EXHIBIT 10.9
COLLABORATION AND LICENSE AGREEMENT
This AGREEMENT, having a date of July 29, 2002, is made by and among, on
the one hand, X.XXXXXXXX-XX XXXXX LTD, a Swiss corporation having its principal
place of business at Xxxxxxxxxxxxxxxxx 000, XX-0000, Xxxxx, Xxxxxxxxxxx and
XXXXXXXX-XX XXXXX INC., a New Jersey corporation, having its principal place of
business at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 ("Roche") and, on the
other hand, MEMORY PHARMACEUTICALS CORP., a Delaware corporation, having its
principal place of business at 000 Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000
("Memory").
INTRODUCTION
1. Memory has discovered compounds active as PDE4 inhibitors, including a
compound known as MEM1414, and owns related intellectual property rights.
2. Roche has expertise in the research, development, manufacture and
commercialization of pharmaceutical products.
3. The parties wish to collaborate to develop MEM1414 for commercialization;
develop potential back-up compounds and other PDE4 inhibitors focused on
central nervous system indications; and explore potential applications for
other therapeutic areas such as respiratory disease.
4. In consideration of the mutual covenants and promises contained in this
Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Memory and Roche agree as
follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, the following terms, whether used in the singular or
plural, shall have the following meanings:
1.1 "Affiliate" means (a) a business entity which owns, directly or
indirectly, at least fifty percent (50%) of the voting shares or other
means of control of a Party; or (b) a business entity in which at least
fifty percent (50%) of the voting shares or other means of control are
owned by a Party, either directly or indirectly; or (c) a business entity,
the majority ownership of which is directly or indirectly common to the
majority ownership of a Party. Anything to the contrary in this paragraph
notwithstanding, [*], a Delaware corporation, shall not be deemed an
Affiliate of Roche unless Roche provides written notice to Memory of its
desire to include [*] as an Affiliate of Roche. Notwithstanding the
preceeding provisions, once an entity ceases to be an Affiliate, then such
entity shall, without any further action, cease to have any rights,
including license and sublicense rights, under this Agreement that it has
by reason of being an Affiliate.
In addition, Roche is presently seeking permission to acquire an interest
in [*]. Nothing in this Agreement is to be construed as binding [*] to any
of the terms and conditions contained in this Agreement. However, should
[*] become a Roche Affiliate it shall be bound by the terms and conditions
of this Agreement. If [*] should become a Roche Affiliate but not agree to
be bound by the terms and conditions of this Agreement, then [*] shall
have none of the rights and obligations of an Affiliate of Roche under
this Agreement, and Roche shall not grant a sublicense to [*] under this
Agreement without prior written consent of Memory.
1.2 "Agreement Term" means the term of this Agreement, more fully described in
Section 16.1.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
1.3 "Bioequivalent Product" means, with respect to a given Product sold in a
given country of the Territory by Roche, its Affiliate or sublicensee, a
product sold by a Third Party in such country containing the same PDE4
inhibitor (or an acid, salt or ester thereof) as such Product.
1.4 "Clinical Candidate" shall be a PDE4 inhibitor that the JLT approves after
consideration of the guidelines as provided in the Research Workplan.
1.5 "Collaboration Compound" means any PDE4 inhibitor that (i) either or both
Parties or its Affiliates conceives in the conduct of the Research
Collaboration, or (ii) the JLT otherwise agrees shall constitute a
Collaboration Compound pursuant to the Research Workplan.
1.6 "Collaboration Patent Right" means a Patent Right Covering an
Invention.
1.7 "Collaboration Technology" means all Know-How generated in the conduct of
the Research Collaboration, other than Collaboration Compounds.
Collaboration Technology includes all Inventions, other than Collaboration
Compounds.
1.8 "Combination Product" means any product containing both a pharmaceutically
active agent which causes it to be considered a Product and one or more
other pharmaceutically active agents which are not Products.
1.9 "Composition of Matter Claim" means, for a given Product in a given
country of the Territory, a Valid Claim of a Memory Patent Right or a
Collaboration Patent Right that Covers the molecule per se of the PDE4
inhibitor that is included in such Product, in whole or as a component
thereof, as an active ingredient of such Product.
1.10 "Cover" (including the variations such as "Covered", "Coverage" or
"Covering") shall mean that the making, using, offering for sale, selling
or importing of a given product would infringe a claim of a Patent Right
in the absence of a license under such Patent Right. The determination of
whether a product is Covered by a particular Patent Right shall be made on
a country-by-country basis.
1.11 "Effective Date" means the date that all conditions subsequent under
Section 16.1(a) have occurred.
1.12 "Europe" means the United Kingdom, Germany, Italy, France and Spain.
1.13 "Field" shall mean prophylaxis and treatment of diseases, in all
indications, for either human or veterinary use.
1.14 "IND" means an Investigational New Drug Application filed with the United
States Food and Drug Administration ("FDA") for human clinical testing of
a drug.
1.15 "Initiation of Phase II" means the date that a patient is first dosed by
or on behalf of Roche, its Affiliate or sublicensee with a Product in a
Phase II clinical trial.
1.16 "Initiation of Phase III" means the date that a patient is first dosed by
or on behalf of Roche, its Affiliate or sublicensee with a Product in a
Phase III clinical trial.
1.17 "Invention" means an invention that is made in the conduct of the Research
Collaboration.
1.18 "JLT" means that committee organized and operating as provided in Article
7.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
1.19 "Joint Invention" means an Invention having at least one co-inventor who
is an employee, consultant or agent of each of the Parties or its
Affiliate.
1.20 "Know-How" means data, knowledge and information, including materials,
samples, chemical manufacturing data, toxicological data, pharmacological
data, preclinical data, assays, platforms, formulations, specifications,
quality control testing data, that are necessary or useful for the
discovery, manufacture, development or commercialization of Product in the
Territory.
1.21 "Launch" means, with respect to a Product in a country of the Territory,
the date of the first commercial sale by Roche, its Affiliate or its
sublicensee of the given Product in the given country after Regulatory
Approval in such country.
1.22 "Major Market Countries" means the US, Canada, Japan, Europe, China and
Korea.
1.23 "Memory Compound" means any PDE4 inhibitor for which Memory either prior
to the Effective Date or during the Agreement Term has rights, whether by
reason of its own conception of such inhibitor, or under agreement with a
Third Party.
1.24 "Memory Invention" means an Invention having as inventors only employees,
consultants or agents of Memory or its Affiliate.
1.25 "Memory Know-How" means all Know-How that Memory owns, or otherwise has
the right to grant the licenses herein, during the Agreement Term.
1.26 "Memory Patent Rights" means all Patent Rights that Memory owns, or
otherwise has the right to grant the licenses herein, during the Agreement
Term. Schedule A lists all Memory Patent Rights that Cover the Memory
Compounds as of the date hereof ("Base Patents").
1.27 "NCE" means a PDE4 inhibitor that itself, or its ester, salt or other
noncovalent derivative, has not been the subject of a Regulatory Approval.
1.28 "NDA" means a New Drug Application filed with the FDA, or its foreign
equivalent, for a drug.
1.29 "NDA Filing" means for a given Product, the date that Roche, its Affiliate
or sublicensee files an NDA for the Product.
1.30 "Net Sales" and the related term "Adjusted Gross Sales" mean:
"Adjusted Gross Sales" means the amount of gross sales of the Product
invoiced by Roche, its Affiliates and its sub-licensees to independent
third parties less deductions of returns (including allowances actually
given for spoiled, damaged, out-dated, rejected, returned Product sold,
withdrawals and recalls), rebates to the extent consistently applied by
Roche to its products (price reductions, rebates to social and welfare
systems, charge backs, cash sales incentives (but only to the extent it is
a sales related deduction which is accounted for within Roche on a
product-by-product basis)), government mandated rebates and similar types
of rebates (e.g., P.P.R.S, Medicaid, each as consistently applied by Roche
to its products), volume (quantity) discounts, each as consistently
applied by Roche to its products, taxes (value added or sales taxes,
government mandated exceptional taxes and other taxes directly linked to
the gross sales amount), it being understood that income and capital gains
taxes are not the type of taxes contemplated as a deduction in this
definition of Adjusted Gross Sales."
[*] CONFIDENTIAL TREATMENT IS REQUESTED
"Net Sales" means, for the US, the amount calculated by subtracting from
the amount of Adjusted Gross Sales a lump sum deduction of [*] percent
([*]%) of Adjusted Gross Sales in lieu of those sales related deductions
which are not accounted for within Roche on a product by product basis
(e.g. outward freights, postage charges, transportation insurance,
packaging materials for dispatch of goods, custom duties, bad debt,
discounts granted later than at the time of invoicing, and cash
discounts).
"Net Sales" means, for the ROW Territory, the amount calculated by
subtracting from the amount of Adjusted Gross Sales a lump sum deduction
of [*] percent ([*]%) of Adjusted Gross Sales in lieu of those sales
related deductions which are not accounted for within Roche on a product
by product basis (e.g. outward freights, postage charges, transportation
insurance, packaging materials for dispatch of goods, custom duties, bad
debt, discounts granted later than at the time of invoicing, and cash
discounts).
Notwithstanding the foregoing, amounts received by Roche, its Affiliates
and sublicensees for the sale of Product among Roche, its Affiliates or
sublicensees for resale shall not be included in the computation of
Adjusted Gross Sales and Net Sales."
1.31 "Neurological Indication" means prophylaxis or treatment of Alzheimers'
disease, prophylaxis or treatment of mild cognitive impairment ("MCI") or
treatment of vascular dementia.
1.32 "Non-Memory Compound" means a PDE4 inhibitor, other than a Memory Compound
or a Collaboration Compound, with respect to which the initial IND for the
inhibitor is for a Neurological Indication or Psychiatric Indication, and
which initial IND has been filed within five (5) years after the Effective
Date by Roche or its Affiliate.
1.33 "Other Indication" means any indication other than a Neurological
Indication or a Psychiatric Indication.
1.34 "Party" means Roche and/or Memory.
1.35 "Patent Right" means all rights under any patent or patent application in
any country of the Territory, including any substitution, extension or
supplementary protection certificate, reissue, reexamination, renewal,
division, continuation or continuations-in-part thereof.
1.36 "Phase II" means the second phase of human clinical trials of a drug
required by the US FDA to gain evidence of efficacy in the target
population, determine optimal dosage, and obtain expanded evidence of
safety for Product(s), as described in 21 CFR Parts 312, as it may be
amended.
1.37 "Phase III" means the third phase of human clinical trials of a drug
required by the US FDA to gain evidence of efficacy in the target
population, and obtain expanded evidence of safety for Product(s), as
described in 21 CFR Part 312, as it may be amended.
1.38 "Product" means any and all products that include, in whole or as a
component thereof, a Memory Compound or a Collaboration Compound.
1.39 "Psychiatric Indication" means depression, anxiety or mixed
anxiety/depression.
1.40 "Regulatory Approval" means any approvals (including pricing and
reimbursement approvals), licenses, registrations or authorizations of any
national or international or local regulatory agency, department, bureau
or other governmental entity, necessary for the manufacture and sale
[*] CONFIDENTIAL TREATMENT IS REQUESTED
of a Product in the Field in a regulatory jurisdiction in the Territory by
Roche, its Affiliate or sublicensee.
1.41 "Research Collaboration" means the collaborative non-clinical research
program between the Parties, more fully described in the Research
Workplan.
1.42 "Research Workplan" means the plan of preclinical and non-clinical
development activities attached as Schedule B, as it may be amended from
time to time.
1.43 "Research Term" shall have the meaning provided in Section 7.1(b)(iii).
1.44 "Roche Invention" means an Invention having as inventors only employees,
consultants or agents of Roche or its Affiliate.
1.45 "ROW Territory" means all countries and territories other than the US.
1.46 "Territory" means all countries and territories in the world.
1.47 "Third Party" means a person or entity other than (i) Memory or any of its
Affiliates, or (ii) Roche or any of its Affiliates.
1.48 "US" means the United States of America and its possessions and
territories, including Puerto Rico.
1.49 "Valid Claim" means a claim in any (i) unexpired and issued Memory Patent
Right or Collaboration Patent Right that has not been disclaimed, revoked
or held invalid by a final unappealable decision of a court of competent
jurisdiction or government agency or (ii) pending patent application that
is a Memory Patent Right or a Collaboration Patent Right which application
has been on file with the applicable patent office for no more than ten
(10) years and for which there has been reasonably consistent activity to
advance to issuance of a patent.
