EXHIBIT 10.8
EXCLUSIVE LICENSE AGREEMENT
by and between
ALPHA RESEARCH GROUP, LLC and XXXX X. XXXXXX
and
PATHOGENICS, INC.
dated
May 25, 2005
THIS LICENSE AGREEMENT effective as of May 25, 2005 ("Effective Date"), by
and between ALPHA RESEARCH GROUP, LLC, a limited liability corporation organized
and existing under the laws of Nevada and having its principal office at 0000
Xxxxxxx Xxxxx, Xxxx, Xxxxxx 00000 together with Xxxx X. Xxxxxx, an individual
residing at 0000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000 ("XXXXXX," ALPHA RESEARCH and
XXXXXX referred to together as "LICENSORS"), and PATHOGENICS, INC. a corporation
organized and existing under the laws of the State of Delaware and having its
principal office at 00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, 00000, Xxxxxx
Xxxxxx of America ("PATHOGENICS" or "LICENSEE").
W I T N E S S E T H:
WHEREAS, ALPHA RESEARCH has been assigned from XXXXXX certain Patent Assets
and Know-How pursuant to the XXXXXX Assignments and is the owner of the
Intellectual Property, all as defined herein and;
WHEREAS, PATHOGENICS desires to obtain exclusive license rights, with a
right to grant sublicenses, under the Intellectual Property, and ALPHA RESEARCH
and XXXXXX desire to grant such license to PATHOGENICS, upon the terms and
conditions set forth herein and;
WHEREAS, PATHOGENICS in consideration for an exclusive license and other
rights as set forth herein agrees to provide sufficient funding for (i) the
protection of ALPHA RESEARCH Intellectual Property and (ii) the continued
clinical development of products stemming from the Intellectual Property.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
ARTICLE I
DEFINITIONS
Unless specifically set forth to the contrary herein, the following terms,
where used in the singular or plural, shall have the respective meanings set
forth below:
1.1. "Act" shall mean the Federal Food Drug and Cosmetic Act of 1934, and
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the rules and regulations promulgated thereunder, or any successor act, as the
same shall be in effect from time to time.
1.2. "Affiliate" shall mean (i) any corporation or business entity of which
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more than fifty percent (50%) of the securities or other ownership interests
representing the equity, the voting stock or general partnership interest are
owned, controlled or held, directly or indirectly, by a Party; (ii) any
corporation or business entity which, directly or indirectly, owns, controls or
holds more than fifty percent (50%) (or the maximum ownership interest permitted
by law) of the securities or other ownership interests representing the equity,
voting stock or general partnership interest of a Party or (iii) any corporation
or business entity of which a Party has the right to acquire, directly or
indirectly, at least fifty percent (50%) of the securities or other ownership
interests representing the equity, voting stock or general partnership interest
thereof.
1.3. "Business Day(s)" means any day that is not a Saturday or a Sunday or a
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day on which the New York Stock Exchange is closed.
1.4. "Calendar Quarter" shall mean the respective periods of three (3)
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consecutive calendar months ending on March 31, June 30, September 30 and
December 31.
1.5. "Calendar Year" shall mean each successive period of twelve (12) months
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commencing on January 1 and ending on December 31.
1.6. "cGMP" shall mean current applicable good manufacturing practices as
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defined in regulations promulgated by the FDA under the Act relating to the
formulation, manufacture, testing prior to delivery, storage and delivery of the
Product.
1.7. "Centralized Procedure" shall mean the European Community Centralized
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Procedure for marketing authorization in accordance with Council Regulation EEC
(2309-93) or any successor regulations.
1.8. "CFR" shall mean the United States Code of Federal Regulations.
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1.9. "Effective Date" shall mean the date first above written.
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1.10. "FDA" shall mean the United States Food and Drug Administration and
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any successor agency having substantially the same functions, and any
corresponding or successor regulatory authority in Europe or having jurisdiction
over the Centralized Procedure if the context so indicates.
1.11. "Field-of-Use" shall mean the treatment or prevention of any
neurological, psychiatric, psychological or nervous system indication, disease
or disorder or their symptoms including, but not limited to:
- the treatment of Xxxxxxxxx Disorders; the prevention and/or
symptomatic treatment of:
o Idiopathic Parkinson's Disease
o Parkinson's Plus Disorders
o Atypical Parkinsonianism conditions, such as:
- Progressive Supra Nuclear Palsy
- Multiple Symptom Atrophy
- other neurodegenerative disorders of the basal ganglia
o the prevention and/or treatment of syndromes and complications
associated with the long term use of levodopa and dopaminergic agents
and; including, but not limited to:
- levodopa induced dyskinesias
- "freezing"
- ON/OFF motor fluctuations
o the prevention and/or treatment of "Run-Away" dyskinesias that
manifest in 15%-30% of Xxxxxxxxx'x Disease patients receiving fetal
nigral and/or stem cell transplant procedures
- the treatment of schizophrenia, including the prevention or treatment
of negative symptoms
- catatonia and/or secondary movement disorders
o Parkinsonianism
o Tardive Dyskinesia
o Dopamine related disorders including reactions to long term
dopamine antagonist pharmacotherapy
- Autoimmune disorders
- Rheumatoid Arthritis
- Lupus
- Multiple Sclerosis
- Alzheimer's Disease
- Neurological Events
o Cerebral Vascular Accident (CVA)
o Stroke
o Aneurysm
o Ischemic Events
o Neural trauma induced by traumatic brain injury
- Movement Disorders
Notwithstanding anything to the contrary above, the Field-of-Use shall not
include any oncological disease even if it manifests itself as a disease of the
nervous system.
1.12. "First Commercial Sale" shall mean the first sale of Product in any
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country by PATHOGENICS, its Affiliate or its sublicensee(s), for end use or
consumption, after all required Regulatory Approvals have been granted by the
governing health authority of such country.
1.13. "GAAP" means generally accepted accounting principles in the United
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States.
1.14. "Improvement" shall mean any and all improvements and enhancements,
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patentable or otherwise, related to the Technology or Product for use in the
Field-of-Use and the Territory including, without limitation, in the
manufacture, formulation, ingredients, preparation, presentation, means of
delivery or administration, dosage, indication, use or packaging of the
Technology or Product.
1.15. "Intellectual Property" shall mean the Patent Assets and Know-How.
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1.16. "Know-How" shall mean all factual and proprietary knowledge,
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information, expertise and materials pertaining to the Technology or Product for
use in the Field-of-Use and the Territory, and used or useful in the development
of the Product of a nature normally held in the industry as trade secrets or
otherwise as confidential information, including, without limitation,
discoveries, information, Improvements, processes, formulas, data, and
inventions, patentable or otherwise, whether or not capable of precise separate
definition, which
(a) relate to the Technology or Product; and
(b) are owned by LICENSORS or are in LICENSORS' possession or
control, have been assigned to ALPHA RESEARCH by XXXXXX or are
otherwise subject to the XXXXXX Assignments and/or as to which ALPHA
RESEARCH has the right to license or sublicense to Third Parties.
Such know-how shall include, without limitation, all chemical, pharmaceutical,
toxicological, preclinical, clinical, assay control, regulatory, and any other
information used or useful for the development, manufacturing and/or regulatory
approval of the Technology or Product, including such rights which LICENSORS may
have to information developed by Third Parties.
