CO-DEVELOPMENT AGREEMENT
BETWEEN SRI AND EUROBIOTECH
TABLE OF CONTENTS
1. DEFINITIONS ..............................................................1
2. LICENSE AND CO-DEVELOPMENT PROGRAM .......................................3
3. TECHNICAL INFORMATION LICENSE ............................................4
4. LICENSE FEE AND RESEARCH AND DEVELOPMENT FUNDING .........................5
5. ACQUISITION ..............................................................6
6. COMMERCIALIZATION STAGE ..................................................7
7. SUBLICENSING .............................................................8
8. PAYMENTS AND REPORTS .....................................................8
9. RECORDS .................................................................10
10. DILIGENCE ...............................................................10
11. OWNERSHIP OF THE TECHNOLOGY, TECHNICAL INFORMATION AND
IMPROVEMENTS ............................................................10
12. PATENT PROSECUTION ......................................................11
13. INFRINGEMENT BY THIRD PARTY .............................................11
14. REVOCATION PROCEEDINGS ..................................................12
15. INFRINGEMENT OF THIRD PARTY RIGHTS ......................................13
16. REPRESENTATIONS .........................................................13
17. DISCLAIMER ..............................................................14
18. INDEMNIFICATION .........................................................14
19. INSURANCE ...............................................................15
20. TERM AND TERMINATION ....................................................15
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2]. CONFIDENTIALITY; PUBLICATION; PUBLICITY .................................16
22. DISPUTE RESOLUTION ......................................................18
23. ASSIGNABILITY ...........................................................19
24. REFORM ..................................................................20
25. WAIVER AND ALTERATION ...................................................20
26. MARKING .................................................................20
27. IMPLEMENTATION ..........................................................21
28. GOVERNING LAW ...........................................................21
29. EXPORTATION OF TECHNICAL INFORMATION ....................................21
30. HEADINGS ................................................................21
31. PARTIES INDEPENDENT .....................................................21
32. COUNTERPARTS ............................................................22
33. FORCE MAJEURE ...........................................................22
34. NOTICE ..................................................................21
35. EXECUTION ...............................................................23
APPENDIX I - PATENTS
APPENDIX II - TERMS FOR EUROBIOTECH GROUP, INC. ("EUROBIOTECH")
AND SOUTHERN RESEARCH INSTITUTE ("SOUTHERN") CO-
DEVELOPMENT AGREEMENT
APPENDIX III - EXTENSION OF THE CO-DEVELOPMENT PROGRAM BETWEEN
SOUTHERN RESEARCH INSTITUTE AND EUROBIOTECH GROUP,
INC.
APPENDIX IV - GROSS PROFIT MARGIN AND NET INCOME EXAMPLES
APPENDIX V - INTER-INSTITUTIONAL AGREEMENT
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CO-DEVELOPMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into and effective this 31st day of
August 1998, the same date affixed hereto by the party last signing this
Agreement, by and between Southern Research Institute having its principal place
of business in Birmingham, Alabama, herein called "SRI", and Eurobiotech Group,
Inc. having a place of business in ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ herein called "Eurobiotech".
WITNESSETH
WHEREAS, SRI has rights in patents and technical information relating to the
development and uses of 2'-fluoro-2-halo substituted purine nucleosides
effective in vivo against hematologic malignancies and solid tumors as well as
potentially effective for other therapeutic indications such as skin disorders,
arthritis and transplantation immunity; and
WHEREAS, Eurobiotech recognizes that SRI owns inventions and intellectual
property useful in the conduct of Eurobiotech's business; and
WHEREAS, Eurobiotech recognizes that its anticipated business activity will
encompass the practice of technology that requires a license under patents owned
by SRI; and
WHEREAS, Eurobiotech wishes to acquire certain rights to practice the inventions
of such patents and technical information; and
WHEREAS the parties have signed a "Terms for ... Co-Development Agreement" set
forth in Appendix II, to enter into this Agreement, and
NOW THEREFORE, in consideration of the mutual covenants herein contained and
intending to be legally bound thereby, the parties agree as follows:
1. DEFINITIONS
As usual herein the following terms shall have the meanings set forth below:
A. Co-Development Program means the joint development of the Technology by
Eurobiotech and SRI.
B. Commercialization Stage means that period of time during which Eurobiotech
is directly marketing and selling Product(s) through normal distribution
channels in any region of the Territory after receiving regulatory agency
approval to do so in such region.
C. Cost of Goods Sold means the release to the current period as a result of
the sale of a Product(s) of inventoriable costs (the sum of direct costs
and manufacturing overhead) adjusted for changes in ending and beginning
inventory levels.
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D. Eurobiotech means Eurobiotech Group, Inc. and joint ventures, subsidiaries,
or other business entities controlled directly or indirectly by Eurobiotech
or in which Eurobiotech owns at least fifty-one percent (51%) interest.
E. Field means, and is limited to, the practice of the Patent, Invention and
Technical Information licensed hereunder for use in human health
applications.
▇. ▇▇▇▇▇ Margin means the difference between the manufacturing Cost of Goods
Sold and Gross Sales Revenue, with SRI royalties treated as an excluded
cost.
▇. ▇▇▇▇▇ Profit Margin means the ratio of Gross Margin to Gross Sales Revenue
expressed in percentage terms.
▇. ▇▇▇▇▇ Sales Revenue means the gross amount recognized by Eurobiotech or its
affiliates for the sale of a Product(s) through normal distribution
channels (as determined by generally accepted accounting principles), less
any deductions for value added taxes incurred and not recovered by
Eurobiotech or the equivalent in Great Britain or elsewhere in the
Territory.
I. Invention means patented and unpatented, patentable and unpatentable,
proprietary technology related to a 2'-fluoro-2-halo substituted purine
nucleoside (hereafter "Technology") developed by or on behalf of SRI, that
is (i) related to human health applications of the Technology or (ii)
necessary for the practice of Technology for human health applications as
disclosed and claimed in the Patent(s).
J. Improvement means those unencumbered technology advances in the Technology
made by or on behalf of SRI during the term of this Agreement that are
either within the scope of and would constitute an infringement of the
Patent claims or use Technical Information and are within the Field. SRI
shall be obligated to include within the licenses granted only those SRI
Improvements developed during the first three (3) years from the effective
date of the Agreement which would be reasonably deemed necessary for
Eurobiotech's practice of the Technology, and without which such practice
would constitute an infringement of SRI's rights, unless such grant is not
possible due to SRI's obligations to a third party. Notwithstanding the
limitation of SRI's obligation set forth in the previous sentence, all
Improvements developed under projects funded, in whole or in part, by
Eurobiotech will be included in the licenses granted in this Agreement. In
the event that a conflicting obligation prevents SRI from including an
Improvement within the grant of license, SRI shall use reasonable efforts
to assist Eurobiotech to obtain rights from the appropriate third party or
parties.
K. Licensed Technology means the Patent, Improvement, and Technical
Information relating to human health applications of Technology.
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L. Net Income means the difference between Gross Sales Revenue and the sum of
Cost of Goods sold and Operating Expenses (Appendix IV), with SRI
royalties, local taxes, corporate income taxes and foreign taxes treated as
excluded costs.
M. Patent means the patents and/or patent applications, set forth in Appendix
1, covering the Invention or Improvement as defined above, patents to be
issued pursuant thereto, and all divisionals, continuations,
continuations-in-part, reissues, substitutions, and extensions thereof, and
any patent issuing on a patent application filed after the Effective Date
of this Agreement which is included in the grant of license hereunder and
any foreign counterparts of the foregoing.
N. Product means a product, service, test, or information which is sold or
provided for a fee and but for the license granted herein would infringe
one or more claims of a Patent, or was discovered, developed, approved,
manufactured or marketed using an Invention, Improvement or Technical
Information.
0. Technical Information means unencumbered published or unpublished
confidential and proprietary information in the nature of research and
development information, knowledge and technical data, together with trade
secrets relating to the Technology, including any inventions in the
possession of and belonging solely to SRI on or prior to the Effective Date
of this Agreement and which SRI has the obligation to include in this
Agreement, or which comes into the possession of Eurobiotech during the
term of this Agreement and which is generated as a consequence of access to
technical information provided by SRI. SRI shall include herein only that
Technical Information which is reasonably necessary for Eurobiotech's
practice of the Invention or without which such practice would constitute
an infringement of SRI's rights. Technical Information includes only the
above information which is developed by or on behalf of SRI, or is
generated pursuant to research funded, in whole or in part, by Eurobiotech.
P. Territory means worldwide, with the exception of Japan and Southeast Asia.
Southeast Asia consists of Indonesia, Malaysia, Taiwan, Hong Kong,
Singapore, Vietnam, Cambodia, Thailand, Laos, Philippines and South Korea.
2. LICENSE AND CO-DEVELOPMENT PROGRAM
A. The parties to this Agreement hereby agree to jointly co-develop the
Technology according to the terms of this Agreement which supersedes the
"Terms for ... Co-Development Agreement" set forth in Appendix II and all
other written or verbal agreements, express or implied, between SRI and
Eurobiotech relating to co-development of the Technology except for the
written understanding set forth in Appendix III.
B. SRI hereby grants to Eurobiotech, to the extent of the Field for the
Territory, an exclusive license to make, have made, use and sell
Product(s).
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C. The exclusive license set forth herein shall remain exclusive for so long
as Eurobiotech meets the payments and other obligations set forth with
regard to the development and commercialization of the Licensed Technology
or a Product. If such conditions are not met, SRI, in its sole discretion,
may elect to terminate the Co-Development Agreement or take whatever
actions it deems necessary.
D. SRI reserves for itself all rights to practice the Inventions, Patent,
Improvements and Technical Information except as exclusively licensed
herein.
3. TECHNICAL INFORMATION LICENSE
A. To the extent it is able to do so, SRI hereby grants to Eurobiotech, to the
extent of the Field for the Territory, an exclusive license to use the
Technical Information necessary to practice the Technology such that
Eurobiotech may make, have made, use and sell Product(s), including
disclosures of the Technical Information as needed to obtain patent rights
or authorization to sell or manufacture Products or services in the Field
within any political jurisdiction requiring such disclosure.
B. The exclusive license set forth herein shall remain exclusive for so long
as Eurobiotech meets the payments and other obligations set forth with
regard to the development and commercialization of the Licensed Technology
or a Product. If such conditions are not met, SRI in its sole discretion
may elect to terminate the Co-Development Agreement or take whatever action
it deems necessary.
C. (1) SRI shall make efforts to make available to Eurobiotech Technical
Information in SRI's possession related to the Technology that SRI has the
obligation to disclose under this Agreement. Eurobiotech shall not disclose
to third parties any Technical Information furnished by SRI during the term
of this Agreement, or any time thereafter, provided, however, that
disclosure may be made of any such Technical Information at any time: (i)
with the prior written consent of SRI, or (ii) to the extent necessary, to
Eurobiotech's sublicensees and purchasers of Eurobiotech's Product(s) or
services, or (iii) after the same shall have entered into the public domain
through no fault of Eurobiotech or Eurobiotech's subsidiaries. Disclosure
of Technical Information is permitted without a prior written consent of
SRI to the extent required by statute, rule or regulation of a governing
body during the course of Eurobiotech's normal business practices, or in
the application or prosecution of an application for patent rights, or in
connection with securing financing for the development or commercialization
of the Technology or a Product. Eurobiotech shall inform SRI of any such
disclosure and use its best efforts to protect its confidentiality under
such disclosure. Any combination of Technical Information shall not be
considered in the public domain merely because individual elements thereof
are in the public domain. To the extent that any such Technical Information
is disclosed to Eurobiotech's sublicensees and purchasers of Eurobiotech's
Product(s) or services, the agreements contained in this Section shall be
made
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Eurobiotech under a confidentiality agreement to apply to and be made
binding upon all such parties.
