CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
AMENDED AND RESTATED RESEARCH, DEVELOPMENT AND MARKETING
COLLABORATION AGREEMENT
THIS AMENDED AND RESTATED RESEARCH, DEVELOPMENT AND MARKETING
COLLABORATION AGREEMENT ("Amendment") is made as of October, 1997, by and
between CoCensys, Inc., a Delaware corporation ("CoCensys"), located at 000
Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, Acea Pharmaceuticals, Inc., a
wholly owned subsidiary of CoCensys, Inc. ("Acea"), located at 000 Xxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, and Xxxxxx-Xxxxxxx Company, a Delaware
corporation ("Warner"), located at 000 Xxxxx Xxxx, Xxxxxx Xxxxxx, Xxx Xxxxxx
00000. As used in this Amendment, "CoCensys" shall include Acea.
WITNESSETH:
WHEREAS, CoCensys, Acea and Warner entered into that certain Research,
Development and Marketing Agreement as of October 26, 1995 relating to a
collaborative effort to discover and develop NMDA receptor subtype selective
antagonists (the "Original Agreement"); and
WHEREAS, the parties desire to amend and restate the original Agreement to
expand the scope of the research and development efforts thereunder and to
otherwise modify certain terms thereof.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained herein, CoCensys, Acea and Warner
hereby agree that, effective as of the date hereof, that certain Research,
Development and Marketing Collaboration Agreement among the parties, dated
October 26, 1995 is hereby amended and restated as follows:
SECTION 1. DEFINITIONS
The following capitalized terms shall have the meanings indicated for
purposes of this Amendment:
1.1. "AFFILIATE" shall mean any corporation, association, or other entity
which directly or indirectly controls, is controlled by or is under common
control with the party in question. As used in this definition of "Affiliate",
the term "control" shall mean direct
1
or indirect beneficial ownership of more than 50% of the voting or income
interest in such corporation or other business entity.
1.2. "AGREEMENT" shall mean the Original Agreement as amended and restated
by this Amended and Restated Research, Development and Marketing Collaboration
Agreement.
1.3. "AMPA ANTAGONIST" shall mean an AMPA-type glutamate receptor
antagonist or a positive AMPA receptor modulator, the chemical structure of
which does not match that described in part (a) of Schedule 1.3 which is
attached hereto and incorporated herein by reference.
1.4 "BACKGROUND TECHNOLOGY" shall mean all technology, inventions,
information, data, know-how, compounds (including compounds arising from
research performed by CoCensys, Oregon, or UC pursuant to the Oregon/UC
Agreements), and materials (whether or not patented or patentable) that
(i) relate to the discovery, design, synthesis, delivery, development, testing,
use, manufacture or sale of NRSSAs or AMPA Antagonists that; (ii) with respect
to NRSSAs exist as of the Effective Date and with respect to AMPA Antagonists,
exist as of the Restatement Date; and (iii) are owned or Controlled by a party
hereto. Background Technology shall not include (i) any CoCensys Compounds or
(ii) any compounds which have been identified as active in the Field and which
were discovered, synthesized or developed by either party pursuant to the
Screening Collaboration Agreement, which such compounds shall be considered
"Collaboration Compounds." Background Technology also shall not include (i)
any compound described in part (a) of Schedule 1.3 owned or Controlled by
either Warner or by CoCensys or (ii) licostinel (ACEA-1021) or any backup
compound candidates that are primarily glycine site antagonists of the NMDA
receptor type of glutamate receptor, such compounds being identified by
CoCensys or its licensees and including but not limited to the compounds
covered by the patents listed in part (b) of Schedule 1.3.
1.5. "BULK PRODUCT" shall mean the active ingredient of any Product, in
bulk form.
1.6. "CIBA COLLABORATION" shall mean that research and development
collaboration regarding licostinel (Acea 1021), and certain back-up compounds
therefore, conducted pursuant to that certain Research and Development
Agreement by and between CoCensys, Acea, and Ciba-Geigy Limited, dated as of
December 23, 1994.
1.7. "COCENSYS COMPOUNDS" shall mean those compounds identified by
CoCensys prior to or following the term of the Screening Collaboration
Agreement, but prior to the Effective Date, as showing activity in the Field,
including, but not limited to, those compounds which are described in the
patent application referenced on Schedule 1.7 hereto. CoCensys Compounds
excludes any compound which has been identified by CoCensys (or its licensee)
as a Development Candidate and which was not discovered or designated primarily
as an NRSSA or an AMPA Antagonist.
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1.8 "CO-DEVELOPMENT PERCENTAGE" shall have the meaning set forth in
Section 5.3.
1.9 "COLLABORATION COMPOUND(S)" shall mean:
(i) any compound identified, discovered, synthesized, or developed
by either party during the Term of the Research Program and pursuant to the
Research Program, including without limitation, a compound which constitutes a
Non-Field Invention; or
(ii) any compound which was identified as active in the Field,
discovered, synthesized, or developed pursuant to research conducted by
CoCensys or Warner pursuant to the Screening Collaboration Agreement; or
(iii) any CoCensys Compound; or
(iv) any compound which is an analog or derivative of any compound
described in subsections (i), (ii), or (iii) of this definition of
"Collaboration Compound" and which analog or derivative is identified,
discovered, synthesized, or developed within 1 year after the end of the Term
of the Research Program.
Notwithstanding the foregoing, "Collaboration Compound" shall not
include (x) any Development Candidate identified, discovered, synthesized, or
developed by either party or (y) any compound identified, discovered,
synthesized, or developed independently by a party either prior to or after the
Effective Date as the result of research activities outside the Field
(including any efforts conducted under the Ciba Collaboration), if such
compound has no NRSSA or AMPA Antagonist activity or has only, or is later
discovered to have only, Incidental NRSSA Activity or Incidental AMPA Activity.
"Incidental NRSSA Activity" means NRSSA activity which is not a substantial
contributor to the compound's pharmacological activity. "Incidental AMPA
Activity" shall mean AMPA activity which is not a substantial contributor to
the compound's pharmacological activity.
1.10. "COLLABORATION LEAD COMPOUND(S)" shall have the meaning set
forth in Section 5.1.
1.11. "COLLABORATION PRODUCT(S)" shall mean any Collaboration Lead
Compound(s) in development from and after the date of filing of an IND with
respect to such Collaboration Lead Compound, through and including product
registration and commercial sales.
1.12. "COLLABORATION TECHNOLOGY" shall mean all (a) Collaboration
Compounds and information related thereto; (b) such technology, inventions,
information, data, know-how, and materials (whether or not patented or
patentable) that (i) a party hereto owns or Controls, (ii) relate to the Field,
and (iii) are conceived, generated, or reduced to practice during the Term of
the Research Program and pursuant
3
to the Research Program or pursuant to Preclinical Development or
Development, including, without limitation, improvements on either party's
Background Technology; and (c) all patents and trade secrets covering any of
(a) or (b).
1.13. "CONTROL" shall mean possession of the ability to grant the
licenses or sub-licenses as provided for herein without violating the terms of
any agreement or other arrangement with any Third Party.
1.14. "CO-PROMOTION COUNTRY" shall mean with respect to a
Collaboration Lead Compound or Collaboration Product for which CoCensys has
exercised the Re-engagement Option, the United States of America and its
territories and possessions, including the Commonwealth of Puerto Rico.
1.15. "CO-PROMOTION EXPENSES" shall mean the following expenses
incurred by a party or for its account with respect to a Collaboration Product
which the parties are co-promoting pursuant to Section 7, to the extent
allocable to the preparation for the commercial launch of a Collaboration
Product in the Co-Promotion Country, or the marketing, promotion, and sales of
a Collaboration Product subsequent to the receipt of Regulatory Approval in the
Co-Promotion Country:
(i) the Cost of Goods; and
(ii) post-Regulatory Approval medical and clinical trial costs, costs
of monitoring adverse drug reactions, costs of quality control complaints, and
costs associated with maintenance of the Regulatory Approvals; and
(iii) costs of distribution and shipping of the Collaboration
Product to distributors and customers for the Collaboration Product; and
(iv) direct costs, specifically allocable to the Collaboration
Product, incurred for the sales (including cost of sales forces, specialty
sales force, call reporting and other monitoring/tracking costs; and regional
sales management and marketing management), advertising, promotion, and
marketing of the Collaboration Product through any means (including
advertisements, promotional literature, market research, symposia, exhibits,
and direct mail); and
(v) costs of product liability insurance and costs associated with
the defense and settlement of product liability claims; and
(vi) costs associated with the registration of the trademark used in
connection with such Collaboration Product or any trademark infringement
litigation; and
(vii) any consideration payable to Third Parties for licenses
required for the manufacture, importing, sale, marketing or use of the
Collaboration Product to the extent set forth in Sections 4.5(a) and 6.4(c);
and
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(viii) expenses associated with recalls; and
(ix) any other expenses on which the parties may mutually agree.
Co-Promotion Expenses will not include general corporate overhead.
1.16. "CORE U.S. DOSSIER" shall have the meaning set forth in
Section 5.3(c).
1.17. "COST OF GOODS" shall mean the cost of Bulk Products or Finished
Products sold and shall be computed in accordance with United States Generally
Accepted Accounting Standards. Cost of Goods shall include (i) in the case of
manufacturing services provided by Warner, its Cost of Manufacture of such
Finished Products, as well as the net cost or credit of any value-added taxes
actually paid or utilized in respect of the Finished Products and (ii) in the
case of Finished Products or Bulk Products acquired from Third Parties,
payments made by either party to such Third Parties, as well as the net cost or
credit of any value-added taxes actually paid or utilized in respect of the
Finished Products or Bulk Products.
1.18. "COST OF MANUFACTURE" shall mean, with respect to any Bulk
Product or Finished Product, the fully allocated cost of manufacturing such
Product (in accordance with Good Manufacturing Practices), which includes the
direct and indirect cost of any raw materials, packaging materials, and labor
(including benefits) utilized in such manufacturing (including formulation,
filling, finishing, labeling, and packaging, as applicable) plus an appropriate
share of all factory overhead, both fixed and variable, allocated to the
Product being manufactured, in accordance with the normal accounting practices
for all other products manufactured in the applicable facility.
1.19. "DEVELOPMENT" shall mean the development of any Collaboration
Product from and after the filing of an IND, through, and including product
registration.
1.20. "DEVELOPMENT CANDIDATE" shall mean a compound which, in the case
of NRSSA as of the Effective Date, and in the case of an AMPA Antagonist as of
the Restatement Date, is undergoing Preclinical Development, including clinical
development/scale-up, assay development, toxicology, pharmacokinetics,
metabolism, and safety pharmacology outside the Field.
1.21. "DEVELOPMENT COSTS" shall mean all costs and expenses reasonably
charged directly to Preclinical Development of any Collaboration Lead Compound
or Development of the applicable Collaboration Product, including preclinical
and clinical studies, pharmaceuticals development, manufacturing scale-up costs
and validation, qualification and certification costs (and after the effective
exercise of the Re-engagement Option shall be estimated in the Development Plan
and Budget). Development Costs shall include:
(i) the Costs of Goods for such Collaboration Product in Preclinical
Development or Development as set forth in Section 9.1(d); and
5
(ii) direct and indirect labor (fringe benefits and overtime) at a
rate to be negotiated by the parties prior to the commencement of any
Preclinical Development; and
(iii) direct costs for outside professional services, including,
but not limited to, toxicology studies or clinical studies performed by Third
Parties, all to the extent supported by invoices and actual payments; and
(iv) direct charges (chemicals, lab supplies, animals and other
direct charges) at actual cost plus an allocation for overhead of 25% (cost
X 1.25).
General corporate overhead shall be excluded from Development Costs.
1.22. "DEVELOPMENT PLAN AND BUDGET" shall have the meaning set forth
in Section 5.3(c).
1.23. "DRUG APPROVAL APPLICATION" shall mean an application for
Regulatory Approval required before commercial sale or use of a Collaboration
Product as a drug in the Co-Promotion Country.
1.24. "EFFECTIVE DATE" shall mean October 26, 1995.
1.25. "EXECUTIVE COMMITTEE" shall have the meaning set forth in
Section 3.1.
1.26. "FDA" shall mean the United States Food and Drug Administration.
1.27. "FIELD" shall mean research, drug discovery and development
aimed at NRSSAs and AMPA Antagonists and all therapeutic benefits of NRSSAs and
AMPA Antagonists, including, without limitation, the treatment of stroke, head
trauma, pain, chronic neurodegenerative conditions, epilepsy, depression,
anxiety, psychosis, substance abuse, and other neurological and psychiatric
disorders.
1.28. "FINISHED PRODUCT" shall mean the finished pharmaceutical form,
in any formulation, of a Product, packaged for sales to Third Parties.
1.29. "IND" shall mean an Investigational New Drug Application.
1.30. "INDEPENDENT LEAD COMPOUND(S)" shall have the meaning set forth
in Section 5.3(j).
1.31. "INDEPENDENT PRODUCT(S)" shall have the meaning set forth in
Section 5.3(j).
1.32. "INVENTION(S)" shall have the meaning set forth in
Section 4.1(b).
1.33. "JOINT DEVELOPMENT COMMITTEE" or "JDC" shall have the meaning
set forth in Section 3.3.
6
1.34. "MAA" shall mean a Marketing Approval Application filed with the
European Medicines Evaluation Agency or the appropriate health authority in the
applicable country in Europe.
1.35. "NDA" shall mean a New Drug Application.
1.36. "NET SALES" shall mean the gross amount actually received from
non-affiliated customers for all Products sold, after deduction for the
following items (i) trade, quantity, and cash discounts or rebates actually
allowed and taken, and any other adjustments, including, without limitation,
those granted on account of price adjustments, billing errors, rejected goods,
damaged goods and recall returns in such amounts as are customary in the trade;
(ii) credits, rebates, charge-back and prime vendor rebates, fees,
reimbursements or similar payments granted or given to wholesalers and other
distributors, buying groups, health care insurance carriers, pharmacy benefit
management companies, health maintenance organizations or other institutions or
health care organizations; (iii) any tax, tariff, customs duties, excise or
other duties or other governmental charge (other than an income tax) levied on
the sale, transportation or delivery of a Product and borne by the seller
thereof; (iv) payments or rebates paid in connection with sales of Products to
any governmental or regulatory authority in respect of any state or federal
Medicare, Medicaid or similar programs; and (v) any charge for freight,
insurance or other transportation costs.
1.37. "NON-FIELD INVENTIONS(S)" shall mean all technology, inventions,
information, data, know-how, compounds and material (whether or not patentable)
that a party hereto owns or Controls that are not useful or necessary for use
in the Field, but that are conceived, generated, or reduced to practice
(i) during the Term of the Research Program and pursuant to the Research
Program or (ii) pursuant to Preclinical Development or Development.
1.38. "NRSSA" shall mean an antagonist with selectivity for a specific
subtype of the NMDA type of glutamate receptor.
1.39. "OREGON" shall mean the University of Oregon, acting either
alone or on behalf of the University of California, Irvine, as the case may be.
1.40. "OREGON LICENSE AGREEMENT" shall mean that certain License
Agreement between Oregon (acting on its own behalf and on behalf of the
University of California, Irvine) and Acea, dated September 29, 1992, as may be
amended from time to time, and any successor agreements thereto.
1.41. "OREGON RESEARCH AGREEMENT" shall mean that certain Sponsored
Research Agreement between Oregon and Acea, dated September 10, 1992, as may be
amended from time to time, and any successor agreements thereto.
7
1.42. "OREGON/UC AGREEMENTS" shall mean, collectively, the Oregon
License Agreement, the Oregon Research Agreement, the Oregon/UC Assignment
Agreement, and the UC Research Agreement.
