EXHIBIT 10.1
CONFIDENTIAL TREATMENT REQUESTED
AGREEMENT
This AGREEMENT ("Agreement"), effective this 25th day of November, 1996 is
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between AMERICAN HOME PRODUCTS CORPORATION, a corporation of Delaware acting
through its WYETH-AYERST LABORATORIES division ("Wyeth-Ayerst") and NEUROGEN
CORPORATION, a corporation having a place of business in Branford, CT.
("Neurogen")
WHEREAS, Neurogen has entered into an exclusive license agreement ("NTIS
Agreement", which is attached hereto as Exhibit 1) on January 1, 1992 with the
National Technical Information Service ("NTIS"), a primary operating unit of the
United States Department of Commerce pursuant to which Neurogen has certain
rights under patents owned by the United States of America as represented by the
Department of Health and Human Services to make, have made, use, sell, and have
sold the compound designated ADCI (hereinafter fully defined) and to practice a
process for the preparation of ADCI; and
WHEREAS, the said Agreement with NTIS as amended by the National Institutes
of Health ("NIH") on July 20, 1996, (attached hereto as Exhibit 2) grants
Neurogen the right to sublicense its license rights to a nonaffiliated company
during the term of that Agreement with the prior approval of the NTIS; and
WHEREAS, Neurogen also owns patent rights on improved processes for the
preparation of ADCI, as well as certain other rights in Technological Data (as
defined below), which rights can be directly licensed to a Neurogen sublicensee;
and
WHEREAS Neurogen wishes to sublicense its rights under the NTIS Agreement
to ADCI and to license its patent rights in improved processes for preparing
ADCI and other rights in Technological Data to Wyeth-Ayerst; and
WHEREAS Wyeth-Ayerst wishes to he granted a sublicense to Neurogen's
licensed rights to ADCI and a license to Neurogen's patent rights to improved
processes for the preparation of ADCI and other rights in Technological Data;
NOW, THEREFORE, Wyeth-Ayerst and Neurogen agree as follows:
ARTICLE 1. DEFINITIONS
1.1 "ADCI" shall mean [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
1.2 "Affiliate" shall mean any corporation or other business entity, which
either directly or indirectly controls a party to this Agreement, is controlled
by such party, or is under common control of such party. As used herein, the
term "control"
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means possession of the power to direct or cause the direction of the management
and policies of a corporation or other entity whether through the ownership of
voting securities, by contract or otherwise. As relates to this Agreement,
Affiliate shall not mean [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] unless American Home Products
Corporation (AHPC) shall have acquired all of the voting stock thereof, or if
governance covenants currently limiting AHPC control of said companies are
otherwise lifted.
1.3 ""Neurogen Patents" shall mean any and all patents and patent
applications for letters patent licensed to or owned by Neurogen as of the date
of this Agreement, which are directed to ADCI and the processes for the
preparation thereof and which are listed in Schedule A attached hereto, any
patents issuing from such applications, all divisions, continuations,
continuations-in-part and all patents granted thereon; as well as all other
patents, including any reissues, renewals, reexaminations, extensions or patents
of addition thereto, all of which have not lapsed, become abandoned or been
declared invalid or unenforceable by a final decision or judgment of a court or
tribunal of competent jurisdiction.
1.4 "Wyeth-Ayerst Patents" shall mean any and all patents and patent
applications which are licensed to or owned by Wyeth-Ayerst, which are directed
to any Improvements to ADCI, the processes for the preparation thereof, or to
Product, any patent issuing from such applications, all divisions,
continuations, continuations-in-part and all patents granted thereon; as well as
all other patents, including any reissues, renewals, reexaminations, extensions
or patents of addition thereto, all of which have not lapsed, become abandoned
or been declared invalid or unenforceable by a final decision or judgment of a
court or tribunal of competent jurisdiction.
1.5 "Improvements" shall mean [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
1.6 "Technological Data" shall mean any technical data or information
which Neurogen possesses and has rights to license hereunder relating to ADCI,
the processes for the preparation thereof and Product which may be necessary or
useful to exercise the rights granted under this Agreement and to obtain
regulatory approval of the Product in the Territory. The term includes without
limitation specifications or equipment necessary for preparation of ADCI,
manufacture, methods of production, and formulation of the Product, the chemical
and physical properties of ADCI, preclinical and clinical studies including
safety and efficacy data relative to current and future therapeutic indications
for the Product, procedures of testing and requirements of control. The term
shall also include copies of all registration dossiers submitted to drug
regulatory authorities relating to the Product.
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1.7 "Product" shall mean [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
1.8 "Net Sales" shall mean [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
1.9 "Territory" shall mean the entire world
1. 10 "Trademark" shall have the meaning set forth in Article 17.
ARTICLE 2. GRANT OF LICENSE
2.1 Neurogen hereby grants to Wyeth-Ayerst for the consideration specified
hereinafter, an exclusive sublicense of all rights under Neurogen Patents
arising from the NTIS Agreement and under Technological Data to make and have
made ADCI and to make, have made, use, sell, and have sold Products formulated
with ADCI in the Licensed Territory (as such term is defined in the NTIS
Agreement).
