LICENSE AGREEMENT
BY AND BETWEEN
PHARMAFRONTIERS CORP.
AND
SHANGHAI INSTITUTES FOR BIOLOGICAL SCIENCES,
CHINESE ACADEMY OF SCIENCES
Dated as of January 13, 2006
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATION................................1
1.1 Definitions..................................................1
1.2 Interpretation...............................................1
ARTICLE II GRANT OF LICENSE.............................................2
2.1 Grant of License by Licensor.................................2
2.2 Fully Exclusive License......................................2
2.3 Covenant Not to Xxx..........................................2
2.4 Sublicenses..................................................2
2.5 Rights after Patent Expiration...............................2
2.6 No License To Other Rights...................................2
ARTICLE III PAYMENTS AND REPORTS........................................3
3.1 Payment......................................................3
3.2 Royalties....................................................3
3.3 Report and Payments of Royalties.............................3
3.4 Method of Payment............................................4
3.5 Audit........................................................4
3.6 Expiration or Suspension of Royalty Payment..................4
4.1 Organization, Good Standing and Power........................4
4.2 Authorization and Validity of Agreement......................4
4.3 No Conflict, Required Filings and Consents...................5
4.4 Absence of Litigation........................................5
4.5 Certain Agreements...........................................5
4.6 Licensed Technology..........................................5
4.7 No Knowledge of Infringement.................................6
4.8 Disclaimer of Other Warranties...............................6
ARTICLE V COVENANTS OF LICENSOR AND LICENSEE............................6
5.1 Licensor Cooperation.........................................6
5.2 Licensee Marketing and Sales Activities......................6
5.3 Data Sharing.................................................6
5.4 Patent Prosecution...........................................6
5.5 Intellectual Property Protection - Infringement..............7
5.6 Third Party Infringement Suit................................8
5.7 Licensor-Based Clinical Studies; Right of First Refusal......8
5.8 Confidentiality Treatment of Confidential Information........8
5.9 Assistance With Translation..................................9
5.10 Cooperation During Dispute...................................9
5.11 Product Development..........................................9
ARTICLE VI PUBLICATION..................................................9
ARTICLE VII TERM AND TERMINATION.......................................10
7.1 Term 10
7.2 Termination for Default.....................................10
7.3 Termination by Mutual Agreement.............................10
7.4 Termination by Licensee.....................................10
7.5 Effect of Termination.......................................10
ARTICLE VIII INDEMNIFICATION
8.1 Indemnification.............................................11
8.2 Third Party Claims..........................................11
i
ARTICLE IX LIMITATIONS OF LIABILITY....................................11
9.1 Limitation of Liability.....................................11
9.2 Insurance...................................................11
ARTICLE X DISPUTE RESOLUTION...........................................12
10.1 Dispute Resolution..........................................12
10.2 Waiver of Sovereign Immunity................................12
ARTICLE XI MISCELLANEOUS...............................................12
11.1 Governing Law; Venue........................................12
11.2 Notices.....................................................12
11.3 Severability................................................13
11.4 Non-Waiver..................................................13
11.5 Successors..................................................13
11.6 Entire Agreement............................................13
11.7 Amendments..................................................13
11.8 Trademark...................................................13
11.9 Counterparts................................................14
11.10 Assignment..................................................14
11.11 Further Assurances..........................................14
11.12 Headings....................................................14
11.13 Survival of Representations, Warranties, and Covenants......14
11.14 Export Controls.............................................14
Exhibit A DEFINITIONS
Exhibit B SCIENTIFIC AND CLINICAL INFORMATION TO BE DELIVERED
ii
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement"), is entered into and dated as of
January 13, 2005, by and between PHARMAFRONTIERS CORP. ("Licensee"), a
corporation organized and existing under the laws of the State of Texas, United
States of America, and the SHANGHAI INSTITUTES FOR BIOLOGICAL SCIENCES, CHINESE
ACADEMY OF SCIENCES ("Licensor"), an institution with legal person status
organized and existing under the laws of the People's Republic of China ("PRC").
"Party" and "Parties" means Licensor and/or Licensee as the case may be.
WHEREAS, Licensor has developed and owns certain intellectual property
relating to the treatment of patients suffering from rheumatoid arthritis with
an "autologous" T-cell vaccine; and
WHEREAS, Licensee desires to obtain a license to such intellectual property
and Licensor is willing to grant such license to Licensee, all on the terms and
conditions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions. Capitalized terms not otherwise defined herein shall have
the meanings set forth on Exhibit A attached hereto.
1.2 Interpretation. Unless the context requires otherwise:
(a) As used in this Agreement, all defined terms include the plural as
well as the singular.
(b) Any agreement, document or instrument defined or referred to in
this Agreement shall include each amendment, modification and supplement thereto
and waiver thereof as may become effective from time to time in accordance with
the terms thereof, except where otherwise indicated.
(c) The terms "hereof" or "thereof," "herein" or "therein,"
"hereunder" or "thereunder," and comparable terms refer to the entire agreement
with respect to which such terms are used and not to any particular article,
section or other subdivision thereof.
(d) The words "include," "includes" and "including" are not limiting
and shall mean "including without limitation."
(e) A reference to any Person or Party includes its successors and
permitted assigns.
(f) A reference to any governmental authority includes any
governmental authority succeeding to the functions and capabilities of a
governmental authority.
1
(g) Any reference to money refers to legal currency of the United
States of America.
(h) Any reference in this Agreement to an "Article" or "Section" is a
reference to an article or section to this Agreement, except where otherwise
expressly indicated.
(i) Any reference in this Agreement to a "day" is a calendar day and
shall include Saturdays, Sundays and holidays, except that if an obligation to
be performed under this Agreement falls due on a Saturday, Sunday or any other
day which is not a Business Day, the obligation shall be deemed due on the next
occurring Business Day.
