CONFIDENTIAL TREATMENT REQUESTED

 

 

 

 

 

 

 

 

 

 

 

 

 

CONFIDENTIAL TREATMENT REQUESTED

 

 

 

ii

 

 

 

 

iii

 

 

 

 

 

 

 

 

 

 

 

 

 

1.1	“Affiliate”

 

 

1.1.1

“control” means direct or indirect control of at least fifty percent (50%) of the voting securities of an entity or, if such entity does not have outstanding voting securities, at least fifty percent (50%) of the directorships or similar positions with respect to such entity; and

 

1.1.2

“entity” means any corporation, company, association, joint venture, partnership, trust or any other organization that has independent legal authority;

 

 

 

 

1.3	“Applicable Law(s)”

 

 

1.4	“Books and Records”

 

 

1.5	“Business Day”

 

 

1.6	“Clinical Trial”

 

 

1.7	“Collateral”

 

 

1.8	“Commercialization”

 

 

1.9	“Competent Authority(ies)”

 

 

1.11	“Covering”, “Cover” and “Covered”

 

 

1.12	“Development” and “Developed”

 

 

1.13	“Development Milestone”

 

 

1.14	“Development Program”

 

 

1.15	“Development Program Amendment”

 

 

1.16	“Diligent Efforts”

 

 

 

 

1.17

“EMEA”

 

 

1.18

“FDA”

 

 

1.19	“Field of Use”

 

 

1.20	“First Commercial Sale”

 

 

1.21	“Governmental Approval(s)”

 

 

1.22

“IND(s)”

 

 

1.23	“Improvements”

 

 

 

 

1.25	“Know How”

 

 

1.26	“Licensed Product”

 

 

1.27	“Licensee’s Know-How”

 

 

1.28	“Licensee’s Patent Rights”

 

 

1.29	“Licensor’s Know-How”

 

 

1.30	“Licensor’s Patent Rights”

 

 

1.30.1

the Patent Rights set forth in Exhibit A; and

 

1.30.2

any other Patent Rights in the Territory Controlled by Licensor Covering the Licensed Product or the Manufacturing of the Licensed Product.

 

 

 

 

1.32	“Marketing Authorization”

 

 

1.33	“Milestone Payment”

 

 

1.34

“NDA”

 

 

1.35	“Net Sales”

 

 

1.35.1

The components of the deduction from Net Sales, as listed in Section 1.35 (a) through (g) above, shall be determined in the ordinary course of business using the accrual method of accounting in accordance with Generally Accepted Accounting Principles applicable in the United States.

 

1.35.2

Notwithstanding anything herein to the contrary, the transfer of the Licensed Product to a Third Party without consideration to Licensee in connection with the research, development, testing or demonstration of the Licensed Product shall not be considered a sale of the Licensed Product under this Agreement.  Nor shall the transfer of Licensed Product solely for indigent or similar public support or compassionate use programs be considered a sale of Licensed Product under this Agreement.

 

1.35.3

Notwithstanding anything herein to the contrary, the transfer of Licensed Product among Licensee, its Affiliates and/or its Sublicensees shall not be considered a sale of Licensed Product under this Agreement unless such Affiliate or Sublicensee is the end user of such Licensed Product.

 

1.36

“Party”

 

 

 

1.37	“Patent Rights”

 

 

1.38

“Person”

 

 

1.39	“Phase I Clinical Trial”

 

 

1.40	“Phase I/II Clinical Trial”

 

 

1.41	“Phase II Clinical Trial”

 

 

1.42	“Phase III Clinical Trial”

 

 

1.44	“Royalty Term”

 

 

 

(i)

the period commencing on the date of the First Commercial Sale and ending on the expiration of the last to expire of the Valid Claims of Licensor’s Patent Rights in such country; and

 

(ii)

the period of ten (10) years from the later of the date of receipt of all Governmental Approvals of the Licensed Product (if any) in such country and the First Commercial Sale in such country.

 

1.45	“Sublicensee”

 

 

1.46

“Term”

 

 

1.47	“Territory”

 

 

1.48	“Third Party”

 

 

1.50	“Valid Claim”

 

 

1.51	Interpretation

 

 

1.51.2

All references in this Agreement to a designated “Article”, “Section”, or other subdivision or to a Schedule are to the designated Article, Section, or other subdivision of, or Schedule to, this Agreement.

 

 

 

1.51.3

The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, or other subdivision of, or Schedule to, this Agreement.

 

1.51.4

The word “including”, when following any general statement, term or matter, is not to be construed to limit such general statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather is to be construed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

 

1.51.5

All references to currency, dollar or $ are deemed to mean lawful money of the United States.

 

1.51.6

Any reference to a statute includes and is a reference to such statute and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which has the effect of supplementing or superseding such statute or such regulations.

