Exhibit 10.17
RESEARCH COLLABORATION AND LICENSE AGREEMENT
--------------------------------------------
This Research Collaboration and License Agreement (this "Agreement") is
entered into as of April 21, 1998 (the "Effective Date") by and between Phytera,
Inc. ("Phytera"), a Delaware corporation, and Galileo Laboratories, Inc.
("Galileo"), a California corporation.
R E C I T A L S
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WHEREAS, Phytera owns an inventory of distinct natural product extracts
("Extracts") derived from plant or marine microbes, including a library of [ ]*
such Extracts (the "Library") that is the subject matter of this Agreement
(Extracts from the Library are sometimes referred to herein as "Library
Extracts");
WHEREAS, Galileo has certain expertise related to the identification of
compounds and mixtures of compounds capable of modulating cell energy
metabolism; and
WHEREAS, Phytera wishes to provide its Library to Galileo for screening
and Galileo wishes to screen the Library in order to identify and develop
pharmaceutical agents for the treatment and prevention of ischemia in humans.
NOW, THEREFORE, Phytera and Galileo hereby each agree as follows:
1. Certain Definitions.
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1.1 "Affiliate" means any legal entity (such as a corporation,
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partnership, or limited liability company) that is controlled by a party. For
the purposes of this definition, the term "control" means (i) beneficial
ownership of at least fifty percent (50%) of the voting securities of a
corporation or other business organization with voting securities or (ii) a
fifty percent (50%) or greater interest in the net assets or profits of a
partnership or other business organization without voting securities.
1.2 "Assay" means tests, methods and know-how employed by Galileo to
-----
identify compounds or mixtures of compounds capable of modulating cell energy
metabolism.
1.3 "Candidate Compound" means a Lead Molecule or a compound
------------------
synthesized, identified or produced on the basis of a Lead Molecule that, in the
reasonable determination of the Steering Committee pursuant to Section 2.4 (i),
a) exhibits an in vitro activity and profile acceptable for Development, b)
exhibits an in vivo activity and profile in a relevant animal model of disease
acceptable for Development, c) is potentially patentable or otherwise
___________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
p.1
protectable and does not infringe the intellectual property rights of third
parties, d) is one for which a plausible manufacturing strategy can be devised,
and e) exhibits an acceptable therapeutic ratio in a 14-day toxicity model
compared to the efficacy dose required in an animal model of disease.
1.4 "Collaborative Research Program" means the collaborative research
------------------------------
program described in Article 3 of this Agreement.
1.5 "Committee" means the Steering Committee charged with oversight of
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the Collaborative Research Program, as described in Section 2.1 of this
Agreement.
1.6 "Confidential Information" means certain proprietary information
------------------------
which may be disclosed by either party to the other pursuant to this Agreement,
as described in Section 9.1 hereof.
1.7 "Development" or "Development Strategy" means the processes, steps
-------------------------------------
and activities required to advance the pre-clinical or clinical assessment of a
Candidate Compound as a potential product, either inside or outside the Field.
1.8 "Evaluation Period" means, for each distinct batch of Library
-----------------
Extracts delivered to Galileo, the period of time beginning when the batch is
delivered and ending when the Committee determines which Extracts from the batch
are to be designated as "Lead Extracts" in accordance with Section 3.6(c)
hereof.
1.9 "Field" means pharmaceutical agents for the treatment and
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prevention of ischemia in humans.
1.10 "Lead Extract" means a Library Extract that the Committee has,
------------
based on its review of the Assays performed by Galileo, determined to possess
Requisite Activity.
1.11 "Lead Molecule" means the specific chemical entity responsible for
-------------
identified Requisite Activity in a Lead Extract and/or any analogs, derivatives
and homologs of such a specific chemical entity which are synthesized,
identified or produced on the basis of such specific chemical entity or Lead
Molecule derived above.
1.13 "Patent Rights" means any United States patent application and any
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divisional, continuation, or continuation-in-part of such patent application (to
the extent the claims are directed to subject matter specifically described
therein), as well as any patent issued thereon and any reissue or reexamination
of such patent, and any foreign counterparts to such patents and patent
applications. "Phytera Patent Rights" means Patent Rights that are either (i)
---------------------
owned solely by Phytera, (ii) owned jointly by Phytera and a party other than
Galileo, (iii) licensed solely to Phytera or (iv) licensed jointly to Phytera
and a party other than Galileo, in each case to the extent that Phytera has the
ability to license or sublicense the rights required
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under this Agreement. "Galileo Patent Rights" means Patent Rights that are
---------------------
either (i) owned solely by Galileo, (ii) owned jointly by Galileo and a party
other than Phytera, (iii) licensed solely to Galileo or (iv) licensed jointly to
Galileo and a party other than Phytera, in each case to the extent that Galileo
has the ability to license or sublicense the rights required under this
Agreement. "Joint Patent Rights" means Patent Rights owned by both Phytera and
-------------------
Galileo as joint owners. Joint Patent Rights will include (i) Patent Rights
claiming Joint Technology and (ii) Patent Rights claiming both Phytera
Technology and Galileo Technology in a single filing.
1.14 "Progression" or "Progression Strategy" means the processes, steps
-------------------------------------
and activities required to advance a Lead Molecule into a Candidate Compound,
either inside or outside the Field. These steps may include various studies to
assess the preclinical credentials of a Lead Molecule in terms of in vitro and
in vivo activity in relevant pharmacology/disease models, initial studies
relating to the synthesis, production, manufacture, formulation,
pharmacokinetics, metabolism and toxicity of the Lead Molecule and investigation
of the intellectual protection opportunities around the Lead Molecule. Such
studies will be reasonably consistent in nature and cost to studies normally
conducted within the pharmaceutical and biotechnology industries in order to
advance a Lead Molecule into a Candidate Compound. These steps may also include
synthesis, acquisition or production of analogs, derivatives and homologs of the
Lead Molecule in order to optimize the pharmaceutical credentials of the Lead
Molecule and to define and optimize the intellectual protection opportunities
stemming from the Lead Molecule.
1.15 "Requisite Activity" means desired biological activity observed in
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Library Extracts during Assays, as determined by the Committee pursuant to
Section 2.4(f) of this Agreement.
1.16 "Technology" means any proprietary development, idea, design,
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concept, technique, process, invention, research material, discovery, or
improvement, whether or not patentable or copyrightable. "Phytera Technology"
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means Technology that is either (i) owned or invented or discovered solely by
Phytera, (ii) owned jointly by Phytera and a party other than Galileo, (iii)
licensed solely to Phytera or (iv) licensed jointly to Phytera and a party other
than Galileo, in each case to the extent that Phytera has the ability to license
or sublicense the rights required under this Agreement. "Galileo Technology"
------------------
means Technology that is either (i) owned or invented or discovered solely by
Galileo, (ii) owned jointly by Galileo and a party other than Phytera, (iii)
licensed solely to Galileo or (iv) licensed jointly to Galileo and a party other
than Phytera, in each case to the extent that Galileo has the ability to license
or sublicense the rights required under this Agreement. "Joint Technology" means
----------------
Technology that is developed or discovered jointly by one or more employees or
consultants of Galileo and one or more employees or consultants of Phytera in
connection with and pursuant to the Collaborative Research Program, including
specifically but without limitation all Lead Extracts, Lead Molecules and
Candidate Compounds.
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2. Management of Collaborative Research Program.