2.2 Neurogen hereby grants to Wyeth-Ayerst for consideration specified
hereinafter an exclusive license under Neurogen Patents and Technological Data
directed to improved processes for the preparation of ADCI to make and have made
ADCI in the Territory.
2.3 Wyeth-Ayerst hereby accepts the grants made in Article 2.1 and 2.2 and
recognizes and accepts the reservations of rights by and on behalf of the United
States Government provided for in Article III of the NTIS Agreement.
ARTICLE 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
Each party hereby represents and warrants to the other party as follows:
3.1 Such party (a) is a corporation duly organized, validly existing and
in good standing under the laws of the state in which it is incorporated, (b)
has the corporate power and authority and the legal right to own and operate its
property and assets, to lease the property and assets it operates under lease,
and to carry on its business as it is now being conducted, and (c) is in
compliance with all requirements of applicable law, except to the extent that
any noncompliance would not have a material adverse effect on the properties,
business, financial or other condition of such party and would not materially
adversely affect such party's ability to perform its obligations under this
Agreement.
3.2 Such party (a) has the corporate power and authority and the legal
right to enter into this Agreement and to perform its obligations hereunder, and
(b) has taken all necessary corporate action on its part to authorize the
execution and delivery of this
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Agreement and the performance of its obligations hereunder. This Agreement has
been duly executed and delivered on behalf of such party, and constitutes a
legal, valid, binding obligation, enforceable against such party in accordance
with its terms.
3.3 All necessary consents, approvals and authorizations of all
governmental authorities and other persons required to be obtained by such party
in connection with the execution, delivery and performance of this Agreement
have been and shall be obtained.
3.4 Notwithstanding anything to the contrary in this Agreement, the
execution and delivery of this Agreement and the performance of such party's
obligations hereunder (a) do not conflict with or violate any requirement of
applicable laws or regulations and (b) do not and shall not conflict with,
violate or breach or constitute a default or require any consent under, any
contractual obligation of such party, except such consents as have been received
prior to the date hereof.
3.5 All royalties (but not other payments) that are or may become due by
Neurogen to the National Technical Information Services (NTIS) as a result of
Section 4.3 of the NTIS Agreement shall remain the sole responsibility of
Neurogen, except as may be specifically provided for otherwise in this
Agreement, it being further understood that the royalty payments to be made by
Wyeth-Ayerst to Neurogen are inclusive of the royalty payments payable by
Neurogen to NTIS. Neurogen agrees to indemnify Wyeth-Ayerst against any loss,
damage or other liability which may be sustained by Wyeth-Ayerst as a
consequence of any failure of Neurogen to make any such payment; provided that
Wyeth-Ayerst has made all royalty payments due to Neurogen hereunder within the
required time.
3.6 Neurogen shall not take any action provided for in Article VIII of the
NTIS Agreement to terminate the NTIS Agreement, including without limitation
modification or termination of the NTIS Agreement, without the express written
approval or consent of Wyeth-Ayerst, unless required by regulation or law, in
which case Neurogen shall immediately notify Wyeth-Ayerst in writing of the
action so required. Any action taken by Neurogen contemplated by this Article
3.6 without such written consent and approval shall be deemed a breach and basis
for immediate termination of this Agreement as provided for in Article 22
hereof.
3.7 Such party (a) owns or is the licensee of the patent applications
listed on the attached Schedule A; (b) has received no notice of infringement or
misappropriation of any alleged rights asserted by any third party in relation
to any technology to be used by it in connection with the grant of the licenses
herein; (c) is not in default with respect to any license agreement related to
the grant of the licenses herein; and (d) is not aware of any patent, trade
secret or other right of any third party which could materially adversely affect
its ability to carry out its responsibilities under this Agreement or the other
party's ability to exercise or exploit any license granted to it under this
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Agreement. Such party agrees to immediately notify the other party in writing in
the event such party hereafter receives a notice of the type referred to in (b)
above, becomes in default under any license agreement referred to in (c) above,
or becomes aware of any patent, trade secret or other right of the nature
referred to in (d) above.
3.8 Nothing in this Agreement shall be construed as a representation made,
or warranty given, by Neurogen or AHPC (a) that any patent will issue based upon
any pending patent application within the patent rights, (b) that any patent
within the patent rights which issues will be valid, or (c) that, except for the
provisions of Article 3.7 herein which shall not be affected by this Article
3.8, the use of any license granted hereunder or the use of any patent rights
will not infringe the patent or proprietary rights of any other person.
Furthermore, neither Neurogen nor AHPC makes any representations or warranties,
express or implied, with respect to the patent rights except as provided in
Article 3.7.
ARTICLE 4. IMPROVEMENTS
4.1 It is hereby mutually agreed that any Improvement, whether believed to
be patentable or unpatentable, shall be communicated by the party making or
discovering the Improvement to the other party to this Agreement within sixty
(60) days after the Improvement is first reduced to writing.