(2) The fact that some or all of the Technical Information becomes public
knowledge shall not affect the financial obligations for use of the
Technical Information licensed under this Agreement if such Technical
Information was used or usable in the discovery, development, manufacture,
or approval for sale of a Product within the Field.
4. LICENSE FEE AND RESEARCH AND DEVELOPMENT FUNDING
A. Eurobiotech shall pay the costs of any further pre-cliical development work
deemed necessary prior to commencing clinical trials, and this shall
include the development of the Product for other therapeutic applications,
the use of different formulations and preparations of the Product and oral
and parenteral preclinical toxicology. The costs of pre-clinical
development is anticipated not to exceed $1 million (one million U.S.
dollars). Subject to funding by Eurobiotech, SRI shall perform the
necessary pre-clinical studies whenever appropriate, unless agreed by both
parties that the work would be more advantageously performed by a third
party. Eurobiotech's retention of rights to therapeutic areas outside of
cancer is contingent upon Eurobiotech providing funding support for
development of such areas in accordance with the commitments of the
business development plan, as indicated in Article 10, and as periodically
reviewed and updated as agreed to by the parties.
B. Eurobiotech shall pay the costs of a Phase I clinical trial of the Product
for hematologic malignancies, to be performed at the Leukemia Unit at the ▇
▇ ▇▇▇▇▇▇▇▇ Cancer Center in Houston, Texas. The costs of such development
will not exceed $1.25 million (one million, two hundred and fifty thousand
U.S. dollars). Both parenteral and oral modes of administration will be
studied if warranted by commercial considerations and the preclinical
toxicology work.
C. Upon successful completion of Phase I clinical trials Eurobiotech shall pay
the costs of a multi-center Phase II clinical trial of the Product in
hematologic malignancies.
D. Upon successful completion of Phase II clinical trials SRI and Eurobiotech
may jointly pay the costs of Phase III clinical trials and further Product
development. If SRI shall not jointly fund the cost of such trials
Eurobiotech may pay the costs in full after paying a non-refundable option
fee of $750,000 within 60 days of completion and evaluation of Phase II
trials or 60 days from the commencement of Phase III trials, whichever is
the earlier. If the parties jointly develop the Product in Phase III trials
no option fee shall be payable by Eurobiotech.
E. Eurobiotech shall issue to SRI 100,000 shares of common stock of
Eurobiotech Group, Inc. within 30 days of the Effective Date of this
Agreement.
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F. Eurobiotech shall pay to SRI the sum of $750,000 upon the earlier of the
completion of Phase III trials in Europe or the initiation of sales of the
Product in the USA.
G. Eurobiotech shall pay the cost of prosecuting, filing and maintaining
patents and defending revocation proceedings on patents and patent
applications, on the Product within the Territory.
H. Eurobiotech shall also pay the costs as in 4G, if any, for those
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Research ("SKI") patents which the
Product might infringe but for the separate Agreement between SKI and SRI
(Appendix V) which provides SRI and Eurobiotech the rights to such
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Research patents in the Field for the
Territory for the Product.
5. ACQUISITION
Acquisition of the Licensed Technology is meant in its broadest sense
including assignment, transfer, sublicense, merger, joint venture and so on
and so forth.
A. Prior to Phase III Clinical Trials
If all or part of the rights granted to Eurobiotech are acquired by a third
party at, or before completion of Phase II clinical trials or prior to
Phase III clinical trials, all current or future payments derived by
Eurobiotech from the transfer, whether in cash, shares, property or any
other form of payment, including but not limited to up-front payments,
milestone payments and royalties will be divided equally between SRI and
Eurobiotech.
B. During or After Phase III Clinical Trials
If Eurobiotech alone funds Phase III clinical trials, then if all or part
of the rights are acquired by a third party during or after completion of
Phase III trials, all current or future payments derived by Eurobiotech
from the transfer, whether in cash, shares, property or any other form of
payment, including but not limited to up-front payments and milestone
payments but excluding royalties will be shared on the basis of 65% to
Eurobiotech and 35% to SRI until 50% of the monies expended by Eurobiotech
in conducting the Phase III trials are reimbursed. Thereafter, both parties
shall receive 50% each of all payments derived form the acquisition,
exclusive of royalty payments. Royalty payments related to the acquisition
of rights by a third party in order to market or further sublicense
Product(s) shall be divided in the ratio Eurobiotech 65; SRI 35.
If a third party funds the Phase III trials either in whole or in part in
return for rights, the parties to this Agreement shall divide all payments
including up-front payments, milestone payments and royalties from that
third party in equal amounts.
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If the parties to this Agreement share Phase III trial costs equally, then
if all or part of the rights are acquired by a third party during or after
completion of Phase III trials, all current or future payments derived from
the acquisition will be divided equally between SRI and Eurobiotech.
C. Manufacturing
Should Eurobiotech manufacture or have Product(s) manufactured for sale to
any unaffiliated third party acquirer such as a sublicensee or joint
venture prior to, during or after Phase III clinical trials, SRI shall
receive 35% of Net Income from such sale(s).
D. Approval
The foregoing scenarios (articles 5A and 5B) are subject to the approval of
SRI which shall not be unreasonably withheld.
6. COMMERCIALIZATION STAGE
A. Eurobiotech shall have exclusive rights to market the Product in the
Territory under the following terms: For the Patent and Technical
Information licenses granted herein, Eurobiotech shall pay to SRI a royalty
of 7% of the Gross Sales Revenue of all Product(s) sold to an unaffiliated
third party, likely to be a distributor or wholesaler, but not limited to
such, where Eurobiotech is responsible for the marketing of the Product. In
addition to the seven percent of Gross Sales Revenue, if the Gross Profit
Margin from operations in any geographical area equals or exceeds 31% a
further profit-sharing agreement will apply, according to the following
formula and further exemplified in Appendix IV:
Gross Profit Margin Payment as % of Net Income
------------------- --------------------------
>70% 20%
50-70% 10%
31-49% 5%
B. If the Product incorporates inventions, patents, or technical information
that is necessary for the successful commercialization of the Product and
that is obtained from sources other than SRI, the Parties agree to
negotiate in good faith a new royalty rate to reflect the contribution of
such third party inventions, patents, or technical information, but in no
event shall the royalty rate be reduced by more than 50%.
C. If this Agreement is for any reason terminated before all the earned
royalties herein provided for have been paid, Eurobiotech shall immediately
pay to SRI any remaining unpaid balance of earned royalties even though the
due date provided in Article 8 has not been reached.
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D. If Eurobiotech shall sell the rights to the Technology during the
Commercialization Stage, in combination with the sale, acquisition, merger
or disposition of Eurobiotech Group, Inc., Eurobiotech, SRI and the third
party(ies) shall negotiate in good faith the specific details for such sale
of rights, subject to the approval of SRI which shall not be unreasonably
withheld.
7. SUBLICENSING
A. Eurobiotech shall have the right to sublicense in the Field for the
Territory.
B. Eurobiotech will keep SRI routinely updated on progress of discussions and
negotiations with potential sublicensees. SRI shall have the right to
review the form of sublicenses to be granted hereunder prior to the
execution of the same by Eurobiotech. Eurobiotech agrees that sublicense
agreements shall conform in all material respects to the terms and
conditions of this Agreement. If SRI has not objected within thirty (30)
days of receiving the form of such agreement describing the material terms,
Eurobiotech may proceed to negotiate and grant sublicenses without further
review by SRI if the form of the sublicense has not materially changed.
Eurobiotech shall provide SRI with a copy of each sublicense within thirty
(30) days of execution, and shall not grant to its sublicensees any SRI
rights not conveyed by this Agreement.
C. If this Agreement is terminated for any reason, except breach of contract
by SRI, any sublicense shall automatically transfer to SRI, unless
sublicensee is in breach or default of sublicense, and remain in full force
and effect so long as the sublicensees performs the obligations of the
sublicense, and Eurobiotech will execute such documents as may be requested
by SRI to attest to the transfer to SRI of all sublicense rights, including
the right to receive future payments.
8. PAYMENTS AND REPORTS
A. Payments owed to SRI shall be payable within ten (10) days of receipt by
Eurobiotech except as stated otherwise elsewhere in this Agreement and
except for royalties and profit-sharing compensation as a result of direct
marketing of Product by Eurobiotech.
B. Royalties and profit-sharing compensation owed to SRI as a consequence of
direct marketing of Product by Eurobiotech shall be due for each calendar
quarter beginning with the first calendar quarter in which sales occur and
shall be payable to SRI within forty-five (45) days following the last day
of the applicable calendar quarter.
C. All payments from Eurobiotech to SRI shall be made in U.S. dollars by
corporate check SRI at the address specified in Article 34 or an address
designated in writing by SRI from time-to-time.
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D. With respect to non-dollar denominated payments owed by Eurobiotech to SRI,
such payments shall be converted into U.S. Dollars at the conversion
rate(s) published in The Wall Street Journal (Eastern Edition) as of the
last business day of the calendar quarter included in the report.
E. In the event that Eurobiotech is prevented from making any payment to SRI
under this Agreement by virtue of restrictions on currency conversion or
repatriation under the statutes, laws, codes or governmental regulations of
the country from which the payment is to be made, then such payments may be
paid by depositing them in the currency in which accrued to SRI's account
in a bank acceptable to SRI in the country whose currency is involved. If
the local currency cannot be converted or remitted to SRI within twelve
(12) months from the initial deposit, Eurobiotech shall pay SRI the
equivalent of such amount at the initially computed conversion rate
(including any interest earnings) in United States dollars, and the local
currency shall be transferred to an account in a bank acceptable to
Eurobiotech in that country.
F. Payments to SRI hereunder shall be deemed paid as of the day on which they
are received at the address designated pursuant to Article 34. Any part of
a payment which is not paid on or before the date when due shall accrue
interest thereon from such date until the date of its payment in full at
two (2) percentage points over the per annum interest rate published as the
"Prime Rate" in The Wall Street Journal (Eastern Edition), but in no event
shall such rate exceed the maximum rate permitted by applicable law.
G. All foreign taxes, assessments and fees of any nature levied or incurred on
account of any payments accruing under this Agreement will be assumed and
paid by Eurobiotech and not deducted from payments owed to SRI.
H. Eurobiotech shall deliver to SRI within forty-five (45) days after the end
of each calendar quarter a report, certified by the chief financial officer
(or equivalent) of Eurobiotech, setting forth in reasonable detail the
calculation of SRI payments made during the quarter and for each calendar
quarter, including gross sales, value added taxes, number of units sold,
unit price and the like on a country-by-country basis by Eurobiotech,
sublicensees, joint ventures and their affiliates.
I. The Eurobiotech report to SRI shall be supported by and based upon a
similar financial report or, if permitted, a copy from each sublicensee and
other commercialization entity(ies).
J. The parties will promptly share all information generated under the
Co-Development Program pursuant to the confidentiality provisions of
Article 21 and with particular respect to the preclinical studies and
clinical trials. Upon commercialization of the Product(s), Eurobiotech
shall provide SRI with quarterly updates (which may be oral unless other
requested by SRI) in reasonable detail, describing Eurobiotech's plans,
activities and accomplishments.
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9. RECORDS
Eurobiotech shall keep accurate records of all operations affecting payments
hereunder, and shall permit SRI or its duly authorized agent to inspect all such
records and to make copies of or extracts from such records during regular
business hours throughout the term of this Agreement and for a reasonable period
of not less than three (3) years thereafter. The fees charged for an SRI
authorized audit shall be paid by SRI; provided, however, that if an audit
discloses an underpayment by Eurobiotech of more than five percent (5%) for such
audited period, Eurobiotech shall pay the reasonable fees and expenses charged
by the firm conducting the audit.
