SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 3, 1997
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Sheffield Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
New York 1-12584 13-3808303
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
425 South Woodsmill Road, Suite 270, St. Louis, Missouri 63017
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(Address of principal executive offices)
Registrant's telephone number, including area code: (314) 579-9899
30 Rockefeller Plaza, New York, New York 10112
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(Former name or former address, if changed since last report.)
Exhibit Index on Page 3
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Item 5. ACQUISITION OR DISPOSITION OF ASSETS.
On December 3, 1997, the Registrant, through its wholly owned
subsidiary, Ion Pharmaceuticals, Inc. ("Ion"), entered into an agreement with a
1266417 Ontario Limited ("Immutec Sub"), a subsidiary of Immutec Pharma, Inc.
("Immutec"), providing for the sale of the Registrant's patent interests in
three U.S. patent applications (and corresponding international patents), in
each case relating to certain New Chemical Entities (NCE's) in the treatment of
cancer, actinic keratosis and Kaposi's sarcoma (the "Patent Interests"), and the
Registrant's interest in an Invention Disclosure relating to a topical cream
formulation for clotrimazole to Immutec Sub. The assignment and sale was
pursuant to the terms of an assignment and license agreement between Ion and
Immutec Sub (the "Assignment Agreement"). In addition, the Registrant
sublicensed the interest of Harvard College and Children's Medical Center
Corporation in the Patent Interests and additional rights licensed to the
Registrant by Harvard College and Children's Medical Center Corporation related
to clotrimazole and its use in the treatment of cancer, actinic keratosis and
Kaposi's sarcoma to Immutec Sub pursuant to a sub-license agreement between Ion
and Immutec Sub (the "License Agreement").
Pursuant to the Assignment Agreement, the Registrant will receive (i)
20% of the common stock of Immutec Sub, (ii) $75,000 (received by the Registrant
at the closing of the transaction), (iii) $75,000 on or prior to December 31,
1997, (iv) $350,000 in shares of common stock of Immutec and (v) $850,000 in
milestone payments through receipt of marketing approval for any of the NCE's.
Pursuant to the License Agreement the Registrant will receive from
Immutec Sub (i) $175,000 (received by Registrant at the closing of the
transaction), (ii) $175,000 on or before December 31, 1997 and (iii) $2,150,000
to be paid in the future subject to achievement of certain milestones.
Copies of the Assignment Agreement and License Agreement are attached
as exhibits to this report.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(c) EXHIBITS.
10(a) Assignment and License Agreement dated as of December
3, 1997 between 1266417 Ontario Limited and Ion
Pharmaceuticals, Inc. (portions of this exhibit are
omitted and were filed separately with the Securities
Exchange Commission pursuant to the
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Company's application requesting confidential
treatment in accordance with Rule 24b-2 as
promulgated under the Securities Exchange Act of
1934, as amended).
10(b) Sub-License Agreement dated as of December 3, 1997
between 1266417 Ontario Limited and Ion
Pharmaceuticals, Inc. (portions of this exhibit are
omitted and were filed separately with the Securities
Exchange Commission pursuant to the Company's
application requesting confidential treatment in
accordance with Rule 24b-2 as promulgated under the
Securities Exchange Act of 1934, as amended).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SHEFFIELD PHARMACEUTICALS, INC.
Dated: December 18, 1997 By: /s/ Judy Roeske Bullock
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Judy Roeske Bullock
Vice President & Chief
Financial Officer
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EXHIBIT LIST
10(a) Assignment and License Agreement dated as of December
3, 1997 between 1266417 Ontario Limited and Ion
Pharmaceuticals, Inc. (portions of this exhibit are
omitted and were filed separately with the Securities
Exchange Commission pursuant to the Company's
application requesting confidential treatment in
accordance with Rule 24b-2 as promulgated under the
Securities Exchange Act of 1934, as amended).
10(b) Sub-License Agreement dated as of December 3, 1997
between 1266417 Ontario Limited and Ion
Pharmaceuticals, Inc. (portions of this exhibit are
omitted and were filed separately with the Securities
Exchange Commission pursuant to the Company's
application requesting confidential treatment in
accordance with Rule 24b-2 as promulgated under the
Securities Exchange Act of 1934, as amended).
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10(a)
ASSIGNMENT AND LICENSE AGREEMENT
THIS ASSIGNMENT AND LICENSE AGREEMENT (the "Agreement") is
made as of the third day of December, 1997, between 1266417 Ontario Limited, an
Ontario corporation with offices at 1285 Morningside Avenue, Scarborough,
Ontario M1B 3W2 (hereinafter "NEWCO"), and Ion Pharmaceuticals, Inc., an
American corporation located at Suite 208, 124 Mount Auburn Street, Cambridge,
MA 02138-5700 (hereinafter "ION").
WHEREAS:
A. ION is the co-owner (together with the President and Fellows of
Harvard College ("HARVARD") and the Children's Medical Center Corporation
("CMCC")) of the patents and, patent applications listed in Appendix A, ("Patent
Rights") encompassing new chemical entities ("NCE's") and the use of the NCE's
in the treatment and diagnosis of cancer, Kaposi's sarcoma and actinic
keratosis.
B. NEWCO, a newly formed Ontario subsidiary of Imutec Pharma Inc.
("Imutec") in which ION is a shareholder through a shareholder agreement dated
December 3, 1997 between Imutec, NEWCO and ION (the "Shareholder Agreement"),
wishes to acquire ION's ownership interest in all the Patent Rights and ION
wishes to assign the same to NEWCO in exchange for certain payments (described
herein in Article 4) and a grant from NEWCO of an irrevocable, world-wide,
exclusive, fully paid-up license for the NCE's listed in Appendix B.
C. ION is party (the Licensee) to a license agreement dated August 22,
1994 between ION and HARVARD (the "License Agreement") which grants ION certain
rights in the Patent Rights, as well as rights HARVARD holds, if any, to "all
patentable and unpatentable technology, licensed products, compounds, devices,
models, things, know-how, methods, documents, materials, and all other
information" related to the Patent Rights.
D. NEWCO wishes to obtain a sublicense under the License Agreement
between ION and HARVARD referred to in clause C above, and ION is able to and
wishes to grant the same to NEWCO in exchange for certain payments as described
in the sub-license agreement appended to this Assignment Agreement as Appendix C
(the "Sub-license Agreement").
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and intending to be legally bound, NEWCO and ION agree as
follows:
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ARTICLE 1
DEFINITIONS
The following terms, as used herein, shall have the following meanings:
1.01 "Lead Compounds" shall mean those compounds which have [Text Omitted] as
determined and selected by NEWCO from the NCEs.
1.02 "Patent Rights" shall mean ION's rights under any patents and patent
applications, as identified in Appendix A hereto. The "Patent Rights" also
include any continuation, continuation-in-part, extension, division, or
substitution to such applications and all patents which are re-issues,
re-examinations and registrations based thereon, as well as corresponding
applications and patents in other countries, to the extent that ION is an owner
or co-owner in such patent or patent application and the subject matter is
related to the Field of Use and entitled to the priority date of the parent
application, to the extent that ION is legally able to do so. The "Patent
Rights" expressly exclude any continuation, continuation-in-part, or division of
[Text Omitted].
1.03 "Field of Use" shall mean in the diagnosis and treatment of cancer, actinic
keratosis and Kaposi's Sarcoma.
1.04 "Licensed NCE's" shall mean those NCE's listed in Appendix B.
ARTICLE 2
ASSIGNMENT
2.01 ASSIGNMENT OF PATENT RIGHTS. Upon satisfaction of NEWCO's payment to ION of
the amounts specified in paragraph 4.01 (a) and (b), ION shall assign to NEWCO
the Patent Rights authorizing the release of Assignments in escrow as provided
for in Paragraph 2.02 and pursuant to the terms and conditions of the escrow
agreement set forth in Appendix D (the "Escrow Agreement"). ION agrees to
execute whatever formal assignment documents are required for all Patent Rights.
