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EXHIBIT 10.52
RESEARCH AND DEVELOPMENT AGREEMENT
This Research and Development Agreement (the "Agreement") is made as of
the thirtieth day of June, 1999 by and between Sabratek Corporation, a Delaware
corporation ("SBTK"), and Systle Corporation, a Delaware corporation ("Systle").
RECITALS
A. SBTK is engaged in the research, development and marketing of
diagnostic products and other products for a range of health conditions.
B. Systle desires to engage SBTK to perform, on behalf of Systle,
research and development and related activities in connection with the Systle
Programs (as defined below).
NOW, THEREFORE, in consideration of the various premises and
undertakings set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. DEFINITIONS.
For the purposes of this Agreement, the following terms shall have the
meanings set forth below:
1.1 "Acquired Product" shall mean any product for which SBTK has
exercised the Product Option.
1.2 "Affiliate" shall mean a corporation or any other entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the designated party. "Control"
shall mean ownership of shares to which are attached more than fifty percent
(50%) of the votes that may be cast for the election of directors in the case of
a corporation, and at least fifty percent (50%) of the interests in profits in
the case of a business entity other than a corporation. SBTK and Systle shall
not be considered Affiliates of each other.
1.3 "Confidential Information" shall mean all information received by
one party with respect to the research, intellectual property or business of the
other and it shall include, without limiting the generality of the foregoing,
all documents, data and other technical information, such as know-how, formulae,
processes, models, manufacturing techniques, research projects, information
management systems and software as well as information relating to the
management and financial affairs of such party, such as figures relating to
profits, markets, sales, business, marketing and development plans, client
lists, supplier lists and information of a similar nature.
1.4 "Developed Technology" shall mean Proprietary Rights that (a) are
first generated, conceived or reduced to practice, as the case may be, by SBTK,
a SBTK Affiliate or by any third party in the course of performing activities
undertaken pursuant to this Agreement or (b) are acquired from a third party by
SBTK or a SBTK Affiliate during the term of this Agreement for use, in whole or
in part, in the conduct of the Systle Programs.
1.5 "Development Assets" shall mean any clinical supplies, materials
and other tangible assets purchased, manufactured or developed for use in any
Systle Program pursuant to approved Work Plans.
1.6 "FDA" shall mean the United States Food and Drug Administration or
any successor agency whose clearance is necessary to market a Systle Product in
the United States.
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1.7 "Product Option" shall mean the purchase rights granted to SBTK or
a designated SBTK Affiliate pursuant to Section 6 of this Agreement.
1.8 "Proprietary Rights" shall mean data, inventions, information,
processes, know-how and trade secrets, patents or patent applications claiming
any of the foregoing, and copyrights, owned by, licensed to or controlled by a
person and which such person has the right to license or sublicense without the
consent of any third party and without incurring additional liability to any
third party.
1.9 "Research and Development Costs" shall mean the fully-burdened
cost of activities undertaken pursuant to this Agreement plus twelve percent
(12%) of such costs, including research expenses, general and administrative
expenses, capital asset costs, costs for licenses or acquisition of technology,
products or therapeutic agents from third parties for the Systle Programs and
costs of third-party collaborations or contract research undertaken for the
Systle Programs, determined in accordance with Exhibit B hereto.
1.10 "Systle Product" shall mean any product developed pursuant to any
of the Systle Programs.
1.11 "Systle Programs" shall mean any of the product development
programs listed in Exhibit A and any additional or modified development programs
recommended by SBTK and accepted by Systle for development pursuant to this
Agreement.
1.12 "Work Plan" shall mean a work plan for research and development
under a Systle Program, including cost estimates.
2. DEVELOPMENT SERVICES.
2.1 Engagement of SBTK. Systle hereby engages SBTK to perform or cause
to be performed research, development and related activities in connection with
the Systle Programs in accordance with the respective Work Plan accepted by
Systle pursuant to Section 2.3, and to undertake such other activities as the
parties may from time to time agree, and SBTK hereby accepts such engagement.
2.2 Product Development -- SBTK Obligations. SBTK shall diligently
perform or cause to be performed those activities necessary to execute the Work
Plans accepted by Systle pursuant to Section 2.3, as amended from time to time
upon the mutual agreement of SBTK and Systle. In connection therewith, SBTK
shall make available such of its scientific and other personnel, and shall take
such steps as it deems reasonably necessary in order to perform its obligations
in accordance with the terms hereof, but SBTK is not obligated to devote any
specific amount of time or resources to activities hereunder. SBTK shall have
full discretion to determine from time to time the allocation of resources of
SBTK (facilities, equipment and personnel) to be made available for activities
hereunder, and to determine from time to time the allocation of resources of
SBTK among such activities. Systle understands, acknowledges and agrees that
SBTK may devote substantial time and resources to research and development
activities for other persons and for its own account, and as a result, SBTK may
develop and commercialize, or have commercialized, products competitive with
Systle Products.
