DEVELOPMENT AGREEMENT BETWEEN CARDIOVASCULAR BIOTHERAPEUTICS, INC. AND CARDIO NEO-GENESIS LP Dated as of November 11, 2008
BETWEEN
AND
CARDIO
NEO-GENESIS LP
Dated
as
of November 11, 2008
Exhibit
10.1
TABLE
OF
CONTENTS
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Page
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1
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.
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Definitions
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1
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1.1
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Definitions
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1
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1.2
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Singular
and Plural
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1
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2
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.
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Description
of Technology / Goal of Development
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1
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3
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.
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Development
Services
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2
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3.1
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License
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2
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3.2
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Development
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2
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3.3
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Disclaimer
of Warranties
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3
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3.4
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Rights
to Property
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3
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3.5
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Reports
and Records
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3
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3.6
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Other
Activities
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4
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4
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.
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Development
Fee
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4
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5
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.
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Revenue
Sharing from Product Sales
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4
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6
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.
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Representations
and Warranties of CVBT
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5
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6.1
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Organization
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5
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6.2
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Authorization
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5
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6.3
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Intellectual
Property Rights
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5
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7
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.
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Representations,
Warranties and Covenants of CNG
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5
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8
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.
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Insurance
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5
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9
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.
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Term
and Termination
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6
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9.1
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Term
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6
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9.2
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Events
of Termination
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6
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9.3
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Effect
of Termination
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6
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10
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.
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Indemnification
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6
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10.1
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Indemnification
by CVBT
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6
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10.2
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Indemnification
by CNG
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7
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10.3
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Defense
of Claims
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7
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10.4
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Consequential
Damages
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7
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11
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.
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Miscellaneous
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7
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11.1
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No
Implied Waivers; Rights Cumulative
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7
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11.2
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Force
Majeure
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7
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11.3
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Relationship
of the Parties
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7
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11.4
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Notices
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8
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11.5
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Successors
and Assigns
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8
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11.6
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Amendments
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9
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11.7
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Governing
Law
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9
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11.8
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Taxes
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9
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11.9
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Severability
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9
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11.10
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Confidentiality
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10
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11.11
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Trading
Limitations
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10
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11.12
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Counterparts
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10
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11.13
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Entire
Agreement
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10
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SCHEDULES
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1.1
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Definitions
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2.1
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Description
of Heart Drug IP
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3.1
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Technology
License Agreement
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3.2.1
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Work
Plan
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4
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Development
Fee
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i
This
Development Agreement (the “Agreement”) is made as of November 11, 2008, by and
between CardioVascular BioTherapeutics, Inc., a Delaware corporation (“CVBT”),
and Cardio Neo-Genesis LP, a Nevada limited partnership (“CNG”).
R
E C
I T A L S
A. CVBT
has
developed certain intellectual property regarding a drug candidate for the
treatment of severe coronary heart disease (“CHD”) (the “Heart Drug IP”) and is
willing to license to CNG the Heart Drug IP for the purpose of further
developing the Heart Drug IP and advancing a potential treatment for severe
CHD
in the FDA Process.
B. CVBT
has
experience in the development of pharmaceutical products and has, or has access
to, the facilities, equipment, employees and other resources to accomplish
development activities, on behalf of CNG, with respect to the Heart Drug
IP.
C. CNG
desires to engage CVBT to perform such services in connection with the
Development, and CVBT is willing to provide such services.
NOW,
THEREFORE, in consideration of the mutual covenants set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, and in order to induce CVBT to enter into the Agreements,
CVBT and CNG hereby agree as follows:
1. Definitions.
1.1 Definitions.
All
capitalized terms used herein and not otherwise defined shall have the
respective meanings, to the extent such terms are used herein, set forth in
Schedule 1.1 attached hereto, which is incorporated by this reference as though
fully set forth herein.
1.2 Singular
and Plural.
Singular and plural forms, as the case may be, of terms defined herein shall
have correlative meanings.
2. Description
of Technology / Goal of Development.
The
Heart Drug IP is described in Schedule 2.1 attached hereto and incorporated
herein by this reference. The goal of the Development is to advance the Heart
Drug IP in the FDA Process. The parties hereto understand and acknowledge that
the goal of the Development conducted under this Agreement is to result in
a
treatment for severe CHD that has been authorized for commercial exploitation
by
the FDA and further, both parties understand and acknowledge that there is
no
guarantee that the development conducted under this Agreement will result in
a
treatment for severe CHD authorized by the FDA for commercial exploitation.
1
3. Development
Services.
