EXHIBIT 10.10
*CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT*
EXCLUSIVE PATENT AND KNOW HOW LICENSE OPTION AGREEMENT
This Exclusive Patent and Know How License Option Agreement (this "AGREEMENT"),
effective as of December 28, 2005 (the "EFFECTIVE DATE"), is entered into by and
between SAFETEK INTERNATIONAL, INC., a corporation organized under the laws of
the State of Delaware, directly or through one of its subsidiaries (the
"COMPANY"), and MATRIX PHARMA INC., a privately held Delaware company
("MATRIX").
R E C I T A L S
WHEREAS, Matrix has developed Thrombin Inhibitor compounds with potential
therapeutic value ("COMPOUNDS"); and
WHEREAS, Matrix has commenced the R&D Program (as defined below), it shall
continue its conduct after the date hereof and fund it independently according
to the terms set forth herein, and it anticipates with no guarantee of success
that the oral bio availability of the Compound will be achieved and the First
Milestone will be obtained by it prior to January 31, 2006; and
WHEREAS, Matrix confirms that it is the sole and exclusive owner or sublicensee
of all rights to the Compounds; and
WHEREAS, Matrix desires to grant the Company an Option to obtain an exclusive
license to the Compounds upon the terms and conditions hereinafter set forth;
and
WHEREAS, the Company desires to obtain an Option for an exclusive license to the
Compounds, upon the terms and conditions hereinafter set forth; and
WHEREAS, the Company desires to enter into research and development program for
the development of License Products based on the Compounds after the exercise of
the Option, subject to the terms set forth herein and in the R&D Agreement; and
WHEREAS, Matrix is willing to assist the Company with the development of the
Licensed Product and to provide it with research and development services under
the terms set forth herein and in the R&D Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1 DEFINITIONS
1.1 "AFFILIATE" means any Person directly or indirectly controlling,
controlled by, or under common control with such other Person.
1.2 "BANKRUPTCY EVENT" of a Person means any event where such Person:
(i) shall become insolvent; (ii) shall apply for or consent to the
appointment of any liquidator, receiver, trustee or administrator
for all or a substantial part of its business, properties, assets or
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revenues; (iii) a liquidator, receiver, trustee or administrator
shall be appointed for such Person; (iv) a bankruptcy, arrangement,
readjustment of debt, dissolution, liquidation or similar executory
or judicial proceeding shall be instituted against such Person; or
(v) such Person shall call a creditors' meeting for the purpose of
entering into an arrangement with them.
1.3 "EXERCISE DATE" means March 31, 2006.
1.4 "FIELD" means antithrombotics, including anticoagulants,
antiplatelets and thrombolytics classes and specifically Thrombin
inhibitors, for treatment of thrombosis and thromboembolic diseases.
1.5 "GOVERNMENTAL AGENCY" means any local, regional, state, foreign or
other governmental agency, instrumentality, commission, authority,
board or body.
1.6 "INTELLECTUAL PROPERTY RIGHTS" means any and all intellectual
property rights, including without limitation patents, patent
applications, any copyrights and registrations and applications for
registration thereof, computer software, programs, data and
documentation, technology, trade secrets and confidential business
information, whether patentable or non-patentable and whether or not
reduced to practice, know-how, designs, prototypes, laboratory
protocols, enhancements, improvements, works-in-progress, research
and development information, and other proprietary rights relating
to any of the foregoing (including without limitation remedies
against infringements thereof and rights of protection of an
interest therein under the laws of all jurisdictions).
1.7 "LICENSE" shall have the meaning set forth in Section 3.1 hereunder.
1.8 "LICENSE TERM" shall mean the term of the License which shall
commence upon the exercise of the Option and shall remain in effect
until terminated in accordance with the provisions of this
Agreement.
1.9 "LICENSED PRODUCT" shall mean the Compounds, or any part thereof,
and/or any new Intellectual Property Rights developed made,
conceived or created (including through third party contractors)
containing any inventions, innovations and other improvements,
resulting from the Compounds or any part thereof and/or are deriving
from and/or containing the Compounds and/or any part thereof.
1.10 "LIEN" means any mortgage, pledge, security interest, encumbrance,
lien right of third party or charge of any kind (including any
conditional sale or other title retention agreement or lease in the
nature thereof), any trust, any filing or agreement to grant,
deposit or file a pledge or financing statement as debtor under
applicable law, or any subordination arrangement in favor of another
person.
1.11 "MATRIX IP" means any proprietary technologies, know-how and
Intellectual Property Rights of Matrix Ltd. required for the conduct
of Matrix's obligations pursuant to the R&D Agreement and/or this
Agreement, whether existing today or in the future, all subject to
section 3.7 herein.
1.12 "MATRIX LTD" means Matrix Advanced Solutions Limited.
1.13 "NET RIGHTS INCOME" means any net income actually generated and
received, directly or indirectly, by the Company and/or on its
behalf in connection with the Licensed Products and/or Compounds,
other than Net Sales, resulting from the grant of any rights to
third parties which are Subsidiaries of the Company, directly or
indirectly, in the Territory, with respect to any Licensed Product
and/or Compounds or any part thereof (e.g., sale, transfer, license,
sublicense, commercial rights, etc.)("RIGHTS"), less any Deductions
(as defined in Section y1.14 hereunder) applicable to such income.
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1.14 "NET SALES" shall mean the revenue actually received by the Company
or on its behalf, directly or indirectly, from sales of Licensed
Product and/or Compounds or any part thereof in Territory, less the
following deductions to the extent: (i) such amounts have been
incurred by the Company in connection with such sales; (ii) have
been included in the amounts invoiced; and (iii) thereafter actually
allowed or taken, ("DEDUCTIONS"):
1.14.1 Brokers' or agents' commissions actually allowed and taken;
1.14.2 Trade, cash and/or quantity discounts allowed, if any;
1.14.3 Actual returns or rejections of Licensed Products for which
Royalty was paid or payable hereunder;
1.14.4 Value-added taxes, sales taxes, excise taxes and other
governmental charges based directly on sales, turnover or
delivery of the Licensed Products actually paid or allowed;
1.14.5 Duty; and
1.14.6 Freight charges paid for delivery and other transportation
costs, including insurance charges, duties and tariffs.
1.15 "NON COMPETE FIELD" means the field of Thrombin Inhibitors used to
inactivate or sequester thrombin.
1.16 "OPTION" shall have the meaning set forth in Section 2.1 hereunder.
1.17 "PERSON" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
1.18 "QUALIFIED ENTITY" means established pharmaceutical corporation
which is a production, marketing or research leader with an annual
turnover exceeding US$20,000,000 or company valuation of at least
US$100,000,000.
1.19 "REPORTING PERIOD" means each calendar quarter during the License
Term.
1.20 "R&D AGREEMENT" shall have the meaning set forth in Section 5.1
hereunder.
1.21 "SCIENTIFIC ARBITRATOR" shall have the meaning set forth in Section
20.1 hereunder.
1.22 "STEERING COMMITTEE" shall have the meaning set forth in Section 6
hereunder.
1.23 "SUB-LICENSEE" shall mean any sub-licensee, whether direct or
indirect, of the rights herein.
1.24 "SUBSIDIARY" means, with respect to any Person, its wholly owned
subsidiary.
1.25 "TERRITORY" shall mean world-wide.
1.26 the terms "MILESTONE", "FIRST MILESTONE", "SECOND MILESTONE", "THIRD
MILESTONE", ""FOURTH MILESTONE", "FIFTH MILESTONE", "STAGE OF
DEVELOPMENT", "FIRST STAGE OF DEVELOPMENT", "SECOND STAGE OF
DEVELOPMENT", "THIRD STAGE OF DEVELOPMENT", and "FOURTH STAGE OF
DEVELOPMENT", "FIFTH STAGE OF DEVELOPMENT" shall have the meaning
ascribed to them in Exhibit 5.1.
2 THE OPTION
2.1 The Company is hereby granted an option to obtain License (the
"OPTION"). The Option will be exercisable by the Company by
providing Matrix with written notice not later then the Exercise
Date, such notice containing the Company's undertaking to initiate
the R&D Program and fund the First Stage of Development and the
Second Stage of Development pursuant to the R&D Program and pursuant
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to the terms of this Agreement (the "EXERCISE NOTICE"). Upon the
receipt of the Exercise Notice and repayment of the costs as set
forth in Section 2.3 by Matrix the Company shall be granted the
License, automatically and without any further action.
2.2 For the avoidance of doubt, the Company does not undertake to
exercise the Option, and it shall be the Company's decision, in its
sole discretion, whether to exercise the Option, including (without
limitation of the generality of the aforesaid), as the result of the
IP due diligence conducted by the Company. Notwithstanding any other
provision of this Agreement, in the event that (i) the Company
decides not to exercise the Option as a result of due diligence
conducted, which reveals the likelihood of invalidation of, or
infringement by, any of the patents listed in the IP Due Diligence
report provided November 11th, 2005 ("MATERIAL ISSUE"), and (ii)
Matrix did not disclose the Material Issue to the Company prior to
the Closing Date (as defined hereunder), and (iii) the Company
notifies Matrix of its decision not to exercise the Option within 45
days of the Closing Date, then US$ 30,000, constituting one half of
the Advance, shall be returned to the Company within 90 days from
the Company's notification of its decision not to exercise the
Option due to the above circumstances.
2.3 Upon the exercise of the Option, and subject to Section 3.2 of the
R&D Agreement, the Company shall reimburse Matrix for the costs of
its work as part of the First Stage of Development until such date
(less the Advance of US$60,000) ("MATRIX INTERNAL R&D"). For the
avoidance of doubt, upon the exercise of the Option and repayment to
Matrix of costs of work pursuant to this Section, all Matrix
Internal R&D shall be deemed to be conducted by Matrix for the
Company under the R&D Agreement.
2.4 If the Company fails to exercise the Option until the Exercise Date,
all Matrix Internal R&D shall remain the sole and exclusive property
of Matrix and the Agreement shall be regarded to as terminated
according to Section y17.617.5.
2.5 Matrix hereby undertakes, to provide the Company with any
documentation and details, including, without limitation, financial
reports, as shall be required by the Company in order to fully
comply with any applicable reporting requirements of the SEC (as
defined below) in timely manner, including, without limitation, the
submission of financial statements of Matrix, and, to the extent
required, the relevant financial reports of its parent company
Matrix Ltd. and prepared in accordance with US GAAP (the "MATRIX
DOCUMENTATION"), to be provided to the Company by February 15, 2006.
All direct and indirect expenses with regards to such Matrix
Documentation shall be equally divided between the parties up to
US$30,000, provided that if it is determined that Matrix
Documentation requested by the Company and prepared by Matrix was
not in fact required by the Company in order to fully comply with
any applicable reporting requirements of the SEC then the entire
cost of preparation of such documentation shall be borne by the
Company. Any expense over US$30,000 will be paid by Company and
Matrix will be fully reimbursed for such sum. In addition, all
documentation of NSCI Novel Science International GmbH ("NSCI")
required by the Company pursuant shall be provided to the Company by
NSCI, according to NSCI letter in the form attached hereto as
EXHIBIT 2.5 (the "NSCI Letter"). To prevent any doubt, Matrix shall
not be responsible for the performance of NSCI's undertakings and
obligations hereunder.
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3 THE LICENSE
3.1 Subject to the exercise of the Option by the Company, Matrix hereby
grants the Company, an exclusive (subject to Sections y3.2, y12.2
and 17.3 hereunder), irrevocable for the License Term, transferable
(subject to the terms of Section y3.3 herein), royalty bearing
license, for the License Term, to research, develop, perform,
produce, make, have made, use, market, sell, lease, dispose, copy,
modify, lease, distribute, display, bundle, sub-license, import,
export and commercialize the Licensed Products and/or Compounds in
the Territory, including, without limitation, through the grant of
Right (the "LICENSE").
3.2 Matrix agrees that, unless otherwise agreed between the Company and
Matrix in advance and in writing, in order to establish the
exclusivity of the License granted pursuant to Section y3.1 above
and subject to Section y12.2 hereunder, for the License Term, Matrix
shall not grant any other license, to research, develop, perform,
produce, make, have made, use, market, sell, lease, dispose, copy,
modify, lease, distribute, display, bundle, sub-license, import,
export or commercialize: (a) the Compounds; and (b) in the Field,
for a period of three (3) years from the Option Exercise Date, any
other compounds owned or developed by Matrix prior to or during the
License Term, and (c) in the Non-Compete Field, without limitation
on period, , any other compounds owned or developed by Matrix prior
to or during the License Term, all subject to the terms set forth
herein.
