Confidential Treatment has been
requested
for portions of this document marked with asterisks.
RESEARCH AND LICENSE
AGREEMENT
This Agreement,
effective as of April 1, 2006 (the “Effective
Date”), is by and between:
NEW YORK
UNIVERSITY (hereinafter “NYU”), a corporation organized
and existing under the laws of the State of New York and having a
place of business at 70 Washington Square South, New York, New York
10012
INTELLECT
NEUROSCIENCES, INC. (hereinafter “INI”), a corporation
organized and existing under the laws of the State of Delaware
having its principal office at 7 West 18 th Street, 9 th Floor, New York, New York 10011.
WHEREAS,
Drs. Blas Frangione, Thomas Wisniewski, and Einar Sigurdsson
of NYU (hereinafter “the NYU Scientists”) have made
certain inventions relating to use of a vaccine for the mitigation,
prophylaxis or treatment of Alzheimer’s Disease, all as more
particularly described in the U.S. and foreign patent applications
and patents owned by NYU, identified in annexed Appendix I,
which forms an integral part hereof (hereinafter “the
Pre-Existing Inventions”);
WHEREAS, NYU is
willing to perform the NYU Research Project (as hereinafter
defined);
WHEREAS, INI is
prepared to sponsor the NYU Research Project;
WHEREAS, subject
to the terms and conditions hereinafter set forth, NYU is willing
to grant to INI and INI is willing to accept from NYU the License
(as hereinafter defined);
NOW, THEREFORE, in
consideration of the mutual promises and agreements contained
herein, the parties hereto hereby agree as follows:
1.01.
“Affiliate” shall mean any company or other legal
entity which controls, or is controlled by, or is under common
control with, INI; control means the holding of twenty five and one
tenth percent (25.1%) or more of (i) the capital and/or
(ii) the voting rights and/or (iii) the right to elect or
appoint directors.
1.02.
“Calendar Year” shall mean any consecutive period of
twelve months commencing on the first day of January of any
year.
1.03. “Date
of First Commercial Sale” shall mean the date on which a
Licensed Product is first offered for sale by INI or an Affiliate
or sublicensee of INI.
Confidential Treatment has been
requested
for portions of this document marked with asterisks.
1.04.
“Field” shall mean the prophylaxis, mitigation and/or
treatment of Alzheimer’s Disease.
1.05.
“License” shall mean the exclusive worldwide license to
practice the Research Technology (as hereinafter defined) for the
development, manufacture, use and sale of the Licensed Products (as
hereinafter defined) in the Field.
1.06.
“Licensed Products” shall mean any vaccine for the
mitigation, prophylaxis or treatment of Alzheimer’s Disease,
covered by a claim of any unexpired NYU Patent (as hereinafter
defined) which has not been disclaimed or held invalid by a court
of competent jurisdiction from which no appeal can be taken, or
which incorporates or is developed using NYU Know-How.
1.07. “Net
Sales” shall mean the total amount invoiced in connection
with sales of the Licensed Products to any person or entity that is
not a Affiliate or a sublicensee of INI or a Affiliate under the
License, after deduction of all the following to the extent
applicable to such sales;
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all
trade, case and quantity credits, discounts, refunds or
rebates;
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ii)
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allowances or credits for
returns;
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iii)
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sales commissions; and
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iv)
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sales taxes (including value-added
tax).
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1.08. “NYU
Know-How” shall mean the Pre-Existing Inventions and any
information and materials including, but not limited to,
pharmaceutical, chemical, biological and biochemical products,
technical and non-technical data, materials, methods and processes
and any drawings, plans, diagrams, specifications and/or other
documents containing such information, discovered, developed or
acquired by, or on behalf of students or employees of NYU during
the term and in the course of the NYU Research Project.
1.09. “NYU
Patents” shall mean all United States and foreign patents and
patent applications, and any divisions, continuations, in whole or
in part, reissues, renewals and extensions thereof, and pending
applications therefor:
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(1)
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which claim Pre-Existing Inventions
and which are identified on annexed Appendix I; or
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(2)
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which claim inventions that are
made, in whole or in part, by students or employees of NYU during
the term and in the course of the NYU Research Project.
