EXHIBIT 4.38
------------
Purchase Agreement
------------------
Purchase Agreement (the "Agreement"), effective as of November 28,
2001, by and between Scion Pharmaceuticals, Inc., a Delaware corporation with a
principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ("Scion"), CeNeS Pharmaceuticals, Inc., a Delaware
corporation with its registered office at The Corporation Trust Company,
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ("CeNeS"),
and CeNeS Pharmaceuticals plc, a company formed under the laws of Scotland with
a principal place of business at Compass House, Vision Park, ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ("CeNeS plc"). Scion and CeNeS are
collectively referred to as the "Parties".
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound, Scion, CeNeS,
and CeNeS plc agree as follows.
Section 1. Purchase; License and Assumption.
---------------------------------
(a) Purchased Assets and SBIR Grant. At the Closing and for the
consideration set forth in Section 2, below:
(i) Upon the terms and subject to the conditions set forth
herein, Scion agrees to purchase and CeNeS agrees to sell all small
organic molecules in CeNeS' compound library whether or not the same
are reduced to practice (including but not limited to those compounds
identified on Schedule A attached to this Agreement, in whatever
quantities held by CeNeS, and including but not limited to all
compounds encompassed by the Purchased Compounds Intellectual Property
Rights, as defined below) (the "Purchased Compounds") and all
Intellectual Property Rights relating to or arising from such
compounds, including but not limited to all Intellectual Property
Rights associated with NMDA and Sigma receptors, and Na and Ca ion
channels, and specifically including but not limited to the tangible
embodiments of the Intellectual Property Rights identified on Schedule
B attached to this Agreement (the "Purchased Compounds Intellectual
Property Rights"); provided, however, that the Purchased Compounds
shall not include N-(3-methylthiophenyl)-N-methyl-N'-(2-chloro-5
methylthiophenyl) guanidine and its salts ("CNS 5161"), and
N-(m-ethylphenyl)-N-methyl-N'-(1-naphthyl) guanidine and its salts
("Aptiganel") or, for the avoidance of doubt, any compounds owned by
affiliates of CeNeS identified on Schedule J attached to this Agreement
(the "Excluded Compounds"); and provided further that the Purchased
Compounds Intellectual Property Rights shall include lab notebooks
containing any small organic molecules in CeNeS' compound library (to
the extent they relate to the Purchased Compounds and the Purchased
Compounds Intellectual Property Rights), and CeNeS plc shall retain, at
CeNeS' expense (to the extent they relate to the Purchased Compounds
Intellectual Property Rights), such notebooks in the greater Boston
area for inspection and duplication (at Scion's expense) promptly upon
the request of Scion;
(ii) Upon the terms and subject to the conditions set forth
herein, to the extent permitted by the National Institutes of Health
(the "NIH") after commercially reasonable effort on the part of Scion,
Scion will assume the remainder of a certain Small Business Innovation
Research grant from the NIH for the Kv1.1 project for Symptomatic
Treatment of Peripheral Neuropathies (the "SBIR Grant");
(iii) Upon the terms and subject to the conditions set forth
herein, Scion agrees to purchase the equipment identified on Schedule C
attached to this Agreement (the "SBIR Equipment") and all Intellectual
Property Rights arising from the SBIR Grant (the "SBIR Intellectual
Property Rights") subject only to the funding agreement pursuant to
which the SBIR Grant is provided (the "Grant Agreement") and any rights
held by the United States Government under the Grant Agreement or the
Patent Rights In Inventions Made With Federal Assistance Act, 35 U.S.C.
▇▇.▇▇. 200 to 212 ("▇▇▇▇-▇▇▇▇ Act"); and
(iv) Scion agrees to purchase, and CeNeS agrees to sell, the
nuclear magnetic resonance spectroscopy equipment identified on
Schedule I to this Agreement (the "NMR Equipment").
(b) Limited Assumption of Liabilities. The Parties agree that Scion
shall assume no Liabilities of CeNeS other than the following Liabilities, which
upon the Closing, shall be assumed by Scion (i) those Liabilities identified on
Schedule E attached to this Agreement; (ii) Liabilities to the United States
Government under the Grant Agreement or under the ▇▇▇▇-▇▇▇▇ Act with respect to
the SBIR Intellectual Property Rights; and (iii) Liabilities with respect to
patent filing and maintenance costs on the CeNeS Intellectual Property Rights
(other than the Patents Licensed to Scion and the patent embodiments of the
University Licensed Intellectual Property Rights) arising after the date of this
Agreement (the "Assumed Liabilities"). The Parties further agree that Scion
shall have no Liability (and CeNeS shall satisfy all Liabilities) for patent
costs and expenses (including patent filing and maintenance costs) arising or
due prior to the date of this Agreement. For the purpose of this Agreement, the
term "Liability" (and the plural, "Liabilities") means any liability (whether
known or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, or due or to become due).
