EXHIBIT 10.34
OPTION, DEVELOPMENT, MANUFACTURE AND LICENSE AGREEMENT
between
PENTOSE PHARMACEUTICALS, INC.
and
V. I. TECHNOLOGIES, INC.
TABLE OF CONTENTS
1. DEFINITIONS.......................................................... 1
2. GRANT OF OPTION...................................................... 5
2.1 Option Grant..................................................... 5
2.2 Exercise of Option............................................... 5
3. ACTIVITIES DURING OPTION PERIOD...................................... 6
3.1 Research Program................................................. 6
3.2 Delivery of Materials............................................ 6
3.3 Inventions....................................................... 6
3.4 Exchange of Information.......................................... 6
4. LICENSE GRANTS: MANUFACTURING AND MARKETING RIGHTS................... 6
4.1 Exclusive License Grant.......................................... 6
4.2 Non-Exclusive License Grant...................................... 7
4.3 Sublicenses...................................................... 7
4.4 Limitation of License Grant...................................... 7
5. COOPERATIVE DEVELOPMENT WORK......................................... 7
5.1 Objective........................................................ 7
5.2 Steering Committee............................................... 8
5.3 Project Committees............................................... 8
5.4 Development Plan and Budget...................................... 8
5.5 Exchange of Information.......................................... 8
5.6 Records.......................................................... 8
5.7 Funding of the Cooperative Development Work...................... 9
5.8 Commercial Supply of Compounds................................... 9
5.9 Vitex Responsibilities........................................... 10
5.10 Commercialization............................................... 10
5.11 First Commercial Sale........................................... 10
5.12 Sales Targets................................................... 10
5.13 Inspection Rights............................................... 10
5.14 General Disagreements........................................... 11
6. PAYMENTS AND ROYALTIES............................................... 11
6.1 Option Payments.................................................. 11
6.2 Development Milestone Payments................................... 11
6.3 Stock Purchase Agreement......................................... 12
6.4 Sales Milestone Payments......................................... 12
6.5 Payments Contingent on Amendments to Territory 2................. 14
6.6 Payment Terms.................................................... 14
6.7 Base Royalty Pentose Share of Vitex Revenues..................... 14
6.8 Minimum Royalty.................................................. 15
6.9 Sublicense Royalties............................................. 15
6.10 Royalty Reports, Exchange Rates................................. 15
6.11 Audits.......................................................... 16
TABLE OF CONTENTS
(continued)
6.12 Royalty Payment Terms........................................... 16
6.13 Interest on Late Payments....................................... 16
6.14 Third Party Royalties........................................... 16
7. INTELLECTUAL PROPERTY RIGHTS.......................................... 17
7.1 Ownership of Option Period Inventions, Program Technology and
Program Patent Rights........................................... 17
7.2 Pentose's Right to Exploit Compound Intellectual Property........ 17
7.3 Cooperation of Employees......................................... 17
7.4 Prosecution of Parties' Own Patent Rights........................ 18
7.5 Prosecution of Joint Patent Rights............................... 18
7.6 Joint Patent Costs............................................... 18
7.7 Discontinuance of Patent Prosecution............................. 18
8. ENFORCEMENT OF PATENT RIGHTS.......................................... 19
9. TRADEMARKS............................................................ 19
10. TERM AND TERMINATION.................................................. 19
10.1 Term............................................................ 19
10.2 Termination by Either Party..................................... 20
10.3 Termination by Pentose.......................................... 20
10.4 Termination by Vitex............................................ 20
10.5 Effect of Termination........................................... 20
10.6 Survival........................................................ 20
10.7 Remedies........................................................ 20
11. WARRANTY OF AUTHORITY................................................. 21
12. INDEMNITY............................................................. 21
12.1 Vitex Indemnity Obligations..................................... 21
12.2 Pentose Indemnity Obligations................................... 21
12.3 Procedure....................................................... 21
13. CONFIDENTIALITY....................................................... 22
13.1 Nondisclosure Obligations....................................... 22
13.2 Publications.................................................... 23
13.3 Use of Consultants.............................................. 24
13.4 Injunctive Relief............................................... 24
14. MISCELLANEOUS......................................................... 24
14.1 Force Majeure................................................... 24
14.2 Assignment...................................................... 24
14.3 Severability.................................................... 25
14.4 Notices......................................................... 25
14.5 Arbitration..................................................... 26
14.5.1 General.................................................. 26
14.5.2 Procedure................................................ 26
14.6 Applicable Law.................................................. 27
14.7 Entire Agreement................................................ 27
14.8 Headings........................................................ 27
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TABLE OF CONTENTS
(continued)
14.9 Independent Contractors........................................ 27
14.10 Public Announcements........................................... 28
14.11 Waiver......................................................... 28
14.12 Counterparts................................................... 28
14.13 Further Assurances............................................. 28
14.14 Bankruptcy..................................................... 28
EXHIBIT A DEVELOPMENT COSTS
EXHIBIT B PENTOSE PATENT RIGHTS
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OPTION, DEVELOPMENT, MANUFACTURE AND LICENSE AGREEMENT
This Option, Development, Manufacture and License Agreement ("Agreement"),
effective as of the Effective Date (as defined below), is entered into by and
between Pentose Pharmaceuticals, Inc. ("Pentose"), a Delaware corporation with
its principal place of business at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and V.1. Technologies, Inc. ("Vitex"), a Delaware corporation with its
principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
RECITALS
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WHEREAS, Pentose owns proprietary rights to certain chemical compounds and
methods which it distributes under the trademark INACTINE/TM/, for the
inactivation of viral pathogens in blood products; and
WHEREAS, Vitex has the rights to a method of viral inactivation with
solvent/detergent technology for use in connection with pooled plasma for
transfusion; and
WHEREAS, the parties desire to enter into an agreement whereby Vitex will
undertake an initial evaluation of the efficacy of combining the parties'
respective technologies and further to develop and commercialize human plasma
products virally inactivated using the respective technologies of the parties.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements contained herein, Pentose and Vitex hereby agree as follows:
1. DEFINITIONS.
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When used in this Agreement, the following capitalized terms shall have the
meaning set forth below.
1.1 "Affiliate" means, respect to each party, any entity directly or
indirectly controlled by, controlling, or under common control with such party.
1.2 "ANRC" means the American National Red Cross.
1.3 "ANRC Agreement" means the Supply, Manufacturing, and Distribution
Collaboration Agreement between Vitex and the American National Red Cross, dated
December 15, 1997.
1.4 "Compounds" means Pentose's ethyleneimine oligomer compounds useful in
the inactivation of viral pathogens, including without limitation, those
compounds sold under the INACTINE/TM/ trademark.
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1.5 "Compound Processes" shall mean Pentose's proprietary methods of viral
inactivation using the Compounds.
1.6 "Confidential Information" shall have the meaning set forth in Section
13.1.
1.7 "Cooperative Development Work" shall have the meaning set forth in
Section 5.1.
1.8 "Cost of Goods" means, with respect to the Compounds, (a) the variable
costs and fixed costs incurred by Pentose associated with the manufacture
(inclusive of finishing processes) of batches of such Compounds or (b) if such
Compounds are not manufactured by Pentose, the transfer price for batches of
such Compounds purchased from third party manufacturers plus any variable costs
incurred by Pentose in connection with such Compounds. For purposes of this
Section 1.8, "variable costs shall be deemed to be the cost of labor (including
but not limited to quality control, product stability, regulatory costs, project
management and contract administration), raw materials, supplies and other
resources consumed in the manufacture of batches of such Compounds. For purposes
of this Section 1.8, "fixed costs" shall be deemed to be the cost of facilities,
utilities, insurance, facility and equipment depreciation and other fixed costs
directly related to the manufacture of batches of such Compounds. Fixed costs
shall be allocated to such Compounds based upon the proportion of such costs
directly attributable to support of the manufacturing process for such
Compounds. If a facility is used to manufacture Compounds and products for other
programs of Pentose, fixed costs shall be allocated in proportion to the use of
such facility for the manufacture of Compounds and products for such other
programs. Cost of Goods shall exclude all costs otherwise reimbursed pursuant to
this Agreement, and shall exclude selling and general and administrative
expenses except as otherwise set forth above. Except as otherwise provided in
this Agreement, all cost determinations made hereunder shall be made in good
faith in accordance with United States generally accepted accounting principles,
consistently applied.
1.9 "CPI" shall mean the Consumer Price Index (U.S. City Average) which
became effective in January 1978 as compiled by the Bureau of Labor Statistics,
United States, Department of Labor.
1.10 "Development Costs" means all external costs and direct internal
costs incurred by Pentose and Vitex in connection with the Cooperative
Development Work plus indirect costs allocated to the Cooperative Development
Work as approved by the Steering Committee (other than costs associated with the
performance of clinical trials, process development, scale-up and manufacture of
clinical or commercial product, and marketing, and other than costs associated
with the manufacture, supply and delivery of Compounds) pursuant to standard
cost accounting principles, consistently applied and used by Pentose and Vitex,
as shall be more fully set forth by the Steering Committee and described in
Exhibit A hereto.
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1.11 "Effective Date" means the earlier of (i) thirty (30) days after
execution of this Agreement by both parties or (ii) approval by both parties of
the Research Program.
1.12 "Fair Market Value" shall have the meaning set forth in Section 6.2.
1.13 "Field" means the treatment of pooled human blood plasma for
transfusion with both Solvent Detergent Products and Compounds.