For the avoidance of doubt, the exclusivity granted hereunder shall
not apply with respect to general know how of Matrix which is
customary knowledge of Persons operating in the Field, or with
respect to any patent underlying the Compounds in the case of expiry
or invalidity of such patent.
3.3 The Company may, grant sublicenses or other Rights to Licensed
Products and/or Compounds to Affiliates or other Persons, in an arms
length bona fide transaction ("SUB-LICENSE") provided that the
Company shall incorporate terms and conditions into its Sub-License
agreements sufficient to enable the Company to comply with this
Agreement, and the Sub-Licensee must provide that the obligations of
the Company under this Agreement shall be binding upon the
Sub-Licensee as if it were a party to this Agreement. In the event
that this Agreement is terminated while the Sub-Licensee is in
compliance with its Sub-License, Matrix agrees to grant to such
Sub-Licensee, at such Sub-Licensee's request, a direct license to
the rights sublicensed under the Sub-License, on substantially the
same terms and conditions of this Agreement, provided that Matrix
may require adequate assurances protecting its rights and economic
benefit.
3.4 Matrix shall be responsible to have each and every Person that may
materially participate in any future research activity of Matrix
with regards to the Compounds, or that may be exposed to any
material part of the technology or information underlying the
License, execute a confidentiality and acknowledgement agreement in
a form acceptable to Company, in which such person shall undertake
to abide by the obligations stated in this Section 3, and the
confidentiality obligations herein. At the request of the Company,
Matrix shall provide the Company with a list of all Persons involved
in such future research and shall provide the Company with copies of
all undertakings signed by such Persons.
3.5 Subject to Section hereafter, neither Matrix nor any of its
shareholders, directors, officers, employees or other
representatives or agents, nor any other Person involved in any
future research by Matrix, shall have the right to publish any
material, including but not limited to articles and papers, that
incorporate information relating to the Compounds which can effect
their patentability, unless Matrix has prepared and filed an
appropriate patent applications to protect its rights in such
information and the commercial interest of the Company;
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3.6 Neither Matrix nor any of its shareholders, directors, officers,
employees or other representatives or agents, nor any other Person
involved in any future research by Matrix, shall take any action or
enter into any agreement after the date hereof relating to the
Licensed Products and/or the Compounds during the License Term,
which is inconsistent with the provisions hereof, (including,
without limitation, making any disposition of the Compounds,
including by way of transfer, option grant, mortgage, pledge or
otherwise).
3.7 Matrix hereby undertakes to exploit the Matrix IP, if required, in
order to provide the services pursuant to the R&D Agreement. Matrix
hereby undertakes that, for a period of three (3) years from the
Effective Date, Matrix will be provided by Matrix Ltd. and by any of
the subsidiaries and affiliates of Matrix Ltd. (together, the
"RELATED PARTIES") with any services required in order to fully and
professionally fulfill the obligations of Matrix hereunder and
pursuant to the R&D agreement ("MATRIX IP SERVICES"). For the
avoidance of doubt, and notwithstanding any other provisions of this
Agreement or the R&D Agreement, Matrix IP Services shall be subject
to any reasonable request of the Company, and provided at the cost
price of such Matrix IP Services to the Related Parties, provided
that if Matrix. ceases to be a wholly owned subsidiary of Matrix
Ltd. and following such cessation the cost to Matrix of the services
provided to Matrix by the Related Parties increases beyond the
actual cost of such services to such Related Parties, then the
parties hereto shall negotiate in good faith the possible increment
in the cost of the Matrix IP Services provided by Matrix to the
Company.
4 SUBLICENSE FEE AND PAYMENT TERMS
From and after the exercise of the Option, and in consideration of the
grant of rights hereunder, the Company undertakes to pay Matrix milestone
payments and royalties as follows:
4.1 Upon the completion of each Stage of Development, subject to Section
y6.3.4, or upon continuing to the next Stage of Development, which
shall automatically be regarded to as fulfillment of the previous
milestone, the Company shall pay to Matrix the applicable milestone
payments ("MILESTONE PAYMENTS") within 45 days of such completion,
as follows:
4.1.1 upon the achievement of the First Milestone at the completion
of the First Stage of Development - an amount of *;
4.1.2 upon the achievement of the Second Milestone at the completion
of the Second Stage of Development - an amount of *;
4.1.3 upon the achievement of the Third Milestone at the completion
of the Third Stage of Development - an amount of *;
4.1.4 upon the achievement of the Fourth Milestone at the completion
of the Fourth Stage of Development - an amount of * ; and
4.1.5 upon the achievement of the Fifth Milestone at the completion
of the Fifth Stage of Development - an amount of *;
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* Omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
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4.2 Each Milestone Payments shall be paid, at the Company's discretion,
either by:
4.2.1 cash payment in U.S. dollars payable by means of a wire
transfer to a bank account designated by Matrix; or,
alternatively -
4.2.2 by the issuance of shares of Common Stock $0.0001 par value
each of the Company of the type listed in the Over the Counter
Bulletin Board or NASDAQ or any other exchange or other
quotation system which requires timely filings with the SEC,
to Matrix, in such amount to be determined by dividing the
applicable Milestone Payment by the average closing sale price
per share at which such shares (the "SHARES") were traded
during the last 60 days prior to the issuance of such Shares,
and subject to the following terms and conditions:
4.2.2.1 The Shares, if and when issued and allotted, will be
duly authorized, validly issued, fully paid,
non-assessable, and free of any preemptive rights, will
be issued free and clear of any Liens or transfer
limitations other than as provided under applicable
securities laws and duly registered in the Company's
stock ledger.
4.2.2.2 Matrix represents to the Company that it understands
that the Shares it may receive hereunder are "restricted
securities" under the United States securities laws
since the Shares are being acquired from the Company in
a transaction not involving a public offering, and that
under such laws and applicable regulations the Shares
may not be resold without registration under the
Securities Act of 1933, as amended, or an exemption from
registration. Matrix further understands and
acknowledges that the Company has no obligation to file
a registration statement under the Securities Act of
1933, as amended, for the Shares or to otherwise assist
Matrix in complying with any exemption from
registration. Matrix further represents that it is
familiar with Rule 144 promulgated under the Securities
Act of 1933, as amended, and understands the resale
limitations imposed thereby and by the Securities Act of
1933, as amended.
4.2.2.3 Matrix further represents and warrants that the
following representations and warranties are correct and
complete as of the date of the Agreement, and will be
correct and complete on the date that the Option is
exercised:
(a) Matrix will be acquiring the Shares for its
own account as principal, not as a nominee or agent, for
investment purposes only, and not with a view to, or
for, resale, distribution or fractionalization thereof
in whole or in part and no other person has a direct or
indirect beneficial interest in such Shares or any
portion thereof. Further, Matrix does not have any
contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such
person or to any third person, with respect to the
Shares or any part thereof.
(b) Matrix is not subscribing for the Shares as a
result of or subsequent to any advertisement, article,
notice or other communication published in any
newspaper, magazine or similar media or broadcast over
television or radio, or presented at any seminar or
meeting, or any solicitation of a subscription by person
previously not known to Matrix.
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(c) Matrix further represents and warrants to and
agrees with the Company and its affiliates as follows:
(i) Matrix realizes that the basis for
the exemption may not be present if,
notwithstanding such representations, the
undersigned has in mind merely acquiring the
Shares for a fixed or determinable period in the
future, or for a market rise, or for sale if the
market does not rise. The undersigned does not
have any such intention;
(ii) Matrix has such knowledge and
experience in financial and business matters as
to be capable of evaluating the merits and risks
of the prospective investment in the Shares.
Matrix also represents it has not been organized
for the purpose of acquiring the Shares;
(iii) Matrix has been provided an
opportunity for a reasonable period of time
prior to the date hereof to obtain information
concerning the Company and all other information
to the extent the Company possesses such
information or can acquire it without
unreasonable effort or expense;
(iv) Matrix has carefully reviewed all
of the Company's filings under the Securities
Exchange Act of 1934, as amended. Matrix further
understands that the Company has not filed its
Form 10-QSB which was due to be filed by
November 14, 2005 and will be de-listed from the
Over the Counter Bulletin Board.
(v) Matrix is not relying on the
Company, or its affiliates or agents with
respect to economic considerations involved in
this investment. Matrix undersigned has relied
solely on its own advisors;
(d) No representations or warranties have been
made to Matrix by the Company, or any officer, employee,
agent, affiliate or subsidiary of the Company, other
than the representations of the Company contained
herein, and Matrix is not relying upon any
representations other than those contained herein.
(e) Each certificate representing the Shares shall
be endorsed with the following legends, in addition to
any other legend required to be placed thereon by
applicable federal or state securities laws:
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"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i)
PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT
WITH RESPECT TO THESE SECURITIES, OR (ii) PURSUANT TO A
SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT BUT ONLY UPON A HOLDER HEREOF FIRST
HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE
CORPORATION, OR OTHER COUNSEL REASONABLY ACCEPTABLE TO
THE CORPORATION, THAT THE PROPOSED DISPOSITION IS
CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE
SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR
SIMILAR SECURITIES LAW."
(f) Matrix consents to the Company making a
notation on its records or giving instructions to any
transfer agent of the Company in order to implement the
restrictions on transfer of the Shares set forth herein.
(g) Matrix understands that an investment in the
Shares is a speculative investment which involves a high
degree of risk.
(h) Matrix is aware that no federal or state
agency has (i) made any finding or determination as to
the fairness of this investment, (ii) made any
recommendation or endorsement of the Shares or the
Company, or (iii) guaranteed or insured any investment
in the Shares or any investment made by the Company.
(i) Matrix understands that the price of the
Shares offered hereby bear no relation to the assets,
book value or net worth of the Company and were
determined arbitrarily by the Company. The undersigned
further understands that there is a substantial risk of
further dilution on the Company's shares.
4.2.2.4 Notwithstanding the aforesaid, after the date that
Matrix is issued Shares, if at any time the Company
intends to file a registration statement under the US
Securities Act of 1933, as amended, for its securities
for its own account or for the account of a third party
(other than a registration of securities issuable on
Forms S-4, S-8 or any similar form available for the
Company, or any successor form thereto pursuant to an
employee share option, share purchase or similar benefit
plan, or pursuant to a merger, exchange offer or a
registration on any registration form which does not
include substantially the same information as would be
required to be included in a registration statement
covering the resale of the Shares), it shall give a
written notice to Matrix of such intention. Upon the
written request of Matrix given within twenty (20) days
after its receipt of any such notice, the Company shall
use its reasonable efforts to include in such
registration all of the then outstanding Shares which
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Matrix holds and indicated its desire to register in
such request, so as to permit the disposition of the
shares so registered, subject to Matrix agreeing to sign
any underwriting agreement in customary form to which
the Company or it stockholders may be a party and
agreeing to such lockup obligation and other obligations
related to the registration that are applicable to all
other shareholders who hold at least 2% of the issued
and outstanding shares of the Company that participate
in such registration.
Notwithstanding the aforesaid, in the event of an
underwritten offering, if the managing underwriters
advise Matrix in writing that in their opinion the
number of securities included in the registration
requests exceeds the number that can be sold in such
offering without adversely affecting the ability to
effect an orderly distribution of the registered
securities, the Company will be entitled to subordinate
the registration of the Shares to the registration of
securities by the Company for its own account.
Additionally, and notwithstanding anything to the
contrary in the first paragraph of this Section 4.2.2.4,
if the Company is requested to register the Shares
together with the registration of third parties'
securities as part of the purchase from the Company of
such securities by such third parties then the
registration of the Shares may be subject by the Company
to a special lock-up for a period of six months,
regardless of whether or not such third parties'
securities are subject to lock-up.
The registration rights granted to Matrix under this
Section 4.2.2.4 shall terminate with respect to any
Shares upon the earlier of (i) the lapse of 5 years
following the issuance by the Company of such Shares;
and (ii) if and for so long as such Shares can be sold
freely without registration under the Securities Act
(such as under Rule 144 or any successor thereof). In
the event of an underwritten offering, if the managing
underwriters advise Matrix in writing that in their
opinion the amount of securities proposed to be sold in
such underwritten offering exceeds the amount that can
be sold in such underwritten offering, then there shall
be included in such underwritten offering the number of
Shares which in the opinion of the managing underwriters
can be sold. Without limiting the generality of the
foregoing, in the event Matrix is at any time able to
sell Shares under Rule 144(k) and thereafter is unable
to do so due to its status as an affiliate of the
Company, Matrix's rights under this section will be
reinstated with respect to all of the Shares held by
Matrix.
