Exhibit 10.8
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT. THE NON-PUBLIC
INFORMATION HAS BEEN FILED WITH THE COMMISSION.
LICENSE AGREEMENT
between
Xxxxx XX
X-00000 Xxxxxxxxxx
Germany
- hereinafter referred to as "Bayer" -
and
Memory Pharmaceuticals Corporation
000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
X.X.X.
- hereinafter referred to as "Memory" -
RECITALS
1. Bayer has disclosed and transferred to Memory confidential information
and a sample of Bayer's compound Bay z 4406 under the provisions of a
Secrecy Agreement dated August 6, 1998, as extended by Agreement dated
July 2, 1999 (the "Secrecy Agreement"), and a Confidentiality and
Non-Use Agreement dated July 6, 1999 as extended by Agreement dated
June 30, 2000, and as modified by an Agreement dated May 23, 2000 (the
"Confidentiality Agreement").
2. Memory has evaluated such Bayer compound, the patent rights and know
how related thereto, and has been granted by Bayer an exclusive
evaluation period under an Agreement dated May 23, 2000, amended by a
Letter Agreement dated November 21, 2000.
3. Memory has informed Bayer in writing that it elects to acquire an
exclusive license from Bayer pursuant to the provisions of the
Agreement of May 23, 2000 and its amendment of November 21, 2000.
Now, therefore, in consideration of the mutual set forth in this License
Agreement, the parties hereby agree as follows:
ARTICLE 1 - DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall have the
meanings specified below:
1.1. "Additional Component" shall mean a component which is diagnostically
useable or therapeutically active alone or in a combination which does
not require Compound, and such component does not contain Compound.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
1.2. "Affiliate" shall mean a corporation or other legal entity that
controls, is controlled by, or is under common control with such party.
For purposes of this definition, "control" means the ownership,
directly or indirectly, of more than fifty percent (50%) of the
outstanding equity securities of a corporation which are entitled to
vote in the election of directors or a more than fifty percent (50%)
interest in the net assets or profits of an entity which is not a
corporation.
1.3. "Combination Product(s)" shall mean a Finished Product that includes
the Compound and at least one Additional Component.
1.4. "Compound" shall mean the Bayer compound having the code no. Bay z
4406, which is (+)-3-isopropyl 5-(2-methoxyethyl)
4-(2-chloro-3-cyanophenyl)-2,6-dimethyl-1,4-dihydro-3,
5-pyridinedicarboxylate.
1.5. "Distributor" shall mean any business entity which has the right to
distribute Finished Products within a country.
1.6. "Finished Product" shall mean any and all pharmaceutical preparations
which are in a form ready for use by an end user without further
formulation, processing or chemical transformation, which contain
Compound.
1.7. "Field" shall mean the treatment of human peripheral and central
nervous system related disorders.
1.8. "First Commercial Sale" shall mean the initial transfer of a Finished
Product for value and not for demonstration, testing or promotional
purposes.
1.9. "Know How" shall mean any and all manufacturing information, technical
information, testing and analytic methods, results, data and
specifications or know-how which Bayer owns or has rights to include in
the license grant in Article 2 hereof pertaining to Compound, Finished
Product and Field.
1.10. "IND" shall mean the application for an Investigative New Drug in the
United States or a foreign equivalent thereof.
1.11. "Listed Country" shall mean the United States of America, Japan,
Germany, France, Italy, United Kingdom, Canada, Mexico, Spain, The
Netherlands, Belgium or Luxembourg.
1.12. "Major Country" shall mean the United States of America, Japan,
Germany, France, Italy or the United Kingdom.
1.13. "NDA" shall mean a New Drug Application in the United States to obtain
an approval to market and sell Finished Product, or a foreign
equivalent thereof.
1.14. "Net Sales" shall mean the total gross sales (number of units shipped
times the invoiced price per unit) of Finished Product, or, if
applicable, Combination Product sold by Memory and/or a Sublicensee
and/or a Distributor to Third Parties less certain deductions explained
below, but only to the extent that such deductions are borne by Memory
and/or a Sublicensee and not separately invoiced, and are related to
Finished Product sold under the terms of this Agreement:
[*] CONFIDENTIAL TREATMENT IS REQUESTED
a) Allowances actually granted to Third Party customers such as
ordinary and customary trade discounts, quantity discounts,
cash discounts, rebates (including rebates to social and
welfare systems), and sales commissions but together not more
than [*]% of gross sales. Notwithstanding the foregoing, in
the event that the requested allowances are higher than [*]%
of the gross sales in an individual country, Memory shall be
entitled to deduct from the gross sales more than [*]%, if
Memory produces evidence and informs Bayer respectively in
writing that the sum of the deductions as set forth herein
before is more than [*] %; provided, however, that such
allowances are granted in the ordinary course of business and
consistent with the business practices in the pharmaceutical
industry.
b) Government mandated rebates.
c) Taxes and governmental charges, other than income tax. This
deduction includes import duties, excise taxes, tariffs, use
taxes, etc., which are imposed on Finished Product and borne
by the seller of Finished Product.
d) Credits and/or allowances actually given for rejection,
return or recall of previously sold Finished Product, but not
in excess of the original selling price of the Finished
Product rejected, returned or recalled.
e) Outbound transportation and delivery charges (including
insurance premiums related to transportation and delivery)
prepaid or allowed.