1.17. "Net Sales" shall mean the actual gross amount invoiced by PATHOGENICS
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and its Affiliates for commercial sales of Product in the Territory, commencing
upon the date of First Commercial Sale, after deducting, in accordance with
GAAP, the following :
(i) trade, cash and quantity discounts;
(ii) recalls, credits and allowances on account of returned or
rejected Product, including allowance for breakage or spoilage;
(iii) rebates and chargebacks;
(iv) retroactive price reductions;
(v) sales or excise taxes, VAT or other taxes, and transportation and
insurance charges and additional special transportation, custom
duties, and other governmental charges; and
(vi) rebates or similar payments paid in connection with sales of
Product to any governmental or regulatory authority in respect of any
state or federal Medicare, Medicaid or similar programs in any country
of the Territory.
Sales or other transfers between PATHOGENICS and its Affiliates shall be
excluded from the computation of Net Sales and no payments will be payable on
such sales or transfers except where such Affiliates are end users, but Net
Sales shall include the subsequent sales to Third Parties by such Affiliates.
1.18. "Party" shall mean ALPHA RESEARCH, XXXXXX or PATHOGENICS.
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1.19. "Patent Assets" shall mean the patents and patent applications which
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as of the Effective Date or at any time during the term of this Agreement
(excluding the U.S. Provisional Application entitled "ATM Activators For Cancer
Treatment", filed on October 26, 2004)
(a) are owned by LICENSORS or which ALPHA RESEARCH through the XXXXXX
Assignments or any other license or otherwise has or acquires rights
from a Third Party, and
(b) relate to the Technology, Product or any Improvement for use in
the Field-of-Use and the Territory, including but not limited to
methods of their development, manufacture, or use, or otherwise relate
to LICENSORS' Know-How, including all certificates of invention and
applications for certificates of invention, substitutions, divisions,
continuations, continuations-in-part, patents issuing thereon or
reissues or reexaminations thereof and any and all foreign patents and
patent applications corresponding thereto, supplementary protection
certificates or the like of any such patents and current and future
patent applications, including but not limited to the patents and
patent applications listed on Schedule 1.19 hereto and the patents and
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patent applications included in the definition of Patent Rights under
the XXXXXX Assignments, and any counterparts thereof which have been
or may be filed in other countries.
1.20. "Product" shall mean any product in final form for commercial sale
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which contains the Technology for use in the Field-of-Use and the Territory.
1.21. "Proprietary Information" shall mean any and all scientific, clinical,
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regulatory, marketing, financial and commercial information or data, whether
communicated in writing, orally or by any other means, which is owned and under
the protection of one Party and is being provided by that Party to the other
Party in connection with this Agreement.
1.22. "Regulatory Approval" means all approvals (including pricing and
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reimbursement approvals required for marketing authorization), product and/or
establishment licenses, registrations or authorizations of all regional,
federal, state or local regulatory agencies, departments, bureaus or other
governmental entities, necessary for the manufacture, use, storage, import,
export, transport and sale of Product in a regulatory jurisdiction.
1.23. "Royalty Year" shall mean each successive twelve (12) month period
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commencing with the first day of the first month in which occurs the First
Commercial Sale.
1.24. "XXXXXX Assignments" shall mean the Assignments by and between ALPHA
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RESEARCH and XXXXXX, complete copies of which are attached hereto as Exhibit
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1.24.
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1.25. "Sublicense Payments" shall mean any payments received by PATHOGENICS
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from sublicensees of rights granted by LICENSORS to PATHOGENICS under Section
2.1 of this Agreement, as consideration for the grant of such sublicense,
including without limitation, license fees, milestone payments, license
maintenance fees, and royalty payments based on net sales of Product by such
sublicensee, but excluding amounts received by PATHOGENICS (i) in connection
with or as a result of amounts or payments to fund or reimburse PATHOGENICS'
research and development in connection with the Technology or Product or (ii) in
connection with or as a result of amounts or payments made as consideration for
a sublicensee's purchase of securities of PATHOGENICS.
1.26. "Technology" shall mean any novel therapeutic use or formulation of
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Chloroquine and any of its derivatives or analogs, and including any other
technologies disclosed or covered in the Patent Assets and Know-How and any
derivative, or analog of any of the foregoing.
1.27. "Territory" shall mean all of the countries in the world.
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1.28. "Third Party(ies)" shall mean a person or entity who or which is
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neither a Party nor an Affiliate of a Party.
1.29. "Valid Claim" means a claim of an issued and unexpired patent
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included within the Patent Assets, which has not been revoked or held
unenforceable or invalid by a decision of a court or other governmental agency
of competent jurisdiction, and which has not been disclaimed or surrendered
through reissue or disclaimer.
ARTICLE II
LICENSE; SUBLICENSES
2.1. License Grant. ALPHA RESEARCH and XXXXXX hereby grant to PATHOGENICS
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and its Affiliates an exclusive (even as to LICENSORS) license under the Patent
Assets and the Know-How, including the right to grant sublicenses, to develop,
make, have made, use, import, offer for sale, market, commercialize, distribute
and sell and otherwise dispose of the Technology and Product for use in the
Field-of-Use and the Territory. Notwithstanding the aforementioned, ALPHA
RESEARCH shall retain all rights to license the Patent Assets for applications
not in the Field of Use.
2.2. Improvements by PATHOGENICS. All rights and title to and interest in
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any Improvement developed or discovered solely by PATHOGENICS in connection with
the license granted under Section 2.1 above or PATHOGENICS' activities hereunder
shall be vested solely in PATHOGENICS.
2.3. Sublicenses. PATHOGENICS shall have the right to grant sublicenses to
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any Third Party to develop, make, have made, use, import, offer for sale,
market, commercialize, distribute and sell and otherwise dispose of the
Technology or Product for use in the Field-of-Use and the Territory; provided,
however that any such sublicense shall be consistent with the terms of this
Agreement. In the event that PATHOGENICS proposes to grant a sublicense to any
Third Party, PATHOGENICS shall give ALPHA RESEARCH a written notice prior to
entering into the sublicense describing the proposed sublicense, including the
specific rights proposed to be sublicensed and the material commercial and
professional terms of the proposed sublicense. PATHOGENICS shall also provide
ALPHA RESEARCH with a copy of any sublicense agreements. Upon any termination of
this Agreement pursuant to Section 8.3.1 (a) by ALPHA RESEARCH for an uncured
material breach by PATHOGENICS, ALPHA RESEARCH may elect to have any existing
sublicense agreement(s) survive and assigned by PATHOGENICS to ALPHA RESEARCH
provided that (i) the sublicensee is not in breach of its sublicense agreement
at the time of such termination of this Agreement, and (ii) any sublicensee who
desires its sublicense to survive shall promptly agree in writing to be bound by
the applicable terms of and assume all obligations of PATHOGENICS under this
Agreement. In the event of a sublicense by PATHOGENICS to a Third Party, the
provisions of Section 5.1.2 of this Agreement shall be applicable.
ARTICLE III
DEVELOPMENT AND COMMERCIALIZATION
3.1. Exchange of Information. Within ten (10) days after execution of this
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Agreement, LICENSORS shall disclose to PATHOGENICS in English and in writing all
LICENSORS' Intellectual Property not previously available or made available to
PATHOGENICS in electronic format, where available, and hard copies (or, upon
PATHOGENICS' request and at PATHOGENICS' cost, certified copies of originals).
