EXHIBIT 10.11
RESEARCH AGREEMENT
THIS AGREEMENT, dated as of December 26, 2001, is entered into by and
between Spectrum Laboratories, Inc., a Delaware corporation ("Spectrum"), and
Xxxxxx Technologies, Inc., a Delaware corporation ("Xxxxxx").
RECITALS
X. Xxxxxx and Spectrum desire to combine their expertise and their
respective technologies to enable Xxxxxx to develop Liver Assist Systems (LAS),
conduct pre-clinical and Phase I-III clinical testing, obtain regulatory
approval(s), and commercialize LAS(s).
B. Under the terms of this Agreement, Spectrum will perform certain
research on LAS devices for Xxxxxx during product development, pre-clinical and
clinical testing and regulatory approval(s) at no cost to Xxxxxx in partial
consideration for the issuance of Common Stock of Xxxxxx as set forth in the
Stock Purchase Agreement.
AGREEMENT
NOW, THEREFORE, the Parties hereto agree as follows:
SECTION 1. DEFINITIONS
All capitalized terms, unless otherwise defined herein, have the
definitions as set forth below:
"AFFILIATE" means any corporation or other business entity which controls,
is controlled by or is under common control with a Party to this Agreement,
without regard to equity ownership. For purposes hereof, the terms "control" and
"controls" mean the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a corporation, person or
entity, whether through the ownership of voting securities, by contract or
otherwise...
"CONFIDENTIAL INFORMATION" means the information that is confidential or
proprietary to a Party or that the Party is otherwise obligated to keep
confidential (e.g., pursuant to a contractual or other obligation owing to a
Third Party), including, but not limited to, the Licensed Patents, the Spectrum
Technology, and any Proprietary Rights related thereto. Confidential Information
does not include any information that (a) was known to the Recipient prior to
receiving the same from the discloser in connection with this Agreement; (b) is
independently developed by the Recipient; (c) is acquired by the Recipient from
another source without restriction as to Use or Distribution; or (d) is or
becomes publicly available or part of the public domain through no fault or
action of the Recipient.
"CONFIDENTIAL MATERIAL" means any document, diskette, tape, writing,
prototype, or other tangible item (whether handwritten, printed, coded,
magnetic, electronic, or other form or media) which contains, displays,
embodies, or manifests any Confidential Information.
"DEVELOP" means to engineer, prepare, write, invent, create, reduce to
practice, conceive, discover, formulate, design, test, or otherwise develop.
"DISCLOSER" means a Party that discloses Confidential Information to the
other Party.
"DISTRIBUTE" means to market, sell, have sold, offer for sale, rent, lease,
license, sublicense, assign, transfer, allow to use, import, export, disclose,
publish, provide, distribute or otherwise dispose of.
"EFFECTIVE DATE" means the date upon which the last of the following
documents is executed and delivered by all of the Parties hereto and thereto (a)
this Agreement; (b) the Stock Purchase Agreement; (c) the License Agreement; and
(d) the Manufacturing Agreement.
"FIELD OF USE" means the fields of (a) artificial blood therapy; and (b)
bioprocessing and therapeutic devices. The Field of Use shall include, without
limitation, liver assist systems, artificial gut, bioartificial kidney,
hemodialysis and/or hemofiltration devices, and devices producing biologically
active compounds, including, but not limited to, monoclonal antibodies,
hormones, peptides and vaccines.
"INVESTIGATOR" means the Principal Investigator set forth in Section 3.2
and any other Spectrum employee or position identified in the attached Exhibit
D.
"IMPROVEMENTS" means any and all processes, uses, designs, applications,
methods and compositions of matter, indications, improvements, enhancements and
modifications.
"LAS" means liver assist system.
"LICENSE" means the rights granted under Section 2.1 of the License
Agreement.
"LICENSE AGREEMENT" means the License Agreement between the Parties that is
executed substantially contemporaneously with this Agreement.
"MAKE" means manufacture, fabricate, assemble, produce, reproduce, make or
have made.
"MANUFACTURING AGREEMENT" means the Manufacturing and Supply Agreement
between the Parties that is executed substantially contemporaneously with this
Agreement.
"MILESTONE" means one of the research milestones as set forth on the
attached Exhibit C.
"PARTY" means Spectrum and/or Xxxxxx, as the context requires.