3.1 License.
Pursuant to the Technology License Agreement of even date herewith, a copy
of
which is attached hereto as Schedule 3.1, CVBT has licensed to CNG the Heart
Drug IP on a nonexclusive basis for the purpose of permitting CNG to participate
with CVBT in the Development. CNG acknowledges that CVBT has pledged its
interest in the Heart Drug IP as collateral for a prior loan financing entered
into on March 20, 2006 as further described on Form 8-K filed on March 22,
2006
with a remaining balance due as of September 30, 2008 of $2,268,000 and that
the
rights of such lender are superior to those of CNG. CNG further acknowledges
and
understands that CVBT may enter into future research and development
arrangements to further the advancement of the Heart Drug IP and related
potential drug candidate, and that the rights of such research and development
partnerships will be pari passu with those of CNG.
3.2 Development.
CNG
hereby engages CVBT, and CVBT hereby accepts such engagement, to use
commercially reasonable efforts to undertake the Development. Such services
shall be provided as follows:
3.2.1 Work
Plan.
The
proposed work plan is attached as Schedule 3.2.1 and incorporated herein by
this
reference. The work plan may be revised by CVBT upon written notice to
CNG.
3.2.2 Conduct
of Development.
During
the term of this Agreement, CVBT shall use commercially reasonable efforts
to
(a) conduct the Development on behalf of CNG in a prudent and skillful manner
in
accordance, in all material respects, with the work plan then in effect and
applicable laws, ordinances, rules, regulations, orders, licenses and other
requirements now or hereafter in effect and (b) diligently execute such work
plan and report to CNG any significant deviations therefrom in a timely manner.
CNG hereby appoints CVBT its exclusive agent, for the term of this Agreement,
with the sole power and authority to file and prosecute all necessary regulatory
applications and permits in CVBT’s name required to obtain FDA and other
regulatory approvals for CVBT’s Development efforts. Without limiting the
generality of the foregoing sentence, absent specific requirements of the FDA
to
the contrary, CVBT is authorized by CNG to conduct FDA trials in CVBT’s name.
Using the Available Funds provided by CNG, CVBT shall furnish all labor,
supervision, services, supplies and materials necessary to perform the
Development in accordance with the work plan then in effect. In addition, CVBT
agrees to use commercially reasonable efforts, on behalf of itself and CNG,
to
attempt to obtain and to sublicense any patent or technology license or
sublicense from any Person, including CVBT that CVBT reasonably determines
to be
necessary or useful to enable CVBT to conduct the Development under this
Agreement.
3.2.3 Subcontracts.
CNG
acknowledges that CVBT may elect to subcontract to third parties a portion
of
the Development. CNG acknowledges and agrees that in performing the Development,
CVBT may, and is hereby authorized to, without the prior written consent of
CNG,
engage or agree or otherwise collaborate with other Persons, including, without
limitation, Affiliates of CVBT or entities performing other development
activities for CVBT, to provide assistance in carrying out the
Development.
2
3.3 Disclaimer
of Warranties.
CVBT
cannot and does not guarantee that the Development will be successful in whole
or in part or that any significant advancement in the FDA Process will occur.
To
the extent that CVBT has complied with Section 3.2.2 hereof, the failure of
CVBT
to further develop successfully the Heart Drug IP will not in and of itself
constitute a breach by CVBT of any representation, warranty, covenant or other
obligation under the Agreements. In addition, neither CVBT nor CNG makes any
representation or warranty or guaranty that the development fee described in
Section 4 will be sufficient for the completion of the Development contemplated
in the work plan. Furthermore, nothing in this Agreement shall be construed
as a
representation made or warranty given that any patents or other registrable
technology will issue from the Development. CNG understands that the Development
shall involve technologies that have not been approved by any regulatory
authority and that CVBT does not guaranty the safety, effectiveness, performance
or usefulness of any drug or technology that results from the
Development.
3.4 Rights
to Property.
All
right, title and interest to the data, know-how and enhancements of the Heart
Drug IP and any other intellectual property resulting from the Development
acquired or developed pursuant to this Agreement (the “Program IP”) including
any submissions or applications to the FDA or any foreign equivalent made by
CVBT in its name on behalf of itself or CNG shall be the exclusive property
of
CNG; provided, however, that such right, title and interest shall be subject
in
all events to that certain exclusive license agreement of even date herewith
attached hereto as Schedule 3.1 and incorporated herein by this reference;
and
provided further, that CNG shall have no right to physical possession of the
Program IP.
3.5 Reports
and Records.
3.5.1 Progress
Reports.
Within
30 days after the end of each calendar quarter during the term of this
Agreement, CVBT shall deliver to CNG a report setting forth in reasonable detail
a summary of the work performed pursuant to the work plan during the immediately
preceding calendar quarter.
3.5.2 Financial
Reports.