4.2.2.5 Matrix shall solely bear all tax consequences arising
from this Section 4.2.2, including the issuance of the
Shares and their sale. Matrix will indemnify the Company
against and hold it harmless from, any liability for
such tax liability or interest or penalty thereon,
including, without limitation, liabilities relating to
the necessity to withhold, or to have withheld, any such
tax.
4.2.2.6 Upon each and every issuance of Shares to Matrix
hereunder, the Company shall deliver to Matrix the
following documents:
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(i) A stock certificate representing the Shares issues
to Matrix;
(ii) Opinion of the legal counsel for the Company in
the form of EXHIBIT 4.2.2.6 hereto;
(iii) A good standing certificate from the Secretary of
the State of Delaware dated as of the date of the
issuance of such Shares.
4.2.2.7 Upon the holding by Matrix of at least 20% of Company
shares on a fully diluted basis, Matrix will be
entitled, upon its sole discretion, to nominate a
director to the Company's slate.
4.2.3 If at any time after the exercise of the Option the shares of
common stock of the Company are not listed on the Over the
Counter Bulletin Board, or any other exchange or other
quotation system which requires timely filings with the SEC ,
the Company shall still be entitled to pay the next Milestone
Payment which is due in Shares, provided that the fair value
of said Shares shall be determined in accordance with the good
faith decision of the Company's Board of Directors which value
shall not be less than the lowest price per share paid for the
Company stock in the then past twelve-month period. Subsequent
to such Milestone Payment being made in Shares, the Company
shall pay any future Milestone Payments only by cash until the
shares of the Company become listed on the Over the Counter
Bulletin Board, or any other exchange or other quotation
system, which requires timely filings with the SEC, at which
time the Milestone Payments can be made in Shares or cash, in
the discretion of the Company.
4.3 In addition to the Milestone Payments, Matrix will be entitled to
receive during the License Term royalties of * of any and all Net
Sales or any and all Net Rights Income (including such Net Sales or
Net Rights Income which were intended to be received by the Company
and were received by other Person in lieu of the Company according
to the Company's instructions) (the "ROYALTIES"), subject to the
following terms and conditions:
4.3.1 Payment of Royalties shall continue during the License Term as
long as the applicable Licensed Products and/or Compounds are
covered by a valid patent. Notwithstanding the above, if it
has been agreed with a third party that royalties or other
payment with respect to certain Licensed Products and/or
Compounds shall be paid even after the expiration of relevant
patent(s) during the License Term ("POST PATENT PAYMENTS"),
the Company shall continue paying Royalties to Matrix on Net
Rights Income and/ or Net Sales during such time that the
Company or anyone on its behalf receives such royalties or
other payment from such third party. For the purpose of this
Section, the term Post Patent Payment will regard to all such
payments which were intended to be received by the Company and
were received by other Person in lieu of the Company. For the
voidance of doubt, in the event that lower royalties or
payments are received after such expiration, the Royalties
shall be reduced accordingly but shall remain, at all times
including after such expiration, at a rate of * of the total
Net Rights Income and/or Net Sales if and as reduced.
- ----------
* Omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
-12-
4.3.2 All payments of Royalties should be in U.S. dollars, payable
by means of a wire transfer to a bank account designated by
Matrix. The Royalties shall become due and payable within 30
days of the end of each Reporting Period, and shall be
calculated with respect to the preceding Reporting Period.
4.3.3 In the event that any Licensed Product and/or Compounds are
sold in form of a combination product containing one or more
products other than the Licensed Product and/or Compounds
("COMBINATION PRODUCT"), the amount of revenue to be included
in the Net Sales hereunder for such Combination Product shall
be calculated by multiplying the Net Sales of the Combination
Product by the fraction A/(A+B), where A is the invoice price
of the Licensed Product and/or Compounds if sold separately
and B is the total invoice price of all the other products in
the Combination Product ("OTHER Products"), if sold separately
by the Company or anyone on its behalf. In the event that any
Licensed Product, Compounds or such Other Product is not sold
separately, than the parties hereto shall, in good faith,
agree to the values applicable to A and B which reflect the
prices of such Licensed Product, and/or Compounds and such
Other Product, respectively, as if they were to be sold
separately. The provisions of this Section shall also apply to
any grant of Rights by the Company resulting with Net Rights
Income of Combined Product, mutatis mutandis.
4.3.4 Company shall make all Royalty payments to Matrix under this
Agreement according to its terms. If any payment made by
Company under this Agreement is required by law to be subject
to withholding tax, such withholding tax shall be borne by
Matrix and shall be deducted from the payments by Company.
Notwithstanding the above, Company shall not deduct
withholding taxes from the payments if Matrix provides Company
all the necessary documentation from the applicable tax
authorities allowing it not to deduct withholding taxes.
4.4 Matrix confirms that payment under the R&D Agreement, the Advance,
the Milestone Payments and the Royalties shall be the full, complete
and final consideration that Matrix is entitled to in connection
with the License granted hereunder, and Matrix shall not be entitled
to any additional fee, commission, royalty, securities,
reimbursement of expenses or other payment.
5 THE RESEARCH & DEVELOPMENT PROGRAM
5.1 By the Closing Date, the Steering Committee shall define a detailed
research and development program for the development of Compounds
and the development of License Products by the Company based on the
Compounds (the "R&D PROGRAM"). The main Stages of Development, the
estimated duration for each Stage of Development, the estimated time
period from the conclusion of each Stage of Development until the
commencement of the next Stage of Development (the "PERIODS BETWEEN
STAGES") and the Milestone to be achieved upon the compilation of
each Stage of Development of such R&D Program are detailed in
EXHIBIT 5.1. Notwithstanding the provisions of Exhibit 5.1, it is
hereby agreed that if upon the completion of any Period Between
Stages the Company will be in substantial negotiations for the grant
of Sub-License or other Rights to a Qualified Entity, and such
Qualified Entity provided the Company with letter of intent or
similar written document (whether binding or non-binding) with
respect to such proposed transaction, then the applicable Period
Between Stages will be extended by an additional six (6) month
period.
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5.2 The estimated budget for each Stage of Development of the R&D
Program, to the extent preformed (the "COSTS") is detailed in
Exhibit 5.1 hereto (the "BUDGET").
5.3 Matrix has commenced the R&D Program, it shall continue its conduct
after the date hereof and fund it independently according to the
terms herein and it anticipates with no guarantee of success that
the oral bio availability of the Compound will be achieved and the
First Milestone will be obtained by it prior to January 31, 2006. On
the Closing Date the Company shall pay Matrix an advance in the
amount of US$35,000, in addition to an amount of US$25,000 that has
been advanced to Matrix by the Company on September 29, 2005, to
partially fund the First Stage of Development (collectively, the
"ADVANCE").
5.4 Upon the exercise of the Option it shall be the Company's decision,
in its sole discretion, whether to undertake the R&D Program or any
part thereof, or whether to request Matrix to provide it with
services pursuant to the R&D Agreement, provided however, that if
the Company exercised the Option, it shall be obliged to: (i)
conduct the First Stage of Development through Matrix; (ii) to fund
the First Stage of Development; and (iii) if the First Milestone
will be successfully achieved, to further fund the Second Stage of
Development.
5.5 The Company may conduct, according to reasonable industry standards
in the Field, the R&D Program or any part therefrom, other than the
First Stage of Development which will be conducted through the
services of Matrix pursuant to the R&D Agreement, through the
service of third parties or otherwise, at its premises or at the
premises of any third party, at the Company's sole discretion.
Matrix hereby undertakes to conduct all or any part of the R&D
Program with regards to the Compounds, or any Stage of Development,
all subject to reasonable request by the Company, pursuant to the
terms of the R&D Agreement and subject to the agreed payment. It is
hereby agreed that since Matrix holds certain unique know how, the
performance of the First Stage of Development, if preformed by the
Company, shall be solely through the services of Matrix under the
R&D Agreement.
5.6 For the avoidance of doubt, is it hereby clarified that the election
of certain Compound(s) as subject of the R&D Program will be the
Company's decision, at its sole discretion, after consultation with
Matrix and after reviewing the advice of the Steering Committee in
this matter and subject to Section 9 hereafter. In addition, and
based on the results of the R&D Program, the Company may request
that Matrix shall use and exploit the Matrix IP, according to the
Matrix IP Services and subject to section 3.7 above, in order to
improve certain Compound or develop new Compounds.
5.7 In the event that the R&D Program will indicate that certain
Compound may have potential therapeutic value in field other than
the Field (the "OTHER FIELD"), the Company may initiate research and
development program for the exploitation of the therapeutic value of
such Compound in such Other Field. In such case, it is hereby agreed
that Matrix will grant the Company a transferable, royalty bearing,
exclusive license (subject to other licenses Matrix has provided to
third parties in the Other Field) to use such Compound, in the
Territory in the Other Field, and the parties will negotiate in good
faith the terms of the research and development program and the
terms of the license for such Compound in the Other Field. Any
disagreement on any of the above terms shall be brought before, an
industrial expert, the identity of which shall be agreed by the
parties prior to the exercise of the Option, who shall solve the
deadlock to the best interest of both parties, and whose resolution
shall be final. The terms of Section 20 hereunder shall apply to
such arbitration, mutatis mutandis. Company shall provide Matrix
with general details of such exploitation in the Other Field which
do not harm the rights of third parties and its rights with regards
to such activities.
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5.8 The parties will work together to establish an advisory board for
the R&D Program in addition to the Steering Committee, with members
who are reputable experts in the Field.
6 STEERING COMMITTEE
6.1 Immediately following the Closing Date, the parties shall establish
a two-member committee (the "STEERING COMMITTEE"), each member of
which shall have a professional scientific background in the Field.
One member shall serve on behalf of the Company and one member shall
serve on behalf of Matrix.
6.2 The initial members of the Steering Committee shall be Prof. David
Varon on behalf of the Company, and Dr. Marcel Thurk, on behalf of
Matrix.
6.3 The Steering Committee shall have the following responsibilities:
6.3.1 to define a detailed R&D Program and Budget and, to the extent
required, amend or otherwise revise their terms;
6.3.2 to supervise and oversee the performance of the R&D Program,
including, without limitation, receiving and discussing the
reports presented to the Steering Committee in accordance with
the R&D Agreement or such other reports as shall be prepared
by the Company and Matrix at the request of the Steering
Committee;
6.3.3 to determine that certain Stage of Development, or any part
thereof, should be extended, including, without limitations,
if unexpected scientific difficulties or delays occurred, if
third party contactor fail to perform its obligations in
timely manner or if the actual costs of such Stage of
Development exceed the estimated costs as detailed in the
Budget attached on the date hereof, all through no fault of
the Company.
6.3.4 to determine whether a Milestone was successfully attained
upon dispute between the parties in this matter;
6.3.5 to advise whether certain Compound has potential therapeutic
value in the Field;
6.3.6 if a certain Milestone was not achieved according to this
Agreement and the R&D Program, the Steering Committee shall be
entitled to determine that, notwithstanding such failure, the
R&D shall continue for an additional 9 months.
6.3.7 to advise whether certain Compound has potential therapeutic
value in fields other than the Field;
6.3.8 to advise whether Matrix should use and exploit the Matrix IP,
through the R&D Agreement in order to improve certain Compound
or develop new Compound, based on the results of the R&D
Program;
6.3.9 Any other responsibility mutually agreed between the Company
and Matrix.
6.4 For the purpose of carrying out its responsibilities, the Steering
Committee may at any reasonable time consult with the management and
scientists of each Party who are involved in the R&D Program. Each
Party undertakes to offer all reasonable assistance to the members
of the Steering Committee that may be required for the Steering
Committee to fulfill its responsibilities hereunder.
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6.5 All decisions of the Steering Committee must be adopted by unanimous
consent of all the members thereof. In the event of a deadlock with
regard to a scientific matter only, which is subject to the
authority of the Steering Committee, this matter shall be brought
before a Scientific Arbitrator, who shall arbitrate the matter, as
provided in Section 20 hereof, and whose resolution shall be final.
6.6 The Steering Committee shall meet within 15 days from the Closing
Date, and thereafter from time to time as required, but at least
every four (4) months during the License Term, at a location to be
agreed upon in light of the substance of discussions, unless a
different location shall be agreed upon by the members of the
Steering Committee. Either member of the Steering Committee may
convene a meeting by giving notice to the other member at least 10
business days in advance and each member shall use his/her best
efforts to attend all meetings.
6.7 Within seven business days following each Steering Committee
meeting, the Steering Committee shall prepare a written summary of
such meeting which shall be provided to both parties. Such summary
shall include, at a minimum: (a) a list of all decisions made by the
Steering Committee; and (b) a report regarding the progress of the
R&D Program.
