LICENSE AGREEMENT
Exhibit 10.7
This License Agreement (the “Agreement”) is entered into as of August 28, 2001 (the “Effective Date”) among XXXXX X. XXXXXXXX, M.D., XXXXXXX X. XXXXX, M.S. and XXXXX XXXXXXXXXX, M.D. (collectively hereafter, the “Inventors”), and ALGORX PHARMACEUTICALS, INC., a Delaware corporation (“AlgoRx”).
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions. When used in this Agreement, the following terms will have the following meanings:
1.1.1 “Affiliate” means, as to any person, another person controlled by, under common control with, or controlling such person. For these purposes, “control” means (a) the possession, directly or indirectly, of the power to direct the management or policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise, or (b) the ownership, directly or indirectly, of at least fifty percent (50%) of the outstanding voting securities or other ownership interest of a person or entity, or such lesser percentage as is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction.
1.1.2 “Field of Use” means any human or non-human diagnostic, prophylactic or therapeutic use of the Licensed Patents and Licensed Technology.
1.1.3 “Improvements” means all patentable and non-patentable inventions, discoveries, technology and information of any type whatsoever, including without limitation compounds, methods, processes, clinical information, knowledge, experience and know-how which utilize, incorporate, derive from, or are based on the Licensed Technology or which could not be conceived, developed or reduced to practice but for the use of the Licensed Technology.
1.1.4 “Licensed Patents” means U.S. Patent Application No. 09/041294
(U.S. Patent No. 5,962,532) together with all applications and patents, U.S. and foreign, claiming priority or benefit directly or indirectly therefrom, including the applications and patents set out in Exhibit 1.1.4, and any applications or patents relating to Improvements developed by the Inventors, including those added to Exhibit 1.1.4 pursuant to Section 2.5.
1.1.5 “Licensed Product(s)” means any product(s) developed, manufactured or sold by AlgoRx or its sublicensees which make use of the Licensed Technology.
1.1.6 “Licensed Services” means any services performed by AlgoRx or its sublicensees which make use of the Licensed Technology.
1.1.7 “Licensed Technology” means all know-how, proprietary knowledge, information and expertise possessed or developed by the Inventors or to which the Inventors have acquired or will acquire rights, embodied in or relating to the Licensed Patents and the use of capsaicin and its analogues for any therapeutic indication except the topical application of capsaicin and its analogues to the skin, and includes the Licensed Patents, any Improvements to which any of the Inventors have rights at the Effective Date and any Improvements developed by the Inventors, or to which any of the Inventors acquire rights during the term of this Agreement, but does not include U.S. Patent No. 6,248,788, certain rights to which are licensed to AlgoRx from Xx. Xxxxx Xxxxxxxxxx under a separate License Agreement of even date herewith between Xx. Xxxxxxxxxx and AlgoRx.
AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
1.1.8 “Losses” means claims, losses, liabilities, damages, fines, penalties, costs and expenses (including, without limitation, interest which may be imposed in connection therewith), expenses of investigation, reasonable fees and disbursements of counsel and of other experts with respect to any action, proceeding, investigation or claim.
1.1.9 “Net Sales” means revenue from sales of any Licensed Products or provision of any Licensed Services, net of the following deductions when applicable and separately invoiced: cash, trade, or quantity discounts; sales, use, or other excise taxes (but not income or franchise taxes of AlgoRx or its sublicensees) or tariffs or import/export duties imposed upon particular sales or services; transportation charges; and rebates, allowances or credits to customers because of rejections, recalls or returns.
1.1.10 “Product Covered by a Valid Claim” means any Licensed Product the manufacture, use or sale of which, but for the license granted hereunder, would infringe any Valid Claim. For purposes of this Agreement, Products Covered by Valid Claims will be interpreted on a country or other political jurisdiction-by-country or other political jurisdiction basis and on a day-by-day basis within each country or other political jurisdiction.
1.1.11 “Service Covered by a Valid Claim” means any Licensed Service the performance of which, but for the license granted hereunder, would infringe any Valid Claim. For purposes of this Agreement, Services Covered by Valid Claims will be interpreted on a country or other political jurisdiction-by-country or other political jurisdiction basis and on a day-by-day basis within each country or other political jurisdiction.
1.1.12 “Valid Claim” means a claim of a Licensed Patent which has not expired nor been held invalid or unenforceable by final decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which is not admitted by the Inventors to be invalid or unenforceable through reissue, disclaimer or otherwise.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
ARTICLE 2
2.2 Sublicense To The Inventors, Certain Limitations. AlgoRx hereby grants to the Inventors, jointly and severally, a paid-up, non-exclusive license, which will terminate when this Agreement terminates, to use the Licensed Technology in the United States, solely for the purposes of research and development, without the right to commercialize, and subject to the obligations of the Inventors under this Agreement. With reference to Section 5.3, AlgoRx acknowledges that Xx. Xxxxxxxx and Xx. Xxxxx are at the Effective Date conducting at JHU, and may after the Effective Date in the course of their duties at JHU may conduct at JHU, and Xx. Xxxxxxxxxx is at the Effective Date conducting, and may after the Effective Date in the course of his duties at New York University (“NYU”) conduct, certain basic academic research with respect to the use of capsaicin and its analogues for pain relief. Subject to Section 5.3, each Inventor will exercise his rights under such license, and conduct such research and development, only under and pursuant to a Scientific Advisory Board Agreement with AlgoRx, or a Consulting Agreement with AlgoRx, or otherwise only in such a manner that will not give rise to rights of third parties, such as universities, institutions, or any governmental agency (except to the extent that, as to Xx. Xxxxxxxx and Xx. Xxxxx, JHU may have any such rights pursuant to Section 5.3, and as to Xx. Xxxxxxxxxx, NYU may have any such rights under the relevant intellectual property policies of NYU pursuant to Section 5.3), in any Improvements resulting from such research and development activities by such Inventor, and specifically will use his best efforts to not make use of resources belonging to institution, organization or entity other than JHU, in the case of Xx. Xxxxxxxx and Xx. Xxxxx, and NYU, in the case of Xx. Xxxxxxxxxx, in the course of such Inventor’s work towards Improvements and other development of the Licensed Technology.
2.3 General Obligations Of AlgoRx. As consideration for the license granted to it pursuant to Section 2.1. AlgoRx will use its commercially reasonable efforts, based on the good faith judgment of AlgoRx’s Board of Directors, exercised consistently with AlgoRx’s overall business needs and goals as determined by its Board of Directors, to develop and commercialize the Licensed Technology.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
writing promptly after any sublicense is granted hereunder by AlgoRx and will provide each Inventor with a complete copy of any such sublicense. AlgoRx will be responsible for collection from AlgoRx’s sublicensees of all royalty amounts that are due from AlgoRx to the Inventors by AlgoRx in respect of such sublicenses, and for remitting to the Inventors such royalty payment amounts together with a report setting out Net Sales and royalty calculations relating to each relevant sublicense within the same time periods as specified in Article 3. AlgoRx will use its commercially reasonable diligent efforts to collect royalties from its sublicensees and will not be deemed to be in breach of this Agreement for any failure of any of its non-Affiliate sublicensees to pay royalties due from such sublicensee to AlgoRx for so long as AlgoRx is using its commercially reasonable diligent efforts to collect such royalties and reports on the status of such collection efforts in the reports provided pursuant to Section 3.5.3.
ARTICLE 3
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
3.2 Milestone Royalty Payment. The following milestone royalty payments will be paid by AlgoRx to the Inventors:
| Amount of Milestone |
||||
| Milestone |
Royalty Payment | |||
| Execution and delivery of this Agreement by all parties hereto: |
$ | 50,000.00 | ||
| Grant of European patent EP 0998288A: |
$ | 25,000.00 | ||
| Grant of a Japanese patent on the Licensed Technology: |
$ | 25,000.00 | ||
| First administration to a subject of a drug, using Licensed Technology, in an FDA-approved Phase I clinical trial: |
$ | 125,000.00 | ||
| First administration to a subject of a drug, using Licensed Technology, in an FDA-approved Phase III clinical trial or other FDA-approved clinical trial than can, under FDA regulations, result in FDA approval for commercial use, application or marketing of the first Licensed Product in the Field of Use: |
$ | 200,000.00 | ||
| FDA approval for commercial use, application or marketing of the first Licensed Product in the Field of Use: |
$ | 350,000.00 | ||
|
|
|
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| Total Milestone Royalties |
$ | 775,000.00 | ||
|
|
|
|||
Milestone royalty payments will be paid, in accordance with Section 3.1, within thirty (30) days after the date upon which the relevant milestone has been achieved.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
3.4 Manner Of Payment. AlgoRx will make all payments required under this Agreement in the United States in United States dollars. Amounts due on the sale of Licensed Products outside the United States will be converted into United States dollars using the average rate of exchange for the applicable currency quoted in The Wall Street Journal for the last business day of the relevant quarter.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
ARTICLE 4
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
4.2 Issuance Of Options As Part Of License Fee. Upon the Effective Date, AlgoRx has issued the Options to the Inventors, which Options are exercisable in the aggregate, for a total of two hundred sixteen thousand six hundred sixty-six (216,666) shares of Common Stock of AlgoRx, (a) in the form of Exhibit 4.1-A, for Xx. Xxxxx X. Xxxxxxxx for a total of seventy-two thousand two hundred twenty-two (72,222) shares of Common Stock, and (b) in the form of Exhibit 4.1-B for Xxxxxxx X. Xxxxx for a total of seventy-two thousand two hundred twenty-two (72,222) shares of Common Stock, and (c) in the form of Exhibit 4.1-C for Xx. Xxxxx Xxxxxxxxxx for a total of seventy-two thousand two hundred twenty-two (72,222) shares of Common Stock.
