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Exhibit 10.14
CERTAIN INFORMATION HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2.
CAMBRIDGE BIOTECH CORPORATION
July 15, 1996
BioNebraska, Inc.
3820 NW 46th Street
Lincoln, Nebraska 68524
Attention: Mr. Thomas R. Coolidge
Chairman of the Board and C.E.O.
OT Company
Suite #4
11823 Arbor
Omaha, Nebraska 68144
GRF Corporation
3820 NW 46th Street
Lincoln, Nebraska 68524
Dear Tom:
I would like to confirm our settlement agreement among Cambridge Biotech
Corporation ("CBC"), GRF Corporation ("GRFCO"), OT Company ("OTJV") and
BioNebraska, Inc. ("BN") concerning CBC's interest in GRFCO and related matters.
We have agreed on the following terms that BN will acquire all of CBC's interest
in the Joint Venture Agreement, under date of July 23, 1992 (the "Joint Venture
Agreement") and all of CBC's 38 shares of Class A Stock of GRFCO and that
certain agreements of CBC will be cancelled and terminated. Capitalized terms
used herein, unless otherwise stated, shall have the meanings set forth in the
Joint Venture Agreement.
1. BN shall pay to CBC or its successor or its assign (it is understood
and agreed that CBC's interest in this settlement agreement, including
future royalties and other payments, may be assigned to its successor
under its reorganization plan, Aquila Biopharmaceuticals, Inc.) the sum
of $500,000 at the closing (the "Closing") under this settlement
agreement which shall occur on or before August 15, 1996. At the
Closing, CBC shall deliver to BN, duly endorsed, certificates for 38
shares of Class A GRFCO Common Stock and a duly executed assignment of
all of CBC's interest in the Joint Venture Agreement, free and clear of
all encumbrances and in such form and with such other documentation as
may be reasonably
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required to effectively transfer all of such interests to BN. OTJV and
BN hereby waive any provision of the Joint Venture Agreement including,
without limitation, those contained in Sections 9.2 and 10.1 thereof
which would in any way restrict, condition or make void the transfer
contemplated by this section.
2. CBC (or its successor or assign) will be paid (quarterly) for a period
of twenty years from the date hereof a royalty of [CONFIDENTIAL
TREATMENT REQUESTED] of net sales of commercial growth hormone
releasing factor ("GRF") finished product (pursuant to an NDA, PLA or
similar application form approved by the FDA or equivalent regulatory
authority approval) made by GRFCO, OTJV (or its joint venture partners)
or BN or by any of their collaborators or licensees or any other party
which is an owner or licensee of GRF Technology which has been
discovered, developed or acquired by GRFCO, BN or OTJV or any of their
successors or affiliates. For the purposes of this agreement, GRF
Technology shall be deemed to include all GRF Technology whenever
developed and shall, without limitation, include GRF Technology
developed during the term of the Joint Venture Agreement. A GRF
finished product may also contain one or more other therapeutically
active products; and in such an event the royalty rate shall be
[CONFIDENTIAL TREATMENT REQUESTED] of such net sales. In the case where
GRF is manufactured in bulk by BN (or its contractors) and the full
royalty of [CONFIDENTIAL TREATMENT REQUESTED] is paid, [CONFIDENTIAL
TREATMENT REQUESTED] of the net sales price of the GRF finished product
will be deducted before the royalty is calculated. All royalty payments
due hereunder shall be made within 60 days after the close of each
calendar quarter when earned and each such payment shall be accompanied
by a report, prepared by BN or GRFCO, setting forth INTER ALIA the
applicable total sales of GRF finished product for the quarter in
question, the amount of any "license fee" payable to CBC or its
successor or assign pursuant to paragraph 3 hereof, the calculation of
the royalty or license fee being paid at the time and any other
information, directly pertinent to the determination of the royalty or
license fee, as may be reasonably requested by the recipient. The
recipient at its expense shall have the right, upon ten day's notice
and not more than once annually, to have its independent auditors
review at the premises of BN, GRFCO or OTJV all the books and records
which are directly relevant to and which form the basis for the royalty
or license fee calculations and the quarterly reports made hereunder.
To the extent that GRF final product sales are carried out by one or
more collaborating entities other than BN, GRFCO or OTJV, which are not
under the control of such companies, BN, GRFCO and OTJV shall use their
respective best efforts to obtain access for such auditor to the
pertinent books and records of each such entity. Such independent
auditor shall be responsible for maintaining the confidentiality of the
information obtained from any such review and will execute an
appropriate confidentiality agreement in this connection.
3. CBC (or its successor or assign) will be paid on a quarterly basis
[CONFIDENTIAL TREATMENT REQUESTED] of all license fees received by
GRFCO, OTJV or BN or their successors or affiliates which are paid
relative to the licensing of GRF Technology which has been or shall be
discovered, developed or acquired by GRFCO, BN or OTJV or any of their
successors or affiliates prior to July 15, 2001. The term "license fee"
shall include whether characterized as a license fee or otherwise,
without limitation, any initial lump sum payment made for the
acquisition of rights to GRF Technology and/or the rights to distribute
GRF
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finished products and/or any amounts paid for such an acquisition or
retention of rights upon the happening of prescribed subsequent events
or milestones. The term "license fee" shall not include payments
received to the extent that such payments are reimbursements for costs
for research and development activities.
