MASTER SERVICES AGREEMENT
Exhibit 6.2
This
Master Services Agreement (“Agreement”) is entered into
and dated as of May 1, 2015, by and between Stocosil Inc., a
Delaware corporation (“Company”), and Autotelic Inc., a
Delaware corporation (“Autotelic”). This
Agreement is retroactive to the effective date of January 1,
2015.
Background
A.
Company
is in the business of commercializing certain candidate drugs and
associated medical devices for monitoring drug levels in patients
(collectively, “Products”).
B.
Autotelic
is an affiliate of Company, which is in the business of developing
personalized Therapeutic Drug Monitoring (TDM) devices and provides
“Services,” as defined below, to the
Company.
C.
Company
desires to engage Autotelic to provide certain services upon the
terms and conditions set forth in this
Agreement. Autotelic shall use its own personnel,
furnishings, equipment and other assets to provide such Services
upon the terms and conditions set forth in this
Agreement.
D.
Company
and Autotelic desire to enter into a written agreement to provide a
full statement of their respective rights, duties and obligations
with respect to the Services provided for hereunder.
Agreement
Now,
therefore, in consideration of the mutual covenants set forth in
this Agreement, the parties agree as follows:
1. DUTIES. Autotelic
will provide Company with the following business functions and
services related to the Products (the “Services”) from
time to time during regular business hours at Company’s
request:
(a)
Chemistry,
Manufacturing and Controls services to define and document the
nature of the drug substance and drug product, the manner in which
both are made, and the manner in which the manufacturing process is
controlled as such relate to the Products;
(b)
Regulatory
planning, submission, and meeting with regulatory agencies globally
to obtain regulatory guidance, concurrence, and approval for
clinical trial, regulatory approval path way and ultimately
marketing approval. Some examples of regulatory services
include submission of new drug application, labeling and
marketing to FDA or any drug administration agency worldwide
related to the Products;
(c)
Nonclinical
services to support the design, execution and submission of
nonclinical studies to support IND/NDA approval. These
include mechanism of action studies, PK/ADME, Pharmacology, Safety
Pharmacology and Toxicology;
(d)
Clinical
services to support the NDA. These include protocol
design, submission, and approval as SPA. Interaction
with KOLs and CROs to arrive at the appropriate protocol
designs. The conduct and operation of the clinical
trials including budget negotiation, site selection, site
activation, data collection, data management, datalock, data
cleaning, report writing, safety monitoring.
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(e)
Human
resources function for Company’s employees, including
employee training, development & discipline, insurances, 401k,
stock options, candidate search, section, hiring and
termination;
(f)
Accounting,
forecasting and finance functions to include vendor selection,
purchasing, AP/AR, budgeting and financial projection, bookkeeping
and auditing, fund raising through loan or stock
sales;
(g)
corporate
compliance functions to include all SEC filings, K and Q, M&A
support and due diligence, legal document reviews including CDA,
contracts, corporate docs, all relevant corporate document filings
with relevant governmental agencies such as EDD, EIN, Federal,
State, and Local Registration; prosecution and
defense;
(h)
Business
commercialization services including but not limited to generating
leads, attending scientific/investor/partnering meetings,
identification of potential partners, evaluation of potential drug
candidates, term sheet negotiation, due diligence and licensing-in,
licensing-out services;
(i)
IP
services to include planning, drafting, submission of patent
application, responses to government agencies, prosecution, and
defense; and
(j)
Such
other services as Company may request that Autotelic agrees to
provide (which request and agreement shall be in
writing).
Autotelic
shall devote sufficient time and effort reasonably sufficient to
provide the Services to Company so as to allow Company to pursue
its business.
2. ADDITIONAL
DUTIES. Autotelic shall provide Company during
regular business hours with access to, and use of,
Autotelic’s computer systems, laboratories, test equipment,
telephone systems and office furniture and equipment (the
“Additional Services” and together with the Services)
reasonably sufficient to allow Company to pursue its
business.
