Client, its employees, agents or contractors.

 

(g)                                  Nothing contained herein shall create a partnership or co-venture between Alamo and Client and neither Party will hold themselves out as the partner of the other.

 

5.                                      Alamo Compensation

 

(a)                                 In consideration of the performance of the Services, Client shall pay Alamo the fees, costs and expenses (collectively, the “Fees”) as set forth in each Project Agreement.  Alamo shall bill Client monthly in advance and invoices shall be sent by Alamo to Client on a monthly basis for the Fees for Services to be provided in the following month.

 

(b)                                 In addition to the Fees set forth in a Project Agreement, certain necessary and reasonable expenses will be charged to Client on a pass-through basis.  These expenses will be billed to Client at actual cost incurred by Alamo, without margin or mark-up.  Pass-through costs specific to a particular Service shall be set forth in the Project Agreement executed by the Parties.

 

(c)                                  Payments are due upon Client’s receipt of each applicable invoice from Alamo.  If an invoice is not paid within thirty (30) days of Client’s receipt, Alamo may, in its discretion, impose a finance charge of 1.0% per month of all amounts due that are not in dispute.  All invoices shall be accompanied by descriptions of the Services performed and expenses incurred in sufficient detail to allow an audit of amounts due.  Alamo shall retain a back-up copy of all support documentation for a period of 3 years.

 

(d)                                 In the event Client disputes and Fees set forth in an invoice, it shall pay Alamo the undisputed portion of such invoice and shall also send Alamo written notice setting forth the amount in dispute and the basis for such dispute.  The Parties agree to resolve invoice disputes in an expeditious manner.

 

6.                                      Confidentiality

 

(a)                                 During the performance of the Services contemplated by this Agreement, each Party may learn confidential, proprietary, and/or trade secret information of the other Party (“Confidential Information”).  The Party disclosing Confidential Information shall be referred to as the “Disclosing Party” and the Party receiving Confidential Information shall be referred to as the “Receiving Party.”

 

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(b)                                 Confidential Information means any information which is disclosed to or created by either party or which has value to the Disclosing party as not being generally known to that party’s competitors or other third parties.  Confidential Information includes, without limitation, the terms set forth in this Agreement, technical, trade secret, commercial and financial information about either Party’s (i) research or development; (ii) marketing plans or techniques, contacts or Clients or a party’s products or services; (iii) organization or operations; (iv) business development plans (i.e., licensing, supply, acquisitions, divestitures or combined marketing); (v) products, licenses, trademarks, patents, other types of intellectual property or any other contractual rights or interests (including without limitation processes, procedures and business practices involving trade secrets or special know-how), (vi) pricing and financial information, and (vii) Batch records, communications and agreements with manufactures of pharmaceuticals, (viii) formula’s for products or potential products, (ix) New Drug Applications, Abbreviated New Drug Applications, pre-market notifications (501(k)) filed with the FDA or other governmental services that is not publicly disclosed, (x) in the case of Alamo, the names and contact information (i.e., phone number, address and e-mail address) of the Alamo Employees, and (xi) in the case of Client, all information and compilations of information about Client’s products including the preferences of prescribing physicians, trends in URL, issues and problems with the products.  The Receiving Party shall neither use nor disclose Confidential Information received from the Disclosing Party for any purpose other than as specifically allowed by this Agreement.

 

(c)                                  Upon the expiration or termination of this Agreement, the Receiving Party shall, at the request of Disclosing Party, return all tangible forms of Confidential Information, including any and all copies and derivatives of Confidential Information made by either Party or their employees as well as any writings, drawings, specifications, manuals or other printed or electronically stored material based on or derived from, Confidential Information, except that Receiving Party may retain one (1) copy for monitoring ongoing obligations hereunder.  Any material or media not subject to return must be destroyed.  The Receiving Party shall not use or disclose to third parties any Confidential Information or any reports, recommendations, conclusions or other results of work under this Agreement without prior consent of an officer of the Disclosing Party.  The obligations set forth in this Section 6, including the obligations of confidentiality and non-use shall be continuing and shall survive the expiration or termination of this Agreement and the Project Agreement and will continue for a period of two (2) years from the date of such expiration or termination.

