Exhibit 10.18
RESEARCH COLLABORATION AND LICENSE AGREEMENT
This Research Collaboration and License Agreement (this "Agreement") is
entered into as of May 1, 1998 (the "Effective Date") by and between Phytera,
Inc. ("Phytera"), a Delaware corporation, and NeuroSearch A/S ("NeuroSearch"), a
Danish corporation (together, the "Parties").
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, NeuroSearch has certain expertise and know-how related to the
identification of compounds and mixtures of compounds capable of interacting
with K+ channels (the "Assays"); and
WHEREAS, Phytera wishes to provide its Library to NeuroSearch for
screening and NeuroSearch wishes to screen the Library in order to identify and
develop pharmaceutical agents for the treatment and prevention of diseases which
interact with K+ channels in humans (the "Field").
NOW, THEREFORE, Phytera and NeuroSearch 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 NeuroSearch
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to identify compounds or mixtures of compounds capable of interacting with K+
channels as defined in Appendix A.
1.3. "Collaboration Compounds" means an individual compound as to which
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Phytera has completed NPCII, has identified the compound's chemical structure
and NeuroSearch has
___________________
* 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.
verified its biological activity in primary and secondary screens. By
definition, all Collaboration Compounds constitute Joint Technology.
1.4 "Collaborative Research Program" or the "Program" means the
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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
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which may be disclosed by either party to the other pursuant to this Agreement,
as described in Section 9.1 hereof.
1.7 "Development Compound" means a Collaboration Compound from the
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screening or lead optimization programs that has been selected by the Committee
for entry into a pre-clinical or clinical development program.
1.8. "Development" or "Development Strategy" means the processes,
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steps and activities required to advance the pre-clinical or clinical assessment
of a Development Compound as a potential product in the Field.
1.9 "Evaluation Period" means, for each distinct batch of Library
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Extracts delivered to NeuroSearch, 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 "Validated Hit Extracts" in accordance with
Section 3.6(c) hereof.
1.10 "Field" means pharmaceutical agents for the treatment of diseases
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which interact with K+ channels in humans.
1.11 "Natural Products Chemistry Isolation and Identification" or
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"NPCII" means the process whereby Extracts agreed upon pursuant to Section 3.6
are analyzed by Phytera for the identification of Collaboration Compounds.
1.12 "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 (i) owned
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solely by Phytera, (ii) owned jointly by Phytera and a party other than
NeuroSearch, (iii) licensed solely to Phytera or (iv) licensed jointly to
Phytera and a party other than NeuroSearch, in each case to the extent that
Phytera has the ability to license or sublicense the rights required under this
Agreement. "NeuroSearch Patent Rights" means Patent Rights that are (i) owned
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solely by NeuroSearch, (ii) owned jointly by NeuroSearch and a party other than
Phytera, (iii) licensed
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solely to NeuroSearch or (iv) licensed jointly to NeuroSearch and a party other
than Phytera, in each case to the extent that NeuroSearch has the ability to
license or sublicense the rights required under this Agreement. "Joint Patent
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Rights" means Patent Rights owned by both Phytera and NeuroSearch as joint
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owners. Joint Patent Rights will include (i) Patent Rights claiming Joint
Technology and (ii) Patent Rights claiming both Phytera Technology and
NeuroSearch Technology in a single filing.
1.13. "Progression" or "Progression Strategy" means the processes,
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steps and activities required to advance the assessment of a Collaboration
Compound as a potential Development Compound.
1.14 "Requisite Activity" means desired biological activity observed
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in Library Extracts during Assays, as determined by the Committee pursuant to
Section 2.4(c) of this Agreement.