Within
five (5) business days after the filing of its Form 10-Q with the SEC for the
first three calendar quarters of each calendar year during the term of this
Agreement, CVBT shall provide to CNG (a) a reasonably detailed report setting
forth in respect of such quarter the revenues collected by CVBT based on the
exploitation of any Treatment for severe CHD developed as a partial result
of
the Development, and (b) a check payable to CNG in an amount equal to the amount
calculated pursuant to Section 5 hereof for that quarterly period. Within five
(5) business days after CVBT files its Form 10-K with the SEC, it shall provide
to CNG an audited report of the revenues collected by CVBT based on the
exploitation of any treatment for severe CHD developed as a partial result
of
the Development for the prior fiscal year of CVBT. Any adjustments to the
amounts paid or payable to CNG shall be made as a result of such audit at the
time of delivery of such audit, and an appropriate payment will be made to
CNG.
3.5.3 Final
Report.
CVBT
shall prepare a final report, within 90 days after the expiration or termination
of this Agreement, setting forth in reasonable detail a summary of the work
performed since the last report provided to CNG hereunder and the material
developments with respect thereto and containing a final statement of, and
payment based on, all applicable collected revenues upon which payment to CNG
pursuant to Section 5 hereof are based and deliver such report to
CNG.
3
3.5.4 Records/Review
of Records.
CVBT
shall keep and maintain proper and complete records and books of account
documenting all of its collected revenues based on the exploitation of any
treatment for severe CHD developed as a partial result of the Development.
At
CNG’s request and expense, CVBT shall permit a certified independent public
accountant selected by CNG to have access, no more than once in each calendar
year during the term of this Agreement and each year for three calendar years
following the termination hereof, during regular business hours and upon
reasonable notice to CVBT, to such records and books for the sole purpose of
determining the accuracy of the collected revenues reports. If such certified
independent public accountant reasonably determines that the collected revenues
reported have been, for any calendar year understated by CVBT by an amount
equal
to or greater than five percent, CVBT shall promptly forward any such
underpayment to CNG and pay all reasonable fees and disbursements of such
certified independent public accountant incurred in the course of making such
determination. If such accountant reports an underpayment by CVBT of less than
five percent, CVBT shall forward such underpayment to CNG and CNG shall pay
all
fees and expenses of such accountant. If such accountant reports an overpayment
by CVBT, CNG will repay such overpayment and bear all fees and expenses of
such
accountant.
3.6 Other
Activities.
During
the term of this Agreement, CVBT shall devote such time and effort to the
performance of services pursuant to this Agreement as may be necessary or
appropriate to fulfill its duties under this Agreement; provided, however,
it is
specifically understood and agreed by CNG that CVBT shall not be required to
devote itself, on a full-time basis, to the provision of such services and
that
CVBT shall have the right to engage in its own development activities for other
drug candidates and in other business activities with other Persons, and CNG
shall not, by virtue of this Agreement, have any right, title or interest in
or
to such independent activities or to the income or profits derived therefrom
and, without limiting CVBT’s obligation to use commercially reasonable efforts
to provide certain services hereunder, nothing set forth in this Agreement
shall
limit or reduce the ability of CVBT to carry on such other
activities.
4. Development
Fee.
The
nonrefundable fee for the Development contemplated herein is set forth on
Schedule 4 hereto which is incorporated herein by this reference. CNG hereby
acknowledges that CVBT has in no way guaranteed any particular results from
the
Development; that, indeed, there may be no positive results from the
Development; and that, as a consequence, it may receive no return of, or on,
the
Investment.
5. Revenue
Sharing from Product Sales.
If, as
a result of the Development, as well as additional and subsequent development
of
the Heart Drug IP, CVBT is able to commercialize or in any other way exploit
value from the Heart Drug IP, CNG will be entitled to Five Percent (5%) of
the
gross cash actually collected by CVBT based on CVBT’s exploitation of the
treatment for severe CHD (the participation). Such exploitation may include,
without limitation, direct marketing by CVBT or its Affiliates and/or marketing,
licensing, and/or partnering arrangements with other pharmaceutical companies.
Payment of such amounts shall be made contemporaneously with the quarterly
and
annual revenue reports described in Section 3.5 hereof up to a maximum amount
of
the total investment in CNG by the limited partners (see Schedule 5) multiplied
by twenty (20).
CVBT
acknowledges that raising capital for CNG from limited partners is expensive.
CVBT accepts that CNG will pay the following marketing costs: 1) cost of
preparing documents, and annual administrative and accounting costs, all
together provided for as 2.5% of the capital raised by CNG from its limited
partners; 2) a placement fee of 8% of the money raised; 3) a due diligence
fee
of 2% of the money raised; 4) a wholesale fee of 1% of the money raised; and
5)
a general partner’s profit participation of 20% of all royalties, after first
200% of the limited partners’ original investment has been paid.
