Exhibit 10.1
LICENSE AGREEMENT
This Agreement is effective as of the 28th day
of September, 2009 (the “Effective Date”) by and
between Bio Holding, Inc., a corporation organized and existing
under the laws of the State of North Carolina and having a business
address at 1302 Nash Street N, Wilson, North Carolina 27893-2364
(“BIO HOLDING”) and Omni Bio Pharmaceutical, Inc., a
corporation organized and existing under the laws of the State of
Colorado, and having a business address at 5350 South Roslyn
Street, Suite 400, Greenwood Village, Colorado 80111
(“OMNI”).
Whereas BIO HOLDING owns various proprietary and
intellectual property rights including those pertaining to
treatment of various clinical conditions such as, but not limited
to, diabetes in respect to which it is prepared to grant the
licenses provided for herein to OMNI; and
Whereas OMNI wishes to acquire licenses under
and to obtain access to BIO HOLDING’s proprietary and
intellectual property rights for treatment of diabetes;
Now therefore, in consideration of the mutual
covenants contained herein and for other good and valuable
consideration, the adequacy and receipt of which is hereby
acknowledged, the parties agree to the following terms and
conditions.
ARTICLE I
GENERAL DEFINITIONS AND
RELATIONSHIPS AMONG DEFINITIONS
|
|
“AGREEMENT” means this document, its
attachments, all addenda, schedules, exhibits, appendices, and any
amendments to the foregoing.
|
|
|
“CONFIDENTIAL INFORMATION” means any
and all information which is disclosed by either party to the other
verbally, electronically, visually, or in a written or other
tangible form which is either identified or should be reasonably
understood to be confidential or proprietary. CONFIDENTIAL
INFORMATION includes, but is not limited to, the specific terms
and/or conditions of this AGREEMENT, trade secrets, ideas,
processes, formulas, programs, software, source of supply,
technology, discoveries, developments, inventions, techniques,
marketing plans, strategies, forecasts, unpublished financial
statements, prices, costs, and customer lists.
|
|
|
“TERRITORY” means
worldwide.
|
|
|
“EXCLUDED
FIELD OF USE” means any purposes other than treatment that is
related directly to treatment of diabetes. EXCLUDED
FIELD OF USE includes treatments of any clinical conditions that is
not directly related to diabetes such as, but not limited to,
treatment of any complications or secondary clinical conditions
associated with diabetes, other than those uses which may be
complications or secondary clinical conditions that were previously
licensed to Omni by agreements between the Regents of University of
Colorado and APRO Pharmaceutical or MaxCure (now
“OMNI”) relating to Executed License Agreements
(attached as Exhibit A) hereinafter referred to as
“OMNI’s Secondary Clinical
Conditions.”
|
|
|
“FIELD OF
USE” means solely for treatment of diabetes. FIELD
OF USE does not include treatment of any complications or secondary
clinical conditions related to diabetes, other than
OMNI’s Secondary Clinical Conditions.
|
|
|
“GROSS
REVENUE” means the total gross revenue derived by OMNI
related to selling or use of LICENSED PRODUCTS in the FIELD OF USE
and the total gross revenue derived by OMNI by sub-licensing the
LICENSED TECHNOLOGY in the FIELD OF USE within the TERRITORY in an
arm’s length transaction. A LICENSED PRODUCTS
and/or LICENSED TECHNOLOGY shall be considered sold hereunder when
invoiced or, if not invoiced, when performed, when paid for, or
when a sub-license is executed. Where LICENSED PRODUCTS
and/or LICENSED TECHNOLOGY are not sold, but are otherwise disposed
of, the GROSS REVENUE of such LICENSED PRODUCTS and/or LICENSED
TECHNOLOGY for the purposes of computing royalties shall be the
selling price at which products of similar kind and quality, sold
in similar quantities, are currently being offered for sale by OMNI
or the sub-licensing price at which technologies of similar nature
and scope are currently being offered for sub-licensing by OMNI or
those within the pharmaceutical industry. Where such
LICENSED PRODUCTS are not currently offered for sale by OMNI, the
GROSS REVENUE of such LICENSED PRODUCTS for the purposes of
computing royalties shall be the average selling price at which
products of similar kind and quality, sold in similar quantities,
are currently being sold or offered for sale by
others. Where such LICENSED TECHNOLOGY is not currently
offered for sub-licensing by OMNI, the GROSS REVENUE of such
LICENSED TECHNOLOGY for the purposes of computing royalties shall
be the average sub-licensing price at which technology of similar
kind are currently being licensed or offered for license by
others.
