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Exhibit 10.3
PRODUCT OPTION AGREEMENT
This Product Option Agreement (the "Agreement") is made as of the 31st day
of March, 1998 by and between BioChem Pharma Inc., a Canadian corporation
("BioChem"), Tanaud International B.V., a Dutch corporation ("BV"), Tanaud
Ireland Inc., an Irish Company ("TII") 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, most
likely through BioChem.
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. As of the date hereof, BioChem, certain BioChem Affiliates and
CliniChem have entered into a Technology License Agreement and a Research and
Development Agreement (each as defined below).
D. Subject to the terms of this Agreement, CliniChem desires to grant
to BioChem, and BV and TII (with respect only to BCH-4556 in certain
territories), an option to acquire for commercialization the products developed
pursuant to the Research and Development Agreement as set forth herein.
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 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, BV or TII
has exercised the Product Option granted hereunder.
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
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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, and at least fifty percent
(50%) of the interests in profits in the case of a business entity other than a
corporation. CliniChem shall not be considered an Affiliate of BioChem, BV or
TII.
1.3 "CliniChem Product" shall mean any human therapeutic or vaccine
product developed according to the terms of the Research and Development
Agreement and pursuant to the CliniChem Programs in the applicable Fields of
Use.
1.4 "CliniChem Programs" shall mean any of the therapeutic and vaccine
product development programs listed on 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 as such pursuant to the Research and Development Agreement.
1.5 "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.
1.6 "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.
1.7 "Distribution Date" shall mean the proposed date of effecting the
Distribution.
1.8 "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.
1.9 "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 on Exhibit A.
1.10 "Infringing Product" shall mean any product manufactured, used,
offered for sale or sold by a third party, other than pursuant to an agreement
with BioChem, which infringes or is alleged to infringe any patent or patents
owned by, licensed to or controlled by BioChem containing claims which cover a
CliniChem Product.
1.11 "Licensing Revenues" shall mean percentage-of-sales payments and
Specialty Royalty Payments received by BioChem, BV or TII with respect to an
Acquired Product.
1.12 "Major Market Country" shall mean any one of the following countries:
Canada, France, Germany, Italy, Japan, the United Kingdom, or the United States.
1.13 "Net Sales" shall mean the total amount to be invoiced, net of taxes,
on sales of an Acquired Product by BioChem or its Affiliates to unrelated third
parties such as wholesalers,
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hospitals, distributors, marketing partners and others, which are not Affiliates
of the selling party (unless such Affiliate is the end user of such product, in
which case the amount invoiced therefor shall be deemed to be the amount that
would be invoiced to a third party in a BONA FIDE arm's length transaction) in
BONA FIDE arm's length transactions, less discounts, allowances, credits and
charges for freight or insurance as customarily determined under BioChem's
accounting policies in effect at the time of such sale.
1.14 "Product Option" shall mean the options granted to BioChem, BV and
TII pursuant to Section 2 of this Agreement.
1.15 "Product Payments" shall have the meaning set forth in Section 3.2
of this Agreement.
1.16 "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.
1.17 "Purchase Option" shall mean the 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.
1.18 "Research and Development Agreement" shall mean the Research and
Development Agreement dated as of the date hereof between BioChem and CliniChem,
as amended from time to time.
1.19 "Research and Development Costs" shall mean the fully-burdened cost
of activities undertaken pursuant to the Research and Development Agreement with
respect to the Acquired Products plus five percent (5%), as detailed in the
Research and Development Agreement.
1.20 "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.
1.21 "Specialty Royalty Payments" shall mean front-end distribution
fees, prepaid royalties, one-time, infrequent or special payments or
non-monetary consideration (including licenses of technology) received by
BioChem, BV or TII from a licensee, distributor or marketing partner with
respect to an Acquired Product but excluding any payments for research and
development related services or capital expenditures. The fair market value of
any such non-monetary consideration shall be assessed by a third party expert
mutually agreed to by BioChem and CliniChem.
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1.22 "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.
1.23 "Territory" shall have the meaning set forth in Section 2.3 of this
Agreement.