"PERSON" means any individual, corporation, limited liability company,
partnership, trust, association, governmental authority, or other entity.
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"PROPRIETARY RIGHT" means any patent, copyright, trade secret, or other
intellectual property right (including, but not limited to, any moral right)
under the laws of any jurisdiction, whether registered, unregistered, statutory,
common law, or otherwise (including, but not limited to, any rights to xxx,
recover damages or obtain other relief for any past or future infringement, and
any rights under any application, assignment, license, legal opinion, or
search); provided, however, that the term "Proprietary Right" does not include
any trademark, service xxxx or trade name.
"RECIPIENT" means a Party that receives any Confidential Information from
the other Party.
"SPECTRUM TECHNOLOGY" means any existing or future Technology owned,
licensed or otherwise possessed or known to Spectrum.
"STLAS" means a LAS or other Technology in the Field of Use that
incorporates or is based upon Spectrum Technology.
"STOCK PURCHASE AGREEMENT" means an agreement providing for the issuance of
certain shares of Xxxxxx Common Stock to Spectrum that is executed by the
Parties substantially contemporaneously with this Agreement.
"TECHNOLOGY" means all inventions, discoveries and Improvements, whether or
not patentable, trade secrets, data, information, copyrights and know-how,
including, but not limited to, biological and chemical materials, technical and
nontechnical data, the results of tests, assays, methods, unpublished patent
applications, unpatented technology and preclinical and clinical information.
"THIRD PARTY" means any Person that is not a Party.
"UNAUTHORIZED USE" means any Development, Distribution, Making or Use of
the Confidential Information or Confidential Materials not authorized by this
Agreement.
"USE" means to consume, copy, display, duplicate, disclose, employ,
incorporate, manipulate, operate, perform, practice, publish or otherwise use.
"YEAR" means the period of time beginning on the Effective Date or any
anniversary thereof, and ending on the following anniversary of the Effective
Date.
SECTION 2. RESEARCH PROGRAM
2.1 RESEARCH PLAN AND BUDGET PLAN
The Parties shall conduct research and development (the "Research Program")
regarding applications of the Spectrum Technology in the Field of Use as set
forth in the research plan attached hereto as Exhibit A (the "Research Plan"),
according to the budget attached hereto as Exhibit B (the "Budget Plan") and
subject to the terms and conditions of this Agreement. Spectrum's obligations
under the research agreement may be terminated by Spectrum on 30 days written
notice to Xxxxxx with or without cause.
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2.2 UPDATES OF THE RESEARCH PLAN AND BUDGET PLAN
No later than ninety (90) days before the end of each Year, the Parties
shall confer and agree upon the Research Plan and Budget Plan that shall govern
the Research Program during following Year. In addition, the Research Plan and
Budget Plan may be amended from time to time in writing by mutual agreement of
the Parties. If the Parties are unable to agree upon the Research Plan and
Budget Plan for the next Year, then the current Research Plan and Budget Plan
shall apply for the following Year.
SECTION 3. SPECTRUM RESPONSIBILITIES
3.1 RESEARCH
Spectrum shall make a good faith effort to conduct research and product
development according to the Research Plan during a period of four (4) years,
however, Spectrum makes no representation or warranty that particular technical
goals will be successfully achieved. Evidence of a good faith effort includes,
but is not limited to, the following activities, if undertaken by Spectrum:
(a) staffing the Research Program with Investigators as set forth in the
Research Plan, or as otherwise agreed by Xxxxxx and Spectrum;
(b) conducting research and product development according to the guidelines
of the Research Plan; and
(c) completing Milestones in a timely manner.
3.2 PRINCIPAL INVESTIGATOR
F. Xxxxx Xxxxxxxx shall act as principal investigator with respect to the
Research Project, unless replaced as provided below (the "Principal
Investigator"). The Principal Investigator shall be responsible for the conduct
of the Research Project and shall supervise the work performed by Spectrum
pursuant to the Research Plan and this Agreement. In the event that the
Principal Investigator becomes unavailable or is unable to complete his duties
for any reason, Spectrum shall appoint a successor with the written consent of
Xxxxxx, such consent not to be unreasonably withheld.
3.3 INVESTIGATORS
The Principal Investigator and all other Investigators shall assign to
Xxxxxx all of their Proprietary Rights in any Improvements or other Technology
Developed or Made in connection with the Research Program, whether or not such
Improvement or Technology is patentable.
