EXHIBIT 10.4
SEMI-EXCLUSIVE LICENSE AGREEMENT
THIS SEMI-EXCLUSIVE LICENSE AGREEMENT (hereinafter, "Agreement"),
effective as of April 1, 2005 (hereinafter, the "Effective Date"), is made by
and between Xxxxxx Laboratories, a corporation of the State of Illinois, having
its principal place of business at 000 Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, XX
00000-0000 (hereinafter, "Abbott") and BioCurex Inc., a corporation of the State
of Texas, having its principal place of business at 000-0000 Xxxxx Xxxx,
Xxxxxxxx, XX, Xxxxxx, X0X 0X0 (hereinafter, "BioCurex").
WITNESSETH:
WHEREAS, BioCurex owns the entire right, title and interest in and to the
Patent Rights (as hereinafter defined), the RECAF(TM) Technology (as hereinafter
defined) and the RECAF Material (as hereinafter defined) relating to a certain
technology designed to detect RECAF (as hereinafter defined);
WHEREAS, Abbott has conducted certain preliminary assessments of the
Patent Rights and RECAF Technology;
WHEREAS, Abbott desires to obtain from BioCurex pursuant to the terms and
conditions hereof: (i) a semi-exclusive license to the Patent Rights, RECAF
Technology and RECAF Material; and (ii) the RECAF Material; and
WHEREAS, pursuant to the terms and conditions hereof, BioCurex desires and
is willing: (i) to grant to Abbott a semi-exclusive license to Abbott to the
Patent Rights, RECAF Technology and RECAF Material; and (ii) transfer the RECAF
Material to Abbott.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions set forth herein, and for other valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Abbott and BioCurex agree as
follows:
1. DEFINITIONS.
The following words and phrases, when used herein with initial capital
letters, shall have the meanings set forth or referenced below:
1.1. "Abbott Trademarks" shall mean any of Xxxxxx'x trademarks, trade
names, service marks and logos and all derivations of the foregoing.
1.2. "Affiliate" shall mean any corporation, firm, partnership or other
entity that controls, is controlled by, or is under common control
with a Party (as hereinafter defined). For the purposes of this
definition, a Party shall be deemed to control another entity if it
owns or controls, directly or indirectly more than fifty percent
(50%) of the voting equity of the other entity.
* Confidential treatment requested. Confidential portion has been omitted and
filed separately with the Securities and Exchange Commission.
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1.3. "Average Net Sales Price" means Xxxxxx'x actual Net Sales (as
hereinafter defined) for Product (as hereinafter defined) sold divided
by the total number of units of such Product sold during a given
Calendar Quarter (as hereinafter defined).
1.4. "BioCurex Marks" means the trademark "RECAF(TM)" or "BioCurex(TM)".
1.5. "Calendar Quarter" shall mean respectively, the three consecutive
month periods of each Calendar Year: January, February and March;
April, May and June; July, August and September; and October, November
and December.
1.6. "Calendar Year" shall mean the period from January 1 through December
31, except for purposes of this Agreement the first Calendar Year
shall commence on the Effective Date and end on the following December
31.
1.7. "Commercial Sale" shall mean the sale to a Third Party (as hereinafter
defined) of Product, specific to the Field of Use (as hereinafter
defined), a Veterinary Application (as hereinafter defined) and/or a
Lateral Flow Immunochromatography Application (as hereinafter
defined), in the Territory (as hereinafter defined), as evidenced by
an invoice to such Third Party. The following shall not be deemed a
Commercial Sale for purposes of this Agreement: (a) Product that is
transferred, with or without the receipt of monetary consideration, to
a Third Party reference laboratory, or similar entity, as analyte
specific reagent (hereinafter, "ASR") until such time as Abbott
receives FDA (as hereinafter defined) approval of its PMA (as
hereinafter defined) application (or appropriate equivalent
application) for the first Commercial Sale of Product in the United
States; or (b) Product that is transferred to a Third Party for the
evaluation of Product performance, the generation of data necessary
for pre-marketing Regulatory Approval (as hereinafter defined) from a
Regulatory Authority (as hereinafter defined) or any other research
use, without the receipt of any monetary consideration.
1.8. "Confidential Information" shall mean any and all technical data,
information, materials or other know-how including trade secrets
presently owned by, or developed by or on behalf of either Party
and/or its Affiliates, including any information relating to the
development, manufacture, promotion, marketing, distribution, sale or
use of, Product, and any and all financial data and information
relating to business of either of the Parties and/or of their
Affiliates, which a Party and/or its Affiliates discloses to the other
Party and/or its Affiliates in writing and identifies as being
confidential, or if disclosed orally, visually or through some other
media, is identified as confidential at the time of disclosure and is
summarized in writing within thirty (30) days of such disclosure and
identified as confidential, except any portion thereof which:
(a) is known to the receiving Party and/or its Affiliates at the time
of disclosure, as evidenced by its written records;
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(b) is disclosed to the receiving Party and/or its Affiliates by a
Third Party having a right to make such disclosure;
(c) becomes patented, published or otherwise part of the public
domain through no fault of the receiving Party and/or its
Affiliates; or
(d) is independently developed by or for the receiving Party and/or
its Affiliates without use of the Confidential Information
disclosed hereunder, as evidenced by its written records.
1.9. "FDA" shall mean the United States Food and Drug Administration or any
successor entity thereto.
1.10. "Field of Use" shall mean all in vitro diagnostic applications,
except:
(a) any immunohistochemistry, immunocytochemistry application, or any
other procedures that detect RECAF in prepared and excised human
tissue sections or other materials excised from human tissue
sections;
(b) any immunoradiometric assay application (also known as
radioimmunoassay or RIA), including such applications designed to
detect or measure RECAF in body fluids;
(c) any type of flow cytometry assay application designed to detect
or measure RECAF;
(d) any lateral flow immunochromatography application (hereinafter, a
"Lateral Flow Immunochromatography Application");
(e) any imaging of tumors in any form;
(f) any non-immunometric diagnostic assay application utilizing
nucleic acid amplification technology (e.g., PCR), including (i)
all forms of synthetic or natural ribonucleic acid (RNA), (ii)
all forms of synthetic or natural deoxyribonucleic acid (DNA),
including complementary DNA and (iii) all modifications of said
nucleic acids that in their natural form are related to the
synthesis of RECAF;
(g) any therapeutic application, including therapeutic applications
relating to cleansing bone marrow specimens, or pregnancy, the
pregnant mother, the fetus or the embryo;
(h) any vaccination against cancer or pregnancy; or
(i) any use in animals for any veterinary medicine application
(hereinafter, a "Veterinary Application").
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1.11. "Improvement" shall mean any new development or modification to
Product, RECAF Material or RECAF Technology made by either Party,
provided that such development or modification, but for the license
granted herein, would infringe at least one (1) Valid Claim (as
hereinafter defined).
1.12. "Net Sales" shall mean the Adjusted Gross Invoice Price (as
hereinafter defined) less ten percent (10%) for the Commercial Sale of
Product by Abbott or its Affiliates to a Third Party in the Field of
Use in the Territory. For purposes of this Agreement, "Adjusted Gross
Invoice Price" shall mean the gross invoice price charged
(hereinafter, "Gross Invoice Price") for the Product or Packaged
Product (as hereinafter defined), as the case may be, from which
taxes, duties, returns, credits, freight, and insurance are
subtracted. Additionally:
(a) In the event Product is packaged with other products or assays
which have commercial utility other than in combination with the
Product, and the Product contained therein is not separately
priced (hereinafter, a "Packaged Product"), the Net Sales of the
Product contained in such Packaged Product shall equal an amount
calculated by multiplying the Adjusted Gross Invoice Price of the
Packaged Product less ten percent (10%) with a fraction
(hereinafter, the "Fraction"), the numerator of which shall be
the average Gross Invoice Price for Product sold on a stand-alone
basis in the same country or region, as the case may be, within
the same Calendar Quarter as the sale of such Packaged Product,
to unaffiliated Third Parties located in the same country or
region, as the case may be, and the denominator of which shall be
the average Gross Invoice Price for Packaged Product sold in the
same country or region, as the case may be, within the same
Calendar Quarter as the sale of such Packaged Product, to
unaffiliated Third Parties located in the same country or region,
as the case may be. For purposes of this Section 1.12(a), the
Parties hereby agree that in the event Abbott or its Affiliates:
(i) have established Commercial Sales of Product on a stand-alone
basis in the same country in which the Packaged Product was sold,
then the numerator and denominator data set forth in the Fraction
shall be derived from such country; and (ii) do not have
established Commercial Sales of Product on a stand-alone basis in
the same country in which the Packaged Product was sold, then the
Parties shall cooperate in good faith to determine the
appropriate region from which to derive the numerator and
denominator data set forth in the Fraction.
For example:
o The average Gross Invoice Price of Product in Country A
during Q3 of 2008 is *.
o The average Gross Invoice Price of Packaged Product in
Country A during Q3 of 2008 is *.
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o The Adjusted Gross Invoice Price less 10% of a particular
Packaged Product in Country A during Q3 of 2008 is *. (In
this example Adjusted Gross Invoice Price is equal to Gross
Invoice Price.)
Thus, the Net Sales for Product contained in the Packaged Product
shall be * multiplied by *.
(b) Net Sales shall not include Product: (i) commercially sold to a
Third Party reference laboratory or similar entity as ASR
(subject to the limitations set forth in Section 1.7(a)); or (ii)
used for Research and Development (as hereinafter defined)
purposes, evaluation of customer acceptance, charitable or
humanitarian donations, commercial samples, or other
noncommercial uses as long as Abbott receives no financial
compensation for such use or donation.
1.13. "Party" shall mean Abbott or its Affiliate, or BioCurex or its
Affiliate, and "Parties" shall mean Abbott or any of its Affiliates,
and BioCurex or any of its Affiliates.