ARTICLE 2. LICENSE GRANTS
2.1 License Grants. Subject to the terms and conditions of this Agreement,
Memory grants to Roche the sole and exclusive license, including the right
to grant sublicenses pursuant to Section 2.2, under the Memory Patents and
to use the Memory Know-How, to make, use, offer for sale, sell and import
Products in the Territory for use in the Field.
The exclusivity of the above license is subject to the retained right of
Memory and its respective Affiliates to conduct preclinical and
non-clinical development activities related to Product, solely to the
extent expressly contemplated by this Agreement. In addition, nothing in
this Agreement grants to Roche any right or license to use Memory Know-How
for any purpose other than to make, use, offer for sale, sell and import
Products in the Territory for use in the Field. Further, nothing in this
Agreement shall limit the right of Memory to use Memory Know-How for any
purpose not related to the making, using, offering for sale, selling or
importing Products in the Territory for use in the Field.
2.2 Sublicense Rights. The rights and licenses granted to Roche under Section
2.1 shall include the right to grant sublicenses to its Affiliates and
Third Parties under such rights and licenses, in whole or in part, solely
to the extent necessary to make, use, offer for sale, sell or import
Products in the Territory for use in the Field. If Roche grants such a
sublicense, Roche shall ensure that all of the applicable terms and
conditions of this Agreement shall apply to the
[*] CONFIDENTIAL TREATMENT IS REQUESTED
Affiliate or Third Party sublicensee to the same extent as they apply to
Roche for all purposes. Roche assumes full responsibility for the
performance of all obligations and observance of all terms so imposed on
such Affiliate or Third Party sublicensee and will itself account to
Memory for all payments due under this Agreement by reason of such
sublicense.
Notwithstanding the above, Roche shall not have the right to sublicense
the rights granted to Roche under Section 2.1 to any Third Party in a
Major Market Country, except upon the prior written approval of Memory,
which approval Memory shall not unreasonably withhold.
Any sublicense may, at the written election of Memory, continue in full
force and effect after the termination of any of the underlying licenses
granted herein to Roche (the foregoing shall apply to a termination in
whole or in part of such underlying licenses). Upon the licenses granted
herein to Roche becoming fully paid up pursuant to Section 16.1(b), any
and all sublicenses granted by Roche similarly shall become fully paid up
as to Memory.
2.3 Memory Co-Promotion Right. If Roche wishes to offer a right to co-promote
a Product to a Third Party for the United States of America, then Roche
shall first present an offer to Memory for such rights. Memory shall have
a right to enter into good faith negotiations with Roche for up to ninety
(90) days from the date Memory receives the offer, provided Memory can
provide a capable established sales force or equivalent alternative. If,
at the end of the ninety (90) day period, the Parties have been unable to
reach an agreement granting Memory co-promotion rights in the United
States of America, then Roche shall be free to offer the rights to a Third
Party, provided that Roche shall not make an offer more favorable to any
such Third Party than the offer last made to Memory by Roche without first
giving Memory at least thirty (30) days to accept such more favorable
offer if Memory can provide an established sales force or alternative
having at least equivalent capability to the Third Party.
2.4 Products Containing Non-Memory Compounds. Roche represents, and Memory
acknowledges, that prior to the date hereof Roche has, or during the
Agreement Term Roche may have rights in or to Non-Memory Compounds,
whether by reason of its own conception, or acquired under agreement with
a Third Party. Memory shall have the right from time to time to request an
inventory of Non-Memory Compounds, and Roche shall promptly provide Memory
with such inventory. With respect to each Non-Memory Compound, Memory
shall be entitled to receive the financial consideration from Roche as
provided in Schedule C.
Memory covenants not to xxx Xxxxx relating to any Non-Memory Compound, so
long as Memory shall be entitled to receive the financial consideration
with respect thereto under Schedule C, unless Roche is in breach of its
obligations relating to Non-Memory Compounds under this Agreement.
2.5 Requirement to Divest. If Roche is required by a relevant government
authority in a given country of the Territory to divest rights to a Memory
Compound, Collaboration Compound, and/or Product, not yet Launched in such
country, then Roche shall use its reasonable best efforts to obtain
authority to fulfill such requirement by returning rights to Memory to the
Memory Compound, Collaboration Compound and/or Product without
consideration to Memory or Roche (except as provided in Section 16.4(c))
under the conditions of Section 16.4.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
ARTICLE 3. DILIGENCE
3.1 Diligence. Roche shall use reasonable diligence in proceeding with the
development, including obtaining required Regulatory Approvals,
manufacturing, marketing and sale of Products in the Major Market
Countries.
Reasonable diligence as used in this Agreement shall mean the same
standard of effort as used by Roche, or in any case not less than common
in the industry taken as a whole, in the research, development, clinical
testing, manufacturing, marketing and sale of a product which (i) must
receive regulatory approval in Major Market Countries and (ii) has similar
potential as the Product, taking into account scientific, business and
marketing and return on investment considerations. It is understood that
such Product potential may change from time to time based upon changing
scientific, business and marketing and return on investment
considerations. The Parties also acknowledge that, even within the Major
Market Countries, Roche (and its Affiliates) does not always seek to
market its own products in every such country or seek to obtain regulatory
approval in every such country or for every potential indication. As a
result, the exercise by Roche of reasonable diligence is to be determined
by judging its efforts taken as a whole in the following regions on a
region-by-region basis (the regions being North America (US and Canada),
Europe and Asia (Japan, China and Korea)).
If Memory believes in good faith that Roche has failed to utilize
reasonable diligence as required in the above paragraph, then Memory may
give Roche written notice of such alleged failure, identifying the Product
and region at issue and giving specific detailed reasons of such
allegation. Within sixty (60) days following Roche's receipt of any such
notice from Memory ("Response Period"), Roche shall have the right to
provide Memory with a written response specifying, in reasonable detail,
how it has used reasonable diligence as required in the above paragraph.
If Roche has failed to provide within the Response Period a written
response, in reasonable detail, indicating the manner in which it is in
compliance with its obligations under this Section 3.1 or in which it has
remedied any breach thereof, or Roche has failed within the Response
Period to remedy any breach of its obligations under this Section 3.1,
then Memory shall have the right to terminate this Agreement, in whole or
in part, as described below in this Section 3.1, upon written notice to
Roche effective as of the end of the Response Period. Memory shall have
the right to terminate this Agreement as to any region described above if
Roche fails to comply with its obligations under this Section 3.1 with
respect to the Products (taken as a whole) in such region. Memory shall
have the right to terminate this Agreement in the Territory with respect
to any Product if Roche fails to comply with its obligations under this
Section 3.1 for such Product in at least two of the three regions
described above. Memory shall have the right to terminate this Agreement
in its entirety if Roche fails to comply with its obligations under this
Section 3.1 for the Products (taken as a whole) in at least two of the
three regions described above.
In the event of a dispute between the Parties with respect to whether
Roche has complied with its obligation under this Section 3.1, then such
dispute shall be resolved in accordance with Article 17. The consequences
of any termination under this Section shall be as set forth in Section
16.4 and Article 17.
3.2 [*]
The Parties confirm and agree that nothing in this Section 3.2 limits the
obligations of Roche or the rights of Memory under Section 3.1.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
ARTICLE 4. PAYMENTS TO MEMORY
4.1 Payment for Platform Technology. Roche shall pay Memory a total of [*]
dollars ($[*]), which shall be non-refundable and non-creditable, and due
and payable as follows:
Event Payment (mio US$)
----- -----------------
The Effective Date 8
JLT decides on MEM 1414 2
as a Clinical Candidate for
Alzheimers' disease
[*] [*]
[*] [*]
Each payment in this Section 4.1 shall be due and payable by Roche within
thirty (30) days after occurrence of the applicable Event (except that the
payment of $8,000,000 payable on the Effective Date shall be paid within
fifteen (15) calendar days of the occurrence of the Effective Date)
Notwithstanding anything to the contrary, Roche will make each of such
payments only once, for the first occurrence of a respective Event,
regardless of how many times the Event may be achieved.
4.2 CRO Reimbursement. Roche shall promptly reimburse Memory the actual amount
of payments by Memory to contract research organizations ("CROs") for
MEM1414, not to exceed one million five hundred thousand dollars (US
$1,500,000). Such reimbursement shall only apply to amounts previously
paid in respect of the 10 kilogram GMP MEM1414 batch produced by MediChem
Research Inc., or hereafter paid to any CRO for MEM1414. Such
reimbursement shall not become due and payable from Roche to Memory in any
amount until after the JLT analyzes the relevant study reports from the
CROs.
4.3 Development Event Based Payments.
(a) Neurological Indications. Roche shall pay to Memory the following
non-refundable and non-creditable payments upon the first occurrence
of the following Events for a Product.
(i) First Product
# Event Payment (mio US$)
----- -----------------
1. [*] [*]
2. [*] [*]
3. [*] [*]
4. [*] [*]
5. [*] [*]
6. [*] [*]
7. [*]** [*]
[*] CONFIDENTIAL TREATMENT IS REQUESTED
8. [*] [*]
** For the US, the Product should not have a black box warning in its label
at time of Launch and should not receive one during its first 6 months on
the market. During that period there should not be any "Dear Doctor"
letters issued by the US FDA regarding this Product. In the US, the
Product is the first or second non-achetylcholinesterase inhibitor (AChEI)
having regulatory approval for the treatment of mild to moderate dementia
of the Alzheimer's type or MCI, and a third non-AchEI having
regulatory approval for the treatment of mild to moderate dementia of the
Alzheimer's type or MCI does not launch in the US during the 6 month
period following the Launch of the Product in the US.
(ii) Second Product
Roche shall pay to Memory the following non-refundable and non-creditable
payments upon the first occurrence of the following Events for a Product
having an NCE that is different from an NCE for which any payment occurred
under Section 4.3(a)(i).
Event Payment (mio US$)
----- -----------------
[*] for a Neurological Indication [*]
[*] for a Neurological Indication [*]
[*] for a Neurological Indication [*]
[*] for a Neurological Indication [*]
[*] for a Neurological Indication [*]
(b) Psychiatric Indications. Roche shall pay to Memory the following
non-refundable and non-creditable payments upon the first occurrence
of the following Events for a Product having an NCE that is
different from an NCE for which any payment occurred under Sections
4.3(a).
Event Payment (mio US$)
----- -----------------
[*] for depression [*]
[*] for depression [*]
[*] for depression [*]
[*] for depression [*]
[*] for depression [*]
[*] for depression [*]
[*] for depression [*]
[*]** [*]
[*] for anxiety [*]
[*] CONFIDENTIAL TREATMENT IS REQUESTED
** In the US, the Product does not have a black box warning in its label at
time of Launch and does not receive one during its first 6 months on the
market in the US. During that period there is not any "Dear Doctor"
letters issued by the US FDA regarding this Product. The Product is the
first PDE4 inhibitor having regulatory approval in the US for the
treatment of depression, and a second PDE4 inhibitor having regulatory
approval for the treatment of depression does not launch in the US during
the 6 month period following the Launch of the Product in the US.
(c) Other Indications. Roche shall pay to Memory the following
non-refundable, non-creditable payments upon the first occurrence of
the following Events for a Product having an NCE that is different
from those NCE's for which any payment occurred under Sections
4.3(a) and/or 4.3(b).
Event Payment (mio US$)
----- -----------------
[*] for an Other Indication [*]
[*] for an Other Indication [*]
[*] for an Other Indication [*]
[*] for an Other Indication [*]
[*] for an Other Indication [*]
(d) Each payment in Section 4.3(a)(i), 4.3(a)(ii), 4.3(b) and
4.3(c) shall be due and payable by Roche within thirty (30)
days after occurrence of the applicable Event. Roche will
make each of such payments only once, for the first occurrence
of a respective Event, regardless of how many times the Event
may be subsequently achieved with a Product. An Event shall
be deemed to have occurred regardless of whether a Product or
a Non-Memory Compound first achieved the Event.
(e) For the avoidance of doubt, the Parties confirm and agree that no
amount payable under this Article 4 shall reduce any royalties
payable under Article 5.