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2.1 Steering Committee. The parties hereby create a Steering Committee
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(the "Committee") which shall consist of [ ]* members, [ ]* of whom shall be
designated by Phytera and [ ]* of which shall be designated by Galileo. The
members initially designated by Phytera are [ ]*, and the members initially
designated by Galileo are [ ].* If any member of the Committee dies,
resigns, or becomes incapacitated, the party which designated such member shall
designate his or her successor (whose term shall commence immediately), and any
party may withdraw the designation of any of its members of the Committee and
designate a replacement (whose term shall commence immediately) at any time by
giving notice of the withdrawal and replacement to the other party. The
Committee shall designate one or more of its members to act as secretary for the
Committee.
2.2 Meetings of the Committee. Regular meetings of the Committee shall
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be held within forty-five (45) days of the end of each calendar quarter, or at
such other times as the parties may deem appropriate, at such times and places
as the members of the Committee shall from time to time agree. Special meetings
of the Committee may be called by either party on fourteen (14) days written
notice to the other party unless notice is waived by the parties. All meetings
shall alternate between the offices of the parties unless the parties otherwise
agree. Discussions among Committee members shall not constitute an official
Committee meeting unless either (i) written notice has been furnished to each
Committee member at least fourteen (14) business days prior to such meeting or
(ii) each Committee member executes a written waiver of such notice.
2.3 Actions By the Committee. A quorum of the Committee shall be
------------------------
present at any meeting of the Committee if at least three members are present at
such meeting in person or by telephone. If a quorum exists at any meeting, the
unanimous consent of all members of the Committee present at such meeting is
required to take any action on behalf of the Committee. In no event shall any
action (other than a determination not to proceed to Phase II, as described in
Section 3.7 below, which may occur upon the vote of any two Committee members)
be taken by the Committee if there is other than unanimous consent. Unless
otherwise specifically stated to the contrary herein, no individual party shall
purport to act on behalf of the other party unless and then only to the extent
authorized to do so by the Committee.
2.4 Responsibilities of The Committee. The Committee shall be
---------------------------------
responsible for the day-to-day conduct, progress and evaluation of the
Collaborative Research Program and its activities, including, without
limitation:
__________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for wich confidential treatment has
been requested, has been filed separately with the Securities and Exchange
Commission.
p.4
(a) managing all technical aspects of the Collaborative Research
Program;
(b) resolving matters involving scientific questions;
(c) review of results of Assays performed by Galileo on the initial
[ ]* Extracts from the Library through Phase I of the
Collaborative Research Program, as described in Section 3.6
below;
(d) following the conclusion of Phase I, determining
whether to proceed with screening of the remaining [ ]*
Library Extracts in Phase II, as described in Section 3.8 below;
(e) determining the criteria of significant biological activity
("Requisite Activity") necessary for a Library Extract following
the completion of Assays to qualify as a Lead Extract and
determining whether any given Library Extract qualifies as a
Lead Extract;
(f) in the event that Requisite Activity is identified in any
Library Extract and any such Library Extract is designated by
the Committee as a Lead Extract, to determine whether and how to
initiate Deconvolution (as defined below) of such Lead
Extract(s);
(g) rank ordering of Lead Extracts based upon various criteria,
including without limitation potency, scale-up potential and
toxicity, the purpose of which will be to subject the highest
ranked Lead Extracts to successive chemical isolation and
identification technologies ("Deconvolution") to identify
specific chemical entities ("Lead Molecules") that are
responsible for the observed Requisite Activity;
(h) responsibility for Progression tactics and commercialization
strategy for Lead Molecules or Candidate Compounds, including
the determination of whether to enter into a development
agreement between the parties for any Lead Molecules or
Candidate Compounds;
(i) determining the criteria for acceptance, in general, of a Lead
Molecule as a Candidate Compound acceptable for Development,
including (i) in vitro activity and profile, (ii) in vivo
activity and profile in a relevant animal model of disease,
(iii) potential to patent or otherwise protect the intellectual
property rights around the Lead Molecule without
__________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for wich confidential treatment has
been requested, has been filed separately with the Securities and Exchange
Commission.
p.5
infringing the intellectual property rights of third parties,
(iv) the likelihood of devising a plausible manufacturing
strategy for the Lead Molecule, and (v) the therapeutic ratio
for toxicity in a 14-day toxicity model compared to the efficacy
dose required in an animal model of disease. Such determinations
shall be consistent with usual and customary practices in the
pharmaceutical and biotechnology industries.
(j) subsequent to the receipt of notice pursuant to Section 5.2,
determination of whether a Lead Molecule or compound satisfies
the criteria established for a Candidate Compound
2.5 Committee Reports. Within ten (10) days following each meeting of
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the Committee held pursuant to Section 2.2, the secretary of the Committee shall
prepare and send to each party a written report of actions taken at the meeting
in such form and containing such detail as shall be determined by the Committee.
2.6 Deadlock. In the event that the Committee cannot reach agreement
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within sixty (60) days as to any matter that is subject to its decision-making
authority, the matter shall be referred to binding arbitration in accordance
with the procedures set forth in Article 12; provided, however, that such
arbitration shall not apply to any deadlock in connection with whether to
proceed with Phase II screening of Extracts, as described in Section 3.8 below.
3. Conduct of Collaborative Research Program.
-----------------------------------------
3.1 Objective of Collaboration. The overall objective of this Agreement
--------------------------
is to discover and develop compounds that demonstrate potential as human
pharmaceutical agents for treatment and prevention of ischemia (sometimes also
referred to herein as the "Program").
3.2 Responsibilities of Each Party. Each of the parties shall have the
------------------------------
general responsibilities for research and development tasks as are described in
detail in Appendix A. However, the Committee shall have discretion to allocate
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specific research and development tasks in a particular situation to the party
that has the best current capability, capacity, and desire to complete the task
and advance the objectives of the Program, irrespective of whether that task
comes within the general responsibilities assigned to that party. If the members
of the Committee disagree on whether a party should participate in a particular
task, the task will be assigned to the party who has general responsibility for
such activities as set forth on Appendix A. Galileo agrees to conduct all Assays
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of the delivered Extracts, its assigned Deconvolution tasks and all other
actions required of it in connection with the Program expeditiously and in a
scientifically sound manner. Phytera also agrees to deliver all Extracts
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on a timely basis and to conduct its assigned Deconvolution tasks and all other
actions required of it in connection with the Program expeditiously and in a
scientifically sound manner.
3.3 Reports and Records. Each party agrees to promptly and regularly
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communicate to the other party all research results from the Program, including
quarterly reports to the Committee detailing all tests conducted and results
obtained by such party in connection with the Program. Each party shall prepare
and maintain adequate records, including bound laboratory notebooks maintained
in accordance with standard scientific procedures, containing all appropriate
data reflecting all research results from the Program. In addition, each party
shall retain under appropriate conditions any necessary or desirable samples of
research materials that are developed or used in the Program.
3.4 Grant of License. For the duration of the term of this Agreement,
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Phytera hereby grants to Galileo an exclusive, worldwide license in the Field
(without the right to sublicense) under the Phytera Patent Rights and the
Phytera Technology to (i) test Library Extracts for assay interference prior to
the initiation of Phase I (as described in Section 3.5 below), (ii) test, screen
and perform Assays on any and all Library Extracts in order to determine which,
if any, of the Library Extracts (or combinations thereof) possesses Requisite
Activity and (iii) if duly authorized by the Committee, to perform necessary
research and development tasks associated with Deconvolution of Lead Extracts,
each as set forth in detail on Appendix A.
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3.5 Pilot Phase.
