EXHIBIT 10.16
RESEARCH COLLABORATION AGREEMENT
This Research Collaboration Agreement (this "Agreement") dated as of June
28, 1996 (the "Effective Date") is made between Phytera, Inc. ("Phytera"), a
Delaware corporation having its principal place of business at 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, XXX, and Tsumura & Co., a corporation
organized under the laws of Japan and having its principal place of business at
00-0 Xxxxxxxx, Xxxxxxx-xx, Xxxxx 000 Xxxxx.
RECITALS
WHEREAS, Phytera has established scientific research programs directed
towards the discovery of novel products from natural products;
WHEREAS, Tsumura has experience and capabilities in pharmaceutical
screening;
WHEREAS, Phytera and Tsumura entered into a Mutual Confidentiality
Agreement on January 17, 1996 ("Confidentiality Agreement");
WHEREAS, Phytera and Tsumura now mutually desire to enter into a research
collaboration to evaluate the pharmaceutical potential of certain plant cell
culture extracts with the primary purpose of discovering compounds for use in
therapeutic drugs for the treatment of allergies and rheumatoid arthritis;
WHEREAS, Phytera and Tsumura have agreed that (i) they will jointly own
certain patent and other intellectual property rights which arise from the
performance of this Agreement, (ii) they will cross-license each other in regard
to the use of those rights, (iii) each party will have a specific territory in
which to exercise those rights, and (iv) they will pay each other royalties in
regard to the use of those rights and products developed therefrom;
WHEREAS, Phytera and Tsumura cannot predict in advance whether their
collaborative efforts will result in the discovery of any compound which can be
successfully developed or used in a product that can be taken to market in
either party's respective territory or the marketability or profitability of any
such compound or product in those territories; and
WHEREAS, Phytera and Tsumura have agreed that, in the event that any
compound discovered during the performance of this Agreement is deemed by the
parties to be a development candidate, the parties will negotiate in good faith
the specific terms and conditions of a product development agreement concerning
the development of such compound.
NOW, THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto mutually agree as follows:
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ARTICLE 1 - DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 "Affiliate" of a party shall mean any corporation or other entity
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which controls, is controlled by, or is under common control with such party. A
corporation or other entity shall be regarded as in control of another
corporation or entity if it owns or directly or indirectly controls more than
fifty percent (50%) of the voting stock or other ownership interest of the other
corporation or entity, or if it possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the corporation
or other entity or the power to elect or appoint more than fifty percent (50%)
of the members of the governing body of the corporation or other entity.
1.2 "Collaboration Assays" shall mean the assays in which the Extracts are
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to be tested by Tsumura as further described herein. The initial Collaboration
Assays are listed in Appendix B attached hereto. Tsumura may substitute one or
more of the Collaboration Assays in accordance with the terms of Section 2.8
below.
1.3 "Collaboration Patent Rights" shall mean all patent applications
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heretofore or hereafter filed and having legal force in any country that are
jointly owned by Phytera and Tsumura pursuant to this agreement, or to which
Phytera and Tsumura otherwise acquire joint rights, which claim a Product or any
Compound contained in a Product, or the process of manufacture or any human
pharmaceutical use of a Product or any Compound contained in a Product, together
with any and all patents that have issued or in the future issue therefrom,
including utility model and design patents, certifications of invention and any
and all divisions, continuations, continuations-in-part but only to the extent
that the claims of such continuation-in-part cover the subject matter of this
Agreement, reissues, additions, extensions or supplementary protection
certificates to any of the aforesaid patents and patent applications; all to the
extent and only to the extent that Phytera and Tsumura now has or hereafter will
have the right to grant licenses, immunities or other rights thereunder.
1.4 "Compound" shall mean (a) a chemical compound that is isolated from an
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Extract as a result of the parties' performance of activities under this
Agreement, and (b) any derivative or analog of such compound regardless of
whether such derivative or analog is isolated from an Extract or chemically
synthesized.
1.5 "Extracts" shall mean the plant cell culture extracts based on
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Phytera's ExPAND(TM) technology provided to Tsumura pursuant to this Agreement
which technology Phytera has filed a patent application in the United States and
is currently filing patent applications in the United Kingdom and Japan.
1.6 "First Commercial Sale" of any Product shall mean the first sale for
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use or consumption by the general public of such Product in a country after
required marketing and pricing approval has been granted by the governing health
or other appropriate regulatory authority of such country.
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1.7 "Licensee" shall mean any corporation, partnership or business
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organization to whom Phytera or Tsumura, pursuant to the Collaboration Patent
Rights and the rights granted under Article 4, licenses their development or
marketing rights for any Compound or Product.
1.8 "Net Sales" shall mean the gross receipts from sales of Products by a
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party and its Affiliates less deductions for: (a) transportation charges,
including insurance; (b) sales and excise taxes and duties paid by a selling
party and any other governmental charges imposed upon the production,
importation, use or sale of such Products; (c) normal and customary trade,
quantity and cash discounts allowed; and (d) allowances or credits to customers
on account of rejection or return of Product. Sales of Products between or
among a party and its Affiliates are excluded from the computation of Net Sales,
but Net Sales shall include the subsequent sales of such Products to Third
Parties.
1.9 "Phytera Territory" shall mean North America.
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1.10 "Product" shall mean any composition developed by Phytera, Tsumura
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or any of their respective Affiliates or Licensees that contains one or more
Compounds. Such Product may be a tablet, capsule, ointment or other drug
delivery system or pharmaceutical preparation.
1.11 "Research Collaboration Period" shall mean the period described in
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Article 2.11.
1.12 "Research Operations Committee" shall mean the joint committee
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described in Article 6.2.
1.13 "Stage 3 Extract" shall have the meaning ascribed to it in Section
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2.3.4.
1.14 "Steering Committee" shall mean the joint committee described in
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Article 6.1.
1.15 "Support" shall mean the support in the areas of natural product
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chemistry and plant cell culture regrowth to be provided to Tsumura by Phytera
as described in Section 2.7 below and Appendix A attached hereto and
incorporated herein.
1.16 "Third Party" shall mean any party other than a party to this
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Agreement or an Affiliate.
1.17 "Tsumura Disease Targets" shall mean rheumatoid arthritis and anti-
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allergy.
1.18 "Tsumura Territory" shall mean all countries other than those
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located in North America.
1.19 "Validated Hit Extract" shall mean an Extract which (i) displays at
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least a defined level of potency activity in a Collaboration Assay (such level
to be determined
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by Tsumura in consultation with Phytera) and (ii) displays such activity in a
reproducible and dose-responsive fashion.
1.20 "Year 1" shall mean the one year period commencing on the Effective
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Date.
1.21 "Year 2" shall mean the one year period commencing on the first
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anniversary of the Effective Date.
1.22 "Year 3" shall mean the one year period commencing on the second
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anniversary of the Effective Date.
ARTICLE 2 - RESEARCH COLLABORATION
2.1 Selection of Collaboration Assays. Tsumura and Phytera have mutually
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agreed that the Collaboration Assays shall initially be comprised of the assays
identified and described in Appendix B attached hereto and incorporated herein.
2.2 Stage 1 - Pilot Testing. Following the execution of this Agreement,
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Phytera shall select and deliver to Tsumura [ ]* Extracts, each in a
quantity of approximately [ ]*, together with samples of extracts of culture
growth media. Promptly following receipt of such materials, Tsumura shall test
such Extracts in the Collaboration Assays and examine such Extracts and likely
culture extract constituents for activity to ensure that the Collaboration
Assays are optimally configured for screening plant culture extracts. Phytera
shall supply Tsumura with a reasonable number of additional samples of extracts
for pilot testing if requested by Tsumura. Based on the results of such testing,
(a) Tsumura shall promptly make such changes to the Collaboration Assays as are
reasonably necessary to optimally configure such assays and (b) the parties
shall determine the quantity of each Extract to be provided by Phytera to
Tsumura hereunder sufficient to enable Tsumura to conduct screening of such
Extract across each Collaboration Assay. Tsumura shall use diligent efforts to
complete the pilot testing no later than [ ]* following the date the last of all
such Extracts are received by Tsumura.
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* This portion of the Exhibit has been omitted pursuant to a request for
Confidential Treatment under Rule 406 of the Securities Act of 1033, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
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2.3 Stage 2 - Supply and Testing of Extracts.
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2.3.1 Following completion of Stage 1 and in consideration of
Tsumura's payment of the fees specified in Section 12.1.1 below, Phytera shall
select and deliver to Tsumura Extracts in accordance wit the following schedule:
Year 1: [ ]* Extracts
Year 2: [ ]* Extracts
Year 3: [ ]* Extracts
Pythera shall deliver Extracts to Tsumura once at the beginning of each [ ]*
during Year 1, Year 2 and Year 3 unless the Research Collaboration Period is
terminated earlier. [ ]* of the annual total of Extracts shall be delivered to
Tsumura each [ ]* provided that all Year 3 Extracts shall be delivered in the [
]* of Year 3 by delivering [ ]* of the Year 3 Extracts on each [ ]*. The
quantity of each Extract to be delivered to Tsumurs shall be determined by the
parties during stage 1. All shipments of Extracts shall be in compliance with
the terms of CITES Convention.
2.3.2 Phytera shall identify each Extract with a code. The list of
plant species comprising each shipment of extracts shall accompany each shipment
of extracts. For each Validated Hit Extract, Phytera shall provide Tsumura with
the identity of the plant from which such Validated Hit Extract was derived.
Phytera shall supply all additional information reasonably requested by Tsumura
for customs clearance in Japan or any other country in the Tsumura Territory.
2.3.3 Promptly following receipt of each delivery of Extracts,
Tsumura shall screen each Extract provided by Phytera across each Collaboration
Assay and shall perform appropriate follow-up analysis on each Extract which
shows initial activity to identify whether such Extract represents a Validated
Hit Extract. Tsumura shall promptly notify Phytera of each Extract which is
determined to be a Validated Hit Extract.
