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EXHIBIT 10.7
LICENSE AGREEMENT
This license agreement (the "Agreement") is made as of August 9,
2007 (the
"Effective Date") by and between Proteo Biotech AG, a German
joint stock
corporation, Am Kiel Kanal 44, 24106 Kiel, Germany ("Proteo
Biotech"); and Rhein
Minapharm Biogenetics SAE, an Egypt company Societe Anonyme
Egyptienne Mina
Street, Industrial Zone A3#2, 10th of Ramadan, Egypt
("Licensee"). Proteo
Biotech and Licensee are referred to individually and
collectively as a "Party"
or the "Parties."
RECITALS
WHEREAS, Proteo Biotech has certain rights with respect to the
compound Elafin
and has received an Orphan Drug Status by the EMEA for Pulmonary
Arterial
Hypertension;
WHEREAS, Licensee is a joint venture company established by
Minapharm
Pharmaceuticals S.A.E. and Rhein Biotech AG, and is experienced
in the
development, manufacturing and commercialization of
biopharmaceuticals,
including immune modulators and cytokines;
WHEREAS, Licensee desires to obtain a license, to Develop,
Manufacture and
Commercialize (each as defined below) the compound Elafin and
related Know-how,
and Proteo Biotech is willing to grant such license to Licensee
in accordance
with the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained
herein and other good and valuable consideration, the receipt
and sufficiency of
which is hereby acknowledged, the Parties, intending to be
legally bound, agree
to the following:
SECTION 1
DEFINITIONS
Unless the context otherwise requires, the following capitalized
terms in
this Agreement shall have the following meanings (and if the
context so
requires, including any gender, plural or singular thereof and
including any
capitalized verb, adverb or adjective as relating to such
defined term):
"ADVERSE ACTIVITIES" shall have the meaning set forth in Section
4.4.
"AFFILIATE" shall mean, with respect to a Party, any Person
that, directly
or indirectly, controls, is controlled by or is under common
control with such
Party. For purposes of this definition, "control" and the terms
"controlled by"
and "under common control with" or phrases with similar import
shall mean the
power to direct the management or policies of Person, whether
through the
ownership of voting securities, by contract relating to voting
rights or
otherwise, or by the ownership, directly or indirectly, of at
least fifty
percent (50%) of the voting securities or other ownership
interest of a business
entity.
"AGREEMENT" shall have the meaning set forth in the recitals to
this
Agreement.
[ * ] The following portion has been omitted pursuant to a
Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange
Act of 1934 and
has been filed separately with the Securities and Exchange
Commission.
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"APPLICABLE LAW" shall mean all applicable laws, rules and
regulations,
including any rules, regulations, guidelines or other
requirements of any
Regulatory Authorities that may be in effect from time to
time.
"CHANGE OF CONTROL" means, with respect to the Parties, their
ultimate
parent corporations (even if jointly controlling an Affiliate of
either Party)
or any successor to the foregoing, (i) any transaction or
related series of
transactions involving such Person and any Third Party which
results in the
control (as control is defined in the definition of "Affiliate")
by such Third
Party or (ii) the sale or other transfer to a Third Party of all
or
substantially all of such party's assets which relate to this
Agreement.
"CLINICAL DATA" shall mean all information with respect to the
Licensed
Products and the Licensed Compound, made, collected or otherwise
generated in
the performance of or in connection with clinical studies or
other studies for
the Licensed Products, including any data, reports and results
with respect
thereto.
"COMBINATION PRODUCT" shall mean a Licensed Product that
contains the
Licensed Compound as an active ingredient together with one or
more other active
ingredients that are sold either as a fixed dose or as separate
doses in a
single package.
"COMMERCIALIZATION" shall mean any and all activities related to
the
marketing, promotion or sale of the Licensed Product(s).
"CONTROL" shall mean, with respect to any item of Information,
Regulatory
Documentation, Patent or Intellectual Property Right, possession
of the right,
whether directly or indirectly, and whether by ownership,
license or otherwise
(other than by operation of the assignments, license and other
grants in this
Agreement), to assign or grant a license, sublicense or other
right to or under,
such Information, Regulatory Documentation, Patent or
Intellectual Property
Right as provided for herein without violating the terms of any
agreement or
other arrangement with any Third Party.