 

1.51.7

Wherever reference is made “to the knowledge of” with reference to the knowledge of Licensor with respect to a matter, it means the actual knowledge on the Effective Date with respect to such matter, without further or independent investigation, of the following senior management personnel of Licensor: Dr. Aiping H. Young, President and CEO, Dr. Saeid Babaei, Director of Corporate Development and Dr. Yoon Lee, Director of Research, each of whom has been involved in the regulatory, manufacturing, clinical and scientific aspects of the Licensed Product.

 

1.51.8

Words imparting the masculine gender include the feminine or neuter gender and words in the singular include the plural and vice versa.

 

1.51.9

This Agreement has been prepared jointly by the Parties, each having access to legal counsel of its choice, and shall not be strictly construed or interpreted in favour of or against either Party.

 

 

2.1	Grant of License by Licensor

 

 

 

2.1.1

develop, make, have made, use, have used, import, have imported, export, have exported, offer for sale, have sold, sell, produce, manufacture, distribute and market the Licensed Product solely within the Field of Use and the Territory; and

 

2.1.2

sublicense to Third Parties the rights granted under Section 2.1.1 of this Section 2.1 in accordance with Section 2.3;

 

 

2.2	Animal Use of Licensed Product

 

 

2.3	Sublicenses by Licensee

 

2.3.1

Subject to the provisions of this Section 2.3, Licensee shall have the right to sublicense rights granted in Section 2.1.1 in its sole discretion.

 

2.3.2

No sublicense may contain the right to further sublicense unless Licensee shall have first obtained Licensor’s prior written consent, such consent not to be unreasonably withheld.

 

2.3.3

Each sublicense shall contain covenants by the Sublicensee for such Sublicensee to observe and perform materially the same terms and conditions as those set out for Licensee, as though the Sublicensee were a party to this Agreement, including, without limitation, the provisions of Articles 4, 5 and 6.

 

 

2.3.4

All sublicenses granted under this Section 2.3 shall terminate upon termination of this Agreement, or on a country-by-country basis, as the case may be.

 

2.3.5

Each sublicense shall include an obligation for the Sublicensee to account for and report its Net Sales to Licensee and Licensor on the same basis as if such sales were Net Sales by Licensee, and an obligation of the Sublicensee to comply with the terms of Article 8 as though the Sublicensee were a party to this Agreement.

 

2.3.6

Each sublicense shall provide that rights in respect of Intellectual Property Controlled by the Sublicensee which are Improvements shall be granted to Licensee on the basis that Licensee shall have the right to sublicense such rights to Licensor and without further act by Licensor or Licensee such rights shall be included in the license granted to Licensor pursuant to Section 2.5, subject to the termination provisions in such sublicense.

 

2.3.7

Licensee shall promptly deliver to Licensor a copy of each sublicense granted to a Sublicensee, and in any event within 10 days of the date of execution of such sublicense by the Parties thereto.

 

2.3.8

Licensee shall be responsible for any failure by its Sublicensees to comply with the terms of such sublicense.

 

2.4	Improvements

 

 

2.5	Grant of License by Licensee

 

2.5.2

sublicense to Third Parties the rights granted under Section 2.5.1 of this Section 2.5, in accordance with Section 2.6;

 

 

2.6	Sublicenses by Licensor

 

2.6.1

Subject to the provisions of this Section 2.6, Licensor shall have the right to sublicense rights granted in Section 2.5.1 in its sole discretion.

 

2.6.2

No sublicense may contain the right to further sublicense unless Licensor shall have first obtained Licensee’s prior written consent, such consent not to be unreasonably withheld.

 

2.6.3

All sublicenses granted under this Section 2.6 shall terminate upon termination of the license set out in Section 2.5.1.

 

2.6.4

Each sublicense shall provide that rights in respect of Intellectual Property Controlled by the sublicensee which are Improvements shall be granted to Licensor on the basis that Licensor shall have the right to sublicense such rights to Licensee and without further act by Licensee or Licensor such rights shall be included in the license granted to Licensee pursuant to Section 2.1, subject to the termination provisions in such sublicense.

 

2.6.5

Licensor shall promptly deliver to Licensee a copy of each sublicense granted to a sublicense of the rights of Licensor, and in any event, within 10 days of the date of execution of such sublicense by the Parties thereto.

 

2.6.6

Licensor shall be responsible for any failure by its sublicensees to comply with the terms of such sublicense.

