Exhibit 10.2
TECHNOLOGY LICENSE AGREEMENT
This Technology License Agreement (this "Agreement") is
made as of the 5th day of September, 1997 between ALZA
Corporation, a Delaware corporation ("ALZA"), and Crescendo
Pharmaceuticals Corporation, a Delaware corporation
("Crescendo").
BACKGROUND
A. Crescendo has been formed for the purpose of
selecting and developing human pharmaceutical products,
including products using ALZA Technology (as defined
herein), and commercializing such products, most likely
through licensing to ALZA.
B. ALZA and Crescendo have entered into the
Development Agreement (as defined herein) for the selection
and development of such products and related activities.
C. ALZA is willing to grant to Crescendo a license to
use ALZA Technology solely for the purposes set forth above
on the terms set forth herein and in the Development
Agreement and the License Option Agreement (as defined
herein).
Now, therefore, the parties agree as follows:
1. Definitions.
For the purposes of this Agreement, the following
terms shall have the meanings set forth below:
1.1 "Affiliate" shall mean a corporation or any
other entity that directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under
common control with, the designated party. "Control" shall
mean ownership of at least 50% of the shares of stock
entitled to vote for the election of directors in the case
of a corporation, and at least 50% of the interests in
profits in the case of a business entity other than a
corporation.
1.2 "ALZA Technology" shall mean all Proprietary
Rights, whether patented or unpatented, owned by, licensed
to or controlled by ALZA, as of the date of this Agreement
or during the term of the Development Agreement, including
the Developed Technology and the Identified Product
Technology.
1.3 "Crescendo Product" shall mean an Identified
Product, or another human pharmaceutical product which has
been recommended by ALZA and accepted by Crescendo's
independent Board of Directors for development as such under
the Development Agreement.
1.4 "Developed Technology" shall mean Proprietary
Rights that (a) are first generated, conceived or reduced to
practice, as the case may be, by ALZA or by any third party
in the course of performing activities undertaken pursuant
to the Development Agreement or (b) are, in any manner,
acquired by, or otherwise obtained on behalf of, Crescendo
during the term of the Development Agreement from persons
other than ALZA and are necessary or useful to the
selection, development or commercialization of Crescendo
Products or Technical Evaluation Products.
1.5 "Development Agreement" shall mean the
Development Agreement dated as of the date hereof between
ALZA and Crescendo.
1.6 "Distribution" shall mean ALZA's distribution
of all of the outstanding shares of Class A Common Stock of
Crescendo to ALZA stockholders and debenture holders of
record on September 18, 1997.
1.7 "Identified Product Technology" shall mean
all ALZA Technology existing on the date of the closing of
ALZA's purchase of the outstanding shares of Therapeutic
Discovery Corporation relating to any Identified Product.
1.8 "Identified Products" shall mean, upon the
closing of ALZA's purchase of the outstanding shares of
Therapeutic Discovery Corporation, the following products:
OROSr oxybutynin, XXXXXX leuprolide, OROSr methylphenidate,
IUTS progesterone, D-TRANST testosterone matrix, E-TRANST
LHRH and E-TRANST (skin interface technology) insulin.
1.9 "Infringing Product" shall mean any product
sold by a third party which infringes or is alleged to
infringe any patent or patents licensed to Crescendo
hereunder and covering a Crescendo Product.
1.10 "License Agreement" shall mean an exclusive
license agreement for a particular Crescendo Product between
ALZA and Crescendo, entered into as a result of ALZA's
exercise of the License Option for such product.
1.11 "License Option" shall mean the option
granted to ALZA pursuant to the License Option Agreement.
1.12 "License Option Agreement" shall mean the
License Option Agreement dated as of the date hereof between
ALZA and Crescendo.
1.13 "Pre-Existing Rights" shall mean the rights
of Ciba-Geigy Limited or one of its Affiliates under those
certain agreements dated May 2, 1982 between ALZA and Ciba-
Geigy Limited or one of its Affiliates.
1.14 "Proprietary Rights" shall mean data,
inventions, information, processes, know-how and trade
secrets, and patents or patent applications claiming any of
the foregoing, owned by, licensed to or controlled by a
person and which such person has the right to license or
sublicense. Proprietary Rights shall not include
trademarks.
1.15 "Purchase Option" shall mean that certain
option contained
in Crescendo's Restated Certificate of Incorporation
pursuant to which ALZA has the right to purchase all of the
outstanding shares of Crescendo Class A Common Stock.