"DERIVATIVE COMPOUND" means an analogue or derivative of the
Licensed
Compound. For the avoidance of doubt, a Derivative Compound is
not an
Improvement.
"DEVELOP" and "DEVELOPMENT" shall mean all activities related to
research,
preclinical and other non-clinical testing, test method
development and
stability testing, toxicology, formulation, process development,
manufacturing
scale-up, qualification and validation, quality
assurance/quality control
related to the foregoing manufacturing activities, clinical and
other studies,
including manufacturing in support thereof, statistical analysis
and report
writing, the preparation and submission of Drug Approval
Applications,
regulatory affairs with respect to the foregoing and all other
activities
otherwise requested or required by a Regulatory Authority as a
condition or in
support of obtaining or maintaining a Regulatory Approval.
"DRUG APPROVAL APPLICATION" shall mean a new drug application
filed with
the applicable Regulatory Authority of a country in the Licensee
Territory.
"EFFECTIVE DATE" shall mean the effective date of this Agreement
as set
forth in the recitals to this Agreement.
"EXPLOIT" and "EXPLOITATION" shall mean to make, have made,
import, use,
sell or offer for sale, including to research, Develop,
Commercialize, register,
Manufacture, have Manufactured, hold or keep (whether for
disposal or
otherwise), have used, export, transport, distribute, promote,
market or have
sold or otherwise dispose of.
"FIELD" shall mean medical applications intended for use in the
diagnosis,
cure, mitigation, treatment, or prevention of disease in man but
shall exclude
all other uses such as the uses for oral care, dental care,
cosmetics, medical
devices, research reagents and animal health.
"FIRST INDICATION" shall mean the treatment of patients [ *
].
"FURTHER INDICATION(S)" shall mean each indication, other than
the First
Indication.
[ * ] The following portion has been omitted pursuant to a
Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange
Act of 1934 and
has been filed separately with the Securities and Exchange
Commission.
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"GAAP" shall mean the generally accepted accounting principles
consistently
applied as applied in Egypt.
"IMPROVEMENT" shall mean any modification, variation or revision
to a
compound, product or technology or any discovery, technology,
device or process
or formulation related to such compound, product or technology,
whether or not
patented or patentable, including any enhancement in the
efficiency, operation,
manufacture (including any manufacturing process), ingredients,
preparation,
presentation, formulation, means of delivery, packaging or
dosage of such
compound, product or technology, any discovery or development of
any new or
expanded indications for such compound, product or technology or
any discovery
or development that improves the stability, safety or efficacy
of such compound,
product or technology; provided that, Improvements shall exclude
any Derivative
Compound.
"INFORMATION" shall mean all technical, scientific and other
know-how and
information, trade secrets, knowledge, technology, means,
methods, processes,
practices, formulae, instructions, skills, techniques,
procedures, experiences,
ideas, technical assistance, designs, drawings, assembly
procedures, computer
programs, apparatuses, specifications, data, results and other
material,
including: biological, chemical, pharmacological, toxicological,
pharmaceutical,
physical and analytical, pre-clinical, clinical, safety,
manufacturing and
quality control data and information, including study designs
and protocols;
assays and biological methodology; (whether or not confidential,
proprietary,
patented or patentable) in written, electronic or any other form
now known or
hereafter developed.
"INTELLECTUAL PROPERTY RIGHTS" shall mean Trademarks, service
marks, trade
names, registered designs, design rights, copyrights (including
rights in
computer software), database rights, trade secrets and any
rights or property
similar to any of the foregoing (other than Patents) in any part
of the
Territory whether registered, capable of being registered or not
registered,
together with the right to apply for the registration of any
such rights.
"JOINT KNOW-HOW" shall have the meaning set forth in Section
2.5.
"JOINT PATENTS" shall have the meaning set forth in Section
2.5.
"KNOWLEDGE" shall mean actual knowledge of the vice presidents
or the chief
executive officers of a Party of the facts and information then
in their
possession without any duty to conduct any investigation with
respect to such
facts and information.