Throughout the term of this Agreement, and in addition to the other
communications required under this Agreement, LICENSORS shall also promptly
disclose to PATHOGENICS in English and in writing on an ongoing basis all
LICENSORS' Intellectual Property, and any and all additions or revisions
thereto.
3.2 Diligence; Development and Commercialization. PATHOGENICS shall use
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commercially reasonable efforts to develop and commercialize the Product. As
used herein, "commercially reasonable efforts" shall mean efforts and resources
normally used by PATHOGENICS for a product owned by it or to which it has
exclusive rights, which is of similar market potential at a similar stage in its
development or product life, taking into account issues of safety and efficacy,
product profile, the competitiveness of the marketplace, the proprietary
position of the Technology or Product, the regulatory and reimbursement
structure involved, the profitability of the applicable products, and other
relevant factors. The obligations set forth in this Section 3.2 are expressly
conditioned upon the absence of any serious adverse conditions or event relating
to the safety or efficacy of the Technology or Product including the absence of
any action by any regulatory authority limiting the development or
commercialization of the Technology or Product. LICENSORS shall cooperate with
PATHOGENICS in connection with efforts to develop and commercialize the Product.
3.3 Regulatory Matters.
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(a) PATHOGENICS shall own, control and retain primary legal responsibility
for the preparation, filing and prosecution of all filings and regulatory
applications required to obtain authorization to commercially develop, sell
and use Product for use in the Field-of-Use and the Territory and
Field-of-Use. PATHOGENICS shall promptly notify ALPHA RESEARCH upon the
receipt of Regulatory Approvals and of the date of First Commercial Sale.
(b) LICENSORS shall allow PATHOGENICS to cross reference any regulatory
filings relating to the Technology or Product owned or controlled by
LICENSORS. LICENSORS shall cooperate with PATHOGENICS in connection with
obtaining regulatory approval of Product.
3.4. Trademark. PATHOGENICS shall select, own and maintain trademarks for
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the Technology or Product for use in the Field-of-Use and the Territory.
3.5. Agreements. Attached hereto as Schedule 3.5 is a list of all
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contracts, agreements and other arrangements between LICENSORS and any and all
Third Parties relating to the research, development or commercialization of the
Technology or Product (other than the XXXXXX Assignments which are attached as
Exhibit 1.24). PATHOGENICS shall not be responsible for any contractual
obligations relating to the Technology or Product incurred by LICENSORS.
ARTICLE IV
CONFIDENTIALITY AND PUBLICITY
4.1. Non-Disclosure and Non-Use Obligations. All Proprietary Information
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disclosed by one Party to the other Party hereunder shall be maintained in
confidence and shall not be disclosed to any Third Party or used for any purpose
except as expressly permitted herein without the prior written consent of the
Party that disclosed the Proprietary Information to the other Party during the
term of this Agreement and for a period of five years thereafter. The foregoing
non-disclosure and non-use obligations shall not apply to the extent that such
Proprietary Information:
(a) is known by the receiving Party at the time of its receipt, and
not through a prior disclosure by the disclosing Party, as documented
by business records;
(b) is or becomes properly in the public domain or knowledge;
(c) is subsequently disclosed to a receiving Party by a Third Party
who may lawfully do so and is not under an obligation of
confidentiality to the disclosing Party; or
(d) is developed by the receiving Party independently of Proprietary
Information received from the other Party, as documented by research
and development records.
4.2. Permitted Disclosure of Proprietary Information. Notwithstanding
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Section 4.1, a Party receiving Proprietary Information of another Party may
disclose such Proprietary Information:
(a) to governmental or other regulatory agencies in order to obtain
patents pursuant to this Agreement, or to gain approval to conduct
clinical trials or to market Product, but such disclosure may be only
to the extent reasonably necessary to obtain such patents or
authorizations;
(b) by each of PATHOGENICS or LICENSORS to their respective agents,
consultants, Affiliates, PATHOGENICS' sublicensees and/or other Third
Parties for the research and development, manufacturing and/or
marketing of the /or Product (or for such parties to determine their
interests in performing such activities) on the condition that such
Third Parties agree to be bound by the confidentiality obligations
consistent with this Agreement; or
(c) if required to be disclosed by law or court order, provided that
notice is promptly delivered to the non-disclosing Party in order to
provide an opportunity to challenge or limit the disclosure
obligations; provided, however, without limiting any of the foregoing,
it is understood that the Parties or their Affiliates may make
disclosure of this Agreement and the terms hereof in any filings
required by the SEC, may file this Agreement as an exhibit to any
filing with the SEC and may distribute any such filing in the ordinary
course of its business, provided, however, that to the maximum extent
allowable by SEC rules and regulations, the Parties shall be obligated
to maintain the confidentiality obligations set forth herein and shall
redact any confidential information set forth in such filings.
4.3. Publication In the event LICENSORS or any Affiliate of or
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consultant to LICENSORS wishes to make a publication relating to Technology or
Product, it shall deliver to PATHOGENICS a copy of the proposed publication or
an outline of the oral disclosure at least sixty (60) Business Days prior to
submission or presentation, such that any issue of patent protection can be
resolved in accordance with the terms of this Agreement.
ARTICLE V
PAYMENTS; ROYALTIES AND REPORTS
5.1. Royalties and Other Payments.
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5.1.1. Royalties Payable By PATHOGENICS.
(i) Subject to the terms and conditions of this Agreement, and in
further consideration of the rights granted by ALPHA RESEARCH and
XXXXXX hereunder, PATHOGENICS shall pay to ALPHA RESEARCH royalties in
an amount equal to four percent (4%) of Net Sales in each Royalty Year
by PATHOGENICS or its Affiliates in the Territory if the manufacture,
use or sale of such Product would, absent the license granted
hereunder, infringe one or more Valid Claims of the Patent Assets in
the Territory.
(ii) Royalties on Net Sales at the rates set forth in (i) above shall
accrue as of the date of First Commercial Sale of Product in the
applicable country and shall continue and accrue on Net Sales on a
country-by-country basis until the expiration of the last to expire
Patent Asset in such country. Thereafter, PATHOGENICS shall be
relieved of any royalty payment under this Section 5.1.
(iii) As further consideration for the license and other rights
granted to PATHOGENICS hereunder, (a) PATHOGENICS shall pay to ALPHA
RESEARCH a milestone payment of One Hundred Thousand Dollars
($100,000) payable in cash or registered stock of the LICENSEE upon
successful completion of a Phase II clinical trial for each licensed
Product, (b) PATHOGENICS shall pay to ALPHA RESEARCH a milestone
payment of Two Hundred and Fifty Thousand Dollars ($250,000) payable
in cash or registered stock of the LICENSEE upon successful completion
of a Phase III clinical trial for each licensed Product, and (c)
PATHOGENICS shall pay to ALPHA RESEARCH a milestone payment of One
Million Dollars ($1,000,000) payable in cash or registered stock of
the LICENSEE upon receiving new drug approval for each licensed
Product.
(iv) The payment of royalties set forth above shall be subject to the
following conditions:
(A) only one payment shall be due with respect to the same unit
of Product;
(B) no royalties shall accrue on the disposition of Product by
PATHOGENICS, Affiliates or sublicensees as samples (promotion or
otherwise) or as donations (for example, to non-profit
institutions or government agencies) or to clinical trials; and
(C) LICENSORS shall be responsible for payment of any royalties
or other obligations owed by LICENSORS to any Third Party,
including without limitation, pursuant to the XXXXXX Assignments.
