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Exhibit 10.1
MARKETING, DEVELOPMENT AND SUPPLY AGREEMENT
DUSA Pharmaceuticals, Inc.
and
Schering AG
November 22, 1999
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS........................................................................................... 2
1.1 "Additional Collaboration Product"............................................................ 2
1.2 "Affiliate"................................................................................... 2
1.3 "AK".......................................................................................... 2
1.4 "ALA"......................................................................................... 2
1.5 "Applicator".................................................................................. 2
1.6 "Collaboration Product"....................................................................... 2
1.7 "CMC"......................................................................................... 2
1.8 "Competing Product"........................................................................... 3
1.9 "Control"..................................................................................... 3
1.10 "Cost of Goods"............................................................................... 3
1.11 "Current Good Manufacturing Practices" or "cGMP".............................................. 3
1.12 "Data"........................................................................................ 3
1.13 "Dermatological Disorders".................................................................... 4
1.14 "Development Costs"........................................................................... 4
1.15 "Development Plan and Budget"................................................................. 4
1.16 "Development Program"......................................................................... 4
1.17 "DUSA Technology"............................................................................. 5
1.18 "EMEA"........................................................................................ 5
1.19 "Existing MAA"................................................................................ 5
1.20 "FDA"......................................................................................... 5
1.21 "Field"....................................................................................... 6
1.22 "Finished Product"............................................................................ 6
1.23 "First Commercial Sale"....................................................................... 6
1.24 "Full Program Funding Period"................................................................. 6
1.25 "GAAP"........................................................................................ 6
1.26 "Initial Product"............................................................................. 6
1.27 "Kerastick Trademark"......................................................................... 6
1.28 "Levulan Trademark"........................................................................... 6
1.29 "Major Country"............................................................................... 7
1.30 "Manufacturing Standards"..................................................................... 7
1.31 "Marketing Approval".......................................................................... 7
1.32 "Marketing Approval Application" or "MAA"..................................................... 7
1.33 "Net Sales"................................................................................... 7
1.34 "PARTEQ License Agreement".................................................................... 8
1.35 "Party or Parties"............................................................................ 8
1.36 "Product Territory"........................................................................... 8
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1.37 "Region" and "Key Market"..................................................................... 8
1.38 "Specifications".............................................................................. 8
1.39 "Sublicensee"................................................................................. 8
1.40 "Term of the Development Program"............................................................. 8
1.41 "Territory"................................................................................... 8
1.42 "United States or U.S."........................................................................ 8
ARTICLE 2 STEERING AND DEVELOPMENT COMMITTEES................................................................... 9
2.1 Steering Committee............................................................................ 9
2.2 Development Committee......................................................................... 9
2.3 No Committee Amendments; Authority............................................................ 10
ARTICLE 3 DEVELOPMENT PLANS AND BUDGETS......................................................................... 11
3.1 Development Plans and Budgets................................................................. 11
3.2 Full Program Funding Period................................................................... 11
3.3 Below Full Program Funding.................................................................... 13
3.4 Additional Projects........................................................................... 13
3.5 Tail Period................................................................................... 14
3.6 Wind-Down Period.............................................................................. 15
3.7 Funding Limit................................................................................. 16
ARTICLE 4 DEVELOPMENT PROGRAM................................................................................... 16
4.1 Product Development........................................................................... 16
4.2 Development Program Funding................................................................... 18
4.3 Regulatory Matters............................................................................ 18
4.4 Step-In Rights................................................................................ 20
ARTICLE 5 RECORD KEEPING; PUBLICATION........................................................................... 21
5.1 Reports and Records........................................................................... 21
5.2 Review of Publications........................................................................ 21
ARTICLE 6 DEVELOPMENT PROGRAM FUNDING........................................................................... 22
6.1 Development Costs............................................................................. 22
6.2 Payment of Development Costs.................................................................. 23
6.3 Milestone Payments............................................................................ 25
6.4 Credit Against Future Royalties............................................................... 27
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(continued)
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ARTICLE 7 USE OF PRECLINICAL AND CLINICAL DATA.................................................................. 27
7.1 Exchange...................................................................................... 27
7.2 Use; Disclosure............................................................................... 27
7.3 Regulatory Requirements....................................................................... 28
ARTICLE 8 MARKETING RIGHTS...................................................................................... 28
8.1 Schering Rights............................................................................... 28
8.2 Ex-U.S. Light Source.......................................................................... 29
8.3 Rights Retained by DUSA....................................................................... 29
8.4 Sublicensees and Affiliates................................................................... 29
8.5 Restrictions.................................................................................. 30
8.6 Marketing Plans............................................................................... 30
8.7 Marketing Materials........................................................................... 30
8.8 Right of First Discussion..................................................................... 31
8.9 Substitution.................................................................................. 32
ARTICLE 9 MANUFACTURE AND SUPPLY................................................................................ 34
9.1 Manufacturing Rights.......................................................................... 34
9.2 Supply........................................................................................ 34
9.3 Forecasts..................................................................................... 35
9.4 Orders........................................................................................ 35
9.5 Delivery...................................................................................... 36
9.6 Quality Guidelines............................................................................ 36
9.7 Collaboration Product Acceptance/Rejection.................................................... 38
9.8 Documentation................................................................................. 39
9.9 Schering Right of Audit and Inspection........................................................ 40
9.10 Suppliers..................................................................................... 41
9.11 Invoicing..................................................................................... 42
9.12 Shortage of Supply............................................................................ 42
9.13 Schering's [c.i.] ............................................................................ 44
9.14 Supply of Light Source........................................................................ 44
ARTICLE 10 COLLABORATION PRODUCT PAYMENTS TO DUSA............................................................... 45
10.1 Prices........................................................................................ 45
10.2 Commercial Sales.............................................................................. 45
10.3 Minimum Supply Prices......................................................................... 47
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10.4 Certain Quantities............................................................................ 48
10.5 Discounting................................................................................... 48
10.6 Payments...................................................................................... 48
10.7 Adjustment to Commercial Supply Price [c.i.].................................................. 49
10.8 Undue Hardship................................................................................ 49
ARTICLE 11 THIRD PARTY ROYALTIES................................................................................ 50
ARTICLE 12 PAYMENTS; BOOKS AND RECORDS.......................................................................... 50
12.1 Payment Method................................................................................ 50
12.2 Currency Conversion........................................................................... 50
12.3 Taxes......................................................................................... 50
12.4 Records; Inspection........................................................................... 51
ARTICLE 13 MARKETING EFFORTS.................................................................................... 52
13.1 Marketing Efforts............................................................................. 52
13.2 Failure to File MAA........................................................................... 54
13.3 Failure to Sell............................................................................... 54
13.4 Other......................................................................................... 55
ARTICLE 14 INTELLECTUAL PROPERTY................................................................................ 55
14.1 Licenses to Schering.......................................................................... 55
14.2 Ownership of Inventions....................................................................... 55
14.3 Patent Prosecution............................................................................ 55
14.4 Defense of Third Party Infringement Claims.................................................... 57
14.5 Enforcement................................................................................... 58
14.6 Third Party Rights............................................................................ 59
14.7 No Rights Beyond Collaboration Products....................................................... 59
14.8 Covenants..................................................................................... 59
14.9 Patent Marking................................................................................ 59
ARTICLE 15 TRADEMARKS........................................................................................... 59
15.1 Display....................................................................................... 59
15.2 License....................................................................................... 59
15.3 Registration.................................................................................. 60
15.4 Ownership..................................................................................... 60
15.5 Recordation................................................................................... 60
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15.6 Xxxx Infringement............................................................................. 60
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15.7 Approval of Representation of DUSA Marks...................................................... 60
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15.8 Termination................................................................................... 61
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ARTICLE 16 REPRESENTATIONS AND WARRANTIES....................................................................... 61
16.1 General Warranties............................................................................ 61
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16.2 Mutual Covenants of Exclusivity............................................................... 63
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16.3 Warranties Regarding Products................................................................. 63
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16.4 Notice........................................................................................ 64
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ARTICLE 17 CONFIDENTIALITY...................................................................................... 64
17.1 Confidential Information...................................................................... 64
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17.2 Permitted Disclosures......................................................................... 65
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17.3 Prior Non-Disclosure Agreements............................................................... 65
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ARTICLE 18 INDEMNIFICATION...................................................................................... 65
18.1 Indemnification of DUSA....................................................................... 65
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18.2 Indemnification of Schering................................................................... 66
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18.3 General Indemnification of DUSA............................................................... 66
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18.4 General Indemnification of Schering........................................................... 66
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18.5 Procedure..................................................................................... 66
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18.6 Insurance..................................................................................... 67
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ARTICLE 19 TERM AND TERMINATION................................................................................. 67
19.1 Term.......................................................................................... 67
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19.2 Termination for Cause......................................................................... 67
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19.3 Termination Upon Notice....................................................................... 69
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19.4 Effects of Expiration or Termination.......................................................... 69
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19.5 Survival...................................................................................... 71
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ARTICLE 20 MISCELLANEOUS........................................................................................ 72
20.1 Governing Law, Venue.......................................................................... 72
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20.2 Particular Disputes........................................................................... 72
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20.3 Force Majeure................................................................................. 73
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20.4 No Implied Waivers; Rights Cumulative......................................................... 73
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20.5 Independent Contractors....................................................................... 73
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20.6 Notices....................................................................................... 73
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20.7 Assignment.................................................................................... 74
20.8 Affiliate Assignment.......................................................................... 74
20.9 Modification.................................................................................. 74
20.10 Severability.................................................................................. 75
20.11 Publicity Review.............................................................................. 75
20.12 Counterparts.................................................................................. 75
20.13 Headings...................................................................................... 75
20.14 Export Laws................................................................................... 75
20.15 Entire Agreement.............................................................................. 75
EXHIBIT 1.4 AMINOLEVULINIC ACID HCL
EXHIBIT 1.17 DUSA PATENTS
EXHIBIT 1.21 U.S. STANDARD PACKAGING AND LABELING
EXHIBIT 1.38 INITIAL PRODUCT SPECIFICATIONS
EXHIBIT 4.1.1 INITIAL PRODUCT PLAN
EXHIBIT 8.1(b) REGIONS; KEY MARKETS
EXHIBIT 8.6 INITIAL MARKETING PLAN
EXHIBIT 9.3 SCHERING INITIAL FORECAST
EXHIBIT 9.7 INITIAL PRODUCT INSPECTION CRITERIA
EXHIBIT 14.3 CORE PATENTS
EXHIBIT 14.6 THIRD PARTY LICENSORS
EXHIBIT 15.3 REGISTRATION OF DUSA MARKS
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MARKETING, DEVELOPMENT AND SUPPLY AGREEMENT
This Marketing, Development and Supply Agreement (the "Agreement"),
entered into as of November 22, 1999 (the "Execution Date"), is made by and
between DUSA Pharmaceuticals, Inc., a New Jersey corporation, having offices at
00 Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000, XXX ("DUSA"), and Schering AG,
a German corporation, having offices at 00000 Xxxxxx, Xxxxxxx ("Schering").
BACKGROUND
X. XXXX is developing aminolevulinic acid HCl (Levulan(R), as further
defined below) photodynamic therapy and photodetection for the treatment and
detection of human diseases. Certain of the underlying technology was
in-licensed by DUSA from PARTEQ Research and Development Innovations.
B. Schering and DUSA desire to collaborate on the development and
commercialization of certain products utilizing Levulan(R) photodynamic therapy
and photodetection of dermatological indications in humans, all on the terms and
conditions set forth below.
X. XXXX is willing to grant to Schering, and Schering desires to
obtain, certain licenses with respect to the development and commercialization
of Collaboration Products (as defined below), and DUSA will keep the right to
manufacture and supply such products to Schering, all on the terms and
conditions set forth below.
D. In addition, DUSA and Schering have entered into a certain agreement
of even date herewith (the "Light Source Agreement") pursuant to which DUSA will
supply the light sources to be used with the Collaboration Products (the "Light
Sources") directly to physicians, all on the terms and conditions set forth in
the Light Source Agreement.
E. Concurrently with this Agreement, DUSA and Schering Berlin Venture
Corporation, an Affiliate (as defined below) of Schering have entered into a
Stock Purchase Agreement, pursuant to which DUSA will sell and issue to Schering
shares of DUSA Common Stock, on the terms and conditions set forth therein.
NOW THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the Parties
as follows:
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ARTICLE 1
DEFINITIONS
1.1 "Additional Collaboration Product" shall mean any Collaboration
Product that differs from the Initial Product or from any previously approved
Collaboration Product in indication and which requires new pivotal clinical
trials.
1.2 "Affiliate" shall mean any person, corporation, partnership, firm,
joint venture or other entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
DUSA or Schering, as the case may be . An entity shall be regarded as in control
of another entity for purposes of this definition if it owns or controls more
than fifty percent (50%) of the shares of the subject entity entitled to vote in
the election of directors (or, in the case of an entity that is not a
corporation, for the election of the corresponding managing authority) or
otherwise possesses the power to direct or cause the direction of the management
and policies of an entity, whether through the ownership of outstanding voting
shares, by contract, or otherwise. A "Controlled Affiliate" shall mean an entity
that is controlled by a Party to this Agreement.
1.3 "AK" shall mean actinic keratosis.
1.4 "ALA" shall mean 5-Aminolevulinic Acid HCl, as more particularly
described on Exhibit 1.4 hereto. It is understood that ALA shall not include any
prodrug form of the composition described in Exhibit 1.4.
1.5 "Applicator" shall mean (i) the Kerastick(TM) applicator being used
to apply the Collaboration Product, as defined in the Existing MAA, and/or (ii)
such other applicator (including derivatives of the Kerastick(TM) applicator),
in each case as is developed pursuant to the Development Program to administer
the Collaboration Product for uses within the Field.
1.6 "Collaboration Product" shall mean (i) the Initial Product; and
(ii) all formulations containing ALA but in each case solely to the extent that
same are developed in the course of performing the Development Program to be
marketed and sold within the Field. For clarification, a compound containing ALA
which is developed in the course of the Development Program to be marketed and
sold within the Field but which: (i) is for a different indication; (ii) and/or
consists of a different formulation than other Collaboration Products; and (iii)
which requires additional pivotal clinical trials for Marketing Approval,
constitutes a separate Collaboration Product. The term "Collaboration Product"
shall also include Additional Collaboration Products. Where applicable, the
Collaboration Product shall include the appropriate Applicator. As used herein
it is understood that "Collaboration Product" shall not include any light source
to be used with such Collaboration Product. This definition is further subject
to the provisions of Sections 3.4-3.6, 8.1(b), 13.2, and 13.3.
1.7 "CMC " shall mean the chemistry, manufacturing and control data
necessary for an investigational new drug application and related amendments or
supplements or a new drug
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application and related amendments or supplements to the FDA or any equivalent
application to the EMEA or any other regulatory authority of the applicable
Product Territory.
1.8 "Competing Product" shall mean any topical photodynamic therapy
product that is substantially identical to a Collaboration Product (including
both dosage form and active ingredient), is approved for the same indication(s)
as such Collaboration Product, and is legally marketed in any country in the
Territory by an entity other than Schering, its Affiliate or Sublicensee.
1.9 "Control" shall mean possession of the ability to grant a license
or sublicense as provided for herein without violating the terms of any
agreement or other arrangement with any third party.
1.10 "Cost of Goods" shall mean all costs for the Finished or
Collaboration Product calculated by using each Party's standard accounting
procedures, in each case consistently applied. Such costs shall include, but not
be limited to, the [c.i.] of [c.i. ]. Such costs shall exclude, without limiting
the generality hereof, (i) all costs and charges related to or occasioned by
[c.i.] not [c.i.] to be [c.i.] for [c.i.] of Collaboration Products; (ii) the
[c.i.] at such Party's facilities; (iii) [c.i.] of [c.i.] not related to
manufacturing of the Finished or Collaboration Product; (iv) allocation of
[c.i.]; such Party's [c.i.], whether or not [c.i.] is [c.i.] to the
manufacturing of any Collaboration Product; and (v) any [c.i.] associated with
[c.i.]; provided that the Cost of Goods in case DUSA manufactures the
Collaboration Products shall be [c.i.] to [c.i.] of the [c.i.] for such
manufacture by the previous third party manufacturer ([c.i.] and other related
manufacturing costs) Cost of Goods shall also include [c.i.] with respect to the
manufacture, sale or use of Collaboration Products [c.i.] in [c.i.] by the
respective other Party (it being understood that amounts paid to [c.i.] pursuant
to the [c.i.] shall [c.i.] within Cost of Goods.)
1.11 "Current Good Manufacturing Practices" or "cGMP" shall mean all
applicable standards relating to manufacturing practices for fine chemicals,
intermediates, bulk products, or finished pharmaceutical products: (i)
promulgated by any governmental body having jurisdiction over the manufacture of
Collaboration Products, in the form of laws or regulations; (ii) promulgated by
any governmental body having jurisdiction over the manufacture of Collaboration
Products in the form of guidance documents, which guidance documents are being
implemented within the pharmaceutical manufacturing industry for such
Collaboration Products; or (iii) which [c.i.] to be current, in each case as in
effect at the Execution Date and as amended, promulgated, or accepted from time
to time during the term of this Agreement.
1.12 "Data" shall mean any and all research data, clinical pharmacology
data, CMC data, preclinical data, clinical data and/or all submissions made in
association with an IND or NDA or other Marketing Approval Applications with
respect to Collaboration Products within the Field.
1.13 "Dermatological Disorders" shall mean all diseases and other
medical disorders of [c.i.], including without limitation, the following
diseases and disorders to the extent they manifest themselves primarily in
[c.i.]: [c.i.] and all other diseases of [c.i.] and/or [c.i.] that manifest
themselves [c.i.]. For clarification, Dermatological Disorders shall not include
any disease or medical disorder that manifests itself primarily in [c.i.] or any
other [c.i.] or any [c.i.] that does not
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primarily manifest itself in [c.i.]. It is understood that as used in the
Section 1.13, the term "disorder" of [c.i.] includes any naturally occurring
conditions of such systems (e.g., [c.i.]).
1.14 "Development Costs" shall mean the [c.i.] incurred by, or on
behalf of, either DUSA or Schering in conducting the Development Program
according to the Development Plan and Budget. These costs shall include [c.i.]
incurred by a Party or for its account which are [c.i.] as well as [c.i.] that
are [c.i.] to preclinical, clinical and CMC/Manufacturing studies and activities
conducted in accordance with the Development Plan and Budget. These costs shall
include, but not be limited to, the cost of [c.i.] of a Collaboration Product,
the cost of [c.i.], and [c.i.]and costs/related fees for [c.i.] for the purpose
of submission to a governmental authority to obtain and/or maintain Marketing
Approval of a Collaboration Product in the Territory. These costs shall also
include [c.i.] for [c.i.] by [c.i.] and provided that such [c.i.] is shown
[c.i.] on the balance sheet of [c.i.] in accordance with GAAP and [c.i.] the
same are used in connection with the Development Program and [c.i.] to the
Collaboration Product. These costs shall not include [c.i.] occurring from
operation units that are [c.i.] in the [c.i.] under the Development Program.
1.15 "Development Plan and Budget" shall mean the plan and budget for
the Development Program in effect from time to time, as established in
accordance with Article 3 below.
1.16 "Development Program" shall mean all activities with respect to
the research and development of products, other than the Initial Product, within
the Field as outlined in the Development Plan and Budget established pursuant to
Article 3 of this Agreement, which may be comprised of preclinical, clinical and
all other activities relating to the research and development of such products
and/or applications (including XXXx and Marketing Approvals) for government
approval to manufacture, market and distribute such products in the Territory in
the Field. Development Program includes, but is not limited to, the pre-clinical
development of such products (e.g., pre-clinical testing, pharmacokinetics,
toxicology, immunology and related documentary and medical writing), the
clinical development of such products (e.g., planning and execution of clinical
studies and related documentary and medical writing) and the CMC development for
the manufacture of such products (e.g., formulation, production, fill/finish,
sourcing of components, raw materials and packaging supplies, development of
regulatory methods and controls, including assays, quality assurance and
stability protocols and related CMC documentary writing). It is understood that
the Development Program may include such research and development activities
relating to light sources as established in the Development Plans and Budgets in
effect from time to time.
1.17 "DUSA Technology" shall mean DUSA Patents and DUSA Know-How.
1.17.1 "DUSA Know-How" shall mean confidential information,
tangible and intangible, and materials, including, but not limited to:
pharmaceutical, chemical and biochemical products; technical and non-technical
data and information, and/or the results of tests, assays, methods and
processes; and drawings, sketches, plans, diagrams, software, specifications
and/or other documents or materials containing said information and data; in
each case that is possessed by, or the property of, DUSA or its Controlled
Affiliates as of the Execution Date or discovered, developed or acquired by DUSA
or its Controlled Affiliates during the term of this Agreement, to the extent
such relates to the manufacture, sale or use of a
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Collaboration Product for purposes within the Field and to the extent that DUSA
or its Controlled Affiliates Control the same.
1.17.2 "DUSA Patents" shall mean all issued, unexpired patents
and all reissues, renewals, re-examinations and extensions thereof, and patent
applications therefor, and any divisions or continuations, in whole or in part,
thereof, which claim the manufacture, sale or use of a Collaboration Product
within the Field and that are Controlled by DUSA as of the Execution Date or
that come into the Control of DUSA or its Controlled Affiliates during the term
of this Agreement. DUSA Patents also includes a Supplementary Certificate of
Protection of a member state of the European Union or any similar protective
rights in any country. DUSA Patents shall not include any patent that has been
held invalid or unenforceable by a court or other agency of competent
jurisdiction or that has been admitted to be invalid or unenforceable through
re-issue, re-examination, disclaimer or otherwise; provided however, that if the
holding of a such court or agency is later reversed by a court or agency with
overriding authority, such patent shall be reinstated as a DUSA Patent. The DUSA
Patents existing as of the Execution Date are listed on Exhibit 1.17.
1.18 "EMEA" shall mean the European Medicines Evaluation Agency.
1.19 "Existing MAA" shall mean the DUSA MAA filed with the FDA on July
1, 1998.
1.20 "FDA" shall mean the U.S. Food and Drug Administration.
1.21 "Field" shall mean the topical administration to the external
epidermis or dermis of products containing ALA, for the photodynamic therapy,
and/or photodetection of, Dermatological Disorders in humans. The Field shall
also include other routes of administration, (e.g., systemic and other local
applications) as the Parties may agree from time to time of particular
Collaboration Products containing ALA for the photodynamic therapy and/or
photodetection of Dermatological Disorders in humans, as such routes of
administration apply to the particular Collaboration Product. The Field shall
exclude topical or other routes of administration of such products for
applications other than Dermatological Disorders.
1.22 "Finished Product" shall mean a single unit of Collaboration
Product meeting the applicable Specifications for sale within the U.S., with
such labeling, packaging and package inserts as is established pursuant to
Section 9.2.2 below.
1.23 "First Commercial Sale" shall mean, with respect to each
Collaboration Product in each country, the first bona fide commercial sale of
such Collaboration Product following Marketing Approval in such country by or
under authority of Schering, its Affiliates or Sublicensees;[c.i.] where such a
first commercial sale [c.i.] in [c.i.] (for clarification, the Parties
acknowledge that [c.i.] is [c.i.] in [c.i.]) and [c.i.] to [c.i.] for [c.i.],
then [c.i.] shall [c.i.] until [c.i.] has been [c.i.].
1.24 "Full Program Funding Period" shall mean the period starting with
the Execution Date, continuing during each calendar year for which a Development
Plan and Budget has been established in accordance with Section 3.1 below that
provides for Schering to fund at least
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US$3,000,000 per calendar year in Development Costs and DUSA to fund at least
US$1,500,000 per calendar year, or such lesser amounts as the Parties may
establish in accordance with Section 3.1, and in any calendar year thereafter
until such period [c.i.] and in the time remaining in any calendar year in which
the Full Program Funding Period [c.i.] in accordance with Article 3.
1.25 "GAAP" shall mean U.S. generally accepted accounting principles.
1.26 "Initial Product" shall mean the initial product that is the
subject of the Existing MAA as of the Execution Date.
1.27 "Kerastick Trademark" shall mean the "Kerastick" trademark, for
which DUSA has applied for registration in connection with the Collaboration
Products, or such other trademark that DUSA registers, and the Parties agree to
use, for the Collaboration Products in countries in which "Kerastick" is not
selected by the Parties for use.
1.28 "Levulan Trademark" shall mean the "Levulan" trademark that DUSA
has registered in connection with the Collaboration Products, or such other
trademark that DUSA registers and the Parties agree to use for the Collaboration
Products in countries in which "Levulan" is not selected by the Parties for use.
1.29 "Major Country" shall mean [c.i.] and [c.i.].
1.30 "Manufacturing Standards" shall mean, with respect to a particular
Collaboration Product, cGMP as established by the FDA, as such regulations and
guidance may be amended from time to time, together with such other standards as
are necessary to comply with the laws and regulations of other countries of the
applicable Product Territory, to the extent established pursuant to Section
9.6.2 below.
1.31 "Marketing Approval" shall mean, with respect to each country of
the Territory for a particular Collaboration Product, approval of the applicable
MAA filed in such country by the health regulatory authority in such country
that is the counterpart of the FDA. It is understood that Marketing Approval
does not include pricing or reimbursement approval.
1.32 "Marketing Approval Application" or "MAA" shall mean a New Drug
Application, Premarket Approval Application, or Biologics License Application,
respectively, as required under the United States Federal Food, Drug and
Cosmetics Act and the regulations promulgated thereunder, or a comparable filing
for Marketing Approval in a country, in each case with respect to a
Collaboration Product for use within the Field in the Territory.
1.33 "Net Sales" shall mean the total amount invoiced to third parties
in connection with sales of Collaboration Products by Schering or DUSA, as the
case may be, their Affiliates and their permitted Sublicensees, [c.i.] the
following [c.i.] and [c.i.]: (i) [c.i.]; (ii) [c.i.] and any other [c.i.] upon
the sale of a Collaboration Product; (iii) [c.i.] in the ordinary course of
business in connection with the sale of a Collaboration Product; (iv) [c.i.] in
the ordinary course of business in connection with the sale of a Collaboration
Product; (v) [c.i.] in the ordinary course of business in connection with the
sale of [c.i.] of such Collaboration Product; (vi) a [c.i.] for [c.i.] and (vii)
[c.i.], to the extent
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mutually agreed by the Parties. In the case of (i) and (ii) above, such amounts
shall be [c.i.] only [c.i.] the same are [c.i.] by [c.i.] on the sale to the
third-party purchaser; and in the case of (iii)-(v), such amounts shall be
[c.i.] only to [c.i.] the same are [c.i.] to the customer [c.i.] to the
customer. For the purpose of calculating a Party's Net Sales, the Parties
recognize that (x) a Party's customers may include persons in the chain of
commerce who enter into agreements with a Party as to price even though title to
the Collaboration Product does not pass directly from a Party to such customers,
and even though payment for such Collaboration Product is not made by such
customers directly to a Party and (y) in such cases [c.i.] by a Party to a
customer through a Third party (such as a wholesaler) [c.i.] by a Party [c.i.]
in order to calculate a Product's Net Sales. Any [c.i.] listed above which
[c.i.] by a Party shall be [c.i.] for the period in which the [c.i.] is made.