"LEGAL ACTION" shall have the meaning set forth in Section
6.1.
"LICENSED COMPOUND" shall mean Elafin as described in the
European Patent
EP0402068 "Title: Polypeptides and polypeptide analogues with
inhibitory
activity against human elastase.
"LICENSED PRODUCT" shall mean any form, mode of administration
or dosage of
a pharmaceutical composition or preparation that contains the
Licensed Compound
as an active ingredient, including any Improvements thereto and
including the
licensed product being attached to a polymer ("Pegylation"),
whether such
Pegylation has been made by Licensee or Licensor.
"LICENSEE" shall have the meaning set forth in the recitals to
this
Agreement.
"LICENSEE IMPROVEMENT" shall mean any Improvement conceived or
used by or
on behalf of Licensee in connection with the Development of the
Licensed Product
under this Agreement.
"LICENSEE KNOW-HOW" shall mean all Information, including any
Licensee
Improvements and Clinical Data, that is Controlled as of the
Effective Date or
during the term of this Agreement by Licensee that is not
generally known and
(i) is developed or acquired by or licensed to Licensee under or
in connection
with this Agreement or otherwise used by or on behalf of
Licensee in the
Exploitation of the Licensed Product or the Licensed Compound or
(ii) is
necessary for the Exploitation of the Licensed Product or the
Licensed Compound.
[ * ] The following portion has been omitted pursuant to a
Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange
Act of 1934 and
has been filed separately with the Securities and Exchange
Commission.
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"LICENSEE PATENTS" shall mean all Patents Controlled by Licensee
that are
necessary (or with respect to Patent applications, would be
necessary if such
Patent applications were to issue as Patents) for the
Exploitation of the
Licensed Product, the Licensed Compound or any Licensee
Improvement thereto,
including those that claim or cover any Licensed Compound,
Licensed Product,
Licensee Know-How, any Licensee Improvement thereto or the
Exploitation of any
of the foregoing.
"LICENSEE TERRITORY" shall mean Egypt and Middle East North
Africa (MENA)
Region as defined in ANNEX A
"MANUFACTURE" and "MANUFACTURING" shall mean all activities
related to the
production, manufacture, processing, filling, finishing,
packaging, labeling,
shipping and holding of the Licensed Product or any intermediate
thereof,
including process development, process qualification and
validation, scale up,
pre-clinical, clinical and commercial manufacture and analytic
development,
product characterization, stability testing, quality assurance
and quality
control.
"MINIMUM ROYALTY" shall have the meaning set forth in Section
3.2.
"NET SALES" shall mean the gross amounts invoiced by Licensee to
Third
Parties within the Territory for the sale of Licensed Product
(the "Invoiced
Sales"), and, only if being separately charged on customer
invoices, after
deduction of (i) usual trade, cash or quantity discounts, (ii)
customs duties or
(iii) value added or other sales taxes.
"PARTY" or "PARTIES" shall have the meaning set forth in the
recitals to
this Agreement.
"PENDING" means something of which a Person has been notified in
writing.
"PERSON" shall mean an individual, sole proprietorship,
partnership,
limited partnership, limited liability partnership, corporation,
limited
liability company, business trust, joint stock company, trust,
unincorporated
association, joint venture or other similar entity or
organization, including a
government or political subdivision, department or agency of a
government.
"PROTEO BIOTECH" shall have the meaning set forth in the
recitals to this
Agreement.
"PROTEO BIOTECH IMPROVEMENT" shall mean any Improvement
conceived or used
by or on behalf of PROTEO Biotech in connection with the
Development of the
Licensed Product under this Agreement.
"PROTEO BIOTECH KNOW-HOW" shall mean all Information, including
any PROTEO
Biotech Improvements and Clinical Data, that is Controlled by
PROTEO Biotech as
of the Effective Date or during the term of this Agreement that
is not generally
known and (i) is developed or acquired by or licensed to PROTEO
Biotech under or
in connection with this Agreement or otherwise used by or on
behalf of PROTEO
Biotech in the Development or Commercialization of the Licensed
Product or (ii)
is necessary for the Development or Commercialization of the
Licensed Product.