3. RELATIONSHIP
OF THE PARTIES. It is understood that
Autotelic’s retention hereunder does not constitute a
master-servant relationship or that of an agent and
principal. Autotelic is authorized to subcontract with
other persons or entities for any of the Services, or to provide
the Services to other parties.
4. TERM. Subject
to the termination provisions set forth in this Section 4,
the
term of this Agreement shall commence on the Effective Date and
shall continue for ten (10) years, provided;
however, in theeventthat
one of the parties is in breach of the Agreement hereto at any
time, the other party may terminate this Agreement by giving a
written notice to the breaching party within thirty (30) days of
such breach. This
Agreement may also be terminated by either party upon not less than
90 days written notice; provided, however, that the final day of
the term of this Agreement shall be on the last day of the calendar
month in which any noticed termination date
falls. Sections 5, 6, 8 and 9 of this Agreement shall
survive any termination of this Agreement.
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5. OWNERSHIP
OF INTELLECTUAL
PROPERTY.
(a) Except
as may otherwise be agreed upon in writing between Company and
Autotelic, Company shall own, and Autotelic hereby assigns and
agrees to assign in the future as necessary, throughout the world
in perpetuity, all right, title and interest in all work product,
including all deliverables, and all rights in registrations,
filings and applications related to such work product which is
developed or created by Autotelic (whether alone or jointly with
Company or a third party) pursuant to the Services (“Work
Product”), including but not limited to, Work Product subject
to protection under applicable patent, copyright or trademark laws
or laws pertaining to trade secrets and database protection (all of
such rights in Work Product being referred to herein as
“Intellectual Property Rights”). Autotelic
also hereby irrevocably transfers and assigns to Company, and
waives and agrees never to assert, any and all “Moral
Rights” (as defined below) Autotelic may have in or with
respect to any Work Product. “Moral Rights”
means any rights to claim authorship of Work Product, to object to
or prevent any modification of any Work Product, to withdraw from
circulation or control the publication or distribution of any Work
Product, and any similar right, existing under judicial or
statutory law of any country in the world, or under any treaty,
regardless of whether or not such right is called or generally
referred to as a “moral right(s)”, “droit
moral”, “artist right(s)” or
otherwise.
(b) Autotelic
agrees to execute further documents, testify and provide additional
information as necessary to effectuate the intent of this Section 5
without further consideration, including executing a separate
document confirming the rights herein for the purpose of any
filings with government agencies. If Autotelic fails to
execute such further documents, Autotelic hereby irrevocably
appoints Company as its lawful attorney-in-fact, which constitutes
a power coupled with an interest, with the right to execute and do
all things necessary with respect to such documents to fulfill the
purpose of this Section 5.
6. INDEMNIFICATION
AND LIMITATION ON LIABILITY.
(a) Subject
to Section 6(c) and 6(e) hereof, Company shall defend, indemnify
and hold harmless Autotelic, its affiliates (other than Company)
and their respective officers, directors, shareholders, employees,
licensees, agents, successors and assigns from and against any and
all Liabilities (as defined in Section 6(d) hereof) arising in
connection with or resulting from (i) any injury to person or
damage to property that may occur in connection with the handling,
use or operation of any Products or any component thereof, (ii)
Company’s breach of any of its representations, warranties,
covenants, obligations, agreements or duties under this Agreement
or Company’s gross negligence, recklessness or intentional
misconduct, (iii) any sales, licensing or other transfers by
Company of Products in violation of any law, rule, or regulation,
including the infringement of another party’s intellectual
property rights (excluding Liabilities for which Autotelic is
obligated to defend Company pursuant to Section 6(b)(i)
below) or (iv) any violation and/or alleged violation by
Company or the Product or any component thereof of any governmental
law, rule and/or regulation.
(b) Subject
to Section 6(c) and 6 (e) hereof, Autotelic shall defend, indemnify
and hold harmless Company, its affiliates (other than Autotelic)
and their respective officers, directors, shareholders, employees,
licensees, agents, successors and assigns from and against any and
all Liabilities arising in connection with or resulting from (i)
the willful infringement by Autotelic of the proprietary rights of
any third party arising from the Services, (ii) Autotelic’s
breach of any of its representations, warranties, covenants,
obligations, agreements or duties under this Agreement or gross
negligence, recklessness or intentional misconduct.