1.15 "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 (i) owned solely by Phytera, (ii) owned jointly by
Phytera and a party other than NeuroSearch, (iii) licensed solely to Phytera or
(iv) licensed jointly to Phytera and a party other than NeuroSearch, in each
case to the extent that Phytera has the ability to license or sublicense the
rights required under this Agreement. "NeuroSearch Technology" means Technology
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that is (i) owned solely by NeuroSearch, (ii) owned jointly by NeuroSearch and a
party other than Phytera, (iii) licensed solely to NeuroSearch or (iv) licensed
jointly to NeuroSearch and a party other than Phytera, in each case to the
extent that NeuroSearch has the ability to license or sublicense the rights
required under this Agreement. "Joint Technology" means Technology that is
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developed or discovered jointly by one or more employees or consultants of
NeuroSearch and one or more employees or consultants of Phytera in connection
with the Collaborative Research Program, including specifically but without
limitation all Validated Hit Extracts and Lead Molecules.
1.16 "Validated Hit Extract" means a Library Extract that the Committee
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has, based on its review of the Assays performed by NeuroSearch, determined to
possess Requisite Activity. By definition all Validated Hit Extracts constitute
Joint Technology.
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 four (4) members, two of whom shall be
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designated by Phytera and two (2) of which shall be designated by NeuroSearch.
The members initially designated by Phytera are Xxxx Xxxxxxxxx, its Senior
Manager of European Operations, and Xxxxxxxxxxx Pazolee, Vice President of
Research, and the members initially designated by NeuroSearch are Xxxxxx
Xxxxxxx, Director of Cell Buology, and Xxxxxx X. Xxxxx, Head of Molecular
Screening. A Committee member may resign, provided that 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. Although informal and more frequent interactions between Committee
members will occur as necessary for the efficient conduct of the Collaboration,
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
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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 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
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responsible for the day-to-day conduct, progress and evaluation of the
Collaborative Research Program (the "Program") and its activities, including,
without limitation:
(a) planning and efficient prosecution of the Program
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(b) preparation of Quarterly Reports of Program activities
(c) selection and prioritization of Validated Hit Extracts for
NPCII and agreeing to the work plan and budget for these
activities, including the determination of the criteria of
significant biological activity ("Requisite Activity")
necessary for a Library Extract following the completion of
Assays to qualify as a Validated Hit Extract;
(d) selection and prioritization of Collaboration Compounds for
entry into early preclinical studies and agreeing to the
work plan and budget for these activities
(e) selection and prioritization of Collaboration Compounds for
entry into lead optimization and agreeing to the work plan
and budget for these activities
(f) nomination and prioritization of Development Compounds for
entry into development and agreeing to the work plan and
budget for these activities
(g) deciding on the long-term development plan for any
Development Compound and/or on the appropriate stage and
program to seek an outlicense partner
(h) agreeing on any publication strategy for any results, data,
discoveries or compounds from the Program
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, either party may request that the matter be referred to the Chief
Executive Officers ("CEO's") of the parties for resolution. If, in the sole
discretion of either CEO, a meeting between the CEO's is advisable or required
to resolve the matter, such a meeting shall be requested in writing and the
CEO's will endeavor in good faith to meet at the earliest possible time and in a
place of mutual convenience. In the event that the CEO's cannot reach agreement
on the matter in question, the parties agree to submit the dispute to binding
arbitration in accordance with the procedures set forth in Article 13.
3. Conduct of Collaborative Research Program.
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3.1. Objective of Collaboration. The overall objective of this
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Agreement is to discover
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and develop compounds that demonstrate potential as human pharmaceutical agents
for treatment and prevention of diseases which interact with K+ channels.
3.2. Responsibilities of Each Party. Each of the parties shall have the
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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. NeuroSearch agrees to conduct all
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Assays of the delivered Extracts 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 on a timely basis and to conduct
NPCII on Validated Hit Extracts 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 NeuroSearch a license (without the right to sublicense)
under the Phytera Patent Rights and other rights in Phytera Technology to (i)
test Library Extracts for assay interference (as described in Section 3.5(b)
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
NPCII of Validated Hit Extracts, each as set forth in detail on Appendix A.
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3.5. Pilot Phase.