ARTICLE 5
5.1 Ownership Of Improvements Developed By The Inventors. The Inventors will own any Improvements developed by them provided that the work to develop such Improvements was not performed pursuant to a contract requiring such work between an individual Inventor, or the Inventors collectively, and AlgoRx, and provided that no resources or Confidential Information of AlgoRx were used for such work. Such Improvements are included in the Licensed Technology under this Agreement and AlgoRx may use such Improvements under this Agreement without any payment by AlgoRx beyond amounts it is obligated to pay under this Agreement.
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either by a direct license or other grant of rights to AlgoRx by the relevant third party or parties, or by a license or other grant of rights from the third party or parties to AlgoRx or through the Inventors, permitting AlgoRx to use such Improvements under this Agreement without any payment by AlgoRx beyond amounts it is obligated to pay under this Agreement. Each Inventor severally represents that such Inventor is not a party to, nor is such Inventor aware that any of the other Inventors is a party to, any agreement existing as of the Effective Date pursuant to which third parties are supporting, funding, or contributing to any research designed to lead to any Improvements and/or granting rights in any Improvements, except for any basic academic research being conducted by such Inventors with respect to the use of capsaicin and its analogues for pain relief at, as applicable, JHU or NYU.
5.3 Certain University Intellectual Property Policy. AlgoRx acknowledges that if any of the Inventors makes use of resources belonging to JHU in the course of work towards Improvements and other development of the Licensed Technology, The Xxxxx Xxxxxxx University Intellectual Property Policy will apply to such Improvements and other developments, and that the intellectual property policies of NYU will govern the conduct by Xx. Xxxxxxxxxx of any work by him at NYU towards Improvements and other development of the Licensed Technology. At any time or from time to time during the term of this Agreement, in addition to or in the stead of their current academic affiliations with JHU (for Xx. Xxxxx and Xx. Xxxxxxxx) and NYU (for Xx. Xxxxxxxxxx), an Inventor may be affiliated as an academic (which includes without limitation a professor, researcher or clinician) with not more than one additional university, other academic institution or medical facility without the consent of AlgoRx and Sections 2.2, 5.2 and this Section 5.3 dealing with the effects of academic affiliation will apply to such additional affiliations. Any affiliations in addition to those permitted pursuant to this paragraph and involving research with respect to the use of capsaicin and its analogues for pain relief will be subject to AlgoRx’s consent, not to be unreasonably withheld. Sections 2.2, 5.2 and 5,3 will also apply to such additional affiliations. Nothing in this Section 5.3 will restrict any Inventor’s affiliation with any additional university or institution so long as such Inventor does not conduct any research with respect to the use of capsaicin and its analogues for pain relief at such additional university or institution.
5.4 Ownership Of Improvements Developed By AlgoRx. Any technology or Improvements conceived or developed by AlgoRx whether on its own or by third parties, pursuant to work carried out under contract for AlgoRx, or otherwise involving the use of resources belonging to AlgoRx, whether facilities, materials or AlgoRx Confidential Information, will be the property of AlgoRx.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
5.6 Infringement Of Licensed Patents.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
| 5.7 |
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
5.7.2 AlgoRx As Prevailing Party. If AlgoRx finally prevails because it is held not to be infringing any patents belonging to such third party or because such third party’s patent is held invalid, AlgoRx will remit to the Inventors the royalties kept in escrow pursuant to Section 5.7.1, to the extent the Licensed Products or Licensed Services made the subject of the action are determined to have been, and to be, Products or Services Covered by a Valid Claim, and will continue to pay the royalties as set forth in Article 3, provided that AlgoRx will be entitled to a credit against payments due under this Agreement of an amount equal to one-half (1/2) of the commercially reasonable costs actually incurred by AlgoRx in such action, and further provided that in no event will such credit be more than fifty percent (50%) of such payments due hereunder for Licensed Products or Licensed Services in such country or other political jurisdiction which is the subject of such action. Any such credit not deducted for a calendar quarter as a result of the immediately preceding sentence may be carried forward and deducted by AlgoRx in subsequent calendar quarters.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
Inventor, nor to such representing Inventor’s knowledge by any of the other the Inventors, nor does any third party otherwise have, to such representing Inventor’s knowledge, any rights to such Licensed Technology, other than pursuant to the JHU License, and (e) such representing Inventor has, and to such representing Inventor’s knowledge the other Inventors have, the lawful right to grant the license and rights granted to AlgoRx pursuant to this Agreement, and (f) to the knowledge of such representing Inventor (but without any investigation, study, or inquiry), (i) no infringement of the Licensed Patent by third parties has occurred as of the Effective Date, and (ii) the Licensed Technology does not infringe the rights of any third parties, and (f) subsequent to the November 14, 1997 and May 28, 1998 invention waivers from JHU, such representing Inventor has not, and to such representing Inventor’s knowledge none of the other Inventors has, conducted any work at JHU or used JHU resources in further research and development of the invention mentioned in such waiver and such representing Inventor has not, and to such representing Inventor’s knowledge none of the other Inventors has, at JHU, reduced such invention to practice, which includes using such invention for any patients of JHU or its teaching hospitals, and (g) this Agreement is a valid and binding obligation of such Inventor, enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting the enforcement of creditors’ rights generally, and (h) neither AlgoRx nor AlgoRx’s attorneys or other advisors or representatives of AlgoRx have made any representations or warranties to such Inventor, nor to such Inventor’s knowledge to any of the other Inventors, with respect to the income tax or other tax consequences of any of the transactions contemplated by this Agreement, including without limitation with respect to the Option issued to such Inventor or to any of the other Inventors, and such Inventor is in no manner relying on AlgoRx or AlgoRx’s attorneys or other advisors or representatives of AlgoRx with respect to any such tax consequences or for any other advice with respect to any such matters, or as to any other matters with respect to this Agreement.
ARTICLE 7
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
7.2 Indemnification By AlgoRx. AlgoRx will defend, indemnify and hold harmless each Inventor, severally, from and against any and all Losses arising out of or resulting from (a) any breach of any of the material representations or warranties made by AlgoRx in this Agreement, (b) any failure by AlgoRx to perform any of its material obligations contained in this Agreement, and (c) any claim arising out of or in connection with the manufacture, commercialization, marketing, sale, or use of any Licensed Product that is manufactured by AlgoRx or the performance of any Licensed Service performed by AlgoRx, provided that the amount of any such indemnification will be decreased by any amounts disbursed by AlgoRx pursuant to Section 5.7 because the Licensed Technology is held to infringe any third party rights, and not otherwise recouped by AlgoRx by a decrease in royalty payments hereunder as provided herein.
ARTICLE 8
(a) was already known to the receiving party, other than under an obligation of confidentiality, at the time of disclosure by the other party;
(b) was generally available to the public or otherwise part of the public domain, other than through any act or omission of the receiving party in breach of this Agreement, at the time of its disclosure to the receiving party;
(c) after its disclosure to the receiving party became generally available to the public or otherwise part of the public domain other than through any act or omission of the receiving party in breach of this Agreement;
(d) was disclosed to the receiving party by a third party who had no obligation to the disclosing party not to disclose such Confidential Information to others; or
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
(e) was independently developed by the receiving party by persons who did not have access to the Confidential Information, and other than through any act or omission of the receiving party in breach of this Agreement.
ARTICLE 9
| 9.2 |
(a) upon at least thirty (30) days prior written notice to the Inventors, which notice will be effective no earlier than the first anniversary of the Effective Date;
(b) upon at least thirty (30) days prior written notice to the Inventors, if during the term of this Agreement (i) the relevant applicable policies of the university or other institution with which the relevant Inventor is affiliated, whether as an employee or consultant or otherwise at the relevant time changes, or (ii) applicable law changes, in either case in the good faith judgment of AlgoRx after consultation with its outside legal counsel, such that AlgoRx no longer has the same access and rights to Improvements and/or to the Licensed Technology hereunder as was in effect at the Effective Date, and in either case if the Inventors are unable by law or, if lawful, by exercise of their commercially reasonable diligent efforts, to secure the right for AlgoRx to use and sublicense such Improvements and/or the Licensed Technology, as relevant, in accordance with this Agreement;
(c) upon at least ten (10) days prior written notice to the Inventors if the any or all of the Inventors fail to fulfill any material obligation of the Inventors hereunder, other than the Inventors’ obligation to procure for AlgoRx the right to use Improvements or the Licensed Technology, and if such relevant failure is not cured within ninety (90) days after receipt by Inventors of a written notice of such failure.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
9.3 Termination By The Inventors. The Inventors can terminate this Agreement:
(a) upon at least ten (10) days prior written notice to AlgoRx, if AlgoRx fails to make a payment or provide a report it is required to provide pursuant to Article 3, if such failure is not cured within one hundred and eighty (180) days after receipt by AlgoRx from any of the Inventors of a written notice of such failure;
(b) upon at least ten (10) days prior written notice to AlgoRx, if AlgoRx fails to fulfill any material obligation of AlgoRx other than the payment and report obligations contained in Article 3, if such failure is not cured within one hundred and eighty (180) days after receipt by AlgoRx from any of the Inventors of a written notice of such failure.
