CERTAIN
MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS
DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE
OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
THIS AGREEMENT
made and entered into this 3rd day of January, 2005 (“
EFFECTIVE DATE ”), by and between OREXIGEN
THERAPEUTICS, INC., a Delaware corporation (“ OREXIGEN
”), and CYPRESS BIOSCIENCE, INC., a Delaware corporation
(“ CYPRESS ”).
WHEREAS, OREXIGEN
has certain intellectual property rights relating to technology
which enhances human weight loss; and
WHEREAS, CYPRESS
desires to acquire certain rights to such OREXIGEN technology to
reduce weight gain associated with the use of certain therapeutics;
and
NOW THEREFORE, in
consideration of the premises and the mutual covenants contained
herein, the parties hereto agree as follows:
For the purposes
of this AGREEMENT, and solely for that purpose, the terms and
phrases set forth below and elsewhere in this AGREEMENT in capital
letters shall be defined as follows:
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1.01
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“ AFFILIATE ”
means any corporation or non-corporate entity which controls, is
controlled by or is under the common control with a party hereto. A
corporation or a non-corporate entity, as applicable, shall be
regarded as in control of another corporation if it owns or
directly or indirectly controls at least fifty percent (50%) of the
voting stock of the other corporation, or in the absence of
ownership of at least fifty percent (50%) of the voting stock of a
corporation, or in the case of a non corporate entity, if it
possesses directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation or
non-corporate entity, as applicable.
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1.02
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“ AGENT ” means
any employee, consultant, agent or individual or entity that has
either assigned or licensed INTELLECTUAL PROPERTY to a party
hereto.
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1.03
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“ ARBITRATION ISSUES
” shall have the meaning given in
Section 20.04(a).
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1.04
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“ ARBITRATION PANEL
” shall have the meaning given in
Section 20.03.
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1.05
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“ CLAIMANT ”
shall have the meaning given in Section 20.04(a).
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1.06
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“ CLAIMANT’S
PROPOSAL ” shall have the meaning given in Section
20.04(b) .
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1.07
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“ CLAIMS ” shall
have the meaning given in Section 14.01 .
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1.08
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“ CLINICAL STRATEGY
ASSISTANCE ” shall have the meaning given in
Section 4.03 .
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1.09
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“ COLLABORATION CYPRESS
INTELLECTUAL PROPERTY ” means all INTELLECTUAL PROPERTY
during the term of this AGREEMENT:
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(a)
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conceived solely by one or more
AGENTS of CYPRESS in the course of work performed pursuant to this
AGREEMENT; and/or
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(b)
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that is an IMPROVEMENT to any
PRE-COLLABORATION CYPRESS INTELLECTUAL PROPERTY or COLLABORATION
CYPRESS INTELLECTUAL PROPERTY:
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(i)
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conceived solely by AGENTS of
OREXIGEN in the course of the COLLABORATIVE WORK; or
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(ii)
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conceived jointly by one or more
AGENTS of CYPRESS and one or more AGENTS of OREXIGEN in the course
of the COLLABORATIVE WORK.
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1.10
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“ COLLABORATION
INTELLECTUAL PROPERTY ” means the COLLABORATION CYPRESS
INTELLECTUAL PROPERTY”, COLLABORATION JOINT INTELLECTUAL
PROPERTY and/or COLLABORATION OREXIGEN INTELLECTUAL
PROPERTY.
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1.11
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“ COLLABORATION JOINT
INTELLECTUAL PROPERTY ” means all INTELLECTUAL PROPERTY
conceived jointly by one or more AGENTS of CYPRESS and one or more
AGENTS of OREXIGEN in the course of the COLLABORATIVE WORK, but
excluding any such INTELLECTUAL PROPERTY which is an IMPROVEMENT to
any PRE-COLLABORATION CYPRESS INTELLECTUAL PROPERTY or
COLLABORATION CYPRESS INTELLECTUAL PROPERTY or to any
PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY or COLLABORATION
OREXIGEN INTELLECTUAL PROPERTY.
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1.12
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“ COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY ” means all INTELLECTUAL PROPERTY
conceived during the term of this AGREEMENT:
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(a)
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solely by one or more AGENTS of
OREXIGEN in the course of work performed pursuant to this
AGREEMENT; and/or
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(b)
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that is an IMPROVEMENT to any
PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY or COLLABORATION
OREXIGEN INTELLECTUAL PROPERTY:
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(i)
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conceived solely by AGENTS of
CYPRESS in the course of the COLLABORATIVE WORK; or
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- 2 -
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(ii)
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conceived jointly by one or more
AGENTS of CYPRESS and one or more AGENTS of OREXIGEN in the course
of the COLLABORATIVE WORK.
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1.13
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“ COLLABORATIVE WORK
” shall have the meaning given in Section 4.01
.
