MASTER LICENSE AGREEMENT
THIS MASTER LICENSE AGREEMENT (this "AGREEMENT") is dated as of June 12,
1998 between Cytoclonal Pharmaceutics Inc., a Delaware corporation, having
offices at 0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxxx, Xxxxx 00000 ("CPI"), and
Xxxxxxx-Xxxxx Squibb Company, a Delaware corporation, having offices at Xxxxx
000 xxx Xxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("BMS").
PRELIMINARY STATEMENTS
A. CPI has acquired a license to certain patents and technology relating
to the use of microorganisms for the production of paclitaxel, other taxanes and
other compounds pursuant to a license agreement dated as of June 10, 1993
between Research & Development Institute, Inc. ('"RDI") and CPI, as amended by
amendments dated as of August 13, 1993, February 22, 1995 and May 27, 1998,
respectively, and supplemented by letter dated March 31, 1998 from CPI to RDI
(as so amended and supplemented, the "RDI/CPI LICENSE AGREEMENT").
B. CPI has also acquired a license to certain patents and technology
relating to the several genes coded for the enzymes involved in the biosynthesis
of paclitaxel and other taxanes pursuant to a license agreement effective as of
July 8, 1996 between The Washington State University Research Foundation
("WSURF") and CPI, as amended and restated in its entirety as of June 3, 1998
(as so amended and restated, "WSURF/CPI LICENSE AGREEMENT").
C. BMS desires to obtain, and CPI desires to grant to BMS, a license
under each of the RDI/CPI License Agreement and the WSURF/CPI License Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the Parties contained in this Agreement, the Parties agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall those meanings set
forth in this Section 1 unless the context dictates otherwise.
1.1 "AFFILIATE", with respect to any Party, shall mean any Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Party. For these purposes, "control" shall refer to: (i) the
possession, directly or indirectly, of the power to direct the management or
policies of a Person or to veto any material decision relating to the management
or policies of a Person, in each case, whether through the ownership of equity
participation, voting securities or beneficial interests, by contract, by
agreement, or otherwise.
1.2 "APPLICABLE ROYALTY RATE" shall mean the percentage rate or rates at
which BMS shall pay royalties to CPI hereunder, determined on a calendar
year-by-calendar year basis, as follows:
(a) Subject to Clause (c) below, with respect to using the
RDI-Intellectual Property Rights to produce (i) paclitaxel to be
commercialized as TAXOL-Registered Trademark- or another compound (which is
not a Novel Taxane/BMS Compound) to be used by BMS, its Affiliates or its
Sublicensees in commercialization as such without further chemical
transformation into another compound, or (ii) baccatin III or a miscellaneous
taxane mixture as a starting material for paclitaxel or any other compound
(which is not a Novel Taxane/BMS Compound) ; or where the WSURF-Covered
Product in question is (A) paclitaxel to be commercialized as
TAXOL-Registered Trademark- or another compound (which is not a Novel
Taxane/BMS Compound), in each case as a Direct WSURF-Covered Product, or (B)
paclitaxel or any other compound (which is not a Novel Taxane/BMS Compound),
as an Indirect WSURF-Covered Product, made from baccatin III or a mixture of
miscellaneous taxanes produced by the WSURF Covered Cell Line in question:
Portion of Annual Net Sales "Pac/direct" "Bac" or "TT"
--------------------------- ------------ -------------
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
As used in the foregoing table, the terms ""Pac/direct", "Bac" and "TT" are
as defined in Section 5.2(b) below.
(b) Subject to Clause (c) below, with respect to (i) using the
RDI-Intellectual Property Rights to produce any compound that is a Novel
Taxane/BMS Compound or is produced using a Novel Taxane/BMS Compound As a
starting material or (ii) any RDI-Licensed Product that is a Novel Taxane/BMS
Compound or, as commercialized by BMS, its Affiliates or its Sublicensees, is
produced using a Novel Taxane/BMS Compound as a starting material and in
either case is produced otherwise than using the RDI-Intellectual Property
Rights; or where the WSURF-Covered Product in question is a Novel Taxane/BMS
Compound or is produced using a Novel Taxane/BMS Compound as a starting
material:
Portion of Annual Net Sales "Direct" "Indirect"
--------------------------- -------- ----------
[ ] [ ] [ ]
2
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
As used in the foregoing table:
"DIRECT" refers to where the RDI-Intellectual Property Rights are used
to produce the Novel Taxane/BMS Compound in question which is used by BMS,
its Affiliates or its Sublicensees in commercialization as such without
further chemical transformation into a different compound or where the
WSURF-Covered Product in question is a Direct WSURF-Covered Product.
"INDIRECT" refers to where (i) the RDI-Intellectual Property Rights
are used to produce (1) the Novel Taxane/BMS Compound in question which is
subsequently chemically transformed into the product commercialized by BMS,
its Affiliates or its Sublicensees or (2) a compound which is subsequently
chemically transformed into the product (being the Novel Taxane/BMS
Compound in question) commercialized by BMS, its Affiliates or its
Sublicensees or (ii) the CPI-Covered Product in question is a Novel
Taxane/BMS Compound or, as commercialized by BMS, its Affiliates or its
Sublicensees, is produced using a Novel Taxane/BMS Compound as a starting
material and in either case is produced otherwise than using the
RDI-Intellectual Property Rights; or where (A) the WSURF-Covered Product in
question is an Indirect WSURF-Covered Product or (B) the WSURF-Covered
Product, as commercialized by BMS, its Affiliates or its Sublicensees, is
produced otherwise than using a WSURF-Covered Cell Line.
(c) In the event that the WSURF-Technology is incorporated into a
cell line not covered by the RDI-Intellectual Property Rights which cell line is
in-licensed by BMS otherwise than pursuant to this Agreement and from a party
not an Affiliate of BMS (in which case a product produced by such cell line
would be a WSURF-Covered Product but not an RDI-Licensed Product), the
Applicable Royalty Rate for such WSURF-Covered Product shall be: (a) [ ] or
(b)[ ], whichever is higher, where
A = the Applicable Royalty Rate as otherwise determined in accordance with
Clause (a) or (b) above, as the case may be
B = the royalty rate at which BMS is required to pay royalties otherwise
than pursuant to this Agreement in respect of such WSURF-Covered
Product.
For the avoidance of doubt, there shall be no stacking of royalties that would
otherwise result from Clauses (a) and (b) above both applying to the same
product (in any such case, Clause (b) shall control and supersede Clause (a));
and, in each of the two tables above, the amounts under the heading ""Portion of
Annual Net Sales" refer to only the amounts of Net Sales of the
3
particular product in question (for example, only Net Sales of
TAXOL-Registered Trademark- containing paclitaxel made by BMS using the
RDI-Intellectual Property Rights (as a direct fermentation product) are used
to determine the Applicable Royalty Rate under the heading "Pac/Direct" in
Clause (a) above).
1.3 "CONFIDENTIAL INFORMATION" shall mean the collection of technical
information included in the Other Licensed Property or technical information of
BMS, all information required to be kept confidential by CPI pursuant to the
terms of the RDI/CPI License Agreement or the WSURF/CPI License Agreement, and
confidential non-public information concerning BMS's or CPI's business plans,
strategy and the like. All information which shall be disclosed in confidence by
the disclosing party to the receiving party, and which affords a competitive
advantage to the disclosing party or its Affiliates, shall be presumed to be
Confidential Information, even though limited portions of such technical
information may be in the public domain.
