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Exhibit 10.2
RESEARCH AND DEVELOPMENT AGREEMENT
This Research and Development Agreement (the "Agreement") is made as of the
31st day of March, 1998 by and between BioChem Pharma Inc., a Canadian
corporation ("BioChem"), and CliniChem Development Inc., a Canadian corporation
("CliniChem").
RECITALS
A. CliniChem has been formed for the purpose of (i) conducting research
and development of potential human therapeutic products primarily for the
treatment of cancer and HIV infection and vaccine products for the prevention of
certain infectious diseases, including products using BioChem Technology (as
defined below), and (ii) commercializing such products.
B. BioChem is engaged in the research, development and marketing of
therapeutic products and the research, development, manufacturing and marketing
of vaccine and diagnostic products for a wide range of infectious and other
diseases.
C. BioChem and certain BioChem Affiliates have granted CliniChem a
license to use BioChem Technology (as defined below) solely for the purposes set
forth herein and in the Technology License Agreement and the Product Option
Agreement (each as defined below).
D. CliniChem desires to engage BioChem to perform, on behalf of
CliniChem, research and development and related activities in connection with
the CliniChem Programs (as defined below).
NOW, THEREFORE, in consideration of the various premises and undertakings
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
For the purposes of this Agreement, the following terms shall have the
meanings set forth below:
1.1 "Acquired Product" shall mean any product for which BioChem or a
BioChem Affiliate has exercised the Product Option granted pursuant to the
Product Option Agreement.
1.2 "Affiliate" shall mean a corporation or any other entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the designated party. "Control"
shall mean ownership of shares to which are attached more than fifty percent
(50%) of the votes that may be cast for the election of directors in the case of
a corporation,
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and at least fifty percent (50%) of the interests in profits in the case of
a business entity other than a corporation. BioChem and CliniChem shall not be
considered Affiliates of each other.
1.3 "Available Funds" shall mean, as of any date of determination, all of
the funds contributed or paid to CliniChem by BioChem or a BioChem Affiliate,
plus any investment income earned thereon, less (a) the aggregate amount of all
Research and Development Costs paid or incurred by CliniChem as of such date,
(b) CliniChem's aggregate reasonable ongoing administrative expenses and income
taxes paid (less income taxes refunded) or incurred as of such date, (c) the
aggregate amount of all Technology Fee payments paid or incurred by CliniChem as
of such date and (d) the aggregate amount of all payments paid or incurred by
CliniChem under the Services Agreement.
1.4 "BioChem Technology" shall mean those Proprietary Rights licensed
and/or sublicensed by BioChem and/or a BioChem Affiliate to CliniChem pursuant
to the Technology License Agreement.
1.5 "CliniChem Product" shall mean any human therapeutic or vaccine
product developed according to the terms of this Agreement and pursuant to the
CliniChem Programs in the applicable Fields of Use.
1.6 "CliniChem Programs" shall mean any of the therapeutic and vaccine
product development programs listed in Exhibit A in the applicable Fields of Use
indicated in such Exhibit A, and any additional or modified development programs
recommended by BioChem and accepted by CliniChem's Board of Directors for
development pursuant to this Agreement.
1.7 "Confidential Information" shall mean all information received by
one party with respect to the research, intellectual property or business of the
other and it shall include, without limiting the generality of the foregoing,
the BioChem Technology, all documents, data and other technical information,
such as know-how, formulae, processes, models, manufacturing techniques,
research projects, information management systems and software as well as
information relating to the management and financial affairs of such party, such
as figures relating to profits, markets, sales, business, marketing and
development plans, client lists, supplier lists and information of a similar
nature.
1.8 "Developed Technology" shall mean Proprietary Rights that (a) are
first generated, conceived or reduced to practice, as the case may be, by
BioChem, a BioChem Affiliate or by any third party in the course of performing
activities undertaken pursuant to this Agreement or (b) are acquired from a
third party by BioChem or a BioChem Affiliate during the term of this Agreement
for use, in whole or in part, in the conduct of the CliniChem Programs or the
commercialization of the CliniChem Products.
1.9 "Development Assets" shall mean any clinical supplies, materials
and other tangible assets purchased, manufactured or developed for use in any
CliniChem Program pursuant to approved Work Plans.
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1.10 "Distribution" shall mean the distribution by BioChem as a
dividend-in-kind of all of the issued and outstanding Class A Common Shares in
the share capital of CliniChem to the holders of record of Common Shares of
BioChem on the date selected as of the record date by the Board of Directors of
BioChem.