In recognition of ION's ownership of certain subject matter expressly excluded
in the definition of Patent Rights defined in Paragraph 1.02, NEWCO shall
execute whatever formal assignment documents that are required to ensure such
excluded Patent Rights are assigned to ION, if necessary.
2.02 To facilitate the transfer of the Assignments for the Patent Rights to
NEWCO, within five (5) days of the effective date of this Agreement, ION will
execute the Assignments in the form in Appendix E. The parties agree that the
executed Assignments shall be held in escrow by an escrow agent selected by ION
and reasonably acceptable to NEWCO. The terms and conditions of the Escrow
Agreement are set forth in Appendix D.
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2.03 In the event of a termination of this Agreement pursuant to Paragraph 9.01,
NEWCO will promptly assign back to ION all of the Patent Rights.
2.04 In the event of a termination of this Agreement pursuant to Paragraph 9.02
or Paragraph 9.03, within 30 days of the Default or Discontinuance, ION may
elect in writing to re-acquire the Patent Rights. If ION so elects, and upon
prompt payment by ION to NEWCO in accordance with the schedule provided in
Paragraph 9.04, NEWCO will promptly assign back to ION all of the Patent Rights,
as well as, all pre-clinical and clinical data, clinical trial protocols,
regulatory filings, research program reports and any other information related
to the Patent Rights. NEWCO agrees to execute whatever formal assignment
documents that are required by Ion to affect such assignment.
ARTICLE 3
LICENSE
3.01 NEWCO hereby grants to ION an exclusive, world-wide, irrevocable, fully
paid-up license to the NCE's listed in Appendix B to make, have made, use,
import, offer to sell, sell or otherwise commercialize outside the Field of Use.
NEWCO acknowledges and agrees that it does not reserve any rights in the NCE's
(listed in Appendix B) and their uses outside the Field of Use.
3.02 NEWCO hereby acknowledges and agrees that the license granted in this
Article 3 cannot be terminated by NEWCO and shall extend until the last to
expire of the Patent Rights, except if ION's activities or those activities of
any sublicensee of ION relating to the Licensed NCE's intrude, in any way, in
the Field of Use, whereby NEWCO may revoke the license granted in this Article
3, upon seven (7) days notice to ION.
ARTICLE 4
COMPENSATION FOR ASSIGNMENT OF PATENT RIGHTS
4.01 PAYMENTS BY NEWCO. In consideration for the assignment as set out in
Article 2, NEWCO will pay up to $1,350,000 U.S. to ION as follows:
a) $[Text Omitted] U.S. to be paid in two installments, the first
installment to be paid upon the execution of this Agreement, and the second
installment to be paid before [Text Omitted];
b) $[Text Omitted] U.S. in Imutec shares at a milestone on [Text
Omitted], with the number of shares to be determined based on the lower of (i)
the closing price of Imutec shares on June 10, 1998 and (ii) 150% of the closing
price of Imutec shares on the Closing Date (as defined in the Letter Agreement
between ION and Imutec dated November 19, 1997), such shares to be in addition
to the NEWCO shares issued to ION pursuant to the Shareholder Agreement;
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c) $[Text Omitted] U.S. milestone payment, earned at a milestone date
that is sixty (60) days after the completion of the treatment of the last
subject in the first Phase I trial and payable to ION prior to initiating the
first Phase II trial with the first of any of the Lead Compounds but not later
than one hundred and eighty (180) days of completion of the treatment of the
last subject in the first Phase I trial;
d) $[Text Omitted] U.S. milestone payment, earned at a milestone date
that is sixty (60) days after the completion of the treatment of the last
subject in the first Phase II trial and payable to ION prior to initiating the
first Phase III trial with the first of any of the Lead Compounds but not later
than one hundred and eighty (180) days of completion of the treatment of the
last subject in the first Phase II trial;
e) $[Text Omitted] U.S. milestone payment, earned at a milestone date
that is sixty (60) days after the completion of the treatment of the last
subject in the last pivotal Phase III trial and payable to ION within one
hundred and eighty (180) days of completion of the treatment of the last subject
in the last pivotal Phase III trial for the first of any of the Lead Compounds;
and
f) $[Text Omitted] U.S. final milestone payment, earned at a milestone
date which is the date of receipt of marketing approval in the United States,
Canada, England or France for the first of any of the Lead Compounds and payable
to ION within thirty (30) days of the receipt of marketing approval in the
United States, Canada, England or France for the first of any of the Lead
Compounds.
For further clarification, in the event any of the clinical trials for which
payments described above are due ION by NEWCO and which are multi-phased, then
the payment due ION shall be made for each milestone described above addressed
by such multi-phased trial (i.e., if there is a Phase II/III trial, which is the
first in both Phase II and Phase III, then ION receives $[Text Omitted] in
satisfaction of milestone payments described in (c) and (d) above).
ARTICLE 5
REPORTING OBLIGATIONS OF NEWCO
5.01 NEWCO shall promptly notify ION of the commencement of each of the clinical
trials listed in Article 4 and shall, within fifteen (15) days of the date of
each milestone achieved as identified in Paragraph 4.01(c), (d), (e) and (f)
above (i.e. the date each clinical trial is completed), shall provide written
notice to ION that such milestone has been accomplished and identify the date
such milestone was accomplished.
5.02 NEWCO shall provide to ION written annual reports within thirty (30) days
after June 30 of each calendar year which shall include, but not be limited to,
reports of progress on research and development, clinical trials, and regulatory
and marketing approvals obtained during the preceding twelve (12) month period,
as well as plans for the upcoming year.
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The annual report supplied to ION pursuant to the Sub-license Agreement will
satisfy this requirement.
ARTICLE 6
INTELLECTUAL PROPERTY RIGHTS
6.01 PATENTS. Decisions regarding the preparation, prosecution, and maintenance
of the Patent Rights shall be made in accordance with the terms of the
Sub-license Agreement.
6.02 COOPERATION. ION shall fully cooperate with NEWCO in the preparation and
prosecution of all Patent Rights and shall ensure that its employees and the
inventors of such Patent Rights do the same, which may require ION to secure the
cooperation of [Text Omitted] and the inventors who are employees of [Text
Omitted] to the extent possible. This shall include, but not be limited to, the
execution of all petitions, declarations, Power of Attorneys, and formal
assignments necessary to transfer ION's ownership interest in the Patent Rights
to NEWCO.
6.03 PATENT INFRINGEMENT BY OTHERS. Any infringement of any of the Patent Rights
or other Assigned Technology which comes to the attention of either ION or NEWCO
shall be handled in accordance with the terms of the Sub-license Agreement.
ARTICLE 7
CONFIDENTIALITY AND TRADE SECRETS PUBLICITY
7.01 CONFIDENTIALITY OBLIGATIONS OF ION. ION shall keep confidential all
information contained in the Patent Rights ("NEWCO Confidential Information"),
however, the confidentiality obligations of ION under this Agreement shall not
apply to:
(a) NEWCO Confidential Information related to the Licensed NCE's;
(b) NEWCO Confidential Information which is necessary to be disclosed
to HARVARD in order for ION to fulfill its obligations under the License
Agreement; ION shall require HARVARD to sign a non-disclosure agreement
regarding any NEWCO Confidential Information to be provided by ION to HARVARD
under the License Agreement, and shall supply a copy of said non-disclosure
agreement to NEWCO, thirty (30) days prior to ION submitting its first annual
report after the date of this Agreement to HARVARD under the License Agreement;
(c) NEWCO Confidential Information which is generally available to the
public or which becomes available to the general public through no fault of ION;
or
(d) NEWCO Confidential Information that is required by law to be
disclosed, provided that ION has advised NEWCO of the demand, subpoena,
interrogatory or other legal process in advance of such disclosure in order to
allow NEWCO to obtain a protective order
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or other remedy, in which such case, such NEWCO Confidential Information shall
continue to be treated as NEWCO Confidential Information to the extent it is
covered by a protective order or equivalent.