1.14. "Patent Rights" shall mean the patents and patent applications
relating to RECAF Technology or RECAF Material, including any
provisionals, continuations, continuations-in-part, divisionals,
substitutions, reissues, revalidations, registrations, renewals,
reexaminations, extensions or additions and equivalents thereof in the
Territory. For convenience, Patent Rights includes, but is not limited
to, those patents and patent applications set forth in Exhibit 1.14.
1.15. "Product" shall mean a product which either: (a) but for a license
granted under the Patent Rights, would infringe a Valid Claim; or (b)
incorporates or utilizes RECAF Technology and/or RECAF Material.
1.16. "RECAF" (an acronym for "receptor of alpha-fetoprotein") shall mean
any synthetic or natural molecule, or portion of such molecule, or
molecule derivative from another molecule, that in its natural state
shows specific binding to: (a) natural or synthetic alpha-fetoprotein
("AFP"); (b) a fragment of AFP; (c) a modification of AFP; (d) a
modification of a fragment of AFP; (e) native or synthetic AFP bound
to fatty acids or other molecules; or (f) a fragment of AFP bound to
other fatty acids or other molecules. "Specific binding" as used in
this Section 1.16, means an interaction between two (2) molecules
that: (x) becomes saturated as the concentration of one (1) of the
molecules is increased with respect to the other; and (y) can be
competed with the other molecule or an excess of the same molecule
unlabeled. In the event (i) RECAF specifically binds to another
molecule known in the public domain, (ii) Abbott does not have a
product for sale or a technology already licensed to others based on
said molecule as of the Effective Date, and (iii) Abbott decides to
develop and commercialize a product or a technology based on said
molecule specifically pertaining to the field of cancer diagnostics,
then such product or technology shall be deemed a Product subject to
the terms and conditions of this Agreement.
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1.17. "RECAF Material" shall mean one or more cell lines owned by BioCurex
that produce antigens, monoclonal antibodies or polyclonal antibodies
that specifically bind to RECAF, including: (a) any Improvements
thereof; and (b) any additional tangible materials that may be
provided by BioCurex to Abbott during the Term that are necessary and
useful for the Research and Development (as hereinafter defined),
Regulatory Approval, manufacture, use or sale of Product.
1.18. "RECAF Technology" shall mean all of BioCurex's existing and future
proprietary information pertaining to the detection of RECAF in
biological specimens, including, but not limited to, developments
(including, but not limited to, Improvements), discoveries,
inventions, processes, methods, techniques, trade secrets, biological
materials (but excluding RECAF Materials), results of experimentation,
and technical information pertaining thereto, whether or not
patentable, which are necessary and useful for the development,
Regulatory Approval, manufacture, use, or sale of Product.
1.19. "Regulatory Approval" shall mean all approvals and authorizations
necessary from the appropriate Regulatory Authority for the
manufacture and Commercial Sale of Product in a country, region or
territory of the Territory.
1.20. "Regulatory Authority" shall mean any federal, state or local or
international regulatory agency, department, bureau, notified body or
other governmental entity, including the FDA and European authorities,
which is responsible for issuing approvals, licenses, registrations,
clearances or authorizations necessary for the manufacture, use,
storage, import, transport or sale of Product in a regulatory
jurisdiction.
1.21. "Term" shall have the meaning ascribed to it in Section 6.1.
1.22. "Territory" shall mean all the countries, regions and territories of
the world.
1.23. "Third Party" shall mean a natural person, corporation, partnership,
trust, joint venture, governmental authority or other legal entity or
organization other than the Parties and/or their Affiliates.
1.24. "Valid Claim" shall mean any claim of an issued and unexpired patent
included within Patent Rights that has not been held unenforceable,
unpatentable or invalid by a decision of a court or governmental
agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal or which has not been admitted by the
holder of the patent to be invalid or unenforceable through reissue,
disclaimer or otherwise. In the event a patent has been held to be
invalid or unenforceable and an appeal is pending, such claims shall
not be considered a Valid Claim until reinstated by a final decision
of a court or governmental agency of competent jurisdiction.
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2. LICENSE GRANT
2.1. License.
(a) BioCurex hereby grants to Abbott and its Affiliates, subject to
the terms and conditions of this Agreement, a semi-exclusive
license, with the right to grant sublicenses to Third Parties, to
make, have made, use, offer for sale, sell, have sold and import
Product in the Field of Use in the Territory, which, but for such
license, would infringe at least one (1) Valid Claim. Further,
BioCurex hereby grants to Abbott and its Affiliates, subject to
the terms and conditions of this Agreement, a semi-exclusive
license, with the right to grant sublicenses to Third Parties, to
make, have made, use, offer for sale, sell, have sold and import
Product under the RECAF Technology and RECAF Material in the
Field of Use in the Territory. Notwithstanding the foregoing,
BioCurex hereby grants to Abbott and its Affiliates a
non-exclusive license, with the right to grant sublicenses to
Third Parties, under the Patent Rights, RECAF Technology and
RECAF Material, to make, have made, use, sell, import and
otherwise distribute Product in the Territory for any: (i)
lateral flow immunochromatography application; or (ii) veterinary
medicine application. Upon Xxxxxx'x request, the Parties hereby
agree to negotiate in good faith a non-exclusive license grant
from BioCurex to Abbott, with the right to grant sublicenses to
Third Parties, to make, have made, use, offer for sale, sell,
have sold and import Product in the Territory for any other
application specifically excluded from the scope of the Field of
Use under the Patent Rights, RECAF Technology and RECAF Material.
(b) The Parties hereby acknowledge that as of the Effective Date,
BioCurex retains the right to engage in the Commercial Sale of
Product in the Field of Use in the Territory. As long as BioCurex
retains such right, BioCurex shall have the right to grant to
only one (1) Third Party (hereinafter, "Third Party
Semi-Exclusive Licensee") a license under the Patent Rights,
RECAF Technology and RECAF Material to engage in the Commercial
Sale of Product in the Field of Use in the Territory (in addition
to the license grant to Abbott set forth in Section 2.1(a)). In
the event BioCurex determines that it will relinquish its right
engage in the Commercial Sale of Product in the Field of Use in
the Territory, BioCurex shall: (i) provide written notification
thereof to Abbott promptly upon making such determination; and
(ii) have the right to grant to one (1) additional Third Party a
license under the Patent Rights, RECAF Technology and RECAF
Material to engage in the Commercial Sale of Product in the Field
of Use in the Territory (causing such Third Party to be deemed a
Third Party Semi-Exclusive Licensee). For purposes of
clarification, at any given point in time during the Term,
BioCurex shall permit a maximum of three (3) parties (including
Abbott), in addition to Xxxxxx'x Commercial Sale Sublicensees as
set forth in Section 2.2, with the right to engage in the
Commercial Sale of Product in the Field of Use in the Territory.
BioCurex shall notify Abbott within thirty (30) days of entering
into a semi-exclusive license with a Third Party Semi-Exclusive
Licensee, including, without limitation, the identity of such
Third Party Semi-Exclusive Licensee, and a summary of the key
financial and other
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terms and conditions established between BioCurex and such Third
Party Semi-Exclusive Licensee. Any information exchanged between
the Parties pursuant to this Section 2.1(b) shall be deemed
Confidential Information subject to the provisions of Article 7.
(c) In the event BioCurex notifies Abbott that it will relinquish its
right engage in the Commercial Sale of Product in the Field of
Use in the Territory in accordance with Section 2.1(b), Abbott
shall consider in good faith any request put forth by BioCurex to
become a Commercial Sale Sublicensee (as hereinafter defined) of
Abbott pursuant to terms and conditions to be negotiated by the
Parties.
(d) BioCurex shall retain the right to develop, manufacture, sell and
license the Patent Rights, RECAF Technology and RECAF Material
for use outside of the scope of the Field of Use in the
Territory.
2.2. Exclusive Sublicense Right. Abbott shall have the exclusive right to
grant to Third Parties a sublicense under the Patent Rights, RECAF
Technology and RECAF Material to engage in the Commercial Sale of
Product (any such Third Party sublicensee of Abbott shall hereinafter
be referred to as a "Commercial Sale Sublicensee"). For purposes of
clarification, BioCurex has not previously and shall not in the future
permit any Third Party licensees (including, without limitation, any
Third Party Semi-Exclusive Licensee), to grant to a Third Party any
sublicense under the Patent Rights, RECAF Technology and RECAF
Material to engage in the Commercial Sale of Product. Additionally,
each sublicense agreement between Abbott and a Commercial Sale
Sublicensee shall be in writing and require, among other things, that
such Commercial Sale Sublicensee shall maintain accurate records of
its Commercial Sales. Abbott shall provide BioCurex with a copy of
each sublicensing agreement between it and a Commercial Sale
Sublicensee within thirty (30) days of the effective date of such
sublicensing agreement, provided that BioCurex shall consider any such
sublicense agreements to be Confidential Information subject to the
provisions of Article 7.
2.3. Restriction on Commercial Sale Sublicensees. Abbott shall not grant
any sublicense hereunder to a Commercial Sale Sublicensee that would
provide such Commercial Sale Sublicensee with the right to further
grant a sublicense to another Third Party under the Patent Rights,
RECAF Technology or RECAF Material to engage in the Commercial Sale of
Product.
2.4. Most Favored Licensee.
(a) BioCurex has not previously and shall not in the future grant any
license under the Patent Rights, RECAF Technology or RECAF
Material in the Field of Use in the Territory to any Third Party
Semi-Exclusive Licensee at a minimum royalty rate less than the
minimum royalty rates set forth in Sections 4.4 and 4.5, as
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applicable. If BioCurex does offer any such license to the Third
Party Semi-Exclusive Licensee at a royalty rate less than those
set forth in Sections 4.4 and 4.5, regardless of any other
consideration given by such Third Party Semi-Exclusive Licensee,
BioCurex shall notify Abbott in writing within ten (10) business
days of the offer of such license, and provide Abbott a copy of
such license to give Abbott the opportunity to decide whether to
incorporate such lower royalty rate into this Agreement.
