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BIONUMERIK PHARMACEUTICALS, INC. - S-1/A - 20040824 - EXHIBIT_4
EXHIBIT 4.14
REGISTRATION RIGHTS AGREEMENT
This Agreement for Provision of Registration Rights (the
"Agreement") is executed effective as of the 19th day of January, 2001 by
BioNumerik Pharmaceuticals, Inc., a Texas corporation (the "Company").
WITNESSETH:
WHEREAS, the persons identified on Schedule A hereto as the
Warrant Purchasers (the "Warrant Purchasers") have purchased shares of Common
Stock (as defined herein) of the Company with the understanding that the Company
would grant certain registration rights to the Warrant Purchasers.
WHEREAS, the persons identified on Schedule A hereto as the
Purchasers (the "Purchasers") have purchased shares of the Company's Preferred
Stock (as defined herein) with the understanding that the Company would grant
certain registration rights to the Purchasers.
NOW, THEREFORE, the Company grants the registration rights
contained herein to the Warrant Purchasers, subject to the terms and conditions
contained herein:
1. CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, par value $.01 per share,
of the Company.
"Conversion Shares" means the shares of Common Stock issued upon
exercise of warrants held by the Warrant Purchasers and the shares of Common
Stock issued or issuable upon conversion of the Preferred Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Holders" means the Warrant Purchasers, the Purchasers and any
holder of Registrable Securities to whom the registration rights of the Warrant
Purchasers or the Purchasers have been properly transferred.
"Initiating Holders" means any Holder or Holders who in the
aggregate hold more than fifty percent (50%) of the then-outstanding Registrable
Securities, but no less than the number of Registrable Securities issued or
issuable upon conversion of twenty five percent (25%) of the total number of
shares of Preferred Stock issued by the Company to the Purchasers.
"Preferred Stock" means the Series E Convertible Preferred Stock,
par value $.01 per share, of the Company.
"Registrable Securities" means (i) the Conversion Shares and (ii)
any Common Stock issued as a dividend or other distribution with respect to or
in exchange for or in replacement of the Conversion Shares or Preferred Stock,
provided, however, that Registrable Securities shall not include any shares of
Common Stock which have previously been registered or which have been sold
pursuant to Rule 144.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Rule 144" means Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
"Series A Persons" means those persons entitled to registration
rights pursuant to Section 10 of the Preferred Stock Purchase Agreement dated
February 19, 1993 between BioNumerik Pharmaceuticals, Inc., a Delaware
corporation and predecessor by merger to the Company ("BioNumerik Delaware"),
and certain purchasers of its securities, as amended.
"Series B Persons" means those persons entitled to registration
rights pursuant to that certain Registration Rights Agreement (the "Series B
Registration Rights Agreement") dated as of August 8, 1994 and relating to
registration rights granted by BioNumerik Delaware to purchasers of its Series B
Convertible Preferred Stock.
"Series C Persons" means those persons entitled to registration
rights pursuant to that certain Registration Rights Agreement (the "Series C
Registration Rights Agreement") dated as of August 24, 1995 and relating to
registration rights granted by the Company to purchasers of its Series C
Convertible Preferred Stock.
"Series D Persons" means those persons entitled to registration
rights pursuant to that certain Registration Rights Agreement (the "Series D
Registration Rights Agreement") dated as of July 10, 1996 and relating to
registration rights granted by the Company to purchasers of its Series D
Convertible Preferred Stock.
"Series F Persons" means (i) those persons entitled to
registration rights pursuant to that certain Registration Rights Agreement (the
"Grelan Series F Registration Rights Agreement") dated as of October 28, 1999
between the Company and Grelan Pharmaceutical Co., Ltd. ("Grelan"), and (ii)
those persons other than Grelan who are entitled to registration rights pursuant
to that certain Registration Rights Agreement (the "Series F Registration Rights
Agreement") dated as of March 14, 2000 and relating to registration rights
granted by the Company to purchasers of its Series F Convertible Preferred
Stock.
"Series G Persons" means those persons entitled to registration
rights pursuant to certain Registration Rights Agreements (the "Series G
Registration Rights Agreements") relating to registration rights granted by the
Company to purchasers of its Series G Convertible Preferred Stock.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
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For purposes of the definitions of "Holder" and "Initiating
Holders" above, holders of Preferred Stock shall be deemed to be the holders of
Registrable Securities issuable upon conversion thereof; and for the purpose of
calculating any percentage of Registrable Securities, the calculation shall be
made as if the Preferred Stock had been fully converted.
2. REGISTRATION OF REGISTRABLE SECURITIES.
2.1 Registration on Request.
(a) Request. Subject to the limitations provided herein,
following September 1, 1998, or on the first anniversary of the effective date
of the Company's first registration statement under the Securities Act,
whichever shall first occur, until the fifth anniversary of the effective date
of the Company's first registration statement under the Securities Act, upon the
written request (specifying that it is being made pursuant to this Section 2.1)
of the Initiating Holders, requesting that the Company effect the registration
under the Securities Act of at least fifty percent (50%) of the then-outstanding
Registrable Securities, but no less than the number of Registrable Securities
issued or issuable upon conversion of twenty five percent (25%) of the total
number of shares of Preferred Stock issued by the Company to the Purchasers, and
specifying (x) the intended method of disposition thereof, (y) whether or not
such requested registration is to be an underwritten offering, and (z) the price
range (net of underwriting discounts and commissions) acceptable to such Holder
or Holders to be received for such Registrable Securities, the Company will
within 10 business days after the Company receives such written request give
written notice of such requested registration to all other Holders of
Registrable Securities and thereupon the Company will use reasonable efforts to
effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders, and
(ii) all other Registrable Securities which the Company has
been requested to register by the other Holders thereof by written
request given to the Company within 15 days after the giving of such
written notice by the Company (which request shall specify the same
information called for by the original request to effect registration
described above), all to the extent requisite to permit the disposition
(in accordance with Section 2.1(b) hereof) of the Registrable
Securities so to be registered.
(b) Method of Distribution. The Holders of 51% of the
Registrable Securities to be included in such registration statement shall
determine the method of distribution of the Registrable Securities so included;
provided, however, that if no agreement of Holders of 51% or more of the
Registrable Securities to be included in such registration statement is
obtained, then if Holders of more than 30% of the Registrable Securities to be
included in such registration statement request an underwritten public offering,
an underwritten public offering shall be the method of distribution with other
methods permitted to the extent the managing underwriter for such offering, in
its sole discretion, agrees to other methods of distribution being covered by
such registration statement.
(c) Registration of Other Securities. Whenever the Company
shall effect a registration pursuant to this Section 2.1 in connection with an
underwritten offering, no securities other than Registrable Securities shall be
included among the securities covered by such registration unless (i) the
managing underwriter of such offering shall have advised each Holder of
Registrable
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Securities to be covered by such registration in writing that the inclusion of
such other securities would not adversely affect such offering or (ii) the
Holders of more than 51% or more of all Registrable Securities to be covered by
such registration shall have consented in writing to the inclusion of such other
securities; provided, however, that the rights of Holders hereunder shall be
subject to (A) the prior right of Series A Persons requesting registration
(whether pursuant to "demand" or "piggyback" registration rights) to include all
of the securities requested to be registered by such Series A Persons in such
registration, and (B) the concurrent right of Series B Persons, Series C
Persons, Series D Persons, Series F Persons, and Series G Persons requesting
registration pursuant to the Series B Registration Rights Agreement, the Series
C Registration Rights Agreement, the Series D Registration Rights Agreement, the
Series F Registration Rights Agreement, the Grelan Series F Registration Rights
Agreement, and/or the Series G Registration Rights Agreements (whether pursuant
to "demand" or "piggyback" registration rights) to include securities in such
registration on a pro rata basis with the Registrable Securities of Holders to
be included in such registration, so that the relative proportion of the amount
of securities held by Series B Persons, Series C Persons, Series D Persons,
Series F Persons, Series G Persons and Holders that are actually included in
such registration is the same as the relative proportion of the total amount of
securities held by Series B Persons, Series C Persons, Series D Persons, Series
F Persons, Series G Persons and Holders that are requested to be included in
such registration pursuant to the Series B Registration Rights Agreement, the
Series C Registration Rights Agreement, the Series D Registration Rights
Agreement, the Series F Registration Rights Agreement, the Grelan Series F
Registration Rights Agreement, the Series G Registration Rights Agreements or
Registration Rights Agreements with the Holders, as the case may be.
(d) Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate registration form of the Commission (i)
as shall be selected by the Company, and (ii) as shall permit the disposition of
such Registrable Securities in accordance with the method or methods of
disposition selected pursuant to Section 2.1(b) hereof.
(e) Expenses. Except as otherwise provided in this Section
2.1(e) or in Section 2.1(i), the Company shall bear all expenses incurred in
connection with two effective registrations pursuant to Section 2.1 hereof and
each registration pursuant to Section 2.2 hereof (excluding in each case
underwriting discounts and commissions applicable to Registrable Securities),
including, without limitation, in each case: (i) all registration, filing and
National Association of Securities Dealers fees; (ii) all fees and expenses of
complying with securities or blue sky laws; (iii) all word processing,
duplicating and printing expenses, messenger, delivery and shipping expenses;
(iv) the fees and disbursements of the accountants and counsel for the Company
including the expenses of any special audits or "cold comfort" letters or
opinions required by or incident to such registrations; (v) the fees and
disbursements of the accountants and counsel for the Company for services
rendered in connection with inclusion of Registrable Securities in the
registration; provided, however, that if the accountants or the counsel for the
Company refuse or decline to undertake such representation because of an actual
or perceived conflict of interest or otherwise, then the Company shall bear the
reasonable fees and disbursements of one firm of counsel and one firm of
accountants (as appropriate) retained by the Holders of such Registrable
Securities; (vi) premiums and other costs of policies of insurance maintained
for the benefit of the Company against liabilities arising out of the public
offering of the Registrable Securities; (vii) any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions, if any. In all cases, each Holder of
Registrable Securities shall pay the underwriting discounts and commissions
applicable to the securities sold by such Holder.
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(f) Effective Registration Statement. The Company's obligation
to effect a registration requested pursuant to this Section 2.1 shall not be
deemed to have been fulfilled (i) unless a registration statement with respect
thereto has become effective (unless a substantial cause of the failure of such
registration statement to become effective shall be attributable to one or more
Holders of Registrable Securities whose securities were to have been included in
such registration statement), (ii) if after it has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason, resulting in a failure to consummate the offering of Registrable
Securities offered thereby, (iii) if after a registration statement with respect
thereto has become effective, the offering of Registrable Securities offered
thereby is not consummated due to factors beyond the control of the Holders of
such Registrable Securities, including without limitation in the context of a
proposed firm commitment underwriting, the fact that the underwriters have
advised the Holders of such Registrable Securities that such Registrable
Securities cannot be sold at a net price equal to or above the net price
specified in the notice to the Company at the time of the request, or (iv) if
the conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied
(unless a substantial cause of such conditions to closing not being satisfied
shall be attributable to one or more Holders of Registrable Securities whose
Registrable Securities were included in such registration statement).
(g) Selection of Underwriters. If a requested registration
pursuant to this Section 2.1 involves an underwritten offering, the underwriter
or underwriters thereof shall be selected by the Company with the approval of
the Holders of at least 50% of the Registrable Securities to be so registered,
which approval will not be unreasonably withheld.
(h) Priority in Requested Registrations. If a requested
registration pursuant to this Section 2.1 involves an underwritten offering, and
the managing underwriter shall advise the Company in writing (with a copy to
each Holder requesting registration) that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering within a price range acceptable to the
Holders of more than 50% of the Registrable Securities requested to be included
in such registration, then the Registrable Securities requested to be registered
pursuant to this Section 2.1 shall be reduced to the number of Registrable
Securities which the Company is so advised can be sold in (or during the time
of) such offering by decreasing the Registrable Securities requested to be
registered (pro rata among the Holders requesting such registration on the basis
of the percentage of the Registrable Securities held by such Holder immediately
prior to the filing of the registration statement with respect to such
registration). Nothing in this Section 2.1(h) shall affect (i) the rights of
Series A Persons requesting registration to include all of the securities
requested to be registered by such Series A Persons in such registration without
reduction prior to the inclusion of any Registrable Securities requested to be
registered hereunder, or (ii) the rights of Series B Persons, Series C Persons,
Series D Persons, Series F Persons, and Series G Persons requesting registration
to include securities in such registration on a pro rata basis with the
Registrable Securities of Holders hereunder in the same manner as described in
Section 2.1(c) hereof.
(i) Form S-3. Notwithstanding the other provisions of this
Section 2.1, until the fifth anniversary of the effective date of the Company's
first registration statement under the Securities Act, the Company shall be
required upon the written request of Holder(s) by this Section 2.1 to effect,
and bear all expenses (as determined pursuant to Section 2.1(e) hereof) incurred
in connection with, up to
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two registrations on Form S-3 (or any successor similar form) of Registrable
Securities during such period, provided that the Registrable Securities to be
registered thereon are expected to have an aggregate disposition price (before
deductions for underwriting discounts and commissions) of at least $500,000.
(j) Notwithstanding anything to the contrary contained herein,
the Company shall not be obligated to prepare and file any other registration
statement pursuant to this Section 2.1 within 180 days of the consummation of an
underwritten public offering of Common Stock pursuant to a registration
statement filed under the Securities Act.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at
any time prior to the fifth anniversary of the effective date of the Company's
first registration statement under the Securities Act proposes to register any
of its securities under the Securities Act (other than by a registration on Form
S-8, S-4 or any successor similar forms or any other form not available for
registering the Registrable Securities for sale to the public and other than
pursuant to Section 2.1 hereof), whether or not for sale for its own account, it
will each such time, at least 15 days prior to filing the registration
statement, give written notice to all Holders of Registrable Securities of its
intention to do so. Upon the written request of Holders of an aggregate of at
least 25,000 shares (appropriately adjusted for subdivisions and combinations of
shares of Common Stock and dividends on Common Stock payable in shares of Common
Stock hereafter) of Registrable Securities, made within 15 days after the
receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by each such Holder and the intended
method of disposition thereof), the Company will use reasonable efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by the Holders of such
Registrable Securities, to the extent requisite to permit the disposition
(determined pursuant to the provisions of Section 2.1(b) hereof) of the
Registrable Securities so to be registered, provided that if, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to each Holder of Registrable Securities
and, thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay expenses in
accordance with Section 2.1(e) hereof), without prejudice, however, to the
rights of any Holder or Holders of Registrable Securities entitled to do so to
request that such registration be effected as a registration under Section 2.1
hereof, and (ii) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities being registered
pursuant to this Section 2.2(a), for the same period as the delay in registering
such other securities. No registration effected under this Section 2.2 shall
relieve the Company of its obligation to effect any registration upon request
under Section 2.1 hereof.
(b) Priority in Incidental Registrations. If (i) a
registration pursuant to this Section 2.2 involves an underwritten offering of
the securities so being registered, whether or not for sale for the account of
the Company, to be distributed (on a firm commitment basis) by or through one or
more underwriters of recognized standing, whether or not the Registrable
Securities so requested to be
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registered for sale for the account of Holders of Registrable Securities are
also to be included in such underwritten offering, and (ii) the managing
underwriter of such underwritten offering shall inform the Company and the
Holders of the Registrable Securities requesting such registration by letter of
its belief that the number of securities requested to be included in such
registration exceeds the number which can be sold in (or during the time of)
such offering, then the Company may include in such offering all securities
proposed by the Company to be sold for its own account and may decrease the
number of Registrable Securities and other securities of the Company that
persons have requested to be included in such registration by (a) first
decreasing the securities requested to be included in such registration other
than Registrable Securities (pro rata among the persons requesting such
registration on the basis of the number of shares of such securities held by
such person immediately prior to the filing of the registration statement with
respect to such registration) and (b) then, to the extent necessary, decreasing
the Registrable Securities requested to be registered (pro rata among the
Holders requesting such registration on the basis of the percentage of the
Registrable Securities held by such Holders immediately prior to the filing of
the registration statement with respect to such registration); provided,
however, that the rights of Holders hereunder shall be subject to (i) the right
of the Series A Persons requesting inclusion of securities in such registration
to include all of the securities requested to be registered by such Series A
Persons in such registration without reduction prior to the inclusion of any
Registrable Securities requested to be included in such registration pursuant to
this Section 2.2., and (ii) the rights of Series B Persons, Series C Persons,
Series D Persons, Series F Persons, and Series G Persons requesting registration
to include securities in such registration on a pro rata basis with the
Registrable Securities of Holders hereunder in the same manner as described in
Section 2.1(c) hereof.
2.3 Registration Procedures. If and whenever the Company is
required to use reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2 hereof,
the Company will, subject to the limitations provided herein, as expeditiously
as possible:
(a) prepare and (as soon thereafter as possible or in any
event no later than 60 days after the end of the period within which
requests for registration may be given to the Company or such longer
period as the Company shall in good faith require to produce the
financial statements required in connection with such registration)
file with the Commission the requisite registration statement to effect
such registration and thereafter use reasonable efforts to cause such
registration statement to become effective, provided that the Company
may discontinue any registration of its securities which are not
Registrable Securities (and, under the circumstances specified in
Section 2.2(a) hereof, its securities which are Registrable Securities)
at any time prior to the effective date of the registration statement
relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement until such time as all of such securities have
been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof set forth in such registration
statement; provided, however, that the Company shall not in any event
be required to keep the registration statement effective for a period
of more than three months after such registration statement becomes
effective;
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(c) furnish to each seller of Registrable Securities covered
by such registration statement such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, and such
other documents, as such seller may reasonably request;
(d) use reasonable efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such jurisdictions as each seller thereof shall reasonably request, to
keep such registration or qualification in effect for so long as such
registration statement remains in effect (provided, however, that the
Company shall not in any event be required to keep such registration or
qualification in effect for a period of more than three months after
such registration or qualification becomes effective), and take any
other action which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for
the requirements of this subdivision (d) be obligated to be so
qualified or to consent to general service of process in any such
jurisdiction;
(e) use reasonable efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other United States federal or state governmental
agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Registrable
Securities;
(f) furnish to each seller of Registrable Securities a copy,
or, upon request, a signed counterpart, addressed to such seller (and
the underwriters, if any) of
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement (or, if such
registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement), and
(ii) a "comfort" letter addressed to the
underwriters, dated the effective date of such registration
statement (or, if such registration includes an underwritten
public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public
accountants who have audited the Company's financial
statements included in such registration statement, covering
substantially the same matters with respect to such
registration statement (and the prospectus included therein)
and, in the case of the accountants' letter, with respect to
events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in
underwritten public offerings of securities and, in the case
of the accountants' letter, such other financial matters, and,
in the case of the legal opinion such other legal matters, as
such seller or such Holder (or the underwriters, if any) may
reasonably request;
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(g) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any
such seller, prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made;
(h) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the Commission, and, if required
under applicable regulations, make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months beginning with the first full calendar
month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act, and will furnish to each such seller, upon request of
such seller, prior to the filing thereof a copy of any amendment or
supplement to such registration statement or prospectus and shall not
file any such supplement or amendment if such seller shall have
delivered to the Company an opinion of counsel that such amendment or
supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder;
(i) provide and cause to be maintained a transfer agent for
all Registrable Securities covered by such registration statement from
and after a date not later than the effective date of such registration
statement;
(j) use reasonable efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on
which the Common Stock is then listed; and
(k) refrain from making any sale or distribution of its equity
securities, except pursuant to any employee stock option plan or other
employee benefit plan and any preexisting agreement for the sale of
such securities, for at least 90 days after the closing of the public
offering pursuant to such registration.
It shall be a condition precedent to the obligations of the
Company to take any action with respect to registering a Holder's Registrable
Securities pursuant to this Section 2.3 that such seller of Registrable
Securities as to which any registration is being effected furnish the Company in
writing such information regarding such seller, the Registrable Securities and
other securities of the Company held by such seller, and the distribution of
such securities as the Company may from time to time reasonably request in
writing. If a Holder refuses to provide the Company with any of such information
on the grounds that it is not necessary to include such information in the
registration statement, the Company may exclude such Holder's Registrable
Securities from the registration statement if the Company provides such Holder
with an opinion of counsel to the effect that such information must be included
in the registration statement and such Holder thereafter continues to
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withhold such information. The deletion of such Holder's Registrable Securities
from a registration statement shall not affect the registration of the other
Registrable Securities to be included in such registration statement.
Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 2.3(g), such Holder
will forthwith discontinue such Holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 2.3(g) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant to
a registration requested under Section 2.1 hereof, the Company will enter into
an underwriting agreement with such underwriters for such offering, the portions
of such agreement that relate to Holders of Registrable Securities being
registered to be reasonably satisfactory in substance and form to each Holder of
Registrable Securities being registered and to contain such representations and
warranties by the Company and such other terms as are generally prevailing in
agreements of this type, including, without limitation, indemnities
substantially to the effect and to the extent provided in Section 2.6 hereof.
Each such Holder of Registrable Securities will cooperate with the Company in
the negotiation of the underwriting agreement and will give consideration to the
reasonable requests of the Company regarding the form thereof, provided that
nothing herein contained shall diminish the foregoing obligations of the
Company. If requested by the underwriters of any underwritten offering pursuant
to a registration under Section 2.1 hereof, each Holder of Registrable
Securities agrees by acquisition of such Registrable Securities to enter into an
agreement with such underwriters not to sell his or its shares of stock in the
Company for a period of time (not to exceed 180 days) after the effectiveness of
a registration statement equal to the period of time which the sellers of
securities in such registration, by separate agreement with the underwriters,
have agreed not to sell their shares after the effectiveness of such
registration statement. The Holders of Registrable Securities to be distributed
by such underwriters shall be parties to such underwriting agreement. Any such
Holder shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, such Holder's Registrable
Securities and other securities of the Company, such Holder's intended method of
distribution, and any representations, warranties or agreements required by law.
(b) Incidental Underwritten Offerings. If the Company at any
time proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 hereof and such securities are to be distributed by
or through one or more underwriters, the Company will, if requested by any
Holder of Registrable Securities as provided in Section 2.2 hereof and subject
to the provisions of Section 2.2(b) hereof, arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such Holder
owning the securities to be distributed by such underwriters. In such event, the
Holders of Registrable Securities to be distributed by such underwriters shall
be parties to the underwriting agreement between the Company and such
underwriters. Any such Holder shall not
10
be required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such Holder, such Holder's Registrable Securities or other securities
of the Company, such Holder's intended method of distribution and any
representations, warranties or agreements required by law.
2.5 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the Holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and one counsel or firm of counsel and one accountant or firm of
accountants representing all the Holders of Registrable Securities to be
registered under such registration statement, the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto,
and will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.6 Indemnification.
(a) Indemnification by the Company. In the event any
Registrable Securities are included in a registration statement under this
Section 2, to the extent permitted by law, the Company will, and hereby does,
indemnify and hold harmless the seller of any Registrable Securities covered by
such registration statement, its directors and officers, each other person who
participates as an underwriter in the offering or sale of such securities and
each other person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller or any such director or
officer or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such seller and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
seller expressly for use in the preparation thereof, and provided further that
the Company shall not be liable to any person who participates as an underwriter
in the offering or sale of Registrable Securities or any other Person, if any,
who controls such underwriter within the meaning of the Securities Act, in any
such case to the extent that any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense arises out of such person's failure
to send or give a
11
copy of the final prospectus, as the same may be then supplemented or amended,
to the person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of the Registrable Securities to such person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller
or any such director, officer, underwriter or controlling person and shall
survive the transfer of such securities by such seller.
(b) Indemnification by the Sellers. The Company may require,
as a condition to including any Registrable Securities in any registration
statement filed pursuant to Section 2.3 hereof, that the Company shall have
received an undertaking satisfactory to it from the prospective seller of such
securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subdivision (a) of this Section 2.6) each underwriter,
each person who controls such underwriter within the meaning of the Securities
Act, the Company, each director of the Company, each officer of the Company and
each other person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in strict conformity
with written information furnished to the Company by such seller expressly for
use in the preparation of such registration statement, preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement; provided that
such prospective seller shall not be liable to any person who participates as an
underwriter in the offering or sale of Registrable Securities or any other
person, if any, who controls such underwriter within the meaning of the
Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, to the person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect, regardless of any
investigation made by or on behalf of any underwriter, the Company or any such
director, officer or controlling person and shall survive the transfer of such
securities by such seller. In no event shall the liability of any selling holder
of Registrable Securities under this Section 2.6(b) be greater in amount than
the dollar amount of the proceeds received by such holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 2.6,
as a condition to the obligations of the indemnifying party with respect
thereto, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the latter of the
commencement of such action; provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under the preceding subdivisions of this Section 2.6, except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the
12
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this Section 2.6 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental
authority other than the Securities Act.
(e) Indemnification Payments. The indemnification required by
this Section 2.6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(f) Contribution. If the indemnification provided for in this
Section 2.6 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any action in question, including any untrue
statement of material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 2.6(c) hereof, any legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The Company and, as a condition to the registration of any of
their Registrable Securities, the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 2.6(f) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 2.6(f), no underwriter
shall be required to contribute any amount in excess of the amount by which the
aggregate total price at which the Registrable Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and no
selling Holder shall be required to contribute any amount in excess of the
amount by which the aggregate total price at which the Registrable Securities of
such selling Holder were offered to the public exceeds the amount of any damages
which such selling Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission. No person guilty of fraudulent
misrepresentation (within the
13
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
2.7 Reporting Requirements Under Exchange Act. When it is
first legally required to do so, the Company shall register its Common Stock
under Section 12 of the Exchange Act (as hereinabove defined) and shall keep
effective such registration and shall timely file such information, documents
and reports as the Commission may require or prescribe under Section 13 of the
Exchange Act. From and after the effective date of the first registration
statement filed by the Company under the Securities Act, the Company shall
(whether or not it shall then be required to do so) timely file such
information, documents and reports which a corporation, partnership or other
entity subject to Section 13 or 15(d) (whichever is applicable) of the Exchange
Act is required to file.
Immediately upon becoming subject to the reporting
requirements of either Section 13 or 15(d) of the Exchange Act, the Company
shall forthwith upon request furnish any Holder of Registrable Securities (i) a
written statement by the Company that it has complied with such reporting
requirements, (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents filed by the Company with
the Commission as such Holder may reasonably request in availing itself of an
exemption for the sale of Registrable Securities without registration under the
Securities Act. The Company acknowledges and agrees that the purposes of the
requirements contained in this Section 2.7 are (a) to enable any such Holder to
comply with the current public information requirement contained in Paragraph
(c) of Rule 144 should such Holder ever wish to dispose of any of the securities
of the Company acquired by it without registration under the Securities Act in
reliance upon Rule 144 (or any other similar exemptive provision) and (b) to
qualify the Company for the use of registration statements on Form S-3. In
addition, the Company shall take such other measures and file such other
information, documents and reports, as shall hereafter be required by the
Commission as a condition to the availability of Rule 144 under the Securities
Act (or any similar exemptive provision hereafter in effect) and the use of Form
S-3. The Company also covenants to use reasonable efforts, to the extent that it
is reasonably within its power to do so, to qualify for the use of Form S-3.
2.8 Shareholder Information. The Company may require each
Holder of Registrable Securities as to which any registration is to be effected
pursuant to this Section 2 to furnish the Company such information in writing
with respect to such Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request in writing and as shall
be required by law or by the Commission in connection therewith.
2.9 Forms. All references in this Agreement to particular
forms of registration statements are intended to include, and shall be deemed to
include, references to all successor forms which are intended to replace, or to
apply to similar transactions as, the forms herein referenced.
2.10 Transfer of Registration Rights. The registration rights
granted to the Holders of Registrable Securities under this Section 2 may not be
transferred without the prior written consent of the Company; provided that such
registration rights may be transferred, in whole or in part, without such prior
written consent in connection with the transfer of Registrable Securities to (i)
an affiliate (defined as any person which directly or indirectly controls, is
controlled by, or is under common control with such Holder) of one or more of
the Holders or (ii) to an immediate or remote transferee of a Holder who after
such transfer is the Holder of at least 50% of the number of Registrable
14
Securities purchased by such original Holder hereunder as set forth on Schedule
A hereto (appropriately adjusted for subdivisions and combinations of shares of
Common Stock and dividends on Common Stock payable in shares of Common Stock
subsequent to the date of this Agreement).
3. MISCELLANEOUS.
3.1 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE CONFLICT OF
LAWS PRINCIPLES THEREOF.
3.2 Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors and assigns of the parties hereto.
3.3. Amendment. Except as expressly provided herein, this
Agreement, or any provision hereof, may be amended, waived, discharged or
terminated upon the written consent of the Company and the Holders holding at
least fifty percent (50%) of the then outstanding Registrable Securities.
3.4 Notices, etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be mailed by first
class mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed (a) if to a
Holder, at such Holder's address set forth on Schedule A hereto, or at such
other address as such party shall have furnished to the Company in writing, or
(b) if to the Company at 8122 Datapoint Drive, Suite 1250, San Antonio, Texas
78229, Attn: Chief Executive Officer, or at such other address as the Company
shall have furnished to the other parties hereto.
Each such notice or other communication shall for all purposes
of this Agreement be treated as effective upon receipt, if delivered personally
or by courier, or, if sent by mail, at the earlier of its receipt or 48 hours
after same has been deposited in a regularly maintained receptacle for deposit
of the United States mail, addressed and mailed as aforesaid.
3.5 Delays or Omissions. Except as expressly provided herein,
no delay or omission to exercise any right, power or remedy accruing to any
party to this Agreement shall impair any such right, power or remedy of such
party nor shall it be construed to be a waiver of any such breach or default, or
an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any party to this Agreement, shall be cumulative and not
alternative.
3.6 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision.
15
3.7 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not considered in
construing or interpreting this Agreement.
IN WITNESS WHEREOF, this Registration Rights Agreement has been
executed by the undersigned effective upon the date first set forth above.
"COMPANY"
BIONUMERIK PHARMACEUTICALS, INC.
By: /s/ FREDERICK H. HAUSHEER
---------------------------------------
Title: Chief Executive Officer
------------------------------------
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16
SCHEDULE A
WARRANT PURCHASERS
WARRANT PURCHASER SHARES COMMON STOCK
----------------- -------------------
Mitchell D. Silber 2,232
345 E. 69th St. PH-A New York, NY 10021
Wayne P. Rothbaum 2,232
156 West 56th St., 10th Floor New York, NY 10019
Carson Graham Geliebter 2,233
319 Algonquin Rd. Franklin Lakes, NJ 07417
Samuel A. Ganeles 1,116
7 Stony Brook Place Armonk, NY 10504
Jared M. Ganeles 1,116
7 Stony Brook Place Armonk, NY 10504
|
17
SCHEDULE A
PURCHASERS
PURCHASER SERIES E SHARES
--------- ---------------
B.P. Investment Partners III, L.P. 178,575
ATTN: Donald Mundie
60 Germantown Court, Suite 200 Cordova, TN 38018-7239
Clearwater Offshore Fund Ltd. 142,857
Euro Canadian Centre
Marlborough Street
P.O. Box N-4465 Nassau, Bahamas
LOR, Inc. 35,715
2170 Piedmont Road Atlanta, GA 30324
Gary W. Rollins 7,143
ATTN: Chris Allen
2170 Piedmont Road Atlanta, GA 30324
R. Randall Rollins 7,143
ATTN: Chris Allen
2170 Piedmont Road Atlanta, GA 30324
Neal M. Allen 8,000
c/o Nations Bank
ATTN: Monja Dunlap
600 Peachtree Street, N.E., Suite 1100 Atlanta, GA 30308-2214
William M. Ragland, Jr. 4,500
929 Glenbrook Drive Atlanta, GA 30318
Frances M. Schultz 3,572
1 Peachtree Battle Avenue No. 10 Atlanta, GA 30305
Chris G. Allen 1,000
1291 W. Wesley Road Atlanta, GA 30327
Richard S. Whitlock & Maura Whitlock JTWROS 10,814
4009 Pine Street Pascagoula, MS 39567
Charles R. & Margaret B. Weniger JTWROS 7,143
2220 Mermaid Pt. NE St. Petersburg, FL 33703
|
18
Sharon R. Derochers 7,143
10810 Teton Lane San Antonio, TX 78230
Missouri Cardiovascular Specialists FBO Jerry D. Kennett, M.D. 6,400
c/o Central Trust Bank
ATTN: Trust Operations
212 East High Street Jefferson City, MO 65102
Jerry D. Kennett, M.D. Pension Plan 1,200
c/o Central Trust Bank
ATTN: Trust Operations
212 East High Street Jefferson City, MO 65102
Jerry D. Kennett, M.D. Profit Sharing Plan 1,500
c/o Central Trust Bank
ATTN: Trust Operations
212 East High Street Jefferson City, MO 65102
Margaret A. Troyer 5,360
27505 Boerne Cave Road Boerne, TX 78006
Mark B. Wildermuth 4,286
9 Union Wharf Boston, MA 02109
Donald E. Kiernan 3,572
11643 Elm Ridge Road San Antonio, TX 78230
Wendt Family Revocable Trust Dtd. 11/15/96 3,571
4900 West Dry Creek Rd. Healdsburg, CA 95448
Susan A. Noonan & Anthony J. Russo, as tenants in common 3,571
c/o Noonan/Russo Communications, Inc.
220 Fifth Avenue New York, NY 10001
Barbara L. Lindheim & Michael J. Capek 2,143
142 West End Avenue, 27P New York, NY 10023
Gulf Coast Urology Clinic P/S Plan, Mark S. Lyell M.D. Trustee 2,000
c/o Morgan Keegan
ATTN: Charles E. Bailey
21 N. Beltline Hwy. Mobile, AL 36608
Robert H. Ewald 2,000
96 Mulberry Lane Atherton, CA 94027
|
19
Dennis and Beth L. Abernathie 1,786
400 Keene St. Columbia, MO 65201
Richfield Bank & Trust Co., 1,070
TTEE FBO Lon J. Lutz, M.D. IRA R/O
6625 Lyndale Avenue S Richfield, MN 55423
Michael D. Kamitsuka 1,071
22612 NE 23rd Pl Redmond, WA 98053
Edward Jones Custodian FBO Kimberly Jamison IRA #639-90449-1-3 1,428
ATTN: Elizabeth Little
201 Progress Parkway Maryland Heights, MO 63043
Louis Herbert Stumberg, Jr. 2,000
310 S. St. Mary's Street
Suite 1290 San Antonio, TX 78205
James R. Leininger 285,715
8122 Datapoint Drive
Suite 900 San Antonio, Texas 78229
Peter A. Leininger 114,286
103 Tomahawk Trail San Antonio, Texas 78232
Clearwater Fund I, L.P. 214,286
611 Druid Road East
Suite 200 Clearwater, Florida 33756
Charles Schwab & Co., Inc. 14,400
FBO Robert A. Frist, M.D. IRA R/O
ATTN: Brad Shafer San Francisco, CA 94104
101 Montgomery Street
Joseph A. Pedone Profit Sharing Plan dtd 12/29/95 3,600
4105 Hospital Street
Suite 110 Pascagoula, MS 39568
Joseph A. & Kimberly C. Pedone JTWROS 3,571
4105 Hospital Street
Suite 110 Pascagoula, MS 39568
The Scott and Maggie Sledge Partnership, Ltd. 2,500
15 Court Circle San Antonio, Texas 78209
|
20
Mark S. & Johnette C. Lyell JTWROS 2,000
3501 Montgomery Lane Pascagoula, MS 39567
First National Bank of Onaga 2,000
C/F Kris Tufto IRA #4100650100
301 Leonard Street
P.O. Box 420 Onaga, Kansas 66521-0420
Richfield Bank & Trust Co., 358
TTEE FBO Lon J. Lutz, M.D. IRA R/O
6625 Lyndale Avenue S Richfield, MN 55423
Joe R. Colingo and wife, Johnette W. Colingo, JTWROS 7,000
3519 Southwood Avenue Pascagoula, MS 39567
Roy C. Williams 5,000
816 Harbor Lane Pascagoula, MS 39567
Colingo, Williams, Heidelberg, Steinberger & McElhaney, P.A. 2,000
401(k) Profit Sharing Plan for benefit of Joe R. Colingo
711 Delmas Avenue Pascagoula, MS 39567
|
21
EXHIBIT 9.1
VOTING TRUST AGREEMENT
This Voting Trust Agreement (this "Agreement"), dated as of April 1,
2003, is entered into by and between Gopal M. Nair ("Shareholder") and Donald M.
Delwood ("Trustee") for the purpose of creating a voting trust of certain shares
of Common Stock of BioNumerik Pharmaceuticals, Inc. (the "Voting Trust").
PRELIMINARY STATEMENTS
Shareholder is the owner of 75,000 shares of Common Stock, par value
$0.01 per share (the "Shares") of BioNumerik Pharmaceuticals, Inc., a Texas
corporation (the "Company").
Shareholder has entered into that one certain Settlement Agreement
dated April 1, 2003 (the "Settlement Agreement"), by and between Shareholder and
the Company pursuant to which the Shareholder has agreed to transfer the Shares
to a Voting Trust to be held and administered under the terms thereof. A copy of
the Settlement Agreement is attached hereto as Exhibit A and incorporated herein
for all purposes.
Donald M. Delwood has agreed to serve as Trustee of the Voting Trust.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good, valuable and binding consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
Section 1. Assignment, Delivery and Transfer of Shares; Issuance of
Voting Trust Certificates. Simultaneously with the execution of this Agreement,
Shareholder will assign and deliver to Trustee a certificate representing 75,000
shares of Common Stock of the Company. Trustee shall cause the Shares to be
transferred to the Trustee on the books of the Company and shall issue and
deliver to Shareholder a certificate for the number of shares transferred to
Trustee in substantially the form indicated on Exhibit B attached hereto
("Voting Trust Certificate").
Section 2. Deposit of Additional Shares. Upon receipt of any additional
shares of Common Stock or other securities of the Company subsequent to the date
of this Agreement, Shareholder shall deposit with Trustee the certificates
representing such additional shares, and Trustee shall cause the transfer to be
recognized on the books of the Company and shall issue and deliver to
Shareholder a Voting Trust Certificate representing the number of shares
transferred.
Section 3. Voting by Trustee. During the period of this Agreement,
Trustee shall have the exclusive right to vote the Shares or give written
consent, in person or by proxy, at all meetings of the shareholders of the
Company, and in all proceedings in which the vote or written consent of
shareholders of the Company may be required or authorized by law. On each matter
presented to him for vote, the Trustee shall be required to vote the Shares in a
manner so that the percentage of the Shares voted in favor of a particular
matter and the percentage of the Shares voted against a particular matter by the
Trustee equals the percentage of the total number of shares of stock (including
Common Stock and Preferred Stock, if any) of the Company voted in favor of that
particular matter and the percentage of the total number of shares of stock of
the Company voted against that particular matter.
Section 4. Dividends. In the event that the Company issues dividends,
Trustee shall accept and receive such dividends for the benefit of Shareholder,
and shall thereafter deliver such dividends to Shareholder; provided, however,
in the event that the dividends are in the form of share certificates having
voting rights, Trustee shall not deliver the share certificates to Shareholder,
but shall instead retain the share certificates and issue a new Voting Trust
Certificate representing the share dividends.
Section 5. Termination of the Trust. The Voting Trust shall terminate
on the earliest occurrence of any of the following:
(a) A vote for termination by a majority of the Board of Directors
of the Company;
(b) Six (6) months and seven (7) days after the effective date of
a Registration Statement of the Company filed under the Securities Act of 1933,
as amended (the "Securities Act") and including securities to be sold on behalf
of the Company to the public in a firm commitment underwritten offering under
the Securities Act;
(c) Ten years after the effective date of this Agreement; or
(d) The death of Dr. Gopal M. Nair.
On termination of this Agreement, Shareholder shall surrender the
Voting Trust Certificates to Trustee and Trustee shall obtain from the Company
and deliver to Shareholder shares of Company stock properly endorsed for
transfer, equivalent to the amount of shares represented by the Voting Trust
Certificates surrendered.
Section 6. Sale or Transfer of Shares. Subject to the Company's right
of first refusal as set forth in Section 3 of the attached Settlement Agreement
and subject to any applicable lock-up agreement on the part of Shareholder as
provided in Section 13.B. of the attached Settlement Agreement, if at any time
during the term of this Agreement the Shareholder desires to sell or transfer
all or a portion of the Shares to a third party, he
2
shall have the right to do so by notifying the Trustee in writing of his intent
to sell or transfer such portion of the Shares. The Trustee shall make the
appropriate notations in the records of the Trust and shall, after the
transferor has delivered the Voting Trust Certificate(s) representing that
portion of the Shares to be transferred to the Trustee for cancellation, issue
new Voting Trust Certificate(s) to the transferee and transferor, as applicable,
representing the portion of the Shares transferred to the transferee and the
portion retained by the transferor, if applicable. Any transferee of such
portion of the Shares shall become a party to and agree to be bound by this
Agreement. Any purported transfer of all or a portion of the Shares to a person
or entity that has not become a party to this Agreement shall be null and void.
Any transferee of all or a portion of the Shares shall have all rights and shall
be subject to all limitations of the transferor under the applicable Voting
Trust Certificate and this Agreement with respect to the Shares so transferred
to such transferee.
Section 7. Replacement of Trustee. The Trustee may be removed from his
office by the affirmative vote of a majority of the Board of Directors of the
Company. In the event of the death, resignation or removal of Trustee, the
successor Trustee shall be appointed by majority vote of the Board of Directors
of the Company.
Section 8. Liability and Indemnity of Trustee. The Trustee shall not be
liable for any error of judgment or mistake of fact or law, or for any act or
omission undertaken in good faith in connection with the Trustee's powers and
duties under this Agreement, except to the extent due to the Trustee's own
willful misconduct or gross negligence. The Trustee is authorized and empowered
to construe this Agreement and his reasonable construction made in good faith
shall be conclusive and binding. The Trustee shall not be liable for acting on
any legal advice or on any notice(s), request(s) or instruction(s), or any other
document(s) believed by the Trustee to be genuine and to have been signed by the
proper party or parties. The Trustee shall be entitled to be indemnified fully
from the distributions coming to his hand for any expenses, claims, losses,
damages or liabilities, including, without limitation, attorneys' fees incurred
by the Trustee and arising out of or in connection with the administration of
the Trust established by this Agreement and his rights and duties hereunder,
except to the extent that the action giving rise to such indemnification was the
result of willful misconduct or gross negligence by the Trustee ("Losses"). Each
holder of record of a Voting Trust Certificate representing all or a portion of
the Shares held pursuant hereto covenants with the Trustee that in the event
monies and securities in the Trustee's hands are insufficient to indemnify the
Trustee against all Losses, each such holder shall, in proportion to the portion
of the Shares represented by the Voting Trust Certificate held by such holder,
hold harmless and keep indemnified the Trustee against all Losses.
Section 9. Trustee's Compensation. Trustee shall serve in his capacity
as Trustee without compensation of any kind except that his expenses lawfully
incurred in the administration of his duties as Trustee shall be reimbursed to
him by the Company. Notwithstanding the foregoing, Trustee or any of his
successors may not serve the
3
Company or any of its affiliates as a director, employee or officer but may
serve in any other capacity, and in such capacity may receive compensation from
the Company.
Section 10. Notices from the Company. All notices, reports, statements,
and other communications directed to Trustee from the Company shall be promptly
forwarded to Shareholder.
Section 11. Copies of the Agreement. This Agreement may be executed in
multiple counterparts but shall not otherwise be separable or divisible. Upon
the execution of this Agreement and the establishment of the Voting Trust,
Trustee shall cause a copy of this Agreement to be filed in the registered
office of the Company. This Agreement shall be open to inspection in the manner
provided for inspection under Article 2.30 of the Texas Business Corporation
Act.
Section 12. Governing Law. This Agreement is intended by the parties to
be governed and construed in accordance with the laws of the State of Texas,
without regard to the conflicts of law principles thereof.
Section 13. Severability of Provisions. This Agreement shall not be
severable or divisible in any way, but it is specifically agreed that, if any
provision should be invalid, the invalidity shall not affect the validity of the
remainder of the Agreement.
Section 14. Arbitration: Agreement Disputes. In the event of any and
all disputes arising under this Agreement, the parties hereto agree to try in
good faith, to settle such dispute amicably between them. If a dispute has not
been settled after thirty (30) days of good-faith negotiation, then the parties
hereto agree that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement shall be
settled by arbitration to be held in New Orleans, Louisiana, in accordance with
the rules then in effect of the American Arbitration Association. The
arbitration shall be held by one arbitrator selected in accordance with the
rules then in effect of the American Arbitration Association. The arbitrator may
grant injunctions or other relief in such dispute or controversy. The decision
of the arbitrator shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator's decision in any court
having jurisdiction. Each party hereto shall pay one-half of the costs and
expenses of the arbitrator and the American Arbitration Association for such
arbitration, and each party shall separately pay its counsel fees and expenses,
provided that the Company shall reimburse the Trustee for the costs of such
arbitration and counsel fees and expenses in connection with such arbitration
proceeding. The arbitrator will be informed that he is not to award any punitive
damages or exemplary damages. Any arbitration suit will be governed by the laws
of the State of Texas, without regard to the conflicts of law principles
thereof. Each party hereto acknowledges that compliance with the provisions of
this Agreement is necessary to protect the proprietary interests of the other
party. Each party hereto agrees that in addition to the arbitration provisions
contained herein, in the event of a breach of
4
this Agreement by a party hereto, the other party hereto shall be authorized and
entitled to seek and obtain immediate injunctive relief from any court of
competent jurisdiction.
Section 15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall have the same force and effect as original signatures, provided, however,
that any party who provides a facsimile signature agrees to provide an original
signature within a reasonable time.
Section 16. Construction by Trustee. Trustee is authorized and
empowered to construe this Agreement. His reasonable construction made in good
faith shall be conclusive and binding on Shareholder.
Executed on April 1, 2003.
TRUSTEE
/s/ DONALD M. DELWOOD
-------------------------------------------
Donald M. Delwood
|
SHAREHOLDER
/s/ GOPAL M. NAIR
-------------------------------------------
Gopal M. Nair
|
5
Exhibits
The following non-material Exhibits have been ommitted and will be provided upon
request:
Exhibit A: Copy of Settlement Agreement
Exhibit B: Voting Trust Certificates
EXHIBIT 9.2
VOTING TRUST AGREEMENT
This Voting Trust Agreement (this "Agreement"), dated as of May 30,
2003, is entered into by and between Dasharatha G. Reddy ("Dr. Reddy") and
Dhanabalan Murali ("Dr. Murali") (Dr. Reddy and Dr. Murali collectively, the
"Shareholders", and individually, a "Shareholder") and Donald M. Delwood
("Trustee") for the purpose of creating a voting trust of certain shares of
Common Stock of BioNumerik Pharmaceuticals, Inc. (the "Voting Trust").
PRELIMINARY STATEMENTS
Shareholders collectively own 34,000 shares of Common Stock, par value
$0.01 per share (the "Shares") of BioNumerik Pharmaceuticals, Inc., a Texas
corporation (the "Company").
Shareholders have entered into that one certain Settlement Agreement
dated as of May 30, 2003 (the "Settlement Agreement"), by and between
Shareholders and the Company pursuant to which Shareholders have agreed to
transfer the Shares to a Voting Trust to be held and administered under the
terms thereof. A copy of the Settlement Agreement is attached hereto as Exhibit
A and incorporated herein for all purposes.
Donald M. Delwood has agreed to serve as Trustee of the Voting Trust.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good, valuable and binding consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
Section 1. Assignment, Delivery and Transfer of Shares; Issuance of
Voting Trust Certificates. Simultaneously with the execution of this Agreement,
Shareholders will assign and deliver to Trustee a certificate or certificates
representing 34,000 shares of Common Stock of the Company. Trustee shall
surrender the certificates to the Company and the Company shall cancel the
certificates. New share certificates shall be issued in the name of the Trustee
and the new certificates shall state that they are issued pursuant to this
Agreement. That fact shall also be noted in the Company's stock transfer records
in the entry of Trustee's ownership of the shares. Trustee shall cause the
Shares to be transferred to the Trustee on the books of the Company and shall
issue and deliver to Jeffrey A. Goldberg, Shareholders' Attorney, a certificate
for the number of shares transferred by each such Shareholder to Trustee in
substantially the form indicated on Exhibit B attached hereto ("Voting Trust
Certificate").
Section 2. Deposit of Additional Shares. Upon receipt of any additional
shares of Common Stock or other securities of the Company subsequent to the date
of this Agreement, each Shareholder shall deposit with Trustee the certificates
representing such additional shares, and Trustee shall cause the transfer to be
recognized on the books of the Company and shall issue and deliver to Jeffrey A.
Goldberg, Shareholders' Attorney, a Voting Trust Certificate representing the
number of shares transferred.
Section 3. Voting by Trustee. During the period of this Agreement,
Trustee shall have the exclusive right to vote the Shares or give written
consent, in person or by proxy, at all meetings of the shareholders of the
Company, and in all proceedings in which the vote or written consent of
shareholders of the Company may be required or authorized by law. On each matter
presented to him for vote, the Trustee shall be required to vote the Shares in a
manner so that the percentage of the Shares voted in favor of a particular
matter and the percentage of the Shares voted against a particular matter by the
Trustee equals the percentage of the total number of shares of stock (including
Common Stock and Preferred Stock, if any) of the Company voted in favor of that
particular matter and the percentage of the total number of shares of stock of
the Company voted against that particular matter. The Trustee shall not vote the
Shares in favor of the sale, mortgage, or pledge of all or substantially all of
the assets of the Company or for any merger, consolidation, reorganization, or
dissolution of the Company, except with the consent of the owners of two-thirds
(2/3), or more in interest of the Voting Trust Certificates at a meeting of
owners of not less than two-thirds (2/3) in interest of the Voting Trust
Certificates.
Section 4. Dividends. In the event that the Company issues dividends,
Trustee shall accept and receive such dividends for the benefit of the
Shareholders, and shall within a reasonable time thereafter deliver a percentage
of such dividends received by Trustee to Jeffrey A. Goldberg, Shareholders'
Attorney, which percentage for each Shareholder shall be equal to the percentage
that the number of shares of BioNumerik stock transferred by such Shareholder to
Trustee bears to the total number of Shares; provided, however, in the event
that the dividends are in the form of share certificates having voting rights,
Trustee shall not deliver the share certificates to Shareholders, but shall
instead retain the share certificates and issue new Voting Trust Certificates
representing the share dividends. Any shares issued as dividends shall become
subject to this Agreement to the same extent as if they were originally
deposited under it. In the event of dissolution or total or partial liquidation
of the Company, the Trustee shall receive any moneys, securities, rights, or
property to which the Shareholders may be entitled, and shall distribute it for
the benefit of the Voting Trust Certificate holders consistent with their
ownership percentage to Jeffrey A. Goldberg, Shareholders' Attorney.
Section 5. Termination of the Trust. The Voting Trust shall terminate
on the earliest occurrence of any of the following:
2
(a) A vote for termination by a majority of the Board of Directors
of the Company; or
(b) Six (6) months and seven (7) days after the effective date of
a Registration Statement of the Company filed under the Securities Act of 1933,
as amended (the "Securities Act") and including securities to be sold on behalf
of the Company to the public in a firm commitment underwritten offering under
the Securities Act; or
(c) Ten years after the effective date of this Agreement; or
(d) The death of both Dasharatha G. Reddy and Dhanabalan Murali.
On termination of this Agreement, Shareholders shall surrender the
Voting Trust Certificates to Trustee and Trustee shall obtain from the Company
and deliver with respect to each Shareholder to Jeffrey A. Goldberg,
Shareholders' Attorney, shares of Company stock properly endorsed for transfer,
equivalent to the amount of shares represented by the Voting Trust Certificates
surrendered by each Shareholder.
Section 6. Sale or Transfer of Shares. Subject to the Company's right
of first refusal as described in Section 3 of the attached Settlement Agreement
and subject to any applicable lock-up agreement on the part of each Shareholder
as described in Section 9.B. of the attached Settlement Agreement, if at any
time during the term of this Agreement a Shareholder desires to sell or transfer
to a third party all or a portion of the Shares represented by Voting Trust
Certificates issued to such Shareholder, he shall have the right to do so by
notifying the Trustee in writing of his intent to sell or transfer such portion
of the Shares. The Trustee shall make the appropriate notations in the records
of the Trust and shall, after the transferor has delivered the Voting Trust
Certificate(s) representing that portion of the Shares to be transferred to the
Trustee for cancellation, issue new Voting Trust Certificate(s) to the
transferee and transferor, as applicable, representing the portion of the Shares
transferred to the transferee and the portion retained by the transferor, if
applicable. Any transferee of such portion of the Shares shall become a party to
and agree to be bound by this Agreement. Any purported transfer of all or a
portion of the Shares to a person or entity that has not become a party to this
Agreement shall be null and void. Any transferee of all or a portion of the
Shares shall have all rights and shall be subject to all limitations of the
transferor under the applicable Voting Trust Certificate and this Agreement with
respect to the Shares so transferred to such transferee. The Shareholders agree
that any proceeds from the sale of such shares shall be delivered by
Shareholders to Jeffrey A. Goldberg, Shareholders' Attorney.
Section 7. Replacement of Trustee. The Trustee may be removed from his
office by the affirmative vote of a majority of the Board of Directors of the
Company. In the event of the death, resignation or removal of Trustee, the
successor Trustee shall be appointed by majority vote of the Board of Directors
of the Company.
3
Section 8. Liability and Indemnity of Trustee. The Trustee shall not be
liable for any error of judgment or mistake of fact or law, or for any act or
omission undertaken in good faith in connection with the Trustee's powers and
duties under this Agreement, except to the extent due to the Trustee's own
willful misconduct or gross negligence. The Trustee is authorized and empowered
to construe this Agreement and his reasonable construction made in good faith
shall be conclusive and binding. The Trustee shall not be liable for acting on
any legal advice or on any notice(s), request(s) or instruction(s), or any other
document(s) believed by the Trustee to be genuine and to have been signed by the
proper party or parties. The Trustee shall be entitled to be indemnified fully
from the distributions coming to his hand for any expenses, claims, losses,
damages or liabilities, including, without limitation, attorneys' fees incurred
by the Trustee and arising out of or in connection with the administration of
the Trust established by this Agreement and his rights and duties hereunder,
except to the extent that the action giving rise to such indemnification was the
result of willful misconduct or gross negligence by the Trustee ("Losses"). Each
holder of record of a Voting Trust Certificate representing all or a portion of
the Shares held pursuant hereto covenants with the Trustee that in the event
monies and securities in the Trustee's hands are insufficient to indemnify the
Trustee against all Losses, each such holder shall, in proportion to the portion
of the Shares represented by the Voting Trust Certificate held by such holder,
hold harmless and keep indemnified the Trustee against all Losses.
Section 9. Trustee's Compensation. Trustee shall serve in his capacity
as Trustee without compensation of any kind except that his expenses lawfully
incurred in the administration of his duties as Trustee shall be reimbursed to
him by the Company. Notwithstanding the foregoing, Trustee or any of his
successors may not serve the Company or any of its affiliates as a director,
employee or officer but may serve in any other capacity, and in such capacity
may receive compensation from the Company.
Section 10. Notices from the Company. All notices, reports, statements,
and other communications directed to Trustee from the Company shall be promptly
forwarded to Jeffrey A. Goldberg, Shareholders' Attorney.
Section 11. Copies of the Agreement. This Agreement may be executed in
multiple counterparts but shall not otherwise be separable or divisible. Upon
the execution of this Agreement and the establishment of the Voting Trust,
Trustee shall cause a copy of this Agreement to be filed in the registered
office of the Company. This Agreement shall be open to inspection in the manner
provided for inspection under Article 2.30 of the Texas Business Corporation
Act.
Section 12. Governing Law. This Agreement is intended by the parties to
be governed and construed in accordance with the laws of the State of Texas,
without regard to the conflicts of law principles thereof.
4
Section 13. Severability of Provisions. This Agreement shall not be
severable or divisible in any way, but it is specifically agreed that, if any
provision should be invalid, the invalidity shall not affect the validity of the
remainder of the Agreement.
Section 14. Arbitration: Agreement Disputes. In the event of any and
all disputes arising under this Agreement, the parties hereto agree to try in
good faith, to settle such dispute amicably between them. If a dispute has not
been settled after thirty (30) days of good-faith negotiation, then the parties
hereto agree that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement shall be
settled by arbitration to be held in San Antonio, Texas, in accordance with the
rules then in effect of the American Arbitration Association. The arbitration
shall be held by one arbitrator selected in accordance with the rules then in
effect of the American Arbitration Association. The arbitrator may grant
injunctions or other relief in such dispute or controversy. The decision of the
arbitrator shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator's decision in any court
having jurisdiction. Each party hereto shall pay one-third of the costs and
expenses of the arbitrator and the American Arbitration Association for such
arbitration, and each party shall separately pay its counsel fees and expenses,
provided that the Company shall reimburse the Trustee for the costs of such
arbitration and counsel fees and expenses in connection with such arbitration
proceeding. The arbitrator will be informed that he is not to award any punitive
damages or exemplary damages. Any arbitration suit will be governed by the laws
of the State of Texas, without regard to the conflicts of law principles
thereof. Each party hereto acknowledges that compliance with the provisions of
this Agreement is necessary to protect the proprietary interests of the other
parties hereto. Each party hereto agrees that in addition to the arbitration
provisions contained herein, in the event of a breach of this Agreement by a
party hereto, each other party hereto shall be authorized and entitled to seek
and obtain immediate injunctive relief from any court of competent jurisdiction.
Section 15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall have the same force and effect as original signatures, provided, however,
that any party who provides a facsimile signature agrees to provide an original
signature within a reasonable time.
5
Section 16. Construction by Trustee. Trustee is authorized and
empowered to construe this Agreement. His reasonable construction made in good
faith shall be conclusive and binding on Shareholders.
Executed effective as of May 30, 2003.
TRUSTEE
/s/ DONALD M. DELWOOD
--------------------------------------
|
SHAREHOLDERS
/s/ DASHARATHA G. REDDY
--------------------------------------
Dasharatha G. Reddy
/s/ DHANABALAN MURALI
--------------------------------------
Dhanabalan Murali
|
6
Exhibits
The following non-material Exhibits have been ommitted and will be provided upon
request:
Exhibit A: Copy of Settlement Agreement
Exhibit B: Voting Trust Certificates
EXHIBIT 10.1
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
STRATEGIC ALLIANCE AGREEMENT
BETWEEN
BIONUMERIK PHARMACEUTICALS, INC.
AND
ASTA MEDICA AKTIENGESELLSCHAFT
18TH OF JANUARY, 2001
TABLE OF CONTENTS
RECITALS ................................................................................................ 1
1. DEFINITIONS .......................................................................................... 1
1.1 Affiliate(s)................................................................................. 2
1.2 Alliance Steering Committee.................................................................. 2
1.3 ASTA Medica Improvements..................................................................... 2
1.4 ASTA Medica Know-How......................................................................... 2
1.5 ASTA Medica Patent Rights.................................................................... 2
1.6 BioNumerik Improvements...................................................................... 2
1.7 BioNumerik Know-How.......................................................................... 3
1.8 BioNumerik Patent Rights..................................................................... 3
1.9 BNP7787...................................................................................... 3
1.10 Budget....................................................................................... 3
1.11 Competitor................................................................................... 4
1.12 Confidential Information..................................................................... 4
1.13 Costs........................................................................................ 4
1.14 Development Plan............................................................................. 4
1.15 Fiscal Year.................................................................................. 4
1.16 Government Regulatory Approvals.............................................................. 4
1.17 Gross Profits................................................................................ 4
1.18 Gross Sales.................................................................................. 4
1.19 Improvements................................................................................. 5
1.20 Know-How..................................................................................... 5
1.21 Parties...................................................................................... 5
1.22 Patents...................................................................................... 5
1.23 Patent Rights................................................................................ 5
1.24 Product(s)................................................................................... 5
1.25 Product Trademark............................................................................ 6
1.26 Supply Agreement............................................................................. 6
1.27 Territory.................................................................................... 6
1.28 Trademarks................................................................................... 6
2. GRANT OF RIGHTS ...................................................................................... 6
2.1 Research and Development License............................................................. 6
2.2 License to Market, Sell and Distribute....................................................... 6
2.3 Sublicenses.................................................................................. 7
2.4 Canada Right of First Offer.................................................................. 7
2.5 Retention of Rights.......................................................................... 7
2.6 Provision of Know-How........................................................................ 8
2.7 Distribution................................................................................. 8
3. MANAGEMENT OF RELATIONSHIP................................................................... 8
3.1 Steering Committee........................................................................... 8
3.2 Project Team................................................................................. 9
3.3 Additional Teams and Assistance.............................................................. 10
3.4 Cooperation.................................................................................. 10
3.5 Voting and Dispute Resolution................................................................ 10
3.6 Costs of Maintenance and Operation........................................................... 10
4. DEVELOPMENT PLAN AND COSTS................................................................... 11
4.1 Development Costs............................................................................ 11
4.2 Government Approvals and Clinical Trials..................................................... 11
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i
4.3 Development Plan and Budget.................................................................. 12
4.4 Promotional Materials involving BioNumerik and Labeling...................................... 13
5. LICENSE FEES AND ROYALTIES ........................................................................... 13
5.1 License Fees................................................................................. 13
5.2 Royalties.................................................................................... 13
5.3 Expiration of Royalty Obligations............................................................ 14
5.4 Inclusion of Sublicense Fees................................................................. 14
5.5 Sales Forecast and Payment................................................................... 14
5.6 Forecast Adjustment.......................................................................... 15
6.INFORMATION SHARING .................................................................................. 15
6.1 Sharing of Information....................................................................... 15
6.2 BioNumerik Information....................................................................... 16
6.3 Additional Information Sharing............................................................... 16
7. MANUFACTURING ........................................................................................ 17
7.1 Manufacturing Rights......................................................................... 17
7.2 Non-Exclusive Manufacturing Option for Territory............................................. 17
7.3 Pre-Commercial Manufacturing................................................................. 18
7.4 Commercial Supply Agreement.................................................................. 18
7.5 No Infringing Manufacture or Supply.......................................................... 19
8. DILIGENCE ............................................................................................ 19
8.1 General Diligence Efforts.................................................................... 19
8.2 Target Development and Commercialization Plan................................................ 19
9.PATENT MATTERS ....................................................................................... 20
9.1 BioNumerik Patent Maintenance................................................................ 20
9.2 ASTA Medica Patent Maintenance and Assistance................................................ 21
9.3 BioNumerik Patent Representations............................................................ 21
9.4 ASTA Medica Patent Representations........................................................... 21
9.5 Enforcement of Patents and Proprietary Rights................................................ 22
10.TRADEMARKS AND TRADEMARK RIGHTS ...................................................................... 23
10.1 Registration, Maintenance and Ownership...................................................... 23
11.IMPROVEMENTS ......................................................................................... 24
11.1 BioNumerik Improvements Included............................................................. 24
11.2 ASTA Medica Improvement Grantbacks........................................................... 25
11.3 Joint Improvements........................................................................... 25
11.4 Sublicenses.................................................................................. 25
12.CONFIDENTIALITY ...................................................................................... 26
12.1 Confidential and Proprietary Information..................................................... 26
12.2 Matters not Included as Confidential Information............................................. 26
12.3 Survival of Confidentiality.................................................................. 27
13.PAYMENTS, RECORDS AND ACCOUNTING ..................................................................... 27
13.1 Means of Payment............................................................................. 27
13.2 Currency..................................................................................... 27
13.3 Access to Records............................................................................ 28
13.4 Taxes and Required Withholdings.............................................................. 28
14.DURATION AND TERMINATION OF AGREEMENT ................................................................ 28
14.1 Duration..................................................................................... 28
14.2 Termination.................................................................................. 29
14.3 Effect of Expiration or Termination.......................................................... 31
14.4 Termination for BioNumerik's Breach, Change in Control or Bankruptcy......................... 31
14.5 Termination for ASTA Medica's Breach, Change in Control or Bankruptcy........................ 32
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ii
14.6 Termination Due to Cessation of Regulatory Authorization or Lack of Patent Coverage.......... 32
14.7 Sale of Inventory............................................................................ 33
14.8 Country Specific Termination of Rights....................................................... 33
15.BIONUMERIK REPRESENTATIONS & WARRANTIES .............................................................. 33
15.1 Due Organization and Authority............................................................... 33
15.2 Safety of Product(s)......................................................................... 34
15.3 Warranties on Quality of the Know-How........................................................ 34
15.4 Governmental Agencies and Product Documentation.............................................. 34
15.5 Circumstances and Acts....................................................................... 34
16.ASTA MEDICA REPRESENTATIONS AND WARRANTIES ........................................................... 35
16.1 Due Organization and Authority............................................................... 35
16.2 Right to Accept License; Due Diligence....................................................... 35
16.3 Governmental Agencies........................................................................ 35
16.4 Circumstances and Acts....................................................................... 35
17.INDEMNIFICATION ...................................................................................... 35
17.1 Indemnification by BioNumerik................................................................ 35
17.2 Indemnification by ASTA Medica............................................................... 36
17.3 Mechanics.................................................................................... 36
17.4 Insurance Coverage........................................................................... 36
18.RELATION OF THE PARTIES .............................................................................. 37
19.ASSIGNMENTS .......................................................................................... 37
19.1 Assignment Restrictions...................................................................... 37
19.2 Sale of Business............................................................................. 38
19.3 Assignments to Competitors
19.4 Assignment to Affiliates..................................................................... 38
20.MISCELLANEOUS ........................................................................................ 39
20.1 Regulatory Communications.................................................................... 39
20.2 Adverse Effects.............................................................................. 39
20.3 Market Analysis and Marketing Reports........................................................ 39
20.4 Notice/Reports............................................................................... 40
20.5 Severability................................................................................ 40
20.6 Counterparts................................................................................. 40
20.7 Warranty Disclaimer.......................................................................... 41
20.8 Force Majeure................................................................................ 41
20.9 Arbitration.................................................................................. 41
20.10 Export Controls.............................................................................. 42
20.11 Construction / Jurisdiction / Official Language.............................................. 42
21.USE OF NAMES ......................................................................................... 42
22.ENTIRE AGREEMENT ..................................................................................... 43
23.CAPTIONS ............................................................................................. 43
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iii
STRATEGIC ALLIANCE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into effective as of
the 18th day of January, 2001, between ASTA Medica Aktiengesellschaft, a German
corporation with its office located at An der Pikardie 10, D-01277 Dresden,
Germany (hereinafter referred to as "ASTA Medica") and BioNumerik
Pharmaceuticals, Inc., a Texas corporation, with its office located at 8122
Datapoint Drive, Suite 1250, San Antonio, Texas 78229, U.S.A. (hereinafter
referred to as "BioNumerik").
RECITALS:
WHEREAS, BioNumerik is the owner of certain inventions, trade secrets,
know-how and rights relating to a certain medicinal toxicity protecting and
mitigating agent and related compounds denoted as "BNP7787", and has been issued
and has applied for certain patent and trademark rights with respect to BNP7787
and has developed BNP7787 for the treatment and mitigation of various clinically
important toxicities.
WHEREAS, BioNumerik and ASTA Medica wish to further the development of
BNP7787 for the prevention, treatment and mitigation of various medical
treatment-associated toxicities that are associated with drug administration and
other treatments in designated territories of the world.
NOW, THEREFORE, in consideration of the financial terms set forth
herein and of the other terms, conditions and agreements contained herein, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, BioNumerik and ASTA Medica hereby agree as follows:
1. DEFINITIONS. When used in this Agreement, each of the following
defined terms shall have the meanings set forth in this Section. There are other
terms defined in this Agreement parenthetically, and such terms shall have the
meanings apparent from the context in which such terms are parenthetically
defined.
1.1 "Affiliate(s)" means, with respect to each Party, any
organization, company, firm, or other entity that controls, is controlled by, or
is under common control with said Party. A company shall be deemed to have
control of another if it owns directly or indirectly a majority of the voting
shares of or is
1
entitled directly or indirectly to appoint a majority of the directors or other
managing body of the other company.
1.2 "Alliance Steering Committee" means the Alliance Steering
Committee described in Section 3 hereof.
1.3 "ASTA Medica Improvements" means any and all inventions,
developments, discoveries, and improvements useful in the development,
manufacture or sale of the Product(s), including, without limitation, formulae,
compounds, specifications, designs, chemical and physical data, clinical data,
information concerning synthesis, processes, formulations, applications,
toxicity, operations, regulatory affairs and marketing, that are developed by or
for ASTA Medica subsequent to the date of the Confidentiality Agreement between
BioNumerik and ASTA Medica dated as of December 12, 1998 (the "BioNumerik
Confidentiality Agreement") and during the term of this Agreement, subject in
all cases to any restrictions that may exist on the ability of ASTA Medica to
license such inventions, developments, discoveries or improvements to BioNumerik
in accordance with Sections 11 and 14 of this Agreement.
1.4 "ASTA Medica Know-How" means all data and information
owned by ASTA Medica and useful in the development, manufacture or sale of the
Product(s), including, without limitation, formulae, specifications, designs,
chemical and physical data, clinical data, information concerning synthesis,
processes, formulations, manufacture of the Active Pharmaceutical Ingredient
(API) for the Product(s), applications, administration to patients, clinical
protocols, toxicity, operations, regulatory affairs and marketing, that have
been developed by or for ASTA Medica on or before the date of the BioNumerik
Confidentiality Agreement, subject in all cases to any restrictions that may
exist on the ability of ASTA Medica to use and license such know-how in
accordance with the terms of this Agreement.
1.5 "ASTA Medica Patent Rights" means all patents or patent
applications (excluding the BioNumerik Patent Rights) owned or controlled by
ASTA Medica relating to ASTA Medica Know-How, ASTA Medica Improvements or other
matters that are useful in the development, manufacture or sale of the
Product(s) or that bear some tangible relationship to the Product(s).
1.6 "BioNumerik Improvements" means any and all inventions,
developments, discoveries and improvements useful in the development,
manufacture or sale of the Product(s), including, without limitation, formulae,
compounds, specifications, designs, chemical and physical data, clinical data,
2
information concerning synthesis, processes, formulations, applications,
toxicity, operations, regulatory affairs and marketing, that are developed by or
for BioNumerik subsequent to the date of this Agreement and during the term of
this Agreement, subject in all cases to any restrictions that may exist on the
ability of BioNumerik to license such inventions, developments, discoveries or
improvements to ASTA Medica in accordance with the terms of this Agreement.
1.7 "BioNumerik Know-How" means all data and information owned
by BioNumerik and useful in the development, manufacture or sale of the
Product(s), including, without limitation, formulae, specifications, designs,
chemical and physical data, clinical data, information concerning synthesis,
processes, formulations, manufacture of the API for the Product(s),
applications, administration to patients, clinical protocols, toxicity,
operations, regulatory affairs and marketing, that have been developed by or for
BioNumerik on or before the date of this Agreement, subject in all cases to any
restrictions that may exist on the ability of BioNumerik to license such
know-how to ASTA Medica in accordance with the terms of this Agreement.
1.8 "BioNumerik Patent Rights" means all patents and patent
applications and utility models and utility model applications (also known as
"gebrauchsmuster"), including any addition, continuation, continuation-in-part,
or division thereof or any substitute application therefore; any patent issued
with respect to such patent application; any reissuance, re-examination or
extension, including Supplementary Protection Certificates, of any such patent,
in each case which patent or patent application bears some tangible relationship
to the Product(s) and in which BioNumerik has an ownership or control during the
term of this Agreement. BioNumerik Patent Rights shall include but not be
limited to those patent applications listed on Attachment A hereto. For purposes
of this Agreement, "gebrauchsmuster" shall mean the protection of technical
inventions as defined in the current German Gebrauchsmuster Law or a legal
institutes comparable to the "Gebrauchsmuster" within the Territory in a state
other than Germany where applicable.
1.9 "BNP7787" means the compounds described on Attachment B
hereto.
1.10 "Budget" means the annual budget approved from time to
time by the Alliance Steering Committee pursuant to Section 4.
3
1.11 "Competitor" of a Party shall mean a company or
organization engaged in the business of discovering, developing, manufacturing
and/or selling any products or services that compete with any of the Product(s)
or any of the other material products that such Party is then developing,
manufacturing, selling or having sold.
1.12 "Confidential Information" means all information that is
of a confidential and proprietary nature, including without limitation, trade
secrets, inventions and unpatented Know-How and Improvements and related
technology, and any and all material information either of the Parties hereto
may acquire concerning the financial, business and marketing goals and plans of
the other, including the terms of this Agreement and (a) what has been disclosed
by BioNumerik to ASTA Medica under the existing BioNumerik Confidentiality
Agreement, and (b) what has been disclosed by ASTA Medica to BioNumerik under
the existing Confidentiality Agreement (the "ASTA Medica Confidentiality
Agreement") dated as of September 28, 2000, between ASTA Medica and BioNumerik.
1.13 "Costs" means the actual costs of manufacturing,
packaging and shipping, pre-marketing, marketing and selling Product(s) in the
Territory, which costs are further described on Attachment C hereto.
1.14 "Development Plan" means the plan for the development and
commercialization of the Product(s) approved from time to time by the Alliance
Steering Committee pursuant to Section 4.
1.15 "Fiscal Year" means ASTA Medica's fiscal year commencing
on January 1 and ending on December 31 of each year.
1.16 "Government Regulatory Approvals" means all government
approvals, health registrations and/or permits required for manufacture, sale,
and distribution of Product(s) in the Territory.
1.17 "Gross Profits" means Gross Sales less Costs, as
specifically described in Sections 1.18 and 1.13 and on Attachment C hereto.
1.18 "Gross Sales" means cumulative post product launch gross
sales in Euros of the Product(s) within the Territory by ASTA Medica or its
Affiliates to third parties or sublicensees, as further described on Attachment
C hereto. Sales between ASTA Medica and its Affiliates are not considered to be
sales to third parties or sublicensees, unless the Affiliate is the end-user of
the Product(s). Gross Sales shall (i) include any direct sales by sublicensees
in the event Product(s) are not sold to the sublicensee by ASTA Medica or its
Affiliates and (ii) also include all value received by ASTA Medica or its
Affiliates in connection with sales by any sublicensees. It is further
understood that BioNumerik's royalty rate and royalties, which are based on
cumulative Gross Sales of Product(s), will not be compromised or reduced as a
result of any sublicenses by ASTA Medica.
4
1.19 "Improvements" means the BioNumerik Improvements and the
ASTA Medica Improvements.
1.20 "Know-How" means the BioNumerik Know-How and the ASTA
Medica Know-How.
1.21 "Parties" means ASTA Medica and BioNumerik, or if used in
the singular, ASTA Medica or BioNumerik.
1.22 "Patents" means those patents that embody the Patent
Rights in the Territory.
1.23 "Patent Rights" means the BioNumerik Patent Rights and
the ASTA Medica Patent Rights.
1.24 "Product(s)" means any pharmaceutical preparation,
composition, product, method of administration or treatment use, or formulation
for administration that contains BNP7787, a related thiol or disulfide,
metabolites or another related cytoprotective agent period.
BioNumerik has issued patents and patent applications pending on the use,
manufacture and formulations of 2-mercapto ethane sulfonate. These shall be
included in this Agreement and are defined as the chemical compound
2-mercaptoethane sulfonate sodium, all salts and crystalline forms thereof, all
formulations that include 2-mercaptoethane sulfonate sodium or a salt or
crystalline form thereof, and all medical or other uses of 2-mercaptoethane
sulfonate sodium wherein the description of said use identifies mesna, or a salt
or crystalline form thereof, or a formulation that includes 2-mercaptoethane
sulfonate sodium or a salt or crystalline form thereof, as a possible active
agent for effecting the described method of use or formulation in human subjects
or animals.
None of BioNumerik's other agents in discovery or development (including, but
not limited to, karenitecin, MDAM, and preclinical candidates) are included in
this Agreement.
1.25 "Product Trademark" means the main (global) trademark for
the Product(s) in the Territory.
1.26 "Supply Agreement" has the meaning set forth in Section 7
hereof.
1.27 "Territory" shall mean worldwide, except for the United
States of America (and its possessions and territories), Canada (and its
possessions and territories), and Japan (and its possessions and territories).
5
1.28 "Trademarks" means (i) the brand name(s) selected and
owned either by BioNumerik alone or by ASTA Medica to be used for or in
connection with the Product(s) in the Territory (including the Product
Trademark, alternative trademarks to the Product Trademark) and all associated
logos, and (ii) the general reference trade name selected by BioNumerik for
BNP7787 and Product(s).
2. GRANT OF RIGHTS.
2.1 Research and Development License. Subject to the terms of
this Agreement, BioNumerik hereby grants to ASTA Medica and its Affiliates an
exclusive license in the Territory under the BioNumerik Patent Rights,
BioNumerik Know-How and BioNumerik Improvements to conduct and have conducted
research and development (including studies and clinical trials) of the
Product(s) in the Territory for the purpose of obtaining Government Regulatory
Approvals in the Territory.
2.2 License to Market, Sell and Distribute. Subject to the
terms of this Agreement, BioNumerik hereby grants to ASTA Medica and its
Affiliates an exclusive license in the Territory under the BioNumerik Patent
Rights, BioNumerik Know-How and BioNumerik Improvements to make, have made, use,
market, distribute, sell, and offer for sale the Product(s) in the Territory.
2.3 Sublicenses. ASTA Medica shall have the right to
sublicense the rights granted under Sections 2.1 and 2.2 to third parties in the
Territory subject to the prior written consent of BioNumerik, which will not be
unreasonably withheld. ASTA Medica and BioNumerik agree that BioNumerik shall
have reasonable grounds to object if (i) the aggregate of all such sublicensees
would reasonably be expected to exceed [**] of the total European market for
the Product; or any single sublicensee would reasonably be expected to exceed
[**] of the total Territorial market for the Product, or (ii) the overall
compensation structure of the sublicense terms are not fair to BioNumerik. ASTA
Medica shall remain fully responsible to BioNumerik for the actions or failure
to act of any of its sublicensees.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
6
2.4 Canada Right of First Offer. In the event BioNumerik or
its Affiliates do not wish to pursue marketing, distribution and/or sale of the
Product(s) in Canada on their own, BioNumerik shall provide ASTA Medica with
written notice (the "Canada Notice") to such effect. ASTA Medica shall have a
right of first offer to negotiate with BioNumerik to obtain a license with
respect to the Product(s) in the territory of Canada. The first offer right
granted herein will expire 45 days after ASTA Medica's receipt of the Canada
Notice. If no proposal to obtain a license with respect to the Product(s) for
the territory of Canada is made to BioNumerik by ASTA Medica within such 45 day
period, ASTA Medica's right of first offer shall terminate. In the event ASTA
Medica does make a proposal for the territory of Canada within such time period,
then BioNumerik and ASTA Medica will negotiate in good faith during the
remainder of such 45 day notice period and for an additional 90 day period (the
"Negotiation Period") in an effort to enter into a license agreement for such
territory on mutually agreeable terms. If a license has not been executed by the
end of the Negotiation Period, then BioNumerik shall be free to enter into a
third party license and/or alliance with respect to the Product(s) for the
territory of Canada, provided the economic terms of such license and/or alliance
are no more favorable to such third party than the terms last proposed by ASTA
Medica before expiration of the Negotiation Period.
2.5 Retention of Rights. BioNumerik shall retain the right for
itself and its Affiliates to use the BioNumerik Patent Rights, BioNumerik
Know-How, and BioNumerik Improvements in the Territory without cost for internal
research and development purposes, for purposes of co-developing the Product(s)
in the Territory with ASTA Medica as approved by the Alliance Steering
Committee, for purposes of manufacturing the Product(s) in the Territory in
accordance with this Agreement, and for purposes that do not relate to the
Product(s). In addition, BioNumerik, its Affiliates, and other parties
previously or hereafter authorized by BioNumerik shall retain the right to
conduct and have conducted research and development (including studies and
clinical trials) of the Product(s) throughout the world for the purpose of (a)
obtaining regulatory approvals outside the Territory, and (b) obtaining
additional data and information regarding the Product(s). BioNumerik will not
conduct any such research and development in the Territory without the prior
consent of ASTAMedica, which consent will not be unreasonably withheld.
BioNumerik may continue to conduct its existing preclinical studies and Phase I
clinical trials relating to the Product(s) in the Territory. In addition,
nothing contained herein is intended to limit the right of ASTA Medica or
BioNumerik to discover, develop, market, or sell other therapeutic products or
technologies throughout the world.
2.6 Provision of Know-How. As soon as practicable after the
date of this Agreement and on a regular basis thereafter during the term of this
Agreement, BioNumerik will, subject to the
7
confidentiality and other terms contained herein, make additional BioNumerik
Know-How available to ASTA Medica.
2.7 Distribution. Except as expressly provided in this
Agreement or by a separate written mutual agreement between the Parties,
BioNumerik shall not directly or indirectly distribute or sell Product(s) in the
Territory. Except as expressly provided in this Agreement or by a separate
mutual written agreement between the Parties, ASTA Medica shall not directly or
indirectly manufacture Product(s) to be sold in the Territory or manufacture,
market, distribute or sell Product(s) outside the Territory, unless otherwise
permitted pursuant to a separate agreement that may be entered into by the
Parties pursuant to Section 7.2.
3. MANAGEMENT OF RELATIONSHIP.
3.1 Steering Committee.
(a) Formation. Promptly upon execution of this Agreement,
BioNumerik and ASTA Medica will establish an Alliance Steering Committee. The
Alliance Steering Committee shall manage all aspects of the business and
strategic relationship between the Parties with respect to the development of
the Product(s) in the Territory in accordance with the terms of this Agreement.
(b) Responsibilities. The Alliance Steering Committee will
have responsibility for overseeing the implementation, performance and
coordination of all development, regulatory, manufacturing, distribution,
selling and marketing activities relating to the Product(s) in the Territory and
for effective communication regarding operations and strategies that are
important for the development of the Product(s). As part of its
responsibilities, the Alliance Steering Committee shall be responsible for
approving the Product Development Plan and Budget. The Alliance Steering
Committee will also monitor the performance of research and development work
relating to the Product(s) in the Territory. The Parties shall report to the
Alliance Steering Committee on all significant clinical and regulatory issues
relating to the Product(s), and the Alliance Steering Committee shall make
recommendations and provide strategic guidance with respect to such issues.
(c) Composition. The Alliance Steering Committee shall be
comprised of at least 2 and up to 4 members total as may be agreed to from time
to time by ASTA Medica and BioNumerik. The initial Alliance Steering Committee
will be comprised of Dr. Frederick Hausheer and Dr. Jose-Maria Gimenez-Arnau
who will serve as Co-Chairs of the
8
Alliance Steering Committee. The selection of Alliance Steering Committee
members shall be made by ASTA-Medica and BioNumerik Pharmaceuticals, Inc. as
needed from time to time. The Alliance Steering Committee members shall be
qualified representatives of each company with expertise in oncology drug
development and commercialization operations. The Alliance Steering Committee
will be comprised of an equal number of members from ASTA Medica and BioNumerik,
provided however, that each Party must have on the Alliance Steering Committee
employees holding the following positions: Head of Research and Development and
Head of Sales and Marketing. On behalf of BioNumerik, Dr. Hausheer will
communicate strategies, developments and operations relating to the Product(s)
to the Alliance Steering Committee.
(d) Meetings. The Alliance Steering Committee will meet at
least quarterly (in Europe, U.S., or by telephone, video conference or internet
- by mutual consent) each calendar year prior to commercialization of the
Product(s) in the Territory. In addition, either Party may request additional
meetings as reasonably required. The Co-Chairs of the Alliance Steering
Committee will be responsible for providing an agenda for each meeting of the
committee at least 10 days in advance of such meeting and shall prepare written
minutes of all committee meetings in reasonable detail. The Co-Chairs shall
distribute a draft or final written version of such minutes to all members of
the Alliance Steering Committee within 20 days after the relevant meeting.
3.2 Project Team. The Alliance Steering Committee will
establish a Project Team that will be responsible for managing the day-to-day
development and registration aspects of the Development Plan. The Project Team
will be comprised of the various employees of each Party that are required for
the successful development and registration of the Product(s) in the Territory.
The Project Team will meet regularly, based on a written schedule and other
mutually agreeable considerations as needed to insure effective communication,
coordination and all related operations for development and marketing of the
Product(s) in the Territory.
3.3 Additional Teams and Assistance. The Alliance Steering
Committee may establish such other teams or working groups, as it deems
necessary or desirable in connection with the development and commercialization
of the Product(s).
9
3.4 Cooperation. Each Party will utilize its reasonable best
efforts to act reasonably and in good faith to avoid deadlocks at either the
Alliance Steering Committee or Project Team level and to ensure the successful
operations of both the Alliance Steering Committee and the Project Team. To this
end, each Party will make available to both the Alliance Steering Committee and
the Project Team that Party's knowledge and expertise with regard to the
Product(s) and to the development and registration of products of this nature.
3.5 Voting and Dispute Resolution. Each of ASTA Medica and
BioNumerik shall have one vote on the Alliance Steering Committee and on the
Project Team. A unanimous vote by both Parties shall be required for a decision
by the Alliance Steering Committee or the Project Team. A quorum of the Alliance
Steering Committee or the Project Team shall exist only if at least one
representative from each Party with authority to cast the vote of the Party on
the matter before the Alliance Steering Committee or the Project Team, as the
case may be, is present. If the Project Team is unable to reach a decision on
any matter, the Project Team shall refer such matter to the Alliance Steering
Committee. If the Alliance Steering Committee is unable to reach a mutual
agreement on any matter, including any matter referred to the Alliance Steering
Committee by the Project Team, the Alliance Steering Committee shall promptly
conduct good faith discussions in an effort to resolve such matter in a
reasonable and mutually satisfactory manner. If the matter is not resolved by
the Alliance Steering Committee representatives of BioNumerik and ASTA Medica
within 60 days after the commencement of such discussions, either Party may
request, in writing, that the matter be resolved by binding arbitration in
accordance with the provisions of Article 20.9 of the Agreement.
3.6 Costs of Maintenance and Operation. Each of ASTA Medica
and BioNumerik will bear its own costs and expenses relating to the maintenance
and operation of the Alliance Steering Committee and the Project Team. The
members of the Alliance Steering Committee and the Project Team will each serve
without any additional compensation.
10
4. DEVELOPMENT PLAN AND COSTS.
4.1 Development Costs. ASTA Medica shall pay all research and
development expenses in order to develop and commercialize the Product(s) in the
Territory. Such costs will include, without limitation, all costs in order to
carry out the Development Plan, including all costs of any non-clinical or
clinical tests or studies required by any applicable regulatory agency in the
Territory, including any associated manufacturing costs. BioNumerik will be
responsible for paying [**] of the premarketing costs for the Product(s) in
the Territory prior to launch, which contribution amount by BioNumerik will not
exceed [**] in the aggregate. ASTA Medica will provide BioNumerik with a
summary of such premarketing costs on a quarterly basis, and BioNumerik will
make payment to ASTA Medica for BioNumerik's portion of such premarketing costs
[**] after receipt of the summary from ASTA Medica. BioNumerik is free to have
the calculation of such costs audited in the same manner as provided in the last
sentence of Section 5.6. If BioNumerik determines to conduct a clinical study
for the Product(s) in the Territory on its own, after obtaining ASTA Medica's
consent, BioNumerik shall pay the costs of such study, unless otherwise agreed
by the Parties. If ASTA Medica determines to conduct a clinical study for the
Product(s) outside of the Territory on its own, after obtaining BioNumerik's
consent, ASTA Medica shall pay the costs of such study, unless otherwise agreed
by the Parties.
4.2 Government Approvals and Clinical Trials.
4.2.1. ASTA Medica agrees at its sole expense to (a) conduct
or cause to be conducted all clinical trials and other studies of any nature of
the Product(s) necessary or desirable for obtaining Government Regulatory
Approvals and (b) prepare and submit all documents necessary or desirable for
obtaining Government Regulatory Approvals. The Alliance Steering Committee will
mutually determine the priority of each country in the Territory for
development, registration and marketing of the Product(s) within a reasonable
period of time following the date of this Agreement. The Alliance Steering
Committee will update the priority list on a semi-annual basis. In connection
therewith, ASTA Medica shall, at its own expense and in accordance with the
priorities determined by the Alliance Steering Committee, apply for all health
registrations and Government Regulatory Approvals required to execute and to
perform this Agreement. To the extent permitted by laws in the Territory and if
requested by ASTA Medica, BioNumerik agrees to assist and support the process of
obtaining the Government Regulatory Approvals by providing input and assistance
from Dr. Frederick H. Hausheer regarding the design and conduct of non-clinical
studies, clinical trials, preparation of regulatory submissions and review,
analysis and presentation of laboratory data. During the term of this Agreement,
ASTA Medica shall be the marketing, development and
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
11
distribution authorization holder of the Product(s) in the Territory unless
otherwise agreed to by the Alliance Steering Committee. ASTA Medica shall keep
BioNumerik regularly and fully informed of the status of the Government
Regulatory Approvals process on a current basis and furnish BioNumerik upon
BioNumerik's reasonable request with copies of all of the documents, data and
other information supplied to or received from applicable government authorities
in connection with the applications for the Government Regulatory Approvals.
