EXHIBIT 10.28
CO-DEVELOPMENT AGREEMENT
BETWEEN
BIOENVISION
AND
ILEX ONCOLOGY
TABLE OF CONTENTS
CO-DEVELOPMENT AGREEMENT ............................................... 1
WITNESSETH ............................................................. 1
1. DEFINITIONS ....................................................... 1
2. CO-DEVELOPMENT PROGRAM ............................................ 3
3. CO-DEVELOPMENT FUNDING ............................................ 6
4. INCOME AND ROYALTY PAYMENTS ....................................... 9
5. SRI MILESTONE PAYMENTS ............................................ 11
6. MARKETING ......................................................... 12
7. SUBLICENSING ...................................................... 13
8. PAYMENTS AND REPORTS .............................................. 14
9. RECORDS ........................................................... 15
10. MANUFACTURE ....................................................... 16
11. OWNERSHIP OF THE TECHNOLOGY, TECHNICAL ............................ 16
INFORMATION AND IMPROVEMENTS
12. PATENT PROSECUTION ................................................ 17
13. INFRINGEMENT BY THIRD PARTY ....................................... 17
14. REVOCATION PROCEEDINGS ............................................ 18
15. INFRINGEMENT OF THIRD PARTY RIGHTS ................................ 19
16. REPRESENTATIONS ................................................... 19
17. DISCLAIMER ........................................................ 21
18. INDEMNIFICATION ................................................... 21
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19. INSURANCE ......................................................... 23
20. TERM AND TERMINATION .............................................. 23
21. CONFIDENTIALITY; PUBLICATION; PUBLICITY ........................... 26
22. DISPUTE RESOLUTION ................................................ 28
23. ASSIGNABILITY ..................................................... 30
24. REFORM ............................................................ 30
25. WAIVER AND ALTERATION ............................................. 30
26. MARKING ........................................................... 31
27. IMPLEMENTATION .................................................... 31
28. GOVERNING LAW ..................................................... 31
29. EXPORTATION OF TECHNICAL INFORMATION .............................. 31
30. HEADINGS .......................................................... 31
31. PARTIES INDEPENDENT ............................................... 32
32. COUNTERPARTS ...................................................... 32
33. FORCE MAJEURE ..................................................... 32
34. SURVIVAL OF OBLIGATIONS ........................................... 32
35. NOTICE ............................................................ 33
APPENDIX I - PATENTS AND PATENT APPLICATIONS ...................... 35
APPENDIX II- CO-DEVELOPMENT AGREEMENT ............................. 36
BETWEEN BIOENVISION AND SRI
APPENDIX III - ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ INSTITUTE FOR
CANCER RESEARCH AGREEMENT
ii
CO-DEVELOPMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into and effective this 12th day of
March, 2001, by and between Bioenvision, Inc. having its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, herein called
"Bioenvision", and Ilex Oncology, Inc. having its principal place of business at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, herein called "Ilex".
WITNESSETH
WHEREAS, Bioenvision has commercial rights that were licensed from Southern
research Institute ("SRI") relating to the development and uses of a
2'-fluoro-2-halo substituted purine nucleoside, herein referred to as
"Clofarabine", which has been shown to be effective in vitro and in vivo against
hematologic malignancies; and
WHEREAS, Bioenvision recognizes that Ilex has expertise in the development of
new drugs for clinical use, and
WHEREAS, Bioenvision recognizes that the development program for Clofarabine
will be expedited by the expertise of Ilex, and
WHEREAS, Bioenvision has expertise and strategic relationships which may
facilitate the development and marketing of Clofarabine outside of the United
States and Canada;
NOW THEREFORE, in consideration of the mutual agreements and covenants herein
contained and intending to be legally bound thereby, the parties agree as
follows:
1. DEFINITIONS
As used herein the following terms shall have the meanings set forth below:
1.1 Affiliate means any corporation, firm, partnership or other entity that
controls, is controlled by, or is under common control with a party
hereto. For purposes of this Agreement, "control" means the ownership,
whether direct or indirect, of fifty (50%) percent or more of the
equity having the power to vote or otherwise direct the affairs of the
entity.
1.2 Bioenvision means Bioenvision, Inc. and joint ventures, subsidiaries,
or other business entities controlled directly or indirectly by
Bioenvision or in which Bioenvision owns at least a majority interest.
1.3 Clofarabine means 2-ch1oro-9-(2-deoxy-2-fluoro-[Beta]-D-
arabinofuranosyl)-9H-purin-6-amine.
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1.4 Co-Development Program means the joint clinical development of the
Technology by Bioenvision and Ilex.
1.5 Confidential Information has the meaning set forth in Article 21.1.
1.6 Damages has the meaning set forth in Article 18.1.
1.7 Field means, and is limited to, the practice of the Patent, Invention
and Technical Information for use in the treatment of human cancer. For
purposes of this Agreement, "cancer" shall mean any malignant tumor
arising from or situated in either the hematological cell lines or
solid organs or tissues within the human body. The cancer may be
primary or secondary in origin."
1.8 Ilex means Ilex Oncology, Inc. and joint ventures, subsidiaries, or
other business entities controlled directly or indirectly by Ilex or in
which Ilex owns at least a majority interest.
1.9 Improvement or Improvements means those unencumbered technology
advances in the formulation, manufacture or structure of Clofarabine or
any Product made by or on behalf of Management during the term of this
Agreement that are either within the scope of and would constitute an
infringement of the Patent claims or use Technical Information and are
within the Field.
1.10 Indemnified Party has the meaning set forth in Article 18.3.
1.11 Indemnifying Party has the meaning set forth in Article 18.3.
1.12 Invention or Inventions means (i) applications of the Technology or
(ii) applications necessary for use of the Technology and claimed in
any Patent, solely in the Field.
1.13 Management means the team established pursuant to Section 2.2, which
shall be responsible for co-ordination and supervision of the
Co-Development Program.
1.14 Net Sales Revenue means the gross amount recognized by a party or its
Affiliates or sublicensees for the sale of Clofarabine or other
Product(s) through normal distribution channels (as determined by
generally accepted accounting principles and industry practices), less
any deductions for value added taxes incurred, and not recovered by
such party or the equivalent, or trade discounts, or returns, or such
deductions that may be made from the sale price in the Territory.
1.15 Patent or Patents means the patents and/or patent applications, set
forth in Appendix I, covering the Invention or Improvement as defined
above, patents to be issued pursuant thereto, and all divisionals,
continuations, continuations-in-part, reissues, substitutions, and
extensions thereof, and any patent issuing on a patent application
filed after the Effective Date of this Agreement which is included in
the grant of license hereunder and any foreign counterparts of the
foregoing. Appendix I lists the owner of each such Patent.
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1.16 Product(s) means Clofarabine . which was licensed by Bioenvision from
SRI and as set out in the SRI Agreement (as hereinafter defined), and
includes other related purine nucleosides within the scope of the
patent rights licensed in the aforementioned license.
1.17 Providing Party has the meaning set forth in Article 21.1.
1.18 Representatives has the meaning set forth in Article 21.1.
1.19 Technical Information means unencumbered published or unpublished
confidential and proprietary information in the nature of research and
development information, knowledge and technical data, together with
trade secrets relating to the Products, including any inventions in the
possession of and belonging solely to Ilex or Bioenvision on or prior
to the Effective Date of this Agreement and which Ilex or Bioenvision,
acting in good faith, believe to be useful in carrying out the
co-development program, including that which comes into the possession
of Ilex or Bioenvision during the term of this Agreement as a result of
activities carried out under this Agreement.
1.20 Technology means the patented and unpatented, patentable and
unpatentable proprietary Technical Information related to the Products
for use in the Field which is owned or possessed by Bioenvision with
rights to sublicense and is made available to Ilex pursuant to this
Agreement.
1.21 Territory means worldwide, with the exception of Japan and Southeast
Asia (as defined in the Agreement between SRI and Bioenvision -
Appendix II).
1.22 SRI Agreement means, collectively, the Co-Development Agreement between
Bioenvision and SRI dated August 31, 1998 (Appendix II to this
Agreement) and the accompanying inter-institutional agreement between
SRI and ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Research ("MSK") (Appendix
III to this Agreement), in each case, as amended (if amended).
2. CO-DEVELOPMENT PROGRAM
2.1 The parties to this Agreement hereby agree to jointly co-develop
Clofarabine for commercialization according to the terms of this
Agreement. This Agreement supersedes all other written or verbal
agreements, express or implied, between Ilex and Bioenvision relating
to the subject matter hereof. Ilex shall be responsible for conducting
all clinical trials and the filing and prosecution of all applications
with applicable USA and Canadian regulatory authorities and all
regulatory filings in the USA and Canada shall be in the name of Ilex.
Ilex shall use all reasonable efforts to complete such actions and to
obtain applicable regulatory approvals as promptly as practicable. In
this regard, the parties contemplate attempting to obtain "orphan drug"
status for Clofarabine but acknowledge that it may be necessary to seek
regulatory approval on a different basis, Bioenvision shall be
responsible for conducting all clinical trials and the filing and
prosecution of all applications with applicable regulatory authorities
other than in the USA and Canada and all such filings shall be in the
name of Bioenvision.
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2.2 Ilex shall be responsible for meeting the milestones and timetable set
forth below:
Milestone Completion Date
--------- ---------------
Completion of Pivotal Phase II Trials Ilex to use all reasonable efforts to
cause such trials, as designed by
Management, to be completed not later
than 31 December 2002, but the parties
acknowledge and agree that such trials
may not be completed by such date
notwithstanding Ilex's best efforts. The
parties agree that if the trials are not
completed by 31 December 2002, but are
still ongoing and progressing to
completion within a reasonable timeframe
thereafter, the Milestone date shall be
adjusted, accordingly.
Filing of New Drug Application with US Not later than August 31, 2003; provided
Food and Drug Administration that such date is consistent with the
agreed upon regulatory strategy with the
FDA and that the deadline shall be
continued through the period ending on
January 1, 2004 so long as Ilex
continues to use all reasonable efforts
to complete the filing in due form as
promptly as reasonably practicable
during such extended period. The parties
acknowledge and agree that Bioenvision
may agree to extend the deadline beyond
January 1, 2004 upon request by Ilex,
which agreement shall not be
unreasonably withheld.
2.3 Management team ("Management") shall be established which will direct
and supervise the Co-Development Program of Clofarabine or any Product
and which will co-ordinate the marketing strategy for Clofarabine or
any Product. The Management shall consist of four people, with two
representatives appointed by each of Bioenvision and Ilex. Bioenvision
and Ilex may change their respective representatives at any time.
Additional members of Management may be added but at all times the
equal balance of representatives from each party shall be maintained.
The Management shall be responsible for approving the annual
development plans for the Co-Development Program, as well as, the
annual budget proposals and manufacturing, pre-marketing and marketing
strategies for Clofarabine or any other Product. The Management will
promptly share with SRI all information generated under the
Co-Development Program pursuant to the confidentiality provisions of
Article 21 and with particular respect to the preclinical studies and
clinical trials. Upon commercialization of the Product(s), the
Management will provide SRI with quarterly updates (which may be oral
unless otherwise requested by SRI) in reasonable detail, describing the
Management's plans, activities and accomplishments. The Management
shall be established within thirty (30) days of signing of this
Agreement.
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2.4 Notwithstanding Article 2.2 above, Ilex shall have the lead (and
controlling vote for the Management) role in designing and executing
the Co-Development Program, including, without limitation, any
development issue and any strategic marketing issues as described in
Article 6, in the USA and Canada. In establishing the development
program and marketing strategy for the USA and Canada, ILEX will give
due regard to the effects, both positively and negatively, on
Bioenvision' s development and/or marketing strategy for Europe.
2.5 Notwithstanding Article 2.2 above, Bioenvision shall have the lead role
and controlling vote in designing and executing the Co-Development
Program, including, without limitation, any development issue and any
strategic marketing issues as described in Article 6, in all other
territories outside the USA and Canada.
2.6 Both parties to this Agreement acknowledge the SRI Agreement. Except as
set forth herein, the rights of either party to this Agreement are
subject to and limited by the terms and conditions of the SRI
Agreement.
2.7 The parties will promptly share all information generated under the
Co-Development Program pursuant to the confidentiality provisions of
Article 21 and including, without limitation, all information with
respect to market analysis, competitor position, pre-clinical studies
and clinical trials, the filing of any applications with the US Food
and Drug Administration or similar Canadian authority and the
manufacture and testing of different formulations and preparations of
Clofarabine or any related Product which is the subject of this
Co-Development Agreement.
2.8 Within ninety (90) days of the effective date of this Agreement, the
Management shall prepare a Development Plan for Clofarabine. This plan
shall describe the commercial strategy, clinical trial proposals and
assessment of the market potential for Clofarabine.
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3. CO-DEVELOPMENT FUNDING
3.1 Ilex shall pay all costs and expenses of any work deemed necessary for
the development of Clofarabine or any Product in the USA and Canada,
and this shall include, but shall not be limited to, clinical trials,
the manufacture of bulk drug substance and finished Product, the filing
of any applications with the US Food and Drug Administration or similar
Canadian authority and the manufacture and testing of different
formulations and preparations of Clofarabine or any related product
which is the subject of this Co-Development Agreement.
3.2 Bioenvision and Ilex shall share equally in the costs and expenses of
the development of Clofarabine or any Product in any other countries
within the Territory other than the USA and Canada, pursuant to a
development plan and budget which is approved by Management on an
annual basis. Ilex's consent, via the Management, shall be required for
any budgetary matter which is to be cofunded by Ilex, such consent not
to be unreasonably withheld. Notwithstanding, Ilex agree to provide a
minimum of $1 million in the first two years from the Effective Date
for the clinical development of Clofarabine or any Product outside the
USA and Canada. If additional money, over and above that agreed to by
Ilex via the Management, shall be required, for whatever reason, for
the proper development of Clofarabine or any Product outside the USA
and Canada Bioenvision may elect to spend the additional money for such
development and such additional money shall be credited to Bioenvision
against future royalty payments to Ilex and at the rate of $1.5 for
every $1 of additional expenditure.
3.3 This Agreement shall become immediately effective upon closing as
hereinafter described. Prior to closing, Ilex and Bioenvision shall
each deliver three originals of this Agreement, fully executed, to
Bioenvision's counsel, Piper, Marbury, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, at 1251
Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. At
closing, Ilex shall pay to Bioenvision the sum of US$1.35 million,
minus US $250,000 which was previously paid by Ilex to Bioenvision upon
signature of the Terms for a Co-Development Agreement, for a total of
US$1.1 million to be paid by Ilex by irrevocable wire transfer of
immediately available federal funds to an account for the benefit of
Bioenvision, which shall be notified in writing to Ilex, where such
funds shall be held in escrow pending completion of the closing. The
closing shall be completed promptly upon confirmation by Bioenvision's
counsel of receipt of such funds and delivery by such counsel of an
original Agreement executed by each party to the other party.
Notwithstanding anything to the contrary contained herein, this
Agreement shall not be deemed effective until confirmation of receipt
of such US$1.1 million in immediately available federal funds in the
account for the benefit of Bioenvision.
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In addition, if the FDA agrees that the existing Clofarabine Toxicology
package contained in the Investigators IND, filed by the University of
Texas MD ▇▇▇▇▇▇▇▇ Cancer Center, is sufficient for Ilex's NDA, and Ilex
will not be required to do additional cGMP animal toxicity studies to
continue or complete the clinical trials, then Ilex shall promptly pay
via wire transfer to Bioenvision an additional $150,000. Otherwise,
Ilex shall use the $150,000 to defer its costs for the required
additional toxicology studies on an as-costs-are-incurred basis, and
refund to Bioenvision any remainder of the $150,000 once all toxicology
studies are fully paid for.
3.4 Ilex agrees to pay Bioenvision an additional sum of US$2.5 million by
irrevocable wire transfer of immediately available federal funds
immediately after completion of the Management designed pivotal Phase
II clinical trial of Clofarabine. Completion, for this purpose, shall
mean the date on which all patients will have finished treatment as
defined in the protocol for the Phase II clinical trial.
3.5 Ilex is hereby granted an option to purchase US$1 million of
Bioenvision common stock at the Market Value per each such share. Such
option shall become exercisable upon completion of the Phase II
clinical trial referred to in Article 3.4 and shall also expire 30 days
after completion of the Phase II trial referred to in Article 3.4. The
Market Value per each share of Bioenvision common stock shall equal the
average of the Market Price per each such share for on each of the 10
Trading Days immediately prior to the date of exercise of the option.
"Market Price" means, with respect to the shares of common stock of
Bioenvision on any applicable Trading Day, (a) if the shares are listed
or admitted for trading on any national securities exchange or included
in the NASDAQ National Market or NASDAQ SmallCap Market, the last
reported sales price as reported on such exchange or market; (b) if the
shares are not listed or admitted for trading on any national
securities exchange or included in the NASDAQ National Market or NASDAQ
SmallCap Market, the average of the last reported closing bid and asked
quotation for the shares as reported on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or a similar
service if NASDAQ is not reporting such information; (c) if the shares
are not listed or admitted for trading on any national securities
exchange or included in the NASDAQ National Market or NASDAQ SmallCap
Market or quoted by NASDAQ or a similar service, the average of the
last reported bid and asked quotation for the shares as quoted by a
market maker in the shares (or if there is more than one market maker,
the bid and asked quotation shall be obtained from two market makers
and the average of the lowest bid and highest asked quotation). In the
absence of any available public quotations for the Common Stock, the
Board of Directors of Bioenvision shall determine in good faith the
Market Price of the common stock, which determination shall be set
forth in a certificate by the Secretary of the Company. "Trading Day"
means any day on which the common stock of Bioenvision is quoted for
trading on any national securities exchange, The NASDAQ National
Market, the NASDAQ SmallCap Market, the NASDAQ or a similar service, or
by a market maker in the "pink sheets" or a similar service or, if the
common stock is not customarily quoted for trading in any of those
venues (excluding weekends and holidays and similar customary days on
which such trading does not occur), then any day other than a Saturday,
Sunday, or other day on which commercial banks in the State of New York
are authorized or required by law to close. In exercising the option
Ilex shall not make use of material non-public information and shall
comply with applicable law. This option shall be non-transferable.
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3.6 Ilex agrees to pay to Bioenvision the sum of US$5,000,000by irrevocable
wire transfer of immediately available federal funds within five (5)
days after submission by Ilex of a new drug application ("NDA") with
the United States Food and Drug Administration ("FDA") for the use of
Clofarabine or other Product in the treatment of chronic lymphocytic
leukemia ("CLL"). If an NDA is filed for the use of Clofarabine or
other Product in the treatment of an acute leukemia prior to the
submission for the treatment of chronic leukemia Ilex shall pay to
Bioenvision the sum of $500,000. The sum of $4,500,000 shall then be
paid upon submission of the NDA for the use of Clofarabine or other
Product to treat chronic leukemia. If Ilex fails to submit the NDA for
the use of Clofarabine or other Product for chronic leukemia, lymphoma
or solid tumors within twelve (12) months of submitting the NDA for
acute leukemia the payment to Bioenvision of the $4,500,000 shall be
made, If Ilex fails to file the NDA for chronic leukemia or solid
tumors then Bioenvision shall have the right to make such a filing.
3.7 Ilex is hereby granted an option to purchase an additional $2,000,000
of Bioenvision common stock at the Market Value per each such share.
Such option shall become exercisable upon filing an NDA in the USA or
Canada referred to in Article 3.6 and shall expire 30 days after
submitting the NDA referred to in Article 3.6. The Market Value shall
be determined, as of the applicable exercise date pursuant to this
Article 3.7, in accordance with the procedures for determination of
Market Value set forth in Article 3.5 above. In exercising the option
Ilex shall not make use of material non-public information and shall
comply with applicable law. This option shall be non-transferable.
3.8 Ilex agrees to pay all costs and expenses of prosecuting, filing and
maintaining Patents and defending revocation proceedings on Patents and
Patent applications on Clofarabine or any Product or Improvement within
the USA and Canada.
3.9 Bioenvision agrees to pay all costs and expenses of prosecuting, filing
and maintaining Patents and defending revocation proceedings on Patents
and Patent applications on Clofarabine or any Product or Improvement in
all other countries within the Territory other than the USA and Canada.