"PROTEO BIOTECH TERRITORY" shall mean the entire world, other
than the
Licensee Territory.
"REGULATORY APPROVAL" shall mean, with respect to a country in
the
Territory, any and all approvals (including Drug Approval
Applications),
licenses, registrations or authorizations of any Regulatory
Authority necessary
to commercially distribute, sell or market the Licensed Product
in such country,
including, where applicable, (i) pricing or reimbursement
approval in such
country, (ii) pre- and post-approval marketing authorizations
(including any
prerequisite Manufacturing approval or authorization related
thereto), (iii)
labeling approval and (iv) technical, medical and scientific
licenses.
"REGULATORY AUTHORITY" shall mean any applicable supra-national,
federal,
national, regional, state, provincial or local regulatory
agencies, departments,
bureaus, commissions, councils or other government entities
regulating or
otherwise exercising authority with respect to the Exploitation
of the Licensed
Compound or the Licensed Product in the Territory.
[ * ] The following portion has been omitted pursuant to a
Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange
Act of 1934 and
has been filed separately with the Securities and Exchange
Commission.
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"REGULATORY DOCUMENTATION" shall mean all applications,
registrations,
licenses, authorizations and approvals (including all Regulatory
Approvals), all
correspondence submitted to or received from Regulatory
Authorities (including
minutes and official contact reports relating to any
communications with any
Regulatory Authority) and all supporting documents and all
clinical studies and
tests, relating to the Licensed Product and all data contained
in any of the
foregoing, including Drug Approval Applications, regulatory drug
lists,
advertising and promotion documents, Clinical Data, adverse
event files and
complaint files.
"SALES PLAN" shall mean the plan (as amended) for the
Commercialization of
the Licensed Product(s) in the Field in the Licensee Territory
as set forth in
Section 5.1.
"THIRD PARTY" shall mean any Person other than PROTEO Biotech,
Licensee and
their respective Affiliates.
"THREATENED" means a Proceeding, claim, dispute, action, or
other matter
which will be deemed to have been "Threatened" if any respective
written demand
or written statement has been received by a Person or any notice
has been given
in writing.
SECTION 2
LICENSE GRANTS
2.1 LICENSE GRANT. PROTEO Biotech hereby grants to Licensee,
subject to the
terms and conditions of this Agreement, (i) an exclusive and
royalty-bearing
license (without the right to grant sublicenses) under the
PROTEO Biotech
Know-How to obtain, maintain and hold Regulatory Approvals for
and
toCommercialize the Licensed Product in the Field in the
Licensee Territory,
however, with respect to countries in the Licensee Territory
other than Egypt,
the license shall be subject to the Parties agreement on the
royalty rates under
Section 3.2.2, (ii) an exclusive license to Manufacture or have
Manufactured the
licensed Product in Egypt and (iii) a non-exclusive license to
Manufacture or
have Manufactured the licensed Product in the other countries of
the Licensee
Territory.
Licensee irrevocably acknowledges that the PROTEO Biotech
Know-How is
confidential and substantial and that without PROTEO Biotech
Know-How Licensee
would not be able to obtain and maintain Regulatory Approvals,
access to PROTEO
Biotech Know-How will provide Licensee with a competitive
advantage in the
marketplace and thus, the PROTEO Biotech Know-How has a
substantial commercial
value and the payments set forth in Section 3 are, in part,
intended to
compensate PROTEO Biotech for such exclusivity, competitive
advantage and
commercial value.
2.2 EXCLUDED RIGHTS. PROTEO Biotech retains all right, title and
interest
in and to the PROTEO Biotech Patents, the PROTEO Biotech
Know-How, the Hansenula
Sublicense, the Regulatory Data and the PROTEO Biotech Corporate
Name as may be
necessary or useful (i) to obtain, maintain and hold Regulatory
Approvals for,
and to market, sell, have sold and otherwise Commercialize and
Exploit, the
Licensed Product in the PROTEO Biotech Territory, (ii) to
Develop and Exploit
the Licensed Product in the Territory to exercise its rights and
perform its
obligations hereunder and to market, sell and have sold and
otherwise
Commercialize the Licensed Product in the PROTEO Biotech
Territory, and (iii) to
Manufacture and have Manufactured the Licensed Compound and the
Licensed Product
in the Territory. Except as expressly provided herein, PROTEO
Biotech grants no
other right or license (express or implied), not otherwise
expressly granted
herein and Licensee shall refrain from any activities whatsoever
outside the
field and outside the Licensee Territory. Licensee shall at any
time refrain
from any activities including Commercialization and Exploitation
of the Licensed
Compound and the Licensed Product(s) outside the Field, outside
the Licensee
Territory and outside the scope of this Agreement.