|
|
|
“TERM” means the last expiration
date of the LICENSED PATENTS, except as otherwise provided in
Article VI.
|
|
|
BIO HOLDING and
OMNI are hereunder commonly referred to as “Parties”
(in singular and plural usage, as required by the
context).
|
|
|
“LICENSED
PATENT(S)” means valid U.S. and any corresponding foreign
patents and patent applications listed in Exhibit “B”
attached to this AGREEMENT as well as all future valid patents and
patent applications which are developed or generated by BIO HOLDING
that are directed to FIELD OF USE. As used herein, the
term “valid patent” refers to issued patents which have
not been subject to a decision by a court of competent jurisdiction
declaring such patent invalid and from which no appeal has been
taken.
|
|
|
“BIO
HOLDING Technology” shall mean all Technology now or
hereafter owned by, legally in the possession of, or developed by
BIO HOLDING, which BIO HOLDING has the right to license, including,
but not necessarily limited to, the LICENSED PATENTS, all know-how;
trade secrets; inventions (conceived of or reduced to practice,
whether patented or not); developments; all foreign and domestic
patents and patent applications; and improvements and
modifications; including, without limitations, methods, processes;
compositions; formulations; characterization information;
engineering, design and production information; and product
compositions.
|
|
|
“LICENSED
TECHNOLOGY” shall mean BIO HOLDING Technology that relate
directly to FIELD OF USE.
|
|
|
“LICENSED
PRODUCTS” shall mean a treatment of a patient with AAT or AAT
derivative or any material, compositions, or other matter which is
the subject of the LICENSED PATENT.
|
|
|
“LICENSE” shall mean the exclusive
license granted by BIO HOLDING to OMNI, as described in Article
II.
|
ARTICLE II
GRANT TO OMNI
|
|
Grant . Subject to the terms and conditions
of this AGREEMENT, BIO HOLDING hereby grants and agrees to grant to
OMNI, during the TERM of this AGREEMENT, an exclusive,
non-assignable, LICENSE under the LICENSED PATENTS (i) to practice,
perform, make, have made, use, sell, import, and offer to sell
LICENSED PRODUCTS solely for the FIELD OF USE within the TERRITORY;
and (ii) to sub-license the LICENSED TECHNOLOGY to a third party
(with prior written approval by BIO HOLDING, which will not be
unreasonably withheld) solely for the FIELD OF USE within the
TERRITORY.
|
|
|
No Rights to
Transfer License . The rights and licenses granted by
BIO HOLDING in this AGREEMENT are personal to OMNI. OMNI
shall not assign or otherwise transfer any license or right granted
hereunder or any interest therein, without the prior written
consent of BIO HOLDING (which may be withheld in BIO
HOLDING’s sole and absolute discretion). Any
attempted assignment or transfer without such prior written consent
shall be void and shall automatically terminate all rights of OMNI
under this AGREEMENT.