ARTICLE II
GRANT OF LICENSE
2.1 Grant of License by Licensor. Subject to the terms and conditions of
this Agreement, Licensor hereby grants Licensee an exclusive, world-wide,
royalty-bearing license, including the right to sublicense, to the Licensed
Technology for all uses including the research, development, production,
marketing, use, importing, exporting, sale, have sold and offer or have offered
for sale, of Licensed Products.
2.2 Fully Exclusive License. The license granted under paragraph 2.1 is
exclusive even as to Licensor. Licensor may, however, use the Licensed
Technology solely for noncommercial academic and research purposes.
2.3 Covenant Not to Xxx. Licensor agrees that during the Term of this
Agreement it will not assert against Licensee any patent that is or might be
infringed by Licensee by reason of its manufacture, use or sale of Licensed
Products, whether or not such patent has been licensed to Licensee hereunder.
Licensor agrees that during the Term of this Agreement it will not assert
against Licensee any other intellectual property cause of action, including but
not limited to a trade secret cause of action, by reason of Licensee's
manufacture, use, or sale of a Licensed Product.
2.4 Sublicenses. All sublicenses granted hereunder shall be in writing and
shall include an acknowledgment by the sublicensee that the sublicense is
subject to all of the terms of this Agreement.
2.5 Rights after Patent Expiration. After the expiration of the last to
expire of Patent in a country, Licensee shall have a fully paid up license to
the Licensed Technology in such country and may make, have made, use and sell
Licensed Products in such country without additional payments to Licensor.
2.6 No License To Other Rights. Licensor does not grant, and Licensee shall
have no rights, to any patents, trade secrets or other intellectual property
owned or controlled by Licensor now or in the future, except as explicitly
granted herein. Licensor shall retain the right to use the Licensed Technology
in connection with non-commercial research, patient care, and educational,
academic, and administrative purposes. Additionally, nothing in this Agreement
shall be construed so as to restrict Licensor's ability to conduct further
research and development in the area of the Licensed Technology or other areas.
2
ARTICLE III
PAYMENTS AND REPORTS
3.1 Payment. Within ten (10) days of satisfaction of the "Conditions
Precedent" as defined below, Licensee shall pay to Licensor an execution fee in
the amount of ________________________________________ US Dollars
(US$________________) (the "Closing Payment") via wire transfer of immediately
available funds to an account designated by the Licensor.
"Conditions Precedent" means: (1) Licensee and Licensor have received all
required third party consents (if any) and PRC governmental approvals and
permits relating to the transactions contemplated by this Agreement; and (2)
Licensor has delivered all the materials described in Exhibit B and Licensee has
translated such materials into English and confirmed such translation.
3.2 Royalties
(a) In consideration of the rights granted herein and subject to the
other terms herein, Licensee shall pay Licensor a running royalty on the
sale of Licensed Products equal to
___________________________________________________, in any country in
which there exists a Licensor Patent, from the date of First Commercial
Sale to the date of expiration of the last to expire Licensor Patent in
such country.
(b) Licensee shall deduct from all royalties to be paid to Licensor
all withholding taxes lawfully imposed thereon, which taxes shall be paid
by Licensee for the account of Licensor; provided that Licensee shall upon
request supply Licensor with original or certified copies of official
certificates stating that the taxes have been actually paid for the account
of Licensor.
(c) If (i) Licensee receives notice that the sale of the Licensed
Products constitutes an unauthorized use or infringement of a patent or
other intellectual property right issued to or held by a third party, and
(ii) Licensee is required to pay to such third party a royalty for the
right to make, use or sell the Licensed Products as contemplated by this
Agreement after (A) notice to Licensor and good faith negotiations with
such third party, or (B) upon receipt of an order from a judicial authority
with competent jurisdiction, then Licensee may deduct the amount of such
payments from the royalties payable to Licensor pursuant to this Agreement.
3.3 Report and Payments of Royalties. Within 60 days following the close of
each calendar quarters, following the First Commercial Sale, Licensee shall
furnish to Licensor a written report for the calendar quarter showing the Net
Sales during such calendar quarter. Such report shall break down such amounts by
country. The report shall detail the calculation of the royalties owed hereunder
in connection with the Net Sales of Licensed Products reported in the report.
Simultaneously with the submission of the report, Licensee shall pay to Licensor
the royalties owed for the calendar quarter pursuant to Section 3.2. Until the
First Commercial Sale, within 60 days of the last day of the calendar year,
Licensee shall furnish to Licensor a written annual report describing their
efforts and accomplishments in the development and commercialization of Licensed
Technology.
3
3.4 Method of Payment. All payments due hereunder are expressed in and
shall be payable to Licensor in US Dollars in cash via wire transfer of
immediately available funds to an account designated by the Licensor. For sales
of Licensed Products in currencies other than that of the United States,
Licensee shall use exchange rates published in The Wall Street Journal on the
last business day of the Calendar Quarter in which the royalties were earned. If
for reasons of currency, tax, or other regulations, transfer of funds is
prohibited in any country, Licensee may pay royalties on Net Sales from such
country by placing them in a bank account in that country in the name of and
under the sole control of Licensor; provided, however, that the bank selected
shall be reasonably acceptable to Licensor and that Licensee shall inform
Licensor of the location, account number, amount, and currency of money
deposited therein.
3.5 Audit38. . Licensor shall have the right, at its sole discretion and
expense, to nominate an independent accountant acceptable to Licensee, who shall
upon reasonable notice have access to Licensee's records relating to the
Licensed Products, during reasonable business hours and without any disruption
of Licensee's business, for the purpose of verifying the royalty payable as
provided for in this Agreement. This audit right may not be exercised more than
once in any calendar year, and the accountant shall only disclose to Licensor
information relating solely to the accuracy of the royalty report and/or the
royalty payments made according to this Agreement. If the amount paid to
Licensor during the audited period shall have been underpaid by
____________________ or more during an audited year, Licensee shall pay the
costs of such audit.
3.6 Expiration or Suspension of Royalty Payment.
(a) Royalties shall be payable hereunder with respect to the Net Sales
of Licensed Products in a country until the earlier of (i) the date of the
termination of this Agreement, (ii) the expiration of the last to expire
Licensor Patents in such country.