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(a) Commencement of Pilot Phase/Delivery of Extracts. The
------------------------------------------------
parties agreed that it is desirable to test the compatibility of the Assays and
the Extracts prior to committing resources to the full research program
contemplated by this Article 3. Consequently, in order to facilitate such
testing, Phytera delivered [ ]* Extracts (the "Pilot Extracts") to Galileo
on or about [ ]*, and Galileo acknowledges receipt thereof.
(b) Conduct of Initial Screens. Promptly following receipt of
--------------------------
the Pilot Extracts, Galileo did (i) test such Pilot Extracts for activity to
ensure that Assays are optimally configured for screening and (ii) begin to
evaluate the Pilot Extracts for assay interference. In the event that such
interference is identified, Galileo shall attempt to modify its Assays as
necessary in order to enable successful completion. Galileo shall promptly
notify the Committee of any modification so implemented. As of the Effective
Date, the Pilot Extract evaluation has not been completed, but sufficient
analysis has been conducted to ensure that there is adequate compatibility
between the Assays and Pilot Extracts to conclude that the Program can be
successfully pursued and should proceed. Upon the completion of the
__________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for wich confidential treatment has
been requested, has been filed separately with the Securities and Exchange
Commission.
p.7
evaluation of the Pilot Extracts, Galileo shall promptly provide to the
Committee a detailed description of all evaluations performed and all Assays
successfully conducted. All such information disclosed by Phytera and Galileo
shall be deemed Confidential Information and, as such, is subject to the
restrictions set forth in Article 7 hereof.
3.6 Phase I.
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(a) Delivery of Phase I Extracts. Phase I of the Collaborative
----------------------------
Research Program shall commence as soon as is practical following the delivery
of the Initial Phase I Extracts by Phytera to Galileo. It is anticipated that
the initial portion of Phase I shall commence on or about [ ]*, although
Phase I may commence on such other date as shall be designated by the Committee.
Prior to the Effective Date, Phytera has delivered and Galileo hereby
acknowledges receipt of [ ]* Extracts, including [ ]* Pilot
Extracts. As soon as is practical following the Effective Date, Phytera shall
promptly deliver an additional [ ]* plant cell and marine microbe culture
extracts for a total of [ ]* Extracts (the "Initial Phase I Extracts") to
Galileo. Phytera shall then deliver an additional [ ]* plant and marine
extracts (the "Final Phase I Extracts" and, collectively with the Initial Phase
I Extracts, the "Phase I Extracts") on or about [ ]*, or such other date
as shall be specified by the Committee. Phase I shall consist of (i) Assays
(Phase I Assays") on Phase I Extracts and (ii) if determined in the sole
discretion by the Committee, Deconvolution of Lead Extracts identified from
Phase I Extracts.
(b) Conduct of Phase I Assays. Promptly following the receipt
-------------------------
of each batch of Phase I Extracts, Galileo shall screen such Extracts in
accordance with the procedures set forth on Appendix A hereto. Galileo shall
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promptly report to Phytera each Extract in which its Assays detect signs of
Requisite Activity.
(c) Identification and Labeling of Lead Extracts. Promptly
--------------------------------------------
following the conclusion of Phase I Assays on each of the Initial Phase I
Extracts and the Final Phase I Extracts, respectively, Galileo shall provide a
detailed report of all Assays conducted to the Committee. Within thirty (30)
days from the date of Galileo's report described above, the Committee shall meet
to review the results of all of the Assays conducted up to that point and
evaluate the overall progress of the Program. The Committee shall in its sole
discretion label each Library Extract (or combination thereof) determined by the
Committee to possess Requisite Activity as a "Lead Extract", provided, however,
that in no event may more than [ ]* Extracts from Phase I be labeled as
Lead Extracts without Phytera's written consent. At such time as a Library
Extract is labeled a "Lead Extract," Phytera shall no longer provide such
Library Extract to any third party without Galileo's prior written consent.
3.7 Continuation of Program Following Phase I Assays. At the final
------------------------------------------------
meeting held
__________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for wich confidential treatment has
been requested, has been filed separately with the Securities and Exchange
Commission.
p.8
to evaluate the Final Phase I Extracts (or at one or more meetings to be held on
a later date) the Committee shall select, in its sole discretion, one of the
following actions:
(i) to proceed only with the Deconvolution of any or all of the Lead
Extracts identified from the Assays conducted to date;
(ii) to proceed with the Deconvolution of any or all of the Lead
Extracts identified from the Assays conducted to date and to
initiate the screening of the [ ]* Extracts remaining
from the Library ("Phase II," as described in Section 3.8
below); or
(iii) regardless of whether or not any Lead Extracts have been
identified following completion of the Phase I Assays, to forego
the Deconvolution of such Lead Extracts and proceed directly to
screening of the remaining [ ]* Library Extracts in Phase
II.
3.8 Phase II.
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(a) Commencement of Phase II. In the event that the Committee
------------------------
determines to proceed with Phase II of the Collaboration Program, Phase II shall
commence within 30 days following the Committee's determination to so proceed.
Phase II shall consist of (i) Assays ("Phase II Assays") on the Phase II
Extracts (as defined in subsection (b) below) and (ii) if determined in the sole
discretion of the Committee, Deconvolution of Lead Extracts identified from the
Phase II Extracts.
(b) Conduct of Phase II Assays. In the event that the
--------------------------
Committee elects to proceed with the Phase II Assays, Phytera shall deliver
promptly to Galileo in one batch all of the [ ]* remaining Library
Extracts (the "Phase II Extracts"). Galileo shall use all reasonable efforts to
conduct the Phase II Assays in an expeditious and scientifically sound manner.
(c) Identification and Labeling of Lead Extracts. Promptly
--------------------------------------------
following the conclusion of Phase II Assays on each of the Phase II Extracts,
respectively, Galileo shall provide a detailed report of all Assays conducted to
the Committee. Within thirty (30) days from the date of Galileo's report
described above, the Committee shall meet to review the results of all of the
Assays conducted up to that point and evaluate the overall progress of the
Program. The Committee shall in its sole discretion label each Library Extract
(or combination thereof) determined by the Committee to possess Requisite
Activity as a "Lead Extract", provided, however, that in no event may more than
[ ]* Extracts from Phase II be labeled as Lead Extracts without Phytera's
written consent. At such time as a
__________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for wich confidential treatment has
been requested, has been filed separately with the Securities and Exchange
Commission.
p.9
Library Extract is labeled a "Lead Extract," Phytera shall no longer provide
such Library Extract to any third party without Galileo's prior written consent.
3.9 Deconvolution of Lead Extracts. In the event the Committee
------------------------------
determines to undertake Deconvolution activities, those Lead Extracts designated
for Deconvolution by the Committee, whether during Phase I or Phase II, shall be
rank ordered by the Committee based upon certain criteria developed in advance
by the Committee, which criteria shall include without limitation potency,
scale-up potential and toxicity. In descending rank-order, each such Lead
Extract shall be subjected to Deconvolution in order to identify the specific
chemical entities ("Lead Molecules") that are responsible for the desired Lead
Extract biological activity. Responsibilities of each party during the
Deconvolution process are set forth in detail on Appendix A. Following
structural identification of Lead Molecules, further development of Lead
Molecules shall be subject to the provisions of Section 5 below. In the event
that, following Deconvolution, a Lead Extract is determined not to contain a
Lead Molecule or if, after reasonable effort a Lead Molecule cannot be
deconvoluted, or in the event a Lead Extract has not entered into Deconvolution
within [ ]* of designation by the Committee as a Lead Extract, any
encumbrances placed upon Phytera's use of such Lead Extract outside this
Agreement shall lapse and Phytera shall be free to use the Lead Extract in other
research programs.