10. DILIGENCE
A. In conjunction with the developmental actions and commercialization
activities of Eurobiotech referred to throughout this Agreement, the
parties shall prepare, within 90 days of the date of signing of this
Agreement, a business development plan outlining the strategy, timing and
implementation of steps to commercialize the technology.
B. Retention of rights by Eurobiotech is contingent upon submission of a NDA
to the FDA within four years of the effective date of this Agreement.
11. OWNERSHIP OF THE TECHNOLOGY, TECHNICAL
INFORMATION AND IMPROVEMENTS
A. SRI and Eurobiotech shall each retain full ownership of their existing
intellectual property rights including rights in the process of being
protected and rights conceived but not yet reduced to practice as of the
effective date of this Agreement.
B. All Improvements by SRI developed under projects funded, in whole or in
part, by Eurobiotech shall be owned by SRI and shall be included in the
licenses granted in this Agreement. In the event that a conflicting
obligation prevents SRI from including such an Improvement, SRI shall use
reasonable efforts to assist Eurobiotech to obtain rights from the
appropriate third party or parties.
C. All Improvements by SRI made during the first three (3) years from the
effective date of the Agreement and not developed under projects funded, in
whole or in part, by Eurobiotech, shall be owned by SRI and if deemed
reasonably necessary for Eurobiotech practice of the Technology, without
which such practice would constitute an infringement of SRI's rights, shall
be included to the extent necessary, as decided solely by SRI, in the
licenses granted in this Agreement, unless inclusion is not possible due to
SRI's obligations to a third party. In the event that a conflicting
obligation prevents SRI from including such an Improvement, SRI shall use
reasonable efforts to assist Eurobiotech to obtain rights from the
appropriate third party or parties.
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D. Eurobiotech shall have the first right of negotiation to a license or other
commercial arrangement to any SRI intellectual property developed under
projects funded, in whole or in part, by Eurobiotech, which does not
constitute an Improvement.
12. PATENT PROSECUTION
A. SRI shall file, prosecute and maintain all of the Patent that are the
property of SRI.
B. Eurobiotech shall bear all patenting expenses related to the filing,
prosecution or maintenance of all Patent and Improvement licensed hereunder
in whole or in part.
C. SRI shall furnish Eurobiotech with copies of all allowed claims when such
claims are allowed in the Field and in the Territory for all Patent and
Improvement licensed hereunder.
D. SRI shall provide Eurobiotech with draft copies of all correspondence and
filings and related prosecution documents on the Patent and Improvement
licensed hereunder and Eurobiotech shall promptly provide comments, if any,
to SRI. SRI shall confer with Eurobiotech, and make reasonable efforts to
adopt Eurobiotech's suggestions regarding prosecution tactics and strategy.
Notwithstanding the foregoing, SRI shall have the right to take such
actions as are reasonably necessary, in its good faith judgement, to
preserve all rights under the Patent and Improvement throughout the
Territory. As soon as practical, subsequent to the filing of any
prosecution document, SRI shall provide Eurobiotech with a copy of such
document. In addition, SRI shall copy Eurobiotech with any official office
action and SRI responses and submissions. Eurobiotech shall bear the
expenses of the activities noted in this Article 14.E.
E. SRI will inform Eurobiotech at least sixty (60) days prior to any decision
having as a result the failure to file, or the abandonment of Patent
applications or failure to maintain a Patent, Patents and Improvements
licensed hereunder so that Eurobiotech may take over and maintain such
Patent and Improvements in force.
F. Provided that SRI has been informed by Eurobiotech at least sixty (60) days
in advance, in the event that Eurobiotech decides not to pay patenting
expenses in any jurisdiction, SRI may elect to maintain such Patent and
Improvements in force and terminate Eurobiotech's licenses granted as for
the jurisdiction in which Eurobiotech abandoned or failed to file or
maintain such Patent rights. Notwithstanding the foregoing, Eurobiotech
shall be obligated to pay patenting expenses within the European Community.
13. INFRINGEMENT BY THIRD PARTY
A. Either party shall notify the other party of any suspected infringement by
a third party of the Patent in the Field and the Territory, and each party
shall inform the other of any evidence of such infringement(s).
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B. Eurobiotech shall have the first right to institute suit for
infringement(s) in the Field and Territory so long as this Agreement
remains exclusive. At Eurobiotech's expense, SRI will reasonably assist
Eurobiotech in such prosecutions if so requested by Eurobiotech, and will
lend its name to such actions if requested by Eurobiotech or required by
law. Notwithstanding the foregoing SRI shall have the right to participate
and be represented in any such prosecutions by its own counsel at its own
expense.
C. If SRI notifies Eurobiotech of its desire to institute suit for
infringement(s) and Eurobiotech fails to exercise its first right to do so
within ninety (90) days of such notice, then SRI may, at its own expense,
bring suit or take any other appropriate action. At SRI's expense,
Eurobiotech will reasonably assist SRI in such prosecutions if so requested
by SRI, and will lend its name to such actions if requested by SRI or
required by law. Notwithstanding the foregoing Eurobiotech shall have the
right to participate and be represented in any such prosecutions by its own
counsel at its own expense.
D. No settlement of any suspected infringement(s), whether or not a suit has
been instituted, may be entered into without the express written consent of
Eurobiotech and SRI.
E. Any amounts recovered pursuant to an infringement suit, settlement or
otherwise shall be retained by and be the property of the party bringing
the action. In the event Eurobiotech receives any monies or other
consideration from a third party as a result of Eurobiotech's exercise of
its rights under Article 13 of this Agreement, Eurobiotech shall first be
reimbursed for expenses incurred and paid for, SRI shall then receive a
portion of the remainder in accordance with the applicable provision(s) of
Article 6 as applied to all such monies or other considerations whether
such monies or other considerations are denoted as "royalties," "damages,"
"releases" from prior acts, or any other designation.
F. If Eurobiotech fails to exercise its first right to institute suit for
infringement(s) and SRI elects not to institute suit, then SRI shall
provide Eurobiotech with at least sixty (60) days notice of its intention
to terminate Eurobiotech's licenses granted in those jurisdictions affected
by the infringement or to take any other action it sees fit in its best
judgement.
14. REVOCATION PROCEEDINGS
A. In the event either party becomes aware of the institution by a third party
of any proceedings for the revocation of any Patent, patents or
Improvements in any country in the Territory licensed hereunder to
Eurobiotech, such party shall notify the other party promptly. Eurobiotech
shall defend any such proceedings at its own expense, in its own name.
B. SRI shall have the right to participate in such revocation proceedings at
Eurobiotech's expense, and will lend its name to such proceedings if
requested by Eurobiotech or required by law. Sublicensees of Eurobiotech
shall also have the right to participate in such revocation proceedings.
12
C. Settlement of any revocation proceedings shall be subject to the approval
of SRI; such approval shall not be unreasonably withheld.
15. INFRINGEMENT OF THIRD PARTY RIGHTS
A. SRI "does not warrant" as stated in Article 17. Disclaimer, "that the
patents will be free from claims of infringement by third parties or any
other rights of third parties."
B. Eurobiotech as stipulated in Article 18. Indemnification, "agrees to
indemnify, hold harmless and defend SRI.... from and against any and all
demands, claims, suits, and actions ..." which includes infringement of
third party rights.
C. SRI will reasonably assist Eurobiotech to defend or settle such third party
claim if so requested and at the expense of Eurobiotech.
D. SRI shall have the right to participate and be represented in any such
claim by a third party by its own counsel.
E. No settlement of any third party claim may be entered into without the
express written consent of SRI.
F. In the event, by way of counterclaim or otherwise, either party or both
parties recover any damages or other sums in any action, suit, or
proceeding involving a claim by a third party, or in settlement thereof,
such recovery shall be applied and shared as mutually agreed.
16. REPRESENTATIONS
A. This Agreement is entered into by SRI in its corporate capacity. It is
understood and agreed that the U.S. Government is not a party to this
Agreement and in no manner whatsoever shall be liable for or assume any
responsibility or obligation for any claim, cost, or damages arising out of
or resulting from this Agreement or the subject matter licensed.
B. Nothing in this Agreement shall be deemed to be a representation or
warranty by SRI, or the U.S. Government, of the safety, merchantability or
usefulness for any purpose, of any technical information, techniques or
practices at any time made available by SRI to Eurobiotech hereunder.
C. SRI represents that it has the right to grant all of the rights herein,
except for a non-exclusive, non-royalty bearing, non-commercial license to
the Government of The United States of America.
13
D. SRI is unaware of any claims asserted against SRI by any third parties with
respect to Patent infringement or any other type of liability relevant to
licensing of the Inventions, which have not been disclosed to Eurobiotech
as of the Effective Date of this Agreement.
E. SRI represents that it has full power, authority and legal right to enter
into this contemplated Agreement and to consummate the transactions
contemplated therein.
F. Eurobiotech represents that it has full power, authority and legal right to
enter into this contemplated Agreement and to consummate the transactions
contemplated therein.
G. Eurobiotech shall accept liability for or on account of any injury, loss or
damage, of any kind or nature sustained by, or any damage assessed or
asserted against, or any other liability incurred by or imposed upon either
party arising out of or in connection with or resulting from (i) the
production, use or sale of any Product or (ii) the use of any technical
information, techniques, or practices disclosed by either party, or (iii)
any advertising or other promotional activities with respect to any of the
foregoing. If a sublicense is granted by Eurobiotech to a third party that
third party shall accept all liability for any injury, loss or damage as
defined above.
17. DISCLAIMER
EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 16, SRI DOES NOT MAKE ANY EXPRESS OR
IMPLIED WARRANTIES, STATUTORY OR OTHERWISE, CONCERNING THE TECHNOLOGY OR ANY
TECHNICAL INFORMATION COMMUNICATED TO EUROBIOTECH BY SRI. SPECIFICALLY, BUT
WITHOUT LIMITING THE FOREGOING, SRI MAKES NO EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS (FOR A PARTICULAR PURPOSE OR OTHERWISE), QUALITY OR
USEFULNESS OF THE TECHNOLOGY. ALL PHYSICAL EMBODIMENTS OF THE TECHNOLOGY
PROVIDED BY SRI HEREUNDER ARE PROVIDED ON AN "AS IS" BASIS. SRI DOES NOT WARRANT
THE ACCURACY OF ANY INFORMATION INCLUDED WITHIN THE TECHNICAL INFORMATION NOR
DOES SRI WARRANT THAT ANY SUCH INFORMATION CONSTITUTES TRADE SECRETS OR
CONFIDENTIAL INFORMATION OR THAT THE PATENTS WILL BE FREE FROM CLAIMS OF
INFRINGEMENT BY THIRD PARTIES OR ANY OTHER RIGHTS OF THIRD PARTIES.
UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY
THIRD PARTY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES IN TORT, CONTRACT,
STRICT LIABILITY OR OTHERWISE INCURRED BY OTHER PARTY OR ANY THIRD PARTY.
18. INDEMNIFICATION
Eurobiotech hereby agrees to indemnify, hold harmless and defend SRI and
SKI and its officers, directors, representatives, agents and employees from and
against any and all demands,
14
claims, suits or actions of any character presented or brought on account of any
injuries, losses or damages sustained by any person or property in consequence
of (i) any act or omission of Eurobiotech or its agents, employees or
subcontractors, or (ii) any liability under Article 160, except for any
injuries, losses or damages that specifically result from the negligence or
willful misconduct of SRI or SKI. The foregoing indemnity shall include but not
be limited to court costs, attorneys' fees, costs of investigation and costs of
defense associated with such demands, claims, suits or actions.
19. INSURANCE
Eurobiotech shall maintain, during the term of this Agreement, reasonable
amounts of comprehensive general liability insurance, including products
liability insurance, with reputable and financially secure insurance carriers to
cover the activities of Eurobiotech, its affiliates and sublicensees hereunder.