(b) If the Licensor Patent filed in a country is denied without any
right to re-file, or is held invalid or unenforceable, the obligation of
Licensee to pay royalties or any other amount under this Agreement shall be
suspended with respect to the sale of Licensed Products in such country.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LICENSOR
Licensor hereby represents and warrants to Licensee as follows:
4.1 Organization, Good Standing and Power. Licensor is an institution with
legal person status validly existing and in good standing under the laws of the
People's Republic of China with the power and authority to own, lease and
operate its assets and to conduct the activities now being or to be conducted by
it, and to perform its obligations under the Agreement. Licensor is duly
authorized, qualified or licensed to conduct its activities and has all
requisite power and authority to enter into this Agreement and to perform the
obligations contemplated hereunder.
4.2 Authorization and Validity of Agreement. The execution, delivery and
performance by Licensor of this Agreement have been duly authorized and approved
by all necessary action and internal approvals on the part of Licensor. This
Agreement has been duly executed and delivered by Licensor, and is the legal,
valid and binding obligation of Licensor enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
4
4.3 No Conflict, Required Filings and Consents. The execution, delivery and
performance of this Agreement by Licensor will not violate, conflict with, or
result in a violation or breach of any license, lease, or other contract or
instrument to which Licensor is a party or by which or to which it or any of the
Licensed Technology may be bound or subject. Moreover, the Licensor's execution,
delivery and performance of this Agreement will not violate any order, judgment,
decree, law, rule, or regulation, of any governmental authority applicable to
Licensor or the Licensed Technology. Other than the registration of this
Agreement with the Shanghai Foreign Investment Commission, no consent of any
governmental authority is required by or with respect to Licensor in connection
with the execution and delivery of this Agreement by Licensor or the
consummation of the transactions contemplated hereby or thereby.
4.4 Absence of Litigation. There is no claim, action, suit, inquiry,
judicial, or administrative proceeding, grievance, or arbitration pending or, to
the knowledge of Licensor, threatened against Licensor or any of the Licensed
Technology by or before any arbitrator or governmental authority, nor are there
any investigations relating to Licensor or any of the Licensed Technology
pending or, to the knowledge of Licensor, threatened by or before any arbitrator
or governmental authority. There is no judgment, decree, injunction, order,
determination, award, finding, or letter of deficiency of any governmental
authority or arbitrator outstanding against Licensor or any of the Licensed
Technology. There is no action, suit, inquiry or judicial or administrative
proceeding pending or, to the knowledge of Licensor, threatened against Licensor
relating to the transactions contemplated by this Agreement.
4.5 Certain Agreements. Exhibit B hereto lists each contract that is
material to the legal and beneficial ownership and use the Licensed Technology
to which Licensor is a party or by which or to which Licensor or the Licensed
Technology is bound or subject. Each such contract described in Exhibit B is a
valid and binding obligation of Licensor and is in full force and effect without
amendment. Licensor and, to the knowledge of Licensor, each other party to such
contracts, has performed in all material respects the obligations required to be
performed by it under such contracts and is not (with or without lapse of time
or the giving of notice, or both) in breach or default thereunder. The Licensor
has not received (i) any notice, written or otherwise, of defaults by Licensor
under any contract listed in Exhibit B, or (ii) any notice written or otherwise,
that any other party to any such contract has terminated or cancelled, or
intends to terminate or cancel, such contract. Licensor has received the consent
or approval of each Person that is a party to a Contract identified in Exhibit B
whose consent or approval shall be required in order to permit the consummation
of the transactions contemplated hereby and such consent or approval shall be in
form and substance satisfactory to Licensee.
4.6 Licensed Technology. Exhibit B includes a true and complete list of all
of the information in Licensor's possession relating to the Licensed Technology.
Licensor exclusively owns all rights to the Licensed Technology pursuant to
valid, binding, and enforceable assignments. Licensor is not infringing any such
Licensed Technology, and Licensor is not aware of any infringement by others of
any of the Licensed Technology owned by Licensor. 4.7 No Knowledge of
Infringement48. . Licensor warrants that it has received no notice of any patent
owned by a third party that would be infringed by reason of the manufacture,
sale, use, or importation of any Product.
5
4.8 Disclaimer of Other Warranties. THE LICENSED TECHNOLOGY IS BEING
LICENSED ON AN "AS IS" BASIS. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
LICENSOR DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL,
STATUTORY OR OTHERWISE, WITH RESPECT TO THIS AGREEMENT AND THE LICENSED
TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE,
NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE V
COVENANTS OF LICENSOR AND LICENSEE
5.1 Licensor Cooperation. Licensor covenants and agrees that it shall use
all commercially reasonable efforts, including making any required payments, to
file or obtain all authorizations, consents, orders, or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
governmental authority necessary for the consummation of the transactions
contemplated by this Agreement.
5.2 Licensee Marketing and Sales Activities. Upon issuance of the US
Licensor Patent, Licensee shall thereafter use commercially reasonable efforts
to develop, obtain approval for, promote, market, distribute, and sell the
Licensed Products in the United States. If, after issuance of the US Licensor
Patent, Licensee fails to use commercially reasonable efforts to develop, obtain
approval for, promote, market and sell a Licensed Products in the United States,
such failure shall, upon written notice by the Licensor to the Licensee,
constitute an "Event of Default" under Section 7.2 and Licensor may elect to
terminate Licensee's license granted hereunder with respect to the United
States, subject to the Licensee's right to cure such Event of Default as
provided in Section 7.2.
5.3 Data Sharing. If this Agreement terminates for any reason, Licensee
will, upon request, provide to Licensor a copy of all data used to support any
of the filings or communications with any regulatory authority including,
without limitation, all data in any master file with the U.S. Food and Drug
Administration. Licensor may use any such data in filing, prosecuting and
maintaining any regulatory license, approval or permit. Such data shall be
treated by Licensor as "Confidential Information" pursuant to Section 5.8.
Licensee shall continue to own such data and may use it for any purpose.