Notwithstanding anything herein to the contrary, the following shall
not be considered a sale of a Finished Product, or, if applicable,
Combination Product under this Agreement: (i) the transfer of a
Finished Product, or, if applicable, Combination Product to a
Sublicensee or a Distributor for sale by the Sublicensee or the
Distributor in a transaction that will be royalty bearing, regardless
of whether there is an internal transfer price associated with the
transfer; or (ii) the transfer of a Finished Product, or, if
applicable, Combination Product to a Third Party, an Affiliate of
Memory or a Sublicensee without consideration or for nominal
consideration to Memory and/or the Sublicensee in connection with the
development or testing of a Finished Product. For purposes of
clarification, in the event of any Net Sales generated by Memory
directly via an unaffiliated wholesaler of Finished Product or, if
applicable, Combination Product and not through a Sublicensee, "Net
Sales" shall mean, and royalties shall be calculated based upon, the
Net Sales of Memory to the wholesalers and not the sales of Finished
Product or, if applicable, Combination Product by the wholesaler to its
customers.
1.15. "Patent Rights" shall mean (a) Bayer's patents and patent applications
as specified in Annex A which is an integral part of this Agreement,
including any patents issuing from such patent applications; (b) any
divisional applications, continuation applications, continuation in
part applications or substitutes, reissues, reexaminations, renewals or
the like related to the patents and patent applications listed in Annex
A; (c) claims of continuation in part applications and patent
applications, and patents issued therefrom, to the extent the claims
are directed to the subject matter specifically described in the patent
rights described in (a) and (b) above and (d) below; and (d) all patent
rights referred to in Art. 2.3 below.
1.16. "Royalty Period" shall mean the calendar quarter, or partial calendar
quarter, commencing with the First Commercial Sale of any Licensed
Product, and each calendar quarter thereafter until the obligation to
pay royalties expires.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
1.17. "Sublicensee" shall mean a Memory Affiliate or a Third Party; provided
that such Affiliate or Third Party has received certain
sublicense rights from Memory as set forth in Art. 2.6.
1.18. "Third Party" shall mean any third party except Memory, a Memory
Affiliate, Bayer or a Bayer Affiliate.
ARTICLE 2 - GRANT OF RIGHTS
2.1. Subject to the terms and conditions set forth herein, Bayer hereby
grants Memory a world-wide, exclusive, royalty-bearing non-transferable
license under Patent Rights and Know How to manufacture, have
manufactured, use and/or have used Compound in order to manufacture,
have manufactured, use, offer for sale, have sold, import, export,
register and/or market Finished Products within the Field.
2.2. Memory acknowledges that its rights under Patent Rights are limited to
those expressly granted herein, and that Memory is expressly prohibited
from selling, transferring or otherwise making available to Third
Parties Compound and/or Finished Products for use outside the Field.
2.3. As far as Bayer owns or controls, at any time, patent rights not
mentioned in Annex A, which claim Compound and/or its use in the Field,
those patent rights shall be regarded as Patent Rights provided that
manufacture sale or use of the Finished Product in the Field would
infringe or violate those patent rights. The patent rights under this
Art. 2.3 shall however not include any patent or patent application of
Bayer claiming specific formulations possibly useful for Compound.
2.4. Except as otherwise provided herein, the right, title and interest in
the Patent Rights are affected by the license pursuant to Art. 2.1
only to the extent as such Patent Rights are claiming Compound and its
use within the Field.
2.5. Bayer hereby grants to Memory an option to acquire a non-exclusive,
world-wide, non-transferable license pursuant to the terms set forth in
this Agreement (i) under Bayer's rights belonging to the patent
families of US-5,707,655 and/or US-5,900,425 in relation to controlled
release formulations disclosed in such patent families and developed by
Bayer for its Nimodipin(R) product, and, if applicable, (ii) under
corresponding Bayer know-how; provided, however, that Memory may
exercise such option and use such rights only for the
manufacture, sale and use of Finished Products within the Field. No
additional consideration shall be payable by Memory to Bayer upon
exercise of such option. The option granted to Memory under this Art.
2.5 will automatically expire, if Memory does not exercise this option
in writing before the end of the first clinical phase II trials during
the development of the Finished Product in the Field.
2.6. Memory shall have the right to grant sublicenses under the licenses and
rights granted by Bayer to Memory under this Art. 2; provided, however,
that Memory shall continue to be responsible for all obligations of
Memory set forth in this License Agreement.
ARTICLE 3 - DEVELOPMENT AND MARKETING
[*] CONFIDENTIAL TREATMENT IS REQUESTED
3.1. In consideration of the rights granted to Memory under this Agreement,
Memory shall use commercially reasonable efforts (i) to develop
(through research, development, marketing and/or sublicensing
activities, either alone or in collaboration with Third Parties)
Finished Products, and (ii) to register and market (either alone and/or
in collaboration with Third Parties) Finished Products in the United
States, Japan and in four countries of the European Union which Memory
shall select from the group consisting of Germany, France, United
Kingdom, Italy and Spain.
