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Exhibit 10.27
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
RESEARCH COLLABORATION
and
LICENSE AGREEMENT
between
XXXXX XX
AND
CAMBRIDGE NEUROSCIENCE, INC.
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TABLE OF CONTENTS
1. DEFINITIONS...............................................................1
1.1 Meaning.............................................................1
1.2 Affiliates..........................................................1
1.3 CNSI Know How.......................................................1
1.4 CNSI Patent Rights..................................................2
1.5 CNSI Technology.....................................................2
1.6 Competitive Product.................................................2
1.7 Cost of Research....................................................2
1.8 Data................................................................2
1.9 Decision Point......................................................3
1.10 Effective Date......................................................3
1.11 Field...............................................................3
1.12 Improvements........................................................3
1.13 Launch..............................................................3
1.14 Licensed Technology.................................................3
1.15 Major Market........................................................3
1.16 Market Approval.....................................................3
1.17 Net Sales...........................................................3
1.18 Phase I Study.......................................................3
1.19 Phase III Study.....................................................3
1.20 Primary Indication..................................................4
1.21 Product.............................................................4
1.22 Research Steering Committee.........................................4
1.23 Research Protocol...................................................4
1.24 Territory...........................................................4
2. RESEARCH AND DEVELOPMENT..................................................4
2.1 Research Steering Committee.........................................4
3
2.1.1 Formation..................................................4
2.1.2 Membership.................................................4
2.1.3 Voting Powers..............................................4
2.1.4 Meetings...................................................5
2.1.5 Functions and Authority....................................5
2.1.6 Expenses...................................................6
2.1.7 Dispute Resolution.........................................6
2.1.8 Disbanding.................................................6
2.2 CNSI Research.......................................................6
2.2.1 Representation.............................................6
2.2.2 Scope of Research..........................................6
2.2.3 Payment....................................................6
2.2.4 Records and Audits.........................................6
2.2.5 Subcontracting.............................................7
2.2.6 Subcontractee Improvements.................................7
2.2.7 Independent Contractor.....................................7
2.2.8 Technology Transfer........................................7
2.2.9 Research Warranty..........................................8
2.2.10 Records and Reports........................................8
2.2.11 Rights in DATA.............................................8
2.3 BAYER Research and Development......................................8
2.3.1 Scope of Research..........................................8
2.3.2 Development Studies........................................8
2.3.3 Contracted Clinical Trials.................................8
2.3.4 Regulatory Filings.........................................8
2.3.5 Assistance.................................................9
2.3.6 Costs......................................................9
2.3.7 Reporting..................................................9
2.3.8 Diligence..................................................9
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2.4 Research Publications...............................................9
3. LICENSE GRANT
3.1 CNSI Grant of Patent Rights........................................10
3.2 Term of Grant......................................................10
3.3 Reservation of Rights CNSI.........................................10
3.4 CNSI Grant of Rights in Know How...................................10
3.5 CNSI Funded Research...............................................10
3.6 Term of Grant......................................................11
3.7 XXXXX Xxxxx of Rights..............................................11
3.8 Bankruptcy or Insolvency...........................................11
4. LICENSE FEE, MILESTONES AND ROYALTIES....................................11
4.1 Consideration for License Granted..................................11
4.2 Milestone Payments.................................................11
4.3 Royalty Payments...................................................12
4.3.1 Royalties for Patent Rights...............................12
4.3.2 Royalties for Know How....................................13
4.3.3 CNSI Royalties............................................14
4.3.4 Default on Third Party Contract...........................14
4.3.5 License to Third Party Patent Rights......................14
4.3.6 Cap on Royalties..........................................14
4.4 Accounting Records and Procedures..................................14
4.4.1 Royalties Payments........................................14
4.4.2 Currency..................................................15
4.4.3 Records and Audits........................................15
4.4.4 Confidentiality of Financial Reports......................15
4.4.5 Payment of Taxes..........................................15
4.4.6 Sublicensees..............................................15
4.4.7 Non-Product Related Sublicenses...........................16
5. SUPPLY OF MATERIAL
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5.1 Research Material..................................................16
5.2 Other Material.....................................................16
5.3 BAYER Cost of Manufacture..........................................16
6. PRODUCT COMMERCIALIZATION................................................16
6.1 Right to Commercialize.............................................16
6.2 Co-Promotion.......................................................16
6.3 Cost of Commercialization..........................................16
6.4 Product Liability..................................................17
6.5 Trade Marks........................................................17
7. CONFIDENTIALITY..........................................................17
7.1 Definition.........................................................17
7.2 Obligations........................................................17
7.3 Exceptions.........................................................17
7.4 Term of Confidentiality............................................18
7.5 Return of Information..............................................18
7.6 Business Publications..............................................18
8. INVENTIONS AND PATENTS...................................................18
8.1 Rights In Inventions...............................................18
8.2 Sole Inventions....................................................18
8.3 Joint Inventions...................................................19
8.4 Invention Disclosure...............................................19
8.5 Know-how...........................................................19
8.6 CNSI Patent Maintenance............................................19
8.7 BAYER Patent Maintenance...........................................19
8.8 BAYER/CNSI Patents.................................................19
8.9 Assignment of Rights...............................................19
8.10 No Waiver..........................................................19
8.11 Cost of CNSI Patents...............................................19
8.12 Reimbursement of Costs.............................................20
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8.13 No Further Interest in Patents/Applications........................20
9. PATENT INFRINGEMENT......................................................20
9.1 Infringement by Third Parties......................................20
9.1.1 Notification..............................................20
9.1.2 Initiating Proceedings....................................20
9.1.3 Distribution of Awards....................................20
9.1.4 Voluntary Disposition.....................................21
9.2 Claims Against Licensed Technology.................................21
9.2.1 Notice....................................................21
9.2.2 Damages...................................................21
9.2.3 Patent Indemnification....................................21
10. TERM AND TERMINATION.....................................................22
10.1 Term and Expiration................................................22
10.2 Termination by CNSI................................................22
10.3 Termination by BAYER...............................................22
10.3.1 Upon Written Notice.......................................22
10.3.2 Duty to Mitigate..........................................22
10.3.3 Without Cause.............................................23
10.3.4 With Cause................................................23
10.3.5 Termination Upon Reorganization...........................23
10.4 Disposition of Inventory...........................................23
11. REPRESENTATIONS AND WARRANTIES...........................................24
11.1 Corporate Existence and Power......................................24
11.2 Authorization and Enforcement of Obligations.......................24
11.3 Consents...........................................................24
11.4 No Conflict........................................................24
11.5 Authorization of Obligations.......................................24
11.6 CNSI Representations...............................................24
11.7 Certain Covenants of CNSI and BAYER................................25
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12. MISCELLANEOUS............................................................25
12.1 Indemnification....................................................25
12.1.3 Force Majeure.............................................26
12.1.4 Survival..................................................26
12.1.5 Notice....................................................26
12.2 Waivers............................................................26
12.3 Applicable Law.....................................................26
12.4 Dispute Resolution.................................................27
12.5 Assignment.........................................................27
12.6 Severability.......................................................27
12.7 Integration Clause.................................................27
12.8 Amendment of Agreement.............................................27
APPENDICES
Appendix 1 CNSI KNOW HOW.................................................29
Appendix 2 CNSI PATENT RIGHTS............................................37
Appendix 3 RESEARCH PROTOCOL.............................................39
Appendix 4 CNSI THIRD PARTY CONTRACTS....................................47
Appendix 5 CNSI SUBCONTRACTEES AND PROPOSED BUDGET............................55
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RESEARCH COLLABORATION
AND LICENSE AGREEMENT
This Agreement is between Cambridge NeuroScience, Inc., a Delaware
corporation, with offices located at Xxx Xxxxxxx Xxxxxx, Xxxxxxxx 000,
Xxxxxxxxx, XX 00000 ("CNSI"), and Xxxxx XX, a German corporation, on behalf of
its Pharmaceutical Division, with offices located at X-00000 Xxxxxxxxxx, Xxxxxxx
("BAYER").
WHEREAS CNSI owns or is the exclusive licensee, through
the*******************************************************, of certain
technology and patent rights relating to glial growth factor 2 ("GGF2"), its
manufacture and use for the treatment of multiple sclerosis and other
pharmaceutical indications;
WHEREAS CNSI and BAYER are interested in forming a collaboration
concerning the research, development, manufacture and commercialization of GGF2
product(s) where, generally, CNSI would license certain patent rights
exclusively to BAYER, CNSI and BAYER both would collaborate on GGF2 research,
and BAYER could develop, manufacture and commercialize GGF2 product(s)
worldwide.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the Parties
hereto agree as follows:
Article 1
DEFINITIONS
1.1 Meaning: Whenever a term is written in this Agreement with capital
letters, it shall have the following meaning.
1.2 AFFILIATES. shall mean any business entity which directly or indirectly
controls, is controlled by, or is under common control with either
Party to this Agreement. A business entity shall be deemed to "control"
another business entity if it owns, directly or indirectly, more than
fifty percent of the outstanding voting securities, capital stock, or
other comparable equity or ownership interest of such business entity.
