Exhibit 10.16
LICENSE AGREEMENT
This Agreement made this 27th day of December, 1995 between MEDICHEM
RESEARCH, INC., 00000 Xx. Xxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 (hereinafter
'MEDICHEM') of the one part and the GOVERNMENT OF SARAWAK, Tingkat 17, Wisma
Bapa Xxxxxxxx, Xxxxx Xxxx 00000 Xxxxxxx, Xxxxxxx, Xxxxxxxx (hereinafter
'SARAWAK') of the other part.
WHEREAS there exists An Agreement between the United States Government
National Institutes of Health (NIH) and SARAWAK related to Calanolide compounds
WHEREAS MEDICHEM is the NIH licensee under U.S. Patent Application Serial
Nos. 07/861,249 and 08/065,618; and Licence is granted by NIH subject to
MEDICHEM entering into this Agreement with SARAWAK
WHEREAS MEDICHEM wishes to obtain an exclusive license for SARAWAK's entire
right, title, and interest relating to the said Calanolide compounds in the
Agreement with NIH;
SARAWAK and MEDICHEM agree as follows:
ARTICLE I DEFINITION
SARAWAK and MEDICHEM mutually agree and declare as follows:
"LICENSED PRODUCT(S)" means tangible materials which, in the course of
manufacture, use, or sale would, in the absence of this Agreement, infringe one
or more claims of NIH Licensed Patent Rights that have not been held invalid or
unenforceable by an unappealed or unappealable judgment of a court of competent
jurisdiction and where applicable, includes Licensed Processes.
"LICENSED PROCESS(ES)" means processes which, in the course of being
practiced would, in the absence of this Agreement, infringe one or more claims
of the Licensed Patent Rights that have not been held invalid or unenforceable
by an unappealed or unappealable judgment of a court of competent jurisdiction.
"NET SALES" means the total gross receipts for sales of Licensed Products
or practice of Licensed Processes by or on behalf of Licensee or its
sublicensees, and from leasing, renting, or otherwise making Licensed Products
available to others without sale or other dispositions, whether invoiced or not,
less returns and allowances actually granted in the normal course of trading,
packing costs, insurance costs, freight out, taxes or excise duties imposed on
the transaction (if separately invoiced), and wholesale and cash discounts in
amounts customary in the trade. No deductions shall be made for commissions paid
to individuals, whether they be with independent sales agencies or regularly
employed by Licensee, or sublicensees, and on its payroll, or for the cost of
collections.
"FIRST COMMERCIAL SALE" means the initial transfer by or on behalf of
Licensee or its sublicensees of Licensed Products or the initial practice of a
Licensed Process by or on behalf
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of Licensee or its sublicensees in exchange for cash or some equivalent to which
value can be assigned for the purpose of determining Net Sales.
EAST ASIA REGION
China Laos
Korea Malaysia
Japan Singapore
Hong Kong The Philippines
Macau Brunei
Taiwan Indonesia
Myanmar (Burma) Papua New Guinea
Thailand Cambodia
Vietnam
Licensed Territory - Worldwide
ARTICLE II LICENSE GRANT
SARAWAK hereby agrees to the grant of License by NIH to MEDICHEM to make,
have made, use and sell License Product in the Licensed Territory under any
right, title or interest that SARAWAK may have related to the Licensed Product.
MEDICHEM shall, subject to the conditions stipulated in this Agreement, have the
right to grant sublicences.
ARTICLE III PAYMENTS
MEDICHEM agrees to pay to SARAWAK a noncreditable, nonrefundable license
issue royalty for the manufacturing and sale of Licensed Products in the amount
of SIXTEEN THOUSAND
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SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS (US$16,667.00) according to the
following payment schedule:
A. FIVE THOUSAND U.S. DOLLARS (US$5,000.00) within thirty (30) days from
the Effective Date of this Agreement; and
B. ELEVEN THOUSAND SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS
(US$11,667.00) within one (1) year from the Effective Date.
MEDICHEM agrees to pay to SARAWAK a nonrefundable minimum annual royalty
according to the following schedule:
A. ONE THOUSAND SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS (US$1,667.00)
beginning in 1996.
B. THREE THOUSAND THREE HUNDRED AND THIRTY THREE U.S. DOLLARS
(US$3,333.00) for 1998 and subsequent years.
MEDICHEM agrees to pay SARAWAK earned royalties on Net Sales as follows:-
ONE AND ONE- THIRD PERCENT (1.33%) of Net Sales by Licensee or an Affiliate of
Licensee of all Licensed Products manufactured or sold in the Licensed
Territory;
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except the royalty in the East Asia Region shall be two percent (2%) of Net
Sales.