4.2 All Neurogen or joint Neurogen/Wyeth-Ayerst Improvements, whether
patented or not, shall be part of the patent rights sublicensed and licensed by
Neurogen to Wyeth-Ayerst during the term of this Agreement.
4.3 Each party has sole right, title, and interest in and to any
patentable Improvement [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]
4.4 Neurogen and Wyeth-Ayerst both agree to submit to the other for
consideration and advice all patent applications for any Improvement before
filing same, to transmit promptly to the other each action and
correspondence as soon as received from the relevant patent office, to submit to
the other for consideration and advice all responses to and correspondence with
the relevant patent office before filing same, and to give due consideration to
the advice of the other in this regard. The party having title to the
Improvement, however, shall have ultimate authority and responsibility for all
patent applications, responses to and correspondence with the relevant patent
offices.
4.5 If a party does not desire to obtain or maintain patent protection on
any patentable Improvement invented solely or jointly by its employees or
consultants, then it shall notify the other party of such decision and, unless
there is reason to maintain the
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Improvement as a trade secret, the other party shall have the right, but not the
obligation, to obtain and maintain patent protection [CONFIDENTIAL PORTION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] and
shall have sole right, title, and interest in and to any patents on the
Improvement.
ARTICLE 5. NTIS AGREEMENT
5.1 Wyeth-Ayerst acknowledges Neurogen's obligations under the NTIS
Agreement, and all of the limitations, restrictions and conditions on Neurogen's
rights under the NTIS Agreement. Notwithstanding any other terms of this
Agreement. Wyeth-Ayerst agrees to honor all such limitations, restrictions and
conditions as if it were Neurogen and to perform on Neurogen's behalf all of the
obligations of Neurogen under the NTIS Agreement, other than the payment of
royalties pursuant to Articles 4.3 through 4.9 of the NTIS Agreement (which
shall be paid by Neurogen out of the royalties Neurogen receives from Wyeth-
Ayerst). [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION].
ARTICLE 6. WYETH-AYERST'S DEVELOPMENT OBLIGATIONS
6.1 Wyeth-Ayerst acknowledges Neurogen's obligations regarding development
of ADCI as provided for in Article VII of the NTIS Agreement and [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. To the extent that NTIS agrees to modify the requirements of that
Article VII, or to waive any failure to perform the requirements thereof Wyeth-
Ayerst's obligations to Neurogen hereunder shall similarly be modified or
waived.
6.2 As soon as practical and not later than one (1) month after execution
of this Agreement, Neurogen shall disclose to Wyeth-Ayerst all Technological
Data (to the extent not previously made available to Wyeth-Ayerst) relating to
ADCI.
6.3 As regards the development to be conducted for the registration of the
Product in the U.S.A., the parties agree that filing IND by the end of
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] and NDA in [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] represents a reasonable
goal, and Wyeth-Ayerst shall endeavor to achieve each of the aforesaid steps in
due time. Three months prior to each of the above mentioned dates, the parties
will meet in order to examine the stage of the development and if any delay has
occurred, examine the reasons thereof and/or seek possible remedies thereto. If
Wyeth-Ayerst can provide no reasonable justification for such delay, Neurogen
shall be entitled to provide written notice to Wyeth-Ayerst of Wyeth-Ayerst's
failure of adequate performance, and if Wyeth-Ayerst within 60 days cannot
provide a plan reasonably acceptable to Neurogen to rectify the alleged
unfounded delay
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Neurogen shall [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]. Nothing in this Article 6.3 shall be
interpreted to modify Article 6.1 or excuse any failure to perform Article 6.1
6.4 It is hereby understood and agreed that with respect to [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], Wyeth-Ayerst shall be [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
ARTICLE 7. APPROVAL
7.1 Wyeth-Ayerst shall use its [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] efforts to secure
registrations for the Product in all countries of the Territory, [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
7.2 Neurogen shall be entitled to inspect the registration dossiers prior
to the filing of the application. Three months after filing, at the latest,
Wyeth-Ayerst shall provide Neurogen with a copy of the registration dossier.
7.3 Wyeth-Ayerst shall provide Neurogen with copies of all approvals
granted by regulatory authorities throughout the world to Wyeth-Ayerst regarding
the Product.
ARTICLE 8. PAYMENTS
8.1 Wyeth-Ayerst agrees to pay Neurogen, subject to Neurogen's option to
forego the equity payments described in Article 8.1(b) below as set forth in the
Stock Purchase Agreement, the following amounts upon the achievement of the
events indicated:
a) upon execution of this Agreement, $750,000 in cash and $750,000 in
equity, which latter payment shall be effectuated as provided in Article
1.1(a) of the Stock Purchase Agreement entered into by the parties on even
date with this Agreement (the Stock Purchase Agreement);
b) as equity payments as provided in Articles 1.1(b) and (c) of the Stock
Purchase Agreement:
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
c) as cash payments:
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
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None of the payments or equity investments described in this Article 8.1
shall be refundable.