The following information shall be excluded from the definition of
Confidential Information: (a) information which the receiving party demonstrates
was in the receiving party's possession in written or other tangible form prior
to any disclosure; (b) information which the receiving party demonstrates was
received from a Third Party which Third Party did not obtain the same, directly
or indirectly, from the disclosing party; (c) information which is independently
discovered or invented by personnel of a party who do not have direct or
indirect access to the information provided to that party by the other party; or
(d) from the time it becomes so known, any information which the receiving party
demonstrates was in or subsequently enters the public domain.
1.4 "CPI-COVERED PRODUCTS" shall mean any product of BMS, its Affiliates
or its Sublicensee that constitutes an RDI-Licensed Product or a WSURF-Covered
Product, or both.
1.5 "DIRECT WSURF-COVERED PRODUCTS" shall have the same meaning as
ascribed to the term "Direct Covered Products" in the WSURF Sublicense
Agreement.
1.6 "EFFECTIVE DATE" shall mean the date first above written as the date
of this Agreement.
1.7 "FDA" shall mean the United States Food and Drug Administration, or
the successor thereto.
1.8 "FIRST COMMERCIAL SALE" shall mean, in each country in the Territory,
the date that a CPI-Covered Product is first sold, marketed or publicly made
available for sale. A CPI-Covered Product distributed or used for clinical
trials or experimental purposes only shall not be considered sold, marketed or
made publicly available and shall not establish the First Commercial Sale.
4
1.9 "IMPROVEMENTS" shall have the meaning set forth in Section 4.3(e).
1.10 "INDIRECT WSURF-COVERED PRODUCTS" shall have the same meaning as
ascribed to the term "Indirect Covered Products" in the WSURF Sublicense
Agreement.
1.11 "LICENSED CELL LINES" shall have the meaning set forth in Section
4.3(b).
1.12 "LICENSED CPI-TECHNOLOGY" shall have the meaning set forth in Section
4.3(d).
1.13 "LICENSED GENE MATERIALS" shall have the meaning set forth in Section
4.3(c).
1.14 "NET SALES" shall mean the gross revenues received by BMS, its
Affiliates or its Sublicensees for CPI-Covered Products sold less the sum of the
following deductions, where applicable: sales, use, tariff, import/export duties
or other excise taxes imposed on particular sales; allowances, credits,
chargebacks and refunds to non-affiliated third parties because of rejections,
returns or price reduction of product; freight costs and insurance charges on
shipments to customers included in invoiced amounts; and rebates and price
reductions/adjustments required by law, regulations or contract. In the case of
rebates and price reductions/adjustments required by contract, the same shall
not be deductible to the extent that the contract in question is between
Affiliates or related companies or the price concessions in question are given
in connection with the marketing/sales of other product or products such as in
the case of "bundling" of products.
1.15 "NEW CPI-TECHNOLOGY" shall mean, to the extent that they are not
already included under the RDI-Intellectual Property Rights, the
WSURF-Technology or the other Licensed Property, and regardless of whether or
not the same may be covered by any patent or patentable: (a) any process,
method or material relating to the production of paclitaxel or other taxanes,
including, without limitation, any plant cell line created by WSU; (b) any
theretofore unknown non-taxane compound having anticancer (therapeutic or
prophylactic) utility isolated from microbial fermentation as a natural
product; and (c) all knowhow, data and other enabling information relevant to
the process, method, material or non-taxane compound referred to in Clause
(a) or (b) above, in each case owned or controlled by CPI, now or in the
future.
1.16 "NOVEL BMS COMPOUND FROM COVERED CELL LINE" shall the meaning ascribed
to that term in the RDI-Sublicense Agreement.
1.17 "NOVEL BMS COMPOUND FROM FERMENTATION" shall have the meaning ascribed
to that term in the RDI-Sublicense Agreement.
1.18 "NOVEL TAXANE/BMS COMPOUND" shall mean, in singular form, a Novel
Taxane from Fermentation, Novel Taxane from Covered Cell Line, Novel BMS
Compound from Fermentation or Novel BMS Compound from Covered Cell Line and, in
plural form, any combination of Novel Taxanes from Fermentation, Novel Taxanes
from Covered Cell Line,
5
Novel BMS Compounds from Fermentation and/or Novel BMS Compounds from Covered
Cell Line, collectively.
1.19 "NOVEL TAXANE FROM COVERED CELL LINE" shall have the meaning ascribed
to that term in the RDI-Sublicense Agreement.
1.20 "NOVEL TAXANE FROM FERMENTATION" shall have the meaning ascribed to
that term in the RDI-Sublicense Agreement.
1.21 "OTHER LICENSED PROPERTY" shall mean, collectively, the Licensed Cell
Lines, the Licensed Gene Materials, the Novel Taxanes from Fermentation, the
Novel Taxanes from Covered Cell Line, the Licensed CPI-Technology and the
Improvements, together with all patent rights pertaining thereto, to the extent
that such patent rights are not already part of the RDI-Intellectual Property
Rights or the WSURF-Technology.
1.22 "PARTY" shall mean CPI or BMS and, when used in the plural, shall mean
CPI and BMS.
1.23 "PERSON" shall mean any natural person, corporation, firm, business
trust, joint venture, association, organization, company, partnership or other
business entity, or any government or any agency or political subdivision
thereof, or any organization which can exercise independent legal standing.
1.24 "RDI-INTELLECTUAL PROPERTY RIGHTS" shall have the same meaning as
ascribed to the term "Intellectual Property Rights" in the RDI-Sublicense
Agreement.
1.25 "RDI-LICENSED PRODUCTS" shall have the same meaning as ascribed to the
term "Licensed Products" in the RDI Sublicense Agreement.
1.26 "RDI-SUBLICENSE AGREEMENT" shall have the meaning set forth in Section
4.1.
1.27 "WSURF-COVERED CELL LINES" shall have the same meaning as ascribed to
the term "Covered Cell Lines" in the WSURF Sublicense Agreement.
1.28 "WSURF-COVERED PRODUCTS" shall have the same meaning as ascribed to
the term "Covered Products" in the WSURF Sublicense Agreement.
1.29 "WSURF-SUBLICENSE AGREEMENT" shall have the meaning set forth in
Section 4.2.
1.30 "WSURF-TECHNOLOGY" shall have the same meaning as ascribed to the term
"Technology" in the WSURF Sublicense Agreement.
6
1.31 "SUBLICENSEE" shall mean any non-Affiliate Third Party who is granted
sublicense rights by BMS pursuant to this Agreement, the RDI-Sublicense
Agreement or the WSURF-Sublicense Agreement.
1.32 "TERRITORY" shall mean the entire world.
1.33 "THIRD PARTY" shall mean any Person who or which is neither a Party
nor an Affiliate of a Party.
2. REPRESENTATIONS AND WARRANTIES.
2.1 REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES. Each Party represents
and warrants to the other Party that: (i) it is free to enter into this
Agreement; (ii) in so doing, it will not violate any other agreement to which
it is a party; (iii) it has taken all corporate action necessary to authorize
the execution and delivery of this Agreement and the performance of its
obligations under this Agreement; and (iv) no Person has or will have, as a
result of the transactions contemplated by this Agreement, any right,
interest or valid claim against or upon such Party for any commission, fee or
other compensation as a finder or broker because of any act or omission by
such Party or any of its agents.