(b) BioCurex shall be permitted to grant a license to a Third Party
under the Patent Rights, RECAF Technology or RECAF Materials
specific to a Veterinary Application or a Lateral Flow
Immunochromatography Application at a royalty rate less than the
minimum royalty rates set forth in Sections 4.4 and 4.5, as
applicable, provided that: (i) BioCurex promptly notifies Abbott
of such reduced royalty rate; and (ii) this Agreement is amended
to incorporate the equivalent reduced royalty rate with respect
to Xxxxxx'x royalty obligations pertaining to the Commercial Sale
of Veterinary Application Products and/or a Lateral Flow
Immunochromatography Application Products, as the case may be.
(c) Except as specifically provided herein, nothing in this Section
2.4 shall be construed to require that any other term or
condition (that does not pertain to royalty rates) set forth in
this Agreement be modified as a result of any license grant or
other agreement entered into between BioCurex and a Third Party
licensee (including, without limitation, any Third Party
Semi-Exclusive Licensee).
2.5. Research and Development; Commercialization of Product. Abbott shall
use commercially reasonable efforts to perform the pre-clinical and
clinical studies (hereinafter, "Research and Development") required
for obtaining Regulatory Approval for Product (to the extent Product
may potentially be utilized as an aid in the management, diagnosis or
early detection or screening, of most types of cancer) from relevant
Regulatory Authorities. Such commercially reasonable efforts shall be
consistent with the efforts Abbott would devote to other products with
similar commercial potential; provided, that Abbott shall retain sole
discretion with respect to Research and Development, obtaining
Regulatory Approvals, manufacturing and commercialization of Product
in the Territory; and further provided, that Abbott, at its sole
discretion, shall fund the costs associated with such Research and
Development, Regulatory Approvals, manufacturing and commercialization
of Product in the Territory. In connection with Xxxxxx'x Research and
Development efforts, BioCurex will use commercially reasonable efforts
to provide Abbott with information and assistance, at Xxxxxx'x
expense, as Abbott may reasonably request.
2.6. Summary Report of Research and Development. As long as Abbott is
engaged in Research and Development activities pursuant to Section
2.5, it shall provide BioCurex with a semi-annual written summary
report of the status of such Research and Development activities.
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BioCurex will treat any such reports provided under this Section 2.6
as Confidential Information subject to the provisions of Article 7.
3. TRANSFER OF RECAF MATERIAL AND RECAF TECHNOLOGY.
3.1. Transfer of RECAF Material. Within ninety (90) days of the Effective
Date of this Agreement, BioCurex shall deliver the RECAF Materials in
the designated amounts set forth below:
(a) 200 micrograms of pure RECAF antigen;
(b) 3 x vials (frozen) of cells for producing monoclonal antibodies
designated as 14G11;
(c) 3 x vials (frozen) of cells for producing monoclonal antibodies
designated as 13H1;
(d) 3 x vials (frozen) of cells for producing RECAF antigen
designated as MCF7;
(e) 20 milligrams of purified monoclonal antibody designated as
14G11;
(f) 20 milligrams of purified monoclonal antibody designated as 13H1;
and
(g) 10 milliliters of rabbit antisera containing polyclonal
antibodies against RECAF.
BioCurex shall place any appropriate temperature, pressure, and/or
shock indicators in any shipment of RECAF Material to insure the
common carrier's conformance with shipping instructions and
restrictions, such as temperature or handling.
3.2. Successful RECAF Material Transfer. Successful transfer of the RECAF
Material pursuant to Section 3.1 shall be determined by independent
establishment of RECAF Material at Xxxxxx, or at an Xxxxxx'x
designee's place of business, in accordance with the following
criteria:
(a) RECAF Material is free of any bacteria, mycoplasma, viral and
fungal contamination that would impair the production of RECAF
Material upon receipt at Xxxxxx'x or Xxxxxx'x designee's
facility;
(b) RECAF Material is viable, as determined by stabilization and
production of RECAF monoclonal antibody for at least thirty
doublings; and
(c) RECAF Material produces monoclonal antibodies that bind
specifically to RECAF consistent with monoclonal antibodies
produced by such RECAF Material.
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3.3. Unsuccessful Transfer. If establishment of the RECAF Material
delivered to Xxxxxx under this Article 3 is unsuccessful, as
determined solely by Xxxxxx using the criteria of Section 3.2,
BioCurex hereby agrees to use commercially reasonable efforts to
provide additional quantities of RECAF Material in such amounts as
Xxxxxx may reasonably request until such time that Xxxxxx is able to
produce RECAF Material in sufficient quantities to support its
Research and Development and other commercialization efforts.
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3.4 Additional Transfers of RECAF Technology. Within thirty (30) days of
the Effective Date and periodically during Xxxxxx'x performance of the
Feasibility Review (as set forth in Section 4.2(a)), BioCurex shall
use commercially reasonable efforts to deliver to Xxxxxx additional
reference reagents, assay kits, monoclonal antibodies, polyclonal
antibodies and antigen for RECAF in such sufficient quantities as
Xxxxxx may reasonably request until such time that Xxxxxx is able to
produce RECAF Material in sufficient quantities to support its
Research and Development and other commercialization efforts.
3.5. Assistance By BioCurex. With respect to all transfers and
establishment procedures of RECAF Material and RECAF Technology
pursuant to this Article 3, BioCurex shall make available to Xxxxxx:
(a) any relevant and useful documents and other technical information;
(b) any necessary protocols associated with the RECAF Materials and
other RECAF Technology; and (c) any consultation services and other
assistance that Xxxxxx may reasonably request.
3.6. Notification by Xxxxxx of Successful Transfer. Upon each successful
transfer of RECAF Material in accordance with this Article 3, Xxxxxx
shall promptly provide BioCurex with written notification thereof.
4. LICENSE CONSIDERATION.
4.1. Execution Fee; Material Transfer Fee. As consideration for the
semi-exclusive license granted under Section 2.1 and for BioCurex's
agreement to the other terms and conditions hereof, Xxxxxx shall pay
to BioCurex a fee of Two Hundred Thousand Dollars ($200,000), no later
than May 15, 2005. Any such fee submitted pursuant to this Section 4.1
shall be non-refundable and non-creditable toward future royalty
obligations.
4.2. Milestone Payments. Within forty-five (45) days of the completion of a
milestone described below in Subsections 4.2 (a)-(c), Xxxxxx shall
make the appropriate corresponding milestone payment:
(a) One Hundred Thousand Dollars ($100,000) following Xxxxxx'x
notification to BioCurex of Xxxxxx'x successful completion of the
feasibility review ("Feasibility Review") described in more
detail in Exhibit 4.2 hereto;
(b) One Hundred Thousand Dollars ($100,000) following Xxxxxx'x
submission to the FDA of a Pre-Market Approval ("PMA")
application (or appropriate equivalent submission) for the
Commercial Sale of Product in the United States; and
(c) One Hundred Thousand Dollars ($100,000) upon (i) the FDA's
approval of Xxxxxx'x PMA application (or appropriate equivalent
submission) for the Commercial Sale of Product in the United
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States, or (ii) Xxxxxx'x first Commercial Sale of Product in the
Field of Use in the Territory, whichever occurs first.
Any such fees due and owing pursuant to this Section 4.2 shall be
non-refundable and non-creditable toward future royalty obligations.
4.3. Annual Minimum Royalties.
(a) Commencing with the 2007 Calendar Year and continuing each
subsequent Calendar Year through the Calendar Year in which
Xxxxxx makes its first Commercial Sale of Product, Xxxxxx shall
pay to BioCurex an annual minimum royalty of Fifty Thousand
Dollars ($50,000), payable by March 1 of a given Calendar Year.
All such annual minimum royalty amounts paid by Xxxxxx pursuant
to this Section 4.3(a) shall be credited against actual royalties
to be paid by Xxxxxx during the Term pursuant to Sections 4.4 and
4.5 hereof until such credit amount is exhausted. In the event
Xxxxxx exercises its early termination option under Section 6.2,
and provided that BioCurex is not then in breach any provisions
of this Agreement, then any payment submitted by Xxxxxx under
this Section 4.3(a) shall be non-refundable and non-creditable
toward actual royalties due and owing by Xxxxxx pursuant to
Sections 4.4 and 4.5 hereof.
(b) Commencing with the Calendar Year following the Calendar Year in
which Xxxxxx'x first Commercial Sale of Product occurred and
continuing each subsequent Calendar Year through the Term, Xxxxxx
shall pay to BioCurex an annual minimum royalty of One Hundred
Thousand Dollars ($100,000), payable by March 1 of a given
Calendar Year. Such annual minimum royalty amount paid by Xxxxxx
pursuant to this Section 4.3(b) for a given Calendar Year shall
be credited against actual royalties to be paid by Xxxxxx during
the Term pursuant to Sections 4.4 and 4.5 hereof during said
Calendar Year.
4.4. Royalties for Net Sales in Valid Claim Countries. As further
consideration for the semi-exclusive license granted under Section 2.1
and for BioCurex's agreement to the other terms and conditions hereof,
Xxxxxx shall pay BioCurex a royalty based on Net Sales of Product in a
country with a Valid Claim covering such Product (hereinafter, "Valid
Claim Countries"):
(a) In the event the Average Net Sales Price of Product in Valid
Claim Countries is U.S. *, or equivalent to * or less, Xxxxxx
shall make a royalty payment to BioCurex of * for the Commercial
Sale by Xxxxxx and its Affiliates of each unit of Product in a
Valid Claim Country. Such royalty obligation pursuant to this
Section 4.4(a) shall continue until the date on which the last
patent or patent application under the Patent Rights covering
such Product expires (the "Expiration Date of Patent Rights
Covering Product") in a particular Valid Claim Country, whereupon
13
Xxxxxx shall have a fully paid, non-exclusive and irrevocable
license to all Patent Rights covering such Product in such Valid
Claim Country.