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4. INCOME AND ROYALTY PAYMENTS
4.1 If Ilex and Bioenvision separately market Clofarabine or any Product
for sale for use in the Field in the same area within the Territory
then the terms of the separate agreements shall apply as if Ilex and
Bioenvision were marketing Clofarabine or any Product for sale for use
in the Field in different areas within the Territory.
4.2 If Ilex and Bioenvision shall combine to market Clofarabine or any
Product for sale for use in the Field in any area within the Territory
a royalty of 7% shall be paid to SRI and the sales shall be considered
as a sale by Ilex for calculation of the milestone payments referred to
in Articles 5.1 and 5.2.
4.3 Ilex will pay total royalties to Bioenvision for all direct sales of
Clofarabine or any Product by Ilex, its Affiliates and Sublicensees,
for use in the Field within the Territory according to the following
schedule and to the provisions of Article 4.8:
Annual Net Sales Nominal Royal Total Royalty
Revenue ($Million) (% Net Sales Revenue) (% Net Sales Revenue)
----------------- ------------------- -------------------
0- 30 7 8.75
greater than 30-100 9 11.25
greater than 100-200 10 12.50
greater than 200--500 12 15.00
500+ 15 18.75
4.4 In countries where Bioenvision has made direct sales of Clofarabine or
any Product for use in the Field within the Territory, Bioenvision
shall pay net royalties to Ilex according to the following schedule and
the provisions of Article 4.8:
Annual Net Sales Nominal Royal Net Royalty
Revenue ($Million) (% Net Sales Revenue) (% Net Sales Revenue)
----------------- ------------------- -------------------
0- 30 7 3.5
greater than 30-100 9 5.5
greater than 100-200 10 6.5
greater than 200--500 12 8.5
500+ 15 11.5
4.5 In any country within the Territory where Clofarabine or any Product is
sold by a third party, such as a distributor, wholesaler, or marketing
company, for use in the Field any payments made by the third party as
part of the acquisition of rights to sell or distribute Clofarabine or
any Product, (as distinct from payments for Products sold or the
payments with respect to which royalties are incurred under this
Agreement or the SRI Agreement), shall be shared equally between Ilex,
SRI and Bioenvision.
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4.6 If the rights to market Clofarabine or any Product for use in the field
are acquired by a third party in any country within the Territory any
payment made by the third party as part of the acquisition of rights to
sell Clofarabine or any Product (other than royalty payments for Net
Sales Revenue) shall either (i) be divided equally between Ilex, SRI
and Bioenvision, in which case SRI shall have no reserve rights to
receive royalty payments or other payments, or (ii) be divided between
the parties in the ratio Ilex 37.5%:Bioenvision 37.5%: SRI 25%, in
which case SRI shall reserve the right to receive royalty payments and
other payments, the terms of such payments to be negotiated in good
faith by the parties.
4.7 If the rights to manufacture Clofarabine or any Product for use in the
Field are assigned to a third party in any country within the
Territory, all payments received from such third party as part of the
acquisition of rights to manufacture Clofarabine or any Product shall
be distributed by Bioenvision equally between Bioenvision, Ilex, and
SRI.
4.8 Except as provided under this Agreement, all payments due under this
Article 4 shall take account of royalties due under the SRI Agreement
and such payments shall be shared equally between Ilex and Bioenvision.
In particular, any royalties to be paid by Ilex or any Ilex sublicensee
shall be considered for the purposes of this Agreement to be royalties
under the terms of an acquisition as defined in Article 5A of the
Co-Development Agreement between SRI and Bioenvision, which terms may
be subject to amendment by SRI and Bioenvision, and under any such
amendment Bioenvision shall pay to SRI not less than one-half (1/2) of
the royalties received from Ilex. This shall mean that if
royalty-bearing sales are made pursuant to Article 4.3 hereof, then for
the share of royalty payments received by Bioenvision from Ilex that
Bioenvision must pay to SRI, as part of the SRI Agreement, Ilex shall
contribute 25% of the total amount due. For example, if Bioenvision
shall receive $100 in royalty from Ilex (sometimes hereinafter referred
to as "Nominal Royalty") it shall be required to pay SRI not less than
the sum of $50 of which Ilex shall contribute one-half of $50, or in
this example $25. This shall mean that in this example Ilex will pay
$125 (sometimes hereinafter referred to as "Total Royalty") to
Bioenvision. This Article shall further mean that if Bioenvision makes
sales pursuant to Article 4.4, then all royalty payments owed by
Bioenvision to SRI shall be paid as set out in the SRI Agreement, but
that Ilex shall contribute one-half of the royalty payments. For
example of every $100 of Net Sales Revenue made by Bioenvision, $7
shall be paid as royalty to SRI. In this example, on annual net sales
revenue up to $30 million, $7 of every $100 of Net Sales Revenue would
be due as nominal royalty to Ilex, but $3.50 of that amount would be
used as Ilex's contribution to the royalty paid to SRI, and only the
remaining $3.5 would be due and paid to Ilex.
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4.9 It is agreed among the Parties that performance by Ilex of its
commitment to pay milestone payments to SRI as set forth below in
Article 5 shall eliminate any requirement by Ilex to share in any
payment which Bioenvision may otherwise make to SRI for profit sharing
under the SRI Agreement.
5. SRI Milestone Payments
5.1 As partial consideration for SRI agreeing to the other terms and
conditions set forth herein, Ilex shall pay directly to SRI, pursuant
to payment instructions provided in Article 5.4 herein, the following
milestone payments, based solely on the Net Sales Revenue by Ilex, its
Affiliates and/or any Ilex sublicensees (excluding direct sales by
Bioenvision or its Affiliates and any Bioenvision sublicensee other
than Ilex) of Clofarabine or other Product during the Term of this
Agreement. In each case, the payment shall be made within forty-five
(45) days after milestone achievement with Ilex informing SRI in
writing within the first thirty (30) days of milestone achievement that
the milestone in question has been achieved.
The milestone payments shall be as follows:
a) The earlier of the first calendar year when (i) Ilex obtains
$30,000,000 in annual Net Sales Revenue or (ii) Ilex achieves
$150,000,000 in total cumulative Net Sales Revenue, Ilex shall
make a payment of $1,000,000;
b) The earlier of the first calendar year when (i) Ilex obtains
$40,000,000 in annual Net Sales Revenue or (ii) Ilex achieves
$200,000,000 in total cumulative Net Sales Revenue, Ilex shall
make a payment of $1,000,000;
c) The earlier of the first calendar year when (i) Ilex obtains
$50,000,000 in annual Net Sales Revenue or (ii) Ilex achieves
$250,000,000 in total cumulative Net Sales Revenue, Ilex shall
make a payment of $3,000,000;
d) The earlier of the first calendar year when (i) Ilex obtains
$100,000,000 in annual Net Sales Revenue or (ii) Ilex achieves
$500,000,000 in total cumulative Net Sales Revenue, Ilex shall
make a payment of $20,000,000;
e) The earlier of the first calendar year when (i) Ilex obtains
$200,000,000 in annual Net Sales Revenue or (ii) Ilex achieves
$1,000,000,000 in total cumulative Net Sales Revenue, Ilex shall
make a payment of $40,000,000;
f) The earlier of the first calendar year when (i) Ilex obtains
$500,000,000 in annual Net Sales Revenue or (ii) Ilex achieves
$2,500,000,000 in total cumulative Net Sales Revenue, Ilex shall
make a payment of $40,000,000.
11
5.2 In addition, Ilex shall also pay directly to SRI, a milestone payment
of $10,000,000, pursuant to payment instructions provided in Article
5.4 herein, upon receipt by Ilex of the First FDA approval in the
United States to market Clofarabine or other Product for the treatment
of any of the following types of cancer: breast cancer, colon cancer,
non-small cell lung cancer or prostate cancer. The payment shall be
made within forty-five (45) days after milestone achievement with Ilex
informing SRI in writing within the first thirty (30) days that the
milestone has been achieved. It is hereby agreed that it is the
intention of Ilex to investigate the clinical efficacy of Clofarabine
or any Product for the treatment of the cancers referred to in this
Article.
5.3 All payments to SRI due under this Agreement shall be made by
electronic transfer of funds in U.S. dollars to:
AmSouth Bank
Account No. ▇▇▇▇▇▇▇▇
Routing No. ▇▇▇▇▇▇▇▇▇
For Intellectual Property
6. MARKETING
6.1 The rights and entitlements to market Clofarabine granted to
Bioenvision by the SRI Agreement shall remain the exclusive property of
Bioenvision until the completion of the Co-Development Program. The
completion of the program shall mean the filing of a product license in
the USA. Upon completion of the Co-Development Program in the USA and
Canada, Ilex shall have the controlling vote in any Management
determination to transfer marketing rights for Clofarabine or any
Product in the USA and Canada, and if required by the Management,
Bioenvision, in accordance with the terms of this Agreement and the SRI
Agreement, shall grant an exclusive license to Ilex to market and sell
Clofarabine or any such Product in the Field in these countries
including the right to sublicense the same, as described in Article 7.1
The exclusive license grant by Bioenvision shall include exclusive
rights in the USA and Canada to manufacture, have manufactured, use,
market and sell Clofarabine or any product in the Field under Patents
and Technology, subject to continued payment of royalties and milestone
amounts as provided in this Agreement and to other customary license
terms and conditions, such as compliance with FDA good manufacturing
procedures and applicable marketing and sales regulations. This
exclusive license shall remain in full force and effect so long as Ilex
performs its obligations as set forth herein, and Bioenvision will
execute such documents as may be requested by Ilex to attest to the
transfer to Ilex of such license rights. No sublicense shall be granted
hereunder and no right shall be implied to Ilex if Ilex breaches its
obligations under this Agreement. No license grant by Bioenvision
covering rights in the USA and Canada shall restrict Bioenvision's
rights and entitlements outside the USA and Canada.
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6.2 Upon every exclusive license granted by Bioenvision, Ilex shall grant a
corresponding exclusive license to Bioenvision with respect to
Improvements, on substantially the same terms and conditions,
consistent with this Agreement except the exclusive right shall pertain
to areas outside the USA and Canada.
7. SUBLICENSING
7.1 The exclusive license granted to Ilex in Article 6.1 shall include the
right by Ilex to sublicense the marketing and sale of Clofarabine or
any Product directly to any Ilex sublicensee ("Sublicensee") in the
Field for the USA and Canada, provided such sublicense is in accordance
with this Article 7 and is consistent with the rights of Bioenvision as
licensor under the license to be granted to Ilex pursuant to Article
6.1.
7.2 Ilex will keep Bioenvision routinely updated on progress of discussions
and negotiations with potential sublicensees. The parties agree that
sublicense agreements shall conform in all material respects to the
terms and conditions of this Agreement and that such sublicense
agreements shall not contravene or in any way negate the original
license Agreement between Bioenvision and SRI. In no event shall Ilex
grant to its sublicensees any rights of Bioenvision not conveyed by
this Agreement. Any such purported sublicense not in strict conformance
with this Agreement shall be null and void.
7.3 If this Agreement is terminated for any reason, any sublicense granted
by Ilex hereunder shall automatically transfer to Bioenvision. Ilex
shall execute such documents as may be requested by Bioenvision to
effect the transfer to Bioenvision of such sublicense and all of the
rights of Ilex thereunder including, but not limited to, the right to
receive any payments due under such sublicense.
7.4 If all or part of any rights granted to Ilex by this Agreement are
acquired, directly or indirectly, by a third party from Ilex whether by
sublicense or otherwise, all current or future payments derived by Ilex
from the transfer, whether in cash, shares, property or any other form
of payment, including but not limited to up-front payments, and
milestone payments will be divided according to the terms of Article
4.6 and the other applicable terms and conditions of this Agreement
shall apply to such payments and to the other terms and conditions of
such arrangement. For purposes of royalty payment only, sales of Ilex
Sublicensees shall be considered to be sales by Ilex.
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8. PAYMENTS AND REPORTS
8.1 All payments owed to Bioenvision by Ilex shall be paid within fifteen
(15) days after the end of the month in which the payments are received
by Ilex except as stated otherwise elsewhere in this Agreement and
except for royalties as a result of direct marketing of a Product by
Ilex.
8.2 Royalties owed to Bioenvision as a consequence of direct marketing of a
Product by Ilex, shall be due for each calendar quarter beginning with
the first calendar quarter in which sales occur and shall be paid to
Bioenvision within fifteen (15) days following the last day of the
applicable calendar quarter.
8.3 All payments owed to Ilex by Bioenvision shall be paid within fifteen
(15) days after the end of the month in which the payments are received
by Bioenvision except as stated otherwise elsewhere in this Agreement
and except for royalties as a result of direct marketing of a Product
by Bioenvision.
8.4 Royalties and profit-sharing compensation owed to Ilex as a consequence
of direct marketing of a Product by Bioenvision shall be due for each
calendar quarter beginning with the first calendar quarter in which
sales occur and shall be paid to Ilex within fifteen (15) days
following the last day of the applicable calendar quarter.
8.5 Unless otherwise specified under this Agreement, all payments by one
party to this Agreement to another party to this Agreement shall be
made in immediately available funds in U.S. dollars by wire transfer
and delivered to the applicable address of the payee specified in
Article 34 or an address designated in writing by the applicable payee
party from time to time.
8.6 With respect to payments with regard to any non-dollar denominated
amounts, such amounts shall be deemed to have been converted into U.S.
Dollars at the conversion rate(s) published in The Wall Street Journal
(Eastern Edition) as of the last day of the applicable period (quarter
or month or such other period as may be applicable) for which such
payment is due, and payment shall be made by the applicable payor party
to this Agreement in U.S. Dollars of the amount due under this
Agreement in respect of such amount.
8.7 Notwithstanding anything to the contrary contained in this Agreement,
in the event that either party is prevented from making any payment
under this Agreement by virtue of restrictions on currency conversion
or repatriation under the statutes, laws, codes or governmental
regulations of the country from which the payment is to be made, then
such payments may be paid by depositing them in the currency in which
accrued to the account of the party concerned in a bank acceptable to
that party in the country whose currency is involved.
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8.8 Payments to either party hereunder shall be deemed paid as of the day
on which they are received at the address of the payee party designated
pursuant to Article 34. Any part of a payment which is not paid on or
before the date when due shall accrue interest thereon from such date
until the date of its payment in full at two (2) percentage points over
the per annum interest rate published from time to time as the "Prime
Rate" in The Wall Street Journal (Eastern Edition), but in no event
shall such rate exceed the maximum rate permitted by applicable law.
8.9 All foreign taxes, assessments and fees of any nature levied or
incurred on account of any payments accruing under this Agreement will
be assumed and paid by the party owing the payments and not deducted
from payments owed to the other party.
8.l0 If Ilex shall market Clofarabine or any Product in the USA and Canada
under the exclusive license granted in Article 6.1 hereof, Ilex shall
deliver to Bioenvision within forty-five (45) days after the end of
each calendar quarter a report, certified by the chief financial
officer (or equivalent) of Ilex, setting forth in reasonable detail the
calculation of payments made or received by Ilex during the quarter and
for each calendar quarter, including gross sales, net sales, value
added taxes, number of units sold, unit price, royalties by net sales
range and the like on a country-by-country basis by Ilex, Sublicensees,
joint ventures and their Affiliates.
8.11 If Bioenvision shall market Clofarabine or any Product in the countries
within the Territory other than the USA and Canada, Bioenvision shall
deliver to Ilex within forty-five (45) days after the end of each
calendar quarter a report, certified by the chief financial officer (or
equivalent) of Bioenvision, setting forth in reasonable detail the
calculation of payments made or received by Bioenvision during the
quarter and for each calendar quarter, including gross sales, net
sales, value added taxes, number of units sold, unit price, royalties
by net sales range and the like on a country-by-country basis by
Bioenvision, Sublicensees, joint ventures and their Affiliates.
8.12 All payments by Ilex under this Agreement shall be made in U.S. dollars
unless the parties otherwise agree.
9. RECORDS
9.1 Bioenvision shall maintain accurate records of all of its operations
affecting payments hereunder, and shall permit Ilex or its duly
authorized agent to make a reasonable number of reasonable inspections
(no more than once, annually) of all such records and to make copies of
or extracts from such records during regular business hours but without
disruption of business activities throughout the term of this Agreement
and for a period of three (3) years thereafter. All such inspections
and copying shall be subject to mutually acceptable agreements to
maintain the confidentiality and restrict the use of such information.
The fees charged for an Ilex authorized audit shall be paid by Ilex;
provided, however, that if an audit discloses an underpayment by
Bioenvision of more than five percent (5%) for such audited period,
Bioenvision shall pay the reasonable fees and expenses charged by the
firm conducting the audit.
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9.2 Ilex shall maintain accurate records of all of its operations affecting
payments hereunder, and shall permit Bioenvision or its duly authorized
agent to make a reasonable number of reasonable inspections (no more
than once, annually) of all such records and to make copies of or
extracts from such records during regular business hours but without
disruption of business activities throughout the term of this Agreement
and for a period of three (3) years thereafter. All such inspections
and copying shall be subject to mutually acceptable agreements to
maintain the confidentiality and restrict the use of such information.
The fees charged for a Bioenvision authorized audit shall be paid by
Bioenvision; provided, however, that if an audit discloses an
underpayment by Ilex of more than five percent (5%) for such audited
period, Ilex shall pay the reasonable fees and expenses charged by the
firm conducting the audit.
10. MANUFACTURE
10.1 If Ilex is granted an exclusive license to manufacture Clofarabine or
any Product in the USA and Canada under Article 6.1 of this Agreement,
this exclusive license shall in no way limit Bioenvision from
manufacturing Clofarabine outside the USA and Canada. Both parties
shall exchange information that may be useful for the manufacture of
the Product.
10.2 If Ilex shall grant a sublicense of the rights within the USA and
Canada in accordance with the terms of this Agreement, such sublicense
may include the rights to manufacture the Product in the relevant
country.
11. OWNERSHIP OF THE TECHNOLOGY, TECHNICAL
INFORMATION AND IMPROVEMENTS
11.1 Ilex and Bioenvision shall each retain full ownership of their existing
intellectual property rights including rights in the process of being
protected and rights conceived but not yet reduced to practice as of
the Effective Date. To the extent existing intellectual property rights
of Bioenvision fall within the definitions of Patents, Technology,
Technical Information and Improvements, as set forth in this Agreement,
such rights shall be included in any license or other operating rights
granted to Ilex under the Terms hereof. Ilex agrees not to directly or
indirectly contest any of Bioenvision's intellectual property rights
licensed to Ilex hereunder and to use all commercially reasonable
efforts to support Bioenvision in that regard against any adverse third
party claim.
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11.2 All Improvements developed under projects funded, in whole or in part,
by this Agreement shall be owned by the Party or Parties who fund the
project, in question, and shall be included in the licenses or transfer
of rights contemplated by this Agreement. In the event that a
conflicting obligation prevents SRI from including such an Improvement,
Bioenvision shall use reasonable efforts to assist Ilex to obtain
rights from the appropriate third party or parties. If the party that
owns an improvement elects not to pursue patent coverage for that
improvement then either of the other parties may file in the name of
all parties.
12. PATENT PROSECUTION
12.1 Ilex shall bear all expenses related to the filing, prosecution or
maintenance of all Patents, and Improvements relating to the Product in
whole or in part in the USA and Canada as provided in Article 3.8
hereto. Bioenvision shall provide Ilex with a detailed summary of such
costs as incurred by Bioenvision and/or SRI. Outside of the USA and
Canada, such patent filing, prosecution and maintenance costs shall be
shared 50/50 in those territories and countries where Bioenvision and
Ilex co-market Clofarabine or any other Product, and paid solely by
Bioenvision in countries or territories where Bioenvision or another
Bioenvision sublicensee is marketing Clofarabine or any other Product.
12.2 Bioenvision shall promptly furnish to Ilex copies of all documents
received by Bioenvision relating to the filing of future patents
relating to the Patents or any Improvements.
12.3 Bioenvision shall provide Ilex with draft copies of all correspondence
and filings and related prosecution documents received by it on the
Patents and Improvements relating to the Product and Ilex shall
promptly provide comments, if any, to Bioenvision. Bioenvision shall
confer with Ilex regarding prosecution tactics and strategy.
