DEVELOPMENT AGREEMENT BETWEEN CARDIOVASCULAR BIOTHERAPEUTICS, INC. AND PRODERM, LP Dated as of July 8, 2008
BETWEEN
AND
PRODERM,
LP
Dated
as
of July 8, 2008
TABLE
OF
CONTENTS
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Page
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1.
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Definitions
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1
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1.1
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Definitions
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1
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1.2
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Singular
and Plural
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1
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2.
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Description
of Technology / Goal of Development
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1
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3.
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Development
Services
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2
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3.1
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License
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2
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3.2
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Development
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2
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3.3
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Disclaimer
of Warranties
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3
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3.4
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Rights
to Property
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3
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3.5
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Reports
and Records.
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3
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3.6
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Other
Activities
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4
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4.
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Development
Fee
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4
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5.
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Revenue
Sharing from Product Sales
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4
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6.
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Representations
and Warranties of CVBT
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5
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6.1
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Organization
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5
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6.2
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Authorization
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5
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6.3
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Intellectual
Property Rights
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5
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7.
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Representations,
Warranties and Covenants of PDLP
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5
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8.
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Insurance
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5
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9.
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Term
and Termination
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5
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9.1
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Term
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5
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9.2
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Events
of Termination.
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6
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9.3
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Effect
of Termination
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6
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10.
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Indemnification
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6
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10.1
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Indemnification
by CVBT
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6
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10.2
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Indemnification
by PDLP
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6
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10.3
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Defense
of Claims
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7
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10.4
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Consequential
Damages
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7
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11.
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Miscellaneous
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7
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11.1
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No
Implied Waivers; Rights Cumulative
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7
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11.2
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Force
Majeure
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7
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11.3
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Relationship
of the Parties
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7
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11.4
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Notices
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8
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11.5
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Successors
and Assigns
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8
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11.6
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Amendments
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9
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11.7
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Governing
Law
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9
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i
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11.8
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Taxes
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9
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11.9
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Severability
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9
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11.10
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Confidentiality
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10
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11.11
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Trading
Limitations
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10
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11.12
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Counterparts
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10
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11.13
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Entire
Agreement
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10
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SCHEDULES
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1.1
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Definitions
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2.1
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Description
of Wound Healing IP
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3.1
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Technology
License Agreement
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3.2.1
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Work
Plan
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4
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Development
Fee
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ii
This
Development Agreement (the “Agreement”) is made as of July 8, 2008, by and
between CardioVascular BioTherapeutics, Inc., a Delaware corporation (“CVBT”),
and ProDerm, LP, a Nevada limited partnership (“PDLP”).
RECITALS
A. CVBT
has
developed certain intellectual property regarding a potential drug for wound
healing (the “Wound Healing IP”) and is willing to license to PDLP the Wound
Healing IP for the purpose of further developing the Wound Healing IP and
advancing a potential wound healing drug in the FDA Process.
B. CVBT
has
experience in the development of pharmaceutical products and has, or has
access
to, the facilities, equipment, employees and other resources to accomplish
development activities, on behalf of PDLP, with respect to the Wound Healing
IP.
C. PDLP
desires to engage CVBT to perform such services in connection with the
Development, and CVBT is willing to provide such services.
NOW,
THEREFORE, in consideration of the mutual covenants set forth herein and
for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, and in order to induce CVBT to enter into the Agreements,
CVBT and PDLP hereby agree as follows:
1. Definitions.
1.1 Definitions.
All
capitalized terms used herein and not otherwise defined shall have the
respective meanings, to the extent such terms are used herein, set forth
in
Schedule 1.1 attached hereto, which is incorporated by this reference as
though
fully set forth herein.
1.2 Singular
and Plural.
Singular and plural forms, as the case may be, of terms defined herein shall
have correlative meanings.
2. Description
of Technology / Goal of Development.
The
Wound Healing IP is described in Schedule 2.1 attached hereto and incorporated
herein by this reference. The goal of the Development is to advance the Wound
Healing IP in the FDA Process. The parties hereto understand and acknowledge
that the goal of the Development conducted under this Agreement is to result
in
a wound healing drug that has been authorized for commercial exploitation
by the
FDA and further, both parties understand and acknowledge that there is no
guarantee that the development conducted under this Agreement will result
in a
wound healing drug authorized by the FDA for commercial exploitation.
3. Development
Services.