9.4 Effects Of Termination. Upon any termination of this Agreement:
(a) AlgoRx will cease to have any rights to use the Licensed Technology pursuant to this Agreement, and will cease to grant any sublicenses pursuant to this Agreement;
(b) AlgoRx will be allowed a grace period of one hundred and eighty (180) days after the effective date of termination to dispose of any existing inventory of Licensed Products already manufactured and to continue to perform any Licensed Services already contracted for, unless the relevant performance cannot, by commercially reasonable diligence, be completed within such one hundred and eighty (180) day grace period, in which case AlgoRx will use its commercially reasonable diligent efforts to terminate the agreement(s) relating to such Licensed Services. At the end of such one hundred and eighty (180) day grace period, all remaining Licensed Products not disposed of by AlgoRx will either be destroyed by AlgoRx, or purchased by the Inventors, at the Inventors’ election as communicated in writing to AlgoRx at least forty-five (45) days prior to the end of such grace period, with only one decision as to destruction or purchase being made by all of the Inventors, together. AlgoRx will have a further thirty (30) days after the end of such grace period to prepare the final report and pay the royalties applicable to Net Sales during such one hundred and eighty (180) day grace period;
(c) AlgoRx will remit to the Inventors all documentation and materials relating to prosecution and maintenance of Licensed Patents, as well as all Confidential Information relating to the Licensed Technology, in each case that is in possession of AlgoRx.
ARTICLE 10
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
If to AlgoRx, to:
AlgoRx Pharmaceuticals, Inc.
Attn: Chief Executive Officer
00X Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Facsimile: 000-000-0000
Email: xxxxxxx@xxxxxx.xxx
with a copy to:
Xxxxxx Xxxxxx White & XxXxxxxxx LLP
Attn: Xxxxx X. Xxxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
Email: xxxxxxx@xxxx.xxx
If to the Inventors, to:
Xxxxx X. Xxxxxxxx, M.D.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Email: xxxxxxxxx@xxxx.xxx
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
Xxxxxxx X. Xxxxx, M.S.
00000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Email: xxxxxx@xxxx.xxx
Xxxxx Xxxxxxxxxx, M.D.
000 Xxxx 00xx Xxxxxx, Xxx. X00X
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxx.xxx.xxx
with a copy to:
Xxxxxxx Xxxx & Guinot
Attn: Xxxxxxx X. Xxxxxxx
00 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: 410-539-7611
Email: xxx@xxxxxxxxxxx.xxx
Each party will notify all other parties hereto of changes of address of the notifying party in the manner provided for in this Section 10.3.
Notwithstanding anything in the foregoing to the contrary, notices of default, notices of termination, demands for payment, and demands for defense and/or indemnification will not be considered to have been delivered hereunder if sent only by electronic mail.
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10.7 Dispute Resolution; Governing Law. The parties will attempt amicable resolution among or between themselves of any dispute arising under this Agreement before any judicial action is taken. The party or parties who wish to submit a dispute for amicable resolution will send to the other parties to this Agreement a written notice containing the particulars of such dispute and state in such notice such party’s or parties’ request for such amicable resolution. The Chief Executive Officer of AlgoRx, on behalf of AlgoRx, and Xx. Xxxxx X. Xxxxxxxx as the representative authorized and appointed under this Agreement by the other Inventors hereby to act on their behalf as well as his own behalf (or, in the event of Xx. Xxxxxxxx’x death or incapacity to act, then Xxxxxxx X. Xxxxx, and in the event of Xx. Xxxxx’x death or incapacity, then Xx. Xxxxx Xxxxxxxxxx, in such capacity), will then have ninety (90) days after the date of receipt by the recipient of the notice of such dispute, to negotiate in good faith to attempt to resolve such dispute. If, after such ninety (90) day period, such dispute is not resolved to the satisfaction of the parties, acting in good faith, any or all of the parties to this Agreement may seek judicial resolution of such dispute. This Agreement will be governed by the laws of the State of New York, without reference to its conflict of laws provisions.
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AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
| ALGORX PHARMACEUTICALS, INC. | INVENTORS: | |||||
| /s/ Xxxxx X. Xxxxxxxx | ||||||
| By: | /s/ Xxxxxx Xxxx |
XXXXX X. XXXXXXXX, M.D. | ||||
| Date signed: August , 2001 | ||||||
| Name: |
|
|||||
| Title: |
|
/s/ Xxxxxxx X. Xxxxx | ||||
| Date signed: August 28, 2001 | ||||||
| XXXXXXX X. XXXXX, M.S. | ||||||
| Date signed: August , 2001 | ||||||
| /s/ Xxxxx Xxxxxxxxxx | ||||||
| XXXXX XXXXXXXXXX, M.D. | ||||||
| Date signed: August , 2001 | ||||||
[SIGNATURE PAGE FOR ALGORX CAPSAICIN LICENSE – CAMPBELL, MEYER, PAPPAGALLO]
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EXHIBIT 1.1.4
LICENSED PATENTS
| COUNTRY OR |
NUMBER | STATUS |
DATE | |||||
| USA |
5,962,532 | Issued – 4th year |
Oct. 5, 1999 | |||||
| maintenance fee due |
||||||||
| Xxx. 0, 0000 |
||||||||
| Xxxxxxxxx |
720859 | Issued – Next renewal due |
Sept. 28, 2000 | |||||
| Mar. 12, 2003 |
||||||||
| Europe |
98911614.0 | Pending – awaiting 2nd |
Filing date – Mar. 12, 1998 | |||||
| office action |
Nat’x xxxxx xxxxxxx Xxx. 00, | |||||||
| 0000 | ||||||||
| Xxxxx |
10-539822 | Pending – Request for |
Filing date – Mar. 12, 1998 | |||||
| examination due no |
Nat’l phase entered Sept. 9, | |||||||
| later than Mar. 8, 2005 |
1999 | |||||||
| Hong Kong |
00107078.0 | Pending – awaiting grant |
Filing date – Oct. 30, 2000 | |||||
| of European patent |
||||||||
| Canada |
2,285,203 | Pending – awaiting 1st |
Filing date – Mar. 12, 1998 | |||||
| office action |
Nat’l phase entered Sept. 9, | |||||||
| 1999 | ||||||||
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EXHIBIT 4.1-C
OPTION FOR XXXXX XXXXXXXXXX, M.D.
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
VOID AFTER 5:00 P.M. DELAWARE TIME ON AUGUST 28, 2011
OPTION TO PURCHASE SHARES OF COMMON STOCK OF
ALGORX PHARMACEUTICALS, INC.
DATE OF ISSUANCE: August 28, 2001
THIS CERTIFIES THAT XX. XXXXX XXXXXXXXXX, as the original holder hereof, and any person to whom the interest in this stock option (the “Option”) is lawfully transferred as provided herein (the original holder hereof and such permitted transferees referred to hereinafter as the “Holder”), is entitled to purchase up to the number of shares set forth in Section 2(a) hereof, in accordance with the exercisability schedule set out in Section 2(c) hereof, as such number may be adjusted pursuant to Section 3 hereof, of fully paid and nonassessable shares (the “Shares”) of the Common Stock (the “Common Stock”) of ALGORX PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), having an Exercise Price and an Aggregate Exercise Price determined as set forth in Section 2(b) hereof (as such Exercise Price may be adjusted pursuant to Section 3 hereof), and subject to the terms and conditions set forth herein.
1. Issuance Of This Option As Part Of License Fee. This Option is issued in payment to the original Holder hereof as a portion of the license fee paid by the Company to the original Holder hereof on the date of issuance of this Option under, and as specified in, that certain License Agreement dated as of the date of issuance of this Option by and among the Company, the original Holder hereof, and the other licensors thereunder (the “License Agreement”). This Option is not a nonqualified stock option, or any other type of employee stock option, and it is not issued and will not become exercisable, in whole or in part, in connection with or by reason of the performance of any services by the Holder. The original Holder and the Company hereby agree, by their mutual signatures on this Option, that this Option has a fair market value itself, as of the date of issuance of this Option, and as opposed to the purchase price for, or the fair market value of, Shares purchasable upon exercise of this Option, of Seventy-Two Dollars and Twenty-Two Cents ($72.22).
AlgoRx Capsaicin License Fee Stock Option
(c) Exercisability Schedule.
(i) General Exercisability Schedule. Subject to the provisions of Section 2(c)(ii) and Section 5 hereof, this Option will become exercisable as follows, upon the achievement by the Company of the following milestones (each, a “Milestone”): to the extent that a given Milestone is not achieved by the tenth (10th) anniversary of the date of issuance of this Option (i.e., by August 28,2011), and provided that exercisability of this Option has not been accelerated pursuant to Section 2(c)(ii) hereof, then at such tenth (10th) anniversary this Option will expire and will no longer be exercisable as to such number of Shares related to such given Milestone:
| Number of Shares For Which This Option Is Exercisable |
||||||||
| Execution and delivery of this Agreement by all parties hereto: |
10,000 | shares | ||||||
| First administration to a subject of a drug, using Licensed Technology, in an FDA-approved Phase I clinical trial: |
20,740 | shares | ||||||
| First administration to a subject of a drug, using Licensed Technology, in an FDA-approved Phase III clinical trial or other FDA-approved clinical trial than can, under FDA regulations, result in FDA approval for commercial use, application or marketing of the first Licensed Product in the Field of Use: |
20,740 | shares | ||||||
| FDA approval for commercial use, application or marketing of the first Licensed Product in the Field of Use, where “Field of Use” has the meaning assigned to it in Section 1.1.2 of the License Agreement: |
20,742 | shares | ||||||
|
|
|
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| Total number of shares: |
72,222 | shares | ||||||
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|
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(ii) Acceleration of Exercisability Upon Certain Events. Upon the happening of any of the following events, this Option will, to the extent not then exercisable, become immediately exercisable:
(A) The effective date of an assignment or transfer of the License Agreement by the Company to a person or entity which is not an affiliate of the Company (with “affiliate” defined for purposes of this Section 2(c)(ii)(A) to mean means, as to any person, another person controlled by, under common control with, or controlling such person.; for these purposes, “control” means (1) the possession, directly or indirectly, of the power to direct the management or policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise, or (2) the ownership, directly or indirectly, of at least fifty percent (50%) of the outstanding voting securities or other ownership interest of a person or entity, or such lesser percentage as is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction.; or
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AlgoRx Capsaicin License Fee Stock Option
(B) The effective date of a change of control of the Company. For the purposes of this Section 2(c)(ii)(B), “change of control” means either of the following events:
(1) A merger or consolidation in which the Company is not the surviving entity (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction and other than any other transaction in which there is no material change in the identity of the shareholders of the Company or their relative shareholdings in the Company and in each such case such options are assumed, converted, or replaced by the successor or acquiring corporation); or
(2) A merger in which the Company is the surviving entity but after which the shareholders of the Company immediately prior to such merger (excluding any entity shareholder of the Company which merges with the Company in such merger, or which owns or controls another corporation or other entity which merges with the Company in such merger) do not own, immediately after such merger, voting control of the surviving entity.