 

(d)                                 The obligations of confidentiality and non-use set forth herein shall not apply to the following: (i) Confidential Information at or after such time that it is or becomes publicly available through no fault of the Receiving Party; (ii) Confidential Information that is already independently known to the Receiving Party as shown by prior written records; (iii) Confidential Information at or after such time that it is disclosed to the Receiving Party by a third party with the legal right to do so; and (iv) solely with respect to the specific relevant process, order or request, Confidential Information required to be disclosed pursuant to judicial process, court order or administrative request, provided that the Receiving Party shall so notify the Disclosing Party sufficiently prior to disclosing such Confidential Information as to permit the Disclosing Party to seek a protective order.  Receiving Party shall make a copy of all materials disclosed which shall be provided to the Disclosing Party within ten (10) business days following disclosure.

 

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7.                                      Restrictions on Solicitation

 

(a)                                 The Parties agree that except as otherwise set forth in a Project Agreement, during the Term of this Agreement and for one (1) year period following the expiration or earlier termination of the Agreement, neither Party will solicit or hire the employees, consultants or independent contractors of the other to become employees, consultants or independent contractors of such Party without the prior written consent of the Party whose employees, consultants or independent contractors are being solicited, which consent may be withheld in such Party’s discretion.  The provisions of this Section 7 shall not apply with respect to either Party’s employees, consultants or independent contractors who seek employment from the other Party on their own initiative, such as, but not limited to, in response to a Party’s general vacancy announcement or advertisement.

 

(b)                                 Client agrees during the Term of this Agreement and for one (1) year period following the expiration or earlier termination of this Agreement not to: (i) provide any contact information (including name, address, phone number or e-mail address) of any Alamo Employee to any third party which provides or proposes to provide Client with the same services being provided by Alamo pursuant to a Project Agreement, or (ii) to assist actively in any other way such a third party in employing or retaining such Alamo Employee.

 

8.                                      Indemnification

 

(a)                                 Limited to the extent Client set forth in Section 8(b) below, Alamo shall indemnify, defend and hold Client (including its officers, directors, agents and employees) harmless from and against any and all liabilities, losses, proceedings, suits, actions, damages, claims or expenses of any kind, including court costs and reasonable attorneys’ fees (collectively, “Losses”) resulting from third party claims, demands and causes of action arising from or caused by: (i) any negligent, grossly negligent or willful acts or omissions by Alamo, its agents, directors, officers, independent contractors, or employees, (ii) any breach of this Agreement or any Project Agreement by Alamo, its agents, directors, officers or employees, or (iii)_any claim for wages or benefits by any Alamo Employee, any claim for employee withholdings from any local, state or federal agency, or (iv) requests by Alamo or by third parties pursuant to a subpoena or court order for the production by Client of documents, electronic documents or computer hard drives relating to Services provided by Alamo pursuant to a Project Agreement, or to interview or depose and/or obtain testimony from Client employees regarding such Services.  Client shall assist Alamo, at Alamo’s expense, in defending any such claim, suit, or proceeding.

 

(b)                                 Limited to the extent Client set forth in Section 8(a) above, Client shall indemnify, defend and hold Alamo (including its officers, directors, agents, and employees) harmless from and defend against any and all Losses resulting from third party claims, demands and causes of action arising solely from or exclusively caused by: (i) grossly negligent or willful acts or omissions by Client, its agents, directors, officers, independent contractors, or employees, or (ii) any breach of this Agreement or any Project Agreement by Client, its agents, directors, officers or employees, or (iii) any Client product including product liability claims, whether arising out of warranty, negligence, strict liability (including manufacturing, design, warning or instruction claims) or any other product based statutory claim for promoted products, or (iv)

 

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requests by Client or by third parties pursuant to a subpoena or court order for the production by Alamo of documents, electronic documents or computer hard drives relating to Services provided by Alamo pursuant to a Project Agreement, or to interview or depose and/or obtain testimony from Alamo Employees regarding such Services (unless such subpoena or court order is caused by the negligent acts of Alamo or its employees); or (v) an allegation that Client’s products, product promotional literature or other Client documents and materials infringes any patent, trademark, copyright or other intellectual property rights of any third party, except to the extent that: (x) the allegedly infringing material was initially provided by Alamo, or (y) the alleged infringement is caused by Alamo’s modification or further development of documents and materials provided by Client.