If the laws of the jurisdiction in which such entity operates prohibit
ownership by a Party or more than fifty percent (50%) , control shall
be deemed to exist at the maximum level of ownership allowed by such
jurisdiction.
1.3 CNSI KNOW HOW: shall mean all information and data including but not
limited to formulae, protocols, techniques and results of
experimentation and testing, which, except for published patent
applications which are also included within this definition, is
generally not known to the public, and in which CNSI holds rights, and
which provides or may provide a competitive advantage in relation to
research, development, manufacture, use and/or sale of PRODUCT. CNSI
KNOW HOW includes that information which exists at the EFFECTIVE DATE
and in which CNSI has either ownership or licensed rights such as those
which arise directly out of CNSI's conduct, or out of its contract
service providers conduct under previous agreements between CNSI and
other parties (see Appendix 4, CNSI Third Party Contracts). CNSI KNOW
HOW also includes all IMPROVEMENTS which arise after the EFFECTIVE DATE
either out of CNSI's or its contract service providers conduct under
this Agreement. CNSI KNOW HOW includes that information which is not
the subject of any patent application, as well as that information
which is the subject of a patent application that has not yet issued.
Such patent applications that have not issued as of the EFFECTIVE DATE
are included in Appendix 1, which is incorporated herein. Appendix 1
shall be updated periodically to include CNSI KNOW HOW embodied in
patent applications arising after the EFFECTIVE DATE and during the
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term of this Agreement, and CNSI KNOW HOW that is the subject of a
patent application shall be deemed to be and shall be transferred from
Appendix 1 to Appendix 2 (CNSI PATENT RIGHTS) upon grant.
1.4 CNSI PATENT RIGHTS: shall mean all rights held by CNSI in any of the
following patents: any patent issuing on any patent application
identified in Appendix 1, as well as any patent issuing from any
continuing applications of the patents listed in Appendix 2, such
applications including any divisions, continuations, and
continuation-in-part applications, as well as any patents issuing on
any reissue and/or reexamination application, and including any Patent
Term Restoration of any such patents. CNSI PATENT RIGHTS also includes
any foreign patents which correspond to or are generally equivalent to
those described above, and includes any patents in which CNSI holds
rights that claim IMPROVEMENTS. This definition includes CNSI's
interest in any patent rights CNSI may have in any joint invention with
BAYER or a third party, and includes any third party patent rights
licensed by CNSI that relate to CNSI TECHNOLOGY and (a) that exist at
the EFFECTIVE DATE and (b) that arise after the EFFECTIVE DATE (i.e.,
IMPROVEMENTS). CNSI PATENT RIGHTS that exist as of the EFFECTIVE DATE
are listed in Appendix 2, which is attached hereto and incorporated
herein. The Parties intend that Appendix 2 include all CNSI patent
rights that relate to CNSI TECHNOLOGY in the FIELD and are in existence
at the EFFECTIVE DATE, as well as all CNSI patent rights arising under
this Agreement. If at any time it is discovered that such CNSI PATENT
RIGHTS are not but should be included in Appendix 2, the Parties agree
to amend Appendix 2 accordingly, and such amendment will be
incorporated herein and shall supersede any previous Appendix 2.
1.5 CNSI TECHNOLOGY: shall mean GGF2 , neuregulin-1, DNA sequences,
protein(s) and other related materials covered by CNSI PATENT RIGHTS or
CNSI KNOW HOW, any modification and fraction thereof, including any
preparation containing GGF2, and/or any modification and/or fraction
thereof, as well as all materials relating to the manufacture, use
and/or delivery (including gene delivery) of GGF2, modifications and/or
fractions thereof. This definition includes the following : cDNA,
genomic DNA, vectors, cell lines and probes which relate to GGF2, any
modification and/or fraction thereof that CNSI owns or otherwise holds
rights in as of the EFFECTIVE DATE. This definition includes any and
all IMPROVEMENTS. *********************************.
1.6 COMPETITIVE PRODUCT : shall mean any drug product(s) that promotes the
growth and differentiation of glial cells and is used for the treatment
of a PRIMARY INDICATION or other indication contemplated hereunder,
that is sold by one or more third party which is not a Bayer
sublicensee or Affiliate, and the individual or cumulative sales or
other distribution of such third party product(s), in a given calendar
year in the applicable country, are equivalent to ******************or
more of NET SALES of PRODUCT in such country,
1.7 COST OF RESEARCH: shall mean actual costs incurred by CNSI for
conducting research hereunder calculated by adding (a) all out of
pocket costs incurred in a calendar year that are directly related to
research conducted by CNSI hereunder, as verified by itemized invoices
therefor, and (b) the cost of CNSI personnel who actively conduct
research in a calendar year hereunder at the annualized rate of
*************per full-time personnel for either Ph.D. or technical
personnel, calculated as a percent of the full time rate, depending on
what percent of time was actually spent conducting research hereunder
in a calendar year. The sum of (a) and (b) includes all direct and
indirect costs of CNSI hereunder.
1.8 DATA: is defined in Article 2.2.10 (Records and Reports).
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1.9 DECISION POINT: is not a defined term in this Agreement.
1.10 EFFECTIVE DATE: The date of the last signature required below or the
date of any required United States governmental approval or
registration of this transaction, whichever is later.
1.11 FIELD : shall mean all uses of the CNSI TECHNOLOGY in animals,
including humans, including but not limited to all therapeutic,
prophylactic, and diagnostic uses, except this definition does not
include the field of *************
1.12 IMPROVEMENTS: shall mean any information and/or material including, not
by way of limitation, know-how, discoveries, technology and information
of any type whatsoever, compositions, methods, processes, techniques
and the uses thereof, whether patented or not, that arise after the
EFFECTIVE DATE out of conduct by CNSI and/or its subcontractees as a
result of conduct under this Agreement. IMPROVEMENTS include any sole
CNSI IMPROVEMENT, and any CNSI IMPROVEMENT held jointly with BAYER or
with any subcontractee, as well as any subcontractee IMPROVEMENT in
which CNSI has or may obtain rights during this Agreement.
1.13 LAUNCH: shall mean the date of the first invoice for the sale of
PRODUCT in a MAJOR MARKET after receipt of governmental approval to
sell PRODUCT in that market.
1.14 LICENSED TECHNOLOGY: shall mean that CNSI TECHNOLOGY, the use of which,
but for the licenses granted hereunder, would infringe CNSI PATENT
RIGHTS or misappropriate CNSI KNOW HOW.
1.15 MAJOR MARKET: shall mean the United States, United Kingdom, Germany, or
France.
1.16 MARKET APPROVAL: shall mean, for each country in which sales of PRODUCT
is contemplated, the date upon which the last of all governmental
approvals required for the sale of PRODUCT in that country has been
granted.
1.17 NET SALES: shall mean the invoiced sales price billed to third party
customers by BAYER, its AFFILIATES and sublicensees less (a) actual
credits, allowances, discounts (including trade, cash, and quantity
discounts), and rebates to (including documented price reduction
programs) and charge backs from the account of such third party
customer for spoiled, damaged, out-dated, recalled or returned PRODUCT;
(b) amounts equivalent to five percent (5%) of the invoiced sales price
for PRODUCT as an allowance for transportation and insurance costs, and
(c) all direct taxes including sales, value-added and other direct
taxes incurred, as well as all customs fees, duties, surcharges and
other governmental charges incurred in connection with the exportation
or importation of PRODUCT for sale as far as they are not charged
separately to third party customers.
1.18 PHASE I STUDY: shall mean the first study designed for introduction of
a PRODUCT into humans for the primary purpose of determining the safety
of the PRODUCT.
1.19 PHASE III STUDY: shall mean the first study designed for administration
of PRODUCT to a number of human patients adequate to produce
statistically significant evidence of efficacy and designed for the
primary purpose of proving the efficacy of PRODUCT in order to obtain
approval of the Biological License Application therefor, or any
equivalent approval in any MAJOR MARKET.
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1.20 PRIMARY INDICATION: shall mean therapeutic or prophylactic uses
relating to multiple sclerosis and/or peripheral neuropathy. This
definition does not include any reference to diagnostic uses of
LICENSED TECHNOLOGY.
1.21 PRODUCT: shall mean that LICENSED TECHNOLOGY that is advanced for
development and/or sold by or on behalf of BAYER under this Agreement.
1.22 RESEARCH STEERING COMMITTEE: shall mean the committee comprising
representatives of CNSI and BAYER as defined in Article 2.1.
1.23 RESEARCH PROTOCOL: shall mean the program of research as described in
Appendix 3, which is incorporated herein, as revised from time to time
as authorized in this Agreement. The RESEARCH PROTOCOL is designed to
acquire sufficient efficacy and safety information to enable BAYER to
determine whether recombinant human GGF2 (rhGGF2) should be nominated
for clinical development. A series of preclinical experiments including
in vitro studies as well as animal models of Multiple Sclerosis and/or
other indications will be conducted. Identification of potential target
cells and issues of toxicity including the induction of hyperplasia and
potential carcinogenic effects will be determined. This work will
include an initial, scaleable manufacturing process for rhGGF2. Except
for the above description, if there is any material conflict between
the terms of Appendix 3 (Research Protocol) and the terms of the rest
of this Agreement, then the Parties agree that the rest of the
Agreement, and not Appendix 3, shall control.