ARTICLE 5. ROYALTIES
5.1 Royalties.
(a) Roche shall pay to Memory the following payments for a given Product
having a Regulatory Approval in the US for a Neurological
Indication, based upon the Net Sales of such Product in the US,
which such Net Sales shall be subject to adjustment as provided in
this Article 5. Such royalty payments shall be calculated by
multiplying the following percentages by the following annual Net
Sales of such Product in the US (all Net Sales amounts in $ US
million):
ANNUAL US NET SALES PERCENT (%) OF NET SALES
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[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] CONFIDENTIAL TREATMENT IS REQUESTED
By way of illustration, assume in calendar year 2012 that (i) Net Sales of
the Product in the US total $950,000,000 and (ii) no adjustments or
deductions to payments under this Article 5 apply. The royalties due and
payable by Roche to Memory for such Net Sales would be $[*], calculated as
follows:
US NET SALES (IN APPLICABLE AMOUNT PAYABLE (IN
MILLIONS) SALES-BASED PAYMENT PERCENTAGE MILLIONS)
--------- ------------------------------ ---------
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*]
Notwithstanding the foregoing, if for a given Product there is no
Regulatory Approval in the US for a Neurological Indication, then, Roche
shall pay to Memory the following payments for such Product, based upon
the Net Sales of such Product in the US, which such Net Sales shall be
subject to adjustment as provided in this Article 5. Such royalty payments
shall be calculated by multiplying the following percentages by the
following annual Net Sales of such Product in the US (all Net Sales
amounts in $ US million):
ANNUAL US NET SALES PERCENT (%) OF NET SALES
------------------- ------------------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
(b) Roche shall pay to Memory the following payments for a given Product
having a Regulatory Approval in Europe for a Neurological Indication,
based upon the Net Sales of such Product in all countries of the Territory
other than the US ("ROW Territory"), which such Net Sales shall be subject
to adjustment as provided in this Article 5. Such royalty payments shall
be calculated by multiplying the following percentages by the following
annual worldwide Net Sales of such Product in the ROW Territory (all Net
Sales amounts in $ US million):
ANNUAL ROW TERRITORY NET SALES PERCENT (%) OF NET SALES
------------------------------ ------------------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Notwithstanding the foregoing, if for a given Product there is no
Regulatory Approval in Europe for a Neurological Indication, then, Roche
shall pay to Memory the following payments for such Product, based upon
the Net Sales of such Product in the ROW Territory, which such Net Sales
shall be subject to adjustment as provided in this Article 5. Such royalty
payments shall be calculated by multiplying the following percentages by
the following annual worldwide Net Sales of such Product in the ROW
Territory (all Net Sales amounts in $ US million):
ANNUAL ROW TERRITORY NET SALES PERCENT (%) OF NET SALES
------------------------------ ------------------------
[*] [*]
[*] CONFIDENTIAL TREATMENT IS REQUESTED
ANNUAL ROW TERRITORY NET SALES PERCENT (%) OF NET SALES
------------------------------ ------------------------
[*] [*]
[*] [*]
[*] [*]
Any reduction in royalty rates provided for in this Section 5.1 by reason
of not having a Regulatory Approval for a Neurological Indication shall
cease after the relevant Regulatory Approval for a Neurological Indication
is obtained and for so long as it is maintained.
5.2 Term of Royalty Payments. Roche shall calculate and make royalty payments
to Memory under this Article 5 commencing on Launch in any country. The
Net Sales of a given country shall be included for purposes of calculating
royalties under this Section until the later of (a) expiration of the last
to expire of Composition of Matter Claim in such country and (b) ten (10)
years from the Launch of such Product in such country. With respect to the
ten (10) year period, the EU will be considered as one country.
5.3 Adjustments Related to Valid Claims. For a given Product, if in, or with
respect to, a country of the Territory no Valid Claim Covers such Product,
then Roche may calculate royalties for such Product using only [*] percent
([*]%) of the amount Roche would have used for such country to calculate
royalties for such Product if a Valid Claim Covered such Product in such
country unless prior to ten years from the Launch of such Product in, or
with respect to, such country (EU considered as one country) a Valid Claim
Covering such Product exists in, or with respect to, such country in which
case Roche shall resume calculating royalties using [*] percent ([*]%) of
such amount.
5.4 Adjustments Related to Third Party Competition. For a given Product in a
given calendar quarter, if in a country of the Territory (a) a Third Party
is selling Bioequivalent Product, and (b) Roche has an obligation to make
payments under this Agreement with respect to Net Sales of the given
Product in such country, and (c) a Valid Claim Covers the given Product in
such country and (d) in such country, sales of units of Bioequivalent
Products in aggregate total at least [*] percent ([*]%) of the aggregate
sales of units of Bioequivalent Products and Products as measured at the
end of such calendar quarter, and (e) Roche has, if it is reasonable under
the circumstances, brought in the country and continued to diligently
prosecute a patent infringement suit under any relevant Composition of
Matter Claims against the Third Party or another in privity, then Roche
shall have the right to calculate royalties with respect to such calendar
quarter by including only [*] percent ([*]%) of the amount Roche would
have otherwise included for such country to calculate sales-based payments
if no Bioequivalent Product existed in such country.
5.5 Adjustments Related to Third Party Payments. Roche or its Affiliate shall
pay and be responsible for the entire consideration owed to any Third
Party pursuant to the terms of any existing or future patent licensing
agreement relating to Product. Roche shall have the right to deduct a
maximum of [*] percent ([*]%) of the consideration actually paid by Roche
or its Affiliate to a Third Party (other than [*] or [*] with respect to
license under a patent which Covers the molecule per se of the PDE4
inhibitor that is included in a given Product, from payments otherwise due
and payable by Roche to Memory under this Agreement. In no event as a
result of this Section 5.5 shall Roche reduce the royalties owed to Memory
under this Article 5 by greater than [*] percent ([*]%) of Net Sales in
the Territory for a given calendar quarter (and Roche shall be entitled to
accumulate amounts not permitted to be deducted in a prior period and
deduct such amounts in a future period).
[*] CONFIDENTIAL TREATMENT IS REQUESTED
Notwithstanding the above, (i) any payment owed under an agreement between
Memory and The Trustees of Columbia University dated July 22, 1998, as it
may be amended, shall be the sole responsibility of Memory, and (ii) any
payment owed under any agreement between Roche or its Affiliate and any
Third Party entered into prior to the Effective Date shall be the sole
responsibility of Roche, for which Roche shall not be entitled to any
deduction from payments due and payable to Memory under this Agreement.
5.6 Bonus Royalty. Roche shall pay to Memory a one-time, non-refundable and
non-creditable amount after the first occurrence of the following event
with respect to Product having Regulatory Approval in the US for a
Neurological Indication:
Event Payment (US$)
----- -------------
Net Sales in the US [*]
exceeds [*] dollars ($[*])
for a full calendar year (Jan 1 - Dec. 31)
during the Agreement Term.
Roche shall pay to Memory a one-time, non-refundable and non-creditable
amount after the first occurrence of the following event with respect to a
Product:
Event Payment (US$)
----- -------------
Net Sales in the US [*]
exceeds [*] dollars ($[*]) for a full calendar
year (Jan 1 - Dec. 31)
during the Agreement Term.
Each payment in this Section 5.6 shall be due and payable by Roche within
thirty (30) days after occurrence of the applicable Event. Notwithstanding
anything to the contrary, Roche will make each of such payments only once,
for the first occurrence of a respective Event with a Product, regardless
of how many times the Event may be achieved.
5.7 Combination Products. In the event Roche or its Affiliates intend to sell
a Combination Product, the Parties shall meet approximately one (1) year
prior to the anticipated commercial launch of such Combination Product to
negotiate in good faith and agree to an appropriate adjustment to Net
Sales to reflect the relative significance and value of the Product and
the other pharmaceutically active agent(s) contained in the Combination
Product. If, after good faith negotiations (not to exceed ninety (90)
days), the Parties cannot agree to an appropriate adjustment, Net Sales
shall equal Net Sales of the Combination Product multiplied by a fraction,
the numerator of which is the reasonable fair market value of the Product
and the denominator of which is the reasonable fair market value in the
aggregate, of all pharmaceutically active agents contained in the
Combination Product.
5.8 Mechanisms for Adjustments. In no event shall any adjustments pursuant to
Sections 5.3, 5.4 and/or 5.5 result in Memory receiving royalties for a
given calendar quarter pursuant to Section 5.1 in amount less than [*]% of
the amounts set forth therein as if no adjustment (s) had been made. If
Roche obtains a license to a PDE4
[*] CONFIDENTIAL TREATMENT IS REQUESTED
inhibitor from a Third Party and includes such PDE4 inhibitor in a
Product, as a result of which the Product becomes a Combination Product,
Roche shall not be entitled to an adjustment pursuant to Section 5.5 as a
result of such license.
ARTICLE 6. PAYMENT, REPORTING, AUDITING
6.1 Currency and Conversion.
(a) All payments under this Agreement shall be in U.S. Dollars by wire
transfer of immediately available funds in accordance with
instruction or instructions from the Party being paid.
(b) Whenever calculation of Net Sales requires conversion from any
foreign currency, Roche shall convert the amount of Net Sales in
foreign currencies as computed in Roche's central Swiss Francs Sales
Statistics for the countries concerned, using for internal foreign
currency translation Roche's then current standard practices
actually used on a consistent basis in preparing its audited
financial statements.
(c) For sublicensees in a country, when calculating the Net Sales, the
sublicensee shall report to Roche the amount of such sales within
thirty (30) days from the end of the reporting period, after having
converted each applicable monthly sales in foreign currency into
Swiss Francs using the average rate of exchange published in the
Wall Street Journal (or some other source agreed upon by the Parties
for any particular country) for each respective month of the
reporting period.
6.2 Payments. After the Launch of the Product in any country of the Territory,
Roche shall calculate royalty payments set forth in Article 5 quarterly as
of March 31, June 30, September 30 and December 31 (each being the last
day of a reporting period). Roche shall pay such payments quarterly within
sixty (60) days after the end of each reporting period in which Net Sales
occur during the Agreement Term.
With each such payment, Roche shall deliver to Memory the following
information split among U.S., Europe and rest of world:
(a) Adjusted Gross Sales for each Product;
(b) Net Sales for each Product;
(c) the royalty payments due to Memory for the reporting period;
If Memory reasonably requests additional information relating to gross
sales of the Products in the Major Market Countries (excluding China and
Korea), deductions therefrom to calculate Adjusted Gross Sales or Net
Sales and/or adjustments thereto, Roche agrees to provide such information
to Memory within a reasonable time, provided, that Memory shall have the
rights to exercise such requests not more than once during any period of
twelve (12) consecutive months.
In the event Roche does not pay Memory any amounts due under this
Agreement, including pursuant to Articles 4 and 5, within the applicable
time period set forth herein, without limiting Memory's rights under
Article 16, such payment shall bear interest, to the extent permitted by
applicable law, at the rate of interest (prime rate) as published in the
weekly Federal Reserve H.15 bulletin plus [*]% (or a successor or similar
publication) from time to time, for the applicable period calculated on
the number of days such a payment is overdue.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
6.3 Taxes.
(a) Memory shall pay all applicable taxes levied on Memory under this
Agreement.
(b) If provision is made in law or regulation of any country for
withholding of taxes of any type, levies on Memory or other charges
against Memory with respect to any amounts payable under this
Agreement to Memory, Roche shall promptly pay such tax, levy or
charge for and on behalf of Memory to the proper governmental
authority, and shall promptly furnish Memory with receipt of such
payment. Roche shall have the right to deduct any such tax, levy or
charge actually paid from payment due Memory or be promptly
reimbursed by Memory if no further payments are due Memory. Each
Party agrees to assist the other Party in claiming exemption from
such deductions or withholdings under double taxation or similar
agreement or treaty from time to time in force and in minimizing the
amount required to be so withheld or deducted.
6.4 Blocked Countries. If by reason of law Roche is unable to convert to U.S.
Dollars a portion of the amount due by Roche under this Agreement, then
Roche shall notify Memory in writing and, upon written request from
Memory, Roche shall pay to Memory such portion, in the currency of any
other country designated by Memory and legally available to Roche.
6.5 Accounting.
(a) Roche shall maintain and cause its Affiliates and sublicensees to
maintain books of account containing all particulars that may be
necessary for the purpose of calculating all payments under this
Agreement. Such books of account shall be kept at their principal
place of business. Memory shall have the right to engage Roche's
independent, certified public accountant to perform, on behalf of
Memory, an audit of such books and records of Roche and its
Affiliates and sublicensees as is necessary to confirm any amounts
payable to Memory under this Agreement for the period or periods
requested by Memory and the correctness of any report or payments
made under this Agreement.
(b) Such audits shall be conducted during normal business hours upon
reasonable prior written notice from Memory (minimum of thirty (30)
days) in such a manner as to not unnecessarily interfere with
Roche's normal business activities, and shall include results of no
more than three (3) preceding calendar years prior to audit
notification.