[ * ] The following portion has been omitted pursuant to a
Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange
Act of 1934 and
has been filed separately with the Securities and Exchange
Commission.
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2.3 GRANT BACK LICENSE. Licensee hereby grants to PROTEO
Biotech: a
perpetual, irrevocable royalty-free license, with the right to
sublicense
through multiple tiers of sublicensees, under the Licensee
Patents and the
Licensee Know-How (i) to obtain, maintain and hold Regulatory
Approvals for the
Licensed Product in the PROTEO Biotech Territory, which license
shall be
exclusive, (ii) to Exploit the Licensed Compound and the
Licensed Product in the
Territory as necessary or useful to exercise its rights and
perform its
obligations hereunder, and the right to otherwise Exploit the
Licensed Compound
and the Licensed Product in the PROTEO Biotech Territory, which
license shall be
exclusive in the PROTEO Biotech Territory, and (iii) to
Manufacture / have
Manufactured the Licensed Compound and the Licensed Product in
the Territory,
which grant shall be non exclusive.
2.4 OWNERSHIP OF JOINT PATENTS AND JOINT KNOW-HOW. [ * ].
SECTION 3
REMUNERATION
3.1 GENERAL. In consideration of the licenses and other rights
granted
herein, Licensee shall make the following payments to PROTEO
Biotech:
(A) UPFRONT PAYMENTS. Licensee shall make a payment of United
States
[ * ] to Proteo Biotech to reimburse certain past development
cost of PROTEO
Biotech in connection with the Licensed Compound. United States
Dollar [ * ]
thereof shall be a non-reimbursable and non-creditable payment
payable by
Licensee on the Effective Date. A further non-creditable payment
of United
States Dollar [ * ] shall be made by Licensee within 10 days
after issuance of
an approval relating to the commencement of a clinical
Development of any of the
First Indication or any other Further Indication by the
competent Egyptian
authority. This payment [ * ] shall only be reimbursable by
Proteo Biotech to
Licensee, if within [ * ] from the approval relating to the
commencement of a
clinical Development (i) the Regulatory Approval by the Egyptian
Drug Approval
Authority is incontestably rejected or (ii) the results of
clinical trials
relating to the First Indication and any other Further
Indication prove that no
Regulatory Approval for such indications could be reasonably be
expected to be
obtained. If any such decision Egyptian Drug Approval Authority
is made later
than [ * ] after an approval relating to the commencement of a
clinical
Development, this payment will not be reimbursed. Licensee's
request for
reimbursement of the payment [ * ] shall be deemed a default of
Licensee under
Section 10.2 hereof and Licensor shall be entitled to terminate
this Agreement
in its entirety.
(B) MILESTONE PAYMENTS. Licensee shall make non creditable
and
non-reimbursable milestone payments provided below within ten
(10) days
following achievement, after the Effective Date, of the
respective milestones:
(a) Upon obtaining the first Regulatory Approval in a country in
the [ * ]
Territory for the First Indication or any of the Further
Indications (whichever occurs first)
(b) Upon the start of Commercialization for the First Indication
or [ * ]
any of the Further Indications in any of the countries within
the
Licensee Territory
[ * ] The following portion has been omitted pursuant to a
Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange
Act of 1934 and
has been filed separately with the Securities and Exchange
Commission.
