Exhibit 10.9
RESEARCH, DEVELOPMENT
AND OPTION AGREEMENT
THIS RESEARCH, DEVELOPMENT AND OPTION AGREEMENT
("Agreement") is made this 25th day of August, 1994, by and among
EDENLAND INC., a corporation organized and existing under the
laws of the State of Delaware ("Developer"), XXXXXXX X.
XXXXXXXXXXX, an individual ("Chief Scientist"), HOLMEDCO
PHARMACEUTICALS CORPORATION, a corporation organized and existing
under the laws of the State of Delaware ("Funder"), and, only for
purposes of Section 3.3 of this Agreement, XXXXXXX X. XXXXXX
("Xxxxxx"). Capitalized terms shall have the meanings given them
in Section 1 of this Agreement.
R E C I T A L S
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A. The Chief Scientist has made certain novel
discoveries which have led to the development of a non-HIV based
Anti-Serum capable of binding the HIV virus and removing it from
the blood stream.
B. The Chief Scientist has assigned, for the
duration of this Agreement and through Developer's affiliated
companies, to Developer all his rights to the Patent Rights,
Know-How and Background Technology upon which the Anti-Serum is
based.
C. Developer, in turn, pursuant to this
Agreement and on the conditions outlined herein, together with a
License Agreement of even date, grants an exclusive, worldwide
license to Funder to commercialize and exploit the Patent Rights,
Know-How and the Background Technology and to practice the
Licensed Process in the Territory in accordance with the terms
and conditions of the License Agreement.
D. Funder desires to fund the further research
and development of the Anti-Serum by the Developer on the terms
and conditions set forth in this Agreement.
E. Funder further desires to acquire an
exclusive option to fund the research and development of any New
Products conceived or developed by Developer and to make such New
Products and the Patent Rights, Know-How and Background
Technology relating to such New Products subject to the License
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS
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For purposes of this Agreement the following
definitions shall be applicable:
1.1. "ABSTRACT" shall mean that certain official
abstract prepared for the 9th Mediterranean Congress of
Chemotherapy entitled "Clinical Trial for the Safety and
Effectiveness of HIV Reactive, Immunoaffinity Purified Anti-Human
Alpha Fetoprotein in Patients with HIV Infections," as attached
in Appendix B.
1.2. "AFFILIATE" means (a) any company owned or
controlled to the extent of at least fifty percent (50%) of its
issued and voting capital stock by a party to this Agreement and
any other company so owned or controlled (directly or indirectly)
by any such company or the owner of any such company, or (b) any
partnership, joint venture or other entity directly or indirectly
controlled by, controlling, or under common control of, to the
extent fifty percent (50%) or more of voting power (or otherwise
having power to control its general activities), a party to this
Agreement, but in each case only for so long as such ownership or
control shall continue.
1.3. "ANTI-SERUM" means the anti-serum derived
from the Existing Patent Rights, Know-How and Background
Technology which is referenced in the Abstract and any other
product for human and/or animal therapeutic or prophylactic use,
now or hereafter developed by Developer, which is derived (or
capable of being derived) from or incorporates any of the
Existing Patent Rights, Know-How or Background Technology upon
which the anti-serum is based.
1.4. "BACKGROUND TECHNOLOGY" shall have the
meaning given that term in the License Agreement.
1.5. "DAMAGES" shall have the meaning given that
term in Section 8 below.
1.6. "DETERMINATION OF PRODUCT REJECTION" means a
good faith and reasonable determination by two out of three
independent FDA consultants, one each appointed by Funder and
Developer and the third appointed by mutual consent of Funder and
Developer, that the Subject Product will not be able to meet the
FDA requirements for Product Approval.
1.7. "DEVELOPMENT COSTS" means Developer's costs
and expenses related to the development, research (including
process research and patents) and testing of any Subject Product
or any New Product, in each case determined according to the
categories and criteria set forth pursuant to Appendix A attached
hereto and made a part hereof.
1.8. "DEVELOPMENT PLAN" means (a) the preclinical,
clinical and process development program and budget of estimated
Development Costs through to a stage of development that
demonstrates the toxicity and safety profile and also indicates
potential efficacy in Phase II (U.S. FDA) patient studies for the
Anti-Serum to be agreed upon by Developer and Funder as soon as
practicable after the execution of this Agreement, together with
such further modifications as shall be mutually agreed upon
between Funder and Developer, and (b) any subsequent Development
Plans (comparable in scope and content to the plan for the
Anti-Serum) for any New Product as agreed upon between Funder and
Developer pursuant to Section 4.1 hereof.
1.9. "EXISTING PATENT RIGHTS" shall have the
meaning given that term in the License Agreement.
1.10. "FDA" means the United States Food and
Drug Administration, or any state governmental agency in the
United States that may also have jurisdiction over the drug
approval process in conjunction with the United States Food and
Drug Administration or any governmental agency performing similar
functions in any country within the Territory; provided, if the
governmental agency is outside the United States, it shall only
be considered an "FDA" for purposes of this definition if the
approval by such agency will allow Funder to exploit and
commercialize a sizeable and profitable market segment.
1.11. "INTELLECTUAL PROPERTY" means any
invention, modification, discovery, design, development,
improvement, process, software program, work of authorship,
documentation, formula, data, technique, know-how, secret or
other intellectual property whatsoever or any interest therein
(whether or not patentable or registrable under copyright or
similar statutes or subject to analogous protection) that relates
to any Subject Product being developed by Developer under this
Agreement, BUT EXCLUDING any (i) trademarks or (ii) the
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manuscript currently being completed on the life of the Chief
Scientist or any film, documentary or copyright relating to such
manuscript or any future additions of a similar manuscript.
1.12. "KNOW-HOW" shall have the meaning given
that term in the License Agreement.
1.13. "LICENSE AGREEMENT" means the License
Agreement of even date herewith among the parties.
1.14. "LICENSED PROCESS" shall have the
meaning given that term in the License Agreement.
1.15. "NEW PRODUCT" means any new
pharmaceutical or medical product or process conceived or
developed by Developer, Chief Scientist or any of their
Affiliates, or any person acting under the direction of
Developer, Chief Scientist or any of their Affiliates, whether
conceived or developed prior to or during the term of this
Agreement.
1.16. "OFF BUDGET PROJECTS" shall have the
meaning given that term in Section 5.3 below.
1.17. "OPTION" shall have the meaning given
that term in Section 4.1 below.
1.18. "PLA" means a Product License
Application or such other application as shall be required to
obtain Product Approval.
1.19. "PLA SUBMISSION" means the submission to
the FDA by Funder of a PLA which has been prepared in good faith
by Funder in a reasonable manner to comply with FDA requirements
necessary to obtain Product Approval.
1.20. "PATENT RIGHTS" shall have the meaning
given that term in the License Agreement.
1.21. "PRODUCT APPROVAL" means final FDA
approval to market commercially the specified product for use by
humans or animals.
1.22. "SUBJECT PRODUCT" means the Anti-Serum
and any New Product for which Funder has exercised its Option
under Section 4.1 or its option under Section 5.5. The Anti-Serum
shall be the initial Subject Product.
1.23. "TERRITORY" means the world.
1.24. "THIRD PARTY LICENSE" shall have the
meaning given that term in Section 5.5.