3.2. Neither Bayer nor a Bayer Affiliate shall have any obligation to
provide Memory, a Memory Affiliate and/or a Sublicensee with any
service or assistance as to (i) the non-clinical and clinical
development of Compound and Finished Products, and (ii) the
registration and marketing of Finished Products. Memory is solely
responsible, and is hereby authorized by Bayer to contact a Third Party
contractor in order to establish an ongoing supply of Compound which
Memory needs for the non-clinical and clinical development of Finished
Products as well as for marketing purposes. Bayer does not have any
obligation to supply Memory with Compound.
ARTICLE 4 - PAYMENTS, RECORDS AND REPORTS
4.1. In further consideration of the rights granted to Memory under this
Agreement, Memory shall make the following payments to Bayer:
(i) 0.25 Mio US $ (two hundred fifty thousand U.S. Dollars) within
30 (thirty) days following the effective date of this
Agreement;
(ii) 0.75 Mio US $ (seven hundred fifty thousand U.S. Dollars)
within 30 (thirty) days following the first IND approval;
(iii) 1 Mio US $ (one million U.S. Dollars) within 30 (thirty) days
following the start of the first clinical phase II;
(iv) [*] US $ ([*] U.S. Dollars) within 30 (thirty) days following
the [*]; (v) [*] US $ ([*] U.S. Dollars) within 30 (thirty)
days following the [*]; provided that, if the [*], then this
payment shall be due on the date that is the earlier of (a) 6
(six) months from the date of such [*], or (b) thirty (30) days
following the [*]. If the payment described in this paragraph
is made pursuant to (a) of this paragraph, then such payment
shall bear interest from the date that is thirty (30) days
following the [*] through the date of actual payment. Such
interest shall be calculated based on the three (3) month LIBOR
rate in effect on the business day immediately preceding the
start of such thirty (30) day period, as reported in the Wall
Street Journal.
(vi) [*] US $ ([*] U.S. Dollars) within 60 (sixty) days following
the [*]; provided that, if the [*], then this payment shall be
due on the date that is the earlier of (a) 6 (six) months from
the date of such [*], or (b) sixty (60) days following the [*].
If the payment described in this paragraph is made pursuant to
(a) of this paragraph, then such payment shall bear interest
from the date that is sixty (60) days following the [*] through
the date of actual payment. Such interests shall be calculated
based on the three (3) month LIBOR rate in effect on the
business day immediately preceding the start of such sixty (60)
day period, as reported in the Wall Street Journal.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
(vii) a [*]% ([*] percent) royalty on the worldwide Net Sales
proceeds received by Memory's Sublicensees, irrespective of the
royalty rate(s) actually to be paid by Sublicensee(s) to
Memory, if any;
(viii) in the event that the worldwide royalties received by Memory
from any of its Sublicensee(s) exceeds [*]% ([*] percent), then
Memory will pay to Bayer an additional royalty of [*]% ([*]
percent) of such amounts in excess of [*]% ([*] percent)
[example: if royalties received from a Sublicensee are 12%,
royalties to be paid to Bayer would be [*]% plus [*]% of the
next [*]% ([*]%), resulting in a total royalty rate of [*]%].
4.2. In the event that Memory shall generate in any calendar year Net Sales
of Finished Product directly or via a Distributor and not through a
Sublicensee, Memory shall, in addition to the payments specified under
Art. 4.1, pay to Bayer royalties based on such annual Net Sales as
follows:
- a [*] % ([*] percent) royalty on the worldwide Net Sales during
such calendar year generated by Memory, if such Net Sales do
not exceed [*] US $ ([*] US Dollars);
- a [*]% ([*] percent) royalty on the entire worldwide Net Sales
generated during such calendar year by Memory, if such Net
Sales lie in a range from more than [*] US $ ([*] US Dollars)
to [*] US $ ([*] US Dollars);
- a [*] % ([*] percent) royalty on the entire worldwide Net Sales
generated during such calendar year by Memory, if such Net
Sales lie in a range from more than [*] US $ ([*] US Dollars)
to [*] US $ ([*] US Dollars);
- a [*] % ([*] percent) royalty on the entire worldwide Net Sales
generated during such calendar year by Memory, if such Net
Sales lie in a range from more than [*] US $ ([*] US Dollars)
to [*] US $ ([*] US Dollars); or
- a [*] % ([*] percent) royalty on the entire worldwide Net Sales
generated by Memory, if such Net Sales exceed [*] US $ ([*] US
Dollars).
4.3. Notwithstanding any other provision herein, in the event that Bayer
does not have any Patent Rights affording patent protection relating to
the manufacture, sale and use of Compound in a Listed Country, the
royalties payable by Memory to Bayer with respect to Net Sales in such
Listed Country shall be as follows:
(i) if Memory generates any Net Sales directly or via a Distributor
in one of the Listed Countries in which Bayer does not have any
Patent Rights affording such patent protection, then the
royalties payable by Memory to Bayer with respect to Net Sales
in this Listed Country shall be reduced to [*]% ([*] percent)
of the royalty rates defined in Art. 4.2 of this Agreement;
(ii) if Net Sales are generated by any of Memory's Sublicensee(s) in
one of the Listed Countries in which Bayer does not have any
Patent Rights affording such patent protection, then the
royalties payable by Memory to Bayer with respect to Net Sales
in this Listed Country shall be reduced to [*]% ([*] percent);
the royalty payments to be made by Memory according to Art. 4.1
(viii) of this Agreement, i.e. the royalties to be paid by
Memory to Bayer if the royalties received by Memory from any of
its
[*] CONFIDENTIAL TREATMENT IS REQUESTED
Sublicensee(s) exceed [*]%, are however not affected by the
provisions of this Art. 4.3 of this Agreement;
(iii) if Bayer does not have any Patent Right affording such patent
protection in a country which does not belong to the Listed
Countries, then the royalty rates for that country shall not be
reduced.
