EXCLUSIVE LICENSE AGREEMENT WITH PURCHASE OPTION
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THIS EXCLUSIVE LICENSE AGREEMENT WITH PURCHASE OPTION ("Agreement") effective
the 23rd day of September, 1996, is made between Phanos Technologies, Inc. a
California corporation ("Phanos"), with offices at 0000 Xxxxxxx Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxxxx 00000, and Zynaxis, Inc., a Pennsylvania corporation
("Zynaxis"), with offices at 000 Xxxxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000.
WHEREAS:
A. Zynaxis is the owner of certain intellectual property rights under various
patents, patent applications, trademarks and associated goodwill, grants,
research and feasibility agreements ("Zynaxis Intellectual Property",
identified in Appendix I attached hereto) and of certain proprietary
know-how, technical data, procedures and research results ("Zynaxis
Know-How") relating to agents which improve the therapeutic performance of a
therapeutically-active compound by inclusion of a variety of structures
which include lipophilic hydrocarbon chains that can insert into cell
membranes or other hydrophobic regions ("Molecular Delivery Systems"), said
Zynaxis Intellectual Property and Zynaxis Know-How relating to Molecular
Delivery Systems being referred to herein collectively as "Zynaxis
Information";
B. Zynaxis wishes to maintain the Zynaxis Information as secret and
confidential and to preserve the value of these assets;
C. Phanos wishes to obtain immediately an exclusive license under the Zynaxis
Information, and to obtain immediately an option to acquire full ownership
of the Zynaxis Information in order to give Phanos a period of time during
which it can further evaluate the Zynaxis Information and make a decision
whether to exercise such option;
X. Xxxxxx wishes to maintain access to certain Zynaxis personnel with
specialized know-how in the design, synthesis and characterization of
Molecular Delivery Systems and to the results of certain projects ongoing
under Zynaxis-held Small Business Innovative Research Grants during the term
of the exclusive license and option granted herein;
NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements contained herein, the parties agree as follows:
1. Zynaxis shall disclose to Phanos the Zynaxis Information. Phanos shall use
the Zynaxis Information solely and exclusively for the purpose of operating
under the exclusive license granted herein and for evaluating whether Phanos
wishes to exercise the option to purchase the Zynaxis Information granted
herein.
2. Exclusive License Grant. Zynaxis grants to Phanos an exclusive worldwide
license under the Zynaxis Information subject to any third party rights
previously conveyed under existing grants and/or research and feasibility
agreements identified in Appendix II attached hereto (the "Exclusive
License"). The term of the Exclusive License shall run until the expiration
of the last-to-expire Zynaxis Intellectual Property, unless sooner
terminated in accordance with the provisions of this Agreement.
3. Option Grant. Zynaxis grants to Phanos an exclusive option to purchase (the
"Option") the full right, title and interest in, to and under all or so much
of the Zynaxis Information as Phanos, in its sole discretion, may wish to
acquire. The Option shall be exercisable by Phanos during the one hundred
twenty (120) day period beginning upon the execution date of this Agreement
("Option Period") by providing written notification to Zynaxis. Within five
(5) days following receipt of such written notification, or at such later
time as the parties may agree, the parties shall execute a mutually
agreeable Asset Purchase Agreement and Phanos shall pay to Zynaxis the
Purchase Price identified in paragraph 4 below. If Zynaxis delays the
execution of a previously agreed-upon Asset Purchase Agreement, and the
delay is exclusively the fault of Zynaxis, the Purchase Price identified in
paragraph 4 below shall be reduced by three percent (3%), and shall be
reduced an additional three percent (3%) for every subsequent thirty day
period during which Zynaxis fails to execute an Asset Purchase Agreement.
4. One-Time Payments. Phanos shall pay to Zynaxis upon execution of this
agreement a non-refundable Exclusive Option Fee of five thousand dollars
($5,000). Additionally, Phanos shall pay to Zynaxis an Exclusive License Fee
of one hundred ninety five thousand dollars ($195,000), of which forty five
thousand dollars ($45,000) shall be paid to Zynaxis upon execution of this
agreement and one hundred fifty thousand dollars ($150,000) shall be paid to
Zynaxis within the thirty (30) day period beginning upon the execution date
of this Agreement. Should Phanos desire to exercise the Option granted in
paragraph 3 above, Phanos shall pay to Zynaxis the Purchase Price of seven
hundred and twenty five thousand dollars ($725,000), against which the
Exclusive Option Fee and Exclusive License Fee amounts already paid by
Phanos shall be fully credited.
5. Running Royalties on Sales. Phanos shall pay to Zynaxis under the Exclusive
License running royalties equal to fifteen percent (15%) of all sums that
Phanos receives from worldwide sales of products that embody the Zynaxis
Information.
6. Non-Exercise of Option; Cancellation of Exclusive License. If Phanos does
not exercise the Option granted in paragraph 3 above during the Option
Period, Zynaxis may cancel the Exclusive License by re-paying to Phanos the
Exclusive License Fee of one hundred ninety five thousand dollars ($195,000)
within thirty days following the expiration of the Option Period.