2.3.4 The parties shall work together and Tsumura shall select those
Validated Hit Extracts which shall proceed to Stage 3 (collectively, "Stage 3
Extracts"). If (a) Tsumura notifies Phytera that Tsumura does not wish to
submit a particular Validated Hit Extract to Stage 3 or (b) during the [ ]*
period following Tsumura's identification of a particular Extract as a Validated
Hit Extract, Tsumura fails to select such Validated Hit Extract as one of the
Extracts to proceed to Stage 3, then (i) Tsumura's rights in such Extract under
Section 3.2.1 shall terminate, (ii) Tsumura shall
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* This portion of the Exhibit has been omitted pursuant to a request for
Confidential Treatment under Rule 406 of the Securities Act of 1033, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
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grant Phytera the sole and exclusive, worldwide, royalty-bearing license under
Tsumura's Collaboration Patent Rights to develop, make, have made, use,
distribute for sale and sell Compounds and Products derived from such Extract
and the right to sublicense such rights to one or more Affiliates or Third
Parties subject to Sections 7.2, 7.3 and 7.4, and (iii) Phytera shall have the
obligation to pay royalties to Tsumura in accordance with the terms of Appendix
C with respect to all sales in any country of any Product developed from such
Extract.
2.4 Stage 3 - Fractionation and Analytical Characterization of Validated
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Hit Extracts
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2.4.1 Following Tsumura's selection of each Stage 3 Extract, Phytera
shall increase production of such extract to up to [ ]* to provide sufficient
quantities for the parties' ongoing chemical isolation and identification and
shall provide Tsumura with additional quantities of each Stage 3 Extract as
necessary for Tsumura's continued screening and testing of such extract as soon
as reasonably possible.
2.4.2 Tsumura shall conduct secondary screens and other tests on each
Stage 3 Extract as Tsumura deems reasonably necessary to obtain a broader
biological profile of the Stage 3 Extract and its activity and specificity.
2.4.3 Phytera shall be responsible for isolating and identifying the
active Compound(s) in each Stage 3 Extract and the chemical composition of each
such compound as soon as possible. Phytera shall keep Tsumura appraised of its
progress by providing Tsumura with monthly progress reports within seven (7)
days of the end of each month. Tsumura shall provide Phytera with screening
protocols, key reagents and other information related to each Stage 3 Extract
sufficient to enable Phytera to perform bioassay guided fractionation of such
extract.
2.4.4 Promptly following Phytera's isolation and identification of a
Compound and notice thereof to Tsumura, Tsumura shall notify Phytera in writing
as to whether Tsumura elects to have such Compound proceed into either the lead
optimization program (Stage 4) or directly into product development (Stage 5).
If (a)Tsumura notifies Phytera that Tsumura does not wish to submit a particular
Compound into the lead optimization program (Stage 4) and does not wish to
submit such Compound into product development (Stage 5), or (b) during the [
]* period following Phytera's isolation and identification of such Compound and
notice thereof to Tsumura, Tsumura fails to notify Phytera that Tsumura elects
to submit such Compound into either the lead optimization program (Stage 4) or
directly into product development (Stage 5), then (i)
______________
* This portion of the Exhibit has been omitted pursuant to a request for
Confidential Treatment under Rule 406 of the Securities Act of 1033, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
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the licenses granted to Tsumura by Phytera pursuant to Section 4.1.1 below with
respect to such Compound shall terminate, (ii) Tsumura shall grant Phytera the
sole and exclusive, worldwide, royalty-bearing license under Tsumura's
Collaboration Patent Rights to develop, make, have made, use, distribute for
sale and sell such Compounds and Products derived from such Compounds and the
right to sublicense such rights to one or more Affiliates or Third Parties
subject to Sections 7.2, 7.3 and 7.4, and (iii) Phytera shall have the
obligation to pay royalties to Tsumura in accordance with the terms of Appendix
C with respect to all sales in any country of any Product developed from such
Compound.
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2.5 Stage 4 - Lead Optimization.
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2.5.1 Tsumura shall perform all medicinal chemistry lead optimization
activities related to each Compound submitted to the lead optimization program,
unless otherwise requested by Phytera.
2.5.2 Upon request by Tsumura, Phytera shall perform lead
optimization activities related to plant or cell cultures, including obtaining
related plant species to search for alternative or improved compounds and
conducting additional cell culture manipulations on active plant species to
search for alternative or improved compounds. Such activities shall be
performed by Phytera only at the request of Tsumura for a fee, the amount and
payment terms of which shall be agreed upon by the parties in writing prior to
Phytera undertaking any such activity. The fee for such activity shall be
calculated on a pro-rata basis for actual services rendered and shall be based
on the full-time equivalent rates set forth in Section 12.1.2. Phytera shall
provide Tsumura with monthly progress reports within seven (7) days of the end
of each month concerning all such activities.
2.6 Stage 5 - Product Development. Stage 5 will commence when either (i)
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Phytera or Tsumura elects to submit a given Compound directly from Stage 3 into
product development in accordance with Section 2.4.4, or (ii) the lead
optimization stage with respect to a given Compound has been completed. The
parties expressly agree that Stage 5 Product Development shall be governed by
the terms of the specific Product Development Agreements which shall be
separately negotiated and agreed to and which shall be consistent with the
licenses and rights granted herein. Such agreements shall not affect the
obligations (financial or other) of either party under this Agreement.
2.7 Support. During the Research Collaboration Period, Phytera shall make
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available to Tsumura Support subject to Section 2.11 and as more fully described
in Appendix A. The committed amount of Support for Year 1, Year 2 and Year 3
and the fees associated with the same are specified in Section 12.1.2 and such
fees shall be paid in advance by Tsumura. For the purposes of this Section, the
"Prior Year's Unused Support" shall mean the lessor of (i) one-half (1/2) of the
committed amount of Support specified in Section 12.1.2 for the prior year and
(ii) the difference between the committed amount of Support specified in Section
12.1.2 for the prior year and the amount of Support actually provided by Phytera
during the prior year. The amount of the Prior Year's Unused Support shall be
cumulative. In Year 2 and Year 3, in addition to the committed amount of
Support specified in Section 12.1.2, Tsumura shall be entitled at no additional
charge, to additional Support in the amount of the accumulated Prior Year's
Unused Support, if any. In addition, during the two (2) year period following
the third anniversary of the Effective Date, Tsumura shall be entitled at no
additional charge, to additional Support in the amount of the accumulated Prior
Year's Unused Support, if any. Except as set forth in the preceding two
sentences, Tsumura shall not be entitled to any refund or credit in the event
the amount of Support provided during any period of time in response to
Tsumura's requests is less than the committed amount of support specified above
for such period. The Support fees are fully inclusive and include the costs of
all reagents, supplies and equipment necessary for Phytera to provide the
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Support. Phytera may provide additional Support to Tsumura on an as-available
basis in response to Tsumura's request for such Support. The fee for such
additional Support shall be calculated based on the full-time equivalent rates
set forth in Section 12.1.2. and include the costs of all reagents, supplies and
equipment. Within thirty (30) days of the end of each quarter, Phytera shall
provide Tsumura with a written report itemizing the amount of Support provided
during such quarter.
2.8 Substitution of Collaboration Assays. Tsumura acknowledges that
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Phytera may grant a Third Party the exclusive right to screen one or more of the
Extracts against one or more assays other than the Collaboration Assays.
However, Phytera shall not (i) grant any Third Party the right to screen
Extracts in the Collaboration Assays without the prior written consent of
Tsumura, nor (ii) grant any Third Party the right to screen any other plant
cell culture extracts based upon the ExPAND Technology in the Collaboration
Assays while Tsumura is conducting Stage 2 screening as described in Section
2.3 above without the prior written consent of Tsumura. If Tsumura wishes to
substitute a particular assay for one of the Collaboration Assays, Tsumura shall
notify Phytera in writing of its desire to substitute a particular assay for one
of the Collaboration Assays and such notice shall be accompanied by such
information, including the proposed assay protocol, as is reasonably required by
Phytera to evaluate the proposed substitution. Only assays in the Tsumura
Disease Targets may be substituted for the Collaboration Assays. Within twenty
(20) business days of its receipt of Tsumura's notice, Phytera shall notify
Tsumura of its decision with respect to the proposed assay substitution.
Phytera may withhold its consent to such proposed substitution only if the
proposed substitute assay is part of a collaboration between Phytera and a Third
Party or part of the internal screening program of Phytera or its Affiliates.
2.9 Data. Each party shall maintain records in sufficient detail and in
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good scientific manner appropriate for regulatory filings and patent purposes
and as will properly reflect all work done and results achieved in the
performance of such party's activities under this Agreement (including all data
in the form required to be maintained under any applicable governmental
regulations). Such records shall include books, records, time sheets, reports,
research notes, charts, graphs, comments, computations, analyses, recordings,
photographs, computer programs and documentation thereof, computer information
storage means, samples of materials and other graphic or written data generated
in connection with the performance of such party's activities under this
Agreement. Each party shall provide the other party with the right to inspect
such records, and shall provide the other party with copies of all requested
records, to the extent reasonably required for the performance of the other
party's obligations under this Agreement and for the verification of the
performance of the party's obligation under this Agreement; provided, however,
that the other party shall maintain such records and the information contained
therein in confidence in accordance with Article 8 hereof and shall not use such
records or information except to the extent otherwise permitted by this
Agreement. In satisfying their obligations under this section, Phytera and
Tsumura shall maintain their records in English and Japanese respectively.
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2.10 Reports. Within twenty (20) business days following the end of each
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calendar quarter, or at the reasonable request (with mutually agreed advance
notice) of the Steering Committee, each party shall provide to the members of
the Steering Committee a written report which shall summarize in reasonable
detail the work such party has performed under this Agreement during the
preceding calendar quarter. Such reports shall be prepared in English.
