EXHIBIT 10.1
CO-DEVELOPMENT AGREEMENT
This Agreement, effective on March 25, 2003, is by and between DMI
BioSciences, Inc., having a place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and its Affiliates (collectively referred
to herein as "DMI") and Enhance Lifesciences, Inc., having a place of business
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and its
Affiliates (collectively referred to herein as "ENHANCE").
WHEREAS, DMI has Intellectual Property rights relating to the use of
DMI 7958, Tramadol, and isomers of Tramadol for the delay of ejaculation in
humans;
WHEREAS, ENHANCE and DMI want to jointly develop and commercialize
Product(s), including Product(s) comprising or utilizing DMI 7958, Tramadol, and
isomers of Tramadol, for the delay of ejaculation in humans;
WHEREAS, ENHANCE has expertise and strategic relationships which may
facilitate the development and commercialization of Product(s), including
Product(s) comprising or utilizing DMI 7958, Tramadol, and isomers of Tramadol,
for the delay of ejaculation in humans;
WHEREAS, DMI and ENHANCE signed a Term Sheet on November 29, 2002,
setting forth certain agreed terms to be included in this Agreement; and
WHEREAS, DMI and ENHANCE entered into a Letter Of Intent, effective as
of January 29, 2003, setting forth terms and conditions whereby the necessary
steps can be taken so that a Phase 2a Trial of a DMI-7958-Product can be
commenced by March 2003 or as soon as possible thereafter.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth below, the parties agree as follows.
Article 1. Definitions
As used herein, the following capitalized terms have the meanings set
forth below:
1.1 "Affiliate" means any corporation, firm, partnership or other
entity that, directly or indirectly, is controlled by DMI
BioSciences, Inc. or Enhance Lifesciences, Inc. For the
purposes of this Agreement, "controlled" means possession of
the power to direct, or cause the direction of, the management
and policies of a corporation, firm, partnership, or other
entity, whether through the ownership of equity, status as a
general partner, by contract or otherwise.
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1.2 "Additional Research And Development" shall mean that research
and development described in Section 3.5 below.
1.3 "Calendar Quarter" means each three (3)-month period ending on
the last day of March, June, September and December of a given
year.
1.4 "Clinical Trials" means all human clinical trials conducted
with a Product, including Phase 1 through Phase 4 human
clinical trials.
1.5 "Clinical Trials Plan" means a Clinical Trials Plan prepared
and amended from time to time by the Steering Committee as
described in Article 9. Each Clinical Trials Plan will be a
comprehensive plan for performing Clinical Trials and
obtaining Regulatory Approval of Product(s) in the Territory
and will include a budget, a schedule of deadlines and time
periods for accomplishing all necessary activities, procedures
for ensuring compliance with all regulatory and quality
guidelines and requirements, and all other relevant
information.
1.6 "Commercially Reasonable And Diligent Efforts" means, with
respect to research, development and commercialization of a
Product, a party's use of best efforts and resources
consistent with the exercise of prudent scientific and
business judgment, as applied to other pharmaceutical products
of similar potential, market size and competitive environment.
1.7 "Commercialization Plan" means a Commercialization Plan
prepared and amended from time to time by the Steering
Committee as described in Article 9. Each Commercialization
Plan will be a comprehensive plan for the commercialization of
Product(s) in the Territory and will include a budget, a
schedule of deadlines and time periods for accomplishing all
necessary activities (including a deadline for the First
Commercial Sale of Product(s) that have received Regulatory
Approval), marketing plans, descriptions of promotional
activities, sales objectives, branding strategies, and all
other relevant information.
1.8 "Deductible Expenses" for a Product are (i) all of the costs
of manufacturing or purchasing the Product, (ii) all of the
costs of distributing, shipping and selling the Product, (iii)
all of the costs of marketing, promoting and advertising the
Product, (iv) returns and allowances, (v) sales taxes and
insurance, and (vi) reasonable Overhead. "Deductible Expenses"
do not include the costs of research and development,
Preclinical Studies, Clinical Studies, obtaining Regulatory
Approval of the Product, income taxes, legal expenses
(attorneys fees, filing fees, disbursements, expert witness
fees, etc.),
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amounts paid as a result of a settlement or order of court
(judgments) in connection with a claim or lawsuit, or any
portion of these costs.
1.9 "DMI" means DMI BioSciences, Inc. and its Affiliates. DMI is
also referred to herein as a "party". Collectively, DMI and
ENHANCE are sometimes referred as the "parties".
1.10 "DMI 7958" means a racemic mixture of the CIS isomers of
Tramadol hydrochloride, I.E.,
(+)cis-2-[(dimethylamino)methyl]-1-(3-methoxyphenyl)
cyclohexanol hydrochloride.
1.11 "DMI-7958-Product(s)" means product(s) comprising or utilizing
DMI 7958.
1.12 "Drug Approval Application" means an application for
Regulatory Approval required for commercial sales of a
Product, such as an NDA.
1.13 "Effective Date" is the date first written above.
1.14 "ENHANCE" means Enhance Lifesciences, Inc. and its Affiliates.
ENHANCE is also referred to herein as a "party". Collectively,
DMI and ENHANCE are sometimes referred as the "parties".
1.15 "FDA" means the United States Food and Drug Administration.
1.16 "Field" means the use of Product(s) to delay ejaculation in
humans.
1.17 "First Commercial Sale" means the first sale of each Product
in a country of the Territory following Regulatory Approval of
the Product in that country, or if no such Regulatory Approval
or similar marketing approval is required, the date upon which
each Product is first commercially available in a country.
1.18 "GCP" means the E6 Guideline for Good Clinical Practice of the
ICH.
1.19 "GLP" means the current Good Laboratory Practice regulations
promulgated by the FDA, published at Part 58 of Title 21 of
the United States Code of Federal Regulations, as amended from
time to time, and such equivalent regulations or standards of
countries outside the United States as may be applicable to
activities conducted hereunder.
1.20 "GMP" means the current Good Manufacturing Practice
regulations promulgated by the FDA, published at Part 210 et
seq. and Parts 600-610 of Title 21 of the United States Code
of Federal Regulations, as amended from time to time, and such
equivalent regulations or standards of countries outside the
United States as may be applicable to activities conducted
hereunder.
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1.21 "Gross Sales Amount" means all monies and the fair market
value of all other consideration (including payment in kind,
exchange or other form) received with respect to Sales of a
Product.
1.22 "ICH" means International Conference on Harmonisation of
Technical Requirements for Registration of Pharmaceuticals for
Human Use.
1.23 "IND" means an Investigational New Drug Application satisfying
the requirements of Part 312 of Title 21 of the United States
Code of Federal Regulations filed with the FDA to commence
human clinical testing of any Product in the United States or
any similar filing with a regulatory authority of another
country to commence human clinical testing of any Product in
that country.
1.24 "Indication" means a human disease or condition, an important
manifestation of a human disease or condition, or a symptom
associated with a human disease or condition for which use of
a Product is indicated, as would be identified in the
Product's label under applicable FDA regulations or the
foreign equivalent thereof.
1.25 "Indirect Costs" means all of the costs incurred in performing
those activities necessary for specific Clinical Trial(s) to
take place, such as procurement or manufacture of Product(s),
formulation and analytical studies, preclinical safety
assessments, and preparation of documentation required by
regulatory authorities.
1.26 "Intellectual Property" means: (i) inventions, know-how, trade
secrets, other Proprietary Information, works of authorship,
and trademarks and other designations of origin; (ii) all
rights and privileges therein throughout the world; and (iii)
all physical embodiments thereof.
1.27 "Major Market Countries" means United States, France, Germany,
Italy, Spain and United Kingdom.
1.28 "NDA" means a New Drug Application satisfying the requirements
of Title 21 of the United States Code of Federal Regulations
filed with the FDA to obtain Regulatory Approval for a Product
in the United States or any similar filing with a regulatory
authority of another country to market any Product in that
country.
1.29 "Overhead" means costs incurred by a party, or for its
account, which are attributable to a party's supervision,
services, occupancy costs, corporate bonus, and its payroll,
information systems, human relations or purchasing functions
and which are allocated based on space occupied, headcount or
other activity-based method consistently applied by the party.
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1.30 "Payment Cap" means that amount of money specified in Section
7.3.
1.31 "Phase 1 Trial" means a human clinical trial in any country
that is conducted to initially evaluate the safety and/or
pharmacological effect of a Product in human subjects or that
would otherwise satisfy the requirements of Part 312 of Title
21 of the United States Code of Federal Regulations or its
foreign equivalent.
1.32 "Phase 2 Trial" means a human clinical trial in any country
that is conducted to initially evaluate the effectiveness of a
Product for a particular Indication in patients with the
Indication or that would otherwise satisfy the requirements of
Part 312 of Title 21 of the United States Code of Federal
Regulations or its foreign equivalent.
1.33 "Phase 2a Trial" means a limited Phase 2 Trial typically
conducted in up to 50 patients to demonstrate the
effectiveness of a Product for a human Indication.
1.34 "Phase 2b Trial" means a Phase 2 Trial, the results of which,
alone or in combination with the results of the Phase 2a
Trial, would demonstrate the effectiveness of a Product for a
particular Indication in patients with the Indication or that
would otherwise satisfy the requirements of Part 312 of Title
21 of the United States Code of Federal Regulations or its
foreign equivalent.
1.35 "Phase 3 Trial" means a controlled human clinical trial in any
country, the results of which could be used to establish
safety and efficacy of a Product as a basis for a marketing
approval application submitted to the FDA, or that would
otherwise satisfy the requirements of Part 312 of Title 21 of
the United States Code of Federal Regulations or its foreign
equivalent.
1.36 "Phase 4 Trial" means a human clinical trial in any country
initiated after Regulatory Approval in that country within the
approved product labeling.