1.11 "Distribution Agreement" shall mean the Distribution Agreement
dated as of the date hereof by and between BioChem and CliniChem, as amended
from time to time.
1.12 "Distribution Date" shall mean the proposed date of effecting the
Distribution.
1.13 "FDA" shall mean the United States Food and Drug Administration or any
successor agency whose clearance is necessary to market a CliniChem Product in
the United States.
1.14 "Field of Use" shall mean the treatment of a particular disease or, in
the case of a vaccine, vaccination against a particular bacterium. The
applicable Field of Use for each CliniChem Program is set forth in Exhibit A.
1.15 "Major Market Country" shall mean any one of the following
countries: Canada, France, Germany, Italy, Japan, the United Kingdom, or the
United States.
1.16 "Product Option" shall mean the option granted to BioChem and certain
BioChem Affiliates pursuant to the Product Option Agreement.
1.17 "Product Option Agreement" shall mean the Product Option Agreement
dated as of the date hereof by and between BioChem, certain BioChem Affiliates
and CliniChem, as amended from time to time.
1.18 "Proprietary Rights" shall mean data, inventions, information,
processes, know-how and trade secrets, and patents or patent applications
claiming any of the foregoing, owned by, licensed to or controlled by a person
and which such person has the right to license or sublicense without the consent
of any third party and without incurring additional liability to any third
party. Proprietary Rights shall not include trademarks or copyrights.
1.19 "Purchase Option" shall mean that certain option contained in the
Articles of Incorporation of CliniChem, as amended or restated from time to
time, pursuant to which BioChem (as the holder of the majority of the
outstanding Class B Common Shares in the share capital of CliniChem) has the
right to acquire all (but not less than all) of the outstanding Class A Common
Shares in the share capital of CliniChem.
1.20 "Research and Development Costs" shall mean the fully-burdened cost of
activities undertaken pursuant to this Agreement plus five percent (5%) of such
costs, including research expenses, general and administrative expenses, capital
asset costs, costs for licenses or acquisition of technology, products or
therapeutic agents from third parties for the CliniChem Programs and costs of
third-party collaborations or contract research undertaken for the CliniChem
Programs, determined in accordance with Exhibit B hereto.
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1.21 "Services Agreement" shall mean the Services Agreement dated as of
the date hereof by and between BioChem and CliniChem, as amended from time to
time.
1.22 "Technology Fee" shall mean those payments to be made by CliniChem
to BioChem or a BioChem Affiliate pursuant to the Technology License Agreement.
1.23 "Technology License Agreement" shall mean the Technology License
Agreement dated as of the date hereof by and between BioChem, certain BioChem
Affiliates and CliniChem, as amended from time to time.
1.24 "Work Plan" shall mean a work plan for research and development
under a CliniChem Program, including cost estimates.
2. DEVELOPMENT SERVICES.
2.1 ENGAGEMENT OF BIOCHEM. CliniChem hereby engages BioChem to perform
or cause to be performed research, development and related activities in
connection with the CliniChem Programs in accordance with the Work Plans
accepted pursuant to Section 2.3, and to undertake such other activities as the
parties may agree, and BioChem hereby accepts such engagement.
2.2 PRODUCT DEVELOPMENT -- BIOCHEM OBLIGATIONS. BioChem shall diligently
perform or cause to be performed those activities necessary to execute the Work
Plans accepted by CliniChem pursuant to Section 2.3, as amended from time to
time. In connection therewith, BioChem shall make available such of its
scientific and other personnel, and shall take such steps as it deems reasonably
necessary in order to perform its obligations in accordance with the terms
hereof, but BioChem is not obligated to devote any specific amount of time or
resources to activities hereunder. BioChem shall have full discretion to
determine from time to time the allocation of resources of BioChem (facilities,
equipment and personnel) to be made available for activities hereunder, and to
determine from time to time the allocation of resources of BioChem among such
activities. CliniChem understands, acknowledges and agrees that BioChem may
devote substantial time and resources to research and development activities for
other persons and for its own account, and as a result, BioChem may develop and
commercialize, or have commercialized, products competitive with CliniChem
Products.