2.3 Work Plans; Mediation of Disputes.
(a) From time to time during the term of this Agreement, SBTK
shall propose Work Plans for the Systle Programs and Systle shall have the right
to approve or reject all or any portion of a proposed Work Plan. SBTK shall
provide Systle with a proposed Work Plan under
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each of the Systle Programs. Systle shall promptly notify SBTK in writing of his
acceptance (in whole or in part) or rejection (in whole or in part) thereof.
(b) The parties understand and acknowledge that it is difficult to
predict accurately the activities that will be necessary to execute any Work
Plan, including the Research and Development Costs thereof, and that significant
uncertainties exist in any product development effort. Systle and SBTK shall
cooperate in good faith to devise mutually acceptable Work Plans for the Systle
Programs. SBTK and Systle shall review each such Work Plan from time to time,
and in any event no less often than at the end of each stage of research and
development, and shall then revise each Work Plan as appropriate such that each
Work Plan remains a best estimate of the work to be performed to complete the
development objectives identified therein and of the Research and Development
Costs thereunder. The parties may also mutually determine to discontinue any and
all Work Plans with respect to a Systle Program.
Except as set forth in Section 2.3(c), Systle shall not be obligated to
pay Research and Development Costs in excess of those provided for in approved
Work Plans (if such a maximum amount is so specified), and SBTK shall not be
obligated to perform work which would result in Research and Development Costs
exceeding those in approved Work Plans (if such a maximum amount is so
specified).
(c) The parties recognize that bona fide disputes may arise from time
to time in connection with devising mutually-acceptable Work Plans for the
Systle Programs. If Systle accepts or rejects a Work Plan in part, SBTK may
either (i) perform the activities under the Work Plan as approved by Systle or
(ii) propose a modified Work Plan to Systle for approval.
2.4 Consultation. Systle shall consult with SBTK and shall review with
SBTK from time to time SBTK's ongoing activities on behalf of Systle and the
progress toward completion of the activities under the Work Plans for each
Systle Program.
2.5 Third Party Rights. Subject to the terms and conditions of this
Agreement, SBTK shall have discretion to attempt to obtain any Proprietary
Rights from any third party that SBTK reasonably determines to be necessary or
useful to conduct any Systle Program or related activities pursuant to any
approved Work Plan. In addition, SBTK shall have the right to conduct its
research and development activities under this Agreement in connection with the
Systle Programs with SBTK Affiliates and third parties, including entering into,
on Systle's behalf, research and development agreements. Proprietary Rights
acquired by or licensed to SBTK as a result of the foregoing shall be included
in the Developed Technology. The costs of obtaining any such Proprietary Rights
or conducting such research and development activities shall be included in the
Research and Development Costs paid by Systle pursuant to this Agreement.
2.6 Development Assets. SBTK shall own and have the right to use any
Development Assets.
2.7 Notices. SBTK shall notify Systle within five (5) business days
after SBTK receives notice of clearance from any government or governmental
agency to market any Systle Product. SBTK shall promptly notify Systle of the
first commercial sale of any Systle Product in any jurisdiction.
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3. PAYMENT FOR SERVICES; TIMING OF PAYMENTS.
3.1 Payment of Research and Development Costs. In consideration of the
work to be carried out by SBTK hereunder, Systle shall make payments to SBTK (or
its Affiliates as directed by SBTK) for all Research and Development Costs
incurred by SBTK or its Affiliates in accordance with accepted Work Plans.
Systle shall also make payments to SBTK for Research and Development Costs with
respect to the initial Systle Programs which have been incurred from January 1,
1999 through the date hereof, in accordance with the Systle approved Work Plans
therefor in effect as of the date hereof. Systle shall make a payment of One
Million Dollars ($1,000,000) to cover estimated Research and Development Costs
upon execution of this Agreement.
3.2 Timing of Payments. Systle shall pay to SBTK quarterly, in
advance, the estimated amount of all Research and Development Costs to be
incurred by SBTK and its Affiliates during each calendar quarter, within five
(5) days after receipt of SBTK's invoice therefor, with a true-up payment to be
made by one party to the other within forty five (45) days after the end of each
calendar year as needed to reconcile estimated and actual Research and
Development Costs.
3.3 Sufficiency of Funds. Neither Systle nor SBTK makes any warranty,
express or implied, that the funds budgeted in any Work Plan will be sufficient
to complete the development under any or all of the Systle Programs or the other
activities contemplated hereunder.