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(c) Notwithstanding
anything to the contrary contained herein, neither party shall have
any obligation to indemnify, defend or hold harmless hereunder with
respect to any Liabilities arising out of or resulting from the
breach by the other party of any of its representations,
warranties, covenants, obligations, agreements or duties under this
Agreement arising from any gross negligence,
recklessness or intentional misconduct by the other
party.
(d) As
limited by Section 6(e) below, for purposes of this Agreement,
“Liabilities” shall mean any and all claims of and
liabilities to third parties and expenses incurred in connection
therewith (whether or not in connection with proceedings before a
court, arbitration panel, administrative agency, hearing examiner
or other tribunal), judgments, awards, fines, penalties,
settlements, investigations, costs, and attorneys’ fees and
disbursements.
(e) Notwithstanding
anything herein to the contrary, absent fraud, willful misconduct
or gross negligence, neither party shall be liable to the other for
any claim of any kind, or for any damage arising out of or in
connection with or resulting from this Agreement, or from the
performance or breach thereof, in an amount not to exceed the total
aggregate amount incurred for the work performed hereunder. NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES
(INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOST SAVINGS, OR LOSS
OF GOOD WILL) ARISING UNDER OR IN CONNECTION WITH A BREACH OR
ALLEGED BREACH OF THIS AGREEMENT, EVEN IF SUCH OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
7. COMPENSATION.
(a) Services
provided by Autotelic personnel.
i. During
the period commencing January 1, 2015 (the “Effective
Date”) and until the date that Company has completed an
equity offering of either common or preferred stock in which the
gross proceeds therefrom is no less than $10,000,000 (the
“Equity Finance Date”), Company shall pay Autotelic the
following compensation: cash in an amount equal to the Actual Labor
Cost (paid on a monthly basis), plus warrants for shares
of the Company’s common stock with a strike price no less
than the fair market value of the Company’s common stock at
the time said warrants are issued. Warrants shall be
issued to Autotelic each time that the Company receives an
independent appraisal of the fair market value of a share of the
Company’s common stock as of a stated date (the
“Valuation Date”) that complies with the
“reasonable application of a reasonable valuation
method” standard set forth in Treasury Regulations
§1.409A-1(b)(5)(iv)(B) (a “409A
Valuation”). Each time that a 409A Valuation is
received, the Company shall issue warrants to Autotelic for the
number of shares of its common stock calculated as
follows: (1) the Actual Labor Cost for the period
commencing on the later of (A) the Effective Date or (B) the day
after the Valuation Date used in the latest 409A Valuation issued
prior to the new 409A Valuation, and ending on the Valuation Date
of the new 409A Valuation, divided by (2) the warrant price as
calculate using fair market value of a share of the Company’s
common stock as set forth in the new 409A Valuation. The
warrant price will be documented and be part of the 409A
valuation. For example, say that the Company’s
first 409A Valuation is issued on June 15, 2015, and that it
concludes that the warrant price of a share of the Company’s
stock as of May 31, 2015 (the Valuation Date) is $1.00 and FMV of
$5.00, and that the Actual Labor Cost for the period January 1,
2015 – May 31, 2015 is $1,000. Promptly after
the Company receives the 409A Valuation on June 15, 2015, it would
issue to Autotelic warrants for 1,000 shares of its common stock
($1,000 of Actual Labor Cost divided by $1 per warrant price) at an
exercise price of $5.00 per share. If the next 409A
Valuation is issued on January 15, 2016 and it concludes
that
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the warrant
price of a share of the Company’s common stock as of December
31, 2015 (the Valuation Date) is $1.05 and FMV of $5.00, and the
Actual Labor Cost for the period June 1 – December 31,
2015 is $1,100, then promptly after it receives the 409A Valuation
on January 15, 2016 the Company would issue to Autotelic warrants
for 1,047 shares of its common stock ($1,100 Actual Labor Cost
divided by $1.05 per warrant price) at an exercise price of $5.00
per share.
ii. After
the Equity Financing Date, Company shall pay Autotelic a cash
amount equal to the Actual Labor Cost plus 100% xxxx up of
providing the Services.
