![](https://savarapharma.com/wp-content/uploads/page-header-blue-ridges-m.jpg)
![](https://savarapharma.com/wp-content/uploads/page-header-blue-ridges-d.jpg)
Filing
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 20, 2006
ADVENTRX Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-15803 | 84-1318182 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File No.) | (IRS Employer Identification No.) |
6725 Mesa Ridge Road, Suite 100
San Diego, California 92121
(Address of principal executive offices, with zip code)
San Diego, California 92121
(Address of principal executive offices, with zip code)
N/A
(Former name or former address if changed since last report)
(Former name or former address if changed since last report)
(858) 552-0866
(Companys telephone number, including area code)
(Companys telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement | ||||||||
Item 9.01. Financial Statements and Exhibits | ||||||||
SIGNATURES | ||||||||
EXHIBIT INDEX | ||||||||
EXHIBIT 10.1 | ||||||||
EXHIBIT 10.2 | ||||||||
EXHIBIT 99.1 |
Table of Contents
Item 1.01. Entry into a Material Definitive Agreement.
On October 20, 2006, ADVENTRX Pharmaceuticals, Inc. (the Company) entered into a license
agreement (the License Agreement), through its wholly-owned subsidiary SD Pharmaceuticals, Inc.,
a Delaware corporation, with Theragenex, LLC, a North Carolina limited liability company
(Theragenex), pursuant to which the Company granted to Theragenex an exclusive license to
develop, make, have, use, sell, offer for sale and import ANX-211 in the United States. Under the
terms of the License Agreement, ADVENTRX will receive a licensing fee of $1 million, a milestone
payment of $1 million for the launch of the first licensed product and $1 million for the launch of
each additional licensed product, as well as royalty payments of 15% to 20% on licensed product
sales. ANX-211 is an intranasal/topical antiviral that, in preclinical studies, has demonstrated
efficacy against viruses responsible for the common cold, influenza and other respiratory tract
viral infections. ANX-211 was acquired by ADVENTRX in April 2006 as a part of its acquisition of SD
Pharmaceuticals.
The License Agreement is filed as Exhibit 10.1 to this Current Report. A copy of the
Companys press release relating to the License Agreement is furnished as Exhibit 99.1 to this
Current Report.
On October 20, 2006, the Companys Board of Directors authorized the Company to enter into
indemnification agreements with each of its present and future directors and officers. The
indemnification agreements are in furtherance of the indemnification provisions contained in the
Companys Certificate of Incorporation and Bylaws. The indemnification agreements provide, among
other things, that the Company will indemnify such directors and officers to the fullest extent of
the law against any and all losses, claims, damages, expenses and liabilities arising out of their
service to, and activities on behalf of, the Company. The indemnification agreements also require
the Company to advance payment of expenses incurred by or on behalf of such directors and officers
in connection with any indemnifiable claim asserted or action brought against such directors and
officers. The form of Indemnification Agreement is filed as Exhibit 10.2 to this Current Report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
10.1 | License Agreement, dated as of October 20, 2006, by and between ADVENTRX Pharmaceuticals, Inc., through its wholly-owned subsidiary SD Pharmaceuticals, Inc., and Theragenex, LLC | ||
10.2 | Form of Director and Officer Indemnification Agreement | ||
99.1 | Press Release issued by ADVENTRX Pharmaceuticals, Inc. on October 23, 2006 |
-2-
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ADVENTRX Pharmaceuticals, Inc. |
||||
Date: October 23, 2006 | By: | /s/ Evan M. Levine | ||
Evan M. Levine | ||||
Chief Executive Officer | ||||
-3-
Table of Contents
EXHIBIT INDEX
Exhibit | ||
Number | Description of Document | |
10.1
|
License Agreement, dated as of October 20, 2006, by and between ADVENTRX Pharmaceuticals, Inc., through its wholly-owned subsidiary SD Pharmaceuticals, Inc., and Theragenex, LLC | |
10.2
|
Form of Director and Officer Indemnification Agreement | |
99.1
|
Press Release issued by ADVENTRX Pharmaceuticals, Inc. on October 23, 2006 |
EXHIBIT 10.1
LICENSE AGREEMENT
This License Agreement (this Agreement), executed as of October 20, 2006 (the
Effective Date), between ADVENTRX Pharmaceuticals, Inc., a Delaware corporation, through
its wholly-owned subsidiary SD Pharmaceuticals, Inc., Delaware corporation (ADVENTRX),
and Theragenex, LLC., a North Carolina limited liability company (THERAGENEX). ADVENTRX
and THERAGENEX may be referred to individually by name as a Party or collectively as the
Parties.
BACKGROUND
A. | ADVENTRX holds certain patent rights, as described in more detail below, that may be useful in the prevention, treatment and/or mitigation of virus-mediated diseases, including but not limited to common cold, influenza and herpes; and | |
B. | WHEREAS, THERAGENEX desires to acquire an exclusive license under such patent rights, all on the terms and conditions as set forth herein below. |
NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein
below, ADVENTRX and THERAGENEX hereby agree as follows:
Article 1. DEFINITIONS.
For purposes of this Agreement, the following definitions shall be applicable:
1.1 Active Ingredient means any chemical or biological entity that is a Cationic
Polymer, Cationic Surfactant, and/or a Multivalent Metal Component, whether or not such chemical or
biological entity is labeled as an active ingredient in a given Licensed Product.
(a) Cationic Polymer means any positively charged, pharmacologically acceptable
molecule formed of repeating units (including homopolymers, co-polymers, and heteropolymers), which
may be linear, branched or crosslinked.
(b) Cationic Surfactant means any positively charged compound capable of lowering
surface tension of a liquid.
(c) Multivalent Metal Component means any compound or composition that may release a
multivalent metal cation.
1.2 Affiliate means any entity directly or indirectly controlled by, controlling, or
under common control with, a Party, but only for so long as such control shall continue. For
purposes of this definition, control (including, with correlative meanings, controlled
by, controlling and under common control with) of an entity means possession, direct or
indirect, of (i) the power to direct or cause direction of the management and policies of such
entity (whether through ownership of securities or other ownership interests, by partnership,
contract or otherwise), or (ii) more than
1
fifty percent (50)% of the voting securities (whether directly or beneficially) or other
comparable equity interests of such entity.
1.3 ADVENTRX Patent Rights means: (i) the patents and patent applications identified
on Exhibit A; and (ii) any continuation, continuation-in-part (but only to the extent such
continuation-in-part covers the subject matter of the patents and patent applications identified on
Exhibit A and does not cover any new subject matter), division, substitution, and patent of
addition of the patents and patent applications listed in part (i) above, together with all
registrations, reexaminations, extensions (including extensions under the United States Patent Term
Restoration Act) or reissues thereof.
1.4 Business Day means a day other than a Saturday, Sunday, bank or other public
holiday in New York, New York.
1.5 Calendar Quarter means each of the four (4) three (3)-month periods beginning on
January 1st, April 1st, July 1st and October 1st,
respectively.
1.6 Control means, with respect to particular Technology or a particular Patent,
possession by ADVENTRX of the ability, whether arising by ownership, license, or otherwise, to
disclose and deliver the particular Technology to THERAGENEX, and to grant and authorize under such
Technology or Patent the right or license, as applicable, of the scope granted to THERAGENEX in
this Agreement without, in the case of licensed Technology or Patents, violating the terms of any
written agreement between ADVENTRX and the owner or licensor thereof. Controlled and
Controlling shall have their correlative meanings.
1.7 Cover means, with respect to any subject matter, the development, manufacture,
use, sale, offering for sale, importation, exportation or other exploitation of such subject matter
would, but for the rights or licenses granted under this Agreement, infringe a Valid Claim of the
ADVENTRX Patent Rights. As used in this Section 1.7, infringe shall include contributorily
infringing or inducing the infringement of such Valid Claim. For clarity with respect to a Valid
Claim within a patent application, Cover includes infringing a Valid Claim in such patent
application assuming such application were an issued patent. Covered or
Covering shall have their correlative meanings.
1.8 FDA means the United States Food and Drug Administration and any successor
agency thereto.
1.9 FDCA means the U.S. Federal Food, Drug and Cosmetic Act, as amended, and the
regulations promulgated thereunder.
1.10 Field means any and all fields.
1.11 Homeopathic Pharmacopoeia means the Homeopathic Pharmacopoeia of the United
States (HPUS) as published by the Homeopathic Pharmacopoeia of the United States (HPCUS) and any
successor agency thereto, and that is approved under the FDCA.
-2-
1.12 Governmental Authority means any court, agency, department, authority or other
instrumentality of any multi-national, national, state, county, city or other political
subdivision.
1.13 Launch means, with respect to a Licensed Product, the first shipment of such
Licensed Product for commercial sale anywhere in the Territory by THERAGENEX, its Affiliates or
Sublicensees to an unaffiliated Third Party.
1.14 Law or Laws means all applicable laws, statutes, rules, regulations,
orders, judgments and/or ordinances of any applicable Governmental Authority.
1.15 Licensed Product means any product which is Covered by the ADVENTRX Patent
Rights. One Licensed Product shall be deemed different from another Licensed Product, even if they
have substantially the same composition, if they differ in (a) the medical or disease condition(s)
for which they are labeled or (b) consumer accessibility. For purposes of clarification, Licensed
Products shall be deemed to differ in consumer accessibility if such Licensed Products differ in
any one or more of the following methods of accessibility by consumers (in which case each such
difference shall constitute a separate Licensed Product): (x) by the consumer directly (off the
shelf or over the counter), (y) with the assistance of personnel at the location at which such
product is purchased (behind the counter) or (z) by prescription.
1.16 Marketing Approval means with respect to a Licensed Product in a particular
jurisdiction, all approvals, licenses, registrations or authorizations necessary for the marketing
of such Licensed Product in such jurisdiction (e.g., approval in the United States by the FDA of a
NDA for a Licensed Product or satisfaction of the applicable conditions and requirements to market
a Licensed Product under an OTC Monograph or under the Homeopathic Pharmacopoeia).
1.17 NDA means a New Drug Application, as more fully defined in 21 C.F.R. §314.50
et. seq.