2.3 WORK PLANS; MEDIATION OF DISPUTES.
(a) Throughout the term of this Agreement, BioChem shall propose Work
Plans for the CliniChem Programs and CliniChem shall have the right to approve
or reject all or any portion of a proposed Work Plan. In the event of
rejection, in whole or in part, of a Work Plan, CliniChem shall cooperate with
BioChem in order to establish Work Plans that are in conformity with BioChem's
obligations pursuant to pre-existing agreements with third parties and
reasonably acceptable to both parties as soon as practicable. Prior to the first
board meeting of the Board of Directors of CliniChem, BioChem shall provide
CliniChem with a proposed Work Plan and a lifetime plan for continued
development under each of the initial CliniChem Programs.
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The Board of Directors of CliniChem shall notify BioChem in writing of its
acceptance (in whole or in part) or rejection (in whole or in part) thereof.
(b) The parties understand and acknowledge that it is difficult to
predict accurately the activities that will be necessary to execute any Work
Plan, including the Research and Development Costs thereof, and that significant
uncertainties exist in any product development effort. CliniChem and BioChem
shall cooperate in good faith to devise mutually acceptable Work Plans for the
CliniChem Programs. BioChem and CliniChem shall review each such Work Plan from
time to time, and in any event no less often than at the end of each stage of
research and development, and shall revise each Work Plan as appropriate such
that each Work Plan remains a best estimate of the work to be performed to
complete the development objectives identified therein and of the Research and
Development Costs thereunder. The parties may also mutually determine to
discontinue any and all Work Plans with respect to a CliniChem Program.
Except as set forth in Section 2.3(c), CliniChem shall not be obligated to
pay Research and Development Costs in excess of those provided for in approved
Work Plans, and BioChem shall not be obligated to perform work which would
result in Research and Development Costs exceeding those in approved Work Plans.
(c) The parties recognize that BONA FIDE disputes may arise from time
to time in connection with devising mutually-acceptable Work Plans for the
CliniChem Programs. If CliniChem's Board of Directors accepts or rejects a Work
Plan in part, BioChem may either (i) perform the activities under the Work Plan
as approved by CliniChem or (ii) propose a modified Work Plan to CliniChem for
approval. Notwithstanding the foregoing, in the event CliniChem's Board of
Directors rejects in whole or in substantial part three consecutive Work Plans
proposed by BioChem with respect to a particular CliniChem Program, BioChem and
CliniChem shall resolve the dispute in accordance with the provisions of Section
12.3 of this Agreement. Prior to the resolution of any such dispute, BioChem
shall have the right to perform the work specified under its most recently
proposed Work Plan and CliniChem shall be obligated to pay the Research and
Development Costs incurred in connection therewith.
2.4 CONSULTATION. CliniChem's Board of Directors shall consult with
BioChem and shall review with BioChem from time to time BioChem's ongoing
activities on behalf of CliniChem and the progress toward completion of the
activities under the Work Plans for each CliniChem Program, including without
limitation, the status in each country for each CliniChem Product for which
marketing clearance is being sought.
2.5 THIRD PARTY RIGHTS. Subject to the terms and conditions of this
Agreement, BioChem shall have discretion to attempt to obtain any Proprietary
Rights from any third party that BioChem reasonably determines to be necessary
or useful to conduct any CliniChem Program or related activities pursuant to any
approved Work Plan. In addition, BioChem shall have the right to conduct its
research and development activities under this Agreement in connection with the
CliniChem Programs with BioChem Affiliates and third parties, including entering
into, on CliniChem's behalf, research and development agreements. Proprietary
Rights acquired by or licensed to BioChem as a result of the foregoing shall be
included in the Developed Technology. The costs of obtaining any
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such Proprietary Rights or conducting such research and development
activities shall be included in the calculation of Research and Development
Costs paid by CliniChem pursuant to this Agreement.
2.6 DEVELOPMENT ASSETS. BioChem shall own and have the right to use
any Development Assets.
2.7 NO USE OF AVAILABLE FUNDS. After such time as the Product Option
for a CliniChem Product in a country expires unexercised as to such country, no
additional Available Funds shall be expended for the research or development of
such CliniChem Product for sale in such country without the consent of the Board
of Directors of CliniChem.
2.8 NOTICES. BioChem shall notify CliniChem within five (5) business
days after BioChem receives notice of clearance to market any CliniChem Product
in any country. BioChem shall promptly notify CliniChem of the first commercial
sale of any CliniChem Product or Developed Technology Product in any country.