For the avoidance of doubt, Net Sales shall not include sales by Schering to its
Affiliates or Sublicensees for resale, provided that if Schering or DUSA sells a
Collaboration Product to an Affiliate or Sublicensee for resale, Net Sales shall
include the amounts invoiced by such Affiliate or Sublicensee to third parties
on the resale of such Collaboration Product. A "sale" shall also include a
transfer or other disposition for consideration other than cash, in which case
such consideration shall be valued at the fair market value thereof.
1.34 "PARTEQ License Agreement" shall mean the Amended and Restated
License Agreement between PARTEQ Research and Development Innovations, having
its principal place of business at Queens University in Xxxxxxxx, Xxxxxxx,
Xxxxxx ("PARTEQ") and DUSA, dated March 11, 1998, as amended and supplemented.
1.35 "Party or Parties" shall mean DUSA and Schering or DUSA or
Schering, as indicated by the context.
1.36 "Product Territory" for a particular Collaboration Product shall
have the meaning defined in Section 8.1(b). It is understood that the Product
Territory for a particular Collaboration Product shall not include the Abandoned
Regions (as defined in Section 8.1(b) or Article 13 below) for such
Collaboration Product.
1.37 "Region" and "Key Market" shall each have the meanings defined in
Section 8.1(b).
1.38 "Specifications" shall mean, with respect to the Initial Product,
and with respect to each subsequent Collaboration Product, those specifications
as are required by the applicable Marketing Approval for the applicable Product
Territory, or, for the purposes of Section 9.7 below, those specifications set
forth in Exhibit 1.38 for the Initial Product and as supplemented at such later
point in time as agreed by the Parties for subsequent Collaboration Products.
1.39 "Sublicensee" shall mean, with respect to a particular
Collaboration Product, a non-Affiliate third party to whom Schering or DUSA has
granted directly or indirectly a right to distribute such Collaboration Product,
provided that such third party is responsible for some or all of the marketing
and promotion of such Collaboration Product within its region of the applicable
Product Territory.
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1.40 "Term of the Development Program" shall mean the period from
January 1, 2000 until this Agreement is terminated or the Term of the
Development Program is ended in accordance with Section 3.6 below.
1.41 "Territory" shall mean all countries world-world excluding Canada.
1.42 "United States or U.S." shall mean the United States of America,
including its possessions and territories.
ARTICLE 2
STEERING AND DEVELOPMENT COMMITTEES
2.1 Steering Committee. Schering and DUSA shall establish a steering
committee to oversee, review and coordinate the research and development of
Collaboration Products for applications within the Field throughout the
Territory and the implementation thereof ("Steering Committee"). The Steering
Committee will review and approve the Development Plan and Budget, modifications
thereto and will make the final decision regarding an early termination of a
clinical study (other than in accordance with the protocol), and it will make
those specific decisions expressly designated to be made by the Steering
Committee pursuant to Section 3.1 below.
2.1.1 Membership. The Steering Committee shall be comprised of
an equal number of representatives from each of Schering and DUSA, selected by
such Party. The exact number of such representatives shall be as the Parties
agree, with each Party designating at least one (1) representative who shall be
at the Vice President level or European equivalent or above. Subject to the
foregoing provisions of this Section, DUSA and Schering may replace its Steering
Committee representatives at any time, with prior written notice to the other
Party. Steering Committee members may be employees of an Affiliate.
2.1.2 Steering Committee Meetings. During the performance of
the Development Program, the Steering Committee shall meet semi-annually, or as
otherwise agreed by the Steering Committee Members. Unless the Steering
Committee Members agree otherwise, at least one (1) meeting of the Steering
Committee per full calendar year will be held at each Party's facilities. At its
meetings, the Steering Committee will (i) formulate and review the Development
Program objectives, (ii) monitor the progress of the Development Program toward
the respective objectives, and (iii) review and approve the Development Plan and
Budget, pursuant to Article 3 below. With the consent of the Steering Committee
Members, other representatives of DUSA or Schering may attend Steering Committee
or subcommittee meetings as non-voting observers. Each Party shall bear its own
personnel and travel costs and expenses relating to Steering Committee meetings.
2.1.3 Decision Making. Except as set forth in this Section
2.1.3, decisions of the Steering Committee shall be made by unanimous approval
of all members present; provided that at least one representative of each Party
is present and so approves. In the event the required approval for a decision
cannot be reached within 30 days and all the members of each Party take the same
opposing positions in a matter of importance, the matter shall be submitted to a
senior executive
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officer from each of DUSA and Schering, who shall meet and discuss in good faith
to resolve such matter; provided, however, that if such meeting and good faith
discussions do not result in mutual agreement, [c.i.] or [c.i.] shall have the
[c.i.] the [c.i.] with respect to those matters set forth in Section 3.2.2.
Non-attending members of the Steering Committee may represent themselves by
proxies in any decision.
2.2 Development Committee. Schering and DUSA shall establish a
development committee to plan, implement and coordinate the conduct of the
Development Program at the operational level ("Development Committee").
2.2.1 Membership. The Development Committee shall be comprised
of an equal number of representatives from each of Schering and DUSA, selected
by such Party. The exact number of such representatives shall be as the Parties
may agree. Each Party shall at all times have at least one (1) representative on
the Development Committee at the senior executive level. Subject to the
foregoing provisions of this Section 2.2.1, DUSA and Schering may replace its
respective Development Committee representatives at any time, with prior written
notice to the other Party. Development Committee members may be employees of an
Affiliate.
2.2.2 Development Committee Meetings. During the Term of the
Development Program, the Development Committee shall meet quarterly, or as
otherwise agreed by the Parties, at such locations in the U.S. as the Parties
agree and once per year in Germany. At its meetings, the Development Committee
will (i) formulate the Development Plans and Budgets, pursuant to Section 3.1 of
this Agreement for approval by the Steering Committee, (ii) propose to the
Steering Committee indications to be pursued and studies to be conducted, (iii)
develop protocols for studies for approval by the Steering Committee; (iv)
interact with the Steering Committee on a regular basis to keep it appraised of
the progress of the Development Program and submit for its approval any changes
to the Development Plan and Budget; and (v) undertake and/or approve such other
matters as are provided for the Development Committee under this Agreement. With
the consent of the Parties, other representatives of DUSA or Schering may attend
Development Committee or subcommittee meetings as non-voting observers. DUSA's
lead representative shall chair meetings of the Development Committee and shall
be responsible for preparing the meeting agendas and minutes. Such minutes shall
be distributed in draft form not later than thirty (30) days following each
meeting and shall be deemed accepted and effective unless an authorized
representative of Schering has objected to the same within thirty (30) days of
Schering's receipt of such minutes; final minutes shall be promptly distributed
to the Parties. Each Party shall bear its own personnel and travel costs and
expenses relating to Development Committee meetings.
2.2.3 Decision Making. Decisions of the Development Committee
shall be made by unanimous approval of the members present, provided that at
least one (1) representative of each Party is present and so approves. In the
event that a deadlock arises within the Development Committee, the dispute shall
be referred to the Steering Committee.
2.3 No Committee Amendments; Authority. Notwithstanding the creation of
the Steering Committee, Development Committee or any subcommittee thereof, each
Party to this Agreement shall retain the rights, powers, and discretion granted
to it hereunder, and neither the Steering
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Committee, Development Committee nor any subcommittee thereof shall be delegated
or vested with any such rights, powers, or discretion unless such delegation or
vesting is expressly provided for herein or the Parties expressly so agree in
writing. Neither the Steering Committee, Development Committee nor any
subcommittee shall have the power to amend or modify this Agreement, which may
be amended or modified only as provided in Section 20.9 "Modification." It is
understood and agreed that issues to be formally decided by the Development
Committee are only those specific issues that are expressly provided in this
Agreement to be decided by the Development Committee.
ARTICLE 3
DEVELOPMENT PLANS AND BUDGETS
3.1 Development Plans and Budgets.
3.1.1 Development Plans and Budgets. Within [c.i.] of the
Execution Date, and by [c.i.] of each year thereafter during the Term of the
Development Program, DUSA shall submit to the Development Committee a good faith
proposed plan and budget for the activities to be undertaken as part of the
Development Program in the next succeeding calendar year. After reviewing and
considering such proposal, the Development Committee shall prepare a reasonably
detailed Development Plan and Budget pursuant to which the Development Program
will be carried out. For the purpose of facilitating the long-term planning of
goals for the development of the Collaboration Products, the Development
Committee shall also develop a reasonably detailed [c.i.] development plan for
each Collaboration Product included in the Development Program (the "[c.i.]
Plan").
3.1.2 Annual Review. Within [c.i.] from the Execution Date,
and by [c.i.] of 2000 and of each year thereafter during the Term of the
Development Program, the Development Committee shall submit to the Steering
Committee the proposed plan and budget established under Section 3.1.1 above for
the following calendar year. The Steering Committee shall review such proposal
[c.i.] and shall establish and approve no later than [c.i.] and [c.i.] of
subsequent years the final Development Plan and Budget for the next succeeding
calendar year.
3.1.3 Periodic Reviews. The Development Committee shall review
the Development Plan and Budget on an ongoing basis, and may propose changes
thereto; provided, however, the Development Plan and Budget in effect for a year
shall not be modified except as approved by the Steering Committee.
3.1.4 Development Priorities. It is the intent of the Parties
to develop under the Development Program multiple Collaboration Products and
indications of such Collaboration Products within the Field, giving due
consideration to the priorities of both Schering and DUSA and to balance those
priorities so as to mutually agree upon the priorities of particular
Collaboration Products and indications to be collaboratively developed under the
Development Program.
3.2 Full Program Funding Period. It is understood that for the
calendar years 2000 and 2001, Schering has committed that it will fund US$3
million, and DUSA has
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committed that it will fund US$1.5 million, per calendar year in Development
Costs (such amounts being referred to as the respective "Full Funding
Commitment" of each Party) pursuant to the Development Plan and Budget, as
provided in Section 6.1.1 below. For subsequent calendar years, it is understood
that during the Term of the Development Program the funding level for the
Development Program will be as mutually agreed by the Parties. The Full Program
Funding Period shall [c.i.] as [c.i.] each Party [c.i.] to [c.i.] Full Funding
Commitment for the Development Costs as set forth in the applicable Development
Plan and Budget. If at the time during a calendar year when the Parties discuss
the Development Plan and Budget for the following year (starting with the
Development Plan and Budget for the year 2002) either Party [c.i.] its
respective Full Funding Commitment for funding of Development Costs pursuant to
the Development Plan and Budget, then [c.i.] may [c.i.], by so notifying the
[c.i.] in writing; provided, however, if [c.i.] has [c.i.], [c.i.] to [c.i.]
with [c.i.], in which case the Parties [c.i.] the [c.i.]. Notwithstanding the
foregoing, if the Parties, by mutual agreement, set a total funding level of
less than US$ 4.5 million for a calendar year ([c.i.]) and agree on the
Development Plan and Budget for that funding level, then the [c.i.] will [c.i.].
3.2.1 Budget Agreement. Provided that the Development Committee and the
Steering Committee are able to establish and approve a Development Plan and
Budget for the upcoming year on or before [c.i.] of any particular year
(excluding 1999), or a dispute arose which was resolved thereafter by the Chief
Executive Officer of DUSA and senior executive officer designated by Schering in
accordance with Section 2.1.3 above, development priorities shall be in
accordance with such Development Plan and Budget and Section 3.1.4 above.
3.2.2 Budget Disagreement. Notwithstanding Section 3.1.4 above, if
[c.i.] the Development Committee and the Steering Committee are unable to
establish and approve a Development Plan and Budget for the upcoming year on or
before [c.i.] of any particular year (excluding 1999) and thereafter the Chief
Executive Officer of DUSA and senior executive officer designated by Schering
are unable to resolve such dispute in accordance with Section 2.1.3 above, then
the following shall apply:
(a) Schering shall have the right to establish the priority of
Collaboration Product indications and the projects to be conducted pursuant to
the Development Program with respect to the amount of Development Costs funded
by Schering. It is understood that this right of Schering shall not be deemed to
limit Section 4.1.2(a) below.
(b) DUSA shall have the right to establish the priority of
Collaboration Product indications and the projects to be conducted pursuant to
the Development Program with respect to the amount of Development Costs funded
by DUSA.
(c) Notwithstanding the foregoing paragraphs, subject to review and
approval by the Development Committee, DUSA shall have the right to require that
in each Development Plan and Budget an amount [c.i.] of Development Costs funded
by the Parties pursuant to Section 6.1 below be expended towards Collaboration
Products that are subject of clinical trials, studies and activities that are at
an earlier stage of development than a Phase III clinical trial, including
exploratory studies and investigator-sponsored studies.
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3.2.3 Development [c.i.]. DUSA agrees that neither DUSA nor
its Controlled Affiliates shall [c.i.] on any [c.i.] during [c.i.] other than:
(i) pursuant to the Development Program; (ii) with respect to [c.i.]; or (iii)
in the event [c.i.] by the Parties.
3.3 Below Full Program Funding. If at the time during a calendar year
when the Parties discuss the Development Plan and Budget for the following year
that will amount to less than US$ 4.5 million, and the Parties are unable to
agree on a Development Plan and Budget of US$ 4.5 million, then the following
provisions will apply:
3.3.1 [c.i.]:
(a) Schering shall have the right to establish the priority of
Collaboration Product indications and the projects to be conducted pursuant to
the Development Program with respect to the Development Costs funded by
Schering. It is understood that this right of Schering shall not be deemed to
limit Section 4.1.2(a) below.
(b) DUSA shall have the right to establish the priority of
Collaboration Product indications and the projects to be conducted pursuant to
the Development Program with respect to the Development Costs funded by DUSA.
(c) Notwithstanding the foregoing paragraphs, subject to review and
approval by the Development Committee, DUSA shall have the right to require that
in each Development Plan and Budget an amount [c.i.] of Development Costs funded
by the Parties pursuant to Section 6.1 below be expended towards Collaboration
Products that are subject of clinical trials, studies and activities that are at
an earlier stage of development than a Phase III clinical trial, including
exploratory studies and investigator-sponsored studies.
3.3.2 Alternatively, either Party may [c.i.], by so notifying
the other Party in writing. If such notice is given, then DUSA [c.i.]
development projects for Additional Collaboration Products to Schering for
inclusion in the Development Plan and Budget pursuant to Section 3.4. Should
Schering agree to include such development projects for Additional Collaboration
Products in the Development Plan and Budget pursuant to Section 3.4 such that
the Parties [c.i.] their respective Full Funding Commitment or agree on a lesser
amount, then [c.i.] shall [c.i.] during the applicable calendar year
notwithstanding that the foregoing notice under this Section was given, and
[c.i.] DUSA shall [c.i.] any products or Collaboration Products, [c.i.] pursuant
to the Development Program. Should Schering not agree to fund its respective
Full Funding Commitment or such lesser amount as the Parties agree on, then
[c.i.] shall [c.i.], and either [c.i.] or [c.i.] will [c.i.], as described
[c.i.]
3.4 Additional Projects. Not more than [c.i.] per calendar year during
the Tail Period (as defined below), DUSA [c.i.] to include in the Development
Program up to [c.i.] development projects for Additional Collaboration Products
within the Field not yet within, or proposed for, the Development Program for
which DUSA has [c.i.] relating to such Additional Collaboration Products
(including [c.i.] from independent investigators and/or scientific
presentations/publications) together with a proposed good faith budget to
develop such Additional Collaboration Products pursuant to the
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Development Program (each an "Additional Collaboration Product Proposal"). Such
Additional Collaboration Product Proposal shall be addressed to Schering's
representatives on the Development Committee.
3.4.1 If Schering is interested in including any or all of
such development projects for Additional Collaboration Products within the
Development Program, Schering shall notify DUSA in writing [c.i.] after
receiving such Additional Collaboration Product Proposal, specifying the
development projects for Additional Collaboration Products in which Schering is
so interested. Upon receipt of Schering's notice of interest in an Additional
Collaboration Product Proposal, the Parties shall discuss in good faith a budget
for such development project for an Additional Collaboration Product, and if the
Parties so agree, the resulting budget shall be included within the Development
Plan and Budget for such calendar year.
3.4.2 If Schering does not notify DUSA [c.i.] days after
receiving an Additional Collaboration Product Proposal that Schering is
interested in a particular Additional Collaboration Product identified in the
Additional Collaboration Product Proposal, or (ii) Schering does not agree to
include a particular development project for an Additional Collaboration Product
in the Development Plan and Budget for such Additional Collaboration Product
[c.i.] thereafter, then such Additional Collaboration Product shall be deemed a
"Rejected Product". Provided, however, that development projects for Additional
Collaboration Products which are subject to an Additional Collaboration Product
Proposal or which have not been presented to either the Development Committee or
to Schering shall not be deemed Rejected Products [c.i.] Schering is [c.i.],
regardless of whether or not Schering accepts all of the development projects
for Additional Collaboration Products pursuant to the Additional Collaboration
Product Proposal.
3.4.3 It is understood by the Parties that DUSA's obligations
under this Section 3.4 shall terminate at the end of the Tail Period.
3.5 Tail Period. During the period, if any, succeeding [c.i.] for
which period Schering has [c.i.] the development of one Collaboration Product
for [c.i.] which is expected to [c.i.] of such Collaboration Product for [c.i.]
with a [c.i.] than that of previous Collaboration Products (the "Tail Period"),
the following shall apply:
(a) [c.i.] in accordance with Section 3.4 above, DUSA [c.i.]
not more than [c.i.] new development projects for Additional Collaboration
Products in the Additional Collaboration Product Proposal to Schering for
inclusion in the budget for the subsequent calendar year, and following
Schering's receipt of such, the procedures and provisions of Sections 3.4 above
shall apply. If Schering agrees to include [c.i.] development projects for
Additional Collaboration Products from the Additional Collaboration Product
Proposal in the Development Program such that [c.i.] its [c.i.] (unless the
Parties mutually agree on [c.i.]), [c.i.] will be [c.i.]. Those development
projects from the most recent Additional Collaboration Product Proposal which
Schering did reject shall not be considered Rejected Products [c.i.] Schering is
[c.i.]. However, previously Rejected Products shall continue as such, and in the
case that any Rejected Product is the subject of an agreement between DUSA and a
third party, DUSA's obligations with respect to that Rejected Product under this
Agreement shall be subject to that other agreement.
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(b) Notwithstanding any other provisions of this Article 3,
DUSA shall be free to develop and commercialize any Rejected Products (by itself
or through others) without further obligation to Schering. Such Rejected
Products [c.i.] to funded Collaboration Products in terms of [c.i.] and [c.i.].
The Parties agree that the intent of the immediately preceding sentence is to
[c.i.] DUSA from [c.i.] Rejected Products for [c.i.] which Schering [c.i.] could
have [c.i.] in the applicable Product Territory with Collaboration Products
marketed and sold by Schering.
(c) Any disputes regarding this Section 3.5 shall be governed
by Section 20.2.1 below.
3.6 Wind-Down Period. Upon the end of the Tail Period or [c.i.] (if
there is no Tail Period), the following shall apply:
(a) The Development Program shall continue for the
Collaboration Products for which human clinical trials were being conducted
under the last approved Development Plan and Budget, until completion of the
then-current Phase of development (i.e., Phase I, Phase II or Phase III, as
applicable) solely to the extent such Phase of development was authorized
pursuant to a Development Plan and Budget (as the same may be extended as set
forth below in this Section 3.6(a)); provided that a clinical trial can always
be discontinued for drug safety reasons or by mutual agreement of the Parties;
and the Parties shall continue to be obligated to fund the Development Costs of
such activities in the ratio of one-third (1/3) for DUSA and two-thirds (2/3)
for Schering (the "Wind-Down Period"). In the event that a Development Plan and
Budget remains in effect for such activities, such reimbursement shall be in
accordance with such Development Plan and Budget and Article 6 below. In the
event that the Development Plan and Budget for such activities does not cover
the full period in which such activities are to be concluded, then the last
Development Plan and Budget shall be deemed extended through the completion of
the respective Phase of development for each such Collaboration Product at the
same quarterly funding level as was allocated to such Collaboration Product in
such Development Plan and Budget or at such level as is necessary to fund such
applicable Phase, and with the same percentage of the total Development Costs
allocated to be incurred by DUSA and Schering, as each Party had been allocated
in such prior Development Plan and Budget.
(b) Schering shall not have rights to market under this
Agreement any products funded by the Development Program for which, by the end
of the Term of the Development Program, an MAA has not been filed pursuant to
the Development Program, and no such products shall be deemed Collaboration
Products for purposes of this Agreement.
(c) The end of the Wind-Down Period shall constitute the
termination of the Development Program.
3.7 Funding Limit Notwithstanding the foregoing, it is understood that
Schering's obligation to fund the Development Program is subject to and limited
by Section 6.1.2 below and in any event DUSA shall be obligated to fund the
amount of [c.i.] in any calendar year, except as otherwise mutually agreed.
Further, in no event will DUSA be obligated to incur in any calendar year more
than US$1.5 million in Development Costs that are not reimbursed by Schering
under
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Sections 6.1 and 6.2 below; nor shall Schering be obligated to incur or
reimburse in any calendar year more than US$3 million in Development Costs,
except by mutual agreement of the Parties.
ARTICLE 4
DEVELOPMENT PROGRAM
4.1 Product Development
4.1.1 Initial Product. With respect to the Initial Product,
the Parties shall complete the following development activities:
(a) U.S. Development. Any additional development efforts
and regulatory activities required by the FDA to obtain or to maintain Marketing
Approval by the FDA will be performed by DUSA [c.i.]. The Parties acknowledge
and agree that these activities as of the Execution Date are those specified in
that certain letter dated 27 June 1999 to DUSA from the FDA (as the same may be
modified by agreement between DUSA and the FDA) and in the Initial Product Plan
attached hereto as Exhibit 4.1.1.
(b) Territory Outside U.S. All preclinical and clinical
development and regulatory activities required to obtain Marketing Approval for
countries of the applicable Product Territory outside the U.S. shall be
performed by Schering [c.i.]; provided, however, that DUSA shall be responsible
for preparing additional data required for the counterpart in any country of the
CMC Section of an NDA in the United States, to the extent specifically required
by the applicable health regulatory agency or otherwise reasonably requested by
Schering, and Schering agrees [c.i.] DUSA [c.i.] towards [c.i.] of preparing
such additional Data (i.e., in addition to [c.i.] to DUSA under Article 6
below).
4.1.2 Future Collaboration Products. With respect to the
worldwide development of Collaboration Products other than the Initial Product,
the following shall apply:
(a) All activities pursuant to the Development Program
shall be undertaken by DUSA, itself or through subcontractors, provided,
however, all activities pursuant to the Development Program outside of the U.S.
shall be undertaken by Schering itself or through subcontractors unless the
Parties otherwise agree. All Phase I and Phase II studies will take place in the
U.S., but Phase III studies may involve [c.i.] of patients outside of the U.S.,
unless otherwise required by regulatory authorities for a particular Product
Territory or unless otherwise agreed by the Parties. For the avoidance of doubt,
any development activities with respect to Collaboration Products performed by
Schering outside of the United States that are necessary in order to obtain
Marketing Approval in any ex-US part of the Product Territory, and are in
addition to those Phase I, Phase II and Phase III studies referred to above,
shall be considered part of the Development Program and presented to the
Development Committee for approval pursuant to Section 3.1.1; provided, however,
that [c.i.] shall be [c.i.] pursuant to [c.i.].
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(b) Schering shall take the lead in preparing all XXXx
for Collaboration Products in countries of the applicable Product Territory
other than the United States, in accordance with Section 4.3 below; provided
that such activities shall [c.i.] under the Development Program, but, for the
avoidance of doubt, shall nevertheless be considered part of the Development
Program.
4.1.3 Diligence. During the Term of the Development Program:
(a) Each Party shall proceed diligently to perform the
work allocated to such Party in the Development Plan and Budget, including,
without limitation, by using diligent efforts to allocate such resources to the
Development Program as required under the Development Plan and Budget, and by
using personnel with sufficient skills and experience, together with sufficient
equipment and facilities to carry out its obligations under the Development
Program and to accomplish the objectives of the Development Program in an
expeditious manner;
(b) Each Party shall conduct those activities allocated
to such Party under the Development Program in compliance in all material
respects with all requirements of applicable laws, rules and regulations of the
United States, and all other requirements of any good laboratory and clinical
practices and cGMP applicable under the laws and regulations of the country
where such activities are conducted, to attempt to achieve its objectives
efficiently and expeditiously; and
(c) Each Party shall keep the Development Committee
fully informed as to the progress and results of those portions of the
Development Program conducted by such Party.
(d) The activities performed pursuant to the Development
Program, unless otherwise [c.i.], shall be performed in a manner consistent with
internationally accepted standards such as the standards agreed to by the
International Conference on Harmonization ("ICH") or regulatory standards of
EMEA in order to facilitate the preparation and approval of XXXx for
Collaboration Products outside of the U.S. Any incremental increase in
Development Costs over and above international standards or ICH standards on a
per product basis specifically attributable to this provision shall be [c.i.].
(e) Each Party agrees to provide the other Party with a
copy of all material correspondence between such Party and the FDA concerning
the development of the Initial Product and all subsequent Collaboration
Products.
4.2 Development Program Funding. Monies contributed by the Parties to
fund the Development Program shall be expended by the Parties in accordance with
the Development Plan and Budget.
4.3 Regulatory Matters
4.3.1 XXXx.
(a) It is understood that the Existing MAA has been
filed in DUSA's name, and shall continue to be held in the name of DUSA.
Following FDA approval, promptly upon
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request by Schering, the Parties shall [c.i.] under which DUSA [c.i.] to [c.i.]
regarding the Existing MAA and the resulting Marketing Approval. All other XXXx
and Marketing Approvals for Collaboration Products other than the Initial
Product or outside the U.S. shall be as set forth in paragraphs (b)-(e) below
(it being understood that paragraphs (b)-(e) below shall not apply to the
Initial Product in the United States).
(b) Responsibility for preparing and filing XXXx shall
be as follows:
(i) With respect to countries other than the U.S.,
Schering shall be responsible for the preparation and filing of XXXx and related
amendments and supplements for Collaboration Products for purposes within the
Field in each such country in the applicable Product Territory up to and
including Marketing Approval (subject to Section 13.2). All such activities with
respect to XXXx of Collaboration Products within the Field in the applicable
Product Territory shall be done in full consultation with the Development
Committee. The Party manufacturing Collaboration Products in the U.S. shall also
obtain any export approvals required by the FDA to export such Collaboration
Products to other countries of the applicable Product Territory. With respect to
the Initial Product, DUSA shall provide Schering with a copy of Data, in English
and in electronic form, in each case if so available, as is necessary to file an
MAA in countries outside the United States.
(ii) With respect to the U.S., DUSA shall be
responsible as part of the Development Program for the preparation and filing of
INDs and XXXx and related amendments and supplements with the FDA.
(c) XXXx and Marketing Approvals in each country in the
applicable Product Territory shall be filed jointly in the names of both DUSA
and Schering, except that the MAA or Marketing Approval shall be only in the
name of Schering (or its designated Affiliate or Sublicensee) in any country in
the applicable Product Territory to the extent that it is legally required for
Schering to be the sole owner thereof. In addition, an MAA or Marketing Approval
shall be only in the name of Schering (or its designated Affiliate or
Sublicensee) in any country in the applicable Product Territory where the
Parties otherwise mutually agree. In any country of the applicable Product
Territory where the MAA or Marketing Approval is to be only in Schering's name
(or that of its Affiliate or Sublicensee), then subject to and upon the terms
and conditions contained in this Agreement, in connection with and in
furtherance of Schering's grant of rights as set forth in Article 8, DUSA shall
transfer and assign to, or give Schering the right to file in the name of
Schering (or its designated Affiliate or Sublicensee), such MAA or Marketing
Approval for the Collaboration Product in such country. DUSA shall promptly
execute, acknowledge and deliver such further instruments, and shall do such
other acts which may be necessary to effectuate the filing of such XXXx or
Marketing Approvals in each such country in the Territory.