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1.10.
“Research Period” shall mean the 2-year period
commencing on the Effective Date hereof and any extension thereof
as to which NYU and INI shall mutually agree in writing.
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Confidential Treatment has been
requested
for portions of this document marked with asterisks.
1.11. ”NYU
Research Project” shall mean the investigations at NYU during
the Research Period (as hereinafter defined) into the Field under
the supervision of the NYU Scientist(s) in accordance with the
research program, described in annexed Appendix II, which
forms an integral part hereof.
1.12.
“Research Technology” shall mean all NYU Patents and
NYU Know-How.
This Agreement
shall be effective as of the Effective Date and shall remain in
full force and effect until it expires or is terminated in
accordance with Section 16. hereof.
3.
Performance of the NYU Research Project.
3.01. In
consideration of the sums to be paid to NYU as set forth in
Section 4 below, NYU undertakes to perform the NYU Research
Project under the supervision of the NYU Scientists during the
Research Period. If, during the Research Period all of the NYU
Scientists shall cease to supervise the NYU Research Project, then
NYU shall promptly so notify INI and INI shall have the option to
terminate its funding of the NYU Research Project. INI shall
promptly advise NYU in writing if INI so elects. Such termination
of funding pursuant to this Section 3.01 shall not terminate
this Agreement or the License granted herein. Nothing herein
contained shall be deemed to impose an obligation on NYU to find a
replacement for the NYU Scientists.
3.02. Nothing
contained in this Agreement shall be construed as a warranty on the
part of NYU that any results or inventions will be achieved by the
NYU Research Project, or that the Research Technology and/or any
other results or inventions achieved by the NYU Research Project,
if any, are or will be commercially exploitable and furthermore,
NYU makes no warranties whatsoever as to the commercial or
scientific value of the Research Technology and/or as to any
results which may be achieved in the NYU Research
Project.
3.03. Within sixty
(60) days after the end of each year of the Research Period,
NYU shall prepare a written report summarizing the results of the
work conducted on the NYU Research Project during the preceding
year.
3.04. NYU will
have full authority and responsibility for the NYU Research
Project. All students and employees of NYU who work on the NYU
Research Project will do so as employees or students of NYU, and
not as employees of INI.
4.
Funding of the NYU Research Project.
4.01. As
compensation to NYU for work to be performed on the NYU Research
Project during the Research Period, subject to any earlier
termination of the Research Project pursuant to Section 3.01
hereof, INI will pay NYU the total sum of $200,000, payable in
eight (8) equal consecutive quarterly installments of $25,000
each, commencing upon the Effective Date and on each of the three
(3), six (6), nine (9), twelve (12), fifteen (15), eighteen (18),
and twenty-one (21) month anniversaries thereof.
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Confidential Treatment has been
requested
for portions of this document marked with asterisks.
4.02. Nothing in
this Agreement shall be interpreted to prohibit NYU (or the NYU
Scientists) from obtaining additional financing or research grants
for the NYU Research Project from government agencies, which grants
or financing may render all or part of the NYU Research Project and
the results thereof subject to the patent rights of the U.S.
Government and its agencies, as set forth in Title 35 U.S.C.
§200 et seq .
5.01. Subject to
the License granted to INI hereunder, it is hereby agreed that all
right, title and interest, in and to the Research Technology, and
in and to any drawings, plans, diagrams, specifications, and other
documents containing any of the Research Technology shall vest
solely in NYU. At the request of NYU, INI shall take all steps as
may be necessary to give full effect to said right, title and
interest of NYU including, but not limited to, the execution of any
documents that may be required to record such right, title and
interest with the appropriate agency or government
office.
5.02. Subject to
the License granted to INI hereunder, for so long as the NYU
Scientists are employed by NYU, any and all inventions made by the
NYU Scientists and relating to the Field shall be owned solely by
NYU.
