EXHIBIT 10.34
DATED 2001
(1) THE BOOTS COMPANY PLC
AND
(2) BIOPROGRESS TECHNOLOGY LIMITED
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PRODUCT DEVELOPMENT AGREEMENT
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LEGAL DEPARTMENT
THE BOOTS COMPANY PLC
NOTTINGHAM
NG2 3AA
TEL : (0115) 959 3432
FAX : (0115) 959 3314
INDEX
CLAUSES PAGE NO
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1. Definitions and Interpretation.................................................................1
2. Continuation of the Initial Development Programme..............................................3
3. The Commercial Development Programme...........................................................4
4. Supply of Plant................................................................................5
5. Supply of Film.................................................................................9
6. Payment........................................................................................9
7. Intellectual Property Rights..................................................................10
8. After Completion or Termination of the Commercial Development Programme.......................12
9. Exclusivity...................................................................................14
10. Fields........................................................................................14
11. Confidentiality...............................................................................14
12. Force Majeure.................................................................................15
13. Termination...................................................................................15
14. Assignment....................................................................................16
15. Change of Control.............................................................................16
16. Relationship..................................................................................17
17. Waiver........................................................................................17
18. Notices.......................................................................................17
19. Entire Agreement and Amendments...............................................................18
20. Applicable Law and Service of Process.........................................................18
21. Invalidity and Severability...................................................................18
22. Announcements.................................................................................19
SCHEDULE
The Commercial Development Programme
THIS AGREEMENT is made the 26 day of November 2001
BETWEEN:-
(1) THE BOOTS COMPANY PLC registered in England number 27657, whose
registered office is at Nottingham NG2 3AA ("Boots") of the one part;
and
(2) BIOPROGRESS TECHNOLOGY LIMITED registered in England number 3289265,
whose registered office is at Unit 1, Norwood Road, March,
Cambridgeshire PE15 8QD ("Bioprogress") of the other part.
WHEREAS:-
A. By an agreement (the "Initial Agreement") dated 17th October 2000 and
made between Boots of the one part and Bioprogress of the other part,
Boots and Bioprogress agreed to collaborate in a development programme
B. The Initial Agreement contains provisions requiring Boots to give
notice to Bioprogress if, following the completion of the Initial
Development Programme, it wishes to enter into a further programme for
the development on a commercial scale of a product or products
developed pursuant to the Initial Development Programme and, upon such
notice being given, requiring the parties to negotiate and use
reasonable endeavours to agree the terms of such further programme.
C. Boots having served such notice upon Bioprogress, the parties have
agreed that the said further programme shall be conducted on the terms
and conditions hereinafter contained.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires, the following
expressions shall have the following meanings:-
"Acceptance Criteria" means the tests which the Plant
is required to pass, and the
criteria and standards which
the Plant is required to meet,
as devised and agreed by the
parties hereto pursuant to the
Commercial Development
Programme;
1
"Affiliate" means, in relation to any
company, any legal entity
controlling, controlled by or
under common control with the
company in question. "Control"
for these purposes means direct
or indirect possession of the
power to direct or cause the
direction of the management or
policies of such company or
entity, whether pursuant to the
ownership of voting securities,
by contract or otherwise;
"Boots Plant" means that part of the Plant
to be developed by Bioprogress
for the development and
manufacture of the Products
pursuant to the Commercial
Development Programme;
"Core Plant" means that part of the Plant
which excludes the Boots Plant;
"Initial Agreement" means the agreement referred to
in Recital A hereto;
"Initial Development Programme" means the development programme
referred to in Recital A
hereto;
"Inventions" means all or any (as the
context so permits) inventions,
improvements, discoveries,
methods or other valuable
developments, whether patented
or otherwise;
"Patents" means all patents and patent
applications, together with any
patents granted pursuant to
such applications (whether or
not the existence or details of
same shall have been disclosed
by Bioprogress to Boots)
granted to (in the case of
patents) or made by (in the
case of patent applications)
Bioprogress or any of its
Affiliates, or to which
Bioprogress or any of its
Affiliates may be beneficially
entitled, in Territory or any
part thereof as at the date of
this Agreement, and in any way
relating to the Plant or
2
the Plant Technology, or to any
part of either;
"Plant Technology" means all technology, know how
and technical information,
whether protected by
intellectual property rights
(including but not limited to
the Patents) or otherwise,
owned or controlled by
Bioprogress and necessary for
the proper operation,
maintenance, servicing, repair,
testing and commissioning of
the Plant;
"Registration" means the grant to Boots or its
nominee by any competent
medicines registration
authority in any country within
the Territory of a licence to
manufacture, market, advertise
for sale, promote, sell, or
distribute the Products, or to
have any of the same done by a
third party, in or from that
country;
"Territory" means each and every country
within the world; and
"Warranty Period" means the period of twelve
months commencing on the first
date on which the Plant has met
all the Acceptance Criteria;
1.2 In this Agreement, words denoting the singular include the plural and
vice versa, and a reference to any gender includes a reference to all
other genders.
1.3 References in this Agreement to Clauses and to the Schedule are to
Clauses of and the Schedule to this Agreement.
1.4 The Schedule forms an integral part of this Agreement.
1.5 The headings to the Clauses are for identification purposes only and do
not affect their interpretation.