 

2.7	Trademark Rights

 

 

2.7.1

in consideration of the grant of the exclusive license to use the Trademark set out in S. 2.1, the Licensee shall pay to the Licensor an annual fee of (REDACTED: Pricing and Payment Rate Information), which amount shall be paid each year within thirty (30) days following the anniversary of the Effective Date (it being agreed between the Parties that all amounts payable by the Licensee to the Licensor pursuant to Article 7 are paid in

 

consideration of the license granted to the Licensee under the Licensor’s Patent Rights and Licensor’s Know-How);

 

2.7.2

it shall use the Trademark only during the Term, and only in association with its exercise of its licensed rights set out in Section 2.1, and for no other purpose;

 

2.7.3

it shall not make any changes or alterations to the Trademark unless specified or approved in advance in writing by Licensor;

 

 

2.7.4

in each use of the Trademark it shall utilize the “TM” symbol or ® symbol on the right shoulder of the Trademark (for example “VIRULIZIN®”), as directed by Licensor;

 

2.7.5

it will, upon the request of Licensor, deliver samples of all advertising, promotion, general information and other materials that bears or refers to any of the Trademark; and

 

2.7.6

Licensee will indicate on all printed material, its website or other commercially available material that the Trademark is used under license from Licensor, in the following manner:

 

 

2.8	No Implied License

 

 

2.9	Security Interest

 

 

3.1	Initial Technology Transfer

 

 

3.1.1

copies of all regulatory submissions;

 

3.1.2

any communications with any Competent Authority and the minutes of any meetings with any Competent Authority relating to the Licensed Product;

 

3.1.3

trial master files relating to the Licensed Product, including copies of all case report forms;

 

3.1.4

copies of all listings and tables of results from the Clinical Trials relating to the Licensed Product;

 

3.1.5

copies of all treatment-related adverse event reports from the clinical trials relating to the Licensed Product;

 

3.1.6

storage of and access permission to any retained samples of materials used in clinical trials relating to the Licensed Product;

 

3.1.7

CRO materials from the Clinical Trials relating to the Licensed Product;

 

3.1.8

the data and results of any CMC related activities regarding the Licensed Product, and

 

3.1.9

all other information regarding Clinical Trials respecting the Licensed Product.

 

 

3.2	Technical Assistance

 

 

 

 

4.1	Ownership and Maintenance of Governmental Approvals

 

 

4.2	Licensee Obligations

 

 

 

 

4.3	Licensor Participation; Sharing of Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.4	Adverse Events Reporting

 

4.4.1

Licensee, on behalf of itself, its Affiliates and any permitted sublicensees, shall advise Licensor, and, in the event that Licensor or its other licensees undertakes Development or Commercialization of the Licensed Product outside the Territory, Licensor shall advise Licensee, in each case by telephone or facsimile, promptly but in no event later than five (5) calendar days after Licensee, its Affiliates or sublicensees or Licensor, as the case may be, becomes aware of any serious or unexpected side effects, injury, toxicity or sensitivity reaction, or any unexpected incidence, and the severity thereof, associated with the formal GLP toxicology studies, clinical uses, investigations and marketing of the Licensed Product.

 

4.4.2

Such advising Party shall provide the other Party with a written report delivered by confirmed facsimile of any SADE, stating the full facts known to such Party, including investigator name, site details, if any, customer name, if any, address, telephone number, batch, lot and serial numbers, and other information as required by Applicable Laws.

 

4.4.3

Licensee shall have full responsibility in the Territory, and, in the event that Licensor or any of its other licensees undertakes Development or Commercialization of the Licensed Product outside the Territory, Licensor or any of its other licensees shall have full responsibility outside the Territory for: (i) monitoring all adverse experiences, including SADEs (collectively, “AEs”); (ii) data collection activities that occur between Licensee and the patient or medical professional, as appropriate, including any follow-up

 

 

inquiries which Licensee deems necessary or appropriate; and (iii) meeting the requirements of the applicable Competent Authorities, including the submission of AE individual reports and periodic reports.

 

4.4.4

In the event either Party requires information regarding AEs with respect to reports required to be filed by it in order to comply with Applicable Laws, including obligations to report AEs to the Competent Authorities, each Party agrees to provide such information to the other in sufficient time to enable each Party to report such AEs to the Competent Authorities in accordance with Applicable Laws.

 

4.4.5

Licensee shall designate to Licensor, and in the event that Licensor undertakes Development or Commercialization of the Licensed Product outside the Territory, Licensor shall designate to Licensee, a qualified person under Applicable Laws to be responsible for AE reporting in each country in the Territory.

 

4.5	Rights of Reference

 

 

 

4.6	Access to Manufacturers

 

 

5.1	Development Rights

 

Licensor and Licensee acknowledge and agree that, as between them, Licensee and its Affiliates, licensees and Sublicensees will have the sole discretion and obligation with respect to the Development of the Licensed

 

 

 

5.2	Development

 

 

5.3	Diligent Efforts

 

 

5.4	Licensee’s Disclosures and Reports

 

 

(a)

include a general overview and timetable for the Development activities regarding the Licensed Product during such year pursuant to the Development Program; and

 

(b)

set specific Development objectives and assign responsibility for achieving those objectives to employees of Licensee or its Sublicensees or contractors;

 

 

5.5	Mutual Disclosures and Reports

 

 

 

5.5.1

notify the other in writing promptly following the discovery or invention of any Improvements;

 

5.5.2

notify the other in writing of all Patents and Know-How that would constitute Licensor’s Patent Rights, Licensee’s Patent Rights, Licensor’s Know-How or Licensee’s Know-How, as applicable, with meaningful inventions or data being communicated as promptly as practicable after such information is obtained or its significance is appreciated including:

 

(a)

an analysis and a summary of raw data relating to the Licensed Product (and, if requested by the other Party, copies of the raw data);

 

(b)

all toxicology and safety data relating to the Licensed Product; and

 

(c)

such other results of Development activities conducted by the Party that the other Party considers to be useful to Licensor for the purpose of obtaining Governmental Approvals, Development or Commercialization of the Licensed Product (within or outside the Territory, as applicable).