4. GRFCO, BN or OTJV, or any of their respective shareholders, successors
or assigns, shall have the right without limitation to purchase, buy
out and fully terminate all royalty and license fee payments, and all
other rights and obligations of any nature whatever, which are
conferred on CBC or its successors or assigns or which may be owed to
or payable to CBC and its successors and assigns under the provisions
of this settlement agreement by any and all of GRFCO, BN or OTJV (or
any of their successors or assigns), by making a cash payment (in the
form of a bank cheque or wire transfer) to CBC (or its successor or
assign owning such rights) of [CONFIDENTIAL TREATMENT REQUESTED], if
made on or before December 31, 2002, or [CONFIDENTIAL TREATMENT
REQUESTED], if made between January 1, 2003 and the close of business
on December 31, 2006. Upon completion of any such cash payment, CBC or
its successors or assigns, as the case may be, shall deliver such
documentation in respect to the termination of all such rights and
obligations under this agreement as well as the termination of this
agreement as the entity making such payment may reasonably require.
5. Effective as of the Closing under this settlement agreement, and except
as otherwise specifically provided in this agreement, BN, CBC (and its
successor or assign, as applicable), OTJV and GRFCO, each for itself
and its successors in interest, hereby release each and every other
such entity from all claims of any nature which were or could have been
asserted by any one such entity against another arising out of or
relating to the negotiation, execution or implementation of the Joint
Venture Agreement. At the Closing, OTJV, BN, GRFCO and CBC (and its
successor or assign) shall deliver such other documentation as may be
reasonably required, respectively, by CBC, OTJV, BN or GRFCO to further
evidence such release.
6. Effective as of the Closing under this settlement agreement, GRFCO, BN
and OTJV agree to the termination and release of any and all
obligations or responsibilities of CBC, and its successors and assigns,
which had or may have existed on or prior to this date and at any time
in the future, relative to research on, development, communicating or
licensing to GRFCO of any technology for the non-injection delivery of
GRF, whether pursuant to the Joint Venture Agreement, the CBC License
Agreement entered into in conjunction with the Joint Venture Agreement
or otherwise. GRFCO, BN, OTJV and CBC hereby agree that effective as of
the Closing, the CBC License Agreement and the CBC Option and
Contribution Agreement are hereby terminated and shall be void and
without recourse to any party. Without limiting the generality of the
foregoing, GRFCO shall no longer have any rights to CBC Patents and
Know-How, as defined in the CBC License Agreement. At the Closing,
GRFCO, OTJV and BN shall deliver such other documentation as may be
reasonably required by CBC to evidence the termination of such
agreements.
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7. OTJV, BN and GRFCO hereby jointly and severally represent that they
have informed CBC of all material matters pertaining to the Pilot Study
and the development and marketing of GRF Technology and have provided
CBC with all data and test results which would have a material bearing
upon CBC's evaluation of the GRF Technology and the transfer of its
joint venture interest pursuant to the terms hereof, including any
discussions by representatives or agents of OTJV, BN or GRFCO of
prospective funding sources for further development or marketing of GRF
Technology.
8. The foregoing provisions of this settlement agreement not withstanding,
CBC on behalf of itself and its successors and assigns shall safeguard
and maintain all proprietary and confidential information relative to
GRF Technology which it has heretofore received under the Joint Venture
Agreement and which it and/or its successors and assigns may hereafter
receive in connection with this agreement in accordance with the
provisions of Article VII of the Joint Venture Agreement, which
provisions for this purpose shall be incorporated in this agreement by
reference.
9. Subject to and contingent upon CBC presenting for approval this
settlement agreement by the Bankruptcy Court as part of the CBC Plan of
Reorganization, BN, and OTJV each agrees to withdraw its objections
before or at the hearing on July 15, 1996 relative to the confirmation
of such Plan and to the assumption and assignment by CBC of the Joint
Venture Agreement (as changed by the provisions hereof) and this
settlement agreement.
If these terms and conditions are agreeable, please sign and return one copy of
this settlement agreement, which shall constitute a binding agreement among the
respective parties hereto, subject only to approval of the Bankruptcy Court.
CAMBRIDGE BIOTECH CORPORATION ("CBC")
/s/ Alison Taunton-Rigby
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Alison Taunton-Rigby
President and Chief Executive Officer,
duly authorized
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Agreed and accepted as of the above date by:
BIONEBRASKA, INC. ("BN")
/s/ Thomas R. Coolidge
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Thomas R. Coolidge
Chairman of the Board and CEO,
duly authorized
OT COMPANY ("OTJV")
/s/ Thomas R. Coolidge
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Thomas R. Coolidge
President, duly authorized
GRF CORPORATION ("GRFCO")
/s/ Thomas R. Coolidge
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Thomas R. Coolidge
President, duly authorized