3.4 MODIFICATION OF SPECTRUM TECHNOLOGY
Spectrum shall make all good faith efforts to modify the Spectrum
Technology and create Improvements according to the Research Plan or as
otherwise indicated by Xxxxxx from time to time in writing (including, but not
limited to, specifications intended to achieve a desired function, improve
performance or biosafety, allow the attachment of ancillary components or
features, to improve STLAS functionality or to obtain regulatory approval).
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3.5 REPORTING
The Principal Investigator, on behalf of Spectrum, shall prepare an annual
report of its progress toward achieving the Milestones, to be delivered to
Xxxxxx within ninety (90) days after the end of each calendar year. In addition
to the annual report, upon achieving any Milestone, Spectrum shall promptly
notify Xxxxxx of such achievement.
3.6 DISCLOSURE
Spectrum shall promptly disclose and make available to Xxxxxx applicable
Spectrum Technology and applicable Improvements thereto for use in connection
with the Research Program.
3.7 ASSISTANCE IN OBTAINING REGULATORY APPROVAL
The Principal Investigator, on behalf of Spectrum, shall consult with and
assist Xxxxxx in Xxxxxx' efforts to obtain regulatory approval for the STLAS
pursuant to Section 4.1.
3.8 THIRD PARTIES
In the performance of the Research Program, Spectrum shall not use the
services or technology of, or collaborate with, any Third Party without the
prior written consent of Xxxxxx.
SECTION 4. XXXXXX RESPONSIBILITIES
4.1 REGULATORY APPROVAL
Xxxxxx shall use good faith efforts to seek regulatory approval for the
STLAS, including, but not limited to:
(a) preparing an Investigational New Drug ("IND") application to conduct
human studies for joint submission to the FDA, following up on IND procedural
requirements, attending meetings with the FDA and preparing and filing a
Pre-Market Approval and a Product and Establishment Licensing application with
the FDA; and
(b) coordinating clinical trials for the STLAS.
4.2 COMMERCIALIZATION
Xxxxxx shall use good faith efforts to commercialize the STLAS, including,
but not limited to:
(a) producing or procuring liver cells in sufficient quality and quantities
for clinical trials;
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(b) engineering and making available prototype facilities for the
production of the STLAS, including facilities for device and hepatocyte
processing and, if necessary, production of devices;
(c) undertaking all associated marketing, sales, and distribution
activities.
4.3 MARKETING
Xxxxxx shall make a good faith effort to market the STLAS, but makes no
representation or warranty that regulatory approval can be obtained for any of
the STLAS systems under consideration or that any of the STLAS systems under
consideration can be marketed. Evidence of a good faith effort includes, but is
not limited to, the following activities, if undertaken by Xxxxxx or an Xxxxxx
Affiliate or sublicensee:
(a) completing Milestones in a timely manner;
(b) conducting pre-clinical and clinical testing as may be necessary to
provide proof of feasibility and/or to secure regulatory approval;
(c) applying for and reasonably pursuing such regulatory approval;
(d) promptly marketing any STLAS for which regulatory approval has been
obtained.
4.4 REPORTING
Xxxxxx shall prepare an annual report of its progress toward achieving the
Milestones, to be delivered to Spectrum within ninety (90) days after the end of
each calendar year. In addition to the annual report, upon achieving any
Milestone, Xxxxxx shall notify Spectrum of such achievement.
SECTION 5. FUNDING
5.1 RESEARCH EXPENSES
Spectrum shall pay for all costs and expenses in connection with the
Research Program, as set forth in the Budget Plan, subject to the following:
(a) Spectrum shall allocate one hundred thirty seven thousand five hundred
dollars ($137,500) per Year solely to the Research Program (the "Annual
Budget");
(b) any unused portion of an Annual Budget at Year's end (the "Carry-Over")
will be added to the full Annual Budget for the next Year;
(c) Spectrum shall allocate a total of five hundred and fifty thousand
dollars ($550,000) (the "Total Budget") solely to the Research Program;
provided, that this Research Agreement lasts at least four (4) Years as provided
in Section 3.1; and
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(d) Spectrum shall be permitted to exceed the individual category budgets
set forth in the Budget Plan by up to twenty percent (20%); provided, that the
total Annual Budget plus any Carry-Over from the previous Year, are not
exceeded.