3.4 Late Payments. Any payments due hereunder that are not made when
due shall accrue interest at the lesser of ten percent (10%) per annum or the
maximum rate as may be allowed by law, beginning on the date when SBTK notifies
Systle that such payments are overdue.
4. REPORTS AND RECORDS.
4.1 Research and Development Program Reports. Within forty-five (45)
days after the end of each calendar quarter, SBTK shall provide to Systle a
report setting forth (a) a summary of the work performed hereunder by or at the
direction of SBTK during such quarter; and (b) the total Research and
Development Costs of such activities during such quarter and cumulatively to
date, for each Work Plan.
4.2 Records; Review by Auditors. SBTK shall (and shall cause any
respective Affiliate to) keep and maintain, in accordance with U.S. generally
accepted accounting principles, proper and complete records and books of account
documenting all Research and Development Costs. Systle shall have the right,
once in each calendar quarter during regular business hours and upon reasonable
notice to SBTK or the respective Affiliate, and at his own expense, to examine
or to have examined by his auditors or representatives, pertinent books and
records of SBTK or such Affiliate, for the sole purpose of determining the
correctness of amounts invoiced, paid or due under this Agreement. Such
examination shall take place not later than two (2) years following the quarter
in question, and only one examination may take place with respect to any period
as to which such books and records are examined.
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5. OWNERSHIP OF TECHNOLOGY.
5.1 Ownership of Developed Technology. Unless SBTK and Systle agree
otherwise, all Developed Technology shall be owned by Systle, subject to the
Product Option.
5.2 Patents Covering Developed Technology. SBTK shall determine
whether and to what extent to seek and maintain patents covering any Developed
Technology. Any such patents and applications therefor shall be owned by Systle
unless such ownership separate from SBTK shall raise prior art issues with
respect to SBTK inventions, in which event, such patent applications shall be
filed by SBTK, subject to an exclusive license to Systle. Systle shall pay all
of the costs of obtaining and maintaining any patents and patent applications
during the term of this Agreement arising out of Systle Programs.
5.3 Transfer of Technology. Systle shall not grant any rights under or
to, transfer, assign or otherwise dispose of any Developed Technology or any
Systle Product, without first delivering to SBTK sixty (60) business days prior
written notice, whereupon SBTK shall have the opportunity to exercise its
Product Option with respect thereto as provided in Section 6.
6. PRODUCT OPTION.
6.1 Grant of Product Option. On the terms and subject to the
conditions of this Agreement, Systle hereby grants to SBTK an option to acquire
all of Systle's rights with respect to each Systle Product, exercisable on a
product-by-product basis as described in Section 6.2.
6.2 Time For Exercise. SBTK may exercise the Product Option with
respect to any Systle Product at any time during the period beginning on the
date hereof and ending one (1) year after clearance by the FDA to market such
Systle Product in the United States. The Product Option for any Systle Product
will expire if not exercised within the foregoing time periods.
6.3 Manner Of Exercise. SBTK shall exercise any Product Option by
delivering to Systle, within the time period described in Section 6.2 above, a
written notice of exercise specifying the Systle Product. Upon delivery of such
written notice of exercise, the parties shall execute an assignment to SBTK of
all Systle's rights in the Systle Product and all associated Developed
Technology. The consideration for such assignment shall be one and one third
(1-1/3) of the Research and Development Costs to develop such Systle Product
under this Agreement.
7. ACCESS TO INFORMATION; CONFIDENTIALITY.
7.1 Access. Systle shall be permitted access to the premises of SBTK
during normal business hours, solely for the purpose of monitoring the progress
of activities under this Agreement. SBTK shall keep records and notebooks
documenting the experiments performed during its work under this Agreement and
the results thereof. Such documentation shall be available during normal
business hours for inspection by Systle.
7.2 Third Parties. SBTK shall use reasonable efforts to obtain from
each third party engaged pursuant to Section 2.5 access similar to that to be
provided pursuant to Section 7.1, for the benefit of both Systle and SBTK.