2. PRODUCT OPTION.
2.1 GRANT OF PRODUCT OPTION. On the terms and subject to the
conditions of this Agreement, CliniChem hereby grants to BioChem an option to
acquire all of CliniChem's rights with respect to each CliniChem Product (other
than BCH-4556), and to terminate CliniChem's corresponding license with respect
thereto, exercisable on a product-by-product and country-by-country basis as
described in Section 2.2. With respect to the CliniChem Product BCH-4556, (i)
CliniChem hereby grants to TII an option to acquire all of CliniChem's rights,
and terminate CliniChem's corresponding license with respect to BCH-4556 in the
United States; (ii) CliniChem hereby grants to BioChem an option to acquire all
of CliniChem's rights and terminate CliniChem's corresponding license, with
respect to BCH-4556 in Canada; and (iii) CliniChem hereby grants to BV an option
to acquire all of CliniChem's rights and terminate CliniChem's corresponding
license, with respect to BCH-4556 for the world other than the United States and
Canada, exercisable on a country-by-country basis.
2.2 TIME FOR EXERCISE.
(a) BioChem, and with respect to BCH-4556, BV and TII, may
exercise the Product Option with respect to any CliniChem Product on a
country-by-country basis at any time during the period beginning on the date
hereof and ending (i) with respect to the United States, thirty (30) days after
clearance by the FDA to market such CliniChem Product in the United States, and
(ii) with respect to any other country, thirty (30) days after clearance by the
appropriate regulatory agency to commercially market such CliniChem Product in
such country. Notwithstanding the foregoing, the Product Option shall expire,
to the extent not previously exercised, at the close of business on the
thirtieth day after the expiration of the Purchase Option. In any case,
BioChem, BV and TII must each exercise its applicable Product Option for a
particular CliniChem Product in a particular country prior to the first
commercial sale of such product in such country by BioChem, BV, TII or any of
their Affiliates, licensees, distributors or marketing partners. The Product
Option for any CliniChem Product in any country will expire if not exercised
within the foregoing time periods.
(b) CliniChem will notify BioChem, BV or TII, as applicable, in
writing within ten (10) business days of receipt of each clearance to market any
CliniChem Product in any country.
2.3 MANNER OF EXERCISE. BioChem, BV or TII shall exercise its Product
Option by delivering to CliniChem, within the time period described in Section
2.2 above, a written notice of exercise specifying the CliniChem Product and
the country or countries as to which the Product Option is exercised (the
"Territory"). Upon delivery of such written notice of exercise, (i) BioChem,
BV or TII, as applicable, shall be deemed to have acquired all rights from
CliniChem with respect
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to such Acquired Product in the Territory, including but not limited to the
right to research, develop, make, have made and use such Acquired Product and to
sell, have sold and commercialize such Acquired Product in the Territory and
(ii) CliniChem's license with respect thereto pursuant to the Technology License
Agreement shall be terminated, without the necessity of any additional action by
the parties.
2.4 DEVELOPMENT ASSETS. If BioChem, BV or TII does not exercise its
Product Option for any CliniChem Product in any country prior to the expiration
of such Product Option or, if BioChem, BV or TII notifies CliniChem expressly in
writing that it will not exercise its Product Option for a CliniChem Product,
BioChem shall make available to CliniChem for further development and
commercialization activities, at no charge, all clinical supplies, materials and
other tangible assets purchased, manufactured or developed for use exclusively
in the development of such CliniChem Product (the "Development Assets") with
respect to such country to the extent such assets are being used by CliniChem
and will not be used under the Research and Development Agreement.
2.5 FAILURE TO EXERCISE PRODUCT OPTION. To the extent that BioChem, BV
or TII does not exercise its Product Option with respect to any CliniChem
Product, CliniChem will retain exclusive rights (subject to pre-existing
third-party rights and subject to the receipt of certain third-party consents,
as set forth in the Technology License Agreement) to develop and commercialize
such CliniChem Product.
3. OBLIGATIONS WITH RESPECT TO ACQUIRED PRODUCTS.
3.1 DILIGENCE. Subject to Section 9.3 of this Agreement, if
BioChem, BV or TII exercises its Product Option with respect to a CliniChem
Product, such party shall use diligent efforts to conduct or have conducted any
remaining activities necessary to complete the development of any Acquired
Product through regulatory clearance to market the Acquired Product in each
Major Market Country of the Territory; provided, however, that with respect to
those Acquired Products for which BioChem, BV or TII has exercised its option to
buy out royalty payments pursuant to Section 3.4 of this Agreement, such party
shall have no such obligation. Such activities shall be undertaken at no cost
to CliniChem, unless CliniChem agrees otherwise in writing. Promptly after
regulatory clearance, BioChem or, to the extent applicable, BV or TII, shall
commence and continue to use reasonable diligent efforts to commercialize the
Acquired Product in each Major Market Country of the Territory through the
manufacture and sale or the licensing of the Acquired Product, devoting to the
Acquired Product the same resources as other pharmaceutical companies of similar
size devote to products with similar market potential and with similar relative
importance to their product portfolios. BioChem, BV and TII may use reasonable
business discretion in the allocation of their technological and monetary
resources in performing their obligations hereunder, taking into account not
only the Acquired Product but also activities for their own account and their
obligations under other agreements with third parties. CliniChem acknowledges
that BioChem, BV and/or TII will continue to own and have the right to use any
Development Assets relating to such Acquired Product without any additional
payment to or reimbursement of CliniChem.