(c) Exclusive License. At the Closing, CeNeS shall grant a worldwide,
exclusive (including as to CeNeS), perpetual, fully paid and royalty-free
license and right (the "License Grant to Scion") to the patents set forth on
Schedule K-1 to this Agreement (the "Patents Licensed to Scion"), and all
Intellectual Property Rights arising therefrom (hereafter, the "Intellectual
Property Rights Arising from the Patents Licensed to Scion"), for all fields of
use except for those required for the use, practice and manufacture of CNS 5161
and Aptiganel (the "Scion Field of Use"). For the purpose of this Agreement, the
Patents Licensed to Scion shall include all existing patents and patent
applications set forth on Schedule K-1 and all patent applications hereafter
filed which include the subject matter of such patents in the Scion Field of
Use, including any continuation, continuation-in-part, division, provisional or
any substitute applications, any patent issued with respect to any such patent
applications, any reissue, reexamination, renewal or extension (including any
supplementary protection certificate) of any such patent, and any confirmation
patent or registration patent or patent of addition based on any such patent,
and all foreign counterparts of any of the foregoing.
(d) Sublicenses.
2
(i) At the Closing, CeNeS shall grant to Scion a worldwide,
exclusive (including as to CeNeS), perpetual, fully paid and
royalty-free sublicense and grant of all rights under the Virginia
Commonwealth Agreement in the Scion Field of Use (the "Virginia
Commonwealth Sublicense"). CeNeS agrees to use its best efforts (which
shall not be construed to require payment of any compensation to
Virginia Commonwealth) to promptly assign the Virginia Commonwealth
Agreement to Scion (limited to the Scion Field of Use only) (the
"Virginia Commonwealth Assignment").
(ii) At the Closing, CeNeS shall grant to Scion a worldwide,
exclusive (including as to CeNeS), perpetual, fully paid and
royalty-free sublicense and grant of all rights under the Oregon
Agreement in the Scion Field of Use (the "Oregon Sublicense").
(e) Certain Definitions.
(i) For the purposes of this Agreement, the term "Intellectual
Property Rights" means intellectual property rights arising from or in
respect of the following: (A) all patents, patent applications,
invention and patent disclosures and invention registrations
(including, but not limited to, all divisionals, renewals, reissues,
continuations-in-part, and continuations thereof); (B) all inventions
and all applications, registrations, and renewals in connection
therewith; (C) all trade secrets and proprietary information (including
ideas, formulas, compositions, know-how, technical data, manufacturing
and production processes and techniques, research and development
information, designs, drawings, specifications, operating procedures
and guidelines, quality assurance procedures and guidelines); (D) all
trademarks (including all CeNeS designation numbers with respect to any
of the Purchased Compounds), service marks, trade dress, slogans,
logos, trade names; (E) all proprietary computer software, data,
databases and documentation thereof, but specifically excluding any
software and databases licensed by CeNeS from third parties; (F) all
other proprietary rights (including but not limited to all
copyrightable works, all trademarks including all goodwill associated
therewith); (G) all copies and tangible embodiments thereof (in
whatever form or medium); (H) any biological embodiments thereof; and
(I) all the biological and chemical data associated with the compound
library including, but not limited to, any and all documentation such
as notebooks, memos, spectral data and figures and tables.
(ii)
(A) The Purchased Compounds, the Purchased Compounds
Intellectual Property Rights, the SBIR Equipment, the SBIR
Intellectual Property Rights, and the NMR Equipment are
referred to collectively as the "Purchased Assets."
(B) The Purchased Compounds Intellectual Property
Rights, the SBIR Intellectual Property Rights, and the
Intellectual Property Rights Arising from the Patents Licensed
to Scion are referred to collectively as the "CeNeS
Intellectual Property Rights".
(C) The Purchased Compounds, SBIR Equipment and NMR
Equipment are referred to collectively as the "Tangible
Assets."
3
(D) For the purpose of this Agreement, the term
"University Licensed Intellectual Property" shall refer to all
Intellectual Property Licensed to CeNeS under either (or both)
University Licenses and shall include the tangible embodiments
of the University Licensed Intellectual Property set forth on
Schedule K-2.
(E) For the purpose of this Agreement, the term
"Licensed Patents" shall refer to the patent embodiments of
the University Licensed Intellectual Property and the Patents
Licensed to Scion; provided, however, that the patents
embodied in the Virginia Commonwealth Agreement shall cease to
be deemed Licensed Patents upon the assignment of the Virginia
Commonwealth Agreement to Scion.
(F) For the purpose of this Agreement, the term
"Sublicenses" shall mean the Virginia Commonwealth Sublicense
and the Oregon Sublicense, collectively, and the term
"University Licenses" shall mean the Virginia Commonwealth
Agreement and the Oregon Agreement, collectively.
(iii) For the purpose of this Agreement, the term "Virginia
Commonwealth" shall mean Virginia Commonwealth University, and the term
"Virginia Commonwealth Agreement" shall mean a certain License
Agreement, dated April 4, 1994, by and between Virginia Commonwealth
University and Cambridge Neuroscience Inc., as amended by Amendment No.
1, dated April 3, 1997, and as further amended by an Amendment, dated
January 22, 2001.