ARTICLE 9. DIRECT LICENSES
9.1 If necessary for commercialization of the Product, Wyeth-Ayerst may at
any time request from Neurogen and Neurogen agrees to grant directly to Wyeth-
Ayerst Affiliates in any countries of the Territory equivalent rights as granted
to Wyeth-Ayerst, subject to any approval by NTIS required under the NTIS
Agreement. Accordingly, upon receipt of Wyeth-Ayerst's request, Neurogen shall
enter into and sign a separate direct sublicense/license agreement or
agreements with the companies designated by Wyeth-Ayerst in the request. All
direct sublicense/license agreements entering into force under this paragraph
shall be prepared by Wyeth-Ayerst and shall contain terms and conditions which
are consistent with those of this Agreement, subject only to such modifications
as may be required by the laws or regulations of the country to be demonstrated
by Wyeth-Ayerst in which such direct sublicense/license still be exercised,
including, but not limited to changes in the rate of royalty restrictions
against the remittance thereof, and limitations upon the term of duration of
said direct sublicense/license agreement. Notwithstanding the foregoing,
Neurogen shall not be required to enter into any agreement on terms which, in
the aggregate, are less favorable than those set forth in this Agreement. In
those countries in which the validity of such a direct sublicense/license
agreement requires prior government approval or registration, such direct
sublicense/license agreement shall not be binding or have any force or effect
until the required governmental approval or registration has been granted.
ARTICLE 10. ADCI AND PRODUCT MANUFACTURE
Wyeth-Ayerst shall have the exclusive right to make or have made all of its
requirements of ADCI and Product for development and commercial marketing
purposes throughout the Territory, based on its exclusive rights granted
pursuant to this Agreement.
10.1 Wyeth-Ayerst represents and warrants that its production and quality
control of ADCI and Product shall meet all appropriate standards set by the Food
and Drug Administration (FDA) and other appropriate regulatory agencies,
including those of Good Manufacturing Practices (GMP). Wyeth-Ayerst shall
maintain the registration of the manufacturing facilities with the appropriate
regulatory authorities insofar as necessary or advisable in order to maintain
the supply of ADCI.
10.2 Wyeth-Ayerst or its Affiliate shall manufacture, analyze and store the
Product in accordance with the Technological Data and by applying manufacturing,
analytical and storage instructions as defined by GMP standards.
ARTICLE 11. MARKETING OF THE PRODUCT
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11.1 Wyeth-Ayerst shall use [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] efforts to promote the
sales of the Product in the Territory.
11.2 As soon as practical before NDA approval, and by the first day of each
calendar year at the latest, Wyeth-Ayerst shall provide Neurogen with Wyeth-
Ayerst's good faith sales forecast for the forthcoming two (2) year period. Such
forecast shall include Wyeth-Ayerst's intended promotional activities for each
ensuing year of reference. Thereafter on an annual basis until the sixth year of
sales in major countries of the world, Wyeth-Ayerst will continue to provide to
Neurogen such rolling two (2) year sales forecasts.
11.3 In its written and verbal information to the medical profession and
patients, Wyeth-Ayerst shall represent the Product in a manner consistent with
the Technological Data.
ARTICLE 12. ROYALTIES
12.1 In consideration of the rights granted to Wyeth-Ayerst by Neurogen
under Article 2 hereof, Wyeth-Ayerst shall pay Neurogen a royalty for Product
sold in the Territory by Wyeth-Ayerst, Wyeth-Ayerst's Affiliates and all direct
and indirect sublicenses under such rights.
12.2 During the term of this Agreement, and subject to the potential
limitation set forth in this Article 12.2, Wyeth-Ayerst shall continue to pay to
Neurogen royalties equivalent to the specific percentages of the Net Sales of
Wyeth-Ayerst, its Affiliates and all direct and indirect sublicenses, as
indicated below, in the Territory:
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
12.3 No royalties as set forth in this Article shall be payable on
intercompany sales transactions as between or among Wyeth-Ayerst or by sale of
Product by Wyeth-Ayerst to its distributors, the final vendee sale to the trade,
alone being used for the purposes of determining the royalty payments due
hereunder. The Product, subject to royalty payment, shall be deemed sold when
invoiced or if not invoiced, when the same shall he shipped or delivered to the
third party.
12.4 The royalties provided for herein shall accrue and be payable by
Wyeth-Ayerst in national currency, where earned, and shall be paid to Neurogen
within forty-five (45) days following the end of each calendar quarter in which
the royalty is earned, provided that:
a) if law or regulation permits the conversion of such currency into
U.S. dollars, the same shall be converted into
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the equivalent value in U.S. currency in accordance with Article 4.6 of the
NTIS Agreement and paid in U.S. currency to Neurogen;
b) if the conversion into and/or remittance of U.S. currency is
subject to administrative authorization, appropriate action will be taken
with the competent authorities applying diligent efforts to obtain such
authorization so as to pay the royalty in U.S. currency within the time
stipulated for payment of the royalty; and
c) if by law, regulations or fiscal policy of a country, conversion
into or transfer of U.S. currency is restricted or forbidden, the payment
of such royalty by Wyeth-Ayerst shall be made in U.S. Dollars out of
separate Wyeth-Ayerst funds; and
d) if any royalty payments are overdue, late charges will be applied
on the full amount of the late payment at the rates required by the
Department of Treasury and imposed on Neurogen's payments to NTIS, as
provided in Article 4.6 of the NTIS Agreement.