5.2 REPORTING
Spectrum shall deliver to Xxxxxx within sixty (60) days after the end of
each Quarter, a quarterly report (the "Quarterly Report") prepared according to
its customary accounting practices, which reflects costs incurred by Spectrum
pursuant to this Agreement. These costs shall include: (i) salaries, wages and
established employee benefits; (ii) costs of any purchased equipment, materials
and supplies; and (iii) other costs and expenses for the Research Project.
Additionally, Spectrum shall:
(a) exercise its best effort to ensure that all financial statements and
financial reports to Xxxxxx accurately reflect all activities and transactions
handled in connection with the Research Project and that such data may be relied
upon in any further recording and reporting by Xxxxxx for whatever purpose;
(b) any piece of equipment purchased at a cost in excess of twenty-five
hundred dollars ($2,500) shall be specifically identified by Spectrum in an
attachment to its Quarterly Report;
(c) during the Term and for a period of three (3) years thereafter,
Spectrum shall keep or cause to be kept, in accordance with generally accepted
accounting practices, books, records and accounts covering all information
necessary for the accurate accounting of funds spent by Spectrum in connection
with the Research Program; and
(d) within ninety (90) days after expiration or termination of the Term,
furnish to Xxxxxx a final reporting (the "Final Report") of all costs and
expenses incurred in performing its obligations under this Agreement. Such
reporting shall be prepared according to Spectrum's customary accounting
practices, and shall be itemized in reasonable detail.
5.3 REPURCHASE RIGHT
In consideration of Spectrum's obligations hereunder, under the License
Agreement and under the Manufacturing Agreement, Xxxxxx will issue to Spectrum
certain shares of Xxxxxx Common Stock (the "Shares") as set forth in the Stock
Purchase Agreement. The Shares shall be subject to a limited right of repurchase
by Arbios as follows:
(a) Xxxxxx or its assignees shall have the option to repurchase all or a
portion of the Unvested Shares (as defined below) on the terms and conditions
set forth in this Section (the "Repurchase Option") upon (i) termination or
expiration of this Agreement, the License Agreement or the Manufacturing
Agreement for any reason, (ii) upon material breach of Spectrum's obligations
under Section 5.1 or 5.2 above or (iii) material breach of Spectrum's
obligations under the License Agreement or Manufacturing Agreement.
(b) Shares that are vested pursuant to the schedule set forth herein are
"Vested Shares". Shares that are not vested pursuant to the schedule set forth
herein are "Unvested Shares". Unvested Shares may not be sold or otherwise
transferred by Purchaser without the Company's prior written consent, which may
be given or withheld in its sole and absolute discretion. On the Effective Date
all of the Shares will be Unvested Shares. On each successive anniversary of the
Effective Date (each a "Vesting Date"), twenty five percent (25%) of the
aggregate Shares shall become Vested Shares provided that Spectrum has spent at
least one hundred thirty seven thousand five hundred dollars ($137,500) in
actual aggregate expenditures for the Research Program in the preceding twelve
(12) month period; provided, however, that if Spectrum spends more than $137,500
for the Research Program in any twelve (12) month period, such excess amount may
be carried forward to the following year for purposes of calculating the Vested
Shares for such following year. All vesting shall cease on the Termination Date
or any exercise of the Repurchase Option under Section 5.3(a)(i) or (iii). In
addition, all vesting shall cease as to any repurchased Shares upon exercise of
the Repurchase Option. If the application of the vesting percentage results in a
fractional share, such share shall be rounded down to the nearest whole share
for each Vesting Date except for the last Vesting Date for which such share
shall be rounded up to the nearest whole share. Unless and until the exercise of
the Repurchase Option with respect to any Shares, Spectrum shall have the right
to vote such Shares.
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(c) The number of Shares that are Vested Shares or Unvested Shares will be
proportionally adjusted to reflect any stock dividend, stock split, reverse
stock split or recapitalization of the common stock of Xxxxxx occurring after
the Effective Date.
(d) At any time within ninety (90) days after the event triggering the
Repurchase Option, Xxxxxx may elect to repurchase any or all of the Unvested
Shares by giving Spectrum written notice of exercise of the Repurchase Option.
Xxxxxx and/or its assignee(s) will then have the option to repurchase from
Spectrum any or all of the Unvested Shares at the par value of the Shares
($.00001 per share) (the "Repurchase Option Price").