1.43. "OREGON/UC ASSIGNMENT AGREEMENT" shall mean that certain
Agreement between Oregon and UC, dated September 23, 1992, as may be amended
from time to time, and any successor agreements thereto.
1.44. "ORIGINAL WARNER COMPOUND" shall mean any compound which is as
of the Restatement Date or thereafter, contained within Warner's internal
compound library and is other than a compound which is identified and first
synthesized during the Term of the Research Program pursuant to the Research
Program.
1.45. "PATENT RIGHTS" shall mean, with respect to CoCensys or Warner,
all United States and foreign patents (including all reissues, extensions,
substitutions, confirmations, re-registrations, re-examinations, revalidations,
and patents of addition) and patent applications (including, without
limitation, all continuations, continuations-in-part, and divisions thereof)
owned or Controlled by CoCensys or Warner, respectively, at any time during the
Term of this Agreement relating to the design, synthesis, delivery,
development, testing, use, manufacture, importation, offer for sale or sale of
Independent Lead Compounds, Independent Products, Collaboration Compounds,
Collaboration Lead Compounds, Collaboration Products, or other agents with
activity in the Field.
1.46. "PRECLINICAL DEVELOPMENT" shall mean all activities (including,
but not limited to, chemical development/scale-up, assay development,
toxicology, pharmacokinetics, metabolism, and safety pharmacology), which may
or may not be conducted pursuant to GMP/GLP, undertaken to develop a
Collaboration Lead Compound which are prior to the effective exercise of the Re-
engagement Option, determined by Warner (or after the effective exercise of the
Re-engagement Option, determined by the Joint Development Committee) to be
necessary or desirable to file an IND on such Collaboration Lead Compound,
including the preparation and filing of an IND.
1.47. "PRECLINICAL DEVELOPMENT CRITERIA" shall have the meaning set
forth in Section 5.1(a).
1.48. "PRODUCT" shall mean a Collaboration Product or Independent
Product, as applicable, in final packaged form.
1.49. "PROJECT TEAM LEADER" shall have the meaning set forth in
Section 3.3.
1.50. "RE-ENGAGEMENT OPTION" shall have the meaning set forth in
Section 5.3.
1.51. "REGULATORY APPROVAL" shall mean all approvals (including
pricing and reimbursement approvals), licenses, registrations, and
authorizations of all national, supra-national, regional, state or local
regulatory agencies, and departments and other
8
governmental entities, necessary for the manufacture, distribution, use or
sale of a Collaboration Product in the Co-Promotion Country.
1.52. "REQUIRED SALES EFFORT" shall have the meaning set forth in
Section 7.4.
1.53. "RESEARCH MANAGEMENT COMMITTEE" or "RMC" shall have the meaning
set forth in Section 3.2.
1.54. "RESEARCH PLAN" shall have the meaning set forth in Section 2.1.
1.55. "RESEARCH PROGRAM" shall mean that program of research performed
by the parties pursuant to Section 2.
1.56. "RESTATEMENT DATE" shall mean the latest date set forth on the
signature page of this Agreement.
1.57. "SCIENTIFIC FTE" shall mean a full-time scientist (or in the
case of less than a full-time, dedicated scientist, a full-time, equivalent
scientist year), dedicated to research under the Research Program.
1.58. "SCREENING COLLABORATION AGREEMENT" shall mean that certain
Screening Collaboration Agreement, dated July 25, 1994, by and between Warner
and Acea.
1.59. "SECOND SOURCE" shall have the meaning set forth in
Section 10.3.
1.60. "TERM OF CO-PROMOTION" for a Collaboration Product approved for
sale in the Co-Promotion Country shall mean the period beginning upon the first
commercial sale of such Collaboration Product in the Co-Promotion Country and
ending on the later of (i) expiration of the last to expire Patent Right
necessary to make, use, import, offer for sale and sell such Collaboration
Product in the Co-Promotion Country, or (ii) 10 years from first commercial
sale of such Collaboration Product in the Co-Promotion Country.
1.61. "TERM OF THIS AGREEMENT" shall mean the period from the
Effective Date until, with respect to each Product, the expiration of the last
profit sharing or royalty obligation owed by one party to the other with
respect to such Product, or until this Agreement is otherwise terminated
pursuant to its terms.
1.62. "TERM OF THE RESEARCH PROGRAM" shall have the meaning set forth
in Section 2.4.
1.63. "THIRD PARTY" shall mean any party other than Warner or CoCensys
or an Affiliate of either of them.
1.64. "TOTAL PROFIT" shall mean, on a country-by-country basis, Net
Sales for each Collaboration Product less all Co-Promotion Expenses incurred by
the parties for such Collaboration Product in the applicable country.
9
1.65. "UC" shall mean the Regents of the University of California.
1.66. "UC RESEARCH AGREEMENT" shall mean that certain Sponsored
Research Agreement between UC and Acea, dated June 29, 1992, as may be amended
from time to time, and any successor agreements thereto.
SECTION 2. RESEARCH PROGRAM
2.1. UNDERTAKING AND SCOPE. The Research Management Committee will agree
on and, in its discretion, modify the general direction of the Research Program
to be performed under this Section 2. Correspondence and other material
documenting such agreement and approved by the RMC are collectively referred to
herein as the Research Plan. Initially, the Research Plan shall be as set forth
on Schedule 2.1 which is attached hereto and incorporated herein by reference.
Each party agrees to use its best efforts to perform the activities detailed in
the Research Plan, in a professional and timely manner. Promptly after the
Effective Date and, in the case of AMPA Antagonists, the Restatement Date, each
party shall disclose to the other all Background Technology and Collaboration
Technology then possessed by it relevant to the Field and necessary or helpful
to perform the work described in the Research Plan. Notwithstanding the
foregoing, Warner shall not be obligated to disclose to CoCensys the structure
of any compound existing in the Warner Background Technology or Collaboration
Technology until NRSSA or AMPA Antagonist activity is confirmed in such
compound and CoCensys shall not be obligated to disclose to Warner the
structure of any compound existing in the CoCensys Background Technology or
Collaboration Technology until NRSSA or AMPA Antagonist activity is confirmed
in such compound. Each party shall also provide to the other samples of
compounds and biological materials that comprise its Background Technology or
Collaboration Technology to the extent necessary for such other party to
perform its obligations under the Research Plan and to the extent owned or
Controlled by such party, provided, however, that neither party shall be
obligated to unreasonably deplete its compound library. CoCensys acknowledges
that, as of the Effective Date, it is in possession of certain [*], which were
provided by a Third Party. CoCensys will use reasonable efforts to obtain
permission from such Third Party to share such [*] with Warner.
2.2. PERSONNEL AND RESOURCES. Each party agrees to commit the personnel,
facilities, expertise, and other resources necessary to perform its obligations
under the Research Plan; provided, however, that neither party warrants that
the Research Program shall achieve any of the research objectives contemplated
by them. From the Restatement Date until December 31, 1997, Warner and CoCensys
will each maintain at its cost a minimum of [*] Scientific FTEs. Thereafter,
and continuing until the end of the Term of the Research Program, CoCensys
shall maintain a minimum of [*] Scientific FTEs (who shall be CoCensys
employees). Commencing on [*], Warner shall reimburse CoCensys for a minimum of
[*] Scientific FTEs at a rate of [*] per Scientific FTE, per calendar year.
Warner shall pay CoCensys such amounts in advance on a quarterly basis. The
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scientific priorities and direction of such Scientific FTEs will be determined
by the Research Management Committee, which may increase or decrease the
minimum number of Scientific FTEs required to be maintained, provided, however,
that in no event shall the minimum number of Scientific FTEs be set by the
Research Management Committee at more than [*] or less than [*] during the
first [*] following the Effective Date. The Scientific FTEs maintained by
CoCensys may include, but shall not be limited to, scientists in the areas of
molecular biology, pharmacology, neuropharmacology, and medicinal chemistry.
The Scientific FTEs maintained by Warner may include, but shall not be limited
to, scientists in the areas of molecular biology, biochemistry, biochemical
pharmacology, neuropharmacology, behavioral pharmacology, medicinal chemistry,
and computer-assisted drug design.
CoCensys shall be permitted to contract with Oregon at CoCensys' cost, in
the form of a sponsored research agreement, to assist it in performing those of
its obligations under this Section 2 which CoCensys is required to perform
prior to December 31, 1997, and the number of Scientific FTEs performing such
services at Oregon shall be credited against the minimum number of Scientific
FTEs required to be maintained by CoCensys hereunder prior to December 31,
1997. CoCensys represents and warrants that if CoCensys utilizes personnel or
facilities of Oregon to perform any such work, it shall only do so pursuant to
a written agreement between CoCensys and Oregon which shall contain terms and
conditions consistent with the terms and conditions of this Agreement,
including, without limitation, terms protecting Warner's rights in any
Collaboration Technology arising from such performance. Warner shall have the
right to review any such agreement prior to the execution thereof and such
agreement shall not be signed until approved by the RMC. Warner shall review,
and the RMC shall consider approval of, such agreement in an expeditious
manner.
2.3. INFORMATION AND REPORTS CONCERNING COLLABORATION TECHNOLOGY. All
Collaboration Technology made by either party will be promptly disclosed to the
other, with significant discoveries or advances being communicated as soon as
practical after such information is obtained or its significance is
appreciated. The parties will exchange at least monthly verbal or written
reports presenting a meaningful summary of their activities performed under
this Agreement. In addition to the foregoing, each party shall promptly provide
to the other the structures of all Collaboration Compounds and other biological
materials prepared or developed by such party pursuant to the Research Program.
2.4. TERM OF THE RESEARCH PROGRAM. Work under the Research Plan will
commence as of the Effective Date and, unless terminated earlier by either
party pursuant to the terms of this Agreement or extended by mutual agreement
of the parties, will terminate on the [*] anniversary of the Restatement Date,
provided that the work may be extended for additional [*] terms upon the mutual
written consent of the parties (as terminated, expired or extended, the "Term
of the Research Program"). The Term of the Research Program may be terminated
by either party upon 6 months prior written notice to the other party,
provided, however, that the terminating party shall be obligated to
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continue all Research Program studies ongoing at the time of such written
notice until the effective date of such termination and shall provide the
data arising therefrom to the non-terminating party. Upon early termination
by a party of the Term of the Research Program pursuant to the preceding
sentence, each party shall retain such ownership interest in the
Collaboration Technology as it shall hold on the date of the termination;
provided, however, that (i) the licenses granted to the non-terminating party
under Section 2.5, Section 4.7, and Section 6 shall remain in full force and
effect, but the terminating party shall forfeit all rights to co-develop and
co-promote all Collaboration Compounds, (ii) the terminating party shall not
conduct any further research in the Field for a period of [*] from the
effective date of such early termination, and (iii) all licenses granted to
such terminating party under this Agreement may be immediately terminated by
the other party. Any Collaboration Compound pursued by the non-terminating
party in such event shall be deemed an Independent Product and the
non-terminating party shall pay to the terminating party a royalty on Net
Sales of such Independent Product equal to [*].
2.5. CROSS-LICENSES TO BACKGROUND TECHNOLOGY. Each party hereby grants and
agrees to grant to the other a non-exclusive, royalty-free license to use and
practice such party's Background Technology for research purposes in the Field
until [*]. In addition, for each Collaboration Compound which enters
Preclinical Development or Development, each party hereby grants and agrees to
grant to the other a non-exclusive, royalty-free license to use and practice
such party's Background Technology for the Preclinical Development or
Development of such Collaboration Compound until termination of such
Preclinical Development or Development. Notwithstanding the foregoing, the
granting party may terminate such license granted by it immediately upon its
termination of this Agreement for breach by the other party under Section 14.1,
or upon the other party's early termination of the Research Program pursuant to
Section 2.4.
SECTION 3. COMMITTEES
3.1. EXECUTIVE COMMITTEE.
(a) Promptly after the Effective Date, Warner and CoCensys will each
appoint 3 representatives to a management committee (the "Executive
Committee"). Chairmanship of the Executive Committee meetings will rotate
between a CoCensys member and a Warner member based on which party is hosting
the Executive Committee meeting. The Executive Committee will be charged with
overseeing and managing the entire Collaboration, including the Research
Management Committee, the Joint Development Committee, and the Marketing
Committee. In addition, the role of the Executive Committee will be to:
(1) coordinate the parties' activities hereunder; (2) resolve problems or
settle disagreements that are unresolved by the RMC, the JDC, and the Marketing
Committee unless otherwise indicated in this Agreement; (3) approve allocations
of tasks and resources required to carry out the goals of the Collaboration;
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(4) approve all plans and annual budgets for the various projects and programs
within the Collaboration; (5) designate Collaboration Lead Compounds;
(6) encourage and facilitate ongoing cooperation between the parties;
(7) coordinate and monitor the payments and repayments to be made by and
between the parties; and (8) perform such other functions as appropriate to
further the purposes of this Agreement as determined by the parties. Any
disputes or disagreements within the Executive Committee shall be resolved
pursuant to Section 3.6.
(b) The Executive Committee will meet every 6 months during the term
of this Agreement and at such other times as a party may request, alternating
between Ann Arbor, Michigan and Irvine, California and will otherwise
communicate regularly by telephone, facsimile, and video conference. Each party
recognizes the importance of the Executive Committee in the success of the
Collaboration and will use diligent efforts to cause all of its representatives
to such committee to attend all meetings of such committee. A party may change
any of its appointments to the Executive Committee at any time upon giving
written notice to the other party.
3.2. RESEARCH MANAGEMENT COMMITTEE. Promptly after the Effective Date,
Warner and CoCensys will each appoint 3 representatives to a Research
Management Committee (the "Research Management Committee" or "RMC"). CoCensys
will appoint the chairman of the RMC for the initial 12 months. Thereafter,
chairmanship will rotate between a Warner member and a CoCensys member every
12 months. The RMC will review, direct, and supervise all operational and
scientific aspects of the Research Program. The duties of the Research
Management Committee shall include determining the direction of the Research
Plan, adding molecular targets, conducting biological and medicinal chemical
studies, and proposing Collaboration Lead Compounds to the Executive Committee.
The Research Management Committee will meet quarterly, or more frequently if
mutually agreed, and will alternate sites of meetings between Irvine,
California and Ann Arbor, Michigan and will otherwise communicate regularly by
telephone, facsimile, and video conference. Each party recognizes the
importance of the Research Management Committee in the success of the
Collaboration and will use diligent efforts to cause all of its representatives
to such committee to attend all meetings of such committee. A party may change
any of its appointments to the Research Management Committee at any time upon
giving written notice to the other party. Any disputes or disagreements within
the RMC shall be resolved pursuant to Section 3.6.
3.3. JOINT DEVELOPMENT COMMITTEE. Within 30 days of the date CoCensys
exercises the Re-engagement Option in accordance with Section 5.3 to co-develop
a Collaboration Lead Compound, Warner shall appoint 4 representatives and
CoCensys shall appoint 2 representatives to a Joint Development Committee (the
"Joint Development Committee" or "JDC"). Such representatives will include
individuals with expertise and responsibilities in the areas of preclinical
development, clinical development, or regulatory affairs. The JDC will oversee
all aspects of the Preclinical Development and Development of each
Collaboration Lead Compound for which CoCensys has exercised the Re-engagement
Option through the filing of an NDA or its
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foreign equivalent on a Collaboration Product arising from such Collaboration
Lead Compound. With respect to each Collaboration Lead Compound in
Preclinical Development and each Collaboration Product in Development, the
Executive Committee will, upon nomination from each party, select one Warner
JDC representative as a "Project Team Leader" with respect to such
Collaboration Lead Compound or Collaboration Product. The Project Team Leader
will be responsible for overseeing the operational aspects of the Preclinical
Development and the Development of the applicable Collaboration Lead Compound
or Collaboration Product, as directed by the JDC, and will prepare and submit
to the JDC issues and problems to be decided by the JDC. The JDC will meet on
a quarterly basis, alternating between Ann Arbor, Michigan and Irvine,
California and will otherwise communicate regularly by telephone, facsimile
and video conference. Each party recognizes the importance of the Joint
Development Committee in the success of the Collaboration and will use
diligent efforts to cause all of its representatives to such committee to
attend all meetings of such committee. A party may change any of its
appointments to the Joint Development Committee at any time upon giving
written notice to the other party.