 

5.5.3

maintain Books and Records in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, including to obtain Governmental Approvals of the Licensed Product, and which shall be complete and accurate and shall fully and properly reflect all material work done and results achieved in connection with the Development of the Licensed Product and the performance of the activities hereunder, as well as any other books and records as may be required from time to time by Applicable Law or this Agreement; and

 

5.5.4

provide to the other Party such technical and scientific documents Controlled by such Party that the other Party reasonably requests that relate to the Development of the Licensed Product.

 

(b)

Each Party, its Affiliates and permitted sublicensees shall have the right to cross file and reference the materials, data and information described in Section 5.5(a) in connection with obtaining Governmental Approvals of the Licensed Product within or outside the Territory, as applicable, and each Party shall execute such consents or authorizations as shall be reasonably required by the other Party for such purpose.

 

 

 

 

5.6	Establishment of Medical and Scientific Advisory Board

 

 

 

5.7	Co-negotiation for Commercial Supply of the Licensed Product

 

 

 

6.1	Commercialization Efforts

 

 

 

6.2.1

Describe in reasonable detail the Commercialization plan for the Licensed Product in the Territory for such year;

 

6.2.2

Set specific Commercialization objectives and assign responsibility for achieving those objectives to employees of Licensee or its Sublicensees or contractors;

 

6.2.3

Provide Licensor with one (1) copy of material marketing, advertising and promotional materials from time to time upon request of Licensor and directly related to the Commercialization of the Licensed Product;

 

 

6.2.4

Provide to Licensor within (REDACTED: Timelines) following each half year, a written progress report, which shall describe in reasonable detail the Commercialization activities that it has performed during such half year;

 

6.2.5

Provide Licensor with notice in writing of the date of First Commercial Sale of the Licensed Product in each country within the Territory;

 

6.2.6

Provide Licensor with notice in writing of the date of each of the Development Milestones in the Territory, within (REDACTED: Timelines) of the occurrence of such events;

 

6.2.7

Provide to Licensor, so often as Licensor may reasonably request, but no more than (REDACTED: Timelines), written updates and reports, in reasonable detail, of plans to Commercialize the Licensed Product; and

 

6.2.8

Provide for responsible representatives of Licensee to meet with representatives of Licensor to discuss the Commercialization of the Licensed Product, so often as Licensor may reasonably request.  Such meetings may take place by telephone, video conference or in-person meetings as shall be agreed by the Parties from time to time.  Each Party shall bear its own costs of attending such meetings.

 

7.1	Obligation to Pay

 

 

7.2	Royalties on Net Sales

 

 

(REDACTED: Royalty Terms)

 

7.3	Royalty Adjustment

 

 

 

 

7.4	Payment in Lieu of Royalties

 

 

7.4.1

The amount of (REDACTED: Payment Terms) within ten (10) days of the date of receipt of the Royalty Termination Notice by Licensor; and

 

7.4.2

(REDACTED: Payment Terms) received from time to time by Licensee from each Sublicensee ; Licensee shall pay such amounts to Licensor within ten (10) days following receipt of such consideration by Licensee from its Sublicensee.

 

7.5	Acknowledgement

 

 

 

7.6.1

If, during any year in which a royalty payment is payable in respect of Net Sales within a country in the Territory following expiration of the Licensor’s Patent Rights in that country, a generic version of the Licensed Product is sold by a Third Party in that country and such sales comprise at least (REDACTED: Payment Terms)   (by dollar value) of aggregate sales of the Licensed Product and the generic product for such year in that country (as shown in sales statistics compiled by the government of the country, or by an organization that compiles such information and is acceptable to the Parties) then the royalty otherwise payable pursuant to Section 7.2 in respect of Net Sales in that country shall be reduced by (REDACTED: Payment Terms)   for that year.

 

7.6.2

In the event that the royalty in respect of a country is reduced by (REDACTED: Payment Terms)  pursuant to Section 7.6.1 for a period of five (5) consecutive years, the Net Sales within that country shall not, following such period of five (5) years, be included in the calculation of Net Sales for the purpose of Section 7.2.

 

7.7	Royalties respecting Sublicenses for South America

 

 

7.8	No Multiple Royalties

 

 

7.9	Combination Products

 

 

7.10	Development Based Milestone Payments

 

 

7.11	Place of Payment, Taxes and Conversions

 

 

7.12	Time for Payment

 

7.12.1

Within (REDACTED: Timelines) following the end of each calendar quarter (the end of each calendar quarter being March 31, June 30, September 30, December 31) during the Term, Licensee shall pay to Licensor the royalties due and payable under this Agreement in respect of such calendar quarter, and shall provide the Royalty Statement referred to in Section 8.2 along with such payment.