|
|
|
Sublicensing . Upon prior written approval by BIO
HOLDING, such approval not to be unreasonably withheld, OMNI may
sublicense to one or more third parties, the rights granted in
Section 2.1 subject to the following limitations:
|
|
|
|
OMNI agrees
that any sublicenses granted by it shall impose restrictions and
conditions upon sublicensees equivalent in scope to those imposed
upon OMNI;
|
|
|
|
OMNI agrees
that, in the event BIO HOLDING terminates this Agreement pursuant
to section 6.2 or 6.3, any sublicenses granted, in BIO HOLDING's
sole discretion, shall be directly enforceable by BIO
HOLDING;
|
|
|
|
OMNI agrees
that any sublicenses granted shall adequately protect BIO HOLDING's
security and property interest in BIO HOLDING's Intellectual
Property Rights; and
|
|
|
|
Any sublicenses
granted by OMNI shall provide only for cash consideration from
sublicensees unless BIO HOLDING has expressly consented otherwise
in writing in advance. Any sublicenses made in
other than arm’s-length transactions, the value of the
transaction attributed under this Section to such a transaction
shall be that which would have been received in an
arm’s-length transaction, based on a like transaction at that
time.
|
For purposes of
this Agreement, the term “sublicense” shall mean the
license by OMNI to a third party of all or a portion of the
LICENSED TECHNOLOGY licensed to it by BIO HOLDING hereunder in
consideration of payments from such sublicensee to OMNI, and shall
not include OMNI’s engagement of or joint venture with
subcontractors to perform various services for OMNI in connection
with its development of the LICENSED PRODUCTS and LICENSED
TECHNOLOGY, including, but not limited to, laboratory work,
pre-clinical and clinical testing, assistance with the regulatory
approval process, manufacturing, marketing and other similar
product development services provided that such services are for
the sole benefit of OMNI and such third party does not have any
independent rights to use LICENSED TECHNOLOGY. OMNI
agrees to assume all obligations for protecting the BIO
HOLDING’s Intellectual Property rights in any such joint
venture work consistent with the terms of this
Agreement.
|
|
Copy of
Sublicense . OMNI agrees to forward to BIO
HOLDING a copy of each fully executed sublicense agreement
postmarked within thirty (30) days of the execution of such
agreement.
|
ARTICLE III
REPORTS AND
CONSIDERATION
|
|
License
Fees . As
partial consideration for the licenses granted by this AGREEMENT,
OMNI shall pay BIO HOLDING twenty-five thousand dollars
($25,000.00) within sixty (60) days of the Execution of this
Agreement, of which fifteen thousand dollars ($15,000.00)
represents a partial payment of BIO HOLDING’s patent
prosecution cost for the Diabetes Patent and ten thousand dollars
($10,000.00) for scientific patent development work performed
by Dr. Leland Shapiro for the diabetes patent
application. In addition, within 30 days of the
Execution Date of this Agreement, OMNI shall issue to Mr. William
L. Israel, Jr. of BIO HOLDING warrants to purchase six hundred
fifty thousand (650,000) shares of Omni stock at an exercise price
of $3.00 a share. The warrants shall have an expiration
date of September 28, 2014 . The warrants will contain a
customary cashless exercise provision. The warrants shall be issued
to Mr. William L. Israel, Jr. only if he executes and delivers a
subscription agreement for the warrants in customary form,
including a representation that his individual net worth, or joint
net worth with his spouse, presently exceeds $1,000,000, and
provisions regarding the restricted nature of the warrants and
underlying shares, and a lock-up agreement that will restrict the
sale or transfer of the underlying shares until March 31,
2011.
|
|
|
Sponsored
Research Agreement OMNI shall execute within thirty
(30) days of the Execution of this Agreement a sponsored research
agreement for the total of eighty-eight thousand dollars
($88,000.00) with the University of Colorado for the benefit of Dr.
Leland Shapiro’s laboratory.