6.8 The CEO (or the designee of the CEO) and patent attorneys of each
Party shall be entitled to participate in any and all Steering
Committee meetings.
6.9 The expenses of each member of the Steering Committee shall be born
by the Party who designated such member to the Steering Committee.
7 REPRESENTATIONS OF MATRIX
Matrix represents and warrants to the Company that on the date hereof and
as of Closing:
7.1 Corporate Existence and Power. Matrix is a corporation duly
incorporated, validly existing and in good standing under the laws
of the State of Delaware, and has all corporate powers and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
7.2 Authorization; Execution and Delivery; No Violation. The execution,
delivery and performance of this Agreement and each of the ancillary
agreements and all the other agreements, documents and instruments
to be executed and delivered by Matrix pursuant hereto or entered
into in connection with the transactions contemplated hereby (the
"ANCILLARY AGREEMENTS") have been duly and validly authorized by all
necessary corporate action on the part of Matrix. This Agreement and
each of the Ancillary Agreements have been duly executed and
delivered by Matrix, constitute the valid and binding obligations of
Matrix, and are enforceable in accordance with their respective
terms. The execution, delivery and performance of this Agreement and
each of the Ancillary Agreements by Matrix do not and will not
violate, conflict with, result in a breach of or constitute a
default under or result in the creation of any lien under (a) the
Certificate of Incorporation, Bylaws or Articles of Association, as
applicable, of Matrix, as amended to date, (b) any agreement,
contract, license, instrument, lease or other obligation to which
Matrix is a party or by which it is bound, (c) to the best of its
knowledge and following its due inquiry, any judgment, order,
decree, ruling or injunction or (d) to the best of its knowledge and
following its due inquiry, any statute, law, regulation or rule of
any Governmental Agency applicable to Matrix or by which any of its
properties or assets or business may be bound.
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7.3 Consents and Approvals. To the best of its knowledge and following
its due inquiry, no registration or filings with, notices to, or
consent, approval, permit, authorization or action of, any third
party (including any Governmental Agency or other Person) is
required in connection with the execution and delivery by Matrix of
this Agreement, the Ancillary Agreements or any other agreement,
document and instrument to be executed and delivered by Matrix
pursuant hereto or in connection with the consummation of the
transactions contemplated hereby or thereby.
7.4 Taxes. There are no unpaid taxes, assessments or public charges of
any type or nature whatsoever, due or payable to any federal, state
or local Governmental Agency (including, without limitation, any
income, social security, unemployment insurance, worker's
compensation premiums, withholding, sales, use, excise, franchise
and other taxes and charges, any deposits required to be made with
respect thereto, and all penalties and interest charges thereon)
which are or could become a Lien or charge against or otherwise
affect any of the Compounds or any interest therewith.
7.5 Litigation. To the best of its knowledge and following its due
inquiry, there are no actions, suits, proceedings, citations of any
Governmental Agency, claims or investigations instituted and
pending, or to the best knowledge of Matrix and following its due
inquiry, threatened against or affecting Matrix or any of its
Affiliates and involving, directly or indirectly, the Compounds.
There is no unsatisfied judgment against Matrix which is or could
become a Lien upon or affect the Compounds. Following its due
inquiry, Matrix has no knowledge of any litigation presently pending
in a court or other proceeding or governmental action (including
those of any taxing authorities) nor has Matrix received any service
of process for any complaint, temporary restraining order or
preliminary or permanent injunction or other notice whatsoever with
respect thereto, that could prohibit or interfere with the licensing
by Matrix to the Company of the Compounds.
7.6 Financial Statements; Books and Records. Matrix has furnished the
Company with its (i) internal and unaudited consolidated financial
statements as of March 31, 2005, June 30, 2005 and as of the date
hereof duly executed by Matrix; (ii) audited consolidated financial
statements as of and for the year ended October 31, 2004
(collectively, the "FINANCIAL STATEMENTS") and such Financial
Statements as were delivered to the Company on the date hereof.
7.7 Absence of Certain Changes. Since June 30, 2005, Matrix has
conducted its business only in the ordinary and usual course as
customary for a company in its position, and (i) there has not
occurred any events or changes concerning Matrix (including the
incurrence of any liabilities of any nature, whether or not accrued,
contingent or otherwise) having or reasonably likely to have,
individually or in the aggregate, a material adverse effect on
Company's rights under this Agreement, and (ii) to the actual
knowledge of Matrix and following its due inquiry, there has not
occurred any external event or change that is reasonably likely to
have a material adverse effect on Company's rights under this
Agreement.
7.8 Absence of Undisclosed Liabilities. Except as shown on the Financial
Statements, to the best of its knowledge and following its due
inquiry Matrix has no liabilities, claims, or obligations of any
nature, whether accrued, absolute, contingent, anticipated, or
otherwise, whether due or to become due.
7.9 Patent Rights
7.9.1 the Compounds owned or licensed by Matrix are listed in
EXHIBIT 7.9.1.
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7.9.2 to the best of its knowledge and following its due inquiry,
other than basic technologies that are available for "off the
shelf" licensing at customary rates, Matrix is and will remain
(subject to transfer or assignment pursuant to Section 13) the
true, lawful, and sole and exclusive owner or licensee of all
of the Matrix IP and Compounds, subject to the terms set forth
herein, and has and will have (subject to transfer or
assignment pursuant to Section 13) valid and marketable
exclusive title to all of the Compounds, free and clear of all
Liens; and Matrix has the absolute and unconditional right,
power, authority and capacity to license the Compounds to the
Company free and clear of all Liens. To the best of its
knowledge and following its due inquiry, the Compounds are
licensed to the Company free and clear of all Liens. To the
best of its knowledge and following its due inquiry, Matrix is
and will remain (subject to transfer or assignment pursuant to
Section 13) the true, lawful, and holder of all Intellectual
Property Rights required in order to conduct its business and
fulfill its obligation hereunder. All of Matrix Ltd.'s
Intellectual Property Rights in the Field or to be used in the
Field were licensed or otherwise transferred to Matrix.
7.9.3 to the best of its knowledge and following its due inquiry,
the Compounds and the Matrix IP do not infringe, violate or
conflict with any patent, copyright, trade secret or other
intellectual property of another Person.
7.9.4 to the best of its knowledge and following its due inquiry, no
claims with respect to the Compounds have been asserted or, to
the knowledge of Matrix and following its due inquiry, are
threatened by any Person, including without limitation, (i) to
the effect that the design, development, manufacture, sale,
licensing or use of the Compounds or any Licensed Product as
now used, sold or licensed or proposed for use, sale or
license by the Company infringes any copyright, patent, trade
secret or other intellectual property right of any third
party, (ii) challenging the ownership, validity or
effectiveness of any of the Compounds, or (iii) that any
Person other than Matrix has any ownership or economic
interest in any of the Compounds.
7.9.5 to the best of its knowledge and following its due inquiry,
there is no outstanding order, judgment, decree or stipulation
binding on Matrix, and Matrix is not a party to or bound by
any agreement, restricting the transfer or sale of any of the
Compounds or any use of any Compounds by the Company after the
date hereof.
7.9.6 to the best of its knowledge and following its due inquiry,
there is no unauthorized use, infringement or misappropriation
regarding any Compounds by any third party, including any
employee, former employee, consultant, distributor or customer
of Matrix.
7.9.7 Other then as detailed in section y7.9.1 above, there are no
outstanding options, licenses, or agreements of any kind
relating to Matrix's compounds in the Field nor is Matrix
bound by or a party to any options, licenses or agreements of
any kind with respect to any of the Compounds, including,
without limitation, any arrangements which impose, or may
impose in the future, any obligations on Matrix with regards
to the Compounds or any other compounds in the Field. Matrix
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has not granted to or assigned to any other Person any right
to manufacture, have manufactured, assemble or sell Licensed
Products. To the best of its knowledge and following its due
inquiry, Matrix is not obligated, under contract or by law, to
pay any compensation to any third party in respect of the use,
transfer or sale of any portion of the Compounds or any other
of its compounds in the Field.
7.9.8 To the best of its knowledge and following its due inquiry,
none of the former or present shareholders, employees,
consultants, officers or directors of Matrix or any
distributor, reseller, customer or vendors of Matrix owns,
directly or indirectly, or has any other right or interest in,
or claim to, in whole or in part, any of the Compounds. Each
current and former employee of or consultant to Matrix has
signed a proprietary information and inventions assignment
agreement protecting Matrix's rights in the Compounds.
7.9.9 To the best of its knowledge and following its due inquiry, at
no time during the conception of or reduction of any of the
Compounds to practice was any developer, inventor or other
contributor to the Compounds operating under any grants from
any Governmental Agency, performing research sponsored by any
Governmental Agency or private source or other obligation with
any third party that in each case could adversely affect
Matrix's rights in the Compounds or the Matrix IP.
7.9.10 Matrix has taken reasonable security measures to protect the
confidentiality and value of all the Compounds, which measures
are reasonable and customary in the industry in which Matrix
operates.
7.10 Compliance with Laws. To the best of its knowledge and following its
due inquiry, Matrix has all requisite licenses, permits and
certificates from federal, state and local authorities necessary to
own, use and sell the Compounds. Matrix is not in violation of, and,
to the knowledge of Matrix and following its due inquiry, is not
under investigation with respect to, and has not been threatened to
be charged with or given notice of any violation of, any law,
regulation or ordinance (including, without limitation, laws,
regulations or ordinances relating to environmental laws, building,
zoning, land use or similar matters) and with regards to any
liabilities, claims, or obligations of any nature, whether accrued,
absolute, contingent, anticipated, or otherwise, whether due or to
become due.
7.11 Finder. Neither Matrix nor any one on its behalf has retained the
services of any investment banker, broker, or finder in connection
with the transactions contemplated by this Agreement and no such
investment banker, broker or finder is entitled to any compensation
as a result of the transaction contemplated hereunder.
7.12 Disclosure. To the best of its knowledge and following its due
inquiry, neither this Agreement nor any other agreement, document,
certificate or written or oral statement furnished to the Company or
its counsel by or on behalf of Matrix in connection with the
transactions contemplated hereby contains any untrue statement of a
material fact. To the best of its knowledge and following its due
inquiry, there is no fact within the knowledge of Matrix or any of
its executive officers which has not been disclosed herein or in
writing by them to the Company and which could reasonably be
expected to have a materially adverse effect on the Company's rights
under the Agreement, or in the future in their reasonable opinion
may, insofar as they can now reasonably foresee, have a materially
adverse effect on the Company's rights under the Agreement, the
Licensed Products or the Compounds.
-19-
8 REPRESENTATIONS OF COMPANY
Company represents and warrants to Matrix that on the date hereof and as
of Closing:
8.1 Corporate Existence and Power. Company is a corporation duly
incorporated, validly existing and in good standing under the laws
of the State of Delaware, and has all corporate powers and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
8.2 Authorization; Execution and Delivery; No Violation. The execution,
delivery and performance of this Agreement and each of the ancillary
agreements and all the other agreements, documents and instruments
to be executed and delivered by Company pursuant hereto or entered
into in connection with the transactions contemplated hereby (the
"COMPANY ANCILLARY AGREEMENTS") have been duly and validly
authorized by all necessary corporate action on the part of the
Company. This Agreement and each of the Company Ancillary Agreements
have been duly executed and delivered by Company, constitute the
valid and binding obligations of Company, and are enforceable in
accordance with their respective terms. The execution, delivery and
performance of this Agreement and each of the Ancillary Agreements
by the Company do not and will not violate, conflict with, result in
a breach of or constitute a default under or result in the creation
of any lien under (a) the Certificate of Incorporation, Bylaws or
Articles of Association, as applicable, of the Company, as amended
to date, (b) any agreement, contract, license, instrument, lease or
other obligation to which Company is a party or by which it is
bound, (c) to the best of its knowledge and following its due
inquiry any judgment, order, decree, ruling or injunction or (d) to
the best of its knowledge and following its due inquiry any statute,
law, regulation or rule of any Governmental Agency applicable to
Company or by which any of its properties or assets or business may
be bound.
8.3 Consents and Approvals. To its best knowledge and following its due
inquiry, except for an 8-K which must be filed providing substantial
disclosure about this Agreement and Matrix's business, no
registration or filings with, notices to, or consent, approval,
permit, authorization or action of, any third party (including any
Governmental Agency or other Person) is required in connection with
the execution and delivery by Company of this Agreement, the Company
Ancillary Agreements or any other agreement, document and instrument
to be executed and delivered by Company pursuant hereto or in
connection with the consummation of the transactions contemplated
hereby or thereby.