 

(c)                                  In case any action, proceeding or claim shall be brought against one of the Parties hereto (an “Indemnified Party”) based upon any of the above Claims and in respect of which indemnity may be sought against the other party hereto (the “Indemnifying Party”) such Indemnified Party shall promptly notify the Indemnifying Party in writing but no later than five (5) business days following receipt of such notification.  The failure by an Indemnified Party to notify the Indemnifying Party of such Claim shall not relieve the Indemnifying Party of responsibility under this Section, except to the extent such failure adversely prejudices the ability of the Indemnifying Party to defend such claim.  The Indemnifying Party at its expense, with counsel of its own choice, shall defend against, negotiate, settle or otherwise deal with any such claim, provided that the Indemnifying Party shall not enter into any settlement or compromise of any claim which could lead to liability or create any financial or other obligation on the part of the Indemnified Party without the Indemnified Party’s prior written consent.  The Indemnified Party may participate in the defense of any claim with counsel of its own choice and at its own expense.  The Parties agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such claims.  In the event that the Indemnifying Party does not undertake the defense, compromise or settlement of any claim, the Indemnified Party shall have the right to control the defense or settlement of such claim with counsel of its choosing.

 

9.                                      Limitation of Liability

 

(a)                                 Neither Party shall be liable to the other Party with respect to any subject matter of this Agreement or any Project Agreement under any contract, tort, negligence, strict liability, breach of warranty (express or implied) or other theory for any indirect, incidental, special, exemplary, punitive, exemplary or consequential damages, nor for any loss of revenues or loss of profits, even if advised of the possibility of such damages.  Notwithstanding the above, the limitation of liability in this Section 9(a) shall not apply to the Parties’ indemnification obligations set forth in Section 8 above.

 

(b)                                 The compensation to be paid by Client to Alamo as set forth in a Project Agreement, is based on the value of the Services provided by Alamo to Client and the comparative scope of liability being undertaken or assumed by the Parties.  Client acknowledges that while Alamo will carry out its duties under this Agreement in a commercially reasonable manner, Alamo makes no warranty, expressed or implied, that the Services that it will furnish to Client pursuant to one or more executed Project Agreements, will not result in monetary losses or other damages to Client.

 

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10.                               Intellectual Property; Ownership

 

(a)                                 Except as set forth in Sections 10(b) below, all documents, materials, reports and deliverables provided by Alamo to Client pursuant hereto whether or not patentable, copyrightable, or susceptible to any other form of legal protection which are made, conceived, reduced to practice or authored by Alamo, or Alamo’s employees, representatives or agents (if any) as a result of the performance of Services, or which are derived from use or possession of Client’s Confidential Information (collectively, the “Deliverables”) shall be the sole and exclusive property of Client.  Each Deliverable constituting an original work shall be considered a work made for hire under applicable copyright laws.  Subject to Section 10(b) below, Alamo hereby assigns and agrees to assign to Client all right, title and interest in all worldwide intellectual property rights in the Deliverables, including without limitation, patents, copyrights, and trade secrets.