6.
Patents and Patent Applications.
6.01. NYU will
promptly disclose to INI in writing any inventions which constitute
potential NYU Patents. INI will promptly disclose to NYU any
inventions which constitute potential NYU Patents and which are
conceived by employees or consultants of INI.
6.02. At the
initiative of INI or NYU, the parties shall consult with each other
regarding the prosecution of all patent applications with respect
to the Research Technology. Such patent applications shall be
filed, prosecuted and maintained by the law firm of Darby &
Darby or by other patent counsel jointly selected by NYU and INI.
Copies of all such patent applications and patent office actions
shall be forwarded to each of NYU and INI. NYU and INI shall each
also have the right to have such patent applications and patent
office actions independently reviewed by other patent counsel
separately retained by NYU or INI, upon prior notice to and consent
of the other party, which consent shall not unreasonably be
withheld.
6.03. Upon prior
written approval by INI, all applications and proceedings with
respect to the NYU Patents shall be filed, prosecuted and
maintained by NYU at the expense of INI. Against the submission of
invoices, INI shall reimburse NYU for all costs and fees incurred
by NYU during the term of this Agreement, in connection with the
filing, maintenance, prosecution, protection and the like of the
NYU Patents. As of the Effective Date, INI has a credit of
$11,659.97 for amounts paid under the Option Agreement dated
August 31, 2005 between the parties which shall be credited
against future amounts owed by INI for patent expenses under this
Agreement.
6.04. NYU and INI
shall assist, and cause their respective employees and consultants
to assist each other, in assembling inventorship information and
data for the filing and prosecution of patent applications on
inventions pertaining to the Research Technology.
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Confidential Treatment has been
requested
for portions of this document marked with asterisks.
6.05. If at any
time during the term of this Agreement INI decides that it is
undesirable, as to one or more countries, to prosecute or maintain
any patents or patent applications within the NYU Patents, it shall
give prompt written notice thereof to NYU, and upon receipt of such
notice INI shall be released from its obligations to bear all of
the expenses to be incurred thereafter as to such countries in
conjunction with such patent(s) or patent application(s) and such
patent(s) or application(s) shall be deleted from the Research
Technology and NYU shall be free to grant rights in and to the
Research Technology in such countries to third parties, without
further notice or obligation to INI, and the INI shall have no
rights whatsoever to exploit the Research Technology in such
countries.
6.06. Nothing
herein contained shall be deemed to be a warranty by NYU
that
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NYU
can or will be able to obtain any patent or patents on any patent
application or applications in the NYU Patents or any portion
thereof, or that any of the NYU Patents will afford adequate or
commercially worthwhile protection, or
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ii)
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that the manufacture, use, or sale
of any element of the Research Technology or any Licensed Product
will not infringe any patent(s) of a third party.
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7.01. Subject to
the terms and conditions hereinafter set forth, NYU hereby grants
to INI and INI hereby accepts from NYU the License.
7.02. NYU reserves
the right to use, and to permit other non-commercial entities to
use, the Research Technology for educational and research purposes
other than conducting clinical trials. No license is granted to INI
outside of the Field.
7.03. The parties
acknowledge that the United States government retains rights in
intellectual property funded under any grant or similar contract
with a Federal agency. The License is expressly subject to all
applicable United States government rights, including, but not
limited to, any applicable requirement that products, which result
from such intellectual property and are sold in the United States,
must be substantially manufactured in the United States.
7.04. The License
granted to INI in Section 7.01 hereto shall commence upon the
Effective Date and shall remain in force on a country-by-country
basis, if not previously terminated under the terms of this
Agreement, for fifteen (15) years from the Date of First
Commercial Sale in such country or until the expiration date of the
last to expire of the NYU Patents whichever shall be later. INI
shall inform NYU in writing of the Date of First Commercial Sale
with respect to each Licensed Product in each country as soon as
practicable after the making of each such first commercial
sale.