2. CONTINUATION OF THE INITIAL DEVELOPMENT PROGRAMME
2.1 Boots and Bioprogress hereby acknowledge that t the duration of the
Initial Development Programme was extended until and including 31st
October 2001, subject to the provisions of Clause 2.2.
3
2.2 Boots shall, in consideration of all work performed by Bioprogress
pursuant to or in contemplation of the Initial Development Programme
during the extended period thereof referred to in Clause 2.1, reimburse
Bioprogress in respect of the purchase price to Bioprogress of all
materials, equipment or services which Boots expressly requests
Bioprogress to obtain for the purpose of carrying out such work, in
accordance with the following provisions:-
2.2.1 Bioprogress shall, upon receipt of each such express request
from Boots, provide Boots with written details of the cost of
purchase of the said materials, equipment or services, and
shall purchase the same following, but under no circumstances
prior to, receipt of express instructions from Boots to
purchase the materials, equipment or services in question;
2.2.2 Bioprogress shall make payment for all materials equipment and
services purchased and shall submit to Boots a copy of a
receipted invoice in respect of all such materials, equipment
or services for which reimbursement is claimed pursuant to
this Clause 2.2;
2.2.3 Boots shall reimburse Bioprogress in respect of all sums due
to it at or before the end of the month following the month in
which the relevant copy receipted invoice is received by
Boots;
2.3 Except as provided in Clause 2.2, Bioprogress shall not be entitled to
any form of payment or other consideration in respect of any work
performed by it and to which this Clause 2 applies, or the provision by
it of any materials equipment or services required for the purpose of
performing such work.
2.4 The provisions of the Initial Agreement shall , remain in full force
and effect, however in the event of any conflict between the provisions
of this Agreement and those of the Initial Agreement, then, to the
extent that the provisions in question relate to the Initial
Development Programme, or to any matter relating thereto or arising as
a consequence of the execution or completion thereof other than
anything which is the subject matter of this Agreement, the former
shall prevail.
3. THE COMMERCIAL DEVELOPMENT PROGRAMME
3.1 Bioprogress shall perform its obligations under the Commercial
Development Programme in accordance with the terms thereof.
3.2 Boots shall manage the conduct of the Commercial Development Programme,
including but not limited to the performance by Bioprogress of its
obligations thereunder, in accordance with the provisions thereof.
3.3 Boots shall be entitled, by giving notice to that effect to
Bioprogress, to terminate the Commercial Development Programme at any
time. In the event of termination of the Commercial Development
Programme by Boots pursuant to this Clause 3.3, the provisions of
Clause 8.3 shall apply.
3.4 Without limiting any of the specific obligations on the part of
Bioprogress contained within the Commercial Development Programme or
elsewhere in this Agreement, Bioprogress shall at all times during the
currency of the Commercial Development Programme provide, at its own
expense, such co-
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operation and assistance as Boots may reasonably require in order to
perform Boots' own functions in relation to the Commercial Development
Programme. Boots will notify Bioprogress of the precise nature and
extent of the co-operation and assistance which it requires on an
ongoing basis once those requirements have been determined. Upon
receipt of such notification, Bioprogress shall promptly confirm to
Boots whether or not it is able to provide the co-operation or
assistance requested by Boots. If it is able to provide the same, the
parties shall negotiate in good faith and use reasonable endeavours to
agree the precise nature and extent of the co-operation or assistance
to be provided, and if appropriate the time and venue at which it will
be provided. If Bioprogress is unable to provide all or any part of the
co-operation or assistance requested, the parties shall negotiate in
good faith and use reasonable endeavours to agree the provision by
Bioprogress of co-operation or assistance in an alternative manner
which in general terms meets the requirements of Boots and is
reasonably acceptable to Boots, however Boots shall be entitled to
determine at its discretion whether or not any alternative co-operation
or assistance proposed by Bioprogress is so acceptable. If Bioprogress
persistently fails to provide the co-operation or assistance reasonably
requested by Boots, or if Bioprogress fails to provide such
co-operation or assistance on any one or more occasions and the result
of such failure is that the execution of the Commercial Development
Programme is prevented or delayed to a material extent, then such
failure shall be regarded as a material breach of this Agreement for
the purposes of Clause 13.1.
4. SUPPLY OF PLANT
4.1 Bioprogress will supply the Plant to Boots in accordance with the
provisions of this Clause 4.
4.2 Bioprogress shall construct or procure the construction of the Plant by
making to the specification for the Core Plant, the further
modifications and enhancements embodied in the Boots Plant.
4.3 Bioprogress shall be responsible, whether acting on its own behalf or
through sub-contractors, for the delivery, installation, commissioning
and testing of the Plant, in accordance with the provisions of,
including, without limitation, the timescales (as to which time shall
be of the essence) agreed pursuant to, the Commercial Development
Programme.
4.4 Bioprogress warrants to Boots as follows:
4.4.1 That the Plant will meet the Acceptance Criteria within the
timescales stipulated therefor in the Commercial Development
Programme;
4.4.2 That the Plant will conform continuously and without
interruption in all respects to the Performance Specification
during the Warranty Period; and
4.4.3 That without prejudice to the obligations of Bioprogress under
Clauses 4.5, 4.6 and 4.7, the Plant will, from the end of the
Warranty Period until the expiry of the period of time for
which Boots shall require to use the same, give good, safe and
reliable performance in all material respects. It is
acknowledged by Boots that the
5
occurrence of minor defects in and to the Plant which are
capable of prompt and complete rectification shall not
constitute a breach of this Warranty.