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3.2 PRODUCT PAYMENTS. BioChem, BV or TII, as applicable, shall
make payments to CliniChem ("Product Payments") with respect to each Acquired
Product as follows:
(a) royalties of up to a maximum of six percent (6%) of Net Sales
of the Acquired Product in the Territory determined as follows: (A) one percent
(1%) of such Net Sales, plus (B) an additional one tenth of one percent (0.1%)
of such Net Sales for each full one million dollars ($1,000,000) of Research and
Development Costs of the Acquired Product that have been paid by CliniChem at
the time BioChem, BV or TII exercised its Product Option with respect to such
Acquired Product; plus
(b) licensing fees of up to a maximum of twenty-five percent (25%)
of Licensing Revenues received by the party exercising the Product Option with
respect to such Acquired Product determined as follows: (A) ten percent (10%) of
such Licensing Revenues, plus (B) an additional one percent (1%) of such
Licensing Revenues for each full one million dollars ($1,000,000) of Research
and Development Costs of the Acquired Product that have been paid by CliniChem
at the time BioChem, BV or TII exercised its Product Option with respect to such
Acquired Product.
Notwithstanding the foregoing, Product Payments for any quarter will not exceed
three percent (3%) of Net Sales plus twelve and one-half percent (12.5%) of
Licensing Revenues in the Territory for the first twelve (12) calendar quarters
during which the Acquired Product is commercially sold in the first Major Market
Country. As a result of this provision, if an Acquired Product were to be
cleared for marketing in countries that are not Major Market Countries prior to
marketing clearance in the first Major Market Country and Product Payments in
such countries would exceed three percent (3%) of Net Sales plus twelve and
one-half percent (12.5%) of Licensing Revenues, the Product Payment rates in
such countries will be reduced to three percent (3%) of Net Sales plus twelve
and one-half percent (12.5%) of Licensing Revenues for the first twelve (12)
calendar quarters during which the Acquired Product is commercially sold in the
first Major Market Country.
(c) In determining Product Payments, the amount of Net Sales by
and Licensing Revenues of BioChem, BV and TII shall be reduced by the dollar
amount of any license or similar payments made by or due from BioChem or its
Affiliates to third parties with respect to sales or development of such
Acquired Product in the Territory. BioChem, BV or TII, as applicable, shall
allocate any such reduction between Net Sales and Licensing Revenues in a
commercially reasonable manner. If license or similar payments are made to
third parties with respect to sales of the Acquired Product in the Territory and
to sales of other products, BioChem, BV or TII, as applicable, shall allocate
such payments, if necessary, in a commercially reasonable manner.
3.3 TERM OF PAYMENT. The obligation to make Product Payments hereunder
shall begin on the date of the first commercial sale of the Acquired Product in
any country for which the Product Option has been exercised. Such obligation
shall continue until ten (10) years after the date of the first commercial sale
of the Acquired Product in any Major Market Country, and shall terminate as to
all countries at the end of such ten (10) year period.
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3.4 BUY-OUT OF PAYMENTS.
(a) BioChem, BV and TII shall have the option, in their discretion,
at any time after the end of the twelfth calendar quarter during which the
Acquired Product was commercially sold in any country, to buy out their
respective remaining obligations to make Product Payments with respect to Net
Sales and Licensing Revenues of such Acquired Product in such country. The
buy-out price shall be an amount equal to fifteen (15) times the Product
Payments made by or due from BioChem, BV or TII to CliniChem with respect to Net
Sales and Licensing Revenues of such Acquired Product in such country for the
four (4) calendar quarters immediately preceding the quarter in which the
buy-out option is exercised, plus fifteen (15) times such additional Product
Payments as would have been made but for the three percent (3%) of Net Sales
plus twelve and one- half percent (12.5%) of Licensing Revenues limit set forth
in Section 3.2 on Product Payments for such period.