1.25. "UNIVERSITY" means Louisiana State
University.
2. DEVELOPER AND CHIEF SCIENTIST REPRESENTATIONS AND
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WARRANTIES. Developer and Chief Scientist, jointly and
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severally, hereby represent and warrant to Funder as
follows:
2.1. CORPORATE POWER AND AUTHORITY; DUE
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AUTHORIZATION; BINDING OBLIGATION. Developer has the corporate
---------------------------------
power and authority to execute and deliver this Agreement and the
License Agreement and perform its obligations hereunder and
thereunder, and the execution, delivery and performance of this
Agreement and the License Agreement have been duly and validly
authorized by Developer, and upon execution and delivery by
Funder, this Agreement and the License Agreement will constitute
valid and binding agreements of Developer and Chief Scientist
enforceable against them in accordance with their respective
terms.
2.2. INCORPORATION OF REPRESENTATIONS AND
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WARRANTIES IN LICENSE AGREEMENT. The representations and
-------------------------------
warranties set forth in Sections 4.1 and 4.2 of the License
Agreement are incorporated by this reference as if made herein.
3. FUNDER AND XXXXXX REPRESENTATIONS AND WARRANTIES.
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Funder hereby represents and warrants to Developer as follows in
Sections 3.1, 3.2 and 3.3, and Xxxxxx hereby represents and
warrants to Developer as follows in Section 3.3:
3.1. CORPORATE POWER AND AUTHORITY; DUE
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AUTHORIZATION; BINDING OBLIGATION. Funder has the corporate power
---------------------------------
and authority to execute and deliver this Agreement and the
License Agreement and perform its obligations hereunder and
thereunder, and their execution, delivery and performance have
been duly and validly authorized by Funder, and upon execution
and delivery by Developer and Chief Scientist, this Agreement and
the License Agreement will constitute valid and binding
agreements of Funder enforceable against it in accordance with
their respective terms.
3.2. NO BREACH OF THIRD PARTY AGREEMENTS; NO
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CONSENTS REQUIRED. Neither the execution and delivery of this
-----------------
Agreement or the License Agreement, nor consummation of the
transactions contemplated hereunder or thereunder, requires
Funder to obtain any permits, authorizations or consents from any
governmental body (except for health approvals or governmental
registrations necessary to sell the products contemplated
therein) or from any other person, firm or corporation, and such
execution, delivery and consummation will not result in the
breach of or give rise to any termination of any agreement or
contract to which Funder may be a party.
3.3. NO UNDISCLOSED PRINCIPALS OR OTHER PARTIES.
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In connection with the negotiation, execution and delivery of
this Agreement or the License Agreement, Funder and Xxxxxx have
not acted, and are not acting, on behalf of any third party or
pursuant to any written agreement with any third party.
4. FUNDER OPTIONS; FIRST OFFER.
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4.1. NEW PRODUCTS. Developer hereby grants to
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Funder the exclusive option (the "Option") during the term of
this Agreement to acquire exclusive worldwide rights to any and
all of Developer's New Products and to the Patent Rights,
Know-How and Background Technology from which such New Product is
derived, all of which rights may be exercised and used in
accordance with the License Agreement. The Option may be
exercised in accordance with this Section 4.1.
At such time as Developer identifies any
New Product, Developer shall give Funder, on a confidential
basis, a summary of available material Know-How (reasonably
necessary for Funder to make a reasonable scientific and
technical evaluation for the purpose of exercising the Option
hereunder) regarding such New Product. Developer shall promptly
prepare and submit to Funder a reasonable Development Plan
including a reasonable budget of estimated Development Costs
through to a stage of development that demonstrates the toxicity
and safety profile and also indicates potential efficacy for such
New Product in Phase II patient studies. Such Development Plan
shall be consistent in scope and content with the Anti-Serum
Development Plan and, together with such modifications as shall
be mutually agreeable, shall be reasonably agreed upon by the
parties as soon as reasonably practicable after delivery of the
Know-How for the New Product to Funder. Any disputes concerning
the content of the Development Plan shall be submitted to
arbitration in accordance with the provisions of Section 11.8
below.
At any time during the six (6) month
period following agreement of the content of the Development Plan
by Developer and Funder, Funder shall notify Developer whether
Funder wishes to exercise its Option hereunder with respect to
such New Product; provided, however, the exercise period shall be
one (1) year if the New Product is presented to Funder prior to
obtaining the funding contemplated under Section 10. Upon
exercise of the Option, (i) the New Product shall be
automatically included within the definition of "Product" under
the License Agreement, (ii) the Patent Rights, Know-How and
Background Technology from which the New Product was derived
shall also become subject to the License Agreement, and (iii) the
New Product shall become a Subject Product for purposes of this
Agreement. If Funder, within said six (6) month period (or one
(l) year period if the New Product is presented to Funder prior
to obtaining the Funding contemplated under Section 10) shall
decline to exercise its Option or shall fail to respond to
Developer, Developer may develop such New Product itself subject
to the limitations under Section 4.2.
4.2. LIMITATION ON MARKETING OF NEW PRODUCTS.
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Notwithstanding any provisions of Section 4.1 to the contrary,
Developer shall not market, directly or through any arrangement
or contract with any third party, any New Product for which
Funder has declined to exercise its Option under Section 4.1
unless (i) such New Product shall not directly compete with any
then existing Subject Product, and (ii) such New Product is not
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based upon or derived from any Patent Rights, Know-How or
Background Technology then under license to Funder under the
License Agreement or any other agreement with Funder.
4.3. COVENANT OF CHIEF SCIENTIST. Chief Scientist
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hereby
covenants and
agrees for the
benefit of
Funder that the
exclusive
commercializati
on and
exploitation
rights to all
New Products he
develops or
conceives shall
be held by
Developer
during the term
of this
Agreement
except with
------
respect to New
Products (i)
that Funder
declines to
develop
pursuant to its
Option under
Section 4.1 and
(ii) that
Funder does not
exercise its
option under
Section 5.5.
Chief Scientist
shall execute
all such
documents and
take all other
actions
necessary to
effect such
covenant.
5. RESEARCH AND DEVELOPMENT.
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5.1. DEVELOPER DEVELOPMENT EFFORTS. Developer
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shall use its best efforts to carry out the Development Plan for
each Subject Product in accordance with each such Development
Plan and within all agreed upon timetables therein. Any material
change in any Development Plan shall require the prior mutual
agreement of Developer and Funder. Developer and Funder recognize
that changes or modifications in each Development Plan (including
estimated budgets) will, in all likelihood, be required, and each
agrees to negotiate in good faith and in a reasonable manner to
reach agreement for any such changes or modifications. Developer
shall be solely responsible for the conduct of all phases of each
Development Plan, including but not limited to clinical trials
specified therein. Developer agrees that each person performing
work under the Development Plan will have executed a
confidentiality and developments agreement, in a form
satisfactory to Funder, to ensure that all Intellectual Property
arising from the development of the Subject Product shall vest in
Developer for license under the License Agreement and that the
Know-How relating to such New Product remains confidential and is
not used in violation of this Agreement or the License Agreement.
