SECOND AMENDMENT
TO THE COLLABORATION AND LICENSE AGREEMENT
This SECOND AMENDMENT TO THE
COLLABORATION AND LICENSE AGREEMENT (this “Second
Amendment”) is executed to be effective this 18th day of
August 2005, by and between Memory Pharmaceuticals Corp.
(“Memory”), and F. Hoffmann-La Roche Ltd and
Hoffmann-La Roche Inc. (collectively, “Roche”) (Memory
and Roche are hereinafter referred to individually as a
“Party” and collectively as the “Parties”).
All capitalized terms used herein and not defined shall have the
meanings set forth in the Agreement (as defined below).
WHEREAS, Memory and Roche have
previously entered into a Collaboration and License Agreement dated
July 29, 2002, as amended by an Amendment to the Collaboration
and License Agreement dated August 6, 2004 (the “First
Amendment”) (the Agreement and First Amendment are
hereinafter referred to collectively as the
“Agreement”); and
WHEREAS, the Parties wish to amend
the Agreement so that the compounds MEM 1414 and MEM 1917 cease to
be Memory Compounds and may be developed and commercialized by
Memory, either alone or with one or more third parties, subject to
Roche’s future option rights hereunder and the other
provisions of this Second Amendment;
NOW, THEREFORE, in consideration for
the foregoing promises and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
1. Future Development of
Certain Compounds . The Agreement shall be terminated with
respect to MEM 1414 and MEM 1917 only and such compounds shall
cease to be Memory Compounds as of the date hereof, subject to the
option rights of Roche set forth in Section 3 of this Second
Amendment.
2. Return and Governance
. Promptly after the execution of this Second Amendment, Roche
shall: (i) assign and transfer to Memory at no expense to
Memory the items set forth in Section 16.4(a) of the Agreement
solely to the extent each relates to MEM 1414 and MEM 1917, free
and clear of any liens or security interests, (ii) create a
shareweb of the items set forth in (i) above for use by both
Parties as reference data, and (iii) transfer existing
inventory of MEM 1414 and MEM 1917 to Memory at no expense to
Memory, free and clear of any liens or security interests.
Roche’s obligations pursuant to Section 16.4(c) of the
Agreement shall be fulfilled and discharged by Roche’s
transfer of existing inventory of MEM 1414 and MEM 1917 to Memory
as provided herein. Promptly after the execution of this Second
Amendment, each Party shall appoint an individual to act as a
liaison and to coordinate any communications that may be required
or requested between the Parties relating to MEM 1414 and MEM
1917.
3. Option Rights of
Roche . Roche shall have the option (“Option”) to
obtain an exclusive license to develop and commercialize MEM 1414
and/or MEM 1917 (each, an “Option Compound”) upon the
terms set forth in this Second Amendment. Roche may exercise the
Option in accordance with the provisions of Section 4 below.
If Roche exercises the Option with respect to an Option Compound,
then such Option Compound shall be deemed to be a Memory
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Compound for purposes of the Agreement, and all provisions of
the Agreement shall apply to such Option Compound, except for those
provisions that are changed by this Second Amendment. If Roche does
not exercise its Option with respect to an Option Compound, then
Roche shall have no further rights or interest and no further
obligations or payments, including but not limited to royalties or
Event payments with respect to such Option Compound.
4. Exercise of Option .
If Memory or a Third Party completes a Phase IIb clinical trial of
an Option Compound for a Psychiatric Indication, Neurological
Indication or Other Indication, which has generated data to support
a Phase III clinical trial that Memory intends to conduct (itself
and/or together with any Third Party) unless Roche exercises its
Option, then Memory shall give prompt written notice thereof to
Roche. Roche shall have fourteen (14) days after receipt of
such notice from Memory to request in writing that Memory provide
Roche with a data package for that Option Compound. Roche may
request such a data package only if Roche has a good faith interest
in evaluating the data package for the purpose of determining
whether to exercise its Option. Commencing on the date that Roche
receives the complete data package, Roche shall have the right to
conduct due diligence related to the Option Compound for a period
of up to ninety (90) days. Roche’s due diligence may
include, but is not limited to, the following: (i) a full
clinical and manufacturing audit of Memory, at Roche’s
expense, (ii) the right to request all data, including raw
data, obtained to date relating to the Option Compound,
(iii) the right to inspect Memory’s facilities and, to
the extent within the reasonable control of Memory, the facilities
of its clinicians and manufacturers (and Memory agrees to use its
best efforts to ensure that Roche can inspect the facilities of
such third parties), and (iv) a complete detailed report of
the Development Costs actually incurred that in Memory’s view
should form the basis for the calculation of Roche’s
reimbursement to Memory of Phase II actual global Development
Costs. To exercise the Option, Roche must give written notice of
exercise to Memory within ten (10) days after Roche’s
completion of its due diligence related to the Option Compound. The
data package and any and all other information provided by Memory
to Roche relating to the development of MEM 1414 and MEM 1917 shall
be treated by Roche as the Confidential Information of Memory in
accordance with the provisions of Article 15 of the
Agreement.