1.37 "Preclinical Studies" means, with respect to a Product, (i)
synthesis and formulation; (ii) physical and chemical
properties, (iii) IN VITRO activity, (iv) IN VIVO activity in
animals, (v) metabolism, absorption and pharmacokinetics data
from animal studies, (vi) limited toxicology data, and (vii)
similar studies that are typically performed before first
administration of a Product to humans.
1.38 "Prime Rate" means that prime interest rate specified in the
Wall Street Journal, New York Edition, for the date specified.
1.39 "Product(s)" means (i) product(s) comprising or utilizing DMI
7958, (ii) product(s) comprising or utilizing one or more of
the isomers of Tramadol,
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(iii) product(s) comprising or utilizing one or more
derivatives of Tramadol and/or one or more isomers of the
derivatives; (iv) product(s) comprising or utilizing one or
more additional compounds and/or one or more inventions made,
created, discovered or developed as a result of performance of
the Additional Research And Development, and/or (v) product(s)
licensed or acquired pursuant to Section 5.2 below.
1.40 "Profits" means Gross Sales Amount for a Product less all
Deductible Expenses for the Product.
1.41 "Proprietary Information" means all business and technical
information of a confidential and proprietary nature,
including ideas, inventions, discoveries, trade secrets,
know-how, protocols, research plans, development plans,
compilations, methods, techniques, processes, data, test
results, formulas, formulations, computer programs, reports,
other works of authorship, business plans, sales forecasts,
marketing information, pricing and financial information,
customer lists, branding strategy, and planned or pending
acquisitions and divestitures, and all physical embodiments
thereof, including disks, computers, software, printouts,
laboratory notebooks, writings, notes, documentation, records,
reports, sketches, plans, memoranda, compilations, devices,
prototypes, instruments, blueprints, diagrams, specifications,
operating instructions, written descriptions, photographs,
videos, chemicals, biological materials, compositions, lists,
invention disclosures, and patent applications.
1.42 "Research And Development Plan" means a Research And
Development Plan prepared and amended from time to time by the
Steering Committee as described in Article 9. Each Research
And Development Plan will be a comprehensive plan for
performing the Additional Research And Development and will
include a listing and prioritization of projects, objectives
and goals, a budget, a schedule of deadlines and time periods
for accomplishing all necessary activities, procedures for
ensuring compliance with all regulatory and quality guidelines
and requirements, and all other relevant information.
1.43 "Regulatory Approval" means all approvals, licenses,
registrations and authorizations by the appropriate government
entity or entities in a country or region (such as the
European Union) necessary for the commercial sale of a Product
in that country or region, including where applicable,
approval of labeling, pricing, reimbursements and
manufacturing. "Regulatory Approval" in the United States
shall mean final approval of an NDA pursuant to Part 314 of
Title 21 of the United States Code of Federal Regulations
permitting marketing of the Product in interstate commerce of
the United States. "Regulatory Approval" in the European Union
shall mean final approval of a Marketing Authorization
Application pursuant Council
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Directive 75/319/EEC, as amended, or Council Regulation
2309/93/EEC, as amended.
1.44 "Revenues" means (i) Profits and (ii) those payments received
from licensees and sublicensees of DMI and/or ENHANCE,
including licensing fees, sublicensing fees, milestone
payments and royalties.
1.45 "Sales" means sales of each Product in the Territory by either
party to Third Parties in bona fide arms-length transactions.
1.46 "Steering Committee" means the Steering Committee described in
Article 9.
1.47 "Territory" means the world.
1.48 "Third Party" means an entity other than DMI or ENHANCE. A
Third Party may be an individual, corporation, firm,
partnership or other entity.
1.49 "Tramadol" means 2-[(dimethylamino)methyl]-1-(3-methoxyphenyl)
cyclohexanol and its pharmaceutically-acceptable acid addition
salts. The structures of the stereoisomers of Tramadol are
shown in Appendix B attached hereto. As used herein, the
designations of "CIS" and "TRANS" stereoisomers of Tramadol
are made in reference to the relative positions of the
dimethylamino and hydroxy substituents on the cyclohexane ring
within the Tramadol molecule. As shown in Appendix B, the R,R
and S,S enantiomers will be referred to herein as the "CIS"
isomers, while the R,S and S,R enantiomers will be referred to
as the "TRANS" isomers. As also shown in Appendix B the R,R
isomer of Tramadol will be referred to herein as the "(+)CIS"
isomer and the S,S isomer will be referred to herein as the
"(-)CIS" isomer. It is presently understood that the R,S and
S,R isomers are not optically active.
1.50 "USA" or "United States" shall mean the United States Of
America, its possessions, territories, and protectorates
(including the Commonwealth of Puerto Rico), and the District
Of Columbia.
Article 2. Scope And Goals Of The Development
2.1 It is the intent of DMI and ENHANCE to share the costs and
responsibilities for the development, Regulatory Approval, and
commercialization of Product(s) for the Field within the
Territory, as more particularly set forth herein. It is a
priority of the parties to develop and commercialize
Product(s) for the Field within the Major Market Countries.
Therefore, DMI and ENHANCE agree, pursuant and subject to the
terms of this Agreement, to cooperate with, and provide
reasonable support for, each other in developing Product(s),
with the goal of obtaining Regulatory Approval for Product(s)
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as soon as reasonably practicable for commercial marketing and
sale in the Major Market Countries and then in other countries
of the Territory, including especially Japan.
2.2 In particular, it is a high priority of the parties to develop
and commercialize DMI-7958-Product(s) for the Field in at
least the Major Market Countries. Therefore, DMI and ENHANCE
agree, pursuant and subject to the terms of this Agreement, to
cooperate with, and provide reasonable support for, each other
in developing DMI-7958-Product(s), with the goal of obtaining
Regulatory Approval as soon as reasonably practicable for the
commercial marketing and sale of DMI-7958-Product(s) in at
least the Major Market Countries. In this regard, it is the
intent of the parties that at least the initial Clinical
Trials will be performed with a DMI-7958-Product which is the
same as, or equivalent to, a DMI-7958-Product that has already
received Regulatory Approval for uses outside the Field, so
that Preclinical Studies and Phase 1 Trials need not be
performed, and a Phase 2a Trial of such a DMI-9758-Product can
be commenced as soon as practicable after the Effective Date.
2.3 It is also a priority of the parties to undertake the
Additional Research And Development, at least with respect to
the isomers of Tramadol, the derivatives of Tramadol and the
isomers of the derivatives of Tramadol. Therefore, DMI and
ENHANCE agree, pursuant and subject to the terms of this
Agreement, to cooperate with, and provide reasonable support
for, each other in undertaking the Additional Research And
Development as soon as reasonably practicable.
2.4 It is also the intent of DMI and ENHANCE to share the Revenues
obtained as a result of the commercialization, sales,
licensing and sublicensing of Product(s) for the Field within
the Territory.
Article 3. DMI's Responsibilities
3.1 DMI shall be responsible for conducting Phase 2 Trials or
Phase 2a and Phase 2b Trials of DMI-7958-Product(s). The Phase
2 Trials or Phase 2a and Phase 2b Trials shall be conducted in
accordance with the Clinical Trials Plan for
DMI-7958-Product(s) as adopted and amended from time to time
by the Steering Committee, and the Phase 2 Trials or Phase 2a
and Phase 2b Trials shall be designed and conducted so that
the results can be used in connection with efforts to obtain
Regulatory Approval of the DMI-7958-Product(s) in at least the
Major Market Countries.
3.2 DMI shall be responsible for supplying DMI-7958-Product(s) for
the Phase 2 Trials or the Phase 2a and Phase 2b Trials.
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3.3 DMI shall be responsible for conducting Phase 1 Trials of any
additional Product(s) selected by the Steering Committee. The
Phase 1 Trials shall be conducted in accordance with the
Clinical Trials Plan for the Product(s) as adopted and amended
from time to time by the Steering Committee, and the Phase 1
Trials shall be designed and conducted so that the results can
be used in connection with obtaining Regulatory Approval of
the Product(s) in at least the Major Market Countries.
3.4 DMI shall be responsible for conducting Phase 2 Trials or
Phase 2a and Phase 2b Trials of any additional Product(s)
selected by the Steering Committee. The Phase 2 Trials or the
Phase 2a and Phase 2b Trials shall be conducted in accordance
with the Clinical Trials Plan for the Product(s) as adopted
and amended from time to time by the Steering Committee, and
the Phase 2 Trials or Phase 2a and Phase 2b Trials shall be
designed and conducted so that the results can be used in
connection with obtaining Regulatory Approval of the
Product(s) in at least the Major Market Countries.
3.5 DMI shall be responsible for conducting basic research,
development work, and Preclinical Studies of isomers of
Tramadol, derivatives of Tramadol, isomers of these Tramadol
derivatives, additional compounds for the delay of ejaculation
in humans, and other inventions for, or relating to, the delay
of ejaculation in humans (collectively referred to herein as
"Additional Research And Development") in accordance with the
Research And Development Plan as adopted and amended from time
to time by the Steering Committee.
3.6 DMI shall be responsible for manufacturing and supplying
additional Product(s) for the Additional Research And
Development and for Phase 1 and Phase 2 or Phase 2a and Phase
2b Trials that it performs.
Article 4. ENHANCE's Responsibilities
4.1 Upon successful completion of the Phase 2 Trials or the Phase
2a and Phase 2b Trials, ENHANCE shall be responsible for
conducting Phase 3 Trials of DMI-7958-Product(s) and shall be
responsible for taking the steps necessary, and performing the
additional work required, to obtain Regulatory Approval to
market DMI-7958-Product(s) for the Field in at least the Major
Market Countries in accordance with the Clinical Trials Plan
for DMI-7958-Product(s) as adopted and amended from time to
time by the Steering Committee.