2.2 REPRESENTATIONS AND WARRANTIES OF CPI. CPI he represents and warrants
to BMS that:
(a) Each of the RDI/CPI License Agreement and the WSURF/CPI License
Agreement is in full force and effect; CPI has complied with all provisions of
each such agreement; there does not exist any event of default with respect to
CPI under any said agreement which, after notice or lapse of time or both, would
constitute an event of default with respect to CPI under said agreement; and CPI
has no knowledge of any breach or anticipated breach by any other party to any
said agreement;
(b) CPI has all consents necessary to grant the rights and licenses
granted to BMS under this Agreement;
(c) Without having conducted any investigation, to the best of CPI's
knowledge, all of the patents constituting part of the RDI-Intellectual Property
Rights or the WSURF-Technology in existence on the Effective Date are valid and
enforceable and have been maintained to date; and
(d) CPI has not entered into any agreement with any Third Party which
is in conflict with the rights granted to BMS pursuant to this Agreement.
3. PRODUCT DEVELOPMENT.
7
3.1 DEVELOPMENT BY BMS.
(a) BMS shall use commercially reasonable efforts to develop, and
where appropriate to obtain legal and regulatory approval for, the RDI-
Intellectual Property Rights, the WSURF-Technology and the Other Licensed
Property with a view to using the same, either alone or in combination with each
other or with other technologies, for the commercial production of taxanes and
other compounds, as applicable, to be used as the active ingredients in BMS's
products.
(b) BMS shall use commercially reasonable efforts to market and sell
each CPI-Covered Product in each country in the Territory as soon as practicable
following receipt of all governmental approvals in such country necessary
therefor.
3.2 SPONSORED RESEARCH AND DEVELOPMENT.
(a) BMS agrees to provide funding to CPI in the amount of [ ], at
the rate of [ ] per each 12-month period, to enable CPI to continue research
and development. To that end, the Parties have concurrently with the execution
of this Agreement, entered into a sponsored research agreement (the "Research
Agreement") containing a mutually agreed outline of research description and
resource allocation. A portion of the sponsored research and development
activities may be undertaken by, and accordingly a portion of the BMS funding
may be paid over by CPI to, MSU and/or WSU.
(b) BMS's funding of CPI's research and development activities will
be subject to extension beyond the initial [ ] 12-month periods as and if
mutually agreed by the Parties.
(c) BMS's funding commitment under this Section 3.2 shall survive any
termination of this Agreement pursuant to Section 12.3, unless such termination
occurred by reason of failure by CPI to comply with any of the material
obligations on its part contained in this Agreement.
4. GRANT OF RIGHTS.
4.1 GRANT OF SUBLICENSE UNDER RDI/CPI LICENSE AGREEMENT. Subject to
Section 4.5 below, CPI grants to BMS an exclusive sublicense, under the RDI/CPI
License Agreement, pursuant to the terms and conditions set forth in the
Sublicense Agreement by and between BMS and CPI, dated as of May 27, 1998 (the
"RDI-SUBLICENSE AGREEMENT").
4.2 GRANT OF SUBLICENSE UNDER WSURF/CPI LICENSE AGREEMENT. Subject to
Section 4.5 below, CPI grants to BMS an exclusive sublicense, under the
WSURF/CPI License
8
Agreement, pursuant to the terms and conditions set forth in the Sublicense
Agreement by and between BMS and CPI, dated as of May 19, 1998 (the
"WSURF-SUBLICENSE AGREEMENT").
4.3 OTHER LICENSED PROPERTY.
(a) Subject to Section 4.5 below, CPI hereby grants to BMS an
exclusive, worldwide license, under the Other Licensed Property to make, have
made, use and sell CPI-Covered Products and otherwise to use the Other Licensed
Property to make, have made, use and sell human and animal health care products.
(b) For purposes of this Agreement, "LICENSED CELL LINES" means,
collectively, the cells lines listed on SCHEDULE 4.3(b) hereto and all other
paclitaxel and other taxane-producing microbial cell lines in CPI's possession
now or in the future. CPI shall from time to time promptly provide BMS with
suspension (or another form, if appropriate) culture samples of any Licensed
Cell Line or Improvement thereto that is then in its possession, or use its best
efforts to obtain such samples from RDI and Montana State University ("MSU"), in
each case as BMS shall reasonably request.
(c) For purposes of this Agreement, "LICENSED GENE MATERIALS" means,
collectively, the structural genes, genetic sequences, promoters, enhancers,
probes, linkage probes, vectors, plasmids, transformed cell lines, proteins,
biological modifiers, antigens and antibodies relating to the enzymes listed on
SCHEDULE 4.3(c) hereto and all other such types of materials relating to the
biosynthesis of paclitaxel and other taxanes, including those relating to other
enzymes, in CPI's possession now or in the future. CPI shall from time to time
promptly provide BMS with samples, in an appropriate form, of any Licensed Gene
Material or Improvement thereto that is then in its possession, or use its best
efforts to obtain such samples from WSURF and Washington State University
("WSU"), in each case as BMS shall reasonably request.
(d) For purposes of this Agreement, "LICENSED CPI-TECHNOLOGY" means,
collectively, regardless of whether or not the same may be covered by any patent
or patentable, (i) the process and method of using microbial fermentation,
including the use of any Licensed Cell Line, including any WSURF-Covered Cell
Line or any other cell line constituting an Improvement, to produce paclitaxel
or any other taxane (including the use thereof as an intermediate or precursor
for the production of other chemical entities); (ii) the process and method of
using any Licensed Gene Material or any other genetic material constituting an
Improvement to produce a WSURF-Covered Cell Line; and (iii) all such know-how,
data and other enabling information in CPI's possession now or in the future as
are relevant to such processes and methods or otherwise relevant to BMS's
development and use of microbial fermentation for the production of paclitaxel
or other taxanes, including the use of any Licensed Cell Line or WSURF-COVERED
Cell Line, as contemplated hereby, including, without limitation, those
pertaining to cell preservation, stability, propagation, production media and
genetic engineering to create WSURF-Covered Cell Lines and other conditions, use
of growth
9
regulators and promoters and technology for the enhancement of paclitaxel or
other taxane production. CPI shall promptly transfer to BMS all know-how,
data and enabling information includable under the Licensed CPI-Technology or
any Improvement thereto and use its best efforts to obtain the same from RDI
and MSU or WSURF and WSU, as the case may be, in each case as BMS shall
reasonably request.
(e) For purposes of this Agreement, "IMPROVEMENTS" means,
collectively, regardless of whether the same may be covered by any patent or
patentable, (A) with respect to any Licensed Cell Line or WSURF-Covered Cell
Line: (i) all improved, enhanced or otherwise modified forms of, and other
improvements to, such Licensed Cell Line by whatsoever means accomplished
(including by way of artificial genetic manipulation, natural genetic mutation
and alternative cell screening and selection method); (ii) all progeny and
derivatives of such Licensed Cell Line or WSURF-Covered Cell Line; and (iii) all
DNA sequences derived from such Licensed Cell Line, WSURF-Covered Cell Line or
any of the items referred to in clause (i) or (ii) above; (B) with respect to
any Licensed Gene Material: (i) all improved, enhanced or otherwise modified
forms of, and other improvements to, such Licensed Gene Material by whatsoever
means accomplished (including by way of artificial enzymatic or chemical
manipulation, natural genetic mutation and alternative cell screening and
selection method); and (ii) all progeny and derivatives of such Licensed Gene
Material; and (C) with respect to the Licensed CPI-Technology, all improvements,
enhancements and other modifications to the know-how, data and other enabling
information constituting Licensed CPI-Technology, in each case (A), (B) and (C)
as the same may hereafter be developed or otherwise become owned or controlled
by CPI. For the purpose of effectuating BMS's right to any Improvement, CPI
shall from time to time, promptly upon its knowing the same, notify BMS of any
fact or circumstance that may tend to suggest the existence of any Improvement.