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1.14
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“ COLLABORATIVE WORK
PLAN ” shall have the meaning given in Section
4.01 .
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1.15
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“ CYPRESS INDEMNITEES
” shall have the meaning given in Section 14.02
.
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1.16
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“ CYPRESS MATERIALS
” means any proprietary materials provided by CYPRESS to
OREXIGEN as part of the COLLABORATIVE WORK.
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1.17
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“ DISPUTE ” shall
have the meaning given in Section 20.02 .
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1.18
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“ DUKE AGREEMENT
” means that certain License Agreement dated March 31,
2004, by and between Duke University and OREXIGEN, as amended by
Amendment No. 1 thereto, dated as of even date
herewith.
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1.19
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“ DUKE PATENT RIGHTS
” means the patents and patent applications listed on
APPENDIX A, together with all divisions, continuations,
continuations-in-part (but only to the extent that the subject
matter of each such continuation-in-part application is described
in and enabled by the disclosure of such patent applications listed
on APPENDIX A), re-examinations, reissues, substitutions, or
extensions thereof and patents issuing therefrom in the United
States and non-U.S. jurisdictions, which are licensed to OREXIGEN
under the DUKE AGREEMENT.
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1.20
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“ DUKE SUBLICENSE
” means the sublicense under the DUKE AGREEMENT to practice
under the DUKE PATENT RIGHTS, which is included in the
LICENSE.
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1.21
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“ ELAN PARTIES ”
shall have the meaning given in Section 14.02.
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1.22
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“ FIELD ” means
all human indications.
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1.23
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“ FINAL DECISION
” shall have the meaning given in
Section 20.04(c).
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1.24
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“ IMPROVEMENT ”
means any invention that is an improvement to, or modification, of
an existing invention claimed in any patent application or patent
within the INTELLECTUAL PROPERTY of a party.
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1.25
|
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“ INTELLECTUAL PROPERTY
” means all intellectual property rights worldwide arising
under statutory or common law, and whether or not perfected,
including, without limitation, all (A) patents and patent
applications now existing or hereafter filed, issued or acquired,
together with all divisions, continuations, continuations-in-part
(but only to the extent that the subject matter of each
such
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- 3 -
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|
continuation-in-part application is
described in and enabled by the disclosure of any such patent
application), re-examinations, reissues, substitutions, or
extensions thereof and patents issuing therefrom in the United
States and non-U.S. jurisdictions; (B) rights associated with
works of authorship including copyrights, copyright applications
and copyright registrations; and (C) rights relating to the
protection of trade secrets, know-how and CONFIDENTIAL
INFORMATION.
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1.26
|
|
“ LICENSE ” means
the exclusive, worldwide license rights granted pursuant to
Section 2.01, including, but not limited to, the DUKE
SUBLICENSE .
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1.27
|
|
“ LICENSED PROCESS
” means any process which is covered in whole or in part by a
VALID CLAIM contained in the OREXIGEN PATENT RIGHTS and is used,
performed or practiced with respect to any LICENSED
PRODUCT.
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1.28
|
|
“ LICENSED PRODUCT
” means any product or part thereof containing mirtazapine or
setiptiline in any form, (including, without limitation, any and
all enantiomers, analogs, derivatives and salts thereof) used in
combination with one or more active ingredients, which:
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(a)
|
|
is
covered in whole or in part by any VALID CLAIM contained in the
OREXIGEN PATENT RIGHTS in the country in which any such product or
part thereof is made, used or sold; and/or
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(b)
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|
is
manufactured by using a process or is employed to practice a
process which is covered in whole or in part by a VALID CLAIM
contained in the OREXIGEN PATENT RIGHTS in the country in which any
LICENSED PROCESS is used or in which such product or part thereof
is used or sold; and/or
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(c)
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|
in
its intended use, practices, incorporates, or otherwise utilizes,
in whole, or in part, a VALID CLAIM contained in the OREXIGEN
PATENT RIGHTS in the country in which any such product or part
thereof is made, used, or sold.
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“LICENSED PRODUCTS”
shall also mean, unless the context otherwise clearly requires, the
following terms, collectively: LICENSED PRODUCTS, LICENSED
PROCESSES, and LICENSED SERVICES, and a LICENSED PROCESS and
LICENSED SERVICE shall be included within such term notwithstanding
such process or service is not literally a physical
“product”.
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1.29
|
|
“ LICENSED SERVICE
” means any service provided by CYPRESS (and/or SUBLICENSEES,
as the case may be) to a THIRD PARTY which utilizes LICENSED
PRODUCTS and/or LICENSED PROCESSES.