Upon receipt of the Government Regulatory Approvals, ASTA Medica shall promptly
furnish BioNumerik copies or other satisfactory evidence thereof. In addition,
ASTA Medica may conduct research and development (including studies and clinical
trials) of the Product(s) outside the Territory for the purpose of supporting
the development and commercialization of the Product(s) in the Territory.
BioNumerik will have the right to review and consent to any such studies and
clinical trials outside the Territory in advance of their commencement, which
consent will not be unreasonably withheld.
4.2.2 ASTA Medica shall have ownership (including
reservation of the right to use in the Territory in accordance with this
Agreement) of all data and results obtained by ASTA Medica from the non-clinical
studies, clinical trials and related testing conducted pursuant to Section 4.1
and 4.2.1 (the "ASTA Medica Data and Results"). Each of ASTA Medica and
BioNumerik shall have the right to use the ASTA Medica Data and Results as
described in this Agreement, unless otherwise agreed by the Parties hereto. ASTA
Medica shall also have the right to use data and results obtained by BioNumerik
from the non-clinical studies, clinical trials and related testing conducted for
the Product(s) outside the Territory, provided that such use by ASTA Medica
shall be for the purpose of supporting the development and commercialization of
the Product(s) in the Territory and shall be subject to any existing limitations
on the ability of BioNumerik to provide such data and results to ASTA Medica.
4.3 Development Plan and Budget. The initial Development Plan and
initial Budget agreed to by the Parties will be developed by the Parties with
final review and approval by the Alliance Steering Committee. The Development
Plan and Budget will be updated by the Alliance Steering Committee on at least a
quarterly basis. Prior to the start of each calendar year, the Alliance Steering
Committee shall meet to review and approve a Development Plan and Budget for the
following calendar year. No material deviations (e.g., major changes in clinical
study design, patient populations, clinical trial endpoints, or the analysis of
such endpoints) from the Development Plan or Budget will occur without prior
approval by the Alliance Steering Committee. The Development Plan will include
the following elements: (a) a clinical trial program for the Product(s) in the
Territory, (b) a Product Registration Plan, (c) a Publication Plan, and (d) a
Distribution, Selling and Marketing Plan for the Product(s). No company
sponsored clinical trial shall be commenced for the Product(s) in the Territory
without the approval of the Alliance Steering Committee. The Budget detail will
contain specific estimates of allocation of administrative and finance costs,
country or
12
region-specific allocation of "sales force time and effort" (as defined in
Section 5.6), and country specific-profit and loss estimates.
4.4 Promotional Materials involving BioNumerik and Labeling. To
the extent permissible by law, the Product(s) distributed in the Territory shall
be represented in all labeling and other documentation as jointly developed by
ASTA Medica and BioNumerik. ASTA Medica shall assure inclusion, consistent with
the laws of each country in the Territory, of BioNumerik's name, logo and other
identification in any promotional materials, which inclusion shall be overseen
at the Alliance Steering Committee level. ASTA Medica agrees that promotional
materials for the Product(s) in the Territory shall contain the statement: "
Under license from BioNumerik Pharmaceuticals, Inc." and shall also display the
BioNumerik trademark wherever permitted by law. Product(s) marketed and sold by
ASTA Medica hereunder shall also be marked with appropriate patent numbers or
indicia at BioNumerik's request, subject to ASTA Medica's consent, not to be
unreasonably withheld.
5. LICENSE FEES AND ROYALTIES.
5.1 License Fees.
As partial consideration of the rights hereby granted, ASTA
Medica shall pay to BioNumerik a fixed fee of U.S. $15,000,000(Fifteen Million
U.S. Dollars) immediately upon the execution of this Agreement, which fee shall
be non-refundable except as provided in Section 14.5.
5.2 Royalties. ASTA Medica shall pay BioNumerik a sliding scale
percentage of Gross Profits per Fiscal Year based on the cumulative Gross Sales
within the Territory during the term of this Agreement. All payments to
BioNumerik by ASTA Medica shall be in U.S. dollars.
Accordingly, ASTA Medica shall pay BioNumerik the following amounts:
(a) [**] of the Gross Profits for up to [**] of cumulative
Gross Sales of Product(s) in the Territory;
(b) [**] of the Gross Profits from [**] of cumulative Gross
Sales of Product(s) in the Territory; and
(c) [**] of the Gross Profits for [**] or more of cumulative
Gross Sales of Product(s) in the Territory.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
13
5.3 Expiration of Royalty Obligations. The royalty obligations set
forth in Section 5.2 above shall expire on a country-by-country basis in those
countries in which a BioNumerik Patent Right covers the use or sale of
Product(s), effective as of the date upon which the use or sale of Product(s) in
such country would no longer infringe a valid claim of a BioNumerik Patent Right
in the absence of the rights granted hereunder, provided however that (a) all
royalty obligations shall continue on a country-by-country basis until the last
patent expiry of the medical use and/or formulation patent applications and/or
patents which claim the use and/or marketing approved formulation of BNP7787 as
listed in Attachment A, such as cisplatin, carboplatin and/or taxane
derivatives, and (b) all royalty obligations shall continue during the time that
any patent application included in the Patent Rights is being prosecuted. If a
new patent is issued in a particular country with respect to the Product(s)
where the royalty obligations have or would have otherwise expired in such
country, the royalty obligations contained in Section 5.2 shall be renegotiated
in accordance with their terms with respect to such country, provided that (a)
the Parties shall assess the new patent together using an estimated net present
value estimate of the potential economic outcome of such new patent that is
agreed to provide a [**] net present value to BioNumerik and ASTA Medica, and
(b) the lower limit of the royalty to BioNumerik with respect to such new patent
in such country will be [**] of the Gross Profits with respect to such country,
if the patent issued protects marketing exclusivity of the Product in such
country. Royalties on Product(s) shall also continue to be paid by ASTA Medica
pending final resolution of any litigation or dispute involving ASTA Medica,
BioNumerik, the Product(s) or the Patent.
5.4 Inclusion of Sublicense Fees. All payments or fees of any kind
received by ASTA Medica or its Affiliates from any sublicensee of the Product(s)
shall be included in Gross Sales and Gross Profits (including, without
limitation, situations where such payments and fees are made prior to product
launch), and BioNumerik shall be paid a royalty on all such payments and fees in
accordance with Section 5.2
5.5 Sales Forecast and Payment. Within 45 days of the beginning of
each Fiscal Year, the Alliance Steering Committee will agree on the forecast of
sales for such Fiscal Year. The forecast will include a country specific
estimate of sales in the Territory. Based on this forecast, BioNumerik will
receive quarterly installments of the royalty amount expected to be due to
BioNumerik according to the scale described in Section 5.2 at the end of each
calendar quarter from ASTA Medica.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
14
5.6 Forecast Adjustment. Within 45 days after the end of each
Fiscal Year the payments according to the forecasts will be compared with the
actual Gross Sales and Gross Profits. If the aggregate estimated payments made
by ASTA Medica to BioNumerik for such year exceed the actual royalty owing for
such year, BioNumerik shall refund the difference within 45 days of such
determination. If the aggregate estimated payments made by ASTA Medica to
BioNumerik for such year are less than the actual royalty owing for such year,
ASTA Medica shall pay BioNumerik the difference within 45 days of such
determination. ASTA Medica's accountant, KPMG, will review all data and
calculations of royalty amounts and payments. This will be done no later than
the end of February of the following Fiscal Year. In addition, the records
maintained by ASTA Medica for calculating Costs in determining the royalty shall
include specific line items for allocation of administrative and finance
costs (as defined in Attachment C), country or region-specific allocation of
Product marketing, promotion, distribution, and sales capacity (specified in
terms of budget and personnel) defined as "sales force time and effort", and
country specific- Product sales priority and profit and loss amounts. BioNumerik
is free to have such data and calculations fully audited at its own cost by
another accounting firm selected by BioNumerik and ASTA Medica will disclose all
such data and calculations to BioNumerik's auditors on a confidential basis.
6. INFORMATION SHARING.
6.1 Sharing of Information. ASTA Medica will keep BioNumerik
regularly and fully informed of the non-clinical and clinical development
progress, including discussions and correspondence with regulatory authorities
in the Territory for the Product(s), and ASTA Medica shall provide BioNumerik
with copies of all data and developments that arise from research and
development carried out by or on behalf of ASTA Medica on the Product(s)
pursuant to this Agreement, including all Government Regulatory Approvals for
Product(s) in the Territory. Without any further obligation to ASTA Medica,
BioNumerik (and its designated Affiliates, assignees and sublicensees) are
hereby granted the right to use the ASTA Medica Data and Results, for the
purpose of supporting non-clinical studies, clinical trials and product
regulatory approval and development in areas outside of the Territory, but
excluding Japan.
15
6.2 BioNumerik Information. BioNumerik shall provide ASTA Medica
with copies of all information generated or controlled by it in the course of
satisfying regulatory requirements in the United States, Japan and/or other
areas outside the Territory with respect to the Product(s) that may be useful or
necessary in obtaining Government Regulatory Approvals in the Territory, such as
IND applications, annual reports, protocol amendments, IND amendments,
promotion, marketing, sales, manufacturing and related documents and information
(collectively, the "BioNumerik Data and Results"). Without any further
obligation to BioNumerik, ASTA Medica (and its designated Affiliates, assignees
and sublicensees) are hereby granted the right to use the BioNumerik Data and
Results, for the purpose of supporting non-clinical studies, clinical trials and
regulatory approval and development of Product(s) in the Territory. For purposes
hereof, the term "Data and Results" shall mean the ASTA Medica Data and Results
and the BioNumerik Data and Results.
6.3 Additional Information Sharing. In recognition of the
significant importance and benefit of sharing with ASTA Medica all data and
information generated with respect to the Product(s) outside the Territory,
BioNumerik agrees to use its reasonable best efforts to provide ASTA Medica with
the opportunity to enter into a Confidentiality Agreement with Grelan
Pharmaceutical Co., Ltd., BioNumerik's partner for the development of the
Product in Japan ("KI Pharma"), for the purpose of direct communication and
exchange of know-how and other confidential information regarding the
Product(s). BioNumerik shall encourage KI Pharma to enter into such an agreement
with ASTA Medica. ASTA Medica agrees that if KI Pharma agrees to share with ASTA
Medica all data and information generated by KI Pharma with respect to the
Product(s) for the purpose of supporting the development of the Product(s) in
the Territory, then ASTA Medica will, on similar terms, agree to share with KI
Pharma all data and information generated by ASTA Medica with respect to the
Product(s) for the purpose of supporting the development of the Product(s) in
Japan and its possessions and territories. ASTA Medica will promptly provide
BioNumerik with a copy of all communications, data and information shared
between KI Pharma and ASTA Medica that are important to the development,
marketing and manufacturing of the Product(s). BioNumerik will endeavor to
organize and facilitate interactions and communications between ASTA Medica and
KI Pharma regarding the Product(s). Dr. Hausheer will oversee these efforts and
the Parties will endeavor to have a meeting with all such companies at least
once each year. In addition, BioNumerik agrees to use its reasonable best
efforts to provide that any
16
agreement hereafter signed with respect to a license for commercial distribution
of the Product(s) in areas outside the Territory will provide that the licensee
under such license will share with ASTA Medica all data and information
generated by such licensee with respect to the Product(s) for the purpose of
supporting the development of Product(s) in the Territory. In the event a
prospective licensee for the commercial distribution of the Product(s) in areas
outside the Territory will not agree to the sharing of all data and information
as provided above, BioNumerik will consult with ASTA Medica prior to signing any
license agreement with such party and BioNumerik will use its reasonable best
efforts to facilitate and provide an opportunity for discussion between ASTA
Medica, BioNumerik and such prospective licensee with respect to a mutually
satisfactory arrangement for the sharing of data and information. For purposes
of this Agreement, "reasonable best efforts" shall mean those reasonable
commercial efforts that would be used by reasonable business persons in a
similar situation.
7. MANUFACTURING.
7.1 Manufacturing Rights. BioNumerik will retain all manufacturing
rights related to the Product(s) in all parts of the world (including the
Territory), subject to ASTA Medica's non-exclusive option described in Section
7.2.
7.2 Non-Exclusive Manufacturing Option for Territory. ASTA Medica
is hereby granted the option to bid to manufacture Product(s) for development
and regulatory approval and/or sale in the Territory. From time to time during
the term of this Agreement, ASTA Medica shall, at its option, provide BioNumerik
with a bid containing the price, delivery amount and other material terms under
which it would manufacture Product(s) for the Territory on a non-exclusive
basis. It is the hope of the Parties that ASTA Medica will be a significant
manufacturer of Product supply in the Territory, subject to meeting the
competitive requirements of price, quality, supply, delivery and other material
terms relative to other potential or active manufacturers. If such bid is on
substantially competitive terms with BioNumerik's other alternatives for
manufacturing Product(s) for the Territory, then BioNumerik and ASTA Medica
will negotiate in good faith to enter into a supply agreement providing for the
manufacture by ASTA Medica of a portion of the Product(s) to be supplied for
the Territory, which portion will be determined by BioNumerik. In the event of
any unsuccessful bid by ASTA Medica, BioNumerik will describe to ASTA Medica
the categories in which its bid was deemed not competitive. In the absence of
any bid from ASTA Medica to manufacture Product(s) on substantially competitive
terms to BioNumerik's other manufacturing alternatives, BioNumerik shall be free
to utilize such other alternatives for the manufacture of Product(s) in the
Territory.
17
7.3 Pre-Commercial Manufacturing. BioNumerik will furnish ASTA
Medica with all supplies of Product(s) required by ASTA Medica in order to
conduct the pre-commercialization studies and clinical trials described in
Sections 4.1 and 4.2, which supplies shall be furnished by BioNumerik to ASTA
Medica at a price equal to BioNumerik's actual cost to manufacture the
materials (including a reasonable overhead amount in compliance with U.S.
GAAP), plus freight, transport, insurance, and customs and duty charges
incurred in delivering the materials to ASTA Medica, but shall exclude any
profit element.
7.4 Commercial Supply Agreement. Following execution of this
Agreement, BioNumerik agrees to finalize its processes for the manufacture of
Product(s) as shall be agreed from time to time between itself and ASTA Medica.
Within 24 months prior to the estimated time of the first commercial sale of
Product(s) in the Territory, ASTA Medica and BioNumerik shall enter into a
commercial supply agreement (the "Supply Agreement") to be negotiated in good
faith and to reflect such terms and conditions as shall be reasonably necessary
to govern the manufacture and supply of Product(s) for sale and distribution in
the Territory.
The Supply Agreement will provide among other things that:
(a) Not later than the end of each calendar year that
commences after execution of the Supply Agreement, ASTA Medica will supply to
BioNumerik an estimate of its requirements of the amount of API or finished
Product(s) in the Territory during the following [**] years, and will update
this estimate at six-month intervals. BioNumerik will notify ASTA Medica within
90 days of receipt of such estimate if it (or its Affiliates) will be unable to
supply the whole or any part of the requirements described in such estimate.
Together with the [**] estimate, ASTA Medica will deliver to BioNumerik firm
orders for its estimated requirements of Product(s) not less than 12 months in
advance of the required date of delivery. Within thirty (30) days of its receipt
of such firm order, BioNumerik shall confirm such order in writing and fulfill
such orders in accordance with ASTA Medica's required date of delivery provided
the quantities specified therein do not exceed those quantities contained in the
previous estimate for the same period and provided that BioNumerik has not
previously advised ASTA Medica that it will be unable to supply all or part of
such quantities.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
18
(b) If BioNumerik (or its Affiliates) are unable to meet the
requirements of ASTA Medica and its Affiliates and sublicensees for commercial
quantities of Product(s), then ASTA Medica may fill all of its remaining supply
requirements in excess of the amount provided by BioNumerik (and its Affiliates)
from a third party or parties. In such event, (i) BioNumerik shall grant a
license to ASTA Medica under the BioNumerik Patent Rights, BioNumerik Know-How,
and BioNumerik Improvements to manufacture and have such third party manufacture
Product(s) for the purpose of allowing such remaining supply requirements to be
filled, and (ii) BioNumerik shall also provide such information and reasonable
assistance as may be necessary to allow such third party to manufacture
Product(s) for the purpose of allowing such remaining supply requirements to be
filled.
(c) The cost of the Product(s) under the Supply Agreement
will be based on [**].
(d) ASTA Medica shall be entitled to have BioNumerik's cost
of manufacture and overhead confirmed by an independent firm of accountants to
which BioNumerik has no reasonable objection, but not more than once in any 12
month period, provided, however, that such firm of accountants shall only report
to ASTA Medica the amount of such costs, including overhead, and shall keep
confidential all other information acquired in the course of the examination.
ASTA Medica shall pay the cost of any such audit and the audit shall be
conducted so that it will not disrupt BioNumerik's ongoing business activities.
The Parties in good faith shall negotiate all other terms of supply and
purchase to be included in the Supply Agreement.
7.5 No Infringing Manufacture or Supply. In any event, BioNumerik
shall not be required to manufacture or supply Product(s) pursuant to this
Agreement if by so doing it would be liable to suit for infringement or
contributory infringement of the intellectual property rights of a third party.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
19
8. DILIGENCE.
8.1 General Diligence Efforts. ASTA Medica agrees to use its best
efforts to commercialize or cause to be commercialized the Product(s) in the
Territory as soon as reasonably plausible, taking into account external
conditions (e.g., economic, demographic, war or change in market) which would
reasonably be expected to adversely affect commercialization of the Product. As
part of such agreement, ASTA Medica shall use best efforts to commercialize,
promote, distribute, sell and establish the Product(s) in accordance with the
specified list of countries in the Territory in accordance with the development
priorities determined by the Alliance Steering Committee as described in section
4.2.1.
8.2 Target Development and Commercialization Plan. In addition to
the above general diligence requirements, ASTA Medica shall meet the Development
Plan targets determined by the Alliance Steering Committee for the Product(s).
If any of the specified targets are not met with respect to the Product(s), and
such targets continue to remain unmet for a period of 60 days or greater
following notice to ASTA Medica by BioNumerik, then the Parties hereto shall
discuss and decide in good faith how to solve the problem. If (a) the specified
development and commercialization targets contained in the Development Plan and
determined by the Alliance Steering Committee for the Product(s) are not met on
an annual basis for three consecutive years, (b) the Product(s) does not
receive Government Regulatory Approval to sell and distribute such product in at
least one country in Europe within 4 years after the date of this Agreement, or
(c) ASTA Medica completely ceases development, marketing, or regulatory activity
with respect to the Product(s) in one or more countries in the Territory and
such cessation continues for more than 60 days, then all licenses granted by
BioNumerik hereunder, and to the BioNumerik Improvements, BioNumerik Patent
Rights, and BioNumerik Know-How shall terminate (either for the entire Territory
with respect to clause(a) or clause(b) of this sentence or on a country by
country basis with respect to clause(c) of this sentence), all right, title, and
interest in the Product(s) shall automatically revert to BioNumerik (either for
the entire Territory with respect to clause(a) or clause(b) of this sentence or
on a country by country basis with respect to clause(c) of this sentence), and
all transferable elements of government approvals, registrations or other
regulatory approvals and applications shall be promptly transferred to
BioNumerik, provided that such rights shall not revert to BioNumerik if the
failure to meet such target, take such action, or receive such approval, as the
case may be, was caused in substantial part by the actions or failure to act of
BioNumerik. An extension of the time to meet the development performance
requirements in the previous sentence may be granted upon mutual agreement
between ASTA Medica and BioNumerik.
9. PATENT MATTERS.
9.1 BioNumerik Patent Maintenance. BioNumerik will be responsible
for prosecuting, maintaining and defending the patents covered by the BioNumerik
Patent Rights and BioNumerik will own all BioNumerik Patent Rights. The costs
for prosecuting and maintaining such patents shall be at BioNumerik's own
expense and the costs of defending such patents in the Territory will be borne
[**] by BioNumerik and [**] by ASTA Medica. BioNumerik will, during the term of
this Agreement, use reasonable best efforts to continue to obtain and maintain
additional patent protection for the Product(s). BioNumerik will regularly
advise ASTA Medica as to the progress of its patent applications and
registrations in the Territory relating to the Product(s). BioNumerik will
provide ASTA Medica with copies of all official actions from the patent offices
in the Territory. Any reply to those office actions dealing with the scope of
the claims will only be submitted by BioNumerik or its representative(s) after
ASTA Medica's prior input, which input will be promptly given and will not be
unreasonably withheld. ASTA Medica and BioNumerik
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
20
will develop a joint strategy as to patent strategy and prosecution in the
Territory with respect to the Product(s). In addition, BioNumerik will advise
ASTA Medica as to the patent strategy and prosecution outside the Territory with
respect to the Product(s). BioNumerik agrees not to file patents on or make use
of any Confidential Information that ASTA Medica has provided or disclosed to
BioNumerik unless it has obtained the prior written consent of ASTA Medica to
such filings or use. BioNumerik agrees to submit confidential pharmacological
and clinical data to patent offices in the Territory when necessary for
prosecution of patents by BioNumerik.
9.2 ASTA Medica Patent Maintenance and Assistance. ASTA Medica
will be responsible for prosecuting, maintaining, and defending the patents
covered by the ASTA Medica Patent Rights and ASTA Medica will own all ASTA
Medica Patent Rights. The costs for prosecuting and maintaining such patents
shall be at ASTA Medica's own expense and the costs of defending such patents in
the Territory will be borne [**] by ASTA Medica and [**] by BioNumerik. ASTA
Medica will regularly advise BioNumerik as to the progress of its patent
applications and registrations in the Territory relating to the Product(s). ASTA
Medica will provide BioNumerik with copies of all official actions from the
patent offices in the Territory. Any reply to those office actions dealing with
the scope of the claims will only be submitted by ASTA Medica or its
representative(s) after BioNumerik's prior input, which input will be promptly
given and will not be unreasonably withheld. ASTA Medica agrees not to file
patents on or make use of any Confidential Information that BioNumerik has
provided or disclosed to ASTA Medica unless it has obtained the prior written
consent of BioNumerik to such filings or use. In addition, ASTA Medica will
advise BioNumerik as to patent strategy and prosecution in the Territory with
respect to the Product(s).
9.3 BioNumerik Patent Representations. BioNumerik represents and
warrants to ASTA Medica that BioNumerik owns or has applied for all patents,
patent rights, inventions and know-how described in the BioNumerik Patent Rights
and necessary to grant the licenses granted herein. BioNumerik further
represents and warrants that, to the best of its knowledge, the manufacture,
use, sale or development of the Product(s) pursuant to this Agreement will not
infringe or conflict with any third party right or patent and that BioNumerik is
not aware of any pending third party patent application that, if issued, would
be infringed by the manufacture, use, sale or development of the Product(s)
pursuant to this Agreement. BioNumerik has no knowledge that any infringement
referred to above has occurred or of any other litigation or threat of
litigation involving the Product(s), and BioNumerik has not been notified and is
not aware of any actual or potential claims of such infringement or other
litigation involving the Product(s).
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
21
9.4 ASTA Medica Patent Representations. ASTA Medica represents and
warrants to BioNumerik that ASTA Medica has no knowledge that any infringement
or conflict with any third party involving the Product(s) has occurred or of any
other litigation or threat of litigation involving the Product(s). ASTA Medica
has not been notified and is not aware of any actual or potential claims of such
infringement or other litigation involving the Product(s). ASTA Medica has had
the opportunity to analyze and perform due diligence on the current BioNumerik
patent portfolio and the patent filing and prosecution status regarding the
Product(s).
9.5 Enforcement of Patents and Proprietary Rights.
(a) To the extent allowable by law, BioNumerik shall have
the sole first opportunity to institute and prosecute proceedings or suits
("Suits") for infringement of the BioNumerik Patent Rights and/or patents and
proprietary rights regarding the Product(s) in the Territory. BioNumerik shall
promptly advise ASTA Medica of any such Suit, and BioNumerik and ASTA Medica
shall develop a joint strategy with respect to all such Suits and other third
party intellectual property litigation regarding the Product(s) in the Territory
("Other IP Litigation"). ASTA Medica may join as a party to any Suit brought by
BioNumerik, and to the extent required to properly bring such litigation, ASTA
Medica shall join as a party to any Suit brought by BioNumerik in the Territory.
In the event BioNumerik refrains from initiating any Suit, ASTA Medica may bring
such Suit on its own, and if BioNumerik is required as a party to properly bring
or join such Suit, BioNumerik shall, upon ASTA Medica's request, bring such Suit
or join as a party to such Suit. BioNumerik shall have the sole right to decide
to accept or reject any settlement offer regarding the Suits or Other IP
Litigation, provided that the acceptance of any such settlement that negatively
affects ASTA Medica's rights hereunder or the ASTA Medica Patent Rights must be
consented to by ASTA Medica, which consent will not be unreasonably withheld. In
addition, a response regarding a consent requested by BioNumerik will be
provided by ASTA Medica within 5 business days after BioNumerik's request. , If
ASTA Medica is bringing any Suit without BioNumerik, then any settlement
agreement would have to be approved by both Parties to the extent that it may
affect the BioNumerik Patent Rights. The Parties will meet in good faith with
any third party licensee of the Product(s) to discuss the possible contribution
by such third party to the costs of any Suit.
(b) Except as otherwise expressly provided herein, all legal
expenses and costs in such Suits or Other IP Litigation (including attorneys'
fees) (the "Legal Expenses") when jointly prosecuted will be borne 50% by ASTA
Medica and 50% by BioNumerik. in the event only one of the Parties participates
in such litigation, then the Party participating in such litigation shall bear
100% of such Legal Expenses.
22
(c) All recoveries from any Suit (including attorneys' fees)
and from all Other IP Litigation regarding the Product(s) in the Territory
(regardless of which Party actually receives such recovery) shall be applied
first in or toward satisfaction of all out of pocket expenses borne by ASTA
Medica and BioNumerik proportionately in connection with such Suit or Other IP
Litigation. If any surplus remains it shall be divided equally between ASTA
Medica and BioNumerik, provided that in the event that only one of the Parties
is responsible for the prosecution of a Suit or Other IP Litigation, then the
recoveries from such Suit shall be solely awarded or paid to such Party.
(d) Each of ASTA Medica and BioNumerik shall give the other
Party full and complete access to all information such other Party reasonably
requests related to such Suits or Other IP Litigation
10. TRADEMARKS AND TRADEMARK RIGHTS.
10.1 Registration, Maintenance and Ownership.
10.1.1 BioNumerik will use reasonable best efforts to obtain
one global trademark to be used for the Product(s), which is defined in this
Agreement as the "Product Trademark". BioNumerik will inform ASTA Medica at
intervals about the efforts of obtaining the Product Trademark. The choice of
Product Trademark will be made by mutual agreement of BioNumerik and ASTA
Medica. In addition to the foregoing, ASTA Medica will check its pool of
protected trademarks and will provide BioNumerik with potential Product
Trademark proposals if available. If ASTA Medica and BioNumerik select a
trademark for the Product(s) that is owned by ASTA Medica, ASTA Medica shall
grant and hereby does grant BioNumerik an exclusive royalty-free perpetual
paid-up license (with the right to sublicense) to use such trademark in all
parts of the world outside the Territory. If the Parties use a trademark for the
Product(s) that is owned by BioNumerik, BioNumerik shall grant and hereby does
grant ASTA Medica an exclusive royalty-free perpetual paid up license (with the
right to sublicense) to use such Product Trademark in all parts of the
Territory. Should no global Product Trademark be available or should a given
trademark be available but not be acceptable in some jurisdiction (e.g. for
linguistic reasons), the Parties will seek and reach agreement on an alternative
trademark for such jurisdiction. The ownership, use and licensing of such
alternative trademark shall be governed by the same provisions as those
contained herein regarding the ownership, use, and licensing of the Product
Trademark
10.1.2 BioNumerik agrees to register and maintain the
Product Trademark at the expense of BioNumerik for use in and association with
Product(s) and such other Trademarks in the Territory in respect of the
Product(s) as ASTA Medica and BioNumerik shall approve. ASTA Medica agrees
23
to assist in such registration, if requested by BioNumerik and to sell the
Product(s) only under such Trademarks as may be agreed to in writing with
BioNumerik.
10.1.3 ASTA Medica agrees that, except for Trademarks
selected from the ASTA Medica pool, as expressly provided in Section 10.1.1
above, and for the name and housemark (logo) "ASTA Medica" both in word and
word-and-design form, BioNumerik shall be the exclusive owner of all registered
and unregistered trademarks and/or service marks associated with the Product(s)
(collectively, "BioNumerik Related Trademark Rights"), including, but not
limited to the Trademarks and the "BioNumerik" name and housemark (logo).
10.1.4 BioNumerik shall remain free to use and grant rights
to the use of the Trademarks (a) outside of the Territory and (b) inside of the
Territory with respect to the "BioNumerik" name and housemark (logo) in
connection with products, activities and uses other than the sale and
distribution of Product(s).
10.1.5 ASTA Medica acknowledges the validity of the
BioNumerik Related Trademark Rights in the Territory. ASTA Medica shall take due
care not to do or cause to be done any action or omission which adversely
affects the validity of the BioNumerik Related Trademark Rights or jeopardizes
the maintenance thereof, either during the term of this Agreement or thereafter.
10.1.6 BioNumerik acknowledges the validity of the
trademarks selected from the ASTA Medica pool in and outside the Territory.
BioNumerik shall take due care not to do or cause to be done any action or
omission which adversely affects the validity of these trademarks or jeopardizes
the maintenance thereof, either during the term of this Agreement or thereafter.
10.1.7 ASTA Medica agrees that it will maintain the quality
control standards for the Trademarks and BioNumerik Related Trademark Rights set
forth by BioNumerik and agreed by ASTA Medica (ASTA Medica shall not
unreasonably withhold such agreement) and will ensure that any sublicensee using
the Trademarks and BioNumerik Related Trademark Rights in the Territory shall be
subject to similar standards of quality control.
24
11. IMPROVEMENTS.
11.1 BioNumerik Improvements Included. During the term of this
Agreement, without any further payment, BioNumerik shall by the next Alliance
Steering Committee meeting fully disclose any BioNumerik Improvements to ASTA
Medica that have not previously been disclosed. In accordance with Section 2
hereof, BioNumerik has granted ASTA Medica an exclusive license to use the
BioNumerik Improvements in the Territory. Notwithstanding the foregoing,
BioNumerik shall, subject to the license grants contained in Section 2 hereof
and in accordance with such Section 2, be free to use any such BioNumerik
Improvements for its own purposes and for the benefit of its designated
Affiliates, assignees, sublicensees, and authorized users without any further
obligation to ASTA Medica, provided that any use of the BioNumerik Improvements
in the Territory shall not interfere with the exercise by ASTA Medica of the
rights granted to ASTA Medica pursuant to this Agreement.
11.2 ASTA Medica Improvement Grantbacks. During the term of the
licenses granted herein, without any further payment, ASTA Medica shall by the
next Alliance Steering Committee meeting fully disclose any ASTA Medica
Improvements to BioNumerik that have not previously been disclosed. ASTA Medica
agrees to use all ASTA Medica Improvements for the purpose of supporting the
development and commercialization of Product(s) in the Territory in accordance
with this Agreement. In addition, ASTA Medica hereby grants BioNumerik a
non-exclusive, perpetual, worldwide except in the Territory and Japan,
royalty-free paid-up license to all ASTA Medica Improvements, and BioNumerik
(and its designated Affiliates and sublicensees) may, subject to the license
grants contained in Section 2 hereof, make, have made, use, sell and license
products and technology incorporating such ASTA Medica Improvements throughout
the world in areas outside the Territory, but excluding Japan. ASTA Medica
retains the right to practice such ASTA Medica Improvements other than in
connection with the Product(s) in the event of termination of the licenses
granted herein.
11.3 Joint Improvements. Any new intellectual property jointly
conceived or reduced to practice by ASTA Medica and BioNumerik ("Joint
Improvements") shall be jointly owned by ASTA Medica and BioNumerik on an equal
basis, and all costs to file, prosecute, and maintain patent applications,
patents, and/or other applicable intellectual property protection regarding
Joint Improvements shall be shared equally by BioNumerik and ASTA Medica Each of
BioNumerik and ASTA Medica hereby agrees to license its interest in such
intellectual property in the manner provided in Sections 11.1 and 11.2.
25
11.4 Sublicenses. Any sublicense by ASTA Medica of BioNumerik
Improvements or Joint Improvements shall require the prior written consent of
BioNumerik in the manner described in Section 2.3. Any sublicense by BioNumerik
of ASTA Medica Improvements or Joint Improvements shall require the prior
written consent of ASTA Medica, which will not be unreasonably withheld. Any
sublicense by either Party of Joint Improvements shall require the prior written
consent of the other Party, which shall not be unreasonably withheld.
12. CONFIDENTIALITY.
12.1 Confidential and Proprietary Information. Each Party hereto
acknowledges that in order for BioNumerik and ASTA Medica to carry out their
respective obligations under this Agreement, it may be necessary for BioNumerik
and ASTA Medica to disclose to each other certain Confidential Information. Each
Party hereto agrees:
12.1.1 To ensure that it does not reveal or make available
any Confidential Information of the other to any third party, except as such
disclosure may be expressly authorized by this Agreement or otherwise
specifically approved in writing by the Party against whom such disclosure is
sought and to ensure that it will treat such Confidential Information of the
other Party in the same manner as it treats its own Confidential Information,
such treatment to be at least the degree that a reasonable person would perform
under similar circumstances;
12.1.2 To ensure that Affiliates, sublicensees, employees,
agents, associates or other persons to whom such disclosure may be made or who
may otherwise have access to such Confidential Information of the other have
agreed in writing to safeguard and maintain such Confidential Information of the
other;
12.1.3 To ensure that Confidential Information of the other
is not used for the receiving Party's benefit except as such benefits are
expressly contemplated herein;
12.1.4 To prohibit the Confidential Information of the other
from being duplicated in any manner; except as is reasonably necessary to
perform the tasks and obligations contemplated under this Agreement; and
26
12.1.5 To prohibit the Confidential Information of the other
from being published in any form without the prior express written consent of
the disclosing Party.
12.2. Matters not included as Confidential Information.
Notwithstanding anything herein to the contrary, the defined term "Confidential
Information" and the obligations of nondisclosure, nonuse and confidentiality
relating thereto shall not include any information or data which:
12.2.1 Is or becomes known to the general public through no
action or fault of the receiving Party;
12.2.2 Was already known to the receiving Party without any
obligation of confidentiality prior to the date of disclosure hereunder or under
the ASTA Medica Confidentiality Agreement or the BioNumerik Confidentiality
Agreement, as the case may be, as evidenced by the written records of that
Party;
12.2.3 Is or becomes known to the receiving Party without
any obligation of confidentiality from a third party having the right to
disclose the same, and not having a confidential relationship with the
disclosing Party with respect thereto; or
12.2.4 Is necessary for the receiving Party or its
Affiliates to disclose to a governmental authority or any agency thereof on a
non-confidential basis, in order to pursue Government Regulatory Approvals or
other regulatory approvals as contemplated by this Agreement or for other
purposes related to the intent of this Agreement, provided, however, that the
receiving Party shall notify the disclosing Party before disclosing such
Confidential Information and shall take such actions as may be available to
restrict the extent of such disclosure and to obtain the protection of such
information to the extent possible.
12.3 Survival of Confidentiality. The obligations of this Section
12 with respect to Confidential Information shall be in effect during the term
of this Agreement and shall continue indefinitely after the termination of this
Agreement.
13. PAYMENTS, RECORDS AND ACCOUNTING.
13.1 Means of Payment. All payments due by the Parties to each
other under this Agreement shall be made by bank wire transfer in immediately
available funds to a bank account designated by the payee. All payments
hereunder shall be made in U.S. dollars.
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13.2 Currency. In the case of sales made, or costs incurred, in
currencies other than United States dollars, such amounts for payment of
royalties or other payments directed to BioNumerik shall be converted into
United States dollars using a monthly average of the officially published
conversion rate of the European Central Bank, Frankfurt, Germany.
13.3 Access to Records.
(a) Each Party shall keep (and shall cause its Affiliates
and sublicensees to keep) complete and accurate records and accounts regarding
the performance of its obligations under this Agreement. Such accounts and
records shall be kept at the principal place of business of the respective
Parties (or their Affiliates or sublicensees, as applicable).
(b) Within 90 days after the end of each Fiscal Year, ASTA
Medica's accountant, KPMG, shall audit ASTA Medica's records and accounts
regarding the performance of ASTA Medica's obligations under this Agreement.
Following such audit, KPMG shall provide written confirmation to BioNumerik of
ASTA Medica's performance of its payment and related obligations hereunder.
BioNumerik shall be entitled to have BioNumerik's independent auditor perform an
audit of ASTA Medica's books and records on a confidential basis for the purpose
of confirming ASTA Medica's performance of its obligations under this Agreement,
provided that (i) one such audit may be conducted each year; and (ii) one
additional audit may be conducted each year upon a showing by BioNumerik of
reasonable cause for such audit and obtaining the prior written consent of ASTA
Medica, which consent will not be unreasonably withheld. BioNumerik shall pay
the cost of any such audits and each audit will be conducted so that it will not
disrupt ASTA Medica's ongoing business activities. If any such audit determines
a variation or error in the amounts paid or payable to any Party, the Party
owing such additional amount shall make prompt payment thereof to the other
Party within 45 days of such determination.
13.4 Taxes and Required Withholdings. All taxes or related
governmental charges levied or assessed with respect to payments by ASTA Medica
to BioNumerik shall be borne by BioNumerik. ASTA Medica will support BioNumerik
to apply for tax reimbursements and/or tax exemption certificates from the
competent German or other tax authorities with respect to such payments.
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14. DURATION AND TERMINATION OF AGREEMENT.
14.1 Duration. The term of this Agreement shall commence upon the
date hereof and, unless otherwise terminated as set forth herein, the term of
this Agreement shall expire upon the later to occur of (i) the expiration of the
last to expire patent in the Territory relating to the Product(s) and (ii) 18
years after the date hereof. After expiration of the term of this Agreement
pursuant to clause (i) or (ii) of the preceding sentence, the licenses granted
by BioNumerik to ASTA Medica hereunder shall automatically become non-exclusive,
irrevocable, fully-paid licenses to use and/or sublicense the use of BioNumerik
Know-How to manufacture, use and sell Product(s) in each country in the
Territory where such license has previously been in effect. In the event one or
more countries are eliminated from the scope of the ASTA Medica license pursuant
to this Agreement, the license to ASTA Medica in Section 2 shall not apply to
such countries. In the event of expiration of this Agreement pursuant to this
Section 14.1, the obligations and rights of the Parties under this Agreement
shall terminate, except that the rights and obligations under this Section 14.1
and under Section 11 (Improvements), 12 (Confidentiality), 17 (Indemnification)
and Section 20.9 (Arbitration) shall survive and continue. In addition, the
rights of the Parties to use the ASTA Medica Data and Results and the BioNumerik
Data and Results shall continue as provided in Section 6.
14.2 Termination.
14.2.1 The Parties hereto shall be able to terminate this
Agreement in the following events:
(a) If a Party to this Agreement shall materially
breach, materially default or otherwise materially fail to perform under the
terms of this Agreement, the other Party may terminate this Agreement by giving
60 days advance written notice, unless the breach, default, or failure is cured
within such notice period.
(b) If after Government Regulatory Approvals for
the Product(s) have been obtained, the Product(s) cease to have regulatory
authorization for their sale or distribution in all or substantially all of the
Territory, then either Party may terminate this Agreement upon 60 days advance
written notice, provided that a Party may not terminate this Agreement pursuant
to this clause (b) if the cessation of the Product(s) to have such regulatory
authorization was caused in substantial part by the actions or failure to act of
such Party;
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(c) If (1) a Party (the "Competitor Party")
proposes to allow or authorize a change in its ownership or control so that, as
a result of such change, such Party would be deemed to be a Competitor or an
Affiliate of a Competitor of the other Party, or (2) the ownership or control of
the Competitor Party changes so that, as a result of such change, such Party
would be deemed to be a Competitor or an Affiliate of a Competitor of the other
Party, then the Competitor Party shall give prompt written notice (the "Change
in Control Notice") to the other Party of such change or proposed change. If
requested by the other Party, the Parties shall negotiate for up to 60 days in
an effort to reach agreement that (i) such change in ownership or control will
not impair the Competitor Party's fitness and ability to perform in accordance
with the terms of this Agreement, and (ii) that such change in ownership or
control will not impair the business interests of the other Party. If the
Parties are not able to reach such an agreement within such 60 day period, the
other Party may terminate this Agreement upon 60 days advance written notice to
the Competitor Party. In addition to and notwithstanding the foregoing, in the
event the Competitor Party is ASTA Medica, then BioNumerik may request and shall
be granted a period (the "Evaluation Period") of up to 6 months following
receipt of the Change in Control Notice in which to make a determination as to
whether or not to terminate this Agreement. During the Evaluation Period, (1)
ASTA Medica shall continue to conduct all of its obligations hereunder regarding
development and commercialization of the Product(s), (2) BioNumerik may conduct
discussions with potential third party alliance partners for the Product(s) in
the Territory and may disclose information regarding the Product(s) to such
parties on a confidential basis, and (3) ASTA Medica shall provide reasonable
support and assistance in connection with BioNumerik's discussions with such
potential third party partners (including providing such information with
respect to the Product(s) as may be reasonably requested by BioNumerik and being
available for verbal discussions regarding the Product(s)). BioNumerik shall
have the right at any time prior to the end of such Evaluation Period to
terminate this Agreement upon 60 days advance written notice to ASTA Medica. In
the event of such a termination by BioNumerik, BioNumerik shall make the
reimbursements to ASTA Medica provided in Section 14.5 hereof, and ASTA Medica
shall transfer to BioNumerik the exclusive ownership of all information and
rights as provided in such Section 14.5.
14.2.2 If either Party shall become bankrupt or insolvent or
any proceeding is commenced to place its business in the hands of a receiver,
assignee or trustee in bankruptcy, or any proceeding is commenced for company
dissolution, or liquidation, whether voluntarily or otherwise, and such
proceedings are not dismissed within ninety (90) days of the commencement of any
such proceeding, then this Agreement shall automatically terminate to the extent
permitted by applicable law.
14.2.3 If, on the date that data package exclusivity,
granted by the EMEA upon approval of BNP7787 for marketing in Europe, for
BNP7787 expires in the European Union, no European Patents have been issued or
allowed that are included in the BioNumerik Patent Rights which protect the
marketing exclusivity of the Product, and which designate at least three of the
countries identified below (the "Major Countries"); then ASTA Medica may
terminate this Agreement upon sixty (60) days written notice to BioNumerik. For
purposes hereof, "Major Countries" means Germany, The United Kingdom, Spain,
France and Italy.
14.3 Effect of Expiration or Termination. Termination is not the
sole remedy under this Agreement and termination of Product(s) rights or this
Agreement for any reason or the expiration of the term of this Agreement shall
not affect obligations or rights of either Party incurred or accrued prior to
such termination or expiration. The termination of Product(s) rights or this
Agreement shall not affect the right of any Party to recover damages from any
breach of this Agreement.
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14.4 Termination for BioNumerik's Breach, Change in Control or
Bankruptcy. In the event (i) ASTA Medica validly terminates this Agreement
pursuant to Section 14.2.1(a), Section 14.2.1(c), or Section 19.3 or (ii) this
Agreement terminates due to the bankruptcy, insolvency, receivership,
dissolution, or liquidation of BioNumerik pursuant to Section 14.2.2, then ASTA
Medica at its option upon written notice to BioNumerik at the time of such
termination may determine to either (a) continue to sell Product(s) in the
Territory, in which event all licenses granted to ASTA Medica (including the
right to use the BioNumerik Improvements) under this Agreement shall survive,
subject to ASTA Medica's continued obligation to pay royalties to BioNumerik
hereunder, or (b) cease selling Product(s) in the Territory, in which event all
rights of BioNumerik to use the ASTA Medica Improvements shall terminate and all
licenses granted to ASTA Medica hereunder shall terminate. In addition, if
requested by ASTA Medica in the event ASTA Medica determines to continue to sell
Product(s) in the Territory, (x) BioNumerik shall grant a non-exclusive license
to ASTA Medica under the BioNumerik Patent Rights, BioNumerik Know-How, and
BioNumerik Improvements to manufacture and have third parties manufacture
Product(s) for distribution and sale in the Territory, and (y) BioNumerik shall
also provide such information and reasonable assistance as may be necessary to
allow ASTA Medica and/or such third parties to manufacture Product(s) for
distribution and sale in the Territory.
14.5 Termination for ASTA Medica's Breach, Change in Control or
Bankruptcy. In the event (i) BioNumerik validly terminates this Agreement
pursuant to Section 14.2.1(a), Section 14.2.1(c) or Section 19.3, or (ii) this
Agreement terminates due to the bankruptcy, insolvency, receivership,
dissolution, or liquidation of ASTA Medica pursuant to Section 14.2.2, then all
licenses granted to ASTA Medica hereunder and all rights to the Product
Trademark granted to ASTA Medica hereunder shall terminate, all rights to the
Product(s) shall automatically revert to BioNumerik, and ASTA Medica shall
cooperate with BioNumerik in all respects to effect the prompt and efficient
transfer to BioNumerik of product development and marketing activities for the
Product(s) in the Territory and all transferable elements of government
approvals, registrations, or other regulatory approvals and applications
relating to the Products(s) in the Territory. In the event of such termination,
ASTA Medica hereby assigns to BioNumerik all right, title and interest to all
regulatory filings, registrations, applications and approvals pertaining to the
Product(s) and the right to use the ASTA Medica Data and Results for the purpose
of developing and commercializing Product(s) in the Territory. In addition,
contingent upon such termination, ASTA Medica hereby grants to BioNumerik a
non-exclusive, royalty-free license under the ASTA Medica Patent Rights, the
ASTA Medica Know-How, and the ASTA Medica Improvements which are necessary or
useful for the manufacture, use or sale of the Product(s) as such product(s)
exist as of the date of such termination. BioNumerik's rights to
31
practice such ASTA Medica technology shall be limited exclusively to the purpose
of development and commercialization of products that would be Product(s)
hereunder. In addition to the foregoing, in the event this Agreement is
terminated by BioNumerik pursuant to Section 14.2.1(c) or Section 19.3, then
within 60 days of such termination, BioNumerik shall reimburse ASTA Medica for
(1) the license fees paid by ASTA Medica to BioNumerik pursuant to Section 5.1
hereof, and (2) all actual and reasonable research and development costs paid by
ASTA Medica and directly linked to the successful development and
commercialization of the Product(s) in the Territory. In addition, in the event
of such a termination by BioNumerik, ASTA Medica shall assign to BioNumerik
(and/or its designees) an exclusive, royalty-free, perpetual license in the
Territory under (a) the ASTA Medica Improvements, (b) the ASTA Medica Patent
Rights, (c) any rights to the Product Trademark owned by ASTA Medica, and (d)
all other information, findings, and developments, in each case as such
improvements, patent rights, trademark, information, findings or developments
may be developed or generated by ASTA Medica up to the date of such termination.
In addition, ASTA Medica agrees to provide all reasonable support and
assistance, including the preparation and signing of documents and instruments,
as may be requested by BioNumerik in order to further evidence or reflect the
rights to be transferred to BioNumerik pursuant to this Section.
14.6 Termination Due to Cessation of Regulatory Authorization or
Lack of Patent Coverage. If this Agreement is terminated pursuant to Section
14.2.1 (b) or by ASTA Medica pursuant to Section 14.2.3, the obligations and
rights of the Parties under this Agreement (including all license grants) shall
terminate and all rights to the Product(s) shall revert to BioNumerik, provided
that the rights and obligations under Section 11 (Improvements), 12
(Confidentiality), 17 (Indemnification) and Section 20.9 shall survive and
continue. In addition, both ASTA Medica and BioNumerik shall retain the right to
use the Data and Results as provided in Section 6 and, in the event this
Agreement is terminated pursuant to Section 14.2.1 (b), BioNumerik and its
assignees and sublicensees may also use such Data and Results for the purpose of
seeking further Government Regulatory Approvals in the Territory following such
termination. In the event of termination by ASTA Medica pursuant to Section
14.2.3, ASTA Medica hereby assigns to BioNumerik all right, title and interest
to all regulatory filings, registrations, applications and approvals pertaining
to the Product(s) that are then in effect.
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14.7 Sale of Inventory. Upon valid termination of this Agreement by
BioNumerik pursuant to Section 14.2.1(a) , Section 14.2.1(c) or Section 19.3,
ASTA Medica may, to the extent permitted by applicable law, continue for a
period of up to 6 months to sell in the Territory Product(s) which it has in
inventory at the time of termination; provided, however, that any such sales
shall (i) be made at prices and under terms consistent with previous sales of
the Product(s) by ASTA Medica and (ii) be conducted in a manner so as not to be
harmful to BioNumerik or the market for the Product(s). Payments shall be paid
to BioNumerik in respect of all such sales as otherwise provided in this
Agreement. Except to the extent necessary to sell such existing inventory, ASTA
Medica shall immediately and permanently discontinue the use of the Trademarks
and take all steps necessary to confirm BioNumerik's ownership of such
trademarks and the Government Regulatory Approvals. In the event of such a valid
termination by BioNumerik, BioNumerik shall retain the exclusive right to use
the Data and Results.
14.8 Country Specific Termination of Rights. If ASTA Medica does
not intend to sell Product(s) in a particular country in the Territory or if
ASTA Medica is not making reasonable ongoing efforts to commence selling
Product(s) in a particular country in the Territory, the license grants
contained in Sections 2.1 and 2.2 hereof shall terminate with respect to such
country in the Territory and such rights shall automatically revert to
BioNumerik. BioNumerik shall then be free to pursue the development, marketing,
sale and distribution of Product(s) in such country.
15. BIONUMERIK REPRESENTATIONS & WARRANTIES.
In addition to the patent representations contained in Section 9.3,
BioNumerik represents and warrants to ASTA Medica as follows:
15.1 Due Organization and Authority. BioNumerik represents and
warrants: (i) that it is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas and has the corporate power
and authority to execute, deliver and carry out the terms and provisions of this
Agreement; (ii) that the execution, delivery and performance of this Agreement
by BioNumerik shall not require the consent of any third party, and shall not
cause a breach or violation under any fiduciary, contractual, statutory or
judicial obligation or restraint to which BioNumerik is subject or bound; and
(iii) that the person executing this Agreement on behalf of BioNumerik is duly
authorized to do so to bind BioNumerik.
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15.2 Safety of Product(s). BioNumerik represents and warrants that
is has not received any notification of, and has no knowledge that there is now
pending or that there have been any United States or other judicial or
administrative orders to ban the development or use of BNP7787, and BioNumerik
has no knowledge of any significant or material severe adverse reactions or test
results encountered or discovered regarding the use of BNP7787 which would
render BNP7787 unsuitable or unsafe for the purpose contemplated by this
Agreement, which have not been previously disclosed to ASTA Medica.
15.3 Warranties on Quality of the Know-How. BioNumerik represents
and warrants to ASTA Medica that the BioNumerik Know-How provided by BioNumerik
under this Agreement is the technology currently utilized by BioNumerik in its
own manufacture, formulations and potential commercial uses of BNP7787.
15.4 Governmental Agencies and Product Documentation. BioNumerik
represents and warrants that it has disclosed and made available to ASTA Medica
all pertinent correspondence received from any governmental agency, including
patent offices, that relates to or impacts on the ability to develop the
Product(s) hereunder in the Territory and will disclose all such further
information to ASTA Medica in the future. BioNumerik further represents and
warrants that, to the best of its knowledge, the documentation provided by
BioNumerik to ASTA Medica in connection with the Product(s) is accurate and
complete in all material respects and that no such documentation is
intentionally inaccurate or incomplete.
15.5 Circumstances and Acts. BioNumerik represents and warrants
that it does not know of any circumstances and has not performed any acts that
are inconsistent with the terms or purposes of this Agreement or that may
infringe upon any of the rights of ASTA Medica hereunder.
16. ASTA MEDICA REPRESENTATIONS AND WARRANTIES.
In addition to the patent representations contained in Section 9.4,
ASTA Medica represents and warrants to BioNumerik as follows:
16.1 Due Organization and Authority. ASTA Medica represents and
warrants: (i) that it is a corporation duly organized, validly existing and in
good standing under the laws of Germany and has the full power and authority to
execute, deliver and carry out the terms and provisions of this Agreement; (ii)
that
34
the execution, delivery and performance of this Agreement by ASTA Medica shall
not require the consent of any third party and shall not cause a breach or
violation under any fiduciary, contractual, statutory or judicial obligation or
restraint to which ASTA Medica is subject or bound; and (iii) that the person
executing this Agreement on behalf of ASTA Medica is duly authorized to do so to
bind ASTA Medica.
16.2 Right to Accept License; Due Diligence ASTA Medica represents
and warrants that it has the right, without any restrictions, to accept the
licenses set forth herein. ASTA Medica further represents that it has had the
opportunity to perform due diligence with respect to the Product(s) and has
performed such diligence to the satisfaction of ASTA Medica.
16.3 Governmental Agencies. ASTA Medica represents and warrants
that it has disclosed and made available to BioNumerik all pertinent
correspondence received from any governmental agency that relates to or impacts
on its ability to develop the Product(s) hereunder in the Territory and will
disclose all such further information to BioNumerik in the future.
16.4 Circumstances and Acts. ASTA Medica represents and warrants
that it does not know of any circumstances and has not performed any acts that
are inconsistent with the terms or purposes of this Agreement or that may
infringe upon any of the rights of BioNumerik hereunder.
17. INDEMNIFICATION.
17.1 Indemnification by BioNumerik. BioNumerik hereby agrees to
indemnify, hold harmless and defend ASTA Medica from and against any and all
expenses, costs of defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement), and any
amounts ASTA Medica becomes legally obligated to pay because of any claim or
claims against it to the extent that such claim or claims (i) are due to product
liability claims arising out of Product(s) supplied to ASTA Medica by BioNumerik
other than to the extent such claims arose out of errors made by or directions
of ASTA Medica, (ii) arise out of manufacturing defects of the Product(s)
supplied by BioNumerik to ASTA Medica, (iii) are due to the non-compliance by
BioNumerik with applicable laws and regulations in the Territory, (iv) arise out
of the breach or alleged breach of any representation or warranty by BioNumerik
hereunder, or (v) are due to the negligence or willful misconduct of BioNumerik;
provided that (a) ASTA Medica provides BioNumerik with prompt notice of any such
claim and the exclusive ability to defend (with the reasonable cooperation of
ASTA Medica) and settle any such claim and (b) such indemnification shall
35
not apply to the extent such claims are covered by ASTA Medica's indemnity set
forth in Section 17.2 below.
17.2 Indemnification by ASTA Medica. ASTA Medica hereby agrees to
indemnify, hold harmless and defend BioNumerik from and against any and all
expenses, costs of defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts BioNumerik becomes legally obligated to pay because of any claim or
claims against it to the extent that such claim or claims (i) are due to the
non-compliance by ASTA Medica with applicable laws and regulations in the
Territory, (ii) result from ASTA Medica's activities under this Agreement, (iii)
arise out of the breach or alleged breach of any representation or warranty by
ASTA Medica hereunder, (iv) are due to the negligence or willful misconduct of
ASTA Medica, or (v) arise out of the possession, manufacture, use, sale or
administration of the Product(s) by ASTA Medica or ASTA Medica's Affiliates or
sublicensees (including, without limitation, the release, administration, or
shipment of any Product(s) that is adulterated or fails to meet applicable
manufacturing specifications); provided that (a) BioNumerik provides ASTA Medica
with prompt notice of any such claim and the exclusive ability to defend (with
the reasonable cooperation of BioNumerik) or settle any such claim and (b) such
indemnification shall not apply to the extent such claims are covered by
BioNumerik's indemnity set forth in Section 17.1 above.
17.3 Mechanics. In the event that the Parties cannot agree as to
the application of Section 17.1 and 17.2 above to any particular loss or claim,
the Parties may conduct separate defenses of such claim. Each Party further
reserves the right to claim indemnity from the other in accordance with Section
17.1 and 17.2 above upon resolution of the underlying claim, notwithstanding the
provisions of Sections 17.1 and 17.2 above requiring the indemnified Party to
tender to the indemnifying Party the exclusive ability to defend such claim or
suit.
17.4 Insurance Coverage. Each Party represents and warrants that it
is covered and will continue to be covered by a comprehensive general liability
insurance program that covers each Party's activities and obligations hereunder.
Each Party shall provide the other Party with written notice at least fifteen
(15) days prior to any cancellation or material change in such insurance
program. Each Party shall maintain such insurance program, or other program with
comparable coverage, beyond the expiration or termination of this Agreement
during (i) the period that any Product(s) is being commercially distributed or
sold other than for the purpose of obtaining regulatory approvals by ASTA Medica
or by a sublicensee, Affiliate or agent of ASTA Medica and (ii) a commercially
reasonable period thereafter.
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18. RELATION OF THE PARTIES. The relationship between BioNumerik and
ASTA Medica under this Agreement is that of Parties to an arms-length negotiated
contract. Nothing in this Agreement is intended or is to be construed so as to
create between BioNumerik and ASTA Medica, respectively, the relationship of
partners, or joint ventures, or to establish either Party hereto as the employee
or agent of the other Party hereto. Neither Party hereto has an express or
implied right or authority under this Agreement to make any statement or
commitments of any kind or to assume or to create any obligations on behalf of
or in the name of the other Party hereto, or to bind the other Party hereto to
any contract, agreement or undertaking with any third party
19. ASSIGNMENTS.
19.1 Assignment Restrictions. Subject to Sections 19.2 through 19.4
below, neither Party shall have the right to assign or delegate this Agreement,
or any of its rights or obligations under this Agreement without the other's
express written consent, such consent not to be unreasonably withheld, and said
assignment or delegation without such consent shall be null and void for all
purposes.
19.2 Sale of Business. BioNumerik or ASTA Medica may assign its
entire interest in this Agreement provided that (i) such assignment is part of
the sale of all or substantially all of the assignor's business related to the
Product(s); (ii) notice of any contemplated assignment is given to the other
Party not less than 30 days prior to the effectiveness thereof; (iii) the
assignor delivers to the other Party a copy of the instrument, duly executed by
the parties thereto, effecting such assignment and affirming a complete
assumption by the assignee of the obligations of the assignor hereunder and a
recognition of the rights of the other Party, and (iv) if the assignment is to a
Competitor, the Parties shall also comply with the procedures set forth in
Section 19.3 prior to any assignment.
19.3 Assignments to Competitors. In the event a Party receives an
offer from an outside party or proposes to assign this Agreement to a
Competitor, the assigning Party shall give the other Party written notice to
such effect and, if requested by the non-assigning Party, the Parties shall
negotiate for up to 60 days in an effort to reach agreement (i) that the
proposed assignee is at least the equivalent of the assigning Party with respect
to its fitness and ability to perform in accordance with the terms of this
Agreement and (ii) that such assignment will not impair the reasonable business
interests of the non-assigning party. If the Parties are unable to reach an
agreement as to such matters, the non-assigning Party may terminate this
Agreement upon 60 days written notice to the assigning Party following such
assignment. In addition to and notwithstanding the foregoing, in the event the
assigning Party is ASTA Medica, then BioNumerik may request and shall be granted
a period (the "Evaluation Period") of up to 6 months following receipt of the
written notice pursuant to this Section in which to make a determination as to
whether or not to terminate this Agreement. During the Evaluation Period, (1)
ASTA Medica shall continue to conduct all of its obligations hereunder regarding
development and commercialization of the Product(s), (2) BioNumerik may conduct
discussions with potential third party alliance partners for the Product(s) in
the Territory and may disclose information regarding the Product(s) to such
parties on a confidential basis, and (3) ASTA Medica shall provide reasonable
support and assistance in connection with BioNumerik's discussions with such
potential third party partners (including providing such information with
respect to the Product(s) as may be reasonably requested by BioNumerik and being
available for verbal discussions regarding the Product(s)). BioNumerik shall
have the right at any time prior to the end of such Evaluation Period to
terminate this Agreement upon 60 days advance written notice to ASTA Medica. In
the event of such a termination by BioNumerik, BioNumerik shall make the
reimbursements to ASTA Medica provided in Section 14.5 hereof, and ASTA Medica
shall transfer to BioNumerik the exclusive ownership of all information and
rights as provided in such Section 14.5.
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19.4 Assignment to Affiliates. Subject to Section 19.3, this
Agreement and the obligations hereunder shall be assignable, in whole or in
part, by BioNumerik, without consent of ASTA Medica, to one or more Affiliates
who shall affirm to ASTA Medica a complete assumption of the obligations
assigned; provided that BioNumerik shall guarantee the performance by such
Affiliate(s) of such obligations. Subject to Section 19.3, this Agreement and
the obligations hereunder shall be assignable, in whole or in part, by ASTA
Medica, without consent of BioNumerik, to one or more Affiliates who shall
affirm to BioNumerik a complete assumption of the obligations assigned; provided
that ASTA Medica shall guarantee the performance by such Affiliate(s) of such
obligations. The Parties hereby expressly recognize and agree that,
notwithstanding Section 19.3, if the oncology business unit (the "Oncology
Business Unit") of ASTA Medica shall become a separate legal entity, ASTA Medica
shall be permitted to assign this Agreement to the Oncology Business Unit upon
written notice to BioNumerik, provided that the ultimate ownership of the
Oncology Business Unit shall not have changed from the ultimate ownership of
ASTA Medica prior to such assignment, the Oncology Business Unit shall affirm to
BioNumerik a complete assumption of the obligations assigned, and ASTA Medica
shall guarantee the performance by the Oncology Business Unit of such
obligations.
20. MISCELLANEOUS.
20.1 Regulatory Communications. Each Party agrees to notify the
other immediately by telephone (with prompt written follow-up) of any inquiry,
contact or communication received from any governmental regulatory agency or
other official body that materially and adversely relates to or impacts upon the
Product(s) or any component or ingredient thereof, and will promptly furnish the
other Party with copies of all written communications relating thereto sent to
or received from said regulatory agency.
20.2 Adverse Effects. Each Party shall promptly inform the other in
writing of any material side effects or adverse effects, conditions or reactions
encountered by or reported to them in connection with the Product(s) which could
in any significant way render the Product(s) or any of the components thereof
unsafe or unfit. The Parties shall follow a written mutually agreed upon
procedure for communication of Adverse Events relating to the Product(s). These
procedures will be agreed to by the Parties prior to the initiation of clinical
trials in the Territory.
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20.3 Market Analysis and Marketing Reports. ASTA Medica shall
provide such analyses and reports as BioNumerik may reasonably request
describing the market for and performance of the Product(s) in the Territory,
the market position and promotion of the Product(s) in the Territory,
competitive product information including pricing and promotional information,
physician and consumer acceptance of the Product(s), and any technical,
promotional or other information developed or obtained by ASTA Medica which
could affect the Product(s) in the Territory or generally. To assist in the
distribution of Product(s) in the Territory, ASTA Medica shall regularly provide
BioNumerik with information and data that will enable BioNumerik to have a
complete update and better understanding of the general and specific markets
relating to the sale of Product(s) in the Territory under consideration. Such
Market Analysis and Reports should be provided and discussed at each Alliance
Steering Committee meeting. BioNumerik shall provide such analyses and reports
as ASTA Medica may reasonably request describing the market for and performance
of the Product(s) outside the Territory, the market position and promotion of
the Product(s) outside the Territory, competitive product information including
pricing and promotional information, physician and consumer acceptance of the
Product(s), and any technical, promotional or other information developed or
obtained by BioNumerik which could affect the Product(s) in the Territory or
generally. To assist in the distribution of Product(s) in the Territory,
BioNumerik shall regularly provide ASTA Medica with information and data that
will enable ASTA Medica to have a complete update and better understanding of
the general and specific markets relating to the sale of Product(s) outside the
Territory under consideration.
20.4 Notice/Reports. Any reports, notices or other communications
required or permitted to be given by either Party hereto will be given in
writing by personal delivery, courier service or facsimile, or by registered or
certified air mail, postage prepaid, return receipt requested, addressed to each
respective Party at the address shown below.
If to BioNumerik:
BioNumerik Pharmaceuticals, Inc.
8122 Datapoint Drive, Suite 1250
San Antonio, Texas 78229
Attn: Frederick H. Hausheer, M.D.
Facsimile No.: (210) 614-0643
If to ASTA Medica:
ASTA Medica Aktiengesellschaft
Weismullerstrasse 45
60314 Frankfurt am Main, Germany
Attn: Dr. Jose-Maria Gimenez-Arnau
Facsimile No. ++49/69/4001-2995
39
or to such other address as either Party may indicate by proper notice to the
other in the same manner as provided herein; provided, however, that the notices
referred to in or required under Sections 9.5 and 14.2. shall be given by
personal delivery, courier service, facsimile, or registered or certified
airmail mentioned above. All notices are deemed effective on the date of receipt
or, if delivery is not accepted, five (5) days after placement with the
addressee, an overnight courier service or a post office, as applicable.
20.5 Severability. Should any provision of this Agreement be held
to be invalid, unenforceable, or against public policy, the remaining provisions
hereof shall not be affected thereby. In such event, the Parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible with respect to those provisions,
which were held, to be invalid, unenforceable or against public policy.
20.6 Counterparts. This Agreement may be executed in several
counterparts, each of which will be an original, but all of which, when taken
together, will constitute one and the same instrument.
20.7 Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS
9 AND 15, BIONUMERIK MAKES NO WARRANTY WITH RESPECT TO ANY TECHNOLOGY, GOODS,
SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS
WARRANTIES OF MERCHANTABILITY, SAFETY, AND FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING. THE PARTIES
UNDERSTAND AND AGREE THAT DEVELOPMENT AND COMMERCIALIZATION OF BNP7787 AND/OR
PRODUCT(S) WILL INVOLVE APPROVAL BY REGULATORY AUTHORITIES AND THAT NO PARTY IS
GUARANTEEING THE SAFETY OR EFFICACY OF BNP7787 AND/OR PRODUCT(S) OR THAT ANY
REGULATORY AUTHORITY OR AGENCY SHALL GIVE COMMERCIAL APPROVAL OF BNP7787 AND/OR
PRODUCT(S).
20.8 Force Majeure.
20.8.1. Except for the payment of money, no failure or
omission by the Parties hereto in the performance of any obligation of this
Agreement shall be deemed a breach of this Agreement nor create any liability,
if the same arises as a result of force majeure, i.e., any cause or causes
beyond the control of the Parties, including, but not limited to the following,
which for the purposes of this Agreement, shall be regarded as beyond the
control of the Party in question: acts of God; acts, omissions, rules,
regulations, or
40
orders of any governmental authority or any officer, department, agency or
instrumentality thereof; flood; earthquake; acts of the public enemy; war;
rebellion; insurrection; riot; invasion; strikes, or lockouts.
20.8.2. In the event of such cause intervening, such excuse
of performance shall be only to the extent that such non-performance is beyond
the reasonable control of the Party bound by such covenant or obligation; and
the Party so affected shall use its reasonable best efforts to eliminate or cure
or overcome any of such causes and to resume performance of its covenants and
obligations with all possible speed.
20.9 Arbitration. All disputes, controversies or differences which
may arise between the Parties, out of or in relation to or in connection with
this Agreement, or the breach thereof, shall be finally settled by arbitration,
by the International Chamber of Commerce (ICC) Rules in Genf, Switzerland in the
English Language, by a panel of three (3) arbitrators in accordance with the
then current ICC Rules, provided that the arbitrators will first render a
preliminary decision setting forth their grounds for decision and providing at
least thirty (30) days for each of the Parties to respond. The Parties hereto
expressly waive any right to appeal such decision or to challenge the decision
in any court. For purposes of enforcement, the judgment arising from such
arbitration may be entered in any court of competent jurisdiction in the United
States or Germany. This clause shall not be used to prohibit the right of either
Party to seek injunctive relief in appropriate circumstances.
20.10 Export Controls. The Parties agree to abide by the United
States laws and regulations governing exports of the Product(s) or any other
technology developed or disclosed as a result of this Agreement. The Parties
acknowledge that any performance under this Agreement is subject to any
restrictions that may be imposed by the United States laws and regulations
governing exports. Each Party agrees to provide the other Party with any
assistance, including written assurances, which may be required by a competent
governmental authority and by applicable laws and regulation as a precondition
for any disclosure of technology by the other Party under the terms of this
Agreement. In addition, the Parties hereto agree to take all actions as may
reasonably be required to assure compliance with all applicable requirements of
the U.S. Foreign Corrupt Practices Act.
20.11 Construction / Jurisdiction / Official Language. This
Agreement shall be construed in accordance with the laws of Switzerland. Each
Party hereto hereby irrevocably consents and submits to the jurisdiction of the
courts of the State of Texas and of the United States of America and of Germany
for purposes of enforcing any judgment that arises from arbitration pursuant to
Section 20.9. English shall be the official language of this Agreement and any
related agreement provided for hereunder and all
41
communications between the Parties hereto shall be conducted in that language.
Each Party recognizes that the Parties grant no license, by implication or
otherwise, except for the licenses expressly set forth in this Agreement. ASTA
Medica agrees to promptly provide BioNumerik with written English translations
of all important documents that are not in English and relate to the Product(s)
or this Agreement as may be reasonably requested by BioNumerik.
21. USE OF NAMES. The Parties hereto understand that each Party may
disclose certain matters pertaining to this Agreement as required by applicable
securities laws or other applicable laws and regulations, which disclosure may
include the name of the other Party and the subject matter of this Agreement,
and be in the form of public statements, whether oral or written, including, but
not limited to, shareholder reports, communications with stock market analysts,
press releases or other communications with the media. Each Party agrees to
coordinate with the other Party press releases and other public statements
regarding this Agreement and the Parties' relationship with regard to the
Product(s). Press releases and other public disclosure involving potentially
sensitive intellectual property matters, product development or marketing
strategies, clinical trials results or other sensitive information must receive
prior written approval by both Parties, which neither Party will unreasonably
withhold. Coordinated common major press releases will be mutually agreed to by
the Alliance Steering Committee in advance of such press release at the
international level. Local market information and abstracts from the common
press releases are not subject to further approval.
22. ENTIRE AGREEMENT. This Agreement comprises the entire understanding
and Agreement of the Parties hereto with respect to the specific subject matter
of this Agreement, and supersedes all prior Agreements or understandings,
written or oral, between the Parties hereto with respect to the specific subject
matter of this Agreement. In addition, those obligations under the BioNumerik
Confidentiality Agreement and the ASTA Medica Confidentiality Agreement shall
continue in full force and effect in accordance with their terms. This Agreement
may not be amended except by a written instrument signed by the Parties hereto.
23. CAPTIONS. The captions used in this Agreement are for purposes of
clarification only and are not meant to be construed as part of this Agreement.
42
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the day and year first written above.
ASTA Medica Aktiengesellschaft BioNumerik Pharmaceuticals, Inc.
By: /s/ BERND W. AUNDRUP By: /s/ FREDERICK H. HAUSHEER, M.D.
----------------------------------- -----------------------------------
Bernd W. Aundrup Frederick H. Hausheer, M.D.
Chairman of the Executive Board Chairman & Chief Executive Officer
Date: 18 January 2001 Date: 18 January 2001
--------------------------------- ---------------------------------
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43
ATTACHMENTS TO STRATEGIC ALLIANCE AGREEMENT
ATTACHMENT A
- BioNumerik Patent Applications in the Territory
ATTACHMENT B
- BNP7787 Compounds
ATTACHMENT C
- Description and Definitions of Costs, Gross Profits, Gross Sales
44
ATTACHMENT A
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
45
Attachment B
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
46
Attachment C
Further descriptions and definitions of financial terms, regarding the Costs,
Gross Profits and Gross Sales will be agreed upon by the Alliance Steering
Committee as soon as possible and may be amended from time to time by the
written agreement of the Parties.
47
FINANCIAL DEFINITIONS
GROSS SALES shall have the meaning contained in the Strategic Alliance Agreement
and shall include total sales at invoice values, not reduced by customer
discounts, returns or allowances or other adjustments in the Territory.
MANUFACTURING COSTS are the costs of buying raw materials and producing the
final packaged Product. Estimated at this time to be [**] of Gross Sales.
Manufacturing Costs shall include a reasonable overhead amount which shall be
calculated in accordance with U.S.GAAP.
SHIPPING COSTS are the costs of packaging and shipping the Product to the
customer. Estimated at this time to [**] of Gross Sales.
PRE-MARKETING COSTS are the costs associated with marketing the Product prior to
the product launch date, including branding and market research. Estimated at
this time to be [**] DM (est. [**] Euros) in [**] and [**] DM (est. [**] Euros)
in [**].
MARKETING COSTS are the costs associated with the ongoing promotion of the
Product. Estimated at this time to be, as a percentage of Gross Sales, [**] in
[**],[**] in [**],[**] in [**],[**] in [**] through [**], and [**] for all years
after [**].
SELLING COSTS are the commissions and allocated salespersons' salaries and
overhead. Estimated at this time to be, as a percentage of Gross Sales, [**] in
[**],[**] in [**],[**] in [**] and [**] for all years after [**].
EXTERNAL RESEARCH AND DEVELOPMENT COSTS are the costs associated with the
pre-clinical and clinical development of the Product in the Territory in
accordance with the Strategic Alliance Agreement. These costs will be paid
exclusively by ASTA Medica.
REGISTRATION COSTS are the costs associated with preparing the registration
document and submitting it to the various regulatory agencies in the Territory
in accordance with the Strategic Alliance Agreement. These costs will be paid
exclusively by ASTA Medica.
ADMINISTRATIVE COSTS are the costs associated with the administrative overhead
applied to the Product based on personnel effort actually spent on the project
in the Territory in accordance with the Strategic Alliance Agreement. These
costs will be paid exclusively by ASTA Medica.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
FINANCIAL COSTS are the costs associated with the financial administrative
overhead applied to the Product, which consists of accounting and treasury costs
in the Territory in accordance with the Strategic Alliance Agreement. These
costs will be paid exclusively by ASTA Medica.
CONTRIBUTION MARGIN OR GROSS PROFITS shall consist of Gross Sales in the
Territory in accordance with the Strategic Alliance Agreement less the sum of
Manufacturing Costs, Shipping Costs, Pre-Marketing Costs, Marketing Costs and
Selling Costs.
CONTRIBUTION MARGIN SPLIT is the percentages of the Contribution Margin that
BNPI and ASTA Medica will receive for a given range of Cumulative Gross Sales.
BNPI CASH FLOW is the Contribution Margin multiplied by BNPI's Contribution
Margin Split in addition to the $15 million up-front payment. The BNPI
Contribution Margin Split is [**] for Cumulative Gross Sales up to [**],[**] for
Cumulative Gross Sales between [**] and [**], and [**] for Cumulative Gross
Sales over [**].
ASTA CASH FLOW is the Contribution Margin multiplied by ASTA Medica's
Contribution Margin Split in addition to payments by ASTA Medica of the $15
million up-front payment, External Research and Development Costs, Registration
Costs, Administrative Costs and Financial Costs. The ASTA Contribution Margin
Split is [**] for Cumulative Gross Sales up to [**], [**] for Cumulative Gross
Sales between [**] and [**] and [**] for Cumulative Gross Sales over [**].
NET PRESENT VALUE is the value of all cash inflows and cash outflows based on
jointly developed projection models. BioNumerik shall use a [**] discount rate
for such models and ASTA Medica shall use a discount rate in accordance with its
internal practices. The Alliance Steering Committee shall use a [**] discount
rate for such NPV models. ASTA Medica may use its own discount rate for such NPV
models as required.
PRODUCT CASH FLOW is Contribution Margin less External Research and Development
Costs, Registration Costs, Administrative Costs and Financial Costs.
CUMULATIVE GROSS SALES is the total aggregate Gross Sales from the date of
launch until the evaluation date.
Capitalized terms used but not defined herein shall have the same meaning
provided for such terms in the Strategic Alliance Agreement, dated January 18,
2001, between BioNumerik Pharmaceuticals, Inc. and ASTA Medica
Aktiengesellschaft (the "Strategic Alliance Agreement").
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
(BIONUMERIK LOGO)
July 14, 2004
Victor Miller
Director,
Global Business Development
Baxter Oncology
Baxter Healthcare S.A.
Baxter Healthcare Corporation
One Baxter Parkway
Deerfield, IL 60015
Dear Victor,
In connection with the Strategic Alliance Agreement (the "Alliance
Agreement") between BioNumerik Pharmaceuticals, Inc. ("BioNumerik") and Baxter
Oncology, I am writing to confirm that, so long as Baxter files a European
regulatory and marketing approval application for Tavocept(TM) within 6 months
after BioNumerik provides Baxter with BioNumerik's final clinical report and
data from the Tavocept Phase 3 clinical trial currently being conducted in the
U.S., Russia and the Ukraine in patients with metastatic breast cancer,
BioNumerik will not express an objection with respect to meeting the time
requirements of clause (b) of the third sentence of Section 8.2 of the Alliance
Agreement for Tavocept to receive Government Regulatory Approval (as defined in
the Alliance Agreement) in at least one country in Europe.
Sincerely,
Frederick H. Hausheer, M.D., F.A.C.P
Chairman and Chief Executive Officer
cc: Dr. Joy Anderson
8122 Datapoint Drive, Suite 1250 o San Antonio, TX 78229
TEL: 210-614-1701 o FAX: 210-614-9439
Exhibit 10.2
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
JOINT VENTURE AGREEMENT
AMONG
GRELAN PHARMACEUTICAL CO., LTD.
AND
BIONUMERIK PHARMACEUTICALS, INC.
AUGUST 30, 2000
TABLE OF CONTENTS
Recitals.................................................................... 1
1. Definitions............................................................. 2
1.1 BNP7787 Products.................................................. 2
1.2 Karenitecin Products.............................................. 2
1.3 Mercedes Products................................................. 2
1.4 PDE4 Products..................................................... 2
1.5 COX-2 Products.................................................... 3
1.6 Venture Products BN............................................... 3
1.7 Venture Products GR............................................... 3
1.8 Venture Products.................................................. 3
1.9 BioNumerik Improvements........................................... 3
1.10 Grelan Improvements............................................... 3
1.11 Improvements...................................................... 3
1.12 BioNumerik Patent Rights.......................................... 4
1.13 Grelan Patent Rights.............................................. 4
1.14 Patent Rights..................................................... 4
1.15 Patents........................................................... 4
1.16 Know-How.......................................................... 4
1.17 Affiliate(s)...................................................... 4
1.18 Confidential Information.......................................... 5
1.19 Effective Date.................................................... 5
1.20 Government Regulatory Approvals................................... 5
1.21 IND Submission.................................................... 5
1.22 New Drug Application Approval or NDA Approval..................... 5
1.23 Steering Committee................................................ 5
1.24 Stock Purchase Agreement.......................................... 6
1.25 Sublicensee....................................................... 6
1.26 Territory......................................................... 6
1.27 Trademarks........................................................ 6
2. LICENSE GRANTS BY BIONUMERIK............................................ 6
2.1 Research and Development Grant.................................... 6
2.2 Grant to Market, Sell and Distribute.............................. 6
3. LICENSE GRANTS AND TRANSFER BY GRELAN................................... 7
3.1 Research and Development Grant.................................... 7
3.2 Grant to Market, Sell and Distribute.............................. 7
3.3 Transfer Regarding Rights Under Existing BNP7787 Agreement........ 7
4. SUBLICENSES AND OTHER DISTRIBUTION METHODS FOR VENTURE PRODUCTS......... 8
4.1 Distribution Methods and Branch Office............................ 8
4.2 Identification of Sublicensees.................................... 8
4.3 Right to Grant Sublicenses........................................ 8
4.4 Division of Sublicensing Fees and Other Payments.................. 9
4.5 Third Party Offers or Statements of Interest...................... 9
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5. RIGHTS OF FIRST REFUSAL FOR VENTURE PRODUCTS BN AND DEVELOPMENT RIGHTS.. 9
5.1 Right of First Refusal............................................ 9
5.2 Development Rights................................................ 10
5.3 Development Outside Territory..................................... 10
6. INFORMATION SHARING AND DEVELOPMENT COSTS............................... 11
6.1 Pre-Clinical Studies.............................................. 11
6.2 Government Approvals and Clinical Trials.......................... 11
6.3 Copies and Provision of Information............................... 13
6.4 Supplies of Product for Pre-Clinical Studies and Clinical Trials.. 14
6.5 Provision of Know-How............................................. 14
7. MANUFACTURING RIGHTS FOR VENTURE PRODUCTS AND
PURCHASE OF APPROVED PRODUCTS BY THE VENTURE............................ 15
7.1 Manufacturing Rights for Venture Products BN ..................... 15
7.2 Manufacturing Rights for Venture Products GR ..................... 16
7.3 Distribution and Sale of Venture Products ........................ 17
7.4 Commercial Supply Arrangements ................................... 18
7.5 Product Labeling ................................................. 18
8. STEERING COMMITTEE ..................................................... 18
8.1 Formation and Composition......................................... 18
8.2 Duties............................................................ 19
8.3 Meetings.......................................................... 19
8.4 Recommendation Regarding Management............................... 19
8.5 Identification of Consultants..................................... 19
9. DEVELOPMENT AND COMMERCIALIZATION PLAN.................................. 19
9.1 General Diligence Efforts......................................... 19
9.2 Target Development and Commercialization Plan..................... 19
10. PATENT MATTERS.......................................................... 20
10.1 BioNumerik Patent Maintenance .................................... 20
10.2 Grelan Patent Maintenance and Assistance ......................... 20
10.3 No Present Notification of Infringement- BioNumerik .............. 21
10.4 No Present Notification of Infringement- Grelan .................. 21
10.5 Enforcement of Patents and Proprietary Rights .................... 21
11. IMPROVEMENTS............................................................ 22
11.1 BioNumerik Improvements Included.................................. 22
11.2 Grelan Improvements Included...................................... 23
11.3 Joint Improvements................................................ 23
11.4 Sublicense of Improvements........................................ 23
12. TRADEMARKS AND TRADEMARK RIGHT.......................................... 24
12.1 .................................................................. 24
12.2 .................................................................. 24
12.3 .................................................................. 24
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13. CONFIDENTIALITY......................................................... 24
13.1 Confidential and Proprietary Information.......................... 24
13.2 Matters Not Included as Confidential Information.................. 25
13.3 Survival of Confidentiality....................................... 26
14. PROVISION FOR VENTURE FUNDING........................................... 26
15. ACCOUNTING.............................................................. 26
16. USE OF NAMES............................................................ 27
17. INDEMNIFICATION......................................................... 28
17.1 BioNumerik Indemnification........................................ 28
17.2 Grelan Indemnification............................................ 28
17.3 KI Pharma Indemnification ........................................ 28
18. DURATION AND TERMINATION OF AGREEMENT................................... 29
18.1 Duration.......................................................... 29
18.2 Termination....................................................... 29
18.3 Effect of Expiration or Termination............................... 30
19. BIONUMERIK REPRESENTATIONS & WARRANTIES................................. 32
19.1 Due Organization and Authority.................................... 32
19.2 Safety of Product(s).............................................. 32
19.3 No Pending Action Against BioNumerik.............................. 32
20. Grelan Representations and Warranties................................... 33
20.1 Due Organization and Authority.................................... 33
20.2 Safety of Product(s).............................................. 33
20.3 No Pending Action Against Grelan.................................. 33
21. ASSIGNMENTS............................................................. 33
21.1 Assignment Restrictions........................................... 33
21.2 Sale of Business.................................................. 34
21.3 Assignment to Affiliates.......................................... 33
22. MISCELLANEOUS........................................................... 34
22.1 Regulatory Communications......................................... 34
22.2 Adverse Events.................................................... 35
22.3 Liability Insurance............................................... 35
22.4 Litigation........................................................ 35
22.5 Auditors.......................................................... 35
22.6 Marketing Analysis and Reports.................................... 35
22.7 Notice / Reports.................................................. 36
22.8 Severability...................................................... 36
22.9 Counterparts...................................................... 36
22.10 Warranty Disclaimer............................................... 37
22.11 Force Majeure..................................................... 37
22.12 Arbitration....................................................... 37
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iii
22.13 Export Controls................................................... 38
22.14 Construction / Jurisdiction / Official Language................... 38
23. ENTIRE AGREEMENT........................................................ 38
24. CAPTIONS................................................................ 39
SIGNATURES.................................................................. 39
ATTACHMENT A-1.............................................................. 41
ATTACHMENT A-2.............................................................. 42
ATTACHMENT A-3.............................................................. 43
ATTACHMENT A-4.............................................................. 44
ATTACHMENT A-5.............................................................. 45
ATTACHMENT B-1.............................................................. 46
ATTACHMENT B-2.............................................................. 47
ATTACHMENT C ............................................................... 48
ATTACHMENT D................................................................ 50
ATTACHMENT E................................................................ 52
ATTACHMENT F................................................................ 54
ATTACHMENT G................................................................ 72
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iv
AGREEMENT
THIS JOINT VENTURE AGREEMENT ("Agreement") is made and entered into
effective as of August 30, 2000, by and between BIONUMERIK PHARMACEUTICALS,
INC., a Texas corporation, with its office located at 8122 Datapoint Drive,
Suite 1250, San Antonio, Texas 78229, U.S.A. (hereinafter referred to as
"BIONUMERIK") and GRELAN PHARMACEUTICAL CO., LTD., a Japanese corporation having
its place of business at Ogura Bldg. 5F, Nihonbashi Kobunacho 6-6, Chuo-ku,
Tokyo 103-0024, Japan (hereinafter referred to as "GRELAN").
R E C I T A L S:
WHEREAS, GRELAN and BIONUMERIK intend to create a Delaware limited
liability company to be called KI Pharmaceuticals, L.L.C. (hereinafter referred
to as "KI PHARMA" or the "Venture") for the purpose of developing, marketing,
distributing, manufacturing and selling certain specified products in the
territory of Japan.
WHEREAS, as described in the organization documents of KI PHARMA, KI
PHARMA will be owned 50% by BIONUMERIK, 49% by GRELAN, and 1% by Dr. Hashime
Kanazawa.
WHEREAS, additional information describing the ownership, management,
officers, allocation of profits, and other allocations and distributions
regarding KI PHARMA will be contained in an Operating Agreement of KI PHARMA
(the "Operating Agreement"), the terms of which will be agreed to by BIONUMERIK
and GRELAN.
WHEREAS, GRELAN and BIONUMERIK are parties to a collaboration agreement
dated as of May 28, 1996 and amended as of June 8, 1999 regarding the BNP7787
Products (as defined below) and related technology (the "Existing Agreement")
and the parties wish that GRELAN transfer certain rights it has thereunder to KI
PHARMA, without prejudice to any and all rights GRELAN or BIONUMERIK may retain,
and thereafter the Existing Agreement is immediately terminated, as described in
detail in Section 3.3 below.
WHEREAS, following creation of KI PHARMA and signing of the Operating
Agreement, KI PHARMA will agree to be bound by the terms of this Agreement.
WHEREAS, the parties wish to enter into this Agreement to evidence the
license and transfer of certain rights to KI PHARMA and to specify certain
commitments, rights and obligations of the parties in connection with the
Venture.
WHEREAS, the licenses and other rights granted by GRELAN and BIONUMERIK
herein are granted subject to the obligations to make payments and take other
actions provided by the parties herein.
NOW, THEREFORE, in consideration of the terms, conditions and agreements
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. When used in this Agreement, each of the following defined
terms shall have the meanings set forth in this Section. There are other terms
defined in this Agreement parenthetically, and such terms shall have the
meanings apparent from the context in which such terms are parenthetically
defined.
1.1 "BNP7787 Products" means the compounds, pharmaceutical
formulations, and technology described in Attachment A-1 hereto.
1.2 "Karenitecin Products" means the compounds, pharmaceutical
formulations, and technology described in Attachment A-2 hereto.
1.3 "Mercedes Products" means the pharmaceutical formulations and
related technology described in Attachment A-3 hereto.
1.4 "PDE4 Products" means the compounds, pharmaceutical
formulations, and technology described in Attachment A-4 hereto.
2
1.5 "COX-2 Products" means the compounds, pharmaceutical
formulations, and technology described in Attachment A-5 hereto.
1.6 "Venture Products BN" means the BNP7787 Products, the
Karenitecin Products, the Mercedes Products, and such other new technologies
and/or products that, in the sole discretion of BIONUMERIK, may be licensed to
KI PHARMA in the Territory.
1.7 "Venture Products GR" means the PDE4 Products, the COX-2
Products, and such other new technologies and/or products that, in the sole
discretion of GRELAN, may be licensed to KI PHARMA in the Territory.
1.8 "Venture Products" means the Venture Products BN and the Venture
Products GR.