(b) BioChem shall have the option, in its discretion, at any time
after the end of the twelfth calendar quarter during which the Acquired Product
was commercially sold in either the United States or two other Major Market
Countries, to buy out its remaining worldwide obligations to make Product
Payments with respect to Net Sales and Licensing Revenues of such Acquired
Product in the Territory. The buy-out price shall be an amount equal to (i)
twenty (20) times (A) the Product Payments made by or due from BioChem, BV or
TII to CliniChem for such Acquired Product in the Territory, plus (B) such
payments as would have been made by or due from BioChem, BV or TII to CliniChem
if BioChem had not exercised any country-specific buy-out option with respect to
Net Sales and Licensing Revenues of such Acquired Product, plus (C) such
additional Product Payments as would have been made but for the three percent
(3%) of Net Sales plus twelve and one-half percent (12.5%) of Licensing Revenues
limit set forth in Section 3.2 on Product Payments for such period, in each
case, for the four (4) calendar quarters immediately preceding the quarter in
which the buy-out option is exercised, less (ii) any amounts previously paid to
exercise any country-specific buy-out option with respect to Net Sales and
Licensing Revenues of such Acquired Product.
4. ACCOUNTING.
4.1 REPORTS. Within ninety (90) days after the end of each calendar
quarter for which Product Payments are due, BioChem, BV and TII shall render an
accounting to CliniChem, on a country-by-country basis, with respect to all
Product Payments due for such quarter. Such report shall indicate, for such
quarter, the quantity and dollar amount of Net Sales of and Licensing Revenues
with respect to the Acquired Product by BioChem, BV, TII and their Affiliates or
other consideration with respect to Net Sales and Licensing Revenues, with
respect to which payments are due. In the event no Product Payments are due for
any calendar quarter, BioChem, BV and TII shall so report.
4.2 RECORDS; REVIEW BY AUDITORS. BioChem, BV and TII shall keep and
maintain, in accordance with Canadian generally accepted accounting principles,
proper and complete records and books of account documenting all amounts paid or
payable by BioChem, BV and TII to CliniChem. CliniChem shall have the right,
once in each calendar year during regular business
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hours and upon reasonable notice to BioChem, BV or TII, at CliniChem's
expense, to examine or have examined by its auditors, such of the records of
BioChem, BV or TII as may be necessary to verify the accuracy of the reports and
payments made under this Agreement. 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. BioChem, BV and TII shall each use reasonable efforts to seek, for
itself and for CliniChem, similar reasonable rights to audit information
pertaining to Net Sales from each party appointed to commercialize any product
as to which payments are due to CliniChem hereunder.
5. TIMES AND CURRENCIES OF PAYMENTS.
5.1 PAYMENTS. Payments shown by each calendar quarter report to have
accrued shall be due and payable on the date such report is due and shall be
paid in Canadian dollars. Any and all taxes due or payable on such payments or
with respect to the remittance thereof shall be deducted from such payments and
shall be paid by BioChem, BV or TII to the proper taxing authorities, and proof
of payment shall be secured and sent to CliniChem as evidence of such payment.
The rate of exchange to be used in computing the amount of the Canadian dollars
due to CliniChem in satisfaction of payment obligations with respect to sales in
foreign countries shall be calculated by converting the amount due in such
foreign currency into Canadian dollars at the rate for the purchase of Canadian
dollars with such currency as published in The Globe and Mail on the last
business day of the calendar quarter for which payment is being made or the
customary exchange rate posted by BioChem's bankers on such date.
5.2 CERTAIN FOREIGN PAYMENTS. If governmental regulations prevent
remittance from any foreign country of any amounts due under Section 3.2 in
respect of that country, BioChem, BV or TII shall so notify CliniChem in
writing, and the obligation under this Agreement to make payments with respect
to sales in that country shall be suspended (but the amounts due but not paid
shall continue to accrue) until such remittances are possible. CliniChem shall
have the right, upon written notice to BioChem, BV or TII, to receive payment in
any such country in the local currency.
5.3 LATE PAYMENTS. Any payments due hereunder that are not made when
due shall bear 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 CliniChem has
notified BioChem, BV or TII, as applicable, that such payments are overdue.
6. PATENT INFRINGEMENT.
6.1 NOTICE. Each party shall promptly notify the other in writing of
any infringement or alleged infringement known to such party of any patent
included in the BioChem Technology, by the manufacture, use, sale or offer for
sale by a third party of any Infringing Product.