1.16 "Technical Evaluation" shall mean a limited
technical evaluation involving a proprietary therapeutic
agent of a third party undertaken in order to determine the
suitability of such therapeutic agent in an ALZA drug
delivery system or to induce the third party to license the
therapeutic agent to ALZA or Crescendo or otherwise
collaborate with ALZA and Crescendo in the development of a
product.
1.17 "Technical Evaluation Product" shall mean a
product, other than one which will become a Crescendo
Product, for which Crescendo funds a Technical Evaluation.
2. License.
2.1 Grant of License. ALZA hereby grants to
Crescendo, on the terms and conditions of this Agreement, a
worldwide, exclusive license (subject to the Pre-Existing
Rights), in perpetuity, with the right to sublicense (as set
forth below), to use the ALZA Technology to select and
develop Crescendo Products, to conduct related activities
(including Technical Evaluations), and to commercialize
Crescendo Products, but for no other purposes whatsoever.
Crescendo shall not sublicense any ALZA Technology to, or
enter into other arrangements with respect to any ALZA
Technology with, any third party for any purpose, except as
set forth in Sections 2.2 and 2.3 hereof.
2.2 Permitted Sublicenses.
(a) Except as set forth in Section 2.2(b)
hereof, Crescendo may grant sublicenses to ALZA and third
parties to use the ALZA Technology solely for the purpose of
performing activities in connection with the selection and
development of Crescendo Products and conducting related
activities (including Technical Evaluations); provided
however, that, during the term of the Development Agreement,
any such sublicenses shall be granted in accordance with the
terms of the Development Agreement.
(b) If the License Option with respect to
any Crescendo Product in one or more countries expires
unexercised, from and after expiration of such License
Option in any such country, Crescendo may sublicense ALZA
Technology to a third party or third parties solely to the
extent necessary to complete the development of, or to make
(or have made) and use such Crescendo Product, or to sell
(or have sold) such Crescendo Product in such country.
2.3 Conditions of Sublicenses. Each sublicensee
shall execute such agreements as ALZA reasonably deems
appropriate to protect
the ALZA Technology and to protect ALZA's rights under all
agreements between ALZA and Crescendo and under the Purchase
Option. Each sublicensee shall have all the duties of
Crescendo hereunder with respect to such sublicense, and
each sublicensee shall acknowledge these duties to ALZA in
writing. No sublicense shall have the effect of relieving
Crescendo of any of its obligations hereunder.
2.4 Prior and Future Grants. Crescendo
understands and acknowledges that ALZA is in the business of
developing products incorporating the ALZA Technology for
its own account and under arrangements with third parties,
and as a result, the license granted hereunder is limited
strictly to use the ALZA Technology for the purpose of
selecting and developing Crescendo Products and conducting
related activities (including Technical Evaluations) and
commercializing Crescendo Products. Crescendo acknowledges
that ALZA may use and may grant third party licenses to use
the ALZA Technology for any and all other purposes.
3. Covenants of Crescendo.
3.1 Diligence. Crescendo promptly shall commence
and shall use diligent efforts to develop Crescendo Products
in accordance with
approved work plans and cost estimates under the Development
Agreement, subject to ALZA diligently undertaking its
obligations thereunder.
3.2 Technology Fee. In consideration of the
license granted hereunder by ALZA to Crescendo to use the
Identified Product Technology, Crescendo shall pay ALZA in
arrears as follows:
(a) $1,000,000 thirty days after the later
of (i) the date of the Distribution and (ii) the date of the
closing of ALZA's purchase of outstanding shares of
Therapeutic Discovery Corporation, and $1,000,000 on the
same day of each of the next eleven months;
(b) $667,000 per month on the same day of
each of the next twelve months; and
(c) $333,000 per month on the same day of
each of the next twelve months;
provided, however, that once Crescendo has commenced payment
of the Technology Fee hereunder, such obligation will cease
on the date on which fewer than two of the Identified
Products are under development by Crescendo pursuant to the
Development Agreement and/or have been licensed to ALZA
pursuant to ALZA's exercise of the License Option.
4. Patents.
4.1 Infringement. Each party shall promptly
notify the other of any infringement or alleged infringement
known to such party of any patent covering ALZA Technology,
by the manufacture, development, use or sale by a third
party of any Infringing Product.