5.1.2. Payments in the Event of Sublicense. In the event PATHOGENICS
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enters into a sublicense with a Third Party or Third Parties
under Section 2.3 of this Agreement and ceases the manufacture,
use, and sale of Product, then as of the effective date of the
sublicense PATHOGENICS' obligation to pay ALPHA RESEARCH any
royalties or milestone payments under Section 5.1.1 above shall
terminate and, in lieu thereof, ALPHA RESEARCH shall be entitled
to twenty percent (20%) of Sublicense Payments received by
PATHOGENICS.
5.1.3. Affiliate Sales. In the event that PATHOGENICS transfers the
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Technology (for conversion to Product) or Product to one of its
Affiliates, there shall be no royalty due at the time of
transfer. Subsequent sales of Product by the Affiliate to end
users such as patients, hospitals, medical institutions, health
plans or funds, wholesalers (which are not sublicensees),
pharmacies or other retailers, shall be reported as Net Sales
hereunder by PATHOGENICS.
5.1.4. Compulsory Licenses. If a compulsory license is granted to a
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Third Party with respect to Product in any country in the
Territory with a royalty rate lower than the royalty rate
provided by Section 5.1.1, then the royalty rate to be paid by
PATHOGENICS on Net Sales in that country under Section 5.1.1
shall be reduced to the rate paid by the compulsory Third Party
licensee.
5.1.5. Third Party Licenses. If one or more licenses from a Third Party
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or Third Parties are obtained by PATHOGENICS in order to develop,
make, have made, use, sell or import the Technology or Product in
a particular country, any royalties or other payments paid under
such Third Party patent licenses by PATHOGENICS in such country
for such Calendar Quarter shall be creditable against up to
one-half (1/2) the royalty or other payments payable to ALPHA
RESEARCH by PATHOGENICS in such country.
5.1.6. Combination Product. Notwithstanding the provisions of Section
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5.1.1, in the event a Product is sold as a combination product
with other products, Net Sales, for purposes of royalty payments
on the combination product, shall be calculated by multiplying
the Net Sales of that combination product by the fraction A/B,
where A is the gross selling price of the Product sold separately
and B is the gross selling price of the combination product. If
no such separate sales are made by PATHOGENICS or its Affiliates,
Net Sales for royalty determination shall be calculated by
multiplying Net Sales of the combination product by the fraction
C/(C+D), where C (excluding the fully allocated cost of the other
product in question) is the fully allocated cost of the Product
and D is the fully allocated cost of such other products.
5.2. Reports; Payment of Royalty. During the term of the Agreement for so
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long as royalty or other payments are due, PATHOGENICS shall furnish to ALPHA
RESEARCH a quarterly written report for the Calendar Quarter showing the Net
Sales of all Products subject to royalty payments sold by PATHOGENICS and its
Affiliates (or, if sales of Product were made by an PATHOGENICS sublicensee, the
Sublicense Payments received from such sublicensee as a result of such sales)
during the reporting period and the royalties or other payments payable to ALPHA
RESEARCH under this Agreement. Reports shall be due on the thirtieth (30th) day
following the completion and/or filing of its quarterly or annual report.
Royalties or other payments shown to have accrued by each royalty report, if
any, shall be due and payable on the date such report is due. PATHOGENICS shall
keep complete and accurate records in sufficient detail to enable the royalties
or other payments hereunder to be determined. If no royalties or other payments
are due to ALPHA RESEARCH for any reporting period, then no written report shall
be required.
5.3. Audits. Upon the written request of ALPHA RESEARCH and not more than
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once in each Calendar Year, PATHOGENICS shall permit an independent certified
public accounting firm selected by ALPHA RESEARCH and reasonably acceptable to
PATHOGENICS to have access during normal business hours, upon ten-days notice to
PATHOGENICS, to review the records of PATHOGENICS as may be reasonably necessary
to verify the accuracy of the royalty reports hereunder for any Royalty Year
ending not more than twenty-four (24) months prior to the date of such request.
The accounting firm shall disclose to ALPHA RESEARCH only whether the royalty
reports are correct or incorrect and the specific details concerning any
discrepancies.
5.3.1. If such accounting firm concludes that additional royalties were
owed during such Royalty Year, PATHOGENICS shall pay the
additional royalties within sixty (60) days of the date ALPHA
RESEARCH delivers to PATHOGENICS such accounting firm's written
report so concluding; provided however, that, in the event that
PATHOGENICS shall not be in agreement with the conclusion of such
report (a) PATHOGENICS shall not be required to pay such
additional royalties and (b) such matter shall be resolved
pursuant to the provisions of Section 9.5 herein. In the event
such accounting firm or, if the matter is resolved in accordance
with Section 9.5 herein, any arbitration award concludes that
amounts were overpaid by PATHOGENICS during such period, ALPHA
RESEARCH shall repay PATHOGENICS the amount of such overpayment
within sixty (60) days of the date ALPHA RESEARCH delivers to
PATHOGENICS such accounting firm's written report so concluding.
The fees charged by such accounting firm shall be paid by ALPHA
RESEARCH; provided, however, that if an error is in favor of
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ALPHA RESEARCH of more than the greater of (i) $10,000 or (ii)
ten percent (10%) of the royalties due hereunder for the period
being reviewed is discovered, then the fees and expenses of the
accounting firm shall be paid by PATHOGENICS.
5.3.2. Upon the expiration of twenty-four (24) months following the end
of any Royalty Year the calculation of royalties payable with
respect to such year shall be binding and conclusive upon ALPHA
RESEARCH, and PATHOGENICS shall be released from any liability or
accountability with respect to royalties for such year.
5.3.3. ALPHA RESEARCH shall treat all financial information subject to
review under this Section 5.3 in accordance with the
confidentiality provisions of this Agreement.
5.4. Tax Withholding. If laws, rules or regulations require withholding of
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income taxes or other taxes imposed upon payments set forth in this Article V,
ALPHA RESEARCH shall provide PATHOGENICS, prior to any such payment, once each
Royalty Year or more frequently if required, with all forms or documentation
required by any applicable taxation laws, treaties or agreements to such
withholding or as necessary to claim a benefit thereunder and PATHOGENICS shall
make such withholding payments as required and subtract such withholding
payments from the payments set forth in this Article V. PATHOGENICS will use
commercially reasonable efforts consistent with its usual business practices and
cooperate with ALPHA RESEARCH to ensure that any withholding taxes imposed are
reduced as far as possible under the provisions of the current or any future
taxation treaties or agreements between foreign countries.
5.5. Exchange Controls. Notwithstanding any other provision of this
-----------------
Agreement, if at any time legal restrictions prevent the prompt remittance of
part or all of the royalties with respect to Net Sales in any country, payment
shall be made through such lawful means or methods as PATHOGENICS may determine.