4.4. No multiple royalties shall be payable because any Finished Product, is
covered by more than one Patent Right.
4.5. In the event that a Combination Product is sold, then Net Sales of the
Combination Product shall be calculated using one of the following
methods:
(a) By multiplying the Net Sales of the Combination Product during
the applicable royalty accounting period ("accounting period")
by a fraction, the numerator of which is the average gross
selling price in the Major Countries of the Finished Product,
and the denominator of which is the average gross selling price
in the Major Countries of the Combination Product, or
(b) In the event that no such separate sales are made of the
Finished Product or the Combination Product in the Major
Countries during the applicable accounting period, Net Sales
for purposes of determining royalties payable hereunder shall
be subject of discussions between Memory and Bayer in good
faith in order to identify a fair and reasonable arrangement.
If the parties are unable to resolve a dispute arising from
their discussion under this Art. 4.5(b) within 45 days, each
party shall have the right to initiate the Dispute Resolution
Procedure as set forth in Article. 8.8.
4.6. Memory agrees to pay Bayer, concurrently with the delivery of the
report set forth in Article 4.8, royalties on aggregate Net Sales
during the prior Royalty Period at the royalty rates specified in the
Articles 4.1 - 4.5.
4.7. On each anniversary of the effective date of this Agreement, Memory
shall deliver to Bayer a report containing the following information
with respect to each Sublicensee to whom Memory has transferred rights
during, the period since the last such report or, in the case of the
first such period since the effective date of this Agreement:
a) identification of the Sublicensee and the kind of rights
granted to it;
b) the financial terms and conditions of the Sublicense Agreement
so far relevant to the provisions of the Articles 4.1 - 4.3.
4.8. Prior to the First Commercial Sale of a Finished Product, Memory agrees
to provide biannual summary reports on the status of its research and
development activities covered by the license granted herein.
Commencing with the First Commercial Sale of a Finished Product in any
country, within sixty (60) days after the conclusion of each Royalty
Period Memory shall deliver to Bayer a report containing the following
information:
a) gross sales of Finished Products, in each country of sale, made
by or on behalf of Memory and/or its Sublicensees during the
applicable Royalty Period;
[*] CONFIDENTIAL TREATMENT IS REQUESTED
b) calculation of Net Sales for the applicable Royalty Period in
each country of sale, together with the exchange rates used for
conversion; and
c) calculation of the amount payable to Bayer for the applicable
Royalty Period.
If no royalties or other payments are due to Bayer for any Royalty
Period, the report shall so state. Concurrent with these reports,
Memory shall remit to Bayer any payment due for the applicable Royalty
Period. The method of payment shall be by check or wire transfer as
directed from time to time by Bayer. All amounts payable to Bayer under
this Article 4 will first be calculated in the currency of sale and
then converted into U.S. dollars in accordance with Art. 4.9, and such
amounts shall be paid without deduction of any withholding taxes,
value-added taxes, or other charges applicable to such payments. All
reports provided to Bayer hereunder shall be maintained in confidence
by Bayer.
4.9. All payments due under this Agreement shall be payable in United States
dollars. Conversion of foreign currency ("Other Currency") to U.S.
dollars shall be made at the conversion rate existing in the United
States (as reported in the Wall Street Journal) on the last working day
of the applicable calendar quarter. Such payments shall be without
deduction of exchange, collection, or other charges. In the event that
any Other Currency shall, at the time the applicable payment by Memory
to Bayer is due, not be convertible into U.S. dollars and freely
transferable by reason of any governmental regulation or any
moratorium, embargo, banking restriction or other restriction, the
obligation of Memory to make payment of such payment shall be suspended
until such time a such Other Currency shall be convertible into U.S.
dollars and freely transferable to the United States.
4.10. Memory shall maintain, and shall ensure that any Sublicensee shall
maintain, complete and accurate records of Finished Products made,
used, or sold under this Agreement and any amounts payable to Bayer in
relation to such Finished Products, which records shall contain
sufficient information to permit Bayer to confirm the accuracy of any
reports delivered to Bayer. Memory and its Sublicensees shall retain
such records relating to a given Royalty Period for at least five (5)
years after the conclusion of that Royalty Period, during which time
Bayer shall have the right, at its expense, to cause an independent
certified public accountant (who shall be subject to confidentiality
obligations) to inspect such records during normal business hours for
the sole purpose of verifying any reports and payments delivered under
this Agreement; provided, however, that not more than one such audit
shall be permitted during any twelve (12) month period. Such accountant
shall not disclose to Bayer any information other than information
relating to accuracy of reports and payments delivered under this
Agreement and shall provide Memory with a copy of any report given to
Bayer. The parties shall reconcile any underpayment or overpayment
within thirty (30) days after the accountant delivers the results of
the audit. In the event that any audit performed under this Article
reveals an underpayment in such Royalty Period in excess of the greater
of $[*] or [*] percent ([*] %) of the amount actually paid, Memory
shall bear the full cost of such audit.