4
6. Representations
and Warranties of CVBT.
CVBT
represents and warrants to CNG as follows:
6.1 Organization.
CVBT is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware with full corporate power and authority adequate
for executing, delivering and performing its obligations under the
Agreements.
6.2 Authorization.
The
execution, delivery and performance of the Agreements have been duly authorized
by all necessary corporate action on the party of CVBT and the Agreements shall
constitute legal, valid and binding obligations of CVBT, enforceable against
CVBT in accordance with its terms, subject to laws of general application
related to bankruptcy, insolvency and the relief of debtors.
6.3 Intellectual
Property Rights.
To the
best of its knowledge, CVBT believes it has sufficient legal and/or beneficial
title and ownership to the technology described on Schedule 2.1 hereof to
license to CNG the Heart Drug IP as contemplated by this Agreement in Section
3.1 and in the Technology Agreement. CVBT is not aware of, and has not received
any communications alleging that, it has violated, or that CNG, by participating
in the development of the Heart Drug IP as contemplated in this Agreement,
would
violate, any intellectual property rights of any third party. To the best of
CVBT’s knowledge, there is no material unauthorized use, infringement or
misappropriation of any of the technology described in Schedule 2.1 hereto.
CVBT
is not aware of, nor has it received any communications challenging, the
ownership, validity or effectiveness of the technology in Schedule
2.1.
7. Representations,
Warranties and Covenants of CNG.
The
representations, warranties and covenants of CNG set forth in Section 3.2 of
the
Technology Agreement are incorporated herein by this reference.
8. Insurance.
CVBT
shall, to the extent available at commercially reasonable rates, maintain,
with
insurers or underwriters of good repute, such insurance relating to the
Development, against such risks and pursuant to such terms, including deductible
limits or self-insured retentions, as is customary for comparable businesses
undertaking research and development programs of a similar nature, and shall,
to
the extent reasonably possible and not unreasonably expensive, cause CNG to
named as an additional insured on its applicable insurance
policies.
5
9. Term
and Termination.
9.1 Term.
This
Agreement shall be effective as of the date hereof and, unless earlier
terminated, shall continue in full force and effect until such time as the
maximum revenue sharing amount set forth in Section 5 has been
paid.
9.2 Events
of Termination.
9.2.1 Mutual
Agreement.
By
mutual agreement, the parties hereto may at any time terminate this Agreement
and the Development on mutually acceptable terms.
9.2.2 Termination
of Development.
At any
time, and upon notice to CNG, CVBT may elect to terminate the Development
process due to insufficient progress or outright inability to make progress
toward a commercially marketable Treatment for severe CHD.
9.2.3 Termination
After Full Payment.
This
Agreement shall terminate upon payment in full by CVBT to CNG of the maximum
amount set forth in Section 5 hereof.
9.3 Effect
of Termination.
If this
Agreement is terminated pursuant to Sections 9.2.1, 9.2.2 or 9.2.3, neither
party shall have any liability to the other except as agreed upon pursuant
to
the termination, and the ownership of the Heart Drug IP and the Program IP,
including, without limitation, any patents derived therefrom, will revert to
CVBT without further action on the part of any of the parties. To the extent
that evidence of such reversion is required to be placed in a writing, CNG
will,
at CVBT’s request, execute and deliver to CVBT specific assignments of the Heart
Drug IP or the Program IP and execute, acknowledge and deliver to CVBT such
other documents and take such further actions as CVBT may consider necessary
or
appropriate to confirm or vest title in such intellectual property in CVBT.
If
the agreement is terminated pursuant to Section 9.2.2, Section 5 will survive
the termination. Under no circumstances will CVBT have an obligation to refund
any portion of the development fee.
10. Indemnification.
10.1 Indemnification
by CVBT.
CVBT
shall indemnify the CNG Indemnitees, pay on demand and protect, defend, save and
hold harmless each CNG Indemnitee from and against any and all Claims incurred
by or asserted against any CNG Indemnitee of whatever kind or nature, including,
without limitation, any claim or liability based upon (a) negligence warranty,
strict liability, violation of government regulation or infringement of patent
or other propriety rights, arising from or occurring as a result any of the
Development or any other services to be performed by CVBT during the term of
the
Agreements pursuant to the Agreements, including, without limitation, any
workers’ compensation claim by any CVBT employee or consultant or other Person
or (b) any breach of the Agreements by CVBT, except, with respect to CNG
Indemnitees in cases in which Claims of CNG Indemnitees are based upon the
gross
negligence or willful misconduct of an CNG Indemnitee. An CNG Indemnitee shall
promptly notify CVBT of any Claim with respect to which an CNG Indemnitee is
seeking indemnification hereunder, upon becoming aware thereof, and permit
CVBT
at CVBT’s cost to defend against such Claim and shall cooperate in the defense
thereof.