1.24 TERRITORY: shall mean all countries in the world.
Article 2
RESEARCH AND DEVELOPMENT
2.1 RESEARCH STEERING COMMITTEE
2.1.1 Formation: Promptly after the EFFECTIVE DATE, the Parties
shall form a RESEARCH STEERING COMMITTEE for the purpose of
overseeing and managing research conducted by both Parties
under the RESEARCH PROTOCOL, up to completion of conduct
required to be conducted by CNSI and funded by BAYER
hereunder.
2.1.2 Membership: The RESEARCH STEERING COMMITTEE shall be composed
of up to three (3) representatives of CNSI and three (3)
representatives of BAYER. One (1) of each party's three
representatives shall serve as co-chair of the COMMITTEE. Each
co-chair shall be authorized by her/his company to make
decisions with respect to matters within the scope of the
RESEARCH STEERING COMMITTEE's functions and power as described
in Article 2.1.5 (Functions and Authority). The initial
members of the RESEARCH STEERING COMMITTEE shall be:
for CNSI for BAYER
co-chair: ******** co-chair: ********
member: ********** member: **********
member: **********
2.1.3 Voting Powers: Unless specifically stated to the contrary in
this Article 2.1 (Research Steering Committee), Bayer shall
have one vote and CNSI shall have one vote regarding any
action to be taken by the RESEARCH STEERING COMMITTEE. Each
Party's vote shall be given by each Party's respective co-
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chair. Any action authorized by the RESEARCH STEERING
COMMITTEE must be authorized by unanimous vote of both
co-chairs and shall be recorded in the meeting minutes
following the authorization.
2.1.4 Meetings: The RESEARCH STEERING COMMITTEE shall meet not less
than once a quarter during the term of BAYER's funding of CNSI
research hereunder, on such dates and at such times and places
as are agreed to by the RESEARCH STEERING COMMITTEE.
Responsibility for arranging the meetings, including, at
least, providing notice and an agenda and providing minutes of
the meeting, shall alternate between the Parties. The first
meeting will take place as soon as practicable after the
EFFECTIVE DATE, but in no event later than forty-five (45)
days after the EFFECTIVE DATE, and will be organized by BAYER.
Meetings may be conducted in person or by telephone
conference, and the RESEARCH STEERING COMMITTEE may act
without a meeting if, prior to such action, a written consent
thereto is signed by each co-chair. Except for Article 2.1.3.
(Voting Powers), the RESEARCH STEERING COMMITTEE may amend or
expand upon the foregoing procedures for its internal
operation by co-chair agreement.
2.1.5 Functions and Authority:
2.1.5.1 The RESEARCH STEERING COMMITTEE shall manage and coordinate
research conducted by each Party under the RESEARCH PROTOCOL.
2.1.5.2 Each Party shall provide the RESEARCH STEERING COMMITTEE with
a copy of DATA it generates under the RESEARCH PROTOCOL. The
COMMITTEE shall treat this DATA as confidential under the
terms of Article 7 (Confidentiality) of this agreement and
shall be used for the sole purpose of furthering the purpose
of this Agreement. The RESEARCH STEERING COMMITTEE has the
authority to review DATA submitted by each Party and amend the
RESEARCH PROTOCOL as described in Article 2.1.5.3 on the basis
of that DATA and/or other information, if necessary, according
to its best judgment.
2.1.5.3 To be authorized, any amendment to the RESEARCH PROTOCOL shall
be in writing, signed and dated by each co-chair. The RESEARCH
STEERING COMMITTEE shall retain copies of all such amended
signed versions of the RESEARCH PROTOCOL generated during the
term of this Agreement, and each shall become incorporated
herein by reference as of the date of last signature required
thereto.
2.1.5.4 The RESEARCH STEERING COMMITTEE does not have the authority to
amend the RESEARCH PROTOCOL in a manner
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2.1.5.5 The RESEARCH STEERING COMMITTEE has the sole authority to
authorize transfer of any material that incorporates and/or
includes LICENSED TECHNOLOGY to any third party during the
term of the RESEARCH STEERING COMMITTEE. Such authorization
shall be through the RESEARCH STEERING COMMITTEE's approval of
appropriate research, material transfer, or other agreements
hereunder. After the RESEARCH STEERING COMMITTEE disbands
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according to Article 2.1.8 (Disbanding) and during
the term of the Agreement, BAYER shall have the sole
right to transfer any material that is LICENSED
TECHNOLOGY.
2.1.5.6 The RESEARCH STEERING COMMITTEE shall have further
functions and authority as are stated in Article
2.2.5 (Subcontracting).
2.1.6 Expenses: Each Party shall be responsible for its own RESEARCH
STEERING COMMITTEE members' expenses.
2.1.7 Dispute Resolution: In the event of a dead-lock regarding any
issue within the RESEARCH STEERING COMMITTEE's powers, the
RESEARCH STEERING COMMITTEE shall present the issue to the
President of Bayer AG's Pharmaceutical Division and to the
President of Cambridge NeuroScience, Inc. who shall attempt to
resolve the deadlock in good faith. If no resolution is
reached between these two individuals, then BAYER's decision
shall control.
2.1.8 Disbanding: On or before sixty (60) days after CNSI's
completion of the research funded by BAYER hereunder, the
RESEARCH STEERING COMMITTEE shall disband and have no further
duties or authority. Upon the disbanding of the RESEARCH
STEERING COMMITTEE, each Party may keep all DATA, meeting
minutes and authorized RESEARCH PROTOCOL amendments received
during RESEARCH STEERING COMMITTEE membership, as long as such
information is treated according to Articles 2.2.11 (Rights in
Data) and Article 7 (Confidentiality).
2.2 CNSI RESEARCH
2.2.1 Representation: CNSI represents that it has the expertise,
facilities and personnel to carry out and/or monitor third
party research described in the RESEARCH PROTOCOL in a manner
that is safe and that protects the confidentiality of the
research conducted hereunder and the results generated
therefrom in a manner that is consistent with the terms of
this Agreement.
2.2.2 Scope of Research: CNSI shall conduct and/or monitor third
party research generally in the area of efficacy studies
relating to PRODUCT. CNSI's specific responsibilities
regarding such research are described in the RESEARCH PROTOCOL
which is attached hereto as Appendix 3, and incorporated
herein.
2.2.3 Payment: BAYER will pay CNSI its COST OF RESEARCH not to
exceed one million dollars ($1,000,000) for CNSI to complete
the purpose and procedures for which it is responsible,
according to the RESEARCH PROTOCOL. CNSI will pay third party
subcontractees that perform services under this Agreement out
of this one million dollar payment generally as described in
Appendix 5 (CNSI Subcontractees and Proposed Budget). On or
before January 11, 1999, BAYER shall pay CNSI five hundred
thousand dollars ($500,000) of the maximum one million dollar
payment for research already committed to or conducted by CNSI
prior to the EFFECTIVE DATE. Starting April 1, 1999, CNSI
shall invoice BAYER quarterly for COST OF RESEARCH incurred
during the previous quarter, and BAYER shall pay the invoice
amount within thirty (30) days of receipt of the invoice.
2.2.4 Records and Audits: CNSI will maintain accounting records in
such form and detail as to substantiate CNSI's accounting of
COST OF RESEARCH. CNSI
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shall make those records available for audit by a mutually
agreeable nationally recognized accounting firm at BAYER's
written request and expense. CNSI shall preserve its records
for any calendar year for a period of three years or until the
period for completion of tax audits for any calendar year has
expired, whichever is longer.
2.2.5 Subcontracting: Prior to the RESEARCH STEERING COMMITTEE's
being disbanded under Article 2.1.8 (Disbanding), either Party
may contract with, manage, and be responsible for certain
subcontractees performance of the respective Party's research
obligations, in whole or in part, under the RESEARCH PROTOCOL.
Such subcontracting by CNSI shall be funded under the research
payments in Article 2.2.3 (Payment). Any and all such
subcontract(s) are subject to the RESEARCH STEERING
COMMITTEE's prior approval of the subcontractee as well as of
the actual written agreement that shall control such
subcontract transaction, and are subject to the
subcontractee's agreement to assume all applicable obligations
of this Agreement relating to research conducted hereunder.
Approval of any particular subcontractee (except that
subcontractees listed in Appendix 5 (CNSI Subcontractees) are
already deemed approved), and of terms of any particular
agreement shall be made in a timely manner in a writing signed
by both co-chairs of the RESEARCH STEERING COMMITTEE or
his/her respective delegate.
2.2.6 Subcontractee Improvements:
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2.2.7 Independent Contractor: Execution of CNSI's responsibilities
under the RESEARCH PROTOCOL is solely under the direction and
control of CNSI as an independent contractor, and not as an
employee of BAYER. CNSI will provide whatever is necessary for
completion of the RESEARCH PROTOCOL except for any material to
be provided by BAYER which is specifically identified in the
RESEARCH PROTOCOL or elsewhere in this Agreement as such.
