Exhibit 10.14
JOINT VENTURE AGREEMENT BETWEEN
XXXXX RESEARCH SDN. BHD., SARAWAK
AND
MEDICHEM RESEARCH INC., USA
DECEMBER, 1996
AGREEMENT
THIS AGREEMENT is made the 21st day of December, 1996
BETWEEN:
(1) XXXXX RESEARCH SENDIRIAN BERHAD a company incorporated in Sarawak,
Malaysia under the Companies Xxx, 0000, whose registered office is at
Levels 5, 8 and 12, Xxxxx Xxxxx, Xxxxx Xxxxx, 00000 Xxxxxxx, Xxxxxxx
and a place of business at Xxx 0000 Xxxxx 00, Xxxxx Xxxxxxxxx, 00000
Xxxxxxx, Xxxxxxx (hereinafter referred to as "XXXXX") of the one part
and
(2) MEDICHEM RESEARCH INC. a company organised and incorporated under the
laws of the United States of America and State of Illinois, with a
place of business at 00000 Xx. Xxx Xxxxxx, Xxxxxx, XXXXXXXX 00000,
Xxxxxx Xxxxxx of America (hereinafter referred to as "MEDICHEM") of
the other part.
WHEREAS
(1) XXXXX is the duly authorised agent for and on behalf of the Government
of the State of Sarawak, Malaysia ("the State Government") where the
species of Callophylum plants from which the COMPOUND known
scientifically as (+) - Calanolide A (hereinafter referred to as "the
said COMPOUND") is isolated; and XXXXX, therefore, enters into this
Agreement for and on behalf of the State Government;
(2) MEDICHEM is primarily engaged in research and early stage development
of therapeutic agents. MEDICHEM has title or has the exclusive
licenses to the following patents and patent applications relating to
the COMPOUND which are potent inhibitors of Human Immunodeficiency
Virus (HIV) reverse transcriptase and intermediates, namely:
(a) MediChem U.S. Patent No. 5,489,697; 1996 - METHOD FOR THE
PREPARATION OF (+)-CALANOLIDE A AND INTERMEDIATES THEREOF
(Boulanger, Flavin, et al.).
(b) MediChem U.S. Patent Application No. 08/510,213; 1995, and
International Application No. PCT/US95/09804; 1995 - METHOD
FOR THE PREPARATION OF (+)-CALANOLIDE A AND INTERMEDIATES
THEREOF (Flavin, Xu, et al.).
(c) MediChem U.S. Patent Application No.08/609,537; 1996 - METHOD
FOR THE PREPARATION OF (+)-CALANOLIDE A ANDANALOGUES THEREOF
(Flavin, Xu, et al).
(d) NCI U.S. Patent Application No.08/065,618; 1993 - CALANOLIDE
AND RELATED ANTIVIRAL COMPOUNDS, COMPOSITIONS, AND USES
THEREOF (Boyd, Cardellina, et al.).
(e) NCI International Patent Application No. PCT/US94/05658; 1995
- CALANOLIDE AND RELATED ANTIVIRAL COMPOUNDS, COMPOSITIONS,
AND USES THEREOF (BOYD, Cardellina, et al.).
(3) MEDICHEM has by virtue of a Patent License Agreement (Patent License
No. L-135-94) with National Cancer Institute ("NCI") of the National
Institute of Health which is an agency of the United States Public
Health Service within the Department of Health and Human Services,
U.S.A. (a copy whereof is hereto attached as APPENDIX A) the use of
the Patent rights
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licensed thereunder to undertake research into the said COMPOUND with
a view to developing a drug for the treatment of acquired
immunodeficiency syndrome (AIDS) diseases, and to use and sell the
licensed PRODUCTS i.e. the drug derived from the said COMPOUND;
(4) MEDICHEM entered into an Agreement with the State Government whereby
in consideration of the State Government agreeing to NIH granting to
MEDICHEM a license to use the COMPOUND and to sell and distribute
drugs developed therefrom, MEDICHEM agrees to pay royalties, at the
rate stated therein, to the State Government. A copy of the Agreement
is attached as APPENDIX B;
(5) MEDICHEM has a duly executed license with vita of Spain under the
License Agreement attached as APPENDIX C.
(6) MEDICHEM has invited the State Government, through XXXXX, to form a
COMPANY for the clinical trials for the said COMPOUND and subscribe to
purchase shares in the COMPANY with a view to enhancing benefits to
the State Government in the event of the successful development and
commercialization of the PRODUCT;
(7) Both the Sarawak Government (through XXXXX) and MEDICHEM wish to
jointly cooperate to form a COMPANY for conducting research into the
COMPOUND and more particularly in the conduct of the clinical trials
for the said COMPOUND, with a view to the production and medical
application of the PRODUCT. XXXXX and MEDICHEM wish to be equal
shareholders in the COMPANY.
In pursuance thereof, the parties hereto have agreed to enter into
mutual commitments and to regulate their rights in relation to such COMPANY in
the manner and upon the terms and conditions hereinafter appearing.
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IT IS MUTUALLY AGREED as follows:
1 INTERPRETATIONS
1.1 In this Agreement unless the context otherwise requires:
1.1.1 "the COMPOUND" means the anti-viral molecule or agent isolated from
the plants of the genus callophylum found in the State of Sarawak in
Malaysia and including Calanolide or any synthesized form thereof or
that derived from preparation made by MEDICHEM under the said patents.
1.1.2 "the COMPANY" means the COMPANY incorporated under Clause 4 below.
1.1.3 "FDA" means the Food and Drug Administration of the United States of
America.
1.1.4 MEDICHEM "INTELLECTUAL PROPERTY RIGHTS" means technical information,
all trade secrets, patent applications and patents and licenses
related to COMPOUND or PRODUCT in which MEDICHEM has right, title and
interest at the date of signing this Agreement.
1.1.5 "STATE GOVERNMENT" means the Government of the State of Sarawak,
Malaysia.
1.1.6 COMPANY Intellectual Property Rights shall mean technical information,
trade secrets, and patent rights developed or obtained by the COMPANY.
1.1.7 "THE PRODUCT" means any drug or pharmaceutical goods or PRODUCT
derived from the COMPOUND for the treatment of Human Immunodeficiency
(HIV) or HIV related diseases, developed through or under this
Project.
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1.1.8 "THIS PROJECT" means
(a) the development of Calanolide as a Therapeutic for
treatment of HIV infection;
(b) development of Calanolide A as a Therapeutic for
treatment of non HIV viral infections;
(c) development of Calanolide - related compounds including
Costatolide as Therapeutic agent for treatment of viral
infections;
(d) the research and study into medicinal properties of
other plant materials from the State of Sarawak, and
(e) undertake any current or future endeavours or
collaboration entered into between MEDICHEM and the
U.S. National Institute of Health in connection with
the research and study into Calanolide Compounds.
1.2 References to statutory provisions shall be construed as references to
those provisions as respectively amended or re-enacted or as their
application is modified by other provisions (whether before or after
the making of this agreement) from time to time and shall include any
provisions of which they are re-enactments (whether with or without
modifications).
1.3 The headings are inserted for convenience only and shall not affect
the construction of this Agreement.
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1.4. The Appendices shall be considered as an integral part of this
Agreement.
1.5 Words importing one gender include all other genders and words
importing the singular include the plural and vice versa.
1.6 Any covenant by a party not to do an act or thing shall be deemed to
include an obligation not to permit or suffer such act or thing to be
done by another person.
2. TERM
This Agreement shall commence on the date shown hereinabove and shall
continue until and unless terminated in accordance with hereinunder.
3. NATURE OF COLLABORATION
3.1 XXXXX and MEDICHEM hereby mutually agree to cooperate with each other
to form a COMPANY for the purpose of taking the COMPOUND through its
clinical trials which shall start as soon as such trials are approved
by the FDA and to comply with and achieve the Benchmarks for the
development thereof as set out in APPENDIX D to the Patent License
Agreement between MEDICHEM and the National Institutes of Health
(further set out in Appendix C hereof).
3.2 The COMPANY shall seek the requisite approvals of the FDA and any
other governing bodies (hereinafter referred to as "the regulatory
authorities") for the conduct of clinical trials for the COMPOUND and
comply with all the conditions and requirements set out in the
approvals by the regulatory authorities.
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3.3 The COMPANY shall seek the approvals of the regulatory authorities in
the United States of America and those of other countries for the
manufacture, use, marketing and sale of the PRODUCT.
3.4. Upon approvals from the regulatory authorities for the manufacturing
of the PRODUCT and its medical application, the parties hereto shall
proceed, either through the COMPANY itself or by arrangements with
other parties (to be mutually agreed upon by XXXXX and MEDICHEM), to
have the PRODUCT manufactured, distributed and sold both in the United
States of America and abroad.
3.5 MEDICHEM shall make available to the COMPANY, at MEDICHEM'S standard
cost, the scientists to undertake the research and clinical trials of
the COMPOUND and manufacture of the PRODUCT and shall (subject to Visa
and U.S. immigration clearance) train scientists nominated by XXXXX at
MEDICHEM's facilities in the United States and permit such scientists
from Sarawak, to participate in the clinical trials, development,
manufacture, marketings and distribution of the PRODUCT.
4. SCHEME OF COLLABORATION
4.1 XXXXX and MEDICHEM agree to have incorporated, under United States
laws, a COMPANY, with limited liability, whose shares shall be owned
by the parties hereto in the following proportions:-
XXXXX
(as agent and nominee of the State Government) : 50 %
XXXXX'X shares are to be obtained by making subscription payments in
accordance with Subscription Agreement. (APPENDIX D).
MEDICHEM : 50 %.
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MEDICHEM's shares are to be obtained by contribution of MEDICHEM
Intellectual Property Rights and shall vest automatically according to
APPENDIX E.
4.2 The COMPANY shall be known as SARAWAK MEDICHEM PHARMACEUTICALS, INC..
or such other name as may be approved by the Xxxxxxxxx xx Xxxxx xx
Xxxxxxxx, Xxxxxx Xxxxxx of America.
4.3(a) The COMPANY'S principal business and activity is to undertake the
research work and carry out clinical trials for the COMPOUND and
thereafter, to carry out research and study into other plant materials
for their medicinal properties.
(b) In the event of a successful development of the PRODUCT, the parties,
as shareholders of the COMPANY, shall mutually agree upon the mode and
manner for undertaking the commercialization of the PRODUCT, in
particular, manufacturing, sale and distribution thereof either
through the COMPANY or such third parties as may be mutually agreed by
XXXXX and MEDICHEM. In making this determination both parties will
take into consideration the following:
(i) capital expenditure that may be required for the
commercialization of the PRODUCT,
(ii) the most efficient and cost effective manner for the
manufacturing, promoting and distributing thereof.
4.4 The objects, constitution and articles of association of the COMPANY
shall be in the document set out in APPENDIX F, the provision of this
appendix both parties hereto may both mutually agree in writing to
modify, alter, or amend the provisions of APPENDIX F.
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4.5 All Patents, License Agreements and Approvals relating to the
development of the PRODUCT shall be assigned or exclusively licensed
to the COMPANY upon payment by XXXXX of the sum of US $1,200,000 to
the COMPANY as the first payment for subscription of shares. These
funds are to be used for the attainment of the first benchmark
stipulated in APPENDIX D.
5. WARRENTIES AND UNDERTAKINGS
5.1 MEDICHEM undertakes that its scientists whose names appear in APPENDIX
G will carry out for the COMPANY all research and trials envisaged
under the Project and throughout the duration of this Agreement.
MEDICHEM will be reimbursed for services of MEDICHEM scientists at a
rate approved by the COMPANY's Board of Directors.
5.2 MEDICHEM warrants that all the scientists named in APPENDIX G possess
the requisite knowledge, skill and experience to undertake the
research and trials described hereinabove, and will undertake such
responsibilites to the best of their professional competence and
according to the highest standard of professional conduct and ethics.
5.3 MEDICHEM undertakes to recruit, engage, appoint, or involve other
scientists for the COMPANY whose skills and professional abilities are
required for the successful implementation of the Project or for the
development and commercialization of the PRODUCT in addition to or in
substitution of those scientists named in APPENDIX G.
5.4 MEDICHEM undertakes to procure or obtain for the COMPANY from the
scientists named in APPENDIX G and any scientists recruited or
appointed under clause 5.3, written undertakings in the form
acceptable to the State Government, that they will not make any
unauthorised use or disclosure of
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any data, findings or knowledge acquired that may or come into their
possession during or in the course of their involvement or
participation in the Project.
5.5 MEDICHEM warrants that no other person has any claim, interest or
right whatsoever to any of the Patents, and that the same can be
validly be assigned to the COMPANY and that the COMPANY shall have
absolute right and ownership of the Patents and entitled to custody
and control of the certificates and the documentary evidence relating
thereto except as that provided in APPENDICES A, B and C.
5.6 XXXXX warrants that it has the authority to enter into this Agreement
on behalf of the State Government and has secured funds to meet the
payments due under this Agreement.
5.7 XXXXX undertakes to procure or obtain for the COMPANY from its
scientists involved in the Project, a written undertaking, in a form
acceptable to MEDICHEM, that they will not make any unauthorized use
or disclosure of any date, findings, or knowledge acquired or come
into their possesion during or in the course of their involvement or
participation in the Project.