(f) For purposes of ensuring the transfer of the Other Licensed
Property to BMS and assisting BMS in its development and application of the
Other Licensed Property, CPI-shall, upon reasonable request of BMS, make
available its technical personnel for consultation and other technical
assistance and shall use its best efforts to cause RDI and MSU or WSURF and WSU,
as the case may be, to provide like consultation and assistance. BMS shall
reimburse CPI's, together with such other parties' reasonable out-of-pocket
expenses in connection with such consultation and assistance.
4.4 SUBLICENSE RIGHTS.
(a) BMS shall have the right to grant sublicenses to its Affiliates,
provided that BMS shall guarantee and be responsible for the making of all
payments due, and the making of reports under this Agreement, by reason of sales
of any CPI-Covered Products by its Affiliates and their compliance with all
applicable terms of this Agreement.
(b) BMS shall have the right to grant sublicenses to Sublicensees,
provided that BMS shall guarantee and be responsible for the making of all
payments due, and the making
10
of reports under this Agreement, by reason of sales of any CPI-Covered
Products by its Sublicensees and their compliance with all applicable terms
of this Agreement.
4.5 RESERVATION OF RIGHTS BY CPI. CPI may continue to pursue research and
development, either on its own or in collaboration with BMS, MSU and/or WSU, but
not with any other Third Party, in the field of microbial fermentation
production of paclitaxel and other taxanes. More specifically, CPI shall retain
the right to use the Other Licensed Property to make paclitaxel and other
taxanes solely in pursuit of further research and development with respect to
the Other Licensed Property and otherwise for non-commercial internal research
and development purposes. CPI shall not be entitled to, and shall not, assign or
sublicense such right to any Third Party. For the avoidance of doubt, CPI shall
not be entitled to, and shall not, transfer any WSURF-Covered Cell Line,
Licensed Cell Line or cell line constituting Improvement to any Third Party, nor
shall CPI use the same, or any part of the RDI-Intellectual Property Rights, the
WSURF-Technology or the Other Licensed Property, for the benefit of any Third
Party; and CPI retains all rights to its technologies and intellectual property
rights that are not covered by this Agreement.
5. UP-FRONT; MILESTONE AND ROYALTY PAYMENTS.
5.1 UP-FRONT FEE. As consideration to CPI for the grant of the sublicenses
to BMS pursuant to the RDI-Sublicense Agreement and the WSURF-Sublicense
Agreement and the license hereunder to the Other Licensed Property, BMS shall
pay to CPI the sum of [ ], reduced by the sum of the up-front fees being
made by BMS to CPI pursuant to Article III.A(1) of the RDI-Sublicense Agreement
and Paragraph 3.1(a) of the WSURF Sublicense Agreement. Such up-front fee shall
be paid within ten (10) business days of the execution of this Agreement by both
Parties. Such sum shall be non-refundable.
5.2 MILESTONE PAYMENTS. As consideration to CPI for the sublicenses to BMS
pursuant to the RDI-Sublicense Agreement and the WSURF-Sublicense Agreement and
the license hereunder to the Other Licensed Property, BMS shall pay to CPI the
following milestone payments upon the occurrence of each event set forth below:
(a) [ ] upon BMS's attainment, using a fungal strain furnished by
CPI, of production level of not less than [ ] of paclitaxel, reduced by the
sum of the corresponding payment being made by BMS to CPI pursuant to Article
III.A(2) of the RDI Sublicense Agreement;
(b) the following amount or amounts, as applicable, depending on the
attainable productivity and the actual primary products being pursued by BMS, in
each case reduced by the sum of the corresponding payments being made by BMS to
CPI pursuant to Article III.A(3) of the RDI-Sublicense Agreement and Paragraph
3.1(b) of the WSURF-Sublicense Agreement:
11
Productivity in mg/1
-------------------------------------
Milestone Payment "Pac/Direct" "Bac" "TT"
----------------- ------------ ----- ----
[ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ]
As used in the foregoing table:
Productivity refers to commercially feasible production, using the
RDI-Intellectual Property Rights, or using a WSURF-Covered Cell Line, of
the product or products in question, of (i) the Direct WSURF-Covered
Product in question or (ii) the compound or compounds which are
subsequently converted into the Indirect WSURF-Covered Product in question,
in each case with fermentation time per production cycle of not more than
[ ].
"PAC/DIRECT" refers to where the primary fermentation product is
paclitaxel or another product which is used by BMS in commercialization as
such without further chemical transformation into a different compound or
the primary product produced by the WSURF-Covered Cell Line in question is
a Direct WSURF-Covered Product.
"BAC" refers to where the primary fermentation product is baccatin III
used by BMS, its Affiliates or its Sublicensees as a starting material for
the final commercial product or the primary product produced by the
WSURF-Covered Cell Line in question is baccatin III used by BMS, its
Affiliates or its Sublicensees as a starting material for the Indirect
WSURF-Covered Product in question.
"TT" refers to where the primary fermentation product from using the
RDI-Intellectual Property Rights is a mixture of miscellaneous taxanes used
by BMS, its Affiliates or its Sublicensees as starting materials for the
final commercial product or the primary product produced by the
WSURF-Covered Cell Line in question is the mixture of miscellaneous taxanes
used by BMS, its Affiliates or its Sublicensees as starting materials for
the Indirect WSURF-Covered Product in question.
For the avoidance of doubt: (1) it shall not be implied that BMS is required, or
otherwise intends, to pursue more than one of the "Pac/direct," "Bac" and "TT"
alternatives; however, the milestone payments in respect of the two different
levels of productivity, if attained, are cumulative); (2) each milestone payment
shall be payable only once regardless of the number of times the same
development milestone has been achieved using different cell lines; and (3)
should BMS in fact be pursuing different primary products using a single cell
line, the different milestone payments pertaining to each such different primary
product shall become applicable.
12
(c) [ ] (in each case reduced by the sum of the corresponding
payments being made by BMS to CPI pursuant to Article III.A(4) of the
RDI-Sublicense Agreement and Paragraph 3.1(c) of the WSURF-Sublicense
Agreement) upon the FDA's approval of a Supplemental New Drug Application
(hereinafter called "SNDA") for using, or in the case of a product other than
TAXOL-Registered Trademark- (which product is not a Novel Taxane/BMS
Compound) a New Drug Application (including an Abbreviated New Drug
Application, hereinafter called "NDA") that embodies the use of, (i) the
RDI-INTELLECTUAL Property Rights for the commercial production of paclitaxel
as the active ingredient in BMS's product TAXOL-Registered Trademark- or such
other product or (ii) the use of, a WSURF-Covered Cell Line for the
commercial production of paclitaxel as the active ingredient in BMS's product
TAXOL-Registered Trademark- or such other product, in each case as a Direct
WSURF-Covered Product;
(d) [ ] (in each case reduced by the sum of the corresponding
payments being made by BMS to CPI pursuant to Article III.A(5) of the
RDI-Sublicense Agreement and Paragraph 3.1(d) of the WSURF-Sublicense
Agreement) upon the FDA's approval of an SNDA for using, or in the case of a
product other than TAXOL-Registered Trademark- (which product is not a Novel
Taxane/BMS Compound) an NDA that embodies the use of, (i) the RDI-
Intellectual Property Rights for commercial production of baccatin III to
serve as a starting material for TAXOL-Registered Trademark- or such other
product, as the case may be, or (ii) a WSURF-Covered Cell Line for the
commercial production of baccatin III to serve as a starting material for
TAXOL-Registered Trademark- or such other product, as the case may be, as an
Indirect WSURF-Covered Product;
Clause (c) above and this Clause (d), together, shall not imply that
BMS is required, or otherwise intends, to pursue both alternatives.