2.2.8 Technology Transfer: BAYER's representatives may consult
informally with CNSI personnel and/or subcontractees at
reasonable times during the term of this Agreement. Except for
supply of MATERIAL, which is controlled by Article 5 (Supply
of Material), CNSI shall, at BAYER's request, deliver to BAYER
reasonable quantities of representative materials developed by
CNSI under the RESEARCH PROTOCOL, and also provide timely
technical assistance to BAYER to ensure transfer of any
technology developed under this Agreement in
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sufficient detail to enable BAYER to readily practice any
license or right granted in this Agreement.
2.2.9 Research Warranty: CNSI warrants that no materials, ideas,
reagents, methods, or supplies proprietary to any entity other
than CNSI shall be used in the course of CNSI's conduct of its
responsibilities under the RESEARCH PROTOCOL without the
express written consent of BAYER, unless CNSI shall first
obtain those rights from said entity and include such rights
in its grant of CNSI PATENT RIGHTS and/or CNSI KNOW HOW of
Article 3 (License Grant).
2.2.10 Records and Reports: Each Party shall keep complete, accurate
and authentic accounts, notes, technical reports, raw data,
IMPROVEMENTS, information and records of the work performed by
that Party or its subcontractee(s) under the RESEARCH PROTOCOL
(collectively, "DATA") and shall provide the RESEARCH STEERING
COMMITTEE with quarterly reports thereof promptly after the
end of each quarter. Each Party shall also submit to the
RESEARCH STEERING COMMITTEE a comprehensive final report
within ninety (90) days after expiration or termination of the
research period.
2.2.11 Rights in DATA:
**************************************************************
CNSI shall treat all DATA as confidential according to Article
7 (Confidentiality). If BAYER terminates this Agreement under
Article 10.3.3 (Without Cause), then, except where this
Agreement is to the contrary, BAYER may grant or share
ownership of DATA with CNSI, and BAYER's granting or sharing
of such rights to DATA will not be unreasonably withheld.
2.3 BAYER Research and Development
2.3.1 Scope of Research: BAYER shall conduct research generally in
the area of process and product development of PRODUCT.
BAYER's specific responsibilities regarding such research are
described in the RESEARCH PROTOCOL which is incorporated
herein. BAYER shall be responsible for its costs of research
hereunder.
2.3.2 Development Studies: BAYER also has the right to and will be
solely responsible for conducting, or having conducted, all
studies relating to the clinical development of PRODUCT for
commercialization. BAYER will provide whatever is necessary
for conducting such development studies, including PRODUCT
manufactured by BAYER.
2.3.3 Contracted Clinical Trials: During development of PRODUCT, if
BAYER, at its sole discretion, decides to contract out any
clinical trial(s) of PRODUCT, and, if CNSI demonstrates that
it has the personnel and experience necessary, in BAYER's
opinion, to conduct such work in a competent, timely and
cost-effective manner, then BAYER will consider contracting
with CNSI to perform such trials, in part or in their
entirety, on behalf of BAYER. Any such agreement, to be
binding and enforceable, shall be the subject of a separate
written contract.
2.3.4 Regulatory Filings: BAYER shall be responsible for the
preparation, submission and prosecution of all regulatory
authority filings and applications required to obtain all
necessary marketing and pricing approvals to commercially sell
and use PRODUCT in each country in the TERRITORY in which
BAYER will sell
8
16
PRODUCT. BAYER shall be the owner and party of record for all
such filings and applications.
2.3.5 Assistance: CNSI agrees to provide timely assistance as
requested by BAYER and as reasonably necessary in preparation
and prosecution of such filings and applications as described
in Article 2.3.4 (Regulatory Filings).
2.3.6 Costs: BAYER shall be responsible for its costs associated
with preparation, submission and prosecution of all filings
and applications required. BAYER shall reimburse CNSI for any
reasonable expenses pre-approved by BAYER and actually
incurred by CNSI as a result of CNSI's providing such
assistance as is described in Article 2.3.5 (Assistance).
2.3.7 Reporting: At least in January and July of each year during
the term of this Agreement until all PRODUCT approvals
hereunder are obtained, BAYER shall provide CNSI with a
written summary report which shall describe the progress of
the following: the clinical development and testing of PRODUCT
in clinical trials, all regulatory filings and submissions
made, and all approvals obtained. Such reports and information
shall be received by CNSI subject to the obligations of
Article 7 (Confidentiality).
2.3.8 Diligence: BAYER shall diligently proceed with the
development, manufacture and sale of any and all PRODUCTS that
are approved for advancement and/or commercialization by
BAYER's management according to BAYER's standard business
practice for similar products of similar indication in similar
sized markets in the MAJOR MARKETS, and, as development
progresses, that are approved for commercialization by
appropriate regulatory agencies.
2.3.9 Excused Performance: In addition to the terms of Article 12.2
(Force Majeure), BAYER's diligent development, manufacture
and/or sale of PRODUCT is expressly conditioned upon the
continuing absence of any adverse condition relating to the
safety or efficacy of PRODUCT which, in BAYER's opinion,
materially limits, reverses or restricts the development
and/or marketing of PRODUCT. BAYER's obligations to diligently
develop any PRODUCT that demonstrates such an adverse
condition shall be delayed or suspended so long as any such
condition exists.
2.4 Research Publications: Subject to the restrictions of confidentiality
and restricted use set forth in this Agreement, in the event either
Party wants to publish research data and/or information, including
DATA, that directly relates to CNSI TECHNOLOGY and/or arises out of
conduct under the RESEARCH PROTOCOL, whether in writing or orally, each
Party shall cooperate to achieve a mutually acceptable publication in a
timely manner, and the Parties shall follow standard procedures used in
scientific journals regarding authorship and acknowledgments. The
publishing Party shall take reasonable steps to allow the other Party
to provide comments and/or proposed modifications to the proposed
publication and/or to request a reasonable delay in publication in
order to protect patentable information including IMPROVEMENT(s). Such
steps include, but are not limited to, submission of any and all
proposed research publications that relate to the CNSI TECHNOLOGY
and/or DATA to the other Party at least forty five (45) days prior to
any disclosure to any outside party. The publishing Party agrees to
postpone publication of any sole or joint IMPROVEMENT for up to ninety
(90) days from the date BAYER received the proposed publication in
order to first protect potential global patent rights to such
IMPROVEMENT(s). Any information that the RESEARCH STEERING COMMITTEE
deems should not be published but should be held as a trade secret
shall
9
17
not be published, and shall be so held during the term of this
Agreement. In any event, the publishing Party must get written consent
from the other Party prior to publication of any CONFIDENTIAL
INFORMATION that belongs to the other Party. In the event that
agreement(s) between CNSI and a third party concerning the subject
matter of this Agreement are already signed by both CNSI and the third
party before the EFFECTIVE DATE, and such agreement(s) contain terms
regarding publication of DATA that conflict with the terms in this
Article 2.4 (Research Publications), then CNSI shall promptly so advise
BAYER in order to allow for a timely review of the proposed publication
by BAYER.
Article 3
LICENSE GRANT
3.1 CNSI Grant of Patent Rights: CNSI hereby grants BAYER and its
AFFILIATES as designated by BAYER a royalty-bearing, exclusive license
(or in the case of CNSI PATENT RIGHTS that CNSI has licensed from a
third party, an exclusive sublicense) to make, use, sell, import,
sublicense, and have made, used, sold, and imported LICENSED TECHNOLOGY
under CNSI PATENT RIGHTS (which includes IMPROVEMENTS) in the FIELD in
the TERRITORY.
3.2 Term of Grant: The license granted in Article 3.1 (CNSI Grant of Patent
Rights) shall remain in force and effect until the expiration of the
last to expire of the CNSI PATENT RIGHTS unless this Agreement is
terminated earlier by either Party under Article 10 (Term and
Termination).
3.3 Reservation of Rights to CNSI: The above notwithstanding, CNSI retains
the right under CNSI PATENT RIGHTS to perform that research and other
conduct that is specifically identified as CNSI's obligation under this
Agreement. CNSI also retains the right to perform research and/or have
research performed under CNSI PATENT RIGHTS in the FIELD
*************************************ONLY AFTER BAYER is made aware of
the proposed research in reasonable detail, and after BAYER approves in
writing any third party with whom CNSI would contract for such research
services, and after BAYER approves in writing any actual CNSI/third
party research agreement relating to such research. Any such written
approval will be provided by BAYER within sixty (60) days of CNSI's
request for such approval.