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- 4 -
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1.30
|
|
“ NET SALES ”
means:
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(a)
|
|
in
the case of LICENSED PRODUCTS, CYPRESS’s (and/or those of
SUBLICENSEES, as the case may be) revenues received from sale
and/or lease of the subject LICENSED PRODUCTS; and
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(b)
|
|
in
the case of LICENSED PROCESSES, CYPRESS’s (and/or those of
SUBLICENSEES, as the case may be) revenues received from sale
and/or lease of the subject LICENSED PROCESSES; and
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(c)
|
|
in
the case of LICENSED SERVICES, revenue received by CYPRESS (and/or
SUBLICENSEES, as the case may be) for provision of the subject
LICENSED SERVICE to a THIRD PARTY
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|
and
each of (a), (b) and (c), above shall be less the sum of the
following:
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(w)
|
|
discounts allowed in amounts
customary in the trade;
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|
|
(x)
|
|
sales, tariff duties and/or use
taxes directly imposed and with reference to particular
sales;
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(y)
|
|
outbound transportation prepaid or
allowed; and
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|
(z)
|
|
amounts allowed or credited on
returns.
|
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|
No
deductions to NET SALES shall be made for commissions paid to
individuals whether they are associated with independent sales
agencies or regularly employed by CYPRESS (and/or SUBLICENSEES, as
the case may be) and on its payroll, or for cost of collections.
LICENSED PRODUCTS shall be considered “sold” when the
consideration for provision thereof is received by CYPRESS (and/or
SUBLICENSEES, as the case may be). LICENSED PRODUCTS and LICENSED
SERVICES used by CYPRESS (and/or SUBLICENSEES, as the case may be)
for clinical field trials, provided as free-of-charge samples for
distribution to customers or end users, or for CYPRESS’s own
internal non-commercial research (and/or SUBLICENSEES, as the case
may be) shall not be included in NET SALES.
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Except as provided below, if a
LICENSED PRODUCT is sold in combination with another active
component or components not otherwise claimed in the OREXIGEN
PATENT RIGHTS and CYPRESS does not pay a royalty for such component
that will result in a reduced RUNNING ROYALTY pursuant to
Section 3.01(b) , then the NET SALES, for purposes of
determining royalties on the combination, will be calculated by
multiplying the NET SALES of the combination by the fraction
A/(A+B), where A is the invoice price of the LICENSED PRODUCT,
LICENSED PROCESS or LICENSED SERVICE if sold separately and B is
the total invoice price of any other active component or components
in the combination if sold separately. If the LICENSED PRODUCT,
LICENSED PROCESS or LICENSED SERVICE and the other active
component
|
- 5 -
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or
components in the combination are not sold separately, the NET
SALES, for purposes of determining royalties on the combination,
will be calculated by multiplying the NET SALES of the combination
by the fraction determined by mutual agreement of the parties, that
reflects the relative contribution in value that the LICENSED
PRODUCT contained in the combination makes to the total value of
such combination to the end user.
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|
|
1.31
|
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“ NOTICE OF ARBITRATION
” shall have the meaning given in Section 20.04(a)
.
|
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|
|
1.32
|
|
“ OPTION EXERCISE
DEADLINE ” means the [***] of the EFFECTIVE DATE, which
may be extended as provided in Section 4.02
.
|
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|
|
1.33
|
|
“ OPTION TERM ”
means the period commencing with the EFFECTIVE DATE and expiring on
the OPTION EXERCISE DEADLINE. The OPTION TERM may be extended for
not more than [***]([***]) days as provided in
Section 4.02 .
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1.34
|
|
“ OREXIGEN INTELLECTUAL
PROPERTY RIGHTS ” means any and all OREXIGEN PATENT
RIGHTS, PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY,
COLLABORATION OREXIGEN INTELLECTUAL PROPERTY, and OREXIGEN rights
in or to COLLABORATION JOINT INTELLECTUAL PROPERTY.
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|
|
1.35
|
|
“ OREXIGEN MATERIALS
” means any proprietary materials provided by OREXIGEN to
CYPRESS.
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|
|
1.36
|
|
“ OREXIGEN PATENT
RIGHTS ” means:
|
|
|
(a)
|
|
the
DUKE PATENT RIGHTS; and
|
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|
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|
|
|
(b)
|
|
any
and all patents, patent applications and rights to file any patent
applications with respect to any COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY, together with all divisions, continuations,
continuations-in-part (but only to the extent that the subject
matter of each such continuation-in-part application is described
in and enabled by the disclosure of any such patent applications),
re-examinations, reissues, substitutions, or extensions thereof and
patents issuing from any such patent applications in the United
States and non-U.S. jurisdictions; and or
|
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|
(c)
|
|
OREXIGEN rights in or to all
patents, patent applications and rights to file any patent
applications with respect to any COLLABORATION JOINT INTELLECTUAL
PROPERTY, together with all divisions, continuations,
continuations-in-part (but only to the extent that the subject
matter of each such continuation-in-part application is described
in and enabled by the disclosure of any such patent applications),
re-examinations, reissues, substitutions, or extensions thereof and
patents issuing from any such patent applications in the United
States and non-U.S. jurisdictions.