6
10.2 Indemnification
by CNG.
CNG
shall indemnify the CVBT Indemnitees, pay on demand and protect, defend, save
and hold harmless each CVBT Indemnitee from and against any and all Claims
incurred by or asserted against any CVBT Indemnitee of whatever kind or nature,
including, without limitation, any claim or liability based upon negligence,
warranty, strict liability, violation of government regulation or infringement
of patent or other propriety rights, arising from or occurring as a result
of
any breach of the Agreements by CNG, except, with respect to CVBT Indemnitees,
in cases in which Claims are based upon the gross negligence or willful
misconduct of a CVBT Indemnitee. An Indemnitee hereunder shall promptly notify
CNG of any Claim with respect to which such Indemnitee is seeking
indemnification hereunder, upon becoming aware thereof, and permit CNG at CNG’s
cost to defend against such Claim and shall cooperate in the defense
thereof.
10.3 Defense
of Claims.
None of
CVBT or CNG shall enter into, or permit, any settlement of any Claim for which
indemnification is being sought by such party hereunder without the express
written consent of each other party (or a CVBT or CNG Indemnitee, as the case
may be), which consent shall not be unreasonably withheld or delayed. Each
party
may, at its option and expense, have its own counsel participate in any
proceeding which is under the direction of another party (the “Indemnifying
Party”) and will cooperate with the Indemnifying Party and its insurer in the
disposition of any such matter; provided, however, that if the Indemnifying
Party shall not defend such Claim, the other party shall have the right to
defend such Claim itself and recover from the Indemnifying Party all reasonable
attorneys’ fees and expenses incurred by it during the course of such
defense.
10.4 Consequential
Damages.
None of
the parties to this agreement shall be entitled to recover from another party
hereto any special, incidental, consequential or punitive damages.
11. Miscellaneous.
11.1 No
Implied Waivers; Rights Cumulative.
No
failure on the part of CVBT or CNG to exercise and no delay in exercising any
right, power, remedy or privilege under this Agreement or provided by statute
or
at law or in equity or otherwise, including, without limitation, the right
or
power to terminate this Agreement, shall impair, prejudice or constitute a
waiver of any such right, power, remedy or privilege or be construed as a waiver
of any breach of this Agreement or as an acquiescence therein, nor shall any
single or partial exercise of any such right, power, remedy or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power, remedy or privilege.
11.2 Force
Majeure.
CVBT
and CNG shall each be excused for any failure or delay in performing any of
their respective obligations under this Agreement, if such failure or delay
is
caused by a force, effect, cause or circumstance beyond the control of the
nonperforming party.
11.3 Relationship
of the Parties.
Nothing
contained in this Agreement is intended or is to be construed to constitute
CVBT
and CNG as partners or joint venturers or one party as an employee of any other
party. Except as expressly provided herein, no party hereto shall have any
express or implied right or authority to assume or create any obligations on
behalf of or in the name of any other party or to bind any other party to any
contract, agreement or undertaking with any third party.
7
11.4 Notices.
All
notices, requests and other communications to CVBT or CNG hereunder shall be
in
writing (including telecopy or electronic mail (“e-mail”) transmissions), shall
refer specifically to this Agreement and shall be personally delivered or sent
by telecopy, facsimile or e-mail transmission or by registered mail or certified
mail, return receipt requested and postage prepaid, or by reliable overnight
courier service, in each case to the respective address specified below (or
to
such address as may be specified in writing to the other party
hereto):
| If to CVBT, addressed to: |
0000
Xxxxxxx Xxxxxx Xxxxxx
Xxxxx
000
Xxx
Xxxxx, Xxxxxx 00000
Attention:
Xxxxxxx X. Xxxx, CFO
Fax
No.:
000-000-0000
E-mail:
xxxxx@xxxx.xxx
with
a
copy to the attention of General Counsel (using the same information above
except if via email, then also to xxxxx@xxxx.xxx)
| If to CNG, addressed to: |
Cardio
Neo-Genesis, LP
|
0000
Xxxxxxxxxxxx Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
Attention:
Xxxx X. Xxxx
Fax
No.:
000-000-0000
E-mail:
xxxx0000@xxxxx.xxx
Each
party shall provide each other party with copies of any notices sent hereunder,
with such copies sent at the same time as the original notice. Any notice or
communication given in conformity with this Section 11.4 shall be deemed to
be
effective when received by the addressee, if delivered by hand, telecopy or
electronic transmission, three days after mailing, if mailed and one business
day after delivery either to a reliable overnight courier service or via any
electronic means permissible under this Agreement provided the sender has
confirmation of successful transmission.