 

 

 

7.12.2

If no royalties or other payments under this Agreement shall be due to Licensor in respect of a quarterly period, Licensee shall not be required to provide a Royalty Statement in respect of such period.

 

7.13

Interest

 

 

7.14	No Set-Off

 

 

7.15	Royalty Reduction for Infringement

 

 

 

(b)

Licensee or any Affiliate or Sublicensee of Licensee, in its sole discretion after appropriate legal analysis, believes it necessary to obtain a license from a Third Party in any jurisdiction in the Territory;

 

 

 

8.1	Records and Audits

 

 

8.2	Royalty Statements

 

 

8.2.1

an accounting of all Licensed Product used or sold;

 

8.2.2

total amounts received for Licensed Product;

8.2.3

Net Sales for each Licensed Product by each of Licensee, each Affiliate and each Sublicensee;

 

8.2.4

cumulative Net Sales for the current calendar year;

 

8.2.5

a breakdown of deductions applicable in computed Net Sales and taxes withheld, if any;

 

8.2.6

a breakdown of royalties due based on Net Sales by or for Licensee, its Affiliates and Sublicensees;

 

8.2.7

a breakdown of royalties due from any Sublicensee;

 

8.2.8

names and addresses of all Sublicensees and Affiliates of Licensee; and

 

8.2.9

a copy of each report from each Sublicensee as may be pertinent to an accounting of royalties and other payments that may be due to Licensor.

 

8.3	Confidential Treatment of Reports

 

 

8.4	Non-Monetary Consideration

 

 

 

9.1	Prosecution and Maintenance

 

 

 

 

9.1.2

Licensor agrees to take all such actions with respect to the filing, prosecution, and maintenance of Licensor’s Patent Rights that Licensee may from time to time reasonably request in connection with the license granted to Licensee herein.

 

9.2

Costs

 

 

9.3	No Dispute

 

 

 

 

10.1

Disputes

 

10.1.1

The Parties recognize that disputes as to certain matters may from time to time arise during the Term which relate to either Party’s rights and/or obligations hereunder or to the interpretation, performance, breach, or termination of this Agreement, (a “Dispute”).  It is the objective of the Parties to establish procedures to facilitate the resolution of a Dispute in an expedient manner by mutual cooperation and without resort to litigation.  To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 10 if and when a Dispute arises under this Agreement.

 

10.1.2

A Dispute among the Parties will be resolved as recited in this Article 10.  Any Disputes relating to this Agreement shall be promptly presented to the Chief Executive Officers of Licensor and Licensee, or their respective designees (who must be members of a Party’s senior management) for resolution.  From the date of referral of a Dispute to the Chief Executive Officers or their designees of the Parties and until such time as any matter has been resolved by the Parties or has been finally settled by arbitration hereunder, the running of the cure periods (if any) as to which a Party must cure a breach that is part of the subject matter of any Dispute shall be suspended.  In the event that the Chief Executive Officers of Licensor and Licensee, or their respective designees, cannot after good faith negotiations resolve the Dispute within thirty (30) days (or such other period of time as mutually agreed to by the Parties in writing) of being requested by a Party to resolve a Dispute, the Parties agree that such Dispute shall be resolved by binding arbitration in accordance with this Section 10.1.

 

10.1.3

If a Party intends to begin arbitration to resolve such Dispute, such Party shall provide written notice (the “Arbitration Notice”) to the other Party informing such other Party of such intention and the issues to be resolved.  Any arbitration hereunder shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), including the Supplementary Procedures for Large Complex Disputes (the “AAA Rule”) except as modified herein.  The arbitration shall be conducted by a panel of three (3) arbitrators (the “Panel”), one to be selected by Licensee, one to be selected by the Licensor and the third to be selected by the other 2 arbitrators.  If the third arbitrator cannot be agreed upon by such two arbitrators within thirty (30) days, the AAA shall promptly appoint the arbitrator to complete the Panel in accordance with the criteria set forth in this Section 10.1.  The arbitrators shall be industry experts experienced in the issues comprising the Dispute and shall have no past, present or anticipated future affiliation with either Party.  The arbitration shall take place in New

 

 

York, New York.  The Panel shall apply the laws of the State of New York, without regard to its conflicts of laws provisions.  The Panel shall issue appropriate protective orders and/or confidentiality obligations to protect each Party’s confidential information.  If a Party can demonstrate to the Panel that the complexity of the issue or other reasons warrant the extension of one or more timetables in the AAA Rules, the Panel may extend such timetables but in no event shall the proceeding extend more than twelve (12) months from the date of filing of the Arbitration Notice with the AAA.  The Panel’s decision shall be in writing.  The Panel shall have the authority to award any remedy allowed by law or in equity, including compensatory damages, pre-judgment interest and to grant final, complete, interim, or interlocutory relief, including specific performance, injunctions and other equitable relief, but not punitive or other damages and each Party shall be deemed to have waived any right to such excluded damages.  Each Party shall bear its own costs, fees and expenses in the arbitration and shall share equally the Panel’s fees, unless the Panel determines that its fees are to be paid by the non-prevailing Party.