1.14 "First Commercial Sale" of the Products in each country shall mean
the first sale for use or consumption by the general public of the Products in
such country.
1.15 "Market Price" means the average closing price of the Pentose or
Vitex stock, as applicable, as reported in The Wall Street Journal, for the
thirty (30) trading days (or lesser number of trading days that such stock is
publicly traded), ending on the date prior to the date the applicable stock
purchase or stock issuance is consummated. As used in this definition, a
"trading day" means a day during which such stock may be traded on the relevant
exchange or over the counter.
1.16 "Option" shall have the meaning as set forth in Section 2.1.
1.17 "Option Period" means the period commencing on the Effective Date and
terminating on the date which is the earlier of (i) twelve (12) months after the
Effective Date, or (ii) the date of exercise of the Option by Vitex.
1.18 "Option Period Invention" means any invention, discovery, or other
technology (including proprietary biological materials, compounds or reagents),
patentable or otherwise, conceived, reduced to practice, or otherwise developed
in connection with the Research Program which relates to Pentose Technology.
1.19 "Pentose Technology" means all present and future inventions, trade
secrets, copyrights, data, regulatory submissions and other intellectual
property of any kind (including the Compounds, the Compound Processes, any
proprietary biological materials, compounds or reagents) including all
confidential technical information in the possession of Pentose as of the
Effective Date and during the term of this Agreement (but not including Pentose
Patent Rights) which are owned or controlled by, or licensed (with the right to
sublicense) to, Pentose, and which are necessary or useful for the manufacture,
use or sale of the Compounds or Products, including without limitation any
Program Technology or Option Period Inventions to the extent owned or controlled
by Pentose.
1.20 "Pentose Patent Rights" means all present and future domestic and
foreign patents, patent applications, provisional patent applications, patent
extensions, certificates of invention, or applications for certificates of
invention, together with any divisions, continuations or continuations-in-part
and renewals thereof, or substitutions therefor, and all reissues,
reexaminations or extensions thereof, which are owned or controlled by, or
licensed (with the right to sublicense) to, Pentose, and which are necessary or
useful for
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the manufacture, use or sale of the Compounds, the Compound Processes or
Products, including without limitation any Program Patent Rights and patent
rights on Option Period Inventions to the extent owned or controlled by Pentose.
Pentose Patent Rights existing as of the Effective Date are listed in Exhibit B
hereto.
1.21 "Product(s)" means products consisting of pooled human blood plasma
intended for transfusion which are treated with both (i) one or more Compounds
using the Compound Processes and (ii) the Solvent Detergent Products, and any
disposables, delivery systems or other components of such products.
1.22 "Product Unit" means two hundred (200) milliliters of frozen liquid
Product, prepared in accordance with manufacturing specifications determined by
the Steering Committee and intended for use in patients.
1.23 "Program Patent" means those United States and foreign patents and
patent applications, provisional patent applications, patent extensions,
certificates of invention, or applications for certificates of invention,
together with any divisions, continuations or continuations-in-part and renewals
thereof; or substitutions therefor, and all reissues, reexarninations or
extensions thereof; and the letters patent that may be issued thereon, relating
to any invention, discovery, procedure, technique, program, creation, method,
protocol, formula, trade secret or other technical information, conceived or
reduced to practice by either party, solely or jointly, during and as part of
the Cooperative Development Work, but not including Option Period Inventions.
1.24 "Program Technology" means any inventions, discoveries, trade
secrets, copyrightable works, know-how, data, regulatory submissions and other
intellectual property of any kind (including any proprietary biological
materials, compounds or reagents), but not including Program Patent Rights or
Option Period Inventions, developed, conceived or created during and as part of
the Cooperative Development Work.
1.25 "Regulatory Approval" shall mean (1) in the United States, approval
from the United States Food and Drug Administration for marketing and promotion
of the Products, and (2) outside of the United States, an analogous order by the
relevant governmental agency which requires regulatory approval prior to
marketing and promotion of the Products in such non-U.S. country.
1.26 "Research Program" shall have the meaning set forth in Section 3.1.
1.27 "Solvent Detergent Product(s)" means (i) the products used to
inactivate viruses that are referenced in the Product License Application
submitted by the New York Blood Center and licensed to Vitex for Regulatory
Approval on February 28, 1993 for solvent/detergent-treated human blood plasma,
which product is a human blood plasma, pooled and treated to inactivate virus
and intended for transfusion as such or (ii) any substantially similar successor
products thereto developed by or on behalf of Vitex.
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Solvent Detergent Products do not include purified plasma derivatives, such as
coagulation factor concentrates, fibrinogen, or immunoglobulin, prepared from
virus-inactivated plasma.
1.28 "Steering Committee" means the Steering Committee created pursuant to
Section
1.29 "Territory 1" means the territory consisting of the United States of
America and Canada.
1.30 "Territory 2" shall mean worldwide with the exception of Territory 1
and the following countries in which Vitex does not have an exclusive license to
the Solvent Detergent Products: Albania, Austria, Belarus, Belgium, Bosnia,
Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Georgia,
Germany, Greece. Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein.
Lithuania, Luxembourg, Macedonia, Monaco, Mongolia, Netherlands, Norway, Poland,
Portugal, Republic of Moldavia, Romania, Russian Federation, Serbia, Slovakia,
Slovenia, South Africa, Spain, Sweden, Switzerland, Ukraine, United Kingdom, and
Vietnam.
1.31 "Valid Claim" shall mean any claim of (i) a pending patent application
that has neither lapsed nor become abandoned, provided that (a) such pending
patent application does not remain pending for more than five (5) years from the
date of filing for any patent application filed in any country within Territory
1 or Territory 2 other than Japan. or seven (7) years for any patent application
filed in Japan (unless the parties agree to longer patent issuance delay
periods, which agreement shall not be unreasonably withheld by Vitex), and (b)
any such delay in patent issuance in any such country is not reasonably
attributable to circumstances beyond Pentose's control, or (ii) an issued,
unexpired patent that has not been held invalid or unenforceable by a patent
office or court of competent jurisdiction in any unappealed or unappealable
decision, including without limitation any such issued, unexpired patent the
application for which had remained pending for greater than the time periods set
forth in (i) above.
2. GRANT OF OPTION.
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2.1 Option Grant. For the duration of the Option Period, Vitex shall have
------------
an exclusive option ("Option"), to be exercised at Vitex's sole discretion, to
acquire the licenses described in Section 4 hereof.
2.2 Exercise of Option. The Option may be exercised by written notice
------------------
given by Vitex to Pentose during the period commencing ninety (90) days after
the Effective Date and ending upon expiration of the Option Period. Such Option
shall be exercisable only if Vitex shall have made timely payment of the amounts
set forth in Section 6.1 hereof. Upon timely exercise of the Option, the license
grants set forth in Section 4 shall become effective and the Cooperative
Development Work described in Section 5 shall commence.
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3. ACTIVITIES DURING OPTION PERIOD.
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3.1 Research Program. During the Option Period, Vitex shall perform and
----------------
have the right to perform, at its facilities an evaluation of the use of the
Compounds for viral inactivation of Products for applications in the Field
pursuant to a written research program as mutually agreed to by the parties
prior to the initiation of the research (the "Research Program").
3.2 Delivery of Materials. Promptly after the Effective Date, and during
---------------------
the Option Period, Pentose agrees to provide Vitex with quantities of the
Compound as requested by Vitex and as are reasonably available for the purpose
of conducting the Research Program. Vitex shall pay to Pentose fifty percent
(50%) of Pentose's Cost of Goods for quantities of such Compound provided to
Vitex during the Option Period, except that in the event that Pentose's Cost of
Goods for quantities of Compound provided to Vitex during the Option Period
exceeds twenty thousand dollars ($20,000 U.S.), Vitex shall pay to Pentose one
hundred percent (100%) of Pentose's Cost of Goods for quantities of Compound
provided thereafter. In the event that Vitex does not exercise the Option within
the time permitted pursuant to Section 2.2 hereof; or otherwise upon completion
of the Research Program, Vitex shall return to Pentose any remaining quantities
of the Compound.
3.3 Inventions. In the event that Vitex does not exercise the Option
----------
pursuant to Section 2.2 hereof; all Option Period Inventions shall be the sole
property of Pentose. In such event, Vitex agrees to cooperate with and assist
Pentose, at Pentose' s expense, in signing or obtaining signatures for or
executing any legal document reasonably requested by Pentose to transfer all
right, title and interest in any Option Period Invention to Pentose. In the
event that Vitex executes the Option pursuant to Section 2.2 hereof; all Option
Period Inventions shall be treated in accordance with the provisions of Section
7 hereto.
3.4 Exchange of Information. The parties shall exchange all material
-----------------------
information developed pursuant to the Research Program, including without
limitation all information relating to Option Period Inventions. Such exchange
of information shall occur subject to the provisions of Section 13 hereof.
4. LICENSE GRANTS: MANUFACTURING AND MARKETING RIGHTS.
--------------------------------------------------
4.1 Exclusive License Grant. Subject to the terms and conditions of this
-----------------------
Agreement, and conditional upon Vitex's exercise of the Option as provided in
Section 2.2, Pentose hereby grants to Vitex the exclusive right and license
under the Pentose Patent Rights and Pentose Technology to use, have used, make,
have made, promote, distribute, market, sell, offer for sale, have sold, import
and have imported Products in Territory 1 for applications in the Field;
provided, however that if Vitex ceases to hold an exclusive license to the
Solvent Detergent Products in Territory 1, the license granted in this Section
4.1 shall become non-exclusive to the extent necessary to permit Pentose to
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grant similar licenses to other parties holding a license to the Solvent
Detergent Products, but will in no event contain terms less favorable to Vitex
than are the terms of any such similar license granted to such other parties
with respect to Territory 1. Notwithstanding the foregoing, no license is
granted hereunder to make or have made Compounds except as set forth in Section
5.8.