5.8 Neither XXXXX nor MEDICHEM shall, during the subsistence of the
Agreement enter into or establish any relationship, arrangement or
collaboration with any other parties or institution for the purpose of
undertaking any research, study, trial, manufacture, production,
distribution, or sale of the PRODUCT, the COMPOUND or any analogs or
derivatives thereof without the prior written consent of the other
party.
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6. FUNDS FOR PROJECT AND PAID UP CAPITAL OF COMPANY
6.1 MEDICHEM has estimated that the costs of both Phases of the clinical
trials for the COMPOUND would have US $21,000,000 particulars of which
are as follows:
Phase Amount
----- ------
(a) Phase IA/IB US $ 6,000,000
(b) Phase II US $ 15,000,000
---------------
Total US $ 21,000,000
A detailed schedule for the disbursement of the above mentioned sum is
found in APPENDIX D hereto.
6.2 The clinical trials shall be undertaken by the Company from funds
provided as follows:
(i) XXXXX will provide to the COMPANY a total sum of US$9,000,000
through subscription in COMPANY stocks to cover the full costs
of the Phase IA/IB clinical trials and part of the costs of
Phase II of the trials. The sum of US $9,000,000 shall be made
available in the manner and at the times set out in
subscription APPENDIX D, subject always to the condition that
prior to each payment the results of the clinical trials are
shown to be satisfactory and the benchmarks stipulated in
APPENDIX D are attained. The COMPANY shall issue stocks in
accordance with the provisions of APPENDICES D and E within 30
days from the date of the subscription payment.
(ii) MEDICHEM shall be issued shares in the COMPANY equivalent to
the value of the MEDICHEM Intellectual Property Rights
assigned or licensed to the COMPANY. Both parties agree that
the ultimate value of the MEDICHEM Intellectual Property
Rights assigned or licensed to the COMPANY shall be US
$9,000,000, but
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the shares for MEDICHEM shall be vested and be issued at the
same time as the shares are issued to XXXXX, to the intent
that the amount of shares issued to XXXXX and MEDICHEM shall
be equal at all material times. Except if XXXXX fails to make
subscription payments, XXXXX shall not receive any further
shares, MEDICHEM shares shall continue to automatically be
vested according to the Schedule E.
(iii) The balance of the sum required to complete the clinical
trials of US $12,000,000 shall be raised by the COMPANY as
follows:
(a) through license fees or royalities received by the
COMPANY from the licensing of the rights to
manufacture, sale, and distribution of the PRODUCT to a
pharmaceutical company or companies;
(b) by loans or finance obtained from banks or financial
institutions;
(c) by a combination of (a) and (b);
(d) by loans provided by XXXXX to the COMPANY, or;
(e) by the COMPANY calling for additional working capital
from its shareholders and XXXXX and MEDICHEM will
purchase an equal number of shares to meet the working
capital needs of the COMPANY. In such an event, XXXXX
will make available a loan [on terms to be agreed upon
by the parties hereto] to MEDICHEM to subscribe to the
shares of the COMPANY to the intent that MEDICHEM shall
retain 50% equity interest in the COMPANY.
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6.3 Both parties shall endeavor to ensure that the COMPANY has sufficient
funds at all material times, to complete the clinical trials for the
COMPOUND.
7. INTELLECTUAL PROPERTY RIGHTS
7.1 Any Product created jointly by the parties in pursuance of this
Agreement, shall belong to the Company at the date of its creation:
(a) Where in the course of developing the PRODUCT Intellectual
Property Rights are brought into existence, such Intellectual
Property Rights SHALL be COMPANY intellectual property Rights
and be held in the name of the COMPANY, and the COMPANY'S
expense, shall take all reasonable steps necessary to protect
the same by applying for US and Worldwide Patents and such
foreign rights corresponding to them or registrations of them
as may be reasonable.
(b) if at any time during the existence of the COMPANY any
Intellectual Property Rights belonging to the COMPANY or
assigned or licensed to the COMPANY by MEDICHEM are infringed
by a third party then the COMPANY shall take all reasonable
steps necessary to enforce the COMPANY and MEDICHEM
Intellectual Property Rights at COMPANY expense. Both parties
shall use all steps and provide all information and assistance
reasonably required for the purpose of such proceedings. Any
sums recovered as a result of proceedings taken to enforce the
COMPANY or MEDICHEM Intellectual Property Rights shall after
deduction of all legal fees and other expenses incurred in
connection with such proceedings by the parties be paid to the
COMPANY'S general account.
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8. TERMINATION AND BREACH OF AGREEMENT AND THEIR CONSEQUENCES.
8.1 This Agreement shall be deemed to have been terminated if:
(a) both XXXXX and MEDICHEM mutually agree in writing not to
proceed further with any stage of the clinical trials of the
COMPOUND;
(b) the State Government fails to provide share subscription funds
required for the clinical trials of the COMPOUND in accordance
with the provisions of Clause 6 above or in the manner
stipulated and at the times mentioned in APPENDIX D hereto or
fails, without reasonable cause, to provide the funds in
accordance with clause 6.2 (iii).
8.2.1 Where this Agreement is terminated pursuant to clause 8.1(a) both
parties will be released from their prospective obligations hereunder
and any liabilities of the COMPANY will be settled by the parties
hereto equally. Upon settlement of such liabilities, all patents
assigned or licensed to the COMPANY shall be reassigned back to
MEDICHEM, including rights to clinical trials, and the parties will
take steps to dissolve the COMPANY in accordance with the laws of the
State of Delaware of the United States of America.
8.2.2 Where this Agreement is terminated pursuant to Clause 8.1(b), the
MEDICHEM Intellectual Property Rights shall be reassigned by the
COMPANY back to MEDICHEM, who shall be entitled to continue with the
development of the COMPOUND.
8.3 In the event that the parties are unable to arrive at a joint decision
as required under Clause 8.1(a), and the provisions of Clause 8.1(b)
do not apply on whether or not to proceed further with any stage of
the clinical
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trials for the PRODUCT that the party that wishes to proceed with the
development of the PRODUCT is entitled to do so, subject to the
following:
(a) in the event that it is XXXXX that does not want to proceed,
MEDICHEM shall have the right but not the obligation to
purchase XXXXX'X shares at the price paid by XXXXX.
(b) in the event it is MEDICHEM that does not wish to proceed,
XXXXX shall have the right, but not the obligation to purchase
MEDICHEM'S shares at the price of $9,000,000 US being the
price paid by MEDICHEM.
(c) in the event that the conditions in subparagraphs (a) and (b)
above cannot be fulfilled within a period of six months from
the date when either party gives written notice to the other
of its desire not to proceed with the clinical trial of the
COMPOUND, this Agreement shall be deemed mutually terminated
and the provisions of clause 8.2 shall apply.
8.4. Subject to the provisions of 8.1(b), a breach of any of the provisions
of the Agreement shall not result in its termination, but the party in
breach shall be liable to compensate the other party for all damages
and loss suffered or sustained by the innocent party in consequence of
such breach.
9. PROFIT SHARING
The profits derived from the sale of the PRODUCT when commercialized
shall be shared by the parties hereto in the manner and in the
proportion set out in APPENDIX H.
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10. NATURE OF THIS AGREEMENT
This Agreement relates only to the single COMPANY referred to in it
and shall neither constitute either party to it the agent of the other
party nor shall it constitute a partnership between such parties.
11. TAXATION
Each of the parties hereto agrees that each shall bear its own
liability for any taxation chargeable in the United States of America
or Malaysia in respect of its participation in this collaboration and
each undertakes to indemnify the other in respect of any such taxation
assessed on and paid by the other in respect of which the former is
primarily liable.
12. GENERAL
12.1 This agreement shall be binding on the parties to it and their
respective successors and permitted assigns, provided that neither of
such parties shall be entitled to assign this Agreement or any of its
rights and obligations under this Agreement without the consent of the
other (which consent either party may in its absolute discretion
withhold).
12.2 No exercise or failure to exercise or delay in exercising any right,
power, or remedy vested in either party under or pursuant to this
Agreement shall constitute a waiver by that party of that or any other
right, power, or remedy.
12.3 Each party shall bear its own costs of or in connection with the
preparation and execution of this Agreement.
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12.4(a) Neither party hereto shall issue any press release or other public
statement or publish any article or account of any patent findings,
conclusions, or results of any trials carried out under this agreement
without the prior written consent of the other party but such consent
should not be unreasonably withheld.
(b) Both parties shall and also ensure that their respective scientists
and staff keep and maintain complete confidentiality over any
information, data, findings, conclusions, or outcome of any research,
patents, patent applications, approvals, negotiations, discussions,
records pertaining to the PRODUCT, or any activity carried out under
this Agreement.
12.5 This Agreement (together with all agreements and documents executed
contemporaneously with it or referred to in it) constitutes the entire
Agreement between the parties in relation to its subject matter and
supersedes all prior Agreements and undertakings whether oral or
written with respect to that subject matter and no variation of this
Agreement shall be effective unless reduced to writing and signed by
or on behalf of a duly authorised representative of each of the
parties to this Agreement.
12.6 In the event that any term, condition, or provision of this Agreement
is held to be in violation of any applicable law, statute or
regulation, the same shall be deemed to be deleted from this Agreement
and shall be of no force and effect and this Agreement shall remain in
full force and effect as if such term, condition or provision had not
originally been contained in this Agreement. Notwithstanding the
foregoing in the event of any such deletion the parties shall
negotiate in good faith in order to agree to the terms of a mutually
acceptable and satisfactory alternative provision in place of the
provision so deleted.
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12.7 This Agreement may be executed in any number of counterparts or
duplicates each of which shall be an original but such counterparts or
duplicates shall together constitute as one and the same Agreement.
12.8 Time shall be of the essence for the purposes of any provision of this
Agreement.
12.9 This Agreement supersedes, overrides, rescinds and revokes all
previous arrangements, agreements, promises, undertakings and deeds
(if any) entered into between the parties which is the subject matter
of this Agreement provided that the provisions of this clause shall
not apply to the Agreement (APPENDIX B) subsisting between the State
Government and MEDICHEM.
13. NOTICES
Any notice to be given by either party to this Agreement shall be in
writing and shall be deemed duly served if delivered personally or
sent by telex or facsimile transmission or by prepaid air mail
registered post to the addressee at the address or (as the case may
be) the telex or fascimile number of that party set opposite its name
below:
XXXXX'x Address: x/x XXXXX XXXXXXXX XXXXXXX' XXXXXX
00xx Xxxxx, Xxxxx Bapa Xxxxxxxx,
Xxxxx Xxxx, 00000 Xxxxxxx, Xxxxxxx,
Malaysia
Facsimile Number: 60-82-440525
[Marked for the attention of:]
MEDICHEM RESEARCH, INC.
00000 X. Xxx Xxxxxx
Xxxxxx, XX 00000
Telex Number: 000-000-0000
Facsimile Number: 000-000-0000
ATTN: Xx. Xxxxxxx X. Xxxxxx
or at such other address (or telex or facsimile number) as the party
to be served may have notified (in accordance with the provisions of
this clause) for the purposes of this Agreement.
13.2 Any notice sent by telex or facsimile shall be deemed served when
dispatched and any notice served by prepaid air mail registered post
shall be deemed served 10 days after posting to an address in the
United States of America or Malaysia. In proving the service of any
notice it will be sufficient to prove in the case of a letter that
such letter was properly stamped, addressed and placed in the post or
delivered or left at the current address if delivered personally and
in the case of a telex or facsimile that such telex or facsimile
transmission was duly dispatched to the telex or facsimile number of
the addressee given above or subsequently notified for the purposes of
this Agreement.
14. LAW AND JURISDICTION
THIS Agreement shall be governed by and construed in all respects in
accordance with the law of
England applicable at the time of the
execution of this Agreement.
15. ARBITRATION
All disputes which arise out of this Agreement shall be settled by
arbitration in accordance with the conciliation and arbitration rules
and regulations of the International Arbitration Centre in
England to
which the parties hereto submit. The arbitrator shall have background
and expertise relating to the issues(s) involved. The arbitration
shall be in a mutually agreed location and the UNCITRAL (United
Nations Commission on International Trade Laws) rules shall apply to
such arbitration. The parties shall share equally the fees and
expenses of the arbitration. The arbitrator's decision shall be
binding, final and non-appealable.
IN WITNESS
SIGNED by )
DATUK WAN ALI TUANKU YUBI )
Chairman/Director of )
XXXXX RESEARCH SDN BHD ) /s/ Datuk Wan Ali Tuanku Yubi
under and by virtue of a ) ------------------------------------
Resolution of its Board of Directors,) DATUK WAN ALI TUANKU YUBI
in the presence of: )
Name of Witness: /s/ Datuk X.X. Xxxx
------------------------------------
DATUK X.X. XXXX
Address: State Attorney-General's Xxxxxxxx,
Kuching.