4.11. Any payments by Memory that are not paid on or before the date such
payments are due under this Agreement shall bear interest at [*]
percentage points above the base prime rate of interest most recently
reported by The Wall Street Journal, calculated based on the number of
days that payment is delinquent.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
[*] CONFIDENTIAL TREATMENT IS REQUESTED
5.1. Each party represents and warrants 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 fully perform
its obligations hereunder, and that the performance of such obligations
will not conflict with its charter documents or any agreements,
contracts, or other arrangements to which it is a party.
5.2. Bayer represents and warrants to Memory that, as of the effective date
of this Agreement, it possesses the exclusive right, title, and
interest in and to the Patent Rights and that it has the full legal
right and power to enter into the obligations and grant the rights and
licenses set forth in this Agreement. Bayer shall be responsible for
and shall control the prosecution, grant and maintenance of all Patent
Rights and shall, at Bayer's cost and expense, use reasonable efforts
in order to prosecute and maintain such Patent Rights in good faith
consistent with its customary patent policy and its reasonable business
judgment, and shall in good faith consider the interests of Memory in
so doing. Bayer will, upon request of Memory, provide Memory with
information concerning the status of Patent Rights. In the event that
Bayer recognizes that a patent protection in relation to a patent
application mentioned in Annex A cannot be obtained, or that a granted
patent is becoming nullified prior to its expiration, or that another
event happens which might have an influence on the Patent Rights, Bayer
shall inform Memory in writing without undue delay in reasonable time
in advance of the event. If Bayer elects not to (i) file foreign or PCT
applications claiming priority to a pending U.S. patent application
within the one-year statutory period; (ii) continue prosecution of a
patent application; or (iii) maintain any Patent Rights, Bayer shall so
notify Memory in sufficient time for Memory to assume the filing,
prosecution and/or maintenance of such application or patent in Bayer's
name at Memory's expense; and thereafter Memory shall have the right
(but not the obligation), at its expense and discretion, to file,
prosecute or maintain any such applications or patents. Bayer agrees to
execute, and agrees to use reasonable efforts to ensure that its
employees shall execute, all documents necessary or useful for Memory
to file, prosecute and/or cause the issuance of such applications.
Memory shall have no further royalty or other obligations under this
Agreement with respect to such patents or applications.
5.3. Bayer represents, warrants and covenants that (i) neither Bayer nor a
Bayer Affiliate will manufacture, use, sell, have sold, import, export,
develop, register or market the Compound, or any product containing
Compound as its active ingredient, or license or otherwise permit any
Third Party to do any of the foregoing, in any case whether within or
outside the Field, during the term of this Agreement; and (ii) at the
effective date of this Agreement, to Bayer's actual knowledge, there
are no claims or demands of any person, firm, corporation or entity
pertaining to Patent Rights, and no proceedings have been instituted or
are pending or are threatened which challenge the right of Bayer to, or
involve, the Patent Rights.
5.4 Nothing in this Agreement shall be construed as:
a) a warranty or representation by Bayer as to the validity or
scope of any patent included within the Patent Rights;
b) a warranty or representation that the exploitation of the
Patent Rights or the manufacture, use or sale of compound
and/or Finished Products is or will be free from infringement
of patents of third parties, or is or will be technically
and/or economically feasible or useful;
c) an obligation of either party to bring or prosecute actions or
suits against Third Parties for infringement;
[*] CONFIDENTIAL TREATMENT IS REQUESTED
d) creating any agency, partnership, joint venture or similar
relationship between Bayer and Memory; or
e) conferring by implication, estoppel or otherwise any license,
immunity or right under any patent of Bayer other than those
specified in Article 2 of this Agreement.
5.4. a) Each party promptly shall advise the other party of any
possible infringement of any of the Patent Rights pertaining to
manufacture, sale and/or use of Compound by a Third Party of
which such party becomes aware, and such party shall supply the
other party with any evidence available pertaining to the
possible infringement.
Memory shall have the first right (but not the obligation) to
defend the Patent Rights with respect to the manufacture, sale
and/or use rights for Compound against infringement or
interference by any Third Party, in its own name and/or the
name of Bayer, at Memory's own expense, including the bringing
of any legal action for infringement or the defending of any
counterclaim of invalidity or action of a Third Party for
declaratory judgment of non-infringement or interference.