|
|
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|
|
***
|
|
Certain
information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with
respect to the omitted portions.
|
- 6 -
|
|
1.37
|
|
“ PAYMENT TRANSFER FEES
” shall have the meaning given in Section 3.05
.
|
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|
|
1.38
|
|
“ PRE-CLINICAL STUDIES
” shall have the meaning given in Section 4.02
.
|
|
|
|
|
|
|
|
1.39
|
|
“ PRE-COLLABORATION CYPRESS
INTELLECTUAL PROPERTY ” means all INTELLECTUAL PROPERTY
owned by, either partially or wholly, or licensed to, or otherwise
controlled by, CYPRESS, as of the EFFECTIVE DATE.
|
|
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|
|
1.40
|
|
“ PRE-COLLABORATION
INTELLECTUAL PROPERTY ” means the PRE-COLLABORATION
CYPRESS INTELLECTUAL PROPERTY and/or PRE-COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY.
|
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|
|
1.41
|
|
“ PRE-COLLABORATION
OREXIGEN INTELLECTUAL PROPERTY ” means all OREXIGEN
PATENT RIGHTS as of the EFFECTIVE DATE and all other INTELLECTUAL
PROPERTY owned by, either partially or wholly, or licensed to, or
otherwise controlled by, OREXIGEN as of the EFFECTIVE DATE
necessary to practice the OREXIGEN PATENT RIGHTS and all
INTELLECTUAL PROPERTY, excluding those defined in subsection
1.25(A) of this AGREEMENT, owned by, either partially or wholly, or
licensed to, or otherwise controlled by, OREXIGEN as of the
EFFECTIVE DATE useful to practice the OREXIGEN PATENT
RIGHTS.
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|
|
1.42
|
|
“ RESPONDENT ”
shall have the meaning given in Section 20.04(a)
.
|
|
|
|
|
|
|
|
1.43
|
|
“ RESPONDENT’S
PROPOSAL ” shall have the meaning given in Section
20.04(b) .
|
|
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|
|
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|
|
1.44
|
|
“ REPONSE ” shall
have the meaning given in Section 20.04(a) .
|
|
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|
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|
|
1.45
|
|
“ RUNNING ROYALTY
” shall have the meaning given in Section 3.01(b)
.
|
|
|
|
|
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|
|
1.46
|
|
“ SUBLICENSE ”
and “ SUBLICENSE AGREEMENT ” means any
relationship/agreement in which a THIRD PARTY gains any rights,
temporary or otherwise, to any of the rights granted by OREXIGEN to
CYPRESS under this AGREEMENT (including, but not limited to,
CYPRESS AFFILIATES, assignee(s), licensee(s), sublicensee(s),
marketing partner(s) and the like, hereinafter, such THIRD PARTIES
referred as “SUBLICENSEES”), including, but not limited
to those granted via options, rights of first refusal, material
transfer agreements, sublicenses (implied or expressed), and the
like, but excluding any THIRD PARTY that purchases LICENSED
PRODUCTS as the end user thereof.
|
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|
|
1.47
|
|
“ TERRITORY ”
means the world.
|
|
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|
|
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|
|
1.48
|
|
“ THIRD PARTY ”
means any individual or other entity other than OREXIGEN and/or
CYPRESS.
|
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|
|
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|
|
1.49
|
|
“ VALID CLAIM ”
means (i) an issued and unexpired claim within the OREXIGEN
PATENT RIGHTS that has not been permanently revoked or
held
|
- 7 -
|
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|
|
invalid or unenforceable by a
decision of a court or other governmental agency of competent
jurisdiction and that has not been dedicated to the public or
admitted to be invalid or unenforceable through reissue, disclaimer
or otherwise, or (ii) a claim of a pending patent application
within the OREXIGEN PATENT RIGHTS that was filed in good faith, has
not been pending for more than [***]([***]) years, and which has
not been abandoned or finally disallowed without the possibility of
appeal or refiling of such application contained in the OREXIGEN
PATENT RIGHTS in the country in which any such product or part
thereof is made, used or sold.
|
|
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|
|
1.50
|
|
Where appropriate, words denoting a
singular number only shall include the plural and vice
versa.
|
|
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|
|
|
|
|
1.51
|
|
Certain other defined terms shall
have the meanings given them elsewhere in this
AGREEMENT.