1.9 "BioNumerik Improvements" means any and all inventions,
developments, discoveries and improvements directly relating to Venture
Products, including, without limitation, formulae, specifications, designs,
chemical and physical data, clinical data, and information concerning synthesis,
processes, formulations, applications, toxicity, operations, regulatory affairs
and marketing, that are developed by or for BIONUMERIK subsequent to the date of
this Agreement and during the term of this Agreement, subject in all cases to
any restrictions that may exist on the ability of BIONUMERIK to license such
inventions, developments, discoveries or improvements to KI PHARMA and/or
GRELAN, as applicable, in or outside the Territory.
1.10 "Grelan Improvements" means any and all inventions,
developments, discoveries, and improvements directly relating to Venture
Products, including, without limitation, formulae, specifications, designs,
chemical and physical data, clinical data, and information concerning synthesis,
processes, formulations, applications, toxicity, operations, regulatory affairs
and marketing, that are developed by or for GRELAN subsequent to the date of
this Agreement and during the term of this Agreement, subject in all cases to
any restrictions that may exist on the ability of GRELAN to license such
inventions, developments, discoveries or improvements to KI PHARMA and/or
BIONUMERIK, as applicable, in or outside the Territory.
1.11 "Improvements" means the BioNumerik Improvements and the
Grelan Improvements.
3
1.12 "BioNumerik Patent Rights" means those exclusive rights granted
in Japan to BIONUMERIK, that follow from any of the patent applications referred
to in Attachment B-1 hereto or from any reissue, reexamination, continuation,
divisional, continuation-in-part, utility model, or any other patent application
in Japan of BIONUMERIK whose claimed subject matter covers any of the Venture
Products BN, processes to make any of the Venture Products BN, or their use.
BIONUMERIK's current patent applications in Japan relating to the Venture
Products BN and their uses are identified in Attachment B-1 hereto.
1.13 "Grelan Patent Rights" means those exclusive rights granted in
Japan to GRELAN, that follow from any of the patent applications referred to in
Attachment B-2 hereto or from any reissue, reexamination, continuation,
divisional, continuation-in-part, utility model, or any other patent application
in Japan of GRELAN whose claimed subject matter covers any of the Venture
Products GR, processes to make any of the Venture Products GR, or their use.
GRELAN's current patent applications in Japan relating to the Venture Products
GR and their uses are identified in Attachment B-2 hereto.
1.14 "Patent Rights" means the BioNumerik Patent Rights and the
Grelan Patent Rights.
1.15 "Patents" means those patents embodying the Patent Rights in
the Territory.
1.16 "Know-How" means all data and information owned by BIONUMERIK
and/or GRELAN, as the case may be, and directly relating to the Venture
Products, including, without limitation, formulae, specifications, designs,
chemical and physical data, clinical data, information concerning synthesis,
processes, formulations, applications, administration to patients, clinical
protocols, toxicity, operations, regulatory affairs and marketing, that have
been developed by or for BIONUMERIK and/or GRELAN, as the case may be, on or
before the date of this Agreement and which is useful in the development,
manufacture or sale of the Venture Product(s) in the Territory, subject in all
cases to any restrictions that may exist on the ability of BIONUMERIK and
GRELAN, as applicable, to license such Know-How to KI PHARMA, BIONUMERIK and/or
GRELAN, as applicable, in or outside the Territory.
1.17 "Affiliates " means, with respect to each party, any
organization, company, firm, or other entity which controls, is controlled by,
or is under common control with said party. A company shall be deemed to have
control of another if it owns directly or indirectly a majority of the voting
shares of or is entitled directly or indirectly to appoint a majority of the
directors of the other company.
4
1.18 "Confidential Information" means all information which is of a
confidential and proprietary nature, including without limitation, trade
secrets, inventions and unpatented Know-How and Improvements and related
technology, and any and all material information which any of the parties hereto
may acquire concerning the financial, business and marketing goals and plans of
the other parties, including the terms of this Agreement.
1.19 "Effective Date" means the first date after which all of the
following have occurred: (a) KI PHARMA has been formed, (b) the Operating
Agreement has been signed by GRELAN, BIONUMERIK and Dr. Hashime Kanazawa, (c)
the Stock Purchase Agreement (hereinafter defined) has been signed by GRELAN and
BIONUMERIK and GRELAN has purchased BIONUMERIK preferred stock in accordance
with the terms of the Stock Purchase Agreement, and (d) KI PHARMA has agreed to
be bound as an additional party to this Agreement.
1.20 "Government Regulatory Approvals" means all government
approvals, health registrations and/or permits, including NDA Approvals,
required for import into or manufacture in the Territory and sale and
distribution in the Territory of Venture Products.
1.21 "IND Submission" with respect to a Venture Product means
submission of an Investigational New Drug regulatory application ("Chiken
Todoke" corresponding to an IND application in the U.S.) to authorities for
approval to initiate any new phase of human trials of the product in a
jurisdiction in the Territory.
1.22 "New Drug Application Approval" or "NDA Approval" means
approval from the Japanese Ministry of Health and Welfare or other applicable
regulatory body, as the case may be, of a New Drug Application which authorizes
or allows the import to or manufacture in the Territory of and sale in the
Territory of a Venture Product.
1.23 "Steering Committee" means the Steering Committee of KI PHARMA,
as such committee is further described in Section 8 hereof.
5
1.24 "Stock Purchase Agreement" means that certain Stock Purchase
Agreement to be entered into by GRELAN and BIONUMERIK providing for the purchase
by GRELAN of U.S. $4 million of BioNumerik Series G Preferred Stock.
1.25 "Sublicensee" means an entity to whom KI PHARMA has granted
pursuant to Section 4.3 or 5.1 a sublicense to develop, market, sell, distribute
or otherwise commercially dispose of Venture Products within the Territory,
based on KI PHARMA's exclusive license set forth in Sections 2.2 and 3.2 and its
rights transferred by GRELAN under Section 3.3.
1.26 "Territory" means Japan and any of its possessions or
territories.
1.27 "Trademarks" means (i) the brand name(s) selected by KI PHARMA,
with the approval of BIONUMERIK and GRELAN, for Venture Products in the
Territory, and (ii) all Katakana or Hiragana transliterations of the names
referenced above, and all equivalents thereof, for use with Venture Products.
2. LICENSE GRANTS BY BIONUMERIK.
2.1 Research and Development Grant. Effective as of the Effective
Date, BIONUMERIK hereby grants to KI PHARMA and GRELAN an exclusive license
under the BioNumerik Patent Rights, Know-How and BioNumerik Improvements to
conduct and have conducted research and development of the Venture Products BN
in the Territory for the purpose of obtaining Government Regulatory Approvals in
the Territory.
2.2 Grant to Market, Sell and Distribute. Effective as of the
Effective Date, BIONUMERIK hereby grants to KI PHARMA an exclusive license under
the BioNumerik Patent Rights, Know-How, BioNumerik Improvements and Trademarks
to import Venture Products BN into the Territory and/or market, sell, distribute
or otherwise commercially dispose of Venture Products BN in the Territory during
the term of this Agreement. Except as otherwise provided in this Agreement, (a)
BIONUMERIK shall not, without prior written consent from GRELAN, directly or
indirectly, except through KI PHARMA, import Venture Products BN into the
Territory nor distribute or sell Venture Products BN in the Territory, and (b)
KI PHARMA and GRELAN without prior written consent from BIONUMERIK shall not
directly or
6
indirectly manufacture Venture Products BN in the Territory or develop,
manufacture, promote, distribute or sell Venture Products BN outside the
Territory or export Venture Products BN from the Territory.
3. LICENSE GRANTS AND TRANSFER BY GRELAN.
3.1 Research and Development Grant. Effective as of the Effective
Date, GRELAN hereby grants to KI PHARMA an exclusive license under the Grelan
Patent Rights, Know-How and Grelan Improvements to conduct and have conducted
research and development of the Venture Products GR in the Territory for the
purpose of obtaining Government Regulatory Approvals in the Territory.
3.2 Grant to Market, Sell and Distribute. Effective as of the
Effective Date, GRELAN hereby grants to KI PHARMA an exclusive license under the
Grelan Patent Rights, Know-How, Grelan Improvements and Trademarks to market,
sell, distribute or otherwise commercially dispose of Venture Products GR in the
Territory during the term of this Agreement. Except as otherwise provided in
this Agreement, (a) GRELAN shall not directly or indirectly, except through KI
PHARMA, distribute or sell Venture Products GR in the Territory, and (b) KI
PHARMA and BIONUMERIK shall not directly or indirectly develop or manufacture
Venture Products GR in the Territory, import Venture Products GR into the
Territory or develop, manufacture, promote, distribute or sell Venture Products
GR outside the Territory or export Venture Products GR from the Territory.
3.3 Transfer Regarding Rights Under Existing BNP7787 Agreement.
Effective as of the Effective Date, GRELAN hereby transfers to KI PHARMA all
rights with respect to the import, marketing, sale, distribution or disposal of
the BNP7787 Products under the Existing Agreement. Following the Effective Date,
all other rights and obligations under such Existing Agreement shall terminate,
provided that (i) BIONUMERIK shall have no obligation to repay any amounts
previously paid by GRELAN under such Existing Agreement, (ii) BIONUMERIK shall
continue after the Effective Date to have the right to use all data and results
obtained from the pre-clinical and non-clinical studies and clinical trials
obtained by GRELAN under the Existing Agreement up to the execution of this
Agreement, and (iii) the confidentiality obligations of GRELAN and BIONUMERIK
contained in the Existing Agreement shall remain and continue in full force and
effect in accordance with their terms. In addition, GRELAN shall have the right
to negotiate in the future with KI PHARMA to obtain an exclusive sublicense to
market, sell, promote and distribute (a) the BNP7787 Products in the Territory,
and (b) the PDE4 Products and the COX-2 Products in the Territory and GRELAN
shall retain the exclusive right to develop (i) the BNP7787
7
Products in the Territory and (ii) the PDE4 Products and the COX-2 Products in
the Territory, subject in all cases to GRELAN's performance of product
development in the Territory and the approval rights contained in Section 4.3
hereof (including BIONUMERIK's right to approve the terms of any sublicense by
KI PHARMA to GRELAN of the right to market, sell, promote, distribute or
otherwise commercially dispose of the BNP7787 Products in the Territory).
4. SUBLICENSES AND OTHER DISTRIBUTION METHODS FOR VENTURE PRODUCTS.
4.1 Distribution Methods and Branch Office. The method in which KI
PHARMA will market, sell, distribute or otherwise commercially dispose of
Venture Products in the Territory is described in Section 7.3 hereof. If KI
PHARMA establishes or otherwise owns an Affiliate in the Territory, such
Affiliate may become a Sublicensee, subject to the prior written consent of the
parties hereto. A Japanese branch office or other office of KI PHARMA will be
established as quickly as possible after the Effective Date, in the premises of
GRELAN in Nihonbashi, Chuo-ku, Tokyo, Japan.
4.2 Identification of Sublicensees. Dr. Hashime Kanazawa (or another
designated qualified senior management employee of GRELAN), at the request of
the Steering Committee, will have the responsibility to identify and present to
KI PHARMA potential third parties to sublicense certain Venture Products for the
Territory.
4.3 Right to Grant Sublicenses. KI PHARMA shall have the right to
grant sublicenses to market, sell, distribute or otherwise commercially dispose
of Venture Products within the Territory subject to the following conditions:
(i) the parties hereto shall discuss in good faith with respect to the timing of
a formal request and authorization to pursue any potential sublicense by KI
PHARMA with respect to Venture Products but BIONUMERIK shall have the right to
decide such timing with respect to Venture Products BN, and GRELAN shall have
the right to decide such timing with respect to Venture Products GR; (ii) in
addition, (a) BIONUMERIK will have the final right and authority to accept or
refuse any potential Sublicensee for Venture Products BN in the Territory, and
(b) GRELAN will have the final right and authority to accept or refuse any
potential Sublicensee for Venture Products GR in the Territory; provided that if
GRELAN is the potential Sublicensee for a particular Venture Product GR, then
the
8
Steering Committee shall have the final right and authority to accept or refuse
such sublicense, and provided further that BIONUMERIK and GRELAN shall not
refuse such Sublicensees unreasonably.
4.4 Division of Sublicensing Fees and Other Payments. In
consideration for the valuable nature of the Patent Rights, Know-How and
Improvements and the access to potential new partners they will give to KI
PHARMA, (i) in the event a sublicense fee or other up-front or milestone payment
amount due on or before the relevant NDA Approval (collectively, the "Up-front
Payment") is paid by any Sublicensee or other third party for distribution,
marketing and/or sales rights to a Venture Product BN in the Territory, then
BIONUMERIK will be paid [**] of such payment and GRELAN will be paid [**] of
such payment, and (ii) in the event the Up-front Payment is paid by any
Sublicensee or other third party for distribution, marketing and/or sales rights
to a Venture Product GR in the Territory, then GRELAN will be paid [**] of such
payment and BIONUMERIK will be paid [**] of such payment. All royalty payments
due after the relevant NDA Approval (the "Royalties") and any additional amounts
received from any Sublicensee or other third party in connection with a Venture
Product being sold by or for the benefit of KI PHARMA to a Japanese wholesaler,
distributor, hospital, or pharmacy, after payment of the manufacturing price,
Royalties, and Up-front Payments, shall be paid [**] to GRELAN and [**] to
BIONUMERIK.
4.5 Third Party Offers or Statements of Interest. If a third party
makes a statement of interest or offer to sublicense a Venture Product in the
Territory to any of the parties hereto, then the notified party shall notify the
other parties hereto with respect to the indication of interest or offer and
shall provide the other parties hereto with copies of any correspondence and a
summary of any meeting regarding such matter.
5. RIGHTS OF FIRST REFUSAL FOR VENTURE PRODUCTS BN AND DEVELOPMENT RIGHTS.
5.1 Right of First Refusal. Subject to the conditions contained in
Section 4.3, effective as of the Effective Date GRELAN is hereby granted by KI
PHARMA a right of first refusal to negotiate to obtain a license for itself for
any Venture Products BN that KI PHARMA proposes to license to third parties. The
first refusal right granted herein with respect to each particular product will
expire forty- five (45) days after GRELAN's receipt of a written notice from KI
PHARMA identifying such Venture Product BN proposed to be licensed to a third
party. If no proposal to obtain a license for such product is made to KI PHARMA
by GRELAN within such time period, GRELAN's right of first refusal shall
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
9
terminate with respect to such product. In the event GRELAN does make a proposal
for the product within such time period, then KI PHARMA, GRELAN, and BIONUMERIK
will negotiate in good faith during the remainder of such 45 day notice period
and for an additional 90 day period (the "Negotiation Period") in an effort to
enter into a license agreement for such product on mutually agreeable terms. If
a license has not been executed by the end of the Negotiation Period, then (i)
the negotiations shall be deemed deadlocked and KI PHARMA shall, upon the
request of BIONUMERIK, use best efforts to seek another potential licensee with
respect to such product, and (ii) KI PHARMA shall be free to enter into such
third party license, provided the terms of such license are no more favorable to
such third party licensee than the terms last proposed to GRELAN.
5.2 Development Rights. Effective as of the Effective Date, KI
PHARMA shall have the right, with the right to sublicense, to develop all
Venture Products in the Territory in accordance with the terms of this Agreement
and with the assistance of GRELAN as provided herein. Unless otherwise agreed by
the parties, BIONUMERIK will have the right to develop all Venture Products BN
outside of the Territory and GRELAN will have the right to develop all Venture
Products GR outside of the Territory. BIONUMERIK shall be solely responsible for
its licensing or development activities concerning Venture Products BN outside
the Territory.
5.3 Development Outside Territory. Upon future mutual written
agreement by BIONUMERIK and GRELAN and if such rights are then available, KI
PHARMA may market, sell and distribute certain specified Venture Products in
other parts of Asia in addition to Japan. Notwithstanding the foregoing, GRELAN
shall remain free to license the rights to Venture Products GR outside of the
Territory in its sole discretion without the consent or approval of KI PHARMA or
BIONUMERIK; and BIONUMERIK shall remain free to license the rights to Venture
Products BN outside the Territory in its sole discretion without the consent or
approval of KI PHARMA or GRELAN. In addition to the foregoing, nothing in this
Agreement shall impact or restrict (a) the ability of GRELAN to develop, market,
sell, distribute, license, or otherwise commercially dispose of Venture Products
GR outside of the Territory in its sole discretion without the consent or
approval of KI PHARMA or BIONUMERIK, or (b) the ability of BIONUMERIK to
develop, market, sell, distribute, license, or otherwise commercially dispose of
Venture Products BN outside of the Territory in its sole discretion without the
consent or approval of KI PHARMA or GRELAN.
10
6. INFORMATION SHARING AND DEVELOPMENT COSTS.
6.1 Pre-Clinical Studies. GRELAN agrees at its sole expense to
sponsor and conduct (or have sponsored and conducted) all necessary additional
pre-clinical and non-clinical studies and tests required by the Japanese
Ministry of Health and Welfare (the "MHW") or other local regulatory agency in
the Territory in connection with commencing and conducting human clinical trials
with respect to the Venture Products in the Territory and with respect to the
manufacture (or importation into the Territory), sale and distribution of
Venture Products in the Territory. BIONUMERIK will provide free of charge to KI
PHARMA and GRELAN all pre-clinical data, clinical research protocols, and
clinical trials data and information previously or hereafter developed by
BIONUMERIK that were used and/or are necessary to support United States Food and
Drug Administration ("FDA") regulatory submissions to support regulatory
applications for the Venture Products BN in the Territory. GRELAN will provide
free of charge to KI PHARMA and BIONUMERIK all pre-clinical data, clinical
research protocols, and clinical trials data and information previously or
hereafter developed by GRELAN that are necessary to support regulatory
submissions to support regulatory applications for the Venture Products GR in
the Territory.
6.2 Government Approvals and Clinical Trials.
6.2.1. GRELAN agrees to (a) conduct or cause to be conducted
all clinical trials and other studies of any nature of the Venture Products
necessary or desirable for efficiently obtaining Government Regulatory Approvals
in the Territory and (b) prepare and submit all documents necessary or desirable
for obtaining Government Regulatory Approvals in the Territory. GRELAN shall be
solely responsible for paying the costs of such clinical development and
regulatory approvals described in the previous sentence and GRELAN shall
reimburse KI PHARMA for all costs of any such clinical development and
regulatory approvals paid by KI PHARMA. If permitted by laws in the Territory,
the Government Regulatory Approvals for Venture Products shall be obtained in
the name of KI PHARMA, and GRELAN shall provide such additional assistance as
may be necessary to assure that such Approvals are obtained in the name of KI
PHARMA. Such assistance shall include, without limitation, acting as an agent of
KI PHARMA where necessary to facilitate the regulatory process. If the
Government Regulatory Approvals are not permitted to be obtained by KI PHARMA in
the name of KI PHARMA, then, with the consent of GRELAN and BIONUMERIK (which
consent will not be unreasonably withheld) such approvals will be obtained in
the name of GRELAN. To the extent permitted by laws in the Territory,
11
BIONUMERIK agrees to assist and support the process of obtaining the Government
Regulatory Approvals by providing input and assistance from Dr. Frederick H.
Hausheer regarding the design and conduct of preclinical experiments, clinical
protocols and trials, preparation of regulatory submissions and review, analysis
and presentation of laboratory and other non-clinical data. BIONUMERIK shall
have the right to review all draft and final clinical protocols prior to
initiation of any clinical trial in the Territory for Venture Products BN.
6.2.2. GRELAN shall provide BIONUMERIK and KI PHARMA with
copies of all data and developments which arise from research and development
carried out on the Venture Products pursuant to Sections 6.1 and 6.2.1. KI
PHARMA shall have ownership (including reservation of the right to use in the
Territory in accordance with this Agreement) of all data and results obtained by
GRELAN or KI PHARMA from the pre-clinical and non-clinical studies and clinical
trials pursuant to Sections 6.1 and 6.2.1 (the "Data and Results"). Unless
otherwise agreed by the parties hereto, without any further payment, BIONUMERIK
is granted the non-exclusive right, with the right to sublicense, to use the
Data and Results related to Venture Products BN outside the Territory for the
purpose of supporting pre-clinical studies, clinical trials and product
regulatory approval and development in areas outside the Territory. Unless
otherwise agreed by the parties hereto, without any further payment, GRELAN is
granted the non-exclusive right, with the right to sublicense, to use the Data
and Results related to Venture Products GR outside the Territory for the purpose
of supporting pre-clinical studies, clinical trials and product regulatory
approval and development in areas outside the Territory. In addition, without
any further payment, KI PHARMA and GRELAN may use the Data and Results to
support the development, sale and distribution of Venture Products in the
Territory (and in other parts of Asia subject to Section 5.3) in accordance with
this Agreement during the term of this Agreement.
6.2.3. BIONUMERIK shall comply with applicable Japanese
Pharmaceutical Law and any other applicable governmental requirements in the
Territory regarding manufacture in and import into the Territory and development
and marketing in the Territory of the Venture Products, with relation to actions
by BIONUMERIK.
12
6.3 Copies and Provision of Information.
6.3.1. KI PHARMA and GRELAN will keep BIONUMERIK regularly and
fully informed of the preclinical and clinical process regarding the Venture
Products. KI PHARMA and GRELAN also shall keep BIONUMERIK regularly and fully
informed of the status of the Government Regulatory Approvals process on a
current basis and furnish BIONUMERIK, upon BIONUMERIK's reasonable request, with
English version copies of all important documents, data and other information
supplied to or received from the Japanese Government or other approval authority
in connection with the applications for the Government Regulatory Approvals.
Upon receipt of each Government Regulatory Approval, KI PHARMA and GRELAN shall
promptly furnish BIONUMERIK English version copies or other satisfactory
evidence thereof.
6.3.2. BIONUMERIK shall provide KI PHARMA and GRELAN with
copies of all information generated or controlled by it in the course of
satisfying regulatory requirements in the United States and/or Europe related to
any Venture Products BN that may be useful or necessary in obtaining Government
Regulatory Approvals in the Territory, such as IND applications, annual reports,
protocol amendments, IND amendments, and related documents ("IND and Related
Information"). If BIONUMERIK grants a license for commercial distribution of any
Venture Products BN in areas outside the Territory, BIONUMERIK agrees to use its
best efforts to provide in any agreement hereinafter signed with respect to such
license that the licensee under such license shall provide KI PHARMA and GRELAN
with all data and information generated by such licensee with respect to such
products for supporting the development of such products in the Territory.
GRELAN shall provide KI PHARMA and BIONUMERIK with copies of all information
generated or controlled by it in the course of satisfying regulatory
requirements in the United States and/or Europe related to Venture Products GR
that may be useful or necessary in obtaining Governmental Regulatory Approvals
in the Territory, such as IND and Related Information. If GRELAN grants a
license for commercial distribution of any Venture Products GR in areas outside
the Territory, GRELAN agrees to use its best efforts to provide in any agreement
hereinafter signed with respect to such license that the licensee under such
license shall provide KI PHARMA and BIONUMERIK with all data and information
generated by such licensee with respect to such products for supporting the
development of such products in the Territory. In the event a prospective
licensee for the commercial distribution of Venture Products in areas outside
the Territory will not agree to the sharing of all data and information as
provided above, each of BIONUMERIK and GRELAN will consult with KI PHARMA prior
to signing any license agreement with such party and each of BIONUMERIK and
13
GRELAN will use its best efforts to facilitate and provide an opportunity for
discussion among GRELAN, BIONUMERIK and such prospective licensee with respect
to a mutually satisfactory arrangement for the sharing of data and information.
For purposes of this provision, "best efforts" shall mean those reasonable
commercial efforts that would be used by reasonable business persons in a
similar situation.
6.3.3 GRELAN and KI PHARMA will provide BIONUMERIK with
marketing, pricing, patent, product and distribution information regarding the
Venture Products and any potentially competitive products in the Territory,
except to the extent restricted by law, other licenses or similar agreements to
which GRELAN is a party. BIONUMERIK and KI PHARMA will provide GRELAN with
marketing, pricing, patent, product and distribution information regarding the
Venture Products and any potentially competitive products outside the Territory,
except to the extent restricted by law, other licenses or similar agreements to
which BIONUMERIK is a party.
6.4 Supplies of Product for Pre-Clinical Studies and Clinical
Trials. If requested by KI PHARMA and/or GRELAN, all supplies of Venture
Products BN required by GRELAN and/or KI PHARMA in order to conduct the studies
described in Sections 6.1 and 6.2 shall be furnished by BIONUMERIK to GRELAN
and/or KI PHARMA at a price equal to BIONUMERIK's actual cost to purchase or
manufacture the materials (including a reasonable overhead amount), plus
freight, transport, insurance, and customs, and duty charges incurred in
delivering the materials to GRELAN (and/or KI PHARMA's office in Japan), but
shall exclude any profit element. In accordance with Sections 6.1 and
6.2, GRELAN shall be responsible for paying all such costs described in this
Section 6.4.
6.5 Provision of Know-How. As soon as practicable after the
Effective Date, and on a regular basis thereafter during the term of this
Agreement, each of BIONUMERIK and GRELAN will, subject to the confidentiality
and other limitations contained herein, provide its Know-How and will thereafter
provide its Improvements to KI PHARMA (and GRELAN as well in the case where
BIONUMERIK will provide such Know-How and Improvements) for the purpose of
enabling GRELAN and KI PHARMA to conduct the studies described in Sections 6.1
and 6.2, and otherwise to support Government Regulatory Approvals and the
marketing of Venture Products in the Territory in accordance with the terms of
this Agreement.
14
7. MANUFACTURING RIGHTS FOR VENTURE PRODUCTS AND PURCHASE OF
APPROVED PRODUCTS BY THE VENTURE.
7.1 Manufacturing Rights for Venture Products BN.
7.1.1 BIONUMERIK will retain all manufacturing rights for
Venture Products BN. Any other terms and conditions regarding the sale or
provision of Venture Products BN by BIONUMERIK to KI PHARMA or a designated
third party will be separately agreed by the parties hereto after taking into
account the scenarios and illustrations contained on Attachment C hereto and the
other factors and considerations described in this Section. BIONUMERIK has the
right to manufacture Venture Products BN directly or to establish a contract
with a third party manufacturer to supply KI PHARMA or the designated third
party licensee for product distribution in the Territory. GRELAN shall help
BIONUMERIK to identify and recommend key qualified GMP manufacturers) in the
Territory who would be appropriate as such manufacturer. Upon receiving the
appropriate Government Regulatory Approvals for any Venture Products BN, KI
PHARMA (or if agreed to by the parties hereto, a KI PHARMA subsidiary or
affiliate or a designated third party) will directly purchase Venture Products
BN from BIONUMERIK at a specified sales price (the "BioNumerik Sales Price") in
accordance with the Supply Arrangements referred to in Section 7.4. The
BioNumerik Sales Price will be decided by the parties hereto in good faith
taking into account the following factors and considerations:
(a) [**];
(b) [**];
(c) [**];
(d) [**]; and
(e) [**].
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
15
7.1.2 [**]:
(a) [**]
(b) [**].
7.2 Manufacturing Rights for Venture Products GR.
7.2.1 GRELAN will retain all manufacturing rights for Venture
Products GR. Any other terms and conditions regarding the sale or provision of
Venture Products GR by GRELAN to KI PHARMA will be separately agreed by the
parties hereto after taking into account the scenarios and illustrations
contained on Attachment C hereto and the other factors and considerations
described in this Section. GRELAN has the right to manufacture Venture Products
GR directly or to establish a contract with a third party manufacturer to supply
KI PHARMA or the designated third party licensee for product distribution in the
Territory. Upon receiving the appropriate Government Regulatory Approvals for
any Venture Products GR, KI PHARMA (or if agreed to by the parties hereto, a KI
PHARMA subsidiary or affiliate or a designated third party) will directly
purchase Venture Products GR from GRELAN at a specified sales price (the "Grelan
Sales Price") in accordance with the Supply Arrangements referred to in Section
7.4. The Grelan Sales Price will be decided by the parties hereto in good faith
taking into account the following factors and considerations:
(a) [**];
(b) [**];
(c) [**];
(d) [**]
(e) [**].
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
16
7.2.2 The estimated additional profit margin referred to in
Section 7.2.1(e) will be divided evenly (50:50) and distributed to BIONUMERIK
and GRELAN. The Grelan Sales Price to be decided by the parties will include:
(a) [**] and
(b) [**].
7.3 Distribution and Sale of Venture Products.
Based on the foregoing considerations, Venture Products will be
distributed and sold through one or more of the following methods:
(a) The Venture Products are licensed to a third party for
distribution and sale in the Territory;
(b) The Venture Products are licensed, distributed and sold
through a subsidiary or affiliate of KI PHARMA for distribution and sale in the
Territory; and
(c) Combinations of (a) and (b) above.
Examples of reasonable expected ranges for the pricing and sales prices for
drugs in Japan and scenarios to illustrate this pricing in relation to
hypothetical sales of Venture Products are included on Attachment C hereto.
7.4 Commercial Supply Arrangements. Within [**] months prior to the
estimated time of the first commercial sale of a particular Venture Product in
the Territory, GRELAN (if such product is a Venture Product GR) or BIONUMERIK
(if such product is a Venture Product BN) shall enter into a commercial supply
agreement or make other appropriate arrangements (the "Supply Arrangements ")
with KI PHARMA to be negotiated in good faith by KI PHARMA, BIONUMERIK and
GRELAN and to reflect such terms and conditions as shall be reasonably necessary
to provide adequate supply of such Venture Product for sale and distribution in
the Territory.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
17
7.5 Product Labeling. Unless otherwise agreed to by GRELAN, all
labeling for Venture Products GR shall recognize that such products are
distributed under license from GRELAN. Unless otherwise agreed to by BIONUMERIK,
all labeling for Venture Products BN shall recognize that such products are
distributed under license from BIONUMERIK. One or more of KI PHARMA, GRELAN and
BIONUMERIK may be named on labeling for specified Venture Products as may be
agreed from time to time by all the parties hereto.
8. STEERING COMMITTEE.
8.1 Formation and Composition. Promptly following the Effective
Date, a Steering Committee of KI PHARMA will be established with responsibility
for the overall management of the development, manufacture, licensing
activities, distribution and marketing of the Venture Products in the Territory
in accordance with the terms of this Agreement. The Steering Committee shall be
comprised of two members, one appointed by GRELAN and one appointed by
BIONUMERIK, both of whom shall be cochairmen of the Steering Committee and
"Managers" of KI PHARMA (as defined in the Operating Agreement). Each Steering
Committee member should be a senior qualified full-time employee who serves as a
manager for his respective company and who has extensive knowledge of
pharmaceutical operations. [**] will be the founding Steering Committee members
who will co-chair the Steering Committee.
8.2 Duties. The Steering Committee shall have such duties and
responsibilities as are provided in the Operating Agreement. No Steering
Committee member shall be removed and no new Steering Committee member shall be
appointed unless such removal or appointment is consented to by both GRELAN and
BIONUMERIK.
8.3 Meetings. The Steering Committee will meet at least quarterly
(in Japan, U.S. or by telephone, video conference or internet - by mutual
consent) to review the progress of the development of Venture Products in the
Territory.
8.4 Recommendation Regarding Management. The Steering Committee
will recommend management and key personnel to KI PHARMA for development,
manufacturing, regulatory, marketing, distribution and sale of Venture Products
in the Territory, at their request.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
18
8.5 Identification of Consultants. If needed, the Steering Committee
shall identify third party consultants and contractors to assist in the
development of the Venture Products in the Territory.
9. DEVELOPMENT AND COMMERCIALIZATION PLAN.
9.1 General Diligence Efforts. The parties hereto agree to use their
best efforts to commercialize or cause to be commercialized the Venture Products
in the Territory as soon as reasonably practicable.
9.2 Target Development and Commercialization Plan. In addition to
the above general diligence requirements, KI PHARMA shall meet the target
development and commercialization plan for Venture Products. The target
development and commercialization plan for the BNP7787 Products is set forth in
Attachment D hereto, and those for the other Venture Products shall be decided
by the parties hereto as soon as reasonably practical. These target development
and commercialization plans will be updated on a semi-annual basis by the
Steering Committee. If any of the specified targets are not met with respect to
a particular Venture Product, and such targets continue to remain unmet for a
period of 60 days or greater following notice to the parties by any party
hereunder, then the parties hereto shall discuss and decide in good faith how to
solve the problem. If (a) the specified development performance targets as
defined by the Steering Committee for any particular Venture Product are not met
on an annual basis for three consecutive years, or (b) such product does not
receive Government Regulatory Approval to sell and distribute such product in
the Territory within 10 years of the date of this Agreement or conveyance of a
product to the Venture, then all licenses granted hereunder to such Venture
Product, and to the Improvements, Patent Rights, and Know-How provided by GRELAN
or BIONUMERIK with respect to such product shall terminate, and all right,
title, and interest in such Venture Product shall revert to the party or parties
who granted such rights to the Venture Product(s), provided that such rights
shall not revert to a party if the failure to meet such target was caused in
substantial part by the actions or failure to act of such party. An extension of
the time to meet the development performance requirements in the previous
sentence may be granted upon mutual agreement between GRELAN and BIONUMERIK.
10. PATENT MATTERS.
10.1 BioNumerik Patent Maintenance. BIONUMERIK will be responsible
for prosecuting and maintaining Patents for Venture Products BN at its own
expense and BIONUMERIK will own all Patent Rights for Venture Products BN.
BIONUMERIK shall advise GRELAN as to the progress of its patent applications and
registrations in Japan relating to Venture Products BN from time to time. In
addition, BIONUMERIK will advise GRELAN as to patent strategy and prosecution
outside the Territory with respect to Venture Products BN.
19
10.2. GRELAN Patent Maintenance and Assistance. GRELAN will be
responsible for prosecuting and maintaining Patents for Venture Products GR at
its own expense and GRELAN will own all Patent Rights for Venture Products GR.
GRELAN shall advise BIONUMERIK as to the progress of its patent applications and
registrations in Japan relating to the Venture Products GR from time to time. In
addition, GRELAN will advise BIONUMERIK as to patent strategy and prosecution in
the Territory with respect to Venture Products BN.
10.3. No Present Notification of Infringement-BioNumerik. Except
as described in Attachment E hereto, BIONUMERIK represents and warrants to KI
PHARMA and GRELAN that BIONUMERIK has not received any notification of, and has
no knowledge that the use by KI PHARMA and GRELAN of the Know-How or the
manufacture, use or sale of the Venture Products BN infringes any third party
patent rights in the Territory. If during the term of this Agreement an
infringement action should be brought in the Territory by a third party against
KI PHARMA or GRELAN or their Affiliates or sublicensees claiming that the use of
the Know-How or the Improvement relating to the Venture Products BN or the
manufacture, use or sale of the Venture Products BN licensed hereunder infringes
any patent rights of the third party in the Territory, KI PHARMA and/or GRELAN
will promptly inform BIONUMERIK of such fact in writing and BIONUMERIK agrees to
consult with KI PHARMA and GRELAN in order to decide together the course of
action which should be taken in such case. Each of the parties hereto agrees to
cooperate fully in any defense against such infringement action. All legal
expenses and costs (including attorneys' fee) in such defense shall be borne
[**] by BIONUMERIK and [**] by GRELAN.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
20
10.4. No Present Notification of Infringement- Grelan. Except as
described in Attachment E hereto, GRELAN represents and warrants to KI PHARMA
and BIONUMERIK that GRELAN has not received any notification of, and has no
knowledge that the use by KI PHARMA and GRELAN of the Know-How or the
manufacture, use or sale of the Venture Products GR infringes any third party
patent rights in the Territory. If during the term of this Agreement an
infringement action should be brought in the Territory by a third party against
KI PHARMA or GRELAN or their Affiliates or sublicensees claiming that the use of
the Know-How or the Improvement relating to the Venture Products GR or the
manufacture, use or sale of the Venture Products GR licensed hereunder infringes
any patent rights of the third party in the Territory, KI PHARMA and/or GRELAN
will promptly inform BIONUMERIK of such fact in writing and GRELAN agrees to
consult with KI PHARMA and BIONUMERIK in order to decide together the course of
action which should be taken in such case. Each of the parties hereto agrees to
cooperate fully in any defense against such infringement action. All legal
expenses and costs (including attorneys' fee) in such defense shall be borne
[**] by BIONUMERIK and [**] by GRELAN.
10.5. Enforcement of Patents and Proprietary Rights.
(a) If allowable by law, KI PHARMA, as exclusive licensee
for the Venture Products in the Territory, shall have power to institute and
prosecute proceedings or suits ("Suits") for
infringement of the Patent Rights and/or Patents and proprietary rights
regarding Venture Products in the Territory. BIONUMERIK may join and, if
required by law, BIONUMERIK will join as party plaintiff in such Suits regarding
Venture Products BN. In addition, KI PHARMA shall not institute or settle any
Suit regarding Venture Products BN without the consent of BIONUMERIK (which
consent will not be unreasonably withheld) and BIONUMERIK may assume control of
any Suit regarding Venture Products BN at its own expense by giving notice to KI
PHARMA and agreeing to be responsible for all further costs of such Suit. GRELAN
may join and, if required by law, GRELAN will join as party plaintiff in such
Suits regarding Venture Products GR. In addition, KI PHARMA shall not institute
or settle any Suit regarding Venture Products GR without the consent of GRELAN
(which consent will not be unreasonably withheld) and GRELAN may assume control
of any Suit regarding Venture Products GR at its own expense by giving notice to
KI PHARMA and agreeing to be responsible for all further costs of such Suit.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
21
(b) Except as otherwise expressly provided herein, all legal
expenses and costs (including attorneys' fee) in such Suits and all other
third-party patent litigation regarding the Venture Products in the Territory
(the "Legal Expenses") will be borne 50% by GRELAN and 50% by BIONUMERIK.
(c) All recoveries in any Suit (including attorneys' fee)
and all other third-party patent litigation regarding the Venture Products in
the Territory (regardless of which party actually receives such recovery) shall
be applied first in or toward satisfaction of all expenses borne by GRELAN and
BIONUMERIK in connection with such Suit or other patent litigation. If any
surplus remains it shall (i) be paid in full to BIONUMERIK if the Suit or other
patent litigation is related to Venture Products BN or (2) be paid in full to
GR-ELAN if the Suit or other patent litigation is related to Venture Products
GR.
(d) KI PHARMA shall give BIONUMERIK and GRELAN full and
complete access to all information BIONUMERIK or GRELAN reasonably request
related to the Suits.
11. IMPROVEMENTS.
11.1 BioNumerik Improvements Included. Following the Effective Date
and during the term of this Agreement, without any further payment, BIONUMERIK
shall promptly and fully disclose and grant (a) an exclusive royalty-free
license to KI PHARMA to use any BioNumerik Improvements in the Territory for the
purpose of development and commercialization of the Venture Products in the
Territory
in accordance of this Agreement, and (b) a non-exclusive royalty free license to
GRELAN to use such Improvements in the Territory for the purpose of development
of Venture Products in the Territory in accordance with this Agreement. In
addition, BIONUMERIK hereby grants GRELAN effective as of the Effective Date (a)
a non-exclusive, perpetual, fully paid-up royalty-free license, with the right
to sublicense, to use all BioNumerik Improvements related only to Venture
Products GR outside the Territory for the purpose of development and
commercialization of such products outside the Territory, and (b) a
nonexclusive, perpetual (but only after the expiration or termination of this
Agreement), fully paid-up royaltyfree license, with the right to sublicense, to
use such BioNumerik Improvements related only to Venture Products GR in the
Territory for the purpose of development and commercialization of such products
in the Territory.
22
11.2. Grelan Improvements Included. Following the Effective Date and
during the term of this Agreement, without any further payment, GRELAN shall
promptly and fully disclose and grant an exclusive royalty-free license to KI
PHARMA to use any Grelan Improvements in the Territory for the purpose of
development and commercialization of Venture Products in the Territory in
accordance with this Agreement. In addition, GRELAN hereby grants to BIONUMERIK
effective as of the Effective Date (a) a non-exclusive, perpetual, fully paid-up
royalty-free license, with the right to sublicense, to use all Grelan
Improvements related only to Venture Products BN outside the Territory for the
purpose of development and commercialization of such products outside the
Territory and (b) a non-exclusive, perpetual (but only after the expiration or
termination of this Agreement), fully paid-up royalty-free license, with the
right to sublicense, to use such Grelan Improvements related only to Venture
Products BN in the Territory for the purpose of development and
commercialization of such products in the Territory.
11.3. Joint Improvements. Any new intellectual property generated by
KI PHARMA shall be jointly owned by BIONUMERIK and GRELAN on an equal basis.
Each of BIONUMERIK and GRELAN hereby agrees to license its interest in such
intellectual property in the manner provided in Sections 11.1 and 11.2.
11.4. Sublicense of Improvements. The sublicense by KI PHARMA of the
rights to any BioNumerik Improvements in the Territory shall require the written
prior approval of BIONUMERIK, and the sublicense by KI PHARMA of the rights to
any Grelan Improvements in the Territory shall require the written prior
approval of GRELAN.
23
12. TRADEMARKS AND TRADEMARK RIGHTS.
12.1. KI PHARMA shall register and maintain the Trademarks for the
benefit and at the expense of KI PHARMA for use in and association with Venture
Products in the Territory. GRELAN agrees to assist in such registration, if
requested by KI PHARMA or BIONUMERIK. KI PHARMA shall sell the Venture Products
only under the Trademarks.
12.2. GRELAN shall be the exclusive owner of all Trademarks and
trademark registrations associated with Venture Products GR, and BIONUMERIK
shall be the exclusive owner of all Trademarks and trademark registrations
associated with Venture Products BN. GRELAN shall remain free to use and grant
rights to the use of the Trademarks outside of the Territory with respect to
Venture Products GR. BIONUMERIK shall remain free to use and grant rights to the
use of the Trademarks outside of the Territory with respect to Venture Products
BN.
12.3. KI PHARMA shall maintain the quality control standards set
forth by GRELAN and BIONUMERIK from time to time with respect to the Trademarks;
and KI PHARMA will ensure that any Sublicensee using the Trademarks in the
Territory shall be subject to similar standards of quality control.
13. CONFIDENTIALITY.
13.1. Confidential and Proprietary Information. Each party hereto
acknowledges that in order for the parties to carry out their respective
obligations under this Agreement, it may be necessary for the parties to
disclose to each other certain Confidential Information. Each party hereto
agrees:
13.1.1. To ensure that it does not reveal or make available to
any third party any Confidential Information of any other party, except as such
disclosure may be expressly authorized by this Agreement or otherwise
specifically approved in writing by the party against whom such disclosure is
sought and to ensure that it will treat such Confidential Information of each
other party in the same manner as it treats its own Confidential Information,
such treatment to be at least the degree that a reasonable person would perform
under similar circumstances;
24
13.1.2. To ensure that Affiliates, sublicensees, employees,
agents, associates or other persons to whom such disclosure may be made or who
may otherwise have access to such Confidential Information of any other party
have agreed in writing to safeguard and maintain such Confidential Information
of the other party or parties in confidence;
13.1.3. To ensure that Confidential Information of the other
party or parties is not used for the receiving party's benefit except as such
benefits are expressly contemplated herein;
13.1.4. To prohibit the Confidential Information of the other
party or parties from being duplicated in any manner; except as is reasonably
necessary to perform the tasks and obligations contemplated under this
Agreement; and
13.1.5. To prohibit the Confidential Information of the other
party or parties from being published in any form without the express written
consent of the disclosing party.
13.2. Matters not Included as Confidential Information.
Notwithstanding anything herein to the contrary, the defined term "Confidential
Information" and the obligations of nondisclosure, nonuse and confidentiality
relating thereto shall not include any information or data which:
13.2.1. Is or becomes known to the general public through no
action or fault of the receiving party;
13.2.2. Was already known to the receiving party prior to the
date of disclosure hereunder, as evidenced by the written records of that party,
without any obligation of confidentiality;
13.2.3. Is or becomes known to the receiving party without any
obligation of confidentiality from a third party having the right to disclose
the same, and not having a confidential relationship with the disclosing party
with respect thereto; or
13.2.4. Is necessary for the receiving party or its Affiliates
to disclose to a governmental authority or any agency thereof on a
non-confidential basis, in order to pursue Government Regulatory Approvals or
other regulatory approvals as contemplated by this Agreement or for other
25
purposes related to the intent of this Agreement; provided, however, that the
receiving party shall notify the disclosing party before disclosing such
Confidential Information.
13.3. Survival of Confidentiality. The obligations of this Section
13 with respect to Confidential Information shall continue during the term of
this Agreement and for 10 years after the termination or expiration of this
Agreement.
14. PROVISION FOR VENTURE FUNDING.
GRELAN and BIONUMERIK shall provide KI PHARMA with reasonable funding in
proportion to their ownership interest in KI PHARMA immediately before such
funding so that KI PHARMA is adequately funded for its ongoing business and
taxes. Such funding shall be provided or obtained in such form and in such
manner as may be agreed between GRELAN and BIONUMERIK, but for the avoidance of
doubt, may include contribution of additional capital, member loans or member
guarantees for borrowing from third parties. GRELAN will be responsible for
bearing the ongoing operating costs for KI PHARMA (up to a maximum of [**] until
the time that product revenues are obtained for the Venture Products.
15. ACCOUNTING.
KI PHARMA shall keep and shall cause its Sublicensees to keep
written (English) records and reports relating to the transactions covered by
this Agreement. As soon as practicable after the end of each fiscal year of KI
PHARMA, and in any event within 60 days thereafter, KI PHARMA shall prepare or
cause to be prepared, audited financial statements of KI PHARMA as of the end of
and for such fiscal year, including balance sheets, statements of operations,
and statements of cash flow, all of which will be prepared in accordance with
generally accepted accounting principles consistently applied during the periods
covered thereby and setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail and audited by
independent public accountants of internationally recognized standing selected
by KI PHARMA, BIONUMERIK, and GRELAN. As soon as practicable after the end of
the first, second, and third quarterly accounting periods in each fiscal year of
KI PHARMA and in any event within
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
26
30 days thereafter, KI PHARMA shall prepare or cause to be prepared, a balance
sheet of KI PHARMA as of the end of each such quarterly period, and statements
or operations and statements of cash flow of KI PHARMA, for such period and for
the current fiscal year to date, prepared in accordance with generally accepted
accounting principles consistently applied during the periods covered thereby
(other than for accompanying notes), subject to changes resulting from year-end
audit adjustments, and setting forth in each case the comparative figures for
the previous fiscal year, all in reasonable detail. All such prepared
documentation referred to herein will be provided by KI PHARMA to BIONUMERIK and
GRELAN without charge. Upon the request of either BIONUMERIK or GRELAN, and on
reasonable notice, KI PHARMA shall and shall cause its Affiliates and
Sublicensees to permit, at the expense of the requesting party (BIONUMERIK or
GRELAN, as the case may be), an independent certified public accountant
reasonably acceptable to KI PHARMA and the requesting party, to have access
during reasonable business hours to such records as may be necessary to (a)
obtain any additional information and records as may be required to prepare
audited financial information for KI PHARMA or as may be otherwise required to
comply with financial reporting and disclosure requirements of such party, and
(b) determine the correctness of any fee or payment statements and actual
payments made under this Agreement. Each of BIONUMERIK and GRELAN undertakes and
agrees that neither BIONUMERIK nor GRELAN nor any certified public accountant
selected by either of them pursuant to this Section shall disclose any
information so obtained except as required by law or to the extent necessary to
enforce this Agreement.
16. USE OF NAMES. The parties hereto understand that each of BIONUMERIK,
GRELAN, and KI PHARMA may disclose certain matters pertaining to this Agreement
which may include the names of KI PHARMA, GRELAN and BIONUMERIK, and the subject
matter of this Agreement, if and to the extent that such disclosure is required
by the applicable securities laws or other applicable laws and regulations;
provided, however, that if such disclosure is made in the form of public
statements, whether oral or written, including, but not limited to, shareholder
reports, communications with stock market analysts, press releases or other
communications with the media, the disclosing party must obtain the prior
written approval of the other parties (which approval shall not be unreasonably
withheld) and further provided that no incorrect, exaggerated or misleading
statements shall be disclosed.
27
17. INDEMNIFICATION.
17.1. BioNumerik Indemnification. BIONUMERIK agrees to defend,
indemnify and hold harmless GRELAN and KI PHARMA from and against any and all
(a) product liability and related costs and expenses (including attorney fees)
arising out of Venture Products BN supplied by BIONUMERIK and (b) all other
claims, damages or costs, including attorney fees, arising out of manufacturing
defects of any Venture Products supplied by BIONUMERIK, or the negligence,
failure to follow established good manufacturing practices or International
Conference on Harmonization (ICH) guidelines, or non-compliance with applicable
laws and regulations in the Territory on the part of BIONUMERIK.
17.2. Grelan Indemnification. GRELAN agrees to defend, indemnify and
hold harmless BIONUMERIK and KI PHARMA from and against any and all (a) product
liability and related costs and expenses (including attorney fees) arising out
of Venture Products GR supplied by GRELAN and (b) all other claims, damages or
costs, including attorney fees, arising out of manufacturing defects of any
Venture Products supplied by GRELAN, or the negligence, failure to follow
established good manufacturing practices or ICH guidelines, or non-compliance
with applicable laws and regulations in the Territory on the part of GRELAN.
17.3. KI Pharma Indemnification. Notwithstanding the provisions of
Sections 17.1 and 17.2, KI PHARMA shall defend, indemnify and hold harmless
BIONUMERIK and GRELAN from and against any and all third party related claims,
damages or costs including attorney fees arising out of the failure by KI PHARMA
to distribute the Venture Products manufactured by BIONUMERIK or GRELAN in
accordance with applicable legal and regulatory requirements, the negligence of
KI PHARMA with respect to the Venture Products, or the non-compliance by KI
PHARMA with applicable laws and regulations in the Territory.
28
18. DURATION AND TERMINATION OF AGREEMENT.
18.1 Duration.
18.1.1(a) Unless otherwise terminated as set forth below, this
Agreement shall terminate upon the earlier to occur of (i) such time following
commercialization of the Venture Products, that Venture Products are no longer
being sold and/or distributed by KI PHARMA or its Sublicensees in the Territory
and (ii) 25 years after the effective date hereof.
18.1.1(b) This Agreement shall also immediately terminate if
the Effective Date does not occur within three months after the date of this
Agreement. In the event of termination pursuant to this Section 18.1.1(b), the
obligations and rights of the parties under this Agreement shall terminate,
except that the confidentiality obligations under Section 13 shall survive and
continue, and the rights and obligations under Section 17 and Section 22.12
shall survive and continue.
18.2 Termination.
18.2.1. The parties hereto shall be able to terminate this
Agreement in the following events:
(a) If a party to this Agreement shall materially
breach, materially default or otherwise materially fail to perform under the
terms of this Agreement or the Operating Agreement or any material
representation or warranty made by such party herein proves to have been
incorrect or misleading in any material respect when made, the other party or
parties may terminate this Agreement by giving 60 days advance written notice,
unless the breach, default or failure is cured within such notice period.
(b) If GRELAN or BIONUMERIK shall become bankrupt or
insolvent or any proceeding is commenced to place its business in the hands of a
receiver, assignee or trustee in bankruptcy, or any proceeding is commenced for
company reorganization (kaisha kosei), arrangement (seiri), civil rehabilitation
(minjisaisei), dissolution (kaisan) and liquidation (seisan), whether
voluntarily or otherwise, and such proceedings are not dismissed within ninety
(90) days of the commencement of any such proceeding, then the party that is not
bankrupt, insolvent or subject to such proceeding may terminate this Agreement
upon 30 days advance written notice.
29
(c) If, following the Effective Date, KI PHARMA is
dissolved, either GRELAN or BIONUMERIK may terminate this Agreement upon 30 days
advance written notice.
(d) If a third party Competitor (defined below)
acquires a Controlling Interest (defined below) in GRELAN, then BIONUMERIK may
terminate this Agreement by giving 60 days advance written notice.
(e) If a third party Competitor (defined below)
acquires a Controlling Interest (defined below) in BIONUMERIK, then GRELAN may
terminate this Agreement by giving 60 days advance written notice.
(f) For purposes hereof, "Competitor" shall mean a
company or organization engaged in the business of discovering, developing,
manufacturing and/or selling any products or services that directly compete
with any of the Venture Products or any of the other material products which
the party who has the right to terminate this Agreement under this Section 18.2
is then developing manufacturing, selling or having sold in the Territory.
(g) For purposes hereof, "Controlling Interest" shall
mean (a) the ownership, whether directly or indirectly, of a majority of the
voting stock or equity interests, or substantially all of the assets or business
of a party, or (b) the ability, whether directly or indirectly, to appoint a
majority of the directors or other governing body of a party.
18.3. Effect of Expiration or Termination. Termination is not the
sole remedy under this Agreement and termination of this Agreement for any
reason or the expiration of this Agreement shall not affect obligations or
rights of any party incurred or accrued prior to such termination or expiration.
The termination of this Agreement shall not affect the right of any party to
recover damages from any breach of this Agreement.
30
18.3.1 In the event of the expiration of this Agreement
pursuant to Section 18.1.1(a), or in the event of a valid termination of this
Agreement by either GRELAN or BIONUMERIK pursuant to Section 18.2.1 (c) or by KI
PHARMA pursuant to Section 18.2.1(a), the obligations and rights of the parties
under this Agreement shall terminate, except that the confidentiality
obligations under Section 13 shall survive and continue, the ownership and the
rights granted under Section 6.2.2 with respect to the Data and Results
resulting or obtained prior to such expiration or termination shall survive and
continue, the perpetual rights granted under Section 11 with respect to the
Improvements and KI PHARMA's new intellectual property resulting or obtained
prior to the expiration or termination shall survive and continue, and the
rights and obligations under Section 17 and Section 22.12 shall survive and
continue.
18.3.2 In the event of a valid termination of this Agreement
by GRELAN pursuant to Section 18.2.1(a), Section 18.2.1(b), or Section
18.2.1(e), then notwithstanding any provisions contrary to this Section 18.3.2,
(i) all licenses granted hereunder (whether contingent or perpetual) to the
Venture Products GR, and to the Grelan Improvements, Grelan Patent Rights, and
Know-How provided by GRELAN shall terminate, (ii) all licenses granted hereunder
(whether contingent or perpetual) to the Venture Products BN, and to the
BioNumerik Improvements, BioNumerik Patent Rights, and Know-How provided by
BIONUMERIK shall survive and continue without being affected, except that any
such licenses which are stated to be exclusive shall become non-exclusive after
such termination and the amounts of Upfront Payment and Royalties payable by KI
PHARMA for such products shall be reasonably adjusted as may be agreed to by the
parties hereto in good faith, and (iii) all rights, title and interest in the
Venture Products GR shall revert to GRELAN. For the avoidance of doubt, GRELAN
and BIONUMERIK shall retain the right to use the Data and Results as provided in
Section 6.2.2.
18.3.3. In the event of a valid termination of this Agreement
by BIONUMERIK pursuant to Section 18.2.1(a), Section 18.2.1(b), or Section
18.2.1(d), then notwithstanding any provisions contrary to this Section 18.3.3,
(i) all licenses granted hereunder (whether contingent or perpetual) to the
Venture Products BN, and to the BioNumerik Improvements, BioNumerik Patent
Rights, and Know-How provided by BIONUMERIK shall terminate, (ii) all licenses
granted hereunder (whether contingent or perpetual) to the Venture Products GR,
and to the Grelan Improvements, Grelan Patent Rights, and Know-How provided by
GRELAN shall survive and continue without being affected, except that any such
licenses which are stated to be exclusive shall become non-exclusive after such
termination and the amounts of Up-front Payment and Royalties payable by KI
PHARMA for such products shall be reasonably adjusted as may be agreed to by the
parties hereto in good faith, and (iii) all rights, title and interest in the
31
Venture Products BN shall revert to BIONUMERIK. For the avoidance of doubt,
BIONUMERIK and GRELAN shall retain the right to use the Data and Results as
provided in Section 6.2.2.
19. BIONUMERIK REPRESENTATIONS & WARRANTIES.
19.1 Due Organization and Authority. BIONUMERIK represents and
warrants: (i) that it is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas and has the corporate power
and authority to execute, deliver and carry out the terms and provisions of this
Agreement; (ii) that the execution, delivery and performance of this Agreement
by BIONUMERIK shall not require the consent of any third party (other than any
shareholder consents to be obtained prior to the Effective Date), and shall not
cause a breach or violation under any fiduciary, contractual, statutory or
judicial obligation or restraint to which BIONUMERIK is subject or bound; (iii)
that the person executing this Agreement on behalf of BIONUMERIK is duly
authorized to do so to bind the corporation, and (iv) that attached hereto as
Attachment F are audited Financial Statements of BIONUMERIK at and for the year
ended March 31, 2000, which Financial Statements are true and correct in all
material respects.
19.2 Safety of Product(s). BIONUMERIK represents and warrants that
it has not received any notification of, and has no knowledge that there is now
pending or that there have been any United States judicial or administrative
orders to ban the development or use of any Venture Products BN and that
BIONUMERIK has no knowledge of any adverse reactions or test results encountered
or discovered regarding the use of any Venture Products BN which would render
such products unsuitable or unsafe for the purpose contemplated by this
Agreement, that have not been disclosed to GRELAN.
19.3 No Pending Action Against BioNumerik. BIONUMERIK represents
and warrants that to its knowledge there is no action or proceeding pending
against BIONUMERIK relating to the Venture Products BN, and to its knowledge
there is no basis for or threat of any action or proceeding relating to the
Venture Products BN, which might result in a material adverse change in the
business or financial condition of BIONUMERIK which could adversely affect the
rights of GRELAN and KI PHARMA under this Agreement or the development of the
Venture Products.
32
20. GRELAN REPRESENTATIONS AND WARRANTIES.
20.1 Due Organization and Authority. GRELAN represents and
warrants: (i) that it is a corporation duly organized, validly existing and in
good standing under the laws of Japan and has the corporate power and authority
to execute, deliver and carry out the terms and provisions of this Agreement;
(ii) that the execution, delivery and performance of this Agreement by GR-ELAN
shall not require the consent of any third party and shall not cause a breach or
violation under any fiduciary, contractual, statutory or judicial obligation or
restraint to which GRELAN is subject or bound; and (iii) that the person
executing this Agreement on behalf of GRELAN is duly authorized to do so to bind
GRELAN.
20.2 Safety of Product(s). GRELAN represents and warrants that it
has not received any notification of, and has no knowledge that there is now
pending or that there have been any Japan judicial or administrative orders to
ban the development or use of any Venture Products GR and that GRELAN has no
knowledge of any adverse reactions or test results encountered or discovered
regarding the use of any Venture Products GR which would render such products
unsuitable or unsafe for the purpose contemplated by this Agreement, which have
not been disclosed to BIONUMERIK.
20.3 No Pending Action Against Grelan. GRELAN represents and
warrants that to its knowledge there is no action or proceeding pending against
GRELAN relating to the Venture Products GR, and to its knowledge there is no
basis for or threat of any action or proceeding relating to the Venture Products
GR, which might result in a material adverse change in the business or financial
condition of GRELAN which could adversely affect the rights of BIONUMERIK or KI
PHARMA under this Agreement or the development of the Venture Products.
21. ASSIGNMENTS.
21.1 Assignment Restrictions. Subject to Sections 21.2 and 21.3
below and excluding the sublicense rights expressly granted herein, no party
shall have the right to assign or delegate this Agreement, or any of its rights
or obligations under this Agreement without the express written consent of the
other parties, such consent not to be unreasonably withheld, and said assignment
or delegation without such consent shall be null and void for all purposes.
33
21.2 Sale of Business. BIONUMERIK or GRELAN may assign its entire
interest in this Agreement to a third party other than a Competitor; provided
that (i) such assignment is part of the sale of all or substantially all of the
assignor's business related to the Venture Products; (ii) the ownership in all
Know-How, Patent Rights, Improvements and Trademarks of the assignor and all
interest of the assignor in KI PHARMA are assigned to such third party
simultaneously and are subject to any additional obligations contained in the
Operating Agreement; (iii) notice of any contemplated assignment is given to the
other party not less than 60 days prior to the effectiveness thereof; (iv)
following receipt of such notice, the assignor, if requested by the other party
and such assignment is contemplated to be made to a Competitor of the other
party, negotiates in good faith with the other party for a period of 40 days
with a view to finding a mutually satisfactory solution; and (v) the assignor
delivers to the other party a copy of the instrument, duly executed by the
parties thereto, effecting such assignment and affirming a complete assumption
by the assignee of the obligations of the assignor hereunder and a recognition
of the rights of the other party.
21.3 Assignment to Affiliates. This Agreement and the rights and
obligations hereunder shall be assignable, in whole or in part, by BIONUMERIK,
without consent of GRELAN or KI PHARMA, to one or more Affiliates that is not a
Competitor of GRELAN or KI PHARMA and who shall affirm to GRELAN and KI PHARMA a
complete assumption of the obligations assigned; provided that BIONUMERIK shall
guarantee the performance by such Affiliates) of such obligations. This
Agreement and the rights and obligations hereunder shall be assignable, in whole
or in part, by GRELAN, without consent of BIONUMERIK or KI PHARMA, to one or
more Affiliates that is not a Competitor of BIONUMERIK or KI PHARMA and who
shall affirm to BIONUMERIK and KI PHARMA a complete assumption of the
obligations assigned; provided that GRELAN shall guarantee the performance by
such Affiliates) of such obligations.
22. MISCELLANEOUS.
22.1 Regulatory Communications. Each party agrees to notify the
other parties immediately by telephone (with prompt written follow-up in
English) of any inquiry, contact or communication received from any governmental
regulatory agency or other official body which materially and adversely relates
to or impacts upon the Venture Products or any component or ingredient thereof,
and will promptly furnish the other parties with copies of all written
communications relating thereto sent to or received from said regulatory agency.
34
22.2 Adverse Events. Each party shall promptly inform the other
parties in writing of any material side effects or adverse events, conditions or
reactions encountered by or reported to them in connection with the Venture
Products which could in any significant way render any of the Venture Products
or any of the components thereof unsafe or unfit.
22.3 Liability Insurance. KI PHARMA will maintain liability
insurance in amounts that are appropriate to protect against liabilities arising
in connection with the Venture Products in the Territory. GRELAN shall be
responsible for reimbursing KI PHARMA or otherwise bearing the cost of such
insurance with respect to each Venture Product until the time that such product
receives marketing approval in the Territory. After such time, the cost of such
insurance for an approved product in the Territory shall be paid 50% by GRELAN
and 50% by BIONUMERIK.
22.4 Litigation. KI PHARMA will bear the costs of all non-patent
litigation relating to KI PHARMA and the Venture Products. GRELAN and BIONUMERIK
will each be responsible for reimbursing KI PHARMA or otherwise bearing the cost
of 50% of such litigation costs. KI PHARMA will advise BIONUMERIK with respect
to litigation strategies and operations in the Territory.
22.5 Auditors. The auditors of KI PHARMA will be Ernst & Young or
another internationally recognized accounting firm approved by KI PHARMA, GRELAN
and BIONUMERIK. The audit report of the auditors will be in English. Each of
GRELAN and BIONUMERIK may select an additional accounting or auditing firm to
review the books and records of KI PHARMA, and all associated costs for such
additional firm will be paid by the party selecting it.
22.6 Marketing Analysis and Reports. KI PHARMA and/or GRELAN shall
provide such reports and analyses as BIONUMERIK may reasonably request
containing English translations describing the market for and performance of the
Venture Products in the Territory, the market position and promotion of the
Venture Products in the Territory, competitive product information including
pricing and promotional information, and physician and consumer acceptance of
the Venture Products developed or obtained by KI PHARMA and/or GRELAN which
could affect the Venture Products in the Territory or generally. To assist in
the distribution of Venture Products in the Territory, KI PHARMA and/or GRELAN
shall regularly provide BIONUMERIK with information and data which will enable
BIONUMERIK to have a complete understanding of the general and specific markets
relating to the sale of Venture Products in the Territory.
35
22.7 Notice / Reports. Any reports, notices or other communications
required or permitted to be given by any party hereto will be given in writing
by personal delivery, courier service or facsimile, or by registered or
certified air mail, postage prepaid, return receipt requested, addressed to each
respective party at the address shown below.
If to BIONUMERIK:
BioNumerik Pharmaceuticals, Inc.
8122 Datapoint Drive, Suite 1250
San Antonio, Texas 78229
Attn: Frederick H. Hausheer, M.D.
Facsimile No.: (210) 614-0643
If to GRELAN:
Grelan Pharmaceutical Co., Ltd.
Ogura Bldg. 5F
Nihonbashi Kobunacho 6-6
Chuo-ku, Tokyo 103-0024
Japan
Attn: Hashime Kanazawa, Ph.D.
Facsimile No. (81) 3-3281-5980
or to such other address as any party may indicate by proper notice to the other
parties in the same manner as provided herein; provided, however, that the
notices and opinions referred to in or required under Sections 10 and 18 shall
be given by personal delivery, courier service or registered or certified
airmail as mentioned above. All notices are deemed effective on the date of
receipt or, if delivery is not accepted, five (5) days after placement with the
addressee, an overnight courier service or a post office, as applicable.
22.8 Severability. Should any provision of this Agreement be held
to be invalid, unenforceable, or against public policy, the remaining provisions
hereof shall not be affected thereby. In such event, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible with respect to those provisions
which were held to be invalid, unenforceable or against public policy.
22.9 Counterparts. This Agreement may be executed in several
counterparts, each of which will be an original, but all of which, when taken
together, will constitute one and the same instrument.
36
22.10 Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS
19 AND 20, NEITHER BIONUMERIK NOR GRELAN MAKES ANY WARRANTY WITH RESPECT TO ANY
TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT
AND EACH OF BIONUMERIK AND GRELAN HEREBY DISCLAIMS WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH
RESPECT TO ANY AND ALL OF THE FOREGOING. THE PARTIES UNDERSTAND AND AGREE THAT
DEVELOPMENT AND COMMERCIALIZATION OF THE VENTURE PRODUCTS WILL INVOLVE APPROVAL
BY REGULATORY AUTHORITIES AND THAT NO PARTY IS GUARANTEEING THE SAFETY,
EFFICACY, MANUFACTURE OR REGULATORY APPROVAL OF ANY VENTURE PRODUCTS.
22.11 Force Majeure.
22.11.1. Except for the payment of money, no failure or
omission by the parties hereto in the performance of any obligation of this
Agreement shall be deemed a breach of this Agreement nor create any liability,
if the same arises as a result of force majeure, i.e., any cause or causes
beyond the control of the parties, including, but not limited to the following,
which for the purposes of this Agreement, shall be regarded as beyond the
control of the party in question: acts of God; acts, omissions, rules,
regulations, or orders of any governmental authority or any officer, department,
agency or instrumentality thereof; fire; storm; flood; earthquake; accident;
acts of the public enemy; war; rebellion; insurrection; riot; invasion; strikes,
lockouts or shortages of raw materials or other supplies.
22.11.2. In the event of such cause intervening, such excuse
of performance shall be only to the extent that such non-performance is beyond
the reasonable control of the party bound by such covenant or obligation; and
the party so affected shall use its best efforts to eliminate or cure or
overcome any of such causes and to resume performance of its covenants and
obligations with all possible speed.
22.12. Arbitration. All disputes, controversies or differences which
may arise among the parties, out of or in relation to or in connection with this
Agreement or the Operating Agreement, or the breach thereof, shall be finally
settled by arbitration, by the American Arbitration Association in Honolulu,
Hawaii, U.S.A., by a panel of three (3) arbitrators in accordance with the then
current American Arbitration Association International Arbitration Rules,
provided that the arbitrators will first render a preliminary
37
decision setting forth their grounds for decision and providing at least thirty
(30) days for each of the parties to respond. The parties hereto expressly waive
any right to appeal such decision or to challenge the decision in any court.
Judgment thereof may be entered in any court of competent jurisdiction in the
United States or Japan. This clause shall not be used to prohibit the right of
any party to seek injunctive relief in appropriate circumstances.
22.13 Export Controls. The parties agree to abide by the United
States and Japanese laws and regulations governing exports of the Venture
Products or any other technology developed or disclosed as a result of this
Agreement. The parties acknowledge that any performance under this Agreement is
subject to any restrictions which may be imposed by the United States and
Japanese laws and regulations governing exports. Each party agrees to provide
the other parties with any assistance, including written assurances, which may
be required by a competent governmental authority and by applicable laws and
regulation as a precondition for any disclosure of technology by the other
parties under the terms of this Agreement. In addition, the parties hereto agree
to take all actions as may reasonably be required to assure compliance with all
applicable requirements of the U.S. Foreign Corrupt Practices Act.
22.14 Construction / Jurisdiction / Official Language. This
Agreement shall be construed in accordance with the laws of the State of Texas,
U.S.A. Subject to the arbitration provisions contained in Section 22.12, each
party hereto hereby irrevocably consents and submits to the jurisdiction of the
Courts of the State of Texas and of the United States of America for all
purposes in connection with any proceeding which arises out of or relates to
this Agreement. English shall be the official language of this Agreement and any
related agreement provided for hereunder and all communications between the
parties hereto shall be conducted in that language. Each party recognizes that
the parties hereto grant no licenses, by implication or otherwise, except for
the licenses expressly set forth in this Agreement. GRELAN agrees to promptly
provide BIONUMERIK with written English translations of (a) all material
reports, financial statements, and documents relating to the Venture Products or
this Agreement that are in Japanese and (b) other documents that are in Japanese
and relate to the Venture Products or this Agreement as may be reasonably
requested by BIONUMERIK.
23. ENTIRE AGREEMENT. This Agreement comprises the entire understanding
and Agreement of the parties hereto with respect to the specific subject matter
of this Agreement, and supersedes all prior agreements or understandings,
written or oral, between the parties hereto with respect to the specific subject
matter of this Agreement. In addition, and except as otherwise expressly
provided
38
herein, those obligations under the existing confidentiality agreements,
materials transfer agreements, stock purchase agreements, and related agreements
between and among BIONUMERIK and GRELAN, and in certain cases certain third
parties, shall continue in full force and effect in accordance with their terms.
This Agreement may not be amended except by a written instrument signed by
GRELAN and BIONUMERIK.
24. CAPTIONS. The captions used in this Agreement are for purposes of
clarification only and are not meant to be construed as part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
GRELAN PHARMACEUTICAL CO., LTD. BIONUMERIK PHARMACEUTICALS, INC.
By: /s/ H. KANAZAWA By: /s/ FREDERICK H. HAUSHEER, M.D.
-------------------------------------- ----------------------------------
Hashime Kanazawa, Ph.D. Frederick H. Hausheer, M.D.
C.O.O. & Vice President - Director. Chairman & Chief Executive
Officer
Date: 30th Aug. 2000 Date: 30th Aug. 2000
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39
ATTACHMENTS A-1 THROUGH A-3
BNP7787 Products, Karenitecin Products & Mercedes Products
ATTACHMENTS A-4 THROUGH A-5
PDE4 Products and COX-2 Products - To Be Provided by Grelan
ATTACHMENT B-1
BioNumerik Patent Rights - To Be Provided by BioNumerik
ATTACHMENT B-2
Grelan Patent Rights - To Be Provided by Grelan
ATTACHMENT C
Venture Product Scenarios and Illustrations
ATTACHMENT D
Target Development & Commercialization Plan Milestones for BNP7787
ATTACHMENT E
Patent Matters
ATTACHMENT F
BioNumerik Audited Financial Statements
ATTACHMENT G
Grelan Audited Financial Statements
40
ATTACHMENT A-1
"BNP7787 Products" means the compound identified as BNP7787, DISODIUM
2,2' -DITHIOBISETHANE SULFONATE (dimesna), all pharmaceutical salts and
prodrugs thereof, and all pharmaceutical formulations of BNP7787.
41
ATTACHMENT A-2
"Karenitecin Products" means the compound identified as BNP1350, IUPAC
name 4-ETHYL-4-HYDROXY-11-TRIMETHYLSILYLETHYL-(S)-1H-PYRANO [3' :4' :6 :7]
INDOLIZINO [1,2-b]QUINOLINE-3,14(4H, 12H)-DIONE, (also referred to as
7-(2'-TRIMETHYLSILYLETHYL) CAMPTOTHECIN), all pharmaceutical salts and prodrugs
thereof, and all pharmaceutical formulations of BNP1350.
42
ATTACHMENT A-3
"Mercedes Products" means those pharmaceutical formulations that
include paclitaxel (and other taxane derivatives as that term is defined in the
art) and N-Methyl pyrrolidone (NMP).
43
ATTACHMENT A-4
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
44
ATTACHMENT A-5
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
45
ATTACHMENT B-1
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
46
ATTACHMENT B-2
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
47
ATTACHMENT C
Set forth below are some examples of what are reasonable expected ranges for the
pricing and sales prices for drugs in Japan - these ranges can vary from the
examples given below:
1. [**] dose of drug is [**] the retail price to patient and government
reimbursement.
2. Hospital or Pharmacy Purchase Price usually is about [**] respectively, [**].
The hospital or pharmacy will typically purchase a drug from a wholesaler or
distributor, not directly from a manufacturer or pharmaceutical company.
3. Distributor or Wholesaler Price usually is about [**] of [**] - if the
Venture or a third party owned by or affiliated with the Venture directly
distributes and sells the drug, then the profit margin (above the Manufacturing
Price and royalty) will be [**] between BioNumerik and GRELAN. The same would
apply in the event that the Venture or a third party owned by or affiliated with
the Venture directly distributes and sells the drug to a Hospital or Pharmacy.
4. Royalty is usually about [**] - this is [**] between BioNumerik and Grelan
(e.g.: [**] paid to BioNumerik and [**] paid to Grelan).
5. Manufacturing Price for a contract manufacturer is estimated at about [**] -
this is paid to the party that has manufacturing rights to the product and
represents the price to manufacture the bulk drug [**] including fill and
finish, label, store, record (adds another [**] and the margin of expected
Manufacturer's profit (approximately [**] to the manufacturer.
Some scenarios for illustration of the foregoing:
a. The Venture drug sold is by third party distributor that has licensed
the right to distribute, market and sell the drug in Japan. The [**]
for the approved drug is [**] per unit. Grelan and BioNumerik would
each receive [**] royalty payment [**] per unit) by the Japanese
distributor. The total royalty that BioNumerik would receive from this
would be [**] per unit.
b. In the above scenario, the Manufacturing Price for the Venture product
is [**] (estimated at [**] BioNumerik would sell the drug directly to
the third party distributor based on a [**] Manufacturing Price to be
paid by the third party Japanese distributor. In this scenario,
BioNumerik would also receive a manufacturing margin payment from the
distributor of approximately [**]. In this scenario this would amount
to approximately an additional [**] per unit. BioNumerik could also
optionally sell the product directly to the Venture; in this scenario
the manufacturer's profit margin would still be [**] and paid by the
Venture to BioNumerik.
c. The Venture drug sold by Venture or a Venture-owned third party to
distributor, wholesaler or hospital/pharmacy. The [**] for the
approved drug is [**] per unit. The Manufacturing Price is [**] (based
on [**]) and the price range that the drug is sold to distributor,
wholesaler or hospital/pharmacy ranges from [**] The specific points
of sale of drug units will be accounted for and payments will be made
accordingly, with adjustment and reimbursement for any over- payment
or under-payment to Grelan or BioNumerik for any units actually sold.
Any profit margin resulting from the direct distribution or sale of
the Venture product by the Venture or its affiliates would be paid to
the Venture taking into account the Manufacturing Price (which is
estimated to range from [**] this profit margin (meaning above that of
any royalty and/or Manufacturing Price) would be [**] and paid to
BioNumerik and Grelan from the Venture. BioNumerik shall also be paid
a manufacturer's profit margin of approximately [**] for each unit. If
there is any royalty payment, then this will be [**] between
BioNumerik and Grelan as well. In this example, BioNumerik would sell
the product to the Venture for [**] (Manufacturing Price of [**] plus
Manufacturing Profit Margin of [**] plus [**] (the
Wholesale/Distribution and Hospital or Pharmacy Price) per unit for a
total of [**] per unit. The Venture would sell the unit to the
distributor, wholesaler or hospital or pharmacy for [**] per unit and
Grelan and BioNumerik would each be paid from the Venture a total
amount of [**] per unit. If there is a royalty payment, then it shall
be [**] between Grelan and BioNumerik and shall be part of the
BioNumerik sales price of the product to the Venture.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
[**] BioNumerik and Grelan will have certain rights to determine and
establish prices for the Venture Products. The Manufacturing price for
Venture Products BN will be established by BioNumerik and will include the
costs for all raw materials and manufacturing along with the margin of
profit for the manufacturer - this will be negotiated at the time of any
third party license or will be established by mutual agreement in the event
the Venture or an affiliate distributes and sells the products directly.
The product royalty percentage will be established by BioNumerik and Grelan
based on the license agreement with the third party distributor (e.g., a
large pharmaceutical company) royalty obligations to the Venture. In the
event the Venture or an affiliate decides to directly distribute or sell
Venture products to a Japanese wholesaler/distributor, hospital or pharmacy
the corresponding sales prices for each endpoint of sale will be jointly
agreed upon by BioNumerik and Grelan for all Venture products in the
territory of Japan. BioNumerik will have the sole right and authority to
establish prices in all territories excluding Japan for all Venture
Products BN, the rights to which are licensed to the Venture.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
48
ATTACHMENT D
(2 Pages)
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
49
ATTACHMENT E
(2 Pages)
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
50
ATTACHMENT F
(22 Pages)
Bionumerik Pharmaceuticals, Inc.
Financial Statements
Years Ended March 31, 2000, 1999, and 1998 with Report of Independent Auditors
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
51
ATTACHMENT G
(3 Pages)
FINANCIAL STATEMENTS
Year Ended 30th September, 1999
GRELAN PHARMACEUTICAL CO., LTD.
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
52
Exhibit 10.3
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
OPERATING AGREEMENT
OF
KI PHARMACEUTICALS, L.L.C.
DATED: SEPTEMBER 22, 2000
INDEX
Preamble .................................................................... 1
Article I
Organization of the Company
1.01 Formation............................................................. 1
1.02 Name.................................................................. 1
1.03 Continuation and Term................................................. 2
1.04 Offices............................................................... 2
1.05 Names and Addresses of Members........................................ 2
1.06 Business of the Company............................................... 2
1.07 Amendment by Members.................................................. 3
Article II
Management of the Company
2.01 Management............................................................ 3
2.02 Limitations on the Managers' Authority................................ 4
2.03 Indemnification of a Manager.......................................... 5
2.04 Transactions with a Manager or An Affiliate of a Manager.............. 6
2.05 Voting; Quorum........................................................ 6
2.06 Steering Committee.................................................... 6
2.07 Officers.............................................................. 7
Article III
Election, Resignation and Removal of a Manager
3.01 Election of A Manager................................................. 8
3.02 Term of Office........................................................ 8
3.03 Resignation of A Manager.............................................. 9
3.04 Removal of A Manager.................................................. 9
Article IV
Capital Contributions
4.01 Initial Paid-In Capital............................................... 10
4.02 Additional Capital; Limitation........................................ 10
4.03 Compromise............................................................ 10
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-i-
Article V
Allocations and Distributions
5.01 Capital Accounts...................................................... 11
5.02 Allocation of Profits................................................. 11
5.03 Allocation of Losses.................................................. 11
5.04 Other Allocations..................................................... 11
5.05 Special Allocations to Capital Accounts............................... 12
5.06 Distribution of Cash.................................................. 13
5.07 Assignments of Interests.............................................. 13
Article VI
Transfer of Membership Interests;
Expulsion; New Members
6.01 Restrictions on Transfer.............................................. 14
6.02 Resignation of Members................................................ 15
6.03 Rights of First Refusal............................................... 15
6.04 Permitted Transfers................................................... 16
6.05 New Members........................................................... 16
6.06 Expulsion............................................................. 17
Article VII
Voting, Quorum, and Meetings
7.01 Voting Power.......................................................... 18
7.02 Quorum................................................................ 18
7.03 Annual Meeting of Members............................................. 18
7.04 Meetings of Members................................................... 19
7.05 Place of Meeting...................................................... 19
7.06 Notice of Meetings.................................................... 19
7.07 Action Without a Meeting.............................................. 19
7.08 Waiver of Notice...................................................... 19
7.09 Avoidance of Deadlocks................................................ 20
7.10 Dissolution in the Event of Deadlock.................................. 20
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Article VIII
Records; Financial and Fiscal Affairs; Tax Reporting
8.01 Records and Accounting................................................ 20
8.02 Tax Information....................................................... 21
8.03 Tax Returns........................................................... 21
8.04 Elections............................................................. 21
8.05 Interim Closing of the Books.......................................... 21
8.06 Fiscal Year........................................................... 22
8.07 Tax Matters Partner................................................... 22
Article IX
Dissolution
9.01 Events Requiring Dissolution ......................................... 22
9.02 Events of Dissociation ............................................... 23
9.03 Rights of Members Upon Continuation................................... 24
9.04 Winding Up............................................................ 24
9.05 Authority of Managers After Dissolution .............................. 25
9.06 Distribution ......................................................... 25
Article X
Definitions
10.01 Affiliate............................................................. 26
10.02 Agreement............................................................. 26
10.03 Assignee.............................................................. 26
10.04 Capital Contribution.................................................. 26
10.05 Code.................................................................. 27
10.06 Company............................................................... 27
10.07 Interest.............................................................. 27
10.08 Losses................................................................ 27
10.09 Percentage Interests for Venture Products BN Activities............... 27
10.10 Percentage Interests for Venture Products GR Activities............... 27
10.11 Person................................................................ 27
10.12 Profits............................................................... 28
10.13 Treasury Regulations.................................................. 28
10.14 Unit.................................................................. 28
10.15 Venture Products BN Activities........................................ 28
10.16 Venture Products GR Activities........................................ 28
10.17 Venture Agreement..................................................... 28
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-iii-
Article XI
Miscellaneous
11.01 Notices............................................................... 29
11.02 Possible Restrictions................................................. 29
11.03 Governing Law; Successors............................................. 29
11.04 Entire Agreement...................................................... 29
11.05 Headings, etc......................................................... 30
11.06 No Waiver............................................................. 30
11.07 Legends............................................................... 30
11.08 Counterparts.......................................................... 30
11.09 Creditors............................................................. 30
Schedule I................................................................... 32
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-iv-
OPERATING AGREEMENT
OF
KI PHARMACEUTICALS, L.L.C.
PREAMBLE
The members of KI Pharmaceuticals, L.L.C. (the "Company") set forth in
Schedule I hereto have adopted this Operating Agreement (this "Agreement") as
follows:
ARTICLE I
ORGANIZATION OF THE COMPANY
1.01 FORMATION
The parties to this Agreement are members of the Company, a limited
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liability company organized under the provisions of the Delaware Limited
Liability Company Act, as amended from time to time (the "Act'). A Certificate
of Formation (the "Certificate") was filed on September 20, 2000 with the
Secretary of State of the State of Delaware. The Managers (defined in Section
2.01(a) hereof) may take such further actions as they deem necessary to permit
the Company to conduct business as a limited liability company in any other
jurisdiction.
1.02 NAME
The name of the Company shall be "KI Pharmaceuticals, L.L.C." The name of
the Company may be changed from time to time by amendment of this Agreement and
the Certificate pursuant to Section 1.07. The Company may transact business
under an assumed name by filing an assumed name certificate in the manner
prescribed by applicable law.
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1.03 CONTINUATION AND TERM
The Company was formed upon the issuance by the Secretary of State of
Delaware of a certified copy of the Certificate. The Company shall continue in
existence until the close of the Company's business on December 31, 2030, or
until the earlier dissolution of the Company pursuant to the provisions of this
Agreement.
1.04 OFFICES
The principal office of the Company shall be determined from time to time
by the Managers. The registered office of the Company required by the Act to be
maintained in the State of Delaware, may be, but need not be, identical with the
principal office. The Company's registered office, registered agent and the
addresses thereof may be changed from time to time by the Managers in accordance
with the Act. The Company may also have offices at such other places, both
within and without the State of Delaware including Japan, as the Managers may
from time to time determine.
1.05 NAMES AND ADDRESSES OF MEMBERS
The names and addresses of the Members are set forth on Schedule 1;
provided, however, that if Dr. Hashime Kanazawa ceases to be a director,
employee or statutory auditor of Grelan (as defined in 1.07 below) for any
reason whatsoever, his Units in the Company shall be automatically assigned to
Grelan and he shall cease to be a Member without the consent of any other
Members or any other formalities notwithstanding any provision of this
Agreement. He shall take appropriate steps necessary to ensure such assignment
on or before the date of this Agreement and shall continue such steps in full
effect during the term of this Agreement. Changes to the names and addresses of
the Members and the names and addresses of new Members may be identified by an
addendum to this Operating Agreement.
1.06 BUSINESS OF THE COMPANY
The Company (i) shall engage in the development, marketing, distribution,
manufacture and sale of certain specified products in the territory of Japan and
import of such products to the territory of Japan and (ii) may engage in any
other lawful business permitted under the Act. Any Member, however, shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the Company. Neither the Company nor any Member
shall have any rights by virtue of this Agreement in any business ventures of
any Member. The Company shall not conduct in the U.S.A. any commercial
activities which would result in
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requiring Grelan to file U.S. Federal or state income tax returns solely by
virtue of holding any Interest in the Company.
1.07 AMENDMENT BY MEMBERS
So long as they are Members, a vote of both BioNumerik Pharmaceuticals,
Inc. ("BioNumerik") and Grelan Pharmaceutical Co., Ltd. ("Grelan") acting in
their capacity as Members, is required to amend this Agreement and any
Certificate.
ARTICLE II
MANAGEMENT OF THE COMPANY
2.01 MANAGEMENT
(a) The Company will be managed by two (2) Persons (the "Managers")
elected in accordance with Article 111. The conduct of the Company's business
and the management of its affairs will be exercised and conducted solely by
approval of all the Managers in accordance with this Agreement. Members, acting
solely in their capacity as members to the Company, shall not have the authority
to bind the Company. Subject to the provisions of this Article II, any one or
more Managers may act for and on behalf of the Company and execute all
agreements on behalf of the Company and otherwise bind the Company as to third
parties without the consent of all of the Members. In addition to and not in
limitation of any rights and powers conferred by law or other provisions of this
Agreement, and except as limited, restricted or prohibited by the express
provisions of this Agreement, the Managers shall have and may exercise on behalf
of the Company, all powers and rights necessary, proper, convenient or advisable
to effectuate and carry out the purposes, business and objectives of the
Company. The Managers will have general and active supervision and direction
over the day-to-day business operations of the Company and over its officers and
employees.
(b) The Managers acting on behalf of the Company shall be reimbursed for
their expenses incurred in carrying out their duties on behalf of the Company,
but no salary or related compensation shall be payable to them in their capacity
as Managers.
(c) In exercising their powers, the Managers may (i) rely upon and shall
be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, or document believed by
them to be genuine and to have been signed or
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presented by the proper party or parties; (ii) consult with counsel, accountants
or experts selected by them and any opinion of an independent counsel,
accountant or expert shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by the Managers in good faith
and in accordance with such opinion; and (iii) execute any of their powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys.
2.02 LIMITATIONS ON THE MANAGERS' AUTHORITY
The Managers shall have no authority to do any act prohibited by law or in
contravention of this Agreement, nor shall the Managers have any authority to do
any of the following without the prior written consent of the Members holding
more than three-fourths (3/4) of the outstanding Units:
(a) permit or cause the Company to make any loan to any Manager or
Member or any Affiliate of a Manager or Member;
(b) permit or cause the funds of the Company to be comingled with the
funds of any other Person;
(c) permit any creditor who makes a nonrecourse loan to the Company to
acquire, at any time as a result of making such loan, any direct or indirect
interest in the profits, capital or property of the Company other than as a
secured creditor;
(d) perform any act which would impair or make impossible the ordinary
conduct of the Company's business;
(e) sell, lease, exchange or otherwise dispose of all or substantially
all of the assets of the Company, with or without goodwill other than in the
ordinary course of business;
(f) merge or consolidate the Company with any other entity;
(g) permit or cause the Company to enter into a contract with any of the
Managers, CEO, President or their respective Affiliates;
(h) permit or cause the Company to borrow money from any Person other
than any Member;
(i) permit or cause the Company to guarantee for the benefit of any
Person or to create a mortgage or any other encumbrance on any of the assets of
the Company for the benefit of any Person;
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(j) permit or cause the Company to use its property to redeem an
Interest;
(k) permit or cause the Company to acquire any share or interest in any
company, business or partnership; or
(l) permit or cause the Company to acquire land, buildings or movable
fixed assets.
2.03 INDEMNIFICATION OF A MANAGER
(a) A Manager shall not be liable to the Company or any Member for any
act or omission based upon errors of judgment or other fault in connection with
the business or affairs of the Company if the Managers (other than the Manager
seeking indemnification) determine that such course of conduct was in the best
interest of the Company and did not result from the gross negligence or willful
misconduct of such Manager.