5.4 Patent Prosecution
(a) Patent Prosecution. Licensee shall use commercially reasonable
efforts to file, prosecute and maintain, at its sole expense, a patent
application claiming the T-Cell Vaccine with the United States Patent and
Trademark Office (the "US Licensor Patent"). Licensee shall use
commercially reasonable efforts to file such application within one year
following the date of this Agreement. Additionally, Licensee shall also
have the right, but not the obligation, to file, prosecute and maintain
patent applications covering the T-Cell Vaccine in other jurisdictions as
it deems necessary or appropriate, including but not limited to the PRC.
6
(b) Option of Licensor to Prosecute and Maintain Patents. Licensee
shall give Licensor 90 days' prior notice of Licensee's intent to cease
prosecution and/or maintenance of any Licensor Patent, without filing a
substitute patent application. Licensee shall then permit Licensor, at its
sole discretion, to continue prosecution or maintenance at its own expense.
If Licensor pursues prosecution or maintenance, Licensee shall execute such
documents and perform such acts, at Licensor's expense, as may be
reasonably necessary to permit Licensor to conduct such prosecution or
maintenance.
5.5 Intellectual Property Protection - Infringement. During the term of
this Agreement, each Party shall promptly inform the other of any suspected
infringement, misappropriation or theft of the Licensed Technology by a third
party. Any action or proceeding against such third party shall be instituted as
following:
(a) Licensee shall have the first right to institute an action for
infringement, misappropriation or theft of the Licensed Technology against
such third party. Licensee shall pay all its expenses, including costs and
legal fees incurred in bringing and prosecuting such infringement or
misappropriation action. Licensor will cooperate with Licensee in any suit
brought by Licensee against such third party, and shall have the right to
consult with Licensee and to participate in and be represented by
independent counsel in such litigation at Licensor's own expense. Licensee
shall incur no liability to Licensor as a consequence of such litigation or
any unfavorable decision resulting therefrom, including any decision
holding any issued Licensor Patent invalid, unenforceable or not infringed.
(b) If Licensee has not within a reasonable time (not to exceed 120
days from the date on which it is notified or otherwise becomes aware of an
infringement or misappropriation) either terminated such infringement or
initiated legal action against the infringer or defendant, it shall, upon
written request of Licensor, grant to Licensor the right to prosecute an
action against the infringer or defendant. Licensor shall pay all its
expenses, including costs and legal fees incurred in bringing and
prosecuting such infringement or misappropriation action. Licensee will
cooperate with Licensor in any suit for infringement or misappropriation
brought by Licensor. Licensee shall have the right to consult with Licensor
and to participate in and be represented by independent counsel in such
litigation at its own expense. Licensor shall periodically reimburse
Licensee for its out-of-pocket costs (excluding independent counsel fees)
incurred in cooperating with Licensor. If Licensor desires to settle or
compromise such suit or action in a manner that adversely impacts Licensee
or the Licensed Technology, Licensor shall not so settle or compromise such
suit or action without the written consent of Licensee, which may be
withheld in its sole discretion.
(c) Should either Party commence suit under the provisions of this
Section 5.5 and thereafter elect to abandon the same, such Party shall give
timely notice to the other Party who may, if it so desires, continue
prosecution of such action.
(d) In any action pursuant to this Section, all recoveries, whether by
judgment, award, decree or settlement, from infringement, misappropriation,
or theft of Licensed Technology shall be apportioned as follows: (ii) each
Party shall first recover an amount that is equal to or in direct
proportion to the total costs and expenses incurred by such Party directly
related to the prosecution of such action or proceeding, (b) each Party
shall then recover an amount equal to or in direct proportion to each
Party's lost profits, and (iii) the remainder shall then be paid to the
Party prosecuting the action.
7
5.6 Third Party Infringement Suit. If a third party sues Licensee or any of
its Affiliates alleging that Licensee's, its Affiliates' or their sublicensees'
using, distributing, marketing, promoting, offering for sale or selling Licensed
Technology infringes or will infringe the third party's patent, then Licensee
may, in its sole discretion, elect to defend such suit. Upon Licensee's request
and in connection with Licensee's defense of any such third party infringement
suit, Licensor shall provide reasonable assistance to Licensee for such defense
at Licensee's sole cost.
5.7 Licensor-Based Clinical Studies; Right of First Refusal.
(a) When Licensee determines to conduct the clinical trials for the
first Licensed Product it will notify Licensor of Licensee's intent to do
so. If Licensor provides evidence, acceptable to Licensee in its sole
discretion, that Licensor is capable of conducting the contemplated trials,
including compliance with protocol requirements, "good clinical practices"
and all other US Food and Drug Agency regulations, Licensee will discuss
with Licensor the possible engagement of Licensor to act as one of the
sites for such trials prior to engaging any other entity to conduct the
trials. Any such engagement of Licensor to conduct trials shall be subject
to a separate written agreement and shall be on mutually agreed upon terms
that are customary and reasonable and in accordance with Licensee's
standard terms relating to clinical research by such an organization.
(b) After Licensee has received any necessary approvals to make, use
and sell a Licensed Product in the Peoples Republic of China ("PRC"),
Licensee will negotiate in good faith the terms of a non-exclusive license
for Licensee to make, use and sell the Licensed Products in the PRC. Such
license shall be on reasonable commercial terms and include customary
provisions.
5.8 Confidentiality Treatment of Confidential Information. -
(a) Confidentiality Obligation. Each Party shall hold in confidence,
and shall not disclose to any Person outside its organization, all
Confidential Information provided to it by the other Party. A Party shall
use such Confidential Information only for the purpose for which it was
disclosed. Each Party shall disclose Confidential Information provided by
the other Party only to Persons within its organization and its advisors
who have a need to know such Confidential Information in the course of the
performance of their duties and who are bound to protect the
confidentiality of such Confidential Information.
(b) Term of Confidential Information. The obligations of the Parties
with regard to Confidential Information shall continue until five (5) years
after the termination or expiration of this Agreement.
