LIBRARY AGREEMENT
LIBRARY
AGREEMENT
THIS
LIBRARY ACCESS AGREEMENT
(“Agreement”) is made effective as of April 27, 2004 (“Effective Date”) by
and between ChemBridge Corporation, an Illinois corporation (“ChemBridge”), and
Cleveland BioLabs, Inc., a Delaware corporation.
WHEREAS,
ChemBridge has a collection of chemical libraries (the “Libraries”, as defined
below),
WHEREAS,
CBL
desires a license from ChemBridge to use the Libraries in research and
development,
WHEREAS,
ChemBridge desires to collaborate with CBL in the optimization of lead
compounds.
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements set forth below, the
parties covenant and agree as follows:
Section
1. Definitions.
For
purposes of this Agreement, the following definitions shall apply:
A. “Affiliates”
shall mean any individual or entity directly or indirectly controlling,
controlled by or under common control with, a party to this Agreement. For
purposes of this Agreement, the direct or indirect ownership of fifty percent
(50%) or more of the outstanding voting securities of an entity, or the right
to
receive fifty percent (50%) or more of the profits or earnings of an entity
shall be deemed to constitute control. Such other relationship as in fact
results in actual control over the management, business and affairs of an entity
shall also be deemed to constitute control. The Cleveland Clinic or any related
entity shall not be considered an Affiliate.
B. “Confidential
Information” shall mean any (i) information disclosed in writing by a party
to this Agreement to any other party to this Agreement, and marked by the
disclosing party as “CONFIDENTIAL” or other similar legend sufficient to
identify such information as confidential proprietary information of the
disclosing party, or (ii) information orally disclosed by a party to this
Agreement to any other party to this Agreement that is identified as
confidential when disclosed and confirmed in writing as confidential within
thirty (30) days after such oral disclosure.
C. “Liability”
shall mean any liabilities, damages, settlements, claims, penalties, fines,
and
reasonable costs or reasonable expenses (including, without limitation,
reasonable attorneys’ fees and other expenses of litigation).
D. “Libraries”
shall mean the chemical libraries set forth in Appendix A. [Note-Please
provide a description of the Libraries in
Appendix A.]
E. “Library
Information” shall mean all information on the Libraries, including, without
limitation, (i) information regarding the constituents of the;
(ii) information sufficient for CBL to use the Libraries, but only as
prescribed herein; and (iii) information sufficient for CBL to be able to
identify compounds of interest.
F. “Optimization
Project” shall mean the development of a lead compound from a “Confirmed Hit.” A
“Confirmed Hit” shall be a compound that gave a positive response in at least
two repeat screening assays and that has been confirmed in at least one
additional functional assay.
Section
2. Access
to Libraries.
A. Libraries.
ChemBridge will supply CBL with the Libraries, as set forth in
Appendix A.
B. Timing.
ChemBridge will deliver to CBL 30,000 historical compounds and 30,000
combinatorial Pharmacore compounds from the Libraries set forth in
Appendix A within 45 days of execution of this Agreement; these
compounds shall be referred to as the “Initial Compounds”. ChemBridge will
deliver to CBL another 70,000 historical compounds and another 50,000
combinatorial Pharmacore compounds from the Libraries set forth in
Appendix A within 60 days of CBL’s obtaining at least $1,000,000 of equity
financing at a pre-money valuation of at least $10,000,000; each individual
compound shall be different from the Initial Compounds and shall be collectively
referred to as the “Post-investment Compounds”. If CBL shall raise at least
$1,000,000 of equity financing, but at a pre-money valuation of between
$5,000,000 and $10,000,000, then ChemBridge shall reduce the number of
Post-investment Compounds provided to CBL under this agreement as
follows:
(i) At
Valuation of $9,000,000: reduce number of compounds by 5%
(ii) At
Valuation of $8,000,000: reduce number of compounds by 10%
(iii) At
Valuation of $7,000,000: reduce number of compounds by 15%
(iv) At
Valuation of $6,000,000: reduce number of compounds by 20%
(v) At
Valuation of $5,000,000: reduce number of compounds by 25%
If
CBL is
unable to raise at least $1,000,000 at a pre-money valuation of at least
$5,000,000 within one year of the execution of this Agreement, then CBL shall
receive no Post-investment Compounds, and the Initial Compounds shall constitute
Chembridge’s full payment obligation under this Agreement.