When in any country the law or regulations prohibit both the transmittal and
deposit of royalties on sales in such a country, royalty payments shall be
suspended for as long as such prohibition is in effect (and such suspended
payments shall not accrue interest), and promptly after such prohibition ceases
to be in effect, all royalties or other payments that PATHOGENICS or its
Affiliates would have been obligated to transmit or deposit, but for the
prohibition, shall be deposited or transmitted, as the case may be, to the
extent allowable (with any interest earned on such suspended royalties which
were placed in an interest-bearing bank account in that country, less any
reasonable transactional costs). If the royalty rate specified in this
Agreement should exceed the permissible rate established in any country, the
royalty rate for sales in such country shall be adjusted to the highest legally
permissible or government-approved rate.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. ALPHA RESEARCH and XXXXXX Representations and Warranties. ALPHA
--------------------------------------------------------
RESEARCH and XXXXXX represent and warrant to PATHOGENICS that as of the
Effective Date:
(a) the issued patents included in the Patent Assets are valid and
enforceable over any references or prior art known to ALPHA RESEARCH
or its agents, including XXXXXX, taken alone or in combination;
(b) this Agreement has been duly executed and delivered by ALPHA
RESEARCH and XXXXXX and constitutes legal, valid, and binding
obligations enforceable against ALPHA RESEARCH and XXXXXX in
accordance with its terms, except as enforceability is limited by (A)
any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditor's rights generally, or (B) general
principals of equity, whether considered in a proceeding in equity or
at law;
(c) no approval, authorization, consent, or other order or action of
or filing with any court, administrative agency or other governmental
authority is required for the execution and delivery by ALPHA RESEARCH
and XXXXXX of this Agreement or the consummation by ALPHA RESEARCH and
XXXXXX of the transactions contemplated hereby;
(d) ALPHA RESEARCH and XXXXXX have the full corporate power and
authority to enter into and deliver this Agreement, to perform and to
grant the licenses granted under Article II hereof and to consummate
the transactions contemplated hereby; all corporate acts and other
proceedings required to be taken to authorize such execution,
delivery, and consummation have been duly and properly taken and
obtained;
(e) ALPHA RESEARCH and XXXXXX have not previously assigned,
transferred, conveyed or otherwise encumbered its right, title and
interest in the Intellectual Property for use in the Field-of-Use in
the Territory or entered into any agreement with any Third Party which
is in conflict with the rights granted to PATHOGENICS pursuant to this
Agreement;
(f) ALPHA RESEARCH and XXXXXX are the sole owner or exclusive
licensee under the Intellectual Property, all of which are free and
clear of any liens, charges and encumbrances, no other person,
corporate or other private entity, or governmental or university
entity or subdivision thereof has any claim of ownership or rights
with respect to the ALPHA RESEARCH and XXXXXX Intellectual Property,
whatsoever;
(g) ALPHA RESEARCH and XXXXXX have disclosed to PATHOGENICS the
complete texts of all Patent Assets as well as all information
received by ALPHA RESEARCH and XXXXXX concerning the institution or
possible institution of any interference, opposition, re-examination,
reissue, revocation, nullification, or any official proceeding
involving a Patent Asset, and that it will continue such disclosure
with respect to new events during the term of the Agreement;
(h) to the best of ALPHA RESEARCH's and XXXXXX'x knowledge, the
development, manufacture, use and sale of Products would not infringe
any patent rights owned or possessed by any Third Party;
(i) Schedule 1.19 is a complete and accurate list of all patents and
patent applications in the Territory relating to the Technology or
Product owned or exclusively licensed by ALPHA RESEARCH or XXXXXX or
to which ALPHA RESEARCH or XXXXXX have the right to license;
(j) there are no claims, judgments or settlements against or owed by
ALPHA RESEARCH or XXXXXX relating to the Patent Assets or pending or,
to the best of ALPHA RESEARCH's and XXXXXX'x knowledge, threatened
claims or litigation against ALPHA RESEARCH or XXXXXX relating to the
Patent Assets;
(k) ALPHA RESEARCH and XXXXXX have disclosed to PATHOGENICS all
relevant information known by them regarding the ALPHA RESEARCH and
XXXXXX Intellectual Property reasonably related to the activities
contemplated under this Agreement;
(l) attached as Exhibit 1.24 are true and complete copies of the
XXXXXX Assignments, including all supplements thereto and
modifications or amendments thereof. ALPHA RESEARCH is not, and to the
best of ALPHA RESEARCH's knowledge, XXXXXX is not, in default under or
in breach of any terms or provisions of the XXXXXX Assignments and
such agreements are in full force and effect as of the date hereof.
During the term of this Agreement, ALPHA RESEARCH shall not amend,
modify, terminate or cause a default under the XXXXXX Assignments, or
reject the XXXXXX Assignments pursuant to a bankruptcy proceeding
(including 11 U.S.C. 365);
(m) EXCEPT AS SPECIFICALLY PROVIDED HEREIN, ALPHA RESEARCH AND XXXXXX
DO NOT MAKE, AND EXPRESSLY DISCLAIM ANY WARRANTIES, EITHER EXPRESS OR
IMPLIED, ORAL OR WRITTEN, AS TO ANY MATTER WHATSOEVER, INCLUDING,
INCLUDING WITHOUT LIMITATION ANY EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE CONCERNING THE
PATENT ASSETS.
6.2. PATHOGENICS Representations and Warranties. PATHOGENICS represents and
------------------------------------------
warrants to ALPHA RESEARCH that as of the Effective Date:
(a) this Agreement has been duly executed and delivered by it and
constitutes legal, valid, and binding obligations enforceable against
it in accordance with its terms;
(b) PATHOGENICS has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. All corporate acts and other proceedings required to be taken
to authorize such execution, delivery, and consummation have been duly
and properly taken and obtained;
(c) no approval, authorization, consent, or other order or action of
or filing with any court, administrative agency or other governmental
authority is required for the execution and delivery by it of this
Agreement or the consummation by it of the transactions contemplated
hereby.
(d) EXCEPT AS SPECIFICALLY PROVIDED HEREIN, PATHOGENICS DOES NOT
MAKE, AND EXPRESSLY DISCLAIM ANY WARRANTIES, EITHER EXPRESS OR
IMPLIED, ORAL OR WRITTEN, AS TO ANY MATTER WHATSOEVER, INCLUDING,
INCLUDING WITHOUT LIMITATION ANY EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE VII
PATENT MATTERS
7.1. Filing, Prosecution and Maintenance of Patent Applications or Patents.
---------------------------------------------------------------------
PATHOGENICS shall have the first right to file, prosecute and maintain the
Patent Assets in the Field-of-Use and the Territory in ALPHA RESEARCH's or
XXXXXX'x name and shall be responsible for the payment of all patent prosecution
and maintenance costs incurred after the Effective Date, subject to the
remainder of this paragraph. Pathogenics shall also be responsible for
previously unpaid patent costs incurred before the Effective Date and related to
the Patent Assets as described in Schedule 7.1 hereto, and agrees to pay such
costs upon completion of its first public offering of stock. If LICENSORS
license any of the Patent Assets to a Third Party for use outside the
Field-of-Use, then PATHOGENICS shall be reimbursed or credited a pro-rata
portion (i.e., in the event there is one other Third Party Licensee -
PATHOGENICS receives 50% reimbursement; two Third Party Licensee's - PATHOGENICS
receives 67% reimbursement, etc.) of all patent prosecution and maintenance
costs. If PATHOGENICS elects not to file, prosecute or maintain a patent
application or patent included in the Patent Assets in any particular country,
it shall provide ALPHA RESEARCH with written advance notice sufficient to avoid
any loss or forfeiture, and ALPHA RESEARCH shall have the right, but not the
obligation, at its sole expense, to file, prosecute or maintain such patent
application or patent in such country in ALPHA RESEARCH's or XXXXXX'x name.