(b) With
reference to the provision of the Services and subject to Section
7(e), Actual Cost shall mean:
i.
In
the case of Autotelic’s personnel who provide Services to
Company, to the product of (i) the “Average
Percentage”, defined below, of such
personnel multiplied by (ii) the actual gross payroll in
the corresponding month of such personnel. The
“Average Percentage” shall mean the total percentage,
based on the employee daily working time sheet, of the personnel
worked on each project divided by actual working days of each
month. Upon request, Autotelic shall provide
Company with weekly time sheet to substantiate percentage of
services performed.
ii.
In
the case of space used at Autotelic’s facilities, a pro-rata
portion of all occupancy costs of each such facility, including,
without limitation, rent, utilities, maintenance and taxes,
pro-rated based upon the amount of space of such facility devoted
solely to Company’s use compared to the total space of such
facility. In the case of any facility owned by
Autotelic, rent shall be imputed based on the fair market value of
comparable space similarly located and comparably equipped, as
agreed upon in writing by the parties.
iii.
In
the case of expenses paid by Autotelic to third party contractors
or material used in connection with the performance of the
contracts, including but not limited to clinical trial,
non-clinical trial, CMO, FDA regulatory process, CRO and CMC,
Company shall pay Autotelic an amount equal to the actual invoice
amount plus 20% xxxx up of providing the Services. Upon request,
Autotelic shall provide Company with actual invoice received from
the third party contractors or vendors.
iv.
In
the case of acquiring other assets by Autotelic in providing the
Services such as equipment, software or databases, Company shall
pay Autotelic an amount equals to the actual invoice amount times
“estimated usage percentage”, without additional xxxx
up. The “estimated usage percentage” shall
be determined, based on the annual projected usage percentage,
estimated by the Autotelic’s project manager at the time of
the acquisition, which shall be reviewed on an annual
basis.
(c) Company
shall promptly reimburse Autotelic for any out-of-pocket expenses
incurred in connection with the provision of the
Services.
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(d) Autotelic
shall provide an accounting record of all identified Actual Cost,
including but not limited to the payroll of
employees, rent, information technology sharing
arrangements, the third party contractors or vendors and capital
equipment costs, if any, which has been provided to Company by
Autotelic prior to the signing of this agreement.
(e) Autotelic
shall maintain sufficient books and records to document the Actual
Costs of providing the Services for not less than one
year. Company shall have the right to audit, or have
audited by its accountants, such books and records upon three
business days’ written notice to Autotelic during
Autotelic’s normal business hours in a manner reasonable
designed to minimize interference with Autotelic’s normal
business activities. Any such audit shall be at
Company’s sole cost and expense, except that if such audit
reveals overcharges of more than three percent, Autotelic shall
reimburse Company for the reasonable cost of such
audit.
8. Payment
Terms
(a) Except as otherwise set forth in this Agreement, any
undisputed sum due to Autotelic pursuant to this Agreement shall be
payable within thirty (30)days following Company's acceptance of
the Service/Products or receipt of the applicable invoice by
Autotelic, whichever is later.
(b) Notwithstanding
any other provision in this Agreement to the contrary, Company
shall not withholds any specific amount to Autotelic because of a
legitimate dispute between the parties as to that specific amount,
pending the resolution of the disputed amount.
(c) In
the event that Company is not able to remit any amount as set forth
in Section 8(a), Company agrees to enter a promissory note
agreement to evidence the amount owed to Autotelic. The
promissory note agreement shall be comprised of certain terms,
which will include but not limited to an interest rate of three (3)
percent per annum and a maturity date for no more than two (2)
years.