4. Term; Early Termination of Program.
----------------------------------
4.1 Term. This Agreement shall commence on the Effective Date and shall
----
continue until the earliest to occur of (i) the execution and delivery by both
parties of a final agreement regarding the development of Candidate Compounds
identified pursuant to the Program in accordance with Sections 5.2 or 5.3 below
or (ii) the termination of the Program pursuant to this Sections 4.2, 4.3, 4.4
or 4.5 below.
4.2 Lack of Merit. The Program shall terminate immediately in the event
-------------
of a decision by the Committee to terminate the Program for lack of scientific
or business merit. For purposes of this Section 4.2, in the event the activities
described in Article 3 are completed and an agreement regarding the development
of Candidate Compounds, as described in Section 4.1(i) has not been executed and
is not being actively negotiated, the conditions constituting such lack of
scientific or business merit shall be deemed to have been met and either party
may terminate this Agreement upon [ ]* written notice.
4.3 Termination Upon Default. In the event that either party commits a
------------------------
material breach of its obligations under this Agreement and fails to cure that
breach within [ ]* after receiving written notice thereof, the nonbreaching
party may terminate this Agreement immediately upon written notice to the party
in breach.
__________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for wich confidential treatment has
been requested, has been filed separately with the Securities and Exchange
Commission.
p.10
4.4 Force Majeure. Neither party will be responsible for or considered
-------------
in breach of this Agreement because of delays resulting from acts beyond the
control of such party, provided that the nonperforming party uses commercially
reasonable efforts to avoid or remove such causes of nonperformance and
continues performance hereunder with reasonable dispatch whenever such causes
are removed.
4.5 Bankruptcy. If during the term of this Agreement, either party
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files a voluntary petition in bankruptcy, is adjudicated as bankrupt, makes a
general assignment for the benefit of creditors, admits in writing that it is
insolvent or fails to discharge within 60 days after an involuntary petition in
bankruptcy filed against it, then this Agreement may be immediately terminated
by the other party, with notice.
4.6 Effect of Termination. Except as otherwise agreed by the parties,
---------------------
upon the expiration or termination of this Agreement, all of the provisions of
this Agreement shall immediately terminate, except that this Section 4.6 and
Articles 5 (Development of Joint Technology), 7 (Intellectual Property) and 9
(Confidentiality) of this Agreement shall survive in their entirety. Further, in
the event that issues arise or decisions must be reached subsequent to the
termination of this Agreement that would, were this Agreement still in effect,
fall within the authority of the Steering Committee, then the party that first
becomes aware of such issue or need for a decision shall so notify the other in
writing, and the parties shall meet within 60 days of such notice to address
such issue or reach such decision in accordance with the responsibilities and
authorities of the Steering Committee as defined in this Agreement. Upon
termination, except as may otherwise be agreed by the parties:
(i) In the event that either party terminates this Agreement pursuant to
Sections 4.2 or 4.4 above,
(a) Galileo shall have no further rights under the Phytera Patent
Rights or Phytera Technology;
(b) Phytera shall have no further rights under the Galileo Patent
Rights or Galileo Technology, and;
(c) Each party shall retain its equal one-half (1/2) joint ownership
interest in any Joint Patent Rights or Joint Technology in the
Field.
(ii) In the event that Phytera shall terminate this Agreement pursuant to
Sections 4.3 or 4.5 above, Galileo
(a) hereby grants to Phytera an exclusive, perpetual, worldwide,
royalty-free license (with the right to sublicense) in the Field
under Galileo's interest in the Joint Patent Rights and the Joint
Technology for
P.11
research, development, and to make, have made, use, sell and
import Joint Technology and products comprising or derived from
or developed utilizing the Joint Patent Rights or the Joint
Technology; and
(b) agrees to use reasonable commercial efforts at such time to
assist Phytera's use of such Joint Patent Rights and Joint
Technology.
(iii) In the event that Galileo shall terminate this Agreement
pursuant to Sections 4.3 or 4.5 above, Phytera shall grant to Galileo,
(a) a nonexclusive, perpetual, worldwide, royalty-free license (with
right to sublicense) in the Field under Phytera's interest in
the Phytera Patent Rights and the Phytera Technology to make,
have made and use those Lead Extracts delivered to Galileo on or
----
prior to the date of such termination by Galileo; and
(b) an exclusive, perpetual, worldwide, royalty-free license (with
the right to sublicense) in the Field under Phytera's interest
in the Joint Patent Rights and the Joint Technology for
research, development, and to make, have made, use, sell and
import Joint Technology and products comprising or derived from
or developed utilizing the Joint Patent Rights or the Joint
Technology.
5. Development of Joint Technology.
-------------------------------
5.1. Progression of Lead Molecules. Within ninety (90) days following the
-----------------------------
identification of one or more Lead Molecules, and upon notice by one party to
the other, the Committee shall determine a Progression Strategy for applications
of such Lead Molecules. Such Progression Strategy may involve one of the
following with respect to each such Lead Molecule:
(i) joint Progression of such Lead Molecules by Galileo and Phytera into
one or more Candidate Compounds; or
(ii) independent Progression of such Lead Molecules by either Galileo and
/or Phytera into one or more Candidate Compounds.
In the event that the Committee cannot agree on the appropriate Progression
Strategy, Galileo and Phytera shall each be free to elect to proceed under
clause 5.1(ii) above.
5.2 Development of Candidate Compounds. Regardless of the Progression
----------------------------------
Strategy agreed upon pursuant to Section 5.1 above, at any time a party
determines that a Lead Molecule has developed into a Candidate Compound, such
party shall promptly notify the
P.12
other party and within 90 days of such notice the parties shall attempt to agree
upon the Development Strategy to be employed with respect to such Candidate
Compound. The Development Strategy to be employed may include any one of the
following:
(i) joint Development of one or more selected Candidate Compounds;
(ii) independent Development of the same Candidate Compound by each party;
or
(iii) independent Development of a different Candidate Compound by a
party.
In the event the parties cannot agree on the appropriate Development
Strategy, each party shall be free to independently develop such Candidate
Compound under Section 5.2(iii) above.
5.3 Support during Progression of a Lead Molecules. The parties agree to
----------------------------------------------
support each other during Progression of Lead Molecules, regardless of the
Progression Strategy agreed upon pursuant to Section 5.1 above, as follows:
(i) Phytera will use reasonable commercial efforts to provide extracts
and natural products chemistry support to Galileo; and
(ii) Galileo will use reasonable commercial efforts, (i) to perform Assays
on Lead Molecules and analogs of compounds derived from Lead
Molecules by acquisition, medicinal chemistry, combinatorial
chemistry synthesis or other technologies provided by Phytera, and
(ii) at Galileo's discretion, to perform such testing in relevant
animal models.
Neither party shall be required to provide support in excess of [ ]* full time
equivalents ("FTEs") per year to render the support contemplated in this Section
5.3, provided that, in the event that either party does not have the in-house
capacity at the time support is requested to provide such support, such party
will have a reasonable amount of time to secure or acquire the needed capacity,
including but not limited to the recruitment of additional staff.
