EXHIBIT 10.42
CONTRACT
between
PHAIRSON MEDICAL LIMITED
and
XXXXXXXXX X X XXXXXXX
THIS AGREEMENT, having an Effective Date of 1st December 1998 is made by and
between Phairson Medical Limited, a corporation having its principal place of
business at 000 Xxx Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx, XX00 OXF (hereinafter
referred to as "PHAIRSON") and Xxxxxxxxx X X Xxxxxxx, principal investigator
("PI") whose place of business is the Institute for Biomedical Engineering and
Department of Materials, Swiss Federal Institute of Technology ETH and
University of Zurich, Xxxxxxxxxxxxxx 00, XX0000, Xxxxxx, Xxxxxxxxxxx.
WHEREAS, PHAIRSON has identified and related specific tasks described under
ARTICLE 1; and
WHEREAS, PI is available and qualified to perform such tasks.
NOW THEREFORE, in consideration of the promises and the mutual covenant's
contained herein, the parties agree as follows:
ARTICLE I - Scope of Work
PI agrees to use its best efforts to perform the work outlined in ATTACHMENT 1.
ARTICLE II - Period of Performance
The period of performance shall commence on the last date of signature of this
Agreement and SHALL TERMINATE ON 28th February 1999 unless extended by written
mutual agreement of the parties or terminated in accordance with the provisions
of Article XI. PI shall notify PHAIRSON, as soon as possible, of any reason that
might contribute to PI's failure to perform within the specified performance
period, even if such reason is beyond the control and without fault or
negligence of PI.
ARTICLE III Fees and ROYALTY
FEES
PHAIRSON will pay PI monthly fees according to the following schedule:
For the services provided under Part A of ATTACHMENT 1, PHAIRSON will pay a
monthly fee ("Fees") of $1000. The payment of these Fees may be terminated by
PHAIRSON subject to the conditions in Article XI.
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ROYALTY
If any of the materials designed under Part A of ATTACHMENT 1 are developed for
commercial sale by PHAIRSON, PHAIRSON will, in addition to the Fees, pay to PI a
royalty ("Royalty") as follows:
(a) a sum equal to 1% (one percent) of Net Sales Value (as defined in Part
B of ATTACHMENT 1).
The above Royalty will be paid by PHAIRSON to PI on a calendar
quarterly basis within 90 (ninety) days of the expiration of the
calendar quarter.
(b) a sum equal to 2% (two percent) of all payments (including up-front
payments, milestone payments and royalties) received by PHAIRSON from
any commercial relationship with a third party relating to the Product
(as that term is defined in Part A of ATTACHMENT 1 hereof).
The above Royalty will be paid to PI within 30 (thirty) days of its
receipt by PHAIRSON from the party with whom PHAIRSON has established
the commercial relationship. This fee will be paid on all money
received by PHAIRSON with the exception of development funding which
is to be spent on the Product and with the exception of purchases of
PHAIRSON shares by the third party.
(c) If the material developed for commercial sale by PHAIRSON is specified
by the embodiment in Appendix A, PHAIRSON will, in addition to the
Fees, pay to PI the Royalty given in (a) and (b) above, except that
all the rates given therein will be reduced by 50%.
(d) If the material developed for commercial sale by PHAIRSON is an
existing commercially available carbomer, for example the carbomer
known under the trade name Carbopol 971P, PHAIRSON will, in addition
to the Fees, pay to PI the Royalty given in (a) and (b) above, except
that all the rates therein will be reduced by 90%. The total sum
received by PI in this instance will not exceed $100,000.
ARTICLE IV - Designated REPRESENTATIVES
FOR PHAIRSON:
Name: Xxxxxx Xxxxxxx
Address: 000 Xxx Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx, XX00 XXX, XX
Telephone: x00 000 000 0000
Fax: x00 000 000 0000
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For PI:
Name: Xxxxxxxxx Xxxxxxx X Xxxxxxx
Address: Institute for Biomedical Engineering & Dep't of Materials
Swiss Federal Institute of Technology ETH and University of Zurich,
Xxxxxxxxxxxxxx 00, XX-0000 Xxxxxx, Xxxxxxxxxxx
Telephone: x00 0 000 0000
Fax: x00 0 000 0000
ARTICLE V - Reports
PI will submit in a timely manner those reports described in the Scope of Work
as described in ATTACHMENT 1.