Bioenvision shall have the right to take such actions as are reasonably
necessary, in its good faith judgement, to preserve all rights under
the Patents and Improvements owned by, or licensed exclusively to
Bioenvision under the SRI agreement throughout the Territory. As soon
as practical, subsequent to the filing of any prosecution document,
Bioenvision shall provide Ilex with a copy of such document. In
addition, Bioenvision shall copy Ilex with any official office action
and Bioenvision responses and submissions.
13. INFRINGEMENT BY THIRD PARTY
13.1 Either party shall notify the other party of any suspected infringement
by a third party of a Patent in the Field and the Territory, and each
party shall inform the other of any evidence of such infringement(s).
17
13.2 Bioenvision shall have the first right to institute suit for
infringement(s) in the Field and Territory. At Bioenvision's expense,
Ilex will reasonably assist Bioenvision in such prosecutions if so
requested by Bioenvision, and will lend its name to such actions if
requested by Bioenvision or required by law to prosecute, defend or
maintain any such action. Notwithstanding the foregoing, Ilex shall
have the right to participate and be represented in any such
prosecutions by its own counsel at its own expense.
13.3 If Ilex notifies Bioenvision of its desire to institute suit for
infringement(s) and Bioenvision fails to exercise its first right to do
so within ninety (90) days of such notice, then Ilex may, at its own
expense, bring suit or take any other appropriate action. At Ilex's
expense, Bioenvision will reasonably assist Ilex in such prosecutions
if so requested by Ilex, and will lend its name to such actions if
requested by Ilex or required by law to prosecute, defend or maintain
any such action. Notwithstanding the foregoing, Bioenvision shall have
the right to participate and be represented in any such prosecutions by
its own counsel at its own expense.
13.4 No settlement of any suspected infringement(s), whether or not a suit
has been instituted, may be entered into without the express written
consent of Bioenvision and Ilex.
13.5 Any amounts recovered pursuant to an infringement suit, settlement or
otherwise shall be retained by and be the property of the party
bringing the action. In the event Bioenvision receives any monies or
other consideration from a third party as a result of Bioenvision's
exercise of its rights under Article 13 of this Agreement, Bioenvision
shall first be reimbursed for expenses incurred and paid for, Ilex
shall then receive a portion of the remainder in accordance with the
applicable provision(s) of Article 4 as applied to all such monies or
other considerations whether such monies or other considerations are
denoted as "royalties," "damages," "releases" from prior acts, or any
other designation.
14. REVOCATION PROCEEDINGS
14.1 In the event either party becomes aware of the institution by a third
party of any proceedings for the revocation of any Patents or
Improvements in any country in the Territory, such party shall promptly
notify the other party. Bioenvision shall defend any such proceedings
at its own expense, in its own name.
14.2 Ilex shall have the right to participate in such revocation proceedings
in the USA and Canada at Ilex's expense, and Bioenvision will lend its
name to such proceedings if requested by Ilex or required by law to
prosecute, defend or maintain any such action. Sublicensees of Ilex,
which were granted in accordance with the terms of this Agreement,
shall also have the right to participate in such revocation proceedings
at their own cost.
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14.3 Settlement of any revocation proceedings shall be subject to the
approval of Bioenvision; such approval shall not be unreasonably
withheld.
15. INFRINGEMENT OF THIRD PARTY RIGHTS
15.1 Bioenvision "does not warrant" as stated in Article 17. Disclaimer,
"that the patents will be free from claims of infringement by third
parties or any other rights of third parties."
15.2 Bioenvision as stipulated in Article 18. Indemnification, "agrees to
indemnify, hold harmless and defend Ilex... from and against any and
all demands, claims, suits, and actions ..." which includes
infringement of third party rights.
15.3 Ilex will reasonably assist Bioenvision to defend or settle such third
party claim if so requested and shall do so at its own cost.
15.4 Ilex shall have the right to participate and be represented in any such
claim by a third party by its own counsel at its cost.
15.5 No settlement of any third party claim may be entered into without the
express written consent of Bioenvision.
15.6 In the event, by way of counterclaim or otherwise, either party or both
parties recover any damages or other sums in any action, suit, or
proceeding involving a claim by a third party, or in settlement
thereof, such recovery shall be applied and shared as mutually agreed.
16. REPRESENTATIONS
16.1 This Agreement is entered into by Bioenvision in its corporate
capacity. It is understood and agreed that the U.S. Government is not a
party to this Agreement and in no manner whatsoever shall be liable for
or assume any responsibility or obligation for any claim, cost, or
damages arising out of or resulting from this Agreement or the subject
matter licensed.
16.2 Bioenvision warrants to Ilex and its Affiliates and their respective
officers, directors, employees, other agents, representatives and
assigns that:
1. Bioenvision is a corporation duly incorporated and validly
existing and (to the extent applicable) in good standing under
the laws of Delaware, with the corporate power to own, lease
and operate its properties and to carry on its business as now
conducted.
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2. Bioenvision has all necessary corporate power and authority to
enter into this Agreement and to consummate the transactions
contemplated hereby and to perform its obligations under this
Agreement.
3. The execution, delivery and performance of this Agreement by
Bioenvision does not conflict with or contravene the
certificate of incorporation or by-laws, regulations or
partnership agreement (or other comparable governing
instruments with different names) of Bioenvision, nor will the
execution, delivery or performance of this Agreement conflict
with or result in a breach of, or entitle any party thereto to
terminate, any material agreement or instrument to which
Bioenvision is a party, or by which any of its assets or
properties is bound.
4. This Agreement has been duly authorized, executed and
delivered by Bioenvision and upon execution and delivery by
Ilex constitutes a legal, valid and binding agreement of
Bioenvision, enforceable against Bioenvision in accordance
with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally.
16.3 Ilex hereby represents and warrants to Bioenvision and its Affiliates
and their respective officers, directors, employees, other agents,
representatives and assigns that:
1. Ilex is a corporation duly incorporated and validly existing
as a corporation and (to the extent applicable) in good
standing under the laws of Delaware with the corporate power
to own, lease and operate its properties and to carry on its
business as now conducted.
2. Ilex has all necessary corporate power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby and to perform its obligations under this
Agreement.
3. The execution, delivery and performance of this Agreement by
Ilex does not conflict with or contravene its articles or
certificate of incorporation or by-laws, regulations or
partnership agreement (or other comparable governing
instruments with different names), nor will the execution,
delivery or performance of this Agreement conflict with or
result in a breach of, or entitles any party thereto to
terminate, any material agreement or instrument to which Ilex
is a party, or by which any of its assets or properties is
bound.
4. This Agreement has been duly authorized, executed and
delivered by Ilex and upon execution and delivery by
Bioenvision and constitutes a legal, valid and binding
agreement of Ilex, enforceable against Ilex in accordance with
its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally.
20
16.4 Bioenvision represents that it has the unencumbered right to grant all
of the rights granted herein.
16.5 Bioenvision is unaware of any claims by any third parties with respect
to Patent infringement or any other type of liability relevant to
licensing of the Technology, which have not been disclosed to Ilex as
of the date of this Agreement.
17. DISCLAIMER
Except as expressly set out in Article 16, Bioenvision does not make any express
or implied warranties, statutory or otherwise, concerning the Technology or any
technical information communicated by Ilex by Bioenvision. Specifically, but
without limiting the foregoing, Bioenvision makes no express or implied warranty
of merchantability, fitness (for a particular purpose or otherwise), safety or
usefulness of the Technology, Patents, Improvements, Products, or Inventions.
All physical embodiments of the Technology, Patents, Improvements, Products, or
Inventions provide by Bioenvision are provided on an "as is" basis. Bioenvision
does not warrant the accuracy of any information included within the Technical
Information nor does Bioenvision warrant that any such information constitutes
trade secrets or confidential information or that the patents will be free from
claims of infringement by third parties or any other rights of third parties
except as otherwise set forth in this Agreement. Under no circumstances shall
either party be liable to the other party or any third party for any incidental
or consequential damages in tort, contract, strict liability or otherwise
incurred by other party or any third party.
18. INDEMNIFICATION
18.1 Bioenvision hereby agrees to indemnify, defend and hold harmless Ilex,
its Affiliates, officers, directors, employees and agents from and
against any liabilities, claims, damages, costs, expense (including
reasonable attorneys' fees), judgments (collectively, "Damages")
arising out of, based upon or resulting from a material breach of this
Agreement (including without limitation the breach of a representation,
warranty or covenant) by Bioenvision, except to the extent that any
such Damage arise out of, are based upon or result from (i) a breach of
the Agreement (including without limitation the breach of a
representation, warranty or covenant) by Ilex, or (ii) the negligence
or willful misconduct of Ilex.
18.2 Ilex hereby agrees to indemnify, defend and hold harmless Bioenvision,
its Affiliates, officers, directors, employees and agents from and
against any Damages arising out of, based upon or resulting from a
material breach of this Agreement (including without limitation the
breach of a representation, warranty or covenant) by Ilex, except to
the extent that any such Damages arise out of, are based upon or result
from (i) a breach of this agreement (including without limitation, the
breach of a representation, warranty or covenant) by Bioenvision, or
(ii) the negligence or willful misconduct of Bioenvision.
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18.3 Any part entitled to indemnification under paragraph (a) or (b) of this
Article 18 (an "Indemnified Party") shall promptly notify the party
potentially responsible for such indemnification (the "Indemnifying
Party") upon becoming aware of any claim or claims asserted or
threatened against such Indemnified Party which could give rise to a
right of indemnification under this Agreement; provided, however, that
the failure to give such notice shall not relieve the Indemnifying
Party of its indemnity obligation hereunder except to the extent that
such failure substantially prejudices its rights hereunder.
18.4 The Indemnifying Party shall have the right to defend, at its sole cost
and expense, such claim by all appropriate proceedings, which
proceedings shall be prosecuted diligently by the Indemnifying Party to
a final conclusion or settled at the discretion of the Indemnifying
Party; provided, however, that the Indemnifying Party may not enter
into any compromise or settlement unless the Indemnified Party consents
thereto, which consent shall not be unreasonably withheld, conditioned
or delayed.
18.5 The Indemnified Party may participate in, but not control, and defense
or settlement of any claim controlled by the Indemnifying Party
pursuant to this Article 18 and shall bear its own costs and expenses
with respect to such participation; provided, however, that the
Indemnifying Party shall bear such costs and expenses if counsel for
the Indemnifying Party shall have reasonably determined that such
counsel may not properly represent both the Indemnifying Party and the
Indemnified Party.
18.6 If the Indemnifying Party fails to notify the Indemnified Party within
twenty (20) days after receipt of notice of a claim in accordance with
Article 18.3 hereof that it elects to defend the Indemnified Party
pursuant to this Article 18.3, or if the Indemnifying Party elects to
defend the Indemnified Party but fails to prosecute or settle the claim
diligently and promptly, then the Indemnified Party shall have the
right to defend, at the sole cost and expense of the Indemnifying
Party, the claim by all appropriate proceedings, which proceedings
shall be promptly and vigorously prosecuted by the Indemnified Party to
a final conclusion or settled; provided, however, that in no event
shall the Indemnifying Party be required to indemnify the Indemnified
Party for any amount paid or payable by the Indemnified Party in the
settlement of any such claim agreed to without the consent of the
Indemnifying Party, which shall not be unreasonably withheld,
conditioned or delayed.
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18.7 Notwithstanding anything in this Article 18 to the contrary, Ilex shall
be responsible for any liability created or occurring in the USA and
Canada for or on account of any injury, loss or damage, of any kind or
nature sustained by, or any damage assessed or asserted against, or any
other liability incurred by or imposed upon either party arising out of
or in connection with or resulting from, directly or indirectly, (i)
the production, use or sale of any Product, Technology, Invention, or
Improvement by Ilex or any Ilex Affiliate or Sublicensee or (ii) the
use by Ilex or any Ilex Affiliate or Sublicensee of any technical
information, techniques, or practices disclosed by either party, or
(iii) any advertising or other promotional activities with respect to
any of the foregoing by Ilex or any Affiliate or Sublicensee. If a
sublicense is granted by Ilex to a third party that third party shall
accept all liability for any injury, loss or damage as defined above.
19. INSURANCE
Ilex shall maintain, during the term of this Agreement, reasonable amounts of
comprehensive general liability insurance, including products liability
insurance, with reputable and financially secure third party insurance carriers
to cover the activities of Ilex, its Affiliates and Sublicensees hereunder, and
in amounts and on such terms as are commercially reasonable in accordance with
customary industry practices. Such insurance shall be written to cover claims
incurred, discovered, manifested, or made during the term of this Agreement
during the period that any product, process, or service, relating to, or
developed pursuant to, this Agreement is being commercially distributed or sold
by Ilex or by a sublicensee, affiliate or agent of Ilex, and for a commercially
reasonable period thereafter. On or before the date of first commercial sale of
Clofarabine or other Product by Ilex or its Affiliates or Sublicensees, Ilex
shall furnish to Bioenvision a certificate of insurance evidencing such coverage
and periodically, upon request, provide evidence that the coverage is still in
effect. During the period from the date of this Agreement through the date of
first commercial sale of Clofarabine or other Product by Ilex or its Affiliates
or Sublicensees, Ilex shall maintain (during the term of this Agreement)
reasonable amounts of general liability insurance with reputable and financially
secure third party insurance carriers to cover the activities of Ilex, its
Affiliates and Sublicensees hereunder, in amounts and on such terms as are
commercially reasonable in accordance with customary industry practices. Such
insurance shall be written to cover claims incurred, discovered, manifested, or
made during the term of this Agreement, as a result of clinical trials or
otherwise, and for a commercially reasonable period thereafter. Ilex shall
furnish to Bioenvision a certificate of insurance evidencing such coverage
within fifteen (15) days of the effective date of this Agreement and
periodically, upon request, provide evidence that such coverage is still in
effect.
20. TERM AND TERMINATION
20.1 This Agreement shall commence on the Effective Date and, unless sooner
terminated under this Article 20, this Agreement (other than the
portions thereof pertaining to confidentiality and restrictions on use
of intellectual property of the other party) shall expire upon
expiration of the last to expire of all Patent(s), relating to
Clofarabine or any other Product including any extensions thereof and
any periods of exclusivity granted by regulatory agencies or other
governmental bodies, whereupon the terms of Article 20.3 shall apply.
In the event that (i) Bioenvision no longer holds a license or
sublicense to use any of the Patent(s), Improvement(s) and Patent(s)
relating to the Products; or (ii) the SRI Agreement is terminated; then
this Agreement shall be considered to have expired but the terms of
Article 20.2 may still apply. Furthermore, this Agreement shall expire
when Bioenvision is no longer due any payments from Ilex or any of its
sublicensee(s).
23
20.2 In the event the SRI Agreement is terminated for any reason, other than
default by ILEX of any material obligation under this Agreement, SRI
agrees to continue any license arrangement with ILEX as contemplated in
this Agreement under the same terms as set forth herein.
20.3 The payment obligations under this Agreement shall continue throughout
the term as defined in Article 20.1 but would be subject to good faith
renegotiations upon the expiration of the last to expire of the
Patents, or upon the abandonment of the last to be abandoned of any
patent applications if no patents have been issued, whichever is the
later, unless this Agreement is sooner terminated. Such good faith
renegotiations shall take into account on a country-by-country or
regional basis but not be limited to: (i) Product competition; (ii)
utilization, incorporation and value of Technical Information; (iii)
value of Technical Information if no longer confidential or proprietary
through no fault of Bioenvision, Ilex or their Sublicensee(s),
contractors, financiers or any other Bioenvision agent(s) or purchasers
of Product or services having access to Technical Information; (iv) the
applicable contract or patent law or (v) prior payment commitments
described in Article 3, provided that in no event shall such payment
obligations extend beyond such patent expiration or abandonment by more
than five (5) years, unless Ilex or it's Sublicensees continue to be
the exclusive commercial source of Clofarabine and/or any other Product
in the USA and Canada in which case the royalty payments set forth
herein shall continue at a renegotiated rate (not to exceed 1/2 of the
royalty rates then in effect) for an additional five (5) year period or
until the commercial exclusivity is lost, whichever event occurs first.
SRI shall use its best efforts to ensure that Ilex continues to be the
exclusive commercial source of Clofarabine and/or any Product in the
USA and Canada during the extension periods referred to in this
Article.
20.4 Upon termination of this Agreement, neither party shall be released
from any obligation that matured prior to the effective date of such
termination or from indemnification obligations pursuant to Article 18
arising with respect to the period through the termination date. Ilex
and any sublicensee may, however, after the effective date of such
termination, sell, in an orderly and commercially reasonable fashion,
all Products in inventory provided that Ilex shall pay to Bioenvision
the royalties thereon as required by Article 6 hereof and submit the
reports required by Article 8 hereof and that the indemnification
obligations pursuant to Article 18 shall apply with respect to those
sales.
24
20.5 Except as provided in this Agreement, if either party shall be in
default of any obligation hereunder (including without limitation a
breach of a representation, warranty or covenant), the other party may
terminate this Agreement by giving notice of termination by certified
or registered mail to the party at fault, specifying the basis for
termination. If within sixty (60) days after the receipt of such notice
of termination, the party in default shall remedy the condition forming
the basis for termination such notice of termination shall cease to be
operative, and this Agreement shall continue in full force. In
addition, Ilex shall have the right to terminate this Agreement without
further liability, except as provided under Article 20.3, upon thirty
(30) days prior written notice to Bioenvision, if Clofarabine fails to
demonstrate sufficient efficacy in the treatment of CLL to meet the
approval criteria that have been agreed upon with the FDA, or if
substantial adverse patient reactions or other factors relating to the
inherent toxicity or side effects of Clofarabine are uncovered which
would cause the FDA to withdraw marketing approval for CLL or to turn
down any request for such marketing approval. Upon any termination of
this Agreement by Ilex, Ilex shall immediately pay any and all unpaid
amounts which have accrued through that date, and any unexercised stock
options granted pursuant to this Agreement shall be terminated.
20.6 Bioenvision or Ilex may terminate this Agreement upon written notice to
the other party if that other party makes a general assignment for the
benefit of creditors, is the subject of proceedings in voluntary or
involuntary bankruptcy or has a receiver or trustee appointed for
substantially all of its property; provided that in the case of an
involuntary bankruptcy proceeding such right to terminate shall only
become effective if the other party consents thereto or such proceeding
is not dismissed within ninety (90) days after the filing thereof. Each
of the parties hereto acknowledges and agrees that this Agreement (i)
constitutes a license of Intellectual Property (as such term is defined
in the United States Bankruptcy Code, as amended (the "Code"), and (ii)
is an executory contract, with significant obligations to be performed
by each party hereto. The parties agree that either party may fully
exercise all of its rights and elections under the Code, including,
without limitation, those set forth in Section 365(n) of the Code. The
parties further agree that, in the event that either party elects to
retain its rights under the Code, that party shall be entitled to
complete access to any technology licensed to it hereunder and all
embodiments of such technology. Such embodiments of the technology
shall be delivered to such party not later than (a) the commencement of
bankruptcy proceedings against the other party, unless the other party
elects to perform its obligations under this Agreement, or (b) if not
delivered under (a) above, upon the rejection of this Agreement by or
on behalf of the other party.
25
20.7 It is the parties' intent and understanding that to the extent
Bioenvision receives royalty payments from ILEX or other parties
pursuant hereto for the purpose of making such payments to SRI, such
payments are to be income to Bioenvision for tax purposes only if, and
to the extent that, Bioenvision has corresponding and equal deductions
from taxable income, for tax purposes. If and to the extent that this
should prove not to be the case in any tax jurisdiction, the parties
shall promptly take such steps as shall be necessary to amend the terms
of this Agreement in respect of such tax jurisdiction only as necessary
to cause the parties intent, as expressed in the first sentence of this
paragraph, to be the case.