|
ARTICLE 2
– OPTION/LICENSE/SUBLICENSES
|
|
2.01
|
|
LICENSE . OREXIGEN hereby grants to CYPRESS
and CYPRESS hereby accepts from OREXIGEN, subject to the terms,
conditions and restrictions of this AGREEMENT, the exclusive,
worldwide right and sublicenseable license (or, in the case of the
DUKE PATENT RIGHTS, sublicense) under the OREXIGEN INTELLECTUAL
PROPERTY RIGHTS, until the end of the term for which the OREXIGEN
PATENT RIGHTS are granted, unless this AGREEMENT shall be sooner
terminated according to the terms hereinafter provided
to:
|
|
|
(a)
|
|
develop, make, have made, import,
use, lease, offer for sale, sell, and distribute LICENSED
PRODUCTS;
|
|
|
|
|
|
|
|
(b)
|
|
develop, make, have made, import,
use, lease, offer for sale, sell, and distribute LICENSED
PROCESSES;
|
|
|
|
|
|
|
|
(c)
|
|
develop, make, have made, perform,
provide, import, use, lease, offer for sale, sell, and distribute
LICENSED SERVICES; and/or
|
|
|
|
|
|
|
|
(d)
|
|
practice and use the OREXIGEN
INTELLECTUAL PROPERTY RIGHTS, other than OREXIGEN PATENT RIGHTS,
and to use the OREXIGEN MATERIALS, insofar as such practice and use
is required to carry out the activities under subsections (a)-(c)
above.
|
|
|
2.02
|
|
LICENSE RESTRICTIONS
.
|
|
|
(a)
|
|
The
LICENSE shall be limited to the FIELD and the TERRITORY.
|
|
|
|
|
|
|
|
(b)
|
|
CYPRESS agrees not to develop,
market or sell, directly or indirectly, a LICENSED PRODUCT under
the OREXIGEN INTELLECTUAL PROPERTY RIGHTS that is a combination of
[***].
|
|
|
|
|
|
***
|
|
Certain
information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with
respect to the omitted portions.
|
- 8 -
|
|
(c)
|
|
CYPRESS agrees not to develop,
market or sell, directly or indirectly, a LICENSED PRODUCT under
the OREXIGEN INTELLECTUAL PROPERTY RIGHTS for an indication for
weight loss and/or the treatment of obesity but CYPRESS may develop
a LICENSED PRODUCT under the OREXIGEN INTELLECTUAL PROPERTY RIGHTS
for an indication for which the label discusses the prevention of
weight gain associated with mirtazapine or setiptiline.
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2.03
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OPTION/EFFECTIVENESS OF
LICENSE . The
LICENSE granted by OREXIGEN to CYPRESS under
Section 2.01 shall not become effective unless and
until CYPRESS exercises its option (the “ OPTION
”), in accordance with the terms and conditions of this
Section 2.03 , that the LICENSE shall become effective.
The OPTION shall be exercisable only during the OPTION TERM.
Exercise of the OPTION must be in writing and clearly establish the
unconditional intention of CYPRESS to make the LICENSE effective.
If CYPRESS has not exercised the OPTION and timely delivered the
payments required by Section 3.01(b) during the OPTION
TERM, then the OPTION shall expire and irrevocably
terminate.
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2.04
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SUBLICENSES . CYPRESS shall have the right to
grant SUBLICENSES. All SUBLICENSES shall be subject to the terms
and conditions of this AGREEMENT, shall be no less favorable to or
protective of OREXIGEN than this AGREEMENT except as expressly
stated in this AGREEMENT and CYPRESS shall remain responsible for
the performance of its THIRD PARTY sublicensees. All SUBLICENSES
will be assigned to OREXIGEN in the event the AGREEMENT is
terminated by OREXIGEN pursuant to Sections 10.04 ,
10.05 , or 10.06 , subject to OREXIGEN’s
approval, such approval not to be unreasonable withheld or delayed.
CYPRESS shall use commercially reasonable efforts to enforce the
terms of the SUBLICENSE agreements. CYPRESS further agrees to
provide OREXIGEN with a copy of all SUBLICENSES within thirty
(30) days of execution of each subject SUBLICENSE. No
SUBLICENSES (whether or not conditional or subject to effectiveness
of the LICENSE) may be granted by CYPRESS, however, prior to
exercise of the OPTION by CYPRESS.
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2.05
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NO OTHER RIGHTS GRANTED
. The LICENSE granted
under this AGREEMENT will not be construed to confer any rights
upon CYPRESS by implication, estoppel or otherwise as to any
intellectual property data, technology or other property rights
held by OREXIGEN (solely or jointly) not specifically set forth
herein, regardless of whether such property rights are dominant or
subordinate to any of the OREXIGEN PATENT RIGHTS.
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2.06
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DUKE AGREEMENT
. OREXIGEN agrees that
it will not enter into any amendment of the DUKE AGREEMENT which
diminishes the rights and/or interests of CYPRESS under this
AGREEMENT, without the prior written consent of CYPRESS, which
shall not be unreasonably withheld.