4.2 Action by ALZA. Subject to the provisions of
the Development Agreement and any License Agreement, in the
event of any such alleged infringement, ALZA shall have the
right, at its own expense and with the right to all
recoveries, to take appropriate action to restrain such
alleged infringement. If ALZA takes any such action,
Crescendo shall cooperate fully with ALZA in its pursuit
thereof, at ALZA's expense, to the extent reasonably
requested by ALZA. If ALZA brings an action under this
Section 4.2, the parties shall share equally any recoveries,
after ALZA is reimbursed for its expenses of bringing the
action (including reasonable attorneys' fees).
4.3 Action by Crescendo. If (a) the Infringing
Product is substantially similar to a Crescendo Product (in
that the Infringing Product incorporates the same active
therapeutic agent or agents as such Crescendo Product and,
in the case of a Crescendo Product that utilizes ALZA drug
delivery technology, a drug delivery system substantially
similar to the ALZA drug delivery system) for which the
License Option has expired unexercised, and (b) within 90
days after the written notice from either party described
above (or at any time thereafter), ALZA has not taken
appropriate action to restrain such alleged infringement,
and (c) at such time, the annualized unit sales volume of
such Infringing Product in a country over a period of at
least two calendar quarters, equals or exceeds 25% of the
annualized unit sales volume of the related Crescendo
Product in such country during the same period, then
Crescendo shall have the right, at its own expense and with
the right to all recoveries, to take such action as it deems
appropriate to restrain such alleged infringement. If
Crescendo takes any such action, ALZA shall cooperate with
Crescendo in its pursuit thereof, at Crescendo's expense, to
the extent reasonably requested by Crescendo. If the third
party in any such action brings a counteraction for
invalidation or misuse of a patent covering the ALZA
Technology or the Crescendo Product, Crescendo shall
promptly notify ALZA, and ALZA may, within six months after
the notification, join and participate in such action at its
own expense. Crescendo shall not settle any such action
relating to any alleged infringement which in any manner
would adversely affect ALZA Technology without the prior
written consent of ALZA.
5. Confidentiality of Information.
5.1 Confidentiality. During the term of this
Agreement and for a period of ten years following its
termination, Crescendo shall maintain in confidence all ALZA
Technology; provided, however, that nothing contained herein
shall prevent Crescendo from disclosing any ALZA Technology
to the extent such ALZA Technology (a) is required to be
disclosed in connection with developing Crescendo Products,
conducting Technical Evaluations, conducting related
activities, securing necessary governmental authorization
for the marketing of Crescendo Products, or directly or
indirectly making, using or selling Crescendo Products, as
permitted or provided for in the agreements between the
parties, (b) is required to be disclosed by law for the
purpose of complying with governmental regulations, (c) is
disclosed in connection with any sublicense permitted
hereunder, (d) is known to or used by Crescendo prior to the
date hereof (other than through disclosure by or on behalf
of ALZA) as evidenced by Crescendo's written records, (e) is
lawfully disclosed to Crescendo by a third party having the
right to disclose such information to Crescendo, or (f)
either before or after the time of disclosure to Crescendo,
becomes known to the public other than by an unauthorized
act or omission of Crescendo or any of Crescendo's employees
or agents. Any disclosure of ALZA Technology to third
parties shall be made subject to similar obligations of
confidentiality on the part of such third parties. The
obligations of Crescendo pursuant to this Section 5.1 shall
survive the termination of this Agreement for any reason.
Any breach of this Section 5.1 may result in irreparable
harm to ALZA, and in the event of a breach, ALZA shall be
entitled to seek injunctive relief (without the need to post
a bond) in addition to any other remedies available at law
or in equity.
6. Disclaimer.
6.1 Disclaimer Concerning ALZA Technology. ALZA
DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY (A) THAT ANY ALZA
TECHNOLOGY, OR THE USE THEREOF, OR ANY PRODUCTS
INCORPORATING OR MANUFACTURED BY THE USE THEREOF, WILL BE
FREE FROM CLAIMS OF PATENT INFRINGEMENT, INTERFERENCE OR
UNLAWFUL USE OF PROPRIETARY INFORMATION OF ANY THIRD PARTY
AND (B) OF THE ACCURACY, RELIABILITY, TECHNOLOGICAL OR
COMMERCIAL VALUE, COMPREHENSIVENESS OR MERCHANTABILITY OF
THE ALZA TECHNOLOGY OR ITS SUITABILITY OR FITNESS FOR ANY
PURPOSE WHATSOEVER INCLUDING, WITHOUT LIMITATION, THE
DESIGN, DEVELOPMENT, MANUFACTURE, USE OR SALE OF PRODUCTS.