(d) Schering shall, at DUSA's request and option, as
promptly as reasonably practicable either provide DUSA with complete copies of
any MAA or Marketing Approval filed by or under authority of Schering, including
without limitation those held in the name of Schering (or that of its Affiliate
or Sublicensee), or make the same available for inspection and/or copying by
DUSA or its designee at a single location in the U.S. and/or Germany. Further,
Schering
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shall promptly provide DUSA or its designees with the relevant portions of (and
make available for copying by DUSA or its designees), and the right to
cross-reference, any MAA or Marketing Approval held in the name of Schering (or
that of its Affiliate or Sublicensee) reasonably necessary or useful to enable
DUSA or its designees to market products other than Collaboration Products
within the Field in the applicable Product Territory, and Schering shall
execute, acknowledge and deliver such further instruments, and shall do all such
other acts, all as promptly as possible, which may be necessary or appropriate
to effectuate such right in each such country and to otherwise make fully
available to DUSA and its designees the benefits of such XXXx or Marketing
Approvals for purposes of exercising any right not exclusively granted to
Schering hereunder, upon the request of DUSA. In the event that any XXXx or
Marketing Approvals are in the name of Schering (or that of its Affiliate or
Sublicensee), Schering shall ensure that all such filings and registrations are
assigned to DUSA [c.i.] after any termination of Schering's rights under this
Agreement with respect to such Collaboration Product in such country pursuant to
Sections 8.1(b), 13.2, 13.3 and Article 19. With respect to any MAA or Marketing
Approval held in the name of a Sublicensee of Schering, Schering shall cause
such Sublicensee to provide DUSA with a letter of authorization for the
foregoing, in form and substance reasonably acceptable to DUSA, simultaneously
with the granting of a distribution right by Schering to such Sublicensee.
(e) Schering agrees to keep DUSA informed as to material
plans of the regulatory strategy and developments with respect to XXXx and
Marketing Approvals, and any related applications for pricing and/or
reimbursement approvals, filed by or under authority of Schering hereunder.
Without limiting the foregoing, Schering agrees to promptly notify DUSA in the
event a regulatory agency in any country requests a meeting with respect to a
Collaboration Product or in the event Schering or its designee plans to request
such a meeting, and upon request by DUSA in either such event, Schering agrees
to use reasonable efforts (given the demands of the regulatory authority) to
schedule such meeting so that DUSA or its representative may attend. All
material communications with such regulatory authority by either Party with
respect to an MAA within the Territory shall be approved in writing by the other
Party, and such Party shall provide to the other Party copies of all documents
sent to or received from such regulatory authority regarding such XXXx, together
with English translations thereof, if such translations exist or if such
translations do not exist, with English summaries thereof.
4.3.2 Reporting Adverse Drug Reactions/Experiences. Promptly
following execution of this Agreement the Parties will prepare a standard
operating procedure governing the collection, investigation, reporting, and
exchange of information concerning adverse drug reactions, Collaboration Product
quality and Collaboration Product complaints, sufficient to permit each Party to
comply with its legal obligations. The standard operating procedure will be
promptly updated if required by changes in legal requirements. Schering shall be
responsible for reporting all adverse drug reactions/experiences to the
appropriate regulatory authorities in the countries in which such Collaboration
Product is being developed or commercialized, in accordance with the appropriate
laws and regulations of the relevant countries and authorities. Schering shall
ensure that its Affiliates and Sublicensees comply with such reporting
obligations. These reporting obligations shall apply to non-serious adverse
events as well, which shall mean adverse events occurring from product overdose
or from product withdrawal, as well as any toxicity, sensitivity, failure of
expected pharmacological action, or laboratory abnormality which is, or is
thought by the reporter, to be
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serious or associated with relevant clinical signs or symptoms. Each Party will
designate a regulatory affairs liaison to be responsible for communicating with
the other Party regarding the reporting of adverse drug reactions/experiences.
In addition to the above, DUSA shall keep Schering informed about any adverse
drug reactions DUSA experiences or is informed about regarding the use of a
Collaboration Product in the Field and outside the applicable Product Territory.
4.3.3 Protocols. All protocols for clinical trials within the
Field to be conducted for a Collaboration Product in the applicable Product
Territory shall be subject to the approval of the Development Committee.
4.4 Step-In Rights. Without prejudice to any other remedies available
under this Agreement or at law, if a Party (the "Defaulting Party") materially
fails to carry out reasonable Development Program activities allocated to it
under this Agreement in accordance with the time lines and other conditions
allocated to it under the Development Plan and Budget and this Agreement
generally, the other Party (the "Other Party") may, after [c.i.] prior written
notice to the Defaulting Party, undertake that particular task ("Work") and
complete it at its own expense, subject to the reimbursement set forth below, if
the Defaulting Party has not at such time begun to carry out such Work in a
manner reasonably likely to cure its default. The Other Party shall be entitled
to [c.i.] cooperation and assistance from the Defaulting Party to accommodate
its efforts if necessary to permit the exercise by the Other Party of its rights
under this Section 4.4. All costs [c.i.] by the Other Party in carrying out such
Work [c.i.] by the Defaulting Party [c.i.], or may, at the Other Party's option,
[c.i.] any [c.i.] to the Defaulting Party under this Agreement; provided that
[c.i.] shall [c.i.] of the amount budgeted for such activities under the
Development Plan and Budget then in effect.
ARTICLE 5
RECORD KEEPING; PUBLICATION
5.1 Reports and Records
5.1.1 Records. DUSA and Schering shall maintain records of the
Development Program (or cause such records to be maintained) in sufficient
detail and in good scientific manner as will properly reflect all work done and
results achieved in the performance of the Development Program (including all
data substantially in the form required under any applicable governmental
regulations necessary for obtaining Marketing Approvals). Each Party shall allow
the other to have reasonable access to all records, materials and Data generated
by or on behalf of such Party with respect to each Collaboration Product within
the Field at reasonable times and in a reasonable manner.
5.1.2 Reports. Each Party shall periodically provide the
Development Committee with a written report summarizing the progress of the
Development Program performed by such Party with respect to each Collaboration
Product during the preceding calendar quarter. Unless otherwise agreed, such
reports shall be due [c.i.] prior to the next succeeding meeting of the
Development Committee.
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5.2 Review of Publications. As soon as is practicable prior to the oral
public disclosure, and prior to the submission to any outside person for
publication of a manuscript describing any scientific data resulting from the
Development Program, in each case to the extent the contents of the oral
disclosure or manuscript have not been previously disclosed pursuant to this
Section 5.2 before such proposed disclosure, DUSA or Schering, as the case may
be, shall disclose to the other Party a copy of the manuscript, or a written
summary of any oral disclosure, to be made or submitted, and shall allow the
other Party [c.i.] to determine whether such disclosure or manuscript contains
subject matter for which patent protection should be sought prior to publication
or which either Party believes should be modified to avoid disclosure of
Confidential Information or regulatory or other problems. With respect to
publications by investigators or other third parties, such publications shall be
subject to review by the other Party under this Section 5.2 only to the extent
that DUSA or Schering (as the case may be) has the right to do so; provided that
each Party shall use reasonable efforts to secure the other Party's right to
require and permit such review. It is understood that each Party shall only have
the right to publish under this Section 5.2 scientific data which such Party (or
its third party contractors) generated in performing the Development Program.
5.2.1 Publication Rights. After the expiration of [c.i.] from the
date of receipt of such disclosure or manuscript, unless DUSA or Schering has
received the written notice specified in Section 5.2.2, the authoring Party
shall be free to submit such manuscript for publication or to orally disclose or
publish the disclosed research results in any manner consistent with academic
standards; provided that, in any publication permitted under this Section 5.2,
each Party shall acknowledge its collaboration with the other Party under this
Agreement unless the other Party requests that such acknowledgement not be made.
5.2.2 Delay of Publication. Prior to the expiration of [c.i.]
period specified in Section 5.2.1 above, the other Party may notify in writing
the submitting Party of its determination that such oral presentation or
manuscript contains Confidential Information of such other Party or
objectionable material or material that consists of patentable subject matter
for which patent protection should be sought. The notified Party shall withhold
its proposed public disclosure and confer with the other Party to determine the
best course of action to take in order to modify the disclosure (including
removing Confidential Information of the other Party) or to obtain patent
protection. After resolution of the confidentiality, regulatory or other issues,
or the filing of a patent application or due consideration as to whether a
patent application can reasonably be filed, but in no event [c.i.] after
notification of the submitting Party as provided above, the submitting Party
shall be free to submit the manuscript and/or make its public oral disclosure in
a manner consistent with academic standards. If the submitting Party declines to
file an appropriate patent application, then either DUSA or Schering, as the
case may be, may undertake to file such application in accordance with Section
14.3 below.
ARTICLE 6
DEVELOPMENT PROGRAM FUNDING
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6.1 Development Costs. Schering and DUSA shall fund the Development
Costs to be incurred by DUSA and Schering, subject to Section 4.1.2(a) during
the Term of the Development Program in accordance with the Development Plan and
Budget as follows:
6.1.1 Funding Requirements
(a) Schering shall commit Three Million Dollars (US
$3,000,000), and DUSA shall commit One Million Five Hundred Thousand Dollars (US
$1,500,000), per year for each of the calendar years 2000 and 2001 to be used to
reimburse Development Costs incurred by DUSA and Schering subject to Section
4.1.2(a) in such years (or such lesser or greater amounts as the Parties agree)
under the respective Development Plan and Budget then in effect. In the event
the Parties agree pursuant to Article 3 to a Development Plan and Budget in an
amount other than US $4,500,000, Schering and DUSA shall fund such budget in the
ratio of 2:1 (i.e., Schering funding two-thirds and DUSA funding one-third),
provided that in no event shall either Party be obligated to spend amounts in
excess of the funding limits set forth in Section 3.2 unless such Party so
agrees. Each year after 2001 [c.i.] the Development Program, Schering shall be
required to fund two-thirds, and DUSA shall be required to fund one-third, of
the Development Costs reflected in the applicable Development Plan and Budget.
In the event that the Parties do not agree on an applicable Development Plan and
Budget for a calendar year, Schering shall continue to be required to fund
two-thirds, and DUSA shall continue to be required to pay one-third, of the
development costs incurred pursuant to this Agreement.
(b) For purposes of determining the Development Costs incurred
by Schering and/or DUSA to be counted towards the Parties' funding commitment
under paragraph (a) above and the Development Plan and Budget in effect from
time to time, the costs of studies, clinical trials and other activities
conducted [c.i.] for [c.i.] shall be [c.i.]; and to the extent that any study,
clinical trial or activity is designed or undertaken to meet the requirements of
a particular country other than the United States, the costs of such study or
trial (or [c.i.] of the study that is so designed to meet such non-U.S.
requirements) shall be [c.i.].
(c) It is understood that, as described in [c.i.], the Parties
may agree that certain activities pursuant to the Development Program will be
undertaken by [c.i.] rather than [c.i.]. In such event, it is understood that a
portion of the funding described in paragraph (a) above shall be used [c.i.] for
the Development Costs it incurs in performing such activities in accordance with
the Development Plan and Budget.
6.1.2 Excess Costs. Unless otherwise mutually agreed by the Parties,
neither Party shall be obligated to incur Development Costs in excess of the
amounts set forth for such Party in the then-current Development Plan and
Budget. To the extent the actual Development Costs incurred by a Party for the
calendar year [c.i.] the Development Costs budgeted to be so incurred by such
Party in the Development Plan and Budget then in effect the [c.i.] in accordance
with this Section 6.1 [c.i.] but any portion over such excess Development Costs
[c.i.] unless the other Party approves such excess Development Costs, which
approval shall [c.i.] to the [c.i.] of such excess costs was [c.i.] of the Party
who incurred such excess costs.
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6.2 Payment of Development Costs.
6.2.1 Payment.
(a) During [c.i.], payment for Development Costs
shall be made in accordance with this paragraph (a). The Parties will share the
Development Costs incurred in accordance with the Development Plan and Budget in
the ratio of two-thirds by Schering and one-third by DUSA, balancing payments
shall be made as follows: On or before [c.i.] of [c.i.], commencing [c.i.], the
Party who is budgeted to incur Development Costs during such [c.i.] (as
reflected in the then-current Development Plan and Budget) in an amount less
than its share of the Development Costs (i.e., two-thirds (2/3) for Schering and
one-third (1/3) for DUSA) (such Party being referred to as the "Reimbursing
Party," and its percentage share being referred to as the "Reimbursing Party's
Share") shall pay to the other Party (the "Receiving Party") an amount equal to
(i) the Reimbursing Party's Share of the total Development Costs budgeted to be
incurred by both Parties during such [c.i.], less (ii) the Development Costs to
be incurred by the Reimbursing Party during such [c.i.], all in accordance with
the Development Plan and Budget then in effect. Unless otherwise specified in
the applicable Development Plan and Budget, amounts budgeted for the full year
will be deemed budgeted in equal amounts over [c.i.].
(b) During [c.i.], payment for Development Costs
shall be made in accordance with this paragraph (b). [c.i.] following the end of
[c.i.], each Party shall provide to the other a summary of the Development Costs
actually incurred in the [c.i.] by such Party in accordance with the Development
Plan and Budget. The following payments should be made:
(i) if the actual Development Costs incurred by
DUSA exceed one-third of the total Development Costs incurred by both Parties
during such quarter, Schering shall pay to DUSA [c.i.] after receipt of DUSA's
report an amount equal to such excess, not to exceed the amounts established
under the Development Plan and Budget (subject to Section 6.1.2 above); or
(ii) if the actual Development Costs incurred
by Schering exceed two-thirds of the total Development Costs incurred by both
Parties during such quarter, DUSA shall pay to Schering [c.i.] after receipt of
Schering's report an amount equal to such excess, not to exceed the amounts
established under the Development Plan and Budget (subject to Section 6.1.2
above).
Every payment pursuant to this Section 6.2.1(b) is subject to both
Parties' verification of those expenses during [c.i.] period following receipt
of the other Party's report. To the extent the Receiving Party's report of
Development Costs is established to overstate the amount due, a reconciling
payment shall be due to the Reimbursing Party.
(c) With respect to payments made pursuant to
Section 6.2.1(a), [c.i.] following the end of [c.i.], each Party shall provide
to the other a summary of the Development Costs actually incurred by such Party
during [c.i.], in a form mutually agreed by the Parties, including a reasonably
detailed accounting supporting the indirect costs included in the Development
Costs. If the actual Development Costs incurred by DUSA in such [c.i.] are less
than the amounts budgeted for DUSA for such [c.i.] under the Development Plan
and Budget, then [c.i.] of the difference will be
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[c.i.] and [c.i.] the payment [c.i.] for [c.i.]; and if the Development Costs
incurred by Schering in such period are less than the amounts budgeted for
Schering for such period under the Development Plan and Budget, then [c.i.] to
[c.i.] as soon as possible [c.i.] the Development Program in the next succeeding
[c.i.]. Subject to Section 6.1.2 above, if a Party incurs in such period
Development Costs in excess of the amounts budgeted for such Party for such
period, the other Party agrees to pay its share of the difference within [c.i.]
of receiving an appropriate invoice, subject to Section 6.1.2 above and subject
to verification of those expenses during a [c.i.] after receiving an appropriate
invoice.
6.2.2 Interim Periods. In the event the Steering Committee is
unable for any reason to establish a Development Plan and Budget for any period
during the initial Term of the Development Program (calendar years 2000 and
2001), Schering shall nonetheless make payments to DUSA, at the level required
to reimburse DUSA for its costs incurred in carrying out the [c.i.] Plan then in
effect for each Collaboration Product under development in the calendar years
2000 and 2001. If no Development Plan and Budget is established for calendar
years 2000 and 2001, then Schering shall pay to DUSA [c.i.] and [c.i.], during
the year 2000 and 2001, the amounts set forth under Section 6.2.1 (a), until
such a Development Plan and Budget is established. DUSA shall expend any amounts
[c.i.] by Schering solely for conducting [c.i.] and/or [c.i.] with respect to
the Collaboration Products within the Field.
6.3 Milestone Payments.
6.3.1 Milestones. Schering agrees to make the following
payments to DUSA upon the occurrence of each milestone specified below:
MILESTONE CASH AMOUNT
1. Execution Date of this Agreement. US $ 5,000,000
2. Upon receipt of official correspondence from the FDA of a recommendation
that DUSA's ALA supplier is in full compliance with cGMP with respect to
the manufacture of 5-ALA at its facilities and/or recommendation by the
FDA of approval for its use in an NDA. US $ 3,750,000
3. First Commercial Sale in the United States of the first Collaboration
Product for an indication within the Field (the "First Indication"),
provided that such Collaboration Product is approved by the regulatory
authority [c.i.], and provided further that DUSA has [c.i.] for [c.i.] US $ 7,000,000
4. For each of the next three (3) additional indications within the Field
after the First Indication: (a) upon receipt of a separate
Marketing Approval in [c.i.] to market any existing
Collaboration Product for each additional indication within the Field; or
(b) upon the First Commercial Sale in [c.i.] of a new Collaboration
Product approved for one or more indications within the Field (for each
such indication), provided that [c.i.] for [c.i.] (if required) has been
[c.i.] US [c.i.]
(each occurrence)
Concurrent with Schering's Milestone 2 payment, and pursuant to the
Stock Purchase Agreement executed between the Parties, Schering shall also make
a capital investment in DUSA as
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provided for in that Stock Purchase Agreement. Further, concurrent with
Schering's Milestone 3 payment, Schering shall also pay US$ 8,000,000 to DUSA
for DUSA's future research and development efforts. DUSA shall be free to
allocate such money in its sole discretion, either inside or outside the Field,
and DUSA shall have no obligations to Schering with respect to the results of
any such research and development efforts.
(a) Notwithstanding the foregoing, Milestone 3 and Milestone 4 [c.i.] to
[c.i.] if at the time of such First Commercial Sale DUSA [c.i.] of [c.i.] that
DUSA [c.i.] to customers in the [c.i.] as of the date of such First Commercial
Sale, all in accordance with the Light Source Agreement; and in such event,
Milestone 3 and Milestone 4 [c.i.] (respectively) [c.i.] when DUSA [c.i.].
Similarly, in the event that [c.i.] for [c.i.] has [c.i.] in [c.i.] at the time
of First Commercial Sale, as required under Milestone 3 or 4 above, that
Milestone [c.i.] at such time as [c.i.] for [c.i.] has been [c.i.].
(b) In any event, Milestone 2 shall be deemed to have occurred no later
than the time a Collaboration Product receives Marketing Approval in the United
States. For purposes of Milestone 4 above, "additional indication" shall mean
the Marketing Approval to allow the marketing and sale of such Collaboration
Product to treat a Dermatological Disorder other than one which was covered by a
Marketing Approval previously obtained for a Collaboration Product, such
Collaboration Product [c.i.] in the applicable Product Territory for such
additional indication in [c.i.] after First Commercial Sale of [c.i.], and, for
clarification purposes, shall not mean that a Collaboration Product is approved
to be marketed and sold, to the extent such Marketing Approval only permits a
previously approved Collaboration Product to be marketed and sold in another
dosage, formulation or strength. In the event the Parties are unable to agree
upon [c.i.] for [c.i.], the same shall be determined pursuant to Section 20.2.3
below. In addition, for purposes of Milestone 4, a "separate" Marketing Approval
shall mean a Marketing Approval granted pursuant to a separate filing, it being
understood, however, that such a filing may be an amendment or supplement to a
previously granted Marketing Approval (such as, for example, a Supplemental
NDA).
(c) Notwithstanding the foregoing, with respect to each of the Milestones
3 and 4 above if a particular Milestone is met with respect to [c.i.] prior to
such Milestone being met with respect to [c.i.] then [c.i.] of the payment that
would otherwise be due when such Milestone is met with respect to [c.i.] shall
be due and payable at the occurrence of such Milestone with respect to such
[c.i.] and all amounts so paid [c.i.] at such [c.i.] of the same Milestone for
such Collaboration Product with respect to [c.i.]. For purposes of example, if
Schering completes the First Commercial Sale [c.i.] of a Collaboration Product
for the First Indication, a total of [c.i.] would be due and payable to DUSA for
Milestone 3 ([c.i.] for DUSA's future research and development efforts), and
then when Schering later completes the First Commercial Sale in [c.i.] to market
such Collaboration Product for the First Indication [c.i.] would be due and
payable to DUSA ([c.i.] for DUSA's future research and development efforts).
(d) For the avoidance of doubt, it is understood and agreed that with
respect to Milestones 1, 2 and 3 payments shall be payable by Schering with
respect to each of the Milestones set forth above only one (1) time and that
with respect to Milestone 4, the payment shall be made no more than three (3)
times.
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6.3.2 Other. In the event that Milestone 3 is achieved prior
to the achievement of Milestone 2 the payment corresponding to all such
Milestones shall then be due. The payments set forth in this Section 6.3 hereof
shall each be due and payable [c.i.] after the occurrence of the applicable
Milestone event, except Milestone 1 shall be due [c.i.] from the Execution Date.
For Milestones accomplished by DUSA, such payment shall be due [c.i.] after
written notice thereof to Schering, subject to Schering's verification during
[c.i.] period that the Milestone occurred. DUSA and Schering agree to promptly
notify the other in writing of its achievement of any Milestone.
6.4 Credit Against Future Royalties. [c.i.] of the amounts paid
pursuant to Milestone 4 [c.i.] a [c.i.] (i) the [c.i.] and the [c.i.] of the
[c.i.] by Schering to DUSA under [c.i.] below on [c.i.] and (ii) the [c.i.] (as
defined in [c.i.]). The [c.i.] of such [c.i.] shall be [c.i.] until the end of
the [c.i.] after each occurrence of the Milestone 4 for which the amount was
paid, and [c.i.]. In the event that such [c.i.] the [c.i.] and the [c.i.] of the
[c.i.] to DUSA combined with [c.i.] the [c.i.] have not permitted Schering to
[c.i.] pursuant to Milestone 4 then from and after [c.i.] of the [c.i.], DUSA
shall [c.i.] a [c.i.] to [c.i.] of the [c.i.] ([c.i.] in the same manner as
[c.i.] where "Collaboration Product" shall be deemed to refer to any such
product in the Field [c.i.]) until [c.i.] have been [c.i.]. Such [c.i.], if any,
shall be [c.i.] within [c.i.] from the end of each [c.i.] and shall be [c.i.]
showing in reasonable detail the [c.i.]. It is understood that such [c.i.] shall
[c.i.] at such time as the [c.i.] under this Section 6.4, [c.i.] of the [c.i.]
by DUSA under this Section 6.4, [c.i.].
ARTICLE 7
USE OF PRECLINICAL AND CLINICAL DATA
7.1 Exchange. Schering and DUSA, respectively, shall provide to each
other all Data generated in the course of the performance of the Development
Program for use of each DUSA and Schering for the purposes stipulated in this
Agreement in a timely fashion and as promptly as possible upon request of each
DUSA or Schering.
7.2 Use; Disclosure. DUSA may only use or provide Data to third parties
as is reasonably necessary or useful for commercialization of Collaboration
Products for applications outside the Field or outside the applicable Product
Territory, or of products other than Collaboration Products, including without
limitation for use by third parties and for cross-referencing drug master files
or other regulatory filings provided that the disclosure of such Data to a
non-governmental third party is made under reasonable and customary
confidentiality restrictions. Schering will only use and disclose Data to third
parties as required to obtain Marketing Approvals for Collaboration Products for
purposes within the Field in the applicable Product Territory and as may be
necessary in performing its obligations and exercising its rights under this
Agreement, i.e. development activities, marketing activities, medical education
activities, professional services activities and public relations activities;
for purposes of obtaining consultation services in the normal course of business
(such as business consultants, advertising agencies, law firms, accounting
firms, etc.) in each case solely to the extent necessary for development and
commercialization of Collaboration Products in the Field in the applicable
Product Territory; or as may otherwise be agreed by DUSA and Schering. Schering
may not use any Data (or permit any third party to use Data) outside the Product
Territory
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of the Collaboration Products for which such Data is used, or outside the Field
or for any products other than the Collaboration Products.
7.3 Regulatory Requirements. In all agreements with third parties or
Affiliates involving the development of Data, Schering and DUSA, respectively,
shall require that such third parties and Affiliates provide the other Party
access to all such Data, to the extent that such Data is required for
preparation of XXXx and filing of XXXx with the applicable regulatory
authorities throughout the Territory in accordance with this Agreement.
ARTICLE 8
MARKETING RIGHTS
8.1 Schering Rights.
(a) Schering shall have the exclusive right to market,
sell and distribute each Collaboration Product for use in the applicable Product
Territory within the Field, subject to paragraph (b) and Section 8.5 below. This
Section 8.1 shall not be deemed to limit the licenses granted to Schering under
Section 14.1 below.
(b) Schering shall have the option, with respect to each
Collaboration Product, to retain its rights hereunder in countries of the
Territory on a region by region basis as further described below, or to
terminate its rights in such regions with respect to such Collaboration Product.
The regions ("Region(s)") and corresponding key markets ("Key Market(s)") of
each Region of the Territory are as set forth on Exhibit 8.1(b). With respect to
the Initial Product, Schering shall notify DUSA in writing [c.i.] after the
Execution Date of the Regions in which Schering has elected to retain its rights
to such Initial Product, and Schering's rights to the Initial Product with
respect to all other Regions shall thereupon terminate. For each Collaboration
Product other than the Initial Product for which an MAA has been filed in the
U.S. pursuant to the Development Program, Schering shall [c.i.] from the filing
of such MAA notify DUSA of the Regions in which Schering elects to retain its
rights with respect to such Collaboration Product, and Schering's rights to such
Collaboration Product with respect to all other Regions shall thereupon
terminate. In the event Schering fails to notify DUSA [c.i.] period, Schering
shall be deemed to have elected not to retain its rights to such Collaboration
Product in all Regions (i.e., Schering's rights to such Collaboration Product
shall terminate with respect to all Regions). With respect to each Collaboration
Product for which Schering has elected to continue its rights, the Regions in
which Schering has so elected to retain its rights, shall be referred to as the
"Product Territory". For Collaboration Products for which Schering has not
elected to retain its rights in the entire Territory, then, with respect to the
Regions in which Schering has not so elected to retain its rights to such
Collaboration Product, such product shall be referred to herein as an "Abandoned
Product" and such Region shall be referred to as an "Abandoned Region." Once
Schering's rights with respect to a Collaboration Product have terminated
pursuant to this Section 8.1(b) for any Abandoned Region, then Schering shall
have no further rights with respect to such Collaboration Product in such
Abandoned Region for any purpose; accordingly, for example, if Schering elects
to terminate its rights to a Collaboration Product in any Region as provided
above, and such same Collaboration
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Product later becomes approved for other indications, Schering shall have no
rights to such new indications of such Collaboration Product in the Abandoned
Regions for such Collaboration Product.
(c) It is further understood and agreed that DUSA shall
have the right to commercialize (itself or through others) any Abandoned Product
in the applicable Abandoned Regions, both within and outside the Field.