(c) Such audit shall not occur more frequently than once per calendar
year nor more frequently than once with respect to records covering
any specific period of time. Notwithstanding the preceding, if
Memory reasonably believes, after reviewing information received
from Roche's independent public accountant, that an additional audit
is appropriate to address an apparent discrepancy between Roche's
returns and other information as is necessary for reporting
hereunder, Memory shall have the right, by an audit specialty firm
reasonably acceptable to Roche, employed by Memory and at Memory's
own expense, to perform such appropriate audit procedures.
(d) The use of all information, data, documents and abstracts referred
above shall be for the sole purpose of verifying statements or
compliance with this Agreement, shall be treated as Roche
Confidential Information subject to Article 15 of this Agreement
and, except in the event of a dispute between the Parties regarding
amounts payable hereunder or the results of any audit, need not be
retained more than three (3) years from the end of the
[*] CONFIDENTIAL TREATMENT IS REQUESTED
calendar year to which each shall pertain. Audit results shall be
shared by Roche and Memory.
(e) If any audit hereunder reveals an underpayment, Roche shall promptly
make up such underpayment. If any audit hereunder reveals an
overpayment, Memory shall promptly reimburse such overpayment.
Memory shall bear the full cost of any audit under this Section 6.5,
unless such audit discloses an underpayment by Roche of more than
[*] percent ([*]%) of the amount owed hereunder if Net Sales exceeds
[*] dollars ($[*]) in the Territory for the calendar year, or [*]
percent ([*]%) of the amount owed hereunder if Net Sales are equal
to or less than [*] dollars ($[*]) in the Territory for the calendar
year, in which case Roche shall bear the full cost of such audit as
performed by Roche's independent, certified public accountant and
any audit specialty firm employed by Memory, together with interest
on any such underpayment from the date otherwise due through the
date of payment at the rate set forth in Section 6.2.
(f) The failure of Memory to request verification of any payment
calculation during which corresponding records are required to be
retained under this Section 6.5 shall be considered acceptance of
such reporting by Memory.
ARTICLE 7. THE RESEARCH COLLABORATION
7.1 The Research Collaboration
(a) The Parties agree to conduct a Research Collaboration in accordance
with the Research Workplan. The goal of the Research Collaboration
shall be to (1) deliver to Roche an IND package for the lead Memory
Compound MEM1414 and (2) identify back-up and follow-up Memory
Compounds and Collaboration Compounds for MEM1414, and identify a
lead compound for depression, as well as back-up compounds.
(b) (i) The original term of the Research Collaboration shall be
for a period of two (2) years from the Effective Date of
this Agreement ("Original Term"), unless this Agreement is
terminated sooner in accordance with Article 16. Except as
provided in Article 16, neither Party may terminate the
Research Collaboration.
(ii) The Original Term of the Research Collaboration may be
extended by mutual written agreement prior to the expiration
of the Original Term. During such extension, the Research
Collaboration will explore potential applications of
Products for other therapeutic areas such as respiratory
disease, in addition to those goals of the Original Term.
(iii) The total time period during which the Research
collaboration is ongoing, including any extensions of the
Original Term, is the "Research Term."
7.2 Joint Liaison Team. A Joint Liaison Team ("JLT") shall govern the Research
Collaboration by overseeing two subteams: (1) a subteam for developing an
IND package for the lead compound MEM1414 and (2) a subteam for developing
back-up and follow-up compounds for Neurological Indications; developing
lead compounds for Psychiatric Indications as well as back-up compounds
for Psychiatric Indications; and commencing to explore potential
applications of Memory Compounds and Collaboration Compounds for other
therapeutic areas such as respiratory disease.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
(a) Organization. The JLT shall consist of six (6) members, three (3)
members to be designated by Roche and three (3) members to be
designated by Memory. Each Party shall notify the other Party of the
member(s) designated by such Party, in writing, within thirty (30)
days after the Effective Date. The Committee shall function only
during the Research Term unless otherwise agreed by the Parties. Any
Party may withdraw the designation of any of its members of the JLT
and designate a replacement at any time by giving prior written
notice of the withdrawal and identifying the replacement to the
other Party. The chairperson of the JLT shall be from Roche.
(b) Meetings. The JLT shall hold quarterly meetings on mutually
agreeable dates during the Research Term, with the location of the
meetings to alternate between Memory and Roche, or their
Affiliate's, facilities. The frequency and location of such meetings
may be modified by mutual agreement of the Parties. Notwithstanding
the foregoing, two of the quarterly meetings per year may be held by
videoconference. Each Party shall pay its own expenses associated
with the meeting. Each Party may, in its discretion, invite
non-member employees ("invitee") to attend meetings of the JLT.
The JLT shall meet in January, 2003 to analyze relevant study
reports from the CROs, as contemplated by Section 4.2.
The JLT shall meet in January, 2003 to decide if MEM1414 is a
Clinical Candidate.
(c) Decision-Making. Decisions of the JLT shall be by consensus, with
each Party having one collective vote. If the JLT is unable to
decide a matter by consensus, the Parties shall refer such matter
for resolution to the Head of Global Research on behalf of Roche and
the Chief Scientific Officer of Memory ("Research Collaboration
Executives"). If the Research Collaboration Executives are unable to
resolve any such matter after good faith discussions, then the final
decision shall rest with Roche, provided that no such decision on
any matter may have the effect of increasing the economic burdens,
including FTE burdens of Memory (except for any increases which in
the aggregate are immaterial).
7.3 Research Support. For the Original Term, Roche shall pay to Memory a total
of seven million dollars (US $7,000,000), which amount shall be
non-refundable and non-creditable, and which will be due and payable in
eight (8) equal installments of eight hundred and seventy five thousand
dollars (US $875,000) per installment, each installment due and payable
within thirty (30) days after (1) the first day of each calendar quarter
during the Original Term and (2) receipt by Roche of an invoice for such
sums. If the Effective Date of this Agreement is July 31, 2002, the first
payment and the last payment under this Section shall be due and payable
respectively within thirty (30) days after (1) October 1, 2002/July 1,
2004 and (2) receipt by Roche of an invoice for such sum.
7.4 Research Collaboration Activities. Subject to the oversight of the JLT,
during the Research Term each Party shall diligently conduct, at its cost
except as provided in Section 7.3, those research activities that are
assigned in the Research Workplan. At no cost to Roche, except as provided
for in Sections 4.2 and 7.3, Memory shall use all reasonable best efforts
to maintain in full force and effect all agreements and relationships with
Third Parties in effect as of the Effective Date so that there is no
interruption in the development of an IND package for MEM1414 during any
transition from Memory to the JLT.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
7.5 Progress Reports. At least fifteen (15) days prior to each quarterly
meeting of the JLT, each subteam shall prepare written progress reports
for the JLT summarizing progress to date in achieving the primary goals
for the Research Collaboration, including an inventory of Collaboration
Compounds, Collaboration Technology and Memory Compounds. Following each
such meeting, the JLT shall prepare a report summarizing the discussions
held and conclusions reached and setting forth plans for the Research
Collaboration for the next three (3) months.
7.6 Acknowledgement of Obligations. Each Party will cause each of its and its
Affiliates FTEs, as specified in the Research Workplan, prior to and as a
condition of becoming a member of the Research Collaboration, to review
and acknowledge in writing that they understand and agree to abide by the
terms and conditions of this Agreement related to the Research
Collaboration (Article 7), Intellectual Property (Article 13),
Confidential Information (Article 15, specifically as related to
non-disclosure and non-use restrictions).
7.7 Screening. During the Agreement Term Roche shall have the right to use
Memory Compounds and Collaboration Compounds in Roche screening assays.
ARTICLE 8. CLINICAL DEVELOPMENT
8.1 Development. Roche, at its sole cost, shall (1) pursue clinical
development of Products and (2) obtain all government and health authority
approvals which are required for Products to be manufactured and offered
for sale in the Territory, including authorizations as may be required for
the production, importation, pricing, reimbursement, and sale of Products
in the Territory.
8.2 Development Review Team.
(a) Development Review Team Membership. For given Product, no later than
thirty (30) days after development of an IND filing package for the
Product, the Parties shall establish a Development Review Team
consisting of up to three (3) representatives from Roche and one (1)
representative of Memory. Each Party may select alternative
representatives to replace its Development Review Team members
selected by such Party as necessary, and may have other
representatives attend meetings of the Development Review Team in
addition to the representatives of the Team. All guidance provided
by the Development Review Team shall be based upon the majority
opinion of the Development Review Team.
(b) Development Review Team Meetings and Responsibilities. No less than
two times per year for so long as the Development Review Team
contemplates clinical development of a Memory Compound or
Collaboration Compound in the Territory for the purpose of obtaining
Regulatory Approval in a country of the Territory, Roche shall
organize meetings of the Development Review Team.
At its meetings, the Development Review Team shall conduct a peer
review of Roche's development of Products in the Territory and shall
provide Roche with strategic guidance with respect to Roche's
development of Products in the Territory.
Roche shall report to the Development Review Team on all significant
clinical and regulatory issues relating to Products, and the
Development Review Team shall make recommendations and provide
strategic guidance with respect to such issues.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
(c) Costs. Each party shall be responsible for bearing its own costs
related to the Development Review Team.
ARTICLE 9. REGULATORY AFFAIRS
Roche, at its sole cost, shall pursue all regulatory affairs in the Territory
related to Product, including the preparation and filing of applications for
Regulatory Approval, as well as any or all governmental approvals required to
manufacture, or have manufactured, and sell Products. Roche shall be responsible
for pursuing, compiling and submitting all regulatory filing documentation, and
for interacting with regulatory agencies, for all Products in all countries in
the Territory. Roche or its Affiliates shall own and file all regulatory filings
and Regulatory Approvals for all Products in all countries of the Territory.
Roche shall supply Memory with a copy of all material communications related to
Product to or from the regulatory agencies for all Major Market Countries (other
than China and Korea). Upon request of Memory, Roche shall supply Memory with a
copy of all such communications in all countries.
Roche, at its sole cost, shall report to appropriate authorities in accordance
with local requirements all adverse events related to use of Products worldwide.
Adverse events related to the use of Product worldwide shall be in a single
database, centralized, held and owned by Roche. Roche shall notify Memory of
material adverse events related to Products.
ARTICLE 10. MANUFACTURE AND SUPPLY
10.1 Clinical Supplies of Product. Roche understands and acknowledges that as
of the Effective Date, pursuant to an agreement with Memory, Medichem
Research Inc. is providing Phase I clinical supply of MEM1414. Beyond the
clinical supply provided by Memory through Medichem, Roche shall supply at
its own cost all clinical supply of Product and placebo to be used in the
Territory during the Agreement Term, either by itself, or through a Third
Party. Memory shall use all reasonable best efforts to maintain in full
force and effect all agreements and relationships with Third Parties in
effect as of the Effective Date so Roche has uninterrupted access to
non-clinical and Phase I clinical supply prior to and during any
manufacturing transition from Memory to Roche during the Agreement Term,
at no cost to Roche. In addition, Memory shall use its reasonable best
efforts to cause transfer of a manufacturing transfer package to Roche to
enable to Roche commence manufacture of MEM1414 in a timely manner.
10.2 Commercial Supply. Roche shall be solely and exclusively responsible at
its own expense for the manufacture and supply of Product for sale in the
Territory, either by itself or through Third Parties.
ARTICLE 11. COMMERCIALIZATION
11.1 Responsibilities of Roche. Except as expressly set forth in Section 2.3
and Section 3.1, Roche, at its own expense, shall have sole responsibility
and decision making authority for the marketing, promotion, sale and
distribution of Product in the Territory. During the Agreement Term, upon
written request of Memory not to exceed once per year, Roche will fully
inform Memory regarding the commercialization of Products in the Territory
by Roche, its Affiliates and sublicensees.
ARTICLE 12. TRADEMARKS
[*] CONFIDENTIAL TREATMENT IS REQUESTED
Roche shall own worldwide all trademarks on and in connection with Products, and
shall, at its cost, be responsible for procurement, maintenance and enforcement
of all worldwide trademarks registration on and in connection with Products.
ARTICLE 13. OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
13.1 Ownership of Intellectual Property.
As between the Parties, Memory shall own all Memory Inventions, Roche
shall own all Roche Inventions, and Memory and Roche shall jointly own all
Joint Inventions. Except to the extent any Collaboration Technology is
exclusively licensed by one Party to the other Party hereunder, each Party
shall have the right to practice Collaboration Technology, including
Inventions, and to grant licenses to Affiliates and Third Parties to such
Collaboration Technology, without the other party's consent and without
any duty to account to the other Party with respect thereto. Each Party
shall require all of its employees to assign all inventions related to
Products made by them to such Party.
