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Exhibit 10.9
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
AND
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.
RECITALS
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. Definitions.
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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i)
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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.
2. Effective Date.
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. Title.
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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i)
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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. Grant of License.
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. Payments for License.
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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Milestone Payments
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i)
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Upon commencement of the first Phase III clinical
trial of a Licensed Product
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**
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ii)
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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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**
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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. Method of Payment.
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.
12. Publication.
12.01. Prior
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