5.4 Cost Reimbursement for Support during Progression of Lead Molecules.
-------------------------------------------------------------------
Each party shall reimburse the other its reasonable costs incurred in providing
the support described above during Progression of a Lead Molecules to a
Candidate Compounds. Each party that provides such support shall prepare and
submit invoices to the other according to a schedule agreed upon by the
Committee, such invoices to be due and payable within thirty (30) days of
receipt.
_________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
p.13
5.5 Reimbursement of Costs Incurred during Progression of Lead Molecules;
--------------------------------------------------------------------
Payment of Development Costs. In the event the parties agree to proceed with the
----------------------------
Development of one or more Candidate Compounds pursuant to Section 5.2 (i) or
Section 5.2 (ii) above, the party responsible for Progression of the chosen
Candidate Compounds from a Lead Molecule will be reimbursed 50% of its total,
fairly allocated costs incurred during such Progression by the other party,
including but not limited to costs incurred related to support provided by the
other party during such Progression. In the event the parties agree to jointly
proceed with Development of a Candidate Compound pursuant to Section 5.2 (i),
each party shall be obligated to pay fifty percent (50%) of the costs of
Development. In the event the parties agree to independently proceed with
Development of the same Candidate Compound, each party shall pay its own costs
of such Development. In the event the parties do not agree on the Development
Strategy and a party elects to independently proceed with the Development of
Candidate Compound pursuant to Section 5.2 (iii) above, such party shall pay the
costs of Development and no reimbursement will be due with regard to such
Candidate Compound (either for its Progression or its Development) provided that
if either party elects to Develop a Candidate Compound that was progressed from
a Lead Molecule to a Candidate Compound by the other party, who does not agree
to proceed with the Development of such Candidate Compound, the party
responsible for Progression of the chosen Candidate Compounds from a Lead
Molecule will be reimbursed 50% of its total, fairly allocated costs incurred
during such Progression by the party electing to Develop said Candidate
Compound, including but not limited to costs incurred related to support
provided by the other party during such Progression, and the party electing to
Develop said Candidate Compound shall pay all costs of Development.
5.6 Support during Pre-Clinical Development of a Candidate Compounds.
----------------------------------------------------------------
In the event the parties elect to proceed with the Development of Candidate
Compounds pursuant to Section 5.2 (i) or Section 5.2 (ii) above, the parties
agree to provide the support described in Section 5.3 above to each other during
the pre-clinical Development of a Candidate Compounds to the point of filing an
Investigational New Drug ("IND") application with the Food and Drug
Administration ("FDA"), or equivalent filing outside the United States. The
following provisions shall apply in the event the parties elect to proceed with
the Development of Candidate Compounds pursuant to Section 5.2 (iii) above;
(i) if the Development programs being pursued by the parties are
considered by either party to be competitive (defined as targeting the
same or very similar clinical indications), the parties shall be under
no obligation to provide the support described in Section 5.3 with
regard to such Candidate Compounds,
(ii) if the Development programs being pursued by the parties are not
considered by either party to be competitive (defined as in 5.6(i)
above), the parties shall provide the support described in Section 5.3
with regard to such Candidate Compounds.
5.7 Support during Clinical Development of Candidate Compounds. In the
----------------------------------------------------------
event the
p.14
parties elect to proceed with the Development of Candidate Compounds pursuant to
Section 5.2 (i) or Section 5.2 (ii) above, the parties agree to provide the
support described in Section 5.3 above to each other during the clinical
Development of Candidate Compounds. The following provisions shall apply in the
event the parties elect to proceed with the Development of Candidate Compounds
pursuant to Section 5.2 (iii);
(i) if the Development programs being pursued by the parties are
considered by either party to be competitive (defined as targeting the
same or very similar clinical indications) the parties shall be under
no obligation to provide the support described in Section 5.3 with
regard to such Candidate Compounds,
(ii) if the Development programs being pursued by the parties are not
considered by either party to be competitive (defined as in 5.7(i)
above) the parties shall provide the support described in Section 5.3
with regard to such Candidate Compounds.
5.8 Cost Reimbursement for Support during Development of Candidate
--------------------------------------------------------------
Compounds. Each party shall reimburse the other its fairly allocated costs
---------
incurred in providing the support described in Sections 5.6 and 5.7 above during
the Development of Candidate Compounds. Each party that provides such support
shall prepare and submit invoices to the other according to a schedule agreed
upon by the Committee, such invoices to be due and payable within thirty (30)
days of receipt.
5.9 Rights to Joint Technology. The parties shall share rights to Joint
--------------------------
Technology as follows:
(i) in the event the parties continue to jointly collaborate on the
Development of Candidate Compounds each party will have an equal one-
half (1/2) ownership interest in the Joint Technology related to such
Candidate Compounds, and the parties shall agree on the appropriate
commercialization strategy.
(ii) in the event the parties elect to Develop the same chosen Candidate
Compounds independently pursuant to Section 5.2 (ii) above or cannot
agree on the appropriate commercialization strategy under Section 5.9
(i) above, the rights to commercialize products derived from such
Candidate Compounds, including but not limited to the right to license
third parties and subject to the license agreement described in
Section 5.10 below, shall be as follows:
(a) Galileo shall have exclusive commercialization rights in the
Field in North America and outside the Field in Europe;
(b) Phytera shall have exclusive commercialization rights in the
Field in Europe and outside the Field in North America (subject to
Section 5.11 below); and
p.15
(c) the parties shall have coexclusive commercialization rights
equally in the rest of the world.
(iii) in the event a party elects to Develop a Candidate Compound
independently pursuant to Section 5.2 (iii) above, such party shall have
exclusive worldwide rights (including the right to sublicense) to products
derived from such Candidate Compound(s) it has independently developed subject
to the license agreement described in Section 5.10 below, provided that, in the
event that such party enters into any agreement of any type with a third party
related to the Development or commercialization of said Candidate Compounds (the
"Third Party Agreement"), the following terms shall apply;
(a) in the event the Third Party Agreement is entered into prior to the
initiation of Phase II clinical trials in the U.S. or the equivalent
outside the U.S. for such Candidate Compounds, the other party to
this Agreement shall be entitled to [ ]* of the consideration,
including but not limited to upfront payments, milestone payments and
royalties, to which the licensing party becomes entitled pursuant to
the Third Party Agreement, excluding only a) the sale of equity or
debt securities by the licensing party to the third party pursuant to
the Third Party Agreement or b) funding received by the licensing
party in direct support of research and development activities or
reimbursement of expenses directed to the Candidate Compounds; and
(b) in the event the Third Party Agreement is entered into subsequent to
the initiation of Phase II clinical trials in the U.S. or the
equivalent outside the U.S. for such Candidate Compounds, the other
party to this Agreement shall be entitled to royalties as described
in Section 5.10(ii) below.
5.10 License Agreement. In the event that the parties become entitled to
-----------------
commercialization rights as described in Sections 5.9 (ii) or 5.9 (iii) above,
the parties shall enter into a License Agreement that provides that a royalty
shall be payable as follows:
(i) in the event that commercialization rights are governed by
Section 5.9 (ii) above, the royalty rate shall reflect each
party's relative contribution to the development of the
Candidate Compounds. In the event either party licenses its
rights to a third party, the royalty rate so determined shall
apply to the net sales of such third party.