11.5 Successors
and Assigns.
The
terms and provisions of this Agreement shall inure to the benefit of, and be
binding upon, CVBT, CNG, and their respective successors and assigns; provided,
however, that CVBT and CNG may not assign or otherwise transfer any of their
respective rights and interests, nor delegate any of their respective
obligations, hereunder, including, without limitation, pursuant to a merger
or
consolidation, without the prior written consent of the other party hereto;
provided further, however, that CVBT may fully assign its rights and interests,
and delegate its obligations, hereunder, effective upon written notice thereof
(a) to an Affiliate if such Affiliate assumes all of the obligations of CVBT
hereunder and this Agreement remains binding upon CVBT; or (b) to any Person
that acquires all or substantially all of the assets of CVBT, or which is the
surviving Person in a merger or consolidation with CVBT, if such Person assumes
all the obligations of CVBT hereunder. Any attempt to assign or delegate any
portion of this Agreement or the results of the Development in violation of
this
Section 11.5 shall be null and void. Subject to the foregoing any reference
to
CVBT or CNG hereunder shall be deemed to include the successors thereto and
assigns thereof.
8
11.6 Amendments.
No
amendment, modification, waiver, termination or discharge of any provision
of
this Agreement, nor consent by CVBT or CNG to any departure there from, shall
in
any event be effective unless the same shall be in writing specifically
identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged and signed by CVBT and CNG, and each amendment,
modification, waiver, termination or discharge shall be effective only in the
specific instance and for the specific purpose for which given and shall not
be
deemed to be a wavier, termination or discharge for any subsequent individual
or
repeated similar or different instance or purpose. No provision of this
Agreement shall be varied, contradicted or explained by any other agreement,
course of dealing or performance or any other matter not set forth in an
agreement in writing and signed by CVBT and CNG.
11.7 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware, as applied to contracts made and performed entirely within
the State of Delaware. Except as otherwise provided herein, any claim or
controversy arising out of or related to this contract or any breach hereof
shall be submitted to a court of competent jurisdiction in the State of Nevada,
and the parties hereby consent to the jurisdiction and venue of such
court.
11.8 Taxes.
If a
law or governmental regulation requires withholding of taxes on any payment
due
hereunder, such taxes shall be deducted from any amount to be remitted hereunder
and shall be paid to the proper taxing authority, and proof of payment shall
be
provided to the party on whose behalf such taxes were paid as evidence of such
payment in such form as required by the tax authorities having jurisdiction
thereover.
11.9 Severability.
If any
provision hereof should be held invalid, illegal or unenforceable in any respect
in any jurisdiction, then, to the fullest extent permitted by law, (a) all
other
provisions hereof shall remain in full force and effect in such jurisdiction
and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability
of
such provision in any other jurisdiction. To the extent permitted by applicable
law, CVBT and CNG hereby waive any provision of law that would render any
provision hereof prohibited or unenforceable in any respect.
9
11.10 Confidentiality.
Any
party receiving Confidential Information shall maintain the confidential and
proprietary status of such Confidential Information, keep such Confidential
Information and each part thereof within its possession or under its control
sufficient to prevent any activity with respect to the Confidential Information
that is not specifically authorized or contemplated by this Agreement, use
all
commercially reasonable efforts to prevent the disclosure of any Confidential
Information to any other Person, and use commercially reasonable efforts to
ensure that such Confidential Information is used only for those purposes
specifically authorized or contemplated herein; provided, however, that such
restriction shall not apply to any Confidential Information that is (a)
independently developed by the receiving party outside the scope of this
Agreement (provided, however, that such restriction shall apply to any
technology grants by CVBT to CNG under this Agreement), (b) in the public domain
at the time of its receipt or thereafter becomes part of the public domain
through no fault of the receiving party, (c) received without an obligation
of
confidentiality from a third party having the right to disclose such
information, (d) released from the restrictions of this Section 11.10 by the
express written consent of the disclosing party, (e) disclosed to any permitted
assignee, permitted sublicensee or permitted subcontractor of CVBT under the
Agreements (if such assignee, sublicensee or subcontractor is subject to the
provisions of this Section 11.10 or substantially similar provisions) or (f)
required by law, statute, rule or court order to be disclosed provided the
receiving party promptly provides sufficient notice to the disclosing party
so
that the disclosing party may seek a protective order or other confidential
treatment (the disclosing party shall, however, use commercially reasonable
efforts to obtain confidential treatment of any such disclosure). The
obligations set forth in this Section 11.10 shall survive the expiration or
termination of this Agreement. Without limiting the generality of the foregoing,
CVBT and CNG each shall use commercially reasonable efforts to obtain, if not
already in place, confidentiality agreements from their respective employees,
subcontractors and agents, similar in scope to this Section 11.10, to protect
the Confidential Information.