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AlgoRx Capsaicin License Fee Stock Option
| X |
= | Y (D-E) | ||
| D |
where:
| X |
= | The number of Shares to be issued to the Holder pursuant to this | ||||
| Section 2(f). | ||||||
| Y |
= | The number of Shares covered by this Option in respect of which | ||||
| the Net Exercise election is made pursuant to this Section 2(f). | ||||||
| D |
= | The fair market value of one share of Common Stock, as determined in | ||||
| good faith by the Board of Directors of the Company (the “Board”), | ||||||
| as of the date the net issue election is made pursuant to this | ||||||
| Section 2(f). | ||||||
| E |
= | The Exercise Price in effect under this Option at the time the Net | ||||
| Exercise election is made pursuant to this Section 2(f). | ||||||
The Board will promptly respond in writing to an inquiry by the Holder as to the fair market value of one share of Common Stock. To the extent legally required, the Holder will pay in cash the par value of any shares purchased by such Net Exercise.
(g) Issuance Of New Option. In the event of any exercise of the purchase right represented by this Option, certificates for the Shares so purchased will be delivered to the Holder within ten (10) days after receipt of such payment and, unless this Option has been fully exercised or has expired, a new Option representing the portion of the Shares, if any, with respect to which this Option will not then have been exercised will also be issued to the Holder within such ten (10) day period.
(a) Reclassification, Reorganization, Consolidation Or Merger. In case of any reclassification of the Common Stock, or any reorganization, consolidation or merger of the Company with or into another corporation (other than a merger or reorganization with respect to which the Company is the continuing corporation and which does not result in any reclassification of the Common Stock), the Company, or such successor corporation, as the case may be, will execute and deliver to Holder a new warrant in substitution for this Option which will provide that the Holder will have the right to exercise such new warrant and upon such exercise to receive, in lieu of each share of Common Stock previously issuable upon exercise of this Option, the number and kind of securities, money and property receivable upon such reclassification, reorganization, consolidation or merger by a holder of shares of Common Stock of the Company, for each share of Common Stock otherwise issuable hereunder. Such new Option will provide for adjustments which will be as nearly equivalent as practicable to the adjustments provided for in this Section 3 including, without limitation, adjustments to the Exercise Price and to the number of shares issuable upon exercise of this Option. The provisions of this Section 3(a) will similarly apply to successive reclassifications, reorganizations, consolidations or mergers.
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AlgoRx Capsaicin License Fee Stock Option
4. Compliance With Securities Law; Transferability Of Option.
(b) Transferability Of Option. This Option may not be transferred or assigned in whole or in part in any manner unless (i) approved in writing by the Company prior to such proposed transfer being effected (which approval will not be unreasonably withheld) or (ii) upon death or by laws of descent or by bequest through a will or trust instrument. Subject to the provisions of this Section 4(b), title to this Option may be transferred in the same manner as a negotiable instrument transferable by endorsement and delivery, by execution and delivery of a completed Assignment Form attached hereto as Annex II, incorporated herein by reference.
5. Termination Of License Agreement. Upon termination of License Agreement by the Company, this Option will survive such termination, but will thereafter be exercisable only with respect to and for that portion of this Option which is exercisable at the date of such termination of the License Agreement by the Company, and will not thereafter be exercisable for any portion hereof which is not then so exercisable.
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AlgoRx Capsaicin License Fee Stock Option
| ALGORX PHARMACEUTICALS, INC. | ||
| By: | /s/ Xxxxxx Xxxx | |
| Name: | Xxxxxx Xxxx | |
| Title: | ||
| OPTION ACCEPTED AND AGREED: |
| /s/ Xxxxx Xxxxxxxxxx |
| (Signature of initial Option Holder) |
| Date signed: August , 2001 |
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ANNEX I
NOTICE OF EXERCISE
DATE: ,
AlgoRx Pharmaceuticals, Inc.,
Re: Common Stock Option Notice of Exercise
Ladies/Gentleman:
On this date, the undersigned , as the Holder of, and as defined in, that certain Option (the “Option”) dated as of August 28,2001 from the Company to the original holder of such Option, hereby acquires from AlgoRx Pharmaceuticals, Inc., a Delaware corporation (the “Company”), an aggregate of shares (the “Restricted Securities”) of the Common Stock of the Company by exercise of the Option hereby for such number of shares.
1. Investment Intent. The undersigned represents and warrants that:
(a) The Restricted Securities have been acquired by the undersigned for investment and not with a view to the sale or other distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and the undersigned has no present intention of selling or otherwise disposing of all or any portion of the Restricted Securities.
(b) The undersigned has acquired the Restricted Securities for the undersigned’s own account and no one else has any beneficial ownership in the Restricted Securities.
2. Restrictions On Transfer. The undersigned understands that:
(a) In reliance upon the representations and warranties set forth herein, the Restricted Securities have not been registered with the Securities and Exchange Commission (the “SEC”), and accordingly may not be offered, sold or otherwise transferred except in compliance with the Securities Act (including any exemptions from registration thereunder);
(b) The undersigned must bear the economic risk of the undersigned’s investment in the Restricted Securities indefinitely unless the Restricted Securities are registered pursuant to the Securities Act or, in the opinion of counsel in form and substance satisfactory to the Company, an exemption from the registration requirement is available;
(c) The undersigned cannot be assured that any exemption from the registration requirement will be available should the undersigned desire to transfer the Restricted Securities, and therefore, the undersigned may not be able to dispose of or otherwise transfer the Restricted Securities, under the circumstances, in the amounts, or at the time proposed by the undersigned;
(d) Rule 144 promulgated under the Securities Act, which provides for certain limited, routine sales of unregistered securities, is not presently available with respect to the Restricted Securities, and the Company is under no obligation to furnish the information that might be necessary to enable the undersigned to sell any of the Restricted Securities under Rule 144; and
(e) Only the Company may file a registration statement with the SEC, and except as may be provided in any written agreement between the Company the Holder: (i) the Company is under no obligation to do so with respect to the Restricted Securities; nor (ii) does the Company have any obligation to file any other disclosure statement with the SEC with respect thereto.
3. Legend And Stop-Transfer Orders. The undersigned understands that, if required by applicable federal securities laws at the date of issuance of the Restricted Securities, certificates or other instruments representing any of the Restricted Securities acquired by the undersigned will bear a legend substantially similar to the following, in addition to any other legends required by federal or state laws, or by any contractual agreement binding upon the undersigned with respect to the Restricted Securities:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
The undersigned agrees that, to ensure and enforce compliance with the restrictions imposed by applicable law and those referred to in the foregoing legend, or elsewhere herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, with respect to any certificate or other instrument representing Restricted Securities, or if the Company transfers its own securities, that it may make appropriate notation to the same effect in the Company’s records.
4. Representations And Warranties. The undersigned represents and warrants that:
(a) The undersigned has had access to all information regarding the Company, its present and prospective business, assets, liabilities and financial condition that the undersigned considers important to making the decision to invest in the Restricted Securities. The undersigned has had ample opportunity to ask questions of and receive answers from the Company’s representatives concerning this investment and to obtain any and all documents requested in order to supplement or verify any of the information supplied.
(b) The undersigned recognizes that the investment in the Restricted Securities involves special and substantial risks. The undersigned recognizes (i) the highly speculative nature of the investment, (ii) the financial hazards involved, (iii) the lack of liquidity of the Restricted Securities and the restrictions upon transferability thereof, (iv) the qualifications and backgrounds of the principals of the Company, and (v) the tax consequences of investment in Restricted Securities, among other matters.
(c) The undersigned is capable of evaluating the merits and risks of an investment in the Restricted Securities and is financially capable of bearing a total loss of this investment.
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(d) The undersigned either (i) has a preexisting personal or business relationship with the Company or its principals or (ii) by reason of the undersigned’s business or financial experience, has the capacity to protect the undersigned’s own interests in connection with this transaction.
(e) The offer and sale of the Restricted Securities was not accomplished by the publication of any advertisement.