Such insurance shall be written to cover claims incurred, discovered,
manifested, or made during or beyond the expiration or termination of this
Agreement during the period that any product, process, or service, relating to,
or developed pursuant to, this Agreement is being commercially distributed or
sold by Eurobiotech or by a sublicensee, affiliate or agent of Eurobiotech. Such
insurance shall include SRI as an additional insured. Eurobiotech shall furnish
to SRI a certificate of insurance evidencing such coverage and periodically,
upon request, provide evidence that the coverage is still in effect.
20. TERM AND TERMINATION
A. This Agreement shall commence on the Effective Date and, unless sooner
terminated under this Article 20, shall expire upon the later of: (i)
expiration of the last to expire of all Patent(s), Improvement(s), and
Patent(s) licensed under this Agreement [hereafter "Licensed Patents" only
for Article 20], including any extensions thereof and any periods of
exclusivity granted by regulatory agencies or other governmental bodies;
(ii) Eurobiotech is no longer due any payments from Sublicensee(s); or
(iii) Eurobiotech is no longer directly marketing a Product.
B. The payment obligations under the licenses granted to Eurobiotech for
Licensed Patents and Technical Information shall continue throughout the
term as defined in Article 20.A but would be subject to good faith
renegotiations upon the expiration of the last to expire of the Licensed
Patents, or upon the abandonment of the last to be abandoned of any patent
applications if no patents have been issued, whichever is the later, unless
this Agreement is sooner terminated. Such good faith renegotiations shall
take into account on a country-by-country or regional basis but not be
limited to: (i) Product competition; (ii) utilization, incorporation and
value of Technical Information; (iii) value of Technical Information if no
longer confidential or proprietary through no fault of Eurobiotech, its
Sublicensee(s), contractors, financiers or any other Eurobiotech agent(s)
or purchasers of Product or services having access to Technical
Information; (iv) the applicable contract or patent law or (v) prior
payment commitments such as in Article 3.C(2).
15
C. Eurobiotech may terminate this Agreement at any time upon ninety (90) days
written notice to SRI and upon payment of all amounts due SRI through the
effective date of the termination.
D. Upon termination of this Agreement, neither party shall be released from
any obligation that matured prior to the effective date of such
termination. Eurobiotech and any sublicensee may, however, after the
effective date of such termination, sell all Products in inventory provided
that Eurobiotech shall pay to SRI the royalties and profit-sharing thereon
as required by Article 6 hereof and submit the reports required by Article
8 hereof.
E. Except as provided in Article 13F above, if either party shall be in
default of any obligation hereunder, the other party may terminate this
Agreement by giving Notice of Termination by Certified or Registered Mail
to the party at fault, specifying the basis for termination. If within
sixty (60) days after the receipt of such Notice of Termination, the party
in default shall remedy the condition forming the basis for termination
such Notice of Termination shall cease to be operative, and this Agreement
shall continue in full force.
F. SRI shall have the right to terminate this Agreement if Eurobiotech shall
cease to carry out its business, become bankrupt or insolvent, apply for or
consent to the appointment of a trustee, receiver or liquidator of its
assets or seek relief under any law for the aid of debtors, or if
Eurobiotech fails to submit an NDA as provided in Article 10B.
G. Eurobiotech shall inform SRI of its intention to file a voluntary petition
in bankruptcy or of another's intention to file an involuntary petition in
bankruptcy to be received at least thirty (30) days prior to filing such a
petition. Eurobiotech's filing without conforming to this requirement shall
be deemed a material, pro-petition incurable breach not subject to the
Notice requirement of Paragraph 20.
H. Notwithstanding anything else in this Agreement to the contrary, the
parties agree that Eurobiotech's obligation to pay SRI any payments or
other consideration accrued but unpaid prior to termination shall survive
the termination of this Agreement. In addition, Articles 5, 6, 8, 9, 17,
18, 19, 21, 22, 28 and 34 as well as any other provisions to the extent
required for the full observation and performance of the foregoing Articles
or which by their nature are intended to survive such termination, shall
survive the termination of this Agreement and continue to be enforceable.
21. CONFIDENTIALITY; PUBLICATION; PUBLICITY
A. In fulfilling their obligations under this Agreement, it may be desirable
or necessary for the parties to disclose to one another certain of their
Confidential Information. In the event of receipt of such Confidential
Information, the receiving party agrees to preserve such information as
confidential and not to disclose it to third parties or to use it except in
connection with this
16
Agreement during the term of this Agreement and for a period of five (5)
years following its termination. The foregoing obligations shall not apply
to any information that:
1. is now in the public domain or becomes generally available to the
public through no fault of the receiving party;
2. is already known to, or in the possession of, the receiving party as
can be demonstrated by documentary evidence;
3. is disclosed to the receiving party on a nonconfidential basis by a
third party having the right to make such disclosure; or
4. is independently developed by the receiving party as can be
demonstrated by documentary evidence.
For the purposes of the preceding portion of this Section A, Article 21
only, "parties" or "party" but not "third parties" or "third party" may
also include SKI.
In addition, to the extent reasonably necessary to fulfill its obligations
or exercise its rights under this Agreement (i) a party may disclose
Confidential Information to its Affiliates, Sublicensees, consultants,
outside contractors and clinical investigators, on a need-to-know basis on
condition that such persons or entities agree to be bound by the provisions
of this Article 20, (ii) a party or its Affiliates or Sublicensees may
disclose Confidential Information to governmental or other regulatory
authorities to the extent that such disclosure is reasonably necessary to
obtain patents or regulatory authorizations, provided the disclosing party
shall request confidential treatment thereof, and (iii) a party may
disclose Confidential Information as required by applicable law, regulation
or judicial process, provided that such party shall give the other party
(x) prior written notice thereof, (y) adequate opportunity to object to any
such disclosure or to request confidential treatment thereof, and (z) shall
take all steps reasonably possible to minimize the disclosure to that level
mandated by law.
B. (i) If either party desires to publish or present the results of the
Co-Development Program, the publishing/presenting party shall provide
the non-publishing/non-presenting party a copy of the manuscript of
any proposed publication or presentation. The
non-publishing/non-presenting party shall then have thirty (30) days
to review and comment on the manuscript or presentation, and the
publishing/presenting party agrees to delete any information
identified by the non-publishing/non-presenting party as its Trade
Secrets or Confidential Information.
(ii) In the event the non-publishing/non-presenting party determines that a
Patent application covering information contained in the proposed
publication or presentation should be filed, the party proposing the
publication or presentation shall
17
delay such publication or presentation for up to sixty (60) days to
allow such filing to be made.
C. Each party shall provide the other party with the prior opportunity to
review and approve any press releases or similar public announcements
concerning this Agreement or clinical, regulatory and commercial
developments related to Products as soon as practicable, but in no event
later than 24 hours before an announcement is made. Eurobiotech shall not
use the name of SRI or otherwise refer to any organization related to SRI,
except with the written approval of SRI, such approval not to be
unreasonably withheld.
22. DISPUTE RESOLUTION
A. The parties shall attempt to resolve through good faith discussions any
dispute which arises under this Agreement. Any dispute may, at the election
of either party, be referred to the chief executive officers, or the
equivalent, of each party. If they are unable to resolve the dispute,
within thirty (30) days after delivery of written notice of the dispute
from one party to the other, either party may seek to resolve it by
initiating Alternative Dispute Resolution ("ADR") at the geographical
location of the noninitiating party in which the Judicial Arbitration and
Mediation Services ("JAMS") of such location, through a panel of three (3)
arbitrators (the "Arbitrators"), shall control the proceedings as provided
herein. If JAMS is not in existence at the time of such dispute, the
American Arbitration Association, of such location shall be substituted.
B. An ADR shall be initiated by a party by sending written notice thereof to
the other party and JAMS, which notice shall state the issues to be
resolved. Within ten (10) business days after receipt of such notice, the
other party may, by sending written notice to the initiating party and
JAMS, add issues to be resolved. Within twenty (20) business days after the
date of the original ADR notice, JAMS shall nominate to the parties at
least ten (10) qualified nominees from JAMS' panel. Each party shall have
five (5) business days after the receipt of such nominations to select one
Arbitrator. The two (2) Arbitrators so selected shall mutually agree on a
third arbitrator to complete the panel.
C. Each Arbitrator shall have experience in the Field relevant to the dispute
and in intellectual property law matters. In the event of a dispute between
the parties relating to the calculation of any royalties or the amount of
other consideration payable under this Agreement (including without
limitation, the results of any audit conducted on behalf of a party
pursuant to Article 9), then, in addition to the procedure set forth above
and in Article 22.B, the Arbitrators shall be partners or full members of
an internationally recognized certified public accounting firm which is not
an auditing firm for either party and has not provided material services to
either party during the last two (2) year period prior to the date of ADR
initiation.
D. Except as otherwise provided in this Article 22, such hearing shall be
conducted pursuant to the JAMS Rules or the Commercial Arbitration Rules of
the American Arbitration Association (AAA) as applicable.
18
E. The Arbitrators shall render a disposition on the proposed rulings as
expeditiously as possible after the hearing, but not later than fifteen
(15) business days after the conclusion of the hearing. In the
circumstances where the Arbitrators rule for a party on a claim in the form
of a claim for monetary damages, the parties will then submit a proposed
remedy within ten (10) days of notice of the ruling. The proposed remedy
may be accompanied by a brief in support of the remedy not to exceed five
(5) pages. The Arbitrators will rule on the proposed remedies within ten
(10) days of their submission. The Arbitrators' disposition shall be final
and not appealable, except that either party shall have the right to appeal
such disposition on the basis it was affected by fraud or bad faith in
connection with the ADR proceedings. A judgment on the Arbitrators'
disposition may be entered in any court having jurisdiction over the
parties. The reasonable fees and expenses of the Arbitrators, as well as
the standard charges of JAMS for its assistance, shall be borne equally by
the parties or as they may otherwise agree.
F. A party shall not be prohibited from bringing a claim for resolution under
this Article 22 on the ground that the claim could have been brought during
an earlier proceeding under this same Article.
G. The following disputes, causes of action or claims shall not be subject to
the dispute resolution process set forth in this Article 22:
(i) a claim arising from a suit, action, or proceeding brought by a third
party or Sublicensee not subject to ADR;
(ii) a claim relating to undisputed amounts owed by either party to the
other under this Agreement;
(iii) a suit, action, or proceeding to compel either party to comply with
the dispute resolution procedures set forth in this Article 22;
(iv) a dispute, controversy, or claim relating to the scope,
enforceability, infringement or validity of a patent or trademark of
either party; and
(v) a cause of action seeking temporary or preliminary injunction relief.
23. ASSIGNABILITY
A. Eurobiotech shall not assign any rights under this Agreement not
specifically transferable by its terms without prior written consent of
SRI. SRI may not assign its rights hereunder without the prior written
consent of Eurobiotech.
B In the event of a Change of Control (as defined below) of Eurobiotech, SRI
may elect, upon not less than sixty (60) days written notice following the
Change of Control or receipt of notice provided pursuant to Article 23.C,
to terminate this Agreement if such Change of Control is not,
19
in the good faith judgement of SRI, in the developmental and/or commercial
interest of the Licensed Technology or significantly limits its
applicability or scope.
C. For purposes of this Article 23C, "Change of Control" shall be deemed to
have taken place if (a) a third party, including a "group" as defined in
section 13(d)(3) of the Securities Exchange Act of 1934 but excluding the
current directors of Eurobiotech, becomes the beneficial owner of shares
having fifty percent (50%) or more of the total number of votes that may be
cast for the election of directors of Eurobiotech; or (b) as the result of,
or in connection with, any cash tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any
combination of the foregoing transactions (a "Transaction"), (X) the
persons who were directors of Eurobiotech before the Transaction shall
cease to constitute a majority of the Board of Directors of Eurobiotech or
any successor to Eurobiotech, or (Y) there is the sale, exchange of other
disposition of all or substantially all of Eurobiotech's assets to a third
party. Within thirty (30) days following a Change of Control of
Eurobiotech, Eurobiotech shall provide notice thereof to SRI.