3.1 License.
Pursuant to the Technology License Agreement of even date herewith, a copy
of
which is attached hereto as Schedule 3.1, CVBT has licensed to PDLP the Wound
Healing IP on a nonexclusive basis for the purpose of permitting PDLP to
participate with CVBT in the Development. PDLP acknowledges that CVBT has
pledged its interest in the Wound Healing IP as collateral for a prior loan
financing entered into on March 20, 2006 as further described on Form 8-K
filed
on March 22, 2006 with a remaining balance due as of June 3, 2008 of $2,680,000
and that the rights of such lender are superior to those of PDLP. PDLP further
acknowledges and understands that CVBT may enter into future research and
development arrangements to further the advancement of the Wound Healing
IP and
related potential drug candidate, and that the rights of such research and
development partnerships will be pari passu with those of PDLP.
CVBT
agrees to not enter in research and development arrangements that will result
in
aggregating more than 50% of revenue due to these arrangements during the
period
of time that R&D LP is still due any royalty under this Agreement.
3.2 Development.
PDLP
hereby engages CVBT, and CVBT hereby accepts such engagement, to use
commercially reasonable efforts to undertake the Development. Such services
shall be provided as follows:
3.2.1 Work
Plan.
The
proposed work plan is attached as Schedule 3.2.1 and incorporated herein
by this
reference. The work plan may be revised by CVBT upon written notice to
PDLP.
3.2.2 Conduct
of Development.
During
the term of this Agreement, CVBT shall use commercially reasonable efforts
to
(a) conduct the Development on behalf of PDLP in a prudent and skillful manner
in accordance, in all material respects, with the work plan then in effect
and
applicable laws, ordinances, rules, regulations, orders, licenses and other
requirements now or hereafter in effect and (b) diligently execute such work
plan and report to PDLP any significant deviations therefrom in a timely
manner.
PDLP hereby appoints CVBT its exclusive agent, for the term of this Agreement,
with the sole power and authority to file and prosecute all necessary regulatory
applications and permits in CVBT’s name required to obtain FDA and other
regulatory approvals for CVBT’s Development efforts. Without limiting the
generality of the foregoing sentence, absent specific requirements of the
FDA to
the contrary, CVBT is authorized by PDLP to conduct FDA trials in CVBT’s name.
Using the Available Funds provided by PDLP, CVBT shall furnish all labor,
supervision, services, supplies and materials necessary to perform the
Development in accordance with the work plan then in effect. In addition,
CVBT
agrees to use commercially reasonable efforts, on behalf of itself and PDLP,
to
attempt to obtain and to sublicense any patent or technology license or
sublicense from any Person, including CVBT, that CVBT reasonably determines
to
be necessary or useful to enable CVBT to conduct the Development under this
Agreement.
3.2.3 Subcontracts.
PDLP
acknowledges that CVBT may elect to subcontract to third parties a portion
of
the Development. PDLP acknowledges and agrees that in performing the
Development, CVBT may, and is hereby authorized to, without the prior written
consent of PDLP, engage or agree or otherwise collaborate with other Persons,
including, without limitation, Affiliates of CVBT or entities performing
other
development activities for CVBT, to provide assistance in carrying out the
Development.
2
3.3 Disclaimer
of Warranties.
CVBT
cannot and does not guarantee that the Development will be successful in
whole
or in part or that any significant advancement in the FDA Process will occur.
To
the extent that CVBT has complied with Section 3.2.2 hereof, the failure
of CVBT
to further develop successfully the Wound Healing IP will not in and of itself
constitute a breach by CVBT of any representation, warranty, covenant or
other
obligation under the Agreements. In addition, neither CVBT nor PDLP makes
any
representation or warranty or guaranty that the development fee described
in
Section 4 will be sufficient for the completion of the Development contemplated
in the work plan. Furthermore, nothing in this Agreement shall be construed
as a
representation made or warranty given that any patents or other registrable
technology will issue from the Development. PDLP understands that the
Development shall involve technologies that have not been approved by any
regulatory authority and that CVBT does not guaranty the safety, effectiveness,
performance or usefulness of any drug or technology that results from the
Development.
3.4 Rights
to Property.
All
right, title and interest to the data, know-how and enhancements of the Wound
Healing IP and any other intellectual property resulting from the Development
acquired or developed pursuant to this Agreement (the “Program IP”) including
any submissions or applications to the FDA or any foreign equivalent made
by
CVBT in its name on behalf of itself or PDLP shall be the exclusive property
of
PDLP; provided, however, that such right, title and interest shall be subject
in
all events to that certain exclusive license agreement of even date herewith
attached hereto as Schedule 3.1 and incorporated herein by this reference;
and
provided further, that PDLP shall have no right to physical possession of
the
Program IP.