ALZA DISCLAIMS ALL OTHER WARRANTIES OF WHATEVER NATURE,
EXPRESS OR IMPLIED.
7. Reports of Adverse Reactions.
7.1 Reports of Adverse Reactions. During the
term of this Agreement, each party shall promptly inform the
other party of any information that it obtains or develops
regarding the efficacy or safety of a Crescendo Product and
shall promptly report to the other party any information or
notice of adverse or unexpected reactions or side effects
related to the utilization or medical administration of a
Crescendo Product. Further, during the term of this
Agreement, each party shall promptly inform the other of any
information that it obtains or develops regarding the safety
of any ALZA Technology as related to the Crescendo Products.
Each such party shall permit the other to comply with the
adverse reaction reporting obligations under the United
States Food, Drug and Cosmetic Act, or similar statutory
provisions, and regulations thereunder and shall assist the
other party in complying therewith, with respect to the
Crescendo Products. When appropriate, the parties will
execute a standard operating procedure to cover the
foregoing. Crescendo agrees and acknowledges that ALZA may
provide information it obtains under this Section 7.1 to
ALZA's other clients developing and/or commercializing
products incorporating the same ALZA drug delivery systems
as are incorporated in the Crescendo Products.
8. Effective Date; Termination.
8.1 Effective Date. This Agreement shall become
effective on the date of the Distribution.
8.2 Termination for Breach. Either party may
terminate this Agreement effective upon the giving of
written notice of such termination to the other party in the
event such other party breaches any of its material
obligations hereunder or under the License Option Agreement
and such breach continues for a period of 60 days after
written notice thereof by the terminating party to the other
party.
8.3 Automatic Termination. This Agreement shall
automatically terminate upon termination by Crescendo of the
Development Agreement other than due to a breach by ALZA,
or upon termination by ALZA of the Development Agreement due
to a breach by Crescendo.
8.4 Termination of Sublicenses. Termination by
ALZA of this Agreement shall automatically terminate any
sublicenses granted by Crescendo hereunder.
9. Force Majeure.
9.1 Force Majeure. Neither party to this
Agreement shall be liable for failure or delay in the
performance of any of its obligations hereunder if such
failure or delay is due to causes beyond its reasonable
control, including, without limitation, acts of God,
earthquakes, fires, strikes, acts of war, or intervention of
any governmental authority, but any such delay or failure
shall be remedied by such party as soon as possible after
the removal of the cause of such failure or delay.
10. Indemnification.
10.1 Indemnity. Crescendo shall indemnify, defend
and hold ALZA harmless from and against any and all
liabilities, claims, demands, damages, costs, expenses or
money judgments incurred by or rendered against ALZA and its
Affiliates, which arise out of the use, design, labeling,
manufacture, processing, packaging, sale or
commercialization of the Crescendo Products by Crescendo,
its Affiliates and permitted subcontractors and sublicensees
(other than ALZA and its Affiliates, subcontractors,
sublicensees, distributors and others operating under
arrangements with or through ALZA). ALZA shall permit
Crescendo's attorneys, at Crescendo's discretion and cost,
to control the defense of any claims or suits as to which
ALZA may be entitled to indemnity hereunder, and ALZA agrees
not to settle any such claims or suits without the prior
written consent of Crescendo. ALZA shall have the right to
participate, at its own expense, in the defense of any such
claim or demand to the extent it so desires.
10.2 Notice. ALZA shall give Crescendo prompt
notice in writing, in the manner set forth in Section 11.7
below, of any claim or demand made against ALZA for which
ALZA may be entitled to indemnification under Section 10.1.
11. Miscellaneous.
11.1 Waiver, Remedies and Amendment. Any waiver
by either party hereto of a breach of any provisions of this
Agreement shall not be implied and shall not be valid unless
such waiver is recited in writing and signed by such party.
Failure of any party to require, in one or more instances,
performance by the other party in strict accordance with the
terms and conditions of this Agreement shall not be deemed a
waiver or relinquishment of the future performance of any
such terms or conditions or of any other terms and
conditions of this Agreement. A waiver by either party of
any term or condition of this Agreement shall not be deemed
or construed to be a waiver of any other term or condition
of this Agreement. All rights, remedies, undertakings,
obligations and agreements contained in this Agreement shall
be cumulative and none of them shall be a limitation of any
other remedy, right, undertaking, obligation or agreement of
either party. This Agreement may not be amended except in a
writing signed by both parties.