3.4 MARKETING COMMITTEE. At such time as registration and marketing in
the Co-Promotion Country for one or more Collaboration Products for which
CoCensys has exercised the Re-engagement Option in accordance with Section 5.3
is anticipated, and in any event, no later than at the conclusion of Phase II
clinical studies for any such Collaboration Product, Warner shall appoint 3
representatives and CoCensys shall appoint 1 representative to a marketing
committee (the "Marketing Committee"). Such representatives will include
individuals with expertise in sales, marketing , clinical trials, manufacturing
or regulatory affairs. The Marketing Committee shall develop a marketing plan
for each Collaboration Product in the Co-Promotion Country for which CoCensys
has exercised the Re-engagement Option, shall oversee quality control of each
such Collaboration Product as set forth in Section 9 and shall oversee
operational aspects of marketing and sales in the Co-Promotion Country
following launch of each such Collaboration Product, as further discussed in
Section 7. The Marketing Committee will meet on a quarterly basis, alternating
between Xxxxxx Plains, New Jersey and Irvine, California and will otherwise
communicate regularly by telephone, facsimile and video conference. Each party
recognizes the importance of the Marketing Committee in the success of the
Collaboration and will use diligent efforts to cause all of its representatives
to such committee to attend all meetings of such committee. A party may change
any of its appointments to the Marketing Committee at any time upon giving
written notice to the other party.
3.5. MEETINGS. All committees created hereunder may meet by telephone or
video conference or in person at such times as are agreeable to the members of
each such committee. Attendance at meetings shall be at the respective expense
of the participating parties. Each committee created hereunder shall assure
that agendas and minutes are prepared for each of its meetings. All actions
taken and decisions made by the Executive Committee and the Research Management
Committee shall be by unanimous agreement. All actions taken and decisions
made by the Joint Development Committee and the
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Marketing Committee shall be by majority vote. If personal attendance is not
possible for valid reasons, voting by proxy is permissible.
3.6. DISPUTE RESOLUTION. Any disputes or disagreements arising in the RMC
will be referred to the Executive Committee if the RMC is unable to resolve
such dispute or disagreement within 30 days. In addition, any other disputes or
disagreements between the parties arising hereunder will be referred to the
Executive Committee. If the Executive Committee is unable to resolve, after
30 days, a dispute regarding any issue presented to it or arising in it, such
dispute will be referred to the Chief Executive Officer of CoCensys and a
senior officer of Warner's pharmaceutical business for good faith resolution,
for a period of 90 days. If such dispute is not resolved by the end of such
90-day period, the parties shall be free to pursue any legal or equitable
remedy available to them.
SECTION 4. PATENTS, KNOW-HOW RIGHTS, AND INVENTIONS
4.1. OWNERSHIP OF TECHNOLOGY.
(a) BACKGROUND TECHNOLOGY. Except as otherwise set forth herein,
each party shall retain ownership or Control, as the case may be, over its
Background Technology. The owner of any patentable Background Technology shall
have the right, at its option and expense, to prepare, file and prosecute in
its own name any patent applications with respect to such Background Technology
and to maintain any patents issued.
(b) COLLABORATION TECHNOLOGY. Except as otherwise set forth herein,
ownership of Collaboration Technology (whether or not patentable) shall be
determined in accordance with United States laws of inventorship. Subject to
Section 4.2, the owner (the "Inventor") of any patentable Collaboration
Technology (an "Invention") shall have the right, at its option and expense, to
prepare, file, and prosecute in its own name any patent applications with
respect to any Invention owned by it and to maintain any patents issued. In
connection therewith, the non-Inventor party agrees to cooperate with the
Inventor at the Inventor's expense in the preparation and prosecution of all
such patent applications and in the maintenance of any patents issued. The
obligations set forth in this Section 4.1(b) shall survive the expiration or
termination of this Agreement.
(c) NON-FIELD TECHNOLOGY. Warner shall own all Non-Field Inventions
that constitute or claim the formulation, composition of matter or use of any
compound supplied to CoCensys by Warner. CoCensys shall own all Non-Field
Inventions that relate to any compound supplied to Warner by CoCensys. The
parties will co-own all other Non-Field Inventions. The parties will cooperate
in the joint filing of patent applications claiming Non-Field Inventions
described in the preceding sentence. All compounds which are Non-Field
Inventions shall be deemed Collaboration Compounds.
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4.2. JOINT INVENTIONS.
(a) Collaboration Technology jointly invented by CoCensys and Warner
and Collaboration Technology derived from the screening of the Warner compound
library or the CoCensys compound library using screening technology contributed
by CoCensys will be jointly owned by CoCensys and Warner; however, subject to
Section 4.2(b), Warner will have the rights and responsibilities of the
"Inventor" as described in this Section 4 in respect of any such patentable,
jointly owned Collaboration Technology and CoCensys shall have the rights and
responsibilities of a non-Inventor therein. Warner shall use patent counsel
reasonably acceptable to CoCensys [*] in connection with its preparation,
filing, and prosecution of patent applications that claim patentable, jointly
owned Collaboration Technology. If CoCensys exercises the Re-engagement Option,
then with respect to a Collaboration Lead Compound or Collaboration Product
claimed by any such patent and patent applications Warner shall, on a quarterly
basis, notify CoCensys of the amount of all expenses incurred by Warner in
connection with the preparation, filing and prosecution of such patents and
patent applications in the Co-Promotion Country relating to such Collaboration
Lead Compounds or Collaboration Products and provide CoCensys with an itemized
accounting of such expenses and CoCensys shall promptly thereafter pay Warner a
percentage of its out-of-pocket expenses for such preparation, filing, and
prosecution in the Co-Promotion Country equal to the [*]. CoCensys shall
further thereafter reimburse Warner for the [*] of such expenses thereafter
incurred by Warner in connection with such patents and patent applications.
All expenses in connection with the preparation, filing and prosecution in
non-Co-Promotion Countries of patent applications that claim patentable,
jointly owned Collaboration Technology shall be borne [*]. CoCensys may use
patent counsel reasonably acceptable to Warner to review and provide comments
with respect to the preparation, filing and prosecution of patent applications
that claim patentable, jointly owned Collaboration Technology and [*] in
connection therewith. As used in this Section 4.2(a), "out-of-pocket expenses"
shall mean direct costs, excluding internal labor costs.
(b) CoCensys shall have the sole right and responsibility to
prepare, prosecute and maintain any patents or patent applications covering the
composition of matter, use, manufacture, or formulation of the CoCensys
Compounds and Warner shall not have the rights and responsibilities of the
"Inventor" with respect to any such patents or patent applications. [*] in
connection with the preparation, filing, and prosecution of patent applications
that claim CoCensys Compounds. CoCensys shall, on a quarterly basis, notify
Warner of the amount of such expenses in the Co-Promotion Country relating to
any Collaboration Lead Compound or Collaboration Product for which CoCensys has
exercised the Re-engagement Option and provide Warner with an itemized
accounting of such expenses and Warner shall promptly thereafter pay CoCensys
[*] of its out-of-pocket expenses for such preparation, filing, and prosecution
in the Co-Promotion Country equal to [*]. All expenses in connection with the
preparation, filing, and prosecution in non-Co-Promotion Countries of patent
applications that claim
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patentable CoCensys Compounds shall be borne [*]. As used in this Section
4.2(b), "out-of-pocket expenses" shall mean direct costs, excluding internal
labor costs.
4.3. PROTECTION OF PATENT RIGHTS.
(a) The Inventor shall prepare, prosecute, and maintain (and shall
keep the other party currently informed of all steps to be taken in such
preparation, prosecution and maintenance of) all of its Patent Rights which
claim an Invention and at the other party's request, shall furnish the other
party with copies of such Patent Rights and other related correspondence
relating to such Invention to and from patent offices and permit the other
party to offer its comments thereon before the Inventor makes a submission to a
patent office which could materially affect the scope or validity of the patent
coverage that may result. The non-Inventor party shall offer-its comments
promptly. CoCensys and Warner shall each promptly notify the other of any
infringement or unauthorized use of an Invention which comes to its attention.
(b) If the Inventor fails to (i) fulfill its obligations under this
Section 4 or (ii) protect against abandonment of a Patent Right which claims an
Invention, the Inventor shall permit the non-Inventor party, at its option and
expense, to undertake such obligations. The party not undertaking such actions
shall fully cooperate with the other party and shall provide to the other party
whatever assignments and other documents that may be needed in connection
therewith. The party not undertaking such actions may require a suitable
indemnity against all damages, costs and expenses and impose such other
reasonable conditions as such party's advisors may require. If a party
undertakes the obligations of "Inventor" under this Section 4 with respect to
any Patent Rights of the other party under this Section 4.3(b), it shall
prosecute and maintain the same vigorously at its own expense, and shall not
abandon or compromise them or fail to exercise any rights of appeal without
giving the other party the right to take over the prosecuting party's conduct,
at such other party's own expense.
(c) In the event CoCensys or Warner becomes aware of any actual or
threatened infringement of any Patent Right of either party which claims an
Invention or a Non-Field Invention, that party shall promptly notify the other
and the Executive Committee shall promptly discuss how to proceed in connection
with such actual or threatened infringement. If both parties participate in the
conduct of a legal action pursuant to this Section 4.3(c), (i) if one party
files, the actual costs and expenses of such action shall be [*] or (ii) if
both parties file, the actual costs and expenses of such action shall be [*],
based on the actual costs and expenses incurred by each party in connection
with such action. Any remaining damages shall then be paid [*]. If one party
alone conducts such legal action, [*]. If either party commences any actions or
proceedings (legal or otherwise) pursuant to this Section 4.3(c), it shall
prosecute the same vigorously at its expense and shall not abandon or
compromise them or fail to exercise any rights of appeal without giving the
other party the right to take over the prosecuting party's conduct at such
other party's own expense.
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4.4. OREGON'S PATENT RIGHTS. Warner acknowledges and understands that
certain Collaboration Technology that is Controlled by CoCensys may be owned in
whole or in part by Oregon (and licensed to CoCensys) and is therefore subject
to the Oregon/UC Agreements. Warner further acknowledges that any rights
granted under this Section 4 to Warner as Inventor are subject to Oregon's
rights to prepare, prosecute, and maintain certain patents and patent
applications pursuant to the Oregon/UC Agreements.
4.5. ALLEGATIONS OF INFRINGEMENT BY THIRD PARTIES.
(a) If either party should be of the opinion that it or the other
party cannot commercially reasonably make, import, use, market and/or sell a
Collaboration Product without infringing a Third Party's patent or other
intellectual property rights, it shall notify the other party. Both parties
then shall seek an opinion of patent counsel acceptable to both parties. In the
Co-Promotion Country, if such patent counsel concurs with the notifying party's
opinion, the parties shall jointly or independently endeavor to secure a
license from the Third Party on terms that are acceptable to both parties. In a
non-Co-Promotion Country, if such patent counsel concurs with the notifying
party's opinion, Warner shall endeavor to secure a license from the Third Party
on terms that are acceptable to both parties. Any royalties payable by either
party in the Co-Promotion Country under any such Third Party license shall be
included as a Co-Promotion Expense in that country. [*] of any royalties
payable by [*] in a non-Co-Promotion Country under any such Third Party license
shall be deducted from royalty payments due to [*] pursuant to this Agreement
with respect to such Collaboration Product in such country, provided, however,
in no event shall royalties due CoCensys pursuant to this Agreement with
respect to sales of any Collaboration Product in any non-Co-Promotion country
be reduced by more than [*] of such Collaboration Product in such country. If
in the opinion of such patent counsel the Third Party patent is invalid or will
not be infringed by the manufacture, use, sale, or import of the Collaboration
Product, the parties shall proceed in accordance with the terms of this
Agreement, unless an action for infringement is brought against one or both
parties.
(b) If either party is sued for patent infringement of any Third
Party patents or other intellectual property right arising out of the
manufacture, use, sale, or importation of a Collaboration Product in a
Co-Promotion Country, the parties shall promptly meet to discuss the course of
action to be taken to resolve or defend any such infringement litigation. Each
party shall provide the other with such assistance as is reasonably necessary
and shall cooperate in the defense of any such action. Any costs and expenses
of defending such action and any damages or other compensation imposed shall be
included as a Co-Promotion Expense in the Co-Promotion Country in which such
action arose.
(c) Warner shall be solely responsible for the defense of any
threatened or actual claims for Third Party patent infringement or other Third
Party
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intellectual property right arising out of the manufacture, use, sale or
importation of a Collaboration Product other than in the Co-Promotion Country.
Upon receiving notice of such actual or threatened claims, Warner shall
promptly meet with CoCensys to discuss the course of action to be taken to
resolve or defend any such infringement litigation. [*] of any costs and
expenses of defending such action and any damages or other compensation imposed
shall be deducted from [*] pursuant to this Agreement with respect to such
Collaboration Product in such Non-Co-Promotion Country, provided, however, in
no event shall [*] pursuant to this Agreement with respect to sales of any
Collaboration Product in any non-Co-Promotion Country be reduced by more than
[*] of such Collaboration Product in such country.
(d) Notwithstanding the foregoing, each party will pay 100% of any
costs and expenses and damages or other consideration resulting from a Third
Party infringement action if it relates solely to allegations of infringement
made against such party prior to the Effective Date.
4.6. INDEPENDENT EFFORTS. Except as expressly stated in Section 5.3(j), a
party shall not, during the Term of the Research Program, conduct any
activities independent of the Collaboration within the Field. Ownership rights
to inventions that do not rely in material part on technology, data or
knowledge contributed by the other party or derived under the Collaboration and
that are made by the employees of CoCensys (but not of Warner) or by the
employees of Warner (but not of CoCensys), as the case may be, whether or not
made during the Term of this Agreement, shall reside solely in CoCensys or
Warner, respectively, as the case may be. Neither party will claim or seek any
ownership rights, licenses or royalties or other compensation with respect to
such inventions of the other party. The applicable party shall have the right,
at its option and expense, to prepare in its own name, file and prosecute any
patent applications and to maintain any patents issued with respect to such
inventions. In connection therewith, the other party agrees to cooperate with
the filing party at the filing party's expense in the preparation and
prosecution of all such patent applications covering such independent
inventions to the extent that such party's cooperation is reasonably necessary
therefor. This obligation shall survive the expiration or termination of this
Agreement.
4.7. CROSS-LICENSES TO INVENTIONS AND OTHER COLLABORATION TECHNOLOGY. Each
party hereby grants and agrees to grant to the other a perpetual,
non-exclusive, royalty-free license to use such party's Inventions and other
Collaboration Technology for research purposes only in the Field.
SECTION 5. DEVELOPMENT PROGRAM
5.1. DESIGNATION OF COLLABORATION LEAD COMPOUND.
(a) From time to time the RMC will propose, or either party may
propose to the Executive Committee one or more Collaboration Compounds for
further Preclinical Development. Such proposal will be in writing, accompanied
by an outline of
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proposed studies and activities through Phase I or IIa for each Collaboration
Compound recommended. The Executive Committee will promptly determine whether
such Collaboration Compound meets Warner's then current criteria for lead
compound designation (the "Preclinical Development Criteria").