7.05. INI shall be
entitled to grant sublicenses under the License on terms and
conditions in compliance and not inconsistent with the terms and
conditions of this Agreement (except that the rate of royalty may
be at higher rates than those set forth in this Agreement)
(i) to a Affiliate or (ii) to other third parties for
consideration and in an arms-length transaction. All
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Confidential Treatment has been
requested
for portions of this document marked with asterisks.
sublicenses
shall only be granted by INI under a written agreement, a copy of
which shall be provided by INI to NYU as soon as practicable after
the signing thereof. Each sublicense granted by INI hereunder shall
be subject and subordinate to the terms and conditions of this
License Agreement and shall contain (inter-alia) the following
provisions:
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(1)
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the
sublicense shall expire automatically on the termination of the
License, provided that upon the request of any sublicensee in good
standing, NYU shall grant to such sublicensee the same license
which the sublicensee received under the sublicense with INI under
an agreement in which such sublicensee shall pay to NYU the
royalties and other payments which it would have paid to INI under
the sublicense;
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(2)
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the
sublicense shall not be assignable, in whole or in part;
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(3)
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the
sublicensee shall not grant further sublicenses; and
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(4)
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both during the term of the
sublicense and thereafter the sublicensee shall agree to a
confidentiality obligation similar to that imposed on INI in
Section 11 below, and that the sublicensee shall impose on its
employees, both during the terms of their employment and
thereafter, a similar undertaking of confidentiality;
and
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(5)
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the
sublicense agreement shall include the text of Sections 14 and
15 of this Agreement and shall state that NYU is an intended third
party beneficiary of such sublicense agreement for the purpose of
enforcing such indemnification and insurance provisions.
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7.06. Within sixty
(60) days after the Effective Date, INI may request in writing
to add one or more additional indications of the Research
Technology outside of the Field to the License. Upon receipt of
such written request by NYU, the parties shall negotiate in good
faith terms under which such additional indication(s) shall be
added to the License, which terms shall include a mutually
agreeable development plan with specific funding and development
milestones, under which INI shall diligently develop the Research
Technology for such additional indication(s). If the parties are
unable to agree on such terms within sixty (60) days after
INI’s written request to NYU, then INI shall have no further
rights to such additional indication(s) and NYU shall be free to
grant rights for such additional indication(s) to third
parties.
8.01. In
consideration for the grant and during the term of the License with
respect to each Licensed Product, INI shall pay to NYU:
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(a)
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a
non-refundable, non-creditable license fee of two hundred thousand
dollars ($200,000) according to the following schedule:
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on or before
May 1, 2006: twenty-five thousand dollars ($25,000);
on or before June 1, 2006: twenty-five thousand dollars
($25,000);
on or before April 1, 2007: fifty thousand dollars
($50,000);
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Confidential Treatment has been
requested
for portions of this document marked with asterisks.
on or before
April 1, 2008: fifty thousand dollars ($50,000); and
on or before April 1, 2009: fifty thousand dollars
($50,000).
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(b)
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upon the achievement of the
following technical milestones, with respect to each Licensed
Product, the payments as indicated below:
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Upon
commencement of the first Phase III clinical trial of a Licensed
Product
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Upon receipt of
the first approval to market a Licensed Product in the U.S., the
European Economic Community, or Japan
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(c)
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A
royalty of *** of the Net Sales of INI or of Affiliate or of a
sublicensee of INI or Affiliate; provided that if INI is required
to obtain a license from a third party in order to manufacture,
use, or sell a Licensed Product, then INI may deduct the royalties
paid to the third party from the royalties payable to NYU, provided
that the royalties payable to NYU shall not be reduced to less than
*** of Net Sales; and
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(d)
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a
percentage of any consideration, monetary or otherwise (not based
on Net Sales), received by INI from a sublicensee of INI (not being
a Affiliate) under the terms of, or as a consideration for the
grant of, a sublicense of any rights or for grant of an option to
acquire such a sublicense to the Research Technology, which
percentage shall be equal to *** if the sublicense or option is
entered into after the start of the first Phase I clinical trial of
a Licensed Product, and *** if the sublicense or option is entered
into prior to the start of the first Phase I clinical trial of a
Licensed Product; provided that if such consideration also includes
consideration for INI sublicensing rights acquired from a third
party necessary to make, use, or sell a Licensed Product, then INI
may deduct the percentage of sublicense consideration paid to the
third party from the percentage of sublicense revenue payable to
NYU hereunder, provided that the percentage of sublicense revenue
payable to NYU hereunder shall not be reduced to less than *** of
what it otherwise would have been.