4.2 Non-Exclusive License Grant. Subject to the terms and conditions of
---------------------------
this Agreement, and conditional upon Vitex's exercise of the Option as provided
in Section 2.2. Pentose hereby grants to Vitex the non-exclusive right and
license under the Pentose Patent Rights and Pentose Technology to use, have
used, make, promote, distribute, market, sell, offer for sale, have sold, import
and have imported Products in Territory 2 for applications in the Field. To the
extent that the terms of the license between Vitex and the New York Blood Center
for solvent detergent treatment of plasma for transfusion may be amended in the
future to include countries excluded from Territory 2 under the current terms of
that license, then Vitex shall be granted a non-exclusive right and license
under the Pentose Patent Rights and Pentose Technology to use, have used, make,
promote, distribute, market, sell, offer for sale, have sold, import and have
imported Products in such countries for applications in the field.
Notwithstanding the foregoing, no license is granted hereunder to make or have
made Compounds except as set forth in Section 5.8.
4.3 Sublicenses. Vitex shall have the right to grant sublicenses of the
-----------
right to promote, distribute, market and sell the Products in Territory I and
Territory 2, and shall have the right to grant sublicenses of the right to make
Products in Territory 1 only, provided that Pentose consents in writing in
advance to each such sublicense, which consent shall not be unreasonably
withheld or delayed. Vitex shall not have the right to grant sublicenses of the
right to make Products in Territory 2, except that Vitex may subcontract the
right to make Products in Territory 2 for sale solely by Vitex, provided that no
such subcontractor shall be permitted to distribute, market or sell any such
Products in Territory 2.
4.4 Limitation of License Grant. Notwithstanding anything contained in
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this Section 4 or elsewhere in this Agreement, neither Vitex nor any
sublicensees shall have any license or distribution rights hereunder with
respect to (a) the Compounds alone or (b) the Compounds used in combination with
any products or blood products other than Products.
5. COOPERATIVE DEVELOPMENT WORK
----------------------------
5.1 Objective. Upon completion of the Research Program, and conditional
---------
upon Vitex's exercise of the Option, Pentose and Vitex shall work together to
further develop and obtain Regulatory Approval for the Products ("Cooperative
Development Work").
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5.2 Steering Committee. Pentose and Vitex will appoint a four (4) person
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Steering Committee consisting of two (2) senior executives designated by each
company. The purpose of the Steering Committee will be to coordinate the overall
relationship of the parties under this Agreement and to review and manage the
research, development and marketing of Products. Product specifications
recommended by the parties shall not be deemed finalized until they are approved
by the Steering Committee. The Steering Committee shall meet from time to time
as appropriate, but no less frequently than four (4) times during each calendar
year, alternating between the offices of the parties, unless the parties shall
agree otherwise. The Steering Committee shall review and approve budgets,
resource allocations, sales and marketing plans and expenditures. All decisions
of the Steering Committee shall be made by unanimous vote, with Pentose and
Vitex each having one vote regardless of the number of representatives attending
any meeting. In the event the Steering Committee is unable to resolve any matter
before it, the procedure set forth in Section 5.14 shall be followed.
Notwithstanding the foregoing, the final decision on all matters pertaining to
the sales and marketing of Products, and with respect to clinical trials
involving Products, shall be made by Vitex, after giving due respect to the
opinions of Pentose.
5.3 Project Committees. To assist the Steering Committee in its work,
------------------
the Steering Committee may, from time to time, at its sole discretion, create
project committees, whose members may include Steering Committee or non-Steering
Committee members. A project committee shall only have that authority
specifically granted to it by the Steering Committee.
5.4 Development Plan and Budget. The Cooperative Development Work shall
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be conducted in accordance with an annual development plan which shall describe
the work to be undertaken with respect to the development of the Products, and
which shall include an annual budget.
5.5 Exchange of Information. While the Cooperative Development Work is
-----------------------
being performed, the parties shall exchange all information developed pursuant
to the Cooperative Development Work and necessary or useful to the other party's
performance of the Cooperative Development Work and including without limitation
the exchange of Program Technology relating to the Field. Such exchange of
information shall occur subject to the provisions of Section 13 hereof.
5.6 Records. Each party shall maintain detailed records which accurately
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identify its expenditures in connection with the Cooperative Development Work,
which records each party shall retain for five (5) years after the end of the
calendar year in which expenses were incurred. The records shall conform to
generally accepted cost accounting principles consistently applied. Each party
shall have the right, at its own expense, during the period of the Cooperative
Development Work and during the subsequent five (5) year period to appoint an
independent public accountant reasonably acceptable to the other party to
inspect said records. Upon reasonable notice from the other party (the
"Requesting Party"), a party (the "Reviewed Party") shall make its
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records available during regular business hours for inspection by the
independent public accountant at the place or places where the Reviewed Party
customarily keeps such records, to the extent reasonably necessary to verify the
accuracy of the expenditures. The right of inspection shall not be exercised by
a party more than once in any calendar year.
5.7 Funding of the Cooperative Development Work. Vitex shall bear sixty-
-------------------------------------------
five percent (65%) of the annual Development Costs and Pentose shall bear
thirty-five percent (35%) of the annual Development Costs as defined in Exhibit
A. Vitex shall bear all costs and expenses in connection with clinical trials of
the Products, Product manufacturing, process development and scale-up, and
marketing. Within sixty (60) days of the close of each calendar year, each party
shall provide to the other party a report setting forth such party's actual
Development Costs for such year. Vitex will, within ninety (90) days after the
end of each calendar year, provide Pentose with an additional written report
setting forth the total actual Development Costs of the parties for such
calendar year. and such additional report shall reconcile the amounts of
Development Costs paid by each party during such year with the amounts due from
each party. Together with the said report, Vitex will either make a payment to
Pentose or issue to Pentose an invoice for any balance due.
5.8 Commercial Supply of Compounds. Pentose shall have the exclusive
------------------------------
right to manufacture or have manufactured the Compounds used in the Products.
Pentose shall maintain a Drug Master File, meeting the requirements of the
United States Food and Drug Administration containing manufacturing and other
information pertaining to the Compounds, and shall at all times use commercially
reasonable efforts to supply, or have supplied, Vitex's demand for the Compounds
used in the Products. The parties shall agree in good faith upon a forecasting,
order, supply and delivery mechanism for the Compounds to be set forth in a
Manufacturing and Supply Agreement to be executed by the parties prior to
commencement of any multi-site clinical studies for Products, which agreement
shall also include provisions for Vitex to make or otherwise obtain Compounds
should Pentose fail to meet orders placed by Vitex for certain periods and under
certain conditions to be specified in such agreement. In consideration of
Pentose's manufacture, supply and delivery of Compounds, Vitex agrees to pay
Pentose (i) sixty-five percent (65%) of Pentose's Cost of Goods for such
Compounds when used in connection with the Cooperative Development Work, except
that Vitex shall pay one hundred percent (100%) of Pentose's Cost of Goods for
such Compounds used in connection with clinical trials, including but not
limited to scale up therefor, and (ii), Pentose's Cost of Goods for such
Compounds plus a manufacturing margin determined in good faith by Pentose for
such Compounds when used as a component of Products sold or transferred to third
parties, except that in no event shall such payment exceed $2.00 per Product
Unit, adjusted annually by the change in the CPI.
Upon the written request of Vitex, Pentose shall permit an independent
public accountant selected by Vitex and acceptable to Pentose, which acceptance
shall not be unreasonably withheld, to have access during normal business hours
to records of Pentose related to Pentose's Cost of Goods for the Compounds, as
may be reasonably necessary
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to verify the accuracy of the Cost of Goods for such Compounds as stated by
Pentose. All such verifications shall be conducted at Vitex's expense and not
more than once in each calendar year. The fees charged by such representative
shall be paid by Vitex unless the audit discloses that the Cost of Goods stated
by Pentose for the audited period is incorrect by more than five percent (5%),
in which case Pentose shall pay the reasonable fees and expenses charged by such
representative. Vitex agrees that all information subject to review under this
Section 5.8 shall be subject to the confidentiality provisions of Section 13.
5.9 Vitex Responsibilities. Vitex or its approved sublicensees shall be
----------------------
responsible for all aspects relating to scale-up, production, clinical trials,
Regulatory Approval, marketing and distribution of each Product, other than as
the foregoing relate to the manufacture of Compounds by Pentose. Vitex shall
promptly provide Pentose with copies of all regulatory exchanges and
documentation and give reasonable notice to Pentose of scheduled meetings with
the United States Food and Drug Administration and other regulatory agencies.
Pentose shall have the right to attend such meetings as an observer.
5.10 Commercialization. Vitex and its approved sublicensees shall use
------------------
all commercially reasonable efforts to market and sell Products within Territory
2 and in all countries within Territory 1, unless otherwise agreed by the
parties. In no event shall the marketing efforts of Vitex or its sublicensees
hereunder with respect to the Products be less diligent than those efforts Vitex
or its sublicensees make with respect to their own products of similar
commercial potential.