24. REFORM
A. The parties agree that if any part, form, or provision of this Agreement
shall be found illegal or in conflict with any valid controlling law, the
validity of the remaining provisions shall not be affected thereby.
B. In the event the legality of any provision of this Agreement is brought
into question because of a decision by a court of competent jurisdiction of
any country in which this Agreement applies, SRI, by written notice to
Eurobiotech, may revise the provision in question or may delete it entirely
so as to comply with the decision of the said court.
25. WAIVER AND ALTERATION
A. The failure of either party to insist, in any one or more instances, upon
the performance of any of the terms, covenants or conditions of this
Agreement and to exercise any right hereunder, shall not be construed as a
waiver or relinquishment of the future performance of any such term,
covenant or condition or the future exercise of such right, but the
obligations of the other party with respect to such future performance
shall continue in full force and effect.
B. A provision of this Agreement may be altered only by a writing signed by
both parties, except as provided by Article 24, above.
26. MARKING
A. Eurobiotech shall place in a conspicuous location on any product or its
packaging, which is made or sold under any Patent coming within this
Agreement, a patent notice in accordance with the laws concerning the
marking of patented articles.
20
B. Eurobiotech shall include a marking provision similar to Paragraph A above
in every sublicense granted pursuant to Article 7 above.
27. IMPLEMENTATION
Each party shall execute any instruments reasonably believed by the other party
to be necessary to implement the provisions of this Agreement.
28. GOVERNING LAW
This Agreement shall be deemed to have been entered into and shall be governed
by, construed and enforced in accordance with laws of the State of Alabama of
the United States of America and in the English language, and any action brought
to enforce any provision or obligation hereunder shall be brought in a court of
competent jurisdiction in the State of Alabama.
29. EXPORTATION OF TECHNICAL INFORMATION
Eurobiotech agrees not to export from The United States of America, directly or
indirectly, any Technical Information furnished to Eurobiotech either directly
or indirectly by SRI, except to the extent and to the countries permitted by the
laws of The United States of America. Eurobiotech agrees to indemnify, defend
and hold harmless SRI, its officers, agents and employees from all liability
involving the violation of such export regulations, either directly or
indirectly by Eurobiotech.
30. HEADINGS
The headings of the articles, sections and paragraphs used in this Agreement are
included for convenience only and are not to be used in construing or
interpreting this Agreement.
31. PARTIES INDEPENDENT
In making and performing this Agreement, the parties act and shall act at all
times as independent entities and nothing contained in this Agreement shall be
construed or implied to create an agency, partnership or employer and employee
relationship between Eurobiotech and SRI. Except as specifically provided
herein, at no time shall either party make commitments or incur any charges or
expenses for or in the name of the other party.
32. COUNTERPARTS
This Agreement shall become binding when any one or more counterparts hereof,
individually or taken together, shall bear the signatures of each of the parties
hereto. This Agreement may be executed in any number of counterparts, each of
which shall be an original as against either party whose signature appears
thereon, but all of which together shall constitute but one and the same
instrument.
21
33. FORCE MAJEURE
The parties shall not be responsible for failure to perform any of the
obligations imposed by this Agreement (except an obligation to pay money),
provided such failure is caused by fire, storms, floods, strikes, lockouts,
accidents, war, riots or civil commotions, inability to obtain railroad cars or
raw materials, embargoes, any State or Federal regulation, law, or restriction,
seizure or acquisition of the Technology or the Product(s) by the Government of
the United States or of any state, or of any agency thereof or by reason of any
compliance with a demand or request for such Product for any purpose for
national defense, or any other cause or contingency beyond the reasonable
control of said party (whether or not of the same kind or nature as the causes
or contingencies above enumerated) shall not subject the party so failing to any
liability to the other.
34. NOTICE
For the purpose of all written communications between the parties, their
addresses shall be:
If to EUROBIOTECH: If to SRI:
Address: ________________________ Address: ________________________
________________________ ________________________
________________________ ________________________
Attention: ________________________ Attention: ________________________
Telephone: ________________________ Telephone: ________________________
FAX: ________________________ FAX: ________________________
or any other addresses of which either party shall notify the other party in
writing.
22
35. EXECUTION
IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their duly authorized officers on the respective dates and at the respective
places hereinafter set forth.
EUROBIOTECH: SRI:
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
----------------------- -----------------------
Print Name: [ILLEGIBLE] Print Name: [ILLEGIBLE]
----------------------- -----------------------
Its: CEO Its: President and CEO
----------------------- -----------------------
Date: 19 Aug 98 Date: 9/1/98
----------------------- -----------------------
23
APPENDIX I
Filing Expiration
Country Serial No. Date Priority Patent No. Issued Date
United States 07/355,358 5/23/89 5/23/89 5,034,518 7/23/91 7/23/2008
United States 07/693,646 5/10/91 5/23/89 5,384,310 1/24/95 7/23/2008
& 5/10/91
United States 08/320,879 9/21/94 5/10/91 5,661,136 8/26/97 8/26/2014
European 90909080.5 5/23/90 5/23/89 U.S. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ 0473708 1/15/97 5/23/2010
Germany 0473708 1/25/97 5/23/2010
Great Britain 0473708 1/15/97 5/23/2010
Italy 0473708 1/25/97 5/23/2010
Netherlands 0473708 1/25/97 5/23/2010
Spain 0473708 1/25/97 5/23/2010
Sweden 90909080.5 1/15/97 5/23/2010
Switzerland 0473708 1/25/97 5/23/2010
European 92912163.0 5/7/92 5/23/89 U.S. (Substantive (first) examination
Austria & 5/10/91 U.S. report received; Claims equivalent
Belgium to U.S. 07/693,646
Germany
Greece
France
Italy
Luxembourg
Monaco
Netherlands
Spain
Sweden
Switzerland
United
Kingdom
Japan 2-508789 5/23/90 5/23/89 U.S. (Request for examination filed
5/23/97; case expected to be taken
up for examination about 5/99;
Claims equivalent to U.S.
07/355,358)
Japan 500121/1993 5/7/92 5/23/89 U.S. (Request for examination must be
& 5/10/91 U.S. filed prior to 5/7/99; Claims
equivalent to U.S. 07/693,646)
Canada 2,102,782 5/7/92 5/7/90 (Request for examination must be
filed prior to 5/7/99; Claims
equivalent to U.S. 07/693,646)
APPENDIX II
Terms for Eurobiotech Group. Inc. ("Eurobiotech")
and Southern Research Institute ("Southern").
Co-Development Agreement
Scope
Co-develop Product(s) based on Southern's patented and patent-pending
2`-fluoro-2-halo substituted purine nucleoside technology.
Product(s)
Drugs effective against hematologic malignancies and solid tumors as well
as other therapeutic indications, such as (but not exclusively) skin disorders
and transplantation immunity. All modes of administration, particularly oral and
iv., are included in these terms as are specialized formulations such as those
imparting controlled-release characteristics.
Agreement
The parties hereby agree to enter into good faith discussions, based on the
terms agreed to in this document, for the exclusive co-development, exclusive
world-wide commercial rights except for Japan and Southeast Asia, to the
Product(s) and all therapeutic indications and all modes of administration of
the 2'-fluoro-2-halo substituted purine nucleoside technology.
Preclinical Development
Funding provided by Eurobiotech not to exceed US$1 million for parenteral
and oral preclinical toxicology, oral formulation, and other preclinical work
needed prior to commencing clinical trials including development funds to
explore other therapeutic indications.
Drug Synthesis for Preclinical and Phase I
Discussions for the definitive Agreement will include the possible role of
Southern in the supply of material and production of GMP and non-GMP Product(s).
Preclinical Toxicology
To be performed by Southern whenever appropriate at a price to be
negotiated. This agreement takes full account of the initial preparations for
preclinical toxicology studies conducted and planned by the MD ▇▇▇▇▇▇▇▇ group.
1
Phase I
Funding provided by Eurobiotech not to exceed US$1.25 million for Phase I
clinical trials to be performed at the M. D. ▇▇▇▇▇▇▇▇ Cancer Center in Houston,
Texas, for hematologic malignancies. Eurobiotech to further fund the preclinical
and, if indicated, the clinical development for other therapeutic indications
including, but not limited to, solid tumors, skin disorders and transplantation
immunity.
Phase II
Eurobiotech to fund the multi-center Phase II clinical trials of the
2'-fluoro-2-halo substituted purine nucleoside in hematologic malignancies. A
decision to proceed or not will be made prior to or at the time when US$1.25
million has been expended. Eurobiotech's rights to hematologic malignancies will
revert to Southern if the decision is not to proceed. Retention of rights to
other therapeutic indications is contingent upon adequate levels of funding to
be provided by Eurobiotech for fast-track preclinical and clinical development.
NDA After Phase II
An NDA or equivalent document may be submitted to the FDA and/or foreign
regulatory agencies if the results after completion of Phase II trials are
encouraging and the agencies appear receptive.
Phase Ill
If Eurobiotech decides not to proceed after completion of Phase II trials,
the rights to the technology will revert to Southern. If Southern decides not to
proceed with the co-development program (i.e., equal sharing of phase III costs)
after completion of Phase II trials, Eurobiotech shall have the right to conduct
the Phase III trials after paying a non-refundable option fee of $750,000 within
60 days of completion and evaluation of Phase II trials or 60 days from the
commencement of Phase III trials, whichever is the earlier. If Southern decides
to proceed with the co-development program, if Phase III trials are successful,
and the parties decide to proceed with Phase III clinical trials, the costs
incurred will be shared equally between Southern and Eurobiotech. In that case,
there will be no option fee for commencing Phase III trials.
2
Intellectual Property Ownership
Southern and Eurobiotech shall each retain full ownership of their existing
intellectual property rights.
Additional Intellectual Property
Ownership shall be linked directly to inventorship. Eurobiotech shall have
the first right of negotiation to any additional intellectual property developed
as a result of this co-development program.
Additional Compensation to Southern
100,000 Shares of common stock of Eurobiotech; $750,000 milestone payment
on completion of Phase III trials in Europe or the first sales of Product(s) in
the USA, whichever is the earlier; payment of patent costs from the effective
date of the definitive co-development Agreement for Southern and Sloan Kettering
Institute.
Acquisition of Rights by Third Party (Non-Marketing by Eurobiotech)
If all or part of the rights granted to Eurobiotech are acquired by a third
party at, or before completion of Phase II clinical trials or prior to Phase III
clinical trials, all current or future payments derived by Eurobiotech from the
transfer, whether in cash, shares, property or the like, including but not
limited to up-front payments, milestone payments and royalties will be divided
equally between Southern and Eurobiotech.
If Eurobiotech alone funds Phase III clinical trials, then if all or part
of the rights are acquired by a third party during or after completion of Phase
III trials, all current or future payments derived by Eurobiotech from the
transfer, whether in cash, shares, property or the like, including but not
limited to up-front payments and milestone payments but excluding royalties will
be shared on the basis of 65% to Eurobiotech and 35% to Southern until 50% of
the monies expended by Eurobiotech in conducting the Phase III trials are
reimbursed. Thereafter, both parties shall receive 50% each of all payments
derived from the transfer, exclusive of royalty payments. Royalty payments
related to the transfer or sublicense of the rights to market or further
sublicense Product(s) shall be divided in the ratio Eurobiotech 65; Southern 35.
If a third party funds the Phase III trials either in whole or in part in
return for rights, the parties to this Agreement shall divide all payments
including up-front payments, milestone payments and royalties from that third
party in equal amounts.