3.5 Reports
and Records.
3.5.1 Progress
Reports.
Within
30 days after the end of each calendar quarter during the term of this
Agreement, CVBT shall deliver to PDLP a report setting forth in reasonable
detail a summary of the work performed pursuant to the work plan during the
immediately preceding calendar quarter.
3.5.2 Financial
Reports.
Within
five (5) business days after the filing of its Form 10-Q with the SEC for
the
first three calendar quarters of each calendar year during the term of this
Agreement, CVBT shall provide to PDLP (a) a reasonably detailed report setting
forth in respect of such quarter the revenues collected by CVBT based on
the
exploitation of any wound healing drug developed as a partial result of the
Development, and (b) a check payable to PDLP in an amount equal to the amount
calculated pursuant to Section 5 hereof for that quarterly period. Within
five
(5) business days after CVBT files its Form 10-K with the SEC, it shall provide
to PDLP an audited report of the revenues collected by CVBT based on the
exploitation of any wound healing drug developed as a partial result of the
Development for the prior fiscal year of CVBT. Any adjustments to the amounts
paid or payable to PDLP shall be made as a result of such audit at the time
of
delivery of such audit, and an appropriate payment will be made to
PDLP.
3
3.5.3 Final
Report.
CVBT
shall prepare a final report, within 90 days after the expiration or termination
of this Agreement, setting forth in reasonable detail a summary of the work
performed since the last report provided to PDLP hereunder and the material
developments with respect thereto and containing a final statement of, and
payment based on, all applicable collected revenues upon which payment to
PDLP
pursuant to Section 5 hereof are based and deliver such report to
PDLP.
3.5.4 Records/Review
of Records.
CVBT
shall keep and maintain proper and complete records and books of account
documenting all of its collected revenues based on the exploitation of any
wound
healing drug developed as a partial result of the Development. At PDLP’s request
and expense, CVBT shall permit a certified independent public accountant
selected by PDLP to have access, no more than once in each calendar year
during
the term of this Agreement and each year for three calendar years following
the
termination hereof, during regular business hours and upon reasonable notice
to
CVBT, to such records and books for the sole purpose of determining the accuracy
of the collected revenues reports. If such certified independent public
accountant reasonably determines that the collected revenues reported have
been,
for any calendar year understated by CVBT by an amount equal to or greater
than
five percent, CVBT shall promptly forward any such underpayment to PDLP and
pay
all reasonable fees and disbursements of such certified independent public
accountant incurred in the course of making such determination. If such
accountant reports an underpayment by CVBT of less than five percent, CVBT
shall
forward such underpayment to PDLP and PDLP shall pay all fees and expenses
of
such accountant. If such accountant reports an overpayment by CVBT, PDLP
will
repay such overpayment and bear all fees and expenses of such
accountant.
3.6 Other
Activities.
During
the term of this Agreement, CVBT shall devote such time and effort to the
performance of services pursuant to this Agreement as may be necessary or
appropriate to fulfill its duties under this Agreement; provided, however,
it is
specifically understood and agreed by PDLP that CVBT shall not be required
to
devote itself, on a full-time basis, to the provision of such services and
that
CVBT shall have the right to engage in its own development activities for
other
drug candidates and in other business activities with other Persons, and
PDLP
shall not, by virtue of this Agreement, have any right, title or interest
in or
to such independent activities or to the income or profits derived therefrom
and, without limiting CVBT’s obligation to use commercially reasonable efforts
to provide certain services hereunder, nothing set forth in this Agreement
shall
limit or reduce the ability of CVBT to carry on such other
activities.
4. Development
Fee.
The
nonrefundable fee for the Development contemplated herein is set forth on
Schedule 4 hereto which is incorporated herein by this reference. PDLP hereby
acknowledges that CVBT has in no way guaranteed any particular results from
the
Development; that, indeed, there may be no positive results from the
Development; and that, as a consequence, it may receive no return of, or
on, the
Investment.
5. Revenue
Sharing from Product Sales.
If, as
a result of the Development, as well as additional and subsequent development
of
the Wound Healing IP, CVBT is able to commercialize or in any other way exploit
value from the Wound Healing IP, PDLP will be entitled to ten percent (10%)
of
the gross cash actually collected by CVBT based on CVBT’s exploitation of the
wound healing drug (the participation). Such exploitation may include, without
limitation, direct marketing by CVBT or its Affiliates and/or marketing,
licensing, and/or partnering arrangements with other pharmaceutical companies.