11.11 Trading
Limitations.
In
addition to being Confidential Information, the results of the Development
will
be deemed material nonpublic information until disclosed to the public by CVBT
in a report to the Securities and Exchange Commission (the “SEC”), or, if
applicable and/or permissible and/or appropriate, in a press release or
published on CVBT’s web site in an event where a filing with the SEC is not
required or is discretionary. If CNG is in possession of, or otherwise has
knowledge of, the results of the Development before such public disclosure
by
CVBT, CNG acknowledges and agrees that it may not trade in CVBT securities.
Further, CNG agrees to obtain a similar acknowledgment and agreement from its
partners.
11.12 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which
counterpart, when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the
same
instrument.
11.13 Entire
Agreement.
This
Agreement, together with any agreements referenced herein, constitute, on and
as
of the date hereof, the entire agreement of CVBT and CNG with respect to the
subject matter hereof, and all prior or contemporaneous understandings or
agreements, whether written or oral, between CVBT and CNG with respect to such
subject matter are hereby superseded in their entirety.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
10
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
| CARDIOVASCULAR BIOTHERAPEUTICS, INC. | |||
| By | /s/ Xxxxxxx X. Xxxx | ||
|
Xxxxxxx
X. Xxxx
Its
Chief Financial Officer
|
|||
| Cardio Neo-Genesis, LP | |||
| By | Neo Cardio Partners, LLC | ||
| Its General Partner | |||
| By | /s/ Xxxx X. Xxxx | ||
| Xxxx X. Xxxx
Its
Manager
|
|||
11
SCHEDULE
1.1
DEFINITIONS
“Affiliate”
of a person shall mean a Person that directly or indirectly through one or
more
intermediaries, controls, is controlled by or is under common control with
such
Person. “Control” (and, with correlative meanings, the terms “controlled by” and
“under common control with”) shall mean the possession of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting stock, by contract or otherwise. In the case
of
a corporation, “control” shall mean, among other things, the direct or indirect
ownership of more than 50% of its outstanding voting stock.
“Agreements”
means the Development Agreement and the Technology License
Agreement.
“Available
Funds” shall mean the Investment proceeds.
“Claim”
shall mean any and all liabilities, damages, losses, settlements, claims,
actions, suits, penalties, fines, costs or expenses (including, without
limitation, reasonable attorneys’ fees).
“Confidential
Information” shall mean the Heart Drug IP described in Schedule 2.1 hereof and
all Program IP developed by CVBT (and its Affiliates) and disclosed to CNG
pursuant to the Agreements.
“CVBT
Indemnitee” shall mean CVBT, its successors and assigns, and the directors,
officers, employees, agents and counsel thereof.
“Development”
shall mean the further development of the Heart Drug IP for the purpose of
advancing the FDA Process toward development of a treatment for severe CHD
approved for commercialization by the FDA.
“Development
Agreement” shall mean the Development Agreement dated as of November 11, 2008
between CVBT and CNG, as amended, modified or supplemented from time to
time.
“FDA”
shall mean the United States Food and Drug Administration or any successor
agency or authority, the approval of which is required to market biologic
products in the United States.
“FDA
Process” shall mean the clinical trials and other activities necessary to obtain
FDA approval for commercialization.
“Form
10-K” shall mean CVBT’s annual report on Form 10-K to the SEC pursuant to the
Securities Exchange Act of 1934, as amended.
1.1-1
“Form
10-Q” shall mean CVBT’s quarterly report on Form 10-Q to the SEC pursuant to the
Securities Exchange Act of 1934, as amended.
“Force
Majeure” shall mean any act of God, any accident explosion, fire, storm,
earthquake, flood, drought, peril of the sea, riot, embargo, war or foreign,
federal, state or municipal order of general application, seizure, requisition
or allocation, any failure or delay of transportation, shortage of or inability
to obtain supplies, equipment, fuel or labor or any other circumstance or event
beyond the reasonable control of the party relying upon such circumstance or
event.
“Investment”
means the amount actually provided by CNG pursuant to its agreement in Section
4
hereof.
“Person”
shall mean any individual, partnership, corporation, firm, association,
unincorporated organization, joint venture, trust or other entity.
“Program
IP” shall have the meaning ascribed to it in Section 3.4 hereof.
“CNG
Indemnitee” shall mean CNG, its successors and assigns, and the directors,
officers, employees, agents and counsel thereof.
“SEC”
means the U.S. Securities and Exchange Commission.