3. PAYMENT FOR SERVICES; TIMING OF PAYMENTS.
3.1 PAYMENT OF RESEARCH AND DEVELOPMENT COSTS. In consideration of the
work to be carried out by BioChem hereunder, CliniChem shall make payments to
BioChem or its Affiliates for all Research and Development Costs incurred by
BioChem or its Affiliates in accordance with accepted Work Plans up to the
maximum amount of Available Funds. CliniChem shall also make payments to
BioChem for Research and Development Costs with respect to the initial CliniChem
Programs which are incurred from January 1, 1998 through the date of the
Distribution, in accordance with the CliniChem approved Work Plans therefor in
effect as of the date hereof.
3.2 TIMING OF PAYMENTS. CliniChem shall pay to BioChem monthly, in
arrears, all such Research and Development Costs incurred by BioChem and its
Affiliates during the preceding calendar month, within ten (10) days after
BioChem's invoice therefor.
3.3 SUFFICIENCY OF FUNDS. Neither CliniChem nor BioChem makes any
warranty, express or implied, that the Available Funds will be sufficient to
complete the development under any or all of the CliniChem Programs or the other
activities contemplated hereunder.
3.4 LATE PAYMENTS. Any payments due hereunder that are not made when due
shall accrue interest at the lesser of ten percent (10%) per annum or the
maximum rate as may be allowed by law, beginning on the date when BioChem
notifies CliniChem that such payments are overdue.
4. REPORTS AND RECORDS.
4.1 RESEARCH AND DEVELOPMENT PROGRAM REPORTS. Within forty-five (45) days
after the end of each calendar quarter, BioChem shall provide to CliniChem a
report setting forth (a) a summary of the work performed hereunder by BioChem
and its employees and agents during such
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quarter; and (b) the total Research and Development Costs of such
activities during such quarter and cumulatively to date, for each Work Plan.
4.2 AVAILABLE FUNDS STATEMENT. Within a reasonable time after the end of
each calendar quarter, CliniChem shall provide to BioChem a statement setting
forth, as of the end of such quarter, the Available Funds remaining.
4.3 RECORDS; REVIEW BY AUDITORS. Each of CliniChem and BioChem shall
keep and maintain, in accordance with Canadian generally accepted accounting
principles, proper and complete records and books of account documenting all
Research and Development Costs, in the case of BioChem, and remaining Available
Funds, in the case of CliniChem. Each of CliniChem and BioChem shall have the
right, once in each calendar year during regular business hours and upon
reasonable notice to the other party, and at its own expense, to examine or to
have examined by its auditors, pertinent books and records of one another, for
the sole purpose of determining the correctness of amounts invoiced, paid or due
under this Agreement and the application of the Available Funds by CliniChem.
Such examination shall take place not later than two (2) years following the
year in question, and only one examination may take place with respect to any
period as to which such books and records are examined.
5. TECHNOLOGY LICENSED FOR DEVELOPMENT.
5.1 LICENSE TO USE BIOCHEM TECHNOLOGY. CliniChem hereby grants to BioChem
a sublicense (with the right to grant further sublicenses as necessary) to use
the BioChem Technology solely for the purpose of conducting the activities
contemplated hereunder (to the extent such license is necessary for the conduct
of such activities under applicable law).
5.2 TERMINATION OF LICENSE. Termination of the license granted to
CliniChem under the Technology License Agreement shall automatically terminate
any sublicense of the BioChem Technology granted pursuant to Section 5.1.
6. OWNERSHIP OF TECHNOLOGY.
6.1 OWNERSHIP OF DEVELOPED TECHNOLOGY. Unless BioChem and CliniChem
agree otherwise and except as set forth in Section 2.2 of the Technology License
Agreement, all Developed Technology shall be owned by BioChem or a BioChem
Affiliate (as determined by BioChem in its sole discretion) and exclusively
licensed to CliniChem on a worldwide basis with the right to sublicense subject
to the terms and conditions of the Technology License Agreement, subject to the
Product Option and limited to the applicable Field of Use.
6.2 PATENTS COVERING DEVELOPED TECHNOLOGY. BioChem shall determine
whether and to what extent to seek and maintain patents covering any Developed
Technology. Any such patents and applications therefor shall be owned by
BioChem or a BioChem Affiliate. In the event that BioChem declines to seek
patent protection for any Developed Technology, CliniChem shall not have the
right to do so. BioChem or a BioChem Affiliate shall pay all of the costs of
obtaining and maintaining any such patents during the term of this Agreement.
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7. ACCESS TO INFORMATION; CONFIDENTIALITY.