7.02 CONFIDENTIALITY OBLIGATIONS OF NEWCO. NEWCO shall keep confidential all
information related to the Licensed NCE's ("ION Confidential Information"),
however, the confidentiality obligations of NEWCO under this Agreement shall not
apply to:
(a) ION Confidential Information which is generally available to the
public or which becomes available to the general public through no fault of
NEWCO; or
(b) ION Confidential Information that is required by law to the
disclosed, provided that NEWCO has advised ION of the demand, subpoena,
interrogatory or other legal process in advance of such disclosure in order to
allow ION to obtain a protective order or other remedy, in which such case, such
ION Confidential Information shall continue to be treated as ION Confidential
Information to the extent it is covered by a protective order or equivalent.
7.03 PUBLICITY. 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, relating to this Agreement, without the prior
written approval of the other party, which approval shall not be unreasonably
withheld. Each party shall furnish the other party promptly with one (1) copy of
all such documents which make reference to the other party with regard to this
Agreement.
ARTICLE 8
WARRANTIES AND REPRESENTATIONS
8.01 WARRANTIES AND REPRESENTATIONS BY ION. ION warrants that it has the lawful
right and authority to enter into this Agreement without the consent or
authority of another person or entity.
ION warrants that it co-owns with HARVARD and CMCC all rights, title,
and interest in and to the Patent Rights.
ION warrants that to the best of its knowledge, the Patent Rights are
in good standing, i.e., that all proper assignments have been made transferring
to ION a one-third interest in all rights, title, and interest in and to the
Patent Rights, that all annuities have been paid in respect of the Patent
Rights, and that none of the Patent Rights is the subject of any protest,
opposition interference, re-examination, impeachment proceedings, litigation or
any other proceeding.
ION warrants that to its knowledge as of the effective date of this
Agreement, the patents and patent applications contained in Appendix A
constitute all the patents and patent
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applications owned or co-owned by ION which relate to (i) the use of [Text
Omitted] in the Field of Use, (ii) the NCE's and (iii) the use of NCE's in the
Field of Use.
ION further warrants that to its knowledge as of the effective date of
this Agreement, ION does not own or co-own any additional know-how or trade
secrets relating to the use of [Text Omitted] in the Field of Use, the NCE's, or
the use of the NCE's in the Field of Use, which are not specifically described
in the Patent Rights.
ION further warrants that, as of the effective date of this Agreement,
it has disclosed all patentable and unpatentable matter that it owns or co-owns,
that relates to [Text Omitted] and the use of [Text Omitted] in the Field of
Use, the NCE's and the use of the NCE's in the Field of Use, and any other
compounds or chemical entities relating to the Field of Use.
ION warrants that to the best of its knowledge as of the date of this
Agreement, the Patent Rights do not infringe any intellectual property rights
belonging to any person or entity other than ION. NEWCO acknowledges that ION
has not undertaken any specific infringement analysis with regard to the Patent
Rights.
8.02 WARRANTIES AND REPRESENTATIONS BY NEWCO. NEWCO warrants that it has the
lawful right and authority to enter into this Agreement without the consent or
authority of another person or entity.
8.03 DISCLAIMER OF WARRANTIES AND REPRESENTATIONS. EXCEPT AS SET FORTH IN
PARAGRAPH 8.01 ABOVE, ION MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE OR MERCHANTABILITY, REGARDING THE RIGHTS ASSIGNED BY THIS AGREEMENT OR
THE PATENT RIGHTS. NOTHING IN THIS AGREEMENT SHOULD BE CONSTRUED AS A WARRANTY
OR REPRESENTATION BY ION AS TO THE VALIDITY OR SCOPE OF ANY OF THE PATENT
RIGHTS, OR A WARRANTY OR REPRESENTATION THAT ANYTHING MADE, USED, SOLD OR
OTHERWISE DISPOSED OF UNDER ANY RIGHTS ASSIGNED TO NEWCO BY THIS AGREEMENT IS OR
WILL BE FREE FROM INFRINGEMENT OF PATENTS OF THIRD PARTIES.
ARTICLE 9
TERMINATION
9.01 In the event that NEWCO fails to pay the payments pursuant to paragraph
4.01 when due (hereinafter a Default ), ION may terminate this Agreement,
provided that ION has given NEWCO seven (7) days notice of the default, and
NEWCO has failed to make such payment during that seven day period. NEWCO shall
promptly assign all of the Patent Rights to ION pursuant to paragraph 2.03.
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9.02 In the event that NEWCO advises ION by way of written notice that it
intends to cause NEWCO to discontinue its research and development activities
(hereinafter a Discontinuance ), ION may terminate this Agreement, provided that
ION has within 60 days of the written notice of discontinuance, advised NEWCO,
in writing, of its intention to so terminate this Agreement. Notice by NEWCO
that occurs during the period between the date on which a milestone payment is
earned and the date on which it is payable, as defined in Article 4, shall be
considered a Default under paragraph 9.01 unless the earned milestone payment is
made to ION on or prior to the payable date defined in Article 4, in which case
such notice will be a Discontinuance under the terms and conditions of this
Paragraph.
9.03 In the event that NEWCO becomes involved in insolvency, dissolution,
bankruptcy or receivership proceedings affecting the operation of its business
or in the event that NEWCO shall discontinue its business for any reason
(hereinafter a Default), ION may terminate this Agreement.
9.04 For the purposes of Paragraphs 9.02 and 9.03, and pursuant to paragraph
2.04, the payment schedule is as follows:
(i) where the Default or Discontinuance occurs prior to the completion
of the pre- clinical research programs of the Lead Compounds, [Text Omitted].
(ii) where the Default or Discontinuance occurs after the completion of
the pre- clinical research programs of the Lead Compounds, and before the
completion of Phase I clinical trials [Text Omitted].
(iii) where the Default or Discontinuance occurs after the completion
of the Phase I clinical trials and before the completion of Phase II clinical
trials [Text Omitted].
(iv) where the Default or Discontinuance occurs after the completion of
the Phase II clinical trials and before the completion of Phase III clinical
trials [Text Omitted].
(v) where the Default or Discontinuance occurs after the completion of
the Phase III clinical trials, [Text Omitted]from the date of this Agreement to
the date that the Default or Discontinuance occurs.
9.05 The Patent Rights will remain the property of NEWCO if (i) Ion fails to
give notice under 9.01, 9.02 or 9.03 as applicable, or (ii) Ion fails to [Text
Omitted] pursuant to Paragraph 9.04 within 90 days of the termination.
9.06 No termination of this Agreement shall constitute a termination or a waiver
of any rights or obligations of either party against the other party accruing at
or prior to the time of such termination.
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9.07 The terms and provisions, covenants and conditions contained in this
Agreement which by the terms hereof require their performance by the parties
after the expiration or termination of this Agreement, shall be and remain
enforceable notwithstanding said expiration or other termination of this
Agreement for any reason whatsoever. [Text Omitted] The obligations contained in
Paragraph 7.01 shall also survive the termination of this Agreement, should the
Patent Rights not be assigned back to ION under the terms and conditions of this
Agreement.
ARTICLE 10
MISCELLANEOUS
10.01 RESOLUTION OF DISPUTES.
(a) In the event that a dispute or disagreement (hereinafter called
"Dispute") arises between the parties in connection with the interpretation of
any provision of this Agreement or the compliance or noncompliance therewith, or
the validity or enforceability thereof, or the performance or nonperformance of
either party to the Agreement, the following Dispute resolution process shall be
followed by the parties:
(1) A Dispute will be deemed to have arisen upon the delivery of a
written notice by one party to the other describing the Dispute (hereinafter
called the "Dispute Notice"). Upon delivery of the Dispute Notice, the parties
agree to attempt to resolve the Dispute in a prompt and expeditious manner,
through negotiations between ION and NEWCO representatives designated by each
party to represent them in said negotiations. Except for the Dispute Notice, all
communications between the parties will be on a without prejudice basis.
(2) If the parties have not been able to resolve the Dispute in a
prompt and expeditious manner (within 30 days) after delivery of the Dispute
Notice, either party may at any time thereafter request by written notice to the
other party that the Dispute be escalated to Senior Management.
(3) In the event such a request with written notice is made, each party
shall make available the senior executives specified in the following
subparagraph ("Senior Management") who shall meet within fifteen (15) business
days after such request is made at the offices of the party which received the
request to attempt to resolve the Dispute.
