EXHIBIT 10.3
WESTERN CENTER FOR CLINICAL STUDIES, INC.
WARNER CENTER PLAZA, 21550 OXNARD STREET
WOODLAND HILLS, CALIFORNIA 91367
British Lion Medical, Inc. October 24, 1998
Warner Center Plaza
21550 Oxnard Street
Woodland Hills, California 91367
Dear Sirs:
This letter sets forth the agreement ("Agreement") between
British Lion Medical, Inc. ("BLM") and Western Center for Clinical Studies,
Inc. ("WCCS") regarding the efforts WCCS will undertake to assist BLM in
exploiting BLM's proprietary technology in monoclonal antibodies for use in
treating or inhibiting diseases associated with the human immunodeficiency
virus and aids.
1. BLM hereby retains WCCS to perform and WCCS agrees to
perform the following duties (the "Work"):
* Provide the expertise to oversee the
development of Cytolin(R) through the IND
and NDA stages.
* Arrange and oversee necessary pre-clinical
studies and clinical trials for Cytolin(R).
* Create a scientific advisory board.
* Oversee the manufacturing of Cytolin(R).
* Work with and assist the founding scientist
and other with the development of new
compounds based on the patented platform.
* Develop and oversee vendors for Cytolin(R)
related services.
2. WCCS acknowledges that Drs. Daniel L. Azarnoff, Roy S.
Azarnoff and Lois Rezler, who indirectly have a controlling interest in
BLM, have a controlling ownership interest in WCCS and that in the
performance of their duties as officers and/or directors of BLM such
persons have a potential conflict of interest in the approval and
performance of this Agreement. WCCS understands that BLM contemplates
being merged into a publicly held company. BLM has identified to WCCS the
individuals whom BLM contemplates will constitute the Board of Directors of
the surviving entity (the "Surviving Entity") upon such merger and WCCS
represents and warrants that the following identified potential Board of
Directors members have no direct or indirect ownership interest or any
other interest in WCCS: Michael A. Davis, Kimberlie L. Cerrone and O.B.
Parrish (the "Disinterested Directors"). WCCS agrees that the
effectiveness of this Agreement is expressly subject to the approval of the
Disinterested Directors in accordance with applicable law after they become
members of the Board of Directors of the Surviving Entity, together with
such additional or different individuals on
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the Surviving Entity Board of Directors who have no direct or indirect
ownership interest or any other interest in WCCS.
3. Subject to the terms of the preceding paragraph, the
effective date of this Agreement will be the date upon which the merger of
BLM into a public company is effected (the "Effective Date") and the term
of this Agreement shall be for three years from the Effective Date.
4. Commencing on the Effective Date BLM agrees to pay WCCS for
its services under this Agreement at the rate of $585,000 per year (the
"Fee").
5. BLM agrees to take all action necessary or appropriate to
cause BLM, its officers, directors, agents, representatives, employees,
consultants, vendors, contractors and attorneys to cooperate with WCCS and
its officers, directors, agents, representatives, employees, consultants,
vendors, contractors and attorneys in the performance of this Agreement.
6. WCCS will prepare and submit to BLM a proposed budget (the
"Budget") of anticipated costs BLM will incur, exclusive of the Fee, for
the Work. Provided the aggregate amount of the Budget is not unreasonable,
BLM agrees to adopt the Budget as the budget for the Work for the term of
this Agreement and that it will take the necessary action to cause
necessary BLM assets, funds and other BLM resources, including employees,
to be
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dedicated to the performance of the Budget and the transactions
contemplated thereby. BLM agrees it will promptly pay for all services and
work contracted for by WCCS pursuant to the approved Budget. From time to
time WCCS may, in its sole discretion, make changes in the Budget as a
whole and/or in line items and yearly Budgets, provided that the aggregate
of increases resulting from such changes may not exceed, without the
approval of BLM, 25% for the Budget in aggregate. BLM agrees that so long
as changes meet the limitation set forth in the preceding sentence, the
Budget as changed will be deemed approved by BLM.