Memory may settle any such actions, solely at its own expense
and through counsel of its selection; provided, however, that
Bayer shall be entitled, in each such instance, to participate
through counsel of its own selection, at its own expense, and
any settlement that is reasonably likely to have an adverse
effect on the manufacture, sale and/or use rights for Compound
included in the Patent Rights shall not be entered into without
Bayer's prior written consent (which consent shall not be
unreasonably withheld or delayed). Bayer shall provide
reasonable assistance to Memory, as requested, and Memory shall
reimburse Bayer for its reasonable out-of-pocket expenses in
connection with such requested assistance. Memory shall be
entitled to retain any recovery obtained as a result of such
action, whether by judgment, award, decree or settlement. In
the event that Memory fails to initiate and prosecute or
participate in such legal action within one hundred twenty
(120) days, Bayer shall have the right to initiate legal
action, at its own expense, to uphold the Patents Rights
against Third Parties. Memory shall provide reasonable
assistance to Bayer as requested, and Bayer shall reimburse
Memory for its reasonable out-of-pocket expenses in-connection
with any such requested assistance. Bayer may settle any such
actions, solely at its own expense and through counsel of its
selection; provided, however, that Memory shall be entitled, in
each such instance, to participate through counsel of its own
selection, at its own expense, and any settlement that is
reasonably likely to have an adverse effect on the manufacture,
sale and/or use rights for Compound included in the Patent
Rights shall not be entered without Memory's prior written
consent (which consent shall not be unreasonably withheld or
delayed). Memory shall provide reasonable assistance to Bayer
as requested, and Bayer shall reimburse Memory for its
reasonable out-of-pocket expenses in connection with any such
requested assistance. Bayer shall be entitled to retain any
recovery obtained as a result of such action, whether by
judgment, award, decree or settlement.
b) In any infringement suit which either party may institute to
enforce the Patent Rights pertaining to the manufacture, sale
and/or use rights for Compound, or in a suit for patent
infringement which is brought by a Third Party against Memory,
which Memory is required to defend, the other party hereto
shall at the request and the expense of the party initiating or
defending such suit, cooperate in all reasonable respects and,
to the extent reasonably possible, have its employees testify
when requested and make available relevant records, papers,
information, samples, specimens and the like.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
ARTICLE 6 - INDEMNIFICATION
6.1. Memory shall indemnify, defend, and hold harmless Bayer and its
directors, officers, employees, managers, agents and representatives
and their respective successors, heirs and assigns against any
liability, damage, loss, or expense (including reasonable attorneys'
fees and expenses) (collectively, "Losses") incurred by or imposed upon
the foregoing indemnitees or any one of them in connection with any
claims, suits, actions, demands, or judgments ("Claims") (i) concerning
Compound, Finished Product, Combination Product, process or service
that is made, used, sold or provided by Memory pursuant to any right or
license granted under this Agreement and/or (ii) relating to or arising
from any breach by Memory of any representation, warranty or covenant
made by it in this Agreement.
6.2. Bayer shall indemnify, defend and hold harmless Memory and its
respective directors, officers, employees, managers, agents and
representatives, and their respective successors, heirs and assigns,
from and against any and all Losses incurred by or imposed upon the
foregoing indemnitees or any of them in connection with any Claims
relating to or arising from any breach by Bayer of any representation,
warranty or covenant made by it in this Agreement.
6.3. Any person or entity seeking indemnification under this Article 6
(collectively, the "Indemnified Parties") shall promptly give notice to
the party required to provide indemnification hereunder (the
"Indemnifying Party") with respect to any Claims as to which it asserts
a right to indemnification, and within thirty (30) days thereafter,
further notify Indemnifying Party of the details of such Claim and the
amount thereof; provided, however, that the failure to give such
notification shall not relieve the Indemnifying Party from any
liability that it may have pursuant to the provisions of this Article 6
as long as the failure to give such notice within such time is not
prejudicial to the Indemnifying Party. Notice to the Indemnifying Party
for the purpose of this Article 6 shall include the filing of the
service upon the Indemnifying Party of any legal action or any other
form of actual notice. Bayer or Memory, as the case may be, may set off
the amount of any Claim or Claims in respect of which such Indemnified
Parties are entitled to indemnification hereunder against amounts
otherwise due to the Memory or Bayer, as the case may be, hereunder. If
the Indemnifying Party does not promptly and to the Indemnified
Parties' satisfaction assume the defense of any Claim, the Indemnified
Parties may do so at the Indemnifying Party's cost and expense. The
Indemnifying Party may not compromise or settle any Claim without the
prior written consent of the Indemnified Parties.
ARTICLE 7 - TERM AND TERMINATION
7.1. This Agreement shall commence upon being signed by both parties (the
"Effective Date") and shall remain in effect until the expiration of
the last to expire of the Patent Rights, unless earlier terminated as
provided in this Article. The term for payment of royalties for each
Finished Product and, if applicable, for each Combination Product shall
commence with the First Commercial Sale and shall end on a country by
country basis upon either (i) the date on which the last Patent Right
in such country expires, or (ii) ten (10) years after the First
Commercial Sale of the Finished Product and, if applicable, Combination
Product in such country, whichever is longer.
7.2. In the event that Memory determines that it has a material scientific
and/or technical problem relating to the development and/or regulatory
approval of Compound or Finished Product in the
[*] CONFIDENTIAL TREATMENT IS REQUESTED
Field, or a material economic and/or business problem relating to the
development and/or regulatory approval and/or marketing of Compound or
Finished Product in the Field, Memory may terminate this Agreement by
giving 30 (thirty) days prior written notice thereof to Bayer, setting
forth the specific reason(s) for termination in detail. Bayer will
evaluate these reasons in good faith and in case that Bayer according
to its sole decision does not accept these reasons, it shall so notify
Memory in writing within forty five (45) days of its receipt of
Memory's notice and Memory and Bayer shall then enter into the Dispute
Resolution Procedure in accordance with the provisions of Art. 8.8;
provided, however, that Memory shall not be obligated to enter into any
arbitration. In the event that this Dispute Resolution Procedure fails
Memory may terminate this Agreement immediately.