(b) To the fullest extent permitted by law, a Manager shall be
indemnified and held harmless by the Company from and against any and all
losses, claims, damages, settlements and other amounts ("Losses") arising from
any and all claims (including attorneys' fees and expenses, as such fees and
expenses are incurred), demands, actions, suits or proceedings (civil, criminal,
administrative or investigative), in which such Manager may be involved, as a
party or otherwise, by reason of such Manager's management of the affairs of the
Company, whether or not such Manager continued to be such at the time any such
liability or expense is paid or incurred; provided that a Manager shall not be
entitled to the foregoing indemnification if a court of competent jurisdiction
shall have determined that such Losses resulted primarily from the gross
negligence or willful misconduct of such Manager. The termination of a
proceeding by judgment, order, settlement or conviction under a plea of nolo
contendere, or its equivalent, shall not, of itself, create any presumption that
such Losses resulted primarily from the gross negligence or willful misconduct
of a Manager or that the conduct giving rise to such liability was not in the
best interest of the Company. The Company shall also indemnify a Manager who was
or is a party, or is threatened to be made a party, to any threatened, pending
or completed action by or in the right of the Company to procure a judgment in
its favor by reason of the fact that such Manager is or was an agent of the
Company, against any Losses incurred by such Manager in connection with the
defense or settlement of such action; provided that no Manager shall be entitled
to the foregoing indemnification if a court of competent jurisdiction shall have
determined that any such Losses resulted from the gross negligence or willful
misconduct of such Manager. The Company may advance a Manager any expenses
(including, without limitation, attorneys' fees and expenses) incurred as a
result of any demand, action, suit or proceeding referred to in this paragraph
(b) provided that (i) the legal action relates to the performance of duties or
services by such Manager on behalf of the Company; and (ii) such Manager gives a
full
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recourse promissory note to the Company for the amounts of such advances payable
in the event that such Manager is determined to be not entitled to
indemnification hereunder.
(c) The indemnification provided by paragraph (b) of this Section 2.03
shall not be deemed to be exclusive of any other rights to which a Manager may
be entitled under any agreement, as a matter of law, in equity or otherwise, and
shall continue as to a Manager who has ceased to have an official capacity and
shall inure to the benefit of the heirs, successors and administrators of such
Manager.
(d) Any indemnification pursuant to this Section 2.03 will be payable
only from the assets of the Company.
2.04 TRANSACTIONS WITH A MANAGER OR AN AFFILIATE OF A MANAGER
Subject to the provisions of Section 2.02, a Manager, on behalf of the
Company, may enter into contracts with itself or its Affiliates, provided that
any such transactions shall be on terms no more favorable to the Manager or such
Affiliates than generally afforded to unrelated parties in similar transactions.
2.05 VOTING: QUORUM
Each Manager shall have one vote. A majority of the number of Managers
fixed by this Agreement shall constitute a quorum for the transaction of
business; provided, that if more than one Manager is appointed and less than a
majority of the Managers are present at a meeting, a majority of the Managers
present may adjourn the meeting from time to time without further notice. If a
quorum is present when a vote is taken, the affirmative vote of a majority of
the Managers present is the act of the Managers unless this Agreement requires
the vote of a greater number of Managers.
2.06 STEERING COMMITTEE
(a) The Managers shall appoint a Steering Committee of the Company
comprised of two members: one from among Grelan's senior officers or employees
designated by Grelan and the other one from among BioNumerik's senior officers
or employees designated by BioNumerik. The Steering Committee shall be
responsible for the overall management of the development, manufacture,
licensing activities, distribution and marketing of the Company's products in
the territory of Japan. [**] will be the founding members of the Steering
Committee. They shall co-chair the Steering Committee. Section 2.01
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-6-
(b) shall apply mutatis mutandis to any payment to them for conducting their
duties as such members of the Steering Committee. Each Steering Committee member
must also be a Manager.
(b) No Steering Committee member shall be removed and no new Steering
Committee member shall be appointed unless such removal or appointment is
consented to by both Grelan and BioNumerik, acting in their capacity as Members.
2.07 OFFICERS
(a) President, Chief Executive Officer and Secretary. If the Members
holding more than two-thirds (2/3) of the outstanding Units deem it necessary or
appropriate, they may elect a President, a Chief Executive Officer ("CEO"),
and/or a Secretary; provided that the President and the CEO always must be the
Managers concurrently.
Sections 3.01 (c), and 3.02 to 3.04 shall also apply mutatis mutandis with
respect to the term of office, designation rights, resignation or removal of the
office as President, CEO and Secretary. The President, the CEO and the
Secretary, if any, acting on behalf of the Company shall be reimbursed for their
expenses incurred in carrying out their duties on behalf of the Company, but no
salary or related compensation shall be payable to them.
(b) Subordinate Officers. The Managers may appoint such officers (other
than the President, CEO and Secretary) as they deem necessary. One (1) person
may hold any two (2) or more of these offices. The Managers shall appoint such
other officers, in principle, at their first meeting after each annual meeting
of Members. Each officer so appointed shall hold office until his successor
shall have been duly appointed and qualified or until his death, resignation or
removal in the manner hereinafter provided.
(c) Resignation of Subordinate Officers. Any officer (other than the
President, CEO and Secretary) may resign at any time by giving written notice
thereof to the Members or to the Managers. Any such resignation shall take
effect at the time specified therein and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
(d) Removal of Subordinate Officers. Any officer (other than the
President, CEO and Secretary) may be removed at any time with or without cause
by the affirmative vote of the Members holding two-thirds (2/3) of the
outstanding Units. The removal of any officer shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of
such officer shall not of itself create any contract rights, merely by virtue of
such election or appointment.
-7-
(e) Vacancies of Subordinate Officers. A vacancy in any officer (other
than the President, CEO and Secretary) shall be filled for the unexpired portion
of the term by the Managers.
(f) Salaries of Subordinate Officers. The salary or compensation of
officers (other than the President, CEO and Secretary), if any, shall be
established from time to time by the Managers. The Managers may delegate to any
committee or officer the power to fix from time to time the salary or other
compensation of officers (other than the President, CEO and Secretary) appointed
in accordance with the provisions of this Article.
ARTICLE III
ELECTION, RESIGNATION AND REMOVAL OF A MANAGER
3.01 ELECTION OF A MANAGER
(a) A Manager of the Company shall be elected by a vote of Members
holding more than two-thirds (2/3) of the outstanding Units; provided, however,
that each Member who has together with its Affiliates more than one-third (1 /3)
of the outstanding Units shall have the right to designate one Manager, and the
other Members shall exercise their votes to approve such designation. The
founding Managers shall be [**] until the expiration of their term of office, or
their resignation, removal or death.
(b) The total number of Managers may be increased by a vote of Members
holding more than three-fourths (3/4) of the outstanding Units. Any Member who
has together with its Affiliates more than one-third (1/3) of the outstanding
Units shall have the right to designate one-half of the number of Managers to be
increased and the other Members shall exercise their votes to approve such
designation.
(c) If a Manager resigns or is removed in accordance with Section 3.03
or 3.04 or dies, the Members shall call a meeting to elect a replacement Manager
within 30 days after the occurrence of such resignation, removal or death. The
Member who designated such resigned, removed or dead Manager shall have the
right to designate replacement thereof, and the other Members shall exercise
their vote to approve such designation.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-8-
3.02 TERM OF OFFICE
(a) The term of office of Managers shall expire at the close of the
first annual meeting of Members occurring at least two (2) years after their
assumption of office. A Manager may be re-elected upon the expiration of his
term of office.
(b) The term of office of a Manager elected to fill a vacancy or elected
due to an increase in the number of Managers shall be concurrent with the term
of office of the other Managers in office at that time.
3.03 RESIGNATION OF A MANAGER
A Manager may resign as a manager of the Company upon 30 days prior
written notice to all Members.
3.04 REMOVAL OF A MANAGER
A Manager may be removed at any time with or without cause by the vote of
Members holding more than two-thirds (2/3) of the outstanding Units.
-9-
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01 INITIAL PAID-IN CAPITAL
Each Member has made to the Company the Capital Contribution and has
|
received the Units set forth opposite its name on Schedule I hereto.
4.02 ADDITIONAL CAPITAL; LIMITATION
No Member shall be required to satisfy any negative Capital Account. If
the Members holding more than two-thirds (2/3) of the outstanding Units
determine that additional capital is necessary, each Member shall contribute
such additional capital and receive additional Units as determined by the
Members holding more than two-thirds (2/3) of the outstanding Units in an amount
equal to the Member's pro rata share of the total Capital Contributions before
any other Persons are solicited for Capital Contributions; provided, however,
that Dr. Hashime Kanazawa in his capacity as Member shall not be required to
contribute additional capital but shall be given an opportunity to make such
contribution in accordance with this Section 4.02. In addition to the foregoing,
Grelan shall be required to make additional capital contributions in an amount
equal to the operating costs of the Company for any fiscal year but not to
exceed [**] per year, as determined by the Managers, until such time that
product revenues are obtained from the Venture Products. For purposes of this
Agreement, the terms "Venture Products," "Venture Products BN," "Venture
Products GR" and "Territory" shall have the meanings ascribed to them in the
Venture Agreement. No Member shall have any liability to the Company, to the
other Members, or to the creditors of the Company on account of any deficit
balance in its Capital Account except to the extent such deficit arises from the
failure of such Member to contribute the full amount of its Capital
Contribution. No Member shall have the right to demand or receive the return of
such Member's Capital Contribution to the Company. No Member shall be entitled
to interest on any Capital Contribution or on such Member's Capital Account.
4.03 COMPROMISE
The Managers may compromise any obligation of a Member to make a Capital
Contribution or return money or other property paid or distributed in violation
of the Act.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.01 CAPITAL ACCOUNTS
The Company shall maintain in its books and records, in accordance with
|
Section 1.704-1(b)(2)(iv) of the Treasury Regulations, a capital account for
each Member and Assignee (a "Capital Account"). Each Member's Capital Account
shall be increased by (1)(a) the amount of money contributed by such Member to
the Company, (b) the fair market value of property or other consideration
contributed by such Member to the Company (net of liabilities secured by such
contributed property that the Company is considered to assume or take under
Section 752 of the Code), and (c) allocations to such Member of Company income
and gain (or items thereof), and is decreased by (2)(w) the amount of money
distributed to such Member by the Company, (x) the fair market value of property
or other consideration distributed to such Member by the Company (net of
liabilities secured by such distributed property that such Member is considered
to assume or take under Section 752 of the Code), (y) allocations to such Member
of expenditures of the Company described in Section 705(a)(2)(B) of the Code,
and (z) allocations of Company loss and deduction (or items thereof). For
purposes of this Article, a Member who has more than one Interest in the Company
shall have a single Capital Account that reflects all such Interests, regardless
of the class of Interests owned by such Member and regardless of the time or
manner in which such Interests were acquired. All Capital Accounts are to be
determined in accordance with the rules set forth in Section 1.704-1(b)(2)(iv)
of the Treasury Regulations.
5.02 ALLOCATION OF PROFITS
The Profits of the Company shall be allocated to the Members as follows:
(a) [**] to Grelan, (b) [**] to BioNumerik, and (c) [**] to Dr. Hashime
Kanazawa.
5.03 ALLOCATION OF LOSSES
The Losses of the Company shall be allocated to the Members as follows:
(a) [**] to Grelan, (b) [**] to BioNumerik, and (c) [**] to Dr. Hashime
Kanazawa.
5.04 OTHER ALLOCATIONS
Except as otherwise provided in this Agreement, allocations of gains,
deductions, and credits shall be allocated to the Members as follows: (a) [**]
to Grelan, (b) [**] to BioNumerik, and (c) [**] to Dr. Hashime Kanazawa.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-11-
5.05 SPECIAL ALLOCATIONS TO CAPITAL ACCOUNTS
The Capital Accounts of the Members are to be maintained in accordance
with the Code and the Treasury Regulations, including without limitation the
alternative test for economic effect set forth in Section 1.704-1(b)(2)(ii)(d)
of the Treasury Regulations and the minimum gain chargeback provisions of
Section 1.704-2 of the Treasury Regulations. Nothing in this Agreement is
intended to create a deficit restoration obligation or otherwise impose personal
liability on a Member for a deficit in its Capital Account. Without limiting the
generality of the foregoing:
(a) If an allocation of loss or other allocation pursuant to Section
5.04 hereof including expenditures described in Section 705(a)(2)(B) of the Code
would cause or increase a deficit in a Member's Capital Account as defined in
Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and Section 1.704-2 of
the Treasury Regulations, then the amount of the loss or other allocation which
would have caused or increased a deficit in a Member's Capital Account shall be
allocated instead to the Capital Account of the other Members which would not
have a deficit in their Capital Accounts as a result of the allocation, in
proportion to their respective Interests, or, if no such Members exist, then to
the Members in accordance with their allocation of Profits pursuant to Section
5.02 hereof.
(b) If any Member unexpectedly receives any adjustments, allocations, or
distributions described in Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the
Treasury Regulations, which create or increase a deficit in such Member's
Capital Account, the items of the Company's income and gain for such year and,
if necessary, for subsequent years shall be specially credited to the Capital
Account of such Member in an amount and manner sufficient to eliminate, to the
extent required by the Treasury Regulations, the deficit in the Capital Account
as quickly as possible. Any such allocations shall be made pro rata. It is the
intent that this section be interpreted to comply with the alternate test for
economic effect set forth in Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations.
(c) Income and gain attributable to Venture Products BN Activities shall
be allocated [**] to the Members, in accordance with their respective Percentage
Interests for Venture Products BN Activities.
(d) Income and gain attributable to Venture Products GR Activities shall
be allocated [**] to the Members, in accordance with their respective Percentage
Interests for Venture Products GR Activities.
(e) Operating costs of the Company for any taxable year shall be
allocated [**] to Grelan (up to a maximum of U.S. [**] per year) until such time
that product revenues are obtained from Venture Products.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-12-
(f) After giving effect to the allocations set forth in Sections 5.05
(a) - (e), all items of income, gain, loss and deduction arising upon the sale
or deemed sale of all or substantially all of the assets of the Company in
connection with the dissolution of the Company pursuant to Article IX shall be
allocated such that after taking such allocations into effect, to the extent
possible, the balances in the Members' Capital Accounts will be in proportion to
the Members' Interests.
5.06 DISTRIBUTION OF CASH
(a) The Managers shall, unless otherwise agreed to by Members holding
more than two-thirds (2/3) of outstanding Units, distribute to the Members any
cash of the Company in excess of working capital requirements or other amounts
that the Managers determine shall be necessary or appropriate for the operation
of the business of the Company, including the receipts derived from and
attributable to Venture Products BN Activities (hereinafter "Venture Products BN
Available Cash") and Venture Products GR Activities (hereinafter "Venture
Products GR Available Cash"), or its winding up and dissolution. Except as
provided in Section 9.06, all such cash distributions shall be made to the
Members in accordance with paragraph (c) of this Section 5.06.
(b) The Managers may not distribute to the Members in kind any property
held by the Company.
(c) Any distribution of cash pursuant to paragraph (a) of this Section
5.06 shall be made to the Members as follows: (i) [**] to Grelan, (ii) [**] to
BioNumerik, and (iii) [**] to Dr Hashime Kanazawa; provided, however, (i)
Venture Products BN Available Cash shall be distributed to the Members in
accordance with their Percentage Interests for Venture Products BN Activities
and (ii) Venture Products GR Available Cash shall be distributed to the Members
in accordance with their Percentage Interests for Venture Products GR
Activities.
5.07 ASSIGNMENTS OF INTERESTS
In the case of any assignment of an Interest, the Assignee will have a
beginning Capital Account equal to the Capital Account of the assignor of such
Interest on the effective date of the assignment. For purposes of this Article V
only, the maintenance of Capital Accounts, allocation of profits, losses and
other items, and distributions of cash and other property, all as set forth in
this Article V, shall equally apply to each Assignee and its Capital Account.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-13-
ARTICLE VI
TRANSFER OF MEMBERSHIP INTERESTS;
EXPULSION; NEW MEMBERS
6.01 RESTRICTIONS ON TRANSFER
(a) Except as otherwise provided for in Sections 1.05 and 6.04, no
Member may, without obtaining the prior written consent of Members holding more
than two-thirds (2/3) of the outstanding Units, sell, assign, dispose of or
transfer (collectively "Transfer") all or any portion of, or any interest or
rights in, the Interests owned by the Member, and no interest holder may
Transfer all, or any portion of, or any interest or rights in, any Interest.
Each Member hereby acknowledges the reasonableness of this prohibition in view
of the purposes of the Company and the relationship of the Members. The Transfer
of any Interest or membership rights in violation of the prohibition contained
in this Section 6.01 shall be deemed invalid, null and void, and of no force or
effect. Any Person to whom an Interest or membership rights are attempted to be
transferred in violation of this Section 6.01 shall not be entitled to vote on
matters coming before the Members, participate in the management of the Company,
act as an agent of the Company, receive distributions from the Company or have
any other rights in or with respect to the Interest.
(b) Notwithstanding anything to the contrary in this Section 6.01, no
Member shall in any event Transfer an Interest, or any portion thereof, if such
Transfer would result in a termination of the Company for Federal income tax
purposes or jeopardize the classification of the Company as a partnership for
Federal income tax purposes, or violate or cause the Company to violate, any
applicable law or governmental rule or regulation, including, without
limitation, any applicable Federal or state securities law.
(c) Notwithstanding anything to the contrary in this Section 6.01, in no
event shall any assignment of an Interest be made to a minor (except as a
beneficiary of a trust or pursuant to the Uniform Transfers to Minors Act) or an
incompetent (except as a beneficiary of a trust).
(d) Each Assignee, as a condition to the admission of such Assignee as a
Member, shall execute and acknowledge such instruments as the Managers shall
determine to be necessary or appropriate to effectuate such admission and to
confirm the agreement of the Assignee to be bound by all the terms and
provisions of this Agreement with respect to such Assignee's Interest. All
reasonable expenses, including attorneys' fees (as such fees are incurred)
incurred by the Company in connection with such admission shall be borne by the
Assignee to the extent such expenses shall not have been paid by the assignor of
the Interest.
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(e) Any Person admitted to the Company as a Member shall be subject to
and bound by all the provisions of this Agreement as if such Person were an
original Member under this Agreement.
(f) Any purported assignment of an Interest that is not made in
accordance with this agreement is hereby declared to be null and void and of no
force or effect whatsoever.
(g) Each Member agrees that it will not Transfer or pledge or encumber
any Interests during the term of this Agreement to a Person engaged in the
business of discovering, developing, manufacturing and/or selling products for
the treatment of cancer or any other products that directly compete with any
products of the Company or any other products which any other Members are then
developing, manufacturing or marketing for sale in Japan.
6.02 RESIGNATION OF MEMBERS
A Member may not resign from the Company prior to the dissolution and
winding up of the Company.
6.03 RIGHTS OF FIRST REFUSAL
Subject to the restrictions on Transfers contained in Section 6.01 above,
if a Member (the "Transferring Member") wishes to Transfer during the term of
this Agreement any or all of its Interests in the Company (the "Transfer
Interests"), the Transferring Member shall first give a written notice (the
"Transfer Notice") to the Company and to the other Members specifying the wish
to transfer the Transfer Interests, the price per Unit at which it wishes to
transfer to the proposed transferee (the "Transfer Price"), the name and address
of the proposed transferee, and containing an irrevocable offer (open to
acceptance for a period of 60 days after the date such Transfer Notice is
received by the Company) to sell the Transfer Interests to the Company and/or
the other Members at the Transfer Price per Unit.
The Company (or its one designee) and the other Members together shall
have the right to purchase all, but not less than all, of the Transfer Interests
at the Transfer Price per Unit, by giving the Transferring Member written notice
of the determination to purchase such Interests, within [**] days of the
Company's receipt of such Transfer Notice. The Company shall have the first
right to purchase all or a portion of such Transfer Interests. The Members other
than the Transferring Member shall have the right (upon notice to the Company)
to purchase their pro rata portion of any remaining Transfer Interests that the
Company does not propose to purchase.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-15-
If a Member elects not to purchase any remaining Transfer Interests, the other
Members (other than the Transferring Member) shall have the pro rata right (upon
notice to the Company) to purchase such Interests. The closing of the purchase
of the Transfer Interests and payment for such Interests to the Transferring
Member pursuant to this Section 6.03 shall take place at such location as the
Transferring Member shall designate within 30 days after the Transferring
Member's receipt of the determination to purchase such Interests. Payment for
such Interests shall be made by check or by wire transfer against duly endorsed
certificates representing the Transfer Interests to be purchased. The Transfer
Interests shall be delivered free and clear of all encumbrances other than those
imposed by this Agreement.
If, at the end of the 60th day after the Transfer Notice is received by
the Company, (i) a notice of acceptance of the offer contained in such Transfer
Notice has not been received by the Transferring Member, or (ii) a notice of
acceptance covering less than all of the Transfer Interests has been received by
the Transferring Member, then the Transferring Member shall have 90 days in
which to transfer to the proposed transferee set forth in the Transfer Notice
any or all of the Transfer Interests at a price not lower than the Transfer
Price per Unit and on terms no more favorable to such transferee than those
contained in the Transfer Notice; provided, however, that such Transfer shall
become effective and such transferee shall become a Member upon the satisfaction
of all the conditions set forth in Section 6.05 (a). If at the end of such 90
day period, the Transferring Member has not completed the transfer of all of the
Transfer Interests, the Transferring Member shall no longer be permitted to
Transfer such Interests pursuant to this Section 6.03 without again complying
with this Section in its entirety. The Transferring Member shall remain liable
to the Company as provided in the Act, regardless of whether such transferee
becomes a Member.
6.04 PERMITTED TRANSFERS
Notwithstanding the foregoing provisions hereof (but subject to compliance
with Sections 6.01(b) - (g), a Member may Transfer all or a part of its
Interests to an Affiliate; provided that such Transfer shall become effective
and such Affiliate shall become a Member upon the satisfaction of all the
conditions set forth in Section 6.05 (a). The Transferring Member shall remain
liable to the Company as provided in the Act, regardless of whether such
Affiliate becomes a Member.
6.05 NEW MEMBERS
(a) New Members of the Company who are Assignees of Interests may be
admitted upon (i) payment of such additional capital as may be required under
Section 4.02; and (ii) signing an addendum to the Agreement, in the form and
substance reasonably satisfactory to the Company, agreeing to be bound to its
terms and reflecting the Capital Contribution of the new Member and the Units
representing the Interest.
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(b) All reasonable expenses, including attorneys' fees (as such fees are
incurred) incurred by the Company in connection with the admission as a new
Member shall be borne by the Assignee to the extent such expenses shall not have
been paid by the assignor of the Interest.
(c) New Members of the Company who are not Assignees of Interests may be
admitted upon (i) payment of such additional capital as may be required under
Section 4.02; (ii) the unanimous vote of the Members approving the admission of
the new Member and the amount of the Capital Contribution to be made by the new
Member; (iii) payment of the Capital Contribution to the Company by the new
Member; and (iv) signing an addendum to the Agreement, in the form and substance
reasonably satisfactory to the Company, agreeing to be bound to its terms and
reflecting the Capital Contribution by the new Member and the Units representing
the Interest.
(d) New Members who have obtained their Interest from a Transferring
Member shall be only be entitled to the distribution to which the Transferring
Member would be entitled.
6.06 EXPULSION
A Member may be expelled by the unanimous vote of the other Members if a
Member materially breaches this Agreement or the Venture Agreement, and such
breach has a material adverse impact on the Company or one or more of the other
Members and remains uncured thirty (30) days after receipt by the Member from
the other Members of notice of such breach. If a Member is expelled, it shall be
entitled to receive, within a reasonable time after expulsion, any distribution
to which that Member was entitled under this Agreement immediately preceding
such expulsion and the fair market value of the Member's Interest in the Company
as of the date of expulsion based upon the Member's right to share in
distributions from the Company (the "Expulsion Payment"). The payment of the
Expulsion Payment to an expelled Member shall be on the effective date of the
expulsion by delivery, at the option of the Company, of either (i) cash or other
immediately available U.S. funds, or (ii) a five-year, non-negotiable promissory
note, bearing interest, payable quarterly, on the outstanding principal balance
at the prime rate established by the Company's primary bank on the Closing Date
and requiring principal to be paid in five equal annual installments beginning
one year after the date of expulsion. Expulsion of a Member shall cause it
immediately to lose all rights as a Member including the right to vote its Units
or otherwise participate in the management of the Company. If the Member is a
Manager it will be deemed to have resigned its position as a Manager, other
officer and member of the Steering Committee as of the effective date of the
expulsion.
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ARTICLE VII
VOTING, QUORUM, AND MEETINGS
7.01 VOTING POWER
Each Unit shall be entitled to one vote upon each matter submitted to vote
|
at a meeting of the Members. If a quorum of the Members is present, the
affirmative vote of the Members holding more than two-thirds (2/3) of the
outstanding Units entitled to vote on the subject matter shall be the act of the
Members, unless the vote of Members holding a greater number is required by the
Act or this Agreement.
7.02 QUORUM
Members holding more than two-thirds (2/3) of the outstanding Units,
represented in person or by proxy, shall constitute a quorum for the transaction
of business; provided, that if Members holding more than two-thirds (2/3) of the
outstanding Units are not present at a meeting, then the Members holding a
majority of the outstanding Units present at such meeting may adjourn the
meeting from time to time without further notice.
7.03 ANNUAL MEETING OF MEMBERS
The annual meeting of Members shall be held on such date as the Managers
shall by resolution specify within a period commencing on January 1 and ending
on March 31 in each year, beginning in 2001. At each annual meeting (i) the
approval of the Company's tax returns and financial statements for the relevant
fiscal year, including without limitation the balance sheet, income statement
and allocation of the profit and loss to the Members, and (ii) the re-election
of the Managers whose term of office will expire upon the close of such meeting,
replacement of any other Manager(s) and/or the election of any additional
Manager(s), if necessary, shall take place and such other business shall be
transacted as may be properly presented to such meeting. If the day fixed for
the annual meeting shall be a legal holiday at the place of the meeting, such
meeting shall be held on the next succeeding business day. If the matters
referred to in (i) and (ii) above shall not be transacted at any annual meeting
held on any . day designated herein for such annual meeting, or at the
adjournment thereof, the Managers shall cause such matters to be transacted at a
meeting of the Members as soon thereafter as may be convenient.
-18-
7.04 MEETINGS OF MEMBERS
Upon the written request of any Member, the Managers shall call a meeting
of the Members. The Managers may also call a meeting of the Members.
7.05 PLACE OF MEETING
The Managers may designate any place, either in or out of the State of
Delaware, including Japan, as the place of meeting for any meeting. If no
designation is made the place of meeting shall be the Company's principal
office. Telephonic meetings are permitted.
7.06 NOTICE OF MEETINGS
Written notice stating the date, time and place of the meeting and a
description of the purpose or purposes for which the meeting is called, shall be
mailed, not fewer than ten (10) nor more than thirty (30) days before the date
of the meeting, by or at the direction of the Managers to each Member of record
entitled to vote at the meeting. If mailed, such notice is effective when mailed
addressed to the Member's address shown in the Company's current record of
Members, with postage prepaid.
7.07 ACTION WITHOUT A MEETING
Any action required or permitted to be taken by the Members by vote may be
taken without a meeting by written consent of the Members owning the requisite
number of Units required to approve such action. The consent shall set forth the
actions so taken and be signed by the Members owning the requisite Units
required to approve such action.
7.08 WAIVER OF NOTICE
(a) A Member may waive any notice required by this Agreement before or
after the date and time stated in the notice. The waiver must be in writing, be
signed by the Member entitled to the notice, and be delivered to the Managers.
(b) A Member's attendance at a meeting: (i) waives objection to lack of
notice or defective notice of the meeting, unless the Member at the beginning of
the meeting or promptly upon the Member's arrival objects to holding the meeting
or transacting business at the meeting, and (ii) waives objection to
consideration of a particular matter at the meeting that is not within the
purpose or purposes described in the meeting notice, unless the Member objects
to considering the matter when it is presented.
-19-
7.09 AVOIDANCE OF DEADLOCKS
The Members agree to act (and will use reasonable efforts to cause the
Managers to act) reasonably and in good faith to avoid Deadlocks (defined below)
at either the Manager or Member level.
7.10 DISSOLUTION IN THE EVENT OF DEADLOCK
For purposes hereof, a "Deadlock" shall be deemed to exist if a majority
of the Managers or Members holding more than two-thirds (2/3) of the outstanding
Units (or such higher specified percentage of Members or Managers as is required
for approval of a particular matter) are unable to agree on a mutually
satisfactory resolution of any matter relevant to the Company and its operations
for a period of 60 days after such matter has first been proposed by a Member or
Manager, as the case may be.
In the event of a Deadlock, any of the Members may cause the dissolution
of the Company by providing notice to the Company of a request for such
dissolution. Upon receipt of such notice and, in the event a Deadlock exists,
the Company shall be dissolved in accordance with Article IX hereof.
ARTICLE VIII
RECORDS; FINANCIAL AND FISCAL AFFAIRS; TAX REPORTING
8.01 RECORDS AND ACCOUNTING
(a) The books of account of the Company shall be maintained at the
Company's principal place of business. The Company shall prepare its financial
statements using generally accepted accounting principles, consistently applied.
(b) The Managers will maintain a current list of the names and last
known addresses of each Member and the other Company records described in
Section 18-305 of the Act at the Company's principal office. Upon request, for
any purpose reasonably related to the Member's interest as a Member, the
Managers will furnish a copy of such information to a Member or its
representative. Any Member may inspect and copy or obtain from the Managers the
financial records of the Company and its tax returns. A Member shall give the
Managers at least ten (10) business day's prior written notice for any
inspection and copying permitted pursuant to this subsection by the Member or
its authorized attorney or agent.
-20-
8.02 TAX INFORMATION
The Managers will use their best efforts to cause to be delivered, as soon
as practical after the end of each fiscal year of the Company, to the Members
and Persons who were Members during such fiscal year all information concerning
the Company necessary to enable such Member to prepare such Member's Federal,
state and any other income tax returns for such fiscal year, including a
statement indicating such Member's share of Profits, Losses, deductions and
credits for such fiscal year for Federal, state and other income tax purposes,
and the amount of any distribution made to or for the account of such Member
during such fiscal year pursuant to this Agreement.
8.03 TAX RETURNS
The Managers shall cause income tax returns for the Company to be prepared
and timely filed in accordance with applicable law; provided, however, that any
such income tax returns shall not be filed unless approved at the relevant
annual meeting of the Members or otherwise approved by Members holding more than
two-thirds (2/3) of the outstanding Units.
8.04 ELECTIONS
(a) The Managers, in their discretion, may elect to adjust the basis of
the assets of the Company for Federal income tax purposes in accordance with
Section 754 of the Code in the event of a distribution of Company property as
described in Section 734 of the Code or a transfer by any Member of the Units of
such Member in the Company as described in Section 743 of the Code.
(b) The Managers, at any time and from time to time, may also make such
other tax elections as they deem necessary or desirable, in their discretion.
8.05 INTERIM CLOSING OF THE BOOKS
There shall be an interim closing of the books of account of the Company
(i) at any time a taxable year of the Company shall end pursuant to the Code,
and (ii) at any other time determined by the Managers to be required by good
accounting practice or otherwise appropriate under the circumstances.
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8.06 FISCAL YEAR
The fiscal year of the Company shall begin on April I of each year and end
on March 31 of the following year. The fiscal year in which the Company shall
terminate shall end on the date of termination of the Company.
8.07 TAX MATTERS PARTNER
BioNumerik shall be the "Tax Matters Partner" within the meaning of
Section 6231(a)(7) of the Code and is authorized to exercise the functions of a
Tax Matters Partner under the Code. The Tax Matters Partner shall be reimbursed
for all reasonable expenses associated with its duties as Tax Matters Partner.
ARTICLE IX
DISSOLUTION
9.01 EVENTS REQUIRING DISSOLUTION
The Company shall be dissolved upon the happening of any of the following
|
events:
(a) termination in accordance with expiration of its period of duration
provided in Section 1.03 hereof;
(b) the occurrence of any event which would make unlawful under the laws
of Delaware or the United States of America the continuing existence of the
Company;
(c) the unanimous vote of the Members;
(d) an event of Dissociation, as defined in Section 9.02, occurring with
respect to any Member unless the business of the Company is continued by the
consent of all of the remaining Members within 90 days after the event of
dissociation;
(e) the entry of a decree of judicial dissolution pursuant to Section
18-802 of the Act; or
(f) notice of a Deadlock and a request for dissolution as provided in
Section 7.10 hereof;
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9.02 EVENTS OF DISSOCIATION
A Member ceases to be a Member of the Company upon the occurrence of any
of the following events:
(a) The Member is expelled as a member in accordance with Section 6.06
of this Agreement;
(b) The Member (i) makes an assignment for the benefit of creditors,
(ii) files a voluntary petition in bankruptcy, (iii) is adjudged bankrupt or
insolvent or has entered against the Member an order for relief in any
bankruptcy or insolvency proceeding; (iv) files a petition or answer seeking for
that Member any reorganization arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute, law, or
regulation, (v) seeks, consents to, or acquiesces in the appointment of a
trustee for, receiver for, or liquidation of the Member or of all or any
substantial part of the Member's properties, or (vi) files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against the Member in any proceeding described in this subsection;
(c) The continuation of any proceeding against the Member seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation, for 120
days after the commencement thereof, or the appointment of a trustee, receiver,
or liquidator for the Member or all or any substantial part of the Member's
properties without the Member's agreement or acquiescence, which appointment is
not vacated or stayed for 120 days or, if the appointment is stayed, for 120
days after the expiration of the stay during which period the appointment is not
vacated;
(d) In the case of a Member who is an individual, the individual's, (i)
death (provided that in case of Dr. Kanazawa's death, an event of dissociation
shall occur only if he or his heirs fail to Transfer his Interest to Grelan
pursuant to Section 1.05); or (ii) adjudication by a court of competent
jurisdiction as incompetent to manage the individual's person or property;
(e) In the case of a Member who is acting as a Member by virtue of being
a trustee of a trust, the termination of the trust;
(f) In the case of a Member that is a partnership or another limited
liability company, the dissolution and commencement of winding up of the
partnership or limited liability company;
-23-
(g) In the case of a Member that is a corporation, the dissolution of
the corporation or the revocation of its charter;
(h) In the case of a Member that is an estate, the distribution by the
fiduciary of the estate's entire interest in the Company; or
(i) In the case of a Member that is a company organized under the laws
of any country other than the U.S.A. or an individual residing outside the
U.S.A., the Company conducts any commercial activities in the U.S.A. which would
result in requiring such Member to file U.S. Federal or state income tax returns
solely by virtue of holding any Interest in the Company.
9.03 RIGHTS OF MEMBERS UPON CONTINUATION
If the Company is continued under Section 9.01 (d) hereof following
dissolution:
(a) A Person ceasing to be a Member, or the legal representative or
other successor to the Interest of that Member, shall be entitled to receive, in
liquidation of the Member's Interest:
(1) The distributions, if any, which that Member is entitled to
receive under this Agreement; or
(2) Within a reasonable time after the Person ceases to be a
Member, the fair market value of the Interest in the Company as of the
date the Person ceased to be a Member; and
(b) The Members of the Company continuing the business following
dissolution will be deemed to have entered into an operating agreement
containing the same terms and conditions as those contained in this Agreement in
effect immediately prior to the dissolution, except that the Members bound by
the operating agreement shall be only those Members whose Interests are not
required to be liquidated pursuant to this Agreement.
9.04 WINDING UP
The remaining Members may wind up the affairs of the Company.
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9.05 AUTHORITY OF MANAGERS AFTER DISSOLUTION
Following dissolution, if the business or affairs of the Company are not
continued under Section 9.01(d), a Manager can bind the Company:
(a) By any act appropriate for winding up the affairs of the Company or
completing transactions unfinished at the time of dissolution, unless the
Manager purporting to act on behalf of the Company does not have the authority
to do so and the person with whom such Manager is dealing has actual knowledge
or actual notice of the absence of authority;
(b) In any transaction which would have been binding on the Company had
it not been dissolved; provided, that the person with whom a Manager is dealing
does not have actual knowledge or actual notice of the dissolution; and
(c) The foregoing notwithstanding, the Managers and their assignees, in
carrying out such winding up and distribution, shall have full power and
authority to sell the Company's assets, or any part thereof, or to distribute
the same in kind to the Members. Any assets distributed in kind shall be subject
to all agreements relating thereto that, by the terms thereof, survive the
termination of the Company.
9.06 DISTRIBUTION
The fair market value of the assets of the Company shall be determined by
the Managers, with the fair market value of any assets held by the Company
(other than cash) being determined by an independent appraiser selected by the
Managers. Thereupon, the assets of the Company shall be distributed in the
following manner and order: (i) to the claims of all creditors of the Company,
including Members who are creditors, to the extent permitted by law, in
satisfaction of liabilities of the Company, other than liabilities for
distributions to Members; (ii) to Members and former Members in satisfaction of
liabilities for interim distributions and distributions resulting from expulsion
of a Member, and (iii) after giving effect to the allocations set forth in
Article V hereof, to the Members in proportion to their respective Interests,
provided that in the event of any conflict between Article V and this Section
9.06, this Section 9.06 shall be controlling. Each such Member entitled to a
distribution of any assets of the Company shall receive such Member's share of
such assets in cash or in kind, and the portion of such share that is received
in cash may vary from Member to Member, all as the Managers in their discretion
may decide. If distributions to any Member upon termination of the Company are
insufficient to return to such Member the full amount of such Member's Capital
Contribution, such Member shall have no recourse against the Managers, the
Company or any other Member.
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ARTICLE X
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
10.01
"Affiliate" shall mean any entity which directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with another entity. A company shall be deemed to have control of
another if it owns directly or indirectly a majority of the voting shares of or
is entitled directly or indirectly to appoint a majority of the directors of the
other company.
10.02
"Agreement" shall mean this Operating Agreement, as originally executed or
as amended, modified, supplemented or restated from time to time.
10.03
"Assignee" shall mean, prior to its admittance as a Member, a Person to
whom a Member's Interest was transferred.
10.04
"Capital Contribution" shall mean in the case of any Member as of any date
of determination, the aggregate amount of cash, property, or services rendered,
or a promissory note or other binding obligation to contribute cash or property
or perform services that such Member shall have contributed to the Company on or
prior to such date and a Member's share of any of the Company's liabilities as
determined in accordance with the Code and Treasury Regulations (or, if such
Member is not the original holder of the Interest of such Member, the Capital
Contribution with respect to the Interest of such Member held by the original
holder of such Interest). In the event that any capital is returned to a Member,
such Member's Capital Contribution shall be adjusted to reflect such return.
-26-
10.05
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time and any successor statute or subsequent codification or recodification
of the federal income tax laws of the United States.
10.06
"Company" shall mean KI Pharmaceuticals, L.L.C., as such limited liability
company may from time to time be constituted.
10.07
"Interest" shall mean, in the case of any Member at any time, the ratio
that such Member's Units bears to all outstanding Units. An "Interest" does not
include the right to participate in management of the Company and vote the Units
issued to the Member in respect of the Interest.
10.08
"Losses" shall mean the net loss of the Company for a given reporting
period, provided, however, that any items which are specifically allocated
pursuant to Section 5.05 shall not be taken into account in computing Losses.
10.09
"Percentage Interests for Venture Products BN Activities" means (a) [**]
to BioNumerik, (b) [**] to Grelan, and (c) [**] to Dr. Hashime Kanazawa.
10.10
"Percentage Interests for Venture Products GR Activities" means (a) [**]
to BioNumerik, (b) [**] to Grelan, and (c) [**] to Dr. Hashime Kanazawa.
10.11
"Person" shall mean an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an estate, an unincorporated
organization or any other entity or a government or any department or agency
thereof.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-27-
10.12
"Profits" shall mean the net income of the Company for a given reporting
period, provided, however, that any items which are specifically allocated
pursuant to Section 5.05 shall not be taken into account in computing Profits.
10.13
"Treasury Regulations" shall mean the regulations of the United States
Department of the Treasury pertaining to the income tax, as from time to time in
force.
10.14
"Unit" shall mean the equity units issued by the Company to its Members in
exchange for Capital Contributions, which represent the Member's Interest in the
Company.
10.15
"Venture Products BN Activities" means license fees or other up-front or
milestone payment amounts paid by a third party to the Company for distribution,
marketing and/or sales rights to Venture Products BN in the Territory.
10.16
"Venture Products GR Activities" means license fees or other up-front or
milestone payment amounts paid by a third party to the Company for distribution,
marketing and/or sales rights to Venture Products GR in the Territory.
10.17
"Venture Agreement" means the Joint Venture Agreement, dated as of August
30, 2000, between Grelan and BioNumerik, and as amended to include the Company
as a party.
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ARTICLE XI
MISCELLANEOUS
11.01 NOTICES
Any notice, offer or other communication required or permitted to be given
or made hereunder shall be in writing and will be deemed to have been
sufficiently given or made when mailed by first-class or registered air mail,
postage prepaid or made when delivered personally or by courier service to the
party (or an officer of the party) to whom the same is directed.
11.02 POSSIBLE RESTRICTIONS
Notwithstanding anything to the contrary contained in this Agreement, in
the event of (a) the enactment (or imminent enactment) of any legislation, (b)
the publication of any temporary or final regulation by the United States
Department of the Treasury, (c) any ruling by the Internal Revenue Service or
(d) any judicial decision, that, in any such case, in the opinion of counsel for
the Company, would result in the taxation of the Company as an association
taxable as a corporation or would otherwise result in the Company being taxed as
an entity for federal income tax purposes, then the Managers may impose such
restrictions as may be required, in the opinion of counsel, to prevent the
Company for federal income tax purposes from being taxed as an association
taxable as a corporation or otherwise as an entity, including, without
limitation, making any amendments to this Agreement as the Managers in their
sole discretion may determine to be necessary or appropriate to impose such
restrictions.
11.03 GOVERNING LAW; SUCCESSORS
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware and, subject to the restrictions on
transferability set forth in this Agreement, shall bind and inure to the benefit
of the heirs, executors, personal representatives, successors and assigns of the
parties hereto. The rights and liabilities of the Members under this Agreement
shall be as provided by Delaware law.
11.04 ENTIRE AGREEMENT
This Agreement is the sole operating agreement of the Company and
constitutes the entire agreement among the parties with respect to the subject
matter hereof; this Agreement supersedes any prior agreements or understandings,
oral or written, among the parties with respect to the limited liability company
formed herein all of which are hereby canceled. This Agreement may not be
modified or amended except as provided in this Agreement.
-29-
Notwithstanding the foregoing, the Venture Agreement shall remain and continue
in full force and effect after the date hereof in accordance with its terms.
11.05 HEADINGS, ETC.
The Article and Section headings in this Agreement, and the Table of
Contents included herewith, are inserted for convenience of reference only and
shall not affect interpretation of this Agreement. Whenever the context shall
require, each term stated in either the singular or plural shall include the
singular and the plural, and masculine or neuter pronouns shall include the
masculine, the feminine and the neuter.
11.06 NO WAIVER
No failure or delay on the part of any Member in exercising any rights
under this Agreement, or in insisting on strict performance of any covenant or
condition contained in this Agreement, shall operate as a waiver of any of such
Member's rights hereunder.
11.07 LEGENDS
If any certificate evidencing a Member's Units shall be issued, such
certificate shall bear such legend or legends as may be required by applicable
Federal or state laws, or as may be deemed necessary or appropriate by the
Managers to reflect restrictions upon transfer contemplated herein.
11.08 COUNTERPARTS
This Agreement may be executed in several counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
instrument.
11.09 CREDITORS
None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditors of the Company.
-30-
IN WITNESS WHEREOF, all of the Members have executed this Agreement
effective as of the 22nd day of September, 2000.
GRELAN PHARMACEUTICAL CO., LTD.
By: /s/ H. KANAZAWA
----------------------------------
Hashime Kanazawa, Ph.D.
C.O.O. & Vice President - Director
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BIONUMERIK PHARMACEUTICALS, INC.
By: /s/ FREDERICK H. HAUSHEER
----------------------------------
Frederick H. Hausheer, M.D.
Chairman & Chief Executive Officer
|
HASHIME KANAZAWA, PH.D.
/s/ H. KANAZAWA
----------------------------------------
|
-31-
SCHEDULE I
TO
OPERATING AGREEMENT
OF
KI PHARMACEUTICALS, L.L.C.
Initial Capital Contributions
Member Contribution Units Interests
------ ------------ ----- ---------
Grelan Pharmaceutical Co., Ltd. The grant of 490 49%
Ogura Bldg. 5F licenses and rights
Nihonbashi Kobunacho 6-6 and the obligations
Chuo-ku, Tokyo 103-0024 to make payments
Japan and take other
actions described in
the Venture
Agreement.
BioNumerik Pharmaceuticals, Inc. The grant of 500 50%
8122 Datapoint Drive, Suite 1250 licenses and rights
San Antonio, Texas 78229 and the obligations
to make payments
and take other
actions described in
the Venture
Agreement.
Hashime Kanazawa, Ph.D. $1,000.00 10 1%
Ogura Bldg. 5F
Nihonbashi Kobunacho 6-6
Chuo-ku, Tokyo 103-0024
Japan
|
-32-
EXHIBIT 10.4
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
AGREEMENT
FOR
MANUFACTURING AND SUPPLY OF BNP7787
Made as of February 10, 2004 (the "Effective Date")
by and between
BIONUMERIK PHARMACEUTICALS, INC.,
(hereinafter referred to as "BioNumerik"),
a corporation duly organized and validly existing under the laws of the State
of Texas with its principal offices at Suite 1250, 8122 Datapoint Drive,
San Antonio, TX 78229, USA
and
RHODIA PHARMA SOLUTIONS INC.
,
a corporation duly organized and validly existing under the laws
of Delaware, with its principal offices at 256 Prospect Plains Road, Cranbury,
NJ 08512-7500, USA (Rhodia Pharma Solutions Inc., together
with its subsidiary Rhodia Pharma Ltd., are hereinafter
collectively referred to as "RPS")
1 DEFINITIONS
Unless otherwise specifically set forth herein, the following terms
shall have the meanings set forth below:
1.1 Compound
Shall mean the compound 2,2'-Dithio-Bis-Ethane sulfonate, disodium
salt, also known as BNP7787 or Tavocept (TM).
1.2 Confidential Information
Shall mean all information, whether technical or non-technical, trade
secrets, discoveries, data, drawings, techniques, documents, models,
samples and know-how, whether or not patented or patentable, owned or
possessed by a Party on the date of this Agreement or later developed
by them.
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1.3 Party
Shall mean BioNumerik or RPS, and when used in the plural form both
BioNumerik and RPS.
1.4 Product(s) or Finished Dosage Form
Shall mean any pharmaceutical composition or formulation containing the
Compound as the pharmacologically active ingredient.
1.5 Specifications
Shall mean the specifications for the Compound attached on Annex 2
hereto.
2 AGREEMENT SCOPE AND MANUFACTURE AND SUPPLY OF COMPOUND
2.1
(a) Phase 1 - Technology Transfer and Familiarization.
Upon the signing of this Agreement by the Parties, RPS will undertake
receipt of the technology transfer from BioNumerik and laboratory
familiarization with the BNP7787 process as necessary to prepare the
Compound in accordance with the Specifications, all as described in the
Project Description (the "Project Description") attached hereto as Annex 1.
The price for this Phase 1 material will be as described in the Project
Description attached hereto as Annex 1 to be paid as described in Section
2.3 hereof.
(b) Phase 2 - Site Qualification.
Upon successful completion of Phase 1 and following receipt of written
authorization from BioNumerik to proceed with Phase 2, RPS will complete
Phase 2: Site Qualification, during which RPS will prepare under current
U.S. Food and Drug Administration ("FDA") Good Manufacturing Practices
(cGMP) a number of [**] target batch size qualification batches in order
to assure meeting the critical success criteria (the "Success Criteria")
included in Annex 10 hereto. Should the first qualification batch be
prepared under conditions deemed successful based on the Success Criteria,
then the second batch may be eliminated and BioNumerik shall only be
required to pay for such first batch. Should more than two batches be
required in order to meet the Success Criteria, all batches prepared in
excess of the first two batches will be done so at the expense of RPS
without additional cost to BioNumerik. The price for these Phase 2 batches
will be as described in the Project Description attached hereto as Annex 1
to be paid as described in Section 2.3 hereof.
(c) Phase 3 - Validation Batches.
Upon successful completion of Phase 2, RPS will complete Phase 3:
Validation Batches, during which RPS will prepare under cGMP three (3)
[**] validation
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[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
batches as described in the Project Description. The price for these Phase
3 batches will be as described in the Project Description attached hereto
as Annex 1 to be paid as described in Section 2.3 hereof.
(d) Phase 4 - Commercial Batches.
Upon successful completion of Phase 3, RPS will prepare under cGMP
commercial batches of the Compound with quantities and delivery schedule to
be agreed between BioNumerik and RPS. The price for the commercial batches
will be as described in the Project Description attached hereto as Annex 1.
It is expected that if BioNumerik gives RPS [**] prior notice of a need for
a commercial batch, RPS will do its best to fulfill the order within such
time frame. However, RPS cannot guarantee delivery of Compound [**] prior
notice, but in any event RPS will deliver Compound within a maximum of six
months after notification by BioNumerik, except in the event of an
occurrence of a Force Majeure event described in Section 9.4.
2.2 (a) All Compound shall be manufactured and delivered in accordance with
the Compound Specifications indicated in Annex 2. These Specifications
will be obtained from BioNumerik, or will be developed in conjunction
and with the approval of BioNumerik. Any changes in the Specifications
will be agreed between BioNumerik and RPS prior to scale-up or
commencing the production. In addition, manufacturing of all Compound
by RPS (other than Compound manufactured as part of the Phase 1 Work)
will be conducted in compliance with relevant current U.S. Food and
Drug Administration ("FDA") Good Manufacturing Practices ("cGMP") and
International Conference on Harmonisation ("ICH") guidelines.
(b) Unless otherwise already specified in the Annexes hereto, the batch
records; specifications for raw materials, intermediates and final
products; and analytical test methods for all materials will be
delivered to RPS by BioNumerik subsequent to the signing of this
Agreement or BNPI will develop in conjunction with RPS any additional
requirements. All batch records and production documentation specific
to the Compound must be approved in writing by BioNumerik prior to use.
Any changes in the production flow steps, analytical methods,
production records, test methods, Specifications, or equipment used by
RPS will require prior written approval by BioNumerik. RPS will provide
a Certificate of Analysis and executed batch record with each shipment
that describes product specifications and results.
(c) All starting material and other raw materials necessary for the
work hereunder will be supplied by RPS without additional charge to
BioNumerik. RPS will have back-up starting material and raw materials
available should BioNumerik decide to proceed with an additional batch
of Compound in the event a batch fails. If a batch fails to meet
Specifications due to factors under the control of RPS or is rejected
by BioNumerik or
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
RPS due to critical failure to be manufactured in accordance with cGMP,
and BioNumerik requests RPS to manufacture an additional batch of
Compound or reprocess the batch that is out of specification ("OOS"),
then RPS will conduct such manufacturing or reprocess at no additional
charge to BioNumerik and will schedule the manufacture of such
additional batch of Compound as soon as practical (and in any event
within 30 days of BioNumerik's request, unless the manufacture within
such time period is prevented by catastrophic equipment failure or
other Force Majeure event described in Section 9.4). The specifications
of the starting materials for manufacture of the Compound are as set
forth on Annex 3 to this Agreement.
(d) Procedures for release of the Compound have been agreed to by
BioNumerik and RPS and are attached on Annex 5 hereto. The procedures
to be followed upon the occurrence of an Out of Specification (OOS) or
Out of Trend (OOT) event are contained in the standard operating
procedures (SOPs) for the RPS [**] facility. Current copies of such
SOPs have been previously provided by RPS to BioNumerik and RPS will
promptly provide BioNumerik with any changes to such SOPs. These
procedures contain specific timelines for investigation of OOS and OOT
events. Timelines to be followed for a batch failure due to
circumstances other than OOS and OOT events are also contained in the
SOPs for the RPS Annan, Scotland facility. RPS will retain samples of
each API batch of Compound and samples of all solid raw materials and
intermediates used in the manufacturing for a period of at least 5
years following completion of the manufacturing, provided that
commodity solid raw materials will be maintained for a period of at
least one month following completion of the manufacturing.
(e) RPS shall be responsible for conducting an audit program for
vendors (including testing facilities) utilized by RPS in connection
with manufacturing of the Compound as required to comply with cGMP and
ICH Guidelines (including ICH guideline Q7A). RPS will provide
BioNumerik with a copy of RPS' audit procedures and analytical approval
process, and any updates or amendments to such procedures and process.
BioNumerik has the right, during any audits of RPS conducted by
BioNumerik, to review the records for all raw material and starting
material vendor audits conducted by RPS with respect to raw materials
and starting materials (as defined by ICH guidelines) for the Compound.
In addition, BioNumerik shall also have the right to review the
qualification records (as required by cGMP) of the vendors for the
starting materials for the Compound, provided the starting materials
are produced under cGMP. RPS shall promptly inform BioNumerik in the
event of a concern with the quality or manufacturing compliance with
respect to a raw material used in the manufacture of the Compound and
RPS will coordinate with BioNumerik to assure a prompt resolution of
any such concern. The results of all audits that have occurred that
relate to the materials to be used in the manufacture of the Compound
have previously been provided to BioNumerik, and RPS will promptly
provide to BioNumerik the results of
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
all such audits conducted in the future. BioNumerik and RPS agree that
the materials listed on Annex 9 are the critical raw materials in
connection with the manufacture of the Compound.
2.3 BioNumerik will pay RPS the payment amounts described in the Project
Description in the following manner:
(i) [**] of the Phase 1 payment amount will be paid upon commencement
of the Project (as such term is defined in the Project
Description) with the remainder to be paid upon completion of
Phase 1, provided that if Phase 1 in not completed within eight
(8) weeks of commencement (not including time necessary for
receipt of raw materials), then the remaining Phase 1 amount
shall be paid upon receipt of Phase 2 Compound amount satisfying
the required Specifications; and
(ii) [**] of the Phase 2 payment amount will be paid upon commencement
of Phase 2 of the Project with the remainder to be paid upon
receipt by BioNumerik of Phase 2 Compound satisfying the required
Specifications and meeting the Success Criteria; and
(iii) Assuming receipt by BioNumerik by the end of 2004 of Phase 3
validation batches satisfying the required Specifications,
payment for the Phase 3 work will be paid in January, 2005,
except that payment for the development work in support of Phase
3 will be paid upon receipt by BioNumerik of Phase 3 material
satisfying the required Specifications in the amounts required
for such Phase 3 batches; and
(iv) Notwithstanding the Project Description and unless otherwise
agreed in writing by BioNumerik in an amendment to this
Agreement, (a) the price for Phase 1 of the Project shall not
exceed [**] and (b) the total price for Phase 2 of the Project
shall not exceed [**] provided that RPS shall promptly notify
BioNumerik at such time as the costs incurred for Phase 2 of the
Project exceed [**] and any expenditures or work by RPS in excess
of such [**] amount shall only be incurred following the written
approval of BioNumerik.
(v) Notwithstanding any other provision of the Agreement or the
Project Description, BioNumerik shall have no obligation to pay
for (and RPS shall promptly refund to BioNumerik amounts paid to
RPS for) any Phase 2 Compound amount, any Phase 3 Compound
amount, or any Phase 4 Compound amount unless such Compound
amount (i) is manufactured by RPS in compliance with current U.S.
FDA Good Manufacturing Practices (cGMP), ICH guidelines, the
manufacturing procedures specified herein, and in accordance with
the other manufacturing procedures and information provided by
BioNumerik to RPS, and (ii) is manufactured by RPS in accordance
with the Specifications.
2.4 Except as otherwise specified above, payment for all Compound purchased
from RPS by BioNumerik in accordance with this Agreement shall be made
within 30 days after goods satisfying the required Specifications are
shipped, by wire transfer in accordance with Annex 6.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
2.5 RPS shall maintain all of the appropriate specifications and standard
operating procedures related to the manufacturing of the Compound.
These will be treated as controlled documents and will be maintained
utilizing a suitable document control procedure to ensure proper
issuance and change, respectively. During the term of this Agreement
and for a period of at least five years thereafter, RPS shall maintain
records of inspection and testing, lab notebooks and procedures made in
connection with the manufacturing work conducted under this Agreement.
In addition, RPS is in a position to either (i) prepare a Drug Master
File (DMF) for BNP7787 for the United States, the European Union, and
Japan, or (ii) provide BioNumerik with the necessary information so
that the same information that would be included in the DMF can be
included in the NDA or equivalent filing in the United States, the
European Union, and Japan. RPS will prepare a DMF for BNP7787 upon
request by BioNumerik and after reaching agreement with BioNumerik on
the amount to be paid to RPS for preparing the DMF (which amount is
roughly estimated by RPS to be approximately [**] for a U.S. DMF). If,
instead of requesting RPS to actually prepare a DMF, BioNumerik
requests RPS to simply provide the information to BioNumerik for
inclusion in the NDA or equivalent filing in the United States, the
European Union, and Japan as described in clause (ii) of the fourth
sentence of this paragraph, then RPS will provide such information
without additional charge to BioNumerik.
2.6 RPS shall keep BioNumerik regularly informed of the status and progress
of all stages of Phases 1, 2, 3, and 4, including manufacturing,
through regular telephone or e-mail updates and through written
summaries. During all periods that RPS is conducting any manufacturing
for BioNumerik, RPS shall perform an annual product review, including a
review of production history, deviations (if any), out of specification
events, investigation programs adopted and the outcome of any
investigations, any reprocessing conducted, ongoing stability results
if generated at an RPS site, and site availability for the upcoming
year. RPS shall communicate the results of its review to BioNumerik in
writing.
2.7 RPS shall be responsible for complying with all transport regulations
applicable to the provision of the Compound to BioNumerik in accordance
with this Agreement.
2.8 The Compound will be produced in the A3 plant at RPS's [**] facility.
2.9 RPS shall promptly provide BioNumerik with written proof of any
destruction of intermediates or API either upon reaching the expiry
date or in the event RPS is requested by BioNumerik to destroy any such
materials.
2.10 In the event of any disqualification of an RPS site relating to the
manufacturing by any regulatory agency, RPS shall be responsible for
the cost of any raw materials, intermediates or API produced up to such
time.
3 INSPECTIONS AND CONTROLS
3.1 Subject to confidentiality obligations contained in Section 7, RPS
agrees, without additional charge to BioNumerik, to allow inspections
of its manufacturing facilities in which the Compound is being
manufactured, analyzed or tested, by representatives of BioNumerik or
its agents (including inspections by regulatory authorities) during
normal working hours upon prior written notice to RPS, which notice
will occur at least three days in advance of the inspection, unless not
possible with respect to an inspection by a regulatory agency. RPS
shall grant access to such premises and to the documentation necessary
for or appropriate to the manufacturing and quality control of the
Compound. During such visits, RPS shall make sure that at least one
technical person from each of Quality Assurance, Quality Control,
project teams, and, if reasonably possible, business
development/coordination is present to answer questions or discuss
matters of concern with the BioNumerik personnel conducting such audit
or inspection.
3.2 RPS shall ensure all relevant and/or critical manufacturing, test and
inspection equipment is maintained under a documented calibration and
maintenance program. This includes providing equipment calibration
certifications as required.
3.3 RPS will maintain environmental controls, including particulate and
bioburden monitoring, pest controls and housekeeping procedures in
accordance with FDA cGMP and ICH guidelines. The use of supplies of
process water, air and particulate handling, etc., for cGMP manufacture
of the Compound, shall be consistent with relevant FDA cGMP
specifications and ICH guidelines.
3.4 RPS shall maintain a quality control department, which is a distinct
department separate from manufacturing. RPS quality control/quality
assurance will perform incoming, in-process and finished product
inspections, review records, perform line clearance inspections,
maintain batch history records, provide batch history records for
review and accuracy and completeness and provide product release
services. RPS
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[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
will promptly inform BioNumerik of any changes in management control
related to the work conducted hereunder.
3.5 The conditions to be maintained for the storage of API, raw materials,
and intermediates are set forth on Annex 7.
3.6 RPS will promptly notify BioNumerik of any FDA or other material
regulatory inspection of RPS related to the Compound, and will promptly
provide BioNumerik with a copy of documentation relating to such
inspection. BioNumerik shall have the right to communicate at any time
with the FDA or any regulatory agency or body regarding such matters,
provided any communication with the FDA regarding potential inspection
of RPS' plants should be done in coordination with RPS. BioNumerik will
provide appropriate support for any such inspection, including data and
information relating to critical parameters and justification for the
process for manufacturing the Compound.
3.7 At all times during the term of this Agreement, each of the parties
shall carry and keep in force a general liability Insurance policy, in
support of their liability obligations to one another hereunder. The
policy maintained by RPS shall afford limits of not less than [**] for
each occurrence and not less than [**] in the annual aggregate in
respect of products and completed operations liability. The policy
maintained by BioNumerik shall afford limits of not less than [**] for
each occurrence and not less than [**] in the aggregate. In the event
that such policy is written on a claims-made basis, such policy shall
provide no less than twelve (12) months extended reporting period from
the date of termination of this Agreement. A Certificate of Insurance
evidencing RPS's coverage and a Certificate of Insurance evidencing
BioNumerik's coverage are attached hereto as Annex 8 hereto.
4 PRODUCT WARRANTIES
4.1 RPS warrants and represents that the Compound manufactured by RPS and
delivered to BioNumerik, its affiliates or sub-licensee(s) hereunder
shall conform to the Specifications (except as otherwise provided in
Section 2.2 hereof) when delivered and, when expressly required by the
Project Description, be manufactured in accordance with all applicable
laws and regulations relating to the manufacture of the Compound,
including but not limited to, current U. S. FDA Good Manufacturing
Practices (cGMP) and ICH guidelines. RPS will maintain at least 25 to
50 grams of the Compound from each batch produced as a retained sample.
Such retained sample will be maintained at RPS' facility and RPS will
store such retained sample under suitable storage conditions adequate
for the purpose of development as specified by BioNumerik. RPS further
represents and warrants that RPS is not aware that the manufacturing
process for the Compound or the Product or the use of such process
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[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
infringes or will infringe the claims under any patent or other
intellectual property right of RPS or any third party; RPS will
immediately inform BioNumerik if it should become aware of any such
infringement or potential infringement.
EXCEPT FOR THE FOREGOING, RPS MAKES NO WARRANTY OR REPRESENTATION OF
ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND
ANY REPRESENTATION OR ANY WARRANTY THAT USE OF THE PROCESS FOR
MANUFACTURE OF THE PRODUCT OR USE OR SALE OF PRODUCT, WHETHER OR NOT
SUCH PRODUCT IS MADE BY THE PROCESS FOR MANUFACTURE OF THE PRODUCT,
WILL NOT INFRINGE THE CLAIMS UNDER ANY PATENT OR OTHER INTELLECTUAL
PROPERTY RIGHT OF RPS OR ANY THIRD PARTY.
Limitations. RPS'S SOLE LIABILITY AND BIONUMERIK'S EXCLUSIVE REMEDY IN
THE CASE OF PRODUCT DELIVERED HEREUNDER TO BIONUMERIK THAT DOES NOT
MEET PRODUCT SPECIFICATIONS SHALL BE, AT RPS'S OPTION, TO USE
COMMERCIALLY REASONABLE EFFORTS TO REPLACE THE DEFECTIVE PRODUCT WITH
PRODUCT THAT CONFORMS WITH THE PRODUCT SPECIFICATIONS OR TO REFUND THE
FEES AND CHARGES PAID TO RPS FOR THE SERVICES RELATED TO SUCH
NON-CONFORMING PRODUCT. EXCEPT IN THE CASE OF GROSS NEGLIGENCE OR
INTENTIONAL MISCONDUCT ON THE PART OF RPS, RPS'S LIABILITY FOR ANY
CLAIM OF BIONUMERIK RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE
AGGREGATE FEES AND CHARGES PAID TO AND RECEIVED BY RPS FOR THE SERVICES
PERFORMED TO WHICH ANY SUCH CLAIM RELATES. IN NO EVENT SHALL EITHER RPS
OR BIONUMERIK BE LIABLE TO THE OTHER FOR INDIRECT, SPECIAL,
CONSEQUENTIAL (INCLUDING WITHOUT LIMITATION LOST PROFITS), PUNITIVE,
INCIDENTAL OR SIMILAR DAMAGES IN ANY WAY ASSOCIATED WITH THIS
AGREEMENT, REGARDLESS OF THE FORM OR BASIS OF ANY CLAIM OR ACTION. ALL
CLAIMS CONCERNING PRODUCT DELIVERED TO BIONUMERIK HEREUNDER MUST BE
MADE IN WRITING RECEIVED BY RPS WITHIN NINETY (90) DAYS AFTER THE DATE
OF DELIVERY, FAILING WHICH CLAIM NOTICE SUCH PRODUCT SHALL BE DEEMED
ACCEPTED BY BIONUMERIK "AS IS" AND ALL CLAIMS BY BIONUMERIK IN RELATION
TO SUCH DELIVERED PRODUCT SHALL BE DEEMED WAIVED. NOTWITHSTANDING THE
FOREGOING, NOTHING CONTAINED IN THIS ARTICLE 4 IS INTENDED TO LIMIT THE
INDEMNIFICATION OBLIGATIONS OF THE PARTIES CONTAINED IN ARTICLE 9.
5 DEBARMENT CERTIFICATION
5.1 RPS warrants that it will not knowingly use in connection with the
services rendered under this Agreement in any capacity the services of
any person
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debarred under the U.S. Food, Drug & Cosmetic Act or any other similar
law or regulation governing drug manufacturing.
6 INDEPENDENT CONTRACTOR STATUS
6.1 Each of the Parties in performing this Agreement shall be and be deemed
to be acting as an independent contractor and not as the agent or
employee of the other. Neither RPS nor BioNumerik shall have any
authority whatsoever to act as agent or representative of the other
party nor any authority or power to contract or create any obligation
or liability on behalf of the other party or otherwise bind any other
party in any way for any purpose.
7 CONFIDENTIALITY
7.1 Each Party shall hold all Confidential Information received from the
other Party in strictest confidence and shall use the same level of
care to prevent any unauthorized use or disclosure of such Confidential
Information as it exercises in protecting its own information of
similar nature. A Party shall not disclose any Confidential Information
received from the other Party to any third party without the prior
written consent of the other Party.
7.2 The Confidential Information shall be supplied to the Parties in
written form and shall be identified as being confidential and
disclosed under the provisions of this Agreement. Any information that
is disclosed in oral form shall be confirmed in writing within sixty
(60) days after disclosure and be deemed included within the scope of
this Agreement.
7.3 Each Party shall have the right to disclose the Confidential
Information of the other Party to the minimum number of those officers
and employees of such receiving Party who need to know it for the
purposes of this Agreement. Such disclosure is allowed only on
condition that the persons to whom the Confidential Information will be
disclosed shall be, by law, contract or other binding undertaking,
under confidentiality obligations corresponding to those set out in
this Agreement.
7.4 The disclosing Party retains all rights to its Confidential
Information.
7.5 The confidentiality obligations of this Agreement shall not apply to:
a) Confidential Information which at the time of the disclosure
is in the public domain; or
b) Confidential Information which, after disclosure, becomes part
of the public domain otherwise than by breach of this
Agreement; or
c) Confidential Information which can be established by
reasonable and competent proof to have already been in the
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receiving Party's possession prior to disclosure and was not
acquired, directly or indirectly, from the disclosing Party;
or
d) Confidential Information which a receiving Party shall receive
from a third party who has the legal right to disclose it and
who would by disclosure not breach, directly or indirectly,
any confidentiality obligation to either Party; or
e) Confidential Information which is released for disclosure by
prior written consent of the disclosing Party; or
f) Confidential Information which has been independently
developed by a Party hereto without the use or benefit of
Confidential Information received from the other Party; or
g) Confidential Information which is required to be disclosed by
law or by order of court of competent jurisdiction, provided
that due advance notice is given to the other Party of such a
requirement and also such disclosure is then made only to the
minimum extent so required.
h) In addition to the foregoing, the existing Confidentiality
Agreement (the "Confidentiality Agreement), dated as of June
25, 2003, among BioNumerik, Baxter Oncology GmbH, and RPS
shall remain and continue in full force and effect after the
date hereof in accordance with its terms.
All obligations under Section 7 of this Agreement shall terminate 5
years after the termination of this Agreement.
7.6 The burden of proving that any of the above exceptions is applicable to
a Party to relieve it of its liability or obligations hereunder shall
be upon the Party claiming such exception(s).
8 INTELLECTUAL PROPERTY RIGHTS
8.1 a) As used herein "Intellectual Work Product" means all inventions,
modifications, discoveries, improvements (including, without
limitation, process improvements and improvements in analytical
methods), processes, techniques, documentation, scientific and
technical data, drawings and other information (other than the RPS
Technology) that is generated as a result of any of the manufacturing
services and other projects performed for BioNumerik by RPS. "RPS
Technology" means all present and future documentation, scientific and
technical data, processes, test procedures and other information and
techniques that are owned, developed or licensed by RPS relating to the
development, formulation or manufacture of chemical and pharmaceutical
substances and that are not developed hereunder or in connection with
the manufacturing or other projects performed for BioNumerik by RPS.
BioNumerik shall not own any of the RPS Technology. RPS will, however,
use know-how and experience of RPS to facilitate the efficient
manufacture of the Compound.
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b) The parties hereto understand and agree that no rights are being
conveyed to RPS (or any of their affiliates) to use any BioNumerik
Technology (as hereafter defined) for any purpose other than the sole
purpose of preparing the Compound for the benefit of BioNumerik in
accordance with the terms of this Agreement. As used herein,
"BioNumerik Technology" means all present and future documentation,
scientific and technical data, processes, test procedures, information,
techniques, technology, patents, patent rights, inventions and other
intellectual property rights that are owned, developed, or licensed by
BioNumerik.
8.2 a) RPS acknowledges that BioNumerik shall be the sole and exclusive
owner of all Intellectual Work Product (except the RPS Technology, as
described above in Section 8.1). In consideration of the covenants
contained herein, and for other good and valuable consideration set
forth herewith, RPS hereby assigns and transfers to BioNumerik and its
successors and assigns all right, title and interest that RPS has or
may later acquire in and to the Intellectual Work Product under
copyright, patent, trade secret and trademark law. Such assignment
includes the assignment of the entire right, title and interest in and
to all applications for letters patent and any and all letters patents
in the United States of America and all foreign countries which may be
granted on and in connection with the Intellectual Work Product. Upon
request by RPS, BioNumerik will meet with RPS to discuss the
possibility of providing RPS with a non-exclusive, royalty free,
non-sublicensable license to practice the Intellectual Work Product
described in 8.1(a) above for the purpose of manufacturing compounds
other than the Compound that are not similar to or related to the
Compound and that do not complete in any way with the business and
planned business of BioNumerik or BioNumerik's strategic alliance
partners. BioNumerik will have no obligation to grant such a license
and any determination to grant such a license will be made in the sole
discretion of BioNumerik and will be based upon such considerations as
BioNumerik deems appropriate.
b) RPS agrees to cooperate with BioNumerik so that BioNumerik may enjoy
to the fullest extent the entire right, title and interest in and to
the Intellectual Work Product. In connection therewith, RPS agrees to
execute, if necessary, additional papers and documents and to take all
actions requested by BioNumerik in order to (a) further evidence
ownership of the Intellectual Work Product by BioNumerik and its
successors and assigns and (b) allow BioNumerik to procure, maintain
and enforce all letters patent and intellectual property rights to the
Intellectual Work Product. BioNumerik agrees to reimburse RPS all
reasonable costs in relation to the production of additional papers and
documents.
c) In addition, for the purpose of the work conducted by RPS for the
BNP7787 manufacturing project as described in the Project Description,
RPS will not incorporate any of its proprietary technologies toward a
synthesis or manufacturing process.
d) RPS is hereby granted a worldwide, nonexclusive, royalty-free
license to practice the Intellectual Work Product solely for the
purpose of preparing Compound on behalf of BioNumerik in accordance
with this Agreement and the Project Description.
e) BioNumerik warrants and represents that the Products manufactured
and delivered by RPS under this Agreement will be used solely by
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BioNumerik or its designated assignees, licensees, representatives or
alliance partners for legally permissible purposes. BioNumerik further
represents and warrants that it has the right to disclose its
Confidential Information to RPS, including without limitation all
technology made available by BioNumerik to RPS for the manufacture of
the Compound subject to and in accordance with the provisions of this
Agreement, and that BioNumerik has the right to license such technology
to RPS for such purpose and RPS may use it accordingly, all free and
clear of any intellectual property or other rights of third parties,
all subject to and in accordance with the provisions of this Agreement.
8.3 Except as specifically described in this Agreement, no right, title,
interest, or license in or to any trademark, patent, copyright or
service mark or symbol or any other intellectual property right of a
party is granted to the other party under this Agreement.
9 INDEMNIFICATION PROVISIONS; FORCE MAJEURE; ARBITRATION
9.1 BioNumerik will indemnify and hold harmless RPS, its affiliates, any
present or future parent or subsidiary of them, and their respective
officers, directors, employees, counsel, agents and affiliates (the
"Indemnified RPS Parties") against any and all losses, liabilities,
damages, costs and expenses including, but not limited to, reasonable
attorney fees and any and all reasonable expenses incurred in defending
against any litigation, commenced or threatened, or any claim, and any
and all amounts reasonably paid in settlement of any claim or
litigation, commenced or threatened ("Losses"), arising out of (i)
product liability and patent and trademark infringement suits regarding
any active pharmaceutical ingredient or raw materials relating to the
projects hereunder, including but not limited to, any bulk drug, or the
Compound, (ii) any failure by BioNumerik to comply with any applicable
governmental regulation (including, without limitation, any applicable
environmental laws), (iii) the breach of any representation, warranty,
or covenant of BioNumerik contained in this Agreement, (iv) the use by
RPS of any raw or component material(s) supplied by BioNumerik to RPS
or by a third party on BioNumerik's behalf, or (v) the promotion,
marketing, distribution and sale, whether directly or through
distributors, of BNP7787; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL
BIONUMERIK INDEMNIFY OR HOLD HARMLESS ANY OF THE INDEMNIFIED RPS
PARTIES IN THE EVENT RPS OR ANY INDEMNIFIED RPS PARTY, IS IN ANY WAY
RESPONSBILE BY NEGLIGENCE OR WILLFUL ACT FOR SUCH LOSSES, LIABILITIES,
DAMAGES, COSTS AND EXPENSES.
9.2 RPS will indemnify and hold harmless BioNumerik, its affiliates, any
present or future parent or subsidiary of any of them, and their
respective officers, directors, employees, counsel, agents and
affiliates (the "Indemnified BioNumerik Parties") against any and all
Losses arising out of (i) any breach of any representation, warranty,
covenant or agreement of RPS contained in this Agreement, (ii) any
failure by RPS to comply with any applicable governmental regulation
(including, without limitation, any applicable environmental laws), or
(iii) any product recalls or withdrawals,
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personal injury, product liability or property damage relating to or
arising from any Compound supplied by RPS under this Agreement, BUT
ONLY TO THE EXTENT SUCH RECALLS OR WITHDRAWALS, PERSONAL INJURY,
PRODUCT LIABILITY OR PROPERTY DAMAGE REFERRED TO WITHIN (iii) OF THIS
PARAGRAPH IS ATTRIBUTABLE TO RPS'S BREACH OF THIS AGREEMENT, OR RPS'S
FAILURE TO MANUFACTURE ANY PRODUCT IN CONFORMANCE WITH THE
SPECIFICATIONS AND REQUIREMENTS SET FORTH IN THIS AGREEMENT; provided
further that RPS will not indemnify or hold harmless Indemnified
BioNumerik Parties for any losses arising out of BioNumerik's
negligence.
9.3 Conditions of Indemnification: With respect to any indemnification
obligations of either Party to the other Party under this Agreement,
the following conditions must be met for such indemnification
obligations to become applicable:
a) The indemnified Party shall notify the indemnifying Party promptly
in writing of any claim which may give rise to an obligation on the
part of the indemnifying Party hereunder;
b) The indemnifying party shall be allowed to timely undertake the sole
control of the defense of any such action and claim, including all
negotiations for the settlement, or compromise of such claim or action
at its sole expense;
c) The indemnified Party shall at its sole expense render reasonable
assistance, information, cooperation and authority to permit the
indemnifying Party to defend such action.
9.4 Force Majeure. Neither party shall be liable to the other for damages
of any sort arising from any delay or default in such party's
performance hereunder caused by events or conditions beyond such
party's reasonable control and which such party is unable through the
exercise of due diligence to prevent, including, but not limited to,
acts of nature, government or regulatory action, war, civil commotion,
destruction of synthesis or production facilities or materials by
earthquake, fire, flood or storm, or public utilities ("Force
Majeure"). Each party agrees promptly to notify the other party of any
event of Force Majeure and to employ all reasonable efforts toward
prompt resumption of its performance when possible. If Force Majeure
prevents performance by one party of its obligations hereunder in whole
or in part for more than thirty (30) days, the other party shall have
the right to terminate any remaining Phase or Phases of the Project or
the remainder of this Agreement upon written notice to the
non-performing party. In no event shall Force Majeure affecting RPS
obligate RPS to procure supplies of Product for BIONUMERIK from
alternate suppliers, or to allocate its available manufacturing
resources and product supplies in other than a fair and reasonable
manner giving equal consideration to the internal manufacturing needs
of RPS and its affiliates and to the needs of BioNumerik and RPS'
regular customers whether or not they are then under contract.
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9.5 Arbitration. Any controversy or claim arising under this Agreement or
the breach thereof which cannot be settled amicably within a period of
[**] after the date of notification, by registered mail, of the
controversy or claim by one party to another shall be settled
exclusively by arbitration in San Antonio, Texas in accordance with the
rules of the American Arbitration Association ("AAA") then in effect,
such arbitration to occur before a single arbitrator mutually agreeable
to both parties; provide however that, in urgent situations in which
times is of the essence to obtain proper remedies, the rights of the
parties to bring claims or actions in Courts of law shall remain
unimpaired. The arbitrator shall render his/her decision within [**] of
the completion of the hearing, and may, in his/her discretion, award
costs and expenses (including attorney's fees) to the winning party.
The judgement and award of the arbitrator shall be final and binding
and may be entered in any court having jurisdiction thereof, or
application may be made to such court for judicial acceptance of any
award or an order of enforcement, as the case may be. RPS and
BioNumerik shall share equally the fees and expenses of the arbitrator.
It is further understood between the parties that both the arbitration
proceeding and the arbitration award will be confidential and kept
confidential by the arbitrator, the AAA and the Parties, except for
such disclosure as may be required to comply with legally required
corporate disclosure and disclosure to shareholder's, investors,
alliance partners, accountants, attorneys and financial advisors of the
disclosing party.
10 TERM AND TERMINATION
10.1 This Agreement shall enter into force as of the Effective Date of the
Agreement and unless earlier terminated, shall continue in full force
and effect until one year after completion of the projects described in
the Project Description. Sections 4, 8, 9, and 13 shall survive any
termination of this Agreement. The obligations under Section 7 of this
Agreement shall terminate 5 years after the termination of this
Agreement.
10.2 Either Party shall have the right, without prejudice to any other
rights or remedies available to it, to terminate this Agreement for
cause with immediate effect by written notice to the other Party in any
of the following events:
a) The other Party defaults in the performance of any of its
obligations under this Agreement and such default continues
unremedied for thirty (30) days from notice to the defaulting
Party;
b) The other Party intentionally makes (or is discovered to have
intentionally made) any material false representations,
reports or claims in connection with the business
relationships of the Parties;
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[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
c) Any of the representatives of the Parties engages in (or is
discovered to have engaged in) fraudulent, criminal or
negligent conduct in connection with the business
relationships of the Parties;
d) The other Party files a petition in bankruptcy, is adjudicated
bankrupt, files for reorganization, is placed in liquidation,
makes a general assignment for the benefit of its creditors,
becomes insolvent or is otherwise unable to fulfill its
business obligations.
10.3 BioNumerik may also terminate this Agreement at any time with or
without cause upon 30 days written notice to RPS, provided that, upon
termination of this Agreement by BioNumerik without cause, BioNumerik
will pay to RPS the price as agreed in the Project Description up to
the costs incurred at the point of termination of the Agreement.
10.4 RPS may terminate this Agreement upon 6 months written notice to
BioNumerik if, as a result of the services performed by RPS prior to
such termination and RPS's findings relevant thereto, RPS has
determined that, after expending diligent efforts towards the
manufacture of the Compound, it simply cannot make the Compound
required for future phases of this Agreement within the Specifications
(as defined in this Agreement), such written notice to include an
explanation of the basis for any such decision by RPS. In the event of
any such termination of this Agreement by RPS, BioNumerik shall only be
responsible for the payment of fees and charges for services performed
by RPS hereunder through the termination date specified in RPS's
termination notice, and then only to the extent that BioNumerik is able
to utilize the Compound resulting from such services.
11 CRITICAL INTERFACES AND NOTICES
11.1 All notices referred to herein shall be sent by prepaid registered
mail, by recognized courier service (such as Federal Express), or by
facsimile and shall be deemed delivered if sent to the addresses of the
respective Parties hereinbelow indicated, or such other address as is
furnished by such notice to the other Party.
Notices and payments to RPS shall be made in accordance with the RPS
contact information contained in the Project Description:
Notices and invoices to BioNumerik shall be made to:
BIONUMERIK PHARMACEUTICALS, INC.
Suite 1250,
8122 Datapoint Drive,
San Antonio, TX 78229, USA
Attn: Dr. Harry Kochat, Senior Manager
Chemistry & Manufacturing Operations
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Fax: +1 210 614 9439
Phone: +1 210 614 1701
e-mail: harry.kochat@bnpi.com
with a copy to:
Frederick H. Hausheer, M.D.,
Chairman and CEO
BioNumerik Pharmaceuticals, Inc.,
Suite 1250,
8122 Datapoint Drive
San Antonio, TX 78229, USA
Fax: +1 210 614 0643
Phone: +1 210 614 1701
11.2 STATUS UPDATES.
RPS shall keep BioNumerik regularly informed of the status and progress
of all stages of the Phase 1, 2, 3, and 4 work, including
manufacturing, through regular telephone or e-mail updates and through
written summaries.
11.3 CONTACT PROCEDURES.
The following individuals shall serve as initial points of contact at
RPS and BioNumerik with respect to any questions or occurrences that
may arise with respect to the Agreement and the work conducted
hereunder:
RPS CONTACTS:
TECHNICAL MATTERS: Paul Quigley
PAYMENT OR FINANCIAL MATTERS: Paul Ryan
BUSINESS OR CONTRACT MATTERS: Kim Thomson (with copy to Gordon
Jamieson)
BIONUMERIK CONTACTS:
TECHNICAL MATTERS:
Dr. Harry Kochat
Jason Sondgeroth
PAYMENT OR FINANCIAL MATTERS:
Steve Riebel - Vice President & Chief Financial Officer
Michael Edwards - Controller
BUSINESS OR CONTRACT MATTERS:
Dr. Fred Hausheer - Chief Executive Officer
David Margrave - Vice President, Administration & General Counsel
Steve Riebel - Vice President & Chief Financial Officer
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11.4 CHANGE MANAGEMENT.
RPS will promptly notify BioNumerik whenever there is a change in
management or key personnel on the project for the work to be conducted
hereunder.
11.5 Complaint Procedures: Procedures to address any complaint related to
the manufacturing of the Compound are contained in the standard
operating procedures (SOPs) for the RPS Annan, Scotland facility.
Current copies of such SOPs have been previously provided by RPS to
BioNumerik and RPS will promptly provide BioNumerik with any changes to
such SOPs.
11.6 Responsibility for Regulatory Communications.
(a) BioNumerik will have responsibility for initial regulatory
communication with the FDA and other regulatory agencies regarding the
manufacture of the Compound.
(b) RPS will have responsibility for providing back-up assistance and
support as requested by BioNumerik in connection with communications
with the FDA and other regulatory agencies regarding the manufacture of
the Compound. In addition, RPS will have responsibility for regulatory
communication with the FDA and other regulatory agencies (following
coordination with BioNumerik) with respect to the process of RPS'
manufacture of the Compound up to the point that the manufactured
Compound is delivered to the U.S. main port for further shipment as
designated by BioNumerik.
12 ASSIGNMENT
12.1 This Agreement is deemed personal to BioNumerik and RPS. Neither Party
shall, without prior written consent of the other Party, assign this
Agreement or any of its rights nor delegate any of its duties or
obligations herein. Both Parties agree not to unreasonably withhold
consent if such an assignment is contemplated in connection with the
sale or merger by a Party of all or substantially all of its business
or assets to a third Party, providing the non-assigning Party receives
and accepts such written assurances of continued performance and
commitments from the assignee under this Agreement as it may reasonably
require prior to such an assignment becoming effective. Any assignment
or delegation in derogation of this provision shall be deemed null and
void.
13 MISCELLANEOUS
13.1 WAIVERS: Failure of either Party at any time to require strict
performance by the other Party of any of the provisions of the
Agreement shall in no way affect the right thereafter to enforce the
same, nor shall the waiver of any
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term, provision, covenant or condition hereof be taken or held to be a
waiver of any subsequent breach hereof or as nullifying the
effectiveness of such term, provision, covenant or condition.
13.2 COUNTERPARTS: This Agreement may be executed in two or more
counterparts, which all together shall constitute one instrument.
13.3 ENTIRE AGREEMENT: This Agreement and its annexes (including, without
limitation, the Project Description) embody the entire understanding of
the Parties and shall supersede all previous communications,
representations, or understandings, either oral or written, between the
Parties relating to the subject matter hereof.
13.4 AMENDMENTS: No amendments or modifications of this Agreement will be
deemed legally binding unless made in writing and signed by both
Parties hereto.
13.5 SEVERABILITY: In case one or more of the provisions contained in this
Agreement shall, for any reason, be held invalid, illegal, or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed by amending or
limiting such invalid, illegal, or unenforceable provision so as to
conform as closely as possible to the intent of the Parties or, if such
is not possible, by deleting such provision from this Agreement.
13.6 ANNEXES: The Annexes form an integral part of this Agreement. Should
any internal discrepancies or variances occur between this Agreement
and its Annexes (including the Project Description), this Agreement
shall take precedence.
13.7 GOVERNING LAW: THIS AGREEMENT IS MADE UNDER AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF. EACH PARTY TO THIS AGREEMENT
HEREBY IRREVOCABLY CONSENTS AND SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA FOR
ALL PURPOSES IN CONNECTION WITH ANY PROCEEDING THAT ARISES OUT OF OR
RELATES TO THIS AGREEMENT.
13.8 HEADINGS: The headings in this Agreement may not be used in the
interpretation of any provisions hereof.
13.9 USE OF NAMES: Except as expressly required pursuant to law, neither
party will without prior written consent of the other:
(a) Use in advertising, publicity, promotional premiums or
otherwise, any trade name, trademark, trade device, service
mark, symbol, or any abbreviation, contraction or simulation
thereof owned by the other party, or
(b) Represent, either directly or indirectly, that any product or
service of one party is a product or service of the other.
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In Witness Hereof,
the Parties hereto through their authorized representatives have
executed this Agreement as of the date first written above.
RHODIA PHARMA SOLUTIONS INC.,
on behalf of itself and its subsidiary, Rhodia Pharma Ltd.
By: /s/ [ILLEGIBLE]
Title: President
Date: February 23, 2004
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BIONUMERIK PHARMACEUTICALS, INC.
By: /s/ FREDERICK H. HAUSHEER
Title: Chief Executive Officer
Date: effective as of February 10, 2004
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ANNEXES
Annex 1: Project Description (the Proposal)
Annex 2: Specification of Compound
Annex 3: Specification of Starting Materials
Annex 4: Form of Certificate of Analysis
Annex 5: Procedures for Release of Compound
Annex 6: RPS Wire Transfer Information
Annex 7: Validation Schedule and Timeline; Storage Conditions
Annex 8: Certificate of Insurance for RPS and BioNumerik
Annex 9: List of Critical Raw Materials
Annex 10: Qualifying Batch: Critical Success Criteria
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19
[RHODIA LOGO]
PROPOSAL
QUALIFICATION OF BNP7787
(Proposal ANNJMC20021211-A)
[GRAPH]
PREPARED FOR:
BIONUMERIK PHARMACEUTICALS, INC.
8122 DATAPOINT DRIVE - SUITE 400
SAN ANTONIO, TX 78229
Proposal #ANNJMC20021211-A November 7, 2003
[RHODIA LOGO]
CONTENTS
PAGE
----
1. EXECUTIVE SUMMARY 3
2. PROPOSAL 4
3. ESTIMATED PRICE/KEY ASSUMPTIONS 8
4. SCOPE OF WORK/DELIVERABLES 12
5. TIMELINE 12
6. COMMUNICATION 13
7. CONTACT 13
8. ACCEPTANCE 14
9. APPENDIX 15
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Proposal #ANNJMC20021211-A November 7, 2003 Page 2 of 17
[RHODIA LOGO]
1. EXECUTIVE SUMMARY
BioNumerik Pharmaceuticals, Inc. ("BioNumerik") is currently in development with
BNP7787, also known as Tavocept(TM), a chemoprotectant intended for use to
neutralize the toxic side-effects of a number of major anticancer drugs -
including platinum and taxane drugs. Currently BioNumerik has established a
long-term supply agreement with Sumika of Japan, but is interested in securing a
second supplier. The FDA has recently given BNP7787 fast-track designation, and
the clinical trial program for BNP7787 is currently in Phase III. BioNumerik has
requested Rhodia Pharma Solutions Inc. ("RPS") to provide price and timeline
estimates for lab evaluation/tech transfer, qualification batches, validation
batches, and commercial batches of BNP7787.