4.2 After Regulatory Approval of DMI-7958-Product(s), ENHANCE
shall be responsible for commercializing the
DMI-7958-Product(s) for the Field in at least the Major Market
Countries in accordance with the Commercialization Plan for
DMI-7958-Product(s) as adopted and amended from time to time
by the Steering Committee.
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4.3 ENHANCE shall be responsible for supplying
DMI-7958-Product(s), except for the Phase 2 Trial or the Phase
2a and Phase 2b Trials.
4.4 ENHANCE shall be responsible for conducting Phase 3 Trials of
any additional Product(s) selected by the Steering Committee
and shall be responsible for taking the steps necessary, and
performing the additional work required, to obtain Regulatory
Approval to market any such Product(s) for the Field in at
least the Major Market Countries in accordance with the
Clinical Trials Plan for the Product(s) as adopted and amended
from time to time by the Steering Committee.
4.5 After Regulatory Approval, ENHANCE shall be responsible for
commercializing any additional Product(s) for the Field in at
least the Major Market Countries in accordance with the
Commercialization Plan for the Product(s) as adopted and
amended from time to time by the Steering Committee.
4.6 ENHANCE shall be responsible for manufacturing and supplying
additional Product(s), except for Additional Research And
Development and for Phase 1 and Phase 2 or Phase 2a and 2b
Trials.
4.7 ENHANCE shall be responsible for conducting Phase 4 Trials, if
any, for Product(s) in accordance with the Clinical Trials
Plan for the Product(s) as adopted and amended from time to
time by the Steering Committee.
Article 5. Obligations And Responsibilities Of Both Parties
5.1 During the term of this Agreement, neither party will
independently research, develop and/or commercialize a product
for delay of ejaculation without the written permission of the
other party or as expressly allowed in this Agreement.
5.2 Each party agrees to present to the Steering Committee any
opportunity it becomes aware of for the development and/or
commercialization of products for the delay of ejaculation for
consideration for licensing or acquisition and inclusion in
this Agreement. If an opportunity is declined by the Steering
Committee, then the presenting party may independently pursue
the opportunity.
5.3 Each party agrees to use Commercially Reasonable And Diligent
Efforts to research, develop and commercialize Product(s) for
the Field within the Territory, with priority being given to
the development and commercialization of Product(s) in the
Major Market Countries. In particular, each party agrees to
use Commercially Reasonable And Diligent
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Efforts to develop and commercialize DMI-7958-Product(s) in at
least the Major Market Countries as quickly as possible.
5.4 Each party shall be responsible for adherence to, and
compliance with, all applicable laws, regulatory guidelines
and requirements, and quality standards for the research,
development, manufacturing, Preclinical Studies and Clinical
Trials it performs and for Sales of Product(s) made by it.
5.5 Each party agrees to make available to the other party all
information produced or obtained by it as a result of
performing its obligations and responsibilities under this
Agreement, including all data, results and other information
from any research, Preclinical Study and/or Clinical Trial
conducted by it.
5.6 Each party shall ▇▇▇▇ all Product(s) sold by it, and shall
cause any entity authorized by it to sell Product(s) to ▇▇▇▇
all Product(s) sold by that entity, with the applicable patent
number(s) in accordance with the requirements of applicable
laws and regulations in the country or countries of
manufacture and sale.
Article 6. License Fee And Milestone Payment
6.1 ENHANCE agrees to pay DMI a non-refundable payment of $50,000
due within three (3) business days after the date of execution
of this Agreement by ENHANCE.
6.2 ENHANCE agrees to pay DMI a non-refundable payment of $100,000
due three (3) days after commencement of the first Clinical
Trial of any Product. "Commencement" of a Clinical Trial shall
mean the first date on which the Clinical Trial may legally be
commenced.
Article 7. Sharing Of Costs Of Research, Development
And Commercialization Of Product(s)
7.1 The parties agree to share the costs of the research,
development and commercialization of Product(s) as provided in
this Article 7.
7.2 ENHANCE agrees to make the following payments to DMI:
(a) Payment of all costs for the Phase 2 Trials or Phase
2a and Phase 2b Trials of DMI-7958-Product(s),
including Indirect Costs, plus an overhead amount to
be determined as set forth in Subsection (e) of this
Section 7.2.
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(b) Payment of all costs for the Additional Research And
Development plus an overhead amount to be determined
as set forth in Subsection (e) of this Section 7.2.
(c) Payment of all costs for the Phase 1 Trials of any
other Product(s), including Indirect Costs, plus an
overhead amount to be determined as set forth in
Subsection (e) of this Section 7.2.
(d) Payment of all costs for the Phase 2 Trials or Phase
2a and 2b Trials of any other Product(s), including
Indirect Costs, plus an overhead amount to be
determined as set forth in Subsection (e) of this
Section 7.2.
(e) An overhead amount, as a percentage of total costs,
shall be established by the Steering Committee
independently for each activity for each year during
which the activity will be performed. Factors to be
considered by the Steering Committee in establishing
the overhead amount include the type of activity, the
stage of the activity (E.G., whether the activity is
just beginning or is near completion), whether it is
the first time that DMI has performed the activity, a
realistic and reasonable assessment of the commitment
of personnel and facilities that DMI must make to the
activity at each stage, etc. However, in no event
will the overhead amount be less than DMI's actual
Overhead plus 5% of total costs. If the overhead
amount established by the Steering Committee and paid
to DMI as provided in Subsection (f) of this Section
7.2 is less than DMI's actual Overhead plus 5% of
total costs, the deficiency will be paid to DMI as
also provided in Subsection (f) of this Section 7.2.
(f) Payments (a), (b), (c) and (d) shall be made on a
periodic basis to be determined by the Steering
Committee, but no less than quarterly. Each such
payment shall be that amount budgeted by the Steering
Committee for the upcoming period for activities (a),
(b), (c) and (d), including the appropriate overhead
amount, and each such payment shall be made at least
fifteen (15) days prior to the commencement of the
upcoming period. Any overage will be credited toward
the payment for the next period. Any deficiency shall
be added to the payment for the next period or shall
be paid sooner if requested by DMI, in which case the
payment of the deficiency will be made within fifteen
(15) days after being requested by DMI.
(g) DMI shall keep such records, books and accounts
showing its use of the payments specified in
Subsections (a), (b), (c) and (d) of this Section 7.2
as the Steering Committee may require.
7.3 Nothwithstanding the foregoing, the total of the payments
specified in Subsections (a), (b), (c) and (d) of Section 7.2
shall not exceed $12,500,000 ("Payment Cap"). Renegotiation of
the amount of the Payment Cap may be
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requested by either party at any time during the first twelve
(12) months following the Effective Date. If a renegotiation
is requested, both parties agree to renegotiate in good faith.
The renegotiated amount of the Payment Cap shall be based on
the best available estimates of the costs of the activities
contemplated by this Agreement and on a reasonable and
realistic assessment of ENHANCE's financial condition and of
the funding that ENHANCE will reasonably be able to provide.
In no event, however, will the Payment Cap be less than
$6,000,000.
7.4 Costs in excess of the Payment Cap which are necessary for the
research, development and commercialization of
DMI-7958-Product(s) and/or additional Product(s) will be
shared equally by the parties and/or funding to cover these
costs will be obtained from third parties.
(a) If it becomes necessary for the parties to provide
some or all of this additional funding, and DMI
cannot contribute its equal share of this additional
funding, then ENHANCE may elect to make up some or
all of the deficiency. In such a case, the Revenues
payments due to DMI under Article 8 shall be reduced
from 50% to 35% and ENHANCE's Revenues payments under
Article 8 shall be increased from 50% to 65% until
such time as ENHANCE has been reimbursed at the rate
of $1.25 for each $1.00 of additional funding
provided by ENHANCE.
(b) Similarly, if it becomes necessary for the parties to
provide some or all of this additional funding and
ENHANCE cannot contribute its equal share of this
additional funding, then DMI may elect to make up
some or all of the deficiency. In such a case, the
Revenues payments due to ENHANCE under Article 8
shall be reduced from 50% to 35% and DMI's Revenues
payments under Article 8 shall be increased from 50%
to 65% until such time as DMI has been reimbursed at
the rate of $1.25 for each $1.00 of additional
funding provided by DMI.
Article 8. Sharing Of Revenues; Reports And Records
8.1 ENHANCE and DMI will share equally all Profits on Sales of
Product(s) for the Field in the Territory made by either one
of them. Payments of an equal share (I.E., 50%) of a selling
party's Profits shall be paid by the selling party to the
other party for each Calendar Quarter in which Profits are
made. Payments shall be due on or before thirty (30) days
after the last day of a Calendar Quarter in which Profits are
made. In the case of any delay in the payment, interest at 2%
over the Prime Rate, assessed from the thirty-first day after
the last day of the Calendar Quarter until the date the
payment is received, shall be due. Each party shall be
responsible for paying any and all taxes levied on account of
the payments it receives.
13
8.2 ENHANCE and DMI will share equally all payments received from
licensees and sublicensees, including licensing fees,
sublicensing fees, milestone payments and royalties. Payments
of an equal share (I.E., 50%) of a payment received from
licensees and sublicensees shall be made no later than thirty
(30) days after its receipt. In the case of any delay in the
payment, interest at 2% over the Prime Rate, assessed from the
thirty-first day after the receipt of the payment from a
licensee or sublicensee until the date the payment is
received, shall be due. Each party shall be responsible for
paying any and all taxes levied on account of the payments it
receives.
8.3 All payments shall be made by wire transfer in United States
dollars to the credit of such bank account as may be
designated by the receiving party to paying party in writing.
Any payment which falls due on a date which is a Saturday,
Sunday or a legal holiday in the United States may be made on
the next succeeding day which is not a Saturday, Sunday or
legal holiday.