If the parties to this Agreement share Phase III trial costs equally, then
if all or part of the rights are acquired by a third party at, or before, or
after completion of Phase 111 trials, all
3
payments derived from the acquisition will be divided equally between Southern
and Eurobiotech.
All of the foregoing scenarios are subject to the approval of Southern
which shall not be unreasonably withheld.
As part of the co-development program, should Eurobiotech directly
manufacture Product(s) for sale to a third party, Southern and Eurobiotech shall
agree that net income from such sales shall be divided in the ratio Eurobiotech
65: Southern 35.
Marketing by Eurobiotech
If products based on the 2'-fluoro-2-halo substituted purine nucleosides
are brought to market for the treatment of hematologic malignancies and/or other
therapeutic indications, Eurobiotech agrees to use all reasonable measures to
market the products and to provide a sales force sufficient to properly support
sales of the Product(s) in designated markets.
A. Phase III Funded by Eurobiotech
Eurobiotech will pay Southern a 7% royalty payment on gross sales revenue
on products related to the 2'-fluoro-2-halo substituted purine nucleoside
technology, applicable in all geographic areas where Eurobiotech is responsible
for the marketing of the Product(s).
If the gross profit margin from opertions in any geographical area exceeds
30% a further profit-sharing agreement will apply, in addition to the above
royalty payment, according to the following formula:
Gross Profit Margin Payment as % of net income*
------------------- ---------------------------
>70% 20%
50-70% 10%
31-49% 5%
*net income to include total revenues but not include local sales tax and
corporate income taxes.
If a sublicense is granted to third parties to sell Product(s) in specified
geographical regions, Southern shall receive 35% of all current and future
payments obtained by Eurobiotech from the third parties including 35 % of all
royalty payments made by the third parties.
4
B. Regulatory License Granted After Phase II Clinical Trials
If regulatory approval is obtained after completion of Phase II trials,
Eurobiotech shall pay Southern according to the terms of section A above.
C. Phase III Trial Cost Reimbursed
If a third party reimburses the costs of a Phase III clinical trial in
exchange for a transfer or sublicense of rights, Eurobiotech shall pay Southern
for its marketing of Product(s) based on the terms of section A above, but all
payments from such a sublicensee, including up-front, milestone and royalty
payments shall be divided equally between the parties to this Agreement.
Disposition of Eurobiotech Rights
Sale or acquisition of Eurobiotech's rights to this technology in whole or
in part and whether or not in combination with the sale, acquisition, merger or
disposition of Eurobiotech shall be on the general basis of Eurobiotech 65:
Southern 35 except as otherwise specified in the Agreement with the specific
details to be negotiated in good faith and subject to the approval of Southern
which shall not be unreasonably withheld.
Payment Duration
Southern payments continue as long as Eurobiotech's, subject to good faith
negotiations regarding the impact of patent expirations, non-patent countries,
competition, infringement, know-how and other issues.
Foreign Taxes
Payments to Southern shall be made through Eurobiotech U.S.A. and will not
include deductions for foreign taxes (which not-for-profit U.S. corporations
have no means of crediting or offsetting).
Due Diligence
Upon the definitive Agreement being signed the two parties shall prepare,
within 90 days of the date of signing, a business development plan outlining the
strategy, timing and implementation of steps to commercialize the technology.
Retention of rights by Eurobiotech is contingent upon submission of a NDA to the
FDA within four years of the effective date of the definitive Agreement.
5
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute
It is agreed that Southern shall be responsible for obtaining authorization
and agreement from Memorial Sloan Kettering Institute in order to fully carry
out its obligations under the terms of the definitive Agreement.
Authority
Southern has full power, authority and legal right to enter into this
contemplated Agreement and to consummate the transactions contemplated hereby.
Eurobiotech has full power, authority and legal right to enter into this
contemplated Agreement and to consummate the transactions contemplated hereby.
Signed on behalf of Southern Signed on behalf of Eurobiotech
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
----------------------------------- -----------------------------------
Chief Executive Officer Chairman
----------------------------------- -----------------------------------
Position Position
Sept. 22, 1997 29/9/97
----------------------------------- -----------------------------------
Date Date
6
Terms for Eurobiotech Group, Inc. ("Eurobiotech")
and Southern Research Institute ("Southern")
Co-Development Agreement
Scope
Co-develop Product(s) based on Southern's patented and patent-pending
2'-fluoro-2-halo substituted purine nucleoside technology.
Product(s)
Drugs effective against hematologic malignancies and solid tumors as well
as other therapeutic indications, such as (but not exclusively) skin disorders
and transplantation immunity. All modes of administration, particularly oral and
iv., are included in these terms as are specialized formulations such as those
imparting controlled-release characteristics.
Agreement
The parties hereby agree to enter into good faith discussions, based on the
terms agreed to in this document, for the exclusive co-development, exclusive
world-wide commercial rights except for Japan and Southeast Ash, to the
Product(s) and all therapeutic indications and all modes of administration of
the 2'-fluoro-2-halo substituted purine nucleoside technology.
Preclinical Development
Funding provided by Eurobiotech not to exceed US$1 million for parenteral
and oral preclinical toxicology, oral formulation, and other preclinical work
needed prior to commencing clinical trials including development funds to
explore other therapeutic indications.
Drug Synthesis for preclinical and Phase I
Discussions for the definitive Agreement will include the possible role of
Southern in the supply of material and production of GMP and non-GMP Product(s).
Preclinical Toxicology
To be performed by Southern whenever appropriate at a price to be
negotiated. This agreement takes full account of the initial preparations for
preclinical toxicology studies conducted and planned by the MD ▇▇▇▇▇▇▇▇ group.
1
Phase I
Funding provided by Eurobiotech not to exceed US$1.25 million for Phase I
clinical trials to be performed at the M. D. ▇▇▇▇▇▇▇▇ Cancer Center in Houston,
Texas, for hematologic malignancies. Eurobiotech to further fund the preclinical
and, if indicated, the clinical development for other therapeutic indications
including, but not limited to, solid tumors, skin disorders and transplantation
immunity.
Phase II
Eurobiotech to fund the multi-center Phase II clinical trials of the
2'-fluoro-2-halo substituted purine nucleoside in hematologic malignancies. A
decision to proceed or not will be made prior to or at the time when US$1.25
million has been expended. Eurobiotech`s rights to hematologic malignancies will
revert to Southern if the decision is not to proceed. Retention of rights to
other therapeutic indications is contingent upon adequate levels of funding to
be provided by Eurobiotech for fast-track preclinical and clinical development.
NDA After Phase II
An NDA or equivalent document may be submitted to the FDA and/or foreign
regulatory agencies if the results alter completion of Phase II trials are
encouraging and the agencies appear receptive.
Phase III
If Eurobiotech decides not to proceed after completion of Phase II trials,
the rights to the technology will revert to Southern. If Southern decides not to
proceed with the co-development program (i.e., equal sharing of phase III costs)
after completion of Phase II trials, Eurobiotech shall have the right to conduct
the Phase III trials after paying a non-refundable option fee of $750,000 within
60 days of completion and evaluation of Phase II trials or 60 days from the
commencement of Phase III trials, whichever is the earlier. If Southern decides
to proceed with the co-development program, if Phase II trials are successful,
and the parties decide to proceed with Phase III clinical trials, the costs
incurred will be shared equally between Southern and Eurobiotech. In that case,
there will be no option fee for commencing Phase III trials.
2
Intellectual Property Ownership
Southern and Eurobiotech shall each retain full ownership of their existing
intellectual property rights.
Additional Intellectual Property
Ownership shall be linked directly to inventorship. Eurobiotech shall have
the first right of negotiation to any additional intellectual property developed
as a result of this co-development program.
Additional Compensation to Southern
100,000 Shares of common stock of Eurobiotech; $750,000 milestone payment
on completion of Phase III trials in Europe or the first sales of Product(s) in
the USA, whichever is the earlier; payment of patent costs from the effective
date of the definitive co-development Agreement for Southern and Sloan Kettering
Institute.
Acquisition of Rights by Third Party (Non-Marketing by Eurobiotech)
If all or part of the rights granted to Eurobiotech are acquired by a third
party at, or before completion of Phase II clinical trials or prior to Phase HI
clinical trials, all current or future payments derived by Eurobiotech from the
transfer, whether in cash, shares, property or the like, including but not
limited to up-front payments, milestone payments and royalties will be divided
equally between Southern and Eurobiotech.
If Eurobiotech alone funds Phase III clinical trials, then if all or part
of the rights are acquired by a third party during or after completion of Phase
III trials, all current or future payments derived by Eurobiotech from the
transfer, whether in cash, shares, property or the like, including but not
limited to up-front payments and milestone payments but excluding royalties will
be shared on the basis of 65% to Eurobiotech and 35% to Southern until 50% of
the monies expended by Eurobiotech in conducting the Phase III trials are
reimbursed. Thereafter, both parties shall receive 50% each of all payments
derived from the transfer, exclusive of royalty payments. Royalty payments
related to the transfer or sublicense of the rights to market or further
sublicense Product(s) shall be divided in the ratio Eurobiotech 65; Southern 35.
If a third party funds the Phase III trials either in whole or in part in
return for rights, the parties to this Agreement shall divide all payments
including up-front payments, milestone payments and royalties from that third
party in equal amounts.
If the parties to this Agreement share Phase III trial costs equally, then
if all or part of the rights are acquired by a third party at, or before, or
after completion of Phase III trials, all
3
payments derived from the acquisition will be divided equally between Southern
and Eurobiotech.
All of the foregoing scenarios are subject to the approval of Southern
which shall not be unreasonably withheld.
As part of the co-development program, should Eurobiotech directly
manufacture Product(s) for sale to a third party, Southern and Eurobiotech shall
agree that net income from such sales shall be divided in the ratio Eurobiotech
65:Southern 35.
Marketing by Eurobiotech
If products based on the 2'-fluoro-2-halo substituted purine nucleosides
are brought to market for the treatment of hematologic malignancies and/or other
therapeutic indications, Eurobiotech agrees to use all reasonable measures to
market the products and to provide a sales force sufficient to properly support
sales of the Product(s) in designated markets.
A. Phase III Funded by Eurobiotech
Eurobiotech will pay Southern a 7% royalty payment on gross sales revenue
on products related to the 2'-fluoro-2-halo substituted purine nucleoside
technology, applicable in all geographic areas where Eurobiotech is responsible
for the marketing of the Product(s).
If the gross profit margin from opertions in any geographical area exceeds
30% a further profit-sharing agreement will apply, in addition to the above
royalty payment, according to the following formula:
Gross Profit Margin Payment as % of net income*
------------------- ---------------------------
>70% 20%
50-70% 10%
31-49% 5%
*net income to include total revenues but not include local sales tax and
corporate income taxes.
If a sublicense is granted to third parties to sell Product(s) in specified
geographical regions, Southern shall receive 35% of all current and future
payments obtained by Eurobiotech from the third parties including 35 % of all
royalty payments made by the third parties.
4
B. Regulatory License Granted After Phase II Clinical Trials
If regulatory approval is obtained after completion of Phase II trials,
Eurobiotech shall pay Southern according to the terms of section A above.
C. Phase III Trial Cost Reimbursed
If a third party reimburses the costs of a Phase III clinical trial in
exchange for a transfer or sublicense of rights, Eurobiotech shall pay Southern
for its marketing of Product(s) based on the terms of section A above, but all
payments from such a sublicensee, including up-front, milestone and royalty
payments shall be divided equally between the parties to this Agreement.
Disposition of Eurobiotech Rights
Sale or acquisition of Eurobiotech's rights to this technology in whole or
in part and whether or not in combination with the sale, acquisition, merger or
disposition of Eurobiotech shall be on the general basis of Eurobiotech 65:
Southern 35 except as otherwise specified in the Agreement with the specific
details to be negotiated in good faith and subject to the approval of Southern
which shall not be unreasonably withheld.