 

(b)                                 Notwithstanding anything to the contrary set forth in Section 10(a) above, to the extent any Deliverable or work made for hire include Alamo’s concepts, ideas, models, know-how, software, methodologies, technology, techniques, procedures, management tools, workshops, manuals, macros, data files, inventions, and other intellectual capital and property that Alamo had developed, created or acquired prior to, in the course of, or independent of performing the Services for Client under this Agreement (the “Alamo Materials”), Alamo shall retain exclusive ownership in such Alamo Materials.  Alamo hereby grants Client a nonexclusive, non-transferable, royalty-free perpetual right and license, for it to use the Alamo Materials solely in connection with its use of the Deliverables created by Alamo in connection with the Services provided pursuant to an executed Project Agreement.

 

11.                               Term

 

The Agreement shall be in effect as of the Effective Date and shall remain in effect for three (3) calendar years from the Effective Date (the “Term”) or until such later date as may be set forth in a Project Agreement (it being understood that this Agreement will not terminate in the event the term for Services set forth in a Project Agreement is longer than the term set forth herein).

 

12.                               Termination

 

(a)                                 This Agreement and any Project Agreement may be terminated by Alamo or Client upon giving written notice as follows:

 

(i)                                     by Alamo, if any undisputed payment to Alamo by Client is not made when due and such payment is still not made within thirty (30) days from the date of written notice from Alamo to Client advising of such nonpayment;

 

(ii)                                  by either Party, in the event that the other Party has committed a material breach of this Agreement and such breach has not been cured within thirty (30) days of receipt of written notice from the non-breaching Party of such breach (provided that, during the thirty (30) day cure period for termination due to breach, each Party will continue to perform its obligations under the Agreement);

 

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(iii)                               by either Party, in the event the other Party is either debarred from federal contracting or is a “Sanctioned Entity.” For purposes hereof, a Sanctioned Entity is an entity that:

 

(A)                               Is currently under indictment or prosecution for, or has been convicted (as defined in 42 C.F.R. § 1001.2) of: (1) any offense related to the delivery of an item or service under the Medicare or Medicaid programs or any program funded under Title V or Title )0( of the Social Security Act (the Maternal and Child Health Services Program or the Block grants to States for Social Services programs, respectively), (2) a criminal offense relating to neglect or abuse of patients in connection with the delivery of a health care item or service, (3) fraud, theft, embezzlement, or other financial misconduct in connection with the delivery of a health care item or service, (4) obstructing an investigation of any crime referred to in (1) through (3) above, or (5) unlawful manufacture, distribution, prescription, or dispensing of a controlled substance; or

 

(B)                               Has been required to pay any civil monetary penalty regarding false, fraudulent, or impermissible claims under, or payments to induce a reduction or limitation of health care services to beneficiaries of, any state or federal health care program, or is currently the subject of any investigation or proceeding which may result in such payment; or

 

(C)                               Has been excluded from participation in the Medicare, Medicaid, or Maternal and Child Health Services (Title V) program, or any program funded under the Block Grants to States for Social Services (Title II) program; or

 

(iv)                              by either Party, in the event that the other Party has become insolvent or has been dissolved or liquidated, filed or has filed against it, a petition in bankruptcy and such petition is not dismissed within thirty (30) days of the filing, makes a general assignment for the benefit of creditors; or has a receiver appointed for a substantial portion of its assets.

 

(b)                                 Upon the effective date of such termination, the parties shall have no further obligation to each other (other than those set forth in Sections 4, 6, 7, 8, 9, 10, 13 and 15), except that Client shall pay the amounts set forth or provided for in any Project Agreement through the actual date of termination.

 

13.                               Venue and Jurisdiction

 

Any action brought by either Alamo or Client in connection with this Agreement shall be brought in the state or federal courts located in the defending Parties home state (San Francisco, California or the Commonwealth of Pennsylvania).

 

14.                               Insurance

 

(a)                                 Each Party undertakes to maintain appropriate insurance in commercially reasonable amounts with financially capable carriers, including in the case of Client, Product Liability insurance in the amount of at least ten million dollars $10,000,000.  Each Party shall name the other Party as an additional insured on all liability insurance coverage.  In addition, upon written request, each Party will provide the other with evidence of coverage complying with this Section.  The Parties understand and agree that additional insurance requirements may

 

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be set forth in the Project Agreements.  Any additional program specific insurance requirements may be set forth in a Project Agreement.