12.5 Each royalty payment shall be accompanied by a report in writing
showing for each country the period for which said payment is made, the Net
Sales of the Product during said period, the number of units sold (separately
listed according to the presentations and packing sizes) and the amount of
royalty accrued thereon. Within forty-five (45) days after each June 30th and
December 31st, Wyeth-Ayerst shall submit to Neurogen reports as required under
Article 4.5 of the NTIS Agreement.
12.6 Wyeth-Ayerst shall keep records as provided in Article 4.7 of the NTIS
Agreement and make them available for inspection by NTIS and Neurogen in
accordance with that Article 4.7.
12.7 All taxes, assessments, fees and charges, if any, levied under income
tax laws or regulations with respect to payments due to Neurogen hereunder
(other than such amounts levied with respect to the [CONFIDENTIAL PORTION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
royalty owed by Neurogen to NTIS) shall be for the account of Neurogen and will
be deducted by Wyeth-Ayerst and Wyeth International Limited (serving as Wyeth-
Ayerst's agent for administering the rights and obligations of Wyeth-Ayerst
arising under this Agreement in countries outside the United States, its
territories, possessions, and the Commonwealth of Puerto Rico) and/or the Wyeth-
Ayerst Affiliates from such payments due to Neurogen. Amounts levied with
respect to the [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] royalty owed by Neurogen to NTIS shall be
for the account of Wyeth-Ayerst and will not be so deducted from royalty
payments due to Neurogen. Receipts for all such taxes, assessments, fees and
charges advanced by
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Wyeth-Ayerst, Wyeth-Ayerst International Inc., and/or the Wyeth-Ayerst
Affiliates to the taxing authorities will be secured by Wyeth-Ayerst, Wyeth
International, and/or the Wyeth-Ayerst Affiliates and sent to Neurogen.
ARTICLE 13. EXCHANGE OF EXPERIENCE
13.1 The parties hereto shall promptly and fully inform each other of any
side effects or adverse reactions or suspected side effects or adverse reactions
encountered by, or reported to them in respect of the Product. They shall confer
regarding the best measures to be taken in view thereof; provided, however, that
either party shall be free to report such adverse reactions or suspected side
effects to governmental agencies as required by law or regulation.
ARTICLE 14. IMPROVEMENTS
14.1 All Improvements to the Product owned by either party during the term
of the Agreement, if not patented, shall be disclosed to the other party and,
on Wyeth-Ayerst's request, Neurogen shall grant to Wyeth-Ayerst a royalty-free
license to utilize such Neurogen Improvements with regard to the manufacture,
use or sale of the Product. Such improvements which are patented by either party
during the term of the Agreement shall be disclosed to the other party and, on
Wyeth-Ayerst's request, during the term of this Agreement, Neurogen shall grant
to Wyeth-Ayerst a royalty-free license to utilize such Neurogen Improvements
with regard to the manufacture, use or sale of the Product for the term of the
Agreement. Prior to termination of the Agreement, the parties shall negotiate an
agreement (which shall survive this Agreement) for a license at a royalty not to
exceed [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] of Net Sales in the aggregate for any Product dominated
by such Improvement patent or patents for the balance of their term.
ARTICLE 15. PATENT RIGHTS
15.1 Neurogen shall retain full title to all Neurogen Patents licensed
hereunder, except that NTIS retains title to the patents covered by the NTIS
Agreement.
15.2 [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] shall he responsible for maintaining all Neurogen
Patents sublicensed and licensed to Wyeth-Ayerst hereunder, at its own expense.
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] shall be responsible for making payments to NTIS to
compensate NTIS for the prosecution and maintenance of the NTIS patents as
provided in Articles 4.2 and 4.10 of the NTIS Agreement. [CONFIDENTIAL PORTION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shall
be responsible for prosecuting and maintaining at its own expense any patents
and patent applications that may hereafter be filed in its own name.
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15.3 Should Neurogen wish to abandon any licensed Neurogen Patent, it will
first offer Wyeth-Ayerst the opportunity of continuing at its own expense with
the maintenance of the patents involved.
15.4 Wyeth-Ayerst shall be entitled on a country basis to terminate its
sublicense or license to any Neurogen Patent and/or any Neurogen Improvement
patent which, in its sole opinion, it shall deem unnecessary to its commercial
interests with respect to Product; provided however that if Wyeth-Ayerst
continues to sell Product in any country where it has terminated its license or
sublicense hereunder, and so long as there is an unexpired or valid patent
licensed or sublicensed hereunder, Wyeth-Ayerst shall continue to pay royalties
as provided in Article 12, and that termination of payments to NTIS under
Article 4.2 of 4.10 of the NTIS Agreement with respect to any NTIS patent shall
be a breach of this Agreement. In the event Wyeth-Ayerst so terminates, Wyeth-
Ayerst shall not be further responsible for the maintenance of any such
terminated patent right(s).