(iv) For the purpose of this Agreement, the term "Oregon"
shall mean the State of Oregon, and "Oregon Agreement" shall mean a
certain Research Agreement, dated June 6, 1987, by and between the
State of Oregon (by and through the Oregon State Board of Higher
Education on behalf of the University of Oregon) and Cambridge
Neuroscience Research, Inc., as amended by Amendment No. 1, dated
September 1, 1987, and further amended by Amendment No. 2, dated April
2, 1990.
Section 2. Purchase Price. In consideration for CeNeS' obligations under this
Agreement, Scion shall make the following payments to CeNeS:
(a) Up Front Payment. At the Closing (as defined in Section 5(b)),
Scion shall pay to CeNeS US$300,000.00, by wire transfer of immediately
available funds (the "Up Front Payment").
(b) Subsequent Payment. Scion shall pay to CeNeS a total of
US$500,000.00 in 20 installments of $25,000.00 each, the first installment
commencing on the date that is one year from the date of the Closing, with each
subsequent installment every three months thereafter (each, a "Subsequent
Payment").
(c) Milestone Payments. Scion agrees to pay to CeNeS milestone payments
as set forth below on the first instance of a CeNeS-numbered Purchased Compound
invented by CeNeS (or an employee of CeNeS) or to which CeNeS has an exclusive
license (as identified on Schedule G) or a compound invented by CeNeS (or an
employee of CeNeS) and disclosed as a species embodiment in a CeNeS patent or
patent application included on Schedule B attached to this Agreement, reaching
4
the following stages of clinical development by Scion or a sub-licensee or
assignee of such compound by Scion:
o Upon the effectiveness of such party's filing of an
Investigational New Drug Application ("IND") with the U.S.
Food and Drug Administration (the "FDA"): $500,000.00;
o Upon the FDA's approval of commencement of Phase II clinical
trials: $500,000.00; and
o Upon the effectiveness of such party's filing of a New Drug
Application ("NDA") with the FDA: $1,000,000.00.
It is hereby agreed that evidence of invention by CeNeS of a compound set forth
in CeNeS' laboratory notebooks shall constitute a rebuttable presumption of
invention and manufacture of such compound by CeNeS.
Scion agrees to provide prompt notice (as set forth herein) of the
filing of any IND, the commencement of Phase II clinical trials, or upon the
filing of an NDA, provided that such filing or the commencement of such clinical
trials would require a payment under the provisions of this Section 2(c). In the
event that a subsequent payment is not made within five Business Days of its due
date, such payment shall accrue interest at the rate of 14% per annum beginning
on the fifth Business Day after its due date. For the purpose of this Agreement,
the term "Business Day" shall mean a day, excluding Saturday, Sunday, or legal
holiday observed by the government of the Commonwealth of Massachusetts.
(d) Maximum Obligation. In no event will more than US$2,800,000.00 be
paid by Scion to CeNeS under this Section 2. Other than as set forth in Section
1 and this Section 2, Scion shall have no further obligation or Liability to
CeNeS with respect to the Purchased Compounds or the CeNeS Intellectual Property
Rights, and Scion shall specifically have no obligation to pay any royalty on
any Purchased Compounds or CeNeS Intellectual Property Rights.
Section 3A. Representations and Warranties of CeNeS. Except as set forth on
Schedule H to this Agreement, CeNeS represents and warrants to Scion that the
statements contained in this Section 3A are correct and complete as of the date
of this Agreement and will be true and correct as of the Closing Date (as
defined in Section 5(b)).
(a) Organization and Authority. CeNeS is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware.
CeNeS has all necessary power and authority (corporate and other) to own and
sell the Purchased Assets and to execute and deliver this Agreement and carry
out the transactions contemplated by this Agreement.
(b) Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will:
(i) violate or conflict with any provision of CeNeS' Certificate of
Incorporation or By-laws, each as amended to date; (ii) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction or require the consent or approval of any
government, governmental agency, or court to which CeNeS is subject; or (iii)
conflict with, result in a breach of, constitute a default under, result in the
5
acceleration of, or create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice or consent under any agreement,
contract, lease, license, instrument, or other arrangement to which CeNeS is a
party or is bound or to which any of its assets are subject (or result in the
imposition of any Security Interest upon any of its assets). For the purposes of
this Agreement, the term "Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest and will also include any
license or grant of rights.
(c) Enforceability. When executed by the Parties, this Agreement will
constitute the valid and legally binding obligation of CeNeS enforceable in
accordance with its terms and conditions.
(d) Title to Tangible Assets. CeNeS has good and marketable title to
the Tangible Assets, free and clear of all Security Interests. Upon the
consummation of the transactions contemplated by this Agreement, at the Closing,
all right, title and interest in the Tangible Assets will be transferred to
Scion, free and clear of any Security Interest. At the Closing, the SBIR
Equipment and NMR Equipment will function in the manner in which such equipment
was designed; provided, however, that CeNeS makes no representation as to the
functionality of such equipment after relocation of such equipment by Scion
following the Closing.
(e) Intellectual Property.