Occupation: State Attorney-General, Sarawak
SIGNED by )
XX. XXXXXXX X. XXXXXX )
President, for and on behalf of ) /s/ Xxxxxxx X. Xxxxxx
MEDICHEM RESEARCH INC. ) ------------------------------------
in the presence of: ) XX. XXXXXXX X. XXXXXX
Name of Witness: /s/ Xxxx X. Xxxxxx
------------------------------------
XXXX X. XXXXXX
Address: MediChem Research, Inc.
Occupation: Vice President of Contractual
Operations
APPENDIX A
MEDICHEM/NCI LICENSE L-135-95
NATIONAL INSTITUTES OF HEALTH
CENTERS FOR DISEASE CONTROL
PATENT LICENSE AGREEMENT -- EXCLUSIVE
COVER PAGE
For Office of Technology Transfer/NIH internal use only:
Patent License Number: L-135-94
Serial Numbers of Licensed Patents: USPA SN 07/861,249
SN 08/065,618
Licensee: MediChem Research, Inc.
CRADA Number (if applicable):
Additional Remarks:
This Patent License Agreement, hereinafter referred to as the "Agreement,"
consists of this Cover Page, an attached Agreement, a Signature Page, Appendix A
(Patent or Patent Application), Appendix B (Fields of Use and Territory),
Appendix C (Royalties), Appendix D (Modifications), and Appendix B
(Benchmarks). This Cover Page serves to identify the Parties to this Agreement:
1) The National Institutes of Health ("NIH") or the Centers for
Disease Control ("CDC"), hereinafter singly or collectively
referred to as "PHS," agencies of the United States Public
Health Service within the Department of Health and Human
Services ("DHHS"); and
2) The person, corporation, or institution identified above
and/or on the Signature Page, having offices at the address
indicated on the Signature Page, hereinafter referred to as
"Licensee."
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 1 - FINAL - MediChem Research, Inc. - May 5, 1995
PHS PATENT LICENSE AGREEMENT--EXCLUSIVE
PHS and Licensee agree as follows:
1. BACKGROUND
1.01 In the course of conducting biomedical and behavioral
research, PHS investigators made inventions that may have
commercial applicability.
1.02 By assignment of rights from PHS employees and other
inventors, DHRS, on behalf of the United States Government,
owns intellectual property rights claimed in any United States
and foreign patent applications or patents corresponding to
the assigned inventions. DHHS also owns any tangible
embodiments of these inventions actually reduced to practice
by PHS.
1.03 The Assistant Secretary for Health of DHHS has delegated to
PHS the authority to enter into this Agreement for the
licensing of rights to these inventions under 35 U.S.C.
Sections 2O0-212, the Federal Technology Transfer Act of 1986,
15 U.S.C. Section 3710a, and/or the regulations governing the
licensing of Government-owned inventions, 37 CFR Part 404.
1.04 PHS desires to transfer these inventions to the private sector
through commercialization licenses to facilitate the
commercial development of products and processes for public
use and benefit.
1.05 Licensee desires to acquire commercialization rights to
certain of these inventions in order to develop processes,
methods, or marketable products for public use and benefit.
2. DEFINITIONS
2.01 "Licensed Patent Rights shall mean:
a) U.S. patent applications and patents listed in Appendix
A, all divisions and continuations of these
applications, all patents issuing from such
applications, divisions, and continuations, and any
reissues, reexaminations, and extensions of all such
patents;
b) to the extent that the following contain one o more
claims directed to the invention or inventions claimed
in a) above: I) continuations-in-part of a) above; II)
all divisions and continuations of these
continuations-in-part; III) all patents issuing from
such continuations-in-part, divisions, and
continuations; and IV) any reissues, reexaminations,
and extensions of all, such patents;
c) to the extent that the following contain one or more
claims directed to the invention or inventions claimed
in a) above:
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all counterpart foreign applications and patents to a)
and b) above, including those listed in Appendix A.
Licensed Patent Rights shall not include b) or c) above
to the extent that they contain one or more claims
directed to new matter which is not the subject matter
of a claim in a) above.
2.02 "Licensed Product(s)" means tangible materials which, in the
course of manufacture, use, or sale would, in the absence of
this Agreement, infringe one or more claims of the Licensed
Patent Rights that have not been held invalid or unenforceable
by an unappealed or unappealable judgement of a court of
competent jurisdiction.
2.03 "Licensed Process(es)" means processes which, in the course of
being practiced would, in the absence of this Agreement,
infringe one or more claims of the Licensed Patent Rights that
have not been held invalid or unenforceable by an unappealed
or unappealable judgment of a court of competent jurisdiction.
2.04 "Licensed Territory" means the geographical area identified in
Appendix B.
2.05 "Net Sales" means the total gross receipts for sales of
Licensed Products or practice of Licensed Processes by or on
behalf of Licensee or its sublicensees, and from leasing,
renting, or otherwise making Licensed Products available to
others without sale or other dispositions, whether invoiced or
not, less returns and allowances actually granted, packing
costs, insurance costs, freight out, taxes or excise duties
imposed on the transaction (if separately invoiced), and
wholesaler and cash discounts in amounts customary in the
trade. No deductions shall be made for commissions paid to
individuals, whether they be with independent sales agencies
or regularly employed by Licensee, or sublicensees, and on its
payroll, or for the cost of collections.
2.06 "First Commercial Sale" means the initial transfer by or on
behalf of Licensee or its sublicensees of Licensed Products or
the initial practice of a Licensed Process by or on behalf of
Licensee or its sublicensees in exchange for cash or some
equivalent to which value can be assigned for the purpose of
determining Net Sales.
2.07 "Government" means the government of the United States of
America.
2.08 "Licensed Fields of Use" means the fields of use identified in
APPENDIX B.
3. GRANT OF RIGHTS
3.01 PHS hereby grants and Licensee accepts, subject to the terms
and conditions of this Agreement, an exclusive license to
Licensee under the Licensed Patent Rights in the Licensed
Territory to make and have made, to use and have used, and to
sell and have sold any
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Licensed Products in the Licensed Fields of Use and to
practice and have practiced any Licensed Processes in the
Licensed Fields of Use.
3.02 This Agreement confers no license or rights by implication,
estoppel, or otherwise under any patent applications or
patents of PHS other than Licensed Patent Rights regardless of
whether such patents are dominant or subordinate to Licensed
Patent Rights.
4. SUBLICENSING
4.01 Upon written approval by PHS, which approval will not be
unreasonably withheld, Licensee may enter into sublicensing
agreements under the Licensed Patent Rights.
4.02 Licensee agrees that any sublicenses granted by it shall
provide that the obligations to PHS of Paragraphs 5.01-5.05,
8.01, 10.01, 10.02, 12.05, and 13.08-13.11 of this Agreement
shall be binding upon the sublicensee as if it were a party to
this Agreement. Licensee further agrees to attach copies of
these Paragraphs to all sublicense agreements.
4.03 Any sublicenses granted by Licensee shall provide for the
termination of the sublicense, or the conversion to a license
directly between such sublicensees and PHS, at the option of
the sublicensee, upon termination of this Agreement under
Article 13. Such conversion is subject to PHS approval and
contingent upon acceptance by the sublicensee of the remaining
provisions of this Agreement.
4.04 Licensee agrees to forward to PHS a copy of each fully
executed sublicense agreement postmarked within sixty (60)
days of the execution of such agreement.
5. STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS
5.01 PHS reserves on behalf of the Government an irrevocable,
nonexclusive, nontransferable, royalty-free license for the
practice of all inventions licensed under the Licensed Patent
Rights throughout the world by or on behalf of the Government
and on behalf of any foreign government or international
organization pursuant to any existing or future treaty or
agreement to which the Government is a signatory.
5.02 Licensee agrees that products used or sold in the United
States embodying Licensed Products or produced through use of
Licensed Processes shall be manufactured substantially in the
United States, unless a written waiver is obtained in advance
from PHS.
5.03 Licensee acknowledges that PHS may enter into future
Cooperative Research and Development Agreements (CRADAs) under
the Federal Technology Transfer Act of 1986 that relate to the
subject matter of
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this Agreement. Licensee agrees not to unreasonably deny
requests for sublicense or cross-license rights from such
future collaborators with PHS when acquiring such derivative
rights is necessary in order to make a CRADA project feasible.
Licensee may request an opportunity to join as a party to the
proposed CRADA.
5.04 DHHS has responsibility for funding basic biomedical research,
for funding medical treatment through programs such as
Medicare and Medicaid, for providing direct medical care and,
more generally, for protecting the health and safety of the
public. Because of these responsibilities, and the public
investment in the research that culminated in the Licensed
Patent Rights, PHS may require Licensee to submit
documentation in confidence showing a reasonable relationship
between the pricing of a Licensed Product, the public
investment in that product, and the health and safety needs of
the public. This paragraph shall not restrict the right of
Licensee to price a Licensed Product or Licensed Process so as
to obtain a reasonable profit for its sale or use. This
Paragraph 5.04 does not permit PHS to set or dictate prices
for Licensed Products or Licensed Processes.
5.05 In addition to the reserved license of Paragraph 5.01 above,
PHS reserves the. right to grant nonexclusive licenses to make
and to use the inventions defined by the Licensed Patent
Rights for purposes of research involving the inventions
themselves, and not for purposes of commercial manufacture or
in lieu of purchase if the inventions are available as
commercial products for research purposes. The purpose of this
research license is to encourage basic research, whether
conducted at an academic or corporate facility. In order to
safeguard the Licensed Patent Rights, however, PHS shall
consult with Licensee before granting to commercial entities a
research license or providing to them research samples of the
materials claimed in the Licensed Patent Rights.
6. ROYALTIES AND REIMBURSEMENT
6.01 Licensee agrees to pay to PHS a noncreditable, nonrefundable
license issue royalty as set forth in Appendix C within thirty
(30) days from the date that this Agreement becomes effective.
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6.02 Licensee agrees to pay to PHS a nonrefundable minimum annual
royalty as set forth in Appendix C. The minimum annual royalty
is due and payable on January 1 of each calendar year and may
be credited against any earned royalties due for sales made in
that year. The minimum annual royalty due for the first
calendar year of this Agreement may be prorated according to
the fraction of the calendar year remaining between the
Effective Date of this Agreement and the next subsequent
January 1.
6.03 Licensee agrees to pay PHS earned royalties as set forth in
Appendix C.
6.04 Licensee agrees to pay PHS benchmark royalties as set forth in
Appendix C.
6.05 A claim of a patent or patent application licensed under this
Agreement shall cease to fall within the Licensed Patent
Rights for the purpose of computing the minimum annual royalty
and earned royalty payments in any given country on the
earliest of the dates that a) the claim has been abandoned but
not continued, b) the patent expires, c) the patent is no
longer maintained by the Government, or d) all claims of the
Licensed Patent Rights have been held to be invalid or
unenforceable by an unappealed or unappealable decision of a
court of competent jurisdiction or administrative agency.
6.06 No multiple royalties shall be payable because any Licensed
Products or Licensed Processes are covered by more than one of
the Licensed Patent Rights.
6.07 On sales of Licensed Products by Licensee to sublicensees or
affiliated parties or on sales made in other than an
arm's-length transaction, the value of the Net Sales
attributed under this Article 6 to such a transaction shall be
that which would have been received in an arm's-length
transaction, based on sales of like quantity and quality
products on or about the time of such transaction.
6.08 As an additional royalty, Licensee agrees to pay PHS, within
sixty (60) days of PHS's submission of a statement and request
for payment, an amount equivalent to all reasonable expenses
previously incurred by PHS in the preparation, filing,
prosecution, and maintenance of Licensed Patent Rights.
Licensee further agrees to pay PHS annually, within sixty (60)
days of PHS's submission of a statement and request for
payment, a royalty amount equivalent to all such future patent
expenses incurred during the previous calendar year, as of the
date the statement and request for payment is sent by PHS to
Licensee. Fifty percent (50%) of the cumulative amount of such
payments may be credited against royalties due under Paragraph
6.03; however, the net royalty payment in any calendar year
may not be lower than the minimum annual royalty specified in
Appendix B. Licensee may elect to surrender its rights in any
country of the Licensed Territory under any Licensed Patent
Rights
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upon sixty (60) days' written notice to PHS and owe no payment
obligation under this paragraph for subsequent patent-related
expenses incurred in that country.
7. DOMESTIC AND FOREIGN PATENT FILING, PROSECUTION, AND MAINTENANCE
7.01 PHS agrees to take responsibility for, but to consult with the
Licensee in, the preparation, filing, prosecution, and
maintenance of any and all patent applications or patents
included in the Licensed Patent Rights and shall furnish
copies of relevant patent-related documents to Licensee.
7.02 Each party shall promptly inform the other as to all matters
that come to its attention that may affect the preparation,
filing, prosecution, or maintenance of the Licensed Patent
Rights and permit each other to provide comments and
suggestions with respect to the preparation, filing, and
prosecution of Licensed Patent Rights, which comments and
suggestions shall be considered by the other party.