21. CONFIDENTIALITY; PUBLICATION; PUBLICITY
21.1 Except as expressly set forth in this Article 21, each party shall, and
shall cause its Affiliates and its and their respective officers,
directors, employees, agents and subcontractors (collectively,
"Representatives") to keep confidential any and all technical,
commercial, scientific and other proprietary data, processes, documents
or other information (whether in oral, written or electronic form) or
physical object (including, without limitation, Inventions,
Improvements, Technology, Patents, Products, Technical Information,
intellectual property, marketing data, agreements, license
applications, and business plans and projections of any party acquired
from the other party, its affiliates or any of their respective
Representatives (the "Providing Party") in respect of the transactions
contemplated by this Agreement ("Confidential Information"), and,
except to the extent necessary to develop and/or market Clofarabine or
any other Product pursuant to this Agreement, each party shall not
disclose directly or indirectly, and shall cause its respective
Affiliates and Representatives not to disclose directly or indirectly,
any Confidential Information to anyone outside such Person, such
affiliates and their respective Representatives, except that the
foregoing restriction shall not apply to any information disclosed
hereunder to any party if such Person (the "Receiving Person") can
reasonably demonstrate that such Confidential Information:
(i) is or hereafter becomes generally available to the trade
or public other than by reason of any breach hereof;
(ii) was already known to the Receiving Person or such
affiliate or Representative;
(iii) is disclosed to the Receiving Person or such affiliate
or Representative by a Third Party who has the right to
disclose such information;
26
(iv) is developed by or on behalf of the Receiving Person or
any of its affiliates independently, without reliance on
Confidential Information received hereunder; or
(v) is otherwise required to be disclosed in compliance with
applicable legal requirements by a governmental authority or
regulatory body, the Receiving Party promptly notifies the
Providing Party of the obligation to disclose in order to
allow the Providing Party to object or seek a protective
order, and such information shall remain confidential
Information for all other purposes unless subparagraphs (i)
through (iv) above otherwise apply.
21.2 Except solely in furtherance of their respective rights and obligations
hereunder, each party agrees that it shall not (and shall not permit
any of its affiliates to) at any time use any Confidential Information
in the conduct of its businesses without the prior written consent of
the other party. The obligations set forth in this Article 21 shall
extend to copies, if any, of Confidential Information made by any of
the Persons referred to in Article 21 and to documents prepared by such
persons which embody or contain Confidential Information, and to any
electronic data files containing Confidential Information.
21.3 Each party shall deal with Confidential Information so as to protect it
from disclosure with a degree of care not less than that used by it in
dealing with its own information intended to remain exclusively within
its knowledge, but not less than a reasonable standard of care, and
shall take reasonable steps to minimize the risk of disclosure of
Confidential Information.
21.4 The obligations set forth in this Article 21 shall survive the
expiration, termination or assignment of this Agreement, for a period
of five (5) years thereafter.
21.5 The Receiving Person shall (and shall cause its affiliates and
Representatives to), at the written request of the disclosing Person,
return all Confidential Information to the disclosing Person or destroy
all Confidential Information in its or their possession; provided,
however, that the Receiving Person may, retain one set of copies solely
for legal archival and compliance purposes.
21.6 (i) If either party desires to publish or present the results of the
Co-Development Program, the publishing/presenting party shall provide
the non-publishing/non-presenting party a copy of the manuscript of any
proposed publication or presentation. The non-publishing/non-presenting
party shall then have thirty (30) days to review and comment on the
manuscript or presentation, and the publishing/presenting party agrees
to delete any information identified by the non-publishing/
non-presenting party as its trade secrets or Confidential Information.
27
(ii) In the event the non-publishing/non-presenting party determines
that a Patent application covering information contained in the
proposed publication or presentation should be filed, the party
proposing the publication or presentation shall delay such publication
or presentation for up to sixty (60) days to allow such filing to be
made.
21.7 Each party shall provide the other party with the prior opportunity to
review and approve any press releases or similar public announcements
concerning this Agreement or clinical, regulatory and commercial
developments related to Products as soon as practicable, but in no
event less than 24 hours before an announcement is made, provided, that
nothing contained herein shall preclude any party hereto from making
such disclosures in such fashion as it reasonably believes are required
under applicable law, based upon the advice of competent legal counsel.
Bioenvision shall not use the name of Ilex or otherwise refer to any
organization related to Ilex, except with the written approval of Ilex,
such approval not to be unreasonably withheld. Ilex shall not use the
name of Bioenvision or otherwise refer to any organization related to
Bioenvision, except with the written approval of Bioenvision, such
approval not to be unreasonably withheld.
22. DISPUTE RESOLUTION
22.1 The parties shall attempt to resolve through good faith discussions any
dispute which arises under this Agreement. Any dispute may, at the
election of either party, be referred to the chief executive officers,
(or the equivalent), of each party. If they are unable to resolve the
dispute, within thirty (30) days after delivery of written notice of
the dispute from one party to the other, either party may seek to
resolve it by initiating Alternative Dispute Resolution ("ADR") at the
geographical location of the noninitiating party in which the Judicial
Arbitration and Mediation Services ("JAMS") of such location, through a
panel of three (3) arbitrators (the "Arbitrators"), shall control the
proceedings as provided herein. If JAMS is not in existence at the time
of such dispute, the American Arbitration Association, of such location
shall be substituted.
22.2 An ADR shall be initiated by a party by sending written notice thereof
to the other party and JAMS, which notice shall state the issues to be
resolved. Within ten (10) business days after receipt of such notice,
the other party may, by sending written notice to the initiating party
and JAMS, add issues to be resolved. Within twenty (20) business days
after the date of the original ADR notice, JAMS shall nominate to the
parties at least ten (10) qualified nominees from JAMS' panel of
potential arbitrators. Each arbitrator shall have experience in the
Field relevant to the dispute and in intellectual property law matters.
Each party shall have five (5) business days after the receipt of such
nominations to select one arbitrator. The two (2) arbitrators so
selected shall mutually agree on a third arbitrator to complete the
panel.
28
22.3 In the event of a dispute between the parties relating to the
calculation of any royalties or the amount of other consideration
payable under this Agreement (including without limitation, the results
of any audit conducted on behalf of a party pursuant to Article 9),
then, in addition to the procedure set forth above and in Article 22.2,
the Arbitrators shall be partners or full members of an internationally
recognized certified public accounting firm which is not an auditing
firm for either party and has not provided material services to either
party during the last two (2) year period prior to the date of ADR
initiation.
22.4 Except as otherwise provided in this Article 22, such hearing shall be
conducted pursuant to the JAMS Rules or the Commercial Arbitration
Rules of the American Arbitration Association (AAA) as applicable.
22.5 The Arbitrators shall render a disposition on the proposed rulings as
expeditiously as possible after the hearing, but not later than fifteen
(15) business days after the conclusion of the hearing. In the
circumstances where the Arbitrators rule for a party on a claim in the
form of a claim for monetary damages, the parties will then submit a
proposed remedy within ten (10) days of notice of the ruling. The
proposed remedy may be accompanied by a brief in support of the remedy
not to exceed five (5) pages. The Arbitrators will rule on the proposed
remedies within ten (10) days of their submission. The Arbitrators'
disposition shall be final and not appealable, except that either party
shall have the right to appeal such disposition on the basis it was
affected by fraud or bad faith in connection with the ADR proceedings.
A judgment on the Arbitrators' disposition may be entered in any court
having jurisdiction over the parties. The reasonable fees and expenses
of the Arbitrators, as well as the standard charges of JAMS for its
assistance, shall be borne equally by the parties or as they may
otherwise agree.
22.6 A party shall not be prohibited from bringing a claim for resolution
under this Article 22 on the ground that the claim could have been
brought during an earlier proceeding under this same Article.
22.7 The following disputes, causes of action or claims shall not be subject
to the dispute resolution process set forth in this Article 22:
(i) a claim arising from a suit, action, or proceeding brought by
a third party or Sublicensee not subject to ADR;
(ii) a claim relating to undisputed amounts owed by either party to
the other under this Agreement;
29
(iii) a suit, action, or proceeding to compel either party to comply
with the dispute resolution procedures set forth in this
Article 22;
(iv) a dispute, controversy, or claim relating to the scope,
enforceability, infringement or validity of a patent or
trademark of either party; and
(v) a cause of action seeking temporary or preliminary injunction
relief.
23. ASSIGNABILITY
Neither party shall assign any rights under this Agreement not specifically
transferable by its terms without prior written consent of the other party,
which consent shall not be unreasonably withheld; provided further, that either
party may assign upon prior written notice to the other party if the assignment
is in connection with the sale or other transfer of all of the business of the
assigning party to which this Agreement relates. Subject to the limitation on
assignment herein, this Agreement shall be binding upon and inure to the benefit
of the successors in interest and assigns of Bioenvision and Ilex. In order for
any assignment to be effective, any such assignee of or successor to a party's
interest shall expressly assume in writing the performance of all the terms and
conditions of this Agreement to be performed by said party and such assignment
shall not relieve the assignor of any of its obligations under this agreement.
24. REFORM
24.1 The parties agree that if any part, form, or provision of this
Agreement shall be found illegal or in conflict with any valid
controlling law, the validity of the remaining provisions shall not be
affected thereby.
24.2 In the event the legality of any provision of this Agreement is brought
into question because of a decision by a court of competent
jurisdiction of any country in which this Agreement applies,
Bioenvision, by written notice to Ilex, may revise the provision in
question or may delete it entirely so as to comply with the decision of
the said court.
25. WAIVER AND ALTERATION
25.1 The failure of either party to insist, in any one or more instances,
upon the performance of any of the terms, covenants or conditions of
this Agreement and to exercise any right hereunder, shall not be
construed as a waiver or relinquishment of the future performance of
any such term, covenant or condition or the future exercise of such
right, but the obligations of the other party with respect to such
future performance shall continue in full force and effect.
30
25.2 A provision of this Agreement may be altered only by a writing signed
by both parties, except as provided by Article 24, above.
26. MARKING
26.1 Ilex shall place in a conspicuous location on any product or its
packaging, which is made or sold under any Patent coming within this
Agreement, a patent notice in accordance with the laws concerning the
marking of patented articles of the particular jurisdiction where any
product is marketed or sold.
26.2 Ilex shall include a marking provision similar to Paragraph 26.1 above
in every sublicense granted pursuant to Article 7 above.
27. IMPLEMENTATION
Each party shall execute any instruments reasonably believed by the other party
to be necessary to implement the provisions of this Agreement.
28. GOVERNING LAW
This Agreement shall be deemed to have been entered into and shall be governed
by, construed and enforced in accordance with laws of the State of Delaware
applicable to contracts wholly entered into and performed within such State, and
in the English language and, subject to the arbitration provisions of this
Agreement, any action brought to enforce any provision or obligation hereunder
shall be brought in a court of competent jurisdiction within the State of
Delaware.
29. EXPORTATION OF TECHNICAL INFORMATION
Ilex agrees not to export from The United States of America, directly or
indirectly, any Technical Information furnished to Ilex either directly or
indirectly by Bioenvision, except to the extent and to the countries permitted
by the laws of The United States of America. Ilex agrees to indemnify, defend
and hold harmless Bioenvision, its officers, agents and employees from all
liability involving the violation of such export regulations, either directly or
indirectly by Ilex.
30. HEADINGS
The headings of the articles, sections and paragraphs used in this Agreement are
included for convenience only and are not to be used in construing or
interpreting this Agreement.
31
31. PARTIES INDEPENDENT
In making and performing this Agreement, the parties act and shall act at all
times as independent entities and nothing contained in this Agreement shall be
construed or implied to create an agency, partnership or employer and employee
relationship between Bioenvision and Ilex. Except as specifically provided
herein, at no time shall either party make commitments or incur any charges or
expenses for or in the name of the other party.
32. COUNTERPARTS
This Agreement shall become binding when any one or more counterparts hereof,
individually or taken together, shall bear the signatures of each of the parties
hereto. This Agreement may be executed in any number of counterparts, each of
which shall be an original as against either party whose signature appears
thereon, but all of which together shall constitute but one and the same
instrument.
A facsimile copy of the signed Agreement shall be evidence of execution to the
parties provided that original hard copies of the Agreement are executed and
delivered within five (5) working days of the date of execution below.
33. FORCE MAJEURE
The parties shall not be responsible for failure to perform any of the
obligations imposed by this Agreement (except an obligation to pay money),
provided such failure is caused by fire, storms, floods, strikes, lockouts,
accidents, war, riots or civil commotions, inability to obtain railroad cars or
raw materials, embargoes, any State or Federal regulation, law, or restriction,
seizure or acquisition of the Technology or the Product(s) by the Government of
the United States or of any state, or of any agency thereof or by reason of any
compliance with a demand or request for such Product for any purpose for
national defense, or any other cause or contingency beyond the reasonable
control of said party (whether or not of the same kind or nature as the causes
or contingencies above enumerated), and such a failure shall not subject the
party so failing to any liability to the other; provided, that the
non-performing party shall provide prompt written notice to the other party of
the particular occurrence constituting a force majeure and of its cessation and
shall make diligent efforts to mitigate the adverse consequences of such
non-performance or delays in performance.
34. SURVIVAL OF OBLIGATIONS
In the event of any termination of this Agreement, all obligations of
Bioenvision and ILEX existing prior to termination and all obligations, whether
known or unknown at the time of termination, stemming from the act or omissions
of a given Party, while this
32
Agreement was in force and effect, shall remain an obligation of the given Party
until discharged. Article(s) 4, 5, 7, 9, 13, 18, 19, 21 and 22 as well as any
other provisions to the extent required for the full observation and performance
of the foregoing Articles or which by their nature are intended to survive such
termination, shall survive the termination of this Agreement and continue to be
enforceable.
35. NOTICE
For the purpose of all written communications between the parties, their
addresses shall be:
If to BIOENVISION: If to ILEX:
Address: Address:
One Rockefeller Plaza, Suite 1600 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇ ▇ ▇▇▇▇ Attn: ▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------- ------------------------
Telephone: ▇▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Telephone: 210/▇▇▇-▇▇▇▇
---------------------- --------------------
Fax: ▇▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Fax: 210/▇▇▇-▇▇▇▇
---------------------------- -------------------------
or any other addresses of which either party shall notify the other party in
writing. A copy of all notices to Bioenvision should be sent to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
at: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, 1251 Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
33
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed by their duly authorized officers on the respective dates and at the
respective places hereinafter set forth.
BIOENVISION: ILEX:
By: /s/ ▇. ▇. ▇▇▇▇ By: /s/ Ze'▇▇ ▇▇▇▇▇▇. Ph.D
-------------------------------- ------------------------------
Print Name: ▇. ▇. ▇▇▇▇ Print Name: Ze'▇▇ ▇▇▇▇▇▇. Ph.D.
------------------------ ----------------------
Its: Chairman Its: Executive Vice President/COO
------------------------------ ----------------------------
Date: March 16, 2001 Date: March 21, 2001
----------------------------- --------------------------
Also, by signature of its duly authorized representative below, Southern
Research Institute accepts and agrees to all terms and conditions of this
Agreement which apply directly or indirectly to Southern Research Institute
SOUTHERN RESEARCH INSTITUTE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
It's: Chief Financial Officer
---------------------------------
Date: March 12, 2001
---------------------------------
34
Appendix I
Patents and Patent Applications
Filing Expiration
Country Serial No. Date Priority Patent No. Issued Date
United States 07/355,358 5/23/89 5/23/89 5,034,518 7/23/91 7/23/2008
United States 07/693,646 5/10/91 5/23/89 5,384,310 1/24/95 7/23/2008
& 5/10/91
United States 08/320,879 9/21/94 5/10/91 5,661,136 8/26/97 9/21/2014(1)
European 90909080.5 5/23/90 5/23/89 U.S. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ 0473708 1/15/97 5/23/2010
Germany 0473708 1/25/97 5/23/2010
Great Britain 0473708 1/15/97 5/23/2010
Italy 0473708 1/25/97 5/23/2010
Netherlands 0473708 1/25/97 5/23/2010
Spain 0473708 1/25/97 5/23/2010
Sweden 90909080.5 1/15/97 5/23/2010
Switzerland 0473708 1/25/97 5/23/2010
Canada 2,102,782 5/7/92 5/10/91 (Request for examination filed
2/8/99; Claims equivalent to
U.S. 07/693,646)
United States 60/183,422 2/18/00
PCT Not assigned 2/16/01 2/18/00
-------------
(1) The expiry date for patents pending before the June 8, 1995 GATT
implementation, is the greater of the 20 year term or the 17 year term. The 20
year term is the longer term for the above US Patent No. 5,661,136.
35
Appendix II
Co-Development Agreement between Bioenvision and SRI
36
AGREEMENT TO GRANT LICENSE
WHEREAS Southern Research Institute (SRI) of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Eurobiotech Group, Inc. (Eurobiotech), a Delaware
company have entered into an Agreement to co-develop certain technology, and;
WHEREAS SRI has granted to Eurobiotech a license to co-develop the technology
and to market product(s) developed from the technology in certain territories,
as defined by the Co-development Agreement entered into by the parties, it is
further agreed;
SRI shall allow Eurobiotech to license the technology to Bioenvision, Inc, a
Delaware company that has acquired 100% of the equity holdings in Eurobiotech.
It is agreed that Bioenvision shall be bound by the terms of the Co-development
Agreement and shall make the payment due to SRI under the terms of that
Agreement.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their duly authorized officers on the respective dates and at the respective
places hereinafter set forth.
EUROBIOTECH: SRI:
/s/ ▇.▇. ▇▇▇▇ /s/ ▇.▇. ▇▇▇▇▇
------------------------------ ------------------------------------
Signature Signature
▇.▇. ▇▇▇▇ ▇.▇. ▇▇▇▇▇
------------------------------ ------------------------------------
Print name Print name
19/8/98 9/1/98
------------------------------ ------------------------------------
Date Date
CO-DEVELOPMENT AGREEMENT
BETWEEN SRI AND EUROBIOTECH
TABLE OF CONTENTS
1. DEFINITIONS ........................................................ 1
2. LICENSE AND CO-DEVELOPMENT PROGRAM ................................. 3
3. TECHNICAL INFORMATION LICENSE ...................................... 4
4. LICENSE FEE AND RESEARCH AND DEVELOPMENT FUNDING ................... 5
5. ACQUISITION ........................................................ 6
6. COMMERCIALIZATION STAGE ............................................ 7
7. SUBLICENSING ....................................................... 8
8. PAYMENTS AND REPORTS ............................................... 8
9. RECORDS ............................................................ 10
10. DILIGENCE .......................................................... 10
11. OWNERSHIOP OF THE TECHNOLOGY, TECHNICAL INFORMATION
AND IMPROVEMENTS ................................................... 10
12. PATENT PROSECUTION ................................................. 11
13. INFRINGEMENT BY THIRD PARTY ........................................ 11
14. REVOCATION PROCEEDINGS ............................................. 12
15. INFRINGMENT OF THIRD PARTY RIGHTS .................................. 13
16. REPRESENTATIONS .................................................... 13
17. DISCLAIMER ......................................................... 14
18. INDEMNIFICATION .................................................... 14
19. INSURANCE .......................................................... 15
20. TERMS AND TERMINATION .............................................. 15
i
21. CONFIDENTIALITY; PUBLICATION; PUBLICITY ............................ 16
22. DISPUTE RESOLUTION ................................................. 18
23. ASSIGNABILITY ...................................................... 19
24. REFORM ............................................................. 20
25. WAIVER AND ALTERATION .............................................. 20
26. MARKING ............................................................ 20
27. IMPLEMENTATION ..................................................... 21
28. GOVERNING LAW ...................................................... 21
29. EXPORTATION OF TECHNICAL INFORMATION ............................... 21
30. HEADINGS ........................................................... 21
31. PARTIES INDEPENDENT ................................................ 21
32. COUNTERPARTS ....................................................... 22
33. FORCE MAJEURE ...................................................... 22
34. NOTICE ............................................................. 21
35. EXECUTION .......................................................... 23
APPENDIX I - PATENTS
APPENDIX II- TERMS FOR EUROBIOTECH GROUP, INC. ("EUROBIOTECH") AND
SOUTHERN RESEARCH INSTITUTE ("SOUTHERN") CO-DEVELOPMENT
AGREEMENT
APPENDIX III - EXTENSION OF THE CO-DEVELOPMENT PROGRAM BETWEEN SOUTHERN
RESEARCH INSTITUTE AND EUROBIOTECH GROUP, INC.
APPENDIX IV - GROSS PROFIT MARGIN AND NET INCOME EXAMPLES
APPENDIX V - INTER-INSTITUTIONAL AGREEMENT
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CO-DEVELOPMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into and effective this 31st day of
August 1998, the same date affixed hereto by the party last signing this
Agreement, by and between Southern Research Institute having its principal place
of business in Birmingham, Alabama, herein called "SRI", and Eurobiotech Group,
Inc. having a place of business in ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ herein called "Eurobiotech".