Thereafter, PATHOGENICS' License Grant per Section 2.1 and all other license
rights and royalty obligations per this Agreement related to that Patent Asset
in such country shall terminate and such patent or patent application in such
country shall no longer be deemed a Patent Asset. The termination of License
Grant or other license rights shall not affect any other rights or obligations
accrued by either Party prior to the effective date of such termination. Upon
PATHOGENICS' request, the Parties shall reasonably cooperate in the filing,
prosecution or maintenance of any patent application or patent included in the
Patent Assets.
7.2. Patent Office and Court Proceedings. Each Party shall inform the other
-----------------------------------
Party of any Third Party request for, filing, or declaration of any proceeding
before a patent office seeking to protest, oppose, cancel, reexamine, declare an
interference proceeding, initiate a conflicts proceeding, or analogous process
involving a patent application or patent included in the Patent Assets, or of
the filing of an action in a court of competent jurisdiction seeking a judgment
that a patent included in the Patent Assets is either invalid or unenforceable
or both. Each Party thereafter shall cooperate fully with the other with
respect to any such patent office or court proceeding. Each Party will provide
the other with any information or assistance that is reasonable. Notwithstanding
the foregoing or the provisions of Section 7.3 below, in the event of any such
action or proceeding, LICENSORS shall indemnify and hold PATHOGENICS and its
Affiliates harmless from and against any and all claims, damages, judgments,
liabilities, costs and expenses including, without limitation reasonable
litigation costs and legal fees and expenses, that may be incurred by, levied
upon or are payable by PATHOGENICS or any of its Affiliates as a result of such
Third Party action or proceeding and due to the direct breach of ALPHA
RESEARCH's or XXXXXX'x representations and warranties under Section 6.1 of this
Agreement.
7.3. Enforcement and Defense.
-------------------------
(a) Each Party shall promptly give the other Party notice of any
infringement in the Territory of any patent application or patent
included in the Patent Assets that comes to such Party's attention.
The Parties will thereafter consult and cooperate fully to determine a
course of action, including, without limitation, the commencement of
legal action by any Party. However, PATHOGENICS shall have the first
right to initiate and prosecute such legal action at its own expense
and in the name of ALPHA RESEARCH, XXXXXX and PATHOGENICS, or to
control the defense of any declaratory judgment action relating to
Patent Assets. PATHOGENICS shall promptly inform ALPHA RESEARCH if
PATHOGENICS elects not to exercise such first right, and ALPHA
RESEARCH thereafter shall have the right either to initiate and
prosecute such action or to control the defense of such declaratory
judgment action in the name of ALPHA RESEARCH, XXXXXX and, if
necessary, PATHOGENICS. In no event shall ALPHA RESEARCH or XXXXXX be
obligated to enforce or defend any of the Patent Assets.
(b) If either Party elects not to initiate and prosecute an
infringement or defend a declaratory judgment action in any country in
the Territory as provided in Subsection 7.3(a), and the other Party
elects to do so, the cost of any agreed-upon course of action,
including the costs of any legal action commenced or any declaratory
judgment action defended, shall be borne solely by the electing Party.
(c) For any such legal action or defense, in the event that any Party
is unable to initiate, prosecute, or defend such action solely in its
own name, the other Party will join such action voluntarily and will
execute all documents necessary for the Party to prosecute, defend and
maintain such action. In connection with any such action, the Parties
will cooperate fully and will provide each other with any information
or assistance that either reasonably may request.
(d) Any recovery obtained by PATHOGENICS or ALPHA RESEARCH shall be
shared as follows:
(i) the Party that initiated and prosecuted, or maintained the
defense of, the action shall recoup all of its costs and expenses
(including reasonable attorneys' fees) incurred in connection
with the action, whether the recovery is by settlement or
otherwise;
(ii) the other Party then shall, to the extent possible, recover
its costs and expenses (including reasonable attorneys' fees)
incurred in connection with the action;
(iii) if ALPHA RESEARCH initiated and prosecuted, or maintained
the defense of, the action, the amount of any recovery remaining
then shall be retained by ALPHA RESEARCH; and
(iv) if PATHOGENICS initiated and prosecuted, or maintained the
defense of, the action, the amount of any recovery remaining
shall be retained by PATHOGENICS, except that ALPHA RESEARCH
shall receive a portion equivalent to the royalties it would have
received in accordance with the terms of this Agreement if such
amount were deemed Net Sales.
7.4. Patent Term Extensions or Restorations and Supplemental Protection
-----------------------------------------------------------------------
Certificates. The Parties shall cooperate with each other in obtaining patent
------------
term extensions or restorations or supplemental protection certificates or their
equivalents in any country in the Territory where applicable and where desired
by PATHOGENICS. If elections with respect to obtaining such extension or
supplemental protection certificates are to be made, PATHOGENICS shall have the
right to make the election and ALPHA RESEARCH and XXXXXX shall abide by such
election. ALPHA RESEARCH and XXXXXX shall notify PATHOGENICS of (a) the issuance
of each U.S. patent included within the Patent Assets, giving the date of issue
and patent number for each such patent, and (b) each notice pertaining to any
patent included within the Patent Assets pursuant to the United States Drug
Price Competition and Patent Term Restoration Act of 1984 (hereinafter called
the " 1984 Act"), including notices pursuant to 101 and 103 of the 1984 Act from
persons who have filed an abbreviated NDA ("ANDA"). Such notices shall be given
promptly, but in any event within ten (10) calendar days of each such patent's
date of issue or receipt of each such notice pursuant to the Act, whichever is
applicable. ALPHA RESEARCH and XXXXXX shall notify PATHOGENICS of each filing
for patent term extension or restoration under the 1984 Act, any allegations of
failure to show due diligence and all awards of patent term restoration
(extensions) with respect to the Patent Assets. Likewise, ALPHA RESEARCH and
XXXXXX shall inform PATHOGENICS of patent extensions in the rest of the world
regarding the Technology or Product.
7.5 Security Interest. Within thirty (30) days from the Effective Date,
-------------------
ALPHA RESEARCH and XXXXXX shall xxxxx to PATHOGENICS a first priority security
interest, senior to any and all other liens and encumbrances, in all of the
ALPHA RESEARCH and XXXXXX Patent Assets, whether now owned or hereafter acquired
by ALPHA RESEARCH and XXXXXX and in all of ALPHA RESEARCH's and XXXXXX'x rights
in and to all ALPHA RESEARCH and XXXXXX Patent Assets controlled by ALPHA
RESEARCH and XXXXXX (collectively, the "Collateral"). The grant of the security
interest will secure the performance when due of the obligations of ALPHA
RESEARCH and XXXXXX owed to PATHOGENICS under this Agreement. ALPHA RESEARCH and
XXXXXX shall execute and deliver such agreements, instru-ments, documents or
notices (including without limitation financing statements or amendments
thereto), and take such other actions, as PATHOGENICS may reasonably deem
necessary in order to perfect, protect and preserve any lien granted or
purported to be granted by such security interest and to enable PATHOGENICS to
exercise and enforce any of its rights and remedies hereunder with respect to
any Collateral. PATHOGENICS shall be responsible for any costs associated with
the grant of this security interest.