8. RECORD KEEPING
8.01 Licensee agrees to keep accurate and correct records of
Licensed Products made, used, or sold and Licensed Processes
practiced under this Agreement appropriate to determine the
amount of royalties due PHS. Such records shall be retained
for at least five (5) years following a given reporting
period. They shall be available during normal business hours
for inspection at the expense of PHS by an accountant or other
designated auditor selected by PHS for the sole purpose of
verifying reports and payments hereunder. The accountant or
auditor shall only disclose to PHS information relating to the
accuracy of reports and payments made under this Agreement. If
an inspection shows an underreporting or underpayment in
excess of five percent (5%) for any twelve (12) month period,
then Licensee shall reimburse PHS for the cost of the
inspection at the time Licensee pays the unreported royalties,
including any late charges as required by Paragraph 7.06 of
this Agreement. All payments required under this Paragraph
shall be due within thirty (30) days of the date PHS provides
Licensee notice of the payment due.
9. REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS
9.01 Prior to signing this Agreement, Licensee has provided to PHS
a written commercialization plan ("Commercial Development
Plan") under which Licensee intends to bring the subject
matter of the Licensed Patent Rights into commercial use. The
Commercial Development Plan is hereby incorporated by
reference into this Agreement. Based on this plan, performance
benchmarks are determined as specified in Appendix E
("Benchmarks").
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9.02 Licensee shall provide written annual reports on its product
development progress or efforts to commercialize under the
Commercial Development Plan for each of the Licensed Fields of
Use within sixty (60) days after December 31 of each calendar
year. These progress reports shall include, but not be limited
to: progress on research and development, status of
applications for regulatory approvals, manufacturing,
sublicensing, marketing, and sales during the preceding
calendar year, as well as plans for the present calendar year.
If reported progress differs from that projected in the
Commercial Development Plan and Benchmarks, Licensee shall
explain the reasons for such differences. Licensee may propose
amendments in any such annual report to the Commercial
Development Plan, acceptance of which by PHS may not
unreasonably be denied. Licensee agrees to provide any
additional data reasonably required by PHS to evaluate
Licensee's performance. Licensee may amend the Benchmarks at
any time upon written consent by PHS. PHS shall not
unreasonably withhold approval of any request of Licensee to
extend the time periods of this schedule if such request is
supported by a reasonable showing by Licensee of diligence in
its performance under the Commercial Development Plan and
toward bringing the Licensed Products to the point of
practical application as defined in 37 CFR 404.3(d). Licensee
shall amend the Commercial Development Plan and Benchmarks at
the request of PHS to address any Licensed Fields of Use not
specifically addressed in the plan originally submitted.
9.03 Licensee shall report to PHS the date of the First Commercial
Sale in each country in the Licensed Territory within thirty
(30) days of such occurrence.
9.04 Licensee shall submit to PHS within sixty (60) days after each
calendar half-year ending June 30 and December 31 a royalty
report setting forth for the preceding half-year period the
amount of the Licensed Products sold or Licensed Processes
practiced by or on behalf of Licensee in each country within
the Licensed Territory, the Net Sales, and the amount of
royalty accordingly due. With each such royalty report,
Licensee shall submit payment of the earned royalties due. If
no earned royalties are due to PHS for any reporting period,
the written report shall so state. The royalty report shall be
certified as correct by an authorized officer of Licensee and
shall include a detailed listing of all deductions made under
Paragraph 2.05 to determine Net Sales made under Article 6 to
determine royalties due.
9.05 Licensee agrees to forward semi-annually to PHS a copy of such
reports received by Licensee from its sublicensees during the
preceding half-year period as shall be pertinent to a royalty
accounting to PHS by Licensee for activities under the
sublicense.
9.06 Royalties due under Article 6 shall be paid in U.S. dollars.
For conversion of foreign currency to U.S. dollars, the
conversion rate shall be the rate quoted in THE WALL STREET
JOURNAL on the day that the payment is due. All checks and
bank drafts shall be drawn on
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Xxxxxx Xxxxxx banks and shall be payable to NIH/Patent
Licensing at the address shown on the Signature Page below.
Any loss of exchange, value, taxes, or other expenses incurred
in the transfer or conversion to U.S. dollars shall be paid
entirely by Licensee. All royalty payments due under this
Agreement shall be mailed to the following address: NIH, X.X.
Xxx 000000, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000. The royalty
report required by paragraph 9.04 of this Agreement shall
accompany each such payment and a copy of such report shall
also be mailed to PHS at its address for notices indicated on
the Signature Page of this Agreement.
9.07 Late charges will be applied to any overdue payments as
required by the U.S. Department of Treasury in the Treasury
Fiscal Requirements Manual, Section 8025.40. The payment of
such late charges shall not prevent PHS from exercising any
other rights it may have as a consequence of the lateness of
any payment.
9.08 All plans and reports required by this Article 9 and marked
"confidential" by Licensee shall be treated by PHS as
commercial and financial information obtained from a person
and as privileged and confidential and, to the extent
permitted by law, shall not be subject to disclosure under the
Freedom of Information Act, 5 U.S.C. Section 552.
10. PERFORMANCE
10.01 Licensee shall use its reasonable best efforts to introduce
the Licensed Products into the commercial market or apply the
Licensed Processes to commercial use as soon as practicable.
"Reasonable best efforts" for the purpose of this provision
shall include, but not be limited to, adherence to the
Commercial Development Plan and performance of the Benchmarks.
The efforts of a sublicensee shall be considered the efforts
of Licensee.
10.02 Upon the First Commercial Sale, until the expiration of this
Agreement, Licensee shall use its reasonable best efforts to
keep Licensed Products and Licensed Processes reasonably
accessible to the public.
11. INFRINGEMENT AND PATENT ENFORCEMENT
11.01 PHS and Licensee agree to notify each other promptly of each
infringement or possible infringement, as well as any facts
which may affect the validity, scope, or enforceability of the
Licensed Patent Rights of which either Party becomes aware.
11.02 Pursuant to this Agreement and the provisions of Chapter 29 of
Title 35, United States Code, Licensee may a) bring suit in
its own name, at its own expense, and on its own behalf for
infringement of presumably valid claims in the Licensed Patent
Rights; b) in any such suit, enjoin infringement and collect
for its use, damages,
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profits, and awards of whatever nature recoverable for such
infringement; and c) settle any claim or suit for infringement
of the Licensed Patent Rights-provided, however, that PHS and
appropriate Government authorities shall have the first right
to take such actions and shall have a continuing right to
intervene in such suit. Licensee shall take no action to
compel the Government either to initiate or to join in any
such suit for patent infringement. Licensee may request the
Government to initiate or join any such suit if necessary to
avoid dismissal of the suit. Should the Government be made a
party to any such suit, Licensee shall reimburse the
Government for any costs, expenses, or fees which the
Government incurs as a result of such motion or other action,
including any and all costs incurred by the Government in
opposing any such motion or other action. Upon Licensee's
payment of all costs incurred by the Government as a result of
Licensee's joinder motion or other action, these actions by
Licensee will not be considered a default in the performance
of any material obligation under this Agreement. In all cases,
Licensee agrees to keep PHS reasonably apprised of the status
and progress of any litigation. Before Licensee commences an
infringement action, Licensee shall notify PHS and give
careful consideration to the views of PHS and to any potential
effects of the litigation on the public health in deciding
whether to bring suit.
11.03 In any infringement action commenced under Paragraph 11.02,
the expenses including costs, fees, attorney fees, and
disbursements, shall be paid by Licensee. Up to fifty percent
(50%) of such expenses may be credited against the royalties
payable to PHS under Paragraph 6.03 under the Licensed Patent
Rights in the country in which such a suit is filed. In the
event that fifty percent (50%) of such expenses exceed the
amount of royalties payable by Licensee in any calendar year,
the expenses in excess may be carried over as a credit on the
same basis into succeeding calendar years. A credit against
litigation expenses, however, may not reduce the royalties due
in any calendar year to less than the minimum annual royalty.
Any recovery made by Licensee, through court judgment or
settlement, first shall be applied to reimburse PHS for
royalties withheld as a credit against litigation expenses and
then to reimburse Licensee for its litigation expense. Any
remaining recoveries shall be shared equally by Licensee and
PHS.
11.04 PHS shall cooperate fully with Licensee in connection with an
infringement action initiated under Paragraph 11.02. PHS
agrees promptly to provide access to all necessary documents
and to render reasonable assistance in response to a request
by Licensee.
11.05 In the event that a declaratory judgment action alleging
invalidity or non-infringement of any of the Licensed Patent
Rights shall be brought against Licensee or raised by way of
counterclaim or affirmative defense in an infringement suit
brought by Licensee under Paragraph 11.02, pursuant to this
Agreement and the provisions of Chapter 29 of Xxxxx 00, Xxxxxx
Xxxxxx Code or other statutes, Licensee may a) defend the suit
in its own name, at its own expense,
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and on its own behalf for presumably valid claims in the
Licensed Patent Rights; b) in any such suit, ultimately to
enjoin infringement and to collect for its use, damages,
profits, and awards of whatever nature recoverable for such
infringement; and c) settle any claim or suit for declaratory
judgment involving the Licensed Patent Rights-provided,
however, that PHS and appropriate Government authorities shall
have the first right to take such actions and shall have a
continuing right to intervene in such suit. Licensee shall
take no action to compel the Government either to initiate or
to join in any such declaratory judgment action. Licensee may
request the Government to initiate or join any such suit if
necessary to avoid dismissal of the suit. Should the
Government be made a party to any such suit by motion or any
other action of Licensee, Licensee shall reimburse the
Government for any costs, expenses, or fees which the
Government incurs as a result of such motion or other action.
Upon Licensee's payment of all costs incurred by the
Government as a result of Licensee's joinder motion or other
action, these actions by Licensee will not be considered a
default in the performance of any material obligation under
this Agreement. If Licensee elects not to defend against such
declaratory judgment action, PHS, at its option, may do so at
its own expense. In all cases, Licensee agrees to keep PHS
reasonably apprised of the status and progress of any
litigation. Before Licensee commences an infringement action,
Licensee shall notify PHS and give careful consideration to
the views of PHS and to any potential effects of the
litigation on the public health in deciding whether to bring
suit.
12. NEGATION OF WARRANTIES AND INDEMNIFICATION
12.01 PHS offers no warranties other than those specified in Article
1.
12.02 PHS does not warrant the validity of the Licensed Patent
Rights and makes no representations whatsoever with regard to
the scope of the Licensed Patent Rights, or that the Licensed
Patent Rights may be exploited without infringing other
patents or other intellectual property rights of third
parties.
12.03 PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY
SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT
RIGHTS.
12.04 PHS does not represent that it will commence legal actions
against third parties infringing the Licensed Patent Rights.
12.05 Licensee shall indemnify and hold PHS, its employees,
students, fellows, agents, and consultants harmless from and
against all liability, demands, damages, expenses, and losses,
including but not limited to death, personal injury, illness,
or property damage in connection with or arising out of a) the
use by or on behalf of Licensee, its sublicensees, directors,
employees, or third parties of any Licensed Patent Rights, or
b) the design, manufacture,
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distribution, or use of any Licensed Products, Licensed
Processes or materials, or other products or processes
developed in connection with or arising out of the Licensed
Patent Rights. Licensee agrees to maintain a liability
insurance program consistent with sound business practice.
13. TERM, TERMINATION, AND MODIFICATION OF RIGHTS
13.01 This Agreement is effective when signed by all parties and
shall extend to the expiration of the last to expire of the
Licensed Patent Rights unless sooner terminated as provided in
this Article 13.
13.02 In the event that Licensee is in default in the performance of
any material obligations under this Agreement, and if the
default has not been remedied within ninety (90) days after
the date of notice in writing of such default, PHS may
terminate this Agreement by written notice.
13.03 At least thirty (30) days prior to filing a petition in
bankruptcy, Licensee must inform PHS in writing of its
intention to file the petition in bankruptcy or of a third
party's intention to file an involuntary petition in
bankruptcy.
13.04 In the event that Licensee becomes insolvent, files a petition
in bankruptcy, has such a petition filed against it,
determines to file a petition in bankruptcy, or receives
notice of a third party's intention to file an involuntary
petition in bankruptcy, Licensee shall immediately notify PHS
in writing. Furthermore, PHS shall have the right to terminate
this Agreement by giving Licensee written notice. Termination
of this Agreement is effective upon Licensee's receipt of the
written notice.
13.05 Licensee shall have a unilateral right to terminate this
Agreement and/or any licenses in any country by giving PHS
sixty (60) days' written notice to that effect.
13.06 PHS shall specifically have the right to terminate or modify,
at its option, this Agreement, if PHS determines that the
Licensee: 1) is not executing the Commercial Development Plan
submitted with its request for a license and the Licensee
cannot otherwise demonstrate to PHS's satisfaction that the
Licensee has taken, or can be expected to take within a
reasonable time, effective steps to achieve practical
application of the Licensed Products or Licensed Processes; 2)
has not achieved the Benchmarks as may be modified under
Paragraph 9.02; 3) has willfully made a false statement of,
or willfully omitted, a material fact in the license
application or in any report required by the license
agreement; 4) has committed a substantial breach of a covenant
or agreement contained in the license; 5) is not keeping
Licensed Products or Licensed Processes reasonably available
to the public after commercial use commences; 6) cannot
reasonably satisfy unmet health and safety needs; or
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7) cannot reasonably justify a failure to comply with the
domestic production requirement of Paragraph 5.01 unless
waived. In making this determination, PHS will take into
account the normal course of such commercial development
programs conducted with sound and reasonable business
practices and judgment and the annual reports submitted by
Licensee under Paragraph 9.02. Prior to invoking this right,
PHS shall give written notice to Licensee providing Licensee
specific notice of, and a ninety (90) day opportunity to
respond to, PHS's concerns as to the previous items 1) to 7).