2.11 Research Collaboration Period. The Research Collaboration Period
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shall commence on the Effective Date and shall continue until all of the
Extracts delivered to Tsumura which have been selected for Stage 4 have
completed Stage 4 unless terminated earlier as provided for in Section 9.2
below. Phytera's obligation to provide Support shall continue until the earlier
of (i) the end of the Research Collateration Period and (ii) the fifth
anniversary of the effective date. Six months prior to the third anniversary of
the Effective Date, the Steering Committee shall meet to discuss the possible
extension of the Research Collaboration Period. The terms of such a possible
extension shall be negotiated at that time.
ARTICLE 3 - RIGHTS IN EXTRACTS
3.1 Phytera. Except for the rights expressly granted herein to Tsumura,
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Phytera retains all rights, title and interest in and to the Extracts provided
to Tsumura. Tsumura acknowledges that Phytera may grant one or more Third
Parties the right to (i) screen one or more of the Extracts against one or more
assays other than the Collaboration Assays, (ii) screen one or more plant cell
culture extracts other than the Extracts against one or more of the
Collaboration Assays after Tsumura has completed its Stage 2 screening
activities, or (iii) continue the research, development and commercialization of
one or more of those Validated Hit Extracts which Tsumura elects not to
continue to pursue under this Agreement subject to Sections 7.2, 7.3 and 7.4.
3.2 Rights Granted to Tsumura.
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3.2.1 Extracts. Phytera hereby grants Tsumura the exclusive right to
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screen the Extracts against the Collaboration Assays. No other right, title or
interest in or to the Extracts is granted to Tsumura. Tsumura acknowledges that
its right to use the Extracts is limited to screening such extracts against the
Collaboration Assays and Tsumura agrees that it shall not use the Extracts for
any other purpose.
3.2.2 Termination of Rights. Tsumura acknowledges that the rights
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granted under Section 3.2.1 may be terminated in accordance with the provisions
of Section 2.3.4 or Article 9 of this Agreement. The termination of any rights
granted
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hereunder with respect to a particular Extract, shall not affect Tsumura's
rights hereunder with respect to any other Extract .
ARTICLE 4 - RIGHTS IN COMPOUNDS AND PRODUCTS
4.1 Grant of Rights to Tsumura.
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4.1.1 In exchange for Tsumura's agreement to pay the milestone
payments and royalties specified in Appendix C below, Phytera hereby grants
Tsumura (i) an exclusive royalty-bearing license under Phytera's
Collaboration Patent Rights to develop, make, have made, use, distribute for
sale and sell Compounds and Products in the Tsumura Territory and (ii) the right
to sublicense to an Affiliate or Third Party the aforementioned rights within
the Tsumura Territory, provided that with respect to any such sublicense to a
Third Party, Tsumura shall have obtained the prior written consent of Phytera.
Such consent shall not be unreasonably be withheld. Upon Phytera's request,
Tsumura shall provide a copy of such sublicenses to Phytera.
4.1.2 Should Tsumura's rights to any particular Compound terminate,
Tsumura shall offer to sell to Phytera all of the data it generated about such
Compound. The parties shall negotiate in good faith the terms of sale of such
data for each such Compound.
4.2 Grant of Rights to Phytera.
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4.2.1 In exchange for Phytera's agreement to pay the royalties
specified in Appendix C below, Tsumura hereby grants Phytera (i) an exclusive
royalty-bearing license under Tsumura's Collaboration Patent Rights to develop,
make, have made, use, distribute for sale and sell Compounds and Products in the
Phytera Territory and (ii) the right to sublicense to an Affiliate or Third
Party the aforementioned rights within the Phytera Territory, provided that with
respect to any such sublicense to a Third Party, Phytera shall have obtained the
prior written consent of Tsumura. Such consent shall not be unreasonably
withheld. Upon Tsumura's request, Phytera shall provide a copy of such
sublicenses to Tsumura.
4.2.2 If Phytera fails to initiate product development for the
Phytera Territory with respect to any Compound within two (2) years following
the (i) completion of stage 4 with respect to such compound or (ii) the
designation by Tsumura of a compound as a candidate for stage 5 following the
completion of stage 3,
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whichever is applicable, then the licenses granted to Phytera by
Tsumura pursuant to Section 4.2.1 above with respect to such Compound shall
terminate, Phytera shall irrevocably assign to Tsumura all of its rights,
including without limitations, its Collaboration Patent Rights, in and to such
Compound, Tsumura shall have the sole and exclusive worldwide right to undertake
any and all further research, development and commercialization activities
related to such Compound and to license such rights to one or more Affiliates or
Third Parties and Tsumura shall have the obligation to pay royalties to Phytera
in accordance with the terms of Section Appendix C with respect to all sales in
any country of any Product for human pharmaceutical use developed from such
Compound.
4.3 Termination of Rights. Each party acknowledges that the rights granted
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under this Article 4 may be terminated in accordance with the provisions of
Section 2.4.4, 4.2.2 or Article 9 of this Agreement. The termination of any
rights granted hereunder with respect to any other Compound.
4.4 Satisfaction of Development Obligation. Each party may satisfy its
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respective obligations with respect to product development of Compounds by
having one or more Affiliates or Licensees fulfill such obligations.
ARTICLE 5 - DUE DILIGENCE
5.1 Diligent Efforts. Phytera and Tsumura each represent that each shall
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use its reasonable best efforts to bring each Compound it elects to enter into
product development (Stage 5) to the marketplace through a diligent and
aggressive program of development, production and distribution and each party
acknowledges that the exclusive license granted by the other party pursuant to
Section 4 above was granted based on such representation. However, in so doing
and otherwise meeting its obligations hereunder with respect to the development,
production and distribution of Products, Phytera and Tsumura shall each be
entitled to exercise prudent and reasonable business judgement, and shall be
considered to be meeting such obligations so long as each is reporting to the
other party and the Steering Committee as provided herein and is providing the
necessary financial, personnel and other resources which are reasonably required
to maintain progress in accomplishing the development, production and
distribution of Products, and conducts the activities reasonably required to
maintain scheduled progress in accomplishing the same. Neither Phytera nor
Tsumura shall be responsible for any failure which arises as a direct result of
(i) unanticipated technical or scientific problems or other causes outside the
direct control of the parties and their Affiliates and Licensees, (ii)
failure of the other party to meet its obligations hereunder, or (iii) action
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or inaction of any federal, state or other governmental agency whose approval is
required for clinical investigation or commercial sales of the Products where
such activity or inactivity does not arise from the intentional or negligent
acts or failures to act on the part of Phytera or Tsumura, their Affiliates or
Licensees.
ARTICLE 6 - MANAGEMENT OF THE COLLABORATION
6.1 Steering Committee.
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6.1.1 Description. Promptly after the Effective Date, a Steering
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Committee comprised of up to three named representatives of Phytera and up to
three named representatives of Tsumura shall be appointed. The Steering
Committee shall have the responsibilities of monitoring and coordinating the
activities of the parties under the terms of this Agreement and ensuring that
appropriate resources are available to carry out the objectives of this
Agreement provided, however that (i) the express terms of this Agreement shall
govern the Steering Committee's activities and the decisions allocated to a
respective party hereunder shall be made by that party and (ii) the Steering
Committee shall have no authority to increase a party's financial or other
obligations hereunder. The Steering Committee shall be co-chaired by a Phytera
representative and a representative of Tsumura. Each party shall designate its
representatives to the Steering Committee within forty-five (45) days of the
effective date of this Agreement. Meetings of the Steering Committee shall be
held at least two ( 2) times per year, once in Japan and once in the U.S. Each
party may change one or more of its representatives to the Steering Committee at
any time by providing prior written notice to the other party. Members of the
Steering Committee may be represented at any meeting by another member of the
Steering Committee so designated by the absent member, or by a deputy.
6.1.2 Minutes. The Steering Committee shall keep accurate minutes
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of its deliberations. Each co-chair shall be responsible for the preparation of
draft minutes for every other meeting or in such other manner as the co-chairs
shall agree. Draft minutes shall be sent to all members of the Steering
Committee within twenty ( 20) business days after each meeting. All records of
the Steering Committee shall be available to both parties. Such minutes and
records shall be in English.
6.1.3 Disagreements. Subject to Article 6.1.1 above, all
-------------
disagreements within the Steering Committee shall be subject to the following
(a) The representatives of the Steering Committee shall promptly present the
disagreement to a designated representative of Phytera and a designated
representative of Tsumura (the "Designated Representatives"); (b) The
Designated Representatives shall meet or discuss in a
13
telephone or video conference each party's view and explain the basis for such
disagreement; (c) If the Designated Representatives cannot promptly resolve such
disagreement, then such disagreement shall be submitted to arbitration in
accordance with the provisions of Section 13.6 below. The Designated
Representatives shall be named promptly after the Effective Date of this
Agreement.
14
6.2 Research Operations Committee.
-----------------------------
6.2.1 Description. Promptly after the Effective Date, a Research
-----------
Operations Committee comprised of up to three named representatives of Phytera
and up to three named representatives of Tsumura shall be appointed. The
Steering Committee shall have the responsibilities of monitoring and
coordinating the activities of the parties under the terms of this Agreement and
ensuring that appropriate resources are available to carry out the objectives of
this Agreement provided, however that (i) the express terms of this Agreement
shall govern the Steering Committee's activities and the decisions allocated to
a respective party hereunder shall be made by that party and (ii) the Steering
Committee shall have no authority to increase a party's financial or other
obligations hereunder. The Steering Committee shall be co-chaired by a Phytera
representative and a representative of Tsumura. Each party shall designate its
representatives to the Steering Committee within forty-five (45) days of the
effective date of this Agreement. Meetings of the Steering Committee shall be
held at least two ( 2) times per year, once in Japan and once in the U.S. Each
party may change one or more of its representatives to the Steering Committee at
any time by providing prior written notice to the other party. Members of the
Steering Committee may be represented at any meeting by another member of the
Steering Committee so designated by the absent member, or by a deputy.
