HEADS OF AGREEMENT
Exhibit
99.5
Entered
into between
1. Sangui
Biotech GmbH, Xxxxxx-Herrhausen-StraBe 44, D-58455 Witten, represented
by its Managing Director Xxxxxxxx Xxxxxxx,
-in
the following
“Sangui”-
And
2. Elektronika
Robotica Y-Control S.A. de C.V (ERC S.A. de C.V.), Division XXX XXXX
XXX., Xxxxx 00 Xxx., Xxxxxxx Int. D, Centro Monterrey N.L. Mexico C.P. 64000,
represented by its Director Ing. Xxxxxxx Xxxxxxxx Mena,
-in
the following
“ERC”-
PREMABLE
Sangui
has invented and developed certain haemoglobin based products and know-how
for
blood related pharmaceuticals/drug products and medical products such as
an
artificial oxygen carrier (Artificial Blood Additive), in the following
“Additive” and wound protection devices such as Hemo-Spray,
wound cleaner liquid/gel and Chitoskin wound pads, in the following
“Hemo, WCL/G and Chito”. Sangui holds all related
intellectual property rights including – but not limited to – various patents
and patents rights pending for registration as well as the production
know-how. The Additive as well as the Hemo, WCL/G and Chito shall
obtain proper registration either as pharmaceuticals/drug products or medical
products in order to be marketed and applied to patients in the whole
world.
Especially
with regard to Additive it is projected as an artificial oxygen carrier to
be
administered intravenous as an emergency device for acute oxygen deficiencies
for instance in case of lung shock, stroke, myocardial infarction and other
indications. Sangui and ERC want to register Additive as a medical
device/pharmaceutical in the USA, Canada, MIDDLE- and South-America, in the
following “the Americas”. ERC will subsequently
exploit its commercial values within the Americas whereas Sangui will retain
the
right to exploit the commercial values in the rest of the world.
Additive
has so far only been manufactured in laboratory quantities and has been
administered in but a few animals/humans without negative results.
Therefore,
in order to achieve a registration under FDA/EU rules, further tests and
clinical studies are necessary. In order to produce test substance of
“Additive”, a manufacturing plant certified for the production of
pharmaceuticals has to be identified and/or the technical hardware installed
if
necessary. This shall be done in Mexico.
All
data
so far gained are part of this Agreement, together with transcripts of the
relevant patents and their documentation i.e. description of “Additive” and all
other intellectual material including testimonials and demographic material
and
indications that Sangui deem applicable. Sangui can not however
guarantee the accuracy of any such data that are derived from public
sources. ERC acknowledges to have had ample opportunity to study
these documents and to understand their particular meaning.
These
parties to this Agreement expect “Additive” to have a huge market potential
after successful registration as a medical device/pharmaceutical under FDA/EU
rules. IT is however understood that Sangui cannot guarantee the
successful registration and/or successful marketing of “Additive” for various
reasons, inter alia but not restricted to its non-toxical properties, its
therapeutic powers or any other property necessary. This is in
particular true for any legal changes en route or competitive
developments. ERC acknowledges expressly to fully understand the
implication of the aforementioned risks, including the risk that their
investment might yield a part or even total loss. Bearing in mind the
above, the parties now agree to the following:
1. Hemo-Spray,
Chitoskin wound pads und wound cleaner liquid/gel
The
Hemo-Spray requires a registration as a drug/pharmaceutical. Sangui
cannot warrant a successful registration in the USA (FDA) or within the EU
but
is strongly interested in such registration
1.1 Registration
in Mexico by ERC
ERC
undertakes to obtain a certificate from the Mexican Health Department
(Secretaria de Salud Nacional) represented by the Sub-Secretary of Regulation
and Sanitary Control (Sub-Sekretaria de Regulacion y Xxxxxxxx Sanitario)
for the
certification and distribution of the Hemo, Chito, and WCL/G to the Mexican
Institute of Social Security (Instituto Mexicano del Seguro
Social).
ERC
undertakes all necessary and reasonable efforts especially but not limited
to
the procurement of all necessary documentation, testing, recording of results
and validation of medical data in order to achieve the certification and
registration of the Hemo, Chito and WCL/G in Mexico for the Mexican
market. ERC shall bear all costs related to and connected with such
certification and registration in Mexico.
1.2 Use
of this
data for registration outside the Americas by Sangui
Insofar
as ERC generates from its testing, the procurement of the necessary
documentation, the recording and the validation of medical data these shall
be
made accessible to Sangui or Sangui consultants/agents and shall be deemed
to be
non-exclusive intellectual property of Sangui and
ERC. Notwithstanding the above Sangui shall be entitled to make use
of all such medical data with regard to the application for an EU registration
or any other registration procedure within the rest of the world (exclusive
of
the Americas.)