(e) [ ] (in each case reduced by the sum of the corresponding
payments being made by BMS to CPI pursuant to Article III.A(5) of the
RDI-Sublicense Agreement and Paragraph 3.1(d) of the WSURF-Sublicense
Agreement) upon the FDA's approval of an Investigational New Drug Application
covering a Novel Taxane/BMS Compound; and
(f) [ ] (in each case reduced by the sum of the corresponding
payments being made by BMS to CPI pursuant to Article III.A(6) of the
RDI-Sublicense Agreement and Paragraph 3.1(e) of the WSURF-Sublicense
Agreement) upon the FDA's approval of a NDA covering a Novel Taxane/BMS
Compound.
Each of the payments required pursuant to this Section 5.2 shall be
paid within 30 days after such milestone has been achieved, and shall be
non-refundable.
5.3 EARNED ROYALTY PAYMENTS. As consideration to CPI for the
sublicenses to BMS pursuant to the RDI-Sublicense Agreement and the
WSURF-Sublicense Agreement and the license hereunder to the Other Licensed
Property, during the term of this Agreement, BMS shall pay to CPI a royalty
on Net Sales of any CPI-Covered Product commencing on the First Commercial
Sale of such CPI-Covered Product by BMS, its Affiliates or its Sublicensees
at the
13
Applicable Royalty Rate, reduced by the sum of the corresponding payments
being made by BMS to CPI pursuant to Article III.C of the RDI-Sublicense
Agreement and Paragraph 3.1(g) of the WSURF-Sublicense Agreement.
5.4 MINIMUM ROYALTIES. In consideration of the maintenance of the
sublicenses to BMS pursuant to the RDI-Sublicense Agreement and the
WSURF-Sublicense Agreement and the license hereunder to the other Licensed
Property, from and after BMS attains a commercially feasible production level
of at least [ ] of paclitaxel using the RDI-Intellectual Property Rights
and/or a WSURF-Covered Cell Line, BMS shall pay CPI a minimum royalty of
[ ] (reduced by the corresponding payments being made by BMS to CPI
pursuant to Article III.B of the RDI-Sublicense Agreement) per each
consecutive 12-month period, which shall be payable within 30 days of the
initial attainment of such production level and subsequently within 30 days
of each anniversary of such attainment. The minimum royalties paid under this
Section 5.4 shall not be refundable, but shall be fully creditable towards
current and future earned royalties under Section 5.3 above.
5.5 SHARING OF FEES FROM SUBLICENSEES. BMS shall promptly pay over to CPI
[ ] of whatever license fee or milestone payments that it receives from any
Sublicensee on account of its sublicensing of the RDI-Intellectual Property
Rights, the WSURF-Technology or both.
5.6 NO STACKING. The obligation to pay royalties to CPI under this
Section 5 is imposed only once with respect to the same unit of CPI-Covered
Product regardless of the extent to which the RDI-Intellectual Property
Rights, the WSURF-Technology and/or the Other Licensed Property cover the
product in question.
5.7 AMOUNTS PAID TO PRIMARY LICENSORS. This Agreement provides that
each up-front, milestone or royalty payment due CPI hereunder shall be net of
the amounts of the corresponding payments to CPI pursuant to the
RDI-Sublicense Agreement and the WSURF-Sublicense Agreement. Such crediting
of the amount paid under either the RDI-Sublicense Agreement or the
WSURF-Sublicense Agreement against the amount of the corresponding payment
under this Agreement shall continue to be in effect even if at that time the
RDI-Sublicense Agreement has been assumed by RDI in place of CPI or the
WSURF-Sublicense Agreement has been assumed by WSURF in place of CPI, as the
case may be.
6. PAYMENTS AND REPORTS.
6.1 REPORTS; PAYMENTS. Except as otherwise specifically provided in
this Agreement, all payments due under this Agreement shall be paid quarterly
within 50 days after the end of each calendar quarter. Each such payment for
earned royalties shall be accompanied by a statement, CPI-Covered
Product-by-CPI-Covered Product and country-by-country, of the amount of Net
Sales during such quarter and the amount of royalties due on such Net Sales.
14
6.2 MODE OF PAYMENT. All payments due under this Agreement shall be
paid by wire transfer of funds to an account at CPI's designated bank in the
United States, and shall be paid in U.S. Dollars, calculated at BMS's
customary internal corporate monthly exchange rates for the last month of the
calendar quarter for which remittance is made for royalties. For each month
and each currency, BMS's customary internal corporate monthly exchange rate
shall equal the arithmetic average of the daily exchange rates (obtained as
described below) during the period from (i) the 20th day of the preceding
month (or, if such 20th day is not a business day, the immediately preceding
business day) through (ii) the 19th day of the current month (or, if such
19th day is not a business day, the immediately preceding business day); each
daily exchange rate shall be obtained from the Reuters Daily Rate Report or
The Wall Street Journal, Eastern U.S. Edition, or, if not so available, as
furnished by BMS's local Affiliates.
6.3 WITHHOLDING TAX. Any and all withholding taxes or similar charges
imposed by any government on amounts due from BMS, its Affiliates or its
Sublicensees will be deducted from the amounts due CPI, will be paid by the
payer to the proper taxing authority, and proof of payment of said tax will
be secured and sent to CPI as evidence of such payment.
6.4 RECORDS RETENTION. BMS and its Affiliates and Sublicensees shall
keep accurate records of all operations affecting payments hereunder, and
shall permit CPI or its duly authorized agent to inspect all such records and
to make copies of or extracts from such records during regular business hours
throughout the term of this Agreement and for a reasonable period of not less
than 3 years thereafter.
6.5 AUDIT REQUEST. At the request and expense of CPI, BMS and its
Affiliates and Sublicensees-shall permit an independent, certified public
accounting firm appointed by CPI and reasonably acceptable to BMS, at
reasonable times and upon reasonable notice, to examine those records as may
be necessary to: (i) determine the correctness of any report or payment made
under this Agreement; or (ii) obtain all information as to Net Sales and the
royalties payable for any calendar quarter. Such accounting firm shall not
disclose to CPI any information other than information relating to said
reports, royalties and payments. Results of any such examination shall be
made available to both Parties.
6.6 COST OF AUDIT. CPI shall bear the full cost of the performance of
any such audit except as hereinafter set forth. If, as a result of any
inspection of the books and records of BMS, its Affiliates or its
Sublicensees, it is shown that BMS's payments under this Agreement were less
than the amount which should have been paid, then BMS shall make all payments
required to be made to eliminate any discrepancy revealed by said inspection
within 30 days after CPI's demand therefor. Furthermore, if the payments were
less than the amount which should have been paid by an amount in excess of
five percent of the payments actually made during the period in question, BMS
shall also reimburse CPI for the costs of such audit in addition to the
payment required to be made to eliminate any discrepancy.
7. INDEMNIFICATION.
15
7.1 INDEMNIFICATION.
(a) CPI shall defend, indemnify and hold BMS and its Affiliates
and Sublicensees, and each of their respective directors, officers and
employees, harmless from and against any and all claims, suits or demands for
liability, damages, losses, costs and expenses (including the costs and
expenses of attorneys and other professionals) arising out of Third Party
claims or suits resulting from a breach of CPI's representations and
warranties set forth in Section 2.
(b) BMS shall defend, indemnify and hold CPI, its Affiliates, and
their respective directors, officers and employees, harmless from and against
any and all claims, suits or demands for liability, damages, losses, costs
and expenses (including the costs and expenses of attorneys and other
professionals) arising out of: (i) Third Party claims or suits resulting from
(1) a breach of BMS's representations and warranties set forth in Section 2,
(2) the manufacture, packaging, use, sale, rental or lease of CPI-Covered
Products or (3) the use of the RDI-Intellectual Property Rights, the
WSURF-Technology or the Other Licensed Property by BMS, its Affiliates or its
Sublicensees.
7.2 CONDITIONS TO INDEMNIFICATION. A person or entity that intends to
claim indemnification under Section 7.1 (the "Indemnitee") shall promptly
notify the other Party (the "Indemnitor") of any loss, claim, damage,
liability or action in respect of which the Indemnitee intends to claim such
indemnification, and the Indemnitor shall assume the defense thereof with
counsel mutually satisfactory to the Indemnitee whether or not such claim is
rightfully brought; provided, however, that an Indemnitee shall have the
right to retain its own counsel, with the fees and expenses to be paid by the
Indemnitor if Indemnitor does not assume the defense, or if representation of
such Indemnitee by the counsel retained by the Indemnitor would be
inappropriate due to actual or potential differing interests between such
Indemnitee and any other person represented by such counsel in such
proceedings. The indemnity agreement in Section 7.1 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which
consent shall not be withheld or delayed unreasonably. The failure to deliver
notice to the Indemnitor within a reasonable time after the commencement of
any such action, only if prejudicial to its ability to defend such action,
shall relieve such Indemnitor of any liability to the Indemnitee under
Section 7.1, but the omission so to deliver notice to the Indemnitor will not
relieve it of any liability that it may have to any Indemnitee otherwise than
under Section 7.1. The Indemnitee under Section 7.1, its officers, directors,
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigations of any action, claim or liability
covered by this indemnification.
8. PATENT PROSECUTION AND MAINTENANCE.
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8.1 CERTAIN PATENTABLE INVENTIONS. CPI shall promptly inform BMS of any
patentable invention discovered, conceived or reduced to practice by CPI that
may constitute a part of the Other Licensed Property. CPI shall diligently
prosecute and maintain all patent applications (including, without
limitation, such patent applications in such countries as BMS may request)
and patents. CPI shall provide BMS with copies of all relevant documentation
so that BMS will be given an opportunity in advance to provide reasonable
comments thereon and may otherwise be informed and apprised of the
prosecution. BMS agrees to keep such documentation confidential. BMS shall
promptly upon CPI's presentment of invoice reimburse CPI for all related
costs of patent preparation, filing and maintenance incurred by CPI from and
after the date hereof with respect to the Other Licensed Property.
8.2 TRADE SECRET PROTECTION. Recognizing that proprietary rights and
interests in certain aspects of the technology in the field may be better
protected by way of trade secrets or other legal doctrines rather than by
patents, the Parties agree to consult with each other, on a case-by-case
basis, with a view to arriving at a consensus as to whether to file, or to
withdraw after filing, a patent application.
8.3 PATENT EXTENSION. Either Party shall be entitled to apply for an
extension of the term of any patent included within the Other Licensed
Property if appropriate under any applicable law in any jurisdiction. If a
Party decides to apply for said extension, it shall notify the other Party,
who shall cooperate by supplying all documents in its possession and signing
all papers which may be necessary to apply for said extension. The Party
applying for said extension shall not be liable to the other Party for any
failure to obtain said extension.
9. PATENT ENFORCEMENT.
9.1 OTHER LICENSED PROPERTY. For the avoidance of doubt, the provisions
of this Section 9 govern with respect to any matter only to the extent that
such matter is not governed by Article IX of the RDI-Sublicense Agreement or
Article VII of the WSURF-Sublicense Agreement.
9.2 THIRD PARTY INFRINGEMENT.
(a) In the event of any infringement by a Third Party of any
aspect of the Other Licensed Property, BMS shall have the first right (but
not the obligation) to pursue any and all injunctive, compensatory and other
remedies and reliefs (collectively, "REMEDIES") against such Third Party.
Should BMS determine not to pursue Remedies within 180 days after written
notice from CPI requesting BMS to do so, then CPI shall have the right (but
not the obligation) to pursue Remedies against such Third Party.
(b) The Party pursuing Remedies shall bear its own costs and
expenses and shall be entitled to retain all damages and other recoveries or
awards. Such Party shall be entitled from any damages, awards or other
recovery to cover its costs and expenses; any remaining
17
balance shall be used to cover the costs and expenses, if any, of the other
Party and then shared 75% to the Party pursuing Remedies and 25% to the other
Party.
(c) Each Party agrees to cooperate, at its own costs and expense,
with the other in the latter's pursuit of Remedies. Any pursuit of Remedies
will be controlled by the Party initiating the pursuit.
10. CERTAIN RIGHT TO NEW CPI-TECHNOLOGY.
10.1 RIGHT OF FIRST NEGOTIATION.
(a) BMS shall have a right of first negotiation, during the term
of this Agreement, to obtain from CPI an exclusive, worldwide,
royalty-bearing license or sublicense, as applicable (with the right to grant
sublicenses) to all or a part of any New CPI-Technology. Accordingly, CPI
shall not license or sublicense any part of any New CPI-Technology without
first complying with the provisions of Clauses (b) and (c) below.
(b) A ninety (90) day negotiation period (the "Negotiation
Period") shall commence upon CPI, reasonably believing that sufficient data
exist for evaluating the New Technology in question, giving written notice to
BMS to the effect of its intention to out-license such New CPI-Technology. If
BMS exercises its right of first negotiation within thirty (30) days of
receipt of such notice, the Parties shall promptly commence, and continue,
negotiation in good faith with a view to entering into an agreement
containing customary, commercially reasonable terms and conditions in
implementation of an appropriate license, which terms and conditions may
include those relating to product development plans and commitments. If BMS
does not exercise its right of first negotiation within such thirty-day
period by giving written notice to CPI, it shall have no further right under
this Section 10.1 with respect to the New CPI-Technology in question.
(c) In the event that the Parties fail to reach an agreement
within the Negotiation Period, then (and only then) may CPI offer the New
CPI-Technology in question to a Third Party, provided that, within the next
eighteen (18) months, CPI may not conclude any transaction with any Third
Party on terms less advantageous to CPI than those last offered to BMS
without first offering such less advantageous terms to BMS. ANY OFFER SO MADE
TO BMS SHALL BE SUFFICIENT IF IT DISCLOSES IN SUMMARY FASHION: (i) THE RIGHTS
OF INTERESTS INVOLVED; (ii) THE DEGREE, IF ANY, TO WHICH THE LICENSE OR
SUBLICENSE, AS THE CASE MAY BE, IS EXCLUSIVE; (iii) THE ROYALTIES OR OTHER
CONSIDERATION TO BE PAID TO CPI; (iv) THE TERRITORIES COVERED; (v) THE TERMS
OF ANY IMPROVEMENTS LICENSE OR IMPROVEMENTS BACKLICENSE; AND (v) THE TERM OF
THE LICENSE OR SUBLICENSE, AS THE CASE MAY BE. BMS SHALL HAVE 45 DAYS FROM
ITS RECEIPT THEREOF TO DETERMINE WHETHER IT WISHES TO ACCEPT SUCH OFFER.
11. CONFIDENTIALITY AND NON-USE.
18
11.1 NOTIFICATION. The Parties recognize the importance of the
protection of inventions, discoveries and other developments by patent or
under the doctrine of trade secrets. Consequently, any proposed publication
by either Party of the same shall be subject to the provisions of this
Section 11. At least 60 days before a manuscript is to be submitted to a
publisher, the publishing Party will provide the other Party with a copy of
the manuscript. If the publishing Party wishes to make an oral presentation,
it will provide the other Party with a copy of the abstract (if one is
submitted) or otherwise a summary of the contents of the proposed publication
at least 40 days before it is to be submitted. The publishing Party will also
provide to the other Party a copy of the text of the presentation, including
all slides, posters, and any other visual aids, at least 40 days before the
presentation is made.
11.2 REVIEW OF PROPOSED PUBLICATIONS. The receiving Party will review
the manuscript, abstract, summary, text or any other material provided under
Section 11.1 to determine if patentable subject matter is disclosed or if the
publication would jeopardize any desirable trade secret claim. The reviewing
Party will notify the publishing Party within 30 days of receipt of the
proposed publication if the reviewing Party, in good faith, determines that
patentable subject matter is or may be disclosed or trade secret protection
may be at stake, or if the reviewing Party, in good faith, believes
Confidential Information or proprietary information is or may be disclosed.
If it is determined by the reviewing Party that patent applications should be
filed, the publishing Party shall delay its publication or presentation for a
period not to exceed 90 days from the reviewing Party's receipt of the
proposed publication to allow time for the filing of patent applications
covering patentable subject matter. In the event that the delay needed to
complete the filing of any necessary patent application will exceed the 90
day period, the Parties will discuss the need for obtaining an extension of
the publication delay beyond the 90 day period. If it is determined that
trade secret protection is at stake, the publishing party shall eliminate
from publication such materials as are reasonable to preserve trade secret
protection. If it is determined in good faith by the reviewing Party that
Confidential Information or proprietary information is being disclosed, the
Parties will consult in good faith to arrive at an agreement on mutually
acceptable modifications to the proposed publication to avoid such disclosure.
11.3 CONFIDENTIALITY AND NON-USE; EXCEPTIONS. Except to the extent
expressly authorized by this Agreement or otherwise agreed in writing, the
Parties agree that, for the term of this Agreement and for five (5) years
thereafter the receiving Party and its Affiliates and Sublicensees shall
keep, and shall ensure that its officers, directors, employees and agents
keep, completely confidential and shall not publish or otherwise disclose and
shall not use for any purpose any Confidential Information furnished to it by
the other Party or its Affiliates or Sublicensees or developed under this
Agreement.
11.4 AUTHORIZED DISCLOSURE. Each Party may disclose the other's data and
information, including Confidential Information, to its Affiliates, licensors
and Sublicensees, and its and their officers, directors, employees and
outside consultants, as reasonably necessary, and to others to the extent
such disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable
governmental laws and
19
regulations, undertaking basic research with outside collaborators,
conducting preclinical or clinical trials or pursuing product registrations
provided that if a Party is required to make any such disclosure of the other
Party's Confidential Information it will, except where impracticable for
necessary disclosures, for example to physicians conducting studies or to
health authorities, give reasonable advance notice to the other Party of such
disclosure requirement and, except to the extent inappropriate in the case of
patent applications, will use all reasonable efforts to secure confidential
treatment of such information required to be disclosed.
12. TERM; TERMINATION.
12.1 TERM. This Agreement shall commence as of the Effective Date and,
unless sooner terminated as provided hereunder, shall expire, as to each
CPI-Covered Product in each country in the Territory, upon the later to occur
of: (a) 10 years from the First Commercial Sale of such CPI-Covered Product
in such country; or (b) such time as neither the making, use nor sale at the
time by BMS, its Affiliates or Sublicensees in such country of such
CPI-Covered Product, without giving effect to the sublicenses pursuant to the
RDI-Sublicense Agreement and the WSURF-Sublicense Agreement and the license
hereunder to the Other Licensed Property, would infringe any patent included
in the RDI-Intellectual Property Rights, the WSURF-Technology or the Other
Licensed Property, it being understood that the term "patent" shall include
any patent that may issue upon any pending patent application being
prosecuted diligently by or on behalf of RDI, WSURF or CPI, as the case may
be. Following such expiration, on a country-by-country basis, BMS shall
retain a paid-up, non-exclusive licenses as otherwise provided in Sections
4.1., 4.2 and 4.3. This Agreement shall expire in its entirety upon its
expiration with respect to all CPI-Covered Products in all countries in the
Territory as provided in the foregoing.
12.2 BREACH. Failure by BMS to comply with any of the material
obligations on its part contained in this Agreement shall entitle CPI to give
notice to BMS specifying the nature of the default and requiring it to cure
such default. If such default is not cured within 60 days after the receipt
of such notice (or, if such default cannot be cured within such 60 day
period, if BMS does not commence and diligently continue actions to cure such
default), CPI shall be entitled, without prejudice to any of its other rights
conferred on it by this Agreement, in addition to any other remedies
available to it by law or in equity, to terminate this-Agreement by giving
written notice to take effect immediately. The right to terminate this
Agreement, as hereinabove provided, shall not be affected in any way by CPI's
waiver or failure to take action with respect to any previous default.
12.3 TERMINATION BY BMS.
(a) BMS shall be entitled at any time, other than during the first
six months following the date hereof, to terminate this Agreement in
whole by giving notice in writing to CPI. Such termination shall be effective
90 days from the date of such notice. Upon such termination, each of the
RDI-Sublicense Agreement and the WSURF-Sublicense Agreement
20
shall forthwith terminate, regardless of whether BMS has invoked its right to
terminate such agreements pursuant to Article VI.A of the RDI-Sublicense
Agreement and Paragraph 12.3 of the WSURF-Sublicense Agreement, respectively.
(b) In the event that BMS terminates both the RDI-Sublicense
Agreement and the WSURF-Sublicense Agreement pursuant to Article VI.A of the
RDI-Sublicense Agreement and Paragraph 12.3 of the WSURF-Sublicense
Agreement, this Agreement shall forthwith terminate, regardless of whether
BMS has invoked its right to terminate this Agreement pursuant to this
Section 12.3.
12.4 EFFECT OF TERMINATION.
(a) Termination, relinquishment or expiration of this Agreement
for any reason shall be without prejudice to any rights which shall have
accrued to the benefit of either Party prior to such termination,
relinquishment or expiration, including, without limitation, BMS's continued
obligation to make royalty payments, license fee payments and reports, if
any, as provided in Sections 5 and 6 above. Such termination, relinquishment
or expiration shall not relieve either Party from obligations which are
expressly indicated to survive termination or expiration of this Agreement.
(b) All of the Parties' rights and obligations under Sections 3.2,
7 and 11 shall survive termination or expiration.
12.5 RIGHT TO SELL STOCK ON HAND. If BMS is not in material breach of
this Agreement at the time of termination of this Agreement, then BMS, its
Affiliates and its Sublicensees shall have the right for one year thereafter
to dispose of all Licensed Products then in its inventory, and shall pay
royalties thereon, in accordance with the provisions of this Agreement, as
though this Agreement had not terminated.
12.6 TERMINATION OF SUBLICENSES. Upon any termination of this Agreement,
all sublicenses-granted by BMS under this Agreement shall terminate
simultaneously, subject, nevertheless, to Section 12.5 above.
12.7 BANKRUPTCY.
(a) Either Party may, by Notice to the other Party, terminate this
Agreement as a whole if such other Party becomes insolvent, makes an
assignment for the benefit of creditors, becomes the subject of proceedings
in voluntary or involuntary bankruptcy instituted on behalf of or against
such other party, or has a receiver or trustee appointed for all or
substantially all of its property; provided, however, that, in the case of an
involuntary bankruptcy proceeding, such right to terminate shall become
effective only if such other Party consents to the involuntary bankruptcy or
such proceeding is not dismissed within ninety (90) days following the filing
thereof.