WITNESSETH
WHEREAS, SRI has rights in patents and technical information relating to the
development and uses of 2'-fluoro-2-halo substituted purine nucleosides
effective in vivo against hematologic malignancies and solid tumors as well as
potentially effective for other therapeutic indications such as skin disorders,
arthritis and transplantation immunity; and
WHEREAS, Eurobiotech recognizes that SRI owns inventions and intellectual
property useful in the conduct of Eurobiotech's business; and
WHEREAS, Eurobiotech recognizes that its anticipated business activity will
encompass the practice of technology that requires a license under patents owned
by SRI; and
WHEREAS, Eurobiotech wishes to acquire certain rights to practice the inventions
of such patents and technical information; and
WHEREAS the parties have signed a "Terms for ... Co-Development Agreement" set
forth in Appendix II, to enter into this Agreement, and
NOW THEREFORE, in consideration of the mutual covenants herein contained and
intending to be legally bound thereby, the parties agree as follows:
1. DEFINITIONS
As usual herein the following terms shall have the meanings set forth below:
A. Co-Development Program means the joint development of the Technology by
Eurobiotech and SRI.
B. Commercialization Stage means that period of time during which
Eurobiotech is directly marketing and selling Product(s) through normal
distribution channels in any region of the Territory after receiving
regulatory agency approval to do so in such region.
C. Cost of Goods Sold means the release to the current period as a result
of the sale of a Product(s) of inventoriable costs (the sum of direct
costs and manufacturing overhead) adjusted for changes in ending and
beginning inventory levels.
D. Eurobiotech means Eurobiotech Group, Inc. and joint ventures,
subsidiaries, or other business entities controlled directly or
indirectly by Eurobiotech or in which Eurobiotech owns at least
fifty-one percent (51%) interest.
E. Field means, and is limited to, the practice of the Patent, Invention
and Technical Information licensed hereunder for use in human health
applications.
▇. ▇▇▇▇▇ Margin means the difference between the manufacturing Cost of
Goods Sold and Gross Sales Revenue, with SRI royalties treated as an
excluded cost.
▇. ▇▇▇▇▇ Profit Margin means the ratio of Gross Margin to Gross Sales
Revenue expressed in percentage terms.
▇. ▇▇▇▇▇ Sales Revenue means the gross amount recognized by Eurobiotech or
its affiliates for the sale of a Product(s) through normal distribution
channels (as determined by generally accepted accounting principles),
less any deductions for value added taxes incurred and not recovered by
Eurobiotech or the equivalent in Great Britain or elsewhere in the
Territory.
I. Invention means patented and unpatented, patentable and unpatentable,
proprietary technology related to a 2'-fluoro-2-halo substituted purine
nucleoside (hereafter "Technology") developed by or on behalf of SRI,
that is (i) related to human health applications of the Technology or
(ii) necessary for the practice of Technology for human health
applications as disclosed and claimed in the Patent(s).
J. Improvement means those unencumbered technology advances in the
Technology made by or on behalf of SRI during the term of this
Agreement that are either within the scope of and would constitute an
infringement of the Patent claims or use Technical Information and are
within the Field. SRI shall be obligated to include within the licenses
granted only those SRI Improvements developed during the first three
(3) years from the effective date of the Agreement which would be
reasonably deemed necessary for Eurobiotech's practice of the
Technology, and without which such practice would constitute an
infringement of SRI's rights, unless such grant is not possible due to
SRI's obligations to a third party. Notwithstanding the limitation of
SRI's obligation set forth in the previous sentence, all Improvements
developed under projects funded, in whole or in part, by Eurobiotech
will be included in the licenses granted in this Agreement. In the
event that a conflicting obligation prevents SRI from including an
Improvement within the grant of license, SRI shall use reasonable
efforts to assist Eurobiotech to obtain rights from the appropriate
third party or parties.
K. Licensed Technology means the Patent, Improvement, and Technical
Information relating to human health applications of Technology.
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L. Net Income means the difference between Gross Sales Revenue and the sum
of Cost of Goods sold and Operating Expenses (Appendix IV), with SRI
royalties, local taxes, corporate income taxes and foreign taxes
treated as excluded costs.
M. Patent means the patents and/or patent applications, set forth in
Appendix 1, covering the Invention or Improvement as defined above,
patents to be issued pursuant thereto, and all divisionals,
continuations, continuations-in-part, reissues, substitutions, and
extensions thereof, and any patent issuing on a patent application
filed after the Effective Date of this Agreement which is included in
the grant of license hereunder and any foreign counterparts of the
foregoing.
N. Product means a product, service, test, or information which is sold or
provided for a fee and but for the license granted herein would
infringe one or more claims of a Patent, or was discovered, developed,
approved, manufactured or marketed using an Invention, Improvement or
Technical Information.
O. Technical Information means unencumbered published or unpublished
confidential and proprietary information in the nature of research and
development information, knowledge and technical data, together with
trade secrets relating to the Technology, including any inventions in
the possession of and belonging solely to SRI on or prior to the
Effective Date of this Agreement and which SRI has the obligation to
include in this Agreement, or which comes into the possession of
Eurobiotech during the term of this Agreement and which is generated as
a consequence of access to technical information provided by SRI. SRI
shall include herein only that Technical Information which is
reasonably necessary for Eurobiotech's practice of the Invention or
without which such practice would constitute an infringement of SRI's
rights. Technical Information includes only the above information which
is developed by or on behalf of SRI, or is generated pursuant to
research funded, in whole or in part, by Eurobiotech.
P. Territory means worldwide, with the exception of Japan and Southeast
Asia. Southeast Asia consists of Indonesia, Malaysia, Taiwan, Hong
Kong, Singapore, Vietnam, Cambodia, Thailand, Laos, Philippines and
South Korea.
2. LICENSE AND CO-DEVELOPMENT PROGRAM
A. The parties to this Agreement hereby agree to jointly co-develop the
Technology according to the terms of this Agreement which supersedes
the "Terms for ... Co-Development Agreement" set forth in Appendix II
and all other written or verbal agreements, express or implied, between
SRI and Eurobiotech relating to co-development of the Technology except
for the written understanding set forth in Appendix III.
B. SRI hereby grants to Eurobiotech, to the extent of the Field for the
Territory, an exclusive license to make, have made, use and sell
Product(s).
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C. The exclusive license set forth herein shall remain exclusive for so
long as Eurobiotech meets the payments and other obligations set forth
with regard to the development and commercialization of the Licensed
Technology or a Product. If such conditions are not met, SRI, in its
sole discretion, may elect to terminate the Co-Development Agreement or
take whatever actions it deems necessary.
D. SRI reserves for itself all rights to practice the Inventions, Patent,
Improvements and Technical Information except as exclusively licensed
herein.
3. TECHNICAL INFORMATION LICENSE
A. To the extent it is able to do so, SRI hereby grants to Eurobiotech, to
the extent of the Field for the Territory, an exclusive license to use
the Technical Information necessary to practice the Technology such
that Eurobiotech may make, have made, use and sell Product(s),
including disclosures of the Technical Information as needed to obtain
patent rights or authorization to sell or manufacture Products or
services in the Field within any political jurisdiction requiring such
disclosure.
B. The exclusive license set forth herein shall remain exclusive for so
long as Eurobiotech meets the payments and other obligations set forth
with regard to the development and commercialization of the Licensed
Technology or a Product. If such conditions are not met, SRI in its
sole discretion may elect to terminate the Co-Development Agreement or
take whatever action it deems necessary.
C. (1) SRI shall make efforts to make available to Eurobiotech Technical
Information in SRI's possession related to the Technology that SRI has
the obligation to disclose under this Agreement. Eurobiotech shall not
disclose to third parties any Technical Information furnished by SRI
during the term of this Agreement, or any time thereafter, provided,
however, that disclosure may be made of any such Technical Information
at any time: (i) with the prior written consent of SRI, or (ii) to the
extent necessary, to Eurobiotech's sublicensees and purchasers of
Eurobiotech's Product(s) or services, or (iii) after the same shall
have entered into the public domain through no fault of Eurobiotech or
Eurobiotech's subsidiaries. Disclosure of Technical Information is
permitted without a prior written consent of SRI to the extent required
by statute, rule or regulation of a governing body during the course of
Eurobiotech's normal business practices, or in the application or
prosecution of an application for patent rights, or in connection with
securing financing for the development or commercialization of the
Technology or a Product. Eurobiotech shall inform SRI of any such
disclosure and use its best efforts to protect its confidentiality
under such disclosure. Any combination of Technical Information shall
not be considered in the public domain merely because individual
elements thereof are in the public domain. To the extent that any such
Technical Information is disclosed to Eurobiotech's sublicensees and
purchasers of Eurobiotech's Product(s) or services, the agreements
contained in this Section shall be made
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Eurobiotech under a confidentiality agreement to apply to and be made
binding upon all such parties.
(2) The fact that some or all of the Technical Information becomes
public knowledge shall not affect the financial obligations for use of
the Technical Information licensed under this Agreement if such
Technical Information was used or usable in the discovery, development,
manufacture, or approval for sale of a Product within the Field.
4. LICENSE FEE AND RESEARCH AND DEVELOPMENT FUNDING
A. Eurobiotech shall pay the costs of any further pre-clinical development
work deemed necessary prior to commencing clinical trials, and this
shall include the development of the Product for other therapeutic
applications, the use of different formulations and preparations of the
Product and oral and parenteral preclinical toxicology. The costs of
pre-clinical development is anticipated not to exceed $1 million (one
million U.S. dollars). Subject to funding by Eurobiotech, SRI shall
perform the necessary pre-clinical studies whenever appropriate, unless
agreed by both parties that the work would be more advantageously
performed by a third party. Eurobiotech's retention of rights to
therapeutic areas outside of cancer is contingent upon Eurobiotech
providing funding support for development of such areas in accordance
with the commitments of the business development plan, as indicated in
Article 10, and as periodically reviewed and updated as agreed to by
the parties.
B. Eurobiotech shall pay the costs of a Phase I clinical trial of the
Product for hematologic malignancies, to be performed at the Leukemia
Unit at the M D ▇▇▇▇▇▇▇▇ Cancer Center in Houston, Texas. The costs of
such development will not exceed $1.25 million (one million, two
hundred and fifty thousand U.S. dollars). Both parenteral and oral
modes of administration will be studied if warranted by commercial
considerations and the preclinical toxicology work.
C. Upon successful completion of Phase I clinical trials Eurobiotech shall
pay the costs of a multi-center Phase II clinical trial of the Product
in hematologic malignancies.
D. Upon successful completion of Phase II clinical trials SRI and
Eurobiotech may jointly pay the costs of Phase III clinical trials and
further Product development. If SRI shall not jointly fund the cost of
such trials Eurobiotech may pay the costs in full after paying a non
refundable option fee of $750,000 within 60 days of completion and
evaluation of Phase II trials or 60 days from the commencement of Phase
III trials, whichever is the earlier. If the parties jointly develop
the Product in Phase III trials no option fee shall be payable by
Eurobiotech.
E. Eurobiotech shall issue to SRI 100,000 shares of common stock of
Eurobiotech Group, Inc. within 30 days of the Effective Date of this
Agreement.
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F. Eurobiotech shall pay to SRI the sum of $750,000 upon the earlier of
the completion of Phase III trials in Europe or the initiation of sales
of the Product in the USA.
G. Eurobiotech shall pay the cost of prosecuting, filing and maintaining
patents and defending revocation proceedings on patents and patent
applications, on the Product within the Territory.
H. Eurobiotech shall also pay the costs as in 4G, if any, for those
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Research ("SKI") patents which the
Product might infringe but for the separate Agreement between SKI and
SRI (Appendix V) which provides SRI and Eurobiotech the rights to such
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Research patents in the Field for
the Territory for the Product.
5. ACQUISITION
Acquisition of the Licensed Technology is meant in its broadest sense
including assignment, transfer, sublicense, merger, joint venture and
so on and so forth.
A. Prior to Phase III Clinical Trials
If all or part of the rights granted to Eurobiotech are acquired by a
third party at, or before completion of Phase II clinical trials or
prior to Phase III clinical trials, all current or future payments
derived by Eurobiotech from the transfer, whether in cash, shares,
property or any other form of payment, including but not limited to
up-front payments, milestone payments and royalties will be divided
equally between SRI and Eurobiotech.
B. During or After Phase III Clinical Trials
If Eurobiotech alone funds Phase III clinical trials, then if all or
part of the rights are acquired by a third party during or after
completion of Phase III trials, all current or future payments derived
by Eurobiotech from the transfer, whether in cash, shares, property or
any other form of payment, including but not limited to up-front
payments and milestone payments but excluding royalties will be shared
on the basis of 65% to Eurobiotech and 35% to SRI until 50% of the
monies expended by Eurobiotech in conducting the Phase III trials are
reimbursed. Thereafter, both parties shall receive 50% each of all
payments derived form the acquisition, exclusive of royalty payments.
Royalty payments related to the acquisition of rights by a third party
in order to market or further sublicense Product(s) shall be divided in
the ratio Eurobiotech 65; SRI 35.
If a third party funds the Phase III trials either in whole or in part
in return for rights, the parties to this Agreement shall divide all
payments including up-front payments, milestone payments and royalties
from that third party in equal amounts.
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If the parties to this Agreement share Phase III trial costs equally, then if
all or part of the rights are acquired by a third party during or after
completion of Phase III trials, all current or future payments derived from the
acquisition will be divided equally between SRI and Eurobiotech.
C. Manufacturing
Should Eurobiotech manufacture or have Product(s) manufactured for sale to any
unaffiliated third party acquirer such as a sublicensee or joint venture prior
to, during or after Phase III clinical trials, SRI shall receive 35% of Net
Income from such sale(s).
D. Approval
The foregoing scenarios (articles 5A and 5B) are subject to the approval of SRI
which shall not be unreasonably withheld.
6. COMMERCIALIZATION STAGE
A. Eurobiotech shall have exclusive rights to market the Product in the
Territory under the following terms: For the Patent and Technical
Information licenses granted herein, Eurobiotech shall pay to SRI a
royalty of 7% of the Gross Sales Revenue of all Product(s) sold to an
unaffiliated third party, likely to be a distributor or wholesaler, but
not limited to such, where Eurobiotech is responsible for the marketing of
the Product. In addition to the seven percent of Gross Sales Revenue, if
the Gross Profit Margin from operations in any geographical area equals or
exceeds 31% a further profit-sharing agreement will apply, according to
the following formula and further exemplified in Appendix IV:
Gross Profit Margin Payment as % of Net Income
------------------- --------------------------
greater than 70% 20%
50-70% 10%
31-49% 5%
B. If the Product incorporates inventions, patents, or technical
information that is necessary for the successful commercialization of
the Product and that is obtained from sources other than SRI, the
Parties agree to negotiate in good faith a new royalty rate to reflect
the contribution of such third party inventions, patents, or technical
information, but in no event shall the royalty rate be reduced by more
than 50%.
C. If this Agreement is for any reason terminated before all the earned
royalties herein provided for have been paid, Eurobiotech shall
immediately pay to SRI any remaining unpaid balance of earned royalties
even though the due date provided in Article 8 has not been reached.
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D. If Eurobiotech shall sell the rights to the Technology during the
Commercialization Stage, in combination with the sale, acquisition,
merger or disposition of Eurobiotech Group, Inc., Eurobiotech, SRI and
the third party(ies) shall negotiate in good faith the specific details
for such sale of rights, subject to the approval of SRI which shall not
be unreasonably withheld.
7. SUBLICENSING
A. Eurobiotech shall have the right to sublicense in the Field for the
Territory.
B. Eurobiotech will keep SRI routinely updated on progress of discussions
and negotiations with potential sublicensees. SRI shall have the right
to review the form of sublicenses to be granted hereunder prior to the
execution of the same by Eurobiotech. Eurobiotech agrees that
sublicense agreements shall conform in all material respects to the
terms and conditions of this Agreement. If SRI has not objected within
thirty (30) days of receiving the form of such agreement describing the
material terms, Eurobiotech may proceed to negotiate and grant
sublicenses without further review by SRI if the form of the sublicense
has not materially changed. Eurobiotech shall provide SRI with a copy
of each sublicense within thirty (30) days of execution, and shall not
grant to its sublicensees any SRI rights not conveyed by this
Agreement.
C. If this Agreement is terminated for any reason, except breach of
contract by SRI, any sublicense shall automatically transfer to SRI,
unless sublicensee is in breach or default of sublicense, and remain in
full force and effect so long as the sublicensees performs the
obligations of the sublicense, and Eurobiotech will execute such
documents as may be requested by SRI to attest to the transfer to SRI
of all sublicense rights, including the right to receive future
payments.
8. PAYMENTS AND REPORTS
A. Payments owed to SRI shall be payable within ten (10) days of receipt
by Eurobiotech except as stated otherwise elsewhere in this Agreement
and except for royalties and profit-sharing compensation as a result of
direct marketing of Product by Eurobiotech.
B. Royalties and profit-sharing compensation owed to SRI as a consequence
of direct marketing of Product by Eurobiotech shall be due for each
calendar quarter beginning with the first calendar quarter in which
sales occur and shall be payable to SRI within forty-five (45) days
following the last day of the applicable calendar quarter.
C. All payments from Eurobiotech to SRI shall be made in U.S. dollars by
corporate check to SRI at the address specified in Article 34 or an
address designated in writing by SRI from time-to-time.
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D. With respect to non-dollar denominated payments owed by Eurobiotech to
SRI, such payments shall be converted into U.S. Dollars at the
conversion rate(s) published in The Wall Street Journal (Eastern
Edition) as of the last business day of the calendar quarter included
in the report.
E. In the event that Eurobiotech is prevented from making any payment to
SRI under this Agreement by virtue of restrictions on currency
conversion or repatriation under the statutes, laws, codes or
governmental regulations of the country from which the payment is to be
made, then such payments may be paid by depositing them in the currency
in which accrued to SRI's account in a bank acceptable to SRI in the
country whose currency is involved. If the local currency cannot be
converted or remitted to SRI within twelve (12) months from the initial
deposit, Eurobiotech shall pay SRI the equivalent of such amount at the
initially computed conversion rate (including any interest earnings) in
United States dollars, and the local currency shall be transferred to
an account in a bank acceptable to Eurobiotech in this country.
F. Payments to SRI hereunder shall be deemed paid as of the day on which
they are received at the address designated pursuant to Article 34. Any
part of a payment which is not paid on or before the date when due
shall accrue interest thereon from such date until the date of its
payment in full at two (2) percentage points over the per annum
interest rate published as the "Prime Rate" in The Wall Street Journal
(Eastern Edition), but in no event shall such rate exceed the maximum
rate permitted by applicable law.
G. All foreign taxes, assessments and fees of any nature levied or
incurred on account of all payments accruing under this Agreement will
be assumed and paid by Eurobiotech and not deducted from payments owed
to SRI.
H. Eurobiotech shall deliver to SRI within forty-five (45) days after the
end of each calendar quarter a report, certified by the chief financial
officer (or equivalent) of Eurobiotech, setting forth in reasonable
detail the calculation of SRI payments made during the quarter and for
each calendar quarter, including gross sales, value added taxes, number
of units sold, unit price and the like on a country-by-country basis by
Eurobiotech, sublicensees, joint ventures and their affiliates.
I. The Eurobiotech report to SRI shall be supported by and based upon a
similar financial report or, if permitted, a copy from each sublicensee
and other commercialization entity(ies).
J. The parties will promptly share all information generated under the
Co-Development Program pursuant to the confidentiality provisions of
Article 21 and with particular respect to the pre-clinical studies and
clinical trials. Upon commercialization of the Product(s), Eurobiotech
shall provide SRI with quarterly updates (which may be oral unless
other requested by SRI) in reasonable detail, describing Eurobiotech's
plans, activities and accomplishments.
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9. RECORDS
Eurobiotech shall keep accurate records of all operations affecting payments
hereunder, and shall permit SRI or its duly authorized agent to inspect all such
records and to make copies of or extracts from such records during regular
business hours throughout the term of this Agreement and for a reasonable period
of not less than three (3) years thereafter. The fees charged for an SRI
authorized audit shall be paid by SRI; provided, however, that if an audit
discloses an underpayment by Eurobiotech of more than five percent (5%) for such
audited period, Eurobiotech shall pay the reasonable fees and expenses charged
by the firm conducting the audit.