Payment of such amounts shall be made contemporaneously with the quarterly
and
annual revenue reports described in Section 3.5 hereof up to a maximum amount
of
the total Investment multiplied by twenty (20).
4
6. Representations
and Warranties of CVBT.
CVBT
represents and warrants to PDLP as follows:
6.1 Organization.
CVBT is
a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware with full corporate power and authority adequate
for executing, delivering and performing its obligations under the
Agreements.
6.2 Authorization.
The
execution, delivery and performance of the Agreements have been duly authorized
by all necessary corporate action on the party of CVBT and the Agreements
shall
constitute legal, valid and binding obligations of CVBT, enforceable against
CVBT in accordance with its terms, subject to laws of general application
related to bankruptcy, insolvency and the relief of debtors.
6.3 Intellectual
Property Rights.
To the
best of its knowledge, CVBT believes it has sufficient legal and/or beneficial
title and ownership to the technology described on Schedule 2.1 hereof to
license to PDLP the Wound Healing IP as contemplated by this Agreement in
Section 3.1 and in the Technology Agreement. CVBT is not aware of, and has
not
received any communications alleging that, it has violated, or that PDLP,
by
participating in the development of the Wound Healing IP as contemplated
in this
Agreement, would violate, any intellectual property rights of any third party.
To the best of CVBT’s knowledge, there is no material unauthorized use,
infringement or misappropriation of any of the technology described in Schedule
2.1 hereto. CVBT is not aware of, nor has it received any communications
challenging, the ownership, validity or effectiveness of the technology in
Schedule 2.1.
7. Representations,
Warranties and Covenants of PDLP.
The
representations, warranties and covenants of PDLP set forth in Section 3.2
of
the Technology Agreement are incorporated herein by this reference.
8. Insurance.
CVBT
shall, to the extent available at commercially reasonable rates, maintain,
with
insurers or underwriters of good repute, such insurance relating to the
Development, against such risks and pursuant to such terms, including deductible
limits or self-insured retentions, as is customary for comparable businesses
undertaking research and development programs of a similar nature, and shall,
to
the extent reasonably possible and not unreasonably expensive, cause PDLP
to
named as an additional insured on its applicable insurance
policies.
9. Term
and Termination.
9.1 Term.
This
Agreement shall be effective as of the date hereof and, unless earlier
terminated, shall continue in full force and effect until such time as the
maximum revenue sharing amount set forth in Section 5 has been paid.
5
9.2 Events
of Termination.
9.2.1 Mutual
Agreement.
By
mutual agreement, the parties hereto may at any time terminate this Agreement
and the Development on mutually acceptable terms.
9.2.2 Termination
of Development.
At any
time, and upon notice to PDLP, CVBT may elect to terminate the Development
process due to insufficient progress or outright inability to make progress
toward a commercially marketable wound healing drug.
9.2.3 Termination
After Full Payment.
This
Agreement shall terminate upon payment in full by CVBT to PDLP of the maximum
amount set forth in Section 5 hereof.
9.3 Effect
of Termination.
If this
Agreement is terminated pursuant to Sections 9.2.1, 9.2.2 or 9.2.3, neither
party shall have any liability to the other except as agreed upon pursuant
to
the termination, and the ownership of the Wound Healing IP and the Program
IP,
including, without limitation, any patents derived therefrom, will revert
to
CVBT without further action on the part of any of the parties. To the extent
that evidence of such reversion is required to be placed in a writing, PDLP
will, at CVBT’s request, execute and deliver to CVBT specific assignments of the
Wound Healing IP or the Program IP and execute, acknowledge and deliver to
CVBT
such other documents and take such further actions as CVBT may consider
necessary or appropriate to confirm or vest title in such intellectual property
in CVBT. If the agreement is terminated pursuant to Section 9.2.2, Section
5
will survive the termination. Under no circumstances will CVBT have an
obligation to refund any portion of the development fee.
10. Indemnification.
10.1 Indemnification
by CVBT.
CVBT
shall indemnify the PDLP Indemnitees, pay on demand and protect, defend,
save
and hold harmless each PDLP Indemnitee from and against any and all Claims
incurred by or asserted against any PDLP Indemnitee of whatever kind or nature,
including, without limitation, any claim or liability based upon (a) negligence
warranty, strict liability, violation of government regulation or infringement
of patent or other propriety rights, arising from or occurring as a result
any
of the Development or any other services to be performed by CVBT during the
term
of the Agreements pursuant to the Agreements, including, without limitation,
any
workers’ compensation claim by any CVBT employee or consultant or other Person
or (b) any breach of the Agreements by CVBT, except, with respect to PDLP
Indemnitees in cases in which Claims of PDLP Indemnitees are based upon the
gross negligence or willful misconduct of an PDLP Indemnitee. An PDLP Indemnitee
shall promptly notify CVBT of any Claim with respect to which an PDLP Indemnitee
is seeking indemnification hereunder, upon becoming aware thereof, and permit
CVBT at CVBT’s cost to defend against such Claim and shall cooperate in the
defense thereof.