(e) The Repurchase Option Price will be payable, at the option of Xxxxxx or
its assignee(s), by check, wire transfer or by cancellation of all or a portion
of any outstanding indebtedness owed by Spectrum to Xxxxxx (or its assignee) or
by any combination thereof. The Repurchase Option Price will be paid without
interest within ninety (90) days after Xxxxxx gives Spectrum written notice of
the exercise of its Repurchase Option.
(f) Nothing in this Agreement will be construed to limit or otherwise
affect in any manner whatsoever the right or power of Xxxxxx (or any parent,
subsidiary or affiliate thereof) to terminate this Agreement in accordance with
Section 9 hereof.
5.4 AUDIT
The Parties or its assignee (the "Auditing Party") may examine and audit
each other's records and processes relating to its obligations under this
Agreement, at the Auditing Party's expense, for the purpose of ensuring accurate
accounting and reporting of its obligations under this Agreement. Any audit will
be conducted by an authorized representative of the Auditing Party, during
regular business hours at the audited Party's offices, and will not interfere
unreasonably with the audited party's business activities. Audits will be made
no more frequently than once annually, and the Auditing Party will give the
other Party at least thirty (30) days' prior written notice of the date of each
such audit and the name of the Auditing Party's audit representative. The audit
representative will give the Auditing Party and the Audited Party an audit
report containing the information necessary to indicate compliance or material
noncompliance with the Agreement. If the audit report indicates noncompliance
with the Agreement, Audited Party shall take appropriate actions to correct such
noncompliance and reimburse the Auditing Party for the cost of such audit, and
the Auditing Party may conduct subsequent audits semi-annually in accordance
with the provisions above.
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SECTION 6. PATENT PROSECUTION, MAINTENANCE AND DEFENSE
The ownership, filing, prosecution, maintenance and defense of any patent
rights with respect to Improvements or other Technology resulting from the
Research Program shall be governed by Sections 2, 3, 4 and 5 of the License
Agreement.
SECTION 7. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
7.1 OTHER AGREEMENTS
Spectrum represents and warrants that it does not have any agreements or
obligations that would prevent or interfere with the performance of the
obligations hereunder except that Spectrum shall have the right under this
Agreement to continue to develop and supply existing customer's liver assist
devices using customer's proprietary designs under existing Product Development
and/or Supply Agreements.
7.2 INDEMNIFICATION
Each Party (the "Indemnifying Party") shall indemnify and hold harmless the
other Party (the "Indemnified Party") and its officers, directors, employees,
agents and representatives from any liability for damage to or loss of property
or injury to or death of any persons arising out of the activities of the
Indemnifying Party under this Agreement, except to the extent such damage, loss,
injury or death results from the gross negligence or willful misconduct of the
Indemnified Party. Upon receipt of any claim or suit with respect to which the
Indemnifying Party is required to provide indemnification hereunder, the
Indemnified Party shall promptly notify the Indemnifying Party and permit the
Indemnifying Party to handle and control the defense of such claim or suit. The
Indemnifying Party shall have the sole right to settle such claim or suit, but
no settlement shall be made that does not include an unconditional release of
all such claims against the Indemnified Party without the Indemnified Party's
prior written consent. Without limiting the generality of the foregoing, the
Indemnifying Party shall pay or reimburse any and all costs and expenses
(including, but not limited to, court costs, expert fees, witness fees and
attorney fees) reasonably incurred by the Indemnified Party in connection with
the defense, settlement or satisfaction of any such claim (including, but not
limited to, any damages, liabilities, penalties, settlements, awards or
judgments based upon any such claim)
SECTION 8. CONFIDENTIALITY
8.1 CONFIDENTIAL INFORMATION
The Recipient shall protect the Confidential Information and Confidential
Materials of the Discloser against any Unauthorized Use to the same extent that
the Recipient protects its own Confidential Information and Confidential
Materials of a similar nature against Unauthorized Use, but in any event shall
use at least a reasonable standard of care; provided that the Confidential
Information and Confidential Materials of the Discloser are conspicuously marked
or otherwise identified as confidential or proprietary upon receipt by the
Recipient or the Recipient otherwise knows or has reason to know that the same
is Confidential Information or Confidential Materials of the Discloser. Each
Party reserves ownership of its own Confidential Information and Confidential
Materials. The Recipient shall use any Confidential Information and Confidential
Materials of the Discloser solely for the purposes for which it is provided by
the Discloser. This section shall not be interpreted or construed to prohibit:
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(a) any Development, Making, Distribution or Use which is necessary or
appropriate in connection with the Recipient's performance of its obligations or
exercise of its rights under this Agreement (e.g., pursuant to the Research
Program) or any other agreement between the Parties;
(b) any Use, Development, Making or Distribution required by applicable law
(e.g., pursuant to applicable securities laws or legal process), provided that
the Recipient uses reasonable efforts to give the Discloser reasonable advance
notice thereof (e.g., so as to afford the Discloser an opportunity to intervene
and seek an order or other appropriate relief for the protection of its
Confidential Information from any Unauthorized Use or disclosure); or
(c) any Use or disclosure made with the consent of the Discloser.