(b) In the event the Average Net Sales Price of Product in Valid
Claim Countries is greater than *, or equivalent to greater than
*, Xxxxxx shall make a royalty payment to BioCurex equal to the
following amount for the Commercial Sale by Xxxxxx and its
Affiliates of each unit of Product in a Valid Claim Country:
*
For example, if Xxxxxx'x Average Net Sales Price of Product is *,
then Xxxxxx shall owe BioCurex a royalty payment of * for the
Commercial Sale of each unit of Product, and if the Actual
Average Net Sales Price of Product is *, then Xxxxxx shall owe
BioCurex a royalty payment of * for the Commercial Sale of each
unit of Product.
Such royalty obligation pursuant to this Section 4.4(b) shall
continue until the Expiration Date of Patent Rights Covering
Product in a particular Valid Claim Country, whereupon Xxxxxx
shall have a fully paid, non-exclusive and irrevocable license to
all Patent Rights covering such Product in such Valid Claim
Country.
(c) In the event Xxxxxx'x royalty obligation under Sections 4.4(a) or
4.4(b) for the Commercial Sale of Product in a particular country
terminates due to the occurrence of the Expiration Date of Patent
Rights Covering Product, but Xxxxxx or its Affiliates continues
to make Commercial Sales in such country of Product incorporating
or utilizing RECAF Material, then Xxxxxx shall make a royalty
payment to BioCurex equal to * for the Commercial Sale by Xxxxxx
and its Affiliates of each unit of such Product in such country
for a period of five (5) years following the Expiration Date of
Patent Rights Covering Product, after which time Xxxxxx shall
have a fully paid, non-exclusive and irrevocable license to all
RECAF Material, in addition to all Patent Rights in accordance
with Section 4.4(a) or 4.4(b), covering such Product in such
country. For purposes of clarification, Xxxxxx shall have no
royalty payment obligation hereunder in connection with the
Commercial Sale of Product that incorporates or utilizes RECAF
Technology after the occurrence of the Expiration Date of Patent
Rights Covering Product.
(d) In the event Xxxxxx'x Average Net Sales Price of Product in the
Valid Claim Countries becomes * or less, or equivalent to * or
less, the Parties hereby agree to negotiate in good faith a new
royalty payment structure.
4.5. Royalties for Net Sales in Non-Valid Claim Countries for Commercial
Sale of Product Utilizing RECAF Technology.
14
As further consideration for the semi-exclusive license granted under
Section 2.1 and for BioCurex's agreement to the other terms and
conditions hereof, commencing on the date of the first Commercial
Sale of Product incorporating or utilizing RECAF Technology in a
country without a Valid Claim that covers such Product (hereinafter,
a "Non-Valid Claim Country") by Xxxxxx and its Affiliates and
continuing for five (5) years thereafter, Xxxxxx shall make a royalty
payment to BioCurex equal to * for the Commercial Sale by Xxxxxx of
each unit of Product in such Non-Valid Claim Country, after which
time Xxxxxx shall have a fully paid, irrevocable license to all RECAF
Technology incorporated into Product in such Non-Valid Claim Country.
For purposes of clarification: (a) Xxxxxx shall have no royalty
payment obligation hereunder in connection with the Commercial Sale
of Product that incorporates or utilizes RECAF Material in a
Non-Valid Claim Country, except as set forth in Section 4.4(c); and
(b) Xxxxxx'x royalty payment obligation with respect to the
Commercial Sale of Product in a Non-Valid Claim Country shall be
governed by this Section 4.5 unless such country becomes a Valid
Claim Country prior to the expiration of five (5) year royalty
payment commitment described in the first sentence of this Section
4.5 (in which case Xxxxxx shall commence to make royalty payments for
the Commercial Sale of Product in accordance with Section 4.4).
4.6. Sublicense Agreement Payments.
(a) In the event Xxxxxx grants a sublicense to a Commercial Sale
Sublicensee, Xxxxxx shall provide BioCurex with a payment of
twenty percent (20%) of any upfront sublicense fees submitted to
Xxxxxx by such Commercial Sale Sublicensee within forty-five (45)
days of Xxxxxx'x receipt thereof. Any such fees due and owing
pursuant to this Section 4.6(a) shall be non-refundable and
non-creditable toward future royalty obligations hereunder.
(b) Commencing on the date of the first Commercial Sale by a
Commercial Sale Sublicensee of Product, that but for the
sublicense granted to the Commercial Sale Sublicensee would
infringe at least one (1) Valid Claim covering such Product in a
Valid Claim Country, and continuing for the duration of the
applicable sublicense agreement by and between Xxxxxx and such
Commercial Sale Sublicensee, Xxxxxx shall make a royalty payment
to BioCurex of * for the Commercial Sale by such Commercial Sale
Sublicensee of each unit of such Product in such Valid Claim
Country.
(c) Commencing on the date of the first Commercial Sale by a
Commercial Sale Sublicensee of Product incorporating or utilizing
RECAF Technology and/or RECAF Materials in a country without a
Valid Claim that covers such Product, and continuing for the
duration of the applicable sublicense agreement by and between
Xxxxxx and such Commercial Sale Sublicensee, Xxxxxx shall make a
royalty payment to BioCurex of * for the Commercial Sale by such
Commercial Sale Sublicensee of each unit of such Product in such
country.
15
4.7. Royalty Abatement and Rebate. In the event the manufacture, use or
Commercial Sale of Product shall be determined not to be covered by a
Valid Claim in a particular country due to the final, non-appealable
holding of invalidity, unpatentability or unenforceability by a court
or agency of competent jurisdiction, then such country shall be deemed
a Non-Valid Claim Country, and as of the date of such final,
non-appealable holding by such court or agency of competent
jurisdiction, Xxxxxx shall owe royalty payments in accordance with
Section 4.5 and Section 4.6(c), as applicable, for the Commercial Sale
of Product therein. Subject to Section 8.1, in the event BioCurex
causes such country to be reinstated as a Valid Claim Country, then
Xxxxxx shall resume owing royalty payments in accordance with Section
4.4 and Section 4.6(b), as applicable, for the Commercial Sale of
Product therein.
4.8. No Multiple Royalties. No multiple royalties shall be payable by
Xxxxxx to BioCurex with respect to the same unit of Product regardless
of the number of Valid Claims or patents within Patent Rights which
may cover a Product.
4.9. No Royalties Due on Certain Sales. Xxxxxx shall not be required to pay
any royalties to BioCurex pursuant to this Article 4: (a) on the
commercial sale of Product to BioCurex; (b) on the Commercial Sale of
Product to any Third Party licensed by BioCurex to use such Product;
(c) on the Commercial Sale of Product to end-user customers by a
licensed Third Party distributor of Xxxxxx or its Affiliates, provided
that Xxxxxx has already paid to BioCurex the applicable royalties due
and owing pursuant to Article 4 based upon the Commercial Sale of such
Product by Xxxxxx or its Affiliates to such Third Party licensed
distributor; (d) commercial sale of Product by a Third Party
manufacturer of Product to Xxxxxx or its Affiliates; or (e) the
Commercial Sale of ASR to a Third Party reference laboratory or
similar entity (subject to the limitations set forth in Section
1.7(a)).
4.10. Payment of Third Party Royalties by Xxxxxx. The Parties agree that if
Xxxxxx is required to take an additional Third Party license specific
to the Field of Use so that it may make, have made and/or use Patent
Rights, RECAF Technology or RECAF Material, or to make, have made,
use, import, offer to sell or sell Product, then the royalties to be
paid to BioCurex pursuant to this Article 4 shall be reduced by the
amount paid pursuant to said Third Party license, provided that such
reduction shall not exceed fifty percent (50%).
5. PAYMENTS AND REPORTING.
5.1. Place and Payment of Royalties.
16
(a) Within sixty (60) days following the end of each Calendar Quarter
during the Term, Xxxxxx shall pay to BioCurex, earned royalties
pursuant to Article 4 for each such Product during such Calendar
Quarter. All royalty payments due BioCurex shall be payable in
U.S. Dollars in check or wire transfer to an account identified
by BioCurex at least three (3) days prior to payment. For
Commercial Sales made in a currency other than U.S. Dollars,
payments and royalties payable under this Agreement shall be
determined using Xxxxxx'x standard conversion methodology, which
is consistent with generally acceptable accounting principles.
(b) If any country in the Territory restricts the amount payable on
the Commercial Sales of Product in such country, the amount due
hereunder shall not exceed the maximum amount payable, under
applicable laws, regulations or administrative rulings of such
country.
5.2. Taxation of Payments and Royalties. If any taxes are imposed on Xxxxxx
for any payments accruing to BioCurex under this Agreement, such taxes
shall be for the account of BioCurex, and when paid by Xxxxxx to the
proper taxing authority out of the applicable BioCurex royalty, proof
in evidence of such payment shall be secured and sent to BioCurex
together with official or other appropriate evidence issued by the
appropriate governmental authority. All taxes levied on BioCurex's
income arising from this Agreement shall be borne by BioCurex. The
Parties shall take steps consistent with current commercial practices
to: (a) avoid or minimize any such withholding; and (b) take advantage
of such double taxation avoidance agreements as may be available.
5.3. Payment Reports. With each quarterly payment made under Section 5.1,
Xxxxxx shall deliver a full and accurate accounting of all relevant
Commercial Sales for each Product for the preceding Calendar Quarter.