7.1 ACCESS. Subject to the terms of this Agreement, each party shall be
permitted access to the premises of the other during normal business hours,
solely for the purpose of monitoring the progress of activities under this
Agreement. Each party shall keep records and notebooks documenting the
experiments performed during its work under this Agreement and the results
thereof. Such documentation shall be available during normal business hours for
inspection by the other party. In addition, each party shall provide to the
other such other information relating to the activities carried out under this
Agreement as reasonably may be requested.
7.2 THIRD PARTIES. BioChem shall use reasonable efforts to obtain from
each third party engaged pursuant to Section 2.5 access similar to that to be
provided pursuant to Section 7.1, for the benefit of both CliniChem and BioChem.
7.3 CONFIDENTIALITY. During the term of this Agreement and for a
period of ten (10) years following its termination, each party shall maintain in
confidence all Proprietary Rights and any Confidential Information of the other;
provided, however, that nothing contained herein shall prevent either party from
disclosing any Proprietary Rights or any Confidential Information to the extent
that such Proprietary Rights or Confidential Information (a) are required to be
disclosed in connection with conducting the CliniChem Programs, securing
necessary governmental authorization for the marketing of CliniChem Products, or
directly or indirectly making, using or selling CliniChem Products, as permitted
or provided for in the agreements between the parties, (b) are required to be
disclosed by law for the purpose of complying with governmental regulations, (c)
are disclosed to sublicensees, distributors or marketing partners or potential
sublicensees, distributors or marketing partners permitted under the agreements
between the parties in connection with the proposed or actual research,
development, manufacturing or marketing of CliniChem Products, subject to
similar obligations of confidentiality on the part of such third parties as
required by the agreements between the parties, (d) are lawfully disclosed to
the recipient by a third party having the right to disclose such information to
the recipient, or (e) either before or after the time of disclosure to the
recipient, become known to the public other than by an unauthorized act or
omission of the recipient or any of the recipient's employees or agents;
provided further that, CliniChem may disclose BioChem Proprietary Rights or
Confidential Information to third parties only in accordance with the provisions
of this Section 7.3 and Section 8.1 hereof and in accordance with the provisions
of the Technology License Agreement. The obligations of each of the parties
pursuant to this Section 7.3 shall survive the termination of this Agreement for
any reason. Any breach of this Section 7.3 may result in irreparable harm, and
in the event of a breach, the aggrieved party shall be entitled to seek
injunctive relief (without the need to post a bond) in addition to any other
remedies available at law or in equity.
8. PUBLIC DISCLOSURE.
8.1 PUBLIC DISCLOSURE. The parties will work together with respect to
public statements disclosing the status of and results under the CliniChem
Programs and related matters. Except to the extent previously disclosed
pursuant to the terms hereof, neither party shall disclose to third parties nor
originate any publicity, news release or public announcement, written or oral,
whether
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to the public, the press, stockholders or otherwise, referring to
activities conducted, or the parties' performance under, this Agreement, except
such announcements, as in the opinion of the counsel for the party making such
announcement, are required by law, including Canadian and United States
securities laws, rules or regulations, without the prior written consent of the
other party. If a party decides to make an announcement it believes to be
required by law with respect to this Agreement, it will give the other party
such notice as is reasonably practicable and an opportunity to comment upon the
announcement.
9. COVENANTS
9.1 USE OF AVAILABLE FUNDS. Unless BioChem agrees otherwise, CliniChem
agrees to expend the Available Funds only for activities undertaken pursuant to
this Agreement, including the payments of fees to consultants or advisors in
connection with the CliniChem Programs, and for payments due to BioChem or a
BioChem Affiliate under this Agreement, the Technology License Agreement and the
Services Agreement. Pending application of all Available Funds as set forth
above, Available Funds shall be invested in interest-bearing, investment-grade
securities.
9.2 NEGATIVE PLEDGE. CliniChem shall not create, incur, assume or
suffer to exist any lien upon or with respect to, or otherwise take any action
with respect to, the Available Funds so as to prevent or interfere with full
expenditure of such funds for activities under this Agreement in accordance with
Section 9.1.