8.4 SEC Filings. The Company has timely filed all required forms,
reports and documents with the United States Securities and Exchange
Commission (the "SEC"), each of which has complied in all material
respects with all applicable requirements of the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as
amended (collectively, the "SECURITIES ACTS") and the rules and
regulations promulgated thereunder, each as in effect on the dates
such forms, reports, and documents were filed. The Company has made
available to Matrix accurate and complete copies (excluding copies
of exhibits) of each report, registration statement and definitive
proxy statement filed by the Company with the SEC until the date of
this Agreement (the "COMPANY SEC DOCUMENTS"). As of the time it was
filed with the SEC (or, if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing): (i)
each of the Company SEC Documents, including, any financial
statements or schedules included or incorporated by reference
therein, complied in all material respects with the applicable
requirements of the Securities Acts; and (ii) none of the Company
SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
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8.5 Financial Statements. The audited and unaudited financial statements
contained in the Company SEC Documents: (i) complied as to form in
all material respects with the published rules and regulations of
the SEC applicable thereto; (ii) were prepared in accordance with US
GAAP applied on a consistent basis throughout the periods covered;
and (iii) fully present the financial position of the Company as of
the respective dates thereof and the results of operations of the
Company for the periods covered thereby, according to the US GAAP
and the information contained in the SEC Documents is or was
accurate and complete as of the date given. Except as and to the
extent disclosed in the Company SEC Documents, there has not been
any event, occurrence or development which does or could reasonably
be expected to have, individually or in the aggregate, a material
adverse effect on the Company. No stop order asserting that any of
the transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act of 1933, as amended
has been issued by the SEC. Neither the Agreement nor the Company
SEC Documents, taken as a whole, contain any untrue statement of
material fact or omit to state a material fact necessary to make the
statements made therein, in light of the circumstances under which
they were made, not misleading.
8.6 Litigation. Other then as detailed in the Company SEC Documents, to
the best of its knowledge and following its due inquiry there are no
(i) actions, suits, proceedings, citations of any Governmental
Agency, claims or investigations instituted and pending, or to the
best knowledge of Company, threatened against or affecting Company
or any of its Affiliates including those involving, directly or
indirectly, the Shares; or (ii) unsatisfied judgment against Company
which is or could become a Lien upon or affect the Shares and/or the
Company. Other then as detailed in the Company SEC Documents,
Company has no knowledge of any litigation presently pending in a
court or other proceeding or governmental action (including those of
any taxing authorities) nor has Company received any service of
process for any complaint, temporary restraining order or
preliminary or permanent injunction or other notice whatsoever with
respect thereto, that could prohibit or interfere with this
agreement and/or the R&D Agreement.
8.7 Compliance with Laws. To the best of its knowledge and following its
due inquiry Company has all requisite licenses, permits and
certificates from federal, state and local authorities necessary to
enter into this Agreement and to allocate Shares. Company is not in
violation of, and, to the knowledge of Company following its due
inquiry, is not under investigation with respect to, and has not
been threatened to be charged with or given notice of any violation
of, any law, regulation or ordinance (including, without limitation,
laws, regulations or ordinances relating to environmental laws,
building, zoning, land use or similar matters) and with regards to
any liabilities, claims, or obligations of any nature, whether
accrued, absolute, contingent, anticipated, or otherwise, whether
due or to become due.
8.8 Absence of Certain Changes. Since June 30, 2005, Company has
conducted its business only in the ordinary and usual course as
customary for a company in its position, and (i) other then as
detailed in the Company SEC Documents, there has not occurred any
events or changes concerning Company (including the incurrence of
any liabilities of any nature, whether or not accrued, contingent or
otherwise) having or reasonably likely to have, individually or in
the aggregate, a material adverse effect on Matrix, and (ii) to the
actual knowledge of Company and following its due inquiry, there has
not occurred any external event or change that is reasonably likely
to have a material adverse effect on Matrix's rights under this
Agreement and/or the R&D Agreement.
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8.9 Finder. Neither Company nor any one on its behalf has retained the
services of any investment banker, broker, or finder in connection
with the transactions contemplated by this Agreement and no such
investment banker, broker or finder is entitled to any compensation
as a result of the transaction contemplated hereunder.
8.10 Disclosure. To the best of its knowledge and following its due
inquiry neither this Agreement nor any other agreement, document,
certificate or written or oral statement furnished to Matrix or its
counsel by or on behalf of Company in connection with the
transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order
to make the statements contained herein or therein not misleading.
To the best of its knowledge and following its due inquiry there is
no fact within the knowledge of Company or any of its executive
officers which has not been disclosed herein or in writing by them
to Matrix and which has a materially adverse effect, or in the
future in their reasonable opinion may, insofar as they can now
foresee, have a materially adverse effect on Matrix, the rights set
forth in this Agreement and the R&D Agreement, and/or the Shares.
9 PATENT REGISTRATION AND PROSECUTION
9.1 Matrix shall be responsible, upon its sole discretion and at its own
expense, to apply for, seek prompt issuance of, and maintain the
Intellectual Property Rights for the Compounds during the term of
this Agreement, but the Company shall be given sufficient
opportunity to reasonably advise Matrix on the patent prosecution
and other prosecution related decisions regarding Intellectual
Property Rights related to the Compounds. The Company shall be
provided with written notification of not less than 60 days prior to
any patent or other Intellectual Property Rights prosecution
relating to Compounds. Matrix shall use its reasonable efforts to
obtain broad and strong patent and other Intellectual Property
Rights protection in the best interest of Matrix and the Company
with regards to the Compounds. Matrix undertakes to bear all costs
involved and/or to reimburse Matrix for all costs involved with
regards to such patents relating to the Compounds.
9.2 If Matrix elects not to initiate new patent prosecution of a
particular application or other new Intellectual Property Rights
prosecution regarding the Compounds, Matrix agrees to give the
Company sufficient notice in writing of its decision so that the
Company may elect, at its sole discretion and without requiring the
consent of Matrix or any of its shareholders, directors, officers,
employees or other representatives or agents, to file such patent
application or other Intellectual Property Rights prosecution
regarding the Compounds under its name and exclusive ownership (the
"TRANSFERRED IP"), and at its sole expense. In such event, such
patents or other Intellectual Property Rights relating to the
Compounds shall automatically be excluded from the License and the
Company shall be entitled to Matrix's interests in such patent
application or other Intellectual Property Rights prosecution
regarding the Compounds, as applicable, Matrix shall thereafter have
no further interest in same and Matrix shall - and shall cause all
others (as aforesaid) on its behalf to - fully cooperate with the
Company to effect such registrations and protections.
Notwithstanding anything to the contrary, Matrix may, within 12
months, inform the Company that it undertakes to continue to
prosecute and maintain the Transferred IP and repay the Company all
the reasonable IP expenses incurred by the Company with respect to
the Transferred IP, and in such case the Transferred IP shall return
to the exclusive ownership of Matrix according to Section 9.1.
9.3 If Company elects to discontinue patent prosecution or maintenance
of such Transferred IP, Company agrees to give Matrix sufficient
notice in writing of its decision (the "COMPANY NOTICE") so that
Matrix may elect and without requiring the consent of the Company or
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any of its shareholders, directors, officers, employees or other
representatives or agents, to continue prosecution or maintenance of
such Transferred IP under its name and exclusive ownership, and at
its sole expense. In such event, Matrix shall be entitled to
Company's full and exclusive interests in such Transferred IP and
the Company shall thereafter have no further interest in same and
the Company shall - and shall cause all others (as aforesaid) on its
behalf to - fully cooperate with Matrix to effect such registrations
and protections. For the avoidance of doubt, such Transferred IP
shall be subject to the License hereunder.
9.4 If Matrix elects to discontinue patent prosecution or maintenance of
a particular patent application, patent or other Intellectual
Property Rights prosecution or protection regarding the Compounds
(the "DISCONTINUED IP"), Matrix agrees to give the Company
sufficient notice in writing of its decision (the "NOTICE"). In such
event, the Company may decide, at its sole discretion, to inform
Matrix that Matrix is obliged to continue patent prosecution or
maintenance of such Discontinued IP, subject to the following terms
and conditions:
9.4.1 The Company shall reimburse Matrix for all its reasonable
expenses resulting from the patent prosecution or maintenance
of such Discontinued IP (the "IP EXPENSES");
9.4.2 The License granted hereunder shall continue to apply with
respect to such Discontinued IP, but the Milestone Payments
and the Royalties with respect to such Discontinued IP will be
reduced by fifty percent (50%). Notwithstanding the above,
Matrix may, within 12 months of the Notice, inform the Company
that it undertakes to continue to prosecute and maintain the
Discontinued IP and repay the Company all the reasonable IP
expenses incurred by the Company with respect to the
Discontinued IP. In such event, the reduced rate of Milestone
Payments and the Royalties pursuant to this Section shall be
cancelled, and shall return to be as generally agreed on in
Section y3 and y4 of this Agreement.
10 INFRINGEMENT
10.1 Each party agrees to provide written notice to the other party
promptly after becoming aware of any infringement of the Compounds
or Licensed Products.
10.2 Company shall for the License Term, and upon its sole discretion, at
Company's expense, act reasonably to prosecute any third party
infringement of the Compounds that may effect Matrix's obligations
hereunder, in the Territory. Prior to commencing any such action,
and while conducting such action, Company shall reasonably consult
with Matrix and shall not act against the reasonable views of Matrix
regarding the advisability and conduct of the proposed action, if
such views reasonably intends to protect the rights of Matrix under
this Agreement from such infringement. Company shall not enter into
any settlement, consent judgment, or other voluntary final
disposition of any infringement action under this Section that has
any direct or indirect effect on the rights of Matrix hereunder
without the prior written consent of Matrix which shall not be
unreasonably withheld. Should Company choose not to prosecute such
infringement, Matrix may, upon its sole discretion, prosecute such
infringement at its own expense, but in any event shall not be
required to do so.
10.3 Matrix agrees to cooperate in any action under this Section which is
controlled by the Company, at Company sole expense.
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11 INDEMNIFICATION
11.1 The Company shall indemnify, defend, and hold harmless Matrix and
its shareholders, directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "INDEMNITEES"),
against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses) incurred by or imposed upon
any of the Indemnitees in connection with any claims, suits,
actions, demands or judgments arising out of any theory of liability
(including without limitation actions in the form of tort, warranty,
or strict liability and regardless of whether such action has any
factual basis) concerning any, rights, product, process, or service
that is made, used, sold, imported, transferred, or performed by the
Company, its Affiliates and Sub-Licensees pursuant, directly or
indirectly, to any right or license granted under this Agreement
and/or the R&D Agreement, except if such liability, damage, loss, or
expense (including reasonable attorneys fees and expenses) is a
result of a breach by Matrix or any of its shareholders, directors,
officers, employees, and agents and their respective successors,
heirs and assigns of this Agreement and/or the R&D Agreement.
11.2 Matrix shall indemnify, defend, and hold harmless the Company and
its shareholders, directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "COMPANY
INDEMNITEES"), against any liability, damage, loss, or expense
(including reasonable attorneys fees and expenses) incurred by or
imposed upon any of the Company Indemnitees in connection with any
claims, suits, actions, demands or judgments arising out of any
theory of liability (including without limitation actions in the
form of tort, warranty, or strict liability and regardless of
whether such action has any factual basis) as a result of a breach
by Matrix or any of its shareholders, directors, officers,
employees, and agents and their respective successors, heirs and
assigns of this Agreement and/or the R&D Agreement or of another
action or omission of Matrix or any of its shareholders, directors,
officers, employees, and agents and their respective successors,
heirs and assigns with respect to the Compounds except if such
liability, damage, loss, or expense (including reasonable attorneys
fees and expenses) is a result of a breach by Company, Affiliates,
Sublicensee or any of its shareholders, directors, officers,
employees, and agents and their respective successors, heirs and
assigns of this Agreement and/or the R&D Agreement.
11.3 The Indemnitees or Company Indemnitees, as applicable, agree to
provide the Company or Matrix, as applicable, with prompt written
notice of any claim, suit, action, demand, or judgment for which
indemnification is sought under this Agreement and/or the R&D
Agreement. The Company or Matrix, as applicable, agrees, at its own
expense, to provide attorneys reasonably acceptable to Matrix or the
Company, as applicable, to defend against any such claim. The
Indemnitees or Company Indemnitees, as applicable, shall cooperate
fully with the Company or Matrix, as applicable, in such defense and
will permit the Company or Matrix as applicable, to conduct and
control such defense and the disposition of such claim, suit, or
action (including all decisions relative to litigation, appeal, and
settlement); provided, however, that any Indemnitee or Company
Indemnitee, as applicable, shall have the right to retain its own
counsel, at the expense of the Company or Matrix, as applicable, if
representation of such Indemnitee or Company Indemnitee by the
counsel retained by the Company or Matrix, as applicable, would be
inappropriate because of actual or potential differences in the
interests of such Indemnitee or Company Indemnitee and any other
party represented by such counsel. The Company or Matrix, as
applicable, agrees to keep Matrix or the Company, as applicable,
informed of the progress in the defense and disposition of such
claim and not to enter into any proposed settlement without their
prior written approval.