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(a) Delivery of Extracts. The Pilot Phase of the Program
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shall commence
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Pilot Phase, Phytera shall promptly deliver a total of approximately [ ]*
Extracts, approximately [ ]* each of plant and marine origin (the "Pilot
Extracts"), to NeuroSearch.
(b) Conduct of Initial Screens. Promptly following receipt of
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the Pilot Extracts, NeuroSearch shall (i) test such Pilot Extracts for activity
to ensure that Assays are optimally configured for screening and (ii) evaluate
the Pilot Extracts for assay interference. In the event that such interference
is identified, NeuroSearch shall attempt to modify its Assays as necessary in
order to enable successful completion. NeuroSearch shall promptly notify the
Committee of any modification so implemented. NeuroSearch 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
NeuroSearch shall be deemed Confidential Information and, as such, is subject to
the restrictions set forth in Article 10 hereof.
(c) Termination of Research. In the event that NeuroSearch is
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unable to perform successful Assays of any of the Pilot Extracts during the
Pilot Phase (as such Assays may be modified by NeuroSearch), either party may
(but shall have no obligation to) terminate this Agreement upon fifteen (15)
days written notice to the other party; provided, however, that such termination
must occur prior to the commencement of the Program, as described in Section 3.6
below.
3.6. Commencement of the Collaborative Research Program
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(a) Delivery of Extracts. The Program shall commence
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following the successful evaluation of Pilot Extracts in the Assays by
NeuroSearch. It is anticipated that, assuming that one or more Pilot Extracts is
successfully Assayed during the Pilot Phase, the Program shall commence on or
about [ ]*, although the Program may commence on such other date as
shall be designated by the Committee. Upon commencement of the Program Phytera
shall promptly deliver an additional [ ]* plant cell and marine microbe
culture extracts (the "Year One Extracts") to NeuroSearch.
(b) Conduct of Year One Assays. As soon as is reasonably
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practical following the receipt of the Year One Extracts, NeuroSearch shall
initiate screening of such Extracts in accordance with the procedures set forth
on Appendix A hereto. NeuroSearch shall report to Phytera each Extract in which
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its Assays detect signs of Requisite Activity. Phytera shall, in a reasonable
period of time thereafter, provide NeuroSearch with information as to species
(plant) or isolate type (marine microbe) and extract type for each Extract with
Requisite Activity.
(c) Identification and Labeling of Validated Hit Extracts.
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Within 30 days of completion of the Assays on each of the Year One Extracts,
NeuroSearch shall provide 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 which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
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detailed report of all Assays conducted to the Committee. The Committee shall in
its sole discretion label each Library Extract (or combination thereof)
determined by the Committee to possess Requisite Activity as a "Validated Hit
Extract."
(d) Evaluation Meetings. Within thirty (30) days following
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NeuroSearch's completion of Assays on each of the Year One Extracts, the
Committee shall meet to review the results of all of the Assays and evaluate the
overall progress of the Program. The Committee shall determine, based upon the
results of the Assays performed by NeuroSearch whether any of such Extracts
possesses Requisite Activity. If so, the Committee shall then designate between
[ ]* Extracts that have been determined to possess Requisite Activity as
Validated Hit Extracts.