7. This Agreement may be terminated by BLM by written notice to
WCCS solely upon the vote of the disinterested members of the BLM Board of
Directors for cause. For purposes of this Agreement "cause" means a
material breach by WCCS of its obligations under this Agreement (i) which
breach has not been corrected within 90 days from the date of receipt by
WCCS of written notice of the specific details of such breach, in the case
of a breach capable of having a correction completed within 90 days, or
(ii) for which commencement of the correction of such breach has not been
made within 90 days following receipt by WCCS of written notice of the
specific details of such breach and prosecuted diligently thereafter, in
the case of a breach which is not capable of being corrected within such 90
days. WCCS may terminate this Agreement by delivering written notice to
BLM for the breach by BLM of any of its obligations under this Agreement or
the breach of any of its representations and warranties made
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in this Agreement. Upon such termination, WCCS will have no further
obligation under this Agreement. In the event of such termination, WCCS
will be entitled to retain or receive, as the case may be, all compensation
to which it is then entitled under the terms of this Agreement.
8. BLM represents and warrants that:
(a) It is a corporation duly organized, validly existing and in
good standing under the laws of California;
(b) It is not in violation of any of the terms and provisions of
its Articles of Incorporation or By-Laws;
(c) This Agreement has been approved by the BLM Board of
Directors and, except as otherwise set forth in this
Agreement, no other approvals or consents are required of
any other party;
(d) Entry into and performance of this Agreement and the
transactions contemplated hereby by BLM will not violate the
terms of any agreement, order, judgment, law or regulation
to which BLM is subject;
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(e) BLM has the full power and authority to execute, deliver and
perform this Agreement and the transactions contemplated
hereby;
(f) Except as otherwise provided in this Agreement, upon
execution, this Agreement will constitute the valid and
legally binding obligation of BLM;
(g) To the best of BLM's knowledge, there is no litigation or
claim and no threatened litigation or claim, nor does BLM
know of any basis for any such litigation or claim, that
would prevent or hinder the performance of the transactions
or work contemplated hereby;
(h) BLM has good, valid and marketable title to all of its
assets; and
(i) BLM is not in violation in any material respect with any
agreement, order, judgment, law or regulation applicable to
it, including particularly securities laws and regulations,
and it has obtained all governmental permits or licenses
required to conduct its business.
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9. WCCS represents and warrants that:
(a) It is a corporation duly organized, validly existing and in
good standing under the laws of California;
(b) It is not in violation of any of the terms and provisions of
its Articles of Incorporation or By-Laws;
(c) This Agreement has been approved by the WCCS Board of
Directors and no other approvals or consents are required of
any other party;
(d) Entry into and performance of this Agreement and the
transactions contemplated hereby by WCCS will not violate
the terms of any agreement, order, judgment, law or
regulation to which WCCS is subject;
(e) WCCS has the full power and authority to execute, deliver
and perform this Agreement and the transactions contemplated
hereby;
(f) Except as otherwise provided in this Agreement, upon
execution, this Agreement will constitute the valid and
legally binding obligation of WCCS;
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(g) To the best of WCCS's knowledge, there is no litigation or
claim and no threatened litigation or claim, nor does WCCS
know of any basis for any such litigation or claim, that
would prevent or hinder the performance of the transactions
or work contemplated hereby;
(h) WCCS has good, valid and marketable title to all of its
assets; and
(i) WCCS is not in violation in any material respect with any
agreement, order, judgment, law or regulation applicable to
it, including particularly securities laws and regulations,
and it has obtained all governmental permits or licenses
required to conduct its business.
10. Neither party shall incur liability to the other party on
account of any loss or damage resulting from any delay or failure to
perform any part of its obligations hereunder where such delay or failure
was caused in whole or in part by events, occurrences, or causes beyond the
reasonable control of such party.
11. WCCS and BLM agree that WCCS is an independent contractor
and all of WCCS' agents and employees shall be subject solely to the
control, supervision and authority of WCCS. WCCS
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understands and agrees that BLM will not cover WCCS or WCCS' agents or
employees with workers' compensation, unemployment insurance, state
disability insurance, public liability insurance or other benefits that may
be available to employees of BLM. WCCS further agrees that none of its
agents or employees will be entitled to any benefits under any medical or
travel accident insurance, pension, sick leave, life insurance, vacation,
or disability, or other employees' benefit plans or plans maintained by BLM
for its employees.
12. This Agreement shall not assignable by either party without
the prior written consent of the other.