 

10.2	Performance to Continue

 

 

10.3	Determination of Patents and Other Intellectual Property

 

 

 

11.1

Term

 

 

11.2	Termination for Failure to make Payments

 

 

11.3	Termination for Breach

 

 

11.4	Failure to Use Diligent Efforts

 

11.4.1

In the event that Licensee fails to meet a Development Milestone at the time set out in Exhibit F for any reason whatsoever, Licensee shall have period of ninety (90) days within which to either achieve the Development Milestone or deliver to Licensor a written amendment to the Development Program (the “Development Program Amendment”) explaining in detail the reasons for failure to achieve the Development Milestone and the steps that Licensee shall take to achieve such milestone in the shortest time reasonably possible and setting out the time at which such Development Milestone shall be achieved.

 

11.4.2

Licensor may accept the Development Program Amendment by notice in writing to Licensee or may, by notice in writing to Licensee within thirty (30) days following receipt of the Development Program Amendment, require representatives of Licensee and Licensor to meet in person to review whether such Development Milestone was not achieved because of Licensee’s failure to apply its Diligent Efforts and each shall, acting in good faith, discuss and negotiate the amendment of the Development Program to reset the time of achievement of the Milestone Event or otherwise amend the Development Program with the goal of achieving Marketing Authorizations for the Licensed Product in the Territory at the earliest date reasonably possible.

 

11.4.3

In determining whether Licensee has used Diligent Efforts to achieve a Development Milestone, Licensor and Licensee shall consider the application of Licensee’s Diligent Efforts relating to obtaining Governmental Approvals, the progress of Clinical Trials of the Licensed Product, the results of such Clinical Trials, the state of the

 

 

11.4.4

In the event that representatives of Licensor and Licensee cannot agree, within the period of thirty (30) days described in Section 11.4.2 following the time at which the Development Milestone was to be achieved as set out in Exhibit F, that such Development Milestone was not achieved despite Licensee’s applying its Diligent Efforts or cannot agree on the amendment of the Development Program to reset the time of achievement of the Development Milestone or otherwise amend the Development Program with the goal of achieving Marketing Authorizations for the Licensed Product in the Territory at the earliest date reasonably possible, either Party may refer the matter as a Dispute to the dispute resolution provisions of Article 10.

 

11.4.5

In the event that Licensor accepts the Development Program Amendment pursuant to Section 11.4.2 or Licensor and Licensee otherwise agree upon amendments to the Development Program pursuant to Section 11.4.2, the Parties shall amend Exhibit F accordingly and shall attach a revised Exhibit F to this Agreement.

 

11.4.6

In the event that:

 

(a)

Licensee fails to deliver a Development Program Amendment within the time set out in Section 11.4.1; or

 

(b)

it is determined by arbitration pursuant to Article 10 that the failure to achieve a Development Milestone was substantially by reason of Licensee’s failure to use Diligent Efforts to achieve the Development Milestone;

 

 

11.5	Termination by Licensee

 

 

11.6	Bankruptcy, Dissolution and Winding Up

 

 

11.7	Expiry of Royalty Term on a Country by Country Basis

 

 

 

11.8.1

Licensee, its Sublicensees and Affiliates (as the case may be) shall have no right to practice within the Patent Rights or use any of the Licensor’s Patent Rights and Licensor’s Know How, and all rights, title or interest in, or other incidents of ownership under, the Licensor’s Patent Rights and Licensor’s Know How shall revert to and become the sole property of Licensor, and the licenses granted under Article 2 shall automatically terminate.

 

11.8.2

Notwithstanding Section 11.8.1, Licensee and any Affiliate or Sublicensee thereof may, after the effective date of such termination and continuing for a period not to exceed twelve (12) months thereafter, sell all completed Licensed Product, and any Licensed Product in the process of manufacture at the time of such termination, and sell the same, provided that Licensee:

 

(a)

notifies Licensor of the decision within thirty (30) days after the date it receives a notice of termination by Licensor or the date it provides a notice of termination to Licensor, as the case may be;

 

(b)

pays or cause to be paid to Licensor the royalties and other payments thereon as would have been required by Article 6 of this Agreement had it not been terminated; and

 

(c)

submits the Royalty Statements that would have been required by Article 8 of this Agreement had it not been terminated.

 

11.8.3

If Licensee does not elect pursuant to Section 11.8.2 to sell-off or distribute, as applicable, any existing inventory of Licensed Product, Licensee shall (and shall cause its Affiliates and Sublicensees to do the same), at Licensor’s election, either:

 

 

(a)

sell all existing inventory of Licensed Product to Licensor at the current average retail price in the U.S.; or

 

(b)

destroy all remaining inventory of Licensed Product in accordance with Applicable Laws and provide Licensor with written proof of destruction sufficient to comply with Applicable Laws.