6.2.2 Minutes. The Research Operations Committee shall keep accurate
--------
minutes of its deliberations. Each co-chair shall be responsible for the
preparation of draft minutes for every other meeting or in such other manner as
the co-chairs shall agree. Draft minutes shall be sent to all members of the
Research Operations Committee within twenty ( 20) business days after each
meeting. All records of the Research Operations Committee shall be available to
both parties. Such minutes and records shall be in English.
6.2.3 Disagreements. Subject to Article 6.2.1 above, all
-------------
disagreements that cannot be resolved by the members of the Research Operations
Committee shall be presented to the Steering Committee for resolution.
ARTICLE 7 - INTELLECTUAL PROPERTY RIGHTS
7.1 Ownership of Extracts. Phytera shall own all right, title and interest
---------------------
in and to all Extracts and, except as expressly provided in Article 3, no rights
of any kind to any
15
Extract shall pass to Tsumura as a result of this Agreement or any activity
conducted pursuant to this Agreement.
7.2 Ownership of Compounds, Products and Inventions. Phytera and Tsumura
-----------------------------------------------
shall jointly and equally co-own all right, title and interest in and to all
Compounds and Products whether discovered jointly or severally by Phytera or
Tsumura or any Licensee. In addition, Phytera and Tsumura shall jointly and
equally co-own all right, title and interest in all ideas, methods, writings,
inventions, discoveries, improvements and other technology, whether or not
patentable or copyrightable, and any patent applications, patents or copyrights
based thereon that are discovered, made or conceived during the term of this
Agreement by employees or Licensees of Phytera or Tsumura as a result of the
screening program conducted pursuant to this Agreement (collectively,
"Inventions").
7.3 Disclosure; Cooperation. During the term of this Agreement, each
-----------------------
party shall disclose to the other the making, conception or reduction to
practice of Inventions by employees or others acting on behalf of such party.
Each party represents and agrees that its employees and consultants and
Licensees shall be obligated under a binding written agreement to assign to
either (i) such party individually or (ii) Phytera and Tsumura jointly all
rights in all Inventions made or conceived during the term of this Agreement as
a result of any activity conducted pursuant to this Agreement by such employees,
consultants or Licensees. In the event that under any such agreement, such
rights are assigned to one party individually, that party hereby assigns and
agrees to assign joint ownership of such rights to the other party. Each party
agrees to sign or cause to have signed all documents relating to such
assignment. Each party agrees to enforce such agreements with employees,
consultants and Licensees, including, where appropriate, by legal action.
7.4 Patent Applications. Each party shall have the exclusive right and
-------------------
responsibility, subject to the terms of this Section, to file, prosecute and
maintain patent applications included in the Collaboration Patent Rights in all
countries of its respective Territory. All such patent applications shall be in
the name of Phytera and Tsumura jointly. For the purposes of this Section, the
"Primary Patenting Party" shall mean Tsumura in the Tsumura Territory and
Phytera in the Phytera Territory. In the event that the Primary Patenting
Party fails or elects not to file, prosecute or maintain such patent
applications in a specific country in its Territory, then such party shall
notify the other of its decision and the other party shall have the right but
not the obligation to file, prosecute or maintain any such patent applications
in such country in the joint names of Tsumura and Phytera. If the other party
chooses to file, prosecute or maintain any such patent applications in such
country, then (i) the license granted to the Primary Patenting Party pursuant to
Article 4 with respect to any Compound or Product identified in any such patent
application shall terminate for such country, (ii) the other party shall have
the right to undertake development and commercialization activities related to
such Compound or Product in such country and (iii) the other party shall have
the obligation to pay royalties to the Primary Patenting Party in accordance
with Appendix C with respect to all sales in such country of any Product
identified in such patent application. Each Primary Patenting Party shall to
the extent reasonably possible notify the other party of
16
its intention not to pursue such patent applications with sufficient time to
allow the other party to protect such patent rights prior to the expiration or
abandonment of such rights. In addition, when the Primary Patenting Party's
rights granted under Article 4 with respect to any particular Compound or
Product terminate pursuant to Sections 2.4.4 or 4.2.2 or when Tsumura's rights
to any Extract granted under Section 3.2.1 terminate pursuant to Section 2.3.4,
the other party shall have the right but not the obligation to file, prosecute
or maintain any patent applications with respect to such Compound or Product or
any discoveries with respect to such Extract in any country in the world. For
avoidance of any doubt, the parties acknowledge that, in any event and under any
circumstance, any and all patent applications shall be made in the joint names
of Phytera and Tsumura. Each patenting party shall be responsible for all costs
associated with the preparation, filing, prosecution and maintenance of such
patent applications filed, or to be filed, in the countries in which the party
is filing patent applications. Each party shall make available to the other
party or its authorized attorneys, agents or representatives, employees, agents
or consultants to the extent necessary or appropriate to enable such party to
file, prosecute and maintain patent applications and resulting patents for its
respective Territory with respect to Inventions and for periods of time
sufficient for such party to obtain the assistance it needs from such personnel.
Where appropriate, each party shall sign or cause to have signed all documents
relating to said patent applications or patents at no charge to the other party.
7.5 Cooperation. The parties shall, at their expense, cooperate as
-----------
necessary to enable the other to establish and protect its rights under this
Article 7.
7.6 No Other Technology Rights. Except as otherwise expressly provided in
--------------------------
this Agreement, under no circumstances shall a party hereto, as a result of this
Agreement, obtain any ownership interest in or other right to any technology,
know-how, patents, pending patent applications, products, vaccines, antibodies,
cell lines or cultures, or animals of the other party, including items owned,
controlled or developed by the other party, or transferred by the other party to
said party at any time pursuant to this Agreement. It is understood and agreed
by the parties that this Agreement does not grant to either party any license or
other right in basic technology of the other party.
7.7 Enforcement of Collaboration Patent Rights. Each party shall promptly
------------------------------------------
notify the other in writing of any alleged or threatened infringement of the
Collaboration Patent Rights of which it becomes aware. Each party is responsible
for the enforcement of the Collaboration Patent Rights in its respective
Territory except for the countries in which the other party has filed patent
applications and in its sole discretion may choose to prosecute any such
infringement in which case any recovery or damages received by such party shall
be retained by and be the sole property of such party. In the event that one
party brings an infringement action, such party shall control the litigation and
the
17
other party shall cooperate fully , including, if required to bring such action,
the furnishing of a power of attorney. Each party agrees that (i) if more than
six (6) months passes following the date such party first becomes aware of any
actual or alleged infringement and during such time such party is not successful
in causing such actual or alleged infringer to desist and such party does not
file an infringement action in a court of competent jurisdiction, or (ii) prior
to the end of such six (6) month period, such party notifies the other party of
its intention not to bring suit against such infringer, then the other party
shall have the right, but not the obligation, to prosecute at its own expense
such actual or alleged infringement and any recovery or damages received by such
party shall be retained by such party.
7.8 Trademarks. Phytera and Tsumura, each at their own expense, shall be
----------
responsible for the selection, registration and maintenance of all trademarks,
tradenames and service marks that such party employs in connection with the
Products and shall individually own and control such trademarks, tradenames and
service marks.
ARTICLE 8 - CONFIDENTIALITY
8.1 Confidential Information. From time to time during the term of this
------------------------
Agreement, and in order to carry out the provisions of this Agreement, it may be
necessary for one of the parties to disclose confidential information
("Confidential Information") to the other. For the purposes of this Agreement,
Confidential Information shall include the Extracts, including the identity of
the Extracts, supplied by Phytera under this Agreement, the data generated by
the Collaboration or any other activity conducted pursuant to this Agreement,
the Compounds, the Products, the Inventions, Phytera's cell culture techniques
and any strategies, plans or developments relating to any of the foregoing, the
identity of the Collaboration Assays and Tsumura's protocols for the
Collaboration Assays, the business, financials, technology, research strategy,
employees, infrastructure, collaborators, advisors, consultants, Board of
Directors and Scientific Advisory Board of Phytera and its Affiliates and the
business, financials, technology, research and research strategy of Tsumura and
its Affiliates.
8.2 Non-Disclosure Obligations.
--------------------------
(a) The recipient of such Confidential Information (the "Recipient")
undertakes to treat any and all of such Confidential Information as the other
party may disclose (the "Discloser") to the Recipient during the term of this
Agreement and for a period of ten (10) years thereafter as strictly confidential
and shall not divulge it to any Third Party for any purpose whatsoever and shall
not make use of such Confidential
18
Information or any part thereof for any purpose other than carrying out the
terms of this Agreement without the Discloser's prior written consent. Any data
or information generated by or as a result of the Collaboration or any other
activity conducted pursuant to this Agreement or any data or information with
respect to the Compounds, the Products or the Inventions shall not be disclosed
to any Third Party nor be used for any purpose other than carrying out the terms
of this Agreement without the other party's written consent. Notwithstanding the
foregoing, either party may disclose Confidential Information to consultants,
preclinical and clinical development organizations and investigators and
contract manufacturers to the extent reasonably necessary to develop and
manufacture the Compounds and Products derived from this Collaboration provided
such consultants, development organizations and investigators and contract
manufacturers have entered into a written confidentiality agreement containing
provisions at least as restrictive as those set forth in Section 8 of this
Agreement prior to such disclosure.
(b) In the event that the Recipient visits any of the establishments
of the Discloser, the Recipient undertakes that any further Confidential
Information which may come to the Recipient's knowledge, as a result of any such
visit, shall be deemed to be Confidential Information and shall be subject to
the provisions of Paragraph (a) of this Section 8.2.