8.4 Each party shall furnish or cause to be furnished to the other
party on a quarterly basis a written report or reports
covering each Calendar Quarter (each such Calendar Quarter
being sometimes referred to herein as a "reporting period") in
which Profits are made and/or in which payments are received
from licensees or sublicensees showing (i) Sales of each
Product in the Territory during the reporting period, (ii)
dispositions of Product(s) other than by sale for cash, (iii)
calculation of Profits for each Product during the reporting
period, (iv) payments received from licensees and sublicensees
during the reporting period, including, for royalty payments,
a report from the licensees and/or sublicensees showing the
calculation of the royalties, (v) the exchange rates used in
converting into dollars from the currencies in which Sales
were made or payments from licensees and sublicensees were
received, and (vi) any other information necessary to
establish the accuracy and completeness of the payments.
Reports shall be due thirty (30) days after the end of each
Calendar Quarter in which Profits are made and/or in which
payments are received from licensees or sublicensees. If a
party does not make Profits or receive payments from licensees
or sublicensees in a Calendar Quarter, then that party will so
notify the other party.
8.5 Each party shall keep accurate and consistent records and
books of account containing regular entries relating to Sales
and to the manufacture of Product(s), which records shall
contain all information necessary for the computation of
Profits. Such records shall be available for examination from
time to time, including for a period of three (3) years after
termination of this Agreement, by representatives of the other
party for the purpose of verifying the accuracy of the
quarterly reports required by Subsection 8.4 and Profits
computations. Such examination shall be made during normal
business hours with prior notice. Any such representative
shall be entitled to make copies and extracts from such books
and records. Each party shall fully cooperate
14
with such examination and inspection and shall give any
explanations that reasonably may be requested.
8.6 Upon the written request of a party ("requesting party"), and
not more than once in each calendar year, the other party
("audited party") will permit an independent certified public
accounting firm of recognized standing selected by the
requesting party and reasonably acceptable to the audited
party to have access during normal business hours to those
records of the audited party that may be necessary to verify
the accuracy of the quarterly reports required by Subsection
8.4 and calculations of Profits for any year ending no more
than 36 months prior to the date of such request.
(a) The accounting firm will disclose to the requesting
party only whether the quarterly reports and Profits
calculations are correct or incorrect, the specific
details concerning any discrepancies, and the
corrected amount of Sales and/or Profits. No other
information will be provided to the requesting party.
(b) If the requesting party's independent accounting firm
determines that Profits have been overpaid, the
requesting party will repay the audited party the
overage on the same date that the requesting party
delivers to the audited party such accounting firm's
written report. If the requesting party's independent
accounting firm determines that Profits have been
underpaid, the audited party will pay the amount of
the additional Profits plus interest assessed at 2%
over the Prime Rate from the time(s) the payment(s)
was(were) originally due. The payment of the
additional Profits and interest will be due no later
than fifteen (15) days after the date on which the
requesting party delivers to the audited party such
accounting firm's written report.
(c) The fees charged by the accounting firm will be paid
by the requesting party, provided that, if the audit
determines that the additional Profits payable by the
audited party to the requesting party for such period
exceed 5% of the Profits actually paid, then the
audited party will pay the reasonable fees and
expenses charged by such accounting firm.
8.7 Each party will treat all financial information of the other
party subject to review under this Article 8 as Proprietary
Information in accordance with Article 16 hereof and will
cause its accounting firm to enter into an acceptable
confidentiality agreement obligating such accounting firm to
retain all such financial information in confidence pursuant
to the confidentiality and non-use provisions of Article 16.
Article 9. Steering Committee
15
9.1 The parties hereby establish a Steering Committee to manage,
direct, supervise and coordinate, in accordance with the terms
of this Agreement, all of the activities contemplated by this
Agreement, including (i) the development and commercialization
of Product(s) for the Field within the Territory, (ii) the
Additional Research And Development, and (iii) the licensing
or acquisition of Product(s) as provided in Subsection 5.2
above. In particular, but without limitation, the
responsibilities of the Steering Committee will include:
(a) Preparation and approval of Research And Development
Plans for the Additional Research And Development and
modifications of these plans as necessary or
desirable, but no less than annually.
(b) Preparation and approval of Clinical Trials Plans and
Commercialization Plans for Product(s) and
modifications of these plans as necessary or
desirable, but no less than annually.
(c) Selection and approval of Product(s) for Preclinical
Studies and Clinical Trials.
(d) Approval of the protocols for all Preclinical Studies
and Clinical Trials and approval of the Indication(s)
for all Product(s) selected for Clinical Trials.
(e) Ensuring the existence and quality of Standard
Operating Procedures (SOPs) for compliance with
standards of good practice in all areas of a
Product's development and commercialization (E.G.,
GLP, GCP, GMP, etc.).
(f) Coordination of the manufacture and supply of the
Product(s), the regulatory filings, marketing,
post-approval development studies and all other
activities necessary or desirable for the development
and commercialization of the Product(s).
(g) Facilitate the exchange of information and the
cooperation and coordination between the parties as
they exercise their respective rights and meet their
respective obligations under this Agreement.
(h) Develop a publication strategy within the guidelines
established in Section 17.
(i) Establish sub-committees as appropriate to facilitate
progress, coordination and cooperation in key areas.
(j) Designate one of the parties or another entity to
prepare and maintain necessary budgets and other
financial records.
16
(k) Establish the overhead amounts as provided in
Subsection (e) of Section 7.2.
(l) Perform such other functions as appropriate to
further the purposes of this Agreement.
9.2 The Steering Committee will be composed of an equal number of
representatives of each party who shall be appointed, and may
be replaced at any time, by such party on written notice to
the other party in accordance with this Agreement. Initially,
the Steering Committee will be composed of two representatives
of each party, but the number of representatives may be any
number subsequently agreed to by the Steering Committee. The
representatives will, preferably, be individuals with
expertise in basic research, pre-clinical research, clinical
research, manufacturing, regulatory filings, marketing and
post-approval development, as applicable to the stage of the
development or commercialization of the Product(s). Any member
of the Steering Committee may designate a substitute to attend
and perform the functions of the member at any meeting of the
Steering Committee. Each party shall designate one of its
representatives to be one of the Co-Chairpersons of the
Steering committee. Within five (5) days after the Effective
Date, each party will notify the other of the identity of its
two initial representatives and of its Co-Chairperson.
9.3 The Steering Committee will meet within fifteen (15) days
after the Effective Date and at least once each Calendar
Quarter thereafter or at any other frequency agreed to by the
Steering Committee. The time and location of the initial
meeting shall be determined by the Co-Chairpersons, and the
time and location of subsequent meetings shall be established
by the Steering Committee. Meetings may be held in person or
by means of a telephone or video conference. The
Co-Chairpersons shall send notices and agendas for each
meeting to all of the members of the Steering Committee. Each
party will alternately be responsible for preparing and
delivering to the members of the Steering Committee, within
thirty (30) days after the date of each meeting, minutes of
such meeting setting forth all decisions of the Steering
Committee and including a report on the progress of work
performed.
9.4 Within thirty (30) days after the Effective Date, the Steering
Committee will prepare a Clinical Trials Plan for the Clinical
Trials of, and other development work, if any, for
DMI-7958-Product(s) for the Field within the Territory. The
Clinical Trials Plan will be revised and amended at least
annually.
9.5 Within ninety (90) days after the Effective Date, the Steering
Committee will prepare a Commercialization Plan for the
commercialization of DMI-7958-Product(s) for the Field within
the Territory. The Commercialization Plan will be revised and
amended at least annually.
17
9.6 Within ninety (90) days after the Effective Date, the Steering
Committee will prepare a Research And Development Plan for the
Additional Research And Development. The Research And
Development Plan will be revised and amended at least
annually.
9.7 The objective of the Steering Committee will be to reach
agreement by consensus on all matters. In the event that the
representatives do not reach consensus with respect to any
matter, a vote will be taken. Each member will have one vote.
All major decisions about the development and
commercialization of the Product(s) shall be made by majority
vote. In the event of a tie vote, the matter will be resolved
as provided in Article 24.
Article 10. Regulatory Filings
10.1 Prior to submitting any IND or other Drug Approval
Application, the parties shall consult with each other
regarding the scope and general content of such IND or Drug
Approval Application. Each party shall have the right to
review and comment on all INDs and Drug Approval Applications
prior to filing in accordance with specific time lines or
other arrangements agreed upon by the Steering Committee, and
such comments will be given all due consideration by the other
party.
10.2 Regulatory documents for each filing will be owned and
centralized and held at the offices of the party primarily
responsible for such filing, but will be made available to the
other party for use in accordance with this Agreement. No
party shall have the right to transfer title or otherwise
attempt in any manner to dispose of any INDs or Drug Approval
Applications or otherwise impair the other party's rights in
such INDs or Drug Approval Applications without the written
consent of the other party.
10.3 Each party, at its own expense, or initiation shall have the
right to obtain a copy of any regulatory filing, including
INDs and other Drug Approval Applications, from the owner, and
each party shall have the right to cross reference in any
regulatory document, the INDs and other Drug Approval
Applications of the other party for the purpose of conducting
Clinical Trials and seeking Regulatory Approvals.
10.4 The party primarily responsible for conducting a Clinical
Trial shall be primarily responsible for conducting meetings
and discussions and routine telephone communications with the
regulatory authority related to the Clinical Trial. All
parties may participate in all substantive discussions and
meetings with regulatory authorities. The party not primarily
responsible for conducting the Clinical Trial will send only a
reasonable number of representatives to any such discussion or
meeting.