ARTICLE VI - Patents and Inventions
1. ALL RIGHTS AND TITLE TO ALL INVENTIONS, improvements and/or discoveries,
including software, know-how, patent and other intellectual or industrial
property conceived and/or made by PI in the performance of this agreement
and any extension or revision thereof, shall belong to PHAIRSON.
2. PI shall promptly notify PHAIRSON of any inventions, improvements,
discoveries, software and the like conceived and/or made during the
performance of this agreement (hereafter "Inventions"). Disclosures
submitted by PI to PHAIRSON shall be made in writing and identified as
confidential.
3. The filing, prosecution, and maintenance of patent applications and patents
covering Inventions shall be carried out by PHAIRSON, at PHAIRSON's sole
discretion and expense. In the event that PHAIRSON elects not to apply for
any such patents, then PI shall have the option, at its sole expense, to
apply for the patents.
ARTICLE VII - Proprietary or Confidential Information
Should proprietary or confidential information be exchanged under this
agreement, each party agrees, absent any special provisions to the contrary:
1. to use its best efforts to receive and maintain in confidence any and all
confidential or proprietary information delivered by one party hereto to
the other party;
2. to use confidential information solely for the purpose or purposes for
which it was disclosed and for no other purpose whatsoever;
3. as a receiving party, to disclose confidential information to its
employees, officers, agents, and representatives only on a need to know
basis;
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4. to identify in writing all confidential or proprietary information as such
at the time of disclosure;
5. not to release confidential or proprietary information to any third
parties; and
6. to dispose of or return proprietary or confidential information to the
disclosing party when requested or upon expiration or termination of this
agreement. The period of protection of confidential information shall be 7
(seven) years from the effective date of this agreement.
Confidential information does not include any information which:
1. is already in the public domain or which becomes available to the public
through no breach of confidentiality by the recipient;
2. was, as between recipient and discloser, lawfully in recipient's possession
on a non-confidential basis prior to receipt from the discloser;
3. is received by recipient independently on a non-confidential basis from a
third party free to lawfully disclose such information to the recipient; or
4. is independently developed by recipient without use of the discloser's
confidential information;
The release of confidential information by the receiving party to satisfy the
requirements of national laws shall not be a breach of this agreement.
ARTICLE VIII - Changes and Modifications
Any changes to this contract must be made in writing and must be executed by
both parties to indicate acceptance of the modification. Any change that might
impact cost, price, or delivery must be agreed to in writing prior to initiation
of any work associated with the proposed change.
ARTICLE IX - Assignment and Subcontracts
Neither performance nor payment involving the whole or any part of the research
effort described under Article I may be assigned, subcontracted, transferred, or
otherwise given or imposed on any other party by PI without the prior written
consent of PHAIRSON.
ARTICLE X - Mutual Responsibilities
1. Each party will comply with all applicable governmental laws, ordinances,
rules and regulations in the performance of this contract.
2. Without affecting or limiting any other provisions of this contract, it is
agreed each
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party's obligations under Articles III, VI and VII shall survive the
expiration of this contract.
3. Each party to this contract is an independent party, with each party solely
responsible for its own business expenses and employees including but not
limited to salaries, benefits, insurances, withholding, worker compensation
and taxes. Employees of either party shall not be deemed agents, employees
or representatives of the other party.
4. In the execution of this contract, the person whose signatures are set
forth are duly authorised to execute the contract and bind the parties.
ARTICLE XI - Termination
Either party may terminate this contract at any time if-
1. The other party materially breaches the terms of this contract; provided
that the non-breaching party shall have given the breaching party written
notice of such breach and the breaching party shall have failed to remedy
the same within (30) days of receipt of such notice.
2. Performance of any part of this contract by a party is prevented or delayed
by reason of Force Majeure and cannot be overcome by reasonable diligence
to the satisfaction of both parties; or
3. The other party ceases, discontinues or indefinitely suspends its business
activities related to the services to be provided under this contract, or
the other party voluntarily or involuntarily files for bankruptcy.
In the event of termination, immediate notice shall be given by the party
requesting termination which should specify both the reason and the effective
date of termination.
PHAIRSON may terminate the agreement at any time upon 30 days written notice.
