EXHIBIT 10.5
------------
NEW DRUG RESEARCH AND DEVELOPMENT AGREEMENT
THIS AGREEMENT is made as of Feb. 26, 2005 at Dalian, by and between
Dalian Longsheng Pharma Co., Ltd, having a place of business at 24th Floor,
Zhongyin Building, No. 15 Ren Min Road, Zhongshan District, Dalian("DLP" or
"Party A"), and Shanghai Newsummit Biopharma Co., Ltd, having a place of
business at No. 398 Xxxx Xxx Road, Xxx He Jing Xx-xxxx Xxxx, Xxxxxxxx
000000("XXX" or "Party B").
WHEREAS, DLP is a pharmaceutical manufacturer holding a pharmaceutical
production permit and a pharmaceutical GMP Certification issued by the State
Food and Drug Administration ("SFDA") and relevant governmental departments;
WHEREAS, SNB is a Contract Research Organization (CRO) for biotechnology,
biopharma and international pharmaceutical companies in China and has
proprietary information and technology related to C peptide for the treatment of
diabetes;
WHEREAS, DLP desires that SNB perform certain research and development
work and new drug application and is willing to provide materials to support
such work;
WHEREAS, DLP desires to obtain the results of such research as well as
certain rights to SNB's intellectual property;
WHEREAS, DLP desires to have the exclusive right to manufacture and
market the new drug subject to the approved pharmaceutical number granted by the
SFDA;
WHEREAS, SNB is willing to undertake such research and development and to
grant to DLP such rights, subject to the terms of this agreement.
NOW, THEREFORE, pursuant to the Law of People's Republic of China on
Administration of Pharmaceutical, Contract Law and Regulations on Registration
of Pharmaceutical Products, as amended from time to time, and in consideration
of the premises and mutual covenants herein contained, DLP and SNB agree as
follows:
1. NEW DRUG RESEARCH PROGRAM
1.1 Definition. "New Drug Research Program" shall mean the research program
of C peptide pre-clinical research, clinical research and new drug
application.
1.2 Research Efforts. Both Parties shall use reasonable best efforts, to
conduct the New Drug Research Program jointly in accordance with this
Agreement.
2. EACH PARTY'S RESPONSIBILITIES
2.1 Responsibilities of Party A. DLP shall take the following
responsibilities:
EXHIBIT 10.5
------------
2.1.1 pay for the research service fee of C peptide subject to the conditions
set forth in Article 5.1 of this Agreement;
2.1.2 assist Party B to complete C peptide new drug application;
2.1.3 pay for the clinical research costs of C peptide subject to the
conditions set forth in Article 5.2 of this Agreement;
2.1.4 assist Party B to complete C peptide phase I, II, III clinical research;
2.1.5 be responsible for C peptide phase IV clinical research;
2.1.6 undertake C peptide commercialization research and GMP certification;
2.1.7 pay for GMP technology enhancement costs during production trial of C
peptide;
2.1.8 be responsible for manufacturing, sales and business management of C
peptide.
2.2 Responsibilities of Party B. SNB shall take the following
responsibilities:
2.2.1 be responsible for C peptide pre-clinical research;
2.2.2 be responsible for C peptide pilot products for use in phase I, II, III
clinical research;
2.2.3 be responsible for phase I, II, III clinical research;
2.2.4 be responsible for C peptide new drug application;
2.2.5 assist Party A to complete C peptide phase IV clinical research;
2.2.6 assist Party A to complete C peptide commercialization research and GMP
certification;
2.2.7 assist Party A to undertake C peptide marketing and distribution.
3. INTELLECTUAL PROPERTY AND RELATED RIGHTS
3.1 Patent Prosecution. SNB and DLP shall cooperate fully in the preparation,
filing, prosecution and maintenance of intellectual property rights,
including, without limitation to, title to the New Drug Certificate and
patent, in New Drug Research Program. The Parties shall mutually agree
that SNB, at its sole expense but with assistance by DLP, shall be
responsible for preparing, filing, prosecuting and maintaining the
clinical research approval, the New Drug Certificate (in both Parties'
names), the Approved Pharmaceutical Number (in DLP's sole name) and PRC
and foreign patent (in SNB's sole name) applications.
3.2 Titles to the New Drug Certificate. All rights, titles and interests in
and to the New Drug Certificate of C peptide shall be jointly owned by
both Parties.
3.3 Title to the patent. SNB shall have sole title to the PRC and foreign
patent of C peptide.
3.4 Title to the approved Pharmaceutical Number. DLP shall have sole titled
to the Approved Pharmaceutical Number following issuance of the New Drug
Certificate of C peptide granted by the SFDA. DLP shall have the
exclusive right of manufacturing, marketing and distribution of C
peptide.
3.5 License grants. SNB grants to DLP a worldwide, loyalty-free, exclusive
license to use the patent of C peptide.
3.6 Restriction on sublicense. Neither Party shall, without prior written
consent by the other, grant a sublicense to a third party.
3.7 All rights, titles and interests in and to the non-patented technology
results shall be jointly owned by both Parties.
EXHIBIT 10.5
------------
3.8 DLP shall have the priority to be assigned or licensed to any further
developed technology or products which will be researched by SNB based on
research and development of C peptide.
4. RESEARCH PROGRESS AND INFORMATION EXCHANGE
4.1 The clinical trial is expected to be approved before Dec.31, 2005 and the
new drug certificate is expected to be obtained before Dec.31, 2008. Both
Parties shall use reasonable best efforts jointly to obtain the New Drug
Certificate of C peptide. If either party desires to amend or extend the
progress, the parties shall, upon reasonable notice of the proposed
modification by the party desiring the change, confer in good faith to
determine the amendment. Any such amendment shall not be effective unless
agreed in writing by the signatories of this Agreement or their
authorized representatives.
4.2 Representatives from SNB who are working on the Research Program shall
meet quarterly or as needed with representatives of DLP to discuss the
activities and the data, results and conclusions generated by the work
performed hereunder.
5. PAYMENT
5.1 In consideration of share of rights and titles of New Drug Certificate
of C peptide and of exclusive license of patent of C peptide, DLP shall
pay SNB aggregate amount of 40 million RMB of research service fees in
accordance with conditions set forth below:
5.1.1 within 10 business days upon signing this Agreement, Party A shall pay
Party B 4 million RMB;
5.1.2 within 10 business days after obtaining C peptide clinical approval,
Party A shall pay Party B 18 million RMB;
5.1.3 within 10 business days after obtaining the New Drug Certificate of C
peptide, Party A shall pay Party B 18 million RMB;
5.2 DLP shall pay SNB clinical research costs needed for clinical research
based on actual progress of clinical research.
5.3 SNB shall issue invoice (or receipt) immediately after receiving each
installment of payment.
5.4 The total research service fees under subparagraph 5.1.2 and 5.1.3 above
are 36 million. When Party A pays Party B, Party B can use 50% of those
fees received for equity investment in a joint venture to be established
by Party A and Party B. Both Parties will sign a separate joint venture
agreement.
6. CONFIDENTIALITY
6.1 In order to perform the obligations set forth in this Agreement, it may
be necessary and/or desirable for DLP and SNB to exchange certain
information deemed confidential or proprietary to one or the other and
labeled or described as("Information"). Each party is willing to disclose
its Information to the other under the following terms and conditions:
EXHIBIT 10.5
------------
6.1.1 Each party will take precautions, utilizing the same degree of care it
would use with its own information of like importance, to prevent, and
make is employees and agents obliged to prevent disclosure, directly or
indirectly, of all or any of the Information received from the other
party to any third party, except with the prior written consent of the
other party, and each party will not use any Information received from
the other party except as may be necessary for purposes of this
Agreement. Information given to each party shall not be provided to any
persons who have not undertaken an obligation of confidentiality
substantially similar to that contained herein and then only when such
disclosure is necessary for the purposes of this Agreement. All
originals, copies and samples of tangible forms of Information provided
to each party shall be returned upon request following the termination of
this Agreement except that one copy may be retained for compliance
purposes.
6.1.2 Each party's obligations, under subparagraph 6.1.1 hereof shall not apply
to any Information: (i) known to it prior to disclosure of such
Information which it can prove by its prior written records; or (ii)
lawfully obtained after the date of this Agreement by it from sources,
other than from the other party, having no obligation of confidentiality
to the other party; or (iii) which is at the time of disclosure or which
subsequent to disclosure becomes generally available to the public
through no fault of the receiving party; or (iv) is independently
developed without the use of the other party's information; or (v) is
required to be disclosed pursuant to law, agency rule, government
request, court order or subpoena, provided, however, that prior written
notice shall be provided by the disclosing party to the Information
owner, that reasonable efforts shall be expended by the disclosing party
to obtain confidential treatment for the required disclosure, and that
the disclosing party shall not object to reasonable efforts by the
Information owner to obtain confidential treatment for the required
disclosure.
6.2 Publicity. Neither party shall originate any publicity, news release, or
other public announcement, written or oral, whether to the public press
or otherwise, relating to this Agreement, to any amendment hereto, or to
performance hereunder without the prior written consent of the other,
except where required by law or regulatory requirements. Nothing in this
section 6.2 shall prohibit either party from filing for patent protection
or regulatory approval in connection with developing or marketing a
product.
7. REPRESENTATIONS AND WARRANTIES
7.1 DLP Representations and Warranties. DLP hereby represents and warrants
that DLP has the requisite rights, power and authority to enter into this
Agreement and to perform according to its terms, and that DLP's official
signing this Agreement has authority to do so. DLP further represents
that it is financially able to satisfy any funding commitments made
herein.
7.2 SNB Representations and Warranties. SNB hereby represents and warrants
that SNB has the requisite rights, power and authority to enter into this
Agreement and to perform according to its terms, and that SNB has the
facilities and expertise to conduct the Research Program. SNB represents
that it is presently under no obligation to any third party which would
prevent it from carrying out its duties and obligations under this
Agreement or which is inconsistent with the provisions contained herein.
SNB further warrants that it is aware of no third party intellectual
property that would be infringed by carrying out the Research Program.
EXHIBIT 10.5
------------
8. BREACH OF THE AGREEMENT AND REMEDY
8.1 Breach of the Agreement by Party A.
8.1.1 In the event that Party A fails to pay any installment of research
service fee under subparagraph 5.1 above and fails to take reasonable
steps to remedy such default within thirty (30) days after receipt of
written notice thereof from the Party B, Party B shall have the option of
terminating this Agreement and nominating a third party as successor of
applicant for clinical research approval and/or the New Drug Certificate
by giving written notice thereof. Upon such notice Party B shall pay back
50% of received research service fees previously paid by Party A. Party A
shall provide full assistance for changing the applicant for clinical
approval and/or the New Drug Certificate.
8.1.2 In the event that Party A fails to pay clinical research costs under
subparagraph 5.2 above and fails to take reasonable steps to remedy such
default within thirty (30) days after receipt of written notice thereof
from the Party B, Party B shall have the option of terminating this
Agreement and nominating a third party as successor of applicant for
clinical research approval by giving written notice thereof. Upon such
notice Party B shall pay back 50% of received clinical research costs
previously paid by Party A. Party A shall provide full assistance for
changing the applicant for clinical research approval.
8.1.3 In the event that Party A is unable to meet the necessary requirements
for production in accordance with applicable laws, regulations and rules,
Party B shall have the option of terminating this Agreement and
nominating a third party as successor of applicant for the New Drug
Certificate by giving written notice thereof. Upon such notice Party B
shall pay back none of received clinical research costs previously paid
by Party A. Party A shall provide full assistance for changing the
applicant for the New Drug Certificate.
8.2 Breach of the Agreement by Party B.
8.2.1 In he event that the clinical research approval is unable to obtain due
to Party B's technology deficiencies, Party A shall have the right to
terminate this Agreement by giving written notice thereof. Upon such
notice Party B shall pay back all of received research service fees
previously paid by Party A.
8.2.2 In the event that phase I,II or III of clinical research is unable to
achieve satisfactorily due to Party B's technology deficiencies, Party A
shall have the right to terminate this Agreement by giving written notice
thereof. Upon such notice Party B shall pay back no more than 50% of
received research service fees previously paid by Party A.
8.2.3 In the event that Party B discloses material proprietary information,
grant another license to a third party and Party A therefore will not be
the sole manufacturer of C peptide, Party A shall have the right to
terminate this Agreement by giving written notice thereof. Upon such
circumstance, both parties may negotiate the amount of damages. Party A
may claim the damage of the amount not more than all research service
fees and clinical research costs previously paid to Party B.
EXHIBIT 10.5
------------
9. TERM AND TERMINATION WITHOUT CAUSE
9.1 Term. This Agreement shall be effective as of the last date of signature
hereto, and shall remain in effect continuously, unless sooner terminated
in accordance with the provisions of this Agreement.
9.2 Termination Without Cause. Both Parties may terminate this agreement at
any time by mutual understanding, provided that Parties hold a good faith
belief that further efforts under the Agreement are not commercially
practicable due to any reason(s) to which both Parties are unable to
predict and control. After the termination, Party A shall be granted a
non-exclusive license to the patent, if any, of C peptide.
9.3 Survival. The provisions of Articles 3, 6, 7, 8, 9, 10 and 11 shall
survive any termination of this Agreement.
10. DISPUTE SETTLEMENT
Both Parties shall resolve any dispute arising from or in connection with
this Agreement in an amicable manner. If the dispute cannot be resolved through
negotiation, either Party has the right to file a suit in the court of the
jurisdiction the Party is registered.
11. GENERAL
11.1 Binding Effect; Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and their respective
transferees, successors and assigns, except that neither party shall have
the right to assign this Agreement or its rights and obligations
hereunder, without the prior written consent of the other party thereto.
11.2 Entire Agreement. This Agreement constitutes the entire and only
agreement between the Parties relating to the Research Program, and all
prior negotiations, representations, agreements and understandings are
superseded hereby. No agreements amending, altering or supplementing the
terms hereof may be made except by means of a written document signed by
the duly authorized representatives of the parties.
11.3 Notices. Any notice or communication required or permitted to be given
hereunder shall be in writing and, except as otherwise expressly provided
in this Agreement, shall be deemed given and effective (i) when delivered
personally, by telex or telecopier or (ii) when received if sent by
overnight express or mailed by certified, registered or regular mail,
postage prepaid, addressed to a party at its address set forth above (or
to such other address as such party may designate by written notice),
said notice being deemed given as of the date of mailing.
EXHIBIT 10.5
------------
If to SNB, to:
Shanghai Newsummit Biopharma Co., Ltd,
No. 398 Xxxx Xxx Road, Xxx He Jing Xx-xxxx Xxxx,
Xxxxxxxx 000000
ATTN:
person in charge
Phone No.:
Fax No.:
If to DLP, to:
Dalian Longsheng Pharma Co., Ltd,
24th Floor, Zhongyin Building, No. 15 Ren Min Road,
Zhongshan District, Dalian
ATTN:
person in charge
Phone No.:
Fax No.:
11.4 Severability. If any provisions of this Agreement shall be found by a
court of competent jurisdiction to be void, invalid or unenforceable, the
same shall either be reformed to comply with applicable law or stricken
if not so conformable, so as not to affect the validity or enforceability
of the remainder of this Agreement.
11.5 Waivers. No delay or omission on the part of either party to enforce or
exercise any right under this Agreement shall operate as a waiver of that
right or any other right hereunder, or the ability to later assert that
right relative to the particular situation involved or to terminate this
Agreement arising out of any subsequent default or breach.
11.6 Counterparts. This Agreement may be executed in 4 of counterparts, each
of which shall constitute an original document, but all of which shall
constitute the same agreement.
11.7 Force Majeure. Neither Party shall be liable for any unforeseeable event
beyond its reasonable control not caused by the fault or negligence of
such Party, which causes such Party to be unable to perform its
obligations under this Agreement and which it has been unable to overcome
by the exercise of due diligence. In the event of the occurrence of such
a force majeure event, the Party unable to perform shall promptly notify
the other Party. It shall further use its best efforts to resume
performance as quickly as possible and shall suspend performance only for
such period of time as is necessary as a result of the force majeure
event.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date and place first
written above.
EXHIBIT 10.5
------------
Dalian Longsheng Pharma Co., Ltd, Shanghai Newsummit Biopharma Co., Ltd
By: By:
----------------------- -----------------------------
Title: General Manager Title: General Manager
------------------------ ------------------------------
Date: 2005-2-26 Date: 2005-2-26
C peptide