RPS has considered the above requests and offers the following proposal based on
the technical data and requirements supplied by BioNumerik. A firm timeline for
the activities described will be provided after approval and suitable
discussions between RPS and BioNumerik.
RPS proposes a four-phase project (the "Project") to be conducted at RPS'
[**]facility:
Phase 1: Lab familiarization, tech transfer, and hazard evaluation
Phase 2: Qualification campaign (up to 2 x [**])
Phase 3: Validation campaign (3 x [**])
Phase 4: Commercial batches
RPS has agreed that the price for Phase 1 of the project on a [**] will be:
Phase 1: Lab familiarization/Tech transfer [**]
Proposal #ANNJMC20021211-A November 7, 2003 Page 3 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
RPS has agreed that the price for Phases 2-4 of the project on a [**] will be,
subject to the other provisions of this Proposal and to the terms and conditions
contained in the Agreement for Manufacturing and Supply of BNP7787 between RPS
and BioNumerik (the "Agreement"), to which Agreement this Proposal is attached
as Annex 1:
Phase 2: Qualification campaign [**]
Phase 3: Validation campaign [**]
Development support [**]
Phase 4: Commercial batches [**]
[**]
[**] [**]
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Proposal #ANNJMC20021211-A November 7, 2003 Page 4 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
[RHODIA LOGO]
2. PROPOSAL
The process used to prepare BNP7787 is shown below:
SCHEME 1. SYNTHESIS OF BNP7787
Proposal #ANNJMC20021211-A November 7, 2003 Page 5 of 17
[RHODIA LOGO]
RPS will conduct the Project in the phases described below:
PHASE 1: TECHNOLOGY TRANSFER AND FAMILIARIZATION
BioNumerik developed and scaled this process in-house before entering into
BioNumerik's agreement with Sumika. As part of transferring the process to RPS,
there are several necessary activities.
RPS would expect to receive copies of all batch records and process development
/ hazard evaluation reports for review along with analytical standards, markers,
and analytical methods used in the manufacturing process. This will allow the
technical team from RPS to become familiar with the process and permit the
analytical method transfer to commence. A technical exchange with a team from
BioNumerik originally involved in the development /operation of this process
would allow RPS to assess and highlight to BioNumerik any significant deviations
from the original scope before commencing manufacture.[**].
NOTE: Should the tech transfer information received from BioNumerik be, in RPS'
opinion, insufficient to enable RPS to safely and efficiently transfer the
process to the RPS plant, a new work plan going forward will be discussed
(including tasks and appropriate charges) and agreed by RPS and BioNumerik with
the goal of getting the process into the plant.
RPS has sourced raw material suppliers. If so desired, BioNumerik may wish RPS
to procure raw materials from these suppliers or find other suppliers.
Proposal #ANNJMC20021211-A November 7, 2003 Page 6 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
PHASE 2: SITE QUALIFICATION
Based on the process flow sheet, BioNumerik's preferences, and the need to
isolate an API at scale in a Class 10,000 isolation area, [**] is the site of
choice for qualification with respect to the Project. RPS believes that the
BioNumerik process is a good fit for the A3 plant at [**]. This site has also
been considered as the site that could accommodate the possible manufacture of
up to [**] of BNP7787 if desired by BioNumerik in the future.
After completion of Phase 1, the following qualification strategy would be
implemented (timing subject to change based on BioNumerik's strategic plan):
- Qualification campaign - cGMP preparation of up to 2 batches of
approximately [**] each to be used to support Phase III clinical
trials. [NOTE: should RPS feel that more than two batches of BNP7787
need to be prepared to meet the acceptance criteria, all batches
prepared above and beyond the first two will be prepared at RPS'
expense]. Target batch size is [**]. Development necessary to
support the campaign is included in Phase 1. Should the first batch
be prepared under conditions deemed successful based on critical
success criteria (included in Appendix 10 to the Agreement), the
second batch may be eliminated. Pricing for this work will be [**]
with a maximum BioNumerik spend of [**] for the total qualification
material.
Hazard Evaluation studies would also be undertaken by RPS to ensure the process
will be as safe as possible during scale-up.
As BioNumerik will require [**] of stability data prior to initiation of the NDA
submission, RPS has the option of generating material in 2004 with a view toward
obtaining [**] stability data which would satisfy BioNumerik's timeline and
which could be included with the BNP7787 submission document (currently
estimated for as early as approximately [**]. This program of work is based on
the expectation of carrying out full stability studies (5-year study to ICH
guidelines) on the final API (BNP7787). The assumption is that there will be no
intermediate stability studies required since this is a "one-pot" process where
no intermediates are isolated.
Details of the 2 x [**] qualification campaign are summarized below.
TABLE 1. DETAILS FOR 2 X [**] BNP7787 QUALIFICATION CAMPAIGN IN 2004
Proposal #ANNJMC20021211-A November 7, 2003 Page 7 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
COMMISSIONING/CLEANOUT
STAGE DAYS PROCESSING DAYS
----- ---------------------- ---------------
API 12 12
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PHASE 3: VALIDATION BATCHES
Upon successful completion of the 2 x [**] batch qualification campaign, RPS
would then validate the process according to BioNumerik's timeline. RPS will
prepare three validation batches of [**] each to prepare a total of approx.
[**]. Target batch size is [**] RPS will endeavor to complete the three
validation batches during late [**] but cannot guarantee the precise timing. In
the event RPS is not able to prepare such batches by late [**], RPS will so
advise BioNumerik and RPS will then work expeditiously to complete such batches
as soon thereafter as reasonably possible within a time-frame described to and
coordinated with BioNumerik. Before these are initiated, however, an additional
round of development work may be required to address any issues identified in
the process after the qualification campaign. The effect of these changes and
their impact on registration would need to be agreed between RPS and BioNumerik
before any additional work by RPS occurred.
Pricing for the Phase 3 validation batches will be [**] and BioNumerik will be
invoiced for this work in [**], with payment deferred until [**]. An
additional [**] will be charged for chemist support for the validation campaign.
BioNumerik will be invoiced for this chemist support work in 2004, with payment
expected in [**].
Details of the validation campaign are summarized below.
TABLE 2. DETAILS FOR 3 X [**] BNP7787 VALIDATION CAMPAIGN IN 2004
COMMISSIONING/CLEANOUT
STAGE DAYS PROCESSING DAYS
----- ---------------------- ---------------
API 7 18
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Proposal #ANNJMC20021211-A November 7, 2003 Page 8 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
PHASE 4: COMMERCIAL BATCHES
Following successful completion of the validation campaign, RPS would
progress the process to commercial scale with the capability of preparing
[**][**] and [**] commercial batches based on such amounts as BioNumerik may
request in the future. Details for these commercial batches are summarized below
(potential amounts for illustration purposes only).
[**]
Note: Based on BioNumerik's requirements, RPS can offer flexibility in batch
size. Batch sizes of [**] and [**] can be generated at BioNumerik's request. In
order to achieve the [**] batch size, RPS suggests two options:
- Two successive [**] batches would be combined on a large Rosenmund
filter, then slurried together to form the [**] batch.
- Replacement of key vessels to allow the preparation of a discrete
[**] batch.
Proposal #ANNJMC20021211-A November 7, 2003 Page 9 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
3. ESTIMATED PRICE/KEY ASSUMPTIONS
PHASE 1: TECHNOLOGY TRANSFER AND FAMILIARIZATION
[**]
PHASE 2: QUALIFICATION CAMPAIGN
[**]
Proposal #ANNJMC20021211-A November 7, 2003 Page 10 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
PHASE 3: VALIDATION CAMPAIGN
[**]
PHASE 3: DEVELOPMENT SUPPORT
[**]
PHASE 4: COMMERCIAL BATCHES (POTENTIAL AMOUNTS FOR
ILLUSTRATION PURPOSES ONLY)
[**]
Proposal #ANNJMC20021211-A November 7, 2003 Page 11 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
SODIUM 2-BROMOETHANESULFONATE TARGET PRICE/VOLUME INDICATIONS
[**]
THIOACETIC ACID TARGET PRICE/VOLUME INDICATIONS
[**]
TYPICAL STABILITY STUDY PRICES
[**]
Proposal #ANNJMC20021211-A November 7, 2003 Page 12 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
KEY ASSUMPTIONS:
- The process will operate in line with the batch records supplied (when
available) in terms of processing time and yields.
- Validated analytical methods will be supplied during the technical
transfer.
- Markers and reference standards will not have to be synthesized.
- Raw materials are readily available from sources identified to date and
safe to handle.
- 50 Kilogram heel loss on the Rosenmund vessel is assumed.
- Microbiological analysis will be conducted offsite at a rate of [**]
Endotoxin testing will be conducted onsite using a purchased-in kit.
- The high bromide and sulfur content of the aqueous waste stream will
necessitate offsite incineration. Guideline disposal price is [**] waste.
- Target prices for sodium 2-bromoethanesulfonate and thioacetic acid are
achievable.
The actual charges for BioNumerik's account will be invoiced as described in the
Manufacture and Supply Agreement, with payment due net 30 days from invoice
date. A down payment as described in the Manufacture and Supply Agreement is due
upon acceptance of this proposal. This payment will be used to purchase starting
materials, with any balance credited towards the final billable work performed
on this project. All deliveries will be FOB, U.S.A. main port basis. Shipments
will be made by air unless otherwise agreed by RPS and BioNumerik.
Prior to the start of the Phase 2 qualification campaigns, the A3 plant must be
re-engineered to accommodate the process. RPS estimates it will take
approximately four months to effect the engineering work and to complete the
validation of the USP water system in A3. The majority of the engineering work
will be required to handle the pure water system and pressurized oxygen. The
specifics of the re-engineering process can be summarized as follows:
ITEM
Pure water ring main installation and tie in to three units
Oxygen gassing station
Transfer lines, tracing, lagging, & flow control, support
Design and Maintenance support
Electrical & Instrumentation
Proposal #ANNJMC20021211-A November 7, 2003 Page 13 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
CAPITAL RECAPTURE CLAUSE
RPS' goal is to supply approximately [**] of BNP7787 prepared and delivered at
commercial scale under cGMP conditions over a period of approximately [**]. We
hope that this will be followed by a launch stock order of at least [**] RPS
will provide the approximately [**] in capital spend required to fit the process
into our plant. This plan allows RPS to spread out our internal capital spend
over enough batches to allow us to offer BioNumerik close to commercial pricing
for qualification and validation batches. Should BioNumerik decide to change the
scope of the project and order less than [**] total within [**] after the
effective date of the Agreement (including qualification, validation, and
commercial batches), RPS will attach a capital recapture fee of [**] for the
difference in what was ordered and [**] plus an additional [**] to cover the
discount on the Phase I work (reduced from [**]), up to a maximum capital
recapture fee and additional payment of [**] in the aggregate to be paid by
BioNumerik. A worked example is displayed below. In addition, the amount of any
recapture fee and additional payment paid by BioNumerik to RPS pursuant to the
foregoing provision shall be fully credited against and applied to the
satisfaction of the cost of any order for Compound made by BioNumerik within six
months after payment of such recapture fee and additional payment. Of course, in
the event that the project proceeds as expected and a minimum of [**] is ordered
(including qualification, validation, and commercial quantities), no additional
charge is payable since all capital expenses are amortized over the campaign.
EXAMPLE:
BioNumerik cancels the project having ordered a total of [**] including
qualification, validation, and commercial quantities.
Material delivered to date: [**]
Minimum total order required: [**]
Capital Recapture fee and additional payment is:
[**]
Proposal #ANNJMC20021211-A November 7, 2003 Page 14 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
4. SCOPE OF WORK/DELIVERABLES
RHODIA PHARMA SOLUTIONS WILL:
- Perform tech transfer, laboratory evaluation and familiarization
experiments on the process.
- Execute the qualification campaign to prepare up to 2 x [**] of BNP7787
under cGMP conditions (and all other applicable requirements described in
the Agreement) in the A3 plant at the RPS [**] facility.
- Execute a validation campaign to prepare three validation batches
(approximately) [**] of BNP7787 under cGMP (and all other applicable
requirements described in the Agreement) in the A3 plant at the RPS [**]
facility.
- Prepare commercial batches, quantity to be selected by BioNumerik.
- Provide written status reports on a monthly basis with teleconferences
and/or meetings to be organized as agreed appropriate.
- Provide copies of master batch records used in the plant.
- Provide written reports summarizing all phases of the work undertaken on
the project.
- Provide a hazard evaluation report.
- Comply with all other obligations of RPS described in the Agreement.
BIONUMERIK WILL:
- Subject to the provisions of the Agreement, BioNumerik shall purchase from
RPS and RPS shall supply, at the prices contained in the Agreement and
this Proposal, a minimum of [**] of BioNumerik's annual actual commercial
requirements of the Compound beginning with commercial launch of the
Product (as defined in the Agreement) and continuing for not less than
five years after commercial launch of the Project.
- Agree to a final product release specification prior to scale-up
activities.
- Provide any relevant health, safety, and environmental information.
- Provide any hazard information pertaining to the process that BioNumerik
has available.
- Provide any samples that are available to assist RPS in polymorph
determinations and analytical support.
- Provide batch records / development reports for the process and arrange
for technical discussion / transfer of information from Sumika.
- Comply with all other obligations of BioNumerik described in the
Agreement.
Proposal #ANNJMC20021211-A November 7, 2003 Page 15 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
5. TIMELINE
Work on Phase 1 could begin immediately at RPS upon acceptance of this proposal
and receipt of suitable starting materials. RPS expects work on Phase 1 to be
complete within approximately 8 weeks of initiation. Prior to scale-up in the A3
plant at [**] a four-month lead time will be necessary to complete needed
re-engineering to accommodate the process.
6. COMMUNICATION
An RPS technical project manager will be appointed to handle technology transfer
and technical interface issues for the project. An RPS product manager will
coordinate all timeline and financial aspects of the project with BioNumerik.
7. CONTACT
For additional information or questions, please contact:
Marc Caddell
Manager, Business Development
Rhodia Pharma Solutions
4009 Harriat Drive
Apex, NC 27539
Phone: 919.662.8432
Mobile: 617.669.9283
Fax: 919.662.9755
Email: marc.caddell@us.rhodia.com
|
Proposal #ANNJMC20021211-A November 7, 2003 Page 16 of 17
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
[RHODIA LOGO]
8. ACCEPTANCE
Please indicate BioNumerik's acceptance of this proposal by returning a signed
copy or a purchase order, referencing Proposal #ANNJMC20021211-A to Marc
Caddell. This proposal is valid for 30 days.
BIONUMERIK PHARMACEUTICALS, INC.
By: FREDERICK H. HAUSHEER
------------------------------- Date: effective as of February 10, 2004
Title: Chief Executive Officer
RHODIA PHARMA SOLUTIONS, INC.,
On behalf of itself and its subsidiary, Rhodia Pharma Ltd.
By: [ILLEGIBLE] Date: February 23rd, 2004
-------------------------------
Title: President
Proposal #ANNJMC20021211-A November 7, 2003 Page 17 of 17
|
[RHODIA LOGO]
9. APPENDIX
QUALIFICATION BATCH: CRITICAL SUCCESS CRITERIA
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ANNEX 2: SPECIFICATION OF COMPOUND
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ANNEX 3: SPECIFICATION OF STARTING MATERIALS
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ANNEX 4: FORM OF CERTIFICATE OF ANALYSIS
CERTIFICATE OF ANALYSIS
Product Name:
Material No.
Inspection Lot No:
Batch No:
Date of Analysis:
Retest Date:
Manufacturer: Rhodia Pharma Solutions [**]
Tested by: Rhodia Pharma Solutions [**] unless indicated otherwise
|
TEST SPECIFICATION RESULTS
Prepared by:____________________ ____________________
Date: Approved by: Date:
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ANNEX 5: PROCEDURES FOR RELEASE OF COMPOUND
STANDARD OPERATING PROCEDURE
Page 1 of 8
OPERATING PROCEDURE FOR FINAL PRODUCTS FOLLOWING
COMPLETION OF PROCESSING
REFERENCE NO: ASOP008C/057 REV 1
REVISED: DECEMBER 2003
REPLACES: ASOP008C/46; ASOP008C/51; ASOP008C/54; AGMP3; AGMP58; AGMP59
REVIEW PERIOD: 2 YEARS (UNLESS SUPERSEDED)
EFFECTIVE DATE: 19 DECEMBER 2003
Prepared by: _____________________________________ Date ________________
Operational Quality Manager [E Bryson]
Reviewed by: _____________________________________ Date ________________
Operational Quality Manager [A Dodds]
Approved by: _____________________________________ Date ________________
Laboratory Manager [J Tennant]
Approved by: _____________________________________ Date ________________
Process Manager [S R Mitchell]
Approved by: _____________________________________ Date ________________
Quality Manager [I R Lisle]
|
ASOP008C/057 REV 1 Page 2 of 8
CONTENTS
1.0 INTRODUCTION............................................ 3
2.0 DEFINITIONS............................................. 3
3.0 RESPONSIBILITIES........................................ 3
4.0 PROCEDURE............................................... 3
4.1 MANUFACTURING ACTIVITIES....................... 3
4.2 ANALYTICAL ACTIVITIES.......................... 3
4.3 OQ ACTIVITIES.................................. 4
5.0 DOCUMENT REVISION HISTORY............................... 6
6.0 DISTRIBUTION LOCATION................................... 7
TRAINING NEEDS MATRIX FOR DOCUMENT INTRODUCTION.................. 8
|
ASOP008C/057 REV 1 Page 3 of 8
1.0 INTRODUCTION
This procedure applies to all final products made at Rhodia Pharma Solutions,
[**]. It specifies how batches are off-loaded, sampled, labelled, analysed and
sentenced.
2.0 DEFINITIONS
QC - Quality Control
OQ - Operational Quality
3.0 RESPONSIBILITIES
See details within the individual parts of the procedure section.
4.0 PROCEDURE
4.1 MANUFACTURING ACTIVITIES
Manufacturing inform the Quality Department when a batch of final product is to
be off-loaded. The Quality Department reserve the right to be present during
off-loading to ensure that the correct procedures are followed.
Final product is off-loaded under controlled conditions via suitable off-loading
equipment e.g. glove-box, containment booth or cleanroom. Specific sampling and
off-loading requirements for each product are detailed in the relevant
manufacturing logsheet/manufacturing guide. The samples are clearly labelled and
delivered to the QC department for analysis.
When off-loaded, the filled containers have a unique sequentially numbered
product label attached to them by manufacturing which specify the identity,
batch number, container number, gross, Tare and nett weights.
Following offloading and sampling, the containers are sealed by manufacturing
using uniquely numbered metal security seals. The seal numbers are recorded on
the ancillary logsheet. The containers are then transferred to the S12
warehouse, or the drum park as appropriate. The logsheet is signed to indicate
that the off-loading activities are complete. Note: should a container need to
be re-sampled it will be checked for cleanliness and returned to the off-loading
area. Sealed containers may only be opened with the permission of the OQ
Department in line with POP 01/00.
Manufacturing enters the batch weight into SAP, which automatically transfers
the batch to QI status.
4.2 ANALYTICAL ACTIVITIES
On receipt of the product samples from manufacturing, QC will designate (as
labelled) one sample as a keeping sample, which will be stored for possible
future reference.
The QC analyst will then generate "inspection Instructions" from SAP and the
remaining sample will be analysed according to the correct method reference.
Note that if an MGA is operative, extra testing may be required (see
ASOP015C/007 - Manufacturing Guide Amendment Procedure).
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ASOP008C/057 REV 1 Page 4 of 8
As the analytical tests are carried out the results are calculated and then
checked by a second person. Test results will be evaluated against an approved
specification. Any tests, which fail to meet the defined acceptance criteria,
are dealt with in accordance with SOP016A/001 - Out of Specification Procedure.
When analysis on the batch is complete, the results are entered onto the SAP
system. An Inspection Report is then generated by SAP, signed by the analyst and
the data checked by a second person. The analyst, checker or third person signs
to indicate that the analysis has been completed correctly.The inspection report
is then passed to Operational Quality.
4.3 OQ ACTIVITIES
The correct usage decision (or sentence) for any batch depends on both its
manufacturing history and analysis. Rhodia Pharma Solutions Operational Quality
are responsible for carrying out the checks specified below and for ensuring
that the correct usage decision is made.
OQ carry out the following checks:
- Check batch documentation in line with the requirements of the relevant
part of ASOP008F/002. If satisfactory, sign the SAP Inspection Report to
indicate that the manufacturing documentation has been completed
correctly.
- Check whether the batch was subject to an MGA and confirm that all
outstanding actions which impact the usage decision have been assessed and
closed out.
- Confirm that any records associated with the manufacture of the batch are
present, e.g. in-process analysis.
- Review any PDRs associated with the batch and assess their impact on the
usage decision with particular reference to the likely impact on quality,
any violations of regulatory submissions and impact on validation and
critical parameters.
- Ensure that the analytical data and inspection report are available and
have been reviewed and approved by the Analytical Department.
- Check whether the batch is within specification.
- Review any Out of Specification Reports and ensure that a full and
thorough investigation has been made and the correct conclusions drawn.
- If the batch is out of specification ensure an OOSIR has been completed
(see above). Also, ensure that a process investigation report (PIR) has
been completed, which identifies the cause of the failure, corrective
action to prevent recurrence and which recommends from a technical
viewpoint how the batch should be sentenced. Assess the regulatory,
validation and cGMP aspects of such a recommendation prior to making a
usage decision. OQ sign off the PIR.
- Inform the customer of significant deviations/issues as required by the
relevant agreements.
- Ensure that any issues affecting inputs to the batch are fully accounted
for.
ASOP008C/057 REV 1 Page 5 of 8
The Operational Quality Manager then sentences the batch, taking into account
all of the above information. The correct usage decision is entered on the SAP
inspection report and the report then signed and dated. The Operational Quality
manager then enters the usage decision into SAP.
A batch release checklist is used to facilitate and record the OQ checking
associated with each batch of final product. (See Appendix 1).
Analytical data is available to Manufacturing via the SAP system. The Inspection
Instructions, computer output and ancillary logsheet are filed in the Quality
Department archives.
ASOP008C/057 REV 1 Page 6 of 8
5.0 DOCUMENT REVISION HISTORY
DATE SEQUENTIAL CODE ALTERATIONS, ADDITIONS, OMISSIONS
December 2003 ASOP008C/057 REV 1 First Issue - a general SOP for final product
operations following processing replaces
specific products SOP's.
|
ASOP008C/057 REV 1 Page 7 of 8
6.0 DISTRIBUTION LOCATION
File Locations [**]
A Operational Quality (Masters of all documents)
B Analytical Services (shift lab)
C Pilot Plant
D [**] 1 (Manufacturing/Engineering)
E [**] 2 (Manufacturing/Engineering)
F ADG
G R&D Main office (to hold documents for
Safety/Engineering/Finance/Accounts/ Human
H Resources/Purchasing/Planning/Commercial/Customer Services
I Central Engineering
J Warehouse
K PPG
K 1. Point of Use [specify]
2. Point of Use [specify]
3. Point of Use [specify]
|
File Locations [**]
A Operational Quality File
B Shift Managers Office
C General Admin Building (Master)
D S12 Stores
E Engineering Records Office
F 1. S3
2. QC Labs
3. Point of Use [specify]
|
File Locations [**]
A Quality Assurance (copy from [**])
B Engineering
C GPP
D Orion
E Building 44
F Lyra
G 1. Point of Use [specify]
2. Point of Use [specify]
3. Point of Use [specify]
|
File Locations [**]
A Quality Assurance (copy from [**])
B 4. Point of Use [specify]
5. Point of Use [specify]
6. Point of Use [specify]
|
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ASOP008C/057 REV 1 Page 8 of 8
TRAINING NEEDS MATRIX FOR DOCUMENT INTRODUCTION
DOCUMENT STAFF GROUP
-------- -----------
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Key-Staff Group Requirements Code
1. QC
2. OQ NC No changes to document after two yearly review, training not relevant.
3. Validation NAR No awareness required. Document is not directly relevant to the staff group.
4. Production Shift Managers A Individuals have read the updated or new document but no demonstration of competency is
required.
5. Process Operators B Individuals have been briefed by local/line manager ie overview with changes highlighted.
6. Pilot Plant Technicians C Off job training in SOP with knowledge assessed.
7. Production Team Leaders D Off job training with knowledge and skills competency assessed
8. Plant Eng/Plant Mgrs/Ops Mgrs
9. Maintenance staff -
Inst/Elec/Mech
10. Projects
11. Engineer Projects
12. Project Managers
13. PPG
14. SHE
15. Supply Chain/Purchasing DATE EFFECTIVE:__________________________________________________________________
16. R&D Chemists
17. IT SIGNED:___________________________________________DATE:____________________________________
18. Accounting
|
APPENDIX 1 TO ASOP008C/057 REV 1
FINAL PRODUCT BATCH RELEASE CHECKLIST
PRODUCT:___________________________ BATCH NO:_________________________
INITIALS DATE COMMENTS/NUMBERS
Logsheet reviewed and approved by OQ? Y N
Computer report reviewed and approved by
OQ? Y N N/A
Trends reviewed and satisfactory? Y N N/A
In-process analysis available and
satisfactory? Y N
Do any MGAs apply?
If YES are all actions relating to
batch complete? Y N N/A
Any controlled MGAs? Y N
PDRs raised as necessary and signed off by
OQ? Y N N/A
|
INITIALS DATE COMMENTS/NUMBERS
Analytical data available? Y N
Batch in specification? Y N
Analytical investigations completed? Y N N/A
Any other investigations completed? Y N N/A
Process investigations completed? Y N N/A
Check inputs for market restrictions and
issues affecting the usage decision Y N N/A
|
DETAILS COMMENTS
Batch weight/yield
Usage decision
|
Signed: ____________________________________ Date: ___________________________
Containers Labelled: _______________________ Date: ___________________________
(if stored in drum park)
|
53
ANNEX 6: RPS WIRE TRANSFER INFORMATION
HSBC
Newcastle upon Tyne City Branch
Account Number: 37450236 (605-480771-130)
IBAN CODE: GB48 MIDL 4005 1537 4502 36
Swift Code: MIDLGB22
ANNEX 7 (2 Pages): VALIDATION SCHEDULE AND TIMELINE; STORAGE CONDITIONS
Graphic image of Timeline for tasks for calendar years 2004 through 2006
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ID TASK NAME
--- ----------------------------------------
1 Engineering Activity [**]
2 Project Kick Off [**]
3 CAR Approval [**]
4 CAR preparation [**]
5 CAR review [**]
6 CAR Submission [**]
7 CAR Approval [**]
8 Process development [**]
9 Lab Evaluation [**]
10 Hazard Evaluation [**]
11 Fixed process outlines for HAZOP [**]
12 Detailed Design [**]
13 ELD generation [**]
14 Process safety review (HAZ 2) [**]
15 Material of construction review [**]
16 DQ1/GMP review [**]
17 Process HAZOP [**]
18 Revised ELD's [**]
19 Frozen ELO's [**]
20 IPPC Application [**]
21 Process Mass Balance [**]
22 Emission Calculations [**]
23 BAT Defination [**]
24 Application Preparation [**]
25 Application Submission [**]
26 Application Approval Process [**]
27 Application Approved [**]
28 Layouts/Plot Plan [**]
29 Isometric Production [**]
30 Issue lsometrics-Building [**]
31 Software [**]
32 Phase Defination [**]
33 Recipe Preparation [**]
34 Hardware [**]
35 Recipe testing [**]
36 Procure/Order/Install/Test [**]
37 Mechanical [**]
38 Procurement of Valves and Fittings [**]
39 Previous Campaign cleanout [**]
40 Install Pipework [**]
41 First tag for tracing [**]
42 Trace heating [**]
43 Lagging [**]
44 Testing (mechanical) [**]
45 Clad tagging [**]
46 Instruments [**]
47 Supplier enquiries [**]
48 Procure in-line Instruments [**]
|
Project 469 Level 1 Plan
Campaign 6
Date: 05/06/03
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ID TASK NAME
-- -----------------------------------------------------
49 Manufacture/Deliver In-Line Instruments [???] [**]
50 Loop lost uncommissioned equipment [**]
51 Electrical installation [**]
52 Electrical testing [**]
53 HANDOVER [**]
54 Mechanically Complete [**]
55 Equipment Qualification [**]
56 IQ [**]
57 OQ1 [**]
58 OQ2 [**]
59 Engineering Complete & ready for manufacture [**]
60 API Endotox and Micro Validation [**]
61 Set up contracts with testing houses [**]
62 Complete Validation [**]
63 Complete Validation reports [**]
64 Installation Complete [**]
65 USP Water Equipment Enotox Validation [**]
66 Complete one month Intensive study [**]
67 Complete two month weekly study [**]
68 Generate validation report [**]
69 Validation Complete & Tested [**]
70 Cleanroom Validation [**]
71 Define scope of validation [**]
72 Gneemie validation [???] [**]
73 Carry out validation exercise [**]
74 Generate validation report [**]
75 Cleanroom Validation Complete [**]
76 [**]
77 MANUFACTURE [**]
78 Run first qualification batch [**]
79 Review/Release of first qualification batch [**]
80 BioNumeric review of first batch [**]
81 Run second qualification batch [**]
82 Review/Release of second qualification batch [**]
83 Bionumeric review of second batch [**]
84 Run first validation batch [**]
85 Interbatch Cleanout/Preliminary first batch analysis [**]
86 Run second validation batch [**]
87 Interbatch cleanout/Preliminary second batch analysis [**]
88 Run third validation batch [**]
89 Interbatch Cleanout/Preliminary third batch analysis [**]
90 Run fourth validation batch [**]
91 Review/Analysis of validation batches [**]
92 Release of validation campaign material and Initiate stability studies [**]
93 Completion of Stability studies (six-month accelerated) [**]
94 NDA Submission
|
Project: 469 Level I Plan
Campaign 5
Date: 05/06/03
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ANNEX 8 (3 pages): CERTIFICATE OF INSURANCE FOR RPS AND BIONUMERIK
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ANNEX 9: LIST OF CRITICAL RAW MATERIALS
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
ANNEX 10: QUALIFYING BATCH: CRITICAL SUCCESS CRITERIA
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
EXHIBIT 10.5
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
AGREEMENT FOR
MANUFACTURING AND SUPPLY OF BNP7787
Made as of April 12, 2001 (the "Effective Date")
by and between
BIONUMERIK PHARMACEUTICALS, INC.,
(hereinafter referred to as "BioNumerik"),
a corporation duly organized and validly
existing under the laws of the State of
Texas with its principal offices at Suite
1250, 8122 Datapoint Drive,
SAN ANTONIO, TX 78229, USA
and
SUMIKA FINE CHEMICALS CO., LTD.
(hereinafter referred to as "Sumika"),
a corporation duly organized and validly existing under the laws of Japan,
with its principal offices at 1-21, Utajima 3-chome, Nishiyodogawa-ku,
Osaka 555-0021, Japan
1 DEFINITIONS
Unless otherwise expressly set forth herein, the following
terms shall have the meanings set forth below:
1.1 Calendar Quarter
Shall mean each three (3) month period ending on March 31,
June 30, September 30 or December 31.
1.2 Compound
Shall mean the compound 2,2'-Dithio-Bis-Ethane sulfonate,
disodium salt, also known as BNP7787.
1.3 Confidential Information
Shall mean all information, whether technical or
non-technical, trade secrets, discoveries, data, drawings,
techniques, documents, models, samples and know-how, whether
or not patented or patentable, owned or possessed by the
Parties on the date of this Agreement or later developed by
them.
1.4 Party
Shall mean BioNumerik or Sumika, and when used in the plural
form both BioNumerik and Sumika.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
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1.5 Product(s) or Finished Dosage Form
Shall mean any pharmaceutical composition containing the
Compound as the pharmacologically active ingredient.
1.6 Specifications
Shall mean the mutually agreed upon specifications for the
Compound attached on Annex 1 hereto.
2 MANUFACTURE AND SUPPLY OF COMPOUND
2.1 Subject to the provisions of this Agreement, BioNumerik shall
purchase from Sumika and Sumika shall supply, at the price set
forth in Annex 2 attached hereto, a minimum of [**] of
BioNumerik's annual actual requirements of the Compound until
the cumulative total amount of the Compound purchased by
BioNumerik from Sumika reaches [**]. BioNumerik may also
consider additional procurements of its Compound from other
manufacturers in accordance with Section 2.3.
2.2 The Compound shall be manufactured and delivered in accordance
with the Compound Specifications indicated in Annex 1, which
will be mutually updated from time to time by the Parties. In
addition, manufacturing of the Compound by Sumika will be
conducted in compliance with current U.S. FDA Good
Manufacturing Practices (cGMP), ISO9002 and International
Conference on Harmonization (ICH) regulations and guidelines.
BioNumerik shall not export the Compound sold by Sumika
hereunder or the Product(s) produced from such Compound to any
country or territory where such export would be in violation
of the patent laws of such territory. Prior to any export of
Compound(s) or Product(s), BioNumerik and Sumika shall, if
requested by either party, discuss in good faith the matter of
whether such export would violate the patent laws of the
intended country or territory of export. In addition to the
foregoing, BioNumerik shall have no obligation to purchase
from Sumika any percentage of its requirements of Compound
with respect to a territory to which it is unable to export
Compound as provided in the Section 2.2 or to which Sumika
does not agree to export Compound as provided in Section 2.9.
Sumika will not sell the Compound to any party other than
BioNumerik without BioNumerik's prior written consent.
Sumika shall be entitled to appoint any trading company it
deems appropriate to act as an intermediary between the
Parties for the purchase, sale and delivery of the Compound,
provided that the costs paid or payable by BioNumerik shall
not increase because of such appointment and such trading
company shall be reasonably acceptable to BioNumerik.
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[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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2.3 In the event BioNumerik considers procurements of its Compound
in addition to the amount (a minimum of [**] of BioNumerik's
annual actual requirements of the Compound until the
cumulative total amount of the Compound purchased by
BioNumerik from Sumika reaches [**] to be purchased pursuant
to Section 2.1, BioNumerik may conduct such additional
procurements from other manufacturers, provided BioNumerik
shall give Sumika notice of such consideration prior to any
farther contracting with another supplier or suppliers for
such additional Compound amounts. In such circumstances,
Sumika may, a its option, provide BioNumerik with a bid
containing new price, delivery amount and other material terms
under which it would manufacture and transport Compound on a
non-exclusive basis to BioNumerik. It is the hope of the
Parties that Sumika will manufacture A significant and major
portion of the Compound to be supplied to BioNumerik, subject
to meeting the competitive requirements of price, quality,
supply, delivery and other material terms relative to other
potential or active manufacturers. If such bid from Sumika is
on substantially competitive terms with BioNumerik's other
alternatives for manufacturing Compound, then BioNumerik and
Sumika will negotiate in good faith to enter into an amendment
to this Agreement providing for the manufacture by Sumika of a
significant portion of the Compound amounts required by
BioNumerik, which portion will be determined by BioNumerik in
its discretion based on BioNumerik's evaluation of
considerations including the need to manage risk by having
more than one manufacturer of Compound. In the event of any
unsuccessful bid by Sumika, BioNumerik will describe to Sumika
the categories in which its bid was deemed not competitive. In
the absence of any bid from Sumika (within 60 days of receipt
of the notice from BioNumerik) to manufacture Compound on
substantially competitive terms to BioNumerik's other bid,
BioNumerik shall be free to utilize such other alternatives
for the manufacture of manufacturing alternatives Compound.
Until an amendment to this Agreement is entered into by the
Parties, Sumika's obligations shall continue to manufacture
and supply Compound as provided in this Agreement. The Parties
recognize that Sumika shall have reasonable opportunities to
be a significant manufacturer of Compound as provided above,
but that no assurance can be given that Sumika will be a sole
source for the Compound due to the expected volume of use,
taxation/importation costs that may be encountered in various
territories, and other considerations.
2.4 BioNumerik and Sumika will regularly communicate concerning
the purchase and sale of the Compound. BioNumerik shall
provide to Sumika, no later than the 15th day following the
end of each Calendar Quarter, a forecast of its estimated
purchase orders from Sumika for the 12 calendar months
following the month in which the forecast is transmitted.
BioNumerik may make more frequent forecasts as it may deem
necessary. Except as otherwise provided herein, the terms and
conditions of all sales of the Compound by Sumika to
BioNumerik shall be in accordance with an acknowledgement
("Acknowledgement") provided by Sumika to BioNumerik in
response to each purchase order placed by BioNumerik
hereunder. The quantity of each shipment of the Compound
specified in each Acknowledgement shall be definitive for all
purposes herein absent conclusive error. BioNumerik shall
provide Sumika with purchase order(s) for Compound at least
[**] prior to the time BioNumerik requires such Compound.
Each minimum purchase order amount of the Compound by
BioNumerik shall be [**]. During the term of this Agreement,
Sumika shall provide BioNumerik with such quantities of
Compound as may be requested by BioNumerik and accepted by
Sumika in accordance with the terms of this Agreement.
2.5 BioNumerik shall test and approve the quality of delivered
Compound within 21 days after receipt of the Compound. If
BioNumerik fails to so test or approve, BioNumerik shall be
deemed to have tested and approved the quality of such
Compound. If BioNumerik informs Sumika within the said 21
days' period that the delivered Compound does not meet the
Specifications, BioNumerik shall, within 10 days thereafter,
send back the non-conforming Compound, and disclose the test
results concerning such Compound, to Sumika. Then, the Parties
shall cooperate with each other in promptly examining such
test results and promptly comparing the non-conforming
Compound in question and the sample of the Compound retained
by Sumika. If the Compound proves to be non-conforming at the
time of delivery to BioNumerik, upon BioNumerik's written
request, Sumika will promptly send to BioNumerik without
additional charge replacement amounts of the ordered Compound
that were non-conforming, and provide BioNumerik with a credit
equal to the transportation costs of such non-conforming
Compound. Sumika's foregoing obligations shall be the sole
remedy to BioNumerik Sumika's total responsibility shall not
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
exceed the value of the Compound in question plus related
shipping costs. Prior to approval of the Compound for
commercial sale, BioNumerik shall warehouse any back-up supply
of Compound purchased by BioNumerik from Sumika. If the
Parties discuss and agree that Sumika will hold such inventory
on behalf of BioNumerik, then Sumika shall send BioNumerik lot
sample(s) of the Compound and then BioNumerik shall test and
approve the quality of such sample(s) within 21 days of
receipt thereof and shall thereafter make the payment for such
Compound within 30 days; provided, however, that if the
quality of the Compound has been approved in advance by
BioNumerik, then BioNumerik shall make the payment within 30
days after BioNumerik's order therefor with Sumika. Such
Compound shall be subject to the product warranties set forth
in Article 4 of this Agreement.
2.6 The price of the Compound shall be on a [**] and in accordance
with Annex 2 attached hereto. In the event that BioNumerik
requests for the delivery of the Compound on other trade
terms, any increase of transportation and other costs incurred
by such request shall be borne by BioNumerik. Payment for all
Compound purchased from Sumika by BioNumerik in accordance
with this Agreement and approved by BioNumerik in accordance
with Section 2.5 shall be made in full within 30 days after
Compound satisfying the required Specifications are received.
BioNumerik shall make such payment without set-off,
counterclaim, or other such rights which BioNumerik may claim
against Sumika. Overdue payments shall accumulate interest
thereon at the rate of 14 percent per annum. Payment by
BioNumerik hereunder shall be made by wire transfer in
accordance with Annex 3.
2.7 As a part of this Agreement, Sumika shall maintain all of the
appropriate Specifications and standard operating procedures
related to the manufacturing of the Compound. These will be
treated as controlled documents and will be maintained
utilizing a suitable document control procedure to ensure
proper issuance and change, respectively. During the term of
this Agreement and for a period of at least two years
thereafter, Sumika shall maintain records of inspection and
testing, lab notebooks and procedures made in connection with
the manufacturing work conducted under this Agreement. In
addition, as a part of this Agreement Sumika shall prepare and
maintain an updated Drug Master FIle (DMF) for the Compound
for the United States, the European Union, and Japan and shall
answer any deficiency letter that the U.S. FDA and/or other
relevant regulatory health authority may issue to BioNumerik
regarding the manufacturing process for the Compound, provided
that the Parties shall discuss and agree in writing upon the
costs and expenses required for the preparation of such DMF.
The costs to prepare a DMF are estimated to consist of
approximately [**] for document compilation of analytical
matters; [**] for document compilation of CMC matters; and
[**] for finishing the DMF compilation and preparation; and in
any event the total DMF cost shall not exceed [**].
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
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2.8 Sumika shall keep BioNumerik regularly informed of the status
and progress of the manufacturing of Compound through regular
telephone or e-mail updates and through written summaries
provided to BioNumerik on a quarterly basis. Sumika recognizes
and agrees that any change in the process for preparation or
manufacture of the Compound (whether planned or unplanned)
must be approved in advance in writing by BioNumerik.
2.9 Subject to the limitations on exports contained in Section 2.2
hereof, Sumika shall be responsible for complying with all
transport regulations and export laws applicable under the
laws of Japan and any export territory agreed upon by the
Parties concerning the provision of the Compound to BioNumerik
in accordance with this Agreement. BioNumerik shall be
responsible for complying with all transport regulations and
export laws applicable under the federal, state and local laws
of the United States of America and other territories
designated by the Parties concerning the Compound. Sumika will
use reasonable best efforts to assure that the Compound will
be transported to BioNumerik in a reasonable and appropriate
manner, which will include reasonable consideration of
environmental conditions of the shipping, cGMP requirements,
and the procedures and precautions to be followed by the
shipper.
3 INSPECTIONS AND CONTROLS
3.1 Subject to confidentiality obligations contained in Section 7,
Sumika agrees to allow inspections of its manufacturing
facilities in which the Compound is being manufactured,
analyzed or tested, by representatives of BioNumerik or Grelan
Pharmaceutical Co., Ltd. ("Grelan"), as well as FDA and other
material regulatory authorities of the U.S. or other
governments, during normal working hours upon prior written
notice to Sumika. Sumika shall grant access to such premises
and to the documentation necessary for or appropriate to the
manufacturing and quality control of the Compound. BioNumerik
shall cause Grelan to comply with the Confidentiality
obligations set forth in this Agreement and shall be
responsible for any breach of such obligations by Grelan.
3.2 Sumika shall ensure all manufacturing, test and inspection
equipment is maintained under a documented calibration program
that is ISO9002 and ICH compliant. This includes providing
equipment calibration certifications as required.
3.3 Sumika will maintain environmental controls, including
particulate and bioburden monitoring, pest controls and
housekeeping procedures in accordance with FDA cGMP, ISO9002
and ICH regulations and guidelines. The use of supplies of
process water, air and particulate handling, etc., for cGMP
manufacture of the Compound, shall be consistent with FDA cGMP
specifications and ICH regulations and guidelines.
3.4 Sumika shall maintain a Quality Control department, which is a
distinct department separate from manufacturing. Sumika
Quality Control/Quality Assurance will perform incoming,
in-process and finished product inspections, review records,
perform line clearances, maintain batch history records,
provide batch history records for review and accuracy and
completeness and provide product release services in
accordance with cGMP and ICH regulations and guidelines.
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3.5 Sumika will promptly notify BioNumerik of any FDA or other
material regulatory inspection of Sumika related to the
Compound, and will promptly provide BioNumerik with a copy of
documentation and Sumika's correspondence and plans to address
any deficiencies relating to such inspection.
4 PRODUCT WARRANTIES
4.1 Sumika warrants and represents exclusively to BioNumerik that
the Compound manufactured by Sumika and delivered to
BioNumerik hereunder shall, at the time of shipment, conform
to the Specifications and be manufactured in accordance with
all applicable laws and regulations relating to the
manufacture of the Compound, including but not limited to,
applicable supranational, national and local laws in the
country when and where manufacture occurs, current U. S. FDA
Good Manufacturing Practices (cGMP), ISO9002 and ICH
regulations and guidelines. Sumika further represents that the
API is still in a development process and that the shelf life
stability of API will be determined based on additional
stability testing data that is obtained in the future. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SUMIKA MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY
OR FITNESS FOR ANY INTENDED USE OR PURPOSE. Notwithstanding
the foregoing, BioNumerik shall have no obligation to purchase
any Compound that does not meet the Specifications as provided
in Section 2.5 hereof.
5 DEBARMENT CERTIFICATION
5.1 Sumika warrants that it will not knowingly use in connection
with the services rendered under this Agreement in any
capacity the services of any person debarred under the U.S.
Food, Drug & Cosmetic Act or any other similar law or
regulation governing drug manufacturing.
6 INDEPENDENT CONTRACTOR STATUS
6.1 Each of the Parties in performing this Agreement shall be and
be deemed to be acting as an independent contractor and not as
the agent or employee of the other. Accordingly, BioNumerik
shall purchase the Compound from Sumika, which Sumika has
manufactured in accordance with the Specifications. BioNumerik
and/or its designated affiliates or agents shall then
manufacture the Finished Dosage Form in accordance with
BioNumerik's specification therefor. Neither Sumika nor
BioNumerik shall have any authority whatsoever to act as agent
or representative of the other Party nor any authority or
power to contract or create any obligation or liability on
behalf of the other Party or otherwise bind any other Party in
any way for any purpose.
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7 CONFIDENTIALITY
7.1 Each Party shall hold all Confidential Information received
from the other Party in strictest confidence and shall use the
same level of care to prevent any unauthorized use or
disclosure of such Confidential Information as it exercises in
protecting its own information of similar nature. The Parties
shall not disclose any Confidential Information received from
the other Party to any third party without the prior written
consent of the other Party.
7.2 The Confidential Information shall be supplied to the Parties
in written form and shall be identified as being confidential
and disclosed under the provisions of this Agreement. Any
information that is disclosed in oral form shall be confirmed
in writing within sixty (60) days after disclosure and be
deemed included as Confidential Information within the scope
of this Agreement.
7.3 Each Party shall have the right to disclose the Confidential
Information of the other Party to the minimum number of those
officers and employees who need to know it for the purposes of
this Agreement. Such disclosure is allowed only on condition
that the persons to whom the Confidential Information will be
disclosed shall be, by law, contract or other undertaking,
under confidentiality obligations corresponding to those set
out in this Agreement.
7.4 The disclosing Party retains all rights to its Confidential
Information.
7.5 The confidentiality obligations of this Agreement shall not
apply to:
a) Confidential Information which at the time of the
disclosure is in the public domain; or
b) Confidential Information which, after disclosure,
becomes part of the public domain otherwise than by
breach of this Agreement; or
c) Confidential Information which can be established by
reasonable and competent proof to have already been
in the receiving Party's possession prior to
disclosure and was not acquired, directly or
indirectly, from the disclosing Party; or
d) Confidential Information which a receiving Party
shall receive from a third party who has the legal
right to disclose it and who would by disclosure not
breach, directly or indirectly, any confidentiality
obligation to either Party; or
e) Confidential Information which is released for
disclosure by prior written consent of the disclosing
Party; or
f) Confidential Information which has been independently
developed by a Party hereto without the use or
benefit of Confidential Information received from the
other Party; or Confidential Information which is
required to be disclosed by law or by order of court
of competent jurisdiction, provided that due advance
notice is given to the other Party of such a
requirement and also such disclosure is then made
only to the minimum extent so required.
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7.6 The burden of proving that any of the above exceptions is
applicable to a Party to relieve it of its liability or
obligations hereunder shall be upon the Party claiming such
exception(s).
7.7 Grelan shall comply with the confidentiality obligations set
forth herein as if Grelan is a party to this Agreement.
8 INTELLECTUAL PROPERTY RIGHTS
8.1 a) As used herein "Intellectual Work Product" means all
inventions, modifications, discoveries, improvements,
processes, techniques, documentation, scientific and
technical data, drawings and other information other
than the Sumika Technology, that is generated as a
result of the manufacturing services performed for
BioNumerik by Sumika in accordance with this
Agreement. "Sumika Technology" means all present and
future documentation, scientific and technical data,
processes, test procedures, information, know-how,
techniques, technology, patents, patent rights,
copyrights, trade secret rights, inventions,
intellectual property rights, and other information
and techniques that are owned, developed or licensed
by Sumika (other than those developed hereunder or in
connection with the manufacturing or other projects
performed for BioNumerik by Sumika). BioNumerik shall
not own any of the Sumika Technology. However, Sumika
shall use the Sumika Technology, as far as it is
applicable, in order to efficiently carry out the
manufacture of the Compound.
b) The Parties hereto understand and agree that no
rights are being conveyed to Sumika (or any of their
affiliates) to use any BioNumerik Technology (as
hereafter defined) for any purpose other than the
sole purpose of preparing the Compound for the
benefit of BioNumerik in accordance with the terms of
this Agreement. As used herein, "BioNumerik
Technology" means all present and future
documentation, scientific and technical data,
processes, test procedures, information, know-how,
techniques, technology, patents, patent rights,
copyrights, trade secret rights, inventions,
intellectual property rights, and other information
and techniques that are owned, developed, or licensed
by BioNumerik. Prior to and during the course of
developing this Agreement, and in the future during
the course of this Agreement, BioNumerik has provided
and may provide Sumika with confidential and
proprietary enabling disclosures pertaining to the
composition, processes and conditions for
manufacturing, potential uses and other commercially
sensitive information relating to the Compound.
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8.2 a) Sumika acknowledges that BioNumerik is the sole and
exclusive owner of all Intellectual Work Product
(except the Sumika Technology, as described above in
8.1). In consideration of the covenants contained
herein, and for other good and valuable consideration
set forth herewith, Sumika hereby assigns and
transfers to BioNumerik and its successors and
assigns all right, title and interest that Sumika has
or may later acquire in and to the Intellectual Work
Product under copyright, patent, trade secret and
trademark law. Such assignment includes the
assignment of the entire right, title and interest in
and to all applications for letters patent and any
and all letters patent or patents in the United
States of America and all foreign countries which may
be granted on and in connection with the Intellectual
Work Product.
b) Sumika agrees to co-operate with BioNumerik so that
BioNumerik may enjoy to the fullest extent the entire
right, title and interest in and to the Intellectual
Work Product. In connection therewith, Sumika agrees
to execute, if necessary, additional papers and
documents and to take all actions requested by
BioNumerik in order to (a) further evidence ownership
of the Intellectual Work Product by BioNumerik and
its successors and assigns and (b) allow BioNumerik
to procure, maintain and enforce all letters patent
and intellectual property rights to the Intellectual
Work Product. BioNumerik agrees to reimburse Sumika
all reasonable costs in relation to the production of
additional papers and documents as well as all
actions requested by BioNumerik pursuant to this
Section 8.2(b).
c) In addition, in the event the manufacturing efforts
hereunder result in a synthesis or manufacturing
process for the Compound that incorporates Sumika
Technology, BioNumerik shall be granted, and is
hereby granted, a worldwide, personal, non-exclusive,
perpetual, royalty-free, non-sublicensable license to
practice said inventions and technology to the extent
they relate to such synthesis and manufacturing (so
long as such grant is not in violation of Sumika's
agreements with other parties existing as of the date
of this Agreement). BioNumerik will not transfer the
Sumika Technology to any third party without the
prior written agreement of Sumika, and no third party
may use the Sumika Technology without the prior
written agreement of Sumika.
d) [**].
8.3 Except for use for the purposes as defined in this Agreement,
no right, title, interest, or license in or to any trademark,
patent, copyright or service mark or symbol or any other
intellectual property right of a Party is granted to the other
Party under this Agreement.
9 INDEMNIFICATION PROVISIONS
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THE OMITTED PORTION.
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a. Sumika shall not be responsible for any product
liability relating to or arising from any Compound
supplied by Sumika under this Agreement and the
Product(s) produced from such Compound so long as the
Compound and the production method of such Compound
have been approved by BioNumerik, unless such
approval is based on inappropriate data provided by
Sumika.
9.1 BioNumerik will indemnify and hold harmless Sumika, its
affiliates, any present or future parent or subsidiary of
them, and their respective officers, directors, employees,
counsel, agents and affiliates (the "Indemnified Sumika
Parties") against any and all losses, liabilities, damages,
costs and expenses including, but not limited to, reasonable
attorney fees and any and all reasonable expenses incurred in
defending against any litigation, commenced or threatened, or
any claim, and any and all amounts reasonably paid in
settlement of any claim or litigation commenced or threatened
("Losses"), arising out of (i) product liability, patent and
trademark infringement or other suits and claims relating to
rights under BioNumerik's control and regarding any active
pharmaceutical ingredient or raw materials, including but not
limited to, any bulk drug, or the Compound, Products or
Finished Dosage Form, including but not limited to the
sterilization, bottling or production processes thereof, (ii)
any failure by BioNumerik to comply with any applicable
governmental regulation (including, without limitation, any
applicable environmental laws), (iii) any breach of any
representation, warranty, covenant or agreement of BioNumerik
contained in this Agreement, (iv) the use by Sumika of any raw
or component material(s) supplied by BioNumerik to Sumika or
by a third party on BioNumerik's behalf, or (v) the promotion,
marketing, distribution and sale, whether directly or through
distributors, of the Compound; PROVIDED, HOWEVER, THAT
BIONUMERIK SHALL NOT INDEMNIFY OR HOLD HARMLESS ANY OF THE
INDEMNIFIED SUMIKA PARTIES TO THE EXTENT THAT SUMIKA OR ANY
INDEMNIFIED SUMIKA PARTIES ARE RESPONSBILE BY NEGLIGENCE OR
WILLFUL ACT FOR SUCH LOSSES, LIABILITIES, DAMAGES, COSTS AND
EXPENSES.
9.2 Sumika will indemnify and hold harmless BioNumerik, its
affiliates, any present or future parent or subsidiary of any
of them, and their respective officers, directors, employees,
counsel, agents and affiliates (the "Indemnified BioNumerik
Parties") against any and all Losses arising out of (i) any
breach of any representation, warranty, covenant or agreement
of Sumika contained in this Agreement, or (ii) any failure by
Sumika to comply with any applicable governmental regulation
(including, without limitation, any applicable environmental
laws), BUT ONLY TO THE EXTENT SUCH FAILURE REFERRED TO WITHIN
(ii) OF THIS PARAGRAPH IS ATTRIBUTABLE TO SUMIKA'S BREACH OF
THIS AGREEMENT, OR SUMIKA'S FAILURE TO MANUFACTURE ANY PRODUCT
IN CONFORMANCE WITH THE SPECIFICATIONS; provided further that
Sumika will not indemnify and hold harmless Indemnified
BioNumerik Parties for any losses arising out of BioNumerik's
negligence or willful act.
9.3 Conditions of Indemnification: With respect to any
indemnification obligations of either Party to the other Party
under this Agreement, the following conditions must be met for
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such indemnification obligations to become applicable:
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a) The indemnified Party shall notify the indemnifying
Party promptly in writing of any claim which may give
rise to an obligation on the part of the indemnifying
Party hereunder;
b) The indemnifying Party shall be allowed to timely
undertake the sole control of the defense of any such
action and claim, including all negotiations for the
settlement, or compromise of such claim or action at
its sole expense;
c) The indemnified Party shall at its sole expense
render reasonable assistance, information,
co-operation and authority to permit the indemnifying
Party to defend such action.
9.5 BioNumerik shall notify Sumika in writing of any defect that
it learns of, which is likely to affect the manufacture of the
Compound as contemplated by this Agreement.
10 TERM AND TERMINATION
10.1 This Agreement shall enter into force as of the Effective Date
of the Agreement and unless earlier terminated, shall continue
in full force and effect until BioNumerik's fulfilling and
completing its obligations set forth in Section 2.1 unless
extended by agreement of the Parties. Sections 4, 7, 8, 9, 11,
16 and 17 shall survive any termination of this Agreement.
10.2 The Parties may terminate this Agreement upon mutual written
agreement at any time during the Term of this Agreement.
10.3 Either party may terminate this Agreement without penalty at
any time without payment of any compensation by giving six
months prior written notice of termination to the other party,
if either party believes that such termination is reasonably
justified, provided that, if requested by the non-terminating
party, the terminating party shall discuss such termination
with the other party for a period of up to 60 days in a good
faith and best effort to find a mutually agreeable solution
for avoiding such termination. If the circumstances require
more than 60 days to adequately discuss such matter, the 60
days discussion period set forth in the preceding sentence
will be extended to up to 180 days (inclusive of the 60 day
discussion period described above) at the request of either
party. In the event that both parties fail to find a mutually
agreeable solution for avoiding such termination in such a
period of 60 days or 180 days as stipulated above, this
Agreement shall be terminated, provided however that ,
notwithstanding the provisions of Section 10.1, (i) any rights
and obligations of each party under this Agreement except
those stipulated in clauses (ii) and (iii) of this sentence
set forth below shall lose effect on the date of such
termination, (ii) the Parties shall be responsible for
fulfilling and completing all orders for Compound made by
BioNumerik prior to the date of such termination, and (iii)
Sections 4, 7, 8, 9, 11, 16, and 17 shall survive any such
termination.
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Either Party shall have the right, without prejudice to any
other rights or remedies available to it, to terminate this
Agreement for cause with immediate effect by written notice to
the other Party in any of the following events:
a) The other Party defaults in the performance of any of
its obligations under this Agreement and such default
continues unremedied for thirty (30) days from notice
to the defaulting Party;
b) The other Party intentionally makes (or is discovered
to have intentionally made) any material false
representations or omissions, reports or claims in
connection with the business relationships of the
Parties;
c) Any of the representatives of the Parties engages in
(or is discovered to have engaged in) fraudulent,
criminal or negligent conduct in connection with the
business relationships of the Parties;
d) The other Party files a petition in bankruptcy, is
adjudicated bankrupt, files for reorganization, is
placed in liquidation, makes a general assignment for
the benefit of its creditors, becomes insolvent or is
otherwise unable to fulfill its business obligations;
e) Any change occurs with respect to the ownership of
the other Party by virtue of dissolution,
reorganization or transfer or sale of fifty percent
(50 %) or more of the outstanding stocks of the other
Party to a third party having activities within the
pharmaceutical field.
11 LIMITATION OF DAMAGES
11.1 In no event shall either Party be liable to the other Party or
third parties for any indirect, incidental or consequential
damages, such as e.g. lost profits in connection with its
performance under this Agreement or any breach thereof. The
restrictions of liability to compensate damages stipulated for
in this article shall not be applied to any breach of the
intellectual property rights of Sumika or BioNumerik or its
principals, including but not limited to rights of patent,
copyright and trademark or unauthorized disclosure of the
trade secrets or other confidential information of the same
provided to either of the Parties under this Agreement. The
compensation for damages for such breach shall include any
damages suffered by Sumika or BioNumerik, whether direct or
indirect, including but not limited to damages suffered due to
loss of profits, business or good-will, provided that the
amount of such compensation shall not exceed the value of the
Compound sold and purchased between the Parties under this
Agreement.
12 FORCE MAJEURE
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12.1 Neither Party shall be liable for delays or failure of performance of any
obligation hereunder by reason of an Act of God, fire, flood, earthquake,
war, public disaster, strike or labor difference, governmental enactment,
rule or regulation, unforeseeable raw material shortages, transportation
interruption or any other cause beyond such Party's control, provided that
diligent continuing efforts are made to resume performance if such
resumption is a commercially reasonable option. Written notice must be
given to the other Party for any claim made under this clause.
13 PUBLICITY AND PUBLICATIONS
13.1 Except as provided by this Agreement or as required by law,
neither Party shall originate any publicity, news release or
other public announcement, written or oral, whether to the
public press, or otherwise, relating to this Agreement, any
amendment hereto or performance hereunder, or the existence of
any arrangement between the Parties without the prior written
approval of the other Party, which approval shall not be
unreasonably withheld.
14 AUTHORIZATION AND NOTICES
14.1 All notices referred to herein shall be sent by prepaid
registered mail or by telefax and shall be deemed delivered if
sent to the addresses of the respective Parties hereinbelow
indicated, or such other address as is furnished by such
notice to other Party.
Notices and payments to Sumika shall be made to:
SUMIKA FINE CHEMICALS CO., LTD.
1-21, Utajima 3-chome
Nishiyodogawa-ku, Osaka 555-0021, Japan
Attn: Mr. Katsuyki Imada, Assistant Manager,
International Business Division
Dr. Naruhito Masai, Director International Business
Division
Fax: +81-6-6473-0503
Phone: +81-6-6473-0574
e-mail : imada@sumika-fine-chem.co.jp
masai@sumika-fine-chem.co.jp
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Notices and invoices to BioNumerik shall be made to:
BIONUMERIK PHARMACEUTICALS, INC.
Suite 1250,
8122 Datapoint Drive,
San Antonio, Tx 78229, USA
Attn: Dr. Harry Kochat, Project Manager
Fax: +1 210 614 9439
Phone: +1 210 614 1701
e-mail: harry.kochat@bnpi.com
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12
with a copy to:
Frederick H. Hausheer, M.D.,
Chairman and CEO
BioNumerik Pharmaceuticals, Inc.,
Suite 1250,
8122 Datapoint Drive
San Antonio, TX 78229, USA
Fax: +1 210 614 0643
Phone: +1 210 614 1701
15 ASSIGNMENT
15.1 This Agreement is deemed personal to BioNumerik and Sumika.
Neither Party shall, without prior written consent of the
other Party, assign this Agreement or any of its rights nor
delegate any of its duties or obligations herein. Without
prejudice to clause 10.4 e), both Parties agree not to
unreasonably withhold consent if such an assignment is
contemplated in connection with the sale or merger by a Party
of all or substantially all of its assets to a third Party,
providing the non-assigning Party receives and accepts such
written assurances of continued performance and commitments
from the assignee under this Agreement as it may reasonably
require prior to such an assignment becoming effective. Any
assignment or delegation in derogation of this provision shall
be deemed null and void.
16 GOVERNING LAW AND DISPUTES
16.1 THIS AGREEMENT IS MADE UNDER AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. ALL TRADE TERMS
PROVIDED IN THIS AGREEMENT SHALL BE INTERPRETED IN ACCORDANCE
WITH THE 1990 EDITION OF INCOTERMS ISSUED BY THE INTERNATIONAL
CHAMBER OF COMMERCE.
Each party to this Agreement hereby irrevocably consents and
submits to the jurisdiction of the courts of the State of
Texas and of the United States of America for all purposes in
connection with any proceeding which arises out of or relates
to this Agreement.
16.2 Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the commercial arbitration
rules of the International Chamber of Commerce. The place of
any arbitration shall be (I) San Antonio, Texas, U.S.A. if
such arbitration is instituted by Sumika and (ii) Osaka, Japan
if instituted by BioNumerik. Judgment upon award rendered by
the arbitrator(s) may be entered in any court of competent
jurisdiction in the United States or Japan .
17 MISCELLANEOUS
17.1 WAIVERS: Failure of either Party at any time to require
strict performance by the other Party of any of the provisions
of the Agreement shall in no way affect the right thereafter
to enforce the same, nor shall the waiver of any term,
provision, covenant or condition hereof be taken or held to be
a waiver of any
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13
subsequent breach thereof or as nullifying the effectiveness
of such term, provision, covenant or condition.
17.2 COUNTERPARTS: This Agreement may be executed in two or more
counterparts, which all together shall constitute one
instrument.
17.3 ENTIRE AGREEMENT: This Agreement and its annexes, as well as
the Confidentiality Agreement and the Materials Transfer
Agreement dated March 13, 2000 by and between BioNumerik and
Sumika, embody the entire understanding of the Parties and
shall supersede all previous communications, representations,
or understandings, either oral or written, between the Parties
relating to the subject matter hereof.
17.4 AMENDMENTS: No amendments or modifications of this Agreement
will be deemed legally binding unless made in writing and
signed by both Parties hereto.
17.5 SEVERABILITY: In case one or more of the provisions contained
in this Agreement shall, for any reason, be held invalid,
illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be
construed by amending or limiting such invalid, illegal, or
unenforceable provision so as to conform as closely as
possible to the intent of the Parties or, if such is not
possible, by deleting such provision from this Agreement.
17.6 ANNEXES: The Annexes form an integral part of this Agreement.
Should any internal discrepancies or variances occur between
this Agreement and its Annexes, the Agreement shall take
precedence.
17.7 HEADINGS: The headings in this Agreement may not be used in
the interpretation of any provisions hereof.
17.8 USE OF NAMES: Except as expressly required pursuant to law,
neither Party will without prior written consent of the other:
(a) Use in advertising, publicity, promotional premiums
or otherwise, any trade name, trademark, trade
device, service mark, symbol, or any abbreviation,
contraction or simulation thereof owned by the other
Party, or
(b) Represent, either directly or indirectly, that any
product or service of one Party is a product or
service of the other.
17.9 LANGUAGE: The Parties have requested that this Agreement and
all related documents be in English.
17.10 COPIES: This Agreement is established in two (2) copies with
identical language: One copy for BioNumerik and one copy for
Sumika.
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14
In Witness Hereof,
the Parties hereto through their authorized representatives have
executed this Agreement as of the date first written above.
SUMIKA FINE CHEMICALS CO., LTD.
By: \s\ Z. WAKAYASHI
----------------------------------------------
Title: Managing Director, Marketing & Sales
Date: 4/10/01
----------------------------------------------
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BIONUMERIK PHARMACEUTICALS, INC.
By: \s\ FREDERICK H. HAUSHEER
----------------------------------------------
Title: Chairman and Chief Executive Officer
Date: 4/12/01
----------------------------------------------
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AGREED TO SECTION 7 AND ATTESTED BY:
GRELAN PHARMACEUTICAL CO., LTD.
By: \s\ H. KANAZAWA
----------------------------------------------
Title: C.O.O. and Vice President -- Director
Date: 4/12/01
----------------------------------------------
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15
ANNEX 1
QUALITY SPECIFICATIONS AND METHODS
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
ANNEX 2 SUMIKA PRICE SCHEDULE
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
ANNEX 3: SUMIKA WIRE TRANSFER INFORMATION
SUMITOMO MITSUI BANKING CORPORATION
OSAKA HEAD OFFICE
6-5 KITAHAMA, 4-CHOME, CHUO-KU,
OSAKA 541-0041
ACCOUNT NO. 2929482
ANNEX 4
(3 Pages)
LIST OF DMF REQUIREMENTS DATA FOR BNP7787 AND
RESPONSIBLE PARTY FOR DATA/INFORMATION ACQUISITION
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
EXHIBIT 10.6
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
BETA TEST AGREEMENT
This Agreement is made effective as of the 1st day of March, 2001,
between BioNumerik Pharmaceuticals, Inc., with a place of business at 8122
Datapoint Drive, Suite 1250, San Antonio, Texas 78229 ("BioNumerik"), and Cray
Inc., with a place of business at 411 1st Avenue S. Suite 600, Seattle, WA
98104-2860 ("CRAY").
RECITALS:
WHEREAS BioNumerik and a predecessor of CRAY entered into a Beta Test
Agreement, dated as of August 18, 1994, as amended.
WHEREAS, BioNumerik and CRAY wish to amend and restate the Beta Test
Agreement to add Cray as a party and provide for the use and evaluation of
computer systems and software and the provision of certain services different
from those described in the original Beta Test Agreement.
WHEREAS, BioNumerik and CRAY have therefore determined to amend and
restate the Beta Test Agreement with amended terms that will govern the
relationship between the parties with respect to such computer systems, software
and services.
WHEREAS, this Agreement is a contractual arrangement between CRAY and
BioNumerik in which CRAY will provide BioNumerik with the use of certain CRAY
products for the purposes of testing the products and BioNumerik will provide to
CRAY information and data pertaining to their testing which CRAY may use without
charge to modify, improve or market the products,
Now, therefore, the parties agree as follows:
1. Definitions. For purpose of this Agreement, the following words, terms
and phrases shall have the meanings set forth below:
1.1 "Beta Test Period" shall mean the period of time described in
Section 2.1 during which testing of and adjustments to the
products contemplated hereunder will be undertaken.
1.2 "Equipment" shall mean the computer system products described
in Exhibit A to this Agreement, together with any additions,
modifications or enhancements thereto provided by CRAY under
the terms of this Agreement.
1.3 "Software" shall mean the software products described in
Exhibit A to this Agreement, together with any additions,
modifications or enhancements thereto provided by CRAY under
the terms of this Agreement.
1.4 "Documentation" shall mean the user manuals and other
documentation with respect to the Equipment and Software that
are provided to BioNumerik during the term of this Agreement.
1.5 "Products" shall mean Equipment, Software and Documentation.
1.6 "Principal Contacts" shall mean the individuals designated by
the parties to act as principal points of contact regarding
matters related to this Agreement.
1.7 "Confidential Information" shal1 mean the Software, and all
other information that is (i) disclosed by either party in any
tangible form and clearly labeled or marked as confidential,
proprietary or its equivalent, or (ii) disclosed by either
party orally or visually, and designated confidential,
proprietary or its equivalent at the time of its disclosure
and summarized in writing and clearly marked or labeled as
confidential, proprietary or its equivalent within thirty (30)
days of disclosure.
2. Beta Test Period and Obligations.
2.1 Beta Test Period. BioNumerik agrees to act as a beta test site
for the Products for the Beta Test Period. The Beta Test
Period shall be the term of this Agreement.
2.2 Beta Test Site. The beta test site shall be the principal
offices of BioNumerik located at the address set forth above.
2.3 Beta Test Obligations. During the Beta Test Period, BioNumerik
and CRAY shall each undertake and perform their respective
obligations as set forth below.
2.4 Specifications. BioNumerik shall participate with CRAY in the
development of the specifications for the installation and
operation of the Products.
2.5 Testing. During the Beta Test Period BioNumerik agrees to run
such test suites and other test programs as may be provided by
CRAY. CRAY may request that BioNumerik use special and
non-standard operating procedures for the testing of the
Products; BioNumerik shall not unreasonably withhold its
consent to such a request.
2.6 Error Notice. BioNumerik's Principal Contact shall notify
CRAY's Principal Contact of any material failure, error or
other malfunction of any part of the Products.
BETA TEST AGREEMENT
PAGE 2
2.7 Access. During the Beta Test Period, BioNumerik will grant
CRAY access to the Products and allow CRAY to gain access to
the operational data contemplated under this Agreement at such
reasonable times as may be required by CRAY for the reasonable
purposes of CRAY with respect to the development and sale of
their equipment.
BETA TEST AGREEMENT
PAGE 3
2.8 Modifications. During the Beta Test Period, BioNumerik's
Principal Contact will consult with CRAY 's Principal Contact
regarding the performance of the Products and will evaluate
the test data and error reports provided by BioNumerik. Should
CRAY modify or improve the Products as a result of
BioNumerik's testing, CRAY will provide such modification or
improvement to BioNumerik at no cost.
2.9 Use. During the term of this Agreement, CRAY shall loan the
Products to BioNumerik. BioNumerik shall use the Products only
for the evaluation of the Products under this Agreement and
BioNumerik's internal business purposes. Subject to Section
12.6, BioNumerik will not offer for sale or otherwise offer or
deliver the Products to any third party. BioNumerik will at
all times cause the Products to be maintained and operated by
qualified personnel in accordance with applicable manuals,
will keep the Products in the environment specified in CRAY's
Site Planning Manual, and will comply with the requirements of
CRAY's insurers which are provided to BioNumerik in writing.
CRAY may at any time during normal business hours inspect the
Products to ascertain compliance with this Section 2.9. Any
equipment which BioNumerik purchases from CRAY during or prior
to the period of this agreement, will be wholly owned by
BioNumerik and governed only by the term of the purchase
contract, but portions of such systems which are not
purchased, but provided by CRAY and added to the Products
list, will be covered under this agreement.
2.10 License. CRAY hereby grants a single, non-transferable and
non-exclusive license to use the Software during the term of
this Agreement. No rights to sublicense or distribute the
Software are granted. All rights not specifically granted to
BioNumerik by this license shall remain in CRAY. CRAY may
include features in the Software which restrict unlicensed use
or use of the Software or related data after license
expiration. The Software may be used by BioNumerik only on the
Equipment or on equipment purchased by BioNumerik from CRAY.
BioNumerik shall not modify, clone, reverse assemble, or
reverse compile any part of the Software or adopt any part of
the Software as its own. BioNumerik shall not translate the
Software into a computer language (e.g., FORTRAN or "C")
different from the language in which it was provided to
BioNumerik by CRAY. BioNumerik is licensed to use only the
binary format of the Software unless otherwise agreed in
writing by CRAY. The Software is not designed or licensed for
use in on-line control equipment in hazardous environments
such as operation of nuclear facilities, aircraft navigation
or control, life support systems or medical procedures.
BioNumerik assumes all risk for any such application and
agrees to indemnify CRAY and its suppliers for any and all
damages that may be incurred due to the use of Software in
such applications. BioNumerik acknowledges that the Software
is proprietary and shall remain the property of CRAY or its
suppliers. Notwithstanding the foregoing, BioNumerik shall
retain all ownership and rights to and may freely use
BioNumerik's own proprietary drug design and molecular
simulation software and no license is granted to CRAY with
respect to such software.
BETA TEST AGREEMENT
PAGE 4
2.11 Subject to CRAY 's business priorities and needs, CRAY shall
provide reasonable technical assistance to BioNumerik in the
use and operation of the Products.
3. Product Installation. BioNumerik will ensure that the site is
adequately prepared to receive the Products. CRAY will ship the
Products at no cost to BioNumerik, install them and run its tests to
verify proper installation. The Products shall be installed by CRAY at
the times described in Exhibit B hereto. BioNumerik shal1 cooperate and
assist with the installation of the Products as reasonably necessary.
Upon sixty (60) days notice to BioNumerik, CRAY shall also be permitted
to install any modifications to the Products CRAY deems necessary to
the proper function of the Products or to achieve the objectives of
this Agreement. During the term of this Agreement, the parties may
agree to the installation of other equipment or software that is
additional to the Equipment or Software, or a modification to the
Equipment or Software. All such additional equipment or modifications
shall be deemed Equipment or Software that is subject to the terms of
this Agreement. In addition to the use of the Products and to
facilitate BioNumerik's performance of its obligations hereunder,
during the term of this Agreement CRAY shall grant BioNumerik access to
the CRAY datacenter systems described in Exhibit A to this Agreement,
subject to the availability of such systems in CRAY 's datacenter and
CRAY s business priorities and needs.
4. Title and Risk of Loss. Title to all Products remains with CRAY.
BioNumerik shall not sell the Products or encumber their title. CRAY
assumes all risk of loss of or damage to Products throughout the Beta
Test Period, except that BioNumerik will be responsible for loss or
damage caused by negligence of BioNumerik or by environmental factors
at the installation site.
5. Obligations of BioNumerik. During the term of this Agreement,
BioNumerik shall evaluate the Products and provide the results of that
evaluation to CRAY as services described in Exhibit B to this
Agreement, and shall provide the other services described in that
Exhibit B in the times and in the manner described therein.
6. Principal Contacts. Each party shall designate an individual to act as
the primary point of contact with the other party with respect to
issues related to the use of the Products, the obligations of
BioNumerik and other matters related to this Agreement. The initial
Principal Contacts are designated in Exhibit D to this Agreement. A
party may change its Principal Contact by giving notice to the other
party.
7. Warranty. THE PRODUCTS PROVIDED TO BIONUMERIK UNDER THIS AGREEMENT ARE
PROVIDED "AS IS", AND CRAY MAKES NO WARRANTY OF ANY KIND WITH RESPECT
TO THE PRODUCTS, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR FREEDOM FROM
VIOLATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, WHICH ARE HEREBY
SPECIFICALLY EXCLUDED.
BETA TEST AGREEMENT
PAGE 5
8. Indemnification.
8.1 Cray shall indemnify BioNumerik and hold BioNumerik harmless
from all damages and all reasonable expenditures incurred by
BioNumerik as the result of any charge or claim of copyright
infringement or violation of proprietary rights asserted
against BioNumerik by third parties as a result of
BioNumerik's use of the Products hereunder, provided that CRAY
is given prompt notice of any such claim and BioNumerik
provides reasonable assistance to CRAY in connection with such
claims.
8.2 Should the Products become, or in CRAY's opinion be likely to
become, the subject of a claim of infringement of a copyright
or violation of proprietary rights of another, CRAY may either
(i) procure for BioNumerik the right to continue to use the
Products as contemplated hereunder, or (ii) replace or modify
the Products to make the use and distribution of the Licensed
Products hereunder non-infringing. If neither option is
reasonably available to CRAY, this Agreement may be terminated
by either party at any time upon written notice subject to the
obligation of indemnification set forth above.
8.3 CRAY shall have no liability for any claim of copyright
infringement or violation of proprietary rights to the extent
such claim is based on the use of the Products in a manner
other than is permitted under this Agreement or is based on a
modification of the Products by or for BioNumerik or a third
party, or any failure to implement any modification to the
Products supplied by CRAY.
8.4 BioNumerik shall indemnify CRAY and hold CRAY harmless from
all damages and all reasonable expenditures incurred by CRAY
as the result of any charge or claim asserted against CRAY by
third parties resulting from BioNumerik's use of the results
of the use of the Products, other than any charge or claim of
copyright infringement or violation of proprietary rights, as
a result of BioNumerik's use of the Products hereunder,
provided that BioNumerik is given prompt notice of any such
claim and CRAY provides reasonable assistance to BioNumerik in
connection with such claims.
9. Limitation of Liability.
9.1 NEITHER PARTY SHALL BE LIABLE FOR ANY LOSS OR DAMAGE CAUSED BY
DELAY IN FURNISHING THE PRODUCTS OR SERVICES UNDER THIS
AGREEMENT, OR BY DELAY IN ANY OTHER PERFORMANCE UNDER OR
PURSUANT TO THIS AGREEMENT.
9.2 IN NO EVENT WILL EITHER PARTY'S LIABILITY OF ANY KIND INCLUDE
ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR
DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL
LOSS OR DAMAGE
BETA TEST AGREEMENT
PAGE 6
10. Term and Termination.
10.1 This Agreement shall take effect as of the date first written
above and, unless earlier terminated as provided in Section
10.2 below, shall remain in effect for the initial Beta Test
Period of three (3) years after March 1, 2001. Thereafter,
this Agreement shall be automatically renewed for up to two
additional periods of one (1) year each, unless either party
shall have given notice to the other of its intention not to
renew not later than the date ninety (90) days prior to the
beginning of any renewal term of this Agreement.
10.2 This Agreement may be terminated in accordance with the
following provisions:
(a) Either party may terminate this Agreement by giving
notice in writing to the other party in the event the
other party is in breach of this Agreement and shall
have failed to cure such breach within thirty (30)
days of receipt of written notice thereof from the
first party.
(b) Either party hereto may terminate this Agreement at
any time by giving notice in writing to the other
party, which notice shall be effective upon dispatch,
should the other party file a petition of any type as
to its bankruptcy, be declared bankrupt, become
insolvent, make an assignment for the benefit of
creditors, go into liquidation or receivership, or
otherwise lose legal control of its business, or
should the other party or a substantial part of its
business come under the control of a third party.
(c) CRAY may terminate this Agreement upon sixty (60)
days notice if Dr. Hausheer terminates his
relationship with BioNumerik.
10.3 Upon the termination of this Agreement, the parties shall have
the following rights and obligations:
(a) The licenses granted to BioNumerik in this Agreement
shall terminate immediately, and BioNumerik shall
make the Products available to CRAY for
deinstallation and return and shall assist CRAY with
such deinstallation to the extent reasonably
necessary.
(b) Each party shall promptly return to the other all
copies then in its possession of Confidential
Information provided by the other party.
(c) The provisions of Sections 4, 7, 8, 9 and 11 of this
Agreement shall survive.
BETA TEST AGREEMENT
PAGE 7
11. Confidentiality.
11.1 A party receiving Confidential Information shall restrict the
use of the Confidential Information to those purposes
necessary for the exercise of the receiving party's rights, or
performance of the receiving party's obligations under this
Agreement. During the term of this Agreement and thereafter,
each party shall safeguard against disclosure of the
Confidential Information to third parties using the same
degree of care to prevent disclosure as it uses to protect its
own information of like importance, but at least reasonable
care. A party may make only the minimum number of copies of
any Confidential Information required to carry out the purpose
of this Agreement. All proprietary and copyright notices in
the original must be affixed to copies or partial copies.
11.2 Neither party shall be obligated to maintain any information
in confidence or refrain from use if, (i) the information was
in the receiving party's possession or was known to it prior
to its receipt from the disclosing party, (ii) the information
is independently developed by the receiving party without the
utilization of Confidential Information of the disclosing
party, (iii) the information is or becomes public knowledge
without fault of the receiving party, (iv) the information is
or becomes available on an a nonconfidential basis to the
receiving party from a source other than the disclosing party,
(v) the information becomes available on a non-confidential
basis to a third party from the disclosing party or from
someone acting under its control, or (vi) the information is
publicly disclosed (i.e. not under adequate protective order)
by the receiving party under an order of a court or government
agency, provided that the receiving party provides prior
written notification to the disclosing party of such
obligation and the opportunity to oppose such order.
12. General.
12.1 This Agreement does not make either party the agent or legal
representative of the other for any purpose whatsoever.
Neither party is granted any right or authority to assume or
to create any obligation or responsibility, express or
implied, on behalf of or in the name of the other party. In
fulfilling its obligations pursuant to this Agreement, each
party shall be acting as an independent contractor.
12.2 Neither party shall have the right to assign or otherwise
transfer its rights and obligations under this Agreement
except with the prior written consent of the other party. Any
prohibited assignment shall be null and void. Notwithstanding
the foregoing, subject to the provisions of Section 10.2(b)
either party may assign this Agreement without approval to an
entity that succeeds to all or substantially all of the
party's business or assets (by acquisition, merger or
BETA TEST AGREEMENT
PAGE 8
otherwise), so long as Dr. Frederick Hausheer remains in a
similar capacity with BioNumerik, its successors or assigns.
12.3 Notices permitted or required to be given hereunder shall be
deemed sufficient if given by registered or certified mail,
postage prepaid, return receipt requested, addressed to the
respective addresses of each party as first above written or
at such other addresses as the respective parties may
designate by like notice from time to time. Notices shal1 be
effective upon the earlier to occur of (i) receipt by the
party to which notice is given, or (ii) the third (3rd)
business day following the date such notice was posted.
12.4 This Agreement constitutes the entire agreement between the
parties with respect to the testing, evaluation and loan of
the Products and supersedes all previous agreements by and
between the parties related thereto, as well as all proposals,
oral or written, and all negotiations, conversations or
discussions held between the parties related to this
Agreement.
12.5 This Agreement shall not be deemed or construed to be
modified, amended, rescinded or waived, in whole or in part,
except by written amendment signed by both parties.
12.6 The terms of this Agreement are confidential and no party
shall issue press releases or engage in other types of
publicity of any nature dealing with the commercial and legal
details of this Agreement, or any information regarding the
performance of the products of the other party, without the
other party's prior written approval, which approval shall not
be unreasonably withheld. However, approval of such disclosure
shall be deemed to have been given to the extent such
disclosure is required to comply with governmental rules,
regulations or other governmental or legal requirements. In
such event, the publishing party shall furnish a copy of such
disclosure to the other party. Notwithstanding the foregoing,
BioNumerik shall retain the right to (i) demonstrate the
Products to third parties in accordance with the performance
of its obligations hereunder, and (ii) disclose the existence
of this Agreement in its informational material and the
material terms of this Agreement to its shareholders and
potential shareholders.
12.7 In the event that any of the terms of this Agreement are in
conflict with any rule of law or statutory provision or
otherwise unenforceable under the laws or regulations of any
government or subdivision thereof, such terms shall be deemed
stricken from this Agreement, but such invalidity or
unenforceability shall not invalidate any of the other terms
of this Agreement and this Agreement shall continue in force,
unless the invalidity or unenforceability of any such
provisions of this Agreement does substantial violence to, or
where the invalid or unenforceable provisions comprise an
integral part of, or are otherwise inseparable from, the
remainder of this Agreement.
BETA TEST AGREEMENT
PAGE 9
12.8 This Agreement may be executed in two or more counterparts and
each such counterpart shall be deemed an original of this
Agreement.
12.9 No failure by either party to take any action or assert any
right hereunder shall be deemed to be a waiver of such right
in the event of the continuation or repetition of the
circumstances giving rise to such right.
12.10 This Agreement shall be governed by, and interpreted and
construed in accordance with the laws of the State of
Washington.
BIONUMERIK PHARMACEUTICALS, INC. CRAY INC.
By: /s/ FREDERICK H. HAUSHEER, M.D. By: /s/ JIM ROTTSOLK
Name: Frederick H. Hausheer, M.D. Name: Jim Rottsolk
Title: Chief Executive Officer Title: Chief Executive Officer
Date: June 27, 2001 Date: June 27, 2001
|
BETA TEST AGREEMENT
PAGE 10
EXHIBIT A
EQUIPMENT AND SOFTWARE
None.
BETA TEST AGREEMENT
PAGE 11
EXHIBIT B
PRODUCTS
Software Product
[**]
Cray Datacenter Systems
[**]
For purposes of this agreement, an hour of CPU time is measured as one CPU hour
of [**] time. CPU time on other systems is measured relative to a Cray [**]
based on the theoretical peak performance (the number of CPUs or Processing
Elements (PE's) employed times the theoretical peak performance of a single CPU
or PE) of the other system.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
BETA TEST AGREEMENT
PAGE 12
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
BETA TEST AGREEMENT
PAGE 13
EXHIBIT C
BIONUMERIK EVALUATION AND OTHER SERVICES
I. Ongoing Obligations
BioNumerik shall provide specific feedback to Cray Inc. with respect to the
appropriateness of their hardware and software for the purpose of computational
drug design. The specifics of the testing will be determined by Barry Bolding of
Cray Inc. but as a minimum will include such metrics as benchmark results for
specific codes on specific applications, scalability (if appropriate) of the
hardware in question, and reliability of the hardware/software environment. Such
test results will NOT be released to anyone other than Cray Inc. without
specific, written approval of Cray Inc.
II. Annual Obligations
A. BioNumerik shall send Dr. Hausheer to the annual Cray Inc. Executive
CUG session each year for informal discussions regarding the use of
computational methods in drug design. The decision to use Dr. Hausheer
as an included talk will rest with the Marketing Principal Contact of
Cray Inc.
B. BioNumerik shall permit Dr. Hausheer to participate in a yearly
Symposium sponsored by Cray Inc. The symposia may be in a different
location each year and it is envisioned that approximately half will be
overseas. Responsibility for scheduling the Symposia, attracting an
audience, promoting it within Cray Inc. and coordinating inside the
organization shall rest with the Technical Point of Contact of Cray
Inc.
C. BioNumerik shall participate in an annual review of the progress both
parties have made against their obligations under the Agreement. The
Cray Inc. Principal Contact will work with BioNumerik to schedule a
1-day session at BioNumerik headquarters to review the Agreement and
the progress made.
III. Additional Obligations
A. BioNumerik shall prepare and endeavor to publish papers for each of the
drugs developed using computational methods. The papers will be
published in journals that qualify as "scholarly" and require peer
review as part of the publication process. The publications should take
place as soon as possible but should not occur before BioNumerik has
taken sufficient measures to protect itself through the appropriate
patent process.
B. With sufficient notice, BioNumerik shall send Dr. Hausheer to Seattle,
WA and/or Eagan MN to meet with selected customers for the purpose of
discussing computational methods in drug design. Alternatively, the
meetings may take place at the customers' place of business. The
decision as to the results of the specific customer visit will rest
with the Technical Point of Contact of Cray Inc.
C. With sufficient notice, BioNumerik shall host selected customers at
their location for the purpose of discussing computational methods in
drug design. The decision as to the results of the specific customer
visit will rest with the Technical Point of Contact of Cray Inc.
D. BioNumerik shall provide a presentation (e.g. PowerPoint) of at least
one computational chemistry drug design "success story" which may be
shown to selected customers with the purpose of discussing
computational methods used in drug design. It is envisioned that at
least one additional presentation will be made available to the
Technical Point of Contact of Cray Inc. during each year of the term of
this agreement.
E. BioNumerik shall endeavor to help Cray Inc. define the "value
proposition" offered by Cray Inc. products within the pharmaceutical
industry. Through discussion, email or other interactions, Dr. Hausheer
will interact with the Marketing Point of Contact of Cray Inc. to
clarify the added value which Cray Inc. products offer this industry.
BETA TEST AGREEMENT
PAGE 14
BETA TEST AGREEMENT
PAGE 15
EXHIBIT D
PRINCIPAL CONTACTS
The BioNumerik Principal Contact shall be Dr. Fred H. Hausheer; and Dr. Jeffrey
Saxe and Dr. P. Seetharamulu shall act as alternate Principal Contacts.