1.18 Net Sales means, with respect to each Licensed Product, the gross amount
invoiced for sales of THERAGENEX, its Affiliates and Sublicensees (each, a Selling Party)
of such Licensed Product to an unaffiliated Third Party, less (i) actual bad debts related to such
Licensed Product and (ii) credits for sales returns and allowances actually paid, granted or
accrued, (iii) normal and customary trade, quantity and cash discounts and any other adjustments
actually allowed and taken with respect to such invoiced amounts, including granted on account of
price adjustments, billing errors, damaged or defective goods, recalls, returns, rebates,
chargeback rebates, reimbursements or similar payments granted or given to wholesalers or other
distributors, (iv) customs or excise duties, sales tax, consumption tax, value added tax, and other
taxes (except income taxes) or duties relating to sales in each case invoiced as a specific line
item in an invoice (to the extent such taxes are actually incurred by the Selling Party, and are
not reimbursable, refundable or creditable to the Selling Party) and (v) freight and insurance
levied on the invoiced amount in each case invoiced as a specific line item in an invoice (to the
extent that the Selling Party actually incurs the cost of freight and insurance for a Licensed
Product and are not reimbursable, refundable or creditable to the Selling Party), in each case as
determined from books and records of the Selling
-3-
Party maintained in accordance with generally acceptable accounting principles in the United
States, consistently applied.
1.19 OTC Monograph means an over-the counter drug monograph, as more fully described
in 21 C.F.R. §330 et. seq.
1.20 Patent means any of the following, whether existing now or in the future
anywhere in the world: (i) any issued patent, including without limitation inventors certificates,
utility model, substitutions, extensions, confirmations, reissues, re-examination, renewal or any
like governmental grant for protection of inventions; and (ii) any pending application for any of
the foregoing, including without limitation any continuation, divisional, substitution, additions,
continuations-in-part, provisional and converted provisional applications.
1.21 Regulatory Authority means any Governmental Authority with authority over the
discovery, development, commercialization or other use or exploitation (including the granting of
Marketing Approvals) of Licensed Products in any jurisdiction, including the FDA, the European
Medicines Evaluation Agency, and the Ministry of Health, Labor and Welfare in Japan.
1.22 Regulatory Filing shall mean any filing or application with any Regulatory
Authority, including Investigational New Drug Applications and NDAs and their equivalents in
jurisdictions other than the United States, and authorizations, approvals or clearances arising
from the foregoing, including Marketing Approvals, and all correspondence with the FDA or other
relevant Regulatory Authority, as well as minutes of any material meetings, telephone conferences
or discussions with the FDA or other Regulatory Authority, in each case with respect to Licensed
Products.
1.23 Royalty Term means, on a Licensed Product-by-Licensed Product basis, the period
commencing on the date of the first commercial sale of such Licensed Product by THERAGENEX, its
Affiliates, or Sublicensees and ending on the later of (i) latest date on which such Licensed
Product is Covered by a Valid Claim or (ii) twenty (20) years from the date of the first commercial
sale of such Licensed Product by THERAGENEX, its Affiliates, or Sublicensees.
1.24 Sublicensee means any Third Party to whom THERAGENEX has granted the right,
directly or indirectly, to (i) make and sell any Licensed Product or (ii) sell any Licensed
Product.
1.25 Technology means technical information and materials comprising (i) ideas,
discoveries, inventions (to the extent that disclosure thereof would not result in loss or waiver
of privilege or similar protection), improvements or trade secrets, (ii) research and development
data, such as preclinical data, pharmacology data, chemistry data (including analytical, product
characterization, manufacturing, and stability data), toxicology data, clinical data, statistical
analyses, expert opinions and reports, safety and other electronic databases), analytical and
quality control data and stability data, in each case together with supporting data, (iii)
practices, methods, techniques, specifications, formulations, formulae, knowledge, (iv) techniques,
processes, manufacturing information, (iv) research materials, reagents and compositions of matter,
including
-4-
biological material and (v) compositions of matter. Technology shall not include any Patent
rights with respect thereto.
1.26 Term means the period commencing on the Effective Date and, unless earlier
terminated as herein provided, ending on the last to expire Royalty Term.
1.27 Territory means the United States of America (including its territories and
possessions).
1.28 Third Party means any entity other than ADVENTRX, THERAGENEX or their
respective Affiliates.
1.29 Valid Claim means a claim of any issued, unexpired patent or a claim of a
pending patent application within the ADVENTRX Patent Rights which has not been dedicated to the
public, disclaimed, abandoned or held invalid or unenforceable by a Governmental Authority of
competent jurisdiction in a decision from which no appeal can be taken or is otherwise not taken.
Article 2. LICENSE GRANT.
2.1 Exclusive Licenses. Subject to the terms and conditions of this Agreement,
ADVENTRX hereby grants to THERAGENEX an exclusive license under the ADVENTRX Patent Rights to
develop, make, have made, use, sell, offer for sale, and import Licensed Products in the Field in
the Territory (the License). THERAGENEX shall have the right to exercise such License
through its Affiliates solely for as long as such entity remains an Affiliate of THERAGENEX, and
THERAGENEX shall remain responsible for the compliance of such Affiliate with the applicable terms
of this Agreement.
2.2 Sublicenses.
(a) The License includes the right to sublicense (a Sublicense) within the scope
thereof; provided however that: (i) each sublicense agreement shall be subject to the prior written
approval of ADVENTRX, such approval not to be unreasonably withheld, (ii) each sublicense shall
include all of the applicable terms and conditions from this Agreement; and (iii) THERAGENEX shall
promptly provide ADVENTRX a copy of the final executed version of each such sublicense agreement,
redacted for information not pertinent to this Agreement.
(b) THERAGENEX shall be responsible for the failure by its Sublicensees to comply with, and
THERAGENEX guarantees the compliance by each of its Sublicensees with, all relevant restrictions,
limitations and obligations in this Agreement.
(c) In the event of a material default by any Sublicensee under a sublicense agreement,
THERAGENEX shall take such action that in THERAGENEXs reasonable business judgment is required to
remedy such default.
(d) If this Agreement is terminated pursuant to Section 9.2, all Sublicenses shall survive
such termination to the extent provided in such Sublicenses; provided that such Sublicensees
-5-
agree, in writing with ADVENTRX, to the same obligations of THERAGENEX hereunder, including
without limitation to the diligence obligations described in Section 3.2 and the milestone and
royalty payments described in Article 4.
2.3 No Further Rights. Each Party acknowledges that the rights and licenses granted
under this Article 2 and elsewhere in this Agreement are limited to the scope expressly granted.
Accordingly, except for the rights expressly granted under this Agreement, no right, title, or
interest of any nature whatsoever is granted whether by implication, estoppel, reliance, or
otherwise, by either Party to the other Party. All rights with respect to Technology, Patents or
other intellectual property rights that are not specifically granted herein are reserved to the
owner thereof.
2.4 Exclusivity of Efforts. Except for the conduct of activities directed toward the
development and commercialization of Licensed Products in accordance with this Agreement, during
the Term and for twelve (12) months thereafter THERAGENEX agrees on its behalf and on behalf of its
Affiliates (i) not to conduct, participate in or sponsor, directly or indirectly, inside or outside
of the Territory, any activities directed toward the development or commercialization of any
product containing an Active Ingredient, for an indication or market segment for which THERAGENEX
has already Launched a Licensed Product hereunder (collectively, such activities Competing
Activities) or (ii) appoint, license or otherwise authorize any Third Party, whether pursuant
to such license, appointment, or authorization or otherwise to perform any Competing Activities.
Article 3. THERAGENEX RESPONSIBILITIES AND DILIGENCE.
3.1 Responsibilities. Subject to Section 3.2, THERAGENEX shall fund, take the lead
and be solely responsible for conducting the development of Licensed Products, including clinical
trials, as may be reasonably necessary to expeditiously obtain Marketing Approvals for Licensed
Products for applications in the Field throughout the Territory. Further, THERAGENEX shall fund,
take the lead and be solely responsible for commercialization of Licensed Products in the Field
throughout the Territory. Without limiting the foregoing, THERAGENEX agrees to launch Licensed
Products in the Field in the Territory as soon as reasonably practicable, and thereafter to use
commercially reasonable efforts to market, promote and sell such Licensed Products for multiple
market segments and indications in the Field in the Territory so as to maximize Net Sales with
respect thereto. It is understood and agreed that all development and commercialization efforts
for the Licensed Products in the Field in the Territory shall be at the sole expense of THERAGENEX.
3.2 Diligence Milestones. THERAGENEX shall meet each of the following minimum
development and commercialization milestones (each, a Diligence Milestone):
(a) Launch a Licensed Product on or before December 31, 2007.
(b) Launch a second Licensed Product on or before December 31, 2008.
If THERAGENEX fails to meet either of the Diligence Milestones set forth above within the
applicable time period, as such time period may be extended pursuant to Section 3.2(c), such
failure
-6-
shall be deemed a material breach of this Agreement and, accordingly, ADVENTRX may terminate this
Agreement pursuant to Section 9.2(a).
(c) In the event that THERAGENEX is not able to achieve a Diligence Milestone by the milestone
achievement date set forth above, it shall promptly inform ADVENTRX, and provided that THERAGENEX
has been and continues at all times working diligently toward the achievement of such Diligence
Milestone, THERAGENEX shall be entitled to require ADVENTRX to extend the milestone achievement
date by one additional six (6) month period for each Diligence Milestone. In this event, for each
milestone achievement date so extended, THERAGENEX shall pay to ADVENTRX within fifteen (15) days
of the original milestone achievement date a payment in the amount of Five Hundred Thousand Dollars
($500,000).
3.3 Conference Call Updates; Reports.
(a) THERAGENEX shall make reasonably available during normal business hours, on a quarterly
basis, its representatives responsible for the development and commercialization of Licensed
Products for conference calls with ADVENTRXs representatives, during which THERAGENEX shall
describe, in reasonable detail, the progress made in the development and commercialization of
Licensed Products. In addition, THERAGENEX shall provide a written report to ADVENTRX in
reasonable detail on an annual basis regarding the development, commercialization and other
activities taken since the last such report and plans for the Licensed Products for the upcoming
twelve (12) months (each such report, an Update Report). The Update Reports shall be
deemed THERAGENEX Confidential Information provided it is marked CONFIDENTIAL or marked with
another similar legend.
(b) If within twenty (20) Business Days after receipt of an Update Report ADVENTRX would like
to request a meeting with representatives of THERAGENEX to discuss such report, then ADVENTRX may
notify THERAGENEX of such request, and the Parties shall meet at the offices of ADVENTRX, or such
other mutually agreed upon location, within thirty (30) days of THERAGENEXs receipt of such
request from ADVENTRX. At such meeting THERAGENEX shall make reasonably available its
representatives responsible for the applicable activities and plans in the Update Report for
discussion and to answer questions from ADVENTRXs representatives regarding the Licensed Products.
In no event may THERAGENEX be required to attend more than one (1) such meeting for any Update
Report.
Article 4. PAYMENTS AND ROYALTIES.