Bioprogress shall indemnify Boots and keep Boots fully indemnified
against all claims, actions, demands, liability, damages, costs, losses
and expenses suffered or incurred by Boots (including without
limitation, any claims, actions or demands made or brought against
Boots by, or any liability incurred in favour of, any third party) to
the extent that the same arise as the result of any breach by
Bioprogress of any of the warranties contained in this Clause 4.4,
except to the extent that the same arise as the result of any wrongful
act or omission on the part of Boots or its employees. Bioprogress
shall maintain insurance against its liability under the foregoing
indemnity with a reputable insurance company to a limit of cover not
less than Pound Sterling 2 000 000 (Two million pounds) per individual
event or occurrence and shall on request produce to Boots copies of the
relevant policy or policies of insurance, together with receipts for
the payment of premiums.
4.5 The following provisions shall apply to the servicing, repair and
maintenance of the Plant at all times whilst it is under the possession
or control of Boots:-
4.5.1 Bioprogress shall perform, or procure the performance of, the
routine maintenance and servicing of the equipment in
accordance with such provisions as are agreed pursuant to the
Commercial Development Programme. Such work shall be performed
at no additional cost to Boots ( except to the extent
otherwise agreed ).
4.5.2 Bioprogress shall be responsible for all non-routine
maintenance and servicing of the Plant to which the provisions
to be agreed pursuant to Clause 4.5.1 do not apply and the
repair of all defects in and damage to the Plant, the need for
which arises either during or as a result of the use of the
Plant by Boots during the Warranty Period. Such work shall,
unless otherwise agreed, be performed at no additional cost to
Boots ,. except to the extent that the need for such
maintenance, servicing, repair or rectification arises as the
result of any failure by Boots or any of its employees to
operate or use the Plant other than in accordance with the
provisions of the manual to which Clause 4.7 relates.
4.5.3 Bioprogress shall carry out or procure the carrying out of all
maintenance, servicing, repair and rectification to the Plant
to which the provisions of neither Clauses 4.5.1 nor 4.5.2
apply and Boots shall make payment to Bioprogress for such
maintenance, servicing, repair and rectification at such rates
as are agreed between Boots and Bioprogress from time to time;
the initial rates for this purpose shall be subject to
agreement as part of the Commercial Development Programme, and
such rates shall remain in full force and effect for a period
of not less than one year commencing on the day following the
completion of the commissioning and testing of the Plant.
4.6 Bioprogress shall provide to Boots full and adequate training in the
operation, and use of the Plant, including in the training of others to
operate and use the Plant , the details of the nature of the said
training and the times and venues at which is to be carried out to be
agreed between Bioprogress and Boots
6
4.7 Bioprogress shall, no later than the date of delivery of the Plant,
provide Boots with not less than two copies of a complete and
up-to-date operating manual for the Plant, and shall in addition at all
times during the working life of the Plant provide Boots promptly with
such revisions, addenda and supplements to these as are necessary as a
consequence of any modifications, amendments or enhancements made to
the Plant after delivery, or of any incompleteness or inaccuracy
discovered in the current version of the said manual.
4.8 Risk in the Plant shall vest in Boots upon delivery except in respect
of any loss or damage thereto which is the result of any negligent act
or omission on the part of Bioprogress, its employees, agents or
representatives.
4.9 Title to the Core Plant shall remain vested in Bioprogress, subject
always to the provisions of Clause 4.14.
4.10 Title to the Boots Plant shall vest in Boots upon the making by Boots
to Bioprogress of the payment referred to in Clause 6.1.2. Upon the
vesting of title to the Boots Plant in Boots, the licence granted by
Bioprogress to Boots under Clause 4.11 shall, insofar as the same
relates to the Boots Plant, be varied in the following manner:
4.10.1 The said licence shall cease to be coterminous with this
Agreement and shall become perpetual;
4.10.2 The rights granted to Boots shall be extended to include the
right to maintain, repair and modify the Boots Plant; and
4.10.3 Boots shall have the right to grant sub-licences to third
parties to perform any of the acts which Boots is licensed to
perform pursuant to the terms of the said licence, but not
further or otherwise.
4.11 Bioprogress hereby grants to Boots an exclusive (subject to the
provisions of Clause 4.14.3) and non-transferable (except to an
Affiliate of Boots) licence, coterminous with this Agreement, to use
the Plant Technology for the purpose of operating the Plant, and
performing all its other obligations under this Agreement in relation
to the Plant, in order to enable it to conduct the Commercial
Development Programme and thereafter, subject to the provisions of
Clause 8 to manufacture or have manufactured the Products in the Field
for use or resale in the Territory.
4.12 In consideration of the supply to Boots of the Plant, and the
performance by Bioprogress of its obligations in relation to the Plant,
pursuant to this Clause 4, and of the licence granted by Bioprogress to
Boots pursuant to Clause 4.8, Boots shall pay to Bioprogress the sums
more particularly specified in Clause 6, in accordance with the
provisions thereof.