10.2 Indemnification
by PDLP.
PDLP
shall indemnify the CVBT Indemnitees, pay on demand and protect, defend,
save
and hold harmless each CVBT Indemnitee from and against any and all Claims
incurred by or asserted against any CVBT Indemnitee of whatever kind or nature,
including, without limitation, any claim or liability based upon negligence,
warranty, strict liability, violation of government regulation or infringement
of patent or other propriety rights, arising from or occurring as a result
of
any breach of the Agreements by PDLP, except, with respect to CVBT Indemnitees,
in cases in which Claims are based upon the gross negligence or willful
misconduct of a CVBT Indemnitee. An Indemnitee hereunder shall promptly notify
PDLP of any Claim with respect to which such Indemnitee is seeking
indemnification hereunder, upon becoming aware thereof, and permit PDLP at
PDLP’s cost to defend against such Claim and shall cooperate in the defense
thereof.
6
10.3 Defense
of Claims.
None of
CVBT or PDLP shall enter into, or permit, any settlement of any Claim for
which
indemnification is being sought by such party hereunder without the express
written consent of each other party (or a CVBT or PDLP Indemnitee, as the
case
may be), which consent shall not be unreasonably withheld or delayed. Each
party
may, at its option and expense, have its own counsel participate in any
proceeding which is under the direction of another party (the “Indemnifying
Party”) and will cooperate with the Indemnifying Party and its insurer in the
disposition of any such matter; provided, however, that if the Indemnifying
Party shall not defend such Claim, the other party shall have the right to
defend such Claim itself and recover from the Indemnifying Party all reasonable
attorneys’ fees and expenses incurred by it during the course of such
defense.
10.4 Consequential
Damages.
None of
the parties to this agreement shall be entitled to recover from another party
hereto any special, incidental, consequential or punitive damages.
11. Miscellaneous.
11.1 No
Implied Waivers; Rights Cumulative.
No
failure on the part of CVBT or PDLP to exercise and no delay in exercising
any
right, power, remedy or privilege under this Agreement or provided by statute
or
at law or in equity or otherwise, including, without limitation, the right
or
power to terminate this Agreement, shall impair, prejudice or constitute
a
waiver of any such right, power, remedy or privilege or be construed as a
waiver
of any breach of this Agreement or as an acquiescence therein, nor shall
any
single or partial exercise of any such right, power, remedy or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power, remedy or privilege.
11.2 Force
Majeure.
CVBT
and PDLP shall each be excused for any failure or delay in performing any
of
their respective obligations under this Agreement, if such failure or delay
is
caused by a force, effect, cause or circumstance beyond the control of the
nonperforming party.
11.3 Relationship
of the Parties.
Nothing
contained in this Agreement is intended or is to be construed to constitute
CVBT
and PDLP as partners or joint venturers or one party as an employee of any
other
party. Except as expressly provided herein, no party hereto shall have any
express or implied right or authority to assume or create any obligations
on
behalf of or in the name of any other party or to bind any other party to
any
contract, agreement or undertaking with any third party.
7
11.4 Notices.
All
notices, requests and other communications to CVBT or PDLP hereunder shall
be in
writing (including telecopy or electronic mail (“e-mail”) transmissions), shall
refer specifically to this Agreement and shall be personally delivered or
sent
by telecopy, facsimile or e-mail transmission or by registered mail or certified
mail, return receipt requested and postage prepaid, or by reliable overnight
courier service, in each case to the respective address specified below (or
to
such address as may be specified in writing to the other party
hereto):
|
If
to CVBT, addressed to:
|
0000
Xxxxxxx Xxxxxx Xxxxxx
Xxxxx
000
Xxx
Xxxxx, Xxxxxx 00000
Attention:
Xxxxxxx X. Xxxx, CFO
Fax
No.: 000-000-0000
E-mail:
xxxxx@xxxx.xxx
|
with
a
copy to the attention of General Counsel (using the same information above
except if via email, then also to xxxxx@xxxx.xxx)
|
If
to PDLP, addressed to:
|
ProDerm,
LP
0000
Xxxxxx Xxxxxx
Xxx
Xxxxx, XX 00000
Attention:
Xxxxxxxxxxx Xxxxx, MD
Fax
No.: 000-000-0000
E-mail:
xxxxxxx@xxx.xxx
|
with
a
copy to the attention of VP and Representative of General Partner (using
the
same information above except if via email, then also to xxxxx@xxxxx.xxx)
Each
party shall provide each other party with copies of any notices sent hereunder,
with such copies sent at the same time as the original notice. Any notice
or
communication given in conformity with this Section 11.4 shall be deemed
to be
effective when received by the addressee, if delivered by hand, telecopy
or
electronic transmission, three days after mailing, if mailed and one business
day after delivery either to a reliable overnight courier service or via
any
electronic means permissible under this Agreement provided the sender has
confirmation of successful transmission.