(i) All tangible embodiments of the CeNeS Intellectual
Property Rights are identified on Schedules B and D. Schedule B
identifies all of the tangible embodiments of the Purchased Compounds
Intellectual Property Rights. Schedule D identifies all of the tangible
embodiments of the SBIR Intellectual Property Rights. CeNeS owns and
possesses all right, title and interest in and to all of the CeNeS
Intellectual Property Rights, free and clear of any Security Interest,
and, upon the consummation of the transactions contemplated by this
Agreement, at the Closing, all right, title and interest in the CeNeS
Intellectual Property Rights will be transferred to Scion, free and
clear of any Security Interest.
(ii) Schedules B and D identify the jurisdictions in which all
such registrations and pending applications for registration of the
Intellectual Property Rights were issued or registered or in which
application was made, the date of issuance or registration or
application and the identification number assigned thereto, as
applicable.
(iii) University Licensed Intellectual Property Rights.
(A) A true and complete copy of the Virginia
Commonwealth Agreement is set forth on Schedule L-1. A true
and complete copy of the Oregon Agreement is set forth on
Schedule L-2. CeNeS is not in breach of either University
License, and CeNeS has not received any notice of any breach
of either University License by any third party.
(B) No Liability on the part of CeNeS under either
University License is currently due. CeNeS has no Knowledge of
any loss or expiration of any University Licensed Intellectual
Property Rights (including any loss resulting from the failure
to pay patent maintenance fees or to make any filing).
6
(C) CeNeS has not received any notices of, nor to the
Knowledge of CeNeS or the directors or officers (and employees
with responsibility for Intellectual Property Rights matters
of CeNeS) do any facts exist which indicate a likelihood of
any infringement or misappropriation by, or conflict with, any
third party with respect to the University Licensed
Intellectual Property Rights (including, without limitation,
any demand or request that CeNeS, Virginia Commonwealth
University, or Oregon, as applicable, license any rights from
a third party).
(D) To the Knowledge of CeNeS, commercially
reasonable actions to maintain and protect each item of
University Licensed Intellectual Property Rights have been
taken.
(iv) CeNeS Intellectual Property.
(A) CeNeS has received no notice of and has no
Knowledge of any claim by any third party contesting the
validity, enforceability, use or ownership of any of the CeNeS
Intellectual Property Rights and CeNeS has no Knowledge of any
grounds for the same.
(B) CeNeS has no Knowledge of any loss or expiration
of any CeNeS Intellectual Property Rights (including any loss
resulting from the failure to pay patent maintenance fees or
to make any filing due prior to the date of this Agreement).
(C) CeNeS has not received any notices of, nor to the
Knowledge of CeNeS or the directors or officers (and employees
with responsibility for Intellectual Property Rights matters
of CeNeS) do any facts exist which indicate a likelihood of
any infringement or misappropriation by, or conflict with, any
third party with respect to the CeNeS Intellectual Property
Rights (including, without limitation, any demand or request
that CeNeS license any rights from a third party).
(D) CeNeS has not infringed, misappropriated or
otherwise conflicted with any Intellectual Property Rights or
other rights of any third parties.
(E) CeNeS has taken commercially reasonable actions
to maintain and protect each item of CeNeS Intellectual
Property Rights. For the purpose of this Agreement,
"Knowledge" means actual knowledge after reasonable
investigation.
(v) With respect to each item of CeNeS Intellectual Property
Rights and University Licensed Intellectual Property Rights, as the
case may be:
(A) the underlying item of CeNeS Intellectual
Property Rights (and, to the Knowledge of CeNeS, the
underlying item of University Licensed Intellectual Property
Rights) is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(B) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of CeNeS or the directors or officers
(and employees with responsibility for Intellectual Property
Rights matters) of CeNeS, is threatened which challenges the
7
legality, validity, or enforceability of the underlying item
of CeNeS Intellectual Property Rights (or, to the Knowledge of
CeNeS, the University Licensed Intellectual Property Rights);
and
(C) CeNeS has not granted any license, sublicense or
similar right.
(vi) With respect to all CeNeS Intellectual Property Rights,
each inventor, employee and consultant of CeNeS that participated in
the development or discovery of such Intellectual Property Right has
executed currently enforceable invention assignment or similar
agreements with CeNeS or its predecessor assigning all right, title,
and interest to such Intellectual Property Rights to CeNeS ("CeNeS
Invention Assignment Agreements").
(f) Power of Attorney. There are no outstanding powers of attorney
executed on behalf of CeNeS that would prevent or prohibit it from valid
performance of its obligations under this Agreement.
(g) Brokers' Fees. CeNeS has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Scion could become liable.
(h) Inventory. CeNeS' log of all Purchased Compounds, which sets forth
the approximate quantities of compounds in CeNeS' chemical library has been
provided to Scion on or prior to the Closing Date.
Section 3B. Representations and Warranties of CeNeS plc. CeNeS plc represents
and warrants to Scion that the statements contained in this Section 3B are
correct and complete as of the date of this Agreement and will be true and
correct as of the Closing Date.