Payment Duration
Southern payments continue as long as Eurobiotech's, subject to good faith
negotiations regarding the impact of patent expirations, non-patent countries,
competition, infringement, know-how and other issues.
Foreign Taxes
Payments to Southern shall be made through Eurobiotech U.S.A. and will not
include deductions for foreign taxes (which not-for-profit U.S. corporations
have no means of crediting or offsetting).
Due Diligence
Upon the definitive Agreement being signed the two parties shall prepare,
within 90 days of the date of signing, a business development plan outlining the
strategy, timing and implementation of steps to commercialize the technology.
Retention of rights by Eurobiotech is contingent upon submission of a NDA to the
FDA within four years of the effective date of the definitive Agreement.
5
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute
It is agreed that Southern shall be responsible for obtaining authorization
and agreement from Memorial Sloan Kettering Institute in order to fully carry
out its obligations under the terms of the definitive Agreement.
Authority
Southern has full power, authority and legal right to enter into this
contemplated Agreement and to consummate the transactions contemplated hereby.
Eurobiotech has full power, authority and legal right to enter into this
contemplated Agreement and to consummate the transactions contemplated hereby.
Signed on behalf of Southern Signed on behalf of Eurobiotech
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
----------------------------------- -----------------------------------
Chief Executive Officer Chairman
----------------------------------- -----------------------------------
Position Position
Sept. 22, 1997 29/9/97
----------------------------------- -----------------------------------
Date Date
6
APPENDIX III
Extension of the Co-Development Program between Southern Research Institute
and Eurobiotech Group, Inc.
WHEREAS Southern Research Institute ("SRI") and Eurobiotech Group, Inc.
("Eurobiotech") have entered into an Agreement dated 8/31/98 to co-develop
2'-fluoro-2-halo substituted purine nucleoside(s) for the treatment of
hematological malignancies, other cancers and other therapeutic indications, and
WHEREAS both parties wish to further specify additional financial as well as
research and development obligations of Eurobiotech,
NOW, THEREFORE, to consummate such extensions to the Co-Development Program by
Eurobiotech, the parties agree as follows:
1. INITIAL PAYMENT
Eurobiotech agrees to pay SRI a total of $50,000 as an initial, once-only
payment within ten (10) days of the signing of the Co-Development Agreement
to co-develop 2'-fluoro-2-halo substituted purine nucleoside(s).
2. RESEARCH AND DEVELOPMENT PAYMENTS
Eurobiotech agrees to pay SRI a further $50,000 within 90 days of signing
the Co-Development Agreement to be used for research and development to be
conducted at SRI's laboratories with respect to the use of 2'-fluoro-2-halo
substituted purine nucleoside(s) for therapeutic indications other than
cancer. The research and development program will be mutually agreed upon
by the parties and funding will begin no later than thirty (30) days after
such agreement or within ninety (90) days of the effective date of the
Co-Development Agreement, whichever date is earlier. It is not intended
that the sum defined in this paragraph shall be the total cost of the
research and development program for therapeutic indications other than
cancer.
3. TERMINATION OF AGREEMENT
This extension of the Co-Development Agreement shall be governed by the
termination provisions of the Co-Development Agreement.
APPENDIX IV
Gross Profit Margin and Net Income Examples
Joint product costing shall be based on the relative-sales-value method of
joint cost assignment or other joint costing method according to generally
accepted accounting principles and agreed to by Eurobiotech and SRI.
Gross Margin+
Gross Sales Revenue ______________________
Cost of Goods Sold:
Joint costs (assigned) ______________________
Separable costs ______________________
Total Cost of Goods Sold ______________________
Gross Margin ______________________
Gross Profit Margin % ______________________
+Excludes SRI royalties
Net Income++
Gross Sales Revenue ______________________
Total Cost of Goods Sold ______________________
Gross Margin ______________________
*Operating Expenses:
Joint costs (assigned):
Selling, G&A ______________________
R&D, regulatory ______________________
Depreciation & amortization ______________________
Financing & interest ______________________
Total joint costs ______________________
Separable costs:
Selling, G & A ______________________
R&D, regulatory ______________________
Depreciation &amortization ______________________
Financing & interest ______________________
Total separable costs ______________________
Total Operating Expense ______________________
Net Income ______________________
++ Excludes SRI royalties, local taxes, corporate income taxes, foreign taxes.
* Assignment of such allowable operating expenses as selling, general and
administrative; research and development, regulatory; depreciation and
amortization; financing and interest shall be according to generally accepted
accounting principles.
Inter Institutional Agreement Page 1
SKI/ Southern
--------------------------------------------------------------------------------
INTER-INSTITUTIONAL AGREEMENT
(SK#3294)
Effective on the 31st day of August, 1998 (the "Effective Date"),
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ INSTITUTE FOR CANCER RESEARCH, a not-for-profit corporation
organized and existing under the laws of the State of New York, and having a
place of business located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter "SKI") and
SOUTHERN RESEARCH INSTITUTE, a not-for-profit corporation organized under
the laws of the State of Alabama and having a place of business located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
"Southern"),
hereinafter collectively referred to as the "Parties, or individually as a
"Party"
in consideration of the mutual covenants contained herein, AGREE AS
FOLLOWS:
ARTICLE 1
BACKGROUND & DEFINITIONS
ss.1.1 The Parties to this agreement each have patents and/or patent
applications relating to 2'-Fluoro-Arabinofuranosyl Purine Nucleoside
technology including specific compounds, the synthesis of such
compounds, and uses of such compounds as therapeutic treatments for
cancer and other disease conditions, including:
a. "SKI Patents" defined as compounds 3,4, 5 & 6 of claim 2 and
compound 2 of claim 3 of U.S. Patent No. 4,751,221, issued June
14, 1988 entitled, 2'-Fluoro-Arabinofuranosyl Purine Nucleosides,
and claim 1 of U.S. Patent No. 4,918,179 issued April 17, 1990
entitled 2'-Fluoro-Arabinofuranosyl Purine Nucleosides, and any
conversions, continuations, continuations-in-part, divisionals,
foreign equivalents, reissues, or other derivatives of these
patents and patent applications and matters that are the subject
of these patents and patent applications, (hereinafter referred
to as SKI Patents); and
b. "Southern Patents" defined as U.S. Patent 5,034,518 issued July
23, 1991 entitled, 2'-Fluoro-9-(2-Deoxy-2-Fluoro-B-D-
Arabinofuranosyl) Adenine Nucleosides, U.S. Patent 5,384,310
issued January 24, 1995 entitled 2'-Fluoro-2-
Haloarabinoadinosines and Their Pharmaceutical Compositions, and
U.S. Patent 5,661,136 issued August 26, 1997 entitled
2-halo-2'-fluoro ARA adenosines as antinoplastic agents, and any
conversions, continuations, continuations-in-part, divisionals,
foreign equivalents, reissues, or other derivatives of these
patents and patent applications and matters that are the subject
of these patents and patent
Inter Institutional Agreement Page 2
SKI/ Southern
--------------------------------------------------------------------------------
applications (hereinafter referred to as "Southern Patents").
ss.1.2 "Technology" shall include Southern Patents and those SKI Patents
(listed in Exhibit B of this Agreement) to the extent necessary to
enable the practice of Southern Patents and SKI Patents issued in
countries in which Southern Patents are not issued or pending.
ss.1.3 Inventions described in SKI Patents were developed at SKI by Drs.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇, and ▇▇▇▇ ▇. ▇▇▇, and inventions
described in Southern Patents were developed at Southern by Drs. ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III (hereinafter collectively
referred to as "Inventors").
ss.1.4 The Parties desire to provide for the development, utilization, and
commercialization of the Technology through licensing activities or
co-development activites.
ss.1.5 "Confidential Information" means (i) any know-how, information or
material in tangible form that is marked as confidential or
proprietary by the furnishing party at the time it is delivered to the
receiving party, and (ii) information that is disclosed orally,
provided that such information is specifically identified by the
disclosing party as Confidential Information; and provided further
that any information that is disclosed orally be confirmed in written
summary form by the disclosing party within thirty (30) days. The
party who receives Confidential Information from the other party is
referred to in this Agreement as the "Recipient", and the disclosing
Party is referred to as the "Discloser".
ARTICLE 2
OWNERSHIP
ss.2.1 The Parties have or shall have separate agreements with their
respective Inventors, whereby their respective Inventors agree to
assign all right, title and interest in Inventions to their
institutions, and whereby the respective Inventors agree to cooperate
with and assist their institutions in preparing, filing, prosecuting
and maintaining patent applications and patents relating to Inventions
throughout the world.
ss.2.2 Each Party shall explicitly retain their respective rights and
ownership it may have in Technology.
ARTICLE 3
COMMERCIALIZATION
ss.3.1 The Parties shall each cooperate to achieve the commercial utilization
and exploitation of Technology and shall keep each other informed of
all requests by third Parties concerning commercial utilization or
exploitation.
Inter Institutional Agreement Page 3
SKI/ Southern
--------------------------------------------------------------------------------
ss.3.2 The Parties warrant and represent that with respect to Technology they
are under no obligation to anyone other than the inventors,
contributors, and funding agencies.
ss.3.3 Except as otherwise expressly set forth in this Agreement, each Party
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENT
RIGHTS CLAIMS, ISSUED OR PENDING, AND ABSENSE OF INFRINGEMENT OF OR BY
RIGHTS OF OTHERS.
ss.3.4 Each Party is unaware of any claims asserted against them by any third
parties with respect to patent infringement or any other type of
liability relevant to licensing of the Technology, which have not been
disclosed to the other Party as of the Effective Date of this
Agreement.
ARTICLE 4
GRANTS
ss.4.1 Upon execution of the co-development agreement between Southern and
Eurobiotech Group, Inc. (hereinafter "Eurobiotech") shown in Exhibit A
(hereinafter "Eurobiotech Agreement") by both Southern and
Eurobiotech, SKI will have been deemed to have granted to Southern an
exclusive, worldwide license to SKI's rights in the Technology, with
the right to sublicense, to the extent necessary for Southern to
fulfill its obligations under its license of the Technology to
Eurobiotech Group, Inc.
ss.4.2 Both SKI and Southern are free to use the Technology for their
internal purposes in any way they deem fit, without informing the
other party.
ARTICLE 5
SHARING OF PROCEEDS
ss.5.1 All proceeds received by Southern, including but not limited to cash
or common stock payments, from the licensing or other commercial
utilization of any portion of Technology pursuant to Articles 3 and 4,
excluding fees for research & development, shall be apportioned
seventy-five percent (75%) to Southern and twenty-five percent (25%)
to SKI until the termination of Eurobiotech Agreement.
ss.5.2 If Southern receives from Eurobiotech anything of value in lieu of
cash payments, Southern shall share such payment with SKI according to
Article 5.1, based on the fair market value of such payment on the
date received by Southern, unless SKI waives in writing such payment
obligation in part or in full.
Inter Institutional Agreement Page 4
SKI/ Southern
--------------------------------------------------------------------------------
ss.5.3 Southern agrees to distribute to SKI it's share of royalty or other
income in accordance with this Agreement, within thirty (30) days of
receiving such payments. If distribution requires having shares of
stock be put into SKI's name, Southern agrees to initiate such
procedure within fifteen (15) days of of receipt of such stock shares.