11.2 Assignment. Neither party may assign its
rights and obligations hereunder without the prior written
consent of the other party, which consent may not be
unreasonably withheld; provided, however, that ALZA may
assign such rights and obligations hereunder to an Affiliate
of ALZA or to any person or entity with which ALZA is merged
or consolidated or which acquires all or substantially all
of the assets of ALZA.
11.3 Arbitration.
(a) All disputes which may arise under, out
of or in connection with this Agreement shall be settled by
arbitration conducted in the city of San Francisco, state of
California, in accordance with the then existing rules of
the American Arbitration Association, and judgment upon the
award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. The parties hereby agree
that service of any notices in the course of such
arbitration at their respective addresses as provided for in
Section 11.7 of this Agreement shall be valid and
sufficient.
(b) In any arbitration pursuant to this
Section 11.3, the award shall be rendered by a majority of
the members of a board of arbitration consisting of three
members who shall be appointed by the parties jointly, or if
the parties cannot agree as to three arbitrators within 30
days after the commencement of the arbitration proceeding,
then one arbitrator shall be appointed by ALZA and one
arbitrator shall be appointed by Crescendo within 60 days
after the commencement of the arbitration proceeding. The
third arbitrator shall be appointed by mutual agreement of
such two arbitrators. In the event of failure of the two
arbitrators to agree within 75 days after commencement of
the arbitration proceeding upon the appointment of the third
arbitrator, the third arbitrator shall be appointed by the
American Arbitration Association in accordance with its then
existing rules. Notwithstanding the foregoing, in the event
that any party shall fail to appoint an arbitrator it is
required to appoint within the specified time period, such
arbitrator and the third arbitrator shall be appointed by
the American Arbitration Association in accordance with its
then existing rules. For purposes of this Section 11.3, the
"commencement of the arbitration proceeding" shall be deemed
to be the date upon which a written demand for arbitration
is received by the American Arbitration Association from one
of the parties.
11.4 Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which
when taken together shall constitute this Agreement.
11.5 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
state of California as applied to residents of that state
entering into contracts to be performed in that state.
11.6 Headings. The section headings contained in
this Agreement are included for convenience only and form no
part of the Agreement between the parties.
11.7 Notices. Notices required under this
Agreement shall be in writing and sent by registered or
certified mail, postage prepaid, or by facsimile and
confirmed by registered or certified mail, postage prepaid,
and addressed as follows:
If to ALZA: ALZA Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Senior Vice President
and General Counsel
If to Crescendo: Crescendo Pharmaceuticals Corporation
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: President and Chief
Executive Officer
All notices shall be deemed to be effective five days
after the date of mailing or upon receipt if sent by
facsimile (but only if followed by certified or registered
confirmation). Either party may change the address at which
notice is to be received by written notice pursuant to this
Section 11.7.
11.8 Severability. If any provision of this
Agreement is held by a court of competent jurisdiction to be
invalid or unenforceable, it shall be modified, if possible,
to the minimum extent necessary to make it valid and
enforceable or, if such modification is not possible, it
shall be stricken and the re
maining provisions shall remain in full force and effect.
11.9 Relationship of the Parties. For purposes of
this Agreement, Crescendo and ALZA shall be deemed to be
independent contractors, and anything in this Agreement to
the contrary notwithstanding, nothing herein shall be deemed
to constitute Crescendo and ALZA as partners, joint
venturers, co-owners, an association or any entity separate
and apart from each party itself, nor shall this Agreement
constitute any party hereto an employee or agent, legal or
otherwise, of the other party for any purposes whatsoever.
Neither party hereto is authorized to make any statements or
representations on behalf of the other party or in any way
obligate the other party, except as expressly authorized in
writing by the other party. Anything in this Agreement to
the contrary notwithstanding, no party hereto shall assume
or be liable for any liabilities or obligations of the other
party, whether past, present or future.
11.10 Survival. The provisions of Sections 1,
5, 6, 7, 10, 11.1, 11.3, 11.5, 11.7, 11.8, 11.9 and this
Section 11.10 shall survive the termination for any reason
of this Agreement. Any payments due under this Agreement
with respect to any period prior to its termination shall be
made notwithstanding the termination of this Agreement.
Neither party shall be liable to the other due to the
termination of this Agreement as provided herein, whether in
loss of good will, anticipated profits or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
ALZA CORPORATION
By: /s/ Xxxxx X. Staple
Title: Senior Vice President
and General Counsel
CRESCENDO PHARMACEUTICALS CORPORATION
By: /s/ Xx. Xxxxx X. Xxxxx
Title: President and
Chief Executive Officer