8.2 RETURN OF CONFIDENTIAL INFORMATION
Upon expiration or termination of the Term, the Receiving Party shall
promptly return or certify destruction of all Confidential Information and any
copies made thereto previously made available to the Receiving Party by the
Disclosing Party under this Agreement.
SECTION 9. TERM AND TERMINATION
9.1 TERM
The term shall commence on the Effective Date and, unless sooner terminated
pursuant to Sections 9.2 or 9.3, shall continue until the four (4) year
anniversary of the Effective Date, unless extended by written agreement of the
Parties (the "Term").
9.2 TERMINATION FOR MATERIAL BREACH OR MATERIAL DEFAULT
If either Party commits a material breach of or material default under this
Agreement (the "Defaulting Party"), then the other Party may give such
Defaulting Party written notice of the breach or default (including, but not
necessarily limited to, a statement of the facts relating to the breach or
default, the provisions of this Agreement that are in breach or default, and the
action required to cure the breach or default) and that the Term shall terminate
pursuant to this section if the breach or default is not cured within thirty
(30) days after receipt of notice (or such later date as may be specified in
such notice). If the Defaulting Party fails to cure the specified breach or
default within thirty (30) days after receipt of such notice (or such later date
as may be specified in such notice), then the Term shall terminate.
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9.3 FAILURE TO AGREE UPON REPLACEMENT PRINCIPAL INVESTIGATOR
If the Parties after good faith efforts are unable to agree upon a
replacement for the Principal Investigator pursuant to Section 3.2, Xxxxxx may
terminate the Term upon thirty (30) days' written notice to Spectrum.
9.4 EFFECT OF TERMINATION
In the event of a termination or expiration of the Term, then (a) Spectrum
shall use its best efforts to provide for an orderly, gradual phase-out of
research, development and manufacturing conducted under this Agreement; and (b)
Sections 1, 5.3, 5.4, 6, 7, 9 and 10 shall survive the termination of the Term.
SECTION 10. MISCELLANEOUS
10.1 REMEDIES
Both Parties acknowledge and agree that it would be difficult to measure
damages for breach by either Party of the covenants and obligations under this
Agreement, and that injury from any such breach would be incalculable, and that
money damages would therefore be an inadequate remedy for any such breach.
Accordingly, either Party shall be entitled, in addition to all other remedies
available hereunder or under law or equity, to injunctive or such other
equitable relief as a court may deem appropriate to restrain or remedy any
breach of such covenants.
10.2 ATTORNEYS' FEES
In the event of any action at law or in equity between the Parties hereto
to enforce any of the provisions hereof, the unsuccessful Party to such
litigation shall pay to the successful Party all reasonable costs and expenses,
including reasonable attorneys' fees, incurred therein by such successful Party;
and if such successful Party shall recover a judgment in any such action or
proceeding, such reasonable costs, expenses and attorneys' fees may be included
in and as part of such judgment.
10.3 WAIVER
It is agreed that no waiver by either Party hereto of any breach or default
of any of the covenants or agreements herein set forth shall be deemed a waiver
as to any subsequent or similar breach or default.
10.4 ASSIGNMENT
Neither Party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the prior written consent of the
other Party, except that either Party may sublicense its license rights
hereunder and may assign, delegate or otherwise transfer its rights or
obligations in connection with a merger, consolidation or reorganization of such
Party or to an Affiliate or a purchaser of all or substantially all of its
assets that relate to the subject matter of this Agreement.