10. DILIGENCE
A. In conjunction with the developmental actions and commercialization
activities of Eurobiotech referred to throughout this Agreement, the
parties shall prepare, within 90 days of the date of signing of this
Agreement, a business development plan outlining the strategy, timing
and implementation of steps to commercialize the technology.
B. Retention of rights by Eurobiotech is contingent upon submission of a
NDA to the FDA within four years of the effective date of this
Agreement.
11. OWNERSHIP OF THE TECHNOLOGY, TECHNICAL
INFORMATION AND IMPROVEMENTS
A. SRI and Eurobiotech shall each retain full ownership of their existing
intellectual property rights including rights in the process of being
protected and rights conceived but not yet reduced to practice as of
the effective date of this Agreement.
B. All Improvements by SRI developed under projects funded, in whole or in
part, by Eurobiotech shall be owned by SRI and shall be included in the
licenses granted in this Agreement. In the event that a conflicting
obligation prevents SRI from including such an Improvement, SRI shall
use reasonable efforts to assist Eurobiotech to obtain rights from the
appropriate third party or parties.
C. All Improvements by SRI made during the first three (3) years from the
effective date of the Agreement and not developed under projects
funded, in whole or in part, by Eurobiotech, shall be owned by SRI and
if deemed reasonably necessary for Eurobiotech practice of the
Technology, without which such practice would constitute an
infringement of SRI's rights, shall be included to the extent
necessary, as decided solely by SRI, in the licenses granted in this
Agreement, unless inclusion is not possible due to SRI's obligations to
a third party. In the event that a conflicting obligation prevents SRI
from including such an Improvement, SRI shall use reasonable efforts to
assist Eurobiotech to obtain rights from the appropriate third party or
parties.
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D. Eurobiotech shall have the first right of negotiation to a license or
other commercial arrangement to any SRI intellectual property developed
under projects funded, in whole or in part, by Eurobiotech, which does
not constitute an Improvement.
12. PATENT PROSECUTION
A. SRI shall file, prosecute and maintain all of the Patent that are the
property of SRI.
B. Eurobiotech shall bear all patenting expenses related to the filing,
prosecution or maintenance of all Patent and Improvement licensed
hereunder in whole or in part.
C. SRI shall furnish Eurobiotech with copies of all allowed claims when
such claims are allowed in the Field and in the Territory for all
Patent and Improvement licensed hereunder.
D. SRI shall provide Eurobiotech with draft copies of all correspondence
and filings and related prosecution documents on the Patent and
Improvement licensed hereunder and Eurobiotech shall promptly provide
comments, if any, to SRI. SRI shall confer with Eurobiotech, and make
reasonable efforts to adopt Eurobiotech's suggestions regarding
prosecution tactics and strategy. Notwithstanding the foregoing, SRI
shall have the right to take such actions as are reasonably necessary,
in its good faith judgement, to preserve all rights under the Patent
and Improvement throughout the Territory. As soon as practical,
subsequent to the filing of any prosecution document, SRI shall provide
Eurobiotech with a copy of such document. In addition, SRI shall copy
Eurobiotech with any official office action and SRI responses and
submissions. Eurobiotech shall bear the expenses of the activities
noted in this Article 14.E.
E. SRI will inform Eurobiotech at least sixty (60) days prior to any
decision having as a result the failure to file, or the abandonment of
Patent applications or failure to maintain a Patent, Patents and
Improvements licensed hereunder so that Eurobiotech may take over and
maintain such Patent and Improvements in force.
F. Provided that SRI has been informed by Eurobiotech at least sixty (60)
days in advance, in the event that Eurobiotech decides not to pay
patenting expenses in any jurisdiction, SRI may elect to maintain such
Patent and Improvements in force and terminate Eurobiotech's licenses
granted as for the jurisdiction in which Eurobiotech abandoned or
failed to file or maintain such Patent rights. Notwithstanding the
foregoing, Eurobiotech shall be obligated to pay patenting expenses
within the European Community.
13. INFRINGEMENT BY THIRD PARTY
A. Either party shall notify the other party of any suspected infringement
by a third party of the Patent in the Field and the Territory, and each
party shall inform the other of any evidence of such infringement(s).
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B. Eurobiotech shall have the first right to institute suit for
infringement(s) in the Field and Territory so long as this Agreement
remains exclusive. At Eurobiotech's expense, SRI will reasonably assist
Eurobiotech in such prosecutions if so requested by Eurobiotech, and
will lend its name to such actions if requested by Eurobiotech or
required by law. Notwithstanding the foregoing SRI shall have the right
to participate and be represented in any such prosecutions by its own
counsel at its own expense.
C. If SRI notifies Eurobiotech of its desire to institute suit for
infringement(s) and Eurobiotech fails to exercise its first right to do
so within ninety (90) days of such notice, then SRI may, at its own
expense, bring suit or take any other appropriate action. At SRI's
expense, Eurobiotech will reasonably assist SRI in such prosecutions if
so requested by SRI, and will lend its name to such actions if
requested by SRI or required by law. Notwithstanding the foregoing
Eurobiotech shall have the right to participate and be represented in
any such prosecutions by its own counsel at its own expense.
D. No settlement of any suspected infringement(s), whether or not a suit
has been instituted, may be entered into without the express written
consent of Eurobiotech and SRI.
E. Any amounts recovered pursuant to an infringement suit, settlement or
otherwise shall be retained by and be the property of the party
bringing the action. In the event Eurobiotech receives any monies or
other consideration from a third party as a result of Eurobiotech's
exercise of its rights under Article 13 of this Agreement, Eurobiotech
shall first be reimbursed for expenses incurred and paid for, SRI shall
then receive a portion of the remainder in accordance with the
applicable provision(s) of Article 6 as applied to all such monies or
other considerations whether such monies or other considerations are
denoted as "royalties," "damages," "releases" from prior acts, or any
other designation.
F. If Eurobiotech fails to exercise its first right to institute suit for
infringement(s) and SRI elects not to institute suit, then SRI shall
provide Eurobiotech with at least sixty (60) days notice of its
intention to terminate Eurobiotech's licenses granted in those
jurisdictions affected by the infringement or to take any other action
it sees fit in its best judgement.
14. REVOCATION PROCEEDINGS
A. In the event either party becomes aware of the institution by a third
party of any proceedings for the revocation of any Patent, patents or
Improvements in any country in the Territory licensed hereunder to
Eurobiotech, such party shall notify the other party promptly.
Eurobiotech shall defend any such proceedings at its own expense, in
its own name.
B. SRI shall have the right to participate in such revocation proceedings
at Eurobiotech's expense, and will lend its name to such proceedings if
requested by Eurobiotech or required by law. Sublicensees of
Eurobiotech shall also have the right to participate in such revocation
proceedings.
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C. Settlement of any revocation proceedings shall be subject to the
approval of SRI; such approval shall not be unreasonably withheld.
15. INFRINGEMENT OF THIRD PARTY RIGHTS
A. SRI "does not warrant" as stated in Article 17. Disclaimer, "that the
patents will be free from claims of infringement by third parties or
any other rights of third parties."
B. Eurobiotech as stipulated in Article 18. Indemnification, "agrees to
indemnify, hold harmless and defend SRI... from and against any and
all demands, claims, suits, and actions ..." which includes
infringement of third party rights.
C. SRI will reasonably assist Eurobiotech to defend or settle such third
party claim if so requested and at the expense of Eurobiotech.
D. SRI shall have the right to participate and be represented in any such
claim by a third party by its own counsel.
E. No settlement of any third party claim may be entered into without the
express written consent of SRI.
F. In the event, by way of counterclaim or otherwise, either party or both
parties recover any damages or other sums in any action, suit, or
proceeding involving a claim by a third party, or in settlement
thereof, such recovery shall be applied and shared as mutually agreed.
16. REPRESENTATIONS
A. This Agreement is entered into by SRI in its corporate capacity. It is
understood and agreed that the U.S. Government is not a party to this
Agreement and in no manner whatsoever shall be liable for or assume any
responsibility or obligation for any claim, cost, or damages arising
out of or resulting from this Agreement or the subject matter licensed.
B. Nothing in this Agreement shall be deemed to be a representation or
warranty by SRI, or the U.S. Government, of the safety, merchantability
or usefulness for any purpose, of any technical information, techniques
or practices at any time made available by SRI to Eurobiotech
hereunder.
C. SRI represents that it has the right to grant all of the rights herein,
except for a non-exclusive, non-royalty bearing, non-commercial license
to the Government of The United States of America.
13
D. SRI is unaware of any claims asserted against SRI by any third parties
with respect to Patent infringement or any other type of liability
relevant to licensing of the Inventions, which have not been disclosed
to Eurobiotech as of the Effective Date of this Agreement.
E. SRI represents that it has full power, authority and legal right to
enter into this contemplated Agreement and to consummate the
transactions contemplated therein.
F. Eurobiotech represents that it has full power, authority and legal
right to enter into this contemplated Agreement and to consummate the
transactions contemplated therein.
G. Eurobiotech shall accept liability for or on account of any injury,
loss or damage, of any kind or nature sustained by, or any damage
assessed or asserted against, or any other liability incurred by or
imposed upon either party arising out of or in connection with or
resulting from (i) the production, use or sale of any Product or (ii)
the use of any technical information, techniques, or practices
disclosed by either party, or (iii) any advertising or other
promotional activities with respect to any of the foregoing. If a
sublicense is granted by Eurobiotech to a third party that third party
shall accept all liability for any injury, loss or damage as defined
above.
17. DISCLAIMER
EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 16, SRI DOES NOT MAKE ANY EXPRESS OR
IMPLIED WARRANTIES, STATUTORY OR OTHERWISE, CONCERNING THE TECHNOLOGY OR ANY
TECHNICAL INFORMATION COMMUNICATED TO EUROBIOTECH BY SRI. SPECIFICALLY, BUT
WITHOUT LIMITING THE FOREGOING, SRI MAKES NO EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS (FOR A PARTICULAR PURPOSE OR OTHERWISE), QUALITY OR
USEFULNESS OF THE TECHNOLOGY. ALL PHYSICAL EMBODIMENTS OF THE TECHNOLOGY
PROVIDED BY SRI HEREUNDER ARE PROVIDED ON AN "AS IS" BASIS. SRI DOES NOT WARRANT
THE ACCURACY OF ANY INFORMATION INCLUDED WITHIN THE TECHNICAL INFORMATION NOR
DOES SRI WARRANT THAT ANY SUCH INFORMATION CONSTITUTES TRADE SECRETS OR
CONFIDENTIAL INFORMATION OR THAT THE PATENTS WILL BE FREE FROM CLAIMS OF
INFRINGEMENT BY THIRD PARTIES OR ANY OTHER RIGHTS OF THIRD PARTIES.
UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY
THIRD PARTY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES IN TORT, CONTRACT,
STRICT LIABILITY OR OTHERWISE INCURRED BY OTHER PARTY OR ANY THIRD PARTY.
18. INDEMNIFICATION
Eurobiotech hereby agrees to indemnify, hold harmless and defend SRI and
SKI and its officers, directors, representatives, agents and employees from and
against any and all demands, claims, suits or actions of any character presented
or brought on account of any injuries, losses or damages sustained by any person
or property in consequence of (i) any act or omission of Eurobiotech or its
agents, employees or subcontractors, or (ii) any liability under Article 16G,
except for any injuries, losses or damages that specifically result from the
negligence or willful misconduct of SRI or SKI. The foregoing indemnity shall
include but not be limited to court costs, attorneys' fees, costs of
investigation and costs of defense associated with such demands, claims, suits
or actions.
14
19. INSURANCE
Eurobiotech shall maintain, during the term of this Agreement, reasonable
amounts of comprehensive general liability insurance, including products
liability insurance, with reputable and financially secure insurance carriers to
cover the activities of Eurobiotech, its affiliates and sublicensees hereunder.
Such insurance shall be written to cover claims incurred, discovered,
manifested, or made during or beyond the expiration or termination of this
Agreement during the period that any product, process, or service, relating to,
or developed pursuant to, this Agreement is being, commercially distributed or
sold by Eurobiotech or by a sublicensee, affiliate or agent of Eurobiotech.
Such insurance shall include SRI as an additional insured. Eurobiotech shall
furnish to SRI a certificate of insurance evidencing such coverage and
periodically, upon request, provide evidence that the coverage is still in
effect.
20. TERM AND TERMINATION
A. This Agreement shall commence on the Effective Date and, unless sooner
terminated under this Article 20, shall expire upon the later of: (i)
expiration of the last to expire of all Patent(s), Improvement(s), and
Patent(s) licensed under this Agreement [hereafter "Licensed Patents"
only for Article 20], including any extensions thereof and any periods
of exclusivity granted by regulatory agencies or other governmental
bodies; (ii) Eurobiotech is no longer due any payments from
Sublicensee(s); or (iii) Eurobiotech is no longer directly marketing a
Product.
B. The payment obligations under the licenses granted to Eurobiotech for
Licensed Patents and Technical Information shall continue throughout
the term as defined in Article 20.A but would be subject to good faith
renegotiations upon the expiration of the last to expire of the
Licensed Patents, or upon the abandonment of the last to be abandoned
of any patent applications if no patents have been issued, whichever is
the later, unless this Agreement is sooner terminated. Such good faith
renegotiations shall take into account on a country-by-country or
regional basis but not be limited to: (i) Product competition; (ii)
utilization, incorporation and value of Technical Information; (iii)
value of Technical Information if no longer confidential or proprietary
through no fault of Eurobiotech, its Sublicensee(s), contractors,
financiers or any other Eurobiotech agent(s) or purchasers of Product
or services having access to Technical Information; (iv) the applicable
contract or patent law or (v) prior payment commitments such as in
Article 3.C(2).
15
C. Eurobiotech may terminate this Agreement at any time upon ninety (90)
days written notice to SRI and upon payment of all amounts due SRI
through the effective date of the termination.
D. Upon termination of this Agreement, neither party shall be released
from any obligation that matured prior to the effective date of such
termination. Eurobiotech and any sublicensee may, however, after the
effective date of such termination, sell all Products in inventory
provided that Eurobiotech shall pay to SRI the royalties and
profit-sharing thereon as required by Article 6 hereof and submit the
reports required by Article 8 hereof.
E. Except as provided in Article 13F above, if either party shall be in
default of any obligation hereunder, the other party may terminate this
Agreement by giving Notice of Termination by Certified or Registered
Mail to the party at fault, specifying the basis for termination. If
within sixty (60) days after the receipt of such Notice of Termination,
the party in default shall remedy the condition forming the basis for
termination such Notice of Termination shall cease to be operative, and
this Agreement shall continue in full force.
F. SRI shall have the right to terminate this Agreement if Eurobiotech
shall cease to carry out its business, become bankrupt or insolvent,
apply for or consent to the appointment of a trustee, receiver or
liquidator of its assets or seek relief under any law for the aid of
debtors, or if Eurobiotech fails to submit an NDA as provided in
Article 10B.
G. Eurobiotech shall inform SRI of its intention to file a voluntary
petition in bankruptcy or of another's intention to file an involuntary
petition in bankruptcy to be received at least thirty (30) days prior
to filing such a petition. Eurobiotech's filing without conforming to
this requirement shall be deemed a material, pro-petition incurable
breach not subject to the Notice requirement of Paragraph 20.
H. Notwithstanding anything else in this Agreement to the contrary, the
parties agree that Eurobiotech's obligation to pay SRI any payments or
other consideration accrued but unpaid prior to termination shall
survive the termination of this Agreement. In addition, Articles 5, 6,
8, 9, 17, 18, 19, 21, 22, 28 and 34 as well as any other provisions to
the extent required for the full observation and performance of the
foregoing Articles or which by their nature are intended to survive
such termination, shall survive the termination of this Agreement and
continue to be enforceable.
21. CONFIDENTIALITY; PUBLICATION; PUBLICITY
A. In fulfilling their obligations under this Agreement, it may be
desirable or necessary for the parties to disclose to one another
certain of their Confidential Information. In the event of receipt of
such Confidential Information, the receiving party agrees to preserve
such information as confidential and not to disclose it to third
parties or to use it except in connection with this Agreement during
the term of this Agreement and for a period of five (5) years following
its termination. The foregoing obligations shall not apply to any
information that:
16
1. is now in the public domain or becomes generally available to
the public through no fault of the receiving party;
2. is already known to, or in the possession of, the receiving
party as can be demonstrated by documentary evidence;
3. is disclosed to the receiving party on a nonconfidential basis
by a third party having the right to make such disclosure; or
4. is independently developed by the receiving party as can be
demonstrated by documentary evidence.
For the purposes of the preceding portion of this Section A, Article 21
only. "parties" or "party" but not "third parties" or "third party" may
also include SKI.
In addition, to the extent reasonably necessary to fulfill its
obligations or exercise its rights under this Agreement (i) a party may
disclose Confidential Information to its Affiliates, Sublicensees,
consultants, outside contractors and clinical investigators, on a
need-to-know basis on condition that such persons or entities agree to
be bound by the provisions of this Article 20, (ii) a party or its
Affiliates or Sublicensees may disclose Confidential Information to
governmental or other regulatory authorities to the extent that such
disclosure is reasonably necessary to obtain patents or regulatory
authorizations, provided the disclosing party shall request
confidential treatment thereof, and (iii) a party may disclose
Confidential Information as required by applicable law, regulation or
judicial process, provided that such party shall give the other party
(x) prior written notice thereof, (y) adequate opportunity to object to
any such disclosure or to request confidential treatment thereof, and
(z) shall take all steps reasonably possible to minimize the disclosure
to that level mandated by law.
B. (i) If either party desires to publish or present the results of
the Co-Development Program, the publishing/presenting party
shall provide the non-publishing/non-presenting party a copy
of the manuscript of any proposed publication or presentation.
The non-publishing/non-presenting party shall then have thirty
(30) days to review and comment on the manuscript or
presentation, and the publishing/presenting party agrees to
delete any information identified by the
non-publishing/non-presenting party as its Trade Secrets or
Confidential Information.
(ii) In the event the non-publishing/non-presenting party
determines that a Patent application covering information
contained in the proposed publication or presentation should
be filed, the party proposing the publication or presentation
shall delay such publication or presentation for up to sixty
(60) days to allow such filing to be made.
17
C. Each party shall provide the other party with the prior opportunity to
review and approve any press releases or similar public announcements
concerning this Agreement or clinical, regulatory and commercial
developments related to Products as soon as practicable, but in no
event later than 24 hours before an announcement is made. Eurobiotech
shall not use the name of SRI or otherwise refer to any organization
related to SRI, except with the written approval of SRI, such approval
not to be unreasonably withheld.
22. DISPUTE RESOLUTION
A. The parties shall attempt to resolve through good faith discussions any
dispute which arises under this Agreement. Any dispute may, at the
election of either party, be referred to the chief executive officers,
or the equivalent, of each party. If they are unable to resolve the
dispute, within thirty (30) days after delivery of written notice of
the dispute from one party to the other, either party may seek to
resolve it by initiating Alternative Dispute Resolution ("ADR") at the
geographical location of the noninitiating party in which the Judicial
Arbitration and Mediation Services ("JAMS") of such location, through
a panel of three (3) arbitrators (the "Arbitrators"), shall control the
proceedings as provided herein. If JAMS is not in existence at the time
of such dispute, the American Arbitration Association, of such location
shall be substituted.
B. An ADR shall be initiated by a party by sending written notice thereof
to the other party and JAMS, which notice shall state the issues to be
resolved. Within ten (10) business days after receipt of such notice,
the other party may, by sending written notice to the initiating party
and JAMS, add issues to be resolved. Within twenty (20) business days
after the date of the original ADR notice, JAMS shall nominate to the
parties at least ten (10) qualified nominees from JAMS' panel. Each
party shall have five (5) business days after the receipt of such
nominations to select one Arbitrator. The two (2) Arbitrators so
selected shall mutually agree on a third arbitrator to complete the
panel.
C. Each Arbitrator shall have experience in the Field relevant to the
dispute and in intellectual property law matters. In the event of a
dispute between the parties relating to the calculation of any
royalties or the amount of other consideration payable under this
Agreement (including without limitation, the results of any audit
conducted on behalf of a party pursuant to Article 9), then, in
addition to the procedure set forth above and in Article 22B, the
Arbitrators shall be partners or full members of an internationally
recognized certified public accounting firm which is not an auditing
firm for either party and has not provided material services to either
party during the last two (2) year period prior to the date of ADR
initiation.