5.2. FUNDING OF ANTI-SERUM DEVELOPMENT COSTS.
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Subject to Funder's development termination right under Section
5.5 below, Funder agrees to pay Developer for its Development
Costs for the Anti-Serum, provided such Development Costs shall
in no event be greater than the total estimated Development Costs
contained in the Anti-Serum Development Plan. Payment of
$3,000,000 in Development Costs for the Anti-Serum shall be made
in U.S. dollars from a location in the U.S. and in accordance
with the following schedule:
(a) $1,500,000 on February 28,
1995, or at such earlier time as Funder has secured the funding
described in Section 10 of this Agreement.
(b) $1,000,000 upon completion of
the first phase of the Development Plan as identified therein
(such phase not to be confused with FDA regulatory phases).
(c) $500,000 upon completion of
the second phase of the Development Plan and commencement of the
third phase.
The parties understand that any
Development Costs incurred by Developer prior to payment of the
amount due under subsection (a) above shall be reimbursed from
the $3,000,000 in Development Costs to be paid under this Section
5.2. Further, funder agrees to make the scheduled payments in
subsection (b) and (c) above on the last day that such payments
may be made even if the payment condition has not been satisfied
if Developer has in good faith made progress on the Development
Plan through such date.
The parties acknowledge that the research and
development costs of the Anti-Serum may overlap with the
development of a vaccine based upon the Anti-Serum. The parties
will in good faith discuss the development of the vaccine under
this Agreement.
5.3. OFF BUDGET PROJECTS. It is contemplated by
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the parties that Developer and Chief Scientist may have certain
projects ("Off Budget Projects") not covered by a Development
Plan for a Subject Product that Developer and Chief Scientist
believe would aid their research on a Subject Product or
potential New Product. These projects might include a preliminary
in-vitro experiment to determine if a foundation exists for a New
Product. Until such time as Funder's commitment under Section 5.8
terminates, Funder agrees to provide up to a maximum of $250,000
per year to fund Off-Budget Projects.
5.4. FUNDING OF DEVELOPMENT COSTS OF OTHER SUBJECT
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PRODUCTS. Subject to Funder's development termination right
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under Section 5.5 below, Funder agrees to pay Developer for its
Development Costs (determined in accordance with Appendix A) for
each Subject Product, provided such Development Costs shall in no
event be greater than the total estimated Development Costs
(excluding the Anti-Serum for which the Development Costs will be
paid as provided in Section 5.2 above) contained in the
appropriate Development Plan as agreed upon between Developer and
Funder. Based on the estimated annual budgets in the Development
Plan for each Subject Product (excluding the Anti-Serum for which
the Development Costs will be paid as provided in Section 5.2
above), Funder shall make quarterly payments, payable in U.S.
dollars from a U.S. location on the first day of each quarter,
for estimated Development Costs to be incurred by Developer for
the ensuing quarter. Within thirty (30) days after the end of
each calendar quarter Developer shall prepare and send to Funder
(i) an invoice of actual Development Costs incurred by Developer
during the preceding calendar quarter and (ii) a reconciliation
with the estimated quarterly payment made by Funder at the
beginning of such quarter. In the event Funder's estimated
payments for such quarter shall be greater than the actual
invoiced amount, such overpayment shall be applied by Funder
against subsequent quarterly payments of estimated Development
Costs due to Developer or, at Funder's option, Developer shall
remit such overpayment to Funder. In the event the actual
Development Costs for any quarter shall be greater than Funder's
estimated quarterly payment for such quarter, subject to the
first sentence of this Section 5.4, Funder shall make appropriate
payment to Developer within thirty (30) days of the receipt of
Developer's invoice.
5.5. FUNDER'S RIGHT TO TERMINATE OBLIGATION TO PAY
---------------------------------------------
DEVELOPMENT COSTS. At any time after payment of the $3,000,000 of
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Development Costs for the Anti-Serum as provided in Section 5.3
above, and provided Funder has made a Determination of Product
Rejection, Funder shall have the right to terminate its
obligation to pay any further Development Costs of the Anti-Serum
by delivering a written notice to Developer. Further, by
delivering written notice to Developer, Funder shall have the
right to terminate its obligation to pay further Development
Costs on any other Subject Product at such time as Funder has
made a Determination of Product Rejection for such Subject
Product. Upon any such termination, Developer may continue the
development of the Subject Product by itself or by licensing or
sublicensing the commercialization rights to a third party
("Third Party License"); provided, Developer shall keep Funder
fully apprised of the negotiations of any proposed Third Party
License; provided, further, before Developer enters into the
Third Party License, Developer shall allow Funder fourteen (14)
calendar days (or thirty (30) days if Developer has not kept
Funder fully apprised of the negotiations for such Third Party
License) the first right to enter into a license with Developer
on the identical terms as proposed in the Third Party License. If
Funder does not exercise such option, Developer shall have the
right to enter into the Third Party License (but on no more
favorable terms than offered to Funder) but shall reimburse
---
Funder for all Development Costs paid by Funder for such product.
Developer shall make the reimbursement by paying directly to
Funder fifty percent (50%) of license fees, royalties and other
payments due Developer under the Third Party License (until the
total amount to be reimbursed is paid to Funder).
If Developer obtains Product Approval
itself for such Subject Product, Developer shall notify in
writing Funder of the Product Approval, whereupon Funder shall
have the option, exercisable within three months of receiving
notice of Product Approval from Developer, to pay all Development
Costs for the Subject Product incurred after Funder stopped
paying such costs and thereby continue to have (i) the Subject
Product be considered a Product under the License Agreement, and
(ii) the Patent Rights, Know-How and Background Technology from
which the Subject Product was derived subject to the License
Agreement.
5.6. DISCLOSURE OF KNOW-HOW. Developer shall
-----------------------
disclose to Funder within 30 days after the date of execution of
this Agreement and thereafter on at least a quarterly basis all
Know-How on each Subject Product not previously disclosed to
Funder. All Know-How disclosed to Funder shall be subject to the
provisions of Section 7 hereof.
5.7. AUDIT OF DEVELOPMENT COSTS. Developer shall
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keep full and accurate books and records of its Development Costs
and determination thereof. Developer shall permit Funder, at
Funder's expense, by independent certified public accountants
employed by Funder solely for this purpose and reasonably
acceptable to Developer, to examine such books and records (as
they relate to Development Costs) at any reasonable time, but not
later than three (3) years following the invoice to Funder of
such Development Costs.
5.8. COMMITMENT TO R & D FUNDS. Subject to the
--------------------------
limitations set forth herein, commencing February 28, 1995,
Funder agrees to commit at least thirty percent (30%) of its
research and development budget, but at least a minimum of
$2,000,000 (not based on a percentage of Funder's research and
development budget), for any given calendar year to pay
Development Costs for Subject Products. Funder's commitment under
this Section 5.8 shall be limited in the following ways:
(a) The Subject Products, together
with New Products, each of which New Products Funder reasonably
and in good faith determines represents a promising
pharmaceutical agent with significant commercial value, shall be
sufficient to allow Funder to make such commitment.
(b) The maximum amount of research
and development funds which Funder shall be required to commit
for any given year shall be $10,000,000.
(c) The maximum amount of research
and development funds which Funder shall be required to commit
during the term of this Agreement shall be $50,000,000 unless
otherwise agreed to by Developer and Funder. In making a decision
to increase the maximum amount, Funder shall give consideration
to the success of the Anti-Serum and any other Subject Products
and Developer's history of meeting the Development Plans for
Subject Products. Further, in good faith both Funder and
Developer will consider reestablishing research and development
funds up to a maximum of another $50,000,000.