(d) In [c.i.] and [c.i.] under the Development Program
DUSA agrees [c.i.] Schering [c.i.] from [c.i.] in the respective Abandoned
Regions [c.i.] (it being understood that, for purposes of this paragraph [c.i.]
and [c.i.] shall have the meanings defined in Sections [c.i.] and [c.i.] above,
[c.i.] in such definitions). For Abandoned Products for which Schering, in
accordance with the Development Plan and Budget for such Abandoned Product,
[c.i.] in [c.i.] of such Abandoned Region at the time of Schering's election
under Section 8.1(b), DUSA [c.i.] of [c.i.] of such Abandoned Product in all the
countries of the Abandoned Region [c.i.] from the date of the [c.i.] of such
Abandoned Product. For an Abandoned Product for which [c.i.] has [c.i.] in
[c.i.] of the Abandoned Region at the time of Schering's election under Section
8.1(b) above, DUSA [c.i.] of [c.i.] of such Abandoned Product in the Abandoned
Region for [c.i.] from the date of the [c.i.] of such Abandoned Product. For
purposes of clarification, the [c.i.] shall [c.i.] to Abandoned Products for
which [c.i.] in [c.i.] pursuant to the Development Program; and notwithstanding
only the foregoing, this Section 8.1(d) shall not apply to the Initial Product.
8.2 Ex-U.S. Light Source. In order to allow Schering to make
its decision with respect to the election of Regions outside the U.S. within
which it wishes to market the Initial Product, Schering and DUSA, promptly after
the Execution Date, shall begin good faith negotiations on the manufacture,
promotion, and distribution of the Light Source in connection with the sale of
the Initial Product outside the U.S. DUSA will also prepare and provide to
Schering [c.i.] for [c.i.] as expected at the time of approval outside of the
U.S. [c.i.] after the conclusion of such negotiations [c.i.] after the
Effective Date, and on a Region-by-Region basis, Schering shall notify DUSA
[c.i.] to [c.i.] with DUSA to use [c.i.] in connection with the promotion,
marketing and sale of the Initial Product outside the U.S.
8.3 Rights. It is understood that DUSA retains the right,
directly or through third parties, to market, sell and distribute the
Collaboration Products, for use outside the applicable Product Territory and/or
for purposes outside the Field.
8.4 Sublicensees and Affiliates. Schering may authorize
Affiliates and Sublicensees to market, sell or distribute any Collaboration
Product for use in the applicable Product Territory within the Field. Schering
shall promptly provide notice to DUSA of any sublicense or Affiliate
authorization to be granted pursuant to this Section 8.4. In the event that
Schering or its Affiliate receives any up-front license fee, milestone payment
or similar payments from a Sublicensee, directly or indirectly, in connection
with the granting of rights to such Sublicensee pursuant to this Section 8.4,
Schering shall pay to DUSA [c.i.] of such payments with respect to the Initial
Product and [c.i.] of such payments with respect to future Collaboration
Products, [c.i.] of such receipt. Schering agrees to use [c.i.] efforts to
obtain reasonable cash consideration with respect to the grant
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of such rights to a Sublicensee. Such payments by Schering to DUSA shall be in
addition to the payments made pursuant to Section 6 above and Section 10 below.
8.5 Restrictions. Schering [c.i.] outside the applicable Product
Territory in relation to each Collaboration Product [c.i.] customers or engaging
in marketing activities. DUSA [c.i.], inside the applicable Product Territory in
relation to each Collaboration Product, [c.i.] customers or engaging in
marketing activities. This provision is not intended to limit customers within
[c.i.] from placing unsolicited orders for Collaboration Products from either
Party.
8.6 Marketing Plans. Schering shall prepare overview-marketing
plans for the overall Territory and [c.i.] marketing plans for each Key Market,
such plans to include plans related to the prelaunch, launch, promotion and sale
of Collaboration Products which shall include [c.i.] the number of sales
representatives, and [c.i.] of the marketing and advertising campaigns proposed
to be conducted, for each Collaboration Product (the "Marketing Plans"). The
Marketing Plans shall be designed to fulfill Schering's undertakings pursuant to
Section 13.1. Schering shall provide copies of the Marketing Plans to DUSA by
[c.i.] of each calendar year during the term of this Agreement. The draft
Marketing Plan for the Initial Product is attached as Exhibit 8.6 and shall be
supplemented by the final Marketing Plan for the Initial Product [c.i.], but in
no case later than [c.i.] At a reasonable time thereafter, Schering shall meet
with DUSA to review the Marketing Plans and the actual results as compared with
prior Marketing Plans. In addition, Schering agrees to keep DUSA informed,
[c.i.] with respect to the marketing, sales and promotion of the Collaboration
Products. Subject to the provisions of this Agreement, and subject to compliance
with the Marketing Plans, as modified or adjusted from time to time by [c.i.],
Schering shall have full control and authority of the day-to-day
commercialization of Collaboration Products in the Territory within the Field
and implementation of the corresponding Marketing Plans, at Schering's expense.
No later than [c.i.] prior to the start of the forecasted year, Schering shall
provide forecasts of estimated aggregate annual Net Sales for the Territory.
8.7 Marketing Materials. Schering shall use [c.i.] to keep DUSA
informed regarding the preparation of promotional materials, samples,
advertising and materials for training sales representatives with respect to a
Collaboration Product and, subject to Section 15.7, will provide DUSA with
copies of such materials, in advance of distribution [c.i.]. Schering [c.i.]
incorporation of any reasonable suggestions or comments promptly made by DUSA in
such materials if such comments or suggestions are received [c.i.] of DUSA being
provided the materials.
8.8 Right of First Discussion.
8.8.1 Notice. During the period specified in Section 8.8.3
below, [c.i.] prior to DUSA entering into material and substantial negotiations
to grant to a third party the right to market and distribute for use outside the
Field a product containing ALA (including, for the avoidance of doubt, a
Collaboration Product) within [c.i.] that is part of the Subject Territory (as
defined below), DUSA agrees to notify Schering in writing, together with a
summary description of the product(s) or field to be proposed that would be the
subject of such negotiations ("Initial Notice"). Upon request by Schering
following its receipt of such Initial Notice, DUSA and Schering shall discuss
the terms and conditions under which DUSA would grant such rights to Schering.
In the event that the Parties
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have not agreed upon such terms and conditions pursuant to which such rights and
license would be granted to Schering, [c.i.] after the date DUSA provided the
Initial Notice to Schering, DUSA shall be free to grant to any third party the
right to market and distribute such products containing ALA outside the Field,
without further obligations to Schering, and on any terms that DUSA considers
appropriate. It is understood that, because DUSA will be providing the Initial
Notice to Schering prior to the commencement of material and substantial
negotiations with a third party, DUSA may not be able to define the entire or
exact scope of the product, field or rights to be granted, and accordingly, so
long as the Initial Notice describes a product, field or rights that overlap
with the product, field or rights actually negotiated with, or granted to, a
third party, DUSA shall be deemed to have satisfied its obligations, under this
Section 8.8.1; also, it is understood that DUSA need only provide one such
Initial Notice hereunder before engaging in such material and substantial
negotiations with the first third party, and that DUSA is not obligated to
provide any further notice if DUSA subsequently engages in discussions with more
than one third party with respect to subject matter described in the Initial
Notice. As used in this Section 8.8.1, "Subject Territory" shall mean Regions
(i) in which Schering has elected to retain its rights to the Initial Product
under Section 8.1(b) above, or (ii) for which, at the time the Initial Notice is
required, Schering has previously elected under Section 8.1(b) above to retain
its rights to any Collaboration Product (i.e. where Schering has made such
election following the filing of an MAA in the U.S. with respect to such
Collaboration Product).
8.8.2 No Implied Obligations. The only obligations of
Schering and DUSA under Section 8.8.1 above are as expressly stated therein, and
there are no further implied obligations relating to the matters contemplated
therein. Without limiting the foregoing, it is further understood and agreed
that the subject product(s) containing ALA may or may not be discovered or
reduced to practice to any particular degree or at all at the time of the
Initial Notice under Section 8.8.1, and that further modification and/or
variations of a product may be developed after the date of such Initial Notice;
accordingly, so long as DUSA includes with the Initial Notice a good faith
summary of the product as it then exists, or a summary of the field in which the
rights would be granted, the requirements of Section 8.8.1 above shall be deemed
satisfied with respect to any and all modifications, variants or derivatives of
the product developed or reduced to practice after the date of the Initial
Notice. Without limiting the foregoing, it is further acknowledged and agreed
(i) that: this Section 8.8 shall not be deemed to apply to a transaction by
which a third party acquires substantially all of the business or assets of
DUSA, if such third party agrees to be bound by the terms of this Agreement in
accordance with Section 20.7 below; and (ii) if DUSA enters into a transaction
with a third party in accordance with this Section 8.8 that includes the grant
by DUSA of an option or other contingent right to acquire the right to market
and distribute one or more products containing ALA (including, for the avoidance
of doubt, a Collaboration Product) (each such option or right being referred to
as a "Contingent Right"), then the grant of rights by DUSA upon a third party's
exercise of such Contingent Right shall not be subject to this Section 8.8 so
long as the grant of such Contingent Right was made in a transaction entered
into with the third party in compliance with Section 8.8.1; and (iii) DUSA is
not obligated under this Section 8.8 to provide to Schering any particular
information other than as expressly stated in Section 8.8.1, and that DUSA may
require a separate confidentiality agreement as a condition to any disclosure of
information in connection with Section 8.8.1. Any dispute under this Section 8.8
shall be resolved in accordance with Section 20.2.1 below.
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8.8.3 Termination. DUSA's obligations under Section 8.8.1
shall terminate effective upon the earlier of (i) [c.i.] the Execution Date or
(ii) the [c.i.] under Section [c.i.] above, or upon the giving of notice of
termination of this Agreement under Sections 19.2 or 19.3, whichever occurs
first.
8.8.4 Notice. Until the earlier of (i) [c.i.] the
Execution Date or (ii) the [c.i.] under Section [c.i.] above, or upon the giving
of notice of termination of this Agreement under Sections 19.2 or 19.3,
whichever occurs first, either Party shall notify the other [c.i.] prior to the
commencement of any clinical trial conducted or sponsored by or in cooperation
with itself or its Affiliates in which ALA is to be used.
8.9 Substitution. Notwithstanding the restrictions in Section 8.5
above, the Parties acknowledge the possibility, although potentially remote,
that Collaboration Products sold by DUSA for use outside the Field or Rejected
Products sold for use inside the Field could be substituted for uses within the
Field by pharmacists, health care providers or others, and similarly,
Collaboration Products sold by or under authority of Schering for use within the
Field could be substituted for uses outside the Field. Accordingly, to
compensate the Parties at least in part for the negative impacts of such
substitution, the following provisions shall apply:
8.9.1 Substitution within the Field. If in any [c.i.]
consecutive [c.i.] the total dollar Substitution Sales by DUSA, its Affiliates
and Sublicensees of a Collaboration Product or Rejected Product in the
applicable Product Territory for uses within the Field (as measured by a
reputable, independent market surveillance firm agreed upon by the Parties),
[c.i.] of [c.i.] of the Collaboration Product, then DUSA shall pay to Schering
[c.i.] of the Substitution Proceeds received by DUSA or its Affiliate; provided
that if DUSA reasonably demonstrates that the negative profit impact to
Schering, its Affiliates and Sublicensees is less than the amount so required to
be paid to Schering, the foregoing percentage of such Substitution Proceeds to
be so paid to Schering shall be reduced to reasonably equate to such negative
profit impact.
8.9.2 Substitution Outside the Field. If in any [c.i.]
consecutive [c.i.], the total dollar Net Sales by Schering, its Affiliates and
Sublicensees of a Collaboration Product in the applicable Product Territory for
uses outside the Field (as measured by reputable, independent market
surveillance, e.g. [c.i.]) [c.i.] of [c.i.] of the Collaboration Product in the
applicable Product Territory, then Schering shall pay to DUSA [c.i.] of the
Substitution Proceeds received by Schering or its Affiliates; provided that if
Schering reasonably demonstrates that the negative profit impact to DUSA, its
Affiliates, or Sublicensees, of such substitution is less than the amount so
required to be paid to DUSA, the foregoing percentage of such Substitution
Proceeds shall be reduced to reasonably equate to such negative profit impact.
8.9.3 Dispute. In the event the Parties are unable to
agree upon the percentages of Substitution Proceeds payable under Section 8.9.1
or 8.9.2 above, then such percentages shall be determined by an arbitrator
pursuant to Section 20.2.3 below, [c.i.] after a request by either Party to
initiate such arbitration. In determining the appropriate rate, which shall not
exceed the maximum rates specified in this Section 8.9, the arbitrator(s) shall
take into account, among other considerations, any negative financial impact of
such substitution as well as any positive effects of
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the substitution on the market for the Collaboration Product (such as overall
increased sales of the Collaboration Product, by reason of greater market
awareness of the Collaboration Product or other positive effects).
8.9.4 Adjustment. After a Party becomes obligated to make
payments under this Section 8.9 with respect to a Collaboration Product, if in
any [c.i.] consecutive [c.i.] the conditions for invoking such payments
specified in Section 8.9.1 or 8.9.2, respectively, do not exist, then from and
after the end of such subsequent [c.i.] period, the payments under such Section
shall no longer be due; it being understood, however, that substitution in later
periods may again trigger a new adjustment pursuant to this Section 8.9.
Similarly, in the event DUSA or Schering believes that a change in circumstances
after a percentage was established under this Section 8.9 warrants a different
percentage, either Party may request that the percentage be renegotiated, and if
the Parties cannot agree on an adjustment to such percentage, the same shall be
established in accordance with Section 8.9.3 and 20.2.3.
8.9.5 Certain Terms. As used in this Section 8.9, the
following terms shall have the following meanings:
(a) "Substitution Sales" shall mean the total amount
invoiced to third parties with respect to sales of Collaboration Products or
Rejected Products, as the case may be, for final sale and consumption in the
applicable Product Territory by DUSA, its Affiliates and Sublicensees,
determined on the same basis as the calculation of Net Sales for Schering
specified in Section 1.33 above (i.e., substituting in such Section 1.33 "DUSA"
for each reference to "Schering," and similarly substituting "DUSA" for each
reference to "Schering" in the corresponding definitions of Sublicensee).
(b) "Substitution Proceeds" shall have the following
meanings: (i) with respect to amounts received by Schering for purposes of
determining the payments due to DUSA under Section 8.9.2 above, "Substitution
Proceeds" shall mean [c.i.] of Net Sales [c.i.] by Schering and its Affiliates
with respect to sales of Collaboration Products used outside the Field; and (ii)
with respect to amounts received by DUSA for purposes of determining the
payments to due to Schering under Section 8.9.2 above, "Substitution Proceeds"
shall mean [c.i.] of Substitution Sales [c.i.] by DUSA and its Affiliates with
respect to Substitution Sales; provided that in each of cases (i) and (ii),
Substitution Proceeds shall be [c.i.] by [c.i.] by Schering and DUSA,
respectively, for the Collaboration Product or Rejected Product that generated
such Substitution Proceeds. It is understood and agreed that in each case
Substitution Proceeds shall not include amounts received by a Sublicensee on
sales of a Collaboration Product or Rejected Product, as the case may be, but
shall instead include the sales price received by Schering and DUSA,
respectively (and their respective Affiliates) on sales of the particular
Collaboration Product or Rejected Product, as the case may be, to their
respective Sublicensees for final sale and consumption in the applicable Product
Territory, as well as royalty payments received by Schering and DUSA,
respectively (and their respective Affiliates) from Sublicensees calculated on
sales of Collaboration Products or Rejected Products, as the case may be, in
such Product Territory by or under authority from such Sublicensees.
Substitution Proceeds shall not include any up-front license fees or any other
amount that is not the purchase price of a Collaboration Product or Rejected
Product, as the case may be, in such Product
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Territory or running royalties calculated on the basis of such purchase price
and payable on a per-unit basis (i.e., as a percentage of such sales or a
per-unit amount).
(c) In the event that the Parties are unable to
agree upon the level of Substitution Sales (i.e., as to whether payments are due
under this Section 8.9) or as to the level of Substitution Proceeds, in each
case by reason of the inability to agree on the level of sales of the particular
Collaboration Product or Rejected Product outside or inside the Field, then such
levels shall be determined by a mutually agreed third party market share
auditing firm. If the Parties cannot agree on such firm, it shall be appointed
by an arbitrator under the procedures established pursuant to Section 20.2.3
below. The costs of such audit shall be [c.i.].
ARTICLE 9
MANUFACTURE AND SUPPLY
9.1 Manufacturing Rights. Except as otherwise provided herein, DUSA
shall have the exclusive right to manufacture or have manufactured Collaboration
Products for use within the Field.
9.2 Supply
9.2.1 Generally. Subject to the terms and conditions of
this Article 9, DUSA shall supply Schering with Finished Products for sale in
the U.S. and with Collaboration Products (in bulk) for sale in the ex-U.S. part
of the Product Territory for use within the Field, and Schering shall purchase
from DUSA all of Schering's requirements of Collaboration Products. It is
understood that Light Sources for use with the Collaboration Products in the
Field are not covered by this Article 9, but instead shall be supplied in
accordance with the Light Source Agreement.
9.2.2 Packaging. Schering and DUSA shall agree upon the
packaging of the Finished Products for the U.S., and DUSA shall supply the
Finished Products packaged as so agreed. For the ex-U.S. part of the applicable
Product Territory, DUSA shall supply Schering with the Collaboration Products in
bulk, and Schering will perform final packaging.
9.3 Forecasts. Schering's initial forecast of the quantities of
Collaboration Products estimated to be required on [c.i.] during the [c.i.]
after the Execution Date (and which shall serve as the [c.i.] forecast required
by this Section) is attached as Exhibit 9.3. Thereafter, [c.i.] prior to the
start of each calendar quarter ("Q1") beginning after [c.i.] (i.e., [c.i.]),
Schering shall provide DUSA with a [c.i.] forecast of the quantities of
Collaboration Products estimated to be required on a month-by-month basis during
Q1 and the next three (3) quarters ("Q2", "Q3" and "Q4", respectively). Each
forecast shall indicate the estimated quantities of Collaboration Products
identified by the SKU numbers (if applicable) designated by DUSA (which shall be
categorized, among other things, by whether the unit is for sale to the trade or
is a Sample, as "Sample" is defined below in Section 10.4). Each forecast shall
also identify each anticipated launch date for a Collaboration Product in any
country in the Territory during the upcoming [c.i.]. Schering shall only be
obligated to purchase the quantities set forth in such forecast to the extent
stipulated in Section 9.4.2 below.
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9.4 Orders.
9.4.1 Orders. Together with each forecast provided under
Section 9.3 above (other than the initial forecast provided as Exhibit 9.3) (the
"Current Forecast"), Schering shall place its firm order with DUSA, setting
forth trade units, delivery dates and shipping instructions with respect to each
shipment, for delivery in Q1 of that quantity of Collaboration Products equal to
or greater than (i) the quantity of Collaboration Products reflected for Q1 in
the Current Forecast, (ii) [c.i.] of the quantity of Collaboration Products
forecast for Q2 in the Forecast provided under 9.3 above for the immediately
preceding calendar quarter (the "First Preceding Forecast"), and (iii) [c.i.] of
the quantity of Collaboration Products forecast for Q3 in the Forecast
immediately preceding the First Preceding Forecast (the "Second Preceding
Forecast"). DUSA shall accept such orders from Schering, subject to Section 9.5
and the remaining terms and conditions of this Agreement, provided that DUSA
shall not be obligated to accept orders for Q1 to the extent the quantity
ordered exceeds the lesser of (i) [c.i.] of the quantity of Collaboration
Products forecast for Q1 of the Current Forecast; (ii) [c.i.] of the quantity of
Collaboration Products forecast for Q2 in the First Preceding Forecast, or (iii)
[c.i.] of the quantity of Collaboration Products forecast for Q3 in the Second
Preceding Forecast, but shall use [c.i.] efforts to fill orders for such excess
quantities from available supplies. For the Initial Product, all orders shall
take into account the batch size, which is [c.i.] units (i.e., all orders shall
be in multiples of [c.i.]); for Collaboration Products other than the Initial
Product, the Parties shall agree upon a minimum batch size consistent with
manufacturing requirements.
9.4.2 Form of Order. Schering's orders shall be made
pursuant to a purchase order which is in a form mutually acceptable to the
Parties, and shall provide for shipment in accordance with reasonable delivery
schedules. DUSA shall notify Schering within [c.i.] from receipt of an order of
its ability to fill any amounts of such order in excess of the quantities that
DUSA is obligated to supply. ANY TERMS OR CONDITIONS OF ANY PURCHASE ORDER OR
ACKNOWLEDGMENT GIVEN OR RECEIVED WHICH ARE ADDITIONAL TO OR INCONSISTENT WITH
THIS AGREEMENT SHALL HAVE NO EFFECT AND SUCH TERMS AND CONDITIONS ARE HEREBY
EXCLUDED.
9.5 Delivery. DUSA shall ship quantities of Finished Products (or
Collaboration Products, as the case may be) that DUSA is obligated to supply
pursuant to Section 9.2 to arrive on or about the dates specified in Schering's
purchase orders submitted and accepted in accordance with Section 9.4 above and
as required by Section 9.7; provided, however, that DUSA shall only be required
to use [c.i.] efforts to ship, in any [c.i.], quantities of Finished Products
(or Collaboration Products, as the case may be) ordered in excess of: (i) [c.i.]
increase over the amount ordered by Schering for delivery in the immediately
preceding [c.i.] or (ii) a [c.i.] increase over the amount ordered by Schering
for delivery in the immediately preceding [c.i.], whichever is greater. All
Finished Products (or Collaboration Products, as the case may be) delivered
pursuant to the terms of this Agreement shall be suitably packed for shipment by
DUSA and marked for shipment to the destination point indicated in Schering's
purchase order. Each shipment of Finished Products (or Collaboration Products,
as the case may be) hereunder shall be accompanied by the documentation
specified in Section 9.8(e). All Finished Products (or Collaboration Products,
as the case may be) will be delivered [c.i.] designated by [c.i.]. The carrier
shall be selected by [c.i.]. The packaging for
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shipment shall be in accordance with good commercial practice with respect to
protection of the Finished Products (or Collaboration Products, as the case may
be) during transportation. All shipping shall be [c.i.]. [c.i.] will be
responsible for the insurance of the Finished Products (or Collaboration
Products, as the case may be) during the transportation at its own cost and
discretion.
9.6 Quality Guidelines.
9.6.1 Compliance with Manufacturing Standards and
Specifications. All Finished Products (or Collaboration Products, as the case
may be) supplied by DUSA hereunder shall comply with the Manufacturing Standards
and Specifications in accordance with the regulatory specifications and methods
described and approved in the Marketing Approval.
9.6.2 Changes to Regulatory Requirements. In the event
that Schering notifies DUSA of (i) additional standards for the manufacture of a
Finished Product (or Collaboration Products, as the case may be) that are
required to comply with the laws or regulations of any country of the applicable
Product Territory (other than the U.S.), or (ii) additional specifications for a
Collaboration Product that are required by a Marketing Approval in a country of
the applicable Product Territory (other than the U.S.) to comply with the laws
or regulations of such country, the Parties shall modify the Manufacturing
Standards and the Specifications, respectively, for such Finished Product and/or
Collaboration Product to incorporate such additional standards and
specifications; provided that Schering [c.i.] DUSA for the [c.i.] of
implementing such additional standards and specifications (i.e., in addition to
the [c.i.]) and provided that such modified Manufacturing Standards and
Specifications would become effective after a mutually agreed period of time or
within the period specifically required and requested by the applicable
regulatory authority. It is understood that the [c.i.] to be so [c.i.] Schering
would be [c.i.] required to [c.i.] and [c.i.], but the [c.i.] produced in
compliance with such additional Manufacturing Standards and Specifications shall
be [c.i.] within the [c.i.] for the Finished Products and Collaboration Products
produced for the particular country; in no event shall Schering be [c.i.] DUSA
for any [c.i.] more than once.
9.6.3 Modification of Manufacturing Process. DUSA will
notify Schering in writing prior to modifying any process or procedure contained
in the Manufacturing Standards or Specifications or changing the equipment used
in the manufacture of a Finished Product and/or Collaboration Product. Schering
shall have [c.i.] after receipt of DUSA's notice to determine whether or not
such modification or change will require affirmative approval of the FDA or
other health regulatory authority of a country in the Product Territory in which
the Finished Product and/or Collaboration Product is being marketed prior to
implementing the modification. If Schering determines that such modification or
change will not require such affirmative approval or fails to notify DUSA [c.i.]
period that Schering has determined that such approval is required, then DUSA
may proceed with such change or modification. If Schering determines that such
modification or change will require such affirmative approval in such countries,
then Schering shall have [c.i.] to approve such modification or change,
including securing the approval of the MAA holder for the affected Product
Territory.
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9.6.4 Third Party Complaints. If Schering communicates to
DUSA material objections by physicians, consumers, or health regulatory agencies
to the quality of a Collaboration Product, DUSA will review the batch
documentation, carry-out tests as necessary and present Schering the results
[c.i.] after receipt of notice of the objections from Schering, addressing in
detail the reasons for the defects and information on the measures taken by DUSA
to ensure that such defects will be prevented in the future.
9.6.5 Recalls and Withdrawals. In the event that Schering
or DUSA is required by any health regulatory agency to recall a Collaboration
Product, or the Parties mutually agree to withdraw a Collaboration Product from
any country in the Territory, in either case if the action is the result of a
breach of this Agreement by a Party, then that Party shall bear the expenses of
such recall or withdrawal, and otherwise [c.i.] shall [c.i.] for such costs.
Furthermore, each Party at its sole discretion and expense, after consultation
with the respective other Party, shall have the right to recall or withdraw a
Collaboration Product from any country in the Territory, provided, however, if
such recall or withdrawal is a result of a breach by a Party, then the breaching
Party shall bear the expenses of such recall or withdrawal. The foregoing does
not restrict either Party's ability to recover such costs from a third-party, in
which case any recovery shall [c.i.].
9.6.6 Lab-to-Lab Validation. Other than for the Initial
Product, DUSA shall conduct a lab-to-lab validation of all validated test
methods, involving those departments of Schering and DUSA which are responsible
for quality control. DUSA will confirm to Schering the successful lab-to-lab
validation in writing. This confirmation is the pre-condition for the use of the
test methods for quality testing and the release of Collaboration Products
(other than the Initial Product) by Schering. [c.i.] shall [c.i.] for [c.i.]
pursuant to this Section, which [c.i.] is not part of the Development Program.
9.6.7 Annual Product Reviews. DUSA shall conduct an annual
product review for annual evaluation of the quality standards for each
Collaboration Product to determine the need for changes in the Specifications or
manufacturing or control procedures. DUSA shall submit a copy of such annual
product review to Schering.
9.6.8 Stability Data. DUSA shall annually make available
to Schering copies of stability data for the Collaboration Products. Any
significant trends should be promptly reported.
9.7 Collaboration Product Acceptance/Rejection.
(a) Schering shall, promptly upon receipt of each
shipment perform customary inspection according to the inspection criteria laid
out in Exhibit 9.7. All shipments (i.e., quantities or packaging of Finished
Product and/or Collaboration Product) and [c.i.] shall be deemed correct unless
DUSA receives from Schering, [c.i.] after Schering's receipt of a given shipment
(except with respect to Finished Product and/or Collaboration Product containing
latent defects, in which case the [c.i.] shall commence at such time as Schering
becomes aware of such latent defects), a written notice specifying the shipment,
the purchase order number, and the exact nature of the discrepancy between the
order and the shipment or the exact nature of the discrepancy in the shipping or
other charges, as applicable.