MEDICHEM agrees to pay SARAWAK Sublicensing Royalties as follows:
ONE AND ONE-THIRD PERCENT (1.33% of Net Sales by Sublicensee, or an Affiliate of
Sublicensee of all Licensed Products manufactured and sold in the Licensed
Territory (except for the East Asia Region, the royalties rate shall be two per
cent (2.0%) of Net Sales) PLUS Six and Two-Thirds percent (6.6%) of the value of
any consideration received or receivable by MEDICHEM in granting the sublicense.
MEDICHEM agrees to pay SARAWAK benchmark royalties as follows:
A. EIGHT THOUSAND THREE HUNDRED AND THIRTY THREE U.S. DOLLARS (US$8,333.00)
upon filing of an IND application in the United States; and
B. SIXTEEN THOUSAND SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS (US$16,667.00)
upon completion of Phase I and initiation of Phase II clinical trials; and
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C. THIRTY-THREE THOUSAND THREE HUNDRED AND THIRTY THREE U.S. DOLLARS
(US$33,333.00) upon completion of Phase II and initiation of Phase III
clinical trials; and
D. SIXTY-SIX THOUSAND SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS
(US$66,667.00) upon filing of a NDA application or equivalent in the United
States, Europe or Japan.
One Hundred percent (100%) of such benchmark royalty payments actually made
to SARAWAK may be credited against earned royalties due above.
MEDICHEM agrees with SARAWAK that the computation of Net Sales shall be
based on the sale price of the Licensed Products published from time to time by
MEDICHEM as the selling price of the Licnesed Products to MEDICHEM's Licensed or
Sub-Licencees, and the published Sale Price shall be made available to SARAWAK
upon request by the latter.
ARTICLE IV CONTINUATION OF PAYMENT
Royalty payments hereunder shall be made in U.S. dollars within thirty days
from the end of each calendar year throughout the period of validity of this
Agreement. The payment shall be accompanied with a statement of accounts duly
certified by auditors of MEDICHEM sufficient to determine how the royalty
payment was determined or assessed.
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SARAWAK shall have the right to inspect and audit MEDICHEM's accounting,
sales and other records to the extent necessary to determine or assess royalties
due hereunder. SARAWAK shall pay the expenses of any such inspection of audits.
ARTICLE V TERM AND TERMINATION
1. TERM. Except as otherwise provided in this Agreement, this Agreement
shall terminate with the expiration of the period of validity of NIH patent
covering Licensed Product.
2. TERMINATION. MEDICHEM may terminate this Agreement during the term of
the license granted for any reason by giving SARAWAK ninety (90) days prior
written notice, in which case the license granted pursuant to Article II shall
also terminate. MEDICHEM agrees on termination to discontinue use, manufacture,
and sale of Licensed Product for which MEDICHEM was obligated to pay just prior
to such termination and account for the stocks of any products manufactured from
the Licensed Products. Such stocks shall be sold or disposed of under the
supervision of or with the agreement of SARAWAK and the proceeds derived
therefrom, after deducting the costs of such sale, be shared by MEDICHEM and
SARAWAK equally.
3. OBLIGATIONS UPON TERMINATION. MEDICHEM shall be liable for all royalty
payments due to SARAWAK during the ninety (90) days notice period.
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4. TERMINATION FOR DEFAULT. Either party may terminate this Agreement on
written notice to the other party, effective immediately, if any of the
following events of default should occur and not be cured within sixty (60) days
after written notice from the Notifying party describing the default:
(i) the material failure of the notified party to meet its obligations
hereunder; or
(ii) the filing by or against SARAWAK or MEDICHEM of a petition under
any bankruptcy or insolvency law, an assignment for the benefit of MEDICHEM's
creditors or the appointment of a receiver for substantially all of MEDICHEM's
property. Such termination shall be without prejudice to any rights or remedies
which the non-defaulting party hitherto may have against the party in default,
for any breach of this Agreement.
ARTICLE VI WARRANTIES; DISCLAIMERS; INDEMNIFICATION
1. Each party represents and warrants to the other party that it has no
pre-existing contractual or other obligations to any third party which preclude
it from entering into this Agreement and meeting its obligations hereunder, or
which conflict with any provision of this Agreement.
2. Each party shall have the status of an independent contractor without
the authority legally to bind the other party, its officers, directors or
employees. This Agreement shall not
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be deemed to have created any partnership between the parties hereto in relation
to any of the matters contained in this Agrement.