3.4 CNSI Grant of Rights in Know How: CNSI hereby grants BAYER a
royalty-bearing exclusive license, including the right to sublicense,
to unlimited use of CNSI KNOW HOW (which includes IMPROVEMENTS) in the
FIELD in the TERRITORY. The foregoing notwithstanding, CNSI retains the
right under CNSI KNOW HOW to perform that research and other conduct
that is specifically identified as CNSI's obligation under this
Agreement. CNSI also retains the right to perform research and/or have
research performed under CNSI KNOW HOW in the FIELD at its own expense
***********************************************************************
***********************************************************************
**********************************************************************
3.5 CNSI Funded Research: CNSI may pursue research that is within the FIELD
but outside the scope of BAYER funded research hereunder only according
to the terms of Articles 3.3 (Reservation of Rights to CNSI), and 3.4
(CNSI Grant of Rights in Know How). CNSI must keep BAYER promptly
informed of all material data and results of any such research that
CNSI performs and/or has performed on at least a quarterly basis during
the term of this agreement. *******************************************
10
18
***********************************************************************
***********************************************************************
***********************************************************************
***********************************************************************
**********************************************************************.
For clarification, any and all CNSI TECHNOLOGY, including IMPROVEMENTS,
that arises out of CNSI funded research under Articles 3.3 (Reservation
of Rights to CNSI), and 3.4 (CNSI Grant of Rights in Know How) during
the term of this Agreement falls within the scope of the licenses
granted herein and shall not be disposed of or otherwise used by CNSI
contrary to the terms of this Agreement.
**********************************************************************.
3.6 Term of Grant: The license granted in Article 3.4 (CNSI Grant of Rights
in Know How) shall remain in force and effect according to Article
4.3.2.3, or Article 10.1 (Term and Expiration) or Article 10.2.2
(Effect of Termination), whichever occurs first.
3.7 XXXXX Xxxxx of Rights:
3.7.1 BAYER grants no rights to CNSI hereunder for BAYER patents
and/or know how that originate solely from BAYER EXCEPT for
the limited right to use such patents and/or know how for the
sole purpose of performing research and other conduct
specifically identified under this Agreement.
3.7.2 If BAYER terminates this Agreement upon notice under Article
10.3.3 (Without Cause), then all rights granted by BAYER in
Article 3.7.1 shall be revoked upon termination, and BAYER
will negotiate in good faith with CNSI regarding a license of
any BAYER patent and/or know how rights relating directly to
PRODUCT that would, but for that license, preclude CNSI from
making, using or selling PRODUCT.
3.8 Bankruptcy or Insolvency: All rights and licenses granted to BAYER
under this Article 3 are, and shall be deemed to be, for purposes of
Section 365(n) of the Bankruptcy Code, licenses of rights to
"Intellectual Property" as defined under Section 101(35A) of the
Bankruptcy Code. The Parties agree that BAYER, as a licensee of such
rights under this Agreement, shall retain and may fully exercise all of
its rights and elections under the Bankruptcy Code, including but not
limited to BAYER's rights to continue to exercise the rights licensed
hereunder.
Article 4
LICENSE FEE, MILESTONES AND ROYALTIES
4.1 Consideration for License Granted: In consideration for the licenses
granted under Articles 3.1 (CNSI Grant of Patent Rights) and 3.4 (CNSI
Grant of Rights in Know How), BAYER shall pay CNSI one million dollars
($1,000,000) on or before January 11, 1999.
4.2 Milestone Payments :
4.2.1 **************************************************************
**************************************************************
**************************************************************
11
19
4.2.2 **************************************************************
**************************************************************
*************************************************************.
4.2.3 **************************************************************
**************************************************************
**************************************************************
**************************************************************
*************************************************************.
4.2.4 **************************************************************
**************************************************************
**************************************************************
**************************************************************
4.2.5 BAYER shall pay CNSI:
**************************************************************
**************************************************************
**************************************************************
**************************************************************
4.2.6 **************************************************************
**************************************************************
**************************************************************
4.2.7 **************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
4.3 Royalty Payments:
4.3.1 Royalties for Patent Rights: In each country in which CNSI
PATENT RIGHTS exist at the time of the first sale of PRODUCT
in that country, and during such time that such rights have
not been held invalid or unenforceable by a decision of a
court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal,
or which has not been admitted to be invalid or unenforceable
through reissue or disclaimer or otherwise, or has not
expired, the following shall apply:
4.3.1.1 BAYER shall pay CNSI a royalty of
******************************of NET SALES of each
PRODUCT sold in each country
for***************************** NET SALES for that
PRODUCT invoiced
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20
in all such countries during each January through
December fiscal year, and
4.3.1.2 *****************************************************
*****************************************************
*****************************************************
*****************************************************
4.3.1.3 Except for Article 4.3.1.4 below, when CNSI PATENT
RIGHTS cease to exist in any country, as long as
BAYER is not in default on any material term of this
Agreement, then the patent license granted in this
Agreement shall be deemed paid up, and BAYER shall be
free to continue to commercialize PRODUCT in that
country without any further payment due CNSI under
this Agreement.
4.3.1.4 In any country in which CNSI PATENT RIGHTS cease to
exist before
*************************************years from the
first invoiced sale of PRODUCT in that country has
passed, then a royalty on NET SALES for that PRODUCT
in that country shall be calculated under Article
4.3.2 (Royalties for Know How) for the remainder of
the *************************************year period,
whereupon Article 4.3.2.3 shall apply.
4.3.2 Royalties for Know How: In each country in which no CNSI
PATENT RIGHTS exist at the time of the first sale of PRODUCT
in that country (that is, where no patents have issued by that
date, or where patents have expired, or where patents have
been found invalid and/or unenforceable by a court,
governmental or administrative agency of competent
jurisdiction, or where no patent applications were ever
filed), The following shall apply:
4.3.2.1 *****************************************************
*****************************************************
*****************************************************
***************************************
4.3.2.2 *****************************************************
*****************************************************
*****************************************************
***************************************.
4.3.2.3 *****************************************************
*****************************************************
*****************************************************
*****************************************************
*****************************************************
4.3.2.4 The above notwithstanding, if PRODUCT is sold in a
country where a patent application that is CNSI
KNOW-HOW hereunder has been filed but has not yet
issued as of the date of the first invoiced sale of
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21
PRODUCT in that country, then, upon grant of CNSI
PATENT RIGHTS in that country, a royalty on NET SALES
of PRODUCT in that country shall be calculated
according to Article 4.3.1 (Royalties for Patent
Rights), and upon expiration of the patent term,
Article 4.3.1.3 shall apply.
4.3.3 **************************************************************
**************************************************************
**************************************************************
**************************************************************
4.3.4 **************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
*************************************************************.
4.3.5 License to Third Party Patent Rights:
4.3.5.1 If upon advice of its legal counsel, BAYER reasonably
determines that, but for a license under any third
party's issued United States patent and/or published
patent application or patent granted outside the
United States, BAYER could not legally develop and/or
commercialize LICENSED TECHNOLOGY in the FIELD, then
BAYER shall endeavor to obtain such license rights.
*****************************************************
*****************************************************
*****************************************************
*****************************************************
4.3.5.2 If BAYER chooses to enhance manufacture of any
PRODUCT hereunder in a manner that would require a
license from a third party to incorporate the desired
(but not necessary to make, use and/or sell PRODUCT)
enhancement, then BAYER may endeavor to obtain such
license rights at its own expense.
4.1.1 **************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
4.4 Accounting Records and Procedures
4.4.1 Royalty Payments: BAYER shall make royalty payments due CNSI
on a quarterly basis, within *************days following the
end of each calendar quarter for which
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royalties are due. Each royalty payment shall be accompanied
by a report summarizing the NET SALES of the PRODUCT on a
country by country basis during the relevant three-month
period, the currency conversion rate, if applicable, which
royalty rate is being applied, the total royalty payments due,
the taxes withheld, if any.
4.4.2 Currency: Royalty payments shall be made in United States
dollars. The currency in which NET SALES were invoiced shall
be converted to United States dollars on the date of payment
of the royalty due using the applicable commercial rate of
exchange for buying US dollars with that currency that is the
closing selling rate for such currency, quoted as local
currency per US$1, published in the Wall Street Journal for
the last business day of the Quarter for which such payments
are due.
4.4.3 Records and Audits: BAYER will maintain accounting records in
such form and detail as to substantiate BAYER's accounting of
royalty payments to CNSI. BAYER shall make those records
available for audit by a mutually agreeable nationally
recognized accounting firm at CNSI's written request and
expense for the sole purpose of verifying the correctness of
calculations and classifications of such revenues, net sales,
costs, expenses, or payments made under this Agreement. BAYER
shall preserve its records for any calendar year for a period
of three (3) years following the close of that calendar year.
Upon expiration of three (3) years, the calculation of
royalties payable with respect to such year shall be binding
and conclusive upon CNSI, and BAYER shall be released from any
liability or accountability with respect to royalties for such
year.
4.4.4 Confidentiality of Financial Reports: CNSI agrees to hold in
confidence according to Article 7 (Confidentiality) all
information concerning royalty payments and financial reports,
and all information learned in the course of any audit except
to the extent disclosure by CNSI is required by law. If CNSI
believes disclosure is required by law, CNSI shall immediately
so notify BAYER and shall assist BAYER in maintaining BAYER's
rights at BAYER's expense.
4.4.5 Payment of taxes: CNSI shall be responsible for any and all
taxes, levies or charges assessed against royalty payments it
receives under this Agreement. If laws or regulations require
that taxes be withheld on royalty payments, BAYER will
a) deduct those taxes from the amount of royalty payment
due CNSI,
b) pay the taxes to the proper taxing authority in a
timely manner, and
c) send proof of payment to CNSI within sixty (60) days
following that payment.