(d) Funder's obligation under this
Section 5.8 shall terminate twenty-four months after the death or
permanent incapacity of the Chief Scientist.
(e) All payments toward the
Anti-Serum Development Costs made by Funder during 1994, if any,
shall be applied toward Funder's commitment for 1995.
In the event that the maximum commitment
under subsection (c) above is reached and Funder does not commit
additional funds to Developer under this Section 5.8, the
exercise period for Funder's Option under Section 4.1 shall be
reduced to three (3) months.
6. REGULATORY MATTERS.
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6.1. COMPLIANCE. Developer and the Chief Scientist
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each agree that its and his conduct in performing their
respective obligations under this Agreement shall conform in all
material respects to all applicable laws and regulations of the
US. and foreign governments (and political subdivisions thereof).
7. PROPRIETARY RIGHTS AND CONFIDENTIAL INFORMATION.
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7.1. PROPRIETARY RIGHTS. Except as expressly
------------------
provided to the contrary herein or in the License Agreement, all
proprietary rights, title, and interest with respect to New
Products and Subject Products shall be and remain solely in
Developer.
7.2. CONFIDENTIAL INFORMATION. Funder and its
------------------------
Affiliates shall keep confidential and not use, except as
provided herein and in the License Agreement, any and all
Know-How supplied in writing (or if orally, as confirmed in
writing) by Developer during the term of this Agreement and for
five (5) years after termination or expiration hereof; provided,
however, that the foregoing obligations of confidentiality and
non-use shall not apply to the extent that any Know-How is
demonstrated by written records to be (a) already known to Funder
or its Affiliates at the time of disclosure hereunder (provided
Funder and its Affiliates comply with any restrictions imposed by
third parties) or is hereafter developed by Funder or its
Affiliates in the course of work entirely independent of any
disclosure hereunder; or (b) publicly known prior to or after
disclosure hereunder other than through acts or omissions of
Funder or its Affiliates; or (c) disclosed in good faith to
Funder or its Affiliates under a reasonable claim of right of
which Funder is not aware of any dispute (provided Funder and its
Affiliates comply with any restrictions imposed by third
parties). This does not prevent disclosure to third parties by
Funder under a secrecy agreement with essentially the same
confidentiality provisions provided herein in connection with the
exercise of its rights under the License Agreement (to the extent
permitted therein). In addition, disclosure may be made (i) to
governmental agencies to the extent required or desirable to
secure governmental approval for marketing of any Subject Product
(provided Funder shall seek to limit disclosure and to obtain
confidential treatment by such agencies) and (ii) to pre-clinical
and clinical investigators where necessary or desirable for their
information to the extent normal and usual in the custom of the
trade and under a secrecy agreement with essentially the same
confidentiality provisions contained herein. All Know-How
heretofore disclosed in writing by Developer shall be deemed to
have been disclosed under this Agreement and shall be subject to
the provisions of this Section 7.2.
8. INDEMNIFICATION. Each party (the "Indemnifying Party")
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shall indemnify and hold the other (the "Indemnified Party")
harmless against and from all liability, demands, claims, causes
of action, assessments, losses, fines, penalties, costs and
damages and expenses, including reasonable attorneys' fees
(collectively "Damages") sustained or incurred by the Indemnified
Party as a result of, arising out of or by virtue of (x) any
inaccuracy in a representation or breach of a warranty made by
the Indemnifying Party, (y) the failure of the Indemnifying Party
to comply with, or the breach by the Indemnifying Party of, any
of the covenants of this Agreement to be performed by the
Indemnifying Party and (z) any act or omission (including,
without limitation, resulting from clinical trials) of the
Indemnifying Party or its agents or employees related to the
obligations of the Indemnifying Party under this Agreement (but
not under the License Agreement); provided, however, that the
foregoing shall not apply to third party claims (i) if the claim
is found to be based upon the negligence, recklessness or willful
action or inaction of the Indemnified Party, or (ii) if the
Indemnified Party fails to give the Indemnifying Party prompt
notice of any claim it receives and such failure materially
prejudices the Indemnifying Party, or (iii) solely to the extent
of indemnification for legal fees and disbursements of counsel of
the Indemnified Party, unless the Indemnifying Party is given the
opportunity to control defense of such action, or (iv) unless the
Indemnifying Party is given the opportunity to approve any
settlement, which approval shall not be unreasonably withheld;
and provided further that, except in the event of a material
conflict of interest, the Indemnifying Party shall not be liable
for attorney's fees of the Indemnified Party after assuming
control of the defense or settlement. The indemnification
provisions of this Section 8 shall also cover the Indemnified
Party's directors, officers, employees and other agents that may
suffer any Damages.
9. TERM AND TERMINATION.
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9.1. TERM. This Agreement shall be effective as of
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the date first set forth above and shall remain in effect until
termination or expiration of the License Agreement or other
termination pursuant to Sections 9.2 hereof.
9.2. TERMINATION.
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(a) In the event either of
Developer or Chief Scientist materially breaches any term or
provision of this Agreement, Funder may and, in the event Funder
materially breaches any term or provision of this Agreement,
either of Developer or Chief Scientist may, terminate this
Agreement thirty (30) days after giving the breaching party
written notice of such breach, unless: (i) the breaching party
cures the breach within such 30-day period; or (ii) if a cure
cannot reasonably be effected within such 30-day period, the
breaching party commences the cure of such breach within such
30-day period and diligently prosecutes such cure to completion.
This thirty (30) day notice shall not apply to a breach by the
Funder of the failure to meet the terms of Section 5.2(a) of this
Agreement.
(b) This Agreement shall terminate
concurrently with the termination of the License Agreement;
provided, however, the termination of this Agreement shall not
cause the termination of the License Agreement.
(c) Upon termination of this
Agreement, Funder, Developer and Chief Scientist will have no
further rights or obligations under this Agreement, and Funder
will immediately return to Developer all Know-How (unless such
Know-How is subject to the non-exclusive, perpetual license
granted to Funder under Section 9.3 of the License Agreement);
provided, however, Sections 7.2, 8, 11.2 and 11.5 through 11.13,
inclusive, shall survive termination.
10. CONDITIONS TO FUNDER'S OBLIGATIONS. It shall be a
----------------------------------
condition precedent to Funder's payment obligations under this
Agreement that Funder completes by February 28, 1995 an equity
funding of its securities in an amount satisfactory to Funder to
perform its obligations under this Agreement.
11. MISCELLANEOUS.
-------------
11.1. FORCE MAJEURE. No party shall be liable
-------------
for failure to perform any obligations hereunder if such failure
is due to a cause beyond the reasonable control of such party,
including without limitation, strikes, lockouts or other labor
disturbances, riots, floods, fires, accidents, wards, embargoes,
delays of carriers, inability to obtain materials from sources of
supply, acts, or injunctions (each a "Force Majeure Event"). Upon
the occurrence of any Force Majeure Event, the party whose
performance is affected shall immediately given written notice of
such Force Majeure Event to the other, and shall thereafter exert
all reasonable efforts to overcome such Force Majeure Event and
resume performance of this Agreement. If, despite such efforts,
the party whose performance is affected is unable to perform six
(6) months following notification given hereunder, then the other
may terminate this Agreement.