ARTICLE VIII
TERM AND TERMINATION
8.1. Term and Expiration. This Agreement shall be effective as of the
---------------------
Effective Date and unless terminated earlier pursuant to Section 8.2 and 8.3
below, the term of this Agreement shall continue in effect on a
country-by-country basis until the expiration of the last to expire Patent Asset
in such country.
8.2. Termination by Notice. Notwithstanding anything contained herein to
-----------------------
the contrary, PATHOGENICS shall have the right to terminate this Agreement at
any time by giving thirty (30) days advance written notice to ALPHA RESEARCH.
Except as set forth in this Agreement, in the event of such termination, (i) the
rights and obligations hereunder, excluding any payment obligation that has
accrued as of the termination date and excluding rights and obligations relating
to confidentiality, shall terminate immediately, and (ii) the provisions of
Section 8.4 shall be applicable.
8.3. Termination.
-----------
8.3.1 Termination for Cause. Either Party may terminate this Agreement
by notice to the other Party at any time during the term of this
Agreement as follows:
(a) if the other Party is in breach of any material
obligation hereunder by causes and reasons within its
control, or has breached, in any material respect, any
representations or warranties set forth in Article VI, and
has not cured such breach within ninety (90) days after
notice requesting cure of the breach, provided, however,
that if the breach is not capable of being cured within
ninety (90) days of such written notice, the Agreement may
not be terminated sooner than one hundred twenty (120) days
of such written notice so long as the breaching Party
commences and is taking commercially reasonable actions to
cure such breach as promptly as practicable; or (b) upon the
filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an
assignment of a substantial portion of the assets for the
benefit of creditors by the other Party; provided, however,
in the case of any involuntary bankruptcy, reorganization,
liquidation, receivership or assignment proceeding such
right to terminate shall only become effective if the Party
consents to the involuntary proceeding or such proceeding is
not dismissed within ninety (90) days after the filing
thereof.
8.3.2 LICENSEE Rights Not Affected.
----------------------------
(a) In the event PATHOGENICS terminates this Agreement
under Section 8.3.1(b), or this Agreement is otherwise
terminated under Section 8.3.1(b), or ALPHA RESEARCH or
XXXXXX are debtors in a bankruptcy proceeding, whether
voluntary or involuntary, all rights and licenses granted
pursuant to this Agreement are, and shall otherwise be
deemed to be, for purposes of Section 365(n) of 11 U.S.C.
101 et seq. (the "Bankruptcy Code"), licenses of rights to
"intellectual property" as defined under Section 101(35A) of
the Bankruptcy Code. The Parties agree that PATHOGENICS,
ALPHA RESEARCH and XXXXXX shall retain and may fully
exercise all of their respective rights, remedies and
elections under the Bankruptcy Code. The Parties further
agree that, in the event of the commencement of a bankruptcy
proceeding by or against ALPHA RESEARCH or XXXXXX under the
Bankruptcy Code, PATHOGENICS shall be entitled to all
applicable rights under Section 365 of the Bankruptcy Code,
including but not limited to, entitled to a complete
duplicate of (or complete access to, as appropriate) any
such intellectual property and all embodiments of such
intellectual property upon written request therefore by
PATHOGENICS.
(b) In the event PATHOGENICS is a debtor in a bankruptcy
proceeding, whether voluntary or involuntary, all rights and
licenses granted pursuant to this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365 of
the Bankruptcy Code, executory contracts. The Parties agree
that applicable law does not excuse ALPHA RESEARCH or XXXXXX
from accepting performance by, or rendering performance
under this Agreement and all rights and licenses granted
hereunder to, a person or entity other than PATHOGENICS.
8.4. Effect of Expiration or Termination. Expiration or termination of this
-----------------------------------
Agreement shall not relieve the Parties of any obligation accruing prior to such
expiration or termination. PATHOGENICS and its Affiliates and sublicensees shall
have the right to sell or otherwise dispose of the stock of any Product subject
to this Agreement then on hand or in process of manufacture. In addition to any
other provisions of this Agreement which by their terms continue after the
expiration of this Agreement, the provisions of Article IV shall survive the
expiration or termination of this Agreement and shall continue in effect for
five (5) years from the date of expiration or termination. In addition, any
other provision required to interpret and enforce the Parties' rights and
obligations under this Agreement shall also survive, but only to the extent
required for the full observation and performance of this Agreement. Any
expiration or early termination of this Agreement shall be without prejudice to
the rights of any Party against the other accrued or accruing under this
Agreement prior to termination. Except as expressly set forth herein, the rights
to terminate as set forth herein shall be in addition to all other rights and
remedies available under this Agreement, at law, or in equity, or otherwise.
Upon termination of this Agreement pursuant to Section 8.2 or upon termination
by ALPHA RESEARCH pursuant to Section 8.3.1(a), PATHOGENICS shall, if requested
to do so in writing by ALPHA RESEARCH, negotiate a license to ALPHA RESEARCH of
Improvements or Know-How relating to the manufacture or sale of Technology or
Product that was developed by PATHOGENICS during the Term of this Agreement and
is owned and controlled by PATHOGENICS at the time of termination, on
commercially reasonable terms to be negotiated in good faith between the
Parties.
ARTICLE IX
MISCELLANEOUS
9.1. Force Majeure. Neither Party shall be held liable or responsible to
--------------
the other Party nor be deemed to have defaulted under or breached the Agreement
for failure or delay in fulfilling or performing any term of the Agreement
during the period of time when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected Party including, but
not limited to, fire, flood, embargo, war, acts of war (whether war be declared
or not), insurrection, riot, civil commotion, strike, lockout or other labor
disturbance, act of God or act, omission or delay in acting by any governmental
authority or the other Party. The affected Party shall notify the other Party
of such force majeure circumstances as soon as reasonably practicable.
9.2. Assignment. The Agreement may not be assigned or otherwise transferred
----------
without the prior written consent of the other Party, which shall not otherwise
be unreasonably withheld; provided, however, that either Party may assign this
Agreement to an Affiliate or in connection with the transfer or sale of its
business or all or substantially all of its assets related to the Technology or
Product or in the event of a merger, consolidation, change in control or similar
corporate transaction. Any permitted assignee shall assume all obligations of
its assignor under this Agreement.
9.3. Severability. In the event that any of the provisions contained in
------------
this Agreement are held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, unless the absence
of the invalidated provision(s) adversely affect the substantive rights of the
Parties. In such event, the Parties shall replace the invalid, illegal or
unenforceable provision(s) with valid, legal and enforceable provision(s) which,
insofar as practical, implement the purposes of this Agreement.
9.4. Notices. All notices or other communications which are required or
-------
permitted hereunder shall be in writing and sufficient if delivered personally,
sent by facsimile (and promptly confirmed by personal delivery, registered or
certified mail or overnight courier), sent by nationally-recognized overnight
courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to PATHOGENICS to:
PATHOGENICS, INC.
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000, XXX
Attention: President
Tel: 000-000-0000
Fax: 000-000-0000
if to ALPHA RESEARCH to:
ALPHA RESEARCH GROUP, LLC
0000 Xxxxxxx Xxxxx
Xxxx, XX 00000, XXX
Tel: 000-000-0000
Fax: 000-000-0000
if to XXXX X. XXXXXX to:
XXXX X. XXXXXX
0000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
or to such other address as the Party to whom notice is to be given may have
furnished to the other Parties in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered if personally
delivered or sent by facsimile on a Business Day, upon confirmed delivery by
nationally-recognized overnight courier if so delivered and on the third
Business Day following the date of mailing if sent by registered or certified
mail.