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ARTICLE 3
– LICENSE FEE, ROYALTIES AND OTHER FEES
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3.01
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COMPENSATION TO OREXIGEN
. In consideration of
the right granted to CYPRESS pursuant to this AGREEMENT by
OREXIGEN, and the performance of the services by OREXIGEN as
specified in Section 4.02 , and further subject to the
terms and conditions of this AGREEMENT, CYPRESS agrees to pay
OREXIGEN as follows:
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(a)
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Upfront Payments
. CYPRESS shall make
payments to OREXIGEN as follows:
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(i)
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the
sum of One Million Dollars ($1,000,000) at the time of execution of
this AGREEMENT, which shall include support for activities of
OREXIGEN under the COLLABORATIVE WORK PLAN; and
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(ii)
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the
sum of Five Hundred Thousand Dollars ($500,000) on the earlier of
February 1, 2005 or the OPTION EXERCISE DATE.
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(b)
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Royalty on NET SALES of LICENSED
PRODUCTS .
At the times and in the manner set forth hereinafter, CYPRESS shall
pay to OREXIGEN a non-refundable running royalty on NET SALES of
LICENSED PRODUCTS (hereinafter such running royalty referred to as
the “ RUNNING ROYALTY ”), based on the level of
NET SALES during any calendar year, as follows:
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Royalty
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Rate
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Annual NET SALES
Levels
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[***]
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[***]
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[***]
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[***]
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The
applicable RUNNING ROYALTY rate for a particular NET SALES level
shall apply only to such NET SALES level. Therefore, as an example,
if NET SALES for a particular calendar year were $400 million,
[***].
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***
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Certain
information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with
respect to the omitted portions.
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Notwithstanding the foregoing, if
(a) CYPRESS (and/or appertaining SUBLICENSEES, as the case may
be) obtains from any THIRD PARTY any licenses and/or sublicenses
for patent rights in order to practice OREXIGEN PATENT RIGHTS in
the FIELD or in order to develop, make, have made, use, import,
offer for sale, sell, import, export or provide LICENSED PRODUCTS
(including, without limitation, as a result of any claim referred
to in subsection (b)), or (b) any claim is made against
CYPRESS (and/or appertaining SUBLICENSEES, as the case may be)
alleging that the practice of the OREXIGEN PATENT RIGHTS in the
FIELD infringes any THIRD PARTY patent, then CYPRESS (and/or
appertaining SUBLICENSEES, as the case may be) shall be entitled to
credit, in the case of subsection (a), any payment by CYPRESS
(and/or appertaining SUBLICENSEES, as the case may be) of
additional running royalties to such THIRD PARTY(ies), if any, on
LICENSED PRODUCTS, and, in the case of subsection (b), fifty
percent (50%) of any reasonable costs and expenses (including,
without limitation, attorneys’ fees, but excluding any
judgments or any settlements in connection with such claims)
incurred by CYPRESS (and/or appertaining SUBLICENSEES, as the case
may be) in connection with any such infringement claim against the
RUNNING ROYALTY for the subject LICENSED PRODUCTS, in the
appertaining country(ies) during the appertaining time period,
provided that in no event shall the amount otherwise payable to
OREXIGEN as RUNNING ROYALTY be reduced to less than [***] percent
([***]%) of NET SALES for the subject LICENSED PRODUCTS in the
appertaining country(ies) during the appertaining time period;
provided further that, in the case of subsection (b), any amounts
that would have been credited in any period, but are not credited
due to the [***] percent ([***]%) limitation, shall be carried
forward to the following periods until all such amounts have been
credited against the RUNNING ROYALTY for the subject LICENSED
PRODUCTS.
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Without limiting the credit
available above, in the case of RUNNING ROYALTIES payable by
CYPRESS for NET SALES by any SUBLICENSEE, the RUNNING ROYALTY
payable by CYPRESS shall not exceed [***] percent ([***]%) of
royalties received by CYPRESS from such SUBLICENSEE (net of any
payment on such royalties that CYPRESS is obligated to pay to THIRD
PARTIES with respect to LICENSED PRODUCTS) but in no event will be
lower than [***] percent ([***]%) of such NET SALES by such
SUBLICENSEE.
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The
RUNNING ROYALTIES shall be payable on a LICENSED PRODUCT by
LICENSED PRODUCT and country by country basis from the date of
first commercial sale of a given, LICENSED PRODUCT in a given
country until, the expiration of the last to expire of the OREXIGEN
PATENT RIGHTS containing a VALID CLAIM that, absent assignment or
license, would be infringed by the manufacture, use or sale of such
LICENSED PRODUCT in such country.
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(c)
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Milestone Payments
. CYPRESS (and/or
appertaining SUBLICENSEES, as the case may be) shall pay OREXIGEN
the following one-time, noncreditable, non-refundable payments
within [***]([***]) days of the first
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***
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Certain
information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with
respect to the omitted portions.