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(b) DUSA shall, within the shortest possible time,
deliver replacement quantities of such Finished Product and/or Collaboration
Product to Schering , but [c.i.] after receipt of the returned Finished Product
and/or Collaboration Product. The replacement of returned Finished Products
and/or Collaboration Products shall have priority over the supply of Finished
Products Products and/or Collaboration Products ordered for shipment. DUSA shall
give Schering written instructions as to how Schering should, [c.i.], dispose of
or rework any non-conforming Finished Product and/or Collaboration Product, and
such instructions shall comply with all appropriate governmental requirements.
(c) DUSA shall analyze Finished Product and/or
Collaboration Product rejected by Schering for nonconformity and shall inform
Schering [c.i.] upon receipt of the rejected unit of Finished Product and/or
Collaboration Product of the results of the analysis, including DUSA's
determination of the reasons for the defect/nonconformity, if so confirmed by
DUSA, and the measures taken or to be taken to ensure that such
defect/nonconformity will not occur again. In the event that either Party
becomes aware that any shipment of Collaboration Product and/or Finished Product
has a nonconformity, despite DUSA's testing and quality assurance activities and
despite Schering's acceptance, such Party shall immediately notify the other
Party. In the event that Schering and DUSA agree (or there is an independent
finding) that any quantity of Finished Product and/or Collaboration Product
failed to comply with such Specifications and Manufacturing Standards at the
time of shipment to Schering, the [c.i.] will [c.i.]. In case of a disagreement
between the Parties, the claim shall be [c.i.] and [c.i.] to an [c.i.] which
[c.i.] or a [c.i.] within the [c.i.] mutually agreed upon by the Parties (the
"[c.i.]"), the [c.i.] of which shall not be unreasonably withheld or delayed by
either Party. The [c.i.] of such [c.i.] with respect to all or part of any
shipment of Finished Product and/or Collaboration Product shall be [c.i.] the
Parties. The [c.i.] of the [c.i.] making such [c.i.] shall be [c.i.] the [c.i.]
9.8 Documentation. DUSA agrees to comply with the following, provided
that Schering agrees to promptly reimburse DUSA for its costs of such compliance
(at DUSA's Cost of Goods, where applicable), to the extent this Section 9.8
imposes requirements greater than those required by the FDA, the Manufacturing
Standards or the Specifications:
(a) For Collaboration Products for
commercialization, DUSA shall retain appropriately identified reserve samples
that are representative of each lot in each shipment of each active ingredient.
The amount of samples retained shall be [c.i.] the quantity (in case of
Collaboration Products for use in the U.S.) and [c.i.] the quantity (in case of
Collaboration Products for use outside the U.S.) necessary for all tests
required to determine whether the active ingredient meets the Specifications,
except for sterilization and pyrogen testing. Schering shall be [c.i.] of the
retained reference samples, and they [c.i.] to Schering upon Schering's request.
DUSA shall retain the samples for [c.i.] after the [c.i.] of the [c.i.] of the
Collaboration Products containing the active ingredient. Thereafter, DUSA shall
[c.i.].
(b) For Collaboration Products for
commercialization, DUSA shall retain appropriately identified reserve samples
that are representative of each lot or batch of Collaboration Product and shall
store these under conditions consistent with product labeling. The samples shall
be stored in the same immediate container closure system in which the
Collaboration
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Product is marketed. The amount of samples retained shall be [c.i.] the quantity
(in case of Collaboration Products for use in the U.S.) and [c.i.] the quantity
(in case of Collaboration Products for use outside the U.S.) necessary for all
tests required to determine whether the Collaboration Product meets the
Specifications, except for sterilization and pyrogen testing. Schering shall be
[c.i.] of the retained reference samples, and they [c.i.] to Schering upon
Schering's request. DUSA shall retain the samples for [c.i.] after the [c.i.]of
the [c.i.] of the Collaboration Product. Thereafter, DUSA shall [c.i.]
(c) DUSA shall retain any production, control or
distribution record that is specifically associated with a batch of a
Collaboration Product for [c.i.] after the [c.i.] of the Collaboration Product.
(d) For Collaboration Products for development
purposes, DUSA shall retain the manufacturing records (including batch records)
and reports for [c.i.] after the Collaboration Product has received Marketing
Approval; or, if an MAA is not approved for the drug, until [c.i.] after
shipment and delivery of the Collaboration Product for investigational use is
[c.i.] and [c.i.]
(e) Each shipment of Finished Product and/or
Collaboration Product shall be accompanied by the following written
documentation: (A) the date of manufacture, (B) delivered amount of Finished
Product units (or bulk Collaboration Product, as the case may be), (C) a
certificate of analysis setting forth the results of tests performed by DUSA as
reasonably required by Schering in accordance with the Specifications and
Manufacturing Standards, (D) a certificate of compliance from DUSA, stating that
the Finished Products and/or Collaboration Product were manufactured in
compliance with the respective Specifications and Manufacturing Standards, that
the quality was tested according to the testing standards and Specifications and
that the results meet the agreed testing standards and Specifications as
provided for in the Marketing Approval, and (E) complete batch documentation for
manufacturing and packaging.
(f) DUSA will inform Schering by attachment to the
batch record in writing if DUSA determines there has been a substantive
deviation of a batch of Finished Product and/or Collaboration Product shipped to
Schering from the respective Manufacturing Standards, the manufacturing process,
the in-process controls or the testing or the Specifications. This duty of
information will not limit DUSA's contractual obligations under this Agreement.
9.9 Schering Right of Audit and Inspection. DUSA shall, upon written
request of Schering, permit Schering's authorized representatives (the number of
which is subject to any restrictions in DUSA's agreements with applicable
third-party manufacturers or suppliers) to audit and inspect the following: (i)
all manufacturing and quality control records for the manufacture of the
Finished Products and/or Collaboration Products; (ii) quality control records of
all starting materials and packaging materials used in the manufacture of the
Finished Products and/or Collaboration Product; (iii) all process, cleaning and
method validation documents associated with the manufacturing, packaging and
testing of the Collaboration Products; and (iv) all stability data for the
Collaboration Product; provided that, in each case (unless otherwise agreed)
such inspection shall be limited to the extent necessary to determine compliance
with cGMP, the applicable
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Manufacturing Standards and Specifications. In addition, Schering shall be
entitled during normal working hours and upon [c.i.] prior notice to DUSA to
audit and inspect all DUSA facilities utilized for the manufacture, storage or
quality control of Finished Products and/or Collaboration Products or such
facilities of any third party manufacturer or quality control operations engaged
by DUSA; provided that such inspection shall similarly be limited to determining
compliance of the facility and procedures applied with cGMP, the Manufacturing
Standards and Specifications, and in the number of authorized representatives.
DUSA shall promptly inform Schering in writing of the results of any inspection
by relevant authorities of manufacturing, storage, or quality control facilities
of DUSA or of any third party manufacturer and shall provide copies to Schering
of any FDA Form 483 observations, warning letters, field alerts and any
associated correspondence. All of Schering's representatives shall have agreed
to be bound by the confidentiality provisions of Article 17.
9.10 Suppliers.
9.10.1 Third Party Contractors. Without limiting DUSA's
responsibility under this Agreement, DUSA shall have the right at any time to
enter into agreements with third parties engaged to perform services or supply
facilities or goods in connection with the manufacture, testing, and/or
packaging of Finished Products (or Collaboration Products, as the case may be)
subject to sentences three and four of this Section 9.10.1. Schering
acknowledges that DUSA currently engages North Safety Products, Rhode Island, to
supply the Applicator and that DUSA intends to manufacture the Applicator
through a third party or itself as a second source of supply. Prior to using a
third party other than North Safety Products as the primary final producer of
Finished Product and/or Collaboration Product (i.e., not other vendors that
supply component parts or services) for DUSA with respect to units to be shipped
to Schering, DUSA shall notify Schering in writing [c.i.]; DUSA's use of such
alternative supplier [c.i.] to [c.i.] Schering, which [c.i.], and in any event
[c.i.] unless Schering establishes that such alternative supplier would not be a
competent subcontractor. In the event that Schering [c.i.] in writing, stating
the reasons [c.i.], [c.i.] after receipt of DUSA's notice, such alternative
supplier [c.i.] Schering. In any event DUSA shall use reasonable efforts to
undertake such manufacture or qualify a second source for supply of the
Applicator by the end of [c.i.]. DUSA shall ensure that all such facilities
comply with the applicable Manufacturing Standards and cGMP and that such
facilities are approved by FDA and will give Schering prior written notice, in
accordance with Section 9.6.3, of any such arrangement to the extent that such
arrangement would require changes to any Marketing Approval for the Territory.
9.10.2 Maintenance of Inventory. Until such time as DUSA
has qualified a second source for ALA besides the current supplier Sochinaz
S.A., Switzerland, DUSA agrees to maintain a level of inventory reasonably
calculated [c.i.] of ALA for supply of Collaboration Products or Finished
Products, as the case may be, to Schering, based on the minimum quantities that
Schering is obligated to order under Section 9.4 above, and taking into
consideration [c.i.] of Collaboration Products or Finished Products, as the case
may be, held by DUSA and by Schering and [c.i.] of bulk ALA held by DUSA for the
supply of Collaboration Products to Schering. Inventory held by [c.i.] shall be
[c.i.]
9.10.3 Schering Qualification. Schering [c.i.] to qualify
itself, or a third party on behalf of itself, as a supplier of ALA, subject to
DUSA's rights to supply Collaboration Products
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and [c.i.] of supply under the agreement between DUSA and Sochinaz S.A.
providing Sochinaz S.A. [c.i.] to supply ALA for [c.i.]. If Schering has
qualified itself as a second source of supply of ALA, upon Sochinaz S.A.'s
[c.i.] as supplier of ALA to DUSA, by way of [c.i.] between the parties or
otherwise, Schering may supply a portion of DUSA's requirements of ALA for use
in Collaboration Products and/or Finished Products to be supplied to Schering,
and provided that such supply is at a price, and on terms and conditions [c.i.]
to DUSA than DUSA could obtain elsewhere, and provided that both Schering and
DUSA agree, each at their own discretion, that Schering's acting as such a
supplier is in both Schering's and DUSA's best interests.
9.11 Invoicing. DUSA shall submit the respective invoice to Schering
upon shipment of Finished Products and/or Collaboration Products ordered by
Schering hereunder. All invoices shall be sent to Schering's address for notices
hereunder, and each such invoice shall state DUSA's Cost of Goods for Finished
Products and/or Collaboration Products in a given shipment, [c.i.] or [c.i.]
incident to the purchase or shipment [c.i.] but to [c.i.] pursuant to Section
[c.i.].
9.12 Shortage of Supply.
9.12.1 Joint Efforts.
(a) The Parties shall establish a committee (the
"Joint Manufacturing Committee") to oversee the manufacturing activities, and
formulate strategic manufacturing and capacity plans, relating to the production
of Collaboration Products for the applicable Product Territory and only with
respect to addressing such events. The Committee will consist of two
representatives from each Party but shall not be constituted until such time as
the events described in Section 9.12.1(b) have occurred. Decisions of the Joint
Manufacturing Committee shall be by majority approval, with an equal number of
representatives of both Schering and DUSA voting on the matter; provided,
however, if the Joint Manufacturing Committee cannot reach agreement on a
matter, the dispute shall be referred to a designated senior executive officer
of each Party with overall responsibility for the Collaboration Products, who
shall meet promptly and negotiate in good faith to resolve the dispute.
(b) If at any time DUSA becomes aware of a
deficiency in its manufacturing capabilities or the manufacturing capabilities
of any third party which is supplying DUSA, and concludes that such deficiency
will result in the inability to supply Schering's requirements for Finished
Products or Collaboration Products as required pursuant to Section 9.4, or the
Parties conclude the same, then in such event the Joint Manufacturing Committee
shall immediately convene to address the problem, which may include [c.i.] and
[c.i.] to [c.i.] and identifying other actions necessary to resolve the problem.
DUSA [c.i.] established by the Joint Manufacturing Committee to prevent
potential shortage.
(c) In the event there is a disagreement among the
Joint Manufacturing Committee that cannot be resolved by the senior executives
of DUSA and Schering as to commercially reasonable efforts that should be
undertaken to remedy or prevent a shortfall, the matter shall be resolved in
accordance with Section 20.2 below.
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9.12.2 Allocation. In the event that DUSA is selling or has
additional distributors of a Finished Product or a Collaboration Product (either
outside the Field or outside the applicable Product Territory) and, despite the
foregoing measures, is unable to supply all of the worldwide requirements of a
Finished Product or a Collaboration Product (on a product-by-product basis), if
any, and quantities ordered by Schering under Section 9.4 above due to force
majeure or otherwise, DUSA shall allocate the quantities of Finished Product
and/or Collaboration Product that DUSA has in inventory, and that DUSA is able
to produce, so that [c.i.] of available supplies as determined based on
reasonable forecasts (taking into consideration past sales and sales performance
against forecast) of Schering, DUSA and DUSA's other distributors.
9.12.3 Right to [c.i.]. If for any [c.i.] consecutive [c.i.], or
for [c.i.] out of any [c.i.] consecutive [c.i.], beginning [c.i.] after the
First Commercial Sale of the first Finished Product or the first Collaboration
Product, as the case may be, in the first Major Country (and such [c.i.] period
beginning again for each new Collaboration Product if such Collaboration Product
requires a significant change in the manufacturing process or for a change in
manufacturer of such Collaboration Product), DUSA [c.i.] Schering's requirements
of such Finished Product (and/or bulk Collaboration Product) as required
pursuant to Section 9.4, provided that [c.i.] or [c.i.] of [c.i.] of such
Finished Product or Collaboration Product, as the case may be, to the [c.i.] and
is [c.i.] to action or inaction of [c.i.], and the Joint Manufacturing Committee
determines that [c.i.] will [c.i.] the [c.i.] within [c.i.], then Schering
[c.i.] pursuant to Section 9.13 below the quantity of Finished Products or
Collaboration Products, as the case may be, for sale in the Territory for use
within the Field. Such right in such event shall [c.i.] for a period [c.i.] from
the date Schering [c.i.] a unit of Finished Product or Collaboration Product, as
the case may be, [c.i.] to Schering's [c.i.] as defined below under Section
9.13; provided that DUSA may [c.i.] of Schering prior to the end of [c.i.] if
DUSA agrees to [c.i.] Schering for the [c.i.] incrementally [c.i.] Schering in
establishing Schering's [c.i.] such Finished Products or Collaboration Products,
as the case may be, and provided further that Schering is able to [c.i.] which
Schering might have [c.i.], when DUSA provides Schering [c.i.] and demonstrates
that it is able to [c.i.] Schering's requirements of Finished Products or
Collaboration Products, as the case may be, for the Territory. A [c.i.]
Schering's requirements" shall mean, with respect to a particular Finished
Product and/or Collaboration Product, a [c.i.] Schering, in any [c.i.] such
[c.i.], [c.i.] of the lesser of: (i) [c.i.] Schering for such [c.i.] as
calculated based upon the [c.i.] by Schering under Section [c.i.] above prior to
such [c.i.] period, and (ii) the [c.i.] that DUSA is [c.i.] under Section [c.i.]
above for such [c.i.].
9.12.4 Exclusive Remedies: Disclaimer. EXCEPT FOR WILLFUL BREACH
BY DUSA OF ITS OBLIGATIONS TO SUPPLY SCHERING THE QUANTITIES OF FINISHED PRODUCT
AND/OR COLLABORATION PRODUCT ORDERED PURSUANT TO SECTION 9.4 ABOVE OR REQUIRED
BY SECTION 9.12.2 ABOVE, WHICHEVER IS LESS, (A) DUSA'S LIABILITY FOR ANY
MATERIAL BREACH BY DUSA OF ITS OBLIGATIONS TO SUPPLY FINISHED PRODUCT AND/OR
COLLABORATION PRODUCT TO SCHERING IN ACCORDANCE WITH THIS AGREEMENT SHALL NOT
EXCEED [c.i.] FOR DAMAGES UNDER THIS AGREEMENT AND SHALL NOT EXCEED [c.i.] FOR
DAMAGES WITH RESPECT TO [c.i.] FOR A TOTAL NOT TO EXCEED [c.i.], AND (B) DUSA
SHALL NOT BE LIABLE FOR [c.i.] DAMAGES INCURRED BY SCHERING AS A RESULT OF SUCH
A FAILURE.
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9.13 Schering's [c.i.] DUSA hereby [c.i.] Schering, and Schering
hereby [c.i.] (the "[c.i.]") under [c.i.] necessary to [c.i.] anywhere in the
world (which [c.i.]) for [c.i.] within the Field in the applicable Product
Territory. Such [c.i.] shall be subject to all other terms and conditions of
this Agreement and the following:
9.13.1 Exercise of [c.i.]. Schering agrees to [c.i.] under the
[c.i.], only to the extent expressly permitted in Section 9.12.3 above or
Section 19.4.2(c) below. In such event, DUSA shall provide to Schering, no later
than [c.i.], copies of all documentation within DUSA's control that is
reasonably necessary for Schering to [c.i.] Finished Products and/or
Collaboration Products, and shall reasonably cooperate with Schering to
establish [c.i.], including [c.i.]. In the event that Schering has Collaboration
Products [c.i.], such [c.i.] shall enter into a [c.i.] with DUSA to protect
against the [c.i.] and [c.i.] of DUSA's [c.i.].
9.13.2 [c.i.]. In the event of [c.i.] by or under authority of
Schering pursuant to the [c.i.], Schering's [c.i.] to DUSA, set forth in Section
[c.i.] of this Agreement shall not be operative. Instead, Schering [c.i.] to
DUSA an [c.i.] (the "[c.i.]") on [c.i.] of such Collaboration Products by
Schering, its Affiliates and Sublicensees, which [c.i.] shall be [c.i.] to
[c.i.] that would have been [c.i.] under Article [c.i.] below, [c.i.] of [c.i.]
by Schering or a third party pursuant to this Section 9.13.
9.14 Supply of Light Source. The Parties have entered into a separate
agreement governing supply of the Light Source in the U.S. as of the Execution
Date in connection with the Initial Product. The Parties agree that
Collaboration Products may be promoted with alternate light sources, but for
safety and health regulatory reasons, such alternate light sources must be of
similar safety and efficacy and approved by the appropriate regulatory
authorities, the Collaboration Products must be specifically labeled for use
with such alternate light sources, and the protocols used to gather data for
approval of the light source must have been approved by the Development
Committee. It is understood and agreed that any [c.i.] with respect to [c.i.]
shall be the [c.i.] and shall not be included as part of the Development Program
unless otherwise agreed in writing.
ARTICLE 10
COLLABORATION PRODUCT PAYMENTS TO DUSA
10.1 Prices. The supply price to Schering for each of the Collaboration
Products shall be as follows (the "Supply Price", which shall mean, as
applicable, the Commercial Supply Price, Minimum Supply Price or Samples Supply
Price).
10.2 Commercial Sales. With respect to Collaboration Products intended
for commercial sale, Schering shall pay to DUSA the amounts provided in 10.2.1
or 10.2.2, depending upon whether such Collaboration Products are sold for use
in the United States or countries other than the United States.
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10.2.1 U.S. Sales. For Collaboration Products that are sold for
use in the U.S., the Supply Price shall be equal to the sum of the amounts set
forth in (a) and (b) below for U.S. sales, (the "Commercial Supply Price"):
(a) an amount equal to [c.i.] of the Net Sales price of such
unit of Collaboration Product (the "Product Component"); plus
(b) an amount equal to a percentage of the Net Sales price of
such unit of Collaboration Product, with such percentage determined in
accordance with the following percentages of Annual U.S. Net Sales in the
particular calendar year (the "Royalty"):
Annual U.S. Net Sales Royalty
--------------------- -------
[c.i.] of Annual U.S. Net Sales [c.i.] of such Annual U.S.
Net Sales
Annual U.S. Net Sales greater [c.i.]of such Annual U.S.
than [c.i.] Net Sales
Annual U.S. Net Sales greater [c.i.] of such Annual U.S.
than [c.i.] Net Sales
10.2.2 ROW Sales. With respect to Collaboration Products sold for
use in a country other than the U.S., the Supply Price shall equal the sum of
the amounts set forth in (a) and (b) below, subject to paragraphs (c) and (d)
below (the "Commercial Supply Price").
(a) [c.i.] of such Collaboration Products; plus
(b) the Applicable Percentage (as defined below) of the
Total Gross Margin (as defined below) from sales of such Collaboration Product
in such country (the amount calculated by multiplying the Applicable Percentage
by the Total Gross Margin being referred to as the "Gross Margin Percentage").
For such purposes:
(i) The "Total Gross Margin" means the Net Sales
of such Collaboration Product in the particular country, less DUSA's Cost of
Goods for such Collaboration Product.
(ii) The "Applicable Percentage" shall vary
depending upon the Annual ROW Net Sales during the particular calendar year, as
follows:
Annual ROW Net Sales Applicable Percentage
-------------------- ---------------------
[c.i.] of Annual ROW Net Sales [c.i.]
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Annual ROW Net Sales greater [c.i.]
than [c.i.]
Annual ROW Net Sales greater [c.i.]
than [c.i.]
(c) Notwithstanding the foregoing, for the [c.i.]
of Annual ROW Net Sales, the Commercial Supply Price for a unit of Collaboration
Product included in such Annual ROW Net Sales shall [c.i.] of the [c.i.] of such
unit (subject to Section 10.3 below).
(d) In addition, Schering may offset against the
Gross Margin Percentage from Net Sales of Collaboration Products in a particular
country up to [c.i.] of the Recoupable Development Costs (as defined below) for
such Collaboration Product in such country; provided that the amount of the
Gross Margin Percentage shall not be so reduced [c.i.]. However, this paragraph
(d) shall not apply with respect to any units of a Collaboration Product for
which the Commercial Supply Price is capped according to paragraph (c) above
(i.e., Section 10.2.2(c)). "Recoupable Development Costs" for a country means
[c.i.] by Schering [c.i.] with respect to the development of Collaboration
Products and obtaining Marketing Approvals in such country; provided that [c.i.]
costs that may be included in Recoupable Development Costs for all countries
combined in any particular calendar year may not exceed [c.i.] (and any such
costs so excluded [c.i.] and [c.i.] to Recoupable Development Costs [c.i.]).
Schering shall provide to DUSA [c.i.] after the end of each calendar year an
accounting of all Recoupable Development Costs for such Collaboration Product in
each country, and any costs that are not so included in such a report may not
later be included in Recoupable Development Costs. This paragraph (d) shall not
operate to reduce the Supply Price below the applicable Minimum Supply Price.
10.2.3 Certain Terms. For purposes of this Agreement, "Annual
U.S. Net Sales" shall mean all Net Sales of all Collaboration Products hereunder
(i.e., combined) that are sold for use in the U.S. in the calendar year; and
"Annual ROW Net Sales" shall mean all Net Sales of Collaboration Products
hereunder (combined) that are sold for use in the Product Territory outside the
U.S. in the calendar year. Units of Collaboration Product shall be considered
sold when the units are invoiced to a customer. It is understood that if the
Cost of Goods for units of a Collaboration Product shall be determined on a unit
by unit basis, so that if the Cost of Goods for units of a Collaboration Product
sold for use in a particular country is different from the Cost of Goods for
another country, the actual Cost of Goods of the particular unit shall be used
for purposes of this Article 10. Where Cost of Goods is referred to in this
Article 10, it is understood that such term refers to the Cost of Goods of the
Collaboration Product in the form of Finished Product. For purposes of the
Agreement, references to the "Royalty" portion of the Supply Price shall refer
only to that portion of the Commercial Supply Price calculated on Annual U.S.
Net Sales under Section 10.2.1(b) above.
10.3 Minimum Supply Prices. Notwithstanding Section 10.2 above, the
Supply Price to be paid to DUSA for units of Collaboration Products sold for
commercial use during a calendar year shall not be less than the following
minimum price ("Minimum Supply Price"):
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10.3.1 U.S. Sales. For Collaboration Products sold for use in the
United States, the Minimum Supply Price shall be as follows:
(a) with respect to each Collaboration Product other than
the Initial Product, (i) the Minimum Supply Price shall equal [c.i.] for such
units [c.i.]of [c.i.], or (ii) for the Initial Product, the Minimum Supply Price
shall equal [c.i.]), [c.i.] of which represents payment of the Product Component
and [c.i.] of which represents the Royalty.
(b) The Minimum Supply Price set forth in clause (ii) of the
preceding paragraph (i.e., Section 10.3.1(a)(ii)) for the Initial Product shall
be adjusted commencing at the end of each calendar year to reflect the aggregate
change, if such change is in excess of [c.i.]), in the Producer Price Index for
Pharmaceutical Manufacturers ([c.i.]) (the "PPI") during the preceding year. If
the change in the PPI during such period is [c.i.], then the PPI shall be
reviewed every year thereafter until the aggregate change since [c.i.] is
[c.i.], at which time such adjustment shall be made. Thereafter, the PPI shall
be reviewed every year and the Minimum Supply Price set forth in Section
10.3.1(a)(ii) shall be adjusted at the end of each such calendar year to reflect
the aggregate change, if such change is [c.i.], in the PPI during the period
since the immediately preceding adjustment. The Parties recognize that PPI
figures are published by the United States government, and that calendar year
figures are not available until some time after the end of the applicable
calendar year. As a result, year end adjustments will be made when PPI figures
are available, and will be retroactive to the beginning of the relevant calendar
year.
10.3.2 ROW Sales. For Collaboration Products sold for use in
countries other than the United States, the Minimum Supply Price shall equal the
[c.i.] for such Collaboration Product, plus [c.i.] of [c.i.] of such
Collaboration Product in such country. If Schering shall choose not to market a
Collaboration Product because the Minimum Supply Price would render such sales
as not commercially viable, such Collaboration Product shall be deemed an
Abandoned Product for the purposes of this Agreement, and DUSA agrees that it
[c.i.] the [c.i.] to any other third party [c.i.] any more [c.i.] than those
[c.i.] to Schering.
10.3.3 Certain Other Terms. Notwithstanding any other provision
of this Agreement, in no event shall the Commercial Supply Price paid to DUSA
under this Article 10 be less than the applicable Minimum Supply Price, and in
no event shall the Royalty be [c.i.] by [c.i.]).
10.4 Certain Quantities. With respect to quantities described in the
following Sections 10.4.1 through 10.4.3, the Supply Price shall be as follows:
10.4.1 Samples. With respect to Collaboration Products intended
for uses other than commercial sale, including without limitation as samples for
training programs, educational programs or customer demonstration (collectively,
"Samples") Schering shall pay to DUSA an amount [c.i.] for such Samples (the
"Samples Supply Price"); provided that units ordered as Samples shall be
designated as Samples at the time of order.
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10.4.2 Obsolete Inventory. With respect to any units of
Collaboration Products originally purchased for commercial sale that expire or
that are accidentally destroyed by Schering, Schering shall pay to DUSA [c.i.].
10.4.3 Clinical Trial Materials. The cost applicable to
Collaboration Products supplied for use in connection with the Development
Program shall be [c.i.] for such units and to the extent such materials are used
in the performance of the Development Program pursuant to the Development Plan
and Budget, the applicable cost shall be included within the Development Cost to
be reimbursed pursuant to Article 6 above.