11.2. ASSIGNMENT. Neither Funder nor Developer
----------
may assign this Agreement without the prior consent of the other;
provided, however, (a) Developer or Funder may assign this
Agreement to any entity which acquires substantially all of its
assets or business, and (b) Funder may assign this Agreement, in
whole or in part, to any Affiliate of Funder. No assignment shall
relieve a party of all of its responsibility for performance
under this Agreement.
11.3. ASSUMPTION OF LIABILITIES UPON BUY-OUT.
---------------------------------------
In the event Funder or Developer is acquired by merger, asset
acquisition or stock acquisition, Funder or Developer, as the
case may be, shall take all steps necessary to ensure the
acquirer assumes its respective obligations under this Agreement
and the License Agreement.
11.4. DEVELOPER STATUS. For the purpose of
----------------
carrying out this Agreement Developer and Funder shall act as
independent contractors and not as partners, joint venturers, or
agents of the other and shall not bind nor attempt to bind the
other to any contract or obligation.
11.5. NOTICES. Except as otherwise provided
-------
herein, any notice or other communications sent or delivered
hereunder shall be in writing and shall be effective if
hand-delivered or if sent by certified or registered mail or
postage prepaid or by international courier service:
To Developer: Edenland, Inc.
------------
Xxxxxxx, Xxxxxxxx
Xxxxxx Xxxxxxx, Xxxxxxx
Attention: Xx. Xxx X. Xxxxxxxxxxx
Telephone: 000-0-0000000
To Chief Scientist: Xxxxxxx X. Xxxxxxxxxxx
-------------------
Xxxxxxx, Xxxxxxxx
Xxxxxx Xxxxxxx, Xxxxxxx
Telephone: 000-0-0000000
Telecopier: 000-0-0000000
To Funder: Holmedco Pharmaceuticals Corporation
---------
0000 XX 000xx Xxxxxx
Xxxxxxxxx XX 00000
Attention: Xxxxxxx X. Xxxxxx,
Chairman and CEO
Telephone: 000-000-0000
Telecopier: 000-000-0000
or to such address as any Party shall hereafter designate by
notice to the other Parties. A notice shall be deemed to have
been given on the date of receipt by the Party.
11.6. ENTIRE AGREEMENT. This Agreement
----------------
together with the License Agreement (as well as any other
documents referred to herein or therein) set forth the entire
agreement and understanding among the parties hereto as to the
subject matter hereof and has priority over all documents, verbal
consents or understandings made between Funder and Developer and
Chief Scientist before the conclusion of this Agreement with
respect to the subject matter hereof; none of the terms of this
Agreement shall be amended or modified except in writing signed
by the parties hereto.
11.7. WAIVERS. A waiver by any party of any
--------
term or condition of this Agreement in any one instance or a
number of instances shall not be deemed or construed to be a
waiver of such term or condition for any similar instance or
instances in the future or of any subsequent breach hereof.
11.8. ARBITRATION. The parties to any dispute
------------
or controversy arising out of, in connection with or relating to
this Agreement, its negotiation, performance or breach, shall
attempt to resolve any such dispute in an amicable manner,
failing which the parties shall submit the same to binding
arbitration. The arbitration panel shall consist of one
arbitrator and shall be formed in accordance with the Rules for
Commercial Arbitration of the American Arbitration Association
then obtaining (the "Rules"). The arbitration shall be held in
the State of Washington pursuant to the Rules, and the award
shall be rendered in such form that judgment may be entered
thereon in the highest court of any forum, state, federal or
foreign, having jurisdiction. The Funder shall pay reasonable
expenses to accommodate the attendance by Chief Scientist and an
Edenland representative at such arbitration. In making its award,
the arbitrator shall be guided, in descending order of priority,
by the terms of this Agreement, the usages of the trade in the
business in which Developer, Chief Scientist and Funder are
engaged and what is just and equitable under the circumstances.
The cost of such arbitration shall be borne by the party against
which an award is rendered in the arbitration proceeding or as
the arbitrator may determine. Notwithstanding anything to the
contrary contained herein, any party may apply to a court of
competent jurisdiction for equitable relief for any breach or
threatened breach of this Agreement, including but not limited to
restraining orders and affirmative injunctive relief, and for
ancillary orders in aid of the arbitrator.
11.9. APPLICABLE LAW. This Agreement shall be
--------------
governed by and construed in accordance with the laws of the
State of Washington without regard to the conflicts of laws
provisions hereof.
11.10. REMEDIES. The rights and remedies of a
---------
party set forth herein with respect to failure of the other to
comply with the terms of this Agreement (including, without
imitation, rights of termination of this Agreement) are not
exclusive, the exercise thereof shall not constitute an election
of remedies and the aggrieved party shall in all events be
entitled to seek whatever additional remedies may be available in
law or in equity; provided, however, no arbitration or legal
recourse shall be available to either party should termination of
this Agreement occur as the result of Funder's inability to
timely meet the funding condition under Section 10 of this
Agreement.
11.11. HEADINGS. Headings in this Agreement are
--------
included herein for ease of reference only and shall have no
legal effect.
11.12. SEVERABILITY. If any provision of this
-------------
Agreement shall be held illegal or unenforceable, that provision
shall be limited or eliminated to the minimum extent necessary so
that this Agreement shall otherwise remain in full force and
effect and enforceable.
11.13. SET-OFF. In the event any party is owed
--------
any sums which are not paid when due under this Agreement, the
License Agreement or agreement or note between the parties, such
party may set-off such amounts against any payments such party
owes to the other party hereunder. Any party exercising its
set-off rights hereunder shall notify the other party promptly
after such exercise. A party may not, however, set-off any
---
amounts that are in dispute between the parties. Such disputed
amounts shall be placed into escrow with a third party escrow
company, reasonably acceptable to the parties, until the dispute
is resolved. If the dispute is resolved favorably to the party
seeking the set-off, such party may effect the set-off upon
release of the escrowed funds.
11.14. FURTHER ASSURANCES. The parties hereto
-------------------
shall execute and deliver or cause to be executed and delivered
such further instruments, documents and conveyances and shall
take such other action as may be reasonably required to more
effectively carry out the terms and provisions of this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above by
their duly authorized officers.
"FUNDER" "DEVELOPER"
HOLMEDCO PHARMACEUTICALS EDENLAND INC.
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxx Xxxxxxxxxxx
------------------------ -------------------------
Its: Chairman & CEO Its: Secretary/Director
-------------------------- -------------------------
Only for Purposes of Section
3.3 of this Agreement
"CHIEF SCIENTIST" "XXXXXX"
/s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxxxxxx X. Xxxxxx
---------------------------- -------------------------------
XXXXXXX X. XXXXXXXXXXX
APPENDIX A
DEVELOPMENT COSTS
-----------------
1. Direct Labor Salaries and Benefits-Compensation
----------------------------------
cost per hour for actual hours worked on approved Funder projects
(supported by time cards). Examples include:
Clinical Research Associates
Technical Writers
Data Entry
Research Scientists (e.g. Toxicologist,
Pathologist)
Regulatory Affairs (e.g. Protocol Writing,
Validation, Clinical Auditing, FDA Meetings)
2. Clinical Grants-Hospital expenses for approved
---------------
studies paid to investigators. (Supported by approved agreements
and expense reimbursements.)