Page 6 of 24
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3.2 ROYALTIES. Subject to the following provisions under this
Section 3,
Licensee shall pay to PROTEO Biotech, during the term of this
Agreement and for
each full or partial calendar year on a quarterly basis,
royalties based on
aggregate Net Sales of the Licensed Product in the Licensee
Territory:
(a) for Net Sales of the Licensed Product in Egypt, the royalty
rate shall
be [ * ];
(b) for Net Sales of the Licensed Product in the other countries
in the
Licensee Territory, the royalty rate shall be between a minimum
of
[ * ] and a maximum of [ * ], depending on the net export sales
price
for each country, to be agreed to between the Parties on country
by
country basis.
(c) In the event that Licensee intends to sell the Licensed
Product as a
Combination Product, the Net Sales shall be equitably calculated
upon
the estimated commercial values of the proprietary active
components
of such Combination Product, and the Parties shall negotiate and
agree
upon such Net Sales prior to any sale of such Combination
Product.
(d) In the event that sales of the Licensed Products are made
from
licensee to an Affiliate of Licensee, the royalties payable
by
Licensee shall be calculated on the basis of the Net Sales
effected or
made by such Affiliate.
Depending on the approved indication(s), both parties shall
agree on an
equitable minimum annual royalty for each country within the
Territory on the
basis of the Sales Plan, subject to annual review (the "MINIMUM
ROYALTY")
3.3 ROYALTY PAYMENT AND STATEMENTS. Running royalties shall be
paid on a
quarterly basis, within ninety (90) days after the end of each
calendar quarter,
based on the Net Sales during such calendar quarter. The
royalties shall be
calculated in accordance with GAAP and with the terms of this
Section 3. Each
royalty payment hereunder shall be accompanied by a statement
showing the
invoiced sales and the Net Sales, the number of units of
Licensed Product sold
on a country-by-country basis ands on a size-by-size basis
during the applicable
calendar quarter, any deductions from invoiced sales, and the
amount of
royalties due on such Net Sales.
3.4 TAXES. All amounts payable by Licensee to PROTEO Biotech
shall be made
without set-off and without deduction or withholding of any
taxes, duties,
imposts, fees or charges, except as required by Applicable Law.
If a tax treaty
for the avoidance of double taxation or any similar treaty is
applicable, Proteo
Biotech may provide to Licensee or the appropriate governmental
authority the
respective forms and documentation necessary to benefit from the
advantages for
such treaty and Licensee shall assist Proteo Biotech to achieve
such benefits.
All Payments are exclusive of value added or similar tax. If any
such tax is
chargeable in respect of any payments, Licensee shall in
addition pay or
reimburse and hold harmless, as the case may be, to Proteo
Biotech such tax.
3.5 BANK ACCOUNT AND CURRENCY. All payments to PROTEO Biotech
shall be made
in USD to such bank account as Proteo Biotech may designate to
Licensee from
time to time. With respect to sales not made in USD by Licensee,
royalty
payments shall be calculated based on the currency exchange
rates for the
calendar quarter for which remittance is made for royalties. For
each calendar
quarter and each currency, such exchange rate shall be applied
as is effective
at the last day of such calendar quarter; the exchange rates to
be derived from
the FxConverter as offered by "www.oanda.com" or, if not
available, as otherwise
agreed by the Parties.
3.6 INTEREST ON LATE PAYMENT. If any payment due to Proteo
Biotech is
overdue, then Licensee shall pay interest thereon at an annual [
* ].
[ * ] The following portion has been omitted pursuant to a
Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange
Act of 1934 and
has been filed separately with the Securities and Exchange
Commission.
Page 7 of 24
<PAGE>
3.7 ACCOUNTING AND ACCOUNTING DISPUTES. Unless otherwise
required by
Applicable Law, during the term of this Agreement and for a
period of 6 months
thereafter, Licensee shall keep and maintain (and shall cause
its Affiliates to
keep and maintain) separate, complete and accurate books and
records permitting
the calculation and determination of the royalties payable to
Proteo and shall
permit (and shall cause its Affiliates to permit) Proteo Biotech
upon reasonable
notice to examine such books and records. All reasonable cost
and expenses in
connection with such examination shall be borne by Proteo
Biotech, unless the
audit reveals a shortfall of more than three percent (3%) from
the reported
amounts. If the parties cannot agree on the amount of royalties
payable by
Licensee, PROTEO Biotech and Licensee shall in good f
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