5.11 First Commercial Sale. In addition to and without limiting Vitex's
---------------------
obligations under Section 5.10, Vitex agrees that it (or any approved
sublicensee) shall consummate the First Commercial Sale of a Product in
Territory 1 within five (5) years of the exercise of the Option.
5.12 Sales Targets. Within ninety (90) days of achieving Regulatory
-------------
Approval in any country within Territory 1, and no less frequently than every
ninety (90) days thereafter, the Steering Committee shall establish a twelve
(12) month rolling forecast of expected sales of Products within Territory 1 for
each of the four subsequent quarters. In the event that sales of Products falls
below eighty percent (80%) of such forecasted sales for a period of eighteen
(18) consecutive months, such occurrence is not reasonably attributable to
circumstances beyond Vitex's control, and the amount of such sales total less
than fifty million dollars ($50,000,000 U.S.) in such eighteen (18)-month
period, Vitex's rights under Section 4.1 hereof shall become non-exclusive. The
obligations of Vitex set forth in this Section 5.12 shall be in addition to and
shall not limit Vitex's obligations under Section 5.10.
5.13 Inspection Rights. Pentose shall have the right, but not the
-----------------
obligation, to inspect Vitex's manufacturing sites, validation and/or processing
records (or those of any contractor of Vitex) on a confidential basis and upon
reasonable notice and no more
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frequently than once in any twelve (12) month period, as they pertain to the use
and implementation of the Pentose Patent Rights and the Pentose Technology.
5.14 General Disagreements. All disputes of the Steering Committee not
---------------------
subject to resolution by Vitex alone shall be subject to the following:
(a) The representatives to the Steering Committee will negotiate in good
faith for a period of not less than thirty (30) days to attempt to resolve the
dispute.
(b) In the event that the dispute is not resolved after the period
specified in clause (a), the representatives shall promptly present the
disagreement to the Chief Executive Officers of Pentose and Vitex or a designee
of such Chief Executive Officer reasonably acceptable to the other party.
(c) Such executives shall meet or discuss in a telephone or video
conference each of such party's views and explain the basis for such dispute.
(d) If such executives cannot resolve such disagreement within sixty (60)
days after such issue has been referred to them, then such dispute shall be
referred to arbitration as described in Section 14.5 hereof.
6. PAYMENTS AND ROYALTIES.
----------------------
6.1 Option Payments. In consideration for the Option described in
---------------
Section 2 hereof and, with respect to the payment under Section 6.1(c), the
exercise thereof; Vitex shall make the following cash payments to Pentose:
(a) a non-refundable payment of two hundred fifty thousand dollars
($250,000 U.S.), due and payable upon the Effective Date; and
(b) a non-refundable payment of two hundred fifty thousand dollars
($250,000 U.S.), due and payable ninety (90) days following the Effective Date,
except that in the event that this Agreement is terminated by Vitex pursuant to
Section 10.4 prior to such date, such payment shall not be due; and
(c) a non-refundable payment of seven hundred fifty thousand dollars
($750,000 U.S.), due and payable upon exercise of the Option by Vitex.
6.2 Development Milestone Payments. In consideration for the grants of
------------------------------
license described in Section 4 hereof; Vitex shall purchase shares of Pentose
Common Stock according to the following terms and schedule:
(a) Purchase shares of Pentose Common Stock having a value equal to one
million dollars ($1,000,000 U.S.) upon filing of the first investigational new
drug application in the United States for the Product in the form of and at
appear share purchase price equal to (i) if Pentose is publicly traded, Common
Stock at the Market
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Price plus twenty percent (20%), or (ii) if then privately held, (1) the per
share purchase price paid by a purchaser in the most recent arms-length
transaction involving the purchase of the Pentose's Common Stock, or (2) if no
such arms-length transaction has taken place within ninety (90) days of the
occurrence of the applicable milestone, the fair market value of the per share
purchase price set by the Pentose Board of Directors (each of (1) and (2),
alternatively, the "Fair Market Value"). Notwithstanding the foregoing, the per
share purchase price of Pentose's Common Stock under this Section 6.2(a) shall
in no event (subject to the last sentence of this Section 6.2(a)) be lower than
three dollars ($3.00 U.S.) per share. Vitex shall have the right to appoint, at
Vitex's expense, an independent appraiser acceptable to Pentose for the purpose
of making an appraisal of the value of Pentose's Common Stock at the time of the
occurrence of the milestone described in this Section 6.2(a). In the event that
such appraisal results in a valuation of Pentose's Common Stock at one dollar
fifty cents ($1.50 U.S.) per share or less, Vitex and Pentose will renegotiate
the price of such stock purchase or, alternatively, Vitex may at its sole option
make such milestone payment in cash.
(b) Purchase shares of Pentose Common Stock having a value equal to five
hundred thousand dollars ($500,000 U.S.) upon initiation of the first Phase II
Clinical Trials for the first Product in the United States, in the form of and
at a per share purchase price equal to (i) if Pentose is publicly traded, Common
Stock at the Market Price plus twenty percent (20%), or (ii) if then privately
held, the Fair Market Value.
(c) Purchase shares of Pentose Common Stock having a value equal to five
hundred thousand dollars ($500,000 U.S.) upon initiation of the first Phase III
Clinical Trials for the first Product in the United States, in the form of and
at a per share purchase price equal to (i) if Pentose is publicly traded, Common
Stock at the Market Price plus twenty percent (20%), or (ii) if then privately
held, Fair Market Value.
(d) Purchase shares of Pentose Common Stock having a value equal to one
million dollars (31,000,000 U.S.) upon the filing of the first Biologics License
Application in the United States for the first Product in the form of and at a
per share purchase puce equal to (i) if Pentose is publicly traded, Common Stock
at the Market Price plus twenty percent (200h), or (ii) if then privately held,
the Fair Market Value.
6.3 Stock Purchase Agreement. The purchases of equity set forth above
------------------------
will be made in accordance with a separate stock purchase agreement to be
entered into between the parties containing representations and warranties
customary for transactions of this nature.
6.4 Sales Milestone Payments. In addition to the option payments
------------------------
described in Section 6.1 and the Development Milestone Payments described in
Section 6.2, Vitex shall make the following payment. to Pentose upon the
following terms and schedule:
(a) A non-refundable payment of two million dollars ($2,000,000 US.) upon
First Commercial Sale of the first Product in the United States
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(b) A non-refundable payment of one million five hundred thousand dollars
($1,500,000 U.S.) which shall accrue on the first business day after the close
of the calendar month in which cumulative gross males of Product by Vitex or its
sublicensees, agents, distributors or representatives in all countries of the
world total two hundred fifty million dollars ($250,000,000 U.S.) in the
aggregate.
(c) A non-refundable payment of two million dollars ($2,000,000 U.S.)
which shall accrue on the first business day after the close of the calendar
month in which cumulative gross sales of Products by Vitex or its sublicenses,
agents, distributors or representatives in all countries of the world total
three hundred fifty million dollars ($350,000,000 U.S.) in the aggregate.
The payments set forth in this Section 6.4 may be made, at Vitex's option, (i)
in cash, or (ii) in shares of Vitex Common Stock, valued at the Market Price on
the date the milestone payment is due under Section 6.5, which stock shall be
subject to demand registration rights with the U.S. Securities and Exchange
Commission and shall be freely transferable by Pentose sixty (60) days after
demand, on a national U.S. securities exchange or on the Nasdaq National Market.
In the event that such stock does not become freely transferable by Pentose
within sixty (60) days after SEC filing, such filing to occur within twenty (20)
days of demand, such payment shall be made in cash. In the event that Vitex
elects payment option (ii), to the extent that (a) any broker's fees,
commissions or other transaction costs are associated with Pentose's sale of
such stock, or (b) any reduction in the price of such stock prior to the sale of
such stock by Pentose reduces the amount realized by Pentose upon the subsequent
sale of such stock by Pentose, Vitex shall, within five (5) days of being
notified of any such shortfall pay the amount of such shortfall to Pentose in
cash, provided that Pentose shall make reasonable efforts to sell all such Vitex
stock within six (6) months of issue thereof to Pentose. Notwithstanding the
foregoing, Vitex shall, with respect to each payment set forth in this Section
6.4, make such payment in cash, if any of the following conditions occur.
. The number of shares of stock required to be issued to Pentose by
Vitex (based upon the Market Price of the stock and the payment
amount) is greater than the total number of shares traded in the
twenty (20) trading days preceding the occurrence of the applicable
milestone.
. The Market Price of Vitex Common Stock has declined by an amount equal
to or greater than twenty percent (20%) in the twenty (20) trading
days preceding the occurrence of the applicable milestone.
. The Vitex Common Stock has, prior to the occurrence of the applicable
milestone, been delisted from the exchange on which it had first been
traded.
. The aggregate Market Price of Vitex Common Stock is less than seventy-
five million dollars ($75,000,000 U.S.) as of the date of the
applicable milestone.
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6.5 Payments Contingent on Amendments to Territory 2. To the extent that
------------------------------------------------
the terms of the license between Vitex and the New York Blood Center for solvent
detergent treatment of plasma for transfusion may be amended in the future to
include countries excluded from Territory 2 under the current terms of this
Agreement, then Vitex shall make the following, nonrefundable payments according
to the following schedule:
(a) Two hundred and fifty thousand dollars ($250,000 U.S.) per country in
France, Germany, Italy, Spain, and United Kingdom upon First Commercial Sale in
such country.
(b) One hundred and twenty five thousand dollars ($125,000 U.S.) per
country for the First Commercial Sale in any country other than France, Germany,
Italy, Spain, and United Kingdom.