(b) If the Executive Committee determines that such Collaboration
Compound meets the Preclinical Development Criteria, then thereafter, such
Collaboration Compound shall be deemed to be a "Collaboration Lead Compound"
and later a "Collaboration Product". Warner shall commence the Preclinical
Development and Development of such Collaboration Lead Compound within [*] days
of such determination by the Executive Committee, provided that Warner shall
have the right, upon written notice to the Executive Committee, to decline to
develop a Collaboration Lead Compound, in which case CoCensys will have the
right to proceed independently with the development of such Collaboration Lead
Compound according to Section 5.3(j).
(c) If neither party desires to further develop a Collaboration
Compound and so indicates to the Executive Committee, such Collaboration
Compound shall be neither a Collaboration Lead Compound nor a compound which
may be developed under Section 5.3(j) (except as provided below), and this
Section 5.1(c) shall govern any future development of such discontinued
Collaboration Compound (a "Discontinued Compound"). If at any time on or before
the [*] of the date upon which the latter of the two parties hereto rejected
such Collaboration Compound as a Collaboration Lead Compound pursuant to
Section 5.l(b) (the "Rejection Date"), a party hereunder (the "Interested
Party") decides it is interested in reinitiating development of such
Discontinued Compound, it shall provide written notice to the other party of
such interest and the reasons therefor, in sufficient detail as to allow the
other party to make a reasoned judgment regarding the opportunities presented
by such development (including, in the case of CoCensys, the Co-Development
Percentage elected by CoCensys with respect to such Discontinued Compound). The
other party will then have [*] to provide written notice to the Interested
Party indicating whether it also is interested in the development of such
Discontinued Compound. If the other party is Warner and Warner indicates it is
interested in reinitiating Preclinical Development or Development of such
Discontinued Compound, the parties will proceed with Preclinical Development or
Development of such Discontinued Compound as a Collaboration Lead Compound for
which CoCensys has exercised the Re-engagement Option pursuant to the terms of
this Agreement. If the other party is Warner and Warner indicates it is not
interested in reinitiating Preclinical Development or Development of such
Discontinued Compound, CoCensys may proceed with development of such
Discontinued Compound as an Independent Product and CoCensys shall be deemed to
be the Independent Party, pursuant to Section 5.3(j). If the other party is
CoCensys, and CoCensys indicates it is not interested in reinitiating
Preclinical Development or Development or such Discontinued Compound, Warner
shall proceed with Preclinical Development or Development of such Collaboration
Lead Compound pursuant to the terms of this Agreement provided that CoCensys
shall not be permitted to thereafter exercise the Re-engagement Option. At any
time after the [*] of the Rejection Date, either party may, upon written notice
to the other party, proceed with
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development of a Discontinued Compound as an Independent Product and such
party shall be deemed to be the Independent Party, pursuant to Section 5.3(j).
(d) If a Collaboration Compound is not, at any time, presented to
the Executive Committee pursuant to Section 5.l(a), such Collaboration Compound
shall be neither a Collaboration Lead Compound nor a compound which may be
developed under Section 5.3(j) (except as provided below), and this
Section 5.l(d) shall govern any future development of such non-proposed
Collaboration Compound (a "Non-Proposed Compound"). If at any time on or before
the [*] of the date of termination or expiration of the Term of the Research
Program, a party hereunder (the "Non-Proposed Compound Interested Party")
decides it is interested in reinitiating development of such Non-Proposed
Compound, it shall provide written notice to the other party of such interest
and the reasons therefor, in sufficient detail as to allow the other party to
make a reasoned judgment regarding the opportunities presented by such
development. The other party will then have [*] to provide written notice to
the Non-Proposed Compound Interested Party indicating whether it also is
interested in the development of such Non-Proposed Compound. If the other party
is Warner and Warner indicates it is interested in reinitiating Preclinical
Development or Development of such Non-Proposed Compound, the parties will
proceed with Preclinical Development or Development of such Non-Proposed
Compound as a Collaboration Lead Compound for which CoCensys has exercised the
Re-engagement Option pursuant to the terms of this Agreement. If the other
party is Warner and Warner indicates it is not interested in reinitiating
Preclinical Development or Development of such Non-Proposed Compound, CoCensys
may proceed with development of such Non-Proposed Compound as an Independent
Product and CoCensys shall be deemed to be the Independent Party, pursuant to
Section 5.3(j). If the other party is CoCensys, and CoCensys indicates it is
not interested in reinitiating Preclinical Development or Development or such
Discontinued Compound, Warner shall proceed with Preclinical Development or
Development of such Collaboration Lead Compound pursuant to the terms of this
Agreement provided that CoCensys shall not be permitted to thereafter exercise
the Re-engagement Option. At any time after the [*] of the date of termination
or expiration of the Term of the Research Program, either party may, upon
written notice to the other party, proceed with development of a Non-Proposed
Compound as an Independent Product and such party shall be deemed to be the
Independent Party, pursuant to Section 5.3(j).
5.2. DEVELOPMENT BY WARNER. Unless and until CoCensys exercises its
Re-engagement Option pursuant to the terms of Section 5.3, Warner shall be
solely responsible for the strategy and the conduct and funding of the
Preclinical Development and Development with respect to any Collaboration Lead
Compound or Collaboration Product. Until the end of Phase II meeting with the
FDA for each Collaboration Lead Compound, Warner shall keep CoCensys fully
informed of the status and progress of the Pre-Clinical Development and
Development of such Collaboration Lead Compound. Upon receipt of written notice
from CoCensys that it is considering exercising the Re-engagement Option with
respect to any Collaboration Lead Compound or Collaboration Product, Warner
shall provide CoCensys with the amount of Development Costs incurred
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by Warner in the Preclinical Development or Development of such Collaboration
Lead Compound or Collaboration Product and shall otherwise discuss with
CoCensys the anticipated future Development Costs for such Collaboration Lead
Compound or Collaboration Product. In the event that Warner determines to
subcontract any of the Development to a Third Party, it shall notify CoCensys
and CoCensys shall have the right to submit one or more proposals to Warner
to perform such work. Warner shall in good faith consider any such proposals
of CoCensys which are competitive with Third Party proposals for the same
work, provided, however, that Warner shall be under no obligation to accept
any such proposal.
5.3 JOINT DEVELOPMENT. At any time after the Executive Committee
designates a Collaboration Lead Compound until the end of Phase II meeting with
the FDA relating to such Collaboration Lead Compound, CoCensys shall have the
right on a Collaboration Lead Compound-by-Collaboration Lead Compound basis to
elect to co-develop and co-promote such Collaboration Lead Compound with Warner
(such right is hereinafter referred to as the "Re-engagement Option").
CoCensys shall exercise such right by providing Warner with written notice of
such election and indicating the percentage of Total Profit that CoCensys
desires to obtain with respect to such Collaboration Lead Compound or
Collaboration Product, which shall be between [*] (the "Co-Development
Percentage"). Such election shall only be effective if such written notice is
accompanied by [*] of the Development Costs incurred by Warner with respect to
the applicable Collaboration Lead Compound or Collaboration Product prior to
the effective date of such written notice, calculated according to the
following table:
Date of Exercise of Percentage of the
Re-engagement Option Co-Development Percentage
-------------------- --------------------------
[*] [*]
[*] [*]
[*] [*]
Upon exercise of the Re-engagement Option in accordance with this Section
5.3, the following provisions shall apply, following the date of such exercise,
to the Preclinical Development and Development of the applicable Collaboration
Lead Compound or Collaboration Product for which the Re-engagement Option was
exercised as well as such other provisions of this Agreement which by their
terms shall also so apply:
(a) COSTS. The payment of the costs of conducting such
Preclinical Development shall be as set forth in Section 5.3(d). Under no
circumstances shall either
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party conduct studies of the Collaboration Lead Compound except as permitted
by the JDC.
(b) COLLABORATIVE DEVELOPMENT OF COLLABORATION PRODUCT. The parties
will each diligently collaborate in the Development of the Collaboration
Products and use diligent efforts to develop and bring such Collaboration
Product to the market as soon as reasonably practicable. The role of each party
in the research and development process will be proposed by the Project Team
Leader and approved by the JDC, with each party providing advisory and
supporting services with respect to each phase of the process in which such
party may not be actively or primarily involved. No clinical trials involving
the Collaboration Product shall be commenced by or on behalf of either party
without the prior approval of the JDC. Each party shall ensure that its
Development tasks are carried out adhering to the highest ethical and safety
standards.
(c) DEVELOPMENT PLAN AND BUDGET. The Preclinical Development and
Development of the Collaboration Product shall be governed by a specific and
comprehensive development plan, a detailed short-term budget and a preliminary,
estimated long-term budget forecast (the "Development Plan and Budget"). No
later than the date on which an IND (or its foreign equivalent) is filed for
the Collaboration Product, the JDC shall prepare for consideration and approval
by the Executive Committee a Development Plan and Budget for such Collaboration
Product. The Development Plan shall describe fully, to the extent practicable,
the proposed program of development for such Collaboration Product, including
formulation, process development, clinical studies and regulatory plans and
other key elements of obtaining Regulatory Approval in the Co-Promotion
Country. Without limiting the foregoing, the Development Plan and Budget shall,
to the extent practicable, set forth those preclinical and clinical studies
necessary or desirable for the filing of an NDA in the United States for the
Collaboration Product, as determined by the JDC (the "Core U.S. Dossier"). In
addition, the Development Plan shall provide a general overview of relevant
plans and timelines for development of such Collaboration Product outside of
the Co-Promotion Country. The budget for each development program shall include
a detailed short-term budget covering all proposed Development Costs of the
program expected during the subsequent 12 months (the "Short-Term Budget
Period") of the Development process and a long-term budget forecast covering
all proposed Development Costs of the program expected during the Development
process subsequent to such Short-Term Budget Period through obtaining
Regulatory Approval for commercial sale. Both parties recognize that each
Development Plan and Budget are only projections and will be subject to
frequent changes. Each such Development Plan and Budget shall be updated
semi-annually by the JDC and submitted to the Executive Committee for review
and approval not later than ninety (90) days prior to each January 1 and July 1
of each applicable calendar year.
(d) FUNDING OF PRECLINICAL DEVELOPMENT AND DEVELOPMENT. The
percentage of Development Costs of the Core U.S. Dossier which shall be borne
by CoCensys shall equal [*]. The balance of Development Costs shall be borne by
[*]. Warner shall have the right to use data from the Core U.S. Dossier for
Development for
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regulatory filings outside the Co-Promotion Country with no further
compensation to CoCensys. [*] shall bear the cost of those studies within the
scope of Development which are not part of the Core U.S. Dossier and which
are targeted by Warner for obtaining regulatory approval outside the
Co-Promotion Country.
(e) DRUG APPROVAL APPLICATIONS. Consistent with the Development Plan
and Budget and as directed by the Executive Committee, the parties will file
Drug Approval Applications and attempt to obtain Regulatory Approvals in the
Co-Promotion Country. Warner will own all IND's and NDAs for all Collaboration
Compounds, including any supplements thereto. Warner will be responsible for
all regulatory submissions including, without limitation, the assembly of
suitable Drug Approval Applications. The parties will cooperate in the
preparation of each Drug Approval Application and in obtaining Regulatory
Approvals under this Section 5.3(e). Regulatory Approvals for Independent
Products are not subject to this Section 5.3(e).
(f) LINE EXTENSIONS. Warner and CoCensys may each prepare and submit
to the Executive Committee for consideration, plans for development of line
extensions and the conduct of clinical trials covering additional indications
for Collaboration Products for sale in the Co-Promotion Country. Any such line
extensions or additional trials will be subject to the approval and supervision
of the JDC as part of the ongoing Development of such Collaboration Product.
(g) REIMBURSEMENT. Each Party shall bear its own Development Costs
incurred by it, subject to reimbursement as provided herein. Based on the
Development Plan and Budget, on a quarter-by-quarter basis, a party shall
invoice the other party for the other party's allocated percentage of the
Development Costs incurred by the invoicing party and such other party shall
pay such allocated percentage within 30 days of the end of such quarter.
(h) COMPLIANCE. The parties will comply with cGLP, cGCP, and cGMP in
the conduct of the Preclinical Development of any Collaboration Lead Compound
or Development of any Collaboration Product for sale in the Co-Promotion
Country. In addition, the parties agree to conduct such Preclinical Development
and Development in compliance with applicable good laboratory, clinical or
manufacturing practices of non-Co-Promotion Countries, provided, and only to
the extent that, Warner notifies CoCensys of such non-Co-Promotion Country's
practices and such practices are not in conflict with the Co-Promotion
Country's cGLP, cGCP, or cGMP. Where such compliance with such identified
non-Co-Promotion Countries practices results in any material additional
Development Costs, Warner shall promptly reimburse CoCensys in full for such
additional expenditures actually incurred by CoCensys.
(i) TERMINATION OF PARTICIPATION IN COLLABORATIVE DEVELOPMENT. On a
Collaboration Compound-by-Collaboration Compound basis, Warner and CoCensys may
elect (upon [*] prior written notice) to terminate their participation in the
Preclinical Development or Development of any Collaboration Lead Compound or
Collaboration
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Product for which CoCensys has exercised the Re-engagement Option and
thereby terminate its responsibility for bearing further Development Costs
for such Collaboration Compound, as specified herein, in which event the
other party will have the right to proceed independently to develop such
Collaboration Compound as an Independent Product, pursuant to Section 5.3(j).
In the event a party gives notice of termination under this Section 5.3(i),
the terminating party (i) will remain responsible for its share of
Development Costs for such Collaboration Compound until the effective date of
the termination, and (ii) will make its personnel, relevant data, and other
resources available to the other party as necessary to effect an orderly
transition of development responsibilities, with the costs of such personnel,
relevant data, and resources to be borne by the other party after the
effective date of the termination. The parties each recognize and agree that
a party's termination of participation in Development in accordance with this
Section 5.3(i) will not be considered a breach of its obligations under this
Agreement.
(j) INDEPENDENT DEVELOPMENT.
(i) In the event (i) a party, pursuant to Section 5.l(b), (c),
or (d) elects not to participate in and commit resources to conduct Preclinical
Development or Development of a Collaboration Lead Compound or Collaboration
Product or (ii) any party unilaterally terminates its participation in the
collaborative Preclinical Development or Development pursuant to
Section 5.3(i), or (iii) a party terminates its participation in the Research
Programs pursuant to Section 2.4, then the party that made an affirmative
election pursuant to Section 5.1(b), (c), or (d) or the non-terminating party
if it desires to continue Development (in each case, the "Independent Party"),
shall have the right to undertake the continued Preclinical Development and
Development of such Collaboration Lead Compound or Collaboration Product (an
"Independent Lead Compound" or "Independent Product") independently, at its
sole cost, and under its sole direction. No party may utilize the services of
the personnel committed to the Collaboration pursuant to Section 2.2 in
performance of research or development of an Independent Lead Compound or
Independent Product.
(ii) The Independent Party will inform the other party of all
material information in its research and development of each Independent Lead
Compound or Independent Product and will allow such other party to comment on
the direction of such research and development. The Independent Party will
provide the other party a complete and accurate copy of the proposed filing,
together with any additional information that the other party may request
regarding the relevant Independent Lead Compound or Independent Product, at
least 30 days prior to submitting such filing to the FDA or its foreign
equivalent.