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10.5 NOTICES
Any payment, notice or other communication required or permitted to be
given to either Party hereto shall be in writing and shall be deemed to have
been properly given and effective (a) on the date of delivery if delivered in
person, by professional courier or by telecopy; or (b) on the third day after
mailing if mailed by first-class certified mail, postage paid, to the respective
address given below, or to such other address as either Party shall designate by
written notice given to the other Party as follows, or to such other address or
to such other person(s) as may be given from time to time under the terms of
this Section 11.5:
In the case of Spectrum to:
---------------------------
c/o F. Xxxxx Xxxxxxxx c/x Xxxxx & Associates
00000 Xxxxxxxxx Xxxxxx 0000 Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000 Attn: Xxx X. Xxxxx
c/o Xxx X. Xxxxxxxx
00000 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
or in the case of Licensee to:
------------------------------
c/o Xxxxx Xxxxx, MD, PhD
President & CSO
Xxxxxx Technologies, Inc.
Xxxxxx-Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxxx, Xxxx 0000,
000 Xxxxxx Xxxxx Xxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: (310) 423 - 7434
10.6 JURISDICTION AND VENUE
Each Party hereby irrevocably consents to the jurisdiction and venue of the
state or federal courts located in Los Angeles County, State of California, in
connection with any action, suit, proceeding or claim to enforce the provisions
of this Agreement, to recover damages for breach of or default under this
Agreement, or otherwise arising under or by reason of this Agreement.
10.7 GOVERNING LAW
THIS AGREEMENT SHALL BE INTERPRETED, CONSTRUED AND ENFORCED IN ALL RESPECTS
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, U.S.A., WITHOUT
REFERENCE TO ITS CHOICE OF LAW PRINCIPLES TO THE CONTRARY.
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10.8 COUNTERPARTS
This 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.
10.9 MODIFICATION
No amendment or modification hereof shall be valid or binding upon the
Parties unless made in writing and signed by authorized representatives of the
Parties.
10.10 ENTIRE AGREEMENT
This Agreement, together with the Stock Purchase Agreement, the License
Agreement and the Manufacturing Agreement, embodies the entire understanding of
the Parties and shall supersede all previous communications, representations or
understandings, either oral or written, between the Parties relating to the
subject matter hereof.
10.11 SEVERABILITY
Should one or more of the provisions contained in this Agreement for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
hereof and this Agreement shall be construed as if such invalid or illegal or
unenforceable provisions had never been contained herein.
10.12 INDEPENDENT CONTRACTORS
Nothing in this Agreement shall constitute or be deemed to constitute a
partnership or agency between the Parties hereto.
10.13 FURTHER ASSURANCES
At any time and from time to time after the Effective Date, each Party
shall do, execute, acknowledge and deliver, and cause to be done, executed,
acknowledged or delivered, all such further acts, transfers, conveyances,
assignments or assurances as may be reasonably required to consummate the
transactions contemplated by this Agreement.
10.14 HEADINGS
The headings of this Agreement are inserted for convenience only and shall
not be used in the interpretation of this Agreement.
IN WITNESS WHEREOF, Spectrum and Xxxxxx have executed this Agreement as of
the date first above written.
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SPECTRUM LABORATORIES, INC.
By: /s/ F. XXXXX XXXXXXXX
Its:______________________________
XXXXXX TECHNOLOGIES, INC.
By: /s/ XXXXX XXXXX, MD, PHD
Its:______________________________
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EXHIBIT A
TO RESEARCH AGREEMENT
RESEARCH PLAN
The principal goal of the proposed Research Plan is to develop and
manufacture three-compartment hollow fiber modules to enable XXXXXX to develop
multifunctional liver assist system (LAS), conduct pre-clinical and Phase I-III
clinical testing, obtain regulatory approval(s), and commercialize LAS.
The three-compartment hollow fiber module under development is based on
SPECTRUM's proprietary hollow fiber-in-fiber technology (TRIAC(TM)).
According to this Research Plan, SPECTRUM's efforts will be focused on
achieving the following objectives:
(a) Development of LAS modules that accommodate at least 200 g of primary
hepatocytes (porcine, human) and are suitable for at least 12-hour-long blood
perfusion in human patients.