The total of such payments under this Section 6.5 shall not exceed two million
dollars ($2,000,000 U.S.) in the aggregate.
6.6 Payment Terms.
-------------
Within twenty (20) days following the occurrence of each of the milestones
set forth in Sections 6.2 and 6.4 above, Vitex shall: (i) pay to Pentose in
United States dollars by certified or bank check or wire transfer the payments
set forth above; or (ii) issue the equity in the manner set forth above.
Payments made to Pentose pursuant to Sections 6.1.6.2 and 6.4 are not refundable
under any circumstances and will not be credited against any royalty payments
due Pentose hereunder.
6.7 Base Royalty Pentose Share of Vitex Revenues. In consideration for
--------------------------------------------
the licenses granted by Pentose to Vitex, and in addition to the payments set
forth above, Vitex shall, on a quarterly basis and subject to the minimum
royalty provisions of Section 6.7 below, pay to Pentose a royalty equal to the
greater of the following:
. One-third (1/3) of any difference between the Base Price for a single
deactivated plasma product ("SD/Plasma") charged to ANRC under Section
5.1(a) of the ANRC Agreement as defined in and as adjusted from time
to time pursuant to the terms thereof, and any such higher sales price
charged to ANRC and/or negotiated by Vitex and ANRC with respect to
distribution of the Products, per Product Unit sold.
. One-half (1/2) of the one-third of the increase in the "average
selling price" (as defined in the ANRC Agreement) per Product Unit
over $110 per Product Unit (the "Increase Margin") due by the ANRC to
Vitex under Section 5.1(a) of the ANRC Agreement (i.e., one-sixth
(1/6) of the Increase Margin).
Pentose and Vitex acknowledge that the purpose of the payment provisions set
forth in this Section 6.6 is to enable Pentose to derive a fair share of the
increased revenue of Vitex related to the distribution of the Products as
compared to the distribution of existing
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products under the ANRC Agreement. Therefore, in the event that (i) ANRC ceases
to be the exclusive distributor of the Products in Territory 1, (u) the relevant
provisions of the ANRC Agreement are otherwise amended or altered such as to
render the base royalty provisions set forth in this Section 6.6 inapplicable or
otherwise to frustrate the purpose thereof, or (iii) sales are to be made other
than by ANRC, in each case Pentose and Vitex agree that they shall in good faith
renegotiate such provisions or negotiate additional provisions, taking into
account such purpose, and recognizing that Pentose shall be entitled to an
equitable share of Vitex's revenues related to the distribution of the Products
whether such revenues of Vitex derive from royalty payments, upfront payments,
milestone payments, or any other form of payment. Vitex agrees that it shall
consult with Pentose as to any negotiations between Vitex and ANRC (or such
other sublicensee) with respect to distribution of the Products and any
amendment of the ANRC Agreement that would materially adversely affect the
operation of this provision.
Notwithstanding the foregoing, in any country where (i) the Product is not
covered by a Valid Claim of a Pentose Patent Right or a Program Patent Right,
and (ii) Vitex or its subdistributor experiences a decline over a period of six
(6) months in sales of greater than fifty percent (50%) due to the introduction
of products in the market that (a) would infringe a Pentose Patent Right or a
Program Patent Right were the Product covered by a Valid Claim thereof, and (b)
are competitive with the Products, the royalty rates pursuant to this Section
6.6, or, if applicable, the Minimum Royalty (as defined in Section 6.7), shall
be reduced by fifty percent (50%).
6.8 Minimum Royalty. Subject to the provisions of the last paragraph of
---------------
Section 6.6 hereof, in no event shall the royalty paid by Vitex to Pentose
hereunder be lower than $5.50 for any Product Unit sold (the "Minimum Royalty"),
which Minimum Royalty shall be adjusted by the change in the CPI each year
commencing with the First Commercial Sale and on each anniversary thereafter
during the term of this Agreement.
6.9 Sublicense Royalties. If Vitex grants a sublicense hereunder to any
--------------------
third party pursuant to Section 4.3 hereof, Vitex shall pay to Pentose royalties
on sales of Products sold by such third party according to the royalty
provisions of Sections 6.6 (including any renegotiations thereunder) and 6.7
hereof.
6.10 Royalty Reports, Exchange Rates. During the term of this Agreement
-------------------------------
following the First Commercial Sale of the Products in either Territory 1 or
Territory 2, Vitex shall within sixty (60) days after each calendar quarter
furnish to Pentose a written quarterly report showing: (i) the gross sales of
the Products sold by Vitex and its permitted sublicensees during the reporting
period and the calculation of royalties from such gross sales; (ii) the royalty
due thereon; (iii) withholding taxes, if any, required by law to be deducted in
respect of such royalties; and (iv) the exchange rates used in determining the
amount of United States dollars. For the purposes of calculating royalties due
hereunder, all sales in currencies other than United States dollars shall first
be converted into United States dollars, based upon the applicable rates set
forth in The Wall Street Journal as of the closing date of the relevant calendar
quarter. If no royalty is due
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for any royalty period hereunder, Vitex shall so report. Vitex shall keep
complete and accurate records in sufficient detail to properly reflect all
Product sales and to enable the royalties payable hereunder to be determined.
6.11 Audits. Upon the written request of Pentose, Vitex shall permit an
------
independent public accountant selected by Pentose and acceptable to Vitex, which
acceptance shall not be unreasonably withheld, to have access during normal
business hours to such records of Vitex as may be reasonably necessary to verify
the accuracy of the royalty reports described herein, in respect of any fiscal
year ending not more than thirty-six (36) months prior to the date of such
request. All such verifications shall be conducted at Pentose's expense and not
more than once in each calendar year. In the event such independent accountant
concludes that additional royalties were owed to Pentose during such period, the
additional royalty shall be paid by Vitex within thirty (30) days of the date
Pentose delivers to Vitex such representative's written report so concluding.
The fees charged by such representative shall be paid by Pentose unless the
audit discloses that the royalties payable by Vitex for the audited period are
incorrect by more than five percent (5%), in which case Vitex shall pay the
reasonable fees and expenses charged by such representative. Vitex shall include
in each Third Party sublicense granted by it pursuant to this Agreement a
provision requiring the sublicensee to make reports to Pentose, to keep and
maintain records of sales made pursuant to such sublicense and to grant access
to such records by Pentose's representatives to the same extent required of
Vitex under this Agreement. Pentose agrees that all information subject to
review under this Section 6.10 or under any sublicense agreement shall be
subject to the confidentiality provisions of Section 13.
6.12 Royalty Payment Terms. Royalties shown to have accrued by each
---------------------
royalty report provided for under this Agreement shall be due sixty (60) days
after the end of each calendar quarter. Payment of royalties in whole or in part
may be made in advance of such due date. Royalties determined to be owing with
respect to any prior quarter shall be added, together with interest thereon
accruing under this Agreement from the date of the report for the quarter for
which such amounts are owing, to the next quarterly payment hereunder.
6.13 Interest on Late Payments. Any payments by Vitex to Pentose that
-------------------------
are not paid on or before the date such payments are due under this Agreement
shall bear interest, to the extent permitted by applicable law, at one (1)
percentage point above the Prime Rate of interest declared from time to time by
BankBoston in Boston, Massachusetts, calculated based upon the number of days
payment is delinquent.
6.14 Third Party Royalties. Pentose shall be responsible for payment of
---------------------
any future royalties or obligations owed to third parties pursuant to future
agreements of Pentose relating to the Pentose Technology and the Pentose Patent
Rights reasonably necessary for the exercise of the rights licensed from Pentose
hereunder.
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7. INTELLECTUAL PROPERTY RIGHTS.
----------------------------
7.1 Ownership of Option Period Inventions, Program Technology and Program
---------------------------------------------------------------------
Patent Rights. All right, title and interest in all Option Period Inventions
-------------
and patent rights thereon, Program Technology and Program Patent Rights that are
discovered, made or conceived during the Option Period or during and as a result
of the Cooperative Development Work solely by employees of Pentose or others
acting on behalf of Pentose shall be owned by Pentose. AR right, title and
interest in all Option Period Inventions and patent rights thereon, Program
Technology and Program Patent Rights that are discovered, made or conceived
during the Option Period or during and as a result of the Cooperative
Development Work solely by employees of Vitex or others acting on behalf of
Vitex shall be owned by Vitex (except, as set forth in Section 3.3 hereof, in
the event that Vitex does not exercise the Option pursuant to Section 2.2
hereof). All right, title and interest in all Option Period Inventions and
patent rights thereon, Program Technology and Program Patent Rights that are
discovered, made or conceived during the Option Period or during and as a result
of the Cooperative Development Work jointly by employees of Pentose and Vitex or
others acting on their behalf shall be jointly owned by Pentose and Vitex
(except, as set forth in Section 3.3 hereof, in the event that Vitex does not
exercise the Option pursuant to Section 2.2 hereof). Each party shall promptly
disclose to the other party the making, conception or reduction to practice of
any Option Period Inventions, Program Technology and Program Patent Rights by
employees or others acting on behalf of such party. The ownership rights set
forth above are subject to the license grants set forth in Sections 4 and 7.2
hereof.