15.5 With respect to any Neurogen Patent (other than the NTIS patents),
Neurogen will designate Wyeth-Ayerst as its agent for obtaining an extension of
such patent or governmental equivalent which extends the exclusivity of any of
the patent subject matter where available in any country in the Territory, or if
not feasible, at [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] option, permit Wyeth-Ayerst to file in
Neurogen's name or diligently obtain such extension for Wyeth-Ayerst or its
Affiliate(s) at [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] expense. Furthermore, Neurogen agrees to
provide reasonable assistance, at no out-of-pocket expense, to facilitate Wyeth-
Ayerst's efforts to obtain any extensions of any Neurogen Patent, including the
NTIS patents.
ARTICLE 16. TRADEMARKS
16.1 During the term of development of Product using ADCI, and before
actual marketing of Product, Wyeth-Ayerst shall select trademark(s) for
Products.
16.2 Wyeth-Ayerst shall bear the cost of the filing and renewal of
trademark applications for the trademark(s) and the costs associated with any
other activities relating to perfecting rights in and to trademark(s) in any
country of the Territory. Wyeth-Ayerst shall own all rights, title, and interest
in and to the trademark(s) in its own name or that of its Affiliates during and
after the term of this Agreement.
ARTICLE 17. MARKINGS
17.1 Wyeth-Ayerst shall identify Product in accord with the provisions of
Article V of the NTIS Agreement.
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ARTICLE 18. ENFORCEMENT
18.1 Wyeth-Ayerst is cognizant of the obligations of Neurogen and the
United States Government, as the respective parties to the NTIS Agreement,
regarding the issue of elimination of possible infringement of the United States
Government-owned patents licensed to Neurogen under the NTIS Agreement. In the
event Wyeth-Ayerst becomes aware of possible infringement of any Neurogen Patent
licensed to Neurogen by the United States Government, Wyeth-Ayerst will then
proceed in accordance with Article VI of the NTIS Agreement as a sublicensee of
Neurogen, and in accordance with any modifications to the terms and conditions
of Article VI of the NTIS Agreement, which arise as a result of the modification
to the exclusivity term of the NTIS Agreement as a result of the July 20, 1996
NIH Amendment of the NTIS Agreement.
18.2 With respect to any Neurogen Patents owned directly by Neurogen or any
Neurogen Improvement patents, if Wyeth-Ayerst becomes aware of possible
infringement thereof, Wyeth-Ayerst will so notify Neurogen. Wyeth-Ayerst can by
itself take proceedings, in the name of Neurogen and/or Wyeth-Ayerst, to
restrain such infringement. Such proceedings are at Wyeth-Ayerst's sole expense,
and Neurogen shall reasonably cooperate, at Wyeth-Ayerst's expense, with Wyeth-
Ayerst in these proceedings. Any damages and costs recovered are for Wyeth-
Ayerst's sole benefit, except that Wyeth-Ayerst shall pay to Neurogen from such
damages and costs an amount equal to the royalties which would have been due
Neurogen if the infringing sales had been made by Wyeth-Ayerst or its
Affiliates. At said proceedings, Neurogen can be represented by its own counsel,
at Neurogen's own expense.
If Wyeth-Ayerst reasonably concludes that a license under any third party patent
is necessary in order to make, use or sell Products in the Territory, and if
neither Wyeth-Ayerst nor Neurogen are able to obtain such license on terms
reasonably acceptable to both, then Wyeth-Ayerst and Neurogen shall negotiate in
good faith to reach an agreement on the return of all or a portion of the
payments made, and the related shares of common stock issued, pursuant to
Article 8 and a termination of the licenses granted hereunder in the case where
Wyeth-Ayerst reasonably concludes that Wyeth-Ayerst, without such license, would
be precluded from selling Products in the Territory.
ARTICLE 19. INDEMNITY
19.1 Wyeth-Ayerst shall indemnify and hold Neurogen and its Affiliates
harmless, and hereby forever releases and discharges Neurogen, and its
Affiliates, from and against all claims, demands, liabilities, damages and
expenses, including attorneys' fees and costs (collectively, "Liabilities")
arising out of the development, manufacture, use or sale of Products hereunder
including but not limited to all Liabilities suffered or incurred in connection
with third party claims for personal injuries or any product recall; except in
each case to the extent such Liabilities resulted from
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gross negligence, recklessness or intentional misconduct of Neurogen. Neurogen
shall indemnify and hold Wyeth-Ayerst and its Affiliates and direct
licensees/sublicenses harmless and forever release and discharge Wyeth-Ayerst
and its Affiliates and direct licensees/sublicenses from and against all claims,
demands, liabilities, damages and expenses, including attorney's fees and costs
(collectively, "Liabilities") arising out of any gross negligence, recklessness
or intentional misconduct by Neurogen during Neurogen's development of ADCI up
to the effective date of this Agreement, including all toxicology and other
preclinical studies done by Neurogen or its agents and subcontractors, including
but not limited to Liabilities suffered or incurred in connection with third
party claims for personal injuries or any product recall. The provisions of
this Article 19 shall remain in force indefinitely following the term of this
Agreement.