3. Outside Laboratory Testing for approved Funder
--------------------------
projects (supported by contracts and invoices). Examples
include:
Primate study
Primate retreatment study
4. Drug Expenses-Actual cost of drug distributed to
-------------
investigators for use in studies.
5. Scientific Consultants-payments for time and
----------------------
expenses for work done on approved Funder projects (supported by
invoices). Examples include:
Research Grants
Outside Analytical Support
6. Scientific Panels-payments for time and expenses
-----------------
for work on approved Funder projects (supported by invoices).
Examples include:
Infectious Disease Panel
Advisory Panel
7. Other Direct Expenses-directly identifiable to an
---------------------
approved task (supported by invoices or receipts). Examples
include:
Travel
Supplies, printing and duplicating
Testing
Postage, freight
Routine patent maintenance fees and routine
ordinary expenses for outside professional
services for preparation of filing of patent
applications (uncontested) reasonably allocated to
Subject Products.
Insurance
Project Management/Secretarial
APPENDIX B
ABSTRACT
--------
-------------------------------------------------------------
9 Congresso Mediterraneo di Chemioterapia
------------------------------------------------------------
9th Mediterranean Congress of Chemotherapy
------------------------------------------------------------
9me Congres Mediterraneen de Chimiotherapie
------------------------------------------------------------
[LOGO OF MEDITERRANEAN SOCIETY
OF CHEMOTHERAPY]
Milano (Italy) June 12-17, 1994
Please return completed abstract to:
Organizing Secretariat
9th Mediterranean Congress of Chemotherapy
O.I.C. Incentive
OFFICIAL ABSTRACT Xxxxx Xxxxx, 00
00000 XXXXXX (Xxxxx)
CLINICAL TRIAL FOR THE SAFETY AND EFFECTIVENESS OF HIV
REACTIVE, IMMUNOAFFINITY PURIFIED ANTI HUMAN ALPHA FETOPROTEIN IN
PATIENTS WITH HIV INFECTIONS.
XXXXX X. GELDER1,2 AND XXXXXXX PRENDERGAST1,3. Department of
---------------
Surgery, Louisiana Xxxxx Xxxxxxxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx,
XX, XXX; 2Gelco Diagnostics Inc., Shreveport, LA, USA; 3Edenland
Holdings, Ltd., Baybush, Straffin, Ireland.
Functional and immunochemical similarities between human alpha
fetoprotein and external HIV glycoproteins, coat peptides and
glycopeptides have been demonstrated. Both alpha fetoprotein and
specific HIV products reduce prostaglandin synthesis in
macrophages with a concomitant increase in arachidonic acid and
leukotriene production. An enzyme-linked immunoessay with
polyclonal immunoaffinity purified goat anti human alpha
fetoprotein (IP-X-AFP) identified epitopes on HIV-1MN viral
lysate and GP160 but not GP120 glycoproteins suggesting
phylogenetic mimicry. IP-X-AFP inhibited syncytia formation,
prevented HIV-1 laboratory strains MN, RF, and 3B replication in
C8166-45 cells, and inhibited replication of HIV-1BAL in fresh
macrophage cultures in a dose dependent manner. Thirteen
seropositive HIV patients were treated with IP-X-AFP (30 mg per
day by IV infusion) on days 0, 2, 4, 6, and 8 with no overt toxic
reactions. However, chills and fever (101 degrees F) of short
duration (<3 hour) consistent with a mild systemic Arthus reaction
was observed in one patient. Laboratory measurements including viral
load by TCID50, and lymphocytes sub-population quantification
(CD3, CD4, and CD8) were obtained before IP-X-AFP and post-
administration at 1, 6, 12, and 22 hours and at 4, 7, 14, 28, 42,
90, and 120 days. The mean viral load in the 13 pateints was
reduced from a pre-treatment value of 1811 to 577 at day 120.
All 13 patients obtained a one log or greater reduction in viral
load following therapy. Four of the 13 pateints obtained
repeated viral load values of 0, 4 patients obtained low but
stable viral load values, while 5 patients demonstrated a
reduction then gradual increase in viral load to near pre-
treatment values. A sharp increase in viral load was observed
between IP-X-AFP administration and day 21 post administration,
presumable representing lysis of infected lymphocytes with virus
release. At 120 days CD4 counts increased above pre-treatment
values an average of 25% in all patients. In addition, all cases
of hairy leukoplakia (n=3) clinically improved. These results
demonstrate that IP-X-AFP may be of significant clinical value in
the treatment of HIV infections by reducing viral load and
allowing immunological recovery.
AMENDMENT NO. 1 TO
RESEARCH, DEVELOPMENT AND OPTION AGREEMENT
This Amendment is made as of this 5th day of February
1995, by and between EDENLAND INC., a Delaware corporation
("Developer"), XXXXXXX X. XXXXXXXXXXX, an individual ("Chief
Scientist"), and XXXXXX-XXXX, INC., a Delaware corporation
(formerly Holmedco Pharmaceuticals Corporation) (the "Funder").
W I T N E S S E T H:
--------------------
WHEREAS, Developer, Chief Scientist and Funder are
parties to that certain Research, Development and Option
Agreement dated August 25, 1994 ("Agreement").
WHEREAS, Developer, Chief Scientist and Funder desire
to amend the Agreement in the manner set forth herein.
NOW, THEREFORE, in consideration of the premises, the
provisions and the respective agreements hereinafter set forth,
the parties hereby agree as follows:
1. Section 5.2 of the Agreement is hereby deleted and
replaced with the following Section 5.2:
"5.2. Development of Anti-Serum; Funding
----------------------------------
of Anti-Serum Development Costs. Developer agrees to
-------------------------------
obtain an open IND for the Anti-Serum with the United
States Food and Drug Administration and to commence a
twenty patient, phase I investigational new drug study
(the "Phase I Study") under the guidelines and
regulations of that regulatory agency. Funder agrees to
pay Developer for the Phase I Study as follows:
(a) U.S. $250,000 due March 31, 1995
and payable no later than April 30, 1995.
(b) U.S. $2,750,000 in stages mutually
agreed by Funder and Developer and in
accordance with the funding available to
Funder over the eighteen (18) months
following March 31, 1995.
Funder shall pay any additional Development
Costs on the Anti-Serum beyond the amounts
set forth in subsections (a) and (b) above
only if Funder, in its sole discretion,
determines that the results of the Phase I
Study demonstrated sufficient efficacy to
warrant advancement of the Anti-Serum to
phase II studies (the "Efficacy
Determination"). If Funder makes the
Efficacy Determination, Funder shall pay the
future Development Costs for the Anti-Serum
in accordance with the Development Plan for
the Anti-Serum, subject to Funder's
termination right under Section 5.5. If
Funder does not make the Efficacy
Determination, Funder's obligation to pay any
further Development Costs for the Anti-Serum
shall terminate.
Developer shall keep Funder fully informed of
its progress on the Phase I Study and agrees
to provide written notice to Funder of its
completion. Any amounts payable to Developer
under subsections (a) and (b) above shall be
regardless of the actual costs of the Phase I
Study incurred by Developer.
The parties agree that the research and
development costs of the Anti-Serum may
overlap with the development of the vaccine.