11.5 Successors
and Assigns.
The
terms and provisions of this Agreement shall inure to the benefit of, and
be
binding upon, CVBT, PDLP, and their respective successors and assigns; provided,
however, that CVBT and PDLP may not assign or otherwise transfer any of their
respective rights and interests, nor delegate any of their respective
obligations, hereunder, including, without limitation, pursuant to a merger
or
consolidation, without the prior written consent of the other party hereto;
provided further, however, that CVBT may fully assign its rights and interests,
and delegate its obligations, hereunder, effective upon written notice thereof
(a) to an Affiliate if such Affiliate assumes all of the obligations of CVBT
hereunder and this Agreement remains binding upon CVBT; or (b) to any Person
that acquires all or substantially all of the assets of CVBT, or which is
the
surviving Person in a merger or consolidation with CVBT, if such Person assumes
all the obligations of CVBT hereunder. Notwithstanding the foregoing, PDLP
shall
have the right to assign only its rights to payments pursuant to Section
5
hereof and shall have no right to assign its interest in the Wound Healing
IP
licensed to it pursuant to the Technology Agreement or derived as the result
of
the Development to any party not approved by CVBT. Any attempt to assign
or
delegate any portion of this Agreement or the results of the Development
in
violation of this Section 11.5 shall be null and void. Subject to the foregoing
any reference to CVBT or PDLP hereunder shall be deemed to include the
successors thereto and assigns thereof.
8
11.6 Amendments.
No
amendment, modification, waiver, termination or discharge of any provision
of
this Agreement, nor consent by CVBT or PDLP to any departure therefrom, shall
in
any event be effective unless the same shall be in writing specifically
identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged and signed by CVBT and PDLP, and each
amendment, modification, waiver, termination or discharge shall be effective
only in the specific instance and for the specific purpose for which given
and
shall not be deemed to be a wavier, termination or discharge for any subsequent
individual or repeated similar or different instance or purpose. No provision
of
this Agreement shall be varied, contradicted or explained by any other
agreement, course of dealing or performance or any other matter not set forth
in
an agreement in writing and signed by CVBT and PDLP.
11.7 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware, as applied to contracts made and performed entirely within
the State of Delaware. Except as otherwise provided herein, any claim or
controversy arising out of or related to this contract or any breach hereof
shall be submitted to a court of competent jurisdiction in the State of Nevada,
and the parties hereby consent to the jurisdiction and venue of such
court.
11.8 Taxes.
If a
law or governmental regulation requires withholding of taxes on any payment
due
hereunder, such taxes shall be deducted from any amount to be remitted hereunder
and shall be paid to the proper taxing authority, and proof of payment shall
be
provided to the party on whose behalf such taxes were paid as evidence of
such
payment in such form as required by the tax authorities having jurisdiction
thereover.
11.9 Severability.
If any
provision hereof should be held invalid, illegal or unenforceable in any
respect
in any jurisdiction, then, to the fullest extent permitted by law, (a) all
other
provisions hereof shall remain in full force and effect in such jurisdiction
and
shall be liberally construed in order to carry out the intentions of the
parties
hereto as nearly as may be possible and (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability
of
such provision in any other jurisdiction. To the extent permitted by applicable
law, CVBT and PDLP hereby waive any provision of law that would render any
provision hereof prohibited or unenforceable in any respect.