(a) Organization and Authority. CeNeS plc is a company duly organized
and validly existing under the laws of England and Wales. CeNeS plc has all
necessary power and authority (corporate and other) to execute and deliver this
Agreement and carry out its obligations under this Agreement.
(b) Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will:
(i) violate or conflict with any provision of CeNeS plc's Memorandum of
Association or Articles of Association; (ii) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction or require the consent or approval of any government, governmental
agency, or court to which CeNeS plc is subject; or (iii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of, or
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice or consent under any agreement, contract, lease, license,
instrument, or other arrangement to which CeNeS plc is a party or is bound or to
which any of its assets are subject.
(c) Enforceability. When executed by the Parties and CeNeS plc this
Agreement will constitute the valid and legally binding obligation of CeNeS plc
enforceable in accordance with its terms and conditions.
Section 4. Representations and Warranties of Scion. Scion represents and
warrants to CeNeS and CeNeS plc that the statements contained in this Section 4
8
are correct and complete as of the date of this Agreement and will be true and
correct as of the Closing Date.
(a) Organization and Authority. Scion is a corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of Delaware. Scion has all necessary power and authority (corporate and other)
to execute and deliver this Agreement and carry out the transactions
contemplated by this Agreement.
(b) Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will:
(i) violate or conflict with any provision of Scion's Certificate of
Incorporation, as amended, or By-laws; (ii) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction or require the consent or approval of any government, governmental
agency, or court to which Scion is subject; or (iii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice or consent under any agreement, contract, lease, license, instrument, or
other arrangement to which Scion is a party or is bound or to which any of its
assets are subject (or result in the imposition of any Security Interest upon
any of its assets).
(c) Enforceability. When executed by the Parties, this Agreement will
constitute the valid and legally binding obligation of Scion enforceable in
accordance with its terms and conditions.
(d) Brokers' Fees. Scion has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which CeNeS could become liable.
Section 5. Covenants; Closing.
-------------------
(a) Further Assurances.
(i) In case at any time after date hereof any further action
is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as
the other Party may reasonably request, all at the sole cost and
expense of the requesting Party (unless the requesting Party is
entitled to indemnification for such amount under Section 6, below).
CeNeS shall cooperate with, assist and take all actions reasonably
requested by Scion and its authorized representatives in order to
provide, to the extent reasonably requested by Scion, an efficient
transfer of control of the Purchased Assets and the SBIR Grant,
including, but not limited to, any filings with respect to any CeNeS
Intellectual Property any appropriate governmental authority or with
the NIH. In addition to the foregoing, CeNeS hereby assigns to Scion
rights under all CeNeS Invention Assignment Agreements to the extent
they relate to the CeNeS Intellectual Property Rights, and agrees to
assist Scion in the procurement and enforcement of such CeNeS Invention
Assignment Agreements with respect to the CeNeS Intellectual Property
Rights.
(ii) In the event Scion is unable, for any reason, after
reasonable effort, to secure signatures on any document needed in
connection with the actions specified in this Section 5(a), CeNeS
hereby irrevocably designates and appoints Scion and its duly
authorized agent and attorney in fact, which appointment is coupled
9
with an interest, to act for and in its behalf to execute, verify and
file any such documents and to do all other lawfully permitted acts to
further the purposes of Section 5(a)(i) with the same legal force and
effect as if executed by CeNeS unless right to such Intellectual
Property is subject to a good faith dispute between the parties. CeNeS
hereby waives and quitclaims to Scion any and all claims, of any nature
whatsoever, which CeNeS now or may hereafter have for infringement of
any CeNeS Intellectual Property Rights assigned hereunder to Scion.
(iii) Use of CeNeS Intellectual Property Rights. From the date
of this Agreement and indefinitely thereafter, CeNeS agrees not to
disclose, use, or retain any CeNeS Intellectual Property Rights, it
being acknowledged that worldwide exclusive, except as set forth on
Schedule B, D, or H, right and title to such CeNeS Intellectual
Property Rights (subject to the Grant Agreement and the ▇▇▇▇-▇▇▇▇ Act,
in the case of the SBIR Intellectual Property Rights) shall be assigned
to Scion pursuant to this Agreement and will be thereafter referred to
as Scion Intellectual Property.
(iv) Confidentiality. For the purpose of this Agreement,
"Confidential Information" means any information concerning the
businesses and affairs of Scion that is not already generally available
to the public, and the term "Confidential Information" shall include
all information and data concerning or related to the CeNeS
Intellectual Property Rights and/or the Purchased Compounds. CeNeS will
treat and hold as such all of the Confidential Information, refrain
from using any of the Confidential Information except in connection
with this Agreement, and deliver promptly to Scion or destroy, at the
request and option of Scion, all tangible embodiments (and all copies)
of the Confidential Information which are in its possession. In the
event that CeNeS is requested or required (by oral question or request
for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose
any Confidential Information, CeNeS will notify Scion promptly of the
request or requirement so that Scion may seek an appropriate protective
order or waive compliance with the provisions of this Section 5(a)(iv).