The Parties agree to cooperate to obtain the benefit of any
tax treaty with respect to such royalty payments.
4.4.6 Sublicensees: In the event BAYER sublicenses PRODUCT to any
third party for the purpose of allowing the third party to
sell PRODUCT other than contract manufacturing for BAYER, the
agreement with the sublicensee shall include an obligation for
the sublicensee to account for and report its net sales of
PRODUCT on the same basis as if such sales were made by BAYER,
and BAYER shall pay royalties to CNSI under this Agreement as
if the net sales of PRODUCT of the sublicensee were NET SALES
of BAYER.
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23
4.4.7 Non-Product Related Sublicenses: In the event BAYER
sublicenses any CNSI PATENT RIGHTS and/or CNSI KNOW HOW to a
third party for the purpose of the third party's avoiding
infringement of such rights, or for some other reason other
than for third party sale of PRODUCT under Article 4.4.6
(Sublicensees), then *************************************of
any payment paid to BAYER by the third party shall pass
through BAYER to CNSI, and rights in such agreement shall be
assignable to CNSI in the event of termination of this
Agreement.
Article 5
SUPPLY of MATERIAL
5.1 Research Material: All material, whether made by or on behalf of either
CNSI or BAYER, that is within the scope of CNSI TECHNOLOGY and that
exists on the EFFECTIVE DATE shall be freely shared between the
Parties, as designated by the RESEARCH STEERING COMMITTEE, for the
purpose of completing the RESEARCH PROTOCOL. All amounts of such
material required beyond what exists as of the EFFECTIVE DATE shall be
supplied by BAYER, as shall be determined by the RESEARCH STEERING
COMMITTEE. ***********************************************************
***********************************************************************
***********************************************************************
5.2 Other Material: Subject to Article 5.1 (Research Material), BAYER has
the right to and shall manufacture or otherwise provide all amounts of
material within the scope of LICENSED TECHNOLOGY necessary for BAYER to
perform its responsibilities under this Agreement, including all
material required to perform all development studies, as well as all
material necessary for BAYER's marketing and sale of PRODUCT hereunder.
5.3 BAYER Cost of Manufacture: BAYER shall be responsible for all its costs
of manufacture of material under Article 5.2 (Other Material),
including all fixed and variable costs.
Article 6
PRODUCT COMMERCIALIZATION
6.1 Right to Commercialize: BAYER and its designated AFFILIATES, as the
exclusive licensees of LICENSED TECHNOLOGY in the FIELD in the
TERRITORY as stated in Article 3, have the sole right to promote,
market, distribute and sell, and/or have promoted, marketed,
distributed and sold, PRODUCT in its name in the TERRITORY.
6.2 Co-Promotion : If BAYER, *************************************, decides
to sell any PRODUCT in the United States under a trade xxxx through the
efforts of its own sales force as well as another entity's sales force
("co-promote"), and if, at that time, CNSI has its own sales force
*************************************experienced in marketing products
in the appropriate therapeutic areas, and the combination of CNSI sales
staff with BAYER sales staff will,
*************************************, synergistically increase product
sales in a cost effective manner, then the Parties will negotiate in
good faith to determine if they can reach agreement regarding such
co-promotion. To be authorized, any such co-promotion shall be the
subject of a separate written agreement between the Parties.
6.3 Cost of Commercialization: BAYER shall be responsible for all costs of
commercialization of PRODUCT hereunder except, should CNSI co-promote
PRODUCT under Article 6.2 (Co-Promotion), costs and benefits of
commercialization shall be negotiated in good faith between the Parties
and shall be the subject of a separate written agreement.
16
24
6.4 Product Liability: See Article 12.1 (Indemnification).
6.5 Trade Marks: BAYER and/or its AFFILIATES shall own all rights in any
and all trademarks for PRODUCT(s) commercialized hereunder. BAYER
and/or its AFFILIATES shall have sole responsibility for selection,
clearance and registration of said trademarks and for quality assurance
pertaining to the PRODUCT(s) bearing said trademarks. CNSI shall
cooperate with BAYER and/or its AFFILIATES and assist BAYER, if so
requested by BAYER, in the registration, defense and maintenance of
said trademarks. BAYER shall be responsible for all decisions and costs
relating to clearance, registration, defense and maintenance of
trademarks for the PRODUCT(s).
Article 7
CONFIDENTIALITY
7.1 Definition: CONFIDENTIAL INFORMATION is any meeting minutes generated
by the RESEARCH STEERING COMMITTEE and any RESEARCH PROTOCOL(s), as
well as all DATA generated hereunder, and any and all data and/or other
information related to the CNSI TECHNOLOGY and/or the FIELD which is
proprietary to the disclosing Party and not generally known, including
technological information not limited to compound(s), composition(s),
formulation(s) and/or, manufacturing information, and including
business information not limited to commercial forecasts, plans,
programs, customers, assets, financial projections, and costs.
CONFIDENTIAL INFORMATION also includes information described in Article
2.1.5.2 (Functions and Authority), Article 2.1.8 (Disbanding), Article
2.2.11 (Rights in DATA), Article 2.3.7 (Reporting), Article 4.4.4
(Confidentiality of Financial Reports), and Article 8.4 (Invention
Disclosure).
7.2 Obligations: Each Party agrees to hold all of the other Party's
CONFIDENTIAL INFORMATION received or generated hereunder in confidence
and neither disclose it to any third party nor allow any third party
access to it nor use it for any purpose other than as specified by this
Agreement. The above notwithstanding, BAYER may disclose CONFIDENTIAL
INFORMATION to its AFFILIATES which are bound by like terms of
confidentiality as those stated herein..
7.3 Exceptions: These obligations of non-disclosure and non-use shall not
apply to CONFIDENTIAL INFORMATION which:
(a) was, at the time of disclosure, in the possession of the
receiving Party and was not previously acquired from or on
behalf of the disclosing Party on a confidential basis,
(b) was in the public domain prior to disclosure, or became, after
disclosure, publicly known through no fault of the receiving
Party,
(c) was developed by or on behalf of the receiving Party
independent of its receipt of CONFIDENTIAL INFORMATION from
the disclosing Party,
(d) was received from a third party who rightfully made such
disclosure,
(e) was approved for use or release by written authorization from
the disclosing Party prior to such use or release by the
receiving Party, or
(f) is required to be disclosed by operation of law, governmental
regulation or court order provided the receiving Party gives
the disclosing Party notice of such disclosure prior to making
such disclosure, and the receiving Party uses all reasonable
effort to cooperate in securing confidential protection for
such information.
17
25
Any specific CONFIDENTIAL INFORMATION shall not be deemed to fall
within (a), (b), (c), (d), (e) or (f) above merely because it falls
within the scope of more general information within one of these
exceptions.
7.4 Term of Confidentiality: These obligations of confidentiality and
nonuse are binding throughout the duration of this Agreement and remain
in force for a period of ten (10) years from the date of its
expiration.
7.5 Return of Information: Upon termination and upon request from the
disclosing Party, the receiving Party agrees to promptly return all
originals and copies of CONFIDENTIAL INFORMATION received, as well as
permanently delete all electronically or otherwise stored CONFIDENTIAL
INFORMATION from all systems containing such INFORMATION, except that
one copy may be retained by legal counsel solely as a measure of the
receiving Party's obligations under this Agreement.
7.6 Business Publications:
7.6.1 Neither Party may disclose any information regarding the
nature and/or occurrence of this transaction, or the nature
and/or occurrence of any event or information occurring as a
result of this transaction without the prior written consent
of the other Party, except that BAYER may disclose such
information to its AFFILIATES or sublicensees that are under
like terms of confidentiality as those stated herein without
such consent. Any such information that is required by law to
be disclosed by either Party shall first be submitted to the
non-disclosing Party for such written approval, which shall
not be unreasonably withheld, prior to such publication. This
restriction shall not apply to such information that is
already publicly available through no fault of the disclosing
Party.
7.6.2 **************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
Article 8
INVENTIONS AND PATENTS
8.1 **************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
8.2 **************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
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26
8.3 Joint Inventions: Each Party shall own an undivided, one-half interest
in any IMPROVEMENT(s) made jointly by BAYER and CNSI under this
Agreement. The Parties agree to consult with one another prior to
taking any action to obtain patent protection for such joint
IMPROVEMENT(s).
8.4 Invention Disclosure: CNSI shall promptly disclose to BAYER any
IMPROVEMENTS arising under this Agreement. BAYER agrees to hold such
disclosure on a confidential basis under the same terms regarding
confidentiality as described in Article 7 (Confidentiality). CNSI
agrees to keep BAYER informed of the filing and status of any patent
application or patent pertaining to this Agreement, and, if BAYER so
requests, shall give BAYER ample time in which to review and comment on
the substance and scope of any proposed submission to any patent
authority concerning any CNSI patent application hereunder.
8.5 Know-how: Any CNSI IMPROVEMENT which is not patented due to its failure
to qualify for patent protection or due to a determination not to
submit a patent application, shall be considered CNSI KNOW HOW
hereunder.