4.1 Upfront Payment. In partial consideration of the License and other rights granted
hereunder, THERAGENEX shall make a non-creditable, non-refundable upfront payment to ADVENTRX of
One Million Dollars ($1,000,000). The first half payment of $500,000 is due 70 days after closing
of the agreement (December 31, 2006), the second half payment is due 6 months thereafter (June 30
2007).
-7-
4.2 Milestone Payments. In further consideration of the License and other rights
granted hereunder, THERAGENEX shall make a non-creditable, non-refundable milestone payment of One
Million Dollars ($1,000,000) to ADVENTRX upon the Launch of each Licensed Product within forty-five
(45) days after such Launch.
4.3 Royalty Payments.
(a) In addition to the payments under Sections 4.1 and 4.2, THERAGENEX shall pay to ADVENTRX
each Calendar Quarter, in consideration of the License and other rights granted herein, the
following royalty payments on the aggregate Net Sales of Licensed Products made during such
Calendar Quarter (the Royalty Payments):
Quarterly Net Sales | Royalty on Net Sales | |||
That portion of aggregate Net Sales of all Licensed
Products up to and including Two Million Five
Hundred Thousand Dollars ($2,500,000) |
15 | % | ||
That portion of aggregate Net Sales of all Licensed
Products in excess of Two Million Five Hundred
Thousand Dollars ($2,500,000)and up to and including
Three Million Seven Hundred Fifty Thousand Dollars
($3,750,000) |
18 | % | ||
That portion of aggregate Net Sales of all Licensed
Product in excess of Three Million Seven Hundred
Fifty Thousand Dollars ($3,750,000) |
20 | % |
For purposes of the foregoing, aggregate Net Sales of all Licensed Products shall mean the
aggregate Net Sales of all types and formulations of Licensed Products made within the particular
Calendar Quarter. In the event THERAGENEX and ADVENTRX determine that Patent rights or Technology
of a Third Party is necessary to make or sell a Licensed Product in the Territory, the Parties will
discuss a reduction in the royalty rates set forth above, if any.
(b) The Royalty Payments for a Licensed Product shall continue until the expiration of the
Royalty Term, and thereafter the License shall become, royalty-free, non-exclusive and perpetual
for such Licensed Product.
Article 5. ACCOUNTING AND PROCEDURES FOR PAYMENT.
5.1 Inter-Company Sales. Sales between or among THERAGENEX, its Affiliates or
Sublicensees shall not be subject to Royalty Payments; Royalty Payments shall only be calculated
upon Net Sales to an unaffiliated Third Party. THERAGENEX shall be responsible for payments on Net
Sales by its Affiliates and Sublicensees.
-8-
5.2 Currency. All Royalty Payments shall be computed and paid in United States
dollars. For the purposes of determining the amount of Royalty Payments due for the relevant
Calendar Quarter, the amount of Net Sales in any foreign currency shall be converted into United
States dollars at the spot rate of exchange published by The Board of Governors of the Federal
Reserve System in Statistical Release H.10 (http://www.federalreserve.gov/releases/H10) for the
date that is five (5) Business Days before the date payment is due.
5.3 Royalty Payments. Royalty Payments by THERAGENEX are due and payable by the 45th
day after the end of each Calendar Quarter, and each payment shall be accompanied by a report
identifying in the aggregate and on a Licensed Product-by-Licensed Product basis: (i) total gross
amount invoiced for sales of Licensed Products by THERAGENEX and its Affiliates and Sublicensees;
(ii) amounts deducted by category (e.g., normal and customary trade, quantity and cash discounts
actually allowed and taken with respect to such invoiced amounts) from gross amounts invoiced to
calculate Net Sales; (iii) Net Sales and (iv) royalties payable. Said reports shall be deemed
THERAGENEX Confidential Information.
5.4 Method of Payments. All payments hereunder shall be made by electronic transfer
in immediately available funds via a bank wire transfer, or any other means of electronic funds
transfer, at THERAGENEXS election, to such bank accounts as ADVENTRX shall designate in writing at
least five (5) Business Days before the payment is due. All payments under this Agreement shall
bear interest from the date due until paid at a rate equal to the thirty (30) day U.S. Dollar LIBOR
rate effective for the date that payment was due, as published by The Wall Street Journal,
Eastern U.S. Edition, on the date such payment was due, plus two percent (2%).
5.5 Inspection of Records. THERAGENEX shall, and shall cause its Affiliates and
Sublicensees to, keep full and accurate books and records setting forth gross amounts invoiced for
each Licensed Product, Net Sales of each Licensed Product, itemized deductions from gross amounts
invoiced to calculate Net Sales and amounts payable hereunder to ADVENTRX for each such Licensed
Product. THERAGENEX shall permit ADVENTRX, by independent certified public accountants retained by
ADVENTRX and reasonably acceptable to THERAGENEX, to examine such books and records at THERAGENEX
at any reasonable time upon prior written request, but not later than three (3) years following the
rendering of any corresponding reports, accountings and payments pursuant to Section 5.3. The
foregoing right of review may be exercised only once during each twelve (12) month period;
provided, however, that if a review uncovers an underpayment by THERAGENEX of Royalty Payments of
more than five percent (5%) such review shall not count as an exercise of such right of review.
Such accountants may be required by THERAGENEX to enter into a reasonably acceptable
confidentiality agreement, and in no event shall such accountants disclose to ADVENTRX any
information other than such as relates to the accuracy of reports and payments made or due
hereunder. The opinion of said independent accountants regarding such reports, accountings and
payments shall be binding on the Parties other than in the case of clear error. ADVENTRX shall
bear the cost of any such review; provided that if the review shows an underpayment of Royalty
Payments of more than five percent (5%) of the amount due for the applicable period, then
THERAGENEX shall promptly reimburse ADVENTRX for all costs incurred in connection with such review.
THERAGENEX shall promptly pay to ADVENTRX the amount of any underpayment of Royalty Payments
revealed by a review. ADVENTRXs review
-9-
rights under this Section 5.5 shall survive for a period of three (3) years after any
termination or expiration of this Agreement.
5.6 No Withholding Taxes. Unless reimbursable to ADVENTRX as a reduction in U.S. tax
liability, all payments required to be made pursuant to this Agreement shall be without deduction
or withholding for or on account of any taxes or similar governmental charge. Such taxes are
referred to herein as Withholding Taxes and such Withholding Taxes shall be the sole
responsibility of THERAGENEX. THERAGENEX shall provide a certificate evidencing payment of any
Withholding Taxes under this Agreement. It is understood and agreed that all payment obligations
rest solely on THERAGENEX, a North Carolina limited liability company, and that all payments due
under this Agreement shall be made by THERAGENEX, a North Carolina limited liability company to
ADVENTRX, a Delaware corporation. As a result, the Parties anticipate that no Withholding Taxes
will be assessed against THERAGENEX on ADVENTRXs behalf.
Article 6. PATENTS AND INFRINGEMENT.
6.1 Prosecution and Maintenance. As between the Parties, ADVENTRX shall have the
right to control the Prosecution and Maintenance of the ADVENTRX Patent Rights using counsel of its
choice, such counsel to be reasonably acceptable to THERAGENEX, and THERAGENEX agrees to reimburse
ADVENTRX for its out-of-pocket expenses in connection with such activities as they are incurred,
not to exceed ten thousand dollars ($10,000) per calendar quarter. ADVENTRX agrees to: (i) keep
THERAGENEX reasonably informed with respect to such activities by providing THERAGENEX with an
opportunity to review and comment reasonably before the filing of all Prosecution and Maintenance
documents (but in no event less than ten (10) days before such filing) and ADVENTRX shall
incorporate all such reasonable comments to the extent that they are compatible with the
development of Licensed Products hereunder; and (ii) consult in good faith with THERAGENEX
regarding such matters, including the abandonment of any claim thereof covering a Licensed Product.
Following the filing or mailing thereof, ADVENTRX shall provide THERAGENEX with a copy of each
patent application within the ADVENTRX Patent Rights filed or mailed after the Effective Date,
together with notice of its filing date and serial number, and a copy of such other patent
prosecution document or any correspondence related to patent prosecution, as filed or sent, as
applicable. If ADVENTRX determines to abandon any patent or patent application within the ADVENTRX
Patent Rights, then ADVENTRX shall provide THERAGENEX with notice of such determination at least
sixty (60) days prior to the date such abandonment would become effective. In such event,
THERAGENEX shall have the right, at its option, to assume control of the Prosecution and
Maintenance of such patent or patent application at its own expense in ADVENTRXs name. For
purposes of this Section 6.1, Prosecution and Maintenance means the preparing and filing of
documents pertaining to the prosecution and maintenance of a patent or patent application, as well
as filing for re-examinations, reissues, requests for patent term extensions and the like, together
with the conduct of interferences, the defense of oppositions and other similar proceedings; and
Prosecute and Maintain has the correlative meaning.
6.2 Enforcement.
-10-
(a) Notice. Subject to the provisions of this Section 6.2, in the event that either
Party reasonably believes that any ADVENTRX Patent Right is being infringed or may be subject to a
declaratory judgment action as a result of the development, manufacture, use, sale, offer for sale
or importation of a product in the Territory (an Infringing Product), such Party shall promptly
notify the other Party in writing and shall provide the other Party with any evidence available
pertaining thereto. In such event, THERAGENEX shall have the initial right (but not the
obligation) to enforce such ADVENTRX Patent Right with respect to such infringement, or to defend
any declaratory judgment action with respect thereto (an Enforcement Action), at THERAGENEXs
expense. At ADVENTRXs request, THERAGENEX shall allow ADVENTRX to actively participate at its
expense in the planning and conduct of any such action, and THERAGENEX shall not, without the
express prior written consent of ADVENTRX, (i) make any substantive decision regarding strategy
related to such action or (ii) settle such action.
(b) Commencing Enforcement Actions. In the event that THERAGENEX fails to commence an
Enforcement Action to enforce such ADVENTRX Patent Right against an Infringing Product within sixty
(60) days of a request by ADVENTRX to do so, and if ADVENTRX reasonably believes that the
infringing activity may have a material adverse effect on the value, validity or enforceability of
the ADVENTRX Patent Rights or the financial interests of ADVENTRX hereunder, ADVENTRX may commence
an Enforcement Action against such infringement at its own expense.
(c) Cooperation. The Party commencing or defending any Enforcement Action (the
Enforcing Party) shall keep the other Party reasonably informed of the progress of any such
Enforcement Action, and such other Party shall have the right to participate with counsel of its
own choice at its own expense. In any event, the other Party shall reasonably cooperate with the
Enforcing Party, including providing information and materials, at the Enforcing Partys request
and expense.
(d) Recoveries. Any recovery received as a result of any Enforcement Action to
enforce ADVENTRX Patent Rights pursuant to this Section 6.2 shall be used first to reimburse the
Parties for the costs and expenses (including attorneys and professional fees) incurred in
connection with such Enforcement Action (and not previously reimbursed), and the remainder of the
recovery shall be shared (to the extent the same represents damages from sales of Infringing
Products within the Field in the Territory) seventy-five percent (75%) to the Enforcing Party and
twenty-five percent (25%) to the other Party.
6.3 Defense. If the manufacture, sale or use of Licensed Products under this
Agreement by THERAGENEX, its Affiliates, Sublicensees, manufacturers, distributors or customers
results in any claim, suit or proceeding for patent infringement solely against THEREGENEX and/or
its Affiliates, THERAGENEX shall promptly notify ADVENTRX thereof in writing, setting forth the
facts of such claim in reasonable detail. As between the parties to this Agreement, THERAGENEX
shall have the first and primary right and responsibility, at its own expense and after
consultation with ADVENTRX, to defend and control the defense of any such claim, suit or proceeding
by counsel of its own choice, which counsel shall be reasonably acceptable to ADVENTRX. If
ADVENTRX, and not THERAGENEX, or ADVENTRX in addition to THERAGENIX, is named as
-11-
a party to such claim, suit or proceeding, ADVENTRX shall tender its defense to THERAGENEX in
writing, and THERAGENEX shall defend ADVENTRX in such claim, suit or proceeding, at THERAGENEXs
own expense and through counsel of its own choice, which counsel shall be reasonably acceptable to
ADVENTRX; provided, however, that ADVENTRX may, at its election and expense, actively participate
in the planning and conduct of such claim, suit or proceeding and THERAGENEX shall not, without the
express prior written consent of ADVENTRX (a) make any substantive decision regarding strategy
related to such claim, suit or proceeding or (b) settle such claim, suit or proceeding. In
connection with such claim, suit or proceeding, in no event shall either Party enter into any
agreement with any Third Party, with respect to the ADVENTRX Patent Rights, that (x) contemplates
payment or other action by the other Party (y) has a material adverse effect on the other Partys
business or (z) makes any admission regarding (i) wrongdoing on the part of the other Party, or
(ii) the invalidity, unenforceability or absence of infringement of ADVENTRX Patent Rights, in each
case without the prior written consent of the other Party. The Parties shall cooperate with each
other in connection with any such claim, suit or proceeding and shall keep each other reasonably
informed of all material developments in connection with any such claim, suit or proceeding
(including furnishing a copy of each communication relating to such claim, suit or proceeding). It
is understood that the terms of this Section 6.3 shall in no way limit ADVENTRXs right to receive
indemnification under Article 10 below in connection with any Third-Party Claims described in
Section 10.1(b).
6.4 Patent Marking. THERAGENEX shall mark (or cause to be marked) all Licensed
Products marketed and sold hereunder with appropriate ADVENTRX Patent Right numbers or indicia to
the extent permitted by Law in those countries in which such notices impact recoveries of damages
or remedies available with respect to infringements of Patents.
Article 7. CONFIDENTIALITY.
7.1 Confidentiality; Exceptions. Except to the extent expressly authorized by this
Agreement or otherwise agreed by the Parties in writing, the Parties agree that the Party receiving
confidential information (the Receiving Party) from the other Party shall keep
confidential and shall not publish or otherwise disclose or use for any purpose other than as
provided for in this Agreement any data, technical information, business information, or other
confidential or proprietary information furnished to it by the other Party pursuant to this
Agreement (collectively, Confidential Information). Confidential Information that is
disclosed in writing shall be marked, or disclosed under cover that is marked, with the legend
CONFIDENTIAL or another similar legend. Notwithstanding the foregoing, Confidential Information
shall not be deemed to include information to the extent that it can be established by written
documentation by the Receiving Party that such information or material:
(a) was already known to or possessed by the Receiving Party, other than under an obligation
of confidentiality (except to the extent such obligation has expired or an exception is applicable
under the relevant agreement pursuant to which such obligation was established), at the time of
disclosure;
-12-
(b) was generally available to the public or otherwise part of the public domain at the time
of its disclosure to the Receiving Party;
(c) became generally available to the public or otherwise part of the public domain after its
disclosure and other than through any act or omission of the Receiving Party (or any person to whom
the Receiving Party made available Confidential Information) in breach of this Agreement;
(d) was independently developed by the Receiving Party without any reference to Confidential
Information as demonstrated by documented evidence prepared contemporaneously with such independent
development; or
(e) was disclosed to the Receiving Party, other than under an obligation of confidentiality,
by a Third Party who had no obligation not to disclose such information to others.
For purposes of the foregoing, information that is specific in nature shall not be deemed to
be within such provisions merely because it is embraced by more general information in the public
domain or in the possession of the receiving Party.
7.2 Authorized Use and Disclosure. Each Party may disclose Confidential Information
of the other Party as follows: (i) to employees and consultants on a need-to-know basis under
appropriate written confidentiality provisions substantially equivalent to those in this Agreement
and in connection with the performance of its obligations or exercise of rights granted to such
Party in this Agreement; (ii) to the extent such disclosure is reasonably necessary in filing for,
prosecuting or the maintenance of Patents (including applications therefor) in accordance with this
Agreement, prosecuting or defending litigation, complying with applicable governmental regulations,
Law or the rules of a recognized stock exchange, provided, however, that in each such case if a
Party is required to make any such disclosure of the other Partys Confidential Information it will
give reasonable advance notice to the other Party of such disclosure requirement and, except to the
extent inappropriate in the case of patent applications, will use its reasonable efforts to secure
confidential treatment of such Confidential Information required to be disclosed; (iii) in
communication with existing and potential investors, consultants, advisors (including financial
advisors, lawyers and accountants) and its directors, officers, employees, and agents on a
need-to-know basis, in each case under appropriate written confidentiality provisions substantially
equivalent to those of this Agreement; or (iv) to the extent mutually agreed to by the Parties. The
Receiving Party shall not use Confidential Information for any purpose other than this Agreement.
7.3 Prior Confidentiality Agreement. This Agreement supersedes the Mutual
Confidential Disclosure Agreement between the Parties dated June 8, 2006 (the Prior CDA)
with respect to information disclosed thereunder. All information exchanged between the Parties
under the Prior Agreement shall be deemed Confidential Information of the disclosing Party and
shall be subject to the terms of this Article 7.
7.4 Publicity. Each of the Parties agrees not to disclose to any Third Party the
terms and conditions of this Agreement without the prior approval of the other Party, except to
advisors
-13-
(including consultants, financial advisors, attorneys and accountants), potential and existing
investors, acquirors and partners, licensees, funding sources and similar individuals and entities
on a need-to-know basis, in each case under circumstances that reasonably protect the
confidentiality thereof, or to the extent required by applicable Law, including securities laws
and the rules of self-regulatory organizations, including stock exchanges. Notwithstanding the
foregoing, the Parties agree upon a joint press release to announce the execution of this
Agreement, which is attached hereto as Exhibit B; thereafter, the Parties may each disclose
to Third Parties the information contained in such press release without the need for further
approval by the other.
7.5 Use of Name. Other than in connection with a permitted use under Section 7.2 and
7.4, the use of the name of either Party, or any contraction thereof, by the other Party in any
manner in connection with this Agreement is expressly prohibited except with prior written consent
of the other Party or to the extent required by applicable law, including securities laws and the
rules of self-regulatory organizations, including stock exchanges.
7.6 Survival. The Parties obligations under this Article 7 shall survive for a
period of five (5) years following any termination or expiration of this Agreement.
Article 8. REPRESENTATIONS AND WARRANTIES.
8.1 General Representations and Warranties. Each Party represents and warrants to the
other that:
(a) it is duly organized and validly existing under the Laws of the jurisdiction of its
incorporation or organization, and has full corporate or similar power and authority to enter into
this Agreement and to carry out the provisions hereof;
(b) it is duly authorized to execute and deliver this Agreement and to perform its obligations
hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so
by all requisite corporate or similar action;
(c) this Agreement is legally binding upon it and enforceable in accordance with its terms.
The execution, delivery and performance of this Agreement by it does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party or by which it may
be bound, nor violate any material applicable Law;
(d) it has not granted, and shall not grant during the Term, any right to any Third Party
which would conflict with the rights granted to the other Party hereunder; and
(e) it is not aware of any action, suit or inquiry or investigation instituted by any entity
which questions or threatens the validity of this Agreement.
-14-
8.2 ADVENTRXs Warranties. ADVENTRX represents and warrants that as of the Effective
Date:
(a) ADVENTRX Controls the ADVENTRX Patent Rights described on Exhibit A;
(b) ADVENTRX has not granted, and will not grant during the Term, rights to any Third Party
under the ADVENTRX Patent Rights that conflict with the rights granted to THERAGENEX hereunder;
(c) ADVENTRX has not received any written notice of any threatened claims or litigation
seeking to invalidate or otherwise challenge the ADVENTRX Patent Rights or ADVENTRXs rights
therein;
(d) to its knowledge, none of the ADVENTRX Patent Rights are subject to any pending
re-examination, opposition, interference or litigation proceedings;
(e) it is not aware of any infringement of the ADVENTRX Patent Rights by a Third Party;
(f) it has prosecuted all patent applications within the ADVENTRX Patent Rights in good faith;
and
(g) though it has not conducted any search or investigation, it is not aware of any Third
Party patents that present any substantial risk of infringement with respect to the making, use,
sale, or importation of Licensed Products.
8.3 Disclaimer of Warranties. EXCEPT AS SET FORTH IN THIS ARTICLE 8, ADVENTRX AND
THERAGENEX EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY
RIGHTS OF THIRD PARTIES.
Article 9. TERM AND TERMINATION.
9.1 This Agreement shall be effective as of the Effective Date and shall remain in effect
during the Term.
9.2 This Agreement shall terminate as follows:
(a) If either THERAGENEX or ADVENTRX materially breaches or materially defaults in the
performance or observance of any of the provisions of this Agreement, and such breach or default is
not cured within thirty (30) days after the receipt of notice by the other Party specifying such
breach or default, the other Party shall have the right to terminate this Agreement
-15-
forthwith, such termination to be effective upon the expiration of such thirty (30)-day notice
period. For the purposes of this Section 9.2(a), a material breach or material default in the
performance of any of the provisions of this Agreement shall include a material inaccuracy in any
warranty or representation contained herein.
(b) If either Party admits in writing that it is generally unable to meet its debts when due,
or makes a general assignment for the benefit of its creditors, or there shall have been appointed
a receiver, trustee or other custodian for such Party or for a substantial part of its assets, or
any case or proceeding shall have been commenced or other action taken by or against such Party in
bankruptcy or seeking the reorganization, liquidation, dissolution or winding-up of such Party or
any other relief under any bankruptcy, insolvency, reorganization or other similar act or Law, and
any such event shall have continued for sixty (60) days undismissed, unstayed, unbonded and
undischarged, then the other Party may, upon notice to such Party terminate this Agreement, such
termination to be effective upon such Partys receipt of such notice.
(c) THERAGENEX shall have the right to terminate this Agreement at any time, upon ninety (90)
days written notice to ADVENTRX if THERAGENEX concludes in good faith, based on technical
information learned by it following the Effective Date, that there is no reasonable likelihood of a
commercially viable Licensed Product, such termination to be effective upon the expiration of such
ninety (90)-day notice period.
(d) THERAGENEX shall have the right in its sole discretion to terminate this Agreement upon
written notice to ADVENTRX prior to December 31, 2006, in the event that its review of the ADVENTRX
Patent Rights and any Third Party patents indicates that the making, use, sale, offer for sale, or
importation of a Licensed Product would likely infringe valid claims of a Third Partys patent or
published patent application in the Territory.
9.3 General Effects of Expiration or Termination.
(a) Accrued Obligations. Expiration or termination of this Agreement for any reason
shall not release either Party of any obligation or liability which, at the time of such expiration
or termination, has already accrued to the other Party or which is attributable to a period prior
to such expiration or termination. For the avoidance of doubt, if THERAGENEX terminates this
Agreement (whether pursuant to Section 9.2(a) or 9.2 (d)), it shall be required to make the Upfront
Payments described in Section 4.1.
(b) Non-Exclusive Remedy. Notwithstanding anything herein to the contrary,
termination of this Agreement by a Party shall be without prejudice to other remedies such Party
may have at law or equity.
(c) General Survival. Articles 1, 7, 8 and 10-12, and Sections 2.2(d), 2.4, 4.1,
5.2-5.6, and 9.3-9.5 shall survive expiration or termination of this Agreement for any reason.
Except as otherwise provided in this Article 9, all rights and obligations of the Parties under
this Agreement shall terminate upon expiration or termination of this Agreement for any reason.
-16-
9.4 Effects of Certain Terminations. If THERAGENEX electively terminates this
Agreement pursuant to Section 9.2(c) or ADVENTRX terminates this Agreement pursuant to Section
9.2(a) or (b), then upon such notice of termination:
(a) Ongoing Trials. If there are any ongoing clinical trials with respect to Licensed
Products being conducted by or on behalf of THERAGENEX (or its Affiliates) at the time of notice of
termination, THERAGENEX agrees to (i) promptly transition to ADVENTRX or its designee some or all
of such clinical trials and the activities related to or supporting such trials, (ii) continue to
conduct such clinical trials for a period requested by ADVENTRX up to a maximum of six (6) months
after the effective date of such termination or (iii) terminate such clinical trials; in each case
as requested by ADVENTRX. In such event, ADVENTRX shall be responsible for the costs of such
transition.
(b) Commercialization. Subject to ADVENTRXs rights under Section 9.4(f), THERAGENEX
shall, and shall cause its Affiliates, immediately to terminate the manufacture (whether directly
by THERAGENEX or its Affiliates or through a third party), use, sale and importation of Licensed
Products, except that THERAGENEX and its Affiliates shall, for a period requested by ADVENTRX not
to exceed twelve (12) months following the effective date of the termination of this Agreement (or
such other period as is mutually agreed to by the Parties) (the Agreement Wind-Down Period)
continue to manufacture, promote, market, take orders for, distribute and sell the Licensed
Products for which it has received Marketing Approval in the Territory in accordance with the terms
and conditions of this Agreement (including that THERAGENEX shall continue to pay the royalty
thereon at the rate and at the time provided for herein); provided that ADVENTRX may terminate the
Agreement Wind-Down Period upon ninety (90) days notice to THERAGENEX. For clarification,
THERAGENEXs and its Affiliates rights with respect to Licensed Products during the Wind-Down
Period (including the License granted under Section 2.1) shall be non-exclusive and ADVENTRX shall
have the right to engage one or more other promoter(s), marketer(s), partner(s) or distributor(s)
of Licensed Products in all or part of the Territory. Other than as set forth in this Section
9.4(b), THERAGENEX and its Affiliates and Sublicensees shall not manufacture, promote, market,
distribute or sell Licensed Products or make any representation regarding their status as a
licensee of or distributor for ADVENTRX for any Licensed Product.
(c) Regulatory Filings. THERAGENEX shall, at ADVENTRXs expense, promptly assign and
transfer to ADVENTRX all Regulatory Filings for Licensed Products that are held or controlled by or
under authority of THERAGENEX or its Affiliates, and shall take such actions and execute such other
instruments, assignments and documents as may be necessary to effect the transfer of rights under
the Regulatory Filings to ADVENTRX. THERAGENEX shall cause each of its Affiliates to transfer any
such Regulatory Filings to ADVENTRX. If applicable Law prevents or delays the transfer of
ownership of a Regulatory Filing to ADVENTRX, THERAGENEX (for itself and its Affiliates) shall
grant, and does hereby grant, to ADVENTRX an exclusive and irrevocable right of access and
reference to such Regulatory Filing for Licensed Products, and shall cooperate fully to make the
benefits of such Regulatory Filings available to ADVENTRX and/or its designee(s). Within sixty
(60) days after notice of such termination, THERAGENEX shall provide to ADVENTRX copies of all such
Regulatory Filings, and of all
-17-
preclinical and clinical data (including investigator reports, both preliminary and final,
statistical analyses, expert opinions and reports, safety and other electronic databases) and other
Technology pertaining to any Licensed Product, or the manufacture thereof. ADVENTRX shall be free
to use and disclose such Regulatory Filings and other items in connection with the exercise of its
rights and licenses under this Section 9.4.
(d) Technology Licenses. THERAGENEX hereby grants ADVENTRX, effective upon the notice
of termination under Section 9.2(c) or the effective date of such termination under Section 9.2(a)
or (b), a non-exclusive, worldwide, irrevocable, fully paid-up license in the Territory, with the
right to sublicense, under (i) any Patent controlled by THERAGENEX or its Affiliates covering
Licensed Products that were developed or commercialized by or under authority of THERAGENEX;
provided, however if any such Patent controlled by THERAGENEX is subject to payment obligations to
a Third Party, THERAGENEX shall promptly disclose such obligations to ADVENTRX in writing and such
Patents shall be deemed to be controlled by THERAGENEX only if ADVENTRX agrees in writing to
reimburse all amounts owed to such Third Party as a result of ADVENTRXs exercise of such license,
and (ii) any Technology disclosed to ADVENTRX under this Agreement or developed or utilized by
THERAGENEX in connection with the Licensed Products; in each case to develop, make, have made, use,
sell, offer for sale and import Licensed Products.
(e) Trademarks. Effective upon the notice of termination under Section 9.2(c) or the
effective date of such termination under Section 9.2(a) or (b), THERAGENEX hereby assigns and shall
cause to be assigned to ADVENTRX all rights in and to any trademarks specific to one or more
Licensed Products that THERAGENEX used with such Licensed Product(s). It is understood such
assignment shall not include the THERAGENEX name or trademark for the THERAGENEX company itself.
(f) Transition Assistance. THERAGENEX agrees to reasonably cooperate with ADVENTRX
and its designee(s) to facilitate a smooth, orderly and prompt transition of the development and
commercialization of Licensed Products to ADVENTRX and/or its designee(s) following notice of
termination of this Agreement. Without limiting the foregoing, THERAGENEX shall promptly provide
ADVENTRX (i) copies of customer lists, customer data and other customer information relating to
Licensed Products that THERAGENEX may properly disclose and (ii) manufacturing information
(including protocols for the production, packaging, testing and other manufacturing activities)
necessary or useful for the manufacture of Licensed Products in THERAGENEXs control, which in
each case ADVENTRX shall, subject to Section 9.4(d), have the right to use and disclose for any
purpose during the Agreement Wind-Down Period and thereafter. Upon request by ADVENTRX, THERAGENEX
shall transfer to ADVENTRX some or all quantities of Licensed Products in its and its Affiliates
control (as requested by ADVENTRX), within thirty (30) days after the end of the Agreement
Wind-Down Period; provided, however, that ADVENTRX shall reimburse THERAGENEX for the out-of-pocket
costs that THERAGENEX actually incurred to manufacture or otherwise acquire the quantities so
provided. If any Licensed Product was manufactured by any Third Party for THERAGENEX, or
THERAGENEX had contracts with vendors which contracts are necessary or useful for ADVENTRX and/or
its designee to assume the promotion, marketing, distribution and sale/or of the Licensed Products
in the Field in
-18-
the Territory, then THERAGENEX shall, to the extent possible and requested in writing by
ADVENTRX, assign such Third Party contracts to ADVENTRX.
9.5 Return of Materials. Within thirty (30) days after the end of the Agreement
Wind-Down Period, THERAGENEX shall destroy all tangible items comprising, bearing or containing any
Confidential Information of ADVENTRX (whether such Confidential Information is held by THERAGENEX
or its Affiliates), and provide written certification of such destruction, or prepare such tangible
items of Confidential Information for shipment to ADVENTRX, as ADVENTRX may direct, and at
ADVENTRXs expense; provided that THERAGENEX may retain one (1) copy of ADVENTRXs Confidential
Information solely for its legal archives.
Article 10. INDEMNIFICATION; INSURANCE.
10.1 Indemnification.
(a) Indemnification by ADVENTRX. ADVENTRX hereby agrees to defend, hold harmless and
indemnify (collectively, Indemnify) THERAGENEX and its Affiliates, and its and their
agents, representatives, consultants, directors, officers and employees (the THERAGENEX
Indemnitees) from and against any damages, liability or expense (including reasonable legal
expenses and attorneys fees) (collectively, Losses) resulting from suits, claims,
actions and demands, in each case brought by a Third Party (each, a Third-Party Claim)
arising out of a breach of any of ADVENTRXs representations and warranties under Sections 8.1 or
8.2. ADVENTRXs obligation to Indemnify the THERAGENEX Indemnitees pursuant to this Section 10.1(a)
shall not apply to the extent that any such Losses (A) arise from the gross negligence or
intentional misconduct of any THERAGENEX Indemnitee; (B) arise from any breach by THERAGENEX of
this Agreement; or (C) are Losses for which THERAGENEX is obligated to Indemnify the ADVENTRX
Indemnitees pursuant to Section 10.1(b) below.