If, in the absence of a protective order or the receipt of a waiver
hereunder, CeNeS is, on the advice of counsel, compelled to disclose
any Confidential Information to any tribunal or else stand liable for
contempt, CeNeS may disclose the Confidential Information to the
tribunal; provided, however, CeNeS shall use its best efforts to
obtain, at the request of Scion, an order or other assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as Scion shall
designate. The foregoing provisions shall not apply to any Confidential
Information that is generally available to the public immediately prior
to the time of disclosure.
(v) Employment of ▇▇. ▇▇▇ ▇▇▇▇▇ Sui. Scion represents that it
has entered into a mutually acceptable employment agreement with ▇▇.
▇▇▇ ▇▇▇▇▇ Sui.
(vi) Maintenance of Patents; Infringement.
(A) Maintenance.
(I) CeNeS agrees to maintain the Licensed
Patents for the life of each such patent, in each
jurisdiction in which such patent was issued as of
10
the date of this Agreement (the "Applicable
Jurisdictions") and without interruption, and CeNeS
shall be responsible for the preparation, filing,
prosecution and maintenance of the Licensed Patents
(including all payment obligations) and shall, on an
ongoing basis, promptly furnish copies of all related
documents to Scion within thirty days of receipt or
deposition.
(II) CeNeS shall, subject to the prior
approval of Scion (not to be unreasonably withheld),
select registered patent attorneys or patent agents
to provide services for preparing, filing,
prosecuting and maintaining the Licensed Patents on
behalf of CeNeS (it being acknowledged that ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, LLP is approved by Scion). CeNeS shall
directly pay such attorneys or agents and provide
Scion copies of each invoice associated with such
services, as well as documentation that such invoices
have been paid.
(III) CeNeS and its attorneys or agents
shall consult with Scion in all aspects of the
preparation, filing, prosecution and maintenance of
the Licensed Patents and shall provide Scion
sufficient opportunity to comment on any document
that CeNeS intends to file or to cause to be filed
with the relevant intellectual property or patent
office.
(IV) Each party shall promptly inform the
other as to all matters that come to such party's
attention that may affect the preparation, filing,
prosecution, or maintenance of the CeNeS Intellectual
Property Rights and the Licensed Patents, as
applicable, and to permit the other party to provide
comments and suggestions with respect to such
activities, which comments and suggestions shall be
reasonably considered by such party.
(V) In the event that CeNeS elects not to maintain
the Licensed Patents in any of the Applicable Jurisdictions,
then CeNeS shall give thirty days' written notice of such
election to Scion, and the Licensed Patent in such
jurisdiction shall thereupon be automatically assigned to
Scion, without further payment by or obligation on the part of
Scion to CeNeS or its successors or assigns. In such an event,
CeNeS agrees to cooperate fully with Scion, its attorneys, and
agents in the preparation, filing, prosecution and maintenance
related to such patents and, upon request, to provide Scion
with complete copies of any and all documents or other
materials that Scion deems necessary to undertake such
responsibilities. Scion shall thereupon assume responsibility
for all costs associated with the patents so assigned arising
after such assignment, including reasonable costs associated
with transferring patent prosecution responsibilities to an
attorney or agent of Scion's choice.
(B) Infringement by Third Parties.
(I) Each Party shall promptly notify the
other in writing of any alleged infringement or
misappropriation by third parties of any Licensed
11
Patent and provide any information available to that
Party relating to such alleged infringement or
misappropriation.
(II) CeNeS shall have the primary right, but
not the obligation, to take action in its own name to
secure the cessation of any infringement or
misappropriation or to enter suit against the
infringer. Any such action will be at CeNeS' expense,
employing counsel of its own choosing. If CeNeS
elects not to exercise its right to prosecute or take
other appropriate action in connection with an
infringement or misappropriation of the Licensed
Patents or fails to take any such action within sixty
days of first receiving of such infringement or
misappropriation, Scion may do so at its own expense,
controlling such action.
(III) CeNeS and its attorneys or agents
shall consult and cooperate with Scion in all aspects
of any such litigation and shall provide Scion
sufficient opportunity to review any document
prepared, produced, or received by CeNeS in
conjunction with such dispute. Scion agrees to
provide comments and suggestions with respect to any
such matter, which comments and suggestions shall be
reasonably considered by the CeNeS.
(IV) If CeNeS brings action, any damages or
other monetary awards recovered by CeNeS shall be
applied proportionately first to defray the
unreimbursed costs and expenses (including reasonable
attorneys' fees) incurred by either or both Parties
resulting from such action. If any balance remains
after such payment, then such balance shall be shared
by the Parties pro rata based upon the Parties'
respective documented Liabilities suffered. If CeNeS
fails to bring action and Scion brings action, any
damages or other monetary awards recovered by Scion
shall be applied first to defray the costs and
expenses (including reasonable attorneys' fees)
incurred in the action by either or both of the
Parties resulting from such action. If any balance
remains, such balance shall be the property of Scion.