The parties will in good faith discuss the
development of the vaccine under this
Agreement.
2. The following sentence shall be added to the end of
Section 5.3:
"Funder's payment obligation under this
Section 5.3 shall not commence until Funder
raises U.S. $10,000,000 in aggregate seed
financing. "
3. Except as specifically set forth herein, the Agreement
shall remain unaffected and shall remain in full force and
effect. This Amendment shall be deemed part of, and
construed in accordance with, the Agreement.
IN WITNESS WHEREOF, the parties have executed this
Amendment and caused the same to be duly delivered on their
behalf on the day and year hereinabove first set forth.
"Funder" "Developer"
XXXXXX-XXXX, INC. EDENLAND INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxx Xxxxxxxxxxx
---------------------------- ----------------------------
Its: CEO Its: Director
--------------------------- ---------------------------
"Chief Scientist"
/s/ Xxxxxxx X. Xxxxxxxxxxx
----------------------------------
XXXXXXX X. XXXXXXXXXXX
AMENDMENT NO. 2 TO
RESEARCH, DEVELOPMENT AND OPTION AGREEMENT
This Amendment is made to be effective as of the 17th
day of March 1995, by and between EDENLAND, INC., a Delaware
corporation ("Developer"), XXXXXXX X. XXXXXXXXXXX, an individual
("Chief Scientist"), and XXXXXX-XXXX, INC., a Delaware
corporation (formerly Holmedco Pharmaceuticals Corporation) ("the
Funder").
W I T N E S S E T H:
--------------------
WHEREAS, Developer, Chief Scientist and Funder are
parties to that certain Research, Development and Option
Agreement dated August 25, 1994, as amended by that certain
Amendment No. 1 to Research, Development and Option Agreement
dated February 5, 1995 (as amended, the "Agreement");
WHEREAS, Developer, Chief Scientist and Funder desire
to amend the Agreement in the manner set forth herein;
NOW, THEREFORE, in consideration of the premises, the
provisions and the respective agreements hereinafter set forth,
the parties hereby agree as follows:
1. It is a condition precedent to the effectiveness
of this Amendment that the U.S. $125,000 payment per
Section 3.1 of the License Agreement (as defined in the
Agreement) be transmitted to the account of Developer
no later than March 27th, 1995. Failure to make that
payment shall invalidate this Amendment.
2. As per Amendment No. 1 to the Research,
Development and Option Agreement Section 1
thereof, relating to 5.2(a) of the original
agreement, Section 5.2(a) is hereby amended
as follows:
"Funder agrees to pay Developer for
the Phase I study $250,000 in
accordance with the funding
available to Funder but not later
than 28th, April 1996.
Amendment No. 1 to this Agreement
shall remain in force except for
the above alteration to 5.2(a).
3. The first sentence of Section 5.8 is
hereby deleted in its entirety and replaced
with the following first sentence:
"Subject to the limitations set
forth herein, commencing April
28th, 1996, Funder agrees to commit
at least thirty percent (30%) of
its research and development
budget, but at least a minimum of
$2,000,000 (not based on a
percentage of Funder's research and
development budget), for any given
calendar year to pay Development
Costs for Subject Products."
4. Subsection (e) of Section 5.8 is hereby
deleted in its entirety.
5. Except as specifically set forth herein,
the Agreement shall remain unaffected and
shall remain in full force and effect. The
conditions of this Amendment shall become
part of the original Agreement and its Terms.
This Amendment shall be deemed part of, and
construed in accordance with, the Agreement.
IN WITNESS WHEREOF, the parties have executed this
Amendment and caused the same to be duly delivered on their
behalf on the day and year hereinabove first set forth.
"Funder" "Developer"
XXXXXX-XXXX, INC. EDENLAND, INC.
By /s/ Xxxxxxx X. Xxxxxx By /s/ Xxx Xxxxxxxxxxx
------------------------- ---------------------------------
Its CEO Its Director
------------------------ --------------------------------
"Chief Scientist"
/s/ Xxxxxxx X. Xxxxxxxxxxx
-------------------------------
XXXXXXX X. XXXXXXXXXXX
PAGE 1 OF 2
AMENDMENT NO. 3 TO
RESEARCH, DEVELOPMENT AND OPTION AGREEMENT
This Amendment is made to be effective as of the day of
August 1995, by and between EDENLAND INC., a Delaware corporation
("Developer"), XXXXXXX X. XXXXXXXXXXX, an individual ("Chief
Scientist"), and XXXXXX-XXXX, INC., a Delaware corporation
(formerly Holmedco Pharmaceuticals Corporation) (the "Funder").
W I T N E S S E T H:
--------------------
WHEREAS, Developer, Chief Scientist and Funder are
parties to that certain Research, Development and Option
Agreement dated August 25, 1994, as amended by that certain
Amendment No. 1 to Research, Development and Option Agreement
dated February 5, 1995 and Amendment No. 2 dated 17th, March,
1995 (as amended, the "Research, Development and Option
Agreement").
WHEREAS, Developer, Chief Scientist and Funder desire
to amend the Agreement in the manner set forth herein.
NOW, THEREFORE, in consideration of the premises, the
provisions and the respective agreements hereinafter set forth,
the parties hereby agree as follows:
1. The payments due per Amendment No. 1 and No. 2 to
the Research, Development and Option Agreement relating
to 5.2 is hereby unended as follows:
"The Funder agrees to pay Developer for the Phase
I study from funding available to Funder. However,
the payments due per Section 5.2(a) and 5.2(b) of
the Research, Development and Option Agreement
shall become payable from funds realized by way of
equity sale, sublicense, partnership agreements,
loans, Private Placements, Public Offerings which
take place following April 28th, 1996 but not
later than 24 months from the date of payments due
per section 2.2 of the Edenland Agreement"
2. Except as specifically set forth herein, the
Agreement shall remain unaffected and shall remain in
full force and effect. The conditions of this Amendment
shall become part of the original Agreement and its
Terms. This Amendment shall be deemed part of, and
construed in accordance with, the Agreement.
PAGE 2 OF 2
IN WITNESS WHEREOF, the parties have executed this
Amendment and caused the same to be duly delivered on their
behalf on the day and year hereinabove first set forth.
"Funder" "Developer"
XXXXXX-XXXX, INC. EDENLAND INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxx Xxxxxxxxxxx
---------------------------- ----------------------------
Its: CEO Its: Director
--------------------------- ---------------------------
"Chief Scientist"
/s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
XXXXXXX X. XXXXXXXXXXX
AMENDMENT NO. 4 TO
RESEARCH, DEVELOPMENT AND OPTION AGREEMENT
This Amendment is made to be effective as of the 31st
day of October 1996, by and between EDENLAND INC., a Delaware
Corporation ("Developer"), XXXXXXX X. XXXXXXXXXXX, an individual
("Chief Scientist"), and XXXXXX-XXXX INC., a Delaware Corporation
(formerly Holmedco Pharmaceuticals Corporation)(the "Funder").
W I T N E S S E T H
-------------------
WHEREAS, Developer, Chief Scientist and Funder are
parties to that certain Research, Development and Option
Agreement dated August 25, 1994, as amended by that certain
Amendment No. 1 to Research, Development and Option Agreement
dated February 5th, 1995, Amendment No. 2 dated 17th, March, 1995
and Amendment No. 3 dated 17th, March 1995 (as amended, the
"Research, Development and Option Agreement").