Each such report shall include at least the following information: (a)
Commercial Sales of such Product expressed in U.S. Dollars; and (b)
Xxxxxx'x computation of the aggregate payments and earned royalties
payable to BioCurex applicable for such Product.
5.4. Records; Audit Rights. Xxxxxx shall maintain at its principal place of
business accurate, complete and up to date records in sufficient
detail to enable the royalties payable by Xxxxxx to be determined.
BioCurex shall have the right, at its own expense and during regular
business hours, within two (2) years after the royalty period to which
such records relate, during the term of this Agreement and for a
period of one (1) year thereafter, to have such records examined by an
independent accountant selected by BioCurex to whom Xxxxxx has no
reasonable objection for the purpose of verifying the reports and
payments. The accountant shall disclose to BioCurex or to any Third
Party only information relating to the accuracy or reports and
payments being made. If BioCurex establishes that, as a result of an
error in such a report, Xxxxxx has failed to pay BioCurex at least
ninety-five percent (95%) of the full amount of earned royalty due and
payable under this Agreement, the cost, up to a maximum of twenty
thousand dollars ($20,000), of such inspection shall be paid by
Xxxxxx.
17
6. TERM AND TERMINATION.
6.1. Term. Unless earlier terminated in accordance with the provisions
hereof, the term of this Agreement (hereinafter, the "Term") shall
commence on the Effective Date and shall expire on the last to occur
of either: (a) the date of expiration of the last to expire patent
contained within Patent Rights (hereinafter, the "Patent Rights
Expiration Date"); (b) the date on which Xxxxxx ceases to incorporate
or utilize RECAF Technology in Product; or (c) the date on which
Xxxxxx ceases to incorporate or utilize RECAF Material in Product.
Upon the occurrence of the Patent Rights Expiration Date, Xxxxxx shall
have a fully paid up license under the Patent Rights, without any
further royalty obligation whatsoever in connection therewith.
6.2. Early Termination by Xxxxxx. On or before the Effective Date of this
Agreement, Xxxxxx shall have the right to immediately terminate this
Agreement at any time. Following the Effective Date, Xxxxxx shall have
the right to terminate this Agreement and surrender the licenses
granted hereunder at any time by giving no less than ninety (90) days
prior written notice to BioCurex. In the event Xxxxxx exercises its
early termination right in accordance with this Section 6.2, it shall
assign, upon BioCurex's request, all of Xxxxxx'x rights and
obligations (other than those obligations incurred by Xxxxxx prior to
the effective date of such assignment) contained in each sublicense
agreement between it and a Commercial Sale Sublicensee (with such
assignment to take place during the ninety (90) day notification
period set forth in the preceding sentence of this Section 6.2),
provided that the applicable Commercial Sale Sublicensee provides it
consent thereto.
6.3. Early Termination by BioCurex. BioCurex may terminate this Agreement
if, and only if, Xxxxxx fails to cure any undisputed non-payment of
royalties due and owing to BioCurex under this Agreement within sixty
(60) days of Xxxxxx'x receipt of written notice from BioCurex of such
default of payment.
6.4. Insolvency. Either Party may terminate this Agreement upon written
notice to the other in the event of (a) insolvency of the other Party,
or the appointment of a receiver by the other Party for all or any
substantial part of its properties, provided that such receiver is not
discharged within sixty (60) days of its appointment; (b) the
adjudication of the other Party as bankrupt; (c) the admission by the
other Party in writing of its inability to pay its debts as they
become due; (d) the execution by the other Party of an assignment for
the benefit of its creditors; or (e) the filing by the other Party of
a petition to be adjudged as bankrupt, or a petition or answer
admitting the material allegations of a petition filed against the
other party in any bankruptcy proceeding, or the acts of the other
Party to any other judicial proceeding intended to effect a discharge
of the debts of the other Party, in whole or in part.
18
6.5. Survival of Certain Provisions. Expiration or early termination of
this Agreement shall not relieve either Party of its obligations
incurred prior to expiration or early termination. The following
provisions shall survive expiration or early termination of this
Agreement or of any extensions thereof: Article 1 (Definitions);
Section 6.5 (Survival of Certain Obligations), Section 6.6 (Remaining
Inventory); Article 7 (Confidentiality); Section 8.4 (Infringement of
Third Party Patents; Indemnification by BioCurex); Section 8.5 (Joint
Inventions); Article 10 (Representations and Warranties); Article 10
(General Indemnification); Section 12.4 (Dispute Resolution); Section
12.8 (Entire Agreement); and Section 12.9 (Governing Law). Any other
provisions of this Agreement contemplated by their terms to pertain to
a period of time following termination or expiration of this Agreement
shall survive for the specified period of time only.
6.6. Remaining Inventory of Product. Upon termination of this Agreement for
any reason whatsoever, each of Xxxxxx, its Affiliates, its Third Party
distributors and Commercial Sale Sublicensees hereunder shall have the
right to sell any remaining inventory of Product it may have, provided
that Xxxxxx fulfills its royalty obligations applicable to such
Product in accordance with provisions of Article 4.
7. CONFIDENTIAL INFORMATION.
7.1. Confidentiality. The Parties acknowledge that each of them and their
Affiliates will exchange Confidential Information pertaining to their
performance hereunder, and the disclosure and use of any Confidential
Information shall be governed by the provisions of this Article 7.
Each Party shall use Confidential Information of the other Party only
for the purpose of accomplishing the activities contemplated by this
Agreement. Each Party shall not disclose such Confidential Information
to a Third Party except in accordance with the provisions of this
Agreement. The Parties shall ensure that their Affiliates keep all
Confidential Information exchanged hereunder confidential in
accordance with the provisions hereof as though the Affiliates were
parties hereto.
7.2. Permitted Disclosures. Notwithstanding Section 7.1, nothing contained
in this Agreement shall preclude BioCurex or Xxxxxx from utilizing or
disclosing to Third Parties its Confidential Information or utilizing
Confidential Information received from the other Party as may be
required: (a) for regulatory purposes, including regulatory filings
required to obtain FDA or other governmental approvals subject to
requesting confidential treatment; (b) for audit, tax or customs
purposes subject to requesting confidential treatment; (c) for
purposes of preparing and filing patent applications consistent with
the terms of this Agreement; or (d) by law or judicial order, or
request by a Regulatory Authority, with the consent of the other
Party, which consent shall not be withheld unreasonably. With respect
to any trade secrets, the consent of the disclosing Party shall be
required before any disclosure of such trade secret, which consent
shall not be withheld unreasonably. Furthermore:
19
(x) Xxxxxx shall be permitted to utilize or disclose to a Third Party
its Confidential Information or utilize Confidential Information
received from the other Party to the extent required for (i) such
Third Party to undertake Research and Development activities on
behalf of Xxxxxx, (ii) Xxxxxx to negotiate and enter into a
sublicense agreement with such Third Party, and/or (iii) Xxxxxx
to market Product or make Commercial Sales thereof to such Third
Party, provided that such Third Party agrees to maintain the
confidentiality of such Confidential Information to the same
extent required by Parties under this Article 7; and
(y) BioCurex shall be permitted to utilize or disclose to a
prospective Third Party Semi-Exclusive Licensee (in the course of
negotiating the license agreement between it and such prospective
Third Party Semi-Exclusive Licensee) Confidential Information
specifically pertaining and limited to (i) the semi-exclusive
nature of this Agreement, (ii) the limitation set forth in
Section 2.1(b) of this Agreement permitting BioCurex to grant
licenses under the Patent Rights, RECAF Technology and RECAF
Material in the Field of Use in the Territory to only a limited
number of Third Party Semi-Exclusive Licensees, and/or (iii)
Xxxxxx'x exclusive right to grant sublicenses to Commercial Sale
Sublicensees (as set forth in Section 2.2 of this Agreement),
provided that under no circumstances shall BioCurex disclose to
such prospective Third Party Semi-Exclusive Licensee the
financial terms contained herein, and such prospective Third
Party Semi-Exclusive Licensee agrees to maintain the
confidentiality of such Confidential Information to the same
extent required by Parties under this Article 7.
7.3. Publication. Neither Party shall publish or make any presentation
regarding any information disclosed to it hereunder unless such
publication has been reviewed and approved by the other Party at least
sixty (60) days prior to its submission for publication. If requested,
each party shall allow the other Party a reasonable period of time to
seek patent protection before submitting such proposed disclosure for
publication. Such approval by the other Party shall not be required if
such information has been published previously, is in the public
domain without breach of this Agreement, or was approved or published
in writing previously in substantially the same format.
7.4. Public Announcements. Neither Party shall make any public
announcements concerning the existence of this Agreement or the terms
and conditions of this Agreement, nor make any public statement which
includes the name of the other Party or any of its Affiliates, or
otherwise use the name of the other Party or any of its Affiliates in
any public statement or document, without the prior written consent of
the other Party. No public announcement relating to the signing of
this Agreement shall be issued by either Party, without the prior
written consent of the other Party. The foregoing shall not apply to
required public releases necessary for compliance with applicable
20
governmental requirements in which case the Parties will consult with
each other and take into consideration the comments of the other Party
on the wording and timing of any required public announcement.