5. Development Event
Payments and Royalties for Option Compounds . If Roche
exercises its Option for an Option Compound, then Roche shall pay
to Memory [*] percent ([*]%) of Phase II actual global development
costs (“Development Costs”) incurred prior to
Roche’s exercise of its Option by Memory or a Third Party
with respect to such Option Compound. Roche shall have the right to
have an independent third party accounting firm, selected by Roche
and reasonably acceptable to Memory, audit Memory’s books and
records, at Roche’s expense, to determine the actual global
Development Costs. Notwithstanding the otherwise applicable
provisions of the Agreement relating to Event payments, Roche shall
pay to Memory, solely with respect to such Option Compound, [*]
percent ([*]%) of the otherwise applicable payments that are due
for all Events pursuant to Section 4.3 (including regulatory and
bonus Events) occurring after the Initiation of Phase III (
i.e. , Roche shall have no obligation to pay any such Event
payments applicable to the Initiation of Phase III).
Notwithstanding the otherwise applicable provisions of the
Agreement relating to royalty rates, Roche shall pay to Memory,
solely with respect to a Product that includes an Option Compound,
a royalty at a rate of [*] percent ([*]%) of Net Sales, based on
worldwide Net Sales of such Product(s). If a Memory Compound
reaches an Event under Section 4.3(a), 4.3(b), or 4.3(c) of the
Agreement,
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and Roche has paid Memory for any
Event on an Option Compound under the same Section 4.3(a),
4.3(b), or 4.3(c), respectively, then the payment, if any, for such
Memory Compound for any Event under the same Section will be
calculated (i) as a Second Product under Section 4.3(a)
or (ii) as not the first occurrence of the Event under
Section 4.3(b), 4.3(c) or 4.3(d). Notwithstanding anything to
the contrary contained herein, upon exercise by Roche of its Option
with respect to any Option Compound, Roche shall be obligated to
pay [*] percent ([*] %) of the otherwise applicable payments with
respect to any Events relating to such Option Compound calculated
as (i) a First Product under Section 4.3(a) or
(ii) as the first occurrence of the Event under
Section 4.3(b) or Section 4.3(c).
6. Development Costs .
Development Costs shall mean the costs actually incurred by a Party
or for its account that are specifically attributable to the
Development of an Option Compound or Product containing an Option
Compound. Development Costs shall include amounts paid by a Party
to Third Parties involved in the development of an Option Compound
or Product containing an Option Compound, and all internal costs
incurred by a Party in connection with the development of an Option
Compound or Product containing an Option Compound.
Notwithstanding anything to the
contrary herein, Development Costs for manufacturing of clinical
supplies shall be as set forth in Article 9. Development Costs
shall mean costs for the development of research plans and
programs, screening, lead optimization, in vitro and in
vivo testing, studies on the toxicological, pharmacokinetic,
metabolic or clinical aspects of such Option Compound or Product
containing an Option Compound conducted internally or by individual
investigators, or consultants necessary for the purpose of
obtaining and/or maintaining approval of such Product containing an
Option Compound by a government organization in a country, and
costs for preparing, submitting, reviewing or developing data or
information for the purpose of a submission to a governmental
authority to obtain and/or maintain approval of Product containing
an Option Compound in a country as well as costs of process
development and scale-up costs and recovery (including plant
costs).
Development Costs shall not include
patent costs, pre-registration marketing costs (e.g. trademark
costs, advertising agency selection costs, pre-marketing studies),
post-registration clinical studies which are not enabling for
registration of the Product containing an Option Compound and
post-registration marketing studies.
Development Costs consist of two main
components, variable costs and fixed costs. Variable costs are
external costs invoiced from third parties. In determining fixed
costs (primary and secondary fixed costs), the Parties have agreed
on an FTE-rate that will be charged for the resources allocated to
the programs from the functions directly operating the programs on
a fractional FTE-basis. The Parties contemplate that this rate
captures total actual personnel and fixed costs attributable to the
performance of the development work under this Agreement.
All FTE expenditures shall be included in Development Costs
based on a rate of $[*] per FTE. For each calendar year after 2006,
the FTE rate will be increased by [*]% compared to previous
calendar year. Time-recording will be used by all people within
these functions to record actual time spent on the development
activities for the purpose of obtaining regulatory approval of
Product containing an Option Compound. For clarity, FTE time
recording should be made on a fractional basis. Each Party will
also use its applicable project cost system with the purpose of
tracking and reporting costs on a project/product indication/work
package level.
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7. Memory Co-Promotion
Rights . If Roche exercises the Option with respect to an
Option Compound, then Memory shall have the right to co-promote
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