4.13 In the event of the termination by Boots of the Commercial Development
Programme or if, following the completion of the Commercial Development
Programme, Boots does not give notice to Bioprogress, pursuant to the
provisions of Clause 8.1, that it wishes to proceed with the commercial
exploitation of the Products, the Core Plant shall be returned to
Bioprogress in accordance with the following provisions:-
7
4.13.1 Bioprogress shall be responsible for the decommissioning and
removal, at its own expense, from Boots' premises of the Core
Plant;
4.13.2 upon the receipt by Bioprogress of notice of termination from
Boots pursuant to Clause 3.2 or if Boots gives notice or is
deemed to have given notice pursuant to Clause 8.1 that it
does not wish to proceed with the commercial exploitation of
the Products , Boots and Bioprogress shall negotiate in good
faith and use reasonable endeavours to agree a timed programme
for the decommissioning and removal of the Core Plant;
4.13.3 notwithstanding the provisions of Clause 4.10.2, Bioprogress
shall complete the decommissioning and removal of the Core
Plant from Boots' premises within three (3) calendar months of
the notice from Boots referred to in Clause 4.13.2. If
Bioprogress has not completed the decommissioning and the
removal of the Core Plant from Boots' premises by the end of
that period, then Boots shall be entitled to complete or have
completed the decommissioning and removal of the Core Plant,
and Bioprogress shall be liable for the reasonable costs
incurred by Boots in so doing, unless the failure of
Bioprogress to complete the said decommissioning and removal
is the result of the failure by Boots to negotiate in good
faith the details of the timed programme for the same pursuant
to Clause 4.13.2, in which event such removal and
decommissioning shall be at the expense of Boots, and Boots
must complete the same within a period of two (2) calendar
months from the end of the period of three (3) calendar months
referred to above;
4.13.4 The Boots Plant shall (subject to Clause 4.10) remain the
property of Boots, and shall not be removed from Boots'
premises pursuant to this Clause 4.13 unless title thereto
shall not have vested in Boots pursuant to Clause 4.10;
4.13.5 Bioprogress shall be responsible for making good any damage
caused to Boots premises' or any other property owned or
controlled by Boots, to the extent that the same arises as a
result of the decommissioning and removal of the Plant from
Boots' premises, but except to the extent that such damage
arises as a result of any wrongful act or omission on the part
of Boots, its employees, agents or representatives.
4.14 If, following the completion of the Commercial Development Programme,
Boots wishes to proceed with the commercial exploitation of the
Products, Boots shall purchase the Core Plant from Bioprogress in
accordance with the following provisions:-
4.14.1 the payment terms relating to the said purchase are set out in
Clause 6;
4.14.2 upon payment of the consideration for the purchase of the Core
Plant more particularly specified in Clause 6.2, title to the
Core Plant will immediately vest in Boots;
8
4.14.3 the licence granted by Bioprogress to Boots pursuant to Clause
4.11 shall, with effect from the date on which title to the
Core Plant vests in Boots be varied in the following manner:-
4.14.3.1 the said licence shall cease to be coterminous with
this Agreement and shall become perpetual;
4.14.3.2 the rights granted to Boots under the said licence
shall be extended to include the right to maintain,
repair and modify the Core Plant;
4.14.3.3 Boots shall have the right to grant sub-licences to
third parties to perform any of the acts which Boots
is licensed to perform pursuant to the terms of the
said licence, but not further or otherwise.
5. SUPPLY OF FILM
5.1 Bioprogress will supply to Boots:-.
6. PAYMENT
6.1 Without prejudice to any right of termination contained within this
Agreement, Boots shall make the following initial payments to
Bioprogress:
6.2
6.3 In consideration of the licence granted by Bioprogress to Boots
pursuant to Clause 4.11, Boots shall pay to Bioprogress, with effect
from the date of the grant to Boots of the first Registration of the
Products, a licence fee in respect of each unit of plant, calculated as
follows:--
6.3.1
6.4
6.5
In respect of all payments due from Boots to Bioprogress pursuant to Clauses
6.1, 6.2, 6.3 and 6.4, Bioprogress shall submit one valid VAT invoice to Boots
in respect of each payment to be made. Each such invoice shall be deemed to have
been received by Boots, notwithstanding the provisions of Clause 19, on the date
upon which the payment to which the invoice in question relates is due, having
regard to the foregoing provisions of this Clause 6 or, if later, upon the
deemed date of receipt
9
by Boots of the said invoice, determined in accordance with the provisions of
Clause 19.
6.6 Boots shall pay to Bioprogress the sum due to Bioprogress in respect of
each valid VAT invoice submitted to Boots in accordance with the
provisions of this Clause 6 at or before the end of the month following
the month in which the invoice is received or is deemed to have been
received pursuant to the provisions of Clause 6.5
6.8 All payments referred to in this Clause 6 are exclusive of VAT at the
rate prevailing at the time of the taxable supply in question.
6.9 Notwithstanding that all payments in this Clause 6 are expressed in US
Dollars, Boots may at its discretion make any payments which it
required to make under this Clause 6 in Sterling. For this purpose the
amounts payable as expressed in US Dollars shall be converted to
Sterling by dividing the same by the US Dollar to Pound Sterling
Exchange Cross Rate published in the Financial Times on the day on
which the relevant sum is authorised for payment by Boots.