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occurrence of each of the following
milestones achieved by CYPRESS (and/or any SUBLICENSEES, as the
case may be) as relates to a LICENSED PRODUCT:
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3.02
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TAXES . OREXIGEN shall pay any and all
taxes levied on account of any payments made to it under this
AGREEMENT. If any such taxes are required to be withheld by CYPRESS
(and/or appertaining SUBLICENSEES, as the case may be), CYPRESS
(and/or appertaining SUBLICENSEES, as the case may be) will
(a) deduct such taxes from the payment made to OREXIGEN,
(b) timely pay the taxes to the proper taxing authority, and
(c) send proof of payment to OREXIGEN and certify its receipt
by the taxing authority within forty-five (45) calendar days
following such payment.
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3.03
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LATE PAYMENTS
. All payments due from
CYPRESS (and/or appertaining SUBLICENSEES, as the case may be)
pursuant to this AGREEMENT shall be due and payable in accordance
with the terms and conditions of this AGREEMENT, and if a payment
due pursuant to this AGREEMENT is not paid within [***] ([***])
days of the payment due date, then a late payment fee equal to
[***] percent ([***]%) of such payment shall, be added to the
payment due; provided, however, in addition to the late fee
described above, all past due payments shall bear interest at the
[***]
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***
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Certain
information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with
respect to the omitted portions.
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[***] from the
due date of such payment until paid. The payment of such interest
and late fees shall not foreclose OREXIGEN from exercising any
other rights it may have as a consequence of the lateness of any
payment.
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3.04
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NO MULTIPLE ROYALTIES
. No multiple royalties
on NET SALES shall be payable to OREXIGEN on a single LICENSED
PRODUCT because its manufacture; use, lease, sale or practice are
or shall be covered by more than one of the OREXIGEN PATENT RIGHTS.
In addition, no royalty on NET SALES shall be payable to OREXIGEN
with respect to any LICENSED PROCESS or LICENSED SERVICE to the
extent a royalty on NET SALES is paid to OREXIGEN with respect to a
LICENSED PRODUCT used in or resulting from such LICENSED PRODESS or
LICENSED SERVICE.
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3.05
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METHOD OF PAYMENT
. All payments due to
OREXIGEN under this AGREEMENT shall be paid in United States
Dollars in Princeton, New Jersey, or at such place as OREXIGEN may
reasonably designate consistent with the laws and regulations
controlling in any foreign country. If any currency conversion
shall be required in connection with such payments due hereunder,
such conversion shall be made by using the exchange rate prevailing
at Bank of America (N.A.) (or its successor, as the case may be) on
the last business day of the reporting period to which such
payments relate. If payments are made by wire, electronic or other
transfer form for which a fee is charged (“ PAYMENT
TRANSFER FEES ”), CYPRESS (and/or appertaining
SUBLICENSEES, as the case may be) shall be responsible for the full
amount of such fees and shall promptly reimburse OREXIGEN for
OREXIGEN’s payment of such reasonable PAYMENT TRANSFER FEES
within thirty (30) days of invoice of the same from OREXIGEN.
OREXIGEN shall be responsible for making all payments required of
OREXIGEN under the DUKE AGREEMENT.
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ARTICLE 4
– COLLABORATIVE WORK/DUE DILIGENCE
REQUIREMENTS
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4.01
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COLLABORATIVE WORK
. CYPRESS and OREXIGEN
shall collaborate in the development of LICENSED PRODUCTS through
assistance to be provided by OREXIGEN as outlined on APPENDIX B and
referred to herein as the “ COLLABORATIVE WORK PLAN
”, which shall include the PRE-CLINICAL STUDIES and CLINICAL
STRATEGY ASSISTANCE (the “ COLLABORATIVE WORK
”). The COLLABORATIVE WORK PLAN shall be updated by mutual
agreement of OREXIGEN and CYPRESS within thirty (30) days of
the date of this AGREEMENT. CYPRESS shall have final
decision-making authority with regard to development and
commercialization of LICENSED PRODUCTS, including, without
limitation, whether to develop any LICENSED PRODUCTS for
depression. OREXIGEN shall make all PRE-COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY and COLLABORATION OREXIGEN INTELLECTUAL
PROPERTY available for review by CYPRESS.
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***
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Certain
information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with
respect to the omitted portions.
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4.02
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PRE-CLINICAL STUDIES
. Under the
COLLABORATIVE WORK PLAN, OREXIGEN, through [***] (a consultant of
OREXIGEN), shall conduct pre-clinical studies (the “
PRE-CLINICAL STUDIES ”) at [***]. The PRE-CLINICAL
STUDIES shall include:
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(a)
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[***] ; and
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(b)
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[***] .