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12 FUTURE INTELLECTUAL PROPERTY RIGHTS; NEW PATENT APPLICATIONS
12.1 Matrix shall submit to the Company on the last date of each
Reporting Period (the "REPORTING DATES") a report detailing any new
developments reached during the preceding Reporting Period under the
R&D Program in the Field, with regards to the Compounds ("NEW
DEVELOPMENTS"). At the request of the Company, Matrix shall provide
the Company with such details regarding such New Developments to
allow the Company to use and commercialize the same within the Field
and the Territory, as if originally included within the definition
of Compounds herein. The aforesaid does not in any way limit
Matrix's ownership of or other rights to all right, title and
interest in and to the New Developments and the rights to freely
exploit, license and sell all Intellectual Property other than in
the Non-Compete Field following the lapse of three years from the
Exercise Date of the Option. In addition, the report submitted to
the Company on each of the Reporting Date shall detail any new
abilities Matrix acquired, since the prior Reporting Date, to
research, develop, perform, or produce Compounds, in order to enable
the Company to evaluate and determine the scope and nature of the
work orders to be issued by it pursuant to the R&D Agreement and any
conflicts of interest which have risen with regards to Third Party
Compounds (as defined hereunder) developed and any Third Party
License (as defined hereunder) granted since the last Reporting Date
("CONFLICTS OF INTEREST"). Matrix will provide Company with general
details of such Conflicts of Interest, which do not harm the rights
of third parties with regards to such activities.
12.2 Notwithstanding anything to the contrary, in the event that Matrix
developed other compound, including for third party (the "THIRD
PARTY"), for the use in fields other than the Non Compete Field and,
granted the Third Party a license and/or right for the use of such
compound in such other field, and during the research program of
such compound a potential therapeutic value of such compound in the
Non Compete Field was incidentally discovered ("THIRD PARTY
COMPOUND"), Matrix may grant the Third Party license for the
commercialization of such compound in the Non Compete Field (the
"THIRD PARTY LICENSE") and the Company shall not be entitled to any
interests or rights in such Third Party Compound, and such Third
Party Compound shall not be included in the License.
12.3 Any new Intellectual Property Rights developed, made, conceived or
created by the Company alone (including through third party
contractors) containing any inventions, innovations and other
improvements, resulting from the Compounds and/or Licensed Products,
and/or are deriving from and/or containing the Compounds and/or the
Licensed Products, and/or regarding the algorithm for development of
the Compounds and/or the Licensed Products shall be owned fully and
exclusively by Matrix, and shall be subject to the License granted
hereunder.
12.4 In the event both Matrix and the Company have each made a
contribution to the development of New Developments, any
registration of such New Developments ("NEW DEVELOPMENT
APPLICATION") shall name Matrix as owner, and such New Development
Application shall be regarded to as an integral part of the License
and the Agreement. Matrix undertakes to bear all costs involved with
regards to such patents, subject to Section 9.
12.5 For the avoidance of doubt, any new Intellectual Property Rights
developed made, conceived or created by the Company alone and not
owned by Matrix pursuant to Section 12.3 above shall be owned fully
and exclusively by the Company.
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13 ASSIGNMENT
This Agreement cannot be assigned by either party without the prior
written consent of the other party. In any event, an assignment will be
permitted only if the assignee agrees in writing to be bound by all the
terms and conditions of this Agreement. Notwithstanding the above, the
Agreement or any part thereof can be assigned:
13.1 By Matrix, provided that Matrix shall incorporate terms and
conditions into its assignment agreements sufficient to enable the
providing of services and support with regards to the Compounds at a
standard not less then those provided to Company by Matrix according
to this Agreement and the R&D Agreement and the assignee must
provide that the obligations of Matrix under this Agreement shall be
binding upon itself as if it were a party to this Agreement, and
provided further that the assignee will have all the required
abilities (and not less than the abilities of Matrix), including,
but not limited to, know how, personnel and equipment enabling it to
fully fulfill Matrix's on going obligations hereunder and under the
R&D Agreement; and/or
13.2 By Company to its Subsidiary or a Qualified Entity, provided that
the Company shall incorporate terms and conditions into its
assignment agreements sufficient to enable the Company to comply
with this Agreement, and the assignee must provide that the
obligations of the Company under this Agreement shall be binding
upon itself as if it were a party to this Agreement, including
automatic back to back termination of its agreement, upon
termination of this Agreement subject to Section y17 hereunder,
and/or the R&D Agreement.
14 COVENANATS OF MATRIX
14.1 The Company does not assume any obligation of Matrix to any
employee, contractor, supplier of other third party whatsoever, and
Matrix shall remain fully and exclusively liable for all of its
debts and obligations.
14.2 Following the Closing, Matrix undertakes to notify the Company
immediately upon the commencement of any Bankruptcy Event or any
other event that could lead to a Bankruptcy Event of Matrix.
14.3 Matrix is responsible to ensure that all technology and information
regarding the Compounds, fully, accurately and clearly documented
(the "DOCUMENTATION") will remain, at all times during the License
Term, with Matrix, and will not be used or transferred to any third
party, subject to the terms of Section 13 above.
14.4 In case of Bankruptcy Event of Matrix according to sub-paragraphs
(iii) or (iv) of Section 1.2, if such circumstances were not removed
within 30 days, or upon the occurrence of the circumstances detailed
in Section 14.5.2, the Company shall have the option to purchase the
Compounds free and clear of any Liens at a price approved by an
independent accountant, detailing all the direct costs incurred by
Matrix for the purchase or development of the Compounds, ("OPTION
PRICE") within 15 days of such event ("PURCHASE OPTION"). The
Company may inform Matrix of its decision to exercise the Purchase
Option within fifteen (15) days after the receipt of the Option
Price.
If the Company shall inform Matrix of its decision to exercise such
Purchase Option within the above time period, the provisions of
Section 14.5 hereunder shall apply to such sale, mutatis mutandis.
If the Company shall not inform Matrix of its decision to exercise
such Purchase Option within the above time period, Matrix shall be
free to sell the Compounds to any third party at a price not lower
then the Option Price.
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14.5 The Company shall have the right of first refusal to purchase the
algorithm for development of the Compounds and any Matrix
Intellectual Property required for the exploitation of such
algorithm for development of compounds for the Field, including,
without limitation, any patents and patents applications (the "ROFR
ASSETS") within 60 days from the occurrence of any of the following
events (the "PURCHASE ROFR"):
14.5.1 Bankruptcy Event of Matrix.
14.5.2 if any execution, sequestration, or any other process of any
court becomes enforceable against Matrix or if any such
process is levied on the rights under this Agreement or upon
any of the monies due to Matrix and is not released or
satisfied by Matrix within 60 days thereafter, or if any
resolution is passed or order made or other steps taken for
the winding up, liquidation or other termination of the
existence of Matrix.
14.5.3 if Matrix ceases to carry on its business or failure of
Matrix to approve or implement, during a period of three (3)
months, any services required by it pursuant to the R&D
Agreement.
Within thirty (30) days from the occurrence of any of the above
events Matrix shall provide the Company with written report,
detailing the purchase price of the Option Assets (the "ROFR
PRICE").
The Company may inform Matrix of its decision to exercise the
Purchase ROFR within thirty (30) days after the receipt of the ROFR
Price for the ROFR Assets.
If the Purchase ROFR shall be exercised, the parties shall convene
at a time to be coordinated between them, but no later than seven
(7) business days after receipt of Matrix approval to the notice of
exercise of the Purchase ROFR, at the offices of the Matrix's
counsel, and shall consummate the transaction contemplated hereby,
namely the transfer of all of the ROFR Assets, free and clear of any
Liens, to the Company (including by providing all relevant
documentation and files, materials and other information related to
the ROFR Assets) against the payment by the Company to Matrix of the
ROFR Price. To effect such transfer, Matrix further agrees to sign
and deliver all deeds, bills of sale, endorsements, consents,
assignments and other good and sufficient instruments of conveyance
and assignment as the Company may reasonably request as necessary or
appropriate to vest in the Company all right, title and interest in,
to the ROFR Assets.
If the Company shall not inform Matrix of its decision to exercise
the ROFR within the above time period, Matrix shall be free to sell
the ROFR Assets to any third party at a price not lower then the
ROFR Price and with other terms not less favorable Matrix than the
terms set forth herein. Any sale of the ROFR Assets after 120 days
from the date of the initial offer to the Company hereunder shall be
again subject to Matrix's right of first refusal pursuant to the
provisions of this Section. Notwithstanding the above, Matrix shall
not sell the ROFR Assets under terms that may, as can reasonably be
foreseen by it, damage the rights of the Company according to this
Agreement.
Notwithstanding anything to the contrary above, if Matrix succeeds
in carrying on its business in counter of the events stated in
Section 14.5.1-14.5.3 and no foreseeable damages can be seen to the
rights of the Company under the Agreement (including the R&D
Agreement) and to Matrix's foreseeable ability to fully fulfill its
ongoing obligations under the Agreement (including the R&D
Agreement), the Purchase ROFR shall be cancelled and all Compounds
and ROFR Assets shall remain the sole property of Matrix according
to the terms of this Agreement. For the avoidance of doubt, when
foreseeable damages can be seen and notwithstanding the above, the
provisions of this Section shall apply.
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14.6 Matrix shall immediately advise the Company, in writing, of the
occurrence of any of the events set forth in Section 14.2 above, or
any other circumstances that may result in such event.
14.7 Matrix shall reasonably assist the Company with its fund raising
activities, provided the Company shall bear all costs involved with
the participation of Matrix staff in such activities. The Company
shall update Matrix, on a current basis but not later than December
31st, 2005, regarding the progress and status of its fund raising
activities.
14.8 Matrix shall deliver to the Company and the Steering Committee, on
each Reporting Date, copies of all the Documentation. In addition,
Matrix shall deliver to the Steering Committee any reports and other
information as shall be requested by the Steering Committee from
time to time.
15 COVENANTS OF THE COMPANY
15.1 Without derogation from the provisions of Section 9 above, during
the License Term the Company shall be fully responsible for the
development, marketing, support and maintenance of the Licensed
Products and the Compounds, at its own expense, and Matrix shall
have no obligation with the same other than the obligations
specifically referred to in this Agreement or the R&D Agreement.
15.2 Matrix does not assume any obligation of the Company to any
employee, contractor, supplier of other third party whatsoever, and
Company shall remain fully and exclusively liable for all of its
debts and obligations.
15.3 Following the Closing, Company undertakes to notify Matrix
immediately upon the commencement of any Bankruptcy Event or any
other event that could lead to a Bankruptcy Event of Company.
15.4 During the License Term, the Company shall provide Matrix with a
full and detailed written report of the Net Sales and the Net Rights
Income of the Licensed Product and the Compounds in each Reporting
Period, not later than 30 days after the end of each Reporting
Period.
15.5 The Company shall maintain complete and accurate records relating to
the Net Sales and Net Rights Income during the License Term, which
records shall contain sufficient information to permit Matrix to
confirm the accuracy of any reports and Royalties delivered to it by
the Company and the Company's compliance in other respects with its
obligation pursuant to the License granted to it under this
Agreement. The Company shall retain such records for at least seven
(7) years, during which time Matrix and its appointed agents, shall
have the right, not more than once a year, at Matrix's expense and
subject to the provisions of Section 16 hereunder, to inspect and
audit such records and other records relating to the Company's
customers. Notwithstanding the above, if such audits reveal a
discrepancy of more than 10% between the Royalties paid by the
Company to Matrix and the actual royalty amounts payable hereunder,
the Company will bear the reasonable costs of such audit (including
auditor's fee, travel and accommodation costs) and shall pay Matrix
a penalty amounting to twice the discrepancy amount.
15.6 The Company shall comply with all local, state, federal, and
international laws and regulations relating to the development,
performance, production, manufacture, use, marketing and sale of the
Licensed Products and the Compounds during the License Term.
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15.7 For the License Term, the Company may reasonably use the name of
Matrix solely for the purpose of raising funds for the realization
of the terms set forth in the Agreement and the R&D Agreement.