The Cray Inc. Principal Contact shall be:
1. With respect to the technical aspects of the relationship established in
this Agreement, Eric Pitcher or his subsequent designee.
2. With respect to marketing aspects of the relationship established in this
Agreement, Eric Pitcher or his subsequent designee.
3. With respect to the general terms of the relationship established in this
Agreement, Eric Pitcher.
Cray Inc. shall reimburse BioNumerik for all reasonable out-of-pocket expenses
of the BioNumerik Principal Contact in satisfying BioNumerik's obligations under
this Agreement, including, but not limited to travel, lodging, meals, and a
negotiated per diem. All services provided by the BioNumerik Point of Contact
under this Agreement will be subject to the obligations of the BioNumerik Point
of Contact to BioNumerik, and Cray Inc. will cooperate with the BioNumerik Point
of Contact to avoid any interference with the operation of BioNumerik.
BETA TEST AGREEMENT
PAGE 16
EXHIBIT 10.7
ASHFORD OAKS OFFICE BUILDING
OFFICE LEASE AGREEMENT
STATE OF TEXAS Section
COUNTY OF BEXAR Section
THIS LEASE (herein so called, both in reference to this Agreement and to
the real estate transaction between Landlord and Tenant), made and entered into
by and between BUILDING ACQUISITION CORPORATION, a Texas Corporation
("Landlord"), and BioNumerik Pharmaceuticals, a Limited Liability Co.
(hereinafter called "Tenant").
W I T N E S S E T H:
Effective on the execution of this Lease (even if the Commencement Date is
a later date), Landlord hereby leases to Tenant., and Tenant hereby takes from
Landlord, the Demised Premises described in this Agreement, as depicted by the
floor plan attached as Exhibit "A", in the office building named as the
"Building" below, for the Term set forth in Section 1.1(m) and on the following
terms, conditions and covenants:
ARTICLE I
FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS
The following list sets out the Fundamental Lease Provisions and certain
other definitions pertaining to this Lease:
1.1 Fundamental Lease Provisions.
(a) "Landlord": Building Acquisition Corporation.
(b) Landlord's Mailing Address: Ashford Oaks Office Bldg.,
8122 Datapoint Drive, Suite 316, San Antonio, Texas 78229; Attn: Mission City
Properties, Inc., Manager, Suite 316.
(c) "Tenant": same as above
(d) Tenant's Mailing Address:
1
(i) Before the Commencement Date: 8122 Datapoint
Drive, Suite 700, San Antonio, Texas 78229.
(ii) After the Commencement Date: 8122 Datapoint Drive,
Suite 1250, San Antonio, Texas 78229.
(e) "Guarantor(s)" (if applicable, Guaranty attached as
Exhibit "E"): N/A
(f) Guarantor's Street Address: N/A
(g) "Building" (including street address): Ashford Oaks
Office Building, 8122 Datapoint Drive, San Antonio, Texas 78229.
(h) "Premises": The portion of the Building to be leased
pursuant to this Lease, as shown on the attached Exhibit "A", containing
approximately 5,464 square feet of Rentable Area. The address of the Premises is
Ashford Oaks Office Building, 8122 Datapoint Drive, Suite 1250, San Antonio.
Texas 78229.
(i) "Base Rental": See Exhibit G "Addendum".
(j) "Security Deposit": $ N/A
(k) "Anticipated Commencement Date": May 1, 1992.
(l) "Commencement Date": The date on which the Premises are
"ready for occupancy," as defined in Rider 101.
(m) "Term": The period of sixty (60) months beginning with
the first day of the first full calendar month after the Commencement Date (or
beginning on the Commencement Date if that date is the first day of a calendar
month).
(n) "Area of the Building": 192,472 square feet, the
stipulated total number of square feet of Rentable Area in the Building.
(o) "Area of the Premises": 5,464, the stipulated number of
square feet of Rentable Area of the Premises.
(p) "Landlord's Operating Cost Contribution": $ 5.00 for
each square foot in the Area of the Building.
(q) "Broker": Trinity Asset Management, Inc.
(r) "Use": General office purposes and basic and applied
medical research related lab facilities provided however the Premises may not be
used for any laboratory research on materials which involve infectious strains
of Human Immunodeficiency Virus.
1.2 Certain Definitions.
(a) "Rentable Area": Area computed in accordance with the
current American National Standard adopted by the Building Owners and Managers
Association International ("BOMA").
2
(b) "Tenant's Pro Rata Share": The Area of the Premises
divided by the Area of the Building calculated as 2.84%.
(c) "Building Facilities": All equipment, machinery,
facilities and other personal property located in the Building or on the Land
(as hereinafter described) and/or used or utilized solely in connection with the
operation and/or maintenance of the Building, or any part thereof.
(d) "Land": The parcel of real property more particularly
described in Exhibit "B" attached hereto, on which the Building is located.
(e) "Protect": The Land and the Building, parking related
thereto, all Building Facilities and all appurtenances pertaining to the
foregoing.
(f) "Common Area(s)": The portion of the Building which is
for the common use of all Tenants (and their customers, clients, invitees,
contractors), including among other facilities, corridors, tunnels, elevator
foyers, rest rooms, mechanical rooms, janitorial closets, electrical and
telephone closets, vending areas, lobby areas, drinking fountains, meeting
rooms, general tenant benefit or amenity areas, sidewalks, curbs, enclosed mall
areas, loading areas, lighting facilities, delivery passages, decks and other
parking facilities, landscaping, and other common rooms and common facilities.
(g) "Service Areas": "Service Areas" will refer to areas,
spaces, facilities and equipment serving the Building (whether or not located
within the Building) but to which Tenant and other occupants of the Building
will not have access, including, but not limited to, mechanical, telephone,
electrical and similar rooms, air and water refrigeration equipment and
management areas.
(h) "Lease Year": A period of twelve (12) consecutive
calendar months (during the Term) beginning on January 1 and ending on December
31, except that the first Lease Year begins on the Commencement Date of this
Lease and ends on the next following December 31 and the last Lease Year begins
on January 1 of the calendar year in which the Term ends and ends on the last
day of the Term.
(i) "Rules": The Rules for the Building attached as Exhibit
"D", as modified from time-to-time in accordance with Section 4.2.
1.3 Other Definitions. Other terms defined in this Lease have the
meanings assigned to them elsewhere in this Lease.
ARTICLE II
MONETARY PROVISIONS
2.1 Base Rental. Tenant shall pay to Landlord. without offset or
deduction, Base Rental for the Premises in monthly installments in advance. Rent
begins to accrue hereunder on the Commencement Date. One such monthly
installment shall be made on or before the date of
3
execution of this Lease, and the first day of each calendar month during the
Term, beginning with the second month. Rent for any partial month shall be
prorated on a per diem basis.
2.2 Tenant's Share of Certain Cost . In addition to other sums due
from Tenant under this Lease, Tenant shall pay to Landlord, in the manner and at
the times set forth below, Tenant's Pro Rata Share of Operating Costs, including
Energy Costs, for each Lease Year:
(a) Operating Costs. "Operating Costs" means all costs,
charges, and expenses incurred by Landlord in connection with owning operating,
maintaining, repairing, insuring and managing the Building, and the Building's
portion of the Common Areas and Service Areas. computed on an accrual basis and
including, without limitation, costs, charges and expenses incurred with respect
to the items enumerated as "Operating Cost Examples" in Paragraph A of Exhibit
"C" to this Lease (which include amortization of certain capital improvements),
and including Energy Costs. Operating Costs do not include those items
enumerated as "Operating Cost Exclusions" to Paragraph B of Exhibit "C" to this
Lease. "Energy Costs" means the costs incurred by Landlord for (i) any and all
forms of fuel or energy utilized in connection with the operation, maintenance,
and use of the Building, Common Areas and Service Areas, (ii) sales, use, excise
and other taxes assessed by Governmental authorities on energy sources, and
(iii) other reasonable costs of providing energy to the Building, Common Areas
and Service Areas. If less than 90% of the Area of the Building is occupied
during a lease Year, then for purposes of determining the Operating Costs for
that Lease Year, Operating Costs shall be determined as if the Building had been
occupied to that extent for that Lease Year, taking into account the fixed or
variable nature of the particular costs and expenses.
(b) Tenant's Pro Rata Share of Operating Costs. Tenant's Pro
Rata Share of Operating Costs for any Lease Year is computed by multiplying
Tenant's Pro Rata Share times Excess Operating Costs. "Excess Operating Costs"
means the difference between (i) the Operating Costs for a Lease Year minus (ii)
the product of (A) Landlord's Operating Cost Contribution multiplied times (B)
the Area of the Building.
(c) Estimated Costs. Tenant's Pro Rata Share of Operating
Costs for the remainder of the first Lease Year and for each subsequent Lease
Year of the Term shall be estimated in good faith by Landlord, and notice of the
estimated amounts will be given to Tenant at least 10 days before the
Commencement Date or the beginning of each Lease Year, as the case may be. For
each full Lease Year of the Term, Tenant shall pay to Landlord each month, at
the same time the monthly installment of Base Rental is due, an amount equal to
one-twelfth (1/12) of the estimated Tenant's Pro Rata Share of Operating Costs
due for that year. If the first and last Lease Years are less than full calendar
years, then Tenant shall pay to Landlord, each month for those Lease Years, at
the same time the monthly installment of Base Rental is due, an amount equal to
the amount of estimated Tenant's Pro Rata Share of Operating Costs for the
partial lease Year divided by the number of full calendar months of the partial
year, as supported with a written analysis upon request by Tenant.
(d) Estimate Revisions. At any time and from time to time
during the Term, Landlord may, by giving notice to Tenant, change the monthly
amount then payable by Tenant for Tenant's estimated Pro Rata Share of Operating
Costs to reflect more accurately, as supported with a written analysis upon
request by Tenant. Tenant's actual Pro Rata Share of Operating Costs for the
then current Lease Year. Tenant shall begin paying the revised estimated amount
4
together with the next monthly payment of Base Rental due after receipt by
Tenant of Landlord's notice.
(e) Annual Adjustments. On or before April 1 of each Lease
Year, Landlord will prepare and deliver to Tenant a statement setting forth the
calculation of the actual Tenant's Pro Rata Share of Operating Costs for the
previous Lease Year. Within 30 days after receipt of the statement of the actual
Tenant's Pro Rata Share of Operating Costs, Tenant shall pay to Landlord, or
Landlord will credit against the next rental or other payment or payments due
from Tenant, as the case may be, the difference between the actual Tenant's Pro
Rata Share of Operating Costs for the preceding Lease Year and the estimated
Tenant's Pro Rata Share of Operating Costs paid by Tenant during that year.
(f) Final Partial Year. If the Term expires or this Lease
terminates before a final determination of the actual Tenant's Pro Rata Share of
Operating Costs, then the amount of adjustment between the estimated Tenant's
Pro Rata Share and the actual Tenant's Pro Rata Share of Operating Costs payable
for the preceding Lease Year and/or the final partial Lease Year of the Term
will be estimated by the Landlord based on the best data available to Landlord
at the time of the estimate. Before the scheduled last day of the Term, or as
soon as possible after an earlier termination date, an adjustment will be made
between Landlord and Tenant. The obligations set forth in the preceding sentence
shall survive expiration or earlier termination of this Lease.
2.3 Personal Property Taxes. Tenant shall pay, before delinquency,
all taxes, fees or charges. Rates, duties and assessments that are imposed,
levied or assessed directly against Tenant, or indirectly through Landlord, and
payable during the Term hereof, on Tenant's equipment, furniture, movable trade
fixtures and other personal property located in the Premises. Tenant shall also
pay, before delinquency, business and other taxes, fees or charges, rates,
duties and assessments imposed, levied or assessed because of Tenant's occupancy
of the Premises or on the business or income of Tenant generated from the
Premises. In no event shall Tenant be required to pay taxes, fees or charges for
personal property outside of the Premises or that are part of the Common Area.
2.4 Taxes for Leasehold Improvements. If any authority levying
real and personal property taxes against the Building includes, as a standard
practice for determining the value of the Building for tax purposes, a component
for tenant improvements or nonmovable trade fixtures of individual tenants,
Tenant shall pay to Landlord any portion of those taxes which is attributable to
the value of tenant improvements or nonmovable trade fixtures in the Premises in
excess of the value (as of the first day of the Term or as of the date of such
levying, whichever date is used by the taxing authority) of Building standard or
existing improvements (collectively, "Above Standard Improvements"). On receipt
of any such tax statement, Landlord will compute Tenant's share of taxes
attributable to Above Standard Improvements, and submit a statement to Tenant
evidencing the method of calculation. Tenant shall pay to Landlord together with
the next monthly installment of Base Rental due after the receipt of Landlord's
statement the entire amount due under this Section 2.4. The method of
calculation of the share of taxes attributable to Above Standard Improvements
will be subject to adjustment by Landlord from time to time in order to reflect
the method currently utilized by taxing authorities to calculate taxes for Above
Standard Improvements. If Tenant is assessed for taxes for Above Standard
Improvements directly by the taxing authorities, then Tenant shall pay them
before delinquency and deliver to
5
Landlord copies of receipts for payment of those taxes and assessments no later
than ten (10) days before the deadline for payment without imposition of
penalty.
2.5 Late Payments.
(a) Late Charge. If any amounts due under this Lease from
Tenant to Landlord are not received by Landlord by the fifth (5th) calendar day
after the date due, then the amount past due is subject to a ten percent (10%)
late payment and service charge, payable by Tenant immediately on demand by
Landlord, to be applied to defray Landlord's administrative and other overhead
expenses.
(b) Administrative Reimbursement. If Landlord performs
construction, maintenance, or repairs for Tenant under Sections 6.3, 8.2 or 13.2
of this Lease, then Tenant shall reimburse Landlord within five (5) days after
receipt of an Invoice from Landlord for the cost of those items plus an amount
equal to percent (15%) of those costs ("Administrative Reimbursement") to
reimburse Landlord for administration and overhead.
2.6 Security Deposit. On its execution of this Lease, Tenant shall
deposit with Landlord, in addition to the advance payment of Base Rental
described to Section 2.1, the Security Deposit. The Security Deposit shall be
held by Landlord without interest as security for the performance of Tenant's
obligations under this Lease. The Security Deposit is not an advance payment of
rental or the full measure of liquidated damages on a default by Tenant. On an
Event of Default (hereinafter defined). Landlord may, from time to time and
without prejudice to any other remedy provided herein or by law, use the
Security Deposit to cure the Event of Default. After an application of the
Security Deposit, Tenant shall pay to Landlord, on demand, the amount necessary
to replenish Security Deposit to its original amount. On the expiration or
termination of the Term, any remaining, once of the Security Deposit shall be
returned by Landlord to Tenant if Tenant is not then in default.
Unless there has been a permitted assignment of this Lease
pursuant to Article XI, and in connection therewith Landlord receives written
notice of an assignment of the right to receive the Security Deposit or the
remaining balance thereof. Landlord may return the Security Deposit to the
original Tenant, regardless of one or more assignments of Tenant's interest in
the Security Deposit. In this event, on the return of the Security Deposit (or
balance thereof) to the original Tenant (or permitted assignee, as appropriate),
Landlord has no further liability with respect to the Security Deposit.
On a transfer of the Premises, this Lease or the Building Landlord
may transfer the Security Deposit to the transferee, after which Landlord is
released from all liability for the return of the Security Deposit. for which
Tenant shall look solely to the transferee.
ARTICLE III
PREMISES, COMMON AREAS, SERVICE AREAS
6
3.1 Required Condition Of Premises. Except to the extent that
Landlord is obligated to construct improvements in the Premises, as provided on
an exhibit attached to this Agreement. and except for Landlord's agreement to
complete or correct construction items, as described in the second paragraph of
this Section 3.1, the Premises are delivered to Tenant and are being leased "AS
IS" and "WITH ALL FAULTS," and Landlord makes no representation or warranty of
any kind, expressed or implied, with respect to the condition of the Premises
(including habitability, fitness or suitability for particular purpose of the
Premises, or that the Building or the improvements to the Premises have been
constructed in a good and workmanlike manner). TO THE MAXIMUM EXTENT PERMITTED
BY APPLICABLE LAW, LANDLORD HEREBY DISCLAIMS, AND TENANT WAIVES THE BENEFIT OF,
ANY AND ALL IMPLIED WARRANTIES, INCLUDING IMPLIED WARRANTIES OF HABITABILITY,
FITNESS OR SUITABILITY FOR PURPOSE, OR THAT THE BUILDING OR THE IMPROVEMENTS IN
THE PREMISES HAVE BEEN CONSTRUCTED IN A GOOD AND WORKMANLIKE MANNER. ENANT
EXPRESSLY ACKNOWLEDGES THAT LANDLORD DID NOT CONSTRUCT OR APPROVE THE QUALITY OF
CONSTRUCTION OF THE BUILDING.
The taking of possession of the Premises by Tenant conclusively
establishes that the Premises and the Building were at the Lime of occupancy in
satisfactory order and condition except for (i) minor matters of finish
adjustments to the Premises (commonly referred to as "punch list items")
specified in reasonable detail on a list delivered by Tenant to Landlord within
fifteen (15) days after the date on which Tenant takes possession of the
Premises and (ii) defects not discoverable on inspection and about which Tenant
notifies Landlord within 90 days after taking possession of the Premises.
Landlord neither makes nor offers any other construction warranties of any kind
or nature whatsoever.
3.2 Minor Variations in Area. The Area of the Premises contained
in Section 1.1(o) has been calculated in accordance with the foregoing
definitions and is agreed to be the Area of the Premises regardless of minor
variations resulting from construction of the Building and/or tenant
improvements.
3.3 Ceilings, Walls, Floors. Tenant acknowledges that pipes,
ducts, conduits, wires and equipment serving other parts of the Building may be
located above acoustical ceiling surfaces, below floor surfaces or within walls
in the Premises.
3.4 Common and Service Areas. Tenant is hereby granted a
non-exclusive right to use the Common Areas during the Term of this Lease for
their intended purposes, in common with others, subject to the terms and
conditions of this Lease, including, without limitation, the Rules.
3.5 Delay. If the Premises are not ready for occupancy by Tenant
on the Anticipated Commencement Date, for any reason other than a delay caused
by Tenant, the obligations of Landlord and Tenant shall nevertheless continue in
full force and effect. However, except as otherwise provided in Rider 101, the
Term of this Lease shall not begin and rent shall not begin to accrue until the
actual Commencement Date. The delay in commencement of the Term and in the
accrual of rent described in the foregoing sentence constitutes full settlement
of all claims that Tenant might otherwise have by reason of the Premises not
being ready for occupancy on the Anticipated Commencement Date.
7
If the Premises are not ready for occupancy by Tenant on the
Anticipated Commencement Date due to one or more delays caused by Tenant, or
anyone acting under or for Tenant, or due to any cause other than Landlord's
fault. Landlord has no liability and the obligations of Tenant under this Lease
(including, without limitation. the obligation to pay rent) shall nevertheless
begin as of the Commencement Date.
ARTICLE IV
USE
4.1 Permitted Use. The Premises shall be used and occupied only
for the purposes set forth in Section 1.1(r), and not otherwise. The Premises
are being used by Tenant for commercial business use and are not residential
property. Landlord represents that it has appropriate zoning necessary to lease
space for the uses set forth in Section 1.1 above.
4.2 Rules. Tenant's use of the Premises and the Common Areas are
subject at all times during the Term to the Rules attached to the Lease as
Exhibit "D" and to any modifications of those Rules and any additional Rules
from time to time promulgated by Landlord. Additional Rules will not become
effective and a part of this Lease until a copy of them has been delivered to
Tenant. The inability of Landlord to cause another occupant of the Building to
comply with the Rules will neither excuse Tenant's obligation to comply with the
Rules or any other obligation of Tenant under this Lease nor cause Landlord to
be liable to Tenant for any damage resulting to Tenant. Tenant shall cause
Tenant's employees, servants and agents to comply with the Rules.
4.3 Additional Covenants of Tenant.
(a) Laws, Statutes, Etc. Tenant shall, at Tenant's sole
cost, promptly comply with all laws, statutes, ordinances, regulations,
guidelines, restrictive covenants or requirements now in force or hereafter
enacted including, without limitation, (a) the Americans With Disabilities Act
of 1990, and (b) OSHA standards, including, without limitation, 29 C. F. R.
Section 1910.1030 (dealing with bloodborne pathogens), and with the requirements
of any governmental authority having jurisdiction over the Building, board of
fire underwriters, utility company serving the Building or other similar body
now or hereafter constituted, relating to or affecting the condition, use or
occupancy of the Premises. The judgment of any court of competent jurisdiction
or the admission of Tenant in any action against Tenant, whether Landlord is a
party thereto or not, that Tenant has violated any of the foregoing is
conclusive of that fact between Landlord and Tenant.
(b) Nuisance. Tenant shall not do or permit anything to be
done in or about the Premises which will in any way obstruct or interfere with
the operation of the Building or Common Areas or with the rights of other
tenants or occupants of the Building or Cannon Areas or Injure, disturb or annoy
other tenants or occupants of Building or Common Areas.
8
(c) Building Reputation. Tenant shall not use or permit the
Premises to be used for any objectionable purpose or any purpose which, in the
reasonable opinion of the Landlord, harms or tends to harm the business or
reputation of the Landlord or Building or reflects unfavorably on the Building,
or any part of the Building, or deceives or defrauds the public.
(d) Fire Hazards. Tenant shall not cause, maintain or permit
anything to be done in the Premises nor keep anything in the Premises which
will, to the opinion of Landlord, increase the possibility of fire or other
casualty or increase the then existing premiums for or void the coverage of any
insurance on the Building or contents of the Building.
4.4 Control of Building and Common Areas. The Building and
Common Areas will be at all times under the exclusive control, management and
operation of Landlord. Landlord may from time to Lime (i) alter or redecorate
the Building (including the Common Areas or Service Areas) or construct
additional facilities adjoining or approximate to the Building; (ii) close
temporarily doors, entry ways, public spaces and corridors and interrupt or
suspend temporarily Building services and facilities in order to perform any
redecorating or alteration or in order to prevent the public from acquiring
prescriptive rights in the Common Areas; and (iii) change the name of the
Building.
4.5 Minimization of Disruption. Landlord will attempt not to
disrupt Tenant's operations in the Premises during the exercise of Landlord's
rights of Section 4.4 or 7.1, but is not required to incur extra expenses to
order to minimize the disruption. Tenant hereby waives all claims for damages or
injuries or interference with Tenant's business, loss of occupancy or quiet
enjoyment and any other laws resulting from the reasonable exercise by Landlord
of any right under Section 4.4 or 7.1. No reasonable exercise by Landlord of any
right under Sections 4.4 or 7.1 constitutes actual or constructive eviction or
breach of any expressed or implied covenant for quiet enjoyment.
ARTICLE V
SERVICES AND UTILITIES
5.1 Services by Landlord. So long as Tenant is not in default
under this Lease, and subject to the conditions and standards contained in this
Lease and to standards, limitations and guidelines imposed by governmental
authorities and utility companies, Landlord will furnish or cause to be
furnished, while Tenant is occupying the Premises, the following services and
utilities:
(a) Water at the normal temperature of the supply of water
to the Building for lavatory and drinking purposes, through fixtures installed
by Landlord or by Tenant with Landlord's consent; including office trash removal
trail the Premises
(b) Janitorial cleaning services including office trash
removal from the Premises to those portions of the Premises used solely for
office purposes, five (5) days per week (except on holidays observed by the
Building), in accordance with the standards of service provided to other tenants
in the Building;
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(c) Heated and refrigerated air conditioning, at such
temperatures and in such quantities as Landlord determines are reasonably
necessary for the reasonably comfortable use and occupancy of the Premises for
general office purposes; current hours of service extend from 7:00 am to 7:00 pm
every day and may only be amended upon 30 day written notice to Tenant;
(d) Routine maintenance in the Common Areas;
(e) Electric current to the Premises for Building standard
office lighting and office machines that consume electric current within the
limits set forth in Section 5.3(.))(1);
(f) Twenty-four (24) hour, non-exclusive. passenger elevator
service and. when scheduled through the Building management. non-exclusive
freight elevator service to the floors) on which the Premises are located; and
(g) Replacement of Building standard light bulbs, and
fluorescent tubes in the Premises.
Landlord is in no event responsible for the removal from the
Premises of medical waste of any nature or of any contaminated or otherwise
environmentally sensitive materials.
5.2 Tenant's Obligations. Tenant shall pay for, before
delinquency, all telephone charges and the cost charge for all other materials
and services not expressly the obligation of Landlord that are furnished to or
used on, in or about the Premises during the Term of this Lease.
5.3 Tenant's Additional Service Requirements.
(a) Additional Services Requiring Landlord's Consent. Except
as otherwise expressly provided elsewhere in this Lease (including any exhibit
attached to this Lease). Tenant shall not, without Landlord's prior consent to
writing. do the following:
(i) Install or use special lighting beyond building
standard, or any equipment machinery, or device in the Premises which requires a
nominal voltage of more than 120 volts, single phase, or which. in Landlord's
reasonable judgment, exceeds the capacity of existing feeders, conductors,
risers, or wiring in or to the Premises or Building, or which requires amounts
of water in excess of that usually furnished or supplied for use in office
space. or which will decrease the amount or pressure of water or the amperage or
voltage of electricity that Landlord can furnish to other occupants of the
Building;
(ii) Install or use any heat or cold-generating
equipment, machinery, or device that affects the temperature otherwise
maintainable by tire heat or air conditioning system of the Building;
(iii) Use portions of the Premises for special purposes
requiring greater or more difficult cleaning work than office areas, such as,
but without limitation, kitchens, reproduction rooms, interior glass partitions,
and non-Building standard materials or finishes; or laboratory areas
(iv) Accumulate refuse or rubbish (A) in excess of that
ordinarily accumulated to business office occupancy. or (8) at times other than
Building standard cleaning times.
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(b) Providing Additional Services. If, in the reasonable
opinion of Landlord, additional services to Tenant are necessary, Landlord may:
(i) Require that Tenant cease the activity or remove
the item (or Landlord may refuse to permit the activity or installation of the
item), causing (or which will cause) the need for the additional service. If
Landlord and Tenant are not able to agree on a mutually satisfactory method for
providing the additional services, or in Landlord's reasonable judgment,
providing the additional service is not operationally or economically feasible;
(ii) With respect to additional utility consumption,
install and maintain separate metering devices, or cause periodic usage surveys
to be prepared by an engineer employed by Landlord for that purpose. Cost of the
additional utility consumption plus, if Landlord installs and maintains separate
meters, the costs of the meters and of their installation, maintenance and
repair, or it Landlord orders usage surveys, the cost of those surveys, is the
obligation of Tenant;
(iii) With respect to heat or cold-generating equipment,
furnish additional heat or air conditioning to the Premises, or install
supplementary heating or air conditioning units in the Premises or elsewhere in
the Building or modify the existing heating or air conditioning system in the
Premises. The cost of additional heat or air conditioning. supplementary units,
or modifications to the existing system is the obligation of Tenant;
(iv) With respect to lighting beyond Building standard,
purchase and replace, at Tenant's expense, light bulbs and ballasts and/or
fixtures: and/or
(v) With respect to additional cleaning work. instruct
Landlord's janitorial contractor to provide the services, the cost of which is
the obligation of Tenant; provided however, should Landlord require Tenant to
independently contract for all janitorial services in those areas requiring such
additional cleaning (i.e., laboratory areas), Landlord agrees to credit Tenant's
monthly Base Rental by the proportionate cost of the services that Landlord
would ordinarily provide for those office areas.
(c) After Hours Heat or Air Conditioning. Landlord shall, on
request and at Tenant's expense, provide after hours heat or air conditioning.
The cost of after hours heat or air conditioning will be determined from time to
time by Landlord and, on request, confirmed in writing to Tenant.
(d) Payment. Tenant shall pay to Landlord the cost of any
additional service and any other costs for which Tenant is obligated under
Section 5.3(b) or (c) within five (5) days after receipt of an invoice from
Landlord.
5.4 Interruption of Utility Service. Landlord will use its
reasonable efforts to provide or cause to be provided the services required of
Landlord under this Lease. However, Landlord reserves the right, without any
liability to Tenant and without affecting Tenant's covenants and obligations
under this Lease, to stop or interrupt or reduce any of the services listed in
Section 5.1 or to stop, interrupt or reduce any other services required of
Landlord under this Lease, whenever and for so long as may be necessary, in
Landlord's reasonable judgment, by reason of (i) accidents or emergencies, (ii)
the making of repairs or changes that Landlord in good faith considers necessary
or which it is required or permitted by this Lease or by law to make, (iii)
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difficulty in securing proper supplies of fuel, water, electricity, labor or
supplies, (iv) the compliance by Landlord with governmental, quasi-governmental
or utility company energy conservation measures, or (v) the exercise by Landlord
of any right contained in Section 4.4. Landlord shall, on an interruption of a
utility service, use its reasonable efforts to cause the service to be resumed
as soon as practicable. However, no interruption or stoppage of any services
shall ever be construed as an eviction of Tenant nor will interruption or
stoppage cause an abatement of the rent payable under this Lease or in any
manner relieve Tenant from any of Tenant's obligations under this Lease;
provided however, should such interruption or stoppage of any such services
continue for a period exceeding five consecutive days, Tenant shall be entitled
to rent abatement of rent due hereunder for each day after said period on that
portion of the Premises so effected. Landlord is not liable for any interruption
or stoppage of any services or for any damage to persons or property resulting
from that stoppage.
ARTICLE VI
REPAIRS AND MAINTENANCE
6.1 Landlord's Repair Obligations. Landlord will, subject to the
casualty provisions of Article VIII. maintain the (i) Common Areas and Service
Areas, (ii) roof, foundation, exterior windows and load-bearing items of the
Building; (iii) exterior (located outside the Premises) surfaces of walls; (iv)
plumbing, pipes and conduits located in the Common Areas or Service Areas of the
Building; and (v) the Building central heating, ventilation and air
conditioning, electrical, mechanical and plumbing systems. Landlord is not
required to make any repair in connection with or resulting from (1) any
alteration or modification to the Premises or to Building equipment performed
by, for or because of Tenant or to special equipment or systems installed by,
for or because of Tenant, (2) the installation, use or operation of Tenant's
property, fixtures and equipment, (3) the moving of Tenant's property in or out
of the Building or in and about the Premises, (4) Tenant's use or occupancy of
the Premises in violation of Article IV or in a manner not contemplated by the
parties at the time of execution of this Lease (e.g., subsequent installation of
special use rooms), (5) the acts or omissions of Tenant and Tenant's employees,
agents, invitees, subtenants, licensees or contractors, or (6) fire or other
casualty, except as provided in Article VIII. Depending on the nature of repairs
undertaken by Landlord, the cost of the repairs will be borne solely by Landlord
or will be reimbursed to Landlord either by a particular tenant or tenants or by
all tenants as an Operating Cost.
6.2 Tenant's Obligations. Except for janitorial services provided
by Landlord and Landlord's obligations under Sections 3.1 and 6.1. Tenant, at
Tenant's expense, through Landlord or contractors approved by Landlord, shall
maintain the Premises in good order, condition and repair including, without
limitation, the interior surfaces of the windows, walls and ceilings; floors;
wall and floor coverings; window coverings; doors; interior windows; and all
switches. fixtures and equipment in the Premises. On receipt of reasonable
notice from Tenant, Landlord will perform, at the expense of Tenant, all repairs
and maintenance to plumbing, pipes and electrical wiring located within walls,
above ceiling surfaces and below floor surfaces resulting from the use of the
Premises by Tenant. Tenant is not responsible for any plumbing, pipes and
electrical wiring. Switches, fixtures and equipment located in the Premises but
serving another tenant or for portions of the central heat, ventilation and air
conditioning, electrical, mechanical and plumbing systems of the Building which
are located in the Premises, except for (i) repairs resulting from the acts of
Tenant and Tenant's employees, agents, invitees, subtenants, licensees
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or contractors, (ii) modifications made to any of those systems by, for, or
because of Tenant. and (iii) special equipment installed by, for, or because of
Tenant.
6.3 Rights of Landlord. If Tenant fails, in Landlord's reasonable
judgment. to maintain the Premises in good order, condition and repair. then
Landlord may perform the maintenance. repairs, refurbishing or repairing at
Tenant's expense.(if at Landlord's refit, Tenant's obligation shall. be limited
to a maximum of $5,000)
6.4 Condition on Surrender. On the expiration or earlier
termination of this Lease, or on the exercise by Landlord of Landlord's right to
re-enter the Premises without terminating this Lease. Tenant shall surrender the
Premises in the same condition as received or as subsequently improved by
Landlord or Tenant, except for (i) ordinary wear and tear, and (ii) damage by
fire, earthquake, acts of God or the elements for which damage Landlord has
received all insurance proceeds, and shall deliver to Landlord all keys for the
Premises and combinations to safes located in the Premises. Tenant shall, at
Landlord's option, remove, or cause to be removed, from the Premises or the
Building, at Tenant's expense (if at Landlord's request, Tenant's obligation
shall be limited to a maximum of $5,000) and as of the expiration or termination
of this Lease, ail signs. notices, displays, millwork. nonmovable trade
fixtures. or, subject to Subsection 6.5(d) of this Lease, any non-Building
standard tenant improvements placed in the Premises or the Building. Tenant
shall repair, at Tenant's expense, any damage to the Premises or the Building
resulting from the removal of any item, including without limitation, repairing
the floor and patching and painting the walls where reasonably required by
Landlord. Tenant's obligations under this Section 6.4 shall survive the
expiration or earlier termination of this Lease. If Tenant fails to remove any
item of property permitted or required to be removed at the expiration or
earlier termination of the Term. Landlord may. at Landlord's option, (a) remove
that property from the Premises or Building at Tenant's expense and sell or
dispose of It in a manner that Landlord considers advisable, or (b) place that
property in storage at Tenant's expense. Any property of Tenant remaining in the
premises ten (10) days after the expiration or termination of this Lease will be
deemed to have been abandoned by Tenant.
6.5 Alterations by Tenant.
(a) Approval Required. Tenant shall not make. or cause or
permit to be made, any additions. alterations. installations or improvements in
or to the Premises (collectively, "Alternations"). without the prior written
consent of Landlord. Together with Tenant's request for approval of an
Alteration, Tenant must also submit details with respect to design concept,
plans and specifications. names of and financial and other pertinent information
about proposed contractors (including without limitation. the labor organization
affiliation or lack of affiliation of any contractors), certificates of
Insurance to be maintained by Tenant's contractors, hours of construction,
proposed construction methods, details with respect to the quality of the
proposed work and reasonable evidence of security (such as payment and
performance bonds) to assure timely completion and payment of the costs of the
work by the contractor. With respect to an Alteration that is visible from
outside the Premises, which must be approved as determined in Landlord's sale
discretion, the alteration must, in the opinion of Landlord, also be
architecturally and aesthetically harmonious with the remainder of the Building.
(b) Complex Alterations. If the nature, volume or complexity
of any proposed Alteration will affect the basic heat, ventilation and air
conditioning or other Building
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Facilities or systems or the Building. Tenant shall furnish to Landlord
Information reasonably required by Landlord to insure Landlord that the
Alterations meet Landlord's reasonable requirements so as not to adversely
affect the Building or Building Facilities or systems; otherwise. Landlord may
require that the work be designed by consultants designated by Landlord and be
performed by Landlord or Landlord's contractors. Any work described in this
Section 6.5(a) must be approved as determined in Landlord's sole discretion,
which will not be reasonably withheld.
(c) Standard of Work. All work to be performed by or for
Tenant pursuant hereto will be performed diligently and in a first-class,
workmanlike manner, and in compliance with all applicable laws, ordinances,
regulations and rules of any public authority having jurisdiction over the
Building and/or Tenant and, so long as communicated in writing to Tenant,
Landlord's insurance carriers. Landlord has the right, but not the obligation,
to inspect periodically the work on the Premises and may make required changes
to the method or quality of the work.
(d) Ownership of Alterations. All Alterations made by or for
Tenant (other than Tenant's movable trade fixtures), immediately become the
property of Landlord, without compensation to Tenant, but Landlord has no
obligation to repair, maintain or insure those Alterations. Carpeting. shelving
and cabinetry are considered improvements of the Premises and not movable trade
fixtures, regardless of how or where affixed. No Alterations will be removed by
Tenant from the Premises either during or at the expiration or earlier
termination of the Term, and they shall be surrendered as a part of the Premises
unless the Alteration is not Building-standard and Landlord has requested that
Tenant remove it. Tenant may request at the time of submission to Landlord of
Tenant's information in connection with a proposed Alteration that Landlord
designate which non-Building standard Tenant improvements resulting from the
Alteration are subject to removal at the end of the Term. In the absence of such
a request. all non-Building standard improvements resulting from the Alteration
are subject to removal in accordance with the provisions of this Lease.
6.6 Payment of Costs: Mechanic's Liens. Except for costs that
Landlord agrees with Tenant in writing to pay (including in an Exhibit or Rider
attached to this Lease). Tenant shall pay for all costs incurred or arising out
of alterations. additions or improvements in or to the Premises and shall not
permit a mechanic's or materialman's lien to be asserted against the Premises.
On Landlord's request, Tenant shall deliver to Landlord proof of payment
reasonably satisfactory to Landlord of all costs incurred or arising out of any
such alterations, additions or improvements.
If Tenant contracts with a third party for the construction of
improvements in the Premises, or for the supply of materials relating thereto.
Tenant shall obtain validly executed and acknowledged lien waivers from any
party who might assert a mechanic's or materialmen's lien as a result of
Tenant's contract, regardless of the probable or ultimate validity of that lien.
If a lien is filed against the Premises or any interest of Landlord or Tenant in
the Building, then Tenant shall cause same to be discharged of record within ten
(10) days after its filing. If Tenant fails to obtain that discharge, then, to
addition to any other right or remedy of Landlord, Landlord may (but is not
obligated to) discharge the lien, either by paying the amount claimed to be due
or by procuring a bond. or by any other means. Any amount paid by Landlord to
obtain the discharge of the lien. with interest on that amount at the lesser of
eighteen percent (18%) per
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annum or the highest lawful rate, from the date of Landlord's payment to the
date of repayment to Landlord, shall be paid by Tenant to Landlord on demand.
ARTICLE VII
LANDLORD'S RIGHT OF ENTRY
In addition to its re-entry rights under Section 13.2, Landlord and
its authorized agents may. during reasonable hours. enter the Premises (i) to
inspect their general condition and state of repair, (ii) to make repairs
required or permitted under this Lease, (iii) to show the Premises to any
prospective tenant. purchaser or mortgagee, or (iv) for any other reasonable
purpose.
ARTICLE VIII
FIRE AND CASUALTY DAMAGE
8.1 Casualty Reparable by Landlord. If the Building, or any part
thereof, is damaged or destroyed by any peril that would be covered by a
standard Texas fire and extended coverage insurance policy, then Tenant shall
give immediate notice thereof to Landlord, and Landlord shall at its sole cost
and expense proceed with reasonable diligence to rebuild and repair the damaged
areas to substantially the condition in which they existed before the damage or
destruction. except that Landlord is not required to rebuild. repair or replace
any part of the partitions. tenant improvements, fixtures, additions or other
improvements placed in. on or about the Premises by Tenant. Rental payable by
Tenant under this Lease shall be abated to the extent that the Premises are
rendered uninhabitable by the casualty.
8.2 Casualties Not Reparable By Landlord. If the Premises, or any
part thereof, are damaged or destroyed by a casualty other than a peril covered
by a standard Texas fire and extended coverage insurance policy, or if any other
improvements situated on the Premises are damaged or destroyed, then Tenant
shall at its sole cost and expense proceed with reasonable diligence to rebuild
and repair the damaged improvements to substantially the condition in which they
existed before the damage or destruction, subject to Landlord's approval of the
plans and specifications and the contractor for the rebuilding and repairing.
8.3 Tenant's Property Insurance. Tenant shall maintain insurance
on all alterations, additions, portions and improvements erected by or on behalf
of Tenant in, on or about the Premises in an amount not less than 80% (or such
greater percentage as necessary to comply with co-insurance requirements of the
policy) the "replacement cost" thereof, as defined in the Replacement Cost
Endorsement to be attached to the policy. Written evidence of the required
insurance coverage or certified copies of policies and receipts evidencing
payment of the premiums therefor shall be delivered to Landlord before the
Commencement Date. Not less than ten (10) days before the expiration date of any
such policies, written evidence of insurance or certified copies of renewals
thereof (bearing notations evidencing the payment of renewal premiums) shall be
delivered to Landlord. All policies shall be procured by Tenant from financially
responsible insurance companies acceptable to Landlord. Each policy shall
provide
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for not less than thirty (30) days' written notice to Landlord before a policy
may be cancelled and shall name Landlord. and any other parties reasonably
designated by Landlord, as "additional insureds.
8.4 Mortgagee Requirements. Notwithstanding anything herein to the
contrary, if the holder of any indebtedness of Landlord secured by a mortgage or
deed of trust covering the Premises requires that insurance proceeds payable to
Landlord be applied to that indebtedness. then Landlord may terminate this Lease
by delivering written notice of termination to Tenant within thirty (30) days
after the requirement is made by the lienholder, whereupon all further rights
and obligations of each party hereunder shall cease and terminate.
8.5 Termination of Lease. Notwithstanding anything contained to
the contrary in this Article VIII, if the Building or the Premises is destroyed
by a fire or other casualty to the extent that, in Landlord's reasonable
judgment the Building or the Premises cannot practically be rebuilt to its
pre-existing condition within one hundred twenty (120) days, or in any event
during the last twelve (12) months of the Term, then Landlord may, at Landlord's
sole option, terminate this Lease within ninety (90) days from the date of
destruction. by delivering written notice thereof to Tenant, in which case
neither party hereto shall have any further obligations hereunder to the other.
8.6 Waiver of Subrogation. Each of Landlord and Tenant waives any
and every claim in its favor against the other during the Term of this Lease for
any and all loss of, or damage to, any of its property located within or upon,
or constituting a part of. the Premises, which loss or damage is covered by
valid and collectible fire and extended coverage insurance policies. These
mutual waivers are 1n addition to, and not in limitation or derogation of, any
other waiver or release contained to this Lease with respect to any loss of, or
damage to, property of Tenant. Because the mutual waivers will preclude the
assignment of a claim by way of subrogation or otherwise to an insurance company
(or any other person), each party hereto shall immediately give to each
insurance company which has issued to it policies of fire and extended coverage
insurance, written notice of the terms of the waiver. and shall cause those
insurance policies to be properly endorsed. if necessary, to prevent the
invalidation of insurance coverages by reason of the waiver.
ARTICLE IX
INDE14NITY AND PUBLIC LIABILITY INSURANCE
9.1 Indemnity. Landlord is not liable to Tenant or Tenant's
employees, agents. patrons or visitors. or to any other person whomsoever. for
any injury to person or damage to property on or about the Premises. if caused
by the action or inaction of Tenant, its agents, servants or employees, or of
any other person entering upon the Premises under the expressed or implied
invitation of Tenant. including without limitation. action or inaction required
of Tenant by Section 4.3(a) of this Lease. or caused by the Building or the
improvements located on the Premises becoming out of repair, or caused by
leakage of gas, oil. water or steam or by electricity emanating from the
Premises. or due to any cause whatsoever, including Landlord's own negligence.
Tenant hereby indemnifies Landlord and agrees to hold it harmless from any
16
loss. expense or claims. including attorney's fees, arising out of any such
damage or injury. except injury to persons or damage to property the sole cause
of which is the gross negligence or willful misconduct of Landlord.
9.2 Liability Insurance. Tenant shall procure and maintain
throughout the Term at its sole cost and expense. a policy or policies of
comprehensive general liability insurance. for bodily injury or death or
property damage. insuring Landlord and Tenant against all claims. demands. or
actions relating to the Premises on an occurrence basis with a minimum combined
single limit with policy limits of not less than $1,000,000 per occurrence for
Injury to persons (including death). and for property damage or destruction.
including loss of use. All policies shall be procured by Tenant from financially
responsible insurance companies acceptable to Landlord, and shall name Landlord.
and any other party reasonably designated by Landlord, as "additional insureds."
Written evidence of the required insurance coverage or certified copies of
policies and receipts evidencing payment of premiums therefor shall be delivered
to Landlord before the Commencement Date. Not less than ten (10) days before the
expiration date of any policies, written evidence of insurance or certified
spies of the renewals thereof (bearing notations evidencing the payment of
renewal premiums) shall be delivered to Landlord. Ail policies shall provide
that not less than thirty (30) days' written notice shall be given to Landlord
before a policy may be cancelled.
9.3 Tenant's 's Failure to Maintain Insurance. If Tenant fails to
comply with the foregoing insurance requirements, then Landlord may (in addition
to having available to it all other remedies provided herein on the occurrence
of an Event of Default) obtain such insurance, and Tenant shall pay to Landlord
on demand, as additional rent hereunder, the premium cost thereof plus interest
at the lesser of eighteen percent (18%) per annum or the highest lawful rate.
from the date of payment by Landlord until payment by Tenant.
ARTICLE X
CONDEMNATION
10.1 Total or Substantial Condemnation. If all or a substantial
part of the Premises is taken for any public or quasi-public use under any
governmental law, ordinance or regulation or by right of eminent domain, or is
sold to the condemning authority under threat of condemnation. then this Lease
shall terminate and the rent shall be abated during the unexpired portion of the
Term, effective from the date of taking of the Premises by the condemning
authority.
10.2 Partial Condemnation. If less than a substantial part of the
Premises Is taken for public or quasi-public use under any governmental law.
ordinance or regulation, or by right of eminent domain, or is sold to the
condemning authority under threat of condemnation, then Landlord, at its option,
may by written notice to Tenant terminate this Lease or shall forthwith at its
sole expense restore and reconstruct the building in which the Premises are
located and improvements therein (other than leasehold improvements or other
improvements made by Tenant or any assignee, subtenant or other occupant of the
Premises) to make the same reasonably suitable for the uses for which the
Premises are leased. as provided in Section 4.1.
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10.3 Disposition of Awards. All awards arising from a total or
partial taking of the Premises, of Tenants leasehold estate, or a taking for
temporary use shall belong to and be the property of Landlord without any
participation by Tenant. Tenant hereby assigns to Landlord any share of any such
award that might otherwise be payable to Tenant.
ARTICLE XI
ASSIGNMENT, TRANSFER AND SUBLEASING BY TENANT
11.1 Landlord's Consent Required.
(a) No Assignment or Subletting. Tenant shall not assign or
in any manner transfer this Lease or any estate or interest therein. or sublet
the Premises or any part thereof, or grant any license, concession or other
right of occupancy of any portion of the Premises without the prior written
consent of Landlord, which shall not be unreasonably withheld. However, Tenant
may assign this Lease without Landlord's prior approval to a wholly-owned
subsidiary. Consent by Landlord to one or more assignments or sublettings shall
not operate as a waiver of Landlord's right to any subsequent assignments and
sublettings. All assignments and sublettings shall be subject to the use
limitations stated in Section All assignments will transfer the and privileges
of Tenant
(b) Required Information. If Tenant desires to design the n
this Lease or to sublet all or part of the Premises, then Tenant shall notify
Landlord at least thirty (30) days in advance of the date on which Tenant
desires to make the assignment or enter into the sublease. Tenant shall provide
Landlord with a copy of the proposed assignment or sublease, and sufficient
information concerning the proposed assignee or subtenant to low Landlord to
make informed judgments as to the financial condition. reputation, operations
and general irability of the proposed assignee or subtenant.
(c) Landlord's Options. Within fifteen (15) days after
Landlord's receipt of the documents and information described in Subsection (b)
above, Landlord has the following options, as elected in its sole discretion:
(i) cancel the Lease as to all of the Premises if
Tenant proposes to assign the Lease or sublet more than fifty percent (50%) of
the Premises, or cancel the Lease as to the portion of the Premises proposed be
sublet if Tenant proposes to sublet less than fifty percent (50%) of the
Premises; or
(ii) consent to the proposed assignment or sublease,
subject to the other provisions contained in this Article XI; or
(iii) refuse to consent to the proposed assignment or
sublease but allow Tenant to continue its search for an assignee or subtenant
that will be acceptable to Landlord, which option will be deemed to have been
elected by Landlord unless Landlord gives Tenant written notice to the contrary.
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(d) Legal Fees and Other Expenses. To reimburse Landlord for
administrative and legal expenses associated with its review and/or preparation
of legal documents relating to a proposed assignment or sublease, Tenant shall
pay to Landlord the amount of all reasonable legal fees and expenses incurred by
Landlord in connection with its review of Tenant's request, plus any legal fees
and disbursements incurred in the preparation and review of any documentation.
Tenant shall pay these amounts within five (5) days after its receipt of an
invoice from Landlord, as additional rent.
11.2 Transfer of Voting Interest. If Tenant is a corporation or
partnership and if at any time during the Term of this Lease (including
extensions, those persons who own a majority of either the outstanding voting
shares or all outstanding shares of capital stock or the controlling partnership
interests of Tenant at the time of the execution of this Lease, cease to own a
majority of those shares or partnership interests (except as the result of
transfers by devise or descent), then the change in ownership of a majority of
those shares or partnership interests is deemed an assignment of this Lease by
Tenant and therefore subject in ail respects to the provisions of Section 11.1.
The previous sentence shall not apply. however, if at the time of the execution
of this Lease the outstanding voting shares of capital stock or partnership
interests of Tenant are listed on a recognized security exchange or
over-the-counter market.
11.3 No Release. Notwithstanding any assignment or subletting,
Tenant and any Guarantor of Tenant's obligations under this Lease shall remain
fully responsible and liable for the payment of the rent herein specified and
for compliance with all of Tenant's other obligations under this Lease (even if
future assignments and sublettings occur after the assignment or subletting by
Tenant, and regardless of whether or not Tenant's approval has been obtained for
those future assignments and sublettings). Moreover, if the rental due and
payable by a sublessee (or a combination of the rental payable by the sublessee
plus any bonus or other consideration relating thereto) exceeds the rental
payable under this Lease, or if with respect to a permitted assignment,
permitted license or other transfer by Tenant permitted by Landlord. the
consideration payable to Tenant by the assignee, licensee or other transferee
exceeds the rental payable under this Lease, then Tenant shall pay to Landlord
the excess amounts within ten (10) days after receipt thereof by Tenant.
Finally, on an assignment or subletting, it is understood and agreed that all
rentals paid to Tenant by an assignee or sublessee are received by Tenant in
trust for Landlord, to be forwarded immediately to Landlord without offset or
reduction of any kind. On Landlord's election, those rentals shall be paid
directly to Landlord as specified under this Lease (to be applied as a credit
against Tenant's accrued rental obligations, with any excess being the sole
property of Landlord).
11.4 No Mortgage. Tenant shall not mortgage, pledge or otherwise
encumber its interest in this Lease or in the Premises.
11.5 Transfer of Landlord's Interest. On a transfer and assignment
by Landlord of its interest in this Lease, or all or part of the Building,
Landlord shall thereby be released from any further obligations hereunder, and
Tenant shall look solely to the successor in interest of Landlord for
performance, of those obligations. Any security given by Tenant to secure
performance of Tenant's obligations hereunder may be transferred by Landlord to
the successor in interest, and Landlord shall thereby be discharged of any
further obligation relating thereto. On a transfer of its interest in the
Building or Premises, Landlord may become a mortgagee for purposes of Article
XIV.
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11.6 Bankruptcy. If this Lease is assigned in connection with a
bankruptcy proceeding, the provisions of Article XIV apply.
ARTICLE XII
HOLDING OVER
Without in any way affecting Landlord's rights and remedies under
this Lease, if Tenant holds over after the expiration or termination of this
Lease, then Tenant shall pay as monthly rent during each month of the holdover
period an amount equal to 150% of the amount of monthly rent due for the last
month of the Term. No holding over by Tenant after the Term of this Lease,
either with or without the consent and acquiescence of Landlord. shall extend
the Term for a period longer than one month unless that Term is extended in a
writing executed by Landlord. Any holding over without the written consent of
Landlord shall be on a vacancy-at-sufferance basis. On an unauthorized holding
over, Tenant shall indemnify Landlord against all claims for damages with
respect to any other lessee or prospective lessee to whom Landlord has leased
all or any part of the Premises.
ARTICLE XIII
DEFAULT BY TENANT; LANDLORD'S REMEDIES
13.1 Events of Default. The following events (individually, an
"Event of Default," and collectively, "Events of Default") constitute defaults
under this Lease:
(a) Failure of Tenant to pay when due an installment of the
rent or any other amount payable to Landlord hereunder.
(b) Failure of Tenant to comply with any term, condition or
covenant of this Lease.
(c) Insolvency of, or the making of a transfer in fraud of
creditors or a general assignment for the refit of creditors by, Tenant or a
Guarantor of Tenant's obligations under this Lease.
(d) Filing of a petition under any section or chapter of the
United States Bankruptcy Code, as needed. or under any similar law or statute of
the United States or any State thereof, by Tenant or by a guarantor of Tenant's
obligations under this Lease, or entry of an order for relief in a bankruptcy
proceeding against Tenant or a Guarantor.
(e) Appointment of a receiver, trustee or liquidator of
Tenant or of a Guarantor or for alt or substantially all of the assets of Tenant
or of a Guarantor of Tenant's obligations under this Lease.
(f) Abandonment by Tenant of any substantial portion of the
Premises or cessation of use of the remises for the purpose leased.
(h) Assignment of Tenant's interest to this Lease by
operation of law.
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13.2 Remedies of Landlord. On the occurrence of an Event of Default
listed in Section 13.1, Landlord may pursue any one or more of the following
remedies without any notice or demand whatsoever except as otherwise indicated
(and, further, Tenant is liable for damages as provided in Section 13.3):
(a) Termination. Terminate this Lease by giving written
notice of termination to Tenant, in which event Tenant shall immediately
surrender the Premises to Landlord. If Tenant fails to so surrender the
Premises, then Landlord may, without, prejudice to any other remedy it has for
possession of the Premises or arrearages in rent or other damages, re-enter and
take possession of the Premises and expel or remove Tenant and any other person
occupying the Premises or any part thereof, by any lawful means, without being
liable for prosecution or claim for damages whether caused by the negligence of
Landlord or otherwise.
(b) Continuation of Lease: Reletting of Premises. Landlord
may continue this Lease in full force and effect, in which case Tenant is liable
for all rents and other amounts payable under this Lease. Landlord may,
nevertheless. re-enter and take possession of the Premises. by any lawful means,
without terminating this Lease and without being liable for prosecution or for
any claim for damages therefor. and relet the Premises and apply the rent
received to the account of Tenant. No reletting by Landlord is considered to be
for its own account unless Landlord has notified Tenant that this Lease has been
terminated. Landlord may relet the Premises for a period or periods of time
equal to, lesser or greater than the remainder of the Term, and on whatever
terms and conditions Landlord, in its sole discretion. deems advisable.
Landlord's action under this subsection (b) is not considered an acceptance of
Tenant's surrender of the Premises unless Landlord expressly so notifies or
agrees with Tenant in writing.
(c) Act for Tenant. Re-enter the Premises by any lawful
means, without terminating this Lease and without being liable for any
prosecution or for any claim for damages therefore, and do whatever Tenant is
obligated to do under the terms of this Lease. Tenant shall pay to Landlord, on
demand. expenses incurred by Landlord in effecting compliance with Tenant's
obligations under this Lease, plus interest thereon at the lesser of 18% per
annum or the highest lawful rate, from the date expended until repaid. Landlord
is not liable for any damages resulting to Tenant from such action, whether
caused by negligence of Landlord or otherwise.
(d) Change Locks. Landlord may change the locks on doors
permitting entry into the Premises and deny Tenant's access thereto until all
Events of Default have been cured. Landlord has no obligation to advise Tenant
of the change of locks other than to provide written notice at Premises of the
person whom Tenant may contact, during the normal business hours for the
Premises of which Tenant has advised Landlord in writing, to acquire additional
Information. Tenant waives all rights under Chapter 93 of the Texas Property
Code to which it is otherwise entitled.
(e) Recapture of Advance Benefits. In addition to the
remedies set forth in Sections 13.2(a)-(d), inclusive, on the occurrence of an
Event of Default by Tenant under this Lease with respect to which Landlord
elects either to terminate this Lease or, without terminating this Lease, to
terminate Tenant's possession of the Premises. (i) Tenant shall pay to Landlord
in cash on demand an amount equal to all "Reimbursable Costs" (as defined below)
for which Tenant has not yet vested (as defined below). and (ii) any remaining
rental abatement and/or other concessions that have not yet accrued under this
Lease shall terminate. As used herein. the
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term "Reimbursable Costs" means the total of (i) the aggregate dollar value of
all rental abatements that Tenant has received under this Lease; and (iii) the
aggregate dollar amount which has been paid to or on behalf of Tenant under this
Lease, including. without limitation. any brokerage commission paid and/or
payable by Landlord in connection with the execution of this Lease. Because the
Reimbursable Costs were incurred by Landlord in reliance on Tenant's fully
performing Tenant's obligations under this Lease. Tenant hereby acknowledges
that Landlord will be damaged on a default by Tenant in an amount equal to the
aggregate dollar value of the Reimbursable Costs for which Tenant has not yet
vested. in addition to (and not 1n lieu of) any other damages suffered by
Landlord. Tenant shall vest as to Reimbursable Costs at the rate of (A) 100%
divided by the number of months in the initial Term for which Tenant is
obligated to pay full rent, (B) multiplied by the number of months for which
Tenant has paid full rent and is not otherwise in default hereunder. No vesting
shall occur with respect to any month for which Tenant has not paid rent or in
which Tenant is otherwise in default hereunder. For example, if Tenant is
obligated to pay full rent for 50 months, then Tenant shall vest hereunder at
the rate of 2% for each month for which it pays full rent.
(f) Lease Remedies Not Exclusive; Lease Supersedes Property
Code. Pursuit of any of the foregoing remedies does not constitute an
irrevocable election of remedies nor preclude pursuit of any other remedy
provided elsewhere in this Lease or by applicable law, and none is exclusive of
another unless so provided in this Lease or by applicable law. Likewise,
forbearance by Landlord to enforce one or more of the remedies available to it
on an Event of Default does not constitute a waiver of that default or of the
right to exercise at remedy later or of any rent, damages or other amounts due
to Landlord hereunder. In the case of a inflict. and to the extent that Chapter
93 of the Texas Property Code applies to this Lease, the terms of this Lease
supersede and control the provisions of Chapter 93 of the Texas Property Code.
13.3 Tenant's Liability For Landlord's Damages.
(a) In General. In all events, Tenant is liable for all
damages of whatever kind or nature, direct or indirect, suffered by Landlord as
a result of the occurrence of an Event of Default. If Tenant fails to promptly
pay Landlord for the damages suffered, Landlord may pursue a monetary recovery
from Tenant. Included among those damages are all expenses incurred by Landlord
to repossessing the Premises (including, among other expenses, increased
insurance premiums resulting from Tenant's vacancy). all expenses incurred by
Landlord in reletting the Premises (including, among other expenses. those
Incurred for repairs. remodeling, replacements, advertisements and brokerage
fees), all concessions granted to a new tenant on a reletting, all losses
incurred by Landlord as a result of Tenant's default (including among other
losses, any adverse reaction by Landlord's mortgagee or by other tenants or
prospective tenants of the Building) and a reasonable allowance for Landlord's
administrative efforts, salaries and overhead attributable directly or
indirectly to Tenant's default and landlord's pursuit of the rights and remedies
provided under this Lease or by applicable law.
(b) Termination of Lease. If Landlord terminates this Lease
under Section 13.2(a). then Tenant shall pay to Landlord on demand
the amount of all loss and damage suffered by Landlord by reason of
the termination, to be determined by one or a combination of the
following measures of damages:
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(i) Until Landlord is able, through good faith efforts
(the nature of which shall be at Landlord's sole discretion), to relet the
Premises. Tenant shall pay to Landlord on or before the first day of each
calendar month. the amounts required to be paid by Tenant under this Lease.
After the Premises have been relet by Landlord, Tenant shall pay to Landlord on
the 20th day of each calendar month, the difference between the amount required
to be paid by Tenant under this Lease for that calendar month and the amount
actually collected by Landlord for that month. If it becomes necessary for
Landlord to bring suit to collect a Deficiency. Landlord may allow the
deficiency to accumulate and may bring an action on several or all of the
accrued deficiencies at one time. No suit shall prejudice to any way Landlord's
right to bring a similar action for any deficiency or deficiencies that arise
later. Any amount collected by Landlord from subsequent tenants for any calendar
month which exceeds the amounts required to be paid by Tenant under this Lease
shall be credited to reduce Tenant's liability for any calendar month for which
the amount collected by Landlord is less than the amount required to be paid by
Tenant, as Tenant's sole right to that excess.
(ii) When Landlord desires to do so. including after it
has elected to proceed under subparagraph (i) immediately above (that election
not being exclusive under this Lease). Landlord may demand a final settlement.
On that demand, Landlord is entitled to receive from Tenant the difference
between the total of all amounts required to be paid by Tenant under this Lease
for the remainder of the Term minus the reasonable rental value of the Premises
for that period, with such difference to be discounted to a present value based
on a rate equal to the rate of interest allowed by law in Texas when the parties
to a contract have not agreed on a particular rate of interest (or, in the
absence of such a stipulated rate. at the rate of 10% per annum).
(iii) Landlord's election to proceed under subsection
(i) above shall not prejudice its right thereafter to cancel that election in
favor of the remedy described in subsection (ii) above, so long as at the time
of that cancellation, Tenant is still in default.
(c) Continuation of Lease: Reletting of Premises. If
Landlord elects to continue this Lease in effect, then Tenant is liable for the
rent and other amounts due hereunder. If Landlord relets the Premises for the
account of Tenant, then the amounts actually received by Landlord shall be
credited to the amounts owed by Tenant under this lease (including the amounts
described in Section 17.3(a)).
ARTICLE XIV
BANKRUPTCY OR INSOLVENCY OF TENANT
14.1 Liquidation. If Tenant becomes a debtor under Chapter 7 of the
federal Bankruptcy Code. 11 U. S. C. Sections 101 et seq. (the "Bankruptcy
Code"), and Tenant's trustee or Tenant elects to assume this Lease for the
purpose of assigning it, or otherwise, then that election and assignment may be
made only if the provisions of Sections 14.2 and 14.4 are satisfied. If Tenant
or Tenant's trustee fails to elect to assume this Lease within 60 days after an
order for relief is entered against Tenant, or such additional time as is
provided by the court within that 60-day period, then this Lease shall be deemed
to have been rejected. Immediately after that
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rejection, Landlord may repossess the Premises without further obligation to
Tenant or Tenant's trustee and this Lease shall terminate, but Landlord's right
to be compensated for damages (including. without limitation. liquidated damages
provided for under this Lease) in any such proceeding shall survive.
14.2 Reorganization. If a petition for reorganization or adjustment
of debts is filed concerning Tenant under Chapter 11 of the Bankruptcy Code, or
a proceeding is filed under Chapter 7 of the Bankruptcy Code and is converted to
a Chapter 11 case, then Tenant's trustee or Tenant, as debtor-in-possession.
must elect to assume this Lease within 120 days after an order for relief is
entered against Tenant, or Tenant's trustee or the debtor-in-possession shall be
deemed to have rejected this Lease. If Tenant. Tenant's trustee or the
debtor-in-possession fails to perform all of Tenant's obligations under this
Lease within the time periods (excluding grace periods) required for that
performance, then no election by Tenant's trustee or the debtor-in-possession to
assume this Lease, whether under Chapter 7 or Chapter 11, is effective unless
each of the following conditions has been satisfied:
(a) Defaults Cured. Tenant's trustee or the
debtor-in-possession cures all defaults under the Lease. or provides Landlord
with Assurance (as defined below) that it will cure. (i) all defaults that can
be cured by the payment of money within 10 days from the date of such assumption
and (ii) all other defaults under this Lease that can be cured by the
performance of the act needed to effect the cure promptly after the date of
assumption.
(b) Compensation For Damages. Tenant's trustee or the
debtor-in-possession and, if this Lease has been guaranteed, Guarantor
compensates, or provides Landlord with Assurance that within 10 days from the
date of such assumption it will compensate. Landlord for any actual pecuniary
loss incurred by Landlord arising from the default of Tenant, Tenant's trustee,
or the debtor- in-possession as indicated in any statement of actual pecuniary
loss sent by Landlord to Tenant's trustee or the debtor-In-possession.
(c) Assurance of Future Performance. Tenant's trustee or the
debtor-in-possession provides Landlord with Assurance of the future performance
of the obligations of Tenant under the Lease. Lessee's trustee or the
debtor-In-possession, and if that Assurance has been provided, Tenant's trustee
or the debtor-in-possession shall also (i) deposit with Landlord, as security
for the timely payment of rent under this Lease, an amount equal to three (7)
months' Base Rental, and (ii) pay in advance to Landlord on the date that Base
Rental is due and payable, one-twelfth (1/12) of Tenant's annual obligations for
any other purpose (e.g., taxes and insurance) pursuant to this Lease. The
obligations imposed on Tenant's trustee or the debtor- in-possession all
continue with respect to Tenant or any assignee of this Lease after the
completion of bankruptcy proceedings.
(d) No Breach of Other Obligations. The assumption will not
breach or cause a default under any provision of any other lease, mortgage,
financing agreement or other agreement by which Landlord is bound relating to
the Premises or any larger development of which the Premises are a part.
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For purposes of this Article XIV, Landlord and Tenant
acknowledge that "Assurance" means no less than (i) Tenant's trustee or the
debtor-in-possession has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that sufficient funds will be available to fulfill the
obligations of Tenant under this Lease and there has been deposited with
Landlord. or the Bankruptcy Court has entered an order segregating. sufficient
cash payable to Landlord, and/or Tenant's trustee or the debtor-in-possession
shall have been granted a valid and perfected first lien and security interest
and/or mortgage in property of Tenant, Tenant's trustee or the
debtor-in-possession, acceptable as to value and kind to Landlord, to secure to
Landlord the obligation of Tenant, Tenant's trustee or the debtor-in-possession
to cure the defaults under this Lease, monetary and/or non-monetary, within the
time periods set forth above, and (if this Lease has been guaranteed) (ii)
Guarantor has cured all defaults under this Lease that can be cured by the
payment of money and has undertaken to promptly cure all other :faults under
this Lease that can be cured by the performance of any act and, if this Lease
has been guaranteed, Landlord has received a duly authorized and binding
undertaking of Guarantor that Guarantor remains obligated under its Guaranty to
the same extent as if the circumstances giving rise to the requirement that
Assurance be provided had not occurred. together with a statement of Guarantor's
certified public accountants certifying that the net worth of Guarantor, on a
consolidated basis but exclusive of any net worth of Lessee, is in excess of
$250,000.00. For an individual Guarantor, there shall be excluded from that
Guarantor's net worth for purposes hereof any equity in the Guarantor's
principal residence. For a non-individual Guarantor, there shall be excluded
from that Guarantor's net worth for purposes hereof its basis in Its fixed
assets, including land and buildings.
14.3 Subsequent Liquidation or Petition. If this Lease is assumed
in accordance with Section 14.2 and hereafter Tenant is liquidated or files a
petition for reorganization or adjustment of debts under Chapter 11 of the
Bankruptcy Code, Landlord may, at its option, terminate this Lease and all
rights of Tenant hereunder, by giving Tenant notice of its election so to
terminate within 30 days after the occurrence of either of such events.
14.4 Assignment.
(a) Adequate Assurance of Future Performance. If Tenant's
trustee or the debtor-in-possession assumes this Lease pursuant to the terms and
provisions of Sections 14.1 or 14.2 for the purpose of assigning (or otherwise
elects to assign) this Lease to an assignee other than Guarantor, then this
Lease may be so assigned only if the proposed assignee provides adequate
assurance of future performance of all of the terms, covenants and conditions of
this Lease to be performed by Tenant including, without limitation, the
obligation to pay Base Rental. As used herein, "adequate assurance of future
performance" means that no less than each of the following conditions has been
satisfied:
(i) The proposed assignee has furnished Landlord with
either (A) a current financial statement audited by a certified public
accountant indicating a net worth and working capital in amounts that Landlord
reasonably determines are sufficient to assure the future performance by the
assignee of Tenant's obligations under this Lease or (B) a guaranty, or
guaranties, in form and substance satisfactory to Landlord from one or more
persons with a net worth and working capital in amounts that Landlord reasonably
determines are sufficient to assure the future performance of Tenant's
obligations under this Lease.
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(ii) The proposed assignment will not release or impair
any guaranty of the obligations of Tenant (including Guarantor and the proposed
assignee) under this lease.
(iii) The proposed assignee and its guarantors have a
demonstrated financial condition and operating performance similar or superior
to that of Tenant and any Guarantor of Tenant's obligations under this Lease at
the date that Tenant became a tenant hereunder.
(b) Any and all monies or other considerations payable or
otherwise to be delivered in connection with the assignment referred to in
subparagraph (i) next above shall be paid or delivered to Landlord, shall be and
remain the exclusive property of Landlord and shall not constitute property of
Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code. Any
and all monies or other considerations constituting Landlord's property under
the preceding sentence not paid or delivered to Landlord shall be held in trust
for e benefit of Landlord and be promptly paid to or turned over to Landlord.
(c) Any person or entity to which this Lease is assigned
pursuant to the provisions of the Bankruptcy Code shall be deemed without
further act or deed to have assumed all of the obligations arising under this
Lease on and after the date of such assignment. Any such assignee shall on
demand execute and deliver to Landlord an instrument confirming the assumption.
14.5 Reasonable Charges. When, pursuant to the Bankruptcy Code,
Tenant's trustee or the debtor- in-possession is obligated to pay reasonable use
and occupancy charges for the use of the Premises, the charges shall not be less
than the Base Rental and all other amounts payable by Tenant under this Lease.
14.6 Consent. Neither the whole nor any portion of Tenant's
interest in this Lease or its estate in the Premises shall pass to any trustee,
receiver, assignee for the benefit of creditors, or any other person or entity,
or otherwise by operation of law under the laws of any state having jurisdiction
of the person or property of Tenant unless Landlord has consented to the
transfer in writing. No acceptance by Landlord of Base Rental or any other
payments from a trustee, receiver, assignee, person or other entity shall be
deemed to constitute such consent by landlord, nor shall it be deemed a waiver
of Landlord's right to terminate this lease for transfer of Tenant's interest
under this Lease without such consent.
14.7 Intent. Landlord and Tenant acknowledge, for themselves and
for each of their successors and assigns, their intent to have the applicable
provisions of Section 365 of the Bankruptcy Code, or any successor provisions,
apply to this Lease.
ARTICLE XV
LIEN FOR RENT
IN CONSIDERATION OF THE MUTUAL BENEFITS ARISING UNDER THIS LEASE
TENANT HEREBY GRANTS TO LANDLORD A LIEN AND SECURITY INTEREST IN STANDARD OFFICE
EQUIPMENT OWNED BY TENANT (INCLUDING,
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BUT NOT LIMITED TO, ALL FIXTURES, MACHINERY, EQUIPMENT, FURNISHINGS, AND OTHER
ARTICLES OF PERSONAL PROPERTY NOW OR HEREAFTER PLACED IN OR ON THE PREMISES BY
TENANT, TOGETHER WITH THE PROCEEDS FROM THE DISPOSITION OF THOSE ITEMS) [THE
"COLLATERAL"], NOW OR HEREAFTER PLACED IN OR UPON TILE PREMISES, AS SECURITY FOR
PAYMENT OF ALL RENT AND OTHER SUMS AGREED TO BE PAID BY TENANT HEREIN. THE
PROVISIONS OF THIS ARTICLE XV CONSTITUTE A SECURITY AGREEMENT UNDER THE TEXAS
UNIFORM COMMERCIAL CODE, AND LANDLORD HAS AND MAY ENFORCE A SECURITY INTEREST IN
THE COLLATERAL. THE COLLATERAL SHALL NOT BE MOVED WITHOUT THE CONSENT OF
LANDLORD UNTIL ALL ARREARAGES IN RENT AND OTHER SUMS OF MONEY THEN CUE TO
LANDLORD HEREUNDER HAVE BEEN PAID AND DISCHARGED. ON OR BEFORE THE COMMENCEMENT
DATE. TENANT SHALL EXECUTE, AS DEBTOR. TWO OR MORE FINANCING STATEMENTS. IN THE
FORMS OF EXHIBIT "F" ATTACHED HERETO, TO PERFECT THIS SECURITY INTEREST PURSUANT
TO THE TEXAS UNIFORM COMMERCIAL CODE. LANDLORD MAY AT ITS ELECTION AT ANY TIME
FILE A COPY OF THIS LEASE AS A FINANCING STATEMENT. LANDLORD, AS SECURED PARTY,
HAS ALL OF THE RIGHTS AND REMEDIES AFFORDED A SECURED PARTY UNDER THE TEXAS
UNIFORM COMMERCIAL CODE IN ADDITION TO AND CUMULATIVE OF THE LANDLORD'S LIENS
AND RIGHTS PROVIDED BY LAW OR BY THE OTHER TERMS AND PROVISIONS OF THIS LEASE.
ARTICLE XVI
SUBORDINATION AND ATTORNMENT
Landlord may transfer, assign, mortgage and convey to whole or to
part the Building or the Land, and any and all of its rights under this Lease,
and nothing herein shall be construed as a restriction on Landlord's right to do
so. Tenant hereby subordinates this Lease and all rights of Tenant hereunder to
the lien of any mortgage or deed of trust now or hereafter placed against the
Premises. and all renewals, substitutions and extensions thereof, and all such
liens are superior to and prior to this Lease. If a mortgagee or other
lienholder acquires the Premises as a purchaser at a foreclosure sale (any such
mortgagee or other lienholder of purchaser at a foreclosure sale being each
hereinafter referred to as the "Purchaser at Foreclosure"), then cant shall (at
the sole and absolute election of the Purchaser at Foreclosure) thereafter
remain bound to the same effect as if a new and identical Lease between the
Purchaser at Foreclosure, as Landlord, and Tenant, as Tenant, had been entered
into for the remainder of the Term of the Lease in effect at the time of the
foreclosure. Tenant shall, on request. execute any certificate or instrument
necessary or desirable further to effect the subordination of this Lease to the
mortgage or deed of trust liens, or to confirm a lienholder's election to
continue the Lease in effect after foreclosure. as above provided. Tenant shall
attorn and pay rent to the Purchaser at Foreclosure as if that party were a
signatory to this Agreement. Tenant hereby constitutes and appoints Landlord as
Tenant's attorney-in-fact to execute any such certificate or instrument for and
on behalf of Tenant. Any lienholder with a lien that covers the Premises has the
absolute right at any time to subordinate its lien to this Lease and to Tenant's
rights hereunder such that a foreclosure of that lien will result in the
purchase of the affected property subject to the rights of Tenant hereunder, and
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Tenant has no right or ability to unilaterally prevent that result. On an act or
omission by Landlord which might allow Tenant to terminate this Lease or to
claim a partial or total eviction, Tenant shall not exercise any such right
until (i) it has given written notice to the holder of any mortgage. deed of
trust or other lien on the Premises. of the act or omission, and (ii) a
reasonable period for remedying the act or omission has elapsed following the
giving of notice.
ARTICLE XVII
TENANT ESTOPPEL LETTER
On the request of Landlord made from time-to-time with at least five
(5) business days' notice, Tenant shall execute and deliver to Landlord, or to a
mortgagee or prospective purchaser as directed by Landlord, a statement in
writing certifying, to the extent true, that. among other things, (i) alt of the
construction work in or relating to the Premises has been satisfactorily
completed, (ii) Tenant has accepted the work in or relating to. and is in
possession of. the Premises, (iii) the Lease is in full force and effect and has
not been amended, modified or superseded, (iv) there is no existing default on
Landlord's or Tenant's part, (v) rent has begun to accrue but has not been paid
more than one month in advance. (vi) Tenant has no claim against Landlord which
might be offset against accruing rent. and (vii) Tenant has no knowledge of any
pledge or assignment by Landlord of the Lease or rentals due thereunder, except
for the assignment to Landlord's lenders. If any of the foregoing matters is not
true at the time that Landlord requests the written statement. then Tenant shall
specify in detail any differences.
ARTICLE XVIII
QUIET ENJOYMENT
Landlord has neither made nor authorized any other person (including
Broker or any other brokers) to make any representations, covenants or
warranties with respect to the Premises except as expressly set forth to this
Lease. Landlord warrants that it has full right and power to execute and perform
this Lease and to grant the estate demised herein and that Tenant, on payment of
the rent and performance of the covenants herein contained, shall peaceably and
quietly have. hold and enjoy the Premises during the full Term of this Lease.
Subject to the rights of lienholders under Article XVI.
ARTICLE XIX
NO IMPLIED WAIVER
Landlord's failure to insist at any time on the strict performance
of any covenant or agreement. or its failure to exercise any option, right,
power or remedy contained to this Lease, shall not be construed as a waiver or a
relinquishment thereof for the future. The waiver of or redress for any
violation of any term, covenant, agreement, or condition contained in this Lease
shall not prevent a subsequent act being a violation. Landlord shall be
considered to have waived
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a provision of this Lease only if specifically expressed in a writing signed by
Landlord. No expressed waiver shall affect any matter other than the one
specified in the waiver and only for the time and in the manner specifically
stated. Landlord's receipt of rent with knowledge of the breach of a covenant or
agreement contained in this Lease shall not be deemed a waiver of the breach. No
payment by Tenant or acceptance by Landlord of a lesser amount than the monthly
Installment of rent due under this Lease shall be considered other than on
account of the earliest rent due hereunder. nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as rent
be deemed an accord and satisfaction. Landlord may accept a check or payment
without prejudice to Landlord's right to recover the balance of the rent due or
to pursue any other remedy provided in this Lease.
ARTICLE XX
NOTICES
Each provision of this Lease, or any applicable governmental laws,
ordinances, regulations, and other requirements with reference to the sending
mailing or delivery of any notice, communication, request, reply or advice
(hereinafter severally and collectively called "notice"), or with reference to
the making of any payment by Tenant to Landlord. shall have been compiled with
when and if the following steps are taken:
20.1 Payments Due Landlord. All rent and other payments required to
be made by Tenant to Landlord hereunder shall be payable to Landlord in the
County in which the Building is located, at the address set out in Section 1.1.
or at such other address as Landlord specifies from time to time. All such
payments shall, for the purposes of this Lease, notwithstanding the provisions
of Section 20.2 be deemed paid only when actually received by Landlord. Except
as may be provided otherwise in this Lease. all amounts payable under this Lease
will be payable in coin or currency of the United States of America which at the
time of payment is legal tender for public and private debts.
20.2 Notices. Any notice or document required to be delivered
hereunder. or any notice given by either party hereto to the other party shall
be deemed to be delivered if actually received or. whether or not received, on
deposit in the United States mail, postage prepaid, certified or registered mail
(with or without return receipt requested). addressed to the appropriate party
at its respective address set out in Section 1.1 or at such other address as
that party has theretofore specified in accordance with Section 20.3. Notice
given in any other manner is effective only if and when received by the party to
be notified. If a party intentionally avoids receipt of notice. then notice is
deemed received if given by any means by which service of process can be
effected under applicable law.
20.3 Change in Addresses. The parties hereto and their respective
heirs. successors. legal representatives, and assigns may from time to time
change their respective addresses by giving at least fifteen (15) days' written
notice to the other party, delivered In compliance with this Article XX.
29
ARTICLE XXI
SUBSTITUTION OF SPACE
[Section Not Part of Lease]
ARTICLE XXII
MISCELLANEOUS
22.1 Attorney's Fees. If, as a result of any breach or default by
Tenant of its respective obligations under this Lease, Landlord employs an
attorney to enforce or defend any of its rights or remedies hereunder, and if
Landlord prevails, then Tenant shall pay to Landlord the reasonable attorney's
fees incurred by Landlord.
22.2 Broker's Commission. Tenant and Landlord hereby indemnify each
other, and shall hold each other harmless from and against. all liabilities
arising from any claim for a "broker's or leasing agent's" commission, other
than with respect to the commissions which the indemnified party has agreed. in
writing. To pay, including any agreed to be paid to the Broker(s) named to
Section 1.1(g)
22.3 Force Majeure. If the performance by Landlord of any provision
of this Lease is delayed or prevented by any act of God. Strike, lockout,
shortage of material or labor, restriction by any governmental authority, civil
riot, flood, and any other cause not within the control of Landlord, then the
period for Landlord's performance of the provision shall be automatically
extended for the same amount of time that Landlord is so delayed or hindered.
22.4 Use of Language. Words of any gender used to this Lease
include any other gender, and words in the singular include the plural. unless
the context otherwise requires.
22.5 Captions. The captions or headings of paragraphs in this lease
are inserted for convenience only, and shall not be considered in construing the
provisions hereof if any question of intent arises.
21.6 Successors. The terms, conditions and covenants contained in
this Lease inure to the benefit of, and are binding on, the parties hereto and
their respective successors in interest, assigns and legal representatives,
except as otherwise herein expressly provided. All rights, powers, privileges,
immunities and duties of Landlord under this Lease, including without
limitation, notices required or permitted to be delivered by Landlord to Tenant
hereunder, may, at Landlord's option, be exercised or performed by Landlord's
agent or attorney.
22.7 Sublease. If this Lease is to fact a sublease, then Tenant
accepts this Lease subject to all of the terms and conditions of the lease under
which Landlord holds the Premises as lessee. Tenant shall do no act or thing
that would constitute a violation by Landlord of its obligation under such
lease.
30
22.8 Severability. If any provision of this Lease 1s finally held
by a court of competent jurisdiction to be invalid or unenforceable. then the
invalid or unenforceable provision shall be deemed severed from this Lease and
the validity and enforceability of the remaining provisions of this Lease shall
be unaffected.
22.9 Charges For Services. Any amount payable by Tenant to Landlord
hereunder is considered to be rent due and shall be included in any lien for
rent. The non-payment of any such amounts due is an Event of Default hereunder
giving rise to Landlord's exercise of any remedies available hereunder or at
law.
22.10 Personal Liability. Landlord's liability to Tenant for any
default by Landlord under this Lease is limited to Landlord's interest fn the
Building and the Land, and Tenant agrees to look solely to landlord's interest
therein for the recovery of any judgment against Landlord. it being intended
that neither Landlord nor any of its partners, shareholders, agents, affiliates,
officers or directors shall be personally liable for any judgment or deficiency.
22.11 Damage From Certain Causes. Landlord is not liable or
responsible to Tenant for any loss or damage to any property or person
occasioned by theft, fire, act of God, public enemy, injunction, riot, strike,
insurrection, war, court order, requisition, or order of governmental body or
authority, or for any damage or inconvenience that may arise through repair or
alteration of any part of the Land, the Building or the Premises, or a failure
to make any such repairs.
22.12 Notice And Cure to Landlord and Mortgagee. On any act or
omission by Landlord which might give, or which Tenant claims or intends to
claim gives, Tenant the right to damages from Landlord or the right to terminate
this Lease by reason of a constructive or actual eviction from all or part of
the Premises, or otherwise, Tenant shall not sue for damages or attempt to
terminate until it has given written notice of the act or omission to Landlord
and to the holders) of the indebtedness or other obligations secured by any
mortgage or deed of trust affecting the Premises, and a reasonable period of
time for remedying the act or omission has elapsed following the giving of the
notice, during which time Landlord and the lienholder(s), or either of them.
their agents or employees, may enter upon the Premises and do therein whatever
is necessary to remedy the act or omission. During the period after the giving
of notice and during the remedying of the act omission, the Base Rental payable
by Tenant shall not be abated and apportioned except to the extent that a
Premises are untenantable.
22.13 Governing Law. This Lease and the rights and obligations of
the parties hereto shall be interpreted. construed, and enforced 1n accordance
with the local laws of the State of Texas.
22.14 No Reduction Of Rental. Except as otherwise expressly and
unequivocally provided in this Agreement. Tenant shall not for any reason
withhold or reduce the amounts payable by Tenant under this Lease, it being
understood that the obligations of Landlord hereunder are independent of
Tenant's obligations. Furthermore, if Landlord is required by a governmental
authority to reduce energy consumption, to impose a parking or similar charge
with respect to the Building, to restrict the hours of operation of, limit
access to or reduce parking spaces available at the Building, or take other
limiting actions, then Tenant is not entitled to rent abatement or to terminate
this Lease.
31
22.15 No Oral Changes. This Lease may not be changed or terminated
orally. but only in writing executed by both parties hereto.
22.16 Lease Provisions Confidential. Each and every term and
provision contained in this Lease that is not generic (e.g. the Area of the
Building) is confidential and shall not. without the written consent of the
other party, be disclosed to any person outside the organizations of the parties
to this Lease, or to Landlord's property management company, or to professional
advisers (e.g. lawyers and accountants) who have a "need to know" relationship
with the disclosing party.
22.17 ENTIRETY: NO REPRESENTATIONS AND WARRANTIES. THIS LEASE,
INCLUDING ONLY THE ATTACHMENTS HERETO SPECIFIED IN SECTION 22.18, EMBODIES THE
ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDES ALL PRIOR AGREEMENTS AND
UNDERSTANDINGS, INCLUDING ANY LETTERS OF INTENT, IF ANY, RELATING TO THE SUBJECT
MATTER HEREOF, LANDLORD HAS NOT MADE, AND TENANT MAY NOT RELY ON. ANY
REPRESENTATIONS OR WARRANTIES WITH REGARD TO THE BUILDING, PREMISES OR
OTHERWISE. EXPRESSED OR IMPLIED, EXCEPT AS STATED IN THIS LEASE. IN PARTICULAR,
LANDLORD HAS NOT AUTHORIZED ANY AGENT OR BROKER TO MAKE A REPRESENTATION OR
WARRANTY INCONSISTENT WITH THE TERMS OF THIS LEASE AND TENANT MAY NOT RELY ON
ANY SUCH NCONSISTENT REPRESENTATION OR WARRANTY.
[THIS SPACE INTENTIONALLY LEFT BLANK]
32
22.18 Attachments. If the box next to any of the following documents
is marked, then the document is attached to this Lease, and it, as well as all
drawings and documents prepared pursuant thereto, are a part of this Lease:
Exhibit "A" - Floor Plan [X]
"B" - Legal Description [X]
"C" - Operating Cost
Computation [X]
' "D" - Rules [X]
"E' - Guaranty of Lease
Agreement [ ]
"F" - Financing Statements [ ]
"G" - Addendum [X]
Rider 101 Work Letter - As Is [X]
201A Parking Agreement [X]
301 Option to Extend [ ]
|
THIS LEASE is executed and effective this 1st day of May, 1992.
LANDLORD:
BUILDING ACQUISITION CORPORATION,
a Texas corporation,
By: /s/ TIM LYLES
Printed Name: Tim Lyles
Title: Secretary
|
TENANT:
BioNumerik Pharmaceuticals
a Limited Liability Company
33
By: /s/ FREDERICK H. HAUSHEER
-------------------------------
Printed Name: Fred Hausheer
Title: Chief Executive Officer
|
34
EXHIBIT "A"
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
Floor Plan of Premises (graphic)
35
RIDER 201A
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
Parking Agreement
1. (a) Parking Spaces - Tenant's Obligation. Landlord shall
permit Tenant to use, and Tenant shall pay Landlord for, at all times during the
term of this Lease, parking spaces in the parking facility associated with the
Building ('Parking Garage") in the following quantities and for the Basic
Parking Charge (herein so called) set forth below for each parking space:
Basic Parking
Number of Spaces Charge per Space
---------------- ----------------
Eleven (11) $ N/A per month
|
(b) Parking Spaces - Tenant's Option. In addition to the
parking spaces in the Building Garage, Landlord shall permit Tenant to use five
(5) surface parking spaces such that the total number of spaces available to
Tenant from time to time equals one space for each 350 square feet of Rentable
Area of the Premises.
(c) Reclamation of Excess Parking spaces. If Tenant is at
any time during the Term of the Lease using more parking spaces ("Excess
Spaces") than the number to which it would be entitled by multiplying the Area
of the Premises times the ratio of the total Area of the Building divided by the
total number of parking spaces available in the Parking Garage ("Parking
Ratio"), then on thirty (30) days' notice Landlord may reclaim from use by
another tenant of the Building enough of the Excess Spaces to allow the other
tenant sufficient parking spaces to equal the Parking Ratio, based on the Area
of the Premises leased by the other tenant.
2. Basic Parking Charge. Tenant shall pay to Landlord during the
term of this Lease, as additional rental hereunder, the Basic Parking Charge
specified above for each of the parking spaces (i) required to be paid for
pursuant to paragraph 1(a) above, and (ii) actually used by Tenant pursuant to
paragraph 1(b), such amount to be payable monthly in advance on the first day of
each and every calendar month during the term of this Lease. The applicable
Basic Parking Charge may be adjusted periodically (but no more often than every
six (6) months throughout the Term of this Lease beginning on the first day of
January of the first Lease Year after the date on which this Lease commences
(and on the first day of each July and January thereafter) to equal the then
prevailing market rate for parking spaces in the Parking Garage. In
36
no event shall any adjustment in the prevailing market rate decrease the Basic
Parking Charge below that in effect in the immediately preceding Lease Year. A
pro rata portion of the Basic Parking Charge shall be payable for the first
partial calendar month if the Term of this Lease commences on a date other than
the first day of a calendar month. Default by Tenant in the payment of any Basic
Parking Charge is a default in the payment of rent, giving to Landlord all
rights and remedies available to it in such event.