C. Information.
ChemBridge will deliver to CBL the Library Information relevant to the Libraries
provided according to the schedule defined in Section 2.B
hereof.
Section
3. Licenses.
A. License
to Libraries.
ChemBridge hereby grants to CBL a non-exclusive, worldwide license, to
(i) use the Libraries for drug discovery research conducted in its own
research laboratories and for drug discovery research conducted in
collaborations, provided that such collaborations meet the criteria,
qualifications and revenue-sharing obligations as defined in Section 3.B
hereof, and (ii) any intellectual property that would be infringed by the
use of the Libraries in accordance with part (i). It is understood and
agreed that CBL may not, under any circumstances, offer for sale, sell,
exchange, trade or barter the Libraries. Except as provided for in
Section 7 below, CBL may not divulge the contents of the Libraries or any
Library Information to any third party, including its collaborators, without
the
express written consent of ChemBridge. CBL has no right to sublicense the
Libraries, any component of the Libraries or any Library
Information.
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B. Use
of
the Libraries in Contracts with Third Parties.
While
CBL does not intend for such work to be its major activity, CBL would like,
from
time to time, to use the Libraries in screening contracts with academic
third-party scientists. ChemBridge agrees that CBL may use the Libraries for
such contracts with any non-commercial laboratory of the Cleveland Clinic.
ChemBridge also agrees that CBL may use the Libraries in contracts with up
to
seven academic laboratories per year, provided that ChemBridge has given CBL
prior written approval for each such contract. ChemBridge shall receive from
CBL
twenty-five percent (25.0%) of any revenue received by CBL from all contracts,
except those with the Cleveland Clinic, in which the Libraries are used, such
revenue to include all forms of payment, real or in kind, including, but not
limited to, cash, stock, options and warrants. CBL shall provide to ChemBridge
all financial information necessary for ChemBridge to ascertain the proper
sums
due it under this Section 3.B. ChemBridge shall have the right to audit
once yearly those portions of CBL’s books that pertain to revenue-sharing under
this Section 3.B. Such audit will be conducted by an accounting firm
acceptable to CBL, at the reasonable convenience of CBL and at the expense
of
ChemBridge, unless the auditor shall find that CBL has underpaid its obligation
by 5.0% or more, in which case CBL shall bear the cost of the
audit.
C. Affiliates.
CBL may
extend the right and license granted to CBL under Sections 3.A to any
Affiliate, provided that such Affiliate consents to be bound by the terms of
this Agreement to the same extent as CBL, and further provided that ChemBridge
gives written consent, which will not be unreasonably withheld.
D. No
License of CBL Property.
No
rights or licenses with respect to any intellectual property owned by CBL or
its
Affiliates are granted or will he deemed granted to ChemBridge under this
Agreement, except as provided herein under Section 3.B and
Section 5.A.
Section
4. Ownership
and Rights in the Libraries.
A. Independent
Development
ChemBridge retains the right to continue independent development and
investigation of the Libraries. Except as provided for in Section 2.B
relating to the Libraries to be delivered by ChemBridge and Section 2.C
relating to the Library Information to be delivered by ChemBridge, CBL has
no
rights whatsoever regarding any aspect of Chembridge’s business. Except as
provided for in Section 2.B relating to the Libraries to be delivered to
CBL and Section 2.C relating to the Library Information to be delivered to
CBL, ChemBridge has no obligation whatsoever to provide any information
concerning any aspect of its business to CBL.
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B. Intellectual
Property.
CBL
shall own all rights to and interest in any idea, invention (whether patentable
or not), discovery or improvement made by or for CBL and/or its Affiliates
obtained through use of the Libraries by or for CBL and/or its Affiliates,
subject to the revenue-sharing obligations defined in Section 3.B and
Section 5 hereof.
Section
5. Consideration.
A. Lead
Optimization.