If Licensee fails to alleviate PHS's concerns as to the
previous items 1) to 7) or fails to initiate corrective action
to PHS's satisfaction, PHS may terminate this Agreement.
13.07 When the public health and safety so require, and after
written notice to Licensee providing Licensee a sixty (60) day
opportunity to respond, PHS shall have the right to require
Licensee to grant sublicenses to responsible applicants, on
reasonable terms, in any Licensed Fields of Use under the
Licensed Patent Rights, unless Licensee can reasonably
demonstrate that the granting of the sublicense would not
materially increase the availability to the public of the
subject matter of the Licensed Patent Rights. PHS will not
require the granting of a sublicense unless the responsible
applicant has first negotiated in good faith with Licensee.
13.08 PHS reserves the right according to 35 U.S.C. Section 209(f)
(4) to terminate or modify this Agreement if it is determined
that such action is necessary to meet requirements for public
use specified by Federal regulations issued after the date of
the license and such requirements are not reasonably satisfied
by Licensee.
13.09 Within thirty (30) days of receipt of written notice of PHS's
unilateral decision to modify or terminate this Agreement,
Licensee may, consistent with the provisions of 37 CFR.
Section 404.l1, appeal the decision by written submission to
the Director of NIH or designee. The decision of the NIH
Director or designee shall be the final agency decision.
Licensee may thereafter exercise any and all administrative or
judicial remedies that may be available.
13.10 Within ninety (90) days of termination of this Agreement under
this Article 13 or expiration under Paragraph 3.02, a final
report shall be submitted by Licensee. Any royalty payments,
including those related to patent expense, due to PHS shall
become immediately due and payable upon termination or
expiration. If terminated under this Article 13, sublicensees
may elect to convert their sublicenses to direct licenses with
PHS pursuant to Paragraph 4.03.
14. GENERAL PROVISIONS
14.01 Neither Party may waive or release any of its rights or
interests in this Agreement except in writing. The failure of
the Government to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall
not constitute a waiver of that
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
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right by the Government or excuse a similar subsequent failure
to perform any such term or condition by Licensee.
14.02 This Agreement constitutes the entire agreement between the
Parties relating to the subject matter of the Licensed Patent
Rights, and all prior negotiations, representations,
agreements, and understandings are merged into, extinguished
by, and completely expressed by this Agreement.
14.03 The provisions of this Agreement are severable, and in the
event that any provision of this Agreement shall be determined
to be invalid or unenforceable under any controlling body of
law, such determination shall not in any way affect the
validity or enforceability of the remaining provisions of this
Agreement.
14.04 If either Party desires a modification to this Agreement, the
Parties shall, upon reasonable notice of the proposed
modification by the Party desiring the change, confer in good
faith to determine the desirability of such modification. No
modification will be effective until a written amendment is
signed by the signatories to this Agreement or their
designees.
14.05 The construction, validity, performance, and effect of this
Agreement shall be governed by Federal law as applied by the
Federal courts in the District of Columbia.
l4.06 All notices required or permitted by this Agreement shall be
given by prepaid, first class, registered or certified mail
properly addressed to the other Party at the address
designated on the following Signature Page, or to such other
address as may be designated in writing by such other Party,
and shall be effective as of the date of the postmark of such
notice.
14.07 This Agreement shall not be assigned by Licensee except a)
with the prior written consent of PHS, such consent to be
reasonably given; or b) as part of a sale or transfer of
substantially the entire business of Licensee relating to
operations which concern this Agreement. Licensee shall notify
PHS within ten (10) days of any assignment of this Agreement
by Licensee.
14.08 Licensee agrees in its use of any PHS-supplied materials to
comply with all applicable Statutes, Regulations, and
guidelines, including Public Health Service and National
Institutes of Health regulations and guidelines. Licensee
agrees not to use the materials for research involving human
subjects or clinical trials in the United States without
complying with 21 CFR Part 50 and 45 CFR Part 46. Licensee
agrees not to use the materials for research involving human
subjects or clinical trials outside of the United States
without notifying PHS, in writing, of such research or trials
and complying with the applicable regulations of the
appropriate national control authorities. Written notification
to PHS of research involving human subjects or clinical
trials outside of the
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 14 - FINAL - MediChem Research, Inc. - May 5, 0000
Xxxxxx Xxxxxx shall be given no later than sixty (60) days
prior to commencement of such research or trials.
14.09 Licensee acknowledges that it is subject to and agrees to
abide by the United States laws and regulations (including the
Export Administration Act of 1979 and Arms Export Control Act)
controlling the export of technical data, computer software,
laboratory prototypes, biological material, and other
commodities. The transfer of such items may require a license
from the cognizant agency of the U.S. Government or written
assurances by Licensee that it shall not export such items to
certain foreign countries without prior approval of such
agency. PHS neither represents that a license is or is not
required or that, if required, it shall be issued.
14.10 Licensee agrees to xxxx the Licensed Products or their
packaging sold in the United States with all applicable U.S.
patent numbers and similarly to indicate "Patent Pending"
status. All Licensed Products manufactured in, shipped to, or
sold in other countries shall be marked in such a manner as to
preserve PHS patent rights in such countries.
14.11 By entering into this Agreement, PHS does not directly or
indirectly endorse any product or service provided, or to be
provided, by Licensee whether directly or indirectly related
to this Agreement. Licensee shall not state or imply that this
Agreement is an endorsement by the Government, PHS, any other
Government organizational unit, or any Government employee.
Additionally, Licensee shall not use the names of NIH, CDC, or
PHS or their employees in any advertising, promotional, or
sales literature without the prior written consent of PHS.
14.12 The Parties agree to attempt to settle amicably any
controversy or claim arising under this Agreement or a breach
of this Agreement, except for appeals of modification or
termination decisions provided for in Article 13. Licensee
agrees first to appeal any such unsettled claims or
controversies to the Director of NIH, or designee, whose
decision shall be considered the final agency decision.
Thereafter, Licensee may exercise any administrative or
judicial remedies that may be available.
14.13 Nothing relating to the grant of a license, nor the grant
itself, shall be construed to confer upon any person any
immunity from or defenses under the antitrust laws or from a
charge of patent misuse, and the acquisition and use of rights
pursuant to 37 CFR Part 404 shall not be immunized from the
operation of state or Federal law by reason of the source of
the grant.
14.14 Paragraphs 4.03, 8.01, 9.06, 9.07, 12.01-12.05, 13.09, 13.10,
and 14.12 of this Agreement shall survive termination of this
Agreement.
SIGNATURES BEGIN ON NEXT PAGE
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 15 - FINAL - MediChem Research, Inc. - May 5, 1995
PHS PATENT LICENSE AGREEMENT--EXCLUSIVE
SIGNATURE PAGE
FOR PHS:
by: /s/ Xxxxxxx XxXxxxx 5/18/95
------------------------------------------------ ----------------
Xxxxxxx XxXxxxx, X.X. Date
Deputy Director, Office of Technology Transfer
National Institutes of Health
Mailing Address for Notices:
Office of Technology Transfer
National Institutes of Health
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
FOR Licensee:
by: /s/ Xxxxxxx X. Xxxxxx 5/8/95
------------------------------------------------- -----------------
Xxxxxxx X. Xxxxxx, Ph.D Date
President
MediChem Research, Inc.
Mailing Address for Notices:
MediChem Research, Inc.
00000 Xxxxx Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 16 - FINAL - MediChem Research, Inc. - May 5, 1995
APPENDIX A -- PATENT OR PATENT APPLICATION
Patent or Patent Application:
USPA SN 07/861,249 "Calanolides, Novel Antiviral Compounds,
Compositions and Uses Thereof"
USPA SN 08/065,618 (CIP of SN 07/861,249) "Calanolides, Novel
Antiviral Compounds, Compositions and Uses Thereof"
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
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XXXXXXXX X -- LICENSED FIELDS OF USE AND TERRITORY
Licensed Territory: World-wide, including all countries, states, provinces and
territories.
Licensed Fields of Use: Treatment of viral infection, viral-related infection or
viral-related disease in humans.
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 18 - FINAL - MediChem Research, Inc. - May 5, 1995
APPENDIX C -- ROYALTIES
Royalties:
Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue
royalty in the amount of FIFTY THOUSAND DOLLARS ($50,000.00) according to the
following payment schedule:
A. FIFTEEN THOUSAND DOLLARS ($15,000.00) within thirty (30) days
from the Effective Date; and
B. THIRTY-FIVE THOUSAND DOLLARS ($35,000.00) within one (1) year
from the Effective Date less a credit of up to Twenty-Five Thousand
Dollars ($25,000.00) for license issue royalties paid by Licensee to
government of Sarawak for the manufacture and sale of Licensed
Products.
Licensee agrees to pay to PHS a nonrefundable minimum annual royalty according
to the following schedule:
A. FIVE THOUSAND DOLLARS ($5,000.00) beginning in 1996 less an
annual credit of up to Two Thousand Five Hundred Dollars ($2,500.00)
for minimum annual royalties paid by Licensee to government of Sarawak
for the manufacture and sale of Licensed Products; and
B. TEN THOUSAND DOLLARS ($10,000.00) for 1998 and subsequent
years less an annual credit of up to Five Thousand Dollars ($5,000.00)
for minimum annual royalties paid by Licensee to government of Sarawak
for the manufacture and sale of Licensed Products.
Licensee agrees to pay PHS earned royalties on Net Sales as follows:
A. FOUR PERCENT (4.0%) of Net Sales by Licensee or an Affiliate
of Licensee of all Licensed Products manufactured or sold in the
Licensed Territory; and;
B. Licensee shall be entitled to a One Hundred percent (100%)
credit against PHS earned royalty payments for earned royalty payments
Licensee must pay to the government of Sarawak for the manufacture and
sale of Licensed Products. Said reduction, however, shall not reduce
the earned royalty payments to PHS below half of the rate provided for
under Paragraph A above.
Licensee agrees to pay PHS Sublicensing Royalties as follows;
A. FOUR PERCENT (4.0%) of Net Sales by Sublicensee, or an
Affiliate of Sublicensee of all Licensed Products manufactured and
sold in the Licensed Territory plus Twenty per cent (20%) of the value
of any consideration received in granting the sublicense.
B. Licensee shall be entitled to a One Hundred percent (100%)
credit against PHS Sublicensing Royalties for sublicensing royalty
payments
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PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 19 - FINAL - MediChem Research, Inc. - May 5, 1995
Licensee must pay to the government of Sarawak. Said reduction,
however, shall not reduce the sublicensing royalty payments to PHS
below half of the rates provided for under Paragraph A above.
Licensee agrees to pay PHS benchmark royalties as follows:
A. TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) upon filing of an
IND application in the United States; and
B. FIFTY THOUSAND DOLLAR8 ($50,000.00) upon completion of Phase I
and initiation of Phase II clinical trials; and
C. ONE HUNDRED THOUSAND DOLLARS ($100,000.00) upon completion of
Phase II and initiation of Phase III clinical trials; and
D. TWO HUNDRED THOUSAND DOLLARS ($200,000.00) upon filing of a
NDA application or equivalent in the United States, Europe or Japan;
and
E. Licensee shall be entitled to a One Hundred percent (100%)
credit against PHS benchmark royalties for benchmark royalty payments
Licensee must pay to the government of Sarawak. Said reduction,
however, shall not reduce the benchmark royalty payments to PHS below
half of the rates individually provided for under Paragraphs A through
D above. One hundred percent (100%) of such benchmark royalty payments
actually made to PHS may be credited against royalties due under
Paragraph 6.03; however, the net royalty payment in any calendar year
may not be lower than the minimum annual royalty specified in Appendix
C although uncredited benchmark royalty payments may be carried
forward into subsequent years.
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 20 - FINAL - MediChem Research, Inc. - May 5, 1995
APPENDIX D -- MODIFICATIONS
PHS and Licensee agree to the following modifications to the Articles and
Paragraphs of this Agreement:
Article Two
2.09 (new) "Effective Date" shall mean the date when the last party
to sign has executed this Agreement.
Article Five
5.03 (revised) Licensee acknowledges that PHS may enter into future
Cooperative Research and Development Agreements (CRADAs) under the Federal
Technology Transfer Act of 1986 that relate to the subject matter of this
Agreement. Licensee agrees not to unreasonably deny requests for sublicense or
cross-license rights from such future collaborators with PHS when acquiring such
derivative rights is necessary in order to make a CRADA project feasible.
Licensee may request an opportunity to join as a party to the proposed CRADA,
such request not to be unreasonably denied by PHS.
5.04 (revised) DHHS has responsibility for funding basic biomedical
research, for funding medical treatment through programs such as Medicare and
Medicaid, for providing direct medical care and, more generally, for protecting
the health and safety of the public. Because of these responsibilities, and the
public investment in the research that culminated in the Licensed Patent Rights,
Licensee agrees, upon regulatory approval for marketing, to set up a special
patient access program in the United States so that Licensed Products may be
provided to individuals who are unable to afford them.
5.05 (revised) In addition to the reserved license of Paragraph
5.01 above, PHS reserves the right to grant nonexclusive licenses to make and to
use, but not to sell or have sold, the inventions defined by the Licensed Patent
Rights for purposes of research involving the inventions themselves, and not for
purposes of commercial manufacture or in lieu of purchase if the inventions are
available as commercial products for research purposes. The purpose of this
research license is to encourage basic research, whether conducted at an
academic or corporate facility. In order to safeguard the Licensed Patent
Rights, however, PHS shall consult with Licensee before granting to commercial
entities a research license or providing to them research samples of the
materials claimed in the Licensed Patent Rights. In the event that Licensee can
provide convincing written evidence to PHS that a commercial entity that has
been granted a research license to Licensed Patent Rights is developing the
inventions for commercial manufacture or in lieu of purchase if the inventions
are available as commercial products, then Licensee can request that PHS
terminate its research license with such commercial entities, such request not
to be unreasonably denied.
Article Six
6.01 (revised) License agrees to pay to PHS a noncreditable,
nonrefundable license issue royalty as set forth in Appendix C within thirty
(30) days from the Effective Date of this Agreement.
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 21 - FINAL - MediChem Research, Inc. - May 5, 1995
6.02 (revised) Licensee agrees to pay to PHS a nonrefundable
minimum annual royalty as set forth in Appendix C. The minimum annual royalty is
due and payable on January 1 of each calendar year and may be credited against
any earned royalties due for sales made in that year.
6.08 (revised) As an additional royalty, Licensee agrees to pay PHS
upon submission of a statement and request for payment, an amount equivalent to
all reasonable expenses previously incurred by PHS in the preparation, filing,
prosecution, and maintenance of Licensed Patent Rights according to the
following schedule: one-third within sixty (60) days; one-third within one (1)
year of the Effective Date of this Agreement; and one-third within two (2) years
of the Effective Date of this Agreement. Licensee further agrees to pay PHS
annually, within sixty (60) days of PHS's submission of a statement and request
for payment, a royalty amount equivalent to all such future patent expenses
incurred during the previous calendar year, as of the date the statement and
request for payment is sent by PHS to Licensee. Licensee may elect to surrender
its rights in any country of the Licensed Territory under any Licensed Patent
Rights upon sixty (60) days' written notice to PHS and owe no payment obligation
under this paragraph for subsequent patent-related expenses incurred in that
country.
Article Seven
7.01 (revised) Upon Effective Date of this Agreement, Licensee
agrees to take the responsibility for, as well as pay for, but to consult with
PHS in, the preparation, filing, prosecution, and maintenance of any and all
patent applications or patents included in the Licensed Patent Rights and shall
furnish copies of relevant patent-related documents to PHS, who shall retain
its principle power of attorney. Licensee may elect to surrender its rights in
any country of the Licensed Territory under any Licensed Patent Rights upon
sixty (60) days' written notice to PHS and owe no payment obligation under this
paragraph for subsequent patent-related expenses incurred in that country.
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 22 - FINAL - MediChem Research, Inc. - May 5, 0000
XXXXXXXX X -- BENCHMARKS
Licensee agrees to the following Benchmarks for its performance under this
Agreement and, within ten (10) days of achieving a Benchmark, shall notify PHS
that the Benchmark has been achieved:
A. DEVELOPMENT OF CALANOLIDE AS A THERAPEUTIC FOR TREATMENT OF HIV
INFECTION
1. Begin negotiations for an agreement with Sarawak as to the
extent of return to Sarawak from eventual marketing of synthetic
licensed product within one (1) month of the Effective Date of the
Agreement. Complete agreement with Sarawak within nine (9) months of
the Effective Date of the Agreement.
2. Develop and validate a plasma assay (using mouse, rat and dog
plasma) for (+)Calanolide A. Compare behavior of (-)Dihydrocalanolide
B (to be supplied by the National Cancer Institute (NCI)) in same. To
be completed by February 28, 1996.
3. Determine pharmacology of (+)Calanolide A in the mouse, rate
and dog following single dose IV administration. Provide results in
the mouse to NCI to allow scheduling of efficacy and combination
studies in hollow fiber and PBL-SCID models. To be completed by March
31, 1996.
4. Develop and validate with respect to shelf stability of
product a formulation of (+)Calanolide suitable for use in further
toxicologic and eventual clinical evaluation. To be completed by March
31, 1996.
5. Using the results in (3) to select dose and schedule, conduct
initial dose-ranging studies in the rate and the dog with a frequency
of administration IV that would support a two-week duration clinical
trial. To be completed by June 30, 1996.
6. Formulate a quantity of GMP-prepared Calanolide A sufficient
to complete IND-directed toxicology studies and two Phase I studies.
To be completed by June 30, 1996.
7. Conduct IND-directed toxicology studies in the rat and the dog
according to protocols reviewed by NCI's Toxicology and Pharmacology
Branch to support a two-week IV infusion study. To be completed by
September 30, 1996.
8. Complete reports and quality control to support IND-filing. To
be completed by November 30, 1996.
9. File IND. To be completed by December 31, 1996.
10. Commence two-week infusion Phase I clinical trial. To be
completed by March 31, 1997.
11. Commence Phase II clinical trials by July 31, 1997.
NIH Office of Technology Transfer
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MODEL 940110 - Page 23 - FINAL - MediChem Research, Inc. - May 5, 1995
12. Commence Phase III clinical trials (if necessary) by
September 30, 1998.
13. Submit NDA by December 31, 1999.
B. DEVELOPMENT OF CALANOLIDE A AS A THERAPEUTIC FOR TREATMENT OF NON-HIV
VIRAL INFECTIONS
1. Begin assessment of activity of Calanolide A in primary
screens against a panel of non-HIV viral strains which include but are
not limited to: Herpes Simplex Virus-2, Herpes Simplex Virus-2,
Cytomegalo Virus, Variella Zoster Virus, Xxxxxxx-Xxxx Virus,
Adenovirus Type 5, Parainfluenza Type 3 Virus, Respiratory Syncytial
Virus, Hepatitis B Virus, Measles Virus, Influenza A (H1N1), Influenza
A (H3N2) by December 31, 1995.
2. Conclude analysis of activity of Calanolide A in primary
screens against non-HIV viral strains by March 31, 1996.
3. Election of non-HIV anti-viral therapeutic areas demonstrating
potential for development and submission of development plan for those
indications by June 30, 1996.
C. DEVELOPMENT OF CALANOLIDE-RELATED COMPOUNDS, INCLUDING COSTATOLIDE, AS
THERAPEUTICS FOR TREATMENT OF VIRAL INFECTIONS
1. Synthesize and submit to NCI for further testing at least one
backup compound to Calanolide A per calendar year from 1995 through
1997.
2. Election of Calanolide-related compounds demonstrating
potential for development and submission of development plan for those
compounds by December 31, 1997.
NIH Office of Technology Transfer
PHS PATENT LICENSE AGREEMENT - EXCLUSIVE
MODEL 940110 - Page 24 - FINAL - MediChem Research, Inc. - May 5, 0000
XXXXXXXX X
MEDICHEM/STATE GOVERNMENT AGREEMENT
LICENSE AGREEMENT
This Agreement made this 27th day of December, 1995 between MEDICHEM
RESEARCH, INC., 00000 Xx. Xxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 (hereinafter
'MEDICHEM') of the one part and the GOVERNMENT OF SARAWAK, Tingkat 17, Wisma
Bapa Xxxxxxxx, Xxxxx Xxxx 00000 Xxxxxxx, Xxxxxxx, Xxxxxxxx (hereinafter
'SARAWAK') of the other part.
WHEREAS there exists An Agreement between the United States Government
National Institutes of Health (NIH) and SARAWAK related to Calanolide compounds
WHEREAS MEDICHEM is the NIH licensee under U.S. Patent Application
Serial Nos. 07/861,249 and 08/065,618; and Licence is granted by NIH subject to
MEDICHEM entering into this Agreement with SARAWAK
WHEREAS MEDICHEM wishes to obtain an exclusive license for SARAWAK's
entire right, title, and interest relating to the said Calanolide compounds in
the Agreement with NIH;
SARAWAK and MEDICHEM agree as follows:
ARTICLE I DEFINITION
SARAWAK and MEDICHEM mutually agree and declare as follows:
"LICENSED PRODUCT(S)" means tangible materials which, in the course of
manufacture, use, or sale would, in the absence of this Agreement, infringe one
or more claims of NIH Licensed Patent Rights that have not been held invalid or
unenforceable by an unappealed or unappealable judgment of a court of competent
jurisdiction and where applicable, includes Licensed Processes.
"LICENSED PROCESS(ES)" means processes which, in the course of being
practiced would, in the absence of this Agreement, infringe one or more claims
of the Licensed Patent Rights that have not been held invalid or unenforceable
by an unappealed or unappealable judgment of a court of competent jurisdiction.
"NET SALES" means the total gross receipts for sales of Licensed
Products or practice of Licensed Processes by or on behalf of Licensee or its
sublicensees, and from leasing, renting, or otherwise making Licensed Products
available to others without sale or other dispositions, whether invoiced or not,
less returns and allowances actually granted in the normal course of trading,
packing costs, insurance costs, freight out, taxes or excise duties imposed on
the transaction (if separately invoiced), and wholesale and cash discounts in
amounts customary in the trade. No deductions shall be made for commissions paid
to individuals, whether they be with independent sales agencies or regularly
employed by Licensee, or sublicensees, and on its payroll, or for the cost of
collections.
"FIRST COMMERCIAL SALE" means the initial transfer by or on behalf of
Licensee or its sublicensees of Licensed Products or the initial practice of a
Licensed Process by or on behalf
2
of Licensee or its sublicensees in exchange for cash or some equivalent to which
value can be assigned for the purpose of determining Net Sales.
EAST ASIA REGION
China
Korea
Japan
Hong Kong
Macau
Taiwan
Myanmar (Burma)
Thailand
Vietnam
Laos
Malaysia
Singapore
The Philippines
Brunei
Indonesia
Papua New Guinea
Cambodia
Licensed Territory - Worldwide
ARTICLE II LICENSE GRANT
SARAWAK hereby agrees to the grant of License by NIH to MEDICHEM to
make, have made, use and sell License Product in the Licensed Territory under
any right, title or interest that SARAWAK may have related to the Licensed
Product. MEDICHEM shall, subject to the conditions stipulated in this Agreement,
have the right to grant sublicences.
ARTICLE III PAYMENTS
MEDICHEM agrees to pay to SARAWAK a noncreditable, nonrefundable
license issue royalty for the manufacturing and sale of Licensed Products in the
amount of SIXTEEN THOUSAND
3
SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS (US$16,667.00) according to the
following payment schedule:
A. FIVE THOUSAND U.S. DOLLARS (US$5,000.00) within thirty (30)
days from the Effective Date of this Agreement; and
B. ELEVEN THOUSAND SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS
(US$11,667.00) within one (1) year from the Effective Date.
MEDICHEM agrees to pay to SARAWAK a nonrefundable minimum annual
royalty according to the following schedule:.
A. ONE THOUSAND SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS
(US$1,667.00) beginning in 1996.
B. THREE THOUSAND THREE HUNDRED AND THIRTY THREE U.S. DOLLARS
(US$3,333.00) for 1998 and subsequent years.
MEDICHEM agrees to pay SARAWAK earned royalties on Net Sales as follows:-
ONE AND ONE- THIRD PERCENT (1.33%) of Net Sales by Licensee or an Affiliate of
Licensee of all Licensed Products manufactured or sold in the Licensed
Territory;
4
except the royalty in the East Asia Region shall be two percent (2%) of Net
Sales.
MEDICHEM agrees to pay SARAWAK Sublicensing Royalties as follows:
ONE AND ONE-THIRD PERCENT (1.33% of Net Sales by Sublicensee, or an Affiliate of
Sublicensee of all Licensed Products manufactured and sold in the Licensed
Territory (except for the East Asia Region, the royalties rate shall be two per
cent (2.0%) of Net Sales) PLUS Six and Two-Thirds percent (6.6%) of the value of
any consideration received or receivable by MEDICHEM in granting the sublicense.
MEDICHEM agrees to pay SARAWAK benchmark royalties as follows:
A. EIGHT THOUSAND THREE HUNDRED AND THIRTY THREE U.S. DOLLARS
(US$8,333.00) upon filing of an IND application in the United States; and
B. SIXTEEN THOUSAND SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS
(US$16,667.00) upon completion of Phase I and initiation of Phase II clinical
trials; and
5
C. THIRTY-THREE THOUSAND THREE HUNDRED AND THIRTY THREE U.S.
DOLLARS (US$33,333.00) upon completion of Phase II and initiation of
Phase III clinical trials; and
D. SIXTY-SIX THOUSAND SIX HUNDRED AND SIXTY SEVEN U.S. DOLLARS
(US$66,667.00) upon filing of a NDA application or equivalent in the
United States, Europe or Japan.