(iii) In the event Warner elects to proceed as an
Independent Party, CoCensys shall forfeit its rights to develop such
Collaboration Compound (or Collaboration Product) and co-promote such
Collaboration Product in the Co-Promotion Country, and Warner shall be entitled
to develop and commercialize such Independent
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Product at its sole discretion, alone or with another partner, subject to the
payment to CoCensys of a royalty as set forth in Section 6.7.
(iv) In the event CoCensys elects to proceed as an Independent
Party, Warner shall forfeit its rights to develop such Collaboration Compound
(or Collaboration Product) and market and sell such Collaboration Product
worldwide, subject to Section 5.3(k), and CoCensys shall be entitled to develop
and commercialize such Independent Product worldwide, at its sole discretion,
alone or with another partner, subject to the payment to Warner of a royalty as
set forth in Section 6.7.
(k) WARNER'S RE-ENGAGEMENT OPTION. If CoCensys is the Independent
Party, Warner may elect to resume Preclinical Development and Development of an
Independent Lead Compound or Independent Product and regain its right to
commercialize such Independent Lead Compound or Independent Product if it
notifies CoCensys of such election, in writing, prior to the initiation of
Phase III clinical trials for the registration of such Independent Lead
Compound or Independent Product (the "Warner Re-engagement Notice"). In such
event, such Independent Lead Compound or Independent Product shall immediately
become a Collaboration Lead Compound or Collaboration Product, as the case may
be, for all purposes under this Agreement and Warner shall regain the right to
co-promote such Independent Product in the Co-Promotion Country and to market
and sell the Independent Product exclusively in all countries other than the
Co-Promotion Country. Promptly after Warner makes such election, Warner shall
pay CoCensys the percentage calculated according to the following table of the
costs of research and development of the Independent Lead Compound or
Independent Product incurred by CoCensys subsequent to the date upon which it
commenced independent development or research and prior to the date of the
Warner Re-engagement Notice, which payment shall be made in four equal
quarterly installments beginning on the first day of the calendar quarter
following the date of the election of the non-Independent Party:
Date of Exercise of 100% less the Co-Development
Re-engagement Option Percentage, multiplied by:
-------------------- ------------------------------
[*] [*]
[*] [*]
[*] [*]
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SECTION 6. LICENSES AND ROYALTIES
6.1. GRANT BY COCENSYS. Subject to the terms and conditions of this
Agreement, CoCensys hereby grants and agrees to grant to Warner an exclusive,
worldwide license under the Patent Rights, Background, Technology and
Collaboration Technology owned or Controlled by CoCensys to the extent
necessary to develop, make, have made, use, import, offer for sale, and sell
(with the right to sublicense) any Collaboration Product. Such licenses with
respect to a Collaboration Product are exclusive even as to CoCensys, except
that CoCensys shall retain the right to conduct Preclinical Development and
Development as set forth in Section 5, and to promote in the Co-Promotion
Country as set forth in Section 7 to the limited extent necessary for CoCensys
to exercise its rights thereunder. Warner may not sublicense any of its rights
granted under this Section 6.1 to any Third Party without the prior written
consent of CoCensys, not to be unreasonably withheld.
6.2. GRANT BY WARNER. Subject to the terms and conditions of this
Agreement, Warner hereby grants and agrees to grant to CoCensys an exclusive
(except as to Warner) license under the Patent Rights, Background Technology
and Collaboration Technology owned or Controlled by Warner to the extent
necessary for CoCensys to (a) participate in Preclinical Development and
Development as set forth in Section 5, and (b) use and promote any
Collaboration Product in the Co-Promotion Country pursuant to the terms of
Section 7, once it has exercised the Re-engagement Option with respect to such
Collaboration Product. CoCensys may not sublicense any of its rights granted
under this Section 6.2 without the prior written consent of Warner, not to be
unreasonably withheld.
6.3. INDEPENDENT PRODUCTS. Each of Warner and CoCensys hereby grants and
agrees to grant to the other an exclusive, worldwide license under the Patent
Rights, Background Technology and Collaboration Technology owned or Controlled
by the granting party to the extent necessary to develop Independent Lead
Compounds and make, have made, use, import, offer for sale and sell (with the
right to sublicense) any Independent Product in the event the receiving party
is designated the Independent Party with respect to such Independent Product
(or Independent Lead Compound) pursuant to Section 5.3(j). Such licenses are
exclusive even as to the granting party. Any such license with respect to an
Independent Product or Independent Lead Compound shall terminate in the event
such Independent Product or Independent Lead Compound becomes a Collaboration
Lead Compound or Collaboration Product pursuant to the terms of Section 5.3(k).
6.4. THIRD PARTY TECHNOLOGY.
(a) OREGON LICENSE.
(i) Warner acknowledges and understands that the licenses
granted by CoCensys under Sections 6.1 and 6.3 contemplate sublicenses of
technology licensed from Oregon to Acea pursuant to the Oregon License
Agreement and that these sublicenses to Warner are subject to the terms and
conditions of the Oregon License
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Agreement, including certain rights retained by Oregon and the United States
government thereunder. Warner further acknowledges that in no event shall the
license grants to Warner under this Agreement with respect to technology
licensed to Acea pursuant to the Oregon License Agreement be construed as
conferring upon Warner any greater rights than are conferred upon Acea or
CoCensys by Oregon under the Oregon License Agreement. CoCensys shall have
the right to negotiate or amend the terms of the Oregon License Agreement,
without involvement of Warner, provided that (i) the benefits to Warner under
any such renegotiated or amended license agreement shall not be less than
those contained in the Oregon License Agreement in effect as of the Effective
Date and (ii) CoCensys provides a draft copy of such renegotiated or amended
license agreement (which draft, in CoCensys' sole discretion, may have any or
all economic terms redacted) to Warner no later than 45 days prior to
execution of such agreement.
(ii) As between Warner and CoCensys, [*] of any royalties or
other amounts paid to or due and owing Oregon or UC by CoCensys, as of or after
the Effective Date, pursuant to the Oregon/UC Agreements shall be borne by [*].
(b) COVENANTS OF COCENSYS REGARDING OREGON/UC AGREEMENTS.
(i) CoCensys hereby covenants and agrees with Warner as
follows: (1) to perform its obligations, and use diligent efforts to cause
Oregon or UC, as the case may be, to perform its obligations, under the
Oregon/UC Agreements; (2) to notify Warner promptly in writing of any breach or
notice given or received by CoCensys, Oregon or UC (to the extent CoCensys has
knowledge thereof) under the Oregon/UC Agreements; (3) not to make any
decisions, agreements or elections, or refuse or not make any decisions,
agreements or elections, or take or refuse or not take any other action under
the Oregon/UC Agreements or otherwise which might adversely affect CoCensys'
rights under the Oregon/UC Agreements or Warner's rights or CoCensys'
obligations under this Agreement; and (4) not to take or allow to be taken any
action which could result in a breach of the Oregon/UC Agreements such that
such breach adversely affects Warner's rights under this Agreement.
(ii) In the event Warner incurs any damages, costs or other
expenses as a result of a breach of any of the covenants set forth in
Section 6.4(b)(i), CoCensys shall indemnify and hold harmless Warner and its
Affiliates for any such damages, costs or expenses incurred. This obligation
shall survive the expiration or termination of this Agreement.
(c) OTHER THIRD PARTY TECHNOLOGY. During the term of this Agreement,
if either party becomes aware of Third Party rights that may be desirable to
license in order to manufacture, market, import, use or sell a Collaboration
Product (other than rights granted under the Oregon/UC Agreements), it shall
notify the other party and the Executive Committee will determine whether a
license should be sought under such rights. If CoCensys has exercised the Re-
engagement Option, and in the event that such acquired rights result in
payments to a Third Party, [*] of such payments attributable to the
manufacture, marketing, importation, use or sale of the applicable
Collaboration Product in the Co-Promotion Country shall be included as a
Co-Promotion Expense of the party making such payment in that country. In the
event that such acquired rights result in payments to a Third Party, [*] of any
such payments attributable to
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the manufacture, marketing, importation, use or sale of such Collaboration
Product in the non-Co-Promotion Country shall be deducted from royalty
payments due to CoCensys pursuant to this Agreement with respect to such
Collaboration Product in such country, provided, however, in no event shall
royalties due CoCensys pursuant to this Agreement with respect to sales of
such Collaboration Product in any non-Co-Promotion country be reduced by more
than [*] of Net Sales of such Collaboration Product in such country.
6.5. USE OUTSIDE THE FIELD. Each party hereby covenants to the other that
it will not practice the Patent Rights, Background Technology, or Collaboration
Technology of the other party, except as explicitly permitted in this
Agreement.
6.6. ROYALTIES PAYABLE BY WARNER. Except as set forth in Section 2.4,
Warner will pay CoCensys a royalty equal to [*] of Warner's, its Affiliates' or
sublicensees' Net Sales of Collaboration Products in the Non-Co-Promotion
Countries, and a royalty calculated in accordance with the following table for
Warner's, its Affiliates' or sublicensees' Net Sales of all Collaboration
Products in the Co-Promotion Country for Collaboration Products for which
CoCensys has not exercised the Re-engagement Option.
The primary active ingredient
of the applicable
Collaboration Product Royalty Percentage
---------------------------- ---------------------
[*] [*]
[*] [*]
[*] [*] of annual Net Sales less
than or equal to [*]
[*] of annual Net Sales
greater than [*] but less
than [*]
[*] of annual Net Sales
greater than [*] but less
than or equal to [*]
[*] of annual Net Sales in
excess of [*]
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[*] shall be owed on Net Sales in the Co-Promotion Country on any Collaboration
Products for which CoCensys has exercised the Re-engagement Option and not
elected to terminate its Co-Promotion Rights under Section 7.3. Such royalties
shall be payable until the expiration of the last to expire Patent Right owned
or Controlled by either CoCensys or Warner and necessary to make, use, import
for sale or sell such Collaboration Product in such country. In addition, the
percentage of royalty payable in any calendar quarter with respect to Net Sales
of each Collaboration Product shall be reduced by [*] of the number of
percentage points (or fraction thereof) by which the Cost of Goods for such
Collaboration Product [*] of Net Sales of such Collaboration Product in such
quarter, provided that the royalty payable by Warner shall not be reduced below
[*].
6.7. ROYALTIES PAYABLE BY THE INDEPENDENT PARTY. The Independent Party
will pay the other party a royalty equal to [*] of the Independent Party's, its
Affiliates', or sublicensees' Net Sales of Independent Products. Such royalties
shall be payable in respect of each country in which sales occur until the
expiration of the last to expire Patent Right owned or Controlled by either
CoCensys or Warner and necessary to make, use, import for sale or sell such
Product in such country.
6.8. CURRENCY OF PAYMENT. All payments to be made under this Agreement
shall be made in United States dollars in the United States to a bank account
designated by the party to be paid. Royalties earned shall first be determined
in the currency of the country in which they are earned and then converted to
its equivalent in United States currency. The buying rates of exchange for the
currencies involved into the currency of the United States quoted by Citibank
(or its successor in interest) in New York, New York, at the close of business
on the last business day of the quarterly period in which the royalties were
earned shall be used to determine any such conversion.
6.9. PAYMENT AND REPORTING. The royalties due under Sections 6.6 or 6.7
shall be paid quarterly, within 3 months after the close of each calendar
quarter, or earlier if practical (i.e., on or before the last day of each of
the months of June, September, December, and March), immediately following each
quarterly period in which such royalties are earned. With each such quarterly
payment, the payor shall furnish the payee a royalty statement setting forth on
a country-by-country basis the total revenues and the number of units of each
royalty-bearing Product sold hereunder for the quarterly period for which the
royalties are due, and the deductions applied in arriving at Net Sales.
6.10. TAXES WITHHELD. Any income or other tax that one party
hereunder, its Affiliates or sublicensees is required to withhold (the
"Withholding Party") and pay on behalf of the other party hereunder (the
"Withheld Party") with respect to the royalties payable under this Agreement
shall be deducted from and offset against said royalties prior to remittance to
the Withheld Party; provided, however, that in regard to any tax so deducted,
the Withholding Party shall give or cause to be given to the Withheld Party
such assistance as may reasonably be necessary to enable the Withheld Party to
claim
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exemption therefrom or credit therefor, and in each case shall furnish the
Withheld Party proper evidence of the taxes paid on its behalf.
6.11. COMPUTATION OF ROYALTIES. All sales of Products between the
selling party and any of its Affiliates and sublicensees shall be disregarded
for purposes of computing Net Sales and royalties under this Section 6, but in
such instances royalties shall be payable only upon sales to unlicensed Third
Parties. Nothing herein contained shall obligate either party to pay the other
party more than one royalty on any unit of a Product.
6.12. LICENSES TO AFFILIATES AND SUBLICENSEES. Each party shall, at
the other party's reasonable request, enter into license and/or royalty
agreements directly with the other party's Affiliates and permitted
sublicensees, in lieu of the license grant to or royalty obligation of the
requesting party; provided such agreements would not decrease the amount of
royalties which would be owed hereunder. Such agreements shall contain the same
language as contained herein with appropriate changes in parties and territory,
and this Agreement shall be amended as appropriate. No such license and/or
royalty agreement will relieve Warner or CoCensys, as the case may be, of its
obligations hereunder, and such party will guarantee the obligations of its
Affiliate or sublicensee in any such agreement. Royalties received directly
from one party's Affiliates and sublicensees shall be credited towards such
party's royalty obligations under Section 6.6 or 6.7 hereof, as applicable.
6.13. RESTRICTIONS ON PAYMENTS. The obligation to pay royalties under
this Agreement shall be waived and excused to the extent that statutes, laws,
codes or government regulations in a particular country prevent such royalty
payments by the seller of Products; provided, however, that if legally
permissible, the seller of Products shall pay the royalties owed to the other
party hereto by depositing such amounts in a bank account in such country that
has been designated by the party owed such royalties.
6.14. RECORDS. Warner and CoCensys each shall keep accurate books and
accounts of record in connection with the manufacture, use and/or sale by or
for it of the Collaboration Products and Independent Products in sufficient
detail to permit accurate determination of all figures necessary for
verification of royalties, profits, milestone payments and other compensation
required to be paid hereunder. Warner and CoCensys shall maintain such records
for a period of 3 years after the end of the year in which they were generated.
At such party's expense, a party, through a certified public accountant
reasonably acceptable to the other party, shall have the right to access the
books and records of the other party for the sole purpose of verifying such
statements. Such access shall be conducted after reasonable prior written
notice to the party during ordinary business hours and shall not be more
frequent than once during each calendar year.
SECTION 7. CO-PROMOTION OF COLLABORATION PRODUCTS
7.1. APPLICABILITY. The terms of this Section 7 shall only apply to
Collaboration Products for which CoCensys has exercised the Re-engagement
Option in
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accordance with Section 5 and for which CoCensys has not subsequently
terminated its participation in the development of such Collaboration Product.
7.2. CO-PROMOTION RIGHTS. Subject to Section 7.4, CoCensys and Warner
shall each work diligently and use the same effort such party puts forth to
promote other products of similar commercial value, to co-promote each
Collaboration Product in the Co-Promotion Country during the Term of
Co-Promotion pursuant to the terms and conditions hereof. The Marketing
Committee shall oversee and implement all such commercialization activities,
based on the principle of maximizing profits from sales of Collaboration
Products in the Co-Promotion Country during the Term of Co-Promotion.