in
consideration of the rights and licenses granted by ChemBridge to CBL under
this
Agreement, CBL agrees to collaborate with ChemBridge on two (2)
Optimization Projects, wherein ChemBridge shall have the responsibility for
providing the chemistry components of the project and CBL shall have the
responsibility for providing the pharmacological/biochemical components of
the
project, each party to bear the full costs of its responsibilities. CBL shall
have the responsibility to present for consideration by ChemBridge all its
data
on “Confirmed Hits” that have a reasonable possibility of becoming lead
compounds that arise from its research activities, whether or not such
activities are conducted with a Collaborator. ChemBridge shall then have 90
days
to determine whether it wishes to select the Confirmed Hit as one of its two
Optimization Projects. ChemBridge shall receive a 50% ownership of the Confirmed
Hit and all derivative compounds produced during the course of the selected
Optimization Projects. The parties shall jointly determine which, if any,
compounds emerging from the Optimization Projects should be taken into further
development. For such compounds as the parties agree should be taken into
further development, ChemBridge shall be responsible for the chemistry, and
CBL
shall be responsible for the pharmacology/biochemistry necessary for the
continued development. For later development functions, such as toxicology,
formulation, pharmacoeconomics, pilot scale manufacturing, clinical trials
and
all regulatory and commercial activities, the parties shall share equally in
the
cost. Patent costs and related legal expenses shall be borne equally by the
parties. The parties shall jointly manage the development and commercialization
of any compound arising from an Optimization Project. CBL will have the right
to
define the moment of out-licensing of any compound arising from an Optimization
Project and the terms and conditions of such out-licensing, if the parties,
after reasonable discussion and consultation with each other, are not able
to
agree on these matters. During the course of an Optimization Project, either
party may elect at any time not to proceed with the project. If one party elects
not to proceed with the project, then the other party shall have the right
to
purchase the rights of the other at fair market value, lithe parties are unable
to agree on a fair market value, then such shall be determined by binding
arbitration.
Section
6. Representations
and Warranties.
A. Owner.
ChemBridge represents and warrants that it is the sole and exclusive owner
of
the chemical libraries set forth in Appendix A and has the right to provide
the Libraries and the Library Information to CBL along with any other rights
described herein, without violating its obligations to third
parties.
B. Power
and Authority.
Each
party represents and warrants that it has the legal power, authority and right
to enter into this Agreement and to perform its respective obligations set
forth
herein.
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C. No
Conflict.
Each
party represents and warrants that as of the Effective Date of this Agreement
it
is not a party to any agreement or arrangement with any third party or under
any
obligation or restriction, including pursuant to its certificate of
incorporation or bylaws, that in any way limits or conflicts with its ability
to
fulfill any of its obligations under this Agreement, and will not enter into
any
such agreement during the term of Agreement.
D. Power
to Grant Rights.
Each
party represents and warrants that it has the right to grant the other party
hereto the rights provided under this Agreement.
Section
7. Confidentiality.
Both
parties agree not to use Confidential Information of the other party except
as
expressly provided for in this Agreement, and each party will use best efforts
to prevent the disclosure of the other party’s Confidential Information to third
parties. Except as may be authorized in advance in writing by the other party,
each party shall grant access to he Confidential Information only to its own
employees involved in the use of the rights granted under this Agreement, and
each party shall require such employees to be bound by this Agreement as well.
The confidentiality and use obligations set forth above apply to all or any
part
of the Confidential Information disclosed hereunder except to the extent
that:
(i) the
recipient party can show by written record that it possessed the information
prior to its receipt from the other party;
(ii) the
information was already available to the public or became so through no fault
of
the recipient party;
(iii) the
information is received from a third party having no obligation of
confidentiality to the disclosing party;
(iv) the
information is developed independently by the recipient party without access
to
the disclosing party’s Confidential Information; or
(v) the
information is required by law or regulation to be disclosed; provided, however,
that the party subject to such disclosure requirement has provided written
notice to the other party promptly to enable such other party to seek a
protective order or otherwise prevent disclosure of such Confidential
Information.
The
parties agree to keep the nature, existence and terms of this Agreement
confidential until first publicly announced by the parties pursuant to a joint
press release mutually approved by the parties. The content and timing of all
press releases and similar public communications regarding this Agreement and
the subject matter hereof will be mutually agreed to in writing by the parties,
and neither party may make or issue any public announcement or press release
that refers to the other party or describes any aspect of this Agreement without
having first received the prior written consent of the other party.
Notwithstanding the foregoing, either party may make any public announcement
or
disclosure that it reasonably believes is required by law, rule or regulation
of
any governmental authority or other regulatory body (including, without
limitation, the SEC or the FDA).
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Notwithstanding
the provisions of this Section 7, CBL shall have the right to disclose
Confidential Information to its Affiliates or to collaborators approved under
the terms of Section 3.B (collectively, “Collaborators”) in accordance with
this paragraph. Such disclosure shall be limited only to those Collaborators
involved in the use of the rights granted under this Agreement. Any such
Collaborators must agree in advance and in writing to be bound by
confidentiality and non-use obligations substantially similar to those contained
in this Agreement. In addition, CBL and its Collaborators may disclose such
Confidential Information of ChemBridge as may be necessary in order to obtain
or
maintain any Regulatory Approvals.