ARTICLE 20. CONFIDENTIALITY
20.1 All confidential information relating to each of ADCI and Product made
available by or on behalf of Neurogen to Wyeth-Ayerst or by Wyeth-Ayerst to
Neurogen shall be kept secret and confidential by Wyeth-Ayerst and Neurogen,
respectively, and, except as hereinafter specifically provided, shall not be
disclosed other than to the respective directors, officers and employees of
Wyeth-Ayerst and Neurogen, and, if and to Neurogen's and Wyeth-Ayerst's
consultants and manufacturing agents engaged directly or indirectly in its
operations relating to ADCI and Product, who have first been properly
instructed, respectively, by Wyeth-Ayerst and Neurogen to maintain such
information in confidence.
20.2 Each of Wyeth-Ayerst and Neurogen shall take all such steps as are
reasonable necessary to ensure that its directors, officers and employees and
those of its Affiliates, consultants, and manufacturing agents to whom it shall
disclose any said information shall not disclose the same to any unauthorized
person.
20.3 Either party, however, may disclose information received from the
other
a) to the extent necessary to obtain governmental approvals on the
part of Wyeth-Ayerst, Neurogen, and their respective Affiliates;
b) to the extent necessary to inform the medical profession,
pharmacists and the consumers of the Product;
c) if the information, according to the records of the receiving
party, was known to that party before receipt thereof from or on behalf of
the divulging party;
d) if the information was in the public domain at the time of its
receipt, or entered the public domain thereafter through no fault of the
receiving party hereunder; and
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e) if the information, subsequent to its receipt, was also disclosed
to the recipient party hereunder by a third party who was under no
obligation of confidentiality to the divulging party hereunder.
20.4 The provisions of this Article shall remain in force during the period
of this Agreement and for a further period of five (5) years after the
termination of this Agreement.
ARTICLE 21. PUBLICITY
21.1 The parties to this Agreement agree that public announcement of the
execution of this Agreement shall be substantially in the form of the press
release attached as Exhibit 3 hereto, and thereafter, each party shall be
entitled to make and publish any public statement consistent with the contents
thereof. Neurogen and Wyeth-Ayerst will jointly discuss and agree on any
statement to the public regarding this Agreement or any aspect of this
Agreement, subject in each case to disclosure otherwise required by law or
regulation as determined in good faith by each party. The terms of this
agreement may not be disclosed except to 1) government agencies where required
by law, or 2) legal or financial advisors and accountants of a party hereto.
ARTICLE 22. TERM AND TERMINATION
22.1 This Agreement shall come into effect on the date first above
written. It shall continue in full force and effect in each country of the
Territory for the longer of (a) [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] or (b) [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] each country and the obligation to pay royalties according to
Article 11 shall not be extended by virtue of patentable Improvements to the
Product which shall be made known by Neurogen to Wyeth-Ayerst. Upon expiration
of this Agreement with respect to any country of the Territory, Wyeth-Ayerst
shall be deemed to have a fully-paid, royalty-free (except with respect to
royalties payable on Improvements covered by unexpired Neurogen patents) license
to the Technological Data to make or have made, use or sell ADCI and Product as
well as to freely utilize all data generated hereunder or received from Neurogen
by Wyeth-Ayerst without Wyeth-Ayerst's having further obligation to Neurogen.
22.2 Wyeth-Ayerst shall be free to terminate this Agreement in its own
discretion at any time upon 60 days' written notice.
22.3 Either party hereto shall be entitled to terminate this Agreement
immediately by written notice to the other party if the other party shall commit
a breach of any material condition herein contained and shall not within sixty
(60) days from receipt of notice of such breach by the complaining party take
steps to remedy the same (if capable of remedy), offer full compensation
15
therefor, or submit a plan for rectification if the alleged breach cannot in
fact be rectified within the 60-day period.
22.4 This Agreement may be terminated at once by either party giving notice
to the other if the other is insolvent or has committed an act of bankruptcy or
an offer is made or resolution passed for the winding up of either party or if
either party shall have disposed of its business or principal interest or been
sequestrated or confiscated.
22.5 Upon termination of this Agreement pursuant to Articles 22.2, 22.3,
22.4, or prior to its coming to full term, Wyeth-Ayerst undertakes:
a) to return to Neurogen or to a company designated by Neurogen all
Technological Data disclosed by Neurogen to Wyeth-Ayerst within thirty (30)
days and without charge,
b) to furnish to Neurogen or to a company designated by Neurogen all
Technological Data which Wyeth-Ayerst may have obtained or compiled on ADCI
and the Product since the beginning of Wyeth-Ayerst's evaluation, and,
c) not to use directly or indirectly all said Technological data for
the benefit of itself or of any third party in any way whatsoever without
prior written consent of Neurogen.