8.3 Limitations. The undertakings in Paragraphs (a) and (b) of Section 8.2
-----------
shall not apply to information that (i) at the time of disclosure is published
or otherwise generally available to the public; (ii) after disclosure by
Discloser is published or becomes generally available to the public otherwise
than through any act or omission on the part of Recipient; (iii) the Recipient
can establish by written documentation that such information was in its
possession at the time of disclosure and that such information was not acquired
directly or indirectly from the Discloser; (iv) was rightfully acquired from a
third party who did not obtain it under pledge of secrecy to the Discloser or
another party; or (e) was required to be disclosed by law.
8.4 Samples. Neither Phytera nor Tsumura shall supply or send any samples
-------
of Compounds to any Third Party, other than to regulatory agencies or for use in
pre-clinical testing or clinical trials, unless such samples are protected by
an appropriate form of materials transfer agreement approved by Phytera and
Tsumura.
8.5 Publications.
------------
8.5.1 Procedure. Phytera and Tsumura recognize the need to obtain
---------
valid patent protection. Consequently, Phytera, Tsumura and their respective
employees and consultants and any other Third Party wishing to make a
publication (including any oral disclosure made without obligation of
confidentiality) relating to work performed by such party as part of the
collaboration described in this Agreement (the "Publishing Party") shall deliver
to the other party (the "Reviewing Party") a copy of the proposed written
publication at least ninety (90) days prior to submission for publication, or an
abstract of such oral disclosure at least thirty (30) days prior to submission
of the abstract or the oral disclosure, whichever is earlier. The Reviewing
Party shall have the right (a)
19
to propose modifications to the publication for patent reasons, (b) to request a
delay in publication or presentation in order to protect patentable information,
or (c) to request that the information be maintained as a trade secret and, in
such case, the Publishing Party shall not make such publication or disclosure.
If the Reviewing Party requests a delay as described in clause (b) in the
preceding sentence, the Publishing Party shall delay submission or presentation
of the publication for a period sufficient to enable protection of the Reviewing
Party's rights in such information to be filed.
8.5.2 Resolution. Only upon the receipt of written approval of the
----------
Reviewing Party may the Publishing Party proceed with the written publication or
the oral presentation.
8.6 Injunctive Relief. The parties hereto understand and agree that
-----------------
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Article 8 by either party or their employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf. Accordingly, each party shall be entitled to the granting of injunctive
relief by a court of competent jurisdiction against any action that constitutes
any such breach of this Article 8. It is understood that such injunctive relief
is intended solely as provisional relief pending the dispute resolution
procedures described in Section 13.6.
ARTICLE 9 - EXPIRATION AND TERMINATION
9.1 Expiration. Unless earlier terminated pursuant to Section 9.2, the
----------
rights and obligations of each party and the terms and conditions related to the
research collaboration shall terminate at the close of the Research
Collaboration Period, but all other rights and obligations of each party and the
remaining terms and conditions of this Agreement and the licenses granted
hereunder shall expire on the last to occur of (i) ten (10) years after the
First Commercial Sale of the last Product to be commercialized hereunder or (ii)
the last to expire of any of the then existing patents included in the Patent
Rights.
9.2 Right of Termination.
--------------------
9.2.1 For Convenience. Commencing eighteen (18) months following the
---------------
Effective Date, Tsumura shall have the right to terminate this Agreement at any
time by delivering written notice to Phytera at least six (6) months prior to
the effective date of such termination. If Tsumura elects to terminate this
Agreement pursuant to the terms of this Section 9.2.1, then Tsumura shall remit
to Phytera all payments that become due
20
and payable in accordance with the terms of this Agreement prior to the
effective date of such termination, and each such payment shall be made in
accordance with the applicable payment terms set forth herein. Unless otherwise
expressly indicated by Tsumura, the termination of the Agreement by Tsumura
under this Section 9.2.1 shall not affect any rights and obligations of the
parties under this Agreement with respect to any Extracts delivered to Tsumura
before the termination of this Agreement. Further, pursuant to this Section
9.2.1, Tsumura may terminate this Agreement for convenience at its sole
discretion with respect to particular one or more Extracts and/or Compounds. In
such case, this Agreement shall be terminated to the extent that it applies to
such particular Extracts and/or Compounds, and shall remain effective and in
full force with respect to other Extracts and Compounds
9.2.2 For Cause. Each party shall have the right to terminate this
---------
Agreement by giving to the other party not less than ninety (90) days prior
written notice in the event that the other party commits a material breach of
any of its material obligations hereunder and fails to cure such breach during
such notice period. For purposes of this Section, the occurrence of any of the
following shall be deemed to be a material breach of this Agreement but material
breaches shall not be limited to the following:
(i) failure to make any payment when such payment is due and
payable, provided such payment is not the subject of a good faith dispute
between the parties and the amount of such payment exceeds $50,000; or
(ii) failure by either party to use diligent efforts, as described in
Section 5.1 above, to commercialize Products.
(iii) failure by Phytera to deliver the Extracts or provide Support to
Tsumura in accordance with the terms of this Agreement.
In addition, either party shall have the right to terminate this Agreement
effective immediately upon giving notice to the other party upon the occurrence
of any of the following events: (a) an assignment by the other party for the
benefit of creditors; or (b) the filing of a petition in bankruptcy or
comparable debtor's relief law by the other party; or (c) the filing of a
petition in bankruptcy or comparable debtor's relief law against the other party
by its creditors which petition is not dismissed within sixty (60) days; or (d)
the appointment of a receiver, trustee, liquidator, receiver-manager or similar
custodian for the other party and the appointment is not dismissed within sixty
(60) days; or (e) the other party has voluntarily or involuntarily commenced
proceedings for dissolution,
21
liquidation or winding up, or has ceased to carry on its business in the
ordinary course; or (f) the institution of any other proceeding involving the
insolvency of the other party or the protection of, or from, its creditors,
which proceeding remains undismissed for a period of sixty (60) consecutive
days.
9.3 Effect of Expiration or Termination.
-----------------------------------
9.3.1 If this Agreement is terminated for convenience by Tsumura or
for cause by Phytera, Tsumura shall immediately cease performing all its
screening activities associated with this Agreement and return all of the
Extracts in its possession at that time for which this Agreement is terminated
(as described in Section 9.2.1) or, upon election by Phytera, Tsumura shall
destroy all such Extracts. Each party shall promptly return to the other party
all materials, including all Confidential Information of the other party,
previously delivered to such party to the extent that this Agreement is
terminated, and within ten (10) business days following the effective date of
such expiration or termination of this Agreement, an officer of each party shall
certify in writing to the other party that such party has complied with its
obligations set forth in this Section 9.3.1.
9.3.2 If this Agreement is terminated for cause by Tsumura, Phytera
shall immediately cease performing all its Support activities associated with
this Agreement. Tsumura shall have the right to retain any Extracts, Compounds,
Products and any data and information relating thereto then in its possession
and to use such Extracts, Compounds, Products and any data and information
relating thereto for the purposes set forth in this Agreement. Phytera shall
return to Tsumura all payments made to it pursuant to Section 12.1 on a pro rata
basis based on the actual number of Extracts delivered to Tsumura and the actual
amount of Support provided to Tsumura without prejudice to Tsumura's rights set
forth in the second sentence of this Section 9.3.2. Each party shall promptly
return to the other party all materials, including all Confidential Information
of the other party, previously delivered to such party, and within ten (10)
business days following the effective date of such expiration or termination of
this Agreement, an officer of each party shall certify in writing to the other
party that such party has complied with its obligations set forth in this
Section 9.3.2.
9.3.3 Subject to Section 9.2.2 (i), if Tsumura fails to make
milestone payments for any Compound or Product as required by Section C1 below
or either party fails to make royalty payments for any Compound or Product as
required by Section C2 below, then such party shall (i) cease all research and
development activities associated with such Compound or Product, (ii) cease
manufacturing, marketing and selling such Compound or Product, (iii) irrevocably
assign its Collaboration Patent Rights to such Compound or Product to the other
party and (iv) the license granted to such party under Section 4 with respect to
such Compound or Product shall terminate.
9.3.4 Upon termination or expiration of this Agreement, each party
shall retain its respective Collaboration Patent Rights, except to the extent
such rights have been irrevocably assigned to the other party pursuant to this
Agreement. The expiration of this Agreement or the termination of this Agreement
by either party for any reason
22
shall not relieve either party from any obligation that matured prior to the
effective date of the expiration or termination.
ARTICLE 10 - REPRESENTATIONS AND WARRANTIES
10.1 General. Each party warrants and represents to the other that it has
-------
the legal right and power to enter into this Agreement, to extend the rights and
licenses granted to the other in this Agreement, and to perform fully its
obligations hereunder, and that it has not made nor will it make any commitments
to others in conflict with or in derogation of such rights or this Agreement.
10.2 Services. Each party warrants and represents to the other that it
--------
shall conduct its activities in a good scientific manner and in compliance with
all applicable good laboratory and manufacturing practices and all applicable
legal requirements.
10.3 Phytera's Technology. Phytera warrants and represents that it has
--------------------
filed patent applications for the ExPAND(TM) Technology in the United States and
is currently filing patent applications for the ExPAND(TM) Technology in the
United Kingdom and Japan.
10.4 Extracts. Phytera warrants and represents that all shipments of
--------
Extracts shall be in compliance with the terms of the CITES Convention.
ARTICLE 11- INDEMNITY; INSURANCE
11.1 Indemnity Obligations. Each party shall indemnify and hold harmless
---------------------
the other party and its officers, directors, employees and agents from and
against all liabilities, claims, actions and proceedings and all expenses
arising in connection therewith (including without limitation, damages,
judgments, awards, costs and attorney's fees and disbursements) which they may
incur or which may be asserted against them arising out of or by reason of the
activities of such party, its Affiliates or Licensees, or by their respective
officers, directors, employees or agents pursuant to this Agreement with the
exception of those arising from the intentional wrongful actions or gross
negligence of the other party or any of its employees or agents or from the
breach of any representation, warranty or obligation of the other party as
specified herein.