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The
parties recognize that, taking into account the uncertainties of
drug development, it may be necessary, from time to time, to amend
the objectives of the COLLABORATIVE WORK PLAN and/or extend the
delivery date of the data from PRE-CLINICAL STUDIES. CYPRESS hereby
agrees to accept any reasonable proposals to amend the scope of the
COLLABORATIVE WORK PLAN in light of OREXIGEN’S experience in
conducting the PRE-CLINICAL STUDIES, provided that such amendments,
in the aggregate, shall not result in an extension of completion of
the PRE-CLINICAL STUDIES by more than [***]([***]) days. The
PRE-CLINICAL STUDIES shall be deemed completed when OREXIGEN
delivers to CYPRESS data which satisfies all requirements and
objectives established in the COLLABORATIVE WORK PLAN. Any
extension of the completion of the PRE-CLINICAL STUDIES beyond
[***]([***]) days shall extend the OPTION EXERCISE DEADLINE by the
extent to which such extension exceeds
[***]([***])[***].
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4.03
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CLINICAL STRATEGY
ASSISTANCE .
OREXIGEN shall assist CYPRESS in its strategy with, respect to the
planned proof of concept trials (the “ CLINICAL STRATEGY
ASSISTANCE ”), as described in the COLLABORATIVE WORK
PLAN. CYPRESS will have responsibility and sole decision making
authority with respect to all clinical trials for LICENSED
PRODUCTS, including, without limitation, the planned proof of
concept trials, and all regulatory and other matters relating to
the LICENSED PRODUCTS.
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4.04
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OWNERSHIP OF INTELLECTUAL
PROPERTY .
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(a)
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PRE-COLLABORATION CYPRESS
INTELLECTUAL PROPERTY and COLLABORATION CYPRESS INTELLECTUAL
PROPERTY .
All rights and title to PRE-COLLABORATION CYPRESS INTELLECTUAL
PROPERTY will belong to CYPRESS, and all rights and title to
COLLABORATION CYPRESS INTELLECTUAL PROPERTY, whether patentable or
copyrightable or not, will belong to CYPRESS.
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(b)
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PRE-COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY and COLLABORATION OREXIGEN INTELLECTUAL
PROPERTY .
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***
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Certain
information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with
respect to the omitted portions.
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All
rights and title to PRE-COLLABORATION OREXIGEN INTELLECTUAL
PROPERTY will belong to OREXIGEN and all rights and title to
COLLABORATION OREXIGEN INTELLECTUAL PROPERTY, whether patentable or
copyrightable or not, will belong to OREXIGEN, subject to the
LICENSE to be granted hereunder.
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(c)
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COLLABORATION JOINT INTELLECTUAL
PROPERTY .
All rights and title to COLLABORATION JOINT INTELLECTUAL PROPERTY,
whether patentable or copyrightable or not, will belong jointly to
CYPRESS and OREXIGEN and will be subject to the terms and
conditions of this AGREEMENT. Each party will have the right to
independently practice and to license such COLLABORATION JOINT
INTELLECTUAL PROPERTY, without accounting to the other party,
subject to the LICENSE during the term of this AGREEMENT, and only
to the extent that the practice of such COLLABORATION JOINT
INTELLECTUAL PROPERTY by CYPRESS or any sublicensee does not
require rights under PRE-COLLABORATION OREXIGEN INTELLECTUAL
PROPERTY, COLLABORATION OREXIGEN INTELLECTUAL PROPERTY, or any
other INTELLECTUAL PROPERTY owned by, either partially or wholly,
or licensed to OREXIGEN, and that the practice of such
COLLABORATION JOINT INTELLECTUAL PROPERTY by OREXIGEN or any
sublicensee does not require rights under PRE-COLLABORATION CYPRESS
INTELLECTUAL PROPERTY, COLLABORATION CYPRESS INTELLECTUAL PROPERTY,
or any other INTELLECTUAL PROPERTY owned by, either partially or
wholly, or licensed to CYPRESS. If such COLLABORATION JOINT
INTELLECTUAL PROPERTY contains any PRE-COLLABORATION INTELLECTUAL
PROPERTY, COLLABORATION INTELLECTUAL PROPERTY or other INTELLECTUAL
PROPERTY owned by, either partially or wholly, or licensed to, the
other party, the inventing party will only have the rights to
practice and license the COLLABORATION JOINT INTELLECTUAL PROPERTY
as negotiated with such other party pursuant to a license agreement
or other agreed-upon arrangement. Notwithstanding the foregoing,
OREXIGEN shall not have the right to practice or to license (other
than to CYPRESS) any COLLABORATION JOINT INTELLECTUAL PROPERTY, to
the extent of the LICENSE granted to CYPRESS, so long as the
LICENSE is in effect. Additionally, subject to the provisions of
Section 8.02 , so long as the LICENSE is in effect,
each party will have the right but not the obligation to bring, at
its own expense, an infringement action against any third party
under its interest in COLLABORATION JOINT INTELLECTUAL PROPERTY,
subject to the same limitations as set forth above with respect to
the practice of such COLLABORATION JOINT INTELLECTUAL PROPERTY by
CYPRESS or OREXIGEN. The parties will assist one another and
cooperate in any such litigation, at the other&
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