8.6 CNSI Patent Maintenance: CNSI shall not abandon or for any other reason
allow any CNSI PATENT RIGHTS to be terminated without first giving
BAYER sufficient notice to allow BAYER to determine whether it would be
interested in pursuing those rights in its own name and at its own
expense.
8.7 BAYER Patent Maintenance: : BAYER shall not abandon or for any other
reason allow any BAYER patent rights relating to the research performed
by BAYER hereunder to be terminated without first giving CNSI
sufficient notice to allow CNSI to determine whether it would be
interested in pursuing those rights in its own name and at its own
expense.
8.8 **************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
8.9 Assignment of Rights: To the extent that BAYER assumes the
responsibility for filing, obtaining and/or maintaining any patent
applications and/or patents on IMPROVEMENTS under Article 8.8
(BAYER/CNSI Patents), CNSI agrees to promptly assign such patent
application(s) and/or patent(s) to BAYER and to readily assist BAYER in
obtaining, maintaining and defending such patents at BAYER's expense
but without further payment to CNSI. Any CNSI PATENT RIGHTS assigned to
BAYER under this Article 8.9 (Assignment of Rights) shall become BAYER
patent rights and shall no longer be considered CNSI PATENT RIGHTS
hereunder.
8.10 No Waiver: By entering into this Agreement, subject to Article 8.9
(Assignment of Rights) and the licenses granted in this Agreement,
neither Party waives or forfeits any of its rights to any patent that
it owns and that exists at the EFFECTIVE DATE, or to any IMPROVEMENT
that it owns either jointly or solely.
8.11 Cost of CNSI Patents: BAYER may, in its sole discretion, choose to have
CNSI continue to file, prosecute and maintain patent applications that
are CNSI KNOW HOW and CNSI PATENT RIGHTS and shall be given reasonable
time and notice to comment on
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proposed actions concerning such rights, or it may choose to assume
filing, prosecution and maintenance of such rights directly or
indirectly, through outside counsel of its choice, and will give CNSI
reasonable time and notice to comment on proposed actions concerning
CNSI KNOW HOW and CNSI PATENT RIGHTS. In any event BAYER shall
reimburse CNSI for all necessary and reasonable, direct, actual patent
costs incurred by CNSI for CNSI PATENT RIGHTS and patent applications
that are CNSI KNOW HOW (including IMPROVEMENTS) that accrue after the
EFFECTIVE DATE but during the term of this Agreement.
8.12 Reimbursement of Costs: All patent costs to be reimbursed by BAYER
under Article 8.11 (Cost of CNSI Patents) shall be first paid by CNSI.
The invoice shall then be forwarded to BAYER. BAYER will pay CNSI the
invoice amount, not including fees for unreasonable extensions of time
and other extra fees that were under the control of CNSI, within forth
five (45) days of receipt of such invoice.
8.13 No further interest in patents/applications: If, at any time during the
Agreement, BAYER determines that it has no further commercial interest
in any particular patent(s)/application(s) that are CNSI KNOW HOW or
CNSI PATENT RIGHTS, then BAYER shall so notify CNSI in writing. BAYER
shall incur no further payment obligations regarding those particular
patents/applications as of the date of such written notice, and the
license granted to BAYER for those particular patents/applications
hereunder shall be revoked as of the same date. BAYER shall give CNSI
the notice described above in sufficient time to allow CNSI to maintain
any rights in any such CNSI KNOW HOW or CNSI PATENT RIGHTS in which
BAYER is no longer interested.
Article 9
Patent Infringement
9.1 Infringement by Third Parties:
9.1.1 Notification: If any claims in CNSI PATENT RIGHTS exclusively
licensed to BAYER hereunder are believed to be infringed by a
third party in a country where LICENSED TECHNOLOGY is being or
will be sold, the Party first having knowledge of such
infringement shall promptly so notify the other Party in
writing. Such notice shall set forth in reasonable detail the
facts of that infringement as are then known.
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9.1.3 Distribution of Awards:
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If CNSI brings suit under Article 9.1.2 (Initiating
Proceedings), then BAYER shall reimburse CNSI within
forty-five (45) days of receipt of an itemized invoice for
CNSI's reasonable expenses incurred in pursuing the award.
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BAYER's NET SALES for the calendar year in which they were
received, and shall be included in the calculation of NET
SALES for purposes of determining the amount of royalties due
according to Article 4.3 (Royalty Payments). If BAYER brings
suit under Article 9.1.2 (Initiating Proceedings), then BAYER
shall first credit against any award received BAYER's
reasonable expenses incurred in pursuing the award, after
which the remaining amount shall be added to BAYER's NET SALES
for the calendar year in which they were received, and shall
be included in the calculation of NET SALES for purposes of
determining the amount of royalties due according to Article
4.3 (Royalty Payments).
9.1.4 Voluntary Disposition: No settlement or consent judgment or
other voluntary final disposition of a suit under this Article
9.1 may be entered into by either Party without the prior
consent of the other Party.
9.2 Claims Against LICENSED TECHNOLOGY:
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Article 10
Term and Termination
10.1 Term and Expiration: This Agreement shall be effective as of the
EFFECTIVE DATE and, unless terminated earlier pursuant to this Article
10 (Term and Termination), the Agreement shall expire on a country by
country basis on the expiration of BAYER's obligations to pay royalties
under the Agreement, at which time, as long as BAYER is not in material
default hereunder, BAYER shall have a paid-up, irrevocable, license to
practice LICENSED TECHNOLOGY as stated elsewhere herein.
10.2 Termination by CNSI:
10.2.1 For Cause: If CNSI believes in good faith that BAYER is in
material breach of any material provision of this Agreement,
including failure to make payments due hereunder, and BAYER
has not cured such breach or initiated dispute resolution
measures according to Article 12.6 (Dispute Resolution)
concerning the alleged breach within ninety (90) days of
receipt of written notice of material breach from CNSI
detailing the alleged breach, then CNSI may terminate this
Agreement as of the ninetieth (90th) day after the date of
BAYER's receipt of its written notice of material breach.
10.2.2 Effect of Termination: Termination of this Agreement for cause
by CNSI under Article 10.2 shall not relieve BAYER of any
obligation that accrued prior to such termination. Termination
for cause shall cause the revocation of all licenses and other
rights granted under this Agreement as of the date of
termination. However, BAYER shall have the right to dispose of
any inventory of bulk and/or finished PRODUCT it has as of the
date of termination, according to the terms of this Agreement.
This Article shall survive termination of this Agreement.
10.3 Termination by BAYER:
10.3.1 Upon Written Notice: At any time during this Agreement, BAYER
may terminate this Agreement one hundred twenty (120) days
from the date of written notice to CNSI of such termination
whereupon all licenses granted hereunder stand revoked, and
any inventory remaining shall be forwarded to CNSI at CNSI's
expense or destroyed, at CNSI's option. If such termination
takes place before CNSI completes all research described in
the RESEARCH PROTOCOL for which CNSI is responsible hereunder,
and, therefore, an overage has been paid by BAYER in relation
to the actual COST OF RESEARCH, the amount of the overage
shall be refunded to BAYER in full within ninety (90) days of
such termination.
10.3.2 Duty to Mitigate: BAYER will pay CNSI's COST OF RESEARCH
through the 120 day termination period identified in Article
10.3.1 (Upon Written Notice). However, immediately upon
receipt by CNSI of notice of termination according to Article
10.3.1 (Upon Written Notice), CNSI shall take immediate steps
to cease accruing, or, if that is not possible, to mitigate
any COST OF RESEARCH that was not already incurred or
committed as of the date of receipt of such notice.
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10.3.3 Without Cause: If such termination is without cause against
CNSI, (for example, or failure to receive necessary regulatory
approvals, or economic unfeasibility in BAYER's judgment,)
then CNSI shall have the right to negotiate in good faith for
a license from BAYER for any BAYER patents, patent
applications, know-how, trademarks (excluding the Bayer Cross,
trademarks containing the word "Bayer", and trademarks
containing the syllable "Bay"), and/or right of reference to
regulatory filings and/or approvals the lack of which could
preclude CNSI from practicing LICENSED TECHNOLOGY as sold or
contemplated to be sold by BAYER hereunder. If CNSI chooses to
exercise its right to negotiate under this clause within one
year of termination without cause, then BAYER shall negotiate
in good faith for such a license.
10.3.4 With Cause: If CNSI is in material breach of this Agreement
(for, for example but not by way of limitation, failure to
meet its obligations under the RESEARCH PROTOCOL), and has not
cured such breach or initiated dispute resolution procedures
under Article 12.7 (Dispute Resolution) within ninety (90)
days of receipt of notice of termination under Article 10.3.1
(Upon Written Notice), then such termination is with cause,
and BAYER may, at its option, terminate the entire Agreement,
or may terminate only the Research Program hereunder whereupon
the RESEARCH STEERING COMMITTEE disbands according to Article
2.1.7 (Disbanding), and CNSI's reservation of rights under
Article 3.3 (Reservation of Rights to CNSI) are revoked, and,
all other terms and conditions of this Agreement, including
royalty obligations, remain in full force and effect, and
BAYER has the right to perform or have performed any research
concerning LICENSED TECHNOLOGY in the FIELD at its own expense
during the remaining term of this Agreement. If BAYER chooses
to terminate only the Research Program hereunder, CNSI agrees
to the timely transfer of technology along with technical
assistance (provided BAYER reimburses CNSI for all
pre-approved actual costs incurred by CNSI therefor).