(d) Company
acknowledges and agrees that it shall have no right to set off
against any amounts under this Agreement, or any invoices issued by
Autotelic related to this Agreement, any and all amounts due to
Autotelic from Company.
9. CONFIDENTIALITY.
(a) In
furthering the transactions contemplated in this Agreement, each of
the parties may have in the past or may in the future disclose its
Confidential Information to the other party. For
purposes of this Agreement, “Confidential Information”
means all information and material which is proprietary to the
disclosing party, whether or not marked as
“confidential” or “proprietary” and which
is disclosed to another party hereto, which relates to the
disclosing party’s past, present, or future research,
development, or business activities. Confidential
Information does not include any information which (i) was in the
lawful and unrestricted possession of the receiving party prior to
its disclosure to the receiving party by the disclosing party, (ii)
is or becomes generally available to the public by acts other than
those of the receiving party after receiving it, or (iii) has been
received lawfully and in good faith by the receiving party from a
third party who did not derive it from the
disclosing party or (iv) is required to be
disclosed in a judicial or administrative proceeding, or is
otherwise requested or required to be disclosed by law or
regulation (provided the receiving party provides reasonably prompt
notice of such obligation to the disclosing party after receiving
party learns of such obligation).
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(b) Each
party hereto agrees not to disclose to third parties other than the
parties’ professional advisers, or allow access by third
parties, to any Confidential Information of the other party during
the term of this Agreement and for 5 years afterwards as
the pertinent information or data remain Confidential Information,
regardless of whether the Confidential Information is in written or
tangible form.
The
party’s obligations hereunder, including the obligations to
protect and preserve the secrecy of Proprietary Information
delivered hereunder and to return Proprietary Information, shall
survive any termination or expiration of this Agreement for a
period of five (5) years.
(c) Each
of the parties understands and acknowledges that the Confidential
Information of the other party has been developed or obtained by
the investment of significant time, effort and expense and provides
the disclosing party with a significant competitive advantage in
its business. If the receiving party fails to comply
with any obligations pursuant to this Section 8 the
disclosing party will suffer immediate, irreparable harm for which
monetary damages will provide inadequate
compensation. Accordingly, the parties agree that the
disclosing party will be entitled, in addition to any other
remedies available to it, at law or in equity, to injunctive relief
to specifically enforce the terms of this Section 8
10. MISCELLANEOUS.
(a) Both
parties agree that the Agreement is enforceable even if a
liquidation event occurs. Liquidation event is defined
as a merger or consolidation (other than one in which stockholders
of the Company own a majority by voting power of the outstanding
shares of the surviving or acquiring corporation) and a sale,
lease, transfer, exclusive license or other
disposition of all or substantially all of the assets of the
Company will be treated as a liquidation event
(b) Each
party hereto shall cooperate with the other party and agrees to
execute and deliver all further instruments, documents and papers,
and shall perform any and all acts necessary or reasonably
desirable, to give full force and effect to all of the terms and
provisions of this Agreement.
(c) The
headings herein are for convenience only, do constitute a part of
this Agreement, and shall not be deemed to limit or affect any of
the provisions hereof.
(d) This
Agreement shall be binding on and inure to the benefit of the
parties and their respective successors and permitted assigns.
Neither party shall have the right or the power to assign any of
its rights, or delegate or subcontract the performance of any of
its obligations under this Agreement, without the prior written
authorization of the other party, such written authorization not to
be unreasonably withheld or delayed; provided, however, that the
prior written authorization of the other party shall not be
required for a party to assign any of its rights, or delegate or
subcontract the performance of any of its obligations hereunder to
an affiliate or pursuant to a sale of substantially all of the
assets of the party, merger, consolidation, reorganization or other
similar transaction.
(e) This
Agreement contains the entire agreement between Autotelic and
Company, concerning the subject matter hereof, supersedes all other
drafts, understandings or agreements, and shall be governed by and
construed under the laws of the State of California, without regard
to choice of law provisions. This Agreement shall not be
amended or modified unless by written agreement between Company and
Autotelic. Nothing herein shall limit or modify the
duties, rights or obligations of Company and the Autotelic arising
from Autotelic’s direct or indirect interest in Company or
under any agreement in respect of such interest. In the
event of a conflict between this Agreement and any such agreement,
the terms of such agreement shall control.