1.3 Registration
in the rest of the Americas by ERC
After
the
registration of Hemo, Chito and WCL/G in Mexico for the Mexican market ERC
intends to obtain a registration of Hemo and WCL/G in the USA and Canada
and for
Hemo, Chito and WCL/G in the rest of the Americas.
ERC
is
informed that Sangui has already granted marketing and distribution rights
for
the USA and Canada to another sales partner. Nonetheless Sangui will
undertake reasonable efforts to ensure that ERC will be permitted to include
Chito into their sales packages of Hemo and WCL/G also in the USA and
Canada.
1.4 Support
by Sangui
Sangui
shall support and advise ERC with all existent products, test information,
technical protocols and existing registration – if any – in Europe for the above
named product and shall make such medical data records available to ERC with
regard to the certification and registration process in
Mexico. Sangui shall bear its own costs for the support.
1.5 Exclusive
distribution rights in the Americas for ERC
In
consideration for ERC’s efforts to obtain for the above named products a
certification and registration in Mexico either as a pharmaceutical or medical
product Sangui grants to ERC the exclusive distribution rights for the products
Hemo, WCL/G and Chito for the territory of Mexico. Furthermore and in
consideration for ERC’s financing obligations for the Additive, as mentioned
below, Sangui grants ERC the exclusive distribution rights for Hemo and WCL/G
in
the USA and Canada and for Hemo, Chito and WCL/G in the rest of the Americas
after ERC obtained the registration in the respective countries.
These
distribution rights are limited in time for the time period for which ERC
shall
purchase such products from Sangui.
In
addition, Sangui herewith grants to ERC the right to use the name and trademark
Sangui for the distribution, marketing and advertising of those products
named
above. Also, Sangui approves the incorporation by ERC or its major
shareholders of a company in Mexico engaged solely in the distribution and
marketing of the above named products. The company shall be named
Sangui Biotech Latino America S.A. de C.V. in the following “SLA”.
The
licensing of these non-exclusive rights is limited territorially to Mexico,
Middle- and South-America for the interim period until a full fledged
Distribution and Trade Xxxx Agreement has been executed amongst the
parties.
1.6 Initial
trials in Mexico
Sangui
and ERC agree to start their business relationship as follows:
This
Section stipulates details about product sizes, qualities and prices.
These details are trade secrets and have been stricken from this
attachment.
The
trials shall be carried out by ERC in collaboration with a local university/the
Health Department of Mexican Government represented by Sub-Secretary of
regulation and sanitary control as well as the Epidemiology State Department
(Departamento de Epidemologia del Estado) and under the supervision of Sangui
and its consultant/agent Medioconomics GmbH, Xxxxxxxxx XxxxXx 00x 00000
Xxxxxxxx. All test and medical trial data shall be recorded and
provided to Sangui and Medioconomics. Sangui and/or its agent shall
attend initial demonstrations and instructions to the local personnel with
the
personnel support of Professor Barnikol or Xx. Xxxxxxxxx.
1.7 Product
prices
This
Section stipulates details about product sizes, qualities and prices.
These details are trade secrets and have been stricken from this
attachment.
1.8 Final
Distribution and Trademark Agreement
The
details of the Exclusive Distributorship and the Trademark Agreement shall
be
subject to a separate and final Agreement between Sangui and ERC which shall
be
negotiated and entered into once ERC will have received the certification
and
registration for Hemo from the Mexican Department of Health.
2. Additive
2.1 Registration
of Additive in the USA
Sangui
is
strongly interested to obtain a registration of Additive as a
pharmaceutical/drug with the FDA in the USA.
ERC
shall
finance at first the Mexican and ensuing the FDA Registration process for
Additive as a pharmaceutical/drug in the USA. The financing for the FDA
Registration shall become due once the registration process in Mexico has
successfully arrived at the stage of either a positive proof of concept trial
in
Mexico or the registration of Additive in Mexico as a pharmaceutical, whatever
comes first.
The
FDA-process shall be managed by Medicoforum GmbH and/or Medioconomics GmbH,
Xxxxxxxxx Xxxxxx 00 b. 30625 Hannover. Medicoforum and/or
Mediconomics shall also be the appointed representatives of Sangui acting
as the
applicant and the legal entity to receive the market authorization holder
status
from the FDA.