11.2 Procedure. Promptly after learning of the occurrence of any event
---------
which gives rise to its rights under the provisions of Section 11.1, the
indemnified party shall notify the other party in writing of any such matter.
The indemnified party shall cooperate with the other party in the negotiation,
compromise and defense of any such matter. The indemnifying party shall be in
charge of and control such negotiations, compromise and defense. In no event
shall the indemnified party compromise or settle any such matter without the
prior consent of the other party and such party shall not be bound by any such
compromise or settlement without its prior written consent.
23
11.3 Insurance. For the period starting with the initiation of clinical
---------
trials of a Product by Phytera, Tsumura or an Affiliate or Licensee of either ,
such party shall maintain product liability insurance in an amount acceptable to
the other party with respect to the development, manufacture and sale of the
Products developed pursuant to this Agreement for the term of this Agreement (if
such insurance is an occurrence-basis policy) or for an additional ten years
after the expiration or termination of this Agreement (if such insurance is a
claims-made basis policy).
ARTICLE 12 - RESEARCH PAYMENTS
12.1 Research Payments.
-----------------
12.1.1 Extracts. In consideration of Phytera's agreement to
--------
provide the Extracts to Tsumura under the terms of this Agreement, Tsumura
agrees to pay Phytera as follows:
Year 1 ( []* Extracts) - [ ]*
Year 2 ( []* Extracts) - [ ]*
Year 3 ( []* Extracts) - [ ]*
12.1.2 Support. In consideration of Phytera's agreement to provide
-------
Support to Tsumura under the terms of this Agreement, Tsumura agrees to pay
Phytera for Support in the area of [ ]* of Stage 3 Extracts as follows:
Year 1 ([]* Full-time equivalent) - [ ]*
Year 2 ([]* Full-time equivalent) - [ ]*
Year 3 ([]* Full-time equivalent) - [ ]*
and Tsumura agrees to pay Phytera for Support in the area of [ ]* as
follows:
Year 1 ([]* Full-time equivalent) - [ ]*
Year 2 ([]* Full-time equivalent) - [ ]*
Year 3 ([]* Full-time equivalent) - [ ]*
These fees are fully inclusive and include the cost of all reagents, supplies,
and equipment.
________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
24
The fee for additional Support provided by Phytera at Tsumura's request in
Year 1 shall be [ ]* per United States full-time equivalent and [ ]*
per United Kingdom full-time equivalent calculated on a pro-rata basis for
actual services rendered. Thereafter, such amounts may be adjusted once per year
provided that any increase in such amounts shall not exceed the percentage by
which the Consumer Price Index for all Urban Consumers, U.S. City Average (as
published by the U.S. Department of Labor, Bureau of Labor Statistics) increased
during the 12-month period prior to the date of the notice of such increase.
12.1.3 Timing of Payments. The payments specified above shall be
------------------
paid annually in advance and shall be due and payable as follows:
(i) Payments associated with Year 1 shall be due and
payable within [ ]*;
(ii) Payments associated with Year 2 shall be due and
payable within [ ]*; and
(iii) Payments associated with Year 3 shall be due and
payable within [ ]*.
12.1.4 Time Records. Phytera shall keep accurate and reliable
------------
records of Support specifying the area of Support and the time spent by each
employee of Phytera on a daily basis and shall send a summary of such monthly
records to Tsumura within seven (7) days following the end of each calendar
month.
ARTICLE 13 - MISCELLANEOUS
13.1 Force Majeure. Neither party shall be held liable or responsible to
-------------
the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party including but not limited to fire, floods,
embargoes, war, acts of war (whether war is declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labor disturbances, acts of
God or acts, omissions or delays in acting by any governmental authority or the
other party.
13.2 Severability. Should one or more provisions of this Agreement be or
------------
become invalid, the parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions which valid provisions in their economic
effect are sufficiently
_________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
25
similar to the invalid provisions that it can be reasonably assumed that the
parties would have entered into this Agreement with such valid provisions. In
case such valid provisions cannot be agreed upon, the invalidity of one or
several provisions of this Agreement shall not affect the validity of this
Agreement as a whole, unless the invalid provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that the
parties would not have entered into this Agreement without the invalid
provisions.
13.3 Notices. Any consent, notice or report required or permitted to be
-------
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier) or courier, postage prepaid (where
applicable), addressed to such other party at its address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor and shall be effective upon receipt by the addressee.
If to Phytera: Phytera, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
XXX
Attention: President and CEO
Fax: 000 000 000 0000
If to Tsumura: Tsumura & Co.
00-0 Xxxxxxxx
Xxxxxxx-xx
Xxxxx 000 Xxxxx
Attention: General Manager, Research & Development
Fax: 00 0 0000 0000
13.4 Assignment. This Agreement may not be assigned or otherwise
----------
transferred by either party without the prior written consent of the other
party; provided, however, that either party may, without such consent, assign
this Agreement and its rights and obligations hereunder to its Affiliates or in
connection with the transfer or sale of all or substantially all of its business
or in the event of its merger or consolidation or change in control or similar
transaction. Any purported assignment in violation of the preceding sentence
shall be void. Any permitted assignee shall assume all obligations of its
assignor under this Agreement.
13.5 Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of law provisions thereof.
13.6 Dispute Resolution. Except as provided in Section 6.1.3, any
------------------
disputes arising between the parties relating to, arising out of or in any way
connected with this Agreement or any term or condition hereof, or the
performance by either party of its obligations hereunder, whether before or
after termination of this Agreement, shall be promptly presented to the
Designated Representatives for resolution and if such persons
26
or their designees cannot promptly resolve such disputes, then such dispute
shall be finally resolved by binding arbitration in accordance with following
provisions. Whenever a party shall decide to institute arbitration proceedings,
it shall give written notice to that effect to the other party. The party giving
such notice shall refrain from instituting the arbitration proceedings for a
period of sixty (60) days following such notice. Any arbitration hereunder shall
be conducted pursuant to the Japan-American Trade Arbitration Agreement of
September 16, 1952, by which each party is bound. If the request for arbitration
is initiated by Phytera, the arbitration shall take place in Tokyo, Japan. If
the request for arbitration is initiated by Tsumura, the arbitration shall take
place in Boston, MA, USA
13.7 Exports. The parties acknowledge that the export of technical data,
--------
materials or products is subject to the exporting party receiving any necessary
export licenses and that the parties cannot be responsible for any delays
attributable to export controls which are beyond the reasonable control of
either party. Each party agrees not to export or re-export, directly or
indirectly, any materials, information, technical data, the direct product of
such data, samples or equipment received or generated under this Agreement in
violation of any governmental regulations which may be applicable, including,
but not limited to, the Export Administration Act of 1979, as amended, its rules
and regulations, including, but not limited to, Part 779 of the United States
Export Control Regulations, published by the United States Department of
Commerce (collectively the "U.S. Export Laws"), and other applicable export
control laws. Each party agrees to obtain similar covenants from each of their
Affiliates and Licensees with respect to the subject matter of this Section.
Phytera shall make a commercially reasonably effort to provide Tsumura with such
information as Phytera deems important for Tsumura to comply with the U.S.
Export Laws.
13.8 Waiver. The waiver by either party hereto of any right hereunder or
------
the failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
13.9 Survival. The provisions of Articles 7, 8, 10 and 11, and Sections
--------
9.3, , 13.3, 13.5, 13.6 and C2.4 and any other obligation under this Agreement
that is expressly stated to survive or to be performed after the expiration or
termination of this Agreement shall survive the expiration or termination of
this Agreement.
13.10 Entire Agreement. This Agreement, together with all appendices
----------------
attached hereto and incorporated herein, contains the entire understanding of
the parties with respect to the subject matter hereof. This Agreement supersedes
all express or implied agreements, representations and understandings, either
oral or written, heretofore made between or by the parties with respect to the
subject matter hereof. This Agreement may be amended, or any term hereof
modified, only by a written instrument duly executed by both parties hereto.
27
13.11 Independent Contractors. It is expressly agreed that Tsumura and
-----------------------
Phytera shall be independent contractors and that the relationship between the
two parties shall not constitute a partnership, joint venture or agency. Neither
Phytera nor Tsumura shall have the authority to make any statement,
representation or commitment of any kind, or to take any action which shall be
binding on the other without the prior written consent of the other party.
13.12 Headings. The captions to the articles and sections of this
--------
Agreement are not a part of this Agreement, but are merely guides or labels to
assist in locating and reading the several articles and sections hereof.
13.13 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the date first set
forth above.
PHYTERA, INC. TSUMURA & CO.
By:/s/ Xxxxxxx Xxxxxxxx By: /s/ Hachizaemon Kazama
---------------------- ------------------------------
Xxxxxxx Xxxxxxxx Hachisaemon Kazama
---------------- ------------------------------
Name Name
President and CEO President
----------------- ------------------------------
Title Title
28
APPENDIX A - SUPPORT
--------------------
Phytera shall provide Tsumura with support in the areas of [
]*.
Phytera shall provide the following committed level of support to Tsumura:
--------------------------------------------------------------------------------
YEAR [ ]* SUPPORT [
---- ------------------ --------------
]* SUPPORT
-------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 [ ]* FTE [ ]* FTE
--------------------------------------------------------------------------------
2 [ ]* FTE [ ]* FTE
--------------------------------------------------------------------------------
3 [ ]* FTE [ ]* FTE
--------------------------------------------------------------------------------
Phytera shall provide additional support to Tsumura on an as-available basis if
so requested by Tsumura. The fees for such additional support shall be
calculated on a pro-rata basis for actual services rendered as described in
Section 12.1.2 of the Agreement.