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8.02. Beginning
with Calendar Year 2010 and continuing thereafter until this
Agreement shall terminate or expire, INI agrees that if the total
royalties paid to NYU under subsection 8.01(c) hereof do not amount
to one hundred thousand dollars ($100,000) in each
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Confidential Treatment has been
requested
for portions of this document marked with asterisks.
Calendar Year,
INI will pay to NYU within sixty (60) days after the end of
each such Calendar Year, as additional royalty, the difference
between the amount of the total royalties paid to NYU by INI in
such Calendar Year and one hundred thousand dollars ($100,000),
failing which NYU shall have the right solely at its election, upon
written notice to INI, to either terminate this Agreement for cause
or to declare the License granted herein to INI to be
non-exclusive.
8.03. For the
purpose of computing the royalties due to NYU hereunder, the year
shall be divided into four parts ending on March 31,
June 30, September 30, and December 31. Not later
than sixty (60) days after each December, March, June, and
September in each Calendar Year during the term of the License, INI
shall submit to NYU a full and detailed report of royalties or
payments due NYU under the terms of this Agreement for the
preceding quarter year (hereinafter “the Quarter-Year
Report”), setting forth the Net Sales and/or lump sum
payments and all other payments or consideration from sublicensees
upon which such royalties are computed and including at
least
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the
quantity of Licensed Products used, sold, transferred or otherwise
disposed of;
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ii)
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the
selling price of each Licensed Product;
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iii)
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the
deductions permitted under subsection 1.07 hereof to arrive at Net
Sales; and
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iv)
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the
royalty computations and subject of payment.
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If no royalties or
other payments are due, a statement shall be sent to NYU stating
such fact. Payment of the full amount of any royalties or other
payments due to NYU for the preceding quarter year shall accompany
each Quarter-Year Report on royalties and payments. INI shall keep
for a period of at least six (6) years after the date of
entry, full, accurate and complete books and records consistent
with sound business and accounting practices and in such form and
in such detail as to enable the determination of the amounts due to
NYU from INI pursuant to the terms of this Agreement.
8.04. Within sixty
(60) days after the end of each Calendar Year, commencing on
the Date of First Commercial Sale INI shall furnish NYU with a
report (hereinafter “the Annual Report”), certified by
an independent certified public accountant, relating to the
royalties and other payments due to NYU pursuant to this Agreement
in respect of the Calendar Year covered by such Annual Report and
containing the same details as those specified in Section 8.03
above in respect of the Quarter-Year Report.
8.05. On
reasonable notice and during regular business hours, NYU or the
authorized representative of NYU shall each have the right to
inspect the books of accounts, records and other relevant
documentation of INI or of Affiliate and the sublicensees of INI
insofar as they relate to the production, marketing and sale of the
Licensed Products, in order to ascertain or verify the amount of
royalties and other payments due to NYU hereunder, and the accuracy
of the information provided to NYU in the aforementioned reports.
The cost of such inspection shall be borne by NYU, unless it is
determined in such inspection that NYU has been
underpaid
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Confidential Treatment has been
requested
for portions of this document marked with asterisks.
in any period
by more than five percent (5%) of the amount which NYU should have
been paid, in which case the cost of such inspection shall be
reimbursed to NYU by INI.
9.01. Royalties
and other payments due to NYU hereunder shall be paid to NYU in
United States dollars. Any such royalties on or other payments
relating to transactions in a foreign currency shall be converted
into United States dollars based on the closing buying rate of the
Morgan Guaranty Trust Company of New York applicable to
transactions under exchange regulations for the particular currency
on the last business day of the accounting period for which such
royalty or other payment is due.