(c) Return of Confidential Information. The receiving Party shall,
upon request of the disclosing Party, return all drawings, documents,
biological samples and other tangible manifestations of Confidential
Information received pursuant to this Agreement (and all copies and
reproductions thereof); provided, however, a Party may keep one copy for
record keeping purposes only. If a Party is requested pursuant to, or
required by, applicable law, regulation or legal process to disclose any of
the other Party's Confidential Information, it will notify such Party
promptly (unless prohibited by law) so that such Party may seek an
appropriate protective order or other appropriate remedy.
8
(d) Irreparable Harm. Any violation of this confidentiality obligation
by one party would cause the other party irreparable harm. In addition to
any other right or remedy it may have, at law or in equity, any party may
seek an injunction against threatened or continuing disclosure of
Confidential Information without the posting of any bond or other security.
(e) SEC Filing Obligations. Licensor acknowledges that Licensee is a
reporting company under U.S. securities laws and is obligated to file
public reports thereunder; such reports will include a copy of this
Agreement and may include amounts paid to Licensor. Licensee will request
confidential treatment from U.S. authorities for that information that
Licensee believes may be granted such treatment.
5.9 Assistance With Translation. Licensee will arrange for the translation
of the materials in Exhibit B at Licensee's expense. However, Licensor shall
make its employees available to answer questions regarding the translation of
the materials in Exhibit B and to otherwise provide assistance with such
translations.
5.10 Cooperation During Dispute. While any controversy, dispute or claim
arising out of or relating to this Agreement is pending, the Parties shall, to
the extent legally permissible, continue to perform their obligations hereunder
to the extent possible notwithstanding such controversy, dispute or claim.
5.11 Product Development. All business decisions including, without
limitation, the design, manufacture, sale, price and promotion of the Licensed
Product and the decision whether to launch, or to continue to sell a Licensed
Product shall be within the sole discretion of Licensee. Nothing in this
Agreement shall restrict Licensee from developing, making, marketing or selling
any other product.
ARTICLE VI
PUBLICATION
Licensor agrees that Licensee may issue a press release upon the signing
and closing of this Agreement summarizing the transaction, provided that
Licensee shall obtain prior written approval of the Licensor for any subsequent
use of the Licensor's name in any press or public exposure other than public
filings required by law or regulation. Both Parties recognize that each may wish
to publish the results of their work relating to the T-Cell Vaccine in an
appropriate peer review journal. However, both Parties also recognize the
importance of acquiring patent protection with respect to the T-Cell Vaccine
prior to publication. Consequently, Licensor shall not publish or present the
results of any of its work with respect to the T-Cell Vaccine or of related
development studies without first providing Licensee with a copy of such
publication at least 90 days prior to "Publication." "Publication" shall mean
any form of publication including, but not limited to, publication in journals,
submission of articles to journals for consideration for publication,
publication electronically, talks and posters. Licensee may then prepare and
file a patent application for any material in such publication. Licensor shall
cooperate with making any such filing, and Licensor shall delete from any
proposed publication any of Licensee's Confidential Information.
9
ARTICLE VII
TERM AND TERMINATION
7.1 Term. The term ("Term") of the licenses granted herein shall commence
on the date of this Agreement and, unless terminated earlier as provided herein,
expire on a country-by-country basis on the expiration of the last to expire
Licensor Patent issued in the country.
7.2 Termination for Default. This Agreement may be terminated by either
Party upon an Event of Default by the other Party as follows:
(a) Upon an Event of Default, the non-defaulting Party shall have the
right, exercisable at its sole discretion, and in addition to any other
rights or remedies available to it at law or in equity, to terminate this
Agreement upon 45 days' prior notice to the defaulting Party. "Event of
Default" shall mean, in respect of either Party, a material breach of this
Agreement by such Party and its failure to remedy such breach within 30
days after written notice thereof by the non-breaching Party or, if
remediation of such breach in such period is not practicable, if the
breaching Party fails to commence and diligently pursue remediation during
such 30-day period.
(b) If Licensee fails to make any payment required to be made to
Licensor under this Agreement within 30 days following the date any such
payment is due, Licensor shall have the right, upon 30 days' prior notice
to Licensee, to terminate the exclusivity of the license granted by this
Agreement and thereafter the license hereunder shall be deemed to be a
non-exclusive license; provided, however, that Licensor shall not have the
aforementioned right if Licensee is disputing the applicable payment(s) in
good faith and by appropriate proceedings.
(c) Notwithstanding anything in the foregoing to the contrary, no
Party that is in material breach of this Agreement shall be entitled to
terminate this Agreement except with the consent of the other Party.
7.3 Termination by Mutual Agreement. This Agreement may be terminated at
any time by mutual written agreement of the Parties.
7.4 Termination by Licensee. At any time and from time to time, Licensee
may terminate this Agreement, in its sole discretion and without cause, with
respect to one or more or all countries upon thirty (30) days' prior written
notice to Licensor.
7.5 Effect of Termination. The expiration or termination of this Agreement
shall not relieve the Parties of any obligation accruing prior to such
expiration or termination. If Licensor and/or Licensee terminates this Agreement
as provided in this Article VII, neither Licensee nor Licensor shall have any
liability except for liability arising out of a breach of this Agreement.
Section 5.7, Article VIII, Article IX, Article XI, Article XII and this Article
VIII shall survive the termination of this Agreement.
10
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. (a) Licensor shall indemnify and hold harmless
Licensee, its Affiliates and each of their officers, directors and employees
from and against any Claim arising from any breach or default by Licensor of any
representation, warranty or covenant under this Agreement or any agreement or
document executed in connection herewith; or
(b) Licensee shall indemnify and hold Licensor, its Affiliates and
each of their officers, directors and employees harmless from and against
any Claim arising from the development, testing, marketing, manufacture,
operation, commercialization, sale or other disposition or use of Licensed
Products by Licensee, its contractors, sublicensees, and customers.
8.2 Third Party Claims. Any Person seeking intending to seek
indemnification hereunder shall give prompt written notice to the indemnifying
Party of the commencement or assertion of any action, proceeding, demand, or
claim by a third party (collectively, a "Third Party Action") in respect of
which the notifying Party intends to seek indemnification for a Claim hereunder.