|
|
|
Royalty . As additional consideration for the
rights and licenses granted by this AGREEMENT OMNI agrees to pay to
BIO HOLDING royalties as follows:
|
|
|
|
Royalty from
Direct Sales by OMNI
|
|
|
OMNI agrees to
pay to BIO HOLDING a royalty of four percent (4%) of GROSS REVENUE
derived from selling or use of the LICENSED PRODUCTS in the FIELD
OF USE, excepting therefrom REVENUE derived from selling or
use of the LICENSED PRODUCTS in the FIELD OF USE which are the
subjects of OMNI’s Secondary Clinical
Conditions. Such royalties shall begin to accrue on the
EFFECTIVE DATE and continue for the TERM of this
AGREEMENT. All royalty payments payable pursuant to this
AGREEMENT shall be payable to BIO HOLDING on a quarterly
basis. Royalty payments must be made within thirty days
after the end of the quarter in which the royalty payment becomes
due. OMNI shall keep accurate and correct records which
are appropriate for the determination of royalty payments due BIO
HOLDING and shall report the amount of royalty payments due BIO
HOLDING on a quarterly basis within thirty days after the end of
the quarter. Concurrently with the royalty, OMNI shall
provide a written report to BIO HOLDING, stating the quantity,
description, and selling price of all LICENSED PRODUCTS sold or
otherwise disposed of and any GROSS REVENUE derived from
sub-licensing of the LICENSED TECHNOLOGY during the applicable
quarter period.
|
|
|
|
Royalties from
Sub-Licensing
|
|
|
OMNI agrees to
pay to BIO HOLDING a royalty of thirty percent (30%) of GROSS
REVENUE derived from all sublicensing of LICENSED TECHNOLOGY in the
FIELD OF USE.
|
|
|
Interest . OMNI agrees to pay interest of ten
percent (10%) per year or the maximum rate allowed by law,
whichever is less, on royalties payable but not paid to BIO HOLDING
when due.
|
|
|
Currency . All fees payable hereunder by OMNI
shall be made in United States Dollars (USD) and are payable to BIO
HOLDING, or BIO HOLDING’s successors, heirs or assigns, as
appropriate. If applicable, when calculating the fees payable
hereunder, the exchange rate to be used shall be the average of the
USD exchange rate for the final ten (10) business days of the
applicable twelve (12) month period, published in (i) the Financial
Times; or (if not available) (ii) the New York Times; or (if not
available) (iii) the Wall Street Journal.
|
|
|
Records . OMNI agrees to maintain true and
accurate records, files, and books of account containing all the
data reasonably required for the full computation and verification
of the royalties payable hereunder. Furthermore, OMNI agrees to
allow such records, files, and books of account to be audited from
time to time, but no more frequent than once yearly, during normal
business hours to the extent necessary to verify the written
reports required by Article 3.3, such audit to be made at the
expense of BIO HOLDING by any auditor appointed by BIO HOLDING who
shall be reasonably acceptable to OMNI, or by an independent
chartered accountant appointed by BIO HOLDING for the purpose of
establishing the correctness of the royalties paid or payable by
OMNI under this AGREEMENT. The auditor or accountant shall be
obliged to maintain as confidential any and all information
discovered during such audit, but may disclose to BIO HOLDING
whether the royalties paid or payable hereunder are correct or not,
and the deviation from the correct sum, if any. OMNI
agrees to pay promptly any amount found due to BIO HOLDING by such
audit including interest according to Article 3.5 and BIO HOLDING
agrees to credit against future royalties due from OMNI any
overpayment, which may be found or, if no future royalties will
reasonably be due, repay an amount equal to such
overpayment. The costs of any audit hereunder shall be
borne by BIO HOLDING unless the audit reveals the failure of OMNI
to provide BIO HOLDING with correct statement of sales performed.
In the latter case, OMNI shall pay the entire costs of the audit if
the statement of GROSS REVENUE is in error of five percent (5%) or
more of the amounts due to BIO HOLDING and shall pay one-half (1/2)
of the costs of the audit if the statement of GROSS REVENUE is in
error of two percent (2%) or more but less than five percent
(5%).
|
|
|
Material
Breach . Breach of any provision of Articles
3.1, 3.2, 3.3, 3.5, 3.6, 3.7, 11.6, or parts thereof, shall,
without limitation thereto, be deemed a material breach.
|
|
|
Business
Plan and Timetable . OMNI understands and acknowledges
that commercial maximization of the sale of the LICENSED PRODUCTS
and sub-licensing of the LICENSED TECHNOLOGY is extremely important
to BIO HOLDING, and that BIO HOLDI
|
|