15.8 To the extent commercially feasible and consistent with prevailing
business practices, the Company shall mark, and shall cause its
Affiliates and Sub-Licensees to mark, all Licensed Products and the
Compounds with the number of each issued patent that applies to such
Licensed Product and/or the Compounds.
15.9 At any time after the completion of a specific Stage of Development,
and at least 60 days prior to commencement of the next Stage of
Development by the Company as detailed in Exhibit 5.1 hereto, Matrix
shall be entitled to inform the Company, in writing, that it wishes
to invest in the Company the funding required by the Company for the
conduct of the next Stage of Development (the "INVESTMENT"). In such
event, the Company shall inform Matrix, in writing, within the
following 7 days, of the investment terms offered by the Company to
investors at such time (including the securities offered and their
price) (the "COMPANY'S NOTICE"). Matrix shall then be entitled,
within 7 days after the receipt of the Company's Notice, to invest
in the Company the Investment, on the terms specified in the
Company's Notice, and such Investment shall be used by the Company
only for the purposes of financing the next Stage of Development.
Notwithstanding the above, the Company may refuse to accept such
funds only if either party notifies of its desire to terminate the
License hereunder, under the terms hereof.
15.10 The Company shall deliver to the Steering Committee any reports and
other information as shall be requested by the Steering Committee
from time to time.
15.11 Company shall immediately advise Matrix, in writing, of the
occurrence of any of the events set forth in Section y15.3 above, or
any other circumstances that may result in such event.
15.12 In the invitation and proxy statement to the second (annual or
other) meeting of the shareholders of the Company following the
Closing Date, that shall be duly and validly convened, the Board of
Directors of the Company shall convene the meeting and recommend to
the shareholders of the Company (and bring the matter to their vote)
to cancel the power granted to the Board of Directors of the Company
in Article IV of the Company's Certificate of Incorporation, to
designate and issue new series of shares of preferred stock (the
"BLANK CHECK AUTHORIZATION"). For the avoidance of doubt, no
assurance is made by the Company that the shareholders of the
Company shall adopt such recommendation to cancel the Blank Check
Authorization.
16 CONFIDENTIALITY
16.1 For purposes hereof, "CONFIDENTIAL INFORMATION" means any and all
Matrix Intellectual Property Rights including with regards to the
Licensed Products and/or the Compounds, the Company's Intellectual
Property Rights, the terms and conditions of this Agreement, and any
and all oral, written, electronic or other communications and other
information disclosed or provided by one party to the other,
including any and all analyses or conclusions drawn or derived
therefrom regarding this Agreement, and information developed or
disclosed hereunder, or any party's raw materials, processes,
formulations, analytical procedures, methodologies, products,
samples and specimens or functions, excluding (i) information
possessed by a party prior to receipt from the other party, other
than through prior disclosure by such party; (ii) published or
available to the general public otherwise than through a breach of
this Agreement; (iii) obtained by the party from a third party with
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a valid right to disclose it, provided that said third party is not
under a confidentiality obligation to the first party; (iv)
independently developed by employees, agents or consultants of such
party; (v) is required to be disclose under applicable laws
(including securities laws) or regulations, or by an order of a
competent judicial body, all (i) to (v) which can be proven by
written records.
16.2 Each party shall keep and use all of the Confidential Information in
confidence and will not, without the other party's prior written
consent, disclose any Confidential Information to any person or
entity, except reasonably to those of its officers, servants,
employees and agents who require said Confidential Information in
performing their obligations under this Agreement, all subject to
such party's rights to use such Confidential Information in
furtherance of the purposes set forth in this Agreement. Each of the
parties covenants and agrees that it will initiate and maintain an
appropriate internal program limiting the internal distribution of
the Confidential Information to its officers, servants, employees or
agents and to take the appropriate non-disclosure agreements from
any and all persons who may have access to the Confidential
Information.
16.3 In the event that a party is required by judicial or administrative
process to disclose any or all of the Confidential Information, such
party shall promptly notify the other party and allow the other
party reasonable time to oppose such process before disclosing any
Confidential Information.
16.4 For the avoidance of doubt, the provisions of this Section 16 shall
not limit, in any way whatsoever, the Company's right to use the
Compounds according to the License granted to it hereunder.
17 TERMINATION
17.1 The Company shall have the right to terminate this Agreement, for
any reason, upon at least six (6) months prior written notice to
Matrix.
17.2 The Company may, at its option, terminate this Agreement immediately
on the happening of any one or more of the events detailed in
Section 14.5 above and/or upon a material breach by Matrix of this
Agreement and/or the R&D Agreement by delivering notice in writing
to that effect to Matrix, and provided, that prior written notice of
at least 120 days was delivered to Matrix with respect to any
material breach or of 30 days on the happening of any one or more of
the events detailed in Section 14.5 above, and during said period
such event were not cured.
17.3 Matrix may, at its option, either terminate this Agreement or
convert the License granted pursuant to this Agreement into a
non-exclusive License, on the happening of one or more of the
following events and/or the events detailed in Section 15.2,
provided prior written notice of 120 days was delivered to the
Company upon the occurrence of any of the events detailed in this
Section other than the events detailed in Sub-Sections 17.3.4,
17.3.5 and 17.3.6 for which prior written notice of 30 days was
delivered to the Company and during said period such default was not
cured and for the event stated in Section 17.3.1 no prior notice
shall be required and Matrix shall be entitled to automatically
terminate the Agreement, with no need of prior written notice:
17.3.1 If the Company did not deliver to Matrix until the Exercise
Date an Exercise Notice and a written notice confirming that
the Company has secured sufficient funding in the amount of
not less than US$240,000 for the First Stage of Development
and the Second Stage of Development, in addition to the
Advance.
17.3.2 the Company fails to pay or timely pay any payment payable by
it pursuant to the Agreement and/or the R&D Agreement;
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17.3.3 the Company fails to pay or timely pay any Milestone Payment
or Royalties;
17.3.4 Bankruptcy Event of the Company; or
17.3.5 if any execution, sequestration, or any other process of any
court becomes enforceable against Company or if any such
process is levied on the rights under this Agreement or upon
any of the monies due to Company and is not released or
satisfied by Company within 60 days thereafter, or if any
resolution is passed or order made or other steps taken for
the winding up, liquidation or other termination of the
existence of Company.
17.3.6 if Company ceases to carry on its business.
17.3.7 material breach by Company of this Agreement and/or the R&D
Agreement.
17.3.8 if the Company fails to complete any Stage of Development
within the timeframe detailed in Exhibit 5.1, as amended from
time to time by the Steering Committee; or
17.3.9 fails to commence and fully fund the next Stage of
Development after the applicable Period Between Stages ended.
Notwithstanding the above, (i) if Matrix failed to comply with any
of the material terms of the R&D Agreement, the provisions of this
Section shall not apply to Section 17.3.8 and 17.3.9, and Matrix
shall not be entitled to terminate the License; and (ii) if a
certain Milestone was not achieved according to this Agreement and
the R&D Agreement Program, and the Steering Committee has determined
that notwithstanding such failure, the R&D Program shall continue
for an additional 9 months according to Section y6.3.6 above, Matrix
shall be entitled to provide notice of termination to the License
only following such period.
17.4 Upon the early termination of this Agreement, the Company, may
complete and sell any work-in-progress and inventory of Licensed
Products and/or Compounds that exist as of the effective date of
termination, provided that the Company shall complete and sell all
work-in-progress and inventory of Licensed Products and/or the
Compounds within six (6) months after the effective date of
termination. In no event shall termination of this Agreement release
the Company from the obligation to pay any amounts that became due
on or before the effective date of termination. For avoidance of
doubt it is made clear that termination of this Agreement and/or the
R&D Agreement by Matrix shall automatically terminate any agreement
Company has signed with Affiliates, Sub-Licensees or other third
parties including with regards to the Services according to the R&D
Agreement, Licensed Products, Compounds or any other matters
relating to this Agreement and/or the R&D Agreement, unless Matrix
has notified Company otherwise.
17.5 Upon termination of the Agreement by the Company pursuant to
Sections 17.1 or 17.2 above, or if the Company fails to exercise the
Option until the Exercise Date, Matrix shall be free to
commercialize the Compounds and/or Licensed Products, provided
however, that the Company shall be entitled to receive, from and
after the date of termination of this Agreement, such share in all
revenue, monies, receipts, royalties and other consideration
received by Matrix, directly or indirectly, from such
commercialization, including the Advance, if no milestone payment
has been paid (the "MATRIX'S Revenues"), to be determined based on
the following formula:
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C = R*P*A/T
where: "C" is the amount to be paid to the Company by Matrix; "R" is
Matrix's Revenues actually received by Matrix; "P" is a percentage
to be determined as follows: if the termination of the Agreement
results from the cessation of the Company to conduct the R&D
Program, and such cessation is the result of the increase of 20% or
more in the actual costs associated with the relevant Stage of
Development in excess of the projected costs as set forth in the
Budget attached to this Agreement such percentage will be 100%,
otherwise such percentage will be 85%; "A" are the actual Milestone
Payments paid to Matrix pursuant to this Agreement until the
termination date, or the Advance - if no Milestone Payment has been
paid; and "T" are the total Milestone to which Matrix shall have
been entitled hereunder if the Company would have successfully met
all Milestones.
Notwithstanding the above, if the Option is not exercised by the
Company until the Exercise Date, Matrix shall be entitled to repay
the Advance to the Company within sixty (60) days after the Exercise
Date, and, in such event, this Agreement shall automatically
terminate including Matrix's obligations pursuant to this Section
17.5.
17.6 Payments to the Company pursuant to this Section shall be paid in
cash payment in U.S. dollars payable by means of a wire transfer to
a bank account designated by the Company, within 30 days after the
end of each Reporting Period. Matrix shall be obliged to maintain
records, provide reports to the Company and allow the Company to
inspect its books and records, and the provisions of Sections 15.4
and 15.5 hereto shall apply, mutatis mutandis.
17.7 The provisions of Sections 11, 12.3, 12.4, 12.5, 16, 17.4, 17.5, 19,
20, 21 and 22 shall survive the termination of this Agreement.
18 CLOSING; CONDITIONS TO CLOSING
This Agreement shall become effective upon a closing (the "CLOSING"),
which shall take place at the law offices of Ori Rosen & Co., of 1 Azrieli
Center, Tel Aviv 67021, at 12:00 on January 3, 2006, or at such other time
or place as the parties may agree. Such time and date of Closing are
herein referred to as the "CLOSING" and the "CLOSING DATE". At the
Closing:
18.1 Matrix shall deliver to the Company:
18.1.1 a duly executed copy of resolutions of its Board of Directors
and consents and waivers of its stockholders and shareholders,
in the forms attached in EXHIBIT 18.1.1;
18.1.2 a legal opinion of Gross. Kleinhendler, Hodak, Halevy,
Greenberg & Co., counsel to Matrix, in the form attached
hereto as EXHIBIT 18.1.2, duly signed and addressed to the
Company and dated as of the Closing Date;
18.1.3 a Certificate of Good Standing of Matrix executed by the
Secretary of the State of Delaware and dated not later than
two business days before the Closing Date;
18.1.4 The Research and Development Agreement, in the form of
EXHIBIT 18.1.4 (the "R&D AGREEMENT"), signed and executed by
Matrix;
18.1.5 Certificate of compliance in the form acceptable to the
Company.
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18.1.6 [Omitted].
18.1.7 An executed Tri Party Agreement in the form attached hereto
as EXHIBIT 18.1.7.
18.1.8 The executed NSCI Letter.
18.2 The Company shall deliver to Matrix:
18.2.1 a duly executed copy of resolutions of its Board of Directors
in the form attached in EXHIBIT 18.2.1;
18.2.2 the balance of the Advance.
18.2.3 the R&D Agreement, signed and executed by the Company.
18.2.4 a Certificate of Good Standing of the Company executed by the
Secretary of the State of Delaware and dated not later than
two business days before the Closing Date.
18.2.5 Certificate of compliance in the form acceptable to Matrix.
18.2.6 a legal opinion of David Lubin & Associates, counsel to
Company, in the form attached hereto as EXHIBIT 18.2.6, duly
signed and addressed to the Company and dated as of the
Closing Date.
18.3 The obligation of the Company to consummate the Closing is subject
to the satisfaction or waiver by the Company of the following
further conditions:
18.3.1 No proceeding challenging this Agreement or the transactions
contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any
Person before any court, arbitrator or Governmental Agency and
be pending.
18.3.2 No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit or
materially alter the consummation of the Closing.