_____________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
29
APPENDIX B - COLLABORATION ASSAYS
The initial Collaboration Assays are:
[
-
]*
__________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
30
APPENDIX C - MILESTONES AND ROYALTIES
C1. Milestones. In consideration of the rights and licenses granted
----------
to Tsumura, Tsumura shall pay to Phytera the milestone payments shown in Table
C1 for the first Compound or Product to reach each of the defined milestones
which have not been reached by a previous Compound or Product. Tsumura shall
make [ ]* payments for the second Compound or Product to reach each milestone.
For the third and subsequent Compounds or Products to reach each milestone,
Tsumura shall pay [ ]* of the milestone payments specified in Table C1. However,
Tsumura shall only pay each of the milestones once for any Compound or Product
regardless of the number of countries in which the milestone may occur. Each
milestone payment shall be payable within [ ]* following the achievement of such
milestone. For the purpose of clarification, examples of Tsumura's milestone
obligations under three different scenarios are shown in Appendix D.
Table C1
--------
-------------------------------------------------------------------------------
Milestone Net Payment
--------- -----------
===============================================================================
1. [ [ ]*
]*.
2. [ [ ]*
]*.
3. [ [ ]*
]*.
4. [ ]*. [ ]*
-------------------------------------------------------------------------------
C2. Royalties on Net Sales.
----------------------
C2.1 Royalties Payable by Tsumura. In consideration of the rights and
----------------------------
licenses granted to Tsumura hereunder, Tsumura shall pay to Phytera a royalty on
Net Sales of each Product sold by Tsumura or its Affiliates at the rates set
forth below. For the purpose of determining royalty payments, the Net Sales of
all Products sold by Tsumura and its Affiliates containing the same Compound
shall be aggregated.
C2. Royalties on Net Sales.
----------------------
C2.1 Royalties Payable by Tsumura. In consideration of the
rights and licenses granted to Tsumura hereunder, Tsumura shall pay to Phytera a
royalty on Net Sales of each Product sold by Tsumura or its Affiliates at the
rates set forth below. For the purpose of determining royalty payments, the Net
Sales of all Products sold by Tsumura and its Affiliates containing the same
Compound shall be aggregated.
__________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
31
In the event that [ ]*. Tsumura shall pay royalties of [ ]* Tsumura's Net
sales. In the event that [ ]*, Tsumura shall pay royalties of [ ]* Tusumura's
Net Sales.
C2.2 Royalties Payable by Phytera. In consideration of the rights and
----------------------------
licenses granted to Phytera hereunder, Phytera shall pay to Tsumura a royalty on
Net Sales of each Product sold by Phytera or its Affiliates as set forth below.
For the purpose of determining royalty payments, the Net Sales of all Products
sold by Phytera and its Affiliates containing the same Compound shall be
aggregated. For all Products, Phytera shall pay royalties of [ ]* of Phytera's
Net Sales.
C2.3 Sublicense Royalties. If either party grants a license or sublicense
--------------------
to any Third Party to make, use or sell a Product or Compound, , such party
shall provide the other party with written notice of such license or sublicense,
as the case may be, and shall pay to the other party in lieu of the royalties
payable under Section C2.1 or C2.2, as the case may be, [ ]* of each milestone
and royalty payments and other fees received from such Third Party as a result
of such license or sublicense.
C2.4 Survival of Obligation to Pay Milestones and Royalties.
------------------------------------------------------
Tsumura's obligation to pay milestones as set forth in Section C1 above and
each party's respective obligation to pay royalties as set forth in this Section
C2 shall survive the termination of this Agreement or any of the licenses and
rights granted hereunder.
C2.5 Other Business Terms. Each product development agreement covering
--------------------
Compounds and Products discovered pursuant to the activities under this
Agreement shall contain those business terms typically present in pharmaceutical
licensing agreements. Such business terms, which shall include the timing of
payment of royalties, method of royalty payments and the right to audit, shall
be consistent with the norms of pharmaceutical licensing agreements subject to
the parties' good faith negotiations.
C2.6 Net Payments. All payments pursuant to this Agreement except royalty
------------
payments are exclusive of any and all withholding or similar taxes imposed or
assessed by reason of this Agreement or the transactions contemplated hereby and
the party making such payment shall pay any and all such taxes, and any
penalties, interest and collection or withholding costs associated with such
taxes, at the time the payment of such tax is due. Royalty payments are
inclusive of any and all withholding or similar taxes imposed or assessed by
reason of this Agreement or the transactions contemplated
__________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
32
hereby and the party making such payment may deduct and pay any and all such
taxes, and any penalties, interest and collection or withholding costs
associated with such taxes, at the time the payment of such tax is due, and
shall be borne by the party receiving such payment.
C2.7 Incorporation of Appendix C into the Agreement. The parties agree that
----------------------------------------------
this Appendix C is an integral part of, and incorporated by reference into, the
Research Collaboration Agreement, dated as of May 22, 1996, between Phytera,
Inc. and Tsumura & Co. As used in this Appendix, the term "Agreement" shall
mean the aforementioned agreement together with all appendices thereto. Each
capitalized term used in this Appendix and not defined in this Appendix shall
have the meaning ascribed to it in the Agreement. Each reference herein to
section numbers other than to those beginning with the letter "C" shall refer to
the applicable section in this Agreement.
_________________ ___________________
Initial (Tsumura) Initial (Phytera)
33
APPENDIX D - EXAMPLES OF TSUMRUA'S MILESTONE OBLIGATIONS
34
Senario 1
---------
[
]*
_________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
35
Senario 2
---------
[
]*
__________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
36
Senario 3
---------
[
]*
___________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
37
AMENDMENT
THIS AMENDMENT TO, THE RESEARCH COLLABORATION AGREEMENT (hereinafter
referred to as the "AMENDMENT") dated as of _____________, ____ 1998, is made
between Phytera, Inc. (hereinafter referred to as "PHYTERA"), a Delaware
corporation having its principal place of business at 000 Xxxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000, XXX, and Tsumura & Co. (hereinafter referred to
as "TSUMURA"), a corporation organized under the laws of Japan and having its
principal place of business at 00-0 Xxxxx-xxx, Xxxxxxx-xx, 000-0000 Xxxxx,
Xxxxx.
WHEREAS, Phytera and Tsumura are parties to the Research Collaboration
Agreement dated as of June 28, 1996 (hereinafter referred to as the "ORIGINAL
AGREEMENT"), pursuant to which Phytera and Tsumura established a research,
development and marketing collaboration to discover and develop compounds with
applications to certain disease targets; and
WHEREAS, Phytera and Tsumura each desire to amend and/or supplement certain
provisions of the Original Agreement.
NOW THEREFORE, each of Phytera and Tsumura hereby agrees that the Original
Agreement shall be amended and/or supplemented as follows:
1. ARTICLE 1.5 OF THE ORIGINAL AGREEMENT SHALL BE AMENDED TO READ AS FOLLOWS:
"EXTRACTS shall mean the plant cell culture extracts based on Phytera's
--------
ExPAND(R) technology provided to Tsumura pursuant to this Agreement which
technology Phytera has filed a patent applications in the United States and
is currently filing patent applications in the United Kingdom and Japan
provided always that, as agreed upon following the Steering Committee
meeting in Worcester, USA, on July 21, 1997, the marine microbial extracts
based on Phytera's proprietary uMARIINE(R) technology may serve as a
substitute for a portion of the above mentioned plant cell culture extracts
(as defined below)."
2. SECTION 2.3.1 OF THE ORIGINAL AGREEMENT SHALL BE AMENDED TO READ AS
FOLLOWS:
"Following completion of Stage 1 and in consideration of Tsumura's payment
of fees specified Section 12.1.1 below, Phytera shall select and deliver to
Tsumura Extracts in accordance with the following schedule:
38
Year 1: [ ]* Extracts
Year 2: [ ]* Extracts
Year 3: [ ]* Extracts
Year 4: [ ]* Extracts
The schedule for Extract delivery in Years 2, 3 and 4 shall be determined
by the Steering Committee."
3. SECTION 2.7 OF THE ORIGINAL AGREEMENT SHALL BE AMENDED TO READ AS FOLLOWS:
"SUPPORT. During the Research Collaboration Period, Phytera shall make
-------
available to Tsumura Support subject to Section 2.11 and as more fully
described in Appendix A. The committed amount of Support for Year 1, Year
2, Year 3 and Year 4, and the fees associated with the same are specified
in Section 12.1.2 and such fees shall be paid in advance by Tsumura. In
Year 2 and Year 3, in addition to the committed amount of Support specified
in Section 12.1.2, Tsumura shall be entitled at no additional charge, to
additional Support in the amount of the accumulated Prior Year's Unused
Support, if any. In addition, during the two (2) year period following
the third anniversary of the Effective Date, Tsumura shall be entitled at
no additional charge, to additional Support in the amount of the
accumulated Prior Year's Unused Support, if any. Except as set forth in
the preceding two sentences, Tsumura shall not be entitled to any refund or
credit in the event the amount of Support provided during any period of
time in response to Tsumura's requests is less than the committed amount of
support specified above for such period. For the purposes of this Section,
the "PRIOR YEAR'S UNUSED SUPPORT" shall mean the lessor of (i) one-half
(1/2) of the committed amount of Support specified in Section 12.1.2 for
the prior year and (ii) the difference between the committed amount of
Support specified in Section 12.1.2 for the prior year and the amount of
Support actually provided by Phytera during the prior year. The amount of
the Prior Year's Unused Support shall be cumulative. The Support fees are
fully inclusive and include the costs of all reagents, supplies and
equipment necessary for Phytera to provide the Support. Phytera may
provide additional Support to Tsumura on an as-available basis in response
to, Tsumura's request for such Support. The fee for such additional
Support shall be calculated based on the full-time equivalent rates set
forth in Section 12.1.2 and include the costs of all reagents, supplies and
equipment. Within thirty (30) days of the end of each quarter, Phytera
shall provide Tsumura with a written report itemizing the amount of Support
provided during such quarter.