(e) Conduct of NPCII Activities. Within 30 days of the
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Committee designation of Validated Hit Extracts, the Parties will proceed to
conduct NPCII activities on the Validated Hit Extracts. Phytera will conduct
regrowth of cultures to facilitate NPCII and for the fractionation, analytical
characterization and structural identification of compounds responsible for the
Requisite Activity seen in the Assays (such fractionation, analytical
characterization and structural identification constituting the "Chemistry
Effort"). NeuroSearch will conduct Assays as needed to enable Phytera to conduct
NPCII. In addition, NeuroSearch will conduct Assays as needed to validate the
biological activity of isolated active compounds resulting from NPCII
activities. In the event the parties mutually agree that it is preferable to
transfer the Assays from NeuroSearch to Phytera in order to facilitate NPCII,
the parties shall use best efforts to complete such transfer and NeuroSearch
shall grant Phytera a limited-use license to permit Phytera to use the Assays
for the sole purpose of conducting NPCII under this Agreement. In the event the
parties mutually agree that it is preferable to transfer the Chemistry Effort
from Phytera to NeuroSearch in order to facilitate NPCII, the parties shall use
best efforts to complete such transfer and Phytera shall grant NeuroSearch a
limited-use license, to the extent such license may be necessary, to permit
NeuroSearch to conduct the Chemistry Effort for the sole purpose of conducting
NPCII under this Agreement. In the event of Early Termination of this Agreement,
pursuant to Section 5.2, the obligations of the Parties to continue to fund
NPCII activities that are underway, with respect to specific Validated Hit
Extracts at the time notice of Early Termination is received shall survive such
termination. Phytera will identify those Validated Hit Extracts which are
undergoing NPCII at the time of such notice, and no new Validated Hit Extracts
shall be entered into NPCII under this Agreement subsequent to receipt of such
notice of termination.
3.7 Year Two Extracts. At approximately the first anniversary of the
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Effective Date of this Agreement, the Parties shall meet to discuss and agree
upon the expansion of the Program to include additional Extracts (the "Year Two
Extracts"). The Parties may agree to conduct 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 which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
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Program on any number of Extracts that Phytera has available (thereby altering
the number of Extracts in the Library), but it is currently anticipated that
[ ]* Extracts would be designated as Year Two Extracts.
4. Exclusivity
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During the term of this Agreement, Phytera will collaborate exclusively
with NeuroSearch on the K+ channel screens and NeuroSearch will collaborate
exclusively with Phytera with respect to screening natural products extracts
against the K+ channel targets. Notwithstanding the foregoing, the Parties
recognize that it may become necessary or desirable for either party to
collaborate with a third party in a manner that would violate the exclusivity
described above. In such an event, the party seeking to enter into such a third
party collaboration shall notify the other party to that effect and request that
party's consent to the third party collaboration. Notwithstanding the
obligations of the Parties to collaborate exclusively, as described above, [
]*.
5. Term; Early Termination of Program.
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5.1. Term. This Agreement shall commence on the Effective Date and
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shall continue until the earliest to occur of (i) termination of research under
Section 3.5(c), (ii) with respect to the Research Collaboration, the third
anniversary of the Effective Date, subject to extension by mutual agreement
(iii) with respect to activities involving the development and marketing of any
Collaboration Compound, the completion of all such activities related to any
such Collaboration Compound or termination by mutual consent (iv) the
termination of the Program pursuant to Sections 5.2, 5.3 or 5.4 below.
5.2 Early Termination. Either party may terminate this Agreement upon
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providing written notice to the other party no less than 90 days of the
effective date of such termination. Any obligations of the terminating party
that exist at the time of early termination pursuant to this paragraph shall
survive such termination, including but not limited to the obligation to remit
to the other party all payments that become due and payable in accordance with
the terms of this Agreement prior to the effective date of such termination and
to those obligations defined in Section 5.5 and Section 5.6.
5.3 Termination Upon Default. In the event that either party commits
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a material
___________________
* 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.
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breach of its obligations under this Agreement and fails to cure that breach
within sixty (60) days after receiving written notice thereof, the nonbreaching
party may terminate this Agreement immediately upon written notice to the party
in breach.
5.4 Force Majeure. Neither party will be responsible for or
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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.