18
10.5 The parties shall cooperate in good faith with respect to the
conduct of any inspections by any regulatory authority of a
party's site and facilities related to a Product, and each
party shall, at a minimum, be given the opportunity to attend
the summary, or wrap up, meeting related to the Product with
such regulatory authority at the conclusion of such site
inspection. The party whose site or facilities are being
inspected shall consider the attendance of the other party at
the inspections, but shall not be obligated to accept the
other party's attendance at such inspections if such
attendance would result in the disclosure to other party of
confidential information or trade secrets unrelated to
Product(s).
10.6 To the extent either party receives written or material oral
communications from a regulatory authority relating to a
Product or a Clinical Trial, the party receiving such
communication shall notify the other party and provide a copy
of any written communication as soon as reasonably
practicable.
10.7 The party primarily responsible for a Clinical Trial shall be
responsible for the prompt reporting of adverse reactions (as
defined by the World Health Organization) directly or
indirectly attributable to the use of the Product being used
in the Clinical Trial to the regulatory authority in
compliance with applicable law. After Regulatory Approval of a
Product, ENHANCE shall be responsible for the prompt reporting
of any adverse reactions directly or indirectly attributable
to the use of the Product to the appropriate regulatory
authorities in compliance with applicable law. Each party
shall immediately inform the other party of any adverse drug
reactions of which it becomes aware.
Article 11. Intellectual Property
11.1 As of the Effective Date, DMI is the sole and exclusive owner
of Intellectual Property covering or relating to the use of
DMI 7958, Tramadol, derivatives of Tramadol, isomers of
Tramadol and the Tramadol derivatives, and
pharmaceutically-acceptable acid addition salts and other
pharmaceutically-acceptable forms of any of the foregoing, to
delay ejaculation, including the patent applications listed in
Appendix A attached hereto. DMI shall remain the owner of this
Intellectual Property.
11.2 DMI shall also be the sole and exclusive owner of all
Intellectual Property concerning or relating to delay of
ejaculation and/or Product(s) which is conceived, created,
discovered, produced or developed by either party and/or by
assignees, licensees, sublicensees, consultants and/or
Third-Party contractors of either party or both parties during
the term of this Agreement, including all Intellectual
Property which is conceived, created, discovered,
19
produced or developed as a result of the Additional Research
And Development.
11.3 ENHANCE agrees to make prompt written disclosure to DMI of all
Intellectual Property concerning or relating to delay of
ejaculation and/or Product(s) which is conceived, created,
discovered, produced or developed by it, its sublicensees, its
consultants and/or its Third-Party contractors during the term
of this Agreement.
11.4 ENHANCE agrees to require its sublicensees, consultants and
Third-Party contractors to assign to ENHANCE all Intellectual
Property concerning or relating to delay of ejaculation and/or
Product(s) which is conceived, created, discovered, produced
or developed by any of them during the term of the sublicense,
consultant's agreement or Third-Party contract
11.5 ENHANCE agrees to, and does hereby, assign to DMI all of its
right, title and interest in and to all Intellectual Property
concerning or relating to delay of ejaculation and/or
Product(s) which is conceived, created, discovered, produced
or developed by it, its sublicensees, consultants and/or its
Third-Party contractors during the term of this Agreement.
11.6 ENHANCE will assist DMI in every proper way to obtain,
maintain and enforce United States and foreign proprietary
rights relating to any and all Intellectual Property now or
hereafter owned by DMI which concerns or relates to delay of
ejaculation and/or Product(s). To that end, ENHANCE will:
(a) Execute, verify and deliver such documents and
perform such other acts (including providing evidence
and witnesses within its control and appearing as a
witness) as DMI may reasonably request for use in
applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such proprietary rights.
(b) Where the assignment of proprietary rights to DMI is
provided for herein, execute, verify and deliver
assignments of such proprietary rights to DMI or its
designee.
(c) In the event DMI is unable for any reason, after
reasonable effort, to secure ENHANCE's signature on
any document needed in connection with the actions
specified in this Article 11, ENHANCE hereby
irrevocably designates and appoints DMI and its duly
authorized officers and agents as its agent and
attorney-in-fact, to act for and on ENHANCE's behalf
to execute, verify and file any such documents and to
do all other lawfully permitted acts to further the
purposes of this Article 11 with the same legal force
and effect as if executed by ENHANCE.
20
11.7 DMI will take all necessary steps to obtain and maintain
protection for all Intellectual Property now or hereafter
owned by it, and DMI shall be responsible for, and shall bear
all the costs of, obtaining and maintaining protection for its
Intellectual Property.
11.8 DMI shall keep ENHANCE advised as to all developments and
shall provide ENHANCE with all materials sufficiently in
advance to allow ENHANCE to review and provide input on any
proposed filing prior to its filing, which input shall be
considered in good faith and included where reasonably
possible by DMI. Notwithstanding the foregoing, DMI shall have
the right to take such actions as are reasonably necessary, in
its good faith judgment, to preserve all rights in its
Intellectual Property, and DMI shall notify ENHANCE as soon as
possible after taking any such action.
11.9 DMI will abandon Intellectual Property or any rights therein,
only after notice to ENHANCE at least thirty (30) days in
advance and only after giving ENHANCE an opportunity to assume
responsibility for obtaining and/or maintaining the
Intellectual Property protection proposed to be abandoned.
Article 12. License Grant to ENHANCE
12.1 DMI hereby grants to ENHANCE an exclusive license of all
Intellectual Property now or hereafter owned by it concerning
or relating to delay of ejaculation and/or Product(s) to make,
have made, use, sell, offer for sale, market, commercialize,
import and export Product(s) to the extent necessary for
ENHANCE to perform its responsibilities and obligations in
connection with the development and commercialization of
Product(s) for the Field within the Territory pursuant to the
terms of this Agreement. The licensed Intellectual Property
includes, without limitation, the patent applications listed
in Appendix A attached hereto, all divisions, continuations,
continuations-in-part, and substitutions thereof, any national
patent applications corresponding to the PCT application
listed in Appendix A, any patents issuing from any of these
patent applications anywhere in the world, any extensions or
reissues of such patents, and the inventions described in any
and all such patent applications and patents.
12.2 ENHANCE shall have the right to assign its rights to Third
Parties with the approval of DMI in all or part of the
Territory, provided the assignee agrees to assume all of
ENHANCE's obligations and responsibilities under this
Agreement in all, or the assignee's part, of the Territory.
Article 13. Retention Of Rights By DMI
21
13.1 DMI retains all rights in its Intellectual Property not
expressly granted to ENHANCE in Article 12.
13.2 In addition, DMI shall have the right, but not the
responsibility or obligation, to market Product(s) for the
Field within the Territory ("Co-Marketing Rights"). These
Co-Marketing Rights shall include the right to make, have
made, use, sell, offer for sale, commercialize, import and
export Product(s) to the extent necessary for DMI to be able
to market Product(s) for the Field within the Territory.
13.3 DMI shall have the right to assign its rights to Third Parties
with the approval of ENHANCE in all or part of the Territory,
provided the assignee agrees to assume all of DMI's
obligations and responsibilities under this Agreement in all,
or the assignee's part, of the Territory.
Article 14. Licenses And Sublicenses Of Third Parties
14.1 DMI shall have the right to license its rights to Third
Parties in all or part of the Territory with the approval of
ENHANCE.
14.2 ENHANCE shall have the right to sublicense its rights to Third
Parties in all or part of the Territory with the approval of
DMI.
14.3 If the parties desire that a single licensee/sublicensee be
responsible for the development and commercialization of
Product(s) for the Field in all or a part of the Territory,
the parties will jointly select the licensee/sublicensee. DMI
agrees to license its rights, and ENHANCE agrees to sublicense
its rights, to any such licensee/sublicensee as necessary.
Article 15. Third-Party Contractors
15.1 The parties may individually or jointly enter into written
contracts with Third Parties to perform activities required of
them under the terms of this Agreement or in furtherance of
the goals of this Agreement, including, without limitation,
Third-Party manufacturers, consultants, clinical investigators
and contract research organizations.
15.2 Any such Third-Party contractors must agree to adhere to all
applicable laws, regulatory guidelines and requirements, and
quality standards for the research, development, manufacture,
Preclinical Studies and/or Clinical Trials it performs and
must agree to use only qualified personnel to perform the work
which is the subject of the Third-Party contract.
22
15.3 All Third-Party contractors must also agree to be bound by
confidentiality and nonuse provisions which are substantially
the same as those contained in Article 16.
15.4 All Third-Party contractors must further agree to assign any
Intellectual Property conceived, created, discovered, produced
or developed as a result of the Third Party's performance
under the contract to the party with whom the contract is
made.
15.5 All Third-Party contracts for the manufacture and/or supply of
Product(s) or for the performance of Preclinical Studies or
Clinical Trials must be approved in advance by the Steering
Committee.
15.6 Third-Party contracts are distinguished herein from licenses
and sublicenses because no payments are made by the
Third-Party contractors to DMI and/or ENHANCE pursuant to the
terms of a Third-Party contract.
Article 16. Confidentiality
16.1 Each party agrees to treat and maintain any of the other
party's Proprietary Information which is in its possession,
which comes into its possession during the term of this
Agreement, or which is conceived, created, discovered,
produced, developed or obtained by the other party as a result
of performance under this Agreement, in confidence, and agrees
not to disclose any such Proprietary Information to anyone and
to not use any such Proprietary Information, except for the
purposes of performing its obligations under this Agreement.
Notwithstanding the foregoing, each party may disclose the
other party's Proprietary Information to its employees,
consultants, agents, and Third-Party contractors, or as is
deemed necessary for any purpose set forth in, or relating to,
this Agreement, provided that any recipients are bound by like
duties of confidentiality, nondisclosure and nonuse as
contained herein. Further, each party may disclose and use the
other party's Proprietary Information with the written consent
of the other party.