10.5 Discounting. If Schering or its Affiliate or Sublicensee sells any
Collaboration Product to a customer who also purchases other products or
services from Schering, its Affiliates or Sublicensees, Schering agrees not to,
and to require its Affiliates and Sublicensees not to, discount or price the
Collaboration Products in a manner that would disadvantage the Collaboration
Products in order to benefit sales or prices of other products offered for sale
by Schering, its Affiliates or Sublicensees to such customer.
10.6 Payments. Payments due to DUSA under Sections 10.1 through 10.4
above shall be made as follows:
10.6.1 On Delivery. [c.i.] of delivery to Schering of each unit
of Finished Product and/or bulk shipment of Collaboration Product and invoice,
Schering shall pay to DUSA, [c.i.], on a [c.i.] basis.
10.6.2 Reconciliation.
(a) Not later than [c.i.] following the end of each [c.i.],
Schering shall: (i) deliver to DUSA a report summarizing the Net Sales of
Collaboration Products for such [c.i.] on a product-by-product and
country-by-country basis, such report also setting forth a calculation of the
Supply Price for all quantities sold by Schering in such [c.i.]; and (ii) pay to
DUSA an amount equal to the Supply Price sold in such [c.i.], less the amount
paid as [c.i.] pursuant to 10.6.1 above with respect to such units.
(b) Not later than [c.i.] following the end of each [c.i.],
Schering shall prepare and deliver to DUSA a final report summarizing the Net
Sales of Collaboration Products on a product-by-product and country-by-country
basis for the immediately preceding [c.i.]. The amounts paid pursuant to (a)
above for the applicable [c.i.] shall be reconciled to the Supply Price pursuant
to Sections 10.1 through 10.4 as determined using the actual Net Sales of
Collaboration Products for the applicable [c.i.] In the event the payments made
by Schering under (a) above for such [c.i.] are less than the amounts actually
payable under such Sections, Schering shall be required to pay to DUSA such
shortfall [c.i.] such [c.i.] sales report and reconciliation is due. In the
event the payments made by Schering under Section 10.6 and 10.6.2 (a) above for
such [c.i.] are greater than the amounts actually payable under such Sections,
DUSA shall be required to pay to Schering such excess [c.i.] after delivery of
the [c.i.] sales report and reconciliation.
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10.7 Adjustment to Commercial Supply Price [c.i.] In the event that:
(i) a Collaboration Product [c.i.], or [c.i.], [c.i.] with respect to the [c.i.]
included in a Collaboration Product for an approved indication in any country in
the applicable Product Territory during the term of this Agreement (e.g., due to
the [c.i.], and/or [c.i.]), (ii) [c.i.] are [c.i.] for [c.i.] in such country,
and (iii) such [c.i.] represents a [c.i.] for [c.i.] of [c.i.] of such
Collaboration Product and such [c.i.] in the aggregate, in such country in any
[c.i.], determined by the [c.i.] given for such Collaboration Product and such
[c.i.], in the aggregate, during such [c.i.] (as measured by a [c.i.] or other
mechanism agreed upon by the Parties) and Schering reasonably determines that
Schering is [c.i.] such [c.i.] (a "[c.i.]"), then Schering shall thereafter
[c.i.] to DUSA an adjusted Commercial Supply Price for Net Sales of such
Collaboration Product in such country [c.i.] to the [c.i.] in the [c.i.] or
[c.i.] of such Commercial Supply Price otherwise payable pursuant to Section
10.2.1(b) and pursuant to Section 10.2.2(b).
10.8 Undue Hardship. If the terms of this Article 10 impose an
unanticipated burden on Schering or DUSA, and in particular if such performance
would create a material, adverse imbalance of the economic result hereunder,
then the terms and conditions of this Article 10 shall be equitably adjusted by
the Parties to remedy such burden or imbalance.
ARTICLE 11
THIRD PARTY ROYALTIES
If, after the Execution Date, Schering and DUSA through the
Development Committee agree to utilize in connection with a Collaboration
Product other technologies licensed or acquired after the Execution Date from
third parties by DUSA, or by Schering, then Schering and DUSA shall share the
costs associated with acquiring such technologies including any royalties,
license fees, or milestone payments due to third parties with respect to such
technologies as mutually agreed. It is understood that unless the Parties so
agree, such other acquired technologies or intellectual property shall be
excluded from the DUSA Technology for purposes of this Agreement. If the Parties
do agree to so utilize technologies or intellectual property licensed or
acquired from a third party, DUSA's and Schering's rights in such technologies
and intellectual property shall be, as between DUSA and Schering, as mutually
agreed in writing between them.
ARTICLE 12
PAYMENTS; BOOKS AND RECORDS
12.1 Payment Method. All payments under this Agreement shall be made by
bank wire transfer in immediately available funds to an account designated by
the Party to which such payments are due. All dollar amounts specified in this
Agreement, and all payments made hereunder, are and shall be made in U.S.
dollars. Any payments due under this Agreement which are not paid by the date
such payments are due under this Agreement shall bear interest to the extent
permitted by applicable law at the [c.i.] publicly announced by [c.i.]on [c.i.]
on the date such payment is due, [c.i.], computed on the basis of a three
hundred sixty (360) day year, actual days elapsed. The applicable interest rate
shall be adjusted each time there shall be a change in the [c.i.]
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announced by [c.i.]. This Section 12.1 shall in no way limit any other remedies
available to the Parties.
12.2 Currency Conversion. Where payments to DUSA by Schering under this
Agreement are based on Net Sales in countries other than the U.S., the amount of
such Net Sales expressed in the currency of each country shall be converted into
[c.i.] at the exchange rate of the last day of the applicable [c.i.]. The
applicable exchange rate will be the [c.i.] published by [c.i.]. If no [c.i.] is
determined for the relevant currency, the Parties shall agree upon another
reference rate. Finally, the [c.i.] shall be [c.i.] at the [c.i.] published by
the [c.i.] or a successor thereto, and on [c.i.] on the last day of the
applicable [c.i.].
12.3 Taxes. In the event that Schering is required to withhold any tax
to the tax or revenue authorities in any country in the Territory regarding any
payment to DUSA due to the laws of such country, such amount shall be deducted
from the payment to be made by Schering and Schering shall notify DUSA and
promptly furnish DUSA with copies of any tax certificate or other documentation
evidencing such withholding. Each Party agrees to cooperate with the other Party
in claiming exemptions from such deductions or withholdings under any agreement
or treaty from time to time in effect. Likewise, if DUSA has the legal
obligation to collect and/or pay any sales, use, excise or value added taxes,
the appropriate amount shall be added to Schering's invoice and paid by
Schering, unless Schering provides DUSA with a valid tax exemption certificate
authorized by the appropriate taxing authority.
12.4 Records; Inspection
12.4.1 Schering. Schering shall keep, and require its Affiliates
and Sublicensees to keep, complete, true and accurate books of accounts and
records for the purpose of determining the amounts payable pursuant to this
Agreement. Such books and records shall be kept at the principal place of
business of Schering, its Affiliates and Sublicensees for [c.i.] following the
end of the [c.i.] to which they pertain. Such records will be open for
inspection during such [c.i.] by an independent auditor chosen by DUSA and
reasonably acceptable to Schering for the purpose of verifying the amounts
payable by Schering hereunder Such inspections may be made no more than [c.i.],
at reasonable times and on reasonable notice. The independent auditor shall be
obligated to execute a reasonable confidentiality agreement prior to commencing
any such inspection. Inspections conducted under this Section 12.4.1 shall be at
the expense of DUSA, unless a variation or error producing an underpayment in
amounts payable [c.i.] of the amount paid for any period covered by the
inspection is established in the course of any such inspection, whereupon all
costs relating to the inspection for such period and any unpaid amounts that are
discovered shall be paid by Schering, together with interest on such unpaid
amounts at the rate set forth in Section 12.1 above. The Parties will endeavor
to minimize disruption of Schering's normal business activities to the extent
reasonably practicable.
12.4.2 DUSA. DUSA shall keep complete, true and accurate books of
accounts and records for the purpose of determining payments due pursuant to
this Agreement. Such books and records shall be kept open at the principal place
of business of DUSA and be for [c.i.] following the end of the [c.i.] to which
they pertain. Such records will be open for inspection during such [c.i.] by
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an independent auditor chosen by Schering and reasonably acceptable to DUSA for
the purpose of verifying the amounts payable by Schering hereunder. Such
inspections may be made no more than [c.i.], at reasonable times and on
reasonable notice. Schering's independent auditor shall be obligated to execute
a reasonable confidentiality agreement prior to commencing any such inspection.
Inspections conducted under this Section 12.4.2 shall be at the expense of
Schering, unless a variation or error producing an overpayment in amounts
payable [c.i.] of the amount paid for any period covered by the inspection is
established in the course of any such inspection, whereupon all costs relating
to the inspection for such period and any overpaid amounts that are discovered
will be paid by DUSA, together with interest on such overpaid amounts at the
rate set forth in Section 12.1 above. The Parties will endeavor to minimize
disruption of DUSA's normal business activities to the extent reasonably
practicable.
ARTICLE 13
MARKETING EFFORTS
13.1 Marketing Efforts.
13.1.1 General. Schering agrees to use [c.i.] efforts (a) to
launch each Collaboration Product in each Key Market of each Region of the
applicable Product Territory, as soon as possible after receipt of Marketing
Approval for such Collaboration Product in such country, and in each other
country of the applicable Product Territory as soon as [c.i.]; and (b) after the
First Commercial Sale of a Collaboration Product in a country of the applicable
Product Territory within the Field, maximize Net Sales in such country.
13.1.2 Minimum Royalties.
(a) Without limiting the foregoing, in the event that the
sum of the Royalties and Gross Margin Percentage paid to DUSA by Schering with
respect to all Collaboration Products (combined) sold by Schering throughout the
Product Territory in a particular Year (as defined below) fails to meet the
minimum amounts set forth below for such Year ("Minimum Royalties"), then DUSA
may terminate this Agreement upon [c.i.] notice; provided that such right of
termination shall not be operative (i) during any [c.i.] in which [c.i.] remains
in effect, or (ii) in the event Minimum Royalties were not achieved, Schering
makes payments to DUSA, [c.i.] after receipt of such termination notice, in the
amount of the shortfall between actual Royalties and Gross Margin Percentage and
the Minimum Royalty amounts set forth below for the respective period. Provided
further that [c.i.] to [c.i.] shall not apply if Schering's failure to achieve
Minimum Royalties is due to: (i) a [c.i.] to [c.i.] such Collaboration Products
as required under Article [c.i.]; or (ii) [c.i.] of the Light Source Agreement
which [c.i.] Schering's [c.i.] the Initial Product in the U.S.. In either case
the foregoing right of termination [c.i.] and [c.i.].
Minimum
Year Royalties
---- ---------
[c.i.] [c.i.]
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[c.i.] [c.i.]
[c.i.] [c.i.]
[c.i.] [c.i.]
[c.i.] [c.i.]
[c.i.] [c.i.]
(b) In addition to the provisions of paragraph (a) above,
the following shall apply:
(i) Beginning with Year 1, in the event that the
total Royalties and Gross Margin Percentage paid to DUSA by Schering with
respect to all Collaboration Products (combined) in a particular Year are less
than the Minimum Royalties for that year and Schering does not make up the
shortfall amount as provided by Section 13.2.1(a) above, then notwithstanding
any other provision of this Agreement, DUSA shall have the right (directly
and/or through third parties) to promote the Collaboration Products which have
been [c.i.] for a [c.i.], in the applicable Product Territory.
(ii) Should DUSA exercise its right to promote the
applicable Collaboration Product, it is understood that Schering [c.i.] the
[c.i.] to sell and distribute the applicable Collaboration Product in the
applicable Product Territories, so that DUSA's right to promote would be [c.i.]
of a [c.i.], in which DUSA and/or its designee promote the applicable
Collaboration Product (including the Initial Product),[c.i.]. It is further
understood, however, that DUSA will have the right to control the promotion
activities undertaken pursuant to this right.
(iii) In the event that DUSA exercises its right
to [c.i.] of a Collaboration Product pursuant to this Section 13.1.2(b), then
for each Year in which DUSA exercises such right, Schering shall pay to DUSA an
amount of the Co-Promotional Net Sales of such Collaboration Product in such
Year in the countries in which DUSA exercises such right which is proportional
to the level of effort expended by DUSA (relative to Schering) in exercising
such right, but in no event [c.i.] of such total amount. For such purposes,
"Co-Promotional Net Sales" shall mean the Net Sales of such Collaboration
Product in such country in such Year, less the Net Sales of the Collaboration
Product in such country in the Year immediately preceding the Year in which DUSA
first exercised its promotion right in such country. In the event that DUSA
exercises such right for less than a full Year, the Co-Promotional Net Sales
shall be calculated on a pro rata temporis basis. The Parties' relative level of
effort shall be measured by auditing and comparing the incremental costs
incurred by DUSA and Schering in promoting such Collaboration Product in the
countries in which DUSA has exercised such right. In particular, the incremental
costs for Schering will be determined by comparing its marketing costs for such
Collaboration Product in such countries before DUSA exercised its co-promotion
right to such Collaboration Products in such countries to its costs for the same
Collaboration Products and countries after DUSA's exercise of its co-promotion
right. Such comparison shall be completed [c.i.] after the end of each calendar
year in which DUSA exercises this right.
(c) For purposes of this Section 13.1, "Year 1" shall mean
the first calendar year in which the First Commercial Sale of the Initial
Product occurs, provided that if the
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first Commercial Sale occurs after September 30 of any year, "Year 1" shall be
the following calendar year; "Years" 2, 3, 4, 5, shall mean the successive
calendar years after Year 1.
(d) Such termination pursuant to this Section 13.1 shall be
effective [c.i.] written notice and shall be deemed a termination of the
Agreement under Section 19.3 below.
13.2 (a) Failure to File. Subject to Section 13.2.1, if Schering fails
to file an MAA in any country [c.i.] after the first filing of an MAA for such
Collaboration Product (except for the Initial Product, for which the period
shall be [c.i.] after [c.i.]) in the first Major Country, or if Schering
thereafter fails to continue using reasonable efforts to obtain and maintain a
Marketing Approval for such Collaboration Product in such country, then in
either such event such Collaboration Product shall be deemed an Abandoned
Product in such country; and such country shall be deemed an "Abandoned Country"
for such Abandoned Product. In addition, if Schering determines that it is
commercially unreasonable to file an MAA or thereafter maintain such MAA or
Marketing Approval for a Collaboration Product in any country of the Product
Territory on the terms of this Agreement, Schering may, upon reasonable notice
to DUSA, terminate its rights and obligations under this Agreement with respect
to such Collaboration Product for such country, and such country shall cease to
be a part of the Product Territory with respect to such Collaboration Product
for all purposes of this Agreement and all rights to distribute such
Collaboration Product in such country shall revert to DUSA as of DUSA's receipt
of Schering's notice of cancellation. This Section 13.2 shall not limit any
other remedies DUSA may have under applicable law.
(b) MAA Filing after Additional Trial. If, because of
marketing considerations or regulatory requirements in a specific country,
additional development activities for a Collaboration Product are necessary
before Schering can file an MAA for such Collaboration Product in such country,
then [c.i.] described under Section 13.2(a) shall not be applicable. Instead, a
period of [c.i.] is complete or [c.i.] after the clinical follow-up work on the
last patient of such trial is complete (as determined by the protocol for such
trial), whichever is less, shall be the applicable deadline for filing of such
MAA for such Collaboration Product in such country.
13.3 Failure to Sell. If Schering fails to launch a Collaboration
Product in any country [c.i.] from the date of Marketing Approval for such
Collaboration Product in such country, then such country shall be deemed an
Abandoned Country for such Collaboration Product and such Collaboration Product
shall be deemed an Abandoned Product in such country; provided that such failure
is not due to [c.i.] as required by Article [c.i.] (or due to [c.i.] of the
Light Source Agreement which [c.i.] the Initial Product in the U.S.). In
addition, if Schering determines that [c.i.] to [c.i.] of a Collaboration
Product in a particular country on the terms of this Agreement Schering may,
upon [c.i.] notice to DUSA, [c.i.] or [c.i.] in such country and such country
shall cease to be a part of the Product Territory for such Collaboration Product
for all purposes of this Agreement, and all rights to distribute such
Collaboration Product in such country shall revert to DUSA as of DUSA's receipt
of Schering's notice [c.i.] This Section 13.3 shall not limit any other remedies
DUSA may have under applicable law.
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13.4 Other. It is understood that if a country is deemed an Abandoned
Country under this Article 13 with respect to a Collaboration Product, such
Collaboration Product shall be deemed an Abandoned Product in such Abandoned
Country.
ARTICLE 14
INTELLECTUAL PROPERTY
14.1 Licenses to Schering. Subject to the terms and conditions of this
Agreement, including Article 9 above, DUSA hereby grants to Schering a license
under the DUSA Technology to (i) promote, market, sell, have sold, import and
otherwise distribute Collaboration Products for use solely within the Field in
the applicable Product Territory, and (ii) to carry out those activities
assigned to Schering under the Development Program in accordance with the
Development Plan and Budget in effect from time to time hereunder. The license
granted in (i) shall be exclusive, and the license granted in (ii) shall be
non-exclusive (it being understood that such non-exclusivity shall not limit
Schering's obligations under Section 16.2), and in each case shall include the
right to grant sublicenses, subject to the other terms and conditions of this
Agreement, including without limitation Section 8.5 above.
14.2 Ownership of Inventions. Title to all inventions and other
intellectual property made solely by Schering personnel in connection with the
Development Program shall be owned by Schering. Title to all inventions and
other intellectual property made solely by DUSA personnel in connection with the
Development Program shall be owned by DUSA. Title to all inventions and other
intellectual property made jointly by personnel of DUSA and Schering in
connection with the Development Program shall be jointly owned by Schering and
DUSA. Except as expressly provided in this Agreement, it is understood that
neither Party shall have any obligation to account to the other for profits, or
to obtain any approval of the other Party to license or exploit a joint
invention, by reason of joint ownership of any invention or other intellectual
property.
14.3 Patent Prosecution.
14.3.1 Solely Controlled.
(a) Prosecution by DUSA.
(i) DUSA and Schering shall establish a patent
review committee to consider joint funding of patent prosecution and maintenance
activities (e.g., the conducting of any interferences, re-examinations,
reissues, oppositions or requests for patent term extensions relating to the
DUSA Technology using counsel of its choice) for those core DUSA Patents listed
in Exhibit 14.3 and of prosecution and maintenance for those additional DUSA
Patents not listed in Exhibit 14.3 which DUSA brings forward, in its sole
discretion, to the committee. This patent review committee shall be composed of
an equal number of representatives from each of DUSA and Schering, with a total
number of members as the Parties may agree. Each of the Parties may replace its
members upon notice to the other Party. The patent review committee shall meet
on an ad hoc basis, as requested by DUSA upon reasonable notice.
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(ii) The patent review committee shall consider
those patent issues brought before it by DUSA and shall make recommendations, on
a majority basis, regarding any joint funding for the issues brought before it.
DUSA shall not be obligated to adopt the patent review committee's
recommendations, but such adoption, if it includes joint funding by the Parties,
shall obligate Schering to reimburse DUSA, [c.i.] of [c.i.] for such activities,
for [c.i.] of the costs [c.i.], however, if DUSA enters into a license agreement
or research and development collaboration with a third party or parties
involving products covered by a patent or patent application that is the subject
of such DUSA Patents and such third party pays a portion of the costs,
Schering's reimbursement shall be reduced proportionately on a pro rata basis
(e.g., Schering's percentage would be reduced to [c.i.] if DUSA enters into
[c.i.], or [c.i.] if DUSA enters into [c.i.]). Notwithstanding the foregoing, in
case the patent review committee does not reach agreement with respect to
funding patent related expenses for DUSA's core patents listed in Exhibit 14.3.
Schering's share of patent expenses related to DUSA's core patents shall be
[c.i.], unless a majority of the committee has a reasonable basis to allocate a
different share.
(iii) The Parties acknowledge that the DUSA
Patents listed in Exhibit 14.3 shall remain DUSA Patents for the purpose of this
Agreement regardless of whether or not Schering reimburses DUSA for
patent-related costs.
(iv) With respect to DUSA Patents or proposed
patents not listed in Exhibit 14.3, if the patent review committee does not
recommend joint funding for a proposed patent activity, then Schering shall not
be obligated to contribute a [c.i.] share of the resulting costs for such patent
activity and such patent shall be excluded from the terms of this Agreement (and
such patent or application (and any patents issuing on such application) shall
thereafter be excluded from the definition of DUSA Patents hereunder), and
Schering shall have no right or license under this Agreement with respect to
such patent or patent application (or any patent issuing thereon) ("Rejected
Patents"). Notwithstanding the foregoing, [c.i.] such Rejected Patents [c.i.] of
this Agreement by [c.i.] of the [c.i.] incurred by [c.i.] with respect to such
DUSA Patents from the date on which the patent review committee declined to
recommend joint funding of such Rejected Patent and [c.i.] of the [c.i.].
(v) Irrespective of recommendations of the patent
review committee, DUSA retains the right, at its expense, to control the
preparing, filing, prosecuting and maintaining of solely owned patent
applications and patents within the DUSA Technology worldwide, in such countries
as it deems appropriate, and the conducting of any interferences,
re-examinations, reissues, oppositions or requests for patent term extensions
relating to the DUSA Technology using counsel of its choice. DUSA shall be
obligated to maintain the DUSA Patents listed in Exhibit 14.3 in those countries
where they have been filed as of the Execution Date.
(b) Prosecution by Schering. In the event that DUSA declines
to file or, having filed, declines to further prosecute and maintain any such
patent applications or patents in accordance with 14.3.1(a) above, or conduct
any interferences or oppositions, or request any re-examinations, reissues or
extensions of patent term with respect to the DUSA Patents, Schering shall have
the right to file, prosecute and maintain such patent applications or patents or
conduct
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such interferences, at its own expense, in the name of DUSA in any country. If
DUSA declines to pursue prosecution of a pending patent application in any
country, or not to maintain an issued patent in any country, it shall notify
Schering [c.i.] prior to the date the next action or filing is due to be taken
with respect to the subject patent application or patent. Notwithstanding the
foregoing, Schering shall not take any such action that could adversely affect a
patent or application owned by DUSA, unless such action is mutually agreed by
the Parties.
14.3.2 Joint Inventions. DUSA shall have the first right to
pursue patent or other intellectual property protection for inventions that are
owned jointly by Schering and DUSA under Section 14.2 above. To exercise this
right, DUSA shall propose such action to the patent review committee (as
established by Section 14.3.1(a)). If the committee recommends joint funding,
Schering shall promptly reimburse DUSA for [c.i.] of [c.i.] in connection with
such activities as they are incurred, and all right, title and interest in and
to such patent or application (as the case may be) and any patents issuing
thereon will be jointly owned. If the committee does not recommend such joint
funding and either Party chooses to pursue patent protection for such joint
invention in a particular country, then all right, title and interest in and to
such patent or application (as the case may be) and any patents issuing thereon
shall be owned by the Party pursuing such patent or application DUSA shall
notify Schering [c.i.] prior to the date the next action or filing is due to be
taken with respect to a jointly owned invention, patent application or patent,
as to whether DUSA intends to take any of the foregoing actions with respect to
such invention, patent application or patent. If, at that time, DUSA chooses not
to propose patent protection for such joint invention to the patent review
committee, then Schering may exercise its right hereunder to do so.
14.3.3 Cooperation. DUSA shall keep Schering reasonably
informed as to the status of patent matters pertaining to the DUSA Technology,
including providing to Schering upon request copies of any significant documents
that such Party receives from or sends to patent offices, such as notices of
interferences, re-examinations, oppositions or requests for patent term
extensions, all as reasonably requested by the other Party. DUSA and Schering
shall each cooperate with and assist the other in connection with such
activities.
14.4 Defense of Third Party Infringement Claims.
14.4.1 Defense. If the production, sale or use of any
Collaboration Product within the Field pursuant to this Agreement results in a
claim, suit or proceeding alleging patent infringement against DUSA or Schering
(or their respective Affiliates or Sublicensees) (collectively, "Actions"), such
Party shall promptly notify the other Party hereto in writing. The Party subject
to such Action shall have the exclusive right to defend and control the defense
of any such Action (including the conclusion of a potential settlement (but
limited to the rights granted pursuant to this Agreement)) using counsel of its
own choice, and the Action, subject to Sections 18.1 and 18.2, shall be at such
Party's own expense; provided, however, that the other Party may participate in
the defense and/or settlement thereof at its own expense with counsel of its
choice. The Party in the Action agrees to keep the other Party hereto reasonably
informed of all material developments in connection with any such Action.
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14.4.2 [c.i.]. [c.i.] shall have the [c.i.] the [c.i.] payable
to [c.i.] hereunder with respect to the Collaboration Product that is the
subject of such Action (including a [c.i.] pursuant to Section [c.i.]), [c.i.]
of [c.i.] in an Action, and [c.i.] of the [c.i.] such Action (including the
[c.i.] and other reasonable [c.i.]).
14.5 Enforcement. Subject to the provisions of this Section 14.5, in
the event that Schering reasonably believes that any DUSA Technology necessary
for the manufacture, use or sale of a Collaboration Product within the Field is
infringed or misappropriated by a third party or is subject to a declaratory
judgment action arising from such infringement in such country, in each case
with respect to the manufacture, sale or use of a product in the Territory with
application within the Field, Schering shall promptly notify DUSA. In such
event, DUSA shall have the initial right (but not the obligation) to enforce
DUSA Patents with respect to such infringement, or defend any declaratory
judgment action with respect thereto (for purposes of this Section 14.5, an
"Enforcement Action").
14.5.1 Initiating Actions. In the event that DUSA fails to
initiate an Enforcement Action to enforce the DUSA Patents, against a
commercially significant infringement by a third party in a country in the
Territory, which infringement consists of the manufacture, sale or use of a
product in the Field in such country, within [c.i.] of a request by Schering to
initiate such Enforcement Action, Schering may initiate an Enforcement Action
against such infringement with DUSA's prior written approval, which approval
shall not be unreasonably withheld. DUSA shall cooperate in such Enforcement
Action at Schering's expense, provided that Schering indemnifies DUSA against
any liability arising therefrom. The Party initiating or defending any such
Enforcement Action shall keep the other Party hereto reasonably informed of the
progress of any such Enforcement Action, and such other Party shall have the
right to participate with counsel of its own choice.
14.5.2 DUSA Enforcement. With respect to Enforcement Actions
initiated by DUSA in a country, with [c.i.] and [c.i.], Schering shall [c.i.] of
the costs and expenses (including [c.i.] and [c.i.]) of such Enforcement Action.
Any recovery received as a result of any Enforcement Action to enforce DUSA
Patents pursuant to this Section 14.5 shall be used first to reimburse the
Parties for the costs and expenses (including [c.i.] and [c.i.]) incurred in
connection with such Enforcement Action, and the remainder of the recovery shall
be shared (to the extent the same represents damages from sales of products
within the Field) equally between the Parties; provided, however, if either
Party initiates the Enforcement Action and the other Party does not agree [c.i.]
of the costs and expenses thereof, the non-funding Party shall not be entitled
to any amount recovered in such Enforcement Action to the extent the same
represents damages from sales of products within the Field.
14.6 Third Party Rights. The foregoing provisions of Sections 14.3
through 14.5 shall be subject to and limited by any agreements pursuant to which
DUSA acquired or licensed any particular DUSA Technology, all of which that
exist as of the Execution Date are listed on Exhibit 14.6.