 

(b)                                 During the Term, Alamo shall maintain and provide confirmation of the following coverage: (i) Commercial General Liability insurance coverage for its operations and all of its employees and consultants, with a minimum limit of liability of not less than $1,000,000 per occurrence and in the aggregate; (ii) Business Automobile Liability insurance to cover all owned, hired and no owned automobiles providing a minimum combined single limit of $1,000,000; (iii) Workers’ Compensation insurance as required by the state hi which the salesperson is located and in amounts as may be required by applicable statute; (iv) Employer’s Liability insurance in an amount of at least $1,000,000 for bodily injury per accident, $1,000,000 for bodily injury per disease and $1,000,000 per policy limit; (v) umbrella liability insurance that follows form in excess of the limits as specified in sections (b) (i), (ii), and (iv) above, of no less than $3,000,000 per occurrence and in the aggregate; (vii) Crime Coverage in an amount of no less than $5,000,000 per occurrence; (viii) Employment Practices Liability including Third Party EPL in an amount of not less than $5,000,000 per occurrence.

 

(c)                                  Any company underwriting any of Alamo’s Insurance shall have, according to A.M. Best Insurance Guide, a Best’s rating of not less than A- and a Financial Size Category of not less than VIII.  All commercial general liability, business automobile liability and umbrella liability insurance policies shall name Client as an “additional insured”.

 

15.                               Audit.

 

Alamo shall use commercially reasonable efforts to maintain true and accurate records in connection with the Services provided, in sufficient detail to permit accurate verification of the compensation (including fixed fees and pass-through expenses) paid to or due Alamo.  Once annually during the Term (or more frequently for cause or if a previous audit showed any discrepancy), and for a one year period after the expiration or earlier termination of this Agreement, Client, or an independent accounting firm appointed by Client, may conduct an audit or inspection of such Alamo records, solely for the purpose of verifying either the amount of payments made hereunder or compliance with the terms set forth herein and in a Project Agreement.  Such inspections shall be made during ordinary business hours, on reasonable prior written notice, and shall be conducted so as to not interfere with the operations of Alamo’s business.  If the inspection is conducted by an independent accounting firm appointed by Client, prior to any inspection, such independent accounting firm shall execute a confidentiality agreement in a form reasonably acceptable to Alamo.  Books and records of Alamo that are not subject to inspection include: (a) individual personnel files of Alamo employees and agents; (b) any information relating to Alamo’s other clients; and (c) any of Alamo’s internal costs or non-billable expenses.  To the extent that such audit reveals any overpayments or underpayments by Client, Client shall make up the amount of shortfall or, if applicable, Alamo shall refund the amount of overpayment made by Client, within thirty (30) days from the date of Alamo’s receipt of the audit or accountant’s report.  In the event that any audit shows that Client has overpaid Alamo by five percent (5%) or more Client may immediately terminate this Agreement.

 

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16.                               Miscellaneous

 

(a)                                 Neither Alamo nor Client may assign or transfer this Agreement or any Project Agreement or any of its rights, duties or obligations hereunder without the other Party’s prior written consent; provided, however, that either Alamo or Client may assign or transfer its rights, duties and obligations as part of an acquisition or purchase of Alamo or Client, without the prior written consent of the other Party when: (i) such assignment is to a successor-in-interest to all or substantially all of the ownerships interest or business assets of such Party whether in a merger, sale of stock, sale of assets or other similar transaction; and (ii) the successor is a financially capable business entity.  Any permitted successor or assignee of this Agreement and the rights and/or obligations hereunder, will in writing (satisfactory in form and substance) to the other Party, expressly assume this Agreement and any existing Project Agreement and the rights and obligations hereunder.  If such writing is not received, any proposed assignment or transfer need not be recognized and shall be null and void.

 

(b)                                 This Agreement supersedes all prior arrangements and understandings between Parties related to the subject matter hereof.