(f) Neither the Company nor its attorneys or other advisors or representatives have made any representations or warranties to the undersigned with respect to the income or other tax consequences of an investment in the Restricted Securities, and the undersigned is in no manner relying on the Company or its attorneys or other advisors or representatives for an assessment of such tax consequences.
| (g) The undersigned’s address is: |
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| PRINTED NAME IF INDIVIDUAL : |
PRINTED NAME IF CORPORATION. | |||||||
| PARTNERSHIP OR TRUST: |
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| (Signature) |
By: |
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| Date signed: |
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Name: |
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| Address: |
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Title: |
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Date signed: |
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Address: |
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| Social Security Number: |
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| Taxpayer Identification Number: | ||||||||
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ANNEX II
ASSIGNMENT FORM
ALGORX PHARMACEUTICALS, INC.
COMMON STOCK OPTION
ISSUED AS OF AUGUST 28,2001
(To assign the foregoing Option, execute this form and supply the required information)
(Do not use this form to exercise the Option to purchase shares.)
FOR VALUE RECEIVED, the Option for Common Stock of ALGORX PHARMACEUTICALS, INC. initially issued as of August 28,2001 (the “Option”) and all rights evidenced thereby are hereby assigned by the Assigning Holder as shown below, to the Assignee as shown below:
| Printed Name Of Assigning Holder: |
| |
| Assigning Holder’s Signature*: |
| |
| Title (as appropriate): _____________________________________________________ | ||
| Assigning Holder’s Address: |
| |
|
| ||
| Printed Name of Assignee: |
| |
| Assignee’s Signature*: |
| |
| Title (as appropriate): _____________________________________________________ | ||
| Assignee’s Address: |
| |
|
| ||
| Date of Assignment: |
| |
CONSENT TO ASSIGNMENT
(MUST BE COMPLETED AND SIGNED IN ORDER FOR ASSIGNMENT TO BE VALID:
| ALGORX PHARMACEUTICALS, INC. | ||
| By: |
| |
| Name: | ||
| Title: | ||
| Date signed: | ||
—————————————————————————————————————————————————————
* The signature to this Assignment for the Assigning Holder must correspond with the name of such then-current Assigning Holder as it appears on the face of the assigned Option at the time of such proposed transfer, without any change. Officers of corporations and those acting in a fiduciary or other representative capacity for the Assigning Holder must file with AlgoRx, with this Assignment, proper evidence of authority to assign the Option.
AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
EXHIBIT 4.1-B
OPTION FOR XXXXXXX X. XXXXX, M.S.
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
VOID AFTER 5:00 P.M. DELAWARE TIME ON AUGUST 28, 2011
OPTION TO PURCHASE SHARES OF COMMON STOCK OF
ALGORX PHARMACEUTICALS, INC.
DATE OF ISSUANCE: August 28, 2001
THIS CERTIFIES THAT XXXXXXX X. XXXXX, as the original holder hereof, and any person to whom the interest in this stock option (the “Option”) is lawfully transferred as provided herein (the original holder hereof and such permitted transferees referred to hereinafter as the “Holder”), is entitled to purchase up to the number of shares set forth in Section 2(a) hereof, in accordance with the exercisability schedule set out in Section 2(c) hereof, as such number may be adjusted pursuant to Section 3 hereof, of fully paid and nonassessable shares (the “Shares”) of the Common Stock (the “Common Stock”) of ALGORX PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), having an Exercise Price and an Aggregate Exercise Price determined as set forth in Section 2(b) hereof (as such Exercise Price may be adjusted pursuant to Section 3 hereof), and subject to the terms and conditions set forth herein.
1. Issuance Of This Option As Part Of License Fee. This Option is issued in payment to the original Holder hereof as a portion of the license fee paid by the Company to the original Holder hereof on the date of issuance of this Option under, and as specified in, that certain License Agreement dated as of the date of issuance of this Option by and among the Company, the original Holder hereof, and the other licensors thereunder (the “License Agreement”). This Option is not a nonqualified stock option, or any other type of employee stock option, and it is not issued and will not become exercisable, in whole or in part, in connection with or by reason of the performance of any services by the Holder. The original Holder and the Company hereby agree, by their mutual signatures on this Option, that this Option has a fair market value itself, as of the date of issuance of this Option, and as opposed to the purchase price for, or the fair market value of, Shares purchasable upon exercise of this Option, of Seventy-Two Dollars and Twenty-Two Cents ($72.22).
AlgoRx Capsaicin License Fee Stock Option
(c) Exercisability Schedule.
(i) General Exercisability Schedule. Subject to the provisions of Section 2(c)(ii) and Section 5 hereof, this Option will become exercisable as follows, upon the achievement by the Company of the following milestones (each, a “Milestone”); to the extent that a given Milestone is not achieved by the tenth (10th) anniversary of the date of issuance of this Option (i.e., by August 28,2011), and provided that exercisability of this Option has not been accelerated pursuant to Section 2(c)(ii) hereof, then at such tenth (10th) anniversary this Option will expire and will no longer be exercisable as to such number of Shares related to such given Milestone:
| Number of Shares For Which This Option Is Exercisable |
||||
| Execution and delivery of this Agreement by all parties hereto: |
10,000 shares | |||
| First administration to a subject of a drug, using Licensed Technology, in an FDA-approved Phase I clinical trial: |
20,740 shares | |||
| First administration to a subject of a drug, using Licensed Technology, in an FDA-approved Phase III clinical trial or other FDA-approved clinical trial than can, under FDA regulations, result in FDA approval for commercial use, application or marketing of the first Licensed Product in the Field of Use: |
20,740 shares | |||
| FDA approval for commercial use, application or marketing of the first Licensed Product in the Field of Use, where “Field of Use” has the meaning assigned to it in Section 1.1.2 of the License Agreement: |
20,742 shares | |||
|
|
|
|||
| Total number of shares: |
72,222 shares | |||
|
|
|
|||
(ii) Acceleration of Exercisability Upon Certain Events. Upon the happening of any of the following events, this Option will, to the extent not then exercisable, become immediately exercisable:
(A) The effective date of an assignment or transfer of the License Agreement by the Company to a person or entity which is not an affiliate of the Company (with “affiliate” defined for purposes of this Section 2(c)(ii)(A) to mean means, as to any person, another person controlled by, under common control with, or controlling such person.; for these purposes, “control” means (1) the possession, directly or indirectly, of the power to direct the management or policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise, or (2) the ownership, directly or indirectly, of at least fifty percent (50%) of the outstanding voting securities or other ownership interest of a person or entity, or such lesser percentage as is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction.; or
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AlgoRx Capsaicin License Fee Stock Option
(B) The effective date of a change of control of the Company. For the purposes of this Section 2(c)(ii)(B), “change of control” means either of the following events:
(1) A merger or consolidation in which the Company is not the surviving entity (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction and other than any other transaction in which there is no material change in the identity of the shareholders of the Company or their relative shareholdings in the Company and in each such case such options are assumed, converted, or replaced by the successor or acquiring corporation); or
(2) A merger in which the Company is the surviving entity but after which the shareholders of the Company immediately prior to such merger (excluding any entity shareholder of the Company which merges with the Company in such merger, or which owns or controls another corporation or other entity which merges with the Company in such merger) do not own, immediately after such merger, voting control of the surviving entity.
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AlgoRx Capsaicin License Fee Stock Option
| X |
= | Y(D-E) | ||
| D |
where:
| X |
= | The number of Shares to be issued to the Holder pursuant to | ||||
| this Section 2(f). | ||||||
| Y |
= | The number of Shares covered by this Option in respect of | ||||
| which the Net Exercise election is made pursuant to this | ||||||
| Section 2(f). | ||||||
| D |
= | The fair market value of one share of Common Stock, as | ||||
| determined in good faith by the Board of Directors of the | ||||||
| Company (the “Board”), as of the date the net issue election | ||||||
| is made pursuant to this Section 2(f). | ||||||
| E |
= | The Exercise Price in effect under this Option at the time | ||||
| the Net Exercise election is made pursuant to this Section | ||||||
| 2(f). | ||||||
The Board will promptly respond in writing to an inquiry by the Holder as to the fair market value of one share of Common Stock. To the extent legally required, the Holder will pay in cash the par value of any shares purchased by such Net Exercise.
(g) Issuance Of New Option. In the event of any exercise of the purchase right represented by this Option, certificates for the Shares so purchased will be delivered to the Holder within ten (10) days after receipt of such payment and, unless this Option has been fully exercised or has expired, a new Option representing the portion of the Shares, if any, with respect to which this Option will not then have been exercised will also be issued to the Holder within such ten (10) day period.
(a) Reclassification, Reorganization, Consolidation Or Merger. In case of any reclassification of the Common Stock, or any reorganization, consolidation or merger of the Company with or into another corporation (other than a merger or reorganization with respect to which the Company is the continuing corporation and which does not result in any reclassification of the Common Stock), the Company, or such successor corporation, as the case may be, will execute and deliver to Holder a new warrant in substitution for this Option which will provide that the Holder will have the right to exercise such new warrant and upon such exercise to receive, in lieu of each share of Common Stock previously issuable upon exercise of this Option, the number and kind of securities, money and property receivable upon such reclassification, reorganization, consolidation or merger by a holder of shares of Common Stock of the Company, for each share of Common Stock otherwise issuable hereunder. Such new Option will provide for adjustments which will be as nearly equivalent as practicable to the adjustments provided for in this Section 3 including, without limitation, adjustments to the Exercise Price and to the number of shares issuable upon exercise of this Option. The provisions of this Section 3(a) will similarly apply to successive reclassifications, reorganizations, consolidations or mergers.