9.5. Applicable Law and Dispute Resolution. The Agreement shall be governed
-------------- ----------------------
by and construed in accordance with the laws of the United States of America and
Commonwealth of Massachusetts without reference to any rules of conflict of
laws.
(a) The Parties agree to attempt initially to solve all claims,
disputes, or controversies arising under, out of, or in connection
with this Agreement (a "Dispute") by conducting good faith
negotiations. Any Disputes which cannot be resolved by good faith
negotiation within twenty (20) Business Days, shall be referred, by
written notice from either Party to the other, to the Chief Executive
Officer of each Party. Such Chief Executive Officers shall negotiate
in good faith to achieve a resolution of the Dispute referred to them
within twenty (20) Business Days after such notice is received by the
Party to whom the notice was sent. If the Chief Executive Officers are
unable to settle the Dispute between themselves within twenty (20)
Business Days, they shall so report to the Parties in writing. The
Dispute shall then be referred to mediation as set forth in the
following subsection (b).
(b) Upon the Parties receiving the Chief Executive Officers' report
that the Dispute referred to them pursuant to subsection (a) has not
been resolved, the Dispute shall be referred to mediation by written
notice from either Party to the other. The mediation shall be
conducted pursuant to the Rules of the Commercial Arbitration of the
American Arbitration Association ("AAA") procedures. The place of the
mediation shall be in Chicago, IL. If the Parties have not reached a
settlement within twenty (20) Business Days of the date of the notice
of mediation, the Dispute shall be referred to arbitration pursuant to
subsection (c) below.
(c) If after the procedures set forth in subsections (a) and (b)
above, the Dispute has not been resolved, a Party shall decide to
institute arbitration proceedings, it shall give written notice to
that effect to the other Party. The Parties shall refrain from
instituting the arbitration proceedings for a period of sixty (60)
days following such notice. During such period, the Parties shall
continue to make good faith efforts to amicably resolve the dispute
without arbitration. If the Parties have not reached a settlement
during that period the arbitration proceedings shall go forward and be
governed by the AAA rules then in force. Each such arbitration shall
be conducted by a panel of three arbitrators: one arbitrator shall be
appointed by each of ALPHA RESEARCH and PATHOGENICS and the third
arbitrator, who shall be the Chairman of the tribunal, shall be
appointed by the two Party-appointed arbitrators. The place of the
arbitration shall be in Chicago, IL.
The arbitrators shall have the authority to grant specific
performance. Judgment upon the award so rendered may be entered in any
court having jurisdiction or application may be made to such court for
judicial acceptance of any award and an order of enforcement, as the
case may be. In no event shall a demand for arbitration be made after
the date when institution of a legal or equitable proceeding based on
such claim, dispute or other matter in question would be barred by the
applicable statute of limitations. Each Party shall bear its own costs
and expenses incurred in connection with any arbitration proceeding
and the Parties shall equally share the cost of the mediation and
arbitration levied by the AAA.
Any mediation or arbitration proceeding entered into pursuant to this
Section 9.5 shall be conducted in the English language. Subject to the
foregoing, for purposes of this Agreement, each Party consents, for
itself and its Affiliates, to the jurisdiction of the courts of the
state of Illinois, county of Xxxx and the U.S. District Court for
Illinois.
9.6. Entire Agreement. This Agreement, including the exhibits and schedules
----------------
hereto and the security interest required by Section 7.5 hereto, contains the
entire understanding of the Parties with respect to the subject matter hereof
and supersedes all previous writings and understandings. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by all Parties hereto.
9.7. Independent Contractors. It is expressly agreed that the Parties shall
-----------------------
be independent contractors and that the relationship between the Parties shall
not constitute a partnership, joint venture or agency. Neither Party shall have
the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on the other Party, without
the prior consent of such other Party.
9.8. Waiver. The waiver by a Party hereto of any right hereunder or the
------
failure to perform or of a breach by another Party shall not be deemed a waiver
of any other right hereunder or of any other breach or failure by said other
Party whether of a similar nature or otherwise.
9.9. Headings. The captions to the several Articles and Sections hereof are
--------
not a part of the Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
9.10. Counterparts. The Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.11. Use of Names. Except as otherwise provided in this Agreement, neither
-------------
Party shall use the name of the other Party in relation to this transaction in
any public announcement, press release or other public document without the
consent of such other Party, which consent shall not be unreasonably withheld or
delayed; provided, however, that either Party may use the name of the other
Party in any document required to be filed to obtain Regulatory Approval or to
comply with applicable laws, rules or regulations.
9.12. LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
-------------------------
FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF
THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.
ALPHA RESEARCH, LLC
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXX X. XXXXXX
/s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx
PATHOGENICS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxx, Esq.
Title: President & CEO
SCHEDULE1.19
------------
PATENT ASSETS
EXHIBIT 1.24
------------
XXXXXX ASSIGNMENTS
------------------
1. US Patent Application No. 09/615,639 (Patent No. 6,417,177), Xxxx X.
Xxxxxx (Assignor), Alpha Research Group, LLC (Assignee), 07/25/2000
(Execution Date), 08/07/2000 (Recordation Date), 10/19/2000 (Notice Date).
2. Corrected Notice, US Patent Application No. 09/615,639 (Patent No.
6,417,177), Xxxx X. Xxxxxx (Assignor), Alpha Research Group, LLC
(Assignee), 07/25/2000 (Execution Date), 08/07/2000 (Recordation Date),
01/24/2001 (Notice Date).
3. US Patent Application No. 10/192,414, Xxxx X. Xxxxxx (Assignor), Alpha
Research Group, LLC (Assignee), 07/16/2002 (Execution Date), 07/30/2002
(Recordation Date), 07/31/2002 (Notice Date).
4. US Patent Application No. 10/616,692, Xxxx X. Xxxxxx (Assignor), Alpha
Research Group, LLC (Assignee), 07/17/2003 (Execution Date), 12/15/2003
(Recordation Date), 12/16/2003 (Notice Date).
SCHEDULE 3.5
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LIST OF AGREEMENTS
------------------
1. FUNDING AGREEMENT between Alpha Research Group, LLC and Tekquity
Ventures, LLC (4-24-00).
2. First Addendum the April 24, 2000 FUNDING AGREEMENT (above) (7-25-01).
3. SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE between Alpha Research
Group, LLC and Tekquity Neuro, LLC (5-1-03)
4. SERVICE AND REPRESENTATION AGREEMENT with Emanus, LLC (9-16-03)
5. First Addendum to the May 1, 2003 SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE (above) (4-6-04)
6. First Addendum to the September 9, 2003 SERVICE AND REPRESENTATION
AGREEMENT (above) (11-4-04).
7. Second Addendum to the September 9, 2003 SERVICE AND REPRESENTATION
AGREEMENT (above) (4-6-05).
SCHEDULE 7.1
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PREVIOUSLY UNPAID PATENT COSTS
------------------------------
Xxxxxxxx, Winner and Xxxxxxxx, P.C., Statement for Xxxx X. Xxxxxx dated
April 6, 2005. Statement Total is $28,408.82.