(V) No settlement, consent judgment or other
voluntary final disposition of a suit being
prosecuted by a Party under this Section 5(iv)(B) may
be entered into without the consent of the other
Party if such settlement, consent judgment or other
voluntary final disposition would alter, derogate or
diminish such other Party's rights under the
Agreement or otherwise materially adversely affect
such other Party, which consent shall not be
unreasonably withheld or delayed.
(C) Infringement of Third Parties' Rights. Except as
set forth in Section 6:
(I) CeNeS shall promptly notify Scion in
writing of any alleged infringement or
misappropriation by CeNeS of any third party's
Intellectual Property Rights with respect to the
Licensed Patent and provide any information available
12
to CeNeS relating to such alleged infringement or
misappropriation.
(II) CeNeS and its attorneys or agents shall
consult and cooperate with Scion in all aspects of
any such litigation and shall provide Scion
sufficient opportunity to review any document
prepared, produced, or received by CeNeS in
conjunction with such dispute. Scion agrees to
provide comments and suggestions with respect to any
such matter, which comments and suggestions shall be
reasonably considered by the CeNeS.
(III) All fees, expenses, and costs
associated with the defense of such claim shall be
borne by CeNeS; provided, however, that upon CeNeS'
notice of its election not to defend any such third
party claim, Scion may, in its sole discretion,
assume responsibility and all costs associated with
the defense of such claim, and, upon written notice
of the same to CeNeS, the Licensed Patent in dispute
shall thereupon be assigned to Scion, without further
payment by or obligation on the part of Scion to
CeNeS or its successors or assigns. In such an event,
CeNeS agrees to cooperate fully with Scion, its
attorneys, and agents in the preparation, filing,
prosecution and maintenance related to such patents
and, upon request, to provide Scion with complete
copies of any and all documents or other materials
that Scion deems necessary to undertake such
responsibilities. Scion shall thereupon assume
responsibility for all costs associated with the
patents so assigned arising after such assignment,
including reasonable costs associated with
transferring patent prosecution responsibilities to
an attorney or agent of Scion's choice.
(vii) Bankruptcy. Until the last to occur of (A) the
expiration of the last of the Patents Licensed to Scion; (B) the
termination or expiration of this last Sublicense (insofar as such
Sublicense has not been assigned to Scion), CeNeS agrees that is shall
not cause or permit itself to be wound up or liquidated under the law
of any state, or to cause or permit any Bankruptcy to occur. For the
purpose of this Agreement, the term "Bankruptcy" shall mean any: (A)
application for or consent to the appointment of, or the taking
possession by, a receiver, custodian, trustee, examiner, liquidator or
the like; (B) general assignment for the benefit of creditors; (C)
commencement of a voluntary case under the United States Bankruptcy
Code, as now or hereafter in effect ("Bankruptcy Code"); (D)
institution of any proceeding or petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization,
winding up, or composition or readjustment of debts; (E) failure to
controvert in a timely and appropriate manner or agreement to any
petition filed in an involuntary case filed under the Bankruptcy Code;
(F) general inability to pay debts as they come due (or admission in
writing to the same); or (G) any corporate action for the purpose of
effecting the foregoing.
(viii) Maintenance of the University Licenses. CeNeS agrees to
maintain each of the University Licenses in full force and effect for
the duration of each such agreement and extensions thereto; provided,
however, that this obligation will terminate with respect to the
13
Virginia Commonwealth Agreement upon CeNeS' effective assignment of
that agreement to Scion.
(b) Closing.
(i) Closing Date. The closing of the purchase and sale (the
"Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on November 29, 2001
(the "Closing Date"), or at another time and place mutually agreed to
by the parties. All actions to be taken, and all documents and
instruments to be delivered at the Closing, shall be deemed to have
been taken or delivered, as the case may be, simultaneously.
(ii) Deliveries by CeNeS. At the Closing, CeNeS shall deliver
to Scion (A) a ▇▇▇▇ of Sale, Assignment and Assumption Agreement
representing the transfer of the Purchased Assets; (B) a certificate
signed by an executive officer of CeNeS dated as of the Closing Date,
certifying as of the Closing Date that the representations and
warranties of CeNeS are true and correct; and (C) Schedule G to this
Agreement, setting forth a list of the Purchased Compounds with the
CeNeS reference number of each Purchased Compounds and its associated
structure.
(iii) Deliveries by CeNeS plc. At the Closing, CeNeS plc shall
deliver to Scion a certificate signed by an executive officer of CeNeS
plc dated as of the Closing Date, certifying as of the Closing Date
that the representations and warranties of CeNeS plc are true and
correct.
(iv) Payment by Scion. At the Closing, Scion shall (A) pay to
CeNeS the Up Front Payment; and (B) deliver to CeNeS a certificate
signed by an executive officer of Scion dated as of the Closing Date,
certifying as of the Closing Date that the representations and
warranties of Scion are true and correct.
Section 6. Remedies for Breaches of this Agreement.