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AlgoRx Capsaicin License Fee Stock Option
4. Compliance With Securities Law; Transferability Of Option.
(b) Transferability Of Option. This Option may not be transferred or assigned in whole or in part in any manner unless (i) approved in writing by the Company prior to such proposed transfer being effected (which approval will not be unreasonably withheld) or (ii) upon death or by laws of descent or by bequest through a will or trust instrument. Subject to the provisions of this Section 4(b), title to this Option may be transferred in the same manner as a negotiable instrument transferable by endorsement and delivery, by execution and delivery of a completed Assignment Form attached hereto as Annex II, incorporated herein by reference.
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AlgoRx Capsaicin License Fee Stock Option
| ALGORX PHARMACEUTICALS, INC. | ||
| By: | /s/ Xxxxxx Xxxx | |
| Name: | XXXXXX XXXX | |
| Title: | ||
| OPTION ACCEPTED AND AGREED: |
| /s/ Xxxxxxx X. Xxxxx |
| (Signature of initial Option Holder) |
| Date signed: August 30, 2001 |
- 6 -
ANNEX I
NOTICE OF EXERCISE
DATE: ,
AlgoRx Pharmaceuticals, Inc.,
Re: Common Stock Option Notice of Exercise
Ladies/Gentleman:
On this date, the undersigned , as the Holder of, and as defined in, that certain Option (the “Option”) dated as of August 28, 2001 from the Company to the original holder of such Option, hereby acquires from AlgoRx Pharmaceuticals, Inc., a Delaware corporation (the “Company”), an aggregate of shares (the “Restricted Securities”) of the Common Stock of the Company by exercise of the Option hereby for such number of shares.
1. Investment Intent. The undersigned represents and warrants that:
(a) The Restricted Securities have been acquired by the undersigned for investment and not with a view to the sale or other distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and the undersigned has no present intention of selling or otherwise disposing of all or any portion of the Restricted Securities.
(b) The undersigned has acquired the Restricted Securities for the undersigned’s own account and no one else has any beneficial ownership in the Restricted Securities.
2. Restrictions On Transfer. The undersigned understands that:
(a) In reliance upon the representations and warranties set forth herein, the Restricted Securities have not been registered with the Securities and Exchange Commission (the “SEC”), and accordingly may not be offered, sold or otherwise transferred except in compliance with the Securities Act (including any exemptions from registration thereunder);
(b) The undersigned must bear the economic risk of the undersigned’s investment in the Restricted Securities indefinitely unless the Restricted Securities are registered pursuant to the Securities Act or, in the opinion of counsel in form and substance satisfactory to the Company, an exemption from the registration requirement is available;
(c) The undersigned cannot be assured that any exemption from the registration requirement will be available should the undersigned desire to transfer the Restricted Securities, and therefore, the undersigned may not be able to dispose of or otherwise transfer the Restricted Securities, under the circumstances, in the amounts, or at the time proposed by the undersigned;
(d) Rule 144 promulgated under the Securities Act, which provides for certain limited, routine sales of unregistered securities, is not presently available with respect to the Restricted Securities, and the Company is under no obligation to furnish the information that might be necessary to enable the undersigned to sell any of the Restricted Securities under Rule 144; and
(e) Only the Company may file a registration statement with the SEC, and except as may be provided in any written agreement between the Company the Holder: (i) the Company is under no obligation to do so with respect to the Restricted Securities; nor (ii) does the Company have any obligation to file any other disclosure statement with the SEC with respect thereto.
3. Legend And Stop-Transfer Orders. The undersigned understands that, if required by applicable federal securities laws at the date of issuance of the Restricted Securities, certificates or other instruments representing any of the Restricted Securities acquired by the undersigned will bear a legend substantially similar to the following, in addition to any other legends required by federal or state laws, or by any contractual agreement binding upon the undersigned with respect to the Restricted Securities:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
The undersigned agrees that, to ensure and enforce compliance with the restrictions imposed by applicable law and those referred to in the foregoing legend, or elsewhere herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, with respect to any certificate or other instrument representing Restricted Securities, or if the Company transfers its own securities, that it may make appropriate notation to the same effect in the Company’s records.
4. Representations And Warranties. The undersigned represents and warrants that:
(a) The undersigned has had access to all information regarding the Company, its present and prospective business, assets, liabilities and financial condition that the undersigned considers important to making the decision to invest in the Restricted Securities. The undersigned has had ample opportunity to ask questions of and receive answers from the Company’s representatives concerning this investment and to obtain any and all documents requested in order to supplement or verify any of the information supplied.
(b) The undersigned recognizes that the investment in the Restricted Securities involves special and substantial risks. The undersigned recognizes (i) the highly speculative nature of the investment, (ii) the financial hazards involved, (iii) the lack of liquidity of the Restricted Securities and the restrictions upon transferability thereof, (iv) the qualifications and backgrounds of the principals of the Company, and (v) the tax consequences of investment in Restricted Securities, among other matters.
(c) The undersigned is capable of evaluating the merits and risks of an investment in the Restricted Securities and is financially capable of bearing a total loss of this investment.
- 2 -
(d) The undersigned either (i) has a preexisting personal or business relationship with the Company or its principals or (ii) by reason of the undersigned’s business or financial experience, has the capacity to protect the undersigned’s own interests in connection with this transaction.
(e) The offer and sale of the Restricted Securities was not accomplished by the publication of any advertisement.
(f) Neither the Company nor its attorneys or other advisors or representatives have made any representations or warranties to the undersigned with respect to the income or other tax consequences of an investment in the Restricted Securities, and the undersigned is in no manner relying on the Company or its attorneys or other advisors or representatives for an assessment of such tax consequences.
| (g) The undersigned’s address is: |
| |
|
| ||
|
|
| PRINTED NAME IF INDIVIDUAL : |
PRINTED NAME IF CORPORATION. | |||||||
| PARTNERSHIP OR TRUST: |
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| (Signature) |
By: |
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| Date signed: |
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Name: |
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| Address: |
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Title: |
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Date signed: |
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Address: |
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| Social Security Number: |
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| Taxpayer Identification Number: | ||||||||
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- 3 -
ANNEX II
ASSIGNMENT FORM
ALGORX PHARMACEUTICALS, INC.
COMMON STOCK OPTION
ISSUED AS OF AUGUST 28, 2001
(To assign the foregoing Option, execute this form and supply the required information)
(Do not use this form to exercise the Option to purchase shares.)
FOR VALUE RECEIVED, the Option for Common Stock of ALGORX PHARMACEUTICALS, INC. initially issued as of August 28, 2001 (the “Option”) and all rights evidenced thereby are hereby assigned by the Assigning Holder as shown below, to the Assignee as shown below:
| Printed Name Of Assigning Holder: |
| |
| Assigning Holder’s Signature*: |
| |
| Title (as appropriate): _____________________________________________________ | ||
| Assigning Holder’s Address: |
| |
|
| ||
| Printed Name of Assignee: |
| |
| Assignee’s Signature*: |
| |
| Title (as appropriate): _____________________________________________________ | ||
| Assignee’s Address: |
| |
|
| ||
| Date of Assignment: |
| |
CONSENT TO ASSIGNMENT
(MUST BE COMPLETED AND SIGNED IN ORDER FOR ASSIGNMENT TO BE VALID:
| ALGORX PHARMACEUTICALS, INC. | ||
| By: |
| |
| Name: | ||
| Title: | ||
| Date signed: | ||
—————————————————————————————————————————————————————
* The signature to this Assignment for the Assigning Holder must correspond with the name of such then-current Assigning Holder as it appears on the face of the assigned Option at the time of such proposed transfer, without any change. Officers of corporations and those acting in a fiduciary or other representative capacity for the Assigning Holder must file with AlgoRx, with this Assignment, proper evidence of authority to assign the Option.
AlgoRx Pharmaceuticals, Inc. – Capsaicin License – Xxxxxxxx/Xxxxx/Xxxxxxxxxx
EXHIBIT 4.1-A
OPTION FOR XXXXX X. XXXXXXXX, M.D.
- 23 -
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
VOID AFTER 5:00 P.M. DELAWARE TIME ON AUGUST 28, 2011
OPTION TO PURCHASE SHARES OF COMMON STOCK OF
ALGORX PHARMACEUTICALS, INC.
DATE OF ISSUANCE: August 28, 2001
THIS CERTIFIES THAT XX. XXXXX X. XXXXXXXX, as the original holder hereof, and any person to whom the interest in this stock option (the “Option”) is lawfully transferred as provided herein (the original holder hereof and such permitted transferees referred to hereinafter as the “Holder”), is entitled to purchase up to the number of shares set forth in Section 2(a) hereof, in accordance with the exercisability schedule set out in Section 2(c) hereof, as such number may be adjusted pursuant to Section 3 hereof, of fully paid and nonassessable shares (the “Shares”) of the Common Stock (the “Common Stock”) of ALGORX PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), having an Exercise Price and an Aggregate Exercise Price determined as set forth in Section 2(b) hereof (as such Exercise Price may be adjusted pursuant to Section 3 hereof), and subject to the terms and conditions set forth herein.
1. Issuance Of This Option As Part Of License Fee. This Option is issued in payment to the original Holder hereof as a portion of the license fee paid by the Company to the original Holder hereof on the date of issuance of this Option under, and as specified in, that certain License Agreement dated as of the date of issuance of this Option by and among the Company, the original Holder hereof, and the other licensors thereunder (the “License Agreement”). This Option is not a nonqualified stock option, or any other type of employee stock option, and it is not issued and will not become exercisable, in whole or in part, in connection with or by reason of the performance of any services by the Holder. The original Holder and the Company hereby agree, by their mutual signatures on this Option, that this Option has a fair market value itself, as of the date of issuance of this Option, and as opposed to the purchase price for, or the fair market value of, Shares purchasable upon exercise of this Option, of Seventy-Two Dollars and Twenty-Two Cents ($72.22).