(b) Indemnification by THERAGENEX. THERAGENEX hereby agrees to Indemnify ADVENTRX and
its Affiliates, and its and their agents, representatives, consultants, directors, officers and
employees (the ADVENTRX Indemnitees) from and against any and all Losses resulting from
Third-Party Claims arising out of: (i) a breach of any of THERAGENEXs representations and
warranties under Section 8.1; (ii) the development, promotion, marketing, distribution, sale,
commercialization or other exploitation of Licensed Products or other exercise of the License
granted hereunder by or under authority of THERAGENEX (including, but not limited to, claims by
consumers or users of Licensed Products or claims relating to the labeling of Licensed Products
including, but not limited to, claims relating to inaccurate, incomplete, false or misleading
labeling); or (iii) a breach by a Sublicensee of its sublicense agreement. THERAGENEXs obligation
to Indemnify the ADVENTRX Indemnitees pursuant to the foregoing sentence shall not apply to the
extent that any such Losses (A) arise from the gross negligence or intentional misconduct of any
ADVENTRX Indemnitee; (B) arise from any breach by ADVENTRX of this Agreement; or (C) are Losses for
which ADVENTRX is obligated to Indemnify the THERAGENEX Indemnitees pursuant to Section 10.1(a)
above.
-19-
(c) Procedure. To be eligible to be Indemnified hereunder, the indemnified Party
shall provide the indemnifying Party with notice as soon as reasonably possible of the Third-Party
Claim giving rise to the indemnification obligation pursuant to this Section 10.1 and the exclusive
ability to defend (with the reasonable cooperation of the indemnified Party) or settle any such
claim; provided, however, that the indemnifying Party shall not enter into any settlement that
admits fault, wrongdoing or damages without the indemnified Partys written consent, such consent
not to be unreasonably withheld or delayed. The indemnified Party shall have the right to
participate, at its own expense and with counsel of its choice, in the defense of any claim or suit
that has been assumed by the indemnifying Party.
10.2 Insurance. THERAGENEX shall obtain and maintain, prior to the earlier of (a) the
Launch of the first Licensed Product or (b) the first administration of the first Licensed Product
in humans (whether in a clinical trial or otherwise), and thereafter during the term of this
Agreement and for six (6) years thereafter, comprehensive general liability insurance and products
liability insurance (including human clinical trials coverage) with reputable and financially
secure insurance carriers at levels consistent with industry standards (subject to reasonable
deductibles) based upon THERAGENEXs activities (including the conduct of clinical trials, if
applicable) and indemnification obligations hereunder, but in any event, for commercial general,
not less than $1,000,000 per occurrence and $3,000,000 in the aggregate and, for products
liability/human clinical trials, not less than $10,000,000 per occurrence and $10,000,000 in the
aggregate, with ADVENTRX named as an additional insured. Such liability insurance shall be
maintained on an occurrence basis to provide such protection after expiration or termination of the
policy itself or this Agreement. THERAGENEX shall furnish to ADVENTRX on request certificates
issued by the insurance company setting forth the amount of the liability insurance and a provision
THERAGENEX hereto shall receive thirty (30) days written notice prior to termination or material
reduction to the level of coverage.
Article 11. GOVERNING LAW AND ARBITRATION.
11.1 Governing Law. This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of California, without reference to its conflicts of laws
provisions.
11.2 General Arbitration. In the event of any controversy, claim or counter-claim
arising out of or relating to this Agreement, the Parties shall first attempt to resolve such
controversy or claim through good-faith negotiations between the Chief Executive Officers (or their
senior level representatives) for a period of thirty (30) days, or such longer period as the
Parties may agree, following notification of such controversy or claim to the other Party. If such
controversy or claim cannot be resolved by means of such negotiations during such period, then such
controversy or claim shall be finally settled by binding arbitration in San Diego, California under
the then current Commercial Arbitration Rules of the American Arbitration Association by one (1)
arbitrator appointed in accordance with such rules. The arbitrator may grant injunctive or other
relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive
and binding on the Parties to the arbitration. Judgment may be entered on the arbitrators
decision in any court of competent jurisdiction. The Parties agree that, any provision of
applicable law notwithstanding, they
-20-
will not request and the arbitrator shall have no authority to award, punitive or exemplary
damages against either Party. The costs of the arbitration, including administrative and
arbitrators fees, may be allocated between the Parties by the arbitrator, or if such award is not
made, shall be shared equally by the Parties. Each Party shall initially bear their respective
expenses of arbitration, including the cost of its own attorneys fees and expert witness fees
provided that the arbitrator has the right to allocate such expenses between the Parties. Nothing
in this Section 11.2 shall preclude either Party from seeking interim or provisional relief in the
form of a temporary restraining order, preliminary injunction, or other interim relief concerning a
dispute prior to or during an arbitration pursuant to this Section 11.2 necessary to protect the
interests of such Party.
Article 12. MISCELLANEOUS.
12.1 Force Majeure. Neither Party hereto shall be liable to the other Party for any
losses or damages attributable to a default in or breach of this Agreement which is the result of
war (whether declared or undeclared), acts of God, revolution, acts of terror, fire, earthquake,
flood, pestilence, riot, enactment or change of Law, accident(s), labor trouble, or shortage of or
inability to obtain material, equipment or transport or any other cause beyond reasonable control
of such Party (in no event to include the obligation to pay money due hereunder).
12.2 Severability. If and solely to the extent that any provision of this Agreement
shall be invalid or unenforceable, or shall render this entire Agreement to be unenforceable or
invalid, such offending provision shall be of no effect and shall not affect the validity of the
remainder of this Agreement or any of its provisions; provided, however, the Parties shall use
their respective reasonable efforts to renegotiate the offending provisions to best accomplish the
original intentions of the Parties.
12.3 Accrued Obligation. Termination of this Agreement for any reason shall not
release any Party hereto from any liability which at the time of such termination has already
accrued to the other Party or which is attributable to a period prior to such termination, nor
shall it preclude either Party from pursuing all rights and remedies it may have hereunder or at
law or in equity with respect to any breach of this Agreement.
12.4 Waivers. Any term or condition of this Agreement may be waived at any time by
the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set
forth in a written instrument duly executed by or on behalf of the Party or Parties waiving such
term or condition. Neither the waiver by any Party of any term or condition of this Agreement nor
the failure on the part of any Party, in one or more instances, to enforce any of the provisions of
this Agreement or to exercise any right or privilege, shall be deemed or construed to be a waiver
of such term or condition for any similar instance in the future or of any subsequent breach
hereof. All rights, remedies, undertakings, obligations and agreements contained in this Agreement
shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking,
obligation or agreement.
12.5 Entire Agreement; Amendments. This Agreement sets forth the entire agreement and
understanding among the Parties as to the subject matter hereof and supercedes all agreements or
-21-
understandings, verbal or written, made between ADVENTRX and THERAGENEX before the date hereof
with respect to the subject matter hereof. None of the terms or this Agreement shall be amended,
supplemented or modified except in writing signed by both Parties.
12.6 Assignment. This Agreement may not be assigned or otherwise transferred by
either Party without the prior written consent of the other Party; provided, however, either Party
may, without such consent, assign this Agreement, in whole or in part, to a party that succeeds to
all or substantially all of such Partys business or assets relating to this Agreement whether by
sale, merger, operation of law or otherwise; provided that such assignee or transferee promptly
agrees in writing to be bound by the terms and conditions of this Agreement. Any purported
assignment in violation of this Section 12.6 shall be void. Any permitted assignee shall assume
all obligations of its assignor under this Agreement.
12.7 Independent Contractor. The relationship between ADVENTRX and THERAGENEX is that
of independent contractors. ADVENTRX and THERAGENEX are not joint venturers, partners, principal
and agent, employer and employee, and have no other relationship other than independent contracting
parties.
12.8 Notices. All notices, consents, approvals, or other communications required
hereunder given by one Party to the other hereunder shall be in writing and made by registered or
certified air mail, facsimile (and promptly confirmed by personal delivery or courier), express
overnight courier or delivered personally to the following addresses of the respective Parties:
If to ADVENTRX: | ADVENTRX Pharmaceuticals, Inc. | |||
Attn: Vice President, Business Development | ||||
6725 Mesa Ridge Road, Suite 100 | ||||
San Diego, California 92121 | ||||
Tel: (858) 552-0866 | ||||
Fax: (858) 552-0876 | ||||
With copies to: | ADVENTRX Pharmaceuticals, Inc. | |||
Attn: General Counsel | ||||
6725 Mesa Ridge Road, Suite 100 | ||||
San Diego, California 92121 | ||||
Tel: (858) 552-0866 | ||||
Fax: (858) 552-0876 | ||||
Wilson Sonsini Goodrich & Rosati, P.C. | ||||
Attn: Ian Edvalson, Esq. | ||||
650 Page Mill Road | ||||
Palo Alto, California 94304 | ||||
Tel: 650-493-9300 | ||||
Fax: 650-493-6811 |
-22-
If to THERAGENEX: | Theragenex, LLC. | |||
Suite 400, 4819 Emperor Boulevard | ||||
Durham, NC 27703 | ||||
Attention: Chief Executive Officer | ||||
Phone: 919-960-8006 | ||||
Fax: 919-969-8007 | ||||
with a copy to: | Hutchison Law Group PLLC | |||
5410 Trinity Road, Suite 400 | ||||
Raleigh, NC 27607 | ||||
Attention: J. Robert Tyler, III | ||||
Fax: 919-829-9696 | ||||
Phone: 919-829-4317 |
Notices hereunder shall be deemed to be effective (a) upon receipt if personally delivered, (b) on
the fifth Business Day following the date of mailing if sent by registered or certified air mail,
and (c) on the second Business Day following the date of transmission or delivery to the overnight
courier if sent by facsimile or overnight courier. A Party may change its address listed above by
sending notice to the other Party in accordance with this Section 12.8.
12.9 Third Party Beneficiaries. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any Third Party, including, without limitation, any creditor of
either Party. No such Third Party shall obtain any right under any provision of this Agreement or
shall by reasons of any such provision make any claim in respect of any debt, liability or
obligation (or otherwise) against either Party.
12.10 Binding Effect. This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective heirs, successors and permitted assigns.
12.11 Counterparts. This Agreement may be executed in any two or more counterparts,
each of which, when executed, shall be deemed to be an original and all of which together shall
constitute one and the same document.