9.3 NO INCONSISTENT AGREEMENTS. Without the written consent of
BioChem, CliniChem shall not enter into any agreement or arrangement that is in
any way inconsistent with or that could adversely affect BioChem Technology or
BioChem's rights under any agreement between BioChem and CliniChem, or that is
in any way inconsistent with or that could adversely affect BioChem's rights as
holder of the Class B Common Shares of CliniChem. CliniChem must include in any
agreement between CliniChem and a third party relating to CliniChem Products
and/or activities hereunder such provisions as BioChem reasonably deems
appropriate to protect BioChem Technology and to protect BioChem's rights under
any agreement between BioChem and CliniChem and as a holder of the Class B
Common Shares of CliniChem (including BioChem's and certain BioChem Affiliates'
rights under the Purchase Option).
10. TERM AND TERMINATION.
10.1 TERM. This Agreement shall become effective on the Distribution
Date (the "Effective Date") and shall continue thereafter until automatically
terminated upon exercise or expiration of the Purchase Option or termination
pursuant to Section 10.2.
10.2 OTHER TERMINATION. Either party may, in its discretion, terminate
by written notice this Agreement in the event that the other party:
(a) breaches any material obligation hereunder or under the
Product Option Agreement, and such breach continues for a period of sixty (60)
days after written notice thereof by the terminating party to the other party;
or
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(b) enters into any proceeding, whether voluntary or involuntary,
in bankruptcy, reorganization of creditor's rights or similar arrangement for
the benefit of its creditors.
11. FORCE MAJEURE.
11.1 FORCE MAJEURE. Neither party to this Agreement shall be liable for
failure or delay in the performance of any of its obligations hereunder, if such
failure or delay is due to causes beyond its reasonable control including,
without limitation, acts of God, earthquakes, fires, strikes, acts of war, or
intervention of any governmental authority, but any such delay or failure shall
be remedied by such party as soon as possible after the removal of the cause of
such failure or delay.
12. MISCELLANEOUS.
12.1 AMENDMENT AND WAIVER. This Agreement may be amended and any
provision of this Agreement may be waived; provided that any such amendment or
waiver shall be binding upon a party only if set forth in a writing executed by
authorized representatives of such party and referring specifically to the
provision alleged to have been amended or waived. A waiver by any party hereto
of any terms and conditions of this Agreement in any one instance shall not be
deemed or construed to be a waiver of such terms and conditions for any similar
instance in the future. No course of dealing between or among any persons
having any interest in this Agreement shall be deemed effective to modify, amend
or discharge any part of this Agreement or any rights or obligations of any
person under or by reason of this Agreement.
12.2 ASSIGNMENT. Neither party may assign its rights and obligations
hereunder without the prior written consent of the other party, which consent
may not be unreasonably withheld; provided, however, that BioChem may assign
such rights and obligations hereunder to an Affiliate of BioChem or to any
person or entity with which BioChem is merged or consolidated or which acquires
all or substantially all of the assets or issued and outstanding shares in the
share capital of BioChem.
12.3 DISPUTE RESOLUTION. Any controversy, claim or dispute arising out
of or relating to this Agreement, including the interpretation, breach,
termination or invalidity thereof (a "Dispute") shall be definitively settled by
arbitration, in accordance with the provisions on arbitration found in the Code
of Civil Procedure of Quebec (the "CCP").
Prior to resorting to arbitration, the parties shall refer the Dispute
to the Chairman of the Board of BioChem and a director of CliniChem who has not
been appointed by BioChem for attempted resolution of such Dispute. The party
wishing to initiate negotiations shall send to the other party a notice of
negotiation, briefly identifying the object of the Dispute. If the parties fail
to resolve a Dispute within thirty (30) days of receipt by the second party of
such notice of negotiation, each party shall then have the right to refer such
Dispute to arbitration, unless the parties agree in writing to extend such
thirty (30) day negotiation period. The seat of arbitration shall be in
Montreal and the proceedings shall be in English.
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There shall be three (3) arbitrators. Each party shall appoint one
(1) arbitrator, and the two (2) arbitrators thus appointed shall designate the
third arbitrator within fifteen (15) days of the appointment of the second
arbitrator. The third arbitrator shall serve as President of the arbitral
tribunal. Should a party fail to designate an arbitrator within the delay
specified in the applicable provisions of the CCP, such arbitrator shall be
appointed by the highest ranking officer of the Quebec National and
International Commercial Arbitration Centre ("Centre"). The two (2) arbitrators
thus appointed shall designate the third arbitrator within fifteen (15) days of
the appointment of the second arbitrator, failing which the third arbitrator
shall be designated by the Centre.