8. PATENT RIGHTS.
8.1. Patent Procurement and Maintenance. BioCurex shall secure and maintain
the Patent Rights throughout the Territory in such countries and in
such manner as BioCurex shall elect after reasonable consideration of
the views of Xxxxxx and BioCurex's other licensees. BioCurex shall pay
all costs associated with the filing, prosecution and maintenance of
Patent Rights. BioCurex shall notify Xxxxxx of any change in the
status of any patent and/or patent application listed in Exhibit 1.14,
including any abandonment, lapse, invalidity, unenforceability,
nullification or revocation thereof, and of the filing of any patent
applications within the scope of the Patent Rights within sixty (60)
days. Exhibit 1.14 shall be updated by BioCurex at least one (1) time
per Calendar Year to reflect such changes. In the event any of the
Patent Rights shall become involved in an opposition or interference
proceeding, BioCurex shall manage the proceeding, at its own expense,
and shall keep Xxxxxx informed and shall take Xxxxxx'x views into
account in setting BioCurex's strategy in the proceeding. If BioCurex
wishes to abandon an existing issued patent or any pending patent
application within the Patent Rights, it shall notify Xxxxxx within a
time sufficient for Xxxxxx to familiarize itself with the case and
make a decision before abandoning or failing to pursue the Patent
Rights. Xxxxxx shall have thirty (30) days from the date of such
notice within which it may notify BioCurex that Xxxxxx wishes to
assume the costs of prosecuting or maintaining any such patent or
patent application. If Xxxxxx elects to assume such costs, BioCurex
shall assign the relevant patent(s) or patent application(s) to
Xxxxxx. The claims of (a) any patent assigned to and maintained by
Xxxxxx and (b) any patent issuing from a patent application assigned
to and prosecuted by Xxxxxx shall not be considered Valid Claims, or
for purposes of determining the terms pursuant to which royalties
shall be paid by Xxxxxx to BioCurex under Article 4.
8.2. Xxxxxx Improvements; BioCurex Improvements. Xxxxxx shall have the
right to file, prosecute and maintain patents for any Improvement
developed solely by Xxxxxx (hereinafter, an "Xxxxxx Improvement").
Xxxxxx shall notify BioCurex within sixty (60) days following the
submission of a filing for a patent based on an Xxxxxx Improvement.
BioCurex shall have the right to prosecute and maintain patents for
any Improvement developed solely by BioCurex (hereinafter, a "BioCurex
Improvement"). BioCurex shall notify Xxxxxx within sixty (60) days
following the submission of a filing for a patent based on a BioCurex
Improvement. For purposes of clarification, any Improvement jointly
developed by Xxxxxx and BioCurex shall be governed by the provisions
set forth under Section 8.6.
8.3. Patent Marking. Xxxxxx, space-permitting, may xxxx each Product (or
its container or package) made on or on behalf of Xxxxxx with the
patent number of any issued or pending patent(s) included in the
Patent Rights. The content, form, location and language used for such
21
marking shall be: (a) in accordance with the laws and practices of
each country in which Product is sold or the patents have been issued
or are pending; and (b) in accordance with Xxxxxx'x marking
preferences.
8.4. Third Party Infringement of Patent Rights. In the event that a Party
has reason to believe that a Third Party may be infringing any of the
patents included in Patent Rights by the Third Party's manufacture,
use, sale or importation of an infringing product in the Territory,
such Party shall promptly notify the other Party. BioCurex may, in its
sole discretion, elect to enforce the Patent Rights, through legal
action or other wise. Xxxxxx, at BioCurex's request and at BioCurex's
expense, shall reasonably cooperate with BioCurex in such enforcement.
In the event that BioCurex requests the assistance of Xxxxxx and
Xxxxxx requires the assistance of outside counsel, Xxxxxx shall so
advise BioCurex promptly and, after BioCurex's approval, Xxxxxx shall
have the right to retain outside patent counsel of its choice at
BioCurex's expense; provided, however, that BioCurex shall have the
right to review all invoices associated therewith, and discontinue
such outside patent counsel assistance immediately upon notice to
Xxxxxx hereunder. BioCurex shall be responsible for any costs
associated with such suit and/or settlement, and shall be entitled to
retain any and all recovery which may be obtained in any suit brought
by BioCurex. If such settlement involves any material admission(s) by
BioCurex relating to such suit, BioCurex shall use its reasonable best
efforts to ensure that confidential treatment of all its material
admissions. BioCurex hereby agrees that it shall not make any material
admission relating to Patent Rights without the prior written consent
of Xxxxxx, which consent shall not be withheld unreasonably.
(a) In the event (i) BioCurex does not within one hundred eighty
(180) days after notice of the possible infringement of the
Patent Rights is given between BioCurex and Xxxxxx, cause such
possible infringement to cease (as determined by a final,
non-appealable judgment), and (ii) such possible infringer holds
at least five percent (5%) of the relevant market share
pertaining to the possibly infringing product, then such country
in which such possible infringement may exist shall be deemed a
Non-Valid Claim Country and Xxxxxx'x royalty payment obligations
under Article 4 shall be adjusted accordingly. At such time as
BioCurex can establish that such infringement has been abated (as
determined by a final, non-appealable judgment), Xxxxxx shall
resume paying royalties to BioCurex applicable to a Valid Claim
Country as set forth in Article 4.
(b) In the event that BioCurex does not commence activities to
enforce diligently the Patent Rights within ninety (90) days
after notice of the possible infringement of the Patent Rights is
given between BioCurex and Xxxxxx, Xxxxxx may, in its sole
discretion, institute suit and diligently pursue such suit at its
expense to prevent continuation of such alleged potential
infringement. BioCurex agrees to serve as a nominal party if its
presence is legally required and sign any papers necessary to
support any litigation. In addition BioCurex shall reasonably
cooperate with Xxxxxx in such suit at Xxxxxx'x request and at
Xxxxxx'x expense. Xxxxxx shall be entitled to retain any recovery
22
that may be obtained in any suit brought by Xxxxxx. Xxxxxx hereby
agrees that it shall not make any material admission relating to
Patent Rights without the prior written consent of BioCurex,
which consent shall not be withheld unreasonably.
23
8.5 Infringement of Third Party Patents; Indemnification by BioCurex.
(a) Notice and Cooperation. If a claim or suit is brought against
Xxxxxx alleging infringement of a patent owned by a Third Party
arising from Xxxxxx'x manufacture, use, sale or importation of
Product, Xxxxxx shall promptly give written notice to BioCurex of
such claim or suit and provide to BioCurex information in
Xxxxxx'x possession regarding such claim or suit.
(b) Patent Indemnification by BioCurex. BioCurex shall defend,
indemnify and hold harmless Xxxxxx and its Affiliates and their
officers, directors, employees and representatives, from and
against any judgment, damage, liability, loss, cost or other
expense (including reasonable attorneys' fees and court costs)
resulting from any claim, suit or proceeding so far and to the
extent that such claim, suit or proceeding is based upon an
assertion that RECAF Technology used in Product constitutes an
infringement of any patent, copyright, trademark or any other
intellectual property right of a Third Party, except and to the
extent in which the alleged infringement relates to (i) a
manufacturing process, or (ii) the circumstances specifically set
forth in Section 8.7(b); provided, that Xxxxxx shall provide
BioCurex such reasonable assistance as BioCurex, from time to
time, may reasonably request.
(c) Settlement. BioCurex shall have the right to dispose of a claim
or conduct the defense of a suit for which it is obligated to
indemnify Xxxxxx pursuant to this Section 8.5.
(d) Patent Infringement Defense by Xxxxxx. In the event that BioCurex
elects not to dispose of such claim or defend such suit to the
extent set forth in this Section 8.5, Xxxxxx may, in its sole
discretion, defend the claim or suit. For the purposes of
Xxxxxx'x conduct of the disposition or defense, BioCurex shall
furnish to Xxxxxx such reasonable assistance as Xxxxxx may need
and from time to time reasonably request. If Xxxxxx takes on the
disposition of a claim or defense of a suit for which BioCurex is
obligated to indemnify Xxxxxx pursuant to Section 8.5, then the
cost of defense and settlement shall be paid by BioCurex.
8.6. Joint Inventions. All inventions jointly made or conceived by
employees or others acting on behalf of Xxxxxx and BioCurex during the
Term of this Agreement (hereinafter, a "Joint Invention") shall be
jointly owned by both Parties. Each Party shall have the right to
independently exploit such Joint Invention, provided that such Joint
Invention does not pertain to Patent Rights, RECAF Technology or RECAF
Materials. In the event such Joint Invention does pertain to Patent
Rights, RECAF Technology or RECAF Materials, the treatment of such
Joint Invention shall be consistent with the terms and conditions set
forth in this Agreement. All costs associated with: (x) filing,
prosecuting and maintaining such patents and patent applications
covering Joint Inventions; and (y) enforcing such patents against
Third Party infringers shall be shared equally by both Parties. Both
Parties shall cooperate and discuss the strategy regarding the filing,
24
prosecution and maintenance of patent applications and patents
covering Joint Inventions. The Parties will mutually agree who will be
responsible for filing, prosecution and maintenance of a particular
patent or patent application and enforcement of such patent against
Third Party infringers based upon which Party's inventors have made
the greatest contribution. The Party that is responsible for such
filing, prosecution and maintenance shall make a good faith effort to
perform such activities in a reasonable and cost-effective manner. If
the Parties cannot reach agreement, the dispute may be submitted to
Alternative Dispute Resolution as provided for in Section 12.4. Both
Parties shall be given the opportunity to review and comment upon the
patent applications prepared by the other covering Joint Inventions.
Each Party shall provide the other Party with timely copies of all
substantive communications to or from all public authorities having
jurisdiction over all such patents and patent applications for which
it has responsibility. Either Party may be relieved of its future
obligations to undertake or underwrite the cost, as the case may be,
to file, prosecute, maintain, and enforce any such patent or patent
application in any country by assigning such rights to the other Party
and have no further obligation for any prosecution, maintenance,
enforcement, cost and expenses of any patent or patent application in
such country, covering such Joint Invention, except as to costs and
expenses that have accrued prior to such assignment. The Party that
becomes solely responsible for all future obligations of such patent
or patent application in accordance with the preceding sentence of
this Section 8.6 shall be the sole owner of such patent or patent
application in such country.
8.7. Legal Action between Xxxxxx and the Third Party Semi-Exclusive
Licensee.