16.2 As of the Effective Date, this Agreement supersedes the
confidentiality agreement between the parties dated November
13, 2002, but only insofar as such confidentiality agreement
relates to the subject matter of this Agreement. All
Proprietary Information exchanged between the parties under
such confidentiality agreement relating to the subject matter
of this Agreement shall be deemed Proprietary Information
hereunder and shall be subject to the terms of this Agreement.
23
16.3 Notwithstanding the foregoing, each party may disclose the
existence and content of this Agreement and other agreements
between the parties to advisors, agents, consultants,
investors, and Third-Party contactors who agree to be bound by
like duties of confidentiality, nondisclosure and nonuse as
contained herein.
16.4 Nothing contained herein shall in any way restrict or impair
the right of either party to use, disclose, or otherwise deal
with the other party's Proprietary Information which the party
claiming waiver can demonstrate by written records:
(a) is or becomes generally known to the public through
no fault of the party;
(b) was known to it prior to the time of disclosure by
the other party;
(c) was independently developed by it;
(d) was lawfully obtained without restrictions from a
Third Party who has authority to make such
disclosure; or
(e) which the party is required to disclose pursuant to
applicable law or pursuant to a requirement,
subpoena, order or other request of a court, agency
or other governmental entity, including required
disclosures to a governmental entity or agency in
connection with seeking any governmental or
regulatory approval; in such case, the party shall
notify the other party prior to such disclosure so as
to give the other party an opportunity to protest the
disclosure.
Article 17. Publicity, Publications And Presentations
17.1 The parties agree that the public announcement of the
execution of this Agreement shall be in the form of a press
release to be agreed on by the parties before or on the
Effective Date and, thereafter, each party shall be entitled
to make or publish any public statement consistent with the
contents thereof. Thereafter, the parties will jointly discuss
and agree on any statement to the public regarding this
Agreement, the transactions contemplated herein, or clinical,
regulatory and commercial developments relating to the
Product(s), subject in each case to disclosure otherwise
required by law or regulation as determined in good faith by
each party. When a party wishes to make a public statement, it
will notify the other party and give the other party at least
three (3) business days to review and comment on such
statement, and the parties will discuss and agree on the final
content of the statement. If a party is not legally able to
give notice as required by the previous sentence, it will
furnish the other party with a copy of its disclosure as soon
as practicable after the making thereof. The parties
acknowledge
24
the importance of supporting each other's efforts to publicly
disclose results and significant developments regarding
Product(s). The principles to be observed in such public
disclosures will be accuracy, the confidentiality requirements
of Article 16, compliance with regulatory agency regulations
and guidelines, the advantage a competitor may gain from any
public statements under this Subsection 17.1, and the
standards and customs in the pharmaceutical industry for such
disclosures by companies comparable to DMI and ENHANCE.
17.2 DMI and ENHANCE each acknowledge the other party's interest in
publishing certain of the results of the work performed
pursuant to the terms of this Agreement and in making
presentations at scientific meetings to (i) obtain recognition
within the scientific community, (ii) advance the state of
scientific knowledge, and (iii) promote the Product(s). Both
parties also recognize their mutual interest in obtaining
valid patent rights for any inventions concerning or relating
to delay of ejaculation and/or Product(s) and in protecting
the confidentiality of their Proprietary Information.
(a) Consequently, if either party desires to publish or
present the results of the work performed pursuant to
the terms of this Agreement, the
publishing/presenting party shall provide the
nonpublishing/nonpresenting party and the Steering
Committee with a draft manuscript of the proposed
publication or presentation.
(b) The nonpublishing/nonpresenting party and the
Steering Committee shall have thirty (30) days from
receipt of the draft manuscript to review it.
(c) The publishing/presenting party agrees to delete any
information identified by the
nonpublishing/nonpresenting party as its Proprietary
Information upon written request of the
nonpublishing/nonpresenting party received within the
thirty-day review period.
(d) The publishing/presenting party also agrees to delete
any information identified by the Steering Committee
as Proprietary Information, the deletion of which is
necessary for the protection of the commercial
interests of the parties, upon written request of the
Steering Committee received within the thirty-day
review period.
(e) If the Steering Committee objects in writing within
the thirty-day review period to the publication or
presentation as being inconsistent with the
publication strategy established by the Steering
Committee pursuant to Section 9.1, then the
publishing/presenting party and the Steering
Committee will discuss in good faith possible
modifications of,
25
or delays in, the publication or presentation. The
publishing/presenting party shall have the right to
proceed with the publication or presentation if an
agreement with the Steering Committee about the
proposed modifications or delays cannot be reached
within thirty days after receipt of the written
objection.
(f) Finally, in the event that the
nonpublishing/nonpresenting party or the Steering
Committee determines that the manuscript describes
patentable subject matter, the
nonpublishing/nonpresenting party and/or the Steering
Committee shall so notify the publishing/presenting
party in writing within the thirty-day review period.
Upon receipt of this notification, the
publishing/presenting party will delay publication of
the manuscript or the presentation of the information
contained in the manuscript for a period of ninety
(90) days from the date of receipt of the written
notice.
Article 18. Representations, Warranties And Disclaimer
18.1 DMI represents and warrants that it has the right and
authority to enter into, and perform its obligations under,
this Agreement and that there are no outstanding grants,
licenses, encumbrances or agreements, either written, oral or
implied, inconsistent with this Agreement, or which this
Agreement, or performance hereunder, would violate, breach,
conflict with, or cause a default.
18.2 DMI represents and warrants that it is the sole and exclusive
owner of the patent applications listed in Appendix A.
18.3 DMI further represents and warrants that it has the full right
and authority to grant ENHANCE all of the rights granted
hereunder.
18.4 ENHANCE represents and warrants that it has the right and
authority to enter into, and perform its obligations under,
this Agreement and that there are no outstanding grants,
licenses, encumbrances or agreements, either written, oral or
implied, inconsistent with this Agreement, or which this
Agreement, or performance hereunder, would violate, breach,
conflict with, or cause a default.
18.5 EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 18, DMI DOES NOT
MAKE ANY EXPRESS OR IMPLIED WARRANTIES, STATUTORY OR
OTHERWISE, CONCERNING THE INTELLECTUAL PROPERTY OR PROPRIETARY
INFORMATION IT CURRENTLY OWNS AND WHICH IT IS LICENSING TO
ENHANCE HEREUNDER. SPECIFICALLY, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, DMI MAKES NO EXPRESS OR IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS (FOR A PARTICULAR PURPOSE
OR OTHERWISE), QUALITY OR USEFULNESS OF ITS INTELLECTUAL
PROPERTY OR PROPRIETARY INFORMATION. DMI DOES NOT WARRANT THE
ACCURACY OF ANY
26
INFORMATION INCLUDED WITHIN THE INTELLECTUAL PROPERTY OR
PROPRIETARY INFORMATION OR THAT ANY PATENTS ISSUING FROM ITS
PATENT APPLICATIONS WILL BE FREE FROM CLAIMS OF INFRINGEMENT
BY THIRD PARTIES OR ANY OTHER RIGHTS OF THIRD PARTIES. UNDER
NO CIRCUMSTANCE 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 THE OTHER PARTY OR ANY THIRD PARTY.
Article 19. Defense Of Third-Party Claims
19.1 With respect to claims or suits by Third Parties resulting
from, or arising out of, the performance of this Agreement,
the parties hereto agree as follows:
(a) Each party shall have the right to control the
defense or settlement of any claim or suit that may
be brought against it with counsel of its own
choosing and at its own expense.
(b) Each party agrees to inform the other party as soon
as practicable of any such claim or suit and to keep
the other party informed about the claim or suit
until resolved.
(c) Each party agrees to cooperate with the other party
to the extent necessary with respect to defending
against any such claim or suit. All of the
cooperating party's expenses shall be paid for, or
reimbursed by, the other party.
(d) Each party agrees that it will not settle any claim
or suit brought against it without the input of the
other party, which input will be considered in good
faith.
19.2 Notwithstanding the foregoing, a party seeking indemnification
from the other party must proceed as provided in the
indemnification provisions of Article 21.
Article 20. Infringement Or Misappropriation By Third Parties
20.1 Each party will inform the other as soon as possible upon
learning of any infringement or misappropriation by any Third
Party of any Intellectual Property currently or hereafter
owned by DMI.
27
20.2 DMI shall have the first option to proceed against such Third
Party. ENHANCE agrees that it will permit the use of its name
in any litigation suit, will sign all necessary papers, will
take all rightful oaths, and will do whatever else may be
necessary to assist DMI in proceeding against the Third Party.
All costs, expenses and disbursements of proceeding against
such Third Party shall be borne by DMI, including
reimbursement of expenses incurred by ENHANCE as a result of
assisting DMI in proceeding against the Third Party. DMI shall
keep ENHANCE fully informed of all such proceedings. DMI shall
not settle any such proceeding without the input of ENHANCE,
which input will be considered in good faith. In the event
that DMI is successful in proceeding against the Third Party,
all monies recovered by DMI for infringement or
misappropriation by way of settlement or order of court shall
be treated as follows. If it has not already done so, DMI
shall deduct and reimburse ENHANCE the attorneys fees,
disbursements and costs expended by ENHANCE in the conduct of
proceeding against the Third Party. Next, DMI shall deduct and
retain the attorneys fees, disbursements and costs expended by
DMI in the conduct of proceeding against the Third Party. Any
monies remaining after such deduction shall be divided as
follows: 75% to DMI and 25% to ENHANCE.