(ii) in the event rights are governed by Section 5.9 (iii) above and
(a) if no support (as described in Section 5.3) has been
provided pursuant to
__________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
p.16
Sections 5.6(ii) or 5.7(ii), the royalty rate shall reflect
industry standard terms taking into account each party's
relative contribution to the development of such Candidate
Compounds, or:
(b) if support (as described in Section 5.3) has been provided
pursuant to Sections 5.6(ii) or 5.7(ii) and the party
receiving such support does not enter into a Third Party
Agreement or enters into a such an agreement pursuant to
Section 5.9(iii)(b) above, the royalty rate shall reflect
industry standard terms taking into account each party's
relative contribution to the development of such Candidate
Compounds, increased by [ ]* to reflect the additional
contribution made by the party providing such support. In
the event such support has been provided and the party
receiving such support enters into a Third Party Agreement
pursuant to Section 5.9(iii)(a) above, the party providing
such support shall be entitled to [ ]* of the royalty to
which the licensing party becomes entitled pursuant to the
Third Party Agreement.
5.11 Development of Nutritional and Organ Preservation Applications.
--------------------------------------------------------------
Phytera hereby grants to Galileo an option to exclusively license for
development and commercialization Phytera's interest in any Lead Extracts, Lead
Molecules, Candidate Compounds or other Joint Technology for nutritional, organ
and tissue preservation applications. Upon written notice by Galileo of its
exercise of such option, which shall be received by Phytera within sixty (60)
days following the designation by Galileo of such Lead Extract, Lead Molecules,
Candidate Compounds or other Joint Technology having such applications, Phytera
and Galileo shall enter into good faith negotiations with respect to such
exclusive license. The terms of such license agreement to be negotiated shall
contain customary and commercially reasonable terms, in light of typical license
agreements in the particular industry involved. In the event that the parties
are unable reach final agreement on the terms of the license agreement within
one hundred twenty (120) days following the commencement of good faith
negotiations, the matter shall be submitted to binding arbitration in accordance
with Section 12 below.
6. Allocation of Program Expenses through Identification of Lead Molecules.
-----------------------------------------------------------------------
6.1 Extract Production and Screening Costs. Each party shall bear the
--------------------------------------
costs of its own activities performed in connection with the initial screening
of and performance of Assays on Library extracts. Phytera shall be responsible
for all costs associated with the production of Library Extracts and the
furnishing of such Extracts to Galileo for evaluation. Galileo shall be
responsible for all costs associated with performance of the Assays and
______________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which Confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
p.17
reporting results to the Committee.
6.2 Deconvolution. Each party shall pay fifty percent (50%) of the
-------------
aggregate costs incurred in connection with the conduct of Deconvolution on Lead
Extracts and the designation of Lead Molecules, including without limitation
fully loaded costs of all employees and/or consultants and all out-of-pocket
expenses (collectively, "Deconvolution Costs"). After the commencement of
Deconvolution activities, each party shall on a calendar quarter basis prepare a
report to the Committee detailing all Deconvolution Costs incurred by it during
such quarter and aggregate Deconvolution Costs less reimbursements hereunder. To
the extent that any such report shows aggregate Deconvolution Costs incurred by
one party in an amount exceeding those incurred by the other by at least [ ]*,
the party incurring the lesser Deconvolution Costs shall, within [ ]* after
receipt of such report, reimburse the party incurring the greater costs to the
extent that such other party's Deconvolution Costs exceed 50% of the aggregate
Deconvolution Costs incurred by both parties. Estimates of costs associated with
their respective tasks, as such tasks are set forth in detail on Appendix A,
----------
shall be furnished by both Phytera and Galileo as soon as practicable following
a determination by the Committee to undertake Deconvolution with respect to a
Lead Extract. Such estimates shall be approved in advance by the Committee, and
precise terms of cost reimbursement shall be stated in writing by the Committee
prior to commencement of Deconvolution.
7. Ownership and Management of Intellectual Property.
-------------------------------------------------
7.1 Intellectual Property Developed Outside of the Program. Except as
------------------------------------------------------
expressly set forth in this Agreement, neither party shall have any rights in
Patent Rights and Technology that is developed or discovered by the other party
prior to the Effective Date or outside of the context of the Program. For
example, Phytera shall have sole ownership of all right, title, and interest in
Library Extracts provided to Galileo, and Galileo shall have sole ownership of
all right, title and interest in Assays developed by Galileo. Each party shall
have sole responsibility for and control over Patent Rights claiming any of its
Technology that was developed or discovered prior to the Effective Date or
outside of the Program. Neither party shall have any right to review and comment
on such Patent Rights of the other party.
7.2 Ownership of Intellectual Property Arising From the Program.
-----------------------------------------------------------
Ownership of Patent Rights and Technology arising from the Program shall be
allocated in the following manner:
(i) Phytera shall have sole ownership of all right, title, and
interest in Phytera Patent Rights and Phytera Technology;
________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
p.18
(ii) Galileo shall have sole ownership of all right, title, and interest
in Galileo Patent Rights and Galileo Technology; and
(iii) Phytera and Galileo shall have joint ownership of all right, title,
and interest in Joint Patent Rights and Joint Technology, which shall
be subject to the provisions of Article 5 hereof.
Each party shall ensure that its employees, consultants, agents, and
representatives are contractually required to assign to such party all Patent
Rights and other rights in Technology arising from the Program and to promptly
disclose to such party all patentable inventions within that Technology.
7.3 Notice of Intellectual Property Arising From the Program. Each party
--------------------------------------------------------
shall provide prompt written notice to the Committee of the internal disclosure
of any significant Technology developed by its personnel in connection with the
Program.
7.4 Responsibility for Patent Rights Arising from the Program. Phytera
---------------------------------------------------------
shall be responsible for and shall control, at its expense, the preparation,
filing, prosecution, grant, and maintenance of any Patent Rights claiming only
Phytera Technology and shall consult with Galileo on, and give Galileo a
reasonable opportunity to review, all such filings to the extent they directly
relate to the Collaborative Research Program. Galileo shall be responsible for
and shall control, at is expense, the preparation, filing, prosecution, grant,
and maintenance of all Patent Rights claiming only Galileo Technology and shall
consult with Phytera on, and give Phytera a reasonable opportunity to review,
all such filings to the extent they relate directly to the Collaborative
Research Program. In the case of Joint Technology, the Committee will decide
whether to seek Joint Patent Rights claiming that Technology or to maintain that
Technology as a trade secret. The Committee will also decide whether to seek
Patent Rights claiming both Phytera Technology and Galileo Technology in one
filing, which also constitutes a Joint Patent Right. If the Committee decides to
seek any Joint Patent Rights, the parties shall jointly prepare, file,
prosecute, and maintain such Patent Rights, and all related expenses shall be
borne equally by the parties.
7.5 Assumption of Rights by Other Party. In the event that a party
-----------------------------------
desires to decline responsibility for obtaining or maintaining Patent Rights in
a country for any of its Technology that is developed or discovered in
connection with the Program, such party will notify the other party before
taking such action and, upon request, will allow the other party to assume
responsibility for, and all expenses relating to, the relevant Patent Rights in
those countries; provided, however, that neither party shall have the right to
seek patent protection for any Technology that a party has decided, in its
discretion, to maintain as a trade secret. In the event that a party desires to
cease further payment of patent-related expenses for a Joint Patent Right in any
country, such party may assign to the other party all rights in that Joint
Patent Right in such country and thereafter have no further obligation to pay
such expenses.
p.19
7.6 Cooperation. Each party agrees to cooperate fully in the preparation,
-----------
filing, prosecution, and maintenance of all Patent Rights claiming Technology
arising from the Program. Such cooperation includes, without limitation, (i)
promptly executing all papers and instruments, or requiring its employees,
consultants, and agents to execute such papers and instruments, as reasonable
and appropriate so as to enable one or both parties to file, prosecute, and
maintain such Patent Rights in any country; (ii) promptly informing the other
party of matters that may affect the preparation, filing, prosecution, or
maintenance of any such Patent Rights; and (iii) undertaking no actions that are
potentially deleterious to the preparation, filing, or prosecution of any such
Patent Rights.