Any failure to give such notice shall not relieve the indemnifying from any
liability that such Party may have under this Article VIII unless the failure to
give such notice materially and adversely prejudices the indemnifying Party. The
indemnifying Party shall be entitled, at its own expense and in its sole
discretion, to either assume or participate in the defense of such Third Party
Action. If the indemnifying party assumes the defense, the indemnified Person
shall be entitled to participate with its own counsel at its own expense. If the
indemnifying Party assumes the defense, the indemnifying Party shall obtain the
prior written approval of the indemnified Person before entering into or making
any settlement, compromise, admission, or acknowledgment of the validity of such
Third Party Action or any liability in respect thereof. The indemnified Person
shall not unreasonably withhold or delay such approval. Moreover, the
indemnifying Party shall not consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by each claimant or plaintiff a release of the indemnified Person from all
liability in respect of such Third Party Action. The parties hereto shall extend
reasonable cooperation in connection with the defense of any Third Party Action
pursuant to this Article VIII and, in connection therewith, shall furnish such
records, information, and testimony and attend such conferences, discovery
proceedings, hearings, trials, and appeals as may be reasonably requested.
ARTICLE IX
LIMITATIONS OF LIABILITY
9.1 Limitation of Liability. NO PARTY (OR ITS REPRESENTATIVES) SHALL BE
LIABLE TO ANY OTHER PARTY FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, OR PUNITIVE
DAMAGES OF ANY KIND FOR ANY CAUSE OF ACTION OR CLAIM ARISING OUT OF THIS
AGREEMENT, WHETHER IN NEGLIGENCE, STRICT LIABILITY, CONTRACT, TORT, OR ANY OTHER
LEGAL THEORY OR CAUSE OF ACTION. SUCH EXCLUDED DAMAGES INCLUDE, BUT ARE NOT
LIMITED TO, LOST PROFITS, EVEN IF THE PARTY TO BE CHARGED (OR ITS
REPRESENTATIVES) HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9.2 Insurance. At any time Licensee is conducting clinical trials it shall
obtain and maintain clinical trial liability insurance in the amount of
$__________________ naming Licensor as an "additional insured." Prior to
commencing sales of a Licensed Product in the United States or Europe, Licensee
shall obtain, and maintain throughout the Term, product liability insurance,
naming Licensor as an "additional insured," for the Licensed Products in amounts
reasonably consistent with industry practices for similar sized companies with
similar products and similar sales levels. Upon Licensor's request at any time
during the Term, Licensee shall deliver to Licensor a certificate of insurance
evidencing such insurance.
11
ARTICLE X
DISPUTE RESOLUTION
10.1 Dispute Resolution. Any Dispute shall, upon the written request of any
Party, be settled through friendly consultation among the Parties. In the event
that a Dispute is not resolved through consultation within thirty (30) days of
the receipt of the request, at the request of any Party, such Dispute shall be
finally settled by arbitration in Singapore before a tribunal of three (3)
arbitrators in accordance with the rules ("Rules") of the ICC International
Court of Arbitration then in effect. Each Party shall nominate one (1)
arbitrator within the time period specified in the rules of the ICC
International Court of Arbitration. The two arbitrators nominated by the
claimant and the respondent shall together nominate the third and presiding
arbitrator of the Tribunal, who shall be of a different nationality than the
Parties. The arbitration shall be conducted in, and the award shall be rendered
in, the English language, and documents and evidence shall be submitted by the
Parties in their original language, subject to the Tribunal's authority to order
appropriate translations. The award shall be final and binding on the Parties
and may be confirmed in, and judgment upon the award entered by, any court
having jurisdiction over the Parties. This Agreement and the rights and
obligations of the Parties shall be fully performed pending the award in any
arbitration proceeding hereunder.
10.2 Waiver of Sovereign Immunity. Each of the Parties irrevocably
represents, warrants and agrees that this Agreement is a commercial rather than
a public or governmental activity and that it is not entitled to claim immunity
from legal proceedings with respect to itself or any of its assets on the
grounds of sovereignty or otherwise under any law or in any jurisdiction where
an action may be brought for the enforcement of any of the obligations arising
under or relating to this Agreement. To the extent that any of the Parties or
any of their assets has or hereafter may acquire any right to immunity from
set-off, legal proceedings, attachment prior to judgment, other attachment or
execution of judgment on the grounds of sovereignty or otherwise, such Party
hereby irrevocably waives such rights to immunity in respect of its obligations
arising under or relating to this Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 Governing Law; Venue. This Agreement, its validity, interpretation,
execution and the rights and obligations of the Parties, and the settlement of
any disputes, hereunder shall be governed by and construed in accordance with
the laws of the State of Texas (excluding its conflict of laws rules which would
refer to and apply the substantive laws of another jurisdiction). The Parties
further agree that, in connection with the consummation of the transactions
contemplated under this Agreement, they will comply with all applicable laws of
the People's Republic of China.
11.2 Notices. Any notice, consent or approval to be given under this
Agreement shall be in writing and shall be deemed to have been given if
delivered at the address set forth below, (i) personally by a reputable courier
service that requires a signature upon delivery; (ii) by mailing the same via
registered or certified first class mail, postage prepaid, return receipt
requested; (iii) by faxing the same with telephonic confirmation of receipt
(followed by a first class mailing of the same) to the intended recipient; or
(iv) by E-mailing the same with electronic confirmation of receipt (followed by
first class mailing of the same):
12
If to Licensor, as follows: If to Licensee, as follows:
Attn: Director Attn: Chief Operating Officer
No. 225 South Chongqing Road, PharmaFrontiers Corp.
Xx. 000 Xxxxxxxx 0 0000 X Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxx 000000 The Xxxxxxxxx XX 00000
with a copy (which shall
not constitute notice) to:
Xxxxxx & Xxxxxx L.L.P.