Upon any termination except for material breach of this agreement on the part of
PHAIRSON, PI shall deliver to PHAIRSON in the state they exist, as of the date
of termination, all work product, materials, including confidential information
and property belonging to PHAIRSON. PHAIRSON shall within (30) days after
termination, pay PI all Fees due as of the effective date of termination. For
the avoidance of doubt, Fees and Royalty payments due under Article III hereof
remain unaffected except in the event of material breach on the part of PI.
ARTICLE XII - Applicable Law
This contract shall be governed by the laws of England.
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ARTICLE XIII - Entire Agreement
This contract is intended by the parties as a final written expression of their
agreement and supersedes and replaces any prior oral or written agreement. The
parties acknowledge that they are not relying on any representation, agreement,
term or condition which is not set out in this Agreement.
ARTICLE XIV - Primary Employer
It is recognised that PI is employed by a primary employer, namely the Institute
for Biomedical Engineering and Department of Materials, Swiss Federal Institute
of Technology ETH and University of Zurich, and that the primary employer may
have certain rights over the Intellectual Property upon which the PI is inventor
that relate directly to work performed in the laboratory of the primary
employer. The contract between PI and PHAIRSON addresses the consulting
activities of PI, separate from his academic activities under the domain of this
primary employer.
IN WITNESS WHEREOF, the parties hereto have caused their authorised officials to
execute this contract as of the date(s) set forth below:
PHAIRSON PI
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxxx X X Xxxxxxx
----------------------------------------- ------------------------------------
Xxxxxx Xxxxxxx Xxxxxxxxx Xxxxxxx X X Xxxxxxx
DIRECTOR OF BUSINESS DEVELOPMENT
1st December 1998 5 January 1999
----------------------------------------- ------------------------------------
Date: Date:
/s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Xx Xxxxxxx Xxxxxxxx
CHIEF EXECUTIVE OFFICER
22/12/98
-----------------------------------------
Date:
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January 14, 2002
Phairson Medical Limited
Xxxxxxx Xxxxxxx House
City Forum
000 Xxxx Xxxx
Xxxxxx, XX0X 0XX
Xxxxxx Xxxxxxx
Attn: Xxxxxxx Xxxxxxxx
Life Medical Sciences, Inc.
XX Xxx 000
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Gentlemen:
I am writing concerning the Contract dated 1 December 1998 (the "Contract")
between myself and Phairson Medical Limited, a United Kingdom company
("Phairson"). Though the Contract expired 28 February 1999 by its terms,
pursuant to Article X thereof, our mutual responsibilities under Articles III,
VI and VII survive expiration of the Contract. Capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Contract.
Except for possible future Royalties under Article III, no amounts are owed to
me under the Contract.
Since no materials were designed under Part A of Attachment 1 of the Contract
during its term, I am not entitled to Royalties under paragraphs (a) or (b) of
Article III of the Contract.
Notwithstanding anything to the contrary contained in the Contract, I
acknowledge that I am only entitled to Royalties in respect of Products
incorporating technology covered by one or more claims contained in Phairson's
US patent application #256,484 which was filed on February 23, 1999 and its
foreign equivalents; provided, however, that any such Royalties shall become
payable and continue only so long as a valid issued patent exists and then only
in respect of revenue generated in countries in which such patent(s) exist. My
compensation in respect thereof would be covered by paragraph (c) or (d), as the
case may be, of Article III of the Contract.
I acknowledge that the primary employer, as contemplated by Article XIV of the
Contract, has no claim to Phairson's US patent application #256,484 which was
filed on February 23, 1999 or its foreign equivalents or the technology
underlying such applications.
I understand that Phairson is in the process of selling its polymer-related
assets and technology to Life Medical Sciences, Inc., a Delaware corporation
("LMS"). This letter is being delivered in order to induce LMS to enter into
such transaction and to assume Phairson's responsibilities under the Contract as
contemplated below. To the extent any of the provisions of this letter differ
from the terms of the Contract, the provisions of this letter shall control.
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By your signatures below, Phairson assigns its rights and responsibilities under
the Contract to LMS, and LMS assumes such rights and responsibilities. Upon my
receipt of countersigned copies of this letter from each of Phairson and LMS, I
hereby release Phairson of its responsibilities under the Contract.
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Xxxxxxxxx X X Xxxxxxx
Phairson Medical Limited
By:_____________________
Date:
Life Medical Sciences, Inc.
By:_____________________
Date:
