Provision Language
Definitions
“Commitment Period” means the period beginning on the Closing Date (as defined in the SPA) and ending on the earliest to occur of (i) the later of such time as ACTs are no longer the WHO’s recommended first line treatment for malaria or the Foundation no longer owns any Foundation Stock, and (ii) such time as both the Company’s Strain development program under this LetterAgreement has concluded (the Company has incurred expenditures related to its Global Access Commitments which, in the aggregate, are equal to or greater than the Foundation Investment) and the Foundation has sublicensed, under Section 3(d)(ii), at least three (3) sublicensees to make AA or AD from the Escrowed Materials and any two (2) of these sublicensees Comes to Market.
“Strain” means a yeast genetically engineered, developed, or enhanced by the Company to produce AA or AD. For clarity, “Strain” encompasses populations, subpopulations, and derivatives of such genetically engineered, developed, or enhanced yeast.
“Target Diseases” means polio, malaria (including falciparum and vivax), tuberculosis, cryptococcus, certain neglected infectious diseases (including hookworm, trichuris, ascaris, loa, leishmaniasis, trypanosomiasis, chagas, rabies, cysticercosis, trachoma, onchocerciasis, schistosorniasis, Japanese encephalitis, guinea worm, lymphatic filariasis, human African trypanosomiasis (HAT) and leprosy), pertussis, measles, rubella, yellow fever, Group B streptococcus, dengue, zika, Ebola, Lassa Fever, and diarrhea/enteric diseases (including ETEC, shigella, cryptosporidium, cholera, typhoid, rotavirus, norovirus and hepatitis E).
“Technical Assistance” means providing, with up to five personnel, up to a maximum of one hundred twenty (120) hours per person per month, teleconference, video conference, and/or in-person consultation services by relevant Company employees with regard to the sublicensee’s implementation of the Escrowed Materials to produce AA or AD from the escrowed Strain solely for conversion into artemisinin that is only included in ACTs used to treat malaria. All such hours provided will be billed to the Foundation or sublicensee at an hourly rate of US$168 per hour. The project plan for Technical Assistance, including staffing levels, will be mutually agreed upon by the Company and the Foundation or sublicensee in advance of the commencement of such services. The Company will invoice the Foundation or sublicensee at the end of each month for the hours of Technical Assistance provided during such just-ended month, and the Foundation or sublicensee will pay such invoiced amount to the Company within thirty (30) days after receipt of the invoice. The Foundation or sublicensee shall also reimburse the Company for its reasonable documented expenses, including travel expenses incurred with respect to the Technical Assistance, and such amounts will be included in the invoiced amounts. For clarity, if neither the Foundation nor the sublicensee has timely paid an invoice for Technical Assistance, the parties agree that the Company has no obligation to provide Technical Assistance to such sublicensee until the outstanding invoice has been paid.
3. Global Access Commitments
The following paragraphs are intended to ensure satisfaction of the Charitable Purposes. In consideration of theFoundation Investment, the Company agrees to the following (collectively “Global Access Commitments”) effective as of the Closing Date (as defined in the SPA):
[…]
3(d) Non-Exclusive License to the Foundation
(i) License Grant. Effective at Closing (as defined in the SPA), for a one-time fee of Ten Thousand Dollars ($10,000), the Company hereby grants the Foundation a worldwide, non-exclusive, perpetual, irrevocable, fully-paid up, royalty-free, sub-licensable license under all Intellectual Property owned or licensed by the Company that is necessary to make, use, import, sell and offer for sale AA or AD from the escrowed Strain (other than any patents or patent applications exclusively licensed or sublicensed to The Institute for One World Health per the IOWH Agreement) solely for the Foundation and its sublicensees to make, use, import, sell, and offer for sale AA or AD from the escrowed Strain solely for the production of artemisinin for ACTs to treat malaria.
If requested in writing by the Foundation, the Company agrees to cooperate with the Foundation in executing documents reflecting or recording the foregoing license.
(ii) Sublicensees. The Foundation shall have the right to grant sublicenses of the license granted in subsection (d)(i); provided, however, with respect to a sublicense for the making of AA and AD (including access to and use of the escrowed Strain and other Escrowed Materials described in subsection (d)(iii) below), the Foundation may grant a sublicense for the making of AA or AD (and provide access to and use of the escrowed Strain and other Escrowed Materials) to only a sublicensee(1) who has executed a written sublicense agreement with the Foundation that contains the provisions set forth in Appendix 3 attached hereto and (2) for whom the Company has provided its prior written consent (not to be unreasonably withheld, conditioned or delayed) or who is listed by the parties on Appendix 4 attached hereto.
Each sublicensee must be an entity or organization with a reputable record for safety, legal compliance, and corporate integrity.
(iii) Escrow of AA/AD Strain for the Foundation’s License. The Company shall, within the later of forty- five (45) days of the date of this Letter Agreement and five (5) business days after the Closing Date (as defined in the SPA), deposit with a mutually agreed third party escrow agent (the “Escrow Agent”), pursuant to an escrow agreement entered between such Escrow Agent, the Company, and the Foundation: (1) the Strain that the Company is currently using to produce AA and AD and (2) the Company’s current process, including a report (the “Technology Transfer Report”), which includes the following elements: a description of the current production process, applicable standard operating procedures (the “SOPs”), in-process and final product specifications, analytical method development and validation reports, contact information and production requirements for external CRO’s or CMO’s engaged by the Company to perform process steps in the production of AA and AD, contact information for suppliers of critical reagents, and all additional materials and information needed to produce AA and AD with such Strain (collectively (1) and (2), as updated from time-to-time by the Company under the next paragraph, the “Escrowed Materials”).
The Company shall, on or about every April 1 and October 1 and in addition within thirty (30) days of a one-time written request by the Foundation, update the Escrowed Materials by replacing (1) the escrowed Strain with the Company’s then-most current, improved version of the Strain used to produce AA and AD and (2) the Technology Transfer Report to produce AA and AD with such then-current Strain. Upon the conclusion of the Company’s AA and AD Strain development program under this Letter Agreement, the Company will make a final deposit of the final optimized AA and AD Strain with the Escrow Agent and a Technology Transfer Report for the optimized Strain, after which deposit the Company’s obligations to update the Escrowed Materials shall terminate.
The Foundation will have the right to request release of the Escrowed Materials from the Escrow Agent at any time following their deposit to any entity that has a sublicensee under subsection d(ii) to make AA or AD. During the Commitment Period, upon release of the Escrowed Materials to a sublicensee under subsection d(ii), the Company agrees to provide, commencing after sixty (60) days prior written notice from the Foundation, reasonable Technical Assistance to such sublicensee to enable the sublicensee to make effective use of the Escrowed Materials consistent with the license in subsection (d)(i). However, the parties agree that the Company is not obligated to provide Technical Assistance to more than five (5) sublicensees, even if the Foundation has sublicensed more than five (5) sublicensees under subsection d(ii). Due to the potential variances in sublicensees’ facilities, equipment, capabilities, personnel, experience, locations, infrastructure, and/or operations, there is no guarantee of successful implementation or performance of the Escrowed Materials at any sublicensee, even after the Technical Assistance. Any dispute between the parties regarding the deposit or release of the Escrowed Materials shall be resolved as provided in Section 21.
For clarity, the Escrowed Materials shall be used by the Foundation and its sublicensees only pursuant to the license granted in subsection (d)(i) and the restrictions set forth in subsection (d)(i) and (d)(ii) above, and such disclosure or release is not intended to grant any other rights of use, express or implied.
(e) Treatment of Additional Target Diseases. The parties acknowledge that in addition to the use of artemisinin to produce ACTs to treat malaria, now or in the future it may be possible for artemisinin to be used for the treatment of other Target Diseases. The Company agrees that during the Commitment Period, if the Foundation so requests in writing to the Company, (i) the license granted in Section 3(d)(i) of this Letter Agreement (including any sublicense thereof) will also allow the Foundation and its sublicensees to make, use, import, sell, and offer for sale AA or AD from the escrowed Strain for the production of artemisinin for use in the treatment of any or all of the Target Diseases and (ii) the covenant not to sue in Section 3(c) will also apply to the making, using, offering for sale, selling, or importing of AA or AD that is used for the production of artemisinin for use in the treatment of any or all of the Target Diseases.
Appendix 3: TERMS OF ANY SUBLICENSE AGREEMENT TO MAKE AA OR AD
1. Sublicensee will not use the released escrowed Strain except to make AA and AD, and such AA and AD will be used, imported, offered for sale, and sold only for the production of artemisinin for ACTs to treat malaria.
2. Sublicensee will covenant not to reverse engineer the released escrowed Strain, not to engineer or genetically modify suchStrain, and not to distribute, disclose or transfer such Strain or any related Intellectual Property to any third party unless expressly agreed in writing by the Company, in its sole discretion.
3. Sublicensee will agree to (i) hold in strict confidence and take all reasonable precautions to protect the Escrowed Materials (including the Strain) and any other Proprietary Information (as defined in the CDA) of the Company that it obtains and (ii) not divulge any of such information or any information derived therefrom to any employee who does not have a need to know for the sublicensee to exercise its sublicense rights or to any third party.
4. Each sublicensee will represent and warrant that its manufacture and supply of AA and AD will be conducted in accordance with applicable laws, rules and regulations.
5. The sublicensee’s sublicense and use and possession of the Escrowed Materials (including the Strain) will terminate immediately upon sublicensee’s breach of the sublicense agreement. Upon termination, the sublicensee will immediately destroy all of the Strain in its possession and certify to such destruction.
6. At least once per quarter, the Company will have the right, upon reasonable prior notice and during normal business hours, to inspect the sublicensee’s facilities at which the AA and AD is manufactured from the released escrowed Strain.
7. The Company will have the right, upon reasonable prior notice and during normal business hours, to have a representative present from time-to-time during a sublicensee’s manufacture of the AA and AD from the released escrowed Strain.
8. The Company will be named as a third party beneficiary of the sublicense agreement between the Foundation and the sublicensee, and as between the Foundation and the Company, the Company will have the primary right, but not obligation, to pursue actions against the sublicensee to protect the released escrowed Strain and related Intellectual Property vis a vis the sublicensee.
9. Each sublicensee will, per reasonable and customary obligations, agree to indemnify the Company for sublicensee’s actions under the sublicense.
10. Each sublicensee will obtain and maintain insurance coverage with a reputable carrier at amounts commercially reasonable for its activities and commitments under its sublicense.
Appendix 4: FOUNDATION’S INITIAL SUBLICENSEES TO MAKE AA OR AD
Anthem BioSciences
Apello, a division of Hengdian Group Kangyu Pharmaceutical Co., Ltd.
Biocon Ltd.
Celltrion Inc.
Cipla Ltd.
Concord Biotech Ltd.
Fosun Pharma
Green Cross Corporation
Huvepharma NV
Ipca Laboratories
LG Life Science Ltd.
Pfizer Inc.
Shanghai Aurisco Industry Co. Ltd. / Zhejiang Tiantai Aursico Pharma, Co., Ltd.
Sterling Pharmaceutical Services