Xx. 000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxx 000000
Facsimile: (00-00) 0000-0000
11.3 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law; but if any provision of this Agreement or the application
thereof to any Party or circumstance is prohibited by or invalid under
applicable law, that provision shall be effective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement or the application of such
provision to other parties or circumstances.
11.4 Non-Waiver. No delay or omission of any Party to exercise rights or
powers under this Agreement shall impair any such right or power or shall be
construed to be a waiver of any default or acquiescence therein. No waiver of
any default shall be construed, taken, or held to be a waiver of any other
default, or waiver, acquiescence in, or consent to any further or succeeding
default of the same nature.
11.5 Successors. Except as expressly provided in this Agreement, this
Agreement and all of the terms and provisions hereof shall be binding upon and
shall inure to the benefit of each of the Parties and their permitted successors
and permitted assigns.
11.6 Entire Agreement. This Agreement contains the entire understanding
between the Parties and supersedes any prior understandings and written or oral
agreements between them respecting this subject matter. There are no
representations, agreements, arrangements, or understandings, oral or written,
between the Parties relating to the subject matter of this Agreement that are
not fully expressed in this Agreement.
11.7 Amendments. This Agreement shall not be amended, modified, or altered
except through a written consent signed by the Parties. The Agreement may not be
amended, modified, or altered through electronic means.
11.8 Trademark. Licensee shall be free to select the trademarks to be used
in connection with the sale and marketing of Licensed Product, and such
trademarks and all associated goodwill shall remain the sole property of
Licensee.
13
11.9 Counterparts. This Agreement may be executed by the Parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same Agreement. All signatures need not be on the same counterpart.
11.10 Assignment. Licensee shall not assign, transfer or otherwise dispose
of this Agreement or its rights and obligations hereunder unless (a) the
proposed assignee or transferee agrees in writing to be bound by the terms of
this Agreement and to perform all obligations of Licensee hereunder including,
but not limited to, the payment of royalties to Licensor under Section3.2; or
(b) Licensee receives the express written consent of Licensor. Any attempted
assignment, transfer or disposal contrary to this Section shall be a material
breach of this Agreement by Licensee and shall be void and without force and
effect.
11.11 Further Assurances. From time to time, each Party to this Agreement
agrees to execute and deliver such additional documents, and will provide such
additional information and assistance, as the other Party thereto may reasonably
require to effect the terms of such agreement or instrument.
11.12 Headings. The titles of Articles, Sections, subsections or clauses of
such agreement or instrument are for convenience only and not as an aid for
construction and shall not be interpreted to limit or otherwise affect the
provisions of such agreement or instrument.
11.13 Survival of Representations, Warranties, and Covenants. Each of the
representations and warranties made hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive the Closing
for a period of twenty-four (24) months, except that this time limitation shall
not apply to any claims for fraudulent acts or omissions, which shall survive
until the expiration of the applicable statute of limitations. Following the
date of termination of a representation or warranty, no claim can be brought
with respect to a breach of such representation or warranty, but such
termination shall not affect any claim for a breach of a representation or
warranty that was asserted before the date of termination. To the extent that
such are performable after the Closing, each of the covenants and agreements
contained in this Agreement shall survive the Closing indefinitely; provided,
however, effective as of the Closing, Licensor shall be deemed to have waived
any and all rights and remedies as to any breach by Licensee of any covenant and
agreement of Licensee occurring prior to the Closing.
11.14 Export Controls. The parties acknowledge that Licensor is subject to
certain PRC laws and regulations regarding the export of technical data,
software, laboratory prototypes and other commodities, and that the Parties
obligations hereunder are contingent on compliance with such laws and
regulations. The transfer of certain technical data and commodities may require
receipt of approval from the relevant PRC governmental authorities. Licensor
makes no representation as to whether such a license is required or, if
required, whether such license shall be issued.
[Signature page follows]
14
109. IN WITNESS WHEREOF, the Parties have by their duly authorized
representatives executed and delivered this Agreement as of the day and year
first written above.
LICENSOR: LICENSEE:
SHANGHAI INSTITUTES FOR BIOLOGICAL SCIENCES, PHARMAFRONTIERS CORP.
CHINESE ACADEMY OF SCIENCES
By: /s/ Xxxxxxx Xx By: /s/ Xxxxx X. XxXxxxxxxx
----------------------------------- -----------------------------------
Print Name: Xxxxxxx Xx Print Name: Xxxxx X. XxXxxxxxxx
Title: Deputy Director Title: President
15
EXHIBIT A
DEFINITIONS
"Affiliate" of any Person means any other Person directly or indirectly
controlling, directly or indirectly controlled by, or under direct or indirect
common control with such Person. As used in this definition, the terms
"control," "controlling," or "controlled by" shall mean the possession, directly
or indirectly, of the power either to (i) vote fifty percent (50%) or more of
the securities or interests having ordinary voting power for the election of
directors (or other comparable controlling body) of such Person or (ii) direct
or cause the direction of the actions, management, or policies of such Person,
whether through the ownership of voting securities or interests, by contract or
otherwise, excluding in each case, any lender of such Person or any Affiliate of
such lender.
"Business Day" means any day other than a Saturday, Sunday or a holiday on which
banks in the People's Republic of China are required or authorized to be closed.
"Claims" means any damages, losses, claims, liabilities, demands, charges,
suits, penalties, costs, and expenses (including reasonable legal fees) actually
incurred by a Party.
"Confidential Information" means information of a technical, commercial or other
proprietary nature (including, but not limited to specifications), including the
terms of this Agreement and all reports made by Licensee hereunder, that has
been provided to one Party by the other Party in writing and marked
Confidential, or if provided orally, reduced to writing and marked Confidential
and provided to the other party within thirty (30) days of its first oral;
provided "Confidential Information" shall not include information that:
(a) is or hereafter becomes generally available to the public other than by
reason of any default with respect to confidentiality under this Agreement;
(b) is hereafter disclosed to a Party by a third party who is not in
default of any confidentiality obligation to the other Party (and such
disclosure can be properly demonstrated by the receiving Party);
(c) was previously or is hereafter developed by or on behalf of the
publishing party, without reliance on Confidential Information provided by the
other Party (and such can be properly demonstrated by the receiving Party); or
(d) is required to be disclosed in compliance with applicable laws or
regulations, including U.S. securities regulations, or order by a court or other
governmental or regulatory agency or body having competent jurisdiction,
provided that reasonable measures shall be taken to assure confidential
treatment of such information to the extent reasonably possible.