5.5 Effect of Termination. Except as otherwise agreed by the parties,
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upon the expiration or termination of this Agreement, all of the provisions of
this Agreement shall immediately terminate, except that this Section and
Sections 6 (Development of Joint Technology), 8 (Intellectual Property) and 10
(Confidentiality) of this Agreement shall survive in their entirety. Upon
termination, except as may otherwise be agreed by the parties:
(a) NeuroSearch shall have no further rights under the Phytera Patent
Rights or Phytera Technology;
(b) Phytera shall have no further rights under the NeuroSearch Patent
Rights or NeuroSearch Technology;
(c) NeuroSearch shall grant Phytera an exclusive, worldwide, royalty-
free license (with the right to sublicense) under any Joint
Patent Rights and other rights in Joint Technology to the extent
applicable to the composition or use of the Library Extracts
within the Field;
(d) Phytera shall grant NeuroSearch an exclusive, worldwide, royalty-
free license (with the right to sublicense) under any Joint
Patent Rights and other rights in Joint Technology to the extent
applicable to the Assays within the Field.
5.6 Continuing Development under Early Termination. In the event this
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Agreement is terminated pursuant to Section 5.2 above, the Parties shall
continue the joint development of Collaboration Compound(s) and/or Development
Compound(s) identified prior to such termination, including any such compound(s)
that is or are identified through NPCII activities that are ongoing at the time
of such termination, pursuant to Section 3.6(e). With respect to any identified
Collaboration Compound(s) and/or Development Compound(s), all other terms,
conditions, obligations and agreements related to joint development under this
Agreement shall survive such termination.
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6. Development of Joint Technology.
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6.1 Exploitation of Collaboration/Development Compounds. Within
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ninety (90) days following the identification of one or more Collaboration
Compounds, the Committee shall determine a Progression Strategy for applications
of such Collaboration Compound(s), the objective of which Progression Strategy
is to enable the Committee to assess the Collaboration Compound(s) for possible
entry into pre-clinical development (at which point the Collaboration
Compound(s) would be designated a Development Compound). The intent of the
parties is to progress such Development Compounds through Phase I clinical
trials (or equivalent) prior to seeking a licensing partner. Following Phase I
studies, the Committee shall mutually agree on licensing strategy and tactics
and commercial terms for a license or licenses to a third party or parties.
Licensing activities will be funded on a 50:50 basis and all proceeds from any
license will be shared equally by the Parties.
6.2 Alternative Plans for Exploitation of Development Compounds. The
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Parties may mutually agree to deviate from the intent stated in Section 6.1 as
follows:
(i) to jointly develop a Development Compound beyond Phase I to any
further stage of development, continuing to share costs and
rights on a 50:50 basis, prior to licensing rights to a third
party
(ii) to jointly develop a Development Compound beyond Phase I and
complete the registration and approval requirements for the
product in one or more regions of the world, prior to marketing
jointly, individually or via a marketing partner, continuing to
share costs and rights on a 50:50 basis
(iii) to enable one party (the "Developing Party") to pursue further
development and potential marketing and outlicensing
opportunities in one or more regions of the world, on terms
acceptable to the Non-Developing Party
6.3 Default Mechanism for Development. In the event that the
---------------------------------
Committee is unable to agree on a development strategy, outlicensing tactics, or
commercial terms for a Development Compound within ninety (90) days after the
notice initiating such determination under Section 6.1 above, the impasse will
be resolved by:
(i) NeuroSearch will retain exclusive commercial rights to the
Development Compound in Europe
(ii) Phytera will retain exclusive commercial rights to the
Development Compound in North America
(iii) the Parties will share commercial rights to the Development
Compound in the rest of
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the world and will agree on a strategy to license rights to a
third party or parties. Proceeds from such license or licenses
shall be shared equally by the Parties
(iv) the Parties will share relevant information to assist with the
development of the Development Compound in the respective party's
exclusive territories, or in the non- exclusive territory
(v) each party will receive a royalty of [ ]* on the net sales of the
other party and will receive [ ]* of the other party's outlicense
proceeds in such party's exclusive territory
6.4 Development Outside of the Field. In the event that it is
--------------------------------
discovered that a Collaboration Compound(s) or a Development Compound(s) may
have potential application outside the Field, the Parties will, within 90 days
of such discovery, agree upon a development strategy for such application, which
may involve one or more of the following: (i) co-development of such
Collaboration Compound(s) or Development Compound(s) by the Parties, (ii)
licensing by either party to the other party, or (iii) licensing of such
Collaboration Compound(s) or Development Compound(s) to a third party.