20.3 In the event that DMI elects not to proceed, ENHANCE shall
have the right to proceed against the Third Party. DMI agrees
that it will permit the use of its name in any litigation
suit, will sign all necessary papers, will take all rightful
oaths, and will do whatever else may be necessary to assist
ENHANCE in proceeding against the Third Party. All costs,
expenses and disbursements of proceeding against such Third
Party shall be borne by ENHANCE, including reimbursement of
expenses incurred by DMI as a result of assisting ENHANCE in
proceeding against the Third Party. ENHANCE shall keep DMI
fully informed of all such proceedings. ENHANCE shall not
settle any such proceeding without the input of DMI, which
input will be considered in good faith. In the event that
ENHANCE is successful in proceeding against the Third Party,
all monies recovered by ENHANCE for infringement or
misappropriation by way of settlement or order of court shall
be treated as follows. If it has not already done so, ENHANCE
shall deduct and reimburse DMI the attorneys fees,
disbursements and costs expended by DMI in the conduct of
proceeding against the Third Party. Next, ENHANCE shall deduct
and retain the attorneys fees, disbursements and costs
expended by ENHANCE in the conduct of proceeding against the
Third Party. Any monies remaining after such deduction shall
be divided as follows: 75% to ENHANCE and 25% to DMI.
Article 21. Indemnification
28
21.1 ENHANCE hereby agrees to indemnify, defend and hold harmless
DMI, its officers, directors, employees, consultants and
agents from and against any and all liabilities, claims,
demands, actions, suits, damages, costs, expenses (including
reasonable attorneys' fees), or judgments (collectively
"Damages") arising out of, based upon, resulting from, or
presented or brought on account of, a material breach of this
Agreement by ENHANCE, except to the extent that such Damages
arise out of, are based upon or result from (i) a material
breach of the Agreement by DMI or (ii) the negligence or
willful misconduct of DMI.
21.2 DMI hereby agrees to indemnify, defend and hold harmless
ENHANCE, its officers, directors, employees, consultants and
agents, from and against any liabilities, claims, demands,
actions, suits, damages, costs, expenses (including reasonable
attorneys' fees), or judgments (collectively "Damages")
arising out of, based upon, resulting from, or presented or
brought on account of, a material breach of this Agreement by
DMI, except to the extent that such Damages arise out of, are
based upon or result from (i) a material breach of the
Agreement by ENHANCE or (ii) the negligence or willful
misconduct of ENHANCE.
21.3 ENHANCE hereby agrees to indemnify, defend and hold harmless
DMI, its officers, directors, employees, consultants and
agents, from and against any liabilities, claims, demands,
suits, actions, damages, costs, expense (including reasonable
attorneys' fees), or judgments (collectively "Damages")
arising out of, based upon, resulting from, or presented or
brought on account of, any injuries, losses or damages
sustained by any person or property in consequence of any act
or omission of ENHANCE, except to the extent that such Damages
arise out of, are based upon or result from (i) a material
breach of the Agreement by DMI or (ii) the negligence or
willful misconduct of DMI.
21.4 DMI hereby agrees to indemnify, defend and hold harmless
ENHANCE, its officers, directors, employees, consultants and
agents, from and against any liabilities, claims, demands,
suits, actions, damages, costs, expense (including reasonable
attorneys' fees), or judgments (collectively "Damages")
arising out of, based upon, resulting from, or presented or
brought on account of, any injuries, losses or damages
sustained by any person or property in consequence of any act
or omission of DMI, except to the extent that such Damages
arise out of, are based upon or result from (i) a material
breach of the Agreement by ENHANCE or (ii) the negligence or
willful misconduct of ENHANCE.
21.5 A party entitled to indemnification under this Article 21 (the
"Indemnified Party") shall promptly notify the party
potentially responsible for such indemnification (the
"Indemnifying Party") upon becoming aware of any claim or
claims asserted or threatened against such Indemnified Party
which
29
could give rise to a right of indemnification under this
Agreement; provided, however, that the failure to give such
notice shall not relieve the Indemnifying Party of its
indemnity obligation hereunder, except to the extent that such
failure substantially prejudices its rights hereunder.
21.6 The Indemnifying Party shall have the right to defend, at its
sole cost and expense, such claim by all appropriate
proceedings, which proceedings shall be prosecuted diligently
by the Indemnifying Party to a final conclusion or settled at
the discretion of the Indemnifying Party; provided, however,
that the Indemnifying Party may not enter into any compromise
or settlement unless the Indemnified Party consents thereto,
which consent shall not be unreasonably withheld, conditioned
or delayed.
21.7 The Indemnified Party may participate in, but not control, the
defense or settlement of any claim controlled by the
Indemnifying Party pursuant to this Article 21 and shall bear
its own costs and expenses with respect to such participation;
provided, however, that the Indemnifying Party shall bear such
costs and expenses if counsel for the Indemnifying Party shall
have reasonably determined that such counsel may not properly
represent both the Indemnifying Party and the Indemnified
Party.
21.8 If the Indemnifying Party fails to notify the Indemnified
Party within twenty (20) days after receipt of notice of a
claim in accordance with Section 21.5 hereof that it elects to
defend the Indemnified Party pursuant to this Article 21, or
if the Indemnifying Party elects to defend the Indemnified
Party but fails to prosecute or settle the claim diligently
and promptly, then the Indemnified Party shall have the right
to defend, at the sole cost and expense of the Indemnifying
Party, the claim by all appropriate proceedings, which
proceedings shall be promptly and vigorously prosecuted by the
Indemnified Party to a final conclusion or settlement;
provided, however, that in no event shall the Indemnifying
Party be required to indemnify the Indemnified Party for any
amount paid or payable by the Indemnified Party in the
settlement of any such claim agreed to without the consent of
the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
Article 22. Insurance
22.1 DMI and ENHANCE will obtain and maintain (i) general liability
insurance in comprehensive form in an appropriate amount,
which shall cover no less than the following risks: bodily
injury, personal injury, liability, property damage and
products liability, and (ii) such other types of insurance
considered to be reasonable and prudent given the types of
risks involved in research, development, pre-commercialization
and commercialization of pharmaceuticals, and the liability
limits on any such insurance shall be reasonable for the risks
involved. Each party shall obtain and maintain such
30
coverage with Third Party commercial insurance carriers rated
A or better. Each party shall name the other party as an
additional insured on the above-described policies and shall
provide the other party with copies of the endorsement to such
insurance policies naming the other party as an additional
insured. Each party shall instruct its insurance carriers
providing such coverage to notify the other party in writing
of any material change in coverage provided by such policies.
Article 23. Term And Termination
23.1 Unless terminated sooner as provided below, this Agreement
will continue in full force and effect until the later of (i)
such time after the First Commercial Sale when no Sales of any
Product(s) for the Field have been made anywhere in the
Territory for a period of one (1) year by either party or by
any licensees, sublicensees and/or assignees of one or both of
the parties, (ii) one (1) year after the termination of all
licenses and sublicenses, or (iii) fifty (50) years from the
Effective Date.
23.2 The parties may at any time terminate this Agreement, in part
or in its entirety, by mutual written agreement.
23.3 In the event of a breach or default in respect of any of the
terms of this Agreement by either party, the other party shall
give notice in writing, specifying in detail the nature of the
breach or default. If the alleged breach or default is not
cured within sixty (60) days after receipt of this notice, the
party giving notice shall have the right to immediately
terminate this Agreement by giving a second written notice to
the breaching party.
23.4 In the event of either party experiencing financial
difficulties, that party shall immediately notify the other
party to that effect. The party so notified shall have the
right to terminate this Agreement within thirty (30) days of
said notification. If the party having the right to terminate
decides not to do so, then the parties agree to renegotiate in
good faith a reduction in the share of the Revenues to be paid
to the party experiencing financial difficulties if that party
is unable to fully perform its obligations hereunder. A party
shall be considered as having financial difficulties by:
(a) that party's commencement of a voluntary case under
any applicable bankruptcy code or statute, or by its
authorizing, by appropriate proceedings, the
commencement of such a voluntary case;
(b) that party's failing to receive dismissal of any
involuntary case under any applicable bankruptcy code
or statute (wherein the other party is not a party to
the case) within sixty (60) days after initiation of
such action or petition;
31
(c) that party's seeking relief as a debtor under any
applicable law of any jurisdiction relating to the
liquidation or reorganization of debtors or to the
modification or alteration of the rights of
creditors, or by consenting to or acquiescing in such
relief;
(d) the entry of an order by a court of competent
jurisdiction finding it to be bankrupt or insolvent,
or ordering or approving its liquidation,
reorganization, or any modification or alteration of
the rights of its creditors, or assuming custody of,
or appointing a receiver or other custodian for, all
or a substantial part of its property or assets; or
(e) that party's making an assignment for the benefit of,
or entering into a composition with, its creditors,
or appointing or consenting to the appointment of a
receiver or other custodian for all or a substantial
part of its property.
23.5 Upon termination of this Agreement for any reason:
(a) All rights and licenses granted to ENHANCE hereunder
shall revert to DMI, except that ENHANCE shall have
the right to sell any Product(s) in inventory as
provided in Subsection (b) of this Section 23.5.
(b) ENHANCE shall cease all activities with respect to
the Product(s), including all making (by ENHANCE
and/or by Third Parties for ENHANCE), using, selling,
offering for sale, marketing, commercializing,
importing and exporting of Product(s).
Notwithstanding the foregoing, ENHANCE shall have the
right to sell any Product(s) in inventory, provided
ENHANCE makes the payments and reports required by
Article 8.
(c) If requested by DMI, ENHANCE shall (i) remain
responsible to supply the amounts of Product(s) it
was obligated to supply at the time of such
termination for a reasonable period of time, not to
exceed six (6) months from the date of termination,
to allow DMI to find an alternate source of supply,
(ii) make its personnel and other resources
reasonably available to DMI as necessary for a
reasonable period of time, not to exceed six (6)
months from the date of termination, to effect an
orderly transition of responsibilities, and (iii)
provide and assign to DMI all clinical data, INDs,
Drug Approval Applications, Regulatory Approvals, and
all other regulatory documentation covering the
Product(s) that ENHANCE may have developed in its
activities under this Agreement. If termination of
the Agreement occurred because of a breach by
ENHANCE, then ENHANCE will be responsible for all of
the costs of performing these obligations. If
termination of the Agreement occurred because of a
32
breach by DMI, then DMI will be responsible for all
of the costs of performing these obligations.