(a) BioCurex shall remain neutral upon the occurrence of any legal
action between Xxxxxx and a Third Party Semi-Exclusive Licensee
relating to the Patent Rights, RECAF Technology and/or RECAF
Materials; provided that BioCurex shall have the right to become
involved in any such legal action to the extent required by any
court or other government order.
(b) BioCurex shall have no obligation, in accordance with Section
8.5(b), to defend, indemnify and hold harmless Xxxxxx and its
Affiliates from any judgment, damage, liability, loss, cost or
other expense (including reasonable attorneys' fees and court
costs) resulting from any claim, suit or proceeding so far and to
the extent that such claim, suit or proceeding is based upon an
assertion that an Xxxxxx Improvement constitutes an infringement
of any Improvement developed solely by the Third Party
Semi-Exclusive Licensee.
8.8. Xxxxxx Opposition to Patent Rights. BioCurex shall have the right to
terminate this Agreement, on a country-by-country basis, if Xxxxxx,
after the Effective Date, institutes a suit, nullity action,
opposition to grant, or other legal action seeking to invalidate the
claims of any patent in the Patent Rights in that country, or actively
participates (other than by legal compulsion) in any of the foregoing.
25
9. TRADEMARKS.
9.1. License Grant for BioCurex Marks. During the Term, BioCurex hereby
grants to Xxxxxx, its Affiliates, its distributors and its
sublicensees hereunder a non-exclusive license to use the BioCurex
Marks for Xxxxxx'x marketing, sale, promotion, advertising, testing
and/or distribution of the Product in the Territory. During the Term,
BioCurex shall own all rights, title, and interests in and to the
BioCurex Marks. Xxxxxx, its Affiliates, its distributors and its
sublicensees hereunder shall have the right, but not the obligation,
to use the BioCurex Marks designated by BioCurex on Product and on
marketing and promotional materials and product packaging materials
relating to Product in the Territory. Further, Xxxxxx shall use
commercially reasonable efforts to insert "Sold Under License from
BioCurex Inc." or substantially similar language identifying BioCurex
as the licensor on Xxxxxx'x marketing and promotional materials, and
packaging materials, related to Product, provided that such insertion
is permitted by applicable Regulatory Authorities.
9.2. Xxxxxx Trademarks. Xxxxxx and its Affiliates may develop and use any
Xxxxxx Trademarks for its marketing, sale, promotion, advertising,
testing and/or distribution of the Product in the Territory. All costs
related to the selection and maintenance of the Xxxxxx Trademarks
shall be borne by Xxxxxx, and Xxxxxx shall, at all times, own all
rights, title, and interests in and to such Xxxxxx Trademarks.
9.3. Termination of Use BioCurex Marks. Upon termination of this Agreement,
Xxxxxx, its Affiliates, its distributors and its sublicensees
hereunder shall cease and desist from all further use of the BioCurex
Marks, except that Xxxxxx, its Affiliates, its distributors and its
sublicensees hereunder may continue to use the BioCurex Marks
consistent with the terms and conditions of this Agreement in
connection with any remaining inventory of the Product.
26
10. REPRESENTATIONS AND WARRANTIES.
10.1. By BioCurex. BioCurex represents and warrants that as of the
Effective Date:
(a) to the best of BioCurex's knowledge, BioCurex has all right,
title and interest in and to the Patent Rights, RECAF Technology
and RECAF Material, and is free to disclose, license and
sublicense the RECAF Technology, RECAF Material and all Patent
Rights;
(b) to the best of BioCurex's knowledge, the use of RECAF Technology
and RECAF Material, and the use or practice of Patent Rights by
Xxxxxx as provided herein do not infringe or violate any patent
or other rights of any Third Party;
(c) to the best of BioCurex's knowledge, there are no actions
threatened, or pending before any court, relating to RECAF
Technology, RECAF Material or Patent Rights;
(d) the RECAF Technology, RECAF Material and Patent Rights have not
knowingly been obtained through any activity, omission or
representation that would limit or destroy their validity, and
further that BioCurex has no knowledge or information that would
materially impact the validity and/or enforceability of the
existing RECAF Technology, RECAF Material and Patent Rights; and
(e) BioCurex has no agreement with any Third Party that would
adversely affect the rights of Xxxxxx or the obligations of
BioCurex under this Agreement.
10.2. General Representations and Warranties. Each Party represents and
warrants to the other Party as of the Effective Date that:
(a) it is a corporation duly organized and validly existing under the
laws of its state of incorporation;
(b) it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; and
(c) the execution, delivery and performance by such Party of this
Agreement do not contravene or constitute a default under any
provision of applicable law or of any agreement, judgment,
injunction, order, decree or other instrument binding upon it.
27
11. GENERAL INDEMNIFICATION.
11.1. Indemnification by BioCurex. BioCurex shall indemnify, defend and
hold harmless Xxxxxx and its Affiliates, employees, officers,
directors and agents from and against any Third Party suit,
proceeding, claim, liability, loss, damage, costs or expense,
including reasonable attorneys' fees (collectively, "Liabilities"),
which Xxxxxx may hereinafter incur, suffer, or be required to pay
arising out of or resulting from any breach by BioCurex of the
representations and warranties or other provisions set forth in this
Agreement. Notwithstanding the above, BioCurex shall not be liable for
Liabilities of any kind which arise out of or are attributable to any
gross negligence or willful misconduct of Xxxxxx or its Affiliates and
their officers, directors, employees or representatives.
11.2. Indemnification by Xxxxxx. Xxxxxx shall indemnify, defend, and hold
harmless BioCurex from and against any Liabilities that BioCurex may
hereinafter incur, suffer or be required to pay arising out of or
resulting from any breach by Xxxxxx of the representations and
warranties or other provisions set forth in this Agreement, or any
acts or omissions by Xxxxxx or its Affiliates directly relating to the
manufacture, distribution or sale of Product by Xxxxxx or its
Affiliates. Notwithstanding the above, Xxxxxx shall not be liable for
Liabilities of any kind which arise out of or are attributable to any
gross negligence or willful misconduct of BioCurex or its Affiliates
and their officers, directors, employees or representatives.
11.3. Notice and Cooperation Requirements. With respect to any claim for
which a Party seeks indemnification from the other hereunder, the
Party seeking indemnification shall provide prompt notice to the other
of the claim for which indemnification is sought, shall provide
reasonable cooperation and assistance to the indemnifying Party in the
defense of such claim, and shall not settle or otherwise compromise
such claim without the indemnifying party's prior written consent.
Further, in the event a Third Party legal action arising out of any
act or omission by a Commercial Sale Licensee with respect to Product
is brought against BioCurex, Xxxxxx hereby agrees that it shall use
commercially reasonable efforts to provide BioCurex with consultative
assistance and other relevant guidance in connection with the defense
of such Third Party legal action.
11.4. LIMITATION OF LIABILITY. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY HEREUNDER
FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES
WHATSOEVER, INCLUDING LOST PROFITS.
28
12. MISCELLANEOUS.
12.1. Notices. All notices hereunder shall be in writing and shall be, (a)
delivered personally, (b) mailed by registered or certified mail,
postage prepaid, (c) sent by a nationally recognized overnight
courier, or (d) sent by facsimile or express mail, to the following
addresses of the respective Parties:
If to BioCurex:
BioCurex Inc.
000-0000 Xxxxx Xxxx
Xxxxxxxx, XX, Xxxxxx X0X 0X0
Attn: Chief Executive Officer
Facsimile Number: (000) 000-0000
If to Xxxxxx:
X-0XX XX0X
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx XXX 00000-0000
Attn: Director, Global Licensing; Diagnostics Division
Facsimile Number: (000) 000-0000
With copy to:
X-000 XX0X
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx XXX 00000-0000
Attn: Divisional Vice President, Domestic Legal Division
Facsimile Number: (000) 000-0000
Notice shall be effective: (i) upon receipt if personally delivered,
(ii) on the third business day following the date of mailing if sent
by registered or certified mail; (iii) on the second business day
following the date of delivery to the express mail service if sent by
express mail; and (iv) on the first business day following the date
transmission or delivery to the overnight courier if sent by
facsimile or overnight courier. A Party may change its address listed
above by sending notice to the other Party.
12.2. Assignment. Neither Party may assign its rights or obligations under
this Agreement without the prior written consent of the other Party,
which consent shall not be unreasonably withheld; provided, however,
that either Party may assign this Agreement, in whole or in part,
without such consent, to its Affiliate; and provided, further, that
assigning Party shall promptly notify the other Party of any such
29
assignment. Any permitted assignee shall assume all obligations of its
assignors under this Agreement. No assignment shall relieve any Party
of responsibility for the performance of any obligation that such
Party may have or incur hereunder.
12.3. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of each of the Parties and its successors and permitted
assigns.
12.4. Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be resolved
through the alternative dispute resolution procedure described on
Exhibit 12.4.
12.5. Relationship of the Parties. The relationship of the Parties under
this Agreement is that of independent contractors. Nothing contained
in this Agreement shall be construed so as to constitute the Parties
as partners, joint venturers, or agents of the other. Neither Party
nor its Affiliates has any express or implied right or authority under
this Agreement to assume or create any obligations or make any
representations or warranties on behalf of or in the name of the other
Party or its Affiliates.
12.6. Waiver or Modification of Agreement. No waiver or modification of any
of the terms of this Agreement shall be valid unless in writing and
signed by authorized representatives of both Parties. Failure by
either Party to enforce any of its rights under this Agreement shall
not be construed as a waiver of such rights nor shall a waiver by
either Party in one (1) or more instances be construed as constituting
a continuing waiver or as a waiver in other instances.
12.7. Severability. If any term or provision of this Agreement for any
reason shall be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any
other term or provision hereof, and this Agreement shall be
interpreted and construed as if such term or provision, to the extent
the same shall have been held to be invalid, illegal or unenforceable,
had never been contained herein.