__________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
39
Furthermore, in order to assist Phytera's work under this Agreement,
Tsumura shall dispatch [ ]*("[ ]*full-time
equivalents") to the program at Phytera's US facilities in Year 3 and Year
4. Phytera shall provide facilities, equipment, training and supervision
for the above mentioned personnel of Tsumura, and Tsumura shall reimburse
Phytera for the associated overhead costs as defined in Section 12.1.2
herein and Appendix A attached hereto."
4. SECTION 9.2.1 OF THE ORIGINAL AGREEMENT SHALL BE AMENDED TO READ AS
FOLLOWS: -
"FOR CONVENIENCE. Commencing forty-two (42) months following the Effective
---------------
Date, Tsumura shall have the right to terminate this Agreement at any time
by delivering written notice to Phytera at least six (6) months prior to
the effective date of such termination. If Tsumura elects to terminate this
Agreement pursuant to the terms of this Section 9.2.1, then Tsumura shall
remit to Phytera all payments that become due and payable in accordance
with the terms of this Agreement prior to the effective date of such
termination, and each such payment shall be made in accordance with the
applicable payment terms set forth herein. Unless otherwise expressly
indicated by Tsumura, the termination of the Agreement by Tsumura under
this Section 9.2.1 shall not affect any rights and obligations of the
parties under this Agreement with respect to any Extracts delivered to
Tsumura before the termination of this Agreement. Further, pursuant to this
Section 9.2.1, Tsumura may terminate this Agreement for convenience at its
sole discretion with respect to particular one or more Extracts and/or
Compounds. In such case, this Agreement shall be terminated to the extent
that it applies to such particular Extracts and/or Compounds, and shall
remain effective and in full force with respect to other Extracts and
Compounds."
5. SECTION 12.1.1 OF THE ORIGINAL AGREEMENT SHALL BE AMENDED TO READ AS
FOLLOWS:
"EXTRACTS. In consideration of Phytera s agreement to provide the Extracts
--------
to Tsumura under the provisions of this Agreement, Tsumura agrees to pay
Phytera as follows:
Year 1 ([ ]* Extracts) [ ]*
Year 2 ([ ]* Extracts) [ ]*
Year 3 ([ ]* Extracts) [ ]*
Year 4 ([ ]* Extracts) [ ]*
__________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
40
6. SECTION 12.1.2 OF THE ORIGINAL AGREEMENT SHALL BE AMENDED TO READ AS
FOLLOWS:
"SUPPORT. In consideration of Phytera's agreement to provide Support to
-------
Tsumura under the provisions of this Agreement, Tsumura agrees to pay
Phytera for support in the area of [ ]* as follows:
Year 1 ([ ]* full-time equivalent) [ ]*
Year 2 ([ ]* full-time equivalent) [ ]*
Year 3 ([ ]* full-time equivalent) [ ]*
Year 4 ([ ]* full-time equivalent) [ ]*
and Tsumura agrees to pay Phytera for Support in the area of [ ]* as
follows:
Year 1 ([ ]* full-time equivalent) [ ]*
Year 2 ([ ]* full-time equivalent) [ ]*
Year 3 ([ ]* full-time equivalent) [ ]*
Year 4 ([ ]* full-time equivalent) [ ]*
The fees are fully inclusive and include the cost of all reagents,
supplies, and equipment.
The justification for the aforementioned fees which Tsumura has agreed to
pay Phytera are indicated in Appendix E (Support in the area of [ ]*) attached
hereto.
The reference fee for additional support provided by Phytera at Tsumura's
request in Years 1 and 2 shall be [
]* per United States full-time equivalent and [
]* per United Kingdom
full-time equivalent, calculated on a pro-rata bais for actual services
rendered. For Years 3 and 4, the reference fee shall be increased to [
]* per United States full-time
equivalent and [
]*per United Kingdom full-time equivalent or per United States
__________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
41
full-time equivalent engaged in [ ]* calculated on a pro-rata
basis for actual services rendered."
7. APPENDIX A - SUPPORT OF THE ORIGINAL AGREEMENT SHALL BE AMENDED TO READ AS
FOLLOWS:
"Phytera shall provide Tsumura with support in the areas of [
]*. Phytera shall conduct assays in support of the [
]* activities for such Collaboration Assays as indicated in Appendix B
except that Tsumura shall conduct assays in support of the [
]*.
Phytera shall provide the following committed level of support to Tsumura:
Year [ ]* Support [ ]/
[ ]* Support
1 [ ]* FTE [ ]* FTE
2 [ ]* FTE [ ]* FTE
3 [ ]* FTE [ ]* FTE
4 [ ]* FIFE [ ]* FTE
In order to assist Phytera's work under this Agreement, Tsumura shall
dispatch [ ]* ([ ]* full-time equivalents) to
the program at Phytera's US facilities in Year 3 and Year 4. Tsumura shall
be responsible for all travel, accommodation, relocation and subsistence
costs associated with the said full-time equivalents. Phytera shall provide
the above mentioned personnel of Tsumura with laboratory space, appropriate
equipment, supplies and appropriate supervision for an overhead charge to
Tsumura of [ ]* per full-time equivalent in
Year 3. The overhead charge for Year 4 shall be determined by the Steering
Committee prior to the commencement thereof taking into account such
charges incurred in the previous Year 3.
Phytera shall provide additional support to Tsumura on an as-available
basis if so requested by Tsumura. The fees for such additional support
shall be calculated on a pro-rata basis for actual services rendered as
described in Section 12.1.2 of the Agreement".
__________________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
42
8. The following language shall be inserted and attached to the Original
Agreement as Appendix E - Support in the Area of [ ]*:
"For convenience purposes only, the fees for the Support provided by
Phytera to-Tsumura in Year 1 (equivalent to [ ]* United
Kingdom fulltime equivalent) shall be divided in [ ]*
United Kingdom full-time equivalent and each of such installments shall be
applied to the fees charged in Year 2 and Year 3, respectively.
Consequently, the fees to be paid by Tsumura to Phytera in Year 1 shall be
Zero.
The fees to be paid by Tsumura to Phytera in Year 2 are calculated by adding
[ ]* United Kingdom full-time equivalent of Year 1 [
]* to the Year 2's[ ]* United Kingdom full time
equivalent [ ]*.
The fees to be paid by Tsumura to Phytera in Year 3 are calculated by adding
[ ]* United Kingdom full-time equivalent of Year 1 [ ]* to the
[ ]* United Kingdom full-time equivalent or United States full-time
equivalent engaged in [ ]*[
]* of year 1 plus the equivalent of [ ]*
United Kingdom full time equivalent or United States full-time equivalent
engaged in [ ]*[ ]*of Year 1.
In this Amendment, the additional of [ ]* of [ ]* United Kingdom full-
time equivalent or United States full time equivalent engaged in [
] of Year 1 shall mean the percentage increase
determined by the Steering Committee at the Hawaii meeting of February 11,
1998, USA, and which is aimed at adjusting the increase of the associated
costs arising in the course of the collaborative research activities pursuant
to the provisions of Section 12.1.1 of this Agreement.
The fees to be paid by Tsumura to Phytera in Year 4 is [ ]
per United Kingdom full-time equivalent or United States fulltime equivalent
engaged in [ ]*."
___________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
43
9. Capitalized terms utilized and not otherwise defined herein shall have the
meanings ascribed to such terms in the Original Agreement.
10. All of the remaining Sections in the Original Agreement other than the
changes made and agreed to under this Amendment shall remain effective.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Amendment in duplicate, original counterparts as
of the day and year first appearing hereinabove. Each party shall retain one
signed counterpart.
PHYTERA, INC. TSUMURA & CO.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Hachizaemon Kazama
---------------------- ------------------------
Hachizaemon Kazama
Title: President Title: President
------------------- ---------------------
July 14, 1998 June 30, 1998
------------------------- ----------------------------
Date Date
44
APPENDIX E -- SUPPORT IN THE AREA OF [ ]*
"For convenience purposes only, the fees for the Support provided by Phytera to
Tsumura in Year 1 (equivalent to [ ]* United Kingdom full-time equivalent)
shall be divided in [ ]* United Kingdom full-time equivalent and each of
such installments shall be applied to the fees charged in Year 2 and Year 3,
respectively. Consequently, the fees to be paid by Tsumura to Phytera in Year 1
shall be Zero.
The fees to be paid by Tsumura to Phytera in Year 2 are calculated by adding [
]* United Kingdom full-time equivalent of Year 1 [
]* to the Year 2's [ ]* United Kingdom full-time equivalent
[ ]*.
The fees to be paid by Tsumura to Phytera in Year 3 are calculated by adding [
]* United Kingdom full-time equivalent of Year 1 [
]* to the [ ]* United Kingdom full-time equivalent or
United States full-time equivalent engaged in [
]*[
]* of Year 1 plus the equivalent of [ ]* of [ ]* United Kingdom
full-time equivalent or United States full-time equivalent engaged in [
]*[
]* of Year 1. In this Amendment, the additional of [ ]* of [ ]*
United Kingdom full-time equivalent or United States full-time equivalent
engaged in [
]*[
]* of Year 1 shall mean the percentage increase
determined by the Steering Committee at the Hawaii meeting of February 11, 1998,
USA, and which is aimed at adjusting the increase of the associated costs
arising in the course of the collaborative research activities pursuant to the
provisions of Section 12.1.1 of this Agreement.
The fees to be paid by Tsumura to Phytera in Year 4 is [
]* per United Kingdom full-time equivalent or United States
full-time equivalent engaged in [
]*"
___________________
* This portion of the Exhibit has been omitted pursuant to a Request for
Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended.
The complete Exhibit, including the portions for which confidential treatment
has been requested, has been filed separately with the Securities and Exchange
Commission.
45