6.5 Election not to Proceed. In the event that either party elects
-----------------------
not to proceed with or to fund its fairly allocated portion of the cost of the
Program at any time prior to the identification of any Development Compound (the
"Non-Developing Party"), the other party shall be entitled to an exclusive
license to pursue the discovery and development and commercialize any resulting
product (the "Developing Party"). Such license shall provide a royalty to the
Non-Developing Party of [ ]* of the Developing Party's net sales and [ ]* of any
outlicense proceeds received by the Developing Party, after deducting the
Developing Party's development costs from such net sales or outlicense proceeds.
Such license shall further provide that the Non-Developing Party shall transfer
to the Developing Party such technology as is required by the Developing Party
to continue development of Development Compound(s), (the "Transferred
Technology") provided that the Developing Party's right to use the Transferred
Technology shall be limited to internal use for the sole purpose of developing
the Development Compound(s), with the right to sublicense or assign the
Transferred Technology to a third party for the sole purpose of developing the
Development Compound(s). In the event the Developing Party desires to sublicense
or assign the Transferred Technology to a third party, it shall so notify the
Non-Developing Party and request the Non-Developing Party's consent to such
sublicense or assignment, such consent not to be unreasonably withheld or
delayed.
7. Allocation of Program Expenses.
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___________________
* 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.
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7.1 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 NeuroSearch for evaluation. NeuroSearch shall be
responsible for all costs associated with performance of the Assays and
reporting of results to the Committee.
7.2 NPCII. Prior to the initiation of NPCII activities, the Committee
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shall review and approve a budget that will reflect all the relevant direct
costs associated with NPCII (collectively, "NPCII Costs"). Budget estimates
shall be furnished by both Phytera and NeuroSearch as soon as practicable
following a determination by the Committee to undertake NPCII with respect to
one or more Validated Hit Extracts. At the time the budget is approved, the
Committee shall agree upon and state in writing the precise terms of cost
reimbursement prior to commencement of NPCII. The intent of the Parties is that
each party shall pay approximately fifty percent (50%) of the NPCII Costs, which
shall reflect the direct cost per full time equivalent ("FTE") to be incurred by
each party and shall be between [ ]* per FTE per twelve (12) month
period (equal to approximately [ ]* Danish kroner).
7.3 Expense Reporting. After the commencement of NPCII activities, each
-----------------
party shall on a calendar quarter basis prepare a report to the Committee
detailing all NPCII Costs incurred by it during such quarter and aggregate NPCII
Costs less reimbursements hereunder. To the extent that any such report shows
aggregate NPCII Costs incurred by one party in an amount exceeding those
incurred by the other by at least [ ]*, the party incurring the lesser
NPCII Costs shall, within [ ]* after receipt of such report, reimburse the
party incurring the greater costs. In the event that the difference between the
NPCII Costs incurred by each party is less, in the aggregate, than [ ]* during
any twelve (12) month period beginning on the Effective Date, the party
incurring the lesser NPCII Costs shall reimburse the party incurring the greater
costs within [ ]* following the receipt of such report of NPCII Costs
incurred during such period. In the event that either party anticipates a
material deviation from the approved budget, such party shall immediately notify
the Committee of such anticipated deviation, specifying the expected amount of
the deviation, the reason(s) for the deviation, and any alternative or remedial
actions that are available. As soon as practical following such notification,
the Committee will decide whether the deviation should be permitted.
8. Ownership and Management of Intellectual Property.
-------------------------------------------------
8.1 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
_________________
* 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.
-13-
of the Program. For example, Phytera shall have sole ownership of all right,
title, and interest in Library Extracts provided to NeuroSearch, and NeuroSearch
shall have sole ownership of all right, title and interest in Assays developed
by NeuroSearch. 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.