12.8. Entire Agreement. This Agreement including the Exhibits, which are
incorporated herein by reference, sets forth the entire understandings
of the Parties concerning the subject matter hereof and supersedes all
written or oral prior agreements or understandings with respect
thereto.
12.9. Governing Law. This Agreement and the legal relations between the
Parties hereunder shall be construed, interpreted and governed by laws
of the State of New York, without regard to its choice of law
principles. The Parties expressly disclaim the application of the
United Nations Convention on the International Sales of Goods to this
Agreement.
12.10. Interpretation. When a reference is made in this Agreement to
Articles, Sections or Exhibits, such reference shall be to am Article,
Section or Exhibit to this Agreement unless otherwise indicated. The
30
words "include," "includes" and "including" when used herein shall be
deemed in each case to be followed by the words "without limitation."
Use of any gender herein to refer to any person shall be deemed to
comprehend masculine, feminine and neuter unless the context clearly
requires otherwise.
12.11. Counterparts. This Agreement may be executed in two (2) original
counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same instrument.
12.12. Mutual Drafting. This Agreement is the joint product of Abbott and
BioCurex, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the Parties and their
respective legal counsel and advisers and any rule of construction
that a document shall be interpreted or construed against the drafting
Party shall not be applicable.
IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by
its duly authorized representatives as of the day and year below written.
Xxxxxx Laboratories BioCurex Inc.
Signature /s/ Xxxxxx X Xxxxxxx, Xx. Signature /s/ Xxxxxxx Xxxx
------------------------- -----------------------
Name: Xxxxxx X. Xxxxxxx, Xx. Name: Xx. Xxxxxxx Xxxx
Title: Sr. Vice President, Title: President and CEO
Diagnostic Operations
President, Diagnostics Division
Date Date
------------------------------ -----------------------------
31
SCHEDULE OF EXHIBITS
1.14 Patent Rights
4.2 Feasibility Review
12.4 Alternative Dispute Resolution
EXHIBIT 1.14
PATENT RIGHTS
U.S. U.S.10/688,464 app, continuation of U.S. Patent 6,514,686
Russia 2161042 Patent
Finland 970990 app (identified in Inpadoc as 9700990)
Canada 2,197,490 app
Norway 19971256 app
EPO 95940906.1 app
China 200310104769.x app (identified in Inpadoc as 1132012),
continuation of Patent 95195125.4 (identified in Inpadoc as
0000000)
Japan HEI. 8-510734 app (identified in Inpadoc as JP 11511847)
Brazil PI 9508959-4 app
Australia 2003204325 app (identified in Inpadoc as 9537648 A1),
continuation of 714966 Patent
33
EXHIBIT 4.2
FEASIBILITY REVIEW
The Feasibility Review is a review conducted by an Abbott management team of any
immunoassay product in development to confirm that such product meets its key
draft product requirements. The Feasibility Review hereunder shall involve the
performance evaluation of three (3) prototype lots RECAF assays manufactured in
a site approved by the applicable Abbott management team. Successful evaluation
of such prototype lots will be based on prototype assay performance versus key
draft product requirements. Performance evaluation will include internal and
external evaluation and will require testing a predefined number of clinical
specimens. The Feasibility Review shall be completed upon obtaining objective
evidence that the assay format using the prototype assay lots made by the
development site meets the key draft product requirements. Abbott shall notify
BioCurex within fifteen (15) days of the completion of the Feasibility Review as
described in this Exhibit 4.2.
34
EXHIBIT 12.4
ALTERNATIVE DISPUTE RESOLUTION
The parties recognize that bona fide disputes as to certain matters may arise
from time to time during the term of this Agreement which relate to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution ("ADR") provision, a party first must send
written notice of the dispute to the other party for attempted resolution by
good faith negotiations between their respective presidents (or their
equivalents) of the affected subsidiaries, divisions, or business units within
twenty-eight (28) days after such notice is received (all references to "days"
in this ADR provision are to calendar days).
If the matter has not been resolved within twenty-eight (28) days of the notice
of dispute, or if the parties fail to meet within such twenty-eight (28) days,
either party may initiate an ADR proceeding as provided herein. The parties
shall have the right to be represented by counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the
other party of the issues to be resolved by ADR, including the specific
provisions of the Agreement in issue. Within fourteen (14) days after its
receipt of such notice, the other party may, by written notice to the party
initiating the ADR, add additional issues to be resolved within the same
ADR.
2. Within twenty-one (21) days following receipt of the original ADR notice,
the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are
unable to agree on a mutually acceptable neutral within such period, either
party may request the President of the CPR Institute for Dispute Resolution
("CPR"), 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to
select a neutral pursuant to the following procedures:
(a) The CPR shall submit to the parties a list of not less than five (5)
candidates within fourteen (14) days after receipt of the request,
along with a Curriculum Vitae for each candidate. No candidate shall be
an employee, director, or shareholder of either party or any of their
subsidiaries or affiliates.
(b) Such list shall include a statement of disclosure by each candidate of
any circumstances likely to affect his or her impartiality.
(c) Each party shall number the candidates in order of preference (with the
number one (1) signifying the greatest preference) and shall deliver
the list to the CPR within seven (7) days following receipt of the list
of candidates. If a party believes a conflict of interest exists
regarding any of the candidates, that party shall provide a written
explanation of the conflict to the CPR along with its list showing its
order of preference for the candidates. Any party failing to return a
list of preferences on time shall be deemed to have no order of
preference.
35
(d) If the parties collectively have identified fewer than three (3)
candidates deemed to have conflicts, the CPR immediately shall
designate as the neutral the candidate for whom the parties
collectively have indicated the greatest preference, excluding any
candidate deemed by a party to have conflicts. If a tie should result
between two candidates, the CPR may designate either candidate. If the
parties collectively have identified three (3) or more candidates
deemed to have conflicts, the CPR shall review the explanations
regarding conflicts and, in its sole discretion, may either (i)
immediately designate as the neutral the candidate for whom the parties
collectively have indicated the greatest preference, or (ii) issue a
new list of not less than five (5) candidates, in which case the
procedures set forth in subparagraphs 2(a) - 2(d) shall be repeated.
3. No earlier than twenty-eight (28) days or later than fifty-six (56) days
after selection, the neutral shall hold a hearing to resolve each of the
issues identified by the parties. The ADR proceeding shall take place at a
location agreed upon by the parties. If the parties cannot agree, the
neutral shall designate a location other than the principal place of
business of either party or any of their subsidiaries or affiliates.
4. At least seven (7) days prior to the hearing, each party shall submit the
following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely in any oral
or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the hearing, and
a short summary of the anticipated testimony of each witness;
(c) a proposed ruling on each issue to be resolved, together with a request
for a specific damage award or other remedy for each issue. The
proposed rulings and remedies shall not contain any recitation of the
facts or any legal arguments and shall not exceed one (1) page per
issue.
(d) a brief in support of such party's proposed rulings and remedies,
provided that the brief shall not exceed twenty (20) pages. This page
limitation shall apply regardless of the number of issues raised in the
ADR proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery
shall be required or permitted by any means, including depositions,
interrogatories, requests for admissions, or production of documents.
5. The hearing shall be conducted on two (2) consecutive days and shall be
governed by the following rules:
36
(a) Each party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each party has
had the five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or
other evidence, to cross-examine witnesses, and to make a closing
argument. Cross-examination of witnesses shall occur immediately after
their direct testimony, and cross-examination time shall be charged
against the party conducting the cross-examination.
(c) The party initiating the ADR shall begin the hearing and, if it chooses
to make an opening statement, shall address not only issues it raised
but also any issues raised by the responding party. The responding
party, if it chooses to make an opening statement, also shall address
all issues raised in the ADR. Thereafter, the presentation of regular
and rebuttal testimony and documents, other evidence, and closing
arguments shall proceed in the same sequence.
(d) Except when testifying, witnesses shall be excluded from the hearing
until closing arguments.
(e) Settlement negotiations, including any statements made therein, shall
not be admissible under any circumstances. Affidavits prepared for
purposes of the ADR hearing also shall not be admissible. As to all
other matters, the neutral shall have sole discretion regarding the
admissability of any evidence.
6. Within seven (7) days following completion of the hearing, each party may
submit to the other party and the neutral a post-hearing brief in support
of its proposed rulings and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed ten (10) pages.
This page limitation shall apply regardless of the number of issues raised
in the ADR proceeding.
7. The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its
entirety the proposed ruling and remedy of one of the parties on each
disputed issue but may adopt one party's proposed rulings and remedies on
some issues and the other party's proposed rulings and remedies on other
issues. The neutral shall not issue any written opinion or otherwise
explain the basis of the ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the fees
and expenses of a court reporter, and any expenses for a hearing room,
shall be paid as follows:
(a) If the neutral rules in favor of one party on all disputed issues in
the ADR, the losing party shall pay 100% of such fees and expenses.
(b) If the neutral rules in favor of one party on some issues and the other
party on other issues, the neutral shall issue with the rulings a
written determination as to how such fees and expenses shall be
allocated between the parties. The neutral shall allocate fees and
expenses in a way that bears a reasonable relationship to the outcome
of the ADR, with the party prevailing on more issues, or on issues of
greater value or gravity, recovering a relatively larger share of its
legal fees and expenses.
9. The rulings of the neutral and the allocation of fees and expenses shall be
binding, non-reviewable, and non-appealable (except in the case of fraud or
bad faith on the part of the neutral), and may be entered as a final
judgment in any court having jurisdiction.
10. Except as provided in paragraph 9 or as required by law, the existence of
the dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings, and briefs), and the
rulings shall be deemed Confidential Information (except for information
contained in exhibits or testimony that is already public or later becomes
public through no fault of the parties or which is lawfully disclosed to a
party through an independent third party). The neutral shall have the
authority to impose sanctions for unauthorized disclosure of Confidential
Information.