10.3.5 Termination Upon Reorganization
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10.4 Disposition of Inventory: BAYER may dispose of its inventory of
PRODUCT(s) on hand as of the effective date of termination, and may
fill any orders for PRODUCT(s) accepted prior to the effective date of
termination, for a period of twelve (12) months after the effective
date of termination, and, within thirty (30) days after disposition of
such inventory and fulfillment of such orders (and in any event within
fourteen (14)months after termination) BAYER will forward to CNSI a
final report and pay all royalties due for NET SALES in such period.
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Article 11
Representations and Warranties
11.1 Corporate Existence and Power: Each Party represents and warrants to
the other Party that (a) it is a corporation duly organized and validly
existing and in good standing under the laws of the state in which it
is incorporated; (b) it has the corporate power and authority and the
legal right to own 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) it 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.
11.2 Authorization and Enforcement of Obligations: Each Party represents and
warrants to the other Party that it has the corporate power and
authority and legal right to enter into this Agreement and to perform
its obligations hereunder; and that this Agreement has been duly
executed and delivered on behalf of each Party and, except as it may be
limited by applicable law, constitutes a legal, valid, binding
obligation, according to its terms.
11.3 Consents: Each Party represents and warrants to the other Party that
all necessary consents, approvals and authorizations of all
governmental authorities and others required to be obtained by each
Party in connection with this Agreement have been obtained.
11.4 No Conflict: Each Party represents and warrants to the other Party that
the execution and delivery of this Agreement and the performance of
such Party's obligations hereunder do not conflict with or violate any
requirement of applicable laws or regulations, and do not conflict
with, or constitute a default under any contractual obligation of such
Party.
11.5 Authorization of Obligations: The execution, delivery and performance
by each Party of this Agreement have been duly authorized by all
necessary corporate action and do not and will not (a) require any
consent or approval of its stockholders or any other third party that
has not been received by the EFFECTIVE DATE, (b) violate any provision
of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect that have
applicability to it or any provision of its charter documents or (c)
result in a breach of or constitute a default under any material
agreement, mortgage, lease, license, permit or other instrument or
obligation to which it is a party or by which it or its properties may
be bound or affected.
11.6 CNSI Representations: CNSI represents and warrants to BAYER that as of
the date of this Agreement:
11.6.1 CNSI has disclosed to BAYER any and all pertinent information
of which it is aware and of which it, using its best efforts,
should be aware as of the EFFECTIVE DATE of this Agreement as
is material to and reasonably necessary for BAYER to
accurately evaluate its interest in entering into this
Agreement.
11.6.2 CNSI is the sole owner of, or the exclusive worldwide licensee
of CNSI PATENT RIGHTS and CNSI KNOW HOW, with right to grant
to BAYER the rights granted in this Agreement, free and clear
of any liens or encumbrances which would prevent or impair the
grant of such rights.
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11.6.3 CNSI has not assigned or conveyed any interest in CNSI PATENT
RIGHTS or CNSI KNOW HOW licensed to BAYER under this
Agreement, or entered into any agreement or made any
commitment which is inconsistent with or in derogation of the
rights granted to BAYER hereunder.
11.7 Certain Covenants of CNSI and BAYER: Throughout the term of this
Agreement, CNSI and BAYER each shall:
11.7.1 Maintain and preserve its corporate existence, rights,
franchises and privileges in the jurisdictions of its
formation.
11.7.2 Comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of any
government authority to the extent necessary to perform its
obligations hereunder, except for those laws, rules,
regulations, and orders it may be contesting in good faith.
Article 12
Miscellaneous
12.1 Indemnification:
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12.1.3 Force Majeure: Any delay in the performance of any of the
obligations of either Party (except for the payment of money)
shall not be considered a breach of this Agreement and the
time required for performance shall be extended for a period
equal to the period of such delay, provided that such delay
has been caused by or is the result of any act of God, acts of
the public enemy; insurrections; riots; embargoes; labor
disputes such as strikes, lockouts or boycotts; fires;
explosions; floods; earthquakes; mudslides; or other
unforeseeable causes beyond the control of the Party so
affected. The Party so affected shall give prompt notice to
the other Party of such cause, and shall take whatever
reasonable steps are necessary to relieve the effect of such
cause as rapidly as reasonable.
12.1.4 Survival: The following Articles shall survive expiration or
termination of this Agreement: Article 3.7.2 (Xxxxx Xxxxx of
Rights); Article 4.4.3 (Records and Audits); Article 4.4.4
(Confidentiality of Financial Reports); Article 4.4.5 (Payment
of Taxes); Article 4.4.7 (Non-Product Related Sublicenses);
Article 6.5 (Trademarks); Article 7 (Confidentiality); Article
8.2 (Sole Inventions); Article 8.3 (Joint Inventions); Article
9.1.3 (Distribution of Awards); Article 9.2.3 (Patent
Indemnification); Article 10.2.2 (Effect of Termination);
Article 10.4 (Disposition of Inventory); Article 12.1
(Indemnification); and Article 12.7 (Dispute Resolution).
12.1.5 Notice: Whenever any notice is to be given hereunder, it shall
be in writing and shall be deemed received on the day
delivered, if delivered by courier on a business day, or if
sent by first-class certified or registered mail, postage
prepaid, to the following addresses
CNSI: Cambridge NeuroScience, Inc.
Xxx Xxxxxxx Xxxxxx, Xxxxxxxx 000
Xxxxxxxxx, XX 00000
Attention: President and CEO
BAYER: Xxxxx XX
Pharmaceuticals Business Group
D-51368 Leverkusen, Germany
Attention: International Cooperations and Licensing
with a copy to: Xxxxx XX
KB-RP
D-51368 Leverkusen, Germany
Attention: Patents and Licensing/Pharma
12.2 Waivers: No waiver of any term, provision, or condition of this
Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be construed as a further or continuing
waiver of any such term, provision, or condition of this Agreement
unless reduced to writing signed by an authorized representative of
each Party.
12.3 Applicable Law: This Agreement shall be construed under the substantive
laws of the State of Connecticut, without reference to its conflicts of
laws provisions.
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12.4 Dispute Resolution: Except when the provisions in Article 2.1.7
(Dispute Resolution) apply, should any dispute arise between the
Parties concerning this Agreement, the Parties agree to first attempt
to resolve the dispute in good faith between the Parties through
meetings between the President of BAYER's Pharmaceutical Division and
the President of CNSI before resorting to any other forum for a remedy.
If resolution of the dispute is not reached between the Presidents
within sixty (60) days of their first meeting to discuss such dispute,
then the Parties must promptly initiate mediation in good faith through
JAMS Endispute or another mutually agreeable, recognized mediation
group. If settlement has not been reached through mediation within
sixty (60) days of the first meeting among each Party and the mediator,
then either Party may bring suit against the other. If CNSI files suit
against BAYER, CNSI agrees to do so in New Haven County, Connecticut,
and If BAYER files suit against CNSI, BAYER agrees to do so in Suffolk
County, Massachusetts.
12.5 Assignment:************************************************************
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12.6 Severability: If any provision of this Agreement is held to be illegal
or unenforceable, that provision shall be limited to the minimum extent
necessary or, if necessary, eliminated, so that this Agreement shall
otherwise remain enforceable and in full force and effect
12.7 Integration Clause: This Agreement is the sole agreement with respect
to the subject matter hereof, and supersedes all proposals,
negotiations, conversations, discussions, agreements and/or
representations, whether oral or written, including any industry custom
or past dealing between the Parties relating to the subject matter of
this Agreement. The Parties agree that any and all obligations between
the Parties that are outside the terms of this Agreement and that
relate to the subject matter of this Agreement that preceded the
EFFECTIVE DATE of this Agreement have been satisfactorily executed or
are null and void.
12.8 Amendment of Agreement: No change, modification, extension,
termination, waiver or other amendment of this Agreement or any of the
provisions contained herein, shall be valid unless made in writing and
signed by a duly authorized representative of each Party.
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This Agreement is agreed to and accepted by:
Xxxxx XX Cambridge NeuroScience, Inc.
By: /s/ Xx. Xxxxxxx By:/s/ Xxxxx X. Xxxxxx
Title:Direktor Title: President and CEO
Date:December 18, 1998 Date: December 23, 1998
and
By: /s/ I Villetebro
Title: Patents and licensing
Date: December 18, 1998
[IN DUPLICATE]
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Appendix 1
CNSI KNOW HOW
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Appendix 2
CNSI PATENT RIGHTS
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Appendix 3
RESEARCH PROTOCOL
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Appendix 4
CNSI Third Party Contracts
Related to CNSI TECHNOLOGY
CAMBRIDGE NEUROSCIENCE'S GGF-2 RELATED MATERIAL TRANSFER AGREEMENTS
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Appendix 5
CNSI Subcontractees and Proposed Budget
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