3. Other Parking Provisions.
(a) Landlord may, at its option, provide a reasonable means
of controlling access to the Parking Garage, but no specific, designated parking
spaces within the Parking Garage are to be provided to Tenant.
(b) Landlord may relocate any parking areas or spaces from
time to time, and may also use portions of the Parking Garage outside of the
designated areas for free, visitor, or other parking needs of Landlord.
(c) Landlord may make, modify and enforce rules and
regulations relating to the parking of automobiles in the Parking Garage, and
Tenant shall observe those rules and regulations. Landlord also may change the
size of the Parking Garage.
(d) Tenant is responsible for ensuring that its employees
and agents do not park their automobiles in visitor parking areas or spaces, if
any, established by Landlord. or in parking spaces or areas, if any, reserved or
designated by Landlord for the use of other tenants of the Building, or for
other purposes (such as for retail tenants) so long as such designation does not
result in there being fewer than the number of spaces in the Parking Garage
specified in paragraph 1(b) above available for Tenant's use. Tenant shall
furnish to Landlord the state automobile license numbers of automobiles of
Tenant and its employees who will occupy Tenant's parking spaces from time to
time, within five (5) days from Tenant's receipt of written notice from Landlord
requesting that information.
(e) Landlord is not liable or responsible for any loss of or
to any automobile or vehicle or equipment or other property therein, or damage
to property or injury to person, unless the loss, damages, or injury is
proximately caused by the gross negligence of Landlord or its employees.
(f) Landlord may, in its sole discretion from time to time
designate parking spaces in any parking areas for the exclusive use of specified
tenants of the Building. The location and the number of those spaces shall be
determined by Landlord in its sole discretion. and Landlord may from time to
time change the location and number of those spaces.
(g) This Parking Agreement is not deemed to create a
bailment between the parties. It being agreed and understood that the
relationship created between Landlord and Tenant with regard to the parking
spaces and Parking Garage is that of licensor and licensee, respectively.
37
(h) If fifty percent (50%) or more of the Parking Garage is
damaged by fire or other casualty or if the insurance proceeds payable as a
result of the casualty to the Parking Garage are applied by Landlord's mortgagee
to Landlord's mortgage debt against the Building and/or Parking Garage, or if
there is a material, until ed loss to the Parking Garage, then Landlord may, at
its option, terminate this Parking Agreement by notifying Tenant in writing of
the termination within thirty (30) days of the date of the casualty. If this
Parking Agreement is not so terminated by Landlord. then Landlord shall either
(i) proceed to restore the Parking Garage and provide Tenant with alternative
parking during the restoration, or (ii) not restore the Parking Garage, but
provide Tenant with alternate parking throughout the remainder of the Term of
this Parking Agreement.
38
EXHIBIT "B"
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
Legal Description of the Land
ASHFORD OAKS SUBDIVISION
VOLUME 9400, PAGE 37
N.C.B. 14595, LOT 19
2,703 ACRES 117,743 SQ. FT.
39
(A)
EXHIBIT "C"
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
Operating Cost Computation
A. Operating Cost Examples. The following are, without limitation, examples
of costs included in the computation of Operating Costs:
(1) all taxes, assessments, and other governmental charges, whether
federal. state, county or municipal, and whether they be by taxing districts or
authorities presently taxing the Premises and Building or by others.
subsequently created or otherwise, and any other taxes and assessments levied or
assessed against the Land, the Building and other associated improvements
situated on the Land, and the Building Facilities, including interest on
installment payments, and including all costs and fees (including attorney's
fees) incurred by Landlord in contesting or negotiating with taxing authorities;
(2) all reasonable costs and expenses of operating, maintaining and
repairing (including replacing components of) Building Facilities, including
elevators, escalators, heat, ventilation, and air conditioning systems, and all
other mechanical or electrical systems serving the Building;
(3) all reasonable costs and expenses incurred in cleaning the Building;
(4) costs of all utilities for the Project. including without limitation.
the cost of water and power, heating, lighting, air conditioning, ventilating
and sewer rents or charges for the Project;
(5) all supplies and materials reasonably used in the operation and
maintenance of the Project;
(6) costs of all insurance relating to the Project, including the cost of
casualty and liability insurance applicable to the Project and Landlord's
personal property used in connection therewith;
(7) using generally accepted accounting principles amortization of costs
of or rental expenses for any machinery, equipment or other capital improvements
installed by Landlord to maintain or upgrade the Project for the benefit of
Tenant and other Building tenants or to conform to any law, ordinance, rule,
regulation. or order of any governmental authority having
40
jurisdiction over the Project which was enacted or promulgated after
construction on the Project began, or for the purpose and in reasonable
anticipation of reducing energy costs in the Project or other Operating costs:
(8) expenses and fees (including attorney's fees) incurred in contesting
the validity or applicability of any governmental enactments that may affect
Operating Costs:
(9) general maintenance costs and expenses reasonably incurred in
connection with the Project (including, but not limited to, security,
maintenance of all exterior and interior landscaping, garbage and other waste
removal, non-tenant alterations and decorations, heating and air conditioning
repairs, Parking Garage or surface parking repairs or replacements and all labor
utilized and supplies consumed with respect to any general Project maintenance);
(10) janitorial service and window cleaning for the Building, including
the Common Areas and Service Areas (including materials, supplies, Building
standard light bulb, equipment and tools therefor and rental and appreciation
costs related to the foregoing), or contracts with third parties to provide the
same:
(11) the cost of providing security to the Building and Parking Garage:
(12) reasonable management cost: of the Project (including, but not
limited to, any management fee payable by Landlord with respect to the Project.
audit and accounting expenses and legal fees), and Landlord's overhead expenses
directly attributable to Project management; and
(13) wages, salaries, fees, pension benefits, taxes, unemployment and
disability insurance, worker's compensation insurance, social security benefits
and any other expenses reasonably incurred with respect to all personnel engaged
in the operation, maintenance, leasing or security of the Project. The term
"personnel" shall include. but not be limited to, employees such as
superintendents, engineers, electricians, clerks, mechanics, helpers, security
officers, porters, cleaners, window washers, as well as contract laborers
performing services with respect to the Project.
Operating Cost Exclusions. The following are, without limitation, examples
of costs excluded from the computation of Operating Costs:
(1) leasing commissions, attorney's fees, costs and disbursements and
other expenses incurred in leasing, renovating or improving space for tenants or
prospective tenants of the Building;
(2) costs incurred by Landlord in the discharge of its obligations under
the Work Letter;
(3) costs (including permit, license and inspection fees) incurred in
renovating or otherwise improving or decorating, painting or redecorating space
for tenants of vacant space:
(4) Landlord's costs of any services sold to tenants for which Landlord
is entitled to be reimbursed by such tenants as an additional charge or rental
over and above the Base Rental and Operating Costs payable under the lease with
the tenant or other occupant;
41
(5) any depreciation and amortization on the Building, except as
expressly permitted herein;
(6) interest on debt or amortization payments on any mortgages or deeds
of trust or any other debt for borrowed money:
(7) all items and services for which Tenant reimburses Landlord outside
of Operating Costs or pays third provisions or which Landlord provides
selectively to one or more tenants or occupants of the Building (other than
Tenant) without reimbursement;
(8) advertising and promotional expenditures; and
(9) repairs or other work occasioned by fire. windstorm or other work
paid for through insurance or condemnation proceeds.
42
EXHIBIT "D"
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
Rules
1. Tenant, its agents, servants, and employees shall not block or
obstruct any of the entries, passages, doors, hallways or stairways of the
Building, or place, empty or throw any rubbish, litter, trash or material of any
nature into those areas, or permit those areas to be used at any time except for
ingress and egress of Tenant, its agents, servants, employees, visitors or
invitees. No tenant and no employee, agent or invitee of a tenant shall go onto
the roof of the Building.
2. Tenant shall refer all contractors. contractor's representatives and
installation technicians rendering any service to Tenant to Landlord for
Landlord's supervision, approval and control before performance of any
contractual service. This provision applies to all work performed in the
Building, including, without limitation, installation of telephones, telegraph
equipment, electrical devices and attachments and installations of any nature
affecting floors, walls, woodwork, trim, windows, ceilings, equipment or any
other physical portion of the Building.
3. Movement in and out of the Building of furniture, office equipment
or other bulky materials, or movement through Building entrances or lobbies, or
dispatch or receipt by Tenant of any merchandise or materials which requires use
of elevators or stairways shall be restricted to reasonable hours designated by
Landlord. All such movement shall be under the supervision of Landlord and in
the manner agreed between Tenant and Landlord by prearrangement before
performance of any movement. Prearrangements initiated by Tenant shall include
determination by Landlord, and subject to Landlord's decision and control, of
the time, method and routing of movement. and limitations imposed by safety or
other reasonable concerns which may prohibit any article, equipment or any other
item from being brought into the Building. Tenant shall assume all risk as to
damage to articles moved and injury to persons or public engaged or not engaged
in the movement, including equipment. property and personnel of Landlord if
damaged or inured as a result of acts by Tenant or Tenant's employees, agents or
contractors in connection with carrying out this service for Tenant from the
time of ring property to completion of work; and Landlord is not liable for any
such act. or any damage or loss to of the property or persons resulting from any
such act in connection with such service performed for Tenant, and Tenant hereby
agrees to indemnify, defend and hold Landlord harmless from
43
and against any and all such damage, injury or loss, including attorney's fees
arising with respect thereto.
4. No signs, advertisements or notices are allowed in any form on
windows or doors inside or outside the Premises or any other part of the
Building, and no signs except in uniform location and uniform styles fixed by
Landlord are permitted on exterior identification pylons, if any, in the public
corridors or on corridor doors or entrances to the Premises. All signs shall be
contracted for by Landlord for Tenant at the reasonable rate fixed by Landlord
from time to time, and Tenant shall be billed and pay for such service
accordingly on demand. Following move-in, no nails, hooks or screws shall be
driven or inserted in any part of the Building (other than for the handling of
pictures. diplomas or other items of a like nature), except by the maintenance
personnel of the Building, nor shall any part be defaced by tenants.
5. No draperies, shutters, or other window coverings shall be installed
on exterior windows or walls or windows and doors facing public corridors
without Landlord's written approval. Landlord may require installation and
continued use of uniform window coverings for such windows.
6. No portion of the Premises or any other part of the Building may at
any time be used or occupied as sleeping or lodging quarters.
7. Tenant shall not place, install or operate in the Premises or in any
other part of the Building any engine, stove or machinery, or conduct mechanical
operations or cook thereon or therein (except for coffee machines, microwave
ovens and other breakroom appliances of a residential nature), or place or use
in or about the Premises any explosive, gasoline, kerosene, oil, acids, caustics
or any other inflammable, explosive or hazardous materials, fluid or substance
without the prior written consent of Landlord. If such chemicals are permitted
by Landlord, Tenant must supply Landa MSDS forms in compliance with all
applicable laws to which Landlord is subject. The preceding sentence does not
prohibit the storage of photocopier or other typical office supplies within the
Premises.
8. Any directory of the Building provided by Landlord shall be
exclusively for the display of the name and location of tenants in the Building,
and Landlord may exclude any other names therefrom and may limit the number of
listings per tenant. Tenant shall pay Landlord's standard charge for Tenant's
listing thereon and for any changes by Tenant.
9. Landlord is not responsible for lost or stolen personal property,
equipment, money or any article taken from the Premises or the Building, whether
or not any such area is locked against entry.
10. Tenant shall keep and shall cooperate with Landlord and Landlord's
employees and agents in keeping, the Premises in a clean and tidy condition at
all times.
11. No curtains, blinds or screens may be attached to or hung, or used
in connection with, any window or door of the Premises without the prior written
approval of Landlord as to the quality, type, design, color and manner of
attaching the same. No protective screen, grating, shade or other enclosing
device may be used on the portion of the Premises abutting the Common Areas,
courts, atria or public corridors without Landlord's prior written approval as
to
44
the quality, type, design, color and manner of attaching the same, to the end
that all portions of the Premises facing those Common Areas shall be compatible
to appearance.
12. Tenant, its agents, servants or employees shall not bring into the
Building or the Premises or keep on the Premises any dog bird or animal. Tenant,
its agents, servants or employees shall not bring into the Building or keep on
the Premises any bicycle or other vehicle without the prior written consent of
Landlord.
13. No additional locks shall be placed on any door in or providing
access to the Premises without the prior written consent of Landlord. A
reasonable number of keys to the Premises and security access cards for the
building (if that method is used) will be furnished by Landlord and neither
Tenant. its agents, servants, or employees, shall have any duplicate keys made.
Landlord may at all times keep a pass key to the Premises. All keys shall be
returned to Landlord promptly on termination of this Lease. Tenant shall pay a
reasonable amount fixed by Landlord from time to time for each key and security
access card issued by Landlord in replacement of one previously issued.
14. Tenant shall give Landlord prompt notice of all accidents to or
defects in air conditioning equipment, plumbing, electrical facilities or any
part or appurtenance of the Premises.
15. Landlord will not permit entrance to Tenant's offices by use of pass
keys controlled by Landlord to person at any time without permission by Tenant
except employees, contractors, janitorial staff, or police personnel directly
supervised by Landlord or employees of the United States Postal Service.
16. Employees of Landlord shall not receive or carry messages for or to
any Tenant or other person, and shall not contract with or render free or paid
services to any Tenant or Tenant's agents, employees or invitees. If Landlord's
employees perform any such services, then those employees are solely the agents
of Tenant regardless of whether or how payment is arranged for services, and
Landlord is expressly relieved from any and all liability in connection with any
such services and any associated injury or damage to person or property.
17. Landlord may exclude or expel from the Building any person who, in
the judgment of the Landlord, is intoxicated or under the influence of liquor or
drugs, or who in any manner acts in violation of the Rules of the Building.
18. Tenant shall not use the plumbing facilities of the Premises for any
purpose other than that for which they were constructed. Tenant shall not
dispose of any substances in such facilities which may clog, erode, or damage
the plumbing pipes, lines, or conduits of the Building whether through the
utilization of "garbage disposal" units or otherwise. Tenant shall pay for all
damages resulting to any fixtures or appliances from misuse by Tenant, or
Tenant's agents or employees, and Landlord is in no way responsible therefor.
19. Landlord may prescribe the weight and position of safes, computers
and other heavy equipment which shall, in all cases, in order to distribute
their weight, stand on supporting devices approved by Landlord. All damage done
to the Premises or to the Building by placing in or taking out any property of
Tenant unless caused by the negligence or willful misconduct of
45
Landlord or Landlord's employees or agents or done by Tenant's property while in
the Premises or the Building, shall be repaired immediately at the sole expense
of Tenant.
20. To ensure orderly operation of the Building, no ice, minerals or
other water, towels, newspapers, etc. shall be delivered to the Premises except
by persons approved by Landlord in advance in writing.
21. Landlord may refuse admittance to the Building from 7 p.m. to 7 a.m.
daily, or on Sundays or on legal holidays, to any person or persons who cannot
furnish satisfactory identification, or to any person or persons who for any
other reason in Landlord's judgment. should be denied access to the Premises.
Landlord, for the protection of the tenants and their effects, may prescribe
hours and intervals during the night, on Sundays and Holidays, when all persons
entering and departing the Building are required to enter their names, the
offices to which they are going or from which they are leaving, and the time of
entrance or departure in a register provided for that purpose by Landlord.
22. Canvassing, soliciting and peddling in the Building are prohibited,
and each Tenant shall cooperate to prevent the same.
23. Alterations and miscellaneous job orders shall at all times be
directed to the Building manager's office to facilitate the orderly and
otherwise proper processing of that work in accordance with any covenants of the
Lease applicable thereto.
24. Landlord may waive any one or more of these Rules for the benefit of
any particular tenant or tenants, but no waiver by Landlord shall be construed
as a waiver of such Rules in favor of any other tenant or tenants, or prevent
Landlord from thereafter enforcing all Rules against any or all of the tenants
of the Building.
25. Landlord may rescind or amend any of these Rules and make other and
further reasonable rules as in its judgment are from time to time necessary and
desirable.
26. These Rules are in addition to, and shall not be construed to in any
way modify, alter, or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of Premises in the Building.
46
EXHIBIT "G"
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
Addendum
A. Article 1.1(i) "Base Rental": payable monthly in advance in installments
according to the following schedule.
$1,593.67 Month 1
$3,187.33 Month 2
$4,781.00 Months 3-24
$5,008.67 Months 25-36
$5,236.33 Months 37-48
$5,464.00 Months 49-60
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B. Option to Terminate:
So long as Tenant is not in default under the terms of this lease, Tenant
shall have the option of terminating this lease on the second, third or
fourth anniversary of the commencement date of this lease by providing
Landlord sixty (60) days prior written notice. In the event Tenant
exercises this option for the purpose of leasing other premises within the
Building and a new lease for said premises is fully executed by both
parties, Tenant shall not be required to remove tenant alterations after
the Commencement Date of the Lease as stipulated in Section 6.4.
47
RIDER 101
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
Work Letter
Landlord leases the Premises to Tenant in "as-is" condition and Landlord
will have no obligation to make improvements therein except as set forth herein.
Landlord shall at Landlord's sole cost and expense provide Building Standard
Signage at the entry to Tenant's space and on the Building Directory, balance
the heating, ventilation and air conditioning system throughout the Premises,
shampoo all carpeted flooring, disconnect all sprinkler heads servicing Tenant's
computer room facility (subject to necessary approval by those authorities
having jurisdiction over such matters) and install new vinyl flooring in the
existing restroom facilities.
Landlord agrees that Tenant may install two (2) 220 volt, 3 phase outlets
in the Premises at Tenant's sole cost and expense, with electric service to said
outlets not to be separately metered by Landlord. Further, Tenant shall be
allowed to install two (2) auxiliary air units with separate electrical meter in
the Premises at Tenant's sole cost and expense electrical service to which will
be separately metered by Landlord and paid by Tenant as Additional Rent.
Landlord hereby approves Tenant's future installation of lab facilities,
subject to landlord's reasonable approval of Tenant's plans and specifications
and installation procedures outlined in Section 6.5 and further subject to local
building and fire codes.
48
FIRST AMENDMENT TO LEASE
This First Amendment to Lease (the "Amendment") is entered into this 28th
day of June, 1993 by and between Building Acquisition Corporation, a Texas
Corporation ("Landlord") and BioNumerik Pharmaceutical, Inc., a Delaware
corporation ("Tenant").
W I T N E S S E T H
WHEREAS, Landlord and Tenant executed that certain lease (the "Lease")
dated as of May 1, 1992, covering approximately 5,464 square feet of Rentable
Area in the Ashford Oaks Office Building located at 8122 Datapoint Drive, in the
City of San Antonio, Bexar County, Texas, and further identified as Suite 1250;
and
WHEREAS, Tenant, formerly known as BioNumerik Pharmaceutical, a Limited
Liability Company, organized and existing under the laws of the State of Texas
having merged with and into BioNumerik Pharmaceutical, Inc., a Delaware
Corporation, hereby affirms the terms of the Lease and further attorns to,
assumes and agrees to be bound by all of the terms of the Lease, except where
specifically amended herein; and
WHEREAS, Landlord and Tenant desire to amend said lease;
NOW, THEREFORE, in consideration of the Premises and the mutual benefits
to accrue to Landlord and Tenant, both parties agree that effective June 28,
1993, the following designated sections of the above described Lease shall be,
and hereby are, amended as follows:
1. Section 1.1(c) "Tenant" is amended to read BioNumerik
Pharmaceutical, Inc., a Delaware Corporation.
2. Section 1.1(h) "Premises" is amended so that the Premises shall
contain approximately 5,275 square feet of Rentable Area on the 12th floor (the
"Original Premises") of the Building to be identified as Suite 1250 in the
location indicated on Exhibit "A" and approximately 7,757 square feet of
Rentable Area on the 4th floor of the Building to be identified as Suite 400 in
the location indicated on the attached Exhibit "A-1" (the "Expanded Premises").
The Expanded Premises together with the Original Premises sometimes hereinafter
referred to as the "Entire Premises".
3. Section 1.1(j) "Base Rental" is amended so that Tenant's Base Rental
payable hereunder for the Entire Premises shall be paid monthly in advance, in
installments of Base Rental in accordance with the amounts set forth in the
following schedule:
Monthly Base Monthly Base Monthly Base
Monthly Period Rental Suite 1250 Rental Suite 400 Rental Total
-------------- ----------------- ---------------- ------------
1 - 12 $4,615.63 $7,757.00 $12,372.63
13 - 24 4,837.18 8,067.35 12,904.53
25 - 36 5,053.45 8,455.13 13,508.58
37- 48 5,275.00 8,782.47 14,057.47
49 - 60 5,496.55 9,108.27 14,604.82
|
4. The following shall be added to Section 1.1(k) "Anticipated
Commencement Date": The Anticipated Commencement Date for the Expanded Premises
is amended to be six (6) months after the full execution of this Amendment.
5. The following shall be added to section 1.1(l) "Commencement Date":
The Commencement Date for the Original Premises shall remain the date Tenant
took occupancy of the Original Premises and the Commencement Date for the Entire
Premises shall mean the date which is the earlier of (i) the date the Premises
are
"ready for occupancy", as defined in Rider 301, or (ii) six (6) months after the
full execution of this Amendment (the "Second Commencement Date").
6. The following shall be added to Section 1.1(m) "Term" so that the
Term of the Original Premises shall begin at the Commencement Date for such
Premises and the Term for the Entire Premises shall be for an additional period
of sixty (60) months beginning on the Commencement Date as defined in Paragraph
5 of this Amendment. In the event the commencement Date is not the first day of
a calendar month, this Lease will nevertheless continue for a period not to
exceed sixty (60) months (subject to Tenant's right to renew as provided in this
Amendment), and Tenant's Base Rental will be prorated accordingly.
7. Section 1.1(n) "Area of the Building" is amended so that the
stipulated number of square feet of Rentable Area in the Building is 190,819
square feet.
8. Section 1.1(o) "Area of the Premises" is amended for the Entire
Premises so that the stipulated number of square feet of Rentable Area in the
Entire Premises upon the completion of Suite 400 is 13,032 square feet.
9. Section 1.1(p) "Landlord's Operating Cost Contribution" is amended
for the Entire Premises to be $5.25 for each square foot in the Area of the
Building.
10. Section 1.2(b) "Tenant's Pro Rata Share" in amended for the entire
Premises to be 6.8295%.
11. Exhibit "G" is deleted in its entirety.
12. Rider 201A Paragraph 1.(a) is amended so that the number of spaces
Tenant may use in the parking facility shall be twenty-five (25). Three (3) of
the above spaces shall be designated reserved parking spaces in the Building
garage in locations to be determined by Landlord from time-to-time.
13. "Non-disturbance". In connection with any mortgage executed after
the date hereof, provided that (i) so long as Tenant is in compliance with the
provisions of this Lease, Tenant's use and occupancy of the Premises and its
rights under this Lease shall not be disturbed or affected by any foreclosure or
other action (or by the delivery or acceptance of a deed or other conveyance or
transfer in lieu thereof) which may be instituted or undertaken in order to
enforce any right or remedy available to such holder, (ii) Tenant shall not be
named as a party defendant in any foreclosure, summary or any other action
commenced by any such secured party, and (iii) any party succeeding to the
interest of Landlord as a result of any such enforcement action or otherwise
shall be bound to Tenant, and Tenant shall be bound to it, under all the terms,
covenants and conditions of this Lease with the same force and effect as if such
party were the original Landlord under this Lease. Landlord will use its best
efforts to obtain any such written non-disturbance agreement from any such
mortgagee.
14. "Hazardous Materials". Notwithstanding anything herein to the
contrary, Landlord represents and warrants to the best of Landlord's knowledge
(i) that no hazardous materials, wastes, or substances as those terms are
defined by current applicable laws and regulations and no other materials
intended for use at or generated on such Building or the Premises have been or
are used, stored or treated or otherwise disposed of in violation of current
applicable laws and regulations; (ii) the Premises are now in condition that is
clean, healthful, environmentally safe and free of all environmental
contamination; and (iii) Landlord is not in violation of (at the commencement of
this Lease) and has no existing or potential obligation to take corrective
action pursuant to any applicable zoning, ordinance or other law, regulation or
requirement relating to the operation of the use of the Building and Premises,
including without limitation, applicable building codes and environmental
protection and occupational health and safety laws and regulations.
15. The following shall be added to the Lease as Section 22.18
"Guarantee": within three (3) weeks of the full execution of this Lease, Tenant
shall provide Landlord an irrevocable Letter of Credit to be issued by Texas
Commerce Bank of San Antonio acceptable to Landlord naming Landlord beneficiary
therein (hereinafter defined as the "Letter of Credit") in an amount equal to
$93,084.00. Upon an occurrence of a monetary Event of Default by Tenant under
the Lease and after written notice and a reasonable time to cure, Landlord may
draw against the Letter
of Credit to the extent of such default. In the event Tenant has not so
defaulted, the amount of the Letter of credit may be reduced during the term of
this Lease by Tenant in accordance with the following schedule:
Required Amount of Letter of
Monthly Credit per square foot of Required Amount of Letter of
Period Rentable Area on the 4th floor Credit in total dollars
------ ------------------------------ -----------------------
1-20 $12.00 $93,084.00
21-40 $10.00 * $77,570.00
41-50 $ 8.00 ** $62,056.00 **
51-60 $ 5.00 *** $38,785.00 ***
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* This amount may be further reduced by $0.10 per square foot of Rentable
Area as each month in this particular monthly period passes.
** This amount may be further reduced by $0.30 per square foot of Rentable
Area as each month in this particular monthly period passes.
*** This amount may be further reduced by $0.50 per square foot of Rentable
Area as each month in this particular monthly period passes.
16. Rider 301 attached hereto is added to the Lease.
17. Rider 401 attached hereto is added to the Lease.
18. Rider 501 attached hereto is added to the Lease.
BioNumerik Pharmaceutical, Inc., a Delaware Corporation hereby affirms the
terms of the Lease and further attorns to, assumes and agree to be bound by all
the terms of the Lease; and except as specifically amended herein, the Lease
dated May 1, 1992 (all its Exhibits and Riders) by and between Landlord and
Tenant, shall remain in full force and effect in accordance with its terms and
provisions.
IN WITNESS WHEREOF, the parties herein have hereunto met their hand the
day and year first above written.
TENANT: LANDLORD:
BioNumerik Pharmaceutical, Inc., Building Acquisition Corporation,
a Delaware corporation a Texas corporation
By: /s/ FREDERICK H. HAUSHEER By: /s/ TIM LYLE
Printed Name: Frederick H. Hausheer Printed: Thomas W. Lyles, Jr.
Title: Chairman & CEO Title: Secretary
Date: 7-14-93 Date: 7-16-93
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EXHIBIT A-1
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
FOURTH FLOOR PORTION OF THE PREMISES (SUITE 400)
Fourth floor Premises
Expansion space
Building lease area graphic image of floor plan representing 6,750 USF/7,757 RSF
of fourth floor premises and 3,446 USF/3,960 RSF expansion space.
EXHIBIT H
ATTACHED TO AND HAVE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
LANDLORD FURNISHED MATERIALS
Light Fixtures 208
Raco Doors
3x9 RH 13
3x9 LH 37
Door Headers 39
Ceiling Tile (Cases)
735 4
770 280
Frames (box)
LH 51
RH 12
Insulation
54 sf bundles 16
48 sf bundles 11
Owens 28 of rolls 143
Door jams (box)
LH 1
Passage Sets
LH 45
RH 18
Electrical
Duplex Outlets (each) 296
outlet Covers (each) 518
Single switches (each) 95
Single covers (each) 221
Door Stops (each) 58
Sprinkler covers (each) 207
Hinges (each)
LH 63
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RIDER 301
ATTACHED AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
WORKLETTER
1. Plans and Specifics
(a) Within 21 days of the execution of this Amendment, Tenant shall
submit to Landlord for Landlord's approval complete plans and specifications,
including finish schedules, for the layout, improvement and finish of the
Leasehold Improvements (herein so called) required by Tenant in the Premises
(consistent with the design and construction of office space in the Building
(collectively "Tenant's Plans"). Tenant's Plans shall be prepared by a licensed
architect and engineer reasonably satisfactory to Landlord. To the extent
necessary, Tenant's architect shall coordinate with Landlord's architect or
engineers to assure that Tenant's Plans are consistent with the plans and
specifications of office space in the Building.
(b) Tenant's Plans must be approved by Landlord. If Landlord disapproves
Tenant's Plans, or any portion hereof, then Landlord shall promptly notify
Tenant of that and of the revisions that Landlord reasonably requires before it
will approve them. As promptly as reasonably possible thereafter, but in no
event later than ten (10) days after Landlord's notice, Tenant shall submit to
Landlord for Landlord's approval plans and specifications incorporating the
required revision. The final plans and specifications approved by Landlord are
referred to as the "Final Plans." Tenant shall pay to Landlord, upon demand, all
fees of any consultants Landlord employees in connection with its review and
approval of Tenant's Final Plans, not to exceed $1,000.00. If Tenant requests
any change, addition or alteration (a "Change") to the Final Plans or in the
construction of the Leasehold Improvements, Landlord shall either approve or
disapprove in writing the proposed change within five (5) business days of
Tenant's request.
Under no circumstances is Landlord's approval of Tenant's Plans to be considered
approval of their correctness, of their compliance with applicable building and
fire codes and all other requirements of any governmental authority having
jurisdiction over the Premises, or of other sufficiency or adequacy for Tenant's
purposes, and Tenant shall save and hold Landlord, its officers, employees,
legal representatives and assigns harmless from all liability, claim, cost and
expense incurred in connection with the failure of any Leasehold improvements
constructed in accordance with the Final Plans to comply with said requirements
and codes. The Leasehold Improvements constructed as a part of the Final Plans
shall be the property of Landlord and shall remain upon and a part of and be
surrendered with the Premises upon the expiration of the Term of the Lease.
2. Building Permit, Certificate of Occupancy. Tenant shall be responsible for
obtaining all necessary building and other permits for construction of the
Leasehold Improvements and for obtaining a certificate of occupancy permitting
unconditional occupancy and use of the Premises (for the purpose stipulated in
Section 1.1(r)) after completion of the Leasehold Improvements.
3. Payment for Work. Landlord shall provide to Tenant an allowance not to
exceed $15.00 per square foot of Rentable Area of the fourth (4th) floor portion
of the Premises plus $2.50 per square foot of Rentable Area of the twelfth
(12th) floor of the Premises (the "Allowance") to be applied to pay only for
those actual coats of the Leasehold improvements, including, without limitation,
architectural and engineering fees relating to the construction of the Leasehold
Improvements to the Premises. The Allowance shall be provided only upon receipt
of paid invoices from Tenant.
In the event the cost of constructing the Leasehold Improvements to the Premises
described on the Final Plans exceeds the Allowance (the "Excess") Tenant shall
pay any such Excess. The Allowance for each floor shall be treated separately
and in the event Tenant does not fully utilize all the Allowance on one
particular floor, such remaining portion of the Allowance may not be applied to
the other floor. Tenant shall promptly pay any such Excess and shall comply
fully with any contract or other agreement therefor, to the end that there is no
basis for a mechanic's or materialman's lien claim against the Premises or the
Building.
If Tenant requests any changes in the Final Plans, then any of those changes
that are approved by Landlord shall become part of the Final Plans, and the
costs of revising the Final Plans and the costs resulting from the changes shall
be added to the Excess, and shall be paid in accordance with the provisions set
out in this Rider 301.
If the actual construction costs are less than the Allowance, Tenant shall not
be entitled to any portion of the unexpended Allowance, which shall belong to
Landlord.
4. Construction. Construction of the Leasehold Improvements shall be
performed by Tenant's contractors. In selecting Tenant's contractor, Tenant must
competitively bid the Final Plans to at least three (3) qualified contractors. A
Qualified Contractor shall be defined as one which meets the insurance
requirements and reasonable approvals of Landlord. Landlord shall apply the
Allowance only to the amount stipulated in the lowest qualifying bid and no
portion of the Allowance may be applied to pay any construction cost of any
other Qualified Contractor which is in excess of the lowest bid, reasonable
change order cost excepted.
5. Delay. Tenant shall pay any and all costs and expenses incurred by
Landlord in connection with any delay in the commencement or completion of the
Leasehold Improvements caused by (i) Tenant's failure to timely prepare and
submit Tenant's Plans; (ii) Tenant's specification of non-building standard
improvements or finishes; (iii) any change, additions or alteration to the Final
Plans (or the Leasehold improvements covered thereby) that are requested by
Tenant; and (iv) any other delay requested or caused by Tenant.
6. Commencement Date/"Ready for occupancy". For the purpose of this First
Amendment to Lease, the Premises are "ready for occupancy" on the first to occur
of (i) the date that the Leasehold Improvements to the Premises- described on
the Final Plane are substantially completed except for any minor punch-list
items to be performed by Tenant's contractor, or (ii) on the date on which
Tenant begins occupancy of the Premises, or (iii) the date on which substantial
completion would have occurred, but for delays of the nature described in
Paragraph 5 of this Rider 301, but in no event later than six (6) months after
the full execution of this Amendment. Once the Premises are deemed "ready for
occupancy", Tenant shall sign a letter, in a form and fashion satisfactory to
Landlord, acknowledging that the Premises have been completed in accordance with
the Final Plans and stating the Commencement Date and expiration date of the
Term of the Lease. However, Tenant's failure to execute or deliver such a letter
shall not delay or otherwise change the Commencement Date.
7. Default. A default by Tenant under this Work Letter is an Event of Default
under the Lease and entitles Landlord to any remedies under the Lease
(notwithstanding that tile Term thereof has not commenced).
8. Indemnity. Tenant shall indemnify, defend, and hold Landlord harmless from
and against any damages suffered by Landlord as a result of Tenant's failure to
comply with the terms of this workletter.
9. Landlord Furnished Materials. In addition to the Allowance provided by
Landlord above, Landlord shall make available to Tenant (for the construction of
the initially leased Premises only) at no additional cost, "stockpiled
materials" which may be currently stored in the vacant spaces of the Building.
Any such materials not actually used in the construction of the Premises shall
be returned to Landlord's inventory. Such inventory of remaining "stockpiled
materials" is attached as Exhibit "H".
RIDER 401
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
EXPANSION OPTION/RIGHT OF FIRST OFFER
1. "Expansion Option". So long as Tenant is in possession of the Premises and
has not committed an Event of Default under this Lease and Tenant's financial
condition, as determined by Landlord is comparable to Tenant's financial
condition at the time of the full execution of this Amendment, during the first
eighteen (18) months after the commencement Date referenced in Paragraph 4 of
this Amendment, Tenant shall have the option (hereinafter defined as the
"Expansion Option") to lease an additional 3,960 square feet of Rentable Area on
the fourth (4th) floor of the Building where indicated on Exhibit "A-1" attached
to be identified as part of Suite 400 (hereinafter defined as the "Expansion
Space").
(a) To exercise the Expansion Option (i) Tenant must give written notice
(hereinafter defined as the "Expansion Notice") of its intention to lease the
Expansion Space at least sixty (60) days prior to the date Tenant anticipates
occupying the Expansion Space, (ii) Tenant must lease the entire Expansion
Space, and (iii) such anticipated occupancy date must not be later than eighteen
(18) months after the Commencement Date referenced in Paragraph 4 of this
Amendment.
(b) Upon receipt of the Expansion Notice from Tenant, Landlord shall
submit to Tenant an amendment within fifteen (15) business days setting forth
the terms and conditions of such expansion. Such amendment shall establish the
effective date of the changes to the Lease and shall set forth the increases in
the Area of the Premises, Tenant's Pro Rata share and Tenant's Base Rental. In
the event Tenant does not fully execute the amendment in a final form and
fashion that is satisfactory to both parties, Landlord shall be free to market
the Expansion Space unconditionally and this Expansion Option shall be of no
further force or effect.
(c) Once the Expansion Space is "ready for occupancy" (as defined in
Rider 301) Tenant's Base Rental for the entire Premises including the Expansion
Space shall be increased to the amounts set forth in the following schedule:
Monthly Base Rental for the entire
Monthly Period Premises (including the Expansion Space)
-------------- ----------------------------------------
1-12 $16,332.63
13-24 17,022.93
25-36 17,824.98
37-48 18,540.98
49-60 19,254.65
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For purposes of example only, in the event the Expansion Space is "ready for
occupancy" on month five (5) of the Term of the Lease, Tenant's Base Rental as
increased by the leasing of the Expansion Space would be $16,332.63 and continue
in accordance with the remainder of the schedule above.
(d) In the event Tenant exercises this Expansion Option and the
Expansion Space is not "ready for occupancy" within eighteen (18) months after
the Commencement Date referenced in Paragraph 4 of this Amendment for any reason
whatsoever, Tenant's Base Rental as increased by the leasing of the Expansion
Space
shall nevertheless become due and payable on the nineteenth (19th) month of the
Term of the Lease in accordance with the amounts set forth in the above
schedule.
(e) Leasehold Improvements to the Expansion Space shall be constructed
in accordance with Rider 301 attached hereto, provided, however, anything
contained in Rider 301 to the contrary notwithstanding the following shall
apply:
(i) Tenant shall submit its plans and specifications (for the Expansion
Space) referenced in Paragraph 1(a) of said rider to Landlord for
approval no later than ten (10) days after Landlord and Tenant fully
execute an amendment to the Lease as referenced above; and
(ii) the Allowance for the Expansion space shall not exceed $59,400.00
and such Allowance shall be proportionately reduced by the ratio
which the remaining Term of the Lease bears to the Term as
stipulated in Paragraph 5 of this Amendment.
(f) As consideration for Landlord providing Tenant this Expansion Option
right, until such time as the Expansion Option expires or Tenant has elected to
exercise the Expansion Option and has subsequently begun paying the increased
Base Rental in accordance with the schedule of Base Rental set forth in 1(c)
above, Tenant shall pay as additional Base Rental, the amounts set forth in the
following schedule:
Additional Base Rental for Tenant's
Monthly Period Expansion Option Rights
-------------- -----------------------
1-6 $ 0.00
7-12 1,524.60
13-18 1,980.00
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2. "Right of First Offer". Provided there has not been an occurrence of
an Event of Default by Tenant and Tenant is in possession of the Premises,
Tenant shall have the right to lease the balance of the fourth (4th) floor and
all of the sixth (6th) and the seventh (7th) floors should they become available
for lease to a third party tenant during tile Term of the Lease (hereinafter
defined as the "Right of First Offer"). Landlord shall notify Tenant in writing
of the availability of such space and the terms and conditions under which
Tenant shall be able to lease such space prior to marketing said space to a
third party. Upon such notice Tenant shall have twenty (20) days to either lease
such space on the terms and conditions that Landlord has presented to Tenant or
counter Landlord with terms and conditions acceptable to Tenant and Landlord. In
the event Landlord and Tenant agree to such expansion Landlord and Tenant shall
execute an amendment to this Lease in a form and fashion satisfactory to both
parties, setting forth the terms and conditions of such expansion. In the event
Tenant does not respond or an agreement is not reached within ten (10) days of
Landlord's receipt of any counter offer from Tenant, Landlord shall be free to
market such space unconditionally.
RIDER 501
ATTACHED AND MADE A PART
OF
OFFICE LEASE AGREEMENT
ASHFORD OAKS OFFICE BUILDING
OPTION TO EXTEND
Tenant shall have one (1) option (the "Option") to renew and extend the Term of
this Lease for sixty (60) months (the "Renewal Term"), which option shall follow
consecutively on the expiration of the Term of this Lease, provided that at the
time that the option to renew is exercised, this Lease is in full force and
effect, Tenant is not in default hereunder and has not vacated the Premises. The
option shall be exercised by Tenant's giving to Landlord written notice of its
intention to renew and extend the Term of this Lease at least twelve (12) months
and no more than fifteen (15) months before the expiration date of the initial
Term of this Lease. The renewal and extension of this Lease for the Renewal Term
shall be on and under the same covenants, agreement, terms, provisions, and
conditions as are contained herein for the initial Term of this Lease, including
those providing for adjustments to the rent; provided however, that the rent for
the Renewal Terms shall be at the then prevailing rental rate for comparable
office space. In determining the then prevailing rental rate, Landlord will take
into consideration Tenant's creditworthiness, recent leases in the Building and
in comparable office buildings in a comparable geographic area, provided
however, in the determination of the then prevailing rental rate any recent
leases containing previously negotiated rental discounts (i.e. renewal rate
ceilings established at the time of initial lease execution, etc.) shall be
excluded. A legal document satisfactory to both parties shall be executed by
both parties that reflects the terms and conditions of such Renewal Term. Any
assignment or subletting by Tenant in violation or breach of Section 11.1 of
this Lease or vacating the Premises, shall terminate the Option to Tenant set
forth herein. Any termination of this Lease during the initial Term shall
terminate all rights of renewal and extension set forth in this Rider 301. In
the event Tenant elects to lease less Rentable Area than the initially leased
Premises, this option to renew will become null and void.
At any time during the forty-five (45) day period immediately preceding
the date by which Tenant is required to exercise a renewal option, Tenant may
request in writing a quote from Landlord of the rent that will be applicable for
the Renewal Term. Landlord shall respond to a timely written request by
providing Tenant a written quote of the rent within fifteen (15) business days
after Landlord's receipt of Tenant's request.
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease (the "Amendment") is entered into this 28th
day of February, 1995, by and between Building Acquisition Corporation, a Texas
Corporation ("Landlord") and BioNumerik Pharmaceuticals, Inc., a Delaware
Corporation ("Tenant").
W I T N E S S E T H
WHEREAS, Landlord and Tenant executed that certain lease (the "Lease")
dated as of May 1, 1992, covering approximately 5,464 square feet of Rentable
Area in the Ashford Oaks Office Building (the "Building") located at 8122
Datapoint Drive, in the City of San Antonio, Bexar County, Texas, and further
identified as Suite 1250; and
WHEREAS, Tenant, formerly known as BioNumerik Pharmaceuticals, L.C., a
Limited Liability Company, organized and existing under the laws of the State of
Texas having merged with and into BioNumerik Pharmaceuticals, Inc., a Delaware
Corporation, hereby affirms the terms of the Lease and further attorns to,
assumes and agrees to be bound by all of the terms of the Lease, except where
specifically amended herein; and
WHEREAS, Landlord and Tenant have previously executed that certain First
Amendment to extend the term of the Lease and to expand the space covered by the
Lease to certain areas of the fourth floor of the Building including Exhibit
"A-1", "H", Rider 301, 401 & 501, dated July 16, 1993 (the "First Amendment");
and
WHEREAS, Landlord and Tenant desire to further amend said Lease;
NOW THEREFORE, in consideration of the Leased Premises and the mutual
benefits to accrue to Landlord and Tenant, both parties agree that effective May
1, 1992, the following designated sections of the above described Lease shall
be, and hereby are amended as follows:
1. Section 1.1 (j) "Base Rental" shall be as follows:
Suite 1250 Suite 400
Suite 1250 Base Rental Suite 400 Base Rental Total
Monthly Monthly Rate Monthly Rate Monthly
Period Month Base Rental (Monthly) Base Rental (Monthly) Base Rental
------ ----- ----------- --------- ----------- --------- -----------
1-12 5/92-4/93 $4,615.63 $ .875 $ 4,615.63
13-24 5/93-4/94 4,837.18 .917 4,837.18
25-26 5/94-6/94 5,053.45 .958 5,053.45
27-36 7/94-4/95 5,053.45 .958 $ 7,757.00 $ 1.00 12,810.45
37-38 5/95-6/95 5,275.00 1.00 7,757.00 1.00 13,032.00
39-48 7/95-4/96 5,275.00 1.00 8,067.35 1.04 13,342.35
49-50 5/96-6/96 5,496.55 1.042 8,067.35 1.04 13,563.90
51-60 7/96-4/97 5,496.55 1.042 8,455.13 1.09 13,951.68
61-62 5/97-6/97 5,712.83 1.083 8,455.13 1.09 14,167.96
63-72 7/97-4/98 5,712.83 1.083 8,782.47 1.1322 14,495.30
73-74 5/98-6/98 5,934.37 1.125 8,782.47 1.1322 14,716.84
76-84 7/98-4/99 5,934.37 1.125 9,108.27 1.1742 15,042.64
85-86 5/99-6/99 6,155.92 1.167 9,108.27 1.1742 15,264.19
87-96 7/99-4/00 6,155.92 1.167 9,742.79 1.256 15,898.71
97-98 5/00-6/00 6,372.20 1.208 9,742.79 1.256 16,114.99
99-108 7/00-4/01 6,372.20 1.208 10,371.11 1.337 16,743.31
109-110 5/01-6/01 6,593.75 1.250 10,371.11 1.337 16,964.86
111-120 7/01-4/02 6,593.75 1.250 11,038.21 1.423 17,631.96
|
Total Base Rental payable during the ten (10) year term is $1,530,354.16.
2. Section 1.1(l) "Commencement Date" shall be May 1, 1992 for Suite
1250 and July 1, 1994 for Suite 400.
3. Section 1.1 (m) "Term" shall commence May 1, 1992 and end April 30,
2002.
4. If the Expansion Option is exercised before December 31, 1995 the
Base Rental Rates for Suite 400 described above shall also apply to
the Expansion Space as defined in the Expansion Option contained in
Rider 401 attached to the First Amendment. Such Expansion Option
shall be extended and remain available to Tenant through December
31, 1995, provided, however, if Tenant has not exercised said
Expansion Option by July 1, 1995, Tenant shall commence paying a
Retention Fee in the amount of $1,524.00 per month to retain such
Expansion Option rights through December 31, 1995. Should Tenant
fail to timely remit such Retention Fee, Tenant shall forfeit
Tenant's rights under the Expansion Option. The Retention Fee
provides Tenant no additional rights other than to exercise the
rights set forth in Rider 401 and to require Landlord not enter into
a lease with another party for the Expansion Space prior to December
31, 1995. This provision supercedes the payment schedule set forth
in Paragraph 1 (f) of Rider 401 to the Lease.
Paragraph 1 (c) of Rider 401 shall be deleted in its entirety and
the schedule of Base Rental amounts set forth in Paragraph 1 of this
Amendment shall be increased in accordance with the following
schedule once the Expansion Space is "ready for occupancy" (as
defined in Rider 301):
MONTHLY BASE RENTAL FOR
MONTHLY PERIOD THE EXPANSION SPACE*
-------------- --------------------
7-1-94 thru 6-30-95 $3,960.00
7-1-95 thru 6-30-96 $4,118.40
7-1-96 thru 6-30-97 $4,316.40
7-1-97 thru 6-30-98 $4,483.51
7-1-98 thru 6-30-99 $4,649.83
7-1-99 thru 6-30-00 $4,973.76
7-1-00 thru 6-30-01 $5,294.52
7-1-01 thru 4-30-02 $5,635.08
|
*This amount shall be added to Total Monthly Base Rental shown in
Paragraph 1 of this Amendment upon exercise of the Expansion Option.
5. Should Tenant exercise its Right of First Offer as described in
Paragraph 2 of Rider 401 before March 31, 1995, then the Base Rental
Rates for Suite 400 shall apply to the areas covered by the Right of
First Offer of the 4th floor. Failure to exercise this Right of
First Offer prior to March 31, 1995 shall relieve Landlord of any
obligation to offer the predetermined Base Rental Rate but shall not
cause the Right of First Offer to terminate in regards to the
remaining 4th, 6th and 7th floor space. Additionally, Landlord and
Tenant do hereby agree that in regard to the remaining 4th floor
space, Tenant is hereby notified said space is available for lease
to Tenant. Except as limited above to defined rental rates, Tenant
may lease said area under the same conditions as the Expansion Space
and in accordance with the notice provisions contained in Rider 401.
6. Tenant may elect to terminate this Lease as of June 30, 1999,
provided however, Tenant has provided Landlord a minimum of six (6)
months prior written notice and a maximum of twelve (12) months
prior written notice of its intention to exercise said option. To
exercise said option Tenant shall remit to Landlord at that time,
along with said notice, a Termination Fee payable to Landlord in the
amount of $46,855.80. Notwithstanding such option, Tenant shall
remain obligated to pay for any sums which it is liable under the
Lease including, but not limited to, any and all of its Prorata
Share of Operating
Costs which may not have matured as of the effective date of
termination plus any remaining unpaid sums (i.e. separate utility
charges, past due rentals, late fees, etc.). All such sums remaining
due from Tenant shall be payable within thirty (30) days of receipt
of Landlord's invoice therefore. In the event the Premises is
expanded during the initial term of the Lease and Tenant exercises
this option to terminate in accordance with the terms stipulated
above, Tenant shall remit an Additional Termination Fee. Such
Additional Termination Fee shall be based on the following formula:
34
Total Expenses X -------------------- = Additional
Remaining Lease Term Termination Fee
|
Total Expenses are defined as those expenses incurred by Landlord in
connection with the leasing of any such expanded area(s) to include,
but not be limited to, architectural fees, consulting fees, finish
allowances, etc., but not to include leasing commissions. Remaining
Lease Term is defined as the months and days remaining in the term
of the Lease at the time such expanded area is "ready for occupancy"
through April 30, 2002.
7. The following provision "Supplemental Chiller" is hereby added to
the Lease: In the interest of Landlord and Tenant, Landlord has
installed a supplemental chilled water system (the "Supplemental
Chiller") to provide supplemental cooling to the Building and
Tenant's 4th floor Premises. Tenant shall be provided use of the
Supplemental Chiller in a quantity not to exceed eighty (80) tons of
its one hundred and forty (140) ton capacity (equal to 192 gallons
per minute). Tenant shall be responsible for all costs of accessing
the chilled water supplied by the Supplemental Chiller to the fourth
floor in the location identified by Landlord. In consideration of
Landlord's installation of the above system Tenant agreed to pay,
and has paid to Landlord eighty thousand three hundred and eighty
eight no/100 dollars ($80,388.00).
All utility costs, routine maintenance and repairs and all other
costs associated with the use of the Supplemental Chiller shall be
borne by Landlord and Tenant on a prorata basis based upon the
actual ratio of BTU's consumed by each party. To measure Tenant's
use, a BTU metering device shall be installed by Tenant, at Tenant's
sole cost and expense, in the 4th floor janitor's closet near the
point of supply of the chilled water to the 4th floor Premises. To
measure Landlord's use (which for the proposes hereunder shall
include other tenant's usage but shall not include Tenant's usage),
a BTU metering device(s) shall be installed by Landlord so that any
and all such usage of the Supplemental Chiller can be accurately
measured. Such metering device(s) shall, at a minimum, measure the
temperature differential between the supply and return chilled water
lines and record the flow rate of chilled water in gallons per
minute (GPM) serving the Premises and other areas served by the
Supplemental Chiller, process this data and display the total heat
used in BTU's.
Utility costs for this service shall be based on the then applicable
rate assessed by the local utility company, City Public Service, or
its successor, for such service actually used by Tenant and paid for
by Landlord. Such cost shall be calculated based on 1 kilowatt hour
per 3413 BTU's of consumption.
8. Paragraph B Option to Terminate as contained in the Addendum to this
Lease is hereby deleted in its entirety and Tenant shall have no
rights to terminate or cancel this Lease, except as otherwise
provided in the Lease or subsequent amendments.
9. The parties hereto do hereby agree that the previous Second
Amendment to Lease dated the 28th day of February, 1994 was never
fully executed or accepted by either party and shall be considered
null and void and shall not be legally binding on either party to
this Lease.
10. Notwithstanding anything contained in Paragraph 15 of the First
Amendment to Lease, the Letter of Credit shall be provided for the
period starting July 1, 1994 and ending June 30, 1999.
11. Section 22.18 "Guarantee" is hereby amended so that Tenant's
delivery of said irrevocable Letter of Credit shall be due within
one (1) week of full execution of this Amendment. The monthly
periods referenced in Paragraph 15 of the First Amendment to Lease
shall be deemed to have commenced July 1, 1994, and as such the
amount of said Letter of Credit initially provided to Landlord may
be reduced in accordance with the provisions contained in Section
22.18. Tenant hereby acknowledges and agrees that Landlord shall
have no responsibility to disburse any portion of the Allowance
referenced in Rider 301 of the Lease until such time as Landlord has
received said Letter of Credit in a form that is reasonably
acceptable to Landlord. Tenant shall be solely responsible for any
late fees, charges or expenses incurred in the discharging of any
mechanics liens on the property or Building occasioned or caused by
any potential payment delays resulting from Landlord's withholding
of the Allowance or otherwise.
BioNumerik Pharmaceuticals, Inc., a Delaware Corporation hereby affirms
the terms of the Lease, the First Amendment and this Second Amendment, Exhibits
and Riders, and further attorns to, assumes and agree to be bound by all the
terms of the Lease. This Second Amendment to Lease supercedes the Lease and
First Amendment to Lease and if there shall be a conflict or an inconsistency
between any of these agreements, the Second Amendment to Lease shall govern and
control. Except as specifically amended herein, the Lease dated May 1, 1992,
(all its Exhibits and Riders) by and between Landlord and Tenant, shall remain
in full force and effect in accordance with its terms and provisions.
IN WITNESS WHEREOF, the parties herein have hereunto set forth their hands
this 28th day of February, 1995.
TENANT: LANDLORD:
BioNumerik Pharmaceuticals, Inc., Building Acquisition Corporation,
a Delaware Corporation a Texas Corporation
By: /s/ FREDERICK H. HAUSHEER By: /s/ DANIEL E. LEININGER
------------------------- ------------------------------
Printed Printed
Name: Frederick H. Hausheer Name: Daniel E. Leininger
Title: Chairman & C.E.O. Title: President
Date: Date:
|
THIRD AMENDMENT TO LEASE
This Third Amendment to Lease (the "Amendment") is entered into this 28th
day of October, 1998, by and between Building Acquisition Corporation, a Texas
Corporation ("Landlord") and BioNumerik Pharmaceuticals, Inc., a Texas
Corporation ("Tenant").
W I T N E S S E T H
WHEREAS, Landlord and Tenant executed that certain lease (the "Lease")
dated as of May 1, 1992, the First Amendment to Lease dated June 28, 1993 (the
"First Amendment"), and the Second Amendment to Lease dated February 28, 1995
(the "Second Amendment") regarding Rentable Area in the Ashford Oaks Office
Building (the "Building") located at 8122 Datapoint Drive, in the City of San
Antonio, Bexar County, Texas, and further identified as Suites 1250 and 400; and
WHEREAS, Tenant, hereby affirms the terms of the Lease and the First and
Second Amendments thereto and further attorns to, assumes and agrees to be bound
by all of the terms of the Lease and the First and Second Amendments thereto,
except where specifically amended herein; and
WHEREAS, Landlord and Tenant desire to further amend said Lease;
NOW THEREFORE, in consideration of the Leased Premises and the mutual
benefits to accrue to Landlord and Tenant, both parties agree that the above
described Lease, as amended by the First Amendment and the Second Amendment,
shall be further amended as follows:
1. Term Extension
The Lease Term shall be extended for a total of forty-four (44) months
("Extension Term") from the current expiration date of April 30, 2002 to a new
expiration date of December 31, 2005.
Base Rental during the Extension Term shall be as follows:
MONTH NO. OF MONTHS MONTHLY RATE ANNUAL RATE
----- ------------- ------------ -----------
5/02 - 12/03 20 $ 1.4166 $ 17.00
1/04 - 12/04 12 $ 1.50 $ 18.00
1/05 - 12/05 12 $ 1.5833 $ 19.00
|
2. Expansion Option
Tenant shall have the option to lease the balance of the space on
the fourth floor of the Building ("Expansion Option") as shown on the
attached floor plan ("Expansion Space") by providing Landlord written
notice on or before December 31, 1998.
The Expansion Space shall be deemed to contain 8,001 rentable sq.
ft. If the Expansion Option is exercised, the Leased Premises when
combined with the Expansion Space, shall contain 21,033 rentable sq. ft.
Landlord will provide the Expansion Space in an "as is" condition
and: a) allow Tenant access to and use of any building materials stored
therein; b) provide a base buildout allowance of $15.00 per rentable sq.
ft. or $120,015.00; c) provide an architectural and engineering allowance
of $.50/rentable sq. ft. or $4000.50; and d) provide, at Tenant's option,
an additional buildout allowance of $6.00 per rentable sq. ft. or
$48,006.00 to be amortized monthly over the term of the Lease at 10%
interest (collectively, the "Buildout Allowances"). Tenant shall have the
right to construct improvements in the Expansion Space without paying a
construction management fee to Landlord or Landlord's agent, subject only
to Landlord's approval of the Expansion Space construction documents, as
such approval is described in Rider 301 of the First Amendment to Lease
("Workletter").
Tenant shall pay a Base Rental for the Expansion Space as follows:
TERM MONTHLY RATE ANNUAL RATE
---- ------------ -----------
7/99 - 12/03 $ 1.5416 $ 18.60
1/04 - 12/04 1.6333 19.60
1/05 - 12/05 1.7166 20.60
|
Whether or not Tenant has completed the buildout of the Expansion
Space, the Base Rental shall commence one hundred eighty (180) days after
delivery of Tenant's written notice to exercise the Expansion Option but
in no event later than July 1, 1999. The lease term on the Expansion Space
shall expire on December 31, 2005.
For purposes of calculating Tenant's Pro Rata Share of Operating
Costs attributable to the Expansion Space, the actual Operating Costs for
calendar year 1999 shall be Landlord's Operating Cost contribution.
Tenant's Pro Rata Share attributable to the Expansion Space is 4.193% and
if this Expansion Option is exercised, 11.02% for the combined Leased
Premises.
Tenant will be provided a total of twenty-four (24) additional
parking spaces. These additional parking spaces will be at no charge for
the term of the Lease, and will be unreserved and will be provided as
eighteen (18) covered and six (6) open spaces.
3. Termination Option
Upon execution of this Amendment, Tenant will be deemed to have
canceled its existing Termination Option as described in item number 6 in
the Second Amendment. Tenant may elect to terminate the Lease, as amended
("Termination Option") as of December 31, 2002 by providing Landlord a
minimum of six (6) months prior written notice to exercise this
Termination Option. If the Expansion Option has been exercised, Tenant
shall remit to Landlord a payment ("Termination Fee") equal to the
unamortized Buildout Allowance on the Expansion Space only, as calculated
on a straight line basis over the total potential term (i.e., until
December 31, 2005). If the Termination Option is allowed to expire and is
not exercised, Landlord agrees to pay Cross & Company or its successors or
assigns, a cash, lump sum leasing commission equal to four percent (4%) of
the gross rent to be paid by Tenant on the Leased Premises over the
remaining uncancelable term no later than thirty (30) days after June 30,
2002.
4. Tenant or Tenant's officers shall not be required to provide a Letter of
Credit or Guarantee as described in the Lease Agreement, First or Second
Amendment.
5. Tenant's Right of First Offer to Lease any and all space as it becomes
available on the sixth and seventh floor of the Property, as contained in
section 2 of Rider 401 of the First Amendment to Lease shall continue in
full force and effect. Should Tenant not exercise the Expansion Option,
the Tenant shall have a Right of First Refusal on the balance of the
fourth floor. Landlord shall provide written notification of the bona fide
intent of a third party tenant to lease any or all of this fourth floor
space and the terms and conditions which the third party tenant is willing
to accept. Tenant shall then have ten (10) business days in which to
either accept this space on the same terms and conditions as the third
party or to allow Landlord to enter into a lease with the third party.
Should the Landlord and the third party fail to execute a lease or should
the space again become available for lease during Tenant's term, this
Right of First Refusal will still be valid and applicable to this space.
6. Tenant shall have the right to lease any or all of the shell space on the
fourth floor of the building at a monthly rate of 54.167(cent) per square
foot for storage. This space shall be used solely for the purposes of
storing Tenant's equipment, furniture and files only, and for no other
purpose. This agreement, as it applies to this storage space only, may be
terminated by either party providing fifteen (15) day written notice to
the other party.
Except as described in this Amendment, the terms of which shall control if
in conflict with the Lease or the First or Second Amendment to Lease, all other
terms and conditions of the Lease, First or Second Amendments to Lease shall
remain in full force and effect. Except as otherwise defined herein, all
capitalized terms used but not defined herein shall have the same meanings
assigned to such terms in the Lease, as amended by the First and Second
Amendment.
AGREED AND ACCEPTED this 28th day of October , 1998.
Tenant: Landlord:
BioNumerik Pharmaceuticals, Inc. Building Acquisition Corporation
By: /s/ DAVID R. MARGRAVE BY: /s/ DANIEL LEININGER
----------------------- ----------------------
Its: Vice President & Its: President
Chief Administrative Officer
|
EXPANSION SPACE
Building lease area graphic image of floor plan representing fourth floor
premises and expansion space.
FOURTH AMENDMENT TO LEASE
This Fourth Amendment to Lease (the "Amendment") is entered into this 13th
day of October, 1999, by and between Ashford Building, Ltd., a Texas limited
partnership, ("Landlord") and BioNumerik Pharmaceuticals, Inc., a Texas
Corporation ("Tenant").
WITNESSETH
WHEREAS, Landlord and Tenant executed that certain lease (the "Lease")
dated as of May I, 1992, the First Amendment to Lease dated June 28, 1993 (the
"First Amendment"), the Second Amendment to Lease dated February 28, 1995 (the
"Second Amendment") and the Third Amendment to Lease dated October 28, 1998 (the
"Third Amendment") regarding Rentable Area in the Ashford Oaks Office Building
(the "Building") located at 8122 Datapoint Drive, in the City of San Antonio,
Bexar County, Texas, and further identified as Suites 1250 and 400; and
WHEREAS, Tenant, hereby affirms the terms of the Lease, the First, Second
and Third Amendments thereto and further attorns to, assumes and agrees to be
bound by all of the terms of the Lease and the First, Second and Third
Amendments thereto, except where specifically amended herein; and
WHEREAS, Landlord and Tenant desire to further amend said Lease;
NOW THEREFORE, in consideration of the Leased Premises and the mutual
benefits to accrue to Landlord and Tenant, both parties agree that the above
described Lease, as amended by the First, Second and Third Amendments, shall be
further amended as follows:
1. Lease Space Expansion
The Leased Premises shall be expanded by 8,001 rentable square feet or
from 13,032 rentable square feet prior to the execution of this Fourth
Amendment to a new total of 21,033 rentable square feet. The 8,001
rentable square feet represents the balance of the fourth floor of the
Building, as shown on the attached floor plan, and shall be known as the
Second Expansion Space ("Second Expansion Space").
2. Expansion Space Tenant Finish
Landlord shall provide an allowance of $15.00 per rentable square foot or
a total of $120,015 towards Tenant's interior finish in the Second
Expansion Space. Landlord will also provide an additional allowance of
$.50 per rentable square foot or $4,000.50 for architectural and
engineering services applicable to the Second Expansion Space. Landlord
shall also provide, subject to Tenant's sole option, up to an additional
$5.00 per rentable square foot allowance or $40,005.00 to be amortized
monthly over the term of the lease at an annual interest rate of 12%
(collectively "Tenant Finish Allowances").
Tenant shall have the right to manage the construction of the interior
finish in the Second Expansion Space without a fee to be paid to Landlord
or Landlord's agent. Landlord will fund the Tenant Finish Allowances upon
receipt of paid invoices and lien waiver from Tenant. Any cost in excess
of the Tenant Finish Allowances shall be Tenant's sole responsibility.
Should Tenant use the additional allowance of $5.00 per rentable sq. ft.,
as described above, Tenant agrees to execute a memorandum to the lease
documenting the amount amortized and the resulting monthly payment. In no
event shall leasing commissions be calculated on any portion of any such
additional Base Rental attributable to the amortization of these costs.
3. Expansion Space Base Rental
Base Rental for the Second Expansion Space shall be structured as follows:
Annual Base Rental
Monthly Period Per Rentable Sq. Ft.
-------------- --------------------
Start date to 12/31/03 $19.00
1/1/04 to 12/31/04 $20.00
1/1/05 to 12/31/05 $21.00
|
Therefore, the Monthly Base Rental for the existing leased premises and
the Second Expansion Space shall be as follows:
Existing Second Expansion
Leased Premises Space Total
Monthly Period (13,032 sq. ft.) (8,001 sq. ft.)* (21,033 sq. ft.)
-------------- ---------------- ---------------- ----------------
1/00 - 4/00 $15,898.71 $12,668.25 $28,566.96
5/00 - 6/00 16,114.99 12,668.25 28,783.24
7/00 - 4/01 16,743.31 12,668.25 29,411.56
5/01 - 6/01 16,964.86 12,668.25 29,633.11
7/01 - 4/02 17,631.96 12,668.25 30,300.21
5/02 - 12/03 18,461.13 12,668.25 31,129.38
1/04 - 12/04 19,548.00 13,335.00 32,883.00
1/05 - 12/05 $20,633.57 $14,001.75 $34,635.32
|
*Base Rental for the Second Expansion Space shall commence on the earlier
of substantial completion of the interior finish or one hundred fifty
(150) days after the execution of this Fourth Amendment whether or not
Tenant has completed the interior finish in the Second Expansion Space.
("Second Expansion Space Commencement Date")
4. Other
a. For purposes of calculation of Tenant's Pro Rata Share of Operating
Costs attributable to the Second Expansion Space, the actual
Operating Costs for calendar year 2000 shall be Landlord's Operating
Cost contribution. Tenant's Pro Rata Share attributable to the
Second Expansion Space is 4.193% and 11.02% for the combined leased
premises.
b. The lease term on the Second Expansion Space shall expire on
December 31, 2005, except as hereafter provided. Tenant shall have
the right to terminate the Lease, as amended, ("Second Expansion
Space Termination Option") for the area contained in the Second
Expansion Space as of the end of the thirty-sixth (36th) month after
the Second Expansion Space Commencement Date. Tenant shall exercise
this Second Expansion Space Termination Option by providing Landlord
a minimum of six (6) months prior written notice. The Termination
Option, as described in the Third Amendment to Lease, Section #3, is
hereby adjusted so as to be exercisable and effective in the same
manner and as of the same date as this Second Expansion Space
Termination Option. If such termination option is allowed to expire
and is not exercised, Landlord agrees to pay Cross & Company or its
successors or assigns, a cash, lump sum leasing commission equal to
four percent (4%) of the Total Base Rental to be paid by Tenant on
the Leased Premises over the remaining uncancelable term. This
commission shall be paid no later than August 31, 2002. Except as
amended hereby, Tenant's existing Termination Option with respect to
the Lease, as amended, for the area of the Leased Premises, other
than the Second Expansion Space, shall remain and continue as
provided in the Third Amendment.
c. Landlord shall provide Tenant a total of twenty-four (24) additional
parking spaces at no charge for the term of the Lease to be taken as
eighteen (18) in-garage spaces and six (6) surface spaces.
Except as described in this Fourth Amendment, the terms of which shall control
if in conflict with the Lease or the First, Second or Third Amendments to the
Lease, all other terms and conditions of the Lease, First, Second and Third
Amendments to the Lease shall remain in full force and effect. Except as
otherwise defined herein, all capitalized terms used but not defined herein
shall have the same meanings assigned to such terms in the Lease, as amended by
the First, Second and Third Amendments.
AGREED AND ACCEPTED THIS 13th DAY OF OCTOBER 1999.
TENANT LANDLORD
BioNumerik Pharmaceuticals, Inc. ASHFORD BUILDING, LTD.
By /s/ FREDERICK H. HAUSHEER, M.D. By /s/ DANIEL LEININGER
--------------------------------- ----------------------------------
Its Chief Executive Officer Its President
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ATTACHMENT A
EXPANSION SPACE
Building lease area graphic image of floor plan representing fourth floor
premises and expansion space.
FIFTH AMENDMENT TO LEASE
This Fifth Amendment to Lease (the "Fifth Amendment") is entered into this
29th day of June, 2001, by and between Ashford Building, Ltd., a Texas limited
partnership, ("Landlord") and BioNumerik Pharmaceuticals, Inc., a Texas
Corporation ("Tenant").
WITNESSETH
WHEREAS, Landlord and Tenant executed that certain lease (the "Lease")
dated as of May 1, 1992, the First Amendment to Lease dated June 28, 1993 (the
"First Amendment"), the Second Amendment to Lease dated February 28, 1995 (the
"Second Amendment"), the Third Amendment to Lease dated October 28, 1998, (the
"Third Amendment") and the Fourth Amendment to Lease dated October 13, 1999 (the
Fourth Amendment) regarding Rentable Area in the Ashford Oaks Office Building
(the "Building") located at 8122 Datapoint Drive, in the City of San Antonio,
Bexar County, Texas, and further identified as Suites 1250 and 400; and
WHEREAS, Tenant, hereby affirms the ten terms of the Lease, the First,
Second, Third and Fourth Amendments thereto and further attorns to, assumes and
agrees to be bound by all of the terms of the Lease and the First, Second, Third
and Fourth Amendments thereto, except where specifically amended herein; and
WHEREAS, BioNumerik Pharmaceuticals, L.C., a limited liability company,
merged with and into BioNumerik Pharmaceuticals, Inc., a Delaware corporation,
which merged with and into BioNumerik Pharmaceuticals, Inc., a Texas
corporation. By way of the foregoing mergers and by way of various rounds of
financing during the term of the Lease, Tenant has undergone several changes in
ownership ("Changes in Ownership"); and
WHEREAS, Landlord and Tenant desire to further amend said Lease;
NOW THEREFORE, in consideration of the Leased Premises and the mutual
benefits to accrue to Landlord and Tenant, both parties agree that the above
described Lease, as amended by the First, Second, Third and Fourth Amendments,
shall be further amended as follows:
1. Lease Space Expansion
The Leased Premises shall be expanded by 9,523 rentable square feet
(the "Third Expansion Space") or from 21,033 rentable square feet
prior to the execution of this Fifth Amendment to a new total of
30,556 rentable square feet. The Third Expansion Space will be taken
as 4,761.5 rentable square feet on July 1, 2001 and the balance of
the Third Expansion Space on May 1, 2002. The 9,523 rentable square
feet represents the remaining office space on the twelfth (12th)
floor of the Building, in the location depicted on the floor plan
attached hereto as Exhibit "A".
2. Third Expansion Space Tenant Finish
Landlord shall provide an allowance of $10.00 per rentable square
foot (prorated as appropriate for the Third Expansion Space portion
to be taken in May 2002) or a total of $92,190.74 towards Tenant's
interior finish in the Third Expansion Space ("Tenant Finish
Allowance"). Tenant shall be responsible for the cost of performing
all work desired by Tenant in the Third Expansion Space to include,
1
but not be limited to, obtaining all necessary fees and permits,
construction management supervision fees, demolition, new
construction, and any and all modifications both above and below the
ceiling. Landlord will fund the Tenant Finish Allowance upon receipt
of paid invoices and lien waivers from Tenant. Any cost in excess of
the Tenant Finish Allowance shall be Tenant's sole responsibility.
3. Expansion Space Base Rental
Base Rental for the Third Expansion Space shall be structured as
follows:
Monthly Period Annual Base Rental Per Rentable Sq. Ft.
-------------- ---------------------------------------
7/01/01 to 12/31/05 $19.00
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Therefore the Monthly Base Rental for the existing Leased Premises
and the Third Expansion Space shall be as follows:
EXISTING THIRD
MONTHLY PREMISES EXPANSION TOTAL
PERIOD 21,033 SQ. FT. 9,523 SQ. FT.* 30,556 SQ. FT.
------ -------------- -------------- --------------
07/01 - 01/02 $30,300.21 $ 7,539.04 $37,839.25
02/02 - 04/02 30,300.21 7,539.04 37,839.25
05/02 - 12/03 31,129.38 15,078.08 46,207.46
01/04 - 12/04 32,883.00 15,078.08 47,961.08
01/05 - 12/05 34,635.32 15,078.08 49,713.40
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* reflects 4,761.5 rentable square feet leased on July 1, 2001 and
the same amount leased on May 1, 2002.
Base rental for the Third Expansion Space shall commence as
stipulated on the above schedule regardless of the completeness of
any leasehold improvements to be constructed by Tenant.
4. Other
a. For purposes of calculation of Tenant's Pro Rata Share of
Operating Costs attributable to the Third Expansion Space,
the actual Operating Costs for calendar year 2001 shall be
Landlord's Operating Cost contribution. Tenant's Pro Rata
Share is 4.991% for the Third Expansion Space and 16.013%
for the combined leased premises.
b. The lease term on the Third Expansion Space shall expire on
December 31, 2005, except as hereafter provided. Tenant shall
have the right to terminate the Lease, as amended, ("Third
Expansion Space Termination Option") for the area contained in
the Third Expansion Space as of December 31, 2003. To exercise
this Termination Option, Tenant must provide Landlord a
minimum of six (6) months prior written notice. The
Termination Option, as described in the Third Amendment to
Lease, Section #3 and the Second Expansion Space Termination
Option, as described in the Fourth Amendment, Section 4.b are
hereby amended so as to be exercisable and effective in the
same manner and as of the same date (as of 12/31/03) as this
Third
2
Expansion Space Termination Option; provided however, the
parties hereto agree that in the event Tenant elects to
exercise the foregoing termination options, the aggregate
termination fee shall be $86,814.90. If such termination
option is allowed to expire and is not exercised, Landlord
agrees to pay Cross & Company or its successors or assigns, a
cash, lump sum leasing commission equal to four percent (4%)
of the Total Base Rental to be paid by Tenant on the Leased
Premises over the remaining uncancelable term. This commission
shall be paid no later than January 31, 2004.
c. Landlord shall provide Tenant a total of twenty-nine (29)
additional parking spaces at no charge for the term of the
Lease to be taken as twenty one (21) in-garage spaces and
eight (8) surface spaces resulting in an aggregate of
sixty-nine (69) total parking spaces, fifty (50) in garage
spaces and nineteen (19) surface spaces.
d. Landlord recognizes and accepts that Tenant has entered into a
short term space sublease with the existing tenant in the
Third Expansion Space, subject to Landlord's approval of the
sublease document. Said sublease shall expire on June 30,2001.
e. Section 11.2 of the Lease is deleted in its entirety and
replaced with the following: "Notwithstanding anything to the
contrary in this Lease, Tenant may, without obtaining
Landlord's prior written consent, sublet the Premises or
assign the Lease to (a) an entity controlled by or under
common control with Tenant, (b) a successor entity related to
Tenant by merger, consolidation, non-bankruptcy
reorganization, or governmental action, or (c) a purchaser of
substantially all of Tenant's assets located in the Premises
(a "Permitted Transfer"). A sale or transfer of Tenant's
capital stock, including pursuant to an initial public
offering, shall not be deemed an assignment, subletting or any
other transfer of the Lease or Premises. No such Permitted
Transfer shall be subject to any rights of recapture or rent
profit-sharing provisions."
f. Section 22.16 is hereby modified by the addition of the
following sentence to the end of the paragraph:
"Notwithstanding the foregoing, Tenant may disclose, without
prior written consent of the Landlord, the terms and
provisions of this Lease as required by law, including as part
of any initial public offering of Tenant's stock."
g. Landlord consents to the Changes in Ownership.
h. This Agreement, together with the Lease, as amended,
constitutes the entire agreement between Landlord and Tenant
regarding the Lease and the subject matter contained herein
and supersedes any and all prior and/or contemporaneous oral
or written negotiations, agreements or understandings. This
Fifth Amendment shall be binding upon and inure to the benefit
of Landlord and Tenant and their respective heirs, legal
representatives, successors and assigns. No subsequent change
or addition to this Fifth Amendment shall be binding unless in
writing and duly executed by both Landlord and Tenant. Except
as specifically amended hereby, all of the terms and
conditions of the Lease, as amended, are and shall remain in
full force and effect and are hereby ratified and confirmed.
This Fifth Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but
all of which, taken together, shall constitute but one
Agreement. An executed facsimile copy of this Fifth Amendment
shall be considered an original.
3
Except as described in this Fifth Amendment, the terms of which shall control if
in conflict with the Lease or the First, Second, Third or Fourth Amendments to
the Lease, all other terms and conditions of the Lease, as amended by the First,
Second, Third and Fourth Amendments to the Lease shall remain in full force and
effect. Except as otherwise defined herein, all capitalized terms used but not
defined herein shall have the same meanings assigned to such terms in the Lease,
as amended by the First, Second, Third and Fourth Amendments.
Agreed to and Accepted on the day first above mentioned.
TENANT LANDLORD
BIONUMERIK PHARMACEUTICALS, INC. ASHFORD BUILDING, LTD.
a Texas corporation a Texas Limited Partnership
By: Ashford GP Corp.,
a Texas corporation
General Partner
By: /s/ FREDERICK H. HAUSHEER By: /s/ DANIEL E. LEININGER
Printed Name: Frederick H. Hausheer, M.D. Printed Name: Daniel E. Leininger
Title Chief Executive Officer Title: President
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4
EXHIBIT "A"
Building lease area graphic image of floor plan representing twelfth floor
premises and expansion space.
5
SIXTH AMENDMENT TO LEASE
This Sixth Amendment to Lease (the "Sixth Amendment") is entered into
effective as of June 29, 2002, by and between Ashford Building, Ltd., a Texas
limited partnership, ("Landlord") and BioNumerik Pharmaceuticals, Inc., a Texas
corporation ("Tenant").
WITNESSETH
WHEREAS, Landlord and Tenant executed that certain lease (the "Lease")
dated as of May 1, 1992, the First Amendment to Lease dated June 28, 1993 (the
"First Amendment"), the Second Amendment to Lease dated February 28, 1995 (the
"Second Amendment"), the Third Amendment to Lease dated October 28, 1998, (the
"Third Amendment"), the Fourth Amendment to Lease dated October 13, 1999 (the
"Fourth Amendment") and the Fifth Amendment to Lease dated June 29, 2001 (the
"Fifth Amendment") regarding Rentable Area in the Ashford Oaks Office Building
(the "Building") located at 8122 Datapoint Drive, in the City of San Antonio,
Bexar County, Texas, and further identified as Suites 1250, 1200 and 400; and
WHEREAS, Tenant, hereby affirms the terms of the Lease, the First, Second,
Third, Fourth and Fifth Amendments thereto and further attorns to, assumes and
agrees to be bound by all of the terms of the Lease and the First, Second,
Third, Fourth and Fifth Amendments thereto, except where specifically amended
herein; and
WHEREAS, Landlord and Tenant desire to further amend said Lease;
NOW THEREFORE, in consideration of the Leased Premises and the mutual
benefits to accrue to Landlord and Tenant, both parties agree that the above
described Lease, as amended by the First, Second, Third, Fourth and Fifth
Amendments, shall be further amended as follows:
1. Landlord agrees to extend the availability date for Tenant to use
the Tenant Finish Allowance described in the Fifth Amendment to
Lease dated June 29, 2001, provided, however, that if Tenant, after
the date hereof, elects to draw on any of the remaining finish out
funds to be provided by Landlord under such Tenant Finish Allowance,
then Tenant's existing early termination options to terminate the
Lease (or any portion thereof) prior to December 31, 2005
(consisting of the Termination Option, as amended, the Second
Expansion Space Termination Option, as amended, and the Third
Expansion Space Termination Option, all as described in Section 4.b.
of the Fifth Amendment) shall immediately terminate and thereafter
be of no force and effect. Subject to the condition described in the
previous sentence, the Tenant Finish Allowance may be used by Tenant
at any time during the remaining term of the Lease, provided that in
no event shall the Tenant Finish Allowance be used during the last
12 months of the Lease term. Accordingly, the Tenant Finish
Allowance may not be used after December 31, 2004.
2. Except as specifically amended hereby, all of the existing terms and
conditions of the Lease, as amended, are and shall remain in full
force and effect and are hereby ratified and confirmed.
1
This Agreement, together with the Lease, as amended, constitutes the entire
agreement between Landlord and Tenant regarding the Lease and the subject matter
contained herein and supersedes any and all prior and/or contemporaneous oral or
written negotiations, agreements or understandings. This Sixth Amendment shall
be binding upon and inure to the benefit of Landlord and Tenant and their
respective heirs, legal representatives, successors and assigns. No subsequent
change or addition to this Sixth Amendment shall be binding unless in writing
and duly executed by both Landlord and Tenant. This Sixth Amendment may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, taken together, shall constitute but one agreement.
An executed facsimile copy of this Sixth Amendment shall be considered an
original.
Except as described in this Sixth Amendment, the terms of which shall control if
in conflict with the Lease or the First, Second, Third, Fourth or Fifth
Amendments to the Lease, all other terms and conditions of the Lease, as amended
by the First, Second, Third, Fourth and Fifth Amendments to the Lease shall
remain in full force and effect. Except as otherwise defined herein, all
capitalized terms used but not defined herein shall have the same meanings
assigned to such terms in the Lease, as amended by the First, Second, Third,
Fourth and Fifth Amendments.
Agreed to and Accepted as of the day first above mentioned.
TENANT LANDLORD
BIONUMERIK PHARMACEUTICALS, INC. ASHFORD BUILDING, LTD.
a Texas corporation a Texas Limited Partnership
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By: Ashford GP Corp.,
By: /s/ FREDERICK H. HAUSHEER By: /s/ DANIEL E. LEININGER
Printed Name: Frederick H. Hausheer, M.D. Printed Name: Daniel E. Leininger
Title Chief Executive Officer Title: President
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2
EXHIBIT 10.10
BIONUMERIK PHARMACEUTICALS, INC.
1995 DIRECTOR STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Director Stock Option
Plan are to attract and retain the best available personnel for service as
Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.
All options granted hereunder shall be "non-statutory stock
options".
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Common Stock" shall mean the Common Stock of the
Company.
(c) "Company" shall mean BIONUMERIK PHARMACEUTICALS,
INC., a Texas corporation.
(d) "Continuous Status as a Director" shall mean the
absence of any interruption or termination of status
as a Director.
(e) "Director" shall mean a member of the Board.
(f) "Employee" shall mean any person, including officers
and Directors, employed by the Company or any Parent
or Subsidiary of the Company. The payment of a
director's fee by the Company shall not be sufficient
in and of itself to constitute "employment" by the
Company.
(g) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(h) "Option" shall mean a stock option granted pursuant
to the Plan.
(i) "Optioned Stock" shall mean the Common Stock subject
to an Option.
(j) "Optionee" shall mean an Outside Director who
receives an Option.
(k) "Outside Director" shall mean a Director who is not
an Employee.
(l) "Parent" shall mean a "parent corporation", whether
now or hereafter existing, as defined in Section
425(e) of the Internal Revenue Code of 1986, as
amended.
(m) "Plan" shall mean this 1995 Director Stock Option
Plan, as amended.
(n) "Share" shall mean a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.
(o) "Subsidiary" shall mean a "subsidiary corporation",
whether now or hereafter existing, as defined in
Section 425(f) of the Internal Revenue Code of 1986,
as amended.
3. Stock Subject to the Plan. Subject to the provisions of Section 11
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 300,000 Shares (the "Pool") of Common Stock. The Shares
may be authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. Administration of and Grants of Options under the Plan.
(a) Administrator. Except as otherwise required herein,
the Plan shall be administered by the Board.
(b) Procedure for Grants. All grants of Options hereunder
shall be made strictly in accordance with the
following provisions:
(i) No person shall have any discretion to select
which Outside Directors shall be granted Options.
(ii) Each Outside Director shall be automatically
granted an Option (the "First Option") to purchase the First Option Amount (as
described in Section 4(b)(vi) below) upon the later to occur of (A) the
effective date of this Plan, as determined in accordance with Section 6 hereof,
or (B) the date on which such person first becomes a Director, whether through
election by the shareholders of the Company or appointment by the Board of
Directors to fill a vacancy.
(iii) After a First Option has been granted to any
Outside Director, each Outside Director shall thereafter be automatically
granted an Option (a "Subsequent Option") to purchase the Subsequent Option
Amount (as described in Section 4(b)(vii) below) on the day of each subsequent
annual shareholders meeting at which such Outside Director is reelected to an
additional term; provided, however, that for the first annual shareholders
meeting following the date on which such person first becomes a Director (the
"First Subsequent Meeting Date"), such
2
Outside Director shall be granted an Option to purchase a number of Shares which
is equal to the Subsequent Option Amount for other Directors at such First
Subsequent Meeting Date multiplied by that fraction of a year (which fraction
shall not exceed one) that has elapsed from the date such person first became a
Director to such First Subsequent Meeting Date.
(iv) Notwithstanding the provisions of subsections
(ii) and (iii) hereof, in the event that a grant would cause the number of
Shares subject to outstanding Options plus the number of Shares previously
purchased upon exercise of Options to exceed the Pool, then each such automatic
grant shall be for that number of Shares determined by dividing the total number
of Shares remaining available for grant by the number of Outside Directors on
the automatic grant date. Any further grants shall then be deferred until such
time, if any, as additional Shares become available for grant under the Plan
through action to increase the number of Shares which may be issued under the
Plan or through cancellation or expiration of Options previously granted
hereunder.
(v) The terms of an Option granted hereunder shall be
consistent with the requirements set forth elsewhere in this plan and shall
additionally include the following:
(A) The Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(B) With respect to grants occurring prior to June 1,
1999, the Option shall become exercisable in installments cumulatively with
respect to 1/36 of the Shares covered thereby for each complete calendar month
after the date of grant of such Option provided, however, that in no event shall
any Option be exercisable prior to obtaining shareholder approval of the Plan in
accordance with Section 17 hereof. With respect to grants occurring after June
1, 1999, the Option shall become exercisable in installments cumulatively with
respect to 1/12 of the Shares covered thereby for each complete calendar month
after the date of grant of such Option.
(C) Notwithstanding any other provisions hereof, the
grant of initial Options to the Outside Directors of the Company holding office
on the date the Plan is adopted by the Board shall be subject to shareholder
approval of the Plan in accordance with Section 17(a) hereof and, subject to
such approval, the monthly vesting of such initial Options shall commence as of
the effective date of the Plan.
(vi) With respect to grants occurring prior to June
1, 1999, the "First Option Amount" shall be an Option to purchase 7,500 Shares.
With respect to grants occurring after June 1, 1999, the "First Option Amount"
shall be an Option to purchase the Industry Report Amount as determined in
accordance with Section 4(b)(vii) below.
(vii) With respect to grants occurring prior to June
1, 1999, the "Subsequent Option Amount" shall be an Option to purchase 2,500
Shares. With respect to grants occurring after June 1, 1999, the "Subsequent
Option Amount" shall be an Option to purchase that number of Shares (the
"Industry Report Amount") that is determined by the Board in good faith to
correspond to the size of option grant awards made to outside directors upon
3
reelection to the board as published in current and representative report(s)
(collectively, the "Industry Report") of industry specific compensation amounts
determined in good faith by the Board to be representative benchmarks of outside
director compensation for companies in the life science industry. Option award
amounts in the Industry Report based on a standardized number of outstanding
shares shall be proportionately adjusted to reflect the actual number of
outstanding shares of Company stock at the time of the grant.
(c) Powers of the Board. Subject to the provisions and
restrictions of the Plan, the Board shall have the authority, in its discretion:
(i) to determine, upon review of relevant information and in accordance with
Section 8(b) of the Plan, the fair market value of the Common Stock; (ii) to
determine the exercise price per share of Options to be granted, which exercise
price shall be determined in accordance with Section 8(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted hereunder; and (vi) to make all other determinations (including the
determinations provided in Section 4(b) hereof) deemed necessary or advisable
for the administration of the Plan.
(d) Effect of Board's Decision. All decisions, determinations
and interpretations of the Board shall be final and binding on all Optionees and
any other holders of any Options granted under the Plan.
(e) Suspension or Termination of Option. If the Chief
Executive Officer or his designee reasonably believes that an Optionee has
committed an act of misconduct, the Chief Executive Officer may suspend the
Optionee's right to exercise any option pending a determination by the Board of
Directors (excluding the Outside Director accused of such misconduct). If the
Board of Directors (excluding the Outside Director accused of such misconduct)
determines an Optionee has committed an act of embezzlement, fraud, dishonesty,
nonpayment of an obligation owed to the Company, breach of fiduciary duty or
deliberate disregard of the Company rules resulting in loss, damage or injury to
the Company, or if an Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with the
Company or induces any principal for whom the Company acts as agent to terminate
such agency relationship, neither the Optionee nor his estate shall be entitled
to exercise any option whatsoever. In making such determination, the Board of
Directors (excluding the Outside Director accused of such misconduct) shall act
fairly and shall give the Optionee an opportunity to appear and present evidence
on Optionee's behalf at a hearing before a committee of the Board.
5. Eligibility. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
he is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.
The Plan shall not confer upon any Optionee any right
with respect to continuation of service as a Director or nomination to
serve as a Director, nor shall it interfere in
4
any way with any rights which the Director or the Company may have to terminate
his directorship at any time.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors of the Company or its approval
by the shareholders of the Company as described in Section 17 of the Plan. It
shall continue in effect for a term of ten (10) years unless sooner terminated
under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be ten (10) years from
the date of grant thereof.