7.3 Confidentiality. During the term of this Agreement and for a
period of ten (10) years following its termination, each party shall maintain in
confidence all Confidential Information of the other; provided, however, that
nothing contained herein shall prevent either party from disclosing any
Confidential Information to the extent that such Confidential Information (a) is
required to be disclosed in connection with conducting the Systle Programs,
securing necessary governmental authorization with respect to the Systle
Products, or directly or
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indirectly making, using or selling Systle Products, (b) is required or
appropriate to be disclosed by law for the purpose of complying with
governmental regulations, (c) is disclosed to sublicensees, distributors or
marketing partners or potential sublicensees, distributors or marketing partners
permitted under the agreements between the parties in connection with the
proposed or actual research, development, manufacturing or marketing of Systle
Products, subject to similar obligations of confidentiality on the part of such
third parties as required by the agreements between the parties, (d) is lawfully
disclosed to the recipient by a third party having the right to disclose such
information to the recipient, or (e) either before or after the time of
disclosure to the recipient, become known to the public other than by an
unauthorized act or omission of the recipient or any of the recipient's
employees or agents; provided further that, Systle may disclose SBTK
Confidential Information to third parties only in accordance with the provisions
of this Section 7.3 and Section 8.1 hereof and in accordance with the provisions
of any license entered into pursuant to the Product Option. The obligations of
each of the parties pursuant to this Section 7.3 shall survive the termination
of this Agreement for any reason. Any breach of this Section 7.3 may result in
irreparable harm, and in the event of a breach, the aggrieved party shall be
entitled to seek injunctive relief (without the need to post a bond) in addition
to any other remedies available at law or in equity.
8. PUBLIC DISCLOSURE.
8.1 Public Disclosure. No press releases or other releases of
information related to this Agreement or the transactions contemplated hereby
will be issued or released by Systle without the prior consent of SBTK. Only
SBTK and its representatives shall be permitted to communicate with financial
analysts, investors and the press regarding this Agreement and the transactions
contemplated hereby. Systle agrees that all such contacts shall be directed to
SBTK.
9. TERM AND TERMINATION.
9.1 Term. This Agreement shall become effective on the date set forth
on the first page (the "Effective Date") and shall continue thereafter, unless
earlier terminated pursuant to Section 9.2, until June 30, 2005.
9.2 Other Termination. Either party may, in its discretion, terminate
by written notice this Agreement in the event that the other party:
(a) breaches any material obligation hereunder and such breach
continues for a period of sixty (60) days after written notice thereof by the
terminating party to the other party; or
(b) enters into any proceeding, whether voluntary or involuntary, in
bankruptcy, reorganization of creditor's rights or similar arrangement for the
benefit of its creditors.
10. FORCE MAJEURE.
10.1 Force Majeure. Neither party to this Agreement shall be liable for
failure or delay in the performance of any of its obligations hereunder, if such
failure or delay is due to causes beyond its reasonable control including,
without limitation, acts of God, earthquakes, fires, strikes, acts of war, or
intervention of any governmental authority, but any such delay or failure shall
be remedied by such party as soon as possible after the removal of the cause of
such failure or delay.
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11. MISCELLANEOUS.
11.1 Amendment and Waiver. This Agreement may be amended and any
provision of this Agreement may be waived; provided that any such amendment or
waiver shall be binding upon a party only if set forth in a writing executed by
authorized representatives of such party and referring specifically to the
provision alleged to have been amended or waived. A waiver by any party hereto
of any terms and conditions of this Agreement in any one instance shall not be
deemed or construed to be a waiver of such terms and conditions for any similar
instance in the future. No course of dealing between or among any persons having
any interest in this Agreement shall be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.
11.2 Assignment. Neither party may assign its rights and obligations
hereunder without the prior written consent of the other party, which consent
may not be unreasonably withheld; provided, however, that SBTK may assign such
rights and obligations hereunder to an Affiliate of SBTK or to any person or
entity with which SBTK is merged or consolidated or which acquires all or
substantially all of the assets or issued and outstanding shares in the share
capital of SBTK.
11.3 Dispute Resolution. To the extent feasible, SBTK and Systle desire
to resolve any controversies or claims or issues arising out of or relating to
this Agreement through discussions and negotiations between each other. SBTK and
Systle agree to use their reasonable best efforts to attempt to resolve any
disputes, controversies, claims or issues arising out of or relating to this
Agreement by face-to-face negotiations with each other. In the event that, after
good faith discussions, such controversies, claims or issues cannot be resolved
solely between the parties, then SBTK and Systle shall, upon the election of
either SBTK or Systle, jointly submit their dispute to binding arbitration in
the City of Chicago, Illinois. Such arbitration shall be administered by the
American Arbitration Association (the "Institute") in accordance with its then
prevailing rules for arbitration of business disputes (except as otherwise
provided by this Agreement), by three independent and impartial arbitrators, one
of whom shall be appointed by SBTK, one of whom shall be appointed by Systle and
one of whom shall be appointed by the Institute (collectively, the
"Arbitrator"). Notwithstanding anything to the contrary provided in Section 11.5
of this Agreement, the arbitration shall be governed by the United States
Arbitration Act, 9 X.X.X.xx. 1 et. seq. The Arbitrator shall permit and
facilitate such discovery as it shall determine appropriate in the
circumstances, taking into account the needs of the parties hereto and the
desirability of making discovery expeditious and cost effective. The arbitrator
may issue such interim orders in accordance with principles of equity as may be
necessary to protect any party from irreparable harm during the pendency of any
arbitration, including entry of a preliminary injunction. Any such order shall
be without prejudice to the final determination of the controversy. SBTK and
Systle hereby agree that such arbitration shall be completed and a final
arbitration decision rendered within sixty (60) days of the submission of the
respective dispute to arbitration, and each of such parties shall take all
actions appropriate and necessary to cause such arbitration to be so completed
within such sixty (60) day period. The Arbitrator shall not be empowered to
award any party any punitive damages in connection therewith, and each party
hereby irrevocably waives any right to recover such punitive damages. The
determination of the Arbitrator as to a dispute shall be final and binding for
all purposes of this Agreement.