 

(c)                                  Except for Client’s payment obligations, noncompliance with the obligations of this Agreement due to a state of force majeure, the laws or regulations of any government, regulatory or judicial authority, war, civil commotion, destruction of facilities and materials, fire, flood, earthquake or storm, shortage of materials, failure of public utilities or common carriers, and any other similar causes beyond the reasonable control of the applicable Party, shall not constitute a breach of contract.

 

(d)                                 If any provision of this Agreement is finally declared or found to be illegal or unenforceable by a court of competent jurisdiction, both Parties shall be relieved of all obligations arising under such provision, but, if capable of performance, the remainder of this Agreement shall not be affected by such declaration or finding.

 

(e)                                  This Agreement, together with each applicable Project Agreement (including any attachments or exhibits hereunder or thereunder), contains all of the terms and conditions of the agreement between the Parties and constitutes the complete understanding of the Parties with respect thereto.  No modification, extension or release from any provision hereof shall be affected by mutual agreement, acknowledgment, acceptance of contract documents, or otherwise, unless the same shall be in writing signed by the other Party and specifically described as an amendment or extension of this Agreement.

 

(f)                                   The form and content of any public announcement to be made by one Party regarding this Agreement, or the subject matter contained herein, shall be subject to the prior written consent of the other Party (which consent may not be unreasonably withheld), except as may be required by applicable law, in which event the other Party shall endeavor to give the other Party reasonable advance notice and review of any proposed disclosure.  Notwithstanding the above, either Party may, in connection with its general marketing materials and without the consent of the other Party, list the name of the other Party in a non-descriptive fashion, in a list of the names of other similarly situated third parties that such Party does business with.

 

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(g)                                  For the convenience of the Parties, this Agreement may be executed in counterparts and by facsimile or email exchange of pdf signatures, each of which counterpart shall be deemed to be an original, and both of which taken together, shall constitute one agreement binding on both Parties.

 

(h)                                 Any notices required or permitted under this Agreement shall be given in person or sent by first class, certified mail to:

 

	
To Client:
    	
 
    	
To Alamo:
    
	
Address:
    	
 
    	
Address:
    
	
Napo   Pharmaceuticals, Inc.
    	
 
    	
Alamo Pharma Services, Inc.
    
	
201 Mission Street,   Ste. 2375
    	
 
    	
77 N. Broad Street
    
	
San Francisco,   California 94105
    	
 
    	
Doylestown, PA 18901
    
	
 
    	
 
    	
 
    
	
Attention: Lisa Conte
    	
 
    	
Attention: Pete Marchesini
    
	
Fax: 415-371-8311
    	
 
    	
Fax: 215-489-9522
    
	
 
    	
 
    	
 
    
	
Copy To: J. Margolin
    	
 
    	
Copy To:
    
	
Legal
    	
 
    	
Lee Cusenbary
    
	
 
    	
 
    	
General Counsel
    
	
 
    	
 
    	
Lee.Cusenbary@missionpharmacal.com
    

 

or to such other address or to such other person as may be designated by written notice given from time to time during the term of this Agreement by one Party to the other.

 

(i)                                     Each of the Parties shall do, execute and perform and shall procure to be done and perform all such further acts deeds documents and things as the other Party may reasonably require from time to time giving full effect to the terms of this Agreement.

 

(j)                                    Except as otherwise expressly provided in this Agreement, each Party shall pay its own expenses and costs incidental to the preparation of this Agreement and to the consummation of the transactions contemplated by this Agreement or each Project Agreement.

 

WHEREFORE, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

 

	
ALAMO PHARMA SERVICES, INC.
    	
 
    	
NAPO PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Pete Marchesini
    	
 
    	
By:
    	
/s/Lisa   A. Conte
    
	
Name:
    	
Pete Marchesini
    	
 
    	
Name:
    	
Lisa   A. Conte
    
	
Title:
    	
Chief Operations Officer
    	
 
    	
Title:
    	
Chief   Executive Officer
    

 

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