The arbitral tribunal shall render any final award or decision within
thirty (30) days following the completion of evidence and argument on
substantive issues in dispute between the parties. The parties recognize and
agree that any award rendered by the arbitral tribunal shall be final and
binding on the parties who hereby expressly waive, to the fullest extent
permitted by law, all rights of appeal or recourse to any court. The
apportionment of costs of any arbitration pursuant to this agreement shall be
left to the discretion of the arbitral tribunal. Nothing in this article has
the effect, or should be interpreted as having the effect of limiting the right
of one of the parties to obtain, from a common law court, a seizure before
judgment, an injunction or any other extraordinary recourse as defined by the
CCP.
12.4 APPLICATIONS FOR CREDITS. CliniChem authorizes BioChem or any
BioChem Affiliate which performs all or part of the research and development
activities contemplated by this Agreement to enter into research contracts with
third parties in its own name, but on the behalf of CliniChem as agent, and
apply in its own name, but on the behalf of CliniChem as agent, for any and all
governmental subsidies, credits (including tax credits) or any other incentives
related to such research and development activities.
12.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute this Agreement.
12.6 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Province of Quebec and the federal laws of
Canada applicable therein, and shall be treated in all respects as a Quebec
contract.
12.7 HEADINGS. The section headings contained in sections of this
Agreement are included for convenience only and form no part of the Agreement
between the parties.
12.8 NOTICES. Notices required under this Agreement shall be in writing
and sent by registered or certified mail, postage prepaid, or by facsimile and
confirmed by registered or certified mail, postage prepaid, and addressed as
follows:
IF TO BIOCHEM:
BioChem Pharma Inc.
275 Armand-Frappier Blvd.
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Laval, Quebec, Canada H7V 4A7
Facsimile: (514) 978-7994
Attention: Vice-President Legal Affairs and Corporate Secretary
IF TO CLINICHEM:
CliniChem Development Inc.
275 Armand-Frappier Blvd.
Laval, Quebec, Canada H7V 4A7
Facsimile: (514) 978-7994
Attention: General Counsel and Secretary
All notices shall be deemed to be effective upon receipt unless such notice
is delivered or transmitted by facsimile, in which case, if it is delivered or
transmitted before 4:00 PM on a business day, it shall be deemed to have been
given and received on such day; in any other case, it will be deemed to have
been given and received on the first business day following the day on which it
is delivered or transmitted by facsimile. Either party may change the address
at which notice is to be received by written notice pursuant to this
Section 12.8.
12.9 SEVERABILITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid or unenforceable, it shall be
modified, if possible, to the minimum extent necessary to make it valid and
enforceable or, if such modification is not possible, it shall be stricken and
the remaining provisions shall remain in full force and effect.
12.10 RELATIONSHIP OF THE PARTIES. For purposes of this Agreement,
CliniChem and BioChem shall be deemed to be independent contractors, and
anything in this Agreement to the contrary notwithstanding, nothing herein shall
be deemed to constitute CliniChem and BioChem as partners, joint venturers,
co-owners, an association or any entity separate and apart from each party
itself, nor shall this Agreement constitute any party hereto an employee or
agent, legal or otherwise, of the other party for any purposes whatsoever.
Neither party hereto is authorized to make any statements or representations on
behalf of the other party or in any way obligate the other party, except as
expressly authorized in writing by the other party. Anything in this Agreement
to the contrary notwithstanding, no party hereto shall assume or be liable for
any liabilities or obligations of the other party, whether past, present or
future.
12.11 SURVIVAL. The provisions of Sections 3, 6, 7.3, 12.1, 12.3, 12.6,
12.8, 12.10, and this Section 12.11, and of Section 4 to the extent of
obligations under such section relating to periods prior to termination of this
Agreement, shall survive the termination for any reason of this Agreement. Any
payments due under this Agreement with respect to any period prior to its
termination shall be made notwithstanding the termination of this Agreement.
Neither party shall be liable to the other for consequential damages (including
loss of good will or anticipated profits) due to the termination of this
Agreement as provided herein.
12.12 ENTIRE AGREEMENT. This Agreement, the Technology License Agreement,
the Product Option Agreement and the Services Agreement contain the entire
agreement and understanding
* * * * *
-12-
13
between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings whether written or oral,
relating to such subject matter.
* * * * *
-13-
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
BIOCHEM PHARMA INC.
By: _______________________________
Title: _____________________________
By: _______________________________
Title: _____________________________
CLINI CHEM DEVELOPMENT INC.