2.2 Financing
of
the registration process by ERC
The
funds
necessary for the registration process in Mexico and with the FDA shall also
cover all costs related to the manufacturing of so called pilot badges of
the
Additive necessary for the registration under Mexican and FDA rules as a
pharmaceutical or medical device and the scaling-up.
ERC
will
finance the consultancy fees of Medioconomics and Medicoforum for the managing
of the registration process for Additive with the FDA up to the total limit
of
US$ 1.0 million but only in the case of a successful registration of Additive
in
the USA.
ERC
does
not bear own costs of Sangui for the registration process.
The
funding for the FDA registration shall be provided by ERC in instalments
in
accordance with a master project plan which will include the following stages
for the registration process:
· The
Establishment and production of the Comon Technical Document (CTD) inclusive
of
all documentation including the general information, the manufacturer, the
characterization, the control of the drug substance, the reference standards
or
materials, the container closure system, the stability system, the drug product
including name and dosage form, the description and composition of the drug
product, the pharmaceutical development, the manufacture (name, dosage form),
control of excipients (name, dosage form), control of drug product (name,
dosage
form), the reference standards or materials (name, dosage form), container
closure system (name, dosage form) and stability.
· Also included are non-clinical overviews, clinical overviews, the non-clinical summary including pharmacology written summary and the pharmacokinetics written summary as well as the toxicology written summary and the clinical summary including summary of biopharmaceutical studies and associated analytical methods, summary of clinical pharmacology studies, summary of clinical efficacy, the summary of clinical safety, the literature references and the synopsis of individual studies.
· Module
three of the registration process is the quality item inclusive of chemical
pharmaceutical and biological information for chemical active substances
and
biological medicinal products.
· The
funding shall also include the toxicology tests, the literature research,
the
biopharmaceutical tests, pharmacokinetic testing as well as the clinical
testing
phases I to III all of which shall take place in Mexico. The clinical
tests will not start before the tests for Hemo, Chito and WCL/G have been
finished.
The
progress of the registration process shall be funded by ERC in accordance
with
the stages of the registration procedure inclusive of the funding for the
erection and maintenance of a pilot production facility for Additive to be
governed by FDA rules on the standards and requirements for a drug manufacturing
facility including the provision of hardware, the validation of the processing
control mechanisms, sources of raw materials and semi products as well as
the
documentation of the manufacturing process.
ERC
or
its agent SLA shall manufacture the test substances and the scaling up of
test
substances in Mexico at its own cost.
ERC’s
finance obligation shall cease as soon as it becomes clear and final that
Additive will not receive a registration as a pharmaceutical or medical
device. Notwithstanding other failures, in case the results of the
proof of concept trials are negative the parties shall consider this as a
final
failure of the registration.
2.3 Agency
Medicoforum/Mediconomics
shall inform both parties periodically and upon written request upon any
progress on the FDA Registration process and shall determine when and what
amounts of the funding shall be released by ERC for the next stage in the
registration process.
In
addition to the process management by Medicoforum/Mediconomics in accordance
with Section 2.1 Medicoforum/Mediconomics will be retained for the supervision
of the Mexican registration process.
2.4 Manufacturing
Facilities
Sangui
shall prepare all the technical documentation in relation to the requirements
for the manufacturing facilities, the manufacturing process of the pilot
badges
and the scaling-up test substances and shall supervise their implementation
and
subsequent operation with its own personnel and that of Medicoforum and
Mediconomics.
Sangui
will contract with Medicoforum/Mediconomics GmbH Hannover to the effect that
Medicoforum/Mediconomics shall have the legal and formal lead with respect
to
the registration process under FDA/EU rules.
Sangui
confirms and warrants that Medicoforum/Mediconomics has agreed to enter into
a
Service Agreement with Sangui regarding the above mentioned services and
support
in regards to the FDA/EU registration of Additive as a medical
device/pharmaceutical.
In
regards to the Mexican Registration ERC may contract Medicoforum/Mediconomics
as
their agent.
Sangui
shall be entitled to all data and documentation generated by and arrived
from
the tests and studies executed by ERC or SLA in Mexico or in any other facility
used for the testing and procurement of necessary procedures in regards to
the
FDA/EU registration. Sangui is especially entitled to use all these
data for its own registration and marketing activities in the rest of the
world
(outside of the Americas) without any restriction as if it is its own
intellectual property.
Also,
ERC
shall be entitled to any documentation or results of testing and other
procedures exercise by Sangui or its agents with regard to the FDA/EU
registration for the purpose of its certification and registration of Additive
in Mexico.