"Licensed Product" means any product, the manufacture, use, importation, or
sale of which would, if not licensed, infringe a Valid or Pending Claim.
"Event of Default" has the meaning given that term in Section 7.2. 124.
"First Commercial Sale" means the first sale of a Licensed Product in any
country after receipt of all governmental approvals required for regular
commercial sales, by Licensee or any sublicense to an unaffiliated third party.
Transfers of Licensed Products solely for use in research or clinical trials
shall not constitute a "First Commercial Sale."
Exhibit A-1
"Licensed Technology" means:
1. The T-Cell Vaccine and all related know-how developed by
Licensor, whether or not patentable, related to the
manufacture and use of the T-Cell Vaccine and all Licensor
Improvements;
2. All information and data of Licensor relating to all clinical
trials on all patient controls and patients with rheumatoid
arthritis with the T-cell Vaccine, including all clinical,
cell procurement and manufacturing protocols, complete patient
data sheets, all laboratory materials, methods and results and
manufacturing records/documents to include clinical lot and/or
batch records and any other data or information related to the
conduct or outcome of the clinical study; and
3. All trademarks, service marks, trade names, trade dress,
labels, logos, names, slogans, plans, ideas, concepts, data,
research and production records, promotional literature,
customer and supplier lists, copyrights, copyright
registrations and applications for registration, patents,
inventions (whether patentable or not), trade secrets and all
other intellectual property and proprietary rights, whether
registered or not, licensed to or owned by Licensor relating
to the T-Cell Vaccine and the goodwill related thereto.
"Licensor Improvements" means all enhancements, developments, or modifications
that improve the means of manufacture, use, delivery, efficacy or performance of
the T-Cell Vaccine discovered or invented by the employees or consultants of
Licensor during the Term.
"Licensor Patents" shall mean those patents that are issued, by any country, to
Licensor relating to the Licensed Technology and all applications therefore,
continuations, continuations-in-part, divisions, re-examinations, and reissues
thereof, and any corresponding foreign patents.
"Licensed Product" means any product, the manufacture, use, importation, or sale
of which would, if not licensed, infringe a Valid or Pending Claim.
"Net Sales" means all revenue and the fair market value of all consideration
other than revenue received by Licensee from the sale, lease, license,
distribution or other transfer of Licensed Products to any unaffiliated person
or entity (including governmental entities) less the following amounts: (a)
normal and customary discounts, including cash discounts, or rebates actually
allowed or granted, (b) credits or allowances actually granted upon returns,
regardless of the party requesting the return, (c) freight charges actually paid
for delivery by Licensee, and (d) sales taxes or other governmental charges
levied on or measured by the invoiced amount paid by Bayer, and (e) packaging,
freight and insurance paid in respect of sales. The term "Net Sales" does not
include transfers between Licensee Affiliates, even if Licensee's internal
accounting practices provide for a transfer price or chargeback provision.
If a Licensed Product is sold or distributed in the form of a combination
product containing one or more other products, other than the Licensed Product,
Net Sales for such Licensed Product will be calculated by multiplying actual Net
Sales of such combination products by the fraction A/(A+B) where A is the
invoice price of the Licensed Product if packaged and sold separately in an
arms-length transaction, and B is the total invoice price of any other component
or components in the combination, if packaged and sold separately in an
arms-length transaction by Licensee.
EXHIBIT A-2
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization, governmental authority, or any other form of
entity.
"T-Cell Vaccine" means the pharmaceutical compound developed by Licensor,
whether or not patentable, consisting of autoreactive T-cells derived from any
source, including but not limited to, the synovial fluid or peripheral blood and
prepared as attenuated T-cells for therapeutic use as a vaccine in humans with
rheumatoid arthritis to induce a regulatory immune response.
"Third Party Action" has the meaning given that term in Section 8.2 of this
Agreement.
"Valid or Pending Claim" means a claim of a pending Licensor Patent application
or of an unexpired issued Licensed Patent that has not been withdrawn, canceled,
or disclaimed nor held invalid or unenforceable by a court or government agency
of competent jurisdiction in an unappealed or unappealable decision. The scope
of a Valid or Pending Claim shall be limited on a country-by-country basis to
its terms and as may be defined by any such court or appropriate body of
competent jurisdiction
"United States" means the United States of America.
"US Licensor Patents" has the meaning given that term in Section 5.4(a) of this
Agreement.
EXHIBIT A-3
EXHIBIT B
Scientific and Clinical Information To Be Delivered*
1. Identification of parties
a. Sponsor
b. Contractor
2. Key Personnel and Contacts
a. Sponsor
b. Contractor
3. Quality Agreement
4. Product being manufactured (Drug substance and drug product) or
Techniques being transferred
5 . Process Description
a. Overview
b. Process Flow Diagrams
c. Space Needs
d. Equipment Needs
i. specialized features noted
ii. special settings, etc
iii. calibration/validation needs
e. Materials
i. Reagents (Vendor & Order #s)
ii. Supplies (Vendor & Order #s)
6. Procedures (Written)
a. General Techniques
b. Specific Assay Procedures
i. Flow cytometry
ii. ICH staining
iii. All specialized techniques
7. Lab Notebooks
a. Certified copy of notebooks to support patent
b. Proof of data audit/review
c. Supportive reports of work
d. Any supplemental publications, poster presentations, talks
8. CVs of All Staff Involved
9. List of all T-Cell Vaccine Clinical Trials to include Start date
and end date
10. T-Cell Vaccine Clinical Trial Protocols
* All documents and information shall be provided in English except those
documents listed under Nos. 3 and 7may be delivered in Chinese if not
available in English.
EXHIBIT B