7.2 Pentose's Right to Exploit Compound Intellectual Property. The
---------------------------------------------------------
parties recognize that Pentose endeavors to share improvements in technology
relating to the Compounds among all its licensees, and that the sharing of such
improvements benefits all such licensees. Consequently, notwithstanding anything
contained in Section 7.1 to the contrary, Pentose shall have a non-exclusive,
worldwide, royalty-free, perpetual right and license, with the right to grant
sublicenses, to use, make, have made, sell and have sold all Option Period
Inventions, Program Technology and Program Patent Rights that are discovered,
made or conceived during the Option Period or during and as a result of the
Cooperative Development Work solely by employees of Vitex or others acting on
behalf of Vitex that relate to the Compounds or methods of pathogen inactivation
that relate to the Compounds. Pentose shall not grant a sublicense to
improvements solely owned by Vitex to any third party that does not grant
reciprocal rights to improvements solely owned by such third party to Pentose.
To the extent that such third party agreements include such royalty-free grant
of reciprocal rights to Pentose, Vitex shall have the same right to exploit such
third party improvements as may be exercised by Pentose thereunder at no
additional cost to Vitex.
7.3 Cooperation of Employees. Each party represents and agrees that its
------------------------
employees and consultants shall be obligated under a binding written agreement
to assign to such party, or as such party shall direct, all Program Technology
and Program Patent
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Rights made or conceived during and as a result of the Program by such employee
or consultant. Pentose and Vitex agree to undertake to enforce such agreements
with employees or others (including, where appropriate, by legal action)
considering, among other things, the commercial value of such Program Technology
and Program Patent Rights.
7.4 Prosecution of Parties' Own Patent Rights. Pentose shall file,
-----------------------------------------
prosecute and maintain Pentose Patent Rights and Program Patent Rights owned
solely by Pentose. Vitex shall file, prosecute and maintain patents and patent
applications on Program Patent Rights owned solely by Vitex.
7.5 Prosecution of Joint Patent Rights. When any Program Technology that
----------------------------------
is owned jointly by Pentose and Vitex may reasonably be considered patentable,
Pentose shall be responsible for filing a patent application therefor as soon as
reasonably possible. No later than nine (9) months following the filing date of
any such applications, the parties shall consult together, through the Steering
Committee or otherwise, and agree whether such application shall be: abandoned
without replacement; abandoned and refiled; proceeded with in the country of
filing only; or used as the basis for a claim of priority under the Paris
Convention for corresponding applications in other countries. Pentose shall be
responsible for prosecution and maintenance of Program Patent Rights jointly
owned by Pentose and Vitex that relate to Compounds or methods of pathogen
inactivation that relate to Compounds. Vitex shall thereafter be responsible for
prosecution and maintenance of all other jointly owned Program Patent Rights.
7.6 Joint Patent Costs. Each party shall reimburse the other party for
------------------
fifty percent (50%) of the reasonable costs of filing, prosecuting and
maintaining patents and patent applications for which such other party is
responsible under Section 7.5. Notwithstanding the foregoing, upon written
notice, either party may elect not to share in the prosecution or maintenance
costs as described in this Section 7.6 related to a patent or patent application
in a particular country and incurred by the other party after receipt of that
notice; and in such event the party electing to cease paying costs will grant to
the other party all of its patent rights associated with such patent in such
country.
7.7 Discontinuance of Patent Prosecution. Each party shall give thirty
------------------------------------
(30) days advance notice (the "Discontinuance Election") to the other party of
any decision to cease, preparation, filing, prosecution and maintenance of a
Program Patent Right (a "Discontinued Patent") provided, however, that
abandonment of a patent application in favor of a continuation or a
continuation-in-part thereof shall not constitute discontinuance of the patent
application. In such case, the other party may elect at its sole discretion to
continue preparation, filing, prosecution or maintenance of the Discontinued
Patent at its sole expense. Such other party shall thereafter own any such
patent application and patents maturing therefrom; and the party making the
Discontinuance Election shall execute such documents and perform such acts as
may be reasonably necessary for the other party to file or to continue
prosecution or maintenance, including assigning ownership of such patents and
inventions to such electing party. Discontinuance may be on a country-by-country
basis or for a patent application to a patent series in total.
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8. ENFORCEMENT OF PATENT RIGHTS.
----------------------------
Pentose and Vitex shall each promptly notify the other in writing of any
alleged or threatened infringement in the Field of patents or patent
applications included in the Pentose Patent Rights or Program Patent Rights of
which they become aware. Pentose and Vitex shall then confer and may agree
jointly to prosecute any such infringement. The party owning or controlling
patents or patent applications alleged or threatened to be infringed shall
control the joint litigation in the event of any dispute between the parties
with respect to any aspect of the litigation. With respect to Program Patent
Rights covering patents or patent applications jointly owned by Pentose and
Vitex, Pentose shall control any litigation relating to Compounds or methods of
pathogen inactivation relating to Compounds and Vitex shall control all other
such litigation, and each party shall pay fifty percent (50%) of the costs of
such suit or action. Neither party shall have the right to settle any patent
infringement litigation under this Section 8 in a manner that diminishes the
rights or interests of the other party without the express written consent of
such other party.
9. TRADEMARKS.
----------
Vitex and its distributors shall include all trademarks, logos or other
indicia of origin of Pentose designated by Pentose in a prominent manner on all
labels, packaging, literature and promotional materials for the Products and
shall ▇▇▇▇ all Products as necessary to comply with applicable patent statutes
so as to reasonably protect Pentose Patent Rights. Vitex shall provide to
Pentose for review copies of all proposed uses of such marks. Vitex and its
distributors shall include on material bearing such marks an acknowledgement
that such marks are the property of Pentose. If necessary in any market to
maintain Pentose's rights in Pentose's marks, Vitex and its distributors shall
enter into a registered user agreement regulating the use by Vitex or its
distributors of Pentose's marks. Except as provided in this Section 9, no rights
to Pentose marks are hereby granted to Vitex.
10. TERM AND TERMINATION.
--------------------
10.1 Term. This Agreement will commence on the Effective Date and, unless
----
terminated in accordance with the terms hereof, shall continue in effect on a
country by country basis until fifteen (15) years after the First Commercial
Sale in such country, except that in the event that Pentose Patent Rights or
Program Patent Rights in any country within Territory 1 or Territory 2 expire
after such fifteen-year period, then this Agreement shall continue, in all
countries within Territory I and Territory 2, until such Pentose Patent Rights
and Program Patent Rights terminate or expire within all such countries.
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10.2 Termination by Either Party. This Agreement may be terminated by
---------------------------
either party (a) by reason of a material breach (other than as provided in
Section 10.3) if the breaching party fails to remedy such breach within sixty
(60) days after written notice thereof by the non-breaching party, or (b) upon
written notice to the other party in the event that proceedings in bankruptcy or
insolvency are instituted by or against the other party, or a receiver is
appointed, or if any substantial part of the assets of the other party is the
object of attachment, sequestration or other type of comparable proceeding, and
such proceeding is not vacated or dismissed within thirty (30) days after its
commencement or institution.
10.3 Termination by Pentose. This Agreement may be terminated by Pentose
----------------------
if Vitex fails to (i) fulfill its obligations under Section 5.11, unless such
failure is reasonably attributable to circumstances beyond Vitex's control, or
(ii) make any payment, issue any equity, or fund any equity purchase as provided
hereunder within (10) business days after such payment or funding becomes
payable and such failure is not remedied within thirty (30) days after notice
thereof by Pentose.
10.4 Termination by Vitex. This Agreement may be terminated by Vitex
--------------------
without cause upon written notice to Pentose (i) before expiration of the Option
Period, or (ii) during the period after the expiration of the Option Period and
prior to obtaining Regulatory Approval in any country.
10.5 Effect of Termination. In the event this Agreement is terminated,
---------------------
except by Vitex pursuant to Sections 10.2 or 10.4(i) above, Vitex will (i)
assign to Pentose all right, title and interest in all Program Technology and
Program Patent Rights that are discovered, made or conceived by Vitex, and (ii)
shall pay to Pentose an amount equal to the sum of (a) all Development Costs
borne by Pentose during the term of the Agreement and (b) Pentose's total
cumulative Cost of Goods for the Compounds less such amounts previously paid by
Vitex to Pentose pursuant to Sections 3.2 or 5.8 of this Agreement for Pentose's
manufacture, supply and delivery of the Compounds. In such event, Vitex agrees
to cooperate with and assist Pentose in signing or obtaining signatures for or
executing any legal document reasonably requested by Pentose to transfer all
right, title and interest in such technology or know-how to Pentose.
10.6 Survival. The provisions of Sections 5.6, 5.7, 5.14, 6 (with respect
--------
only to payments accrued at the time of termination but not yet paid), 7.1, 7.2,
7.3, 7.5, 7.7, 10, 11, 12, 13 and 14.5 shall survive termination of this
Agreement.
10.7 Remedies. If either party shall fail to perform or observe or
--------
otherwise breaches any of its material obligations under this Agreement, in
addition to any right to terminate all or any portion of this Agreement, the
non-defaulting party may elect to obtain other relief and remedies available
under the law.
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11. WARRANTY OF AUTHORITY.
---------------------
Each party represents and warrants to the other (a) that it has the right
and power to enter into this Agreement and to extend the rights and licenses
granted to the other in this Agreement, and (b) that the performance of such
obligations will not conflict with any agreements, contracts or other
arrangements to which it is a party. Furthermore, Pentose represents and
warrants that to Pentose's best knowledge, there are no patent rights owned by
third parties relevant and material to an evaluation of Vitex's freedom to
operate with respect to the use of rights licensed hereunder.