7.7 Abandonment of Joint Patent Rights. In the event that the parties fail
----------------------------------
to complete the Program due to lack of merit pursuant to Section 4.2 above, the
parties shall discuss in good faith whether to abandon any unpublished patent
applications within the Joint Patent Rights relating to the Program. The parties
recognize that publication of such Joint Patent Rights could adversely affect
each of their interests after reversion occurs under such Section 4.2.
8. Research Materials.
------------------
8.1 Ownership of Research Materials. In the course of the Program, one
-------------------------------
party (the "Provider") may transfer to the other party (the "Recipient") certain
of its research materials. The Recipient acknowledges and agrees that such
research materials are and shall be owned by the Provider. The Recipient agrees
to execute and deliver any documents of assignment or conveyance to effectuate
the ownership rights of the Provider in such research materials. Specifically,
Galileo acknowledges and agrees that all Library Extracts provided to Galileo in
the Program are proprietary to and owned by Phytera and are or may be covered by
claims of Phytera Patent Rights.
8.2 Use and Transfer of Research Materials. Except as otherwise agreed by
--------------------------------------
the Committee, the Recipient agrees to use research materials provided by the
Provider solely for purposes set forth in this Agreement and shall not
distribute such research materials to any third party other than its employees
and consultants who are working on the Program.
8.3 Additional Restrictions for Proprietary Research Materials. In the
----------------------------------------------------------
case of proprietary research materials furnished by a Provider, Recipient agrees
(i) not to transfer such proprietary research materials to any third party
without the prior written consent of the Provider, (ii) to permit access to the
proprietary research materials only to its employees and consultants requiring
such access, (iii) to inform such employees and consultants of the proprietary
nature of the proprietary research materials, and (iv) to take reasonable
precautions, at least as stringent as those observed by Recipient to protect its
own proprietary materials, to ensure that such employees and consultants observe
the obligations of Recipient under this Section 8.3.
p.20
8.4 Disposition of Unused Research Materials. At the request of Provider,
----------------------------------------
Recipient will return or destroy any unused research materials furnished by
Provider.
8.5 Compliance with Law. Recipient agrees to comply with all federal,
-------------------
state, and local laws and regulations applicable to the use, storage, disposal,
and transfer of research materials furnished by Provider, including without
limitation the Toxic Substances Control Act (15 USC 2601 et seq.) and
------
implementing regulations (in particular, 40 CFR 720.36 [Research and Development
Exemption]), the Food, Drug, and Cosmetic Act (21 USC 301 et seq.) and
------
implementing regulations, and all Export Administration Regulations of the
Department of Commerce. Recipient assumes sole responsibility for any violation
of such laws or regulations by Recipient or any of its Affiliates or
Sublicensees.
8.6 Limitation of Liability. Galileo and Phytera specifically disclaim any
-----------------------
guarantee that the collaboration contemplated by this Agreement will be
successful, in whole or in part. The failure of the parties to successfully
develop Lead Molecules or Candidate Compounds will not constitute a breach of
any representation or warranty or other obligation under this Agreement. Neither
Galileo nor Phytera makes any representation or warranty or guaranty that the
collaboration contemplated by this Agreement will be successful. Any research
materials delivered pursuant to this Agreement are understood to be experimental
in nature and may have hazardous properties. Recipient of such research
materials should assume that the compounds are dangerous and should use
appropriate precautions. PHYTERA AND GALILEO MAKE NO REPRESENTATIONS, AND
EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO
THE RESEARCH MATERIALS FURNISHED TO RECIPIENT AND THE ASSAYS. THERE ARE NO
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR THAT THE USE OF THE RESEARCH MATERIALS OR THE ASSAYS WILL NOT
INFRINGE ANY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY.
9. Confidentiality.
---------------
9.1 Confidential Information. From time to time during the term of this
------------------------
Agreement, and in order to carry out the provisions of this Agreement, it may be
necessary for one of the parties to disclose Confidential Information to the
other. For the purposes of this Agreement, Confidential Information shall
include the Extracts, including the identity of the Extracts, supplied by
Phytera under this Agreement, the data generated by the Collaboration or any
other activity conducted pursuant to this Agreement, the Lead Extracts, the Lead
Molecules, Phytera's cell culture techniques and any strategies, plans or
developments relating to any of the foregoing, the identity of the Assays and
Galileo's protocols for the Assays, the business, financials, technology,
research strategy, employees, infrastructure, collaborators, advisors,
consultants, Boards of Directors and Scientific Advisory Boards of Phytera and
Galileo, respectively, and their respective Affiliates.
p.21
9.2 Non-Disclosure Obligations.
--------------------------
(a) The recipient of such Confidential Information (the "Recipient")
undertakes to treat any and all of such Confidential Information as the other
party may disclose (the "Discloser") to the Recipient during the term of this
Agreement and for a period of [ ]* thereafter as strictly confidential and shall
not divulge it to any third party for any purpose whatsoever and shall not make
use of such Confidential Information or any part thereof for any purpose other
than carrying out the terms of this Agreement without the Discloser's prior
written consent. Any data or information generated by or as a result of the
Collaboration or any other activity conducted pursuant to this Agreement or any
data or information with respect to the Library Extracts, or the Patent Rights
hereunder shall not be disclosed to any third party nor be used for any purpose
other than carrying out the terms of this Agreement without the other party's
written consent.
(b) In the event that the Recipient visits any of the establishments
of the Discloser, the Recipient undertakes that any further Confidential
Information which may come to the Recipient's knowledge, as a result of any such
visit, shall be deemed to be Confidential Information and shall be subject to
the provisions of Paragraph (a) of this Section 9.2.
9.3 Limitations. The undertakings in Paragraphs (a) and (b) of this
-----------
Section 9.2 shall not apply to information that (i) at the time of disclosure is
published or otherwise generally available to the public; (ii) after disclosure
by Discloser is published or becomes generally available to the public otherwise
than through any act or omission on the part of Recipient; (iii) the Recipient
can establish by written documentation that such information was in its
possession at the time of disclosure and that such information was not acquired
directly or indirectly from the Discloser; (iv) was rightfully acquired from a
third party who did not obtain it under pledge of secrecy to the Discloser or
another party; or (v) was required to be disclosed by law.
9.4 Samples. Galileo shall not supply or send any samples of Extracts to
-------
any third party, other than to regulatory agencies as required by law, unless
the sending of such samples shall have been approved by the Committee and such
samples are subject to Section 8 of this Agreement.
9.5 Publications.
------------
(a) Procedure. Phytera and Galileo recognize the need to obtain valid
---------
patent protection. Consequently, Phytera, Galileo and their respective employees
and consultants and any other Third Party wishing to make a publication
(including any oral disclosure made
___________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
p.22
without obligation of confidentiality) relating to work performed by such party
as part of the collaboration described in this Agreement (the "Publishing
Party") shall deliver to the other party (the "Reviewing Party") a copy of the
proposed written publication at least ninety (90) days prior to submission for
publication, or an abstract of such oral disclosure at least thirty (30) days
prior to submission of the abstract or the oral disclosure, whichever is
earlier. The Reviewing Party shall have the right (i) to propose modifications
to the publication for patent reasons, (ii) to request a delay in publication or
presentation in order to protect patentable information, or (iii) to request
that the information be maintained as a trade secret and, in such case, the
Publishing Party shall not make such publication or disclosure. If the Reviewing
Party requests a delay as described in clause (ii) in the preceding sentence,
the Publishing Party shall delay submission or presentation of the publication
for a period sufficient to enable protection of the Reviewing Party's rights in
such information to be filed.