7.3. ELECTION OR REVOCATION OF CO-PROMOTION RIGHT. CoCensys may terminate
early the Term of Co-Promotion with respect to a Collaboration Product being
co-promoted by the parties in the Co-Promotion Country at any time following
[*] prior written notice to Warner, in which case Warner shall have the
exclusive right to promote, alone or with another party, in the Co-Promotion
Country, and CoCensys shall receive a royalty of (a) [*] on Net Sales of such
Collaboration Product in the Co-Promotion provided that CoCensys has provided
its Required Sales Effort for no less that [*] consecutive months following the
initial sale of the applicable Collaboration Product or (b) [*] on Net Sales of
Collaboration Products where CoCensys has failed to so provide its Required
Sales Effort. Warner may terminate early the Term of Co-Promotion with respect
to a Collaboration Product being co-promoted by the parties in the Co-Promotion
Country at any time following [*] months prior written notice to CoCensys, in
which case, should CoCensys desire to continue promotion of such Collaboration
Product, it shall be treated as an Independent Product being promoted by
CoCensys, which CoCensys may promote alone or with another party, in the
Co-Promotion Country, effective as of the date of termination, and Warner shall
receive a royalty on Net Sales in the Co-Promotion Country pursuant to
Section 6.7, except that such royalty shall equal [*] instead of [*] of Net
Sales. In the event (a) of early termination of the Term of Co-Promotion by
Warner in the Co-Promotion Country, or (b) Warner otherwise terminates the
Development or promotion in the Co-Promotion Country of a Collaboration Product
for which CoCensys has not exercised the Re-engagement Option, Warner shall
(i) assign to CoCensys all NDAs (or foreign equivalents) for such Collaboration
Product in such country, (ii) transfer to CoCensys any other relevant
information which will enable CoCensys to promote such product as an
Independent Product in such country, and (iii) continue to supply Finished
Product to CoCensys pursuant to Section 9.7. In the event of early termination
of the Term of Co-Promotion by CoCensys in the Co-Promotion Country, CoCensys
shall transfer to Warner any other relevant information which will enable
Warner to promote such product in such country. The Term of Co-Promotion with
respect to any Collaboration Product in the Co-Promotion Country may not be
reinstated after delivery of a notice of early termination thereof.
7.4. REQUIRED SALES EFFORT. Warner shall supply a percentage equal to [*]
and CoCensys shall supply a percentage equal to [*] of the total promotional
and marketing
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effort (including details, if determined to be an appropriate sales activity)
for each Collaboration Product being co-promoted by the parties in the
Co-Promotion Country, as determined by the Marketing Committee. Each party's
required promotional and marketing effort is hereinafter referred to as its
"Required Sales Effort" and is subject to adjustment as set forth in this
Section 7.4. The parties will mutually determine appropriate written
standards for measuring and accounting procedures to confirm and document
each party's performance of its Required Sales Effort, prior to the
commencement of the Term of Co-Promotion for any Collaboration Product. In
the event either party fails to meet its Required Sales Effort commitment in
any calendar year with respect to a Collaboration Product in a Co-Promotion
Country, the parties will meet to discuss the circumstances giving rise to
such shortfall. If such shortfall was not caused by an event of force
majeure, then the failing party's Share of Profit and Share of Loss (as
defined under Section 7.15) shall be reduced for that calendar year and for
all subsequent calendar quarters during the Term of Co-Promotion to [*],
unless further readjusted in subsequent calendar years due to a failure of
the other party to meet its Required Sales Effort. Notwithstanding any other
provisions of this Agreement, if a party's Share of Profit and Share of Loss
falls below [*] pursuant to this Section 7.4, the failing party shall instead
receive a royalty equal to [*] of the other party's (or the other party's
Affiliates' or sublicensees') Net Sales of Collaboration Products. Such
royalties shall be payable until the expiration of the last to expire Patent
Right owned or Controlled by either CoCensys or Warner and necessary to make,
use or sell such Collaboration Product in such country. Nothing contained in
this Section 7.4 shall be deemed to preclude either party from revoking its
right to co-promote, pursuant to Section 7.3, at any time. The parties have
provided in this Section 7.4 for the exclusive mechanisms to compensate for
failure to provide the Required Sales Effort and any such failure shall not
be deemed a breach of this Agreement.
7.5. MARKETING PLAN AND BUDGET. The co-promotion of each Collaboration
Product will be governed by a marketing plan and budget (the "Marketing Plan
and Budget"). Warner will be responsible for preparing and approving the
Marketing Plan and Budget. The Marketing Plan and Budget will describe fully,
to the extent practicable, the proposed plan for commercialization of the
Collaboration Product in the Co-Promotion Country, including overall marketing
strategy, anticipated marketing, sales and promotion efforts by each party,
market and sales forecasts, pricing analysis and estimated launch date, as well
as advertising and other promotional materials to be used in the co-promotion.
The Marketing Plan will be prepared taking into consideration factors such as
market conditions, regulatory factors and competition. The Budget will include
all projected Co-Promotion Expenses for the Collaboration Product. The initial
Marketing Plan and Budget shall be prepared and approved by Warner, after
discussions with CoCensys, no later than 3 months after the first filing of an
NDA (or its foreign equivalent) for a Collaboration Product in the Co-Promotion
Country.
7.6. PROMOTIONAL AND ADVERTISING MATERIALS. The parties shall disseminate
in the Co-Promotion Country only those promotional and advertising materials
which have been provided or approved for use by Warner, the cost of which shall
be a Co-Promotion
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Expense of the party incurring such cost. All such materials shall be
consistent with the relevant Marketing Plan and Budget approved by Warner and
neither party shall make any claims or representations in respect of the
applicable Collaboration Product that have not been approved by Warner. In
all written or visual materials related to Collaboration Products co-promoted
in the Co-Promotion Country which identify either of the parties, the parties
will be presented and described to the medical communities (including, for
example, the physician, pharmacy, governmental, reimbursement, and hospital
sectors) as joining in the promotion of the Collaboration Product in such
country. All such written and visual materials and all documentary
information, promotional material, and oral presentations (where practical)
regarding the promoting of the Collaboration Product being co-promoted in the
Co-Promotion Country will state this arrangement and will display the Warner
and CoCensys names and logos with equal prominence, as permitted by
applicable law.
7.7. PRICING. The parties will discuss, and the Marketing Plan will
include, the general operating guidelines and strategies for the pricing and
discounting of Collaboration Products co-promoted in the Co-Promotion Country
provided, however that Warner shall have absolute discretion as to pricing and
discounting in countries in which the Collaboration Product is not co-promoted.
If either party is selling, marketing or promoting a competing product in the
Co-Promotion Country at such time, the scope of such discussions shall be
adjusted accordingly.
7.8. NO DELEGATION. Each of the parties may use only its own employees or
the employees of one or more of its Affiliates in the course of exercising its
co-promotion rights under this Agreement.
7.9. RETURNS. Warner shall be responsible for handling all returns
relating to Collaboration Products. Any Collaboration Product returned to
CoCensys shall be shipped by CoCensys to the address designated by Warner with
shipping costs authorized by Warner to be paid by Warner.
7.10. ORDERS. All customer orders for Collaboration Products shall be
received and executed by Warner. CoCensys shall transmit any such orders that
it receives to Warner no later than the following business day.
7.11. SAMPLES. accurate records as to the distribution of samples of
Collaboration Products and comply with all applicable laws, rules and
regulations dealing with the distribution of samples.
7.12. COMPLETION OF SALES. All sales of Collaboration Products will be
completed, distributed, accounted for, billed and booked by Warner.
7.13. TRAINING. Consistent with the marketing plans established by
Warner, but not less than 90 days prior to the commencement of the Term of
Co-Promotion for each Collaboration Product, Warner shall provide reasonable
access to its sales training staff and facilities for appropriate, initial
training of the CoCensys sales force to the extent
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CoCensys lacks such facilities and training staff. Such training shall be at
CoCensys' expense and shall be a Co-Promotion Expense of CoCensys. Consistent
with the marketing plans established by Warner, all other training costs
shall be borne by the party incurring such cost and shall be a Co-Promotion
Expense of such party.
7.14. EXCHANGE OF MARKETING INFORMATION. From time-to-time Warner will
develop call lists, schedules, and other appropriate information for the
purpose of determining the physicians and other persons involved in the drug
purchase decision-making process to whom CoCensys and Warner, respectively, may
detail each Collaboration Product. The parties agree to cooperate in finding an
inexpensive and expeditious way to provide a call list and other information
indicating the identity of those physicians and other persons involved in the
decision-making process regarding the purchase of pharmaceuticals. Any expenses
incurred in connection therewith shall be Co-Promotion Expenses of the party
incurring such expense. If either party is selling, marketing, or promoting a
competing product in the Co-Promotion Country at such time, the scope of such
activities shall be adjusted accordingly.
7.15 DETERMINATION AND ALLOCATION OF TOTAL PROFIT.
(a) If Total Profit for a Collaboration Product is positive, Net
Sales in the Co-Promotion Country shall be allocated first to reimburse each
party for its Co-Promotion Expenses for such Collaboration Product and then to
pay each party its Share of Profit times such positive Total Profit. CoCensys'
"Share of Profit" shall equal [*] and Warner's "Share of Profit" shall equal
[*] unless adjusted pursuant to Section 7.4.
(b) If Total Profit for a Collaboration Product is negative, Net
Sales shall be allocated to partially reimburse the parties so that (w) the
proportion of each party's share of the total unreimbursed Co-Promotion
Expenses to the total amount of unreimbursed Co-Promotion Expenses for both
parties is equal to (x) [*]. If (y) the Co-Promotion Expenses actually incurred
by a party are less than (z) such party's Share of Loss times such negative
Total Profit, such party shall pay the other party the difference between (z)
and (y) at the time set forth in Section 7.16. Each party's "Share of Loss"
shall equal its Share of Profit, unless adjusted pursuant to Section 7.4.
7.16. PAYMENT AND REPORTING. Within [*] after the close of each
calendar quarter during the Term of Co-Promotion (i.e., on or before the last
day of each of the [*]), or earlier if possible, CoCensys shall furnish to
Warner a statement containing its Co-Promotion Expenses incurred in such
calendar quarter for the Co-Promotion Country. Within [*] after the close of
each calendar quarter during the Term of Co-Promotion (i.e., on or before the
last day of [*]), or earlier if possible, Warner shall furnish to CoCensys a
statement (the "P&L Statements") setting forth for each Co-Promotion Country,
Net Sales of each Collaboration Product and all data on which the determination
of Total Profit was calculated. Warner will submit any amount due to CoCensys
pursuant to Section 7.15 (a) or 7.15 (b), as the case may be, with the P&L
Statement. If CoCensys owes an amount to Warner pursuant to Section 7.15 (b),
it shall make such payment
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within 30 days of receipt of the P&L Statement. If the Term of Co-Promotion
ends during an accounting quarter, the amounts due hereunder shall be
calculated for such shortened calendar quarter.
SECTION 8. TRADEMARKS.
8.1 TRADEMARKS IN THE CO-PROMOTION COUNTRY. The following provisions
shall apply to each Collaboration Product for which CoCensys has exercised the
Re-engagement Option pursuant to Section 5.3.
(a) The parties, through the Marketing Committee, shall mutually
agree upon the trademark or trademarks to be used for each Collaboration
Product in the Co-Promotion Country (each a "Trademark") and shall take into
consideration the marketing efforts of Warner with respect to such
Collaboration Product in countries other than the Co-Promotion Country. Warner
and CoCensys shall be joint owners of each Trademark in the Co-Promotion
Country. In the Co-Promotion Country, each Trademark shall be used only in
connection with the applicable Collaboration Product and shall not be used by
either party on or in connection with any other product. The Marketing
Committee shall assign responsibility to one or both parties for searching,
clearing, filing, prosecuting, maintaining and all reasonable steps necessary
in defending each Trademark. All costs associated with the aforesaid actions
and all other necessary actions in connection with each Trademark, including,
without limitation, obtaining, owning, maintaining, defending and enforcing
such Trademark shall be deemed Co-Promotion Expenses of the party incurring
such costs.
(b) In the event any jurisdiction in the Co-Promotion Country does
not recognize joint ownership of a trademark by separate corporate entities,
Warner shall be the owner of each Trademark in such jurisdiction and CoCensys
shall be the exclusive (except as to Warner) licensee of such Trademark in such
jurisdiction, without payment of any additional consideration to Warner.
(c) In the event there is a challenge to the validity of any
Trademark, or enforceability against a third party infringer is at issue due to
joint ownership of any Trademark (even if a Certificate of Registration has
issued for such Trademark in accordance with the terms of this Agreement), the
owner of such Trademark shall be deemed to be either Warner or CoCensys, as
determined by the Marketing Committee, and nothing in the terms of this
Agreement shall be deemed to be a desire by either party to nullify or
disqualify the validity of such Trademark.
(d) The Marketing Committee shall approve all trade dress, logos,
slogans, designs and copyrights used on and in connection with any
Collaboration Product in the Co-Promotion Country. Warner and CoCensys shall
be joint owners of the trade dress, logos, slogans, designs and copyrights
specifically developed for and used on and in connection with any Collaboration
Product in the Co-Promotion Countries (the "Collaboration Product Logos and
Copy"). Warner and CoCensys shall each retain sole
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and exclusive ownership of their own respective and independently developed
and pre-existing names, trade dress, logos, slogans, designs and copyrights
regardless of whether such names, trade dress, logos, slogans, designs and
copyrights are used on or in connection with any Collaboration Product.
(e) Neither Warner nor CoCensys shall have the right to assign,
transfer, license, sublicense, or otherwise encumber any Trademark or
Collaboration Product Logos and Copy without the prior written consent of the
other party. Neither party shall use, file for or obtain, in the Co-Promotion
Country, a trademark registration for any trademark which is confusingly
similar to any Trademark used or to be used in the Co-Promotion Country. At the
expiration or termination of the Term of Co-Promotion in a Co-Promotion Country
for any Collaboration Product, only one party shall be permitted to continue to
use any Trademarks and Collaboration Product Logos and Copy used in the
marketing and sale of such Collaboration Product. The party desiring to
continue using such Trademarks and Collaboration Product Logos and Copy at the
expiration or termination of the Term of Co-Promotion for any Collaboration
Product shall compensate the other party, at a royalty rate equal to [*] of
such party's, its Affiliates' or sublicensees' Net Sales of such Collaboration
Product, for so long as such Collaboration Product is sold under such
Trademarks or Collaboration Product Logos and Copy. In the event both parties
desire to continue using such Trademarks and Collaboration Product Logos and
Copy at the expiration or termination of the Term of Co-Promotion, the party
willing to pay to the other party [*] shall be the only party permitted to
continue using such Trademarks and Collaboration Product Logos and Copy. The
party being compensated shall assign all of its right, title and interest in
such Trademarks and Collaboration Product Logos and Copy in the Co-Promotion
Country to the other party upon receipt of such compensation. No later than [*]
after receipt of such compensation, all rights to use such Trademarks and
Collaboration Product Logos and Copy by the compensated party shall cease.
(f) Each party shall be responsible for maintaining the quality
control in connection with its own manufacture of Bulk Products and Finished
Products and shall maintain such quality control standards as are established
by the Marketing Committee. To the extent Finished Products or Bulk Products
are manufactured by a Third Party, the party or parties contracting with such
Third Party shall provide in such contract that such Third Party will be held
to the quality control standards established by the Marketing Committee. During
the Term of Co-Promotion, the Marketing Committee shall approve all printed
materials bearing each Trademark, including but not limited to business
materials, printed materials, advertising materials, promotional materials, and
any such other materials that may reference such Trademark.
(g) In the event that Warner or CoCensys is charged with, or sued
for, the violation of any third party trademark, or an administrative action is
brought against either party in connection with any Trademark in any
Co-Promotion Country, each party shall promptly notify the other and cooperate
in the defense of any such charge, suit, or administrative proceeding as
applicable. The Marketing Committee shall be responsible
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for the management of such action. All costs and expenses of such action
(including damage awards and settlement awards) shall be [*].