D. Except as otherwise provided in this Article 22, such hearing shall be
conducted pursuant to the JAMS Rules or the Commercial Arbitration
Rules of the American Arbitration Association (AAA) as applicable.
18
E. The Arbitrators shall render a disposition on the proposed rulings as
expeditiously as possible after the hearing, but not later than fifteen
(15) business days after the conclusion of the hearing. In the
circumstances where the Arbitrators rule for a party on a claim in the
form of a claim for monetary damages, the parties will then submit a
proposed remedy within ten (10) days of notice of the ruling. The
proposed remedy may be accompanied by a brief in support of the remedy
not to exceed five (5) pages. The Arbitrators will rule on the proposed
remedies within ten (10) days of their submission. The Arbitrators'
disposition shall be final and not appealable, except that either party
shall have the right to appeal such disposition on the basis it was
affected by fraud or bad faith in connection with the ADR proceedings.
A judgment on the Arbitrators' disposition may be entered in any court
having jurisdiction over the parties. The reasonable fees and expenses
of the Arbitrators, as well as the standard charges of JAMS for its
assistance, shall be borne equally by the parties or as they may
otherwise agree.
F. A party shall not be prohibited from bringing a claim for resolution
under this Article 22 on the ground that the claim could have been
brought during an earlier proceeding under this same Article.
G. The following disputes, causes of action or claims shall not be subject
to the dispute resolution process set forth in this Article 22:
(i) a claim arising from a suit, action, or proceeding brought by
a third party or Sublicensee not subject to ADR;
(ii) a claim relating to undisputed amounts owed by either party to
the other under this Agreement;
(iii) a suit, action, or proceeding to compel either party to comply
with the dispute resolution procedures set forth in this
Article 22;
(iv) a dispute, controversy, or claim relating to the scope,
enforceability, infringement or validity of a patent or
trademark of either party; and
(v) a cause of action seeking temporary or preliminary injunction
relief.
23. ASSIGNABILITY
A. Eurobiotech shall not assign any rights under this Agreement not
specifically transferable by its terms without prior written consent of
SRI. SRI may not assign its rights hereunder without the prior written
consent of Eurobiotech.
B. In the event of a Change of Control (as defined below) of Eurobiotech,
SRI may elect, upon not less than sixty (60) days written notice
following the Change of Control or receipt of notice provided pursuant
to Article 23.C, to terminate this Agreement if such Change of Control
is not, in the good faith judgement of SRI, in the developmental and/or
commercial interest of the Licensed Technology or significantly limits
its applicability or scope.
19
C. For purposes of this Article 23C, "Change of Control" shall be deemed
to have taken place if (a) a third party, including a "group" as
defined in section 13(d)(3) of the Securities Exchange Act of 1934 but
excluding the current directors of Eurobiotech, becomes the beneficial
owner of shares having fifty percent (50%) or more of the total number
of votes that may be cast for the election of directors of Eurobiotech;
or (b) as the result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), (X) the persons who were directors of Eurobiotech
before the Transaction shall cease to constitute a majority of the
Board of Directors of Eurobiotech or any successor to Eurobiotech, or
(Y) there is the sale, exchange of other disposition of all or
substantially all of Eurobiotech's assets to a third party. Within
thirty (30) days following a Change of Control of Eurobiotech,
Eurobiotech shall provide notice thereof to SRI.
24. REFORM
A. The parties agree that if any part, form, or provision of this
Agreement shall be found illegal or in conflict with any valid
controlling law, the validity of the remaining provisions shall not be
affected thereby.
B. In the event the legality of any provision of this Agreement is brought
into question because of a decision by a court of competent
jurisdiction of any country in which this Agreement applies, SRI, by
written notice to Eurobiotech, may revise the provision in question or
may delete it entirely so as to comply with the decision of the said
court.
25. WAIVER AND ALTERATION
A. The failure of either party to insist, in any one or more instances,
upon the performance of any of the terms, covenants or conditions of
this Agreement and to exercise any right hereunder, shall not be
construed as a waiver or relinquishment of the future performance of
any such term, covenant or condition or the future exercise of such
right, but the obligations of the other party with respect to such
future performance shall continue in full force and effect.
B. A provision of this Agreement may be altered only by a writing signed
by both parties, except as provided by Article 24, above.
26. MARKING
A. Eurobiotech shall place in a conspicuous location on any product or its
packaging, which is made or sold under any Patent coming within this
Agreement, a patent notice in accordance with the laws concerning the
marking of patented articles.
20
B. Eurobiotech shall include a marking provision similar to Paragraph A
above in every sublicense granted pursuant to Article 7 above.
27. IMPLEMENTATION
Each party shall execute any instruments reasonably believed by the other party
to be necessary to implement the provisions of this Agreement.
28. GOVERNING LAW
This Agreement shall be deemed to have been entered into and shall be governed
by, construed and enforced in accordance with laws of the State of Alabama of
the United States of America and in the English language, and any action brought
to enforce any provision or obligation hereunder shall be brought in a court of
competent jurisdiction in the State of Alabama.
29. EXPORTATION OF TECHNICAL INFORMATION
Eurobiotech agrees not to export from The United States of America, directly or
indirectly, any Technical Information furnished to Eurobiotech either directly
or indirectly by SRI, except to the extent and to the countries permitted by the
laws of The United States of America. Eurobiotech agrees to indemnify, defend
and hold harmless SRI, its officers, agents and employees from all liability
involving the violation of such export regulations, either directly or
indirectly by Eurobiotech.
30. HEADINGS
The headings of the articles, sections and paragraphs used in this Agreement are
included for convenience only and are not to be used in construing or
interpreting this Agreement.
31. PARTIES INDEPENDENT
In making and performing this Agreement, the parties act and shall act at all
times as independent entities and nothing contained in this Agreement shall be
construed or implied to create an agency, partnership or employer and employee
relationship between Eurobiotech and SRI. Except as specifically provided
herein, at no time shall either party make commitments or incur any charges or
expenses for or in the name of the other party.
32. COUNTERPARTS
This Agreement shall become binding when any one or more counterparts hereof,
individually or taken together, shall bear the signatures of each of the parties
hereto. This Agreement may be executed in any number of counterparts, each of
which shall be an original as against either party whose signature appears
thereon, but all of which together shall constitute but one and the same
instrument.
21
33. FORCE MATEURE
The parties shall not be responsible for failure to perform any of the
obligations imposed by this Agreement (except an obligation to pay money),
provided such failure is caused by fire, storms, floods, strikes, lockouts,
accidents, war, riots or civil commotions, inability to obtain railroad cars or
raw materials, embargoes, any State or Federal regulation, law, or restriction,
seizure or acquisition of the Technology or the Product(s) by the Government of
the United States or of any state, or of any agency thereof or by reason of any
compliance with a demand or request for such Product for any purpose for
national defense, or any other cause or contingency beyond the reasonable
control of said party (whether or not of the same kind or nature as the causes
or contingencies above enumerated) shall not subject the party so failing to any
liability to the other.
34. NOTICE
For the purpose of all written communications between the parties, their
addresses shall be:
If to EUROBIOTECH: If to SRI:
Address: Address:
----------------------------- -------------------------
----------------------------- -------------------------
----------------------------- -------------------------
Attention: Attention:
----------------------------- -------------------------
Telephone: Telephone:
----------------------------- -------------------------
FAX: FAX:
----------------------------- -------------------------
or any other addresses of which either party shall notify the other party in
writing.
22
35. EXECUTION
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed by their duly authorized officers on the respective dates and at the
respective places hereinafter set forth.
EUROBIOTECH: SRI:
By: /s/ ▇▇ ▇▇▇▇ By: /s/ ▇.▇. ▇▇▇▇▇
---------------------- ---------------------------
Print Name: ▇▇ ▇▇▇▇ Print Name: ▇.▇. ▇▇▇▇▇
---------------------- ---------------------------
Its: CEO Its: President and CEO
---------------------- ---------------------------
Date: 19th Aug 98 Date: 9/1/98
---------------------- ---------------------------
23
APPENDIX I
Filing Expiration
Country Serial No. Date Priority Patent No. Issued Date
United States 07/355,358 5/23/89 5/23/89 5,034,518 7/23/91 7/23/2008
United States 07/693,646 5/10/91 5/23/89 5,384,310 1/24/95 7/23/2008
& 5/10/91
United States 08/320,879 9/21/94 5/10/91 5,661,136 8/26/97 8/26/2014
European 90909080.5 5/23/90 5/23/89 U.S. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ 0473708 1/15/97 5/23/2010
Germany 0473708 1/25/97 5/23/2010
Great Britain 0473708 1/15/97 5/23/2010
Italy 0473708 1/25/97 5/23/2010
Netherlands 0473708 1/25/97 5/23/2010
Spain 0473708 1/25/97 5/23/2010
Sweden 90909080.5 1/15/97 5/23/2010
Switzerland 0473708 1/25/97 5/23/2010
European 92912163.0 5/7/92 5/23/89 U.S. (Substantive (first) examination
Austria & 5/10/91 U.S. report received; Claims equivalent
Belgium to U.S. 07/693,646
Germany
Greece
France
Italy
Luxembourg
Monaco
Netherlands
Spain
Sweden
Switzerland
United Kingdom
Japan 2-508789 5/23/90 5/23/89 U.S. (Request for examination filed 5/23/97;
case expected to be taken up for
examination about 5/99; Claims
equivalent to U.S. 07/355,358)
Japan 500121/1993 5/7/92 5/23/89 U.S. (Request for examination must be filed
& 5/10/91 U.S. prior to 5/7/99; Claims equivalent to
U.S. 07/693,646)
Canada 2,102,782 5/7/92 5/7/90 (Request for examination must be filed
prior to 5/7/99; Claims equivalent to
U.S. 07/693,646)
APPENDIX II
Terms for Eurobiotech Group, Inc. ("Eurobiotech")
and Southern Research Institute ("Southern")
Co-Development Agreement
Scope
Co-develop Product(s) based on Southern's patented and patent-pending
2'-fluoro-2-halo substituted purine nucleoside technology.
Product(s)
Drugs effective against hematologic malignancies and solid tumors as
well as other therapeutic indications, such as (but not exclusively) skin
disorders and transplantation immunity. All modes of administration,
particularly oral and iv., are included in these terms as are specialized
formulations such as those imparting controlled-release characteristics.
Agreement
The parties hereby agree to enter into good faith discussions, based on
the terms agreed to in this document, for the exclusive co-development,
exclusive world-wide commercial rights except for Japan and Southeast Asia, to
the Product(s) and all therapeutic indications and all modes of administration
of the 2'-fluoro-2-halo substituted purine nucleoside technology.
Preclinical Development
Funding provided by Eurobiotech not to exceed US$1 million for
parenteral and oral preclinical toxicology, oral formulation, and other
preclinical work needed prior to commencing clinical trials including
development funds to explore other therapeutic indications.
Drug Synthesis for Preclinical and Phase I
Discussions for the definitive Agreement will include the possible role
of Southern in the supply of material and production of GMP and non-GMP
Product(s).
Preclinical Toxicology
To be performed by Southern whenever appropriate at a price to be
negotiated. This agreement takes full account of the initial preparations for
preclinical toxicology studies conducted and planned by the MD ▇▇▇▇▇▇▇▇ group.
1
Phase I
Funding provided by Eurobiotech not to exceed US$1.25 million for Phase
I clinical trials to be performed at the M. D. ▇▇▇▇▇▇▇▇ Cancer Center in
Houston, Texas, for hematologic malignancies. Eurobiotech to further fund the
preclinical and, if indicated, the clinical development for other therapeutic
indications including, but not limited to, solid tumors, skin disorders and
transplantation immunity.
Phase II
Eurobiotech to fund the multi-center Phase II clinical trials of the
2'-fluoro-2-halo substituted purine nucleoside in hematologic malignancies. A
decision to proceed or not will be made prior to or at the time when USS1.25
million has been expended. Eurobiotech's rights to hematologic malignancies will
revert to Southern if the decision is not to proceed. Retention of rights to
other therapeutic indications is contingent upon adequate levels of funding to
be provided by Eurobiotech for fast-track preclinical and clinical development.
NDA After Phase II
An NDA or equivalent document may be submitted to the FDA and/or
foreign regulatory agencies if the results after completion of Phase II trials
are encouraging and the agencies appear receptive.
Phase III
If Eurobiotech decides not to proceed after completion of Phase II
trials, the rights to the technology will revert to Southern. If Southern
decides not to proceed with the codevelopment program (i.e., equal sharing of
phase III costs) after completion of Phase II trials, Eurobiotech shall have the
right to conduct the Phase III trials after paying a nonrefundable option fee of
$750,000 within 60 days of completion and evaluation of Phase II trials or 60
days from the commencement of Phase III trials, whichever is the earlier. If
Southern decides to proceed with the co-development program, if Phase II trials
are successful, and the parties decide to proceed with Phase III clinical
trials, the costs incurred will be shared equally between Southern and
Eurobiotech. In that case, there will be no option fee for commencing Phase III
trials.
2
Intellectual Property Ownership
Southern and Eurobiotech shall each retain full ownership of their
existing intellectual property rights.
Additional Intellectual Property
Ownership shall be linked directly to inventorship. Eurobiotech shall
have the first right of negotiation to any additional intellectual property
developed as a result of this codevelopment program.
Additional Compensation to Southern
100,000 Shares of common stock of Eurobiotech; $750,000 milestone
payment on completion of Phase III trials in Europe or the first sales of
Product(s) in the USA, whichever is the earlier; payment of patent costs from
the effective date of the definitive co-development Agreement for Southern and
Sloan Kettering Institute.
Acquisition of Rights by Third Party (Non-Marketing by Eurobiotech)
If all or part of the rights granted to Eurobiotech are acquired by a
third party at, or before completion of Phase II clinical trials or prior to
Phase III clinical trials, all current or future payments derived by Eurobiotech
from the transfer, whether in cash, shares, property or the like, including but
not limited to up-front payments, milestone payments and royalties will be
divided equally between Southern and Eurobiotech.
If Eurobiotech alone funds Phase III clinical trials, then if all or
part of the rights are acquired by a third party during or after completion of
Phase III trials, all current or future payments derived by Eurobiotech from the
transfer, whether in cash, shares, property or the like, including but not
limited to up-front payments and milestone payments but excluding royalties will
be shared on the basis of 65% to Eurobiotech and 35% to Southern until 50% of
the monies expended by Eurobiotech in conducting the Phase III trials are
reimbursed. Thereafter, both parties shall receive 50% each of all payments
derived from the transfer, exclusive of royalty payments. Royalty payments
related to the transfer or sublicense of the rights to market or further
sublicense Product(s) shall be divided in the ratio Eurobiotech 65; Southern 35.
If a third party funds the Phase III trials either in whole or in part
in return for rights, the parties to this Agreement shall divide all payments
including up-front payments, milestone payments and royalties from that third
party in equal amounts.
If the parties to this Agreement share Phase III trial costs equally,
then if all or part of the rights are acquired by a third party at, or before,
or after completion of Phase III trials, all payments derived from the
acquisition will be divided equally between Southern and Eurobiotech.
3
All of the foregoing scenarios are subject to the approval of Southern
which shall not be unreasonably withheld.
As part of the co-development program, should Eurobiotech directly
manufacture Product(s) for sale to a third party, Southern and Eurobiotech shall
agree that net income from such sales shall be divided in the ratio Eurobiotech
65:Southern 35.
Marketing by Eurobiotech
If products based on the 2'-fluoro-2-halo substituted purine
nucleosides are brought to market for the treatment of hematologic malignancies
and/or other therapeutic indications, Eurobiotech agrees to use all reasonable
measures to market the products and to provide a sales force sufficient to
properly support sales of the Product(s) in designated markets.
A. Phase III Funded by Eurobiotech
Eurobiotech will pay Southern a 7% royalty payment on gross sales
revenue on products related to the 2'-fluoro-2-halo substituted purine
nucleoside technology, applicable in all geographic areas where Eurobiotech is
responsible for the marketing of the Product(s).
If the gross profit margin from opertions in any geographical area
exceeds 30% a further profit-sharing agreement will apply, in addition to the
above royalty payment, according to the following formula:
Gross Profit Margin Payment as % of net income*
------------------- ---------------------------
> 70% 20%
50-70% 10%
31-49% 5%
*net income to include total revenues but not include local sales tax and
corporate income taxes.
If a sublicense is granted to third parties to sell Product(s) in
specified geographical regions, Southern shall receive 35% of all current and
future payments obtained by Eurobiotech from the third parties including 35% of
all royalty payments made by the third parties.
4
B. Regulatory License Granted After Phase II Clinical Trials
If regulatory approval is obtained after completion of Phase II trials,
Eurobiotech shall pay Southern according to the terms of section A above.
C. Phase III Trial Cost Reimbursed
If a third party reimburses the costs of a Phase III clinical trial in
exchange for a transfer or sublicense of rights, Eurobiotech shall pay Southern
for its marketing of Product(s) based on the terms of section A above, but all
payments from such a sublicensee, including up-front, milestone and royalty
payments shall be divided equally between the parties to this Agreement.
Disposition of Eurobiotech Rights
Sale or acquisition of Eurobiotech's rights to this technology in whole
or in part and whether or not in combination with the sale, acquisition, merger
or disposition of Eurobiotech shall be on the general basis of Eurobiotech 65:
Southern 35 except as otherwise specified in the Agreement with the specific
details to be negotiated in good faith and subject to the approval of Southern
which shall not be unreasonably withheld.
Payment Duration
Southern payments continue as long as Eurobiotech's, subject to good
faith negotiations regarding the impact of patent expirations, non-patent
countries, competition, infringement, know-how and other issues.
Foreign Taxes
Payments to Southern shall be made through Eurobiotech U.S.A. and will
not include deductions for foreign taxes (which not-for-profit U.S. corporations
have no means of crediting or offsetting).
Due Diligence
Upon the definitive Agreement being signed the two parties shall
prepare, within 90 days of the date of signing, a business development plan
outlining the strategy, timing and implementation of steps to commercialize the
technology. Retention of rights by Eurobiotech is contingent upon submission of
a NDA to the FDA within four years of the effective date of the definitive
Agreement.
5
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute
It is agreed that Southern shall be responsible for obtaining
authorization and agreement from Memorial Sloan Kettering Institute in order to
fully carry out its obligations under the terms of the definitive Agreement.
Authority
Southern has full power, authority and legal right to enter into this
contemplated Agreement and to consummate the transactions contemplated hereby.
Eurobiotech has full power, authority and legal right to enter into
this contemplated Agreement and to consummate the transactions contemplated
hereby.
Signed on behalf of Southern Signed on behalf of Eurobiotech
/s/ /s/ ▇.▇. ▇▇▇▇
--------------------------------- -----------------------------------
Chief Executive Officer Chairman
--------------------------------- -----------------------------------
Position Position
Sept. 22, 1997 29/9/97
--------------------------------- -----------------------------------
Date Date
6
APPENDIX III
Extension of the Co-Development Program between
Southern Research Institute and Eurobiotech Group, Inc.
WHEREAS Southern Research Institute ("SRI") and Eurobiotech Group, Inc.
("Eurobiotech") have entered into an Agreement dated 8/31/98 to co-develop
2'-fluoro-2-halo substituted purine nucleoside(s) for the treatment of
hematological malignancies, other cancers and other therapeutic indications, and
WHEREAS both parties wish to further specify additional financial as well as
research and development obligations of Eurobiotech,
NOW, THEREFORE, to consummate such extensions to the Co-Development Program by
Eurobiotech, the parties agree as follows:
l. INITIAL PAYMENT
Eurobiotech agrees to pay SRI a total of $50,000 as an initial,
once-only payment within ten (10) days of the signing of the
Co-Development Agreement to codevelop 2'-fluoro-2-halo substituted
purine nucleoside(s).
2. RESEARCH AND DEVELOPMENT PAYMENTS
Eurobiotech agrees to pay SRI a further $50,000 within 90 days of
signing the Co-Development Agreement to be used for research and
development to be conducted at SRI's laboratories with respect to the
use of 2'-fluoro-2-halo substituted purine nucleoside(s) for
therapeutic indications other than cancer. The research and development
program will be mutually agreed upon by the parties and funding will
begin no later than thirty (30) days after such agreement or within
ninety (90) days of the effective date of the Co-Development Agreement,
whichever date is earlier. It is not intended that the sum defined in
this paragraph shall be the total cost of the research and development
program for therapeutic indications other than cancer.