Such payments shall be accompanied by a report from each licensee
detailing the calculation of royalties or milestone payment being
paid. Such payments shall show "Payment under Contract SK# 3294" on
the check stub, and shall be sent to:
Memorial ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Cancer Center
Office of Industrial Affairs
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Failure to pay such sums within thirty (30) days of receipt from
licensee shall be considered a material breach of this Agreement and,
after due notice according to Article 12, is sufficient grounds for
termination of this Agreement with the non-paying Party.
ss.5.4 Southern shall keep full, true and accurate records containing all
particulars that may be necessary for the purpose of showing the
proceeds paid. For the term of this Agreement, upon receipt of thirty
(30) days prior written notice, Southern shall allow SKI or its agents
to inspect such records for the purpose of verifying Southern's
payment statements or compliance in other respects with this
Agreement. Should such inspection lead to the discovery of a greater
than five percent (5%) discrepancy in reporting to SKI's detriment,
Southern agrees to pay the full cost of such inspection.
ss.5.5 Southern agrees to copy SKI promptly with all material correspondence
between Southern and Eurobiotech and to consult with ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇
on all Southern decisions which may cost an estimated $1000 or more,
or which may affect the value of the Technology or the income from the
Technology by an estimated $1000 or more.
ARTICLE 6
PATENT MANAGEMENT & EXPENSES
ss.6.1 SKI shall be responsible for preparing, filing, prosecuting and
maintaining SKI Patents. As of the Effective Date of the Eurobiotech
Agreement, SKI shall maintain SKI Patent Rights until the expiration
of such rights or the termination of this Agreement, whichever occurs
first. SKI agrees to copy Southern on patent correspondence relating
to SKI Patent Rights.
ss.6.2 Southern shall be responsible for preparing, filing, prosecuting and
maintaining Southern Patents. As of the Effective Date of the
Eurobiotech Agreement, Southern shall maintain Southern Patent Rights
until the expiration of such rights or the termination of this
Agreement, whichever occurs first. Southern agrees to copy SKI on
patent correspondence relating to Southern Patent Rights.
ss.6.3 All costs and expenses associated with preparing, filing, prosecuting
and maintaining
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all patent applications and patents relating to Technology shall be
borne by the respective Party until the execution of the Eurobiotech
Agreement. Upon signing the Eurobiotech Agreement, Southern shall be
responsible for and pay all future costs and expenses incurred by SKI
for the preparation, filing, prosecution, issuance, and maintenance of
the SKI Patents. SKI or its outside patent counsel will submit
invoices to Southern for such costs and expenses, and Southern shall
pay the invoiced amount within sixty days (60) of the date of such
invoice.
ss.6.4 Failure to pay patent expenses shall be considered a material breach
of contract and, after due notice according to Article 12, is
sufficient grounds for termination of this Agreement with the
non-paying Party.
Article 7
Interest
ss.7.1 Southern shall pay to SKI interest on any amounts not paid when due.
Such interest will accrue from the fifteenth (15th) day after the
payment was due at a rate two percent (2%) above the daily prime
interest rate, as determined by The Chase Manhattan Bank (N.A.) or its
successor entity, on each day the payment is delinquent, and the
interest payment will be due and payable on the first day of each
month after interest begins to accrue, until full payment of all
amounts due ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ is made.
ss.7.2 SKI's rights to receive such interest payments shall be in addition to
any other rights and remedies available to SKI.
ss.7.3 If the interest rate required in this subsection exceeds the legal
rate in a jurisdiction where a claim for such interest is being
asserted, the required interest rate shall be reduced, for such claim
only, to the maximum interest rate allowable in the jurisdiction.
ARTICLE 8
CONFIDENTIALITY
ss.8.1 During the term of this Agreement and for a period of five years
thereafter, The receiving party (hereinafter "Recipient") shall retain
in confidence, and shall not disclose to a third party without the
express written consent of the disclosing party (hereinafter
"Discloser"), any Confidential Information disclosed under this
Agreement, except for that Confidential Information which:
a) was in the possession or control of the Recipient before it was
received, as shown by written records;
b) is available, or becomes available, to the public through no
fault of Recipient or of any of Recipient agents or employees;
c) is rightfully received from sources not bound by a similar
confidentiality agreement
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with the Discloser, or
d) is independently developed by Recipient without knowledge or use
of the Confidential Information, as proven by competent evidence.
ss.8.2 After receipt of written consent from Discloser to disclose
Confidential Information to a third party, and prior to such
disclosure, Recipient hereto shall obtain the written agreement of
such third party, who is not otherwise bound by fiduciary obligations
to Recipient, to hold in confidence and not make use of Confidential
Information for any purpose other than those permitted by this
Agreement. Recipient shall notify the other promptly upon discovery of
any unauthorized use or disclosure of the Discloser's Confidential
Information.
ss.8.3 Nothing in this Agreement shall preclude SKI or Southern from making
reports or disclosures required by the National Institutes of Health
or any other organization which provided funds used for the research
relating to Technology, or disclosing Confidential Information to the
minimum extent required to comply with court orders, regulations or
statutes.
ARTICLE 9
PATENT INFRINGEMENT
ss.9.1 If any Party becomes aware of any infringement of a patent covered by
this Agreement, it shall notify and discuss with the other Party what
action is required to terminate such infringement. Each Party shall
have the option of taking action against any third party infringer of
their respective patent rights. If both Parties agree to act against
the infringement jointly, they shall share equally in the expenses and
disbursements in connection with such action and shall also share
equally all monies received as a result of such action. If one Party
does not agree to join in the action against infringement, the other
Party will have the right to prosecute a patent infringement action at
their sole expense, and shall be entitled to retain all monies
recovered.
ss.9.2 If the Eurobiotech Agreement has been executed at the time the Parties
become aware of any such infringement, Eurobiotech may join in such
action against any third party infringer as specified in the
Eurobiotech Agreement. In that event one or both Parties may elect not
to join in the action against the third party infringer as specified
in the Eurobiotech Agreement without being penalized according to
Article 9.1.
ARTICLE 10
INVENTORS SHARES
ss.10.1 This Agreement does not preclude inventors institutions their share of
royalty income and under the respective patent policies of each from
receiving from their respective such other benefits, if any, specified
of the Parties or under such other
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agreements that may exist between inventors and their respective
institutions. No Party shall be responsible for the other Parties'
obligations to their inventors.
ARTICLE 11
NON-USE OF NAMES
ss.11.1 Neither Party shall use the names of the other Party, nor any of its
Affiliates, employees, nor any adaptation thereof, in any advertising,
promotional or sales literature without prior written consent obtained
from the other Party in each case.
ARTICLE 12
TERM AND TERMINATION
ss.12.1 This Agreement shall remain in effect from the Effective Date until
the last to occur of: (a) the expiration of the last to expire of SKI
Patents and Southern Patents; (b) the expiration of the Eurobiotech
Agreement, (c) termination according to ss.12.2 of this Agreement; or
(d) by mutual agreement of the parties expressed in writing.
ss.12.2 Failure by any Party to comply with any of the material obligations
and conditions contained in this Agreement shall entitle the other
Party to give written notice requiring it to cure such default. If
such default is not cured within sixty (60) days after receipt of such
notice, the notifying Party shall be entitled (without prejudice to
any of its other rights conferred on it by this Agreement) to
terminate this Agreement with the defaulting Party by giving notice to
take effect immediately.
ss.12.3 Provisions of Article 8, and any other obligation incurred by a Party
during the term of this Agreement shall survive termination.
ARTICLE 13
SEVERABILITY
ss.13.1 If one or more of the provisions of this Agreement shall be held to be
invalid, illegal, or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, provided that the intent of
the Parties in entering into the Agreement is not materially affected
thereby.
ARTICLE 14
NOTICES
ss.14.1 Any communication required or permitted under this Agreement shall be
made in writing and sent to such Party, postage prepaid, addressed to
it as set out below, or as it shall subsequently designate by notice
to the other Party. However, if the communication involves an alleged
breach of this Agreement or a cancellation of this
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Agreement, such communication shall be sent by registered or certified
mail or other means providing proof of delivery, and also communicated
by telephone as promptly as possible. Communications or notices shall
be addressed as follows:
In the case of SKI, the communication or notice shall be addressed to:
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Research
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
Research Resources Management
In the case of Southern, the communication or notice shall be
addressed to:
Southern Research Institute
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
ARTICLE 15
GOVERNING LAW
ss.15.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
ARTICLE 16
ENTIRE AGREEMENT
ss.16.1 This instrument contains the entire Agreement between the Parties
hereto and supersedes all prior Agreements with respect to Technology.
Any modifications of this Agreement to be effective must be in writing
and signed by all Parties.
ARTICLE 17
INDEMNIFICATION
ss.17.1 Southern, and any sublicensee of rights granted under this Agreement,
including Eurobiotech, shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold SKI, its Board of
Managers, officers, employees and affiliates, harmless against all
claims and expenses, including legal expenses and reasonable
attorneys' fees, arising out of the death of or injury to any person
or persons or out of any damage to property and against any other
claim, proceeding, demand, expense and liability of any kind
whatsoever resulting from the production, manufacture, sale, use,
lease, consumption or advertisement of the Licensed
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Product(s) and/or Licensed Process(es) or arising from any obligation
of LICENSEE hereunder, except for any injuries, losses or damages that
specifically result from the gross negligence or willful misconduct of
SKI.
ARTICLE 18
MISCELANEOUS PROVISIONS
ss.18.1 Each Party hereby acknowledges that the rights and obligations of this
Agreement are subject to the laws and regulations of the United States
relating to the export of products and technical information. Without
limitation, each Party shall comply with all such laws and
regulations.
ss.18.2 This Agreement shall not be construed to grant any license or other
rights to either party in any patent rights, know-how, or other
technology of the other party, except as expressly provided in this
Agreement.
ss.18.3 Neither party shall assign its rights or obligations under this
Agreement, in whole or in part, by operation of law or otherwise,
without the prior written consent of the other, except to successor to
all or substantially all of the party's assets or business operations
relating to the intellectual property that is the subject of this
Agreement. Any purported assignment in violation of this article shall
be null and void.
ss.18.4 The waiver by either party hereto of any right hereunder or of the
failure to perform or of a breach by the other party shall not be
deemed a waiver of any other right hereunder or of any other breach or
failure by said other party whether of a similar nature or otherwise.
ss.18.5 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have the Effective Date.
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Institute for Cancer Southern Research Institute
Research
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇. ▇. ▇▇▇▇▇
Title: Senior Vice President Title: President and CEO
Research Resources Management
Date: 9/8 , 1998 Date: 9/1/98 , 1998
-------------------------------- -----------------------------
Inter Institutional Agreement
SKI/ Southern
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EXHIBIT B
SKI Patents
United States Patent Number 4,751,221 issued June 14, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Number 4,918,179 issued April 17,1990
Canadian Patent Number 1,271,192 issued July 3, 1990
EPO Patent Number 0219829 issued December 30, 1992 in Germany, France, and
the United Kingdom
Japanese Patent Number ▇▇▇▇▇▇▇ issued December 5, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Number 5,034,518 issued July 23, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Number 5,384,310 issued January 24, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Number 5,661,136 issued August 26,1997
European Patent Number 0473708 issued January 15, 1997 in France, Germany,
Great Britain, Italy, Netherlands, Spain, Sweden, and Switzerland
European Patent Application Serial Number 92912163.0 filed May 7,1992,
designating Austria, Belgium, Germany, Greece, France, Italy,
Luxembourg, Monaco, Netherlands, Spain, Sweden, Switzerland, and the
United Kingdom.
Japanese Patent Application Serial Number 2-508789 filed May 23, 1990
Japanese Patent Application Serial Number 500121/1993 filed May 7, 1992
Canadian Patent Application Serial Number 2,102,782 filed May 7, 1992
[LOGO]
Senior Vice President
Research Resources Management
September 3, 1998
TO WHOM IT MAY CONCERN:
In my absence, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Director, Research Resources
Management, will sign as an institutional official for the ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇
Institute for Cancer Research.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
JSQ:meb
Memorial ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Cancer Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NCI-designated Comprehensive Cancer Center