 

11.8.4

Licensee shall (and shall cause its Affiliates and Sublicensees to do the same), promptly but in any event not more than 30 days following such termination:

 

(a)

return to Licensor all copies of materials delivered by Licensor to Licensee pursuant to Section 3.1 and all other materials relating to the Licensed Product or the Know-How delivered by Licensor to Licensee;

 

(b)

deliver to Licensor the original copies of all Governmental Approvals and Marketing Authorizations relating to the Licensed Product and all regulatory dossiers relating to the same;

 

(c)

execute such documents and take such steps as are necessary to transfer to Licensor all Governmental Approvals and Marketing Authorizations relating to the Licensed Product and all applications relating to the same; and

 

(d)

pay to Licensor any amounts owing to Licensor pursuant to this Agreement and unpaid as of the effective date of such termination.

 

11.9

Survival

 

 

 

12.1	Notice of Infringement of Patent Rights

 

 

 

12.3	Licensor’s Rights

 

 

12.4	Infringement by Licensed Product

 

 

12.5	Allocation of Damages Recovered

 

 

12.6	Credit of Litigation Costs

 

 

12.7	Cooperation

 

 

 

13.1	Mutual Representations and Warranties

 

 

13.1.1

it has the requisite power and authority to execute and deliver this Agreement and the other agreements contemplated hereby to which it is a Party and to consummate the transactions contemplated hereby and thereby.

 

13.1.2

The execution and delivery of this Agreement and the other agreements contemplated hereby to which it is a Party and the performance and consummation of the transactions contemplated hereby and thereby by it have been duly authorized by all necessary action on its part.

 

13.1.3

This Agreement and the other agreements contemplated hereby to which it is a Party have been duly executed and delivered to the other Party and, subject to the due authorization, execution and delivery of such agreements by the other Party, this Agreement and such other agreements contemplated hereby constitute valid and binding obligations, enforceable against it in accordance with their respective terms, except as such enforcement may be affected by bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditor’s rights generally and except for general principles of equity.

 

13.1.4

The execution and delivery of this Agreement and the other agreements contemplated hereby do not, and the consummation of the transactions contemplated hereby and thereby will not, (i) conflict with, or result in any violation or breach of any provision of its organizational documents, (ii) conflict with or violate any applicable foreign, Federal, state and local statutes, judgments, decrees, laws, ordinances, rules, regulations, injunctions and orders (“Laws”) of any Canadian or U.S. provincial, federal, state, foreign or local government or any court, tribunal, administrative agency or commission or other governmental or regulatory authority, body or agency, including any self-regulatory organization (“Governmental Authorities”) applicable to it or any of its assets or operations or any permit applicable to it or (iii) (x) result in any violation or breach of, or constitute (with or without notice or lapse of time or both) a default under or conflict with (or give rise to a right of termination, amendment, cancellation or acceleration of any material obligation or loss of any benefit under) the provisions of any lease, contract or other agreement to which it is a Party or by which it or any of its properties or assets is otherwise bound or (y) result in the imposition of any lien, pledge, hypothecation, mortgage, security interest, claim,

 

 

lease, charge, option, right of first refusal or first offer, easement, servitude, transfer restriction, voting requirement or any other encumbrance, restriction or limitation on any of its properties or assets.

 

13.2	Representations and Warranties of Licensor

 

13.2.1

Licensor has not received from any Competent Authority or Governmental Authority any written notice of any pending or threatened investigation, review, or regulatory enforcement action (including seizure, injunction, civil penalty or criminal action) with respect to: (i) any alleged or actual violation by Licensor of any permit, Law or other requirement of any Governmental Authority relating to the operations conducted by Licensor with respect to any Licensed Product; or (ii) any alleged or actual failure to have or maintain in effect all permits required in connection with the operations conducted by Licensor with respect to any Licensed Product.

 

13.2.2

Licensor has not received from any Competent Authority or Governmental Authority any written notice regarding the approvability or approval of the Licensed Product.

 

13.2.3

The Licensed Product has been withdrawn, suspended or discontinued by Licensor as a result of any action by a Competent Authority or Governmental Authority, either within or outside the United States (whether voluntarily or otherwise).

 

13.2.4

With respect to the Licensed Product only, to the knowledge of Licensor, no officer, employee or agent of Licensor has made any untrue statement of a material fact or a fraudulent statement to a Competent Authority or failed to disclose any material fact required to be disclosed to a Competent Authority.

 

13.2.5

No Person has notified Licensor in writing of any material claim against Licensor alleging any personal, property or economic injury, loss or damage incurred as a result of or relating to the use of the Licensed Product.

 

13.2.6

There is no judgment, order, injunction, decree, writ or award against Licensor that is not satisfied and remains outstanding with respect to the Licensed Product.