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Each party to any such arbitration shall use its best efforts and utmost
diligence to safeguard and to protect against disclosure, misuse, espionage,
loss and theft and shall keep and maintain in strict confidence and shall not
disclose to any third party any information that may be disclosed to it in
connection with such arbitration proceeding, other than to its employees and
agents who require access to such information to perform their duties and other
than is required or appropriate to disclose pursuant to applicable law
(including pursuant to securities laws and any reporting requirements
thereunder) or court order or in any arbitration contemplated by this Agreement;
the arbitrator shall to the extent permitted by the rules and regulations of the
Institute be likewise bound by this confidentiality provision and shall not make
public its opinion or findings in connection with the relevant proceeding. The
fees and expenses of the Arbitrator shall be equally shared by the parties and
each of the parties shall bear its own costs and expenses in connection with any
such arbitrations; provided that if the right of a party or parties to
indemnification for any particular matter is upheld or sustained in such
arbitration, the other party or parties to such arbitration shall bear all of
the fees and expenses of the Arbitrator, all of their own costs and expenses and
the reasonable costs and expenses (including reasonable attorneys' fees and
expenses) of the party or parties whose claim to indemnity is so upheld or
sustained.
11.4 Counterparts. This Agreement may be executed in any number of
counterparts (including by means of telecopied signature pages), each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute this Agreement.
11.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois.
11.6 Headings. The section headings contained in sections of this
Agreement are included for convenience only and form no part of the Agreement
between the parties.
11.7 Notices. Notices required under this Agreement shall be in writing
and sent by registered or certified mail, postage prepaid, or by facsimile and
confirmed by registered or certified mail, postage prepaid, and addressed as
follows:
If to SBTK:
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Sabratek Corporation
0000 Xxxxx Xx. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
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with copy to:
(which shall not constitute notice to SBTK)
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to Systle:
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Xxxxxxx X. Xxxxxxx
__________________________________
__________________________________
Facsimile: _______________________
All notices shall be deemed to be effective upon receipt unless such
notice is delivered or transmitted by facsimile, in which case, if it is
delivered or transmitted before 4:00 PM on a business day, it shall be deemed to
have been given and received on such day; in any other case, it will be deemed
to have been given and received on the first business day following the day on
which it is delivered or transmitted by facsimile. Either party may change the
address at which notice is to be received by written notice pursuant to this
Section 11.7.
11.8 Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid or unenforceable, it shall be
modified, if possible, to the minimum extent necessary to make it valid and
enforceable or, if such modification is not possible, it shall be stricken and
the remaining provisions shall remain in full force and effect.
11.9 Relationship of the Parties. For purposes of this Agreement,
Systle and SBTK shall be deemed to be independent contractors, and anything in
this Agreement to the contrary notwithstanding, nothing herein shall be deemed
to constitute Systle and SBTK as partners, joint venturers, co-owners, an
association or any entity separate and apart from each party itself, nor shall
this Agreement constitute any party hereto an employee or agent, legal or
otherwise, of the other party for any purposes whatsoever. Neither party hereto
is authorized to make any statements or representations on behalf of the other
party or in any way obligate the other party, except as expressly authorized in
writing by the other party. Anything in this Agreement to the contrary
notwithstanding, no party hereto shall assume or be liable for any liabilities
or obligations of the other party, whether past, present or future.
11.10 Entire Agreement. This Agreement contains the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings whether written or
oral, relating to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
SABRATEK CORPORATION
By: /s/ XXXX XXXXXX
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Title: Chief Financial Officer
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SYSTLE CORPORATION
By: /s/ XXXXXXX XXXXXXX
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Title:
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