6.2 LEGAL ACTION. In the event of any infringement or alleged
infringement as specified in Section 6.1, BioChem, BV and TII shall have the
right, at their own expense, to take appropriate action to restrain such
infringement or alleged infringement and for damages. If BioChem, BV or TII
takes any such action, CliniChem shall cooperate fully with BioChem, BV or TII
in its pursuit
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thereof, at BioChem, BV or TII's expense, to the extent reasonably required by
BioChem, BV or TII. Any recoveries resulting from any such action shall be
first applied to reimburse BioChem, BV or TII for its expenses (including
attorneys' fees) incurred in bringing the action. CliniChem will be entitled to
a share of the remaining recoveries in the same percentage as the percentage of
Net Sales as to which Product Payments are due to CliniChem during the period of
the infringement or alleged infringement for the sale of any Acquired Product
covered by the claims found or alleged to have been infringed. In the event
that BioChem, BV and TII determine not to bring legal action to restrain such
infringement, CliniChem will not have the right to do so.
6.3 SETTLEMENT. BioChem, BV and TII each agree not to settle any action
it brings in a manner that would adversely affect CliniChem without CliniChem's
prior written consent, which consent shall not be unreasonably withheld or
delayed.
7. NO CONFLICT.
7.1 NO CONFLICT. CliniChem agrees that no license, sale or other
commercialization of any CliniChem Product has been or shall be made or offered
to any person or entity on any basis that is or will be in conflict with this
Agreement.
8. ACCESS TO INFORMATION.
8.1 INFORMATION AVAILABLE TO BIOCHEM, BV AND TII. CliniChem shall make
available to BioChem, and with respect to BCH-4556, BV and TII at all reasonable
times, all available information relating to all CliniChem Products as to which
the Product Option remains exercisable so as to enable BioChem, BV and TII to
determine whether and when to exercise its Product Option.
8.2 CONSULTATION WITH BIOCHEM, BV AND TII. CliniChem shall consult with
BioChem and, with respect to BCH-4556, BV and TII and inform them on a
continuing basis of the current state of research and development of all
CliniChem Products as to which the Product Option remains exercisable and will
review from time to time with BioChem and, with respect to BCH-4556, BV and TII
the progress towards completion of the CliniChem Products.
9. TERM AND TERMINATION.
9.1 TERM. This Agreement shall become effective on the Distribution
Date and, unless earlier terminated in whole or in part in accordance with the
provisions hereof, shall automatically terminate upon the earlier of (a) the
date of expiration of the Product Option for all of the CliniChem Products or
(b) thirty (30) days after expiration of the Purchase Option, except that
BioChem, BV and TII's obligations to make Product Payments to CliniChem with
respect to any Acquired Products shall continue after expiration of the Purchase
Option as provided in Section 3 hereof.
9.2 TERMINATION BY CLINICHEM. CliniChem may, in its discretion,
terminate this Agreement (but not BioChem, BV or TII's rights with respect to
any Acquired Product) in the event that BioChem, BV or TII enters into any
proceeding, whether voluntary or involuntary, in bankruptcy, reorganization or
similar arrangement for the benefit of its creditors, provided however,
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that CliniChem shall only be permitted to terminate this agreement as to
the party (BioChem, BV or TII) which has entered into such proceeding.
9.3 TERMINATION BY BIOCHEM. BioChem, BV and TII may terminate their
rights and obligations with respect to any Acquired Product with respect to one
or more countries included in the Territory upon thirty (30) days' prior written
notice to CliniChem if BioChem, BV or TII elects for any reason to discontinue
commercialization of the Acquired Product in such country. In such event,
CliniChem's license pursuant to the Technology License Agreement with respect to
such country or countries of the Territory shall be reinstated.
10. FORCE MAJEURE.
10.1 FORCE MAJEURE. No 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.
11. INDEMNIFICATION.
11.1 INDEMNIFICATION BY BIOCHEM. BioChem shall indemnify, defend and
hold CliniChem and its Affiliates and each of their officers, directors,
employees and agents, harmless from and against any and all losses, liabilities,
claims, demands, damages, costs, expenses (including reasonable attorneys' fees)
or money judgments incurred by or rendered against CliniChem or its Affiliates,
which arise out of the use, design, labeling, manufacture, processing,
packaging, sale or commercialization of any Acquired Product by BioChem or its
Affiliates, subcontractors, licensees, distributors and marketing partners (and
their Affiliates). CliniChem shall permit BioChem's attorneys, at BioChem's
discretion and cost, to control the defense of any claims or suits as to which
CliniChem may be entitled to indemnification hereunder, and CliniChem agrees not
to settle any such claims or suits without the prior written consent of BioChem,
which consent shall not be unreasonably withheld. CliniChem shall have the
right to participate, at its own expense and through its own counsel (provided
such counsel is reasonably acceptable to BioChem), in the defense of any such
claim or demand to the extent it so desires.