13.2 Patent Prosecution and Maintenance.
(a) Base Patents. Memory shall have the right, but not the obligation,
to prepare, file, prosecute (including interference and opposition
proceedings) and maintain (including interferences, re-examination
and opposition proceedings) (collectively, "Handle") the Base
Patents.
Memory shall use reasonable efforts to consult with Roche as to the
Handling of the Base Patents in sufficient time (for example 30 days
for instances where actions are due within 3 months of a
communication from a Patent Office) before any action is due to
allow Roche to provide comments thereon, which comments Memory must
reasonably consider if provided to Memory at least thirty (30) days
before such action is due.
Should Memory decide that it does not desire to Handle a Base Patent
in a given country, it shall provide written notice to Roche thereof
no less than sixty (60) days prior to the date when the Base Patent
would become abandoned in such country. After receiving such notice,
Roche may, but is not obligated, to Handle the Base Patent in such
country.
(i) Except as provided in Section 13.2 (a)(ii) and (iii) below,
Memory shall be responsible for payment of the reasonable
costs to Handle the Base Patents.
(ii) Roche will assume and pay for the reasonable costs to Handle
any given Base Patents as described in Schedule A as Memory 1,
2 and 3 in Europe from and after national phase entry in
Europe. For a given Base Patent as described in Schedule A as
Memory 1, 2 and 3 no less than three (3) months before PCT
national phase entry, Roche shall provide to Memory in writing
a list of countries, other than the US and Europe, for which
Roche requests that a national phase entry be filed ("Other
Countries"). Unless the Parties otherwise agree after
discussion in good faith, such list shall include Japan and
additional countries, consistent with Roche's practices for
Roche's other potential products. Roche shall be responsible
for the payment of the reasonable costs to Handle the Base
Patents as described in Schedule A as Memory 1, 2 and 3 in the
Other Countries.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
(iii) For a given Base Patent in a given country for which Roche
shall be responsible under Section 13.2(a)(ii) for the payment
of the reasonable costs to Handle such Base Patent, Roche may
elect, at its option, to discontinue the payment of such
costs, upon giving at least ninety (90) day's prior written
notice to Memory. At Memory's request, Roche shall advise to
the specific reasons for such decision. Memory may, in its
sole discretion, continue to Handle such Base Patent in such
country, at its own expense. If, however, a Valid Claim of
such Base Patent Covers a Product in such country in which
Roche Launches the Product, Roche shall reimburse Memory for
all reasonable costs to Handle such Base Patent with respect
to such country.
(b) Inventions.
(i) Priority Applications. Each Party promptly will notify the
other Party in writing ("Patent Notice") of any Inventions on
which it intends to file a patent application.
Within sixty (60) days after receipt of the Patent Notice, the
Parties shall agree upon which Party shall prepare and file a
priority application ("Invention Priority Application")
Covering such Invention. As a general rule, Memory shall
prepare and file an Invention Priority Application Covering
Memory Inventions and Roche shall prepare and file an
Invention Priority Application Covering Roche Inventions. For
a Joint Invention, if both Parties wish to have an Invention
Priority Application filed, then the Parties shall agree upon
a mutually acceptable external patent counsel for such
activity.
For purposes of this Article, the Party preparing and filing
an Invention Priority Application is a "Filing Party" and the
other Party is a "Non-Filing Party". For a Joint Invention,
the Parties shall agree which shall be the Filing Party and
which shall be the Non-Filing Party on a case-by-case basis.
(A) Subject to Subsection 13.2(b)(iii), and any other
provision in this Article 13, the Non-Filing Party will
reimburse the Filing Party for fifty percent (50%) of
the reasonable and documented external costs for
preparing, filing and prosecuting the Invention Priority
Application and maintaining any resulting Patent Rights
within forty-five (45) days of invoice by the Filing
Party;
(B) The Filing Party promptly will prepare and send to the
Non-Filing Party a draft of the Invention Priority
Application for the Non-Filing Party's comment and
approval; and
(C) The Non-Filing Party shall confirm receipt of the draft
Invention Priority Application and provide its comments
on the draft to the Filing Party within thirty (30) days
after receipt thereof ("Comment Period").
After reasonably considering the Non-Filing Party's comments,
the Filing Party shall file the Invention Priority
Application. If the Non-Filing Party fails to provide comments
on a draft within the Comment Period, the Filing Party shall
be free to file the Application at the end of the Comment
Period or later.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
If Non-Filing Party does not timely notify the Filing Party in
writing of interest in a Invention Priority Application, the
Filing Party shall be free to file the application at its sole
expense and discretion.
(ii) Corresponding Application in Foreign Countries. Within nine
(9) months after the filing of an Invention Priority
Application, the Filing Party shall provide the Non-Filing
Party a written list of countries ("Country List") in which
the Filing Party intends to file patent applications that
claim priority from the given Invention Priority Application.
The Non-Filing Party, as promptly as practicable, shall notify
the Filing Party in writing of those countries on the Country
List and any additional countries ("Additional Countries")
where the Non-Filing Party requests that patent applications
be filed. In turn, the Filing Party promptly shall notify the
Non-Filing Party if it agrees with the filing of applications
in such Additional Countries selected by the Non-Filing Party.
The Filing Party shall file patent applications at least in
those countries where the Non-Filing Party and the Filing
Party agree to the filing of patent applications ("Mutually
Agreed to Countries") as well as in Additional Countries
selected by the Non-Filing Party that are not within the
Mutually Agreed to Countries. The Filing Party shall have the
option of filing an international application designating at
least the Mutually Agreed to Countries, to be followed by
national filings in the desired countries.
The Filing Party shall be responsible for the filing and
prosecution of the patent applications and the maintenance of
the granted patents as to the Mutually Agreed to Countries.
Subject to the provisions of Section 13.2(b)(iii) as to the
Mutually Agreed to Countries, the Filing Party and the
Non-Filing Party each will pay fifty percent (50%) of the
reasonable external costs relating to the preparation, filing
and prosecution of the patent applications and the maintenance
of the granted patents.
As to those countries where the Non-Filing Party and the
Filing Party do not agree to the filing of patent
applications, the Party requesting the filing in said country
shall be responsible for all costs relating to the filing and
prosecution of the patent applications and the maintenance of
the granted patents in said countries.
Should the Non-Filing Party not respond to the Filing Party
within thirty (30) days after the date the Filing Party
provides the Country List, then the Filing Party shall be free
to initiate patent filings, at the Filing Party's sole expense
and discretion, in the countries the Filing Party has selected
or still selects.
The Filing Party's failure to notify the Non-Filing Party to
the contrary within thirty (30) days after the date upon which
the Non-Filing Party notifies the Filing Party of the
Additional Countries will be deemed an agreement on the part
of the Filing Party to file patent applications in all such
Additional Countries and to pay fifty percent (50%) of the
reasonable external costs associated with such filings.
(iii) Withdrawal of Funding/Lack of Further Interest. If, in a
country, at any time, the Non-Filing Party decides not to
continue funding the prosecution of a patent
[*] CONFIDENTIAL TREATMENT IS REQUESTED
application or maintenance of a patent under this Section
13.2, the Non-Filing Party shall notify the Filing Party in
writing ("Withdrawal Notice"), and the Non-Filing Party shall
be relieved from paying any further expenses with regard to
the patent filing in the country. After receiving the
Withdrawal Notice, the Filing Party may but is not obligated,
at its sole expense and discretion, to continue to prosecute
and maintain the patent filing in the country.
If, in a country, at any time, the Filing Party decides not to
continue the prosecution of a patent application or
maintenance of a patent under this Section 13.2, and such
patent application or patent is not one as to which the
Non-Filing Party has already sent a Withdrawal Notice, then
the Filing Party shall notify the Non-Filing Party in writing
no less than sixty (60) days prior to the date when the patent
application or patent would become abandoned in such country.
At the Non-Filing Party's written request and no cost to the
Filing Party, the Filing Party shall then assign to the
non-Filing Party such patent application or patent in such
country, and the Non-Filing Party may thereafter continue to
prosecute and maintain the patent filing in the country, at
the Non-Filing Party's own cost and in the Non-Filing Party's
name, to the extent the Non-Filing Party desires to do so
To the extent the provisions of this Section 13.2(b)(iii)
conflict with any other provision of this Section 13.2, this
Section 13.2(b)(iii) shall control.
(iv) Copies of Communications with Patent Offices. For the Mutually
Agreed to Countries and Additional Countries, the Filing Party
shall consult with the Non-Filing Party as to the prosecution
and maintenance of all patent applications and patents
claiming Inventions in sufficient time (for example 30 days
for instances where actions are due within 3 months of a
communication from a Patent Office) before any action is due
to allow the Non-Filing Party to provide comments thereon,
which comments the Filing Party must reasonably consider.
13.3 Cooperation. The Parties agree to cooperate in the preparation,
prosecution and maintenance of all patent applications filed under Article
13, including obtaining and executing necessary powers of attorney and
assignments by the named inventors, providing relevant technical reports
to the filing Party concerning the invention disclosed in such patent
application, obtaining execution of such other documents which shall be
needed in the filing and prosecution of such patent applications,
discussing in good faith foreign filing strategy, and, as requested,
updating each other regarding the status of such patent applications.
13.4 Infringement. Each Party shall promptly provide written notice to the
other Party during the Agreement Term of any known infringement or
suspected infringement of any Memory Patent Right or Collaboration Patent
Right by a Third Party making, using, offering for sale, selling, or
importing a PDE4 inhibitor or a product containing a PDE4 inhibitor
(collectively "PDE4 Infringement").
Roche shall have the first right to bring and control any action or
proceeding with respect to such PDE4 Infringement at its own expense and
by counsel of its own choice, and Memory shall have the right, at its own
expense, to be represented in any such action by counsel of its own
choice. If Roche fails to bring any such action or proceeding with respect
to PDE4 Infringement within (a) [*] days following the notice of alleged
infringement or (b) [*] days before the time limit, if any, set forth in
the appropriate laws and regulations for the filing of such actions,
whichever
[*] CONFIDENTIAL TREATMENT IS REQUESTED
comes first, Memory shall have the right to bring and control any such
action at its own expense and by counsel of its own choice, and Roche
shall have the right, at its own expense, to be represented in any such
action by counsel of its own choice.
A Party that elects to bring and control an infringement action pursuant
to this Section 13.4 shall provide prompt written notice to the other
Party of any such suit commenced or action taken by such Party.
Upon written request, the Party bringing suit or taking action
("Initiating Party") shall keep the other Party informed of the status of
any such suit or action and shall provide the other Party with copies of
all substantive documents and communications filed in such suit or action.
The Initiating Party shall have the sole and exclusive right to select
counsel for any such suit or action.
The Initiating Party shall, except as provided below, pay all expenses of
the suit or action, including, without limitation, the Initiating Party's
attorneys' fees and court costs. After deducting the Parties' attorneys
fees and court costs in connection with any such suit or action, any
damages, settlement fees or other consideration received as a result of
such suit or action shall belong to the Initiating Party, except to the
extent such damages, settlement fees or other consideration are
attributable to lost profits with respect to Products in the Territory,
which shall form part of the Net Sales for determining amounts due to
Memory in any calendar year.
If the Initiating Party believes it reasonably necessary, upon written
request to the other Party, the other Party shall join as a party to the
suit or action but shall be under no obligation to participate except to
the extent that such participation is required as the result of its being
a named party to the suit or action. At the Initiating Party's written
request, the other Party shall offer reasonable assistance to the
Initiating Party at no charge to the Initiating Party except for
reimbursement of reasonable out-of-pocket expenses incurred by the other
Party in rendering such assistance. The other Party shall have the right
to participate and have its own representation in any such suit or action
at its own expense.
The Initiating Party shall have the right to control settlement; provided,
however, that no settlement shall be entered into without the written
consent of the other Party, not to be unreasonably withheld.
For the avoidance of doubt, Memory shall have the right, but not the
obligation, to bring and control and action or proceeding with respect to
any Memory Patent Right relating to infringement other than PDE4
Infringement, at its own expense, without obligation or notice to Roche.
13.5 Xxxxx-Xxxxxx. Notwithstanding anything to the contrary, should a Party
receive a certification for a Product pursuant to the Drug Price
Competition and Patent Term Restoration Act of 1984 (Public Law 98-417),
as amended, or its equivalent in a country other than the United States of
America, then such Party shall immediately provide the other Party with a
copy of such certification. Roche shall have [*] days from the date on
which it receives or provides a copy of such certification to provide
written notice to Memory ("H-W Suit Notice") whether Roche will bring
suit, at its expense, within a [*] day period from the date of such
certification. Should such [*] day period expire without Roche bringing
suit or providing such H-W Suit Notice, then Memory shall be free to
immediately bring suit in its name. If Roche brings suit, at Roche's
written request, Memory agrees to be named as a party to such suit.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
13.6 Patent Notices. All notices provided under this Article 13 to Roche shall
be given to:
X.Xxxxxxxx-Xx Xxxxx Ltd
Xxxxxxxxxxxxxxxxx 000
XX-0000 Xxxxx, Xxxxxxxxxxx
Attn: Head, Patent Law
with copies of all notices relating to U.S. cases to:
Xxxxxxxx-Xx Xxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Chief Patent Counsel.