6.10 Bioprogress agrees to comply with the Income Tax (Sub-contractors in
the Construction Industry) Regulations 1193 S.I. No 743, as amended by
the Income Tax (Sub-contractors in the Construction Industry
(Amendments)) Regulations 1998 S.I. No 2622, or any amendment or
remarking thereof, and in accordance with the said Regulations to
provide Boots with evidence that it holds a valid tax exemption
certificate or a registration card. Alternatively, Bioprogress may at
its option provide to Boots written confirmation from its Tax Office
that the Regulations do not apply to this Agreement.
7. INTELLECTUAL PROPERTY RIGHTS
7.1 Bioprogress hereby warrants to Boots as follows:-
7.1.1 that all intellectual property (whether patented or
otherwise), know-how, technical information and all other
rights, knowledge and information of a similar nature
disclosed or to be disclosed by Bioprogress to Boots in order
to enable Boots to carry out the Commercial Development
Programme, or used by Bioprogress in the course of providing
co-operation and assistance to Boots in connection with the
carrying out of the Commercial Development Programme, or used
or intended to be used by Boots or any third
10
party in the manufacture of any Product at any time hereafter
(whether during the Commercial Development Programme or
pursuant to any commercial exploitation of the Product) and
relating to the film material used to form the capsule, and
the processes used to form and seal the capsules used in the
encapsulation of the capsule film are, or shall be, as between
Bioprogress and Boots, vested in Bioprogress or its Affiliates
absolutely and without encumbrance;
7.1.2 that the Plant Technology is or shall be vested in Bioprogress
or its Affiliates absolutely and without encumbrance; and
7.1.3 that Bioprogress has the full and unfettered right and power
to enter into this Agreement including, without limitation,
the right and power to enter into all its obligations
hereunder and to grant to Boots the rights purported to be
granted hereunder.
7.2 The warranties given by Bioprogress in Clause 7.1 will apply in full to
any Invention which hereafter vests in Bioprogress pursuant to Clauses
7.4 or 7.6.
7.3 Subject to Clauses 7.4 and 7.6, all Inventions relating to the Product
(including, without limitation, all materials and formulations used in
and necessary for the manufacture thereof, and all processes necessary
to make or otherwise relating to such materials and formulations) made
during or as a consequence of the execution of the Commercial
Development Programme (whether or not the same shall be completed) or
of the commercial exploitation of the Products, if applicable, shall be
the property of Boots.
7.4 All Inventions relating to the Plant or otherwise falling within the
definition of Plant Technology as set out in Clause 1 made by either
Bioprogress or Boots during or as a consequence of the execution of the
Commercial Development Programme (whether or not the same shall be
completed) or other commercial exploitation of the Products, shall be
the property of Bioprogress. However, the licence granted by
Bioprogress to Boots pursuant to Clause 4.11 shall extend to any
Invention to which this Clause 7.4 relates immediately upon the
creation thereof.
7.5 If Bioprogress, whether solely or jointly with Boots, makes any
Invention to which Clause 7.3 relates, Bioprogress agrees to assign to
Boots the entire right, title and interest anywhere in the world to
Boots, without any additional payment by Boots to Bioprogress other
than the charges expressed to be payable by Boots to Bioprogress under
this Agreement. Bioprogress shall, at the request and expense of Boots,
do all such things and execute all such documents as Boots shall
reasonably require in order validly to vest such right, title and
interest in Boots and shall co-operate fully in the prosecution by
Boots of any such right, title or interest.
7.6 All Inventions relating to the film material used to form the capsules
forming part of the Products, and the processes used to form and seal
the said capsules used in the encapsulation process of the capsule fill
shall be the property of Bioprogress or its Affiliates.
7.7 Subject to the provisions of Clause 7.8, if Boots, whether solely or
jointly with Bioprogress, makes any Invention to which Clause 7.6
relates either during or as a consequence of the execution of the
Commercial Development
11
Programme, or any part thereof, or of the commercial exploitation of
the Products, Boots agrees to assign to Bioprogress, or to such of its
Affiliates as Bioprogress may specify, the entire right, title and
interest therein anywhere in the world. Boots shall, at the request and
expense of Bioprogress, do all such things and execute all such
documents as Boots shall reasonably require in order validly to vest
such right, title and interest in Bioprogress or the relevant Affiliate
(as the case may be) and shall co-operate fully in the prosecution by
Bioprogress or such Affiliate (as the case may be) of any such right,
title or interest.
7.8 In the event that Bioprogress or (if applicable) its Affiliates decide
not to file any patent applications relating to any Invention to which
Clause 7.6 relates or fail to do so within six (6) months of the
completion or effective termination of the Commercial Development
Programme (or, if later, from the date on which such Invention is made,
of which Bioprogress shall immediately give notice to Boots) Boots may,
at its discretion, file patent applications relating to such Inventions
in any country or countries in the world in which patent applications
relating to the said Inventions have not previously been filed by
Bioprogress or (if applicable) its Affiliates. Bioprogress shall, if
required by Boots (whether for the purpose of filing patent
applications in respect of the same or otherwise) promptly assign or
procure the assignment to Boots of the entire right, title and interest
throughout the world in such Inventions without any payment other than
those expressed to be payable under this Agreement. Upon the assignment
to Boots of such right, title and interest, Boots shall grant to
Bioprogress an irrevocable, royalty-free, non-exclusive licence, with
the power to grant sub-licences, to use such Inventions and any patent
or patent applications applicable thereto for any purpose not directly
or indirectly competitive with the development, manufacture, sale,
distribution or marketing of the Products (and, for the avoidance of
doubt, it is hereby declared that any such purpose shall not be
regarded as not being so competitive purely on the basis that it is
intended to be carried on in any country in the world in which the
Products are not currently being developed, manufactured, sold,
distributed or marketed, whether by Boots or any third party). At the
request and expense of Boots, Bioprogress shall do, or procure the
doing of, all such things and execute or procure the execution of all
such documents as Boots shall reasonably require in order validly to
vest such right, title and interest in Boots, and shall co-operate
fully and procure that its Affiliates co-operate fully in the
prosecution by Boots of any such right, title or interest.