One Hundred percent (100%) of such benchmark royalty payments actually
made to SARAWAK may be credited against earned royalties due above.
MEDICHEM agrees with SARAWAK that the computation of Net Sales shall
be based on the sale price of the Licensed Products published from time to time
by MEDICHEM as the selling price of the Licnesed Products to MEDICHEM's Licensed
or Sub-Licencees, and the published Sale Price shall be made available to
SARAWAK upon request by the latter.
ARTICLE IV CONTINUATION OF PAYMENT
Royalty payments hereunder shall be made in U.S. dollars within thirty
days from the end of each calendar year throughout the period of validity of
this Agreement. The payment shall be accompanied with a statement of accounts
duly certified by auditors of MEDICHEM sufficient to determine how the royalty
payment was determined or assessed.
6
SARAWAK shall have the right to inspect and audit MEDICHEM's
accounting, sales and other records to the extent necessary to determine or
assess royalties due hereunder. SARAWAK shall pay the expenses of any such
inspection of audits.
ARTICLE V TERM AND TERMINATION
1. TERM. Except as otherwise provided in this Agreement, this
Agreement shall terminate with the expiration of the period of validity of NIH
patent covering Licensed Product.
2. TERMINATION. MEDICHEM may terminate this Agreement during the
term of the license granted for any reason by giving SARAWAK ninety (90) days
prior written notice, in which case the license granted pursuant to Article II
shall also terminate. MEDICHEM agrees on termination to discontinue use,
manufacture, and sale of Licensed Product for which MEDICHEM was obligated to
pay just prior to such termination and account for the stocks of any products
manufactured from the Licensed Products. Such stocks shall be sold or disposed
of under the supervision of or with the agreement of SARAWAK and the proceeds
derived therefrom, after deducting the costs of such sale, be shared by MEDICHEM
and SARAWAK equally.
3. OBLIGATIONS UPON TERMINATION. MEDICHEM shall be liable for all
royalty payments due to SARAWAK during the ninety (90) days notice period.
7
4. TERMINATION FOR DEFAULT. Either party may terminate this
Agreement on written notice to the other party, effective immediately, if any of
the following events of default should occur and not be cured within sixty (60)
days after written notice from the Notifying party describing the default:
(i) the material failure of the notified party to meet its
obligations hereunder; or
(ii) the filing by or against SARAWAK or MEDICHEM of a
petition under any bankruptcy or insolvency law, an assignment for the benefit
of MEDICHEM's creditors or the appointment of a receiver for substantially all
of MEDICHEM's property. Such termination shall be without prejudice to any
rights or remedies which the non-defaulting party hitherto may have against the
party in default, for any breach of this Agreement.
ARTICLE VI WARRANTIES; DISCLAIMERS; INDEMNIFICATION
1. Each party represents and warrants to the other party that it
has no pre-existing contractual or other obligations to any third party which
preclude it from entering into this Agreement and meeting its obligations
hereunder, or which conflict with any provision of this Agreement.
2. Each party shall have the status of an independent contractor
without the authority legally to bind the other party, its officers, directors
or employees. This Agreement shall not
8
be deemed to have created any partnership between the parties hereto in relation
to any of the matters contained in this Agrement.
ARTICLE VII TRAINING SARAWAK PERSONNEL
MEDICHEM agrees to train, or to provide scientific training for, two
(2) SARAWAK designated scientists in technology related to the synthesis of
Calanolide compounds at MEDICHEM'S Lemont, Illinois facilities for up to one
year. SARAWAK will pay for all transportation, compensation and living expenses
for such scientists. It is acceptable to MEDICHEM if the SARAWAK scientists
participate in clinical trials, if this participation is approved by the
institution where the clinical trials are carried out.
ARTICLE VIII MISCELLANEOUS
1. GOVERNING LAW. This Agreement shall be deemed made in and
construed in accordance with the law of
England.
2. ACTIONS SURVIVE. All causes of action accruing to either party
under this Agreement shall survive termination for any reason, as shall those
provisions which expressly state such survival unless such survival is
conditional and the requisite conditions(s) has been fulfilled prior to or on
such termination.
9
3. ENTIRE AGREEMENT. This Agreement constitutes the only and
entire understanding between the parties concerning its subject matter.
4. AMENDMENTS. This Agreement may be amended or modified only in
writing signed by both parties.
5. ARBITRATION. All disputes which arise out of this Agreement
shall be settled by arbitration in accordance with the conciliation and
arbitration rules and regulations of the International Arbitration Centre in
England to which the parties hereto submit. The arbitrator shall have background
and expertise relating to the issue(s) involved. The arbitration shall be in a
mutually agreed location and the UNCITRAL (United Nations Commission on
International Trade Laws) rules shall apply to such arbitration. The parties
shall share equally the fees and expenses of the arbitration. The arbitrator's
decision shall be binding, final and non-appealable.
6. FORCE MAJEURE. If either party is prevented from performing
any obligation hereunder by reason of fire, explosion, strike, labor dispute,
casualty, accident, lack or failure of transportation facilities, flood, war,
civil commotion, acts of God, or any law, order or decree of any government or
subdivision thereof, then such party shall be excused from performance hereunder
to the extent and for the duration of such prevention, provided that such party
first notifies the other party in writing of such prevention.
10
7. PUBLICITY. Except as required by law or applicable stock
exchange rule, no public statements shall be made by either party concerning
this Agreement, its subject matter or its existence without prior consultation
with and the approval of the other party.
8. SEVERABILITY. In the event that any provision of this
Agreement shall be found to be illegal, invalid or unenforceable for any reason,
such shall not affect the validity of the remainder of this Agreement, which
shall be construed and interpreted as though such provision was not present.
9. NOTICES. Notices may be given to an officer of a party by
(i) personal delivery,
(ii) telex or facsimile transmission, or
(iii) first class, registered mail addressed as follows:
If to MEDICHEM: President
00000 Xxxxx Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
If to SARAWAK: State Financial Secretary
Pejabat Setiausaha Kewangan Negeri
Tingkat 17
Wisma Bapa Malaysia
Petra Jaya 93502 Kuching
Sarawak, Malaysia
11
Notice given under (i) above shall be deemed given on the date of
delivery and if given under (ii) shall be deemed to have been received 24 hours
after the time of transmission. Notice under (iii) above shall be deemed given
on the second week after that on which the letter is mailed.
10. BINDING EFFECT. This Agreement shall inure to the benefit of
and be binding on each party's successors in interest and assigns.
11. ASSIGNMENT. Except as otherwise contemplated by this
Agreement, either party may with the prior written consent of the other, assign
this Agreement only in connection with the sale or disposition of the entire
business of such party or that portion to which this Agreement pertains.
12. SUB-LICENCE. MEDICHEM may grant a sub-license to any third
party, subject to the assignee agreeing to the payment of royalty stipulated in
Article III hereinabove.
13. In the event MEDICHEM has no further interest in any LICENSED
PRODUCT, MEDICHEM shall notify SARAWAK and SARAWAK shall have whatever right,
title and interest it had in the LICENSED PRODUCT and MEDICHEM may be willing to
negotiate the availability of MEDICHEM's data under terms to be agreed upon.
12
IN WITNESS WHEREOF, this Agreement has been executed in duplicate
originals on behalf of the parties by their below authorized officers as of the
date first written above. This Agreement is effective on the date that the
Government of Sarawak approves the Agreement.
MEDICHEM RESEARCH, INC.
BY: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Its: President
---------------------------------
Date: January 25, 1996
---------------------------------
GOVERNMENT OF SARAWAK
By: /s/ [ILLEGIBLE]
---------------------------------
Its: STATE SECRETARY, SARAWAK
---------------------------------
DATE: FEBRUARY 24, 1996.
---------------------------------
13
APPENDIX C
MEDICHEM/VITA INVEST AGREEMENT
MEDICHEM Technical Information shall mean all unpatented information
related to the active ingredient (+)-calanolide A, or use or manufacture
thereof.
Net Sales Price shall mean the gross sales price less standard trade
allowances and discounts not to exceed 5% of the gross sales price.
II. LICENSE GRANT
1. All previous agreements between VITA-INVEST and MEDICHEM are
cancelled and neither party has any claims against each other with respect to
the prior agreements.
2. MEDICHEM hereby grants VITA-INVEST an exclusive license to use
and sell Licensed Product in Spain and Portugal, and including the right to
sublicense Licensed Product in Spain which includes its right to use and sell
Licensed Product in Spain and Portugal.
3. MEDICHEM hereby exclusively sublicenses VITA-INVEST under
MEDICHEM's right and interest in Patent Rights and Technical Information
licensed to MEDICHEM for using or selling Licensed Product in Spain and
Portugal. Such sublicenses shall be subject to the terms of the license to
MEDICHEM from the NIH appended to this Agreement as Exhibit B.
2
III. PAYMENTS
1. VITA-INVEST shall reimburse MEDICHEM within thirty (30) days
for any licensing payments of 4% of Net Sales Price of Licensed Product sold in
Spain and Portugal, of which 2.67% of Net Sales Price of Licensed Product sold
in Spain and Portugal is paid to NIH directly by MEDICHEM (Exhibit B).
2. MEDICHEM agrees to supply VITA-INVEST at VITA-INVEST's request
with Licensed Product for sale in Spain and Portugal at MEDICHEM's manufacturing
costs up to $3 million dollars and VITA-INVEST shall pay MEDICHEM 15% above
MEDICHEM's manufacturing costs for such product thereafter. In the event that
MEDICHEM is unable or unwilling to supply VITA-INVEST with Licensed Product,
then MEDICHEM agrees to provide VITA-INVEST with information necessary for the
manufacture of Licensed Product and VITA-INVEST shall have the right to
manufacture in Spain and to sell Licensed Product in Spain and Portugal.
3. VITA-INVEST shall bear the cost of obtaining regulatory
approval to market Licensed Product in Spain and Portugal. MEDICHEM shall
provide VITA-INVEST with all technical information in the possession of MEDICHEM
and its licensees for obtaining regulatory approval in Spain and Portugal.
4. VITA-INVEST shall have the right to audit MEDICHEM's books to
the extent necessary to determine MEDICHEM's manufacturing costs hereunder.
VITA-INVEST shall pay the expenses of any such audits.
3
5. MEDICHEM will provide VITA-INVEST with a semi-annual summary
report on their research work and licensing activity on the active ingredient
(+)-calanolide A.
IV. INFRINGEMENT
1. Each party agrees to notify the other party of infringement of
MEDICHEM's Patent Rights by third parties.
2. Either party may bring suit or action for infringement of the
MEDICHEM's Patent Rights in Spain at its expense. If it fails to take action
with respect to such infringement within three (3) months following receipt of
reasonable notice thereof, and other party may bring suit or action for
infringement at the litigating party's expense, and if necessary or desirable
the other party may be joined as a party plaintiff and shall execute all papers
and perform all such other acts as may reasonably be requested by the litigating
party. Any amount recovered, whether by judgment, award, decree or settlement,
after deduction by the litigating party of an amount equal to the expenses
incurred by it in conducting such suit or action, shall be divided equally
between MEDICHEM and VITA-INVEST.
V. TERM AND TERMINATION
1. TERM. Except as otherwise provided in this Agreement, this
Agreement shall terminate with the expiration of the last to expire patent
within Patent Rights or fifteen (15) years after first commercial sale of
Licensed Product in Spain whichever of the two conditions occurs last.
4
2. TERMINATION. VITA-INVEST may terminate this Agreement during
the term of the license granted for any reason by giving MEDICHEM ninety (90)
days prior written notice, in which case the license granted pursuant to Section
II shall also terminate. VITA-INVEST agrees to discontinue use and sale of
Licensed Product for which VITA-INVEST was obligated to pay just prior to such
termination.
3. TERMINATION FOR DEFAULT. Either party may terminate this
Agreement on written notice to the other party, effective immediately, if any of
the following events of default should occur and not be cured within thirty (30)
days after written notice from the notifying party describing the default: (i)
the material failure of the notified party to meet its obligations hereunder; or
(ii) the filing by or against VITA-INVEST or MEDICHEM of a petition under any
bankruptcy or insolvency law, an assignment for the benefit of VITA-INVEST's or
MEDICHEM's creditors or the appointment of a receiver for substantially all of
VITA-INVEST's or MEDICHEM's property.
VI. WARRANTIES, DISCLAIMERS; INDEMNIFICATION
1. Each party represents and warrants to the other party that it
has no pre-existing contractual or other obligations to any third party which
preclude it from entering into this Agreement and meeting its obligations
hereunder, or which conflict with any provision of this Agreement.
2. Each party represents and warrants to the other party that it
shall use reasonable efforts to achieve the objectives of the license. However,
the parties agree that no guarantees or warranties are made or intended as to
the success or outcome of
5
this license on an overall or interim basis, or as to the achievement of the
various goals, steps, tasks, time schedules and the other particulars of the
project.
3. VITA-INVEST will not be liable for Product Liability Claims
when such claims arise from the product made by MEDICHEM and sold by VITA-INVEST
in Spain and Portugal.
4. MEDICHEM shall not be liable to VITA-INVEST, its Affiliates or
the officers, directors or employees of any of them for any consequential
damages arising out of any breach of this Agreement by such party, including
without limitation any lost profits or incidental or indirect damages.