All notices provided under this Article 13 to Memory shall be given to:
Memory Pharmaceutical Corp.
000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Head of Business Development
With copies of all notices to:
Millen, White, Xxxxxx and Xxxxxxxx, P.C.
Arlington Courthouse, Plaza I
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Esq.
ARTICLE 14. REPRESENTATIONS AND WARRANTIES
14.1 Representations and Warranties of Both Parties.
(a) Each Party warrants and represents to the other Party that it has
the full right and authority to enter into this Agreement and that
it is not aware of any impediment which would inhibit its ability to
perform the terms and conditions imposed on it by this Agreement.
(b) Each Party represents and warrants that all of its FTEs, as
specified in the Research Workplan, and its Affiliates FTEs, as
specified in the Research Workplan, have entered into an agreement
with it or its Affiliate assigning to it or its Affiliate all their
rights to Inventions.
14.2 Representations and Warranties of Memory.
(a) Corporate Action. Memory represents and warrants to Roche that all
corporate action on the part of Memory, its officers, directors and
stockholders necessary for (i) the authorization, execution and
delivery of this Agreement and (ii) the performance of all
obligations of Memory hereunder has been taken and this Agreement
constitutes the legal and binding obligation of Memory, enforceable
against Memory in accordance with its terms.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
(b) No Conflict. Memory represents and warrants to Roche that the
execution of this Agreement and the performance of the transactions
contemplated by this Agreement by Memory will not conflict with or
result in a breach of any of the terms, conditions or provisions of,
or constitute a default under any agreement or other instrument to
which Memory is a party or by which it or any of its property is
bound.
(c) Right to Grant Licenses. Memory represents and warrants to Roche
that it has the right to xxxxx Xxxxx the licenses and sublicenses
that Memory hereby grants to Roche under this Agreement.
(d) Third Party Patent Infringement. Memory represents and warrants that
as of the Effective Date, to its actual knowledge of its senior
executives, after consultation with patent counsel, there is no
issued patent right owned or controlled by any Third Party which
Covers the lead compound identified by Memory to Roche (MEM1414) and
would prevent Roche from selling such Memory Compound in any country
of the Territory. As of the date hereof, the Base Patents are owned
exclusively by Memory and Memory's senior executives, after
consultation with patent counsel, have no actual knowledge of any
information that would, in their opinion, render invalid and/or
unenforceable Composition of Matter Claims for MEM1414 in such Base
Patents.
(e) No Material Mistatements. Memory warrants and represents to Roche
that (i) its senior executives have not intentionally failed to
disclose any information actually known to them which in their
reasonable opinion, would be material to Roche entering into this
Agreement, and to the actual knowledge of such senior executives
such information does not contain any untrue statement of material
fact or omit to state a material fact; (ii) it has provided correct
and complete copies of all documents furnished to Roche.
14.3 Representations and Warranties of Roche. Roche represents and warrants to
Memory that all corporate action on the part of Roche, its officers,
directors and stockholders necessary for (i) the authorization, execution
and delivery of this Agreement and (ii) the performance of all obligations
of Roche hereunder has been taken and this Agreement constitutes the legal
and binding obligation of Roche, enforceable against Roche in accordance
with its terms. The execution of this Agreement and the performance of the
transactions contemplated by this Agreement by Roche will not conflict
with or result in a breach of any of the terms, conditions or provisions
of, or constitute a default under any agreement or other instrument to
which Roche is a party or by which it or any of its property is bound.
14.4 Disclaimer. THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF
ALL OTHER REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN.
MEMORY AND ROCHE DISCLAIM ALL OTHER REPRESENTATIONS AND WARRANTIES,
WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH OF THEIR RESEARCH,
DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER, INCLUDING, WITHOUT
LIMITATION, WHETHER THE PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR
MARKETED, THE ACCURACY, PERFORMANCE, UTILITY, RELIABILITY, TECHNOLOGICAL
OR COMMERCIAL VALUE, COMPREHENSIVENESS, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS. IN NO EVENT SHALL EITHER
MEMORY OR ROCHE BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT BASED ON CONTRACT,
TORT OR ANY OTHER LEGAL THEORY.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
ARTICLE 15. CONFIDENTIAL INFORMATION
15.1 Treatment of Confidential Information. In carrying out rights and
obligations under this Agreement, the Parties will be sharing proprietary
information ("Confidential Information") with each other. Except as
permitted by this Agreement, each Party shall and shall cause its
Affiliates to treat Confidential Information received from the other Party
as it treats its own proprietary information. In particular, it shall not
disclose, divulge or otherwise communicate such Confidential Information
to Third Parties, or use it for any purpose except pursuant to and in
order to carry out its obligations under this Agreement during the
Agreement Term and for a period of [*] years thereafter; provided that,
each Party (i) may disclose the Confidential Information to such of its
directors, officers, employees, Affiliates, consultants, subcontractors,
sublicensees or agents to the extent reasonably necessary to carry out its
obligations under this Agreement, and (ii) hereby agrees to exercise every
reasonable precaution to prevent and restrain the unauthorized disclosure
or use of Confidential Information.
15.2 Release from Restrictions. The provisions of Section 15.1 shall not apply
to any Confidential Information which:
(a) was known or used by the Receiving Party or its Affiliates prior to
its date of disclosure to the Receiving Party or its Affiliates by
the Disclosing Party or its Affiliates, as evidenced by the prior
written records of the Receiving Party or its Affiliates; or
(b) either before or after the date of the disclosure to the Receiving
Party or its Affiliates, is lawfully disclosed to the Receiving
Party or its Affiliates by a Third Party rightfully in possession of
the Confidential Information; or
(c) either before or after the date of the disclosure to the Receiving
Party or its Affiliates, becomes published or generally known to the
public through no fault or omission on the part of the Receiving
Party or its Affiliates, but such inapplicability applies only after
such information is published or becomes generally known; or
(d) is independently developed by the Receiving Party or its Affiliates
without reference to or reliance upon any Confidential Information
of the Disclosing Party or its Affiliates; or
(e) is reasonably determined to be required to be disclosed by the
Receiving Party or its Affiliates to comply with applicable
securities of other laws, to defend or prosecute litigation or to
comply with governmental regulations, provided that, the Receiving
Party or its Affiliates uses all reasonable efforts to provide prior
written notice of such disclosure to the Disclosing Party or its
Affiliates and to take reasonable and lawful actions to not be
required to disclose and/or minimize the degree of such disclosure.
(f) is disclosed to a Party's financial sources or potential acquirors
of its stock or assets (directly or indirectly) so long as, with
respect to a potential purchase the potential acquirer or financial
source executes a confidentiality agreement which is at least as
restrictive as the provisions of this Article 15.
15.3 Exceptions. The restrictions set forth in this Article 15 shall not
prevent either Party from (i) preparing, filing, prosecuting or
maintaining a patent application or its resulting patents related to a
Product in accordance with the terms of this Agreement or (ii) disclosing
Confidential Information to governmental agencies to the extent required
or desirable to secure government approval for the development or
marketing of a Product.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
15.4 Publications. During the Agreement Term, the following provisions shall
apply with respect to the disclosure in scientific journals, publications
or scientific presentations by any Party relating to any scientific work
performed as part of the Research Collaboration:
(a) A Party (the "Publishing Party") shall provide the other Party with
a copy of any proposed publication relating to the work performed
and/or the results achieved in the conduct of the Collaboration at
least forty-five (45) days prior to submission for publication so as
to provide such other Party an opportunity to recommend any changes
it reasonably believes are necessary to preserve the Confidential
Information belonging in whole or in part to such other Party, and
the incorporation of such recommended changes shall not be
unreasonably refused;
(b) If such other Party in writing notifies ("Notice") the Publishing
Party, within forty-five (45) days of receipt of the copy of the
proposed publication, that such publication in its reasonable
judgment (i) contains an Invention for which the other Party
reasonably desires patent protection or (ii) disclosure to
competitors could be expected to have a material adverse effect on
the commercial value of any Confidential Information, the Publishing
Party shall prevent such publication or delay such publication for a
mutually agreeable period of time. In the case of Inventions, a
delay shall be for a period reasonably sufficient to permit the
timely preparation and filing of a patent application(s) or
application(s) on the Invention, and in no event less than ninety
(90) days from the date of Notice.
ARTICLE 16. TERM AND TERMINATION
16.1 (a) Conditions Subsequent. The effectiveness of this Agreement and the
transaction contemplated hereunder shall be subject to and shall be
contingent upon the satisfaction under the following condition
subsequent to the execution of this Agreement by February 28, 2003.
The condition subsequent shall be the earlier to occur of (i)
approval of the transaction by the Federal Trade Commission or the
appropriate US anti-trust authorities or (ii) the expiration or
termination of all applicable waiting periods, requests for
information ( and any extensions thereof) under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
Subject to the terms and conditions of this Agreement, each Party
shall use all reasonable efforts to take, or cause to be taken, all
reasonable actions and to do, or cause to be done, all things
necessary and appropriate to satisfy the condition subsequent and to
consummate the transactions contemplated by this Agreement in
accordance with the terms hereof.
Each Party shall cooperate with the other Party in the preparation,
execution and filing of all documents that are required or permitted
to be filed on or before the Effective Date for the purpose of
consummating this transaction, including, filings pursuant to the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976. Each Party
shall bear its own costs with respect to preparing, executing and
filing such documents.
(b) Agreement Term. The Agreement Term shall commence on the Effective
Date and end, unless earlier terminated upon the mutual agreement of
the Parties or in accordance with the provisions of this Article 16,
on the date of expiration of all royalty and other payment
obligations (the "Expiration Date") under this Agreement. Upon the
occurrence of the Expiration Date, if any, the licenses granted to
Roche by Memory
[*] CONFIDENTIAL TREATMENT IS REQUESTED
under this Agreement to make, have made, use, offer for sale, sell
and import Products shall be fully paid-up.
16.2 Termination for Breach. (a) Each Party ("non-breaching Party") shall be
entitled to terminate this Agreement by written notice to the other Party
("breaching Party") in the event that the breaching Party is in default of
any of its material obligations hereunder and fails to remedy such default
within sixty (60) days (thirty (30) days for payment defaults) after
provision of written notice thereof by the non-breaching Party. Any such
notice shall specifically state that the non-breaching Party intends to or
reserves the right to terminate this Agreement in the event that the
breaching Party shall fail to timely remedy the default.
The effective date of termination under this Section for breach of a
material obligation shall be the date sixty (60) days after provision of
written notice thereof by the non-breaching Party.
In the event Roche does not pay any full payment by reason of a good faith
dispute as to whether such payment is due pursuant to the terms of this
Agreement, Memory shall not have the right to terminate this Agreement as
a result of such nonpayment until resolution of the dispute.
16.3 Roche's Right to Terminate. Beginning on the second anniversary of the
Effective Date, Roche shall have the unilateral right to terminate this
Agreement on a region-by-region basis (the regions being North America (US
and Canada), Europe and Japan) or Product-by-Product, either on a
worldwide basis or as to North America (US and Canada) only or ex-North
America only, at any time by providing six (6) months prior written notice
to Memory; provided, however, that if the Parties do not agree as to a
proposed sublicense for which Memory has withheld consent, Roche shall,
after the second anniversary, have a unilateral right to terminate this
Agreement for the territory to which such proposed sublicense relates.
Notwithstanding the preceding sentence, if there has been a launch of a
Product in a Major Market Country, then such prior notice must be for
twelve (12) months. The effective date of termination under this Section
shall be the date six (6) months (or twelve (12) months as the case may
be) after Roche provides such written notice to Memory. The first date
that Roche shall have a right to provide written notice to Memory of
intention to terminate this Agreement, in whole or in part, shall be the
date that is eighteen (18) months after the Effective Date.
Notwithstanding the above, Roche shall have the unilateral right to
terminate this Agreement in its entirety prior to the second anniversary
of the Effective Date only in the event that for each of the three
different Memory PDE4 inhibitor chemical series, Memory 1, 2 and 3 as seen
in Schedule A, a lead compound from each series, selected by the JLT,
fails to progress due to failure of each compound to pass GLP safety and
toxicity studies, defined as those GLP safety and toxicity studies
generally required by the FDA for entry into man.