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(f) Except
for a party’s rights to injunctive relief under Section 8 (c)
above, any controversy or claim arising out of or relating to this
Agreement or relating to the Services, the Work Product, the
parties’ relationship, the enforcement or interpretation of
this Agreement, or because of an alleged breach, default or
misrepresentation in connection with this Agreement, shall be
determined by final, binding and confidential arbitration. The
arbitration proceedings shall be held and conducted by a single
arbitrator in accordance with the Comprehensive Arbitration Rules
and Procedures of JAMS (the “JAMS Rules”), as modified
by this Agreement. Such arbitration shall take place in Los
Angeles, California, and be initiated by any party in accordance
with the JAMS Rules. The demand for arbitration shall be made by
any party hereto within a reasonable time after the claim, dispute
or other matter in question has arisen, and in any event shall not
be made after the date when institution of legal proceeding, based
on such claim, dispute or other matter in question, would be barred
by the applicable statute of limitations. California Code of Civil
Procedure Section 1283.05, which provides for certain discovery
rights, shall apply to any such arbitration, and such Code Section
is incorporated herein by reference. Discovery issues shall be
decided by the arbitrator. Post-hearing briefs shall be permitted.
The arbitrator shall render a decision within twenty (20) days
after the conclusion of the hearing(s). In reaching a decision, the
arbitrator shall have no authority to change, extend, modify or
suspend any of the terms of this Agreement, or to grant an award or
remedy any greater than that which would be available from a court
under the statutory or common law theory asserted. The arbitrator
shall issue a written opinion that includes the factual and legal
basis for any decision and award. The arbitrator shall apply the
substantive law (and the law of remedies, if applicable) of
California or federal law, or any of them, as applicable to the
claim(s) asserted. Judgment on the award may be entered in any
court of competent jurisdiction. In addition, either party may
seek, from a court of competent jurisdiction in Los Angeles County,
provisional remedies or injunctive relief in support of their
respective rights and remedies hereunder without waiving any right
to arbitration. Judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction
thereof. The arbitrator shall allocate all costs and
expenses of the arbitration (including legal and accounting fees
and expenses of the respective parties) to the parties in the
proportions that reflect their relative success on the merits
(including the successful assertion of any defenses).
(g) If
any provision of this Agreement is declared to be invalid or
unenforceable by a court of competent jurisdiction, such invalidity
or unenforceability shall not affect any other provision of this
Agreement. All remaining provisions shall be fully
severable, and this Agreement shall be construed and enforced as if
such invalid or unenforceable provisions had never been part of
this Agreement.
(h) This
Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Facsimile or electronically
mailed scanned signatures are acceptable and shall constitute an
original signature.
(i) Any
notices or communications required or permitted to be given
hereunder may be delivered by hand, deposited with a nationally
recognized overnight carrier, electronic-mail, or mailed by
certified mail, return receipt requested, postage prepaid, in each
case, to the address of the other party first indicated above (or
such other addressee as may be furnished by a party in accordance
with this paragraph). All such notices or communications shall be
deemed to have been given and received (a) in the case of personal
delivery or electronic-mail, on the date of such delivery, (b) in
the case of delivery by a nationally recognized overnight carrier,
on the third business day following dispatch and (c) in the case of
mailing, on the seventh business day following such
mailing.
(j) In
the event that any party to this Agreement shall commence any suit
or action to interpret or enforce this Agreement, the prevailing
party in such action shall recover that party's costs and expenses
incurred in connection with the suit or action, including attorney
fees and costs of appeal, if any.
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The
authorized representative of each party hereby executes this
Agreement as of the date first set forth above.
By:
Pyng
Soon, CEO
AUTOTELIC INC.
By:
Xxxx
Xxxxx,
COO
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