5. Each party shall have the status of an independent contractor
without the authority legally to bind the other party, its officers, directors
or employees.
VII. MISCELLANEOUS
1. GOVERNING LAW. This Agreement sha1l be deemed made in and
construed in accordance with the law of Delaware.
2. ACTIONS SURVIVE. All causes of action accruing to either party
under this Agreement shall survive termination for any reason, as shall those
provisions which expressly state such survival unless such survival is
conditional and the requisite condition(s) has been fulfilled prior to or on
such termination.
3. ENTIRE AGREEMENT. This Agreement constitutes the only and
entire understanding between the parties concerning its subject matter.
4. AMENDMENTS. This Agreement may be amended or modified only in
writing signed by both parties.
6
5. ARBITRATION. All disputes which arise out of this Agreement
shall be settled by arbitration in accordance with the conciliation and
arbitration rules and regulations of the International Chamber of Commerce in
Switzerland to which the parties hereto submit. The arbitrator shall have
background and expertise relating to the issue(s) involved. The arbitration
shall be in a mutually agreed location. The parties shall share equally the cost
of such arbitration. The arbitrator's decision shall be binding, final and
non-appealable.
6. FORCE MAJEURE. If either party is prevented from performing
any obligation hereunder by reason of fire, explosion, strike, labor dispute,
casualty, accident, lack or failure of transportation facilities, flood, war,
civil commotion, acts of God, or any law, order or decree of any government or
subdivision thereof, then such party shall be excused from performance hereunder
to the extent and for the duration of such prevention, provided that such party
first notifies the other party in writing of such prevention.
7. PUBLICITY. Except as required by law or applicable stock
exchange rule, no public statements shall be made by either party concerning
this Agreement, its subject matter or its existence without prior consultation
with and the approval of the other party.
8. SEVERABILITY. In the event that any provision of this
Agreement shall be found to be illegal, invalid or enforceable for any reason,
such shall not affect the validity of the remainder of this Agreement, which
shall be construed and interpreted as though such provision was not present.
7
9. NOTICES. Notices may be given to an officer of any party by
(i) personal deliver, (ii) telex or telecopy, or (iii) first class, registered
mail addressed as follows:
If to MEDICHEM: 00000 Xxxxx Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
If to VITA-INVEST: c/Fontsanta, 12-14
08970 Sant. Xxxx Xxxxx
Barcelona, Spain
Notice given under (i) or (ii) above shall be deemed given on the date of
delivery or telecommunication transmission. Notice under (iii) above shall be
deemed given on the third business day after that on which the letter is mailed.
10. BINDING EFFECT. This Agreement shall inure to the benefit of
and be binding on each party's successors in interest and assigns.
11. ASSIGNMENT. Except as otherwise contemplated by this
Agreement, either party may assign this Agreement only in connection with the
sale or disposition of the entire business of such party or that portion to
which this Agreement pertains. Either party may assign this Agreement to an
Affiliate(s) without permission of the other party.
8
IN WITNESS WHEREOF, this Agreement has been executed in duplicate originals
on behalf of the parties by their authorized officers as of the date first
written above.
This Agreement has originally been executed in both the English and Spanish
languages. In the event that any disagreement between the two versions may
arise, the English version shall take legal precedence over the Spanish version.
MEDICHEM RESEARCH, INC.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------
Its PRESIDENT
-------------------------
Date 12/14/96
------------------------
VITA-INVEST, S.A.
By /s/ [ILLEGIBLE]
--------------------------
Its MANAGING DIRECTOR
-------------------------
Date DECEMBER 18, 1996
------------------------
9
LICENSE AGREEMENT
This Agreement, made this 14th day of December, 1996, between MediChem
Research, Inc., 00000 Xxxxx Xxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, X.X.X.
(hereinafter MEDICHEM), and Vita-Invest, S.A., c/Fontsanta, 12-14, 08970 Sant.
Xxxx Xxxxx, Barcelona, Spain (hereinafter VITA-INVEST).
WHEREAS, MEDICHEM and VITA-INVEST have entered into a
Joint Venture
Agreement and license agreement related to the development of (+)-calanolide A
(Exhibit A) and now wish to enter into this revised Licensing Agreement which
grants VITA-INVEST exclusive rights to use and sell Licensed Product in Spain
and Portugal.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, the parties agree as follows:
I. DEFINITIONS
Licensed Product shall mean the active ingredient (+)-calanolide A,
the making, using or selling of which utilized MEDICHEM Patent Rights or
MEDICHEM Technical Information.
MEDICHEM Patent Rights shall mean any patents in which MEDICHEM has
any right, title or interest, including patents licensed to MEDICHEM which
relate to the active ingredient (+)-calanolide A or the use or manufacture of
such agent.
APPENDIX D
SCHEDULE FOR REMITTANCE OF STOCK SUBSCRIPTION FUNDS
BY XXXXX ON BEHALF OF SARAWAK GOVERNMENT
APPENDIX D
SCHEDULE FOR REMITTANCE OF STOCK SUBSCRIPTION FUNDS
BY XXXXX ON BEHALF OF SARAWAK GOVERNMENT
SUBSCRIPTION
AMOUNT US $
TIME PERIOD BENCHMARK @ $10,000/SHARE SHARE
----------- --------- --------------- -----
January, 1997 Execution of J.V. agreement
Incorporation of J.V. Company
Appointment of XXXXX'x and
MEDICHEM's Directors to Board
of COMPANY
Assignment/Transfer of
MEDICHEM's patents, etc.
Opening of Bank account for
COMPANY; and appointment of
joint signatories for account $ 1,200,000 120
March 15, 1997 Phase IA Trial begins
April 30, 1997 Review of Phase IA Trial
Progress
Progress if deemed satisfactory $ 800,000 80
June 15, 1997 Review of Phase IA Trial
Progress
Progress if deemed satisfactory $ 1,000,000 100
July 15, 1997 Board of Directors' approval
for Phase lB after progress
review $ 1,264,000 126.4
August 31, 1997 Review of Phase lB trial
progress
Progress if deemed satisfactory $ 1,078,000 107.8
Nov. 30, 1997 Review of Phase lB Trial
progress
Progress if deemed satisfactory $ 658,000 65.8
January, 1998 Board of Directors' approval
for Phase II
Progress if deemed satisfactory $ 3,000,000 300
----------- -----
Total $ 9,000,000 900
Note(1) If at any stage XXXXX feels that the progress of the Trial
is unsatisfactory, XXXXX can elect to terminate, with 15
days written notice, its participation in the joint venture
and thereafter, released from its obligations to provide
further funds.
Note (2) At time of approval for Phase II, Board of Directors shall
determine how to raise the balance of US $12,000,000
required for the completion of Phase II trials. Such funds
should be available from the beginning of February, 1998.
Note (3) All remittances shall be made to a bank account in USA in
the name of the joint venture company and operated jointly
by 2 Treasurers of the Company with XXXXX and MEDICHEM
appointing one Treasurer each.
APPENDIX E
MEDICHEM VESTING OF SHARES
Shares
------
February 01, 1997 120
March 31, 1997 80
May 31, 1997 100
June 30, 1997 126.4
August 31, 1997 107.8
October 31, 1997 65.8
December 01, 1997 300
------
900
20
APPENDIX F
ARTICLES OF INCORPORATION
PAGE 0
XXXXX XX XXXXXXXX
XXXXXX XX XXX XXXXXXXXX XX XXXXX
I, XXXXXX X. XXXXX, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "SARAWAK MEDICHEM PHARMACEUTICALS, INC.", FILED IN THIS OFFICE
ON THE TWENTY-SEVENTH DAY OF DECEMBER, A.D. 1996, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Xxxxxx X. Xxxxx
[SEAL] ---------------------------------------------
XXXXXX X. XXXXX, SECRETARY OF STATE
2699346 8100 AUTHENTICATION: 8263196
960385640 DATE: 12-27-96
Certificate of Incorporation
of
Sarawak Medichem Pharmaceuticals, Inc
For the purpose of forming a corporation (the "Corporation") under the
General Corporation Law of the State of Delaware (the "Delaware General
Corporation Law"), the undersigned incorporator certifies as follows:
Article 1
Name
The name of the Corporation is Sarawak Medichem Pharmaceuticals, Inc.
Article 2
Initial Registered Office and Agent
The address of the Corporation's registered office in the State of Delaware
is Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of
New Castle. The name of its registered agent at this address is The Corporation
Trust Company.
Article 3
Purpose
The nature of the business or purposes to be conducted or promoted by the
Corporation are to engage in any lawful act or activity for which corporations
may be organized under the Delaware General Corporation Law.
Article 4
Authorized Shares
The total number of shares of stock which the Corporation shall have
authority to issue is 3,000 shares of Common Stock, par value $0.01 per share.
Article 5
By-Laws
The Corporation's board of directors shall have the power to adopt, amend
or repeal the Corporation's by-laws.
Article 6
Election of Directors
Elections of directors need not be by written ballot unless the
Corporation's by-laws so provide.
Article 7
Liability of Directors
No director of the Corporation shall have personal liability to the
Corporation or its stockholders for monetary damages for breach of his or her
fiduciary duty as a director, except for liability: (1) for a breach of the
directors duty of loyalty to the Corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the director derived an
improper personal benefit.
If the Delaware General Corporation Law is amended to authorize a further
limitation or elimination of the liability of directors, then in addition to the
limitation on personal liability provided in this Article 7, the liability of a
director of the Corporation shall be further limited or eliminated to the
fullest extent permitted by the Delaware General Corporation Law as so amended.
No amendment or repeal of this Article 7 shall apply to or have any effect
on the liability or alleged liability of any director of the Corporation for or
in respect of acts or omissions occurring prior to the amendment or repeal.
Article 8
Indemnification of Directors and Officers
The Corporation shall indemnify each person who was or is made a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
other than an action by or in the right of the Corporation (a "proceeding") by
reason of the fact that he or she, or the person of whom he or she is the legal
representative, is or was a director or officer of the Corporation or, while a
director or officer, is or was serving at the corporation's request as a
director, officer, trustee, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
which be or she reasonably incurs in connection with the proceeding, to the
fullest extent authorized by the Delaware General Corporation Law, as it now
exists and as it may be amended (but in the case of any amendment, only to the
extent that the amendment authorizes the Corporation to provide broader
indemnification rights than were permitted prior to the
-2-
amendment). This right to indemnification shall continue as to a person who has
ceased to be a director or officer of the Corporation and shall inure to the
benefit of his or her heirs and legal representatives.
The right to indemnification under this Article 8 shall include the right
to be paid by the Corporation the expenses incurred in defending any proceeding
in advance of its final disposition. If required by the Delaware General
Corporation Law, however, the payment of the expenses incurred by a director or
officer of the Corporation in his or her capacity as such (and not in any other
capacity in which he or she renders or rendered service while serving as an
officer or director) shall be made only on delivery of an undertaking by the
director or officer to repay all amounts advanced if it is ultimately determined
that he or she is not entitled to indemnification under this Article 8 (or
otherwise).
The Corporation, by action of its board of directors, may provide
indemnification to its employees and agents with the same scope and effect as
the indemnification provided to its directors and officers in this Article 8.
Article 9
Incorporator
The name and mailing address of the sole incorporator of the Corporation
are:
NAME MAILING ADDRESS
Xxxxxxxx X. Xxxxxxx
Xxxxxxx and Colmar
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Signed on December 24, 1995.
/s/ Xxxxxxxx X. XxXxxxx
---------------------------------------
Xxxxxxxx X. XxXxxxx, INCORPORATOR
-0-
XXXXXXXX X
LIST OF MEDICHEM SCIENTISTS
CALANOLIDE PROJECT APPENDIX G
MEDICHEM SCIENTISTS INVOLVED
1. XXXXXXX X. XXXXXX, PH.D.
2. ZE-XX XX, PH.D. (CALANOLIDE PROJECT MANAGER)
3. XXXXX XXXXXXXX, PH.D.
4. SERGY DZEKHSTER, M.S.
5. XXX XXX, M.S.
6. XX XXXX, M.S.
7. XXXXXX XXX, M.S.
8. XXXX X. XXXXX, B.S.
9. XXXXX XXXXXXXXX, B.S.
10. XXXXXX XXXXXXXXX, B.S.
Appendix H
DETERMINATION/DEFINITION OF NET PROFIT
(UNIT: US $)
Gross Sales XXX
Less: Returns and Allowances -XXX
-------------
Net Sales XXX
Less: Cost of Goods Sold (Produced) -XXX
-------------
Gross Margin XXX
Less: Sales, General, and Administrative Expenses -XXX
-------------
Operating Income XXX
Less: Interest and Taxes -XXX
-------------
Net Profit (Loss) XXX
-------------
Note (1): Cost of Goods Sold (Produced) includes but is not limited to royalty
payments, subcontracting fees, direct salaries and wages, supplies, and raw
materials
Note (2): All recognition of revenues, costs, expenses, and profit shall be
accounted for using Generally Accepted Accounting Principles (GAAP)
Note (3): All Net Profits/Losses shall be shared by each shareholder in a 50/50
proportion