7.3. In the event that Memory fails to make timely payment of any amounts
due to Bayer under this Agreement Bayer may terminate this Agreement
upon thirty (30) days written notice to Memory, unless Memory pays all
past-due amounts prior to the expiration of such thirty (30)-day notice
period.
7.4. In the event that either party commits a material breach of any of its
obligations under this Agreement, other than that stated in Art. 7.3,
and such party fails to remedy that breach within ninety (90) days
after receiving written notice thereof from the other party, that other
party may immediately terminate this Agreement upon written notice to
the breaching party.
7.5. Upon expiration of this Agreement pursuant to Art. 7.1, or upon
termination of this Agreement by Memory pursuant to Art. 7.4, Memory
shall have a fully paid up worldwide license under the terms set forth
in Article 2 with respect to Memory's activities as to Compound and/or
Finished Product subsequent to the date of expiration or any such
termination.
7.6. Upon termination of this Agreement by Memory pursuant to Art. 7.2, all
rights and licenses granted to Memory by Bayer under this Agreement
shall terminate immediately. If Bayer is interested to proceed with the
development and/or marketing of Finished Product, and to use the data
and results obtained by Memory during the development, and/or the NDA
approvals of Memory, the parties shall negotiate reasonable terms and
conditions under which Bayer may use Memory's data and results and/or
NDA approvals.
7.7. Upon termination of this Agreement by Bayer pursuant to Art. 7.3 or
Art. 7.4, all rights and licenses granted to Memory by Bayer under this
Agreement shall terminate immediately. If Bayer is interested to
proceed with the development and/or marketing of Finished Product,
Memory shall disclose to Bayer all data and results obtained by Memory
during the development, and shall further transfer free of charge the
right, title and interest in all such data and results, including
inventions, to Bayer. If applicable, Memory shall also assign to Bayer
its NDA approvals for Finished Products in all countries free of
charge.
7.8. Memory agrees that, in the event that this Agreement is terminated
pursuant to the terms, hereof, Memory shall so notify each Sublicensee
within twenty (20) days of such termination.
7.9. The milestones payments and the royalty payments to be made by Memory
under Art. 4 shall not be refunded following the expiration or
termination of this Agreement. Any milestone payment and/or royalty
payment shall however not become due if notice of termination was given
by the party entitled to do so prior to the due date of any such
payment.
7.10. The expiration or termination of this Agreement for any reason
whatsoever shall be without prejudice to any obligations or rights on
the part of either party which have accrued prior to such
[*] CONFIDENTIAL TREATMENT IS REQUESTED
termination, and shall not affect or prejudice any provision, of this
Agreement which is expressly or by implication provided to come into
effect on, or continue in effect after such termination.
7.11. Unless otherwise expressly provided herein, upon expiration or
termination of this Agreement for any reason whatsoever, neither party
shall be entitled to claim indemnification or compensation on any
ground whatsoever, including but not limited to loss of investment,
loss of profit, business goodwill etc. with respect to such expiration
or termination to the exclusion of damages caused by willful misconduct
or gross negligence of a party hereto.
7.12. Pending the conclusion of any Dispute Resolution Procedure or
arbitration procedure pursuant to the terms hereof, the parties shall
continue to perform their obligations hereunder to the extent not in
dispute and no default hereunder shall be deemed to occur until such
decision is rendered (whereupon any party determined to be in default
hereunder shall have the benefit of any applicable grace and/or cure
periods).
ARTICLE 8 - MISCELLANEOUS
8.1. All notices, requests, demands and other communications required or
permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized international overnight courier,
confirmed facsimile transmission, or registered or certified mail,
return receipt requested, postage prepaid to the following addresses or
facsimile numbers:
If to Memory: If to Bayer:
Memory Pharmaceuticals Corp. Xxxxx XX
100 Philips Parkway X-00000 Xxxxxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000 / U.S.A. Germany
Attention: Chief Executive Officer International Cooperation
and Licensing
Building: Q 30
(++49)-214-30 64840
Facsimile: (000) 000-0000
Either party may change its designated address and facsimile number by
notice to the other party in the manner provided in this Section.
8.2. This Agreement shall be governed by and construed in accordance with
the laws of the Federal Republic of Germany.
8.3. This Agreement may not be assigned by either party without the prior
written consent of the other party, except that either party may assign
this Agreement to any of its Affiliates or to a successor in connection
with the merger, consolidation, or sale of all or substantially all of
its assets or that portion of its business pertaining to the subject
matter of this Agreement, with prompt written notice to the other party
of any such assignment. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective lawful successors
and assigns.