11.2 NOTICE. CliniChem shall give BioChem prompt notice in writing, in
the manner set forth in Section 13.7 below, of any claim or demand made against
CliniChem for which CliniChem may be entitled to indemnification under Section
11.1.
12. DISCLAIMER.
12.1 DISCLAIMER CONCERNING ACQUIRED PRODUCTS. CLINICHEM DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTY (A) THAT ANY ACQUIRED PRODUCT OR ANY TECHNOLOGY
INCORPORATED THEREIN, OR THE MANUFACTURE, USE OR SALE THEREOF, WILL BE FREE FROM
CLAIMS OF PATENT INFRINGEMENT, INTERFERENCE OR UNLAWFUL USE OF PROPRIETARY
INFORMATION OF ANY THIRD PARTY AND (B)
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OF THE ACCURACY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE,
COMPREHENSIVENESS OR MERCHANTABILITY OF THE ACQUIRED PRODUCT OR ANY TECHNOLOGY
INCORPORATED THEREIN OR THEIR SUITABILITY OR FITNESS FOR ANY PURPOSE WHATSOEVER
INCLUDING, WITHOUT LIMITATION, THE RESEARCH, DESIGN, DEVELOPMENT, MANUFACTURE,
USE OR SALE OF THE ACQUIRED PRODUCT. CLINICHEM DISCLAIMS ALL OTHER WARRANTIES OF
WHATEVER NATURE, EXPRESS OR IMPLIED.
13. MISCELLANEOUS.
13.1 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.
13.2 ASSIGNMENT. CliniChem may not assign its rights and obligations
hereunder without the prior written consent of BioChem, which consent may not be
unreasonably withheld. BioChem, BV and TII's rights and obligations under this
Agreement shall be freely assignable, in whole or in part.
13.3 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 (as representative of BioChem and any
Affiliate 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.
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
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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.
13.4 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.
13.5 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.
13.6 HEADINGS. The section headings contained in this Agreement are
included for convenience only and form no part of the Agreement between the
parties.
13.7 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 and addressed as follows:
IF TO BIOCHEM, BV OR TII:
BioChem Pharma Inc.
275 Armand-Frappier Blvd.
Laval, Quebec, Canada H7V 4A7
Facsimile: (514) 978-7994
Attention: Vice-President Legal Affairs and Corporate Secretary
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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. Any party may change the address at
which notice is to be received by written notice pursuant to this Section 13.7.
13.8 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.
13.9 RELATIONSHIP OF THE PARTIES. For purposes of this Agreement,
CliniChem (as one party) and BioChem, BV and TII (as the other party) 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, BV or TII 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 nor shall be liable for any
liabilities or obligations of the other party, whether past, present or future.
13.10 SURVIVAL. The provisions of Sections 2.3, 2.4, 2.5, 3.2, 3.3, 3.4,
4, 5, 9, 11, 12, 13.1, 13.3, 13.5, 13.7, 13.8, 13.9 and this Section 13.10 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. No party shall be
liable to any other party due to the termination of this Agreement as provided
herein, whether in loss of good will, anticipated profits or otherwise.
13.11 ENTIRE AGREEMENT. This Agreement, the Technology License
Agreement, the Services Agreement and the Research and Development Agreement
contain the entire agreement and understanding 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.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
BIOCHEM PHARMA INC.
By: _______________________________
Title: _____________________________
By: _______________________________
Title: _____________________________
TANAUD INTERNATIONAL B.V.
By: _______________________________
Title: _____________________________
By: _______________________________
Title: _____________________________
TANAUD IRELAND INC.
By: _______________________________
Title: _____________________________
By: _______________________________
Title: _____________________________
CLINICHEM DEVELOPMENT INC.
By: _______________________________
Title: _____________________________
By: _______________________________
Title: _____________________________
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EXHIBIT A
to the Product Option Agreement dated as of the 31st day of March, 1998 by
and between BioChem Pharma Inc., Tanaud International B.V., Tanaud Ireland Inc.
and CliniChem Development Inc.
CLINICHEM PROGRAMS
Program Field of Use
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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 NEISSERI 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.