9.02. INI shall be
responsible for payment to NYU of all royalties due on sale,
transfer or disposition of Licensed Products by Affiliate or by the
sublicensees of INI or of Affiliate.
9.03. Any amount
payable hereunder by one of the parties to the other, which has not
been paid by the date on which such payment is made, at the rate of
two percent (2%) per annum in excess of the prime rate prevailing
at the Citibank, N.A., in New York, during the period of arrears
and such amount and the interest thereon may be set off against any
amount due, whether in terms of this Agreement or otherwise, to the
party in default by any non-defaulting party.
10.
Development and Commercialization.
10.01. INI
undertakes to use reasonable diligence to carry out the Development
Plan (annexed hereto as Appendix III and which is an integral
part of this Agreement), including but not limited to, the
performance of all efficacy, pharmaceutical, safety, toxicological
and clinical tests, trials and studies and all other activities
necessary in order to obtain the approval of the FDA for the
production, use and sale of the Licensed Products, all as set forth
in the Development Plan and within all timetables set forth
therein. INI further undertakes to exercise due diligence and to
employ its reasonable diligence to obtain or to cause its
sublicensees to obtain, the appropriate approvals of the health
authorities for the production, use and sale of the Licensed
Products, in each of the other countries of the world in which INI
or its sublicensees intend to produce, use, and/or sell Licensed
Products.
10.02. Provided
that applicable laws, rules and regulations require that the
performance of the tests, trials, studies and other activities
specified in Paragraph 10.01 above shall be carried out in
accordance with FDA Good Laboratory Practices and in a manner
acceptable to the relevant health authorities, INI shall carry out
such tests, trials, studies and other activities in accordance with
FDA Good Laboratory Practices and in a manner acceptable to the
relevant health authorities. Furthermore, the Licensed Products
shall be produced in accordance with FDA Good Manufacturing
Practice (“GMP”) procedures in a facility which has
been certified by the FDA as complying with GMP, provided that
applicable laws, rules and regulations so require.
10.03. INI
undertakes to begin the regular commercial production, use, and
sale of the Licensed Products in good faith in accordance with the
Development Plan and to continue diligently thereafter to
commercialize the Licensed Products.
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Confidential Treatment has been
requested
for portions of this document marked with asterisks.
10.04. INI shall
provide NYU with written reports on all activities and actions
undertaken by INI to develop and commercialize the Licensed
Products; such reports shall be made within sixty (60) days
after each six (6) months of the duration of this Agreement,
commencing six months after the Effective Date.
10.05. If INI
shall not commercialize the Licensed Products within a reasonable
time frame, unless such delay is necessitated by FDA or other
regulatory agencies or unless NY U and INI have mutually agreed to
amend the Development Plan because of unforeseen circumstances, NYU
shall notify INI in writing of INI’s failure to commercialize
and shall allow INI sixty (60) days to cure its failure to
commercialize. INI’s failure to cure such delay to
NYU’s reasonable satisfaction within such 60-day period shall
be a material breach of this Agreement.
11.
CONFIDENTIAL INFORMATION.
11.01. Except as
otherwise provided in Section 11.02 and 11.03 below INI shall
maintain any and all of the Research Technology in confidence and
shall not release or disclose any tangible or intangible component
thereof to any third party without first receiving the prior
written consent of NYU to said release or disclosure.
11.02. The
obligations of confidentiality set forth in Sections 11.01
shall not apply to any component of the Research Technology which
was part of the public domain prior to the Effective Date of this
Agreement or which becomes a part of the public domain not due to
some unauthorized act by or omission of INI after the effective
date of this Agreement or which is disclosed to the INI by a third
party who has the right to make such disclosure.
11.03. The
provisions of Section 11.0 1 notwithstanding, INI may disclose
the Research Technology to third parties who need to know the same
in order to secure regulatory approval for the sale of Licensed
Products.
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