2.5 Registration
of Additive in Mexico by ERC
ERC
and/or SLA shall be obliged and entitled to apply for a certification and
registration of Additive as a medical device/pharmaceutical in
Mexico. Furthermore ERC or SLA shall be entitled to register Additive
as its own product and shall receive the status of the market authorization
holder. ERC and/or SLA shall arrange for the implementation of the
manufacturing facility, the necessary tests and studies as well as documentation
to be carried out in Mexico.
2.6 Exclusive
distribution rights in the Americas for ERC
In
consideration for ERC’s funding the manufacturing as well as testing services in
accordance with the Mexican and the FDA/EU rules ERC or SLA shall have the
exclusive and unlimited marketing and distribution rights for the Additive
within the Americas. Sangui and ERC or SLA shall enter into a License
Agreement on the Trademark Sangui and/or Sangui Biotech and any associated
trademark later on developed by Sangui limited to the territories of the
Americas.
2.7 Final
Agreement
The
parties agree that a Final Agreement on the cooperation in regards to the
manufacturing and distribution of Additive shall be entered into once it
has
been registered as a pharmaceutical/medical device with the Health Deparment
of
the Mexican Government or a FDA Registration has been achieved.
2.8 Intellectual
Property
None
of
the above shall be considered to constitute a transfer of any proprietary
rights
in the artificial oxygen carrier “Additive” and all intellectual property
associated therewith and held by Sangui so far or developed in the future
from
Sangui to ERC or SLA. In any case of doubt and for the sake of
clarity the rights of ERC in such intellectual property held by Sangui shall
be
restricted to the right to make use of such intellectual property.
3. PureMoisture
In
consideration for ERC’s funding of the Additive registration process and after
the successful registration of Additive in the USA Sangui will grant ERC
the
exclusive distribution right and a trade xxxx license for “PureMoisture” in the
Americas for Sangui’s PureMoisture products exclusive of
Argentina. The distribution right is limited in time for the time
period for which ERC or SLA shall purchase the PureMoisture-products exclusively
from Sangui. The details of a Exclusive Distributorship and Trademark
Agreement shall be subject to a separate and final Agreement between Sangui
and
ERC/SLA.
4. Timing
for Final Agreement
The
parties agree that a Final Agreement on the mutual rights and obligations
with
regard to the products named under Section 1 and Additive shall be entered
into
once a) the initial trials as referred to in Section 1.6 have been completed
to
the satisfaction of the parties and b) the full documentation for the necessary
manufacturing facilities, technical requirements in relation to the
manufacturing, testing and recording process as well as the registration
process
has been established and agreed upon by the parties. The parties
envisage that this full fledged documentation shall be available at the
beginning of the year 2007.
5. Termination
Sangui
shall be entitled to terminate all rights granted by Sangui to ERC under
these
Heads of Agreement if ERC fails to fulfill its financing obligations under
Section 2. However, once the financing obligation has ceased in
accordance with Section 2.2 last paragraph the termination right
expires.
6. Confidentiality
Both
parties agree to keep any information resulting out of or in connection with
the
Heads of Agreement and the project strictly confidential and to commit all
their
agents and service providers to a Confidentiality Agreement in accordance
with
this provision.
7. Form
Requirements
Any
changes or amendments to this Heads of Agreement shall be made in
writing. This applies as well to any extension, termination and
modification of this Clause 9.
8. Transfer
of Rights from ERC to SLA
ERC
is
entitled to transfer all rights granted by Sangui in this Agreement and/or
arising from this Agreement with Sangui to the new company, SLA as long as
more
than 90% of the shares in this new company are held by ERC or the major
shareholders of ERC.
9. Solution
In
case
that one or multiple of the stipulations in this Agreement is/are invalid
or
inapplicable the parties shall agree upon a valid/or applicable stipulation
which comes as close as possible to the economic effect of the invalid or
inapplicable provision. The same is true for any incomplete provision
or stipulation.
10. Governing
Law/Forum/Arbitration
This
Agreement shall be governed by Swiss law and shall be subject to exclusive
arbitration under the Rules of Arbitration Of the International Chamber of
Commerce, Paris. The forum of the arbitral tribunal shall be
Zurich. The language of the arbitration shall be
English.
/s/ Xxxxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxxxx Xxxx
_________________________
_________________________
Xxxxxxxx Xxxxxxx,
Managing Director Xxxxxxx
Xxxxxxxx Xxxx, CEO
Sangui
Biotech
GmbH Elektronica Robotica
Y-Control
S.A.
de
C.V. (ERC S.A. de
C.V.)