9
11.10 Confidentiality.
Any
party receiving Confidential Information shall maintain the confidential
and
proprietary status of such Confidential Information, keep such Confidential
Information and each part thereof within its possession or under its control
sufficient to prevent any activity with respect to the Confidential Information
that is not specifically authorized or contemplated by this Agreement, use
all
commercially reasonable efforts to prevent the disclosure of any Confidential
Information to any other Person, and use commercially reasonable efforts
to
ensure that such Confidential Information is used only for those purposes
specifically authorized or contemplated herein; provided, however, that such
restriction shall not apply to any Confidential Information that is (a)
independently developed by the receiving party outside the scope of this
Agreement (provided, however, that such restriction shall apply to any
technology grants by CVBT to PDLP under this Agreement), (b) in the public
domain at the time of its receipt or thereafter becomes part of the public
domain through no fault of the receiving party, (c) received without an
obligation of confidentiality from a third party having the right to disclose
such information, (d) released from the restrictions of this Section 11.10
by
the express written consent of the disclosing party, (e) disclosed to any
permitted assignee, permitted sublicensee or permitted subcontractor of CVBT
under the Agreements (if such assignee, sublicensee or subcontractor is subject
to the provisions of this Section 11.10 or substantially similar provisions)
or
(f) required by law, statute, rule or court order to be disclosed provided
the
receiving party promptly provides sufficient notice to the disclosing party
so
that the disclosing party may seek a protective order or other confidential
treatment (the disclosing party shall, however, use commercially reasonable
efforts to obtain confidential treatment of any such disclosure). The
obligations set forth in this Section 11.10 shall survive the expiration
or
termination of this Agreement. Without limiting the generality of the foregoing,
CVBT and PDLP each shall use commercially reasonable efforts to obtain, if
not
already in place, confidentiality agreements from their respective employees,
subcontractors and agents, similar in scope to this Section 11.10, to protect
the Confidential Information.
11.11 Trading
Limitations.
In
addition to being Confidential Information, the results of the Development
will
be deemed material nonpublic information until disclosed to the public by
CVBT
in a report to the Securities and Exchange Commission (the “SEC”), or, if
applicable and/or permissible and/or appropriate, in a press release or
published on CVBT’s web site in an event where a filing with the SEC is not
required or is discretionary. If PDLP is in possession of, or otherwise has
knowledge of, the results of the Development before such public disclosure
by
CVBT, PDLP acknowledges and agrees that it may not trade in CVBT securities.
Further, PDLP agrees to obtain a similar acknowledgment and agreement from
its
partners.
11.12 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which
counterpart, when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the
same
instrument.
11.13 Entire
Agreement.
This
Agreement, together with any agreements referenced herein, constitute, on
and as
of the date hereof, the entire agreement of CVBT and PDLP with respect to
the
subject matter hereof, and all prior or contemporaneous understandings or
agreements, whether written or oral, between CVBT and PDLP with respect to
such
subject matter are hereby superseded in their entirety.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
10
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
above written.
| CARDIOVASCULAR BIOTHERAPEUTICS, INC. | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxx | |
|
Xxxxxx
X. Xxxxxxx
Its
President and Chief Executive Officer
|
||
| ProDerm, LP | ||
| |
|
|
| By: | VD-1, LLC | |
|
Its
General Partner
|
||
| By : | /s/ Xxxx Xxxx | |
|
Its
Manager
|
11
SCHEDULE
1.1
DEFINITIONS
“Affiliate”
of a person shall mean a Person that directly or indirectly through one or
more
intermediaries, controls, is controlled by or is under common control with
such
Person. “Control” (and, with correlative meanings, the terms “controlled by” and
“under common control with”) shall mean the possession of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting stock, by contract or otherwise. In the case
of
a corporation, “control” shall mean, among other things, the direct or indirect
ownership of more than 50% of its outstanding voting stock.
“Agreements”
means the Development Agreement and the Technology License
Agreement.
“Available
Funds” shall mean the Investment proceeds.
“Claim”
shall mean any and all liabilities, damages, losses, settlements, claims,
actions, suits, penalties, fines, costs or expenses (including, without
limitation, reasonable attorneys’ fees).
“Confidential
Information” shall mean the Wound Healing IP described in Schedule 2.1 hereof
and all Program IP developed by CVBT (and its Affiliates) and disclosed to
PDLP
pursuant to the Agreements.
“CVBT
Indemnitee” shall mean CVBT, its successors and assigns, and the directors,
officers, employees, agents and counsel thereof.
“Development”
shall mean the further development of the Wound Healing IP for the purpose
of
advancing the FDA Process toward development of a wound healing drug approved
for commercialization by the FDA.
“Development
Agreement” shall mean the Development Agreement dated as of July 8, 2008,
between CVBT and PDLP, as amended, modified or supplemented from time to
time.
“FDA”
shall mean the United States Food and Drug Administration or any successor
agency or authority, the approval of which is required to market biologic
products in the United States.
“FDA
Process” shall mean the clinical trials and other activities necessary to obtain
FDA approval for commercialization.