(4) The Senior Management appointee for each party is as follows:
NEWCO: Corporate Secretary
ION: Corporate Secretary
Either party may change its Senior Management appointee upon
prior written notice to the other party.
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(b) In case such Dispute is not settled amicably by Senior Management
within thirty (30) days of escalation to Senior Management, such dispute shall
be arbitrated by an Arbitration Board acting in accordance with the rules of
conciliation and arbitration of the International Chamber of Commerce in effect
on the date of the Dispute, whose decision shall be final and binding upon the
parties. The Arbitration Board shall consist of the person or persons that the
parties may agree on and in default of agreement within twenty (20) days
following the expiration of the above-mentioned thirty (30) day period, each of
the parties in dispute shall nominate one member to serve on the Arbitration
Board and shall give notice to the other party of the name of its nominee. If
one party fails to give this notice within fifteen (15) days after the other
party has done so, then the member nominated by the other party shall constitute
the Arbitration Board. If each party gives this notice, then the two members so
nominated by agreement shall select a third member who shall be Chairman. If the
original two members are unable to agree upon a third member within thirty (30)
days after the second notice has been given, the Court of Arbitration of the
International Chamber of Commerce shall appoint a third member of the
Arbitration Board who shall be unconditionally accepted by both parties. The
place of arbitration for all Disputes shall be Boston, Massachusetts, U.S.A.
The arbitration hearing shall commence within sixty (60) days
after appointment of the Arbitration Board is done and shall be completed and a
final and binding award rendered in writing within sixty (60) days after the
completion of the hearing unless circumstances warrant delay or the parties
agree to an extension. The decision of the Arbitration Board may be entered in
any court of competent jurisdiction and execution entered thereupon forthwith.
The law specified in Paragraph 10.04 below shall apply.
Each party shall bear the cost of preparing its own case. The
Arbitration Board shall have the right to include in the award the prevailing
party's costs of arbitration and reasonable fees of attorneys, accountants,
engineers and other professionals in connection with the arbitration.
The parties, however, will not be required to arbitrate and
this Paragraph will not apply to any Dispute relating to actual or threatened
unauthorized use or disclosure of confidential information or trade secrets.
10.02 NOTICES. All notices, statements, reports or other writings required or
permitted to be given by the terms of this Agreement shall be sent by either
pre-paid, registered or certified mail, or telecopier, properly addressed to
NEWCO and to ION at their respective addresses first given above or at such
other address as one party hereto may from time to time designate by notice in
writing to the other. Each notice shall be deemed to be given upon receipt.
10.03 WAIVER. A waiver by either party of a breach or violation of any provision
of this Agreement will not constitute or be construed as a waiver of any other
breach or violation of this Agreement.
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10.04 GOVERNING LAW. This Agreement shall be interpreted and construed in
accordance with the laws of the Commonwealth of Massachusetts (without regard to
Massachusetts' or any other jurisdiction's choice of law principles). Anything
herein to the contrary notwithstanding, where interpretation of a patent or
patent application is involved, this Agreement is made specifically subject to
the patent legislation of the jurisdiction in which any such patent is granted
or patent application filed.
10.05 ENTIRE AGREEMENT. This Agreement and the Appendices attached, together
with the Sublicense Agreement and the Shareholder Agreement, embodies the entire
understanding of the parties relating to the subject matter hereof. No
modification or amendment of this Agreement shall be valid or binding except if
in writing signed by each of the parties.
10.06 NO ASSIGNMENT. The rights of either party under this Agreement may not be
assigned, and the duties of either party under this Agreement may not be
delegated, without the prior written consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that any party may assign
this Agreement to any corporation or entity with which it may merge or
consolidate, or to which it may transfer substantially all of its assets or all
of its assets to which this Agreement relates, without obtaining the consent of
the other party. ION may therefore assign this Agreement to Sheffield
Pharmaceuticals, Inc. (hereinafter "Sheffield") if ION merges or consolidates
with Sheffield or transfers to Sheffield substantially all of its assets or all
of its assets to which this Agreement relates, without obtaining the consent of
NEWCO.
10.07 HEADINGS. Any headings and captions used in this Agreement are for
convenience and reference only and are not a part of this Agreement.
10.08 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and such
counterparts together shall constitute one agreement.
10.09 LANGUAGE. NEWCO has requested that this Agreement and all related
documents be drawn up in the English language with which request ION agrees.
NEWCO a demande que le present contrat ainsi que toute la documentation
d'accompagnement soient rediges en anglais, requete a laquille ION consent.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Assignment and License Agreement as of the date first above written.
1266417 ONTARIO LIMITED
By: /s/ Philippe Lacaille
-------------------------------
Name: Philippe Lacaille
Title: Chairman and President
By: /s/ Kerri Golden
-------------------------------
Name: Kerri Golden
Title: Chief Financial Officer and
Corporate Secretary
ION PHARMACEUTICALS, INC.
By: /s/ Thomas Fitzgerald
-------------------------------
Name: Thomas Fitzgerald
Title: President
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APPENDIX A
ASSIGNED TECHNOLOGY
"Patent Rights" shall include the following:
[TEXT OMITTED]
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APPENDIX B
LICENSED NCES
[Text Omitted]
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10(b)
SUB-LICENSE AGREEMENT
THIS AGREEMENT (the "Sub-License Agreement") is made as of the 3rd day of
December, 1997 (the "Sub-License Agreement Date"), between 1266417 Ontario
Limited, an Ontario corporation with offices at 1285 Morningside Avenue,
Scarborough, Ontario, M1B 3W2 (hereinafter "NEWCO"), and Ion Pharmaceuticals
Inc, an American corporation located at Suite 208, 124 Mount Auburn Street,
Cambridge MA 02138-5700 (hereinafter "ION"), being a subsidiary wholly owned by
Sheffield Pharmaceuticals, Inc. (hereinafter "SHEFFIELD").
WHEREAS:
A. ION is a co-owner (together with the President and Fellows of
Harvard College (hereinafter "HARVARD") and the Children's Medical Center
Corporation (hereinafter "CMCC")) of the Patent Rights (as defined in the
Assignment and License Agreement dated December 3, 1997 between ION and NEWCO,)
(the "Assignment and License Agreement").
B. NEWCO, a newly formed Ontario subsidiary of Imutec Pharma Inc., is
acquiring ION's ownership interest in all Patent Rights in exchange for certain
payments and a license to certain NCEs, as defined in the Assignment and License
Agreement.
C. ION is party (the Licensee) to a License Agreement (hereinafter "the
HARVARD/ION License Agreement"), originally dated August 22, 1994 and modified
June 21, 1995, August 22, 1996 and December 2, 1997, between ION and HARVARD
which grants ION certain rights in the Harvard Patent Rights as defined in
Paragraph 1.1 herein.
<PAGE>
D. NEWCO wishes to obtain a sub-license under the HARVARD/ION License
Agreement, and ION is able to and wishes to grant the same to NEWCO in exchange
for the payments described in this Sub-License Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and intending to be legally bound NEWCO and ION agree as
follows:
I.
DEFINITIONS
As used herein, the following phrases, whether used in the singular or
plural, shall have the following meanings:
1.1 "Harvard Patent Rights" shall mean: [Text Omitted] and any other
United States patent application, including any division, continuation or
continuation-in-part, thereof and any foreign patent application or equivalent
corresponding thereto and any United States or foreign Letters Patent or
equivalent thereof issuing thereon or reissue or extension thereof, to the
extent it claims an invention made in the performance of research previously
sponsored by ION and to the extent that HARVARD is able to grant a full
exclusive license as is granted in the HARVARD/ION License Agreement and in this
Sub-License Agreement.
1.2 "Technology" shall mean all patentable and unpatentable technology,
know-how, trade secrets and all other information in ION's custody and under
ION's control relating to the Harvard
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Patent Rights, excluding any such technology described in Paragraph 2.4 herein.
1.3 "Sublicensed Technology" shall mean Harvard Patent Rights and
Technology.