Section
8. Indemnity.
A. CBL
Indemnity to ChemBridge.
CBL
shall indemnify, defend and hold harmless ChemBridge from and against any
claims, actions or suits by a third party resulting in any Liability arising
out
of or resulting from (i) a breach of any representation of CBL in
Section 6 or (ii) the use of any Library or any other product provided
by ChemBridge or any affiliate of ChemBridge by CBL and/or its Affiliates and/or
Collaborators, except to the extent such Liability is proven to have resulted
directly from the willful negligence or felonious wrongdoing of
ChemBridge.
B. ChemBridge
Indemnity to CBL.
ChemBridge shall indemnify, defend and hold harmless CBL from and against any
claims, actions or suits by a third party resulting in any Liability arising
out
of or resulting from a breach of any representation of ChemBridge in
Section 6.
Section
9. Miscellaneous.
A. Governing
Law.
This
Agreement shall be governed, construed, and interpreted in all respects in
accordance with the laws of the State of Delaware without regard to conflicts
of
laws provisions.
B. Venue.
The
exclusive venue of any dispute arising out of or in connection with the
performance or breach of this Agreement shall be the Delaware state courts
or
U.S. district court for the County of New Castle, Delaware, and the parties
hereby consent to the personal jurisdiction of such courts.
C. Assignment;
Successors.
This
Agreement shall not be assignable by either party to any third party without
the
written consent of the other party; except either party may assign this
Agreement, without such consent, to (i) an Affiliate of such party; or
(ii) an entity that acquires all or substantially all of the business or
assets of such party, whether by merger, reorganization, acquisition, sale,
or
otherwise, which agrees in writing to be bound by the terms and conditions
of
this Agreement. The terms and conditions of this Agreement shall be binding
on
and inure to the benefit of the permitted successors and assigns of the
parties.
D. Notice.
Any
notice required to be given pursuant to the provisions of this Agreement shall
be in writing and shall be deemed to have been given at the earlier of the
time
when actually received as a consequence of any effective and verifiable method
of delivery, including, but not limited to, hand delivery, transmission by
telecopier with return acknowledgement of receipt, or delivery by a professional
courier service or the time when actually received by certified or registered
mail addressed to the party for whom intended at the address below or at such
changed address as the party shall have specified by written notice, provided
that any notice of change of address shall be effective only upon actual
receipt.
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(i) If
from
CBL to ChemBridge:
Xxxxxx
Xxxxxxxxx
ChemBridge
Corporation
00000
Xxx Xxxxx, Xxxxx X
Xxx Xxxxx,
XX 00000
(ii) If
from
ChemBridge to CBL:
Cleveland
BioLabs, Inc.
00000
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Attn:
CEO
with
Copy
to
Xxxxxx
Xxxxx Xxxxxx Xxxxx, LLP
000
X. Xxxxx Xx., Xxxxx 0000
Xxxxxxx,
XX 00000
Attn:
Xxxxx X. Xxxxx, Xx.
E. Independent
Contractors.
The
relationship of the parties is that of independent contractors. The parties
are
not deemed to be agents, partners or joint venture partners of the other for
any
purpose as is a result of this Agreement or the transactions contemplated
hereby.
F. Entire
Agreement; Amendment.
This
Agreement constitutes the entire agreement, both written and oral, with respect
to the subject matter hereof, and supersedes all prior or contemporaneous
understandings or agreements, whether written or oral, with respect to such
subject matter. This Agreement may only be amended in a writing signed by both
parties.
G. Headings.
The
captions to the Sections are not a part of this Agreement, but are included
merely for convenience of reference and shall not affect its meaning or
interpretation.
H. Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original and which together shall constitute one instrument.
[The
remainder of this page intentionally left blank]
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IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
dates indicated below.
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CHEMBRIDGE
CORPORATION:
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By:
/s/ Xxxxxx
Xxxxxxxx
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Name:
Xxxxxx
Xxxxxxxx
Title:
Chairman & CEO
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Date: April 27, 2004 | ||
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CLEVELAND BIOLABS, INC.:
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|||
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By:
/s/ Xxxxxxx
Xxxxxxxx
Name:
Xxxxxxx Xxxxxxxx
Title:
CEO
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Date: April 27, 2004 | ||