“Form
10-K” shall mean CVBT’s annual report on Form 10-K to the SEC pursuant to the
Securities Exchange Act of 1934, as amended.
1.1-1
“Form
10-Q” shall mean CVBT’s quarterly report on Form 10-Q to the SEC pursuant to the
Securities Exchange Act of 1934, as amended.
“Force
Majeure” shall mean any act of God, any accident explosion, fire, storm,
earthquake, flood, drought, peril of the sea, riot, embargo, war or foreign,
federal, state or municipal order of general application, seizure, requisition
or allocation, any failure or delay of transportation, shortage of or inability
to obtain supplies, equipment, fuel or labor or any other circumstance or
event
beyond the reasonable control of the party relying upon such circumstance
or
event.
“Investment”
means the amount actually provided by PDLP pursuant to its agreement in Section
4 hereof.
“Person”
shall mean any individual, partnership, corporation, firm, association,
unincorporated organization, joint venture, trust or other entity.
“Program
IP” shall have the meaning ascribed to it in Section 3.4 hereof.
“PDLP
Indemnitee” shall mean PDLP, its successors and assigns, and the directors,
officers, employees, agents and counsel thereof.
“SEC”
means the U.S. Securities and Exchange Commission.
“Technology
Agreement” shall mean the Technology License Agreement dated as of July 8, 2008,
among CVBT and PDLP, as amended, modified or supplemented from time to
time.
1.1-2
SCHEDULE
2.1
DESCRIPTION
OF WOUND HEALING IP
According
to the American College of Foot and Ankle Surgeons, 15 percent of the estimated
20 million Americans afflicted with diabetes will develop a serious foot
ulcer
during their lifetime. A similar percentage of patients with chronic venous
hypertension will also develop wounds. Non-healing dermal ulcers of the lower
extremities can lead to infections and amputations. Chronic wounds represent
an
increasing global health challenge, yet there are currently no
universally-accepted standards of care.
FGF-1
offers the possibility of improved dermal ulcer healing by the promotion
of new
blood vessel growth, known as angiogenesis, in the wound bed, resulting in
enhanced development of granulation tissue and is able to fill wounds of
almost
any size. According to the American Diabetes Association, comprehensive
foot care programs can reduce amputation rates by 45 to 85 percent.
CVBT
has
successfully completed its Phase I wound healing clinical trial aimed at
evaluating the safety and tolerability of its wound healing formulation of
FGF-1
(CVBT-141B) in patients suffering from either diabetic or venous stasis
ulcers. FGF-1 was applied topically and found to be safe and well
tolerated. In the Phase II Protocol we will now shift to examining different
doses of FGF-1 applied to the wounds over a 1 month period to look at both
safety and efficacy of FGF-1 in healing dermal ulcers.
2.1-1
SCHEDULE
3.1
TECHNOLOGY
LICENSE AGREEMENT
3.1-1
SCHEDULE
3.2.1
WORK
PLAN
We
will
submit our Phase II Clinical Protocol to the FDA within 45 days and hope
to
begin dosing patients at 30 U.S. and Canadian clinical trial sites by October
2008. We estimate it will take approximately 6 months to enroll and treat
the
proposed 136 patients that will be included in this double-blind,
placebo-controlled trial examining two doses of the FGF-1 wound formulation.
This would allow us to start our pivotal Phase III trial in 2009, which should
run for approximately 12 months followed by preparation and submission of
a New
Drug Application (NDA) to the FDA in 2010.
This
Work
Plan contains statements that involve risks and uncertainties. These statements
relate to future events and involve known and unknown risks, uncertainties
and
other factors that may cause results, levels of activity, performance or
achievements to be materially different from those expressed or implied by
this
Work Plan. Factors that might affect actual outcomes include, but are not
limited to, FDA approval of CVBT drug candidates and new developments in
the
industry. Although CVBT believes that the expectations reflected in this
Work
Plan are reasonable, CVBT cannot guarantee future results, levels of activity,
performance or achievements.
3.2.1-1
SCHEDULE
4
DEVELOPMENT
FEE
Up
to
$10,000,000
with a minimum of $1,000,000
Payable
$200,000
upon
execution of the sponsor agreement on a best-efforts basis, up to an additional
$10,000,000
not
later than August 15, 2008.
Schedule
of Amounts Paid
|
Acknowledged
Receipt by CVBT
|
|||
|
Date
|
Amount
|
Name
|
Initials
|
|
July
25
|
|||
|
Aug
15
|
|||
|
Total
|
|||
4-1