22.6 In the event that this Agreement is terminated prior to its full term,
either voluntarily by Wyeth-Ayerst pursuant to Article 22.2, or involuntarily
pursuant to Article 22.3 or 22.4, Wyeth-Ayerst shall authorize the transfer of
all governmental approvals for the Product to Neurogen or a third party
designated by Neurogen.
22.7 Upon the termination by Neurogen of this Agreement for cause or upon
Wyeth-Ayerst's voluntarily relinquishing its rights under this Agreement,
Neurogen, its Affiliates and/or Neurogen's other licensees shall continue to
have the right to use any of Wyeth-Ayerst's Technological Data and Patents in
the Territory.
22.8 Termination of this Agreement shall not relieve either party of any
accrued rights or obligations hereunder, including but not limited to accrued
rights and obligations under Articles 3, 5, 8, 12,19 or 20.
ARTICLE 23. XXXX-XXXXX-XXXXXX DETERMINATION
23.1 This Agreement shall be binding on the parties, but shall have no
force or effect until either Wyeth-Ayerst determines that a filing under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (HSR) is not required or if
Wyeth-Ayerst determines that such a filing is required, the waiting period shall
have
16
expired or been terminated. If so filed, and if an HSR determination by the U.S.
Government shall hold that the terms and conditions of this Agreement are
invalid, then Neurogen shall immediately return all payments made by Wyeth-
Ayerst under Article 8 of this Agreement, provided, however, if the objections
registered by the U.S. Government, in Wyeth-Ayerst's determination, may be
resolved, the parties shall, in good faith, negotiate new terms and conditions
related to this Agreement, to the extent possible, before termination of this
Agreement and return of payments under Article 8.
ARTICLE 24. FORCE MAJEURE
24.1 In the event that the performance of this Agreement or of any
obligation hereunder, other than payment of money as herein provided by either
party hereto is prevented, restricted or interfered with by reason of any cause
not within the control of the respective party, and which, could not by
reasonable diligence have been avoided by such party, the party so affected,
upon giving prompt notice to the other party, as to the nature and probable
duration of such event shall he excused from such performance of the extent and
for the duration of such prevention, restriction or interference, provided that
the party so affected shall use its reasonable efforts to avoid or remove such
cause of non-performance and shall fulfill and continue performance hereunder
with the utmost dispatch whenever and to the extent such cause or causes are
removed.
24.2 For the purpose of the preceding subsection but without limiting the
generality thereof the following shall be considered as not within the control
of the respective party: acts of God, acts of omissions of a governmental
agency, compliance with the request, recommendations, rules, regulations or
orders of any governmental authority or any officer, department, agency or
instrument thereof, flood, storm, earthquake, fire, war, riots,
insurrection, accidents, acts of the public enemy, invasion, quarantine
restrictions, strike, lockout, differences with workmen, embargoes, delays or
failures in transportation and acts of similar nature.
ARTICLE 25. NON-ASSIGNABILITY
25.1 Except with respect to Affiliates, this Agreement and the rights and
obligations hereunder shall not be assignable by either of the parties without
the previous written consent of the other party.
ARTICLE 26. AMENDMENTS
26.1 This Agreement constitutes the entire agreement between the parties
and, except as expressly permitted, the provisions of this Agreement shall not
be changed or amended except by an instrument in writing.
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ARTICLE 27. SEVERABILITY
27.1 Should any provision of this Agreement become or prove to be null and
void, this will be without effect on the validity of the Agreement as a whole.
Both parties will, however, endeavor to replace the void provisions by a valid
one which in its commercial effect will satisfy the spirit and intention of the
Agreement.
ARTICLE 28. GOVERNING LAWS
28.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to conflict of laws
principles.
ARTICLE 29. WYETH-AYERST INTERNATIONAL INC.
29.1 Wyeth-Ayerst hereby appoints Wyeth-Ayerst International Inc., a New
York Corporation, with its principal offices at St. Davids Center, 150 Radnor-
Xxxxxxx Xxxx, Xx. Xxxxxx, Xxxxxxxxxxxx 00000 as its agent for purpose of
administering the rights and obligations of Wyeth-Ayerst for all activities
attendant to the exercise of the rights accruing to Wyeth-Ayerst hereunder for
all counties of the world, aside from the United States of America, its
territories, possessions, and the Commonwealth of Puerto Rico, including but not
limited to the collection, payment and reporting of royalties accrued on sales
in countries under the jurisdiction of Wyeth International Limited as well as
the manufacture, registration, sale or distribution of the Product as covered by
the terms of this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be duly executed by their duly authorized officers as of the day, month, and
year first above written.
AMERICAN HOME PRODUCTS CORPORATION NEUROGEN CORPORATION
BY: XXXXXX X. XXXXXXXX BY: XXXXX X. XXXXXX, XX.
-------------------------------- ---------------------------------
The undersigned Wyeth-Ayerst International Inc., hereby accepts the designation
and appointment as agent for American Home Products Corporation as set forth in
Article 27 hereof.
WYETH-AYERST INTERNATIONAL INC.
BY: XXXXXX X. XXXXXXX
---------------------------
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