8.2 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;
(ii) NeuroSearch shall have sole ownership of all right, title, and
interest in NeuroSearch Patent Rights and NeuroSearch
Technology; and
(iii) Phytera and NeuroSearch 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 Section 6 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.
8.3 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.
8.4 Responsibility for Patent Rights Arising from the Program.
---------------------------------------------------------
(i) 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
NeuroSearch on, and give N NeuroSearch a reasonable opportunity to
review all such filings to the extent they directly relate to the
Program.
(ii) NeuroSearch shall be responsible for and shall control, at its
expense, the preparation, filing, prosecution, grant, and maintenance
of all Patent Rights claiming only NeuroSearch 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
Program.
-14-
(iii) in the case of Joint Technology, NeuroSearch shall be responsible for
and shall facilitate, through its Patent Department, the preparation,
filing, prosecution, grant, and maintenance of all Joint Patent
Rights in Denmark, and for ensuring that such patent activities are
conducted in full compliance with United States requirements, such
that intellectual property rights in the United States are prosecuted
and maintained to the full extent possible. The Committee shall
govern all such patent activities, and Phytera's representatives
shall have the right to comment on patent strategy, the preparation,
filing and prosecution of all patent applications related to Joint
Patent Rights. Further, Phytera shall have the right to take whatever
actions it deems, in its sole discretion, to be necessary to protect
U.S. rights under any patent applications prepared, filed or
prosecuted in Denmark by NeuroSearch, provided that Phytera shall
notify NeuroSearch prior to taking any such action and shall,
whenever possible without comprising Phytera's ability, in Phytera's
sole discretion, to protect said rights, provide NeuroSearch the
opportunity to comment on the actions Phytera is contemplating.
(iv) regarding Patent Rights, it will be the responsibility of the
Committee to decide how all material patent matters related to or
resulting from the Program shall be resolved, including without
limitation (a) whether to seek Joint Patent Rights claiming that
Joint Technology or to maintain that Joint Technology as a trade
secret (b) whether to seek Patent Rights claiming both Phytera
Technology and NeuroSearch Technology in one filing, which also
constitutes a Joint Patent Right
(v) all expenses related to the preparation, filing, prosecution, grant,
and maintenance of all Joint Patent Rights shall be borne equally by
the parties.
8.5 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.
8.6 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,
-15-
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.
8.7 Abandonment of Joint Patent Rights. In the event that the parties
----------------------------------
fail to complete the Program , for whatever reason, the parties shall discuss in
good faith whether to abandon any pending or 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 5.5.
9. Research Materials.
------------------
9.1 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,
NeuroSearch acknowledges and agrees that all Library Extracts provided to
NeuroSearch in the Program are proprietary to and owned by Phytera and are or
may be covered by claims of Phytera Patent Rights.
9.2 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.
9.3 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 9.3.
9.4 Disposition of Unused Research Materials. At the request of
----------------------------------------
Provider, Recipient will return or destroy any unused research materials
furnished by Provider.
9.5 Compliance with Law. Recipient agrees to comply with all laws and
-------------------
regulations applicable to the use, storage, disposal, and transfer of research
materials furnished by Provider. Recipient assumes sole responsibility for any
violation of such laws or regulations by Recipient or any of its Affiliates or
Sublicensees.
-16-
9.6 Limitation of Liability. Any research materials delivered pursuant
-----------------------
to this Agreement are understood to be experimental in nature and may have
hazardous properties. Recipient should assume that the compounds are dangerous
and should use appropriate precautions. PROVIDER MAKES NO REPRESENTATIONS, AND
EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO
THE RESEARCH MATERIALS FURNISHED TO RECIPIENT. THERE ARE NO EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE
USE OF THE RESEARCH MATERIALS WILL NOT INFRINGE ANY PATENT OR OTHER INTELLECTUAL
PROPERTY RIGHTS OF A THIRD PARTY.