(h) In the event CoCensys or Warner becomes aware of any actual or
threatened violation of any Trademark in the Co-Promotion Country, that party
shall promptly notify the other and the Marketing Committee shall promptly
discuss how to proceed in connection with such actual or threatened violation.
Any expenses incurred in connection with a legal action or administrative
action with respect to such actual or threatened violation shall be [*] and any
damages awarded to either Warner or CoCensys shall be paid [*] and be deemed to
be [*].
8.2. TRADEMARKS IN COUNTRY OTHER THAN CO-PROMOTION COUNTRY. Warner shall
select and own the trademark for marketing a Collaboration Product in countries
other than those in which the parties are co-promoting, taking into
consideration the Trademark selected for those countries in which the parties
are co-promoting. All expenses for (i) registration of such trademark and
(ii) bringing, maintaining, and prosecuting any action to protect or defend
such trademark in such countries shall be borne by Warner.
SECTION 9. SUPPLY OF PRODUCT
The following provisions shall only apply to Collaboration Products for
which CoCensys has exercised the Re-engagement Option pursuant to Section 5.3.
9.1. SUPPLY OF PRODUCT BY WARNER.
(a) Subject to Section 9.2, Warner will manufacture or have
manufactured the parties' requirements for clinical and commercial supplies of
each Collaboration Product (Bulk Product and Finished Product). In fulfilling
its manufacturing obligations hereunder, Warner will use at least the same
level of effort that it employs for its other products of similar scientific
and commercial promise.
(b) Warner shall be responsible for establishing, subject to
approval by the Executive Committee, the specifications, including any
necessary documentation, certificates of analysis and test results, for the
relevant Collaboration Product to be manufactured under this Section 9. Warner
will promptly provide CoCensys with copies of all such specifications and other
information and documentation if CoCensys has exercised its Re-engagement
Option. In addition, Warner will provide CoCensys with notice of, and results
and data from, all FDA audits relating to supply of Collaboration Products.
(c) Where CoCensys takes delivery of Finished Product, CoCensys
shall have the right to conduct quality assurance testing of Finished Product
which Warner manufactures or has manufactured. The cost of such testing shall
be a Development Cost or a Co-Promotion Expense, as the case may be.
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(d) Warner's Cost of Goods (including qualification batches for FDA
approval) for Collaboration Products actually used (and not sold) for all
studies in the Core U.S. Dossier shall be included in Development Costs.
9.2. TERMS OF MANUFACTURE AND SUPPLY.
(a) The Executive Committee shall establish procedures acceptable to
both parties regarding forecasts of requirements of the Collaboration Products.
(b) At all times during the Term of Co-Promotion, Warner shall
maintain reasonable commercial inventories of Collaboration Products necessary
to meet commercial supply requirements as determined by the Marketing
Committee.
(c) Warner shall be entitled to recover as a Co-Promotion Expense in
the Co-Promotion Country, its Cost of Goods for Collaboration Products which
the parties are co-promoting pursuant to Section 7, sold in the Co-Promotion
Country which are (i) manufactured by it or (ii) purchased from a Third Party
source. Warner shall, at the request and expense of CoCensys, permit an
independent accountant to whom Warner has no reasonable objection, to have
access to and to examine Warner's written records concerning its Cost of Goods,
during normal business hours, but not more than once in any 12-month period, to
verify the Cost of Goods. CoCensys shall keep in strict confidence all
information learned in the course of such audit.
9.3. SUPPLY OBLIGATION UPON REVOCATION OF CO-PROMOTION RIGHT. If Warner
terminates early the Term of Co-Promotion with respect to a Collaboration
Product pursuant to Section 7.2 and CoCensys desires to continue promotion of
such product as an Independent Product, and if Warner is supplying Finished
Products, Warner shall continue to supply Finished Product to CoCensys until
the earlier of (a) [*] following the end of the Term of Co-Promotion or (b) the
date CoCensys obtains an alternative source for such Finished Product, with
such Finished Product being supplied by Warner at a price and subject to
additional terms and conditions to be negotiated between the parties.
SECTION 10. REGULATORY MATTERS
The following provisions shall only apply to Collaboration Products for
which CoCensys has exercised the Re-engagement Option pursuant to Section 5.3.
10.1. SIDE EFFECTS AND ADVERSE EVENTS. Prior to and during the Term of
Co-Promotion of a Collaboration Product which the parties are co-promoting
pursuant to Section 7, each party shall promptly advise the other by telefax or
overnight delivery service of any unexpected side effect, adverse reaction, or
injury which has been brought to that party's attention at any place and which
is alleged to have been caused by such Collaboration Product. The party which
has filed the Drug Approval Application in the Co-Promotion Country or, if no
Drug Approval Application has been filed, the party which has filed the IND in
the Co-Promotion Country shall have all rights and
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responsibilities to report such side effect, adverse reaction or injury to
the appropriate regulatory authorities as required by applicable law. In
non-Co-Promotion Countries, Warner shall have all rights and responsibilities
to report such side effect, adverse reaction or injury to the appropriate
regulatory authorities as required by applicable law.
10.2. COMMUNICATION WITH REGULATORY AGENCIES. Upon being contacted by
the FDA in the Co-Promotion Country prior to or during the Term of Co-Promotion
for any regulatory purpose pertaining to this Agreement or to a Collaboration
Product which the parties are co-promoting pursuant to Section 7, CoCensys and
Warner shall promptly, but always within 2 business days, notify and consult
with one another and the party which has filed the Drug Approval Application in
the Co-Promotion Country or, if no Drug Approval Application has been filed,
the party which has filed the IND shall provide an appropriate response. Upon
being contacted by any drug regulatory agency in any non-Co-Promotion Country
prior to or during the Term of Co-Promotion for any regulatory purpose which is
relevant to the development or commercialization of such Collaboration Product,
Warner shall promptly, but always within 2 business days, notify CoCensys of
the content of such contact. In non-Co-Promotion Countries, Warner shall have
the sole right and responsibility to respond to any regulatory agency with
respect to any Collaboration Product.
10.3. PRODUCT RECALL. In the event that Warner or CoCensys determines
that an event, incident or circumstances has occurred which may result in the
need for a recall or other removal of any Collaboration Product which the
parties are co-promoting pursuant to Section 7 or any lot or lots thereof from
the market in a Co-Promotion Country, it shall advise and consult with the
other party with respect thereto. The holder of the NDA (or foreign equivalent)
shall, in its sole discretion, have the right to order a recall or other
removal after such consultations and the other party shall co-operate with such
recall. [*]. Warner shall make all decisions with respect to recall of a
Collaboration Product which the parties are co-promoting pursuant to Section 7
in a non-Co-Promotion Country, and Warner alone shall bear all costs associated
therewith.
SECTION 11. MILESTONES; EQUITY INVESTMENT
11.1. MILESTONES.
(a) Warner shall pay CoCensys the following amounts with respect to
each Collaboration Product to achieve each stated milestone (whether or not
CoCensys has exercised its Re-engagement Option):
1. [*] .................................... [*]
2. [*] .................................... [*]
3. [*] .................................... [*]
4. [*] .................................... [*]
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5. [*] .................................... [*]
6. [*] .................................... [*]
7. [*] .................................... [*]
8. [*] .................................... [*]
9. [*] .................................... [*]
10. [*] .................................... [*]
11. [*] .................................... [*]
12. [*] .................................... [*]
13. [*] .................................... [*]
14. [*] .................................... [*]
(b) CoCensys acknowledges and agrees that [*] of the payment under
milestone 2 and [*] of the payment under milestone 3 above shall be treated as
prepaid royalties of Warner owed under Section 6.6. Warner may reduce each
royalty payment due under Section 6.6 by up to [*] until the aggregate of all
such reductions equals the total amount of prepaid royalties.
11.2. ACQUISITION OF COCENSYS COMMON STOCK. Simultaneously with the
execution of the Amended and Restated Research, Development and Marketing
Collaboration Agreement, the parties shall enter into a certain Stock Purchase
Agreement pursuant to which Warner shall pay to CoCensys a total amount of
$7,000,000 in consideration for shares of CoCensys Convertible Preferred Stock.
Such purchase of Convertible Preferred Stock shall be divided into a payment
of $1,000,000 upon execution of the Stock Purchase Agreement and $6,000,000 on
January 9, 1998.
SECTION 12. CONFIDENTIALITY
12.1. CONFIDENTIALITY.
(a) Except as specifically permitted hereunder, each party hereby
agrees to hold in confidence and not use on behalf of itself or others all
Background Technology, and all other data, samples, technical and economic
information (including the economic terms hereof), commercialization, clinical
and research strategies, and know-how provided by the other party (the
"Disclosing Party") during the Term of this Agreement and all Collaboration
Technology and all other data, results and information developed pursuant to
the Collaboration and solely owned by the Disclosing Party or
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jointly owned by the parties (collectively the "Confidential Information"),
except that the term "Confidential Information" shall not include:
(1) information that is or becomes part of the public domain
through no fault of the non-Disclosing Party or its Affiliates; and
(2) information that is obtained after the date hereof by the
non-Disclosing Party or one of its Affiliates from any Third Party which is
lawfully in possession of such Confidential Information and not in violation of
any contractual or legal obligation to the Disclosing Party with respect to
such Confidential Information; and
(3) information that is known to the non-Disclosing Party or
one or more of its Affiliates prior to disclosure by the Disclosing Party, as
evidenced by the non-Disclosing Party's written records; and
(4) information that is necessary to be disclosed to any
governmental authorities or pursuant to any regulatory filings, but only to the
limited extent of such legally required disclosure; and
(5) information which has been independently developed by the
non-Disclosing Party without the aid or use of Confidential Information.
(b) The obligations of this Section 12.1 shall survive the
expiration or termination of this Agreement for a period of 3 years.
12.2. PERMITTED DISCLOSURES. Confidential Information may be disclosed
to employees, agents, consultants, sublicensees or suppliers of the
non-Disclosing Party or its Affiliates, but only to the extent required to
accomplish the purposes of this Agreement and only if the non-Disclosing Party
obtains prior agreement from its employees, agents, consultants, sublicensees,
or suppliers to whom disclosure is to be made to hold in confidence and not
make use of such information for any purpose other than those permitted by this
Agreement. Each party will use at least the same standard of care as it uses to
protect proprietary or confidential information of its own to ensure that such
employees, agents, consultants, sublicensees, or suppliers do not disclose or
make any unauthorized use of the Confidential Information. Notwithstanding any
other provision of this Agreement, each party may disclose the terms of this
Agreement to lenders, investment bankers and other financial institutions of
its choice solely for purposes of financing the business operations of such
party either (i) upon the written consent of the other party or (ii) if the
disclosing party obtains a signed confidentiality agreement with such financial
institution with respect to such information, upon terms substantially similar
to those contained in this Section 12.
12.3. PUBLICITY. All publicity, press releases, and other
announcements relating to this Agreement or the transaction contemplated hereby
shall be reviewed in advance by, and shall be subject to the approval of, both
parties; provided, however, that either
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party may (i) publicize the existence and general subject matter of this
Agreement without the other party's approval and (ii) disclose the terms of
this Agreement only to the extent required to comply with applicable
securities laws and in the case of (ii), the non-disclosing party shall have
the right to review and comment on such disclosure prior to its submission,
where practicable.
12.4. PUBLICATION. The parties shall cooperate in appropriate
publication of the results of research and development work performed pursuant
to this Agreement, but subject to the predominating interest to obtain patent
protection for any patentable subject matter. To this end, it is agreed that
prior to any public disclosure of such results, the party proposing disclosure
shall send the other party a copy of the information to be disclosed, and shall
allow the other party 30 days from the date of receipt in which to determine
whether the information to be disclosed contains subject matter for which
patent protection should be sought prior to disclosure, or otherwise contains
Confidential Information of the reviewing party which such party desires to
maintain as a trade secret. If notification is not received during the 30-day
period, the party proposing disclosure shall be free to proceed with the
disclosure. If due to a valid business reason or a belief by the non-disclosing
party that the disclosure contains subject matter for which a patentable
invention should be sought, then prior to the expiration of the 30-day period,
the non-disclosing party shall so notify the disclosing party, who shall then
delay public disclosure of the information for an additional period of up to
6 months to permit the preparation and filing of a patent application on the
subject matter to be disclosed or other action to be taken. The party proposing
disclosure shall thereafter be free to publish or disclose the information. The
determination of authorship for any paper shall be in accordance with accepted
scientific practice.
SECTION 13. REPRESENTATIONS AND WARRANTS
13.1. LEGAL AUTHORITY. Each party represents and warrants to the other
that it has the legal power, authority and right to enter into this Agreement
and to perform its respective obligations set forth herein.
13.2. NO CONFLICTS. Each party represents and warrants that as of the
date of this Agreement it is not a party to any agreement or arrangement with
any Third Party or under any obligation or restriction, including pursuant to
its Certificate of Incorporation or By-Laws, which in any way limits or
conflicts with its ability to fulfill any of its obligations under this
Agreement. CoCensys further represents and warrants to Warner that it has
delivered to Warner a complete copy of all written agreements between (a) Acea
and Oregon, (b) Acea and UC ,and (c) CoCensys and Acea, relating to research
being conducted by any such parties in the Field and no oral agreements or
other arrangements exist between Acea and Oregon or Acea and UC which supersede
any of the terms of any such written agreements. CoCensys further represents to
Warner that there are no existing agreements between CoCensys, Inc. and Oregon
relating to research or development in the Field.
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13.3. OTHERS BOUND. Each party covenants that any contract it enters
into with a Third Party performing services under this Agreement on behalf of
such party will bind such Third Party to all of the relevant terms and
conditions of this Agreement.
13.4. OREGON/UC AGREEMENTS. CoCensys represents and warrants that:
(a) Subject only to the rights retained by Oregon or by UC or by the
United States government pursuant to the provisions of the Oregon/UC
Agreements, CoCensys is the sole owner and/or exclusive worldwide licensee free
and clear of any and all charges, claims or encumbrances of any kind, except
those present in the Oregon/UC Agreements, of the entire right, title and
interest in and to all intellectual property rights (including, without
limitation, all patent rights, inventions and discoveries) and all compounds
which are subject to the terms of the Oregon/UC Agreements (collectively, the
"Oregon/UC Agreement Rights").
(b) Other than Oregon, UC, and the United States government, no
other person or organization presently has any effective option or license with
respect to the manufacture, use, or sale of the CoCensys Compounds or any
compounds arising under the Oregon/UC Agreement Rights.
(c) By fax transmitted on September 27, 1995, as supplemented by fax
transmitted on September 28, 1995, CoCensys has provided to Warner true and
complete copies of the Oregon/UC Agreements, including all supplements thereto
and modifications or amendments thereof. CoCensys is not, and to its best
knowledge Oregon is not, in default under or in breach of the Oregon License
Agreement or the Oregon Research Agreement or the Oregon/UC Assignment
Agreement and such agreements are in full force and effect as of the date
hereof. CoCensys is not, and to its best knowledge UC is not, in default under
or in breach of the UC Research Agreement or the Oregon/UC Assignment Agreement
and such agreements are in full force and effect as of the date hereof.
13.5. SURVIVAL. The foregoing representations and warranties shall
survive the execution, delivery, and performance of this Agreement,
notwithstanding any investigation by or on behalf of either party.