----------------------------------------
(a) Survival of Representations and Warranties. All of the
representations, warranties and covenants of the Parties contained in this
Agreement shall survive for a period of two years from the Closing Date and
terminate thereafter, except with respect to the covenants set forth in Section
5(a)(i) through 5(a)(iv), which will survive for a period of five years from the
Closing, and with respect to the covenants set forth in Section 5(a)(vi), which
shall survive for the life of the applicable Licensed Patents. Any Party
learning of a misrepresentation or breach of any of its representations and
warranties or covenants set forth in this Agreement shall immediately give
written notice thereof to the other Party.
(b) Indemnification Generally. Each of the Parties agrees to indemnify
the other from and against the entirety of any Adverse Consequences such other
Party may suffer resulting from, arising out of, relating to, in the nature of,
or caused by: (i) the breach of any representation, warranty or covenant of such
Party or the inaccuracy of any certificate delivered pursuant to this Agreement;
or (ii) in the case of Scion, any Liability assumed or deemed to be assumed by
Scion other than the Assumed Liabilities. For the purpose of this Agreement,
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
14
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, taxes, liens, losses, expenses, and
fees, including court costs and attorneys' fees and expenses.
(c) Indemnification Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against the other
Party (the "Indemnifying Party") under this Section 6, then the
Indemnified Party shall promptly notify each Indemnifying Party thereof
in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice satisfactory to the Indemnified Party so long as: (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15
days after the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against the entirety of any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim; (B) the
Indemnifying Party provides the Indemnified Party with evidence
acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder; (C) the Third
Party Claim involves only money damages and does not seek an injunction
or other equitable relief; (D) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith
judgment of the Indemnified Party, likely to establish a precedential
custom or practice adverse to the continuing business interests of the
Indemnified Party; and (E) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 6(c)(ii)
above: (A) the Indemnified Party may retain separate co-counsel at its
sole cost and expense and participate in the defense of the Third Party
Claim; (B) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party; and
(C) the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnified Party.
(iv) In the event any of the conditions in Section 6(c)(ii)
above is or becomes unsatisfied, however: (A) the Indemnified Party may
defend against, and consent to the entry of any judgment or enter into
any settlement with respect to, the Third Party Claim in any manner it
may deem appropriate (and the Indemnified Party need not consult with,
or obtain any consent from, any Indemnifying Party in connection
therewith); (B) the Indemnifying Parties will reimburse the Indemnified
Party promptly and periodically for the costs of defending against the
Third Party Claim (including attorneys' fees and expenses); and (C) the
15
Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party
Claim to the fullest extent provided in this Section 6.
(d) Set Off. Scion shall have the option of recouping all or any part
of any undisputed Adverse Consequences it may suffer (in lieu of seeking any
indemnification to which it is entitled under this Section 6) by notifying CeNeS
that Scion is reducing the remaining Subsequent Payments on a dollar for dollar
basis.
(e) Other Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have with respect to the
transactions contemplated by this Agreement.
Section 7. Miscellaneous.
--------------
(a) Entire Agreement; Succession; Assignment. This Agreement (including
the Schedules referred to in this Agreement) constitutes the entire agreement
between the Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, to the extent they
relate in any way to the subject matter hereof. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party; provided, however, that Scion may assign its rights
to indemnification hereunder to a third party in connection with the sale or
license of any of the Purchased Assets.
(b) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(c) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Amendments; Notices. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Parties. No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence. All notices, requests, demands,
claims, and other communications hereunder will be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be deemed duly
given if it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
If to Scion, to:
Scion Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
16
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President and Chief Executive
Officer
with a required copy to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
Fish & ▇▇▇▇▇▇▇▇▇▇ P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇, Ph.D.
If to CeNeS or CeNeS plc to:
CeNeS Pharmaceuticals plc
Compass House
Vision Park
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
with a required copy to:
Weil, Gotshal & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the Commonwealth of Massachusetts without
giving effect to any choice or conflict of law provision or rule that would
cause the application of the laws of any jurisdiction other than the
Commonwealth of Massachusetts.
(f) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Boston, Massachusetts in
any action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Any
Party may make service on the other Party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided for
the giving of notices in Section 7(d) above. Nothing in this Section 7(f),
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or in equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
17
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or in equity.
(g) Specific Performance; Severability. Each of the Parties
acknowledges and agrees that the other Party would be damaged irreparably in the
event any of the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly, each of the
Parties agrees that the other Party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section 7(f) above), in addition to any other remedy to which it may be
entitled, at law or in equity. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(h) Guaranty. CeNeS plc agrees that if CeNeS voluntarily dissolves and
winds up its affairs, CeNeS plc will assume all obligations under this
Agreement, including the indemnification provisions in Section 6 of this
Agreement, provided however, that until CeNeS is wound up, CeNeS plc
unconditionally guarantees the obligations of CeNeS, up to maximum of the total
of the Up Front Payment and Subsequent Payments actually paid.
* * *
18
In witness whereof, the parties have set their hands and seals as of
the date first written above.
CENeS Pharmaceuticals plc SCion pharmaceuticals, inc.
/s/ ▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
By: ____________________________ By: ____________________________
Chief Operating Officer President and CEO
Its: ____________________________ Its: ____________________________
CENES PHARMACEUTICALS, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇
By: ____________________________
Chief Operating Officer
Its: ____________________________
19