1.4 "Sublicensed Product(s)" shall mean any compounds, substances,
pharmaceutical, diagnostic kits and/or components or manifestations thereof
which incorporate or utilize the Sublicensed Technology in the Field of Use.
1.5 "Field of Use" shall mean in the diagnosis and treatment of cancer,
actinic keratosis and Kaposi's Sarcoma.
1.6 "NCE's" shall mean the compounds encompassed in the Patent Rights.
1.7 "Lead Compounds" shall mean those compounds which have demonstrated
[Text Omitted] as determined and selected by NEWCO from the NCE's.
1.8 "Affiliate" shall mean any business entity that, directly or
indirectly, de jure or de facto, controls, is controlled by, or is under common
control with NEWCO. The meaning of the word "control" shall include, without
limitation, direct or indirect ownership of more than fifty percent (50%) of the
voting shares of such corporation or fifty percent (50%) of the ownership
interests in such other business equity.
II.
LICENSE GRANT
2.1 ION hereby grants to NEWCO an exclusive, worldwide right and
license under the Harvard Patent Rights, to make, have
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<PAGE>
made, use, market, sell, or otherwise commercialize products using the Harvard
Patent Rights in the Field of Use, subject only to the license granted to ION in
the Assignment and License Agreement.
2.2 ION hereby grants to NEWCO a non-exclusive, worldwide right and
license under the Technology to make, have made, use, market, sell, or otherwise
commercialize the Technology in the Field of Use, subject only to the license
granted to ION in the Assignment and License Agreement. ION agrees not to grant
any third party similar rights in the Field of Use.
2.3 ION grants to NEWCO, a worldwide right and license under the
Sublicensed Technology to grant exclusive sub-licenses under the Harvard Patent
Rights and to grant non-exclusive sub- licenses under the Technology to make,
have made, use, market, sell, or otherwise commercialize the Sublicensed
Technology, subject only to the license granted to ION in the Assignment and
License Agreement. NEWCO shall provide ION with a copy of each such sub-license
after execution thereof.
2.4 The licenses granted hereunder shall not be construed to confer any
rights upon NEWCO by implication, estoppel, or otherwise as to any technology
not specifically encompassed by the term Sublicensed Technology. It is agreed
and understood that the licenses granted hereunder do not confer any right upon
NEWCO to any technology owned or controlled by Pharm-Eco Laboratories, Inc.,
including but not limited to any technology relating to the methods of
manufacturing the NCE's, and that may be known to ION.
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2.5 The granting and acceptance of this Sub-License Agreement is
subject to the following in the event the Sublicensed Technology is funded in
part by non-profit or non- commercial sponsors of research: (i) Harvard's
Statement of Policy in Regard to Inventions, Patents and Copyrights" dated March
17, 1986; and (ii) Public Law 96-517 and Public Law 98-620. Nothing in this
Sub-License Agreement shall prevent Harvard or the Principal Investigator from
seeking additional funding, however, in no event shall any rights under an
agreement with non-profit or non-commercial sponsors of research conflict or
affect in any way the right and license granted hereunder to NEWCO by ION. Any
right granted in this Sub-License Agreement greater than permitted under Public
Law 96-517 or Public Law 98- 620 shall be subject to modifications as may be
required to conform to the provisions of that statute.
2.6 NEWCO agrees that HARVARD retains the right to make and to use the
Sublicensed Technology for research purposes only and not for any commercial
purpose. In the event HARVARD wishes to transfer any materials under the
Sublicensed Technology to a third party research institution for research
purposes only, the name and address of such scientists and not-for-profit
institutions shall be promptly provided to NEWCO.
III.
EFFORTS
3.1 NEWCO shall use reasonable efforts to effect introduction of
Sublicensed Products into the commercial market
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as soon as practicable, consistent with sound and reasonable business practices
and judgment; thereafter, until the expiration of this Sub-License Agreement,
NEWCO shall endeavor to keep Sublicensed Products reasonably available to the
public.
3.2 NEWCO shall provide to ION written annual reports within thirty
(30) days after June 30 of each calendar year which shall include but not be
limited to: reports of progress on research and development, regulatory
approvals, manufacturing, sub-licensing, marketing and sales during the
preceding twelve (12) months as well as plans for the coming year. If progress
differs from that anticipated in the plan provided, NEWCO shall explain the
differences and propose a modified plan for ION's review. If ION is dissatisfied
with the modified plan, both parties shall meet to develop a plan mutually
agreed upon. NEWCO shall also provide any reasonable additional data that ION
requires to evaluate NEWCO's compliance under this Paragraph. ION agrees to
maintain as confidential all information designated as confidential by NEWCO
which is provided to ION under this Paragraph. ION agrees not to use such
confidential information for any purposes other than the evaluation of NEWCO's
compliance under this Paragraph and agrees not to disclose such information to
anyone who is not a direct employee of ION, HARVARD's Office of Technology
Licensing or anyone who has not signed a nondisclosure agreement each of which
shall be acceptable to NEWCO covering the confidential information. Copies of
such
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nondisclosure agreements shall be provided to NEWCO promptly after execution.
3.3 NEWCO shall fund the ongoing research and development of the
Sublicensed Technology substantially in accordance with the development plan. At
its expense, NEWCO shall use best efforts to obtain regulatory approval for the
marketing, sale and use of one or more products derived from the Sublicensed
Technology at the earliest possible date in the [Text Omitted].
3.4 ION shall have the right at its sole discretion to terminate or
render this Sub-License Agreement non-exclusive if NEWCO is not engaged in
research, development, clinical trials, product approval, manufacturing,
marketing or licensing of any of the Sublicensed Technology. Prior to invoking
the right to terminate or render this Sub-License Agreement non-exclusive, ION
shall give written notice to NEWCO and a seventy-five (75) day opportunity to
NEWCO to demonstrate that it is using reasonable efforts to comply under this
Paragraph. If after the seventy-five (75) day period, NEWCO fails to demonstrate
such compliance, ION may notify NEWCO of its intent to either terminate or
render this Sub-license Agreement non-exclusive.
IV.
PAYMENTS BY NEWCO
4.1 In consideration for this Sub-License Agreement, NEWCO or its
sublicensees or Affiliates will pay up to $2,500,000 U.S.
to ION as follows:
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a) $[Text Omitted] U.S. to be paid in two equal installments, the first
installment to be paid upon the execution of this Sub-License Agreement, and the
second installment to be paid before [Text Omitted];
b) $[Text Omitted] U.S. milestone payment prior to initiating the first
Phase II trial with the first of any Sublicensed Product but not later than one
hundred and eighty (180) days of completion of the treatment of the last subject
in the first Phase I trial;
c) $[Text Omitted] U.S. milestone payment prior to initiating the first
Phase III trial with the first of any Sublicensed Product but not later than one
hundred and eighty (180) days of completion of the last subject in the first
Phase II trial;
d) $[Text Omitted] U.S. milestone payment due within one hundred and
eighty (180) days of completion of the treatment of the last subject in the last
pivotal Phase III trial for the first Sublicensed Product;
e) $[Text Omitted] U.S. final milestone payment within thirty (30) days
of the receipt of product marketing approval in the [Text Omitted] for the first
Sublicensed Product. For further clarification, in the event any of the clinical
trials for which payments described above are due ION by NEWCO and which are
multi-phased, then the payment due ION shall be made for each milestone
described above addressed by such multi- phased trial (i.e., if there is a Phase
II/III trial, which is
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<PAGE>
the first in both Phase II and Phase III, then ION receives $[Text Omitted] in
satisfaction of milestone payments described in (b) and (c) above).
V.
REPORTS, RECORDS AND INSPECTION
5.1 NEWCO shall maintain a true and correct set of records pertaining
to its performance under this Sub-License Agreement for a period of [Text
Omitted] after the termination or expiration of this Sub-License Agreement.
NEWCO agrees to permit an auditor selected by ION and reasonably acceptable to
NEWCO to have access, during the term of this Sub-License Agreement and for a
period of two years thereafter, and during ordinary business hours, to such
records as may be necessary, in the opinion of such auditor, to determine the
correctness of any report and/or payment made under this Sub-License Agreement.