13.6. DISCLAIMER. Except as otherwise expressly stated herein, Warner
hereby disclaims any warranty expressed or implied as to any Collaboration
Product or Independent Product sold or placed in commerce by or on behalf of
CoCensys. Except as otherwise expressly stated herein, CoCensys hereby
disclaims any warranty expressed or implied as to any Collaboration Product or
Independent Product sold or placed in commerce by or on behalf of Warner.
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SECTION 14. TERMINATION
14.1. TERMINATION FOR BREACH. In the event of a material breach of the
provisions of this Agreement, the breaching party shall have 60 days after
receipt of written notice from the non-breaching party to cure such breach, or
if cure cannot be reasonably effected within such 60-day period, to deliver to
the other party a plan for curing such breach which is reasonably sufficient to
effect a cure.
(a) In the event of an uncured breach of a material obligation under
the Research Program and during the Term of the Research Program, the
non-breaching party may terminate the Term of the Research Program and each
party shall retain such ownership interest in the Collaboration Technology as
it shall hold on the date of the termination, provided, however, that (i) the
licenses granted to the non-breaching party under Section 2.5, Section 4.7, and
Section 6 shall remain in full force and effect but the breaching party shall
forfeit all rights to develop and promote all Collaboration Compounds,
Collaboration Lead Compounds and Collaboration Products, and any resulting
products shall be deemed to be Independent Products of the non-terminating
party, (ii) the breaching party shall not conduct any further research in the
Field for a period of [*] from the effective date of such early termination,
(iii) all licenses granted to such breaching party under this Agreement may be
immediately terminated by the non-breaching party, and (iv) any royalties due
the breaching party under this Agreement shall be reduced by [*].
(b) In the event of an uncured material breach by Warner of its
obligations to pay any royalties due and owing with respect to a Collaboration
Product pursuant to Section 6.6, or CoCensys' Share of Profit under Section
7.16(a), CoCensys may terminate the licenses it has granted to Warner pursuant
to Section 6.1 in respect of such Collaboration Product whereupon, at CoCensys'
request, Warner shall grant to CoCensys an exclusive (even as to Warner)
worldwide license (with the right to sublicense) under the Patent Rights,
Collaboration Technology, and Background Technology relating to such Product
and owned or Controlled by Warner, to the extent necessary to make, use or sell
such Product (i) in countries other than those in which the parties are
co-promoting such Collaboration Product, if any, in the case of a failure to
pay royalties and (ii) in the Co-Promotion Country in the case of failure to
pay the Share of Profit, subject to payment of a [*] royalty to Warner on Net
Sales of such Collaboration Product, and shall further assign to CoCensys all
Regulatory Approvals (to the extent permitted by law) in such countries.
(c) In the event of an uncured material breach of Section 6.7 by the
Independent Party in respect of royalties owed thereunder on an Independent
Product, the other party may terminate the licenses granted by it pursuant to
Section 6.3 in respect of such Product, whereupon at the other party's request,
the Independent Party shall grant it an exclusive (even as to such party),
worldwide license (with the right to sublicense) under the Patent Rights,
Collaboration Technology, and Background Technology relating to such Product
and owned or Controlled by the Independent Party, to the extent
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necessary to make, use and sell such Independent Product subject to payment
of a [*] royalty to the breaching Independent Party and shall further assign
to the other party all Regulatory Approvals (to the extent permitted by law)
in such countries.
(d) In the event of an uncured material breach of either party's
obligations with respect to the Preclinical Development or Development of any
Collaboration Compound, including, but not limited to, the payment of such
party's share of Development Costs, the nonbreaching party shall have the right
to terminate the license granted to the breaching party under Section 6.1, 6.2,
or 6.3 with respect to such Collaboration Compound, and to declare such
Collaboration Compound to be an Independent Lead Compound or Independent
Product and such non-breaching party shall be deemed to be an Independent Party
with respect to such Independent Lead Compound or Independent Product, and
shall have such rights and obligations applicable to an Independent Party as
set forth herein, provided, however, any royalties due the breaching party on
sales of such Independent Product pursuant to Section 6.7 shall be reduced by
[*].
14.2. EFFECT OF BANKRUPTCY. If, during the Term of the Research
Program, either party files a voluntary petition in bankruptcy, is adjudicated
a bankrupt, makes a general assignment for the benefit of creditors, admits in
writing that it is insolvent or fails to discharge within 15 days an
involuntary petition in bankruptcy filed against it, then the Term of the
Research Program and the entirety of this Agreement may be immediately
terminated by the other party.
14.3. DETERMINATION OF CO-PROMOTION RIGHTS UPON CHANGE IN CONTROL.
(a) In the event of a Change of Control (as defined below) of either
party which results in the control of such party (the "Acquired Party") by a
Pharmaceutical Company (as defined below), the Acquired Party promptly shall
notify the other party (the "Non-Acquired Party") of such Change in Control and
the Non-Acquired Party shall have the right, upon written notice to the
Acquired Party (the "Notice of Intent"), [*] to be set forth in
Section 14.3(b), provided that the Notice of Intent is received by the Acquired
Party within 90 days after receipt of notice by the Non-Acquired Party of such
Change in Control.
(b) Within 30 days following receipt of the Notice of Intent, the
parties shall jointly select a Third Party arbitrator (the "Third Party
Arbitrator"), which shall be a Third Party with significant qualifications and
experience in the pharmaceutical business. Within 60 days following receipt of
the Notice of Intent, each party shall submit to the Third Party Arbitrator,
and to the other party, [*]. Within 15 days following receipt of such
information from both parties, the Third Party Arbitrator shall select [*] and
shall notify the parties of its selection. In making its determination pursuant
to the preceding sentence, the Third Party Arbitrator (i) shall select that
submitted [*] to a hypothetical, independent Pharmaceutical Company and
(ii) shall not take into account any unique
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circumstances [*] which the Acquired Party has undergone its Change in
Control. The [*] selected by the Third Party Arbitrator shall be deemed to be
the [*].
(c) Within 15 days after determination of the [*], the Non-Acquired
Party will notify the Acquired Party as to whether it wishes to purchase the
Agreement Rights at [*]. If the Non-Acquired Party elects not to [*], the
parties will continue to research, develop, and co-promote under this Agreement
and the Non-Acquired Party will pay all costs for the Third Party Arbitrator.
If the Non-Acquired Party elects to [*], the Non-Acquired Party shall pay to
the Acquired Party [*] on the date upon which it makes such election and [*].
If the Non-Acquired Party elects to [*], and the date upon which it makes such
election is [*], the Non-Acquired Party shall pay to the Acquired Party [*] on
the date upon which it makes such election and [*] on or before each of the
subsequent anniversaries of such date, until [*] has been paid, where [*],
rounded up to the nearest whole number. If the Non-Acquired Party elects to
[*], the parties will [*] all costs associated with the Third Party Arbitrator.
Each party will bear [*] for submission to the Third Party Arbitrator pursuant
to Section 14.3(b).
(d) For purposes of this Section 14.3, "Change in Control" shall
mean (1) a merger or consolidation in which a party hereto is not the surviving
corporation; (2) a reverse merger in which a party hereto is the surviving
corporation but the shares of such party's voting stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (3) if, after giving
effect to any agreements among stockholders of a party hereto, any person holds
and may vote in excess of [*] of such party's voting stock.
(e) For purposes of this Section 14.3, "Pharmaceutical Company"
shall mean any person, as such term is defined in Section 12 (d) of the United
States Securities Exchange Act of 1934, as amended, which is engaged in the
pharmaceutical business in terms of researching, developing, marketing,
selling, or distributing pharmaceutical products for use in humans.
14.4. REMEDIES. In the event of any breach of any provision of this
Agreement, in addition and remedies at law or equity to enforce this Agreement.
14.5. VOLUNTARY TERMINATION. Either party may terminate the Term of
the Research Collaboration pursuant to Section 2.4.
SECTION 15. GENERAL PROVISIONS
15.1. INDEMNIFICATION. Each of Warner and CoCensys agrees to indemnify
and hold harmless the other party and its Affiliates and their respective
employees, agents, officers, directors and permitted assigns (such party's
"Indemnified Group") from and against any claims by a third party resulting in
the award or payment of any judgments, expenses (including reasonable
attorney's fees), damages and awards (collectively a "Claim") arising out of or
resulting from (i) its negligence or misconduct, (ii) a breach of
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any of its representations, warranties, or obligations hereunder or (iii)
such party's research and development, manufacture, use, promotion,
marketing, or sale of any Collaboration Compounds, except to the extent that
such Claim arises out of or results from the negligence or misconduct of a
party seeking to be indemnified and held harmless or the negligence or
misconduct of a member of such party's Indemnified Group. A condition of this
obligation is that, whenever a member of the Indemnified Group has
information from which it may reasonably conclude an incident has occurred
which could give rise to a Claim, such indemnified party shall immediately
give notice to the indemnifying party of all pertinent data surrounding such
incident and, in the event a Claim is made, all members of the Indemnified
Group shall assist the indemnifying party and cooperate in the gathering of
information with respect to the time, place and circumstances and in
obtaining the names and addresses of any injured parties and available
witnesses. No member of the Indemnified Group shall voluntarily make any
payment or incur any expense in connection with any such Claim or suit
without the prior written consent of the indemnifying party. The obligations
set forth in this Section 15.1 shall survive the expiration or termination of
this Agreement.
15.2. ASSIGNMENT. This Agreement shall not be assignable by either
party, without the prior written consent of the other party, such consent not
to be unreasonably withheld, except a party may, subject to Section 14.3, make
such an assignment without the other party's consent to Affiliates or to a
successor to substantially all of the pharmaceutical business of such party,
whether in merger, sale of stock, sale of assets or other transaction. In no
event will any assignment relieve the assigning party of its obligations
hereunder. This Agreement shall be binding upon and, subject to the terms of
the foregoing sentence, inure to the benefit of the panties' successors, legal
representatives and assigns.
15.3. NON-WAIVER. The waiver by either of the parties of any breach of
any provision hereof by the other party shall not be construed to be a waiver
of any succeeding breach of such provision or a waiver of the provision itself.
15.4. GOVERNING LAW. This Agreement shall be construed and interpreted
in accordance with the laws of the State of New York other than those
provisions governing conflicts of law.
15.5. PARTIAL INVALIDITY. If and to the extent that any court or
tribunal of competent jurisdiction holds any of the terms or provisions of this
Agreement, or the application thereof to any circumstances, to be invalid or
unenforceable in a final nonappealable order, the parties shall use their best
efforts to reform the portions of this Agreement declared invalid to realize
the intent of the parties as fully as practical, and the remainder of this
Agreement and the application of such invalid term or provision to
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby, and each of the remaining terms and provisions
of this Agreement shall remain valid and enforceable to the fullest extent of
the law.
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15.6. NOTICE. Any notice to be given to a party under or in connection
with this Agreement shall be in writing and shall be (i) personally delivered,
(ii) delivered by a nationally recognized overnight courier, or (iii) delivered
by certified mail, postage prepaid, return receipt requested to the party at
the address set forth below for such party:
To Warner: To CoCensys or Acea:
Senior Vice President, Research President & CEO
Xxxxx-Xxxxx Pharmaceutical Research CoCensys, Inc.
Division of Xxxxxx-Xxxxxxx Company 000 Xxxxxxxxxx Xxxxx
0000 Xxxxxxxx Xxxx Xxxxxx, Xxxxxxxxxx 00000
Xxx Xxxxx, XX 00000
With a copy to: with a copy to:
President, Xxxxx-Xxxxx, Xxxx Xxxxxxxxx
North America Xxxxxx Godward Xxxxxx
Xxxxxx-Xxxxxxx Company Xxxxxxxxx & Xxxxx
201 Xxxxx Road Five Palo Xxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000 Xxxx Xxxx, Xxxxxxxxxx 00000
and a copy to:
Vice President and General Counsel
Xxxxxx-Xxxxxxx Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
or to such other address as to which the party has given notice thereof. Such
notices shall be deemed given upon receipt.
15.7. HEADINGS. The headings appearing herein have been inserted
solely for the convenience of the parties hereto and shall not affect the
construction, meaning or interpretation of this Agreement or any of its terms
and conditions.
15.8. NO IMPLIED LICENSES OR WARRANTIES. No right or license under any
patent application, issued patent, know-how, or other proprietary information
is granted or shall be granted by implication. All such rights or licenses are
or shall be granted only as expressly provided in the terms of this Agreement.
Neither party warrants the success of any clinical or other studies undertaken
by it.
15.9. FORCE MAJEURE. No failure or omission by the parties hereto in
the performance of any obligation of this Agreement shall be deemed a breach of
this Agreement nor shall it create any liability if the same shall arise from
any cause or causes beyond the reasonable control of the affected party,
including, but not limited to, the following, which for purposes of this
Agreement shall be regarded as beyond the control
49
of the party in question: acts of nature; acts or omissions of any
government; any rules, regulations, or orders issued by any governmental
authority or by any officer, department, agency or instrumentality thereof;
fire; storm; flood; earthquake; accident; war; rebellion; insurrection; riot;
invasion; strikes; and labor lockouts; provided that the party so affected
shall use its best efforts to avoid or remove such causes of nonperformance
and shall continue performance hereunder with the utmost dispatch whenever
such causes are removed.
15.10. SURVIVAL. The representations and warranties contained in this
Agreement as well as those rights and obligations contained in the terms of
this Agreement which by their intent or meaning have validity beyond the term
of this Agreement shall survive the termination or expiration of this
Agreement.
15.11. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter contained
herein and supersedes any and all prior agreements, understandings and
arrangements whether oral or written between the parties relating to the
subject matter hereof, except for the terms of Articles 4 and 5 of the
Screening Collaboration Agreement. This Agreement will control in the event of
any conflict between this Agreement and the Research Plan.
15.12. AMENDMENTS. No amendment, change, modification, or alteration of
the terms and conditions of this Agreement shall be binding upon either party
unless in writing and signed by the party to be charged.
15.13. INDEPENDENT CONTRACTORS. It is understood that both parties
hereto are independent contractors and are engaged in the operation of their
own respective businesses, and neither party hereto is to be considered the
agent or partner of the other party for any purpose whatsoever. Neither party
has any authority to enter into any contracts or assume any obligations for the
other party or make any warranties or representations on behalf of the other
party.
15.14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
COCENSYS, INC. XXXXXX-XXXXXXX COMPANY
By: /s/ By: /s/
---------------------- -----------------------------
Name: Xx. Xxxxxx Xxxxx Name: Xxxxxx X. Xxxxxxxxx, Ph.D.
---------------------- ---------------------------
Title: Senior Vice Title: Vice President and
President, Research Chairman
and Drug Discovery Xxxxx-Xxxxx
Pharmaceutical Research
a Xxxxxx-Xxxxxxx Company
Date: October 13, 1997 Date: October 13, 1997
---------------------- -----------------------------
ACEA PHARMACEUTICALS, INC.
By: /s/
----------------------
Name Xx. Xxxxxx Xxxxx
----------------------
Title: Senior Vice
President, Research
and Drug Discovery
Date: October 13, 1997
----------------------
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SCHEDULE 1.3
[*]
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SCHEDULE 1.3(b)
[*]
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SCHEDULE 1.7
COCENSYS COMPOUNDS
[*]
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SCHEDULE 2.1
Xxxxx-Xxxxx/CoCensys Collaboration Research Plan - October, 1997
[*]
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PROPOSED RESEARCH PLAN
[*]
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SUBTYPE SELECTIVE NMDA ANTAGONISTS
Screening Strategy
[*]
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NON-COMPETITIVE AMPA ANTAGONISTS
Preliminary Screening Strategy
[*]
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SCHEDULE 5.1
PRE-CLINICAL DEVELOPMENT CRITERIA
[*]
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