13. Any and all notices or other communications which a party
shall be required or may elect to provide another party pursuant to this
Agreement shall be in writing unless otherwise so provided. Any written
notice shall be personally delivered, telecopied, telexed, faxed or marked
certified mail, return receipt requested to the other party at the address
set forth in the heading of this Agreement or at such other address as a
party shall designate in accordance with this paragraph. Delivery or
service of any written notice shall be deemed completed (a) if personally
delivered, upon such delivery, (b) if telecopied, telexed or faxed, upon
acknowledgement thereof, or (c) if mailed, upon 72 hours after deposit in
the mail.
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14. If any provision, or portion thereof, of this Agreement is
held to be unenforceable or invalid by any court of competent jurisdiction,
the validity and enforceability of the remaining provisions, or portions
thereof, shall not be affected thereby.
15. This Agreement will survive the merger of BLM.
16. Subject to the restrictions against assignment contained
herein, the provisions of this Agreement shall enure to the benefit of, and
shall be binding upon, the assigns and successors in interest of the
parties to this Agreement.
17. In any action at law or in equity and in any arbitration
proceeding to enforce any of the provisions or rights under this Agreement,
the unsuccessful party to such litigation, as determined by the court or
arbitrator(s) in a final judgment or decree, shall pay the successful party
or parties all costs, expenses and reasonable attorneys' fees incurred by
the successful party or parties (including, without limitation, costs,
expenses and fees on any appeals), and if the successful party recovers
judgment in any such action or proceeding, such costs, expenses and
attorneys' fees shall be included as part of the judgment.
18. Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall be
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resolved in Los Angeles, California, by the American Arbitration
Association with each party to the dispute appointing an arbitrator and
those arbitrators appointing an additional arbitrator who shall act as
chairman. The decision of the arbitration panel shall be final and
judgment upon the award may be entered in any court having jurisdiction
thereof. The losing party or parties shall bear the fees of the
arbitrators.
19. WCCS agrees that all information reflecting upon or
concerning BLM that is not openly communicated or made accessible by BLM to
third parties and that WCCS obtains from BLM, its employees, subsidiaries
and affiliates, or that WCCS otherwise acquires while engaged hereunder,
including information of a third party as to which BLM has a nondisclosure
obligation, and including all reports to BLM made by WCCS hereunder and the
contents thereof and any and all information developed, created,
transcribed or generated in any form in performance of this Agreement will
be treated as "BLM Confidential Information." WCCS:
(a) agrees that BLM Confidential Information is the sole
property of BLM and that such BLM Confidential Information
shall be used only in providing the services contemplated by
this Agreement;
(b) shall hold the BLM Confidential Information in confidence
and not disclose it in any manner whatsoever, in whole or in
part, to any person except to employees of BLM, or to
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employees of WCCS who need to know in order to perform their
duties and who agree in writing to use the BLM Confidential
Information only to assist WCCS in performance of WCCS'
duties hereunder;
(c) shall take or cause to be taken all reasonable precautions
to prevent the disclosure of communication of BLM
Confidential Information to third parties;
(d) agrees that each reproduction, duplication, or copy of any
portion of BLM Confidential Information shall be deemed BLM
Confidential Information for all purposes hereunder; and
(e) shall, upon expiration or termination of this Agreement,
discontinue all use of BLM Confidential Information and
return all documents containing BLM Confidential Information
to BLM.
20. This Agreement contains the entire Agreement between BLM and
WCCS with regard to the subject matter of this Agreement and no
modification, change or amendment will be valid unless executed by both
parties in a signed writing. All agreements, understandings or
representations, oral or written, are superseded by and merged with this
Agreement and BLM and WCCS acknowledge that all other agreements pertaining
to or relating
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to the performance of the services contemplated by this Agreement are
merged herein.
21. BLM and WCCS each acknowledge that it has reviewed this
Agreement and participated in its negotiation and drafting and this
Agreement may not be construed against either BLM or WCCS as the drafter.
22. This Agreement will be construed in accordance with the laws
of California without regard to the choice of law provisions thereof.
If you agree with the terms of this Agreement, please sign and
return the enclosed copy.
Very truly yours,
WESTERN CENTER FOR
CLINICAL STUDIES, INC.
By: /s/ ROY AZARNOFF
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AGREED TO THIS 24TH DAY OF OCTOBER, 1998
BRITISH LION MEDICAL, INC.
By: /s/ LOIS REZLER
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Enclosures
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