 

13.2.7

Licensor has provided to Licensee a copy of each material license, contract or other agreement (together with certain other agreements) to which Licensor is a Party or by or to which any property of Licensor is otherwise bound or subject that relates to the Licensed Product or the Licensor’s Patent Rights.

 

 

13.2.8

Licensor is the exclusive owner of the Licensor’s Patent Rights and the Trademarks free and clear of all liens, charges, encumbrances or other restrictions or limitations of any kind whatsoever material to the uses of the Licensed Product and Licensor’s Patent Rights.

 

13.2.9

To the knowledge of Licensor, there are no licenses, options, restrictions, liens, rights of Third Parties, disputes, royalty obligations, proceedings or claims relating to, affecting, or limiting Licensor’s rights or the rights of Licensee under this Agreement, or which may lead to a claim of infringement by or invalidity regarding, any part or all of the Licensor’s Patent Rights or Licensor’s Know How, Trademarks or their use.

 

13.2.10

Licensor has not received notice of any claim, pending or threatened, of infringement, interference or invalidity regarding any part or all of the Licensor’s Patent Rights or Licensor’s Know-How or Trademarks or their use.

 

13.2.11

To the knowledge of Licensor, none of the Licensed Product, Licensor’s Patent Rights or Licensor’s Know-How infringes or conflicts with, and the Licensor has not received any notice of infringement of, or conflict with, any license, patent, copyright, trademark, service mark or other intellectual property right of any other entity and, to the knowledge of Licensor, there is no infringement or unauthorized use by any person of any of the Licensed Product, Licensor’s Patent Rights, Trademarks or Licensor’s Know How.

 

13.2.12

The validity or enforceability of any of the Licensor’s Patent Rights, Licensor’s Know-How and/or Trademarks or the title of the Licensor thereto has not been questioned in any litigation, governmental inquiry or proceeding to which the Licensor is a Party and, to the knowledge of Licensor, no such litigation, governmental inquiry or proceeding is threatened.

 

13.2.13

The Patent Rights itemized on Exhibit A set forth all of the patents and patent applications of Licensor Covering the Licensed Product in the Field of Use owned by or licensed to Licensor on the Effective Date.

 

13.2.14

The trademarks itemized on Exhibit B set forth all the trademarks used by the Licensor with respect to the Licensed Product on the Effective Date.

 

13.2.15

To the knowledge of Licensor, there are no inventors of Licensor’s Patent Rights other than those listed as inventors on applications filed for Licensor’s Patent Rights.

 

 

13.2.16

The Licensor’s Patent Rights and Licensor’s Know How were not supported in whole or part by funding or grants by any federal or state agency.

 

 

14.1	NO IMPLIED WARRANTIES

 

 

14.2	Licensee Indemnity

 

 

 

 

 

 

 

 

 

 

 

15.1	Use of Name

 

 

15.2

No Agency

 

 

 

16.1	Confidentiality and Non-Use

 

 

16.1.1

The receiving Party receives at any time from a Third Party lawfully in possession of same and having the right to disclose same;

 

16.1.2

is, as of the date of this Agreement, in the public domain, or subsequently enters the public domain through no fault of the receiving Party;

 

16.1.3

is independently developed by the receiving Party as demonstrated by written evidence without reference to information disclosed to the receiving Party by the disclosing Party;

 

16.1.4

is disclosed pursuant to the prior written approval of the disclosing Party; or

 

16.1.5

is required to be disclosed pursuant to Applicable Law or legal process (including, without limitation, to a Governmental Authority, including securities authorities) provided, in the case of disclosure pursuant to legal process, reasonable notice of the impending disclosure is provided to the disclosing Party.

 

 

16.2	Limited Disclosure by Licensor

 

 

 

17.1	Assignment

 

 

17.2	Binding Nature and Inurnment

 

 

17.3	Compliance with Applicable Laws

 

 

17.4	Counterparts; Facsimile

 

 

 

 

17.6	Force Majeure

 

 

17.7	Further Assurances

 

 

17.8

Law

 

 

17.9	No Consequential Damages

 

 

17.10

Payments, Notices and Other Communications

 

 

 

 

Torys LLP

 

17.11

Benefits of Bankruptcy Laws and Liquidated Damages

 

 

Each of Licensee and Licensor shall be responsible for their own expenses relating to the preparation and consummation of this Agreement and the agreements and transactions contemplated hereby.  Without limiting the foregoing, Pharma Immune, Inc. shall pay its own legal fees.

 

17.13

Severability

 

 

 

 

17.14

Waiver

 

 

17.15

Publicity

 

 

17.16

Witness

 

 

 

GENESENSE TECHNOLOGIES INC.	ZOR PHARMACEUTICALS, LLC
By: __________________________	By: __________________________
Name: Dr. Aiping H. Young	Name: _______________________
Title: President and CEO	Title: ________________________
Date: _______________________	Date: _______________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNITED STATES

11/247,026

PENDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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