VI.
PATENTS AND INFRINGEMENT
6.1(a) NEWCO shall continue at NEWCO's expense, except as otherwise
provided herein, the efforts of HARVARD and/or ION commenced prior to the
Sub-License Agreement Date to obtain patents (or reissues, renewals, divisions,
extensions or continuations thereof) on the applications in the United States
and on any issued patents and patent applications in such foreign countries as
are the subject of foreign counterpart prosecution on the Sub-License Agreement
Date. NEWCO and ION may jointly elect to file and obtain patent and other
suitable forms of
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<PAGE>
protection of the Sublicensed Technology in any country at NEWCO's expense.
(b) In the event that NEWCO elects not to pay or to cease paying for
prosecution and maintenance associated with any of the Harvard Patent Rights,
then such patent, patent application, or patent issuing therefrom shall not be
included as part of the sub-license rights granted to NEWCO pursuant to this
Sub-License Agreement and NEWCO shall assign its ownership interest in any such
patent or patent application in Patent Rights to ION. NEWCO agrees to execute
whatever formal assignment documents are required to assign such patent or
patent application in Patent Rights back to ION. In the event that NEWCO fails
to pay for prosecution costs associated with activities that have been jointly
agreed to in Paragraph 6.1 of this Sub-License Agreement, ION may within seven
days written notice to NEWCO, pay the amounts and NEWCO shall be liable to pay
ION for the prosecution costs. In the event NEWCO fails to provide evidence to
ION of payment of maintenance costs associated with any of the Harvard Patent
Rights which have been jointly agreed to in Paragraph 6.1 of this Sub-license
Agreement prior to sixty (60) days in advance of a deadline upon which
intellectual property rights would be irretrievably lost, ION may within seven
(7) days written notice to NEWCO, pay the amounts and NEWCO shall be liable to
pay ION for the maintenance costs.
(c) The decision with regard to selection of patent counsel and any
decisions with respect to filing, prosecution, issuance
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<PAGE>
and maintenance of any patent applications and patents relating to the
Sublicensed Technology shall be made jointly by NEWCO and ION. Both NEWCO and
ION must simultaneously receive copies of all correspondence, draft responses
and filings for each party's review and approval.
(d) ION shall cooperate fully with NEWCO, and shall endeavor to secure
the cooperation of HARVARD in preparation, filing, and prosecution of all United
States and foreign patent applications filed pursuant to this paragraph 6.1,
which cooperation shall include, but not be limited to, execution by HARVARD,
ION, HARVARD's faculty, and all employees of both HARVARD and ION of any and all
such papers and instruments as are necessary or helpful to NEWCO or its
sub-licensees in preparing, filing, and prosecuting all foreign patent
applications.
6.2 If it is believed in good faith that patent rights are infringed by
a third party, the party to this Sub-License Agreement first having knowledge of
such infringement shall promptly notify the other in writing, which notice shall
set forth the facts of such infringement in reasonable detail. NEWCO shall have
the right, but not the obligation, to institute and prosecute at its own expense
any such infringement of the patent rights provided that NEWCO shall not enter
into any settlement agreement or consent judgment without the prior written
consent of ION, which shall not be unreasonably withheld. If ION is deemed to be
an indispensable party, ION agrees to be named as a co-Plaintiff. If HARVARD is
deemed to be an indispensable party,
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<PAGE>
then ION shall endeavor to secure HARVARD's agreement to be named as
co-Plaintiff. If NEWCO fails to bring such action or proceedings within a period
of three (3) months after receiving written notice or otherwise having knowledge
of the infringement or within such time that it intends not to bring such
action, then ION shall have the right, but not the obligation, to prosecute at
their own expense any infringement of the patent rights. Recoveries or
reimbursements from such action shall first be applied to reimburse NEWCO and
ION for litigation costs. Any remaining recoveries or reimbursements shall be
shared equally by NEWCO and ION, after payment of any amounts due to HARVARD
pursuant to the HARVARD/ION License Agreement. A party choosing not to
participate in any such action or proceeding shall, at the request of the other
party, make its employees available to testify, and produce relevant
non-privileged records, papers, information, samples, specimens, and the like.
NEWCO shall reimburse ION for any costs ION and Harvard incur as part of an
action brought by NEWCO or its sublicensees or Affiliates, irrespective of
whether ION or HARVARD become co-plaintiffs. If HARVARD elects not to
participate, ION shall endeavor to secure HARVARD's consent to make its
employees available to testify, and produce relevant non-privileged records,
papers, information, samples, specimens, and the like.
6.3 NEWCO shall defend, indemnify and hold harmless ION and HARVARD
with respect to costs of defense and any and all liabilities resulting from any
suits, countersuits or legal
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<PAGE>
actions of any nature that may be asserted against ION or HARVARD in response to
the filing of an action by NEWCO pursuant to Paragraph 6.2 or as the result of
the filing of an action against NEWCO by a third party. ION shall, at the
request and expense of NEWCO, cooperate with NEWCO in any such third party
action by making its employees available to testify and by producing relevant,
non-privileged records, papers, information, samples, specimens, and the like,
and ION shall endeavor to obtain the same cooperation from HARVARD, if NEWCO
deems it necessary.
VII.
SUB-LICENSEES
7.1 NEWCO shall not grant any rights which are inconsistent with the
rights and obligations of NEWCO hereunder. NEWCO shall give ION prompt
notification of the identity and address of each sub-licensee with whom it
concludes a sub- licensing agreement and shall supply ION with a copy of such
sub- licensing agreement upon request. Any sub-licensing agreement shall include
an audit right by HARVARD of the same scope as provided by Paragraph 5.1 hereof
with respect to ION. No such sub-licensing agreement shall contain any provision
which would cause it to extend beyond the term of this Sub-License Agreement.
In the event that the HARVARD/ION License Agreement terminates for any
reason during the term of the ION/NEWCO Sub- License Agreement, or in the event
that ION and SHEFFIELD become involved in insolvency, dissolution, bankruptcy or
receivership proceedings affecting the operation of their respective
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businesses, or in the event that ION and SHEFFIELD discontinue their businesses
for any reason, then ION shall assign all of ION's rights to HARVARD in this
Sub-License Agreement, and HARVARD shall assume ION's rights and
responsibilities under the ION/NEWCO Sub-License Agreement, provided that (i)
NEWCO is not in default of any of its obligations under this Sub-License
Agreement, (ii) NEWCO assumes all responsibility for the payment of all costs
associated with the filing, prosecution and maintenance of the Licensed Patents
(as defined in the HARVARD/ION License Agreement) which form part of this Sub-
License Agreement (iii) HARVARD would not be obligated to any greater extent
than it is to ION under the HARVARD/ION License Agreement and (iv) HARVARD shall
not receive any rights beyond the rights granted by HARVARD to ION under the
HARVARD/ION License Agreement.
7.2 All sub-licenses granted by NEWCO hereunder shall include a
requirement that the sub-licensee use its reasonable efforts to bring the
subject matter of the sub-license into commercial use as quickly as is
reasonably possible.
VIII.
REPRESENTATIONS AND WARRANTIES
8.1 ION hereby represents and warrants that ION holds, by way of an
exclusive, world-wide license from HARVARD, all rights in and to the Harvard
Patent Rights, and that ION is able to grant the license granted to NEWCO in
this Sub-License Agreement.
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<PAGE>
ION further warrants that as of the date of this Sub-License Agreement, ION has
not licensed the Sublicensed Technology to any party other than NEWCO.
8.2 ION hereby represents that as of the date of this Sub- License
Agreement, neither the United States Government nor any third party has any of
the rights in and to the Sublicensed Technology granted to NEWCO.
8.3 Neither ION, HARVARD or any of their faculty members, directors,
trustees, employees, or agents assume any responsibility for the manufacture,
product specifications, or use or administration of the Sublicensed Technology
or the Sublicensed Products which are manufactured by or for or sold by NEWCO or
by any of its Affiliates or sublicensees. All warranties in connection with the
Sublicensed Technology or Sublicensed Products shall be made by NEWCO (or the
particular NEWCO Affiliate or licensee or sublicensee that is involved) as the
manufacturer, seller, or administrator thereof, and none of such warranties
shall directly or by implication in any way obligate ION, HARVARD or any of
their faculty members, researchers, directors, trustees, officer, employees, or
agents.