7. Zynaxis, during the Option Period, shall not license, sell, encumber, or
otherwise dispose of any rights in the Zynaxis Information to any third
party without the written consent of Phanos, and shall use all reasonable
efforts to preserve the value of the Zynaxis Information.
8. Zynaxis, during the Option Period, will use all reasonable efforts to
maintain staff, funding and research progress on projects ongoing under
Zynaxis-held Small Business Innovation Research (SBIR) Grants R44 HL1626-03
and R43 H155883-01, subject to the limits of funding provided by NIH
therefor.
9. Upon the exercise of the Option by Phanos, Zynaxis will use all reasonable
efforts to obtain any consent needed to effect the transfer of third-party
agreements from Zynaxis to Phanos, and shall cooperate fully with Phanos in
executing and delivering such other documents as may be needed or reasonably
desired by Phanos to perfect or evidence its title, including the execution
of documents suitable for recordation in the U.S. Patent and Trademark
Office and the patent offices of foreign countries.
10. Zynaxis shall not disclose the identity or nationality of Phanos or any
individuals associated therewith without the prior written consent of
Phanos, except as is required by government regulation.
11. Phanos shall keep confidential and not disclose the Zynaxis Information to
any person or business ally not having entered into a Confidentiality
Agreement with Zynaxis without the prior written consent of Zynaxis and
shall not use the Zynaxis Information for any purpose other than in
furtherance of its operations under the exclusive license and Option granted
herein.
12. The obligation of confidentiality shall survive termination and/or
expiration of this Agreement and shall expire five years following the date
of execution of this Agreement. The obligation of confidentiality shall not
extend to information which,
(a) prior to receipt from Zynaxis was known to Phanos;
(b) subsequent to receipt from Zynaxis is received by Phanos from another
entity who has no obligation of confidentiality to Zynaxis with respect
to such information; or
(c) is or becomes available to the public through no fault of Phanos.
13. The standard of care exercised by Phanos to protect the Zynaxis Information
shall be no less than the degree of care used by Phanos acting reasonably
and prudently to protect its own confidential and proprietary information.
14. In the event that Phanos does not exercise its Option and Zynaxis terminates
the exclusive license pursuant to paragraph 3 above by returning the
Exclusive License Fee to Phanos, Phanos shall return to Zynaxis any and all
materials in relation to the Zynaxis Information delivered to it by Zynaxis
pursuant to this Agreement and Phanos shall not retain copies of such
material for any purpose. Nothing in this Agreement shall hinder or be
construed so as to hinder Phanos' rights and activities under the Asset
Purchase Agreement and Reagent Business Operation Agreement executed by
Zynaxis and Phanos on June 21, 1995.
15. Grant of Security Interest. The parties recognize that Phanos has already
committed and will continue to commit considerable effort and financial
resources to the development of products and markets for products embodying
the Zynaxis Information, and that Zynaxis' non-performance of or inability
to perform the obligations set forth in this Agreement could cause Phanos to
suffer expectancy damages (for example, the amount that Phanos could realize
from the sale or license to a third party of the Zynaxis Information, less
the Purchase Price) in excess of the Purchase Price. Accordingly, Phanos, as
additional security for the complete and timely performance and satisfaction
of all Zynaxis' obligations hereunder hereby grants unto Phanos, its
successors and assigns, a continuing lien and security interest in the
patents, patent applications and trademark registrations (and associated
goodwill) identified in Attachment I, together with all renewals, reissues
and extensions thereof, and all claims for damages by reason of past
infringement with the right to xxx for and collect the same, and all license
rights, to Phanos. As used herein, the term "obligations" shall mean all
duties of payment and performance, whether direct or indirect, both now
existing and arising from time to time, owed by Zynaxis to Phanos under this
Agreement. Zynaxis shall cooperate fully with Phanos in executing and
delivering such other documents as may be needed or reasonably desired by
Phanos to perfect or evidence its security interest, including the execution
of a document evidencing the Exclusive License and security interests
granted herein and which is suitable for recordation in the U.S. Patent and
Trademark Office.
16. This Agreement shall be governed by and construed in accordance with the
laws of the State of California. This Agreement and any and all rights and
obligations of a party hereunder may be assigned, delegated, sold,
transferred, sublicensed or otherwise disposed of by either party (except
where such would be inconsistent with the obligations of that party
hereunder) upon written notification to the other party.
17. In the event that any provision of this Agreement shall be held to be
invalid, illegal, or otherwise voidable or unenforceable, such provision
shall be deemed to be severed from the Agreement and the balance of the
Agreement shall continue in full force and effect.
18. Entire Agreement and Integration. This Agreement integrates all of the terms
and conditions herein and constitutes the entire agreement of the parties
and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
Zynaxis, Inc. Phanos Technologies, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx Xxxxxx
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Chief Executive Officer President