18.3.3 Matrix shall have performed all of its obligations hereunder
required to be performed on or prior to the Closing Date, and
the representations and warranties of Matrix contained in this
Agreement or any Ancillary Agreement at the time of their
execution and delivery and in any agreement, document,
certificate or other writing delivered by Matrix pursuant
hereto shall be true at and as of the Closing Date, as if made
at and as of such date.
18.3.4 The Company shall have received all closing documents listed
in this Agreement duly signed, and any others that it may
reasonably request, all in form and substance reasonably
satisfactory to the Company.
18.3.5 The Company completed legal, financial and professional due
diligence of Matrix, to the Company's full satisfaction, in
its sole discretion.
18.3.6 Between the date of this Agreement and the Closing Date,
there shall not have occurred any change with respect to the
business, assets, properties, condition (financial or
otherwise), results of operations or prospects of Matrix which
would result in or would be reasonably likely to have a
material adverse effect on Company's rights under this
Agreement.
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18.4 The obligation of Matrix to consummate the Closing is subject to the
satisfaction or waiver by Matrix of the following further
conditions:
18.4.1 No proceeding challenging this Agreement or the transactions
contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any
Person before any court, arbitrator or Governmental Agency and
be pending.
18.4.2 No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit or
materially alter the consummation of the Closing.
18.4.3 The Company shall have performed in all respects all of its
obligations hereunder required to be performed by it at or
prior to the Closing Date;
18.4.4 The representations and warranties of the Company contained
in this Agreement and in the Company Ancillary Agreements at
the time of their execution and delivery and in any agreement,
documents, certificate or other writing delivered by the
Company pursuant hereto shall be true in all respects at and
as of the Closing Date, as if made at and as of such date;
18.4.5 Matrix shall have received the closing documents listed in
this Agreement and any other documents that it may reasonably
request, all in form and substance reasonably satisfactory to
Matrix.
18.4.6 Between the date of this Agreement and the Closing Date,
there shall not have occurred any change with respect to the
business, assets, properties, condition (financial or
otherwise), results of operations or prospects of the Company
which would result in or would be reasonably likely to have a
material adverse effect. 18.5 Within 21 business days after
the Closing Matrix shall deliver an executed Consulting
Agreement with Dr. Marcel Thurk, in the form acceptable to the
Company.
19 NOTICES
Any offer, notice, response or other communication required or authorized
to be given by any Party under this Agreement to the other Party shall be
in writing and shall be personally delivered, sent by facsimile
transmission (with a copy by ordinary mail in either case) or dispatched
by courier addressed to the other party at the address stated below or
such other address as shall be specified by the parties hereto by notice
in accordance with the provisions of this Section. Any notice shall
operate and be deemed to have been served, if personally delivered or sent
by fax on the next following business day, and if by courier, on the fifth
following business day. Addresses for the purposes of this Section are as
follows:
To Matrix: 15 Berkeley Street
London W1J8DY
United Kingdom
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with a copy to (which shall not constitute service of process on):
Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co., Law Offices
1 Azrieli Center, Tel Aviv 67021, Israel
Fax: 972-3-6074444
Attn: Mr. Nitzan Hirsch-Falk, Adv.
To the Company:
SafeTek International Inc.
23 Aminadav St., Tel Aviv 67898, Israel
Fax: 972-3-5613465
Attn: Dr. Shay Goldstein
with a copy to (which shall not constitute service of process on):
Ori Rosen & Co., Law Offices
1 Azrieli Center, Tel Aviv 67021, Israel
Fax: 972-3-6074701
Attn: Mr. Ori Rosen, Adv.
20 ARBITRATOR AND ARBITRATION
20.1 In the event of any dispute to be resolved by the Scientific
Arbitrator pursuant to Section 6.5 above, the parties, by mutual
consent, shall designate a person, not affiliated with either party,
of recognized stature in the scientific area or discipline in which
such dispute arises as the "SCIENTIFIC ARBITRATOR" for such dispute.
For the avoidance of doubt, it is expressly recognized that the
Scientific Arbitrator for one dispute will not necessarily be the
Scientific Arbitrator for any other dispute.
20.2 The scientific arbitration shall take place in Tel Aviv, in the
Hebrew language. The Scientific Arbitrator shall be exempt from the
civil procedure rules and the rules of evidence, but shall be bound
by substantive law and by the duty of citing grounds for his ruling,
and he shall have to hand down his decision with respect to the
dispute within 30 days from the date on which the dispute was
submitted to him. The execution of this Agreement by the parties
shall be deemed the execution of an arbitration agreement.
20.3 Each of the parties hereby undertakes to collaborate with the
Scientific Arbitrator and to comply with any reasonable request
therefrom, including but not limited to furnishing the Scientific
Arbitrator with information, documents, reports and any other
relevant written material and attending any meetings set by the
Scientific Arbitrator regarding the addressed issues.
21 GOVERNING LAW AND JURISDICTION
This Agreement shall be subject to the laws of the State of Delaware,
without regard to the conflict of laws provisions thereof, and all
disputes which may arise our of or in connection with this Agreement,
other than disputes to be resolved by the Scientific Arbitrator pursuant
to Section 20 above, shall be subject to the exclusive jurisdiction of the
courts of the State of Delaware.
22 MISCELLANEOUS
22.1 Each party will bear its own costs in connection with the
transactions contemplated hereunder, including attorney's fees and
expenses.
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22.2 Each party has reviewed with its own tax advisors the federal,
state, local and foreign tax consequences of the transactions
contemplated by this Agreement, including the issuance of the Shares
to the extent issued. Each party is relying solely on such advisors
and not on any statements or representations of the other party or
any of its agents. Each party understands that it shall be
responsible for any tax liability that may imposed on it under
applicable law as a result of the transactions contemplated by this
Agreement. In the event that pursuant to any law or regulation, tax
is required to be withheld at source, said tax may be withheld,
unless proper certification approving such tax should not be
withheld is provided.
22.3 Subject to the terms and conditions of this Agreement, each party
will use its commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things
necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. Each
party agrees to execute and deliver such other documents,
certificates, agreements and other writings and to take such other
actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this
Agreement.
22.4 If Party's failure to comply with any terms of the Agreement and/or
the R&D Agreement is due to causes beyond the control of the such
party, including, without limitation, acts of God, fire, flood,
strike, lockout, factory shutdown, act of civil or military
authority, priority request, order of any applicable government or
any department or agency thereof, insurrection, riot, war, embargo,
or inability to obtain labor or materials from its usual sources,
such failure shall not be regarded to as breach by that party of the
Agreement and/or the R&D Agreement. 22.5 This Agreement constitutes
the entire agreement between the parties with respect to its subject
matter and supersedes all prior agreements or understandings between
the parties relating to its subject matter.
22.6 This Agreement may be amended, supplemented, or otherwise modified
only by means of a written instrument signed by both parties. Any
waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an
agreement to waive any rights or fail to act in any other instance,
whether or not similar.
22.7 In the event that any provision of this Agreement shall be held
invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this
Agreement, and the parties shall negotiate in good faith to modify
the Agreement to preserve (to the extent possible) their original
intent.
22.8 Nothing contained herein shall be deemed or construed to create
between the parties hereto a partnership or joint venture. No party
shall have the authority to act on behalf of any other party, or to
commit any other party in any manner or cause whatsoever or to use
any other party's name in any way not specifically authorized by
this Agreement. No party shall be liable for any act, omission,
representation, obligation or debt of any other party, even if
informed of such act, omission, representation, obligation or debt.
22.9 This agreement cannot be assigned by either party other then
according to the undertakings set forth in Section y13 herein.
22.10 All headings are for convenience only and shall not affect the
meaning of any provision of this Agreement.
22.11 All remedies, either under this Agreement or by law or otherwise
afforded to any of the Parties, shall be cumulative and not
alternative.
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22.12 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and enforceable against the
Parties actually executing such counterpart, and all of which
together shall constitute one and the same instrument.
-37-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
Safetek International, Inc. Matrix Pharma Inc.
By: /s/ Shay Goldstein By: /s/ Sion Balass
---------------------- -------------------
Name: Shay Goldstein Name: Sion Balass
EXHIBIT 5.1
- ------------------------------------------------------------------------------------------------------------------------------------
TIME TILL
BEGINNING
STAGE OF ESTIMATED ESTIMATED MILESTONE OF NEXT
STAGE DEVELOPMENT MILESTONE DURATION COST ($) PAYMENT ($) STAGE
- ------------------------------------------------------------------------------------------------------------------------------------
I* Oral o Successful completion of oral bioavailability 5M 150,000 [Omitted 0
bioavailability studies, conducted by Prof' Varon and pursuant to a
studies issuance of a report of the oral request for
bioavailability results (written according confidential
to FDA standards (TBD by Varon if such treatment and
protocols exist)). filed
o The efficacy and specificity parameters of the separately with
new oral compounds will be comparable to IV the Securities
compound 8-5 (*see attached table 1). and Exchange
o The compound is an API (Active Pharmaceutical Commission]
Ingredient) according to ICH guidelines
(http://www.fda.gov/cder/guidance/4286fnl.htm)
- ------------------------------------------------------------------------------------------------------------------------------------
II Pre-clinical Successful completion of Proof of concept study in 4M 150,000 [Omitted 6M
efficacy (POC) animals: The new compounds were proved, with an accepted pursuant to a
and pre-IND model, to prevent thrombosis determined by an agreement request for
meeting with a GMP, FDA approved manufacturer. confidential
treatment and
filed separately
with the
Securities and
Exchange
Commission]
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
III Pre-clinical Successful completion of pre-clinical studies determined 12M 950,000 [Omitted 12M
studies and by approval of IND. pursuant to a
approval of IND request for
confidential
treatment and
filed separately
with the
Securities and
Exchange
Commission]
- ------------------------------------------------------------------------------------------------------------------------------------
IV Phase I studies Successful completion of Phase I determined by approval of 12M 1,200,000 [Omitted 12M
the FDA to start phase II. pursuant to a
request for
confidential
treatment and
filed separately
with the
Securities and
Exchange
Commission]
- ------------------------------------------------------------------------------------------------------------------------------------
V Phase IIa Successful completion of Phase IIa, 12M 1,000,000 [Omitted
determined by approval of the FDA to start phase II/III pursuant to a
request for
confidential
treatment and
filed separately
with the
Securities and
Exchange
Commission]
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------
* If these results are not met, Matrix will pay all the cost of further development above 165,000$ in total (including the cost
up to that stage).
TABLE 1. Properties of selected thrombin inhibitors
Selected inhibitors from cycles 7-8 Reference inhibitors
------------------------------------------- ---------------------------------
Values 7-1 7-4 7-8 8-1 8-5 Argatroban NAPAP Melagatran
- ------------------------------------------------------------------------------------------------
Ki [KM]
Human thrombin 0.080 0.009 0.056 0.008 0.003 0.038 0.009 0.006
Bovine thrombin 0.150 0.021 0.073 0.013 0.0072 0.019 0.006 0.0036
Trypsin >1,000 >1,000 >1,000 >1,000 >1,000 4.250 690 0.004
FactorXa >1,000 >1,000 >1,000 >1,000 >1,000 210 7.9 9.4
Factor XIla --* >1,000 >1,000 >1,000 >1,000 >1,000 450 10.4
Urokinase >1,000 >1,000 >1,000 >1,000 >1,000 >1,000 230 7.9
Plasmin >1,000 >1,000 >1,000 >1,000 >1,000 600 30 1.4
Plasma kallikrein -- >1,000 >1,000 >1,000 >1,000 >1,000 14 0.69
Icon aM
Thrombin time 0.24 0.034 0.24 0.040 0.040 0.062 0.045 0.015
aPTT 6.0 1.0 2.8 0.95 0.60 0.42 0.50 0.24
Prothrombin time 14 2.0 -- 2.0 1.45 0.66 1.0 0.37
Toxicity [%]
HeLa [30 kM] 0 0 0 1.7 0 -- -- --
HeLa (200 gM) 17.1 -- 0 5.0 2.9 -- 13 12
Hemolysis 10 -- <2 <2 <2 -- -- --
ACME
SPB, % 59 39 2 22 29 -- 86 7
Metabolic Stab, % 88 80 92 70 76 -- 97 93
Solubility, 200 gM 197.9 -- 200 200 200 -- -- --
- ------------------------------------------------------------------------------------------------
ADME, absorption, distribution, metabolism, elimination: SPB, serum protein
binding; P-IC200, inhibitor concentration doubling the respective clotting time;
TT, thrombin time; aPTT, activated partial thromboplastin time.
* Not measured.