ARTICLE VII TRAINING SARAWAK PERSONNEL
MEDICHEM agrees to train, or to provide scientific training for, two (2)
SARAWAK designated scientists in technology related to the synthesis of
Calanolide compounds at MEDICHEM's Lemont, Illinois facilities for up to one
year. SARAWAK will pay for all transportation, compensation and living expenses
for such scientists. It is acceptable to MEDICHEM if the SARAWAK scientists
participate in clinical trials, if this participation is approved by the
institution where the clinical trials are carried out.
ARTICLE VIII MISCELLANEOUS
1. GOVERNING LAW. This Agreement shall be deemed made in and construed in
accordance with the law of England.
2. ACTIONS SURVIVE. All causes of action accruing to either party under
this Agreement shall survive termination for any reason, as shall those
provisions which expressly state such survival unless such survival is
conditional and the requisite conditions(s) has been fulfilled prior to or on
such termination.
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3. ENTIRE AGREEMENT. This Agreement constitutes the only and entire
understanding between the parties concerning its subject matter.
4. AMENDMENTS. This Agreement may be amended or modified only in writing
signed by both parties.
5. ARBITRATION. All disputes which arise out of this Agreement shall be
settled by arbitration in accordance with the conciliation and arbitration rules
and regulations of the International Arbitration Centre in England to which the
parties hereto submit. The arbitrator shall have background and expertise
relating to the issue(s) involved. The arbitration shall be in a mutually agreed
location and the UNCITRAL (United Nations Commission on International Trade
Laws) rules shall apply to such arbitration. The parties shall share equally the
fees and expenses of the arbitration. The arbitrator's decision shall be
binding, final and non-appealable.
6. FORCE MAJEURE. If either party is prevented from performing any
obligation hereunder by reason of fire, explosion, strike, labor dispute,
casualty, accident, lack or failure of transportation facilities, flood, war,
civil commotion, acts of God, or any law, order or decree of any government or
subdivision thereof, then such party shall be excused from performance hereunder
to the extent and for the duration of such prevention, provided that such party
first notifies the other party in writing of such prevention.
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7. PUBLICITY. Except as required by law or applicable stock exchange
rule, no public statements shall be made by either party concerning this
Agreement, its subject matter or its existence without prior consultation with
and the approval of the other party.
8. SEVERABILITY. In the event that any provision of this Agreement shall
be found to be illegal, invalid or unenforceable for any reason, such shall not
affect the validity of the remainder of this Agreement, which shall be construed
and interpreted as though such provision was not present.
9. NOTICES. Notices may be given to an officer of a party by
(i) personal delivery,
(ii) telex or facsimile transmission, or
(iii) first class, registered mail addressed as follows:
If to MEDICHEM: President
00000 Xxxxx Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
If to SARAWAK: State Financial Secretary
Pejabat Setiausaha Kewangan Negeri
Tingkat 17
Wisma Bapa Malaysia
Petra Jaya 93502 Kuching
Sarawak, Malaysia
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Notice given under (i) above shall BE deemed given on the date of delivery
and if given under (ii) shall be deemed to have been received 24 hours after the
time of transmission. Notice under (iii) above shall be deemed given on the
second week after that on which the letter is mailed. .
10. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding on each party's successors in interest and assigns.
11. ASSIGNMENT. Except as otherwise contemplated by this Agreement, either
party may with the prior written consent of the other, assign this Agreement
only in connection with the sale or disposition of the entire business of such
party or that portion to which this Agreement pertains.
12. SUB-LICENCE. MEDICHEM may grant a sub-license to any third party,
subject to the assignee agreeing to the payment of royalty stipulated in Article
III hereinabove.
13. In the event MEDICHEM has no further interest in any LICENSED PRODUCT,
MEDICHEM shall notify SARAWAK and SARAWAK shall have whatever right, title and
interest it had in the LICENSED PRODUCT and MEDICHEM may be willing to negotiate
the availability of MEDICHEM's data under terms to be agreed upon.
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IN WITNESS WHEREOF, this Agreement has been executed in duplicate originals
on behalf of the parties by their below authorized officers as of the date first
written above. This Agreement is effective on the date that the Government of
Sarawak approves the Agreement.
MEDICHEM RESEARCH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Its: President
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Date: January 25, 1996
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GOVERNMENT OF SARAWAK
By: /s/ [ILLEGIBLE]
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Its: STATE SECRETARY, SARAWAK
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Date: FEBRUARY 24, 1996.
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