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14.7 No Rights Beyond Collaboration Products. Except as expressly
provided herein, nothing in this Agreement shall be deemed to grant to Schering
rights in products or technology other than the Collaboration Products; nor
shall any provision of this Agreement, be deemed to restrict DUSA's right to
exploit any DUSA Technology in products other than Collaboration Products or
outside the Field or outside the Territory or applicable Product Territory.
14.8 Covenants. It is understood that, with respect to any particular
Collaboration Product, whether or not the manufacture, use or sale of such
Collaboration Product by DUSA and/or Schering in any country requires a license
under intellectual property rights of the other, neither DUSA nor Schering shall
market, sell or distribute a Collaboration Product anywhere in the world except
in accordance with this Agreement, including Article 8.
14.9 Patent Marking. Schering agrees to xxxx and have its Affiliates
and Sublicensees xxxx all patented Collaboration Products they sell or
distribute pursuant to this Agreement in accordance with the applicable patent
statutes or regulations in the country or countries of manufacture and sale
thereof.
ARTICLE 15
TRADEMARKS
15.1 Display. All packaging materials, labels and promotional materials
for the Initial Product sold in the U.S. shall display the Levulan Trademark and
the Kerastick Trademark, and the Parties shall agree as to which trademarks
shall be displayed on such labels and materials for other Collaboration Products
sold in the U.S. [c.i.] the trademarks to be displayed on packaging materials,
labels and promotional materials for Collaboration Products sold ex-U.S. In
addition, all such materials and labels shall display the trade name of Schering
and DUSA, it being understood that the [c.i.] name shall be the more prominently
displayed of the two names. The Schering trademarks, the Alternative Schering
Marks (as defined below), trade dress, style of packaging and the like with
respect to each Collaboration Product may be determined by Schering so as to be
consistent with Schering's standard trade dress and style.
15.2 License. DUSA hereby grants to Schering a [c.i.] license, to use
the Levulan Trademark, Kerastick Trademark and DUSA trade name (collectively,
the "DUSA Marks"), in each country of the Territory for the term of this
Agreement in connection with the marketing and promotion of Collaboration
Products for use and sale within the Field as contemplated in this Agreement.
Such license shall be exclusive for use and sale within the Field. DUSA shall
grant Schering a [c.i.] license to use such additional trade names as may be
developed by DUSA for Collaboration Products pursuant to this Agreement, which
shall also be included within the DUSA Marks. The ownership and all goodwill
from the use of the DUSA Marks shall vest in and inure to the benefit of DUSA.
DUSA reserves all rights not expressly granted herein.
15.3 Registration. DUSA agrees to file, register and maintain a
registration for the DUSA Marks in such countries of the Territory listed in
Exhibit 15.3 hereto and such other countries as are agreed by the Parties, for
the term of this Agreement, at DUSA's expense, for use with Collaboration
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Products. In those countries of the Territory where "Levulan" or "Kerastick" is
not selected [c.i.] for use and registration in connection with Collaboration
Products, Schering will develop, file, register and maintain a registration for
such alternative trademark [c.i.] In such event, such alternative xxxx shall be
deemed an "Alternative Schering Xxxx", and, notwithstanding the other Sections
of Article 15, the following provisions shall apply:
(i) Schering shall xxxxx XXXX a royalty-free license for the
term of this Agreement to use such Alternative Schering Marks for each
Abandoned Product in each Abandoned Country in which they are registered.
Goodwill from the use of the Alternative Schering Marks shall vest in and
inure to the benefit of Schering.
(ii) DUSA agrees that at no time during or after term of this
Agreement will DUSA challenge or assist others to challenge the Alternative
Schering Marks or the registration thereof or attempt to register any
trademarks, marks or trade names confusingly similar to such Alternative
Schering Marks.
15.4 Ownership. DUSA recognizes the exclusive ownership by Schering of
any proprietary Schering name, logo, or trademark furnished by Schering (or
Schering's Affiliates) or Alternative Schering Xxxx for use in connection with
the Collaboration Products. DUSA shall not, during the term of this Agreement or
thereafter, register, use, or attempt to obtain any right in and to any such
name, logo, Alternative Schering Xxxx or trademark (other than those rights
granted herein) or in and to any name, logo or trademark confusingly similar
thereto. Schering hereby acknowledges DUSA's exclusive ownership rights in the
DUSA Marks, and accordingly agrees that at no time during or after the term of
this Agreement to challenge or assist others to challenge the DUSA Marks or the
registration thereof or attempt to register any trademarks, marks or trade names
confusingly similar to such DUSA Marks.
15.5 Recordation. In those countries where a trademark license must be
recorded, DUSA will provide and record a separate trademark license for Schering
for the DUSA Marks. Schering shall cooperate in the preparation and execution of
such documents. In those countries where a trademark license must be recorded,
Schering will provide and record a separate trademark license for DUSA for the
Alternative Schering Marks. DUSA shall cooperate in the preparation and
execution of such documents.
15.6 Xxxx Infringement. Each Party shall notify the other promptly upon
learning of any actual, alleged, or threatened infringement of a XXXX Xxxx or an
Alternative Schering Xxxx applicable to a Collaboration Product or of any unfair
trade practices, trade dress imitation, passing off of counterfeit goods, or
similar offenses.
15.7 Approval of Representation of DUSA Marks All representations of
DUSA Marks that Schering intends to use shall first be submitted to DUSA for
approval (which [c.i.]) of design, color, and other details or shall be exact
copies of those used by DUSA and shall in any event comply with DUSA's usage
guidelines as established from time to time. Schering shall submit
representative promotional materials, packaging and Collaboration Product using
any XXXX Xxxx
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to DUSA for DUSA's review and comment prior to their first use and prior to any
subsequent change or addition to such promotional materials.
15.8 Termination. Schering's right to use the DUSA Marks shall
terminate in each country of the Territory in which Schering's rights to
distribute the Collaboration Product are terminated in accordance with this
Agreement (subject to Section 19.4.3 below). Schering shall cooperate in the
cancellation of any trademark licenses recorded or entered into in such
countries. If Schering's rights to distribute a Collaboration Product in a
country in the Territory are terminated and an Alternative Schering Xxxx was
used in connection with the marketing and promotion of such Collaboration
Product in such country, then Schering shall execute an irrevocable assignment
of the Alternative Schering Xxxx in such country in favor of DUSA and cooperate
with DUSA in accomplishing such assignment, including any documents necessary to
transfer the registration of such Alternative Schering Xxxx in such country to
DUSA.
ARTICLE 16
REPRESENTATIONS AND WARRANTIES
16.1 General Warranties.
16.1.1 DUSA Warranties. DUSA warrants and represents to Schering
that:
(a) it has the full right and authority to enter into this
Agreement and grant the rights and licenses granted herein;
(b) it has not previously granted and will not grant any
rights in conflict with the rights and licenses granted herein;
(c) as of the date of the Agreement DUSA has not received
from a third party notice that the manufacture, sale or use of a Collaboration
Product within the Field would infringe any intellectual property rights of such
third party and to its knowledge and belief, no action, suit or claim has been
initiated or threatened against DUSA with respect to the DUSA Technology or
DUSA's right to enter into and perform its obligations under this Agreement,
other than the Japanese patent opposition received by DUSA on February 12, 1999
and previously disclosed to Schering;
(d) it has not previously granted, and will not grant during
the term of this Agreement, any right, license or interest in or to the DUSA
Technology, or any portion thereof, to manufacture, sell or use a Collaboration
Product that is in conflict with the rights or licenses granted under this
Agreement.
(e) to the best of its knowledge, as of the Execution Date,
it is not aware of any prior act or any fact which causes it to conclude that
any DUSA Patent is invalid or unenforceable, PROVIDED, HOWEVER, THAT DUSA
EXPRESSLY DOES NOT WARRANT THAT ANY DUSA PATENT IS VALID OR ENFORCEABLE;
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(f) it has complied in all material respects with each license
agreement under which DUSA obtained DUSA Technology including but not limited to
the PARTEQ License Agreement, and during the term hereof will comply in all
material respects, and use all reasonable efforts to keep in full force and
effect, each such license agreement; neither this Agreement, nor any of the
transactions contemplated hereby will, with the giving of notice, constitute a
default or breach of any such license agreement, and
(g) except for those agreements listed on Exhibit 14.6, (i) DUSA
has obtained all right, title and interest in and to the DUSA Technology and
(ii) the DUSA Technology is free and clear of any liens, encumbrances or rights
to repurchase, and is subject only to obligations of DUSA under the agreements
specified in Exhibit 14.6;
(h) during the term hereof, DUSA will not xxxxx x xxxx or other
encumbrances on any of the subject matter of this Agreement or on any of DUSA's
rights, benefits, or obligations hereunder or on the DUSA Technology, which
would conflict with the rights of Schering hereunder;
(i) it has provided to Schering all material Data and other
information in its possession or of which DUSA is aware as of the Execution
Date, concerning efficacy, side effects, injury, toxicity, or sensitivity,
reaction and incidents or severity thereof, associated with any preclinical use,
clinical use, studies, investigations, or tests with Collaboration Products
(humans or animals). Such disclosure includes information contained in publicly
available filings with the U.S. Securities and Exchange Commission;
(j) it has conducted or has caused its contractors or consultants
to conduct, and will in the future conduct, the preclinical and clinical studies
of Collaboration Products and those activities which it is responsible for under
the Development Program, in accordance with applicable United States law, known
or published standards of the FDA and with respect to future conduct, standards
of the EMEA specifically agreed upon by the Development Committee, as
applicable, and the scientific standards applicable to the conduct of such
studies and activities in the United States;
(k) it has employed and will in the future employ individuals of
appropriate education, knowledge, and experience to conduct or oversee the
conduct of DUSA's clinical and preclinical studies of Collaboration Products and
DUSA's activities under the Development Program;
(l) it has not employed (and, to the best of its knowledge, has
not used a contractor or consultant that has employed) and in the future will
not employ (or, to the best of its knowledge, use any contractor or consultant
that employs) any individual or entity debarred by the FDA (or subject to a
similar sanction of EMEA), or, to the best knowledge of DUSA, any individual who
or entity which is the subject of an FDA debarment investigation or proceeding
(or similar proceeding of EMEA), in the conduct of the preclinical or clinical
studies of Collaboration Products and DUSA's activities under the Development
Program; and
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(m) in the course of Developing Collaboration Products, it
has not conducted (other than as has been disclosed to Schering regarding
activities at Sochinaz S.A.), and during the course of this Agreement it will
not conduct, any material development activities in violation of good laboratory
and clinical practices and cGMP, in each case as applicable under the laws and
regulations of the country where such activities are conducted, and will conduct
such activities in accordance with Section 4.1.3(d).
16.1.2 Schering Warranties. Schering warrants and represents to
DUSA that (i) it has the full right and authority to enter into this Agreement
and grant the rights granted herein; (ii) to the best of its knowledge as of the
Execution Date, Schering is not engaged in contract negotiations with respect to
in-licensing or acquiring any specific product or technology in the Field; and
(iii) in the course of performing those activities assigned to it under the
Development Program, Schering will not conduct any material activities in
violation of good laboratory and clinical practices and cGMP, in each case as
applicable under the laws and regulations of the country where such activities
are conducted, and will conduct such activities in accordance with Section
4.1.3(d).
16.1.3 Mutual Warranty. Each Party warrants and represents to the
other that the Agreement is a legal and valid obligation binding upon such Party
and enforceable in accordance with its terms. The execution, delivery and
performance of the Agreement by such Party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a Party or by which
it is bound, nor to such Party's knowledge, violate any law or regulation of any
court, governmental body or administrative or other agency having jurisdiction
over it.
16.2 Mutual Covenants of Exclusivity. During the Term of the
Development Program, Schering covenants that neither Schering nor any of its
Affiliates shall research or develop a Collaboration Product outside the
Development Program or except as pursuant to this Agreement. Without limiting
the operation of Sections 3.2.3 and 3.3.2 above, during the Term of the
Development Program, DUSA covenants that neither DUSA nor any of its Controlled
Affiliates shall research or develop a Collaboration Product inside the Field
inside the applicable Product Territory except as is permitted herein.
16.3 Warranties Regarding Products. DUSA represents and warrants that:
(i) all quantities of Finished Products and/or Collaboration Products will
comply with all applicable Specifications and Manufacturing Standards at the
time of shipment to Schering and through the applicable expiration date; and
(ii) the Initial Product will be having a [c.i.] of [c.i.] from date of
shipping.
16.4 Notice.
16.4.1 DUSA agrees to provide Schering prompt written notice of
any condition or circumstance which DUSA concludes would likely give rise to a
condition of breach or any notice or in the event DUSA receives a notice of an
alleged breach by DUSA under the PARTEQ License Agreement which, if uncured,
would entitle PARTEQ to terminate the PARTEQ License Agreement. In such event,
if DUSA is [c.i.] Schering [c.i.] to [c.i.] to PARTEQ [c.i.] DUSA shall provide
Schering with [c.i.] to Schering's [c.i.] within [c.i.] of the Effective Date.
Schering shall
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[c.i.] against [c.i.] to PARTEQ or any other party to the extent [c.i.] were
[c.i.] to cure the default and were [c.i.] to PARTEQ or any other party [c.i.].
16.5 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR VALIDITY
OF ANY PATENTS ISSUED OR PENDING.
ARTICLE 17
CONFIDENTIALITY
17.1 Confidential Information. Except as expressly provided herein, the
Parties agree that the receiving Party shall not publish or otherwise disclose
and shall not use for any purpose any information furnished to it by the other
Party hereto pursuant to this Agreement which if disclosed in tangible form is
marked "Confidential" or with other similar designation to indicate its
confidential or proprietary nature or if disclosed orally is indicated orally to
be confidential or proprietary by the Party disclosing such information at the
time of such disclosure and is confirmed in writing as confidential or
proprietary by the disclosing Party within a reasonable time after such
disclosure (collectively, "Confidential Information"). Notwithstanding the
foregoing, Confidential Information shall not include information that, in each
case as demonstrated by written documentation:
17.1.1 was already known to the receiving Party, other than under
an obligation of confidentiality, at the time of disclosure or, as shown by
written documentation, was developed by the receiving Party independent of
disclosure by the disclosing Party;
17.1.2 was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving Party;
17.1.3 became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement; or
17.1.4 was subsequently lawfully disclosed to the receiving Party
by a person other than a Party or developed by the receiving Party without
reference to any information or materials disclosed by the disclosing Party.
17.2 Permitted Disclosures. Notwithstanding the provisions of Section
17.1 above, each Party hereto may disclose the other Party's Confidential
Information to the extent such disclosure is reasonably necessary to exercise
the rights granted to it, or reserved by it (including without limitation in the
case of Schering use of Data and DUSA Know-How to support marketing and sales
activities, public relations activities, professional services activities, and
medical education activities for Collaboration Products in the Field in the
applicable Product Territory), under this Agreement (including the right to
grant sublicenses, as applicable), prosecuting or defending litigation,
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complying with applicable governmental regulations, submitting information to
tax or other governmental authorities, or conducting clinical trials hereunder
with respect to Collaboration Products, provided that if a Party is required to
make any such disclosure of the other Party's Confidential Information, to the
extent it may legally do so, it will give reasonable advance notice to the
latter Party of such disclosure and, save to the extent inappropriate in the
case of patent applications or otherwise, will use its reasonable efforts to
secure confidential treatment of such information prior to its disclosure
(whether through protective orders or otherwise). If the Party whose
Confidential Information is to be disclosed has not filed a patent application
with respect to such Confidential Information, it may require the other Party to
delay the proposed disclosure (to the extent the disclosing Party may legally do
so), for [c.i.] to allow for the filing of such an application. This Article 17
shall not limit either Party's right under Article 7 to use and disclose Data.
17.3 Prior Non-Disclosure Agreements. Upon execution of this Agreement,
the terms of this Article 17 shall supercede any prior non-disclosure, secrecy,
or confidentiality agreement between the Parties.
ARTICLE 18
INDEMNIFICATION
18.1 Indemnification of DUSA. Schering shall indemnify and hold
harmless each of DUSA and its Affiliates and the directors, officers, and
employees of DUSA and such Affiliates and the successors and assigns of any of
the foregoing (the "DUSA Indemnitees"), from and against any and all
liabilities, damages, settlements, claims, actions, suits, penalties, fines,
costs or expenses (including, without limitation, reasonable attorneys' fees and
other expenses of litigation) (any of the foregoing, a "Claim") incurred by any
DUSA Indemnitee, arising from or occurring as a result of: (a) bodily injury or
death of a human being caused by the use, marketing, distribution or sale of any
Finished Product and/or Collaboration Product by Schering, its Affiliates or
Sublicensees in the applicable Product Territory, but solely to the extent that
such bodily injury or death arise out of or result from (i) the negligence or
willful misconduct of Schering, or (ii) the breach by Schering of any warranties
by Schering given in Article 16 above; or (b) infringement claims brought by
third parties with respect to DUSA's manufacture or preparation of Finished
Products and/or Collaboration Products hereunder or conduct of the Development
Program (subject to [c.i.] pursuant to Section 14.4.2 above); (c) breach of any
warranties by Schering in Article 16 above; or (d) the negligence or willful
misconduct of Schering in the performance of its obligations under this
Agreement.
18.2 Indemnification of Schering. DUSA shall indemnify and hold
harmless each of Schering and its Affiliates and Sublicensees and the directors,
officers, and employees of Schering and its Sublicensees and of such Affiliates
and the successors and assigns of any of the foregoing (the "Schering
Indemnitees") from and against any and all Claims incurred by any Schering
Indemnitee, arising from or occurring as a result of (a) bodily injury or
death of a human, being caused by the manufacture, marketing, use, distribution
or sale of any Finished Product and/or Collaboration Product, but solely to the
extent that such bodily injury or death arise out of or result from (i) such
Finished Product and/or Collaboration Product not having been manufactured in
compliance with the
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applicable Manufacturing Standards or not complying with the applicable
Specifications through its applicable expiration date; (ii) the negligence or
willful misconduct of DUSA, or (iii) the breach by DUSA of any warranties given
by DUSA in Article 16 above; (b) any breach of any warranty by DUSA in Article
16 above or (c) the negligence or willful misconduct of DUSA in the performance
of its obligations under this Agreement.
18.3 General Indemnification of DUSA. Schering shall indemnify and hold
harmless any of the DUSA Indemnitees from and against any and all Claims
incurred by a DUSA Indemnitee resulting from or arising out of the use,
marketing, distribution or sale of any Finished Product and/or Collaboration
Product (excluding in each case the Initial Product) by Schering, its Affiliates
or Sublicensees in the applicable Product Territory to the extent that such
Claims incurred by such DUSA Indemnitee are not within the provisions of Section
18.1 or 18.2 and to the extent that such Claim exceeds any amount recoverable by
the DUSA Indemnitee under any applicable DUSA Indemnitee insurance; [c.i.] that
Schering's liability under this Section 18.3 [c.i.] of such Claims incurred by
the DUSA Indemnitee.
18.4 General Information of Schering. DUSA shall indemnify and hold
harmless any of the Schering Indemnitees from and against any and all Claims
incurred by a Schering Indemnitee resulting from or arising out of the
manufacture, use, marketing, distribution or sale of any Finished Product and/or
Collaboration Product in the applicable Product Territory to the extent that
such Claims incurred by such Schering Indemnitee are not within the provisions
of Section 18.1 or 18.2 and to the extent that such Claim exceeds any amount
recoverable by the Schering Indemnitee under any applicable Schering Indemnitee
insurance; [c.i.] that DUSA's liability under this Section 18.4 [c.i.] of such
Claims incurred by the Schering Indemnitee.
18.5 Procedure. A Party that intends to claim indemnification under
this Article 18 (the "Indemnitee") shall promptly notify the other Party (the
"Indemnitor") in writing of any Claim, in respect of which the Indemnitee
intends to claim such indemnification, and except for matters described in
Section 18.1(b) above (which is subject to Section 14.4), the Indemnitor shall
have sole control of the defense and/or settlement thereof. The indemnity
arrangement in this Article 18 shall not apply to amounts paid in settlement of
any action with respect to a Claim, if such settlement is effected without the
consent of the Indemnitor, which consent shall not be withheld unreasonably. The
failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any action with respect to a Claim, if prejudicial to
its ability to defend such action, shall relieve such Indemnitor of any
liability to the Indemnitee under this Article 18 but the omission so to deliver
written notice to the Indemnitor shall not relieve the Indemnitor of any
liability that it may have to any Indemnitee otherwise than under this Article
18. The Indemnitee under this Article 18, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation of any action with
respect to a Claim covered by this indemnification.
18.6 Insurance. DUSA maintains and will continue to maintain a general
liability/product liability insurance policy providing coverage of at least
$1,000,000 per incident, $2,000,000 aggregate and $4,000,000 excess at its cost.
Schering shall obtain by the date of the first Marketing Approval for a
Collaboration Product, at its cost, a general liability/product liability
insurance policy providing coverage for damages in humans at a level which is
customary in the pharmaceutical
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industry and to maintain such insurance for the term of this Agreement. Schering
shall alternatively have the right to satisfy the obligation under this Section
18.6 through a reasonable program of self-insurance. Both Parties shall provide
written evidence of such insurance coverage to the other Party upon request.
ARTICLE 19
TERM AND TERMINATION
19.1 Term. This Agreement shall become effective as of the Execution
Date and, unless earlier terminated pursuant to the other provisions of this
Article 19, shall expire as follows:
19.1.1 Product-by-Product. As to each Collaboration Product in
each country in the applicable Product Territory, this Agreement shall expire on
the later of (i) [c.i.] after the First Commercial Sale of such Collaboration
Product in such country, or (ii) the date that neither the manufacture, sale nor
use of such Collaboration Product [c.i.] by a [c.i.] in such country.
19.1.2 Entire Agreement. This Agreement shall expire in its
entirety upon the expiration of this Agreement with respect to all Collaboration
Products in all countries in the Territory (it being understood, however, that
certain provisions of this Agreement shall survive, as expressly set forth in
Section 19.4.3 below).
19.2 Termination for Cause.
19.2.1 Breach. Either Party to this Agreement may terminate this
Agreement in the event the other Party shall have materially breached or
defaulted in the performance of any of its material obligations hereunder, and
such default shall have continued for [c.i.] after written notice thereof was
provided to the breaching Party by the non-breaching Party. The Parties agree
that [c.i.] of the [c.i.] which shall not have been cured within any applicable
cure period, shall be deemed a breach of this Agreement for purposes of this
Section 19.2.1. Any termination shall become effective at the end of such [c.i.]
unless the breaching Party (or any other Party on its behalf) has cured any such
breach or default prior to the expiration of the [c.i.] Notwithstanding the
foregoing, in the event of a non-monetary breach or default, if the default is
not reasonably capable of being cured within the [c.i.] cure period by the
breaching Party and such breaching Party is making a good faith effort to cure
such breach or default, the notifying Party may not terminate this Agreement,
provided, however, that the notifying Party may terminate this Agreement if such
breach or default is not cured within [c.i.] of such original notice of breach
or default. The right of either Party to terminate this Agreement as hereinabove
provided shall not be affected in any way by its waiver of, or failure to take
action with respect to, any previous default.
19.2.2 Termination for Insolvency.
(a) In the event that one of the Parties hereto shall be
declared insolvent or go into liquidation, a receiver or a trustee be appointed
for substantially all of the property or estate of that Party and said receiver
or trustee is not removed within sixty (60) days, or the Party makes a
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general assignment for the benefit of creditors (collectively, a "Bankruptcy
Event"), and whether any of the aforesaid Bankruptcy Events be the outcome of
the voluntary act of that Party, or otherwise, the other Party shall be entitled
to terminate this Agreement (or in the event DUSA suffers such a Bankruptcy
Event, Schering may effect its rights described in Section 19.2.2(b) forthwith
by giving a written notice to DUSA). Each Party agrees (to the extent it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim to take the benefit or advantage of, any stay or
extension law or any other law wherever enacted, now or at any time hereafter in
force, which would prohibit the termination of this Agreement or in any way
modify the effects thereof as provided herein; and each Party (to the extent it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the other Party, but will suffer and permit the
execution of every power as though no such law had been enacted.
(b) In the event of a Bankruptcy Event Schering may elect in
lieu of terminating this Agreement to declare the [c.i.] pursuant to this
Agreement [c.i.]. From the date of receipt of notice of such election, DUSA
shall have no further rights or obligations under this Agreement, except that
DUSA may enforce any financial obligations of Schering before or after such
election, and Schering may enforce any manufacturing and supply obligations of
DUSA; provided that if such election occurs prior to the First Commercial Sale
of a Collaboration Product, any [c.i.] and [c.i.] incurred by Schering to
Commercialize such Collaboration Product as a result of such election shall
[c.i.] by Schering to DUSA.
19.2.3 Termination Upon Change of Control. In the event (i) fifty
percent (50%) or more of DUSA's outstanding shares of stock entitled to vote for
the election of directors are acquired by a Major Pharmaceutical Company (by
purchase or merger); or (ii) this Agreement is assigned to a Major
Pharmaceutical Company pursuant to Section 20.7 below upon a sale of
substantially all of the assets of DUSA (either event (i) or (ii) being deemed
"Change of Control"); then in any such case Schering may terminate this
Agreement upon [c.i.] written notice to DUSA provided that such notice is given
within [c.i.] after the date DUSA gives Schering written notice of an event
described in (i) or (ii). A "Major Pharmaceutical Company" shall be any third
party (i) whose revenues from sales of pharmaceutical products, on a
consolidated basis in the last full fiscal year prior to the closing of the
Change of Control, were in excess of US $3 Billion; or (ii) that is engaged in
the pharmaceuticals business, whose shares are publicly traded, and whose market
capitalization based on shares outstanding as of the date of the closing of the
Change of Control exceeds US $3 Billion.
19.3 Termination Upon Notice. Schering may terminate this Agreement
[c.i.] written notice to DUSA, provided that such notice is given after [c.i.]
of the Execution Date. In addition, DUSA may terminate this Agreement as
described in Section 13.1.2 (which termination shall be deemed a termination
pursuant to this Section 19.3).
19.4 Effects of Expiration or Termination.
19.4.1 Accrued Obligations. Termination of this Agreement for any
reason shall not release any Party hereto from any liability which, at the time
of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude
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either Party from pursuing all rights and remedies it may have hereunder or at
law or in equity with respect to any breach of this Agreement.
19.4.2 Early Termination.
(a) If this Agreement is terminated pursuant to Section
19.3, or DUSA terminates this Agreement pursuant to Section 19.2.1 by reason of
a breach by Schering, Schering's funding obligation shall continue under Section
6.1 with respect to the Development Plan and Budget for Collaboration Products
then under development until completion of the then-current phase of
development, (i.e., Phase I, Phase II or Phase III) as applicable, for each such
Collaboration Product. In the event that the Development Plan and Budget in
effect at the time of termination does not extend through completion of the
applicable Phase to be completed for each Collaboration Product then being
developed under the Development Program, then the Development Costs to be
reimbursed under this Section 19.4.2 (a) shall be the costs that are incurred by
DUSA in completing the applicable Phase for each such Collaboration Product.
Schering shall not have rights to market any products so funded and no such
products shall be Collaboration Products for purposes of this Agreement.