8.4 ION MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESSED OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF FITNESS OR MERCHANTABILITY,
REGARDING THE SUBLICENSED PRODUCTS OR SUBLICENSED TECHNOLOGY. ION DOES NOT
WARRANT THE VALIDITY OF THE PATENTS LICENSED UNDER THIS SUB-LICENSE AGREEMENT
AND MAKES NO REPRESENTATION OF ANY KIND REGARDING THE SCOPE OF SUCH PATENTS OR
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THAT ANY OF THE SUBLICENSED TECHNOLOGY CAN BE PRACTICED OR EXPLOITED WITHOUT
INFRINGING OTHER PATENTS.
8.5 The execution, delivery and performance by NEWCO of this
Sub-License Agreement do not contravene or constitute a default under any
provision of applicable law or of any agreement, judgment, injunction, order,
decree or other instrument binding upon NEWCO.
IX
WAIVER AND MODIFICATIONS
9.1 It is understood that this Sub-License Agreement its Appendices,
and the Assignment and License Agreement and its Appendices contain the entire
agreement between the parties relating to the licensing of the Sublicensed
Technology. Neither party shall be bound by any agreement, covenants or
warranties made by its agents or employees, or any other persons, unless such
agreements, covenants and warranties shall be reduced to writing and signed by
an officer of each party. The failure of either of the parties at any time or
times to require performance by the other of any provisions hereof shall in no
manner affect the right of the first mentioned party thereafter to enforce the
same.
9.2 The waiver by either parties of any breach of any provision hereof
shall never be construed to be a waiver of any succeeding breach of such
provision or a waiver of the provision itself.
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X.
TERMINATION
10.1 Unless terminated earlier as hereinafter provided, this
Sub-License Agreement shall extend for the later of the last to expire patent
encompassed in the definition of the Harvard Patent Rights or payment of the
final payment described in Paragraph 4.1, and shall then expire automatically.
10.2 ION may terminate this Sub-License Agreement with a seven (7) day
written notice to NEWCO for NEWCO's failure to make payments when due pursuant
to Paragraph 4.1, provided such breach is not cured within the seven (7) day
notice period. In the event of termination for NEWCO's breach of any payment
due, hereunder, NEWCO shall assign its ownership interest in any Patent Rights
to ION pursuant to the terms and conditions of Paragraphs 9.01 and 2.03 of the
Assignment and License Agreement.
10.3 Except as otherwise provided in Paragraph 10.2 above, in the event
of failure by either party to perform any of the terms, covenants, or provisions
of this Sub-License Agreement, the non-performing party shall have forty-five
(45) days after giving the written notice of such default by the other party to
correct such failure. If such failure is not corrected within the said
forty-five (45) day period after notice as aforesaid, the performing party shall
have the right, at its option, to cancel and terminate this entire Sub-License
Agreement. Either party shall have the right, at its option, to cancel and
terminate this entire Sub-License Agreement in the event the other party shall
become involved in insolvency, dissolution, bankruptcy or
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receivership affecting the operation of its business or in the event that the
other party shall discontinue its business for any reason.
10.4 In the event of termination of this Sub-License Agreement except
pursuant to Paragraph 10.1, all rights licensed by ION to NEWCO hereunder shall
revert to ION.
10.5 NEWCO may terminate this Sub-License Agreement, at any time, with
or without cause, by giving ION ninety (90) days prior written notice.
10.6 No termination of this Sub-License Agreement shall constitute a
termination or a waiver of any rights of either party against the other accruing
at or prior to the time of such termination.
10.7 [Text Omitted]
XI.
ASSIGNABILITY
11.1 This Sub-License Agreement shall be binding upon and shall inure to the
benefit of ION and its assigns and successors in interest, and shall be binding
upon and shall inure to the benefit of NEWCO and the successor to its entire
business, and shall be assignable by NEWCO to NEWCO Affiliates or to HARVARD
pursuant to Paragraph 7.1 herein; however, the Sub-License Agreement shall not
otherwise be assignable or assigned by either party without prior approval by
the other party being first obtained in writing, which approval shall not be
unreasonably withheld.
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XII.
LAW
12.1 This Sub-License Agreement shall be interpreted and construed in
accordance with the Commonwealth of Massachusetts. Anything herein to the
contrary notwithstanding, where interpretation of a patent or patent application
is involved, this Sub-License Agreement is made specifically subject to the
patent legislation of the jurisdiction in which any such patent is granted or
patent application filed.
XIII.
ADDRESSES
13.1 For the purpose of reports and notices herein set forth, the
addresses set forth in the introductory paragraph of this Sub-License Agreement
shall be used unless changed by written notification to the other party.
XIV.
INSURANCE
14.1 (a) During the period of time in which research or development is
conducted on NEWCO's premises or premises under the exclusive control of NEWCO,
and during the period of time in which any clinical trials are being conducted
for Sublicensed Products, NEWCO shall at is sole cost and expense, procure and
maintain policies of comprehensive general liability insurance with an
internationally recognized carrier in amounts not less
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than $[Text Omitted] Canadian per incident and $[Text Omitted] Canadian annual
aggregate. Such insurance policies shall name each of ION and HARVARD as
additional insured parties with the same scope of coverage for each coverage
required for NEWCO.
(b) NEWCO shall provide ION with written evidence of such
insurance upon request of ION. NEWCO shall provide ION with written notice of at
least fifteen (15) days prior to the cancellation, non-renewal or material
change in such insurance; if NEWCO does not obtain replacement insurance
providing comparable coverage within a sixty (60) day period after cancellation
or non-renewal effective as of the date of such non-renewal or material change,
and, if NEWCO is unable to reasonably demonstrate that the net worth of NEWCO
and its Affiliates is such that it is self-insured to the amounts specified
above, ION may within seven days written notice to NEWCO, obtain insurance which
meets the requirements of this Paragraph for the benefit of ION and HARVARD and
NEWCO shall be liable to pay all costs associated with such insurance.
14.2 (a) At such time as any Sublicensed Product, process or service
related to, or developed pursuant to, this Sub-License Agreement is being
commercially distributed or sold (other than for the purposes of obtaining
regulatory approvals) by NEWCO or by a sublicensee or Affiliate of NEWCO, NEWCO
shall procure and maintain policies of comprehensive general liability insurance
in amounts consistent with industry standards but in no event less than $[Text
Omitted] Canadian per incident and $[Text
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Omitted] Canadian annual aggregate and naming of ION and HARVARD as additional
insureds. Such comprehensive general liability insurance shall (i) be with an
internationally recognized carrier, (ii) provide product liability coverage, and
(iii) provide broad form contractual liability coverage for NEWCO's
indemnification under Paragraph 15.2 of this Sub-License Agreement. The minimum
amounts of insurance coverage required under this Paragraph shall not be
construed to create a limit of NEWCO's liability with respect to its
indemnification under Paragraph 15.2 of this Sub-License Agreement.
(b) NEWCO shall provide ION with written evidence of such
insurance upon request of ION. NEWCO shall provide ION with written notice at
least fifteen (15) days prior to the cancellation, non-renewal, or material
change in such insurance. Upon cancellation or non-renewal, NEWCO shall use all
reasonable efforts to obtain replacement insurance providing comparable coverage
as soon as possible. If NEWCO is unable to obtain comparable insurance within a
sixty (60) day period after such cancellation or non-renewal effective as of the
date of such non-renewal or material change, and if NEWCO is unable to
reasonably demonstrate that the net worth of NEWCO and its Affiliates is such
that it is self-insured to the amounts specified above, ION may within seven
days written notice to NEWCO, obtain insurance which meets the requirements of
this Paragraph for the benefit of ION and HARVARD and NEWCO shall be liable to
pay all costs associated with such insurance.