7.9 For the avoidance of doubt, all references to the right, title and
interest in an Invention shall include, without limitation, the right
to grant licences of the same anywhere in the world.
8. AFTER COMPLETION OR TERMINATION OF THE COMMERCIAL DEVELOPMENT PROGRAMME
8.1 Boots shall, within three (3) months of the completion of the
Commercial Development Programme, give notice to Bioprogress confirming
whether or not it wishes to proceed with the commercial exploitation of
the Products. If Boots fails to give such notice, it shall be deemed to
have given notice to Biopogress that it does not wish so to proceed.
8.2 If Boots gives notice to Bioprogress pursuant to Clause 8.1 that it
does not wish to proceed with the commercial exploitation of the
Products or if Boots
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terminates the Commercial Development Programme pursuant to Clause 3.3
(except where the reason for such termination is that Boots and
Bioprogress have failed to reach agreement on any matter which is
required to be agreed pursuant to or during the conduct of the
Commercial Development Programme, including without limitation any
matter to which Clause 6.2 relates), the following provisions shall
apply:-
8.2.1 all Inventions which may have been vested in Boots pursuant to
Clause 7, together with all patents and patent applications
relating thereto, shall immediately re-vest in Bioprogress or
such of its Affiliates as Bioprogress shall nominate, who
shall, subject to the provisions of Clause 8.3, have the full
and unencumbered right to exploit such Inventions, patents and
patent applications for any purpose throughout the Territory;
and
8.2.2 Boots shall, at the request and expense of Bioprogress,
promptly do all such things and execute all such documents as
Bioprogress shall reasonably require in order validly to vest
in it such Inventions, patents and patent applications.
8.3 If either Boots gives notice to Bioprogress that it does not wish to
proceed with the commercial exploitation of the Products, or Boots
gives notice of termination of the Commercial Development Programme
pursuant to Clause 3.3, and if in either case the reason for the giving
of such notice is that Boots considers that exploitation of the
Products on a commercial basis or the development of the Products on a
commercial basis (as the case may be) is not achievable on technical,
regulatory or commercial grounds, and Bioprogress at any time following
the giving of such notice develops or discovers or becomes aware of the
existence of and has the opportunity to acquire or exploit a process or
method which it reasonably believes to be capable of allowing the
development and subsequent exploitation on a commercial basis of the
Products, and Boots was unaware of the existence of such process or
method at the time when it gave such notice to Bioprogress, the
following provisions shall apply:-
8.3.1 Bioprogress shall forthwith give notice to Boots of the fact
that it has developed, discovered or become aware of the
existence of, the said process or method;
8.3.2 Boots shall, within three (3) calendar months of receipt of
such notice, give notice to Bioprogress confirming whether or
not it has any interest in resuming the Commercial Development
Programme or pursuing the commercial exploitation of the
Products. If Boots fails to give such notice within the said
period, it shall be deemed to have given notice to the effect
that it has no such interest;
8.3.3 If Boots gives notice to Bioprogress pursuant to Clause 8.3.2
that it has such interest, Boots and Bioprogress shall
forthwith negotiate in good faith, and use reasonable
endeavours to agree, comprehensive and mutually acceptable
terms and conditions enabling Boots to exploit such method or
process including, without limitation, the terms (if
applicable) upon which Bioprogress shall acquire title to, or
the right to use, all or part of any such method or process
from any third party the terms of any further commercial
development or exploitation of the Products, the ownership of
all intellectual property
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in, and other rights relating to, such method or process, and
the timescales for such development or exploitation.
8.3.4 If, notwithstanding the compliance by both parties with their
obligations as set out in Clause 8.3.3, the parties have not
within six (6) months of the commencement of the said
negotiations entered into a binding written agreement having
sufficient technical, commercial and legal efficacy to render
such development or exploitation reasonably capable of being
successfully prosecuted, either party may terminate the said
negotiations with immediate effect giving notice to that
effect to the other party;
8.3.5 until Boots has given, or is deemed to have given, notice to
Bioprogress pursuant to Clause 8.3.2 that it has no such
interest, or until the termination of negotiations in
accordance with Clause 8.3.3, the provisions of Clause 9 shall
apply.