By: _______________________________
Title: _____________________________
By: _______________________________
Title: _____________________________
-14-
15
EXHIBIT A
to the Research and Development Agreement dated as of the 31st day of March,
1998 by and between BioChem Pharma Inc. and CliniChem Development Inc.
CLINICHEM PROGRAMS
PROGRAM FIELD OF USE
- ----------------------------------------- ---------------------------
1. Development of BCH-4556. Treatment of cancer.
2. Development of BCH-10652. Treatment of HIV infection.
3. Development of AvB3 antagonists to Treatment of cancer.
prevent angiogenesis.
4. The development of a recombinant To protect against infections by
protein vaccine to protect against NEISSERIA MENINGITIDIS.
infections by NEISSERIA MENINGITIDIS.
5. The development of a recombinant To protect against infections by
protein vaccine to protect against STREPTOCOCCUS PNEUMONIAE.
infections by STREPTOCOCCUS
PNEUMONIAE.
6. The development of a recombinant To protect against infections by
protein vaccine to protect against NEISSERIA GONORRHOEAE.
infections by NEISSERIA GONORRHOEAE.
7. The development of a recombinant To protect against infections by
protein vaccine to protect against HAEMOPHILUS INFLUENZAE non typeable.
infections by HAEMOPHILUS INFLUENZAE
non typeable.
8. The development of a recombinant To protect against infections by
protein vaccine to protect against STREPTOCOCCUS Group B.
infections by STREPTOCOCCUS Group B.
9. The development of a recombinant To protect against infections by
protein vaccine to protect against CHLAMYDIA PNEUMONIAE.
infections by CHLAMYDIA PNEUMONIAE.
16
EXHIBIT B
to the Research and Development Agreement dated as of the 31st day of
March, 1998 by and between BioChem Pharma Inc. and CliniChem Development Inc.
CALCULATION OF RESEARCH AND DEVELOPMENT COSTS
BioChem shall charge CliniChem for both "direct" and "indirect" Research
and Development Costs based on BioChem's internal accounting system, plus five
percent (5%). Direct costs shall include fully absorbed costs of labor,
third-party contract costs, such as those expenses paid to outside vendors and
licensors, raw materials, drug substances, drug products, clinical supplies,
compound library, assay acquisition and all other costs which can be directly
identified to a CliniChem Program (see Exhibit B1). Indirect costs shall
include lease payments, building allocations, equipment allocations,
administration services and all other indirect costs. The indirect costs are
estimated to be twenty to thirty-five percent (20-35%) of direct costs. The
indirect cost allocations are based upon BioChem's historical overhead
experience arising from its research and development activities.
17
EXHIBIT B1
to the Research and Development Agreement dated as of the 31st day of March,
1998 by and between BioChem Pharma Inc. and CliniChem Development Inc.
RESEARCH AND DEVELOPMENT DIRECT COSTS
The following is a list of the types of expenses which are considered as
"direct" in Exhibit B and would be billable to CliniChem:
Collaborative research agreement payments
Payments for compound supply
Payments forbiologicals, drug substances and drug products
Payments for chemical precursors
Payments for assay acquisitions
Payments for clinical studies
Payments for toxicological, pharmacokinetic studies, process development
contracts, manufacturing of batches of vaccines for clinical trials,
immunological studies and other outside services
Payments for other BioChem functions (non-R&D) which provide services
Payments for investigation or research grants
Payments for consulting services
Hiring expenses, salaries and fringe benefits for people who will work
directly on CliniChem projects
Milestone payments to third parties
Project travel, entertainment and related expenses
Capital equipment and other materials purchased exclusively for
CliniChem projects
Miscellaneous project expenses
Regulatory and filing fees
Telephone and communications
Patent and trademark expenses including the cost of prosecution, defense and
maintenance of intellectual property rights
Software
Payments for clinical research organizations
Payments for monitoring
Payments for data management
Insurance
18
EXHIBIT B2
to the Research and Development Agreement dated as of the 31st day of March,
1998 by and between BioChem Pharma Inc. and CliniChem Development Inc.
RESEARCH AND DEVELOPMENT INDIRECT COSTS
The following is a list of the types of expenses which are considered as
"indirect" in Exhibit B and would be billable to CliniChem:
[Salaries and fringe benefits of people managing and supporting those working
directly on CliniChem projects
General supplies and chemicals
General information systems and communications support
General equipment depreciation
General facilities depreciation, utilities, rent
Miscellaneous indirect expenses
Miscellaneous general and administrative expenses