WHEREAS, Developer, Chief Scientist and Funder desire
to amend the Agreement in the manner set forth herein.
NOW, THEREFORE, in consideration of the premises, the
provisions and the respective agreements hereinafter set forth,
the parties hereby agree as follows:
A. This Agreement is hereby amended as follows,
upon the understanding that Xxxxxx-Xxxx
closes its proposed merger with Initial
Capital Acquisition Corporation ("IAC"), a
Delaware corporation on or before May 15th,
1997. If the Initial Acquisition Corporation
Merger with Xxxxxx-Xxxx does not become
effective on or before May 15th, 1997 then
this amendment No. 4 shall become null and
void and the present agreement as amended by
amendments Xx. 0, Xx. 0, and No. 3 only,
prior to this within Amendment, shall be the
full and true Agreement between the parties.
B. Section 5.2 of the Agreement is further
amended in its entirety provide as follows:
"5.2 DEVELOPMENT OF ANTI-SERUM; FUNDING OF
-------------------------------------
ANTI-SERUM DEVELOPMENT PLAN. Developer
---------------------------
agrees to obtain an open IND for the Anti-
Serum with the United States Food and Drug
Administration and to commence a twenty
patient, Phase I investigational new drug
study (the "Phase I Study") under the
guidelines and regulations of that regulatory
agency. Funder shall pay the Developer
US$3,000,000 to pay for the Development Costs
of the Anti-Serum and the Phase I study as
follows:
(i) Provided that Funder closes
its proposed merger with Initial Capital
Acquisition Corp., a Delaware corporation
(the "IAC Merger"), on or before May, 15th,
1997, Funder shall pay Developer US$1,500,000
at the closing of the merger by wire
transferring these funds to Edenland Inc.'s
U.S. designated Anti-Serum Research account.
Funder may retain a maximum of US$200,000 of
this initial payment towards unpaid IAC
expenses, however this US$200,000 must be
repaid as part of the 22% allocation of
Capital Funding as outlined herein. The
Developer shall provide to Funder on a
regular 12 week rota from receipt of the
above funds, a full and detailed audited
analysis of expenditure, prepared by a fully
certified Auditing firm of Accountants
together with copies of supporting invoices
from outside suppliers. The Developer shall
keep full and accurate books and records of
its Development Costs which shall be made
available to Funder pursuant to Section 5.7
of the Research, Development and Option
Agreement. The remaining US$1,500,000 shall
be paid to Developer from the next funds
available to Funder by allocating to
Developer 22% of the proceeds of all Capital
Funding Events (as defined herein) after the
IAC Merger. The term "Capital Funding
Events" shall mean all funds received by
joint venture agreements, loans, private
placements, the exercise of warrants or stock
options, or other similar transactions.
(ii) If the funds realizable pursuant to
the IAC Merger are not in place on or before
May 15th, 1997, the entire US$3,000,000 shall
be due and payable to Developer from Capital
Funding Events occurring after October 1,
1996, provided that the remaining payment
shall be due and payable no later then April
28th, 1998.
(b) Funder shall pay additional
Development Costs on the Anti-Serum beyond
the US$3,000,000 set forth in subsection (a)
above, as per Section 5.5.
(c) Developer shall keep Funder fully
informed of its progress on the Development
of the Anti-Serum to a stage of development
that demonstrates the toxicity and safety
profile and also indicates potential patient
efficacy of the Anti-Serum. Developer agrees
to provide written notice to Funder of all
results and prepare a report of these results
similar in format to the Parexel report on
the Houston study within six months of
completion of the study. The amounts payable
to Developer under subsection (a) above shall
be allocated by Developer to fund the
Development Costs of the Anti-Serum, however,
any funds per section (a) above, not
allocated upon completion of research to a
stage of Development as outlined herein shall
be utilized by Developer towards the
Development Costs of animal studies of
certain AFP derived synthetic peptides for an
additional therapeutic indication.
(d) The parties agree that the research
and development costs of the Anti-Serum may
overlap with the development of the vaccine.
Both Funder and Developer realize that
changes or modifications in the Development
Plan will in all likelihood be experienced as
a natural progression of research and
development.
C. The following provisions are added at the end
of Section 5.8 of the Agreement:
"Funder's payment obligation under this
Section 5.8 shall not commence until Funder
raise US$10,000,000 in the aggregate from
Capital Funding Events, as defined per
Section 5.2 of this agreement, occurring
after August 25th, 1994. This payment is
separate from, and in addition to, that
referred to in Section 5.2 for Anti-Serum
Development Cost, however, all payments per
section 5.2 shall be deductible from payments
due per this section.
Xxxxxx-Xxxx Inc. may not license any
technology or product from any source outside
the control of Edenland, Inc. without the
prior written consent of the Developer, until
such time as payments under this Section 5.8
have exceeded US$3,000,000.
D. As per section 5.3 and Amendment No. 1 to the
Research Development and Option Agreement
Section 5.3 of the within Agreement is hereby
amended as follows;
5.3 OFF BUDGET PROJECTS. It is contemplated
-------------------
by the parties that Developer and Chief
Scientist may have certain projects ("Off
Budget Projects") not covered by a
Development Plan for a Subject Product that
Developer and Chief Scientist believe would
aid their research on Subject Product or
potential New Product. These projects might
include a preliminary in-vitro experiment to
determine if a foundation exists for a New
Product. All such projects will be discussed
in full with the Chief Executive Officer of
Xxxxxx-Xxxx Inc. prior to draw-down of Funds
but, funding shall not be contingent on
approval of the projects by the Chief
Executive Officer of Xxxxxx-Xxxx, Inc. The
Developer shall provide to Funder a full and
detailed audited analysis of expenditure,
prepared by a fully certified Auditing firm
of accountants together with copies of
supporting invoices from outside suppliers,
each quarter following draw-down of funds.
Until such time as Funder's commitment under
Section 5.8 terminates, Funder agrees to
provide up to a maximum of $250,000 per year
to fund Off Budget Projects. Funder's
payment obligation under this Section 5.3
shall commence when Funder raises
U.S.$10,000,000 in aggregate from Capital
Funding Events, as defined in Section 5.2,
occurring after August 1994.
E. Section 10 of the Agreement is deleted in its
entirety.
F. Except as specifically set forth herein, the
Agreement shall remain unaffected and shall
remain in full force and affect. The
conditions of this Amendment shall become
part of the original Agreement and its Terms.
This Amendment shall be deemed part of, and
construed in accordance with the Agreement.
IN WITNESS WHEREOF, the parties have executed this
Amendment and caused the same to be duly delivered on their
behalf on the day and year hereinafter first set forth.
"Funder" "Developer"
XXXXXX-XXXX INC. EDENLAND, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxx Xxxxxxxxxxx
--------------------------- ---------------------------
Its: Chairman/CEO Its: Secretary/Director
------------------------- --------------------------
Date: 1st Nov. 96 Date: 1st Nov. 96
----------------------- -----------------------
"Chief Scientist"
/s/ Xxxxxxx X. Xxxxxxxxxxx Date: 1st Nov. 1996
-------------------------------- --------------------------
XXXXXXX X. XXXXXXXXXXX