21
(b) All rights and licenses granted under or pursuant to each of
this Agreement, the RDI-Sublicense Agreement and the WSURF-Sublicense
Agreement by one Party to the other are, for all purposes of Section 365(n)
of Title 11 of the United States Code ("TITLE 11"), licenses of rights to
"intellectual property" as defined in Title 11. Each Party agrees during the
term of this Agreement to create and maintain current copies to the extent
practicable of all such intellectual property. The Parties further agree
that, in the event of the commencement of a bankruptcy proceeding by or
against one party under Title 11, the other Party shall be entitled to a
complete duplicate of any and all such intellectual property and all
embodiments of such intellectual property, and the same, if not already in
the possession of such other Party, shall be promptly delivered to it (a)
upon such other Party's written request following the commencement of such
bankruptcy proceeding, unless the Party subject to such bankruptcy
proceeding, or its trustee or receiver, elects to continue to perform all of
its obligations under each of this Agreement, the RDI-Sublicense Agreement
and the WSURF-Sublicense Agreement, or (b) if not delivered as provided under
Clause (a) above, upon such other Party's request following the rejection of
this Agreement, the RDI-Sublicense Agreement or the WSURF-Sublicense
Agreement by-or on behalf of the Party subject to such bankruptcy proceeding.
13. MISCELLANEOUS.
13.1 RELATIONSHIP OF PARTIES. Nothing in this Agreement is intended
or shall be deemed to constitute a partnership, agency, employer-employee or
joint venture relationship between the Parties. No Party shall incur any
debts or make any commitments for the other, except to the extent, if at all,
specifically provided herein.
13.2 FORCE MAJEURE. Neither Party shall be liable to the other for
loss or damages or shall have-any right to terminate this Agreement for any
default or delay attributable to any act of God, flood, fire, explosion,
strike, lockout, labor dispute, shortage of raw materials, casualty or
accident, war, revolution, civil commotion, act of public enemies, blockage
or embargo, injunction, law, order, proclamation, regulation, ordinance,
demand or requirement of any government or subdivision, authority or
representative of any such government, or any other cause beyond the
reasonable control of such Party, if the Party affected shall give prompt
notice of any such cause to the other Party. The Party giving such notice
shall thereupon be excused from such of its obligations hereunder as it is
thereby disabled from performing for so long as it is so disabled and for 30
days thereafter. Notwithstanding the foregoing, nothing in this Section 13.2
shall excuse or suspend the obligation to make any payment due hereunder in
the manner and at the time provided.
13.3 ASSIGNMENT. Neither Party shall be entitled to assign its rights
hereunder. No assignment and transfer shall be valid and effective unless and
until the assignee/transferee shall agree in writing to be bound by the
provisions of this Agreement.
22
13.4 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of
this Agreement.
13.5 NOTICE. Any notice or request required or permitted to be
given under or in connection with this Agreement shall be deemed to have been
sufficiently given if in writing and personally delivered by messenger or
express courier service (signature required), prepaid, to the Party for which
such notice is intended, at the address set forth for such Party below:
(a) In the case of CPI, to:
Cytoclonal Pharmaceutics Inc.
0000 Xxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
(b) In the case of BMS, to:
Xxxxxxx-Xxxxx Squibb Company
Xxxxx 000 & Xxxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: President, Technical Operations
or to such other address for such Party as it shall have specified by like
notice to the other Party, provided that notices of a change of address shall
be effective only upon receipt thereof. If sent by messenger or express
courier service, the date of receipt (in the case of personal delivery) or
dispatch (in the case of courier service) shall be deemed to be the date on
which such notice or request has been given.
13.6 USE OF NAME. Except as otherwise provided herein, neither
Party shall have any right, express or implied, to use in any manner the name
or other designation of the other Party or any other trade name or trademark
of the other Party for any purpose in connection with the performance of this
Agreement.
13.7 PUBLIC ANNOUNCEMENTS. Except as required by applicable law,
neither Party shall issue any press release or make any other public
announcement concerning this Agreement or the subject matter hereof without
the prior written consent of the other Party, which consent shall not be
unreasonably withheld. In the event of a required press release or other
public announcement, the Party making such announcement shall provide the
other Party with a copy of the proposed text prior to such announcement. The
Parties agree that if either is required to file this Agreement with any
governmental agency, such Party will redact the financial terms of this
Agreement to the extent possible in order to keep the financial terms of this
Agreement confidential to the extent permitted by law.
23
13.8 COSTS AND EXPENSES. Except as otherwise expressly provided in
this Agreement, each Party shall bear all costs and expenses associated with
the performance of such Party's obligations under this Agreement.
13.9 WAIVER. A waiver by either Party of any of the terms and
conditions of this Agreement in any instance shall not be deemed or construed
to be a waiver of such term or condition for the future, or of any subsequent
breach hereof. All rights, remedies, undertakings, obligations and agreements
contained in this Agreement shall be cumulative and none of them shall be in
limitation of any other remedy, right, undertaking, obligation or agreement
of either Party.
13.10 SEVERABILITY. When possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
13.11 AMENDMENT. No amendment, modification or supplement of any
provisions of this Agreement shall be valid or effective unless made in
writing and signed by a duly authorized officer of each Party.
13.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO ITS CHOICE OF LAW PRINCIPLES.
13.13 ARBITRATION. Any dispute arising out of or relating to any
provisions of this Agreement shall be finally settled by arbitration to be
held in New York, New York, under the auspices and then current commercial
arbitration rules of the American Arbitration Association. Such arbitration
shall be conducted by three arbitrators appointed according to said rules.
Judgment upon any award rendered may be entered in any court having
jurisdiction, or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may be.
13.14 ENTIRE AGREEMENT. This Agreement, together with the
RDI-Sublicense Agreement, the WSURF-Sublicense Agreement, the side letter
agreement dated May, 19, 1998 entered into among BMS, CPI and WSURF, the side
letter agreement dated May 27, 1998 entered into among BMS, CPI and RDI and
the Research Agreement, sets forth the entire agreement and understanding
between the Parties as to the subject matter hereof and merges all prior
discussions and negotiations between them, and neither of the Parties shall
be bound by any conditions, definitions, warranties, understandings or
representations with respect to such subject matter other than as expressly
provided herein or as duly set forth on or subsequent to the date hereof in
24
writing and signed by a proper and duly authorized officer or representative
of the Party to be bound thereby.
13.15 COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, any one of which need not contain the signature
of more than one Party but all such counterparts taken together shall
constitute one and the same agreement.
13.16 DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are for convenience only, and shall be of no force or effect in
construing or Interpreting any of the provisions of this, Agreement.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed and delivered by its duly authorized officer as of the day and year
first above written.
CYTOCLONAL PHARMACEUTICS INC.
By: /s/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. Xxxxxx, Ph.D.
President and CEO
XXXXXXX-XXXXXX SQUIBB COMPANY
By: /s/ XXXXX X. XXXXX
---------------------------------
Xxxxx X. Xxxxx, Ph.D.
President, Technical Operations
25
SCHEDULE 4.3(b)
LIST OF CELL LINES
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
26
SCHEDULE 4.3(c)
LIST OF ENZYMES AND RELATED GENE MATERIALS
1) Plasmid containing [ ]
2) Plasmids containing [ ]
3) Plasmids containing genes such as [ ]
27