AlgoRx Capsaicin License Fee Stock Option
(c) Exercisability Schedule.
(i) General Exercisability Schedule. Subject to the provisions of Section 2(c)(ii) and Section 5 hereof, this Option will become exercisable as follows, upon the achievement by the Company of the following milestones (each, a “Milestone”); to the extent that a given Milestone is not achieved by the tenth (10th) anniversary of the date of issuance of this Option (i.e., by August 28, 2011), and provided that exercisability of this Option has not been accelerated pursuant to Section 2(c)(ii) hereof, then at such tenth (10th) anniversary this Option will expire and will no longer be exercisable as to such number of Shares related to such given Milestone:
| Number of Shares For Which This Option Is Exercisable |
||||
| Execution and delivery of this Agreement by all parties hereto: |
10,000 shares | |||
| First administration to a subject of a drug, using Licensed Technology, in an FDA-approved Phase I clinical trial: |
20,740 shares | |||
| First administration to a subject of a drug, using |
||||
| Licensed Technology, in an FDA-approved Phase III clinical trial or other FDA-approved clinical trial than can, under FDA regulations, result in FDA approval for commercial use, application or marketing of the first |
||||
| Licensed Product in the Field of Use: |
20,740 shares | |||
| FDA approval for commercial use, application or marketing of the first Licensed Product in the Field of Use, where “Field of Use” has the meaning assigned to it in Section 1.1.2 of the License Agreement: |
20,742 shares | |||
|
|
|
|||
| Total number of shares: |
72,222 shares | |||
|
|
|
|||
(ii) Acceleration of Exercisability Upon Certain Events. Upon the happening of any of the following events, this Option will, to the extent not then exercisable, become immediately exercisable:
(A) The effective date of an assignment or transfer of the License Agreement by the Company to a person or entity which is not an affiliate of the Company (with “affiliate” defined for purposes of this Section 2(c)(ii)(A) to mean means, as to any person, another person controlled by, under common control with, or controlling such person.; for these purposes, “control” means (1) the possession, directly or indirectly, of the power to direct the management or policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise, or (2) the ownership, directly or indirectly, of at least fifty percent (50%) of the outstanding voting securities or other ownership interest of a person or entity, or such lesser percentage as is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction.; or
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AlgoRx Capsaicin License Fee Stock Option
(B) The effective date of a change of control of the Company. For the purposes of this Section 2(c)(ii)(B), “change of control” means either of the following events:
(1) A merger or consolidation in which the Company is not the surviving entity (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction and other than any other transaction in which there is no material change in the identity of the shareholders of the Company or their relative shareholdings in the Company and in each such case such options are assumed, converted, or replaced by the successor or acquiring corporation); or
(2) A merger in which the Company is the surviving entity but after which the shareholders of the Company immediately prior to such merger (excluding any entity shareholder of the Company which merges with the Company in such merger, or which owns or controls another corporation or other entity which merges with the Company in such merger) do not own, immediately after such merger, voting control of the surviving entity.
- 3 -
AlgoRx Capsaicin License Fee Stock Option
X = Y(D-E) / D
where:
| X |
= | The number of Shares to be issued to the Holder pursuant to | ||||
| this Section 2(f). | ||||||
| Y |
= | The number of Shares covered by this Option in respect of | ||||
| which the Net Exercise election is made pursuant to this | ||||||
| Section 2(f). | ||||||
| D |
= | The fair market value of one share of Common Stock, as | ||||
| determined in good faith by the Board of Directors of the | ||||||
| Company (the “Board”), as of the date the net issue election | ||||||
| is made pursuant to this Section 2(f). | ||||||
| E |
= | The Exercise Price in effect under this Option at the time | ||||
| the Net Exercise election is made pursuant to this Section | ||||||
| 2(f). | ||||||
The Board will promptly respond in writing to an inquiry by the Holder as to the fair market value of one share of Common Stock. To the extent legally required, the Holder will pay in cash the par value of any shares purchased by such Net Exercise.
(g) Issuance Of New Option. In the event of any exercise of the purchase right represented by this Option, certificates for the Shares so purchased will be delivered to the Holder within ten (10) days after receipt of such payment and, unless this Option has been fully exercised or has expired, a new Option representing the portion of the Shares, if any, with respect to which this Option will not then have been exercised will also be issued to the Holder within such ten (10) day period.
(a) Reclassification, Reorganization, Consolidation Or Merger. In case of any reclassification of the Common Stock, or any reorganization, consolidation or merger of the Company with or into another corporation (other than a merger or reorganization with respect to which the Company is the continuing corporation and which does not result in any reclassification of the Common Stock), the Company, or such successor corporation, as the case may be, will execute and deliver to Holder a new warrant in substitution for this Option which will provide that the Holder will have the right to exercise such new warrant and upon such exercise to receive, in lieu of each share of Common Stock previously issuable upon exercise of this Option, the number and kind of securities, money and property receivable upon such reclassification, reorganization, consolidation or merger by a holder of shares of Common Stock of the Company, for each share of Common Stock otherwise issuable hereunder. Such new Option will provide for adjustments which will be as nearly equivalent as practicable to the adjustments provided for in this Section 3 including, without limitation, adjustments to the Exercise Price and to the number of shares issuable upon exercise of this Option. The provisions of this Section 3(a) will similarly apply to successive reclassifications, reorganizations, consolidations or mergers.
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AlgoRx Capsaicin License Fee Stock Option
4. Compliance With Securities Law; Transferability Of Option.
(b) Transferability Of Option. This Option may not be transferred or assigned in whole or in part in any manner unless (i) approved in writing by the Company prior to such proposed transfer being effected (which approval will not be unreasonably withheld) or (ii) upon death or by laws of descent or by bequest through a will or trust instrument. Subject to the provisions of this Section 4(b), title to this Option may be transferred in the same manner as a negotiable instrument transferable by endorsement and delivery, by execution and delivery of a completed Assignment Form attached hereto as Annex II, incorporated herein by reference.
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AlgoRx Capsaicin License Fee Stock Option
| ALGORX PHARMACEUTICALS, INC. | ||
| By: | /s/ Xxxxxx Xxxx | |
| Name: | Xxxxxx Xxxx | |
| Title: | ||
| OPTION ACCEPTED AND AGREED: |
| /s/ Xxxxx X. Xxxxxxxx |
| (Signature of initial Option Holder) |
| Date signed: August 29, 2001 |
- 6 -
ANNEX I
NOTICE OF EXERCISE
DATE: ,
AlgoRx Pharmaceuticals, Inc.,
Re: Common Stock Option Notice of Exercise
Ladies/Gentleman:
On this date, the undersigned , as the Holder of, and as defined in, that certain Option (the “Option”) dated as of August 28, 2001 from the Company to the original holder of such Option, hereby acquires from AlgoRx Pharmaceuticals, Inc., a Delaware corporation (the “Company”), an aggregate of shares (the “Restricted Securities”) of the Common Stock of the Company by exercise of the Option hereby for such number of shares.
(b) The undersigned has acquired the Restricted Securities for the undersigned’s own account and no one else has any beneficial ownership in the Restricted Securities.
2. Restrictions On Transfer. The undersigned understands that:
(a) In reliance upon the representations and warranties set forth herein, the Restricted Securities have not been registered with the Securities and Exchange Commission (the “SEC”), and accordingly may not be offered, sold or otherwise transferred except in compliance with the Securities Act (including any exemptions from registration thereunder);
(b) The undersigned must bear the economic risk of the undersigned’s investment in the Restricted Securities indefinitely unless the Restricted Securities are registered pursuant to the Securities Act or, in the opinion of counsel in form and substance satisfactory to the Company, an exemption from the registration requirement is available;
(c) The undersigned cannot be assured that any exemption from the registration requirement will be available should the undersigned desire to transfer the Restricted Securities, and therefore, the undersigned may not be able to dispose of or otherwise transfer the Restricted Securities, under the circumstances, in the amounts, or at the time proposed by the undersigned;
(d) Rule 144 promulgated under the Securities Act, which provides for certain limited, routine sales of unregistered securities, is not presently available with respect to the Restricted Securities, and the Company is under no obligation to furnish the information that might be necessary to enable the undersigned to sell any of the Restricted Securities under Rule 144; and
(e) Only the Company may file a registration statement with the SEC, and except as may be provided in any written agreement between the Company the Holder: (i) the Company is under no obligation to do so with respect to the Restricted Securities; nor (ii) does the Company have any obligation to file any other disclosure statement with the SEC with respect thereto.
3. Legend And Stop-Transfer Orders. The undersigned understands that, if required by applicable federal securities laws at the date of issuance of the Restricted Securities, certificates or other instruments representing any of the Restricted Securities acquired by the undersigned will bear a legend substantially similar to the following, in addition to any other legends required by federal or state laws, or by any contractual agreement binding upon the undersigned with respect to the Restricted Securities:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
The undersigned agrees that, to ensure and enforce compliance with the restrictions imposed by applicable law and those referred to in the foregoing legend, or elsewhere herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, with respect to any certificate or other instrument representing Restricted Securities, or if the Company transfers its own securities, that it may make appropriate notation to the same effect in the Company’s records.