Otherwise, the parties will share the costs.
(d) ENHANCE's sublicense(s) of its rights pursuant to
Sections 14.2 and 14.3 above (referred to herein as
"Article 14 Sublicense(s)") shall be transferred to
DMI. The Article 14 Sublicense(s) will remain in full
force and effect so long as the sublicensee(s)
perform(s) the obligations of the Article 14
Sublicense(s), and DMI shall have all of the rights
and benefits of the Article 14 Sublicense(s)
(including the right to receive 100% of all payments
due under the Article 14 Sublicense(s)) and shall be
responsible for performing all of the obligations
required of ENHANCE by the Article 14 Sublicense(s).
ENHANCE will execute such documents as may be
requested by DMI to attest to the transfer to DMI of
all of its Article 14 Sublicense(s).
23.6 Upon termination of this Agreement for any reason, nothing
herein shall be construed to release either party from any
obligation matured prior to the effective date of such
termination, and neither party waives any rights it may have
to remedies arising out of the termination or breach of
surviving obligations.
Article 24. Dispute Resolution
24.1 In the event of any controversy or claim arising out of or
relating to any provision of this Agreement or the
collaborative effort contemplated hereby, the parties shall
initially refer such dispute to the Steering Committee.
24.2 Failing resolution by the Steering Committee of any
controversy or claim within thirty (30) days after such
referral, the matter shall be referred to the Chief Executive
Officers of DMI BioSciences, Inc. and Enhance Lifesciences,
Inc. Any controversy or claim arising in the Steering
Committee or any matter about which the Steering Committee is
deadlocked shall also be referred to the Chief Executive
Officers of DMI BioSciences, Inc. and Enhance Lifesciences,
Inc.
24.3 The Chief Executive Officers of DMI BioSciences, Inc. and
Enhance Lifesciences, Inc. shall, as soon as practicable,
attempt in good faith to resolve any controversy or claim
referred to them. If such controversy or claim is not resolved
within thirty (30) days after referral to the Chief Executive
Officers of DMI BioSciences, Inc. and Enhance Lifesciences,
Inc., either party shall be free to notify the Chief Executive
Officers of DMI BioSciences, Inc. and Enhance Lifesciences,
Inc. that it wishes the matter to be referred to non-binding
mediation.
24.4 The non-binding mediation will proceed as follows. The
controversy or claim shall be presented to a single mediator.
The single mediator shall be chosen by the Chief Executive
Officers of DMI BioSciences, Inc. and Enhance
33
Lifesciences, Inc. within ten (10) days after receiving the
notification specified in Subsection 24.3. The single mediator
shall be an individual with experience and qualifications
suitable to the controversy or claim in dispute. If the Chief
Executive Officers of DMI BioSciences, Inc. and Enhance
Lifesciences, Inc. cannot agree on a single mediator, they
shall each appoint a mediator within ten (10) days after
receiving the notification specified in Subsection 24.3, and
these two mediators shall chose the single mediator within ten
(10) days after being appointed. The single mediator will
conduct a hearing within thirty (30) days after being chosen.
The hearing will be held at a time and place agreed to between
the parties and the mediator and will last no longer than
eight (8) hours. At the hearing, each party will each have no
more than four (4) hours to present evidence, witnesses and
arguments, to present a proposed remedy, and to answer the
questions of the mediator. Copies of all documents to be
relied on by a party shall be provided to the mediator and the
other party at least three (3) business days prior to the
hearing. The mediator will notify the parties of his/her
non-binding decision no later than three (3) business days
after the hearing.
24.5 If either party elects not to accept the non-binding decision
of the mediator, that party shall be free to initiate legal
proceedings in a court of competent jurisdiction in New York.
24.6 This Agreement shall be governed by, and its provisions
construed and enforced in accordance with, the law of the
State of New York. Both parties agree to submit to the
jurisdiction of all New York courts, including federal courts,
and to waive any and all rights under the law of any
jurisdiction to object on any basis to jurisdiction or venue
within New York.
Article 25. Miscellaneous
25.1 All payments, notices, reports, exchanges of information and
other communications between the parties required by this
Agreement shall be sent to the addresses set out below, or to
such other addresses as may be designated by one party to the
other by notice pursuant hereto, by (i) prepaid, certified air
mail (which shall be deemed received by the other party on the
fifth business day following deposit in the mails), (ii)
facsimile transmission or other electronic means of
communication (which shall be deemed received when
transmitted), with confirmation by first class letter, postage
prepaid, or (iii) an express courier service, such as FedEx,
DHL, Airborne or similar delivery service, with capabilities
of tracking packages and/or letter delivery and providing
verification of receipt (in the even of the use of such a
service, receipt shall be on the date actually received, as
verified by such delivery service).
34
If to DMI:
DMI BioSciences Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to ENHANCE:
Enhance Lifesciences, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ Every
25.2 No party to this Agreement shall be liable for failure to
perform on its part any provision or part of this Agreement
when such failure is due to fire, flood, strike or other
industrial disturbance, unavoidable accident, war, embargo,
inability to obtain materials, transportation controls,
governmental actions, or other causes beyond the control of
such party, but only for the period of delay imposed by such
cause.
25.3 For purposes of this Agreement, "business day" means a day on
which the banks in the United States are generally open to
conduct their regular banking business.
25.4 Should any part or provision of this Agreement be held
unenforceable or in conflict with the law, the validity of the
remaining parts or provisions shall not be affected by such
holding.
25.5 The failure of either party to enforce, at any time and for
any period of time, a provision of this Agreement is not, and
shall not be construed to be, a waiver of any such provision
or of the right of such party to subsequently enforce each and
every such provision.
25.6 This Agreement constitutes the entire agreement and
understanding between the parties with respect to the subject
matter hereof, and supersedes and replaces all prior
negotiations, understandings and agreements, whether written
or oral, including (i) the confidentiality agreement between
the parties dated November 13, 2002, in part, as provided in
Subsection 16.2 hereof, (ii) the Term Sheet executed November
29, 2002, and (iii) the Letter Of Intent effective January 29,
2003, except that all payments due under the Letter Of Intent
will be paid within the times provided in the Letter of Intent
or within the times provided in this Agreement, whichever is
sooner.
35
25.7 All amendments and modifications of this Agreement shall be in
writing and executed by both parties.
25.8 Each party will obtain any government approval required in its
country of domicile to enable this Agreement to become
effective, or to enable any payment hereunder to be made, or
any other obligation hereunder to be observed or performed.
Each party will keep the other informed of progress in
obtaining any such governmental approval and will cooperate
with the other party in any such efforts.
25.9 This Agreement is made subject to any restrictions concerning
the export of materials and technology from the United States
which may be imposed upon or related to either party to this
Agreement from time to time by the Government of the United
States. Neither party will export, directly or indirectly, any
Proprietary Information, Intellectual Property, or Product(s)
or other materials utilizing such technology to any countries
for which the United States Government or any agency thereof
at the time of export requires an export license or other
governmental approval, without first obtaining the written
consent to do so from the Department of Commerce or other
agency of the United States Government when required by
applicable statute or regulation.
25.10 This Agreement may be assigned by either party only with the
prior written consent of the other party, which consent will
not be unreasonably withheld, and provided the assignee agrees
to perform fully all of the responsibilities and obligations
of the assignor hereunder. Any purported assignment in
contravention of this Section 25.10 shall, at the option of
the non-assigning party, be null and void and of no effect. No
assignment shall release either party from responsibility for
performance of any accrued obligation of such party hereunder.
25.11 This Agreement shall be binding upon and inure to the benefit
of the parties, their respective officers and directors, and
the permitted assignees of either party.
25.12 This Agreement may be executed in any number of counterparts,
each of which will be deemed to be an original, and all of
which together shall be deemed to be one and the same
instrument. Further, telefax signatures shall be binding.
25.14 Nothing contained herein shall be deemed to create an agency,
joint venture, amalgamation, partnership or similar
relationship between DMI and ENHANCE.
25.15 This Agreement does not confer, and shall not be construed as
conferring, on either party, or any other entity, any
proprietary right or license in or to the other party's
Proprietary Information or Intellectual Property, except as
expressly provided in this Agreement.
36
25.16 Ambiguities, if any, in this Agreement shall not be construed
against any party, irrespective of which party may be deemed
to have authored the ambiguous provision.
25.17 The Article headings are for convenience only and will not be
deemed to affect in any way the language of the provisions to
which they refer.
IN WITNESS HEREOF, each party hereto acknowledges that the
representative named below has authority to execute this Agreement on behalf of
the respective party to form a legally binding contract and has caused this
Agreement to be duly executed on its behalf.
DMI BioSciences, Inc. Enhance Lifesciences, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ Every
---------------------------- --------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇▇▇ Every
Title: President and CEO Title: Chief Executive Officer
Date: March 25, 2003 Date: March 25, 2003
37
APPENDIX A
------------------------ ------------------------------- -------------------
APPLICATION NUMBER TITLE AND INVENTOR COUNTRY AND FILING
DATE
------------------------ ------------------------------- -------------------
60/276,806 (provisional Method Of Delaying Ejaculation; USA; filed March
application) ▇▇▇▇▇ Bar-Or 16, 2001
10/098,826 (non- Method Of Delaying Ejaculation; USA; filed March
provisional application) ▇▇▇▇▇ Bar-Or 15, 2002
PCT/US02/07928 Method Of Delaying Ejaculation; PCT; filed March
▇▇▇▇▇ Bar-Or 15, 2002
------------------------ ------------------------------- --------------------
38