10. Confidentiality.
---------------
10.1 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 Validated Hit 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
NeuroSearch'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
NeuroSearch, respectively, and their respective Affiliates.
10.2 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 ten (10) days 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.
-17-
(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 10.2.
10.3 Limitations. The undertakings in Paragraphs (a) and (b) of this
-----------
Section 10.2 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.
10.4 Samples. NeuroSearch 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 9 of this Agreement.
10.5 Publications.
------------
(a) Procedure. Phytera and NeuroSearch recognize the need to
---------
obtain valid patent protection. Consequently, Phytera, NeuroSearch and their
respective employees and consultants and any other Third Party wishing to make a
publication (including any oral disclosure made 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.
10.6 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 10 by
-18-
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
10. It is understood that such injunctive relief is intended solely as
provisional relief pending the dispute resolution procedures described in
Section 13 below.
11. Representations and Warranties.
------------------------------
11.1 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.
11.2 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.
12. Indemnity.
---------
12.1 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) 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.
12.2 Procedure. Promptly after learning of the occurrence of any event
---------
which gives rise to its rights under the provisions of Section 12.1, 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.
13. Arbitration.
-----------
-19-
Licensor and Licensee shall devote all reasonable efforts to amicably
resolve any disputes between them concerning their respective rights and
obligations under the Agreement. However, if the parties are unable to resolve a
dispute within sixty (60) days following the day on which either party provides
written notice of the dispute to the other party, the dispute will be resolved
or settled at the request of either party by arbitration to be conducted in
London, in accordance with the rules of the International Chamber of Commerce by
three (3) arbitrators selected by the parties in conformity with those rules. In
addition to dealing with the merits of the case, the arbitration award shall fix
the costs of the arbitration and decide which of the parties shall bear such
costs or in which proportion such costs shall be borne by the parties. The
language of the arbitration shall be the English language. The decision of the
arbitrators shall be final and binding upon the parties and their respective
Affiliates and the parties hereby waive their respective rights to any form of
appeal therefrom. Notwithstanding anything contained above to the contrary,
issues involving the validity of patents will be decided by the courts or patent
offices of the country which issued the patents in question. Both parties shall.
continue their respective obligations under the Agreement during any such
arbitration proceedings.
14. Miscellaneous.
-------------
14.1. Publicity. Except as provided in Section 9.5 above, no press
---------
release, advertising, 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 NeuroSearch, 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.
14.2 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.
14.3 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.
14.4 Headings. All headings in this Agreement are for convenience only and
--------
shall not affect the meaning of any provision hereof.
-20-
14.5 Binding Effect. This Agreement shall inure to the benefit of and be
--------------
binding upon the parties and their respective lawful successors and assigns.
14.6 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.
14.7 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 NeuroSearch:
XxxxxXxxxxx X/X
00X Xxxxxxxxx
XX-0000
Xxxxxxxx, Xxxxxxx
Attn: Dr. J0rgen Xxxx Xxxxxx, President
If to Phytera:
Phytera, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxxxxx, President
Either party may change its designated address and facsimile number by notice to
the other party in the manner provided in this Section 14.7.
14.8 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.
14.9 Governing Law. This Agreement and the legal relations among the
-------------
parties shall be governed by and construed in accordance with the laws of the
United Kingdom, irrespective of any conflict of laws principles.
-21-
14.10 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.
14.11 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.
-22-
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.
NEUROSEARCH A/S
By: /s/ Xxxxxx Xxxx Xxxxxx
----------------------------------------
Xx. Xxxxxx Xxxx Lassen
President and Chief Executive Officer
PHYTERA, INC.
By: /s/ Xxxxxxx XxXxxxx
----------------------------------------
Xxxxxxx XxXxxxx
Vice President and Chief Financial Officer
-23-
Appendix A
[
]*
_____________________
* This portion of the Exhibit has been omitted pursuant to a Request for the
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.
-24-