12. INDEMNITY.
---------
12.1 Vitex Indemnity Obligations. Vitex agrees to defend, indemnify and
---------------------------
hold Pentose, its Affiliates and their respective employees and agents harmless
from and against all claims, losses, damages or expenses arising as a result of:
(a) actual or asserted violations of any applicable law or regulation by Vitex,
its Affiliates or sublicensees by virtue of which the Products manufactured,
distributed or sold shall be alleged or determined to be adulterated,
misbranded, mislabeled or otherwise not in compliance with any applicable law or
regulation; (b) claims for bodily injury, death or property damage attributable
to the manufacture, distribution, sale or use of the Products by Vitex, its
Affiliates or sublicensees; or (c) a Product recall ordered by a governmental
agency or required by a confirmed Product failure as reasonably determined by
the parties hereto.
12.2 Pentose Indemnity Obligations. Pentose, its Affiliates and their
-----------------------------
respective employees and agents shall not be entitled to the indemnities set
forth in Section 12.1 where the loss, damage, or expense for which
indemnification is sought was either caused by (a) adulteration or non-
conformity with specifications of Compounds manufactured by Pentose or its
Affiliates or (b) a negligent act or omission by Pentose, its directors,
officers, employees or authorized agents. In case of(a) or (b) above, Vitex
shall be entitled to indemnification from Pentose to the extent that such claim,
loss, damage or expense is attributable to (a) or (b) above. In addition,
Pentose shall indemnify Vitex, its Affiliates and their respective employees and
agents from any liability, loss or expense (including reasonable attorneys' fees
and expenses of litigation) arising from any claim that the manufacture, use or
sale of Compounds infringes any patent right of a third party.
12.3 Procedure. A party or any of its Affiliates or their respective
---------
employees or agents (the "Indemnitee") that intends to claim indemnification
under this Section 12 shall promptly notify the other party (the "Indemnitor")
of any loss, claim, damage, liability or action in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor shall
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnitor, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity
21
Confidential
provisions of this Section 12 shall not apply to amounts paid in settlement of
any loss, claim, damage, liability or action if such settlement is effected
without the consent of the Indemnitor, which consent shall not be withheld
unreasonably. The failure to deliver notice to the Indemnitor within a
reasonable time after the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such Indemnitor of any liability to
the Indemnitee under this Section 12, but the omission so to deliver notice to
the Indemnitor will not relieve it of any liability that it may have to any
Indemnitee otherwise than under this Section 12. The Indemnitee, its employees
and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability covered
by this indemnification. In the event that each party claims indemnity from the
other and one party is finally held liable to indemnify the other, the
Indemnitor shall additionally be liable to pay the reasonable legal costs and
attorneys' fees incurred by the Indemnitee in establishing its claim for
indemnity.
13. CONFIDENTIALITY.
---------------
13.1 Nondisclosure Obligations.
-------------------------
(a) General. Except as otherwise provided in this Section 13, during the
-------
term of this Agreement and for a period often (10) years thereafter, both
parties shall maintain in confidence and use only for purposes specifically
authorized under this Agreement (i) information and data received from the other
party resulting from or related to the development of the Compounds and the
Products, including all such information and data exchanged prior to the
execution of this Agreement under the terms of a Nondisclosure Agreement dated
April 22, 1996 between Melville Biologics, Inc. and Pentose, or derived from or
relating to the Research Program and the Cooperative Development Work, and (ii)
all information and data not described in clause (i) but supplied by the other
party under this Agreement marked "Confidential." For purposes of this Section
13, information and data described in clause (i) or (ii) shall be referred to as
"Confidential Information."
(b) Limitations. To the extent it is reasonably necessary or appropriate
-----------
to fulfill its obligations or exercise its rights under this Agreement, a party
may disclose Confidential Information it is otherwise obligated under this
Section 13 not to disclose to its consultants, outside contractors and clinical
investigators, on a need-to-know basis on condition that such entities or
persons agree to keep the Confidential Information confidential for the same
time periods and to the same extent as such party is required to keep the
Confidential Information confidential; and a party may disclose such
Confidential Information to government or other regulatory authorities to the
extent that such disclosure is reasonably necessary to obtain patents or
authorizations to conduct clinical trials of, and to commercially market, the
Products. The obligation not to disclose Confidential Information shall not
apply to any part of such Confidential Information that: (i) is or becomes part
of the public domain other than by unauthorized acts of the party obligated not
to disclose such Confidential Information; (ii) can be shown by written
documents to have been disclosed to the receiving party by a third party having
22
Confidential
a lawful right to disclose it, provided such Confidential Information was not
obtained by such third party directly or indirectly from the other party under
this Agreement pursuant to a confidentiality agreement; (iii) prior to
disclosure under this Agreement, was already in the possession of the receiving
party' provided such Confidential Information was not obtained directly or
indirectly from the other party under this Agreement pursuant to a
confidentiality agreement; (iv) can be shown by written documents to have been
independently developed by the receiving party without breach of any of the
provisions of this Agreement.
(c) Disclosure Required by Law or Government. The Confidential Information
----------------------------------------
may be disclosed by the receiving party pursuant to interrogatories, requests
for information or documents, subpoena, civil investigative demand issued by a
court or governmental agency or as otherwise required by law; provided that the
receiving party notifies the other party immediately upon receipt thereof and
gives the disclosing party the opportunity to seek to limit any such required
disclosure.
13.2 Publications.
------------
(a) Procedure. Each party recognizes the mutual interest in obtaining
---------
patent protection for inventions which arise under this Agreement. In the event
that either party, its employees or consultants or any other third party under
contract to such party wishes to make a publication (including any oral
disclosure made without obligation of confidentiality) relating to work
performed under this Agreement (the "Publishing Party"), such party shall
transmit to the other party (the "Reviewing Party") a copy of the proposed
written publication at least forty-five (45) days prior to submission for
publication, or an abstract of such oral disclosure at least thirty (30) days
prior to submission of the abstract or the oral disclosure, whichever is
earlier. The Reviewing Party shall have the right (a) to propose modifications
to the publication for patent reasons, (b) to request a delay in publication or
presentation in order to protect patentable information or (c) to request that
the information be maintained as a trade secret and, in such case, the
Publishing Party shall not make such publication; provided, however, that the
Publishing Party need only provide the other party with a copy of a proposed
press release within ten (10) days prior to submission for publication or such
other period as the parties may mutually agree.
(b) Delay. If the Reviewing Party requests a delay as described above, the
-----
Publishing Party shall delay submission or presentation of the publication for a
period of ninety (90) days to enable patent applications protecting each party's
rights in such information to be filed.
(c) Resolution. Upon the receipt of written approval of the Reviewing
----------
Party, the Publishing Party may proceed with the written publication or the oral
presentation, and once any publication is approved, either party may
subsequently disclose all or any portion thereof without further approval of the
other party.
23
Confidential
13.3 Use of Consultants. The parties contemplate that from time to time
------------------
during the term of this Agreement third party technical consultants may be
employed by either party in connection with the development of Compounds or
Products. The parties agree that Confidential Information may be disclosed to
such consultants provided that such disclosure shall be limited to such
Confidential Information necessary to enable the technical consultant to provide
technical consulting services. Each such consultant shall be required to sign an
agreement with Pentose or Vitex, as the case may be, setting forth the
consultant's obligations, which shall be consistent with such party's
obligations hereunder, with respect to such Confidential Information.
13.4 Injunctive Relief. The parties hereto understand and agree that
-----------------
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Section 13, or Sections 4,7 or 8, by either party or their
employees, agents, officers or directors or any other person acting in concert
with it or on its behalf. Accordingly, each party shall be entitled to the
granting of injunctive relief by a court of competent jurisdiction against any
action that constitutes any such breach of Sections 4, 7, 8 or 13.
14. MISCELLANEOUS.
-------------
14.1 Force Majeure. Neither party shall be held liable or responsible to
-------------
the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party, including but not limited to earthquake, fire,
floods, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party; provided, however, that the party so
affected shall use reasonable commercial efforts to avoid or remove such causes
of nonperformance, and shall continue performance hereunder with reasonable
dispatch whenever such causes are removed. Either party shall provide the other
party with prompt written notice of any delay or failure to perform that occurs
by reason of such causes. The parties shall mutually seek a resolution of the
delay or the failure to perform as noted above.
14.2 Assignment. This Agreement may not be assigned or otherwise
----------
transferred by either party without the consent of the other party; provided,
however, that either Pentose or Vitex may, without such consent, assign its
rights and obligations under this Agreement (i) in connection with a corporate
reorganization, to any Affiliate, all or substantially all of the equity
interest of which is owned and controlled by such party or its direct or
indirect parent corporation, or (ii) in connection with a merger, consolidation
or sale of substantially all of such party's assets to an unrelated third party
provided, however, that such party's rights and obligations under this Agreement
shall be assumed in writing by its successor in interest in any such transaction
and shall not be transferred separate from all or substantially all of its other
business assets, including those business assets that are the subject of this
Agreement. Any purported assignment in violation of the preceding sentence shall
be void. Any permitted assignee shall assume all obligations of its assignor
under this Agreement.
24
Confidential
14.3 Severability. Each party hereby agrees that it does not intend to
------------
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the parties would not have entered into this Agreement
without the invalid provisions.
14.4 Notices. Any consent, notice or report required or permitted to be
-------
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone, personal delivery or courier) or courier, postage
prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor and shall be effective upon receipt by the
addressee.