“Technology
Agreement” shall mean the Technology License Agreement dated as of November 11,
2008 among CVBT and CNG, as amended, modified or supplemented from time to
time.
1.1-2
SCHEDULE
2.1
DESCRIPTION
OF HEART DRUG IP
CVBT
has
a proprietary position regarding the use of FGF-1 to promote angiogenesis in
the
heart. In particular, Patent No. 7,252,818 listed in the Table below, covers
injection of the FGF-1 protein into the heart muscle by any method, which
effectively blocks others from utilizing our approach. CVBT, in joint ownership
with Phage Biotechnology, also holds numerous U.S. and foreign patents on the
manufacturing process to produce FGF-1.
CVBT
Patents and Patent Applications
Current
as of the date of this agreement
Domestic
Patents
|
Holder
|
Patent
|
Patent
Number
|
Issue
Date
|
Expiration
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
6,268,178
|
July
31, 2001
|
May
25, 2019
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
6,794,162
|
September
21, 2004
|
May
17, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
6,773,899
|
August
10, 2004
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Method
of Producing Biologically Active Human Acidic Firbroblast Growth
Factor
and its Use in Promoting Angiogenesis
|
6,642,026
|
November
4, 2003
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Method
of Producing Biologically Active Human Acidic Firbroblast Growth
Factor
and its Use in Promoting Angiogenesis
|
7,252,818
|
August
7, 2007
|
August
27, 2023
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Kluyveromyces
Strains Metabolizing Cellulosic and Hemicellulosis
Materials
|
7,344,876
|
March
18, 2008
|
January
16, 2024
|
3.1-1
Foreign
Patents
|
Holder
|
Country
|
Patent
|
Patent
Number
|
Issue
Date
|
Expiration
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Australia
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
2001284914
|
May
26, 2006
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Australia
|
Method
of Producing Biologically Active Human Acidic Fibroblast Growth Factor
and
its Use in Promoting Angiogenesis
|
2001288256
|
July
13, 2006
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Austria
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
April
13, 2005
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Austria
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
E358135
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Belgium
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
April
13, 2005
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Belgium
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Switzerland
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
April
13, 2005
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Germany
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
April
13, 2005
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Germany
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
60127561.6
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Europe
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
March
28, 2007
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Europe
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
France
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
April
13, 2005
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
France
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
United
Kingdom
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
April
13, 2005
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
United
Kingdom
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Ireland
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
April
13, 2005
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Ireland
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Italy
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Korea
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
00-0000000
|
September
18, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Liechtenstein
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1180153
|
April
13, 2005
|
May
24, 2020
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Netherlands
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Spain
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
|
CardioVascular
BioTherapeutics, Inc./Phage Biotechnology Corporation
|
Switzerland
|
Phage-Dependent
Super-Production Of Biologically Active Protein And
Peptides
|
1309604
|
March
28, 2007
|
August
15, 2021
|
3.1-2
SCHEDULE
3.1
TECHNOLOGY
LICENSE AGREEMENT
3.1-3
SCHEDULE
3.2.1
WORK
PLAN
We
have
initiated our Phase II Clinical Trial in patients with severe angina and
coronary heart disease. Screening of patients has commenced and it is
anticipated the first patients will be dosed in early November, 2008. We
estimate it will take approximately 12 months to enroll and treat the proposed
120 patients that will be included in this double-blind, placebo-controlled
trial examining three doses of FGF-1. This would allow us to start our pivotal
Phase III trial in 2010, which should run for approximately 12-24 months,
followed by preparation and submission of a New Drug Application (NDA) to the
FDA. A timetable for these activities is given below in the product development
table (Table I).
The
international clinical research organization, Xxxxxx, is running the Phase
II
clinical trial for CVBT, and with the input of the Cordis Corp, the manufacturer
of the XXXX catheter system, has lined up a very impressive list of hospitals
and medical centers which are working their way through the approval process
to
participate in the heart trial.
3.2.1-1
SCHEDULE
4
DEVELOPMENT
FEE
Up
to
$15,000,000
$173,000
payable
upon execution of the sponsor agreement, up to $15,000,000
on a
best-efforts basis not later than April 30, 2009. Scheduled closings at 3:00
p.m. Thursdays unless the parties agree otherwise.
Schedule
of Amounts Paid
|
Acknowledged
Receipt by CVBT
|
||||||
|
Date
|
Amount
|
Name
|
Initials
|
|||
|
11/11/08
|
$173,000
|
Xxxxxxx
X. Xxxx
|
||||
|
Total
|
$173,000
|
|||||
|
/s/
Xxxxxxx X. Xxxx
|
|
|
By
CVBT on 11/11/08
(date)
|
3.2.1-2
SCHEDULE
5
Schedule
of Units Issued in CNG
3.2.1-3