8. Exercise Price and Consideration.
(a) Exercise Price. The exercise price per Share of the First
Options to be granted to the Outside Directors of the Company holding office on
the date of adoption of the Plan by the Board shall be $4.10 per Share.
Thereafter, the per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be 100% of the fair market value per Share on the
date of grant of the Option.
(b) Fair Market Value. The fair market value shall be
determined by the Board in its discretion; provided, however, that where there
is a public market for the Common Stock, the fair market value per Share shall
be the mean of the bid and asked prices of the Common Stock in the over-the
counter market on the date of grant, as reported in The Wall Street Journal (or,
if not so reported, as otherwise reported by the National Association of
Securities Dealers Automated Quotation ("NASDAQ") System) or, in the event the
Common Stock is traded on the NASDAQ National Market System or listed on a stock
exchange, the fair market value per Share shall be the closing price on such
system or exchange on the date of grant of the Option, as reported in The Wall
Street Journal.
(c) Form of Consideration. The consideration to be paid for
the Shares to be issued upon exercise of an Option shall consist entirely of
cash, check, other Shares of Common Stock of the Company which (i) either have
been owned by the Optionee for more than six (6) months on the date of
surrender, or were not acquired directly or indirectly from the Company, and
(ii) have a fair market value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised, or any
combination of such methods of payment.
9. Exercise of Option.
(a) Procedure for Exercise: Rights as a Shareholder. Any
Option granted hereunder shall be exercisable at such times as are set forth in
Section 4 hereof; provided, however, that no Options shall be exercisable until
shareholder approval of the Plan in accordance with Section 17 hereof has been
obtained.
An Option may not be exercised for a fraction of a Share.
5
An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as a Director. In the event of the
termination of the Outside Director's Continuous Status as a Director, he may,
but only within thirty (30) days after the date of such termination, exercise
his Option to the extent that he was entitled to exercise it at the date of such
termination. To the extent that he was not entitled to exercise an Option at the
date of such termination, or if he does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's Continuous
Status as a Director as a result of his total and permanent disability (as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended),
he may, but only within six (6) months (or such other period of time not
exceeding twelve (12) months as is determined by the Board) from the date of
such termination (but in no event later than the date of expiration of the term
of such Option as set forth in the Option Agreement), exercise his Option to the
extent he was entitled to exercise it at the date of such termination. To the
extent that he was not entitled to exercise the Option at the date of
termination, or if he does not exercise such Option (which he was entitled to
exercise) within the time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an
Optionee:
(i) during the term of the Option who is at the time
of his death a Director of the Company and who shall have been in Continuous
Status as a Director since the date of grant of the Option, the Option may be
exercised, at any time within twelve (12) months following the date of death, by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the date of death.
(ii) within thirty (30) days after the termination of
Continuous Status as a Director, the Option may be exercised, at any time within
twelve (12) months following the
6
date of death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of termination.
10. Non-Transferability of Options. Unless determined otherwise by the
Board, an Option may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent or
distribution or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder. The designation of a beneficiary by an Optionee does not constitute
a transfer. Unless determined otherwise by the Board, an Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
transferee permitted by this Section 10. If the Board makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Board deems appropriate.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to
any required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without payment
or receipt of consideration by the Company; provided, however, that conversion
of any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company,
the Board shall notify the Optionee at least fifteen (15) days prior to such
proposed action. To the extent it has not been previously exercised, the Option
will terminate immediately prior to the consummation of such proposed action. In
the event of a merger of the Company with or into another corporation in which
the stock of the Company is exchanged for stock of another company, the Option
shall be assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. If the Board makes an Option fully
exercisable in lieu of assumption or substitution in the event of a merger, the
Board shall notify the Optionee that the Option shall be fully exercisable for a
period of fifteen (15) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
7
12. Time of Granting Options. The date of grant of an Option shall,
for all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act (or any other applicable law or regulation, including the
requirements of the NASD or an established stock exchange), the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required. Notwithstanding the foregoing, the provisions set forth in
Section 4(b) of this Plan (and any other Sections of this Plan that affect the
formula award terms required to be specified in this Plan by Rule 16b-3) shall
not be amended more than once every six months, other than to comport with
change in the Code, the Employee Retirement Income Security Act, or the rules
thereunder.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
8
15. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
16. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
17. Shareholder Approval.
(a) Continuance of the Plan shall be subject to approval by
the shareholders of the Company at or prior to the first annual meeting of
shareholders held subsequent to the adoption of the Plan by the Board of
Directors of the Company. If such shareholder approval is obtained at a duly
held shareholders' meeting, it may be obtained by the affirmative vote of the
holders of a majority of the outstanding shares of the Company present or
represented and entitled to vote thereon. If such shareholder approval is
obtained by written consent, it may be obtained by the written consent of the
holders of a majority of the outstanding shares of the Company.
(b) At such time as the Company is subject to Section 14(a) of
the Exchange Act, any required approval of the shareholders of the Company shall
be solicited substantially in accordance with the applicable provisions of
Section 14(a) of the Exchange Act and the rules and regulations promulgated
thereunder.
18. Information to Optionees. The Company shall provide to each
Optionee, during the period for which such Optionee has one or more Options
outstanding, copies of all annual reports to shareholders, proxy statements and
other information provided to all shareholders of the Company.
9
EXHIBIT 10.11
BIONUMERIK PHARMACEUTICALS, INC.
1993 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option
Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional
incentive to Employees and Consultants of the Company and its
Subsidiaries and to promote the success of the Company's business.
Options granted under this Plan may be incentive stock options (as
defined under Section 422 of the Code) or nonqualified stock options,
as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as
amended, and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Administrator" means the Board or any of its Committees,
as applicable, that is administering the Plan pursuant to Section 4 of
the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Company" means BioNumerik Pharmaceuticals, Inc., a Texas
corporation.
(f) "Consultant" means any consultant or advisor to the
Company or any Parent or Subsidiary and any director of the Company
whether compensated for such services or not, provided that if and in
the event the Company registers any class of any equity security
pursuant to the Exchange Act, the term Consultant shall thereafter not
include directors who are not compensated for their services or are
paid only a director's fee by the Company.
(g) "Continuous Status as an Employee" means the absence of
any interruption or termination of the employment relationship by the
Company or any Subsidiary. Continuous Status as an Employee shall not
be considered interrupted in the case of (i) any leave of absence
approved by the Board, including sick leave, military leave, or any
other personal leave; provided, however, that for purposes of Incentive
Stock Options, such leave is for a period of not more than ninety (90)
days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (ii) in the
case of transfers between locations of the Company or between the
Company, its Subsidiaries or its successor.
(h) "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the
Company. The payment of a director's fee by the Company shall not be
sufficient to constitute "employment" by the Company.
(i) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(j) "Fair Market Value" means, as of any date, the value of
Stock determined as follows:
(i) If the Stock is listed on any established stock
exchange or a national market system including without
limitation the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales
were reported, as quoted on such system or exchange or the
exchange with the greatest volume of trading in Stock for the
last market trading day prior to the time of determination) as
reported in the Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Stock is quoted on the NASDAQ System (but
not on the National Market System thereof) or regularly quoted
by a recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean between the
high and low asked prices for the Stock; or
(iii) In the absence of an established market for the
Stock, the Fair Market Value thereof shall be determined in
good faith by the Administrator.
(k) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code.
(1) "Nonqualified Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
(m) "Option" means a stock option granted pursuant to the
Plan.
(n) "Optioned Stock" means the Stock subject to an Option.
(o) "Optionee" means an Employee or Consultant who receives an
Option.
(p) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(q) "Plan" means this 1993 Stock Option Plan, as amended and
restated.
(r) "Share" means a share of the Stock, as adjusted in
accordance with Section 12 of the Plan.
2
(s) "Stock" means the Common Stock, par value $0.01 per share,
of the Company.
(t) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 12 of the Plan, the maximum number of shares of Stock which may
be optioned and sold under the Plan is 2,000,000 shares. The shares may
be authorized, but unissued, or reacquired Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which
were subject thereto shall, unless the Plan shall have been terminated,
become available for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and
Officers. With respect to grants of Options to Employees who
are also officers or directors of the Company, the Plan shall
be administered by (A) the Board or (B) a Committee designated
by the Board to administer the Plan, which Committee shall be
constituted in such a manner as to permit the Plan to comply
with Rule 16b-3 promulgated under the Exchange Act or any
successor thereto ("Rule 16b-3") with respect to a plan
intended to qualify thereunder as a discretionary plan. Once
appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.
From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and
remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by Rule 16b-3
with respect to a plan intended to qualify thereunder as a
discretionary plan. Notwithstanding the foregoing, the Plan
shall not be administered by the Board if (a) the Company and
its officers and directors are then subject to the
requirements of Section 16 of the Exchange Act and (b) the
Board's administration of the Plan would prevent the Plan from
complying with Rule 16b-3.
(ii) Multiple Administrative Bodies. If permitted by
Rule 16b-3, the Plan may be administered by different bodies
with respect to directors, nondirector officers and Employees
who are neither directors nor officers.
(iii) Administration With Respect to Consultants and
Other Employees. With respect to grants of Options to
Employees or Consultants who are neither directors nor
officers of the Company, the Plan shall be administered by (A)
the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy
the legal requirements relating to the
3
administration of incentive stock option plans, if any, of
corporate and securities laws applicable to the Company and of
the Code (the "Applicable Laws"). Once appointed, such
Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the
Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without
cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated
by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Stock,
in accordance with Section 2(j) of the Plan;
(ii) to select the officers, Consultants and
Employees to whom Options may from time to time be granted
hereunder;
(iii) to determine whether and to what extent Options
are granted hereunder;
(iv) to determine the number of shares of Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, the per share
exercise price for the Shares to be issued pursuant to the
exercise of an Option and any restriction or limitation, or
any vesting acceleration or waiver of forfeiture restrictions
regarding any Option or other award and/or the shares of Stock
relating thereto, based in each case on such factors as the
Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what
circumstances an Option may be bought-out for cash under
subsection 9(f);
(viii) to determine whether, to what extent and under
what circumstances Stock and other amounts payable with
respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount during any deferral
period); and
4
(ix) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of
the Stock covered by such Option shall have declined since the
date the Option was granted.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Administrator shall be final
and binding on all Optionees and any other holders of any Options.
Neither the Committee nor any member thereof shall be liable for any
act, omission, interpretation, construction or determination made in
connection with the Plan in good faith, and the members of the
Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including
counsel fees) arising therefrom to the full extent permitted by law.
5. Eligibility.
(a) Nonqualified Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Employee or Consultant who has
been granted an Option may, if he is otherwise eligible, be
granted an additional Option or Options.
(b) Each Option shall be designated in the written
option agreement as either an Incentive Stock Option or a
Nonqualified Stock Option. However, notwithstanding such
designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated
as Incentive Stock Options are exercisable for the first time
by any Optionee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options shall be treated as Nonqualified Stock
Options.
(c) For purposes of Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such
Shares is granted.
(d) The Plan shall not confer upon any Optionee any
right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any
way with his right or the Company's right to terminate his
employment or consulting relationship at any time, with or
without cause, unless otherwise agreed in writing by the
Company and such Optionee.
6. Term of Plan. The Plan shall become effective upon its
adoption by the Board of Directors. It shall continue in effect until
September 10, 2003 unless extended by the Board or sooner terminated
under Section 14 of the Plan. No grants of Options will be made
pursuant to the Plan after September 10, 2003.
5
7. Term of Option. The term of each Option shall be the term
stated in the Option Agreement; provided, however, that in the case of
an Incentive Stock Option, the term shall be no more than ten (10)
years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is
granted, owns Stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Option shall be five (5) years from the
date of grant thereof or such shorter term as may be provided in the
Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is
determined by the Administrator, but shall be subject to the following:
In the case of an Incentive Stock Option
(i) granted to an Employee who, at the time
of the grant of such Incentive Stock Option, owns
stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.
(ii) granted to any Employee, the per Share
exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist
entirely of (1) cash, (2) check, (3) promissory note, (4) other shares
of the Company's capital stock which (x) in the case of shares of the
Company's capital stock acquired upon exercise of an Option either have
been owned by the Optionee for more than six months on the date of
surrender or were not acquired, directly or indirectly, from the
Company, and (y) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain
from the total number of Shares as to which the Option is exercised
that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as
to which the Option is exercised, (6) delivery of a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (7) by delivering an irrevocable
subscription agreement for the Shares which irrevocably obligates the
option holder to take and pay for the Shares not more than twelve
months after the date of delivery of the subscription agreement, (8)
any combination of the foregoing methods of payment, (9) or such other
6
consideration and method of payment for the issuance of Shares to the
extent permitted under applicable laws.
9. Exercise of Option.
(a) Procedure for Exercise: Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator, including
performance criteria with respect to the Company and/or the Optionee,
and as shall be permissible under the terms of the Plan. An Option may
not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised, and the Optionee
deemed to be a stockholder of the Shares being purchased upon exercise,
when written notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to
exercise the Option and full payment for the Shares with respect to
which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Board, consist of any consideration
and method of payment allowable under Section 8(b) of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.
(b) Termination of Employment. In the event of termination of
an Optionee's relationship as a Consultant (unless such termination is
for purposes of becoming an Employee of the Company) or Continuous
Status as an Employee with the Company (as the case may be), such
Optionee may, but only within ninety (90) days (or such other period of
time as is determined by the Board, with such determination in the case
of an Incentive Stock Option being made at the time of grant of the
Option and not exceeding ninety (90) days) after the date of such
termination (but in no event later than the expiration date of the term
of such Option as set forth in the Option Agreement), exercise his
Option to the extent that Optionee was entitled to exercise it at the
date of such termination. To the extent that Optionee was not entitled
to exercise the Option at the date of such termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's
relationship as a Consultant or Continuous Status as an Employee as a
result of his total and permanent disability (as defined in Section
22(e)(3) of the Code), Optionee may, but only within twelve (12) months
from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent
so entitled within the time specified herein, the Option shall
terminate.
7
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised, at any time within twelve (12)
months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the
extent the Optionee was entitled to exercise the Option at the date of
death. To the extent that Optionee was not entitled to exercise the
Option at the date of death, or if the Optionee's estate (or such other
person who acquired the right to exercise the Option) does not exercise
such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such offer
is made.
10. Non-Transferability of Options. Unless determined
otherwise by the Administrator, an Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option transferable, such Option shall
contain such additional terms and conditions as the Administrator deems
appropriate.
11. Stock Withholding to Satisfy Withholding Tax Obligations.
At the discretion of the Administrator, Optionees may satisfy
withholding obligations as provided in this paragraph. When an Optionee
incurs tax liability in connection with an Option, which tax liability
is subject to tax withholding under applicable tax laws, and the
Optionee is obligated to pay the Company an amount required to be
withheld under applicable tax laws, the Optionee may satisfy the
withholding tax obligation by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, that number
of Shares having a Fair Market Value equal to the amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this
purpose shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option or Right as to which the election is
made;
8
(c) all elections shall be subject to the consent or
disapproval of the Administrator; and
(d) if the Optionee is subject to Rule 16b-3, the election
must comply with the applicable provisions of Rule 16b-3 and shall be
subject to such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section
16 of the Exchange Act with respect to Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code
because no election is filed under Section 83(b) of the Code, the
Optionee shall receive the full number of Shares with respect to which
the Option is exercised but such Optionee shall be unconditionally
obligated to tender back to the Company the proper number of Shares on
the Tax Date.
12. Adjustments Upon Changes in Capitalization, Merger or
Change in Control.
(a) Subject to any required action by the stockholders of the
Company, the number of Shares covered by each outstanding Option, and
the number of Shares which have been authorized for issuance under the
Plan but as to which no Options have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option,
as well as the price per share of Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Stock (or Common Stock
into which the Common Stock may be convertible) resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Stock, or any other increase or decrease in the
number of issued shares of Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be
made by the Administrator, whose determination in that respect shall be
final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number
or price of shares of Stock subject to an Option.
(b) In the event of the proposed dissolution or liquidation of
the Company, the Board shall notify the Optionee at least fifteen (15)
days prior to such proposed action. To the extent it has not been
previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action. In the event of a merger or
consolidation of the Company with or into another entity or another
transaction pursuant to which all or substantially all of the assets of
the Company are conveyed to another entity, the Option shall be assumed
or an equivalent option shall be substituted by such successor entity
or a parent or subsidiary of such successor entity. In the event that
such successor entity does not agree to assume the Option or to
substitute an equivalent option, the Administrator shall, in lieu of
such assumption or substitution, provide for the Optionee to have the
right to exercise the Option as to all of the Optioned Stock,
9
including Shares as to which the Option would not otherwise be
exercisable. If the Administrator makes an Option fully exercisable in
lieu of assumption or substitution in the event of a merger,
consolidation or other transaction covered by this paragraph, the
Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such
notice, and the Option will terminate upon the expiration of such
period.
(c) If the employment of any Optionee that is an Employee is
terminated by the Company other than for Cause (as defined in
subsection (d) below) within one year following a change in control (as
defined below), then all outstanding Options held by such Optionee on
the date of such termination shall automatically become 100% vested and
fully exercisable. For this purpose, a "change in control" means the
occurrence of any of the following after April 14, 1998:
(i) The acquisition by any person of direct or
indirect beneficial ownership of the Company's outstanding voting
securities in an amount sufficient to elect a majority of the Company's
Board of Directors. For purposes of this subsection (c), the term
"person" means any group, corporation, partnership, association, trust
(other than any trust holding stock for the account of Employees of the
Company pursuant to any stock purchase, ownership or employee benefit
plan of the Company), business entity, estate, or natural person, and
"beneficial ownership" means the direct or indirect power to vote or to
direct the voting of the security or the direct or indirect power to
dispose or direct the disposition of the security.
(ii) Completion of a tender offer or exchange offer
for and acquisition of 50% or more of the voting securities of the
Company that is required to be reported by the offeror to the
Securities and Exchange Commission pursuant to Section 14(d) of the
Exchange Act and the regulations promulgated thereunder.
(iii) The merger or consolidation of the Company with
or into another entity in a transaction in which the shareholders of
the Company immediately prior to such transaction do not own more than
50% of the voting securities of the surviving entity immediately
following such transaction.
(iv) The sale or transfer of all or substantially all
of the assets of the Company, other than to a wholly-owned subsidiary
of the Company.
(d) For purposes of subsection (c) above, "Cause" shall be
deemed to exist if:
(i) Optionee (A) has intentionally failed or refused
or habitually has neglected to carry out or to perform the reasonable
duties required of Optionee as an employee of the Company, after
written notice from the Company of such failure, refusal, neglect or
breach and the expiration of ten (10) business days following the
delivery of such notice during which such failure, refusal, neglect or
breach has remained unremedied, or (B) has intentionally breached any
statutory or common law duty of loyalty to the Company;
10
(ii) Optionee has been indicted on felony charges or
convicted of fraud, embezzlement or any crime involving moral
turpitude, unless the Board determines in good faith that such
indictment or conviction is unlikely to have a material adverse effect
on the Company's business or reputation;
(iii) Optionee dies or becomes subject to a mental or
physical condition that the Company, acting in good faith and upon
reasonable grounds, determines will render Optionee unable to perform
the essential functions of the job for which Optionee is employed
(whether with or without reasonable accommodation on the part of the
Company); or
(iv) Optionee materially breaches any confidentiality
or noncompetition agreement between Optionee and the Company.
13. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Administrator makes
the determination granting such Option, or such other date as is
determined by the Administrator. Notice of the determination shall be
given to each Employee or Consultant to whom an Option is so granted
within a reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made which would
impair the rights of any Optionee under any grant theretofore made,
without his or her consent. In addition, to the extent necessary and
desirable to comply with Rule 16b-3 under the Exchange Act or with
Section 422 of the Code (or any other applicable law or regulation,
including the applicable requirements of the NASD or an established
stock exchange), the Company shall obtain stockholder approval of any
Plan amendment in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and
such Options shall remain in full force and effect as if this Plan had
not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Board, which agreement must be in writing
and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of
such Option and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be
listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
11
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at
the time of any such exercise that the Shares are being purchased only
for investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant
provisions of law.
16. Reservation of Shares. The Company, during the term of
this Plan, will at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of
any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
17. Agreements. Options shall be evidenced by written
agreements in such form as the applicable Administrator shall approve
from time to time.
18. Information to Optionees. The Company shall provide to
each Optionee, during the period for which such Optionee has one or
more Options outstanding, copies of all annual reports and other
information which are generally provided to all stockholders of the
Company. The Company shall not be required to provide such information
to persons whose duties in connection with the Company assure their
access to equivalent information.
19. Governing Law: Construction. All rights and obligations
under the Plan shall be governed by, and the Plan shall be construed in
accordance with, the laws of the State of Texas without regard to the
principles of conflicts of laws. Titles and headings to Sections herein
are for purposes of reference only, and shall in no way limit, define
or otherwise affect the meaning or interpretation of any provisions of
the Plan.
12
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
EXHIBIT 10.13
COLLABORATION AGREEMENT
Between
The Johns Hopkins University
Baltimore, MD 21287
and
BioNumerik Pharmaceuticals, Inc.
San Antonio, TX 78229
COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT (this "Agreement") is entered into effective as of
November 19, 2001 by and between BioNumerik Pharmaceuticals, Inc., a Texas
corporation ("BioNumerik" or the "Company") and The Johns Hopkins University, a
Maryland corporation (the "Institution"). BioNumerik and the Institution,
intending to be legally bound, agree as follows:
WHEREAS, the Institution and BioNumerik have previously established a joint
research program in which BioNumerik and the Institution are collaborating on
the discovery and development of novel therapeutic agents that modulate DNA
methylation in cancer.
WHEREAS, the Institution and BioNumerik wish to continue their joint research
program and collaboration on the discovery and development of novel therapeutic
agents that modulate DNA methylation in cancer.
NOW, THEREFORE, the parties hereto agree as follows:
1. TERM OF RESEARCH PROGRAM. Subject to the provisions for termination
hereinafter provided, the term of the research program to be conducted pursuant
to this Agreement (the "Program") shall be for a period (the "Program Term")
commencing November 19, 2001 and terminating at the close of business on
November 19, 2006.
2. PRINCIPAL INVESTIGATORS. For as long as he remains at the Institution, Dr.
Stephen Baylin shall direct and act as principal investigator for the
Institution's portion of the Program. During the Program Term, Dr. Frederick H.
Hausheer shall direct and act as principal investigator for the BioNumerik
portion of the Program.
3. SCOPE OF THE PROGRAM.
(a) Year One Program Objectives.
The overall Program will be aimed at the discovery and development of novel
therapeutic agents that modulate DNA methylation in cancer and possibly have
therapeutic benefit in other areas. The focus of the Program will be to
synthesize, patent and test novel chemical entities which target cancer cells
with altered DNA methylation. Dr. Baylin and Dr. Hausheer shall work together to
develop and agree upon a definitive outline of the work to be conducted during
the first year of the Program. Thereafter, the Program will be conducted
pursuant to a definitive annual research plan to be agreed upon by the
Institution and BioNumerik at least 30 days before the commencement of each
future year of the Program.
It is intended that the Program research will include the following:
i) BioNumerik will endeavor to identify and synthesize molecules,
which may be patentable or unpatentable, for the purpose of identifying and
meeting molecular requirements for drug modulation of DNA methylation events.
ii) Dr. Baylin and the Institution will focus laboratory efforts and Dr.
Baylin's personal expertise on the elucidation and clarification of key
mechanism(s) for optimal therapeutic targeting in cancer cells which involve
aberrant DNA methylation.
iii) BioNumerik will work to develop and refine robust and detailed
atomistic and chemical structural models and perform physics-based computer
simulations that describe the biological, thermodynamic, structural and
biochemical mechanisms that are the focus of the laboratory work of the
Institution under the Program and to use these models and information in the
design and synthesis of its new chemical entities as described above.
iv) The Institution will conduct in vitro testing of the new compounds
discovered and synthesized by BioNumerik for their ability to influence aberrant
DNA methylation with a view to identifying the most potent and desirable
potential therapeutic entity to advance to clinical trials in humans.
4. ADDITIONAL BIONUMERIK RESPONSIBILITIES.
(a) The work to be conducted by the Institution under this Agreement will
be funded out of the [**] amounts paid by BioNumerik to Institution pursuant to
the Joint Collaboration, Licensing, and Clinical Trials Agreement, dated as of
February 9, 2000, between BioNumerik and The Johns Hopkins University.
(b) BioNumerik will also undertake sole responsibility for endeavoring to
obtain patent protection (including payment of future patent filing fees) on new
chemical entities which are developed under the Program and which are identified
as either joint inventions or sole inventions of BioNumerik, in the United
States and such other countries in the remainder of the world as BioNumerik may
determine. The Institution will cooperate with BioNumerik in providing such
information and assistance, and executing such documents and instruments, as may
be requested by BioNumerik from time to time in connection with prosecution of
patents relating to the joint Inventions (as hereinafter defined). The
Institution will take responsibility for obtaining U.S. and international patent
protection for all sole Institution inventions.
(c) BioNumerik will be responsible for supporting the preclinical and
clinical development of a new drug which is intended for possible human
treatment in the focus area of the Program. As described in Section 9, the
Institution will have a right of first offer to take the selected novel
therapeutic entity into clinical trials.
5. PUBLICATION RIGHTS.
Dr. Baylin and the Institution shall have rights to publish the results of the
collaborative research work conducted pursuant to the Program that are
consistent with the rights normally associated with collaborative academic and
industry research, subject, in all cases, to prepublication notice sent to
BioNumerik at least 30 days in advance of publication submission and
prepublication review by BioNumerik. No publication of any compounds, structures
or other information which is Confidential Information (as defined below) of
BioNumerik will be made by the Institution or
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Dr. Baylin without the prior written consent of BioNumerik (which consent will
not be unreasonably withheld and in any event will not be withheld longer than
90 days after receipt of a manuscript of the proposed publication). Dr. Baylin,
the Institution and BioNumerik further agree to delay publication for up to 90
days when requested by BioNumerik to permit patent applications to be filed or
where otherwise requested by BioNumerik to protect business strategy or
intellectual property rights. Authorship on any specific publication resulting
from the Program will be determined jointly by Dr. Baylin and Dr. Hausheer.
6. CONFIDENTIALITY.
Each party to this Agreement (a "receiving party") who receives Confidential
Information (as defined below) disclosed by the other party to this Agreement (a
"disclosing party") shall not, during the term of this Agreement and for five
(5) years after termination of this Agreement, make use of or disclose, without
the prior written consent of the disclosing party, Confidential Information
disclosed by the disclosing party or any of its Affiliates. Each receiving party
further agrees that it will return to each disclosing party all written
materials in its possession embodying Confidential Information of such
disclosing party. For purposes of this Agreement, "Confidential Information"
includes intellectual property or other information obtained by a receiving
party from a disclosing party and which is marked as confidential or which the
disclosing party could reasonably be expected to desire be held in confidence,
or the disclosure of which would likely be embarrassing, detrimental or
disadvantageous to the disclosing party or its Affiliates. Confidential
Information, however, shall not include information (a) which is, at the time in
question, in the public domain through no wrongful act of the receiving party,
(b) which is later disclosed to a receiving party by one not under obligations
of confidentiality to the disclosing party, or (c) which is required by court or
governmental order, to be disclosed. Each of the Institution and Dr. Baylin
recognizes and agrees that BioNumerik shall at all times during this Agreement
and after termination of this Agreement retain ownership of its patents,
copyrights, trade secrets and other proprietary information and neither Dr.
Baylin nor the Institution shall have any right to use or disclose any such
patents, copyrights, trade secrets or other proprietary information unless
consented or agreed to in writing by BioNumerik. BioNumerik recognizes and
agrees that the Institution shall at all times during this Agreement and after
termination of this Agreement retain ownership of its patents, copyrights, trade
secrets and other proprietary information and BioNumerik shall not have any
right to use or disclose any such patents, copyrights, trade secrets or other
proprietary information except as provided herein or in other written agreements
with the Institution.
7. REPORTING AND RECORD KEEPING.
Written progress reports will be exchanged by the parties at least twice a year.
Interim data will be provided, reviewed and jointly discussed by the parties in
the interim. It is agreed that each party hereto and its authorized
representative(s), and regulatory authorities to the extent required by law,
may, during regular business hours, arrange in advance with the other party to:
(1) examine and inspect such other party's facilities required for performance
of the Program; and (2) inspect and copy on a confidential basis all data and
work products of such party relating to the Program. Each party shall prepare
and maintain complete and accurate written records, accounts, reports and data
of the research conducted by it under the Program.
8. INTELLECTUAL PROPERTY.
(a) Inventions. For purposes of this Agreement, " Inventions" shall mean
any invention, method or discovery, or improvements, whether patentable or not,
conceived or reduced to practice during and as a part of the research performed
pursuant to or in accordance with the Program (i) solely by Dr. Baylin and/or
the Institution's staff or employees supervised by him, or (ii) jointly by such
an individual or individuals with one or more employees of BioNumerik. All such
Inventions developed solely by Dr. Baylin and/or the Institution's staff or
employees supervised by him shall be owned by the Institution, subject to the
licensing provisions set forth in this Section 8. All jointly developed
Inventions shall be owned jointly by the Institution and BioNumerik, subject to
the licensing provisions set forth in this Section 8. All inventions and
discoveries arising out of the Program that are developed solely by BioNumerik
shall be owned solely by BioNumerik.
(b) Grant of License. The Institution will grant to BioNumerik an
exclusive, world-wide, royalty bearing license, which license (the "License
Agreement") will be in the form contained in Exhibit A hereto, for both sole and
joint rights of the Institution with respect to Inventions (including the right
to grant sublicenses). Such grant is subject to the retained right of the
Institution to make, have made, provide and use for its and The Johns Hopkins
Health System's non-profit internal research purposes Inventions. Should any
federal grant money be used to develop Inventions, this grant shall also be
subject to the rights retained by the United States Government under P.L.
96-517, as amended by P.L. 98-620. The Institution will sign any amendments to
the License Agreement as may be necessary to add any Invention for inclusion in
the License Agreement after the Institution and BioNumerik have agreed upon a
royalty rate for the Invention, which royalty rate will be within the ranges
contained in Exhibit A. If no amendments have been made to the attached License
Agreement within (6) six months of the expiration of this Collaboration
Agreement, the License Agreement will terminate.
The Institution agrees to give BioNumerik notice prior to using any federal
grant money in connection with the Program. The Institution further agrees to
use reasonable measures to protect trade secrets and other intellectual property
rights that are covered by the Institution's retained right contained in this
Section 8(b).
9. [**] CLINICAL TRIALS.
BioNumerik hereby grants the Institution [**]. In the event the
Institution and BioNumerik are unable to agree upon the material terms of a
clinical trials agreement within an additional thirty (30) day negotiation
period, the Institution's right to conduct clinical trials as provided herein
shall terminate with respect to that drug. In connection with any agreement
entered into with respect to the Trials, BioNumerik agrees to reimburse the
Institution's direct and indirect costs, provided, however, that the Institution
agrees that total indirect costs for such trials shall not exceed [**] of total
direct costs for off-campus based studies.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
10. NONCOMPETITION.
The Institution represents to BioNumerik that Dr. Baylin is not and that
he will not during the term of the Program conduct research with any party other
than BioNumerik on compounds or technology that would be included within the
area of the Program. Neither Dr. Baylin nor the Institution shall use any
information, testing data or compound data relating to BioNumerik compounds in
any other research sponsored by commercial entities unless consented to by
BioNumerik in writing. In addition, the Institution recognizes and agrees that,
except as expressly provided herein or in other written agreements between
BioNumerik and the Institution, BioNumerik shall have no obligation to pay Dr.
Baylin or the Institution royalties or any other payments with respect to sales
or other revenues or proceeds received by BioNumerik.
11. PROGRAM DURATION / TERMINATION.
The Program will have a term of five years commencing and ending as
provided in Section 1 of this Agreement. Notwithstanding any other provision of
this Agreement, either party hereto shall have the right at its option to
terminate the Program at any time after year one of the Program by giving 90
days prior written notice to the other party. In the event of termination of the
Program by BioNumerik or the Institution, all rights and duties arising under
the Program and Sections 1, 2, 3 and 4 of this Agreement shall cease as of the
date of such termination. All other provisions of this Agreement, including
without limitation the rights and obligations under Section 8 hereof, shall
survive and continue after any such termination in accordance with their terms.
12. CONSTRUCTION. Each party to this Agreement has had the opportunity to review
this Agreement with its legal counsel. This Agreement shall not be construed or
interpreted against any party on the basis that such party drafted or authored a
particular provision, parts of or the entirety of this Agreement.
13. ASSIGNMENT. This Agreement and the rights and obligations hereunder may not
be assigned by either party without the prior consent of the other party;
provided, however, that BioNumerik may assign this Agreement without consent to
any entity which acquires all or substantially all of its assets or business,
whether by merger or otherwise.
14. NOTICES. Any notice, consent or approval required under this Agreement shall
be in writing sent by registered or certified airmail, postage prepaid, or by
fax or telex (confirmed by such registered or certified mail) and addressed as
follows:
If to the Institution: Michael B. Amey
Assistant Dean for Research Administration
The Johns Hopkins University School of Medicine
2024 E. Monument Street, Suite 2-100, Baltimore, MD 21287
with a copy to: Stephen Baylin, M.D.
The Johns Hopkins Oncology Center
410 North Bond Street
Baltimore, MD 21231
If to BioNumerik: Frederick H. Hausheer, M.D.
8122 Datapoint Drive, Suite 1250
San Antonio, TX 78229
|
All notices shall be deemed to be effective three business days after the
date of mailing. In case any party changes its address at which notice is to be
received, written notice of such change shall be given without delay to the
other party.
15. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding among the parties hereto as to the subject matter hereof and has
priority over all documents, verbal consents or understandings made between the
parties hereto before the conclusion of this Agreement with respect to the
subject matter hereof. None of the terms of this Agreement shall be amended or
modified except in writing signed by the parties hereto. In addition, that
certain Joint Collaboration, Licensing and Clinical Trials Agreement, dated as
of February 9, 2000, between the Institution and BioNumerik; and that certain
Master Clinical Trial Research Agreement, dated as of April 3, 1995, between the
Institution and BioNumerik shall continue in full force and effect in accordance
with their terms.
16. WAIVERS. A waiver by any party of any term or condition of this Agreement in
any one instance shall not be deemed or construed to be a waiver of such term or
condition for any similar instance in the future or of any subsequent breach
hereof.
17. SEVERABILITY. Should any provision of this Agreement be held to be invalid,
unenforceable, or against public policy, the remaining provisions hereof shall
not be affected thereby. In such event, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible with respect to those provisions which were held
to be invalid, unenforceable or against public policy.
18. UNIVERSITY NAME. BioNumerik shall not use the name, likeness, or logo of the
Johns Hopkins University; its Schools, Divisions, Departments, or Centers; The
Johns Hopkins Hospital and Health System; or Johns Hopkins' faculty, employees,
students, or trustees in any advertising, promotional, or sales material,
whether oral or written, without the prior consent of the Institution or unless
otherwise required by law, provided that BioNumerik may list the name of
Institution and the existence of the Research Agreement and the License
Agreement on BioNumerik's web site and in other general informational materials.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
November 19, 2001.
THE JOHNS HOPKINS UNIVERSITY
By: /s/ MICHAEL B. AMEY
------------------------------------------
Michael B. Amey
Title: Assistant Dean for Research Administration
|
BIONUMERIK PHARMACEUTICALS, INC.
By: /s/ FREDERICK H. HAUSHEER
------------------------------------------
Frederick H. Hausheer, M.D.
Chief Executive Officer
|
READ AND UNDERSTOOD:
/s/ STEPHEN BAYLIN
-------------------------------
Stephen Baylin, M.D.
|
EXHIBIT "A" TO
COLLABORATION AGREEMENT
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
THE JOHNS HOPKINS UNIVERSITY
&
BIONUMERIK PHARMACEUTICALS, INC.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is entered into by and between
THE JOHNS HOPKINS UNIVERSITY, a Maryland corporation having an address at 111
Market Place, Suite 906, Baltimore, MD 21202 ("JHU") and BioNumerik
Pharmaceuticals, Inc, a Texas corporation having an address of 8122 Datapoint
Drive, Suite 1250, San Antonio, TX 78229 ("Company"), with respect to the
following:
RECITALS
WHEREAS, as a center for research and education, JHU is interested in
licensing PATENT RIGHTS (hereinafter defined) in a manner that will benefit the
public by facilitating the distribution of useful products and the utilization
of new methods, but is without capacity to commercially develop, manufacture,
and distribute any such products or methods; and
WHEREAS, a course of research to discover and develop therapeutic agents
that modulate DNA methylation in cancer, funded at least in part by Company, has
been and will be conducted by Dr. Stephen Baylin and/or JHU's staff or employees
supervised by Dr. Baylin (hereinafter "JHU Inventors") in collaboration with
Company; and
WHEREAS, JHU will acquire, through assignment of rights, title and
interest, with the exception of certain retained rights by the United States
government, an interest in any Inventions made by JHU Inventors during such
course of research; and
WHEREAS, Company may desire to commercially develop, manufacture, use and
distribute such Inventions throughout the world;
NOW THEREFORE, in consideration of the premises and the mutual promises
and covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
All references to particular Exhibits and Articles shall mean the Exhibits
to, and Articles of, this Agreement, unless otherwise specified. For the
purposes of this Agreement and the Exhibits hereto, the following words and
phrases shall have the following meanings:
1.1 "AFFILIATED COMPANY" as used herein in either singular or plural shall
mean any corporation, company, partnership, joint venture or other entity, which
controls, is controlled by or is under common control with Company. For purposes
of this Paragraph 1.1, control shall mean the direct or indirect ownership of a
majority of the voting shares or the direct or indirect entitlement to appoint a
majority of the directors of the other entity.
1.2 "BIOLOGICAL MATERIAL" shall mean materials in JHU's possession that
have been developed solely or jointly by JHU Inventors of PATENT RIGHTS and are
listed in Exhibit C, as amended from time to time by the parties hereto and any
functional equivalents, portions, progeny, derivatives or modifications thereof
made by Company.
1.3 "EFFECTIVE DATE" of this License Agreement shall mean the date that
Company provides written Notice of its intent to add an invention made under the
RESEARCH AGREEMENT to this License Agreement by first Amendment to this
Agreement (Exhibit D). This Notice must be given in duplicate to The Johns
Hopkins School of Medicine (JHUSOM) Office of Technology Licensing (OTL) and the
JHUSOM Office of Research Administration (ORA). This Notice will be binding.
1.4 "EXCLUSIVE LICENSE" shall mean a grant by JHU to Company of its entire
right and interest in the PATENT RIGHTS subject to rights retained by the United
States government in accordance with P.L. 96-517, as amended by P.L. 98-620, and
subject to the retained right of JHU to make, have made, provide and use for its
and The Johns Hopkins Health Systems' non-profit internal research purposes
LICENSED PRODUCT and LICENSED SERVICE, including the ability, following notice
to Company, to distribute any biological material for nonprofit academic
research use to non-commercial entities as is customary in the scientific
community.
1.5 "INVENTIONS" shall mean "Inventions" as defined in the RESEARCH
AGREEMENT.
1.6 "LICENSED FIELD" shall mean all fields of potential medical and
non-medical uses for the inventions.
1.7 "LICENSED PRODUCT" as used herein in either singular or plural shall
mean any material, composition, drug, or other product, or any process or
method, the manufacture, use or sale of which would constitute, but for the
license granted to Company pursuant to this Agreement, an infringement of a
claim of PATENT RIGHTS (infringement shall include, but is not limited to,
direct, contributory, or inducement to infringe) or is, incorporates or uses a
BIOLOGICAL MATERIAL in its manufacture.
1.8 "LICENSED SERVICE" as used herein in either singular or plural shall
mean the performance on behalf of a third party of any method or the manufacture
of any product or the use of any product or composition which would constitute,
but for the license granted to Company pursuant to this Agreement, an
infringement of a claim of the PATENT RIGHTS, (infringement shall include, but
not be limited to, direct, contributory or inducement to infringe); or
incorporates or uses a BIOLOGICAL MATERIAL.
1.9 "NET SALES" shall mean gross sales revenues and fees billed by Company
or AFFILIATED COMPANY from the sale of LICENSED PRODUCT less trade discounts
allowed, refunds, rebates, returns and recalls, transportation charges, duties
and taxes (including sales taxes). In the event that Company or AFFILIATED
COMPANY sells a LICENSED PRODUCT in combination with other ingredients or
substances or as part of a kit, the NET SALES for purposes of royalty payments
shall be based on the sales revenues and fees received from the entire
combination or kit.
1.10 "NET SERVICE REVENUES" shall mean gross service revenues and fees
billed by Company or AFFILIATED COMPANY for the performance of LICENSED SERVICE
less sales and/or use taxes imposed upon and with specific reference to the
LICENSED SERVICE. In the event that Company or AFFILIATED COMPANY sells a
LICENSED SERVICE in combination with other services or substances or as part of
a kit, the NET SERVICE
REVENUES for purposes of royalty payments shall be based on the sales revenues
and fees received from the entire combination.
1.11 "PATENT RIGHTS" shall mean patents and patent applications listed on
Exhibit D hereto, as amended from time to time by mutual consent of the parties
hereto, and all continuations, divisions, and reissues based thereof, and any
corresponding foreign patent applications, and any patents or other equivalent
foreign PATENT RIGHTS issuing, granted or registered thereon. It is understood
that inventions and discoveries arising out of the Program (as defined in the
Research Agreement) that are developed solely by BioNumerik shall be owned
solely by BioNumerik and are not included in Patent Rights.
1.12 "RESEARCH AGREEMENT" shall mean the Collaboration Agreement entitled
"COLLABORATION AGREEMENT between The Johns Hopkins University and BioNumerik
Pharmaceuticals, Inc" JHU Office of Research Administration tracking number
_________, dated as of November 19, 2001.
1.13 "SIGNATURE DATE" shall mean the date the last party to this License
Agreement has executed this License Agreement.
1.14 "SUBLICENSEE" as used herein in either singular or plural shall mean
any person or entity other than an AFFILIATED COMPANY to which Company has
granted a sublicense under this Agreement.
ARTICLE II
LICENSE GRANT
2.1 GRANT. Subject to the terms and conditions of this Agreement, JHU
hereby grants to Company an EXCLUSIVE LICENSE to make, have made, use, and sell
the LICENSED PRODUCT and to provide the LICENSED SERVICE in the United States
and worldwide under the PATENT RIGHTS in the LICENSED FIELD. Subject to the
terms and conditions of this Agreement, JHU additionally grants COMPANY the
right to make, use and sell BIOLOGICAL MATERIAL in the LICENSED FIELD.
2.2 SUBLICENSE. Company may sublicense others under this Agreement,
subject to JHU's approval, and shall provide a copy of each such sublicense
agreement to JHU promptly after it is executed. Each sublicense shall be
consistent with the terms of this Agreement. JHU will approve any sublicense
following notice from Company of the sublicense terms, provided that JHU will
not be obligated to approve an extremely unreasonable sublicense.
ARTICLE III
FEES, ROYALTIES, & PAYMENTS
3.1 INITIAL LICENSE PROCESSING FEE. Company shall pay to JHUSOM Office of
Technology Licensing within (30) days of the SIGNATURE DATE an Initial License
Processing Fee as set forth in Exhibit A. JHU will not submit an invoice for
this Initial License Processing Fee, which is nonrefundable and shall not be
credited against royalties or other fees, including, but not limited to, the
License Fee of Paragraph 3.2.
3.2 LICENSE FEE. Company shall pay to JHU within thirty (30) days of the
EFFECTIVE DATE of this Agreement a license fee as set forth in Exhibit A. JHU
will not submit an invoice for the license fee, which is nonrefundable and shall
not be credited against royalties or other fees.
3.3 MINIMUM ANNUAL ROYALTIES. Beginning with the calendar year commencing
on January 1st immediately following the first commercial sale of LICENSED
PRODUCT or LICENSED SERVICE, Company shall pay to JHU minimum annual royalties
as set forth in Exhibit A. Each such payment shall be due within forty-five (45)
days after the end of such year.
3.4 ROYALTIES. Company shall pay to JHU a running royalty within the range
set forth set forth in Exhibit A, as acceptable to both JHU and Company, for
each LICENSED PRODUCT sold, and for each LICENSED SERVICE provided, by Company
or AFFILIATED COMPANIES, based on NET SALES and NET SERVICE REVENUES for the
term of this Agreement. Such payments shall be made quarterly.
In order to insure JHU the full royalty payments contemplated hereunder,
Company agrees that in the event any LICENSED PRODUCT shall be sold to an
AFFILIATED COMPANY or SUBLICENSEE or to a corporation, firm or association with
which Company shall have any agreement, understanding or arrangement with
respect to consideration (such as, among other things, an option to purchase
stock or actual stock ownership, or an arrangement involving division of profits
or special rebates or allowances) the royalties to be paid hereunder for such
LICENSED PRODUCT shall be based upon [**].
3.5 SUBLICENSE CONSIDERATION. Company shall pay to JHU a percentage of
consideration received from sublicensees under this Agreement as set forth in
Exhibit A. Such consideration shall include consideration of any kind received
by the Company or AFFILIATED COMPANIES from a SUBLICENSEE, such as upfront fees,
royalties or milestone fees and including any premium paid by the SUBLICENSEE
over Fair Market Value for stock of the Company or an Affiliated Company in
consideration for such sublicense. However, not included in such sublicense
consideration are amounts paid to the Company or an AFFILIATED COMPANY by the
SUBLICENSEE for product development, research work, clinical studies and
regulatory approvals performed by or for the Company or AFFILIATED COMPANIES, or
third parties on their behalf pursuant to a specific agreement including a
performance plan and commensurate budget. The term "Fair Market Value" shall
mean the average price that the stock in question is publicly trading at for
twenty (20) days prior to the announcement of its purchase by the SUBLICENSEE or
if the stock is not publicly traded, the value of such stock as determined by
the most recent private financing through a financial investor (an entity whose
sole interest in the Company or AFFILIATED COMPANY is financial) of the Company
or AFFILIATED COMPANY that issued the shares.
3.6 REIMBURSEMENT. Patent protection regarding Inventions will be obtained
as provided in Section 4(b) of the Research Agreement. Company will reimburse
JHU, within thirty (30) days of the receipt of an invoice from JHU, for all cost
associated with the preparation, filing, maintenance, and prosecution of PATENT
RIGHTS relating to sole JHU Inventions
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
incurred by JHU on or before the EFFECTIVE DATE of this Agreement. In accordance
with Paragraph 4.1 below, Company will reimburse JHU, within thirty (30) days of
the receipt of an invoice from JHU, for all cost associated with the
preparation, filing, maintenance, and prosecution of PATENT RIGHTS relating to
sole JHU Inventions incurred by JHU subsequent to the EFFECTIVE DATE of this
Agreement.
3.7 FORM OF PAYMENT. All payments under this Agreement shall be made in
U.S. Dollars. Checks are to be made payable to "The Johns Hopkins University".
Wire transfers may be made through:
The Johns Hopkins University
AllFirst Bank
25 S. Charles Street
Baltimore, Maryland 21203
Transit/Routing/ABA number: 052000113
Account Number: 09000522
Reference: JHU SOM Office of Technology Licensing
(BioNumerik, Baylin Sponsored Research Agreement)
Attn: Doreen Ferrington
Company shall be responsible for any and all costs associated with wire
transfers.
3.8 LATE PAYMENTS. In the event that any payment due hereunder is not made
when due, the payment shall accrue interest beginning on the tenth day following
the due date thereof, calculated at the annual rate of the sum of (a) [**], the
interest being compounded on the last day of each calendar quarter, provided
however, that in no event shall said annual interest rate exceed the maximum
legal interest rate for corporations. Each such payment when made shall be
accompanied by all interest so accrued. Said interest and the payment and
acceptance thereof shall not negate or waive the right of JHU to seek any other
remedy, legal or equitable, to which it may be entitled because of the
delinquency of any payment including, but not limited to termination of this
Agreement as set forth in Paragraph 9.2.
ARTICLE IV
PATENT PROSECUTION, MAINTENANCE, & INFRINGEMENT
4.1 PROSECUTION & MAINTENANCE. JHU, at Company's reasonable expense, shall
file, prosecute and maintain all patents and patent applications specified under
PATENT RIGHTS that relate to sole JHU Inventions upon authorization of Company
and Company shall be licensed thereunder. Title to all such patents and patent
applications relating to sole JHU Inventions shall reside in JHU. JHU shall have
full and complete control over all patent matters relating to sole JHU
Inventions in connection therewith under the PATENT RIGHTS, provided however,
that JHU will consider and incorporate reasonable comments received from Company
and will provide Company with copies of any proposed filings, patent
correspondence or potential change in status a reasonable time before any action
is to be taken in order to allow Company an opportunity to comment. Company will
provide payment authorization to JHU at least one (1) month before an action is
due, provided that Company has received timely notice of such action from JHU.
Failure to provide authorization can be considered by JHU as a Company decision
not to authorize an action. In any country where Company elects not to have
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
a patent application filed or to pay expenses associated with filing,
prosecuting, or maintaining a patent application or patent relating to sole or
joint JHU Inventions, JHU may file, prosecute, and/or maintain the patent
application or patent at its own expense and for its own exclusive benefit in
such country and Company thereafter shall not be licensed under such patent or
patent application with respect to such country.
4.2 NOTIFICATION. Each party will notify the other promptly in writing
when any infringement by another is discovered or suspected.
4.3 INFRINGEMENT. Company shall have the first right to enforce any patent
within PATENT RIGHTS against any infringement or alleged infringement thereof,
and shall at all times keep JHU informed as to the status thereof. Company may,
in its sole judgment and at its own expense, institute suit against any such
infringer or alleged infringer and control, settle, and defend such suit in a
manner consistent with the terms and provisions hereof and recover, for its
account, any damages, awards or settlements resulting therefrom, subject to
Paragraph 4.4. This right to sue for infringement shall not be used in an
arbitrary or capricious manner. JHU shall reasonably cooperate in any such
litigation at Company's expense.
If Company elects not to enforce any patent within the PATENT RIGHTS, then
it shall so notify JHU in writing within ninety (90) days of receiving notice
that an infringement exists, and JHU may, in its sole judgment and at its own
expense, take steps to enforce any patent and control, settle, and defend such
suit in a manner consistent with the terms and provisions hereof, and recover,
for its own account, any damages, awards or settlements resulting therefrom.
4.4 RECOVERY. Any recovery by Company under Paragraph 4.3 shall be deemed
to reflect loss of commercial sales, and Company shall pay to JHU [**] of the
recovery, after all reasonable costs and expenses associated with each suit or
settlement have been subtracted. If the cost and expenses exceed the recovery,
then [**] of the excess shall be credited against royalties payable by Company
to JHU hereunder in connection with sales in the country of such legal
proceedings, provided, however, that any such credit under this Paragraph shall
not exceed [**] of the royalties otherwise payable to JHU with regard to sales
in the country of such action in any one calendar year, with any excess credit
being carried forward to future calendar years.
ARTICLE V
OBLIGATIONS OF THE PARTIES
5.1 REPORTS. Company shall provide to JHU within thirty (30) days of the
end of each March, June, September and December after the EFFECTIVE DATE of this
Agreement, a written report to JHU of the amount of LICENSED PRODUCT sold, and
LICENSED SERVICE sold, the total NET SALES and NET SERVICE REVENUES of such
LICENSED PRODUCT and LICENSED SERVICE, and the running royalties due to JHU as a
result of NET SALES and NET SERVICE REVENUES by Company, AFFILIATED COMPANIES
and SUBLICENSEE thereof. Payment of any such royalties due shall accompany such
report. The report of sales and royalties due shall be substantially in the
format of the sales and royalty report form given in Exhibit B. Until Company,
an AFFILIATED COMPANY or a SUBLICENSEE has achieved a first commercial sale of a
LICENSED PRODUCT and received FDA market approval, a report shall be submitted
at the end of every June and December after the EFFECTIVE DATE of this
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Agreement and will include a written report describing Company's, AFFILIATED
COMPANIES or any SUBLICENSEE's technical efforts towards meeting its obligations
under the terms of this Agreement.
5.2 RECORDS. Company shall make and retain, for a period of three (3)
years following the period of each report required by Paragraph 5.1, true and
accurate records, files and books of account containing all the data reasonably
required for the full computation and verification of sales and other
information required in Paragraph 5.1. Such books and records shall be in
accordance with generally accepted accounting principles consistently applied.
Company shall permit, on a confidential basis, the inspection and copying of
such records, files and books of account by JHU or its agents during regular
business hours upon ten (10) business days' written notice to Company. Such
inspection shall not be made more than once each calendar year. All costs of
such inspection and copying shall be paid by JHU, provided that if any such
inspection shall reveal that an error has been made in the amount equal to five
percent (5%) or more of such payment, such costs shall be borne by Company.
Company shall include in any agreement with its AFFILIATED COMPANIES or its
SUBLICENSEE which permits such party to make, use or sell the LICENSED PRODUCT
or provide LICENSED SERVICE, a provision requiring such party to retain records
of sales of LICENSED PRODUCT and records of LICENSED SERVICE and other
information as required in Paragraph 5.1 and permit JHU to inspect such records
as required by this Paragraph.
5.3 REASONABLE EFFORTS. Within six months of each amendment of this
License Agreement to include JHU inventions or discoveries made under the
RESEARCH AGREEMENT, Company shall submit a Development Plan, reasonably
satisfactory to JHU, which outlines Company's intent and ability to develop and
commercialize the JHU inventions or discoveries. Company shall exercise
reasonable efforts, consistent with the Development Plan provided, as might be
amended from time to time, to develop and to introduce the LICENSED PRODUCT and
LICENSED SERVICE into the commercial market as soon as practicable, consistent
with sound and reasonable business practice and judgement; thereafter, until the
expiration of the Agreement, Company shall endeavor to keep LICENSED PRODUCT and
LICENSED SERVICE reasonably available to the public. Company shall also exercise
commercially reasonable efforts to develop other LICENSED PRODUCT suitable for
different indications, so that the PATENT RIGHTS can be commercialized as
broadly and as speedily as good scientific and business judgement would deem
practical.
5.4 OTHER PRODUCTS. After clinical or other evidence, provided in writing
by JHU or by another party, to Company, demonstrating the practicality of a
particular market which is not being developed or commercialized by Company,
Company shall either provide JHU with a reasonable development plan and start
development or attempt to reasonably sublicense the particular technology to a
third party. If within twelve (12) months of such notification by JHU, Company
has not initiated such development efforts or sublicensed that particular
market, JHU may terminate this license for such particular therapeutic market.
This Paragraph shall not be applicable if Company reasonably demonstrates to JHU
that commercializing such LICENSED PRODUCT or LICENSED SERVICE or granting such
a sublicense in said market would have a potentially adverse commercial effect
upon marketing or sales of the LICENSED PRODUCT developed and being sold by
Company.
5.5 PATENT ACKNOWLEDGEMENT. Company agrees that all packaging containing
individual LICENSED PRODUCT sold by Company, AFFILIATED COMPANIES and
SUBLICENSEE of Company will be marked with the number of the applicable
patent(s) licensed hereunder in accordance with each country's patent laws.
5.6 JHU, through its JHU Inventor(s), shall within thirty days of the
EFFECTIVE DATE ship Deliverables by overnight courier service to arrive at
COMPANY on a business day.
Deliverables shall be sent to:
BioNumerik Pharmaceuticals, Inc.
8122 Datapoint Drive, Suite 400
San Antonio, TX 78229
Attention: Receiving Department
Company shall provide notice to JHU School of Medicine's Office of
Technology Licensing of receipt of Deliverables by FAX upon receipt.
ARTICLE VI
REPRESENTATIONS
6.1 REPRESENTATIONS BY JHU. JHU warrants that it has good and marketable
title to its interest in the inventions claimed under PATENT RIGHTS and
BIOLOGICAL MATERIAL with the exception of certain retained rights of the United
States government. JHU does not warrant the validity of any patents or that
practice under such patents or use of a BIOLOGICAL MATERIAL shall be free of
infringement. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 6.1, COMPANY,
AFFILIATED COMPANIES AND SUBLICENSEE AGREE THAT THE PATENT RIGHTS AND BIOLOGICAL
MATERIAL ARE PROVIDED "AS IS", AND THAT JHU MAKES NO REPRESENTATION OR WARRANTY
WITH RESPECT TO THE PERFORMANCE OF LICENSED PRODUCT AND LICENSED SERVICE
INCLUDING THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY. JHU DISCLAIMS
ALL WARRANTIES WITH REGARD TO PRODUCT AND SERVICE LICENSED UNDER THIS AGREEMENT,
INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR IMPLIED, OF
MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. NOTWITHSTANDING ANY
OTHER PROVISION OF THIS AGREEMENT, JHU ADDITIONALLY DISCLAIMS ALL OBLIGATIONS
AND LIABILITIES ON THE PART OF JHU AND INVENTORS, FOR DAMAGES, INCLUDING, BUT
NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEYS'
AND EXPERTS' FEES, AND COURT COSTS (EVEN IF JHU HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS), ARISING OUT OF OR IN CONNECTION
WITH THE MANUFACTURE, USE, OR SALE OF THE PRODUCT AND SERVICE LICENSED UNDER
THIS AGREEMENT. COMPANY, AFFILIATED COMPANIES AND SUBLICENSEE ASSUME ALL
RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED BY A PRODUCT AND SERVICE
MANUFACTURED, USED, OR SOLD BY COMPANY, ITS SUBLICENSEE AND AFFILIATED COMPANIES
WHICH IS A LICENSED PRODUCT OR LICENSED SERVICE AS DEFINED IN THIS AGREEMENT.
6.2 RIGHT TO GRANT LICENSE. JHU represents that it has the right to grant
a license to Company in accordance with the terms and conditions of this
Agreement.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION. JHU and the Inventors of LICENSED PRODUCT and
LICENSED SERVICE will not, under the provisions of this Agreement or otherwise,
have control over the manner in which Company or its AFFILIATED COMPANIES or its
SUBLICENSEE or those operating for its account or third parties who purchase
LICENSED PRODUCT or LICENSED SERVICE from any of the foregoing entities,
practice the inventions of LICENSED PRODUCT and LICENSED SERVICE. Company shall
defend and hold JHU, The Johns Hopkins Health Systems, their present and former
trustees, officers, Inventors of PATENT RIGHTS and BIOLOGICAL MATERIAL, agents,
faculty, employees and students harmless as against any judgments, fees,
expenses, or other costs arising from or incidental to any product liability or
other lawsuit, claim, demand or other action brought as a consequence of the
practice of said inventions or use of patent rights by any of the foregoing
entities, whether or not JHU or said Inventors, either jointly or severally, is
named as a party defendant in any such lawsuit. Practice of the inventions
covered by LICENSED PRODUCT and LICENSED SERVICE, by an AFFILIATED COMPANY or an
agent or a SUBLICENSEE or a third party on behalf of or for the account of
Company or by a third party who purchases LICENSED PRODUCT and LICENSED SERVICE
from Company, shall be considered Company's practice of said inventions for
purposes of this Paragraph. The obligation of Company to defend and indemnify as
set out in this Paragraph shall survive the termination of this Agreement.
ARTICLE VIII
CONFIDENTIALITY
8.1 CONFIDENTIALITY. If necessary, the parties will exchange information,
which they consider to be confidential. The recipient of such information agrees
to accept the disclosure of said information which is marked as confidential at
the time it is sent to the recipient, and to employ all reasonable efforts to
maintain the information secret and confidential, such efforts to be no less
than the degree of care employed by the recipient to preserve and safeguard its
own confidential information. The information shall not be disclosed or revealed
to anyone except employees of the recipient who have a need to know the
information and who have entered into a secrecy agreement with the recipient
under which such employees are required to maintain confidential the proprietary
information of the recipient and such employees shall be advised by the
recipient of the confidential nature of the information and that the information
shall be treated accordingly.
The obligations of this Paragraph shall also apply to AFFILIATED COMPANIES
and/or SUBLICENSEE provided such information by Company. JHU's, Company's,
AFFILIATED COMPANIES, and SUBLICENSEES' obligations under this Paragraph shall
extend until three (3) years after the termination of this Agreement.
8.2 EXCEPTIONS. The recipient's obligations under Paragraph 8.1 shall not
extend to any part of the information:
a. that can be demonstrated to have been in the public domain or
publicly known and readily available to the trade or the
public prior to the date of the disclosure; or
b. that can be demonstrated, from written records, to have been
in the recipient's possession and not subject to an existing
obligation of secrecy to the disclosing party, or readily
available to the recipient from another source not under
obligation of secrecy to the disclosing party prior to the
disclosure; or
c. that becomes part of the public domain or publicly known by
publication or otherwise, not due to any unauthorized act by
the recipient; or
d. that is demonstrated from written records to have been
independently developed by or for the receiving party without
reference to or use of confidential information disclosed by
the disclosing party.
e. that is required to be disclosed by law, government regulation
or court order.
8.3 RIGHT TO PUBLISH. JHU may publish manuscripts, abstracts or the like
in the manner described in Section 5 of the RESEARCH AGREEMENT.
ARTICLE IX
TERM & TERMINATION
9.1 TERM. The term of this Agreement shall commence on the EFFECTIVE DATE
and shall continue, in each country, until the date of expiration of the last to
expire patent included within PATENT RIGHTS in that country, but in any event,
for a term of at least twenty (20) years after the EFFECTIVE DATE of this
Agreement in each particular country. The right to amend this Agreement expires
six (6) months after the termination of the RESEARCH AGREEMENT.
9.2 TERMINATION BY EITHER PARTY. This Agreement may be terminated by
either party, in the event that the other party (a) files or has filed against
it a petition under the Bankruptcy Act, makes an assignment for the benefit of
creditors, has a receiver appointed for it or a substantial part of its assets,
or otherwise takes advantage of any statute or law designed for relief of
debtors or (b) fails to perform or otherwise breaches any of its material
obligations hereunder, if, following the giving of notice by the terminating
party of its intent to terminate and stating the grounds therefor, the party
receiving such notice shall not have cured the failure or breach within thirty
(30) days. In no event, however, shall such notice or intention to terminate be
deemed to waive any rights to damages or any other remedy which the party giving
notice of breach may have as a consequence of such failure or breach.
9.3 TERMINATION BY COMPANY. Company may terminate this Agreement and the
license granted herein, including any amendments, for any reason, upon giving
JHU ninety (90) days written notice, provided the RESEARCH AGREEMENT is
terminated concurrently.
9.4 OBLIGATIONS AND DUTIES UPON TERMINATION. If this Agreement is
terminated, both parties shall be released from all obligations and duties
imposed or assumed hereunder to the extent so terminated, except as expressly
provided to the contrary in this Agreement. Upon termination, both parties shall
cease any further use of all confidential information disclosed to them as a
receiving party by the other party. Termination of this Agreement, for whatever
reason, shall not affect the obligation of either party to make any payments for
which it is liable prior to or upon such termination. Termination shall not
affect JHU's right to recover unpaid
royalties or fees or reimbursement for patent expenses incurred pursuant to
Paragraph 4.1 prior to termination. Upon termination Company shall submit a
final royalty report to JHU and any royalty payments and unreimbursed patent
expenses due JHU shall become immediately payable, and all BIOLOGICAL MATERIAL
that is the property of JHU shall be returned to JHU Inventors or destroyed.
Furthermore, upon termination of this Agreement, all rights in and to the
licensed technology originally held by JHU and licensed by JHU to Company
hereunder, including PATENT RIGHTS and BIOLOGICAL MATERIAL, shall revert
immediately to JHU at no cost to JHU. All inventions and discoveries arising out
of the Program (as defined in the RESEARCH AGREEMENT) that are solely or jointly
owned by Company shall continue to be solely or jointly owned by Company and
shall not be affected by any such reversion. Upon termination of this Agreement,
any SUBLICENSEE shall become a direct licensee of JHU and shall retain any
sublicense previously granted to it, provided such SUBLICENSEE complies with the
provisions of this Agreement assumed by such SUBLICENSEE. Company shall provide
written notice of such to each SUBLICENSEE with a copy of such notice provided
to JHU.
ARTICLE X
MISCELLANEOUS
10.1 USE OF NAME. Company shall not use the name of The Johns Hopkins
University or The Johns Hopkins Health System or any of its constituent parts,
such as the Johns Hopkins Hospital or any contraction thereof or the name of JHU
Inventors of PATENT RIGHTS in any advertising, promotional, sales literature or
fundraising documents without prior written consent from an officer of JHU.
Company shall allow at least seven (7) business days notice of any proposed
public disclosure for JHU's review and comment or to provide written consent.
10.2 NO PARTNERSHIP. Nothing in this Agreement shall be construed to
create any agency, employment, partnership, joint venture or similar
relationship between the parties other than that of a licensor/licensee. Neither
party shall have any right or authority whatsoever to incur any liability or
obligation (express or implied) or otherwise act in any manner in the name or on
the behalf of the other, or to make any promise, warranty or representation
binding on the other.
10.3 NOTICE OF CLAIM. Each party shall give the other or its
representative immediately notice of any suit or action filed, or prompt notice
of any claim made, against them arising out of the performance of this
Agreement.
10.4 PRODUCT LIABILITY. Prior to initial human testing or first commercial
sale of any LICENSED PRODUCT or LICENSED SERVICE as the case may be in any
particular country, Company shall establish and maintain, in each country in
which Company, an AFFILIATED COMPANY or SUBLICENSEE shall test or sell LICENSED
PRODUCT and LICENSED SERVICE, product liability or other appropriate insurance
coverage appropriate to the risks involved in marketing LICENSED PRODUCT and
LICENSED SERVICE and will annually present evidence to JHU that such coverage is
being maintained. Upon JHU's request, Company will furnish JHU with a
Certificate of Insurance of each product liability insurance policy obtained.
JHU shall be listed as an additional insured in Company's said insurance
policies. If such Product Liability insurance is underwritten on a `claims made'
basis, Company agrees that any change in underwriters during the term of this
Agreement will require the purchase of `prior acts' coverage to ensure that
coverage will be continuous throughout the term of this Agreement.
10.5 NOTICE. All notices or communication required or permitted to be
given by either party hereunder shall be deemed sufficiently given if mailed by
registered mail or certified mail or sent by overnight courier, such as Federal
Express, to the other party at its respective address set forth below or to such
other address as one party shall give notice of to the other from time to time
hereunder. Mailed notices shall be deemed to be received on the third business
day following the date of mailing. Notices sent by overnight courier shall be
deemed received the following business day.
If to Company: Attn: Chief Executive Officer
BioNumerik Pharmaceuticals, Inc.
8122 Datapoint Drive, Suite 1250
San Antonio, TX 78229
If to JHU: Office of Technology Licensing
The Johns Hopkins University
School of Medicine
111 Market Place, Suite 906
Baltimore, MD 21202
Attn: Director
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10.6 COMPLIANCE WITH ALL LAWS. In all activities undertaken pursuant to
this Agreement, both JHU and Company covenant and agree that each will in all
material respects comply with such Federal, state and local laws and statutes,
as may be in effect at the time of performance and all valid rules, regulations
and orders thereof regulating such activities.
10.7 SUCCESSORS AND ASSIGNS. Neither this Agreement nor any of the rights
or obligations created herein, except for the right to receive any remuneration
hereunder, may be assigned by either party, in whole or in part, without the
prior written consent of the other party, except that either party shall be free
to assign this Agreement in connection with any sale of substantially all of its
business or assets, without the consent of the other. Prompt notice of any such
assignment will be given to JHU. In addition, Company may sublicense others
under this Agreement as provided in Paragraph 2.2. This Agreement shall bind and
inure to the benefit of the successors and permitted assigns of the parties
hereto.
10.8 NO WAIVERS; SEVERABILITY. No waiver of any breach of this Agreement
shall constitute a waiver of any other breach of the same or other provision of
this Agreement, and no waiver shall be effective unless made in writing. Any
provision hereof prohibited by or unenforceable under any applicable law of any
jurisdiction shall as to such jurisdiction be deemed ineffective and deleted
herefrom without affecting any other provision of this Agreement. It is the
desire of the parties hereto that this Agreement be enforced to the maximum
extent permitted by law, and should any provision contained herein be held by
any governmental agency or court of competent jurisdiction to be void, illegal
or unenforceable, the parties shall negotiate in good faith for a substitute
term or provision which carries out the original intent of the parties as
closely as possible.
10.9 ENTIRE AGREEMENT; AMENDMENT. Company and JHU acknowledge that they
have read this entire Agreement and that this Agreement, including the attached
Exhibits (together with the Research Agreement) constitutes the entire
understanding and contract between the parties hereto and supersedes any and all
prior or contemporaneous oral or written communications with respect to the
subject matter hereof, all of which communications are merged herein. It is
expressly understood and agreed that (i) there being no expectations to the
contrary between the parties hereto, no usage of trade, verbal agreement or
another regular practice or method dealing within any industry or between the
parties hereto shall be used to modify, interpret, supplement or alter in any
manner the express terms of this Agreement; and (ii) this Agreement shall not be
modified, amended or in any way altered except by an instrument in writing
signed by both of the parties hereto.
10.10 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party hereto,
shall impair any such right, power or remedy to such party nor shall it be
construed to be a waiver of any breach or default, or an acquiescence therein,
or in any similar breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
10.11 FORCE MAJEURE. If either party fails to fulfill its obligations
hereunder (other than an obligation for the payment of money), when such failure
is due to an act of God, or other circumstances beyond its reasonable control,
including but not limited to fire, flood, civil commotion, riot, war (declared
and undeclared), revolution, or embargoes, then said failure shall be excused
for the duration of such event and for such a time thereafter as is reasonable
to enable the parties to resume performance under this Agreement.
10.12 FURTHER ASSURANCES. Each party shall, at any time, and from to time,
prior to or after the EFFECTIVE DATE of this Agreement, at reasonable request of
the other party, execute and deliver to the other such instruments and documents
and shall take such actions as may be required to more effectively carry out the
terms of this Agreement.
10.13 SURVIVAL. All representations, warranties, covenants and agreements
made herein and which by their express terms or by implication are to be
performed after the termination hereof, or are prospective in nature, shall
survive such termination, as the case may be. This shall include Articles VI,
VII, VIII, IX, and X.
10.14 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement shall be
construed as giving any person, firm, corporation or other entity, other than
the parties hereto and their successors and permitted assigns and sublicensees,
any right, remedy or claim under or in respect of this Agreement or any
provision hereof.
10.16 HEADINGS. Article headings are for convenient reference and not a
part of this Agreement. All Exhibits are incorporated herein by this reference.
10.17 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which when taken together shall
be deemed but one instrument.
IN WITNESS WHEREOF, this Agreement shall take effect as of the EFFECTIVE
DATE when it has been executed below by the duly authorized representatives of
the parties.
THE JOHNS HOPKINS UNIVERSITY
By: /s/ WILLIAM P. TEW April 30, 2002
--------------------------------------------
Title: William P. Tew, Ph.D., (Date)
Assistant Dean and Executive Director
Licensing and Business Development
School of Medicine
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COMPANY
BioNumerik Pharmaceuticals, Inc.
By: /s/ FREDERICK H. HAUSHEER April 22, 2202
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Frederick H. Hausheer, M.D. (Date)
Chairman & Chief Executive Officer
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EXHIBIT A. LICENSE FEE & ROYALTIES.
EXHIBIT B. SALES & ROYALTY REPORT FORM.
EXHIBIT C. BIOLOGICAL MATERIAL
EXHIBIT D. COMPANY RIGHTS TO PATENTS and PATENT/PROVISIONAL APPLICATIONS
EXHIBIT A
LICENSE FEE & ROYALTIES
1. INITIAL LICENSE PROCESSING FEE: The initial license processing fee due under
Paragraph 3.1 of the License Agreement is [**].
2. LICENSE FEE: The license fee due under Paragraph 3.2 of the License Agreement
is [**].
3. MINIMUM ANNUAL ROYALTIES: The minimum annual royalties pursuant to Paragraph
3.3 of the License Agreement are [**] and shall be credited against running
royalties due in that year. If royalties paid to JHU pursuant to Paragraph 3.4
of the License Agreement do not equal or exceed [**] in any applicable calendar
year, Company shall pay the difference to JHU within the 45 day time period
after the end of such year. In the event Company fails to pay JHU the minimum
annual royalty as required for a year, the license granted hereunder shall
become a nonexclusive license so long as Company pays JHU a minimum annual
royalty of [**] in that calendar year and thereafter.
3. ROYALTIES: The running royalty rate payable under Paragraph 3.4 will be in
the range set forth as follows:
(A) [**] of NET SALES and NET SERVICE REVENUES;
(B) [**] of NET SALES and NET SERVICE REVENUES [**]; and
(C) [**] of NET SALES and NET SERVICE REVENUES [**].
The royalty rate for each INVENTION shall be within the ranges set forth above
and shall be agreed upon in good faith by JHU and Company prior to the INVENTION
being added to EXHIBIT D. Only one royalty shall be paid on a product or service
that is covered by multiple patents or patent applications included in PATENT
RIGHTS.
In the event that (i) the patent covering a LICENSED PRODUCT or LICENSED SERVICE
has expired or been declared invalid or unenforceable during the term of this
Agreement and any generic form of Licensed Product or Licensed Service enters
the marketplace or (ii) all of the patents listed in Exhibit D have expired or
been declared invalid or unenforceable within the term of this License
Agreement, the parties shall consider a reasonable reduction in royalty rates
for the rest of the term.
4. SUBLICENSE CONSIDERATION: The percent sublicensee consideration payable under
Paragraph 3.5 will be as follows:
All sublicensee payments (including those described in Paragraph 3.5 as
consideration subject to a percentage payment to JHU but excluding those
described in Paragraph 3.5 as not included in sublicensee consideration) will be
included in NET SALES and a royalty will be paid thereon as provided in Section
3 above in the year in which such sublicensee payment is made.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
EXHIBIT B
QUARTERLY SALES & ROYALTY REPORT
FOR LICENSE AGREEMENT BETWEEN COMPANY AND
THE JOHNS HOPKINS UNIVERSITY DATED
[EFFECTIVE DATE OF AGREEMENT]
FOR PERIOD OF ______________ TO ______________
TOTAL ROYALTIES DUE FOR THIS PERIOD $___________
TOTAL NET
PRODUCT *JHU SALES/SERVICES ROYALTY AMOUNT
NAME REFERENCE (AS PER DEFINITIONS) RATE DUE
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* Please provide the JHU Disclosure Number or Patent Reference
This report format is to be used to report quarterly royalty statements to
JHU. It should be placed on Company letterhead and accompany any royalty
payments due for the reporting period. This report shall be submitted even if no
sales are reported.
EXHIBIT C
BIOLOGICAL MATERIAL (SEE PARAGRAPH 1.2)
The following shall be provided to COMPANY under Paragraph 5.6. The amount(s)
specified have been agreed to by JHU and COMPANY as sufficient to allow COMPANY
to propagate the material(s), and JHU is under no obligation to provide
additional Deliverables. This Exhibit may be amended from time to time by mutual
agreement of JHU and COMPANY to incorporate newly discovered or made BIOLOGICAL
MATERIAL.
EXHIBIT D.
PATENT RIGHTS
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
Exhibit 10.14
THE JOHNS HOPKINS UNIVERSITY
BIONUMERIK PHARMACEUTICALS, INC.
JOINT COLLABORATION, LICENSING, AND CLINICAL TRIALS AGREEMENT
THIS AGREEMENT is made as of February 9, 2000 (the "Effective Date") by
and between The Johns Hopkins University, organized and existing under the laws
of the State of Maryland with its principal place of business at 720 Rutland
Avenue, Baltimore, Maryland 21205 (the "University") and BioNumerik
Pharmaceuticals, Inc., a Texas corporation with its principal place of business
at Suite 1250, 8122 Datapoint Drive, San Antonio, Texas 78229 (the "Company").
RECITALS
WHEREAS the Company wishes to obtain the opportunity to discuss new
technical developments with a view to potential licenses of certain inventions
discovered and/or developed at the Johns Hopkins University Oncology Center (the
"Center");
WHEREAS the Center believes that the Company is skillful in the
commercialization of pharmaceutical compounds and seeks to benefit economically
from the Company's efforts;
WHEREAS the Center desires to do clinical trials for the Company on an
agreed basis respecting overhead costs;
WHEREAS in consideration of such basis, the Company is willing to give the
Center certain first option rights on any clinical trials to be done by the
Company; and
WHEREAS in consideration for these collaborations, the Company will pay to
the Center [**] with the execution and delivery of this Agreement and an
additional [**] on each of the next [**] anniversaries thereof.
NOW, THEREFORE, the Parties agree as follows:
PART I
TECHNICAL COLLABORATION
1.1 General. This Agreement anticipates a five-year collaboration between
the University and the Company (the "Collaboration") providing for the further
development by the Company of compounds invented by members of the faculty of
the Center (collectively, the "Center Faculty") for the treatment of solid
tumors and hematologic malignancies and the potential applications of such
compounds ("Oncology Drugs").
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
1.2 Term. The Collaboration will take place during the period commencing
on the Effective Date and continuing for five years thereafter. The term of the
Collaboration may be extended by written agreement between the parties.
1.3 Company's Option.
(a) The University hereby grants to the Company a first option to a
worldwide, royalty bearing, exclusive license to inventions of the Center
Faculty which are made in the course of performing research funded by this
Agreement, subject to the rights of any additional sponsors including U.S.
Government rights under 35 U.S.C. Sections 200-212. Inventions discovered
through research funded by the Company are hereinafter referred to as
"University Inventions".
(b) The University hereby grants to the Company a first option to a
worldwide, royalty bearing, exclusive license to selected Oncology Drugs
invented by Center Faculty without the Company's financial support and which are
unencumbered by the licensing rights of commercial third parties. Inventions
discovered without the Company's financial support are hereinafter referred to
as "Selected Inventions."
(c) The Company shall have sixty (60) days from the date of receipt of an
Invention Notice (defined in Section 1.6) to request that the parties enter
license negotiations. In the event that the Company and the University determine
to enter into a license negotiation with respect to a University Invention or
Selected Invention, the University and the Company will begin such negotiations
using the general license form attached hereto as Exhibit A but further
negotiation between the parties will be unrestricted. The Office of Technology
Licensing of the University's School of Medicine will represent the University
in such negotiations.
1.4 Ownership of Collaboration Results. All inventions and discoveries
shall be owned by the party making the invention or discovery. Any inventions
deemed to be jointly made by the Company and the University shall be owned
jointly by the Company and the University and subject to their respective
license. Record title to patents and patent applications for University
Inventions and/or Selected Inventions shall be held by the University. Record
title to patents and patent applications for inventions made jointly by the
University and the Company shall be joint and subject to their respective
license.
1.5 Other Collaborations. Each of the University and the Company shall be
free to conduct other research, whether under the sponsorship of or in
collaboration with, the federal government or other third parties, or otherwise,
provided that the terms and conditions of any such research, sponsorships, or
collaborations shall not conflict with the terms of this Agreement.
1.6 Notice. The Center Faculty will promptly notify the Office of
Technology Licensing of the University's School of Medicine (the "Licensing
Office") in writing of any University Invention or Selected Invention (the
"Invention Notice"). The Invention Notice will include a detailed written
description of such invention. When a University Invention is not encumbered by
the licensing rights of commercial third parties, the Licensing Office shall
notify the director of the Center, who will promptly submit the Invention Notice
to the Company. In the case of a Selected Invention, the Licensing Office and
the director of the Center will review the Selected Invention and jointly
determine whether the Company is a logical licensee, who is as capable of
developing and commercializing the Selected Invention as other potential
licensees. If the Licensing Office and the director of the Center agree that the
Company is the logical licensee, the director of the Center will promptly submit
the Invention Notice to the Company.
1.7 Educational Advancement. The University does not guarantee that any
patentable or non-patentable Oncology Drugs will result from the Collaboration.
The Company understands that the University's primary mission is educational and
that the Collaboration is intended to forward that mission.
1.8 Consultation. The Company will make available its chief-executive
officer, Frederick H. Hausheer, M.D. ("Dr. Hausheer"), to confer on-site with
the Center one day per year, the Center Faculty, and the Center's investigators
and researchers concerning Oncology Drugs developed by the Center Faculty. Dr.
Hausheer's consultations will be without charge to the University.
1.9 Confidentiality. During the period this agreement is in effect and for
a period of three (3) years thereafter, the University and the Company agree to
keep in confidence and to use solely as contemplated in this agreement all
information received from the other party under this agreement or obtained
pursuant to or in connection with the Collaboration. All reasonable efforts will
be used to avoid disclosure to any third party of any information supplied or
developed under this agreement, unless the prior written consent of the other
party is obtained. The preceding confidentiality requirements will not extend to
any information which (a) is or becomes public knowledge, after the time it
becomes public; (b) the receiving party can show by written or other tangible
evidence was in its possession at the time of disclosure hereunder and which the
receiving party without breach of any obligation is free to disclose to others;
(c) was received by the receiving party from a third party who did not acquire
it, directly or indirectly, from the disclosing party under any obligation of
confidentiality and which the third party is free to disclose to others; (d) is
required to be disclosed by a court of law or by the regulations of a federal
agency, subject to the earliest practical notification by the party obligated to
make such disclosure so as to enable the other party to obtain such protective
orders as may be available; or (e) is independently developed by the receiving
party and which the receiving party can show by written or other tangible
evidence was so independently developed.
1.10 Publication. Notwithstanding the foregoing, and except for
information supplied by the Company and not otherwise known to the University,
the University may publish in scientific journals research results arising from
activities funded by the Company, from University Inventions, and from Selected
Inventions for which the Company is given notice pursuant to Section 1.6, in
accordance with the following procedures:
(a) the University will submit the proposed manuscript to the
Company at least thirty (30) days prior to submission for publication; and
(b) within thirty (30) days of the receipt of such manuscript, the
Company will advise the University whether the Company has determined that the
manuscript contains patentable subject matter relating to a University Invention
and whether the Company wishes that a patent application be filed.
If the Company notifies the University that the manuscript includes no
confidential information and/or that the Company does not wish patent action to
be taken, or if the Company does not so notify the University within the thirty
(30) day period, the University will be free to publish. If the Company wishes
patent action to be taken, it will notify the University of its decision and
patent protection will be sought pursuant to Section 1. 111. Neither the
University nor any of its employees will submit the manuscript for publication
or disclose its contents to third parties until patent applications have been
filed. The patent application(s) will be filed within ninety (90) days of the
University's receipt of the Company's notice requesting that the University seek
patent protection. After the earlier of ninety (90) days or the filing of a
patent application, the University will be free to submit and publish the
manuscript. However, no publication of any compounds, structures or other
information which is confidential information of BioNumerik will be made by the
University without the prior written consent of the Company, which consent will
not be unreasonably withheld.
1.11 Patents. Except as provided in Section 1.10, the Company may for a
period of sixty (60) days after the Company's receipt of the Invention Notice
elect to seek patent protection for any University Invention or Selected
Invention with respect to which it negotiates a license. In the event the
Company determines to seek patent protection, the Company will inform the
University in writing of its election. The University will then cause to be
prepared, filed, prosecuted, and maintained at the Company's expense patent
applications and/or patents resulting therefrom, provided, however, that in the
event that the Company and the University are unable to negotiate a license for
such invention, the Company's liability for any additional patent expenses shall
cease upon the University's receipt of the Company's written notification that
it no longer wishes to continue negotiations, and the University will, upon
licensing the invention to a commercial third party, reimburse the Company for
all patent expenses which the Company incurred. Such patent preparation, filing,
prosecution, and maintenance will be performed through outside patent counsel
selected by the University and approved by the Company, which approval will not
be unreasonably withheld. In the event the Company determines not to seek patent
protection as provided herein, the University will be free to seek such
protection at the University's expense.
PART II
CLINICAL TRIAL AGREEMENT
2.1 Clinical Trials. The Company hereby grants to the Center [**]. In the
event the University and the Company are unable to agree upon the material terms
of a clinical trials agreement within such thirty (30) day period, the
University's rights herein shall terminate with respect to that Oncology Drug.
In addition, nothing herein shall prevent the Company from conducting
negotiations with other potential clinical trial sites concurrently with its
negotiations with the University. In connection with any agreement entered with
respect to the Trials, the Company agrees to reimburse the University's direct
and indirect costs, provided, however, that the University agrees that total
indirect costs for such Trials will not exceed [**] of total direct costs, and
the costs and terms of such Trials will otherwise be in accordance with and no
less favorable to the Company than the Company's existing clinical trials
agreements with the University.
PART III
PERIODIC PAYMENTS
3.1 Upon the execution and delivery of this Agreement by the University,
the Company will pay to the Center [**]. Upon each of the next [**] succeeding
anniversaries of the date of this Agreement, the Company will pay to the Center
an additional [**]. In addition, the Center and the Company will discuss in good
faith and determine a reasonable portion of the above-referenced annual amount
paid to the Center that will be allocated to fund a fellowship or other research
agreed upon by the Company and the Center.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
PART IV
MISCELLANEOUS
4.1 University Name. The Company will not use the name, likeness, or logo
of the Johns Hopkins University; its Schools, Divisions, Departments, or
Centers; The Johns Hopkins Hospital and Health System; or Johns Hopkins'
faculty, employees, students, or trustees in any of the Company's fund-raising
documents, publications, advertisements, or marketing and promotional materials
without the prior written consent of the University. The University shall have
three business days from the date of receipt of the Company's request for
written consent to review such request.
4.2 Breach/Default. Upon breach or default of any of the terms and
conditions of this Agreement, the non-defaulting party will deliver a written
notice of such default to the defaulting party (the "Default Notice"). If the
default is not cured within sixty (60) days after the defaulting party's receipt
of the Default Notice, the non-defaulting party may terminate this Agreement.
4.3 Assignment. This Agreement may not be assigned or transferred by any
party without the prior written consent of the parties, provided, however, that
the Company may assign or transfer its rights and obligations under this
Agreement to a successor to all or substantially all of its assets or business,
whether by sale, merger, operation of law, or otherwise, and the Company shall
provide written notice to the University of any such assignment.
4.4 Independent Contractor. For the purposes of this agreement and all
services to be provided hereunder, the parties will be and will be deemed to be
independent contractors and not agents or employees of the other party. Neither
party will have authority to make any statement, representation, or commitment
of any kind, or to take any action which will be binding on the other party,
except as may be expressly provided for herein or authorized in writing.
4.5 Waiver and Amendment. The terms of this agreement may be waived or
amended only with the written consent of the parties.
4.6 Entire Agreement. This agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof, and no party shall be liable or bound to any other party in any manner
by warranties, representations, or covenants except as specifically set forth
herein. In addition to this agreement, the existing Collaboration Agreement,
dated as of November 19, 1996, between the Company and the University regarding
the area of DNA methylation, the Master Clinical Trial Research Agreement, first
dated as of March 9, 1995, between the University and the Company, and the
related protocol, confidentiality and other agreements between the University
and the Company, shall each remain and continue in full force and effect after
the date hereof in accordance with their terms.
4.7 Notices. Any notice required by this agreement shall be effective upon
deposit when given by prepaid, first class, certified mail, return receipt
requested, addressed to:
If to the University: Michael B. Amey
Assistant Dean for Research Administration
The Johns Hopkins University School of Medicine
720 Rutland Ave., Administration Building, Room 129
Baltimore, Maryland 21205
with a copy to: Martin D. Abeloff, M.D.
Professor and Director
The Johns Hopkins Oncology Center (157)
600 North Wolfe Street
Baltimore, Maryland 21287
If to the Company: Frederick H. Hausheer, M.D.
Chairman
BioNumerik Pharmaceuticals, Inc.
8122 Datapoint Drive, Suite 1250
San Antonio, Texas 78229
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4.8 Governing Law. This Agreement shall be governed in all respects by and
construed in accordance with the laws of the State of Maryland as applied to
agreements among Maryland residents to be performed entirely in Maryland.
4.9 Headings. The headings of the several sections of this agreement are
intended for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
4.10 Severability. If any provision of this agreement shall be found by a
court to be void, invalid, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not be in any way affected or
impaired thereby.
4.11 Counterparts. This agreement may be executed in counterparts, each of
which shall be deemed an original, but each of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written. written.
THE JOHNS HOPKINS UNIVERSITY BIONUMERIK PHARMACEUTICALS, INC.
By: /s/ MICHAEL B. AMEY By: /s/ FREDERICK H. HAUSHEER
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Name: Michael B. Amey Name: Frederick H. Hausheer, M.D.
Title: Assistant Dean Title: Chairman & Chief Executive Officer
for Research Administration
Date: 2/16/00 Date: 2/8/00
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The undersigned have read this Agreement and agree to its terms:
/s/ FREDERICK H. HAUSHEER
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Frederick H. Hausheer, M.D.
/s/ MARTIN D. ABELOFF
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Martin D. Abeloff, M.D.
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EXHIBIT 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption "Experts" and
to the use of our reports dated April 27, 2004, in Amendment No. 1 to the
Registration Statement (Form S-1 No. 333-116301) and related Prospectus of
BioNumerik Pharmaceuticals, Inc.
/s/ Ernst & Young LLP
San Antonio, Texas
August 20, 2004
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