9. EXCLUSIVITY
Bioprogress shall not, and shall procure that its Affiliates do not, at
any time enter into any discussions, negotiations or agreements,
whether binding or otherwise, with any third party, the purpose of
which, in whole or in part, is the development, manufacture, supply,
distribution marketing or promotion of any product which is the subject
of the Commercial Development Programme, or of any product which is
capable of being developed, sold, distributed, marketed or promoted in
competition with any such product, except in the following
circumstances:-
9.1 Boots has terminated the Commercial Development Programme, subject
always to the provisions of Clause 8.3, or this Agreement,; or
9.2 Boots has given notice to Bioprogress that it does not wish to proceed
with the commercial exploitation of the Products, subject always to the
provisions of Clause 8.3, or
9.3 Where the provisions of Clause 8.3 apply, negotiations entered into
pursuant to Clause 8.3.3 have been terminated pursuant to Clause 8.3.4.
10. FIELDS
In the event that either:-
11. CONFIDENTIALITY
11.1 Subject to the following provisions of this Clause 11, neither party
shall (whether during the term of this Agreement or thereafter) without
the prior written consent of the other disclose to any person, firm or
company any information supplied by the other under or in contemplation
of this Agreement, or use any such information except as contemplated
or provided hereunder. Provided that nothing in this Clause 11 shall
prevent Boots from disclosing any information to which this Clause 11
applies to professional advisers, or to actual or potential suppliers
of products or services whom Boots needs to consult in order to
evaluate its interest in entering into or proceeding with the
Commercial Development Programme, or in agreeing
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any terms with Bioprogress pursuant to Clauses 6.2, 8.3.3 or 10.2,
subject always to the compliance by Boots with its obligations under
Clause 11.12
11.2 Each party shall inform any of its employees to whom any of the said
information is disclosed, and Boots shall in addition inform any third
party to whom any of the said information is disclosed, pursuant to
Clause 11.1 of the provisions of this Clause 11 and shall use
reasonable endeavours to ensure that each such employee or third party
(as the case may be) shall observe such provisions.
11.3 The obligations of each party under this Clause shall not apply, or
shall cease to apply, to any information which:-
11.3.1 is public knowledge at the time of this Agreement, or
subsequently becomes public knowledge through no act or
failure to act on the part of the recipient or its employees;
or
11.3.2 is known to the recipient and at its free disposal at the time
of disclosure, or which is subsequently disclosed to the
recipient by a third party lawfully entitled to disclose the
same; or
11.3.3 is required to be disclosed by law.
12. FORCE MAJEURE
12.1 Neither party shall be under any liability whatsoever to the other for
failure or delay in the performance of its obligations under the
Agreement where such performance becomes impracticable by reason of
Force Majeure.
12.2 The party whose performance is not so affected by reason of Force
Majeure shall be entitled to terminate this Agreement with immediate
effect by giving notice to the other party if the performance by the
other party of its obligations under this Agreement becomes or remains
impracticable by reason of Force Majeure for an aggregate period in
excess of ninety (90) days.
12.3 In this Clause, the expression "Force Majeure" means any circumstances
or matters which are beyond the reasonable control of the party
affected.
13. TERMINATION
13.1 Either party may terminate this Agreement with immediate effect at any
time prior to notice being given or being deemed to have been given by
Boots, pursuant to Clause 8.1, that it wishes to proceed with the
commercial exploitation of the Products, by giving notice to the other
party in any of the following events:-
13.1.1 if the other party should be in material breach of any of the
provisions of this Agreement and such breach (if capable of
remedy) shall continue thirty (30) days after notice in
writing specifying the breach and requiring the same to be
remedied has been given; or
13.1.2 if a resolution is passed or adopted for the winding-up of the
other party (otherwise than for the purposes of and followed
by an amalgamation or reconstruction previously approved in
writing), or if a petition is presented for the appointment of
an administrator or
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liquidator (and is not discharged within 14 days), or if a
receiver or administrative receiver is appointed, or an
encumbrancer takes possession of the whole or any part of its
undertaking or assets, or if the other party becomes insolvent
, or if any analogous event shall occur in any territory to
whose jurisdiction the other party is subject; or
13.1.3 if the other party makes or seeks to make any composition or
arrangement with its creditors, or proposes any voluntary
arrangement, or is unable to pay its debts as they fall due,
or if any distress or execution is levied on any of its assets
(and is not discharged within fourteen (14) days), or if any
judgment for a monetary sum be given against it and is not
paid within fourteen (14) days, or if any analogous event
shall occur in any territory to whose jurisdiction the other
party is subject; or
13.1.4 if the other party ceases or, in the reasonable opinion of the
party giving notice of termination, is likely to cease, to
carry on the whole or any relevant part of its business or
trade.
13.2 Termination for whatever cause of this Agreement shall be without
prejudice to the rights of either party arising hereunder or as a
result of any default or breach of obligation hereunder which shall
have accrued prior to the date of such termination.
13.3 Notwithstanding termination of this Agreement, the provisions of
Clause 11 shall continue in full force and effect.
14. ASSIGNMENT
14.1 Boots may assign any of its rights or obligations hereunder to any of
its Affiliates.
14.2 This Agreement is personal to Bioprogress who shall not, without Boots'
prior written consent, assign any of its rights or obligations
hereunder and any purported or attempted assignment by Bioprogress or
transfer by operation of law without such consent shall give Boots the
right to terminate this Agreement with immediate effect by giving
notice in writing to Bioprogress.
14.3 This Agreement shall be binding on the permitted assignees and
successors of the parties hereto.