(b) The effective dose of heparin and/or other FDA-approved anticoagulant
used to prevent blood clotting within the perfused LAS module must be within the
range established for conventional methods of blood therapy (e.g., hemodialysis,
hemofiltration).
(c) Blood compatibility of the LAS module must allow for at least
12-hour-long hemoperfusion with minimal, FDA acceptable negative effects on
blood composition (blood cell loss including platelets, loss of plasma proteins
including albumin and clotting factors).
(d) To achieve objectives (a), (b) and (c), the width of an annular space
between the inner and outer fibers will be optimized and semipermeable membranes
with specific anti-thrombotic and anti-fouling surface properties will be used
and/or developed, if deemed necessary.
(e) LAS modules will be built with inner and outer fibers having specific
molecular weight (MW) cut-off. In particular, modules with macroporous outer
fibers and "tight" ultrafiltration inner fibers will be developed to facilitate
integration of liver cell therapy with oxygenation, liver cell therapy with
blood ultrafiltration, liver cell therapy with hemodialysis, liver cell therapy
with hemodiafiltration, and two different forms of blood purification therapy
(e.g., hemodialysis with hemo(dia)filtration).
(f) LAS modules for use in all pre-clinical and clinical trials will be
built and made available to XXXXXX.
According to this Research Plan, XXXXXX'x efforts will be focused on:
(a) Helping SPECTRUM develop clinically useful LAS modules through personal
interaction, intellectual input, trouble-shooting and execution of pilot studies
to optimize specific LAS module parameters.
(b) Testing LAS modules in vitro and in vivo in animals with experimentally
induced liver failure.
(c) Making clinical-grade LAS modules and associated components (e.g.,
tubings, fittings, sample ports, oxygenator, etc.) conform to commercially
available kidney dialysis unit(s).
(d) Developing full-scale, functional prototype of the LAS system for
clinical testing.
EXHIBIT B
TO RESEARCH AGREEMENT
BUDGET PLAN
TO BE PROVIDED BY SPECTRUM
EXHIBIT C
TO RESEARCH AGREEMENT
MILESTONES
1. SPECTRUM shall expend at least the amounts listed below (in the
aggregate) annually toward the development of hollow fiber-in-fiber modules for
XXXXXX' multifunctional liver assist system (LAS), commencing from the Effective
Date and continuing to November 30, 2005. Such amounts shall be directed by
SPECTRUM exclusively to research and development and manufacturing of LAS
modules to enable XXXXXX to develop LAS systems, conduct pre-clinical and Phase
I-III clinical testing, obtain regulatory approval(s), and commercialize LAS(s).
Year (from Effective Date) Annual Dollars Expended
------------------------------------- --------------------------------------
1 $137,500
2 $137,500
3 $137,500
4 $137,500
In the event that in any year, SPECTRUM expends sums in excess of the
amount specified for such year, the excess shall be carried forward for purpose
of satisfying the expenditure requirements for subsequent years.
2. SPECTRUM shall develop and manufacture clinical-grade first-generation
LAS modules for pre-clinical testing within one (1) year after the Effective
Date.
3. SPECTRUM shall develop and manufacture clinical-grade first-generation
LAS modules for clinical testing within two (2) years after the Effective Date.
4. SPECTRUM shall develop and manufacture clinical-grade second-generation
LAS modules for pre-clinical testing within three (3) years after the Effective
Date.
5. SPECTRUM shall develop and manufacture clinical-grade second-generation
LAS modules for clinical testing within four (4) years after the Effective Date.
EXHIBIT D
TO RESEARCH AGREEMENT
INVESTIGATORS
1. SPECTRUM shall designate the following persons as Investigators:
F. Xxxxx Xxxxxxxx shall be the Principal Investigator. He will be
responsible for the overall design, data acquisition and analysis, as well as
the day-to-day execution and supervision of the proposed research. He will be
also responsible for development of areas for future research projects and
problem solving in collaboration with other SPECTRUM's investigators and XXXXXX'
scientists, when deemed necessary.
2. XXXXXX shall designate Xxxxx Xxxxx, M.D., Ph.D. as the Principal
Investigator of all projects related to the development of LAS(s) using
SPECTRUM's fiber-in-fiber membrane technology. He will be responsible for
helping SPECTRUM develop clinically useful LAS modules through personal
interaction, intellectual input, trouble-shooting and execution of pilot studies
to optimize specific LAS module parameters.