If to Pentose: Pentose Pharmaceuticals, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Vice President Business Development, Sales & Marketing
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ & Dodge LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇ 190
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Vitex: V.1. Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, President and
Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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Confidential
With a copy to: ▇▇▇▇▇, ▇▇▇▇▇. Cohn, Ferris, Glovsky and Popeo, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
14.5 Arbitration. Any disputes arising between the parties relating to,
-----------
arising out of or in any way connected with this Agreement or any term or
condition hereof, or the performance by either party of its obligations
hereunder, whether before or after termination of this Agreement (a "Dispute"),
which has not been resolved in accordance with the provisions of Section 5.12
hereof, shall be finally resolved by binding arbitration as herein provided.
14.5.1 General. Except as otherwise provided in this Section 14.5, any
-------
arbitration hereunder shall be conducted under the commercial rules of the
American Arbitration Association. Each such arbitration shall be conducted in
the English language by a panel of three (3) arbitrators (the "Arbitration
Panel"). Each of Pentose and Vitex shall appoint one (1) arbitrator to the
Arbitration Panel and the third arbitrator shall be appointed by the two (2)
arbitrators appointed by Pentose and Vitex. The Arbitration Panel shall be
convened upon delivery of the Notice of Arbitration (as herein defined). Any
such arbitration shall be held in Boston, Massachusetts. The Arbitration Panel
shall have the authority to grant specific performance, and to allocate between
the Parties the costs of arbitration in such equitable manner as it shall
determine. Judgment upon the award so rendered may be entered in any court
having jurisdiction or application may be made to such court for judicial
acceptance of any award and an order of enforcement, as the case may be.
14.5.2 Procedure.
---------
(a) Whenever a Party (the "Claimant") shall decide to institute
arbitration proceedings, it shall give written notice to that effect (the
"Notice of Arbitration") to the other Party (the "Respondent"). The Notice of
Arbitration shall set forth in detail the nature of the Dispute, the facts upon
which the Claimant relies and the issues to be arbitrated (collectively, the
"Arbitration Issues"). Within fifteen (15) days of its receipt of the Notice of
Arbitration, the Respondent shall send the Claimant and the Arbitration Panel a
written Response (the "Response"). The Response shall set forth in detail the
facts upon which the Respondent relies. In addition, the Response shall contain
all counterclaims which the Respondent may have against the Claimant which are
within the Arbitration Issues, whether or not such claims have previously been
identified. If the Response sets forth a counterclaim, the Claimant may, within
fifteen (15) days of the receipt of the Response, deliver to the Respondent and
the Arbitration Panel a rejoinder answering such counterclaim.
26
Confidential
(b) Within fifteen (15) days after the later of (i) the expiration of the
period provided in Section 14.5.2(a) above for the Claimant to deliver a
rejoinder or (ii) the completion of any discovery proceedings authorized by the
Arbitration Panel: (A) the Claimant shall send to the Arbitration Panel a
proposed resolution of the Arbitration Issues and a proposed resolution of any
counterclaims set forth in the Response, including without limitation the amount
of monetary damages, if any, or other relief sought (the "Claimant's Proposal");
and (B) the Respondent shall send to the Arbitration Panel a proposed resolution
of the Arbitration Issues, a proposed resolution of any counterclaims set forth
in the Response and a proposed resolution of any rejoinder submitted by the
Claimant, including without limitation the amount of monetary damages, if any,
or other relief sought (the "Respondent's Proposal"). Once both the Claimant's
Proposal and the Respondent's Proposal have been submitted, the Arbitration
Panel shall deliver to each party a copy of the other party's proposal.
(c) The Arbitration Panel shall issue an opinion with respect to any
Dispute, which opinion shall explicitly accept either the Claimant's Proposal or
the Respondent's Proposal in its entirety (the "Final Decision"). The
Arbitration Panel shall not have the authority to reach a Final Decision that
provides remedies or requires payments other than those set forth in the
Claimant's Proposal or the Respondent's Proposal. The concurrence of two (2)
arbitrators shall be sufficient for the entry of a Final Decision. The
arbitrators shall issue a Final Decision within one (1) month from the later of
(i) the last day for submission of proposals under Section 14.5.2(b) above or
(ii) the date of the final hearing on any Dispute held by the Arbitration Panel.
A Final Decision shall be binding on both parties.
14.6 Applicable Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
14.7 Entire Agreement. This Agreement, together with all exhibits
----------------
hereto, contains the entire understanding of the parties with respect to the
subject matter hereof and supersedes all proposals (oral or written),
understandings, representations, conditions, warranties, covenants, and other
communications between the parties relating hereto. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by both parties hereto.
14.8 Headings. Section headings are inserted for convenience of
--------
reference only and do not form a part of this Agreement.
14.9 Independent Contractors. It is expressly agreed that Pentose and
-----------------------
Vitex shall be independent contractors and that the relationship between the two
parties shall not constitute a partnership, joint venture or agency. Neither
Pentose nor Vitex shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior consent of the other party to do so.
27
Confidential
14.10 Public Announcements. During the term of this Agreement, each party
--------------------
shall be free to issue one or more press releases or other public announcements
or disclosures regarding the activities contemplated herein, subject to the
provisions of Section 13, provided that the form and content of each such
announcement or disclosure shall be approved in advance by the other party,
except to the extent that such announcement or disclosure is required by law.
Once any disclosure is approved hereunder, either party may subsequently
disclose all or any portion thereof without further approval of the other party.
14.11 Waiver. Neither party shall by mere lapse of time, without giving
------
notice or taking other action hereunder, be deemed to have waived any breach by
the other party of any of the provisions of this Agreement. Further, the waiver
by either party of a particular breach of this Agreement by the other shall not
be construed as or constitute a continuing waiver of such breach or of other
breaches of the same or other provisions of this Agreement.
14.12 Counterparts. 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.
14.13 Further Assurances. The parties agree to duly execute and deliver,
------------------
or cause to be duly executed and delivered, such further instruments and to do
and cause to be done such further acts and things, including, without
limitation, the filing of such additional assignments, agreements, documents and
instruments, that may be necessary or as the other party hereto may at any time
and from time to time reasonably request in connection with this Agreement to
carry out more effectively the provisions and purposes of, or to better assure
and confirm unto such other party its rights and remedies under, this Agreement.
14.14 Bankruptcy. All rights and licenses granted under or pursuant to
----------
this Agreement are, and shall otherwise be, deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101(52) of the U.S. Bankruptcy Code. The
parties to this Agreement shall retain and may fully exercise all of their
respective rights and elections under the U.S. Bankruptcy Code. The parties
further agree that, in the event of the commencement of a bankruptcy proceeding
by or against a party licensor under the U.S. Bankruptcy Code, the licensee
shall be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and, to the extent necessary for the
exercise of the applicable license rights, all embodiments of such intellectual
property, and same, if not already in its possession, shall be promptly
delivered to the licensee (a) upon any such commencement of a bankruptcy
proceeding upon written request therefor by the licensee, unless the licensor
elects to continue to perform all 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 licensor upon written request therefor by the licensee, provided,
however, that upon the licensor's (or its successor's) written notification to
the licensee that it is again willing and able to perform all its obligations
under this Agreement, the licensee shall promptly return all such tangible
materials to the licensor.
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Confidential
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date set forth below.
PENTOSE PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. Williarns
Title: Vice President Business Development, Sales & Marketing
Date: September 30, 1998
V.I. TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
Date: October 2, 1998
29
Confidential
EXHIBIT A
DEVELOPMENT COSTS
30
Confidential
EXHIBIT B
PENTOSE PATENT RIGHTS
COUNTRY FILING DATE TITLE
------------------------------------------------------------------------------------------
UNITED STATES 04/08/97 METHODS FOR
INACTIVATING A VIRUS
------------------------------------------------------------------------------------------
UNITED STATES 08/29/95 METHODS AND COMPOSITIONS FOR
THE SELECTIVE MODIFICATIONS
OF NUCLEIC ACIDS
------------------------------------------------------------------------------------------
UNITED STATES 05/13/97 METHODS AND COMPOSITIONS FOR
THE SELECTIVE MODIFICATIONS
OF NUCLEIC ACIDS
------------------------------------------------------------------------------------------
UNITED STATES 10/03/97 METHODS AND COMPOSITIONS FOR
THE SELECTIVE MODIFICATIONS
OF NUCLEIC ACIDS
------------------------------------------------------------------------------------------
UNITED STATES 01/12/98 METHODS AND COMPOSITIONS FOR
THE SELECTIVE MODIFICATIONS
OF NUCLEIC ACIDS
------------------------------------------------------------------------------------------
UNITED STATES 01/12/98 METHODS AND COMPOSITIONS FOR
INACTIVATING VIRUS
------------------------------------------------------------------------------------------
PCT 04/07/98 METHODS FOR INACTIVATING A
VIRUS
------------------------------------------------------------------------------------------
PCT 08/29/96 METHODS AND COMPOSITIONS FOR
THE SELECTIVE MODIFICATION
OF NUCLEIC ACIDS
------------------------------------------------------------------------------------------
PCT 05/13/98 METHODS AND COMPOSITIONS FOR
THE SELECTIVE MODIFICATION
OF NUCLEIC ACIDS
------------------------------------------------------------------------------------------
UNITED STATES 09/25/98 METHODS TO SELECTIVELY
INACTIVATE VIRUSES IN
BIOLOGICAL COMPOSITIONS
------------------------------------------------------------------------------------------
UNITED STATES 09/25/98 SOLID PHASE QUENCHING SYSTEMS
------------------------------------------------------------------------------------------
31