15. CHANGE OF CONTROL
15.1 Bioprogress shall inform Boots immediately in the event of there being
any change in the control of Bioprogress, for which purpose the
expression "control" shall have the same meaning as that contained in
the definition of "Affiliate" in Clause 1.1.
15.2 If there is any such change in control (whether or not Boots has
received notice thereof), Boots may terminate this Agreement with
immediate effect by giving notice in writing to Bioprogress.
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16. RELATIONSHIP
Each party shall be responsible for its own obligations arising under
or consequent upon this Agreement and it is agreed that neither this
Agreement nor the activities of the parties shall result in the
creation of a partnership or other relationship whereby either party
shall be held in any way responsible for the acts or omissions of the
other.
17. WAIVER
17.1 No relaxation, forbearance, delay or indulgence by either party in
exercising its rights under this Agreement, or any granting of time by
such party, shall prejudice or affect its rights hereunder.
17.2 No waiver of any default or breach under this Agreement, or failure to
enforce any rights by either party, shall constitute a waiver of any
subsequent or continuing default or breach.
17.3 No waiver shall be effective unless made in writing, agreed and signed
on behalf of the party so granting the waiver.
18. NOTICES
18.1 Any notice, request or other communication required to be given under
this Agreement shall be made in the English language, in writing, and
may be hand-delivered or sent by pre-paid first class post, or
facsimile transmission, to the recipient at the address first set out
in this Agreement (or such other address as either party may specify by
prior written notice to the other for this purpose) and marked for the
attention of the following respective recipients:-
18.1.1 in the case of notice served upon Boots, to the Company
Secretary at the address of Boots as stated in the heading to
this Agreement, with a copy to the Managing Director, Boots
Healthcare International, at the same address; and
18.1.2 in the case of a notice served on Bioprogress, to the Managing
Director, Bioprogress Technology Limited, at the address of
Bioprogress as stated in the heading to this Agreement.
18.2 Subject to Clause 18.3, notice shall be deemed to have been received:-
18.2.1 if delivered by hand, on the date of delivery; or
18.2.2 if sent by post, on the second Working Day after the date of
posting; or
18.2.3 if sent by facsimile, on the date of transmission, provided
that the sender's apparatus has recorded the transmission as
having been successfully made.
18.3 Where, having regard to Clause 18.2, any notice would be deemed to have
been given on a day which is not a Working Day, or if the actual time
of delivery or transmission is after 1700 hours, that notice shall be
deemed to have been served on the next following Working Day.
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18.4 It shall be sufficient in proving service that the letter containing
the notice was properly addressed and, as the case may be, delivered,
put in the post or transmitted.
19. ENTIRE AGREEMENT AND AMENDMENTS
19.1 This Agreement (together with any documents referred to herein)
supersedes any preliminary or previous correspondence, negotiations,
arrangements or agreements (except in the case of fraud) between, and
represents the entire understanding of, the parties in relation to the
matters specifically dealt with herein.
19.2 No amendment to or alteration of this Agreement shall be effective
unless made in writing, agreed and signed by a duly authorised
representative of each of the parties hereto.
20. APPLICABLE LAW AND SERVICE OF PROCESS
20.1 The construction, interpretation, meaning, validity and performance of
this Agreement shall be governed by the laws of England, which is
agreed to be the proper law of this Agreement.
20.2 The addresses of the parties for service of any process or documents
required to be served by reason of law (or any rule, code or regulation
having the force of law) in the United Kingdom are as follows:-
20.2.1 in the case of Boots, the address of Boots as set out in the
heading to this Agreement, marked for the attention of the
Company Secretary, with a copy to the Managing Director, Boots
Healthcare International; and
20.2.2 in the case of Bioprogress, the address of Bioprogress as set
out in the heading to this Agreement, marked for the attention
of the Managing Director.
20.3 The parties hereto submit to the non-exclusive jurisdiction of the
English Courts.
21. INVALIDITY AND SEVERABILITY
21.1 If any provision of this Agreement shall be held unlawful, invalid or
unenforceable in whole or in part by any court or competent authority,
such provision shall be deemed severed and subject to Clause 21.2, the
Agreement shall continue to be valid as to all other provisions, and
the parties shall meet and negotiate in good faith a valid and
enforceable replacement for the severed provision, which replacement
shall be designed to achieve as nearly as possible the same commercial
objective as the original.
21.2 In the event that, notwithstanding the performance of the parties of
their obligations under Clause 21.1, the parties cannot agree upon a
replacement provision within one (1) calendar month of the same being
held unlawful, invalid or unenforceable, then either party may
terminate this Agreement forthwith by notice in writing.
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22. ANNOUNCEMENTS
Neither party shall, without the prior written consent of the other
(such consent not be unreasonably withheld) make any announcement or
public statement, or make any other form of public disclosure
(including, without limitation, the issuing of any press release)
relating to or concerning this Agreement or any part thereof, or any
activity carried on pursuant thereto. Provided that nothing in this
Clause 22 shall prevent either party from making any announcement
required by the rules of any stock exchange to which the party making
such announcement is subject, in which event the party required to make
such announcement shall use reasonable endeavours to agree with the
other party the text of such announcement prior to disclosure, and
shall in any event inform the other party of the requirement to make
such disclosure prior to the making of the same.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written
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