(c) NEWCO shall maintain comprehensive liability insurance
described in Paragraph 14.2 (a) beyond the expiration or termination of this
Sub-License Agreement during (i) the period that any Sublicensed Product,
process or service, relating to, or developed pursuant to, this Sub-License
Agreement is being commercially distributed or sold (other than for the purpose
of obtaining regulatory approvals) by NEWCO, a sublicensee, Affiliate or agent
of NEWCO; and (ii) a reasonable period after the period referred to in (c) (i)
above, which in no event shall be less than fifteen years.
XV.
ADDITIONAL PROVISIONS
15.1 USE OF NAMES. NEWCO agrees that it may not use in any way, nor
permit any other party to use in any way, the names "ION", "Sheffield", "Harvard
College", "Harvard" or any logotypes
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or symbols associated with HARVARD, ION or SHEFFIELD or the names of any
researchers at HARVARD without the prior written consent of ION, in the case of
ION's and SHEFFIELD'S name and ION and HARVARD, in the case of HARVARD's or any
researcher's names; EXCEPT THAT such obligation of NEWCO under this subparagraph
15.1 shall not apply to information (i) that NEWCO determines in its sole
discretion to be necessary and appropriate to satisfy its disclosure and other
obligations under federal, provincial or state law, including but not limited
to, the public disclosures of this Sub-License Agreement pursuant to such
securities laws, or (ii) any and all data or research work product derived or
resulting from the Sublicensed Technology for the sole purpose of complying with
federal, state and provincial laws and regulatory requirements.
15.2 INDEMNIFICATION.
(a) Each party shall notify the other of any claim, lawsuit,
or other proceeding related to the Sublicensed Products. NEWCO shall indemnify,
defend and hold harmless ION and its officers, employees, directors and agents
and HARVARD, its trustees, officers, medical and professional staff, employees,
students and agents, and ION's and HARVARD's respective successors, heirs and
assigns ("the Indemnitees") from and against any and all claims, causes of
action, lawsuits, or other proceedings filed or otherwise instituted against the
Indemnitees relating in any way to (i) marketing, commercialization or other
rights granted under this Sub-License Agreement, (ii) injuries to
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persons or damages which occur on NEWCO's premises or premises under exclusive
control of NEWCO, or (iii) any Sublicensed Product, process or services used or
sold under this Sub-License Agreement; by NEWCO or by a sublicensee, Affiliate
or agent of NEWCO.
(b) NEWCO's indemnification under (a) shall not apply to any liability,
damage, loss or expense to the extent that it is attributable to the negligent
activities, deliberate misrepresentations, or willful misconduct of the
Indemnitees.
(c) NEWCO agrees, at its own expense, to provide attorneys reasonably
acceptable to ION to investigate and/or defend against any actions brought or
filed against any party indemnified hereunder with respect to the subject of
indemnity contained herein, whether or not such actions are rightly brought.
15.3 RESOLUTION OF DISPUTES.
a) In the event of a dispute or disagreement (hereinafter called
"Dispute") arises between the parties in connection with the interpretation of
any provision of this Sub-License Agreement or the compliance or noncompliance
therewith, or the validity or enforceability thereof, or the performance or
nonperformance of either party to the Sub-License Agreement, the following
Dispute resolution process shall be followed by the parties:
(1) A Dispute will be deemed to have arisen upon the delivery of a
written notice by one party to the other describing the Dispute (hereinafter
called the "Dispute Notice"). Upon delivery of the Dispute Notice, the parties
agree to attempt to
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resolve the Dispute in a prompt and expeditious manner, through negotiations
between ION and NEWCO representatives designated by each party to represent them
in said negotiations. Except for the Dispute Notice, all communications between
the parties will be on a without prejudice basis.
(2) If the parties have not been able to resolve the Dispute in a
prompt and expeditious manner within thirty (30) days after delivery of the
Dispute notice, either party may at any time thereafter request by written
notice to the other party that the dispute be escalated to Senior Management.
(3) In the event such a request with written notice is made, each party
shall make available the senior executives specified in the following
subparagraph ("Senior Management") who shall meet within fifteen (15) business
days after such request is made at the Offices of the party which received the
request to attempt to resolve the Dispute.
(4) The Senior Management appointee for each party is as follows:
NEWCO: Corporate Secretary
ION: Corporate Secretary
Either party may change its Senior Management appointee upon
prior written notice to the other party.
b) In case such Dispute is not settled amicably by Senior Management
within thirty (30) days of escalation to Senior Management, such dispute shall
be arbitrated by an Arbitration Board acting in accordance with the rules of
conciliation and
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arbitration of the International Chamber of Commerce in effect on the date of
the Dispute, whose decision shall be final and binding upon the parties. The
Arbitration Board shall consist of the person or persons that the parties may
agree on and in default of agreement within twenty (20) days following the
expiration of the above-mentioned thirty (30) day period, each of the parties in
dispute shall nominate one member to serve on the Arbitration Board and shall
give notice to the other party of the name of its nominee. If one party fails to
give this notice within fifteen (15) days after the other party has done so,
then the member nominated by the other party shall constitute the Arbitration
Board. If each party gives this notice, then the two members so nominated by
agreement shall select a third member who shall be Chairman. If the original two
members are unable to agree upon a third member within thirty (30) days after
the second notice has been given, the Court of Arbitration of the International
Chamber of Commerce shall appoint a third member of the Arbitration Board who
shall be unconditionally accepted by both parties. The place of arbitration for
all Disputes shall be Boston, Massachusetts, U.S.A..
The arbitration hearing shall commence within sixty (60) days after
appointment of the Arbitration Board is done and shall be completed and a final
and binding award rendered in writing within sixty (60) days after the
completion of the hearing unless circumstances warrant delay or the parties
agree to an extension. The decision of the Arbitration Board may be entered in
any
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court of competent jurisdiction and execution entered thereupon forthwith. The
law specified in Paragraph 12.1 above shall apply.
Each party shall bear the cost of preparing its own case. The
Arbitration Board shall have the right to include in the award the prevailing
party's costs of arbitration and reasonable fees of attorneys, accountants,
engineers and other professionals in connection with the arbitration.
The parties, however, will not be required to arbitrate and this
Paragraph will not apply to any Dispute relating to actual or threatened
unauthorized use or disclosure of confidential information or trade secrets.
15.4 NO IMPLIED RIGHTS. No license or right is granted by implication
or otherwise with respect to any patent application or patent owned by either
party hereto except as specifically set forth herein or in the Assignment and
License Agreement.
15.5 USE AND DISCLOSURE OF TECHNICAL INFORMATION. The use and
disclosure of the technical information acquired pursuant to this Sub-License
Agreement and the exercise of the Harvard Patent Rights granted by this
Sub-License Agreement shall be subject to the export, assets, and financial
control regulations of the United States of America, including but without
limitation, restrictions under regulations of the U.S. that may be applicable to
direct or indirect re-exportation of such technical information or of equipment,
products, or services directly produced by use of such technical information.
NEWCO is
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responsible for taking any steps necessary to comply with such regulations.
15.6 PRODUCT LABELING. NEWCO agrees to mark all Sublicensed Products
sold in the United States with all applicable patent numbers. All Sublicensed
Products shipped to or sold in other countries shall be marked in such a manner
as to conform with the patent laws and practices of the country of manufacture
or sale.
15.7 FRENCH LANGUAGE. NEWCO has requested that this Sub- License
Agreement and all related documents be drawn up in the English language with
which request ION agrees. NEWCO a demande que le present contrat ainsi que toute
la documentation d'accompagnement soient rediges en anglais, requete a laquelle
ION consent.
Executed as of the day and year first above written.
1266417 ONTARIO LIMITED
By: /s/ Philippe Lacaille
-------------------------------
Name: Philippe Lacaille
Title: Chairman and President
By: /s/ Kerri Golden
-------------------------------
Name: Kerri Golden
Title: Chief Financial Officer and
Corporate Secretary
ION PHARMACEUTICALS, INC.
By: /s/ Thomas Fitzgerald
-------------------------------
Name: Thomas Fitzgerald
Title: President
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