(b) Resolution. Only upon the receipt of written approval of the
----------
Reviewing Party may the Publishing Party proceed with the written publication or
the oral presentation.
9.6 Injunctive Relief. The parties hereto understand and agree that
-----------------
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Article 9 by either party or their employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf. Accordingly, each party shall be entitled to the granting of injunctive
relief by a court of competent jurisdiction against any action that constitutes
any such breach of this Article 9. It is understood that such injunctive relief
is intended solely as provisional relief pending the dispute resolution
procedures described in Section 12 below.
10. Representations and Warranties
------------------------------
10.1 General. Each party warrants and represents to the other that it has
-------
the legal right and power to enter into this Agreement, to extend the rights and
licenses granted to the other in this Agreement, and to perform fully its
obligations hereunder, and that it has not made nor will it make any commitments
to others in conflict with or in derogation of such rights or this Agreement.
10.2 Services. Each party warrants and represents to the other that it
--------
shall conduct its activities in a good scientific manner and in compliance with
all applicable good laboratory and manufacturing practices and all applicable
legal requirements.
11. Indemnity.
---------
11.1 Indemnity Obligations. Each party shall indemnify and hold harmless
---------------------
the other party and its officers, directors, employees and agents from and
against all liabilities, claims, actions and proceedings and all expenses
arising in connection therewith (including without limitation, damages,
judgments, awards, costs and attorney's fees and disbursements)
p.23
which they may incur or which may be asserted against them arising out of or by
reason of the activities of such party, its Affiliates or Licensees, or by their
respective officers, directors, employees or agents pursuant to this Agreement
with the exception of those arising from the intentional wrongful actions or
gross negligence of the other party or any of its employees or agents or from
the breach of any representation, warranty or obligation of the other party as
specified herein.
11.2 Procedure. Promptly after learning of the occurrence of any event
---------
which gives rise to its rights under the provisions of Section 11.1, the
indemnified party shall notify the other party in writing of any such matter.
The indemnified party shall cooperate with the other party in the negotiation,
compromise and defense of any such matter. The indemnifying party shall be in
charge of and control such negotiations, compromise and defense. In no event
shall the indemnified party compromise or settle any such matter without the
prior consent of the other party and such party shall not be bound by any such
compromise or settlement without its prior written consent.
12. Arbitration
-----------
12.1 Selection of the Arbitrator. Other than the decision to proceed with
---------------------------
Phase II, which shall in all events require the unanimous determination of the
Committee, any controversy or dispute between Phytera and Galileo arising out of
or relating to this Agreement or the breach by either party thereof that cannot
be resolved by mutual accord shall be settled by binding arbitration in
accordance with this Section 12. The Committee shall institute these arbitration
provisions in the event it becomes deadlocked by giving notice to each of the
parties that it is electing to arbitrate the matter or matters in dispute. Such
arbitration shall take place in Boston, Massachusetts. The Committee shall
select an arbitrator during the 30 days following the notice of arbitration. If
the Committee is not able to agree on an arbitrator, an arbitrator shall be
chosen by the American Arbitration Association in accordance with its Commercial
Arbitration Rules. The parties shall facilitate the arbitration by participating
in discovery and permitting depositions to be taken. All such discovery and
depositions shall be completed within 90 days after the arbitrator is chosen.
12.2 Decisions of the Arbitrator. All decisions and awards rendered by the
---------------------------
arbitrator shall be binding upon the parties hereto and will be final as to all
questions submitted to the arbitrator. The parties hereto shall execute promptly
all decisions and awards of the arbitrator. The arbitrator shall have authority
to award expenses (including fees of counsel and any experts) in such manner as
the arbitrator determines is just and equitable. The decision of the arbitrator
may be entered in any court having jurisdiction over either or both parties.
13. Miscellaneous.
-------------
13.1 Publicity. Except as provided in Section 9.5 above, no press release,
---------
advertising,
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promotional sales literature, or other promotional oral or written statements to
the public in connection with or alluding to work performed under this Agreement
or the relationship between the parties created by it, having or containing any
reference to Phytera or Galileo, shall be made by either party without the prior
written approval of the other party, except for restatements of previously
approved statements and disclosures required by applicable law or regulation.
13.2 Relationship of Parties. For the purposes of this Agreement, each
-----------------------
party is an independent contractor and not an agent or employee of the other
party. Neither party shall have authority to make any statements,
representations, or commitments of any kind, or to take any action which shall
be binding on the other party, except as may be explicitly provided for herein
or authorized in writing. In particular, (i) neither party shall represent to
creditors or vendors that such party has any authority to obligate or bind the
other party, and shall affirmatively correct any misconception to that effect
and (ii) neither party shall use the name of the other party in connection with
such transactions without the prior written consent of the other party, which
consent may be withheld in its sole discretion.
13.3 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
13.4 Headings. All headings in this Agreement are for convenience only and
--------
shall not affect the meaning of any provision hereof.
13.5 Binding Effect. This Agreement shall inure to the benefit of and be
--------------
binding upon the parties and their respective lawful successors and assigns.
13.6 Assignment. This Agreement may not be assigned by either party without
----------
the prior written consent of the other party, except that either of the parties
may assign this Agreement to a successor in connection with the merger,
consolidation, or sale of all or substantially all of its assets or that portion
of its business pertaining to the subject matter of this Agreement. Each Party
under this Agreement shall have the right to assign to an Affiliate all rights
and obligations under this Agreement.
13.7 Notices. All notices, requests, demands and other communications
-------
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized national overnight courier, confirmed facsimile
transmission, or registered or certified mail, return receipt requested, postage
prepaid, to the following addresses or facsimile numbers:
If to Galileo:
Galileo Laboratories, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
p.25
Attn: Dr. Xxx Xxxxxx, Chairman & CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X'Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Phytera:
Phytera, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxxxxx, President
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
Either party may change its designated address and facsimile number by notice to
the other party in the manner provided in this Section 13.8.
13.9 Amendment and Waiver. This Agreement may be amended, supplemented, or
--------------------
otherwise modified at any time, but only by means of a written instrument signed
by both parties. Any waiver of any rights or failure to act in a specific
instance shall relate only to such instance and shall not be construed as an
agreement to waive any rights or fail to act in any other instance, whether or
not similar.
13.10 Governing Law. This Agreement and the legal relations among the
-------------
parties shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, irrespective of any conflict of laws principles.
p.26
13.11 Severability. In the event that any provision of this Agreement
------------
shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof,
and this Agreement shall be construed as if such invalid or unenforceable
provision had not been included herein.
13.12 Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties with respect to the subject matter hereof and supersedes any
and all prior or contemporaneous oral and prior written agreements and
understandings between the parties.
p.27
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.
GALILEO LABORATORIES, INC.
By: /s/ Xxx Xxxxxx
--------------------------------------
Dr. Xxx Xxxxxx
Chairman and Chief Executive Officer
PHYTERA, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Xx. Xxxxxxx Xxxxxxxx
President and Chief Executive Officer
p.28
Appendix A
Statement of Work
-----------------
[
]*
___________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
p.29