16.4 Consequences of Termination.
Upon (a) any termination of this Agreement in its entirety pursuant to
Section 16.2, (b) termination of this Agreement by Roche of this Agreement
in its entirety or in a region or country or in respect of a Product
pursuant to Section 16.3, or (c) termination of this Agreement by Memory
in its entirety or in a region pursuant to Article 3, and rights and
licenses of any kind or nature granted by Memory to Roche under this
Agreement (or, as applicable, with respect to termination of this
Agreement as to a country, region or Product, respectively) shall
terminate on the effective date of termination, provided Roche shall
maintain a non-exclusive license to practice Collaboration Technology to
make, use and sell products other than PDE4 inhibitors. In the event of
any such termination, the following shall apply.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
(a) Roche shall, upon Memory's written request, assign and transfer to
Memory, or its Affiliates as requested by Memory, at no expense to
Memory, or its Affiliates, and free of any liens, pledges or
security interests other than those incurred in the
commercialization of the Product, all of Roche's right, title and
interest in and to (i) all trademarks and trademark applications
used or intended for use specifically for the relevant Product(s),
(ii) all regulatory filings (such as INDs and drug master files),
Regulatory Approvals, and clinical trial agreements (to the extent
assignable and not cancelled) for the relevant Product(s), and (iii)
all data, including clinical data, materials and information of any
kind or nature whatsoever, in Roche's possession or in the
possession of its Affiliates or its or their respective agents
related to the relevant Product(s) and (iv) all rights relating to
the infringement of Memory Patent Rights and Collaboration Patent
Rights, related to the relevant Product(s). Without limiting the
generality of the preceding sentence, Memory shall, upon such
transfer, have the right to disclose such filings, approvals and
data to (i) governmental agencies of the country or region to the
extent required or desirable to secure government approval for the
development, manufacturing or sale of Product in the country or
region, (ii) Third Parties acting on behalf of Memory, its
Affiliates or sublicensees, to the extent reasonably necessary or
desirable for the development, manufacture, or sale of Product in
the country or region, and (iii) Third Parties to the extent
reasonably necessary or desirable to market Product in the country
or region. All such filings, approvals and data transferred to
Memory pursuant to this Section 16.4 shall be deemed to be Memory
Confidential Information.
(b) In addition, for a given Product and country or region so
terminated, or for the Territory in the case of termination of this
Agreement in its entirety, Roche hereby grants to Memory a sole and
exclusive, non-royalty bearing fully paid-up license, under Roche
intellectual property (including Collaboration Technology and Patent
Rights Covering Collaboration Technology and Collaboration
Compounds, and including any trademarks used or intended for use in
connection with the sale of Product), to make, have made, use, offer
for sale, sell and import such Product(s) in such country, region or
the Territory, as applicable.
(c) Roche shall supply, or cause to be supplied, to Memory, upon
Memory's written request, Memory or its licensee's clinical and/or
commercial requirements of Product(s), pursuant to a supply
agreement to be negotiated in good faith by the parties, provided
that (i) such requirements shall be supplied to Memory or its
licensee at Roche's direct manufacturing costs and allocation of
manufacturing overhead, and (ii) Roche's supply obligation shall not
continue for more than [*] years after such termination, and (iii)
Roche shall maintain the same Product(s) quality and specifications
as immediately prior to notice of termination, and (iv) as to other
terms, such agreement shall be reasonably consistent with Roche's
other arm's length supply agreements, and (v) Memory shall use
reasonable best efforts to effect a transfer as soon as practicable
of Product(s) manufacturing activities from Roche to another
supplier. In addition, Roche shall also transfer to Memory and its
designated supplier a manufacturing transfer package that will
enable Memory or such designated supplier to manufacture the
Product(s) in a timely manner.
Roche shall take prompt actions, including the execution of such
instruments, agreements and documents, as are necessary or desirable to
effect the foregoing. It is agreed such transfers and actions shall be
completed in a manner that will permit Memory to continue without
interruption the business of developing, manufacturing, marketing and
selling the Product(s).
[*] CONFIDENTIAL TREATMENT IS REQUESTED
16.5 Royalty and Payment Obligations. Termination of this Agreement by either
Party for any reason will not release Roche from any obligation to pay
royalties or make any payments to Memory which were accrued prior to the
effective date of termination (including for sales made and Events
achieved under Article 4, prior to the date of termination). However,
termination of this Agreement by either Party for any reason will release
Roche from any obligation to pay royalties or make any payments to Memory
which would have otherwise become accrued after the effective date of
termination.
16.6 Termination for failure to satisfy the condition subsequent. Either Party
may terminate this Agreement in its entirety, upon ten (10) days prior
written notice to the other Party if the condition subsequent under
Section 16.1a has not been fulfilled by February 28, 2003, in which case,
upon termination there shall be no liabilities for obligations on the part
of either party except that Article 15 shall survive such termination and
except for any breach of section 16.1(a).
16.7 Survival of Obligations. Section 2.2 (the last sentence only), Section 2.4
and Schedule C, Article 6 (except for Section 6.2), Section 7.6, Section
13.1, Article 15, Section 16.4, Section 16.5, Section 16.7, Article 17,
Article 18, and any definitions used in such Section of Article, shall
survive the termination of this Agreement in its entirety. Except for
obligation which clearly are not intended to continue in respect of a
partial termination (including the diligence obligation, and except as
provided in Section 16.5, royalty obligations), with respect to the
region, country or Product terminated, all obligations in this Agreement
shall survive a partial termination.
ARTICLE 17. ARBITRATION
Any dispute, controversy or claim ("Dispute") arising out of or in
relation to this Agreement, or the breach, termination or invalidity thereof,
that cannot be settled amicably by the Parties after a good faith discussion to
resolve the Dispute by the appropriate officers of the Parties, shall be
submitted by either Party to arbitration conducted in accordance with the rules
then in effect of the American Arbitration Association ("AAA"). Arbitration
shall take place in Newark, New Jersey and shall be conducted by three (3)
arbitrators, one of whom shall be designated by each Party, and the third
selected by the other two (2) arbitrators, all within the time limits
established by the then existing rules of the AAA. If the two (2) designated
arbitrators are unable to agree upon a third arbitrator by two (2) months after
submission of the matter to arbitration, the AAA shall select such third
arbitrator within three (3) months of such original submission. The written
decision of the arbitrators shall be final and binding on the parties and may be
enforced in any court having jurisdiction over the Parties or their current
assets. The award rendered by the arbitrators shall include the cost of
arbitration, reasonable attorneys' fees and reasonable costs for expert and
other witnesses, and in the event of a termination, in whole or in part, a
transition procedure, including the performance of transition services by Roche,
so as to maintain the value of the assets being transferred to Memory and, to
the extent contemplated by Section 16.4, permit Memory to conduct the business
being transferred to it. The parties shall be entitled to discovery as provided
in the Federal Rules of Civil Procedure. If the issues in dispute involve
scientific or technical matters, at least one of the arbitrators chosen
hereunder shall have educational training and/or experience sufficient to
demonstrate a reasonable level of knowledge in the Field and pharmaceutical drug
development. Notwithstanding the preceding provisions of this Article 17, with
respect to any breach or threatened breach of this Agreement of Section 15.1,
16.4 or any other provision where a Party would not be appropriately compensated
by the payment of money, a party has a right to seek injunctive relief from any
court of competent jurisdiction to enjoin such breach or threatened breach
and/or to seek specific performance.
In the event of a Dispute, a Party shall have no right to toll or delay any
obligation in this Agreement unrelated to the Dispute as a result of the
Dispute. By way of example, if Roche owes Memory
[*] CONFIDENTIAL TREATMENT IS REQUESTED
$5,000,000 and claims a $2,000,000 payment is not due by reason of breach of
Memory, then Roche shall pay the $5,000,000, and the parties will resolve such
$2,000,000 Dispute pursuant to Article 17.
ARTICLE 18. MISCELLANEOUS
18.1 Indemnification.
(a) Roche agrees to defend Memory and the other Memory Indemnified
Parties at Roche's cost and expense, and will indemnify and hold
Memory and its directors, officers, employees and agents (the
"Memory Indemnified Parties") harmless from and against any claims,
losses, costs, damages, fees or expenses arising out of or otherwise
relating to (i) activities of Roche and its Affiliates in the
conduct of the Collaboration, (ii) the development, manufacture,
use, offer for sale, sale or other disposition of any Product or
Non-Memory Compound by Roche, its Affiliates or sublicensees, and
each of their distributors, representatives or anyone in privity
therewith, or (iii) the gross negligence or willful misconduct of
Roche, its Affiliates or sublicensees. In the event of any such
claim against the Memory Indemnified Parties by a Third Party,
Memory shall promptly notify Roche in writing of the claim (provided
that any failure or delay to notify shall not excuse any obligations
of Roche except to the extent Roche is actually prejudiced thereby)
and Roche shall solely manage and control, at its sole expense, the
defense of the claim and its settlement provided further that Roche
shall not settle any such claim, if such settlement may have an
adverse effect on Memory, without the prior written consent of
Memory, which consent shall not be unreasonably withheld. The Memory
Indemnified Parties shall cooperate with Roche and may, at their
option and expense, be represented in any such action or proceeding.
Roche shall not be liable for any litigation costs or expenses
incurred by the Memory Indemnified Parties without Roche's written
authorization.
(b) Memory agrees to defend Roche and the other Roche Indemnified
Parties at Memory's cost and expense, and will indemnify and hold
Roche and its directors, officers, employees and agents (the "Roche
Indemnified Parties") harmless from and against any claims, losses,
costs, damages, fees and expenses arising out of any claim, arising
out of or otherwise relating to (i) activities of Memory in the
conduct of the Collaboration, (ii) the development, manufacture,
use, offer for sale, sale or other disposition of any Product by
Memory, its Affiliates, licensees other than Roche, sublicensees and
each of their distributors, representatives or anyone in privity
therewith (but only to the extent same is a consequence of Section
2.5, Article 3 and/or 16), and (iii) the gross negligence or willful
misconduct of Memory, its Affiliates, licensees, distributors,
representatives or anyone in privity therewith. In the event of any
such claim against the Roche Indemnified Parties by an Independent
Third Party, Roche shall promptly notify Memory in writing of the
claim (provided that any failure or delay to notify shall not excuse
any obligation of Memory except to the extent Memory is actually
prejudiced thereby) and Memory shall solely manage and control, at
its sole expense, the defense of the claim and its settlement
provided further that Memory shall not settle any such claim if such
settlement may have an adverse effect on Roche without the prior
written consent of Roche, which consent shall not be unreasonably
withheld. The Roche Indemnified Parties shall cooperate with Memory
and may, at their option and expense, be represented in any such
action or proceeding. Memory shall not be liable for any litigation
costs or expenses incurred by the Roche Indemnified Parties without
Memory's written authorization.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
18.2 Publicity. Neither Party shall originate any publicity, news release or
other public announcement, written or oral, relating to this Agreement,
including its terms, without the prior approval of the other Party except
solely to the extent a Party reasonably believes same is otherwise
required by law. Such approval shall not be unreasonably withheld. Each
Party shall to the extent consistent with applicable laws and regulations
limit the disclosure of the financial terms set forth in this Agreement
(such as by requesting confidential treatment of such terms in documents
required to be filed with the US Securities and Exchange Commission).
18.3 Force Majeure. Neither Party to this Agreement shall be responsible to the
other Party for nonperformance or delay in performance of the terms or
conditions of this Agreement due to acts of God, acts of governments, war,
riots, strikes, accidents in transportation, or other causes beyond the
reasonable control of such Party, but such force majeure shall toll any
and all obligations and time periods for so long as such force majeure
continues.
18.4 Bankruptcy. All licenses (and to the extent applicable rights) granted
under or pursuant to this Agreement by Memory to Roche are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of Title 11, US
Code (the "Bankruptcy Code"), licenses of rights to "intellectual
property" as defined under Section 101(60) of the Bankruptcy Code. Unless
Roche elects to terminate this Agreement under Article 16, the Parties
agree that Roche, as a licensee or sublicensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and
elections under the Bankruptcy Code, subject to the continued performance
of its obligations under this Agreement.
18.5 Governing Law . This Agreement shall be governed by and interpreted in
accordance with the laws of New Jersey without giving effect to principles
of conflicts of law.
18.6 Waiver. The waiver by a Party of a breach or a default of any provision of
this Agreement by the other Party shall not be construed as a waiver of
any succeeding breach of the same or any other provision, nor shall any
delay or omission on the part of a Party to exercise or avail itself of
any right, power or privilege that it has or may have hereunder operate as
a waiver of any right, power or privilege by such Party.