(b) In the event of a termination by Schering pursuant to
Section 19.2.3 (Termination Upon Change of Control), the term "Collaboration
Products" shall include, for all purposes of this Agreement, only those products
within the Field for which Marketing Approvals have been obtained pursuant to
the Development Program; and the provisions of Articles 2, 7, 8 (other than
8.8), 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, and 20, and of Sections 4.3, 5.1.1,
5.2, 6.3, and 6.4, shall continue in full force and effect with respect to each
Collaboration Product until such time as the term specified in Section 19.1.1
with respect to such Collaboration Product expires (at which time, the
provisions of Section 19.4.3 shall apply).
(c) In the event Schering has the right to terminate this
Agreement pursuant to Section 19.2.1 by reason of a breach by DUSA (other than
by reason of a breach of Article 9), then in lieu of exercising that right,
Schering may elect to instead send a "Notice of Limitation" to DUSA, and to
continue, by its own efforts and at its sole expense, development and marketing
of certain Collaboration Products, as specified below. If Schering sends such
Notice of Limitation to DUSA, the term "Collaboration Products" shall include,
for all purposes of this Agreement, only those products within the Field which
are marketed by Schering or for which XXXx have been filed, or for which Phase
III clinical trials were continuing, in each case at the time of the Notice of
Limitation, pursuant to the Development Program or outside the U.S. under
Schering's direction and in accordance with Section 4.2; and the provisions of
Articles 2, 7, 8 (other than 8.8), 10, 12, 13, 14, 15, 16, 17, 18, 19, and 20,
and of Sections 4.3, 5.1.1, 5.2, 6.3 and 6.4, shall continue in full force and
effect with respect to each Collaboration Product until such time as the term
specified in Section 19.1.1 with respect to such Collaboration Product expires
(at which time, the provisions of Section 19.4.3 shall apply). Unless DUSA so
notifies Schering otherwise, Article 9 also shall continue in effect, and, if
DUSA notifies Schering that Article 9 will not so continue, then Section 9.13
shall survive and [c.i.] shall have [c.i.] the [c.i.]. Notwithstanding the
foregoing, however, Schering shall have the right to prepare and file XXXx in
[c.i.] for such Collaboration Products (i.e., notwithstanding Section [c.i.]
above) and [c.i.] shall be required under [c.i.] of
65--
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Section [c.i.]. Further, Schering shall have the [c.i.] the [c.i.] portion of
any Commercial Supply Price accruing to DUSA after such termination, [c.i.] of
the Recoupable Development Costs incurred by Schering for [c.i.], in the same
manner as is specified in Section [c.i.] above; provided that the [c.i.] may not
be so reduced by [c.i.].
19.4.3 Rights on Expiration. Upon the expiration, but not an
earlier termination, of this Agreement with respect to a particular
Collaboration Product:
(a) Sections 15.1, 15.3, 15.4,15.7 and 15.8 above shall
survive with respect to such Collaboration Product and the DUSA Marks, other
than the DUSA tradename, under which such Collaboration Product was being
marketed as of the date of such expiration; provided, however, that Schering
shall pay to DUSA a royalty equal to [c.i.] of the Net Sales of such
Collaboration Product ("Trademark Royalty"). Such payments shall be made [c.i.]
for so long as Schering retains rights to such DUSA Marks, and Article 12 above
shall survive with respect to such payment obligations. Schering shall have the
right to terminate its license to the DUSA Marks with respect to any particular
Collaboration Product upon [c.i.] notice to DUSA, in which case this Section
19.4.3 shall have no further force or effect from and after the effective date
of such termination (subject to Section 19.5 below).
(b) Sections 15.1, 15.3, 15.4, 15.7 and 15.8 shall
survive with respect to such Collaboration Product and the Alternative Schering
Marks under which such Collaboration Product was being marketed as of the date
of such expiration; provided, however that Schering shall pay to DUSA a
Trademark Royalty as defined above. Such payment shall be made quarterly for so
long as Schering continues to market and promote such Collaboration Product with
an Alternative Schering Xxxx, and Article 12 above shall survive with respect to
such payment obligations. Schering shall have the right to terminate its use of
the Alternative Schering Marks with respect to any particular Collaboration
Product upon [c.i.] notice to DUSA, in which case this Section
19.4.3 shall have no further force or effect from and after the Effective Date
of such termination (subject to Section 19.5 below).
(c) DUSA shall either continue to supply such Collaboration
Product to Schering in accordance with Articles 9 and 10 above, provided that if
competition from [c.i.] renders such Supply Price [c.i.] then the Supply Price
[c.i.] by mutual agreement so as to be competitive with [c.i.], or if DUSA does
not so elect, or the Parties are unable to agree, Schering shall have a [c.i.],
without the [c.i.], under [c.i.] to [c.i.] such Collaboration Product within the
Field in the Territory (subject to Schering's compliance with paragraph (a)
above with respect to such Collaboration Product). During the period in which
DUSA continues to supply a Collaboration Product to Schering under this Section
19.4.3(c), DUSA agrees that it shall not supply such Collaboration Product to
any third party.
19.4.4 Products in Inventory. Schering and its Affiliates and
Sublicensees shall have the right to distribute Collaboration Products in their
inventories or otherwise in their control as of the expiration or termination of
this Agreement for a period [c.i.] from such expiration or termination,
including pursuant to Section 19.4.3(a) and (b) (the "Trailing Period"), in all
cases subject to the Supply Price payment obligation under Article 10 above.
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19.4.5 Return of Materials. All trademarks, marks, trade names,
patents, copyrights, designs, drawings, formulas or other data, photographs,
samples, literature, and sales and promotional aids of every kind relating to
the Collaboration Products and received from or owned by DUSA shall remain the
property of DUSA. [c.i.] after expiration of the Trailing Period, Schering shall
destroy all tangible items bearing, containing, or contained in, any of the
foregoing, in its possession or control and provide written certification of
such destruction, or prepare such tangible items for shipment to DUSA, as DUSA
may direct, at DUSA's expense. Schering shall not make or retain any copies of
any Confidential Information of DUSA which may have been entrusted to it.
Effective upon expiration of the Trailing Period, Schering shall cease to use
all trademarks and trade names of DUSA. During the term of this Agreement and
after any termination or expiration of this Agreement, without limiting Section
19.5 below, DUSA shall have the right to continue to use and disclose for any
purpose customer lists, customer data and other customer information and any and
all Data relating to the Collaboration Products, which is or was provided or
required to be provided by Schering to DUSA pursuant to this Agreement.
19.4.6 No Renewal, Extension or Waiver. Acceptance of any order
from, or sale or license of, any Collaboration Product to Schering after the
effective date of termination or expiration of this Agreement shall not be
construed as a renewal or extension hereof, or as a waiver of termination of
this Agreement.
19.5 Survival. Articles 1, 17, 18, 19 and 20, and Sections 12.4, 14.2,
14.3.2, 14.3.3, 14.7, the last two sentences of Section 4.3.1(d) and the last
sentence of Section 15.2 and Section 15.3(i) of this Agreement shall survive
expiration or termination of this Agreement for any reason. Except as otherwise
provided in this Article 19 all rights and obligations of the Parties under this
Agreement shall terminate upon expiration or termination of this Agreement for
any reason; provided that the expiration or any termination of this Agreement
shall not release a Party from the obligations to make any payments that were
due or had accrued as to the effective date of such termination.
ARTICLE 20
MISCELLANEOUS
20.1 Governing Law, Venue. This Agreement and any dispute arising from
the performance or breach hereof shall be governed by and construed and enforced
in accordance with, the laws of the State of New York, U.S.A., without reference
to conflicts of laws principles. Any legal action arising under this Agreement
shall be brought in the United States District Court for the Southern District
of New York. The U.N. Convention on the Sale of Goods shall not apply to this
Agreement.
20.2 Particular Disputes.
20.2.1 Section 3.5 and 8.8 Disputes. The Parties agree that it is
important to be able to clarify any disputes regarding Section 3.5 or Section
8.8 quickly. Accordingly, in the event that Schering disputes DUSA's right to
proceed to grant any right or license to a third party, develop products or
otherwise proceed, based upon Section 3.52 or Section 8.8, Schering shall
initiate an
67--
75
arbitration proceeding under Section 20.2.3 below [c.i.] after Schering's
receipt of the Notice under Section 3.5, or the Initial Notice under Section
8.8, that is the subject of the dispute, or respectively, [c.i.] after DUSA
notifies Schering that DUSA believes that Section 3.5 or Section 8.8 above does
not apply to any subject matter or that such Section applies in any particular
manner. If Schering does not initiate such arbitration within such [c.i.] or
[c.i.], as applicable, Schering shall have no further right to dispute DUSA's
right to grant any right or license, or otherwise claim rights pursuant to
Section 3.5 or Section 8.8 in or relating to the product within the Field,
Collaboration Product or other subject matter that was the subject of such
dispute.
20.2.2 Arbitration. In the event of a dispute pursuant to Section
9.12.1(c), the matter shall be resolved pursuant to Section 20.2.3 below.
However, notwithstanding Section 9.12.1(c) such arbitration shall be conducted
as a "baseball" style arbitration, so that the only decision of the arbitration
shall be to adopt the proposal of either DUSA or Schering as to the measures
that DUSA must undertake to remedy or prevent a failure to adequately supply
Schering's requirements of Finished Products and/or Collaboration Products in
accordance with this Agreement. In no event, however, shall DUSA be obligated to
undertake measures that are not commercially reasonable or inconsistent with the
terms of this Agreement.
20.2.3 Procedures. Any dispute or claim (i) arising out of or in
connection with Section 8.8 of this Agreement or the performance or breach
thereof, (ii) the application of Section 8.9 or 9.12.1(c) or (iii) the sales
expectation for year three for an additional indication under Section 6.3.1
above, shall be finally settled by binding arbitration in New York, New York
under the Rules of American Arbitration Association by a single arbitrator
appointed in accordance with the Rules; provided however, that upon request by
either Party in the event of a claim or dispute as to the application of Section
8.9 or 9.12.1(c), such arbitration shall be conducted by a panel of three (3)
arbitrators chosen in accordance with such Rules. The decision and/or award
rendered by the arbitrators shall be written, final and non-appealable and may
be entered in any court of competent jurisdiction. The costs of any arbitration,
including administrative fees and fees of the arbitrators, shall be shared
equally by the Parties, unless otherwise determined by the arbitrators. Each
Party shall bear the cost of its own attorneys' and expert fees; provided that
the arbitrators may in their discretion award to the prevailing Party the costs
and expenses incurred by the prevailing Party in connection with the arbitration
proceeding. THE PARTIES AND ARBITRATOR SHALL USE ALL DILIGENT EFFORTS TO
COMPLETE ANY ARBITRATION OF A CLAIM OR DISPUTE DESCRIBED IN (i) ABOVE (I.E.,
WITH RESPECT TO SECTION 8.8) [c.i.] OF APPOINTMENT OF THE ARBITRATOR, AND TO
COMPLETE ANY ARBITRATION OF A CLAIM OR DISPUTE DESCRIBED IN (ii) ABOVE
(I.E.,WITH RESPECT TO SECTION 8.9) [c.i.] AFTER APPOINTMENT OF THE ARBITRATOR
(OR ARBITRATION PANEL, AS APPLICABLE).
20.3 Force Majeure. Nonperformance of any Party shall be excused to
the extent that performance is rendered impossible by strike, fire, earthquake,
flood, governmental acts or orders or restrictions, failure of suppliers, or any
other reason where failure to perform is beyond the reasonable control of the
nonperforming Party.
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20.4 No Implied Waivers; Rights Cumulative. No failure on the part of
DUSA or Schering to exercise and no delay in exercising any right under this
Agreement, or provided by statute or at law or in equity or otherwise, shall
impair, prejudice or constitute a waiver of any such right, nor shall any
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
20.5 Independent Contractors. Nothing contained in this Agreement is
intended implicitly, or is to be construed, to constitute DUSA or Schering as
partners in the legal sense. No Party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of any other Party or to bind any other Party to any contract, agreement or
undertaking with any third party. This agreement does not create a partnership
for USA federal income tax purposes (as defined in Section 761 of the USA
Internal Revenue Code), for any USA state or local jurisdiction, or in any
country other than the USA. Therefore there is no requirement to file Form 1065,
USA Partnership Return of Income, any similar USA state or local income tax
return, or any similar document with tax authorities in any country other than
the USA.
20.6 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by registered or
certified mail, return receipt requested, postage prepaid, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other Parties hereto:
Schering: Xxxxxxxx XX
X-00000
Xxxxxx, Xxxxxxx
Attn: Head, Center of Dermatology
With a copy to: Schering AG
X-00000
Xxxxxx, Xxxxxxx
Attn: Legal Department
DUSA: DUSA Pharmaceuticals, Inc.
00 Xxxxx Xxxxx,.
Xxxxxxxxxx, Xxxxxxxxxxxxx,
00000, XXX
Attn: D. Xxxxxxxx Xxxxxxx
Fax: 000-000-0000
with a copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
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20.7 Assignment. This Agreement shall not be assignable by either Party
to any third party hereto without the written consent of the other Party hereto;
either Party may assign this Agreement without the other Party's consent to an
entity that acquires substantially all of the business or assets of the
assigning Party (or that portion thereof to which this Agreement relates), in
each case whether by merger, acquisition, or otherwise (it being understood that
the foregoing shall not be deemed to limit Schering's rights under Section
19.2.3) the acquiring Party assumes this Agreement in writing or by operation of
law. In addition, either Party shall have the right to assign this Agreement to
an Affiliate upon notice to the non-assigning Party; provided that if the
non-assigning Party reasonably believes such assignment could result in material
adverse tax consequences to the non-assigning Party, such assignment shall not
be made without the non-assigning Party's consent.
20.8 Affiliate Assignment. Subject to the last sentence of Section 20.7
above, Schering may assign any of its rights or obligations under this Agreement
in any country to any of its Affiliates; provided, however, that such assignment
shall not relieve Schering of its responsibilities for performance of all of its
obligations under this Agreement. Schering shall promptly inform DUSA of such
assignment and the terms thereof. Any assignment under this Section must
obligate the assignee to the terms and conditions of this Agreement.
20.9 Modification. No amendment or modification of any provision of
this Agreement shall be effective unless in writing signed by all Parties
hereto. No provision of this Agreement shall be varied, contradicted or
explained by any oral agreement, course of dealing or performance or any other
matter not set forth in an agreement in writing and signed by all Parties.
20.10 Severability. If any provision hereof should be held invalid,
illegal or unenforceable in any jurisdiction, the Parties shall negotiate in
good faith a valid, legal and enforceable substitute provision that most nearly
reflects the original intent of the Parties and all other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the Parties hereto
as nearly as may be possible. Such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in
any other jurisdiction. In the event a Party seeks to avoid a provision of this
Agreement by asserting that such provision is invalid, illegal or otherwise
unenforceable, the other Party shall have the right to terminate this Agreement
[c.i.] prior written notice to the asserting Party, unless such assertion is
eliminated and the effect of such assertion cured within such [c.i.] period. Any
termination in accordance with the foregoing sentence shall be deemed a
termination pursuant to Section 19.2 and the Party who made such assertion shall
be deemed the breaching Party for purposes of applying Sections 19.4 and 19.5.
20.11 Publicity Review. Neither Party shall originate any written
publicity, news release or other announcement or statement relating to the
announcement or terms of this Agreement (collectively, a "Written Disclosure"),
without the prompt prior review and written approval of the other Party, which
approval shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, either Party may make any public Written Disclosure it believes in
good faith based upon the advice of counsel is required by applicable law, rule
or regulation or any listing or trading
70--
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agreement concerning its or its Affiliates' publicly traded securities;
provided, however, that such Written Disclosure shall minimize to the extent
possible the financial information disclosed, and that prior to making such
Written Disclosure, the disclosing Party shall provide to the other Party a copy
of the materials proposed to be disclosed and provide the receiving Party with
an opportunity to promptly review the Written Disclosure. Notwithstanding the
foregoing, the Parties shall agree upon a press release to announce the
execution of this Agreement, together with a corresponding Question & Answer
outline for use in responding to inquiries about the Agreement; thereafter,
Schering and DUSA may each disclose to third parties the information contained
in such press release and Question & Answer outline without the need for further
approval by the other.
20.12 Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed an original, and all of which together, shall
constitute one and the same instrument.
20.13 Headings. Headings used herein are for convenience only and shall
not in any way affect the construction of or be taken into consideration in
interpreting this Agreement.
20.14 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of DUSA and Schering are subject to prior compliance
with United States and foreign export regulations and such other United States
and foreign laws and regulations as may be applicable, and to obtaining all
necessary approvals required by the applicable agencies of the governments of
the United States and foreign jurisdictions. DUSA and Schering shall cooperate
with each other and shall provide assistance to the other as reasonably
necessary to obtain any required approvals.
20.15 Entire Agreement. This Agreement, the Light Source Agreement, the
Stock Purchase Agreement, the Guaranty, and the Credit Agreement, together with
all the Exhibits thereto, constitute the entire agreement, both written or oral,
with respect to the subject matter hereof, and supersede all prior or
contemporaneous understandings or agreements, whether written or oral, between
DUSA and Schering with respect to such subject matter.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be duly executed and delivered in duplicate originals as of the
date first above written.
DUSA PHARMACEUTICALS, INC. SCHERING AG
By: /s/ D. Xxxxxxxx Xxxxxxx By: /s/ Xxxxx Xxxxx
Name: D. Xxxxxxxx Xxxxxxx, MD, FRCPC Name: Xxxx. Xxxxx Xxxxx
Title: President and Chief Executive Officer Title: Vice Chairman of the
Board of Executive
Directors
By: /s/ Xxxx Xxxxx
Name: Xx. Xxxx Xxxxx
Title: Head of Center
of Dermatology
71--
79
By:
Name:
Title:
72--
80
EXHIBIT 1.4
AMINOLEVULINIC ACID HCL
[c.i.]
1--
81
EXHIBIT 1.17
DUSA PATENTS
82
EXHIBIT 1.17
DUSA PATENTS
-----------------------------------------------------------------------------------------------------------------------------------
ISSUED PATENTS
-----------------------------------------------------------------------------------------------------------------------------------
COUNTRY SERIAL NO. PATENT NO. FILING DATE ISSUE DATE TITLE
------------- ------------------- ------------- ------------ --------------- ------------------------------------------------------
U.S.A 07/386,414 5,079,262 07/28/89 01/07/92 Method of treatment and detection of malignant and
non-malignant lesions utilizing 5-aminolevulinic acid.
------------- ------------------- ------------- ------------ --------------- ------------------------------------------------------
U.S.A 07/783,750 5,211,938 10/28/91 05/18/93 Method of detection of malignant and non-malignant
lesions by photochemotherapy of protoporhyrin IX
precursors.
------------- ------------------- ------------- ------------ --------------- ------------------------------------------------------
U.S.A 07/865,151 5,234,940 04/08/92 08/10/93 Photchemotherapeutic method using 5-aminlevulinic acid
and precursors therof.
------------- ------------------- ------------- ------------ --------------- ------------------------------------------------------
U.S.A 08/082,113 5,422,093 06/28/93 06/06/95 Photochemotherapeutic method using 5-aminolevulinic
acid and precursors thereof.
------------- ------------------- ------------- ------------ --------------- ------------------------------------------------------
U.S.A 08/136,831 5,441,531 10/18/93 08/15/95 Illuminator and methods for photodynamic therapy.
Corres to Canada
2,108,654
------------- ------------------- ------------- ------------ --------------- ------------------------------------------------------
U.S.A 08/215,273 5,474,528 03/21/94 12/12/95 Combination controller and patch for the photodynamic
therapy of dermal lesion.
-----------------------------------------------------------------------------------------------------------------------------------
83
-----------------------------------------------------------------------------------------------------------------------------------
ISSUED PATENTS
-----------------------------------------------------------------------------------------------------------------------------------
U.S.A 08/215,274 5,489,279 03/12/94 02/06/96 Method of applying photodynamic therapy to dermal
lesion.
-------------- --------------------- ------------- ------------ ------------ ------------------------------------------------------
U.S.A 08/215,272 5,505,726 03/21/94 04/09/96 Article of manufacture for the photodynamic therapy of
dermal lesion.
-------------- --------------------- ------------- ------------ ------------ ------------------------------------------------------
U.S.A 08/466,427 5,782,895 06/06/95 07/21/98 Illuminator for photodynamic therapy.
-------------- --------------------- ------------- ------------ ------------ ------------------------------------------------------
U.S.A 08/921,664 5,856,566 09/02/97 01/05/99 Sterilized 5-aminolevulinic acid.
-------------- --------------------- ------------- ------------ ------------ ------------------------------------------------------
U.S.A 08/962,294 5,954,703 10/31/97 09/21/99 Method and Apparatus for Applying ALA
-------------- --------------------- ------------- ------------ ------------ ------------------------------------------------------
U.S.A 08/465,242 5,955,490 06/05/95 09/21/99 Photochemotherapeutic method using 5-aminlevulinic
acid and other precursors of endogenous porhyrins.
CIP of 08/092,925
-------------- --------------------- ------------- ------------ ------------ ------------------------------------------------------
Australia 60343/90 624,985 07/25/90 10/19/92 Method of detection and treatment of malignant and
non-malignant lesions by photochemotherapy.
Corres to USSN
07/386,414
-------------- --------------------- ------------- ------------ ------------ ------------------------------------------------------
Australia 38832/93 674,310 04/02/93 04/09/97 Photochemotherapeutic method using 5-aminolevulinic
acid and precursors thereof.
Corres to USSN
07/865,151
-----------------------------------------------------------------------------------------------------------------------------------
84
-----------------------------------------------------------------------------------------------------------------------------------
ISSUED PATENTS
-----------------------------------------------------------------------------------------------------------------------------------
New Zealand 251,284 251,284 04/02/93 11/10/97 Photochemotherapeutic method using 5-aminolevulinic
acid and precursors thereof.
Corres to USSN
07/865,151
-------------- --------------------- ------------ ------------ --------------- ----------------------------------------------------
Japan 02-510192 2731032 07/25/90 Granted, but Photochemotherapeutic Method
in opposition
Corres USSN
07/386,414
-------------- --------------------- ------------ ------------ --------------- ----------------------------------------------------
Korea 700294/1991 178277 07/25/90 Granted Method For Treating Skin Disorders With
Photochemotherapy
Corres USSN
07/386,414
-------------- --------------------- ------------ ------------ --------------- ----------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
FOREIGN AND PCT PATENT APPLICATIONS
-----------------------------------------------------------------------------------------------------------------------------------
COUNTRY SERIAL NO. PATENT NO. FILING DATE ISSUE DATE TITLE
-------------------- -------------------- ------------- ------------- ----------- -------------------------------------------------
Corresponding to USSN 07/386,414 (US Patent No 5,079,262)
-----------------------------------------------------------------------------------------------------------------------------------
Korea Divisional of 178277 Abandoned Method For Treating Skin Disorders With
Photochemotherapy
700294/1991
-------------------- -------------------- ------------- ------------- ----------- -------------------------------------------------
[c.i.]
-------------------- -------------------- ------------- ------------- ----------- -------------------------------------------------
-------------------- -------------------- ------------- ------------- ----------- -------------------------------------------------
Corresponding to USSN 07/865,151 (US Patent No 5,234,940)
-----------------------------------------------------------------------------------------------------------------------------------
[c.i.]
-------------------- -------------------- ------------- ------------- ----------- -------------------------------------------------
85
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
EPO 93907704 04/02/93 Abandoned
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
[c.i.]
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
New Zealand 314801 251284 05/13/97 Granted Photochemotherapeutic Method Using 5-Aminolevulinic
Acid and precursors thereof.
-----------------------------------------------------------------------------------------------------------------------------------
Corresponding to USSN 08/082,113 (US Patent No 5,422,093)
-----------------------------------------------------------------------------------------------------------------------------------
[c.i.]
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Corresponding to CASN 2,108,654
-----------------------------------------------------------------------------------------------------------------------------------
Israel 111,222 10/10/94 Abandoned
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
Mexico 9408,007 188009 10/10/94 Granted Illumination Lamp For Photodynamic Therapy
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
[c.i.]
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
[c.i.]
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Corresponding to USSNs 08/215,272, 08/215,273, 08/215,273
-----------------------------------------------------------------------------------------------------------------------------------
[c.i.]
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Corresponding to USSN 08/465,242
-----------------------------------------------------------------------------------------------------------------------------------
[c.i.]
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
[c.i.]
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Corresponding to USSN 08/962,294 (US Patent No 5,954,703)
-----------------------------------------------------------------------------------------------------------------------------------
[c.i.]
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
------------------------ --------------- ----------- ----------- ------------ -----------------------------------------------------
86
EXHIBIT 1.21
U.S. STANDARD PACKAGING AND LABELING
87
DRAFT SPECIFICATION
DUSA PHARMACEUTICALS, INC. WILMINGTON, MA
[c.i.]
[IMAGE]
[c.i.]
[IMAGES]
[c.i.]
88
EXHIBIT 1.38
INITIAL PRODUCT SPECIFICATIONS
[c.i.]
89
EXHIBIT 4.1.1
INITIAL PRODUCT PLAN
[c.i.]
90
EXHIBIT 8.1(b)
REGIONS KEY MARKETS
------- -----------
[c.i.]
91
EXHIBIT 8.6
INITIAL MARKETING PLAN
[c.i.]
92
EXHIBIT 9.3
SCHERING INITIAL FORECAST
[c.i.]
93
EXHIBIT 9.7
INITIAL PRODUCT INSPECTION CRITERIA
[c.i.]
94
EXHIBIT 14.3
CORE PATENTS
95
EXHIBIT 14.3
CORE PATENTS
#5,079,262 Method of detection and treatment of malignant and non-malignant
lesions utilizing 5-aminolevulinic acid (1/7/92)
#5,211,938 Method of detection of malignant and non-malignant lesions by
photochemotherapy of protoporhyrin IX precursors (5/18/93)
#5,234,940 Photchemotherapeutic method using 5-aminolevulinic acid and
precursors therof (8/10/93)
#5,422,093 Photochemotherapeutic method using 5-aminolevulinic acid and
precursors thereof (6/6/95)
#5,954,703 Method and Apparatus for Applying ALA (9/21/99)
96
EXHIBIT 14.6
THIRD PARTY LICENSORS
97
EXHIBIT 14.6
THIRD PARTY LICENSORS
Amended and Restated License Agreement, dated March 11, 1998, between DUSA and
PARTEQ
Co-Development Agreement, dated June 2, 1995, between DUSA and National
Biological Corporation
Purchase and Supply Agreement dated November 5, 1998, between DUSA and National
Biological Corporation
98
EXHIBIT 15.3
REGISTRATION OF DUSA MARKS
99
EXHIBIT 15.3
REGISTRATION OF DUSA MARKS
--------------------------------------------------------------------------------------------------------------------------------
REGISTRATION REGISTRATION APPLICATION APPLICATION APPLICATION
XXXX XXXX COUNTRY/TERRITORY DATE NUMBER PENDING DATE NUMBER
================================================================================================================================
DUSA Pharmaceuticals, Inc. United States 3/7/95 1,882,782
================================================================================================================================
Levulan United States 12/23/97 2,124,359
================================================================================================================================
Levulan Europe 2/1/99 572,263
================================================================================================================================
Kerastick United States XXX XXX x 10/27/97 75/379489
================================================================================================================================
Kerastick Europe XXX XXX x 04/26/99 001152347
================================================================================================================================
BLU-U United States XXX XXX x 10/27/99 75/379349
================================================================================================================================
BLU-U Europe XXX XXX x 04/26/99 001151844
================================================================================================================================