[*] CONFIDENTIAL TREATMENT IS REQUESTED
8.4. Nothing in this Agreement shall be construed so as to require the
commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any statute, law,
ordinance or treaty, the latter shall prevail, but in such event the
affected provisions of the Agreement shall be conformed and limited
only to the extent necessary to bring it within the applicable legal
requirements.
8.5. This Agreement may be amended, supplemented, or otherwise modified only
by means of a written instrument signed by both parties. Any waiver of
any rights or failure to act in a specific instance shall relate, only
to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not
similar.
8.6. Neither party shall be responsible to the other for any failure of
delay in performing any of its obligations under this Agreement or for
other non-performance hereof if such delay or non-performance is caused
by any circumstances unavoidable or beyond the reasonable control of a
party such as, but not limited to, strike, stoppage of labor, lockout
or other labor trouble, fire, flood, accident, act of God or of
government or of the public enemy of a Party ("Force Majeure").
However, the party affected by such Force Majeure shall use its best
reasonable efforts to avoid, remove or remedy such circumstances.
Either party temporarily excused from performance hereunder by such
circumstances shall resume performance with utmost dispatch when such
circumstances are removed or remedied. Either party claiming Force
Majeure as an excuse for delay in performance shall give the other
party written notice thereof without undue delay as a condition of its
right to invoke Force Majeure.
8.7. The provisions of the Secrecy Agreement and the Confidentiality
Agreement are not affected or modified by this Agreement and shall
remain unchanged and in force. Notwithstanding the foregoing, the
parties acknowledge and agree that Memory may contact third party
contractors in order to establish an ongoing supply of the Compound or
for other commercial purposes. In connection therewith, Memory may
disclose Bayer's confidential information to such third party
contractors for their use in connection therewith. As far as Memory is
entitled to grant certain rights and licenses to its Affiliates and
Third Parties under this Agreement, Memory may disclose Bayer's
confidential information on a need to know basis to such Affiliates and
Third Parties. Such Affiliates and Third Parties, including third party
contractors, will however in any case in advance be bound to terms as
stringent as provided under the Confidentiality Agreement.
8.8. The parties recognise that disputes as to certain matters may from time
to time arise during the term of this Agreement which relate to either
party's rights and/or obligations hereunder. It is the objective of the
parties to establish a procedure at the level of their executive
officers (the "Dispute Resolution Procedure") to facilitate the
resolution of disputes arising under this Agreement in an expedient
manner by co-operation. To accomplish this objective, the parties agree
to follow the procedure set forth herein, if and when the parties are
unable to resolve a dispute within forty-five (45) days of being
requested by a party to do so. The establishment of the Dispute
Resolution Procedure shall not be used to override any right
specifically given to a party, to take action or have final
decision-making authority on any topic.
If the parties are unable to resolve a dispute within forty-five (45)
days of being requested by a Party to do so, either party may initiate
the Dispute Resolution Procedure by written notice to the other. The
respective executive officers designated below or their successors,
shall then attempt to resolve the dispute by good faith negotiations
within fifteen (15) days after such notice is received. Said designated
officers are as follows:
[*] CONFIDENTIAL TREATMENT IS REQUESTED
For Bayer: Head of Pharmaceuticals Business Group
For Memory: Chief Executive Officer
In the event that the designated executive officers are not able to
resolve a dispute in accordance with the Dispute Resolution Procedure
as set forth hereunder, either party may at any time after such fifteen
(15) day period proceed with arbitration as provided hereinafter.
8.9. All disputes arising in connection with this Agreement shall be finally
settled under the rules of conciliation and arbitration of the
International Chamber of Commerce by 3 (three) arbitrators appointed in
accordance with said rules. The arbitration shall be held in the
English Language. The arbitrators shall determine which party, or the
extent to which each party, shall bear the costs and expenses of such
arbitration. The place of arbitration shall be Paris, France. However,
arbitration may only be requested for by any party following a period
of thirty (30) days after the Dispute Resolution Procedure pursuant to
Art. 8.8 has failed. Within this period of thirty (30) days any party
may file a request for Conciliation to the Secretariat of the
International Court of Arbitration of the International Chamber of
Commerce to provide the possibility of settling such dispute in a
Conciliation under the rules of conciliation of the International
Chamber of Commerce. The other party is not obliged to accept such
conciliation. The outcome of the Conciliation is not binding for any
party and does not exclude any party from entering into an arbitration.
8.10. In the event that any provision of this Agreement shall, for any
reason, be held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other provision
hereof, and the parties shall negotiate in good faith to modify the
Agreement to preserve (to the extent possible) their original intent.
8.11. This Agreement constitutes the entire Agreement between the parties
with respect to the subject matter hereof and supersedes all prior
agreements or understandings between the parties relating to the
subject matter hereof.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the Effective Date.
Montvale, New Jersey
Date: June 7, 2001
Memory Pharmaceuticals Corporation
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------ ----------------------
Xxxxxx X. Xxxxxxx
Chief Financial Officer
Leverkusen, Germany
Date: June 13, 2001
Xxxxx XX
/s/ Xx. Xxxxxx /s/ Xx. Xxxxxx
------------------------------------------ ----------------------
Xx. Xxxxxx Xx. Xxxxxx
(International Cooperations and Licensing) (Patents and Licensing)
[*] CONFIDENTIAL TREATMENT IS REQUESTED