18.7 Notices. Any notice or other communication in connection with this
Agreement must be in writing and may be given by any of the following
methods: (i) personal delivery against a signed receipt; (ii) registered
or certified mail, postage prepaid, return receipt requested; or (iii) by
overnight delivery service which obtains a signed receipt. Notice shall be
effective when delivered to the addressee at the address listed below or
such other address as the addressee shall have specified in a written
notice actually received by the addresser.
If to Memory:
Memory Pharmaceuticals Corp.
000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Head of Business Development
and
Xxxxx Xxxxxx Xxxxx Tischman Xxxxxxx & Xxxxx, P.A.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
[*] CONFIDENTIAL TREATMENT IS REQUESTED
Attn: Xxx X. Xxxxxxxxx, Esq.
If to Roche:
X.Xxxxxxxx-Xx Xxxxx Ltd
Xxxxxxxxxxxxxxxxx 000
XX-0000
Xxxxx, Xxxxxxxxxxx
Attn: Legal Department
and
Xxxxxxxx Xx-Xxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn.: Corporate Secretary
18.8 No Agency. Nothing herein shall be deemed to constitute either Party as
the agent or representative of the other Party. Each Party shall be an
independent contractor, not an employee or partner of the other Party.
Each Party shall be responsible for the conduct of activities at its own
facilities and for any liabilities resulting therefrom. Neither Party
shall be responsible for the acts or omissions of the other Party, and
neither Party will have authority to speak for, represent or obligate the
other Party in any way without prior written authority from the other
Party.
18.9 Entire Agreement. This Agreement and the Schedules hereto (which Schedules
are deemed to be a part of this Agreement for all purposes) contain the
full understanding of the Parties with respect to the subject matter
hereof and supersede all prior understandings and writings relating
thereto. No waiver, alteration or modification of any of the provisions
hereof shall be binding unless made in writing and signed by the Parties.
18.10 Headings. The headings contained in this Agreement are for convenience of
reference only and shall not be considered in construing this Agreement.
18.11 Severability. In the event that any provision of this Agreement is held by
a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, the
validity of the remaining provisions shall not be affected, and the
Parties shall negotiate a substitute provision that, to the extent
possible, accomplishes the original business purpose. During the period of
such negotiation, and thereafter if no substituted provision is agreed
upon, any such provision which is enforceable in part but not in whole
shall be enforced to the maximum extent permitted by law.
18.12 Assignment. Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by either Party without the prior written
consent of the other Party, except to an Affiliate of the assigning Party
or to any other party who acquires all or substantially all of the
pharmaceutical business of the assigning Party by merger, sale of assets
or otherwise, so long as such Affiliate or other party agrees in writing
to be bound by the terms of this Agreement. Notwithstanding the preceding,
if Memory assigns its rights and/or obligations under this Agreement to a
party who acquires all or substantially all of the pharmaceutical business
of Memory by merger, sale of assets or otherwise, then Memory's rights
under Section 2.3 shall become null and void.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
18.13 Successors and Assigns. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their successors and permitted assigns under Section 18.12.
18.14 Interpretation. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." All references
herein to Articles, Sections, and Schedules shall be deemed references to
Articles and Sections of, and Schedules to, this Agreement unless the
context shall otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed
in accordance with international accounting standards ("IAS"), as in
effect from time to time. Unless the context otherwise requires, countries
shall include territories.
18.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of such
together shall constitute one and the same instrument.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names by their properly and duly authorized officers or
representatives as of the dates below written.
MEMORY PHARMACEUTICALS CORP. XXXXXXXX-XX XXXXX INC.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------- -----------------------------------------
Title: Chief Executive Officer Title: VP, Global Head of Business Development
----------------------- --------------------------------------
X.XXXXXXXX-XX XXXXX LTD
By: /s/ Xxxx Xxxxxx
-----------------------------------------
Title: EVP, PL
--------------------------------------
By: Xx. Xxxxxxx Xxxx
-----------------------------------------
Title: Authorized Signatory
--------------------------------------
[*] CONFIDENTIAL TREATMENT IS REQUESTED
SCHEDULE A
MEMORY PATENT RIGHTS
I. MEMORY 1
A. U.S.
(a) First US provisional filed January 22, 2001 (60/262,651).
(b) Second US provisional filed February 8, 2001 (60/267,196).
(c) Third US provisional filed July 19, 2001 (60/306,140)
(d) A regular US patent application (10/051,309) was filed on
January 22, 2002, claiming priority to the above-mentioned
three US provisional applications.
B. PCT
An International PCT application (PCT/US02/01508) was also filed on
January 22, 2002, claiming priority to the above-mentioned three US
provisional applications.
C. Additional
(a) An application filed July 19, 2002
(b) A second application filed July 19, 2002
II. MEMORY 2
A. U.S.
(a) First US provisional filed February 8, 2001 (60/267,195)
(b) Second US provisional filed January 7, 2002 (60/344,824).
(c) A regular US patent application (10/067,996) was filed on
February 8, 2002, claiming priority to the above-mentioned two
US provisional applications.
(d) Possible Second US family to be filed; awaiting analysis from
MPC.
B. PCT
An International PCT application (no serial no issued yet) was also
filed on February 8, 2002, claiming priority to the above-mentioned
two US provisional applications.
III. MEMORY 3
A. U.S.
A first US provisional application (Memory 3 V1) was filed October
16, 2001 (60/329,314).
[*] CONFIDENTIAL TREATMENT IS REQUESTED
IV. MEMORY 4 (CYCLIC AMP PHOSPHODIESTERASE ISOFORM 4D7 AND METHODS OF USE)
A. U.S.
(a) First US provisional filed November 15, 2001 (60/331,422)
(b) Second US provisional filed January 23, 2002 (60/349,985).
V. MEMORY 5 (CYCLIC AMP PHOSPHODIESTERASE ISOFORMS AND METHODS OF USE)
A. U.S.
(a) U.S. provisional application filed June 25, 1999 (60/141,196
(b) A regular U.S. Patent Application was filed June 23, 2000
(09/602,735), claiming priority to the above-mentioned
provisional application.
B. PCT
An International Patent Application was filed June 23, 2000, and was
published January 4, 2001 (WO 01/00851). This application claims
priority the above-mentioned provisional application.
C. EP
A European Patent Application was filed December 21, 2001 claiming
priority to the above-mentioned provisional application and
International application (application EP 00944829.1; publication EP
1190070).
D. JP
A Japanese Patent Application was filed December 25, 2001 claiming
priority to the above-mentioned provisional application and
International application (JP 2001-506843).
E. AU
An Australian Patent Application was filed December 20, 2001
claiming priority to the above-mentioned provisional application and
International application (AU 58864/00).
F. CA
A Canadian Patent Application was filed December 20, 2001 claiming
priority to the above-mentioned provisional application and
International application (serial no. not yet issued).
G. MX
A Mexican Patent Application was filed December 25, 2001 claiming
priority to the above-mentioned provisional application and
International application (serial no. not yet issued).
[*] CONFIDENTIAL TREATMENT IS REQUESTED
SCHEDULE B
RESEARCH WORKPLAN
[*]
[*] CONFIDENTIAL TREATMENT IS REQUESTED
SCHEDULE C
USE OF NON-MEMORY COMPOUNDS
1 Development Event Based Payments. If Roche (alone or with its Affiliates)
develops a Non-Memory Compound for a Neurological Indication or a
Psychiatric Indication, then Roche shall pay Memory for such Non-Memory
Compound achieving the Events of Sections 4.3(a) and 4.3(b) as if such
Non-Memory Compound were a Product except (i) Roche shall pay [*] percent
([*]%) of such payments related to IND, Phase II and Phase III Events, and
(ii) [*] percent ([*]%) of all other payments provided under Section
4.3(a) and 4.3(b).
If Roche (alone or with its Affiliates) develops a Non-Memory Compound for
an Other Indication, then Roche shall pay Memory for such Non-Memory
Compound achieving the Events of Sections 4.3(c) as if such Non-Memory
Compound were a Product except (i) Roche shall pay [*] percent ([*]%) of
such payments related to IND, Phase II and Phase III Events, and (ii) [*]
percent ([*]%) of all other payments provided under Section 4.3(c).
Each payment in this Schedule C shall be due and payable by Roche within
thirty (30) days after occurrence of the applicable Event. Roche will make
each of such payments only once, for the first occurrence of a respective
Event, regardless of how many times the Event may be subsequently achieved
with a Non-Memory Compound. An Event shall be deemed to have occurred
regardless of whether a Product or a Non-Memory Compound first achieved
the Event.
2. ROYALTIES.
(a) Roche shall pay to Memory the following payments for a given product
containing a Non-Memory Compound having a Regulatory Approval in the
US for a Neurological Indication, based upon the net sales (defined
as in Section 1.30 but applied to the given product) of such product
in the US. Such royalty payments shall be calculated by multiplying
the following percentages by the following annual net sales of such
product in the US (all Net Sales amounts in $ US million):
ANNUAL US NET SALES PERCENT (%) OF NET SALES
------------------- ------------------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Notwithstanding the foregoing, if for such product there is
Regulatory Approval in the United States of America for a
Psychiatric Indication, but no Regulatory Approval in the US for a
Neurological Indication, then Roche shall pay to Memory the
following payments for such product, based upon the net sales of
such product in the US. Such royalty payments shall be calculated by
multiplying the following percentages by the following incremental
annual net sales of such product in the US (all Net Sales amounts in
$ US million):
ANNUAL US NET SALES PERCENT (%) OF NET SALES
------------------- ------------------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] CONFIDENTIAL TREATMENT IS REQUESTED
Notwithstanding the foregoing, if for such product there is no
Regulatory Approval in the US for a Neurological Indication or a
Psychiatric Indication, then Roche shall pay to Memory the following
payments for such product, based upon the net sales of such product
in the US. Such royalty payments shall be calculated by multiplying
the following percentages by the following incremental annual net
sales of such product in the US (all Net Sales amounts in $ US
million):
ANNUAL US NET SALES PERCENT (%) OF NET SALES
------------------- ------------------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
(b) Roche shall pay to Memory the following payments for a given product
containing a Non-Memory Compound having Regulatory Approval in
Europe for a Neurological Indication, based upon the net sales
(defined as in Section 1.30 but applied to the given product) of
such product in all countries in the ROW Territory. Such royalty
payments shall be calculated by multiplying the following
percentages by the following incremental annual worldwide net sales
of such product in the ROW Territory (all net sales amounts in $ US
million):
ANNUAL ROW TERRITORY NET SALES PERCENT (%) OF NET SALES
------------------------------ ------------------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Notwithstanding the foregoing, if for such product there is
Regulatory Approval in the Europe for a Psychiatric Indication but
no Regulatory Approval in Europe for a Neurological Indication,
then, Roche shall pay to Memory the following payments for such
product, based upon the net sales of such product in the ROW
Territory. Such royalty payments shall be calculated by multiplying
the following percentages by the following annual worldwide net
sales of such product in the ROW Territory (all net sales amounts in
$ US million):
ANNUAL ROW TERRITORY NET SALES PERCENT (%) OF NET SALES
------------------------------ ------------------------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Notwithstanding the foregoing, if for such product there is no
Regulatory Approval in the Europe for a Neurological Indication or a
Psychiatric Indication, then Roche shall pay to Memory the following
payments for such product, based upon the net sales of such product
in the ROW Territory. Such royalty payments shall be calculated by
multiplying the following percentages by the following incremental
annual net sales of such product in the ROW Territory (all Net Sales
amounts in $ US million):
ANNUAL ROW TERRITORY NET SALES PERCENT (%) OF NET SALES
------------------------------ ------------------------
[*] [*]
[*] CONFIDENTIAL TREATMENT IS REQUESTED
ANNUAL ROW TERRITORY NET SALES PERCENT (%) OF NET SALES
------------------------------ ------------------------
[*] [*]
[*] [*]
[*] [*]
Roche shall calculate and pay royalty payments to Memory under this
Schedule C commencing on the launch of the product in any country.
The net sales of a given country shall be included for purposes of
calculating royalties under this Section until the later of (i) ten
(10) years from the launch of such product in such country, or (ii)
expiration of the last to expire Memory Patent Right Covering the
product in country, after which time Roche's license from Memory for
such product shall be fully-paid up for such country.
All of the provisions of Article VI, including the timing of
payments and rights under Section 6.5, shall apply to the payments
required pursuant to this Schedule C.
There shall be no further adjustments to such royalty payments.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