3. TERMINATION OF AGREETMENT
This extension of the Co-Development Agreement shall be governed by the
termination provisions of the Co-Development Agreement.
APPENDIX IV
Gross Profit Margin and Net Income Examples
Joint product costing shall be based on the relative-sales-value method
of joint cost assignment or other joint costing method according to generally
accepted accounting principles and agreed to by Eurobiotech and SRI.
Gross Margin+
-------------
Gross Sales Revenue
------------------------
Cost of Goods Sold:
Joint costs (assigned)
------------------------
Separable costs
------------------------
Total Cost of Goods Sold
------------------------
Gross Margin
------------------------
Gross Profit Margin %
------------------------
+Excludes SRI royalties
Net Income ++
----------
Gross Sales Revenue
------------------------
Total Cost of Goods Sold
------------------------
Gross Margin
------------------------
*Operating Expenses:
Joint costs (assigned):
Selling, G&A
------------------------
R&D, regulatory
------------------------
Depreciation & amortization
------------------------
Financing & interest
------------------------
Total joint costs
------------------------
Separable costs:
Selling, G&A
------------------------
R&D, regulatory
------------------------
Depreciation & amortization
------------------------
Financing & interest
------------------------
Total separable costs
------------------------
Total Operating Expense
------------------------
Net Income
------------------------
++ Excludes SRI royalties, local taxes, corporate income taxes, foreign taxes.
*Assignment of such allowable operating expenses as selling, general and
administrative; research and development, regulatory; depreciation and
amortization; financing and interest shall be according to generally accepted
accounting principles.
Appendix III
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Research Agreement
Inter Institutional Agreement Page 1
SKI/Southern
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INTER-INSTITUTIONAL AGREEMENT
(SK#3294)
Effective on the 31st day of August, 1998 (the "Effective Date"),
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ INSTITUTE FOR CANCER RESEARCH, a not-for-profit
corporation organized and existing under the laws of the State of New York, and
having a place of business located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter "SKI") and
SOUTHERN RESEARCH INSTITUTE, a not-for-profit corporation organized
under the laws of the State of Alabama and having a place of business located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
"Southern"),
hereinafter collectively referred to as the "Parties, or individually
as a "Party"
in consideration of the mutual covenants contained herein, AGREE AS
FOLLOWS:
ARTICLE 1
BACKGROUND & DEFINITIONS
s.1.1 The Parties to this agreement each have patents and/or patent
applications relating to 2'-Fluoro-Arabinofuranosyl Purine Nucleoside
technology including specific compounds, the synthesis of such
compounds, and uses of such compounds as therapeutic treatments for
cancer and other disease conditions, including:
a. "SKI Patents" defined as compounds 3,4, 5 & 6 of claim 2 and
compound 2 of claim 3 of U.S. Patent No. 4,751,221, issued
June 14, 1988 entitled, 2'-Fluoro-Arabinofuranosyl Purine
Nucleosides, and claim 1 of U.S. Patent No. 4,918,179 issued
April 17, 1990 entitled 2'-Fluoro-Arabinofuranosyl Purine
Nucleosides, and any conversions, continuations,
continuations-in-part, divisionals, foreign equivalents,
reissues, or other derivatives of these patents and patent
applications and matters that are the subject of these patents
and patent applications, (hereinafter referred to as "SKI
Patents"); and
b. "Southern Patents" defined as U.S. Patent 5,034,518 issued
July 23, 1991 entitled, 2'-Fluoro-9-(2-Deoxy-2-Fluoro-[Beta]
-D-Arabinofuranosyl) Adenine Nucleosides, U.S. Patent
5,384,310 issued January 24, 1995 entitled 2'-Fluoro-2
Haloarabinoadinosines and Their Pharmaceutical Compositions,
and U.S. Patent 5,661,136 issued August 26, 1997 entitled
2-halo-2'-fluoro ARA adenosines as antinoplastic agents, and
any conversions, continuations, continuations-in-part,
divisionals, foreign equivalents, reissues, or other
derivatives of these patents and patent applications and
matters that are the subject of these patents and patent
applications (hereinafter referred to as "Southern Patents").
Inter Institutional Agreement Page 2
SKI/Southern
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s.1.2 "Technology" shall include Southern Patents and those SKI Patents
(listed in Exhibit B of this Agreement) to the extent necessary to
enable the practice of Southern Patents and SKI Patents issued in
countries in which Southern Patents are not issued or pending.
s.1.3 Inventions described in SKI Patents were developed at SKI by Drs.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇, and ▇▇▇▇ ▇. ▇▇▇, and inventions
described in Southern Patents were developed at Southern by Drs. ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III (hereinafter collectively
referred to as "Inventors").
s.1.4 The Parties desire to provide for the development, utilization, and
commercialization of the Technology through licensing activities or
codevelopment activites.
s.1.5 "Confidential Information" means (i) any know-how, information or
material in tangible form that is marked as confidential or proprietary
by the furnishing party at the time it is delivered to the receiving
party, and (ii) information that is disclosed orally, provided that
such information is specifically identified by the disclosing party as
Confidential Information; and provided further that any information
that is disclosed orally be confirmed in written summary form by the
disclosing party within thirty (30) days. The party who receives
Confidential Information from the other party is referred to in this
Agreement as the "Recipient", and the disclosing Party is referred to
as the "Discloser".
ARTICLE 2
OWNERSHIP
s.2.1 The Parties have or shall have separate agreements with their
respective Inventors, whereby their respective Inventors agree to
assign all right, title and interest in Inventions to their
institutions, and whereby the respective Inventors agree to cooperate
with and assist their institutions in preparing, filing, prosecuting
and maintaining patent applications and patents relating to Inventions
throughout the world.
s.2.2 Each Party shall explicitly retain their respective rights and
ownership it may have in Technology.
ARTICLE 3
COMMERCIALIZATION
s.3.1 The Parties shall each cooperate to achieve the commercial utilization
and exploitation of Technology and shall keep each other informed of
all requests by third Parties concerning commercial utilization or
exploitation.
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SKI/Southern
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s.3.2 The Parties warrant and represent that with respect to Technology they
are under no obligation to anyone other than the inventors,
contributors, and funding agencies.
s.3.3 Except as otherwise expressly set forth in this Agreement, each Party
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENT
RIGHTS CLAIMS, ISSUED OR PENDING, AND ABSENSE OF INFRINGEMENT OF OR BY
RIGHTS OF OTHERS.
s.3.4 Each Party is unaware of any claims asserted against them by any third
parties with respect to patent infringement or any other type of
liability relevant to licensing of the Technology, which have not been
disclosed to the other Party as of the Effective Date of this
Agreement.
ARTICLE 4
GRANTS
s.4.1 Upon execution of the codevelopment agreement between Southern and
Eurobiotech Group, Inc. (hereinafter "Eurobiotech") shown in Exhibit A
(hereinafter "Eurobiotech Agreement") by both Southern and Eurobiotech,
SKI will have been deemed to have granted to Southern an exclusive,
worldwide license to SKI's rights in the Technology, with the right to
sublicense, to the extent necessary for Southern to fulfill its
obligations under its license of the Technology to Eurobiotech Group,
Inc.
s.4.2 Both SKI and Southern are free to use the Technology for their internal
purposes in any way they deem fit, without informing the other party.
ARTICLE 5
SHARING OF PROCEEDS
s.5.1 All proceeds received by Southern, including but not limited to cash or
common stock payments, from the licensing or other commercial
utilization of any portion of Technology pursuant to Articles 3 and 4,
excluding fees for research & development, shall be apportioned
seventy-five percent (75%) to Southern and twenty-five percent (25%) to
SKI until the termination of Eurobiotech Agreement.
s.5.2 If Southern receives from Eurobiotech anything of value in lieu of cash
payments, Southern shall share such payment with SKI according to
Article 5.1, based on the fair market value of such payment on the date
received by Southern, unless SKI waives in writing such payment
obligation in part or in full.
Inter Institutional Agreement Page 4
SKI/Southern
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s.5.3 Southern agrees to distribute to SKI it's share of royalty or other
income in accordance with this Agreement, within thirty (30) days of
receiving such payments. If distribution requires having shares of
stock be put into SKI's name, Southern agrees to initiate such
procedure within fifteen (15) days of of receipt of such stock shares.
Such payments shall be accompanied by a report from each licensee
detailing the calculation of royalties or milestone payment being paid.
Such payments shall show "Payment under Contract SK# 3294" on the check
stub, and shall be sent to:
Memorial ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Cancer Center
Office of Industrial Affairs
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Failure to pay such sums within thirty (30) days of receipt from
licensee shall be considered a material breach of this Agreement and,
after due notice according to Article 12, is sufficient grounds for
termination of this Agreement with the non-paying Party.
s.5.4 Southern shall keep full, true and accurate records containing all
particulars that may be necessary for the purpose of showing the
proceeds paid. For the term of this Agreement, upon receipt of thirty
(30) days prior written notice, Southern shall allow SKI or its agents
to inspect such records for the purpose of verifying Southern's payment
statements or compliance in other respects with this Agreement. Should
such inspection lead to the discovery of a greater than five percent
(5%) discrepancy in reporting to SKI's detriment, Southern agrees to
pay the full cost of such inspection.
s.5.5 Southern agrees to copy SKI promptly with all material correspondence
between Southern and Eurobiotech and to consult with ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ on
all Southern decisions which may cost an estimated $1000 or more, or
which may affect the value of the Technology or the income from the
Technology by an estimated $1000 or more.
ARTICLE 6
PATENT MANAGEMENT & EXPENSES
s.6.1 SKI shall be responsible for preparing, filing, prosecuting and
maintaining SKI Patents. As of the Effective Date of the Eurobiotech
Agreement, SKI shall maintain SKI Patent Rights until the expiration of
such rights or the termination of this Agreement, whichever occurs
first. SKI agrees to copy Southern on patent correspondence relating to
SKI Patent Rights.
s.6.2 Southern shall be responsible for preparing, filing, prosecuting and
maintaining Southern Patents. As of the Effective Date of the
Eurobiotech Agreement, Southern shall maintain Southern Patent Rights
until the expiration of such rights or the termination of this
Agreement, whichever occurs first. Southern agrees to copy SKI on
patent correspondence relating to Southern Patent Rights.
Inter Institutional Agreement Page 5
SKI/Southern
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all patent applications and patents relating to Technology shall be
borne by the respective Party until the execution of the Eurobiotech
Agreement. Upon signing the Eurobiotech Agreement, Southern shall be
responsible for and pay all future costs and expenses incurred by SKI
for the preparation, filing, prosecution, issuance, and maintenance of
the SKI Patents. SKI or its outside patent counsel will submit invoices
to Southern for such costs and expenses, and Southern shall pay the
invoiced amount within sixty days (60) of the date of such invoice.
s.6.4 Failure to pay patent expenses shall be considered a material breach of
contract and, after due notice according to Article 12, is sufficient
grounds for termination of this Agreement with the non-paying Party.
ARTICLE 7
INTEREST
s.7.1 Southern shall pay to SKI interest on any amounts not paid when due.
Such interest will accrue from the fifteenth (15th) day after the
payment was due at a rate two percent (2%) above the daily prime
interest rate, as determined by The Chase Manhattan Bank (N.A.) or its
successor entity, on each day the payment is delinquent, and the
interest payment will be due and payable on the first day of each month
after interest begins to accrue, until full payment of all amounts due
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ is made.
s.7.2 SKI's rights to receive such interest payments shall be in addition to
any other rights and remedies available to SKI.
s.7.3 If the interest rate required in this subsection exceeds the legal rate
in a jurisdiction where a claim for such interest is being asserted,
the required interest rate shall be reduced, for such claim only, to
the maximum interest rate allowable in the jurisdiction.
ARTICLE 8
CONFIDENTIALITY
s.8.1 During the term of this Agreement and for a period of five years
thereafter, The receiving party (hereinafter "Recipient") shall retain
in confidence, and shall not disclose to a third party without the
express written consent of the disclosing party (hereinafter
"Discloser"), any Confidential Information disclosed under this
Agreement, except for that Confidential Information which:
a) was in the possession or control of the Recipient before it
was received, as shown by written records;
b) is available, or becomes available, to the public through no
fault of Recipient or of any of Recipient agents or
employees;
Inter Institutional Agreement Page 6
SKI/Southern
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c) is rightfully received from sources not bound by a similar
confidentiality agreement with the Discloser, or
d) is independently developed by Recipient without knowledge or
use of the Confidential Information, as proven by competent
evidence.
s.8.2 After receipt of written consent from Discloser to disclose
Confidential Information to a third party, and prior to such
disclosure, Recipient hereto shall obtain the written agreement of such
third party, who is not otherwise bound by fiduciary obligations to
Recipient, to hold in confidence and not make use of Confidential
Information for any purpose other than those permitted by this
Agreement. Recipient shall notify the other promptly upon discovery of
any unauthorized use or disclosure of the Discloser's Confidential
Information.
s.8.3 Nothing in this Agreement shall preclude SKI or Southern from making
reports or disclosures required by the National Institutes of Health or
any other organization which provided funds used for the research
relating to Technology, or disclosing Confidential Information to the
minimum extent required to comply with court orders, regulations or
statutes.
ARTICLE 9
PATENT INFRINGEMENT
s.9.1 If any Party becomes aware of any infringement of a patent covered by
this Agreement, it shall notify and discuss with the other Party what
action is required to terminate such infringement. Each Party shall
have the option of taking action against any third party infringer of
their respective patent rights. If both Parties agree to act against
the infringement jointly, they shall share equally in the expenses and
disbursements in connection with such action and shall also share
equally all monies received as a result of such action. If one Party
does not agree to join in the action against infringement, the other
Party will have the right to prosecute a patent infringement action at
their sole expense, and shall be entitled to retain all monies
recovered.
s.9.2 If the Eurobiotech Agreement has been executed at the time the Parties
become aware of any such infringement, Eurobiotech may join in such
action against any third party infringer as specified in the
Eurobiotech Agreement. In that event one or both Parties may elect not
to join in the action against the third party infringer as specified in
the Eurobiotech Agreement without being penalized according to Article
9.1.
ARTICLE 10
INVENTORS SHARES
s.10.1 This Agreement does not preclude inventors from receiving from their
respective institutions their share of royalty income and such other
benefits, if any, specified under the respective patent policies of
each of the Parties or under such other
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SKI/Southern
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agreements that may exist between inventors and their respective
institutions. No Party shall be responsible for the other Parties'
obligations to their inventors.
ARTICLE 11
NON-USE OF NAMES
s.11.1 Neither Party shall use the names of the other Party, nor any of its
Affiliates, employees, nor any adaptation thereof, in any advertising,
promotional or sales literature without prior written consent obtained
from the other Party in each case.
ARTICLE 12
TERM AND TERMINATION
s.12.1 This Agreement shall remain in effect from the Effective Date until the
last to occur of: (a) the expiration of the last to expire of SKI
Patents and Southern Patents; (b) the expiration of the Eurobiotech
Agreement, (c) termination according to s.12.2 of this Agreement; or
(d) by mutual agreement of the parties expressed in writing.
s.12.2 Failure by any Party to comply with any of the material obligations and
conditions contained in this Agreement shall entitle the other Party to
give written notice requiring it to cure such default. If such default
is not cured within sixty (60) days after receipt of such notice, the
notifying Party shall be entitled (without prejudice to any of its
other rights conferred on it by this Agreement) to terminate this
Agreement with the defaulting Party by giving notice to take effect
immediately.
s.12.3 Provisions of Article 8, and any other obligation incurred by a Party
during the term of this Agreement shall survive termination.
ARTICLE 13
SEVERABILITY
s.13.1 If one or more of the provisions of this Agreement shall be held to be
invalid, illegal, or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, provided that the intent of
the Parties in entering into the Agreement is not materially affected
thereby.
ARTICLE 14
NOTICES
s.14.1 Any communication required or permitted under this Agreement shall be
made in writing and sent to such Party, postage prepaid, addressed to
it as set out below, or as it shall subsequently designate by notice
to the other Party. However, if the
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SKI/Southern
--------------------------------------------------------------------------------
Agreement, such communication shall be sent by registered or certified
mail or other means providing proof of delivery, and also communicated
by telephone as promptly as possible. Communications or notices shall
be addressed as follows:
In the case of SKI, the communication or notice shall be addressed to:
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Research
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
Research Resources Management
In the case of Southern, the communication or notice shall be addressed
to:
Southern Research Institute
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
ARTICLE 15
GOVERNING LAW
s.15.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
ARTICLE 16
ENTIRE AGREEMENT
s.16.1 This instrument contains the entire Agreement between the Parties
hereto and supersedes all prior Agreements with respect to Technology.
Any modifications of this Agreement to be effective must be in writing
and signed by all Parties.
ARTICLE 17
INDEMNIFICATION
s.17.1 Southern, and any sublicensee of rights granted under this Agreement,
including Eurobiotech, shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold SKI, its Board of
Managers, officers, employees and affiliates, harmless against all
claims and expenses, including legal expenses and reasonable attorneys'
fees, arising out of the death of or injury to any person or persons or
out of any damage to property and against any other claim, proceeding,
demand, expense and liability of any kind whatsoever resulting from the
production, manufacture, sale, use, lease, consumption or advertisement
of the Licensed
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Product(s) and/or Licensed Process(es) or arising from any obligation
of LICENSEE hereunder, except for any injuries, losses or damages that
specifically result from the gross negligence or willful misconduct of
SKI.
ARTICLE 18
MISCELANEOUS PROVISIONS
s.18.1 Each Party hereby acknowledges that the rights and obligations of this
Agreement are subject to the laws and regulations of the United States
relating to the export of products and technical information. Without
limitation, each Party shall comply with all such laws and regulations.
s.18.2 This Agreement shall not be construed to grant any license or other
rights to either party in any patent rights, know-how, or other
technology of the other party, except as expressly provided in this
Agreement.
s.18.3 Neither party shall assign its rights or obligations under this
Agreement, in whole or in part, by operation of law or otherwise,
without the prior written consent of the other, except to successor to
all or substantially all of the party's assets or business operations
relating to the intellectual property that is the subject of this
Agreement. Any purported assignment in violation of this article shall
be null and void.
s.18.4 The waiver by either party hereto of any right hereunder or of the
failure to perform or of a breach by the other party shall not be
deemed a waiver of any other right hereunder or of any other breach or
failure by said other party whether of a similar nature or otherwise.
s.18.5 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have used this Agreement to be duly executed as
of the Effective Date.
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Southern Research Institute
Research
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇.▇. ▇▇▇▇▇
----------------------------- --------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇.▇. ▇▇▇▇▇
Title: Senior Vice President Title: President and CEO
Date: 9/8/1998 Date: 9/1/1998
Inter Institutional Agreement
SKI/Southern
--------------------------------------------------------------------------------
EXHIBIT B
SKI Patents
United States Patent Number 4,751,221 issued June 14, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Number 4,918,179 issued April 17, 1990
Canadian Patent Number 1,271,192 issued July 3, 1990
EPO Patent Number 0219829 issued December 30, 1992 in Germany,
France, and the United Kingdom
Japanese Patent Number ▇▇▇▇▇▇▇ issued December 5, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Number 5,034,518 issued July 23, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Number 5,384,310 issued January 24, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Number 5,661,136 issued August 26, 1997
European Patent Number 0473708 issued January 15, 1997 in France,
Germany, Great Britain, Italy, Netherlands, Spain, Sweden, and
Switzerland
European Patent Application Serial Number 92912163.0 filed May 7,
1992, designating Austria, Belgium, Germany, Greece, France,
Italy, Luxembourg, Monaco, Netherlands, Spain, Sweden,
Switzerland, and the United Kingdom.
Japanese Patent Application Serial Number 2-508789 filed May 23, 1990
Japanese Patent Application Serial Number500121/1993 filed May 7, 1992
Canadian Patent Application Serial Number 2,102,782 filed May 7, 1992
[LOGO OMITTED]
Senior Vice President
Research Resources Management
September 3, 1998
TO WHOM IT MAY CONCERN:
In my absence, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Director, Research Resources
Management, will sign as an institutional official for the ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇
Institute for Cancer Research.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
JSQ:meb
Memorial ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Cancer Center