4. Representations And Warranties. The undersigned represents and warrants that:
(a) The undersigned has had access to all information regarding the Company, its present and prospective business, assets, liabilities and financial condition that the undersigned considers important to making the decision to invest in the Restricted Securities. The undersigned has had ample opportunity to ask questions of and receive answers from the Company’s representatives concerning this investment and to obtain any and all documents requested in order to supplement or verify any of the information supplied.
(b) The undersigned recognizes that the investment in the Restricted Securities involves special and substantial risks. The undersigned recognizes (i) the highly speculative nature of the investment, (ii) the financial hazards involved, (iii) the lack of liquidity of the Restricted Securities and the restrictions upon transferability thereof, (iv) the qualifications and backgrounds of the principals of the Company, and (v) the tax consequences of investment in Restricted Securities, among other matters.
(c) The undersigned is capable of evaluating the merits and risks of an investment in the Restricted Securities and is financially capable of bearing a total loss of this investment.
- 2 -
(d) The undersigned either (i) has a preexisting personal or business relationship with the Company or its principals or (ii) by reason of the undersigned’s business or financial experience, has the capacity to protect the undersigned’s own interests in connection with this transaction.
(e) The offer and sale of the Restricted Securities was not accomplished by the publication of any advertisement.
(f) Neither the Company nor its attorneys or other advisors or representatives have made any representations or warranties to the undersigned with respect to the income or other tax consequences of an investment in the Restricted Securities, and the undersigned is in no manner relying on the Company or its attorneys or other advisors or representatives for an assessment of such tax consequences.
| (g) The undersigned’s address is: |
| |
|
| ||
|
|
| PRINTED NAME IF INDIVIDUAL : |
PRINTED NAME IF CORPORATION. | |||||||
| PARTNERSHIP OR TRUST: |
||||||||
|
|
||||||||
|
| ||||||||
|
|
||||||||
| (Signature) |
By: |
| ||||||
| Date signed: |
|
Name: |
| |||||
| Address: |
|
Title: |
| |||||
|
|
Date signed: |
| ||||||
|
|
Address: |
| ||||||
| Social Security Number: |
|
| ||||||
| Taxpayer Identification Number: | ||||||||
|
| ||||||||
- 3 -
ANNEX II
ASSIGNMENT FORM
ALGORX PHARMACEUTICALS, INC.
COMMON STOCK OPTION
ISSUED AS OF AUGUST 28, 2001
(To assign the foregoing Option, execute this form and supply the required information)
(Do not use this form to exercise the Option to purchase shares.)
FOR VALUE RECEIVED, the Option for Common Stock of ALGORX PHARMACEUTICALS, INC. initially issued as of August 28, 2001 (the “Option”) and all rights evidenced thereby are hereby assigned by the Assigning Holder as shown below, to the Assignee as shown below:
| Printed Name Of Assigning Holder: |
| |
| Assigning Holder’s Signature*: |
| |
| Title (as appropriate): _____________________________________________________ | ||
| Assigning Holder’s Address: |
| |
|
| ||
| Printed Name of Assignee: |
| |
| Assignee’s Signature*: |
| |
| Title (as appropriate): _____________________________________________________ | ||
| Assignee’s Address: |
| |
|
| ||
| Date of Assignment: |
| |
CONSENT TO ASSIGNMENT
(MUST BE COMPLETED AND SIGNED IN ORDER FOR ASSIGNMENT TO BE VALID:
| ALGORX PHARMACEUTICALS, INC. | ||
| By: |
| |
| Name: | ||
| Title: | ||
| Date signed: | ||
—————————————————————————————————————————————————————
* The signature to this Assignment for the Assigning Holder must correspond with the name of such then-current Assigning Holder as it appears on the face of the assigned Option at the time of such proposed transfer, without any change. Officers of corporations and those acting in a fiduciary or other representative capacity for the Assigning Holder must file with AlgoRx, with this Assignment, proper evidence of authority to assign the Option.
This Term Sheet, executed by the parties effective as of June , 2001 (the “Effective Date”), summarizes the terms proposed for a license to AlgoRx Pharmaceuticals, Inc. (“AlgoRx”) from Xxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxx and Xxxxx Xxxxxxxxxx (together, the “Inventors”) with respect to certain intellectual property rights of the Inventors as described generally in this Term Sheet.
Page 1
2. Field Of Use. Any human or non-human diagnostic, prophylactic or therapeutic use of the technology to which rights were licensed to AlgoRx under the License Agreement.
| • | Upon execution and delivery by AlgoRx and the Inventors of the License Agreement: $50,000.00 |
| • | Upon issuance of European patent EP 0998288A: $25,000.00 |
| • | Upon issuance of Japanese patent: $25,000.00 |
| • | Upon first administration to a subject, using technology under the License Agreement, in an FDA-approved clinical trial: $125,000.00 |
| • | First subject administered drug, using technology under the License Agreement, in a Phase III trial: $200,000.00 |
| • | Upon FDA approval for commercial use of the first product in the Field of Use using technology under the License Agreement: $350,000.00 |
TOTAL CASH PAYMENTS: $775,000.00
Additionally, upon execution and delivery by AlgoRx and the Inventors of the License Agreement, AlgoRx will reimburse the Inventors, in such individual amounts as the Inventors agree in writing among themselves as will be set forth in the License Agreement, (i) for actual costs incurred between the Effective Date and the execution of the License Agreement, and (ii) up to a maximum, for all such amounts in the aggregate, among all of the Inventors so reimbursed, of $45,000.00, for documented legal fees, filing fees, and costs incurred up to the Effective Date by the Inventors, related to the filing, prosecution, and maintenance of U.S. Patent No. 5,962,932 and foreign counterparts thereof.
Page 2
| • | Upon execution and delivery by AlgoRx and the Inventors of the License Agreement 30,000 shares. |
| • | Upon first administration to a subject, using technology under the License Agreement, in an FDA-approved clinical trial: 72,222 shares. |
| • | First subject-administered drug, using technology under the License Agreement, in a Phase III trial: 72,222 shares. |
| • | Upon FDA approval for commercial use of the first product in the Field of Use using technology under the License Agreement: 72,222 shares. |
TOTAL SHARES OF COMMON STOCK UNDER SUCH OPTIONS: 216,666 SHARES
The exercise price for the shares purchasable under each such option will be $1.00, payable in cash. Such options will not terminate upon cessation of service upon Scientific Advisory Board, or cessation of any other relationship with AlgoRx other than the License Agreement, of the relevant Inventor, and such options will after any such cessation continue to be exercisable according to the achievement by AlgoRx of such relevant milestones. The options will accelerate and become fully exercisable upon (a) a change of control (as defined below) of AlgoRx or (b) an assignment or transfer of the License Agreement by AlgoRx to a person or entity which is not an affiliate of AlgoRx. Once the options become so fully exercisable, the Inventors will have 90 days to exercise their options.
For purposes of such option acceleration, “change of control” will mean either (a) a merger or consolidation in which AlgoRx is not the surviving entity (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of AlgoRx in a different jurisdiction, and other than any other transaction in which there is no material change in the identity of the shareholders of AlgoRx or their relative shareholdings in AlgoRx and in each such case such options are assumed, converted or replaced by the successor or acquiring corporation), or (b) a merger in which AlgoRx is the surviving entity but after which the shareholders of AlgoRx immediately prior to such merger (excluding any entity shareholder of AlgoRx which merges with AlgoRx in such merger, or which owns or controls another corporation or other entity which merges with AlgoRx in such merger) do not own, immediately after such merger, voting control of the surviving entity.
Page 3
6. Patent Support. Under, and following execution and delivery of, the License Agreement, AlgoRx will assume responsibility for, and will pay all expense for, the filing and prosecution, including without limitation maintenance and filing fees, of all patents licensed to AlgoRx under the License Agreement, and to prosecute alleged infringers of, and defend, such patents. Under the License Agreement, the Inventors will agree to assist AlgoRx in such patent activities.
Page 4
10. Non-Binding Nature Of Certain Provisions Of This Term Sheet; Final Agreements. Except for the provisions of Section 8 and Section 9 hereof, which are binding upon the parties, this Term Sheet is not binding in any way on either party or any third party, and is intended only as a summary of the parties’ discussions to date to enable them to continue their negotiations with the intent of executing and delivering final binding written agreements as to the matters described in this Term Sheet. The parties further acknowledge that this Term Sheet does not contain all matters upon which agreement must be reached in order for the definitive agreements to be signed, and undertake to pursue negotiations in good faith towards the execution of definitive agreements. Execution of the final agreements will be subject to approval thereof by AlgoRx’s Board of Directors, and to AlgoRx’s satisfaction with the results of its due diligence inquiry into the Inventors’ technology and intellectual property rights proposed to be licensed to AlgoRx under the License Agreement, including any rights of any third parties in such technology and intellectual property.
Page 5
| ALGORX PHARMACEUTICALS, INC. | INVENTORS | |||||
| By: |
/s/ Xxxxxx Xxxx |
/s/ Xxxxx X. Xxxxxxxx | ||||
| Name: Xxxxxx Xxxx | Xxxxx X. Xxxxxxxx | |||||
| Title: Chief Business Officer | Date signed: 6-20, 2001 | |||||
| Date signed: June 18, 2001 | ||||||
| /s/ Xxxxxxx X. Xxxxx | ||||||
| Xxxxxxx X. Xxxxx | ||||||
| Date signed: June 20, 2001 | ||||||
| /s/ Xxxxx Xxxxxxxxxx | ||||||
| Xxxxx Xxxxxxxxxx | ||||||
| Date signed: June 19, 2001 | ||||||
Page 6