12.12 Headings. Headings in this Agreement are included herein for ease of reference
only and shall have no legal effect. References to Articles, Sections and Exhibits are to
Articles, Sections and Exhibits to this Agreement unless otherwise specified.
IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be executed by their duly
authorized officers upon the Effective Date.
-23-
ADVENTRX PHARMACEUTICALS INC. | THERAGENEX, LLC. | |||||||||
By:
|
/s/ Evan M. Levine | By: | /s/ David M. Preston | |||||||
Name:
|
Evan M. Levine | Name: | David M. Preston | |||||||
Title:
|
Chief Executive Officer | Title: | Chairman |
-24-
EXHIBIT A
ADVENTRX PATENT RIGHTS
U.S. 11/003,302 Antiviral Pharmaceutical Compositions.
1
EXHIBIT B
FORM OF PRESS RELEASE
[See Exhibit 99.1]
-2-
EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
This Agreement is made as of , 2006, between ADVENTRX Pharmaceuticals, Inc., a
Delaware corporation (the Company), and (the Indemnitee).
RECITALS
Both the Company and Indemnitee recognize that highly competent persons have become more
reluctant to serve publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and activities on behalf
of the corporation.
In recognition of Indemnitees need for substantial protection against personal liability in
order to enhance Indemnitees continued service to the Company in an effective manner and
Indemnitees reliance on the provisions of the Companys Certificate of Incorporation (Certificate
of Incorporation) and the Companys Bylaws (the Bylaws) requiring indemnification of the
Indemnitee to the fullest extent permitted by law, and in part to provide Indemnitee with specific
contractual assurance that the protection promised by such Certificate of Incorporation and Bylaws
will be available to Indemnitee (regardless of, among other things, any amendment to or revocation
of such Certificate of Incorporation or Bylaws or any change in the composition of the Companys
Board of Directors or acquisition transaction relating to the Company), the Company wishes to
provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to
the fullest extent (whether partial or complete) permitted by law and as set forth in this
Agreement.
The Certificate of Incorporation, the Bylaws and the General Corporation Law of the State of
Delaware (DGCL) expressly provide that the indemnification provisions set forth therein are not
exclusive and thereby contemplate that contracts may be entered into between the Company and
members of the board of directors, officers and other persons with respect to indemnification.
It is reasonable, prudent and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free from undue concern
that they will not be so indemnified.
This Agreement is a supplement to and in furtherance of the Certificate of Incorporation and
Bylaws and any resolutions adopted pursuant thereto and shall not be deemed a substitute therefor,
nor to diminish or abrogate any rights of Indemnitee thereunder.
AGREEMENT
In consideration of the premises and of Indemnitee agreeing to serve or continuing to serve
the Company directly or, at its request, with another enterprise, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Basic Indemnification Agreement.
(a) In the event Indemnitee was, is or becomes a party to or witness or other participant in,
or is threatened to be made a party to or witness or other participant in, a Claim (as defined in
Section 9(b)) by reason of (or arising in part out of) an Indemnifiable Event (as defined in
Section 9(d)), the Company shall indemnify Indemnitee to the fullest extent permitted by law as
soon as practicable but in any event no later than 30 days after written demand is presented to the
Company, against any and all Expenses (as defined in Section 9(c)), judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other charges paid or payable
in connection therewith) of such Claim actually and reasonably incurred by or on behalf of
Indemnitee in connection with such Claim and any federal, state, local or foreign taxes imposed on
Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement. If
requested by Indemnitee in writing, the Company shall advance (within ten business days of such
written request) any and all Expenses to Indemnitee (an Expense Advance). Notwithstanding
anything in this Agreement to the contrary, prior to a Change of Control (as defined in Section
9(a)) and except as set forth in Sections 1(b), 3 and 7, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim (i) initiated by Indemnitee
against the Company or any director or officer of the Company unless the Company has joined in or
consented to the initiation of such Claim; (ii) made on account of Indemnitees conduct which
constitutes a breach of Indemnitees duty of loyalty to the Company or its stockholders or is an
act or omission not in good faith or which involves intentional misconduct or a knowing violation
of the law; or (iii) arising from the purchase and sale by Indemnitee of securities in violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act).
(b) Notwithstanding the foregoing, (i) the indemnification obligations of the Company under
Section 1(a) shall not be applicable if the Reviewing Party (as defined in Section 9(f)) has
determined (in a written opinion, in any case in which the special independent counsel referred to
in Section 2 is involved) that Indemnitee would not be permitted to be indemnified under applicable
law, and (ii) the obligation of the Company to make an Expense Advance pursuant to Section 1(a)
shall be subject to the condition that the Company receives an undertaking that, if, when and to
the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however,
that if Indemnitee has commenced legal proceedings in the Court of Chancery of the State of
Delaware (the Delaware Court) to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be
required to reimburse the Company for any Expense Advance until a final judicial determination is
made with respect thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). Indemnitees
-2-
obligation to reimburse the Company for Expense Advances shall be unsecured and no interest
shall be charged thereon. If there has not been a Change in Control, the Reviewing Party shall be
selected by the Board of Directors, and if there has been such a Change in Control, the Reviewing
Party shall be the special independent counsel referred to in Section 2. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in the Delaware Court seeking an initial
determination by the court or challenging any such determination by the Reviewing Party or any
aspect thereof and the Company hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on
the Company and Indemnitee. The Company shall indemnify Indemnitee for Expenses incurred by
Indemnitee in connection with the successful establishment or enforcement, in whole or in part, by
Indemnitee of Indemnitees right to indemnification or advances.
2. Change in Control. The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by two- thirds or more of the
Companys Board of Directors who were directors immediately prior to such Change in Control) then
with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other agreement, the Bylaws or
Certificate of Incorporation now or hereafter in effect relating to Claims for Indemnifiable
Events, the Company shall seek legal advice only from special independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably withheld or
delayed) and who has not otherwise performed services for the Company within the last five years
(other than in connection with such matters) or for Indemnitee. In the event that Indemnitee and
the Company are unable to agree on the selection of the special independent counsel, such special
independent counsel shall be selected by lot from among at least five law firms with offices in the
State of Delaware having more than fifty attorneys, having a rating of av or better in the then
current Martindale Hubbell Law Directory and having attorneys which specialize in corporate law.
Such selection shall be made in the presence of Indemnitee (and his legal counsel or either of
them, as Indemnitee may elect). Such counsel, among other things, shall, within 90 days of its
retention, render its written opinion to the Company and Indemnitee as to whether and to what
extent Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to
pay the reasonable fees of the special independent counsel referred to above and to fully indemnify
such counsel against any and all expenses (including attorneys fees), claims, liabilities, and
damages arising out of or relating to this Agreement or its engagement pursuant hereto.
3. Indemnification for Additional Expenses. The Company shall indemnify Indemnitee
against any and all expenses (including attorneys fees) and, if requested by Indemnitee in
writing, shall (within ten business days of such written request) advance such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any Claim asserted against or
action brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company
under this Agreement or any other agreement, the Bylaws or Certificate of Incorporation now or
hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors and officers liability insurance policies maintained by the Company, regardless of
whether the Company believes that Indemnitee is entitled to such
-3-
indemnification, advance expense payment or insurance recovery, as the case may be. The Indemnitee shall
qualify for advances solely upon the execution and delivery to the Company of an undertaking
providing that the Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that the Indemnitee is not entitled to be indemnified by the Company.
4. Partial Indemnity. If Indemnitee is entitled under any provisions of this
Agreement to indemnification by the Company of some but not all of the Expenses, liabilities,
judgments, fines, penalties and amounts paid in settlement of a Claim, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has
been successful on the merits or otherwise in defense of any or all Claims relating in whole or in
part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal
without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection
therewith. In connection with any determination by the Reviewing Party or otherwise as to whether
Indemnitee is entitled to be indemnified hereunder the burden of proof shall be on the Company to
establish that Indemnitee is not so entitled.
5. No Presumption. For purposes of this Agreement, the termination of any action,
suit or proceeding by judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption
that Indemnitee did not meet any particular standard of conduct or have any particular belief.
6. Notification and Defense of Claim. Within 30 days after receipt by Indemnitee of
notice of the commencement of a Claim which may involve an Indemnifiable Event, Indemnitee will, if
a claim in respect thereof is to be made against the Company under this Agreement, submit to the
Company a written notice identifying the proceeding, but the omission so to notify the Company will
not relieve it from any liability which it may have to Indemnitee under this Agreement unless the
Company is materially prejudiced by such lack of notice. With respect to any such Claim as to
which Indemnitee notifies the Company of the commencement thereof:
(a) the Company will be entitled to participate therein at its own expense;
(b) except as otherwise provided below, to the extent that it may wish, the Company jointly
with any other indemnifying party similarly notified will be entitled to assume the defense
thereof, with counsel selected by the Board of Directors and satisfactory to Indemnitee. After
notice from the Company to Indemnitee of its election to assume the defense thereof, the Company
will not be liable to Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the right to employ its own
counsel in such action, suit or proceeding, but the fees and expenses of such counsel incurred
after notice from the Company of its assumption of the defense thereof shall be at the expense of
Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by the Company,
(ii) Indemnitee shall have reasonably concluded that there may be a conflict of interest between
the Company and the Indemnitee in the conduct of the defense of such action, or (iii) the Company
shall not in fact have employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of counsel shall be at the expense of the Company. The Company shall
not be entitled to assume the defense of any claim brought by or on behalf of
-4-
the Company or as to which Indemnitee shall have made the conclusion provided for in clause
(ii) above; and
(c) the Company shall not be liable to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any action or claim effected without its written consent. The
Company shall not settle any action or claim in any manner which would impose any penalty or
limitation on Indemnitee without Indemnitees written consent. Neither the Company nor Indemnitee
will unreasonably withhold or delay their consent to any proposed settlement.
7. Non-exclusivity. The rights of Indemnitee hereunder shall be in addition to any
other rights Indemnitee may have under the Certificate of Incorporation, the Bylaws, the DGCL, any
agreement, a vote of the stockholders, a resolution of directors or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee
acting on behalf of the Company and at the request of the Company prior to such amendment,
alteration or repeal. To the extent that a change in the DGCL (whether by statute or judicial
decision), the Certificate of Incorporation or the Bylaws permits greater indemnification by
agreement than would be afforded currently under the Certificate of Incorporation, the Bylaws and
this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right and remedy shall be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
right or remedy.
8. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors and officers liability insurance, Indemnitee shall be covered by
such policy or policies in accordance with its or their terms to the maximum extent of the coverage
available for any Company director or officer. If, at the time the Company receives notice from
any source of a Claim as to which Indemnitee is a party or a participant (as a witness or
otherwise), the Company has director and officer liability insurance in effect, the Company shall
give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth
in the respective policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such
Claim in accordance with the terms of such policies. In the event of a Potential Change in Control
(as defined in Section 9), the Company shall maintain in force any and all insurance policies then
maintained by the Company providing directors and officers liability insurance, in respect of
Indemnitee, for a period of six years thereafter. The Company shall indemnify Indemnitee for
Expenses incurred by Indemnitee in connection with any successful action brought by Indemnitee for
recovery under any insurance policy referred to in this Section 8 and shall advance to Indemnitee
the Expenses of such action in the manner provided in Section 3 above.
-5-
9. Certain Definitions.
(a) A Change in Control shall be deemed to have occurred if:
(1) any person, as that term is used in Section 13(d) and Section 14(d)(2) of
the Exchange Act, becomes, is discovered to be, or files a report on Schedule 13D or
14D-1 (or any successor schedule, form or report) disclosing that such person is a
beneficial owner (as defined in Rule 13d-3 under the Exchange Act or any successor
rule or regulation), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power of the Companys then outstanding
Voting Securities (unless such person becomes such a beneficial owner in connection
with the initial public offering of the Company);
(2) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and any
new director whose election by the Board of Directors or nomination for election by
the Companys stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof;
(3) the Company, or any material subsidiary of the Company, is merged,
consolidated or reorganized into or with another corporation or other legal person
(an Acquiring Person) or securities of the Company are exchanged for securities of
an Acquiring Person, and immediately after such merger, consolidation,
reorganization or exchange less than a majority of the combined voting power of the
then outstanding securities of the Acquiring Person immediately after such
transaction are held, directly or indirectly, in the aggregate by the holders of
Voting Securities immediately prior to such transaction;
(4) the Company, or any material subsidiary of the Company, in any transaction
or series of related transactions, sells or otherwise transfers all or substantially
all of its assets to an Acquiring Person, and less than a majority of the combined
voting power of the then outstanding securities of the Acquiring Person immediately
after such sale or transfer is held, directly or indirectly, in the aggregate by the
holders of Voting Securities immediately prior to such sale or transfer;
(5) the Company and its subsidiaries, in any transaction or series of related
transactions, sells or otherwise transfers business operations that generated two
thirds or more of the consolidated revenues (determined on the basis of the
Companys four most recently completed fiscal quarters) of the Company and its
subsidiaries immediately prior thereto;
(6) the Company files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing that a change
-6-
in control
of the Company has or may have occurred or will or may occur in the future pursuant
to any then existing contract or transaction; or
(7) any other transaction or series of related transactions occur that have
substantially the effect of the transactions specified in any of the preceding
clauses in this paragraph (ii).
Notwithstanding the provisions of Section 9(a)(1) or 9(a)(4), unless otherwise determined in a
specific case by majority vote of the Board of Directors of the Company, a Change of Control shall
not be deemed to have occurred for purposes of this Agreement solely because (i) the Company, (ii)
an entity in which the Company directly or indirectly beneficially owns 50% or more of the voting
securities or (iii) any Company sponsored employee stock ownership plan, or any other employee
benefit plan of the Company, either files or becomes obligated to file a report or a proxy
statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial
ownership by it of shares of stock of the Company, or because the Company reports that a Change in
Control of the Company has or may have occurred or will or may occur in the future by reason of
such beneficial ownership.
(b) A Claim is any threatened, pending or completed action, suit, proceeding or alternative
dispute resolution mechanism, or any inquiry, hearing or investigation whether conducted by the
Company or any other party, whether civil, criminal, administrative, investigative or other.
(c) Expenses include attorneys fees and all other costs, fees, expenses and obligations of
any nature whatsoever paid or incurred in connection with investigating, defending, being a witness
in or participating in (including appeal), or preparing to defend, be a witness in or participate
in any Claim relating to any Indemnifiable Event.
(d) An Indemnifiable Event is any event or occurrence (whether before or after the date
hereof) related to the fact that Indemnitee is or was a director, officer, employee, consultant,
agent or fiduciary of or to the Company, or any subsidiary of the Company, or is or was serving at
the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by
reason of anything done or not done by Indemnitee in any such capacity.
(e) A Potential Change in Control shall be deemed to have occurred if (i) the Company enters
into an agreement, the consummation of which would result in the occurrence of a Change in Control;
(ii) any person (including the Company) publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in Control; (iii) any person, other
than a trustee or other fiduciary holding securities under an employee benefit plan of the Company
or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company, who is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing 9.5% or more of the
combined voting power of the Companys then outstanding Voting Securities, increases such persons
beneficial ownership of such securities by five percentage points or more over the initial
percentage of such securities; or
-7-
(iv) the Board of Directors of the Company adopts a resolution to
the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.
(f) A Reviewing Party is (i) the Companys Board of Directors (provided that a majority of
directors are not parties to the particular Claim for which Indemnitee is seeking indemnification)
or (ii) any other person or body appointed by the Companys Board of Directors, who is not a party
to the particular Claim for which Indemnitee is seeking indemnification, or (iii) if there has been
a Change in Control, the special independent counsel referred to in Section 2 hereof.
(g) Voting Securities means any securities of the Company which vote generally in the
election of directors.
10. Amendments, Termination and Waiver. No supplement, modification, amendment or
termination of this Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
11. Contribution. If the indemnification provided in Sections 1 and 3 is unavailable,
then, in respect of any Claim in which the Company is jointly liable with Indemnitee (or would be
if joined in the Claim), the Company shall contribute to the amount of Expenses, judgments, fines,
penalties and amounts paid in settlement as appropriate to reflect: (i) the relative benefits
received by the Company, on the one hand, and Indemnitee, on the other hand, from the transaction
from which the Claim arose, and (ii) the relative fault of the Company, on the one hand, and of
Indemnitee, on the other, in connection with the events which resulted in such Expenses, judgments,
fines, penalties and amounts paid in settlement, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of Indemnitee, on the
other, shall be determined by reference to, among other things, the parties relative intent,
knowledge, access to information and opportunity to correct or prevent the circumstances resulting
in such Expenses and Liabilities. The Company agrees that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by pro rata allocation or any other method
of allocation which does not take account of the equitable considerations described in this Section
11.
12. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company effectively to bring suit
to enforce such rights.
13. No Duplication of Payments. The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee
has otherwise actually received payment (under insurance policy, Certificate of Incorporation or
otherwise) of the amounts otherwise indemnifiable hereunder.
14. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors, assigns, including any
-8-
direct or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouse, heirs, and personal and
legal
representatives. This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as a director or officer (or in one of the capacities enumerated in Section 9(d)
hereof) of the Company or of any other enterprise at the Board of Directors request.
15. Severability. The provisions of this Agreement shall be severable in the event
that any of the provisions hereof (including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable, and the remaining provisions shall remain enforceable to the fullest extent
permitted by law.
16. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising
out of or in connection with this Agreement shall be brought only in the Delaware Court and not in
any other state or federal court in the United States of America or any court in any other country,
(ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement, (iii) appoint,
irrevocably, to the extent such party is not a resident of the State of Delaware, as its agent in
the State of Delaware as such partys agent for acceptance of legal process in connection with any
such action or proceeding against such party with the same legal force and validity as if served
upon such party personally within the State of Delaware, (iv) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead
or to make, any claim that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum.
-9-
17. Identical Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original but all of which together shall
constitute one and the same Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this Agreement.
Executed this ______ day of October, 2006.
ADVENTRX PHARMACEUTICALS, INC. | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
[Indemnitee Name] |
-10-
EXHIBIT 99.1
ADVENTRX LICENSES PROPRIETARY ANTIVIRAL PRODUCT TO THERAGENEX
SAN DIEGO, CA October 23, 2006 ADVENTRX Pharmaceuticals, Inc. (Amex: ANX) announced today that
it has licensed the U.S. rights to ANX-211, one of its proprietary antiviral products, to
Theragenex, a life science and technology company focusing on commercializing therapies across a
number of different therapeutic areas. Under the terms of the license, ADVENTRX will receive a
licensing fee of $1 million, a milestone payment of $1 million for the launch of the first licensed
product and $1 million for the launch of each additional licensed product, as well as royalty
payments of 15% to 20% on licensed product sales. Theragenex intends to launch the first licensed
product during 2007.
We are pleased to have entered into this agreement with Theragenex and are confident in their
strategy to maximize the value of ANX-211, said Evan M. Levine, chief executive officer of
ADVENTRX. Theragenex has an experienced, respiratory specialty sales force that made them a
particularly attractive commercialization partner.
ANX-211 is an intranasal/topical antiviral that, in preclinical studies, has demonstrated efficacy
against viruses responsible for the common cold, influenza and other respiratory tract viral
infections. ANX-211 was acquired by ADVENTRX in April 2006 as a part of its acquisition of SD
Pharmaceuticals.
About ADVENTRX Pharmaceuticals
ADVENTRX Pharmaceuticals is a biopharmaceutical research and development company focused on
commercializing low development risk pharmaceuticals for cancer and infectious disease that enhance
the efficacy and/or safety of existing therapies. More information can be found on the Companys
Web site at www.adventrx.com.
About Theragenex
Theragenex is a life science and technology company focused on acquiring and licensing intellectual
property and healthcare assets addressing a wide range of therapeutic approaches. The company
continually seeks new technologies and product opportunities to commercialize through its
subsidiary companies. More information can be found on the Companys Web site at
www.theragenex.com.
Forward Looking Statement
Adventrx cautions you that statements included in this press release that are not a
description of historical facts are forward-looking statements that involve risks, uncertainties,
assumptions and other factors that, if they do not materialize or prove to be accurate, could cause
Adventrxs results to differ materially from historical results or those expressed or implied by
such forward-looking statements. The potential risks and uncertainties that could cause actual
results to differ materially include, but are not limited to: a default by Theragenex on its
payment or other obligations to us; the amount or timing of resources that Theragenex devotes to
selling licensed products; Theragenexs inability or substandard performance in selling licensed
products; the potential to attract a strategic partner for Adventrxs other product candidates and
the terms of any related transaction; and other risks and uncertainties more fully described in
Adventrxs press releases and periodic filings with the Securities and Exchange Commission.
Adventrx public filings with the Securities and Exchange Commission are available at www.sec.gov.
Adventrx does not intend to update any forward-looking statement, including as set forth in this
press release, to reflect events or circumstances arising after the date on which it was made.
Contact:
Adventrx Pharmaceuticals
Andrea Lynn
858-552-0866
Adventrx Pharmaceuticals
Andrea Lynn
858-552-0866
# # #